The prospect of disputes arising in respect of projects under China’s Belt and Road Initiative (BRI) has generated considerable interest, accompanied by positioning on the part of governments, government institutions, lawyers and academics who see potential opportunities.

The BRI is, of course, a very amorphous concept. Although primarily associated with infrastructure construction, which tends to involve large Chinese companies and Chinese funding, projects along the Belt and Road also involve governments other than the Chinese government and don’t necessarily include Chinese parties.

There are already a significant number of competing options available for the resolution of disputes arising from BRI projects — domestic courts, nominated foreign courts, domestic arbitration institutions, international arbitration institutions, ad hoc options, mediation institutions, investor-state arbitration under the auspices of the International Centre for the Settlement of Investment Disputes (ICSID) and so on.

The Chinese government’s also actively interested in strengthening Chinese institutions’ participation in BRI dispute resolution. A range of options for the law to govern contracts and related disputes is also available, due to the generally recognised autonomy of the parties to a contract to nominate the law governing the contract.

These include the law of the host state, which may well prefer major infrastructure contracts to be governed by the law where the infrastructure is located, the law favored by the lenders or contractors, or the law of a neutral third party such as English or Hong Kong law. There may be a mixture of different laws when a project involves a range of contractors and contracts. Logically, the law selected should also affect the location and method of commercial dispute settlement. However, this is not a requirement, and both arbitration institutions and courts are anxious to show that they are competent to deal with disputes which are subject to foreign law.

Further complicating the picture, an investment treaty may specify the governing law for claims by investors against the host state as part of the substantive commitments in the treaty. There are many methods of arbitrating commercial disputes in the Asia Pacific, including recourse to the major arbitration institutions. The China International Economic and Trade Arbitration Commission (CIETAC), the Hong Kong International Arbitration Centre (HKIAC), the Singapore International Arbitration Centre and the International Chamber of Commerce and others have taken steps to highlight their international experience, and their ability and willingness to handle BRI disputes. The development of international commercial courts is intended to challenge international commercial arbitration as the preferred dispute resolution method of choice in Asia. Singapore led the way by setting up the Singapore International Commercial Court which offers the services of expert judges from a range of jurisdictions, flexibility in using foreign law and rules of evidence, foreign legal representation and, if desired, appeals on legal grounds.

The so-called Chinese ‘Belt and Road’ court (the Chinese International Commercial Court) offer highly experienced and internationalised Chinese commercial judges, so-called one stop diversified dispute resolution and improved procedures for the proof of foreign law, but in accordance with Chinese law do not involve foreign judges. In Hong Kong, foreign judges serve on the Court of Final Appeal.  Pursuant to a recent arrangement with China, civil commercial judgments of Hong Kong courts will soon be enforceable in China, where enforcement of foreign judgments is otherwise a difficult task. Dispute resolution along the Belt and Road | East Asia Forum