Hong Kong Arbitration Ordinance: more amendments proposed

For the second time in two years, Hong Kong’s government has announced that it will introduce amendments to the Arbitration Ordinance (Cap. 609). The proposed amendments are designed to remove legal uncertainties relating to the Schedule 2 “opt-in mechanism” for domestic arbitration.

The Department of Justice announced the proposed changes on 21 January, in response to requests by Hong Kong’s arbitration community. The Bill was gazetted on 23 January.

The amendments would allow parties to domestic arbitrations in Hong Kong to decide on the number of arbitrators. Currently, although parties to Hong Kong arbitrations are generally free to determine the number of arbitrators (s.23 Arbitration Ordinance), domestic arbitrations to which Schedule 2 of the Arbitration Ordinance applies must be submitted to a sole arbitrator. 
Other proposed amendments include updating the Ordinance’s list of parties to the the New York Convention, to reflect the addition of Bhutan, Burundi, the Democratic Republic of the Congo and Guyana as new states party to the Convention, and the British Virgin Islands (following the UK’s recent notification to extend the territorial application of the New York Convention to the BVI).

The Arbitration (Amendment) Bill 2015, which contains the above amendments, was gazetted on 23 January and will be introduced into Hong Kong’s Legislative Council on 4 February.

The proposed amendments are to be welcomed, as a further indication that Hong Kong is willing to update its arbitral legislation regularly, and to respond to feedback from its arbitral community.

 

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38th FA Mann Lecture – “‘Judge not, that ye be not judged': judging judicial decision-making”

The 38th FA Mann Lecture will take place at 18:00 on Thursday 29 January 2015 at The Old Hall, Lincoln’s Inn, London, WC2A 3TL.

The title for this year’s lecture is: “‘Judge not, that ye be not judged': judging judicial decision-making”. The lecture will be presented by Lord Neuberger of Abbotsbury and chaired by Lord Justice Vos.

This is the 38th in a series of annual lectures in honour of the late Dr FA Mann QC (Hon) (1907-1991), arranged by the partners of Herbert Smith Freehills and given under the auspices of the British Institute of International and Comparative Law.

Please click here for further information.

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Investment protection and ISDS in the TTIP: the discussion continues with another public consultation around the corner

Yesterday afternoon, the EU Commission issued its Report on the outcome of the public consultation on the inclusion of investment protection and investor-state-dispute-settlement (ISDS) in the Transatlantic Trade and Investment Partnership (TTIP) being negotiated between the EU and the US. As discussed in our blog post here, the public consultation was launched against the backdrop of vociferous debate about the nature of ISDS and investment protection more generally and in relation to the TTIP. The controversy surrounding investment protection and ISDS in connection with the TTIP is described in our recent podcast.

It is no surprise that the Report reveals strong opposition to, and concerns about, ISDS in the TTIP. It is also no surprise that the discussion as to both the content of the investment protections (including any “right to regulate”, as it is known), and the nature of the mechanism by which these can be enforced, will continue. In its Report, in response to the criticisms of inclusion of ISDS in the TTIP, the Commission refers back to the fact that the consultation takes place in specific circumstances in which the Council (and therefore, to all intents and purposes, each Member State) has unanimously entrusted the Commission to negotiate high standards of investment protection and ISDS within the TTIP, providing the final outcome corresponds to EU interests.   Further, whilst the negotiating directives include an element of conditionality and make clear that a decision on whether or not to include ISDS is to be taken during the final phase of negotiations, it cannot be ignored that the US position is also that investment protection and ISDS should feature in the TTIP.

Whilst the consultation received an extremely high proportion of pre-populated responses organised by NGOs (which generally opposed the inclusion of ISDS), it also solicited responses from a broad cross-section of stakeholders which has allowed the Commission to identify a number of key points areas (or “core issues”) to develop. These are:

  • The protection of the right to regulate
  • The supervision and functioning of arbitral tribunals
  • The relationship between ISDS arbitration and domestic remedies
  • Review of ISDS decisions for legal correctness through an appellate mechanism

The Commission has committed to a further consultation in the first quarter of 2015.  However, at this stage it is not clear how the next consultation on these “core issues” will put the Commission in a better position to develop the investment chapter. For example, the “right to regulate” is the flip-side of the guarantee to an investor of fair and equitable treatment. Any re-consideration of the right to regulate will be deficient if it does not take into account the positive rights of investors which impact on the state’s right, as well as the sectors in which such right should exist without limitation. Again, the relationship between ISDS arbitration and domestic remedies depends on the balance struck between investment protections and the rights of states.  A holistic approach is needed.

The Commission’s Report on the responses to the Consultation is found here, and the accompanying Commission Memo is found here. Aspects of the Report are considered in further detail below. You may also wish to hear Herbert Smith Freehills public international law partner Matthew Weiniger QC discussing these issues on the Today programme on Radio 4 on 14 January 2014 (at 18.55 mins into the broadcast).  

For further information, please contact Matthew Weiniger QC, partner, Christian Leathley, partner, or Andrew Cannon, partner, or your usual Herbert Smith Freehills contact.

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Shanghai court ruling confirms SHIAC’s jurisdiction over arbitrations referred to “CIETAC Shanghai Sub-commission”

On 4 January 2015, only three days after the China International Economic and Trade Arbitration Commission (CIETAC) announced the reorganisation of its Shanghai and South China/Shenzhen sub-commissions (see our post of 31 December 2014), the Shanghai International Arbitration Centre (SHIAC) published on its website the civil ruling in Ni Laibao and Liu Donglian v. Soudal Investment Limited[1] (Civil Ruling), catching the attention of many followers of the turf war between CIETAC and SHIAC.

The Civil Ruling, which was handed down by Shanghai No.2 Intermediate People’s Court (Shanghai Court) on 31 December 2014, confirmed that SHIAC, as an arbitration commission duly registered in Shanghai, has jurisdiction over an arbitration where the parties agreed in a 2010 contract to arbitrate before the CIETAC Shanghai sub-commission. Continue reading

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Herbert Smith Freehills Global Arbitration Practice announces relocation of partner Andrew Cannon to Paris

Herbert Smith Freehills today announced that London-based international arbitration partner Andrew Cannon has relocated to Paris. His move strengthens the firm’s unmatched Paris-London arbitration axis, and enhances our common law and public international law expertise in our thriving Paris practice.

Andrew has extensive experience of advising states, state-owned entities and major companies on all aspects of public international law. A fluent French speaker, he has acted in ad hoc and institutional arbitrations across multiple jurisdictions and under a range of governing laws. He previously worked as a legal adviser to the UK Foreign and Commonwealth Office, and represented the UK at the UN in New York and the EU in Brussels, as well as in other international institutions.

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Delhi High Court issues anti-arbitration injunction against London arbitration

In a striking decision which bucks the trend of pro-arbitration decisions from the Indian judiciary in recent years, a single judge of the Delhi High Court has restrained McDonald’s from invoking an LCIA arbitration clause in its joint venture agreement with its local partner. The court’s order was issued on the basis that the arbitration agreement was inoperative or incapable of being performed, and on the basis that in an arbitration involving predominantly Indian parties and Indian law, London was a forum non conveniens and therefore the arbitration proceedings were “vexatious” and “oppressive“.

The decision may be subject to appeal, but in the meantime will raise concerns for any parties facing opposition in India to attempts to invoke offshore arbitration in Indian law agreements.

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Podcast – “The TTIP: Cutting through the hype surrounding investment protection and ISDS”

The Transatlantic Trade and Investment Partnership or “TTIP” has been making headlines across the EU and the US over the past months. Petitions against this free trade agreement have been signed by hundreds of thousands and protest actions have taken place across the Member States. In this short podcast, recently posted on our Public International Law Notes blog, partners Christian Leathley and Andrew Cannon look behind the headlines to consider some of the key issues being debated in relation to investment protection and ISDS and the implications of the outcome for investors investing from one market into the other.  

For regular updates on investor-state-dispute-resolution and other public international law issues, please subscribe to our Public International Law Notes blog. Continue reading

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Inaugural conference of the European Federation for Investment Law and Arbitration: 23 January 2015

The European Federation for Investment Law and Arbitration (EFILA) will be holding its inaugural conference on 23 January 2015 at the Senate House in London. The topic of the conference is “EU law and investment treaty law: convergence, conflict or conversation?“. Herbert Smith Freehills is proud to be a sponsor of this important event which will bring together many of the key thinkers in this area, including politicians, civil servants, advisers, practitioners and academics.

For more information and details on how to reserve a place, please see the conference flyer here.

For regular updates on investment treaty law and other public international law issues, please subscribe to our Public International Law Blog (www.hsfnotes.com/publicinternationallaw).

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Recent Developments in India-related international arbitration

Herbert Smith Freehills has issued the latest edition of its Indian international arbitration e-bulletin. This issue considers a number of interesting decisions of the Indian courts, in particular a Delhi High Court judgment which clarifies issues of currency conversion and interest claims when enforcing foreign awards in India, as well as a Bombay High Court ruling that non-signatories to an arbitration agreement were nonetheless bound by it.

We also highlight a decision of the English High Court relating to the enforcement of an LCIA London arbitral award against an Indian party, followed by a round-up of recent Indian arbitration-related news.

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Justin D’Agostino appointed to the Board of the Arbitration Institute of the Stockholm Chamber of Commerce

We are pleased to announce that Herbert Smith Freehills’ Global Head of Dispute Resolution, Justin D’Agostino was formally appointed to the Board of the Arbitration Institute of the Stockholm Chamber of Commerce (the SCC) on 19 December.

The SCC was established in 1917 and provides dispute resolution services for parties from all over the world. The SCC Board of comprises 16 international experts in arbitration from law firms, chambers, academia, and commerce, each of whom are appointed for three years. The Board is empowered to take certain decisions in the administration of arbitrations under the SCC Rules (or where the parties have agreed to their doing so, in other rules or procedures). These include decisions on the jurisdiction of the SCC; appointment of, and challenges to, arbitrators; consolidation of cases and the fixing of arbitration costs.

Justin comments: “I am delighted to have been invited to join the SCC Board. The SCC is a highly regarded, very experienced arbitral institution and I look forward to working with my fellow Board members to help to maintain the SCC’s high standards in administering international arbitrations“.

Justin D'Agostino
Justin D'Agostino
Regional Managing Partner, Asia
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+852 2101 4010

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