International Organizations Gathering in Shenzhen Focusing on Investment Arbitration in SCIA

                                        

        Representatives of the World Trade Organization (WTO), the International Centre for Settlement of Investment Disputes (ICSID) of the World Bank, the United Nations Commission on International Trade Law (UNCITRAL), the International Court of Arbitration of the International Chamber of Commerce (ICC) and other international organizations have attended the Forum to witness the latest developments of international investment arbitration as well as discuss and promote the SCIA’s investment arbitration rules together with the SCIA. Over 200 people, including representatives of the Supreme People's Court, the Ministry of Commerce, the State-owned Assets Supervision and Administration Commission of the State Council, the Hong Kong and Macao Affairs Office of the State Council, the Department of Justice of Hong Kong Special Administration Region, as well as officers of well-known companies, government officials, scholars, arbitrators, judges, and lawyers from China, France, Portugal, Italy, Holland, USA, Canada, UK, Swiss, etc. participated in the event.

 

       In the background of “One Belt One Road” and the “Guangdong-Hong Kong-Macau Greater Bay Area”, more and more foreign investments are accommodated by China, especially the Greater Bay Area of Guangdong-Hong Kong-Macau, and outbound investment of Chinese Companies also booms at the same time. Along with the outbound investments and the attraction of foreign investment of our governments, the Chinese companies will encounter an increasing number of international commercial disputes and thus become claimants to the investment arbitration cases between the “investors and host states”. As the international arbitration society have noticed, a company from Shenzhen SEZ has, for the first time in China, filed an arbitration case against a foreign government in the ICSID. However, most companies are still not familiar with the rules of international investment arbitration and unable to protect their legal rights and interests properly. With the encouragement and support from the relevant government authorities, and on basis of in-depth investigation of the domestic and overseas companies, the SCIA took the lead and updated its arbitration rules, becoming the first institution in mainland China that will hear investor-state arbitrations and administer cases under UNCITRAL rules in 2016, which is praised by the Global Arbitration Review (GAR) as the most outstanding innovation of rules in Shenzhen SEZ, China. This Forum is targeted at the discussion and promotion of the SCIA’s investment arbitration rules, so as to provide the “going-out” companies of China with a new method for protecting their legal rights and interests, and promote the internationalization of Shenzhen from “exporting products” to “exporting rules”.

 

     The theme of this Forum is well-tailored for the “outbound” investment of Chinese Companies in the background of “One Belt One Road” Initiative. The presence of Ms. Meg Kinnear, Secretary-General of the ICSID, Ms. Zhao Hong, Member of the WTO’s Appellate Body, Mr. João Ribeiro, Director of the UNCITRAL Regional Centre for Asia and the Pacific, Mr. Fan Mingchao, Director of ICC Arbitration & ADR North Asia, etc. in the Forum in Shenzhen on behalf of their respective international organizations for the purposes of cooperation and joint development, is not only an affirmation and support of the SCIA’s renovation of arbitration rules in Qianhai, but also a witness of the birth of a new vehicle for the cooperation between Shenzhen as an international center for innovation in science and industry and the international organizations along with the growth of China’s influence in the world.

 

       The SCIA, established in 1983, is the first arbitration institution in the region of Guangdong, Hong Kong and Macau, and over one third of its Council Members and arbitrators are from Hong Kong or abroad, which enables it to play an important role in promoting the economic integration of mainland China and Hong Kong as well as the prosperity and stability of Hong Kong. The SCIA’s investment arbitration rules, as discussed and promoted in this Forum, combines the UNCITRAL Arbitration Rules and “Hong Kong as the seat of arbitration”, thus attracted great attention from the Department of Justice of Hong Kong SAR, Hong Kong Bar Association, The Law Society of Hong Kong as well as the society of industry and commerce. The Forum is held at the eve of the 20th anniversary of Hong Kong’s return to China, thus it is able to help the law society from mainland and Hong Kong to promote the in-depth cooperation between Guangdong and Hong Kong pursuant to the “13th Five-Year Plan” in the background of “Guangdong-Hong Kong-Macau Greater Bay Area” strategy, so as to build the highland of international arbitration in the Asia-Pacific region.

 

        Mr. Li Huanan, Deputy-Secretary of Shenzhen, pointed out in his speech that international arbitration is an important aspect and the safeguard for the “One Belt One Road” program and the outbound investments of enterprises. As a window of China’s Reform and Opening-up policy and a major strategic hub of the “One Belt One Road” Initiative, Shenzhen undertakes a special mission in constructing the system of international arbitration and legal services. In recent years, Shenzhen government took advantage of the opportunity of building the socialist model area of rule of law in Qianhai, so as to actively explore the international and sophisticated mechanism for resolution of commercial disputes, and established the SCIA—the first statutory body among China’s arbitration institutions—on basis of the legislation of Shenzhen Special Economic Zone. In 2016, the SCIA successfully introduced the UNCITRAL Arbitration Rules for the first time in China and released the arbitration rules for investment arbitration cases between investors and the host states, which will surely provide a strong legal support for the “going-out” of Chinese Companies.

 

       Mr. Zhang Yongjian, Member of the Judicial Committee, Director of the Civil Adjudication Tribunal No.4 and Deputy Director of the First Circuit Court of the Supreme People's Court, Mr. Yi Xuedong, Deputy Director of the Department of Policies, Laws and Regulations of the State-owned Assets Supervision and Administration Commission of the State Council, Ms. Zhao Hong, Member (Judge) of the WTO’s Appellate Body, Mr. Wesley Wong, SC, Solicitor General of Hong Kong Department of Justice, Mr. Yang Zhihua, Deputy Secretary of CPC commission and Chief Supervisor of Shenzhen Stock Exchange, etc also gave speeches on the opening ceremony as guests to the Forum.

 

       The theme discussion was divided into two sections: “Latest Developments of Investment Arbitration”, and “Investment Arbitration and Applicable Rules”.

 

       The first section, “Latest Developments of Investment Arbitration”, is chaired by Mr. Mark Feldman, professor of Peking University School of Transnational Law and arbitrator of the SCIA. Ms. Meg Kinnear, Secretary-General of the ICSID, Mr. Ma Yuchi, senior official of the Department of Treaty and Law, Ministry of Commerce of PRC, Mr. Yao Jun (arbitrator), General Counsel of Ping An Insurance (Group) Company Of China, Ltd. and Chairman of the South China In-house Counsel Forum, Mr. Matthew Hodgson, partner at Allen& Overy, Ms. Sun Huawei, partner at Zhonglun Law Firm, gave keynote speeches on “ICSID and Recent Trends in International Investment Arbitration”, “Foreign Investment of Chinese Companies, Bilateral Investment Treaties and Investment Arbitration”, “Cross-border M&A of Chinese Companies and Investment Arbitration”, “Five Things Chinese Investors Should Know about Investment Arbitration”, and “Introduction to China-related Investment Arbitration Cases” respectively.

 

         Ms. Meg Kinnear, Secretary-General of the ICSID, analyzed the feature and basic characteristics of international investment arbitration on basis of the mechanism for resolution of disputes between investors and the host states at first, then introduced the organization and structure of the ICSID as well as the multiple services provided by the ICSID to the parties, including court hearing facilities, technical support, training and events, etc. Then, Ms. Meg Kinnear discussed three ICSID cases involving Chinese government and investors, including the recent case of Ansung Housing v China. In the end, Ms. Meg Kinnear talked about her expectations of international investment arbitration, including greater transparency of arbitration procedure, lower arbitration cost, and more diversified distribution of the nationality of arbitrators.

 

          Mr. Ma Yuchi, senior official of the Department of Treaty and Law, Ministry of Commerce of PRC, first talked about how the Chinese “going-out” companies learn and apply the investment treaty and investment arbitration, so as to protect their legal rights and interests more properly, and then discussed the recent development of international investment and investment arbitration. Mr. Yao Jun (arbitrator), Chairman of the South China In-house Counsel Forum, pointed out that, as regards outbound investment and investment arbitration, Chinese companies should keep in mind that there are both opportunities and the risks of strike, war and kidnapping, etc in many countries and/or regions; although Chinese companies still lack of the experience of internationalization, they should work hard to study how to take advantage of the mechanism of international investment arbitration to protect their legal rights and interests. Mr. Yao Jun also talked about the cause, process and result of the investment arbitration case China Ping’an v. Belgium. Mr. Matthew Hodgson, partner at Allen& Overy, listed five practical issues that must be considered while making outbound investments for Chinese investors. Ms. Sun Huawei, partner at Zhonglun Law Firm, introduced some investment arbitration cases involving China by using a carefully-prepared table, and discussed the issue of jurisdiction involved in investment arbitration cases from the aspects of ratione personae, ratione materiae and ratione temporis.

 

        Mr. Peter Malanczuk, professor of Hong Kong University and Council Member of the SCIA, Ms. Chiann Bao, senior counsel of Skadden and former Secretary-General of HKIAC, and Ms. Yuwen Li, professor of Erasmus University and arbitrator of the SCIA, held professional discussions on the first section as commentary guests.

 

          The second section “Investment Arbitration and Applicable Rules” was held by Mr. Zhang Lixing, Director of the Committee of Experts of SCIA Qianhai Maritime and Logistics Arbitration Center, SCIA CTO. Ms. Zhao Hong, Member (Judge) of the WTO’s Appellate Body and Council Member of the SCIA, Mr. João Ribeiro, Director of the UNCITRAL Regional Centre for Asia and the Pacific, Mr. Fan Mingchao, Director of ICC Arbitration & ADR North Asia, and Mr. Liu Xiaochun, President of the SCIA, gave keynote speeches on “A Comparison between WTO Dispute Settlement and Investor-state Dispute Settlement”, “The Latest Developments of UNCITRAL Arbitration Rules and Investment Arbitration: UNCITRAL Transparency Standards in ISDS”, “The Latest Developments of ICC Arbitration Rules and Investment Arbitration”, and “Innovative International Arbitration Rules in Shenzhen and Investment Arbitration”, etc respectively. Mr. Mark Feldman, professor of Peking University School of Transnational Law and arbitrator of the SCIA, Mr. Julien Chaisse, professor of Chinese University of Hong Kong and arbitrator of the SCIA, and Mr. Fei Ning, partner at Huizhong Law Firm and arbitrator of the SCIA, acted as the commentary guests.

 

          Ms. Zhao Hong, Member (Judge) of the WTO’s Appellate Body and Council Member of the SCIA, pointed out that the disputes arising from commercial activities may be classified into three categories: first, commercial disputes between equal parties, like international commercial arbitration; secondly, commercial disputes between investors and the host states, for example, the investment arbitration cases handled by the ICSID; and thirdly, commercial disputes among states. Then she compared the similarities and differences between the first two kinds of disputes and the third kind of disputes on basis of her work experience in the WTO.

 

          Mr. João Ribeiro, Director of the UNCITRAL Regional Centre for Asia and the Pacific, analyzed the new trend of enhancing transparency in the field of investment arbitration and dispute resolution on basis of the UNCITRAL Rules on Transparency, and pointed out that the UNCITRAL Rules on Transparency will further enhance the efficiency of investor-state dispute settlement (ISDS) and significantly facilitate the protection of foreign investors. Mr. Fan Mingchao, Director of ICC Arbitration & ADR North Asia, introduced the feature and different roles played by the ICC, then analyzed the special “national committee” system of the ICC and explained the strict review of arbitration tribunal in the ICC’s arbitration system. Dr. Liu Xiaochun, President of the SCIA, explained the impetus of market demand for the SCIA’s active conduct in investment arbitration. According to the ICSID’s statistics, the number of investment arbitration cases is growing steadily around the world, yet there are very few cases involving Chinese investors and Chinese government; this difference means that there will be a large market demand. Dr. Liu Xiaochun also introduced the special statutory governance structure of the SCIA as well as the SCIA’s feature of internationalization from such aspects as the internationalization of the SCIA Council, the internationalization of the arbitrators, and the diversification of nationality of the parties to arbitration cases, etc.

 

         The closing ceremony was chaired by Dr. Liu Xiaochun, President of the SCIA. The Chairman and Vice-chairmen of the 7th South China In-house Counsel Forum showed themselves to the public together. To support the “One Belt One Road” Initiative and the “Guangdong-Hong Kong-Macau Greater Bay Area” strategy, Guangzhou Maritime Court and the SCIA signed a cooperative agreement for the formal establishment of the “litigation-mediation coordination” mechanism for maritime cases.

 

         Mr. Shen Sibao, Chairman of the SCIA and President of China Society of International Economy and Trade Law (CSIEL), gave the closing speech on behalf of the Council of the SCIA. Mr. Shen Sibao expressed his gratitude to the organizations and guests for their support, and stressed that the SCIA will further enhance the level of internationalization, exploit its advantage of professionalism and promote international cooperation, so as to play a more important role in the “One Belt One Road” Initiative and the “Guangdong-Hong Kong-Macau Greater Bay Area” strategy.

 

 

 

 

Deputy Mayor of Shenzhen hosted the Opening Ceremony.