Summary

HKIAC Amends its Rules to Waive Fees in certain Ad Hoc Arbitrations in Hong Kong


The Hong Kong International Arbitration Centre ("HKIAC") has amended the rules that govern its role as the statutory appointing authority under the Hong Kong Arbitration Ordinance (Cap 609) ("Ordinance"), the Arbitration (Appointment of Arbitrators and Mediators and Decision on Number of Arbitrators) Rules (Cap 609C) ("Amended Rules"), in order to be able to waive fees in certain arbitrations seated in Hong Kong. The Amended Rules come into force on 1 August 2019.


HKIAC has been the statutory appointing authority for arbitrations seated in Hong Kong since 1997. In that role, HKIAC determines the number of arbitrators or appoints arbitrators or mediators upon the request of a party under the Ordinance. Section 13(3) of the Ordinance authorises HKIAC to issue rules to facilitate the exercise of these statutory functions.


The Amended Rules allow HKIAC to waive its fee of HKD8,000 for exercising any of its functions under the Ordinance. HKIAC has published information as to how it will exercise its discretion to waive fees on its website. In summary, HKIAC will charge a one-off fee of HKD8,000 for performing all of its functions under the Ordinance in an arbitration in which the total amount in dispute is less than HKD2.5 million, unless HKIAC determines otherwise in appropriate circumstances.


The other amendments streamline the current process and are summarised below:


- Delivery of a request: A party is required to deliver its request for HKIAC's appointment or decision to the other party in accordance with section 10 of the Ordinance which deals with the manner of delivery and timing of receipt of written communications in arbitral proceedings.


- Time limits: The Amended Rules include several time limits for the parties to provide information before HKIAC proceeds to appoint or make a decision. HKIAC is empowered to amend these time limits if the circumstances of the case so justify, barring any time limits agreed by the parties.


- HKIAC's discretion to proceed: HKIAC has the discretion to decide whether and how to proceed to make an appointment or a decision following the expiration of a time limit.


Sarah Grimmer, HKIAC Secretary-General, says: "as the statutory appointing authority under the Hong Kong Arbitration Ordinance, HKIAC is committed to providing professional and cost-effective assistance to facilitate the efficient conduct of arbitrations seated in Hong Kong. The amendments introduced in the Amended Rules are a reflection of that commitment."


Teresa Cheng, GBS, SC, JP, Secretary for Justice of Hong Kong, welcomes the release of the Amended Rules and says: "I applaud HKIAC's willingness to respond swiftly to users' feedback and take steps to improve the cost-effectiveness of its services as the statutory appointing authority under the Arbitration Ordinance. I believe that the Amended Rules will enhance the attractiveness of Hong Kong as a seat of arbitration and further strengthen Hong Kong's status as a leading centre for international legal and dispute resolution services."


As subsidiary legislation in Hong Kong, the Amended Rules are enacted after consultation with the Department of Justice of Hong Kong and with the approval of the Chief Justice and the Legislative Council of Hong Kong.