Hong Kong: Multi-Party Arbitrations

Last Updated: 25 October 2001
Article by Justyn Jagger

International trade and projects often involve a host of parties joined by a chain or network of separate contracts. When a dispute emerges at one point in this matrix of contractual arrangements, it can often give rise to legal actions under other related contracts. The costs of duplication and the risk of inconsistent decisions will inevitably grow if these actions proceed separately.

Various forms of multi-party arbitration have been developed to counter such problems. Although this raises difficult issues in the appointment and jurisdiction of the tribunal, those issues can be resolved successfully through careful drafting of the arbitration agreements and by proper consideration of procedural issues at an early stage. By addressing these matters at the outset in the various contracts, the parties can achieve a successful arbitration of all related disputes producing consistent awards at minimum cost.

Types of Multi-Party Arbitration

There are four main types of multi-party arbitration:

  • Unified multi-party arbitration involves all parties joining in one proceeding to resolve all disputes before a single arbitral tribunal.
  • Consolidated arbitrations involve two or more separately commenced arbitrations that are then consolidated and thereafter proceed before a single tribunal as an unified multi-party arbitration.
  • Concurrent bilateral arbitrations involve two or more separate arbitrations that proceed before the same tribunal at common hearings, thus allowing common issues in the various arbitrations to be considered and resolved together.
  • Parallel bilateral arbitrations involve two or more separate arbitrations that proceed before the same tribunal but at separate hearings and without any exchange of documentary or witness evidence between the separate proceedings.

Appointment of the Tribunal

A fundamental problem in multi-party arbitration arises from the inherent right of each party to nominate its own arbitrator. Where there are more than two parties to the arbitration, there will not be enough arbitral appointments to go round. If a party to the arbitration is thus deprived of the right to appoint an arbitrator, it may successfully challenge the final award. The French Court upheld such a challenge in 1994 on the basis that " the principle of the equality of the parties in the appointment of the arbitrators is a matter of public policy".1

There are two possible approaches to this problem. Firstly, the arbitration clause may provide that all parties on one side of the arbitration, the joint claimants or joint respondents, shall make a joint nomination of one arbitrator, failing which the governing arbitration institution shall make that appointment for them. This approach seeks to preserve the common practice of having each side appoint one arbitrator, with the presiding arbitrator then being appointed by a neutral body. Alternatively, the arbitration clause may simply provide that all arbitrators shall be appointed by the governing arbitration institution.

Whichever approach is adopted, multi-party arbitrations should proceed before an arbitration institution in order to handle problems in the appointment of the tribunal in the ways described above. Many arbitration institutions, including the Singapore International Arbitration Centre and the Hong Kong International Arbitration Centre, recognise these problems and provide expressly in their rules that the power of appointment in the absence of agreement shall be exercised by the institution.

The Jurisdiction of the Tribunal

The purpose of multi-party arbitration is to ensure consistency in the decisions and to minimise cost and delay. It would defeat this purpose if the tribunal could hear disputes between parties A and B and between parties B and C but not disputes between parties A and C. The tribunal must have jurisdiction to deal with all disputes arising between all parties. These jurisdictional issues must be addressed when drafting the multi-party arbitration clause or subsequently in the arbitration agreement or terms of reference.

The starting point is that consistent arbitration clauses should be used in all relevant contracts and sub-contracts. These clauses should provide that all disputes are to be referred to unified multi-party arbitration consolidated or heard concurrently before a single tribunal at one venue and governed by one set of rules. If any of these elements is absent a party may then choose, for tactical reasons, to commence separate proceedings in a separate jurisdiction and to appoint a separate tribunal although the facts and issues will be the same. The objectives of consistency and cost-saving are then lost.

Institutional Rules & Local Law

The importance of addressing these matters in the contracts stems in part from the lack of relevant provisions in institutional rules or local laws. Arbitration is a consensual process with high regard for party autonomy in decisions as to how the dispute should proceed. In consequence, local laws and the rules of arbitration institutions will rarely, in the absence of express agreement, force the parties to consolidate arbitrations or to proceed concurrently. Contrast the procedural rules of litigation that allow or even compel joinder of third parties and consolidation of related actions.

The one notable exception is section 6B of the Hong Kong Arbitration Ordinance that allows the Hong Kong Court to order consolidation or concurrent hearings of domestic arbitrations (and international arbitrations that are to proceed as domestic arbitrations). That approach has not been followed in (for example) England’s Arbitration Act 1996 or Singapore’s Arbitration Act 1953 and International Arbitration Act 1994. The English Court has, however, recognised the need for consistency. In a 1982 case it decided that it had power to order the appointment of the same arbitrator or tribunal in parallel arbitrations where it appeared appropriate.2 In contrast, Article 1046 of the Netherlands Code of Civil Procedure provides that any of the parties may request the President of the District Court of Amsterdam to order consolidation of the proceedings if the arbitral proceedings issued before an arbitral tribunal is connected with the subject matter of proceedings commenced before another arbitral tribunal.


By their nature multi-party projects and trading arrangements may throw up disputes involving several parties and several different contracts. Such disputes, however, often involve related factual and legal issues. To avoid the unnecessary time and expense of resolving those disputes through separate arbitrations, and to avoid the risk of inconsistent decisions, the contracting parties should carefully consider multi-party arbitration clauses when preparing the project documentation. If they have not done so, they should consider the consolidation or concurrent hearing of separate arbitrations as soon as the disputes arise.

  1. BKMI Industrieanlagen BmbH et al v. Dutco Construction (1994) ADRLJ 36
  2. Abu Dhabi Gas Liquefaction C. Ltd v. Eastern Bechtel Corporation (1982) Lloyd’s Rep 425

"© Herbert Smith 2002

The content of this article does not constitute legal advice and should not be relied on as such. Specific advice should be sought about your specific circumstances.

For more information on this or other Herbert Smith publications, please email us."

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions