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Arbitral proceedings

Starting an arbitration proceeding
What is needed to commence arbitration?

Unless otherwise agreed by the parties, the arbitration proceedings commence on the date that the respondent receives a request to refer the dispute to arbitration (Section 49 of the Arbitration Ordinance (Cap 609)).

Limitation periods
Are there any limitation periods for the commencement of arbitration?

Section 14 of the Arbitration Ordinance (Cap 609) provides that the Limitation Ordinance (Cap 347) (the main legislation governing limitation periods for bringing claims in Hong Kong) and "any other Ordinance relating to the limitation of actions" apply to arbitrations just as they apply to court actions. The duration of the relevant limitation period varies depending on the cause of action. For claims in contact or tort, the limitation period is generally six years from the date on which the cause of action accrued (Section 4(1) of the Limitation Ordinance).

As for contractually agreed limitation periods, Section 58 of the Arbitration Ordinance provides that if an arbitration agreement stipulates that a claim will be time barred unless it is referred to arbitration within a specified period, the tribunal may, on the application of any party, extend the period within which arbitration must be commenced if it is satisfied that:

  • the circumstances of the claim were outside the reasonable contemplation of the parties at the time they entered into the agreement and it is just to extend the period; or
  • the conduct of any party makes it unjust to hold the other party to the strict terms of the agreement.

Procedural rules
Are there any procedural rules that arbitrators must follow?

Section 47 of the Arbitration Ordinance (Cap 609) provides that the parties are free to agree on the procedural rules to be applied. If and to the extent that the parties fail to agree, the tribunal may conduct the arbitration in the manner that it considers appropriate, "subject to the provisions of this Ordinance" (ie, the tribunal must act fairly and impartially in accordance with Section 46 of the ordinance).

Dissenting arbitrators
Are dissenting opinions permitted under the law of your jurisdiction?

The Arbitration Ordinance (Cap 609) does not prohibit dissenting opinions. Arbitrators are not obliged to give a dissenting opinion; however, the reason for the arbitrator's failure to sign an arbitral award must be stated (Section 67 of the ordinance).

Judicial assistance
Can local courts intervene in proceedings?

Consistent with Hong Kong's pro-arbitration stance, the courts cannot interfere with arbitration proceedings, except in certain circumstances in order to assist the arbitral process. The courts' powers to assist in relation to arbitrations include to:

  • stay court proceedings brought before them in a matter that is the subject of an arbitration agreement (Section 20 of the Arbitration Ordinance (Cap 609));
  • determine a challenge to the appointment of an arbitrator (Section 26);
  • grant interim measures, including injunctions (Section 45);
  • assist in the taking of evidence (Section 55);
  • order a person to attend proceedings before an arbitral tribunal in order to give evidence or produce documents or other evidence (Section 55(2));
  • extend the time to commence arbitration proceedings (Section 58);
  • dismiss a claim for unreasonable delay and debar a party from commencing further arbitral proceedings (Section 59);
  • make an order (Section 60):
    • directing the inspection, photographing, preservation, custody, detention or sale of any relevant property by the arbitral tribunal, a party to the arbitral proceedings or an expert; and
    • directing samples be taken from, observations made of or experiments conducted on any relevant property;
  • set aside an arbitral award (Section 81);
  • to enforce an arbitral award, including foreign arbitral awards in accordance with the New York Convention (Sections 84, 87, 92 and 98A); and
  • under certain conditions, refuse to enforce a domestic or foreign arbitral award (Sections 86, 89, 95 and 98D).

Can the local courts assist in choosing arbitrators?

Section 13 of the Arbitration Ordinance (Cap 609) provides that the Hong Kong International Arbitration Centre (HKIAC) is the appointing authority. Under Section 24 of the ordinance, where a party has failed to make an appointment under the applicable appointment procedure (whether an agreed procedure or the default procedure prescribed by the ordinance where no procedure has been agreed), any party can ask the HKIAC to make the necessary appointment.

The courts' involvement is normally restricted to termination of an arbitrator's mandate. The courts may need to decide on the termination of an arbitrator's mandate if called on by one of the parties to determine a challenge to an arbitrator's appointment (Section 26) or to decide whether an arbitrator has become unable to perform his or her functions or has failed to act without undue delay (Section 27).

What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration? Can the courts compel parties to arbitrate? Can they issue subpoenas to third parties?

A respondent cannot be compelled to participate in an arbitration. However, unless otherwise agreed by the parties, if without showing sufficient cause the respondent fails to communicate its statement of defence or appear at a hearing, the tribunal may continue the proceedings and make an award on the evidence before it (Section 53 of the Arbitration Ordinance (Cap 609)).

If, again without showing sufficient cause, the respondent fails to comply with any order or direction of the tribunal, the tribunal may make a peremptory order to the same effect, prescribing the time for compliance (Section 53(3)). If the respondent fails to comply with the peremptory order, the tribunal may:

  • direct that the party is not entitled to rely on any allegation or material which was the subject matter of the peremptory order;
  • draw any adverse inferences that the circumstances may justify from the non-compliance;
  • make an award on the basis of any materials which have been properly provided to the tribunal; or
  • make any order it thinks fit as to the payment of the costs of the arbitration incurred in consequence of the non-compliance.

The tribunal may request assistance from the court in taking evidence (Section 55(1)). The court may order a party to attend proceedings before a tribunal to give evidence or produce documents or other evidence (Section 55(2)).

Third parties
In what instances can third parties be bound by an arbitration agreement or award?

A party which has not signed an arbitration agreement or otherwise agreed to become a party to the arbitration proceedings cannot be bound by an arbitration agreement or award.

However, a third party which has not agreed to be bound by an arbitration agreement may enjoy a right to enforce a contract term through arbitration under the Contracts (Rights of Third Parties) Ordinance (Cap 623) if:

  • the contract term is enforceable by the third party;
  • the term provides that the dispute between the third party and the promisor is to be submitted to arbitration; and
  • the term constitutes an arbitration agreement.

Default language and seat
Unless agreed by the parties, what is the default language and location for arbitrations?

There is no default language or location under the Arbitration Ordinance (Cap 609).

The parties are free to agree on the place of arbitration (Section 48 of the ordinance). Failing such agreement, the place of arbitration will be determined by the tribunal having regard to the circumstances of the case, including the convenience of the parties.

Similarly, the parties are free to agree on the language or languages to be used in the arbitral proceedings (Section 50 of the ordinance). Failing such agreement, the tribunal will determine the language or languages to be used in the proceedings.

Gathering evidence
How is evidence obtained by the tribunal?

Under Section 55 of the Arbitration Ordinance (Cap 609), the tribunal (or a party with the tribunal's approval) may request from a competent Hong Kong court assistance in taking evidence. The court may execute the request within its competence and according to its rules on taking evidence. The court may order a person to attend proceedings before a tribunal to give evidence or produce documents or other evidence (Section 55(2)).

Unless otherwise agreed by the parties, a tribunal may decide whether and to what extent it should itself take the initiative in ascertaining the facts and the law relevant to the arbitral proceedings (Section 56(7)). Unless otherwise agreed by the parties, the tribunal may direct the attendance before it of witnesses in order to give evidence or produce documents or other evidence (Section 56(8)).

What kinds of evidence are acceptable?

The tribunal is not bound by the rules of evidence and may accept any evidence that it considers relevant to the proceedings, but it must give the weight that it considers appropriate to the evidence adduced in the proceedings (Section 47 of the Arbitration Ordinance (Cap 609)).

Confidentiality
Is confidentiality ensured?

Section 18 of the Arbitration Ordinance (Cap 609) provides that, unless otherwise agreed by the parties, no party may publish, disclose or communicate any information relating to the arbitral proceedings or an award made in those proceedings.

However, under Section 18(2) of the ordinance, a party may publish, disclose or communicate the above information to:

  • protect or pursue its legal right or interest or to enforce or challenge the award;
  • a government body, regulatory body, court or tribunal if obliged to do so by law; or
  • a professional or any other adviser.

Can information in arbitral proceedings be disclosed in subsequent proceedings?

Not unless otherwise agreed by the parties, or such disclosure falls within the exceptions set out in Section 18(2) of the Arbitration Ordinance (Cap 609).

Ethical codes
What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

The Hong Kong International Arbitration Centre (HKIAC) has published a Code of Ethical Conduct for Arbitrators (www.hkiac.org/en/arbitration/arbitrators/code-of-ethical-conduct). Other professional bodies involved in arbitration have their own ethical codes – for example, the Hong Kong Institute of Arbitrators, whose Code of Professional and Ethical Conduct is virtually identical to the HKIAC code (www.hkiarb.org.hk/en/ethicalconduct.php).

Solicitors in Hong Kong must comply with the rules and principles set out in the Hong Kong Law Society's Guide to Professional Conduct. Similarly, Hong Kong barristers must comply with the Hong Kong Bar Association's Code of Conduct.