New Rules on Applicable Law of Contract and Seat of Arbitration in GBA
Recently, the Supreme People's Court of the PRC released the Reply of the Supreme People's Court on the Effectiveness of Choice of Hong Kong and Macao Law as the Applicable Law for Contracts or the Agreements on Hong Kong and Macao as the Seat of Arbitration for Hong Kong and Macao Invested Enterprises Registered in the Mainland of the Guangdong-Hong Kong-Macao Greater Bay Area (Fashi [2025] No. 3), which shall be implemented from 14 February 2025.
The main contents of the above Reply are as follows:
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Provided that the choice of law does not violate the compulsory provisions of laws, nor does it harm the social public interest, Hong Kong invested or Macao invested enterprises registered in the Shenzhen or Zhuhai can choose to adopt Hong Kong law or Macao law as the applicable law in their contracts, even though another party is not a Hong Kong invested or Macao invested enterprise registered in the Shenzhen or Zhuhai.
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Hong Kong invested or Macao invested enterprises registered in the nine mainland cities (i.e. Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing ) in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) can choose either Hong Kong or Macao as the seat of arbitration for resolving commercial disputes, even though another party is not a Hong Kong invested or Macao invested enterprise registered in the nine mainland cities of the GBA.
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The above-mentioned Hong Kong invested enterprises and Macao invested enterprises refer to enterprises that are wholly or partially invested by natural persons, enterprises or other organizations from the Hong Kong Special Administrative Region and Macao Special Administrative Region, and registered in China’s mainland in accordance with the law.
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