On 10 June 2013, the Hong Kong International Arbitration Centre (“HKIAC”) announced the publication of the revised HKIAC Administered Arbitration Rules (“2013 HKIAC Rules”).
The 2013 HKIAC Rules will come into force on 1 November 2013. The date has been postponed from the originally envisaged date of 1 June 2013, to allow users and practitioners to familiarise themselves with the new provisions, in particular the provisions relating to multi-party and multi-contract disputes.
The 2013 HKIAC Rules govern arbitrations where an arbitration agreement either provides for the rules to apply or for arbitration “administered by HKIAC” or words to similar effect. Unless the parties have agreed otherwise, the 2013 HKIAC Rules apply to arbitrations in which the Notice of Arbitration is submitted on or after 1 November 2013. However, the provisions on Emergency Relief, Consolidation and Single Arbitration under Multiple Contracts do not apply, if the arbitration agreement was concluded before that date, unless otherwise agreed by the parties.
According to the HKIAC, the 2013 HKIAC Rules continue to reflect the very best of modern practice in international commercial arbitration. The HKIAC says that the 2013 HKIAC Rules maintain the HKIAC’s signature ”light touch” approach, seeking to facilitate effective institutional involvement within a framework that recognizes the importance of party autonomy.
The key changes in the 2013 HKIAC Rules include:-
Fees of arbitral tribunal (Articles 9.2 and 10, Schedules 2 and 3)
The parties will have the option of having an arbitral tribunal’s fees calculated in accordance with either the HKIAC’s schedule of fees, based on agreed hourly rates in accordance with Schedule 2, subject to a cap of currently HK$6500, or the schedule of fees based on the sum in dispute (Schedule 3), with the former option being the default position, if the parties cannot agree.
Express prohibition of ex parte communications with arbitrators (Article 11.5)
The 2013 HKIAC Rules include an express prohibition against a party or its representatives having any ex parte communication relating to the arbitration with any arbitrator, or with any candidate to be designated as arbitrator by a party, except to advise the candidate of the general nature of the dispute, to discuss the candidate’s qualifications, availability, impartiality or independence, or to discuss the suitability of candidates for the designation as a third arbitrator, where the parties or party-designated arbitrators are to designate that arbitrator. Moreover, a party or its representatives must not have any ex parte communication relating to the arbitration with any candidate for presiding arbitrator.
Interim measures of protection (Article 23) and Security for Costs (Article 24)
The provisions on interim measures are expanded to cover the meaning and purpose of an interim measure, and factors to be taken into account when deciding whether to grant such. Further, arbitral tribunals will have express power to order security for costs. The revised provisions are in line with the Arbitration Ordinance (Cap. 609).
Joinder of additional parties (Article 27)
The arbitral tribunal will have power to allow additional parties to be joined to an existing arbitration, provided that the additional party is bound by an arbitration agreement under the 2013 HKIAC Rules.
If a request for joinder of additional parties is submitted before the arbitral tribunal is confirmed, the HKIAC will have power to decide whether the additional party is bound by an arbitration agreement under the 2013 HKIAC Rules and join the party. Once confirmed, any question as to the arbitral tribunal’s jurisdiction arising from the HKIAC’s decision will be decided by the arbitral tribunal.
If an additional party is joined before the tribunal is confirmed, all parties will be deemed to have waived their right to designate an arbitrator and the HKIAC may revoke any existing appointment. The HKIAC will appoint all arbitrators, and the revocation of any existing appointment is without prejudice to the validity of any act done by the arbitrator before revocation, and to the arbitrator’s entitlement to be paid his fees and expenses.
Moreover, the parties are deemed to have waived any objection, on the basis of any decision to join an additional party to the arbitration, to the validity and/or enforcement of any award made by the arbitral tribunal in the arbitration, in so far as such waiver can validly be made.
Consolidation of arbitrations (Article 28)
The HKIAC will be able to consolidate two or more HKIAC arbitrations into the arbitration that commenced first, in which case, the parties to all the arbitrations will be deemed to have waived their right to designate an arbitrator and the HKIAC may revoke any existing appointment and will appoint the tribunal.
The revocation of any arbitrator’s appointment will be without prejudice to the validity of any act done by him or by the court in support of the arbitration before revocation, and to the arbitrator’s entitlement to be paid his fees and expenses. It is also without prejudice to the date on which any claim or defence was raised for the purposes of applying any limitation bar.
The parties waive any objection to the validity and enforcement of any award made by the arbitral tribunal in the consolidated proceedings, based on the HKIAC’s decision to consolidate.
Single arbitration under multiple contracts (Article 29)
Under the 2013 HKIAC Rules, claims arising out of or in relation to multiple contracts can be raised in a single arbitration, provided that all parties are bound by each arbitration agreement giving rise to the arbitration, a common question of law or fact arises under each arbitration agreement giving rise to the arbitration, the rights to relief claimed are in respect of, or arise out of, the same transaction or series of transactions, and the arbitration agreements under which those claims are made are compatible.
Emergency arbitrators (Article 23.1 and Schedule 4)
There will be a procedure for appointing an emergency arbitrator to deal with applications for urgent relief before constitution of an arbitral tribunal.
An emergency arbitrator will normally be appointed within two days following the HKIAC’s acceptance of an application for the appointment of such arbitrator. A decision on the application will normally be made within 15 days from the date on which the emergency arbitrator received the file from the HKIAC.
There are also provisions on an emergency arbitrator’s powers, the effect of his decision, his ability to act as arbitrator in subsequent proceedings and availability of judicial remedies in addition to any urgent relief sought.
Expedited procedure (Article 41)
Application of the expedited procedure will become elective (as opposed to automatic under the previous rules). Under the 2013 HKIAC Rules, parties may apply for the arbitration to be conducted on an expedited basis if the amount in dispute, representing the aggregate of any claim and counterclaim (or any set-off defence), does not exceed HK$25m (previously US$250,000) or if both parties agree or in situations of exceptional urgency.
If applicable, the expedited procedure will result in a presumption that a sole arbitrator will hear the proceedings and the award will be rendered within 6 months from the transmission of the file to the arbitrator.
Parties responsible for service of Notice of Arbitration, Answer to the Notice of Arbitration and certain applications
Service of the Claimant’s Notice of Arbitration and the Respondent’s Answer to the Notice of Arbitration is no longer effected by the HKIAC Secretariat.
Instead, the 2013 HKIAC Rules provide that the Notice of Arbitration (Article 4.3(i)) and the Answer to the Notice of Arbitration (Article 5.1(g)) shall include a confirmation that copies of it and any exhibits included with it have been or are being served simultaneously on all other parties by one or more means of service to be identified in such confirmation. Moreover, a Claimant has to notify and lodge documentary verification with the HKIAC of the date of receipt by the Respondent of the Notice of Arbitration and any exhibits included with it (Article 4.8).
Similar provisions of confirmation of service have been adopted regarding a Request for Joinder (Article 27.4(i)), an Answer to such Request for Joinder (Article 27.5(f)), a party’s comments on a third party’s Request for Joinder (Article 27.7(e)), a Request for Consolidation (Article 28.2) and an application for the appointment of an emergency arbitrator (Schedule 4, Rule 2(i)).