Hong Kong: Third party funding for mediation delayed

Hong Kong has published its long-awaited Code of Practice for third party funders and announced that amendments to the Arbitration Ordinance, which permit funding of Hong Kong arbitrations, will come fully into force on 1 February 2019.   However, proposed amendments to the Mediation Ordinance (Cap. 620) regarding non-Hong Kong mediations, costs and disclosure of mediation communications have been deferred for further consultation.

The Department of Justice has announced that commencement of these New Mediation Ordinance provisions will be deferred to a future date following further deliberation at the Steering Committee on Mediation. The DoJ will continue to engage the mediation community and relevant shareholders, so that the New Mediation Ordinance provisions may be brought into operation as soon as practicable with the necessary code of practice to complement it. Continue reading

Belt and Road: Supporting the resolution of disputes

We have previously commented on how the sheer complexity and scale of China’s ambitious Belt and Road Initiative is prompting a welcome review of dispute resolution processes including efforts, led and supported by the Chinese government, to encourage mediation clauses in Belt and Road agreements.

In the following article, first published on http://arbitrationblog.kluwerarbitration.com on 16 April 2018, Mingchao Fan (ICC) and Briana Young and Anita Phillips (Herbert Smith Freehills) review the latest development in the efforts to support the resolution of Belt and Road disputes.


 

On 5 March 2018, the ICC Court announced the establishment of a commission to address dispute resolution in relation to China’s Belt and Road Initiative. The commission will drive the development of ICC’s existing dispute resolution procedures and infrastructure to support Belt and Road disputes.

The Belt and Road

The Belt and Road is China’s ambitious infrastructure project spanning more than 70 countries, with an increasing number of non-Chinese investors, contractors and developers – including sovereign states – involved. The project aims to build connectivity and cooperation between China across the land-based Silk Road Economic Belt and the 21st Century Maritime Silk Road. It spans large parts of Asia, the Middle East, Africa and Europe.

A construction and infrastructure initiative on this scale will inevitably generate disputes. With an estimated US$900bn in projects planned or already underway, the project gives rise to a multitude of actual and potential commercial disputes to consider. In response to this, Alexis Mourre, President of the ICC Court, announced the establishment of the commission during the ICC Court’s working session last fall.

It is a competitive field, with numerous existing institutions vying for a share of the Belt and Road disputes market, and new courts and institutions being established specifically for the purpose. It seems clear that parties who adopt the right dispute resolution model in their contracts today will be in a better position to resolve disputes as and when they may arise.

Make-up of the Commission

Justin D’Agostino, Global Head of Disputes at Herbert Smith Freehills and Hong Kong’s alternate member of the ICC Court, has been appointed commission chair. Dr Mingchao Fan, ICC Director for North Asia, will act as secretary. Other commission members are drawn from a range of sectors, representing jurisdictions including the PRC, Hong Kong and Singapore. A broader advisory board, representing other countries along the Belt and Road, is being considered.

ICC recognises the importance of engaging key stakeholders within both corporates and governments all along the Belt and Road, to ensure that it is offering the best possible service to parties on all sides.

Although the ICC Belt and Road Commission’s main objective is to raise awareness of the ICC as a “go-to” institution for disputes arising out of China’s Belt and Road Initiative, the commission has additional relevant aims:

  leveraging ICC’s unparalleled international coverage with secretariats and/or national committees in over 100 jurisdictions to attract Belt and Road disputes;
•  engaging with corporates, state-owned enterprises and governments across all Belt and Road territories; and
  highlighting Belt and Road dispute resolution at a series of events throughout the region, with the aim of promoting ICC’s capabilities widely. Events are planned in locations as diverse as China, Paris, Kazakhstan, Kyrgyzstan, Nigeria, Southeast Asia, Japan and Hong Kong, with more to come.

In the Commission’s view, the combination of the ICC’s tried-and-tested, multi-process services, its unrivalled geographical footprint, and its established credibility and independence, place it in a strong position to resolve Belt and Road disputes.

Sector expertise

On average, construction and engineering disputes account for close to a quarter of all ICC arbitration cases, while the finance and insurance sector accounts for approximately 20%. As the world’s leading arbitral institution, ICC is adept at handling complex multiparty cases as well as high-value, complex multi-party and multi-contract disputes (approximately half of all cases filed involve three or more parties). The introduction in 2017 of an expedited procedure also enables lower-value cases to be handled with greater time- and cost-efficiency.

Mediation matters too

There is no ‘one-size-fits-all’ method of resolving Belt and Road disputes. But there is a concerted effort, led and supported by the Chinese government, to encourage mediation clauses in Belt and Road agreements, with provision for arbitration if mediation fails. ICC is a world-leading arbitration and mediation provider, with tried and tested mechanisms and a strong pool of arbitrators and mediators. It is therefore well placed to provide appropriate, effective dispute resolution services to parties all along the New Silk Road. ICC’s stated objective is to ensure that where disputes arise, they are resolved efficiently and with minimal damage to the parties’ commercial relationships.

The role of mediation in the resolution of Belt and Road Initiative disputes

China’s Belt and Road Initiative (BRI) has gained huge momentum of late, with governments, companies and lawyers keen to maximise the many opportunities it presents. The resolution of disputes arising from the BRI is no exception. The sheer complexity and scale of BRI projects is prompting a welcome review of dispute resolution processes, with a view to resolving BRI disputes more quickly and amicably, ideally in a confidential and enforcement-friendly environment.
Recent developments suggest that the BRI presents an opportunity for less formal procedures, like mediation, to flourish and enter the mainstream. Indeed, three key BRI jurisdictions – China, Singapore and Hong Kong – have recently promoted mediation in the context of BRI disputes.

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Apology legislation passed in Hong Kong – what does it mean for you

On 13 July, Hong Kong’s Legislative Council passed a law (the Apology Law) intended to facilitate the resolution of civil disputes in the territory. The Apology Law, which is expected to be gazetted and come into force shortly, reforms the legal consequences of making any sort of apology (written, oral or by conduct). An apology will not constitute an admission of fault or liability (even if it includes such an admission), nor may it be admissible in evidence to the detriment of the apology maker. This is the case unless the maker of the apology wishes it to be admitted or it falls to be admitted in the usual way through discovery, oral evidence or any equivalent tribunal processes.

Hong Kong is the first jurisdiction in Asia to enact apology legislation and its Apology Law is the broadest enacted to date worldwide. The driver behind it is that apologies may in some circumstances 'unlock' disputes and lead to settlement without recourse to formal legal action. Since parties (and their lawyers and insurers) may be reluctant to do anything that may be construed as an admission of liability, apologies have to date been sparse. The Apology Law seeks to incentivise disputing parties to make apologies, whether in the direct aftermath of an accident or dispute, or further down the line, should the dispute escalate.

The law has far-reaching consequences for anyone involved in contentious civil disputes, whether before the courts or tribunals in Hong Kong. The Apology Law has the scope substantially to change the way insurance, evidence and settlement are approached in civil proceedings and regulatory and disciplinary matters. The scope for ‘tactical’ apologies by counterparties should be borne in mind as set out below.

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Global Pound Conference Hong Kong – a mandate for change

Hong Kong's status as a leading international dispute resolution hub is well-known. It enjoys a strong, independent judiciary as well as world class international arbitration services. Mediation and other forms of ADR are heavily supported by a myriad of institutions. Although not a compulsory requirement, mediation in the context of civil litigation tends to be interpreted by commercial parties as a mandatory step. Against this backdrop, delegates voted at the recent Global Pound Conference Hong Kong, which saw over 200 delegates from across Hong Kong's disputes market congregate to discuss their approach to commercial dispute resolution. Hong Kong's Secretary for Justice, Chief Justice and Solicitor General headlined the conference.

Click here for our ebulletin on the Hong Kong results, and here for an article on technology in dispute resolution, featuring partner May Tai.

Click here to download our synopsis and infographics on the Hong Kong data as featured on our ADR hub.

Click here to download the aggregated results from the first 18 Global Pound Conference events, which have taken place in 12 countries in Africa, the Americas, Asia, Europe and the Middle East. This includes the very first analysis of the overall trends set to shape the future of dispute resolution globally.

The above provide insights for all stakeholders  – commercial parties, lawyers, experts, judges, arbitrators, mediators and government – on the areas of focus for Hong Kong as it seeks to maintain  – and expand – its position as a leading dispute resolution centre.

Mediation in Hong Kong and the Global Pound Conference: article published

Julian Copeman, May Tai and Anita Phillips discuss their client research and the outputs of the recent Global Pound Conference to assess what is required to bring mediation into the mainstream for commercial parties in Hong Kong. Click here to access their article in Asian Dispute Review, which was published on 3 April 2017.

ADR in Asia Pacific: Spotlight on Indonesia

The third edition of our ADR in Asia Pacific Guide spotlights alternative dispute resolution (ADR) in Indonesia. 

We summarise the state of play in relation to ADR in Indonesia and its interplay with adversarial processes like litigation and arbitration. We delve into the detail of the Supreme Court's new mediation regulation and decree and analyse how these hope to improve rates of settlement. We then look at some practical aspects of mediation and dispute resolution from a lawyer's perspective, highlighting the often novel way in which mediation is deployed in Indonesia. Finally, we summarise the ground-breaking Global Pound Conference (GPC) series which looks at all dispute resolution processes and how these can be improved for commercial parties. Herbert Smith Freehills is proud to be global founding sponsor of GPC.

To download your copy, please click here

 

Hong Kong’s Global Pound Conference featured in Asian Dispute Review

Asian Dispute Review, sponsored by the Hong Kong International Arbitration Centre, Chartered Institute of Arbitrators, Hong Kong Institute of Arbitrators and the Hong Kong Mediation Council, has published an article on the Global Pound Conference Series, and what to expect from the Hong Kong event.

The one day Global Pound Conference is coming to the Hong Kong Convention and Exhibition Centre on 23 February and promises to be one of the major dispute resolution conferences of 2017. Delegates from across Hong Kong's dispute market will vote via GPC's voting app, and participate in real time debates by world class speakers.

The full programme is here. Register here before 21 January and benefit from the early bird rate of USD 150.

Herbert Smith Freehills is proud to be a founding sponsor of the Global Pound Conference Series and lead organiser of the Hong Kong event.

Shape the future of dispute resolution: Global Pound Conference moves to Hong Kong

Hosting more than 5,000 corporate and disputes professionals in a series spanning 40 cities across 31 countries, the Global Pound Conference (GPC) is a global conversation about how to improve the resolution of commercial disputes in the 21st century.

Using a unique electronic interactive format, which has been dubbed the blueprint for future conferences, delegates from key stakeholder groups vote anonymously on standardised questions, debated in real time by world class moderators and panellists. The data will be distilled into a global report and white paper, heralding a new era of dispute resolution.  

If you are involved in contentious work (whether litigation, arbitration, ADR or investigations) we invite you take part in this historic series. Click here to find an upcoming GPC event in a city near you and to access the voting results from the events that have taken place to date – in Singapore, Lagos, Mexico City, New York, Geneva, Toronto and Madrid.  To stay up to date on all the conversations and developments throughout the GPC Series, please join us on LinkedIn​.​​

On 23 February 2017, the series moves to Hong Kong. With the backing of leading corporates, institutions and the Department of Justice, the Hong Kong event is set to be a major dispute resolution conference of 2017. General counsel, regional heads and senior executives from leading corporates will share their views, alongside leading international judges, arbitrators and mediators. The Hong Kong event will also include a keynote address from Secretary for Justice, Rimsky Yuen, as well as a closing address from Chief Justice Geoffrey Ma. Click here to access the full programme and here to see the invitation.

Find out more and register your place.

Date:

Thursday, 23 February 2017 

Time:

9am – 6pm, including networking, sit-down lunch

Venue:

The Hong Kong Convention and Exhibition Centre (HKCEC)

Registration fee:

Early bird: US$150 until 31 December 2016

Regular:

US$220

 

ADR in Asia Pacific – Part 3

Further to our earlier posts (here and here) highlighting material from our recently updated Guide to Dispute Resolution in Asia Pacific, we now feature in part 3 the responses from New Zealand, Pakistan, Philippines, Singapore, Taiwan, Thailand and Vietnam to the question whether parties to litigation or arbitration are required to consider or submit to ADR procedures before or during proceedings.

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