Hong Kong International Arbitration Centre publishes

revised arbitration rules1

The Hong Kong International Arbitration Centre (the HKIAC)
launched its revised arbitration rules (the 2013 Rules) last
month, replacing the 2008 HKIAC rules (the 2008 Rules). The
2013 Rules will enter into force on 1 November 2013 and will
apply to arbitrations in which the notice of arbitration is submitted
on or after that date, unless the parties have agreed otherwise.
This client alert gives a general description of the HKIAC,
discusses the key changes that the 2013 Rules will effect, and
offers some comments about those changes and the general
objective behind them.
General Description of the HKIAC
The HKIAC was established in 1985 in response to the
growing demand for arbitral services in Asia. The HKIAC
administers arbitrations and other dispute resolution mechanisms,
such as adjudication and mediation. According to the statistics
published on the HKIACs website, the HKIAC dealt with 456
dispute resolution cases in 2012, of which 293 were arbitrations
(in comparison with the 235 and 177 arbitrations dealt with by the
Singapore International Arbitration Centre and Arbitration Institute
of the Stockholm Chamber of Commerce (SCC) respectively). Of
those 293 arbitration cases, 38% concerned maritime disputes,
27% were of a commercial nature, 24% involved construction, 8%
involved corporate disputes and 3% related to insurance. The
total amount in dispute for cases administered by HKIAC in 2012
was approximately US $1.8 billion.
Of those arbitrations handled by the HKIAC, 68% were
international, involving parties from jurisdictions such as Angola,
1 Volterra Fietta, Hong Kong International Arbitration Centre publishes revised
arbitration rules, 2013, http://www.volterrafietta.com/hong-kong-internationalarbitration-centre-publishes-revised-arbitration-rules/.

Brazil, China, Costa Rica, Denmark, India, Italy, Netherlands,

Russia, South Africa, the United Kingdom and United States. Since
Chinas resumption of sovereignty over Hong Kong in 1997,
arbitral awards rendered in Hong Kong are enforceable in more
than 140 jurisdictions through the 1958 Convention on the
Recognition and Enforcement of Foreign Arbitral Awards (the
New York Convention).
Key Changes under the 2013 Rules
Emergency relief
Under Schedule 4 of the 2013 Rules, a party may now seek
emergency relief prior to the constitution of the arbitral tribunal.
Where a party believes it requires emergency relief, it may submit
an application for the appointment of an emergency arbitrator
concurrent with, or following the filing of, a notice of arbitration to
HKIAC. If the application is accepted, HKIAC will seek to appoint
an emergency arbitrator within two days after receipt of both the
application and the application deposit. The application deposit
consists of HKIACs administrative expenses and the fees and
expenses of the emergency arbitrator (as calculated by HKIAC by
reference to the emergency arbitrators hourly rate and subject to
the terms of Schedule 2 of the 2013 Rules).
A decision, order or award must be made by the emergency
arbitrator within fifteen days from the date on which HKIAC
transmitted the file to the emergency arbitrator (unless extended
by agreement between the parties or by HKIAC in appropriate
circumstances). Thus, this timeframe of fifteen days for obtaining
emergency relief now matches that available through other
arbitral institutions, such as the International Court of Arbitration
of the International Chamber of Commerce (the ICC) or the
Swiss Chambers Arbitration Institution (SCAI). However, the
HKIACs emergency procedure still remains considerably slower
than that available through the SCC, where an emergency

decision on interim measures must be rendered within five days

of referral of the application.
Joinder of additional parties
Under Article 27 of the 2013 Rules, an arbitral tribunal is now
vested with the power to allow an additional party to be joined to
the arbitration provided that, prima facie, the additional party is
bound by an arbitration agreement under the 2013 Rules giving
rise to the arbitration. An additional party may submit a request
for joinder on its own volition, or, alternatively, a party who
wishes to join that additional party to the arbitration may submit
such a request to the HKIAC.
If the joining of an additional party occurs before the date on
which the arbitral tribunal is constituted, all parties to that
arbitration are deemed to have waived their right to designate an
arbitrator and the HKIAC may revoke the appointment of any
arbitrators already designated or confirmed. In those
circumstances, HKIAC will appoint the entire arbitral.
Consolidation
Under Article 28 of the 2013 Rules, the HKIAC may now
exercise the power to consolidate two or more pending
arbitrations. In order to do so, the HKIAC must have been
requested by a party to do so and have consulted with the parties
(and any confirmed arbitrators). In addition, either: (a) the parties
must have agreed to consolidate; or (b) the claims have been
made under the same arbitration agreement; or (c) the claims
have been made under more than one arbitration agreement,
they raise a common question of law or fact which arises in both
(or all) of the arbitrations, the right to relief claimed arises in
respect of the same (or series of) transaction(s) and the HKIAC
deems the arbitration agreements to be compatible.

As with joinder of additional parties, HKIAC may revoke the

appointment of any arbitrators already designated or confirmed
as the parties are deemed to have waived that right. In that
situation, the HKIAC will appoint the arbitral tribunal to hear the
consolidated proceedings.
Fees and Expenses of the Arbitral Tribunal
As with the 2008 Rules, the 2013 Rules provide that a
tribunals fees and expenses can be determined either: (i) on an
hourly basis; or (ii) ad valorem (i.e., on the basis of the sum in
dispute). The ability of the parties to choose the basis on which
arbitrators fees will be calculated is seen as one of the HKIACs
unique strengths. The new 2013 Rules will introduce a cap on the
hourly rate, which cannot exceed the rate set by HKIAC as stated
on its website on the date on which the notice of arbitration is
submitted. This cap may only be exceeded if expressly agreed in
writing by the parties or, alternatively, if the HKIAC deems
exceptional circumstances to exist (Schedule 2, Article 9).
In a 2013 survey of 10 popular commercial arbitral institutions
which calculate the costs of an arbitration on an ad valorem basis,
the HKIAC was deemed one of the most affordable choices for
disputes valued at US $5 million when heard by a sole arbitrator
(US $63,975 as compared with US $132,349 at the ICC). Similarly,
a dispute valued at US $100 million could be heard by a sole
arbitrator at HKIAC for US $178,800 when compared with US
$383,555 at the SCAI.
Single arbitration under multiple contracts
The 2013 Rules also allow claims arising out of, or in
connection with, more than one contract to be dealt with in a
single arbitration, provided that certain conditions are met (e.g.,

that a common question of law or fact arises under each

arbitration agreement giving rise to the arbitration).
Comments
The 2013 Rules now regulate many topical and increasingly
important issues in arbitration such as emergency relief and
multi-party proceedings through the joinder of additional parties,
consolidation of multiple arbitrations and conducting of single
arbitrations under multiple contracts. These revisions to the 2013
Rules represent the HKIACs desire to meet the demands of the
Asian market and also remain competitive with other global
arbitral institutions by keeping pace with contemporary
developments in international arbitration.