Arbitration (Amendment) Ordinance 2017

The Arbitration (Amendment) Ordinance 2017 was gazetted on 23 June 2017 http://www.gld.gov.hk/egazette/pdf/20172125/es1201721255.pdf after the Arbitration (Amendment) Bill 2016 was passed by Hong Kong’s Legislative Council (“Legco”) on 14 June 2017.

The idea of the new law was proposed by C.K. Kwong, a senior partner of Sit Fung Kwong & Shum, to the Hong Kong Government Working Group on Intellectual Property Trading which was formed to study the overall strategy for promoting Hong Kong as an IP trading hub. The Sub-Group on IP Arbitration and Mediation with Mr. Kwong appointed as Convener, looked into the strategic area of IP ADR with the view to developing Hong Kong into an IP ADR hub. Mr. Kwong delivered his draft working paper to the Working Group on Arbitrability of IPR when it was set up by the Department of Justice in May 2015.

The Arbitration Ordinance (Cap. 609 of the Laws of Hong Kong) has now clarified that disputes over intellectual property rights are arbitrable and that it is not contrary to the public policy of Hong Kong to enforce arbitral awards involving intellectual property rights (IPR).

The amendment legislation was the result of rounds of consultation and after 19 drafts were developed between November 2015 to June 2017. When the main operative part of the new legislation relating to IP arbitration come into operation on 1 Jan 2018, parties choosing Hong Kong law as the lex arbitri governing the arbitration agreement and/or Hong Kong seat (legal place of arbitration), the relevant tribunal will not have to worry about jurisdictional issues surrounding arbitrability of IP rights under the New York Convention Articles V(1)(a) and (2)(a)(b) (corresponding to UNCITRAL Model Law – Articles 36(1)(a)(i) and 36(1)(b)(i)(ii) ).

Hong Kong now has an added competitive edge above those jurisdictions which do not provide a clear statutory guidance to address potential concerns and uncertainties on the arbitrability of registered IP rights.

When the Arbitration (Amendment) Bill 2016 was first gazetted on 2nd December 2016, Senior Partner, C. K. Kwong, delivered a talk on the same day at the session entitled “Resolution of IP Disputes – Recent Development” at the Business of IP Asia Forum 2016 (the session was co-organized by the Department of Justice and Hong Kong Trade Development Council). Mr. Kwong’s earlier power point presentation can be found at http://www.sfks.com.hk/upload/newsfile/0000000045.pdf .