Utilising Hong Kong’s unique advantages to support and complement national development

The year of 2021 marks the start of the 14th Five-Year Plan for National Economic and Social Development (14th Five-Year Plan). The 14th Five-Year Plan not only provides the blueprint for the nation’s social and economic developments from 2021 to 2025, but also sets the path for Hong Kong’s development. The Department of Justice (DoJ) would fully utilise Hong Kong’s unique advantages in legal and dispute resolution service to support and complement the development of our country.

As you all know, the Greater Bay Area (GBA) development is one of the major policy initiatives of the Central People’s Government. The Outline Development Plan for the Guangdong-Hong Kong-Macao GBA, which was published in February 2019, sets the directions guiding the development. It explicitly supports Hong Kong to establish itself as the centre for international legal and dispute resolution services in the Asia-Pacific region, recognising the distinctive advantages of Hong Kong’s legal system under the “One Country, Two Systems” principle.

The development of the GBA has brought many benefits to Hong Kong and opened up vast opportunities for various sectors, including legal and dispute resolution service which is well placed to seize such opportunities. The DoJ has been liaising with the relevant Mainland authorities, striving to implement more liberalisation measures and new initiatives in the GBA to the benefit of our legal and dispute resolution service sector.

We welcome two recent major breakthroughs which would facilitate the promotion of our services in the GBA:

(1) GBA Legal Professional Examination

One of the breakthroughs is the implementation of the GBA Legal Professional Exam, which adjusts the threshold for Hong Kong legal practitioners to practise Mainland law in the GBA.

Hong Kong solicitors and barristers with accumulated practice experience of five years or above are now eligible to apply for the GBA Legal Professional Examination. Upon passing the examination and obtaining a lawyer’s practice certificate (Greater Bay Area), legal professionals may provide legal services in the nine Mainland municipalities of the GBA on specified civil and commercial matters (including litigation and non-litigation matters) to which the Mainland laws apply, enjoying the same privileges and subject to the same obligations as Mainland lawyers. Application for the first examination was opened from November 16 to 26, 2020. The first examination would be held on January 30, 2021.

(2) Supplemental Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region

The other recent major breakthrough is the signing of the Supplemental Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region (Supplemental Arrangement) on November 27, 2020. The Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the HKSAR (Arrangement), which was signed on June 21, 1999 and took effect since February 1, 2000, has been in force for more than 20 years. Co-operation between the Mainland and the HKSAR under the Arrangement has delivered fruitful results. The Arrangement provides a simple and effective mechanism on reciprocal enforcement of arbitral awards and fosters legal and judicial co-operation in civil and commercial matters.

The amendments to the Arrangement, made through the Supplemental Arrangement, include the removal of current restriction of the Arrangement to allow parties to make simultaneous application to both the courts of the Mainland and the HKSAR for enforcement of an arbitral award, which was made in accordance with the spirit of the New York Convention. Other amendments are: adding an express provision to clarify that a party may apply for preservation measures before or after the court's acceptance of an application to enforce an arbitral award for greater certainty; removing the list of Mainland arbitral institutions to align with the definition of the scope of arbitral awards with the prevalent international approach of "seat of arbitration" under the New York Convention; and expressly including the term "recognition" when referring to enforcement of arbitral awards in the Arrangement for greater certainty.

Coupled with the Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the HKSAR which became effective in October 2019, as well as the GBA Legal Professional Examination, the Supplemental Arrangement would be conducive to the continued development of Hong Kong's legal and dispute resolution services in the GBA.

In addition to the above measures, the DoJ has always been exploring the possibility of allowing wholly owned Hong Kong enterprises (WOKEs) set up in the Mainland to agree to choose Hong Kong laws to be the applicable law when entering into civil and commercial contracts, and choose Hong Kong as the seat of arbitration. In fact, we are glad to see some recent progress in this area in Qianhai (remarks). It is our hope that this initiative would be extended to cover Shenzhen and subsequently the whole GBA. "One Country, Two Systems and Three Jurisdictions" are the unique characteristics of the GBA. If the law of the three jurisdictions could be applied in the GBA, it would undoubtedly attract more investment from Hong Kong and overseas into the nine Mainland municipalities in the GBA, thereby opening up vast business opportunities.

On the premise of “One Country, Two Systems” and the principle of reciprocity and mutual benefits, Hong Kong should continue to consolidate and enhance its role and positioning in the 14th Five-Year Plan in order to contribute to the long-term development of Hong Kong, the GBA as well as the whole country. To this end, the DoJ is fully committed to capitalising on our strengths in the area of legal and dispute resolution services so as to integrate into the development of our country, as well as contribute to the prosperity of our country.

The situation of the outbreak remains severe. The measures by the Government to prevent the importation of cases and the spread of the virus in the community have gradually yielded results. However, the number of daily confirmed cases still fluctuate. I sincerely urge everyone of us should remain vigilant by staying at home to fight the pandemic, thereby allowing our city to resume its normal operation and return to a healthy environment and the path of development soon.

Remarks: On August 26, 2020, some Qianhai Regulations (see《深圳經濟特區前海深港現代服務業合作區條例》, 第57條) were passed allowing WOKEs established in Qianhai to choose Hong Kong law, to be the applicable law of their contracts, even in the absence of foreign-related elements. Companies set up in Qianhai by Macao, Taiwan or foreign investors also enjoy such entitlement under the provision.

January 03, 2021