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Hylands Successfully Conducted the Dialogue on Overseas Construction Projects and Dispute Resolution under the New Situation as Part of the China Arbitration Week Series Activities - 2022
On September 15, 2022, hosted by China International Economic and Trade Arbitration Commission (CIETAC), Hylands Law Firm, Herbert Smith Freehills Kewei, University of International Business and Economics International Business Law Research， the sub-forum of the 10th China Arbitration Week Overseas Construction Dispute Resolution Forum was successfully held in Hylands’ Beijing headquarters. The forum was conducted in the hybrid format of online and offline, and the theme of the sub-forum was ‘Overseas Construction Projects and Dispute Resolution under the New Situation’.
The participants of the forum included Chengjie WANG, deputy director and secretary-general of CIETAC, and other leaders of CIETAC, Sibao SHEN, president of the International Economic Law Research Association of the China Law Society, and director of the Institute of International Business Law, University of International Business and Economics, Hong LIU, director of Hylands, Qi JIANG, chairman of the national board of directors of Hylands, and several partners of the firm, Simon Chapman KC, a partner of Herbert Smith Freehills, and several of his colleagues, as well as many well-known corporate managers and legal directors and expert from the field.
At the beginning of the forum Chengjie WANG, Deputy Director and Secretary-General of China International Economic and Trade Arbitration Commission, delivered an opening speech. He mentioned that the forum will discuss issues related to ‘dispute settlement of overseas construction projects under the new situation’, hoping to guide practice. He said that last year, CIETAC heard a large number of cases related to the Belt and Road Initiative (BRI), which shows that the road of Chinese enterprises “going out” is not smooth. Relevant parties of foreign trade usually resolve disputes through a combination of arbitration and mediation. The practice is now known as ‘oriental experience’ and is part of CIETAC's contribution to the field of international economic dispute settlement.
Sibao SHEN, President of the International Economic Law Research Association of the China Law Society and Director of the International Business Law Institute of the University of International Business and Economics, delivered a speech. He mentioned that enterprises also shoulder the responsibility of promoting the development of arbitration legal services. In the process of Chinese enterprises "going out" by echoing the ‘One Belt, One Road initiative’, the demand for legal services has surged, and arbitration cases have also "flowed in", which has promoted the development of arbitration work. Enterprises, as the main players in the market, play an important role in promoting arbitral legal services.
Qi JIANG, chairman of Hylands National Board of Directors, delivered a speech: He said that with the outbreak of the global pandemic and the contestation between major powers, the global environment is getting complicated and confusing, which also leads to many uncertainties for legal practitioners in handling cases. But the thing that remains unchanged is the commitment to the basic national policy - reform and opening up. Only through reform and opening up, we can communicate with the outside world, and achieve mutual benefit, and a win-win situation.
Simon Chapman KC, QC, partner and head of Asia Dispute Resolution at Herbert Smith Freehills delivered an online Speech. He noted that in the past ten years, Chinese companies have insisted on providing financing services for cross-border construction and infrastructure projects around the world. International engineering and infrastructure construction is one of the most active business fields, but also one of the fields where the most disputes arise. Dealing with international construction disputes is no easy task. He was also looking forward to discussing and finding innovative solutions at this forum.
Subsequently, Jianxiong QIU, the global co-director of Kewei Herbert Smith Freehills' engineering infrastructure litigation and arbitration business department, delivered a keynote speech on ‘How to Safeguard the Legal and Economic Rights and Interests of Overseas Engineering Contractors in the Complex International Situation’. He mentioned that according to the data from the Ministry of Commerce, most of the foreign contracted projects of Chinese enterprises are infrastructure projects. These projects, usually with long project cycles, have high requirements for technology and management, posing high challenges for Chinese enterprises. In a complex international situation, arbitration can be a better choice for the resolution of a dispute related to those overseas engineering projects. Enterprises should understand the local culture and get familiar with local laws to effectively protect their legitimate rights and interests.
In the discussion session, guests shared their views on three selected themes. The first topic of the discussions was ‘how to reduce the impact of the new coronavirus pandemic on overseas engineering projects’. The guests who participated in the discussion of the first theme included Tongtu HAO, General Manager of the Project Management Department of CITIC Construction Co., Ltd., Yujun CHEN, General Counsel of China Construction Railway Investment and Construction Group Co., Ltd., Guangqing QI, Director of Legal Compliance Department of China Lei WANG, General Manager of the legal department of Jian International Group Co., Ltd., Baoqiang ZHENG, partner of HKA Global Limited, Jie TIAN, partner of Hylands, and Tianyu MA, consultant of Kewei Smith Freehills.
The pandemic has had a great impact on enterprises, especially on their overseas engineering projects. Enterprises should strengthen the management of project-related documents, so they can provide them as evidence in case of dispute resolution. They should consider the influence of force majeure, construction period claims, and political influence on the project, and pay attention to the identification of project delays to protect their legitimate rights and interests.
Construction Disputes under the New Situation’. The guests who participated in this discussion by sharing their views were Ping PING, Deputy General Manager of the Legal Department of China Communications Construction Group Co., Ltd., Xiangwei DUAN, Deputy General Manager and General Counsel of China Machinery Engineering Corporation, and General Manager of China Power Construction Overseas Investment Co., Ltd. Legal advisor Wenhua QI, Deputy General Manager of the Legal Department of China Construction Communications Construction Group Co., Ltd. Nanzhu ZHANG, Deputy Director of the Institute of International Business Law, University of International Business and Economics, Yuan XUE, Partner of Hylands Guangzhou Office, Xiaohan LI, Partner of Hylands, and Xiqin YUE.
There are two key points in overseas construction disputes. One is to avoid the dispute from the beginning; the other is how to mobilize resources to resolve a dispute efficiently. Therefore, legal practitioners should keep learning, be familiar with the situation of different industries, and strengthen compliance management for enterprises to boost their development.
A discussion was conducted on the third topic ‘how to deal with project performance disputes caused by geopolitical factors. The guests who participated in this discussion included Ying LIU, Deputy Director of the Development and Compliance Department of China Railway International Engineering Branch, Zhiyong LI, General Counsel of China Construction International Construction Co., Ltd., Lei ZHAO, a researcher and doctoral supervisor at the Institute of Law of the Chinese Academy of Social Sciences, and China Huadian Corp., Quanxue DONG, director of the Legal Affairs Department of the Group Co., Ltd., Qian SHEN, a partner of Hylands Law Firm, and Chengliang ZHANG, a lawyer from Herbert Smith Freehills.
For project performance issues, one should first distinguish the relevant political and commercial logic when analyzing the issue; secondly, it is also necessary to foresee and manage risks, and be familiar with bilateral investment protection agreements, which is a foundation for risk prevention; lastly, one should strengthen self-compliance to ensure that projects run in a legally.
The meeting was chaired by Qian SHEN, a partner of Hylands. She concluded that the global engineering construction market will still exceed 12 trillion US dollars in 2022. For China as an "infrastructure madman", the potential market in the international engineering field has also reached a trillion. International engineering projects involve a large number of parties, have a long project cycle, and involve different technical standards and different jurisdictions. The outbreak of the Ukrainian-Russian War, as well as the impact of various factors such as the new coronavirus pandemic, de-globalization, financial crisis, debt crisis, trade friction, and Brexit, pose new challenges for enterprises when participating in international engineering. In this new situation, it is increasingly difficult for enterprises to control and close international projects, and to effectively resolve potential disputes.
The forum provided a platform for experts and scholars to share their views and bridge inter-industry communication and exchanges. The participants considered it a productive endeavor and hoped that Hylands would hold more activities in the future.