In the sixth episode of our Take 10 podcast, Hong Kong partner Andrew Johnstone invites Peter Ferrer, our BVI-based co-head of the global Litigation, Insolvency and Restructuring team, and Hong Kong-based counsel Andrew Chin, to join him for a discussion on all things arbitration, particularly the use of arbitration in offshore disputes.
While most offshore disputes are resolved within the British Virgin Islands and Cayman Islands courts, there is an increasing trend in onshore and offshore jurisdictions to resolve disputes by way of arbitration.
The main reasons for choosing arbitration are increased confidentially and privacy, and the ability to choose your own arbitrator, ensuring the tribunal understands both parties’ cultural differences and represents their interests.
When choosing the law and seat of the arbitration, parties will consider the following:
enforcement – how easily can the award be transferred and recognised across borders?
the procedural rules that apply – how easily can challenges be made and what options are available to appeal?
the arbitration infrastructure – how modern is the legislation and what is the judiciary’s record of setting aside awards?
The arbitration infrastructure in the BVI:
The BVI developed a bespoke arbitration infrastructure, adopting the UNCITRAL Model Law on International Commercial Arbitration, while including certain provisions based on models from France, Sweden and England.
Inspired by Maxwell Chambers in Singapore, the BVI established its own international arbitration centre (the BVI IAC), equipped with full administrative and concierge support, registrar and secretarial services, and state-of-the-art facilities including hearing and breakout rooms.
Work permits are not required for arbitrators and counsel involved in arbitration in the BVI, unlike barristers attending court who need work permits.
Asian-based parties make up a large number of those who use the offshore courts. In addition to arbitration in the BVI, the leading seats in Asia are Singapore, Hong Kong and South Korea. More recently, there has been an increased interest in using the China International Economic and Trade Arbitration Commission (CIETAC) as a top seat for arbitration.
Hong Kong’s flexible arbitration regime allows Asian-based clients to arbitrate BVI or Cayman governed law disputes within Hong Kong, with BVI and Cayman law experts acting as the chair or co-counsel in the arbitration.