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On this article we hear from Charles Allen, associate at RPC and head of the agency’s Hong Kong workplace, as he expands on these tendencies and the issues that face the town and its judiciary post-COVID. What can we count on to see from this jurisdiction in 2024 and past?
As we are actually approaching the ultimate few months of 2023, what tendencies have you ever seen within the Hong Kong industrial litigation house since January?
This 12 months lastly noticed an finish to COVID-19 restrictions in Hong Kong and a complete reopening of the town as a significant hub for worldwide enterprise. Hong Kong stays a well-liked alternative for industrial events to resolve their Asian disputes attributable to its strong widespread regulation judicial system and well-respected and unbiased judiciary.
The shockwaves from COVID-19, provide chain disruptions and the ensuing international financial downturn could be seen within the variety of new enterprise disputes we’ve got seen, together with an uptick within the variety of debt and insolvency claims coming our manner in 2023. Consequently, our disputes observe has remained busy regardless of the worldwide financial downturn.
Equally, the shift in direction of distant working, spurred on by the pandemic, has led our contentious employment observe to see a rise in cross-border disputes stemming from staff working overseas while below Hong Kong contracts of employment.
Cybersecurity stays one other key space of concern for purchasers in Hong Kong. With a marked 50% improve in technology-related crime in Hong Kong within the first half of this 12 months, we proceed to see industrial litigation on this space. Now we have acquired directions throughout 2023 in relation to cybersecurity breaches, restoration of crypto-assets and cyber-fraud. Crypto-asset restoration actions have been assisted by the Hong Kong Courts’ recognition of cryptocurrencies as property within the current landmark case of Re Gatecoin Restricted [2023] HKCFI 914.
Cybersecurity stays one other key space of concern for purchasers in Hong Kong.
We count on crypto litigation to stay prevalent in Hong Kong, notably as the town cautiously reopens itself to retail funding in cryptocurrencies via its brand-new regulatory scheme for digital asset buying and selling platforms overseen by the Securities and Futures Fee.
Worldwide arbitration has remained a extremely well-liked dispute decision device in Hong Kong this 12 months, as I cowl in additional element under.
What different developments have you ever seen in your individual observe this 12 months? Do these tendencies match a broader sample of developments in industrial litigation from earlier years?
A big proportion of the brand new industrial disputes directions we’ve got acquired have been to behave as counsel in arbitrations. It’s clear, in truth, that there was a rise within the variety of arbitrations, persevering with the overall pattern in Hong Kong during which worldwide arbitration is seen as the popular technique of resolving industrial disputes.
The elevated flexibility and confidentiality that worldwide arbitration provides makes it a well-liked choice for industrial events, and the Hong Kong Worldwide Arbitration Centre (HKIAC) stays one of many main international arbitral establishments, receiving its highest variety of filings in over a decade in 2022.
We proceed to see really pan-Asian and international disputes seated in Hong Kong below HKIAC and different guidelines, however with the good thing about numerous agreements with Mainland China, Hong Kong is especially well-liked for disputes with a Mainland aspect. For instance, this 12 months events to Hong Kong arbitrations have made common use of the 2019 Hong Kong-Mainland China association on interim measures, persevering with the pattern of final 12 months during which events sought to protect $1.1 billion of belongings or proof within the Mainland within the HKIAC alone.
The extent of the continued development of arbitration in Hong Kong, in addition to within the breadth of the RPC’s industrial disputes observe, is evidenced by our engagement as counsel this 12 months on arbitrations spanning all kinds of industries, together with the development, insurance coverage and monetary companies industries. In my private capability, I’ve additionally acquired an elevated variety of arbitral appointments this 12 months. New issues embody disputes regarding COVID-era PPE provide contracts and cryptocurrency.
The rise in arbitration could have led to a slight lower within the variety of industrial circumstances going via the courts in Hong Kong, though we proceed to be busy in that enviornment too, particularly within the skilled indemnity house. However, we’ve got seen a slight discount within the variety of enquiries regarding regulatory and competitors disputes.
The elevated flexibility and confidentiality that worldwide arbitration provides makes it a well-liked choice for industrial events
What litigation-related recommendation would you supply to regulation companies and to firms as we close to 2024?
Key recommendation at present is to be affected person when bringing claims within the Hong Kong courts. The courts have a really important workload at present, which means there are lengthy ready lists. For instance, we just lately had a case set down for a 11-day trial halfway via 2025.
However the present burden on the judiciary, the standard of judicial decision-making in Hong Kong stays constantly excessive, and our courts stay a sexy venue for Asian disputes, notably these involving Mainland Chinese language events. I’d due to this fact encourage events to not be deterred by the present backlog of circumstances from selecting the Hong Kong Courts as a venue for industrial disputes.
That mentioned, events requiring tighter management of timelines ought to contemplate together with Hong Kong arbitration clauses of their industrial contracts. As I highlighted above, Hong Kong stays a worldwide chief on this area.
Do you will have any additional observations to make concerning the evolution of business litigation in Hong Kong?
An association that may considerably enhance the convenience of enforcement of Hong Kong judgments in Mainland China (and vice versa) is about to come back into pressure shortly. The Mainland Judgments in Civil and Industrial Issues (Reciprocal Enforcement) Ordinance is slated to come back into pressure this 12 months, and is meant to extra intently combine the enforcement regimes throughout the 2 jurisdictions. Amongst different issues, enforcement will now not require an unique jurisdiction clause in favour of mainland courts, and non-contractual civil judgments and felony proceedings containing an order for the cost of cash can now be enforced in Mainland China.
The Ordinance can even increase the scope of varieties of determination and the variety of designated courts whose choices could be enforced on the Mainland. This elevated enforceability goals to make the Hong Kong courts an much more fascinating and efficient choice, as events may have a path to recoup damages and prices if they’re profitable in a declare in opposition to a Mainland get together.
The heavy workload of senior members of the judiciary has just lately attracted a variety of consideration. In our view, the judiciary may benefit from a significant recruitment drive, particularly for the Excessive Court docket bench. One risk can be to have a better take a look at senior solicitor advocates for potential appointment. They may both be appointed on to the Excessive Court docket bench, or judges from the District Court docket – plenty of whom already sit as deputy Excessive Court docket judges – could possibly be completely promoted, with their positions being backfilled by solicitor advocates concerned with a judicial profession.
By way of process, the Hong Kong courts are at present within the strategy of enhancing their technological capabilities. Court docket e-filing started a staged roll-out in Might 2022, though it’s at present solely out there in private harm and tax actions earlier than the District Court docket. However this roll-out is about to be prolonged to different causes of motion and courts. This could assist to modernise the Hong Kong Court docket system in gentle of post-pandemic methods of working.
Charles Allen, Companion
3504-06, 35/F One Taikoo Place, 979 King’s Highway, Quarry Bay, Hong Kong
Tel: +1 852 2216 7167
Charles Allen is the top of RPC’s Hong Kong workplace and leads its industrial disputes observe. Companion, solicitor advocate and dispute decision lawyer, Charles leverages his 25+ years of expertise of observe within the jurisdiction to advise purchasers on a variety of business disputes throughout the Asia Pacific Area in courtroom and arbitration proceedings. Charles additionally sits as an arbitrator in industrial issues and often sits as Chairman within the Solicitors Disciplinary Tribunal.
RPC is a full-service worldwide regulation agency extensively acclaimed as a disputes powerhouse. It’s wanted by purchasers to behave on a broad number of disputes, together with a number of the most advanced and excessive worth available on the market. Named Legislation Agency of the 12 months thrice since 2014, RPC represents industry-leading purchasers in insurance coverage, retail, media, tech, skilled companies and quite a few different fields.
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