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Commercial Arbitration

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Hong Kong

Amanda Lees and Simon Morgan
Simmons & Simmons

    Infrastructure

  1. 1.The New York Convention
    Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?
    1. Hong Kong is not a contracting state to the New York Convention. However, the government of the People’s Republic of China extended the territorial application of the New York Convention to Hong Kong, subject to the statement originally made by the PRC upon accession to the Convention. The PRC has made two reservations: the reciprocity reservation and commercial reservation. Nevertheless non-Convention awards are enforceable in Hong Kong with leave of the court.

  2. 2.Other treaties
    Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?
    1. Hong Kong is a party to the following arrangements:

      (1) Arrangement Concerning Mutual Enforcement of Arbitral Awards Between the Mainland and the Hong Kong Special Administrative Region; and

      (2) Arrangement Concerning Reciprocal Recognition and Enforcement of Arbitral Awards between the Hong Kong Special Administrative Region and the Macao Special Administrative Region.

      The PRC, including Hong Kong, is a party to the Washington Convention on the Settlement of Investment Disputes between States and Nationals of other States.

  3. 3.National law
    Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?
    1. The Arbitration Ordinance (Cap 609) (AO) came into force in June 2011. The AO is based on the UNCITRAL Model Law with amendments and supplements. The exact wording of the Model Law article is typically reproduced in the first subsection of each relevant AO section. Then the subsequent subsection(s) may supplement, modify or qualify the application of the specific Model Law article. The AO applies to all arbitral proceedings with their seat in Hong Kong.
  4. 4.Arbitration bodies in your jurisdiction
    What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?
    1. The Hong Kong International Arbitration Centre (HKIAC) is based in Hong Kong. It also acts as an appointing authority under the AO and when requested.

      The Secretariat of the ICC also has an Asia office in Hong Kong which acts as a registry.

      The China International Economic and Trade Arbitration Commission (CIETAC) has set up the CIETAC Hong Kong Arbitration Center, its first branch outside mainland China.  The CIETAC Hong Kong Arbitration Center shall administer arbitrations which the parties have agreed should be submitted to CIETAC in Hong Kong.

  5. 5.Foreign institutions
    Can foreign arbitral providers operate in your jurisdiction?
    1. Foreign arbitral providers, for example the ICC or the LCIA, can operate in Hong Kong.

  6. 6.Courts
    Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with the law and practice of international arbitration?
    1. All arbitration matters are initially heard in the Construction and Arbitration List in the Court of First Instance of the High Court of Hong Kong. This list is not restricted to cases involving a construction element. The judiciary in Hong Kong is generally familiar with the law and practice of international arbitration.

    Agreement to arbitrate

  7. 7.Formalities
    What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?
    1. A valid and enforceable arbitration agreement must be in writing (AO s19). An arbitration agreement is in writing if its content is recorded in any form, including by electronic communications, whether or not the arbitration agreement has been concluded orally, by conduct or by other means. An arbitration agreement can cover future disputes.

  8. 8.Arbitrability
    Are any types of dispute non-arbitrable? If so, which?
    1. Generally parties are free to agree to arbitrate any dispute between them. The exceptions are:

      • family law matters, including child custody, marriage, and divorce
      • criminal matters;
      • actions in rem against vessels;
      • fraud;
      • matters in which the legislation gives exclusive jurisdiction to another tribunal or court, for example the Employees Compensation Ordinance (see Paquito Lima Buton v Rainbow Joy Shipping Ltd Inc (2008) 11 HKCFAR 464);
      • matters reserved to the state, such as taxation, immigration and validity of intellectual property rights.

      Section 15 of the Control of Exemption Clauses Ordinance (Cap 71) prevents the enforcement of a consumer arbitration agreement unless the consumer consents in writing to arbitration after a dispute has arisen or the consumer institutes the arbitration.

  9. 9.Third parties
    Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?
    1. The Contracts (Rights of Third Parties) Ordinance (which came into operation on 1 January 2016), significantly changed the law relating to privity of contract in Hong Kong. A third party to a contract is able to enforce rights under that contract subject to being able to demonstrate that it was the manifest intention of the actual contracting parties that the third party should have the right to do so. The Ordinance stipulates that a third party will be bound by an arbitration clause contained in the contract if it wishes to enforce its rights under the contract, unless on a proper construction of the contract the contracting parties did not intend to bind the third party to arbitrate.

      The arbitral tribunal of the HKIAC arbitration has the power to allow an additional party to be joined to the arbitration as long as the additional party is bound by an arbitration agreement under the HKIAC Administered Arbitration Rules (HKIAC Rules) which gives rise to the arbitration. A party wishing to join an additional party to the arbitration or a third party wishing to be joined as an additional party to the arbitration shall submit a request for joinder to the HKIAC.

  10. 10.Consolidation
    Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?
    1. Schedule 2 of the AO, which automatically applies to domestic and some construction arbitrations and can be opted into, gives the Court of First Instance power to consolidate two or more different arbitral proceedings if there appears to the Court that a common question of law or fact arises in both or all of them, that the rights to relief are in respect of or arise out of the same transaction(s), or it is desirable to do so for any other reason. The HKIAC Rules also give the tribunal the power to consolidate two or more arbitrations if: the parties agree to consolidate; the claims are made under the same arbitration agreement; and, where under different but compatible arbitration agreements, there is a common question of law or fact or the rights to relief arise out of the same transaction or series of transactions.

  11. 11.

    Groups of companies
    Is the 'group of companies doctrine' (or any other basis for piercing the corporate veil) recognised in your jurisdiction?

    1. The “group of companies” doctrine is not recognised in Hong Kong. Hong Kong courts only pierce the corporate veil in exceptional circumstances where the corporate structure is a “sham” or “façade” used to evade legal responsibilities as set out in the leading cases of Liu Hon Ying v Hua Xin State Enterprise (Hong Kong ) Ltd HCA 1060/2001 and Lee Sow Keng v Kelly McKenzie Ltd CACV 342 and 375/ 2003.

  12. 12.Separability
    Are arbitration clauses considered separable from the main contract?
    1. Yes, under the UNCITRAL Model Law and AO an arbitration agreement which forms part of a wider contract is treated as a separate and autonomous agreement. As a consequence, parties remain bound by the arbitration agreement even if the wider contract is terminated or null and void. A tribunal has jurisdiction to determine if the wider contract is void or non-existent or terminated without impeaching the validity of the arbitration agreement (AO s34).

  13. 13.Competence-competence
    Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?
    1. Section 34 of the AO provides that an arbitral tribunal has the power to rule on its own jurisdiction including any objections with respect to the existence or validity of an arbitration agreement.

      The AO also provides that the tribunal has the power to rule as to whether the tribunal is properly constituted or what matters have been submitted to arbitration in accordance with the arbitration agreement.

      The arbitral tribunal can rule on a plea that it does not have jurisdiction as a preliminary question or in the award on the merits of the dispute. If the arbitral tribunal rules as a preliminary question that it has jurisdiction, any party can appeal that decision to the Court of First Instance of the High Court.

      In the event that the arbitral tribunal rules that it does not have jurisdiction to decide a dispute, its decision is not subject to appeal. The court must, if it has jurisdiction, then decide that dispute.

  14. 14.Drafting
    Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?
    1. The terms of the arbitration clause should be in writing. Standard arbitration clauses are generally enforceable in Hong Kong and the HKIAC has some recommended standard clauses. Parties should consider whether to opt in to some of the provisions in Schedule 2 of the AO.

  15. 15.Institutional arbitration
    Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?
    1. The majority of arbitrations occurring in Hong Kong are ad hoc arbitrations although the numbers of institutional arbitrations are increasing. According to the HKIAC’s website, of the 252 arbitration cases handled by the HKIAC in 2014,  110 cases were fully administered by the HKIAC in accordance with its rules which is a substantial increase on previous years.

  16. 16.Multi-party agreements
    What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.
    1. The parties would be advised to adopt a set of arbitration rules (for example, the HKIAC Rules) which provide a mechanism for joinder and specific provisions as to the appointment of arbitrators when there are multiple parties. Otherwise the parties should address these issues in the arbitration agreement. If the appointment procedure fails or cannot be agreed upon, the HKIAC is the appointing authority under the AO.

    Commencing the arbitration

  17. 17.Request for arbitration
    How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?
    1. Unless otherwise agreed by the parties, arbitral proceedings commence on the date when the respondent receives the claimant’s request for the dispute to be referred to arbitration (AO s49). The Limitation Ordinance (Cap 347) and any other Ordinance relating to the limitation of actions apply to arbitrations as they apply to court actions (AO s14).

    Choice of law

  18. 18.Choice of law
    How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?
    1. The arbitral tribunal shall decide the dispute in accordance with the substantive law chosen by the parties (AO s64 which adopts Article 28 of the UNCITRAL Model Law). If the parties have not chosen the substantive law, the arbitral tribunal will determine the substantive law by applying the conflict of laws rules it considers applicable.

    Appointing the tribunal

  19. 19.Choice of arbitrators
    Does the law of your jurisdiction place any limitations in respect of a party’s choice of arbitrator?
    1. No, Hong Kong law does not place any limitation in respect of a party’s choice of arbitrator. An arbitrator is required to be impartial and independent.

  20. 20.Foreign arbitrators
    Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?
    1. Non-nationals can act as arbitrators where the seat is in Hong Kong or hearings are held in Hong Kong. Such non-nationals may be required to obtain a work visa from the Immigration Department of Hong Kong.

  21. 21.Default appointment of arbitrators
    How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?
    1. The HKIAC is the appointing authority under the AO (s13). If no nomination is made by a party or parties or the selection mechanism fails, either party may request the HKIAC to make the appointment.
  22. 22.Immunity
    Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?
    1. Arbitrators can be found liable under the AO for an act or omission in the exercise or performance of the tribunal’s arbitral functions only if it is proved that the act or omission was dishonest (AO s104).

  23. 23.Securing payment of fees
    Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?
    1. The HKIAC provides fund holding services for arbitrators, including in relation to deposits and security for costs. A fee is charged to the parties.

      An arbitral tribunal may refuse to deliver an award to the parties unless full payment of its fees and expenses is made (AO s77). The Court of First Instance can determine a dispute about the fees and expenses of the tribunal if there is no other available process of appeal or review.

    Challenges to arbitrators

  24. 24.Grounds of challenge
    On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?
    1. The grounds for challenge and challenge procedure in the UNCITRAL Model Law have been adopted in Hong Kong (AO s25 and AO s26). A party may challenge an arbitrator if there are justifiable doubts as to his or her impartiality or independence, or if he or she does not possess the qualifications agreed to by the parties. The test applied in Hong Kong is whether an objective fair-minded and informed observer, having considered the relevant facts, would conclude that there was a real possibility that the tribunal was biased (see Jung Science Information Technology Co Ltd v ZTE Corporation [2008] HKCFI 606).

      Initially the challenge will be determined by the arbitral tribunal (unless another procedure has been agreed by the parties). If the challenge is unsuccessful, the party may ask the Court of First Instance to decide on the challenge. A decision of the Court is not subject to appeal.

      Parties may agree to follow the IBA Guidelines on Conflicts of Interest in International Arbitration.

    Interim relief

  25. 25.

    Types of relief
    What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?

    1. Under the AO, both the arbitral tribunal and the court have concurrent jurisdiction to grant interim relief (see AO s35 and s45). The court has power to grant interim relief in relation to arbitral proceedings which have been or are to be commenced in or outside Hong Kong.

      An interim measure is any temporary measure, prior to the issuance of the final award, by which the tribunal or the court orders a party to:

      • Maintain or restore the status quo pending determination of the dispute;
      • Take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral process itself;
      • Provide a means of preserving assets out of which a subsequent award may be satisfied; or
      • Preserve evidence that may be relevant and material to the resolution of the dispute.

      The tribunal may order interim measures on an ex parte basis as a preliminary order (AO s37). The tribunal shall then give notice of the application and order to the other party and hear the other party’s case at the earliest practicable time (AO s38).

      An emergency arbitrator may grant emergency relief in or outside Hong Kong under the relevant arbitration rules, and such relief is enforceable (with the leave of the Court) in the same manner as an order or direction of the Court (AO s22B).

      Anti-suit injunctions are available in Hong Kong on an interim or permanent basis. The power of the Hong Kong High Court to grant an anti-suit injunction was discussed in Ever Judger Holding Company Limited v Kroman Celik Sanayii Anonym Sirketi HCCT 6/2015. Following English jurisprudence, the judge held that the court should ordinarily grant an injunction to restrain the pursuit of foreign proceedings brought in breach of an agreement for Hong Kong arbitration, where the injunction has been sought without delay and the foreign proceedings are not too advanced, unless the other party can show strong reason to the contrary.  The judge also commented that the court has the power to  restrain the pursuit of other proceedings in breach of the arbitration agreement regardless as to whether the arbitral proceedings are in existence or in prospect. 

      The Hong Kong High Court also has jurisdiction to grant an injunction against arbitration proceedings but such jurisdiction must be exercised very sparingly and with great caution (Lin Ming v Chen Shu Quan HCA 1900/2011).

  26. 26.Security for costs
    Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?
    1. Unless otherwise agreed by the parties, a tribunal may make an order requiring a claimant to give security for the costs of the arbitration (AO s56). The tribunal must specify the time period within which the claimant has to comply with the security for costs order.

    Procedure

  27. 27.

    Procedural rules
    Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?

    1. The key general principle is that the tribunal is required to treat parties with equality and fairness. The AO (s46) provides that:

      • the parties must be treated with equality;
      • the tribunal is required to:
      • be independent;
      • act fairly and impartially as between the parties, giving them a reasonable opportunity to present their cases and to deal with the cases of their opponents; and
      • use procedures that are appropriate to the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for resolving the dispute.
  28. 28.Refusal to participate
    What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?
    1. If a respondent fails to participate, the tribunal may continue the proceedings and make the award on the evidence before it (AO s53). There is no equivalent of default judgment and the claimant is still required to prove the merits of its case.

  29. 29.Admissible evidence
    What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Commercial Arbitration generally be taken into account?
    1. A tribunal is not bound by the rules of evidence and may receive any evidence that it considers appropriate and determine the weight of that evidence (AO s47). In practice, tribunals usually admit oral and written evidence from both lay and expert witnesses and documentary evidence.

      Parties may agree to the application of the IBA Rules in the arbitration. Tribunals often apply the IBA Rules to documentary evidence.

  30. 30.Court assistance
    Will the courts in your jurisdiction play any role in the obtaining of evidence?
    1. The arbitral tribunal or a party with the approval of the arbitral tribunal may request the court’s assistance in taking evidence (AO s55). The court may order a person to attend proceedings before an arbitral tribunal to give evidence or to produce documents or other evidence.

      The court also has (concurrently with the tribunal) special powers to make orders in relation to property: including inspection, photographing, preservation, sampling and experiments (AO s60).

  31. 31.Document production
    What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?
    1. The tribunal has the power to conduct the arbitration in the manner it considers appropriate subject to the agreement of the parties (AO s47), this includes the power to determine document production. The tribunal has the power to direct the attendance of witnesses to produce documents and is able to obtain the assistance of the court to compel the production of documents (AO s56 and s55).

      Privilege is preserved in Hong Kong arbitral proceedings. A person is not required to produce any document or other evidence that the person could not be required to produce in civil proceedings before a court (AO s56).

      In Hong Kong litigation, a party is under a wide duty to disclose all relevant documents relating to matters in question in the proceedings whether or not these are prejudicial to the party’s case. In practice, even in an arbitration in Hong Kong between Hong Kong parties, document production is unlikely to be as onerous as document disclosure in Hong Kong litigation. The IBA Rules are often adopted by either the parties or the tribunal.

  32. 32.Hearings
    Is it mandatory to have a final hearing on the merits?
    1. It is not mandatory to have a final hearing and proceedings can be conducted on the basis of documents and other materials. Nevertheless, unless the parties have agreed that no hearings shall be held, if requested by a party, the tribunal shall hold oral hearings for the presentation of evidence or for oral argument at an appropriate stage of the proceedings.

  33. 33.Seat or place of arbitration
    If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?
    1. Yes, if Hong Kong is selected as the seat of arbitration, hearings and procedural meetings may still be conducted outside Hong Kong without affecting Hong Kong’s status as the seat.

    Award

  34. 34.Majority decisions
    Can the tribunal decide by majority?
    1. In arbitral proceedings with more than one arbitrator, any decision of the tribunal shall be made, unless otherwise agreed by the parties, by a majority of all its members (AO s65). The award need only be signed by a majority of the members of the tribunal provided that the reason for any omitted signature is stated (AO s67).

  35. 35.Limitations to awards and relief
    Are there any particular types of remedies or relief that an arbitral tribunal may not grant?
    1. The tribunal is able to grant any remedy or relief that may be granted by the Hong Kong courts if the dispute had been the subject of civil proceedings. Unless otherwise agreed by the parties, the tribunal is able to award specific performance of any contract other than a contract relating to land or any interest in land (AO s70).

  36. 36.Dissenting arbitrators
    Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?
    1. Dissenting opinions are permitted but rare in Hong Kong. An arbitrator is not obliged to give a dissenting opinion although the reason for the failure of an arbitrator to sign an arbitral award must be stated (AO s67).

  37. 37.Formalities
    What, if any, are the legal and formal requirements for a valid and enforceable award?
    1. A valid and enforceable award must be in writing, must be signed by a sole arbitrator or a majority of the members of the arbitral tribunal, must be dated, and the place of arbitration must be stated (AO s67). An award should state the reasons upon which it is based unless it is a consent award or the parties have agreed that there shall be no reasons.

  38. 38.Time frames
    What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?
    1. There is no time limit for an arbitral tribunal to make an award. If a time limit is imposed on the arbitral tribunal to render an award, the AO provides that the court may extend the time limit for making an award whether or not it has expired (AO s72).

      A party has 30 days following receipt of the award, to request the tribunal to correct any errors or (if agreed by the parties) to request an interpretation of a specific point or part of an award from the tribunal.

    Costs and interest

  39. 39.

    Costs
    Are parties able to recover fees paid and costs incurred? Does the 'loser pays' rule generally apply in your jurisdiction?

    1. The tribunal has the power to assess and award the costs of the proceedings, including legal fees, the tribunal’s fees, fees paid to the arbitration institution and other costs (AO s74). The usual costs order is that the losing party pays the winning party’s costs, but the tribunal may have regard to all relevant circumstances, including any offers of settlement, in directing to whom and by whom the costs are to be paid. While the tribunal is not bound by the scales and practices adopted by the court on taxation of costs, the tribunal must only allow costs that are reasonable having regard to all of the circumstances.

  40. 40.Interest on the award
    Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?
    1. The tribunal may award simple or compound interest (AO s79) from the dates, at the rates and rests it considers appropriate on:

      • money awarded by the tribunal;
      • money claimed in, and outstanding at the commencement of the arbitral proceedings but already paid before the award is made; or
      • costs awarded or ordered by the tribunal.

      Interest is payable on the money awarded or costs awarded by the tribunal from the date of the award at the judgment rate unless the award provides otherwise (AO s80).

    Challenging awards

  41. 41.Grounds for appeal
    Are there any grounds on which an award may be appealed before the courts of your jurisdiction?
    1. Recourse against an arbitral award seated in Hong Kong may only be made by an application to the Court of First Instance of the High Court to set aside the award on the grounds set out in Article 34 of the UNCITRAL Model Law (AO s81).

      The Court does not have jurisdiction to set aside or remit an award on the grounds of errors of fact or law on the face of the award.

      For a limited time period after the enactment of the AO, Schedule 2 automatically applies to domestic and some construction arbitrations. Schedule 2 allows parties to challenge awards on the grounds of serious irregularity and to apply for leave to appeal an award on a question of law. Parties are also able to opt in to these provisions of Schedule 2.

  42. 42.Other grounds for challenge
    Are there any other bases on which an award may be challenged, and if so what?
    1. Most awards made in Hong Kong can only be challenged on the grounds set out in Article 34 of the UNCITRAL Model Law (AO s81).

      For a limited time period after the enactment of the AO, Schedule 2 automatically applies to domestic and some construction arbitrations. Schedule 2 allows parties to challenge awards on the grounds of serious irregularity and to apply for leave to appeal an award on a question of law. Parties are also able to opt in to these provisions of Schedule 2.

  43. 43.Modifying an award
    Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
    1. It is possible for parties to agree in writing in an arbitration agreement or separately that the provisions of Schedule 2 (which includes a right of appeal) will not apply to any arbitral proceedings. It is not possible for parties to contract out of the recourse under Article 34 of the UNCITRAL Model Law.

    Enforcement in your jurisdiction

  44. 44.Enforcement of set-aside awards
    Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
    1. The Hong Kong courts are entitled to, and will generally act to, set aside a Convention award if it has been set aside or suspended by a competent authority of the country in which, or under the law of which, the award was made (see s89(2)(f)(ii) of AO). The courts still have a residual discretion to order enforcement even where any of the grounds for refusing to enforce a Convention award set out in s89 of the AO have been made out.

  45. 45.Trends
    What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?
    1. The Hong Kong courts are generally regarded as having an excellent record in enforcing foreign arbitral awards in accordance with the New York Convention and it is only in rare circumstances that the Hong Kong courts will refuse leave to enforce Convention awards. As the Court of Appeal made clear in Gao Haiyan v Keeneye Holdings Ltd CACV 79/2011, enforcement of an award on public policy grounds should be refused only if it would be ‘contrary to the fundamental conceptions of morality and fairness of Hong Kong’ to enforce it. The Court of Appeal also demonstrated Hong Kong’s robust approach to enforcement in Pacific China Holdings v Grand Pacific Holdings CACV 136/2011.

      In 2014, 34 applications were made to the Hong Kong courts to enforce awards. In 3 cases applications were made to set aside the orders granting leave to enforce the award; none of these applications were successful. 

      In 2015, in KB v S HCCT 13/2015, Justice Mimmie Chan, the judge in charge of the Construction and Arbitration List, set out the 10 principles behind the approach of the Hong Kong courts to enforcement of awards. Even if grounds for refusing enforcement are made out the court still has the discretion to enforce the award. The party opposing enforcement has to show a real risk of prejudice and that its rights are shown to have been violated in a material way. 

      The Hong Kong Court of First Instance has a practice of ordering indemnity costs against a party that unsuccessful challenges the enforcement of an arbitral award.  

  46. 46.State immunity
    To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
    1. Hong Kong's Court of Final Appeal held in 2011 in Democratic Republic of the Congo v FG Hemisphere Associates that the absolute doctrine of state immunity adopted by the PRC also applies in Hong Kong following the resumption of PRC sovereignty. All acts and assets of foreign states are immune from the jurisdiction of the Hong Kong courts regardless of their governmental or commercial nature. Similarly the government of the PRC is entitled to claim sovereign immunity over itself and its assets in Hong Kong regardless of their nature. Contractual waivers of immunity are not effective in Hong Kong, so the state or state entity can only waive its immunity by appearing before the court in proceedings to enforce the award.

    Further considerations

  47. 47.Confidentiality
    To what extent are arbitral proceedings in your jurisdiction confidential?
    1. In Hong Kong, the AO contains express provisions on confidentiality that apply to arbitrations seated in Hong Kong. The AO provides that unless otherwise provided by the parties, no party may publish, disclose or communicate information relating to the arbitral proceedings or an award made in those arbitral proceedings (s18). The AO also recognises certain circumstances in which information in relation to the proceedings and awards can be disclosed.

  48. 48.Evidence and pleadings
    What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?
    1. Except where publicly available, evidence produced and pleadings filed in the arbitration will only be able to be relied on in other proceedings if the exceptions to the duty of confidentiality apply.

      Section 18 of the AO allows the publication, disclosure or communication of information relating to arbitral proceedings and an arbitral award by a party if the publication, disclosure or communication is made:

      • to protect or pursue a legal right or interest of the party;
      • to enforce or challenge the award referred to in that subsection, in legal proceedings before a court or other judicial authority in or outside Hong Kong; or
      • to a court or tribunal and the party is obliged by law to make the publication, disclosure or communication.
  49. 49.Ethical codes
    What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
    1. The tribunal is required to treat parties with equality and fairness as set out in s46 of the AO.

      The HKIAC has adopted a Code of Ethical Conduct for arbitrators. The HKIAC Rules also place a duty on both the tribunal and the parties to do everything necessary to ensure the fair and efficient conduct of the arbitration (Article 13.5).

      Parties are free to choose their own legal representatives to represent them in arbitral proceedings in Hong Kong, they are not required to be represented by Hong Kong barristers or solicitors. These legal representatives must comply with their own codes of conduct at their home jurisdictions.

  50. 50.Procedural expectations
    Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?
    1. No. Arbitration in Hong Kong is modern, flexible and follows international best practice. Tribunals, subject to any agreed rules and the mandatory provisions of the AO, are able to conduct the arbitration in the manner most appropriate to the parties and the dispute.

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GAR know-how provides reliable cross-jurisdictional insight to help cement the building blocks of international practice. In this section, select experienced practitioners answer commonly asked questions for key jurisdictions so allowing readers to be better-placed to solve the challenges of their working days.

Questions

    Infrastructure

  1. 1.The New York Convention
    Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?
  2. 2.Other treaties
    Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?
  3. 3.National law
    Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?
  4. 4.Arbitration bodies in your jurisdiction
    What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?
  5. 5.Foreign institutions
    Can foreign arbitral providers operate in your jurisdiction?
  6. 6.Courts
    Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with the law and practice of international arbitration?
  7. Agreement to arbitrate

  8. 7.Formalities
    What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?
  9. 8.Arbitrability
    Are any types of dispute non-arbitrable? If so, which?
  10. 9.Third parties
    Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?
  11. 10.Consolidation
    Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?
  12. 11.

    Groups of companies
    Is the 'group of companies doctrine' (or any other basis for piercing the corporate veil) recognised in your jurisdiction?


  13. 12.Separability
    Are arbitration clauses considered separable from the main contract?
  14. 13.Competence-competence
    Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?
  15. 14.Drafting
    Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?
  16. 15.Institutional arbitration
    Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?
  17. 16.Multi-party agreements
    What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.
  18. Commencing the arbitration

  19. 17.Request for arbitration
    How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?
  20. Choice of law

  21. 18.Choice of law
    How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?
  22. Appointing the tribunal

  23. 19.Choice of arbitrators
    Does the law of your jurisdiction place any limitations in respect of a party’s choice of arbitrator?
  24. 20.Foreign arbitrators
    Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?
  25. 21.Default appointment of arbitrators
    How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?
  26. 22.Immunity
    Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?
  27. 23.Securing payment of fees
    Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?
  28. Challenges to arbitrators

  29. 24.Grounds of challenge
    On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?
  30. Interim relief

  31. 25.

    Types of relief
    What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?


  32. 26.Security for costs
    Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?
  33. Procedure

  34. 27.

    Procedural rules
    Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?


  35. 28.Refusal to participate
    What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?
  36. 29.Admissible evidence
    What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Commercial Arbitration generally be taken into account?
  37. 30.Court assistance
    Will the courts in your jurisdiction play any role in the obtaining of evidence?
  38. 31.Document production
    What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?
  39. 32.Hearings
    Is it mandatory to have a final hearing on the merits?
  40. 33.Seat or place of arbitration
    If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?
  41. Award

  42. 34.Majority decisions
    Can the tribunal decide by majority?
  43. 35.Limitations to awards and relief
    Are there any particular types of remedies or relief that an arbitral tribunal may not grant?
  44. 36.Dissenting arbitrators
    Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?
  45. 37.Formalities
    What, if any, are the legal and formal requirements for a valid and enforceable award?
  46. 38.Time frames
    What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?
  47. Costs and interest

  48. 39.

    Costs
    Are parties able to recover fees paid and costs incurred? Does the 'loser pays' rule generally apply in your jurisdiction?


  49. 40.Interest on the award
    Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?
  50. Challenging awards

  51. 41.Grounds for appeal
    Are there any grounds on which an award may be appealed before the courts of your jurisdiction?
  52. 42.Other grounds for challenge
    Are there any other bases on which an award may be challenged, and if so what?
  53. 43.Modifying an award
    Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
  54. Enforcement in your jurisdiction

  55. 44.Enforcement of set-aside awards
    Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
  56. 45.Trends
    What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?
  57. 46.State immunity
    To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
  58. Further considerations

  59. 47.Confidentiality
    To what extent are arbitral proceedings in your jurisdiction confidential?
  60. 48.Evidence and pleadings
    What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?
  61. 49.Ethical codes
    What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
  62. 50.Procedural expectations
    Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?