th December 2010 The new Arbitration Ordinance Prepared and Presented by Robin Peard F.C.I.Arb., F.H.K.I.Arb., F.S.I.Arb. Chartered Arbitrator and Senior Consultant

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3 New York Convention on the Recognition and Enforcement of Foreign Arbitration Awards applied to Hong Kong in 1975 Case stated procedure replaced by appeal on point of law in At the same time concept of arbitrator being able to act as mediator with consent of parties introduced. Overview Up to 1990 Hong Kong arbitration law followed English law in most respects. Law applied to all arbitrations (unitary regime)

4 Setting up of Hong Kong International Arbitration Centre ("HKIAC") Evolution

5 Uncitral Model Law ("UML") applied to international arbitration. So two regimes (domestic and international). Restrictions on legal representation in all arbitrations lifted Costs of (e.g.) non-Hong Kong qualified lawyer recoverable Some radical changes to attract international arbitrations to Hong Kong Evolution

6 Evolution Enact urgent amendments HKIAC Committee Report recommended Urgent amendments needed in light of experience of UML in practice and English Arbitration Act 1996 Long term changes

7 Evolution Enact urgent amendments 1997 Default appointments by HKIAC HKIAC decides number (one or three) of arbitrators in international arbitration in default of agreement Objectives and principles set out in Section 2AA

8 Objectives and principles of current Ordinance Section 2AA 1. The object of this Ordinance is to facilitate the fair and speedy resolution of disputes by arbitration without unnecessary expense 2. This Ordinance is based on the principles that (a) subject to the observance of such safeguards as are necessary in the public interest, the parties to a dispute should be free to agree how the dispute should be resolved; and (b) the Court should interfere in the arbitration of a dispute only as expressly provided by this Ordinance

9 Responsibilities of tribunal Section 2GA (1) When conducting arbitration proceedings or exercising any of the powers conferred on it by this Ordinance or by the parties to any such proceedings, an arbitral tribunal is required ( a) to act fairly and impartially as between the parties, giving them a reasonable opportunity to present their cases and to deal with the cases of their opponents; and (b) to use procedures that are appropriate to the particular case, avoiding unnecessary delay and expense, so as to provide a fair means for resolving the dispute to which the proceedings relate

10 Responsibilities of tribunal (2) When conducting arbitration proceedings, an arbitral tribunal is not bound by the rules of evidence and can receive any evidence that it considers relevant to the proceedings, but must give such weight to the evidence adduced in the proceedings as it considers appropriate Section 2GA

11 Note A number of provisions applicable to domestic and international arbitration (e.g. specific powers of tribunal (e.g. to order disclosure of documents), interest, costs, extension of time, delay) Moving back to a unitary regime

12 Long term changes Ordinance to be redrawn to apply UML to both domestic and international arbitrations together with necessary additions to enable Hong Kong arbitration law to serve users' needs both domestically and internationally

13 Hong Kong Institute of Arbitrators (HKIArb) Committee Supported by HKIAC and Secretary for Justice to carry forward long term changes recommended by HKIAC Committee Consultation July 2002 to February 2003 Final Report 30 April 2003

14 Main change to structure of Arbitration Ordinance Part IPreliminary Part IAProvisions applicable to domestic and international arbitration Part IIDomestic Arbitration Part IIAInternational Arbitration Part IIIAEnforcement of Mainland Awards Part IVEnforcement of Convention Awards Part VGeneral Present structureProposed structure Part 1Preliminary Part 2General Provisions Part 3Arbitration Agreement Part 4Composition of Arbitral Tribunal Part 5Jurisdiction of Arbitral Tribunal Part 6Interim Measures and Preliminary Orders Part 7Conduct of Arbitral Proceedings Part 8Making of Award and Termination of Proceedings Part 9Recourse against Award Part 10 Recognition and Enforcement of Awards Part 11Provisions which may be expressly opted for or automatically apply Part 12Miscellaneous Part 13 Repeal, Savings and Transitional Provisions Part 14Consequential and Related Amendments

15 The Bill It has 112 Sections and 4 Schedules. It is not intended to be a codification of arbitration law but brings together in user friendly form the applicable UML provisions and required additions.

16 Notable provisions Additions to UML in 2006 have been considered and generally applied. Current provisions are reproduced e.g. Section 3 sets out present Section 2AA Arbitration Ordinance (Objectives and Principles). Section 12 applies Article 5 UML (limited Court intervention) and Section 46 deals with the arbitral tribunal's obligations but "reasonable" not "full" opportunity to present a party's case (cf Article 18 UML). Section 47(3) allows the tribunal a wide discretion as to receipt and assessment of evidence. Sections 74 to 78 deal with costs including the costs and expenses of the Tribunal. Sections 79 and 80 deal with interest. Article 3 UML Receipt of Written Communications. Added to by including written communications sent by means by which information can be recorded and transmitted to the addressee subject to there being a record of receipt by the addressee. Relevant to Article 21 UML (Commencement of arbitral proceedings) - request "received" by the Respondent.

17 Article 7 - Option 1 UML adopted by Uncitral in 2006 applies (arbitration agreement in writing). Broad definition of writing. Article 8 - Stay of proceedings Compulsory except (a) where the dispute is within the jurisdiction of the Labour Tribunal when the Court has a discretion; and (b) where the dispute is in respect of a consumer contract when the stay is subject to Section 15 of the Control of Exemption Clauses Ordinance (Cap 71). Conditional stay in Admiralty proceedings. (See Section 20(2) - (9)).

18 New 2006 UML additions on interim measures and preliminary orders granted by the tribunal (Articles 17 to 17G UML). (a) Definition of interim measures (preserving status quo, preserving assets, preserving evidence, preventing harm to arbitral proceedings). (b) Conditions for granting interim measures; (c) Preliminary orders ex parte (initially maximum 20 days); (d) Security by applicant; (e) Duty of disclosure; (f) Costs and damages if interim measure or preliminary order should not have been granted.

19 Court may order interim measures in aid of arbitrations in and outside Hong Kong. However Court can only grant interim measures in aid of arbitration outside Hong Kong where the award would be enforceable in Hong Kong and the interim measure is of a description granted by the Court in Hong Kong (see Section 45). Sections 30 and 31 - Umpires - special provisions. Section 53(3) & (4) - Peremptory orders. Section 61 - Enforcement of orders and directions. Court can enforce but will only enforce orders and directions of foreign tribunal if the order or direction is of a type which could be made by a HK tribunal. Section 62 - Entitlement of arbitrator to fees and expenses where his mandate terminates.

20 Section 74 - Tribunal will assess costs unless Court taxation agreed by parties (Section 75). No need to follow Court scales and practices. Section 77 - Court will assess Tribunal's fees and expenses in case of dispute. No payment into Court in arbitration (073 amended). - concept not familiar to overseas parties - Calderbank offer can be taken into account without payment in at discretion of Tribunal (see Chinney Construction v Po Kwong Marble Factory 2005 (3) HKLRD 758). Recourse against and enforcement of awards - Present provisions (including special provisions for Mainland awards) to continue.

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