Vying for China

Other arbitral bodies are also vying for Chinese market share as institutions establish themselves and develop new strategies to gain market share. Australia launched its Australian International Disputes Centre (AIDC) in Sydney last month – a US$600,000 facility jointly funded by the Commonwealth and NSW Attorney-General Departments, the Australian Centre for International Commercial Arbitration (ACICA) and the Australian Commercial Disputes Centre. Doug Jones, director of ACICA and partner at Clayton Utz, lists China as one of the centre’s key markets.

In July, ACICA held a forum at the 2010 Shanghai Expo to showcase its new facilities and promote itself as a new and viable venue for China related offshore arbitrations. “It is becoming increasingly clear that Chinese businesses are embracing arbitration as the forum to resolve disputes. This presents us with an opportunity to host international arbitration and become a destination of choice in Asia,” says Jones.

Although lawyers say that Australia still has a long way to go competing in the region for business, D’Agostino is optimistic about the increasing options. “People can get frustrated with the options that have been used over the years.

Presenting an alternative in the arbitration area is a good thing for practitioners,” he says. “I think local centres can absolutely have their place. I can see Australia being a very attractive venue for Sino-Indonesian transactions, which up until today only had Singapore as a viable option. It will also be very attractive to the abundance of natural resource contracts between Chinese and Australian parties,” he adds.

Utterback echoes this sentiment. “ACICA can look forward to some large Sino-Australia mineral transaction disputes. There are many institutions out there which are best at handling specific industry disputes, Australia can carve out a niche in natural resources disputes,” she says.

While new players develop innovative strategies, older venues like the HKIAC, SIAC and the International Chamber of Commerce (ICC) continue to revamp their offerings for arbitration users in China. After having expanded its network in Asia, the ICC has recently (and for the first time) held a conference in China at the Shanghai Pudong Shangri-La hotel to promote its services and facilities. ICC invited many key players in the PRC arbitration field to attend, including international arbitration veteran and chairman of the HKIAC, Phillip Yang.

“The more arbitration lawyers an event [like this] invites, the better,” says Mao.“We need to know what these institutions have to offer because we will never recommend a venue we are unfamiliar with.” According to Mao, discussions at the conference revealed that ICC fees and charges for larger disputed sums in arbitration matters (US$2m and up) are lower than those of CIETAC. This is very helpful for legal recommendations but was never previously publicised.

Asian counterparts have also geared up their offerings to the Chinese market. Over the past 24 months SIAC has revamped itself, taking on several measures to increase its international appeal. The institute has recently brought onboard a wider spectrum of international arbitrators into its panel and has also done away with obtrusive restrictions.

“In the past, there were issues like withholding taxes for arbitration and applying permits for foreign lawyers,” says WongPartnership’s partner and head of the infrastructure, construction & engineering practice, Christopher Chuah (pictured left).

Last year, Maxwell Chambers also opened in Singapore, housing SIAC as a key tenant. The representative offices of a number of foreign arbitral associations, two international barrister’s chambers as well as 15 hearing chambers for arbitration case proceedings are also set to make the facility a ‘one-stop shop’ for international arbitration.

HKIAC has also increased its level of transparency. The institution released a judiciary interpretation in December last year, explaining the tenets of its arbitral awards and decisions. Internally, it also released new arbitration rules and regulations that are closely aligned to local PRC policies.

International arbitration for local firms
While most assume that international law firms have a competitive edge in international arbitration over local practitioners, international lawyers themselves are acknowledging that local firms have been seizing market share. “Local firms are starting to branch out and do a lot more international arbitration work to compete with us on that level. They are recruiting many non-locals ... this becomes an attractive product for their existing clients,” says D’Agostino.

Increased competition has seen big firms lift their game in their PRC arbitration practices. In September last year, Herbert Smith added to its arbitration practice in its China offices. Patrick Zheng joined the firm as senior consultant in Beijing, from being a regulator at CIETAC.

D’Agostino also relocated to Hong Kong from London last year to focus on the Asian international arbitration practice. Likewise, May Tai, who recently moved from London to Shanghai and was promoted to partner earlier this year, became a key player in the firm’s PRC arbitration practice.

Local firms are catching up, especially with the movement of experienced lawyers like Utterback into domestic positions. Arbitration parties are aware that often it helps to have support from a local lawyer, experienced with the local court’s regulations and aware of foreign conditions. And while procedures and rules in foreign arbitration centres may not appear familiar, the substantive legal issues are often Chinese. “Local lawyers will continue to play a very important role in international arbitration and it will never be easy to omit a PRC counsel in arbitration involving a Chinese party,” he explains.

Domestically, local players like Jin Mao PRC Lawyers list its strongest competitors as Fangda & Partners (arbitration practice led by Huang Weiming) and Llinks Law Office (arbitration practice led by Charles Qin). Other leading international arbitration practices include King & Wood, Jun He and Zhong Lun.

On the other hand, Singaporean firms have identified Charles Duan, managing partner at Duan & Duan, Denning Jin and Ariel Ye from King & Wood as key PRC arbitration players at SIAC. ALB

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