Revision of the HKIAC 2013 Administered Arbitration Rules

Founded in 1985, the Hong Kong International Arbitration Centre (“HKIAC”) was established by businesspeople and professionals in an effort to meet the growing need for dispute resolution services in Asia. During its 30-year history, the HKIAC has experienced tremendous success and emerged as the leading dispute resolution organisation in Asia and one of the leading arbitration institutions globally. According to the Queen Mary, University of London 2015 International Arbitration Survey, HKIAC is the third most preferred and used arbitral institution worldwide and the most favoured arbitral institution outside of Europe.

HKIAC prides itself on always being at the forefront of innovative arbitration practice, which has been recognised, for instance, by the Global Arbitration Review’s innovation award of 2014. An important milestone was the adoption of the current version of HKIAC’s Administered Arbitration Rules, which came into force on 1 November 2013 (the “2013 Rules”). The 2013 Rules made important contributions to the development of best practices in international arbitration by introducing unprecedented provisions on multi-party and multi-contract arbitrations (including joinder, consolidation and single arbitration under multiple contracts). The 2013 Rules have been well-received by users and are widely recognised as one of the market-leading sets of arbitration rules.

Revision of the 2013 Rules

The HKIAC has recently appointed a Rules Revision Committee (the “Committee”). Considering that the number of arbitrations brought under the Administrated Arbitration Rules has grown significantly since 2013, and the 2013 Rules have been working well in practice, the Committee does not contemplate a wholesale revision. However, drawing upon HKIAC’s experience in implementing the 2013 Rules for almost four years, and to ensure that the HKIAC remains at the forefront of arbitration developments globally, the Committee nevertheless considers that certain amendments would further strengthen the Rules.

Major Proposed Amendments

Major amendments proposed by the Committee at this stage include:

  • Online Document Repository;
  • Alternative Means of Dispute Settlement (eg, “Arb-Med-Arb”);
  • Multilingual Procedures;
  • New Grounds for Joinder;
  • Expanded provisions for single arbitration under multiple contracts;
  • Concurrent Proceedings; and
  • Third Party Funding.

Among the proposed changes, the new set of default procedures on the conduct of arbitral proceedings in two or more languages are particularly worth highlighting. Considering that arbitrations in Hong Kong frequently are bilingual (English and Chinese), the new proposed procedures will greatly facilitate the conduct of such bilingual proceedings. If adopted, the HKIAC would be the first institution in the world to adopt procedures for multilingual arbitrations.

The new proposed provisions on disclosure of third party funding (“TPF”) and revised confidentiality provisions to allow disclosure of information to a third party funder are also noteworthy. The Committee is also considering whether an express provision should be added to the Rules to allow the arbitral tribunal to award costs of third party funding as part of costs of arbitration. The provisions on TPF are introduced against the background of the TPF amendments to the Arbitration Ordinance (Cap. 609), which were adopted on 14 June 2017.

Consultation Process

A public consultation process on the proposed amendments was launched on 29 August 2017, and practitioners will be invited to weigh in on the proposed amendments throughout the amendment process. Members of the Law Society are encouraged to make use of this opportunity to contribute.

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Partner, Shearman & Sterling

Nils Eliasson is a partner in Shearman & Sterling’s International Arbitration Group based in Hong Kong. He is also a member of the HKIAC Council, the Chairman of the HKIAC Proceedings Committee, and the Chairman of the HKIAC Rules Revision Committee.