In September 2018, I authored an article covering the recent legislative reforms allowing third-party funding of arbitration in Hong Kong and Singapore
At that time, unlike the position in Singapore, the corresponding legislative amendments permitting third-party funding of arbitration in Hong Kong were not fully operative. That changed, however, on 1 February 2019 when the relevant provisions in Hong Kong took effect. Cue a plethora of law firm briefings and news articles which - quite rightly - championed this important milestone (indeed, according to Google Trends, a website which analyses how frequently a given search term is entered into Google, the number of searches for "Hong Kong arbitration" spiked dramatically around this time).
In light of the above, it seems an opportune time to reflect on developments in Hong Kong and Singapore which have catapulted both jurisdictions to the forefront of the international commercial arbitration landscape, culminating most recently in the third-party funding reforms. This article is therefore intended to provide a useful "snapshot" of some of the key events over the previous decade or so.
Seat of arbitration
As arbitral seats, both Hong Kong and Singapore have cemented a solid reputation among users of international commercial arbitration, for a variety of reasons: their robust legal systems; strong legal professions; independent judiciary; user-friendly arbitration legislation; effective enforcement of awards; strategic geographic ocations; the availability of a diverse pool of international arbitrators; and the presence of world class arbitration institutions.
The findings of the International Arbitration Survey, conducted by the School of International Arbitration, Queen Mary University of London (QM Survey) since 2006, track the remarkable progress that the two jurisdictions have made as arbitral seats - for example:
- neither Hong Kong nor Singapore was listed as a "preferred" seat of arbitration in the inaugural edition of the QM Survey (2006);
- this changed, however, in the following edition (2010) when Singapore was ranked in the top five preferred seats (behind London, Geneva, Paris and Tokyo);
- by the next edition (2015), both Hong Kong and Singapore were listed in the top five, with Hong Kong ranking third ahead of Singapore in fifth. Survey participants also expressed the view that the most improved arbitral seat globally from 2010 to 2015 was Singapore, followed by Hong Kong;
- in the latest edition of the QM Survey (2018), Singapore and Hong Kong switched places, with the survey noting a "particular global appreciation for Singapore". There are assorted reasons why this may be. Some suggest that Hong Kong is perhaps now less neutral for China-related disputes and parties from certain jurisdictions are consequently shifting their arbitration agreements to provide for Singapore as the seat. Others would disagree with that proposition and instead point to discrete factors in Singapore's favour - for example, a larger pool of home-grown lawyers and the success of Maxwell Chambers which opened in 2010 (reportedly the largest arbitration hearing centre in any jurisdiction) - or put it down to simple market forces; and
- interestingly, when analysing the popularity of the seat of arbitration based on the respective region where survey participants principally practice or operate (Asia-Pacific, Europe, North America, Latin America, Africa and the Middle East), Singapore was ranked in the top four most preferred seats in all regions (except Latin America) and Hong Kong was ranked outside the top seven only in Latin America.
A similar increase in the popularity of the main arbitration institutions in Hong Kong and Singapore - the Hong Kong International Arbitration Centre (HKIAC) and the Singapore International Arbitration Centre (SIAC), respectively - is reflected in the findings of the QM Survey when considering the issue of "preferred" arbitral institutions:
- in the 2006 edition, the HKIAC was ranked eighth in the list of preferred institutions whereas SIAC was not itself ranked but formed part of the "regional" arbitration institutions (constituting those in Singapore, Japan, Mexico, Australia, and Egypt) which together were ranked third.;
- by the 2010 edition, SIAC was ranked as the fourth most preferred arbitration institution and the HKIAC was ranked sixth;
- the two institutions switched places in the 2015 edition - with survey participants expressing the view that the HKIAC was the most "improved" arbitral institution (over the previous five years), followed by SIAC; and
- in the 2018 edition, there was a "noticeable increase in the percentage of respondents who selected the SIAC" as the arbitral institution.
In the Global Arbitration Review?s "Guide to Regional Arbitration - Volume 7, 2019", the HKIAC and SIAC are the only two Asian arbitral institutions which are ranked in the Asia / Asia Pacific "white list" - meaning "dependable in all scenarios" (as opposed to other centres which are ranked as "worth a closer look" meaning they are "perfectly serviceable if it is the right sort of dispute").
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