LC Paper No. CB(2)1072/98-99
Senior Assistant Secretary (2) 3
(These minutes have been seen
by the Administration)
I. Confirmation of minutes of meetings on 2 and 17 November 1998
(LC Paper Nos. CB(2)861/98-99 and 862/98-99)
The minutes of meetings held on 2 and 17 November 1998 respectively were confirmed.
II. Items for discussion at the next meeting on 19 January 1999 and subsequent meetings
2. Members agreed that the next regular meeting to be held on 19 January 1999 would discuss the following issues -
3. The Chairman informed the meeting that the subject of issuing of executive orders by the Chief Executive under Article 48(4) of the Basic Law had been raised at a recent meeting of the Bills Committee on Adaptation of Laws Bill 1998. She considered that the subject matter should be discussed by the Panel at a future meeting. Members agreed.
- Consultation Paper on The Procedure Governing the Admissibility of Confession Statements in Criminal Proceedings; and
- Jurisdiction of the District Court and Small Claims Tribunal.
III. Reciprocal enforcement of arbitration awards between the Mainland and the Hong Kong Special Administrative Region
(LC Paper No. CB(2)845/98-99(02))
4. Secretary for Justice ("SJ") briefed members on the paper (LC Paper No. CB(2)845/98-99(02)) which highlighted the progress of the establishment of arrangement for the reciprocal enforcement of arbitration awards between the Mainland and the Hong Kong Special Administrative Region ("HKSAR"). Members noted that before 1 July 1997, reciprocal enforcement of arbitration awards between the two jurisdictions was governed by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards done at New York on 10 June 1958 ("the NY Convention"). The NY Convention continued to apply to the HKSAR as part of the People's Republic of China after the reunification. However, being an international agreement, the NY Convention was not applicable to the enforcement of arbitration awards between the HKSAR and the rest of China since 1 July 1997. To rectify this situation, new arrangement should be established as soon as possible.
5. SJ advised that the HKSAR had a few exchanges with Mainland experts and consulted concerned oraganisations such as the Securities and Futures Commission and the Hong Kong International Arbitration Centre on the proposed arrangement. Both sides had agreed that the following principles should be observed -
6. SJ said that under the above guiding principles, it was intended to include in the new arrangement the following features -
- to ensure continuity, the new arrangement should follow as closely as possible the practice prior to the reunification;
- reciprocal recognition and enforcement of arbitration awards, or refusal of enforcement, should be in accordance with the laws and rules of procedures in the place where enforcement was sought. This was to reflect the principles and spirit of Article V of the NY Convention; and
- the implementation of the new arrangement should result in minimum changes to existing legislation, i.e. the Arbitration Ordinance (Cap. 341).
7. In relation to (d) above, SJ advised that enforcement applications in the Mainland should be made within six months after the commencement of the new arrangement. As for the HKSAR, there would be no time limit for application to reflect the pre-handover position.
- an account of the documents which should accompany any application for enforcement of arbitration awards;
- a provision requiring relevant courts to handle applications for enforcement of arbitration awards in accordance with the laws and practice of the place in which an award would be enforced;
- the grounds for refusal to enforce awards, modelling on those set out in the NY Convention; and
- provisions for handling applications made between 1 July 1997 and the commencement day of the arrangement.
|8. The Administration informed members that the major principles for the new arrangement had been agreed at a meeting with the Mainland authorities held in Beijing on 2 November 1998. There remained a small number of issues which had yet to be resolved, including the Mainland arbitration bodies whose awards would be enforceable in the HKSAR. Despite the fact that there were some 90-odd arbitration agencies in the Mainland, enforcement of Mainland arbitration awards in Hong Kong before 1 July 1997 was only confined to awards made by the China International Economic and Trade Arbitration Commission ("CIETAC") and the China Maritime Arbitration Commission ("CMAC"). The HKSAR was discussing with the Central People's Government with a view to continuing with this practice, which was familiar to both jurisdictions, at the initial stage of implementation of the new arrangement to ensure minimum disruption. The Administration added that it was hoped that another meeting between the two sides to deal with outstanding issues would be held by early January 1999 and a formal agreement would be reached soon. The Administration undertook to report details of the arrangement to the Panel in due course.
9. At the invitation of the Chairman, Mr Russell COLEMAN said that he agreed with most of the contents of the paper prepared by the Administration on the subject. He said that traditionally Hong Kong had been recognised as a good middle ground for arbitration between international parties to business and trade, who were content to have their disputes resolved through arbitration in Hong Kong. The outcome of arbitration conducted in Hong Kong was respected and mutually enforceable in the places concerned. Because of the absence of reciprocal arrangement between the HKSAR and the Mainland and the uncertainty hanging over the enforceability of a Hong Kong arbitration award in the Mainland (and vice versa) after the reunification, other competing arbitral communities such as Singapore had taken the opportunity to attract some important international dispute resolution business away from Hong Kong. Mr COLEMAN said that new reciprocal arrangement between the HKSAR and the Mainland should have been put in place at an earlier stage.
10. Mr Russell COLEMAN also agreed to the proposal to limit recognition and enforcement of arbitration awards made by CIETAC and CMAC at the initial stage in order not to delay the implementation of the new arrangement. He added that he did not see that the new arrangement outlined by the Administration would pose any significant problems to practitioners in the local arbitration field.
11. Mr Albert HO said that given the principal objective to achieve a smooth transition and continuation of the pre-reunification practice, he was disappointed that the delay in reaching an agreement with the Mainland had resulted in a "vacuum" period since 1 July 1997 during which reciprocal arrangement between the two jurisdictions had ceased. He opined that the matter was straight-forward and involved no political implications, and queried why previous arrangement under the NY Convention could not be adapted immediately after the reunification. SJ responded that matters relating to reciprocal enforcement of arbitration awards had to be dealt with in accordance with Article 95 of the Basic Law. These were affairs outside the remit of the Sino-British Joint Liaison Group before 1 July 1997. The NY Convention being an international instrument, was not applicable to the enforcement of arbitration awards between the HKSAR and the Mainland which were within the same sovereign state. This coupled with the different legal and judicial systems in the two places accounted for the delay in reaching an early agreement. She stressed that the arrangement which had now been agreed preliminarily with the Mainland followed the principles and spirit of the NY Convention and preserved the pre-reunification position.
12. Mr Albert HO further queried whether the Administration had any information as to the loss to Hong Kong in arbitration business as a result of the parties turning to other jurisdictions for settlement of business disputes because of the lack of arrangement for mutual enforcement of arbitration awards between the HKSAR and the Mainland. Director of Administration ("D of A") replied that there was no specific information available. However, out of the 100-odd applications made to the Supreme Court between July 1996 to June 1997 for enforcement of arbitration awards, less than ten cases involved awards made in the Mainland.
13. In reply to the Chairman, Mr Russell COLEMAN said that the question of loss was primarily related to a situation where people chose to arbitrate other than in Hong Kong during the "vacuum" period since 1 July 1997. He pointed out that the loss could not be easily ascertained unless one had accurate information about the number of arbitration agreements concluded between parties doing international businesses who detracted from the choice of Hong Kong as an arbitration venue because of the absence of new arrangement. He added that despite the difficulty of getting such information, it was well understood that a lot of arbitration work had been attracted to places like Singapore which had been quick in proclaiming the lack of mutual arrangement between the HKSAR and the Mainland for the matter. Nonetheless, he expected that business should return if the new arrangement could be put in place early.
14. Mr Martin LEE enquired whether there had been cases of the Hong Kong court refusing to enforce arbitration awards made in the Mainland on the specific ground listed in section 44(2)(e) of the Arbitration Ordinance (Cap. 341), i.e. that the composition of the arbitral authourity or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, with the law of the country where the arbitration took place.
15. In response, D of A said that there was no such information available, but it was known that a limited number of applications for enforcement of awards made by CIETAC or CMAC had failed in the past for technical reasons. Mr Russell COLEMAN pointed out that refusal of enforcement would have been for any one of the reasons set out in section 44 of Cap. 341 which was factually specific to the particular case concerned, rather than for factors relating to the auspices or status of the arbitral bodies which made the awards. He said that he had not come across any arbitration awards made by Mainland bodies being refused enforcement in Hong Kong on ground of section 44(2)(e) of Cap. 341.
16. In reply to Mr Albert HO's question, SJ said that it was not a duty upon a jurisdiction which refused to enforce an arbitration award made in another jurisdiction to notify the arbitration body concerned and explain the reason for refusal. She said that it was reasonable to expect that the party which sought to invoke the enforcement of the award would inform the arbitral authority of the outcome of the application.
IV. Service of judicial documents in civil and commercial matters between the Mainland and the HKSAR
(LC Paper No. CB(2)845/98-99(03))
17. D of A briefed members on LC Paper No. CB(2)845/98-99(03) which outlined the reciprocal arrangement to be made for the service through official channels of judicial documents in civil and commercial matters between the Mainland and the HKSAR. Before the reunification, practical arrangement existed for the service of judicial documents between Hong Kong and the Mainland. The arrangement was governed by the provisions of the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters signed at The Hague on 15 November 1965 ("the Hague Convention"). Similar to the situation of reciprocal arrangement for enforcement of arbitration awards, the Hague Convention being an international agreement was no longer applicable to service of judicial documents between the HKSAR and the Mainland after the handover. It was necessary to establish a new mechanism to enable the system of service of judicial documents to continue after the reunification. In brief, the re-establishment of arrangement had been worked out generally along the lines of the arrangement prior to the reunification and reflected the principles of the Hague Convention. Under the new arrangement, the Supreme People's Court of the Mainland and the High Court of the HKSAR would oversee the operation of the mechanism for the service of judicial documents. The SAR Government hoped to sign the memorandum of understanding on the details of the arrangement with the Mainland shortly, and thereafter introduce necessary amendments to the Rules of the High Court to give effect to the new arrangement.
18. The Chairman enquired of the types of judicial documents that could be entrusted for service by the judicial bodies of both the HKSAR and the Mainland of China. The Administration replied that the general types of documents had been specified in paragraph 8 of the information paper. The Administration could provide samples of those documents to be used in the HKSAR for members' reference if necessary. The SAR Government was awaiting the Mainland authorities to specify and provide samples of the documents for use in the Mainland. Although the names for the specific judicial document for use in the two jurisdictions differed, the documents were similar by nature.
19. At the invitation of the Chairman, Ms Audry EU pointed out that judicial documents that could be entrusted for service included copy of originating process, decision or ruling or court order etc. She asked what would be the likely legal consequences to a party in Hong Kong who ignored a judicial document, for instance, a copy of originating process, served upon him by the Mainland.
20. D of A replied that the arrangement proposed was confined to reciprocal service of judicial documents, not reciprocal enforcement of judgements. However, a person in Hong Kong to whom judicial documents were served would need to consider the consequences of failing to act on the matter, when he subsequently entered the Mainland. She said that basically the principles and spirit of the Hague Convention which bound its contracting states would also be applicable to the HKSAR and the Mainland.
21. Mr Albert HO expressed disappointment that comprehensive arrangement had yet to be agreed and put in place. He asked whether, before formal arrangement was put into effect, a party in the Mainland could serve judicial documents to a person in Hong Kong by means other than entrusting the court for the service, such as publishing the documents concerned in the news media. He said that if such other channels for service did exist, they should be clearly specified to protect the interests of the opposite party to litigation.
22. The Administration responded that under the proposed new arrangement, where the entrusted party was the High Court of the HKSAR, service would be effected by the court Baliffs who would be responsible for delivering the documents directly to the persons to be served. The entrusted party would provide a certificate of service (or non-service) after the documents had been successfully (or unsuccessfully) served. Before the reunification, a party in Hong Kong could appoint a solicitor in the Mainland to serve judicial documents to the other party in the Mainland (and vice versa). This would remain to be an accepted practice. The Administration added that the previous arrangement between Hong Kong and the Guangdong province was also suspended, pending the new mechanism to become operational.
23. In reply to the Chairman's question on the time limit for service of documents after receipt of letter of entrustment, SJ said that flexibility would be exercised by the High Court to deal with urgent cases. Under the new arrangement, the time limit would be two months.
|24. In response to the Chairman, Ms Audrey EU enquired whether "summons" referred to in paragraph 8 of the Administration's information paper included summonses of witnesses in Hong Kong issued by Mainland judicial bodies, and what would be the legal implications if a person in Hong Kong so summonsed refused to give evidence as directed. In this connection, Ms EU pointed out that the scope of criminal jurisdiction of the Mainland courts was wider than that of the courts in the HKSAR. She enquired whether this wider scope of jurisdiction of the Mainland courts also applied in respect of civil matters. SJ agreed to provide a written reply on the points raised.
25. Mr Albert HO enquired of the arrangement between the HKSAR and the Mainland after 1 July 1997 regarding authentication of legal documents issued in the Mainland. SJ said that before the reunification, authentication of documents in the Mainland was done by the various authentication bodies in the provinces and cities. Authenticated documents were channelled to Hong Kong through the Chinese Ministry of Foreign Affairs and the British Consulate. Since the handover, authenticated documents, after being attested by the Chinese Ministry of Foreign Affairs, were sent directly to the HKSAR. SJ advised that in view of the large number of authentication agencies in the Mainland, the Ministry of Foreign Affairs, which was experienced in handling those matters, would continue to take up the responsibility in the meantime in order not to cause undesirable delay in processing the documents. She added that to improve the procedure, an alternative system of attestation by the Judiciary was being considered.
|26. SJ further advised that the Evidence Ordinance had no provisions to cover authentication of documents issued in the Mainland. The Chairman said that as the Mainland was no longer a foreign jurisdiction, the law should be reviewed to determine if legislative amendments were required to provide for such matters. SJ agreed to provide a written response on this issue.
27. The Chairman enquired of the timeframe for the signing of the memorandum of understanding with the Mainland. SJ replied that it was targeted for eary January 1999. Necessary amendments to the Rules of the High Court would be introduced afterwards.
V. Legal Aid Policy Review 1997
(LC Paper No. CB(2)845/98-99(04))
28. At the invitation of the Chairman, D of A introduced the information paper (LC Paper No. CB(2)845/98-99(04)) which explained the Administration's preliminary views on the points raised by members at the meeting held on 15 September 1998 on the Legal Aid Policy Review 1997.
Enhanced protection of Legal Aid Fund
29. Mrs Miriam LAU asked the Administration to further clarify the liabilities of an assigned solicitor who failed to comply with the requirement under section 19A(1) of the Legal Aid Ordinance (Cap. 91) to make direct payment to the Director of Legal Aid ("DLA"). DLA responded that the costs of legally aided proceedings, including fees to counsel and solicitors assigned by the Legal Aid Department, were paid by the Legal Aid Fund and recouped from any moneys recovered on behalf of the aided person for whom they acted. There would be a ground for not paying the assigned solicitor if he ignored the requirement in section 19A(1), thereby depriving the DLA of the moneys received and incurring a loss to the Legal Aid Fund, if the moneys could not be recovered. However, having considered members' views expressed at the meeting on 15 September 1998, the Administration intended to revise its proposal so that only the assigned solicitors who failed to remit the moneys received by him to DLA would be held responsible for the consequential loss to the Legal Aid Fund. After discussing with the Law Society of Hong Kong, the Administration was also considering to empower the DLA to defer payment of the solicitor's profit costs until the requirements in section 19A(1) had been complied with, or to withhold such payment when the Legal Aid Fund suffered a loss and the Law Society took disciplinary action against the solicitor for failure to comply with the statutory requirement. DLA advised that a similar principle regarding protection of legal aid fund was adopted in the U.K. where under the English Legal Aid Scheme the Legal Aid Board had power to defer payment of the solicitor's profit costs if, as a result of his default or omission, the fund incurred a loss, and where the solicitor was disciplined, to retain the sum which would otherwise be payable by the Legal Aid Board to the solicitor.
30. Regarding disciplinary action against solicitors, DLA said that it was solely a matter for the decision of the Law Society. He added that the Administration would continue to discuss with the Law Society on the above proposal.
|31. In response to the Chairman, Mr Raymond HO said that the Law Society opposed to the original proposal made by the Working Group on the Legal Aid Policy Review 1997 relating to enhanced protection of the Legal Aid Fund. He advised that the Law Society had yet to form a considered view on the Administration's revised proposal of relying on the Law Society's disciplinary mechanism to determine whether the Legal Aid Fund should withhold payment of profit costs to an assigned solicitor who failed to observe section 19A(1) of the Legal Aid Ordinance. Mr HO said that the Law Society would provide a more detailed response in writing.
Extending legal aid to next of kin in coroner's inquests
32. Mr James TO said that he had considered the Administration's response and remained of the view that the criteria for providing legal aid should be relaxed to cover coroner's inquests. He pointed out that under the Coroners Ordinance (Cap.504), SJ had power to require inquest into the death of a person in justifiable circumstances. He considered that the exercise of such power of SJ in a particular case would mean that significant public interest was involved in the case, and legal aid should therefore be granted to members of the bereaved family concerned. In addition, he opined that legal assistance should also be extended to cover cases where a person died in official custody for which a coroner was required to hold an inquest into the death. Mr TO supplemented that in view of the small number of coroner's inquests in these categories, the financial implications involved in granting legal aid to such cases would be minimal. Echoing on Mr TO's views, Mr Martin LEE said that he saw no reason for the DLA to reject the proposal which would enhance his discretionary power to grant legal aid under the Legal Aid Ordinance. Mr LEE also found the Administration's view that it was difficult to define "public interest" unacceptable (paragraph 9 of the paper refers).
33. In reply, DLA said that in most cases, legal aid would have been granted to the applicants to pursue civil claims before the coroner's inquest took place. At present, legal aid was not available to proceedings before the coroner's court if there were no civil claims involved. The recommendation of the Working Group that persons who had already been granted legal aid certificates and who were required to attend coroner's inquests might be legally represented at coroner's inquests would address members' concern.
|34. Mr Martin LEE expressed the view that cases of public interest might not necessarily involve claims for compensation. In some cases, public interest warranted an inquest to reveal the cause of death of a person for the purpose of deciding whether injustice had been done. He said that legal aid should be extended to cover such cases. DLA said that the matter raised involved policy implications and would need to be further considered by the Administration.
Duty Lawyer Service
35. Mr Albert HO suggested that consideration should be given to replacing the Duty Lawyer Service ("DLS") with the standard legal aid scheme to assist persons in complicated proceedings in coroner's inquests. In response, the Administration advised that the DLS, whose eligibility criteria were less stringent, afforded more flexibility in dealing with such cases. Where there was a very complicated case, a solicitor other than the duty lawyer could be assigned to represent the aided party throughout the entire proceedings at the inquest.
Cases involving the Bill of Rights Ordinance and the Basic Law
36. In response to Mr Albert HO's question, DLA clarified that an applicant for legal aid in respect of a case of a breach of the Bill of Rights Ordinance was subject to the means test, but the DLA was empowered to grant legal aid to the person even if his financial capacity was greater than the eligibility limit for the standard legal aid scheme. The aided person would be required to made a contribution in accordance with the Legal Aid Ordinance. Mr HO suggested that the same arrangement should apply to cases involving constitutional matters such as compliance with the provisions of the Basic Law.
Legal aid for employees involved in employers insolvency cases
37. The Adminisration informed the meeting that consideration was being given to improving the procedures between the Legal Aid Department and the Protection of Wages on Insolvency Fund Board in handling the type of cases raised by the Hon. LEE Cheuk-yan, i.e. cases where the employees seeking to obtain legal aid to recover arrears of wages through normal legal proceedings might be required to make contributions which could exceed the amount of wages outstanding.
|38. The Chairman said that she was also concerned about other issues arising from the Legal Aid Policy Review. These included, for example, assessment of disposable income of a legal aid applicant and payment of contribution by the aided persons under the supplementary legal aid scheme. She requested the Administration to have further discussions with the Panel on these and the issues raised by members at this meeting before finalising its recommendations on the Review.
VI. Any other business
39. Members agreed that a special meeting should be held to discuss the criminal jurisdiction of the Mainland and HKSAR courts. Members of the Panel on Security would be invited to attend the meeting.
(Post-meeting note: The special meeting is scheduled to be held on 16 January 1999 at 9:00 am.)
40. There being no other business, the meeting ended at 6:40 pm.
Legislative Council Secretariat
18 January 1999