The Arbitration (Amendment) Bill 2000

LC: The Arbitration (Amendment) Bill 2000

*****************************************

Following is the speech by the Secretary for Justice, Ms Elsie Leung in moving the second reading of the Arbitration (Amendment) Bill 2000 in the Legislative Council today (May 31):

Madam President,

I move that the Arbitration (Amendment) Bill 2000 be read the second time.

The Bill seeks to amend section 2GG of the Arbitration Ordinance. That section makes it possible for arbitral awards to be summarily enforced in Hong Kong with the leave of the court. It was recently held that the section applies only to awards made in Hong Kong. The amendment provides that the section applies to awards whether made in or outside Hong Kong.

Awards made on the Mainland by a recognized Mainland arbitral authority, and awards made in a state or territory (other than China) which is a party to the New York Convention on the Recognition and Enforcement of Foreign Awards 1958, can be enforced summarily under other Parts of the Ordinance. However, in the light of the recent court decision, awards made elsewhere are not summarily enforceable in Hong Kong under section 2GG. These awards include non-Convention awards made in such countries or territories as Albania, Brazil, Iraq, Newfoundland, Taiwan and Macau.

In response to the recent decision, the legal and arbitration professional bodies proposed, when the Arbitration Ordinance was last amended earlier this year, that section 2GG be amended to make it clear that it does apply to awards made either in or outside Hong Kong. This would enable awards made in non-Convention states or territories to be summarily enforced in Hong Kong with the leave of the court.

The Administration agreed to consider that proposal after it had the chance to study a forthcoming judgment of the Court of Final Appeal (CFA) on the enforceability in Hong Kong of a bankruptcy order made by a Taiwan court.

The CFA delivered its judgment on 27 January 2000. It held that the bankruptcy order made by a Taiwan court, which related to private rights of the parties concerned, and was not for the benefit of the Taiwan government, was enforceable in Hong Kong. This followed the common law principle that particular acts of a government that is not recognised either in law or in fact may, in the interests of justice and common sense and for the preservation of law and order, be recognized by domestic courts where private rights are concerned and where no consideration of public policy to the contrary has to prevail. As was explained by the CFA, that common law principle does not involve recognizing any unrecognized entity; it only goes purely and simply to protecting private rights.

Following the enactment of the Bill, if an application is made under the amended section 2GG for summary enforcement in Hong Kong of an award made in a state or territory with an unrecognized government, the CFA's recent judgment will provide guidance to the court in dealing with the application. The amendment, if passed, would not alter the position under the current section 2GG whereby the granting of leave to enforce an award is a matter of discretion for the court, and is subject to established grounds of refusal.

This legislative proposal has the support of the legal and arbitration professions. This Council's Panel on Administration of Justice and Legal Services and the House Committee also extended their support to it. The Administration considers that section 2GG should be clarified as soon as possible since it will further enhance the Hong Kong SAR's reputation as an international arbitration centre. Madam President, I commend this Bill to this Council for early passage into law.

End/Wednesday, May 31,2000

NNNN