A guiding hand along the BRI

In light of the launch of The Belt and Road International Lawyers Association (BRILA) by the All China Lawyers Association at the tail end of 2019, Shane Farrelly and Veronica Gianola from D’Andrea & Partner Legal Counsel examine what influence such a body could have on both legal issues and cohesion along the new Silk Road.

The BRILA was launched by the All China Lawyers Association in Guangzhou, Guangdong Province, in order to promote legal cooperation among countries and regions involved in the Belt and Road Initiative (BRI). The BRI is based on a lofty ideal of bringing about cohesive cooperation and trade connectivity throughout the global project which aims to provide freight access to over 60 per cent of the world’s population by both rail and sea.

The 85 founding members of the non-governmental, non-profit professional law organisation include bar associations, law firms and individual lawyers from various countries and regions; 35 members from China and 50 members from 35 other countries and regions.

As the first international bar association registered in China, the BRILA’s main purview will be generating a regular communication mechanism for lawyers from countries and regions involved in the BRI, whether this is achieved by organising conferences, visits and training, studying key legal issues, providing legal services to support economic exchanges, or generally improving BRI regional trade rules.

All of the aforementioned aspects seemingly mirror the five major goals of the BRI, namely policy coordination, connectivity of facilities, unimpeded trade, financial integration and people-to-people bonds.

As the pioneering nature of the BRI requires an equally far-reaching approach to manage any legal issue arising from the operation of this vast project, the long-term impact of this association may benefit China’s specialised BRI arbitration forums.

Future integration
A major factor within BRI projects is dispute resolution, as outlined in our previous EURObiz article in early 2019.[1] BRI projects generally involve more than just a domestic party and Chinese party, as it has become common practice to engage with professional advisors from third countries, thus further complicating matters.

For truly international and increasingly complex disputes, involving participants from many countries, it is best to resolve cases in a forum that is very familiar with the BRI. A number of jurisdictions are already seeking to establish themselves as the main hub for BRI dispute resolution. However, China’s Supreme People’s Court (SPC) has also developed a dispute-resolution method in order to handle international disputes arising from BRI projects, namely the China International Commercial Courts (CICCs) in Shenzhen, Guangdong and Xi’an, Shaanxi. Considering that the BRILA was established with the primary aim of becoming a regular communication mechanism for lawyers from countries and regions along the BRI, it would undoubtedly present the CICCs to members as the most favourable option in regards to arbitration proceedings.

Steps towards a common goal
Multiple BRI-related arbitration proceedings have already taken place in various international courts, and more can be expected, as the importance of dispute settlement instruments was stressed at the 2019 Belt and Road Forum. One of the deliverables from this event was the establishment of an International Dispute Prevention and Settlement Organisation between over 30 countries.

Thus far, the CICCs have accepted only a handful of cases since their inception in 2018. None of these have been directly tied to the BRI and many were passed down from the SPC. The purpose of the CICCs were to alleviate the concerns of both local and foreign parties regarding the gravitas attached to major BRI infrastructure investments that involved multiple parties from various different countries/regions.

However, the fact that the CICCs retain a dependent relationship to the SPC emphasises that the courts are not differentiated in terms of autonomy from other Chinese judicial instruments. This has made it more difficult to promote the CICCs’ legitimacy to foreign parties. The creation of the CICCs’ foreigner-composed International Commercial Expert Committee, introduced to compensate for the lack of foreign judges in the courts, has been noted as a step in a positive direction, but the establishment of the BRILA offers a more expansive, future-orientated and cooperative approach.

Communication exchanges between law firms and bar associations throughout the BRI on both macro and micro-level concerns would benefit all and establish a notion of reciprocity and cohesion between China and BRI states. Upon this basis, a level of understanding and validity can develop organically for the CICCs, which could eventually lead to a steady stream of cases and allow the courts to gain experience and trust.

Conclusions

As the CICCs have found it difficult to amass the same kind of prestige afforded to their competitors, especially at this early stage, the extent to which they will sway BRI investment parties to accept them as their courts of choice remains unclear.

The BRILA, with its wide-ranging reach to legal practitioners across the BRI, could lead to a more nuanced approach to increase both foreign parties’ awareness of and appreciation for Chinese legal institutions and Chinese legal and judicial experts’ exposure to best practices in international commercial law.

Contributor Note

D’Andrea & Partners Legal Counsel, DP Group, was founded in 2013 by Carlo Diego D’Andrea and Matteo Hanbin Zhi, both of whom have extensive backgrounds in Chinese and EU law. DP Group currently has four service entities: D’Andrea & Partners Legal Counsel, PHC Tax & Accounting Advisory, EASTANT Communication and Events, and Chance & Better Education Consulting. DP Group has a variety of branches around the world, with locations in several major developing economies.

[1] BRI: Dispute Resolution and Jurisdictional Issues, EURObiz, Jan/Feb 2019, <https://www.eurobiz.com.cn/bri-dispute-resolution-and-jurisdictional-issues/>