Insights / News
Insights / News
Parts of the Asia-Pacific are in the grip of a boom in infrastructure projects driven, in some cases, by China’s “Belt and Road” initiative and otherwise by historically low global interest rates which has enabled sovereign states either alone or in partnership with private enterprise to fund projects that were hitherto merely a pipedream.
In Australia alone, the 12 largest infrastructure projects total in excess of $A80 billion and include the Westconnex road project (NSW, $A16 billion), the Sydney Metro (NSW, $A12 billion), the Western Sydney Airport (NSW, $A5.3 billion), the Melbourne Metro Tunnel ($A11 billion) and the Melbourne to Brisbane Inland Rail (National, A$8.5 billion).
In the broader Asia context, investment into and development of projects along the Belt and Road initiative and the Greater Bay Area (Guangdong–Hong Kong–Macau) continues. In terms of the scale of the ongoing investment in the Belt and Road, the Chinese Government has reported that between January to July 2021, Chinese enterprises signed 2,936 contracts with 60 countries along the Belt and Road with contract values totalling US$64.42 billion.
Whilst the developed nations within the above projects are enjoying the benefits from increased economic activity associated with infrastructure projects, in a report issued in November 2020, the World Bank estimated that 256 projects in developing countries have either been disrupted or cancelled due to the Covid-19 pandemic.
The real economic impact of the pandemic and its affect on the obligations of counter-parties is yet to be fully realised.
Even without Covid, international infrastructure projects involve risk. Given the scale of infrastructure investment and development around the region, it is expected that construction and project-related disputes will continue to increase.
The majority of those disputes that cannot be resolved between the parties will be determined by arbitration. A good number of these disputes will also, given the above observations, involve Chinese investment. In this respect, the major arbitral institutions in the region (HKIAC, the ICC and SIAC (among others)) are well placed to deal with the sorts of complex international disputes arising out of this investment. There are also potential reforms to the PRC Arbitration Law being discussed to enable these and other foreign institutions to administer foreign arbitrations seated in China.
According to the Asia-Pacific Arbitration Review, Global Arbitration Review, 2021, “companies engaged in owning and building infrastructure in the region will have to successfully navigate these risks to maximise their return on investment. To achieve this, a nuanced understanding of the regional legal, regulatory, political and cultural environment is critical…
This is a time of change in the industry and all participants need to be open-minded and flexible to deal with what lies ahead.”
Outer Temple is well placed to assist our international clients with a wide range of legal services. We have barristers and professional associates, qualified to deal with matters under English law as well as the law of other jurisdictions including Dubai, Abu Dhabi, Qatar, Kingdom of Saudi Arabia (KSA), New York, India, Australia, New Zealand and British Virgin Islands (BVI).
In addition we offer arbitrators, mediators and expert witnesses to provide evidence on issues of English commercial law and the law of other jurisdictions. Our full list of arbitrators can be read here.