HONG KONG SAR, CHINA Trends and Developments Contributed by: Ralph Sellar, Jason Cheng, Shirley Choi and Grace Jia, Slaughter and May
IOMed gives institutional expression to Article 33 of the UN Charter, which promotes the peaceful settle- ment of disputes through means such as negotiation, enquiry and mediation. The IOMed’s mandate spans three distinct catego- ries of disputes: (i) state-to-state disputes; (ii) disputes between a state and a national of another state, com- monly referred to as investor–state disputes; and (iii) disputes arising out of or relating to international com- mercial relationships between private parties. To ser- vice this wide range of functions, the IOMed maintains two Panels of Mediators, one dedicated to state-to- state disputes specifically, and a General Panel cov- ering investor–state and commercial disputes. Each contracting state may designate up to five persons to the Panel of State-to-State Mediators and up to twenty persons to the General Panel of Mediators. The IOMed demonstrated its practical utility shortly after its establishment. One of the IOMed’s first report- ed cases saw it facilitate the resolution of a global maritime dispute involving a charter party chain (ie, a maritime shipping arrangement in which a vessel is hired through a series of successive charter con- tracts), offering an early indication of its value as an effective forum for international commercial dispute resolution. In Hong Kong, the IOMed is conferred international legal personality and full legal capacity under the Convention, including the capacity to enter into con- tracts, own and dispose of property, and to initiate or defend legal proceedings. Consequently, the Interna- tional Organizations (Privileges and Immunities) (Inter- national Organization for Mediation) Order (Cap. 558 sub. leg. Q) (the “Order”) is deemed to have come into effect on 29 August 2025. The Order implements the privileges and immunities afforded to the IOMed under the Convention and formally recognises its legal status in Hong Kong. Notably, the Order also extends procedural protections to those participating in the IOMed mediation proceedings: persons appearing as mediators, parties, agents, counsel, witnesses or experts in proceedings concerning state-to-state or investor–state disputes are accorded immunity from personal arrest or detention and from legal process in respect of words spoken or written and all acts
performed in the course of their participation. The selection of Hong Kong as the IOMed’s headquarters cements the city’s status as a key hub for international dispute resolution and reinforces its broader role in international legal co-operation. Practitioners should nonetheless be mindful of the current limits of the IOMed’s domestic legal effect. Whilst “mediated settlement agreement” is defined under the Mediation Ordinance (Cap. 620) as “an agreement by some or all of the parties to mediation settling the whole, or part, of their dispute”, neither the Mediation Ordinance nor the Order provides for an enforcement mechanism for such agreements. Medi- ated settlement agreements are therefore enforced in Hong Kong on the basis of ordinary contractual prin- ciples as legally binding contracts. The continued growth of international mediation, embodied by the establishment of the IOMed in Hong Kong, nonetheless signals a new and significant chap- ter in the development of Hong Kong’s dispute resolu- tion landscape, with scope for the domestic mediation framework to continue to evolve alongside. Transition from Absolute to Restrictive State Immunity The law on state immunity as applicable to Hong Kong has undergone a significant change with the introduc- tion of the Law of the People’s Republic of China on Foreign State Immunity ( 中华人民共和国外国国家豁免法 ) (“FSIL”), which came into effect on 1 January 2024. To recap, following Democratic Republic of the Congo v FG Hemisphere Associates LLC (2011) 14 HKCFAR 95, and pursuant to the interpretation made by the Standing Committee of the National People’s Con- gress (NPCSC) in relation to Articles 13 and 19 of the Basic Law of the Hong Kong Special Administrative Region in 2011, it has been settled that the Central People’s Government of the People’s Republic of China (PRC) has the power to determine the rules or policies on state immunity to be applied in Hong Kong, and Hong Kong courts must give effect to such rules or policies. Prior to 2024, Hong Kong followed the approach adopted in the PRC, namely the doctrine of absolute
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