Six ways for Hong Kong to advance its proven legal skills along the ‘Belt and Road’

Chan Chak-ming says a stronger legal infrastructure would see the city’s highly internationalised system shine as the arbiter of choice in the 65-nation project and offer Beijing a unique platform to align with the world

PUBLISHED : Tuesday, 20 September, 2016, 3:56pm
UPDATED : Monday, 01 May, 2017, 2:00pm

The “One Belt, One Road” initiative will be a grand plan for decades, spanning 65 countries and over 4 billion people, with billions of dollars of investment. Given the huge opportunities, we should develop and strengthen our legal services, and turn Hong Kong into an international legal hub.

Law firms work on ways to mitigate stakeholders’ risk in belt-road cross-border deals

The rule of law is a core value of Hong Kong and the cornerstone of the city’s success. The best way to preserve it is to promote and improve our legal infrastructure, which would in turn help preserve Hong Kong’s system under “one country, two systems”.

Hong Kong’s legal services are highly internationalised, and have obvious competitive advantages in helping China address these legal risks

The Belt and Road covers many jurisdictions, from the common law and continental law, to Islamic law, socialist law and a mix. Investors must fully appreciate the risks associated with different jurisdictions and differences in local laws. Hong Kong’s legal services are highly internationalised, and have obvious competitive advantages in helping China address these legal risks.

To better prepare ourselves for Belt and Road opportunities, we must first strengthen our alternative dispute resolution services by attracting renowned arbitration bodies to set up offices here. An international complex to house all forms of alternative dispute resolution services should be established. The iconic former French Mission Building on Government Hill, in Central, would be ideal. Within the complex, there should be a designated court dealing with disputes arising from Belt and Road projects, as well as an academy for training and research.

Meanwhile, we should increase the number of alternative dispute resolution practitioners and expand the panel list of arbitrators/mediators by inviting practitioners from overseas.

Second, we should increase our efforts to promote Hong Kong law as the governing law in Belt and Road contracts and Asian Infrastructure Investment Bank projects, and also promote the use of Hong Kong courts and dispute resolution services.

Hong Kong urged to play up its legal strengths to profit from Beijing’s ‘one belt, one road’ plan

Third, there should be a new dedicated legal officer in the Department of Justice for all Belt-and-Road-related matters to, among other duties, liaise with mainland bodies, like the legal departments of the State-owned Assets Supervision and Administration Commission and state-owned enterprises with Belt and Road projects, as well as promote Hong Kong’s legal services internationally.

Fourth, we should seek to assist in the legal standardisation work of the initiative, beginning by establishing a database of legal information of all Belt and Road countries. Hong Kong is also well-positioned to initiate development of a set of transnational laws applicable to related projects and transactions.

Hong Kong, the dealmaker for China’s ‘One Belt, One Road’

Fifth, we should review and enhance our Arbitration Ordinance by, for instance, considering negative judicial rulings and early dismissal, as introduced in Singapore. The government’s proposals to formalise “third-party funding for arbitration” and introduce an apology law are to be supported.

We should also strengthen the arrangement for reciprocal recognition and enforcement of judgments between the mainland and Hong Kong, and enter into reciprocal recognition arrangements with Taiwan, which has recently amended its Arbitration Law to recognise foreign arbitral awards.

Sixth, since there are some 20 Islamic countries along the Belt and Road, there are opportunities to further develop Islamic finance products in Hong Kong. On the legal side, we need to work with overseas Sharia compliance boards to develop locally a set of internationally accepted Sharia standards. We should encourage local universities to offer Islamic financial law courses and cooperate more closely with foreign Islamic legal and finance experts.

Hong Kong should continually strive to further enhance its strengths and values as a free and open international city. By improving our legal infrastructure and promoting our legal services, we also enhance our judicial independence. We would then be better able to provide what the mainland lacks and act as a unique platform for China to align with the global economy and professional services.

Chan Chak-ming is an honorary research fellow at the Hong Kong Vision Project