The Arrangement concerning Mutual Assistance for interim measures between Hong Kong and the Mainland, which came into force on 1 October 2019, empowers Mainland Chinese courts to order interim measures in support of Hong Kong-seated arbitrations, making Hong Kong the only seat outside Mainland China to benefit from such support.
The Arrangement was signed in April 2019 (see our earlier reports here, here and here), and in our report in October 2019, we noted that parties had been quick to take advantage of the Arrangement (see here).
Published on 27 August 2020, the HKIAC provide a further update, indicating the continued use and success of the Arrangement. The update notes that since the Arrangement came into force, the HKIAC has processed 25 applications made to the Mainland Chinese courts for interim measures.
Here are the key findings (with emphasis in bold):
- All applications were made in arbitrations seated in Hong Kong and administered by HKIAC under its Administered Arbitration Rules.
- All applications were made on an ex parte basis and in arbitrations that had been commenced.
- 24 applications were made for the preservation of assets and one was for the preservation of evidence.
- Approximately 30% of the applications were made by parties from Mainland China and 70% were made by parties from jurisdictions outside of Mainland China (i.e. the British Virgin Islands, the Cayman Islands, Hong Kong, Samoa, Singapore and Switzerland). Approximately 50% of the applications concerned assets or evidence owned by Mainland Chinese parties and 50% concerned assets on the Mainland owned by non-Mainland parties (i.e. from the British Virgin Islands, the Cayman Islands, Hong Kong and the Netherlands).
- The applications were made to 15 different Intermediate People’s Courts (“IPCs”) in the following Mainland Chinese cities: Beijing, Dalian, Hangzhou, Jinan, Lianyungang, Nanjing, Shanghai, Shenzhen, Xiamen, Yantai and Zhaoqing.
- 16 applications were submitted to the IPCs by the applicant directly and nine were submitted by HKIAC to the IPCs upon their request.
- HKIAC issued a letter of acceptance to facilitate each of the 25 applications as required by the Arrangement. HKIAC issues a letter of acceptance typically within 24 hours from its receipt of the application.
- The total value of assets sought to be preserved across all applications was RMB 9.4 billion or approximately USD 1.4 billion.
- HKIAC is aware of 17 decisions issued by the IPCs. All 17 decisions granted the applications for preservation of assets upon the applicant’s provision of security and the total value of assets preserved amounted to RMB 8.7 billion or approximately USD 1.3 billion.
- Based on the information available in respect of 15 of the 17 decisions issued by the IPCs, the average time taken by the IPC to issue a decision was 14 days from its receipt of the complete application.
Helpfully, and in response to the high level of interest in the Arrangement, the HKIAC has published a report to address some of the most frequently asked questions. The report provides an overview of the Arrangement and its effect and covers general information regarding the application process, HKIAC’s role and applications processed by HKIAC under the Arrangement. Click here to access HKIAC Frequently Asked Questions