Belt and Road: Financing and other Issues

HomeContentBelt and Road: Financing and other Issues

Belt and Road:  Financing and othe Issues

Reporter:  Wilfred Ho (Skadden, Arps, Slate, Meagher & Flom) 

The hotly-anticipated second event of Hong Kong arbitration week was a seminar hosted by Skadden, Arps, Slate, Meagher & Flom concerning "Belt and Road: Financing and other Issues".

Because of the topical nature of the presentation, the event was entirely over-subscribed. However, in order to accommodate as many participants as possible, the presentation was video-linked to a separate "spill-out" room.

The seminar took the form of an introduction to the Belt and Road Initiative ("BRI"), constituting the first part, with panel members answering a series of incisive questions on the topic, constituting the second part.

The panel was comprised of eminent arbitration practitioners such as: Rory McAlpine (Partner at Skadden, Arps, Slate, Meagher & Flom), Sarah Grimmer (Secretary-General of the Hong Kong International Arbitration Centre (HKIAC)), Kim Rooney (Member of the ICC International Court of Arbitration and Member of the Council of the Hong Kong Bar Association), Alexis Mourre (ICC International Court of Arbitration President), Dennis Kwok (barrister and Legislative Council member representing the legal profession in Hong Kong), and Rimsky Yuen (barrister and former Secretary of Justice in Hong Kong).

Mr Rory McAlpine opened the event by giving a presentation on the scope and nature of the BRI. He began with the question of "What is the BRI"? Despite the fact that the current scope and nature of the BRI is not settled, he stated that this is in fact an advantage for the global arbitration community.  He pointed out that since only 6 out of the 70 BRI countries are not signatories to the New York Convention, international arbitration is an attractive means for resolving BRI disputes.

Another virtue of the BRI, its broad scope and fluidity, similarly presents a valuable opportunity for the international arbitration community, Mr McAlpine stated. Because there is no overarching framework for dispute resolution, this allows the parties to choose their forum. Arbitration offers clear advantages, considering the cross-jurisdictional aspect of the BRI.

Mr McAlpine also canvassed the various opportunities currently available to resolve BRI disputes. The Supreme People's Court has already established two courts, the International Commercial Court of China in Shenzhen and Xi’an. In the realm of alternative dispute resolution, the Singapore International Mediation Centre has agreed to a memorandum of understanding with the China Council for the Promotion of International Trade/China Chamber of International Commerce. In a similar spirit, the Hong Kong International Arbitration Centre has promulgated new rules on BRI disputes.

Continuing on the theme of alternative dispute resolution, Ms Sarah Grimmer stated that Mainland Chinese parties constituted the second highest number of users in the HKIAC. Other trends, which may not be entirely attributable to the BRI, is the increase of parties from BRI jurisdictions, and an increase in Mainland Chinese parties as claimants.  

What will be a matter of interest for Hong Kong arbitration practitioners is Ms Grimmer's comment on the evolution of nature of disputes in Hong Kong.  She stated that the HKIAC has traditionally attracted many construction and infrastructure disputes, but has more recently seen an increase in post M&A disputes and financing disputes. The complexity of these newer form of disputes has resulted in multi-party disputes and "multi-contract" disputes. The commercial demands of these disputes have also continued to inform the HKIAC’s own practices, especially in the areas of emergency arbitration and expedited procedures.

Mr Alexis Mourre also reflected Ms Grimmer's comment on the consistent numbers of Mainland Chinese users, albeit at the ICC instead of the HKIAC. He stated that Chinese parties constitute the seventh highest number of users at the ICC, although he also echoed Ms Grimmer's comments, that it was difficult to determine which particular disputes are BRI-related.

Ms Kim Rooney then turned to the question of dispute resolution provisions. She stated that this must be a concern for PRC investors when investing overseas, because they are transferring their capital overseas. In that respect, they are no different to other national investors and will therefore want to ensure that they have an effective dispute resolution provision.

Mr Rimsky Yuen took the opportunity to emphasise Hong Kong's judicial independence and its neutrality as indisputable advantages for Hong Kong as a seat of arbitration. This, he noted, would no doubt be attractive for BRI disputes. Mr Yuen also echoed the comment made by Mr McAlpine about the fluidity of the BRI. There is currently no overarching framework for BRI disputes, and there is much to be said for an "evolutionary approach" to the BRI. This is where the arbitration framework lends itself to great advantage.

Mr Dennis Kwok continued Mr Yuen's topic on Hong Kong's advantages as an international arbitration jurisdiction. He placed a particular focus on the implementation of the Third Party Funding Ordinance, the creation of an international dispute resolution hub in the former Court of Final Appeal Building in Hong Kong and the potential legalisation of contingency fees for arbitration in Hong Kong, as specific advantages of Hong Kong.

The event concluded with the discussion of other developments in dispute resolution services, for example, the creation of an online commercial dispute resolution forum, and the International Commercial Court of China. Although the topic for the event focused on the BRI, due to the eminence and cosmopolitanism of the speakers, it became a forum to discuss the latest developments in arbitration in Asia. This, no doubt, was hugely educational for all those present, and at the very least, for this author.

Click Newsletter Blog to go back.

Share this