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Pedro Cortés
Rato, Ling, Lei & Cortés, Macau
cortes@lektou.com

Petrel Ng Hoi In
Rato, Ling, Lei & Cortés, Macau
petrel.ng@lektou.com

Macau is, along with Hong Kong, one of the Special Administrative Regions of the People's Republic of China. It has launched a new arbitration law (Law no. 19/2019), in effect since 4 May 2020, replacing the two statutes that were in force for more than 20 years: Decree law no. 29/96/M (internal/domestic arbitration) and Decree law no. 55/98/M (external commercial/international arbitration).

In 2013, the ‘One Belt, One Road’ policy (simplified name for the ‘Silk Road Economic Route and the Silk Sea Route for the 21st Century’ which is also known as Belt and Road Initiative or ‘BRI’) was first proposed as a development strategy by the President of the People’s Republic of China, Xi Jinping, focusing on connectivity and cooperation between Eurasian countries, covering China, the Middle East area countries, India, nations of the Southeast Asia, as well as Europe.

This policy aims to address ‘the infrastructure gap’ between countries and, consequently, to accelerate economic growth across the Asia-Pacific region and Eastern Europe. It also aspires to encourage business and to bring commercial markets into collaboration for the integration of the region into a cohesive economic area through the construction of infrastructures, the increase of cultural exchanges and the expansion of trade.

After this cross-national initiative, on April 2016, the concept of Guangdong-Hong Kong-Macau Greater Bay Area (GBA) was first proposed in the 13th Five Year Plan of the People's Republic of China.

In July 2017, the concept of the referred Plan was put on paper through the framework agreement in which was embedded that the GBA will cover nine cities in the Guangdong province and the two special administrative regions of Hong Kong and Macau (the 9+2 concept). The main purpose is to create and develop a world-class city-cluster to foster the free flow of goods and resources within the GBA.

BRI and GBA initiatives may position arbitration as a primary and preferential means for resolution of the civil and/or commercial disputes between the commercial entities and individuals of the different countries and regions of the BRI and GBA.

The diversity of legal traditions (civil and common law) and of dispute resolution systems among these countries or regions, which combined sometimes with the lack of neutrality, makes the use of traditional methods of judicial conflict resolution unfeasible and may raise issues and difficulties. Therefore, the use of alternative methods of resolving disputes (ADR), in particular arbitration, will surely be more useful, efficient and effective.

Boosted by BRI and GBA, arbitration became a special focus of the Government of Macau. Numerous seminars, conferences and congresses were organised, in Macau and Mainland China, with the support of both Governments to promote arbitration, mediation and conciliation in the context of those initiatives.  

While Hong Kong has a long tradition in international arbitration, its common law legal system is not shared by most of the BRI countries. This presents an advantage to Macau, which shares a civil law tradition with those countries. Moreover, the Portuguese language is one of the official languages of Macau, which facilitates the role as a platform for arbitration in the resolution of conflicts arising from civil or commercial exchanges between China and Portuguese-speaking countries. In general terms, Macau law has similarities with other Portuguese-speaking countries (PSC) such as Angola, Brazil, Cape Verde, Guinea-Bissau, Mozambique, Portugal, São Tomé e Principe and East Timor.

All PSC legal systems (Brazil’s deviates slightly as it is already sprinkled with common law influences) are based on civil law and on the laws of continental European countries. In the particular case of Macau, the Portuguese legal system has a strong influence.

In addition, arbitration awards of Macau benefit from the recognition and confirmation and, subsequently, enforcement by the competent courts in Mainland China and Hong Kong, particularly in civil and commercial matters due to the agreements on the mutual confirmation and enforcement of court decisions (and arbitral awards) respectively, between Mainland China and the Macau SAR or between the Macau SAR and the RAEHK (Chief Executive Notices no. 12/2006 and no. 2/2013).

All these factors represent clear advantages for Macau to become a preferable place for arbitration regarding the civil or commercial conflicts or disputes between commercial entities of Mainland China and Portuguese-speaking countries.

The new Macau arbitration law resolves the out-of-date solution and difficulty in the enforceability of arbitration awards, establishing the finality of arbitral awards as a general principle. As a rule, an arbitral award cannot be subject to appeal, unless otherwise agreed by the parties, who in turn may only challenge awards on specific and formal grounds. Furthermore, the law no longer establishes a maximum period for the arbitral decision to be rendered and opens the possibility of an emergency tribunal or sole arbitrator to decide on precautionary measures before the constitution of the arbitration tribunal.

Also, with the new law, the uncertainty in determining which arbitration regime is applicable in each case, whether domestic or international, no longer exists. The two regimes – internal and external – were unified on the basis of the UNCITRAL Model Law.

Arbitration is still not popular and less known in the Macau community. Few people choose arbitration. The common Macau stakeholder does not have knowledge of its efficiency and is afraid to resort to it. It is of the utmost importance that arbitration is promoted and popularised amongst the stakeholders, who shall be aware of its legal effects, effectiveness and advantages.

The prestige of the Macau arbitration regime is far from being established, yet one can be sure that Macau has all the conditions to be an international arbitration hub for Portuguese-speaking countries or regions within the BRI and GBA initiatives.

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