Arbitration – Institution Rules Update

Hong Kong International Arbitration Centre introduces New Rules

The 2013 Hong Kong rules have been revised to add provisions for use of technology to benefit the process of arbitration. The process for revision of the Rules began in August 2017 and after a year of consultation with the interested groups and users in Hong Kong, a new set of rules have come into force on 1 November 2018 to administer arbitral process, namely, HKIAC Administered Arbitration Rules (2018). The major changes introduced are as follows:

Alternate Dispute Settlement (Article 13.8) –

If the parties agree to choose an alternate method of dispute resolution such as mediation, conciliation in during the arbitration proceedings, they may make an application to the HKIAC and the arbitration proceedings will be put on hold. And these proceedings may resume at any time the parties request to do so.

Single Arbitration under Multiple Contracts & Concurrent Proceedings (Article 29 & 30) –

The amendment has given the option to the parties to constitute a single arbitration proceeding for multiple contracts, even if the contracts are not bound by one another. Article 30 says that if there are two or more arbitration proceedings with the same tribunal and the same question of law or fact, then they can be consolidated as a single proceeding.

Funding by Third Party (Article 34, 44 & 45) –

The new provisions provide for funding of party to an arbitration by a third-party with for confidentiality of such arrangement. The funded party needs to disclose details of the funder along with the funding agreement. The funded party is allowed to disclose arbitration related information to the current and potential funders.

Procedure for Early Determination (Article 43) –

This procedure empowers the arbitral tribunal on request of a party to determine a point of law or fact that is manifestly out of merit or out of the jurisdiction of the arbitral tribunal, or an assumption that does not result in the award being granted in the favour of the party who submitted it. The tribunal has to decide within 30 days from the date of application whether to allow early determination application or not.

Emergency Arbitrator (Article 23 & Schedule IV) –

A party can file an application for appointment of an emergency arbitrator before the commencement of the arbitration proceedings. The emergency arbitrator will be subject to the same provisions as under Article 23. The fee of the emergency arbitrator is now subject to a maximum amount provided on the HKIAC’s website.

Reduced Time Period (Article 23& 31)

The time limits under the emergency arbitrator has been reduced. The arbitral tribunal is now required to inform the parties and the HKIAC about an approximate date when the award will be delivered. The date of delivering the award shall be within three months of the closing of the arbitral proceedings which may be extended by HKIAC or by an agreement between the parties.

Use of Technology (Article 3 & 13)–

Keeping in mind the advancements being made in technology, some cost and time effective provisions have been introduced to benefit the parties. These provisions provide for online delivery of documents and for determination of suitable procedures for arbitration. The new provisions also provides for submission of documents through a repository. Parties may choose their own repository or the repository provided by the HKIAC.