In our arbitration update "New Rules, New Regime" published in April, we discussed the proposed amendments to the Hong Kong International Arbitration Centre Administered Arbitration Rules (the "Proposed HKIAC Rules"), as published in January 2013. At that time, the Proposed HKIAC Rules were expected to come into effect on 1 May 2013.
On 12 June the final version of the HKIAC rules was published (the "Final HKIAC Rules"), which largely reflect the position adopted in the Proposed HKIAC Rules. However the following key changes have been made:
- The Final HKIAC Rules are scheduled to come into effect on 1 November 2013.
- The maximum agreed hourly rate for arbitrators has been removed. Reference is now made to the rate set by the HKIAC and published on the HKIAC website at the date the Notice of Arbitration is submitted. As published on the website, effective 1 November 2013, the maximum agreed hourly rate of an arbitrator will HK$6,500 and for the secretary to the arbitral tribunal is HK$2,500. This approach is similarly adopted in respect of a number of other costs provisions in the Final HKIAC Rules, which refer the parties to the HKIAC website rather than prescribing a fixed arrangement.
- The Final HKIAC Rules have removed the power of the arbitral tribunal to exclude participation of a party's counsel, or other representatives, if their appointment would disrupt the fair and expeditious conduct of the arbitration. This reduces the risk of challenge to the process.
- Under the Final HKIAC Rules, the HKIAC will have the power to allow claims arising out of, or in relation to, multiple contracts to be raised in a single proceeding1. This is a limited right to manage multiple references and can be seen as a step towards addressing this issue.
- The expedited procedure has been amended to operate on an elective, rather than automatic, basis and the monetary threshold for the procedure has been raised to HK$25,000,000.
- Administrative fees for claims between HK$40,000 and HK$240,000 have been increased.
- Arbitral tribunal fees, if based on the sum in dispute, have been revised and are capped at HK$12,574,000.
The revisions noted above are relatively minor compared the major changes advertised in the Proposed HKIAC Rules, as highlighted in our previous update, namely:
- new emergency arbitrator provisions,
- new powers to consolidate arbitrations and join additional parties, and
- a streamlined process for the appointment of arbitrators.
We look forward to the Final HKIAC Rules coming into effect. They represent best practice in international arbitration and will continue to enhance Hong Kong's position as a major centre for resolving international disputes.