It is common ground that Hong Kong is a major international arbitration hub in Asia, and its role will only become ever more important given the advantages in enforcing Hong Kong arbitral awards in Mainland China.
The British Virgin Islands and the Cayman Islands also play an important role in the success of arbitration in Asia. Both jurisdictions have been among the top five geographical originators or nationalities of the parties to arbitration administered by the HKIAC for many years. In the statistics recently published by the HKIAC for 2024, the BVI and the Cayman Islands once again are ranked at number 3 and 4, respectively. With the Hong Kong-Mainland China arrangement on interim measures being in place, the HKIAC have also processed applications to the Mainland Chinese courts under the arrangement to preserve evidence and assets. According to the HKIAC statistics, over 40% of the applications in 2024 involved assets or evidence owned by parties out of the Mainland China, including the BVI and the Cayman Islands.
Families and businesses in Hong Kong, China and across Asia have long used BVI or Cayman Island corporate vehicles as the holding entities for their businesses and assets. Naturally, any subsequent disputes between the stakeholders of these entities will most likely have to be resolved by the BVI and the Cayman Islands courts. That said, as arbitration clauses become an increasingly common feature in the governing contracts between parties (be it shareholders agreements, joint venture agreements or limited partnership agreements), it is foreseeable that arbitrations will only become more and more prevalent as a means for parties, including offshore entities, to resolve their disputes.
Apart from the increased confidentiality and privacy afforded by arbitration, the ability to choose your own arbitrator is an important consideration for parties as it can ensure the tribunal understands all parties' cultural differences and represents their interests. Further, the flexible arbitration regime in Hong Kong allows Asian-based clients to arbitrate BVI or Cayman governed law disputes in Hong Kong, with BVI and Cayman law experts acting as the chair or co-counsel in the arbitration.
If you are involved in an arbitration that involves a BVI or Cayman entity, it is highly likely that issues will arise during the arbitration that require BVI or Cayman law input, as the case may be.
Harneys' team of highly experienced litigation lawyers based in Hong Kong, are complemented by our dispute resolution teams in BVI, Cayman and Bermuda. This presents Harneys with a unique opportunity to act in arbitrations, taking our practice beyond the usual interim remedies or enforcement steps during or following the completion of an arbitration. Harneys is currently acting in several Hong Kong seated arbitrations, working as co-counsel alongside onshore legal advisers. Get in contact if you are interested in learning more about our arbitration practice.
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