Given its massive scale spanning from Asia to the Middle East, Europe and Africa, any cross-border project or trade along the Belt and Road faces enormous complexity. Now, Hong Kong’s legal services are exploring technology to simplify contracts.
Whether it is trade finance, cross-border transactions or complex contracts involving infrastructure, any move to speed up and simplify business flows benefits the bottom line.
In the six years since the Belt and Road Initiative was unveiled, much attention has focused on big infrastructure projects. Now the Digital Silk Road’s rapid adoption is dramatically changing the way business is conducted, helping to reduce costs and risks, in addition to finding workable solutions to new challenges in global trade.
Not all of these solutions are being nurtured within fintech hubs, corporate incubators or even via smart start-ups.
Hong Kong’s professional services are internationally recognised as a neutral forum with connections, expertise and knowledge. Their ability to span “one country, two systems” in law is a major drawcard in Hong Kong’s development as a deal-maker for Belt and Road projects.
The city’s robust legal services sector includes more than 10,000 lawyers representing approximately 900 firms. Many of these are able to operate across multi-jurisdictions and have multi-disciplinary skills. Nearly 1,500 are registered foreign lawyers representing 31 jurisdictions, and more than 80 firms in Hong Kong are top-tier international partnerships.
Recently an innovative group of Hong Kong professionals with legal and IT expertise have volunteered their services to create the eBRAM (electronic business-related arbitration and mediation) Centre to streamline legal processes. This unique non-profit organisation was founded by the Law Society of Hong Kong, the Hong Kong Bar Association, the Asian Academy of International Law and the research and development arm of Logistics and Supply Chain MultiTech R&D Centre (LSCM).
The rise of lawtech
Protecting business interests with contracts or arbitration requires all parties to clearly understand their obligations, as well as taking into account local, and in many cases, international legal requirements. The process is time consuming and costly to all parties particularly if processes are delayed or when disputes arise.
By combining artificial intelligence (AI), machine learning, big data, blockchain, cloud storage and smart contracts, eBRAM’s developers hope to create an electronic platform that is both secure and cost-effective, which can also cut through bottlenecks in contracts and arbitration.
With a background in both computer science and law, Nicholas Chan, Chairman of eBRAM Centre and Partner at Squire Patton Boggs, says the two disciplines are remarkably similar. “A good contract is one that doesn’t have ambiguities, and computer programs must be defined like a legal document.”
Nicholas Chan, eBRAM Centre
Advantages for Asia
Chan is confident that the eBRAM platform will improve cross-border collaboration and facilitate trade more effectively than traditional methods. “Time is money and lawyers charge by time. But we can do a better job using lawtech,” Chan says.
In deals involving Belt and Road projects, eBRAM aims to:
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Facilitate deal-making and cost-effectively prevent disputes across parties and jurisdictions
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Serve as an international platform for dispute resolution
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Use technology to prevent disputes where one of the parties is not located in Hong Kong
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Protect personal data and confidentiality
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Provide domain-specific language translation technology
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Harmonise rules of engagement in international business deals
Breaking language barrier
One specific challenge that those doing deals along the Belt and Road will need to overcome is language. According to Chan, there are more than 1,000 languages and dialects used in Belt and Road countries. This leaves plenty of scope for legal documents to become “lost in translation” or for disputes to arise about specific legal terminology.
Using AI, the platform’s developers are building capacity for machine translation using legal domain-specific language capabilities based on translation by professional human legal translators. The aim is to produce an independent voice to provide official translations for cross-border disputes in order to reduce misunderstanding and costs, and increase accuracy.
Supporting MSME growth
Lawtech may also help boost the number of micro, small and medium enterprises (MSMEs) involved in international trade. Chan says more than 97% of the corporations in Hong Kong and the Asia-Pacific Economic Cooperation zone are MSMEs. Although they are responsible for around 35% of international trade, uncertainty of outcomes and the cost of resolving cross-border disputes are significant impediments to further growth in this sector, and therefore their participation in the Belt and Road Initiative.
According to Chan, around 35% of MSME disputes are unresolved and the average value of disputes is US$50,000.
Currently, the platform is still in its internal testing stage, but eventually Chan would like to see users pay for the services it will provide.
“We’re proud of what we are doing as we’re doing it for the greater good. We want to establish Hong Kong as the lawtech centre of the world. If we can help people, we can help businesses thrive across economies,” Chan says.
