Rule Changes

July 2010 has brought the release of revised arbitration rules by both the United Nations Commission on International Trade Law (“UNCITRAL”) and the Singapore International Arbitration Centre (“SIAC”). Both sets of rules are relevant to Hong Kong, because UNCITRAL rules are the basis of the Hong Kong International Arbitration Centre’s own Administrated Arbitration Rules and are also the default rules, where none are named for a Hong Kong arbitration. Moreover, Singapore has established itself as a worthy competitor to Hong Kong for the resolution of disputes involving commercial matters in China. For a period of several years after the change in sovereignty over Hong Kong and until the matter was clarified by legislation in 2000, there was a substantial question as to whether a Hong Kong arbitral award was enforceable in China under the New York Convention, since the Hong Kong award, post July 1, 1997, was no longer “foreign” with respect to China. During this period of ambiguity, Singapore emerged, and promoted itself, as a logical jurisdiction, with no New York Convention issues, for dealing with China mattes.  

UNCITRAL

The UNCITRAL Arbitration Rules were first adopted in 1976 and have always enjoyed great popularity because they were promulgated by an UN body. Although they are most well known for use with ad hoc arbitration, they have become popular for investor-state disputes under bilateral investment treaties and have long been the rules applied by the Iran-US Claims Tribunal.  

The revisions, which are not earth-shattering, came into force on Aug. 15, 2010. Among the significant changes include the fact that Article 1 no longer contains a requirement that an arbitration agreement must be in writing. The procedures for notice and calculation of time periods have been updated to take into account modern forms of communication, such as e-mail. A new Article 4 sets out a revised required form and content of a response to a notice of arbitration. The sections of the rules dealing with the composition of the arbitral tribunal have been changed to clarify disclosure by arbitrators and their liability, as well as the role of the appointing authority in appointing, challenging, and replacing arbitrators. Article 10 now addresses the appointment of three arbitrators where they are multiple parties as claimant or respondent, something which happens with relative frequency. Modern technology is also addressed in the sections governing the conduct of the arbitral proceeding by allowing the giving of evidence via videoconference and similar technologies. Also, Article 27 expressly states that any person can be a witness, thus removing ambiguity under civil law as to whether a party can testify as a witness. Article 41 inserts provisions aimed at providing parties with a mechanism to review whether arbitrators’ fees are excessive. Prior practice allowed arbitrators to fix their own fees outside the control of the parties. Finally, Article 34 includes express wording stating that, by adopting the UNCITRAL Rules, the parties waive their right to any form of appeal to any court, except for an application to set aside the award.  

All and all, the revisions are likely to be seen in a positive way and to have been required in many instances, given the simple passage of more than 30 years.  

SIAC

The changes to the SIAC rules took effect on July 1, 2010. The SIAC most recently revised its rules in 2007. Increased speed and efficiency is the focus of most of the SIAC efforts.  

The 2010 revisions introduce an expedited procedure for which a party can apply if the amount in dispute does not exceed U.S.$5 million, or if all parties agree. Under the expedited procedure, the award is to be made within six months from the date the tribunal is constituted and the reasons for the award are only to be given in summary form.  

There is also an emergency arbitrator procedure designed to assist parties in obtaining emergency relief pending the constitution of the tribunal. The application for an emergency arbitrator can be made concurrent with or following the filing of a notice of arbitration. An emergency arbitrator will be appointed within one business day.  

Other speed and efficiency steps include the shortening of the time period by which a party must nominate an arbitrator from 21 days to 14 days, if three arbitrators are to be appointed. There are also revised procedures for appointment of three arbitrators where there are more than two parties to an arbitration. In addition, the requirement for a memorandum of issues defining the issues to be determined in the arbitration has been removed. This is another efficiency step, although some feel further clarification of the issues to be decided is useful in certain arbitrations. All in all, the current revisions reflect the continuing attention paid by SIAC to its procedures and its willingness quickly to make changes it finds potentially useful.