Matthew Gearing QC, Allen & Overy partner and Chairperson of the Hong Kong International Arbitration Centre (‘HKIAC’), recently led Hong Kong to victory in its bid to host the biennial International Council for Commercial Arbitration (‘ICCA’) Congress 2022.
EARLY LIFE AND CAREER
Matthew Gearing was born in London. He underwent most of his schooling in Somerset in the United Kingdom. He had no lawyers in the family (Gearing’s parents were journalists; his father worked for the BBC, while his mother is a countryside walker and a yoga teacher), but his secondary school economics teacher, Mr. Edwards, did exert quite an influence on him. In fact, it was Mr. Edwards who suggested that he would be a good lawyer and that it might be worth exploring. At Mr Edwards’ urging, Gearing secured a short internship with a criminal solicitor, and the young man was given an opportunity to attend court, which he enjoyed and decided might just be what he wanted to do with his life. Consequently, Gearing applied to New College, Oxford to read law, and was accepted.
Gearing trained at Slaughter & May in London, which, according to Mr. Edwards, was the best law firm and, as a result, the only law firm Gearing applied to. While he enjoyed life at the firm, corporate work did not suit him and Gearing left on qualification in 1997 to join Allen & Overy, where he is now Global Co-Head of the International Arbitration Group and a partner in the Hong Kong office.
When Gearing joined Allen & Overy, arbitration was just taking off, and few regarded it as distinct from litigation. “We were all part of one litigation department back then, led by David Sutton (who had previously done a stint in Hong Kong) and Judith Gill” he says. Gearing cut his teeth in arbitration by doing a succession of small cases: “you do one, then another one comes along. That’s how it is often for lawyers. They end up specialising in unexpected areas of law because they’ve do one case,that turns out OK, and as a result another one comes along.”
Gearing first came to Hong Kong in July 1998, a week after the Chek Lap Kok airport opened. He ended up staying for six months as he was part of a team that was instructed by the airport authority in the public enquiry that ensued following the airport’s opening. Despite the public enquiry coming to an end, Gearing found himself continuing to make frequent visits to Hong Kong throughout 1999 to work on various arbitration and litigation matters. He enjoyed the work and pace of life in Asia, and he and his wife, Katie, moved to Hong Kong full-time in early 2000, qualifying as a Hong Kong solicitor later that year (after sitting the conveyancing exam).
Scrolling forward – and skipping over a number of twists and turns in the road – Gearing was promoted to partner at Allen & Overy in 2005 and appointed Queen’s Counsel (England & Wales) in 2014. He did not think the latter appointment was going to happen, as there were at least two possible hurdles to clear. First, he was a solicitor and not a barrister, and second, he was not a resident of England & Wales. “I knew that chances for solicitors to become silks were improving but it was still a big challenge,” he says. “Every year in England & Wales, of the hundred or so new silks, between about four and eight would be solicitors, and the rest would be barristers. While the Lord Chancellor actually makes the appointments, there is a QC appointments board, comprising of about a dozen people: six lawyers, a couple of judges, two or three silks, a couple of non-senior lawyers, and three or four people from public life, i.e., non-lawyers. It is different system from Hong Kong. Moreover, practically no one who had been non-resident had done it before. But I was told it was possible, so I applied and surprisingly got in!”
Gearing has been on HKIAC’s Council since 2008, when he was asked by then Chairperson Michael Moser to join. He became was elected Chairperson at the beginning of 2017. The position is a non-executive one, in that he does it in his spare time and is not paid for his work. Gearing takes overall responsibility for the organisation. “What is different from, say, the Singapore International Arbitration Centre (‘SIAC’) or London Court of International Arbitration (‘LCIA’) is that we do not have a board and a court. At the LCIA, there is a chairperson and head of the court who deals with the caseload questions and legal policy questions. Then, they have a board, which runs the business of the LCIA. We do not have that system – it all comes under one umbrella.”
While the day-to-day running of the HKIAC is done by the Secretary-General, Sarah Grimmer, who joined from the Permanent Court of Arbitration (‘PCA’) in the Hague – prior to which she was in the International Chamber of Commerce (‘ICC’) – Gearing has to balance all the competing interests and demands by seeing and speaking to as many people as possible from different interest groups such as businesses, lawyers from Hong Kong, the international arbitration community, and lawyers from the Mainland, which is a big market for the HKIAC. He notes the HKIAC is very well supported by a very active Council of up to 25 members and three key committees.
They key objectives iof the HKIAC are efficient administration of the arbitrations conducted under its auspices and the vigorous promotion of arbitration in Hong Kong. “The really important thing is that all cases are dealt with efficiently and properly,” says Gearing. “Sometimes, we have an issue that potentially touches upon another arbitral institution, for example where the arbitration agreement provides for arbitration under the ICC Rules but administered under the HKIAC. When those sorts of cases arise, one of the first things we would do is speak to the other institution. I encourage dialogue between the leading arbitral institutions. What you are ultimately interested in is the arbitral process working for the users, i.e. the disputing parties. The competition between seats and institution is very much of secondary significance. For me that means being collaborative and working together where appropriate. You don’t criticise other institutions, although, of course, you might well emphasise your own benefits!”
The HKIAC is in the process of amending its Administered Arbitration Rules. The new rules will be brought into effect in September or October 2018, before Hong Kong Arbitration Week. It will be five years since the 2013 rules, which Gearing was also involved in the drafting as the chairman of the Rules Committee, came into effect. “We are not trying to be too robotic about it, but the first set of rules, which Dr. Michael J. Moser and Chiann Bao led in 2008, was similarly in effect for five years. We would change them more quickly if needed but, if you get it right, then you can leave one set in place for five years or so.”
Since the introduction of the first HKIAC rules in 2008, there has been a significant shift in the HKIAC’s caseload, away from simply administering UNCITRAL or ad hoc cases to running cases under its own rules. “We have essentially been on this ten-year journey, which reflects the trend in the world of arbitration away from ad hoc arbitration towards institutional arbitration, and it’s been a great success for us,” he says.
The changes from the 2013 to the forthcoming-2018 rules are not nearly as extensive as the last revision. Rather, they are focused on facilitating more efficient and streamlined cases. First, there will be online filing of documents (for which the parties have to provide their consent), and the technology to support this online document repository is now in place. Secondly, there is specific recognition of “Med-Arb”, taking a cue from some of the provisions in the Hong Kong Arbitration Ordinance, and responding to demand from the Mainland. Thirdly, default multilingual procedures, which the parties can vary, have been introduced as a result of an increase in bilingual arbitral proceedings, particularly in English and Chinese. Another area of change is around joinder, consolidation, and single arbitration under multiple contracts. “We are essentially making the joinder provisions more coherent and consistent. Absent consent, the rules wouldn’t allow consolidation if the arbitration agreements are not compatible. You need to be careful about consolidation and joinder because a tribunal or an institution goes too far, then awards potentially risk being struck down either at the seat or on enforcement – for example, see the recent Astro v PT First Media litigation which came before the Court of Final Appeal last month,” say Gearing.
The bid, to host the ICCA Congress in 2022, was made at this year’s ICCA Congress in Sydney was the third time Hong Kong has bid to host the biennial event. “We had been unsuccessful on the two previous occasions. We wanted to bring the Congress to Hong Kong because it is the most important global fixture in the arbitration calendar and only takes place every two years, and it’s right that we mark Hong Kong’s key place in the arbitration world by having this sort of flagship here. We made the bid with the very strong encouragement and financial support of the Department of Justice. In justifying the bid, we noted the increasing economic activity and importance of Asia, and we particularly talked about One Belt One Road initiative, and its global importance. That was the basis on which we got it,” says Gearing.
The ICCA Congress is much bigger than the Hong Kong Arbitration week. “The ICCA aims be a truly global arbitration body and is administered from The Hague. Its office is right next to the PCA. The congresses are normally fairly serious affairs and the papers and other materials produced around them often become key reference pieces in developing the practice of arbitration. We expect to have more than a thousand delegates at the Congress in Hong Kong, so we will have to get ourselves well-organised,” says Gearing. “The HKIAC is going to be the host but we will invite representatives from all the other main institutions in Hong Kong to be part of the organising committee. We are clear that we want this to be a Hong Kong event, rather than just a HKIAC one. It is a really good opportunity to promote Hong Kong as a dispute resolution centre, particularly at a time when we are looking at how Hong Kong – and the HKIAC – can best assist users in the context of One Belt One Road disputes. Alongside all the One Belt One Road activities we undertake, we will also be promoting ICCA. There will be opportunities for lawyers of all levels in Hong Kong to participate in the ICCA Congress – and the associated Young ICCA activities – and to get involved in arbitration more generally.”
HONG KONG’S STANDING
Hong Kong as an arbitral seat, and the HKIAC as an arbitral institution, are regarded very highly. Cases were significantly up last year (a 15% percent increase from 2016) and seem to be heading in the right direction this year too. We would say we are one of the leading centres and seats of international arbitration, certainly in Asia” says Gearing.
In fact, Hong Kong and the HKIAC have been doing innovating for some time. The city was the first Asian jurisdiction to introduce the UNCITRAL Model Law. It devolved default arbitrator-appointment powers from the court to the HKIAC, becoming the first major jurisdiction to do that. In England & Wales, it is still the court which appoints arbitrators in default. On the softer side, the HKIAC introduced the concept of Hong Kong Arbitration Week six or seven years ago. “Other institutions and cities now have an arbitration week, but we were definitely the first, essentially the initiative of Chiann Bao, then Secretary General, and Michael Moser. Teresa Cheng [GBS SC JP, subsequent Chairperson,] then took that on energetically,” says Gearing. “The HKIAC tribunal secretary training program has also become incredibly popular, which is again something the HKIAC pioneered. We try to not only be stable but also to innovate. We became the first international arbitration institution to set up an office in Shanghai’s Free Trade Zone in 2015, and were recognised by the Global Arbitration Review (‘GAR’) for best development in 2015,” he adds.
Gearing notes that “the government provides us with our premises and has agreed that we can stay and try to get as many people as possible to go through the Centre. The premises are world class – whether it’s for a hearing or an event or a meeting with the HKIAC. Most people who have been there want to return to use the facilities.” The HKIAC was ranked first for location, value for money, helpfulness of staff and IT services by GAR's Hearing Centres Surveys 2016, 2017 and 2018.
With regard to upcoming developments in arbitration, Hong Kong is currently waiting for an amendment to the Arbitration Ordnance, permitting the use of third-party funding to come into force. Also in Hong, Kong, as globally, there is a push for transparency and diversity, so there are lots of questions about the validity of private bodies and the private appointments made in this process. “On all sorts of levels one is seeing a move, and rightly so, towards greater transparency and diversity,” says Gearing. “We are encouraging more diverse participants in the arbitral process and in the dispute resolution process, including: women, civil lawyers, younger lawyers, lawyers from different backgrounds. If you look at the membership of our three main committees (half of whom must be council members and the other half can be non-council members), it is an incredibly diverse bunch and Teresa Cheng and I were both strongly pushing for that. In our view, it reflects how the international dispute resolution community really needs to reach out as well.”
Of the HKIAC’s appointment of arbitrators in 2017, 66% were of Hong Kong permanent residents and nearly 80% Hong Kong residents. The HKIAC also more than doubled the appointment of female arbitrators in 2017 compared to 2016, and is enhancing gender diversity on its Panel and List of Arbitrators by increasing the presence of female arbitrators. “To be honest, I’m surprised it’s taken so long but now that trend will only continue. It also helps that case numbers are up. Cases were significantly up last year (a 15.7 percent increase from 2016). That’s obviously good for Hong Kong, and the HKIAC. It’s also good for us trying to appoint from a more diverse group because it means that we have more appointments to make,” he adds.
BELT AND ROAD
The HKIAC has an important role in the BRI as the dispute resolution venue of choice for the parties from China and BRI jurisdictions. It even has a dedicated BRI marketing officer in Kiran Sanghera. Hong Kong is an obvious centre for the resolution of BRI disputes, being close to, but a distinct legal system from, China. It is a place where not only parties from China, but also from other BRI countries, would be comfortable. “So we see it as absolutely the most obvious forum for BRI dispute resolution and whether people come to the Hong Kong courts or HKIAC or ICC or CIETAC, I’d say the emphasis is on promoting Hong Kong,” says Gearing. “Interestingly, so many of our cases already involve BRI jurisdictions. One third of HKIAC cases last year involved a Mainland Chinese party and a BRI jurisdiction. So, essentially, we are already in that space and we just need to ensure that we stay there and that we grow. A simple message for BRI contracts is: think of Hong Kong and then think of the HKIAC. But also think of other dispute resolution mechanisms here because if Hong Kong benefits, then the HKIAC will benefit. It is a collective effort. The DOJ and the HKIAC are very focused on it.” The HKIAC recently formed an industry-focused Belt and Road Advisory Committee, and launched an online resource platform dedicated to the BRI.
ADVICE TO READERS
Gearing’s first piece of advice is for users of dispute resolution services: Think carefully about the dispute resolution mechanism. Arbitration has many advantages but is not necessarily appropriate for every case. “Very often you see dispute resolution agreements where not very much thought has been given and often when you then ask someone why they agreed to resolve their disputes under these rules and in this place, they will simply say it is because it was in the previous contract,” says Gearing. “I always say: Forget what was done previously. Think carefully about dispute resolution options that work for you in this context. In some or many cases it might be appropriate to use the Hong Kong courts or the English courts or some other forum. This is a bit more controversial but don’t be afraid of tailoring a standard form arbitration clause using appropriate advice. For example, if you think it is going to be a relatively simple dispute, you may want to include what I would call a ‘soft fast-track provision’, which would provide, for example, for resolution of disputes within six months of the appointment of the arbitrator, subject of course to the arbitrator’s ability to extend the time limit – you can’t have the respondent delaying the case and the arbitrator becoming ‘functus officio’ after six months and one day.”
A piece of advice to anyone thinking of pursuing a career in international arbitration would be to try and get exposure to different jurisdictions. “I think a big asset for arbitration lawyers is to try and be as cross-cultural as possible; to try and get out of the common law/civil law jurisdiction pigeon-hole and to try and do things as globally as possible. It’s important to appreciate that things are done in different ways in different places, both as a result of different legal rules and different cultural norms. Flexibility and sensitivity are one of the great advantages of international arbitration,” he concludes. “Get exposure when you are young to different jurisdictions and systems, and also exposure to different parts of the process. So obviously work in a law firm but then see if you can work in an institution or be a clerk or tribunal secretary to an arbitrator for a year so, so that you get a different perspective."