Arbitration in Hong Kong: The Tech Revolution of Arbitration and Alternative Dispute Resolution in Hong Kong

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Arbitration in Hong Kong: The Tech Revolution of Arbitration and Alternative Dispute Resolution in Hong Kong

Executive Summary

A growing number of Hong Kong-based legal professionals are urging the industry to embrace innovation. Hong Kong Bar Association and Law Society agreed to a platform which could make traditional arbitrations ancient history.

The Electronic Business-Related Arbitration platform (better known as eBRAM) is a non-profit company, built to provide an efficient and cost-effective alternative to alternative dispute resolution (ADR). CEO, Daniel Lam, describes eBRAM as a platform where « small business people » can access justice.

LawTech can facilitate mediation in cross-border disputes and provide a one-stop dispute resolution to enterprises worldwide.  Hong Kong’s Secretary for Justice, Teresa Cheng reiterated the government’s support for and investment in the legal tech sector- especially when it comes to mediation.

SMEs account for approximately 45% of Hong Kong’s private sector employment. Nick Chang, chairman of eBRAM, suggests that they contribute to roughly 35% of the city’s economy. With robust legal protection, SMEs can increase productivity and further Hong Kong’s economic development.

The government has allocated HK$150 million for the development of this platform. Secretary for Justice Teresa Cheng and Chief Executive Carrie Lam reiterate the government’s support for investment in the legal tech sector, notably to modernise mediation.

eBRAM could change how ADR and cross-border transactions are conducted in Hong Kong, which in turn could have a knock-on effect for the rest of Asia. The cost of lawyers, consultants and experts contribute to the inaccessibility of arbitrations to SMEs.

eBRAM automates critical processes, making arbitration cheaper more accessible to SMEs. Furthermore, this process can enhance access across borders, languages and cultures and save time. Distinctly, participants in the Belt and Road Initiative and the Greater Bay Area may find this advantageous.

Background

Mainland China has historically been hesitant to accept applications for interim measures from parties commencing arbitration outside of the region. However, Courts have indicated they may be receptive to granting interim measures in aid of Hong Kong-seated arbitrations in the last few years.

Most notably, Talpa v. Shanghai Caixing (2016), where a Beijing Court granted interim measures to a Hong Kong seated arbitration. The plaintiff sought injunctive relief from the Beijing IP court, even though the license agreement provided for Hong Kong law and arbitration. It held that the claim was for “trademark infringement’ and not “breach of contract” thus, the Beijing IP court has jurisdiction to issue injunctive relief.

In Ocean Eleven Shipping Corporation v. Lao Kai Yuan Mining Sole Co., Ltd (2016) and Guangdong Yuehua International Trade Holdings Limited v. Sino-Tide Holdings Limited & Ke Junxiang (2016), Mainland courts were allowed to grand relief without specifying a legal basis. These specific cases further emphasized the need for formal arrangements.

The key objectives are as follows:

  1. To cost-effectively facilitate business negotiations;
  1. To prevent disputes involving enterprises worldwide; The Belt and Road region; the Greater Bay Area and Mainland-focused enterprises;
  1. To meet the demand, driven by the expansion of e-commerce, for legal and dispute resolution services across borders to be resolved online utilising innovative technology and artificial intelligence.

The key features are as follows;

  • The platform will provide panels of neutrals (arbitrators and mediators on and off the platform with different areas of expertise and experience) to facilitate the nomination and selection process;
  • The platform will support case-based and role-based access control to case materials, such that documents will only be accessible to the relevant parties;
  • The platform will support multiple, secure, convenient and modern payment methods, such as credit cards, TT transfer, PayPal, e-Cheque and Fast Payment System;
  • The platform will also provide special artificial intelligence functions to facilitate business negotiations and dispute resolution with text translation, real-time translation of chat-style sentences, transcription of online hearing recordings and user authentication for access security (such as facial recognition, silhouette tracking and radio frequency identification);
  • The platform will adopt blockchain technology, giving it utmost security in non-repudiated transaction records and thus enable authenticated parties to upload, download and exchange case materials without security concerns.
  • It will operate through a cloud-based, secured IT infrastructure which allows users to customise applications for specific requirements. Further, eBRAM is accessible anywhere around the world, with an internet connection.

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As the most competitive region for international dispute resolution in Asia, eBRAM presents Hong Kong with various opportunities. Hong Kong’s international Arbitration Centre was established in 1985, strengthening several mediation codes and regulations.

Further, Hong Kong’s reputation is built on a transparent, equitable system of English Common Law and judicial independence. These regulatory and institutional foundations make for an excellent basis for a future LawTech hub.

The government are also exploring the possibilities of establishing a Greater Bay Area Mediation platform, which will adopt common standards on accreditation across the region.

adopt common standards on accreditation across the region.

eBRAM offers parties choice and protection. Parties can benefit from an international, well established legal system and can gain protection if necessary.

ASIALLIANS has extensive experience in arbitration proceedings in China, Hong Kong and Taiwan, both as counsel and arbitrators. Teams from China, Hong Kong and Taiwan regularly intervene in commercial, investment or maritime arbitrations, as well as in procedures for the recognition and enforcement of foreign decisions.

Note: the content of this publication is for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your particular circumstances should always be sought separately before taking any action based on this publication.


Should you need more information about ADR and Arbitration, and/or have inquiries, please do not hesitate to contact us at asiallians@asiallians.com