July 1 marks the 20th anniversary since Hong Kong’s return to China and the start of its One Country Two Systems policy, which was created by Deng Xiaoping to give Hong Kong the ability to retain its own economic, legal and political system, through the Basic Law, after reunification with China. Hong Kong’s reputation as a gateway for trade and the rapid development China’s legal system point to a growing need for cooperation and collaboration in the international rule of law, especially as investment increases with initiatives such as One Belt One Road (OBOR) and for policy makers, business people and academics to discuss and understand how this might work.
The 2017 Colloquium on International Law: Common future in Asia, organised by the Asian Academy of International Law (AAIL), will see speakers address the opportunities and challenges in investment collaboration, and the interpretation of treaties and the UN Convention on the Law of the Seas (UNCLOS). The keynote speakers comprise Zhang Yuejiao, former WTO appellate body member; Tung Chee-Hwa, the first Chief Executive of Hong Kong, and Liu Zhenmin, China’s vice minister of foreign affairs.
Teresa Cheng, creator of the colloquium, tells Asialaw about the legal needs of China as regional trade increases and the growing importance of Hong Kong as a dispute resolution centre when cross-border transactions go wrong and investors need protection.
Asialaw (AL): What was the inspiration behind the conference and topics it will focus on?
Teresa Cheng (TC): This is the inaugural conference for AAIL and for Hong Kong to be a platform for discussing international law issues. 2017 is the 20th anniversary of Hong Kong’s reunification with China and it is timely to look at the international law relationship with One Country Two Systems. Asia is a growing economy and there is a lot of inbound and outbound investments coming in and from China as well as other countries in Asia. The structuring of these transactions such as financing and capital investments, risks assessment and management, the protection of the rights of investors and states and how commercial and investments disputes arising from these transactions are best resolved are all important matters that deserve consideration. There will also be sessions focusing on the law of the sea. When is a maritime feature a rock or an island under UNCLOS? Effectively I would like to know if Hong Kong island is an island or a rock. I hope that the conference will provide a unique platform for practitioners and scholars to discuss these international law issues.
AL: Which of the topics do you think Hong Kong can have the biggest impact on?
TC: All three sessions cover angles on which Hong Kong can have an impact. The implementation of One Country Two Systems brings into focus a number of international and inter-regional experiences. For instance, Hong Kong can negotiate trade and investment agreements and how they interact with those that China has concluded will have an impact on the business and transactions in Asia. With the growing collaboration in Asian jurisdictions on investment opportunities, for instance for projects under the Belt and Road initiative, how financing should be arranged, corporate structure established and disputes resolved are areas where Hong Kong has vast experience and the sharing in the second session will be of value to businesses and practitioners alike. With trade in mind, one must not forget that Hong Kong is on the Maritime Silk Road across the South China Sea and regional peace and stability in this area are crucial. It is apt therefore to look at specific aspects that have been under much debate recently under the law of the sea, and hence the third session will enable the community to have a proper and better understanding of their respective positions.
AL: Do you have any concerns that Hong Kong’s reputation for the rule of law will be diluted in the future as it gets closer to China?
TC: I don’t believe Hong Kong’s rule of law will be adversely affected in any way, shape or form. China can see the benefits of Hong Kong being an international financial centre and international legal hub. There is no reason for China to do anything that would affect that. The courts in Hong Kong are vigilant in upholding the rule of law and Hong Kong is ranked number one in Asia for a number of years in terms of judicial independence as noted in the Global Competitiveness Report of the World Economic Forum. This is also evidenced in the well-reasoned judgments of our courts which are based on law and merits of the case. This has been so since 1997 and I see no signs of changing.
AL: What are China's legal needs as regional trade increases? What are the challenges and opportunities?
TC: China’s legal and judicial systems are developing fast and undergoing a number of changes to move in the right direction towards the rule of law. For instance, judgments are reasoned, some better than others, and these judgments are now publicly available. The Supreme People’s Court is also utilising IT to help enhance transparency and improve judicial quality. As regional trade and cross border investments increases, China legal needs will continue to grow. The needs may include more comprehensive and transparent regulations in financial field, increased involvement with international bodies, appreciation of importance of risk analysis with a legal perspective and perhaps importantly more lawyers that are competent to deal with international related transactions and disputes.
AL: With the OBOR initiative, where does Hong Kong's strength as a dispute resolution centre fit in?
TC: The Hong Kong International Arbitration Centre (HKIAC) has seen a record number of cases using Hong Kong as the seat for commercial arbitration. We have an independent judiciary that is pro arbitration that upholds the rule of law. We have advanced arbitration legislation with the latest version of the UN Commission on International Trade Law Model Law. The International Chamber of Commerce (ICC) and China International Economic and Trade Arbitration Commission (CIETAC) have set up offices here because they see that business is growing here. The International Centre for Settlement of Investment Disputes (ICSID), administers delocalised investor state arbitrations with limited review by ad hoc committees. ICSID arbitrations can be conducted in Hong Kong. With the Belt and Road initiative, Hong Kong is well placed to deal with these commercial and investment disputes.
AL: What results does the AAIL hope the conference will produce? Is any follow-up work planned?
TC: AAIL hopes that this 2017 inaugural Colloquium will lay a foundation for it to be an annual platform for international law issues to be discussed. The discussions will enable a better understanding on these aspects of international law. I believe it will provide inspiration, guidance and insights on further research projects and workshops to be conducted by AAIL.
Asialaw is supporting the 2017 Colloquium on International Law: Common future in Asia on July 7 and 8.