PCA–Hong Kong Host Country Agreement anticipates increase in disputes involving States in Asia

At a ceremony in Beijing on 4 January 2015, representatives of the Permanent Court of Arbitration (PCA) and the Central Government of the People's Republic of China signed a Host Country Agreement and a related Memorandum of Administrative Arrangements to provide facilities and support services in Hong Kong for PCA-administered dispute resolution proceedings. The Government of Hong Kong announced the arrangements in a press release, available here.

Established by treaty in 1899, the PCA is a leading provider of institutional support services for disputes involving States, including both inter-State and investor-State arbitration. Its caseload has grown substantially in recent years, particularly as it has begun to administer an increasing number of claims under investment treaties. The Secretary General of the PCA also performs an important role under the UNCITRAL Arbitration Rules to designate an appointing authority if the parties do not designate one by agreement.

The conclusion of the arrangements for PCA cases to be heard in Hong Kong extends the PCA's policy of concluding Host Country Agreements with governments around the world in order to provide a legal framework for conducting PCA-administered proceedings. While the PCA is headquartered in The Hague, disputes administered by it may be conducted in other places under conditions that are similar to those that prevail under the PCA's arrangements with the Netherlands if Host Country Agreements are in place. Host Country Agreements guarantee that suitable facilities and services will be available for PCA-administered proceedings, and regulate the privileges and immunities provided by the host government to participants in such proceedings. In Asia, in addition to Hong Kong, the PCA has concluded Host Country Agreements with the governments of Singapore (2007), India (2008), and Vietnam (2014).

The formalisation of the legal framework covering PCA-administered disputes in Hong Kong is a welcome development, as the number of disputes involving States continues to rise worldwide. It is anticipated widely that the number of disputes involving States in Asia will continue to rise. In fact, Hong Kong has already served as the venue in at least one PCA-administered investor-State arbitration, which had hearings at the Hong Kong International Arbitration Centre in July 2013.

[Herbert Smith Freehills' public international law specialists in Asia and around the world are leaders in the field. Our lawyers have deep experience representing States and private parties in both investor-State and inter-State proceedings, including PCA-administered cases.  For further information, please contact May Tai, Partner, Simon Chapman, Partner or your usual Herbert Smith Freehills contact.]