Mainland Chinese Courts Can Order Interim Measures in Support of ICC Arbitrations Seated in Hong Kong

1. The Arrangement

There are two core principles in Chinese arbitration law relating to interim measures, which are clearly out of touch with international arbitral practice:

1. Mainland Chinese Courts have the exclusive power to grant interim measures; and
2. Mainland Chinese Courts can grant interim measures to support arbitration in Mainland China but do not have an express legal basis to do the same in support of arbitrations seated outside Mainland China.

The significance of the Arrangement lies in the fact that it provides an exception to Chinese arbitration legal principle (ii) described above.

Under the Arrangement, parties to arbitrations seated in Hong Kong administered by qualified arbitration institutions¹ can now apply before Mainland Chinese Courts for interim measures, of which, in Chinese legal terms, are called preservation of property, preservation of evidence and preservation of conduct, in support of their arbitration proceedings. This Arrangement will therefore make it more difficult for respondent parties to strategically dispense their assets located in Mainland China during arbitral proceedings in an attempt to frustrate the proceedings.

As Mainland Courts do not support arbitration seated elsewhere outside Mainland China for ordering interim measures, this Arrangement undoubtedly makes Hong Kong a unique and special seat.

2. Summary of the Note

As a preliminary point, the Note addresses only applications for interim measures before Manland Courts and not those before Hong Kong Courts. As explained by ICC, this is because parties to Mainland-seated arbitrations wishing to apply for interim measures before Hong Kong Courts may already rely on Article 45 of the Hong Kong Arbitration Ordinance (Cap. 609). The Arrangement therefore only confirms the existing mechanism with regards to Hong Kong.²

The Note addresses the following two principal topics:

• the scope of application of the Arrangement;³
• the general procedure prospective parties to ICC Arbitration must follow when seeking to apply for interim measures before a Mainland Chinese Court under the Arrangement.⁴

The first topic covers the time and subject-matter requirements under the Arrangement and specifies which ICC Arbitrations can benefit from the Arrangement. Some notable points are that the Arrangement:

• does not apply to arbitrations already completed by 1 October 2019 (date of entry in force of the Arrangement):⁵
• applies to commercial arbitrations only (excluding investment arbitrations);⁶ and
• applies to arbitrations seated in Hong Kong under the ICC Arbitration Rules (the ‘Rules’) and administered by the Secretariat Asia Office.⁷

The Note then goes on to provide invaluable guidance as to the proper procedure to follow when making an application under the Arrangement before the Mainland Chinese Courts and as to how an application will be handled in practice:

• While acknowledging the express terms of the Arrangement provide that applications in pending ICC Arbitrations shall be transferred by the Secretariat Asia Office to the competent Mainland Chinese Court, the Note highly recommends applicants to directly submit their applications together with an ‘Acceptance and Transfer Letter’ issued by the Secretariat Asia Office to the competent People’s Court;⁸
• For applicants who wish to submit applications to Mainland Chinese Courts before filing their Request for Arbitration, the Note provides a reminder that successful applicants must file a Request for Arbitration with the Secretariat at any of its offices⁹ in compliance with the Rules no later than 20 days from the date on which the Mainland Chinese Court grants the interim measure requested.¹⁰ Failure to satisfy any of the above will result in the ICC’s refusal to issue a letter certifying that the Request for Arbitration has been accepted and will risk potential closure of the file.¹¹
• No additional fee will be charged for the provision of the services required of the Secretariat Asia Office under the Arrangement.¹²

3. Conclusion

There is no doubt that the Arrangement demonstrates the firm determination of Mainland Chinese Courts to support arbitrations seated in Hong Kong, a Special Administrative Region of China. It also represents an important step for Mainland China to bring its practices more in line with those adopted by leading international arbitration-friendly jurisdictions in which domestic courts support arbitrations either through issuing interim measures or recognizing of interim measures issued by arbitration tribunals.¹³

It should however be noted that the scope of the Arrangement is limited to arbitrations seated in Hong Kong, meaning parties to arbitrations seated in other jurisdictions unfortunately cannot enjoy the same benefits. Nonetheless, the Arrangement is certainly an important preliminary step in the right direction. Optimistically, it may be expected that Chinese arbitration law will be revised in the near future to empower courts to order interim measures in support of arbitrations generally, irrespective of whether they are seated in Mainland China, Hong Kong or elsewhere.

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