On 10 May 2018, the Hong Kong International Arbitration Centre ("HKIAC") launched a Panel of Arbitrators for Financial Services Disputes (the "FSD Panel").

The Panel

The FSD Panel is separate from the HKIAC's regular panel of arbitrators, its Panel of Arbitrators for Intellectual Property Disputes launched in March 2016, and its Panel of Emergency Arbitrators, although there is some overlap.

The FSD Panel includes 30 members from 17 jurisdictions, speaking 12 languages, with significant experience in handling financial services disputes.[1] According to the HKIAC, the panel collectively offers experience in financial service disputes covering structured financing, sovereign lending, forex trading, derivatives, asset management, interbank and banking regulatory matters. The current panel members can be found on the HKIAC's website.[2]

Increased Options for Financial Services Arbitration

Recent years have seen increased interest in arbitration for resolving cross-border disputes in the financial services sector. While Hong Kong and the HKIAC have been recognised as leaders in financial services dispute resolution, they are facing increasing competition.

For example:

  • in 2012 P.R.I.M.E. Finance (the Panel of Recognized International Market Experts in Finance) was established by Lord Woolf and others to provide a panel of legal and financial experts for the resolution of financial services disputes;[3] and
  • in April 2015 the Swedish Chamber of Commerce issued an arbitration clause specifically designed for use with the International Swaps and Derivatives Association (ISDA) 2002 Master Agreement.[4]

Arbitration is already a flexible tool that allows parties the freedom to select arbitrators (or agree an institution to appoint arbitrators) based on relevant expertise and selected criteria.

The FSD Panel does not change this flexibility, but it places the need for necessary expertise at the front of parties' minds when selecting a tribunal for finance-related arbitrations. It also allows parties to specify that their dispute is one that merits a tribunal selected from the HKIAC's pre-vetted list.

Belt & Braces

The FSD Panel is a welcome development. It provides another reason to choose the HKIAC either as an administrating institution or as appointing authority for finance disputes.

As more parties look to engage with Mainland Chinese businesses through China's Belt and Road Initiative, Hong Kong's significance as dispute resolution hub will increase.

Parties choosing Hong Kong as the seat of arbitration can rely on the independent and pro-arbitration nature of the Hong Kong courts to support their arbitrations, and on the Arrangement Concerning Mutual Enforcement of Arbitral Awards Between the Mainland and the Hong Kong Special Administrative Region to apply to enforce a Hong Kong award against parties or assets located in China.

The ability to turn quickly to an established panel of finance disputes experts adds to the reasons for parties to agree to resolve disputes over the financing of Belt & Road (and other) deals by arbitration seated in Hong Kong.

Alongside the current expansion of Hong Kong's Financial Dispute Resolution Scheme,[5] the introduction of the HKIAC's FSD Panel demonstrates Hong Kong's ability to provide different dispute resolution procedures suited to the diverse disputes involving Hong Kong as an international financial centre.