12
Second, in anticipation of the pipeline of arbitration
matters arising from BRI projects, we are seeing a
number of arbitration institutions in Asia updating
their arbitration rules and guidelines. 2017 saw
CIETAC establish a separate arbitration centre for
resolving public-private partnership disputes and
adopt specific rules for international investment
arbitrations (building on a lead established by the
Singapore International Arbitration Centre in 2016).
In 2018, the Hong Kong International Arbitration
Centre will update its arbitration rules, with changes
likely to be made to further facilitate the resolution
of complex disputes involving multiple parties and
contracts - a common feature in BRI projects.
Separately, in 2016, the International Academy of
the Belt and Road published the 'Blue Book', which
includes arbitration rules.
Third, with the significant amounts potentially at
stake in BRI disputes, third-party funding likely will
take on added importance. This is particularly the
case because of the significant growth in available
funds, the number of funders with an Asian
presence, and legislative developments liberalising
the regulation of third-party funding in key Asian
jurisdictions such as Singapore and Hong Kong.
Furthermore, contingency fee arrangements are
widespread in China - and much welcomed by
Chinese parties - so third-party funding is but
a natural step in a similar direction.
Fourth, we expect the wave of China-related
construction arbitrations to continue. As Chinese
construction contractors follow the Chinese money
into BRI projects around the world, and many
Chinese contractors are able to price competitively
to win roles on global projects, Chinese parties will
become a fixture in major construction disputes
around the world at many levels in the supply chain.
Finally, given the nature of BRI investments - often
involving massive sums invested in regulated sectors
- over the longer term, there likely will be an
increase in the number of investor-state disputes,
as investors in BRI projects seek recourse under
relevant bilateral and multilateral treaties against
host states. Already, we are seeing significantly
increased interest in - and familiarity with - such
treaties among our Chinese clients who are investing
abroad. One interesting question is how this might
affect the approach taken by the Chinese
government in its negotiations and treatment of
such treaties, as outbound investment continues
to grow from Chinese companies - in BRI projects
and more generally.
China's Belt and Road initiative:
opportunities and risks
4
Silk Road Economic Belt
21st Century Maritime Silk Road
Europe
Southeast
Asia
South China Sea
South Pacific
Russia
Central Asia
Mediterranean Sea
Middle
East
South Asia
Indian
Ocean
China's Belt and Road
' Given the vast number and scale
of international infrastructure
projects under China's BRI,
in Asia, the Middle East, Africa
and Europe, we expect to
see an increase in related
arbitrations. Given our expertise
in infrastructure disputes, we are
well placed to advise parties on
the issues that are likely to arise.'
Erin Miller Rankin, Partner, Arbitration
BMI Research (A Fitch Group Company)