13 January 2014

HKIAC Rules now aligned with international arbitration best practices

The Hong Kong International Arbitration Centre has revised its arbitration rules. A party can now request an emergency arbitrator to be appointed and ask for joinder and consolidation. The new rules also extend the scope for expedited proceedings.

This article is available in English only.

The new HKIAC Rules represent best practices in international arbitration. The HKIAC’s aim is to update its rules and streamline its procedures, rather than to make major revisions. Most of the novel elements contained in the new HKIAC Rules – such as the provisions on emergency relief, joinder and consolidation – apply only to arbitrations commenced on the basis of arbitration agreements concluded after 1 November 2013. The remainder of the new HKIAC Rules applies to all arbitrations commenced on or after 1 November 2013.

Highlights of the new HKIAC Rules include:

Emergency relief

Similar to other major arbitral institutions such as the International Chamber of Commerce and the Singapore International Arbitration Centre, the HKIAC has introduced a new procedure for the appointment of an emergency arbitrator to deal with applications for urgent interim relief before an arbitral tribunal is constituted. An emergency arbitrator will be appointed within two days following the acceptance by the HKIAC of the application for that appointment. Once appointed, the emergency arbitrator will render a decision within 15 days from the date on which the emergency arbitrator received the file from the HKIAC.

Joinder

The new HKIAC Rules contain specific procedures for joining parties to a pending arbitration. At a party’s request, additional parties can now be joined to existing arbitral proceedings, provided there is at least one arbitration agreement that binds all parties under the new HKIAC Rules. The arbitral tribunal will decide on the issue of joinder after consulting with the parties. If a party requests the joinder of one or more additional parties prior to the arbitral tribunal being constituted, the new HKIAC Rules authorise the HKIAC to decide on this request on a prima facie basis.

Consolidation

The new HKIAC Rules authorise the HKIAC to consolidate two or more pending arbitral proceedings where all parties so agree, but also where all claims are raised under the same arbitration agreement, or where the arbitral proceedings that are to be consolidated give rise to a common question of law or fact and where the arbitration agreements are compatible.

Improvements in expedited proceedings  

The new HKIAC Rules broaden the circumstances in which parties may request that their dispute be arbitrated on an expedited basis. The applicable monetary threshold for expedited proceedings is now raised to HKD 25 million (approximately EUR 2.4 million) and parties may apply for expedited proceedings when both parties agree to it or in situations of exceptional urgency.

Terms and conditions

The new HKIAC Rules introduce two new features for arbitrator appointment: a fee cap for the agreed hourly rate scheme and standard terms of appointment of arbitrators. These two features are intended to facilitate negotiations between parties and arbitrators, leading to substantive proceedings starting more quickly.

The HKIAC is the latest arbitration institute to revise its rules to include procedures for appointing emergency arbitrators. These emergency procedures allow parties to seek interim measures prior to the appointment of a tribunal without having to resort to the national courts. The new joinder and consolidation provisions will enable streamlining an increasing number of disputes that involve multiple parties with related claims.

The new HKIAC Rules accord with best practices in international arbitration and are bound to further solidify Hong Kong’s position as one of the premier venues for international arbitration in Asia and beyond.