More resources should be allocated to promote Hong Kong as an international arbitration center, enabling the SAR to tackle more business-dispute cases from other countries and benefit from the strengthening ties between the mainland and Taiwan, the One Country Two Systems Research Institute proposed yesterday.

The institute suggested that Hong Kong take a proactive approach to develop arbitration services, saying the city will lose its competitiveness to Singapore, which gives tax concessions to the arbitration business of law firms.

The institute said the Hong Kong International Arbitration Centre (HKIAC), which was established in 1985, doesn't receive sufficient government support. The ratio of non-local disputes and number of cases with international influence is low.

In the 2006-07 fiscal year, the HKIAC handled 42 dispute cases in which neither party was a Hong Kong company. All of the cases involved mainland companies, and the other parties involved companies from the United States, Japan, Switzerland and the United Kingdom.

But the HKIAC is not the only place to settle business disputes in Hong Kong, and there is no record on the total number of arbitration cases handled by the city.

The chairman of the institute's board of directors, Leung Chun-ying, said Hong Kong is capable of enjoying the benefits of a closer relationship between the mainland and Taiwan.

"The HKIAC is not treating any dispute cases with Taiwan companies now," he said. "More mainland companies will have business cooperation with Taiwan companies in the future, with the improved relationship. Hong Kong can help tackle the disputes."

The institute suggested that the HKIAC should be turned into a statutory body, which would allow the government to take more proactive efforts in promoting the development of the center and would increase funding for the effort.

The International Court of Arbitration of the International Chamber of Commerce, the China International Economic and Trade Arbitration Commission, and other internationally renowned arbitration organizations should be encouraged to establish offices in Hong Kong, the institute suggested.

Arbitrators from overseas and the mainland should be given long-term working visas, and arbitration courses should be included in the curriculum of business and law schools in universities.

Leung added that while the government needs to be more proactive, its role must not influence arbitration results.

"No one wants the proceeding to be influenced by the government," he said. "But the government has a role to play in promoting Hong Kong as an international arbitration center."

(HK Edition 09/30/2008 page1)