On 4 December 2014, an insurance agent was sentenced to jail for 4 weeks for a contravention of section 50B(1)(c)(i) under the Personal Data (Privacy) Ordinance, Cap. 486 of the Laws of Hong Kong (“PDPO”). Under the said provision, a person commits an offence if he makes a statement to the Privacy Commissioner (“Commissioner”) which he knows is false or does not believe to be true or knowingly mislead the Commissioner, and is liable for a maximum fine of HK$10,000 and 6 months’ imprisonment.

The case followed a complaint lodged by an individual to the Office of the Commissioner claiming that the insurance agent had obtained her personal data through unfair means. During the investigation, the insurance agent falsely represented to the Commissioner that he had been assigned to work with the complainant when he was employed by his then employer which was denied by the employer. The insurance agent was convicted for the contravention of the said section 50B(1)(c)(i) of PDPO.

In addition to the above, other non-compliances of the PDPO may also lead to a prison sanction, such as:

1. Section 35C – use of personal data in direct marketing without taking specified action;
2. Section 35E – use of personal data for direct marketing without consent;
3. Section 50A – contravention of enforcement notice issued by the Commissioner; and
4. Section 64 – disclosure of personal data obtained without consent from data users with an intent to make a gain or to cause loss to the data subject or causing psychological harm to the data subject.

Given the first individual being sentenced to jail under PDPO, public and institutions should be more aware of the use of personal data and ensure compliance with the provisions in PDPO at all times.

On 8 April 2015, SW partner Mr. Eric Lui and SW Head of Business Development (China) Ms. Connie Yeung attended “2015 International Dispute Resolution Forum” held in Shanghai by AllBright Law Offices. Topic of the forum was “How PRC enterprises resolve cross-border investment disputes by way of arbitration”.

Introduction was given at the forum on areas including cross-border disputes, overseas litigation as well as arbitration in Shanghai and Korea. In light of China’s economic growth, numerous PRC enterprises actively expand their business overseas and thus inevitably encounter cross-border disputes which have to be resolved by litigation or arbitration. In response to such needs, Mr. Eric Lui delivered a speech and his topic was “Is it easy to resolve disputes by litigation overseas?”. In addition, Eric gave in-depth exchange of ideas with attendees including entrepreneurs, legal personnel and investors.

Please contact our Eric Lui for any enquiries or further information about this event.

The China International Economic and Trade Arbitration Commission (“CIETAC”) Arbitration Rules 2015 (“the 2015 Rules”) applies to CIETAC arbitrations commenced on or after 1 January 2015, or where the parties agree to apply the 2015 Rules for arbitrations commenced before 1 January 2015.  Given Hong Kong has a separate judicial and arbitration regime, certain special provisions are provided for in the 2015 Rules for CIETAC arbitrations.  This article will provide a brief summary on the special provisions for CIETAC arbitrations administered by CIETACHong   KongArbitrationCenter.

Article 74 – Place of Arbitration and Law Applicable to the Arbitral Proceedings

This Article provided that unless otherwise agreed by the parties, for an arbitration administered by the CIETACHong KongArbitrationCenter, the default place of arbitration shall be Hong Kong.  The arbitration law of Hong Kong is the applicable law to the arbitral proceedings and the arbitral award made in a CIETAC Hong Kong arbitration shall be a Hong Kong award.

Article 75 – Decision on Jurisdiction

Firstly, in Article 75, it provided that any objection to an arbitration agreement and/or the jurisdiction over an arbitration case must be raised in writing before the submission of the first substantive defense whereas in the general provisions (Article 6.4) of the 2015 Rules, any objections can be made before the first oral hearing.

Secondly, Article 75 stated that the arbitral tribunal shall have the power to determine the existence and validity of the arbitration agreement and its jurisdiction over the arbitration case. In the contrary, under the general provisions (Article 6.1), the arbitral tribunal can only make such determination when CIETAC delegates the relevant power to the tribunal.

This special provision has brought the 2015 Rules applicable to the CIETAC Hong Kong more consistent with the international arbitration rules in relation to any jurisdictional challenges.

Article 76 – Nomination or Appointment of Arbitrator

The CIETAC Panel of Arbitrators is to be recommended in arbitration cases administered by the CIETACHong KongArbitrationCenter.  However, this Article also provided the option to the parties to nominate their preferred arbitrators from outside the CIETAC’s Panel of Arbitrators.  Consensus between the parties on nomination is not necessary.

Clearly, this gave some flexibility to the parties as compared to the general provisions (Article 26.2) where agreement between all parties must be reached.  Nonetheless, one should also note that even consensus between the parties is not a prerequisite, the nominated arbitrator is subject to the confirmation of the Chairman of CIETAC before he/she can be appointed.

Article 77 – Interim Measures and Emergency Relief

This Article conferred the power on the arbitral tribunal to order appropriate interim measures when requested by one of the parties, or if the arbitral tribunal has not yet been formed, a party may apply for emergency relief pursuant to the CIETAC Emergency Arbitrator Procedures.  This provided a more extensive power to the arbitral tribunal as compared to the CIETAC tribunals in mainland arbitrations.

Although Article 23 in the general provisions allows the parties to apply for an emergency arbitrator to grant any urgent interim relief, under PRC law, the power to grant such measures is generally reserved to PRC courts.  Therefore, CIETAC does not have the power to actually grant such relief to the parties and will have to forward such application to the relevant PRC courts.

The China International Economic and Trade Arbitration Commission (“CIETAC”) Arbitration Rules 2015 (“the 2015 Rules”) has come into effect on 1 January 2015, which will apply to all CIETAC arbitrations commenced on or after 1 January 2015. For arbitration proceedings commenced before 1 January 2015, parties may also agree to adopt the 2015 Rules.

One of the highlights of the new 2015 Rules is the introduction of emergency arbitrators under Art.23, which is in line with s.22B of Hong Kong’s Arbitration Ordinance. S.22B provides that any emergency relief granted, whether in or outside Hong Kong, by an emergency arbitrator is enforceable in the same manner as a court order with leave of the court. Such emergency relief may include:-

• Interim injunction to prevent actions which are likely to cause harm or prejudice to the arbitral process;
• Relief for preservation of assets;
• Security for costs of the arbitration, etc.

Another highlight of the 2015 Rules is that provisions which address multi-party disputes are introduced. Article 18 enables a party to file a request for joinder with CIETAC to join an additional party to the arbitration proceedings, and a decision shall be made by CIETAC after hearing submissions from all parties. CIETAC may also consolidate two or more arbitrations into a single arbitration under certain conditions stipulated in Article 19.

Please contact our Eric Lui or Heidi Chui for any enquiries or further information about this news.

Promulgation of Catalogue of Industries for Guiding Foreign Investment (2015 Revision)

The Catalogue of Industries for Guiding Foreign Investment (2015 Revision) has been promulgated by National Development and Reform Commission and the Ministry of Commerce, and will come into force on 10 April 2015. Simultaneously, the 2011 Revision shall be repealed.

Compared to the 2011 Revision, in the Catalogue of Prohibited Industries for Foreign Investment, the items “internet publication service” and “enterprises in the business of auction and sale of culture relic” are added. In the Catalogue of Restricted Industries for Foreign Investment, items “distribution of audio and video production (excluding movies) (limited to Chinese-foreign equity)” and “operation of entertainment premises (limited to Chinese-foreign equity or contractual joint ventures)” are deleted, and the maximum foreign shareholding limit of 50% for E-Commerce has been excluded from other Value-Added Telecommunication business. Furthermore, in the Catalogue of Encouraged Industries for Foreign Investment, the restriction of “shareholding by Chinese party” over “operation of performance venues” is removed.

On 29 March 2015, SW partner Mr. Eric Lui and our Head of Business Development (China) Ms. Connie Yeung delivered a presentation at a conference organised by the Finance and Securities Committee of the Bar Association of Chengdu heed at AllBright’s office in Chengdu.

At the conference, Mr. Lui and Ms. Yeung discussed asset protection strategies, the advantages and application of overseas trusts, building overseas assets and PRC-guaranteed foreign loans.

Please contact our Eric Lui for any enquiries or further information about this event.