Plus ça change, plus c'est la même chose

THE deadening hand of the Chinese state apparatus would squeeze the commercial life out of Hong Kong following the end of British rule in 1997. Such was the concern voiced by many in the run-up to the handover. It hasn't happened, of course. On the surface, little, if anything, has changed. And, as far as the maritime law community is concerned, it has been a case of business as usual.

This hasn't been the result of a passive stance on the part of China, though. Maintaining a status quo requires effort too. Italian scribe Giuseppe di Lampedusa once wrote, "If we want things to stay as they are, things will have to change." He may as well have been describing Hong Kong.

"Many US lawyers, in particular, thought that Hong Kong would become communist," says Robin Peard, consultant and former partner with Johnson, Stokes and Master in Hong Kong, who prefers to speak of the "reunification" with China, rather than of Britain handing over its former colony. "Since the reunification, there has been no actual impact. The Hong Kong legal scene so far as maritime law is concerned has remained the same," he says.

Word has still to reach the masses, though, according to Chris Potts, partner in Crump & Co, a firm that originated in London in 1864, but whose Hong Kong office has outlasted its London progenitor, which closed in July 1998. "There is a perception that Hong Kong has been sucked into the People's Republic of China system," he says. Put simply, this perception is wrong. According to Potts, "The PRC has gone out of its way to preserve Hong Kong's status. It sees Hong Kong as a window to the outside world and it wants to nurture this."

But work needed to be done if this window was to be kept open. The PRC and Hong Kong legal systems were quite distinct. Regardless of a number of essential principles of international conventions, such as the Hague Rules, the Hague-Visby Rules and the Hamburg Rules, being incorporated into its maritime code, the PRC maritime law regime was far removed from that in Hong Kong. Effort has been put into enacting new legislation, and the PRC is using Hong Kong as the benchmark for its own maritime law sector, rather than the other way round.

Not everything has remained the same in Hong Kong. Minor adjustments have had to be made. For instance, the last tier of judicial appeal has had to be amended. Previously, the Privy Council in London had the last word on legal disputes. In its stead, Hong Kong now has a Court of Final Appeal, made up of both local and foreign judges. Broadening the Court of Final Appeal's catchment area of expertise was a conscious move by Chinese officials wishing to preserve Hong Kong's status. The thinking is simple. By drawing on the expertise of foreign experts, Hong Kong keeps its appeal as a legal forum for potential foreign users.

By drawing on the expertise of foreign experts, Hong Kong keeps its appeal as a legal forum for potential foreign users.

The handling of the Court of Final Appeal is indicative of how the PRC has gone about expending much effort to change as little as possible. Arbitration in Hong Kong has also benefited. Prior to reunification, there were legitimate concerns about what would happen to the Hong Kong and PRC arbitration processes. The issue of mutual enforcement of awards was of particular concern. Amendments have recently been made to mainland and Hong Kong law which allow all Hong Kong awards to be enforced in the mainland and awards by more than 100 mainland arbitration commissions to be enforced in Hong Kong. The agreement essentially reinstates the position prior to reunification when mutual enforcement was largely based on the New York Convention.

It is also worth noting that the language used in Hong Kong courts for commercial disputes is still English, and will remain so for some time to come. Suggestions that Beijing would stipulate the use of Chinese in Hong Kong courts were wide of the mark. And with good reason, say local lawyers. As they point out, Hong Kong Chinese speak Cantonese, not Mandarin, the Beijing dialect. Even in disputes involving Chinese interests, it may be more convenient to conduct proceedings in English.

To all intents and purposes, then, Hong Kong's maritime law forum is much the same as it was prior to 1997. Does this, though, mean that it is in effect a forum dominated by British lawyers? No, says Chris Kidd, partner in Ince & Co in Hong Kong and secretary of the Hong Kong Maritime Law Association. "While it is true that maritime law is mostly in the hands of UK firms with offices in Hong Kong, one should not infer from this that the level of Chinese interest in maritime law in Hong Kong is limited. This is reflected by the fact that most of the firms have a high degree of Chinese-speaking partners and assistants," he says.

Maritime legal expertise among the local Chinese population reaches to the highest echelons. Hong Kong's Admiralty Judge, William Waung, is a local man, who has many fans among Hong Kong lawyers, who appreciate his ability to blend western legal formalities with the informal, conciliatory approach adopted by traditional Chinese judges. "Justice Waung is an informal judge who actively engages with the cases before him. He is a very interactive judge, which is the way in China," says Chris Potts.

The "east-meets-west" appeal of legal proceedings in Hong Kong is echoed by those keen to promote Hong Kong as a forum. According to a leaflet put out by the Hong Kong Port and Maritime Board, "Hong Kong's empathy with the Asia traditions of mediation and its skills at blending the best of east and west have made it the prime centre in Asia for the resolution of disputes."

Chris Kidd points out that this is particularly beneficial where a Chinese party in a dispute refuses to take the matter to London or New York, and the other party will not agree to a PRC forum. A local marine surveyor, who wishes to remain anonymous, also suggested that mainland Chinese appreciate the fact that, in Hong Kong, legal forums are less vulnerable to "coercion" than they are in the rest of China.

But in spite of the fact that much has been done to maintain Hong Kong's status as the region's top maritime law forum, no one is resting on their laurels. And with good reason. Singapore recently announced loudly that it wants to become a leading maritime service centre. Currently little more than a large port, Singapore has a long way to go, particularly in terms of maritime law, which suffers under a heavily restrictive regime that serves to deter foreign legal expertise. Nonetheless, the announcement was enough to shake the authorities in Hong Kong into action.

Stephen Ip, Hong Kong special administrative region secretary for economic development, announced late last year that Hong Kong was to improve its range and quality of maritime services. The aim is to create the ultimate one-stop shop.

The desire to improve can be found in Hong Kong's legal community too, and reaches all the way to the top. "We are looking to improve the auction process in Hong Kong. At the moment, it is tender-based, and we'd like to get rid of the gap between the bids made for a vessel and the asking price or the value of the ship. If the asking price isn't achieved, the sale can't go ahead, unless a judge gives permission," says Justice William Waung. For "We" read "I". According to Hong Kong's maritime lawyers, Waung is nothing if not hands-on, and many expect him to remain actively involved in bringing about the changes required for Hong Kong to maintain its status.

It is best not to use the western paradox of change and stability when talking about maritime law in Hong Kong. Better to use the Asian concept of Yin and Yang - two parts without which neither is whole. An apt metaphor too for China and Hong Kong on many more levels.