The New Arbitration Ordinance

The new Arbitration Ordinance, Cap. 609 (the “Ordinance”) will come into force on 1 June 2011.  A commencement notice was published in the Government Gazette on 4 March 2011.

 The Ordinance, which is based largely on the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”), will replace the current Arbitration Ordinance, Cap. 341 (the “Old Law”).  The Old Law will apply to all arbitrations and related proceedings commenced prior to 1 June 2011.  The Ordinance will apply to all arbitrations and related proceedings commenced on or after that date.  The main feature of the Ordinance is that the distinction between domestic and international arbitrations is abolished.  There is now a unitary regime of arbitration based on the Model Law, subject to certain transition and opt-in provisions, modifications and supplements as expressly provided in the Ordinance.

 The Objectives of the Ordinance are:

  • to facilitate fair and speedy resolution of disputes by arbitration without unnecessary expense
  • to make it more user-friendly by setting out provisions by references to stages of arbitration
  • to apply Model Law to all arbitrations as overseas practitioners are familiar with it
  • to increase attractiveness of Hong Kong as a place to conduct arbitrations
  • to promote Hong Kong as a regional centre for legal services and dispute resolution

  The Principles of the Ordinance are:

  • to accord a greater degree of party autonomy, subject to safeguards that are necessary in the public interest
  • to minimise court intervention

 Some of the key features of interest are:

1.                  Abolition of the distinction between “domestic” and “international” arbitrations.  There are no longer separate provisions governing domestic and international arbitrations.

2.                  Provisions of the Model Law that are expressly stated in the Ordinance as having effect, have the force of law (subject to modifications and supplements).  The Model Law provisions are clearly identified in the Ordinance.

3.                  The Ordinance has wide application and is not limited to international commercial arbitrations.  It also applies to statutory arbitrations.  It covers all arbitrations under arbitration agreement where the place of arbitration is Hong Kong.

4.                  The contents of the arbitration agreement can be recorded in writing in any form, that includes an agreement made by electronic communication.

5.                  Certain provisions that only apply to domestic arbitrations (in respect of arbitration agreements entered into before or within 6 years after the commencement of the Ordinance which provide that the arbitration is a “domestic arbitration”) have been retained as opt-in provisions either by express agreement or in some of the construction cases or statutory arbitrations, automatically.  The opt-in provisions relate to:

(a)                determination of a dispute by a sole arbitrator;

(b)               consolidation of arbitrations;

(c)                determination of preliminary question of law by the Court of First Instance;

(d)               challenging an arbitral award on ground of serious irregularity; and

(e)                appeal against an arbitral award on question of law.

  6.                  The Tribunal is able to grant interim measures (this includes Mareva and other injunctions and Anton Pillar orders) as well as preliminary orders ex parte for a limited period in an emergency.  Interim measures can be effective as they are enforceable by the Court.

7.                  The Ordinance contains provisions that facilitate mediation.  HKIAC has the power to appoint a mediator on the application of any parties and such appointment is not subject to appeal.  The arbitrator may act as mediator.

8.                  Limitation of actions under the Limitation Ordinance, Cap. 341 and other legislation shall apply to arbitrations as they apply to actions in courts.

9.                  To enhance confidentiality, any court proceedings are not to be heard in open court unless a party makes an application for open hearing or the Court considers that there ought to be an open hearing.  Unless otherwise agreed by the parties and subject to statutory exceptions, no party may publish, disclose or communicate any information relating to the arbitral proceedings or the arbitral award.

10.              Chapter VIII of the Model Law is not incorporated into the Ordinance.  The Ordinance contains separate provisions regarding the recognition and enforcement of the New York Convention awards and Mainland Chinese awards, which are substantially the same as the corresponding provisions under the Old Law.