Introduction
The Hong Kong International Arbitration Centre (“HKIAC”) has released its 2024 Administered Arbitration Rules (the “2024 Rules”) on 1 June 2024. The 2024 Rules bring HKIAC-administered arbitration up to date, taking into consideration the global developments in arbitration, including those brought about by Covid.
The key changes brought by the 2024 Rules include:
- Improving time and cost efficiency of arbitration
Arbitration is generally more costly than litigation because of the arbitrator fees and institution fees involved. Several new arbitration institutions, which have rules catered for online arbitration, have been established in recent years. The upside of online arbitration is it is more time efficient and economical than traditional face-to-face arbitration.
The 2024 Rules are updated with a view to improving time and cost efficiency of arbitration. For example, the HKIAC is now empowered to take measures to preserve the efficiency or integrity of the arbitration, including the revocation of the appointment of an arbitrator who has failed to fulfill his functions within the prescribed time limits (Art 13.10). The tribunal shall declare the proceedings closed 45 days from the last directed substantive oral or written submissions (Art 31.1). Also, the HKIAC shall confirm the designation of an arbitrator considering factors that may affect the efficiency or integrity of the arbitration (Art 9.3).
The implementation of the 2024 Rules means the arbitration proceedings can end quicker, the arbitral award can be granted sooner, and that HKIAC-administered arbitration is now more competitive in terms of efficiency. The amendments to the 2024 Rules are consistent with the continuous goal of the arbitration community to improve time and costs efficiency in arbitration proceedings.
- Enhancing diversity
Parties and co-arbitrators are encouraged to, and the HKIAC is required to take into account diversity when designating or appointing arbitrators (Art 9A). This is in line with the global trend of diversity (including gender, racial and ethnical diversity) in institutional international arbitration. For example, in 2020, the International Chamber of Commerce (“ICC”) announced that it had increased geographical diversity of arbitrators, and the proportion of women arbitrators had increased in the past five years.[1] There is a trend for arbitration institutions to include diversity language in their rules or guidance on arbitrator appointments. Members of the arbitration community have also drawn up a pledge to promote the representation of women on international arbitration tribunals.[2]
- Information security
Under the 2024 Rules, the tribunal shall take into account information security when adopting suitable procedures for the conduct of the arbitration proceedings (Art 13.1). The tribunal may give directions to the parties to protect the security of information shared (Art 45A.2). Also, the tribunal may make a decision, order or award regarding any breach of the information security measures (Art 45A.3). Since Covid, it is more common for parties to prepare e-bundles for online dispute resolution. The changes brought about by the 2024 Rules are important steps to protect information of parties disclosed in arbitration proceedings, such as trade secrets and personal data.
- Environmental impact
Under the 2024 Rules, the tribunal shall consider environmental impact when adopting suitable procedures for the conduct of the arbitration proceedings (Art 13.1). Also, in deciding how to apportion the costs of arbitration, the tribunal shall take into account any adverse environmental impact (Art 34.4). These changes are consistent with the environmental protection initiatives in the arbitration community generally, including making arbitration “greener” and more environmentally friendly. In addition, since Covid, it has become more natural for parties to use electronic rather than physical documents, to hold online rather than physical meetings, and to eliminate the need to travel overseas.
Conclusion
We welcome the changes brought by the 2024 Rules, which will align HKIAC-administered arbitration with the global trends in international institutional arbitration. With the 2024 Rules, HKIAC will continue to exist as one of the leading arbitration institutions in the world.
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[1] https://nyiac.org/wp-content/uploads/2021/09/ICC-Dispute-Resolution-2020-Statistics.pdf
[2] https://www.arbitrationpledge.com/
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Tiffany Lee, Of Counsel
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This article is introductory in nature. Its content is current at the date of publication. It does not constitute legal advice and should not be relied upon as such. You should always obtain legal advice based on your specific circumstances before taking any action relating to matters covered by this article. Some information may have been obtained from external sources, and we cannot guarantee the accuracy or currency of any such information.
