Hong Kong is Still Ahead in International Arbitrations, but Singapore is Gaining Ground
The difference between the number of new cases filed at the Hong Kong International Arbitration Centre and the Singapore International Arbitration Center narrowed to 24 cases in 2019 from over 100 cases in 2018.
June 09, 2020 at 03:50 PM
5 minute read
Amid the worst political crisis in recent memory, Hong Kong continues to attract more international arbitrations than longtime rival Singapore, but the Southeast Asian city-state is closing in.
In 2019, the Hong Kong International Arbitration Centre (HKIAC) received a total of 503 new disputes, down from 521 in the previous year; meanwhile, the Singapore International Arbitration Centre (SIAC) reported 479 new case filings—a new record for the institution, and up nearly 20% from 2018′s caseload. The difference between the two organizations narrowed to 24 cases in 2019 from over 100 cases in 2018.
And that gap has been closing over the past decade. In 2011, the HKIAC was already handling 502 cases annually; that compares to the 188 cases SIAC had that year. But since then, SIAC has largely been on an upward trajectory in terms of caseload, with only two exceptions in 2014 and 2018; notably between 2014 and 2017, SIAC doubled its new caseload from 222 to 452.
Meanwhile, the HKIAC has seen relatively flat growth during the nine years since 2011. After hitting 532 cases in 2017—the highest amount during the period—the organization has seen its caseload drop for two years in a row. Among the 503 new cases filed with the HKIAC in 2019, the organization saw 308 arbitrations—up 16% from 2018 and the largest single-year growth of arbitrations in a decade.
Arbitrations usually account for between 50% to 65% of the HKIAC's total caseload; other cases include mediations, adjudications and domain name disputes.
SIAC said all 479 new case filings in 2019 were arbitrations.*
A spokesperson for the HKIAC said that since 2013, the institution has allowed for a single case to be filed under multiple contracts, which may contribute to the flat growth in the total number of cases. SIAC has also allowed parties to consolidate cases since 2016.*
Last fall, Hong Kong and mainland China agreed to a pact that will allow Chinese courts to grant interim relief on Hong Kong arbitration awards. The agreement, which was unique to Hong Kong and the mainland, was dubbed a game changer for arbitral institutions in Hong Kong, including the HKIAC, giving them a major boost in competitiveness over the Singaporean institutions when it comes to arbitrations involving Chinese parties.
In 2019, China was the third-largest country of origin for parties to arbitrations at SIAC; 76 Chinese parties filed cases with SIAC, compared to 485 from India and 122 from the Philippines. SIAC has not really seen significant growth in China-related arbitrations over the years. The number of Chinese users increased from 46 to 76 in 2016 and has remained at around that number ever since, while the number of users from India went from just under 100 in 2016 to nearly 500 in 2019.
Meanwhile, the number of HKIAC users from mainland China has consistently topped the list of nonlocal users.
In addition to China, the HKIAC last year became the first foreign arbitral institution to be recognized as a permanent arbitral institution in Russia. This means that the HKIAC can administer certain types of Russian disputes that other institutions cannot. Russia has not been in the top 10 origins of users for the HKIAC in the past four years.
The Singapore International Arbitration Centre also saw significant growth in the value of cases over the years. In 2019, SIAC reported $8.09 billion in the total value of disputes for all new case filings, up 14.6% from that the previous year. In the same year, the HKIAC reported a total value of $4.7 billion for disputes in all new arbitration cases, a decrease of nearly 30% from 2018′s $6.7 billion. Methodologies used to calculate case values may vary between the two institutions, with the HKIAC calculating the amount based on arbitrations, while SIAC calculates its amount based on all new case filings. Both organizations said they only calculated the cases whose values can be quantified and excluded cases whose values aren't quantifiable.
Still, SIAC's total for total dispute value went from a little over $1 billion in 2011 to last year's $8.09 billion. The value in 2016 was $11.85 billion, but this could be an outlier resulting from several big-ticket cases that year. However, even when the 2016 number is removed, the institution has still seen steady growth over the past nine years.
The HKIAC, on the other hand, has seen a bumpier growth trajectory. The organization enjoyed a growth period between 2012 and 2015 and between 2016 and 2018 before a drop last year.
*Updated June 10: This story has been updated with comments from SIAC regarding a breakdown of caseload and consolidation of arbitrations.
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