Hong Kong

Q&A Sarsh Grimmer


The secretary-general of the Hong Kong International Arbitration Centre (HKIAC) talks to Patrick Dransfield about the Belt and Road initiative, Hong Kong’s role as an arbitration centre and the trends shaping the sector.


Asian-mena Counsel: You have a distinguished background in the field of dispute resolution, including serving at the Permanent Court of Arbitration (PCA) in the Hague. What attracted you to Hong Kong and how do you think your experience at PCA regarding multiple investor-state arbitrations is relevant to Asia?

Sarah Grimmer: I was attracted to Hong Kong for three reasons. First, I was offered the role of secretary-general of HKIAC, one of the top international arbitral institutions in the world. Taking the job was a natural next career step for me. Second, Hong Kong is a dynamic city with a fascinating history, present and future. It was a place I wanted to discover. Third, I am from New Zealand and had been living for many years far from my home country and family. Hong Kong feels very close to home compared to The Hague.

At the PCA I worked on numerous investor-state arbitrations involving Asian parties. It is relevant in this part of the world given the complex web of bilateral and multilateral investment agreements that Asian states have concluded and are in the process of negotiating. Given the scale of investment and trade in the region, investment dispute resolution is relevant and will be increasingly so, especially with the Belt and Road initiative as disputes arise.

Why is international arbitration a good solution for investors and states along the Belt and Road?

SG: The Belt and Road initiative is generating opportunities in large-scale cross-border infrastructure projects from ports, railways and roads to major energy plants in largely emerging economies. The participants in these projects will be numerous with different interests and bargaining positions including state-owned entities, multinational companies, financiers and local governments. These types of projects will inevitably involve complex transactional arrangements.

The projects are complex, capital intensive, multi-party, multi-contract and high-public interest involving jurisdictions at different stages of development with differing legal, political and economic systems. Disputes are unavoidable given the inherent political and commercial risk associated with such large-scale investment projects.

Where disputes cannot be resolved through negotiation or mediation, international arbitration offers parties a neutral venue for the resolution of cross-border disputes, which crucially, and unlike court judgments, results in an award that is enforceable in 159 countries around the world, including the large majority of Belt and Road countries. 92 percent of the original 65 Belt and Road countries are signatories to the 1958 New York Convention, the treaty allowing for the recognition and enforcement of foreign arbitral awards.

The ability to resolve your dispute in a mutually agreed neutral venue resulting in an enforceable award in most Belt and Road countries are two of the key reasons why arbitration is attractive for investors as well as states (and any other participants) along the Belt and Road. Other benefits include having the right to select an arbitrator with the required expertise, and relevant legal and cultural backgrounds and linguistic ability, as well as tailoring the procedures to the specific requirements of a dispute.

Why do you think that Hong Kong in general and HKIAC in particular should be the number one choice for Belt and Road dispute resolution?

SG: The common denominator in Belt and Road projects is the presence of a party or parties from mainland China transacting with foreign entities. Hong Kong has long been the connecting jurisdiction between mainland Chinese parties and the parties from the rest of the world. Important to effective dispute resolution, it benefits from an independent, mature and pro-arbitration judiciary. The judiciary is known to uphold the rule of law and is comprised of some of the most eminent judges from the Commonwealth, including Australia, Canada, New Zealand and the UK. At the same time, Hong Kong is home to a deep pool of experienced professionals who are bilingual and have a strong understanding of mainland Chinese culture and practices.

HKIAC, as Hong Kong’s homegrown arbitral institution, is experienced in handling disputes involving Chinese and foreign parties, and particularly joint venture, shareholder, project finance disputes as well as construction and maritime disputes, all of which are the types of disputes that will arise out of the Belt and Road initiative.

HKIAC has a well-tested set of arbitration rules and case management practices that ensure cost-effective proceedings. Complex multi-party multi-contract disputes can be combined, and expedited procedures can be applied while ensuring party autonomy and due process are maintained. This experience is one of the reasons why HKIAC awards have such a strong record of enforcement in mainland China, an important reason to include HKIAC and Hong Kong in dispute resolution clauses involving Chinese parties.

Screen Shot 2018-10-23 at 11.19.18 AMAMC: A recent arbitration survey ranked Hong Kong as the fourth most preferred seat globally, behind London, Paris and Singapore. What can Hong Kong do to promote itself as a global arbitration centre? What is HKIAC doing to lead Hong Kong in this challenge?

SG: It is important that the message about Hong Kong’s strengths is spread widely. Hong Kong has outstanding attributes that make it a leading arbitration hub: the pro-arbitration related court decisions, first-class legislation and being home to reputable institutions support that. HKIAC’s administered caseload continues to grow, increasing by two-thirds between 2016 and 2017.

HKIAC has been committed to spreading the message of Hong Kong’s excellence. We regularly organise events in Hong Kong, most notably being Hong Kong Arbitration Week, now in its seventh year attracting around 400 participants locally and internationally to Hong Kong. This concept has been replicated the world over. We recently worked with the Department of Justice to secure the ICCA Congress in Hong Kong in 2022 — the equivalent of winning the bid to host the Olympics in the arbitration world! We presented Hong Kong’s successful bid in Sydney earlier this year. We also have extensive outreach programmes where we engage with governments, legal professionals and businesses overseas. We have a specific focus this year on emerging Belt and Road economies in the Asean region.

Is HKIAC witnessing an increase in disputes from the mainland relating to foreign-local joint ventures? Are there any trends emerging that you can discern?

SG: Our caseload involving parties from mainland China has consistently represented over 40 percent of our total administered cases for several years. Last year the percentage reached 55 percent. In terms of sector representation, corporate disputes involving mainland Chinese parties have steadily increased from 13 percent in 2014 to 25 percent in 2017. With mainland Chinese investment continuing and likely to grow with the announcement of initiatives like the Belt and Road, we anticipate seeing more corporate and project finance disputes in the years to come.
The size of the disputes we see is also increasing. In 2017, the total amount in dispute in our cases was US$5 billion, double the total in 2016. This reflects the increase in larger, more complex corporate joint venture-type disputes of high value.

Government officials on all sides are keen to promote the Guangdong-Hong Kong-Macau area as a unified economic region. What opportunities and challenges does this present for HKIAC?

SG: The Greater Bay Area initiative offers another opportunity for Hong Kong and HKIAC to offer a sophisticated, reliable and well-established framework to resolve disputes arising between parties from the three separate legal jurisdictions involved. HKIAC’s expertise related to technology and intellectual property disputes will be particularly relevant for the types of disputes that might arise out of the Greater Bay Area. We have established a specialist panel of arbitrators experienced in the field of intellectual property matters, an area where technical expertise is often required and can add to the more efficient resolution of the dispute. Also, HKIAC arbitration rules have comprehensive confidentiality obligations. This is particularly important in intellectual property disputes where confidential information or trade secrets are at stake.

The international arbitration community is debating third-party funding for arbitrations. Do you have strong views on the issue?

SG: Third-party funding is a welcome feature of the arbitration industry in Hong Kong. It allows impecunious parties, or those looking for ways to reduce the financial risk associated with pursuing a claim, to have access to third-party funding for meritorious claims. It is essential, however, that users fully understand the risks as well as the advantages of funding, and that funders operate to a high professional standard.

From HKIAC’s perspective, it is critical that the involvement of a funder does not jeopardise the arbitration process by providing grounds for challenge or set aside of an award. To prevent this, we are revising our rules to require a funded party to disclose the fact of a funding arrangement. This is to ensure that effective checks can be conducted by arbitral tribunals to ensure no conflicts of interest arise, which could potentially lead to a challenge against the arbitrator or the eventual award.

Similarly, a lot of recent debate has been generated regarding the pros and cons of publishing awards on an anonymous basis to provide precedents. Does the HKIAC have a view on this?

SG: HKIAC does not have a practice of publishing redacted awards. Given the comprehensive confidentiality regime in Hong Kong, one could only proceed in this direction carefully. I recognise that there is demand in some corners for the publication of such materials. On the other hand, parties enjoy the privacy and confidentiality of their disputes in Hong Kong arbitrations. HKIAC is currently investigating ways in which it can share some of its internal jurisprudence and insights from its casework with the legal and business communities by publishing reports on its activities.

Who is your mentor?

SG: I have had several key mentors during my career. I have been lucky to have been led by excellent lawyers in each chapter of my career. Jennifer Kirby at the ICC, Brooks Daly at the PCA and Matt Gearing, chairperson of HKIAC. I also share Neil Kaplan as a mentor, along with many others who have had the fortune of meeting and working with him.


Screen Shot 2018-10-23 at 11.21.51 AMAMC: How is technology and the use of big data affecting the way that international arbitration is evolving? Are you now seeing people with different skills being called upon to be arbitrators, for example?

SG: Technology is already helping drive down the time and cost associated with arbitration, for example, law firms are using more technology in e-discovery processes to analyse data more rapidly and effectively. Parties file submissions electronically and sometimes to secured sites. This removes the need to transfer voluminous documents around the world. This year, HKIAC will introduce an online repository service to facilitate the electronic storage of entire case records. Parties and tribunals frequently hold meetings and hearings by video link or telephone call.

For all participants in international arbitration, there is increasing scrutiny and questions around cyber security. Much information in arbitrations is sensitive and confidential. It is imperative that such information is treated securely and that there are no vulnerabilities in the process by which information is exchanged. As a result, arbitrators are being called upon to improve their IT infrastructure and functioning, ie, using a secure email account rather than a gmail account, for example. HKIAC has this year upgraded its cybersecurity systems, including that all communications may be encrypted from HKIAC to the end recipient.

In terms of disputes around technology, we are seeing cases in which the parties demand that their case be determined by an arbitrator with experience in certain kinds of technology.


AMC: What is your hinterland?

SG: Outside of work I enjoy playing sport, my favourite being popular antipodean sports such as netball and touch rugby. Hong Kong has a great sporting culture and competition is good. I am also training with three colleagues to complete the Moontrekker in October this year, an overnight 30km run on Lantau Island. I have also done a lot of improvisational comedy theatre in my life (in Amsterdam and Paris) and while the scene here is a lot smaller, it exists and I happily get involved when I am in town. I am also getting married this year so am being inducted into the world of all-things-wedding related. Good times.

Hong Kong Arbitration Week 2018 will take place between 29 October and 2 November. More information can be found here.



Sarah Grimmer is Secretary-General of Hong Kong International Arbitration Centre. She was formerly Senior Legal Counsel at the Permanent Court of Arbitration (PCA) where she acted as registrar in several inter-State arbitrations under the Law of the Sea Convention and served as tribunal secretary in multiple investment treaty arbitrations and contract-based claims.

Prior to joining the PCA, Sarah served as Assistant Counsel at the ICC International Court of Arbitration in Paris. She was also a member of the international arbitration group at Shearman & Sterling LLP in Paris, prior to which she worked in private practice in Auckland. In 2015, Sarah was appointed to the Special Tribunal for Lebanon Disciplinary Board. She is a member of the ICCA-ASIL Task Force on Damages (2016), ICCA Publications Committee (2015), the IBA Investment Arbitration Subcommittee (2014), New Zealand ICC Arbitration Committee (2014), and the IBA Arb40 Steering Committee (2013).

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