CHINA Trends and Developments Contributed by: Ernest Yang, Xiaoshan Chen, Han Ma and Dewey Song, DLA Piper UK LLP
Starting from 2015, the PRC jurisprudence has shown a tendency to broaden the definition of “foreign ele - ments” by giving effect to arbitration and choice-of law-agreements in a wider range of cases. This latest rule is another manifestation of this trend. Effectively, it allows: • Hong Kong- and Macau-invested companies that are registered in Shenzhen and Zhuhai to choose the law of Hong Kong or Macau as the law govern - ing their agreements, and to choose Hong Kong and Macau as their place of arbitration; and • Hong Kong- and Macau-invested companies that are registered in the nine Mainland cities of the Greater Bay Area to choose Hong Kong or Macau as their place of arbitration. By doing so, the rule grants parties more flexibility in choosing their desired approaches to resolve disputes. Enhanced Mainland-Hong Kong Co-Operation in Arbitration The year 2024 also witnessed deepening collabo - ration between Mainland China and Hong Kong in international arbitration. Two major arbitration institu - tions, one in Mainland China and the other in Hong Kong, established offices in each other’s jurisdictions – HKIAC opened its Beijing representative office, while SHIAC established its Hong Kong office. These moves reflect the growing mutual recognition in the realm of arbitration between the two regions. In December 2024, HKIAC became the first foreign arbitration institution to establish a representative office in Beijing. The Beijing office is located in the legal services cluster of the central business district (CBD). This landmark development was facilitated by Beijing’s local legislative reforms, including the “Meas - ures for the Registration and Management of Over - seas Arbitration Institutions Establishing Business Institutions in China (Beijing) Pilot Free Trade Zone”. In April 2024, SHIAC officially launched its Hong Kong centre, reinforcing its presence in the Asia-Pacific arbitration market. This move aligns with the PRC’s push for arbitration institutions to expand internation - ally. SHIAC Hong Kong facilitates cross-border dis - pute resolution by offering arbitration services under both Mainland’s and Hong Kong’s legal frameworks,
leveraging Hong Kong’s common law system and sta - tus as a leading arbitral seat. Exploration and Development of Ad Hoc Arbitration In 2024, the PRC also witnessed a breakthrough in ad hoc arbitration. On 13 June, the Shanghai Municipal Bureau of Justice issued the “Trial Measures for the Promotion of Ad Hoc Commercial and Maritime Arbitration in Shang - hai”. These measures clarified the scope of applica - tion of ad hoc arbitration, the rules on appointment of arbitrators, the measures safeguarding the arbitration proceedings, etc. On 1 July, the Standing Committee of the People’s Congress of Hainan Province issued “Several Provi - sions on the Development of International Commercial Arbitration in the Hainan Free Trade Port”, explicitly allowing ad hoc arbitration to be used to resolve: • commercial disputes between companies regis - tered in the Hainan Free Trade Port and compa - nies from foreign states, Hong Kong, Macau and Taiwan; and • commercial disputes between companies from foreign states, Hong Kong, Macau and Taiwan. On 1 August, the Shanghai Arbitration Association promulgated the “Shanghai Arbitration Association Ad Hoc Arbitration Rules”. The rules were quickly picked up by the parties to resolve disputes. On 15 August, a British industry association and a Pudong shipping company entered into an ad hoc arbitration agreement, agreeing to apply the “Shanghai Arbitra - tion Association Ad Hoc Arbitration Rules” and des - ignating Shanghai as the place of arbitration. In this case, the British industry association and the Pudong company had originally agreed to apply the arbitration rules of the London Court of International Arbitration (LCIA) and arbitrate their dispute in London. However, having comprehensively considered factors such as the monetary value of the disputes and the estimated timeframe and costs, the parties entered into a supple - mentary agreement to use the newly released “Shang - hai Arbitration Association Ad Hoc Arbitration Rules”, and designated Shanghai as the place of arbitration.
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