28 March, 2020
More than four months have passed since the implementation of 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 (the “Arrangement”), which permits parties to Hong Kong- seated arbitrations to seek interim relief from Mainland courts (see our previously published briefing).
As one of the qualified arbitration institutions under the Arrangement, the Hong Kong International Arbitration Centre (the “HKIAC”) previously issued guidance on the details of the procedures that apply to applications made pursuant to the Arrangement, which differ depending on whether an application is made before or after a Notice of Arbitration has been submitted and accepted by the HKIAC (see our previously published briefing).
On 13 February 2020, the HKIAC announced that since the inception of the Arrangement on 1 October 2019, the HKIAC has processed 13 applications by parties to HKIAC-administered arbitrations to preserve evidence or assets in Mainland China of an aggregate value of RMB 5.5 billion (approximately USD 798 million). To date, assets with a total value of RMB1.7 billion (approximately USD 244 million) have been preserved by the Mainland courts.
The HKIAC’s announcement also provided statistics on the nationality of the parties involved in the 13 applications received thus far.
Parties from Mainland China account for approximately 40 percent of the applicants, with the remaining 60 percent being made up of parties from Hong Kong, Switzerland, Singapore, Samoa and the British Virgin Islands. In addition, approximately 60 percent of the applications sought the preservation of assets or evidence possessed by parties from Mainland China, while the remainder involved the preservation of assets owned by parties from Hong Kong, the Netherlands, the British Virgin Islands and the Cayman Islands.
Comment
Considering the relatively short period of time since the implementation of the Arrangement, the significant number of applications processed by the HKIAC, as well as the sheer amount of assets subject to preservation orders granted by the Mainland courts in those applications, are both welcome and encouraging signs.
These statistics highlight the need for interim relief assistance from the Mainland courts to ensure timely protection of parties’ interests while arbitration proceedings are pending. They also reflect the Mainland courts’ preparedness to exercise their power to order interim measures in aid of arbitrations seated in Hong Kong, being by far the one and only non-PRC arbitral seat that can benefit from the availability of such measures from Mainland courts.
For further information, please contac
Melvin Sng, Partner, Head of Dispute Resolution, Asia, Linklaters
melvin.sng@linklaters.com
