The Big Idea: Evidence (RTHK Radio 3)

The Big Idea: Evidence

RTHK Radio 3

28 February 2015

The final programme in the current series focuses on the concept of "evidence". We persuade people of the rightness of our theories and assertions by logic or by evidence, or a combination of the two.

     Evidence is a key concept in a number of domains, though it means different things to a lawyer, a scientist, or a historian. We love evidence: fictional crime stories nearly always turn on evidential drama, and the classic detective like Sherlock Holmes is expert at making material discoveries – a footprint, a bloodstain, a stolen document – that prove the guilt or innocence of parties suspected – or unsuspected – by the police. These adventures may not, however, correspond very closely to actual police or legal procedure. 

     Evidence can support, test, or falsify a theory: it’s the main business of courtroom testimony, of humanistic research, and of the experimental method of the sciences. It may be direct or circumstantial. But what counts as evidence? Can it conclusively and permanently prove a truth? Both scientists and lawyers have strict rules about what constitutes evidence, how it can be obtained and presented, what makes it admissible or not. Interestingly, the testimony of both scientists and legal witnesses is underwritten by a declaration of honour, and this is one thing that makes the production and disputation of evidence an always fascinating human drama. 

    Douglas Kerr takes evidence about evidence from two eminent legal figures, Simon Young and Marco Wan, both Associate Deans in the Faculty of Law at the University of Hong Kong.  Click here to listen to the programme.

The Achievement of Constitutionalism in Asia

"The Achievement of Constitutionalism in Asia: Moving Beyond 'Constitutions Without Constitutionalism'"

Albert Chen

in A.H.Y. Chen (ed), Constitutionalism in Asia in the Early Twenty-First Century (Cambridge University Press 2014) pp 1-31

Abstract: The phrase “constitutions without constitutionalism” has been used by various authors to describe the state of constitutional law in Africa, the Middle East and Latin America at various points in time. For significant periods, the constitutional circumstances of many Asian countries may also be aptly summarised by “constitutions without constitutionalism”. As it is by no means obvious or likely that a nation’s constitution will be successfully put into practice after it has been enacted, it is indeed right and appropriate to talk of constitutionalism as an “achievement”. 

     In the early twenty-first century, constitutionalism is still a work in progress in many parts of the world, particularly in Asia, Africa and Latin America. Many Third World countries have still not grown out of the syndrome of “constitutions without constitutionalism”; the “achievement” of constitutionalism is yet to come. Just as Fuller speaks of the project of legality or Rule of Law as being governed by a “morality of aspiration”, which means whether the ideal of the Rule of Law is realised in a particular country or legal system is a matter of degree, and the practitioner of the morality of aspiration should try her best to achieve excellence in, or a higher degree of fulfillment of, this ideal, so this “morality of aspiration” is also applicable to the practice of constitutionalism. The achievement of constitutionalism in a particular nation-state is also a matter of degree. 

     The book project of which this paper forms a part attempts to inquire into the state of constitutionalism in Asia in the early twenty-first century, or the extent or degree to which constitutionalism has been “achieved” in this part of the world at the present time. Although constitutionalism as a theory and practice of government and law first originated in Western Europe and North America, there is by now considerable evidence of its positive reception in and successful “transplant” to a significant number of Asian countries. As I wrote previously, “A macrohistorical perspective, covering developments in Asia since the late nineteenth century, suggests that constitutionalism has broadened and deepened its reach, significantly, over the course of time.” The experience of different Asian countries in this regard provides useful and fascinating case studies of what Grimm calls the “achievement of constitutionalism”. 

     This paper consists of two main parts. Part I attempts to develop a conceptual framework for the purpose of studying, analyzing and evaluating constitutional, political and legal developments in countries on their path towards the “achievement of constitutionalism”. Part II discusses the experience of Asian countries and jurisdictions from a historical and comparative perspective, utilising the conceptual apparatus developed in Part I.   Click here to download the full chapter.

$1.1M in New Small Project Research Funding

Congratulations to the Faculty members who were awarded HKU Small Project Research Grants up to $80,000 each. The projects cover a wide range of topics and are listed as follows (in no particular order):

1. Competition Law Enforcement against Abuses of Market Power in Hong Kong (36 months), Kelvin Kwok

2. Fiduciary Obligations: Justifying and Limiting Loyalty (24 months), Rebecca Lee

3. Reforming Anti-Dilution Law in China (24 months), Haochen Sun

4. Path Dependence and Interconnected Institutions: Implications for Legal Transplantation (24 months), Guanghua Yu

5. Implications of the New Round of Legal and Market Reform in China (30 months), Xian Chu Zhang

6. Eastern Values in International Arbitration: An Initial Exploration (36 months), Shahla Ali

7. Exercise of Legislative Power by the Executive (36 months), Jianlin Chen

8. A Comparative Legal Study on Tackling Cyberbullying and Protecting Children's Rights (24 months), Anne Cheung

9. Financial Planning for Mental Incapacity: A Tale of Two Confucian Cities (24 months), Lusina Ho

10. Survey of Public Opinion Toward Lesbian, Gay, Bisexual and Transgender People in Hong Kong (24 months), Kelley Loper

11. Minority Shareholder Remedes in Hong Kong: Evolving Dispute Resolution Approaches (24 months), Katherine Lynch

12. The Interrelation between Case Law and Legislation in Aspects of Commercial Law (36 months), Ji Lian Yap

13. A statistical study of Constitutional and Administrative Law judgments from 1997 - 2012 (24 months), Antonio Da Roza

14. The Tightening of Transparency Requirements in the International Tax Regime and its Impact on Mainland China and Hong Kong (15 months), Doreen Qiu

15. Freedom of information and privacy protection in China: resolving conflicts and promoting accountability (18 months), Clement Chen

16. The Delicate Art of Med-Arb and Its Future Institutionalisation in China (18 months), Weixia Gu.

Articles in the Oxford Journal of Law and Religion

Oxford Journal of Law and Religion

Vol. 3, Issue 3, October 2014

"Pluralism, Religion, and the Moral Fairness of International Law"

James Fry, pp 393-418

Abstract: This article criticizes Thomas Franck’s theory of moral fairness for refusing a possible voice for religion in the fairness discourse. After deconstructing the theory and explaining its relationship to Rawls's notion of overlapping consensus, this article explores how religion plays a role with the implementation of international law. This article concludes by observing how the current inclusion of religion at the implementation stage injects a measure of regionalism and pluralism into the discourse. Such regionalism and pluralism alleviate the tension between universalism and localism associated with globalization and improve social stability throughout the world.

"Religious Exemptions in England"

Ernest Lim, pp 440-461

Abstract: This article argues that there are key issues comprising theoretical and institutional matters arising from the questions of whether courts should exempt religious conduct from laws of general applicability, and how courts should strike the balance between religious freedom and equality policies, which proponents of religious exemptions have neglected and it suggests ways in which these issues may be addressed.

Patent and Innovation - Interview with Dr Yahong Li

Can patents promote innovation?  This is a topic of heated debate. On 15-16 January 2015, the Faculty held the HKU-HKIPD IP Forum 2015 to discuss some of the major issues surrounding this debate. International and local patent law scholars and practitioners explored patent law reform around the world and Hong Kong's proposed change to introduce an "original grant patent" system.  Would these reforms be conducive to innovation?  Dr Yahong Li organised the event and in this interview shares with us some of her thoughts on the conception and significance of the forum.  

L-R: Dr Li, Judge Rader, Dr Chambers

1. What inspired the forum? What were you hoping to achieve?

The idea of organising the public lecture for Judge Rader and the IP Forum was conceived on 18 July 2014 when I met Dr. Jasemine Chambers who is a former law clerk to Judge Rader and a former official of the US Patent and Trademark Office (USPTO). During the meeting, we discussed the possibility of organising a public lecture for Judge Rader in Hong Kong as we believed that Judge Rader’s 24-year experience, both as a judge and a Chief Judge, in the US Court of Appeals for the Federal Circuit (CAFC) which is a specialised patent court, would benefit the on-going discussion of Hong Kong’s patent system reform. 

     By way of background, the current patent system in Hong Kong is a re-registration system under which applications for Hong Kong patents are substantively examined by one of three designated patent offices in China, the EU and the UK, and then the granted patents are registered in Hong Kong. In October 2011, the Hong Kong government initiated a public consultation on the feasibility of changing this system to an “original grant patent” (OGP) system allowing Hong Kong patent applications to be locally examined and granted. Currently, no decision has been made as to how this proposal is going forward.

     To maximise the benefit of Judge Rader’s visit, we decided to hold an IP Forum on Patent and Innovation, following Judge Rader’s public lecture, which would bring international and local patent officials, academics and practitioners together to explore the patent law reform around the world and Hong Kong’s proposed OGP system, and to discuss how theses changes may be conducive to innovation. 

     The idea of organising such an event was supported by the Dean of HKU Faculty of Law, Professor Michael Hor, HKU Associate Vice-President and Director of HKU Technology Transfer Office, Professor Paul Cheung, and the Director of the Hong Kong government's Intellectual Property Department (HKIPD), Ms. Ada Leung. As a result, the event was co-organized by the three institutions. I am very grateful that Professor Hor, Professor Cheung and Ms. Leung not only agreed to provide funding and other forms of support but also delivered opening remarks for the event.

Delivering the opening remarks

2. What were some of the highlights from the event?

There are a few things about the event that are worthy of mentioning. First of all, it was the first time that the Faculty had ever co-organised an IP event with the HKIPD. It brought a rare opportunity for government officials in charge of IP affairs and IP academics/practitioners to openly exchange views on local patent reform. 

     Secondly, the event started with Judge Rader’s inspiring overview of patent law and innovation, followed by the next day IP Forum consisting of two panels, one focusing on worldwide patent law reform, and the other on Hong Kong patent system. This setting provided audiences with a general appreciation of the relationship between patent and innovation, a broad picture of worldwide patent law reform in relation to innovation, and an in-depth understanding of the issues involved in Hong Kong’s proposed OGP system, and whether the reform will promote innovation in Hong Kong.

   Thirdly, the audiences’ participation and responses were unexpectedly enthusiastic and positive. The public lecture and the IP Forum together attracted over 200 people, which is phenomenal because patent law has never been a popular topic as fashion and finance in Hong Kong. Audiences showed great interest in both Judge Rader’s public lecture and the presentations of IP Forum, and actively engaged in discussion with many good questions and thoughtful comments. 

Prof Cheung presenting his pen

The four-hour forum proved to be too short, and many expressed their wish to see more of this kind of events being organised in Hong Kong. 

     Lastly but not the least, at the end of the event, Professor Paul Cheung surprised everyone with a presentation of a pen made by himself to Judge Rader, demonstrating not only his appreciation for Judge Rader’s speeches but also his personal commitment to technology innovation.

3. What were some of the major issues discussed and were any new insights gained from the discussion?

The following account is from my recollection of the event, therefore may contain some errors and inaccuracies, which are totally mine and not that of the speakers.

     In his public lecture entitled, “Patent and Innovation: A US Judges’ Perspective”, on January 15, which was moderated by Professor Paul Cheung, Judge Rader focused on the importance of patents in pharmaceutical innovation. He believed that a patent system not only encourages innovation but also makes the invention into useful products because getting the tools and products in peoples’ hands is a complicated and costly process. He pointed out that, according to WHO’s statistics, among 130 essential drugs for public health related diseases only 13 of them are under patent protection right now, demonstrating that patent is not a major factor for inaccessibility of essential drugs in developing countries and the least developed countries. But on the other hand, almost all of the 130 drugs were once under patent, showing a strong correlation between patent and drug innovation. He used the discovery of Penicillin as an example to show that, without a patent protection for the new invention, the commercialisation of a drug may be delayed and many patients may die due to the lack of the drug capable of curing their diseases. He pointed out that relying on government funding for research and commercialisation is not realistic because, for example, US government’s funding for research is less than 10 per cent. Lastly he called for international efforts in IP protection and criticised the increasing use of compulsory licensing to lower drug price by some of the developing countries such as Brazil. He said that AIDS is a human disease, thus every country is in the battle against it. He asked, “If Brazil quits from the battle and withdraws the resources in finding the cure, should all other countries quit and withdraw as well?” 

     Many interesting questions were raised and discussed in the Q&A session, for example, how to assess the US Supreme Court’s decision on the patentability of genes in the Myriad case, non-practicing entities versus patent troll, the impact of judicial uncertainty in patent rulings on innovation, whether patents impede pure research, how should drug prices be decided, etc. 

     In the second-day IP forum entitled, “Patent and Innovation: Worldwide Patent Law Reform and Hong Kong’s Response”, Judge Rader gave a keynote speech on “US Patent System and the Lessons to Hong Kong”. He highlighted the importance of patent quality and urged Hong Kong government to adopt an outward-looking approach to cooperate with other patent offices in the world in examining patent applications if the OGP system is established. He also emphasised the role of patent litigation and arbitration in patent system, and believed that these, rather than patent law reform, would bring the patent system into life.

Panel One speakers

  The first panel of the IP forum, chaired by Dr. Marcelo Thompson, who is Deputy Director of HKU Law and Technology Centre, focused on worldwide patent law reform. Dr. Jasemine Chambers, of Counsel in Wilson Sonsini Goodrich & Rosati, P.C. and a former USPTO official, started with a comprehensive introduction to the America Invents Act (AIA). She reviewed AIA’s long process of adaptation (through five Congresses and 10 years 2003-2013), and summarised some of its goals such as encouraging innovation, creating new jobs, reducing patent backlog and improving patent quality, more certainty for patent rights, and reducing the litigation cost and offering administrative measures as an alternative to litigation which is cheaper and faster. Dr. Chambers’ presentation was followed by mine focusing on China’s patent law reform. My major argument was that the previous patent law reforms in China had markedly promoted patents in numbers but not so much in true innovation. The pending and future patent law reform should focus on the aspects that can truly promote innovation such as having wider scope of patent subject matter and higher patentability criteria, adopting Bayh-Dole style legislation to encourage commercialisation of public-funded inventions, limiting the use of compulsory licensing, and establishing a centralised patent appellate court, among others. The strategy of becoming a top-filler of patents in the world but ignoring patent quality is wrong and would be counterproductive to innovation. The last speaker in this panel, Professor Bryan Mercurio, Associate Dean of the Faculty of Law of Chinese University of Hong Kong, discussed how to amend TRIPS to promote innovation. He argued that innovation should be the core of TRIPS agreement, but currently the word “innovation” only appears once in TRIPS (e.g., in Article 7). He proposed to re-evaluate the issue whether TRIPS promotes innovation. More specifically, he proposed to (1) add more details to Article 27.1 so to promote rather than hamper innovation, (2) review current patent scope and duration, (3) strengthen enforcement, and (4) encourage more debate on the relationship between patent and innovation. 

Panel Two speakers

     The second panel of the IP Forum, chaired by Mr. Thomas Tsang who is HKIPD Assistant Director (Patents), was completely devoted to the Hong Kong patent system, with particular attention on the proposed OGP system. Mr. Tim Hancock, President of Asian Patent Attorneys Association Hong Kong Group, talked about how Hong Kong’s industrial and IP environment have changed from the 1970s when 50 per cent of UK designs were registered by Hong Kong designers, and practitioners in Hong Kong would not deal with IP cases, to current situation under which IP matters are generally more on the practitioners’ agenda. He believed that there was a need to regulate patent attorneys in Hong Kong. Ms. Charmaine Koo, Partner and Co-Head of Deacons' IP Department, presented pros and cons of an OGP system in Hong Kong. She argued that, without OGP the current Hong Kong patent system does not match its status as a financial centre; OGP may encourage innovation and promote the economy in Hong Kong; OGP can help local patent practitioners in their career and provide more opportunities for university graduates with science backgrounds; and local people can access local experts. On the other hand, she pointed out that OGP may not be so beneficial because Hong Kong is a small place and the Hong Kong market is not always on the list of the companies due to budget constraint, and that with OGP costs of filing in Hong Kong will increase and there will be a need for outsourcing the patent examination. Ms. Alice Lee, Associate Professor and Associate Dean at HKU Faculty of Law, questioned whether the discussion of patent reform should focus more on fostering a liberal education and incubating an environment for innovation, rather than on building the local patent profession and creating career for graduates. Mr. Kenneth Yip, Vice President of International Intellectual Property Commercialisation Council (IIPCC) raised some doubts on having an OGP system in Hong Kong because he believed that Hong Kong does not need a separate patent review system as it is just another city in China, that the purposes of people filing patents in Hong Kong are just to prevent competition, to raise fund, to satisfy their ego and to do marketing, not for innovation, and that having the OGP would shift the burden from the Hong Kong government to local inventors and increase the costs for patenting. Lastly, another VP from IIPCC and part-time teacher at HKU, Mr. Ronald Yu, discussed the issue involving patent troll and the lessons Hong Kong should learn from the experiences in other jurisdictions. 

4. How do you see the Faculty research/scholarship in this area going forwards?

The Faculty has a relatively strong team on IP law, patent law in particular, as we have three full time faculty members, Miss Alice Lee, Dr. Sun Haochen and myself, specialising in Hong Kong IP law, PRC IP law and international IP law respectively, and several visiting and adjunct faculty members such as Professor David Llewellyn, Mr. Kenny Wong and Ms. Pancy Fung teaching other IP law courses, which more or less include patent component. In addition, the course of “patent law” taught by part-time teacher Mr. Ronald Yu, and the course of “IP, Innovation and Development” taught by myself focuses primarily on patent law and the interplay between patent and innovation.

     As to research and scholarship in this area, I had received grants from the Hong Kong government and HKU to conduct research on patent protection for software, biotechnology and pharmaceuticals, which resulted in a number of publications including a book, Imitation to Innovation in China, the Role of Patents in Biotechnology and Pharmaceutical Industries (Edward Elgar, 2010). In addition to PhD research on other IP law areas such as trademark and copyright, several PhD and MPhil students under my supervision have also successfully completed their dissertations on difficult patent issues such as compatibility between patent and traditional Chinese medicines, patent as an instrument for green technology, patent protection for telecommunications, and inventiveness criteria in patent law. 

    These teaching and research activities have laid a strong foundation for the Faculty to move forward to establish itself as an IP research centre, and further to incorporate our research and scholarship with the development need of local IP community to help Hong Kong become a regional IP centre. The January forum, which I intentionally titled as “HKU-HKIPD IP Forum 2015”, is a very good start and could be organised annually to cover any IP issues confronting Hong Kong SAR, as Judge Rader wished in his email after he returned to the US, 

"I wished to send a heart-felt THANK YOU for all of your kindness to me during my stay in Hong Kong. From my perspective, your event at HKU was a rousing success. Several people conveyed to me that they hope to enjoy many similar conferences in the future. Indeed I am one of those who think that you achieved a great deal with this conference and I hope that it is the first of what could become an annual Hong Kong IP Conference. I would love to participate again."

From Kenya to HKU and Back - Erick Komolo (PhD candidate) Profiled in SCMP

Source: SCMP (Jonathan Wong)

"Kenyan PhD student in Hong Kong helps poor kids learn back home"

South China Morning Post

Gloria Chan

24 February 2015

Erick Komolo is a testament to the transformative power of education. Now the doctoral student has started a trust to give Kenyan children the same chance to escape poverty

As a poor village boy in western Kenya, Erick Komolo walked 10km a day to and from primary school. By the end of his final term his toenails were so worn down from the daily trek that they have never grown back, he says. But it was all worthwhile. "I'm better-off by far than anyone else in my village," he says, referring not to financial gain but to opportunities for a decent education.

     Komolo has travelled a long way from those dusty paths in his rural homeland. Now in his fourth year of doctoral studies at University of Hong Kong, researching international trade law, the 31-year-old has experienced first-hand how education has the power to transform lives... 

    Komolo, who decided to pursue his PhD in Hong Kong in 2011, thanks his father, a retired primary school teacher, for insisting that his 15 children go to school regardless of the family's circumstances...

     Another scholarship followed, allowing him to spend a year at the University of Kent in southern England, where he earned a master's degree in law. Returning to Kenya, he became a barrister in the capital, Nairobi, specialising in human rights.

     One of his most memorable cases was the Federation of Women Lawyers versus the president of Kenya, he says. "We challenged the president's decision to appoint fewer female judges to Kenya's Supreme Court. That case eventually led to an increase in the number of women judges in Kenya. That's important for a country where women are gravely marginalised."

     A year later, Komolo was again gripped by the urge to tackle a new challenge. "I was attracted to Asia, and Hong Kong in particular. I don't know why but there was something refreshing about it. I went to cybercafes in Nairobi and spent hours on Google. That's how I ended up applying to HKU. I'm glad I got a professor with similar research interests," he says...
Click here to read the full article.  Erick is completing his doctorate in the Faculty of Law on the regulation of marine fisheries in Kenya under the supervision of Dr Shahla Ali.

Lee Mason on Hong Kong's New Law on Contracts (Rights of Third Parties)

"Contracts (Rights of Third Parties) Ordinance: Legislative Reform of the Doctrine of Privity"

Hong Kong Lawyer

February 2015, pp 44-48

Lee Mason

On 26 November 2014, the Legislative Council passed the Contracts (Rights of Third Parties) Ordinance (the “Ordinance”) which enables contracting parties to confer enforceable contractual rights on third parties and, as such, reforms the current law as governed by the doctrine of privity. Given that almost every other common law jurisdiction already has third party contractual rights legislation in place, it seems that the Ordinance is long overdue. Although the Ordinance is yet to be brought into force, it is useful to now prepare for its inception by taking a closer look at its key aspects and considering how it differs from the UK’s Contracts (Rights of Third Parties) Act 1999 (the “1999 UK Act”), legislation on which the Ordinance is substantially modelled...  Click here to read the full article.  In the same issue of the Hong Kong Lawyer, alumnus Ludwig Ng (LLB (Hons) 1986, PCLL 1987, LLM 1997) writes on the question, "Is Google Subject to the Hong Kong Court's Defamation Jurisdiction?".

Kung Hei Fat Choy 2015

"Year of the Ramlette" by Richard Cullen

To mark the Chinese New Year, I share with you Professor Richard Cullen's annual new year drawing, "Year of the Ramlette".  Professor Cullen's tradition of drawing his annual cartoon has been going on for over 20 years.  He has not missed a year from when it started in 1994 (Year of the Dog).

HKU Legal Scholarship Blog wishes everyone a happy and healthy Year of the Ram - or is it the Goat or the Sheep?!?  See this SCMP article for the debate.

Getting Serious About a Suspect's Right to Timely Legal Advice

"Getting serious about a suspect's right to timely protection"
Access to immediate legal protection must be provided under Article 35
South China Morning Post
17 February 2015
Simon Young
Everyone in Hong Kong has a constitutional right to a "choice of lawyers for timely protection of their lawful rights and interests" (Basic Law, Article 35). Is the right fully complied with when a police officer hands a suspect the Law Society's list of solicitors and says, "Choose!" If the suspect asks "Who can I call for free legal advice?", the answer will be "Try your luck with the list", whatever the hour or day.
     The Law Society has a free legal helpline but it works on the basis that a lawyer "will contact you within three working days"; not much use for someone who needs legal advice immediately. It only takes a few minutes for an officer to embark on an interview that leads the suspect to making ill-informed statements damaging to his interests at his trial. This is known as self-incrimination.
     Had there been timely access to a lawyer, the suspect would be told to remain silent or to provide a statement favourable enough to be used at trial without having to face cross-examination by the prosecutor.  Whether to remain silent or to give a statement will all depend on the circumstances but the lawyer will know best...  Click here to read the full article.

The Big Idea: Marco Wan on the Trials of Oscar Wilde

The Big Idea
Presenter: Prof. Douglas Kerr
Programme 60: The Trials of Oscar Wilde

In the first five years of the decade of the 1890s, Oscar Wilde was a celebrity artist who dominated the literary and cultural scene of London. In 1895, he had two smash successes playing in the fashionable West End, An Ideal Husband and The Importance of Being Ernest. But after a series of sensational trials that year, he was sent to prison for two years. “When the verdict was announced,” the young poet W. B. Yeats was to remember, “the harlots in the street outside danced upon the pavement.” Wilde emerged from prison a broken man, and died in poverty and shame in 1900. His downfall was not just a personal scandal and tragedy, but had a significant effect on social, cultural and sexual life, and profoundly altered the status and the style of the arts, and the public perception of the artist, in late Victorian England. The trials of Oscar Wilde were legal events with repercussions in the understanding of morality, literature, gender and sexuality, class, fashion, and of course the law itself. Oscar Wilde – gay, Irish, and an artist – ended up an outcast and pariah, after a spectacular downfall which he precipitated himself. 

     Discussing the trials of Oscar Wilde with Douglas Kerr are Dr Jessica Valdez, of Hong Kong University, a specialist in the literature of the Victorian age, and Dr Marco Wan, Associate Dean of Law at HKU.  Dr Wan is the editor of Reading the Legal Case (Routledge 2012) and his other writings on Oscar Wilde have appeared in the Oxford Journal of Legal Studies and Law, Culture and the Humanities.  Click here to listen to the programme.

CL Lim on the recent US suit against China in the WTO

"U.S. challenges Chinese exports subsidies"
Reuters (Washington)
12 February 2015

The United States on Wednesday launched a legal challenge to Chinese subsidies supporting billions of dollars of exports across a wide swathe of industries from steel to shrimp.  U.S. Trade Representative Michael Froman said Chinese companies in designated export hubs benefited from free or subsidized services, cash grants and other incentives which gave their products an unfair advantage.  The request for consultations, lodged on Wednesday, is the first step in a World Trade Organization dispute. The administration has also been trying to convince lawmakers, in particular Democrats, to support a new 12-nation Asia-Pacific trade deal and a bill to streamline Congressional passage of trade deals... Chin Leng Lim, a law professor at the University of Hong Kong, said Washington's case fitted a rising trend of using anti-subsidy action as the new trade weapon of choice. As China prepares to get market economy status in 2016 under its WTO accession agreement, it will be harder to bring anti-dumping cases against Chinese companies. "When the allegation is unfair subsidization, you've got to remember that you're not just going after companies abroad for behaving unfairly. You're going after an entire foreign economy for being run differently," Lim said.  Click here to read the full article.

Emily Lee on Regional Conflict of Laws and Hong Kong-China Insolvencies

"Securities & Futures Commission v China Metal Recycling (Holdings) Limited: Regional Conflict of Laws, Judicial Recognition and Hong Kong-China Cross-Border Insolvencies"

Emily Lee

in JP Sarra & B Romaine (eds), Annual Review of Insolvency Law 2014

(Toronto: Carswell, 2015), pp 599-623

Abstract: Using the recently adjudicated landmark case in Hong Kong of Securities and Futures Commission v China Metal Recycling (Holdings) Limited as a launching board this article discusses and analyzes the complexities surrounding cross-border (corporate) insolvencies (“CBIs”) between Hong Kong and mainland China (HK-China CBI). Going forward, HK-China CBI will have a direct bearing on decisions made by Hong Kong and Chinese courts; since they are already increasingly requested to adjudicate on the same issues during a corporate insolvency, a new mechanism is called for in order to provide a practical and economically viable resolution to the regional conflict of laws issue arising from Hong Kong and mainland China having different insolvency laws in spite of Hong Kong being a part of mainland China, although a special administrative region within it. A new mechanism should focus on the judicial recognition of judgments and court orders concerning insolvencies of companies with establishments in both Hong Kong and mainland China; and if a new mechanism is properly implemented, it can more effectively and holistically facilitate resolution of the regional conflict of laws issue that typically arise during the insolvency procedure of a Hong Kong-listed company with subsidiary companies located in mainland China. Without such a mechanism in place, the provisional liquidators appointed in Hong Kong will need to devise a more convoluted resolution method in order for them to be approved by the Chinese court before they can take control of the Chinese subsidiary companies. Moreover, without a new mechanism, there will be duplication of insolvency procedures and costs and there may be incentives for forum shopping.  Click here to download the chapter.

New Publication on UK Directors' Disqualification Regime

"Directors' duties and liabilities: Disqualifying ‘unfit’ directors at banks? Political rhetoric and the directors’ disqualification regime"
John Lowry and Rod Edmunds

in Iris H-Y Chiu (ed), The Law on Corporate Governance in Banks

Edward Elgar, 2015, pp 75-98

Abstract: The purpose of the chapter is to assess the general scope of the UK’s directors’ disqualification regime, particularly section 8 of the Company Directors Disqualification Act 1986 which provides for the disqualification of ‘unfit’ directors. The shortcomings of the regime are assessed together with the current proposals for its reform which are prompted by the desire to facilitate the disqualification of errant senior bankers such as those who captured the attention of the media and, therefore, the wider public. The most prominent amongst these are HBOS’s Andy Hornby, Sir James Crosby and Lord Stevenson, together with the former CEO of the Royal Bank of Scotland (RBS), Fred Goodwin. The chapter first considers the particular circumstances which led to the taxpayers’ bailout of the RBS and HBOS. The focus here is on the culpability of the senior executives of both institutions rather than upon the other contributing factors, such as the shortcomings of the regulatory regime, which led to the failure of the banks. The aim is to show that in the light of what happened in RBS and HBOS, the current timidity over the initiation of disqualification proceedings under section 8, seemingly prompted, as will be seen, by misgivings over whether there is sufficient evidence against the directors to at least establish a prima facie case, may be far too pessimistic. Second, it assesses the jurisprudence surrounding disqualification on the ground of ‘unfitness’. It will show that the substantive terms of this basis for disqualification contains ample scope to address the conduct of senior executives at HBOS and RBS, not least because the courts have refused to strait-jacket the test of unfitness with rigid categorisations. It concludes by considering recent political initiatives aimed at providing alternative routes for holding senior bankers liable for reckless behaviour.  Professor Lowry is Chair of Commercial Law.

The 40% and 50% Safeguards in Hong Kong's Suffrage Reform

Gov't's Consultation Document

The 40% Safeguard

Fast forward to March 2017 and imagine tomorrow’s universal suffrage vote results in the following vote count: Candidate “A” gets 100,000 votes, Candidate “B” gets 200,000 votes and Candidate “C” gets 300,000 votes. Should “C” be declared the next Chief Executive? He has the most votes. But what if there were 3 million registered voters, meaning that only 600,000 or 20% of all voters bothered to vote. 2.4 million voters, for one reason or another, decided not to vote. Maybe many of them did not like any of the candidates. Should “C” still be declared the Chief Executive to govern over the whole of Hong Kong for the next five years? Should there be some minimum voter turnout rule, like 40% of all registered voters, before we can say that the final election result is legitimate and acceptable? 40% is a fair threshold given that the turnout rates for the 2012 Legislative Council elections were 53%, 70% and 52%, respectively, for the geographical, traditional functional and super functional constituencies.

The 50% Safeguard

Take another example. This time imagine 50% of all registered votes come out to vote, but the results end up like this: Candidate “D” gets 400,000 votes, Candidate “E” gets 500,000 votes and Candidate “F” gets 600,000 votes. Should “F” be declared the next Chief Executive? She received only 40% of all votes cast; 900,000 or 60% of the voters voted for another candidate. Should she still be the Chief Executive? Perhaps the best way to deal with this problem is to have a second round of voting between only Candidates “E” and “F”, eliminating Candidate “D” because he had the fewest votes in the first round. In the second round, say Candidate “E” gets 900,000 votes and Candidate “F”, by sheer luck, gets 900,010 votes. Should “F” be declared the Chief Executive? I definitely think so because “F” has managed to obtain more than 50% of all the votes cast. Indeed the second round of voting could be avoided if Candidate “F” managed to obtain 750,000 votes or more (being 50% or more of the vote share) in the first round of elections.

Why the Safeguards are Needed?

These two examples are meant to illustrate situations where universal suffrage produces problematic election results unless you have safeguards to fix or avoid the problem. What exactly is the problem illustrated by these examples? They show that if you simply apply a “most votes” rule to determine the winner, you may end up with a leader who does not have the people’s mandate to be their leader. In Hong Kong after the imposition of the restrictive nomination conditions by the National Peoples’ Congress Standing Committee (NPCSC) on 31 August 2014, it becomes imperative to ensure that the leader has a proper mandate from the people. Insisting upon a leader with at least 50% support from voters in an election that has at least 40% of the registered voters participating are not unreasonable safeguards if we are concerned about the legitimacy of future Chief Executive leaders and their accountability to Hong Kong people.

Blank Votes and the 50% Safeguard

Now consider a third example. Candidate “G” gets 300,000 votes, Candidate “H” gets 600,000 votes and Candidate “I” gets 1 million votes. It looks like “I” should win, but what if there were also 200,000 voters who cast blank votes indicating that they supported none of the candidates. Should “I” still be the elected Chief Executive? Not if you accept the 50% safeguard applied in the second example. Candidate “I” failed to obtain a majority (50% or more) of supporting votes from all votes cast. He only obtained 48%. Like the second example, this should move the process to a second round of voting between only Candidates “H” and “I”. In the second round, given that voters can still cast blank votes, the winner must get a majority of supporting votes before he or she will be declared the winner. For example, if, in the second round, Candidate “H” gets 700,000 votes, Candidate “I” gets 1.1 million votes, and 300,000 voters cast blank votes, then “I” will be declared the winner because he managed to obtained 55% of all votes cast, including blank votes. But, if “H” managed to get 800,001 votes, then “I” would not be elected because he would have just failed to obtain the 50% support when the 300,000 blank votes are also counted against him. One might question the wisdom of such a result, but the answer goes back to the fundamental idea that if the central government is to have such a controlling influence over the nomination process then we must insist upon having an elected Chief Executive that has at least the majority support of the voters. If the number of blank votes cast in the first round of voting is quite significant, e.g. accounting for more than 50% of all votes cast, then there is probably no point in holding a second round of voting as the public’s will is clearly in favour of the nomination process beginning anew.

Starting Again

If the nomination process must begin again (whether because of an insufficient voter turnout, blank votes exceed more than 50% of the vote share, or no candidate is able to achieve 50% or more support from voters), there are real concerns about a political vacuum if by 1 July a new Chief Executive has yet to be elected. The best solution is for the existing Administration to remain in power until a new Chief Executive is validly elected and has formed a new Administration. It is doubtful that this can be implemented wholly by local legislation and likely that the NPCSC will need to interpret Article 46 of the Basic Law such that the term of office of the Chief Executive runs seamlessly with the term of office of a newly elected Chief Executive, even if the term itself exceeds five years.

Overriding Aim of the Safeguards

It must be stressed that the 50% and 40% safeguards discussed here are not intended for use in practice. They are intended to prevent abuse and manipulation of the nomination system. The system will be abused if the will of the nominating committee is influenced to such an extent that all the nominated candidates are patriotic to the central government but have little or no public support amongst the Hong Kong electorate. The safeguards are intended to influence central government and nominating committee choices in deciding which candidates to support. The candidates favoured should have a fair degree of public support, lest the safeguards be triggered to force a restart of the nomination process. The safeguards restore the balance after the NPCSC’s August decision and serve to ensure that the elected Chief Executive is truly accountable to both Hong Kong and the central government in accordance with the letter and spirit of Article 43 of the Basic Law.  Written by Simon Young.  The Chinese version of this article was published in Ming Pao on 10 February 2015.

Cullen Awarded "Top 20 Economic Essays of 2014" Honour

Congratulations to Professor Richard Cullen, whose May 2014 article "Land Revenue and the Chinese Dream" was recognised by the China Policy Review as one of the "Top 20 Economic Essays of 2014". The China Policy Review is a monthly journal of the State Council's Development Research Centre (DRC) in Beijing. The article was published in two parts in the May and July issues. It will now also appear in the 2014 Almanac of China's Economy, an important annual publication that has been recording the changes in China's national economy since 1981. The Almanac's editorial board "consists of government department heads -- at the national, provincial and municipal level -- and prominent economists. Its editors-in-chief are officials of the DRC." (China Daily, Sept 2013). 

     Abstract: President Xi, Jinping has defined the Chinese Dream as: "National rejuvenation, improvement of people’s livelihoods, prosperity, construction of a better society and military strengthening." For any Nation, if there is a serious ambition both to define a collective dream and then to work steadily towards its achievement, a crucial factor in successful implementation is soundly based, long-term, significant public funding. A strong and fair Market Economy can help move such a dream forward – but the foundations must be built by Government. China is, potentially, particularly well placed to underpin funding of Government policies directed towards achieving the Chinese Dream using a most powerful revenue source effectively (and foolishly) long-ago discarded throughout most of the Developed World as a key source of public funding: Land Related Revenue (LRR). 

     I believe that the relevance of this argument is strengthened still further by the unprecedented level of urbanisation now underway in China. Since the “Open Door” policy commenced over 30 years ago China’s urban population has risen by 500 million and by 2030, it is estimated that around 70% of China’s population – about 1 billion people – will be urbanised. Moreover, China has a close at hand, tried and tested, overall, deeply successful working model to refer to. Hong Kong, now the HKSAR, has done a better job of using LRR than any other single jurisdiction over the last 150 years plus. Professor Cullen has published a fuller article (reported earlier in this blog) from the same research in The Asian Business Lawyer.

Academic Freedom and HKU (RTHK Radio Backchat)

"Academic Freedom"
Backchat, RTHK Radio 3
6 February 2015

Backchat guests discussed the recent attacks by pro-Beijing newspapers in Hong Kong on HKU's Faculty of Law and its former Dean. Are pro-Beijing forces trying to stop his advancement? If academics become involved in politics, should they face the consequences?  The panel consisted of Profs Michael Davis, Carole Petersen, William Richardson School of Law, University of Hawaii and formerly Director of the Centre for Comparative and Public Law, Surya Deva, School of Law, City University of Hong Kong and David Zweig, Director of Center on China's Transnational Relations, Division of Social Science, Hong Kong University of Science and Technology.  The hosts were Hugh Chiverton and Danny Gittings (PhD Candidate).  Click here to listen to the programme.

Subsidies to Big Oil Unjustified and Need to Stop

Inna Amesheva, PhD candidate

"The Fossil Fuel Industry's Continued Chokehold on State Resources"

Eco-Business

2 February 2015

Inna Amesheva

According to International Energy Agency (IEA) figures, in 2012 global fossil fuel subsidies amounted to $544 billion. On the other hand, the financial support provided to the renewable energy sector was under 20 percent of that, or $101 billion. The estimate of the International Monetary Fund (IMF) for oil, coal and gas subsidies is much higher, putting the total nearer $2 trillion. The differences stem from the uncertain definition of what a ‘subsidy’ represents, but in any case, the figures are striking. Taking a national perspective, in the United States alone, reliable assessments of yearly fossil fuel subsidies range from $10 billion to $52 billion per annum. This number exceeds by 5-6 times the amount spent on renewable energy generation.

     This substantial chunk of the government’s revenue would be much better spent financing socially beneficial projects such as building new schools, hospitals and badly-needed infrastructure. In addition, fossil fuel subsidies, if diverted to the renewable energy sector, would serve a longer-term, more sustainable purpose that would not only provide for a cleaner environment, but would also reduce dependence on ‘dirty’ fuels that exacerbate the effects of climate change....  Click here to read the full article.  Ms Inna Amesheva is a PhD candidate in public international law in the Faculty of Law, supervised by Dr. James Fry.  She wrote this article as part of the requirements of Farzana Aslam's LLM course, Business and Human Rights.