Face To Face With Nick Chan Director Of AALCO Hong Kong Regional Arbitration Centre
Nick Chan MH JP is a solicitor with a computer science background, with a day job as Partner and Asia-Pacific practice group coordinator at international law firm Squire Patton Boggs. His distinguished record serving the legal profession and the wider community, along with his background, have contributed to his latest appointment as the Director of the AALCO Hong Kong Regional Arbitration Centre.
The AALCO Hong Kong Regional Arbitration Centre was established on 10 November 2021 on the basis of an international agreement between the Asian-African Legal Consultative Organization (AALCO) and the host country the People’s Republic of China (PRC). The centre was established under public international law rather than being established by virtue of local laws. Local law instruments (such as the recently gazetted International Organizations (Privileges and Immunities)(AALCO Hong Kong Regional Arbitration Centre) Order) serve to implement and give effect to certain provisions of the agreement.
“Out of 47 member countries, AALCO has decided to establish the new regional centre in the PRC, and with support by the Central People’s Government, open the centre in the Hong Kong Special Administrative Region, the third most preferred seat for arbitration in the world with strong fundamentals and growth potential,” says Chan.
Chan believes it would serve “to facilitate member states, businesses and people to access and leverage upon the many unique advantages under the ‘One Country, Two Systems’ principle, staunch support under the country’s 14th Five Year Plan, strong rule of law, a leading legal services and disputes resolution hub with 15,000+ legal and disputes resolution professionals possessing international perspectives and qualifications in 35+ jurisdictions, a leading international financial centre, a unique common law jurisdiction in a civil law country that is the second-largest economy in the world, a regional intellectual property trading centre, international innovation and technology hub, among others, to do more deals, and to prevent, preempt and resolve disputes.”
Hong Kong’s many strengths bode well for the important role of the new regional centre.
“AALCO serves as an important forum for member states to speak for two-thirds of the world’s population in deliberating on international law matters that are of common concern. AALCO has been active in shaping constitutional developments and many international laws, including the Law of the Sea Convention, which has fundamental influence and impact on world order, global businesses and the evolving practice of law. The United Nations recognizes the role and influence of AALCO with a permanent observer seat,” says Chan.
The decision to set up in Hong Kong was warmly welcomed by leaders, from Premier Li Keqiang’s speech quoting President Xi Jinping’s support at the 59th annual session of the AALCO, to recent public speeches by Commissioner Liu Guangyuan of China’s Foreign Ministry in HKSAR.
Outgoing Chief Executive Carrie Lam and Secretary for Justice Teresa Cheng, as reported in news reports, have also given their thumbs up and full support.
The AALCO has a long history. Established in 1956 soon after the Bandung Conference in an era marking the end of many foreign occupations and colonization, and the rise of many then developing countries, it is an intergovernmental organization with 47 member countries comprising of major states from Asia and Africa.
“The new regional centre will deploy cutting-edge ‘anytime, anywhere, any device’ Online Disputes Resolution platform and technology to present opportunities and technology for governments, businesses, NGOs, charities and individuals to tap into a huge market with great opportunities and tackle challenges. In 2021, the combined GDPs of the AALCO member countries exceeded US$26 trillion. 80% of the AALCO member countries are active members of the Belt and Road Initiative. 60% of AALCO member countries are also expected to be active members of Regional Comprehensive Economic Partnership (RCEP), the world’s largest free trading bloc that covers 30% of the global population, and almost 30% of global GDP, which was at around US$96 trillion in 2021,” says Chan.
Operations and Their Benefits
On 25 May 2022, the AALCO Hong Kong Regional Arbitration Centre had its official opening ceremony. Present at the ceremony were Commissioner Liu; the then Secretary for Justice Cheng; consuls general and heads of chambers of commerce from AALCO Member States; representatives from other international organizations; President CM Chan of The Law Society of Hong Kong, Chairman Victor Dawes SC of the Hong Kong Bar Association and other heads of legal organizations and disputes resolution centres; and some dispute resolution experts.
The centre is located on 23/F of the Shanghai Commercial Bank Tower at 12 Queen’s Road Central, the newest extension of the Hong Kong Legal Hub. “We warmly welcome disputes resolvers and parties to use our conference rooms, our facilities, online disputes resolution platform and our model arbitration clause,” says Chan.
Parties may adopt the model arbitration clause (see boxout) in their contracts to designate the use of the AALCO Hong Kong Regional Arbitration Centre Platform Arbitration Rules to resolve contractual disputes.
Chan confirmed that the AALCO Hong Kong Regional Arbitration Centre is not a private company with shareholders working for shareholders’ dividend, nor is it a NGO with a board of directors reporting to a handful of members.
The AALCO Hong Kong Regional Arbitration Centre was established with independent status by an agreement entered into in the city of New York between AALCO and host country the PRC.
“This new regional arbitration centre, the sixth regional arbitration centre of AALCO, functions under the auspices of AALCO as an international institution with the objective of promoting international commercial arbitration in the Asian-African regions and providing for the conducting of international arbitration. As the regional arbitration centre of intergovernmental organization AALCO, the centre is accorded similar treatment and protection usually reserved for international organizations in respect of its archives and documents,” he says.
This means that confidentiality is assured with archives and all documents belonging to the centre, or otherwise held by it, being inviolable.
The centre’s “country-neutral” status facilitates deal-making and disputes resolution.
“Clients trust the independence and neutrality of AALCO centres. As a regional arbitration centre that is accorded independent status, and given the centre operates under the auspices of AALCO with 47 member states, parties to disputes submitted to the “country-neutral” centre can take full comfort that the disputes resolution will be conducted fairly and independently without having to worry about any country being able to assert local protectionism or undue pressure to any decision maker in the disputes resolution process,” says Chan.
Those that use the centre can enjoy extra support on enforcement of award through AALCO.
“Parties conducting arbitration with, or doing background electronic know-your-customer (eKYC) for deal-making with the help of, AALCO Hong Kong Regional Arbitration Centre or other AALCO regional arbitration centres (including in Malaysia, Egypt, Nigeria, Iran and Kenya) are in a better position to take advantage of the strong network built through AALCO to assist with enforcement of arbitration awards,” says Chan.
The new regional centre will collaborate with the other five AALCO arbitration centres and seek to collaborate with, learn from and support all other disputes resolution centres in Asia and Africa. It will also deploy the use of LawTech to improve enforcement of decisions and awards against digital assets and non-digital assets.
Those looking to facilitate evidence/asset preservation and enforcement of awards in Mainland China and beyond will find it especially beneficial.
Parties starting an arbitration in Hong Kong with one of the designated eligible arbitral institutions will be able to immediately go straight to courts in Mainland China to seek interim relief measures to preserve evidence and assets.
This is in contrast to having to wait for the entire arbitration to be completed first. “This unique arrangement is currently available to qualified arbitration institutions seated in Hong Kong. This is a huge advantage that is not available to other disputes resolution centres seated elsewhere,” says Chan.
Both institutional and ad hoc arbitrations are supported by the centre. Even if the parties do not elect to use a ready-made set of arbitration rules, such as the AALCO model clause, which sets out the essential features for cost-and-time-effective arbitration as administered by AALCO; the centre will happily provide assistance to assist the parties and the arbitrators in facilitating ad hoc arbitration.
Clearly, the AALCO Hong Kong Regional Arbitration Centre is well-positioned to handle a variety of disputes.
“The unique advantages are useful not only for fostering investor-state projects (e.g. foreign investors signing a deal with a government) and the resolution of disputes that may arise, but are also perfectly applicable and useful in other situations including Government-to-Government (G2G), Government-to-Business (G2B), Business-to-Business (B2B), Business-to-Consumer (B2C), Peer-to-Peer (P2P), Online-to-Offline (O2O), eCommerce and metaverse related transactions and projects,” says Chan.
“At the AALCO Hong Kong Regional Arbitration Centre, we welcome all forms of collaboration to help improve access to justice and further our vision and mission. We know that economic activities are the life-line of many economies, and by opening our doors and working collaboratively to preempt and resolve disputes, we will contribute to economic growth and strengthen the common bond between the 47 AALCO member states and beyond, capacity build for the next generation of Law + Tech experts, and create much needed jobs and opportunities as the world heals from COVID-19.”
“The new regional arbitration centre will greatly complement the existing dispute resolutions centres in Hong Kong”. He dismisses any fear that the AALCO Hong Kong Regional Arbitration Centre would cause unhealthy competition to the local market.
“We are here to collaborate and grow the pie for disputes resolvers and export disputes resolution services, and to reduce and relieve the pain of countries, businesses and individuals who are suffering from unresolved international and cross-border disputes! The centre will also open up access to the currently untamed Asia-Africa markets for the arbitral institutions in Hong Kong.”
As the Director of the centre, analogous to being in the combined role of Secretary General and Chairman, Chan is committed and very honoured to serve on a pro bono basis for this great noble cause. He is hoping that more people will join in volunteering their support and expertise.
“We are currently recruiting staff and more friends of AALCO Hong Kong Regional Arbitration Centre. We would like to encourage you to volunteer to conduct arbitration under our model arbitration clause,” says Chan.
“Please also share with us your suggestions on the best use scenarios and other potentially applicable situations, such as which countries, business chambers, industries, types of transactions and disputes that AALCO is best positioned to assist in to help preempt, prevent and resolve disputes”.
Now, they are exploring innovative ways to capacity-build for the profession by helping practitioners overcome the “get your first appointment” hurdle.
For experienced arbitrators, there is no maximum amount regarding the determinable fees. Rather they are subject to a list of objective circumstances, which illustrates the flexibility and reasonableness of the charging mechanism adopted by the new regional arbitration centre.
Busy but Balanced
Now that the regional arbitration centre has commenced operations, Chan has a plan to balance his busy schedule as Director of the centre with his public service duties as member of the congress, teaching roles at law schools, council member duties at CUHK and the Legal Aid Services Council, and full-time role as Partner and Asia Pacific practice group coordinator at Squire Patton Boggs, an international law firm with 45 offices in 20 countries.
“There is always time, you just need to make time and prioritize accordingly. In my case, I choose to get up at 5 a.m. on most days. I am lucky to have a very understanding and supportive family and colleagues, and many very inspiring, knowledgeable and indulging friends at work and at play that shape me and help me maintain a work-life balance,” says Chan.
Chan counts his computer science background, his learning grounds at the Law Society and HKUST while serving as Council Member, as past Chairman of eBRAM International Online Dispute Resolution Centre and his legal knowledge and passion to serve the public good as key to his community service endeavors.
“I am very lucky to have had the opportunity to study and gain legal and computer science knowledge from leading minds, and gain the ability to discern right from wrong, then be given the chance to apply that knowledge for the betterment of the society,” says Chan.
“As they say, ‘We do not inherit the Earth from our ancestors, we borrow it from our children,’” he adds. “We should make positive change, improve access to justice and rule of law, and make this world a better place than when we found it, try to live each day as our last, with no regrets.”