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Asia Pacific – ADR In Asia Conference: A Behind The Scenes Review.

11 December, 2013

 

Legal News & Analysis – Asia Pacific

 

ADR In Asia Conference

 

International Arbitration In Asia: A Behind The Scenes Review

 

Hong Kong Arbitration Week – October 23, 2013

 

Hong Kong is a growing arbitration forum and is becoming even more attractive to parties world-wide as new arbitration rules and support become available. That was the message of the day at the ADR in Asia Conference held at the Four Seasons Hotel on 23rd October 2013.

 

The day was kicked off by Huen Wong, JP, Chairman HKIAC, wherein he announced the 2013 HKIAC Administered Arbitration Rules (the “2013 HKIAC Rules“) would take effect on November 1, 2013. He noted that after extensive review of the 2008 HKIAC Administered Arbitration Rules it was time for a set of revised rules that reflected today’s standards in international commercial arbitration. The result was a revised set of guidelines which includes several key revisions pertaining to arbitrator’s fees & expenses, the power to proceed, emergency arbitrators, expedited procedures, and inter-related cases.

 

The audience enjoyed welcome remarks from Dennis Kwok, Member of the HKSAR Legislative Council. Kwok started off by stating, “Arbitration in Hong Kong is supported by two pillars: the legal profession and the judiciary.” He went on to note that in terms of the legal profession as a whole, Hong Kong attracts the cream of the crop. With regards to the judiciary, he noted that a good judiciary system is an independent one, and stated that Hong Kong’s judiciary is among the best with quality judges. He addressed a question that he has heard echoed by others: “should we do arbitration in Hong Kong?” He said the people asking this question are usually concerned about whether Hong Kong is too close to China and whether the “One Country, Two Systems” principle is still intact. In response to this concern he definitively confirmed that the system in place is still very much intact and that it is “nonsense” to consider otherwise. He did, however, assert the need for more government support of arbitration in terms of more financial resources to better publicize Hong Kong’s arbitration capabilities in an effort to continue to attract more people to Hong Kong’s arbitration services. 

 

Following the opening remarks, session I began with a mock debate on whether an arbitral tribunal should have the power to remove counsel when the integrity of the process is jeopardized. The panelists included Teresa Cheng GBS SC JP FICE FCIArb from HKIAC, Elliot Polebaum of Fried Frank, Lord Peter Goldsmith QC, PC of Debevoise & Plimpton, Shai Wade of Stephenson Harwood, Michael Hwang SC who is a Senior Counsel of the Supreme Court of Singapore and Chief Justice of Dubai International Financial Centre Court, Rt. Hon. Lord Millette of Essex Court Chambers, and Paul Mitchard QC of Skadden, Arps, Slate, Meagher & Flom.

 

While both sides presented compelling reasons in support of their arguments, the debate seemed to boil down to a balancing of rights: the right to choice of counsel versus the right to a fair and efficient resolution of the case. Those in favor essentially concluded that there should be some measures in place that allow an arbitrator to remove an attorney who is abusing the process and compromising the integrity of the system by creating a conflict of interest. While those opposed argued the right to one’s choice of counsel would be violated if the arbitrator was embodied with the power to remove an attorney. This issue is sure to be revisited as arbitrators increasingly find themselves faced with the question of whether they should remove an attorney from proceedings.

 

After the staged debate and a quick break, there was an introduction by Matthew Gearing of Allen & Overy on some of the revised HKIAC rules. According to Gearing, the revisions were in part made to make Hong Kong awards more enforceable in China and abroad. Some of the revisions were covered during session II: parts i, ii, & iii allowing the audience to not only learn more about these new rules, but to also see the rules in action as they are intended to be applied moving forward.

 

Following lunch, session III of the day’s agenda was devoted to a round table discussion on “Follow the Money – Third Party Funding.” The panelists were Clive Bowman, Executive Director at IMF (Australia) Ltd., John Choong of Freshfields Bruckhaus Deringer, Susan Dunn from Harbour Litigation Funding, Michael Lee of 20 Essex Street, Kim Rooney of Gilt Chambers, and Selvyn Seidel from Fullbrook Capital Management.

 

Since third party funding and contingency fees are not allowed in litigation cases in Hong Kong with few exceptions, the question is whether that same prohibition applies to arbitration since it takes place in a private setting. The prohibition against third party funding is rooted in the common law prohibition against champerty and maintenance. After a review of how third party funding is handled in Singapore, Australia, United Kingdom, and the United States, there was a general consensus that the laws against champerty and maintenance should be abolished as they no longer seem to apply in the modern world. During Bowman’s review of third party funding in Australia he stated, “rules of champerty and maintenance need to be up with the times…Courts [in Australia] have said there are other laws in place to protect against abuses.”

 

Session IV on the itinerary was an in-house counsel session covering a number of questions from their thoughts on whether the in-house counsel is the weakest link in arbitration to what they look for when selecting an outside law firm to assist with litigation. The panel members included Richard Hill, Associate General Counsel- Global Litigation at Royal Dutch Shell, Stephen Maloy, Matthew Ruby, Vice President and General Counsel for Advanced Micro-Fabrication Equipment, Inc., Lester Schiefelbein Jr. current International Arbitrator and former Vice President and Deputy General Counsel to Lockheed Martin Space Systems Company. The discussion was moderated by Michael Moser of HKIAC.

 

It was a lively forum with all the speakers agreeing that informed in-house counsel were not the weakest link and that they do play a vital role in arbitration as they are the ones managing the case budget and making the final decisions. It also appeared that when selecting outside counsel high importance was placed on knowledge of the industry especially when the case required a high degree of technical expertise and less on the name brand of the law firm.

 

To wrap up the day, the attendees were treated to a speech from keynote speaker Honourable Chief Justice Geoffrey Ma, HKSAR. In his speech he commented on the arbitration ordinances in Hong Kong, and the growing demand for arbitration services in Hong Kong. To that effect he stated, “The number of former judges who sit as arbitrators speaks to the want for arbitration.”

 

The day was an inspirational one for the arbitration world with the introduction of the new and improved 2013 HKIAC guidelines, news that the HKLRC is reviewing the current application of third party funding for arbitration, talks of the increased demand for arbitration in Hong Kong as evidenced by the higher number of cases in 2012, and promises all around to do what is necessary to ensure Hong Kong continues to be an attractive forum for arbitration for party’s world-wide.

 

Overview

 

Session I: Debate – Every Arbitral Tribunal Should Have the Power to Remove Counsel When the Integrity of the Process is Jeopardized

 

Session II: Emergency Arbitrator Application, Expedited Procedures, and Joinder and Consolidation

 

Session III: “Follow the Money” – Third Party Funding

 

Session IV: In-House Counsel Session

 

Official Logo

 

For further information, please contact:

 

Tara Shah, Reporter, Conventus Law

tara.shah@conventuslaw.com 

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