Publish time: Wed Jul 27 15:57:49 CST 2016
Tulip Fragrance over Hague Summit, New Chapter of Sino-Dutch Exchange
2016 Hague Summit on Commercial Dispute Resolution in China Successfully hosted
On June 24 2016, the 2016 Hague Summit on Commercial Dispute Resolution in China was successfully hosted at the The Hague Marriott Hotel by the Beijing Arbitration Commission / the Beijing International Arbitration Center (the “BAC”), jointly with the Permanent Court of Arbitration (the “PCA”).
The BAC has held the launch events of the Commercial Dispute Resolution in China: An Annual Review and Preview series for four consecutive years in Europe. The Hague Summit is the last stop of the launch event series of this year, and also the first time the BAC hosts such event in the Netherlands. The Netherlands is China’s second largest trade partner in the EU, and also China’s important strategic partner. This Summit was held on the basis of the Commercial Dispute Resolution in China: An Annual Review (2016) (the “Annual Report 2016”), for the purpose of making a full presentation of the development of Chinese commercial law, practice and dispute resolution in 2015, which covered eight sectors including commercial arbitration and mediation, energy, international trade, finance, construction project, real estate, intellectual property and investment. The BAC delegation, consisted of 16 members including 8 authors of those sub-reports, attended this event. Meanwhile, the BAC invited 17 industry experts from the Netherlands and its neighboring countries to act as moderators or commentators and thus to conduct in-depth exchanges and discussions on relevant topics about commercial dispute resolution. The Summit has attracted a number of professionals from Europe, including partners and barristers from top law firms, professors and scholars from renowned law schools, arbitrators and staffs of well-known arbitration institutions, and thereby to assist people within the business and legal communities both at home and abroad to better participate in China related investment and trade, and provide an overview and prospect of the Sino-Dutch cooperation in both economic and legal affairs.
The Summit won joint media support from the Global Arbitration Review, Wolters Kluwer, LexisNexis, and the “ChinaGoAbroad”, and was supported by LexPR.
The Summit
The Summit
The opening ceremony was hosted by Dr. Chen Fuyong, Deputy Secretary General of the BAC. Madame Wang Hongsong, Vice Chairperson of the BAC, Ms. Lisa Bingham, Legal Counsel of the PCA and Deputy Executuve Director of International Council for Commercial Arbitration , subsequently delivered opening speeches on behalf of the hosting institutions respectively.
Dr. Chen Fuyong
Madame Wang Hongsong firstly extended a warm welcome to all the audience and speakers participating in the event and thanks to the PCA for its support to this Summit, and then presented a brief introduction of the Annual Report 2016. She also expressed the sincere wish of the BAC, an institution that has achieved considerable development during the past two decades, that the Annual Report series would present an comprehensive study of the development of commercial dispute resolution in China, and help to promote the economic cooperation between China and other countries such as the Netherlands.
Madame Wang Hongsong
Thereafter, Ms. Lisa Bingham spoke on behalf of the PCA. She thought that the Annual Report series organized by the BAC is helpful for the external world to have an comprehensive understanding of the Chinese economy, commercial law practice and dispute resolution, and fully affirmed the significance of the Summit. She introduced that the PCA was established in 1899, and China is one of the orignal contracting states and the earliest member states of the PCA, and has profound historical connection therewith. She believed that this Summit would not only help to promote the exchange between Chinese and Dutch professionals, but also promote commercial dispute resolution services suppliers to provide better legal services to Chinese and Dutch clients. As last, she conveyed the strong expectation of further cooperation with the BAC, and wished the Summit a great success.
Ms. Lisa Bingham
Following the opening ceremony, the morning part of the Summit proceeded in line with the agenda, and the sessions on arbitration and mediation, energy and international trade with keynote speeches, comments and exchanges thereon were conducted in turn.
Session on Arbitration and Mediation
The Session on Arbitration and Mediation was moderated by Ms. Lisa Bingham. Dr. Helena Chen, a partner of Pinsent Masons LLP and a BAC arbitrator, gave the keynote speech on the basis of the Annual Review on Commercial Arbitration in China (2016) and the Annual Review on Commercial Mediation in China (2016). First, by referering to a series of statistics, she pointed out that the Chinese arbitration in 2015 had a sharp increase from the year of 2014 in both the caseload and the overall disputed amount. Also, she introduced China’s acceptance of foreign related cases, the recognition of foreign related factors, and the distinction between foreign related arbitration and domestic arbitration. Next, she referred to important cases and statistics about judicial review of arbitral awards by Chinese courts, with the specific example that the number of non-enforcement of the BAC arbitral awards of the past year was zero, indicating the openness of Chinese courts in the recognition and enforcement of arbitral awards. Apart from that, she summarized the significant development worthy of note within the Chinese commercial arbitration area during the past year, that included the launch of offices of foreign arbitration institutions (ICC, SIAC and HKIAC) in the Shanghai Free Trade Zone, the establishment of cooperative organization among Chinese arbitration institutions such as the China Free Trade Zone Arbitration Cooperative Alliance. With respect to mediation, Dr. Chen took the BAC Mediation Center as an example to highlight the fast growth and development prospect of Chinese commercial mediation. Following the keynote speech, Ms. Hyun Jung Lee, Legal Counsel of the PCA, made comments thereon. She first presented an introduction of the PCA’s arbitral proceedings such as the appointment of arbitrators. The panelists then had a discussion on the content and components of arbitration agreements as stipulated in Article 16 of the PRC Arbitration Law, with a comparison with legal requirements of western countries on arbitration agreements, and also on issues like the categories of cases filed with mediation centers.
Session on Arbitration and Mediation Ms. Lisa Bingham
Dr. Helena Chen Ms. Hyun Jung Lee
Session on Energy
The second session was speech and discussion on energy law. This session was moderated by Ms. Marieke van Hooijdonk, a partner of Allen & Overy. Dr. Libin Zhang, a partner of Broad & Bright and a BAC arbitrator, delivered the keynote speech based on the Annual Review on Energy Dispute Resolution (2016). He firstly analyzed the issues in dispute within the energy area, as well as the conflicts between energy issues and public policies. Dr. Zhang pointed out that currently the reform in the energy industry is moving slowly, and more and more problems of traditional energy are reaching their red line. This situation must be changed. The Chinese government has made its decision to change the traditional energy structure centered on coal, and to promote cleaner energy such as new and renewable energy. With such an industry transformation, the caseload of energy disputes has been increasing with huge amount in dispute. This is clearly reflected in the ICC caseload in 2015, in which around 20% arbitrations were energy related disputes. The conclusion of Paris Agreement will promote green energy and clean energy development in China. Despite the problem of market access within the energy industry, with the process of the “Energy Revolution”, more and more private enterprises will enter into the upstream sectors of the energy industry, whereas the constant improvement of relevant laws and regulations will assist with dispute resolution within the energy industry.
Mr. Bommel van der Bend, a partner of De Brauw Blackstone Westbroek, acted as the commentator in this session. He introcuted the energy reform in Europe, and said that Europe and China or even the whole Asia share similar economic situation and energy problems. He thought that arbitration is the most proper dispute resolution mechanism for energy related disputes, and the amendment to the Dutch Energy Law is of value of reference to the update of the Chinese legislation on energy. The panelists also had an in-depth exchange on the opportunities and challenges of China’s acceding to the Energy Charter Treaty as well as issues for consideration. Dr. Zhang was of the opinion that compared with bilateral treaties that have high costs for negotiation, the Energy Charter Treaty is more efficient. Under the background of a global market, it is expected that more arbitrators expertised in the energy industry and familiar with China will participate in the practice of China related energy dispute resolution.
Session on Energy Ms. Marieke van Hooijdonk
Mr. Zhang Libin Mr. Bommel van der Bend
Session on International Trade
Next to the Session on Energy came the Session on International Trade that was moderated by Mr. Tom Claassens, a partner of Loyens & Loeff and Dr. Wang Xuehua, a partner of Huanzhong & Partners, gave the keynote speech in combination with the Annual Review on International Trade Dispute Resolution (2016). Dr. Wang said that despite the decline of imports and exports indexes indicates complexity of the past year’s international trade, China had its new progress in the international trade industry: the constant acceleration of free trade agreement negotiations between China and other countries and regions, mainland China’s conclusion of CEPA service trade agreements with Hong Kong and Macau, China’s proactive development and experience sharing of free trade test zones, the implementation of the Belt and Road Initiative in Asian, African and European countries, and China’ active participation in WTO activities and acceding to the WTO Trade Facilitation Agreement. He also addressed on some practical issues based on cases, such as the judicial security of free trade zones and the risk transfer in international sales of goods.
Following Dr. Wang’s speech, Ms. Frederike E.M.Stikkelbroeck, Senior Legal Counsel of AkzoNobel, provided her remarks. She was of the opinion that the keynote speaker has analyzed developments of and challenges to the international trade industry from the angles of China, the EU and the whole world. As the second largest trade partner of the EU, China has a close connection with the EU in trade. The panelists also discussed the important role China plays as a member state of the WTO, and believed that the recognition of China’s market economy will be helpful to a closer inter-connection and better growth of the global economy.
Session on International Trade Mr. Tom Claassens
Dr. Wang Xuehua Ms. Frederike E.M.Stikkelbroeck
The remaining part of the Summit in the afternoon covered five sessions on finance, construction project, real estate, intellectual property and investment. The speakers and the audience conducted extensive exchange and discussion on laws and dispute resolution within these industries.
Session on Finance
The first session in the afternoon was on Finance. Prof. Gerard J.Meijer, a partner of NautaDutilh N. V., acted as the moderator. Dr. Xiuming Tao, a partner of JunZeJun Law Offices and a BAC arbitrator, provided the keynote speech. He pointed out that the caseload of financial disputes in China currently is in the growth of a blowout type, and the slowdown of China’s economic growth brought extreme complexity to the financial industry in 2015, where a number of new-type and structurally complicated financial cases has been emerging. He also analyzed the main problems of the financial market: the fast growth of new financing models such as internet financing, and on the other hand, the imperfectness of relevant laws and regulations and the deficiency of judicial precedents. The economic signals reflected in the financial industry and the real economy are not in line with each other. Disputes arising from the “civil financing” namely irregular financing frequently take place. When dealing with such cases, the following points should be kept in mind: first, in-depth and accurate understanding of the structure of financial products; second, accurate computation and analysis of risks; third, flexible interpretation of traditional legal concepts in new-type financial disputes, and full respect to new-type financing models, with expectation of the development and improvement of the personal financial market.
As the commentator in this session, Prof. Pim Rand of the Leiden University thought that Europe has the similar problems as China does in its financial industry: new financial products and financing models rapidly emerge, but relevant laws and regulatory rules are left behind. He believed that Dr. Tao’s suggestions are of value of reference to the European financial industry as well. The panelists also had an in-depth discussion on the issue of jurisdiction in collective financial disputes and the advantages of arbitration in resolving such collective disputes.
Session on Finance Mr. Gerard J.Meijer
Dr. Tao Xiuming Prof. Pim Rank
Session on Construction Project
Thereafter, under the hosting of Prof. Jan M. van Dunne of the Erasmus University, Ms. Jinghui Tan, Director of the City Development (Beijing) Law Firm and a BAC arbitrator, gave her keynote speech on construction project based on the Annual Review on Construction Dispute Resolution (2016) that she has authored. Ms. Tan firstly made a brief introduction and analysis of the status of Chinese economic development and disputes within the construction project industry in 2015. She thought that with the slowdown of the Chinese economic growth, construction project disputes are increasing. Nevertheless, with the promotion of the PPP model and the Belt and Road initiative, investments in infrastructure is developing quickly. Next, Ms. Tan introduced the main changes in Chinese laws on construction project, including the application of PPP model, EPC modeling and Building Information Modeling in China, and opportunities of and challenges to the Belt and Road Initiative. Generally speaking, the dispute resolution within the construction project industry has become more open, professional and efficient. Lastly, Ms. Tan finished her speech with sample cases and analyses on whether the brokerage fee should be paid in construction projects and the relationship between project settlement and government audit report.
At the close of Ms. Tan’s speech, Mr. Christopher Miers, Director of Probyn Miers, gave his remarks on her speech after comparison of similarities and differences of the Chinese and the European construction project markets. He said that the PPP model has a longer history in Europe, and the main reason for its application is the capital shortage of the government, with problems as well in practice. Meanwhile, he introduced the revision and enforcement of the BAC Construction Dispute Board Rules. All the three panelists believed that the construction dispute board rules is an efficient way of dealing with construction project disputes, and promotes a timely decision on rights and liabilities in disputes arising from complicated projects during their construction process. At last, the panelists addressed on the relationship between the construction party and its builders under the special background of Chinese state owned enterprises to which more attentions should be paid.
Session on Construction and Project Mr. Jan M.van Dunne
Ms. Tan Jinghui Mr. Christopher Miers
Session on Real Estate
The third session in the afternoon was on real estate, moderated by Mr. Dolf Segaar, a partner of CMS. Mr. Dennis Deng, a partner of Dacheng Law Offices and a BAC arbitrator, introduced the development trend of the Chinese real estate market and the legislative changes according to the Annual Review on Real Estate Dispute Resolution (2016) that he has authored. In general, the Chinese government has promulgated a series of easy housing policies to meet the market demand and to clear out the housing stock. Sustained market upsurges were seen in first-tier cities and the continued bleakness in lower-tier cities. The growing diversification of the market has emerged, with various demands from housing to retirement living, culture and tourism. In the next place, he concluded the legislative trend relating to real estate that was reflected in laws and regulations on land administration, the real estate registration, foreign investment into the real estate market, and real estate advertising standards. Apart from that, Mr. Deng also briefed the audience on significant arbitration, mediation and litigation cases. He was of the view that to the dispute resolution industry, arbitration is a proper way to resolve many disputes arising from the real estate industry, and mediation is also an important way of dispute resolution, and there are plenty of opportunities in the Chinese real estate industry for mediation.
Prof. Jan M.van Dunne of the Erasmus University acted as the commentator again in this session. He thought that it could be seen from the cases referred to by the keynote speaker that mediation is still in the initial stage in its application in the Chinese real estate disputes, but will have great development space. The panelists exchanged their views as to the application of the principle of good faith in real estate contracts and the standards and principles of interpreting such contracts in the absence of specific agreements by the parties.
Session on Real Estate Mr. Dolf Segaar
Mr. Dennis Deng Prof. Jan M.van Dunne
Session on Intellectual Property
The Session on Intellectual Property was moderated by Mr. Huib Berendschot, a partner of AKD. Dr. Guanbin Xie, the founding partner of Lifang & Partners and a BAC arbitrator, delivered the keynote speech as the leading author of the Annual Review on IP Dispute Resolution (2016). He mainly highlighted the new changes in the Chinese IP laws and those landmark IP cases in 2015, and identified primary difficulties in IP protection in China in the past: first, plaintiffs’ excessive burden of proof; second, low compensation awarded for damages in IP disputes; third, the tedious and inefficient procedure of IP litigation. However, the draft amendment to the Chinese Patent Law in 2015 as well as the Several Provisions on Issues concerning the Application of Law in the Trial of Patent Dispute Cases and the Interpretation on Several Issues concerning the Application of Law in the Review of Cases Involving Behavior Preservation for Intellectual Property Right and Competition Disputes released by the Supreme People’s Court have given positive response to the three problems, such as the burden of proof inversion, the increase of the statutory amount of compensation and the preliminary injunction. The openness of Chinese courts in awarding compensation for IP infringement damages has shown China’s stress laid on IP protection.
At the close of Dr. Xie’s speech, Mr. Tobias Cohen Jehoram, a partner of De Brauw Blackstone Westbroek provided his remarks. He thought that China and the Netherlands have very similar IP legal frameworks. He understood that China currently has three IP courts and almost one hundred IP judges, and addressed on how the courts could efficiently coordinate with each other. Meanwhile, the panelists thought that arbitration has unique advantages in dealing with IP cases, because of the professionalism and flexibility, and the application of interim measures could better protect the interests of the parties.
Session on Intellectual Property Mr. Huib Berendschot
Dr. Xie Guanbin Mr. Tobias Cohen Jehoram
Session on Investment
Following the Session on Intellectual Property, the last session convened under the hosting of Prof. Li Yuwen of the Erasmus University. Mr. Bao Zhi, author of the Annual Review on Investment Dispute Resolution (2016), a partner of Fen Xun Partners and a BAC arbitrator, gave the keynote speech. Firstly, he presented an overall analysis of the general trend and features of investment disputes, including the comparison of traditional disputes and new-type investment disputes, the contradiction of the order of performance that has become one of the key disputes, and the balance between the regulation and restraint of financing. He pointed out that the difficulties of investment dispute resolution lies in the late legislation on the quick growth of the innovative investment market. With respect to the investment legislation, Mr. Bao introduced the key points of the draft Foreign Investment Law, including the definition of “foreign investment”, the release of a negative list for market access, the national security examination and the transition from approval system to registration system in the IPO reform. Next, he analyzed some hotspot issues such as the multilayer limited partnership, the look though principle, the value adjustment rules and the share repurchase arrangement based on typical cases.
Mr. Farouk El-Hosseny, Legal Counsel of the PCA, commented on the speech. He paid concerns to the Foreign Investment Law’s influence and limitation on foreign investors in China. In this regard, Mr. Bao thought the refinement of foreign investment legislation will provide foreign investors with a clearer map for their investment in China. Mr. Farouk El-Hosseny also introduced hot issues such as the development of investment arbitration, the features of the parties in investment arbitration, and whether the arbitral awards are biased.
Session on Investment Prof. Li Yuwen
Mr. Bao Zhi Mr. Farouk El-Hosseny
The audience has shown strong interest in the hotspot issues in different sectors included in the Annual Report 2016, and had heated discussions and exchanges with speakers.
Q&A section
When all the panel discussions were finished, Mr. Williem van Baren, President of the Netherlands Arbitration Institute, delivered the closing speech. He spoke high of the Annual Report series organized by the BAC for their comprehensiveness and professionalism. He appreciated the organization of this Summit in Hague that has provided the Netherlands and even the whole Europe with an extensive and in-depth understanding of the latest development of commercial dispute resolution in China, and strongly affirmed the significance of the BAC’s holding of such event in the promotion of Sino-Dutch commercial dispute resolution exchange. He was also amazed at the caseload and quick development of the Chinese arbitration, and confirmed that many Chinese legislations and studies on commercial dispute resolution have already been in line with the international practice and even world leading, with important value of reference to the Europe.
Mr. Williem van Baren
At the end of the Summit, Dr. Chen Fuyong extended thanks on behalf of the BAC delegation to all the speakers for their attention and contribution. He said that the original reason for the BAC’s organization of the Annual Report series and the Summit series was to strengthen the constructive and in-depth professional exchanges between China and other countries, and to promote mutual understanding so as to provide better services to the parties in commercial disputes. Here the full day’s event came to its end. After the Summit, the hosts held a cocktail reception. Most speakers and audience attended the reception and had a further exchange and communication.
Cocktail reception
Looking back on the Summit, it can be seen that professionals from both China and the Netherlands have had an in-depth exchange and discussion with respect to the research results and practical experience on dispute resolution in their respective areas of expertise, which has promoted the mutual understanding between the business and legal communites of both countries, and also built a platform for deepening exchange and strengthening cooperation. In a word, it is a further step of the Chinese dispute resolution community toward its globalization.
Group photo of speakers and BAC staffs