Speaking a common language

Leading dispute resolution practitioners in Asia say a universally accepted arbitration framework is crucial to the success of the Belt and Road. Vanessa Ip reports

It isn’t a bad time to be a commercial disputes practitioner in Asia. Although economic growth has slowed, the amount of dispute resolution work emanating from China is rapidly on the rise. China has been ramping up its global investment efforts with the Belt and Road initiative (also known as One Belt, One Road, or OBOR).

“The sheer scale of the trade and investment opportunities that the initiative generates, and thus the possibility of more and larger-scale disputes, means there is bound to be a significant increase in demand for dispute resolution services,” says Gary Yin, a partner at Reynolds Porter Chamberlain (RPC) in Hong Kong.

According to Ronald Sum, a partner at Troutman Sanders in Hong Kong, the increase in the number of Chinese companies investing in overseas jurisdictions has also led to a significant increase in commercial and investment-type disputes with overseas entities, particularly by way of arbitration.

“Infrastructure dispute between Chinese entities and overseas entities have always been among the most arbitrated sector within the region,” he says. “More recently, the most common types of cases in China are trademark infringement and patent infringement cases.”

Wang Wenying, the secretary-general of China International Economic and Trade Arbitration Centre’s (CIETAC) Hong Kong Arbitration Centre, says in the current climate, “there is a heightened need for practicable solutions to disputes in such a vastly extended market that marks a variety of languages, business practices and legal systems”.

“The more cross-border transactions there are, the greater the necessity for a workable system of international dispute resolution,” she adds.

Chen Fuyong, deputy secretary-general of the Beijing Arbitration Commission/Beijing International Arbitration Centre (BAC/BIAC), agrees and hopes that arbitration will one day become the “common language” used to resolve international disputes; but there is still a long way to go.

Nature of disputes

John Choong, a partner at Freshfields Bruckhaus Deringer in Hong Kong, says the firm is continuing to see an increase in the volume of China-related cross-border disputes. “This is the result of both the increase in outbound investments by Chinese companies in recent years, and also due to uncertainties in some sectors in China’s economy.”