CIETAC, the Chinese arbitration institute handling most of the foreign related arbitrations, has opened an arbitration centre in Hong Kong. This is CIETAC's first outpost outside of mainland China.
CIETAC arbitration seated in Hong Kong is a welcome alternative for several reasons:
- The arbitrations will be governed by the Hong Kong Arbitration Ordinance, which is part of Hong Kong's well developed legal system.
- The arbitral awards will be enforceable in mainland China under the Arrangement Concerning Mutual Enforcement of Arbitral Awards between Hong Kong and Mainland China (which is modelled on the principles of the New York Convention) and in most other jurisdictions under the New York Convention.
- Arbitration under the CIETAC rules in Hong Kong may be an acceptable compromise if Chinese counterparties prefer arbitration under the rules of a Chinese arbitration institute (as is becoming more common) and foreign parties prefer the arbitration to be seated outside of mainland China.