Proposed Amendments to the 2018 HKIAC Administered Arbitration Rules

The Hong Kong International Arbitration Centre (“HKIAC“) has proposed amendments to the 2018 version of its Administered Arbitration Rules (the “2018 Rules“) through consultation. A copy of the amended draft Rules is available here.

The key proposed amendments to the 2018 Rules are summarised as follows:

  1. Diversity in arbitral appointments (see proposed Art. 10): parties and co-arbitrators are encouraged to consider “diversity” when selecting arbitrators, but the HKIAC offers no definition or guiding principles regarding the concept of “diversity“.
  2. Clarifications of the arbitral tribunal’s powers (see proposed Art. 14.6, 14.9 and 14.10): the proposed amendments clarify that the tribunal has power to determine preliminary issues and enhance the HKIAC’s role in matters that impact the integrity of the arbitral process, such as the appointment of arbitrators and revocation of an arbitrator’s mandate.
  3. Enhancements to the mechanism for a single arbitration to proceed under multiple contracts (see proposed Art. 30.2): the proposed amendments allow the HKIAC to appoint the arbitral tribunal if it determines that the arbitration is properly commenced under Article 30, with parties deemed to have waived their rights to designate an arbitrator.
  4. Considerations for cost apportionment (see proposed Art. 35.3): factors such as the scale and complexity of the dispute, parties’ conduct, outcome related fee structure agreements, and adverse environmental impact are proposed to be taken into account when deciding how to apportion arbitration costs.
  5. Enhanced information security provisions (see proposed Art. 47): Data protection and cybersecurity are critical in international arbitration, as demonstrated by the hacking incident of the Permanent Court of Arbitration website during the China-Philippines maritime border dispute in July 2015. In light of this background, the HKIAC has taken steps to address the risk of cyberattacks such as recognising secure online repositories as valid means of communication and is now proposing amendments empowering the arbitral tribunal to make decisions, orders, or awards in respect of any breaches of information security measures agreed upon by the parties or directed by the tribunal.
  6. Determination of fees payable to arbitrators (see proposed §5.1 of Schedule 2 and §5 of Schedule 3): the proposed amendments grant the HKIAC the authority to review and adjust the fees and expenses of the arbitral tribunal if parties have chosen to pay based on an hourly rate. Similarly, if parties have elected to pay by reference to an ad valorem fee scale, the HKIAC is empowered to determine the amount of fees and expenses to be paid to any arbitrator.
  7. Clarifications of the powers of the emergency arbitrator (“EA“) (see proposed §10 of Schedule 4): the 2018 Rules include an emergency arbitration mechanism which enables parties to seek urgent interim relief from an emergency arbitrator prior to the establishment of the arbitral tribunal. Typically, the HKIAC appoints an EA within 24 hours of receiving an application, and the EA will make an emergency decision within 14 days. The proposed amendments clarify that the EA has the power to issue any order during this 14-day timeframe.

The consultation period concluded on the 23rd of this month. We shall await further updates from the HKIAC regarding the finalisation of the timing and form of the amendments.

29 February 2024
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