Hong Kong is well placed to take on and discharge its role as an international financial center and establish itself as a center for international legal and dispute resolution services for global economic and trade activities. It already has a renowned reputation as an international financial center with internationally recognized standards of professional services, including legal and dispute resolution services.
This reputation, which Hong Kong will continue to build upon, rests on two internationally recognized cornerstones: the principle of “one country, two systems” and the constitutional protection conferred by the Basic Law. Both have allowed Hong Kong, as part of China, to maintain its own systems, including its common law legal system, and the core values of upholding the rule of law and judicial independence. Notably, Hong Kong’s final appellate court, the Court of Final Appeal, has non-permanent judges who serve as judges on the highest courts of other Commonwealth countries. Together, with its wide exposure to the international community, Hong Kong is well placed to serve as a tried and true international bridge to facilitate GBA and other Chinese businesses “going global”, as well as foreign businesses entering the GBA and the wider Chinese market.
Enhancements to strengthen cooperation between Hong Kong and the Mainland
Building on the advantages of Hong Kong’s legal system, significant developments have been made to enhance it for better cooperation between Hong Kong and the Mainland to achieve the Outline Plan’s aim of maximizing the GBA’s strength and enhance its international competitiveness.
Record of Meeting on Mutual Recognition of and Assistance to Bankruptcy (Insolvency) Proceedings between the Courts of the Mainland and of the Hong Kong Special Administrative Region
On 14 May 2021, a consensus was reached between the Supreme People’s Court and the Hong Kong Government in relation to the mutual recognition of and assistance in insolvency proceedings between the Mainland and Hong Kong. Under this new agreement, which will first apply to certain pilot areas – Shanghai, Xiamen and Shenzhen, insolvency proceedings in both Hong Kong and the Mainland will be mutually recognized and assistance may be granted to liquidators/ provisional liquidators and administrators to discharge of their duties under the relevant insolvency and bankruptcy laws in Hong Kong and the Mainland.
This is a crucial milestone, because neither Hong Kong nor the Mainland has any existing statutory framework for dealing with cross-border insolvency matters and the introduction of such agreement will further facilitate cooperation between the courts of the two jurisdictions. With ongoing active communication between both governments, it is anticipated that this mechanism will be gradually extended beyond the pilot areas, and consolidate the legal cooperation and assistance between the two jurisdictions.
Supplemental Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region
On 19 May 2021, the Supplemental Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region was fully implemented. Notably, this arrangement clarifies that all arbitral awards made under Hong Kong’s Arbitration Ordinance (Cap. 609) can be enforced in the Mainland, and that simultaneous applications may be made to both the Mainland and Hong Kong courts for enforcement of an arbitral award.
With the Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and the Hong Kong Special Administrative Region that came into force on 1 October 2019, Hong Kong is the only jurisdiction that has signed arrangements fostering cooperation with the Mainland in respect of arbitral proceedings. This demonstrates Hong Kong’s strengths under the rule of law of “one country, two systems” and improves its competitiveness, contributing to the enhancement of Hong Kong’s status as the center for international legal services in line with the Outline Plan.