China-Hong Kong arbitration agreement comes into force

The Supreme People's Court of China has published the agreement, called The Arrangement, between China and the Hong Kong Special Administrative Region (SAR) which says that companies involved in arbitration can apply for an interim measures order to a court in Hong Kong before or during the arbitration proceedings when the seat of arbitration is in mainland China.

This allows a court in one of the two territories to preserve evidence or freeze assets even if the arbitration is taking place in the other.

Arbitration expert Helena Chen from Pinsent Masons, the law firm behind Out-Law, said, "The Arrangement has placed Hong Kong in a unique position with regard to arbitration involving assets or evidence to be preserved or certain conduct to be ordered in the mainland China because Hong Kong is so far the only seat benefited from the Arrangement outside of mainland China."

"The implementation of the arrangement has been long-awaited after it was signed on 2 April 2019 and we expect the first application under it to be filed very soon," said Chen.

The Arrangement applies to Hong Kong based arbitrations operated by the Hong Kong International Arbitration Centre; the China International Economic and Trade Arbitration Commission Hong Kong Arbitration Centre; the International Court of Arbitration of the International Chamber of Commerce – Asia Office; the Hong Kong Maritime Arbitration Group; the South China International Arbitration Centre (HK), and the eBRAM International Online Dispute Resolution Centre.

The Arrangement applies to arbitrations administered by a mainland China arbitration institution, regardless of whether the seat of arbitration is in the mainland China.

The Arrangement said that parties to the arbitration proceedings administered by the mainland arbitration institutions may apply for interim measures from the High Court of the Hong Kong SAR in accordance with the High Court Regulations of the Arbitration Ordinance of the Hong Kong SAR before the arbitral award is made.