The Supreme People’s Court of the People’s Republic of China recently issued a letter on 30 December 2009 to all Higher People’s Courts in mainland China confirming that ad hoc arbitral awards made in Hong Kong and those arbitral awards made in Hong Kong by the International Court of Arbitration of the International Chamber of Commerce and other foreign arbitration institutions are enforceable in mainland China in accordance with the Arrangement concerning Mutual Enforcement of Arbitral Awards between mainland China and the Hong Kong Special Administrative Region signed in 1999 (the “Arrangement”).

As long as these Hong Kong arbitral awards do not fall within Article 7 of the Arrangement, they will be enforceable in mainland China in a similar manner to arbitral awards made overseas in any New York Convention contracting country. Article 7 of the Arrangement largely reproduces the grounds for resisting the enforcement of awards set out in Article V of the New York Convention.

In light of this confirmation by the PRC Supreme People’s Court, we anticipate that Hong Kong may become an increasingly popular forum for arbitration especially if the dispute involves any China element.