Alternative Dispute Resolution

  • Posted on: 9 October 2015
  • By: hkba_admin

What is Alternative Dispute Resolution (ADR)?

Alternative Dispute Resolution (ADR) means a voluntary and private dispute resolution  process in which the parties agree to appoint a neutral third party to assist them to settle or resolve their dispute.   

Mediation and Arbitration are most commonly used forms of ADR.  It is a fundamental principle in ADR that the neutral third party shall act impartially and independently at all times. Every barrister in Hong Kong can only practise law as a sole-proprietor. Unlike other professionals, barristers are not allowed to enter into partnership, nor are barristers allowed to incorporate themselves as a corporation or company. All these restrictions are aimed at ensuring that every barrister can act independently in the course of their practice.

Barristers are specialist advocates, and focus primarily on the representation of clients in both in court and ADR.   Our contributions generally include giving legal opinion, advising on difficult points of law and procedure, devising litigation strategies at all stages, drafting or settling relevant legal documents; and perhaps most importantly, deploying advocacy in all types of hearings to achieve the best possible results for clients.  By virtue of their expertise in dispute resolution, barristers are often instructed to represent clients at mediations/arbitrations, or act as mediators/arbitrators.  

Barristers are also occasionally involved in the giving of legal advice in non-contentious.  This happens primarily when difficult or complex points of law are involved, or when clients are interested in knowing the likely outcome of litigation or arbitration, should they arise.

ADR saves cost and time when comparing with litigation.   In the context of international commercial transactions, mediation and arbitration are the popular ways of settling of disputes outside of courtroom.  There are a variety of benefits to the disputed parties. Parties have more control over how their dispute is resolved. Because of its confidential nature, it can sometimes preserve business relationship between the disputed parties. Unlike litigation in open courts, trade terms are not disclosed to the public.

The court should be the last resort for resolving disputes.

Barristers and Mediation

Apart from representing clients as advocates in mediations, barristers in Hong Kong also provide services as mediators in several of disputes.

Mediation is a way of resolving disputes through a confidential and voluntary process, with the assistance of a mediator. One of the underlying objectives of the new High Court and District Court rules (the new rules are also applicable to Lands Tribunal and Family Court with modifications) which came into effect on 2 April 2009 is to facilitate settlement of disputes. The post-CJR rules place a duty on the court to further the underlying objectives by actively managing cases. Such case management includes, where appropriate, encouraging the parties to use procedures alternative to litigation to resolve their dispute. The most common alternative dispute resolution procedure is mediation.

A barrister may act as a mediator who serves as a neutral third party to help parties settle their disputes through the process of mediation. The mediator only helps plan and execute a process facilitating the parties in dispute to discuss, understand and make attempts to settle their disagreement. The mediator however has no power to impose a settlement on the parties yet.

A barrister may also act as a legal representative to his client in the course of mediation.   With expertise in advocacy, he helps identify the issues and his client's concerns, interests, and desires.   He also alerts his clients his legal rights, explores what could be the worst, best and possible outcomes.  This will allow the client to have a more accurate and realistic account of the strengths and weaknesses of his/her case and to ensure thorough preparation ahead of the mediation.

Mediation has proven to be successful in resolving various types of disputes, it is also a method of dispute resolution which saves time and costs and also helps preserve harmonious relationship between parties.

For the Hong Kong Mediation Code, please click here

Barristers and Arbitration

Besides litigation, arbitration is an effect means of dispute resolution. Commercial disputes can be resolved in an efficient, flexible, confidential and fair manner. The decision of the arbitrator (arbitral award) is final and legally binding and can only be challenged in exceptional circumstances.

In international arbitrations, barristers are involved either as legal representatives acting for one of the parties or as arbitrators.  Barristers are specialist advocates who are trained to present a case before courts or arbitral tribunals.  They have particular expertise in presenting a case both orally and in written submission. With the common law training, Hong Kong barristers are conversant with the handling of evidence and procedural matters that are more and more important in international arbitrations.  Barristers are also legal experts, they are instructed by solicitors to give expert legal advice. 

Although none of the arbitration rules require an arbitrator to have legal qualifications, in practice most enterprises favour the appointment of barristers as arbitrators as the arbitration process usually involves important legal issues such as jurisdiction and contract interpretation, and the decision is legally binding to all parties.

According to Chapter 13 of the Code of Conduct of the Hong Kong Bar Association,  [1] a practising barrister may accept instructions from any person qualified as practising as a foreign lawyer or from mainland clients for professional work for the purpose of, or in connection with any international arbitration proceedings in Hong Kong, as long as the proceedings does not involve pre-existing, ongoing litigation and local arbitration in Hong Kong.

 

[1] The Hong Kong Bar Association's Overseas Practice Rules, Annex 14 Paragraph 2.

 

Hong Kong - An Ideal Seat for International Arbitration

Located in the centre of Asia, the courts of Hong Kong inherit the British common law tradition, possessing a sturdy reputation for their strict maintenance of the rule of law and judiciary independence. It is thus an ideal location for conducting arbitration. Arbitration Ordinance (Cap. 609), building upon the basis of the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules, unifies the rules of both Hong Kong arbitration and international arbitration systems and  not unfamiliar to foreign investors,  these rules are acceptable to both Chinese and foreign parties. Moreover, Hong Kong has a sterling reputation for its arbitration system: The Hong Kong International Arbitration Centre processed 463 cases in 2013, in which cases involving mainland claimants were of the highest ratio. Lastly, Hong Kong possesses cultural, historical, geographical advantages, and benefits from the ease of communication and wide-reaching international networks. Hong Kong citizens receive Western education, are flexible and effective, and have a thorough understanding towards the historically rich and expansive China and also foreign countries. Hong Kong is thus an arbitration spot ideal for both mainland and foreign parties.

Following the internationalization of disputes, the method for resolving disputes must also evolve to keep in pace. Modern international arbitration often requires lawyers from different jurisdictions to work closely with each other. Barristers in Hong Kong can provide legal services for foreign or mainland enterprises in the following areas:

Arbitration in Hong Kong

If foreign or mainland businesses choose Hong Kong law to be the applicable law in question, they may directly instruct barristers in Hong Kong to handle the entire arbitration process. In cases involving international arbitration, foreign or mainland businesses and law firms may also directly instruct barristers in Hong Kong. Apart from attending trials, barristers in Hong Kong may also provide legal opinion on Hong Kong law or international legal issues. Foreign or mainland businesses and law firms may instruct barristers in Hong Kong to provide legal advice prior to commencing legal proceedings. The professional opinions of barristers assist the client in analysing whether he/she has sufficient legal basis and evidence, allowing the client to determine more accurately the strengths and weaknesses of his/her case and to make the best preparation possible for the arbitration proceedings.

If foreign or mainland businesses choose foreign law to be the applicable law in question, barristers in Hong Kong may still provide legal opinion and assistance with reference to legal proceedings under Hong Kong law. Arbitration Ordinance (Cap. 609) permits the Hong Kong courts, in relation to any arbitral proceedings which have been or are to be commenced in or outside Hong Kong, to grant interim measures. [1] The most common of such measures include Mareva injunctions, orders to halt infringement behavior (such as intellectual property infringement) and orders for disclosure of documents etc.  Such procedures require applications to be made to Hong Kong courts, and so foreign or mainland clients would require the assistance of barristers in Hong Kong. In addition, barristers in Hong Kong can also provide legal advice on the Hong Kong legal procedures involved in arbitration, such as whether the facts of the case in question fit the requirements of the injunction applied for, the parameters of the injunction and its actual textual content, the odds of success and whether the application is worth trying. Such professional legal advice is helpful towards foreign businesses and clients in determining what measures to take to protect their own interests, and how the arbitration process can be fairly and effectively facilitated.

Arbitration in Foreign Countries

In general, overseas clients can instruct barristers in Hong Kong to act as legal representatives in foreign arbitration courts if the applicable law in question is Hong Kong law, provided that the foreign arbitration law and rules of the arbitral tribunal permits so. According to Cap. 609, an award made outside of Hong Kong in arbitral proceedings by an arbitral tribunal is enforceable in Hong Kong. [2] An application must be made towards Hong Kong courts for such an execution, and thus barristers in Hong Kong can provide relevant assistance for their clients.

How Foreign Arbitration Awards are enforced in Hong Kong

Hong Kong is a signatory of the New York Convention (Convention on the Recognition and Enforcement of Foreign Arbitral Awards), and accordingly a foreign or mainland award is enforceable in Hong Kong. [3] In other words, regardless of where the award is handed down, the possibility of enforcement in Hong Kong is high. Moreover, whenever facing the awards handed down by foreign and mainland arbitration tribunals, Hong Kong courts adopt a policy of minimal intervention and only carry out a nominal examination of the awards. [4] As long as the arbitral awards in question do not contravene proper legal procedure, and that no sufficiently serious error is present, Hong Kong courts may still exercise discretion in enforcing awards awarded by foreign or mainland arbitral tribunals. [5] As such, it can be seen that Hong Kong courts are very supportive of arbitration in terms of enforcing arbitral awards.

The enforcement of foreign and Chinese arbitral awards in Hong Kong requires assistance from barristers. If the losing party attempts to contest foreign arbitral decisions in Hong Kong courts, they must have a trial in Hong Kong courts. At this point, the participation of barristers is imperative.

 

[1] Arbitration Ordinance (Cap. 609) s45(2).

[2] Ibid, s84.

[3] Ibid s92, and Arrangement Concerning Mutual Enforcement of Arbitral Awards Between the Mainland and the Hong Kong Special Administrative Region, < http://www.doj.gov.hk/eng/topical/pdf/mainlandmutual2e.pdf>.  

[4] Re Petro China International (Hong Kong) Corp Ltd [2011] 4 HKLRD 604.

[5] Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in lig) (No. 1) [2012] 4 HKLRD 1.

How to Find a Mediator / Arbitrator?

As at today, there are about 100 accredited arbitrators and 350 mediators who have attained recognised professional qualifications in mediation or who are otherwise recognised as having significant judicial/mediation experience. They are willing to act as mediators or arbitrators.

To find a mediator, please click here.

To find an arbitrator, please click here.

Our Contact:
The Hong Kong Bar Association
LG 2, the High Court 38 Queensway, Hong Kong
Tel: (852) 2869 0210 / Fax: (852) 2869 0189