THE COMMONWEALTH Government must invest more money into Australia’s International Arbitration (IA) efforts or risk significant early inroads being lost to perceptions of bias, says one of the region’s top IA centres.
Secretary-general of The Hong Kong International Arbitration Centre (HKIAC), Christopher To, was alarmed to hear that a one-off grant of $25,000 was all the Australian Government had contributed so far.
“That’s simply not enough,” he said of the figure, which pales in comparison to the HK$19.1 ($4.06) million invested by HK’s government to launch its centre in 1985.
Despite the relatively small public contribution, Australian efforts to establish Sydney as a regional IA hub have continued mainly due to hefty financial contributions from the nation’s top-tier law firms. While impressed by the profession’s overall commitment to the cause, To warned that private funding arrangements opened the door for perceptions of bias to creep in.
“It’s great that law firms are supporting [the IA push in Sydney] but because they are funding the exercise, it mightn’t be so good for wider perceptions,” he said. “For example if there is a dispute between a US and Australian company, which will most likely be represented by local lawyers, the foreign party could feel very uncomfortable, partly because there may be a feeling of bias.”
To’s comments come as part of Lawyers Weekly’s recent visit to Hong Kong, which is captured in a special six-page investigative feature starting on page 10 of this issue.
He added that IA centres needed be viewed as totally impartial organisations, free from influence of both private and public institutions. Despite a large investment initially, To said the SAR Government was “not involved” with the day-to-day running of HKIAC, which he claimed was effectively a business in its own right.
“Parties want to know that the country their dispute is being heard in is a level playing field. In Hong Kong it happens all the time where a foreign company will win over a local one,” he said.
Furthermore, over 10 per cent of IA’s conducted in Hong Kong last year were between foreign parties, a statistic that To claims to be evidence that HKIAC is walking a straight line well.
It has even bounced back better than expected from the damage inflicted by SARS, which ensured the postponement of two matters.
“Those two bookings are now back in place and our utilisation rate is back to 90 per cent [of arbitrators],” he said.
Maintaining only six full-time staff, To describes the centre “as a lean operation”. Its main functions surround appointing arbitrators and promoting HK’s virtues as a preferred IA venue.
He stressed that instead of viewing peers as competition, centres should work to together to promote IA on a wholesale basis. Accordingly, To welcomed Australia’s efforts and said they must continue as “a matter of national pride.”
“Hosting international arbitration is a sign of a sophisticated, multi-cultural city. Australia can’t afford to go backwards and just concentrate on domestic matters. They’ve got through the tough hurdles to set it up, now a long-term commitment is needed,” he said.