Hong Kong becomes the first and only jurisdiction outside mainland China where mainland China courts may grant interim measures in aid of arbitral proceedings.

Key Points:

..Pursuant to the new mutual arrangement between Hong Kong and mainland China, any party to “arbitral proceedings in Hong Kong” may, before or after commencing arbitration, apply to the competent mainland Chinese courts to obtain interim measures.

..For the purposes of the new mutual arrangement, “arbitral proceedings in Hong Kong” means arbitral proceedings that are seated in Hong Kong and administered by three categories of institutions or permanent offices; however, the list of these institutions and offices is still subject to the joint confirmation of the Hong Kong government and China’s Supreme People’s Court.

..The new mutual arrangement has significant implications for the implementation of key policy initiatives such as the Greater Bay Area Initiative and the “One Belt, One Road” Initiative. As a result, participants of arbitrations seated in Hong Kong can not only benefit from the well-established legal framework in Hong Kong, but will also be able to obtain protection from the mainland China courts when needed.

..Although introducing the new mutual arrangement demonstrates that China is taking positive steps to amend and to bring its arbitration and related laws, judiciary system, and legal framework into the modern age, parties face a few uncertainties and practice difficulties regarding additional costs and the issue of the security. In addition, the Supreme People’s Court has yet to announce any guidance in respect of the test that the mainland Chin courts will use in granting interim measures for a Hong Kong seated arbitration.