21CV375169
`Santa Clara — Civil
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`R. Arag
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`2
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`3
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`1|}GIBSON, DUNN & CRUTCHER LLP . .
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`
`
`Bae nee ECA
`MATTHEW S. KAHN,SBN 261679
`y superior
`Vourt
`o
`mkahn@gibsondunn.com
`County of Santa Clara,
`ABIGAIL A. BARRERA, SBN 301746
`on 12/22/2021 3:43 PM
`abarrera@gibsondunn.com
`Reviewed By: R. Aragon
`555 Mission Street, Suite 3000
`
`4||San Francisco, CA 94105-0921 Case #21CV375169
`Telephone:
`415.393.8200
`.
`5||
`Facsimile:
`415.393.8306
`Envelope: 7921650
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`6||ALEXANDER H. SOUTHWELL(pro hacvice)
`asouthwell@gibsondunn.com
`200 Park Avenue, 48th Floor
`New York, NY 10166-0193
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`8||Telephone: 212.351.4000
`Facsimile:
`212.351.4035
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`7\|
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`9
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`10
`
`JEREMYS. SMITH, SBN 283812
`jssmith@gibsondunn.com
`333 South Grand Avenue
`11||Los Angeles, CA 90071-3197
`Telephone:
`213.229.7000
`
`12||Facsimile: 213.229.7520
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`13||Attorneys for Defendants TENCENT AMERICA LLC
`and TENCENT INTERNATIONAL SERVICEPTE.
`14||LTD.
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`SUPERIOR COURT OF THE STATE OF CALIFORNIA
`
`COUNTY OF SANTA CLARA
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`Citizen PowerInitiatives for China, and Doe
`Plaintiffs 1-6, the latter individually and on
`behalfof all others similarly situated,
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`Plaintiffs,
`
`Vv.
`
`1
`Tencent America LLC and Tencent
`2 International Service Pte. Ltd.,
`3
`Defendants.
`
`CASE NO. 21CV375169
`
`DEFENDANTS TENCENT AMERICA LLC
`AND TENCENT INTERNATIONAL
`SERVICE PTE. LTD.’S REPLY IN
`SUPPORT OF SECONDPETITION TO
`COMPEL ARBITRATION AND STAY
`FURTHER PROCEEDINGS
`[Declarations ofDavid W. Rivkin and Jung Won
`Byun; and Objections to the Declarations of
`Times Wang and Dr. Alvin Y.H. Cheung
`submitted concurrently herewith]
`
`ASSIGNED FOR ALL PURPOSESTO:
`Hon.Patricia M. Lucas
`Department3
`
`Complaint Filed: Jan. 8, 2021
`Hearing Date:
`January 12, 2022
`
` Trial Date: Noneset
`
`
`Gibson, Dunn &
`Crutcher LLP
`
`DEFENDANTS TENCENT AMERICA LLC AND TENCENT INTERNATIONALSERVICEPTE. LTD.’S REPLY IN
`SUPPORT OF SECOND PETITION TO COMPEL ARBITRATION AND STAY FURTHER PROCEEDINGS
`CASE NO. 21CV375169
`
`

`

`TABLE OF CONTENTS
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`Page
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`—_
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`—™
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`INTRODUCTION ooo. ecc ccc cceeccccecceccccccssececucecccccaucececccreeececacasecceauccessarseesenseasecseaueeeesarseasenaeaneees 6
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`ARGUMENT. 0.0 ecccecccseceseereensereccesesnsesrecsseesssessenseersscsasessesseeseersecessssessecsssenusessensesraseseeeatenss 7
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`A.
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`B.
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`Cc.
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`Plaintiffs Concede Essentially Every Single One Of The Petition’s Arguments......... 7
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`Plaintiffs Have Failed To Prove The “Null and Void” Exception Applies.................. 7
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`Plaintiffs’ “Public Policy Claims” Are Not A Basis To Avoid Arbitration................ 14
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`I.
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`CONCLUSION 0. cececsecccsesesecseeesessaecnseesessessessaecessensessessstsatessscesssseessssedesseseseseaaenneeasensesas 15
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`—
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`WwN
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`as
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`wa)
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`aN
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`~]
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`Oo6
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`28
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`Gibson, Dunn &
`Crutcher LLP
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`2
`DEFENDANTS TENCENT AMERICA LLC AND TENCENT INTERNATIONALSERVICEPTE. LTD.’S REPLY IN
`SUPPORT OF SECOND PETITION TO COMPEL ARBITRATION AND STAY FURTHER PROCEEDINGS
`CASE NO. 21CV375169
`
`

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`OoCFAJHKAWSFWeNe
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases
`
`AT&T Mobility LLC v. Concepcion (2011)
`563 U.S. B33 ecceccccceseesessesseeseeseeeeeceecesaeeaesaesansaessnseasecsaseaseaeeaeeaseseeaecsseeeeaeeeessesiessasieseeeeeeeeeaeeaaeaees 13
`
`Balen v. Holland Am. Line Inc. (9th Cir. 2009)
`583 F.3d 647 oo eccccesccsessecseseceseeeceeeeeceeasseeeaesenseaeseseaseaseaceaseaseseeaecsaeeeaeseessesaessnsieseeseaseaseaeeaneas 8,9, 14
`
`Bird v. Shearson Lehman/Am. Express, Inc. (2d Cir. 1991)
`926 F.2d L160 cee ceccscssecscesesseeeeeeeeeeeseeeeesaesaecaecseseasecsasesseaeeaeeaseaeesecsaesecaeeeessesaessasieseeeeaseeseaeeaneaees 14
`
`Chloe Z Fishing Co. v. Odyssey Re (London) Ltd. (S.D.Cal. 2000)
`109 F.Supp.2d 1236 ooo. cccccecessseesesseeeseseceesseaceseeaceaeeaecseesecsaeeeesseseessessessnseaeeseaseaseeesaaeaesaesenseaseasees 8
`
`Consol. R. Corp v. Nat’l R.R. Passenger Corp. (D.D.C. 1987)
`657 F. Supp. 405, revd. Nat’? R.R. Passenger Corp. v. Consol. Rail Corp. (D.C.
`Cir. 1990) 892 F.2d 1066 oe eceesessseeessesecsesecnsesecessecesssesesseeaesseeaeeseceeseeesesseeaetsesarsseteesees 6, 15
`
`Danu Vina Co., Ltd. v. Cloud B, Inc. (C.D.Cal., Apr. 30, 2019)
`2019 WL 2902502 oo ecsscesesseesesseesesseessseseesseatenseasesssscesssecesseesesseesesseeacesaceaesseeaessetaessetsesateeseatente 11
`
`Filanto, S.p.A. v. Chilewich Intern. Corp. (S.D.N.Y. 1992)
`789 F.SUpp. 1229 oi cessescesscsccsseecesseeserseesessecsesseeseseeesssssessseatenssatesssssessscessseaesseesesseeaeeseseeeneeaees 12
`
`Flextronics Int'l USA, Inc. v. Murata Mfg. Co., Ltd. (N.D.Cal., Aug. 31, 2020)
`2020 WL S106851ooo ecceesecsesseteesseessseaeesssaecaseatcnssscessecesseesesseesesseeseesaceaesseeaessesarsseeeesaeeeseatente 10
`
`G.B. Goldman v. United Paperworkers (E.D.Pa. 1997)
`O57 F. SUPP. 607 ooo... ceccsccsssecssseeesceeeesseeesseeessaeeessaeeesseeeessaesessaesessaesesseesesaaesesseeseaeesesaeeseaaeeneaaeens 15
`
`Generica Ltd. v. Pharm. Basics, Inc. (7th Cir. 1997)
`125 F.3d 1123 oe eeeseecesseecesseesersessessesseseesesseessseaeesseatenssatesssseesnsecesssesesseeaesseeseeseeaeeseeeeeneeaess 10
`
`Gilmerv. Interstate/Johnson Lane Corp. (1991)
`S00 U.S. 20. ecescecesseesesseeseeseccesececesseesessecsessecsessaeseseeessseseessvatenseatcnssacesseecesseeaesseesesseeaeeneeaaeneeeaers 14
`
`Karaha Bodas Co., L.L.C. v. Perusahaan Pertambangan Minyak Dan Gas Bumi
`Negara (Sth Cir. 2004)
`364 F.3d 274 oo ecceseesecrecnectecccsecsacrecsaersccsevsecseesecsaessccnecssensensensvatenssssenseetensessesseesesseeeeeraeeaeressaers 10
`
`Estate ofKe Zhengguang v. Yu Stephany (D.Md., Feb. 24, 2020)
`2020 WL 886146 oe secsececcsecsecsecsscsneescenscasenecatensvstenscesesseesesseesecsecsceraceaeracesevsecsessecaaensceneeaeens® 10
`
`Lindo v. NCL (Bahamas), Ltd. (11th Cir. 2011)
`652 F.3d 1257 ooo eescesecseesecnecnccsecsccrecsaevscssevseeseeseesaeeseenesscenssnsenssatensvsensentesessesseeseoresseenees 8, 11, 12
`
`Liu Luwei v. Phyto Tech Corp. (C.D.Cal., June 18, 2018)
`2018 WL 6016958 oo ee eeseecseceeesecsecsecsscsneesseneessenevstensvstenscesesessesseesecsecseerecceraesaeracesevseeseeneeasents 9
`
`3
`DEFENDANTS TENCENT AMERICA LLC AND TENCENT INTERNATIONAL SERVICE PTE. LTD.’S REPLY IN
`SUPPORT OF SECOND PETITION TO COMPEL ARBITRATION AND STAY FURTHER PROCEEDINGS
`CASE NO. 21CV375169
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`Crutcher LLP
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`OoCFAJHKAWSFWeNe
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`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`McGill v. Citibank, N.A. (2017)
`2 Cal. 5th 945 ooocee cc ccccccccceceseeseeeeseeceeseeseesecseaceaeeaceaeeaseaeesecssesecsaeeeessessessesiessnseaseeeaeeasesesaasaesaasenseasenseas 7
`
`Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. (1985)
`AT3 US. O14 ccc cccecececeeeeeeeseseesenseacecseaeeaseaceaseaseaesaeesaeseesaeeeessessessesieseeseaeneseaseaaeaeea 7, 8,9, 11, 12, 14
`
`R.R. Comm’n ofCal. v. Pac. Gas & Elec. Co. (1938)
`302 U.S. B88... ce ecccceseeseesesseeseeseeeeeceeeeecesaseaeeaesaeeaesseseaseasaseaseaseaseaseaeeaeeseeaecaeeeesseeeessesiessnsieseeseeeeese 9
`
`Rhone Mediterranee Compagnia Francese Di Assicurazioni E Riassicurazoni v. Lauro
`(3d Cir. 1983)
`712 F.2d 50 ec cecctcssccseeeseseseeeseencensecseeeseceseecesseeeaseeesseeesessaeessessecseeeseseadessenseenseceeseateeaeeeerseeeateas 8
`
`Riley v. Kingsley Underwriting Agencies, Ltd. (10th Cir. 1992)
`969 F.2d 953 oe ecsscsccsscescsseeeesecseesececesseecesseesessecsessecsesseeseseaeeseaeesseadeaseatenseatenssecesseaesseeaesseeneeseeaeenees 8
`
`Sargon Enters., Inc. v. Univ. ofS. Calif. (2012)
`S5 Cal 4th 747 ccc eeccccscccseesssseccsscssecsseeseseaeceaeeeesseescseseesseecesseceaseseesseeesessaeessessecseeseseaeennenseensetsese 11
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`Scott v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (S.D.N.Y., Sept. 14, 1992)
`1992 WL 245506 ooo ciicecsecsssescceseeeseseeeesessecseeeeseaecseeseessecscseaeesseecesseeeaseseesseecseseatessensecseeeseseatense 14
`
`SSI (Beijing) Company Ltd. v. Prosper Bus. Dev. Corp. (S.D.N.Y., July 30, 2020)
`2020 WL 6323938 .oieccceeccssseesecseetseeeseceseeeesseeseseaecsseecesseeeaseseesseecseseaeessessecneeseseateseeseersessateatensees 9
`
`State v. Am. Fed’n ofState, Cty. & Mun. Emps., Council 31 (IL. 2016)
`SL N.E.3d 738 woe cecsscesessceneesecneeseeeeesseesessecsessecsesaeseseeessssseesseatenseatcsssasesseecessseaesseesesseeneeseseeneeeaers 15
`
`Sunshine Min. Co. v. United Steelworkers ofAmerica, AFL-CIO, CLC (9th Cir. 1987)
`823 F.2d 1289 occ eeccsscenccssecssesecsseeecesseceaeeseesseeesesseeessesaesseecseseaeesenseenseseseaeceseeacerseesaseaeersees 9, 10
`
`Top Jet Enterprises Ltd. v. Skyblueocean Ltd., et al. (W.D.Mo., Aug. 31, 2021)
`2021 WL 5546458 oo cecceecctscsceeseesseseaeenseesecseesseseaeceaeescessecsaseaeesseecessaeesseseecseeeseseaeessensecneeseeseatenae 10
`
`Turner v. Wade (1920)
`254 US. 4. eecccescsseescetseceeessecseesseseaeesensecseesseseaeceseescensecsaseaeesseescessaeesseseeseeeseseadessenseeneeteeseatenae 10
`
`W.R. Grace v. Rubber Workers (1983)
`AOL US. 57 ececesscecesseeseseesersecsesseesesseessssseesssatenseatensescessscesseeaesseesesseeacesaceaesseeaessesarsseeseseaeseseateat® 15
`
`Statutes
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`DUS.C. § 206 oe ceescsecnecrecsceseessersessevsecsecsecsaesecenseasenssssenecstensvtenscnsesessesseesesseceaeaseaeraceaeraceseeseeanenss 7
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`Other Authorities
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`28
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`Crutcher LLP
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`Hong Kong: The End ofDelusion, Alvin Y.H. Cheung, Critical Asian Studies
`Commentary, https://timyurl.com/YypxyndOw ........eeceseccseseeesecenscesecseseesaeceeeessecseseesaeeeneeesseesteeeaees 11
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`4
`DEFENDANTS TENCENT AMERICA LLC AND TENCENT INTERNATIONAL SERVICE PTE. LTD.’S REPLY IN
`SUPPORT OF SECOND PETITION TO COMPEL ARBITRATION AND STAY FURTHER PROCEEDINGS
`CASE NO. 21CV375169
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`TABLE OF AUTHORITIES
`(continued)
`Page(s)
`Tahbaz & Rassi, The DevelopmentofArbitral Institutions in Asia (2018) 13 U. Penn.
`Asian L.Rev. 102 oc ceeeeeessssessesessssssesssscensssecessecessesesseesesseeseeseeaeesescesseeaessecsessesaessaesesaesaseatente 11
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`Rules
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`2018 Administered Arbitration Rules, Hong Kong International Arbitration Centre 0.0.0... eee 10
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`ROle
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`oe)
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`OoCFJTDHWAF
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`Crutcher LLP
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`DEFENDANTS TENCENT AMERICA LLC AND TENCENT INTERNATIONALSERVICEPTE. LTD.’S REPLY IN
`SUPPORT OF SECOND PETITION TO COMPEL ARBITRATION AND STAY FURTHER PROCEEDINGS
`CASE NO. 21CV375169
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`OoCFAJHKAWSFWeNe
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`I.
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`INTRODUCTION
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`Tencent’s Petition demonstrated whyarbitration should be compelled through the HKIAC in
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`Hong Kong. Plaintiffs have now conceded they agreed to HKIAC arbitrations, along with nearly
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`every other point in the Petition. Plaintiffs’ on/y arguments against the Petition are limited to
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`assertions that (1) HKIACarbitrations supposedly would violate federal public policy by depriving
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`them of due process, even though the HKIACis the third-most popular international arbitration
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`administrator in the world and courts across the country routinely compelarbitration with it; and
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`(2) “public policy claims” purportedly can never be arbitrated anywhere as a matter of law. Both of
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`these attempts to avoid arbitration are without merit. The Court should therefore grant the Petition
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`and compel HKIACarbitrations of Plaintiffs’ claims.
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`First, Plaintiffs have provided no evidence that HKIACarbitrations would violate federal
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`public policy or deprive them of due process and thus renderthe arbitration agreement here “null and
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`void” under the Convention. Their arguments rest instead on pure speculation, and almost
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`exclusively address aspects of the Hong Kong government, not the HKIACitself. The available
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`evidence actually shows that HKIACarbitrations will easily satisfy federal notions of due process.
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`Andif they did not, Plaintiffs’ remedy is to challenge any arbitration award after the fact—notto
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`avoid arbitration in the first place based on unsupported claims of potential due process violations.
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`Second, courts are uniform that claims can be arbitrated even if they have a public policy
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`dimension to them. Plaintiffs’ authorities do not support any different rule. In fact, one of Plaintiffs’
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`chief authorities was reversed on appeal—thoughPlaintiffs fail to advise the Court ofthis fact.
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`(Consol. R. Corp v. Nat'l R.R. Passenger Corp. (D.D.C. 1987) 657 F. Supp. 405, 408, revd. Nat]
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`R.R. Passenger Corp. v. Consol. Rail Corp. (D.C. Cir. 1990) 892 F.2d 1066.) Plaintiffs’ claims in
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`this action are the samesort of statutory and commonlaw claimsthat are routinely sent to arbitration.
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`While Plaintiffs may support their claims by invoking public policy concerns, that does not create a
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`loophole that excuses Plaintiffs from complying with the valid and binding arbitration agreements
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`they admittedly accepted. If the rule were otherwise, a plaintiff could avoid arbitration merely by
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`claiming her lawsuit has implications for public policy. That is not and cannotbe the law.
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`DEFENDANTS TENCENT AMERICA LLC AND TENCENT INTERNATIONAL SERVICE PTE. LTD.’S REPLY IN
`SUPPORT OF SECOND PETITION TO COMPEL ARBITRATION AND STAY FURTHER PROCEEDINGS
`CASE NO. 21CV375169
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`Il. ARGUMENT
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`A.
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`Plaintiffs Concede Essentially Every Single One Of The Petition’s Arguments
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`Plaintiffs’ Opposition has significantly narrowed the dispute between the parties becauseit
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`concedesnearly every relevant point in the Petition, including that:
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`This Court has jurisdiction to consider the Petition. (Pet. at 10-11.)
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`Each of the Doe Plaintiffs is bound by an arbitration agreementcalling for individual,
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`non-class HKIACarbitrations. (/d. at 7-9, 15 & fn. 4.)
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`Chapter 2 of the FAA, which implements the Convention, governs here and permits this
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`Court to compel HKIACarbitrations. (/d. at 11, 16, citing 9 U.S.C. § 206.)
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`The parties delegated arbitrability to the arbitrator by incorporating the HKIAC Rules.
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`(id. at 13 fn. 3.)
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`Even if the parties had not delegated arbitrability, the parties’ arbitration agreement“falls
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`under the Convention” according to the applicable four-part test. Ud. at 14.)
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`State law defenses to contract formation are not recognized under the Convention, and
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`thus neither alleged unconscionability nor the limited bar on the arbitration of certain
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`statutory remedies under McGill v. Citibank, N.A. (2017) 2 Cal.5th 945 can defeat this
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`Petition.
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`(Ud. at 17-18.)
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`CPIFC and DoePlaintiff 5 are estopped from avoiding arbitration. (/d. at 19-20.)
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`Because Plaintiffs concedeall of the foregoing, the Petition should be granted. Plaintiffs’ Opposition
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`makes only two arguments against compelling arbitration, but both fail.
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`B.
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`Plaintiffs Have Failed To Prove The “Null and Void” Exception Applies
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`Under the Convention, a court must compelarbitration unless the party opposing arbitration
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`provesthat the arbitration agreementis “null and void, inoperative or incapable of being performed.”
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`(Balen v. Holland Am, Line Inc. (9th Cir. 2009) 583 F.3d 647, 654.) As one of Plaintiffs’ own cases
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`' Despite conceding that the Conventionapplies, in a footnote, Plaintiffs assert that “Hong Kong
`law requires that consumersagree in writing to arbitration after the dispute has arisen.” (Opp. at
`8 fn. 7.) This argument misses the point of the Convention, which deliberately “subordinate/s]
`’
`66.
`domestic notions of arbitrability” such as Hong Kong’s “to the international policy favoring
`commercial arbitration.” (Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. (1985) 473
`U.S. 614, 625-626, 639, italics added.)
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`DEFENDANTS TENCENT AMERICA LLC AND TENCENT INTERNATIONAL SERVICE PTE. LTD.’S REPLY IN
`SUPPORT OF SECOND PETITION TO COMPEL ARBITRATION AND STAY FURTHER PROCEEDINGS
`CASE NO. 21CV375169
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`OoCFAJHKAWSFWeNe
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`explains, the “null and void” exception “must be read narrowly.” (Rhone Mediterranee Compagnia
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`Francese Di Assicurazioni E Riassicurazoni v. Lauro (3d Cir. 1983) 712 F.2d 50, 53.) It is limited to
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`“internationally recognized defense[s] such as duress, mistake, fraud, or waiver,” or when compelling
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`arbitration would contravene fundamental federal public policy. (/bid.; see also Chloe Z Fishing Co.
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`v. Odyssey Re (London) Ltd. (S.D.Cal. 2000) 109 F.Supp.2d 1236, 1241, 1243.) Given that there is a
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`“strong public policy favoring arbitration,” when a party contends that an arbitration provision is null
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`and void due to federal public policy concerns, it must prove that the federal public policy at issue is
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`“stronger than the public policy favoring the arbitration.” (Balen, supra, 583 F.3d at p. 654.) Thisis
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`a heavy burden, because the goals of the Convention are to “foster the adoption of standards which
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`can be uniformly applied on an international scale.” (Lindo v. NCL (Bahamas), Ltd. (11th Cir. 2011)
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`652 F.3d 1257, 1277, quotation, citation, and italics omitted.)
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`Plaintiffs make a public-policy-based “null and void” argument, but they notably fail to cite a
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`single case—otherthan one that was overruled on appeal, see infra Section I].C—in whicha court
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`refused to compelarbitration based on public policy concerns. Indeed, manyfederal courts of appeal
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`have held public policy cannot be used to avoid arbitration under the “null and void” exception.
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`These courts have held that public policy challenges on/y can be madeat the post-arbitration phase in
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`connection with motions to confirm or vacate awards. (See, e.g., Lindo, supra, 652 F.3d at p. 1282
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`[“Lindo cannotraise an Article V public policy defense at this initial arbitration-enforcement
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`stage.”]; Riley v. Kingsley Underwriting Agencies, Ltd. (10th Cir. 1992) 969 F.2d 953, 960.)
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`Other courts, including the U.S. Supreme Court and Ninth Circuit, have suggested the same.
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`While Plaintiffs falsely state that Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. (1985)
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`473 U.S. 614 “implicitly recogniz[es] that an international arbitration should only be compelled if it
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`satisfies due process” (Opp. at 1, 8, italics added), the reality is that the Supreme Court rejected the
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`notion that a court should “speculate” in advance about whetherthe arbitration will comply with due
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`process. (Mitsubishi Motors, supra, 473 U.S. at pp. 634, 637, fn. 19.) Specifically, it “decline/{d] to
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`indulge the presumption that .. . [an] arbitral body conducting a proceeding will be unable or
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`unwilling to retain competent, conscientious, and impartial arbitrators,” and likewise declined to
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`speculate about what relief would or would not be awardedin arbitration. (/d. at pp. 634, 637, fn. 19
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`DEFENDANTS TENCENT AMERICA LLC AND TENCENT INTERNATIONAL SERVICE PTE. LTD.’S REPLY IN
`SUPPORT OF SECOND PETITION TO COMPEL ARBITRATION AND STAY FURTHER PROCEEDINGS
`CASE NO. 21CV375169
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`OoCFAJHKAWSFWeNe
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`italics added.) Similarly, in Balen, the Ninth Circuit rejected a public-policy-based “null and void”
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`challenge at the petition to compel stage, finding that the parties were free to “return to” court after
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`arbitration and “moveto set aside the arbitration award” on that basis if they could prove the
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`arbitration as conducted violated public policy. (Balen, supra, 583 F.3d at p. 654.)
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`But even assuming a public-policy-based “null and void” argument could support denying a
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`petition to compelarbitration, Plaintiffs fail to meet their burden of proof here. (See Balen, supra,
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`583 F.3d at p. 654; SST (Beijing) Company Ltd. v. Prosper Bus. Dev. Corp. (S.D.N.Y., July 30, 2020)
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`2020 WL 6323938, at *9 [“The party resisting arbitration bears the burden ofproofas to any defense
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`asserted under the Convention,” which “must be narrowly construed”], Mag. J. R. & R. adopted by
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`(S.D.N.Y., Sept. 3, 2020) 2020 WL 5253515.) Plaintiffs argue that the arbitration agreement they
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`agreed to when they signed up for WeChatis “null and void” because, in their view, they might not
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`get fair hearings in HKJACarbitrations.
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`(Opp. at 8-9 [“sending this case to the HKIAC would
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`contravene the fundamental U.S. policy of ensuring litigants are afforded due process anda fair
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`hearing”].) As a threshold matter, this argumentis surprising given that Tencent initially sought to
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`compelarbitration in California and Plaintiffs opposed that outcome. Tencent remains willing to
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`arbitrate in California if Plaintiffs prefer and agree to that. In any event, Plaintiffs have not come
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`close to proving HKIACarbitrations will violate federal notions of due process.
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`To satisfy due process, an arbitration need only meet “the minimal requirements of fairness—
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`adequate notice, a hearing on the evidence, and an impartial decision by the arbitrator.” (Sunshine
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`Min. Co. v. United Steelworkers ofAmerica, AFL-CIO, CLC (9th Cir. 1987) 823 F.2d 1289, 1295,
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`quotation andcitation omitted, italics added.) As oneofPlaintiffs’ own cases explains, “there is no
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`denial of due process”even if “the [arbitration] proceeding is shot through with irregularity or error.”
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`(R.R. Comm'n of Cal. v. Pac. Gas & Elec. Co. (1938) 302 U.S. 388, 394-395, quotation marks and
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`citation omitted; see also Liu Luwei v. Phyto Tech Corp. (C.D.Cal., June 18, 2018) 2018 WL
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`6016958, at *4 [holding arbitration award enforceable unless it violated “most basic notions of
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`morality and justice under the United States laws and United States public policy”].) “[P]arties that
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`have chosen to remedy their disputes through arbitration rather than litigation should not expect the
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`same procedures they wouldfind in the judicial arena.” (Generica Ltd. v. Pharm. Basics, Inc. (7th
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`DEFENDANTS TENCENT AMERICA LLC AND TENCENT INTERNATIONAL SERVICE PTE. LTD.’S REPLY IN
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`Cir. 1997) 125 F.3d 1123, 1130.) In arbitration, “[t]he right to due process does not include the
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`complete set of procedural rights guaranteed by the Federal Rules of Civil Procedure.” (Karaha
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`Bodas Co., L.L.C. vy. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Sth Cir. 2004) 364
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`F.3d 274, 299, citations and quotations omitted.)
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`Plaintiffs unquestionably will receive “adequate notice, a hearing on the evidence, and an
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`impartial decision by the arbitrator” in HKIACarbitrations. (Sunshine Min. Co., supra, 823 F.2d at
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`p. 1295.) Asthe Petition demonstrated and Plaintiffs do not dispute, the HKIAC Rules provide for
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`numerous due process safeguards. (Pet. at 19.) They provide for advance notice (HKIAC Rules, Art.
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`4), proceedings in English (id., Art. 15.1), an impartial tribunal with the ability to challenge
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`potentially biased arbitrators (id., Arts. 11.1, 11.6), discovery (id., Art. 22.3), and the opportunity to
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`call witnesses and present evidence at a hearing (id., Art. 22). The HKIAC Rules further require that
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`“t]he arbitral tribunal and the parties [] do everything necessary to ensure the fair and efficient
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`conduct of the arbitration.” (/d., Art. 13.5.) This is a far cry from the 100-year-old case Plaintiffs
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`cite as an example of a court “rejecting [an] arbitration process” on due process grounds (Opp. at 1),
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`where there was “an assessment made without notice and hearing.” (Turner v. Wade (1920) 254 U.S.
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`64, 70, italics added.) Plaintiffs have not and cannot demonstrate that the HKIAC—whichis one of
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`the preeminentarbitration organizations in the world—orthe appointed arbitrators will deny them
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`“notice and hearing.” Plaintiffs will get due process in HKIACarbitrations.
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`It is telling that Plaintiffs do not cite a single case where a court has refused to send a dispute
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`to HKJACarbitration or declined to confirm an HKIACarbitration award, based on due process
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`concerns or otherwise. To the contrary, courts across the country routinely send cases to HKIAC
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`arbitrations, including after the 2020 passage of the National Security Law (“NSL”) that Plaintiffs
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`emphasize. (See, e.g., Top Jet Enterprises Ltd. v. Skyblueocean Ltd., et al. (W.D.Mo., Aug. 31,
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`2021) 2021 WL 5546458, at *1 [confirming HKIAC award]; Estate ofKe Zhengguang v. Yu
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`Stephany (D.Md., Feb. 24, 2020) 2020 WL 886146,at *9 [same]; Flextronics Int’! USA, Inc. v.
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`Murata Mfg. Co., Ltd. (N.D.Cal., Aug. 31, 2020) 2020 WL 5106851, at *18 [compelling HKIAC
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`arbitration]; Danu Vina Co., Ltd. v. Cloud B, Inc. (C.D.Cal., Apr. 30, 2019) 2019 WL 2902502,at *3
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`[confirming HKIAC-issuedarbitration award].) Plaintiffs do not dispute that “Hong Kong has
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`DEFENDANTS TENCENT AMERICA LLC AND TENCENT INTERNATIONAL SERVICE PTE. LTD.’S REPLY IN
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`developed a well-deserved reputation as a reliable seat for international arbitration.” (Pet. at 19,
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`citing Tahbaz & Rassi, The DevelopmentofArbitral Institutions in Asia (2018) 13 U. Penn. Asian
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`L.Rev. 102, 109.)
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`Plaintiffs’ contrary arguments are nothing more than speculation piled upon speculation.
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`They repeatedly assert they “might?” not, or “Jikely” will not, get fair hearings in HKIAC arbitrations.
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`(Opp. at 2, 9-10, italics added; see also id. at 5 [claiming there is a “serious question” whether
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`Plaintiffs can get a fair hearing].) But as noted above, courts have refused to allow parties to avoid
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`arbitration based on due process conjecture that might never materialize. (Mitsubishi Motors, supra,
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`473 U.S. at p. 634 [“We decline to indulge the presumptionthat .
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`.
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`. [an] arbitral body conducting a
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`proceeding will” violate parties’ due processrights]; Lindo, supra, 652 F.3d at p. 1269 [synthesizing
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`Supreme Court jurisprudence and holding that “courts should not invalidate an arbitration agreement
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`at the arbitration-enforcement stage on the basis of speculation about whatthe arbitrator will do”’].)
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`The sameis true for the assertions of Plaintiffs’ supposed “expert,” whois a post-doctoral
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`fellow in Canada whohasneverpracticed law before the HKIAC. (Declaration of Alvin Y.H.
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`Cheung (“Cheung Decl.”) 41-2; Ex. A.)* For example, Dr. Cheung speculates that the NSL and
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`supposed governmentinfluence create “risks and uncertainties regarding the ability of any institution
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`based in Hong Kongto” fairly consider Plaintiffs’ claims. (/d. J 8, italics added.) And while both he
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`and Plaintiffs talk about various “civil society organizations” and the alleged “deterioration of Hong
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`Kong’s political and legal environment” generally (Opp. at 5, 7), they offer no evidence that HKZAC
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`arbitrations or the HKIACitself have been affected or compromised byanyofthis.
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`For example, they present no evidencethat (1) the governmentcontrols the HKIAC; (2) the
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`government has exerted any power over HKJAC Rulessince the passage of the NSL; (3) the HKIAC
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`Rules have changed since the passage of the NSL;or (4) any HKIAC arbitration outcomes have
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`2 Asset forth in Tencent’s concurrently filed Objections, Dr. Cheung’s declaration should be
`excluded because (1) he is unqualified to opine on the fairness of an HKIACproceeding, having
`no experience with or knowledge of the HKIAC; and(2) his opinions are based on inadmissible
`“speculation [and] conjecture” (Sargon Enters., Inc. v. Univ. ofS. Calif. (2012) 55 Cal.4th 747,
`770). Dr. Cheung’s testimony also carries no persuasive value given that he is an activist seeking
`“to pronounce on what has gone wrong” in Hong Kong,which explains whyhe was willing to
`serve as an expertforfree in this case. (See Hong Kong: The End ofDelusion, Alvin Y.H.
`Cheung,Critical Asian Studies Commentary,https://tinyurl.com/ypxynd9w.)
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`DEFENDANTS TENCENT AMERICA LLC AND TENCENT INTERNATIONAL SERVICE PTE. LTD.’S REPLY IN
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`changed. Instead, they speculate that their parade ofalleged horribles regarding Hong Kong might
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`impact the HKJAC arbitrators in this case. But courts refuse to “speculat[e] about what the arbitrator
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`will do.” (Lindo, supra, 652 F.3d at p. 1269; see also Mitsubishi Motors, 473 U.S. at 634; Filanto,
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`S.p.A. v. Chilewich Intern. Corp. (S.D.N.Y. 1992) 789 F.Supp. 1229, 1242 [ordering arbitration even
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`though the “conditions in the Republic of Russia are unsettled” because “there is no reason to believe
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`that the [arbitral body based in Russia] cannot provide fair and impartial justice to these litigants’’].)
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`Moreover,the available evidence about HKIACarbitrations since passage of the NSLis the
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`exact opposite of Plaintiffs’ speculation. Tencent has submitted with this Reply the declaration of
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`David W.Rivkin, who (unlike Dr. Cheung)is an international arbitration practitioner and serves as
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`the co-chair of the HKIAC. Mr. Rivkin explains that neither the political climate in Hong Kong nor
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`the NSL in particular has impacted HKIAC proceedings, HKIACarbitrators, or the HKIAC Rules in
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`any fashion. (Declaration of David W. Rivkin (“Rivkin Decl.”) 4 48-52.) HKIACarbitrations are
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`being conducted the same way they wereprior to the passage of the NSL. (See id. 9] 27-57.) The
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`HKIAC Rules have not changed, the proceedings remain fair, and HKIAC remains a very popular
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`seat for international arbitration. Ud. J] 28, fn.1; 50-51; 58-90.) In fact, it is currently the third-most
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`popular seat in the world, behind only London and Singapore, and above Paris and Geneva. (/d.
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`§50.)° And ontopofall that, as Mr. Rivkin explains,it is the arbitrator—not the HKIAC—that
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`makes the substantive decisions in HKIACarbitrations. (/d.| 27-32.) Plaintiffs have no evidence
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`any HKIJACarbitrator is biased or unfit for appointment. And they obviously cannot make such a
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`showing as to the arbitrator that will hear their claims, as no arbitrator has been appointedyet.
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`Ultimately, Plaintiffs concede that there is nothing wrong with HKIACarbitrations, but they
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`claim they personally cannotget fair hearings there. (Opp. at 10, fn. 10.) These arguments too are
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`nothing but unfounded speculation unsupported by law. For example, Plaintiffs claim without
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`. about whetherto
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`3 Plaintiffs’ reliance on a newspaperarticle mentioning “queries from clients .
`write Hong Kong out of legal contracts” provides no support for their position. (Opp. at 5.) Not
`only is the article inadmissible hearsay (see Objs. to Decl. of Times Wang, Obj. No. 3), but it says
`only that clients raised guestions—notthat there actually are problems with HKIACarbitrations,
`which (as Plaintiffs admit) the HKIAC disputes.
`(Opp. at 6, fn. 6.) There is no evidence
`companies are moving away from the HKIJACin droves. Forits part, Tencent only changed the
`arbitral forum in WeChat’s TOS because WeChat’s global base of operations moved to Singapore
`(Declaration of Jung Won Byun, {{ 3-5), not for the reasons Plaintiffs speculate (see Opp. at 6).
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`DEFENDANTS TENCENT AMERICA LLC AND TENCENT INTERNATIONAL SERVICE PTE. LTD.’S REPLY IN
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`evidencethat if the Doe Plaintiffs were compelled to arbitrate in Hong Kong, they might be arrested.
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`(id. at 9.) This ignores that, even if the government cared about California WeChatuserslike the
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`Doe Plaintiffs (there is no evidence they do), HKIACarbitrations are confidential, so the government
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`would not even know about them. (Rivkin Decl. 9] 43, 57, 62-63.) Further, HKIAC arbitrations can
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`be conducted entirely remotely, meaning that the Doe Plaintiffs would not even have to leave
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`California, much less step foot in Hong Kong. (/d. §§] 53, 56-57.) And evenif the arbitration hearing
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`washeld in-person,it can be held outside Hong Kongand officiated by arbitrators located outside
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`Hong Kongas well—evenbyarbitrators unaffiliated with the HKIAC.
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`(Ud. {9 33-40; 55.)
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`Plaintiffs next speculate that, if the appointed arbitrators are based in Hong Kong, they might
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`be influenced bypolitics into ruling against Plaintiffs. (Opp. at 10.) Plaintiffs again have no
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`evidence to suggest this has ever happened before or would occur now. It is pure speculation. They
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`also completely ignore that, under the HKIAC Rules, the appointed arbitrators do not have to be
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`based in Hong Kongatall; they can bebasedliterally anywhere in the world. (Rivkin Decl. 4] 34.)*
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`Finally, Plaintiffs theorize that HKIACarbitrations likely would “prevent [them] from being
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`able to conduct meaningful discovery”into their claims because the government (not the HKIAC)
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`supposedly would opposetheir claims and somehow force the HKIACorthe appointedarbitrators to
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`limit discovery. (Opp. at 10, fn. 9.) Plaintiffs again have no evidenceatall to support this utter
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`speculation. And the notion that limited discovery is “the functional equivalent of depriving
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`Plaintiffs of an opportunity at a fair hearing oftheir claims” (id. at 10)—for whichPlaintiffs cite no
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`authority—isdirectly contrary to law. The U.S. Supreme Court has recognized for decades that
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`limited discovery is an advantage ofarbitr