What was the genesis of CIETAC Hong Kong and its establishment in 2012?
While it has always been acceptable
to handle cases in which parties have
specifically chosen a non-Chinese
mainland seat (e.g. Stockholm), CIETAC
had a long-term goal to set up subcommissions
in jurisdictions that parties
from China and the rest of the world
considered neutral, pro-arbitration
Among various invitations and choices,
Hong Kong stood out from the rest.
Hong Kong related cases rank second
in number among CIETAC administered
cases. Also, CIETAC valued the support
of the Hong Kong legal system, the
geographical convenience of Hong
Kong, and the wide pool of legal service
providers in the jurisdiction. These
factors were key to CIETAC accepting the
invitation of the Department of Justice of
Hong Kong to open its first branch out of
How does CIETAC Hong Kong differentiate itself from other regional arbitral institutions, including the other CIETAC sub‑commissions?
CIETAC Hong Kong has several features
which make it unique among the many
newly established local arbitration
centers. Its headquarters – CIETAC in
Beijing – is one of the world’s oldest
and busiest international arbitration
centres. In 2018 CIETAC administered
2,962 new cases from more than 60
countries with a dispute amount total
of more than CNY100 billion. With such
case administration experience and user
pool, CIETAC Hong Kong was born a
capable and popular institution.
CIETAC Hong Kong has a default
choice of Hong Kong as the seat for its
administered arbitration cases. This
differentiates it from its mainland
counterparts. The CIETAC mainland subcommissions
administer cases primarily
under the PRC Arbitration Law, which
is quite different from the Hong Kong
Arbitration Ordinance, which is based on
the UNCITRAL Model Law.
Party pattern is another unique feature.
Being a Chinese arbitration institution’s
off-shore branch and situated in a neutral
seat, CIETAC Hong Kong administers cases between Chinese mainland parties and non-Chinese parties.
Regarding appointment of arbitrators,
CIETAC Hong Kong is fortunate to have
a pool of arbitrators who are capable of
handling cases which are cross-border
and/or China-related in nature and are
based in or connected with Hong Kong.
Out of all the nominations CIETAC Hong
Kong has made for a sole arbitrator
or presiding arbitrator, more than 95
per cent are arbitrators from outside
mainland China, including Mr James
Rogers of Norton Rose Fulbright.
What have been the main challenges and successes for CIETAC Hong Kong since it was established?
Three milestone events stand out.
The first is the introduction of Chapter VI
of CIETAC Arbitration Rules 2015.
CIETAC adopts arbitration rules which,
from version to version, consistently
feature what CIETAC considers to be the
best practices of international arbitration
(to the extent they are acceptable under
the PRC Arbitration Law). Accordingly,
the establishment of CIETAC Hong Kong
called for special rules compatible with
the procedural laws and arbitration
practices in Hong Kong, a common
Chapter VI was introduced in the
CIETAC Arbitration Rules 2015 (the
“Rules”), which is exclusively applicable
to arbitration cases accepted and
administered by CIETAC Hong Kong.
The Chapter provides that (unless
parties agree otherwise) cases under
CIETAC Hong Kong shall comply with
the doctrine of kompetenz-kompetenz
(enabling an arbitral tribunal to rule
on the question of whether it has
jurisdiction before intervention by
national courts); and acknowledges the
power of the arbitral tribunal to make
interim measures. A transparentlystructured
fee schedule was also
introduced and implemented.
The second is the “last-mile challenge”
– the off-shore enforcement of a CIETAC
Hong Kong award.
In late 2016, the Nanjing Intermediate
People’s Court of Jiangsu Province
of China (the Intermediate People’s
Court) handed down its ruling ((2016)
Su Ren Gang 1) to enforce an Arbitral
Award issued by CIETAC Hong Kong.
Relying on the Supreme People’s
Court’s Arrangement Concerning
Mutual Enforcement of Arbitral Awards
between Chinese Mainland and Hong
Kong 1999 (which mirrors the New York
Convention on the Recognition and
Enforcement of Foreign Arbitral Awards),
the Intermediate People’s Court found
that the CIETAC Hong Kong award was
in accordance with the procedural laws
of Hong Kong, and enforcement would
not contradict the public interest of
The third is related to an off-shore court’s
ruling in aid of an ongoing CIETAC Hong
Kong administered case.
In June 2017, a local court in Guangzhou,
China accepted a party’s asset preservation
application forwarded by CIETAC Hong
Kong to prevent the respondents from
disposing of their assets. Primarily
relying on Article 28 of PRC Arbitration
Law and upon a financial undertaking
provided by a third party, the Court held
that the tests for approving such
application were satisfied.
The above-mentioned case ((2017)
Yue 0113 Cai Bao 237) illustrates the
“brunch” feature of CIETAC Hong Kong;
it carries both the characteristics of a
Hong Kong seat and a sub-commission
of a Chinese arbitration commission. It
might also be argued that it has provided
a new option of seeking interim relief in
similar arbitrations, albeit (potentially
limited by) the implied restriction in
Article 10 of the PRC Arbitration Law.
The law was changed in 2017 to allow the funding of arbitration in Hong Kong. What impact has this had on the local arbitration landscape?
Hong Kong recently published the
highly-anticipated Code of Practice for
third party funders and announced
that the amendments to the Hong Kong
Arbitration Ordinance (which permit
funding of Hong Kong arbitrations)
would come fully into force on
February 1, 2019. Such amendments
cater to those companies with potential
cash flow and legal finance issues
that are engaged in (or anticipate
being engaged in) an arbitration.
The amendments are widely welcomed
by the legal community in Hong Kong.
It is worth noting that Hong Kong’s
definition of a “third party funder” is
much wider than that of Singapore’s
since the latter is limited to professional
funders only. In Hong Kong a “third
party funder” means any “person who is
a party to a funding agreement … and
who does not have an interest recognized
by law in the arbitration other than under
the funding agreement”. In principle,
this includes lawyers and law firms.
Contemporaneously, CIETAC Hong
Kong published its own Guidelines for
Third Party Funding in Arbitration.
The Guidelines provide practical
checklists for arbitrators, funded parties
and parties seeking funding, in cases
administered by CIETAC Hong Kong
where there is (or it is anticipated that
there will be) third party funding.
Lawyers from Norton Rose Fulbright
were invited and joined the working
group which was primarily responsible
for drafting the same.
CIETAC opened a North America Arbitration Center in Vancouver last year, which is its second branch outside mainland China. What is the intended role of the North American Arbitration Center and how does it differ from the CIETAC sub-commissions, such as CIETAC Hong Kong?
CIETAC opened up its North America
Arbitration Center in Vancouver and
Europe Arbitration Center in Vienna
in 2018. The establishment of the
two Centers made CIETAC the only
Asian arbitral institution that has
establishments in Asia, North America
Currently CIETAC Hong Kong is the
only CIETAC sub-commission outside
mainland China which administers
cases. It may serve as a good example
for the two newly established arbitration
centres to provide more options for
CIETAC users outside mainland China.
What impact do you see the Belt and Road initiative having on arbitration in the region?
The Belt and Road Initiative refers
to the Silk Road Economic Belt and
21st Century Maritime Silk Road,
a significant development strategy
launched by the Chinese government
with the intention of promoting
economic co-operation among
countries along the proposed Belt and
Road routes. It creates unprecedented
opportunities and platforms in history
for financial integration, trade and
investment, facilities connectivity, policy
coordination and cultural exchange.
To facilitate this initiative in terms of
providing dispute resolution services,
several arbitration institutions came
up with inspiring programmes and
schemes. CIETAC’s unique user pool
both request and facilitate CIETAC being
readily available for and capable of
handling Chinese foreign investment
and project disputes. Last year, financial
disputes were the most common in
CIETAC’s 2018 newly administered
cases, among which, a large portion
were Belt and Road related. CIETAC
Hong Kong has, in the meantime, been
reaching out to a number of Belt and
Road countries in Asia for capacity
building and we will only do more in
the coming years.