Asia Pacific Dispute Resolution Guide - V

Asia Pacific Dispute Resolution Guide2019

Asia Pacific Dispute Resolution Guide 2019

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Table of Contents Foreword ........................................................................................... vii

Australia ............................................................................................... 1 Legal System ............................................................................................................................... 2 Courts ............................................................................................................................................. 3 Legal Profession ......................................................................................................................... 4 Procedure for Claims ................................................................................................................. 6 Remedies ....................................................................................................................................... 7 Interlocutory Injunctions ......................................................................................................... 7 Freezing Orders ........................................................................................................................... 8 Search Orders .............................................................................................................................. 8 Other Interlocutory Orders ..................................................................................................... 9 Costs ............................................................................................................................................... 9 Payment into Court ................................................................................................................... 9 Security for Costs ..................................................................................................................... 10 Appeals ........................................................................................................................................ 10 Enforcement of Domestic Judgments .............................................................................. 11 Recognition and Enforcement of Foreign Judgments ................................................. 12 Arbitration Law ......................................................................................................................... 14 Role of Courts in Arbitration ................................................................................................. 15 Institutional and Ad Hoc Arbitration ................................................................................. 16 Power to Appeal and/or Set Aside Award ....................................................................... 17 Enforcement of Arbitration Awards .................................................................................. 19 Alternative Dispute Resolution .......................................................................................... 20

Hong Kong ......................................................................................... 23 Legal System ............................................................................................................................. 24 Courts and Tribunals ............................................................................................................... 25 Legal Profession ....................................................................................................................... 30 Procedure for Claims ................................................................................................................ 31 Remedies ..................................................................................................................................... 37 Appeals ........................................................................................................................................ 41 Enforcement of Judgments ................................................................................................. 42 Hong Kong as Leading Arbitration Center ..................................................................... 46

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Arbitration Law ......................................................................................................................... 47 Institutional and Ad Hoc Arbitration ................................................................................ 49 Enforcement of Arbitration Awards ................................................................................... 51 Power to Appeal and/or Set Aside an Award ................................................................. 51 Mediation and other ADR techniques .............................................................................. 52

Indonesia ........................................................................................... 57 Legal System ............................................................................................................................. 58 Courts ........................................................................................................................................... 61 Legal Profession ....................................................................................................................... 63 Procedure for Claims .............................................................................................................. 64 Remedies ..................................................................................................................................... 67 Appeals ........................................................................................................................................ 67 Enforcement of Judgments ................................................................................................. 70 Recognition and Enforcement of Foreign Court Judgments ................................... 70 Arbitration Law ......................................................................................................................... 70 Role of Courts in Arbitration ................................................................................................. 71 Institutional and Ad Hoc Arbitration ................................................................................. 72 Enforcement of Arbitral Awards ......................................................................................... 73 Setting Aside of Arbitral Awards ........................................................................................ 75 Alternative Dispute Resolution (ADR) .............................................................................. 76

Japan .................................................................................................. 79 Legal System ............................................................................................................................ 80 Courts ........................................................................................................................................... 81 The Supreme Court ................................................................................................................. 82 Family Courts ............................................................................................................................. 82 Summary Courts ....................................................................................................................... 83 Legal Profession ....................................................................................................................... 83 Procedure for Claims ............................................................................................................... 85 Remedies ..................................................................................................................................... 87 Enforcement of Judgments ................................................................................................ 90 Recognition and Enforcement of Foreign Judgments ................................................ 91 Arbitration Law ......................................................................................................................... 92 Role of Courts in Arbitration ................................................................................................ 93 Enforcement of Arbitration Awards ................................................................................. 94 Conditions for the Enforcement of an Arbitral Award .............................................. 94

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Power to Appeal and/or Set Aside Award ...................................................................... 95 Mediation .................................................................................................................................. 99

Malaysia ........................................................................................... 101 Legal System ........................................................................................................................... 102 Courts ......................................................................................................................................... 103 Other Tribunals ....................................................................................................................... 107 Jurisdiction ............................................................................................................................... 109 Language and the Courts ..................................................................................................... 110 Recent Developments ........................................................................................................... 110 Legal Profession ....................................................................................................................... 111 Procedure for Claims .............................................................................................................. 112 Withdrawal and Discontinuance ....................................................................................... 118 Interim Remedies - Interlocutory Injunctions ............................................................... 119 Other Interim Remedies ....................................................................................................... 121 Costs ........................................................................................................................................... 122 Security for Costs ................................................................................................................... 123 Enforcement of Judgments and Orders ........................................................................ 125 Malaysian Arbitration Act 2005 and Arbitration (Amendment) Act 2011 ........... 129

People’s Republic of China ............................................................. 133 Legal System ........................................................................................................................... 134 Courts ......................................................................................................................................... 135 Legal Profession ...................................................................................................................... 141 Procedures for Claims ........................................................................................................... 142 Interim Measures .................................................................................................................... 151 Appeals ...................................................................................................................................... 152 Enforcement of Judgments ............................................................................................... 153 Arbitration ................................................................................................................................ 158 Role of the Courts in Arbitration: Interim Measures ................................................. 162 Institutional, Ad Hoc Arbitration and Pre-Arbitration ............................................... 162 Enforcement of Arbitration Awards ................................................................................ 164 Power to Review – Setting Aside and Refusing Enforcement .............................. 166

Philippines ........................................................................................173 Legal System ........................................................................................................................... 174 Courts .......................................................................................................................................... 175

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Legal Profession ..................................................................................................................... 179 Procedure for Claims ............................................................................................................. 180 Remedies ................................................................................................................................... 187 Appeals ...................................................................................................................................... 192 Enforcement of Judgments ............................................................................................... 196 Recognition and Enforcement of Foreign Judgments .............................................. 199 Arbitration Law/Role of Courts in Arbitration ............................................................. 199 Institutional and Ad Hoc Arbitration ............................................................................... 215 Mediation and Conciliation ................................................................................................ 216 Alternative Dispute Resolution for Public-Private Partnerships and Joint Venture Agreements with the Government ................................................................ 222

Singapore ......................................................................................... 227 Legal System .......................................................................................................................... 228 Courts ........................................................................................................................................ 229 Procedure for Claims ............................................................................................................. 237 Interim/Interlocutory Remedies ...................................................................................... 243 Recognition and Enforcement of Foreign Judgments .............................................. 252 Arbitration Law ...................................................................................................................... 256 Role of Courts in Arbitration ............................................................................................. 259 Enforcement of Arbitration Awards ............................................................................... 262

Taiwan .............................................................................................. 273 Legal System ........................................................................................................................... 274 Courts ......................................................................................................................................... 276 Legal Profession ..................................................................................................................... 277 Procedure for Claims ............................................................................................................. 277 Remedies .................................................................................................................................. 282 Appeals ..................................................................................................................................... 285 Administrative Appeal ..........................................................................................................287 Enforcement of Local Judgments ................................................................................... 290 Recognition and Enforcement of Foreign Judgments ............................................. 292 Service of Process through “Judicial Assistance” ....................................................... 293 Arbitration ............................................................................................................................... 294 Recognition and Enforcement of Foreign Arbitral Awards ..................................... 297 Mediation ................................................................................................................................ 300

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Thailand .......................................................................................... 305 Legal System .......................................................................................................................... 306 Courts .........................................................................................................................................307 Procedure for Claims ............................................................................................................. 310 Remedies ................................................................................................................................... 315 Appeals ....................................................................................................................................... 317 Enforcement of Judgments ............................................................................................... 319 Arbitration Law ....................................................................................................................... 319 Role of Courts in Arbitration ............................................................................................. 320 Institutional and Ad Hoc Arbitration ............................................................................... 321 Enforcement of Arbitration Awards ................................................................................ 321 Power to Set-Aside or Challenge the Award or Order ............................................. 322 Appeal of Order of Court to Enforce Award ................................................................ 323 Mediation or Conciliation .................................................................................................... 323

Vietnam ............................................................................................ 327 Legal System .......................................................................................................................... 328 Courts ........................................................................................................................................ 329 Legal Profession ..................................................................................................................... 337 Procedure for Claims .............................................................................................................339 Arbitration Law ...................................................................................................................... 346 Role of Courts in Arbitration .............................................................................................. 347 Institutional and Ad Hoc Arbitration .............................................................................. 348 Enforcement of Arbitration Awards ............................................................................... 350 Mediation ................................................................................................................................. 353

Contributors .................................................................................... 357

Editorial Team ................................................................................. 362

Baker McKenzie Asia Pacific Offices .............................................. 363


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Foreword

Baker McKenzie has provided sophisticated legal advice and services to many of the world’s most dynamic and global organizations for more than 50 years. We are a law firm of more than 4,200 locally qualified, internationally experienced lawyers in 77 offices in 47 countries. We have the knowledge and resources to deliver the broad scope of quality legal services required for a consistently effective response to international and local needs, with confidence and a sensitive awareness of cultural, social and legal practice differences.

Our Dispute Resolution Practice is ranked in more countries than that of any other firm and has been at the forefront in providing innovative mediation and negotiation strategies as well as alternative dispute resolution and dispute avoidance techniques. Our established presence in every major financial and business center in Asia Pacific, including Australia, Hong Kong, China, Taiwan, Singapore, Japan, Indonesia, Malaysia, the Philippines, Thailand and Vietnam, has enabled our lawyers across the region and the globe to collaborate with one another and to seamlessly share knowledge and best practices to help resolve disputes with an international or cross-border perspective.

The 2019 edition of the Asia Pacific Dispute Resolution Guide aims to bring together the expertise of our lawyers in the region and help our clients understand the complexities of the various legal systems, applicable laws, courts and dispute resolution proceedings of the different jurisdictions in the region. For this edition, we have covered the most recent developments and developments which will be forthcoming within the year. We have endeavored to cover the most significant developments, with due consideration of how dynamic Asia Pacific jurisdictions have been in the immediately preceding period. For this edition, we see developments spanning the formations of specialized courts, revisions in rules of procedure insofar as it pertains to matters concerning cyber

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transactions, key developments in legislation covering mediation and arbitration, and a whole lot more.

We also have several online resources available:

AP Arbitration Primer lays out the basic arbitration rules and principles applicable in proceedings in 11 Asia Pacific jurisdictions

Global Privilege Center describes the principles applied to disclosure and attorney-client confidentiality in 34 jurisdictions

Cross-border Enforcement Center outlines key facts about the methods and costs of enforcing judgments and arbitration awards in 26 jurisdictions

For further information on our global offices, please visit our website at www.bakermckenzie.com. A complete list of our Asia Pacific offices and contact information for key dispute resolution partners in each jurisdiction is found at the end of this Guide.

Yoshiaki Muto Head, Asia Pacific Dispute Resolution [email protected]

https://aparbitrationprimer.bakermckenzie.com/

https://globalprivilege.bakermckenzie.com/global-privilege-center

http://crossborderenforcement.bakermckenzie.com/

http://www.bakermckenzie.com/

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Australia

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Legal System

The Australian legal system operates within a federal structure of government. In practical terms this means that Australia is governed at both Commonwealth and state levels. The Federal Parliament is empowered to legislate on specified areas, the residual areas being the responsibility of State Parliaments.

In both the federal and state systems (except Queensland) the Houses of Parliament are bicameral. The Lower House of Parliament has the role of drafting and developing new law; the Upper House is a house of review.

At the head of each parliament is the Queen of England and of Australia, who is represented in Australia by the Governor General at Commonwealth level and by Governors at state level. Despite having sweeping powers the Governor General and state Governors, by tradition, only act on the advice of government ministers. In practice, and although not specifically provided for in the Commonwealth Constitution, the Prime Minister is elected by the party which secures a majority vote at each federal election, and acts as the head of the executive.

As well as having a federal system of government, the doctrine of separation of powers also operates at the Commonwealth and (more loosely) at the state levels. In particular, the Commonwealth Constitution provides for a delineation of the functions of the judicial, legislative and executive branches of government.

The primary sources of law in Australia are statutory laws enacted by the Commonwealth and state parliaments. The common law, as inherited from the English courts and developed in Australia, is also an integral part of Australia’s legal system.


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Courts

The courts are divided between state and Commonwealth jurisdictions.

At the state level, the court system is generally separated into three tiers: a Magistrates’ or Local Court, followed by a County or District Court, with the Supreme Court at the apex. In civil claims the jurisdiction of each of these courts is determined by, among other things, the amount of the claim. For example, in Victoria the Magistrates’ Court can decide disputes up to the value of AUD100,000 (and in some cases there is no upper monetary threshold). The Victorian County Court and New South Wales District Court each have jurisdiction in civil claims from AUD100,000 to AUD750,000 and can deal with matters exceeding this amount with the parties’ consent. The Victorian and NSW Supreme Courts deal with claims over AUD750,000.

State-based tribunals also exist to determine civil disputes such as tenancy disputes and consumer law disputes. Tribunals typically have limited jurisdiction and are less formal in their dispute resolution procedures than courts.

At the Commonwealth level, the Federal Court of Australia primarily deals with matters that fall within the remit of Commonwealth power under the Constitution, notably taxation, trade practices, bankruptcy, copyright, trademarks and patents. The Federal Circuit Court operates as a more accessible alternative to litigation in the Federal Court of Australia and the Family Court of Australia. Judges regularly travel to various regional locations to hear matters, and the jurisdiction of the court includes family law, administrative law, admiralty law, bankruptcy, copyright, human rights, industrial law, migration, privacy and trade practices.

On 16 February 2015, the Federal Court of Australia announced the National Court Framework. The reforms create a national court structure. The new structure organizes work along practice area lines rather than registry lines.

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There will be a central practice note supplemented by practice notes for each area. The court’s managed docket system and e-filing procedures are aiming to further create efficiencies. The National Operations Registrar will conduct allocation and reallocation of matters with senior judges and the Chief Justice, as well as manage the overall workload. On 25 October 2016, 26 new national practice notes were issued by the Court.

Australia’s final appellate court on all questions of law, whether on appeal from the Federal Court or the State Supreme Courts, is the High Court of Australia. The High Court principally handles constitutional law matters and the scope and validity of Commonwealth laws, but also deals with issues of state and common law.

Australian courts employ the doctrine of stare decisis or precedent. Courts placed lower in the court hierarchy are required to follow prior decisions of superior courts when faced with a case based on similar facts.

Legal Profession

In order to complete a law degree, students must undertake a number of compulsory subjects at university. These subjects vary across states, but there is a growing focus on uniformity. The compulsory subjects generally include constitutional law, criminal law and procedure, administrative law, property law, contract law and tort law. In order to become a member of the legal profession and be admitted to practice as a legal practitioner, the Council of Legal Education in Victoria requires law students to also complete quasi-compulsory subjects including equity, trusts, corporations law, civil procedure, evidence and lawyers, ethics and society.

After satisfactory completion of their law degree, graduates are required to complete an approved practical legal training course to obtain a Graduate Diploma in Legal Practice or complete a supervised traineeship at a firm in order to be admitted to practice. In states such as Victoria this is referred to as a “graduate program” or “Supervised Workplace Training”


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during which law graduates are exposed to general practice for 12 months under the guidance of a senior lawyer.

Admission to practice generally occurs in the state where the particular lawyer has undertaken his or her practical training. Following admission there are no further examinations or training requirements to be admitted to practice in other states. An admitted lawyer can also apply for admission to the High Court of Australia.

In some states the profession is separated as between solicitors and barristers, while in other states there is a “fused” profession where professionals may undertake both roles. However, in practice the profession remains divided between members of the bar and practicing solicitors. Generally speaking, barristers have retained the role of court appearance work while solicitors maintain stronger client relationships and assume responsibility for ongoing file management. Admitted solicitors wishing to practice as a barrister need to complete further training including a bar entrance exam and readers’ course, which differs from state to state.

On 1 July 2015, the Legal Profession Uniform Law Application Act 2014 (Vic and NSW) came into force. It applies to all lawyers in Victoria and New South Wales. It seeks to streamline regulatory obligations while maintaining each state’s regulatory functions. All matters relating to the legal profession are now governed by the Uniform Law, including admission, practicing certificates, continuing professional development, costs and disclosure, trust accounting, complaints and professional disciplinary issues. The Uniform Law creates a Legal Services Council and the Office of Commissioner for Uniform Legal Services Regulation, which will help regulate the profession.

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Procedure for Claims

Rules of procedure and evidence exist for the purpose of establishing an orderly process for the conduct of litigation. By engaging the assistance of the courts in resolving a dispute, the parties submit to the procedural requirements set out in the rules of the court, such as timelines for pleadings, discovery or disclosure of documents, interrogatories and production of witness statements and affidavits. Each state and each court in Australia has its own particular rules governing the procedural aspects of litigation. While there may be subtle differences between the various jurisdictions, litigants tend to be subject to similar rules and regulations.

The Civil Dispute Resolution Act 2011 (Cth) requires that parties take “genuine steps” to resolve disputes or explain why no such steps were taken before certain civil proceedings are instituted in federal courts. Similarly, the Civil Procedure Act 2010 (Vic) imposes pre-litigation requirements on parties involved in a civil dispute to take “reasonable steps” to resolve the dispute by agreement, or clarify and narrow the issues in dispute prior to commencing proceedings. Other similar laws exist in other states. Precise steps to be taken seeking to resolve the dispute are not prescribed by legislation. For this reason, parties should be strongly encouraged to explore whether an amicable resolution is possible before resorting to litigation.

Court-ordered pre-trial mediations are also an important part of the court process. These aim to bring together parties in an attempt to resolve their differences and arrive at a mutually agreeable settlement.

There are wide variations in the time taken to bring a dispute to a final hearing, ordinarily a trial. With urgent cases in some jurisdictions, a final hearing weeks or even days after the commencement of proceedings is possible. More commonly in the federal and supreme courts, it often takes a period of a year or more from the filing of pleadings to trial.


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Depending on the size, complexity and urgency of the matter before the court, the time it takes for a judgment to be delivered varies widely. In some instances an ex tempore judgment may be delivered contemporaneously. However, it is more common for judges to reserve their decision and sometimes spend a number of months drafting reasons for judgment, which are published at or after the determination of the matter.

Remedies

Equitable or legal relief may be sought in any action before a court. The ability of courts to order the full range of either equitable or legal remedies depends on the particular rules and legislation governing their jurisdiction.

In the case of the High Court of Australia and the State Supreme Courts, the full range of legal and equitable remedies are available and may be sought by the applicant.

While equitable remedies such as injunctions or specific performance are discretionary, legal remedies, such as a claim for damages arising from a breach of contract or a tortious action will be available as of right following determination of the substantive legal issues.

Interlocutory Injunctions

A plaintiff may seek an interlocutory (interim) injunction to preserve the status quo pending final determination of the rights of the parties in the action. An interlocutory injunction can be mandatory or prohibitive. The grant of an interlocutory injunction is temporary and discretionary.

A party may apply for an injunction before or at trial. In urgent cases (and/or where it can be shown that a forewarned defendant might take steps to negate or frustrate the efficacy of a final court order) the application can be made ex parte (i.e., without notice to the other party).

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The jurisdiction of the courts to grant an injunction is wide. To obtain an interlocutory injunction, the plaintiff must move quickly to bring proceedings as soon as it finds out about the defendant’s activities. The plaintiff must be able to show that there is a prima facie (arguable) case, that it will suffer irreparable injury for which damages will not be an adequate remedy, and that the balance of convenience favors the grant of an injunction.

Freezing Orders

A freezing order can be sought to restrain a defendant from removing assets from the jurisdiction or dissipating them pending trial.

Strong evidence is required before a court will be prepared to make such an order, as its effect on a defendant can be severe. The court will need to be satisfied that there is a good arguable case, that the defendant has assets within Australia and that there is a real risk of their dissipation in the absence of an order being made. The applicant is obliged to make full and frank disclosure of all material facts and is required to give an undertaking as to damages to the defendant and an undertaking to third parties, such as banks, to pay any expenses reasonably incurred as a result of the injunction if later the applicant is unsuccessful at trial. An ancillary order requiring the provision of information about the defendant’s assets may also be made.

Search Orders

A search order may be granted to prevent a defendant from destroying evidence in his or her possession before trial. The search order may require the defendant to permit the plaintiff to enter his or her premises to search for goods or documents belonging to the plaintiff or which are relevant to the plaintiff’s claim (e.g., counterfeit goods) and to remove, inspect or make copies of relevant material. The order may also compel the disclosure of names and addresses of suppliers or customers.


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Other Interlocutory Orders

Other interlocutory orders may be available for the detention or preservation of the subject matter of the action, the sale of perishable property, recovery of personal property claimed in the action but subject to a lien, or the appointment of a receiver of property.

Costs

In Australia it is usual for an unsuccessful litigant to be ordered to pay a portion of the costs of the successful party, i.e., costs “follow the event.” The amount allowed is usually a reasonable amount for costs necessarily and reasonably incurred to bring or defend the case (party/party costs). The successful party rarely obtains full reimbursement for all costs; the proportion is generally about one-half to two-thirds of the actual costs. In some circumstances a court may award “indemnity costs.” This does not extend to all costs but is greater than party/party costs.

In many cases costs are agreed between the parties after negotiation. If not, they are determined by the court “taxing” (assessing) a bill of costs. Fees and expenses due by a client to their lawyer are the subject of a contractual arrangement. Dispute resolution procedures in relation to costs differ between the states.

Payment into Court

A defendant may at any stage in the action pay into court a sum that he or she would be prepared to pay to dispose of the action. If the plaintiff rejects the offer and obtains no more than that amount upon judgment at trial, he or she will be liable for all of their own legal costs and the defendant’s legal costs from the date of the payment into court. The payment into court is not brought to the attention of the court until after its decision is pronounced and the question of the award of costs is considered.

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Security for Costs

Security for costs may be ordered where the plaintiff is impecunious or the plaintiff is a foreign party without assets in Australia. The plaintiff is required to provide security for a proportion of the defendant’s costs that he or she may have to pay if he or she is unsuccessful in the action. Security can be given by a payment into court or by bond. There is ordinarily no order made that a defendant give security, except where a counterclaim is made by a foreign defendant without assets in the jurisdiction or where the defendant is an appellant in an appeal.

Appeals

Following a decision of a judge at first instance, application for an appeal to a higher court may exist either as of right, or after consent for leave to appeal has been granted. There is a general rule that only issues of law may be raised on appeal, with determinations of fact being unreviewable by the higher court. There are three possible outcomes after having a rehearing by way of appeal. The decision of the lower court can either be affirmed, overturned, or altered in some way. Depending upon the facts of the particular case, the matter may be remitted to the court in which the case was first heard to have the matter finally determined in accordance with the law.

The High Court of Australia is the court of final appeal in Australia. In the federal court structure, appeals proceed from a single judge to a full bench of the court, commonly consisting of either three, or in special cases, five judges. In the state system, both Victoria and New South Wales have permanent courts of appeal. However, in the other States a rotating system of Judges appear on a full bench.

In cases where an appeal succeeds on a question of law, courts may have power under statute to grant the respondent indemnification against costs incurred in opposing the appeal. Maximum limits on the amount of costs


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that the respondent can receive are set down in the relevant legislation governing the appeal process in each state.

Enforcement of Domestic Judgments

Domestic judgments may be enforced against parties resident in the same state where the judgment was issued (i.e., intrastate) or against parties resident in another state (i.e., interstate). There are statutory provisions that enable the enforcement of judgments and compel the compliance of an unsuccessful party. The principal methods of enforcement of judgment debts or the carrying out of orders of the court are as follows:

(a) a warrant of seizure and sale (to seize and sell the defendant’s goods to satisfy the judgment debt);

(b) a petition to wind up a company or to declare bankrupt an individual defendant;

(c) examination of the judgment debtor (or where a company, one of its officers) by oral cross-examination as to their assets or means of satisfying the judgment. The judgment debtor can be required to produce relevant books or other documents;

(d) a garnishee order, where debts owed to the judgment debtor (i.e., defendant) are ordered to be paid directly to the judgment creditor (i.e., plaintiff) (e.g., bank accounts, wages, rent and other moneys may be subject to such order);

(e) a charging order, by which a charge in favor of the plaintiff is imposed on an interest in land or on securities owned by the defendant; and

(f) appointment of a receiver over the defendant’s interest.

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Recognition and Enforcement of Foreign Judgments

Australian courts can recognize and enforce a foreign judgment under statute or at common law, subject to a number of conditions and possible defenses.

At both the federal level (Foreign Judgments Act 1991) and, in some states (e.g., Foreign Judgments Act 1962 (Vic)) legislation provides for the direct execution of foreign judgments. If the enforcement legislation applies, it must be used in preference to any common-law action.

Under the enforcement legislation, the foreign judgment will be initially “registered” in the Federal Court of Australia or the appropriate state supreme court. Registration requires proof that the foreign judgment:

(a) is one to which the relevant act applies. Each federal or state legislation lists the countries and courts to which it extends. The lists are based on reciprocal enforcement treaties between Australia and that country. The lists include most of the Commonwealth countries and a few other countries where Australia and that country have agreed to provide reciprocal enforcement of each other’s judgments;

(b) is final and conclusive (an appeal pending is not conclusive, but may be sufficient to justify an adjournment of the registration proceedings);

(c) generally must be for a money sum and not be in respect of taxes, a fine or penalty; and

(d) is enforceable in the foreign country by execution.

The courts may also enforce foreign judgments at common law. This applies to judgments of countries (such as the United States) that are not parties to reciprocal enforcement of judgment arrangements with Australia and thus not listed in the Foreign Judgments Act 1991 (or the applicable


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state legislation). The key conditions for common-law enforcement of judgments in Australia are as follows:

(a) the foreign court must have exercised a jurisdiction that the Australian court will recognize under its own conflicts of law rules;

(b) the foreign judgment must be final and conclusive. This does not mean it cannot be subject to appeal. If an appeal is pending, this may give grounds for an application to stay or adjourn the enforcement proceeding in Australia;

(c) the judgment must be for a fixed debt or a definite sum of money. For example, an order for specific performance contained in a foreign judgment will not be enforced by the Australian courts; and

(d) the parties to the foreign judgment and to the enforcement proceedings must be identical.

Once the Australian court confirms it has jurisdiction, the merits of the case cannot be reopened. However, certain defenses against enforcement may be raised. These defenses include the following:

(a) the foreign judgment was obtained by fraud or by duress;

(b) the foreign court acted contrary to natural justice; and

(c) the foreign judgment is contrary to public policy.

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Arbitration Law

International Arbitration

International arbitration is governed by the International Arbitration Act 1974 (Cth) (IAA). The IAA applies to arbitrations between an Australian party and a foreign party. The IAA:

(a) addresses the enforcement of foreign arbitration agreements and foreign awards, thereby giving force to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention);

(b) adopts the UNCITRAL Model Law on International Commercial Arbitration (Model Law) (with some modifications), providing a framework for international arbitrations held in Australia; and

(c) gives force of law to the International Convention on the Settlement of Investment Disputes 1965 (ICSID Convention) (Chapters II to VII).

Australia also has a number of bilateral investment treaties and free trade agreements providing for the resolution of disputes via international arbitration, including ICSID arbitration.

In Australia, parties are able to choose their own arbitral rules, such as those of the Australian Centre for International Commercial Arbitration (ACICA), the International Chamber of Commerce (ICC), Singapore International Arbitration Centre (SIAC), Hong Kong International Arbitration Centre (HKIAC) or the London Court of International Arbitration (LCIA), to govern their international arbitration.

Domestic Arbitration

Each Australian state and territory has adopted the Commercial Arbitration Act in similar, though not identical, form, that applies to domestic arbitrations, i.e., arbitrations between two Australian parties. Each act is


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based on the Model Law (with some modifications) thereby introducing uniformity into the field of arbitration law.

The Commercial Arbitration Act 2010 (NSW) is based on the Model Law. It deals with the appointment of arbitrators, the conduct of arbitration proceedings, the enforcement of arbitration awards and the powers of the court with respect to arbitration proceedings. The act gives the court certain powers to enable it to supervise and support the arbitration process without unnecessarily intervening. For example, the NSW Act provides that the court must (rather than may) stay court proceedings if there is a valid arbitration agreement. It also limits the parties’ right to appeal. As discussed below, a party may only appeal on a question of law if all parties have agreed that an appeal may be brought and the court grants leave to appeal. The NSW Act also imposes a duty on parties to do all things necessary for the proper and expeditious conduct of the arbitral proceedings.

Role of Courts in Arbitration

Under both the IAA and the State Commercial Arbitration Acts, the courts have certain powers to supervise and support the arbitration process. For example, the courts will enforce arbitration agreements by compelling parties to arbitrate where the parties have agreed to do so and will stay court proceedings to allow the arbitration to take place.

Courts generally have no inherent power to intervene in interlocutory orders made by an arbitrator. However, the courts may assist the arbitration process in one of two ways: first, the courts themselves have the power to make some interlocutory or interim orders in support of arbitration proceedings; and second, the courts have the power under the IAA to enforce interim orders issued by a tribunal in an international arbitration. Australia is one of the few countries that have adopted Articles 17A-17J of the Model Law, which include additional provisions relating to interim measures, including the enforcement of interim measures by the

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Australian courts. The courts may also assist the arbitration process by, for example:

(a) assisting with the taking of evidence, including (with the consent of the Tribunal) issuing a subpoena requiring a person to attend for examination before the Tribunal or to produce to the Tribunal certain documents;

(b) issuing interim measures, such as freezing orders to preserve the goods or property in dispute;

(c) considering challenges to arbitrators; and

(d) enforcing or setting aside arbitral awards.

Under the IAA, the federal and the state courts have concurrent jurisdiction over various issues arising in international arbitrations, including applications for a stay of court proceedings, enforcement of foreign awards and applications under the Model Law for the appointment or termination of an arbitrator. Under the State Commercial Arbitration Acts, the relevant state courts have jurisdiction with respect to the act of that state.

Institutional and Ad Hoc Arbitration

International arbitrations may be conducted under the rules of an institution, such as the ICC, or as an ad hoc arbitration in Australia. Similarly, domestic arbitrations may be administered by an institution or conducted on an ad hoc basis. There are several arbitral institutions in Australia that can assist with international and domestic arbitrations.

The Australian Centre for International Commercial Arbitration (ACICA) has a set of Arbitration Rules that can be used for international or domestic arbitrations. ACICA will administer the arbitration. Updated Rules were adopted on 1 January 2016. The ACICA Rules provide for expedited


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arbitration and the appointment of emergency arbitrators. ACICA also administers a panel of arbitrators.

The Australian Disputes Centre (ADC) (which merged with the Australian International Disputes Centre (AIDC) and the Australian Commercial Disputes Centre (ACDC)) provides independent dispute resolution procedures nationally. It is an independent, not-for-profit organization staffed by qualified members of the business and legal professions who are experts in the resolution of disputes. ADC may draw on a panel of mediators, experts and arbitrators in various areas of specialization (including construction, accounting and franchising). The ADC also offers modern tribunal facilities, conference rooms, state-of-the-art communication, audiovisual and video conferencing facilities, and access to translation and transcription services.

The Resolution Institute was formed following the merger of the Institute of Arbitrators & Mediators of Australia (IAMA) and Lawyers Engaged in Alternative Dispute Resolution (LEADR). The Resolution Institute provides arbitration rules and standard contractual clauses for facilitating arbitration. It has a panel of experienced arbitrators covering many commercial areas and professional disciplines, which include construction and engineering, accounting, industrial, real estate and information technology. Parties often refer domestic arbitrations to the Resolution Institute.

Power to Appeal and/or Set Aside Award

An award issued in an international arbitration cannot be appealed to the courts for an error of fact or law. There are limited grounds on which the award can be challenged and set aside by the courts. These grounds reflect the grounds for challenging enforcement of an award under the New York Convention. The grounds relate to procedural issues and public policy.

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For example, an award may be challenged where the following conditions apply:

(a) a party to the arbitration was under some incapacity;

(b) the arbitration agreement was not valid;

(c) a party was not given proper notice of the arbitration or of the appointment of an arbitrator or was otherwise unable to present its case;

(d) the award deals with an issue that was not referred to arbitration or is beyond the scope of the tribunal’s mandate;

(e) the composition of the tribunal or the arbitral procedure was not in accordance with the agreement of the parties;

(f) the subject matter of the arbitration is not capable of being settled by arbitration (i.e., it is not arbitrable); and

(g) the award is in conflict with public policy of the State where the challenge is sought.

Without limiting the meaning of “public policy,” the IAA provides that for the purposes of enforcement of a foreign award in Australia, the award would be contrary to public policy if:

(a) the making of the award was induced or affected by fraud or corruption; or

(b) a breach of the rules of natural justice occurred in connection with the making of the award.

These “public policy” grounds will also be considered in an application to set aside an award.


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Similarly, an award issued in a domestic arbitration cannot, in general, be appealed to the courts for an error of fact or law but can be challenged on limited procedural grounds or public policy.

However, the state Commercial Arbitration Acts do provide an exception: a party may appeal on a point of law if the parties have agreed to the appeal and leave is granted by the court. The grounds on which leave may be granted are consistent across the states and territories. For example, the grounds on which the court will grant leave under the NSW Act include the following:

(a) the determination of the question will substantially affect the rights of one or more of the parties; and

(b) the question is one that the tribunal was asked to determine; and

(c) on the basis of the findings of fact on the award (i) the decision of the tribunal on the question is obviously wrong, or (ii) the question is one of general public importance and the decision of the tribunal is at least open to serious doubt; and

(d) despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the court to determine the question.

The grounds on which a court may set aside a domestic arbitration award under the State Commercial Arbitration Acts are the same as the grounds for international arbitrations under the IAA.

Enforcement of Arbitration Awards

An award that has been issued in international arbitrations may be enforced by the Australian courts irrespective of whether the award was made in Australia or in another state.

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Australia is a party to the New York Convention. The IAA provides that an award made in a state that is party to the New York Convention may be enforced in the Australian Courts. As there are more than 150 states to the New York Convention, it is likely that the award will be enforceable under these provisions.

The IAA was amended in 2015 to provide that any award made in non-Convention countries may be enforced by the Australian courts.

An enforcement of an award may be challenged on limited procedural grounds or public policy set out in the New York Convention. The grounds for challenge are the same grounds for setting aside an award, as explained above.

Awards issued in domestic arbitrations are enforceable under the state Commercial Arbitration Acts. Each Act contains a provision which allows an award made in any state or territory under an “arbitration agreement” to be enforced in the same manner as a judgment or order of the court to the same effect, by leave of the court. As with international arbitrations, there are limited grounds for challenging enforcement, which are focused on procedural issues and public policy.

Alternative Dispute Resolution

The general trend is for companies to avoid litigation where they can. Court proceedings may be prolonged, expensive, costly and public, making it difficult for commercial confidentiality to be maintained.

Alternative dispute resolution (ADR) refers to the different methods of dispute resolution available apart from traditional court proceedings. The most popular type of ADR is mediation as it is inexpensive, private and can be arranged quickly.

Broadly, mediation involves a skilled independent third party (usually an experienced lawyer) acting as the mediator who assists the parties to


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reach a voluntary settlement. The mediator helps the parties examine the dispute issues, possible outcomes and settlement options. Often the parties will be represented by lawyers who are involved in settlement discussions. The mediator cannot force the parties to settle the dispute or compel them to do anything. If the mediation is successful, the parties usually sign a document formally recording the settlement.

A mediation can be arranged as soon as a commercial dispute arises. Many courts now oblige parties to participate in a mediation before a court hearing can take place.

Mediation-arbitration hybrids (known as med-arb), popular in Asia, are not commonly seen in Australia. Express med-arb powers are however provided for in the state Commercial Arbitration Acts, which permit med-arb in circumstances where provision has been made for it in the relevant arbitration agreement, or where parties consent to med-arb in writing after the arbitration agreement has been made.

Another method of ADR is expert determination (either binding or non-binding). This involves the parties agreeing to be bound by the decision of an independent third party, the expert who must act fairly. Usually the expert accepts written submissions. The expert may only take limited evidence, if any. This is a quick and relatively inexpensive method of ADR, best confined to cases of a technical nature (such as single-issue engineering disputes), which do not involve large amounts of money.

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Baker & McKenzie Sydney

Dispute Resolution Practice

As one of the leading law firms in Australia, Baker & McKenzie participate in many of the country’s most significant disputes. We have a highly experienced and skilled Dispute Resolution team in Australia, comprising more than 50 lawyers, who have worked on some of Australia’s most high-profile litigation in recent years.

Using arbitration, mediation, expert determinations or other forms of alternative dispute resolution, we are adept at achieving successful outcomes. Where litigation is required, our lawyers have the experience to take complex issues to court, quickly and effectively, to fight aggressively and incisively to protect a client’s rights and interests.

Baker & McKenzie have a proven ability to deliver high level, reliable dispute advice. This ability is a critical requirement in assisting clients to achieve their commercial objectives, reduce financial loss, avoid costly and lengthy litigation and minimise damage to its corporate reputation.

Contacts

Alex Wolff Partner, Melbourne +61 3 9617 4286 [email protected]

Andrew Salgo Partner, Sydney +61 2 8922 5268 [email protected]

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Hong Kong

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Legal System

On 30 June 1997, the administration of Hong Kong by the United Kingdom ended and the Hong Kong Special Administrative Region (the HKSAR) was established as an administrative region of the People’s Republic of China (the PRC).

On 19 December 1984, the Governments of the PRC and the UK signed the “Joint Declaration of the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the People’s Republic of China on the Question of Hong Kong” (the Joint Declaration). The Joint Declaration set out the basis on which the PRC was to resume the administration of Hong Kong on 1 July 1997. It also set out the PRC’s basic policies regarding Hong Kong, which are intended to preserve Hong Kong’s existing systems under Chinese rules.

The Joint Declaration provided that the policies of the PRC for Hong Kong set forth in the Joint Declaration would be stipulated in a Basic Law of the HKSAR of the PRC (the Basic Law) to be adopted by the PRC’s National People’s Congress. The Joint Declaration also provided that those policies will remain unchanged for 50 years. The National People’s Congress formally adopted the Basic Law on 4 April 1990.

The Basic Law came into force on 1 July 1997 and replaced the Letters Patent and the Royal Instructions as the constitutional document of Hong Kong. Its main functions are to give validity to all laws enforced in the HKSAR, to give authority to the judiciary and the Government of the HKSAR, and to define the relationship between the Central People’s Government in the PRC and the new Hong Kong Government. Consistent with the Joint Declaration, the Basic Law provides that Hong Kong will enjoy a “high degree of autonomy” and “executive, legislative and independent judicial powers.”


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The Basic Law provides that the courts of the HKSAR shall adjudicate cases in accordance with the laws previously in force in Hong Kong except for any that contravene the Basic Law and subject to any amendments by the Hong Kong legislature. Article 81 of the Basic Law provides that the judicial system previously practiced in Hong Kong shall be maintained except for those changes consequent upon the establishment of the Court of Final Appeal of the HKSAR. Article 87 further provides that “in criminal or civil proceedings in the Hong Kong Special Administrative Region, the principles previously applied in Hong Kong and the rights previously enjoyed by parties to proceedings shall be maintained.”

These constitutional developments have resulted in changes to the structure of the legal system that existed prior to the PRC’s resumption of sovereignty over Hong Kong.

Courts and Tribunals

The Hong Kong courts continue to apply common-law principles, in accordance with the regime established under the Basic Law. The system of courts and tribunals has in essence continued since the transfer of sovereignty, though with some significant changes — the principal development being the establishment of the Court of Final Appeal.

The courts have jurisdiction (that is, the power to hear and determine a dispute) in personam and in rem. This means that the courts will have jurisdiction over a dispute based on the presence in Hong Kong of a person against whom, or a thing (e.g., a ship) against which, the action is directed. Thus, when the defendant can be served with proceedings in Hong Kong, the court will have jurisdiction even if the case otherwise has little connection with Hong Kong.

Where a prospective defendant is not in Hong Kong, the leave of the Court of First Instance is needed to serve the proceedings out of the jurisdiction. The grant of leave is discretionary and will be granted only in specified

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cases under the Rules of the High Court. In essence, the dispute must have a sufficient connection with Hong Kong for the court to grant leave to serve out of the jurisdiction.

The Court of Final Appeal

The Court of Final Appeal is now the highest appellate court serving Hong Kong. Appeals to the Judicial Committee of the Privy Council ceased on 30 June 1997.

The Court of Final Appeal will hear civil appeals from any judgment of the Court of Appeal at the discretion of the Court of Appeal or the Court of Final Appeal if, in the opinion of the Court of Appeal or the Court of Final Appeal, the question involved is of great general or public importance, or otherwise. It will also hear criminal appeals from any final decision of the Court of Appeal or final decision of the Court of First Instance (not being a verdict or finding of a jury) from which no appeal lies to the Court of Appeal. Leave applications in the Court of Final Appeal are heard by an Appeal Committee of the Court, generally comprising three judges.

Typically, when hearing an appeal, the Court of Final Appeal is composed of a bench of five, comprising the chief justice or other presiding judge, three permanent Hong Kong judges and one non-permanent judge from Hong Kong or another common-law jurisdiction.

The court will consider authority from other common-law jurisdictions, such as England and Australia, as persuasive, although they are not binding. The court is developing its own jurisprudence having regard to legislative background and other circumstances affecting Hong Kong.

The Court of Final Appeal is a statutory court. While it appears to have and accept inherent jurisdiction, that jurisdiction is subject to its enabling ordinance, the Hong Kong Court of Final Appeal Ordinance (Cap 484). “Where a matter is regulated by statute, the Court has no inherent


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jurisdiction to modify the statute” (Lo Siu Lan & Anor v. Hong Kong Housing Authority [2004] HKCFA 82 at [7]).

The High Court

This court consists of two divisions — the Court of First Instance (the trial court) and the Court of Appeal.

The Court of First Instance is the principal court exercising civil jurisdiction in Hong Kong. Its work is allocated to particular lists, such as the General List, the Companies List and the Commercial List. The Court of First Instance also tries more serious criminal offenses, where trials are by judge and jury. As the jurisdictional limit of the District Court was recently increased from HKD1 million to HKD3 million for general civil claims (see below), civil claims exceeding HKD3 million1 should be brought in the Court of First Instance.

The Court of Appeal hears both civil and criminal appeals from the Court of First Instance and from the District Court. Appeals, either as of right or by leave (see above) may be made to the Court of Final Appeal. A criminal case, which has been appealed from the Magistrates’ Court to a judge of the Court of First Instance, may also be referred to the Court of Appeal.

Rights of audience are generally restricted in the Court of First Instance. Broadly speaking, solicitors may appear in interlocutory applications and, in limited circumstances, at final hearings. A barrister must be retained to appear at trial or in an appeal. However, this restriction has been relaxed following the enactment of the Legal Practitioners (Amendment) Ordinance 2010 (LPAO). The LPAO came into effect in 2012 and sets out a framework allowing accredited solicitor advocates rights of audience before the High Court and the Court of Final Appeal in civil or criminal proceedings or both.

1 From 3 December 2018.

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The District Court

The District Court has jurisdiction over general civil claims where the amount of the claim does not exceed HKD3 million2. The District Court also has a substantial criminal jurisdiction. The procedure in the District Court is substantially the same as the procedure in the High Court. Rights of audience are somewhat wider in the District Court; solicitors may appear in trials without retaining a barrister. There is no provision for jury trials in civil or criminal matters before the District Court.

Magistrates’ Courts

The Magistrates’ Courts hear criminal matters, either for trial or before transferring indictable offenses to the District Court or Court of First Instance. Trials are by judge and jury.

Tribunals

There are a number of tribunals in Hong Kong established by legislation and exercising specific or specialized jurisdiction. Some tribunals are described below.

The Small Claims Tribunal exercises jurisdiction over civil claims for less than HKD75,0003, though with some exclusions. For example, it does not have jurisdiction in respect of employment matters, defamation or maintenance agreements in matrimonial proceedings. Lawyers have no rights of audience before the Small Claims Tribunal.

The Labor Tribunal has exclusive jurisdiction to hear contractual claims (exceeding a small monetary limit) arising under the Employment Ordinance, although it retains a discretion to transfer matters within its jurisdiction to a court or tribunal of appropriate civil jurisdiction.

2 From 3 December 2018. 3 From 3 December 2018.


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The Lands Tribunal has jurisdiction over miscellaneous claims concerning land, such as landlord and tenant disputes and rating matters. Again, this tribunal has a discretion to transfer matters to the District Court or to the Court of First Instance, depending on the sum in issue in the claim.

The Market Misconduct Tribunal, established in 2003 under the Securities and Futures Ordinance (Cap 571), has jurisdiction to hear disciplinary matters concerning market misconduct, including insider dealing, false trading, price rigging, stock market manipulation and similar misconduct affecting the securities market. Such offenses attract both civil and criminal consequences under the Securities and Futures Ordinance. The Market Misconduct Tribunal, which has a broader remit, has replaced the Insider Dealing Tribunal which only dealt with insider dealing cases. The old tribunal ceased operation from December 2009 upon completion of all cases in hand.

Language and the Courts

Until the mid-1990s only English could be used in the District Court, the High Court and in certain tribunals. In July 1995, that rule was removed to enable the Chinese language to be used in addition to English. The Basic Law provides that English may be used as an official language in the courts in addition to Chinese. The policy of the Hong Kong courts is one of bilingualism and the decision as to whether English or Chinese should be used in a particular hearing or trial lies with the presiding judge. The language currently used most often in the higher courts is English, although the use of Chinese is increasing, particularly in the lower courts and tribunals in matters where the parties are self-represented.

It is now also a requirement that certain court forms be prepared with Chinese translations where the person on whom the form is to be served is likely to be Chinese speaking and may not be proficient in English. High Court documents filed in court or served on any person may be in English or Chinese.

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Consistent with the increasing use of the Chinese language in courts, legislation in Hong Kong is now published in both English and Chinese.

Legal Profession

The Hong Kong legal profession is divided into barristers and solicitors. In academic qualification there is little difference between them, although there are differences in their pre-qualification training.

Barristers are specialist advocates and drafters of pleadings. They are sole practitioners. Barristers are divided into junior counsel and senior counsel appointed from the ranks of junior counsel by the chief justice as head of the judiciary. Junior counsel draft pleadings and act as advocates. For the more complex or significant cases, senior counsel may be engaged. They generally act only as advocates and have junior counsel to assist them.

Solicitors have the primary contact with the client and undertake the research and preparation of witnesses and documentary evidence and the preparation of the action for trial, as well as any negotiations for a settlement.

Barristers, solicitors, expert witnesses and clients work as a team in the conduct of a commercial action of any significance. Barristers and solicitors owe legal and professional duties not only to their clients but also to the court to act fairly and honestly.

Solicitors generally charge for their work at hourly rates. Barristers generally charge according to the complexity or significance of the matter, with reference to notional daily or hourly rates.

Contingency fees are not permitted in Hong Kong. In its July 2007 report on “Conditional Fees,” the Law Reform Commission of Hong Kong recommended that contingency fees should not be adopted in Hong Kong.


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After nine years of wide consultation, the Hong Kong Civil Justice Reforms (CJR) came into effect on 2 April 2009 and introduced significant changes to the procedures of the High Court and the District Court. The basic structure of the litigation process remains unchanged, with the major effect to be seen in the court’s approach to the conduct of the case. There is increased judicial control and a greater emphasis on settlement. The primary objectives of the reforms are to increase cost-effectiveness; ensure expediency, a sense of proportion and fairness; and facilitate settlement and fair distribution of court resources.

Commencement of Proceedings

The plaintiff (the party bringing an action) begins its action by issuing a writ of summons or an originating summons containing details of the parties and a brief statement of its claim. When the action is begun by a writ, a statement of claim may be served with the writ or served later. It is an important document since it sets out the factual basis of the plaintiff’s claim. After the writ or originating summons has been issued, it must be served on the defendant within 12 months. The court may extend the period for service. Where service cannot be effected, the court may order service by other means (“substituted service”).

Notice of Intention to Defend

When the defendant (the party against which proceedings have been brought) has been duly served, it must give Notice of Intention to Defend within 14 days of service. If this notice is not filed, judgment may be entered by the plaintiff in default.

A defendant who wishes to dispute the jurisdiction of the court still gives Notice of Intention to Defend and, within the prescribed time for serving its defense, may apply to the court for an order to set aside the proceedings or for other appropriate relief.

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Summary Judgment

An application for summary judgment may be made in the clearest cases on the basis that the defendant does not have an arguable defense. Evidence is given by affidavit or affirmation only — no oral evidence is heard on applications of this type. If the application succeeds, final judgment is given in favor of the plaintiff. If it fails, the defendant may be allowed to defend with or without conditions imposed (e.g., that it pays all or part of the claim into court). A straightforward application is usually heard within about six to eight weeks of filing it with court.

Applications may also be made to have a question of law or the construction of a document determined on a summary basis if the court considers such a question to be suitable without a full trial and if this would finally determine the action or a claim or issue in the action.

Pleadings

In the absence of summary judgment, the defendant is required to serve its defense (a statement answering the plaintiff’s claim) together with any counterclaim it may have against the plaintiff. The plaintiff may serve a reply to the defense and must serve a defense to any counterclaim. Following the CJR, a defendant can no longer rely on bare denials in response to the plaintiff’s allegations. The defendant must state reasons for denying any allegation and, if it intends to put forward a different version of events, to set out expressly its own version.

The Statement of Claim, Defense and Counterclaim are often referred to as “pleadings.” The system of pleadings amounts to a formal exchange of allegations and answers aimed at defining the issues between the parties. Every pleading must contain the material facts on which the party relies, but not the evidence by which those facts are to be proved.

The rules under the CJR seek to encourage properly drafted pleadings and discourage speculative pleadings and those unsupported by evidence. The


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abolition of bare denials is consistent with this objective. Further, while the court retains the power to require necessary amendments to pleadings, it will be more difficult to amend pleadings unless it is necessary for the fair disposal of the case or to save costs.

In addition, pleadings, along with witness statements and expert reports, are required to be verified by a statement of truth. A statement of truth is a declaration of belief to the effect that the party believes that the facts stated in the pleadings are true. This must be signed by the party putting forward the verified document or by the legal representative of that party. The failure to file a statement of truth may result in a pleading being struck out or evidence inadmissible.

Discovery of Documents

It is the legal duty of each party and its solicitor to make full disclosure of those documents which are or have been in its possession or control which are relevant to the issues in the action. This process is called discovery and normally takes place after completion of exchange of pleadings, although pre-action discovery is possible in certain circumstances.

The courts’ powers of ordering pre-action discovery have been enlarged as a result of the CJR, to allow pre-action discovery against prospective defendants in all types of cases which were previously limited only to personal injury and death claims. The applicant will need to show that he and the respondent are likely to be parties to anticipated proceedings and that the documents sought are likely to be in the possession, custody or power of the person from whom they are sought, are directly relevant to an issue arising out of the claim in question, and are necessary either for disposing fairly of the cause or matter or for saving costs.

Similarly, the ability to seek discovery against third parties has been extended to all types of cases where the third party is likely to have or have had in his possession, custody or power any documents which are

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relevant to an issue arising out of the claim. Unlike pre-action discovery, the test for relevance is slightly wider.

Some classes of documents, although they must be disclosed, are nevertheless privileged and exempt from production and inspection. These include communications with legal advisers and documents created for the dominant purpose of obtaining legal advice4. Documents tending to incriminate or expose a party to a penalty under Hong Kong law are also privileged.

Documents containing matters confidential to a party and not otherwise privileged must be disclosed and produced for inspection, but the court may order a controlled method of disclosure to protect confidentiality.

Discovery is an important part of litigation procedure and its extent and expense in commercial actions can be considerable.

Oral discovery of any person before trial, in the form of a deposition, may also be ordered where it appears necessary to the court for the purposes of justice (e.g., where a witness is too old to attend court).

Finally, as part of the court’s case management function, the CJR allows the court the ability to make orders limiting the discovery which the parties would otherwise be required to make under the discovery rules and can direct the manner in which the discovery is to be made.

Admissions

A party may by notice seek written admissions from the other, without leave of the court.

In straightforward debt matters (i.e., where the only remedy that a plaintiff is seeking is the payment of money), the defendant may file

4 CITIC Pacific Ltd v. Secretary for Justice & Another [2015 4 HKLRD 20]


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written admissions within the time limit in a prescribed form. This is aimed at facilitating settlement and to save time and costs.

When a defendant makes an admission of liability in a debt action, he may request time to pay, and the time and rate of payment may be determined by a court officer or a judge.

Interrogatories

Interrogatories are written questions, answered on oath or affirmation, which seek to clarify questions relating to matters in issue between the parties, or to obtain admissions. Principles relating to discovery (such as claiming legal professional privilege) also apply to interrogatories.

There are two forms of interrogatories: ordered interrogatories and interrogatories without order. The latter may only be served on a party twice, and thereafter, an order is required.

The sanctions for failure to answer interrogatories, or to provide adequate answers, include dismissal of the action or the striking out of the defense and entry of judgment.

Exchange of Witness Statements

The rules and practice directions of the High Court require (in most cases) the advance disclosure of each party’s evidence in chief (i.e., the substance of what a witness proposes to say at trial). Such statements will normally be ordered to stand as the witnesses’ evidence at trial. The witness may be cross-examined on that evidence by the opposing party.

In this way, the material facts alleged in the pleadings, as well as the evidence on which each party proposes to rely on to prove those allegations or establish its defense, are disclosed prior to trial.

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Withdrawal and Discontinuance

An action can in most circumstances be withdrawn or discontinued unilaterally by the plaintiff, but the plaintiff may be ordered to pay the defendant’s legal costs (see below). Withdrawal or discontinuance is not a bar to a subsequent action on the same cause of action.

Sanctioned Offers and Payments (Payments into Court)

Sanctioned offers and payments are rules following the CJR that build on and replace the previous regime of “payments into court” for the formal settlement of disputes. A defendant facing a monetary claim may make a “sanctioned payment” of a sum of money into court as an offer to settle. Parties wishing to settle a non-monetary claim (e.g., an injunction) may make a “sanctioned offer” in writing.

If the sanctioned offer/payment is accepted within the time limit of 28 days, then the plaintiff will be entitled to his costs up to the date of acceptance. Acceptance of the payment has the same legal effect as accepting any other offer to settle, i.e., all further proceedings in respect of which the acceptance relates are automatically stayed.

The aim of this procedure is to encourage the parties to take possible settlement seriously and to avoid unproductive prolongation of the litigation. Failure to accept the sanctioned offer/payment may result in a party facing costs penalties if it fails to do better at trial than the other party’s sanctioned offer/payment. However, this consequence only attaches to settlement in the form of sanctioned offers and payments, while the rules do not prevent parties from making an offer to settle through alternative methods.

Security for Costs

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proportion of the defendant’s costs that it may have to pay if it is unsuccessful in the action. Security is normally given by a payment into court but it may be given by bond in some cases. More than one application for security may be made by a defendant during the course of an action. There is no requirement for a foreign defendant to give security unless it goes beyond defending the proceeding and makes a counterclaim arising out of different matters against the plaintiff (i.e., a cross action); or the foreign defendant is the appellant in an appeal.

Trial

The common-law style of oral trial is conducted. If the parties are before the Court of First Instance, a barrister must be retained. The plaintiff’s counsel will “open” the plaintiff’s case by explaining to the judge the allegations made by the plaintiff, the evidence to be called and the legal principles relied upon. This is often done with the assistance of a written submission which is also provided to the judge. Witnesses are then called and are cross-examined, and documents tendered.

Upon the plaintiff’s case closing, the defendant may open and conduct its case (if it chooses to adduce evidence).

Upon all of the parties’ cases being closed, final submissions are made. Judgment is then given by the judge, usually after a period of time (in which judgment is “reserved”). Written reasons are given.

Remedies


A plaintiff may apply to the court for an interlocutory (interim) injunction to restrain the defendant from committing a wrong or to preserve the status quo until the rights of the parties have been finally determined by a trial in the action. The grant of an interlocutory injunction is both temporary and discretionary.

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In urgent cases, the plaintiff may make an application ex parte (i.e., without notice to the other party) and even before, but conditional upon, the issue of the writ.

The jurisdiction is wide and can be exercised wherever it is right or just to do so, having regard to settled principles. The most important of these are that the applicant must show that there is a serious question to be tried (not that it is likely to succeed at trial), that it cannot adequately be compensated by an award of damages alone and that the “balance of convenience” between the parties lies in favor of granting the injunction.

Particular forms of interlocutory injunctions are also available. Thus, where an action or pending action properly brought within the jurisdiction claims a debt or damages against a defendant with assets in Hong Kong, an interlocutory injunction can be obtained ex parte to restrain the defendant from removing assets from the jurisdiction or dissipating them pending trial. This is known as a Mareva injunction, from the title of one of the first cases where such an order was made.

This type of injunction has become widely used, and often has the effect of bringing the parties to settlement terms at an early stage. However, strong evidence is required before a judge will be prepared to make such an order, as its effect on a defendant can be severe if, for example, bank accounts are frozen. The judge will need to be satisfied that the plaintiff has a good arguable case, that the defendant has assets in Hong Kong, that there is a real risk of their dissipation in the absence of an order being made, and that the balance of convenience is in favor of the order being made.

A plaintiff is also obliged to make “full and frank disclosure” of all material facts (including unhelpful facts) and to give an “undertaking as to damages” to the court, which operates in favor of the defendant and third parties, such as banks. The undertaking is to pay any losses or expenses reasonably incurred as a result of the injunction. The effect of the


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undertaking may be particularly onerous if, in due course (or after a trial), the injunction is discharged.

The jurisdiction granting these injunctions is constantly being developed and refined. For example, Mareva injunctions may now be granted to assist in execution of judgments on pursuance of claims extending to assets outside the jurisdiction. Further, the court’s jurisdiction to grant interim injunctions in support of foreign proceedings have been enlarged by the CJR. Interim relief in aid of foreign proceedings can now be sought as an independent, stand-alone form of relief, without being ancillary or incidental to substantive proceedings in Hong Kong. Under the CJR rules, a Hong Kong court will be able to grant interim relief in aid of foreign proceedings provided those proceedings are capable of giving rise to a judgment which may be enforced in Hong Kong.

Where it can be shown that there is a real risk that a defendant will destroy evidence in its possession before trial, a plaintiff may seek an interlocutory order (known as an Anton Piller order) directing the defendant to permit certain persons to enter its premises, to search for certain documents or articles outlined in the order (e.g., counterfeit goods), and to remove, inspect or make copies of those documents or articles. If the defendant fails to comply with the order, it may be held in contempt by the court. The court also has the power to order a defendant (e.g., a retailer) to disclose names and addresses of suppliers of infringing goods. This type of injunction is commonly used in actions concerning infringement of intellectual property rights and abuse of confidential information.

The court must be satisfied before granting an Anton Piller order that the plaintiff has a strong prima facie case of a civil cause of action. The damage sought to be avoided by the plaintiff must be serious and there must be a real risk that the defendant will destroy relevant evidence that is in its possession. The likely harm of the order on the defendant must not be excessive or out of proportion to the legitimate object of the order.

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Even if all these conditions are met, the court will still have to weigh the balance of the plaintiff’s need for the order against the injustice to the defendant, given that the order is made ex parte, without an opportunity for the defendant to be heard by the court.

As such an order amounts, in effect, to civil search and seizure, the courts have developed detailed substantive and procedural requirements with which a plaintiff must comply, together with sanctions for failure to do so.

An interlocutory injunction may also be granted, in special cases, to prevent a defendant from leaving the jurisdiction for a limited period. Such an injunction is called a prohibition order.

The purpose of such draconian relief is to require the defendant to remain available and subject to the court’s jurisdiction while the plaintiff pursues enforcement options.

Costs

“Costs” include the fees and expenses a party is obliged to pay his own solicitor, barrister and experts. Court fees are only minimal filing fees. The court has a discretion in ordering reimbursement of costs and the amount of such costs. The unsuccessful party in proceedings is almost invariably ordered to pay the costs of the successful party.

The amount allowed is usually assessed on a “party and party basis,” that is, all costs necessarily and properly incurred for the attainment of justice or for enforcing or defending the rights of the party whose costs are being assessed. The successful party rarely obtains full reimbursement for all his costs — the proportion is generally about two-thirds of the actual costs paid.

In many cases the costs payable by the unsuccessful party are agreed after negotiation. If they are not, they are determined by the procedure of


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“taxing” (i.e., assessing) a detailed bill of costs before one of the taxing masters of the court.

The regime under the CJR imposes tougher cost sanctions. We described the costs implications that follow from sanctioned payments and offers above. The court is able to order summary assessments of interlocutory applications so that a party subject to a costs order may be required to make immediate payment rather than wait until the costs are determined at the end of the main proceedings. In addition, the court’s previous power to order payment of wasted costs against solicitors has been extended to “legal representatives” which means that barristers are also subject to this exposure (wasted costs are those costs incurred as a result of improper or unnecessary acts or omissions or any undue delay or misconduct in the proceedings). Finally, the court may also make costs orders against non-parties where it is satisfied that it is in the interests of justice to do so. This sanction will potentially affect third-party funders such as insurers and creditors funding liquidators’ actions.

Appeals

With limited exceptions, an appeal is possible at every stage of litigation. Appeals from the Small Claims Tribunal and the Labor Tribunal are to the Court of First Instance. In most cases, appeals from a master of the Court of First Instance (on interlocutory applications) are to a judge of the Court of First Instance in chambers, although certain decisions of masters will lie to the Court of Appeal (e.g., against an assessment of damages). Appeals from a judge of the Court of First Instance, the District Court or the Lands Tribunal are to the Court of Appeal (comprising of an uneven number of judges of not less than three, although a two-judge court hears certain types of appeals or applications).

Appeals from the Court of Appeal are to the Court of Final Appeal. An appeal to the Court of Final Appeal is only by leave. A grant of leave is made where the case is one of general importance.

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Generally, an appeal is not a re-hearing and fresh evidence is rarely allowed. The appellate court will rarely interfere with a decision based on the exercise of the lower court’s discretion or with a trial judge’s view of the facts based on his perception of the witnesses, unless that exercise of discretion or perception was clearly wrong or involved an error of principle. Witnesses are not heard on appeal. However, an appeal from a master to a judge in chambers of the Court of First Instance is a re-hearing de novo whereby the judge hears all of the evidence afresh and the parties are free to adduce fresh evidence without leave.

Enforcement of Judgments

A judgment takes effect from the time it is pronounced. Interest runs on the amount of the judgment from the date of judgment at the statutory rate applicable from time to time. Pre-judgment interest is calculated as part of the judgment sum.

The principal methods of enforcement of judgment debts or the carrying out of orders of the court are by:

(a) issue of a writ of execution (directing the bailiff, an officer of the court, to seize and sell the defendant’s goods to satisfy the judgment debt); or writ of possession (directing the bailiff to obtain the property ordered to be returned to the plaintiff);

(b) presentation of a petition to wind up a defendant company or to declare bankrupt an individual defendant;

(c) examination of the judgment debtor (or where a company, one of its officers) before a master by oral cross-examination on oath about debts owing to him and what other property or means he has of satisfying the judgment. He can be required to produce relevant books or other documents. He can be fined or committed to prison for failure to comply with any requirements of the examination;


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(d) garnishee proceedings, where debts due to the defendant may be ordered to be paid directly to the plaintiff to satisfy the judgment;

(e) charging order, where a charge in favor of the plaintiff is imposed on an interest in land or securities owned by the defendant;

(f) appointment of a receiver over the defendant’s interest, e.g., where the defendant is a joint tenant of property, or will become entitled to fees not yet earned; and

(g) proceedings for contempt, where a judgment or order requires a person (or where a company, any of its officers) to do an act within a specified time, or not to do an act, is disobeyed. The person disobeying may be fined, or a writ of sequestration may be issued against his property, or he may be committed to prison. Committal is the ultimate punishment for contempt and may be ordered where there has been flagrant or repeated failure to carry out undertakings given to the court or disobedience of a court order.

Execution Against Assets Overseas

Often in international business transactions, the judgment debtor may not have any assets in Hong Kong but the creditor knows or suspects that there may be assets abroad. A Hong Kong judgment can be registered and enforced in any country where an agreement has been reached as to reciprocal enforcement of judgments. Where reciprocal arrangements are not available, it may be necessary to commence fresh proceedings in the relevant foreign country to pursue the Hong Kong judgment and to obtain and enforce a judgment of the courts of that country.

Recognition and Enforcement of Foreign Judgments in Hong Kong

If a foreign judgment for the payment of a sum of money (a “money judgment”) is obtained in a country designated under the Foreign Judgments (Reciprocal Enforcement) Ordinance (the FJREO), then an

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application can be made to the Hong Kong Court to register that foreign judgment. Once leave is given to register, after a period specified by the court, the foreign judgment can be enforced in the same way as a Hong Kong judgment provided the judgment debtor has not succeeded in an application to set aside the registration.

The Court of First Instance judgment of Westpac New Zealand Ltd v Gao Hui and Others, HCZZ27/2009 has confirmed that the FJREO continues to apply to the judgments of designated countries under the provisions of that ordinance. At present, those countries include Australia, Austria, Belgium, Bermuda, Brunei, France, Germany, India, Italy, Israel, Malaysia, the Netherlands, New Zealand, Singapore and Sri Lanka. Where a foreign money judgment cannot be registered under the ordinance, it is only enforceable at common law. The judgment creditor must bring fresh proceedings in Hong Kong on the foreign judgment. The Hong Kong Courts will recognize and enforce in local proceedings a judgment obtained abroad, and without going into the underlying merits of the claim founding the foreign judgment, if certain conditions are satisfied. In short, the court requires that:

(a) the foreign court had jurisdiction over the defendant according to Hong Kong rules (i.e., he was present in the foreign jurisdiction at the relevant time when proceedings were brought, or he consented to the foreign court having jurisdiction either by appearing to contest the claim or by prior relevant agreement);

(b) the foreign judgment was not obtained by fraud;

(c) the foreign judgment was not contrary to Hong Kong rules of public policy or notions of natural justice;

(d) the foreign judgment was for a debt or a definite sum of money; and

(e) the foreign judgment was final and conclusive.


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After commencement of the action by issue and service of a writ, the plaintiff (the foreign judgment creditor) can apply for summary judgment on the ground that the defendant has no defense. If the application fails, the action will proceed toward a trial in the usual way. The Hong Kong Court tends to define narrowly the defenses to an action on a foreign judgment (particularly the defenses based on public policy or natural justice).

Enforcement between Hong Kong and the PRC

In 2006, the PRC and Hong Kong signed the “Arrangement on Reciprocal Enforcement of Judgments in Civil and Commercial Matters,” (2006 Arrangement5)and the Mainland Judgments (Reciprocal Enforcement) Ordinance (Cap 597) (the MJREO) came into effect in Hong Kong on 1 August 2008.

The MJREO provides for the mutual enforcement of final judgments requiring the payment of money in commercial cases. Commercial cases are defined as a dispute arising from civil or commercial contracts where the parties concerned have made an agreement in writing, specifying the Mainland or Hong Kong court that has sole jurisdiction to resolve any dispute arising out of the contract. Therefore the 2006 Arrangement does not cover orders for specific performance, injunctions, matrimonial matters, bankruptcy and insolvency matters, employment or consumer matters.

5 On 18 January 2019, Hong Kong and China signed the "Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters between the Courts of the Mainland and of the Hong Kong SAR" (New Arrangement). The New Arrangement will take effect on a date to be announced and supersedes the 2006 Arrangement. It sets out the scope and criteria for enforcement of both monetary and non-monetary relief. Excluded from its scope are judgments on corporate insolvency, matrimonial disputes, maritime disputes, certain patent infringement disputes and validityof arbitration agreements, among others. Meanwhile, the 2006 Arrangement will continue to apply to relevant agreements made before the commencement of the New Arrangement.

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In order to register a Mainland judgment for enforcement in Hong Kong under the MJREO, the judgment must (i) be from a court designated by the MJREO, i.e., courts at the Intermediate People’s Court Level or above and specified Basic Level People’s Courts; (ii) be certified as final and conclusive and as being enforceable in the Mainland; (iii) order the payment of a sum of money; and (iv) the registration must be applied for within two years from the date the judgment takes effect.

In relation to registering a Hong Kong judgment for enforcement in the Mainland, the judgment creditor has to register both the Hong Kong judgment and a certificate that the judgment can be enforced by execution in Hong Kong. Under the MJREO, the High Court has the power to issue certified copies of judgments of the Court of Final Appeal and of the High Court, and to issue the required certificate. The District Court has mirroring powers in respect of its judgments.

A similar recognition regime has been in effect between the Mainland and Macau since 1 April 2006. However, at present, there are no arrangements between Hong Kong and Macau for the mutual recognition of judgments.

Hong Kong as Leading Arbitration Center

Hong Kong is one of the major international arbitration centers in the world. Its courts are independent, efficient, and arbitration-friendly with a robust attitude toward enforcing arbitration agreements and arbitral awards. Hong Kong also has a number of practical advantages, including cost; infrastructure, convenience; and a large pool of arbitrators, counsel, experts, and other service providers. Hong Kong has been recognized in and outside Asia as being a forum which is able to handle large and complex arbitrations comfortably.


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Arbitration Law

Hong Kong’s arbitration law is set out in the Arbitration Ordinance (Cap. 609) (Arbitration Ordinance) which came into effect on 1 June 2011. The Arbitration Ordinance is widely based on the Model Law on International Commercial Arbitration promulgated by the United Nations Commission on International Trade Law (UNCITRAL). The Arbitration Ordinance provides for a single arbitration regime without distinguishing between domestic and international arbitrations. The Arbitration Ordinance does, however, permit parties to agree in their arbitration agreements to opt-into provisions allowing the challenge of an arbitral award on the ground of serious irregularity, and appeals to the court on a question of law.

The Limitation Ordinance and its application to arbitrations is expressly provided for in the Arbitration Ordinance.

The Arbitration Ordinance is based on the principles of minimum court intervention and maximum party autonomy; accordingly, the court has a limited supervisory role, which it exercises only upon application by a party. Any assistance when the parties fail to come to agreement on the issue of appointment of arbitrators will be dealt with by the Hong Kong International Arbitration Centre (HKIAC).

The court may consider allegations of bias or misconduct by an arbitrator and may remove an arbitrator and appoint a replacement. Further, the court, under the Arbitration Ordinance, also has the power to make orders with regard to whether the arbitrator may recover all or part of its fees and expenses after such a removal.

The Arbitration Ordinance gives the arbitral tribunal the power to grant interim measures, including injunctions (such as Mareva injunctions and Anton Piller orders), and also preliminary orders preventing parties from frustrating any interim measure. The arbitral tribunal may require the party applying for an interim measure to provide security for it, and may hold a

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party liable for the costs and damages of any measure or order that the arbitral tribunal later determines should not have been granted under the circumstances. Any order made by the arbitral tribunal is enforceable in the same manner as a similar order made by the court, if the leave of the court is obtained; however, if the order is made outside Hong Kong, leave to enforce will not be granted unless the party seeking enforcement can show that the order or direction is of a type that may be made in Hong Kong by an arbitral tribunal. Refusal to grant leave cannot be appealed.

The court continues to have powers to make evidentiary orders and grant interim measures upon the application of a party for arbitrations commenced both in and outside Hong Kong, whether or not the arbitral tribunal has exercised similar powers; however, the court may decline to do so if the measure applied for is the subject of arbitral proceedings, or if the court is of the opinion that the measure is more appropriately dealt with by the arbitral tribunal.

The following powers may be exercised by the arbitral tribunal under the Arbitration Ordinance:

(a) extend time for commencing arbitral proceedings;

(b) make orders in connection with security for cost orders;

(c) order interim measures and preliminary orders;

(d) direct discovery of documents and the delivery of interrogatories;

(e) administer oaths and take affirmations, examine witnesses on oath or affirmation and direct the attendance of witnesses before the tribunal; and

(f) dismiss claims and counterclaims for want of prosecution.

If an action is brought in court in a matter that is subject to an arbitration agreement, the court will refer the parties to arbitration (if a party so


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requests not later than the submission of his first statement on the substance of the dispute) unless the court finds that the arbitration agreement is null and void, inoperative, or incapable of being performed.


HKIAC

The HKIAC was established in 1985. Since then, it has evolved into one of the world’s leading arbitral institutions. The Arbitration Ordinance provides that the HKIAC has statutory power to appoint arbitrators or umpires in some circumstances.

The HKIAC is managed by a full-time secretary general. It provides modern hearing facilities and support services for arbitrations, such as simultaneous interpretation and transcription, fund holding, and tribunal secretary services. It maintains a panel of arbitrators, including, panels of emergency arbitrators, arbitrators for financial services disputes, from a number of different jurisdictions.

The HKIAC handles disputes across all kind of industries. Its caseload is predominantly international in nature with a strong increase in parties from mainland China. The HKIAC has signed cooperation agreements with several counterparts, including the China International Economic and Trade Arbitration Commission (CIETAC), the Permanent Court of Arbitration (PCA) in The Hague, and the Russian Arbitration Association (RAA).

International Chamber of Commerce (ICC) Arbitration

The ICC has an office in Hong Kong with a case management team for Asian seated arbitrations under the rules of the ICC. Frequently companies from different countries contracting in Asia will provide in their agreement for disputes to be submitted to ICC arbitration in Hong Kong under Hong Kong law or another law, even though neither of the parties may be from Hong Kong, and the performance of the contract has nothing to do with

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Hong Kong. Multinational corporations often prefer ICC arbitration because it is internationally recognized and respected, and the rules of the ICC have been designed to be used globally.

CIETAC Hong Kong Arbitration Center

CIETAC Hong Kong Arbitration Center (CIETAC Hong Kong) is the first arbitration center established by CIETAC outside mainland China. It has been administering cases in Hong Kong since 2015. CIETAC’s arbitration rules include specific provisions for arbitrations in Hong Kong. For example, they make clear that tribunals in Hong Kong may grant interim relief, including emergency relief. Arbitrations administered by CIETAC Hong Kong are, in particular, suitable for parties that prefer the rules of CIETAC but wish to enjoy the benefits Hong Kong has to offer as a place of arbitration.

Ad Hoc Arbitration

Apart from arbitrations being conducted under the auspices of HKIAC and other arbitral institutions, Hong Kong is also selected as the place of arbitration for many ad hoc arbitrations.

International Centre for Settlement of Investment Disputes (ICSID) and Bilateral Investment Treaties

Hong Kong is, through the PRC, party to the Convention on the Settlement of Investment Disputes between States and Nationals of other States (the Washington Convention). The Hong Kong SAR is also party to 18 bilateral investment treaties. These are with Australia, Austria, the Belgo-Luxembourg Economic Union, Canada, Denmark, Finland, France, Germany, Italy, Japan, Republic of Korea, Kuwait, the Netherlands, New Zealand, Sweden, Switzerland, Thailand and the United Kingdom. These agreements provide for the settlement of investment disputes by arbitration.


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A Hong Kong arbitral award may, on application to the court, be enforced as if it were a judgment of the court. If the respondent has assets in Hong Kong, a variety of means of enforcement is available. The jurisdiction of the court is not limited by the absence or otherwise of the respondent in Hong Kong.

Hong Kong (as part of the PRC) is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the New York Convention), which provides for mutual recognition and enforcement of arbitral awards in countries which are parties to the New York Convention. Pursuant to the New York Convention, arbitral awards of more than 155 foreign countries that are signatories are summarily enforceable in Hong Kong with the leave of the court in accordance with the provisions of Part 10 of the Arbitration Ordinance. Arbitral awards of foreign countries that are not party to the New York Convention are also summarily enforceable with leave of the court.

The Arbitration Ordinance also makes specific provision for the summary enforcement in Hong Kong of arbitral awards made by “recognized arbitral authorities” of the PRC (not including Hong Kong) in accordance with provisions of Part 10 of the Arbitration Ordinance. Likewise, arbitral awards made in Hong Kong pursuant to the Arbitration Ordinance are enforceable in other parts of the PRC pursuant to the “Arrangement of the Supreme People’s Court for the Mutual Enforcement of Arbitral Awards in the Mainland and the HKSAR.” A similar arrangement is in place between Hong Kong and Macau.

Power to Appeal and/or Set Aside an Award

An arbitral award is final and binding on the parties and can only be set aside in very limited circumstances. The grounds upon which an award

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may be set aside or varied (aside from in circumstances where the arbitrator has misconducted himself in the proceedings) include where

(a) proper notice of the arbitration proceedings or the appointment of the arbitrator was not given;

(b) the award deals with matters outside of the scope of the submission;

(c) the arbitration agreement is invalid under Hong Kong law;

(d) the subject matter of the dispute is not capable of settlement by arbitration under the laws of Hong Kong; and

(e) the award is in conflict with the public policy of Hong Kong.

Mediation and other ADR techniques

Mediation has become a very active and quite successful dispute resolution technique in Hong Kong, particularly since the CJR came into effect.

The rules now require the courts to encourage parties to use alternative dispute resolution procedures (particularly mediation) where appropriate, to facilitate its use and to help parties settle their case as part of the courts’ duty of active case management.

Mediation is the process of negotiation between parties facilitated by an independent third party. The mediator seeks to do that by assisting in an objective appraisal of the dispute and each parties’ interests and by eliminating communication barriers. The process, which includes joint and separate meetings between the parties, is very flexible; control remains with the parties. Participation is voluntary and if the parties do not reach an agreement, they may end the process. If the parties agree on a settlement, this will take the form of a binding and enforceable agreement.


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Under the CJR, parties are required to stipulate their willingness to attempt mediation with a view to settling proceedings. The courts can also impose adverse costs orders where there has been an unreasonable refusal to mediate.

There are a number of organizations in Hong Kong which will propose suitable candidates for appointment as mediators if the disputing parties wish to try to settle their differences using this technique but cannot agree upon a mediator. One such organization is the Hong Kong Mediation Council (HKMC), set up by HKIAC in January 1994 to promote the development and use of mediation as a method of resolving disputes.

The Arbitration Ordinance also permits an arbitrator to act as mediator with the parties’ consent. Information obtained by the mediator/arbitrator from one party is kept confidential from the other party unless the mediation fails, in which case all relevant information made available to the mediator/arbitrator must be revealed to both parties. The arbitrator may then continue to a full hearing and make an award on the merits.

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Baker McKenzie Hong Kong


The Hong Kong office of Baker McKenzie was established in 1974. The office has been involved in many high-profile commercial disputes in Hong Kong. It has built its reputation by dealing with large and complex cases, and litigation has become one of the Hong Kong office’s major areas of practice. Clients include local companies, multinational corporations, governmental entities and statutory bodies.

The Hong Kong Dispute Resolution Group is one of the largest dispute resolution practices in Hong Kong. The areas of practice include banking and finance disputes; corporate disputes (including malfeasance, fraud and minority shareholder actions); construction; contract and tort liability; defamation; employment disputes (including wrongful dismissal, restraint of trade and confidentiality); enforcement of foreign judgments and multijurisdictional conflicts; insolvency and creditor remedies; insurance disputes; international arbitration; international trade disputes; sale of goods; professional negligence; judicial review of administrative actions; probate and trust disputes; PRC-related disputes; and securities regulatory enforcement actions.

The Hong Kong office Dispute Resolution Partners are as follows:

Contacts

Cynthia Y.S. Tang Tel: +852 2846 1708 [email protected]

Gary Seib Tel: +852 2846 2112 [email protected]

mailto:[email protected]



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Contacts

Mini vandePol Tel: +852 2846 2562 [email protected]

Kwun Yee Cheung Tel: +852 2846 1683 [email protected]

Anthony K.S. Poon Tel: +852 2846 1919 [email protected]

Susan Kendall Tel: +852 2846 2411 [email protected]

Bryan Ng Tel: +852 2846 2923 [email protected]

Paul Teo Tel: +852 2846 2581 [email protected]








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Indonesia

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Legal System

The Indonesian judicial system comprises the Supreme Court and the Constitutional Court. The 2001 amendments to the Constitution of the Republic of Indonesia grant the Supreme Court and the Constitutional Court powers to organize judiciaries in order to uphold justice and law. The Constitution provides the Constitutional Court with the power, among others, to review the constitutionality of legislation passed by the Indonesian Dewan Perwakilan Rakyat (House of Representatives), determine jurisdiction disputes between key state institutions, decide motions for the dissolution of political parties and resolve disputed election results.

The judiciary is subordinate to or under the oversight of Mahkamah Agung (the Supreme Court) comprises (i) peradilan umum (the general judiciary), which handles general civil and criminal cases; (ii) peradilan agama (the religious judiciary), which relates to sharia-law-related matters; (iii) peradilan militer (the military judiciary); and (iv) peradilan tata usaha negara (the state administrative judiciary).

In Indonesia, most disputes appear before the courts of general judiciary, which comprise pengadilan negeri (the district courts) as courts of first instance, pengadilan tinggi (the high courts) as courts of appeal, and Mahkamah Agung (the Supreme Court) as the court of cassation and civil review.

Although the courts of first instance and courts of appeal vary from one judicial system to another, at the cassation and civil review levels Mahkamah Agung (the Supreme Court) will preside over cases in all judicial systems.

In addition, within the framework of the court of general judiciary, a number of specialized courts have been established at certain district courts to handle specific types of cases. Commercial courts have been


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established at the District Courts of Central Jakarta, Surabaya, Semarang, Medan, and Makassar to handle bankruptcy, suspension of payments and intellectual property rights cases. A human rights court and an anti-corruption court have also been established at the District Court of Central Jakarta. In addition, a tax court within the framework of the general judiciary has been established in the capital city of Jakarta to handle all tax disputes between taxpayers and the government authority in relation to tax collection or (written) decisions on any tax matter issued by the government authority. Industrial relations courts have been established as a special court within the general judiciary to handle certain industrial relations disputes.

The Indonesian legal system still carries the pre-independence burden of legal pluralism. Historically, there were three civil procedural laws applicable in Indonesia:

(a) Het Herziene Indonesische Reglement (HIR), which was applicable to landraden, i.e., courts with jurisdiction over civil cases involving Indonesian natives and/or foreign Orientals of non-Chinese origin located on Java and Madura islands;

(b) Reglement Buitengewesten (RBg), which was applicable to landraden located outside Java and Madura islands; and

(c) Reglement op de Burgerlijke Rechtsvordering (Rv), which was applicable to raden van justitie, i.e., courts having jurisdiction over civil cases involving European and foreign Orientals of Chinese origin on Java and hooggerechtshop, i.e., the highest court in Indonesia at that time.

Please note, however, that the courts mentioned above are no longer in existence.

The HIR (for district courts and high courts located on Java and Madura islands) and RBg (for district courts and high courts located outside Java

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and Madura) are still applicable for the general judiciary, in addition to numerous national laws governing civil proceedings in Indonesia (such as laws concerning the general principles of the judiciary, the appellate court, and the Supreme Court), as well as the Supreme Court’s Circular Letters. Although the Rv (which is more detailed than HIR or RBg) is no longer applicable, it may still be used to provide guidance in situations where the HIR or RBg does not provide sufficient regulation on a certain matter at issue.

However, the Indonesian legislative body is currently preparing a new Civil Procedural Law for civil proceedings in Indonesia. There is no estimate timeframe yet on when it will come into force.

Like other civil law countries, Indonesia does not apply the rule of binding precedent. Past court decisions only serve as guidelines for judges’ consideration to reach a decision when facing similar cases and not in any way regarded as a binding legal source. If there is any contradiction between the law and the jurisprudence, the law will always prevail. In contrast, in common law jurisdiction, a court must follow past court decisions when facing similar cases.

Indonesia acknowledges two types of jurisprudences (both non-binding), i.e., permanent jurisprudence and non-permanent jurisprudence. The only difference being that judges tend to acknowledge and follow a permanent jurisprudence more than a non-permanent jurisprudence. For past court decisions to be considered as a permanent jurisprudence in Indonesia, the following requirements must be met:

• the decision is on a legal matter that the law is unclear about;

• the decision is final and binding;

• the decision has been used repeatedly as a basis for judges to decide on similar cases;


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• the decision has fulfilled the element of justice; and

• the decision has been affirmed by the Supreme Court.

Indonesia also maintains an active online database of past Supreme Court, High Court and District Court decisions. They are now accessible via www.putusan.mahkamahagung.go.id and www.jdih.mahkamahagung.go.id or in the websites of particular courts all over Indonesia.

Pursuant to Supreme Court Regulation No. 3 of 2018, the Indonesian Supreme Court has initiated the Indonesian E -Court System. The E-Court System seeks to process court proceedings electronically, from registering a claim, the payment of advance for the court fees, summoning of the parties and filing of responsive pleadings. There are registration procedures for attorneys who are seeking to use the E-Court System. The system is set to be implemented gradually to the entirety of Indonesia.

Courts

The District Court

The district courts serve as courts of first instance and have jurisdiction to preside over and decide civil and criminal cases. They have jurisdiction over municipalities or regencies, and sit in their respective capitals.

The first instance courts (District Courts) are divided into the following:

• General courts, which conduct hearings for criminal and civil cases. There are a number of separate chambers of the general courts that hear specific claims. For example, the commercial court hears bankruptcy and intellectual property claims. Indonesia has five commercial courts, which are located in five major district courts. There is also the industrial relations court that hears employment disputes and corruption court that hears corruption cases.

http://www.putusan.mahkamahagung.go.id/

http://www.jdih.mahkamahagung.go.id/

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• Religious courts, which are for Muslim citizens to resolve issues such as marriage, inheritance.

• Military courts, which deal with criminal cases involving members of the armed forces.

• Administrative courts, which deal with cases involving state administrative decree matters.

Large commercial disputes are usually brought before the general courts.

The High Court

The high courts serve as courts of appeal and have jurisdiction to preside over and decide civil and criminal cases in the second instance. The high courts have jurisdiction over provinces and sit in their respective capitals.

The Supreme Court and Constitutional Court

The Supreme Court and the Constitutional Court are the highest courts in Indonesia, and are independent from each other. The Supreme Court supervises the District Courts and the High Courts.

The Supreme Court has jurisdiction to preside over and decide, among other things, (i) cassation requests, (ii) disputes over jurisdiction and (iii) civil reviews against a final and binding court judgment.

The Constitutional Court only covers matters related to the constitution of Indonesia, and has the authority to both:

• Conduct judicial review of laws enacted by the Indonesian People’s Representative Assembly.

• Judicially review whether the President and/or Vice President have violated the law.


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• Conduct trial for dispute of regional or general elections (Pemilihan Kepala Daerah or Pemilihan Umum).


In the Indonesian legal system, all proceedings are carried on in the Indonesian language. All evidence and documents must therefore be in Indonesian. Documents in a foreign language must be translated into Indonesian by a sworn, registered translator before they can be submitted to the court.

Legal Profession

Parties to a dispute may be represented by their attorneys (advocates). There is no obligation for the parties to appoint attorneys (advocates) to represent them in the proceedings. All attorneys (advocates) must obtain a license before they are allowed to appear before the courts.

Generally, only licensed Indonesian litigation lawyers can commence legal proceedings in Indonesian courts. To obtain a licence, an applicant must fulfil all the following requirements:

• Be an Indonesian citizen.

• Reside in Indonesia.

• Not be a civil servant or a government official.

• Have an Indonesian Bachelor of Law title (Sarjana Hukum).

• Have passed the advocate exam held by the Organisation of Advocates.

• Have worked as an intern for at least two consecutive years in a law office.

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• Have not been punished for a criminal offence with a prison sentence of five years or more.


Civil proceedings are normally conducted by submission of briefs to the court. A civil proceeding brought before the court can be classified into a gugatan (claim), which relates to the submission of a dispute to the court for its adjudication, and a permohonan (petition), which is a request to the court to make a declaration.

The common grounds for a civil claim are wanprestasi (breach of contract); failure in the performance of a contractual obligation; and perbuatan melawan hukum (unlawful act/tort), which is a failure in the performance of a statutory obligation or unwritten norms of law (such as good morals, custom and reasonableness). The most important types of relief that the court may award in a civil claim fall into three categories: declarative, specific, and compensatory. Declarative relief involves the court defining the rights and duties of the parties in a particular legal context. Specific relief consists generally of an order directing conduct. Compensatory relief calls for a judgment that the defendant pay the plaintiff a certain sum of money.

As a general rule, a civil claim must be submitted to the court where the defendant (or any of the defendants) is domiciled. If the defendant’s domicile or dwelling place is unknown, the claim must be filed with the district court having jurisdiction over the domicile of the plaintiff (or any of the plaintiffs). If by a written deed or agreement, a domicile has been chosen, the plaintiff may file the claim with the district court having jurisdiction over the chosen domicile.


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Upon registration of the civil claim, the District Court will summon the defendant(s) and the plaintiff to appear before the court. The court bailiff will physically deliver the summons to the defendant, unless either the:

• Defendant is domiciled in another country, in which case the summons can be made through an Indonesian embassy in the relevant country or a diplomatic channel.

• Domicile or dwelling place of the defendant is unknown.

If the defendant is domiciled in another country, the summons can be made through Indonesian embassy in the relevant country or diplomatic channel. If the domicile or dwelling place of the defendant is unknown, the claim can be published at the relevant District Court or municipality office or in a newspaper with national circulation. To be deemed valid and proper, the summons should reach the defendant at least three days before the court hearing.

If the defendant or his proxy fails to attend (although he has been properly summoned), the court will issue another summons. If the defendant still fails to appear before the court, a putusan verstek or putusan di luar hadir (default judgment) will be issued, usually upon receiving the third proper summon from the court.

If all the parties appear before the court, the court is obliged to urge the parties to settle the dispute amicably. Mediation proceedings are confidential and anything disclosed in these proceedings cannot be used in subsequent court proceedings. Therefore, the mediator is required to destroy any notes used during the mediation session and cannot be a witness to subsequent court proceedings. Defendants can only submit their defense if the mediation process prior to the court proceeding is not successful.

Should the “mediation/conciliation” effort by the court fail, the court will proceed by requesting the plaintiff to read out his claim. After hearing the

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plaintiff’s claim, the court will adjourn the hearing to allow the defendant to prepare and submit his jawaban (response).

In his response, the defendant may admit or deny the allegations made by the plaintiff. As a general rule, the defendant may also file a counterclaim against the plaintiff.

Having received the defendant’s response, the court will give an opportunity to the plaintiff to file its replik (reply or counterplea) to the defendant’s response at the next hearing. After hearing the plaintiff’s reply, the court will again adjourn the hearing to enable the defendant to prepare and submit his duplik (rejoinder) to the court.

At a further session, the parties may present various documents as evidence to substantiate their arguments. The court will accept copies of documents provided that they conform with the original in specific sessions before the court.

The parties may also call witnesses and experts to support their arguments.

After presenting all documentary evidence and hearing all witnesses and experts, the parties will usually submit their kesimpulan (conclusions) to the court before it delivers its judgment. Even though this is an optional pleading, the tendency is to close the pleadings after the parties submit their respective conclusions.

Upon receiving the conclusion made by each of the parties, the court will then set a hearing date for the judgment (normally two weeks after the last hearing). The whole process at the district court may take six months to one year to complete.


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Remedies

Civil proceedings to obtain a final and binding decision in Indonesia may take years to complete, during which time the defendant may dissipate its assets. The plaintiff may obtain a favorable final and binding judgment, but if insufficient assets of the defendant remain, the judgment may not be enforced effectively.

It is therefore in the best interests of the plaintiff to attach the debtor’s assets, where appropriate. This motion may be submitted together with the claim, or before judgment. No legal remedies (such as injunctions) are available to the plaintiff before the claim is submitted.

Appeals

High Court

An appeal can be lodged against a district court’s decision at the high court. If the parties accept the district court’s judgment or no appeal is lodged within the specified time limit, the district court judgment becomes final, binding and enforceable.

The appellant lodges an appeal by signing akta banding (deed of appeal) at the district court which rendered the decision. The appellant may also submit a memori banding (statement of appeal), which sets out the reasons for the appeal. The respondent to the appeal may file a kontra memori banding (counterstatement).

A high court rarely convenes a court hearing in order to render its decision on an appeal. It will usually review the case based on the written submissions made by the parties. A high court may take six months to one year to reach a decision.

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Supreme Court

The parties may file for cassation at the Supreme Court against the judgment of the high court. If no cassation is lodged, or the parties accept the high court’s decision, the decision of the high court becomes final, binding and enforceable.

The appellant must declare the intention to apply for cassation within 14 days after it receives the high court’s decision. Further, it must submit a memori kasasi (memorandum of cassation), which is a document containing the grounds for cassation, within another 14 days after the application is lodged. The respondent may submit a kontra memori kasasi (countermemorandum of cassation) within 14 days after it receives the memori kasasi (memorandum of cassation).

A restrictive and special legal remedy against a final and binding court decision or the Supreme Court’s decision on cassation is a peninjauan kembali (civil review). Notwithstanding a party’s submission of peninjauan kembali (civil review), the final decision or the Supreme Court’s decision is nevertheless final, binding and enforceable.

Bankruptcy

Bankruptcy proceedings are initiated by submitting a bankruptcy petition to the commercial court. A bankruptcy petition must be filed by a lawyer (having a license to practice) with a commercial court having jurisdiction over the debtor’s legal domicile. The bankruptcy petition can be filed by:

(a) the debtor itself,

(b) any of its creditors;

(c) Bank Indonesia (the central bank) upon the request from Otoritas Jasa Keuangan/OJK (the Indonesian Financial Services Authority) if the debtor is a bank;


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(d) OJK if the debtor is a securities company, a stock exchange, a clearing and guarantee agency, a depository and settlement agency, an insurance company, a reinsurance company or a pension fund; or

(e) the public prosecutor, if the bankruptcy petition involves public interest.

According to Article 1.1 of the Bankruptcy Law, a debtor that has two or more creditors and has failed to pay at least one debt which is already due and payable may be declared bankrupt by a decision of the Commercial Court. In order to comply with this provision, it is imperative for the petitioning creditor to prove to the court that there are one or more other existing creditors of the debtor. The Commercial Court will set a date for a hearing after the petitioner has met the requirements for submitting a petition, and the proceedings can commence.

The possible outcome of these proceedings is that the Commercial Court may decide to declare the debtor bankrupt or to reject the bankruptcy petition. Both of these decisions are subject to kasasi (cassation) to the Supreme Court.

It often happens in practice that, pending the Commercial Court’s decision on a bankruptcy petition, a debtor submits a petition for suspension of payment as a “strategic defensive response” to a creditor’s bankruptcy petition. In that case the Commercial Court is by law obliged first to review the suspension of payment petition and then to grant a provisional suspension of payment of up to 45 days. This provisional suspension of payment can be converted to an extended suspension of payment for up to 270 days, or a bankruptcy declaration, should the creditors’ meeting refuse to grant the extended suspension of payment. The purpose of the suspension of payment is to provide the debtor with time to prepare a settlement plan, and to discuss this with its creditors. A settlement plan which has been approved by a qualified number of creditors’ votes and which has been ratified by the Commercial Court will bind all creditors.

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Generally, only a final and binding court judgment is enforceable. A district court decision cannot be enforced if an appeal against it is lodged at the high court. Similarly, a high court decision cannot be enforced if an appeal against it is lodged at the Supreme Court.

The unsuccessful party is expected to voluntarily satisfy or comply with a final and binding judgment. If it refuses to do so, the successful party may request the district court to enforce the judgment.

The court may issue an order for the losing party to voluntarily satisfy the judgment within a certain number of days (normally eight days). If the party continues to refuse, the district court will on request issue an order to seize its assets and subsequently to auction them in public. Although the court bailiffs generally carry out the enforcement, police assistance may be invoked to require the losing party to release the assets.

Recognition and Enforcement of Foreign Court Judgments

As a general rule, foreign court judgments are not recognized and are not enforceable in Indonesia. Indonesia is not a party to any international convention for recognition and enforcement of foreign court judgments. Accordingly, if a party sought satisfaction of an obligation from the losing party under a foreign court judgment in Indonesia, the case must be filed anew as an entirely fresh case with the relevant district court. Although not directly enforceable as such, the foreign court judgment is not totally worthless. It could serve as prima facie evidence in the new case filed in Indonesia. The Indonesian judge is free to evaluate, on a case-by-case basis, whether and how far the foreign judgment will be accepted.

Arbitration Law

Arbitration in Indonesia is governed by Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution (Arbitration Law). The Arbitration Law


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defines arbitration as a method of settling a civil dispute outside the general court, based on an arbitration agreement made in writing by the disputing parties. The District Courts do not have jurisdiction to hear disputes between parties that are bound by an arbitration agreement.

The Arbitration Law prescribes the arbitration process in Indonesia, such as the:

• Appointment of arbitrator(s) by the parties.

• Confidentiality of the proceedings.

• Final and binding nature of the arbitral award.

Finally, the Arbitration Law did not take the UNCITRAL Model Law on International Commercial Arbitration into account, and therefore Indonesia cannot be qualified as a Model Law Country.


The existence of a valid arbitration agreement precludes the right of the parties to submit the dispute to the district court. Furthermore, the district court before which an action is brought in a matter which is the subject of an arbitration agreement is obliged to reject the action as inadmissible, except for certain matters as stipulated in the Arbitration Law (such as the appointment of an arbitrator in the event the parties fail to reach an agreement on the appointment or where there is no agreement concerning the appointment of the arbitrator). The court’s assistance may also be requested if the arbitrator grants a provisional award or interim relief in arbitration (even though there is no express provision allowing the court’s interference in relation to interim measures in an arbitration proceeding).

The court maintains a supportive role for, among other things, enforcing the arbitral award in the event the losing party does not voluntarily comply with the award. The enforcement procedure for domestic awards

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allows the competent district court to issue an order of enforcement (writ of execution) directly if the losing party does not, after being duly summoned and so requested by the court, satisfy the award. In the context of a foreign arbitral award, the court may issue an exequatur to give the award the standing of res judicata.


The Arbitration Law recognizes two arbitration mechanisms:

(a) Ad hoc arbitration: arbitration which is established by the parties themselves in order to have a dispute decided. The parties to an ad hoc arbitration adopt their own rules of procedure, which may be adapted to fit the dispute between them.

(b) Institutional arbitration: arbitration which is administered (and supervised) by an arbitration institution in accordance with its own procedural rules of arbitration. Unless stipulated otherwise by the parties in the arbitration agreement, the dispute must be resolved in accordance with the procedures and rules of that chosen arbitration institution.

There are several arbitration institutions in Indonesia; of these arbitration institutions, Badan Arbitrase Nasional Indonesia (BANI, known in English as the Indonesian National Board of Arbitration) is the longest-established and handles the largest number of cases. BANI was established by the Indonesian Chamber of Commerce and Industry in 1977, and deals with disputes in the areas of trade, industry and commerce.

On 14 June 2016, Perhimpunan BANI or BANI Association was established in Indonesia. It claims that it is actually a transformation of the existing BANI. The board of the existing BANI has claimed that it does not recognize Perhimpunan BANI and a number of court cases ensued following the establishment of Perhimpunan BANI. Given BANI duality, parties whose


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existing arbitration clause refers to BANI and intend to choose BANI as their dispute resolution forum should take legal advice on the possible consequences if they refer a dispute to BANI.

Smaller bodies exist for the purpose of settling claims in specialized areas such as insurance, capital market and employment. Badan Arbitrase Shariah Indonesia (The Indonesian Shari’ah Arbitration Board), initiated by the Indonesian Council of Ulemas (religious scholars), also handles various disputes, including commercial and financial disputes.

Badan Arbitrase Pasar Modal Indonesia (BAPMI or The Indonesian Capital Markets Arbitration Board) and Badan Arbitrase dan Alternatif Penyelesaian Sengketa Konstruksi Indonesia (BADAPSKI) were established specifically for resolving disputes relating to capital market and construction activities.

Enforcement of Arbitral Awards

Domestic awards

An original or authentic copy of the arbitration award must be delivered and registered by the arbitrator or his attorney with the clerk of the respective District Court within 30 days of the date of the award. The failure to submit the award in a timely manner will mean that the award cannot be enforced.

Before enforcing the award, the chairman of the respective District Court, must check whether the award:

• Complies with the Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution.

• Is not contrary to ethics and public order.

The chairman’s instruction must be written on the issued original and authentic copies of the arbitration award and must be enforced as if it were a final and binding judgment in a civil case.

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Foreign awards

Generally, international arbitral awards are enforceable in Indonesia, unless:

• The award is rendered in a state, which is not bound by a bilateral or multilateral convention or treaty on the recognition and enforcement of foreign arbitral awards under which Indonesia is bound.

• The legal relationship on which the award was based cannot be considered to be commercial under Indonesian law.

• The recognition or enforcement of the award would be contrary to public policy.

The Central Jakarta District Court has jurisdiction to issue exequatur to enforce international arbitral awards, unless the Republic of Indonesia itself is a party to the arbitrated dispute. However, the Indonesian courts must not enforce the arbitral award (including attaching or auctioning the debtor’s assets to satisfy the award) without a request to do so.

The process to enforce foreign arbitral awards involves four main steps:

• Registration of the award by the tribunal or a representative at the Central Jakarta District Court.

• Application for an exequatur at the Central Jakarta District Court to enforce the award as if it were a court judgment (that is, the award will have the same effect as if it was a final and binding judgment issued by a court, and therefore becomes enforceable).

• Application for a writ of execution (if the losing party refuses to voluntarily comply with the award) at the relevant court where the losing party is domiciled.

• Enforcement of the arbitration award, e.g., the sale of the losing party’s assets to recover the amount payable to the winning party.


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Setting Aside of Arbitral Awards

An arbitration award is final and binding on the parties. There is no right of appeal to the court, but parties can apply for the setting aside of the arbitration award if there is suspicion that:

• After the award is issued, a party finds that the letters or documents submitted in the proceedings are false, or they are declared to be false.

• After the award is issued, it is discovered that the other party concealed decisive documents.

• The award is issued as a result of fraud by one of the parties.

The petition must be filed in writing within 30 days of the date of delivery and registration of the arbitration award with the clerk of the respective District Court. The petition must be filed with the chairman of the respective District Court who must make a decision within 30 days of receiving the petition. If the petition is granted, the chairman of the respective District Court must determine the consequences of revocation for the whole or part of the arbitration award.

An application to set aside an award can be filed with the Supreme Court, which must consider and decide on the appeal within 30 days of receiving the request.

These aforementioned provisions are stipulated in Article 70 of Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolutions (Arbitration Law), and the elucidation to this article requires that the grounds for the setting aside of petition must be proven with a court decision. However, this elucidation was revoked by the Constitutional Court through its decision No. 15/PUU-XII/2014 dated 11 November 2014 in the judicial review of the Arbitration Law. The Constitutional Court decided that the elucidation of Article 70 is unconstitutional and hence, revoked. In its

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consideration, the Constitutional Court expressed the view, among other things, that:

• by stating that a court decision is required to prove the grounds for the setting aside of an award, the elucidation to Article 70 of the Arbitration Law causes multiple possible interpretations of that article and as such causes legal uncertainty; and

• with the requirement to obtain a court decision to support the grounds for setting aside an award, the 30-day time limit stipulated in Article 71 of the Arbitration Law to submit the petition for setting aside of an award is impossible to achieve.

Alternative Dispute Resolution (ADR)

The Arbitration Law defines alternative dispute resolution (ADR) as an institution for out-of-court settlement of disputes or differences of opinion through a procedure agreed on by the parties, such as consultation, negotiation, mediation, conciliation or expert evaluation. The most common ADR methods in Indonesia are mediation and conciliation.

There are no valid statistics regarding the use of ADR compared to civil court litigation in Indonesia. However, most of the private disputes have been resolved by negotiation as it much more cost-efficient for the parties. If, for some reason, settlement cannot be reached using negotiation, the parties can request the involvement of a third party in the dispute to hear and find acceptable solutions for the parties.


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Hadiputranto, Hadinoto & Partners


Baker & McKenzie’s correspondent in Jakarta is the law firm Hadiputranto, Hadinoto & Partners, which was established in 1989. The office has been involved in many high-profile commercial disputes in Indonesia. It has built its reputation by dealing with large and complex cases. Clients include local companies, multinational corporations and government entities.

Hadiputranto, Hadinoto & Partners’ Dispute Resolution Practice Group currently consists of two partners and six associates. The areas of practice include settlement of disputes relating to banking and finance; corporate; commercial; anti-monopoly; construction; contract and tort; partnership and joint venture; bankruptcy and creditor remedies; moratorium or suspension of payments; international trade disputes; sale of goods; compliance and professional negligence.

Hadiputranto, Hadinoto & Partners works closely with its correspondent offices of Baker & McKenzie worldwide in the handling of multijurisdictional conflicts.

Hadiputranto, Hadinoto & Partners Dispute Resolution contacts include

Contacts

Timur Sukirno Tel: +62 21 2960 8500 [email protected]



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Japa

n

Japan

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Legal System

Japan is a civil law jurisdiction. The supreme law of Japan is the Japanese Constitution (kempo), which came into force on 3 May 1947. Apart from the constitution, the cornerstones of Japanese legislation are the Civil Code, the Code of Civil Procedure (CCP), the Criminal Code, the Code of Criminal Procedure and the Commercial Code.1,2 In addition to the six major sources of law, there are individual laws that cover limited areas. Ministry circulars and local regulations are also regarded as sources of law. Case law also represents a significant part of Japanese law. In particular, Supreme Court judgments are regarded as one of the main sources of law in Japan.

1 The Commercial Code in this context includes the Companies Act and the relevant enforcement laws. The draft amendments to the section on the law of obligations in the Civil Code, which will include the modernization of the section and also prior case law, was approved by the Cabinet on March 31, 2015, enacted on May 26, 2017, and will come into effect on April 1, 2020. Furthermore, on January 2016, the Legislative Council drafted an outline of an amendments to the sections related to transportation and maritime commerce in the Commercial Code. The ruling party intends to legislate the draft as soon as possible, but the forecast is still uncertain. 2 “The Special Act on Civil Litigation Procedure for Collective Recovery of Property Damages by Consumers” was promulgated on December 11, 2013 and came into effect in October 2016. The Act also establishes a limited version of the class action system, in which remedies are available only for consumers who have directly suffered property damage. In this limited version of the class action system, the Act only permits actions to be taken by certain organizations that have been certified by the government on behalf of consumers. Once the court finds a “common obligation,” (an obligation having the same features and conditions, owed by one obligor to multiple victims in the same matter) consumers are invited to “opt-in” to the procedure, however, the action will be dismissed if the defendant has properly undertaken a product recall.


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Courts

Japan has a three-tiered court system. In ordinary civil and criminal cases the case is first heard by the District Court. The party may appeal against a judgment of the District Court to the appellate court. If the party is not satisfied with the judgment of the appellate court, it may appeal to the Supreme Court if the grounds for an appeal exist. Two levels of appeal are allowed against an original judgment.

District Courts

District Courts are the primary court of first instance. District courts have original jurisdiction over ordinary civil and criminal cases. The District Court also hears appeals against the decisions and judgments of the summary courts (see below) in civil cases. A single judge usually presides over cases brought before the District Court. In some significant cases, a bench of three judges must hear the case.

Large district courts such as those located in Tokyo and Osaka have specialized divisions. For instance, the District Court of Tokyo has divisions specializing in administrative, traffic, intellectual property, bankruptcy and labor cases.

Appellate Courts (High Courts)

Appellate courts are located in eight major cities: Tokyo, Osaka, Nagoya, Hiroshima, Fukuoka, Sendai, Sapporo and Takamatsu. Each high court has its own territorial jurisdiction and some high courts have branches. There are six branches throughout Japan. In addition, in April 2005, the Intellectual Property High Court was newly established as a special branch of the Tokyo High Court, which exclusively handles cases relating to intellectual property.

High courts, except for the Intellectual Property High Court, have jurisdiction over appeals filed against judgments rendered by district

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courts in the first instance or family courts. In addition, a high court has original jurisdiction over administrative cases on election, insurrection matters and similar matters. The Tokyo High Court also has exclusive original jurisdiction over cases to rescind decisions of quasi-judicial agencies such as the Fair Trade Commission.

The Supreme Court

The Supreme Court is the highest court in Japan. It is located in Tokyo and comprises 15 justices, including the chief justice. The Supreme Court sits either in full bench, or petit bench with three or more justices. Each case is first assigned to the petit bench. However, the case must be transferred to the full bench where (1) an appellant claims that a law, order, regulation or administrative decision is unconstitutional; (2) the Supreme Court considers a law, order, regulation or administrative decision to be contrary to the Constitution; and (3) the Supreme Court decides to deviate from one of its own precedents.

The Supreme Court is responsible for the consistent interpretation and application of law in Japan. As a court of appeal, it reviews mainly appellate court judgments. In exceptional cases, a judgment of the District Court can be appealed directly to the Supreme Court. For example, in civil cases both parties may agree to bypass the appellate court and appeal to the Supreme Court directly from the District Court.

Family Courts

The Family Court is a court specializing in family affairs and juvenile delinquency. Family courts and their branches are located in the same places as district courts. In addition, local offices of the family courts are located at the sites of 77 summary courts.


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Summary Courts

Summary courts have jurisdiction over minor criminal and civil cases. In civil cases, summary courts handle cases involving claims that do not exceed JPY1,400,000. The procedure adopted by the Summary Court is identical to that of the District Court.

Language of the Courts

Court proceedings are conducted in Japanese. Translators are provided for witnesses who do not speak Japanese. All non-Japanese documents submitted to the court must be submitted with a Japanese translation.

Legal Profession

The hoso

Members of the Japanese legal profession are referred to as the hoso. Most Japanese judges are “career judges” who join the court immediately after completing legal training. Public prosecutors are also recruited directly from the Legal Training and Research Institute.

Members of the hoso are required to pass the same national bar examination and must undergo training in the Legal Research and Training Institute. Regardless of their future profession, members of the hoso receive the same training at the institute. However, upon completing training at the Legal Training and Research Institute, individuals may choose to become a judge, public prosecutor or attorney.

Judges

The Cabinet appoints judges of the appellate courts, district courts, family courts and summary courts from a list prepared by the Supreme Court. The Supreme Court assigns judges to specific courts. Appellate court judges are promoted from among district court and family court judges.

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Public Prosecutors

Anyone who has passed the uniform state examination and finishes his or her training at the Legal Training and Research Institute can be appointed as a public prosecutor. Judges and assistant judges, as well as law professors and associate professors, are qualified to become public prosecutors under certain conditions.

Attorneys

The present Law regulating Attorneys was enacted in 1949. Attorneys are registered with local bars that collectively form the Japan Federation of Bar Associations (Nichibenren).

The Japan Federation of Bar Associations has an ethical code modelled on the American Bar Association Canons of Professional Ethics. The Bar is given the power to admit its own members, and bring disciplinary actions against them. Disciplinary action can be taken against members who have violated the rules of the local bar or the Japan Federation of Bar Associations, or have discredited or disrupted the order of the Bar.

Other Professionals

In addition to general practitioners, there are various other legal professionals who perform functions related to legal issues. Tax attorneys, patent attorneys, judicial scriveners as well as in-house legal counsel perform functions which, in some other common-law countries, are normally performed by attorneys.

Foreign Attorneys

Foreign attorneys who are allowed to practice in Japan are called “registered foreign lawyer” (gaikoku-ho jimubengoshi). In order to qualify as a registered foreign lawyer, foreign attorneys must apply to the Ministry of Justice for a license. There are various requirements, including a sound financial basis on which they can conduct business properly and


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reliably; an adequate coverage for professional risks; and good legal or professional standing in the jurisdiction of primary qualification. The scope of practice of registered foreign lawyers is generally limited to the law of their own jurisdiction (the jurisdiction of their primary qualification) and does not extend to Japanese law or the laws of other jurisdictions.



A plaintiff initiates a claim by submitting a written complaint or petition to the district or summary court, depending on the value of the alleged claim. The court fee is paid at the time this document is submitted.

The fee is based on the value of the claim. The court then reviews the claim and sends a copy of the claim to the named defendant, together with a notice to appear in court by a certain date. If the defendant does not appear at the first hearing, the court will not necessarily enter a default judgment, but may do so in the case of minor disputes such as an application for a small claims order.

Discovery Procedures

Japan has introduced some discovery measures. First, there is an interrogatory-like discovery device called Inquiries Between Parties (toujisha shoukai), which entitles a litigating party to furnish the opposing party with questionnaires concerning relevant factual issues. Such interrogatory is also available prior to filing of civil action. Furthermore, the court may, upon a motion of a party, order pre-action dispositions to collect evidence such as a request for submission of a document, a commission to government offices or other bodies for an investigation, etc., after hearing the opinions of the other party. The court may decide when the evidence concerned will be necessary for the proof of the case once is filed and that collection of the evidence by the party making the motion alone will be difficult. Second, a litigating party may seek an order

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of the court for production of documentary evidence held by the opposing or third party, called Document Production Order (bunsho teishutsu meirei). Finally, while Japan does not allow a deposition outside the courtroom, a litigating party may request the judge to summon witnesses from the opposing or third party, in addition to offering its own witnesses, for testimony in the court.

Costs

Upon the conclusion of the proceedings the court costs will be borne by the unsuccessful party. However, lawyer’s fees are not recoverable except in certain limited cases (e.g., traffic accident cases).

Time Frame

Commercial litigation in Japan usually takes six to twelve months to complete in the first instance at the district court level. Cases involving complex issues or many parties may take longer, such as 18 months or more.

Time Limitations

The general rule regarding time limitations is set out in the Civil Code. The Civil Code provides that certain rights will expire if not pursued within 10 years from the date that the right arose. The right becomes void after 10 years have passed from the date that the right first arose. The time period is calculated from the date that the right holder demands performance or from when the provisional disposition is made, or from the date when the party owing the right acknowledges its obligation. A plaintiff must make a claim within this prescribed period. However, special provisions can apply in particular cases.

For example, a claim in tort must be brought within three years of the date that both the damage and the defendant was identified. However, the period cannot exceed 20 years from the date of the incident.


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Remedies

Remedies for Breach of Contract

In the case of breach of contract, the Civil Code provides for three types of remedies where an obligor fails to perform an obligation: (1) right to demand performance; (2) recovery of damages; or (3) rescission of the contract. The primary remedy is performance of the obligation (as well as an injunction to compel the performance of an obligation not to do something). However, recovery of damages is the most common remedy.

Right to Performance under Contract (riko seikyu ken)

In order to have performance of an obligation enforced, an obligee need only prove the fact of non-performance on the due date of performance. Seeking performance does not deprive the obligee of its right to seek damages simultaneously.

Right to Damages (songaibaisho seikyu ken)

The second type of remedy available under Japan’s Civil Code system is the recovery of damages. In the event of an obligor’s non-performance, the obligee may obtain damages either as a substitute for the right of performance (e.g., cases of impossibility of performance) or in conjunction with an order for specific enforcement (e.g., cases of delay in performance). Moreover, the damages remedy is also available when a contract is rescinded due to the obligor’s default. The scope of liability of damages is subject to adequate causation.

Right to Rescission (kaijo ken)

The third type of remedy available to the obligee in the event of non-performance of a contract is rescission. When a contract is rescinded, both parties are discharged of their contractual duties and the rescinded contract is deemed not to have existed from the beginning. Consequently,

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upon rescission, a party who has received something from the other party based on a contract loses the right to retain it. Having lost the right to retain the object of the dispute, the party who received the money or other property under the agreement must return it to the other party to the contract. Essentially, this remedy is based on the doctrine of unjust enrichment (futoritoku).

Remedies Designated by Contract

The Civil Code classifies all statutory provisions into required rules and optional rules. Required rules are mandatory provisions from which the parties to the contract may not deviate. Optional rules are subject to modification by the parties. Matters concerning indemnification and warranties are optional, as long as a party does not act in bad faith. Thus, the parties are free to determine the scope of indemnification in their agreement. Whether or not the court will enforce such indemnification clauses will depend on the court’s assessment of the reasonableness of the clause.

Tort Remedies

The Civil Code provides that the remedy for a tort is compensation for the loss. However, case precedents provide that in certain special circumstances, such as public nuisance and ongoing violation of privacy or human rights, other remedies such as an injunction may be granted.

Interim Remedies

A plaintiff may apply for the following types of interim remedies (orders):

(a) provisional attachment (kari sashiosae) to freeze a defendant’s assets in order to secure a monetary claim;

(b) provisional disposition (kari shobun) to preserve property which is the object of the claim; and


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(c) provisional disposition (chii-hozen no kari shobun) to temporarily establish an “interim relationship,” e.g., interim declarations of legal rights, coupled with orders to preserve those rights pending trial and rendering an injunction order.

Whether or not the court will award a particular interim remedy will depend on whether the plaintiff can demonstrate an underlying claim, and an imminent risk that any eventual judgment would be rendered valueless without provisional protection. An applicant will be required to make a substantial security deposit to the court to obtain such interim orders.

Appeals

Appeals may be made on questions of law to the appropriate court. An appeal may be made at any time prior to the expiry of the applicable appeals limitation period.

The appeal courts will review the case, including all the evidence submitted to the court below. However, they tend not to call for witnesses who have already testified in the earlier trial, unless the appeal court is especially doubtful of their previous testimony. The availability and procedure for an appeal will depend on the level of the court to which the appeal is made. In general, the losing party in the first instance may appeal to a higher court with appropriate jurisdiction over the case. The appeal is taken in writing. The document must be affixed with the appropriate fee stamps and filed with the court of first instance within two weeks of the day of service of the judgment on the appellant.

In general, the availability of an appeal to the Supreme Court is limited to avoid burdening the court with an excessive caseload. The Supreme Court accepts appeals at its own discretion. In criminal cases the only grounds for appeal to the Supreme Court are errors in the interpretation of the Constitution, breaches of the Constitution and deviation from precedents. In civil cases the grounds for appeal are errors in the interpretation of the

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Constitution and other breaches of the Constitution, provided however that the Supreme Court may accept certain appeals where there has been a deviation from precedents and where important issues concerning the interpretation of law arise.


The Law of Civil Execution provides several methods to enforce judgments. The methods of enforcement will differ according to whether the subject of performance is tangible property, and whether the subject is a monetary claim or not.

Attachment of Property

In the case of tangible property, the court bailiff may take possession of movable objects. The court may declare that immovable property be attached. In addition, claims against third parties can be attached. The asset may then be sold or transferred to the creditor.3

Compulsory Administration

This method of enforcement is appropriate when enforcement of payment of money is sought. For this method of enforcement, the court appoints an administrator to manage the property of the defendant and distributes any profits derived from that property to the creditor.

3 In particular these refer to bank accounts. Bank accounts are a typical reliable asset of the debtor. A series of recent decisions of Supreme Court requires creditors to specify not only the name of bank but also the branch name of the bank where the debtor has an account in order to successfully file a petition for the issuance of an order of seizure. However, it is occasionally difficult for the creditor to specify the details of such bank account due to the confidentiality obligation of the bank. This issue interferes with the enforcement of the creditor’s claim. To address the issue, the Ministry of Justice embarked on a process to amend the Civil Execution Act in September 2016. This is intended to pave the way for a better enforcement process for the creditors.


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Substitute Performance

By this method of enforcement, the court orders a third party to do something at the cost of the defendant. This method is available for the enforcement of performance where the subject of performance is a non-monetary claim.

Indirect Enforcement

There are also methods of indirect enforcement. In such cases, the court may order a party to refrain from some action to do something (i.e., orders an injunction), and may impose fines until the defendant complies. This method is available for the enforcement of non-monetary claims.

Generally, the enforcement of performance is not available where performance has become impossible or where, in cases of improper performance, repairs or replacements cannot be made.


In order to enforce a foreign judgment in Japan, the plaintiff must seek a judgment for execution in a Japanese district court. The requirements for the execution of a foreign judgment in Japan are set out in the CCP. Pursuant to Article 118 of the CCP, a foreign judgment will be considered valid in Japan if the following conditions are met:

(a) the jurisdiction of the foreign court is sustainable under international civil jurisdiction rules of Japanese law, ordinance or a treaty;

(b) the defendant whom the judgment has been made against has been properly served with a summons, or has appeared and presented the merits of their case;

(c) the contents of the judgment, and the procedure in which the judgment is rendered, are not contrary to the “public order” or “good morals” of Japan; and

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(d) there is a reciprocal “guarantee.”

With regard to item (b), “service” refers to the service of process in accordance with the CCP. With regard to item (c), the Supreme Court of Japan has held that an order for punitive damages made by a foreign court is contrary to the public order of Japan. It should also be borne in mind that in relation to item (d), where there is no reciprocity agreement between the two countries with regard to the enforcement of judgments, the question of whether or not there is a “reciprocal guarantee” will be decided according to Japanese case law. The issue of “reciprocal guarantee” was discussed by the Kobe District Court (judgment dated 22 September 1993) in a case regarding the enforcement of a Hong Kong judgment in Japan. In this case, the court held that since Hong Kong judgments were based on common-law principles similar to the basic principles upon which Japanese court cases were decided, there existed a “reciprocal guarantee.” The Supreme Court of Japan subsequently upheld the decision of the Kobe District Court on 28 April 1998.

Arbitration Law

Arbitration Procedures

In 2004, Japan’s arbitration system was completely overhauled. Japan has modernized its outmoded arbitration law and brought it in line with the UNCITRAL Model Law.

In principle, only civil disputes that may be resolved by settlement between the parties may be submitted to arbitration in Japan.

In international cases, the Japan Commercial Arbitration Association (JCAA)4, Singapore International Arbitration Centre (SIAC) and the

4 In the first amendment since 2004, the new JCAA Commercial Arbitration Rules came into effect on 1 February 2014, which include the newly established “Emergency Arbitrator” provisions, provisions relating to mediation taking place


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International Chamber of Commerce (ICC) are the arbitral institutions that are commonly used in Japan. Maritime matters are largely handled by the Japan Shipping Exchange (JSE), which was established in 1921. While traditionally, Japanese companies have preferred the JCAA, recently, there is a trend toward the increasing use of SIAC arbitration and ICC arbitration.5

Investment Disputes

Japan is a party to a number of bilateral investment treaties, including a treaty with China that provides for the resolution of investment disputes by arbitration. Japan is also a party to the 1965 Convention on the Settlement of Investment Disputes (ICSID).


In Japan, the role of the courts in arbitration is very limited. If the court determines that the arbitration clause in the agreement is valid, it will generally refuse to accept a motion by one of the parties to proceed with litigation in accordance with Article 14 of the Arbitration Law of Japan (Arbitration Law).

The Arbitration Law allows the court to determine the place of arbitration based on the circumstances of the dispute, including the convenience of the parties. It also allows the court to appoint an arbitrator, the specific procedures for which vary depending on the number of arbitrators and parties. Finally, the Arbitration Law allows the tribunal (on its own volition

during the course of an arbitration and expedited procedures, as well as amendments to the rules related to interim measures by arbitral tribunals. 5 From late 2017 through late 2018, three separate facilities related to ADR have been established in Japan: the Japan International Dispute Resolution Center in Osaka; the Japan International Mediation Center in Kyoto; and the Japan International Arbitration Center in Tokyo. These facilities were opened, in part, following an effort from the Japanese government and industry to support international ADR in Japan.

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or through application by a party) to seek the assistance of the court in taking evidence.


Recognition and enforcement of an arbitral award, irrespective of the place of arbitration, is governed by Articles 45 and 46 of the Arbitration Law. Article 45 of the Arbitration Law sets out the conditions for the recognition of an arbitral award and Article 46 sets out the necessary procedures for the application of an enforcement decision based on the arbitral award.

Conditions for the Enforcement of an Arbitral Award

An enforcement decision shall be obtained before an arbitral award may be enforced. Under Article 45, an arbitral award shall have the same effect as a final and conclusive judgment unless any of the following grounds (for refusal of recognition) are present:

(a) The arbitration agreement is not valid due to limits to a party’s capacity;

(b) The arbitration agreement is not valid for a reason other than limits to a party’s capacity under the law to which the parties have agreed to subject it (or failing such agreement, the law of the country under which the place of arbitration falls);

(c) A party was not given notice as required by the provisions of the country under which the place of arbitration falls;

(d) A party was unable to present its case in the arbitral proceedings;

(e) The arbitral award contains decisions on matters beyond the scope of the arbitration agreement or the claims in the arbitral proceedings;


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(f) The composition of an arbitral tribunal or the arbitral proceedings were not in accordance with the provisions of the law of the country under which the place of arbitration falls;

(g) The arbitral award has not yet become binding, has been set aside or suspended by a court of the country under which the place of arbitration falls;

(h) The claims in the arbitral proceedings relate to a dispute that is not arbitrable under the laws of Japan;

(i) The content of the arbitral award would be contrary to the public policy or good morals of Japan.


Under the Arbitration Law, an application for the setting aside of an arbitral award is the sole means of challenging an arbitral award. The grounds for setting aside are very similar to the grounds under Article 34(1) of the Model Law, and the language is almost identical to the grounds for refusal of recognition as set out above (apart from item [vii]). An application for setting aside may not be made after three months have elapsed from the date of receipt of notice of the arbitral award or if the enforcement decision has become final and conclusive.

Unlike in some jurisdictions, in Japan there is no power to appeal either an international or domestic award on the basis of an error of law or fact. The court will not inquire whether the award is fair or reasonable. The sole substantive ground for challenge is where the content of the award is contrary to public policy, and Japanese courts are slow to reach such a finding. In the words of the Tokyo District Court, the governing principle is that “excessive intervention by the courts is improper” given that “the

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essential feature of the system of arbitration is the autonomy of the parties.”6

The Japanese courts’ rigorous adherence to a pro-arbitration approach is clear from a consistent line of authority where they have stressed that public policy cannot be used as a ‘backdoor’ means of bringing a challenge on the merits. The same court noted above also held that “an arbitral award must be given the utmost respect,” and so nothing short of a situation “where the legal consequences flowing from the award are found to violate public order and morals in Japan” suffices to engage the public policy exception. The exception is not, the court said, “to be read as meaning that a court shall set aside an award where the Tribunal’s findings of fact or application of the law are deemed to be no more than unreasonable.” Most recently, the Osaka District Court rejected an attempt to characterize an arbitrator’s finding that contractual rights had been waived as contrary to public policy, observing that it “came down to no more than an assertion that the findings of fact and application of the law in the award were wrong.”7

The only case8 where an award was set aside for violating public policy was apparently motivated by a concern that, to hold otherwise, would “harm confidence in arbitration.” According to the court, the arbitrator had made an error in deeming a critical disputed fact to be undisputed. Further, the court said, the arbitrator’s treatment of contested facts as uncontested was -- from the parties’ perspective -- tantamount to a failure to hear their arguments which would give rise to a challenge on purely due process grounds in any event. While the decision in this case was not

6 Tokyo District Court decision on July 28, 2009, opinion published in 1304 Hanrei Times 292. 7 Osaka District Court decision on March 17, 2015, opinion published in 2270 Hanrei Jiho 74. 8 Tokyo District Court decision on June 13, 2011, opinion published in 2128 Hanrei Jiho 58.


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universally accepted by Japanese legal authorities9 (among others), it is in any event, and as noted, the only such example of an award being set aside by a Japanese court on public policy grounds.

In a more recent case, the Osaka High Court set aside a JCAA award on the ground that the presiding arbitrator had failed to disclose relevant facts to the parties.10 The presiding arbitrator was a partner in the Singapore office of a global firm, and an attorney in the firm’s US office represented an affiliate of the claimants in an ongoing matter unrelated to the arbitration. This fact was not disclosed to the parties or the JCAA, as required both by the Arbitration Law and international best practice (under the IBA Guidelines on Conflicts of Interest in International Arbitration this was an “Orange List” matter for which a conflicts check should have been undertaken). After the tribunal rendered an award in favor of the claimants, the respondent commenced proceedings in Osaka District Court, arguing that, among other things, the non-disclosure had rendered the constitution of the tribunal contrary to Japanese law and triggered the right to seek a set-aside under Article 44(1)(vi) of the Arbitration Law.

The Osaka District Court dismissed the application for set-aside. According to the court, although the non-disclosed fact arguably would fall into the facts which the presiding arbitrator had the obligation to disclose, it ruled on discretionary grounds that any breach was de minimis and did not warrant annulment of the award.

On appeal, however, the Osaka High Court overturned the Osaka District Court’s decision. According to the Osaka High Court, from the perspective of the applicant the non-disclosed fact was critical information bearing on the respondent’s decision whether or not to seek to challenge the

9 See, e.g., T. Nakamura, The Recent Japanese Court Decisions on Arbitration (2012) JCAA Newsl. 28, at p. 9. 10 X1 and X2 v. Y1 and Y2, Osaka High Court 4th Civil Division 2015 (Wo) No 547, June 28, 2016, Hanrei Times No. 1431, p. 108.

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presiding arbitrator and should have been disclosed. Moreover, the presiding arbitrator was subject to a duty to investigate whether there were facts to be disclosed by him. Specifically, he was bound to retrieve information that was readily accessible. He could have identified the non-disclosed fact through a conflicts check without any difficulty. This was information he should have disclosed. The Osaka High Court considered that the non-disclosure here was a significant procedural defect which, even on the assumption that it had no direct effect whatsoever on the outcome of the arbitration, triggered the ground for annulment under Article 44(1)(vi) of the Arbitration Law. To ensure the fairness of the arbitral procedure and award and to maintain confidence in the arbitral system, the Osaka High Court held it was necessary to set aside the award.

In December 2017, Japan’s Supreme Court overturned the Osaka High Court’s decision to set aside the arbitral award.11 The Supreme Court agreed with the Osaka High Court as regards the extent of disclosure and the ongoing duty to disclose, and it also agreed that an advanced waiver submitted to the JCAA by the arbitrator was not sufficient to amount to disclosure for the purposes of Article 18 of the Arbitration Act. However, the Supreme Court did not agree with the standard set by the Osaka High Court. The court held that an arbitrator has a duty to disclose “all the facts that would likely give rise to doubts as to his/her impartiality or independence”12 if he or she either: (i) was aware of such facts; or (ii) could have normally discovered such facts by conducting a reasonable investigation. The Supreme Court found that it was unclear whether the arbitrator in this case was aware of the conflict and whether the arbitrator could have discovered the conflict prior to conclusion of the arbitration, even if the arbitrator had conducted a reasonable investigation.

11 Supreme Court Third Bench decision on December 12, 2017, Case No. Heisei 28 (Kyo) 43. 12 Arbitration Act, Art. 18(4).


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Consequently, the case was remanded to the Osaka High Court for further consideration of these issues.

It is at least debatable here whether the systemic considerations raised by the Osaka High Court, partially supported by Japan’s Supreme Court, ought to trump the interests of the parties in finality, given that the possibility of any actual bias on the part of the presiding arbitrator appeared remote. When one considers the time and expense needed to get to the final award, there may be much to be said for an approach like that taken by the Osaka District Court, whereby a set-aside application can be refused on discretionary grounds if the breach is minimal because, for example, it has no direct effect on the outcome of the award. Be that as it may, this case is one where the presiding arbitrator ought to have erred on the side of caution, but failed to do so.

Mediation

Mediation (choutei) is recognized as a method of dispute resolution. This method of dispute resolution is often used in family dispute resolution cases (e.g., divorce cases). However, it is rare for this type of dispute resolution to be adopted in international cases.

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Baker & McKenzie Japan


The Tokyo office was established in 1972, and currently has more than 160 lawyers consisting of both Japanese- and foreign-licensed practitioners. The lawyers in the Tokyo Dispute Resolution Group are qualified to appear in Japanese courts and also handle commercial arbitration cases and corporate investigation matters. The expertise of the group includes cross-border disputes, complex corporate and commercial disputes, construction and major project disputes, pharmaceutical and medical regulatory issues, and multinational bribery and fraud investigations.

The Tokyo office Dispute Resolution partners include

Contacts

Yoshiaki Muto Tel: +81 3 6271 9541 [email protected]

Kengo Nishigaki Tel: +81 3 6271 9473 [email protected]

Joel Greer Tel: +81 3 6271 9728 [email protected]


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Malaysia

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Legal System

Malaysia’s legal system comprises laws which have emerged from three significant periods in Malaysian history dating from the Malacca Sultanate, to the spread of Islam to Southeast Asia, and thereafter the absorption into the indigenous culture of British colonial rule which introduced a constitutional government and the common law.

The Malaysian legal system law can be classified into two general categories: written and unwritten law. “Unwritten law” refers to laws which are not enacted by the legislature and which are not found in either the federal or state constitutions. This category of law derives from cases decided by the courts and from the application of local customs, which is otherwise known as “common law.” “Written law” refers to the laws contained in either the federal or state constitutions, or codified or enacted as statutory legislation.

Islamic law, which is only applicable to Muslims, is enacted under the federal constitution. The state legislature has jurisdiction and is permitted to make (Islamic) laws pertaining to persons professing the religion of Islam. Such laws are administered by a separate court system, the Syariah Courts. The state legislature also has jurisdiction over the constitution, organization and procedure of the Syariah Courts.

The written laws are much influenced by English laws as the Malaysian legal system retains many characteristics of the English legal system. However, these laws have also been influenced by Australian and Indian laws.

Since Malaysia gained its independence in 1957, the application of the laws of England, although still frequently referred to in Malaysia, has been conditional and subject to limitations. These limitations are set out in Section 3(1) of the Civil Law Act 1956, which provides that “the said common law, rules of equity and statutes of general application shall be


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applied so far only as the circumstances of the States of Malaysia and their respective inhabitants permit and subject to such qualifications as local circumstances render necessary.” Therefore, the laws of England may only be applied when there is a lacuna in the Malaysian statutes. In that event, the relevant English laws which are suitable and appropriate to the local circumstances will be applied.

The Malaysian court structure is also greatly influenced by the English court system, and is divided into the Subordinate Courts and the Superior Courts. The Subordinate Courts consist of the Magistrates’ Court, which deals with minor criminal and civil cases, and the Sessions Courts, the highest of the Subordinate Courts.

The Superior Courts comprise the High Court, the Court of Appeal and the Federal Court (which is the highest court in the land).

Courts

The Small Claims Tribunals

The Small Claims Tribunals within the Magistrates’ Court are available for claims which do not exceed RM5,000. This Tribunal is intended to simplify the collection of small debts by an individual plaintiff in an informal atmosphere against a defendant. Legal representation by an advocate and solicitor is not allowed in the Small Claims Tribunal unless the defendant is required by law to be represented by solicitors such as companies. The Small Claims Tribunal will not entertain any claim by or against a partnership, since a partnership essentially consists of more than one individual.

Claims are commenced by completing the prescribed form, which is then filed with the Magistrates’ Court. The plaintiff is required to state the amount of the claim and the particulars of the claim in the prescribed form, including the relevant dates and the basis of the claim. The trial is

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held in a relaxed and informal manner. Although the normal rules of evidence do apply, the tribunal is unlikely to allow technical procedural arguments. The trial is normally conducted in the Malay language before a magistrate. If necessary, the parties may apply for the proceedings to be conducted in English, or for an interpreter to be present for testimony or submissions to be delivered in the Chinese language or in Tamil. At the end of the trial the magistrate makes an order, which stands as an enforceable judgment.

Subordinate Courts

The Subordinate Courts are divided into two courts; namely the Magistrates’ Court and the Sessions Court. These are the lower courts that have jurisdiction to deal with minor civil and criminal cases. Appeals from decisions of the Subordinate Courts are made to the High Court.

The Magistrates’ Court

The Magistrates’ Courts deal with the vast majority of cases, both civil and criminal, and are situated in almost all major towns in Malaysia. A Magistrates’ court is presided over by a magistrate. A First Class Magistrate has jurisdiction to deal with civil cases where the amount in dispute or the value of the subject matter does not exceed MYR100,000; and generally all criminal matters for which the maximum punishment does not exceed 10 years’ imprisonment or is punishable with a fine not exceeding MYR10,000. However, it is to be noted that a First Class Magistrate may not impose a term of imprisonment exceeding five years unless the Magistrate is conferred with such jurisdiction under the law on which the convicted person is tried or due to previous conviction or antecedents of the convicted person, which warrants punishment in excess of 5 years imprisonment


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The Sessions Court

The Sessions Court, presided over by a judge, is the highest of the Subordinate Courts. A Sessions Court may hear any civil matters where the amount in dispute or the value of the subject matter does not exceed MYR1,000,000 and has unlimited monetary jurisdiction in respect of motor vehicle accidents, landlord/tenant disputes and distress actions. This court has jurisdiction to try all criminal offenses except those punishable with death.

The High Court

The jurisdiction of the High Court is original, appellate and supervisory.

In the exercise of its original jurisdiction, it has unlimited criminal and civil powers. Any civil matter that cannot be determined by the Subordinate Courts is heard before the High Court. In criminal cases, however, save for offenses punishable by death, no case may be brought to the High Court unless an offender has been properly committed for trial after a preliminary hearing in the Magistrate’s or Sessions Court.

There are two High Courts of coordinate jurisdiction and status in Malaysia: the High Court of Malaya and the High Court of Sabah and Sarawak. These High Courts have also established other branches of the High Court in the different states of the country, which have local jurisdiction. Each High Court branch has jurisdiction where:

(a) the cause of action arose; or

(b) the defendant or one of the defendants resides or has his place of business; or

(c) the facts on which the proceedings are based exist or are alleged to have occurred; or

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(d) any land the ownership of which is disputed is situated within the local jurisdiction of the Court.

The High Court of Malaya in Kuala Lumpur is further organized into the following divisions:

(a) commercial division;

(b) appellate and special powers division;

(c) civil division; and

(d) criminal division.

In the exercise of its appellate jurisdiction, the High Court hears appeals from the Magistrates’ and Sessions Courts within its own jurisdiction.

In recent years, specialist courts have also been established in the Kuala Lumpur High Court for Islamic banking (Muamalat), intellectual property, admiralty and corruption matters and the New Commercial Courts (NCC) and New Civil Courts (NCvC) nationwide. A special court to handle sexual crimes against children, the first of its kind in South East Asia, has also been established in the Palace of Justice at Putrajaya beginning on 4 July 2017 with plans to expand to other states.

The Court of Appeal

The Court of Appeal has jurisdiction to hear and determine any appeal against any High Court decision on criminal matters. It also has the jurisdiction to hear and determine civil appeals where the amount of the subject matter of the claim is not less than MYR250,000 (which otherwise requires leave to appeal from the Court of Appeal). This power extends to hearing appeals from any judgment or order of the High Court, whether made in the exercise of its original or its appellate jurisdiction. The Court of Appeal is the second-highest court in Malaysia and is presided over by three Court of Appeal judges.


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The Federal Court

The Federal Court is the highest court in Malaysia. All proceedings are conducted by at least three Federal Court judges. The Federal Court has three jurisdictions — original, consultative and appellate — but it does not cover those matters under the jurisdiction of the Syariah Court. The Federal Court’s original jurisdiction allows it the exclusive power to deal with constitutional issues raised under Article 128(1) and (2) of the Federal Constitution, to determine whether a federal or state law is invalid. Its consultative jurisdiction allows it to determine any question referred to it by the King. The Federal Court also has the jurisdiction to hear civil and criminal appeals from the Court of Appeal. However, appeals to the Federal Court are not as of right; leave of the Federal Court is required.

The Special Court

The Special Court was established in 1993 and is provided for under Article 182 of the Federal Constitution. The Special Court hears all offenses committed by the monarchical heads of the component states of the Federation of Malaya, including His Majesty the Yang Di Pertuan Agong and all civil cases brought by or against them. It is chaired by the Chief Justice of the Federal Court who is assisted by four other members, namely the two chief judges of the respective High Courts and two other persons appointed by the Conference of Rulers.

Other Tribunals

The Industrial Court

The Industrial Court is a separate form of tribunal and is not regarded as a civil court. The Industrial Court is constituted and empowered by the Industrial Relations Act 1967. The function of the Industrial Court is to determine disputes between employers and employees arising from alleged unjustified dismissals in which the employee seeks to claim for reinstatement or damages in lieu of reinstatement. An award by the

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Industrial Court will be enforceable in the same manner as a court order. Decisions from the Industrial Court may be quashed by way of an application for certiorari to the High Court.

Labour Court

The Labour Court is an administrative tribunal primarily established to resolve disputes between employers and employees relating to breaches of the terms of employment contract(s), including the payment of wages and other issues arising under the Employment Act and its subsidiary regulations. The decisions of a Labour Court may be appealed to the High Court. Any employee who wishes to bring the dispute to the Labor Court must lodge a complaint to the Director General of Labor within sixty days from the date of the act(s) giving rise to the claim.

Syariah Court

The Syariah Court only hears matters pertaining to Islamic law and family law of persons professing the religion of Islam, including the Islamic law relating to succession, testate and intestate. However, the Syariah Court is not allowed to exercise jurisdiction over any offense punishable with imprisonment for a term exceeding three years and/or any fine exceeding MYR5,000, or whipping exceeding six strokes, or any combination thereof. The Syariah Court is not open to all advocates and solicitors of Malaysia. The court admits only Syarie lawyers, who are persons deemed to have sufficient knowledge of Islamic law.

The Tribunal for Consumer Claims

The Tribunal for Consumer Claims only hears matters affecting consumers. It may hear matters where the amount of the dispute does not exceed MYR25,000. However, parties are allowed to bring the dispute to the tribunal notwithstanding that it exceeds the monetary limits of the tribunal, if an agreement is made between the parties in writing consenting to such dispute being adjudicated by the tribunal. The tribunal


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cannot hear matters concerning land, disputes of entitlement under a will or settlement, and goodwill and trade disputes concerning trade secrets or intellectual property. The tribunal’s decision is final and binding and will be deemed a decision of a Magistrate’s Court, and can be enforced accordingly.

The Tribunal for Homebuyer Claims

The Tribunal for Homebuyer Claims was formed under the Housing Development (Control and Licensing) Act 1966 and its subsidiary legislation to hear complaints by purchasers against developers or a first buyer of the property. Purchasers who signed their sale and purchase agreements on or after 1 December 2002 can now circumvent the usually protracted and costly court process by filing their claims with the tribunal for a nominal fee of MYR10. Jurisdiction of the tribunal is limited to claims where the total amount claimed does not exceed MYR50,000, unless both parties agree otherwise in writing.

Jurisdiction

The local jurisdiction of the courts are determined principally by reference to the place the cause of action arose; the place where the defendant (or one of the defendants) resides or has his business; the place where the events on which the proceedings are based exist or are alleged to have occurred, or in the interests of justice. If the prospective defendant resides or has its place of business outside Malaysia, leave of court is required to serve the originating process on him outside the jurisdiction. The grant of leave is discretionary, and the courts will in particular consider the jurisdiction in which the dispute is most appropriately to be tried, in the interest of all parties and the ends of justice.

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All proceedings in the courts are carried out in the national language, which is the Malay language. All documents filed must also be prepared in the Malay language, although in practice most legal practitioners tend to file an accompanying English translation thereto. It is quite common that upon oral application by counsel, the judges may indulge practitioners who request permission to speak in English.

Recent Developments

There has been an introduction of e-courts equipped with computer recording transcript (CRT) system to facilitate speedier disposal of trials. Judges can now focus on just listening to the evidence without judges and counsels having to take down notes of proceedings manually. The CRT system also ensures that no evidence is lost due to selective transcription of notes or paraphrasing by note-takers.

Further, there is a queue management system (QMS) with self-service and user-friendly kiosks where lawyers can key in their case numbers and record their attendance. With the use of QMS, there is computerization of case registration, and lawyers can now wait for an electronic call-up of their cases.

Aside from that, lawyers also have the option of conducting case managements with court registrars by telephone conference now. In addition, there is now an established electronic filing (“e-filing”) system in place. Through e-filing, lawyers are able to upload their documents and file them online, with service kiosks installed at various locations throughout Malaysia to facilitate e-filing of court documents destined for most courts in Peninsular Malaysia.

Starting 22 October 2018, the Court of Appeal and the Federal Court has launched an e-Review System whereby all case management for the


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appellate court shall be conducted online without the need for physical attendance at the court.

Legal Profession

A practicing lawyer in Malaysia is known as an advocate and solicitor. There is no division of the legal profession in Malaysia.

Advocates and solicitors have exclusive rights of audience in court. Their conduct and, to some extent, their remuneration are governed by the Legal Profession Act 1976 (LPA).

All advocates and solicitors are members of the Malaysian Bar and are answerable for their conduct to the Bar Council. Advocates and solicitors owe legal and professional duties not only to their clients but also to the courts to act fairly and honestly. The Bar Council is established for the proper management of the affairs of the Malaysian Bar, as well as to ensure its members comply with the LPA.

All advocates and solicitors have rights of audience before all courts except the Small Claims Tribunal, the Penghulu’s Court and the Syariah Courts. For rights of audience before the Syariah Courts, advocates and solicitors must obtain a separate qualification.

Foreign lawyers are generally not granted rights of audience. There are, however, exceptions provided in Section 28A of the LPA whereby the attorney general may issue a special certificate for admission of any qualified foreign lawyer as an advocate and solicitor of the High Court of Malaya and in Section 18 of the LPA whereby the court may admit a foreign lawyer to serve as co-counsel if that foreign lawyer is a person who, if he was a citizen of or a permanent resident in Malaysia, would be eligible to be admitted as an advocate and solicitor of the High Court. Further conditions are that:

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(a) for the purpose of that particular case the lawyer must have, in the opinion of the court, special qualifications or experience of a nature not otherwise available amongst advocates and solicitors in Malaysia; and

(b) he has been instructed by an advocate and solicitor in Malaysia.

As part of the liberalization of the legal profession, the LPA was amended in 2012 to allow foreign lawyers to practice foreign law in Malaysia under 3 different types of licenses - International Partnership License, Qualified Law Firm License (“QLFL”) and Registered Foreign Lawyer license. The amendment came into force on 3 June 2014 together with the Legal Profession (Licensing of International Partnerships and Qualified Foreign Lawyers) Rules 2014.



The plaintiff commences an action by issuing an originating process such as a writ of summons or an originating summons, containing details of the parties and a brief statement of the plaintiff’s claim. The mode of commencing an action depends on the nature of the claim and the relief sought. A writ is commonly used to commence an action in which a substantial dispute of fact is likely to arise whereas an originating summons is used where the principal question at issue is likely to be one of construction of any written law or a legal instrument or a question of law. When the action is begun by a writ at the High Court level, a statement of claim which sets out concisely the material facts supporting the plaintiff’s cause of action may either be attached to the writ when it is served to the defendant or within 14 days from the date of service of the writ.

A writ must be personally served on the defendant within six months from its date of issue, either by personal service or by prepaid AR registered post, addressed to the last known address of the defendant. Where such


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modes of service cannot be effected, and upon application by the plaintiff, the court may order substituted service of the writ or originating summons, usually by means of advertisement in the mainstream local newspapers and posting at the court notice boards. A defendant residing out of jurisdiction may only be served with leave of court.

Notice of Intention to Defend

Where the defendant has been duly served with a writ, the defendant has 14 days (depending on the defendant’s place of business/residence) after the service of the writ to give notice of intention to defend by entering an appearance to the suit, failing which, the plaintiff will be at liberty to obtain judgment in default of appearance. The defendant can at any time apply to have this judgment in default set aside on sufficient cause being shown. For service out of jurisdiction, the defendant would usually be given a reasonable period of time (usually stipulated as 21 days after service) to enter an appearance.

If the defendant wishes to challenge the jurisdiction of the court from which the writ was issued or if there are any irregularities in the writ and/or its service, the defendant may enter an appearance and subsequently apply to the court to set aside the writ (or service thereof) or for any other appropriate relief.

Once appearance has been entered, a defendant will have a further 14 days from the expiry of the time limited for entry of appearance to file and serve a defense (and counterclaim, if any). If the defendant fails to do so, the plaintiff may seek judgment in default of a defense against the defendant. It should be noted that where both parties are represented by a solicitors, rules of etiquette require the plaintiff’s solicitors to give at least seven days’ notice to the defendant’s solicitors before any attempt is made to enter judgment in default of a defense against the defendant.

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After a defense is filed, the plaintiff is entitled to file a reply to the defense (and defense to counterclaim, if applicable) within 14 days from the date of service of the defense.

Summary Judgment

After the defendant has entered an appearance, and if there appears to be no arguable defence to the action and no other triable issues, the plaintiff may apply to the court for summary judgment. This application is made by a notice of application supported by an affidavit verifying the facts of the claim and deposing to a belief that there is no arguable defense and that there are no triable issues.

The onus is on the defendant to show that there are issues which are more appropriately determined after a full trial (e.g., where there exists a dispute of facts, equivocal documentary evidence or difficult questions of law). If the defendant fails to raise any “triable issues”, the court may, at its discretion, summarily grant final judgment for the plaintiff without the need for full trial. Applications may also be made for the court to determine a question of law or construction of a document, on a summary basis, if this will finally determine the issues in dispute between the parties.

These summary judgment procedure may take between three to six months from the commencement of the action to complete, which is considerably quicker than a full trial. Even if the summary judgment application fails, the plaintiff would still be entitled to proceed with its claim in a full trial.

Pleadings

The statement of claim, defence and reply (and the counterclaim and defence to counterclaim, where applicable) are known as pleadings. The system of pleadings amounts to a formal exchange of factual allegations aimed at defining the issues of dispute between the parties. Every


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pleading must contain no more than the material facts on which the party relies.

The court has wide powers to allow the amendment of pleadings at any stage, and to order the provision of particulars of pleadings where insufficient details have been provided.

Admissions and Interrogatories

A party may either formally admit in its pleadings, or in writing, to the veracity of facts alleged by its opponent.

Interrogatories are questions answerable on oath which a party may, with the leave of the court, serve on its opponent. In the first instance the answers are given by affidavit but if the party interrogated omits to answer some of the questions or gives insufficient answers, the court may order a further answer to be given either by affidavit or by oral examination. Although the interrogatories proposed must be relevant to the action, the definition of “relevance” is very wide. The questions may relate to any matter which goes to support the interrogator’s case and/or to impeach or destroy his opponent’s case. Thus, answering interrogatories is another form of discovery, and is sometimes described as “discovery of facts.”

Pre-Trial Case Management

At any time before any action or proceedings are tried, the court may direct parties to attend a pre-trial case management relating to the matters arising in the action or proceedings. During these sessions, the court would assess the nature of the dispute and give specific directions and time frames for the parties to comply with in order to narrow the issues to be tried and ensure that a trial is conducted as efficiently as possible. The Rules of Court 2012 sets out a non-exhaustive list of directions which the courts may make to secure the just, expeditious and economical disposal of the action or proceedings.

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For example, the Courts typically narrow down the issues in dispute by issuing directions at case management for the filing of common agreed and disputed bundles of documents, agreed issues to be tried, and agreed facts. Depending on the expediency of and level of cooperation between solicitors for the parties, pre-trial directions usually take between two and three case management sessions which may span a period of up to six months from the close of pleadings.

Discovery is an important part of litigation procedure, and its extent and expense in commercial actions can be considerable. Settlement of actions often occurs at this stage both for this reason and because the discovery process can bring to light information which may have an important bearing on the strengths and weaknesses of the parties’ positions.

An order for discovery will have to be made by the Court for discovery to take place. Failure to comply with an order for discovery can ultimately result in dismissal of the action or striking out of the defense.

Privileged documents are exempt from disclosure. For example, communications with legal advisers for the purpose of obtaining legal advice are privileged. Documents tending to incriminate a party are also privileged. Certain communications are privileged when litigation was contemplated or pending (e.g., between solicitors and non-professional agents or a third party).

Documents containing matters confidential to a party and not otherwise privileged must be disclosed, but the court may order a controlled method of disclosure to protect confidentiality.

Trial dates will typically be fixed once the judge is satisfied that all pre-trial directions given have been complied with and are subject to availability of free court dates.

It is worth noting that in an effort to clear a persistent backlog of cases in the courts, a new system which is known as management judge unit (MJU)


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was implemented to provide a system of case management not only pre-trial, but for all actions and interlocutory applications filed in court. Each division — namely the civil, commercial and criminal units — are now headed by a managing judge appointed by the chief justice. The respective judges will then oversee his/her unit in each court (High Courts and subordinate courts), and is assisted by a pool of registrars.

Discovery Prior to the Proceedings

Generally, the courts have the discretion to order discovery of documents prior to pleadings. This, however, would only be done in very rare or exceptional circumstances. Although the authorities have not stated specific circumstances when early discovery will be allowed, they have indicated that where it is essential to meet the objectives of certain interlocutory orders, it will be allowed.

Discovery from Non-parties

Discovery can also be sought prior to commencement of proceedings from non-parties to the dispute. Traditionally, this order is sought when it is necessary to obtain information to ascertain the identity of a potential defendant, so that proceedings may be brought against him.

Production of Business Books and Bankers’ Books

The court can order the production of business books or copies thereof for inspection. A party may apply to the court for an order allowing him to “inspect and take copies of any entries in a banker’s book for any purposes of the proceedings.” The court may so order, whether or not the bank or any other party is summoned.

Production of Computer Evidence

Despite its emerging trend and importance, there are still no established rules governing the discovery and production of electronic evidence in court proceedings. The general practice is for electronic evidence to be

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produced through traditional means of documentary printouts or transcripts, and the Malaysian Evidence Act 1950 has been amended to set out rules governing the admissibility of such evidence.

Documents produced by a computer or a statement contained in such document are admissible as evidence of any fact stated if the document was produced by the computer in the course of its ordinary use, whether or not the person tendering the same is the maker of such document or statement. In the event of challenge, however, the party intending to adduce such evidence may be required to tender a certificate duly executed by a person who either before or after the production of the document by the computer was responsible for the management of the operation of that computer, or for the conduct of the activities for which that computer was used. By providing such a certificate, it is presumed that the computer producing the evidence is in good working order and was operating properly in all respects.

Notwithstanding the relative ease by which computer-generated evidence may be admitted in court proceedings, the court may still draw any reasonable inference from circumstances relating to the document to estimate the weight, if any, to be attached.


An action may in most circumstances be withdrawn or discontinued unilaterally by the plaintiff. However, the plaintiff may require leave of Court to withdraw its action if it intends to withdraw or discontinue its claim at a later stage of proceedings. Generally, the withdrawal or discontinuance of an action does not automatically act as a bar to a subsequent action on the same cause of action, unless the withdrawal or discontinuance has been applied “with no liberty to file afresh.”


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Interim Remedies - Interlocutory Injunctions

Interlocutory injunctions may be sought to either restrain the defendant from doing an act, to compel the defendant to take certain steps or to preserve the status quo until the rights of the parties have been finally determined at trial. Such interim remedies are particularly important due to the protracted court process whereby an action may take up to one or two years to reach trial stage.

Applications are made by way of a notice of application supported by an affidavit and may be made either ex parte or inter partes. An ex parte injunction Order must be followed by an inter partes hearing within 21 days, after which the ex parte order will automatically lapse. Generally, the following must be established by the applicant in order to obtain an interlocutory injunction:

(a) that there is a serious question to be tried;

(b) that damages would not be adequate to compensate the applicant if the injunction is not granted; and

(c) that on a balance of convenience, an injunction ought to be granted

Mareva Injunctions

Mareva injunctions are granted to prevent the removal or dissipation of a defendant’s assets before the satisfaction of any potential court order/judgment in favor of the plaintiff. Alternatively, the injunction may compel the defendant to provide security for the plaintiff’s claim. This form of relief may even be available to enforce an arbitration award or an order for costs. Third parties such as banks who have notice of a Mareva injunction order are also bound by it.

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An applicant must establish three basic requirements in his application for a Mareva injunction:

(a) that he has a good arguable case;

(b) that the defendant has assets within the jurisdiction; and

(c) that there is a real risk that the assets may be dissipated.

It should be noted that very strong evidence is required before a judge will be prepared to make such an order due to its severe consequences for the defendant. A plaintiff is also obliged to make full and frank disclosure of all material facts, to give an undertaking to pay damages to the defendant as a result of the injunction if it is ultimately found to have been wrongly ordered, and similarly to give an undertaking to pay any expenses reasonably incurred by third parties, such as banks, as a result of the injunction.

Anton Piller Order

An Anton Piller order is granted where there is a grave danger the defendant will dispose of or destroy incriminating evidence in the defendant’s possession or control before trial, and its continued existence is necessary for the plaintiff’s case. This order is usually made ex parte and enables the plaintiff and/or its representatives to enter the defendant’s premises to search for, inspect and seize or make copies of materials so that they may be preserved until trial.

Because of the draconian nature of the order, the courts have indicated that it will only be granted where it is “essential” to do so in the interests of justice, and the applicant must prove:

(a) an extremely strong prima facie case;

(b) the damage, actual or potential, must be very serious for the applicant;


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(c) there is clear evidence that the defendants have in their possession incriminating documents/things;

(d) there is a real possibility that they may destroy such material before an inter partes application can be made; and

(e) this is an appropriate case for which an order should be made.

Such an order may also compel the disclosure of names and addresses of suppliers or customers, as are commonly sought in actions concerning infringement of intellectual property rights and abuse of confidential information.

Other Interim Remedies

Restraint of Foreign Proceedings

The court may also grant an injunction to restrain a party from pursuing foreign proceedings in appropriate circumstances. The governing principles for the grant of such an order are as follows:

(a) the jurisdiction is to be exercised when the “ends of justice” require it;

(b) where the court grants an injunction restraining proceedings in a foreign jurisdiction, the order is directed at the parties, not the foreign court;

(c) an injunction will only be issued restraining a party who is amenable to the jurisdiction of the court, against whom the injunction will be an effective remedy; and

(d) the jurisdiction must be exercised with caution.

Order for Detention, Custody or Preservation of Property

The court can grant an order for the detention, custody or preservation of any property which is the subject matter of an action, or as to which any

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question may arise, or for the inspection of any property in the possession of a party to an action. The scope of the rule is limited by the interpretation of “property” which has been held to refer to “physical items capable of inspection” only.

Order for the Sale of Perishable Property

The court can make an order for the sale of perishable property.

Order for the Return of Property Subject to a Lien

In the case of a claim for the recovery of movable property, where the opposing party does not dispute its title but claims a lien over it, the court may order the property to be returned to the claimant on provision of sufficient security.

Costs

A party is generally not entitled to recover costs of any court proceedings unless it has obtained an order of the court, which makes such provision. “Costs” are the fees and expenses incurred by the parties to the proceedings. The court has discretion to award costs on any basis it sees fit, but in general, this discretion is exercised according to the following principles:

(a) costs should follow the event and be awarded to the successful party, except where it appears to the court some other order should be made;

(b) where the successful party has caused any unnecessary increase in the length or cost of the proceedings, he may be deprived of part or all of his costs; and

(c) where a successful party raises unreasonable or improper issues or allegations, the court may not only deprive him of his costs but order him to pay the whole or part of the unsuccessful party’s costs.


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If the court makes no order as to costs, each party will bear his own costs. The court may deal with the question of costs “at any stage of the proceeding or after the conclusion of the proceedings.”

Costs are generally quantified through the process of taxation of costs by the registrar of the High Court. The parties may agree on costs as an alternative, or there may be fixed costs in certain situations.

The successful party rarely obtains full reimbursement for all his costs. The proportion is generally about one-third to one-half of the actual costs incurred.

Security for Costs

Upon the application of the defendant, a foreign plaintiff without assets in Malaysia or a Malaysian company that is insolvent may be required to give security for the proportion of the defendant’s costs that it may have to pay if it is unsuccessful in the action. Security can be given by a payment into court or by bond. More than one application for security may be made by a defendant during the course of an action. There is no requirement for a defendant to give security, except where a counterclaim is made by a foreign defendant without assets in the jurisdiction, or by an impecunious Malaysian company defendant.

For the court to exercise its discretion as to whether security for costs should be provided, the circumstances must fall within one of the following prescribed categories:

(a) the plaintiff is ordinarily resident out of the jurisdiction;

(b) the plaintiff has no assets within the jurisdiction;

(c) the plaintiff is a nominal plaintiff suing for the benefit of some other person and there is reason to believe it will be unable to pay the costs of the defendant if ordered to do so;

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(d) the address of the plaintiff is not stated in the originating process, or is incorrectly stated; or

(e) the plaintiff has changed its address during the course of the proceedings with a view to evading the consequences of the litigation.

The court can then make an order “in such manner at such time, and on such terms (if any) as the court may direct,” but it must have regard to all the circumstances of the case, including the merits of the case, in deciding whether it is just to make an order that security be given. It should be noted that the mere fact that the plaintiff is a foreigner is not by itself sufficient to warrant an order.

Appeals

With limited exceptions, an appeal is possible at every stage of litigation. In general, Malaysia has a three-tier court system, that is one trial / hearing at the originating court and two chances of further appeal to the higher courts.

For matters originating from the subordinate courts, the first appeal is to the High Court and the second appeal is to the Court of Appeal. Similarly, an Award of the Industrial Court may be challenged by way of judicial review, filed at the High Court.

For matters originating from the High Court, the first appeal is to the Court of Appeal and the second appeal is to the Federal Court.

Appeals to the Court of Appeal in limited circumstances requires the leave of the Court of Appeal and all appeals to the Federal Court requires the leave of the Federal Court. if leave is refused, parties may apply to the respective court for a review of the decision.

There is no provisions for further appeal once the matter reaches the apex court, be it the Court of Appeal or the Federal Court.


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An appeal is usually by way of a re-hearing, but fresh evidence is only allowed to be admitted with leave of court. The Appellate Courts will rarely interfere with a decision based on the exercise of the lower court’s discretion, or with a trial judge’s view of the facts based on his perception of the witnesses, unless that exercise of discretion or perception was clearly wrong.

Enforcement of Judgments and Orders

A judgment or order takes effect from the time it is pronounced but can only be enforced upon extraction of a sealed copy of the judgment or order from court.

The principal methods of enforcement of judgment debts, or the carrying out of orders of the court, are as follows:

Writ of Seizure and Sale

A writ of seizure and sale entails sealing the defendant’s premises and seizing the goods and chattels belonging to the defendant, with a view to auctioning them off. The proceeds will go toward satisfaction of the judgment sum.

Garnishee Proceedings

Any debt owing to the defendant from any other person, or monies in a bank standing to the defendant’s credit, can be attached for payment to the plaintiff. This is known as a garnishee order nisi. Once the garnishee order has been made absolute, the monies will be paid directly to the plaintiff.

Judgment Debtor Summons

If the defendant is an individual, he can be summoned to court to be examined as to its means and ability to satisfy the debt. After examination, the court may make an order directing the defendant to pay a stated

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monthly sum. A warrant of arrest may be issued against the defendant if he fails to appear despite being served a summons to appear.

Winding-Up Proceedings

A winding-up petition may be lodged to wind up a defendant company on grounds that it is unable to pay any undisputed debt exceeding MYR10,000.

Bankruptcy Proceedings

A bankruptcy petition may be lodged if the defendant is an individual and the judgment debt exceeds MYR30,000. The defendant can be adjudicated as bankrupt on grounds that he is unable to pay the judgment debt.

Charging Orders

A charging order is available only when the defendant has a beneficial interest in shares, debentures or debenture stocks in any company registered under any written law, or government stock.

Receivers

Instead of winding up a defendant company, the court may on an application appoint a receiver, by way of “equitable execution.” In deciding the application, the court will have regard to whether it is just or convenient that the appointment be made having regard to the amount claimed by the judgment creditor, the amount likely to be obtained by the receiver, and the probable cost of his appointment.

Contempt Proceedings

Where a judgment or order requires a person to do an act within a specified time, or not to perform such act, and he defies/disobeys the order, a committal order may be issued by the court whereby the party in contempt may be fined, and/or may be committed to prison.


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Certain foreign monetary judgments are enforceable in Malaysia by virtue of the Reciprocal Enforcement of Judgments Act 1958 (REJA). However, before a foreign judgment can be enforceable, it has to be registered. The registration of foreign judgments is only possible if the judgment was given by a superior court from a country listed in the First Schedule of the REJA. Those countries include the United Kingdom, Singapore, New Zealand Republic of Sri Lanka, Brunei Darussalam, Hong Kong Special Administrative Region of the People’s Republic of China and India.

To register a foreign judgment under the REJA, the judgment creditor has to apply for the same within six years after the date of the foreign judgment. Any foreign judgment coming under the REJA shall be registered unless it has been wholly satisfied, or it could not be enforced by execution in the country of the original court.

If the judgment is not from a country listed in the First Schedule to the REJA, the only method of enforcement at common law is by securing a Malaysian judgment. This involves suing on the judgment in the local courts as an action in debt. Summary judgment procedures (explained above) may be used to expedite the process.

Mediation

Malaysian parties remain relatively unaware of ADR methods and are therefore cautious, due principally to their lack of knowledge, experience and understanding of the mediation process. The Financial Mediation Bureau (FMB) was set up by the Central Bank of Malaysia in 2005 to replace the Insurance Mediation Bureau established in 1991. The Financial Mediation Bureau provides an independent and impartial method in resolving disputes between insurers and policyholders.

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The independence of the mediator is guaranteed by the council of the bureau, whose membership consists of people representing public and consumer interests and representatives of its members.

The mediator can investigate and decide on a complaint, dispute or claim between the insured and the insurer.

There are no statutory provisions governing mediation in Malaysia. It is therefore likely that any mediation process undertaken will apply by any rules that the parties themselves have agreed upon. The FMB acts on rules provided for the insurance industry by the Central Bank of Malaysia.

The existence of the FMB has shown that there is potential for mediation in Malaysia. Since then, the Bar Council of Malaysia has established the Malaysian Mediation Centre (MMC), with the objective of promoting mediation as a means of ADR. The ADR Committee of the Bar Council is responsible for the proper functioning and implementation of the MMC’s objectives. The MMC is currently based in Kuala Lumpur, but the Bar Council has indicated that further centers will be established in other states if and when the need arises.

At present, the MMC has on its panel a total of 290 accredited mediators who are trained to provide professional mediation services for a minimal fee (which is calculated based on the quantum of the claim).

The types of cases which the MMC has handled over the years are as follows: family disputes; partnership/joint ventures, probate and estate matters; construction disputes; sale and purchase of property; medical disputes; sale or supply of goods and services/title of goods.

The mediator(s) of the MMC are subject to a code of conduct while the parties are bound by the mediation agreement which they enter into. The mediator and all parties are subject to the mediation rules of the MMC.


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Malaysian Arbitration Act 2005 and Arbitration (Amendment) Act 2011

The Malaysian Arbitration Act 2005 was passed by Parliament and received the Royal Assent on 30 December 2005. Prior to the 2005 Act, arbitration in Malaysia was governed by the Arbitration Act 1952 and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards Act 1985.

The Malaysian Arbitration Act 1952 was outmoded and unsuitable for the effective resolution of modern commercial disputes. The 2005 Act brings Malaysia in line with modern international practice of treating arbitration as the preferred method of resolving international disputes, and was conceived to keep pace with global developments based on, though not identical to, the United Nations Commission on International Trade Law Arbitration (UNCITRAL) Model Law.

The Arbitration Act 2005 was subsequently complemented by the Arbitration (Amendment) Act 2011 that came into force on 1 July 2011. Among the key amendments are the following:

• Sections 10 and 11 on the court’s jurisdiction to order security for satisfaction of any award given in arbitration with respect to admiralty matters as well as to allow courts to grant interim relief in aid of foreign arbitrations.

• Sections 38 and 39 on the recognition and enforcement of both domestic and foreign arbitrations awards and to provide clarity as to the previous provisions relating to the grounds for refusing to recognize and enforce an award.

The Arbitration Act 2005 has been recently overhauled by the Arbitration (Amendment) Act 2018 (“Amendment No. 1”) and the Arbitration (Amendment) (No.2) Act 2018 (“Amendment No. 2”).

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Amendment No. 1, which came into force on 28 February 2018 has renamed the Kuala Lumpur Regional Centre for Arbitration as Asian International Arbitration Centre (Malaysia) (“AIAC”).

Amendment No. 2 which came into force on 8 May 2018 has reformed various substantive aspects of the existing arbitration framework, including:

• the introduction of a new provision which allows parties to an arbitration to appoint any representative to represent them in the proceedings. The representative is not limited to lawyers only.

• the clarification on the requirement for an arbitration agreement to be in writing. An arbitration agreement will be recognized provided that its content is recorded in any form, including electronic communication.

• the introduction of a set of comprehensive provisions on the powers of arbitral tribunal and the High Court in granting interim measures and the procedures in an application for interim measures.

• the reinforcement of the parties’ rights to choose the governing law applicable to the substance of the dispute and to restrict the right of the arbitral tribunal to decide according to equity and conscience save where it is expressly authorized by the parties.

• the introduction of provisions which expressly empower the arbitral tribunal to grant pre-award and post-award interest.

• the reinforcement of the confidentiality of an arbitration proceedings. New provisions are introduced to expressly restrict the circumstances of disclosure on information pertaining to an arbitration and that all court proceedings pursuant to the Arbitration Act will not be heard in open court unless the court orders otherwise.


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• the removal of the right to refer any question of law to the High Court. This strengthens the principles of minimum court intervention in an arbitration proceedings and provides greater finality to the arbitral awards.

The recent amendment to the Arbitration Act 2005 have effectively aligned the Malaysian arbitration regime with the latest revision of the UNCITRAL Model Law. These significant changes are part of the government’s effort towards the reinforcement of Malaysia as the top choice for arbitration seat in the SEA region and in Asia.

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Wong & Partners


Wong & Partners is the Malaysian member firm of Baker & McKenzie International. Many of Wong & Partners’ lawyers have previously worked in Baker & McKenzie’s offices in Singapore and the Asia Pacific region. The group has strong industry experience in cross-border transactions and multijurisdictional work and provides in-depth analysis of various legal issues. Its lawyers are also involved in international construction arbitration and other dispute resolution work.

The Kuala Lumpur office Dispute Resolution Partners include

Contacts

Kherk Ying Chew Tel: +60 322 9879 33 [email protected]

Dato Mohd Arief Emran bin Arifin Tel: +60 322 9879 25 [email protected]

Eddie Chuah Tel: +60 322 9879 39 [email protected]

Janice Tay Tel: +60 322 9878 38 [email protected]





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People’s Republic of China

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Legal System

The legal system of the People’s Republic of China (the PRC) is based on the civil law system similar to the German and French systems. is The sources of law comprise mainly of enactments instead of judicial decisions. Judicial precedents are not binding. The Supreme People’s Court is authorized to make binding interpretations of enactments, though.

The highest lawmaking authority resides with the National People’s Congress (NPC), China’s national legislature. The Standing Committee of the NPC is also empowered to enact and interpret statutes. The State Council, China’s cabinet, and its subordinate ministries and agencies, are authorized to issue more detailed regulations and measures for the implementation of administrative laws passed by the NPC or its Standing Committee. The local governments are also allowed to issue regulations tailored to local conditions. Local regulations should not conflict with national legislation, although inconsistencies and conflict are found in practice.

Besides the publicly promulgated laws and regulations, there are also plenty of so-called neibu or “internal” rules to guide officials at various levels of the government in their interpretation and implementation of laws and regulations. Such internal rules are only circulated within the government.

China is signatory to a large number of international treaties, including the United Nations Convention on Contracts for the International Sale of Goods (CISG) and the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (New York Convention). Such treaties have force of law in China except for those provisions to which the Chinese government has made explicit reservations when ratifying the relevant treaties.


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Courts

The courts are generally divided into courts of general jurisdiction and courts of special jurisdiction, all under the general guidance of the Supreme People’s Court. Courts of special jurisdiction include intellectual property courts, military courts, maritime courts, financial courts, internet courts, and commercial courts.

The courts of general jurisdiction include the Supreme People’s Court (SPC) at the national level and the primary people’s courts, the intermediate people’s courts and the High people’s courts at local and provincial levels.

The Supreme People’s Court

The Supreme People’s Court is the highest judicial body in China. The president of the Supreme People’s Court is appointed by the NPC and the Supreme Court justices are appointed by the Standing Committee of the NPC. The Supreme People’s Court is, under the Constitution of the People’s Republic of China, required to report to the NPC and its Standing Committee. Thus the president of the Supreme People’s Court delivers a work report to the NPC at its annual session.

The Supreme People’s Court is empowered to supervise the administration of justice by the lower courts. The Supreme People’s Court may, if it finds mistakes in the judgments or rulings of any lower courts, decide to try the matter itself or order the local trial court to conduct a re-trial. In practice, this power is more often triggered by appeals or petitions by parties rather than by the SPC of its own accord.

Besides issuing judicial interpretations of laws in general, the Supreme People’s Court also gives opinions on questions concerning specific application of laws arising in specific judicial proceedings. These general or specific interpretations are generally binding on lower courts.

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The Supreme People’s Court Circuit Tribunal

In an attempt to avoid local influence and to make it more convenient for litigants outside Beijing, the Supreme People’s Court issued the Provisions of the Supreme People’s Court on Several Issues Concerning the Hearing of Cases by Circuit Tribunals on 28 January 2015 and amended it on 27 December 2016, as part of a pilot program for China’s judicial reform. On the same day, the First Circuit Tribunal was established in Shenzhen and three days later, the Second Circuit Tribunal was established in Shenyang. One day after the amendment took effect, the Third Circuit Tribunal was established in Nanjing and the Fourth in Zhengzhou. On 29 December 2016, the Fifth Circuit Tribunal was established in Chongqing and the Sixth in Xi’an.

These six circuit tribunals are outposts of the Supreme People’s Court and the decisions made thereby are deemed as if they are made by the Supreme People’s Court and hence final. The Circuit Tribunals have jurisdiction over major administrative, civil and commercial cases that fall within the ambit of SPC. Each Circuit Tribunal is responsible for cases in different regions in Mainland China. The First Circuit Tribunal is responsible for the cases in Guangdong, Guangxi, Hainan and Hunan provinces. The Second Circuit Tribunal is responsible for cases in Liaoning, Jilin and Heilongjiang provinces. The Third Circuit Tribunal is responsible for cases in Jiangsu, Shanghai, Zhejiang, Fujian and Jiangxi provinces. The Fourth Circuit Tribunal is responsible for cases in Henan, Shanxi, Hubei and Anhui provinces. The Fifth Circuit Tribunal is responsible for cases in Chongqing, Sichuan, Guizhou, Yunnan and Xizang provinces. The Sixth Circuit Tribunal is responsible for cases in Shaanxi, Gansu, Qinghai, Ningxia and Xinjiang provinces.

Primary People’s Courts

The primary people’s courts are established at the county level or district level of large municipalities. Where necessary, primary people’s courts are


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allowed to set up as people’s tribunals at the village level in the countryside or the street community level in cities. The tribunals are component parts of the primary people’s courts. Judgments and orders issued by the tribunals are considered as those of the primary people’s courts. The primary people’s courts have general jurisdiction as courts of first instance over civil and criminal cases, except as otherwise specifically provided by law.

Intermediate People’s Courts

Intermediate People’s Courts are established at the prefectural level, in municipalities directly under the provincial government and in municipalities directly under the central government. Intermediate people’s courts can hear appeals from the primary people’s courts and can also exercise jurisdiction as courts of first instance over major cases involving foreign parties, and cases with significant impact within the geographical areas over which they exercise jurisdiction.

High People’s Courts

High people’s courts are established at the provincial level for provinces, autonomous regions and municipalities, directly under the central government. These courts can hear appeals from the intermediate people’s courts located in the provinces and have jurisdiction as courts of first instance over civil cases with significant impact within the geographical areas over which they exercise jurisdiction.

Tribunals

The people’s courts at each level normally maintain a criminal tribunal, two to four civil tribunals and an administrative tribunal. The civil tribunals handle actions relating to civil aspects such as property and personal relations between citizens, legal persons and other organizations which are of equal status, including debt recovery, actions in torts and contract disputes. Each people’s court comprises a president, several vice presidents

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and judges. Each tribunal has a chairman, one or two deputy chairmen and a number of trial judges.

Courts with jurisdiction across different regions

With a view to protecting the judges from political interference and maintaining the impartiality and independence of China’s judicial system, two courts with jurisdiction across different regions have been established in December 2014, namely the Beijing Fourth Intermediate People’s Court and the Shanghai Third Intermediate People’s Court.

These two courts will have jurisdiction over administrative cases that involve government at municipality, district or county level, major civil and commercial cases, major environment and resources protection cases, major food and drug safety cases and some major criminal cases.

IP Courts

To enhance protection of intellectual property rights, three intellectual property courts were set up in Beijing, Shanghai and Guangzhou at the end of 2014. The courts are staffed with IP experts and are better equipped to adjudicate IP related disputes.

Among others, the IP courts have jurisdiction over the first instance of civil and administrative cases involving patents, computer software, trade secrets of technical nature, new plant varieties and integrated circuit design; civil cases for the recognition of well-known trademarks; administrative cases against decisions of provincial and municipal governments with respect to IP rights; and appeals on first-instance decisions in IP cases made by courts at a lower level (i.e. the primary people’s courts located in their jurisdiction).

The Beijing Intellectual Property Court also has exclusive jurisdiction over administrative cases filed against the decisions of the state intellectual property office.


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On 26 September 2018, the Standing Committee of the National People’s Congress adopted the Decision on Several Issues concerning Judicial Procedures for Patent and Other Intellectual Property Cases. According to this decision, the SPC has jurisdiction over appeals on certain first-instance judgements or rulings rendered by the IP courts for certain types of patent cases. This is to unify trial criteria for patent cases.

Financial court

In August 2018, the Shanghai Financial Court is established which is the first financial court in China.

The court, placed at the intermediate people’s court level, is responsible for the first instance of financial cases, both civil and administrative, including (1) cases involving disputes over securities, futures trading, trust, insurance, bills, letters of credit, financial loan contracts, bank cards, financing lease contracts, contracts for commissioned wealth management, and pawns; (2) new-type financial disputes over independent guarantees, factoring, private funds, online payments via non-banking payment institutions, P2P lending, equity-based crowdfunding on the internet; (3) bankruptcy cases where financial institutions are the debtors; (4) cases involving the judicial review of arbitration of financial disputes; and (5) recognition and enforcement of judgments rendered by foreign courts on financial disputes.

Internet Courts

As a response to the increasing volume of online disputes, China established its first internet court in Hangzhou in August 2017. The second Internet court was opened in Beijing in September 2018, followed by a third one in Guangzhou shortly after.

The court, placed at the primary people’s court level, has jurisdiction to hear civil and administrative cases in relation to the matters such as (1) online shopping contracts executed or performed through e-commerce

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platforms; (2) online service contracts which are executed and performed on the Internet; (3) financial lending contracts or small-amount lending contracts which are executed and performed on the Internet; (4) ownership of the copyright or neighboring rights of work initially published on the Internet; (5) online infringement of the copyright or neighboring rights of work published or disseminated on the Internet.

Commercial Courts

On 29 June 2018, the Supreme People’s Court established the first international commercial court in Shenzhen, Guangdong Province and the second international commercial court in Xi’an, to settle cross-border commercial disputes.

Pursuant to Provisions of the Supreme People’s Court on Several Issues Concerning the Creation of International Commercial Courts, the International commercial courts shall accept the following cases: (1) an international commercial case of first instance where the parties concerned agree to be subject to the jurisdiction of the Supreme People’s Court in accordance with Article 34 of the Civil Procedure Law and the subject amount is higher than CNY 300 million; (2) an international commercial case of first instance under the jurisdiction of a high people’s court that, however, believes it necessary to have such case heard by the Supreme People’s Court, which has been permitted; (3) an international commercial case of first instance that has a significant impact nationwide; (4) a case where an appeal is made for preservation in the arbitration stage, or for canceling or enforcing the arbitration award for an international commercial case; and (5) other international commercial cases which the Supreme People’s Court believe necessary to be tried by an international commercial court.


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Territorial and Subject Matter Jurisdiction

With respect to territorial jurisdiction and subject matter jurisdiction, unless otherwise provided by law, generally for contract disputes

(a) the first instance action falls under the jurisdiction of the court at the domicile of the defendant or where the contract is performed; and

(b) when two or more people’s courts have jurisdiction over an action, the plaintiff may institute his action in one of those people’s courts. However, if the plaintiff institutes the action in two or more competent people’s courts, the people’s court that first puts the case on its trial docket shall have jurisdiction.

The plaintiff has the right to file a suit in any court having jurisdiction over the matter. The defendant has the right to object to the jurisdiction of the court before which the action has been brought. The objection must be raised in writing and before the prescribed time for filing the defense is due. The court will examine the grounds of the objection and decide on the jurisdictional issue before investigating the substantive issues. If it finds that it has no jurisdiction, it will transfer the case to the court that has jurisdiction over the matter or dismiss the case. If the court finds that it has jurisdiction, it will dismiss the objection.

Legal Profession

In general, a foreign national or entity suing or being sued in people’s court has to appoint a PRC-qualified lawyer to appear in court on his or its behalf if he, or it, decides to engage a lawyer to represent him or it in the proceedings. A foreign lawyer may assist a Chinese lawyer and attend hearings as a party’s authorized representative. However, generally a foreign lawyer is not permitted to speak at such hearings in a lawyer’s capacity. If the foreign party does not reside in China, the foreign party may appoint a Chinese lawyer by mailing a power of attorney to the

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Chinese lawyer with instructions to act on the foreign party’s behalf. This power of attorney must be notarized in the appointing party’s country and authenticated or legalized by the PRC embassy or consulate in that country.

Procedures for Claims

Pleadings

Filing of the Complaint

A plaintiff institutes a suit by filing a complaint with the relevant people’s court. The complaint is a statement of claim which will usually include a brief description of the facts of the case, the causes of action, the particulars of the legal claims and the legal and factual grounds in support of the claims.

The court will examine the complaint and decide within seven days whether it satisfies the relevant criteria for a civil action. For example, there must be a specific defendant, a specific claim, with stated factual basis and legal grounds. In addition the suit must fall within the range of civil actions cognizable by courts, and within the jurisdiction of the court with which it is filed.

The examination is conducted by the case acceptance office of the relevant court. If the court determines that the complaint fails to conform to any of the above criteria, it will rule not to accept the case.

Notice of Acceptance

If it finds that the complaint conforms to the applicable criteria, the court will place the action on the trial docket within seven days and issue to the plaintiff a notice of acceptance, which usually states that the case has been accepted and the plaintiff is required to pay, in advance, a case acceptance fee within a specified time. Following receipt of the case


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acceptance fee, the court will proceed to serve the complaint on the defendant.

Case Acceptance Fee

Several different types of costs may be payable by litigants. The most important of these is the case acceptance fee, which is levied on a sliding scale based on the value of the claim (the aggregate amount of damages sought by the plaintiff). The general rule on costs is that the losing party will pay the case acceptance fee. If both parties are held liable, the case acceptance fee may be shared. In normal circumstances, the costs incurred by the parties in engaging counsel to conduct the case on their behalf are not recoverable except where the relevant legislation or regulations applicable to the claim in question specify otherwise or the parties so agree.

Defendant’s Answer

The defendant responds to the claims set out in the complaint by an answer. Similar to the complaint, the answer will also need to specify the particulars of the parties, an outline of defenses asserted and evidence in support. The reply may also include a statement of counterclaim, if desired by the defendant.

In a domestic action the defendant must file its reply within 15 days of receipt of the complaint. In a foreign-related action, the time limit for submission of the answer is 30 days if the defendant has no domicile in China. These time limits may be extended subject to approval of the court. Failure to submit the answer in time will not prevent the case from proceeding or deprive the defendant of raising defences before or during the hearing.

In practice, lawyers often prepare a memo called a “statement of counsel” summarizing the points of contention and legal arguments on behalf of their clients. This document focuses on the line of legal arguments of the

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party and can be dispensed with if such arguments have already been included in the complaint or the answer. If this document is to be submitted, it is usually presented at the hearing or submitted to the court after the hearing.

Supplementary Documents

For a domestic dispute, the court shall conclude the first instance proceedings within six months (except for summary procedure), which is extendable subject to the approval of the court’s president. There are no rules for closure of pleadings under Chinese law for foreign related dispute, but the court imposes time limits within which evidence has to be submitted. Usually the initial period is 30 days of the defendant receiving the complaint.

However, the parties may apply to the court for extending the time for filing evidence or supplementary documents. Such extension will generally be granted if valid reasons are given to and accepted by the court.

Service of Process

The court is responsible for the service of process in civil actions. The plaintiff has no duty to complete or submit proof of service. The responsibility of the court to effect service applies to all legal documents required to be served in the civil procedure. Within five days of the acceptance of a case, the court must effect service. Service of process must be evidenced by an acknowledgment of receipt.

There are several methods to effect service of process, including direct service, deemed service, service through entrustment, service by mail, forwarding service, service by public notice and service by diplomatic channels (in a foreign-related action).


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Direct Service

The most common method of service is direct service, whereby the process papers are delivered by court officials (usually court bailiffs or clerks) to the person to whom the service applies.

If the recipient of service is a natural person, service can be acknowledged by the recipient himself or any adult member of his family living together. If the recipient of service is a legal person, service must be acknowledged by its legal representative or the person in charge of receiving documents. If the recipient is an organization other than a legal person, service must be acknowledged by the head of such organization or the person in charge of receiving documents.

If the defendant is a foreign company, direct service can be effected by delivering the documents to any agent authorized by the foreign company to receive documents of process in China, or to the foreign company’s representative office or branch established in China, or its business agent in China if it is authorized by the foreign company to accept service.

Deemed Service

Where a defendant refuses to accept direct service of process, the court bailiff may ask representatives from the local community or the work unit of the recipient to be present to attest to the delivery of process and sign the acknowledgment of receipt. The documents will then be left at the domicile of the defendant and service will be deemed to be completed.

Service through Entrustment

When it is difficult to effect direct service, the court may serve process through entrustment or by mail. For service through entrustment, the court serving the process may entrust another court or tribunal to effect service on its behalf. If the defendant is a PRC national located outside China, service through entrustment is also available, in which case the

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court may entrust the Chinese consulate abroad to effect service. If the defendant is located outside China and is a foreign national, service by entrustment is not available.

Service by Mail

Service can be made by the court by way of registered mail if direct service is difficult. For service by mail, the date on the return receipt will be deemed to be the date of service. Where the defendant is not domiciled in China, service by mail may be used if the law of the state of the person to be served permits service by mail. In such a case service is effected on the date of acknowledgment by the defendant. If the acknowledgment of service is not received by the court within six months from the date of posting, but circumstances justify an assumption that the documents have been served, the documents will be deemed to be served on the date of expiry of the six-month period.

Service by Public Notice

When the court fails to effect service directly through entrustment or by mail, it may authorize service to be done by public announcement. Service is deemed completed 60 days from the date of the public notice in a domestic case. Such public notice can be published in a national newspaper. When the recipient of service is not domiciled in China, service is also deemed completed six months from the date of the notice.

Other Methods of Service

In a foreign-related action where the defendant is not domiciled in China, service may also be undertaken through diplomatic channels or in accordance with an international treaty concluded or acceded to by the state of the person to be served and China. It may be noted in this regard that China has acceded to the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters.


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Pretrial Procedure

Evidence

The general rule on presentation of evidence is that the party asserting an allegation bears the burden of proof. With the implementation of Several Provisions of the Supreme People’s Court on Evidence in Civil Proceedings in April 2002, the concept of burden of proof has been further defined. Under the new interpretation, the burden of proof is reversed in certain kinds of cases.

The interpretation also operates to liberalize the discovery process. For example, parties may now be threatened with “unfavorable consequences” should they fail to provide the opposite party with evidence that has been requested. Under the new interpretation, a party who withholds evidence risks that the court will draw a negative inference from the uncooperative behavior.

Chinese courts permit the introduction of various kinds of evidence. Permissible evidence that litigants may present to the court includes documentary evidence, real evidence, audio-visual materials, live testimony of witnesses, statements by interested parties, expert conclusions and notes of inquest. Nevertheless, as a general rule, all types of evidence must be verified by the court as to its authenticity before being allowed to be used as a basis for determining facts.

The court has the right to obtain evidence, on its own initiative, from relevant units or individuals. These units or individuals cannot refuse to provide such evidence.

Trial Procedure

Notification

In civil actions the rules require the court to notify the parties of the trial hearing three days before it commences. As Chinese courts are empowered

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to obtain evidence on their own initiative, the court will review the evidence and documents submitted by the parties and, prior to the trial, collect evidence on its own initiative if necessary. The court is required to follow certain prescribed legal procedure when collecting evidence. For public trials the court publicly announces the names of the parties, the subject matter of the action and the time, date, and place of the trial.

Opening

Before the trial session opens, the presiding judge of the collegiate bench or the sole judge, as the case may be, checks that the parties or their duly authorized representatives are present and informs them of their rights and obligations at the hearing. The judge will then declare the opening of the hearing.

A trial hearing in China is quite different from a trial in a common-law jurisdiction. The hearing is usually very short. Some hearings before the courts will not last longer than half a day. If more hearings are required, the court can call the parties to have a second or third hearing. The presiding judge will usually, at the first hearing and any subsequent hearing, make clear whether he will convene a further hearing for the case.

Presentation of Evidence

At the trial hearing, the plaintiff will open its case first by briefly stating the claims as stated in the complaint. The plaintiff will then present its case on the facts. The defendant will then briefly state its defense and the facts of the defense case.

Evidence will then be presented at the trial in the following order: presentation of statements by the parties; informing the witnesses of their rights and obligations; questioning the witnesses, and reading out written depositions of witnesses not present; presentation of documentary evidence, physical evidence, and audio-visual materials; reading of expert conclusions; and reading out the record of inquest.


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Reply, Rebuttal and Debate

At the trial the plaintiff and his attorney make statements first, followed by the response by the defendant and his attorney. After the debate, the plaintiff and defendant are asked to make their final statements. Upon the conclusion of the exchanges between the parties the judge may encourage the parties to attempt mediation. If mediation fails to lead to settlement, the court will close the hearing. A court judgment will then be issued if the court finds that the facts are clear and there is no need for another hearing.

Judge’s Role at Hearing

Chinese civil procedure generally follows the inquisitorial system. Judges take an active role in inquiring into the facts of the case. They are free to ask questions of the parties or their witnesses directly. The exchange by and between the parties is controlled by the presiding judge. It is at the presiding judge’s discretion to determine who should be allowed to speak.

Judgment

The judgment must be announced by the court in public. Where the court announces the judgment in court session, a written judgment must be issued within 10 days unless a specific date has been set for announcement of the judgment, in which case the written judgment must be issued immediately after the announcement. The court also informs the parties of their right to appeal, the period in which the appeal must be filed and the proper court in which it should be lodged. The clerk of the court records the proceedings and the judges and parties sign the record to certify its accuracy.

A judgment must contain the subject matter of the action, the claims of the parties, the facts in dispute, the findings of fact and reasons upon which the judgment rests, the assessment of court costs, and the time limit and appropriate court for appeals. The court may issue rulings on

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dismissals of complaints, prejudgment security remedies or payments, applications for withdrawal, staying or terminating proceedings, amending or correcting errors in judgments and other unspecified matters.

Default Judgment

The plaintiff may be granted a default judgment in circumstances where the defendant served with a summons refuses to appear before the court without proper cause, and where the defendant leaves the courtroom during a trial without permission of the court.

Summary Procedure

A summary procedure is available for simple claims. The procedure is modelled on the system described above, except that the facts are clear, the rights and obligations of the parties are clear and the nature of the dispute between the parties is not significant. These simple civil matters are handled by a single judge of the people’s court within three months.

Adoption of AI

In China, AI is making a big impact in the legal industry where we are seeing some significant developments in the judicial system. In April 2017, the SPC has issued the Opinions on Accelerating Building of Smart Courts which encourages local courts to use AI to (a) provide legal literacy services for the general public; and (b) support judges in minimizing the burden of non-judicial matters in an effort to boost smart courts.

In addition, local courts in nine provincial-level regions, including Beijing, Shanghai and Guangdong, have officially launched new AI-powered robots in their litigation services halls. This is to facilitate public access to manuals on litigation and judicial procedures, as well as provide basic information on judges and court clerks. The Al powered robots are also capable of automatically generating civil complaints for the plaintiff.


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AI can also help judges to conduct analysis and research. The Shanghai High People’s Court is now piloting the establishment of an AI-assisted Judicial System which is capable of analyzing and automatically collating similarly decided court cases for the judges’ reference. The system is also capable of conducting deviation analysis on draft judgments by comparing current evidence with evidence in prior decisions. This will help judges to maintain consistency in their judicial practice. The criminal case system has been established while the civil and administrative case systems are still under trial use

The Shanghai and Henan courts have set up AI Services Terminals to scan and submit case files electronically. Local courts in Shanghai, Zhejiang and three other provinces in China have introduced an AI Speech Recognition System to achieve automatic real-time recording of trial proceedings in substitution for court clerks.

Interim Measures

In a civil action in China, the people’s court may order asset preservation measures (such as attaching, sealing, seizing or freezing property), injunctions and evidence preservation. It’s provided that if a judgment may become impossible or difficult to execute due to an anticipated act of a party or, for other reasons a people’s court may, at the request of the other party, make a ruling for preservation of property. The people’s court may, when necessary, also decide on its own initiative to adopt measures for the preservation of property. The preservation measures can be applied for prior to, at the commencement of or after the case is accepted for trial. The party applying for an order of preservation will usually be required to provide security in cash, bank guarantee, insurance policy or assets.

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Appeals

Appellate Jurisdiction

The people’s courts at or above the intermediate level have appellate jurisdiction. These courts can exercise jurisdiction as second-instance courts. The appellate jurisdiction is extremely broad. The appellate court is free to thoroughly review both the lower courts’ legal conclusions and findings of fact, and its review is not restricted by the issues on appeal. Appellate court procedure is consistent with this wide-ranging appellate jurisdiction. Upon notice of appeal submitted by the appellant, the court of first instance compiles a complete file of the case and evidence, including the appeal and response, and submits it to a court of second instance.

The court of second instance may dispose of an appeal by determining that the lower court’s decision was correct and hence dismiss the appeal, or amend the original judgment where it determines that the lower court’s application of the law was incorrect, or remand the case to the lower court for a retrial.

Under the PRC court system, the decision of the court of second instance is final. Thus, all judgments, decisions or rulings issued in the second instance by the intermediate people’s courts, the high people’s courts or the Supreme People’s Court, and those issued in the first instance by the Supreme People’s Court are final and legally binding judgments, decisions or rulings.

Appeal Period

If the parties are not satisfied with the first-instance judgment or ruling, they may, as of right, appeal to the next higher level court within the specified period. An appeal of a judgment must be filed within 15 days from the date of service of the judgment. An appeal against an adverse ruling must be lodged within 10 days from the date of service. In a foreign-


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related action, the appeal period is 30 days in relation to both a judgment and a ruling if the party filing the appeal has no domicile in China.


Upon the final decision by a court the prevailing party has up to two years from the time when the judgment should be performed to apply for execution of the judgment. The original court of first instance has the responsibility to enforce the judgments it has issued. Upon the prevailing party applying for an execution of judgment, the execution officer of the court will notify the party against whom enforcement is to be made to perform within a stipulated time limit. Failure to perform within this time limit draws measures for compulsory execution.

If the person or property against which execution is enforced is located in an area beyond the territorial jurisdiction of the court which issued the execution order, a local court in that area may be entrusted to enforce the judgment. The entrusted court is required to commence execution within 15 days after receipt of the written request of another court.

If a court fails to carry out enforcement within six months after receiving the application for enforcement, the enforcing party may apply to the next higher-level court for enforcement. Upon review, the next higher-level court may order the court to carry out enforcement within a specified period of time, or decide to enforce the judgment by itself or direct any other people’s court to enforce the judgment.

A court may grant a stay of the execution of the judgment where the prevailing party seeks a postponement of the execution; a non-party presents a reasonable objection to the execution; one of the parties ceases to exist or dies and the other parties must await the appointment of a successor; or in other circumstances which the court deems appropriate to call for a stay.

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A court may also terminate the execution of the judgment. Such a ruling may ensue when the prevailing party withdraws the application for execution; a higher court cancels the legal document upon which the execution is based; the losing party dies and leaves no estate or persons to assume obligations; the losing party being a citizen is unable to make repayment due to poor financial circumstances; or in other situations the court deems appropriate to terminate execution.

A ruling by a court to stay or terminate execution will take effect immediately.

Recognition and Enforcement of Foreign Court Judgments

PRC law provides for the enforcement of foreign court judgments in accordance with international treaties concluded or acceded to by China or the principle of reciprocity, provided they do not violate basic principles of Chinese law, state sovereignty and security or public interest. Reciprocity is interpreted as willingness by a foreign court to enforce a judgment issued by a Chinese people’s court. Previously, reciprocity was very difficult to establish but this changed recently with the release of a decision by the Nanjing Intermediate People’s Court. On 9 December 2016, the court decided to recognize and enforce a Singapore judgment based on the principle of reciprocity. In June 2017, the Intermediate People’s Court of Wuhan, Hubei Province recognised and enforced a judgment of a U.S. court based on the principle of reciprocity, although the U.S. and China have not entered into any international treaty on the mutual recognition and enforcement of judgments. The above decisions suggest that if a foreign court has previously enforced a Chinese judgment or at least has not shown unwillingness to enforce Chinese judgments, there is a greater chance that the court judgment of that foreign nation will be enforced in China. On the other hand, parties seeking to enforce the judgment of a foreign court that has no international treaty or reciprocity relationship with China will need to re-litigate their cases.


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Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters between the PRC and Hong Kong, the PRC and Macao, and the PRC and Taiwan

Hong Kong

On 14 July 2006, the Hong Kong Special Administrative Region (Hong Kong) and the PRC signed an Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and Hong Kong pursuant to Choice of Court Arrangements between Parties Concerned (the Arrangement).

Although Hong Kong and the PRC are one country, they operate under two independent different legal systems. Prior to the arrangement, there was no reliable mechanism for the mutual recognition and enforcement of judgments.

The mutual recognition regime covers final judgments in civil and commercial matters (excluding employment, family and contracts for personal – not business – arrangements). Only money judgments (including costs and interest) are recognizable and enforceable. Non-monetary judgments, such as injunctions, will not come within the mutual recognition regime.

Final judgments in Hong Kong are stipulated to be those from the court of final appeal, the court of appeal, the court of first instance of the high court and the district court. In the PRC, final judgments are those from:

• The Supreme People’s Court;

• any judgment of the first instance made by the high people’s courts, the intermediate people’s courts and the recognized primary people’s courts, and from which no appeal is allowed or with which no appeal has been filed within the stipulated time limit;

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• any judgment of the second instance; and

• any judgment resulting from a retrial by a people’s court at the next higher level under the trial supervision procedure.

The regime requires an exclusive “choice of jurisdiction agreement which must be entered into on or after 1 August 2008.” A “choice of Hong Kong jurisdiction agreement” selects a court in Hong Kong as the exclusive court for determining disputes. Similarly, a “choice of Mainland jurisdiction agreement” designates a court in the PRC as the exclusive court for determining disputes.

The judgment needs to be final and conclusive and must be enforceable in the original jurisdiction.

Judgments recognized under the arrangement will have the same force and effect as a judgment of the enforcing court. There are, however, a number of objections to enforcement, including:

(a) the choice of court agreement pursuant to which the judgment was given is invalid under the relevant Hong Kong or PRC law;

(b) the judgment has been wholly satisfied;

(c) the courts in Hong Kong or the PRC have exclusive jurisdiction over the case according to their respective laws (e.g., Hong Kong courts would have exclusive jurisdiction over contract disputes relating to land in Hong Kong);

(d) the judgment was obtained by fraud;

(e) a separate judgment on the same cause of action between the parties has been given by another court or arbitration body, and the judgment or award has already been recognized by the enforcement court;


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(f) enforcement is contrary to public policy; or

(g) the judgment has been reversed or set aside pursuant to an appeal or retrial under the relevant Hong Kong or PRC law.

Where an appeal against the relevant judgment is filed or a retrial has been ordered, the enforcement court may make orders to suspend the recognition and enforcement process until after the disposal of the appeal or retrial.

Macao

A similar recognition regime has been entered into by the Mainland with Macao – the Arrangement between the Mainland and Macao Special Administrative Region on the Mutual Recognition and Enforcement of Civil and Commercial Judgments. This arrangement is in force and has been effective from 1 April 2006. It differs in some ways from the Hong Kong arrangement. For example, it does not require an exclusive choice of jurisdiction agreement. Unlike the Hong Kong arrangement, it applies to judgments in labor disputes as well as judgments for civil damages resulting from criminal proceedings.

The arrangement between the Mainland and Macao applies retrospectively to any judgment issued after 20 December 1999.

At present, there are no arrangements between Hong Kong and Macao for the mutual recognition of judgments.

Taiwan

Civil judgments made in Taiwan can be recognized and enforced in Mainland by a Chinese court pursuant to the Provisions of the Supreme People’s Court on the Recognition and Enforcement of Civil Judgments Made by Courts of Taiwan Region (effective as of 1 July 2015) (the Provisions).

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The Provisions provide that the people’s court can only refuse to recognize a Taiwan judgment on the following limited grounds:

• the effectiveness of the Taiwan judgment has not been determined;

• the Taiwan judgment was made in a situation where the defendant was absent from the court and had not been legally summoned, or where the defendant lacked the capacity to litigate and has not been given access to appropriate legal assistance;

• the case falls within the exclusive jurisdiction of the people’s courts;

• the two parties to the case have concluded an arbitration agreement;

• the case has already been adjudicated by a people’s court or tribunal, or if by a foreign court or tribunal, has already been recognized by the people’s court; or

• the Taiwan judgment violates PRC fundamental principles or social and public interests.

The recognized Taiwan judgment shall have the same effect as those final judgments rendered by Mainland people’s courts, and the people’s court shall accept the application to enforce such recognized judgments.

Arbitration

Arbitration is a popular alternative to litigation, and China has a well-established structure for resolution of disputes by arbitration. Arbitration in China can be divided into domestic arbitration and foreign or foreign-related arbitration. The rules applicable to them are, in some circumstances, different, such as in the context of setting aside or refusing enforcement of arbitral awards.

Arbitrations in China are conducted by arbitration commissions (Chinese arbitration commissions) established pursuant to the Arbitration Law of


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the People’s Republic of China (the Arbitration Law). More than 200 arbitration commissions have been set up in China and they are located in different provincial capitals and certain other qualified cities.

The China International Economic and Trade Arbitration Commission (CIETAC) and the China Maritime Arbitration Commission (CMAC) are best known internationally because of their historic exclusive license in handling foreign-related disputes. Nowadays, CIETAC deals with both domestic and international commercial disputes whereas CMAC deals primarily with maritime disputes.

Other Chinese arbitration commissions are legally permitted to handle “foreign-related” or international disputes as well as domestic disputes, although they may of their choice restrict the types of disputes which they accept and these are specified in their own arbitration rules.Each arbitration commission has its own arbitration rules and panel of arbitrators. However, many of them do not have or only have a few foreigners appointed to their panels, making them unsuitable for use in international context.

Legislation

Arbitration in China is governed by the Arbitration Law, which came into effect on 1 September 1995. The law, with many peculiarities inconsistent with the UNCITRAL Model Law on Arbitration, is widely considered as out of date and has been put on the agenda of law amendments by the NPC Standing Committee. Some peculiarities of the law include: the arbitration agreement is required to refer to an arbitration institution in order to be valid; an arbitral tribunal or institution is not empowered to grant interim relief to parties; it only covers arbitration conducted by arbitration institutions set up under the Arbitration Law in China, hence leaving the enforceability of arbitral awards made by ad hoc tribunals or tribunals set up by foreign arbitration institutions in China questionable.

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Foreign Lawyers

Foreign lawyers not qualified to practice Chinese law in the PRC are permitted to be engaged as counsel for the parties in arbitration activities conducted in China, but with some restrictions. Where the arbitration case involves the application of Chinese law, foreign lawyers are not allowed to express specific opinions or conclusions on Chinese law as counsel in arbitration activities, and they are required to cooperate with Chinese lawyers on the issue of Chinese law.

CIETAC Arbitration

CIETAC is one of China’s major international arbitration institutions. It is often the preferred choice of the parties to a contract that involves Chinese elements, partly because of Chinese parties’ preference for arbitrations in China. CIETAC has its headquarters in Beijing and sub-commissions in Shenzhen and Shanghai and a number of other major cities. Under the new 2015 Rules, the CIETAC secretariat has been replaced with a new body called the “Arbitration Court” to take over the functions performed by the secretariat, namely the handling of applications for arbitration and the provision of administrative services.

CIETAC Arbitration Rules

CIETAC’s last revised Arbitration Rules came into force on 1 January 2015. Under the new Rules, CIETAC has jurisdiction over

(a) international or foreign-related disputes;

(b) disputes related to Hong Kong Special Administrative Region or the Macao Special Administrative Region or the Taiwan region; and

(c) domestic disputes.


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Arbitration Agreement

Under the Arbitration Law an arbitration agreement may take the form of an arbitration clause contained in a contract, or a separate agreement in writing. It may be entered into before or after a dispute has arisen between the parties. A valid arbitration agreement must contain an expression of the parties’ intent to submit to arbitration, describe the matters to be referred to arbitration, and designate an arbitration commission. The dispute submitted to arbitration must be arbitrable. Certain categories of dispute are not arbitrable according to the Arbitration Law, which means that they cannot be referred to resolution by arbitration. They include marital, adoption, guardianship, support and succession disputes; administrative disputes required by law to be handled by administrative authorities; labor disputes and disputes over farm land contract arrangements CIETAC Rules empower CIETAC to determine the existence or validity of an arbitration agreement. Where necessary, it can delegate this power to the arbitral tribunal. Any objection to the validity of an arbitration agreement or to the jurisdiction of CIETAC over a specific case must be raised in writing before the first oral hearing is held by the arbitral tribunal. If the case is handled on a “documents-only” basis, the objection must be raised no later than the time of submission of the first substantive defense. Under the Arbitration Law, the People’s Court also has jurisdiction to determine the validity of an arbitration agreement. Where one party requests CIETAC to make a ruling on the issue of the validity of an arbitration agreement, but the other makes a parallel application to the people’s court for a ruling on the same issue, the people’s court will have jurisdiction to make a final decision in this competing situation if at the time it accepts the application, CIETAC has not yet made a decision.

Under CIETAC’s new rules, the parties are given the freedom to select their own arbitration rules, but the rules agreed have to be operative and do not contravene the mandatory provisions of the place of arbitration. Subject to this requirement, the parties may adopt a modification of the CIETAC Rules

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to provide for matters not covered by the Rules or they may use other arbitration rules. The new Rules also give the parties the autonomy to choose the place of arbitration, which can be outside China.

This is, however, not applicable to domestic arbitrations according to Chinese law. CIETAC’s previous requirement for appointment of arbitrators from its panel is removed from the new Rules. To make use of this, the parties have to specify their choice in their agreement.

Role of the Courts in Arbitration: Interim Measures

In arbitration, interim measures from the arbitral tribunal or the court may be necessary to preserve evidence for the purposes of the proceedings, or to maintain the status quo of the parties, or to prevent the other party from removing from the jurisdiction assets which may be attached for later enforcement of an award.

In China, arbitration commissions have no power to grant any interim measures to preserve property and evidence. Such power rests with the people’s courts. Parties wishing to apply for interim measures have to make an application to the arbitration commission that conducts the arbitration, which will in turn submit the application to the appropriate people’s court for processing. As described above, the granting of the application is conditional upon the applicant furnishing appropriate security as a means to compensate the other party if it subsequently transpires that the application is wrongful or ought not to have been granted.

Institutional, Ad Hoc Arbitration and Pre-Arbitration

Ad hoc arbitration is not enforceable in China because the Arbitration Law requires a valid arbitration agreement to contain, among other things, the “arbitration commission chosen by the parties.” In practice, many contracts governed by Chinese law frequently contain ad hoc arbitration clauses,


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even contracts drafted by state-owned enterprises. However, the seat of such arbitration is generally outside China.

One unsettled issue concerning Chinese arbitration is whether parties to an arbitration agreement can choose a foreign arbitration institution with the seat of arbitration in China. It was argued by some that a foreign arbitration institution is not registered with the Bureau of Justice in China, and thus is not a qualified “arbitration commission” as stated under the Arbitration Law. But in 2014, the Supreme People’s Court published two decisions upholding the validity of arbitration agreements that subjected disputes to International Chamber of Commerce (ICC) arbitration to be administered in Shanghai and Beijing, respectively. Following publication of these two decisions, the HKIAC, ICC and Singapore International Arbitration Centre (SIAC) all opened representative offices in Shanghai Free Trade Zone in November 2015, February 2016, and March 2016, respectively.

While an arbitration agreement choosing a foreign arbitration institution to administer the arbitration in China is considered valid, the Supreme People’s Court did not address the issue of whether the resulting award is enforceable or not. According to the Civil Procedure Law, the nationality of an arbitral award is determined by the location of the head office of the arbitration institution. An award made by a foreign institution is classified as a foreign award and therefore, should be enforced pursuant to the New York Convention. However, according to the reciprocity reservation made by China when acceding to the New York Convention, Chinese courts will recognize and enforce only those arbitral awards that are made in the territory of another contracting state. In other words, the New York Convention may not be applicable when seeking to enforce a foreign award rendered in China. There is a people’s court case which held that such an award is not regarded as a domestic award either under the PRC law, but is nevertheless enforceable under the New York Convention under the second limb of Article I(1) of the New York Convention. Some commentators are of the view that the case was wrongly decided, but

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there are also opposing views. The case has no binding effect, and it remains to be seen how this important issue will develop.

Another recent development in China relates to pre-arbitration. With the development of internet finance, some internet loan platforms introduce arbitration before the real disputes occur. The borrowers are usually required to sign a “pre-arbitration” agreement at the time of entering into the loan agreement. The parties then apply to the arbitration institution to render a mediation agreement and/or an arbitral award prepared on the basis of the mediation agreement before loan is drawn. If the borrower fails to perform the loan agreement, the platform will directly apply to the PRC court for enforcement of the arbitral award. As the prior arbitration deprives the borrowers of some fundamental procedural rights, such as the right to a fair and impartial hearing, the right to provide evidence, the right to defend itself, etc, the SPC issued the Official Reply on Issues Concerning the Application of Law for the Case-filing and Enforcement for “Prior Arbitration” Awards or Mediation Documents on June 12, 2018. Pursuant to the reply, the people’s court shall not accept any application filed by a party to the online lending contract for enforcing an arbitral award or a mediation agreement rendered by the arbitration institution before the dispute arises; in the case where an application has been accepted, the people’s court shall rule to dismiss the application for enforcement.


Arbitral awards can be divided into four categories for the purpose of enforcement in China:

(a) awards made in foreign countries which are enforceable pursuant to the New York Convention;

(b) awards made in foreign countries which are not enforceable pursuant to the New York Convention;


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(c) awards made by PRC arbitration commissions that involve a foreign element (foreign-related awards); and

(d) awards made by PRC arbitration commissions which do not involve any foreign element (domestic awards).

In respect of awards made by foreign arbitration institutions outside China that require recognition and enforcement in China. These awards are usually enforced in China pursuant to the New York Convention.

An award made in Hong Kong is enforceable in China pursuant to the Memorandum of Understanding Concerning the Mutual Enforcement of Arbitral Awards between the Mainland and Hong Kong (MOU) issued by the Supreme People’s Court on 24 January 2000.

The court having jurisdiction over the enforcement of domestic awards will generally be the primary people’s court at the place where the person subject to enforcement (paying party) is domiciled (and if the paying party’s domicile is different from his place of residence, the primary people’s court in the latter place will have jurisdiction) or where the paying party’s assets to be enforced are located. This is subject to different stipulations by the relevant high people’s court. In respect of foreign awards and foreign-related awards, the court having jurisdiction will in most cases be the intermediate people’s court rather than the primary people’s court.

To apply for enforcement of an arbitral award, a written application has to be submitted. It should state the names and addresses of the parties; the matters that require enforcement and the reasons in support thereof, facts and evidence that show the paying party’s refusal to perform the award; and information as to the financial status of the paying party and his assets available for enforcement. The application shall be accompanied by the original arbitral award, the original arbitration agreement or the contract containing the arbitration agreement and appropriate fees.

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Certified copies are acceptable where the original documents cannot be provided, and Chinese translations have to be provided where the documents submitted are in language other than Chinese.

An application for enforcement must be submitted to the relevant people’s court within two years from the time when the award should be performed.

Power to Review – Setting Aside and Refusing Enforcement

An arbitration award is final and binding on the parties and may be set aside or refused enforcement in limited circumstances. The Arbitration Law stipulates different grounds for setting aside and refusing enforcement of domestic and foreign-related arbitral awards. Concerning foreign-related awards, the people’s court upon application by a party for setting aside or enforcing an award may review the award, and this will be of a procedural nature. This means that the people’s court will not examine the merits of the arbitral award. Generally, the grounds of setting aside or refusing enforcement of foreign-related awards are where

(a) the parties had neither included an arbitration clause in their contract nor subsequently concluded a written arbitration agreement;

(b) the party against whom enforcement is sought was not notified to appoint an arbitrator or to take part in the arbitration proceedings, or was unable to present its case for reasons for which they were not responsible;

(c) the formation of the arbitration tribunal or the arbitration procedure did not conform to the applicable rules of arbitration;

(d) the matters decided in the award exceed the scope of the arbitration agreement or scope of reference or are beyond the authority of the arbitration institution; or


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(e) the award violates public interest.

There are also a number of other circumstances in which domestic awards may be set aside or refused enforcement. They include circumstances where the evidence relied upon in the arbitral award is forged, the other party conceals important evidence that may impact the impartiality of the award, and where one or several arbitrators concerned committed embezzlement, accepted bribes or commits other forms of malpractice. On March 1, 2018, the SPC issued the Provisions on Issues related to Enforcement of Arbitral Awards by the People’s Courts, which is applicable to the enforcement of domestic arbitral awards. The provisions clarify the procedural and substantive criteria whereby a third party (non-party to the arbitration proceedings and arbitral award) can apply for non-enforcement of an arbitral award or mediation-based arbitral award to the court. The provisions also clarify a few grounds for non-enforcement of domestic awards as provided in the PRC Civil Procedure Law.

If a people’s court intends to set aside or not to enforce a foreign or foreign-related arbitral award, it is required to go through an internal reporting procedure which is generally perceived to be a pro-enforcement mechanism. It has to first refer the matter for review to the appropriate high people’s court. If the high people’s court rules in favor of dismissing the application for setting aside or for not enforcing the award, the matter will be remitted back to the originating court, which shall dismiss the setting aside application or enforce the award accordingly. On the other hand, if the high people’s court agrees that the award should be set aside or refused enforcement, it must report its opinions up to the Supreme People’s Court for comment and the people’s court will not make a formal ruling until a reply from the Supreme People’s Court is received. The process can be lengthy. In general, people’s courts are inclined to uphold enforcement particularly in the major commercial centers such as Beijing, Shanghai, Guangzhou and Shenzhen. It is worth mentioning that the reporting procedure which in the past was available to only foreign-related

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and foreign arbitration, has now been extended to domestic arbitration as well. On 1 January 2018, the SPC issued two judicial interpretations, namely, the Provisions of the Supreme People’s Court on Certain Issues Related to the Conduct of Judicial Review of Arbitral Cases and the Provisions of the Supreme People’s Court on Certain Issues Related to the Reporting System of Arbitral Cases. According to the above judicial interpretations, if the Intermediate People’s Court intends to invalidate an arbitral agreement, set aside an arbitral award, or refuse enforcement in a domestic judicial review case, it shall report to and obtain approval from the high People’s Court; in cases where the parties reside in different provinces or if the proposed decision to refuse enforcement or set aside a domestic arbitral award is made on the ground of “violating the public interests”, the high People’s Court should obtain the final approval of the SPC if it agrees with the decision proposed by the Intermediate Court. These measures aim to ensure judicial consistency across PRC courts and give parties located in China increased options for dispute resolution.

Conciliation and other Remedies

A characteristic of arbitration in the PRC is the close relationship between conciliation and arbitration in the dispute resolution process.

CIETAC Rules provide that where both parties have the desire for conciliation, the arbitral tribunal may conciliate the case during the course of the arbitration proceedings. If one party so desires, the arbitral tribunal may, upon request, approach the other party to see if he is agreeable to conciliation. With the agreement, the arbitral tribunal will proceed to conduct conciliation.

If conciliation does not result in an agreement, the arbitral tribunal will continue with the arbitration and render an award. The parties are prohibited from using any statements made by the parties during the conciliation as grounds for any claim, defense or counterclaim in later arbitral or judicial proceedings. However, the interchanging role of the


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arbitrator in the conciliation and arbitration processes means that he will be privy to the confidential or without prejudice information or documents produced for the conciliation process. This may have certain psychological impact on the arbitrator’s perception of the case. Therefore, the latest CIETAC Rules provide the parties with a right to opt out, i.e. where the parties wish to conciliate their dispute but do not wish to have conciliation conducted by the arbitral tribunal, CIETAC may, with the consents of both parties, assist the parties to conciliate the dispute in a manner and procedure it considers appropriate. The CIETAC Rules also provide that where the parties have reached a settlement through conciliation with or without the involvement of CIETAC, the parties may make use of the arbitration procedure and request the arbitral tribunal to render an arbitral award in accordance with the terms of the settlement agreement. The award, once rendered, will have the same effect as an ordinary arbitral award and may be enforced accordingly.

Administrative Remedies

Administrative remedies can also often provide an efficient and effective means of resolving disputes in China. Depending on the type of dispute in question, there are a number of government departments and organizations that can provide assistance. Primary among these is the State Administration for Industry and Commerce (SAIC) and its local offices which are empowered to investigate and impose sanctions in a number of areas, including cases of trademark infringement and unfair competition.

Arbitration of Investment Disputes

China has entered into a number of bilateral treaties which are designed to encourage and protect foreign investment. Many of these treaties provide for the resolution of investment disputes by arbitration. In addition, China is a party to the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of Other States.

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Baker McKenzie Fenxun Hong Kong/Beijing

(Global) Dispute Resolution Practice

BakerMcKenzie Fenxun has been involved in the dispute resolution process for numerous complex commercial disputes involving Chinese and foreign parties both inside and outside China. Services that our Dispute Resolution and China Practice Group can provide include “dispute planning” – advising on the options available should a dispute arise – as well as assisting in drafting appropriate contract clauses, and prosecuting and defending claims in a variety of jurisdictions. Our Dispute Resolution and China Practice lawyers have extensive experience with arbitration and litigation proceedings in China and can also help resolve business disputes through ADR techniques.

The China office Dispute Resolution Partners include

Contacts

Anthony Poon Tel: +852 2846 1919 [email protected]

Cynthia Tang Tel: +852 2846 1810 [email protected]

Gary Seib Tel: +852 2846 2112 [email protected]

Simon Hui Tel: +86 21 6105 5996 [email protected]

Honghuan Liu Tel: +86 10 5649 6018 [email protected]

Haifeng Li Tel: +86 10 65353867 [email protected]








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Contacts

Zhou Xi Tel: +86 10 5649 6019 [email protected]



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Philippines

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Legal System

The Philippine legal system is a blend of the Roman civil law and the Anglo-American common-law systems.

The civil law system operates in the areas of family relations, property, succession, contracts and criminal law while statutes and principles of common-law origin are evident in such fields as constitutional law, procedure, corporation law, negotiable instruments, taxation, insurance, labor relations and banking laws. Islamic personal law is recognized and operative in some parts of Mindanao with the establishment of Shari’ah courts and the Shari’ah Bar.

The main sources of Philippine law are the Constitution, statutes, treaties and conventions, and judicial decisions. The Constitution is the fundamental law of the land and as such, it is authority of the highest order against which no law can prevail. Every official action to be valid must conform to it. On the other hand, statutes are enactments passed by the Philippine legislature. Statutes also include presidential decrees issued during the martial law period, and executive orders issued by the president under the 1986 Provision “Freedom” Constitution.

Having the same force of authority as legislative enactments are treaties entered into by the Philippines with other states. Philippine law is also derived from case decisions because the Civil Code provides that “judicial decisions applying or interpreting the laws or the Constitution shall form part of the legal system of the Philippines.” Only decisions of the Supreme Court, however, establish jurisprudence and are binding on all other courts.

The judicial system of the Philippines consists of a hierarchy of courts with the Supreme Court at the apex. The Congress has the power to define, prescribe and apportion the jurisdiction of the various courts but may not deprive the Supreme Court of its jurisdiction over certain cases granted in the Constitution.


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There is no trial by jury in the Philippines. The judge determines all questions of law and fact of a case brought before him. The Rules of Court govern the pleading, practice and procedure before the courts.

Courts

Regular Courts

First-Level Courts

At the first level are the metropolitan trial courts, the municipal trial courts in cities or municipalities, and municipal circuit trial courts. Metropolitan trial courts are stationed by law in the cities and municipalities making up the metropolitan areas such as Metro Manila, Cebu and Davao. In cities outside the metropolitan areas, courts of the first level are called municipal trial courts. There is a municipal trial court in every municipality, and a municipal circuit trial court presides over two or more municipalities grouped into a circuit.

Courts of the first level are essentially trial courts. They try and decide only cases specified by law. These courts have jurisdiction over cases of ejectment, recovery of personal property with a value of not more than PHP300,000 (or PHP400,000 in Metro Manila), exclusive of interest, damages of whatever kind, attorney’s fees, litigation expenses and costs, the amount of which must be specifically alleged. These courts also have delegated jurisdiction over cadastral or land registration cases covering lots where there is no controversy or opposition, or contested lots where the value does not exceed PHP100,000.

First-level trial courts have also been given jurisdiction over small claims cases, which are defined as actions for payment of money where the value of the claim does not exceed three hundred thousand pesos (PHP300,000), exclusive of interest and costs. The action is commenced by filing a statement of claim, in a standard form issued by the Supreme Court, together with supporting affidavits and documents. No formal pleading is

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necessary. The defendant, once summoned, is required to file a response within 10 days from receipt of the summons. The parties must appear personally, and lawyers are not allowed to appear unless they are the plaintiffs or defendants. At the hearing, the judge is required to exert efforts to bring the parties to an amicable settlement. If such efforts fail, the judge shall proceed to hear the case in a single day and issue a decision within 24 hours from the termination of the hearing. The decision is final and unappealable.

Second-Level Courts

At the second level are Regional Trial Courts. The Philippines is divided into 13 regions and in each region there is a Regional Trial Court that may have one or more branches.

Like the first-level courts, Regional Trial Courts are trial courts. They are courts of general jurisdiction. They try and decide not only the particular classes or kinds of cases assigned to them by law, but also those which are not otherwise within the exclusive jurisdiction of courts of the first level or any other tribunal.

Regional Trial Courts also exercise appellate jurisdiction over decisions rendered by the first-level courts.

Regional Trial Courts have jurisdiction over cases the subject matter of which is incapable of pecuniary estimation, or those involving title to or possession of real property where the assessed value of the property exceeds PHP20,000 (or PHP50,000 in Metro Manila) except cases of ejectment; all actions in admiralty and maritime jurisdiction where the demand or claim exceeds PHP300,000 (or PHP400,000 in Metro Manila); and those where the demand, exclusive of interest, damages of whatever kind, attorney’s fees, litigation expenses, and costs, or the value of the personal property in controversy exceeds PHP300,000 (or PHP400,000 in Metro Manila).


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Court of Appeals

At the third level is the Court of Appeals. It is essentially an appellate court. While it exercises exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts, the Court of Appeals principally exercises exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution. The Court of Appeals may review questions of fact or mixed questions of fact and law.

Appeal of decisions rendered by the Regional Trial Courts in the exercise of the latter’s original jurisdiction is a matter of right. But appeal of decisions rendered by the Regional Trial Courts in the exercise of appellate jurisdiction is a matter of discretion.

Supreme Court

The Supreme Court is the highest court of the land. It is the court of last resort, from whose judgment no appeal lies. It exercises appellate jurisdiction over cases decided by the Court of Appeals and the Regional Trial Courts. As a general rule, appeals to the Supreme Court are not a matter of right and only questions of law may be raised in such appeals. The only exception is found in criminal cases where the penalty of death, reclusion perpetua, or life imprisonment has been imposed by the lower courts. Such cases are subject to automatic review by the Supreme Court and both issues of fact and law may be raised.

Special Courts

Court of Tax Appeals

The Court of Tax Appeals is a special court created pursuant to Republic Act No. 1125, as amended by Republic Act No. 9282.

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The Court of Tax Appeals exercises exclusive original jurisdiction over all criminal offenses arising from violations of the National Internal Revenue Code, the Tariff and Customs Code and other laws administered by the Bureau of Internal Revenue or the Bureau of Customs, where the principal amount of taxes and fees claimed, exclusive of charges and penalties, is at least PHP1,000,000. It also exercises original jurisdiction in cases involving final and executory assessments for taxes, fees, charges and penalties, where the principal amount of taxes and fees claimed, exclusive of charges and penalties, is at least PHP1,000,000. Cases involving criminal offenses under tax and customs laws and final and executory assessments, where the principal amount claimed is less than PHP1,000,000, shall be under the jurisdiction of the regular courts.

The Court of Tax Appeals exercises exclusive appellate jurisdiction, among others, over the following:

(a) decisions and inaction of the BIR Commissioner in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue;

(b) decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or other money charges, seizure, detention or release of property affected, fines, forfeitures or other penalties in relation thereto, or other matters arising under the Customs Law or other laws administered by the Bureau of Customs;

(c) appeals from the judgments, resolutions or orders of the Regional Trial Courts in tax collection cases originally decided by them, in their respective territorial jurisdiction; and

(d) petitions for review of the judgments, resolutions or orders of the Regional Trial Courts in the exercise of their appellate jurisdiction over


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tax collection cases originally decided by the Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts, in their respective jurisdiction.

Sandiganbayan

The Sandiganbayan is a special court that exercises jurisdiction over criminal and civil cases involving graft and corrupt practices and such other offenses committed by public officers and employees in relation to their office.

In particular, the Sandiganbayan exercises exclusive original jurisdiction in all cases, where one or more of the accused are public officers and employees classified as Grade “27” or higher under the Compensation and Position Classification Act of 1989, for

(a) violations of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and Corrupt Practices Act;

(b) Republic Act No. 1379 (or the law providing forfeiture of unlawfully acquired property by public officers in favor of the State);

(c) direct bribery, indirect bribery or corruption of public officials under Articles 210 to 212 of the Revised Penal Code; and

(d) other offenses or felonies committed by the public officials and employees in relation to their office.

The Sandiganbayan also exercises concurrent jurisdiction (with the Supreme Court, the Court of Appeals and the Regional Trial Court) over petitions for a writ of amparo and petitions for a writ of habeas data.

Legal Profession

Only persons duly admitted as a member of the bar, and who are in good and regular standing, are entitled to practice law. The 1987 Constitution

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grants the Supreme Court the power to promulgate rules concerning admission to the practice of law and the integrated bar.

Bar examinations are conducted annually by the Committee of Bar Examiners appointed by the Supreme Court. An applicant must obtain an average of 75 percent in all subjects, without falling below 50 percent in any subject. The clerk of the Supreme Court keeps a Roll of Attorneys admitted to practice.

The Integrated Bar of the Philippines (IBP) was created by the Supreme Court through a resolution in 1973, and was constituted into a corporate body by a presidential decree in the same year. Membership in the IBP is compulsory, and default in the payment of annual dues is a ground for removal of the name of the delinquent member from the Roll of Attorneys.

As part of its power to regulate the practice of law, the Supreme Court can discipline, suspend or disbar any unfit and unworthy member of the bar, reinstate any disbarred or suspended lawyer, punish for contempt any person for unauthorized practice of law, and in general exercise overall supervision of the legal profession.



An action is commenced by the filing of a complaint containing a statement of the plaintiff’s cause or causes of action. The complaint is required to contain a certification against forum shopping to the effect that the plaintiff has not commenced any action or filed any claim involving the same issue(s) in any court, tribunal or quasi-judicial agency and to the best of his knowledge, no such other action or claim is pending therein. Failure to comply with this requirement is a ground for dismissal of the case. The filing of the complaint must also be accompanied by the payment of the prescribed docket fee, otherwise the trial court will not acquire jurisdiction over the case.


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Summons

Upon the filing of the complaint and the payment of the requisite legal fees, the clerk of court will issue the corresponding summons to the defendant, together with a copy of the complaint. Jurisdiction cannot be acquired over the defendant without a proper service of summons, unless the defendant voluntarily submits to the jurisdiction of the court.

When the defendant is a foreign private juridical entity which has transacted business in the Philippines, service may be made on its resident agent designated in accordance with law for that purpose, or, if there be no such agent, on the government official designated by law to that effect, or on any of its officers or agents within the Philippines.

If the foreign private juridical entity is not registered in the Philippines or has no resident agent, service may, with leave of court, be effected out of the Philippines through any of the following means:

(a) By personal service coursed through the appropriate court in the foreign country with the assistance of the Department of Foreign Affairs;

(b) By publication once in a newspaper of general circulation in the country where the defendant may be found and by serving a copy of the summons and the court order by registered mail at the last known address of the defendant;

(c) By facsimile or any recognized electronic means that could generate proof of service; or

(d) By such other means as the court may in its discretion direct.

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Motion to Dismiss

Within 15 days from the service of summons, the defendant may file either an answer or motion to dismiss. A motion to dismiss may be filed based on one or more of the following grounds:

• lack of jurisdiction over the person or the subject matter;

• improper venue;

• plaintiff’s lack of legal capacity to sue;

• pendency of another action between the parties for the same cause (litis pendentia), or the cause of action is barred by a prior judgment (res judicata);

• prescription;

• failure to state a cause of action;

• claim or demand has been paid, waived, abandoned or otherwise extinguished;

• claim is unenforceable under the Statute of Frauds; and

• non-compliance with a condition precedent for filing a claim.

Defenses or objections not pleaded in either a motion to dismiss or in the answer are deemed waived except for the following: (a) lack of jurisdiction over the subject matter; (b) litis pendentia; (c) res judicata; and (d) prescription of the action.

An order granting a motion to dismiss based on res judicata, prescription, statute of frauds, and payment, waiver, abandonment or extinction of the claim or demand shall bar the refiling of the same action or claim. If the motion to dismiss is denied, the movant shall file his answer within the


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balance of the period prescribed by the rules, but in no case less than five days.

Answer

An answer is a pleading wherein a defending party sets forth his defenses. The defendant should, as a general rule, file his answer within 15 days after service of summons. The granting of additional time to the defendant within which to file an answer is a matter largely addressed to the sound discretion of the trial court.

If the defendant fails to file his answer within the reglementary period, the court may issue an order of default upon motion of the plaintiff. The court shall then proceed to render judgment as the pleading may warrant, unless the court in its discretion requires the claimant to submit evidence. A judgment rendered against a party in default shall not exceed the amount or be different in kind from that prayed for. The court may not award unliquidated damages.

The order of default may be set aside, upon motion filed by the party declared in default at any time after notice and before judgment, by a showing that the failure to answer was due to fraud, accident, mistake or excusable negligence and that the defaulting party has a meritorious defense.

Judgment on the Pleadings

Where an answer fails to tender an issue, or otherwise admits the material allegations of the adverse party’s pleading, the court may, on motion of that party, direct judgment on such pleading.

Summary Judgment

A summary judgment, upon motion of either party, is granted by the court for an expeditious settlement of the case if it appears from the pleadings,

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affidavits, depositions and admissions that there are no important questions or issues of fact involved and that the movant is entitled to a judgment as a matter of law. Summary judgment may be rendered upon the whole case or only on parts thereof where some facts appear to be without substantial controversy.

Pretrial

After the issues have been joined through the filing of the pleadings, the case is set for pretrial conference for the purpose of exploring all appropriate means that may aid in the early disposition of the case. Pretrial conference is mandatory. At least three days before the pretrial conference, the parties are required to file with the court and serve on the adverse party their respective pretrial briefs that must contain the matters enumerated under the Rules of Court.

It is the duty of the parties and their counsel to appear at the pretrial conference. The failure of the plaintiff to appear at the pretrial conference shall be a cause for the dismissal of the action with prejudice, unless otherwise ordered by the court. A similar failure on the part of the defendant to appear shall be a cause to allow the plaintiff to present his evidence ex parte and the court to render judgment on the basis thereof.

Failure to file the pretrial brief shall have the same effect as failure to appear at the pretrial conference.

Discovery

It is the duty of each contending party to lay before the court all the material and relevant facts known to him, suppressing or concealing nothing, nor preventing another party from also presenting all the facts within his knowledge. As only the ultimate facts are set forth in pleadings, evidentiary matters may be inquired into and learned by the parties before the trial through the deposition-discovery mechanism.


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Refusal to comply with an order for discovery may result in the following:

• Refusal to allow the disobedient party to support or oppose designated claims or defenses;

• Prohibition on the disobedient party from introducing in evidence designated documents or things or items of testimony;

• Striking out of pleadings or parts thereof;

• Dismissal of the action; and

• Rendition of a judgment by default against the disobedient party.

Despite the several provisions on discovery (e.g., depositions, interrogatories, request for admissions), the use of the same is still not prevalent in the Philippine legal system.

Demurrer to Evidence

After the plaintiff has completed the presentation of his evidence, the defendant may move for dismissal on grounds that upon the facts and the law the plaintiff has shown no right to relief. If his motion is denied, he shall have the right to present evidence. If the motion is granted but on appeal, the order of dismissal is reversed; he shall be deemed to have waived the right to present evidence.

Revised Guidelines for Continuous Trial of Criminal Cases

Effective 1 September 2017, the Revised Guidelines for Continuous Trial of Criminal Cases shall apply to all newly-filed criminal cases and to pending criminal cases with respect to the remainder of the proceedings.

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Among the salient features of the Guidelines are:

• The prohibition against certain motions such as motions for (a) judicial determination of probable cause; and (b) preliminary investigation or reinvestigation.

• Prohibition against motions for postponement except for acts of God, force majeure or physical inability of the witness to appear and testify.

• Arraignment and pre-trial shall be held on the same date.

• The prosecution and the defense have 180 days from arraignment and pre-trial to present their respective evidence.

• The decision shall be promulgated within 90 days from the date the case is submitted for decision.

Special Rules regarding Cybercrime Cases

Under the Rule on Cybercrime Warrants, a court may issue 4 types of warrants in relation to cybercrime cases, namely: (1) Warrant to Disclose Computer Data; (2) Warrant to Intercept Computer Data; (3) Warrant to Search, Seize and Examine Computer Data; and (4) Warrant to Examine Computer Data. These warrants can only be obtained by law enforcement agencies (i.e., the Philippine National Police (“PNP”) or the National Bureau of Investigation (“NBI”)) from Regional Trial Courts specially designated to handle cybercrime cases. Thus, private complainants will need to coordinate with such agencies if such warrants are to be obtained.

The Department of Justice has also issued an advisory opinion clarifying that cybercrime complaints can be filed directly with the prosecutor’s office, without need of prior investigation by the NBI-Cybercrime Division or the PNP Anti-Cybercrime Group.


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Rule on Issuance of the Precautionary Hold Departure Order

The Supreme Court has recently issued the Rules on Precautionary Hold Departure Order. Effective 16 September 2018, an ex parte hold departure order may issued against a person suspected of a crime where the minimum penalty prescribed by law is at least six (6) years and one (1) day, or against a foreigner regardless of the imposable penalty.

Remedies

Special Civil Actions

Certiorari

The writ of certiorari may be availed of only if there is no appeal or any plain, speedy or adequate remedy in the ordinary course of law from the acts of the respondent. It is intended to correct a discretionary act performed without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction. It will lie only against a respondent exercising judicial or quasi judicial function.

An original action for certiorari is an independent action and does not interrupt the course of the principal action nor the running of the reglementary periods involved in the proceedings. It is commenced through a verified petition, accompanied by a certified true copy of the judgment, order or resolution complained of, pertinent pleadings and documents, and a sworn certification of non-forum shopping.

Certiorari is not a remedy for errors of judgment, which are correctible by appeal. It is not a substitute for appeal, especially when the remedy was lost through the fault of the party. But before certiorari may be availed of, the petitioner must generally have filed a motion for reconsideration by the lower court of the act complained of.

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Questions of fact cannot be raised in an original action for certiorari. Only established and admitted facts can be considered.

Prohibition

Prohibition is a preventive remedy. It is intended to prevent the commission or carrying out of a discretionary or ministerial act by a respondent who exercises either judicial or non-judicial, but not legislative, functions. Like in certiorari, respondent must have acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction.

Generally, prohibition does not lie to restrain an act that is already fait accompli. To prevent respondent from performing the act sought to be prevented during the pendency of the proceedings for the writ, the petitioner should obtain a restraining order or a writ of preliminary injunction.

In order that prohibition will lie against an executive officer, the petitioner must first exhaust all administrative remedies, as prohibition is available only when there are no other plain, speedy and adequate remedies in the ordinary course of law. Prohibition is the remedy where a motion to dismiss is improperly denied.

The proceedings for issuance of the writ of prohibition is commenced through a verified petition, accompanied by a certified true copy of the judgment, order or resolution complained of, pertinent pleadings and documents, and a sworn certification of non-forum shopping.

Mandamus

Mandamus will lie to compel the performance of a ministerial, not discretionary, duty. Petitioner must show that he has a well-defined, clear and certain right to the grant thereof. It is available against respondents who exercise judicial and/or non-judicial functions.


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The general rule is that in the performance of an official duty or act involving discretion, mandamus can only direct the official to act, but not to act one way or another. An exception to this is where there has been gross abuse of discretion, manifest injustice, or palpable excess of authority, in which case the respondent can be ordered to act in a particular manner.

In a special civil action for mandamus, the court has the power to award damages prayed for as an incident or the result of the respondent’s wrongful act in failing and refusing to do the act required to be done.

A petition for mandamus is premature if there are administrative remedies available to the petitioner. It is commenced by verified petition.

Petitions for certiorari, prohibition and mandamus may be filed not later than 60 days from notice of the order or resolution to be assailed, in the Supreme Court. Or, if the petitions relate to the acts or omissions of a lower court or a corporation, board, officer or person, they may be filed in the Regional Trial Court exercising jurisdiction over the territorial area. They may also be filed in the Court of Appeals whether or not the same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate jurisdiction. If the petitions involve the acts or omissions of a quasi-judicial agency, they shall be filed in the Court of Appeals.

Provisional Remedies

The following are the provisional remedies provided in the Rules of Court: preliminary attachment, preliminary injunction, receivership, replevin and support pendente lite.

Preliminary Attachment

A plaintiff or any proper party may, at the commencement of the action or at any time before entry of judgment, have the property of the adverse party attached as security for the satisfaction of any judgment that may

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be recovered in specific cases. A writ of preliminary attachment may be sought and issued ex parte. The only requisites for the issuance of the writ are the affidavit and bond of the applicant. The levy on attachment may not be made unless preceded or contemporaneously accompanied by service of summons together with a copy of the complaint, application for attachment, affidavit and bond of the applicant, and the writ of attachment, except in certain circumstances.

Preliminary Injunction

Injunction is a judicial writ, process or proceeding whereby a party is ordered to do or refrain from doing a particular act. It may be an action in itself, brought specifically to restrain or command the performance of an act, or it may just be a provisional remedy for and as an incident in the main action that may be for other reliefs. Its primary purpose is to preserve the status quo by restraining action or interference or by furnishing preventive relief.

Injunction may be preliminary or final. Preliminary injunction is an order granted at any stage of an action prior to judgment or final order. A final injunction is one issued in the judgment in the case permanently restraining the defendant or making the preliminary injunction permanent.

Injunction may also be classified as preventive or mandatory. A preventive injunction requires a person to refrain from doing a particular act, while a mandatory injunction requires the performance of a particular act.

A preliminary injunction may be granted by the judge of any court where the action is pending, or by a justice of the Court of Appeals, or of the Supreme Court if pending therein. The application must be verified, and must show facts entitling the applicant to the relief. Unless exempted by the court, the applicant must file a bond executed to the party or person enjoined in an amount to be fixed by the court. Notice and hearing are required. Notice to the adverse party must be preceded or


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contemporaneously accompanied by a service of summons, together with a copy of the complaint or initiatory pleading and the applicant’s affidavit and bond.

Receivership

Receivership, like injunction, may be the principal action itself or just an ancillary remedy. It involves the appointment of a receiver by the court in behalf of all parties to an action for the purpose of preserving the property involved in the suit and to protect the rights of all the parties under the direction of the court.

Receivership proceeding is commenced by filing a verified application in the court where the action is pending, the Court of Appeals or the Supreme Court. Unlike other provisional remedies that can be availed of only before final judgment, receivership may be resorted to even after the judgment has become final and executory. It can be availed of to aid execution or to carry the judgment into effect.

Replevin

The provisional remedy of replevin is available where the principal purpose of the action is to recover the possession of personal property. It must be applied for at the commencement of the action or at any time before the answer. It can be sought only where the defendant is in actual or constructive possession of the personalty, where the personalty is capable of manual delivery. The applicant must file an affidavit and bond.

Support Pendente Lite

A verified application for support pendente lite may be filed by any party at the commencement of the proper action or proceeding, or at any time prior to the judgment or order. The application must state the grounds for the claim and the financial conditions of both parties. It must be accompanied by affidavits, depositions or other authentic supporting

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documents. The adverse party is given the right to file a comment. Hearing is required.

Costs

Generally, costs are allowed to the prevailing party, but the court may, for special reasons adjudge that either party pay the costs, or that the same be divided equitably. Attorney’s fees and expenses of litigation, other than judicial costs, are not recoverable in the absence of stipulation, except in specific cases enumerated in the Civil Code.

Upon filing of the complaint or initiatory pleading, the fees prescribed in the Rules of Court must be paid in full. The amount of fees payable vary according to the remedy availed of, relief prayed for and the value of the subject matter of the action. In addition to filing fees, the party requesting the process of any court must pay the sheriff’s expenses in serving or executing the process or safeguarding the property levied upon.

Appeals

Amendment of Judgment

Courts have the inherent power to amend their judgments, to make them conformable to the applicable law provided that said judgments have not yet attained finality. When a final judgment becomes executory, it may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law. The only recognized exceptions are the correction of clerical errors or the making of so-called nunc pro tunc entries, which cause no prejudice to any party, and, of course, where the judgment is void.

Motion for New Trial

The aggrieved party may seasonably move for a new trial to set aside the judgment based on the following grounds: (1) fraud, accident, mistake or


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excusable negligence; or (2) newly discovered evidence. If the motion is granted, the original judgment is vacated and the action shall stand for trial de novo. The recorded evidence taken upon the former trial, in so far as the same is material and competent to establish the issues, shall be used at the new trial without retaking the same.

Motion for Reconsideration

The aggrieved party may seasonably move for reconsideration on the following grounds: (1) damages awarded are excessive; (2) evidence is insufficient to justify the decision or final order; or (3) the decision or final order is contrary to law. As a general rule, a second motion for reconsideration is a prohibited pleading.

Relief from Judgment

A petition for relief from judgment may be filed on the grounds of fraud, accident, mistake or excusable negligence. Such petition must be filed within 60 days after the petitioner learns of the judgment and not more than six months after such judgment was entered. If granted, the judgment is set aside and the case shall stand as if the judgment had never been ordered. The court shall then proceed to hear and determine the case.

Annulment of Judgment

When ordinary remedies are no longer available through no fault of the petitioner, he may file an action for annulment of judgment based only on the grounds of extrinsic fraud and lack of jurisdiction. If based on extrinsic fraud, the action must be filed within four years from its discovery; if based on lack of jurisdiction, before it is barred by laches or estoppel. A judgment of annulment shall set aside the questioned judgment or final order or resolution without prejudice to the original action being re-filed in the proper court. However, when the judgment is set aside on grounds of extrinsic fraud, the court may order the trial court to try the case.

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Appeal

Only judgments that finally dispose of the merits of the case may be the subject of appeal. As a general rule, an interlocutory order may only be assigned as error in the appeal from the final judgment. However, if the interlocutory order was rendered without or in excess of jurisdiction or with grave abuse of discretion, the petitioner may avail of the remedy of certiorari, prohibition or mandamus, depending on the facts of the case.

From the First-Level Courts

Appeals from the courts of the first level can be taken only to the proper Regional Trial Courts. The appeal is a matter of right and made by filing a notice of appeal within 15 days after notice to the appellant of the judgment or final order appealed from. Where a record on appeal is required, the appellant shall file a notice of appeal and a record on appeal within 30 days after notice of the judgment or final order.

From the Second-Level Courts

The mode of appeal from decisions rendered by the Regional Trial Court depends on several factors (i.e., whether the judgment was rendered in its original or appellate jurisdiction and whether the appeal involves questions of fact and/or law). When the Regional Trial Court renders a decision in the exercise of its original jurisdiction, the appeal normally goes to the Court of Appeals. The appeal is a matter of right and questions of fact as well as of law may be raised. The appeal is made by the filing of a notice of appeal with the Regional Trial Court within 15 days from notice of the judgment or final order appealed from. In the event that a losing party files a motion for new trial or reconsideration within the 15-day period for filing of appeal, the said party has 15 days from receipt of a denial of the motion within which to file a notice of appeal. No motion for extension of time to file a motion for new trial or reconsideration shall be allowed.


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When the judgment to be appealed is rendered by the Regional Trial Court in the exercise of its appellate jurisdiction, appeal is not a matter of right. It will be given due course by the Court of Appeals only when the petition shows prima facie that the lower court has committed errors in its conclusions of fact or law that will warrant reversal or modification of the decision sought to be reviewed. The method of appeal is by petition for review which should be filed and served within 15 days from notice of the decision sought to be reviewed. Upon proper motion and the payment of the full amount of fees before the expiration of the reglementary period, the Court of Appeals may grant an additional period of 15 days only within which to file the petition for review. No further extension shall be granted except for the most compelling reason and in no case to exceed 15 days.

When the appellant intends to raise only pure questions of law, the appeal from the Regional Trial Court may be taken directly to the Supreme Court, by petition for review on certiorari. This is true whether the case was decided by the Regional Trial Court in the exercise of its original or appellate jurisdiction. The appeal, in this instance, is not a matter of right but of discretion on the part of the Supreme Court. The petition must be filed within 15 days from notice of the judgment or final order appealed from. On motion duly filed and served, with full payment of fees before the expiration of the reglementary period, the Supreme Court may for justifiable reasons grant an extension of 30 days only within which to file the petition.

From the Court of Appeals, the Court of Tax Appeals and the Sandiganbayan

Appeals from the Court of Appeals, the Court of Tax Appeals and the Sandiganbayan are taken to the Supreme Court by petition for review on certiorari, the appeal being discretionary and generally limited to questions of law. The petition must be filed within 15 days from notice of the judgment or final order appealed from. On motion duly filed and served, with full payment of fees before the expiration of the reglementary

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period, the Supreme Court may for justifiable reasons grant an extension of 30 days only within which to file the petition.

From the Quasi-Judicial Agencies

Appeals from quasi-judicial agencies are generally taken only to the Court of Appeals by petition for review. The petition must be filed within 15 days from notice of the award, judgment, final order or resolution, or from the date of its last publication, if publication is required by law for its effectivity. Upon proper motion and payment of full amount of docket fee before the expiration of the reglementary period, the Court of Appeals may grant an additional period of 15 days only within which to file the petition for review. No further extension shall be granted except for the most compelling reason and in no case to exceed 15 days.

The appeal is not a matter of right. The Court of Appeals will decline to give due course to the petition unless it makes out a prima facie showing that the agency has committed an error of fact or law that will warrant a reversal or modification of the order, ruling or decision sought to be reviewed.


Execution shall issue as a matter of right, on motion, with respect to a judgment or order that disposes of the action or proceeding, upon the expiration of the period to appeal. If the appeal has been duly perfected and finally resolved, the execution may forthwith be applied for in the court of origin, on motion of the judgment obligee, submitting therewith certified true copies of the judgment or judgments or final order or orders sought to be enforced and of the entry thereof, with notice to the adverse party.

By way of exception, the prevailing party may file a motion for execution of a judgment or final order that has been seasonably appealed. The motion shall be filed with the trial court while it still has jurisdiction over


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the case and is in possession of either the original record or the record on appeal, as the case may be. After the trial court has lost jurisdiction, the motion for execution pending appeal may be filed in the appellate court. The adverse party must be given notice. Discretionary execution may only issue upon good reasons to be stated in the order after due hearing.

Judgments in actions for injunction, receivership, accounting and support are immediately executory and are not stayed by appeal, unless otherwise ordered by the trial court. In cases of appeals from decisions of quasi-judicial agencies to the Court of Appeals, the appeal shall not stay the award, judgment, final order or resolution sought to be reviewed unless the Court of Appeals directs otherwise.

A final and executory judgment or order may be executed on motion within five years from the date of its entry. After the lapse of such time, and before it is barred by the statute of limitations, a judgment may be enforced by action. The revived judgment may also be enforced by motion within five years from the date of its entry and thereafter by action before it is barred by the statute of limitations.

Judgments for money may be enforced through the following:

• Immediate payment on demand – The judgment obligor shall pay in cash, certified bank check payable to the judgment obligee, or any other form of payment acceptable to the latter.

• Satisfaction by levy – If the judgment obligor cannot pay all or part of the obligation in cash, certified bank check or other mode of acceptable payment, the officer shall levy upon the properties of the judgment obligor of every kind and nature whatsoever which may be disposed of for value and not otherwise exempt from execution, giving the latter the option to immediately choose which property or part thereof may be levied upon, sufficient to satisfy the judgment.

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• Garnishment of debts and credits – The officer may levy on debts due the judgment obligor and other credits, including bank deposits, financial interests, royalties, commissions and other personal property not capable of manual delivery. Levy shall be made by serving notice upon the person owing such debts or having in his possession or control such credits.

The rules prescribe the following methods for enforcement of judgments for specific acts:

• Conveyance, delivery of deeds, or other specific acts – If a judgment directs a party to perform a specific act and the party fails to comply within the time specified, the court may direct the act to be done at the cost of the disobedient party.

• Sale of real or personal property – If the judgment be for the sale of real or personal property, to sell such property and apply the proceeds in conformity with the judgment.

• Delivery or restitution of real property – The officer shall demand of the person against whom the judgment is rendered to peaceably vacate the property within three working days and restore possession thereof to the judgment obligee. Otherwise, the officer shall oust such person from the property, with the assistance of appropriate peace officers.

• Removal of improvements on property subject to execution – The officer shall not destroy or demolish such improvements except upon special order of the court.

• Delivery of personal property – The officer shall take possession of the personalty and deliver it to the party entitled thereto.

In executing special judgments (those which require the performance of any act other than those mentioned above), a certified copy of the


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judgment must be attached to the writ of execution which shall be served by the officer upon the judgment obligor, and such party may be punished for contempt if he disobeys the judgment.

The Rules of Court enumerate certain properties exempt from execution.


A judgment of another state may not be directly enforced in the Philippines. A separate action must be filed in the Philippines for the foreign judgment to be recognized or enforced. The Philippine courts must be convinced that there has been opportunity for a full and fair trial abroad before a court of competent jurisdiction. Moreover, a foreign judgment will not be enforced or recognized when it runs counter to laws which have for their object public order, public policy and good customs.

In case of a judgment in rem (i.e., actions affecting title to or possession of real property or any interest therein), the judgment is conclusive upon the title of the thing. However, in the case of a judgment in personam (i.e., actions against a person for his personal liability), the judgment is merely presumptive evidence of a right as between the parties and their successors in interest by a subsequent title. In either case, the judgment may be repelled by evidence of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.

Comity and reciprocity are also factors to be considered in the recognition and enforcement of a foreign judgment by a Philippine court.

Arbitration Law/Role of Courts in Arbitration

The following laws and rules govern arbitration in the Philippines, to wit:

• Republic Act No. 876 (known as the Arbitration Law)

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• Republic Act No. 9285 (known as the Alternative Dispute Resolution Act of 2004)

• Implementing Rules and Regulations of the ADR Act (ADR Act IRR)

• Executive Order No. 1008 (known as Construction Industry Arbitration Law, for construction disputes)

• Special Rules of Court on Alternative Dispute Resolution (Special ADR Rules).

• Congress enacted R.A. No. 876 in 1953 and R.A. No. 9285 in 2004. On the other hand, the Supreme Court promulgated the Special ADR Rules in September 2009.

• R.A. No. 876, as amended, applies to domestic arbitration, while R.A. No. 9285, which adopted the UNCITRAL Model Law, applies to international arbitration.

The enforcement of foreign arbitral awards in international arbitrations seated1 outside the Philippines is governed by the 1958 New York

1 These are the instances when the Philippines is chosen as the place or seat of arbitration. The place or seat of arbitration is the legal or juridical home (or domicile) of the arbitration, the choice of which results in a number of highly significant legal consequences as it determines the (a) the national arbitration legislation applicable to the arbitration; (b) the law applicable to the “external” relationship between the arbitration and national law and courts (including annulment of awards and selection and removal of arbitrators); (c) the law applicable to the “internal” procedures of the arbitration (including requirements for equality of treatment and due process); and (d) the law presumptively applicable to the substantive validity of the arbitration agreement. (Chapter 14: Selection of Arbitral Seat in International Arbitration in Gary B. Born, International Commercial Arbitration, Second Edition (© Kluwer Law International; Kluwer Law International 2014) p. 2051)


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Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”).

Arbitration is considered international if any of the following conditions apply:

(a) the parties to an arbitration agreement have, at the time of the conclusion of such agreement, their places of business in different states (countries); or

(b) one of the following places is situated outside the state in which the parties have their places of business:

(i) the place of arbitration if determined in, or pursuant to, the arbitration agreement; or

(ii) any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject matter of the dispute is most closely connected; or

(c) the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country.

On the other hand, domestic arbitration is simply defined as arbitration that is not international. Thus, if the dispute is between parties who have their place of business in the Philippines, and their obligations are to be performed in the Philippines, and there is no stipulation in their arbitration agreement that the subject matter of the arbitration agreement relates to another country, the arbitration will be considered domestic.

Despite the distinction between international and domestic arbitration, there are a few vital distinctions between the two regimes. The reason for this is that the Alternative Dispute Resolution Act of 2004 (ADR Act of

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2004) has grafted several of the UNCITRAL Model Law provisions onto Republic Act No. 876.

All types of commercial disputes may be referred to arbitration. The word “commercial” is broadly defined as “matters arising from all relationships of a commercial nature, whether contractual or not.”

The following disputes may not be submitted to arbitration:

(a) labor disputes covered by Presidential Decree No. 442, otherwise known as the Labor Code of the Philippines, as amended, and its Implementing Rules and Regulations;

(b) the civil status of persons;

(c) the validity of a marriage;

(d) any ground for legal separation (of married persons);

(e) the jurisdiction of courts;

(f) future legitime;

(g) criminal liability; and

(h) those disputes which by law cannot be compromised.


Form of arbitration agreement

The arbitration agreement must be in writing and subscribed by the party sought to be charged, or by his lawful agent. An agreement that incorporates by reference a document that contains an arbitration clause gives rise to a valid arbitration agreement.


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Third parties

Where a civil action is commenced in court by or against multiple parties, one or more of whom are parties to an arbitration agreement, the court shall refer to arbitration those parties who are bound by the arbitration agreement, although the civil action may continue as to those who are not bound by such arbitration agreement.

Qualifications of an arbitrator

An arbitrator must possess the following qualifications: of legal age, in full enjoyment of his civil rights, and can read and write. Furthermore, the arbitrator should not be related by blood or marriage up to the sixth degree to either party to the controversy. Neither should he have a financial, fiduciary, or other interest in the controversy, or any personal bias, which might prejudice the right of any party to a fair and impartial award.

The law prohibits an arbitrator from “championing” or “advocating” the cause of either party.

Interim measures

A party may apply for provisional relief or interim measures to the courts prior to the constitution of the arbitral tribunal or even during the arbitration proceedings to the extent that the arbitral tribunal has no power to act or is unable to act effectively.

Grounds for vacating/setting aside a domestic arbitral award

A domestic arbitral award could be vacated on the following grounds:

(a) The award was procured by corruption, fraud, or other undue means.

(b) There was evident partiality or corruption in the arbitrators or any of them.

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(c) The arbitrators were guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or one or more of the arbitrators were disqualified to act as such under Section 10 of Republic Act No. 876 and willfully refrained from disclosing such disqualifications; or were guilty of any other misbehavior by which the rights of any party were materially prejudiced.

(d) The arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, final and definite award upon the subject matter submitted to them was not made.

Where an award is vacated, the court, in its discretion, may direct a new hearing either before the same arbitrators or before a new arbitrator or arbitrators to be chosen in the manner provided in the submission or contract for the selection of the original arbitrator or arbitrators, and any provision limiting the time in which the arbitrators may make a decision shall be deemed applicable to the new arbitration and to commence from the date of the court’s order.

The petition to vacate a domestic arbitral award must be filed with the appropriate Regional Trial Court within 30 days from receipt of the award.

Confirmation of domestic arbitral award

An arbitral award is not self-executory. In order to convert the domestic arbitral award into an enforceable judgment, the winning party has to file with the appropriate Regional Trial Court a petition for confirmation of the arbitral award. The court should, as a matter of course, grant the petition, unless there are grounds to vacate the award.

A party may petition the court to confirm the award at any time after the lapse of 30 days from receipt of the arbitral award.


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Interpretation of the UNCITRAL Model Law (Model Law)

The provisions on domestic arbitration are more or less similar to the provisions on international arbitration. The one area where the two arbitration regimes may possibly part ways is in the interpretation of the applicable laws, Republic Act No. 876 (for domestic arbitration) and the Model Law (for international arbitration).

The ADR Act of 2004 provides that, in interpreting the Model Law, there must be regard to its international origin and to the need for uniformity in its interpretation, and resort may be made to the travaux preparatories and the report of the secretary general of the United Nations Commission on International Trade Law dated 25 March 1985, entitled “International Commercial Arbitration: Analytical Commentary on Draft Text identified by reference number a/CN. 9/264.”

For example, since other jurisdictions tend to interfere less with international arbitral awards, domestic arbitration and international arbitration will most likely diverge with respect to the scope of judicial review. While domestic arbitration awards may be reviewed on appeal on both questions of fact and law, Philippine courts, having regard to the international origin of the Model Law and to the need for uniformity in its interpretation, should limit the scope of its review to the grounds to set aside an arbitral award under the Model Law.

Form

The arbitration agreement shall be in writing. The definition of “writing” under the Model Law is broader than the definition of “writing” under Republic Act No. 876. The Model Law considers an agreement to be in writing “if it is contained in a document signed by the parties or in an exchange of letters, telex, telegrams, or other means of telecommunication which provide a record of the agreement, or in an exchange of statements

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of claim and defense in which the existence of an agreement is alleged by one party and not denied by another. The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement provided that the contract is in writing and the reference is such as to make that clause part of the contract.”

Interim measures

As with domestic arbitration, a party in an international arbitration may apply for provisional relief or interim measures to the courts prior to the constitution of the arbitral tribunal or even during the arbitration proceedings to the extent that the arbitral tribunal has no power to act or is unable to act effectively.

Grounds for setting aside/vacating an international arbitral award

An international arbitral award may be set aside by the courts only if the party making the application furnishes proof that:

(a) a party to the arbitration agreement referred to in Article 7 of the Model Law is under some incapacity; or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of this state;

(b) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case;

(c) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration could be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration could be set aside; or


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(d) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of the Model Law from which the parties could not derogate, or, failing such agreement, was not in accordance with the Model Law.

An international arbitral award could also be set aside if the court finds that

(a) the subject matter of the dispute is not capable of settlement by arbitration under the law of this state (the Philippines); or

(b) the award is in conflict with the public policy of this state.

An application for setting aside an international arbitral award has to be filled within three months from receipt of the award.

Recognition and enforcement of international arbitral award

An international arbitral award, irrespective of the country in which it was made, shall be recognized as binding and, upon application in writing to the competent court, shall be enforced unless there exists any of the grounds to set aside/vacate the award.

The petition for enforcement and recognition of an arbitral award may be filed any time from receipt of the award.

Special ADR Rules

The Special ADR Rules govern the various stages of court participation in arbitration proceedings: challenge to the existence, validity, and enforceability of arbitration agreements; referral to arbitration; interim measures of protection; appointment, challenge, and termination of arbitrators; assistance in taking evidence; confidentiality/protective orders; confirmation, correction, or vacation of award in domestic arbitration; recognition and enforcement or setting aside of an international

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commercial arbitration award; recognition and enforcement of foreign arbitral award; and appeals to the Court of Appeals and the Supreme Court.

The Special ADR Rules reiterate the state policy of promoting arbitration: “It is the policy of the State to actively promote the use of various modes of ADR and to respect party autonomy or the freedom of the parties to make their own arrangements in the resolution of disputes with the greatest cooperation of and the least intervention from the courts. To this end, the objectives of the Special ADR Rules are to encourage and promote the use of ADR, particularly arbitration and mediation, as an important means to achieve speedy and efficient resolution of disputes, impartial justice, curb a litigious culture and to de-clog court dockets.”

The following are some of the salient provisions of the Special ADR Rules:

• A party may challenge before the courts the existence, validity, and enforceability of an arbitration agreement. The challenge may be done either before or after the commencement of the arbitration.

Despite the pendency of the petition for judicial determination of the existence, validity, and/or enforceability of an arbitration agreement, the arbitral proceedings may nevertheless be commenced and continue to the rendition of an award while the issue is pending before the court.

In resolving the petition, the court must exercise judicial restraint, deferring as much as possible to the competence or jurisdiction of the arbitral tribunal to rule on its competence or jurisdiction.

• A party to a pending action filed in violation of the arbitration agreement may request the court to refer the parties to arbitration in accordance with such agreement. The request for referral shall be made not later than the pretrial conference. After the pretrial conference, the court will act upon the request for referral only if it is made with the agreement of all parties to the case.


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Despite the pendency of the court action, the arbitral proceedings may nevertheless be commenced or continued, and an award may be made, while the action is pending before the court.

• A petition for an interim measure of protection may be made (a) before arbitration is commenced, (b) after arbitration is commenced but before the constitution of the arbitral tribunal, or (c) after the constitution of the arbitral tribunal and at any time during arbitral proceedings but, at this stage, only to the extent that the arbitral tribunal has no power to act or is unable to act effectively.

Any court order granting or denying interim measure/s of protection is issued without prejudice to subsequent grant, modification, amendment, revision, or revocation by the arbitral tribunal as may be warranted. An interim measure of protection issued by the arbitral tribunal shall, upon its issuance, be deemed to have ipso jure modified, amended, revised, or revoked an interim measure of protection previously issued by the court to the extent that it is inconsistent with the subsequent interim measure of protection issued by the arbitral tribunal.

The court shall assist in the enforcement of an interim measure of protection issued by the arbitral tribunal which it is unable to enforce effectively.

• Any party to an arbitration, whether domestic or foreign, may request the court to provide assistance in taking evidence.

Assistance may be sought at any time during the course of the arbitral proceedings when the need arises.

• A party, counsel, or witness who disclosed or who was compelled to disclose information under circumstances that would create a reasonable expectation, on behalf of the source, that the information shall be kept confidential has the right to prevent such information

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from being further disclosed without the express written consent of the source or the party who made the disclosure.

A party could request a protective order any time there is a need to enforce the confidentiality of the information obtained, or to be obtained, in the arbitration proceedings.

The order enjoining a person or persons from divulging confidential information shall be immediately executory and could not be enjoined while the order is being questioned at the appellate courts.

Any person who disobeys the order of the court to cease from divulging confidential information shall be given the proper sanction by the court.

• In deciding the petition to vacate a domestic arbitral award, the court shall disregard any grounds other than those specified in Republic Act No. 876.

If the court finds that there is a need to conduct an oral hearing, the court shall set the case for hearing. This case shall have preference over other cases before the court, except criminal cases.

Unless a ground to vacate an arbitral award is fully established, the court shall confirm the award. An arbitral award shall enjoy the presumption that it was made and released in due course of arbitration and is subject to confirmation by the court.

• The court may set aside or refuse the enforcement of the international arbitral award only on grounds under the Model Law.

The court shall disregard any grounds to set aside or enforce the arbitral award other than those specified in the Model Law.

Recourse to a court against an arbitral award shall be made only through a petition to set aside the arbitral award and on grounds


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prescribed by the law that governs international commercial arbitration. Any other recourse from the arbitral award, such as by appeal or petition for review or petition for certiorari or otherwise, shall be dismissed by the court.2

The prevailing party shall be entitled to an award of costs, which shall include reasonable attorney’s fees of the prevailing party against the unsuccessful party. The court shall determine the reasonableness of the claim for attorney’s fees.

• A Philippine court shall not set aside a foreign arbitral award but may refuse it recognition and enforcement on any or all of the grounds under Section V of the New York Convention.

The court shall disregard any grounds for opposing the recognition and enforcement of a foreign arbitral award other than those specified in the New York Convention.

The court shall give due priority to hearings on petitions under this rule.

The decision of the court recognizing and enforcing a foreign arbitral award is immediately executory.

In resolving the petition for recognition and enforcement of a foreign arbitral award in accordance with the Special Rules, the court shall either (a) recognize and enforce or (b) refuse to recognize and enforce the arbitral award. The court shall not disturb the arbitral tribunal’s determination of facts and/or interpretation of law.

2 This provision effectively overturns previous court decisions holding that an arbitral award may be questioned by directly filing a petition for review (on questions of fact and law) or petition for certiorari (on a question of jurisdiction) with the Court of Appeals.

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• An agreement to refer a dispute to arbitration shall mean that the arbitral award shall be final and binding. Consequently, a party to an arbitration is precluded from filing an appeal or a petition for certiorari questioning the merits of an arbitral award.

As a general rule, the court may vacate or set aside the decision of an arbitral tribunal only upon a clear showing that the award suffers from any of the infirmities or grounds for vacating an arbitral award under Section 24 of Republic Act No. 876 or under Rule 34 of the Model Law in a domestic arbitration, or for setting aside an award in an international arbitration under Article 34 of the Model Law, or for such other grounds provided under these Special Rules.

The court shall not set aside or vacate the award of the arbitral tribunal merely on grounds that the arbitral tribunal committed errors of fact, or of law, or of fact and law, as the court may not substitute the arbitral tribunal’s judgment with that of its own.

• An appeal to the Court of Appeals shall not stay the award, judgment, final order, or resolution sought to be reviewed unless the Court of Appeals directs otherwise upon such terms as it may deem just.

The Court of Appeals shall render judgment within 60 days from the time the case is submitted for decision.

If the decision of the Regional Trial Court refusing to recognize and/or enforce, vacating, and/or setting aside an arbitral award is premised on a finding of fact, the Court of Appeals may inquire only into such fact to determine the existence or nonexistence of the specific ground under the arbitration laws of the Philippines relied upon by the Regional Trial Court in refusing to recognize and/or enforce, vacate, and/or set aside an award. Any such inquiry into a question of fact shall not be resorted to for the purpose of substituting the court’s


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judgment with that of the arbitral tribunal as regards the latter’s ruling on the merits of the controversy.

The Court of Appeals shall require the party appealing from the decision or a final order of the Regional Trial Court either confirming or enforcing an arbitral award, or denying a petition to set aside or vacate the arbitral award, to post a bond equal to the amount of the award executed in favor of the prevailing party. Failure of the petitioner to post such bond shall be a ground for the Court of Appeals to dismiss the petition.

• When the Regional Trial Court, in making a ruling under the Special ADR Rules, has acted without or in excess of its jurisdiction, or with grave abuse of discretion resulting in lack or excess of jurisdiction, and there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law, a party may file a special civil action for certiorari to annul or set aside a ruling of the Regional Trial Court.

The Court of Appeals shall not, during the pendency of the proceedings before it, prohibit or enjoin the commencement of arbitration, the constitution of the arbitral tribunal, or the continuation of arbitration.

• A party desiring to appeal by certiorari from a judgment or final order or resolution of the Court of Appeals issued pursuant to the Special Rules may file with the Supreme Court a verified petition for review of certiorari. The petition shall raise only questions of law.

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• The fee3 for filing a petition to confirm or enforce, vacate, or set aside an arbitral award in a domestic arbitration or in an international commercial arbitration shall be as follows:

PhP10,000.00 – if the award does not exceed PhP1,000,000.00




PhP50,000.00 – if the award exceeds PhP100,000,000.00

• At the time the case is submitted to the court for decision, the party

praying for confirmation or vacation of an arbitral award shall submit a statement under oath confirming the costs he has incurred only in the proceedings for confirmation or vacation of an arbitral award. The costs shall include the attorney’s fees the party has paid or is committed to pay to his counsel of record.

The prevailing party shall be entitled to an award of costs with respect to the proceedings before the court, which shall include the reasonable attorney’s fees of the prevailing party against the unsuccessful party. The court shall determine the reasonableness of the claim for attorney’s fees.

Construction Industry Arbitration Commission

Executive Order No. 1008 established the Construction Industry Arbitration Commission (CIAC). The CIAC has original and exclusive jurisdiction over construction disputes, which shall “include those between or among

3 Prior to the passage of the Special Rules, there was no standard or schedule for computing the filing fees. Some courts charged fixed filing fees; others based the computation of the filing fees on the amount found in the arbitral award.


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parties to, or who are otherwise bound by, an arbitration agreement, directly or by reference whether such parties are project owner, contractor, subcontractor, fabricator, project manager, design professional, consultant, quantity surveyor, bondsman or issuer of an insurance policy in a construction project.”

The CIAC is a hybrid of voluntary arbitration and compulsory arbitration.

If the parties do not enter into an arbitration agreement, then the construction dispute between them shall be resolved by the courts.

On the other hand, the Philippine Supreme Court has held that “as long as the parties agree to submit their dispute to voluntary arbitration, regardless of what forum they may choose, their agreement will fall within the jurisdiction of the CIAC, such that, even if they specifically choose another forum, the parties will not be precluded from electing to submit their dispute before the CIAC because this right has been vested by law.” Thus, for example, if the parties to a construction contract designate Singapore arbitration as the venue of any dispute that may arise between them, either party may still elect to file a request for arbitration with the CIAC, notwithstanding the agreement of the parties to submit their dispute to arbitration in Singapore, and the CIAC shall assume jurisdiction over the dispute.

The CIAC is known for its efficiency. It takes the CIAC an average of around six months from the time of filing of the request for arbitration to hear the case and render an award.


Philippine Dispute Resolution Center, Inc.

The Philippine Dispute Resolution Center, Inc. (PDRCI) is a non-stock, nonprofit organization incorporated in 1996 out of the Arbitration Committee of the Philippine Chamber of Commerce and Industry. It was

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formed for the purpose of promoting and encouraging the use of arbitration as an alternative mode of settling commercial transaction disputes and providing dispute resolution services to the business community. PDRCI’s membership includes prominent lawyers and members of the judiciary, private practitioners, academicians, arbitrators, bankers and businessmen.

The arbitration rules of the PDRCI have been amended effective January 2015 to include provisions relating to consolidation of arbitration, joinder of parties, expedited arbitration and emergency relief, among others.

It takes the PDRCI an average of around 10 months from the time of filing of the request for arbitration to hear the case and render an award.

Ad Hoc Arbitration

There is no prohibition in the Philippines regarding the recognition and conduct of ad hoc arbitration in accordance with the existing policy in favor of arbitration.


The Philippines is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958. An action for enforcement of a foreign arbitral award must be filed in the Philippine courts and copies of the award and the original agreement must likewise be filed. If the said award or agreement is not made in an official language of the Philippines, the party-applicant shall produce a translation of the documents into the official language. The translation shall be certified by an official or sworn translator or by a diplomatic or consular agent.

Mediation and Conciliation

Mediation or conciliation is a speedy, inexpensive and simplified mode of dispute resolution. There have been increased efforts in recent years to


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institutionalize mediation proceedings in the Philippine legal system to aid in the speedy administration of justice.

Court-Annexed Mediation

In 2001, the Supreme Court, in the exercise of its supervisory and regulatory powers over the Philippine judicial system, implemented a trial mediation or conciliation proceedings in certain pilot areas in the Philippines.

By 2011, the Supreme Court has expanded the cases covered by the Court-Annexed Mediation (CAM) to cover the following:

(a) all civil cases and the civil liability of criminal cases covered by the Rules on Summary Procedure, including the civil liability for violation of the Bouncing Checks Law,

(b) special proceedings for the settlement of estates,

(c) all civil and criminal cases requiring a certificate to file action under the Revised Katarungang Pambarangay Law,

(d) the civil aspect of quasi-offenses under the Revised Penal Code,

(e) the civil aspect of less grave felonies not exceeding six years of imprisonment where the offended party is a private person,

(f) civil aspect of estafa (swindling), theft and libel,

(g) all civil cases and probate proceedings brought on appeal from the first-level courts,

(h) all cases of forcible entry and unlawful detainer brought on appeal from the first-level courts,

(i) all civil cases involving title or possession of real property or interest therein brought on appeal from first-level courts,

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(j) habeas corpus cases brought up on appeal from the first-level courts.

On the other hand, the following cases cannot be subject of CAM:

(a) civil cases which by law cannot be compromised,

(b) other criminal cases not covered by numbers 3 to 6 above,

(c) habeas corpus petitions,

(d) all cases under the Violence Against Women and Children Act, and

(e) cases with pending applications for restraining orders or preliminary injunctions.

The court, before whom a case was filed involving any of the aforementioned disputes, calls the parties to a conference before a mediator appointed by the trial court from the list provided by the Supreme Court. During the mediation period, the court orders the suspension of the proceedings before it for 30 days.

Individual parties are required to personally appear for mediation unless they send a representative who is fully authorized to appear, negotiate and enter into a compromise, through a special power of attorney. Corporations, partnerships or other juridical entities shall be represented by a ranking corporate officer fully authorized by a board resolution to offer, negotiate, accept, decide and enter into a compromise agreement, without need of further approval by or notification to the authorizing party.

In case a settlement is reached, the compromise agreement entered into between the parties is submitted to the court and serves as basis for the rendition of a judgment by compromise that may be enforced by execution. Otherwise, the case is returned to the court.

The mediation proceedings and all incidents thereto are kept strictly confidential.


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The period during which the case is undergoing mediation or conciliation is excluded from the regular and mandatory periods for trial and rendition of judgment in ordinary cases as well as in cases under summary procedure.

Judicial Dispute Resolution

Judicial Dispute Resolution (JDR) is governed by A.M. No. 11-1-6-SC-PHILJA and is promulgated pursuant to the ADR Act of 2004. Together with court-annexed mediation, JDR is intended to put an end to pending litigation through a compromise agreement and help unclog court dockets in the country. Cases covered by CAM are also subject to JDR.

Judicial proceedings covered by JDR shall be divided into two stages: (1) from the filing of the complaint to the conduct of court-annexed mediation and JDR, and (2) pretrial proper to trial and judgment. The judge to whom the case had been originally raffled shall be referred as the JDR judge who shall preside over the first stage. Another judge, who shall be called the trial judge, shall preside over the second stage. At the initial stage of the preliminary conference, the JDR judge briefs the parties of court-annexed mediation and JDR. Upon failing to secure a settlement of the dispute during the court-annexed mediation, a second attempt of arriving at a compromise agreement is done through the JDR. In the JDR, the JDR judge becomes a mediator-conciliator-early neutral evaluator in a continuing effort to secure an settlement. As mediator and conciliator, the judge facilitates the settlement discussions between the parties and tries to reconcile their differences. As a neutral evaluator, the judge assesses the relative strengths and weaknesses of each party’s case and makes a non-binding and impartial evaluation of the chances of each party’s success in the case. On the basis of such neutral evaluation, the judge persuades the parties to a fair and mutually acceptable settlement of their dispute. The JDR judge shall not preside over the trial of the case when the parties did not settle their dispute at JDR.

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To complete the JDR process, judges of the first-level courts shall have a period of not exceeding 30 days, while judges of the second-level courts shall have a period of not exceeding 60 days. A longer period, however, may be granted upon the discretion of the JDR judge if there is a high probability of settlement and upon joint written motion of the parties. Both periods shall be computed from the date when the parties first appeared for JDR proceedings as directed in the respective orders issued by the judge.

If full settlement of the dispute is reached, the parties, assisted by their respective counsels, shall draft the compromise agreement which shall be submitted to the court for a judgment upon compromise, enforceable by execution. Only upon failure of the JDR will parties proceed to trial proper when the case is turned over to another judge, the trial judge, who shall continue the pretrial proper and thereafter, proceed to try and decide the case.

Any and all matters discussed or communications made, including requests for mediation, and documents presented during the JDR proceedings before the trial judge, shall be privileged and confidential, and the same shall be inadmissible as evidence for any purpose in any other proceedings. Further, the JDR judge shall not pass any information obtained in the course of conciliation and early neutral evaluation to the trial judge or to any other person.

Philippine Mediation Center ‒ Appeals Court Mediation

During the appeal to the Court of Appeals, cases covered by court-annexed mediation and JDR shall be referred to the Philippine Mediation Center ‒ Appeals Court Mediation unit for mediation.


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Commercial ADR

The ADR Act of 2004, without limiting the modes of ADR that the parties can avail of, provide for, in addition to arbitration, the following modes of ADR:

Mediation

Mediation is a voluntary process in which a mediator, selected by the disputing parties, facilitates communication and negotiation, and assists the parties in reaching a voluntary agreement regarding a dispute. Information obtained through mediation is privileged and confidential. A party, a mediator, or a non-party participant may refuse to disclose and may prevent any other person from disclosing a mediation communication.

A mediated settlement agreement may be deposited with the appropriate clerk of a Regional Trial Court of the place where one of the parties resides. Where there is a need to enforce the settlement agreement, a petition may be filed by any of the parties with the same court. Pursuant to the Special ADR Rules, after a summary hearing, if the court finds that the agreement is a valid mediated settlement agreement, that there is no merit in any of the affirmative or negative defenses raised, and the respondent has breached that agreement, in whole or in part, the court shall order the enforcement thereof; otherwise, it shall dismiss the petition.

The parties may agree in the settlement agreement that the mediator shall become a sole arbitrator for the dispute and shall treat the settlement agreement as an arbitral award which shall be subject to enforcement.

Early Neutral Evaluation

Early neutral evaluation is an ADR process wherein parties and their lawyers are brought together early in the pretrial phase to present summaries of their cases and to receive a non-binding assessment by an

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experienced neutral person, with expertise in the subject matter or substance of the dispute.

All papers and written presentations communicated to the neutral third person, including any paper prepared by a party to be communicated to the neutral third person or to the other party as part of the dispute resolution process, and the neutral third person’s written non-binding assessment or evaluation, shall be treated as confidential.

The proceedings are governed by the rules and procedure agreed upon by the parties. By default, the ADR Act IRR shall govern.

Mediation-Arbitration or Med-Arb

Med-Arb is a two-step dispute resolution process involving mediation and then followed by arbitration. It is governed by the rules and procedure agreed upon by the parties. Otherwise, the ADR Act IRR shall govern. As a general rule, a mediator may not act as an arbitrator in respect of the same dispute, or vice-versa.

Mini-trial

Mini-trial is a structured dispute resolution method in which the merits of a case are argued before a panel comprising of senior decision-makers, with or without the assistance of a neutral third person, before which the parties seek a negotiated settlement. It shall be governed by the rules and procedure agreed upon by the parties. Otherwise, the ADR Act IRR shall govern.

Alternative Dispute Resolution for Public-Private Partnerships and Joint Venture Agreements with the Government

In 2012, Executive Order No. 78 (EO 78) was issued, which mandated the inclusion of provisions on the use of alternative dispute resolution mechanisms in all contracts involving public-private partnership projects,


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build-operate and transfer projects, joint venture agreements between the government and private entities and those entered into by local government units.

On 12 May 2017, the National Economic Development Authority issued the Implementing Rules and Regulations (IRR) to implement EO No. 78. The IRR:

• Allows the parties to determine the ADR mechanism that is most suitable for the type of project undertaken

• Enumerates factors which the parties should consider in designing the dispute resolution clause of the contract

• Provides ADR Model clauses to guide the parties

In case the parties choose international arbitration as the ADR mechanism of the contract, the execution of a separate written agreement between the contracting parties defining the terms of reference of such arbitration is required before a dispute may be submitted to international arbitration. The separate written agreement will be executed by an Ad- Hoc Inter-Agency Committee, after undergoing (a) a consultation process which aims to forge a settlement; or (b) a process to simplify the issues and stipulate matters which may aid in the prompt disposition of the claim or dispute, should the consultation process fail.

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Quisumbing Torres


Our Dispute Resolution Practice Group (DRPG) provides strategic and practical counsel and legal assistance in all forms of dispute resolution – from negotiation and mediation to arbitration and general/specialized litigations.

We help clients make informed decisions that are consistent with their commercial objectives. Our access to an international network allows us to successfully represent foreign and domestic clients on the biggest commercial disputes and landmark cases in the Philippines. These cases include various types of litigations such as those involving general commercial, tort, customs, environment, product liability, tax and other regulatory/administrative matters.

Our team has a wide range of experience in the following areas: arbitration (international and domestic commercial arbitration, construction arbitration); commercial litigation (corporate disputes, including shareholders’ actions and other inter-corporate and intra-corporate disputes, partnership and joint venture controversies, distribution agreement disputes, insolvency and corporate rehabilitation); civil litigation (airline litigation, contract and property disputes, enforcement of foreign judgments and foreign arbitral awards and tort claims); criminal litigation (crimes involving fraud, crimes against property, violations under the Cybercrime Prevention Act, libel and oral defamation, prosecutions under the Anti-Dummy Law, prosecutions under anti-bribery and anti-corruption laws); and administrative and other litigations (tax and customs litigation, mining litigation, litigations relating to corporate compliance).


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The Manila office Dispute Resolution Partners include

Contacts

Ramon Quisumbing Tel: +63 2 819 4911 [email protected]

Donemark Calimon Tel: +63 2 819 4920 [email protected]


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Singapore

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Legal System

The Singapore legal system reflects its historical connection with England. In 1807, the East India Company obtained the First Charter of Justice from the English monarchy to set up a Court of Judicature in Penang with similar powers to those of English superior courts, to pass judgment according to “justice and right.” In 1824, the Johore Sultanate ceded Singapore to the British and the East India Company acquired full sovereignty in perpetuity over Singapore. On 27 November 1826 the East India Company obtained the Second Charter of Justice from the English monarchy. The Second Charter of Justice created a new Court of Judicature to serve Penang, Singapore and Malacca (the Straits Settlements).

By the Second Charter of Justice, the law of England as it stood on 27 November 1826 was received into Singapore. However, the reception of English law was problematic as not all English laws were suitable for application in the Straits Settlements. The Second Charter of Justice did not provide any guidelines for the reception of English law, which was left to the courts to determine. The courts in the Straits Settlements have in judicial interpretations over many years established that only English law of general policy and application was to be received subject to local customs, local religions and local legislation.

Although the Second Charter of Justice provided that the law of England as it stood in 1826 was to be received, in practice, post-1826 English laws pertaining to commercial matters were accepted by the bench and bar as part of the law of Singapore. This tacit acceptance was finally granted legislative recognition by the passing of the Civil Law Ordinance of 1878. By Section 6 of the Civil Law Ordinance, current English law was to apply to all commercial matters unless there was applicable local legislation in force. After several re-enactments, Section 6 of the Civil Law Ordinance became known as Section 5 of the Civil Law Act (Cap 43).


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On 12 November 1993, Section 5 of the Civil Law Act was repealed and replaced by the Application of English Law Act 1993 (Cap 7A) (the 1993 Act). By the 1993 Act, the common law of England (including the principles and rules of equity) so far as it was part of the law of Singapore prior to the commencement of the 1993 Act, together with those English enactments listed in the Schedule to the Act, continue to be part of the law of Singapore.

On 11 July 1994, in a practice statement read by the Honorable Chief Justice Yong Pung How at the commencement of hearings in the Court of Appeal, the Court of Appeal stated that it should not hold itself bound by any previous decisions of its own or of the Privy Council, which by the rules of precedent prevailing prior to 8 April 1994 were binding on it, in any case where adherence to such prior decisions would cause injustice in a particular case or constrain the development of the law in conformity with the circumstances of Singapore. This power will be exercised sparingly, bearing in mind the danger of retroactively disturbing contractual, proprietary and other legal rights.

Since then, the Singapore courts have developed their own body of case authorities. Modern English case law and other Commonwealth decisions, though persuasive, are no longer binding.

Courts

Judicial power in Singapore is vested in the Supreme Court and the State Courts as provided by the law. The Supreme Court comprises the High Court, the Singapore International Commercial Court and the Court of Appeal.

The State Courts are inferior courts, operating under the supervision of the Supreme Court. For civil matters, the State Courts are primarily divided into the Small Claims Tribunals, Magistrates’ Courts, District Courts, Family Justice and Juvenile Courts as well as the Coroners’ Court.

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In January 2015, the Singapore International Commercial Court was established as a division of the High Court and part of the Supreme Court of Singapore.

Small Claims Tribunals

The Small Claims Tribunals were established in 1985 to simplify the collection of small debts in an informal atmosphere. Advocates and solicitors are not allowed to appear before the Small Claims Tribunals and the parties must represent themselves.

The Small Claims Tribunals may handle claims not exceeding SGD10,000 and, subject to written agreement by the parties, claims not exceeding SGD20,000. However, the Small Claims Tribunals can only hear and determine any claim if it is made within one year from the date on which the cause of action accrued and the claim relates to a dispute arising from any contract for the sale of goods or the provision of services; or is a claim arising from any contract relating to a lease of residential premises not exceeding two years; or is a claim in tort in respect of damage caused to any property (except damage in connection with a motor vehicle accident). The Tribunal’s jurisdiction does not extend to any claim which the State Courts have no jurisdiction to hear.

If a claim has been lodged with the Small Claims Tribunals, no other claim based on the same cause of action can be lodged in any other court unless proceedings before that other court were commenced before the claim was lodged with the Small Claims Tribunals, or where the claim before the Small Claims Tribunals has been withdrawn or abandoned. The Small Claims Tribunals have a duty to discontinue the proceedings if the claim is beyond the Small Claims Tribunals’ jurisdiction.

Claims are commenced by completing and lodging the prescribed form with the Small Claims Tribunals and paying the prescribed fees. When a claim has been filed, the Small Claims Tribunals will invite all the parties to


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the dispute for consultation with a view to effecting a settlement acceptable to all parties. In the event that no settlement can be achieved, the Small Claims Tribunals will fix a date and place for the hearing of the case, notify the claimant and the respondent and arrange for service of a copy of the claim on the respondent. The hearing is held in a relaxed and informal manner. If necessary, the Small Claims Tribunals have the power to summon witnesses and to request for the production of documents. Each Small Claims Tribunal is presided over by a referee who is legally qualified. The Tribunal makes an order after the hearing, and any award stands as an order of a Magistrates’ Court, capable of enforcement with leave of the court.

On 17 May 2018, the Small Claims Tribunal (Amendment) Bill (the SCT Bill) was introduced into Parliament. It was passed and read for the second time on 9 July 2018. The SCT Bill introduces amendments to expand the jurisdiction of the Small Claims Tribunals, and improves the Tribunals’ processes and strengthens their powers to manage cases. The following are some of the key changes proposed by the SCT Bill:

• The monetary limits of claims filed at the Tribunals will be increased to SGD20,000 by default, and can be increased by the consent of all parties to SGD30,000.

• Tribunals will be able to hear hire-purchase claims under the Consumer Protection (Fair Trading) Act (the CPFTA) in addition to certain consumer claims already being heard by the Tribunals under the CPFTA, such as in relation to unfair practices.

• The limitation period for lodging a claim in the Tribunals has been extended to two years allowing the parties more time to negotiate and settle their disputes amicably, whilst ensuring that there remains enough time for parties to file their claims should they not settle amicably.

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• The Registrar or a Tribunal is empowered to order parties to attend mandatory mediation at the Community Mediation Centre, or before any other person.

• A Tribunal is required to adopt a judge-led approach at the Adjudication Stage.

• A Tribunal will have the power to dismiss a claim if the claimant is absent without reasonable cause and order costs against parties generally.

• The District Court may, even if it refuses leave to appeal, remit a case back to the Tribunal for reconsideration, or order a re-hearing presided by a different Tribunal Magistrate.

As at the time of this update, the SCT Bill has not been enacted and there is no given timeframe as to when these changes are expected to be enacted.

Magistrates’ Courts

The Magistrates’ Courts have jurisdiction to try claims which do not exceed SGD60,000. Any party to the proceedings, except a corporate entity, may appear personally. A corporate entity must be represented by counsel.

District Courts

The District Courts have jurisdiction to try claims not exceeding SGD250,000, and in the case of road traffic accident claims or claims for personal injuries arising out of industrial accidents, claims of up to SGD500,000.

Procedure in the State Courts is governed by the Rules of Court.


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High Court

The civil jurisdiction of the High Court extends to claims exceeding the sum of SGD250,000. Only the High Court has jurisdiction to hear and try actions in rem. High Court procedure is also governed by the same Rules of Court.

Singapore International Commercial Court

As part of the Supreme Court, the Singapore International Commercial Court (SICC) is designed to deal with transnational commercial disputes. Generally, the SICC has the jurisdiction to hear and try an action if:

(a) the claim in the action is of an international and commercial nature;

(b) the parties to the action have submitted to the SICC’s jurisdiction under a written jurisdiction agreement; and

(c) the parties to the action do not seek any relief in the form of, or connected with, a prerogative order (including a mandatory order, a prohibiting order, a quashing order or an order for review of detention).

The SICC may also hear cases which are transferred from the High Court. SICC proceedings may be heard by either one or three judges. Appeals from the SICC will be heard by the Court of Appeal which will consist of either three or five judges.

Although the Court of Appeal hears appeals from the SICC, the panel of judges which may sit in appeal for SICC cases differ from appeals from the High Court. In this regard, in addition to the usual panel comprising of the chief justice and judges of appeal, including judges and senior judges (former judges of the Supreme Court re-appointed for a fixed term), international judges (distinguished individuals from various jurisdictions

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appointed as judges of the Singapore International Commercial Court) may hear appeals from the SICC if the chief justice so requires.

Court of Appeal

The Court of Appeal is the final appellate court in Singapore. Where the amount or value of the claim is equal or less than SGD250,000 and for certain types of decisions (see Appeals below), leave to appeal must be obtained usually from the High Court before an appeal can be made to the Court of Appeal. The Court of Appeal comprises the chief justice and the judges of appeal. A High Court judge may, on the request of the chief justice, sit as a judge of appeal. For civil and criminal matters, the jurisdiction of the Court of Appeal is exercised by three or any greater uneven number of judges of appeal. For appeals from all interlocutory matters, the Court of Appeal may consist of two judges of appeal. No judge can sit as a judge of appeal if the appeal is against that judge’s decision.

Other Tribunals

There are a number of tribunals established by legislation to deal with specialised areas of law which exercise judicial or quasi-judicial power such as the Industrial Arbitration Court and the Copyright Tribunal.

Industrial Arbitration Court

The Industrial Arbitration Court handles the registration and certification of collective agreements, resolution of disputes between employers and employees’ trade unions relating to breach of employment contracts, the payment of wages, etc. The settlement of disputes is achieved by collective bargaining between the employer and the trade union, or by arbitration or conciliation. If necessary, the court will refer a question of law to the attorney general for his opinion.


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Copyright Tribunal

The Copyright Tribunal assists in the determination of remuneration payable to the owner of copyright. The tribunal may, at its discretion or at the request of a party to the proceedings, refer a question of law to the High Court for determination.

Jurisdiction

The courts in Singapore have jurisdiction in personam and in rem. The Singapore courts have jurisdiction as of right over a dispute, based on the presence in Singapore of the party or thing (e.g., a ship) against which the action is directed, as well as based on submission of a party to the jurisdiction of the Singapore court. Thus, where the defendant can be served with the proceedings in Singapore, or if a foreign defendant voluntarily and unconditionally enters an appearance, the Singapore court has jurisdiction even if the case has little or no connection with Singapore. This is subject to its discretion not to exercise its jurisdiction and stay the proceedings in appropriate cases.

Where the intended defendant is not in Singapore, the Singapore courts will assume jurisdiction over him if he has been served with the writ or originating summons in the circumstances authorised by and in the manner prescribed by the Rules of Court. The leave of the court is required to serve the defendant outside of Singapore. The grant of leave is discretionary and is only granted where the dispute falls under the various permissible categories listed in the Rules of Court. Service out of jurisdiction may be granted (among others) where

(a) relief is sought against an intended defendant who is domiciled, ordinarily resident, carrying on business or has property in Singapore;

(b) an injunction is sought against an intended defendant to compel him to do or not to do anything in Singapore;

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(c) the claim is brought in respect of a breach of a contract made in Singapore, or governed by Singapore law, or containing a term conferring jurisdiction on the Singapore court;

(d) the claim is brought in respect of a breach committed in Singapore of a contract wherever made;

(e) the claim is founded on a tort (civil wrong) wherever committed, resulting in damage sustained in Singapore;

(f) the claim is founded on a tort (civil wrong) wherever committed, which is constituted (at least in part) by an act or omission occurring in Singapore;

(g) the subject matter concerns land in Singapore;

(h) the claim is brought to enforce any judgment or arbitral award; and

(i) the action has already been brought against one party duly served in or out of Singapore and where another party outside Singapore is a proper or necessary party thereto.

Language

English is the only language used by the Singapore courts. Where a document is not in the English language, it must be translated into English by a qualified translator before it will be accepted by the Singapore courts.

Legal Profession

The legal profession in Singapore is a “fused” profession, i.e., there is no division into barristers and solicitors. Practicing lawyers in Singapore are known as “advocates and solicitors of the Supreme Court of Singapore.” Some of the more senior practicing lawyers are conferred the honorific title of “senior counsel” by the chief justice.


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As the legal profession in Singapore is fused, lawyers conducting major commercial disputes generally work as a team. Typically, a team will consist of a partner, associates, paralegals, expert witnesses and clients’ representatives. Since lawyers are deemed officers of the court, they have, in addition to their legal and professional duties to their clients, a duty to the court to act fairly and honestly.



There are two modes of commencing action: writ of summons and originating summons. The first type of originating process is often used in actions involving commercial disputes. An originating summons is typically used where the dispute concerns matters of law where there is no substantial dispute of fact and is required by law. The plaintiff (claimant) brings an action by issuing a writ of summons containing details of the parties and a brief endorsement of claim, or a full statement of claim. If the writ is endorsed with a brief endorsement of claim, the plaintiff must subsequently file a statement of claim setting out all the facts and the cause of action for the defendant (respondent) to admit or rebut. After the writ of summons has been issued, it must be served personally on the defendant. Where the defendant is within the jurisdiction, the originating process must be served within six months from the date of issue. Where the defendant is outside the jurisdiction, service must be effected within 12 months from the date of issue.

Memorandum of Appearance

When the defendant has been served with the writ of summons within the jurisdiction, he must file a memorandum of appearance to the action within eight days after the date of service. Where service is effected outside jurisdiction, the time for entry of an appearance is usually 21 days after the date of service.

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Failure to enter an appearance will allow the plaintiff to enter judgment in default of appearance. If the defendant wishes to challenge the jurisdiction of the Singapore court to hear the case, he must apply to the court for an order to stay or to set aside the proceedings or for other appropriate relief not later than the time limited for filing his defence (which is 14 days after the last day for entering an appearance). If his application fails, he will be deemed to have submitted to the jurisdiction of the Singapore court unless he applies to the court for leave to withdraw his appearance and such application is granted.

Summary Judgment

A plaintiff may apply to the court for summary judgment against a defendant on the grounds that the defendant (i) has no defence to a claim included in the writ (or a particular part of such a claim) or (ii) has no defence to such a claim (or a particular part of such a claim) except as to the amount of any damages claimed. Before a plaintiff is entitled to make such an application for summary judgment, he must have served a statement of claim on the defendant and that defendant must have served a defence to the statement of claim. This procedure is only available in those cases where the facts are clear and there is no issue or question in dispute which should be tried by the court. The evidence is given in the form of an affidavit with all necessary supporting documents as appropriate. If the application succeeds, the court will enter judgment for the plaintiff. If it fails, the court will grant the defendant leave to defend either unconditionally or with conditions such as payment into court or by providing a banker’s guarantee for the claim amount.

An application can also be made to determine questions of law or the construction of documents where such a question is suitable for determination without a full trial and where such a determination will fully dispose of the entire cause or matter or any claim or issue therein.


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Pleadings

After being served with a statement of claim by the plaintiff, the defendant has to file a defence setting out the facts in answer to the plaintiff’s claim. If the defendant has a claim against the plaintiff, the defendant may include his claim in his defence. This document is called a defence and counterclaim. Upon receipt of a defence (or a defence and counterclaim), the plaintiff may file a reply to the defence (or a reply and defence to counterclaim). These documents, together with the statement of claim, are called pleadings. The system of pleadings amounts to a formal exchange of allegations, aimed at defining the issues between the parties. All pleadings must contain only the material facts on which the party relies, and not the evidence by which those facts may be proved.

The court has wide powers to allow amendments to the pleadings at any stage, subject to costs, and to order the parties to provide further and better particulars where the pleadings disclose insufficient details. The two main purposes of pleadings are to identify the issues in dispute in advance so as to assist the court in resolving the conflict expeditiously, and not to allow a party to catch the other party by surprise.

Discovery of Documents

After the exchange of pleadings has been completed, the parties and their lawyers are required to make full disclosure of all documents which are or have been in their possession, custody or power relevant to the issues in the action, and on which the parties will rely, or would adversely affect or support another party’s case. This process is called discovery. A list of documents setting out all the documents in chronological order is first filed and thereafter the parties will proceed to inspect and make copies of the documents listed therein.

Privileged documents are exempt from disclosure. Communications with legal advisers for the purpose of obtaining legal advice are privileged. This

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includes documents in which such communications are intrinsically embedded. Documents tending to incriminate or expose a party to a penalty under Singapore law are also privileged. Certain communications are privileged only when litigation is contemplated or pending (e.g., correspondence passing between solicitors and non-professional agents or a third party). Internal memoranda of a party are not by their nature privileged, except where the sole or dominant purpose of the document is to obtain legal advice (determined at the time the document in question was created) and when there was a reasonable prospect of litigation.

Documents which contain matters confidential to a party and not otherwise privileged must be disclosed, but the court may order a controlled method of disclosure to protect the confidentiality of the documents.

Where discovery by a party is inadequate, the other party may apply to the court for further or more specific discovery. Failure to comply with an order for further discovery may result in the dismissal of the action or the striking out of the defence, as the case may be.

Discovery is an important part of the litigation process, and its extent and expense in commercial actions can be considerable. Settlement of actions often occurs at this stage both for this reason and also because the discovery process can bring to light information which may have an important bearing on the strengths and weaknesses of the parties’ respective positions.

Unlike the US, where depositions are commonly used, the civil procedure in Singapore does not provide for oral discovery. However, deponents may sometimes be examined on the contents of their affidavits.

There exists an opt-in framework for parties who wish to request for and/or apply for discovery of electronically stored information and the supply of electronic copies of such documents, i.e., electronic documents in


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their native form. However, in a bid to curb excessive proliferation of e-discovery, the courts have required parties to negotiate in good faith as to the appropriate scope of and/or limits on their discovery/disclosure obligations. Such good faith discussion would also include issues like whether parties are prepared to make voluntary disclosures, the giving of e-discovery in stages according to an agreed schedule as well as the format and manner in which copies of the discoverable documents shall be supplied.

If parties are unable to agree on an electronic discovery protocol, the party seeking discovery of electronically stored documents may apply for an order. The Court will take into consideration matters, such as the number of electronic documents, the nature and complexity of issues, the value of the claim and the ease of retrieval of electronic documents.

Admissions and Interrogatories

A party may by notice seek written admissions from the other party, without leave of the court.

A party may also, without leave of the court, address written questions called interrogatories to the other party and require him to answer on affidavit. The opposing party may apply to the court within 14 days for the interrogatories to be varied or withdrawn. The interrogated party can claim privilege on the same grounds as those applicable to discovery.

Exchange of Witness Statements

The rules and practice directions applicable to both the High Court and the State Courts require (in most cases) the advance disclosure of each party’s evidence-in-chief (the substance of what a witness proposes to say at trial) in respect of factual witnesses as well as expert witnesses. Such statements will normally be ordered to stand as the witnesses’ evidence-in-chief at trial, subject only to cross-examination by the opposing party’s solicitors.

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In this way, the material facts and allegations which are contained in the pleadings and the evidence relied on by a party to prove its claim or defence are disclosed prior to the trial. Any party or witness may not be allowed to be called to give evidence at trial if his affidavit of evidence-in-chief has not been exchanged unless the Court grants a dispensation.


An action can be withdrawn or discontinued unilaterally by the plaintiff not later than 14 days after service of the defence on him. The defendant may withdraw his defence at any time or discontinue a counterclaim at any time not later than 14 days after service on him of a defence to counterclaim. The party withdrawing or discontinuing will have to pay costs to the other party, on the standard basis (which is less than the costs the solicitor will normally charge his client). At any time before trial, the action may also be withdrawn without leave of court if all parties consent, and produce to the registrar of the court such written consent signed by all parties.

If a memorandum of service and a memorandum of appearance is not filed and a judgment not obtained within 12 months after the validity of a writ for the purpose of service has expired, the action is deemed to have been discontinued automatically. This will also apply to cases where more than one year has elapsed and no party has taken any step or proceeding in the matter.

A party may, with leave of the court, discontinue an action or counterclaim. The court may make an order accordingly on such terms as to costs, the bringing of a subsequent action or otherwise, as it thinks just.

If a party brings a subsequent action for the same or substantially the same cause of action before paying the costs of the previous action to the other party, the court may, on application by the other party, stay the proceedings in the subsequent action until those costs are paid.


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Interim/Interlocutory Remedies


A plaintiff may apply to the court for an interlocutory (interim) injunction to restrain the defendant from committing a wrong and to preserve the status quo until the rights of the parties have been finally determined by the court. The grant of an interlocutory injunction is both temporary and discretionary.

A party has broad rights to apply for an injunction before or even after trial, even if an injunction is not part of his cause of action. In urgent cases (and/or where it can be shown a forewarned defendant might take steps to negate or frustrate the efficacy of a court order) the application can be made ex parte (i.e., without notice to the other party) and even before, but conditional upon, the issue of the writ. The courts’ jurisdiction in this regard is wide and can be exercised whenever it is right or just to do so, having regard to settled principles. The most important of these principles are that the applicant must show: (1) that there is a serious question to be tried (not that he is likely to succeed at trial); (2) that he cannot be adequately compensated by damages alone; and (3) that the balance of convenience between the parties lies in favor of granting the injunction. The applicant of an ex parte injunction must give full and frank disclosure of all material facts to aid the court in deciding whether to grant the injunction, failing which the injunction may be set aside subsequently. The applicant is also obliged to give an undertaking in damages to the court to compensate the respondent should the injunction be proven to be unwarranted.

Evidence in an interlocutory application is given by affidavit. In Singapore, affidavits are sworn before a commissioner for oaths. If the affidavit is sworn abroad, it may be sworn before a judge, notary public or a person having authority to administer oaths in a Commonwealth country, and in

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the case of any other country the seal or signature of a consular officer of a Commonwealth country.

Freezing Orders (Mareva Injunction)

Where an action or pending action properly brought within the jurisdiction involves a claim of a debt or damages against a defendant, an interlocutory injunction may be obtained to restrain the defendant from dealing with his assets both within and outside of the jurisdiction pending the outcome of the trial. This is known as a freezing order (previously known as a Mareva Injunction).

This type of injunction has become widely used, and often has the effect of bringing the parties to settlement terms at an early stage. However, strong evidence is required before a judge will be prepared to make such an order, as its effect on a defendant can be severe as the injunction may be extended to third parties such as banks, i.e., restrain banks from dealing with the defendant’s account. The judge will need to be satisfied that there is a valid cause of action, a good arguable case, that the defendant has assets (for a domestic Mareva injunction, the assets must be in Singapore) and that there is a real risk of their dissipation if an injunction order is not granted.

A plaintiff is also obliged to make full and frank disclosure of all material facts and to give an undertaking in damages as well as an undertaking to pay expenses reasonably incurred by third parties such as banks as a result of the injunction.

Search Orders (Anton Piller Orders)

An interlocutory injunction can also be granted to prevent a defendant from destroying evidence in his possession before trial. This is presently termed a search order (previously known as an Anton Piller order). Such an order may also direct the defendant to permit the plaintiff to enter his premises, to search for goods or documents belonging to the plaintiff or


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which are relevant to the plaintiff’s claim (e.g., counterfeit goods), and to remove, inspect or make copies of relevant material. Such an order may also compel the disclosure of names and addresses of suppliers or customers. An independent supervising solicitor has to be appointed to accompany the plaintiff and his solicitors for the search and seizure. The role of the supervising solicitor is to explain to the defendant the purpose of the order, the defendant’s rights, the types of documents, etc., that can be taken by the plaintiff and generally to see that the process is carried out properly and expeditiously. This type of injunction is commonly used in actions involving infringement of intellectual property rights and abuse of confidential information.

As such an order amounts, in effect, to civil search and seizure, the relevant jurisprudence has developed detailed substantive and procedural requirements which a claimant must comply with, together with sanctions for failure to do so.

Provided the judgment creditor satisfies the court that a judgment debtor is likely to leave Singapore to avoid payment of his debt, having regard to his conduct or the state of his affairs, the judgment creditor may apply to the court to have the judgment debtor arrested and be orally examined as to his ability to pay the debt.

An arrest may also be made in a pending action if the plaintiff can satisfy the court that the judgment debtor who carries on business in or ordinarily resides in Singapore, with a view to prejudice the plaintiff, has absconded or is about to abscond or has disposed of or removed his property from Singapore. The court may also in a pending action, on an application being made by the plaintiff, grant an order to seize the judgment debtor’s properties as a pledge or surety to answer the claim of the plaintiff until the trial of the action on similar grounds.

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Other Interlocutory Orders

Other important interlocutory orders are for the detention or preservation of the subject matter of the action; the sale of perishable property; recovery of personal property claimed in the action but subject to a lien; or the appointment of a receiver of property.

Costs

“Costs” principally refers to the fees and expenses a party is obliged to pay his own lawyers and experts. Court fees, including hearing fees, are also payable.

In the High Court, hearing fees are payable from the fourth day of trial onward. For claims below SGD1,000,000, hearing fees are fixed at SGD6,000 for the whole or part of the fourth day; SGD2,000 for the whole or part of the fifth day; SGD3,000 for each day or part thereof of the sixth to tenth days; and thereafter SGD5,000 per day or part thereof. For claims above SGD1,000,000, hearing fees are fixed at SGD9,000 for the whole or part of the fourth day; SGD3,000 for the whole or part of the fifth day; SGD5,000 for each day or part thereof of the sixth to tenth days; and thereafter SGD7,000 per day or part thereof. In the District Courts and the Magistrates’ Courts, hearing fees start from the second day of trial at a fixed rate of SGD500 and SGD250 per day, respectively.

The court has the discretion to order reimbursement of costs and the amount of such costs. The unsuccessful party in proceedings will almost invariably be ordered to pay the costs of the successful party. The amount allowed is usually assessed on a “standard basis”, that is, a reasonable amount for all costs reasonably incurred, with any doubts as to reasonableness being resolved in favor of the paying party. The successful party rarely obtains full reimbursement for all his costs.

In some cases the costs payable by the unsuccessful party are agreed after negotiation. If no agreement is reached, the costs are determined by the


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procedure of “taxing” (i.e., assessing), with a detailed bill of costs placed before an assistant or deputy registrar.

The Supreme Court has published guidelines for such costs awards to provide litigants with a general indication on the quantum and methodology of the costs awards in specified types of proceedings in the Supreme Court. These guidelines take into account past awards made, internal practices and general feedback. The precise amount of costs awarded, however, remain at the discretion of the Judicial Officer making the award, who may depart from the amounts set out in the costs guidelines depending on the particular circumstances of each case.

Lawyers generally charge for their work at hourly rates, although they will also negotiate fees with reference to notional daily or hourly rates. Contingency fees are unlawful in Singapore as being contrary to public policy. However, it is permissible for a lawyer to act outside of a narrow exception created by the Court of Appeal, which applies when a client is impecunious, in the knowledge that he would likely only be able to recover his fees or disbursements if the claim was successful or costs were ordered in his client’s favor. In addition, as of 2009, insurance broker Lockton has offered after-the-event (ATE) insurance, i.e., insurance purchased after litigation has been initiated. It is envisaged that the insured pays a nominal premium upfront (or no premium at all). In the event the insured loses his case, the insurer will cover the parties’ legal costs as well as the premium of the ATE insurance. Where the insured wins his case, the full premium will be paid out of the damages he receives. It is worth noting, however, that the legal validity of such insurance has yet to be challenged in courts.

Payment into Court

A defendant may at any stage in the action pay into court a sum for which he considers he is at risk as to liability or which he would be prepared to pay to dispose of the action. A payment into court then puts the plaintiff at risk, because if he does not accept the amount paid within 14 days and

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obtains no more than that amount upon judgment at the trial, he will generally be liable for all his own legal costs and the defendant’s legal costs from the date of the payment into court.

The payment into court is not brought to the attention of the trial judge until after the court’s decision is pronounced, when the question of the award of costs is being considered.

Offer to Settle

Any party to proceedings may make an offer to settle to the other party at any time before the court disposes of the matter. The offer must be open for acceptance for at least 14 days unless the matter has meanwhile been disposed of. Such an offer to settle is deemed an offer of compromise made without prejudice save as to costs.

Where an offer to settle is made by a plaintiff and not accepted by a defendant, and the plaintiff obtains judgment not less favorable than the terms of the offer, the plaintiff is entitled to tax his costs on the “standard basis” up to the date of the offer and on an “indemnity basis” from that date, unless the court orders otherwise. Likewise, where an offer to settle is made by a defendant and not accepted by a plaintiff, and the plaintiff obtains judgment not more favorable than the terms of the offer, the plaintiff is entitled to tax his costs on the “standard basis” to the date of the service of the offer and the defendant is entitled to tax his costs on the “indemnity basis” from that date, unless the court orders otherwise.

Ultimately the court has a wide discretion in awarding costs, whether on the “standard basis” or on the “indemnity basis.” As an offer to settle is made without prejudice, if not accepted, the offer and relevant correspondence are not disclosed to the court until all issues, other than costs, have been decided by the court.


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Security for Costs

A foreign plaintiff without assets in Singapore, or a Singapore registered company plaintiff that is insolvent, may be ordered by the court to provide security for the proportion of the defendant’s costs that he may have to pay if unsuccessful in the action. The defendant making the application must show either that the plaintiff is ordinarily not resident out of the jurisdiction, it reasonably believes the plaintiff is unable to pay the costs of the defendant if ordered to do so, the plaintiff’s address is not, or incorrectly, stated on the originating process, or the plaintiff has changed address during the course of the proceedings.

Security can be given in any manner, at such time, and on such terms as the court may direct, including payment into court, a guarantee or solicitors’ undertaking. More than one application for security may be made by a defendant during the course of an action. There is no requirement for a defendant to give security, except where a counterclaim is made by a foreign defendant without assets in the jurisdiction, or by an impecunious Singapore company defendant.

Appeals

Appeals from the Small Claims Tribunals are made to the High Court. An appeal against a tribunal’s decision can only be made on the grounds that the tribunal has erred on a question of law, or that the claim was outside the tribunal’s jurisdiction. Leave to appeal must first be granted by the district judge before an appellant may file a notice of appeal to the High Court. The application for leave must be filed within 14 days from the date of the referee’s order while the notice of appeal must be filed within one month from the date of the order granting leave to appeal. Appeals from the registrar (including deputy registrars) of the State Courts are to a district judge in chambers. Under the proposed SCT Bill, where the District Court refuses leave to appeal, it is empowered to remit a case back to the

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tribunal for reconsideration, or order re-hearing presided by a different tribunal magistrate.

Appeals from the registrar (including assistant registrars) of the High Court are to a judge of the High Court in chambers; appeals from a judge of the State Courts are to a judge of the High Court. Appeals from the High Court are to the Court of Appeal (composed of two or three judges of appeal). A party may also appeal from any judgment or order of the SICC by filing a notice of appeal to the Court of Appeal.

Before an appeal to the Court of Appeal from any hearing other than a trial of an action can be lodged, the judge may hear further arguments in respect of the judgment or order, if any party to the hearing, or the judge, requests for further arguments before the earlier of (a) the time the judgment or order is extracted; or (b) the expiration of 14 days after the date the judgment or order is made. Notwithstanding this, a party is not required to request for further arguments before he files a notice of appeal in respect of the judgment or order.

Not all appeals can be automatically brought to the Court of Appeal from the High Court and the Singapore International Commercial Court. Certain matters are non-appealable. These include consent orders, final orders, orders giving unconditional leave to defend any proceedings, an order setting aside unconditionally a default judgment.

In addition, certain orders of the High Court are appealable only with leave of the High Court. These include an order refusing leave to amend a pleading, an order giving security for costs, an order giving or refusing discovery, and an order refusing a stay of proceedings.

In particular, leave has to be obtained where the value of the subject matter is equal or less than SGD250,000.


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A judgment takes effect from the time it is pronounced. Interest runs on the amount of the judgment from the date of judgment. If the rate of interest is not contractually agreed, the statutory rate applies. The current statutory rate as prescribed by the Supreme Court Practice Directions is 5.33% per annum, which may change from time to time.

The principal methods of enforcement of judgment debts or the carrying out of orders of the court are by

(a) issue of a writ of execution (directing the bailiff, an officer of the court, to seize and sell the defendant’s goods to satisfy the judgment debt); or writ of possession (directing the bailiff to obtain the property ordered to be returned to the plaintiff);

(b) presentation of an originating summons to wind up a company defendant or to declare bankrupt an individual defendant;

(c) examination of the judgment debtor (in the case of a company, one of its officers) before an assistant or deputy registrar by oral cross-examination on oath about debts owing to him and what other property or means he has of satisfying the judgment. He can be required to produce relevant books or other documents. He can be fined or committed to prison for failure to comply with any requirements of the examination;

(d) garnishee proceedings, where debts due to the defendant from a third party may be ordered to be paid directly to the plaintiff to satisfy the judgment (the law does not permit the judgment debtor’s salaries and/or wages to be garnished);

(e) writ of execution on immovable property, where a writ of seizure and sale is imposed on an interest in land owned by the defendant;

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(f) appointment of a receiver over the defendant’s interest, e.g., where the defendant is joint tenant of property, or will become entitled to fees not yet earned; and

(g) proceedings for contempt, where a judgment or order requires a person (or in the case of a company, any of its officers) to do an act within a specified time, or not to do an act, and that judgment or order is disobeyed. The person disobeying may be fined, or his property may be seized, or he may be committed to prison.

Committal is the ultimate punishment for contempt, and may be ordered where there has been flagrant or repeated failure to carry out undertakings given to the court or disobedience of a court order.

Often in international business transactions the debtor may not have any assets in Singapore but the creditor knows or suspects that there may be assets abroad. A Singapore judgment can be registered and enforced in any country where an agreement has been reached as to reciprocal enforcement of judgments. A Singapore judgment can be enforced in most Commonwealth countries. In the case of non-Commonwealth countries, an agreement for reciprocal enforcement of judgments has been reached with the Hong Kong SAR. In those countries where there is no provision for reciprocal enforcement of judgments, it may be necessary to commence fresh proceedings in reliance on the Singapore judgment.


There are three regimes in Singapore for the enforcement of foreign judgments:

• the Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264);

• the Reciprocal Enforcement of Foreign Judgments Act (Cap 265);


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• the Choice of Court Agreements Act 2016; and

• by way of action at common law.

Reciprocal Enforcement of Commonwealth Judgments Act

The Reciprocal Enforcement of Commonwealth Judgments Act (the RECJA) facilitates the enforcement in Singapore of judgments or orders of superior courts of the UK and gazetted Commonwealth countries, including Australia, New Zealand, Malaysia, India (except the states of Jammu and Kashmir), and Brunei Darussalam. This means that the Act does not apply to judgments or orders issued by the subordinate courts of the said countries. The RECJA applies only to judgments or orders made in civil proceedings whereby a sum of money is made payable under the judgment or order (foreign money judgment).

If a foreign money judgment is obtained in a country designated under the RECJA, an application can be made to the Singapore High Court to register that foreign money judgment. The application must be made within 12 months after the date of the foreign money judgment or such longer period as may be allowed by the High Court. Once the judgment is successfully registered, the foreign money judgment can, from the date of registration, be enforced in the same manner as a Singapore judgment, provided the judgment debtor has not succeeded in setting aside the registration on one of the prescribed grounds in the RECJA. The successful registrant under the RECJA is entitled to his costs for registration.

The RECJA should be the first recourse for any foreign money judgment creditor looking to enforce in Singapore because if he commenced action based on the registrable foreign money judgment, he will not be entitled to costs even if successful, unless he can show that his application to register under the RECJA would have been refused, or unless the court orders otherwise.

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Reciprocal Enforcement of Foreign Judgments Act

The Reciprocal Enforcement of Foreign Judgments Act (REFJA) is a similar framework to the RECJA except that it is a registration mechanism for foreign money judgments issued by the superior courts of non-Commonwealth countries which have been gazetted. To date, only Hong Kong SAR has been gazetted under the REFJA with effect from 1 July 1997. The REFJA applies to judgments or orders made by a superior court in Hong Kong SAR in civil or criminal proceedings for the payment of a sum of money in respect of compensation or damages to an injured party. They include foreign money judgments given in an action of which the subject matter was immovable property situated in the Hong Kong SAR, or movable property present in the Hong Kong SAR at the time of the proceedings.

An application may be made within six years after the date of the foreign judgment. Once the judgment is successfully registered, the foreign money judgment may be enforced in the same way as a Singapore judgment provided the judgment debtor has not succeeded in an application to set aside the registration.

Singapore courts will not entertain proceedings for the recovery of sums payable under a foreign money judgment registrable under the REFJA, i.e., foreign money judgments from the superior courts of Hong Kong SAR, unless it is by way of registration proceedings under the REFJA.

The Choice of Court Agreements Act 2016

The Choice of Court Agreements Act 2016 (CCA) came into operation on 1 October 2016. It gave effect to the Convention of 30 June 2015 on Choice of Court Agreements (Convention) which establishes an international legal regime requiring a state which is a party to the Convention (Contracting State) to (a) uphold exclusive choice of court agreements designating the courts of Contracting States in international civil or commercial cases; and


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(b) recognise and enforce judgments of the courts of other Contracting States designated in exclusive choice of court agreements.

The CCA applies to international civil or commercial disputes. It has no application to consumer contracts, employment contracts, and matters relating to family law, succession, bankruptcy and insolvency.

A foreign judgment will be recognised and enforced if it has effect and is enforceable in the state in which the judgment originated. However, there are certain mandatory and discretionary grounds for refusing recognition or enforcement.

Action at common law

Where a foreign judgment falls outside the ambit of RECJA, REFJA or CCA, the judgment creditor may commence proceedings at common law to have the foreign judgment enforced or recognised in Singapore.

A foreign judgment in personam given by a foreign court of competent jurisdiction may be enforced by an action at common law as long as the foreign judgment is for a sum of money, issued by a court of law and is final and conclusive on the merits. It is not necessary for the foreign judgment to be for a sum of money if the judgment creditor is applying only for recognition of the foreign judgment. The foreign judgment is generally regarded as conclusive by the Singapore courts as to any matter thereby adjudicated upon and cannot be impeached for any error, whether of fact or of law.

Apart from the foregoing, Singapore law requires that the foreign court has international jurisdiction over the party sought to be bound and it is jurisdictionally competent under its own law. Singapore courts will refrain from enforcing a foreign judgment if it is shown that the plaintiff procured it by fraud, or if its enforcement would be contrary to public policy or if the proceedings in which the judgment was obtained were opposed to natural justice.

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Summary proceedings on the foreign money judgment may be instituted on the ground that the defendant has no defence to the claim.

Arbitration Law


Domestic arbitration is governed by the Arbitration Act (Cap 10) (AA), which was enacted in 2001 to align the existing laws applicable to domestic arbitration with the 1985 UNCITRAL Model Law on International Commercial Arbitration (the Model Law). The AA creates an arbitration regime that is in line with international standards while still preserving key features of existing arbitration practices that are deemed to be desirable for domestic arbitrations.


In 1992, as part of the overall effort to enhance Singapore as a premier international arbitration locale, a sub-committee of the Law Reform Committee commenced a detailed review of the then-existing arbitration law of Singapore. The result was the Singapore International Arbitration Act (Cap 143A) (the IAA), which came into force on 27 January 1995.

The IAA applies to an international arbitration as well as to domestic arbitrations in which parties have agreed in writing for its application. An arbitration is “international” if the following apply:

(a) at least one of the parties to an arbitration agreement, at the time of the conclusion of the agreement, has its place of business in any state other than Singapore; or

(b) one of the following places is situated outside the state in which the parties have their places of business, i.e., the place of arbitration if determined in, or pursuant to, the arbitration agreement; or any place where a substantial part of the obligations of the commercial


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relationship is to be performed or the place with which the subject matter of the dispute is most closely connected; or

(c) the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country.

If a party has more than one place of business, the place of business will be that which has the closest relationship to the arbitration agreement. The IAA largely adopts the Model Law and limited provisions of the 2006 amendments to the UNCITRAL Model Law. This brings Singapore in line with many other countries that have adopted the Model Law as a basis for their international arbitration law, giving the arbitration procedural law framework in Singapore a greater degree of familiarity to international commercial parties.

The IAA enhances the freedom of the parties to decide on the arbitration procedures subject to the non-derogable provisions of the IAA and the Model Law as adopted and/or supplemented by the IAA. Express language is required to opt out of the Model Law and Part II of the IAA. In that event, the arbitration will be governed by the domestic Arbitration Act.

The IAA also better defines the powers of the Singapore courts to provide appropriate support to the arbitration process, and the limited extent of curial supervision over international arbitration proceedings. It specifies those limited instances where the High Court may intervene to set aside an award other than those provided for under the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the 1958 New York Convention) (Singapore has ratified the said instrument and enacted it under the IAA).

Singapore’s pro-arbitration approach has also been strengthened with recent amendments made to the IAA in 2010. Those amendments provide for the power of the Singapore courts to order interim measures in support of foreign arbitration, i.e., arbitrations with seats outside of Singapore.

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Additionally, they provide that an arbitration agreement may be made by means of electronic communications. Finally, the amendments empower the minister to appoint any person holding office in an arbitral institution or other organisation to authenticate “made in Singapore” arbitration awards and arbitration agreements, and certify copies thereof, for the purpose of enforcement of these awards in 1958 New York Convention countries.

The IAA also defines the powers of the arbitrator very widely. The IAA contains a number of innovative provisions. For example, Section 22 provides that court proceedings ancillary to an international arbitration held pursuant to the provisions of the IAA will be held in camera on the application of any party to the proceedings, thus giving the parties the ability to preserve one of the main perceived advantages of arbitration, that of confidentiality. The Singapore courts have unequivocally recognised the concept of confidentiality in arbitration. Where Singapore is the seat of the arbitration proceedings, parties have a duty to preserve confidentiality subject to limited exceptions. The IAA also recognises that parties to international arbitration may come from different legal traditions and the arbitrator(s) may adopt an inquisitorial process, and may decide the dispute in justice and good faith, or as a conciliator, with the agreement of the parties.

Singapore is a signatory to various bilateral investment treaties and free trade agreements. Some of these contemplate the possibility of arbitration under the International Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (ICSID) (the Washington Convention). Singapore is a signatory to the Washington Convention, which is implemented in the Arbitration (International Investment Disputes) Act (Cap 11).


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Under the IAA, court intervention in an arbitration is restricted, and there are limited circumstances where a party may seek recourse against an arbitral award. There is no power for the court to rule on a question of law, and a party may not appeal an award on a question of law. By contrast, under the AA, parties may apply to the court for a determination of a question of law, and may also appeal an award on a question of law, with the leave of court.

Under the IAA and AA, an arbitrator’s appointment may be challenged only if circumstances exist which give rise to justifiable doubts as to his impartiality or independence or he does not possess the qualifications agreed to by the parties. However, the court cannot appoint an arbitrator as a replacement. The replacement arbitrator is appointed in accordance with the applicable rules of the arbitration.

The Singapore court has the power to grant a stay of Singapore court proceedings in favor of arbitration, including a foreign arbitration, under Section 6 of the IAA and Article 8 of the Model Law, so as to give effect to the parties’ arbitration agreement. The Singapore court is also empowered to make interim orders for the preservation of property or the parties’ rights which forms the subject matter of the dispute to be arbitrated, in addition to the stay order.

Staying Orders

The ground upon which a Singapore court may refuse to order a stay of proceedings is limited to only when it is satisfied that the arbitration agreement is null and void, inoperative or incapable of being performed. In all other circumstances, so long as there is a dispute between the parties to an arbitration agreement, the IAA mandates that the Singapore court orders a stay of proceedings whereas the power to grant a stay under the AA is discretionary.

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The Singapore International Arbitration Centre (the SIAC) commenced operations as of 1 July 1991 with the aim of enhancing Singapore as a leading center for international arbitration. SIAC was formed as an independent, non-profit organisation designed to cater to all forms of arbitration, whether under the SIAC’s own rules, or under other established institutional (e.g., ICC Rules of Arbitration) or ad hoc (e.g., UNCITRAL Arbitration Rules) rules that the parties may wish to select to govern their arbitration.

With the many advantages Singapore has as an international commercial dispute location, SIAC enjoys the same level of international recognition and acceptance as other established international arbitration centers. Recent developments elsewhere in the region have enhanced the attractiveness of Singapore as a regional center of choice for the resolution of international commercial disputes. In the 2018 International Arbitration Survey, Singapore was ranked the third most preferred seat of arbitration globally, while the SIAC was the third most preferred arbitral institution in the world. This made Singapore and the SIAC the top seat and institution in Asia respectively.

The SIAC is also constantly developing links with arbitration centers from other countries around the world. For example, the SIAC entered a joint venture with the International Centre for Dispute Resolution (the ICDR), the international division of the American Arbitration Association (the AAA) in 2007 to open the International Centre for Dispute Resolution-Singapore. It is the ICDR’s fourth global office and its opening has been largely recognised to enhance Singapore’s standing as a premier center for international commercial arbitration. More recently, the SIAC entered into a Memorandum of Understanding (MoU) on 12 October 2018 with the China International Economic and Trade Arbitration Commission (CIETAC). The MoU is intended to promote international arbitration as a preferred method of dispute resolution for resolving international disputes.


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Arbitrations conducted under the rules of the ICC can be heard in Singapore. Frequently companies from different countries contracting in Asia will provide in their agreement for disputes to be submitted to ICC arbitration in Singapore under Singapore law or another law, even though neither of the parties may be from Singapore, and the performance of the contract has nothing to do with Singapore. ICC arbitration is internationally recognised and respected and, for that reason, is acceptable to multinational corporations. Singapore is recognised as being a forum within Asia which is able to handle large arbitrations comfortably, and has lawyers from many jurisdictions used to dealing with complex disputes work. On 23 April 2018, the ICC opened up a case management office in Singapore.

In late 2009, Maxwell Chambers was opened. Maxwell Chambers is a dedicated facility for the conduct of arbitrations in Singapore. It is also home to offices of a number of leading arbitration institutions, including the SIAC, SiARB, ICDR, ICC, WIPO, PCA and the LCIA as well as a number of barristers’ chambers, have also established a presence at Maxwell Chambers. Maxwell Chambers will be expanded, and the works are expected to be completed in 2019. When completed, Maxwell Chambers Suite (the new name for the whole complex) will triple the size of the present Maxwell Chambers.

Other Arbitral Institutions

There are certain other institutions which administer arbitrations in Singapore, includingthe Singapore Chamber of Maritime Arbitration. For example, in the case of building contracts, there is a clause in the Articles and Conditions of Building Contracts issued by the Singapore Institute of Architects (SIA) that incorporates an arbitration clause. In the event of a dispute, the parties are to give notice to arbitrate and to agree to the appointment of an arbitrator. If parties cannot agree on an arbitrator, the president or vice president of the SIA will nominate an arbitrator at the

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request of the parties. The arbitration is conducted in accordance with the Arbitration Rules of the SIA.

Ad Hoc Arbitration

In addition to arbitrations conducted under the auspices of the SIAC and other arbitral institutions, many ad hoc arbitrations have been conducted in Singapore.


Singapore is a signatory to the 1958 New York Convention. The IAA adopts the relevant provisions of the 1958 New York Convention. An arbitration award obtained in Singapore is enforceable in another signatory state (there are currently some 130 signatory states) in accordance with the provisions of the 1958 New York Convention and the applicable local legislation.

Arbitration awards obtained in Singapore may, on application to the court, be enforced as if it were a judgment of the court. If the respondent has assets in Singapore, a great variety of means of enforcement are available, and the jurisdiction of the court is not limited by the absence or otherwise of the respondent in Singapore.

Arbitral awards of foreign countries that are party to the 1958 New York Convention are summarily enforceable in Singapore with the leave of the court in accordance with the provisions of Part III of the IAA.


The grounds upon which a challenge to an international arbitration award may be launched have been circumscribed. Article 34 of the Model Law which has the force of law pursuant to Section 3 of the IAA, lists the grounds upon which an award may be set aside by the Singapore High Court. These include the following grounds:


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(a) a party was under some incapacity, or the arbitration agreement was not valid under the law to which the parties have subjected it, or, failing any indication thereon, under the law of Singapore;

(b) one of the parties was not given proper notice of the arbitration proceedings or the appointment of an arbitrator;

(c) the award deals with matters not within the terms of the submission to arbitration or contains decisions beyond the scope of submission of arbitration, provided that the court may set aside only the part of the award which contains matters not submitted to arbitration (if such matters are separable from those submitted to arbitration);

(d) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of the Model Law from which the parties cannot derogate, or, failing such agreement, was not in accordance with the Model Law;

(e) the subject matter of the dispute is not capable of settlement by arbitration under the law of the state;

(f) the arbitration agreement is illegal under the governing law the parties have selected; or

(g) the award is in conflict with the public policy of the state.

The IAA provides additional grounds for setting aside an international arbitration award. These are as follows:

(a) if the making of the award was induced or affected by fraud or corruption; or

(b) if a breach of the rules of natural justice occurred in connection with the making of the award by which the rights of any party have been prejudiced.

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Alternative Dispute Resolution and Mediation

Alternative Dispute Resolution (ADR) most commonly takes the form of assisted negotiations, facilitated by a neutral third party. The involvement of that third party is often the element that may allow the process to succeed, even where direct negotiations between the parties or their lawyers have failed.

The Singapore judiciary led the way in promoting methods of ADR in Singapore, initially as part of reforms aimed at increasing the effectiveness and efficiency of the Singapore court system. The State courts have introduced a court dispute resolution mechanism, by which the court may refer a dispute to mediation or neutral evaluation. A code of ethics was issued to govern the conduct of mediators and mediation at conferences.

The Singapore Mediation Centre, established in 1997 under the auspices of the Singapore Academy of Law, provides commercial mediation services. It has issued rules of mediation and a code of conduct for mediators. It maintains a panel of mediators and also trains mediators and provides private, non-court-based mediation.

The Singapore International Mediation Centre (SIMC) was launched in November 2014. The SIMC features a panel of international mediators and aims to provide world-class mediation services targeted at the needs of parties in cross-border commercial disputes.

On 1 November 2017, the Mediation Act came into force. It covers international commercial mediation and strengthens the framework for enforcement of mediated settlements conducted in Singapore. One of the key features is it allows parties to apply to a court to record their mediated settlement agreement as an order of court. This allows the agreement to be directly and immediately enforceable as a court order should there be a breach of its terms subsequently.


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On 2 October 2018, a Convention on the Enforcement of Mediation Settlements and accompanying Model Law was published. The Convention will be named the Singapore Mediation Convention (the Convention). The aim of the Convention is to implement an international framework for the enforcement of mediated settlements in a similar manner to the way the 1958 New York Convention acts as a framework for the enforcement of arbitral awards. The Convention is expected to be signed in Singapore on 1 August 2019 and will only come into force six months after ratification by at least three United Nations States. The Convention is expected to rectify concerns around enforcement of mediation settlements.

The various forms of ADR available in Singapore include the following:

Mediation/Conciliation

Mediation/conciliation is a process by which the parties to a dispute voluntarily engage the assistance of a neutral third party to help them resolve their dispute by negotiated agreement without adjudication. The third party has no power to make any decisions for the parties or to impose his view upon them. The parties reserve their right to resolve the matter by litigation or arbitration if they cannot do so by mediation/conciliation. The terms “mediation” and “conciliation” are often used interchangeably.

Early Neutral Evaluation

An early neutral evaluation is a procedure by which a neutral evaluator will meet with the parties at an early stage of the dispute to assist them to narrow and define the issues, and to make a confidential assessment of the dispute, thereby promoting settlement discussions.

Mediation-Arbitration

An amalgam of mediation and arbitration, the process of mediation-arbitration involves an attempt to first resolve a dispute by mediation. If

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that fails, the parties will proceed to arbitration. The parties may agree that the mediator may subsequently act as the arbitrator, although this may create a conflict of function. The parties may therefore provide that the mediator may do no more than give an advisory opinion, and then stand aside for another person to arbitrate.

With the establishment of the SIMC, the SIMC, together with the SIAC, introduced a new arbitration-mediation-arbitration process and accompanying model clause (available at www.siac.org.sg). This is a process where a dispute is first referred to arbitration before mediation is attempted. If parties are able to settle their dispute through mediation, their mediated settlement may be recorded as a consent award. The consent award is generally accepted as an arbitral award and, subject to any local legislation and/or requirements, is generally enforceable in approximately 150 countries under the New York Convention. If parties are unable to settle their dispute through mediation, they may continue with the arbitration proceedings.

Recent Developments in Dispute Resolution

Certain notable developments in dispute resolution are noted below:

(a) As mentioned above, on 2 October 2018 a Convention on the Enforcement of Mediation Settlements and accompanying Model Law was published. The Convention will be named the Singapore Mediation Convention. The aim of the Convention is to implement an international framework for the enforcement of mediated settlements in a similar manner to the way the 1958 New York Convention acts as a framework for the enforcement of arbitral awards. The Convention is expected to be signed in Singapore on 1 August 2019 and will only come into force six months after ratification by at least three United Nations States. The Convention is expected to rectify concerns around enforcement of mediation settlements.


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(b) Again, as mentioned above, the SIAC entered into a MoU on 12 October 2018 with CIETAC. The MoU is intended to promote international arbitration as a preferred method of dispute resolution for resolving international disputes.

(c) On 31 August 2018, Singapore and China signed a Memorandum of Guidance (MoG) on the Recognition and Enforcement of Money Judgments in Commercial Cases. The MoG is intended to assist facilitation and promotion of mutual understanding of the laws and judicial processes between the Supreme Court of Singapore and the Supreme People’s Court of China, with a view towards smoothening the process and providing guidance for litigants on the applicable law and regulations that govern the enforcement of foreign judgments in Singapore and China. This is intended to enhance business confidence by providing greater legal support for companies in both countries and cooperation under the Belt and Road Initiative in China.

(d) The Singapore High Court determined its first application brought under the CCAA since its inception on 1 October 2016 in the case of Ermgassen & Co Ltd v Sixcap Financials Pte Ltd [2018] SGHCR 8. In granting the application, the Singapore High Court provided an analysis of the legal framework surrounding the CCAA and the factors the Court would consider in such application. In summary, the applicant must show that the foreign judgment comes from the court of a contracting state, is a final decision and is not a procedural ruling or interim decision. The applicant must also show that the underlying contract includes an exclusive choice of court agreement, relates to commercial or civil matters and was concluded after the Hague Convention entered into force in the contracting state. The Singapore High Court also provided guidance on the supporting documentation that would normally be required in order to successfully obtain recognition and enforcement. In particular, the applicant must exhibit a complete and certified copy of the foreign judgment.

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(e) The Singapore High Court also decided for the first time in the case of China Medical Technologies Inc (in liquidation) and another v Wu Xiaodong and another [2018] SGHC 178 that the Court has the power to grant a Mareva injunction in support of foreign Court proceedings. This case demonstrated that if there is a good arguable case on the merits and a real risk of asset dissipation then an additional form of relief is accessible to a foreign plaintiff. The Court granted the Mareva injunction applying the position in Multi-Code v Toh Chin Toh Gordon and others [2009] 1 SLR (R) in its judgment to determine the power of the Court.The perquisites for granting a Mareva injunction in aid of foreign Court proceedings were identified as:

(i) The plaintiff must have a reasonable accrued cause of action against the defendant that is recognised or justiciable in a Singapore Court;

(ii) The defendant must be subject to the in personam jurisdiction of the Singapore Court;

(iii) There must be assets within the territorial jurisdiction of Singapore which could be the subject of a Mareva injunction; and

(iv) Substantive proceedings must be brought in Singapore against the defendant, although those proceedings might be stayed in favour of proceedings elsewhere.

The Court added an additional factor to be taken into consideration, which is whether the foreign Court proceedings are capable of giving rise to a judgment that may be enforced in Singapore.

(f) On 10 September 2018, the Insolvency, Restructuring and Dissolution Bill (the IRD Bill) was introduced by the Ministry of Law. The IRD Bill introduces a new omnibus legislation that consolidates the personal and corporate insolvency and restructuring laws currently under the Bankruptcy Act and the Companies Act. If passed, the Bankruptcy Act


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will be repealed in its entirety and the provisions in the Companies Act relating to corporate insolvency and restructuring will be repealed. The IRD Bill enhances Singapore’s regulatory regime for insolvency practitioners and strengthens Singapore’s debt restructuring regimes. Some of the key proposed changes include, inter alia:

(i) Secured creditors will be required to notify the trustee administering a bankruptcy within 30 days after a bankruptcy order if they intend to claim interest on a debt for the period after making of the order. Currently, secured creditors do not need to indicate this intention. This change is intended to allow trustees to see all of a bankrupt’s assets and liabilities early on.

(ii) A new “wrongful trading” provision. A company trades wrongfully if the company incurs debt or liabilities without reasonable prospect of meeting them in full when the company is, or becomes, insolvent. The Court will be empowered to declare that any person who was a knowing party to the company trading wrongfully will be personally liable and responsible for those debts or liabilities.

(iii) Licensing of insolvency practitioners who must meet minimum qualifications and prescribed requirements to obtain and renew their licences, and provision for the investigation and discipline against insolvency practitioners for breaches of their conduct as insolvency practitioners.

(iv) Courts will be empowered to make orders restraining certain actions and proceedings against a company on an application by a company that has proposed a compromise or an arrangement with its creditors. An automatic moratorium of not more than 30 days will apply when application is made.

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(v) Companies will be allowed to place itself into judicial management provided the creditors agree to it and support it doing so. Currently, a company has to seek a Court order to enter into judicial management.

(vi) A restriction on the operation of certain types of ipso facto clauses to help facilitate the attempts of a company to restructure by protecting its valuable commercial contracts from being terminated.

As at the time of this update, the IRD Bill has not been enacted and there is no given timeframe as to when these changes are expected to be enacted.

(g) On 23 October 2018, the Ministry of Law launched a new Singapore Infrastructure Dispute-Management Protocol to help parties involved in mega infrastructure projects manage disputes and minimise the risks of time and cost overruns. Under the new protocol, parties will appoint a Dispute Board at the start of a project comprising up to three neutral professionals who are experts in relevant fields such as engineering, quantity surveying and law. The Dispute Board will follow the project from start to finish and proactively help to manage issues that may arise through a range of customised dispute avoidance and resolution processes.


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Wong & Leow LLC


The Dispute Resolution group has extensive experience in all aspects of commercial and construction dispute resolution. This includes acting as principal counsel for clients in institutional arbitrations held under the ICC, SIAC Rules, KLRCA and BANI arbitration rules, as well as ad hoc arbitrations held under UNCITRAL and other rules. The group has also advised on or been involved in proceedings under the ICSID Convention, AAA International Arbitration Rules, LCIA Rules, and LMAA Terms, and appeared in Singapore court proceedings arising from arbitrations.

The group also conducts and coordinates the resolution of cross-border disputes and enforcement working with Baker & McKenzie offices around the world. Together with the Singapore courts litigation capability of Wong & Leow LLC, they are able to offer a full range of dispute resolution services in relation to all areas of business, including project finance, infrastructure projects, power and energy projects, building and construction projects, international investments, joint ventures, intellectual property and e-commerce issues, license agreements, distributorship agreements, insurance and reinsurance, and sale of goods. The group also has wide experience in mediation and other forms of ADR methods, as may be appropriate to the dispute.

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Please feel free to get in touch with one of the Singapore Office Dispute Resolution Partners below.

Contacts

Andy Leck Tel: +65 6434 2525 [email protected]

Nandakumar Ponniya Tel: +65 6434 2663 [email protected]

Celeste Ang Tel: +65 6434 2753 [email protected]


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Legal System

Taiwan (Republic of China or ROC) has a codified system of law, with the emphasis of the legal system placed on statutes, rather than case law. The major codes are the Civil Code, the Code of Civil Procedure, the Criminal Code, and the Code of Criminal Procedure (Codes). The contents of the Codes are drawn from the laws of other countries with similar codified systems (e.g., Germany and Japan) and from traditional Chinese laws. The supreme law of Taiwan is its constitution. The judicial system is composed of three tiers: the Supreme Court, high court and district court.

All civil and most criminal litigation originate at the district court level as the court of first instance. These cases may be presided by either a single judge or a panel of three judges for civil matters, or by a panel of three judges for most criminal matters, with a limited number of exceptions under which a single judge may be allowed to preside. The ruling of the district court at first instance may be appealed to a three-judge panel sitting either at the district court or at the high court. The ruling of the court of second instance may be further appealed to a five-judge panel sitting at the Supreme Court. Questions of law and fact are decided at trials at both the first and second instance. Appeals to the Supreme Court are limited and specified by relevant statutes but are generally available for all (but smaller) cases. As the Supreme Court only reviews questions of law, an appeal can only be made to the Supreme Court on the grounds that the lower courts misapplied the law. As judges alone decide all cases in Taiwan, there is no provision for jury trials. Although the Supreme Court functions as the final judicial authority for civil and criminal matters, it does not hear cases involving constitutional law issues. Such cases are heard by the Constitutional Court, a court composed of 15 justices, including the president and vice president of the Judicial Yuan.

There is a separate administrative court for appeals from administrative rulings. The administrative court is composed of two tiers, namely, the


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High Administrative Court and the Supreme Administrative Court. For cases subject to the simplified procedure (eg. the value of the subject matter is lower than NTD400,000), the two tiers are the administrative litigation division of the district court and the High Administrative Court.

The final judicial remedy is to appeal to the Supreme Court or the Supreme Administrative Court, as the case may be.

Foreign judgments are enforceable in Taiwan if the court in which the enforcement is sought is satisfied with the following conditions: (a) the foreign court rendering the judgment has jurisdiction over the subject matter according to Taiwan law; (b) the performance ordered by such judgment or its litigation procedure is not contrary to the public order or good morals of Taiwan; (c) in cases wherein the judgment was rendered by default by the foreign court, the defendant was served within the jurisdiction of such foreign court or process was served on the defendant in Taiwan with judicial assistance of Taiwan courts; and (d) judgments of Taiwan courts are reciprocally recognized and enforceable in the foreign court rendering the judgment.

Arbitration as an alternative dispute resolution method is also available in Taiwan. According to the Arbitration Act of Taiwan, written agreements to arbitrate are given binding effect by the courts. The Arbitration Act requires the courts to reject the enforcement of the foreign arbitral award if the arbitral award is contrary to the public order or good morals of Taiwan, and if the dispute is not arbitrable under Taiwan law. The courts may issue a dismissal order with respect to an application for recognition of a foreign arbitral award if the country where the arbitral award is made or whose laws govern the arbitral award does not recognize Taiwan’s arbitral awards. Aside from what is required above, the Arbitration Act also allows other grounds for challenging the enforcement of a foreign arbitral award.

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Courts

The judicial system of Taiwan is composed of three levels of courts: the district courts, the high court and the Supreme Court (Courts). The district court is a trial court. The high court, including all of its branch courts and the district courts, is divided into civil division and criminal division. Further, there are specialized divisions in the district courts dealing with domestic relations, juvenile, traffic, public security, election and labor cases.

According to the Intellectual Property Organization Act, which was promulgated on 28 March 2007, Taiwan’s Intellectual Property Court was established and becomes officially operational on 1 July 2008. This is in response to the need for a more centralized and professional litigation system for disputes relating to intellectual property rights.

The jurisdiction of the Intellectual Property Court includes all first and second instances of civil proceedings involving disputes relating to the Patent Act, Trademark Act, Copyright Act, Optical Disk Act, Trade Secrets Law, Integrated Circuit Layout Protection Act, Species of Plants and Seeding Act, Fair Trade Law, and the first instance of an administrative proceeding involving disputes regarding the Patent Act, Trademark Act, Copyright Act, Optical Disk Act, Integrated Circuit Layout Protection Act, Species of Plants and Seeding Act, and Fair Trade Law. As for criminal proceedings involving trademark and secrecy matters under the Criminal Code, violation of the Trademark Act, Copyright Act, Trade Secrets Act or confidentiality preservation order under Intellectual Property Case Adjudication Act, the first instance of criminal proceedings remains under the jurisdiction of the district court. However, the appeal of the first-instance decision of a criminal proceeding for the above disputes is under the jurisdiction of the Intellectual Property Court.

With regard to a civil action, appeals to the high court are as of right in Taiwan but the appellant is required to pay the court fees. Appeals to the Supreme Court are limited and specified by relevant statutes, but are


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generally available for all but the smaller cases. For claims involving property rights, the Judicial Yuan limits the right to appeal to the Supreme Court to claims of at least NTD1.5 million (as at November 2018, USD1 = approximately NTD31). As the Supreme Court reviews only questions of law, an appeal may be made to the Supreme Court only on the ground that the judgment of a lower court is in violation of a law or order.

Although the law provides that the parties are required to orally debate all issues in dispute before the Supreme Court unless the court decides otherwise, in practice, the Supreme Court rarely holds hearings.

As the legal system in Taiwan is based on the civil law (and code-based law) tradition, legal matters are determined in accordance with the codes, writings of legal scholars and judges’ interpretation of the codes. As such, there is comparatively little judge-made law in Taiwan.

Legal Profession

According to the Legal Profession Act of Taiwan, legal counsels must be admitted to bar associations before they can practice as lawyers. The legal profession in Taiwan is a fused profession, which means there is no distinction between barristers and solicitors. A foreign lawyer holding a foreign practicing certificate cannot conduct cases in Taiwan unless permitted by the Ministry of Justice and becomes a member of a local bar association if he or she meets certain qualification requirements. A lawyer admitted to practice in a foreign jurisdiction can practice the law of his original jurisdiction.



A party commences a civil action by filing a complaint at a district court that has jurisdiction over the dispute. The complaint must consist of a statement of facts and cause(s) of claims and be accompanied by

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evidence, including supporting documentation. In the event that the supporting documentation is in a language other than Chinese, Chinese translations must be provided.

The plaintiff in a civil action in a Taiwan court is required to pay the court fee, which is equal to approximately one percent of the value of the claim in the district court level. Although the fee is not refundable, it should be reimbursed by the defendant if the defendant loses the case and is held responsible for the court fee by the court. If the action is settled or if the action is withdrawn, two-thirds of the court fee may be refunded upon the party’s application if it is filed within three months after the settlement or the withdrawal of the action. The court fee should be paid in New Taiwan dollars by cash or by cheques.

A lawyer admitted to practice in Taiwan may only appear in the courts pursuant to a power of attorney duly executed in the lawyer’s favor by his or her client. The recent practice of the courts does not require a power of attorney issued by a foreign party to be notarized by a notary public in the foreign jurisdiction or legalized by the relevant Taiwan consular entity (or its functional equivalent) in the foreign jurisdiction if the other party does not contest to the authenticity of such authorization.

Service of Process

Once the plaintiff pays the court fee, the next step is the service on the defendant. The courts effect service of process (normally along with the first hearing date or a notice requesting the defendant to submit a reply within ten days) either by delivering the documents through a court process server or by delivering them through the post office. If delivered by the post office, the postal delivery person is deemed to be the court process server.

If service of process cannot be effected at the defendant’s residence, office, place of business or by leaving the paper with the defendant’s


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housemate or colleague of suitable age and discretion, it can be effected by depositing the paper with the autonomous agency or police department of the place where service must be effected. Service by deposit takes effect 10 days from the day of the deposit. The court in which the action is pending can, on application, permit service on a party to be effected by constructive notice through publishing the content of the documents on the court’s website or in a newspaper under certain circumstances.

Defense

A defendant must submit a defense within 10 days after receipt of the complaint and no later than five days before the oral argument hearing if one has been designated.

The First Hearing

Once service of process has been completed, the court will schedule the first hearing of the case. In general, matters not alleged in the preparatory proceedings may not be raised during the oral debate proceedings after the conclusion of the preparatory proceedings except in the following situations: (a) matters that must be investigated by the court ex-officio; (b) an allegation does not considerably delay the proceedings; (c) matters not submitted in preparatory proceedings could not be attributable to the party; or (d) matters arising in other unfair situations.

At the first hearing in a case which involves a foreign plaintiff, the following issues are often raised by the defendant:

Security for Court Fees

The defendant has a right to demand that a foreign plaintiff who has no domicile, residence or business establishment in Taiwan be required to post a bond to secure the court fee for potential appeals to the high court and the Supreme Court and the attorney fees the defendant may incur in the

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Supreme Court. The bond may be posted in the form of cash, bank guarantee and cash equivalents, such as negotiable certificates of deposit. Such a motion is generally granted, and the plaintiff is generally not given the opportunity to contest the motion unless it has a domicile, office or place of business in Taiwan. If the defendant proceeds to argue the case without making the motion for the bond security, the defendant is deemed to have waived the right to ask for security to be provided. “The loser pays” principle still applies. Therefore, the bond will be returned to the plaintiff if the plaintiff obtains a favorable judgment finally. Even the plaintiff does not obtain a favorable final judgment, the bond will be returned to the plaintiff as long as the defendant does not file any appeal in the trial procedures of the concerned case given that the defendant does not advance any court fees in the trial proceedings.

Status of the Plaintiff

The defendant can assert that the plaintiff has no legal standing to initiate proceedings. This delays proceedings and results in the plaintiff having to prove that it validly resides in its home jurisdiction.

Counterclaims

The defendant can present oral or written counterclaims at the first hearing. The counterclaim must be presented to the courts prior to the conclusion of final oral debate at the first instance. Otherwise, it is deemed to have been waived. The defendant must pay the court fee, which is equal to approximately one percent of the amount of its counterclaim, unless the subject of the counterclaim is just the opposite to the plaintiff’s claim. No counterclaim can be raised without the opposing party’s consent in the second instance (unless certain circumstances are satisfied). The defendant is also allowed to assert the defense of set-off.


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Applicable Law

Unless the parties have agreed in advance on an applicable law in a contractual dispute, the choice of applicable law is determined in accordance with the Law Governing the Application of Laws to Civil Matters Involving Foreign Elements.

Settlement

It is common for the judge to request the parties to settle the case at the first hearing in accordance with Article 377 of Taiwan’s Code of Civil Procedure. The enforceability of a settlement made in the courts is the same as that of a final judgment.

Subsequent Proceedings

At the first hearing, the judge requires each party to present a statement of facts and claims and provide evidence which they will use to support their version of the facts and claims. A party must produce evidence to support its allegations. If a party is unable to provide evidence at the time of the hearing, the court can adjourn the hearing until evidence can be produced or, if the evidence is to be given by a witness, until the witness can be called to testify at the court.

The first hearing is the first in a series of hearings that will take place before the case is resolved. There is no statutory time period for preparatory proceedings before a trial. Instead, each case progresses as a series of hearings in which each side raises issues and allegations and presents evidence to support its version of how the issues and allegations should be resolved. The judge will set a date for oral debate, which usually takes place six to twelve months after the preparatory proceeding depending on the complexity of the case.

During preparatory proceedings, both parties are encouraged to present as much evidence as possible until the date of final oral arguments. The judge

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can re-open hearings if the judge deems necessary, and request either the parties to present new evidence or further explain the evidence already presented.

Proceedings in Taiwan courts, either civil or criminal, do not involve a jury. All evidence and arguments are presented to the judge in the district court (or a panel of judges in the high court and the Supreme Court) for consideration. As civil proceedings in Taiwan are inquisitorial, rather than adversarial, judges play a very active role during hearings.

Discovery

The discovery procedures in Taiwan courts are provided in the “Evidence” Articles of the Code of Civil Procedure. Common-law pretrial discovery procedures (e.g., request for answers to interrogatories, request for depositions, document production) are generally not available in Taiwan. Each party merely presents, on an ad hoc basis, the evidence that it needs in order to support its factual allegation. Documentary evidence must be submitted to the courts by producing the document. If a document, which is in possession of the other party, is to be used as evidence, a court order, which requires the other party to produce such document, is needed. If the courts consider that the fact to be proved is material, they may order the other party to produce the document. A party has the duty to produce documents which have been referred to in the preliminary pleadings or in the course of oral debate proceedings. In the event that a party disobeys the order for the production of a document in his or her possession without justifiable grounds, the courts may consider that the allegation of the other party in respect of the document is true.

Remedies

Judgment

According to Article 381 of the Code of Civil Procedure, the courts can hand down judgments when cases have progressed to a point where all relevant


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issues have been thoroughly considered and debated. Although the law permits courts in Taiwan to give interlocutory orders on some issues of a case before the conclusion of the legal proceedings, the courts generally do not do so.

After the preparatory proceeding where evidence has been presented to the judge, the judge will announce the date of oral argument and conclude the whole procedure after the oral argument. At the end of the oral argument, the judge will set a date to hand down the judgment when he or she considers that all issues have been fully stated and argued. The judgment will be proclaimed usually within one month following the date of final oral argument.

The final remedy at the full trial stage is set out in a written judgment. The types of remedies available in large commercial disputes are judgment granting payment, declaratory judgment and judgment granting specific performance. In a judgment, the courts can order performance of an obligation or injunction relief. Generally speaking, damages are only compensatory unless both parties have expressly agreed on punitive damages in the agreement. Under certain circumstances, such as consumer protection disputes, the courts will grant punitive damages in accordance with the Consumer Protection Law if any negligence or willful misconduct is found.

Provisional Relief/Provisional Attachment

Availability and grounds

A provisional attachment is granted if the claimant shows that it will be impossible or extremely difficult to satisfy a claim by compulsory execution in the future. According to the courts’ interpretation, this includes that the defendant may dispose of its assets to defeat a claim, create a new encumbrance on its assets or make any disposition

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detrimental to the assets that lead to the defendant’s insolvency or allow the defendant to escape liability.

According to Article 526 of the current Code of Civil Procedure, the burden of proof lies on the creditors to show the above situation exists. Article 526 allows creditors to provide security instead of proving a prima facie case that the above situation exists, if its initial attempt to show this is not satisfactory. Generally, however, the courts require creditors to satisfy the burden of proof.

Prior notice/same-day

The courts generally order provisional attachment without prior notice to the debtor.

Main proceedings

The main proceedings do not have to be in the same jurisdiction. Both the court which has jurisdiction over the main proceedings, and the court where the property to be attached is located have jurisdiction over the application for provisional attachment.

Damages as a result

If a provisional attachment ruling is revoked for certain specific reasons (i.e., it is improper to order such attachment), the creditor should compensate the debtor for any losses incurred in relation to the provisional attachment or the provision of counter security.

Security

If the courts grant the motion, the creditor is normally required to lodge a security for proceeding with the provisional attachment. The courts have discretion to determine the amount of the security. However, the amount is normally equivalent to one-third of the full value of the claim. The


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opponent may prevent the attachment by posting a counter security that is equivalent to the full value of the claim.

Provisional Relief/Provisional Injunction

Availability and grounds

A provisional injunction order can be granted to secure the enforcement of a non-monetary claim if the applicant can show that it will be impossible or extremely difficult to satisfy the claim if there is a change in the status quo of the object claimed. If necessary, to prevent material harm, imminent danger or other similar circumstances, an application can be made for an injunction to maintain the temporary status quo.

Prior notice/same-day

With respect to the application for a provisional injunction, if the requirements are satisfied, the courts can grant a provisional injunction order without prior notice to the debtor if the circumstances justify it.

With respect to the application for an injunction maintaining temporary status quo, the courts generally give the parties an opportunity to be heard before issuing such an order, unless the courts consider it inappropriate to do so. The courts may, if they consider it necessary, order an urgent disposition by a ruling on a motion before issuing an injunction order maintaining temporary status quo.

Appeals

Courts of First Appeal: The High Court

A district court judgment can be appealed to a three-judge panel in the high court. A district court judgment made by a single judge through summary proceedings may be appealed to a three-judge panel in the district court.

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To appeal a civil judgment, the appellant is required to submit a petition to the original court within 20 days following the receipt of the original written judgment setting forth the following:

(a) the parties and the statutory agents;

(b) a statement regarding the judgment of the district court, and a statement of objections to such judgment; and

(c) the extent to which the judgment is objected to, and in what manner the judgment is sought to be revoked or reversed; and

(d) reasons for appeal.

The district court will forward such appeal and relevant documents to the high court for review.

The proceedings in the high curt is similar to that of the district court. However, the scope of oral argument in high court is limited to the extent of appeal. Neither new argument nor new evidence is allowed to be submitted to the high court proceedings unless (a) failure to submit the argument or evidence is due to the violation of law of the district court; (b) the argument or the evidence occurs after the conclusion of oral argument at the district court; (c) the argument or the evidence is to supplement the submitted argument or evidence; (d) the facts are obvious to the court or should be investigated by the court ex-officio; (e) failure to submit the argument or evidence is not imputed to the party; (f) denial of submission of such argument or evidence is unfair. The high court strictly follows these rules.

Court of Second Appeal: The Supreme Court

While appeals to the high court are a matter of right in Taiwan, appeals to the Supreme Court can only be based on a misapplication of law by the lower courts. Appeals to the Supreme Court are limited and specified by


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relevant statutes, but are generally available for all but smaller cases. The parties must be represented by lawyers in the Supreme Court as the Supreme Court only deals with questions of law, rather than questions of fact. The scope of investigation in the Supreme Court is limited primarily to the extent of the appeal unless it is an issue that the court must investigate ex-efficio or for unifying legal opinion.

As the Supreme Court reviews issues of law only, its judgment should be made based on the facts found by the lower courts. If the Supreme Court deems that part of the original judgment is wrong, it should reverse the said part. However, in practice, the Supreme Court seldom hands down its own judgment. As a matter of practice, the Supreme Court remits cases back to the lower courts for most of the time and requests the lower courts to investigate into certain points or issues.

Administrative Appeal

Challenge to Defective Administrative Decisions

Under the Administrative Procedure Act, decisions made by an administrative agency are required to follow the due process. The administrative agency may hold hearings to collect the opinion of interested parties. The Act also describes the effect of administrative decisions and provides the definition of “defective administrative decisions.”

According to the Act of Administrative Appeal, if the rights or interests of a party are infringed by unlawful or improper decisions of central or local government agencies, that party may submit an administrative appeal to the government agency that made the original decision within 30 days upon receipt of the decision. Upon receipt of such appeal, the government agency may decide to revoke its original decision or submit all relevant documents and arguments to a competent government agency that is responsible for reviewing the internal appeal in order to defend its

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decision. The administrative appeal is determined on the basis of available documents. The government agency which reviews the internal appeal may hold an oral debate proceeding if necessary. The appeal decision should be made within three months after receipt of the appeal, with an extension available of up to two months.

Administrative Litigation Proceedings

If a party’s grievance is not resolved by the above-mentioned internal administrative appeal process, he or she may file an administrative litigation proceeding with the High Administrative Court (or the administrative litigation division of the district court if the case is subject to the simplified procedure) within two months after receiving the written administrative appeal decision if his or her rights or interests are infringed by unlawful decisions of a central or local government agency. A party may also commence an administrative litigation proceeding at the High Administrative Court (or the administrative litigation division of the district court if the case is subject to the simplified procedure) if no decision has been made by a central or local government within three months after initiating the internal administrative appeal, or during any two-month extension thereafter.

When a person’s rights have been infringed because a central or local government agency has failed to act when it should have acted within the prescribed period, such person may, after exhausting the internal administrative appeal procedure, initiate proceedings in the High Administrative Court (or the administrative litigation division of the district court if the case is subject to the simplified procedure) to request the said agency to perform an administrative act with respect to the specific subject matter. If a central or local government agency has rejected a person’s application, which he or she had duly applied in accordance with relevant legal provisions, and his or her rights have been infringed by such decision, he or she may also initiate an administrative proceeding.


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A proceeding for declaration of nullity of an administrative decision may be commenced only when there is a denial of the said petition by the government agency responsible for the decision, or when no confirmed reply has been issued within 30 days after the filing of the petition. No proceeding for declaration of nullity may be initiated unless it is initiated by a plaintiff who will immediately benefit from a ruling of the court. The High Administrative Court (or the administrative litigation division of the district court if the case is subject to the simplified procedure) should be the court of first instance.

A proceeding may also be initiated to request specific performance with respect to property interests or non-property interests other than a petition for effecting an administrative decision. With respect to proceedings of request for specific performance, the High Administrative Court (or the administrative litigation division of the district court if the case is subject to the simplified procedure) should be the court of first instance unless provided otherwise.

In administrative litigation proceedings, the High Administrative Court (or the administrative litigation division of the district court if the case is subject to the simplified procedure) is required to deliver a copy of the complaint and all relevant documents to the defendant government agency, and set a time limit for submission of its arguments. The timing for a judgment of administrative proceedings is set by the High Administrative Court (or the administrative litigation division of the district court if the case is subject to the simplified procedure).

The process of administrative proceedings is similar to that of civil proceedings. If the decree of the High Administrative Court (or the administrative litigation division of the district court if the case is subject to the simplified procedure) is based on wrongful interpretation of laws, the disfavored party may then file an appeal with the Supreme Administrative Court (or the High Administrative Court if the case is subject to the simplified procedure) within 20 days upon receipt of the

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judgment of the High Administrative Court (or the administrative litigation division of the district court if the case is subject to simplified procedure).

Enforcement of Local Judgments

Local judgments are enforced through compulsory execution procedures. The execution fee is 0.8% of the claim. Compulsory execution is carried out by the bailiff of the court under the supervision of, and in conjunction with, a court clerk. A compulsory execution may be carried out in respect of

(a) a final and conclusive judgment (a judgment which is not subject to any appeal);

(b) a ruling authorizing a provisional attachment, provisional injunction or provisional execution and other rulings upon which compulsory execution may be made in accordance with the provisions of the Code of Civil Procedure;

(c) a settlement or a mediation reached in accordance with the provisions of the Code of Civil Procedure;

(d) a notarial deed made in accordance with the Public Notarization Law;

(e) a ruling of the court authorizing a compulsory execution in response to an application for permission to sell the mortgaged property by auction filed by the mortgagee; or

(f) other grounds which may be taken as executive titles in accordance with the provisions of other applicable laws.

A compulsory execution on moveable property may be carried out by means of attachment, auction or sale. An attachment of movable property may be carried out by bailiffs in accordance with the order of the responsible judge and under the supervision of a court clerk. An attachment shall be executed either by


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(a) posting a paper script on the property attached; or

(b) leaving a brand or impression of sealing-wax on the property attached.

Compulsory execution against immovables may be carried out by means of attachment, auction or compulsory administration. Attachment of immovables will be carried out by any of the following:

(a) proclamation;

(b) sealing up the immovables attached; or

(c) ordering surrender of a deed.

In the case of compulsory execution enforced against the debtor’s claim for the payment of money against a third party, the execution court should ex-officio prohibit the debtor from collecting such money (or making other dispositions) and prohibit the said third party from paying such money to the debtor. The court may allow the creditors to collect the said money, or assign the said right of claim to the creditors.

Where the debtor, under executive title, is required to perform a specific act and has failed to do so, the court may order a third party to act for the debtor at the debtor’s expense. If no one else can perform the act but the debtor, the court may specify a time limit for the debtor to perform his or her obligation. If the debtor fails to perform, and disobeys the court order, the court may arrest him or her and place him or her in custody, or impose a penalty of no more than NTD300,000. If the executive title is an order allowing an act or prohibiting the debtor from doing a specific act, and the debtor fails to obey, the courts may arrest him or her and place him or her in custody, or impose a penalty of not more than NTD300,000.

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Requirements for Enforcement of Foreign Judgments

Article 402 of the Code of Civil Procedure states that a final and binding judgment rendered by a foreign court should be recognized unless any of the following circumstances is satisfied:

(a) the foreign court rendering the judgment lacks for jurisdiction over the dispute in question according to Taiwan law;

(b) the defendant defeated is not responded to the action brought against him (however, this does not apply where service is made in the country where the court rendering the judgment is located, or where service is effected in Taiwan through judicial assistance);

(c) the contents or litigation proceeding of the foreign judgment is contrary to the public order or good morals of Taiwan; and

(d) judgments given by Taiwan courts are not reciprocally recognized by the foreign country concerned.

Where the requirements of Article 402 are met, the recognition of a foreign judgment will be finalized and a request may be made to the civil execution department of a district court for attachment of the assets of the Taiwan party. In practice, the attachment process usually takes approximately two weeks to complete. The execution fee is 0.8% of the claim. In the case of immovable or high-value assets, it takes approximately two months from the filing of attachment to the moment when the assets are ready for auction. In the case of bank accounts, the minimum execution period is approximately one and a half months.


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Service of Process through “Judicial Assistance”

The procedure for service of process through the judicial assistance of Taiwan courts is provided in the Law Governing the Extension of Assistance to Foreign Courts (Assistance Law). The Assistance Law provides that the request for assistance by a foreign court should be stated in writing (Request for Assistance) and transmitted through diplomatic channels.

The Assistance Law further requires that

(a) the Request for Assistance should state the name, nationality, domicile or residence, or business office or establishment of the person to be served;

(b) the written request and documents to be served through judicial assistance must be translated into Chinese and the translation must be certified as to its accuracy; and

(c) a certification should be issued by the country of the commissioning court declaring that it would render the same degree of assistance should the courts in Taiwan have the same or similar matter which requires the commissioning of one of the foreign country’s courts to handle the matter.

The original foreign court papers do not have to be notarized or otherwise authenticated, but should contain the seal or signature of a member of the foreign court. The judicial assistance procedure may take a long period of time, for it at least takes approximately two to five months to complete the procedure.

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Arbitration

Arbitration Law

The Arbitration Act in Taiwan seeks to reflect the basic principles of international arbitration. As the scope of arbitration matters is not limited to commercial disputes, the parties may enter into an arbitration agreement for disputes that may be resolved by settlement.

Arbitration Agreement

As the arbitration agreement must be made in writing, an oral agreement between the parties will not suffice. An agreement to arbitrate reached by way of an exchange of fax messages, telegrams, letters or any other similar means can be treated as an arbitration agreement in writing.

The parties may determine the rules governing the arbitral proceedings, the place of arbitration, and the language of arbitration. The Act empowers the arbitral tribunal to rule on its own jurisdiction and competence, on the existence or validity of the arbitration agreement, and irregularities in the proceedings.

The Arbitration Act expressly provides that the validity of an arbitration clause that forms part of a principal contract may be determined separately from the rest of the contract. According to the principle of separability, an arbitration clause continues in force and effect if the contract becomes null, void, revoked, rescinded or terminated.

In the event that one of the parties to an arbitration agreement commences a legal action, the court should, upon application by the adverse party, suspend the legal action and order the plaintiff to submit to arbitration within a specified time unless the defendant proceeds to respond to the legal action.


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International Arbitration for Investment Disputes

Although Taiwan is not a party to the 1965 Convention on the Settlement of Investment Disputes (ICSID), which is also referred to as the Washington Convention, Taiwan has entered into bilateral investment treaties with many countries (for example, Singapore, Thailand, Malaysia and India). Due to the lack of formal diplomatic ties with other countries, bilateral investment treaties are regarded as a useful instrument for the promotion and protection of foreign investments.


The Rules of Arbitration Associations were formulated in accordance with Article 54 of the Arbitration Act. These rules provide that all arbitration associations should be organized in accordance with the provisions of the rules to register arbitrators for handling arbitration cases. Although social groups and professional associations are permitted to establish arbitration centers to provide arbitration services in Taiwan, the Arbitration Association of the Republic of China remains to be the oldest and the most active arbitration association in Taiwan. Ad hoc arbitration is also permitted under Taiwan law.

Provisional Relief

Provisional relief (for example, provisional seizures) may be granted by the courts upon application by the applicant before a request for arbitration is submitted to the arbitration association. The courts may grant provisional relief in respect of arbitrations that take place outside Taiwan. However, this practice is not commonly seen in Taiwan.

Enforcement of Arbitral Awards

An arbitral award has the same legal force and effect as a final court judgment in Taiwan. The award will be binding on both of the contending parties. The court may refuse to enforce an arbitral award or revoke an

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arbitral award in certain circumstances. However, the court does not render a new judgment in respect of the matter in dispute. Questions of whether the opinion of the arbitrators is proper and whether the award is proper in terms of substance are matters to be determined by the arbitrators in their sole discretion. The courts will not review the substantive aspects of an arbitral award.

In principle, it is necessary to obtain the court’s enforcement order in order to enforce an arbitral award. According to Article 38 of the Arbitration Act, the court should not grant an enforcement order if

(a) the arbitral award concerns a dispute not contemplated by the terms of the arbitration agreement, or exceeds the scope of the arbitration agreement, unless the offending portion of the award may be severed and the severance will not affect the remainder of the award;

(b) the reasons for the arbitral award were not stated, as required, unless the omission was corrected by the arbitral tribunal; or

(c) the arbitral award commands a party to perform an act that is prohibited by law.

Revocation of Arbitral Awards

A party may institute proceedings in a district court for revocation of an arbitral award based on the following grounds:

(a) the circumstances stipulated in Article 38 of the Arbitration Act (see above) exist;

(b) the agreement to arbitrate was null and void, or has been invalidated before the rendering of the award;

(c) the arbitral tribunal failed to direct either or both of the parties to present its or their contentions, or if either or both of the parties were not lawfully represented in the arbitration proceeding;


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(d) the composition of the arbitral tribunal or the arbitral proceedings is contrary to the arbitration agreement or the law;

(e) the arbitrator(s) violates the obligation of disclosure prescribed in Paragraph 2 of Article 15 of the Arbitration Act and appears to be partial or has been requested to withdraw but continues to participate in the tribunal, provided that the request for withdrawal has not been dismissed by the court;

(f) any participating arbitrator violated his or her duty in the arbitration, and such violation leads to criminal liability;

(g) either of the parties or its agent has committed a criminal offense in respect of the arbitration;

(h) any of the evidence upon which the arbitration was based is found to be forged or fraudulently altered; or

(i) the criminal or civil judgment, court order, or administrative decision upon which the arbitration was based has been rescinded or modified by a subsequent judgment, duly affirmed by an appellate court, or by a subsequent administrative decision.

The foregoing paragraphs (f) to (h) are only applicable where a conviction has been confirmed or where criminal proceedings have not been commenced or have been discontinued for a reason other than insufficiency of evidence. The foregoing paragraphs (d) and (e) to (i) are applicable only when the arbitration result can be adversely affected.

Recognition and Enforcement of Foreign Arbitral Awards

Foreign Arbitral Awards

The Arbitration Act provides that a foreign arbitral award is any arbitral award that is rendered outside of Taiwan, or any arbitral award rendered in Taiwan with foreign arbitration rules as its procedural rules.

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Enforcement of Foreign Arbitral Awards

A court’s order on recognition and enforcement must be obtained before a foreign arbitral award can be enforced in Taiwan. As a rule, the recognition and enforcement of foreign arbitral awards are not limited to any particular countries. Any foreign arbitral award may be enforceable in Taiwan, provided that the requirements of the Arbitration Act are satisfied. The Arbitration Act provides that a court should dismiss the plea for recognizing a foreign arbitral award if

(a) the recognition or enforcement of the arbitral award will be in violation of public order or good morals of Taiwan; or

(b) the dispute is not arbitrable under Taiwan law.

In addition to the above, a court may dismiss a plea for recognizing a foreign arbitral award if the country where the arbitral award was made or whose laws govern the arbitral award does not recognize Taiwan’s arbitral awards on a reciprocal basis.

The requirement of reciprocity arises under Article 49 of the Arbitration Act. As Taiwan is not a signatory to the 1958 New York Convention, the reciprocity requirement can be an obstruction to the recognition of foreign awards. However, Article 49 of the Arbitration Act does not make such a clause compulsory. The courts have given a liberal interpretation of the term “reciprocity” in some cases.

The Supreme Court has held that even if an arbitral award is made in a foreign jurisdiction that does not recognize and enforce arbitral awards made in Taiwan, the court may nevertheless decide to recognize and enforce the foreign arbitral award at its discretion in order to enhance and promote international judicial cooperation.

Courts in Taiwan have recognized and enforced some foreign arbitral awards made in certain countries and jurisdictions, such as the United


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States, the United Kingdom, People’s Republic of China, Hong Kong, France, Switzerland, Japan, Korea and Vietnam. On the other hand, although countries like Singapore, Germany and Canada have substantial commercial ties with Taiwan, there are a few court precedents regarding recognition of arbitral awards rendered in these jurisdictions. As such, in order to ensure that the foreign arbitral award may be enforced, it is suggested that the reciprocity issue be verified beforehand if the parties to a contract wish to arbitrate their disputes in another jurisdiction but intend to enforce the arbitral award in Taiwan.

Resistance to Recognition and Enforcement of Foreign Arbitral Awards

If a party applies to the courts for recognition of a foreign arbitral award which concerns any of the following circumstances, the respondent may request the courts to dismiss the application within 20 days from the date of receipt of the notice of the application:

(a) the arbitration agreement is invalid as a result of the incapacity of a party according to the law chosen by the parties to govern the arbitration agreement.

(b) the arbitration agreement is null and void according to the law chosen to govern the agreement or, in the absence of choice of law, the law of the country where the arbitral award was made.

(c) a party is not given proper notice regarding the appointment of an arbitrator or of any other matter required in the arbitral proceedings, or any other circumstances that lead to lack of due process.

(d) the arbitral award is not relevant to the subject matter of the dispute covered by the arbitral agreement or exceeds the scope of the arbitration agreement, unless the offending portion can be severed from and does not affect the remainder of the arbitral award.

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(e) the composition of the arbitral tribunal or the arbitration procedure is contrary to the provision of the arbitration agreement or, in the absence of an arbitration agreement, the law of the place of arbitration.

(f) the arbitral award is not yet binding upon the parties or has been suspended or revoked by a competent court.

Mediation

Several types of mediation could be undertaken by the parties in a dispute, including mediation in the court, mediation conducted by the mediation committee of a town or city, and mediation conducted by the Public Procurement Commission. Mediation is generally non-binding unless parties agree otherwise.

For government procurement cases, mediation through the Complaints Review Board for Government Procurement matters of the Public Procurement Commission (CRBGP) is a commonly used method. The suppliers invariably apply to the CRBGP for mediation in an effort to resolve commercial disputes with the government. This is because under the Government Procurement Law, a government authority cannot object to applications for mediation. Where a government authority does not agree to the resolution proposed by the CRBGP in a construction-related mediation, it may not object to an arbitration filed by the supplier.

Pursuant to the Arbitration Act, in the absence of any arbitration agreement to the contrary, the parties may choose to submit their dispute to mediation and mutually appoint an arbitrator as a mediator to conduct the mediation. Upon the successful conclusion of the mediation between the parties, the mediator will record the outcome of the mediation in a mediated agreement. A mediated agreement has the same force and effect as that of an arbitral settlement agreement. However, the terms of the mediated agreement may be enforced only if the courts have granted


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an application for the enforcement by a party and issued an enforcement order.

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Baker & McKenzie Taipei


The international character of the Firm is well reflected in the litigation and arbitration matters handled by the Taipei office. The practice includes litigation, both civil and criminal, as well as arbitration/mediation for disputes arising out of international commercial transactions, construction and major projects. Our litigators have acquired considerable experience in dealing with conflicts of law and jurisdictional problems, recognition and enforcement of foreign judgments and arbitral awards.

In addition to the above matters, the Taipei office also handles maritime matters such as ship-building, sales of ships, ship financing and chartering, vessel arrests, and air and sea freight forwarding. We assist clients in negotiations or litigation concerning various types of commercial disputes. In total, the Taipei office Dispute Resolution Practice currently consists of 17 partners as well as 17 associates.

The Taipei office Dispute Resolution Partners include:

Contacts

David T. Liou Tel: +886 2 2715 7238 [email protected]

H. Henry Chang Tel: +886 2 2715-7259 [email protected]

Joseph Fu Tel: +886 2 2715 7369 [email protected]

Shelley Fan Tel: +886 2 2715 7227 [email protected]


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Contacts

Sonya Hsu Tel: +886 2 27157235 [email protected]

Besson Lu Tel: +886 2 2715 7372 [email protected]

Anna Hwang Tel: +886 2 2715 7382 [email protected]

Chien-Hung Lai Tel: +886 2 2715 7221 [email protected]

Robert Lee Tel: +886 2 2715 7273 [email protected]


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Thailand

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Legal System

The Thai legal system is a civil law system. Many of its fundamental legal principles (in areas such as contracts, property, tort law, hire of property, hire-purchase, suretyship, mortgage, pledge, warehousing, agency, bills of exchange and partnerships) have their origins in the codified systems of continental Europe (particularly France and Germany), as well as common-law countries (including English law) and traditional Thai law.

Thailand does not recognize the common-law principle of binding judicial precedent. However, certain persuasive decisions of the Supreme Court are published in the Supreme Court Law Reports.

The principal law of Thailand is the constitution. This is supplemented by the Acts of the Thai Legislature, royal decrees, emergency decrees, ministerial regulations, ministerial notifications, other governmental notifications and local government regulations. The major codes are the Civil and Commercial, Penal, Civil Procedure, Criminal Procedure, Revenue and Land Code.

In accordance with principles set out in the Act on Conflict of Laws, foreign law may serve as the law governing the case, however, it must be proven to the satisfaction of the court that the foreign law is not contrary to public order or good morals, otherwise the court will apply Thai law.

The Thai system of jurisprudence is dualistic. The fact that Thailand has entered into a treaty or convention with a foreign country does not automatically give the provisions of such treaty or convention the force of law within Thailand. Treaties are not law within Thailand until they are made law by legislative enactment, such as an act, royal decree or ministerial regulation.


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Courts

Court of First Instance (Sarn Chanton)

Courts of First Instance consist of district courts (Sarn Kwaeng) and provincial courts (Sarn Chaengwat). Courts of First Instance sit in all provinces. Four courts of First Instance sit in Bangkok, namely, the Civil Court, the Thon Buri Civil Court, the Southern Bangkok Civil Court and the Min Buri Court. There are no jury trials in the Thai legal system.

Court of Appeal (Sarn Uthorn)

The Court of Appeal hears appeals from the courts of first instance having jurisdiction over the Bangkok metropolis and its suburbs. There are nine regional Courts of Appeal which hear appeals from the Courts of First Instance having jurisdiction over other provinces. The Court of Appeal has original appellate jurisdiction for all cases, except those which arise in the labor court, tax court, intellectual property and international trade court, and the central bankruptcy court. Normally three judges constitute a quorum sufficient to consider the appeal presented, however, for interlocutory orders such as those directing further proceedings at trial, only one judge is necessary to form a quorum. For cases of extraordinary importance, the Court of Appeal may convene a general meeting of not less than half of the total number of judges of that Court of Appeal and presided over by the Chief Judge of the Court of Appeal, in order to consider an appeal.

Specialized Court of Appeal (Sarn Uthorn Chumnun Piset)

In order to reduce the burden of the Supreme Court in receiving appeals directly from the labor court, tax court, intellectual property and international trade court, and the central bankruptcy court, in late 2016 the Specialized Court of Appeal was established in order to function as the appellate court for these lower Courts of First Instance with respect to all appeals lodged after 1 October 2016. As in the case of the Court of Appeal,

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three judges constitute a quorum sufficient to consider the appeal presented, except with respect to interlocutory orders where one judge may form a quorum, or with respect to a case of extraordinary importance when a general meeting is convened.

The Supreme Court (Sarn Dika)

The Supreme Court, sitting in Bangkok, is the highest court in Thailand. The Supreme Court is now empowered to decide whether to grant permission for cases to be appealed to the Supreme Court. In doing so, the Supreme Court will take into consideration factors such as public order, public interest and conflicting judgments of appeal courts and existing Supreme Court precedent. Normally three Supreme Court judges constitute a quorum sufficient to consider the appeal presented; however, interlocutory orders may be presided upon by only one judge. For cases of extraordinary importance, the Supreme Court may convene a general meeting of not less than half the total number of Supreme Court judges and the President of the Supreme Court to consider an appeal.

Although decisions of the Supreme Court do not strictly have the role of mandatory precedent, they command great respect and can be expected to guide the decisions of the lower courts.

Special Courts

Central Tax Court

The Central Tax Court hears tax cases of a civil nature. It sits only in Bangkok, although legislative provisions permit expansion to other provinces. Appeals from Central Tax Court decisions are now made to the Specialized Court of Appeal.

Central Labor Court

The Central Labor Court hears cases arising out of labor relations and employer/employee relationships. This court and four branches near


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Bangkok have jurisdiction over Bangkok metropolis and five nearby provinces. There are another nine regional Labor Courts with jurisdiction over other provinces in Thailand. Appeals from decisions of the Central Labor Court and Regional Labor Courts are now made to the Specialized Court of Appeal.

Central Bankruptcy Court

The Bankruptcy Act of 1940 governs bankruptcy proceedings. The act has undergone several major amendments since its original enactment. In 1998 a major amendment was passed, which significantly altered bankruptcy law and procedures. In addition to this amendment, the Act on Establishing Bankruptcy Courts and Bankruptcy Case Procedures was passed in 1999. Because of the complicated and time-consuming nature of bankruptcy cases, a special bankruptcy court was established. The first, the Central Bankruptcy Court, was established in 1997 in Bangkok. The act has been subsequently amended with regard to the process of discharge of the bankrupt from bankruptcy, and in order to allow the use of electronic communications in filing claims with the official receiver in order to facilitate the bankruptcy and reorganization processes. Appeals from decisions of the Central Bankruptcy Court are now made to the Specialized Court of Appeal.

Central Intellectual Property and International Trade Court

Thailand promulgated the Intellectual Property Court Establishment and International Trade and Intellectual Property Procedure Act in October 1996. The Central IP&IT Court, located in Bangkok, was established on 1 December 1997. As in the case of bankruptcy, a special judicial body was considered necessary to deal with complex and time-consuming issues in the fields of intellectual property and international trade law. It was thought necessary to have judges appointed with specialized expertise in these matters. The Central IP&IT Court is structured to facilitate adjudication of international trade disputes, promoting technology transfer

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and rendering judgment in cases where intellectual property rights are alleged to have been violated. In addition, this court has jurisdiction over civil and criminal cases relating to various international transactions. The Central IP&IT Court has special procedures beyond those set out in the Thai civil and criminal procedure codes. Appeals from this court are now made to the Specialized Court of Appeal.

The Administrative Court

The Administrative Court enables persons and corporations to seek relief for grievances caused by acts of the government and its agencies. The judges who sit on the Administrative Court specialize in administrative law and are expected to address cases efficiently and effectively. Decisions issued by the Administrative Court of First Instance may be appealed to the Supreme Administrative Court.

Legal Profession

Lawyers in Thailand prepare litigation and evidence for trial and are responsible for filing suits, pleadings and petitions. To receive a law license and practice in all areas of law in Thailand, Thai citizens possessing a law degree from an accredited university must pass a technical examination administered by the Law Society of Thailand and serve a six-month legal apprenticeship with a qualified law office.

Only Thai nationals with a lawyer’s license may appear or participate as an attorney in any Thai court proceeding. A foreign lawyer may present testimony as an expert witness on foreign law.


Jurisdiction

Thai courts have wide jurisdiction to hear cases for which the cause of action arose in the territorial jurisdiction of the court, or for which the defendant has a domicile in the territorial jurisdiction of the court, or


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where the plaintiff is a Thai national or domiciled in Thailand. These rules apply regardless of the nationality of the parties. A limitation on the jurisdiction of the Thai court contained in an agreement will be deemed contrary to public order and good morals and will be unenforceable in Thailand.

Power of Attorney

In order to authorize an attorney to represent a party in a Thai court, a party must execute a deed of appointment duly authorizing an attorney. The plaintiff may also give its lawyer or any other person a power of attorney to act on his or her behalf. A power of attorney authorizing a Thai lawyer to act on behalf of a party in a litigation proceeding is an essential document. If the plaintiff is a foreign person or corporation, this document must be notarized by a notary public and authenticated by a Thai embassy or consulate. Without a proper power of attorney, the plaint or the answer may be rejected and the party may not be able to present its case.

If a party is a legal entity or juristic person (e.g., a corporation or company), the company must submit documents proving incorporation. Further, the power of attorney must be executed by a person whose identity appears on an officially filed document enumerating its authorized person(s), or whose identity and authority is confirmed by a person whose identity appears on such an officially filed document.

Plaint and Prescription Periods

A civil action commences with the filing of a document called the plaint, detailing the facts and law upon which the plaintiff intends to rely and the relief sought.

In Thai legal proceedings, particular attention must be given to periods of time. If a plaint is not filed within the applicable period of time, all rights to claim will be lost. As such time bars vary, it is essential to be cognizant of the applicable periods of prescription.

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Service of the Plaint

The plaint and other pleadings may be served on the defendant by an officer of the court by personal delivery to the defendant or by leaving or posting it at the defendant’s business premises or dwelling place with a person over the age of twenty years. If the recipient refuses to accept the plaint or other pleadings without lawful cause, the court officer may request a competent administrative or police official to accompany him to act as a witness to the service of the plaint. A court officer is also empowered to serve plaints or other pleadings through registered or express mail with return slip. More recently, regulations have been issued allowing a court officer to serve plaints and other pleadings by courier with return receipt to parties domiciled in foreign countries. If the plaint cannot be served through any of the above procedures, upon the order of the court it may be posted by advertisement in a local newspaper, or in such other manner as the court deems fit.

Answer to the Plaint

Any answer to the plaint admitting or denying the allegations of fact and law set out in it must be filed within 15 days of personal service, or within 30 days if service was undertaken by posting. In practice, a party may request extensions of time to file its answer.

Counterclaims

At the time of answering the plaint the defendant may bring a counterclaim against the plaintiff. This must have a reasonable connection with the original plaint.

Trial Procedures

Approximately two months after the plaint is answered, a pre-trial hearing (called a “settlement of issues conference”) will be held, at which the Court meets with both parties and identifies the disputed matters to be resolved


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by litigation. The Court will then issue a formal order specifying the issues which it will consider in reaching its decision, identifying which party has the burden of proof for each issue, the order in which witnesses and evidence will be presented at trial, and the evidentiary hearing dates. In some instance, e.g. where the court deems the dispute is not complex or the defendant is in default of answer, the court may dispense with the settlement of issues conference and proceed to trial.

The trial will commence at least one month after the settlement of issues conference. All testimony must be given in Thai, or through a qualified interpreter. Upon request of one or both parties, the Court may permit parties to submit written witness statements in lieu of direct examination At trial, the party which is required to introduce its witnesses and evidence does so and then rests. The other party then does the same. Cross-examination and re-examination are permitted. Some Courts permit witness testimony be means of videoconference.

Since an attorney is appointed to represent a party by a power of attorney, the attorney is also permitted to provide testimony on behalf of the party. Such testimony often deals with background issues (for example, the existence of a company, its sales, its products, its trademarks etc). In normal circumstances, however, attorney testimony regarding details of the transaction in dispute is not given weight by the Court if the attorney does not have any personal involvement or knowledge of the matters.

Either party may use expert witnesses if the witness has relevant expertise which may be of value in settling points at issue.

Foreign witnesses are permitted to testify before Thai courts, but qualified translators must be used.

The testimony of witnesses is not recorded directly. Instead, the presiding judge or judges record their notes by dictation during the testimony,

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which is then transcribed and printed. After all testimony from a witness has been adduced, the parties are provided the opportunity to review the transcript, agree to its contents and sign the document. If there is any disagreement, the witness or counsel may request a correction.

Documentary evidence is extremely important in Thai trials. Generally, documents presented should be originals, although reasonable exceptions exist. Unless the court rules otherwise, documents in languages other than Thai must be translated into Thai before they will be accepted as evidence.

At the conclusion of the presentation of witnesses and evidence, the parties are entitled with court permission to present written closing arguments to the court. Unless the court feels that the interests of justice require further trial, the court will then proceed to issue judgment.

Discovery

There is only limited provision for discovery under Thai law. Each party is obliged to disclose documents and witnesses that might be introduced during the course of the trial by submitting a list of evidence to the court and providing a copy of documentary evidence in its possession to the other party. This must be done at least seven days before the taking of evidence.

Inspection

The court is empowered to order the inspection of property that cannot be brought into court, upon such conditions as the court deems fit. The court may appoint experts who may be authorized to perform out-of-court inspections.

Duration of Court Proceedings

In past years, the length of a trial in Thailand was difficult to predict. However, the president of the Supreme Court has implemented a continuous trial method to facilitate trial proceedings. In this regard, at the


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settlement of issues conference, the court, based on the availability of judges and the parties, will endeavor to set consecutive hearing dates for the presentation of both parties’ cases in order to create a continuous trial. Typically, one or two witnesses will be presented each day of the trial. As a general practice, in a reasonably straightforward case, judgment will be issued within two months from the last date of hearings.

Filing Fee

For an amount claimed not exceeding THB50 million, a filing fee equal to 2.0% of the amount of the relief sought, up to a maximum of THB200,000, must be paid when a plaint is filed. That amount claimed exceeding THB50 million will be subject to an additional court charge of 0.1%. If the plaint is: (i) to enforce or set aside an arbitration award rendered in Thailand, the filing fee is 0.5% of the amount of relief sought which does not exceed THB50 million (but not more than THB 50,000) and an additional 0.1% of any amount of relief sought exceeding THB50 million; and (ii) to enforce or set aside an arbitration award rendered outside of Thailand, the filing fee is 1% of the amount of relief sought not exceeding THB 50 million (but not more than THB 100,000) and an additional 0.1% of any amount of relief sought exceeding THB50 million.

Remedies

Interlocutory (interim) Orders

During the course of a trial, the court can issue such orders as are required by justice and permitted by law. At times these orders are upon the application of a party, although the court in many instances has inherent power to issue orders on its own initiative.

Order for Security for Costs

A plaintiff may be required to deposit security for the costs and expenses of the case if the party is not domiciled or does not maintain a business in

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the jurisdiction, or if there is strong reason to believe the plaintiff will, if losing the case, evade the payment of costs and expenses.

Order to Produce Documents, Permit Inspection, Appoint an Expert

The court may order a party to produce documents, preserve documents, permit inspection of things which cannot be brought to court, take testimony at places outside of the courtroom, hear witnesses out of order and appoint experts, among others.

Order for Seizure or Attachment of Defendant’s Property as a Temporary Protection

A party may file an ex parte application for the seizure or attachment before judgment of the whole or part of the defendant’s property if it appears that the defendant intends to remove the property in dispute or transfer, sell or dispose of such property to obstruct the execution of any decree. In practice, however, it is not easy to obtain such an order.

Order for Temporary Injunction

A party may file an ex parte application requesting the court to issue a temporary injunction restraining the defendant from repeating or continuing any wrongful act or breach of contract, or an order stopping or preventing the waste, damage, transfer, sale, removal or disposal of any property in dispute until the case is final or until the court orders otherwise. Again, in practice, orders for temporary injunctions are not easily obtained.

Judgment Upon Motion

The Thai Civil Procedure Code provides that the court may issue a decision which will dispose of the whole case, or any issue in the case on a question of law, upon the application of any party. However, the courts are extremely conservative in their use of this provision.


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Judgments

At the conclusion of the case, the court will issue a judgment setting forth the particulars of the case and a brief statement of the grounds for the decision. The judgment does not usually include detailed discussion of legal principles and theory.

Interest, Attorney Fees and Costs

As part of the judgment the court may award interest and costs against the party losing the case. Unless the court specifies otherwise, costs will include witness fees, lawyer’s fees, fees for service of documents and all other costs or fees payable by law. As a practical matter the amount of attorney fees allowed is low, although the court is authorized under the provisions of the Civil Procedure Code to award up to a maximum of 5% of the amount in dispute as lawyer’s fees.

Class Actions

The Civil Procedure Code was recently amended to allow the filing of class-action complaints. A class-action complaint may be brought by one or several plaintiffs on behalf of a group of similarly aggrieved people. Permitted causes of action are tort, breach of contract and cases involving legal rights, such as environmental claims, labor, securities and trade competition.

Appeals

There are two levels of appellate courts in Thailand: (i) the Court of Appeal and the Specialized Court of Appeal; and (ii) the Supreme Court. Judgments by a Court of First Instance may, on sufficient grounds, be brought to the Court of Appeal or Specialized Court of Appeal, provided that where the appeal is on a question of fact, the claim must exceed THB50,000. Even though new evidence is not normally heard, an appeal may take one to

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three years to be finalized. There is a final appeal to the Supreme Court, provided that the Supreme Court grants permission to consider the appeal.

With the exception of administrative cases which are appealed directly to the Supreme Administrative Court, all appeals must first be made to the Court of Appeal, or in the case of labor cases, tax cases, intellectual property and international trade cases, and bankruptcy and reorganization cases, to the recently established Specialized Court of Appeal.

If the court of first instance rejects the appeal and the defendant files an appeal of the order rejecting the appeal or a dika appeal, the defendant must deposit all applicable fees with the court, and pay or provide security as to the entire judgment to the court, except for the award of the plaintiff’s attorneys fees.

Where the Court of First Instance accepts the appeal, the Court of Appeal, Specialized Court of Appeal or Supreme Court may dismiss the appeal, if it deems the appeal as prohibited. However, it may rectify any errors in the judgment as deemed appropriate in the interests of justice.

Effect of Appeal

Filing an appeal does not act as a stay of execution of a lower court judgment, unless there is a court order to the contrary. Any appellate judgment or order has effect only on the parties involved in the appeal, except when such judgment necessitates inclusion of other parties or an interpleader or where it concerns the status or capacity of a person, the enforcement of the dissolution of a legal entity, bankruptcy orders or the issuance of a judgment determining the right or ownership of property in favor of any party.


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Writ of Execution

A judgment may be executed at any time within 10 years of its issuance. To enforce a judgment, the judgment creditor may file an ex parte application with the court asking for execution. Upon the required showing, a court may order execution by seizure and sale by auction of the judgment debtor’s property and assets, and by attachment of the judgment debtor’s rights of claim against third parties.

Examination of the Judgment Debtor and Other Persons

The judgment creditor may file an ex parte application asking the court to hold an inquiry and to summon the judgment debtor or any other person who is believed to be in a position to give useful information as to the whereabouts of the judgment debtor’s assets.


Thai law does not specifically provide for the direct enforcement or recognition of a foreign judgment in Thailand. Moreover, Thailand is not a party to any treaty or agreement by which a foreign court judgment is entitled to recognition and enforcement in Thailand. Consequently, a new trial based on the merits must be initiated in Thailand. However, foreign judgments and documentary evidence generated during a foreign litigation procedure, including settlement negotiations, may be admissible as evidence in Thailand.

Arbitration Law

As from 1934, arbitration has been used as both an in-court and out-of-court procedure. In-court arbitration, which is infrequently utilized in Thailand, refers to an arbitration which is conducted while a case is pending consideration by a court of first instance. The parties may agree

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to submit all or any issues in dispute to one or more arbitrators for settlement. In-court arbitration is explicitly provided for in the Thai Civil Procedure Code.

The more commonly utilized modern out-of-court arbitration in Thailand is based on the Arbitration Act (2002), a comprehensive legislative enactment addressing not only the enforcement of arbitration awards but also the procedural aspects of arbitration within the Thai legal system. The Arbitration Act was drafted to be congruent with the standards of the UNCITRAL Model Law for Arbitration, with minor variations.

The Arbitration Act governs both domestic and international commercial arbitration under the same rules. The Arbitration Act recognizes the existence of binding arbitration agreements in written agreements irrespective of whether an arbitrator or a set arbitration rules have been designated. It is also clear under the act that an arbitration agreement between governmental agencies and private parties, regardless of whether the agreement is an administrative contract, may be resolved by means of arbitration.

Although Thailand is a party to bilateral investment treaties with various Asian, European, and North and South American nations, Thailand has not ratified the Convention on the Settlement of Investment Disputes.


The Thai court will refuse to hear a complaint if the parties have an agreement to submit disputes to arbitration and one party objects to adjudication of the dispute in court. If a complaint is brought to the court, a party to the arbitration agreement may file evidence of the arbitration agreement, and request that the case be dismissed. If the court finds that there is an arbitration agreement, it will dismiss the court case.


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Under the Thai Arbitration Act, a party is empowered to make an application to the court for a ruling on a question of the arbitral tribunal’s jurisdiction within 30 days of the tribunal having ruled on the issue itself pursuant to the request of a party. In addition, an arbitrator, the tribunal or any party with the consent of a majority of the tribunal may file a petition with a competent local court requesting the summons of a witness or to order the delivery of any documents or objects. The parties to an arbitration proceeding may also apply to a competent court for an interim measure of protection of their interests before or during the arbitral proceedings.


Institutional arbitration services are offered in Thailand by the Thai Arbitration Institute (TAI) under the Office of the Judiciary using its corresponding arbitration rules, the newly established Thai Arbitration Center (THAC) using its arbitration rules, by the Office of the Arbitration Tribunal established by the Board of Trade of Thailand using the Thai Commercial Arbitration Rules, and under other institutional arbitration rules, such as the International Chamber of Commerce.


Under the Thai Arbitration Act, a party may make a request to the arbitral tribunal to correct an error in an award, clarify a specific point in the award or make an additional award, within 30 days of receipt of the award. In addition, a party may apply to the competent court to set aside the award within 90 days of receipt of the copy of the award and the court may set aside the award based on several defined grounds. In the event a party refuses to comply with an arbitration award, the party seeking enforcement of the award is required to file a request with the competent court within three years from the date on which the award was sent to the disputing parties. In the event one of the parties to the arbitration is a Thai government agency, the Thai Administrative Court is the competent court

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for purposes of enforcement. Enforcement of an arbitration award is governed by the Arbitration Act. Upon receipt of the request, the court will hold an inquiry and give judgment without delay, provided that the party against whom the award was rendered had an opportunity to challenge the request. The awards must not fall within any of the grounds for refusal of enforcement.

The Thai court will also allow an application to enforce a foreign arbitral award. As Thailand is a party to the Geneva Convention 1927 and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958, arbitral awards conducted wholly or mainly outside Thailand and involving any party which is not a Thai national may be enforced by the Thai court pursuant to those conventions.

Power to Set-Aside or Challenge the Award or Order

A Thai court may set aside an arbitral award upon application of a party within 90 days of receipt of the award, in the following cases:

(a) A party to the arbitration agreement was under some incapacity under the law applicable to that party;

(b) The arbitration agreement is not binding under the applicable law, or failing any indication thereon, under the law of Thailand;

(c) The party making the application was not given proper advance notice of the appointment of the tribunal or the arbitral proceeding or was otherwise unable to defend the case;

(d) The award deals with a dispute not within the scope of the arbitration agreement;

(e) The composition of the arbitral tribunal was not in accordance with the parties’ agreement, or unless otherwise agreed, in accordance with the Thai Arbitration Act;


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(f) The award deals with a dispute not capable of settlement by arbitration under the law or the recognition or enforcement of the award would be contrary to public policy.

The grounds to challenge enforcement of an award are identical to those denoted above, with an additional ground on the basis that the award has not yet become binding, or has been set-aside or suspended by a competent court or under the law of the country where it was made.

Appeal of Order of Court to Enforce Award

An appeal against the order or judgment of a Thai court to enforce an arbitration award must be made to the Supreme Court or the Supreme Administrative Court, and can only be made if:

(a) the recognition or enforcement of the award would be contrary to public policy or good morals;

(b) the order or judgment is contrary to the provisions of law governing public policy or good morals;

(c) the order or judgment is not in accordance with the arbitral award;

(d) the judge who held the inquiry of the case has given a dissenting opinion; or

(e) it is an order concerning interim measures for the protection of interests of the party under the act.

Mediation or Conciliation

The Civil Procedure Code of Thailand empowers the court to order mediation in cases which are the subject of a civil dispute when the court deems it appropriate, or by the request of the parties. Court-ordered mediation is a confidential, informal, non-adversarial procedure designed to bring the parties to an amicable settlement of disputes. This type of

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mediation is confidential and may also be used at the appellate level, in juvenile court and family court mediation, in the Central Labor Court and in the Central IP&IT Court.

With regard to out-of-court mediation, the Alternative Dispute Resolution Office of the Office of the Judiciary provides mediation rules under which parties may elect to attempt to settle their dispute.


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Baker & McKenzie Bangkok


The Thailand practice has over 250 lawyers, with a full-service practice concentrated both domestically and internationally in the areas of corporate; tax; litigation; corporate compliance; administrative law; insurance disputes; bilateral investment treaty disputes; banking and finance; securities; major projects; investment; shipping; maritime; joint venture; government contracts; construction; trademark, patent and copyright; mining; oil and gas, and environmental law. Clients engaging in dispute resolution include many multinationals doing business in Thailand and a significant number of Thai enterprises and organizations.

The Thai office Dispute Resolution Practice Group comprises a team of 30 lawyers with over 30 years of courtroom experience, an American consultant, eleven partners and a team of experienced litigators. Backing up the litigation team are attorneys who concentrate in anti-counterfeiting and intellectual property abuses, banking and finance, tax and customs, maritime practice, construction, real estate, trade and commerce, capital markets and corporation.

The Bangkok office Dispute Resolution Partners include

Contacts

Chirachai Okanurak Tel: +66 2636 2000 p 3223 [email protected]

Kanit Vallayapet Tel: +66 2636 2000 p 3112 [email protected]

Wynn Pakdeejit Tel: +66 2636 2000 p 3120 [email protected]

Manu Rakwattanakul Tel: +66 2636 2000 p 3102 [email protected]

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Contacts

Pisut Attakamol Tel: +66 2636 2000 p 3131 [email protected]

Chaiporn Supvoranid Tel: +66 2636 2000 p 3068 [email protected]

Suksawat Watewai Tel: +66 2636 2000 p 3149 [email protected]

Piya Krootdaecha Tel: +66 2636 2000 p 3807 [email protected]

Timothy Breier Tel: +66 2636 2000 p 3223 [email protected]

Paralee Techajongjintana Tel: +66 2636 2000 p 3101 paralee.techajongjintana @bakermckenzie.com

Pradthanaadt Ratanatanungpong Tel: +66 2636 2000 p 3144 pradthanaadt.ratanatanungpong @bakermckenzie.com

Piyapong Panyachiva Tel. +66 2636 2000 p 3809 piyapong.panyachiva @bakermeckenzie.com

Anan Rattanatanawat Tel: +66 2636 2000 p 3811 anan.rattanatanawat @bakermckenzie.com


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Vietnam

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Legal System

In order to enhance its relations with other countries, Vietnam has seen the need to establish a coherent national system of law. To this end, Vietnamese lawmakers have studied international laws as well as the legal systems and laws of other countries.

In 2013, the National Assembly (NA) adopted a new constitution which was entered into effect on 1 January 2014 and replaced the 1992 Constitution. Notably, the 2013 Constitution formally recognized the freedom of doing business in all sectors not prohibited by the State and equal competition among all economic sectors, implying that private and public companies must be treated equally.

According to the 2013 Constitution, the government, being the executive arm of the NA, is responsible for drafting proposals for legislation and ordinances for submission to the NA and the Standing Committee of the National Assembly (SCNA). The NA, as the highest legislative authority, is responsible for ensuring that the people and government agencies comply with the constitution and the laws. The SCNA acts on behalf of the NA outside its sessions and has the authority to issue ordinances and interpret the constitution, laws and ordinances.

Laws in Vietnam are derived from legislation (codes and laws) enacted by the NA and ordinances of the SCNA when the former is not in session. These primary sources of laws are supported and implemented by government decrees and regulations, decisions of the prime minister, circulars, ministerial and inter-ministerial circulars, and governmental and city or provincial People’s Committee decisions or directives.

The NA, as the main legislature, makes and amends the constitution and laws. It also elects from its members the prime minister, who acts as head of state and is charged with the proclamation of the constitution, laws and ordinances. The prime minister is the commander-in-chief of the armed


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forces and the chairman of the defense and security council. He has a five-year term in office, corresponding with the term of the NA.

The executive arm of the NA is the government, whose head (the prime minister) is elected by the NA. The prime minister is assisted by the deputy prime ministers. The government is organized into ministries, ministerial-level bodies and committees.

The judiciary consists of the People’s Courts and the People’s Procuracy. The chief judge of the Supreme People’s Court and the chief of the Supreme People’s Procuracy are appointed by the NA.

Courts

On 1 June 2015, Law No. 62/2014/QH12 dated 24 November 2014 on Organization of People’s Courts (the Law on Organization of People’s Courts 2014) came into effect and replaced Law No. 33/2002/QH10 on Organization of People’s Courts.

One of the most significant changes under the Law on Organization of People’s Courts 2014 is the introduction of an additional level of the court system, i.e., the High People’s Court. Specifically, the Vietnamese court system is now divided into four (4) levels as follows:

• The Supreme People’s Court;

• The High People’s Court;

• The Provincial-level People’s Court; and

• The District-level People’s Court.

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Furthermore, the Law on Organization of People’s Courts 2014 introduced the following new concepts:

• A new type of specialized tribunal on family and juvenile. This specialized tribunal was introduced with the purpose of properly resolving cases relating to juveniles who are sensitive and vulnerable.

• A new position and title of examiner in the court system. The examiners must be professional civil servants of the courts that have worked as court clerks for at least five (5) years and have been professionally trained and appointed as examiners. Their duties and powers include: (i) examining judgments/decisions which have taken legal effect, (ii) concluding and reporting the examination results to the chief justice of his/her court, (iii) assisting the chief justice to perform judgment enforcement duties and (iv) completing other tasks as assigned by the chief justice.

On a related note, in terms of Vietnamese civil proceedings, on 1 July 2016, Code No. 92/2015/QH13 on Civil Proceedings (the CPC 2015) took effect and replaced Code No. 24/2004/QH11 on Civil Proceedings amended and supplemented in 2011.

Supreme People’s Court

The Supreme People’s Court is the highest level of the court system, with seats that may be located in Hanoi, Ho Chi Minh City and Da Nang.1 It is the supreme adjudicatory body of Vietnam, headed by the chief judge, and

1 The Supreme People’s Court is located in Hanoi. It used to have appeal courts in Hanoi, Ho Chi Minh City and Danang. However, under the new Law on Organization of People’s Courts 2014, high people’s courts took over the jurisdiction of the Supreme People’s Court appeal courts to conduct trials according to cassation and to re-open procedures of judgments or decisions of the Provincial-level People’s Court and District-level People’s Court. High people’s courts are located in Hanoi, Ho Chi Minh City and Danang.


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is directly accountable to the NA. When the NA is not in session, it is accountable to the SCNA and the prime minister. The Supreme People’s Court is comprised of the following:

(a) Judicial Council of the Supreme People’s Court;

(b) assisting apparatus; and

(c) training institutions.2

The number of judges of the Judicial Council of the Supreme People’s Court must be between 13 and 17.3

The Supreme People’s Court supervises the proceedings of the People’s Courts in all levels and specialized courts (unless otherwise provided when such courts are established). In addition, it provides guidance for the uniform application of the law. It also submits laws and ordinance projects to the NA or the SCNA where appropriate.

In terms of adjudicatory competence, the Supreme People’s Court has the authority to do the following:

(a) review or make superior review of judgments or decisions that have taken effect;

(b) make overall assessment of adjudicating practices of courts, ensuring the uniform application of law in trial;

(c) train and retrain judges, assessors and other staff of people’s courts;

(d) manage people’s courts and military courts organizationally in accordance with the 2014 Law on Organization of Peoples’ Courts and relevant laws, ensuring independence of courts from one another; and

2 Article 21, Law on Organization of Peoples’ Courts 2014. 3 Ibid, Article 22.1.

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(e) submit to the NA draft laws and resolutions; to submit to the NASC draft ordinances and resolutions in accordance with law.

The Council of Judges of the Supreme People’s Court has the jurisdiction to review legally effective judgments or decisions that have taken legal effect and are protested against under cassation or re-opening procedure.

Specially, adjudicative panels have been allowed to refer to court precedents in trial since 1 June 2016. The Council of Judges of the Supreme People’s Court shall be responsible for selecting its cassation trial decisions and judgments/decisions of the courts which have taken legal effect and are of standard nature, summarize and develop them into court precedents and publicize such court precedents for courts to study and apply in trial.

High People’s Courts

Under the Law on Organization of People’s Courts 2014, the High People’s Court is considered as an intermediary court between the Provincial-level People’s Court and the Supreme People’s Court. The High People’s Courts were established to reduce the workload of the Supreme People’s Court (i.e., High People’s Courts will have the authority to conduct trials according to cassation or to re-open procedures of judgments or decisions of the Provincial-level People’s Court and District-level People’s Court).

The organizational structure of the High People’s Court and the Provincial-level People’s Court is the same, including a judge committee, specialized tribunals and other specialized courts as determined by the SCNA upon the request of the Chief Justice of the Supreme People’s Court.

The High People’s Courts have the following authority: 4

(a) to conduct appellate trial of cases of which first-instance judgments or decisions of the provincial people’s courts within their territorial

4 Ibid, Article 29.


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jurisdiction which have not yet taken legal effect and are appealed or protested against in accordance with the procedural law; and

(b) to conduct trial according to the cassation or reopening procedures in which judgments or decisions of provincial and district people’s courts within their territorial jurisdiction which have taken legal effect and are protested against in accordance with the procedural law.

The High People’s Courts comprise of:5

(a) The judicial committee;

(b) Criminal Courts, Civil Courts, Administrative Courts, Economic Courts, Labor, Family and Juvenile Courts; other specialized court(s) proposed by the Chief Judge of the Supreme People’s Court; and

(c) the assisting apparatus.

Local People’s Courts

Each administrative district of Vietnam has a District-level People’s Court, which is the court of first instance that handle most domestic disputes, civil disputes, labor disputes, economic disputes, civil requests, criminal cases and administrative cases, except for certain cases which are subject to the jurisdiction of the Provincial-level People’s Courts.

Under the Law on Organization of People’s Courts 2014, the District-level People’s Courts do not have a judge committee. With regards to specialized courts, the Law on Organization of People’s Courts 2014 indicates that the Chief Justice of the Supreme People’s Court may decide to establish specialized tribunals such as criminal courts, civil courts, family and juvenile courts or administrative courts upon satisfying adjudication requirements as is in line with the common practice of each the District-level People’s Court or, if necessary, the SCNA may establish other 5 Ibid, Article 30.

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specialized tribunals pursuant to requests of the Chief Justice of the Supreme People’s Court. Therefore, according to the Law on Organization of People’s Courts 2014, the organizational structure of the District-level People’s Courts may have specialized courts to adjudicate on cases with particular circumstances.

There is a Provincial-level People’s Court in each province or centrally-run city of Vietnam. Under the CPC 2015, jurisdiction at the first-instance level of the Provincial-level People’s Courts includes the following matters:

• Matters involving foreign elements with regards to civil, marriage and family, as well business, trade and labor matters, with the exception of cases involving marriage and family matters between Vietnamese citizens residing in border areas and citizens of neighboring countries residing in border areas with Vietnam;

• Matters falling under the jurisdiction of the District-level People’s Court which are taken to the Provincial-level People’s Court for resolution; and

• Other matters which belong to the jurisdiction of the Provincial-level People’s Courts as specifically provided in the relevant laws (such as IP-related disputes and certain types of administrative cases).

Organization of the Provincial-level People’s Court, under the Law on Organization of People’s Courts 2014, consists of a judge committee, specialized courts and other specialized courts as determined by the SCNA upon the request of the Chief Justice of the Supreme People’s Court.


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Business and Trade Disputes

According to the CPC 20156, the following are considered business and trade disputes:

(a) Disputes arising from business or trade activities among registered, for-profit individuals and/or organizations;

(b) Disputes over intellectual property rights or technology transfers among individuals or legal entities, which are all for the purpose of profit;

(c) Disputes between a company and its members and/or managerial positions and between members of a company in respect to the establishment, operation or dissolution, merger, consolidation, division, separation, or organizational transformation of the same company;

(d) Other business and trade disputes, except for cases under other authorities’ jurisdiction as prescribed by law.

Statute of Limitations

The CPC 20157 provides that statute of limitation for civil disputes or requests for civil matters resolution must comply with the provisions of the Civil Code No. 91/2015/QH13 dated 24 November 2015 (the Civil Code 2015).8

6 Article 30, CPC 2015. 7 Article 184, CPC 2015. 8 On 1 January 2017, the Civil Code 2015 officially came into effect and replaced Civil Code No. 33/2005/QH11 dated 14 June 2005.

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Pursuant to the Civil Code 2015, statute of limitation for initiating a lawsuit relevant to contracts is three (3) years from the date the aggrieved party is aware that the legitimate rights and interests have been infringed upon.9

No statute of limitation is applied to (i) requests for protection of personal rights not associated with property, (ii) disputes over property ownership, such as disputes over claim back of properties under others’ management or in others’ possession, or (iii) disputes over land use rights in accordance with the land law.10

Notably, under the CPC 2015, the judge will not be allowed to return the petition with the reason that statute of limitation has been expired.11

Confidentiality and Language

In principle, court proceedings are held publicly. But under special circumstances, court proceedings may be held privately to protect State secrets or the reasonable interests of the relevant parties to the case. Recently, the Supreme People’s Court published a number of volumes of reports with prior decisions made by the Judicial Council of the Supreme People’s Court relating to labor, business, trade and civil cases. It is hoped that such publications will be issued on a more regular basis.

With respect to language, court proceedings are generally conducted in Vietnamese. Persons participating in civil proceedings are entitled to use their own language of choice. The court must require such individuals to have their interpreter attend the conciliation meetings and trials convened by the court. Documents submitted to the relevant court must be made in Vietnamese or translated into Vietnamese.

9 Article 429, Civil Code 2015. 10 Article 155, Civil Code 2015. 11 Article 192, CPC 2015.


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Legal Profession

Judges

The chief judge of the Supreme People’s Court is elected and may be removed by the NA upon the recommendation of the President. The chief judge’s term of office corresponds to that of the NA (i.e., five (5) years). The deputy chief judge, judges of the Supreme People’s Court, chief and deputy chief judges and judges of the central military court are appointed and may be removed by the President.

The chief and deputy chief judges of specialized courts, Head and Vice Head of the Departments of the Supreme People’s Court, Chief and Deputy Chief Judges and Judges of the lower People’s Courts, and chief and deputy chief judges are appointed and may be removed by the chief judge of the Supreme People’s Court. Judges or persons holding key positions in a court in the People’s Court system in Vietnam cannot be lawyers.

Prosecutors

The People’s Procuracy exercises the power to prosecute and supervise judicial activities in Vietnam. Prosecutors working at the People’s Procuracy cannot be lawyers. The chairman of the Supreme People’s Procuracy is elected, removed or recalled by the NA. The local People’s Procuracy in provinces and cities under direct central authority, districts and provincial towns, are headed by local chief-procurators who are appointed, removed and recalled by the procurator-general and accountable to the local People’s Council.

Lawyers

The bar associations in Vietnam are professional organizations of lawyers established in accordance with the Law on Lawyers. To be admitted by a bar association in Vietnam, a candidate must satisfy the following requirements:

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(a) Vietnamese citizenship and residence in Vietnam;

(b) Law degree from a law university;

(c) Graduation from a lawyer training course recognized under Vietnamese law in Vietnam or abroad, unless exempted by relevant regulations; and

(d) Good moral character and good health sufficient to practice law.

Moreover, the applicant must not be a state official as defined in the regulations on state officials.

If these requirements are satisfied, a candidate may then apply for admission to a bar association as a trainee lawyer. A trainee lawyer will not be regarded as an official member of a bar association and has to be under the supervision of a qualified admitted lawyer. A trainee lawyer is subject to limited rights in representing a client in court and is not entitled to sign any legal advice. After a training period of not more than 12 months, a trainee lawyer must pass an examination to be admitted as a qualified lawyer.

A foreign lawyer can only practice in Vietnam after obtaining a permit from the Ministry of Justice (MOJ). To be granted a permit to practice in Vietnam, the following conditions must be satisfied:

(a) A valid law practice certificate granted by a competent foreign agency or organization;

(b) Experienced in giving advice on foreign law and international law;

(c) Respect for the constitution and law of Vietnam, the codes of ethics and professional manners of Vietnamese lawyers; and


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(d) Nomination by a foreign law-practicing organization to practice law in Vietnam or recruitment by a Vietnam-based branch, a Vietnam-based foreign law firm or a Vietnamese law-practicing organization.

Foreign lawyers may practice in Vietnam as members or employees of Vietnam-based foreign lawyer’s profession-practicing organizations, or as employees of Vietnamese lawyers’ offices or Vietnamese law partnerships. Foreign lawyers are allowed to give legal advice on foreign laws and international laws but not on Vietnamese laws (except when they have obtained a Vietnamese law university degree and have fully satisfied the requirements for Vietnamese lawyers). Foreign lawyers are not allowed to participate in legal proceedings before Vietnamese courts as litigators or authorized representatives of clients.



A plaintiff may commence a lawsuit by submitting a written petition to a competent People’s Court. In addition to the petition, the plaintiff is responsible for collecting and submitting all the documents and evidence supporting his or her claims. Under the CPC 2015, the plaintiff may send a petition lodged by litigators directly, via post or via e-portal.12

According to the CPC 2015, within three (3) working days from the date of receipt of the petition and other relevant documents, the chief justice of the court will assign a judge to consider the petition. Subsequently, the judge who is assigned by the chief justice shall consider and make a decision as to whether to process, forward, or return the petition within five (5) working days from the date of appointment.13 If the court needs additional information or evidence, the court will notify the plaintiff.

12 Article 91.1, CPC 2015. 13 Article 191, CPC 2015.

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If the case is under the court’s jurisdiction, the court will send a notice to the plaintiff requesting the payment of a court fee deposit. The term-limit of this payment, under the CPC 2015, is seven (7) days from the date of receipt of the court’s notice. The judge will officially accept the case when the plaintiff submits a receipt for the payment of the court fee deposit.14

Court’s Notice to Defendant

Within three (3) working days from the date the court decides to take jurisdiction over the case, the court must give notice to the defendant and other relevant parties to the case (as stated in the letter of claim).15 The defendant and the other relevant parties, if any, must send to the court their response to the letter of claim within 15 days from the receipt date of the notice. Upon application with the court, the deadline may be extended for another 15-day period.16 The law requires the court to open a trial within one (1) month from the date of issuing the decision to bring the case to trial.

Conciliation

Except for a number of specific cases which are not required to undergo conciliation procedures, the court is responsible for holding at least one (1) conciliation meeting between the parties in dispute. Where the parties fail to reach an agreement during the conciliation, the court must record minutes on the failure of the conciliation, and then issue a decision to bring the case to trial. If at any stage the parties reach a settlement, the court can issue a decision on the recognition of such an agreement between the parties.

14 Article 195, CPC 2015. 15 Article 196, CPC 2015. 16 Article 199, CPC 2015.


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Burden of Proof

The burden of providing evidence in support of their respective positions lies upon the parties. The parties are expected to conduct the dispute on an adversarial basis, with each party bringing evidence and arguments in support of its position.


The plaintiff is entitled to unilaterally withdraw or discontinue its claim against the defendant at any time before the court issues a verdict. If the plaintiff withdraws the statement of claim before the court holds the hearing of the case, the advance payment of the court fees will either be transferred to the state budget or, in some particular cases, refunded to the plaintiff.

Interlocutory Orders/ Interim Remedies

Either party in an existing lawsuit has the right to request that the competent court to apply one or more of the provisional emergency measures.

The court may apply the following provisional emergency measures at a party’s request:17

• Attaching a property in dispute;

• Prohibiting any transfer of property rights with respect to the property in dispute;

• Prohibiting any change in the status of the property in dispute;

• Permitting the harvest and sale of subsidiary food crops or of other products or commodities;

17 Article 114, CPC 2015.

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• Freezing accounts at banks, other credit institutions and the State Treasury and/or freezing property at places of bailment;

• Prohibiting a party in litigation from conducting or compelling another party to conduct certain acts; or

• Other provisional emergency measures as stipulated by law.

Some provisional emergency measures (notably the freezing or attachment of assets) require that the applicant deposit cash or other valuables for security purposes (the Security Deposit) as determined by the court before such provisional emergency measures are granted.18

Appeals

Any appeal is required to be sent to the court that held the trial at first instance within fifteen (15) days from the date of the judgment. However, under the CPC 2015, the time-limit of sending an appeal letter to the court will be fifteen (15) days from the date of posting or receipt of the judgment if the parties are absent in that trial with legitimate reasons.19 Any appeal made after fifteen (15) days shall be considered an overdue appeal. The court that held the trial at first instance must forward the overdue appeal letter and the report with the reason for the overdue appeal to a competent People’s Court at the appellate level. The appellate court shall consider whether or not to accept the overdue appeal.

After accepting the appeal letter, the first-instance court must give notice in writing to the applicant requesting the payment of the appellate court fee deposit. Payment of this fee must be made within ten (10) days from the date of receiving the court’s notice. In addition, the first-instance court must give notice of the appeal letter in writing to the People’s Procuracy

18 Article 136, CPC 2015. 19 Article 273.1, CPC 2015.


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at the same level and to relevant parties to the case. The relevant parties have the right to send their opinions in response to the appeal letter.

The first-instance court is required to forward the appeal letter to the appellate court within five (5) working days from the date it has received the payment receipt for the appellate court fee deposit. Upon the receipt of sufficient documents from the first-instance court, the appellate court will issue a decision to bring the case to an appellate trial within two (2) months.


Enforcement procedures for civil judgments are mainly subject to the Law on Enforcement of Civil Judgments. After a court’s judgment comes into effect, if a debtor fails to uphold the court’s judgment voluntarily, one (1) or more measures for enforcement may be applied by the competent civil judgment enforcement agency, including the taking of an inventory of the debtor’s assets for subsequent appraisal and sale by auction, seizure of assets, attachment of earnings and assets, and forcible stoppage of illegal actions on the part of the judgment debtor.

To ensure that a creditor is aware of his/her rights in this respect, the court issues copies of its judgments and orders to both parties and informs the judgment creditor expressly of its right to initiate enforcement. An application for enforcement of a court judgment must be filed within five (5) years from the effective date of the relevant judgment.

Enforcement is conducted by an executor of a civil judgment enforcement agency under the authority of the MOJ. The executor has extensive powers, including the power to summon the parties to his office or the local People’s Committee in order to execute the judgment or order, set deadlines within which the judgment debtor is bound to comply, and take applicable enforcement measures if the judgment debtor fails to comply in

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the prescribed time frame and manner. The executor may also request the court to clarify uncertain points in its judgment or order.

All costs for the execution of judgments are borne by the creditor. The execution is supervised by the People’s Procuracy, which plays the role of “watchdog” as to the lawfulness of the execution action. The police may be charged with maintaining order during that process. Other interested parties may attend in order to safeguard their interests. To this end, they may in some cases contest an execution. For example, if title to inventoried assets is disputed by third parties, they may initiate legal action within 30 days in order to obtain a court ruling on the ownership of the assets in question. In the meantime, however, the authorities are free to list the relevant assets, but may not dispose of them until the court has made its decision. If the right to file a suit is not asserted, the authorities may seize the assets and dispose of them (usually by way of auction).


Vietnamese courts will only consider recognizing foreign judgments in the following circumstances:

• The foreign judgments or decisions were issued by courts in countries that have entered into a judicial agreement in this regard with Vietnam, most of which are socialist countries to date; and

• If Vietnamese law specifically provides that judgments and decisions of foreign courts are recognized and enforced in Vietnam. To date, there has been no such provision.

The recognition of judgments issued by courts in countries that have not signed a judicial agreement with Vietnam will, in theory, be considered for recognition on a reciprocal basis. However, as a matter of practice, only a few judgments issued by courts in foreign countries (most of them socialist countries that have signed judicial agreements with Vietnam) have been reported to be recognized by the courts in Vietnam.


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Under the CPC 2015, in terms of procedures, there are two (2) main changes relating to the recognition and enforcement in Vietnam of a foreign judgment as described below:

• The term-limit of filing a request letter for recognition and enforcement to the MOJ of Vietnam or a Vietnamese competent court is three (3) years from the date a judgment/decision of a foreign court takes legal effect. As such, if the judgment/decision creditors do not send the request for recognition and enforcement within the stated time period, they shall lose their rights, except for cases of force majeure.20 However, under the CPC 2015, the judgment creditors may send a request letter directly to the MOJ of Vietnam or a Vietnamese competent court for recognition and enforcement of the foreign judgment/decision.

• If a request letter for the recognition of a foreign judgment in Vietnam is sent to the MOJ of Vietnam, the MOJ will forward the letter, attached with any legally relevant documents, to a competent court within five (5) working days from the date of receipt of the letter of request for its consideration and action. Within five (5) working days from the receipt of the letter of request and its attached documents from the MOJ or the judgment creditors, the competent court must process the dossier and notify the People’s Procuracy of the same level of its process.21 Four (4) months after the court has accepted the case, it is required to issue a decision as to whether it will reject the request for recognition and return all the documents to the MOJ or open a court meeting to consider the case. This period may be extended by two (2) months in cases where the court requires further clarifications from the relevant parties.

20 Article 432, CPC 2015. 21 Article 435 and 436, CPC 2015.

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Arbitration Law

Law on Commercial Arbitration took effect on 1 January 2011 and replaced the 2003 Ordinance on Commercial Arbitration.

Vietnam is a member of the New York Convention. However, Vietnam has not acceded to the 1965 Convention on the Settlement of Investment Disputes (ICSID Convention). That being said, Vietnam has entered into a Bilateral Trade Agreement (BTA) with the United States, which provides that in disputes between nationals or companies of each country against the other, Vietnam, the United States or the company/ national concerned may submit the dispute for settlement by binding arbitration:

(a) to the International Centre for Settlement of Investment Dispute (the Centre) established by the ICSID Convention, if both Vietnam and the United States are members of the ICSID Convention and the Centre is available;

(b) to the Additional Facility of the Centre, if the Additional Facility is available;

(c) in accordance with the United Nations Commission on Internal Trade Law (UNCITRAL) Arbitration Rules or any recognized international arbitration rules, if agreed; or

(d) if agreed by both parties to the dispute, to any other arbitration institution or in accordance with any other arbitration rules.

However, these remedies are only available if the national or company concerned has not submitted the dispute for resolution to the competent courts or administrative tribunals of Vietnam or the United States in the territory of which the covered investment had been made or submitted the same in accordance with any applicable, previously agreed dispute settlement procedures. For the above remedies to be available, it is also required that 90 days have elapsed from the date the dispute arose.


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In cases involving investment disputes between a company from the United States and the government of Vietnam, Vietnam has explicitly consented to binding arbitration by ICSID in the BTA.


Under Vietnamese law, if parties to a contract have reached an arbitration agreement but one party initiates a lawsuit at court, the court must refuse to accept the case, unless the arbitration agreement is invalid or unrealizable.

Parties can request provisional emergency measures from the arbitration panel or a court.

Moreover, during the arbitration proceedings, the court may give timely assistance to the arbitration panel on certain processes such as collecting evidence, summoning witnesses and registering arbitral awards of ad-hoc arbitration for enforcement. These provisions of the Law on Commercial Arbitration aim to guarantee a smooth arbitration proceedings process and speedy enforcement of arbitral awards.

In addition, courts may set aside a domestic arbitration decision or award at the request of one of the parties in the below circumstances:

• There is no arbitration agreement;

• The arbitration agreement is invalid or unenforceable;

• The Arbitration Council’s composition and/or arbitral proceedings fail to comply with the parties’ agreements;

• The dispute does not fall under the jurisdiction of the Arbitration Council. If part of the arbitral award does not fall under the jurisdiction of the Arbitration Council, such part shall be cancelled;

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• The evidence supplied by the parties on which the arbitration tribunal relied to issue the award was forged or an arbitrator received money, assets or some other material benefit from one of the parties in dispute, which affected the objectivity and impartiality of the arbitral award; or

• The arbitral award runs counter to the public interests of the Socialist Republic of Vietnam.


Institutional Arbitration

Under the Law on Commercial Arbitration, arbitration centers may be established in accordance with the regulations of the Government. The law sets the conditions and procedures for the establishment of arbitration centers, their duties and powers, as well as causes for the termination of their operations. The law also allow foreigners to be appointed as arbitrators in Vietnam as long as they certify certain requirements.

Moreover, foreign arbitration centers are permitted to operate in Vietnam through a branch or representative office after satisfying certain conditions and procedures. However, the arbitration awards issued by the local representative office or branch of a foreign arbitration center are considered as foreign arbitration awards and have to go through the process of recognition by the competent court before enforcement can be made in Vietnam. There is currently no branch or representative office of foreign arbitration centers in Vietnam.

Currently, there are twenty-two (23) domestic arbitration centers operating in Vietnam22. Below is the list of arbitration centers with over 20 arbitrators:

22 bttp.moj.gov.vn/qt/Pages/trong-tai-tm.aspx?Keyword=&Field=&&Page=1


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• The Vietnam International Arbitration Center (VIAC);

• The Asian International Commercial Arbitration Center (ACIAC);

• The Ho Chi Minh City Commercial Arbitration Center (TRACENT);

• The Southern Trade Arbitration Centre (STAC)

• The Pacific International Arbitration Center (PIAC);

• The Indochine Trade Arbitration Centre (ITAC);

• The Vietnam Trader Arbitration Centre (VTA); and

The Vietnam Lawyers' Commercial Arbitration Center (VLCAC).

The most well-known arbitration center in Vietnam is VIAC, a non-governmental institutional arbitration center established at the Vietnam Chamber of Commerce and Industry.

Ad-hoc Arbitration

Ad-hoc arbitration can be established under the circumstances and through the procedures provided in the Law on Commercial Arbitration. If the parties do not have an agreement on the number of arbitrators, an arbitration tribunal will consist of three (3) arbitrators. Unless otherwise agreed by the involved parties, the respondent must select and notify the claimant of the respondent’s choice of arbitrator within 30 days from receiving the claimant’s statement of claims. If the respondent fails to do so and the parties have no agreement on the appointment of an arbitrator, then the claimant can request the competent court to appoint an arbitrator for the respondent. If the parties agreed to a sole arbitrator and they are unable to agree on the selection of arbitrator within 30 days from respondent’s receipt of the statement of claims, then the competent court shall appoint the sole arbitrator at the request of one or all of the parties unless the parties have an agreement to request an arbitration center to

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appoint the sole arbitrator. To date, ad-hoc arbitration is not a very popular mode of alternate dispute resolution in Vietnam.


Domestic Arbitral Awards

The enforcement procedure for domestic arbitral awards may be pursued in accordance with regulations in the Law on Commercial Arbitration. If on the expiry of the time limit for carrying out an arbitration award, the award debtor has failed to voluntarily carry out the award and has not requested to set aside the award, the winning party may make a written request to the civil judgment enforcement authorities to enforce the arbitral award. In such case, the domestic arbitral award may be enforced similarly to a court judgment in Vietnam.

Foreign Arbitral Awards

The CPC 2015 allows for bilateral enforcement according to the principles of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). In short, recognition and enforcement of a foreign arbitral award may be permitted in Vietnam:

(a) If the award is from a country which has signed or acceded to a relevant international convention, (inter alia, a signatory state to the New York Convention); or

(b) On the basis of reciprocity, without requiring the signing of, or accession to an international convention. Arbitral awards of foreign arbitrators shall be enforced in Vietnam only after they are recognized and permitted for enforcement by Vietnamese courts.

Procedures

To be enforced in Vietnam, a foreign arbitral award must be formally recognized and held enforceable by a Vietnamese Provincial-level People’s


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Court. Under the CPC 2015, to obtain an enforcement order, the party seeking the enforcement of the award may lodge a formal application for its recognition and enforcement to the following authorities:

(a) the MOJ in case an international convention of which Vietnam is member regulates the matter; or

(b) a Vietnamese Provincial-level People’s Court in case the international convention of which Vietnam is member does not regulate or there is no relevant international convention to require that the competent court recognizes and enforces such an award in Vietnam.23

The term of request for recognition and enforcement of a foreign arbitral award in Vietnam is three (3) years from the date in which the arbitral award takes legal effect.24

A foreign arbitral award which is recognized and held enforceable by a court has the same legal effect as any other legally effective decision of a Vietnamese People’s Court.

Grounds for Refusal of Recognition and Enforcement

The courts may refuse recognition and enforcement of a foreign arbitral award on grounds stipulated in the CPC 2015, which are similar to those set out in Article V of the New York Convention. Specifically, recognition may be refused where:25

• The parties lacked the capacity to sign the arbitration agreement or arbitral clause;

• The arbitration agreement is invalid under applicable law;

23 Article 451, CPC 2015. 24 Article 451, CPC 2015. 25 Article 459, CPC 2015.

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• The respondent did not receive sufficient notice of the appointment of arbitrators or the arbitration proceedings;

• The award was made in respect of a dispute which was not referred to arbitration by the parties or the substance of the award goes beyond the scope of the request for arbitration by the parties;

• The arbitrators or the arbitration procedures have not complied with the arbitration agreement or the applicable law;

• The award has been validly set aside, revoked or suspended;

• The award lacked mandatory binding effect on the parties;

• The subject matter of the dispute is not compatible with Vietnamese law and therefore may not be settled by arbitration under Vietnamese law; or

• The recognition and enforcement of the foreign arbitral award are contrary to the basic principles of Vietnamese law.

The CPC 2015 provides that a foreign arbitral award which is recognized and held enforceable by a people’s court has the same legal effect as any other legally effective decision of a Vietnamese court. It also provides that any proceeds or assets realized from the enforcement may be transferred abroad.


A domestic arbitral award is binding upon the parties and enforceable, unless it is set aside by a decision of the court. A decision setting aside an arbitral award is final and not subject to appellate procedures under Vietnamese law. Under the Law on Commercial Arbitration, within 30 days from the date of receipt of an arbitration award, the parties have the right to submit a petition to the local competent court to request to set aside the arbitral award.


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More specifically, under Article 68 of the Law on Commercial Arbitration, an arbitral award may be set aside if it falls under any of the following cases:

(a) There is no arbitration agreement, or the arbitration agreement is invalid or unenforceable;

(b) The composition of the arbitral tribunal or the arbitral proceedings is not consistent with the agreement of the parties, or is inconsistent with the law;

(c) The dispute does not fall within the arbitral tribunal’s jurisdiction. In cases where an arbitral award contains details that does not fall within the arbitral tribunal’s jurisdiction, such details will be set aside;

(d) The evidence provided by the parties on which the arbitration tribunal relied to issue the arbitral award was forged; or the arbitrator accepted money, property or other material benefits from one of the parties to the dispute, which affected the objectivity and impartiality of the arbitral award; or

(e) The arbitral award is contrary to the fundamental principles of the laws of Vietnam.

When the court considers the petition, the judges must rely on the provisions of Article 68 above and the documents/evidence accompanying the petition in order to reach its decision. The judges must not review the merits of the dispute which the arbitration tribunal already resolved.

Mediation

Vietnamese law recognizes mediation as a form of alternative dispute resolution. On 24 February 2017, the Government issued Decree No. 22/2017/ND-CP (“Decree No. 22”) on commercial mediation, which came into effect on 15 April 2017. Decree No. 22 provides in detail the principles,

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conditions, and procedures of commercial mediation as an alternative dispute resolution method, as well as the conditions for establishment of mediation centers in Vietnam.

Decree No. 22 provides that commercial mediation is only available as a dispute resolution mechanism for disputes arising from commercial activities, disputes where at least one (1) party is involved with commercial activities, or disputes otherwise specified in other legislations to be resolved by commercial mediation. Dispute resolution through commercial mediation must ensure that the parties voluntarily participate in the mediation process and on equal grounds regarding rights and obligations. The information regarding the mediation must be kept confidential, unless otherwise agreed by the parties or provided under the relevant legislation.

Similar to arbitration, commercial mediation may commence only if the parties have a mediation agreement. Parties may enter into a mediation agreement before or after the dispute has arisen, or at any point during the dispute resolution process. Decree No. 22 provides that a mediation agreement must be in writing, either as a mediation clause in a contract or as a separate agreement.

Commercial mediation services can be provided by mediation centers established under Decree No. 22 or by existing arbitration centers in Vietnam. Foreign mediation centers can also operate in Vietnam by setting up their branch and/or representative office. The first and most prominent mediation centre of Vietnam is Vietnam Mediation Centre under VIAC, which was established in May 2018.

Regarding the process, the parties to commercial mediation may agree to follow the mediation rules of a commercial mediation center or apply the mediation procedure agreed between themselves. In the absence of an agreement on the commercial mediation procedure, the mediator(s) may apply the procedure that is most appropriate to the nature of the dispute, as long as the procedure is approved by the parties. Commercial mediation


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may be conducted by one (1) or more mediators, as agreed by the parties. The mediator(s) has the right to offer proposals on the resolution of the dispute at any time during the dispute resolution process.

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Baker & McKenzie Vietnam


Ho Chi Minh City and Hanoi offices of Baker & McKenzie were first established as representative offices in 1993 and 1996 respectively. Currently, the two (2) offices are staffed with over 90 lawyers and professional staff, providing dedicated legal services across the broad spectrum of corporate and commercial transactions. Our Vietnamese and international lawyers are fluent in English, Vietnamese and the country’s laws, legal systems and business practices.

The Dispute Resolution Practice Group’s areas of expertise include, but are not limited to: administrative/ public law and regulatory disputes, antitrust and competition litigation, banking and finance litigation, commercial litigation, construction litigation, investigations, corporate compliance, customs litigation, information technology disputes, insolvency/bankruptcy, intellectual property litigation, labor and employment litigation, product liability and product recalls, trade litigation and tax controversy.

The Dispute Resolution Partners of Vietnam offices include:

Contacts

Frederick R. Burke Tel: +84 28 3520 2628 [email protected]

ManhHung Tran Tel: +84 24 3936 9398 [email protected]

Quach Minh Tri Tel: +84 24 3936 9605 [email protected]


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Cont

ribut

ors

Contributors

Australia

Alex Wolff Partner, Melbourne +61 3 9617 4286 [email protected]

Andrew Salgo Partner, Sydney +61 2 8922 5268 [email protected]

China and Hong Kong

Cynthia Y.S. Tang Principal, Hong Kong +852 2846 1708 [email protected]

Gary Seib Principal, Hong Kong +852 2846 2112 [email protected]

Mini vandePol Principal, Hong Kong +852 2846 2562 mini.vandepol @bakermckenzie.com

Kwun Yee Cheung Principal, Hong Kong +852 2846 1683 kwun.yee.cheung @bakermckenzie.com

Anthony K.S. Poon Partner, Hong Kong +852 2846 1919 [email protected]

Susan Kendall Partner, Hong Kong +852 2846 2411 [email protected]

Bryan Ng Partner, Hong Kong +852 2846 2923 [email protected]

Paul Teo Local Partner, Hong Kong +852 2846 2581 [email protected]

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Indonesia

Timur Sukirno Managing Partner, Jakarta +62 21 2960 8500 [email protected]

Japan

Yoshiaki Muto Principal, Tokyo +81 3 6271 9541 yoshiaki.muto @bakermckenzie.com

Kengo Nishigaki Local Partner, Tokyo +81 3 6271 9473 kengo.nishigaki @bakermckenzie.com

Joel Greer Local Partner, Tokyo +81 3 6271 9728 [email protected]

Malaysia

Kherk Ying Chew Partner, Kuala Lumpur +60 322 9879 33 kherk.ying.chew @wongpartners.com

Dato Mohd Arief Emran bin Arifin Partner, Kuala Lumpur +60 322 9879 25 ariefemran.arifin @wongpartners.com

Eddie Chuah Partner, Kuala Lumpur +60 322 9879 39 [email protected]

Janice Tay Partner, Kuala Lumpur +60 322 9878 38 [email protected]


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Cont

ribut

ors

Philippines

Ramon Quisumbing Principal, Manila +63 2 819 4911 rodrigo.quimbo @bakermckenzie.com

Donemark Calimon Principal, Manila +63 2 819 4920 donemark.calimon @quisumbingtorres.com

Singapore

Andy Leck Managing Principal, Singapore +65 6434 2525 [email protected]

Nandakumar Ponniya Principal, Singapore +65 6434 2663 Nandakumar.ponniya @bakermckenzie.com

Celeste Ang Principal, Singapore +65 6434 2753 [email protected]

Taiwan

David T. Liou Principal, Taipei +886 2 2715 7238 [email protected]

H. Henry Chang Principal, Taipei +886 2 2715-7259 [email protected]

Joseph Fu Senior Partner, Taipei +886 2 2715 7369 [email protected]

Shelley Fan Senior Partner, Taipei +886 2 2715 7227 [email protected]

Sonya Hsu Senior Partner, Taipei +886 2 27157235 [email protected]

Besson Lu Senior Partner, Taipei +886 2 2715 7372 [email protected]

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Anna Hwang Partner, Taipei +886 2 2715 7382 [email protected]

Chien-Hung Lai Partner, Taipei +886 2 2715 7221 chien-hung.lai @bakermckenzie.com

Robert Lee Partner, Taipei +886 2 2715 7273 [email protected]

Thailand

Chirachai Okanurak Principal, Bangkok +66 2636 2000 p 3223 chirachai.okanurak @bakermckenzie.com

Kanit Vallayapet Principal, Bangkok +66 2636 2000 p 3112 kanit.vallayapet @bakermckenzie.com

Paralee Techajongjintana Principal, Bangkok +66 2636 2000 p 3101 paralee.techajongjintana @bakermckenzie.com

Wynn Pakdeejit Principal - Managing Partner, Bangkok +66 2636 2000 p 3120 wynn.pakdeejit @bakermckenzie.com

Pisut Attakamol Partner, Bangkok +66 2636 2000 p 3131 [email protected]

Manu Rakwattanakul Partner, Bangkok +66 2636 2000 p 3102 manu.rakwattanakul @bakermckenzie.com

Chaiporn Supvoranid Partner, Bangkok +66 2636 2000 p 3068 [email protected]

Suksawat Watewai Partner, Bangkok +66 2636 2000 p 3149 suksawat.watewai @bakermckenzie.com


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Cont

ribut

ors

Piya Krootdaecha Partner, Bangkok +66 2636 2000 p 3807 piya.krootdaecha @bakermckenzie.com

Timothy Breier Partner, Bangkok +66 2636 2000 p 3223 timothy.breier @bakermckenzie.com

Pradthanaadt Ratanatanungpong Partner, Bangkok +66 2636 2000 p 3144 pradthanaadt.ratanatanungpong @bakermckenzie.com

Piyapong Panyachiva Partner, Bangkok +66 2636 2000 p 3809 piyapong.panyachiva @bakermeckenzie.com

Anan Rattanatanawat Partner, Bangkok +66 2636 2000 p 3811 anan.rattanatanawat @bakermckenzie.com

Vietnam

ManhHung Tran Principal, Hanoi +84 24 3936 9398 [email protected]

Frederick R. Burke Managing Partner, Ho Chi Minh City +84 28 3520 2628 [email protected]

Quach Minh Tri Partner, Hanoi +84 24 3936 9605 [email protected]

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Editorial Team

Fermin Nestor Gadrinab Professional Support Lawyer Asia Pacific +63 2 558 9341 nestor.gadrinab @bakermckenzie.com

Benjamin Roe Lead Knowledge Lawyer for Contentious, London +44 2079 191017 benjamin.roe @bakermckenzie.com

Karla Maquiling Assistant Marketing Manager Asia Pacific Publications +63 2 558 9315 karla.maquiling @bakermckenzie.com

Baker McKenzie Asia Pacific Offices

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CHINA

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MALAYSIA MYANMAR

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PHILIPPINES SINGAPORE

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TAIWAN THAILAND

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VIETNAM

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Asia Pacific Dispute Resolution Guide - V

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