On 1 June 2024, the 2024 Hong Kong International Arbitration Centre Administered Arbitration Rules (2024 Rules) came into effect. The 2024 Rules build upon the foundation set by the previous 2018 Rules, with refinements aimed at boosting the overall efficiency and integrity of arbitration proceedings administered by HKIAC. Key areas of changes include conduct of the arbitral process, appointment and removal of arbitrator, and fees and costs of HKIAC arbitrations.
The new amendments are applicable to all HKIAC administered arbitrations from 1 June 2024 onwards, regardless of the date of the relevant arbitration agreement, unless a specific version of the HKIAC Rules is referenced in such agreement. Below is a summary of the key amendments.
Conduct of the arbitral process
HKIAC's General Power (Article 13.10): HKIAC's powers have been broadened to allow it to take any measures necessary to preserve the efficiency or the integrity of the arbitration, including to revoke the appointment of an arbitrator (see below).
Change in Legal Representation (Articles 13.8 and 13.9): Parties are now required to communicate any proposed changes or addition to any of the parties' legal representations promptly to all parties, the arbitral tribunal and HKIAC, prior to the implementation of such changes. In the event that such proposed changes give rise to a conflict of interest, the arbitral tribunal may take any measures necessary, after consulting with the parties.
Information Security and Environmental Impact (Articles 13.1 and 45A): It is now necessary for arbitral tribunals to give consideration to information security and environmental impact when adopting the suitable procedures for the conduct of the arbitration. To safeguard information security, the parties may agree on any reasonable measures, or the arbitral tribunal may give directions (after consulting with the parties), to ensure the security of any information shared, stored, or processed in relation to the arbitration. Environmental impact shall be taken into account in respect of apportionment of costs (see below).
Close of Proceedings (Article 31.1): The arbitral tribunal shall declare the closure of the arbitration proceedings when it is satisfied that the parties have had a reasonable opportunity to present their case, and no later than 45 days from the last directed substantive oral or written submissions. The time for the arbitral tribunal to render an award following closure of proceedings remains unchanged, being 3 months.
Appointment and Removal of Arbitrators
Diversity in Appointment of Arbitrators (Article 9A): Parties are encouraged to consider diversity when designating arbitral appointments. HKIAC is required to take into account diversity together with other relevant factors when exercising its authority to appoint arbitrators.
Appointment of Arbitrators in Single Arbitration under Multiple Contracts (Article 29.2): HKIAC shall appoint the arbitral tribunals for arbitrations properly commenced under multiple contracts, regardless of the parties' agreements under such contracts. In this instance, the parties are deemed to have waived their rights to designate the arbitral tribunal, in line with the approach taken in the consolidation of arbitrations.
Revocation of Appointment of Arbitrators (Article 13.10): In exceptional circumstance, HKIAC may, after consulting with the parties and the arbitral tribunal, revoke the appointment of any arbitrators if it considers that the arbitrator is prevented from or has failed to fulfil his or her functions according to the Rules or within the prescribed time limits.
Fees and costs of the proceedings
Factors in the Apportionment of Arbitration Costs (Article 34.4): The 2024 Rules provide a non-exhaustive list of relevant factors which the arbitral tribunal may take into account when determining and apportioning the costs of the arbitration, which includes the relative success of the parties; scale and complexity of the dispute; any outcome related fee structure agreement; and any adverse environmental impact arising out of the parties' conduct in the arbitration.
These changes to the HKIAC Rules are no doubt welcomed. Not only do they showcase the HKIAC's awareness and commitment to modern issues such as diversity, information security and environmental impact, they also demonstrate the arbitral institution's responsiveness to the growing demand for effective and efficient arbitrations.
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The HKIAC updated its arbitration rules, aimed at boosting the overall efficiency and integrity of arbitration proceedings administered by HKIAC. The updates showcase the HKIAC's awareness to modern issues and it responsiveness to the growing demand for effective and efficient arbitrations
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