The HKIAC Rules Revision Committee has invited comments on its proposed amendments to the HKIAC Administrated Arbitration Rules, which were last revised in 2018. The Committee notes that although the 2018 HKIAC Rules have been working well in practice, in light of arbitration developments in Hong Kong and globally over the last 6 years, it would be useful to make certain amendments. Proposed revisions include the following.
Encouraging diversity in arbitral appointments
A proposed new Article, encourages parties and co-arbitrators to take into account considerations of diversity when designating arbitrators and states that the HKIAC when exercising its authority to appoint arbitrators shall take into account considerations of diversity together with all other relevant considerations.
Enhancements to the mechanism for single arbitration under multiple contracts
The current Article provides for the circumstances in which claims arising out of or in connection with more than one contract may be made in a single arbitration, for example, where a common question of law or fact arises under each arbitration agreement giving rise to the arbitration. It is proposed that the Article be revised to add a provision, stating that where the HKIAC decides that the arbitration has been properly commenced under the Article, the parties shall be deemed to have waived their rights to designate an arbitrator and that the HKIAC shall appoint an arbitral tribunal with or without regard to any party’s designation.
Arbitral tribunal’s powers to address preliminary issues
A provision is proposed to be added to the Article dealing with General Provisions, stating that the arbitral tribunal may, in its discretion, and in consultation with the parties, determine preliminary issues that the tribunal considers could dispose of all or part of the case, bifurcate the proceedings, conduct the arbitration in sequential stages, and decide the stage of the arbitration at which any issue shall be determined, or otherwise adopt procedures to decide the case efficiently.
Conflicts of Interest
Another provision proposed to be added to the General provisions is one stating that the arbitral tribunal (after consulting with the parties) may take any measures necessary to avoid a conflict of interest arising from a change in party representation, including excluding the proposed new party representative from participating in the arbitral proceedings.
Revoking arbitrator appointment
An addition is proposed to the General Provisions, providing that the HKIAC may, after consultation with the parties and tribunal, take any necessary measure to preserve the efficiency or integrity of the arbitration, including revoking the appointment of any arbitrator, where it considers that the arbitrator is prevented from or has failed to fulfil his/her function in accordance with the Rules or within the prescribed time limits.
Closure of Pleadings
Currently, the relevant Article provides that the arbitral tribunal shall declare the proceedings or relevant phase of the proceedings closed when satisfied that the parties have had a reasonable opportunity to present their case, whether in relation to the entire proceedings or a discrete phase of the proceedings. The revision proposed adds a time limit for this, namely no later than 45 days from the last directed substantive oral or written submission in respect of the discrete phase of the proceedings (excluding submissions on costs).
Information security
A new Article is proposed for the protection of information, stating that the parties may agree on any reasonable measures to protect information shared, stored or processed in relation to the arbitration and that the arbitral tribunal may (after considering the parties’ views) give directions on such. It is also proposed that the arbitral tribunal have power to make an order, decision or award in respect of any breach of information security measures agreed or directed.
Fees and expenses payable to arbitrators
A revision is proposed whereby the HKIAC may review an arbitral tribunal’s determination of its fees and expenses, following which, the HKIAC may adjust such fees and expenses.
Emergency Arbitrator Powers
Revisions are proposed to Schedule 4 (Emergency Arbitrator Procedure) to clarify emergency arbitrator powers, including a provision that the emergency arbitrator have power to make any order within 14 days from the date on which the HKIAC transmitted the case file to the emergency arbitrator (or within such time as may be extended by party agreement or, in appropriate circumstances by the HKIAC) pending the Emergency Decision. Also, that the emergency arbitrator may proceed with the Emergency Relief proceedings and an Emergency Decision may be made within that period, even if in the meantime the case file has been transmitted to the arbitral tribunal.
It is clear that the proposed revisions are aimed at clarifying certain existing provisions, increasing efficiency in the arbitral proceedings and, as the HKIAC says, enhancing the HKIAC’s role in relation to matters affecting the integrity of the arbitral process.
For further information, please contact:
Kwok Kit (KK) Cheung, Partner, Deacons
K.K.Cheung@deacons.com
