Law and Arbitration in Hong Kong

20 Jan 2000

HomeNewsLaw and Arbitration in Hong Kong
20 Jan 2000

There is still widespread misunderstanding of the status of the Hong Kong Special Administrative Region since 1st July 1997. These misunderstandings go so far as statements to the effect that Hong Kong is now operating under a communist system, that the rule has disappeared and that Hong Kong is now just another mainland Chinese city. These statements are very far from the truth, as the following article will explain.

The status of Hong Kong as a Special Administrative Region with the PRC is governed by the Basic Law which will remain in force until the year 2047. It is difficult to change the Basic Law for two reasons: it is the result of the 1984 Joint Declaration, which has the status of a bilateral treaty between the Governments of the PRC and the United Kingdom, and there are complex provisions in the Basic Law governing its amendment.

The specific provisions of the Basic Law and Joint declaration are given in some detail at the end of this article. Broadly speaking, the Joint Declaration and the Basic Law provide for Hong Kong to be governed by the people of Hong Kong with a high degree of autonomy, and for its system of Government and way of life to remain the same as that before reunification.

The Basic Law contains some specific provisions dealing with shipping in Hong Kong. As a result of cooperation between the Governments of the PRC and the UK, the autonomous register was set up in 1990, just after the enactment of the Basic Law and well before reunification. Articles 124 to 127 of the Basic Law give authority for Hong Kong to maintain the shipping register, issue related certificates under its legislation and regulate conditions of seamen, and further guarantee access to the port for all merchant ships, and guarantee that private interests in shipping fields may continue to operate freely.

Other aspects which are important to note are:

  1. The Legislature. In 1998 elections for the Legislative Council were held. The Basic Law provides for further elections this year (2000) and thereafter every four years with the ultimate aim of full universal suffrage by a gradual and an orderly process.
  2. The Executive. On 1st July 1997, only two persons in the Executive Branch of the Hong Kong Government changed. The Governor was replaced by the Chief Executive and the Attorney General was replaced by the Secretary for Justice. All other officials, including the Director of Marine, remained in place.
  3. The Judiciary. Appeals to the Privy Council in London have been replaced by appeals to the Court of Final Appeal, which was set up in Hong Kong to take the Privy Council's place. The Chief Justice and the Permanent Judges are all Hong Kong people. One overseas judge (selected from Common Law jurisdictions, including the United Kingdom) often sits on important Court of Final Appeal cases. The other Courts and the judges of those Courts have not changed.
  4. The Law. Article 8 of the Basic Law provides that the law in force prior to reunification remains in force. This means that the Common Law system is preserved and, in many shipping cases, English precedents are still much used.
  5. Arbitration. In June 1997 Hong Kong Arbitration Law was amended and, in particular, the Hong Kong International Arbitration Centre (HKIAC) took over the default appointment of arbitrators from the Courts. This has the result of saving parties a great deal of time and expense. Shipping arbitrations are generally conducted under the UNCITRAL Model Law, which means that overseas parties feel more comfortable with internationally recognised procedures. There are a number of active Maritime Arbitrators operating in Hong Kong who very recently formed themselves into the Maritime Arbitration Group, a division of the HKIAC. Objectives of the Group include the expansion of the number of maritime arbitrators and the promotion of maritime arbitration in Hong kong. In addition to this, Small Claims and Documents Only procedures, modeled closely on those used by the London Maritime Arbitrators Association, have now been published. Arbitration awards are mutually enforced internationally between countries which are parties to the New York Convention. As a result of the PRC Government's action in applying the Convention to Hong Kong with effect from 1st July 1997, arbitration awards made in most foreign countries are enforceable in Hong Kong, and vice versa, under the Convention. There remained a question of enforcement between mainland China and Hong Kong, which, on the 1st February 2000, was solved by an agreement between the Central Government and the Hong Kong Government to the effect that awards made in the Mainland and Hong Kong would be reciprocally enforceable on a similar basis to that set out in the New York Convention.

Hong Kong is and still remains an exciting place to do business. The PRC Government is extremely reluctant to involve itself in Hong Kong affairs, leaving the governing of Hong Kong to the Hong Kong people. Hong Kong continues to have a free and outspoken press and the rule of law is upheld in the Courts. And Hong Kong continues to develop its infrastructure and institutions so that it can remain the prime service centre for Asia.

(Adapted from a speech given by Robin Peard to the Seatrade Hong Kong Conference, December 1999)

Specific Articles of the Basic Law referred to in the text

Article 5

'The socialist system and policies shall not be practised in the Hong Kong Special Administrative Region, and the previous capitalist system and way of life shall remain unchanged for 50 years.'

Article 124

'The Hong Kong Special Administrative Region shall maintain Hong Kong's previous systems of shipping management and shipping regulation, including the system for regulation conditions of seamen. The Government of the Hong Kong Special Administrative Region shall, on its own, define its specific functions and responsibilities in respect of shipping.'

Article 125

'The Hong Kong Special Administrative Region shall be authorised by the Central People's Government to continue to maintain a shipping register and issue related certificates under its legislation, using the name "Hong Kong, China".'

Article 126

'With the exception of foreign warships, access for which requires the special permission of the Central People's Government, ships shall enjoy access to the ports of the Hong Kong Special Administrative Region in accordance with the laws of the Region.'

Article 127

'Private shipping businesses and shipping related business and private contained terminals in the Hong Kong Special Administrative Region may continue to operate freely.'

<< More news articles

Share this