New policy allows arbitration disputes to be heard in mainland China, Hong Kong SAR or Macao

The policy, passed by the Supreme People’s Court in October 2024 and taking effect from 14 February, provides that courts in mainland China will support the enforcement of arbitration agreements that choose Macau or Hong Kong SAR as the seat of arbitration even if the disputes lack direct Hong Kong or Macau elements.

Courts will support the enforcement of such arbitration awards unless they violate mandatory national laws or the public interest.

Alice Wang, an expert in international arbitration at Pinsent Masons, said: “The Supreme People's Court's recognition of arbitration agreements choosing Hong Kong or Macau as arbitral seat provides legal certainty for businesses involved in cross-border disputes.”

“This reduces the risk of arbitration agreements being challenged or invalidated, ensuring smoother dispute resolution processes,” she said.

“Overall, these measures signal a significant step towards creating a more integrated, efficient, and internationally competitive legal and business environment in the GBA, benefiting both local and foreign businesses operating in the region.”

Hong Kong and Macau-invested enterprises in the nine mainland cities of South China's Greater Bay Area (GBA) can choose any one of mainland China, Hong Kong SAR or Macau as the arbitration venue for resolving commercial disputes.

The policy is aimed at accelerating the development of arbitration institutions in the GBA and establishing a unified arbitration rule system and an online dispute resolution platform.

Wang said: “The establishment of a unified arbitration system and a world-class arbitration centre in the GBA will boost the region's attractiveness to international businesses.”

The policy also focuses on adapting arbitration rules to support AI, digital economy and the life science sectors by providing a legal framework for businesses.