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Taiwan-China arbitration may extend beyond HK

TAIPEI--Arbitration over person-to-person business disputes between Taiwanese and Chinese might be allowed to take place in locations other than Hong Kong under the terms of a proposed China-Taiwan investment protection pact, a source familiar with the matter said Wednesday.

Taiwan expects to finalize the investment pact in the eighth round of cross-strait negotiations between Chiang Pin-kung, chairman of Taiwan's Straits Exchange Foundation, and Chen Yunlin, president of China's Association for Relations Across the Taiwan Straits, expected to start in late June.

The source, who spoke on condition of anonymity, said such arbitration should be held in a third place other than China or Taiwan, but added that this location “might not be limited to Hong Kong,” because arbitrators in the special administrative region might not be able to handle all the disputes between businessmen on each side of the Taiwan Strait.

He added that from a legal perspective, Taiwanese negotiators will insist that arbitration be allowed to take place in other countries, such as Singapore or the United States, as long as investors from both sides reach agreement beforehand and state it in their contracts.

Lai Shin-yuan, head of Taiwan's Mainland Affairs Council, said on her Facebook page June 9 that more than 65 percent of the investment disputes Taiwanese people face when doing business in China are of a person-to-person nature.

She said that although most international investment agreements do not involve a person-to-person arbitration mechanism, considering the special cross-strait situation, Taiwanese negotiators have proposed including person-to-person dispute arbitration in the investment protection pact.

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