On 9 February 2021, the Hong Kong International Arbitration Centre ("HKIAC") released its latest case statistics for 2020. The statistics illustrate a record year for the HKIAC in terms of number of cases and total amount in dispute.
In 2020, the HKIAC received 318 new arbitration cases, representing a 3.2% increase compared to the previous year. This is also the highest number of cases recorded in the past decade. Out of the 318 new arbitration cases, 203 were administrated by the HKIAC under the HKIAC Administered Arbitration Rules, the UNCITRAL Arbitration Rules and the HKIAC Electronic Transaction Arbitration Rules.
The total amount in dispute also increased to HK$68.8 billion. The types of cases administered by the HKIAC remain diverse, with the top three types of cases being international trade or sale of goods (27%), maritime (18.6%) and corporate (18.3%).
Arbitrations filed with the HKIAC continue to be international in nature. 72.3% of the total number of arbitrations have at least one party which was not from Hong Kong. 31.8% of the arbitrations submitted to HKIAC in 2020 involved no Hong Kong party at all. The geographical origins or nationalities of the parties extended across 45 different jurisdictions. The top five geographical origins or nationalities were Hong Kong, Mainland China, the British Virgin Islands, the United States and the Cayman Islands.
The vast majority of the arbitrations (99.4%) were seated in Hong Kong. Disputes were subject to 12 different governing laws. Hong Kong law remains the most commonly selected governing law, followed by English, Chinese, California and New York laws.
117 hearings were hosted by the HKIAC, despite the COVID-19 pandemic. 80 of these hearings were fully or partially virtual hearings and 37 were in-person hearings that were held at the Hong Kong premises of the HKIAC.
In our previous article published in our Fourth Quarter 2019 IP & TMT Quarterly Review, we discussed the new arrangement facilitating cross-border arbitration between Mainland China and Hong Kong - "The Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and the Hong Kong Special Administrative Region" (the "Arrangement"). The Arrangement came into force on 1 October 2019.
Under the Arrangement, Chinese courts can now grant interim measures in favour of Hong Kong-seated arbitrations, when administered by qualified institutions (including the HKIAC). In 2020, parties in arbitrations involving Chinese parties utilised the distinct advantage offered by the Arrangement. 22 applications under the Arrangement were processed by the HKIAC. These applications were made to 14 different Mainland Chinese courts to preserve evidence, assets, or conduct. In these applications, the Mainland Chinese courts ordered the preservation of assets valued at RMB4.4 billion in total (approximately HK$5.23 billion) in 2020.
Through the COVID-19 pandemic, the HKIAC demonstrated continued growth both in the number of arbitration cases and the total amount in dispute. The same trend of increased number of cases was recorded in the 2020 statistics released by The International Chamber of Commerce (ICC) and The China International Economic and Trade Arbitration Commission (CIETAC). This signals a growing confidence in arbitration as an effective means of dispute resolution. The flexible and confidential nature of arbitration also attracts parties to opt for arbitration over litigation. An additional factor is that these international arbitral institutions were able to quickly respond to the pandemic by implementing adaptive measures, such as virtual hearings and online filings.
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