Hong Kong Law Journal 1971 - 2024

After more than a decade of debate, the Hong Kong Special Administrative Region government tabled a race discrimination bill in the Legislative Council in December 2006 which, if passed into law, would prohibit discrimination on the grounds of race, colour, descent, or national or ethnic origin. Although many initially welcomed the commitment to legislate, it soon became clear that the draft legislation contained serious weaknesses which undermined the government’s stated objectives to prevent and combat racial discrimination and to comply with Hong Kong’s international human rights obligations. This article contends that the bill requires several key amendments to achieve these aims. To date, however, the Hong Kong administration has resisted effective changes to the bill and has therefore created a difficult dilemma for legislators: should they reject the bill or should they adopt a law which could legitimise certain forms of discrimination?

With every change of the rules of corporate governance comes an enhanced expectation of the role of the independent non-executive directors who are increasingly perceived to be the sentinels at the gate. However, as the pendulum continues to swing in the corporate governance debate, a key issue that has surfaced may be summarised aptly as “Who should be responsible?” Are we perhaps in danger of imposing too much responsibility upon the shoulders of independent non-executive directors who are by definition part-time members of the board, and whose access to information depends significantly on the executive management of the company? With reference to two recent decisions by the Listing Committee of The Stock Exchange of Hong Kong Limited this article seeks to address a crucial policy issue, namely whether independent non-executive directors who are members of audit committees should be subject to a higher standard of care and accordingly be held as primarily responsible for breaches of Listing Rules.

Is it possible in Hong Kong to acquire a right of way by long, open and uninterrupted usage? One might have expected this question, fundamental and of practical importance, to have been settled authoritatively. The answer has instead divided Hong Kong’s judges. Although the weight of recent opinion seems to be in favour of allowing such a right, the basis of doing so is not at all clear. It will be the gravamen of this article that the courts should no longer entertain any doubts upon the matter. Acquisition of such rights by usage is possible. The basis for recognition of such rights will be suggested and is, perhaps surprisingly, straightforward, but it is not the basis that has sometimes been suggested.

The Civil Justice Reform process in Hong Kong began in February 2000 and is expected to reach its culmination with new Rules of the High Court in April 2009. Nine long years therefore separate its beginning and end. This article attempts to answer the questions “Why did the process begin?”, “Where has it led?” and “What will it mean for the courts, litigants and the legal profession?”. In doing so, the article considers the English Civil Procedure Rules, which form the basis of many of the new Rules of the High Court in Hong Kong. In particular it looks at the changes that may result from the introduction of the proposed underlying objectives, sanctioned offers and the expanded scope of discovery.

A key human rights criticism of international counter-terrorism efforts is the approach taken by states in defining “terrorism”. The first half of this article reviews leading international definitions of “terrorism”, and the role of particular restrictive criteria. Namely; addressing the actions of military forces in situations of “armed conflict”, the requirement of a political, religious or ideological motivation, and the provision of specific exclusions for legitimate civil disobedience and protest. It concludes that while international consensus appears to favour a wide definition of “terrorism”, the inclusion of criteria reflecting the distinction between ‘terrorist acts’ and ‘privately motivated crime’ is preferable if states are to justify extra-ordinary restrictions on human rights in the “international war on terror”. The article then goes on to review domestic definitions of “terrorism” in China, India, Sri Lanka, Malaysia, Singapore and the Philippines, against these international standards. This review indicates that conservative attitudes towards “political stability” continue to over-ride human rights in the legislative definitions that determine what these South and East Asian states may label “terrorism” in the future. Accordingly, human rights agencies will face on-going challenges in working with these countries to ensure that counter-terrorism measures are consistent with international human rights law.

The relative foreign exchange valuation of the yuan, or renminbi, against the dollar is one of the longest-running and highest profile battles between the United States and China. What does the dispute, and America’s reactions to it, say about America’s trade empire? Specifically, what do the reactions say about the character and values America historically holds dear, and proclaims to the world through its trade empire?

America’s reactions emanate from the government, particularly Congress, and are largely unilateral and invariably loud. One reaction is to demand a quick, dramatic revaluation (if not free flotation) of the yuan. A second reaction is to threaten punitive tariffs on the order of 27.5 per cent against merchandise originating in China. A third reaction is to change rules about designating a country a currency manipulator. A fourth reaction is to expand America’s ability to impose antidumping duties, by requiring an adjustment in the dumping margin calculation to Export Price (or Constructed Export Price) for currency undervaluation. A fifth reaction is to ease rules on imposing countervailing duties against goods from non-market economies like China by deeming a misaligned currency a countervailable subsidy. Oddly, perhaps, a sixth potential reaction – America waivers on testing existing trade rules, such as in GATT Article XV:4 on exchange rate action, that would frustrate the purpose of multilateral trade rules.

Do these responses – none of which has yet been implemented formally in American trade law or policy – to yuan–dollar misalignment befit a great trade empire? Or, if greatness and virtue are at all connected, then do they evince a lack of virtue? Do American’s responses reveal its lack of practice of the Four Cardinal Virtues of prudence, moderation, courage, and justice?

The thesis here is that the China currency dispute arguably reveals the lack of virtue in the manner in which America presides over its trade empire. Far from displaying the Four Cardinal Virtues in its proposed legislative and policy responses to the challenge of yuan undervaluation, does the United States display their opposites or near-opposites: imprudence, gluttony, irresolution, and ineptitude?

On balance, the responses of the American trade empire to the challenge of the Chinese yuan seem to merit barely passing marks in respect of prudence and courage, and failing grades on moderation and justice. This evaluation is advanced as a proposition, not intended as a judgmental imposition. The key point about the assignment of marks is to provoke questions for thought and debate, not impose dark or definitive conclusions.

The Standing Committee of the National People’s Congress (NPCSC), as the final interpreter in the legal system of the PRC, performs the same function in the interpretation of the Hong Kong Basic Law. The study of the history of the NPCSC’s legislative interpretation in mainland China can shed light on its interpretations of the Hong Kong Basic Law. This article begins with an examination of the relationship between the National People’s Congress (NPC) and the NPCSC and the internal structure of the NPCSC. The inter-institutional relationship and the expected role of the NPCSC within the overall political framework will influence its legal interpretation to a reasonable degree. After a comprehensive analysis of the system of legal interpretation of the PRC, this article examines in detail nine examples of legislative interpretation by the NPCSC in order to probe interpretative methodologies usedin them.

In The Golden Victory the time charterers of a ship repudiated the contract, resolution of the dispute was delayed and by the time of the final hearing the Iraq war had broken out. The charterers argued that the fact that they would by reason of a term in it have been entitled to cancel the contract on the outbreak of war should be taken into account in calculation of damages for their breach of contract, despite the fact that that this had occurred fifteen months earlier. This paper argues that the decision when examined proves not to be based on sound reasoning, that there are good reasons for not always applying the compensatory principle in damages assessment, and that the shipowners were entitled to damages assessed at the time of the acceptance of the repudiation in the normal way.

This article discusses two alternative approaches to the rule in Hadley v Baxendale for assessing remoteness of damage. One is the Agreement-Centred Approach proposed by Mr Adam Kramer and the other is the Instrumental Promises Theory proposed by Professor Andrew Tettenborn. Both approaches depend on a construction of the express or implied intention of the parties to a contract. The article suggests that both approaches are essentially similar. The article then considers to what extent the use of either approach will promote greater certainty in the assessment of damages by the Court.

This paper studies the theoretical justification of intellectual property rights and its jurisprudential implications. Building on a careful yet critical re-examination of Locke and Hegel’s theories of property, the paper argues that the classical idea of preserving private property for the defense of the autonomous self is distorted when we apply their theories to intellectual property. Firstly, since ideas or knowledge constitute an inseparable part of the self, taking ideas or knowledge as private property is a circular construction that creates self-alienation, as it makes self-realisation depend on the self. Secondly, licensing as incomplete alienation not only makes the return of the selfhood from property attachment to the author / inventor impossible, but also renders incomplete the self-realisation of the alienee through acquisition. The self thus remains restless and the public is unsettled as well. By taking up contemporary issues of compulsory licensing and the exhaustion of intellectual property rights, the paper further reveals the function of the poverty of intellectual property philosophy, and proposes a reconstruction of the jurisprudence of intellectual property.

There are two distinguished models in corporate governance. One is the shareholder model, which is largely influenced by the economic theories of the firm, and the other is the stakeholder theory, which looks at the corporation from a wider perspective. This article will critically analyse the nature of both theories and instead of asserting superiority of either theory, it will argue that companies ought to be accountable to constituents who have the greatest stakes to the well-being of their business depending upon the circumstances.

The article focuses on the role of the Secretary for Justice as the protector of the public interest in civil and criminal proceedings. In the context of intervention in civil proceedings, issues covered include whether the Secretary should appear as a party or as an amicus curiae; government interventions and situations where the court invites the Secretary to intervene. The role of the Secretary in relation to contempt of court that occurs outside the court, vexatious litigants, and coroners’ proceedings and as Protector of Charities is explained. The independent role of the Secretary for Justice in relation to prosecutorial decisions is examined. The fundamental principle of prosecutorial independence which has developed as a constitutional convention in other common law jurisdictions and is enshrined in Article 63 of the Basic Law is discussed, taking account of judicial respect for prosecutorial independence and accountability for prosecutorial decisions.

China accords the one-member company special treatment distinct from the normal company. This is in sharp contrast with Singapore’s indifferent attitude towards one-member company vis-à-vis normal company. This paper critically examines these two distinct approaches including the respective substantive rules, legislative background and underlying jurisprudential theories. The respective advantages and limitations of the theories / approaches are then identified. The aim is to propose a new jurisprudential approach towards corporate personality which draws on the strength of the two theories while avoiding their pitfalls.

From a legal point of view, the complexity and, still to some extent, the uncertainty of the legal regime governing the Internet combined with the unstable regulatory regime of gambling makes Internet gambling a challenge to regulators worldwide. The implementation of legitimate gambling policy options, which previously were relatively easy to enforce in the context of physical borders, is challenged by the nature of the Internet as an international, borderless means of communication that facilitates cross-border contacts. Once adopted, a prohibitive policy ought to be enforced effectively, not only within borders, but also against external factors that might challenge the purpose of its legal basis. There are legal and technical options to implement prohibitive regulatory models on Internet gambling, but they face multiple dilemmas as illustrated by the experience of Hong Kong.

Criminal procedure in China was an inquisitorial one before the 1996 amendment to the Criminal Procedure Law. The amendment introduced a series of “adversarial” elements and constructed criminal trial as a contest between the prosecutor and the defendant. There is a widely shared presumption that victims may play a more active role in an inquisitorial system than in an adversarial system. However, China’s case presents a counterexample. The new “adversarial” system in China recognises the victim as a “party”, enjoying equal procedural rights with the defendant. This article examines the procedural rights guaranteed to victims by the amended criminal procedure law, identifies the major changes in the role of victims, and evaluates the effectiveness of these doctrinal changes. The central argument is that, with a largely policy-implementation orientation, the Chinese system is unlikely to endorse victims’ rights to the extent of sanctifying victims’ autonomy. The system is more likely to accept a “punitive victims’ rights” model, which would subsume victims’ interests in the larger policy objective of crime control. The development of welfare rights and informal arrangement of restorative justice may be more beneficial for victims than the codification of formal participatory rights in China’s current political and legal context.

There has been a high expectation for the derivative action, which was introduced into China in 2005 when the Company Law 1993 was extensively amended, to play an important role in corporate governance in China. But this expectation may not be fulfilled, because, among other things, the Law does not provide for how derivative actions should be financed. By way of a comparative study, this article investigates what rules are appropriate for derivative action funding in China. The general conclusion is that the common law indemnity order is inherently defective, because it entails that judges impose financial obligations on a company before the merit of an underlying claim is ascertained. The American contingent fee is most favourable and the established rules could be reformed to make the arrangement neutral so as to discourage frivolous litigation. Lastly, the special barrier of filing fees in China has to be cleared in order for derivative actions to be actually taken.

The Convention on the Rights of Persons with Disabilities (CRPD) was drafted with unprecedented input from civil society and entered into force on 3 May 2008, one month after obtaining its twentieth ratification. Although China was only a signatory at the time, it filed its instrument of ratification on 1 August 2008, in time to participate in the first meeting of States Parties in October 2008 and to nominate a member for the first Committee on the Rights of Persons with Disabilities. Pursuant to Article 153 of the Basic Law of the Hong Kong Special Administrative Region, the Central government also commenced negotiations with the local Hong Kong government and ultimately decided to apply the CRPD to Hong Kong, albeit with a questionable declaration that purports to limit the application of the treaty in the field of immigration. The CRPD is an unusually long and detailed treaty and Hong Kong now has an obligation to conduct a comprehensive review of its laws and policies. The author argues that the Disability Discrimination Ordinance and its enforcement model should be amended and that the government should create a central body on disability to review and coordinate executive policies that are necessarily affected by the treaty, particularly those relating to accessibility, inclusive education and mental health.

This article analyses the organised crime laws of mainland China, Hong Kong, and Macau. It examines offences for the participation in criminal organisations and equivalent offences penalising the existence and operation of organised crime under local laws. The aim of this article is to assess the adequacy and efficiency of the existing provisions in these three jurisdictions, and develop recommendations to make these provisions more effective in the prevention and suppression of organised crime.

The recent landmark High Court decision in Sons of Gwalia Ltd v Margaretic (2007) in Australia has altered the topography of modern Australian insolvency law by recognising distributive equality in the treatment of shareholder and ordinary unsecured creditor claims in certain circumstances. Some commentators fear that the elevation of shareholder claims in Australia may have significant implications for ordinary unsecured creditors in corporate insolvencies in Hong Kong. Australia and Hong Kong share a common legal heritage. In particular, there are identical statutory debt subordination provisions in both jurisdictions which subordinate shareholder claims in favour of ordinary creditors. The article assesses the prospects and possible impacts of Sons of Gwalia in the legal treatment of shareholder claims in corporate insolvencies in Hong Kong. A comparative assessment is made, focusing on material differences in the commercial and insolvency landscape between the two jurisdictions and in the enforcement culture of investor protection laws. Such significant disparities lead to the conclusion that the impact on creditors in Hong Kong will be minimal, unless accompanied by other significant legal developments and reforms discussed in the article.

The protection of investor is one of the five core principles of the Securities Law 2006. However, investor protection in the Vietnamese securities market is eroded by inadequate securities regulation. This study dicsusses and analyses the protection of investors under the Vietnamese securities regulation regime. It suggests some recommendations to ensure and increase investor protection in Vietnamese securities market.

Malaysia has recently embarked on a comprehensive corporate law reform program ("CLRP") which promises to reinforce progress made in implementing corporate governance measures for its listed sector. Changing the law to provide for a sound legal and regulatory corporate framework, although overdue, will not be enough in itself to prevent future corporate collapses or misconduct or instill a culture of transparency and good governance. So far as Malaysia is concerned, an important aspect of corporate law reform is not merely the overhaul of particular provisions, but the issue of acceptance of the "rule of law" coupled with effective enforcement. This paper examines the issue of corporate law reform in Malaysia in the context of weaknesses in the "rule of law" which are evident in terms of public governance.

The adjudication on pre-incorporation contracts in the People's Courts in China has been in a state of confusion since the PRC Company Law was first enacted in 1993. This is in large part due to the lack of a pre-incorporation contract regime in the PRC Company Law. This paper proposes a set of optimal pre-incorporation contract rules from a law and economics perspective. This is done through a consideration of the pre-incorporation contract rules proposed by Michael Whincop and the draft rules and guidelines prepared by various levels of People's Courts. It is argued that allocating liability for a pre-incorporation contract to the relevant company is efficient only where the company is a Company Limited by Shares promited by share offer, provided corporate performance is possible. In all other situations, it is more efficient to allocate the liability to the promoters, regardless of the type of company in question.

China's "Re-education through labour" (RETL) system has been long criticised for being incompatible with international human rights law. Nevertheless, a thorough and comprehensive analysis of the alleged incompatibility is still missing. This article intends to fill this gap, first by exploring relevant international standards; second, by examining in the light of international standards, the following aspects of the RETL system: competent authorities, the legal basis of the RETL system, substantive protection, due process, length of detention and labour conditions under the RETL system. This article also intends to paint an up-to-date picture of the RETL system and to indicate a direction its reform needs to follow in order to meet the requirements of international law.