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The 2013 HKIAC Administered Arbitration Rules Unveiled
IMMEDIATE PRESS RELEASE
12 June 2013
The Hong Kong International Arbitration Centre (HKIAC) is pleased to announce the publication of the revised HKIAC Administered Arbitration Rules (the "2013 HKIAC Rules"), which will come into force on 1 November 2013.
Bourne out of five years' experience of the use of the original Administered Arbitration Rules ("2008 HKIAC Rules"), public consultation, review by the HKIAC Rules Revision Committee and extensive consultation with practitioners, arbitrators and other stakeholders, the 2013 HKIAC Rules seek not only to draw on users' feedback to further strengthen HKIAC's service to parties and professionals but also to ensure the 2013 HKIAC Rules continue to reflect the very best of modern practice in international commercial arbitration.
The 2013 HKIAC Rules maintain HKIAC's signature 'light touch' approach, seeking to facilitate effective institutional involvement within a framework that recognizes the importance of party autonomy. Given its excellent track record and general consensus that the 2008 HKIAC Rules have been working well, many of the changes clarify, but do not modify, the substance of HKIAC administered arbitration. Nevertheless some innovative features have been included to ensure the 2013 HKIAC Rules remain state of the art and a leader in the field in meeting the evolving needs of users.
Highlights of the key changes to the Rules include:
Multiple Parties and Multiple Contracts
In recognition of the growing complexity of commercial disputes, the 2013 HKIAC Rules maximize the ability of HKIAC and tribunals appointed in accordance with its Rules to handle multi-party and multi-contract disputes. The 2013 HKIAC Rules enhance the joinder provision by expanding the tribunal's ability to join parties and allowing additional parties to submit requests to join an arbitration. HKIAC itself also gains prima facie power to join an additional party if a request for joinder is submitted prior to the tribunal's constitution. The 2013 HKIAC Rules will also allow HKIAC to consolidate two or more arbitrations at a party's request. Under the 2013 HKIAC Rules, claims arising out of or in relation to multiple contracts can also be raised in a single proceeding. HKIAC may make arbitrator appointments in place of the parties to advance the process of expanded or consolidated proceedings.
Improvements on the Expedited Procedure
Not a new concept to HKIAC, the 2013 HKIAC Rules broaden the circumstances in which parties may apply for their dispute to be determined on an expedited basis. Although application of the expedited procedure will become elective (as opposed to automatic as it is now), the 2013 HKIAC Rules raise the applicable monetary threshold for the procedure to HK $25,000,000 (the equivalent of over US $3 million). Parties may also apply for expedited procedure when both parties agree or in situations of exceptional urgency. If applicable, the expedited procedure will result in a presumption that a sole arbitrator will hear the proceeding and the award will rendered within 6 months of the transmission of the file to the tribunal.
Improved Terms and Conditions to Streamline the Arbitrator Appointment Process
The revisions introduce two new features for arbitrator appointment: a fee cap for the agreed hourly rate scheme and standard terms of appointment. Since it began fully administering cases in 2008, HKIAC has offered parties a unique ability to foresee and control their costs – a choice regarding the determination of the tribunal's fees calculated either on the basis of the amount in dispute, or on the basis of agreed hourly rates. Where parties choose the latter, under the 2013 HKIAC Rules the arbitrator's rate shall not exceed the fee cap of HKD 6,500 per hour (the equivalent of approximately US $ 830) barring a contrary agreement by the parties. The 2013 HKIAC Rules also institute standard terms of appointment (subject to variation through party agreement or by HKIAC) which must be agreed by all arbitrators appointed in accordance with the 2013 HKIAC Rules. The uniformity created by these two features will facilitate negotiations between parties and arbitrators, leading to a quicker start to the substantive proceedings.
Owing to a reluctance to rely on national courts and the increased confidence parties have on the arbitral process, parties increasingly ask arbitral institutions to be able to effectively and efficiently handle applications for interim measures prior to the appointment of a tribunal. Addressing this issue, the revisions will enable parties to apply for emergency relief concurrent to or following the filing of a Notice of Arbitration. In consideration of the urgent nature of emergency proceedings, the 2013 HKIAC Rules provide short deadlines for an emergency arbitrator's appointment and decision on the application for emergency relief. The amendments are timely in light of anticipated changes to the Hong Kong Arbitration Ordinance which will facilitate the emergency arbitrator process, clarifying that the emergency relief ordered will be enforceable in Hong Kong.
In 2012, HKIAC enjoyed a 40% increase in the number of cases fully administered in accordance with its rules. By building upon the success of our existing rules to ensure they continue to be 'state of the art' and reflective of best practice in international arbitration, there is no doubt these numbers will continue to grow as HKIAC cements its position as a world-class arbitral institution adept at meeting the changing needs of arbitration users and ensuring the efficiency and effectiveness of the arbitral process.
The following persons can also be contacted in relation to this Press Release:
Members of the Rules Committee
Please click the following links to access information about the 2013 HKIAC Administered Arbitration Rules:
ABOUT THE HONG KONG INTERNATIONAL ARBITRATION CENTRE
To learn more about the HKIAC, please visit www.hkiac.org.