A practical guide to drafting an HKIAC Mainland

A contract with a Mainland Chinese counterparty raises one question before the ink dries: if the relationship breaks down, where does the dispute go, and can an award actually be enforced? The choice of arbitration clause is not a boilerplate decision. It is the enforcement architecture of the entire agreement.

An HKIAC arbitration clause in a cross-border commercial contract names the Hong Kong International Arbitration Centre as the administering institution, Hong Kong as the seat, and invokes the HKIAC Administered Arbitration Rules – the 2024 Rules, effective 1 June 2024. Where the counterparty has assets in Mainland China, the clause is also the gateway to the mutual-enforcement mechanisms between Hong Kong and the Mainland under the Arrangements (a series of bilateral agreements between the Hong Kong SAR and the Mainland courts governing reciprocal arbitral-award enforcement and interim measures). This guide walks through the drafting decisions in sequence, identifies the gate at each step, and flags the one structural mistake that makes an otherwise valid clause unenforceable in practice.

Six steps follow, with the cross-border enforcement logic running through each one.

Why the forum choice matters more than the governing law clause

The governing-law clause tells you whose rules apply. The arbitration clause tells you whether you can collect. For a contract with a Mainland counterparty, those two decisions pull in different directions far more often than foreign counsel expect.

In our cross-border practice, the most common instruction we receive is not "start the arbitration" – it is "enforce an award against assets we cannot reach." By the time the dispute crystallises, the clause has already determined the range of options available. A badly drafted clause means the award sits on paper while the counterparty's assets remain beyond reach.

Hong Kong sits in a structurally advantageous position for this analysis. It is a common-law seat with a well-tested institutional rulebook, a supervisory court system recognised across the Mainland through the bilateral Arrangements, and – since 1 October 2019 – a mechanism allowing parties to seated Hong Kong arbitrations to seek interim measures directly from Mainland people's courts before and during proceedings. No other seat outside the Mainland gives a claimant that access.

The forum decision and the drafting of the clause are therefore not separable questions. They are the same question, addressed at contract stage.

Step 1: Confirm the seat and the administering institution

The first gate is confirming that Hong Kong is named as the seat – not merely the venue – and that the HKIAC is named as the administering institution by its full formal title. A clause that names a city without specifying the institution, or that names the institution without specifying the seat, generates a threshold dispute before the substantive claim is even heard.

The Arbitration Ordinance (Cap. 609), modelled on the UNCITRAL Model Law, governs arbitrations seated in Hong Kong. It applies automatically when Hong Kong is the seat. The HKIAC Administered Arbitration Rules operate on top of that statutory floor. A clause that omits the seat creates a gap: the counterparty argues a different jurisdiction, and the claimant spends cost and time resolving the jurisdictional question before addressing the merits.

The HKIAC's model clause language is the safest starting point. It names the institution, the seat, the number of arbitrators, and the language of the proceedings. Each of those elements is a gate. Leaving any one blank invites a preliminary objection.

For contracts with Mainland counterparties specifically, one additional confirmation is needed at this step: that the agreement does not separately confer non-exclusive jurisdiction on a Mainland court for the same class of disputes. Parallel dispute-resolution clauses – arbitration for some claims, Mainland court litigation for others – routinely produce conflicts over which mechanism applies to which claim. The cleaner position is a single, exclusive arbitration clause covering all disputes arising out of or in connection with the agreement.

Step 2: Choose the number of arbitrators and the appointment mechanism

Under the HKIAC Administered Arbitration Rules, parties may designate one or three arbitrators. The number affects cost, speed, and the appointment mechanism if a party fails to participate.

A sole arbitrator is appropriate for mid-value, relatively straightforward cross-border claims. Three arbitrators give each party a nominated candidate and reduce the procedural risk of an uncooperative respondent – a real consideration where the counterparty is a Mainland state-linked entity or a group with incentive to delay. The HKIAC has an administered appointment function: if a party fails to nominate, the HKIAC Council appoints on its behalf. That institutional backstop matters when the respondent simply does not engage.

The clause should state the number of arbitrators expressly. Where parties anticipate disputes of varying scale, a tiered clause – sole arbitrator for claims below a defined threshold, three for claims above – is a recognised approach, though the threshold must be set with care and the mechanism for determining which band applies must be clear on the face of the clause.

At this step, parties sometimes introduce a co-arbitrator appointment requirement tied to the counterparty's preferred list of Mainland-qualified arbitrators. That arrangement is workable in principle, but the clause must still anchor appointment authority in the HKIAC for the cases where agreement fails. An appointment mechanism that depends entirely on the parties' agreement produces delay whenever the relationship has broken down.

Step 3: Fix the language, the governing law, and the seat separately and explicitly

Three distinct choices run alongside the institutional and procedural architecture: the language of the arbitration, the substantive governing law of the contract, and the law of the arbitration agreement itself. All three should be stated expressly. All three carry cross-border consequences.

Language of the arbitration – English, Mandarin, or bilingual – affects the pool of available arbitrators, the cost of translation, and the evidentiary process. For a contract between a Hong Kong entity and a Mainland counterparty, bilingual proceedings are sometimes agreed, with the arbitration clause specifying a primary language for the award. Whatever is chosen, the clause should state it, not leave it to the tribunal.

Governing law of the contract – the substantive law that the tribunal applies to the merits – is a separate decision from the seat. Parties frequently choose Hong Kong law as a neutral commercial law applicable between an offshore or Hong Kong entity and a Mainland counterparty. Mainland law is also chosen, particularly where the contract concerns a Mainland-law subject matter or asset. Either is workable. The clause should state the governing law explicitly.

Law of the arbitration agreement itself – often forgotten, always significant. If not stated, courts imply a governing law based on the seat or the governing law of the main contract. For most cross-border contracts choosing Hong Kong as seat, that implication runs in favour of Hong Kong law governing the arbitration agreement. The safest approach is to state it expressly, avoiding the need for a later court determination.

Step 4: Address the interim-measures gateway to the Mainland courts

The interim-measures Arrangement, in effect since 1 October 2019, allows parties to a Hong Kong-seated arbitration to apply to Mainland people's courts for preservation orders covering property, evidence, and conduct – before the award is issued and without waiting for Mainland proceedings. This mechanism is only available where the arbitration is seated in Hong Kong and administered by an institution designated under the Arrangement. The HKIAC is a designated institution.

For a contract where the counterparty's assets sit in the Mainland, this mechanism is the difference between an award that is collectible and one that is not. Asset preservation before the award issues – at the point where the respondent would otherwise move or dissipate assets – is the operational heart of the enforcement strategy.

The clause itself does not need to activate the mechanism: the Arrangement operates as a matter of bilateral agreement, and a properly drafted HKIAC Hong Kong-seat clause brings the parties within its scope automatically. What the clause should not do is undermine this gateway. A clause that adds language restricting the parties from seeking interim relief without the other's consent, or that conditions the right on a prior procedural step, can neutralise the mechanism in practice.

The sequence above describes the standard position. The specific contracts, counterparty type, and asset profile in your transaction determine whether the mechanism is available and in what form – and that is where the drafting and strategy are won or lost.

To discuss how the interim-measures Arrangement applies to your cross-border agreement with a Mainland counterparty, contact info@lockhartyip.com.

Step 5: Plan the enforcement route at the drafting stage

The award-enforcement route between Hong Kong and the Mainland operates under two instruments: the 1999 Arrangement on mutual enforcement of arbitral awards, as supplemented by the 2020 Supplemental Arrangement. Since the amendment that took effect in 2021, simultaneous enforcement applications in both Hong Kong and the Mainland are permitted. That means an award creditor can move in both places at once, covering assets on both sides of the boundary.

What does this mean for drafting? It means that the award – the document produced at the end of the HKIAC proceedings – must be in a form that Mainland enforcement courts will recognise. A Mainland people's court reviewing an enforcement application will look at the arbitration agreement on which the award is based. It will check that the clause meets the formal requirements for a valid arbitration agreement under Mainland law as applied through the Arrangement. The clause is therefore reviewed twice: once by the tribunal when it takes jurisdiction, and once by the enforcement court when the award creditor seeks to collect.

An Asian technology group with a Mainland distribution counterparty came to us in early 2025. Their existing contract contained an HKIAC clause that was technically valid but used non-standard language that had been inserted by the counterparty's counsel. When the relationship broke down and the group sought enforcement of an award in a Mainland city, the local court raised a formal objection to the clause wording. The enforcement application was delayed by several months while the issue was addressed. A clause drafted to standard from the outset would have avoided that delay entirely.

The practical consequence: use the HKIAC model clause language, or language closely tracking it, as the base. Amendments to the model language should be reviewed against both the HKIAC Rules and the formal requirements under the Arrangement before they are agreed. Every departure from the model is a potential enforcement objection.

The decision matrix for the enforcement route runs as follows. Where the counterparty's assets are entirely in the Mainland: the 1999 Arrangement and the 2020 Supplemental Arrangement are the primary instruments; an HKIAC Hong Kong-seat clause is the prerequisite; simultaneous applications are available since the 2021 amendment. Where assets straddle Hong Kong and the Mainland: the same instruments apply to Mainland assets; Hong Kong court enforcement applies to Hong Kong assets; interim measures under the 2019 Arrangement are available to protect both pools during the arbitration. Where assets are offshore: the New York Convention governs; Hong Kong's accession as a common-law seat with a well-recognised enforcement record is the relevant factor.

Step 6: Avoid the common structural mistake

The most frequent drafting error we see in cross-border contracts with Mainland counterparties is not an error in the arbitration clause itself. It is an error in the wider contract structure that undermines the clause.

Two provisions, when inserted alongside an HKIAC arbitration clause without careful alignment, regularly produce conflicts. The first is a Mainland-law jurisdiction clause in a related agreement – a pledge, a guarantee, a side letter – that purports to give exclusive jurisdiction to a Mainland court over disputes that overlap with the arbitration scope. The second is an exclusive-jurisdiction agreement in a financing document that was drafted on the assumption that disputes would be resolved in court, not by arbitration.

When these provisions coexist, the counterparty argues that the Mainland court clause takes priority over the HKIAC clause for the relevant class of disputes. Even if the argument ultimately fails, it generates a preliminary jurisdictional contest that costs time and money before the substantive dispute is addressed. Where the counterparty is using the preliminary contest as a delay tactic – a common approach in high-value Mainland enforcement matters – the structural conflict does exactly what the counterparty needs it to do.

The fix is a hierarchy clause and a consistency review of the entire contract bundle. The hierarchy clause states, in express terms, that in the event of conflict between any dispute-resolution mechanism in any agreement forming part of the transaction documents, the HKIAC arbitration clause in the principal agreement prevails. The consistency review confirms that no other agreement in the bundle purports to give exclusive jurisdiction to a court over a class of disputes that falls within the scope of the arbitration agreement.

If an earlier filing, structure, or enforcement attempt produced a stalled or adverse result because of overlapping dispute-resolution provisions, a second read of the contract bundle can identify the conflict and the routes still open.

Email info@lockhartyip.com to discuss how this applies to your transaction documents.

How does this interact with the expedited procedure and the broader disputes practice?

The HKIAC Administered Arbitration Rules provide an expedited procedure for qualifying disputes. Under the 2024 Rules, an expedited-procedure award must ordinarily be rendered within six months of the file transfer to the tribunal (extendable in appropriate circumstances). For cross-border contracts where speed of resolution is a commercial priority – for example, a distribution agreement where the ongoing relationship is at stake – a clause that expressly opts into the expedited procedure for claims below a specified amount is worth considering.

The expedited-procedure election is made in the clause at contract stage. It cannot be unilaterally imposed mid-proceedings if the clause does not provide for it. Parties who want the option should elect it at the drafting stage and note that the other party can object to the expedited procedure in certain circumstances under the Rules – so the election is not absolute, but it is a strong starting position.

For a deeper analysis of the expedited procedure mechanism and the conditions under the 2024 Rules, see our guide at Expedited procedure under HKIAC Rules.

The broader disputes and arbitration practice at Lockhart & Yip covers the full sequence from clause drafting through to cross-border enforcement. For an overview of the practice and the cross-border enforcement capabilities available through the Hong Kong seat, see Disputes & Arbitration.

Cross-border enforcement questions also arise in the context of Mainland and foreign court judgments. For an analysis of how foreign-court judgments are recognised in Hong Kong, including the position for Cyprus judgments, see our analysis at Recognising a court judgment from Cyprus in Hong Kong.

Clause drafting checklist: the seven gates

A sound HKIAC clause for a Mainland China counterparty should pass each of the following before the contract is executed.

The HKIAC is named as the administering institution by its full formal name.
Hong Kong is named as the seat – not merely the place of hearings.
The HKIAC Administered Arbitration Rules (specifying the 2024 Rules, or the rules in force at the time of the dispute) are invoked.
The number of arbitrators is fixed expressly.
The language of the arbitration is stated.
The governing law of the contract and the law of the arbitration agreement are each stated separately.
No other provision in the contract bundle confers exclusive court jurisdiction over a class of disputes overlapping with the arbitration scope, without an express hierarchy clause resolving any conflict in favour of the arbitration agreement.

Each gate is a point at which the clause can fail. A clause that passes all seven is not bullet-proof – no clause is – but it removes the structural vulnerabilities that produce preliminary objections and enforcement delays in practice.

Related practices

Disputes & Arbitration – cross-border enforcement, arbitration strategy and interim measures across Greater China
Holding Structures – offshore and Hong Kong holding architecture supporting the contractual and enforcement position

Frequently asked questions

Which jurisdiction's law applies to drafting an HKIAC arbitration clause for a Mainland China counterparty?

The arbitration agreement itself is typically governed by Hong Kong law where Hong Kong is the seat, though parties should state this expressly rather than rely on implication. The substantive governing law of the underlying contract – Hong Kong law, Mainland law, or another system – is a separate choice. Mainland enforcement courts also apply their own formal requirements when reviewing the arbitration agreement at the enforcement stage, so the clause must satisfy both the HKIAC framework and the Arrangement's requirements.

What does the route look like for drafting an HKIAC arbitration clause for a Mainland China counterparty?

The route runs from clause structure (seat, institution, rules, arbitrators, language, governing law) through the interim-measures gateway (available since 1 October 2019 for HKIAC Hong Kong-seated arbitrations) to award enforcement under the 1999 Arrangement and the 2020 Supplemental Arrangement. Since the 2021 amendment, simultaneous enforcement applications in Hong Kong and the Mainland are permitted. The clause is the starting point; the enforcement instruments are the destination. Every drafting choice affects which instruments are available at the end of the route.

Do I need a Hong Kong adviser for drafting an HKIAC arbitration clause for a Mainland China counterparty?

International and cross-border counsel with Hong Kong arbitration experience are well-positioned to draft and review the clause, advise on the interaction with the Mainland enforcement mechanisms, and coordinate with locally licensed Hong Kong firms on matters of Hong Kong law. Foreign counsel who are unfamiliar with the bilateral Arrangements – including the 2019 interim-measures mechanism and the 2020 Supplemental Arrangement – routinely miss the structural conditions that determine whether an award is enforceable in the Mainland. A practitioner with direct cross-border enforcement experience in this corridor is the appropriate adviser at the drafting stage.

Speak with Lockhart & Yip

For a scoped view of your matter, contact info@lockhartyip.com. Discuss your matter →

This publication is general information and does not constitute legal advice. For advice on your situation, contact info@lockhartyip.com.

A practical guide to drafting an HKIAC arbitration clause for a Mainland China counterparty