The Hong Kong International Arbitration Centre (“HKIAC”) completed a comprehensive revision of its Rules at the end of last year. The 2018 HKIAC Rules, hereafter “the New Rules”, came into effect on 1st November 2018. They are accompanied by a Practice Note on the Appointment of Arbitrators (“Practice Note”) which came into effect on the same day.
The New Rules may be adopted in a domestic or international arbitration by way of incorporation into a written agreement either before or after a dispute has arisen. The New Rules and the Practice Note together are expected to improve the efficiency and cost-effectiveness of arbitrations administered by the HKIAC, making Hong Kong a more attractive forum for dispute resolution.
New provisions under the HKIAC 2018 Rules
Concurrent proceedings are beneficial to parties as they can result in substantial cost savings (for instance expert’s costs and travel expenses), reduction in administrative work and increased coordination efforts for the hearings.
Amendments to the old 2013 HKIAC Rules
Another example of the New Rules’ focus on efficiency is the amendment to the Joinder of Additional Parties (Article 27) provision where there is now a time limit for submitting a Request for Joinder. Any Request for Joinder shall now be raised no later than in the Statement of Defence, except in exceptional circumstances. Within 15 days of receiving the Request for Joinder, the additional party shall communicate to the HKIAC, all other parties and any confirmed or appointed arbitrators an answer to the request.
Where parties have agreed the Appointment of a Sole Arbitrator (Article 7) following the commencement of arbitration, they shall jointly designate the sole arbitrator within 15 days from the date of that agreement.
On the Closure of Proceedings (Article 31), the arbitral tribunal shall inform the HKIAC and the parties of the anticipated date by which an award will be communicated to the parties, such date being no later than three months from the date when the arbitral tribunal declares the entire proceedings or the relevant phase of the proceedings closed. This time limit may be extended by agreement of the parties or, in appropriate circumstances, by the HKIAC.
Another provision to note under the New Rules is Article 13.8. If parties are inclined to explore alternative means of resolving their disputes after the arbitration has commenced, one of the parties may request the HKIAC, the arbitral tribunal or the emergency arbitrator, to suspend the arbitration proceedings. Parties are thus encouraged to seek alternative, more flexible and potentially cheaper resolutions to their dispute even after the commencement of arbitration. The parties are allowed to resume the arbitration proceedings at a later stage upon the request of one party.
The New Rules also reflect an increasing recognition of how technology can be used to achieve cost savings and increase efficiency. In the Conduct of Arbitration (Article 13), the arbitral tribunal is to adopt suitable procedures for the conduct of the arbitration in order to avoid unnecessary delay or expense. This includes an effective use of technology such as Skype video conferencing in the proceedings. Documents may also be delivered through a secure online repository, making communications safer and more efficient.
Paragraph 4.1 of the Practice Notes is also worth noting. In this paragraph, the HKIAC affirms that it will include, whenever possible, qualified female candidates and qualified candidates of any age, ethnic group, legal or cultural background among those considered for arbitrator appointments.
The New 2018 HKIAC Rules are a set of Rules for our times. They seek to simplify the procedures for the resolution of increasingly complex disputes involving multi-national parties, embrace the fast development in technology and all the benefits it brings and it reflects the HKIAC’s support for the principle of gender diversity and inclusivity.
We wait to see if these New Rules will lead to an increase in the number of international disputes referred to the HKIAC for resolution.
If Members have any questions on these New Rules, please do not hesitate to get in touch with your usual contact at the Club.