Asia Disputes And Regulatory Enforcement Priorities In The Year Ahead – 2020

Legal News & Analysis - Asia Pacific - Dispute Resolution

25 March, 2020


This briefing brings together trends and themes expected in the region in 2020, with a high-level overview of each topic and links to further analysis and information where applicable. If you would like to discuss any of the topics identified, please get in touch with your usual Linklaters contact, or any of the contacts provided below.


Mainland China


  • International Commercial Courts: China continues to invest in the promotion of its International Commercial Courts (CICC) in Shenzhen and Xi’an, which are positioned to handle most of the disputes arising out of projects under the Belt and Road Initiative. The CICC conducted a number of open court hearings and published their first ruling in 2019, which dealt with severability of arbitration agreements. Increased activity and transparency over the conduct of cases before the CICC is expected, particularly with the rise in Belt and Road Initiative disputes.
  • International arbitral institutions in the Shanghai FTZ: Arbitration will continue to grow as a dispute resolution mechanism in mainland China: in addition to the cross border arrangements in respect of interim relief (discussed further under the Hong Kong SAR update), eligible international arbitral institutions from countries and territories outside mainland China are as of 1 January 2020 entitled to apply to establish offices in Lingang in the Shanghai Free Trade Zone to administer foreign-related arbitration proceedings in the international commercial, maritime and investment sectors. For further details, click here.
  • US DOJ China Initiative: The US Department of Justice (DOJ) has continued to focus its prosecutorial resources on its “China Initiative” announced in November 2018, which is led by DOJ’s National Security Division. US Attorney General Barr’s recent speech highlighted DOJ’s emphasis on industrial espionage and technology and intellectual property theft as part of the initiative, which was followed by the indictment on 10 February 2020 of four members of the Chinese military for the 2017 hacking of Equifax, a US headquartered credit reporting agency. The DOJ has brought a number of indictments and prosecutions under the China Initiative, most notably the January 2018 indictment of Huawei and its CFO for among other things, obstruction of justice, money laundering, and violations of US economic sanctions.


Hong Kong SAR


  • Cross-border interim relief in aid of arbitrations: There will be ongoing interest and discussion around the use of the cross-border arrangement regarding interim relief1 (which came into effect on 1 October 2019 – see our previously published briefing) in aid of Hong Kong-seated arbitrations. The Supreme People’s Court of the PRC, HKIAC and ICC have all published guidance on the details required for and logistics surrounding an application. Notwithstanding this, the novel nature of the arrangement gives rise to unique practical issues that need to be considered in each application, including the choice between the court in the place of domicile and that in the location of the asset(s); payment of security to the PRC court as a pre-condition of the granting of relief; and the risk of the respondent procuring sham claims to undermine the utility of interim relief.

  • Increased coordination between courts: We also expect increased coordination between the PRC and Hong Kong courts, with recent insolvency matters demonstrating the potential for and benefits arising from closer collaboration.
    In January 2020, the Hong Kong courts for the first time recognised and granted assistance to PRC court-appointed administrators in Joint and Several Liquidators of CEFC Shanghai International Group Ltd [2020] HKCFI 167 (our summary and analysis of the case is available here) and further sanctioned a scheme involving cancellation of PRC law governed debts, in the first ever application of its kind. In granting the assistance in CEFC, the Hong Kong courts noted the importance of a unitary approach to transnational insolvencies, fuelling anticipation, particularly among Hong Kong insolvency officeholders, of cross-border recognition of Hong Kong insolvencies by the PRC courts.

  • Conflicts of interest: In regulatory enforcement, one topic of focus for the Securities and Futures Commission (SFC)
    is likely to remain conflicts of interest. Conflicts can manifest in many ways, and is a key underlying concern that permeates several more specific issues, including client facilitation, post trade spread increases and fee disclosure, and best execution. Conflicts of interest also tie closely with another area of enforcement focus: senior management oversight and individual accountability, as the identification and management of conflicts tends to be a structural issue, rather than a question of individual misconduct.

  • Individual responsibility and IPOs: There will be ongoing scrutiny of senior individuals’ responsibility for misconduct by the SFC, looking at both directors and individuals identified through the Manager-in-Charge regime. As reinforced in the SFC’s most recent regulatory bulletin of February 2020, The SFC is increasingly ready to seek disqualification orders through the courts alongside their regulatory disciplinary powers, including to impose individual fines. The SFC’s focus on individual accountability was also demonstrated in the enforcement actions taken against sponsor principals of initial public offerings (IPO) in 2019. Improving the standard of market due diligence practices and the IPO process is likely to remain a priority for the SFC in 2020.

  • AML: The SFC and Hong Kong Monetary Authority will continue their focus on anti-money laundering (AML), building on the positive findings by the Financial Action Task Force in its mutual evaluation of Hong Kong published in September 2019.





  • Regulatory focus: AML and individual accountability of senior managers are likely to be strong focus points for the Monetary Authority of Singapore (MAS), as well as looking at misconduct reporting practices and the prevention of “rolling bad apples”. Similar to Hong Kong, the MAS is also considering matters around conflicts of interest, in particular cases of the overcharging of clients.
  • Promotion of arbitral institutions in Singapore: There is continued promotion and growth of caseloads at arbitral institutions in Singapore, especially ICC and SIAC for the region, as well as focus on building the reputation of its International Commercial Court (SICC). The SICC now hears all international arbitration-related applications and has handled some more complicated decisions (relating to bitcoin and derivatives) in the international finance space. We anticipate more “registry-initiated” transfers of international cases from the High Court to the SICC to build this credential base.




  • AML: AML / CTF continues to be a focus for Japan’s Financial Services Authority (JFSA). The Financial Action Task Force will release in June 2020 the outcomes of evaluations conducted in Japan in October and November 2019. The importance of robust and comprehensive risk assessments and ongoing customer management have been highlighted as key areas.
  • Digital market regulation: Following amendments to the Japan Fair Trade Commission (JFTC) Merger Guidelines and Policies to account for developments in the digital economy, the JFTC remains focussed on digital market regulation with a view to monitoring the practices adopted by large tech companies operating in Japan. We anticipate continued enforcement focus in this space throughout the year.
  • Arbitration and mediation: There may be some increase in caseload at the JCAA. New mediation rules have been released and will apply to cases filed with the JCAA on or after 1 February. The amendments have been made with a view to making mediation administrated by the JCAA more attractive; it remains to be seen whether or not this is the case. 



For further information, please contact:


Melvin Sng, Partner, Head of Dispute Resolution, Asia, Linklaters

[email protected]


1 Referred to formally as the Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administrative Region.