Hong Kong Law Journal 1971 - 2021

Food, clothing and housing are the first three things which the Universal Decla¬ration of Human Rights and the International Covenant on Economic, Social and Cultural Rights alike name as components of the right to an adequate standard of living. It is as such components that those three things are to be approached. As socio-economic rights tend to be, they are expensive to provide. So when states covenant to deliver them, their obligation to do so is subject to the availability of resources and may be fulfilled progressively. But that recog¬nition of reality is not a licence unreasonably to delay, still less to evade, the fulfilment of treaty obligations. Courts are duty-bound to enforce constitutional rights, socio-economic ones no less than other ones. While recognising that they are not ideally equipped to undertake resource allocation, courts cannot decline to intervene when a legislative (or administrative) scheme fails to accord people the basic necessities to which they are constitutionally entitled. In enforcing rights — whether of the socio-economic kind, of the civil and political kind or of any other kind — courts often have to be, and are, highly innovative. Finally, let it be remembered that the need to deliver on the big things should not lead us to overlook the little things which can also be so important.

The 2019 political storm in Hong Kong, triggered by resistance to a proposed law that would have created an institutional channel for the extradition of fugi¬tives from Hong Kong to Mainland China, resulted in the most severe and prolonged civil unrest in this city since China resumed exercise of sovereignty over Hong Kong in 1997. This article considers the nature of the 2019 rendi¬tion saga in the context of the tensions inherent in the constitutional framework of “One Country, Two Systems”. It is contended that there are contradictions within the structure of the “One Country, Two Systems” formula such that it encourages and yet limits a Western-style liberal democracy in Hong Kong. It is argued that the prolonged anti-extradition movement is no more than a reflection of the internal contradictions of “One Country, Two Systems” but in a more ferocious way than before. If this paradox is not resolved properly, it is doomed to plague Hong Kong in the future.

This article explores the Recordation and Review Mechanisms anchored in art 17(2) and 17(3) of the Basic Law which provides for the obligation of Hong Kong to report enacted laws to the China’s National People’s Congress Standing Committee (NPCSC) for the record and the NPCSC’s corresponding powers to review and return any such laws. We argue that the Recordation and Review Mechanisms are an interconnected set of constitutional enforcement mecha¬nisms for the NPCSC to police the constitutional limits of Hong Kong’s auton¬omy. Furthermore, we highlight and examine two ambiguities in art 17(2) and 17(3), namely the lack of any mention of conditions under which the art 17(3) review process could be triggered and the ambiguous legal status of reported laws that have not been returned by the NPCSC. This article then undertakes a comparative study vis-a-vis the Chinese Filing and Review System, China’s key legislative supervisory system, which we argue is indispensable in fully under¬standing the operation of Hong Kong’s Recordation and Review Mechanisms and resolve the two ambiguities highlighted. We sketch, drawing on the Chinese Filing and Review System, how the review process could be activated and how NPCSC’s power of review could be reconciled with local courts’ jurisdiction of constitutional review through developing a framework elucidating the proper judicial responses to a “passive confirmation” by the NPCSC in not returning a submitted law under different circumstances.

This article explores whether and how the United Nations Convention on Contracts for the International Sale of Goods (CISG) might extend from one “territorial unit” to another within a Contracting State by examining a recent initiative of the Hong Kong Government to apply the CISG in Hong Kong. It advances the argument that the extension requires concerted actions from authorities in both Hong Kong and Mainland China and must be carried for¬ward to cover contracts between parties with their respective places of business in Hong Kong and Mainland China in order for its promise for economic ben¬efits to fully materialise. This argument is further developed through detailed analyses that demonstrate how both a literal interpretation and a purposive interpretation of art 93 of the CISG necessitate the conclusion that the article should have no application to Hong Kong, how a combination of domestic con¬stitutional rules governing the relationship between Hong Kong and Mainland China and public international law rules governing a participating State’s power to extend the territorial scope of a multilateral treaty give rise to the need for the Central People’s Government to make a declaration to extend the CISG to Hong Kong and to deposit it with the Secretary-General of the United Nations and how a bilateral agreement between different “regions” of the same Con¬tracting State of a multilateral treaty like the CISG might extend substantive rules under the treaty to inter-regional contracts.

A global increase in joint development agreements is welcomed, as such agree¬ments are sophisticated solutions that enable the states in disputed waters to develop the natural resources straddling overlapping maritime areas. An expo¬nential focus has been placed on the prospect and future of joint development in the East China Sea. Currently, there are only a few tentative agreements among East Asian states. However, some of them have led to concrete results. This article first examines the concept and legal basis of joint development together with the rationality for states surrounding the East China Sea to undertake joint development in their overlapping maritime areas. An assessment of the key elements needed for establishing joint development in the East China Sea follows this examination. The article also identifies some critical issues related to establishing joint development in the East China Sea.

This article considers the extension of the English legal doctrine of joint tort- feasance in determining parent companies’ liability for their subsidiary com¬panies’ torts in a transnational context. It is motivated by the inadequacies of current solutions to the multinational corporate tort problems, which arise in the context that the responsible subsidiaries are unable to satisfy compensation orders made against it by their tort creditors suffering personal injuries. The article discusses the current routes of determining parent companies’ liability based on the doctrine of veil piercing and tort of negligence, with revealing problems and limitations. Then it moves to evaluate the application of the joint tortfeasance doctrine in establishing parent companies’ liability. The Supreme Court’s current attitude makes it clear that there is no special or separate legal test applicable to parent companies’ negligence liability, and each case should be determined on its own facts. The article analyses current main circumstances for establishing parent companies’ negligence liability, especially focusing on the extent of parent companies’ control, management, intervention or supervi¬sion that may invoke liability. Beyond this discussion, the article provides more possibilities and new insights in determining the group members’ liability by suggesting and evaluating essential elements and circumstances, especially the amount/extent of control that help in creating parent companies’ procurement, authorisation and concerted action for joint tortfeasance.

The commercial and sustainable development of outer space certainly requires proper intellectual property protection legal regime. The international intellec¬tual property treaties have not explicitly considered intellectual property protec¬tion in outer space in their provisions. Likewise, none of the five outer space treaties’ provisions notably address the issue of intellectual property protection. This may discourage states and non-governmental entities from actively engag¬ing in space activities. One principal reason leading to this legal status is the potential conflict caused by the unity of non-territoriality in outer space and the diversity of territoriality in intellectual property. The objective of this article is to first examine in detail the contrasting feature of territoriality between the legal regimes of outer space and intellectual property. It then moves to argue that art VIII of the Outer Space Treaty offers a regulatory approach to reconcile the conflict. There is a self-contained mechanism that uses registered space objects as a connecting factor and the mode of “quasi-territorial” jurisdiction in public international law to permit the legitimate extension of the national sovereignty of the state of registry to space objects, thereby enabling guaranteed levels of functional intellectual property rights in outer space. An optimum balance can be well reached between the unity of non-territoriality in outer space and the diversity of territoriality in intellectual property. As a result, intellectual prop¬erty rights created from space activities remain legally protected by extending existing intellectual property laws to space objects, which has been well demonstrated in certain spacefaring countries’ national space legislation. There is also a need to consider the legal harmonisation of rules concerning intellectual property protection in outer space at the international level in the long run.

In May 2021, Singapore reopened the discussion to introduce no-fault divorce into its divorce laws and sought the public’s opinion on its consultation paper. This article posits that no-fault divorce is not against the best interests of soci¬ety and is in the best interests of the family. This is because no-fault divorce can benefit parties (especially the children) and does not erode the sanctity of marriage. An empirical study of divorce in Hong Kong shows that there is no correlation between no-fault divorce and the increase in divorces. In a similar vein and in line with therapeutic justice, the authors also propose interdisci¬plinary measures to better support marriages and children to complement the introduction of no-fault divorce in Singapore.

The weighted voting rights (WVR) structure enables company founders to retain their majority control even though their shareholdings are diluted when raising capital through an initial public offering (IPO). This ability to retain control has incentivised several Chinese companies to consider the WVR availability when selecting a jurisdiction in which to list, and accordingly, the competition is estab¬lished among these jurisdictions for the listing of these companies. However, the WVR structure introduces entrenchment and exploitation risks. The quest to achieve a balance between management entrenchment and minority share¬holder protection has been a hotly debated issue, which, if not properly handled, will result in a “race to the bottom” in IPO regulation to attract listings.

This article offers fresh insights into how this issue is resolved by analysing the new WVR listing rules of two financial centres in Asia: the Hong Kong Stock Exchange and the Singapore Exchange. In an environment of regula¬tory competition between the two jurisdictions, the article reveals their different positions by comparing the safeguards introduced by these two stock exchanges. The comparison, combined with the regulatory position in the United States as supporting evidence, suggests that the regulatory competition has not resulted in a race to the bottom as both jurisdictions have adopted a number of unique protections. Despite this, further reforms in these jurisdictions are needed to compete with those in the United States.

The diversity in mediation practices, as well as the numerous mediation institu- tions/mediators, makes it difficult to impose uniform and effective quality con¬trol standards on mediation. This problem may negatively impact the successful implementation of the United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore Mediation Convention). As to the efforts to address such diversities and assure the quality of settlement agreements, this article suggests that, among others, they may include cate¬gorising mediation services, introducing compulsory training and accreditation for mediators and enhancing minimum desirable standards for international commercial mediation.

Kompetenz-kompetenz is widely recognised as a fundamental principle of law in arbitration. However, different countries take different approaches to it. Under the French model of kompetenz-kompetenz, the arbitral tribunal has priority to rule on its own jurisdiction and courts may not intervene in the arbitral process, unless the arbitral tribunal has not been properly constituted and the arbitra¬tion agreement is “manifestly void” or “manifestly inapplicable”. In contrast, under the current 1994 PRC Arbitration Law, the role of the arbitral tribunal to decide its own jurisdiction is undertaken by Chinese arbitration institutions. Chinese courts have priority in reviewing arbitral jurisdiction at the outset of the arbitral process. This article suggests that China should look to France for refer¬ence when revising its rules on kompetenz-kompetenz in the upcoming reforms of the PRC Arbitration Law.

This article uses empirical evidence to give a relatively convincing answer to the question as to whether the dispensation of the mandatory bid obligation triggered by gratuitous transfers of state-owned shares can achieve the legislative purpose of China’s modified Mandatory Bid Rule (“MBR”). After transplanting the MBR from the United Kingdom in the early 1990s, China modified this rule and granted exceptions based on a much broader scope of grounds, and a large proportion of the dispensed cases are gratuitous transfers of state-owned shares. It is doubtful, however, whether the dispensation of gratuitous transfers can achieve the modified MBR’s legislative goal, that is, the promotion of compa¬nies’ efficiency. Although there is some debate about this, if we analyse from the perspective of both the basic logic of asset transfers and the market for corporate control theory, we can see that China’s obligation-dispensed gratuitous transfers may not be efficient. Although there is much literature discussing China’s mod¬ified MBR, none is conclusive on this issue. Using quantitative evidence, this article finds that the target companies of China’s obligation-dispensed gratuitous transfers do not experience improved performance after the transfer, and so these transfers are not efficient and their dispensation therefore cannot achieve the legislative purpose of China’s modified MBR. By using China’s evidence, this article contributes to the dynamic-model theory and also provides some contributions to China’s legislators and policymakers for future modifications of the MBR as well as reforms of state-owned enterprises.

The Charity Law, which was promulgated in 2016, creates a public law-pri¬vate law hybrid model for the regulation of charities in China. The incorpora¬tion of private law norms into the new legislative framework demonstrates the state’s willingness to confer greater autonomy on charitable actors with regard to determining how their assets can be utilised for charitable purposes. This article analyses the associated post-2016 regulatory framework and outlines the extent to which private actors can voluntarily engage in charitable activities after the passage of the new charity law. It also reports the way in which the new regulatory framework has been implemented in practice based on data col¬lected through semi-structured interviews. Observations associated with regula¬tory practices suggest that the political philosophy underlying the new regulatory framework remains unchanged: strict government control remains predomi¬nant, and the scope for private actors to exercise their management rights is still considerably limited.

After the fall of the Ming dynasty, the rise of the Qing dynasty saw harsher criminal penalties for property-related offences. A key example was the intro¬duction of capital punishment, where the maximum sentence for theft crimes was raised to death by strangulation with delay. Before the Qing dynasty, it was rare for persons who committed property crimes without causing any bodily harm to receive a death sentence. One of the possible reasons why the Manchu rulers made the punishments for property offences harsher was that the Qing government was placing greater emphasis on the legal protection of property rights. This was expressed through legislative enactments. In this article, the authors argue that the key impetus for the rulers of the Qing dynasty to enact such severe legal sanctions was to gain acceptance and support from the major¬ity ethnic Han population, and to mitigate the inter-ethnic tension, so as to sta¬bilise and cement their rule over China. This article relies on archival materials from the Academia Sinica to support its thesis.

This article suggests that the nature and the future of China’s Health Code need to be understood within the overall digital ecosystem in China, which includes national strategies on informationalisation, big data, artificial intelligence and Smart Cities. These digitalisation strategies, introduced at different times, were established for a threefold objective: economic development, social governance and control and the delivery of public services. For the latter two objectives, China has taken a “Government as a Platform” (GaaP) approach to modern¬ising social governance and to delivering public services. However, careful anal¬ysis of the policy and legal framework governing digitalisation strategies suggests that GaaP products in China are distinct in nature; they are largely outside legal constraints and always have social control as a core function. As such, the Health Code as a GaaP product will likely become a new kind of identification and real world, real time tracking mechanism that delivers government services as well as social control simultaneously.