Singapore Better Than Hong Kong For Solving Corporate Legal Disputes

HONG KONG – Singapore has emerged as a strong contender to Hong Kong as a leading place to tackle legal disputes as judicial independence in the latter is being impacted by the new security law, reported The Print on Thursday morning (16 June, SGT).

In 2021, a research by the law firm White & Case and Queen Mary University of London ranked Singapore as the top place to solve legal disputes.

Aside from that, attorneys shared that more of their customers are talking about which of the two rival commercial hubs to use as the jurisdiction for contracts and transactions.

“It’s dawning on people in the last few years that Hong Kong has become a very litigant, unfriendly jurisdiction,” said Kevin Yam, a retired Hong Kong lawyer currently residing in Australia.

“It’s not just to do with the court,” he added, noting that it’s now hard to find senior counsel who are versed in both the Chinese and English language for attending hearings.

The Hong Kong Judiciary insists that the city’s rule of law and judicial independence is guaranteed under the Basic Law and “is wholly unaffected” by the national security law, “occasional attacks on judges regarding judicial decisions related to controversial cases, and the departure of individual non-permanent judges from other common law jurisdictions.”

However, legal scholar Alvin Cheung explained that the national security law impacts many things, including corporate matters.

“There’s no end to things that can be brought under the rubric of national security,” he told Nikkei Asia.

The mainland’s umbrella of “national security” is wide, covering everything from subversion and terrorism to “economic security, cultural security, societal security, science and technology security, cybersecurity, environmental security, resource security, nuclear security and the security of overseas interests,” according to a report by the US-based think tank CSIS.

Even Zheng Yanxiong, Director of the National Security Office in Hong Kong, stated in June 2021 that judiciary decisions should reflect China’s interests. That’s against the concept of judicial independence.

Hence, Cheung advised lawyers whose line of work involves transacting with government-owned or -linked companies not to be in Hong Kong.

“I would suggest that the presumption should be in favour of Singapore, unless you have really, really compelling reasons to be in Hong Kong in particular. And in that case, you should perform risk management accordingly. Which is to say, any risk assessments conducted prior to 2020 are absolutely irrelevant,” added Cheung, reiterating what many other attorneys told Nikkei Asia.