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More Chinese companies turn to Hong Kong for arbitration

The SCMP ran an article on how an increasing number of mainland companies have been turning to Hong Kong to arbitrate their commercial disputes. The close proximity and cultural similarities to the mainland have meant that the territory is accessible. The article said lawyers in Hong Kong expected the trend to continue, especially for marine, construction and commercial disputes. However, in order for Hong Kong to maintain its attractiveness to mainland parties, costs have to be considered, as arbitration is supposed to be the low-cost alternative to expensive trials.

Source: SCMP

The Hong Kong government has been pushing for the territory to be an arbitration centre. This was seen recently with the China International Economic and Trade Arbitration Commission (CIETAC) establishing its first arbitration centre outside of mainland China. “Backed by a sound legal system and excellent geographic location, Hong Kong has many advantages when it comes to developing international arbitration,” said Wang Wenying, secretary general of CIETAC HK in a previous interview with China Law & Practice. The article does make a good point that arbitration has to be commercially viable. Mainland outfits are notorious for their tight budgets and low cost approach – something that might hamper growth if fees are not aligned with expectations.

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