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Hong Kong has introduced a new Arbitration Ordinance which
became effective on 1st June 2011. This development brings some
significant changes and features in the way arbitration is to be
conducted in Hong Kong. Its aim is to promote Hong Kong as a strong
regional center for dispute resolution.
Unitary Regime
The most significant change is the abolition of the distinction
between domestic and international arbitration regimes. The new
Ordinance establishes a unitary regime of arbitration based on the
UNCITRAL Model Law. It is intended that the new Ordinance will be
self-contained (although it may be possible for parties to opt in
or out of the Model Law application).
Confidentiality
The new Ordinance provides that the disclosure of information
relating to any arbitral proceedings or awards is to be prohibited.
There is a default provision available so that although proceedings
can be heard in private, the Tribunal has a discretion to order
proceedings to be heard in open court.
Interim Measures
It also expressly gives arbitral tribunals the power to grant
interim measures including injunction relief. Additionally, the
Tribunals are now empowered to order the provision of security for
costs and direct the discovery of documents or the delivery of
interrogatories.
Med-arb
The new Ordinance is expected to assist a "hybrid"
style of dispute resolution. It now allows an arbitrator to act
also as a mediator after the arbitration has commenced provided
that the parties consent in writing. In the event that settlement
is not reached during the mediation process, the mediator can then
resume acting as an arbitrator. The parties should be made aware
that if confidential information is obtained by an arbitrator in
his role as mediator, in the event the mediation fails, the
arbitrator should disclose as much of the information as the
arbitrator considers is material before resuming the
arbitration.
Costs
The new regime provides the legal costs of arbitration
proceedings should be reviewed and assessed by the Tribunal itself.
The Court's role to assess costs is now only available if the
parties agree.
Role of Hong Kong International Arbitration Centre (HKIAC)
The statutory functions such as the appointment of arbitrators,
upon the failure of the parties to do so, which usually is vested
with the Courts, have been transferred to the HKIAC.
Summary
The new Ordinance gives more powers to the Tribunal rather than
the Courts and should be more user-friendly as the UNCITRAL Model
Law is now extended to all arbitrations in Hong Kong. It is hoped
this will enhance the perception of Hong Kong as a friendly Model
Law jurisdiction and be more attractive for both local and
international parties.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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