HKIAC Amends Its Rules To Waive Fees In Certain Ad Hoc Arbitrations In Hong Kong.

4 September, 2019

 

With effect from 1 August 2019, the HKIAC has amended the Arbitration (Appointment of Arbitrators and Mediators and Decision on Number of Arbitrator) Rules, Cap 609C (the Rules), to enable it to waive its fees in certain Hong Kong seated arbitrations. The aim is to reduce a party’s costs in seeking an appointment or decision from the HKIAC under the Rules in low-value arbitrations and provide a stronger incentive for parties to choose Hong Kong as the seat of arbitration. 

 

The HKIAC is the default statutory appointing authority for ad hoc arbitrations seated in Hong Kong and in that role performs the following functions under the Hong Kong Arbitration Ordinance (Cap 609) (Ordinance):

 

• determining the number of arbitrators where the parties have not agreed on the number;
• appointing an arbitrator where the applicable appointment procedure fails to result in an appointment; and   
• appointing a mediator where the procedure specified in an arbitration agreement fails to result in an appointment.

 

The Rules provide that the HKIAC may charge HK$8,000 for carrying out any of the above functions. The amended Rules allow the HKIAC to waive that fee if it considers it reasonable to do so in any particular case. The HKIAC has published details on its website of how it will exercise its discretion to waive fees. It says that unless it directs otherwise, the HKIAC will charge a one off fee of HK$8,000 to the party that submits the first request for the HKIAC’s decision or appointment in an arbitration where the total amount in dispute is less than HK$2.5 million and will not charge any further fee for subsequent requests by any party in the arbitration, unless it decides otherwise in appropriate circumstances.

 

Several other amendments are also made:

 

• A party must deliver its request for HKIAC’s appointment/decision to the other party in accordance with s.10 of the Arbitration Ordinance. S.10 contains provisions regarding the delivery and receipt of written communications in arbitral proceedings. Pre-amendment the Rules contained provisions which were at odds with those in s.10.
• Time limits for parties to provide information before the HKIAC appoints or makes a decision. The Rules include a number of time limits for parties to provide comments or information before the HKIAC proceeds to appoint or make a decision. The amendments give the HKIAC power to amend those time limits if justified in any particular case.
• Some provisions of the Rules require the HKIAC to proceed to appoint or make a decision after a time limit expires, while others give the HKIAC a discretion in similar circumstances.  The amendments give the HKIAC a discretion to decide whether and how to proceed to appoint or make a decision, following the expiry of a time limit.