Comparative Guides
Welcome to Mondaq Comparative Guides - your comparative global Q&A guide.
Our Comparative Guides provide an overview of some of the key points of law and practice and allow you to compare regulatory environments and laws across multiple jurisdictions.
Start by selecting your Topic of interest below. Then choose your Regions and finally refine the exact Subjects you are seeking clarity on to view detailed analysis provided by our carefully selected internationally recognised experts.
Results: 4 Answers
International Arbitration
8.
The tribunal
8.1
How is the tribunal appointed?
 
Hong Kong
The starting point is that the parties are free to agree on the procedure for appointing the arbitrator(s) (Section 24(1) of the Arbitration Ordinance (AO), adopting Article 11(2) of the Model Law).

The procedures for commencing arbitration and appointing arbitrators are often embodied in the arbitration agreement. Subject to the arbitration agreement and the procedural rules adopted by the parties, for arbitral proceedings to commence and the tribunal to be appointed, the normal procedure requires a notice or request for arbitration to be served, in which the claimant must propose its choice of arbitrator to the respondent(s). The respondent may then counter-propose its own arbitrator. If the parties fail to agree on the appointment(s) of arbitrator(s), the claimant may request the appointment authority to appoint an arbitrator for the parties.

For more information about this answer please contact: Nick Gall from Gall
8.2
Are there any requirements as to the number or qualification of arbitrators in your jurisdiction?
 
Hong Kong
The starting point is that the parties are free to agree on a procedure of appointing the arbitrator(s) (Section 24(1) of the AO, adopting Article 11(2) of the Model Law). No person shall be precluded by reason of nationally from acting as an arbitrator, unless otherwise agreed by the parties (Section 24(1) of the AO, adopting Article 11(1) of the Model Law).

The parties may agree that an arbitrator must possess certain characteristics or qualifications by way of stipulating these in the arbitration agreement.

If the parties fail to agree on the number of arbitrators, the following default procedures require either one or three arbitrators to be appointed:

  • In an arbitration with three arbitrators, each party will appoint one arbitrator and those two arbitrators will appoint the third arbitrator (Section 24(1) of the AO, adopting Article 11(3)(a) of the Model Law).
  • In an arbitration with a sole arbitrator, if the parties are unable to agree on the arbitrator, one will be appointed, at the parties’ request, by the court or the Hong Kong International Arbitration Centre (HKIAC) (Section 24(1) of the AO, largely adopting Article 11(3)(b) of the Model Law).
  • In an arbitration with an even number of arbitrators, each party must appoint the same number of arbitrators (Section 24(2) of the AO).
  • In an arbitration with an uneven number of arbitrators greater than three:
    • each party will appoint the same number of arbitrators; and
    • the HKIAC will appoint the remaining arbitrator or arbitrators (Section 24(3) of the AO).

Where a party fails to appoint an arbitrator in accordance with an agreed or default procedure, the HKIAC can make the necessary appointment (Sections 24(1) to (4)).

For more information about this answer please contact: Nick Gall from Gall
8.3
Can an arbitrator be challenged in your jurisdiction? If so, on what basis? Are there any restrictions on the challenge of an arbitrator?
 
Hong Kong
Section 25 of the AO (adopting Article 12 of the Model Law in its entirety) provides for two exclusive grounds:

  • justifiable doubts as to the arbitrator’s impartiality or independence; and
  • non-possession of qualifications agreed to by the parties.

A party may challenge an arbitrator whom it has appointed, or in whose appointment it has participated, only for reasons of which it becomes aware after the appointment has been made.

Section 26 of the AO (largely adopting Article 13 of the Model Law) provides that the parties are free to agree on a procedure for challenging an arbitrator. If the parties have not agreed on a procedure, the following default provisions will apply:

  • A party which intends to challenge an arbitrator must, within 15 days of becoming aware of the constitution of the arbitral tribunal or of any of the grounds set out in Section 25 of the AO, send a written statement of the reasons for the challenge to the arbitral tribunal. Unless the challenged arbitrator withdraws from office or the other party agrees to the challenge, the arbitral tribunal will decide on the challenge (Section 26(1) of the AO).
  • If the challenge under the above procedure is unsuccessful, the challenging party can request the court or another authority (eg, the HKIAC) to decide on the challenge. The challenging party must do so within 30 of receiving notice of the decision rejecting the challenge. The court or other authority’s decision may not be appealed.
For more information about this answer please contact: Nick Gall from Gall
8.4
If a challenge is successful, how is the arbitrator replaced?
 
Hong Kong
If an arbitrator becomes de jure or de facto unable to perform his or her duties, or for other reasons fails to act without under delay, his or her mandate will terminate if he or she withdraws from office or if the parties agree on the termination. If the arbitrator refuses to withdraw from office or the parties cannot agree, any party may request the court or other authority (eg, the HKIAC) to decide on the termination of the arbitrator’s mandate, which decision is not subject to appeal (Section 27 of the AO, adopting Article 14 of the Model Law in its entirety).

Where the mandate of an arbitrator terminates under Section 26 or 27 of the AO – whether because of his or her withdrawal from office for any other reason, because of the revocation of his or her mandate by agreement of the parties, or in any other case of termination of his or her mandate – a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced (Section 28, adopting Article 15 of the Model Law in its entirety)

For more information about this answer please contact: Nick Gall from Gall
8.5
What duties are imposed on arbitrators? Are these all imposed by legislation?
 
Hong Kong
Section 46 of the AO requires the tribunal:

  • to be independent;
  • 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
  • to use procedures that are appropriate to the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for resolving the dispute to which the arbitral proceedings relate.

These requirements are mandatory and cannot be varied by the parties.

For more information about this answer please contact: Nick Gall from Gall
8.6
What powers does an arbitrator have in relation to: (a) procedure, including evidence; (b) interim relief; (c) parties which do not comply with its orders; (d) issuing partial final awards; (e) the remedies it can grant in a final award and (f) interest?
 
Hong Kong
(a) Procedure, including evidence?

Section 56 of the AO provides that unless otherwise agreed by the parties, when conducting arbitral proceedings, an arbitral tribunal may make an order:

  • requiring a claimant to provide security for the costs of the arbitration;
  • directing the discovery of documents or the delivery of interrogatories;
  • directing evidence to be given by affidavit; or
  • in relation to any relevant property:
    • directing the inspection, photographing, preservation, custody, detention or sale of the relevant property by the arbitral tribunal, a party to the arbitral proceedings or an expert; or
    • directing that samples be taken from, observations be made of, or experiments be conducted on the relevant property.

In addition, the tribunal has the power to:

  • appoint expert(s) to report on specific issues (Section 54 of the AO);
  • require the parties to provide the expert(s) with relevant materials for their inspection (Section 54 of the AO);
  • require the expert(s) to participate in the hearing (Section 54 of the AO); and
  • request the court to assist with taking evidence (Section 55 of the AO).

(b) Interim relief?

Section 35 of the AO (adopting Article 17 of the Model Law) provides that unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, grant interim measures. Such interim measures may include the following:

  • maintain or restore the status quo pending determination of the dispute;
  • take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral process itself;
  • provide a means of preserving assets out of which a subsequent award may be satisfied; or
  • preserve evidence that may be relevant and material to the resolution of the dispute.

(c) Parties which do not comply with its orders?

Pursuant to Section 61 of the AO, the court has the power to enforce an order or direction made by an arbitral tribunal (whether inside or outside Hong Kong) in the same manner as an order or direction of the court, but only with the leave of the court. Such order or direction includes an interim measure. For instance, in GE Transportation (Shenyang) Co Ltd v Lu Jinxiang unrep, HCMP 1792/2013, [2014] HKEC 253, the court imposed contempt sanctions on the defendant (three months’ imprisonment) for breach of an earlier order of the court enforcing an arbitration tribunal’s order of interim measures of protection.

(d) Issuing partial final awards?

Section 71 of the AO provides that unless otherwise agreed by the parties, an arbitral tribunal may make more than one award at different times on different aspects of the matters to be determined.

(e) The remedies it can grant in a final award?

Section 70 of the AO provides that unless otherwise agreed by the parties, the tribunal may award any remedy or relief that could have been ordered by the court if the dispute had been the subject of civil proceedings in court, including the ability to order specific performance of any contract. However, the tribunal cannot order specific performance of a contract relating to land or any interest in land (Section 70(2) of the AO).

(f) Interest?

Section 79 of the AO provides that unless otherwise agreed by the parties, the tribunal may award simple or compound interest from the dates and at the rates it considers appropriate.

Section 80(1) of the AO provides that interest is payable on money awarded by an arbitral tribunal from the date of the award at the judgment rate, except when the award provides otherwise.

Section 80(2) of the AO specifies that interest is payable on money awarded by the tribunal from the date of the award, unless otherwise provided by the tribunal. Interest is payable on costs from the date of the costs award, unless otherwise provided by the tribunal.

For more information about this answer please contact: Nick Gall from Gall
8.7
How may a tribunal seated in your jurisdiction proceed if a party does not participate in the arbitration?
 
Hong Kong
Section 53 of the AO (adopting Article 25 of the Model Law) provides that unless otherwise agreed by the parties, if, without showing sufficient cause:

  • the claimant fails to communicate its statement of claim in accordance with Section 51 of the AO, the arbitral tribunal shall terminate the proceedings;
  • the respondent fails to communicate its statement of defence in accordance with Section 51 of the AO, the arbitral tribunal shall continue the proceedings without treating such failure in itself as an admission of the claimant’s allegations; or
  • any party fails to appear at a hearing or to produce documentary evidence, the arbitral tribunal may continue the proceedings and make the award on the evidence before it.

To show sufficient cause for non-compliance, the defaulting party must demonstrate that, among other things, its compliance with the requirements set out in Section 46(2) (equality of treatment of the parties), Section 51 (obligation to submit pleadings/statement of case within the time limit agreed by the parties or directed by the tribunal) and Section 52 (requirement to give parties sufficient advance notice of hearings and meetings) of the AO.

For more information about this answer please contact: Nick Gall from Gall
8.8
Are arbitrators immune from liability?
 
Hong Kong
No. An arbitrator is liable in law for an act done or omitted to be done by the tribunal or mediator (or an employee or agent of the tribunal or mediator) in relation to the exercise or performance, or the purported exercise or performance, of his or her functions, if it is proved that the act done or omitted to be done was done dishonestly (Section 104 of the AO ).

For more information about this answer please contact: Nick Gall from Gall
Contributors