Hong Kong – Lapse Of Automatic Opt-In Provisions Under Arbitration Ordinance (Cap 609) – What Does This Mean For Construction Contracts?

 

5 June, 2017

 

 

A recent Deacons articlereported on the lapse of the automatic opt-in provisions under the Arbitration Ordinance (Cap 609). Click here for article. In respect of construction contracts, the Standard Form of Building Contract and the Government Standard Form expressly provide that the arbitration conducted thereunder shall be a domestic arbitration. We believe it was so drafted in order to take advantage of the provisions which were only applicable to domestic arbitration in the old Arbitration Ordinance (Cap 341). With the expiry of the 6-year grace period for the automatic opt-in provisions, parties should amend the Standard Form by expressly opting in to Schedule 2 of the new Arbitration Ordinance (Cap 609) (Ordinance) if they want Schedule 2 to apply to their arbitration. 

 

Section 101 of the Ordinance provides that if Schedule 2 is opted into automatically by virtue of section 100 of the Ordinance for the main contract, Schedule 2 will also apply to the sub-contracts. After 31 May 2017, parties can no longer rely on section 101 for the automatic opt-in unless the main contract was entered into before 1 June 2011.