First Case of Hong Kong-Funded Enterprises Using Hong Kong Arbitration Lands: Four-Step Control Strategy and Legal Key Points for Cross-Border Dispute Resolution in the Greater Bay Area

"Guide: A paper response to rewrite the Bay Area dispute resolution rules"

"In 2025, the Supreme People's Court issued Legal Interpretation [2025] No. 3 approval, which for the first time allowed Hong Kong and Macao investment enterprises registered in nine cities in the Mainland of the Greater Bay Area to independently choose Hong Kong and Macao laws and places of arbitration in Hong Kong and Macao. In October of the same year, the Shenzhen Intermediate People's Court made the first ruling in the country to recognize and implement the "Hong Kong-owned Hong Kong Arbitration" award, involving an amount of more than 60 million yuan. This series of actions marks the new stage of cross-border dispute resolution in the Guangdong-Hong Kong-Macao Greater Bay Area from "meeting case handling" to "meeting control bureau"."

"As a lawyer who deeply cultivates the national legal service market, what I see is that in the same transaction, the source of the rules, the distribution of assets, the validity of the evidence, and the place of cashing the ruling belong to different jurisdictions. The enterprise is no longer facing a simple legal choice, but a set of procedural strategies that need to be laid out in advance. This article will dismantle the "Four-Step Control Bureau Act" for dispute resolution in the Bay Area from the four dimensions of terms, assets, evidence, and organization, and combine the latest judicial interpretation and practical cases to provide legal guidance for enterprises to land."

"Step 1: Writing the terms, the "first battlefield" of dispute resolution"

"Dispute resolution clauses in cross-border contracts are often regarded as tail-style clauses, but once the applicable law, arbitration institution, place of arbitration, procedural language and other elements are determined, they constitute a mandatory procedural framework. In the Greater Bay Area, Hong Kong and Macau investment enterprises used to be restricted by "foreign-related" scrutiny and could not choose Hong Kong and Macau law or arbitration. The promulgation of Legal Interpretation [2025] No. 3 completely changed this situation."

"Article 1 of the reply clarifies that, provided that the mandatory provisions of national laws are not violated, the Mainland courts may allow the parties to choose Hong Kong and Macao laws as the applicable law; Article 2 stipulates that the arbitration agreement shall not be invalidated on the basis of the lack of factors related to Hong Kong and Macao in the dispute. This means that Hong Kong and Macao investment enterprises no longer need to prove the foreign-related properties of the transaction when signing the contract, and can directly rely on the subject qualification allocation rules."

"In practice, I suggest that companies complete the "rule deduction" at the contract drafting stage: arbitration to choose Hong Kong or the mainland? Does the institution rule match? How are interim measures connected? In which jurisdictions is the award enforced? These decisions directly affect the cost and execution path of the follow-up procedure. For example, if you choose to arbitrate in Hong Kong, you can apply for preservation in the Mainland courts according to the 2019 Mainland and Hong Kong Arbitration Preservation Arrangement, which is a special advantage of Hong Kong as the only jurisdiction. However, if not designed in advance, the security window may be missed after the dispute occurs."

"Step 2: Assets are controlled first, and the "golden 48 hours" of the security window period"

"Asset control is the u201cwinner or loseru201d in dispute resolution. Since the implementation of the Hong Kong Arbitration Preservation Arrangement, as of September 2025, the Hong Kong Arbitration Institution has handled 177 cases of applying for preservation in Mainland courts, covering 48 Mainland courts, with a total asset value of more than RMB 27.8 billion. This set of data shows that after choosing Hong Kong arbitration, the mainland's assets can be effectively controlled."

"However, the difficulty of asset prior control is that the preservation application is often carried out at the beginning of the procedure and when the factual materials are not fully deployed. Lawyers need to decide within a very short period of time: Is the property within the control of the court? Can the requested amount withstand the test of contract basis and loss calculation? Will the guarantee arrangement increase the burden on the customer's cash flow? Is the security action prompting the other party to return to the negotiating table, or is it triggering an anti-security or asset transfer?"

"In cross-border mergers and acquisitions, supply chain cooperation, equity investment and other projects, assets are often scattered across different jurisdictions. In a finance lease dispute I dealt with, the lessee's main assets were in the mainland, but the equity structure involved BVI and Cayman. Before applying for security, we first trace the location of the asset along the transaction structure to ensure the connection between the security application and subsequent execution. If you wait until the dispute breaks out before looking for property clues, the window period may have been consumed by the other party's fund mobilization or equity change."

"Step 3: Chain the evidence from the u201cmaterial pileu201d to the u201cproof structureu201d"

"After GBA companies participate in the global supply chain, the number of controversial variables increases: export controls, sanctions lists, tariff changes, supply chain data, electronic evidence, expert opinions, etc. will all come under review. If lawyers only stack materials in chronological order, it is difficult to respond to the causal relationship of complex disputes."

"Taking force majeure as an example, companies often use it as the only defense, but the odds are limited. It is more difficult for the payment obligation to be exempted because the payment route is blocked, the account is restricted, and the change of the exchange route needs to prove that the obstacle is "insurmountable". Under English law or Article 79 of the CISG, conditions such as non-party control, inability to reasonably foresee at the time of contract, inability to avoid or overcome, etc. must be met at the same time. Therefore, trade sanctions, export controls, alternative routes of performance, notification obligations and derogation obligations should be written separately in cross-border contracts, and evidence chains should be built around unpredictability, causality and alternative routes after disputes occur."

"Technical evidence also needs to be structured. In disputes involving distributed bookkeeping and data supply chains, lawyers must not stop at collecting technical documents, but build an evidence chain around the focus of the dispute, paying particular attention to the causal connection between expert witness opinions and the facts to be proven. The title of expert does not automatically translate into proof, what really matters is the data source, method description, and chain of inference. In addition, a large number of area development and government investment projects in the Greater Bay Area often involve the crossing of travelers. Administrative materials such as approval documents, meeting minutes, and policy commitments may jointly constitute case facts with contracts. Lawyers need to establish connections between procedural law, substantive law, and administrative jurisprudence."

"Step 4: Organize synergies, from "individual combat" to "project team control bureau""

When a dispute simultaneously involves mainland litigation, Hong Kong arbitration, offshore platform companies, administrative approvals, and public opinion impact, a lawyer's deliverables must extend from a single statement of defense to the synchronized operation of proceedings across multiple jurisdictions. Yang Rongkuan, a Shenzhen lawyer specializing in foreign-related matters, refers to this in his research as "project-team warfare"—when different legal systems and legal logics are layered together, a single legal background is insufficient to handle the interweaving of multiple legal relationships.

"I agree with this judgment. In complex cases, BVI, Cayman, Hong Kong, Singapore and other local procedures may be parallel, and lawyers need to have cross-jurisdictional coordination capabilities: on the one hand, they should be familiar with local procedural rules and evidentiary standards; on the other hand, they should coordinate multiple resources such as clients, local lawyers, expert witnesses, and public relations teams. For example, in parallel litigation in the mainland and arbitration in Hong Kong, the disclosure of evidence, provisional measures and enforcement of awards should be considered simultaneously to ensure that the procedures in various places are not conflicting and can be connected."

"In practice, I recommend that companies establish a "dispute prevention team" composed of legal, business, financial, and external lawyers to conduct dispute simulation before signing major projects to identify clause risks, asset distribution, and evidentiary gaps. In this way, even if a dispute occurs, the established plan can be quickly launched and passive responses can be avoided."

"Conclusion: Control thinking is the new competitiveness of Bay Area enterprises"

"The total population of the Guangdong-Hong Kong-Macao Greater Bay Area exceeded 88 million, the GDP exceeded 15 trillion yuan, and the scale of cross-border transactions continued to expand. The entry of Hong Kong into the Bureau and the speed of domestic protection are accelerating, and the dispute resolution rules are being reshaped. For enterprises, the biggest revelation is that the initiative of dispute resolution is formed when the contract is written, not after the dispute occurs."

"As a lawyer of Guangdong Zhiming Law Firm, we recommend that enterprises start from the following aspects: first, conduct a special review of the dispute resolution clause before signing the contract, and optimize the applicable law and the choice of arbitration place in combination with Legal Interpretation [2025] No. 3; second, establish a dynamic list of assets and evidence, regularly update property leads and contract performance records; third, after the dispute occurs, evaluate the integrity of the security window and evidence chain at the first time, and introduce a cross-jurisdictional lawyer team to collaborate if necessary."

"Cross-border dispute resolution is a "control bureau" game, and every step of the rules, assets, evidence, and organization needs to be deduced in advance. If you are facing similar problems or want to improve the dispute resolution clause before signing the contract, please contact Guangdong Zhi Ming Law Firm, we will provide you with a customized legal solution with a national perspective and local experience."