The new Arbitration Ordinance
Prepared and Presented
by Robin Peard
F.C.I.Arb., F.H.K.I.Arb., F.S.I.Arb.
Chartered Arbitrator and Senior Consultant
+852 2843 4433
Robin.Peard@mayerbrownjsm.com
13th December 2010
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known as Mayer Brown JSM in Asia.
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Overview
Up to 1990 Hong Kong arbitration law followed English law in most
respects.
Law applied to all arbitrations (unitary regime)
•
New York Convention on the Recognition and Enforcement of
Foreign Arbitration Awards applied to Hong Kong in 1975
•
Case stated procedure replaced by appeal on point of law in 1982.
At the same time concept of arbitrator being able to act as
mediator with consent of parties introduced.
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Evolution - 1985
1985
Setting up of Hong Kong International Arbitration Centre
("HKIAC")
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Evolution - 1990
1990
Some radical changes to attract international arbitrations to
Hong Kong
•
Uncitral Model Law ("UML") applied to international
arbitration. So two regimes (domestic and
international).
•
Restrictions on legal representation in all
arbitrations lifted
•
Costs of (e.g.) non-Hong Kong qualified lawyer
recoverable
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Evolution - 1996
1996
HKIAC Committee Report recommended
•
Urgent amendments needed in light of
experience
of UML in practice and English
Enact
urgent amendments
1997
Arbitration Act 1996
•
Long term changes
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Evolution - 1997
1997
Enact urgent amendments
•
Default appointments by HKIAC
•
HKIAC decides number (one or three) of arbitrators in
international arbitration in default of agreement
•
Objectives and principles set out in Section 2AA
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Objectives and principles of current Ordinance
Section 2AA
1.
The object of this Ordinance is to facilitate
the fair and speedy resolution of disputes by
arbitration without unnecessary expense
2.
This Ordinance is based on the principles that
subject to the observance of such safeguards
as are necessary in the public interest, the
parties to a dispute should be free to agree
how the dispute should be resolved; and
(b) the Court should interfere in the arbitration of a
dispute only as expressly provided by this
Ordinance
(a)
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Responsibilities of tribunal
Section 2GA
(1) When conducting arbitration proceedings or
exercising any of the powers conferred on it by
this Ordinance or by the parties to any such
proceedings, an arbitral tribunal is required
(a) to act fairly and impartially as between the parties,
giving them a reasonable opportunity to present
their cases and to deal with the cases of their
opponents; and
(b) to use procedures that are appropriate to the
particular case, avoiding unnecessary delay and
expense, so as to provide a fair means for
resolving the dispute to which the proceedings
relate
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Responsibilities of tribunal
Section 2GA
(2) When conducting arbitration proceedings, an arbitral
tribunal is not bound by the rules of evidence and can
receive any evidence that it considers relevant to the
proceedings, but must give such weight to the evidence
adduced in the proceedings as it considers appropriate
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Note
• A number of provisions applicable to domestic and
international arbitration (e.g. specific powers of
tribunal (e.g. to order disclosure of documents),
interest, costs, extension of time, delay)
• Moving back to a unitary regime
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Long term changes
• Ordinance to be redrawn to apply UML to both
domestic and international arbitrations together
with necessary additions to enable Hong Kong
arbitration law to serve users' needs both
domestically and internationally
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Hong Kong Institute of Arbitrators (HKIArb)
Committee
• Supported by HKIAC and Secretary for Justice to carry
forward long term changes recommended by HKIAC
Committee
• Consultation July 2002 to February 2003
• Final Report 30 April 2003
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Main change to structure of Arbitration Ordinance
Present structure
Proposed structure
• Part I
Preliminary
• Part 1
Preliminary
• Part IA
Provisions applicable to
domestic and international
arbitration
• Part 2
General Provisions
• Part 3
Arbitration Agreement
• Part 4
Composition of Arbitral Tribunal
• Part 5
Jurisdiction of Arbitral Tribunal
• Part 6
Interim Measures and Preliminary Orders
• Part 7
Conduct of Arbitral Proceedings
Enforcement of Convention
Awards
• Part 8
Making of Award and Termination of
General
• Part 9
• Part II
Domestic Arbitration
• Part IIA International Arbitration
• Part IIIA Enforcement of Mainland
Awards
• Part IV
• Part V
Proceedings
Recourse against Award
• Part 10 Recognition and Enforcement of Awards
• Part 11
Provisions which may be expressly
opted for or automatically apply
• Part 12 Miscellaneous
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• Part 13 Repeal, Savings and Transitional Provisions
• Part 14 Consequential and Related Amendments
The Bill
• It has 112 Sections and 4 Schedules.
• It is not intended to be a codification of arbitration law but
brings together in user friendly form the applicable UML
provisions and required additions.
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Notable provisions
• Additions to UML in 2006 have been considered and generally applied.
• Current provisions are reproduced e.g. Section 3 sets out present Section
2AA Arbitration Ordinance (Objectives and Principles). Section 12 applies
Article 5 UML (limited Court intervention) and Section 46 deals with the
arbitral tribunal's obligations but "reasonable" not "full" opportunity to
present a party's case (cf Article 18 UML). Section 47(3) allows the
tribunal a wide discretion as to receipt and assessment of evidence.
Sections 74 to 78 deal with costs including the costs and expenses of the
Tribunal. Sections 79 and 80 deal with interest.
• Article 3 UML Receipt of Written Communications. Added to by including
written communications sent by means by which information can be
recorded and transmitted to the addressee subject to there being a record
of receipt by the addressee. Relevant to Article 21 UML (Commencement
of arbitral proceedings) - request "received" by the Respondent.
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• Article 7 - Option 1 UML adopted by Uncitral in 2006 applies
(arbitration agreement in writing). Broad definition of writing.
• Article 8 - Stay of proceedings
Compulsory except
(a) where the dispute is within the jurisdiction of the Labour
Tribunal when the Court has a discretion; and
(b) where the dispute is in respect of a consumer contract when
the stay is subject to Section 15 of the Control of Exemption
Clauses Ordinance (Cap 71).
Conditional stay in Admiralty proceedings.
(See Section 20(2) - (9)).
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• New 2006 UML additions on interim measures and preliminary
orders granted by the tribunal (Articles 17 to 17G UML).
(a) Definition of interim measures (preserving status quo,
preserving assets, preserving evidence, preventing harm to arbitral
proceedings).
(b) Conditions for granting interim measures;
(c) Preliminary orders ex parte (initially maximum 20 days);
(d) Security by applicant;
(e) Duty of disclosure;
(f) Costs and damages if interim measure or preliminary order
should not have been granted.
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• Court may order interim measures in aid of arbitrations in and outside
Hong Kong. However Court can only grant interim measures in aid of
arbitration outside Hong Kong where the award would be enforceable
in Hong Kong and the interim measure is of a description granted by
the Court in Hong Kong (see Section 45).
• Sections 30 and 31 - Umpires - special provisions.
• Section 53(3) & (4) - Peremptory orders.
• Section 61 - Enforcement of orders and directions. Court can enforce
but will only enforce orders and directions of foreign tribunal if the
order or direction is of a type which could be made by a HK tribunal.
• Section 62 - Entitlement of arbitrator to fees and expenses where his
mandate terminates.
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• Section 74 - Tribunal will assess costs unless Court taxation agreed by
parties (Section 75). No need to follow Court scales and practices.
• Section 77 - Court will assess Tribunal's fees and expenses in case of
dispute.
• No payment into Court in arbitration (073 amended).
- concept not familiar to overseas parties
- Calderbank offer can be taken into account without payment in at
discretion of Tribunal (see Chinney Construction v Po Kwong Marble
Factory 2005 (3) HKLRD 758).
• Recourse against and enforcement of awards
- Present provisions (including special provisions for Mainland
awards) to continue.
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Disclaimer
This materials are provided by JSM and reflect information
as of 13th December 2010.
The contents are intended to provide a general guide to
the subject matter only and should not be treated as a
substitute for specific advice concerning individual
situation.
You may not copy or modify the materials or use them for
any commercial purpose without our express prior written
permission.
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Thank you
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