HONG KONG SAR, CHINA Law and Practice Contributed by: Lianjun Li, Matthew Townsend, Patrick Chong and Max Lam, Reed Smith
Reed Smith Richards Butler LLP 17/f One Island East Taikoo Place 18 Westlands Road
Quarry Bay Hong Kong
Tel: 2810-8008 Fax: 2810-1607
Email: lianjun.li@reedsmith.com Web: www.reedsmith.com/en
1. Overview 1.1 National Position
Convention, namely the reciprocity reservation and commercial reservation. The same applies to the ICSID Convention. In 1997, China notified the United Nations and the World Bank that the ICSID Convention would apply to Hong Kong. In 2022, China designated Hong Kong as a constitu- ent subdivision in accordance with Articles 25 (1) and (3) of the ICSID Convention. Although less relevant from an ISDS perspective, Hong Kong is also a party to the 1965 Convention on the Service Abroad of Judicial and Extrajudicial Docu- ments in Civil or Commercial Matters (“Hague Con- vention”). However, service of documents between Hong Kong and Mainland China or Macau does not proceed under the Hague Convention, and is instead governed by a bilateral arrangement. 1.3 Prevalence of Investor–State Arbitration China’s continuing investment into Belt and Road region countries is giving rise to an uptick in claims in disputes between Chinese parties and state par- ties in Africa, Latin America and elsewhere. That said, based on publicly available information, Hong Kong has not been a party to an investor–state arbitration, and there have only been a handful of cases by Hong Kong-incorporated investors against states, a recent example of which is a claim by Shift Energy against Japan brought under the Hong Kong-Japan Bilateral Investment Treaty (BIT). According to publicly avail- able information and our observation, the level of ISDS activity in the APAC region is relatively modest com- pared to other regions in the world.
Investor–state dispute settlement (ISDS) continues to attract significant attention. While the Asia–Pacific historically saw fewer ISDS cases than other regions, recent years have witnessed increased treaty activity that enables foreign investors to bring claims against host states, even as some states have grown more circumspect about potential domestic backlash. With its mature common law system and strategic location, Hong Kong remains a popular seat and hear- ing venue for arbitration and is actively enhancing its infrastructure to stay aligned with international trends. As to policy and position, Hong Kong recognises the importance of ISDS and promotes its availability. Pub- lic statements by senior officials have acknowledged the continuing global trend of ISDS and Hong Kong’s readiness to support such cases institutionally. Hong Kong has not adopted a policy of avoiding ISDS obli- gations, nor has it announced an intention to terminate or withdraw from bilateral investment treaties (BITs) or similar agreements on account of ISDS concerns. 1.2 Arbitration Conventions Upon the resumption of sovereignty over Hong Kong on 1 July 1997, China extended the territorial appli- cation of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) to Hong Kong, subject to the reserva- tions made by China upon accession to the New York
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