On the afternoon of April 2, the Supreme People's Court of the People’s Republic of China and the Department of Justice of the Hong Kong Special Administrative Region (HKSAR) Government formally signed the "Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administrative Region "("Arrangement").

The promulgation of the Arrangement indicates that the courts of the two places will provide mutual assistance in the application for interim measures submitted by the parties in the arbitration - supporting the parties of the arbitration procedures in Hong Kong to apply for interim measures to the competent people's courts in the Mainland China; meanwhile, the parties of the arbitration procedures in the Mainland China may also apply to the HKSAR courts for interim measures.

There are 13 articles in the Arrangement, which mainly stipulate the scope of the interim measures, the definition of the “arbitral proceedings in Hong Kong”, the procedures and the necessary materials for the parties to file the application to the relevant court for the interim measures.

  • The scope of the Interim Measures

Article 1 of the Arrangement stipulates that the interim measures referred to in this Arrangement includes, in the case of the Mainland, property preservation, evidence preservation, and conduct preservation; and, in the case of the HKSAR, injunction and other interim measures.

Such provision has expanded the scope of the application for interim measures to some extent, and clearly includes the conduct preservation issued in Mainland China and the injunctions issued in the HKSAR within the scope of interim measures.

The rule also released a positive signal of pro-arbitration. It is foreseeable that the anti-suit injunction made in the HKSAR may be recognized and enforced in the Mainland. While prior to this, People's Courts of the Mainland generally refused to recognize the anti-suit injunction issued by the Hong Kong or foreign courts against parties who had commenced proceedings in China. In HUATAI PROPERTY & CASUALTY INSURANCE CO LTD, SHENZHEN BRANCH v CLIPPER CHARTERING SA case, the Wuhan Maritime Court of China even ordered the respondent to apply to the High Court of the HKSAR to withdraw the anti-suit injunction issued by the court.

  • Definition of Arbitral proceedings in Hong Kong

Article 2 of the Arrangement stipulates that the "arbitral proceedings in Hong Kong" shall be seated in the HKSAR and be administered by the following institutions or permanent offices: (1) arbitral institutions established in the HKSAR or having their headquarters established in the HKSAR, and with their principal place of management located in the HKSAR; (2) dispute resolution institutions or permanent offices set up in the HKSAR by international intergovernmental organizations of which the People’s Republic of China is a member; or (3) dispute resolution institutions or permanent offices set up in the HKSAR by other arbitral institutions and which satisfy the criteria prescribed by the HKSAR Government (such as the number of arbitration cases and the amount in dispute, etc.).

The article also clarifies that the list of such institutions or permanent offices will be provided by the HKSAR Government to the Supreme People’s Court and be subject to confirmation by both sides. It can be seen that in the near future, the list of institutions and offices will be officially announced by the government. As an important international financial and legal gateway in the Asia Pacific region, Hong Kong has numerous arbitration institutions and permanent offices. Although the specific list has yet to be further clarified by the authorities, it is more certain that the Hong Kong International Arbitration Centre (HKIAC) will undoubtedly be the first relevant arbitration institution to be officially certified.

At present, many mainland parties and their foreign trading partners tend to choose HKIAC or the Singapore International Arbitration Center (SIAC) as the administrative body for arbitration cases. Based on the authors’ past experience in case handling, the two arbitration institutions are both effective and professional, and can effectively help the parties resolve disputes. In the past cases, since the Mainland People's Courts did not support the recognition and enforcement of the interim measures from the HKSAR, there was indeed less protection for the parties. The promulgation of the Arrangement further consolidated the advantages of choosing HKIAC as the arbitration institution.

  • Procedures and the necessary materials for the parties to file the application to the relevant court for the Interim Measures.

Articles 3 and 6 of the Arrangement regulated the procedures for the parties to file the application to the competent courts for the interim measures. Before the arbitral award is made, a party to an arbitral proceeding in Hong Kong may, by reference to the provisions of the Civil Procedure Law of the People’s Republic of China, the Arbitration Law of the People’s Republic of China and relevant judicial interpretations, make an application for interim measures to the Intermediate People’s Court of the residence of the party against whom the application is made or the place where the property or evidence is situated. Before the arbitral award is made, a party to an arbitral proceeding administered by a Mainland arbitral institution may, pursuant to the Arbitration Ordinance and the High Court Ordinance, apply to the High Court of the HKSAR for interim measures.

Articles 4, 5 and 7 of the Arrangement specify the necessary materials and the necessary items to be stated for the application for interim measures. Such provisions which specify the details increase the transparency of the relevant application and help the parties to apply for interim measures in an efficient and convenient manner.

  • The official entry into force of the Arrangement and its significance.

Article 13 of the Arrangement stipulates that following the promulgation of a judicial interpretation by the Supreme People’s Court of the People’s Republic of China and the completion of the relevant procedures in the HKSAR, both sides shall announce a date on which this Arrangement shall come into effect. The official date of entry into force should be just around the corner.

  • Comments

In international arbitration, it is common that an arbitral tribunal directly issues an interim measures order. However, under the Chinese mainland legal system, on the one hand, an arbitral tribunal has no authority to direct issue the interim measures order and can only transfer the party’s application for interim measures to a competent people’s court; on the other hand, mainland People's Courts generally hold a relatively conservative attitude toward interim measures issued in other jurisdictions and there is few example in which a People’s Court of the Mainland recognizes and enforces interim measures issued in other jurisdictions. Such a difference in judicial practice limits the rights of the parties to some extent.

As the Asia-Pacific international dispute resolution Center, Hong Kong has become a popular choice for many parties to resolve commercial disputes which involve Chinese elements. The official promulgation of the Arrangement is a solid policy support for the recognition and enforcement of relevant interim measures. It greatly assists Hong Kong in providing arbitration services to the parties and makes Hong Kong a more competitive seat of arbitration.

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