The Hong Kong International Arbitration Centre (“HKIAC”) has issued a Practice Note on Compatibility of Arbitration Clauses under the HKIAC Administered Arbitration Rules (“Practice Note”).
The Practice Note sets out HKIAC’s general practice in assessing the compatibility of arbitration clauses in multi-party, multi-contract scenarios under the 2018 and 2024 HKIAC Administered Arbitration Rules (“HKIAC Rules”) and explains HKIAC’s general approach to the constitution of the arbitral tribunal in such scenarios.
Since 2013, the provisions for consolidating arbitrations and commencing a single arbitration under multiple contracts in the HKIAC Rules have facilitated procedural and cost efficiencies where a dispute arises under more than one contract or involves more than two parties. The relevant provisions (Articles 28 and 29 of the HKIAC Rules) have undergone several improvements, most recently in the 2024 version of the HKIAC Rules, which came into effect on 1 June 2024.
While each case must be assessed on its specific circumstances, the Practice Note aims to provide helpful guidance for users of arbitrations conducted under the HKIAC Rules. It includes real examples of arbitration clauses that have been considered compatible or incompatible, and offers recommendations for drafting arbitration clauses in related contracts. It also explains HKIAC’s practice of balancing party autonomy, the integrity of the arbitral proceedings, and ensuring equal treatment of the parties when deciding whether to consolidate arbitrations or permit a single arbitration under multiple contracts to proceed, and when constituting arbitral tribunals in these scenarios.
The Practice Note does not amend any provision of the HKIAC Rules, and the examples do not bind HKIAC in the interpretation of the HKIAC Rules.
John Choong, Partner at Freshfields and Chair of the Proceedings Committee*, says “The Practice Note was drafted with input from a wide range of stakeholders, including leading arbitrators, counsel and users of the HKIAC Rules. The HKIAC has seen an increase in the number and complexity of cases involving multiple parties and contracts, and we are confident that the new Practice Note will provide valuable practical guidance in these situations.”
Briana Young, Professional Support Counsel at Three Crowns LLP and previous Chair of the Proceedings Committee, says “Multi-party and multi-contract situations pose real challenges to users of arbitration. HKIAC has led the market in developing solutions; the Rules provide parties with effective, tried-and-tested tools for navigating these complex scenarios. The Practice Note will enhance those tools by helping parties and lawyers to understand how the HKIAC applies Articles 28 and 29 in practice.”
Joanne Lau, Secretary General of HKIAC comments “HKIAC is committed to assisting users to make the arbitration process run as smoothly, predictably and efficiently as possible. Through the Practice Note, we aim to bring greater understanding of HKIAC’s considerations and practices when dealing with complex arbitrations and provide practical guidance to users and legal counsel.”
HKIAC would like to thank all current and former members of its Proceedings Committee and Appointments Committee, as well as Mr. Matthew Gearing KC, Mr. Jern-Fei Ng KC, and Ms. Adela Mao, for the input they provided on the Practice Note.
