Consolidating HKIAC Arbitrations

International commercial relationships increasingly involve multiple parties and multiple contracts. The 2013 revisions to HKIAC's Administered Arbitration Rules ensure it, and tribunals appointed thereunder, have the ability to deal as flexibly as possible with complex disputes.

The 2013 Rules confer a new power on HKIAC to consolidate two or more arbitrations upon the request of a party. The power of HKIAC is discretionary and will only be exercised where certain conditions established in the Rules are met, but will, in such circumstances, allow parties to avoid the often significant expense and delay associated with multiple but related proceedings.

The steps involved in consolidating two or more arbitrations administered in accordance with the 2013 HKIAC Administered Arbitration Rules are set out below.  (PDF version available here)

*  Unless otherwise agreed by the parties, the ability to consolidate proceedings under Art. 28 will only apply to arbitrations commenced in accordance with an arbitration agreement entered into after 1 November 2013 (see Art. 1.4). Other procedures, such as for the joinder of additional parties and the appointment of an Emergency Arbitrator, outlined in the flowchart “The Steps in an HKIAC Administered Arbitration", apply to the proceedings, unless otherwise stated.

1. The requirements which must be satisfied for claims under multiple contracts to be brought in the same proceedings are set out in Art. 29. Unless otherwise agreed by the parties, Art. 29 will only apply to arbitrations commenced in accordance with an arbitration agreement entered into after 1 November 2013 (see Art. 1.4).

2. Art. 4: the Notice of Arbitration must be submitted to HKIAC and also served by Claimant on all other parties; it should have certain content (see Art. 4.3) and be accompanied by payment of the Registration Fee (see Art. 4.4, Sch. 1 and the Schedule of Fees); it may include the Statement of Claim (see Art. 4.6 and 16).

3. Art. 5: the Answer to the Notice of Arbitration must be submitted to HKIAC and also served by Respondent on all other parties within 30 days from Respondent’s receipt of the Notice of Arbitration; it should have certain content (see Art. 5.1) and may include the Statement of Defence (see Art. 5.3 and 17). Any counterclaim or set-off defence shall, to the extent possible, be raised with Respondent’s Answer to the Notice of Arbitration (see Art. 5.4).

4. Art. 40 and the Practice Notes on Arbitral Tribunal's Fees, Expenses, Terms and Conditions Based on Schedules 2 and 3 Para. 7.1: as soon as practicable, and in any event within 15 days, after receipt of the Notice of Arbitration by Respondent, HKIAC will request Claimant and Respondent to deposit an advance for costs; in principle this will be an equal amount, however, where a Respondent submits a counterclaim, or it otherwise appears appropriate in the circumstances, HKIAC may request separate deposits. HKIAC may request further deposits from each party within 15 days from receipt of a counterclaim or set-off defence (see Practice Notes on Arbitral Tribunal's Fees, Expenses, Terms and Conditions Based on Schedules 2 and 3 Para. 7.2). Supplementary deposits may be requested during the course of the arbitration.

5. See Art. 7, 8, 9, 10 and 11. See also flowchart “The Steps in an HKIAC Administered Arbitration".

6. Art. 5.6: once the Registration Fee has been paid and the Tribunal confirmed, HKIAC will transmit the case file to the Tribunal.

7. A party wishing to consolidate two or more arbitrations pending under the HKIAC Rules must submit a Request for Consolidation to HKIAC (see Art. 28.1). The party making the request must provide copies to all other parties and to any confirmed arbitrators (see Art. 28.2). HKIAC may adjust its Administrative Fees and the Tribunal's fees (where appropriate) after a Request for Consolidation has been submitted (see Art. 28.9).

8. Art. 28.1(a): HKIAC has the power to consolidate two or more arbitrations pending under the Rules where the parties agree to consolidate.

9. Art. 28.1(b): HKIAC has the power to consolidate two or more arbitrations pending under the Rules where all of the claims in the arbitrations are made under the same arbitration agreement.

10. See Art. 28.1(c). HKIAC has the power to consolidate two or more arbitrations pending under the Rules where the claims are made under more than one arbitration agreement, if (i) a common question of law or fact arises in both or all of the arbitrations; and (ii) the rights to relief claimed are in respect of, or arise out of, the same transaction or series of transactions, and (iii) HKIAC finds the arbitration agreements to be compatible.

11. See Art. 28.1 and 28.3.

12. In deciding whether to consolidate, HKIAC will take into account the circumstances of the case. Relevant factors may include, but are not limited to, whether one or more arbitrators have been designated or confirmed in more than one of the arbitrations, and if so, whether the same or different arbitrators have been confirmed (see Art. 28.3). HKIAC will provide copies of its decision to all parties and to any confirmed arbitrators in all arbitrations (see Art. 28.4).

13. Art. 28.4: where HKIAC decides to consolidate two or more arbitrations, the arbitrations will be consolidated into the arbitration that commenced first, unless all parties agree or HKIAC decides otherwise, taking into account the circumstances of the case. The consolidation of two or more arbitrations is without prejudice to the validity of any act done or order made by a court in support of the relevant arbitration before it was consolidated (see Art. 28.5). Unless the parties agree otherwise, the expedited procedure will not apply to any consolidated proceedings under Art. 28 (see Art. 41.3).

14. See Art. 28.6. The revocation of the appointment of an arbitrator is without prejudice to (i) the validity of any act done or order made by that arbitrator before his or her appointment was revoked, (ii) his or her entitlement to be paid his or her fees and expenses subject to Schedule 2 or 3 as applicable, or (iii) the date when any claim or defence was raised for the purpose of applying any limitation bar or any similar rule or provision (see Art. 28.7).

15. See flowchart “The Steps in an HKIAC Administered Arbitration".

16. Art. 30.1: when it is satisfied that the parties have had a reasonable opportunity to present their case, the Tribunal will declare the proceedings closed. Thereafter, no further submission or argument may be made, or evidence produced. The Tribunal may re-open the proceedings before the award is made in exceptional circumstances (see Art. 30.2).

17. See Art. 10.3 and Schedule 1. HKIAC may adjust its Administrative Fees and the Tribunal's fees (where appropriate) after a Request for Consolidation has been submitted (see Art. 28.9). HKIAC and the Tribunal have a lien over any awards issued by the Tribunal to secure the payment of their outstanding fees and expenses, and may accordingly refuse to release any such awards to the parties until all such fees and expenses have been paid in full (see Paragraph 7 of Schedules 2 and 3).

18. Art. 34: awards will be in writing and are final and binding on the parties (see Art. 34.2); by agreeing to the HKIAC Administered Arbitration Rules parties undertake to comply without delay with any award or order of the Tribunal (see Art. 34.3). They also waive any objection, on the basis of any decision to consolidate, to the validity and/or enforcement of any award made by the Tribunal in the consolidated proceedings, in so far as such waiver can validly be made (see Art. 28.8). Any award will state the reasons upon which it is based unless the parties have agreed that no reasons are to be given (see Art. 34.4).