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Following is the speech by the Secretary for Justice, Ms Elsie Leung in resuming the second reading debate of the Arbitration (Amendment) Bill 1999 in the Legislative Council today (Wednesday):

Madam President:

On 7 July 1999, I introduced the Arbitration (Amendment) Bill 1999 into the Legislative Council. The main purpose of the Bill is to implement the Arrangement on the reciprocal enforcement of arbitral awards between the Mainland and the Hong Kong Special Administrative Region.

I am grateful to the Honourable Margaret Ng, Chairman of the Bills Committee, and to the members of the Committee, for their thorough consideration of the Bill in such an expeditious manner. We have carefully considered the views of the Committee and have incorporated their helpful suggestions into the Committee Stage amendments which I shall move later this afternoon.

During its scrutiny of the Bill, the Bills Committee raised a drafting point concerning the proposed new section 40E(2)(c), which sets out the situations in which the enforcement of a Mainland award may be refused. The Committee pointed out that it was not clear whether enforcement may be refused where there had been a failure to give proper notice of the arbitration proceedings to the other party. In view of the members' concern, and for the sake of clarity, we propose to amend the proposed section under Clause 5 to make it clear that enforcement may be refused in such circumstances.

The Arrangement specified that only awards made by recognised arbitral authorities in the Mainland would be enforceable in the HKSAR. The list of the recognised arbitral authorities is to be provided from time to time by the Legislative Affairs Office of the State Council through the Hong Kong and Macao Affairs Office. The Bills Committee considered it desirable that these lists should be formally published, in order to notify the public. We agree with this suggestion and propose to add a new provision under Clause 5 of the Bill to spell out this arrangement.

It is our policy intention that the application of the Arbitration Ordinance should be extended to cover all persons and organs, including the Hong Kong Administrative Region Government and the offices set up by the Central Peoples' Government in Hong Kong. The Bill proposed a new application section to replace section 47 of the Arbitration Ordinance, so that the Ordinance would be applicable to any individual or organ as and when it enters into or becomes in any way involved in an arbitration agreement that is subject to Hong Kong law. However, we agree with the Bills Committee's view that the drafting of the proposed new section might not be perfect, and that there may be better ways to reflect the policy intention. Practitioners in the arbitral field have also suggested that we reconsider the proposed amendment and retain the existing binding effect provision for the time being. Taking into account these views, we propose to retain the Ordinance's existing scope of application and only propose a minor technical amendment to section 47 of the Ordinance. That is to say the Ordinance will continue to apply to the Hong Kong Special Administrative Region Government. The proposed minor technical amendment is consequential upon the proposed repeal of Part III of the Ordinance (Enforcement of Certain Foreign Awards) pursuant to Clause 4 of the Bill. We will continue to work on an appropriate formula to carry out our policy intention and extend the application of the Ordinance, and introduce an appropriate formula as soon as possible.

Madam President, subject to the amendments that I shall move, I commend this Bill to Honourable Members for passage into law. Thank you.

End/Wednesday, January 5, 2000

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