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Kuala Lumpur, Malaysia – When Hong Kong’s Financial Secretary Paul Chan addressed a recent legal forum, he highlighted the ability of the city’s courts to make rulings without interference as the “cornerstone” of international businesses’ confidence in the financial hub.

Now the independence of Hong Kong’s British-inherited judiciary, ostensibly guaranteed under a system known as “one country, two systems”, is under renewed scrutiny as China’s Communist Party (CCP) looks set to rewrite the rules for the upcoming national security trial of a newspaper tycoon known for opposing Beijing.

The case against Jimmy Lai, founder of the defunct Apple Daily, embodies tensions between Hong Kong’s efforts to promote the autonomy of its common law system to investors and Beijing’s view of the law as an instrument of state power.

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In Hong Kong’s courts, Lai, the most high-profile figure to go on trial under a Beijing-drafted national security law (NSL), has argued successfully against prosecutors for the right to hire a British defence lawyer of his choosing.

After Hong Kong judges ruled in Lai’s favour for the fourth time on Monday, the city’s Chief Executive John Lee said he would ask Beijing to clarify whether foreign lawyers can join cases involving the NSL.

Beijing imposed the sweeping legislation, which has practically wiped out the city’s once-vibrant political opposition and civil society, on the territory in 2020 following months of at-times violent pro-democracy protests.

Lee, who made the announcement after pro-Beijing politicians and state media denounced the court’s rulings, said authorities lacked the means to ensure a foreign counsel does not have a conflict of interest or is not “compromised or in any way controlled by foreign governments”.

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Overseas lawyers are not uncommon in Hong Kong and have taken on cases both on behalf of, and against, the government in the past.

The Standing Committee of the National People’s Congress (NPC), China’s rubber-stamp legislature, which officially has the authority to interpret the Basic Law codifying Hong Kong’s colonial-era rights and freedoms, is expected to issue a decree barring foreign lawyers soon.

Lai, who is facing up to life in prison under sedition and foreign collusion charges, is scheduled to go on trial from December 13, after Hong Kong’s Department of Justice requested an adjournment of the case in anticipation of Beijing’s decision.

Beijing has overruled Hong Kong’s top court just once before, in 1999, in a decision about the residency rights of mainland Chinese in the territory – although it has given its interpretation of the city’s laws on four other occasions.

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Media mogul Jimmy Lai is facing up to life in prison under sedition and foreign collusion charges [File: Kin Cheung/AP] © Provided by Al Jazeera Media mogul Jimmy Lai is facing up to life in prison under sedition and foreign collusion charges [File: Kin Cheung/AP]

Eric YH Lai, a non-resident fellow at Georgetown Law who specialises in Hong Kong and mainland China’s legal systems, said the Lai case, and the Hong Kong government’s recent decision to invoke emergency powers after a court ruled against its COVID-19 vaccine pass policy, cast doubt on the city’s belief in judicial independence.

“As these instances are not limited to issues of national security but also public health, international business shall realise that the fall of judicial independence and the rule of law would not remain in the political realm,” Lai, who is no relation to the media mogul, told Al Jazeera.

“Their interests relying on an independent court would be jeopardised eventually.”

In a statement, the Hong Kong Judiciary said its exercise of judicial power, including that of final adjudication, would not be affected by the decision to request an interpretation of the NSL.

“The judiciary respects the chief executive’s decision to request an interpretation of the NSL from the NPCSC in order to clarify the relevant issues,” a spokesperson told Al Jazeera.

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The spokesperson added that the Standing Committee has the authority to interpret the NSL, which overrides other laws in Hong Kong.

Hong Kong Bar Association Chairman Victor Dawes said earlier this week that people should wait for Beijing’s legal interpretation before rushing to judgement, but acknowledged that its involvement would “undoubtedly result in certain doubts or discussions about our legal system”.

The association’s previous chairman, Paul Harris, abruptly left Hong Kong in March after being questioned by national security police, with his departure at the airport captured on film by state-run media.

Within Hong Kong’s foreign business community, which has traditionally been reluctant to get involved in politics, a key concern is whether Beijing’s moves to bring the courts under its control will filter down to more routine areas of the law.

For now, many businesspeople appear to be relatively unconcerned about Beijing’s tightening grip over the territory.

“In general, one has to distinguish between commercial law and NSL,” the head of a leading foreign business group told Al Jazeera, requesting anonymity.

“The business community cares about the commercial law and a functioning legal system. Whether or not the two can be separated is another question. But among our members, the feedback is that the NSL is not much of their concern and they generally trust in the judicial independence and impartiality of judges.”

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The business leader said, however, that a guilty verdict for Lai could do serious damage to Hong Kong’s reputation if it is based on anything other than “proven facts”.

“I think the punishment will be harsher than it would be in a different jurisdiction with similar laws,” he said.

“My personal opinion: There is a great deal of paranoia involved on the part of the Beijing authorities. With the political reform and the NSL, they achieved what they wanted – an end to violence. Now they are overshooting the target by applying a zero-tolerance policy and consider everyone who doesn’t sing praise to the CCP basically a traitor.”

Hong Kong’s status as an international business hub has long relied on the reputation of its common law legal system [File: Vincent Yu/AP] © Provided by Al Jazeera Hong Kong’s status as an international business hub has long relied on the reputation of its common law legal system [File: Vincent Yu/AP]

Ryan Mitchell, an associate professor of law at the Chinese University of Hong Kong, said that while attacks on Hong Kong judges’ rulings by pro-Beijing figures are a cause for concern, the Lai case is unlikely to have a big effect on Hong Kong’s status as a business hub.

“This is a very politicised case involving sensational media issues, the recent protest movement, and – in the authorities’ view – national security concerns,” Mitchell told Al Jazeera, adding that the courts, generally speaking, still “operate based on their traditional commitments to due process as well as the precedents and principles of the common law”.

“The vast majority of legal issues faced by foreign firms or executives come nowhere near this sensitive territory.”

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Others see it as only a matter of time before Hong Kong’s entire legal system is compromised by Beijing’s desire for control.

A foreign business consultant, who spoke on condition of anonymity, said he expected a process of “slow attrition” for the judiciary.

“I don’t think it’s going to be as blatant as in the mainland where the judges are told what to do,” the consultant, who has lived in Hong Kong for more than two decades, told Al Jazeera.

“I think here it’s going to be more subtle because they are going to maintain the facade of the rule of law”.

Some local media have suggested Beijing could be preparing to go much further than simply barring overseas lawyers from national security cases.

On Tuesday, the South China Morning Post, citing anonymous sources, reported that China’s legislature could restrict national security cases to a pool of specially designated lawyers, which would conflict with the long-established principle that defendants are entitled to the representation of their choosing.

Under the NSL, Hong Kong’s legal landscape has already undergone a profound transformation. Among other changes, the legislation gives authorities the power to carry out warrantless searches, removes the right to a jury trial, places national security trials in the hands of government-picked judges and reverses the presumption of bail.

In March, two of the United Kingdom’s most senior judges announced they would no longer sit on Hong Kong’s top court, which includes one overseas judge among its five justices, amid concerns their presence could be seen to endorse the territory’s crackdown on dissent.

Hong Kong inherited its courts system from the United Kingdom [File: Elaine YU/AFP] © Provided by Al Jazeera Hong Kong inherited its courts system from the United Kingdom [File: Elaine YU/AFP]

Despite the pressures on the city’s legal system, some legal figures are cynical about the depth of businesses’ concern for the rule of law.

“Frankly, the Chinese interference will not affect businesses,” a legal expert, who has worked in Hong Kong for several decades, told Al Jazeera, requesting anonymity.

“Autocratic governments did not stop overseas businesses, universities etc trying to make a buck in mainland China.”

“During Occupy Central,” the legal expert added, referring to Hong Kong’s pro-democracy protests in 2014, “the major refrain from big business was how inconvenient it was to get to work with roadblocks”.

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