HKIAC Publishes Significant Report On Arbitrator Hourly Rates

Study drawing on over 1,400 appointments from 2020-2024 shows arbitrator fees usually based on hourly rates rather than amount in dispute, with default cap playing important role as reference point for setting of rates

The Hong Kong International Arbitration Centre has published a report on arbitrator hourly rates with the stated aim of improving transparency in this area (available here).

The report is based on what the institution describes as a "comprehensive study" of 1,429 arbitrator appointments made in arbitrations administered by it in the 5 years from 2020 to 2024 under its flagship arbitration rules, the HKIAC Administered Arbitration Rules (HKIAC Rules), as well as its procedures for administering UNCITRAL arbitrations (UNCITRAL Procedures).

Although the HKIAC Rules are unusual in providing users with a choice between arbitrator fees based on hourly rates (subject to a default cap) or the amount in dispute (Article 10.1), the vast majority of cases administered under them (around 97%) adopt hourly rates, while the UNCITRAL Procedures only provide for hourly or daily rates (Article 15). Statistics on the level of hourly rates in practice are therefore likely to be relevant to most users of HKIAC-administered arbitration.

The report was released in parallel with the announcement of an increase in the default arbitrator hourly rate cap under the HKIAC Rules from HK$6,500 (approximately US$833) to HK$7,500 (approximately US$960), along with an increase in the HKIAC registration fee payable by a claimant to commence an arbitration, and a significant expansion in the scope of the expedited procedure under the HKIAC Rules, all with effect from 1 January 2026 (reported separately here).

A summary of key propositions on hourly rates in arbitrations administered by the HKIAC which can be extracted from the report is provided below, along with selected supporting data. US dollar amounts are given at the exchange rate used in the report (US$1 = HK$7.8) for reference purposes.

Key points

• Hourly rates are the "dominant approach" to setting arbitrator fees in arbitrations administered by the HKIAC. Only around 3% of arbitrations under the HKIAC Rules in the 5-year study period featured arbitrator fees based on the amount in dispute, while (as noted above) the UNCITRAL Procedures only provide for hourly (or daily) rates.
• Average arbitrator hourly rates generally correlate with the amount in dispute. Average hourly rates across the 5-year study period ranged from HK$3,925 (US$503) for the lowest value disputes (with a value of no more than HK$5 million or US$641,026) to HK$6,017 (US$771) for the highest value disputes (with a value of more than HK$1 billion or US$128.2 million). The degree of variance nevertheless differed markedly depending on the type of arbitrator in question. The average hourly rate for the highest value disputes is 82% higher than that for the lowest value disputes in the case of sole arbitrators, 27% higher in the case of co-arbitrators, and (as discussed further below) 16% higher in the case of presiding arbitrators.
• Hourly rates usually start above HK$3,000 (US$385) and most are at least HK$5,000 (US$641). Only 7% of hourly rates in the 5-year study period were below HK$3,000 (US$385), with 3% being in the range of HK$2,500 - HK$3,000 and 4% being below HK$2,500. Most (60%) were at least HK$5,000 (US$641), with 58% falling between that level and the cap of HK$6,500 (US$833) which was applicable throughout the study period.
• Most hourly rates are below the cap. Nearly two thirds (64%) of hourly rates were below the cap of HK$6,500 (US$833) which applied during the 5-year study period, and more than half (54%) were below HK$6,000 (US$769).
• A significant proportion of hourly rates are set at or close to the cap. 44% of hourly rates during the 5-year study period were within the narrow range of ≥ HK$6,000 ≤ HK$6,500 (≥ US$769 ≤ US$833). Breaking this down, approximately one third (34%) of hourly rates were equal to the cap and a further 10% were at least HK$6,000 / US$769 (92% of the cap). These figures can be seen to reflect the scale and complexity of many of the cases administered by the HKIAC, which had an average value of HK$375 million (approximately US$48.1 million) in 2024, the latest year for which statistics are available (as we reported here).
• Hourly rates above the cap are rare. It is technically possible for an arbitrator's hourly rate to exceed the cap if all parties to the relevant arbitration agree or, in exceptional circumstances, the HKIAC so determines (pursuant to paragraph 9.5 of Schedule 2 of the HKIAC Rules). In practice, however, only 2% of hourly rates across the 5-year study period exceeded the applicable cap of HK$6,500 (US$769), taking account of appointments under both the HKIAC Rules (which stipulate the cap) and the UNCITRAL procedures (which do not). Assuming for indicative purposes that around 97% of all appointments featured hourly rates (the percentage stated by the HKIAC report in relation to appointments under the HKIAC Rules), this would equate to 28 appointments in total across the study period, or an average of 5-6 appointments per year. For appointments under the HKIAC Rules, moreover, only 1% of hourly rates across the 5-year study period exceeded the cap. It would therefore be reasonable to expect that, on average, only a relatively small number of arbitrator appointments in HKIAC-administered arbitrations each year are likely to feature hourly rates above the cap, particularly in light of the increase in the cap with effect from 1 January 2026 mentioned above (although the statistics demonstrate that parties and/or the HKIAC are prepared to accept rates at such a level in appropriate cases).
• Sole arbitrators' hourly rates are typically lower than those of arbitrators in 3-member tribunals. In the lowest-value disputes (below HK$5 million / US$641,026), the average hourly rate of a sole arbitrator was 63% of that of a co-arbitrator and 55% of that of a presiding arbitrator. In higher-value cases, the difference remained (albeit the HKIAC notes that it is "less pronounced"), with the average hourly rate of a sole arbitrator in cases with an amount in dispute above HK$250 million (US$32.1 million) being 72% to 80% of that of a co-arbitrator and 79% to 94% of that of a presiding arbitrator. These figures are consistent with (i) the fact that, as the HKIAC notes, sole arbitrators are more commonly seen in lower-value cases (the report states that 53% of cases with an amount in dispute below HK$25 million (US$3.2 million) were heard by a sole arbitrator, whereas 92% of cases with an amount in dispute above HK$100 million (US$12.8 million) were heard by a 3-member tribunal), as well as (ii) the general correlation between higher dispute values and higher hourly rates.
• Co-arbitrators' hourly rates are typically slightly lower than those of presiding arbitrators, but can approach parity in the highest-value disputes. The average hourly rate for co-arbitrators ranged from 88% of that for presiding arbitrators in the lowest-value disputes (below HK$5 million / US$641,026) to 97% of that for presiding arbitrators in the highest-value disputes (> HK$1 billion / US$128.2 million).
• Presiding arbitrators' average hourly rates fall within a relatively narrow range.The average hourly rate for presiding arbitrators in even the lowest value disputes was HK$5,383 (US$690) (83% of the cap), while that for the highest value disputes was a relatively modest 16% higher at HK$6,233 (US$799) (96% of the cap). In contrast, the average hourly rate of co-arbitrators in the highest value disputes was 27% higher than in the lowest value disputes. The lower variance for presiding arbitrators potentially reflects a more limited correlation between the value of the dispute and the greater levels of responsibility and higher workloads which presiding arbitrators can typically be expected to assume.
• HKIAC-appointed arbitrators generally have lower hourly rates than those designated by parties or co-arbitrators. The extent of the variance during the study period nevertheless differed markedly depending on the role of the arbitrator: for sole arbitrators, the average hourly rate when appointed by the HKIAC was 70% of that of arbitrators designated by the parties or co-arbitrators; for co-arbitrators, that figure was 87%; and for presiding arbitrators, the figure was 94%.
• Hourly rates for cases under the HKIAC Rules are slightly lower than those administered under the UNCITRAL Procedures.The overall average hourly rate in cases under the HKIAC Rules during the study period (HK$5,168 / US$663) was 92% of that in cases administered under the UNCITRAL Procedures (HK$5,602 / US$718). This result is unsurprising given that there is no cap on hourly rates in cases administered under the UNCITRAL Rules. Together with the small number of above-cap appointments in cases under the HKIAC Rules, it underlines the effectiveness of the cap on hourly rates under the HKIAC Rules in providing users with control and predictability over costs.

Comment

The HKIAC report is a valuable contribution to the statistical literature on arbitration costs, drawing upon a meaningful dataset to provide clear insights.

While the key findings are largely unsurprising and tend to confirm generally accepted market perceptions, users can now take advantage of authoritative and specific (albeit indicative) figures to better predict, evaluate and compare potential and proposed hourly rates in live matters.

The data also underlines the significance of the cap under the HKIAC Rules as a reference point and (in most cases) an upper limit on arbitrator hourly rates. This can be expected to remain the case following the increase in the cap to HK$7,500 (approximately US$960) with effect from 1 January 2026).

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.