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.
- 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
- 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
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.