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Hong Kong – The 2013 HKIAC Administered Arbitration Rules Unveiled.

12 June, 2013

 

Legal News & Analysis – Asia Pacific – Hong Kong – Dispute Resolution

 

The Hong Kong International Arbitration Centre (HKIAC) has announced the publication of the 2013 revisions to the HKIAC Administered Arbitration Rules (the “Rules”). The 2013 Rules which are now available on HKIAC's website, will come into force on 1 November 2013.

 

Bourne out of five years’ experience of the use of the original Administered Arbitration Rules, public consultation, review by the HKIAC Rules Revision Committee and extensive consultation with practitioners, arbitrators and other stakeholders, the 2013 Rules seek not only to draw on users’ feedback to further strengthen HKIAC’s service to parties and professionals but also to ensure the Rules continue to reflect the very best of modern practice in international commercial arbitration.

 

The 2013 Rules maintain HKIAC's signature ‘light touch’ approach, seeking to facilitate effective institutional involvement within a framework that recognizes the importance of party autonomy. On the basis of its excellent track record and the general consensus that the 2008 Rules have been working well, many of the changes clarify, but do not modify, the substance of HKIAC administered arbitration. Nevertheless some innovative features have been included to ensure the Rules remain state of the art, a leader in the field in meeting arbitration users’ evolving needs cost effectively and efficiently.


Highlights of the key changes to the Rules include:

 

  • Multiple Parties and Multiple Contracts


The revisions recognize the growing complexity of commercial disputes by instituting amendments which maximize the ability of HKIAC and tribunals appointed in accordance with its Rules to handle multi-party and multi-contract disputes. The new Rules enhance the provision for joinder by expanding the tribunal’s ability to join parties and allowing additional parties to submit requests to join an arbitration. HKIAC itself also gains prima facie power to join an additional party if a request for joinder is submitted prior to the tribunal’s constitution. The 2013 Rules will also allow HKIAC, in certain circumstances, to consolidate two or more arbitrations at a party’s request or to allow claims arising out of or in relation to multiple contracts to be raised in a single proceeding. HKIAC may make arbitrator appointments in place of the parties to advance the process of expanded or consolidated proceedings.

 

  • Improvements on the Expedited Procedure


Not a new concept to HKIAC, the 2013 Rules broaden the circumstances in which parties may apply for their dispute to be determined on an expedited basis. Although application of the expedited procedure will become elective (as opposed to automatic as it is now), the new Rules raise the applicable monetary threshold for the procedure to HK $25,000,000 (the equivalent of over US $3 million). Parties may also apply for expedited procedure when both parties agree or in situations of exceptional urgency. If applicable, the expedited procedure will result in a presumption that the proceeding will be heard by a sole arbitrator and, in the absence of exceptional circumstances, the award must be rendered within 6 months of the transmission of the file to the tribunal.

 

  • Improved Terms and Conditions to Streamline the Arbitrator Appointment Process


The revisions introduce two new features for arbitrator appointment: a fee cap for the agreed hourly rate scheme and standard terms of appointment. Since it began fully administering cases in 2008, HKIAC has offered parties a unique ability to foresee and control their costs – a choice regarding the determination of the tribunal’s fees calculated either on the basis of the amount in dispute, or on the basis of agreed hourly rates. Where parties choose the latter, under the 2013 Rules the arbitrator's rate shall not exceed the fee cap (HKD 6,500 per hour) established in the Rules barring a contrary agreement by the parties. The new Rules also institute standard terms of appointment (subject to variation through party agreement or by HKIAC) which must be agreed by all arbitrators appointed in accordance with the Rules. The uniformity created by these two features will facilitate negotiations between parties and arbitrators, leading to a quicker start to the substantive proceedings.

 

  • Emergency Relief


Owing to a reluctance to rely on national courts and the increased confidence parties have on the arbitral process, parties increasingly ask arbitral institutions to be able to effectively and efficiently handle applications for interim measures prior to the appointment of a tribunal. Addressing this issue, the revisions will enable parties to apply for emergency relief concurrent to or following the filing of a Notice of Arbitration. In consideration of the urgent nature of emergency proceedings, the 2013 Rules provide short deadlines for an emergency arbitrator’s appointment and decision on the application for emergency relief. The amendments are timely in light of anticipated changes to the Hong Kong Arbitration Ordinance which will facilitate the emergency arbitrator process, clarifying that the emergency relief ordered will be enforceable in Hong Kong.

 

In 2012 HKIAC enjoyed a 40% increase in the number of cases fully administered in accordance with its rules. By building upon the success of our existing rules to ensure they continue to be ‘state of the art’ and reflective of best practice in international arbitration, there is no doubt these numbers will continue to grow as HKIAC cements its position as a world-class arbitral institution adept at meeting the changing needs of arbitration users and ensuring the efficiency and effectiveness of the arbitral process.


A series of workshops will be held between now and 1 November when the 2013 Rules come into force at the HKIAC to explain the key revisions and what they mean for practitioners and users of HKIAC arbitration. The first lunch time workshop will be held on 13 June 2013. To sign up for this workshop, please contact Karen Tan at events@hkiac.org for more details.


For further comments about the new HKIAC Rules, please contact Chiann Bao (Secretary-General of HKIAC) at sg@hkiac.org.

 

Please click the following links to access information about the 2013 HKIAC Administered Arbitration Rules:

 

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HKIAC Logo

 

 

 

For further information, please contact:

 
Chiann Bao, Secretary-General, HKIAC 
sg@hkiac.org
 
 
 

 

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