The Hong Kong International Arbitration Centre (“HKIAC”) is consulting on amendments to the 2013 version of its Administered Arbitration Rules. The proposed changes incorporate a number of new provisions and amendments, highlighting HKIAC’s efforts to respond to the needs of its users and technological advances in dispute resolution. The changes may impact on how parties conduct their HKIAC arbitrations in the future and users are invited to submit comments by 2 October 2017.
The Hong Kong International Arbitration Centre (“HKIAC”) has shown its determination to remain at the forefront of international arbitration by proposing and consulting on changes to its current version of the HKIAC's Administered Arbitration Rules, which came into effect on 1 November 2013 (“2013 Rules”).
There are seven key proposed amendments to the 2013 Rules.
Use of secured online repositories to store any written communication
The proposed rules provide for use of a secured online repository approved by the HKIAC for submitting and storing written communications where parties have agreed to the use of such repository. Written communications will be deemed to be received by the receiving parties at the local time of the place of receipt. Users are asked for views on whether the repository should be established and maintained by the HKIAC or whether parties should be allowed to use their own repositories.
The proposed rules introduce multilingual procedures for any arbitration where there are two or more languages of arbitration. In summary, where all members of the arbitral tribunal are proficient in all the languages of the arbitration, the arbitration may be conducted in any language of the arbitration. Where a member of the tribunal is not proficient in all languages of the arbitration, written communications shall be submitted in all languages of the arbitration, and translation/interpretation should be provided when communications are made in a language in which a tribunal member is not proficient at.
Expanded provisions for single arbitration under multiple contracts
The proposed amendments include a provision for claims arising out of multiple contracts to be commenced in a single arbitration (provided certain conditions regarding the issues in play, and the relief claimed, are met and the relevant arbitration agreements are compatible), thereby providing a further procedural device for such circumstances.
New grounds for Joinder
Two new grounds for joinder have been proposed. First, where all parties, including the additional party, expressly agree. Second, where the additional party is bound by a different arbitration agreement under the HKIAC Rules, but there is a common question of law or fact, the claims arise out of the same transaction or a series of related transactions, and the arbitration agreements are compatible.
The proposed amendments increase flexibility in expressly allowing the tribunal to hear multiple proceedings at the same time, or one immediately after the other, or stay those proceedings until after the determination of any other.
Alternative means of dispute settlement
Under the proposed amendments there is provision for parties to pursue other means of dispute settlement after the commencement of the arbitration, and resume the arbitration upon a party’s request (eg: “Arb-Med-Arb”) under the proposed rules. The proposed rules also expressly prohibit any arbitrator from participating in the alternative dispute settlement mechanism unless parties expressly consent.
Third party funding
New provisions are proposed to allow disclosure of information to a third party funder. Users views are also being sought as to whether to add a new provision to allow the tribunal to award costs of third party funding as part of costs of arbitration.
Other proposed procedures
The HKIAC is also consulting on whether it should issue a set of rules for investment treaty arbitration and a set of expedited procedures to allow the tribunal to determine issues of fact or law in a preliminary or separate phase, or in a summary fashion.
Reflections and the way forward
It can be seen from the proposed changes that the HKIAC is making efforts to incrementally update its rules to address practical problems common in international arbitrations today. If adopted, the amendments would buttress the HKIAC’s attractiveness as an arbitration administrator.
Online storage of documents may be an efficient and effective solution for users involved in document intensive proceedings. Law firms often have in-house repository solutions that could be ideal candidates for HKIAC approval. A recent ICC Commission report considered the use of IT in international arbitration such as online repositories and demonstrates that various arbitration institutions are attempting to respond to users’ preferences and technological developments.
The introduction of rules for investment arbitration appear apt given increasing foreign direct investment flows in the region. Such rules may require deviations from the existing 2013 Rules to accommodate the involvement of states and state entities in international commercial arbitration and investment treaty arbitration.
The proposed amendments related to single arbitration under multiple contracts and concurrent proceedings demonstrates the HKIAC continued willingness to provide innovative solutions in an area which can give rise to practical difficulties.
Finally, the HKIAC’s suggestions regarding disclosure of third party funding of arbitration are timely following the recent passage of the Arbitration and Mediation Legislation (Third Party Funding) (Amendment) Bill 2016.
Users are invited to submit their comments on the proposed amendments to the rules by 2 October 2017.