Dear Mr President,

Ladies and Gentlemen,

Dear students,

It is a great honour for me as Mayor of the Free and Hanseatic City of Hamburg to be able to speak to you today at the China-EU School of Law. This institution is a key project within the scope of international co-operation between China and the European Union, including collaboration between our two countries.

This is my third day in Beijing now, and not only have I had the opportunity to engage in many and various talks; I have also acquired a few first insights into life in this impressive metropolis.

Of course, you all know your way around here in completely different aspects. And as a temporary guest in Beijing, I can only congratulate you on being able to work and study at such an exciting location full of history and simultaneously undergoing such rapid, modern development.

I dare say that my city, Hanbao, also has a great deal to offer. Perhaps I should tell you a few things about life and bustle at our River Elbe before moving on to the subject of administration of justice and arbitral jurisdiction.

On Hamburg as a location in general:

The former German President Johannes Rau praised the city of Hamburg at his official inauguration visit as a city and I quote:

whose cosmopolitan nature and awareness of tradition, performance and lifestyle, stylistic assurance and originality, self-confidence and composed reluctance are considered to be particularly attractive.”

Well, it’s true we certainly perceive ourselves as a major European metropolis, and as Germany’s gateway to the world. Nowhere else in this metropolis can you feel its special nature than in the port, be it in the historic Speicherstadt warehousing district or at the Landungsbrücken referred to as a train station for ships. Or take the new HafenCity district still under construction. At this location you can watch the city grow in real time” in a kind of laboratory of modern urban expansion. The port is the heart of the City. Only in the port can anyone say that they have truly arrived in Hamburg.

The port also is the strong growth engine for the region. It features the world’s most state-of-the-art container terminal. It makes Hamburg an international trading metropolis, north-eastern Europe’s key hub for commerce and the European centre for trade with China.

However, Hamburg is also a significant industrial location, and even one of the largest industrial cities in Europe.

Our cluster policy is focused particularly on the fields of logistics, aviation and renewable energies, life sciences, maritime commerce, creative business and the healthcare sector. We are strong in all these fields. The aviation industry, for instance, employs almost 40,000 persons in the metropolitan region.

Hamburg also calls itself Germany’s wind energy capital. I know there is a great deal of interest in alternative methods of energy generation in China, and I’m excited to see how further developments will unfold.

The fact is that trade and commerce have a strong industrial base in Hamburg. Besides, the media and IT sector is one of the key industry segments. In the metropolitan region it employes roughly 110,000 persons in over 21,000 companies.

Hamburg as a port city attracts businesses from all over the world. Most of Germany’s top 100 corporations are represented in Hamburg.

The metropolis of Hamburg is considered to be an absolute stronghold for creativity and knowledge. Apart from public universities, it is the excellent private colleges in particular that actually represent the gateway to the world for many international students. Artists, fashion designers, musicians, media experts and advertising firms are all drawn to the metropolis.

I believe our two cities have a great deal in common. Great cities are not static,” says Edward Glaeser, Harvard professor of economics in his book Triumph of the City”.

The gist of his theses which I consider noteworthy and, to some extent, quite captivating is that people in the city reside, live and work together more closely and it is this in particular that turns cities into metropolises of progress. One of the reasons for this is that cities can actually afford to do so. Because there is adequate living and working space, making it affordable. And not just incidentally: it is also more ecology-minded if less transport and less energy consumption is caused.

So much for that. Incidentally, Hamburg is an attractive study location for numerous students from China, and it offers a university education geared to the needs of the future. Now don’t worry I really don’t want to lure any of you away to our city. But it’s true; 450 Chinese students are currently undergoing advanced vocational training and studies in Hamburg. In fact, scientific co-operation between Hamburg and China in general has been highly dynamic.

Hanbao” that’s the Chinese word for Hamburg is increasingly becoming one of the main cities in the field of Sino-German cultural exchange. The best evidence for this is the city partnership already in place since 1986 between Hamburg and Shanghai, the city I will be visiting this afternoon.

Hamburg as a legal venue

Ladies and gentlemen,

When we speak of key location-related factors, an efficient legal system also is absolutely indispensable. Not only do companies need a reliable public administration, well trained employees and functioning traffic routes to operate successfully; to enable businesses to concentrate fully on their operations, primary factors also include a functioning and predictable legal infrastructure.

Germany has an efficient, inexpensive legal system that has proved its worth in daily practice. For several years now, Germany has also deliberately emphasised this in comparison with other legal systems, expressed as a hallmark of quality in the words, Law made in Germany”.

Like most European legal systems, including those of the eastern European states, German law belongs to the continental European family of law, steeped in a rich tradition. What is typical for it is that it is codified, in other words expressly recorded in writing in a number of statutory codes.

The Marine Trading Act of the Peoples’ Republic of China is a good example of what I mean. I also like to refer to the Chinese Marine Trading Act because it incorporates the Hamburg Rules” negotiated and formulated in Hamburg in 1978 and named after our city. These statutory codes facilitate convenient and speedy access to legal information. They also enable contracts to be kept brief, confined to the essential performance parameters agreed, because the supplementary legal framework is already defined in these pieces of legislation. This is why it does not need to be recorded in pages and pages of clauses lacking in transparency.

Ladies and gentlemen,

What good is the best law on earth if you are in the right but fail to win your case when reality strikes? Germany has had an efficient court system governed by the rule of law for many years now. Whoever needs to engage in litigation can fully rely on the impartiality and independence of the court and its judges. Court costs and lawyers’ fees are transparent and moderate as shown by international comparisons. The scope is clearly defined by statute, which means that the risk relating to costs remains easy to calculate.

However, the legal system is not only an instrument deployed in the interests of trade. Guaranteeing rights extends beyond this economic or commercial function. It is a fundamental societal value for each and every citizen and for the community at large. The guaranteeing of rights is fundamental to supporting the cohesion of society.

Hamburg in particular also has a great deal to offer as a legal venue on an international scale. This significance for the northern German metropolis has developed on the solid foundations of its traditional trade relations with all nations throughout the world. Over 9,000 patent lawyers practise in Hamburg alone. Branches of law firms known throughout the world, experienced notaries and a jurisdiction that is acknowledged well beyond Hamburg’s borders represent a wide-ranging justice network. There are proven and experienced specialists for each and every legal field, even in international law.

We are particularly proud of the fact that since 1997, Hamburg has been the permanent seat of the International Tribunal for the Law of the Sea. Judge Zhiguo Gao from China has been a Member of the Tribunal since 2008.

In the field of science, alongside the University of Hamburg and the Bucerius Law School, the Max Planck Institute for Comparative and International Private Law” is at the top of the list. It´s one of the world’s leading institutions in its area of expertise. As you most probably know, a very intense personal and scientific exchange of information is in place between the Institute and the China-EU School of Law. What I find very special indeed are the mutual personal encounters involved.

At this juncture I would like to express my special thanks and recognition for the outstanding commitment and dedication of lecturers and students to the friendly relations between the People’s Republic of China and the Federal Republic of Germany. In August 2010, students of the CESL visited Hamburg as part of a summer school programme for the best students and candidates for doctorates of the current graduation year. On this occasion, they also visited Hamburg courts and other institutions. I would be delighted if this exchange were to be repeated very soon Hamburg welcomes our Chinese friends with open arms.

To serve the needs arising from the significance of international legal relations for the city of Hamburg even better, in 2009 the association Rechtsstand­ort Hamburg e.V. was founded by all key Hamburg organisations of note. The Hamburg Justice Administration co-operates with this association in drawing up proposals and concepts on how international legal dialogue can be fostered particularly through co-operation with other countries in Asia and eastern Europe. Lawyers from all professional fields and many different countries thus have a common, shared platform to become better acquainted with foreign legal systems. And casting the eye beyond the horizon of one’s own legal system generates ideas for the future development of law and justice.

Arbitral jurisdiction

Ladies and gentlemen,

Dear students,

In daily practice of international trade and business relations, private arbitral jurisdiction has assumed a very central role. This is no different as regards trade between the People's Republic of China and Germany. International private arbitral jurisdiction fills a vacuum because cross-border litigation before state courts is not only time‑ and cost-intensive but also leads to a substantial measure of legal uncertainty.

This applies in particular to the mutual recognition and enforcement of rulings handed down by foreign courts.

The ability to have legal disputes heard before a mutually agreed court of arbitration has the additional benefit that both sides meet each other at eye level and neither party needs to fear that it will have to submit to a foreign legal system. This is extremely important! The possibility to settle cross-border disputes through arbitration proceedings therefore is one of the necessary fundamentals for the development of good trade relations.

Out-of-court conflict management through courts of arbitration has had a long tradition in Hamburg as a result of the city’s trade relations spanning the entire globe. I don’t believe it would be an exaggeration to say that Hamburg is a stronghold of international arbitral jurisdiction. The Court of Arbitration of the Hamburg Chamber of Commerce, the Chinese European Arbitration Centre (CEAC) specialised in disputes relating to China which I will be dealing with later , the German Maritime Arbitration Association (GMAA) for Maritime Law and a large number of industry-specific courts of arbitration dealing with merchandise-related matters are based in Hamburg.

Moreover, the rules of Hamburg Friendly Arbitration” are well known all over the world. In proceedings in accordance with the rules of the International Chamber of Commerce (ICC) and the German Institute of Arbitration (DIS), the city of Hamburg can be agreed as the venue for arbitral jurisdiction. As part of such arbitration proceedings, Hamburg has access to an immense pool of specialised and experienced Hamburg-based lawyers and arbiters.

Ladies and gentlemen, dear students,

You have all dealt with arbitration proceedings in practice and as part of your vocational training and studies. Nevertheless, I would like to emphasise a number of basic rules of German arbitral jurisdiction:

Normally, legal disputes are adjudicated by state courts. These state courts carry out their hearings according to fixed statutory rules of procedure in which all details of the proceedings are defined beforehand and which cannot be modified in principle either. There is an alternative to this route, however: the parties can agree that their disputes are not to be heard by the state courts but adjudicated by private courts - i.e. before courts of arbitration.

Courts of arbitration therefore are private courts whose sessions are convened on the basis of an appropriate arrangement between the parties. They adjudicate disputes without intervention by the state courts, which is a very important thing to bear in mind. The arbitration ruling handed down is legally binding and enforceable on the parties. Private courts of arbitration are either constituted ad hoc, in other words by the parties, or made available by institutions. These are also known as institutional courts of arbitration. In Germany, such institutional courts of arbitration can be found particularly at the chambers of commerce and industry. The Chinese European Arbitration Centre based in Hamburg and the German Maritime Arbitration Association, which is specialised in disputes relating to maritime law, are such institutional courts of arbitration.

What are the benefits and drawbacks of arbitration court proceedings? The benefits can be summarised as follows:

• Acceleration: as a rule, arbitration proceedings are faster because there is only a court of first instance and the arbiters generally deal with the case in question immediately.

• Prevention of negative external impacts: arbitration court proceedings are not public, and their content is confidential on the basis of appropriate agreements entered into by the parties.

• Costs: arbitration proceedings frequently are less expensive than state court cases; this applies at any rate to proceedings in which the values in dispute are high.

Higher level of expertise: the parties have a choice of arbiters. It is possible to choose adjudicators who are particularly well acquainted with the contractual matter and the law of the particular field of business involved.

• Flexibility: the parties can adjust many procedure-related details to their particular needs; the venue, the language in which the hearing is to be conducted and the selection of arbiters.

On the other hand, opting for a private court of arbitration rather than a state court may also lead to drawbacks in individual cases:

• Reduced recourse to legal action in the sense that judgments are final and no appeals are available: as there is only a court of first instance as a rule and access to state courts is denied, there is practically no possibility to correct any rulings handed down by the court of arbitration that are perceived as wrong.

• Independence of the court: due to the influence of the parties on the choice of arbiters, in specific cases there may be a danger that the impartiality of the arbiters is not guaranteed.

I am of the opinion, however, that the benefits outweigh the drawbacks by far. This is already reflected in the fact that the number of arbitration proceedings conducted in Germany in the past ten years has nearly tripled.

Chinese European Arbitration Centre (CEAC)

Ladies and gentlemen,

As announced, I would like to deal more closely with the Chinese European Arbitration Centre. We established the Chinese European Arbitration Centre in September 2008 in co-operation with the Hamburg Justice Administration, the Hanseatic Chamber of Lawyers and the Hamburg Chamber of Commerce. The aim was to further reinforce Hamburg as a location for arbitral jurisdiction within Europe.

We have great expectations for the new court or arbitration. For this reason, I would like to take the opportunity to express my sincere appreciation and thanks to our Chinese partners for the past collaboration in a spirit of mutual trust and their assistance in establishing this institution. In particular, this extends to include our good cooperation with the China International Economic and Trade Arbitration Commission (CIETAC) that has existed since as early as 1954 and has immense experience based on the substantial number of arbitration proceedings heard and adjudicated.

In this context, I have fond memories of the high-ranking Chinese delegation from justice and administration circles that visited Hamburg for the first China Arbitration Days in 2011. The events held this summer, for instance in Shanghai and Hong Kong in cooperation with the China International Economic and Trade Arbitration Commission also were a resounding and highly promising success. I would appreciate it very much indeed if the good co-operation could be continued and further intensified in future. The Hamburg side will endeavour to arrange the signing of a co-operation agreement.

Ladies and gentlemen,

What can we say today about the future of international arbitral jurisdiction? It is reported that a certain degree of resistance has been encountered as far as the enforceability declaration of German arbitration rulings in China is concerned.

What I perceive as the special value of arbitral jurisdiction is that the state acknowledges the settlement of disputes that business enterprises have organised on their own responsibility according to pre-defined procedural rules as an alternative to state jurisdiction.

After all, the organisation of the justice system is one of the classical tasks of the state. In departure from this, the parties to international trade have the liberty to organise and design the arbitration processes largely according to their very own ideas and concepts. Their private autonomy is reinforced as the powers of intervention by state court is reduced. Under German law relating to courts of arbitration, the powers of intervention and control have been reduced to an absolute necessity level, namely both in terms of the general statutory parameters and in the decision-making practice of courts. This has paved the way for the success of private international arbitral jurisdiction.

To put it in slightly more drastic terms, this is the crucial question: how to delineate international recognition of foreign arbitration rulings. The value of an arbitration ruling as an executory title depends on the law and the decision-making practice of the courts applied to in the state enforcing the ruling in question.

Only if that state in observing its constitutional mandate acknowledges the consequences of an arbitration ruling for the losing party and orders enforcement measures to be imposed on the debtor who is unwilling to pay will arbitration proceedings prove to be successful. Only then will they be sufficiently attractive as an alternative method of international settlement of disputes.

The member states of the European Union currently face a similar question concerning the recognition of enforceable foreign rulings in civil and commercial matters. At present, negotiations are under way on proposals by the European Commission in terms of which the need for any exequatur procedure is to be dispensed with. This proposal has met with reservations amongst part of the member states.

The reason for this is likely to be that it has not yet been possible to successfully establish mutual trust and confidence amongst all parties concerned in the legal systems of all states especially those that recently joined the European Union. I believe this already shows the route that we will need to take. It must be the objective as part of a permanent exchange of knowledge of other legal systems to elicit understanding for the respective special features and, above all as the key criterion to intensify mutual trust and confidence in the persons and institutions involved.

Germany and China / Outlook

Ladies and gentlemen,

As far as relations between the People’s Republic of China and Germany are concerned, we have really made good progress and can look forward to a highly promising future. Chinese law and its development meets with growing interest in Germany. Again, we should learn our lesson in this context from a quotation by Confucius: If three people are on the road together, then one of them can certainly be my teacher. I will adopt what is good, and correct what is wrong in him. In saying this, Confucius advises us to learn from the strengths of others and consider the weaknesses of others as a lesson in order to attain perfection. I have been told that this sentence has been a kind of guideline for many Chinese for 2,000 years now. It can also serve as a guideline for us.

At the academic level, this interest is reflected in studies of Chinese jurisprudence as a field of research. A lack of language and writing skills in Chinese still represents an obstacle in Germany. Still, there has meanwhile been increasing access available to translations of Chinese laws. For instance, a German translation is available by the Hamburg Max-Planck-Institute of the People’s Mediation Law enacted in the People’s Republic of China.

We need dialogue and good relations at all levels and in all fields of activity and endeavours. Only if we talk to one another, get to know and learn from each other will we be able to overcome the challenges of the future.

This applies both to the law and to business and commerce. The current financial and economic crisis shows that we are all in the same boat Asians, Europeans, and Americans. We will either reach our destination together or we will all be shipwrecked. I am quite convinced that this crisis will usher in a new epoch of co-operation and partnership. We will either succeed together or none of us will succeed. For this reason, we should do everything we can to ensure that we succeed together. This is another reason why co-operation between Germany and China is so important.

The Sino-German Dialogue on the Rule of Law Dialogue was established in 1999 by Chinese State President Jiang Zemin and the German Federal Chancellor Gerhard Schröder. This dialogue was aimed at promoting a better mutual understanding of the respective traditions and culture of thinking and acting under the rule of law. The common objective is based on the conviction that the rule of law represents the foundations for prosperity and democracy. In the process, the dialogue on the rule of law expressly includes respect for human rights.

A great deal has happened since 1999. Relations have increasingly improved and become closer. This also applies to Hamburg. The EU-China-Law-School is a good example of this. Hamburg is the leading partner on the European side. My wish is that this will continue to be the case and that we will create a solid and sustainable basis for the EU-China-Law-School, both in scientific and financial terms. This is something we will need to work on in the following months, both on the European and on the Chinese side. The effort will certainly pay off for both sides. I, for one, will do the utmost to support this process.

Ladies and gentlemen,

If we compare the China of 1999 with China today, not only can we say that China today is the country with the highest economic growth rates. Another factor is that thinking based on the rule of law has found its way into legislation, into the judicial system and into many fields of the administration.

Like all other countries, China and Germany need to be clear on the fact that a market economy cannot do without a statutory regulatory framework and without balancing the many and various interests involved.

In China and in Germany, the business community and the economy as a whole need legal certainty. Legal certainty through transparent legislation, a lawfully constituted administration and an independent judiciary all these are accomplishments that can and must also be to the benefit of all. At the same time, they are indispensable requirements for economic development.

An element of these partly very close relations is the China-EU School of Law, which is mandated to train highly qualified specialists for the Euro-Asian market. I am delighted to have been given this opportunity to speak to you here today. In particular, the young lawyers of our two countries are called upon to assume an important role in establishing mutual relations. I must say that I don’t have any concerns in this regard.

This year’s summer school of the China-EU School of Law took the students to Bruges. A report by Dai Wenjue, a student, published on the web site of the Law School, states:

In less than three hours, we had already left our hearts in Bruges. The time was short and Bruges's beauty meant that it would have been worth spending longer to explore. As we left the sun came out to smile again, and in the warmth we said good bye.”

Well, it’s true: Bruges is one of Europe's particularly beautiful cities. And it’s also true that farewells are a lot less difficult when at least the sun shines. However, every departure is followed by an arrival. I hope many more graduates of the China-EU School of Law will also be visiting Hamburg. And, like Bruges, we also have many interesting things to offer.

More smiles, more warmth: that is exactly what I hope the increasing personal encounters will achieve. Then, we will be able to look into the future with a sense of immense composure and confidence.

Thank you for your kind attention.

Es gilt das gesprochene Wort.