8.01  It has long been recognized that interim measures may be necessary to protect parties from damage during an arbitration and to ensure an effective outcome in a dispute.¹ The general purpose of interim measures is to prevent or minimize any disadvantage to a party which may occur before the final resolution of the dispute and enforcement of an arbitral award.²

8.02  Article 17(2) of the UNCITRAL Model Law (2006) defines an interim measure as follows:

8.03  This definition has been incorporated into many national arbitration laws, including section 35(1) of the Arbitration Ordinance. The definition has also been adopted by the HKIAC Rules (2018). This makes the HKIAC Rules (2018) one of the few arbitration rules that provide an express definition of interim measures.

8.04  A party to an HKIAC arbitration may apply for a wide range of interim relief from different authorities depending on the stage of the proceedings. Before the constitution of the arbitral tribunal, a party may seek urgent interim or conservatory relief from an emergency arbitrator. After the arbitral tribunal is constituted, a party can request the tribunal to issue (p. 178) interim relief. In addition, any party may request interim measures from a competent court before or during the arbitral proceedings.

8.05  In addition to obtaining interim relief from the tribunal or emergency arbitrator under the HKIAC Rules (2018) and from the Hong Kong courts, parties to arbitrations seated in Hong Kong and administered by HKIAC can also seek interim relief from the mainland Chinese courts as a result of the Interim Measures Arrangement and HKIAC being designated as one of the qualified institutions under this arrangement. At the time of writing, the HKIAC has processed thirty-seven applications under the Interim Measures Arrangement.

8.06  This chapter comprises four sections:

1. (1)  Interim relief from an emergency arbitrator (Section A);

2. (2)  Interim relief from an arbitral tribunal (Section B);

3. (3)  Interim relief from a competent authority (Section C); and

4. (4)  Security for costs (Section D).

8.07  The HKIAC Rules (2018) provide a robust and thorough set of emergency arbitrator procedures, which were introduced following a detailed review of the equivalent procedures in other arbitration rules. Relevant provisions are set out in Article 23.1 and Schedule 4 of the HKIAC Rules (2018). The key features of HKIAC’s emergency arbitrator procedures are as follows:

1. (1)  An application for emergency relief can be filed before, together with, or after the filing of a Notice of Arbitration, but before the constitution of the arbitral tribunal;

2. (2)  The applicant must pay an initial deposit when filing an application for emergency relief;³

3. (3)  HKIAC will aim to appoint an emergency arbitrator within twenty-four hours from receipt of the application and the required deposit;

4. (4)  An emergency arbitrator is paid by hourly rate and shall not charge a total fee exceeding the maximum amount set by HKIAC⁴ unless the parties agree or HKIAC determines otherwise;

1. (4)  A party may challenge an emergency arbitrator under shortened time limits. If such challenge is successful, HKIAC will seek to appoint a substitute emergency arbitrator within twenty-four hours;

2. (5)  The parties are free to agree upon the seat of the emergency relief proceedings, and failing such agreement the seat will be the seat of the arbitration;

3. (6)  The emergency arbitrator has wide discretion to conduct the emergency relief proceedings and has the power to rule on his or her jurisdiction;

4. (7)  The emergency arbitrator must make an emergency decision within fourteen days from the date on which HKIAC transmitted the file to the emergency arbitrator, unless the time limit is extended by the parties’ agreement or by HKIAC;

5. (8)  The emergency arbitrator shall include a determination on the emergency arbitrator’s jurisdiction over the relief sought and the costs of the proceedings;

6. (p. 179) (9)  Any emergency decision is binding on the parties and is effective for a limited period of time but such decision may be modified, suspended, or terminated by the emergency arbitrator or the arbitral tribunal once constituted;

7. (10)  In general, an emergency arbitrator shall have no further power to act once the tribunal is constituted, and may not act as arbitrator to decide the same dispute;

8. (11)  The emergency arbitrator procedures do not prevent any party from seeking urgent interim relief from a competent authority; and

9. (12)  An emergency arbitrator shall act in the spirit of the HKIAC Rules (2018) on matters not expressly provided for in the procedures.

8.08  The emergency arbitrator process under the HKIAC Rules (2018) commences before, upon, or after the filing of the Notice of Arbitration. The notable change in the HKIAC Rules (2018) is that parties are able to commence the emergency arbitrator procedures before the filing of the Notice of Arbitration, in addition to at the same time or after the filing of the Notice of Arbitration. The party seeking emergency relief must file an application for the appointment of an emergency arbitrator and pay the application deposit. If HKIAC accepts the application, it will seek to appoint an emergency arbitrator within twenty-four hours. The emergency arbitrator must then conduct the proceedings as he or she considers appropriate. The emergency arbitrator may decide whether to conduct the proceedings on a documents-only basis or to hold virtual or in-person hearings. The emergency arbitrator has fourteen days from the date the file was transmitted to him or her to render a decision, which may be extended by the consent of the parties or, in exceptional circumstances, by HKIAC.

8.09  Each of these features will be discussed in detail in the following sections below.

8.10  Urgent interim relief may be necessary to prevent an opposing party from dissipating or destroying assets or evidence, in circumstances where the matter cannot wait for the arbitral tribunal to be constituted.⁵ Traditionally, before an arbitral tribunal was formed, parties who sought urgent interim relief had no choice but to approach the courts of a competent jurisdiction. In many circumstances, relying on courts for urgent interim relief was considered unsatisfactory because:

1. (1)  some national arbitration laws limit the types of interim measures available from a court;⁶

2. (2)  the court process in less arbitration-friendly jurisdictions may be costly and lead to significant delays;⁷

3. (p. 180) (3)  court proceedings in most jurisdictions are public and may result in the publication of information which is otherwise confidential in the arbitral proceedings;⁸

4. (4)  court proceedings are usually associated with a perception of bias, particularly where the proceedings and one of the parties are located in the same jurisdiction;⁹ and

5. (5)  courts may face state immunity arguments in applications for interim relief where the party against whom relief is sought is a sovereign or a state-owned entity.

8.11  For these reasons, parties increasingly wish to use the arbitral process, for which they bargained, to obtain urgent relief even before the arbitral tribunal is formed. To this end, an increasing number of arbitral institutions have introduced emergency arbitrator procedures to enable parties to obtain urgent interim relief.¹⁰ Such procedures address parties’ need for urgent relief prior to the constitution of the arbitral tribunal, while retaining the confidential arbitral framework chosen by the parties.

8.12  HKIAC responded to these calls for emergency relief by including provisions for the appointment of emergency arbitrators in Schedule 4 of the HKIAC Rules (2013). These provisions, with some enhancements, have also been included in the HKIAC Rules (2018). The short deadlines incorporated into Schedule 4 are consistent with the urgent nature of the emergency proceedings. They require, for example, that the emergency arbitrator be appointed within twenty-four hours of HKIAC’s acceptance of an application for emergency relief and that a decision on the application be made within fourteen days from the date on which the emergency arbitrator receives the file. Since these emergency arbitrator procedures were incorporated into the HKIAC Rules (2013), HKIAC has received twenty-seven applications for emergency relief.¹¹

8.13  To facilitate the emergency arbitrator process, the Legislative Council approved an amendment bill to the Arbitration Ordinance, which came into force on 19 July 2013. As a result of this amendment, emergency relief ordered by an emergency arbitrator is enforceable in Hong Kong in broadly the same way as orders and directions of the Court of First Instance (CFI).¹² Hong Kong is one of the very few jurisdictions which expressly recognize the enforceability of relief issued by emergency arbitrators in arbitrations seated in or outside Hong Kong.¹³

8.14  Article 23.1 of the HKIAC Rules (2018) defines the term ‘Emergency Relief’ as ‘urgent interim or conservatory relief … prior to the constitution of the arbitral tribunal’. It should (p. 181) be noted that, under the HKIAC Rules (2018), an application for emergency relief can only be made upon or after the filing of the Notice of Arbitration. The definition in Article 23.1 covers a wide range of interim relief that can be sought by the parties, which commonly include injunctions and orders to preserve assets, evidence, or the status quo between the parties. Article 23.1 incorporates Schedule 4 of the HKIAC Rules (2018) by reference, which sets out detailed procedures for the appointment of an emergency arbitrator and the conduct of emergency relief proceedings.

8.15  The HKIAC emergency arbitrator procedures are available to any party to an arbitration agreement entered into on or after 1 November 2013 (the effective date for the HKIAC Rules (2013) where the emergency arbitrator procedures were first introduced) or to parties who have agreed to apply these procedures in their arbitration agreement. This condition is stated in Article 1.5 of the HKIAC Rules (2018) and intends to preserve the parties’ expectations when entering into an arbitration agreement before the effective date of the emergency arbitrator procedures.¹⁴

8.16  As discussed in paragraph 8.27 below, a party requesting relief from an emergency arbitrator must first demonstrate that its request is so urgent that it cannot wait for the arbitral tribunal to be constituted. Indeed, the emergency arbitrator provision under the HKIAC Rules (2018) applies the same test for interim measures under Article 23.2–23.8. This gives an emergency arbitrator wide discretion when considering whether to order emergency relief in light of the circumstances of each case.

8.17  Article 23.4 of the HKIAC Rules (2018) provides that an arbitral tribunal, when deciding whether to grant interim measures, shall take into account the circumstances of the case and that relevant factors include, but are not limited to, the following:

1. (1)  The applicant is likely to suffer irreparable harm which substantially outweighs the harm likely to result to the respondent if the measure is granted; and

2. (2)  There is a reasonable possibility that the applicant will succeed on the merits of the claim.

8.18  These factors are taken from Article 17A of the UNCITRAL Model Law (2006), which are given effect to by section 36 of the Arbitration Ordinance, and are commonly considered by arbitrators when deciding applications for interim measures in international commercial arbitration. Under the HKIAC Rules (2018), emergency relief takes the same effect as an interim measure and an emergency arbitrator must act in the spirit of the entire HKIAC Rules (2018).

8.19  Under the HKIAC Rules (2018), an arbitral tribunal may order any types of interim measures it considers necessary or appropriate. Such interim measures can take a variety of forms, such as an order, a decision, or an award. Similar principles apply to emergency relief.

8.20  Under the HKIAC Rules (2018), an emergency arbitrator has broad discretion to issue a wide range of emergency relief, including but not limited to, the following:

1. (1)  An injunction to restrain a party from commencing or continuing court proceedings in breach of an arbitration agreement;

2. (2)  An injunction to restrain a party from breaching its contractual duty of confidentiality;

3. (3)  An order to prevent a party from selling shares of a company which may prejudice any relief eventually ordered by an arbitral tribunal;

4. (4)  An order to preserve relevant evidence from imminent destruction, concealment, or subterfuge; and

5. (5)  An order to preserve relevant property from transfer, dissipation, or destruction.

A party requiring Emergency Relief may submit an application (the ‘Application’) for the appointment of an emergency arbitrator to HKIAC (a) before, (b) concurrent with, or following the filing of a Notice of Arbitration, but prior to the constitution of the arbitral tribunal.

8.21  Paragraph 1 of Schedule 4 contains a definition of emergency arbitrator, which is in line with the statutory definition of the Arbitration Ordinance. Section 22A of the Ordinance provides:

[E]mergency arbitrator (緊急仲裁員‎) means an emergency arbitrator appointed under the arbitration rules (including the arbitration rules of a permanent arbitral institution) agreed to or adopted by the parties to deal with the parties’ applications for emergency relief before an arbitral tribunal is constituted.

8.22  Under the HKIAC Rules (2018), an emergency arbitrator does not fall within the definition of an arbitrator.¹⁵ As a result, there are separate provisions regulating the role of an emergency arbitrator (Schedule 4) and the role of an arbitrator (the main body of the HKIAC Rules (2018)) respectively.

8.23  Paragraph 1 of Schedule 4 specifies the time for filing an application for the appointment of an emergency arbitrator. A party in need of emergency relief may submit the application to HKIAC: (a) before the Notice of Arbitration is filed; (b) when the Notice of Arbitration is filed; or (c) between filing the Notice of Arbitration and the constitution of the arbitral tribunal. An application cannot be filed once the tribunal is formed.

(p. 183) 8.24  In contrast with the HKIAC Rules (2013), the HKIAC Rules (2018) allow a party to submit an application to HKIAC prior to the filing of the Notice of Arbitration. Allowing a broader opportunity to submit such application is not intended to open the doors to frivolous applications, but rather provide parties with the ability to trigger the emergency arbitrator procedures as soon as it becomes apparent that urgent relief is required, and even before a pre-condition to arbitration is complete under a multi-tiered dispute resolution clause. The Notice of Arbitration must still be filed within seven days of the filing of the application pursuant to paragraph 21.

8.25  An application for emergency relief must be submitted to HKIAC and delivered to other parties in accordance with the provisions on service of documents under Article 3.1 and 3.2 of the HKIAC Rules (2018). As discussed in Chapter 5, Article 3.1 and 3.2 permits delivery of written communications by hand, registered post, courier, facsimile, email, any secured online repository that the parties have agreed to use, or other means of telecommunication that provides a record of its transmission.

8.26  Under Schedule 4, the applicant must deliver copies of the application and any exhibits to HKIAC and also deliver copies of the application and any exhibits to other parties. Requiring (p. 184) the applicant to serve documents on all other parties increases the efficiency of the emergency arbitrator process, which is particularly important in the context of urgent interim relief.

8.27  An application for emergency relief must contain the information specified in paragraph 2 of Schedule 4. This information is required to determine whether HKIAC will accept the application and it gives the respondent(s) sufficient details of the applicant’s case to prepare a response. A critical component of any application is the need for the applicant to explain why relief is required on an urgent basis before the tribunal is constituted. As one commentator has put it, urgency is ‘the most significant issue’,¹⁶ and ‘the raison d’être of emergency arbitration’,¹⁷ as the emergency arbitrator’s role:¹⁸

is not to usurp the role of the arbitral tribunal. The grant of relief by an emergency arbitrator which could await the constitution of the arbitral tribunal is impermissible. The emergency arbitrator’s focus must be on the period between the commencement of emergency arbitration and the time at which the arbitral tribunal is likely to be constituted. … The emergency arbitrator will also need to consider how long it would take for the arbitral tribunal to organize itself and be in a position to consider an application for interim measures.

8.28  In addition to the documents required by paragraph 2, the applicant may provide additional documents or information (eg witness statements, expert reports, and legal authorities) to establish the urgency of its application under the applicable law. The applicant may also comment on any qualifications required of an emergency arbitrator.

If HKIAC determines that it should accept the Application, HKIAC shall seek to appoint an emergency arbitrator within 24 hours after receipt of both the Application and the Application Deposit.

8.29  Once HKIAC receives an application for emergency relief, it will promptly check whether:

1. (1)  the emergency arbitrator procedures apply;

2. (2)  the application was submitted before, upon, or after the commencement of an arbitration and before the constitution of the arbitral tribunal;

3. (3)  the application contains all the information required under paragraph 2 of Schedule 4; and

4. (4)  the application deposit has been paid in full.

8.30  Schedule 4 does not set out a test for HKIAC to determine whether to accept an application for the appointment of an emergency arbitrator. In practice, if HKIAC is satisfied that the emergency arbitrator procedure applies and the application complies with the requirements (p. 185) listed in paragraphs 2 to 4 of Schedule 4, it will accept the application and proceed to the next step of the proceedings. HKIAC will not, however, determine whether the applicant has satisfied the requirement of urgency to justify its application for emergency relief—this is a matter to be determined by the emergency arbitrator once appointed.

8.31  Pursuant to Article 2.2 of the HKIAC Rules (2018), unless otherwise determined by the HKIAC, all decisions made by HKIAC under the HKIAC Rules (2018) are final and, to the extent permitted by any applicable law, not subject to appeal.¹⁹ Accordingly, HKIAC’s decision to accept or reject an application for emergency relief is not generally subject to review. HKIAC’s acceptance of an application does not necessarily mean the application is admissible under Article 23.1 or falls within the jurisdiction of the emergency arbitrator. HKIAC’s rejection of an application does not necessarily mean the applicant is precluded from submitting a new application at a later stage of the proceedings before the formation of the arbitral tribunal.

8.32  If HKIAC accepts an application, HKIAC will ‘seek’ to appoint an emergency arbitrator within twenty-four hours from the date on which it received a complete application, as defined under paragraph 2 of Schedule 4, and the application deposit.²⁰ The twenty-four-hour time period is a shorter time period than that under the HKIAC Rules (2013) and was introduced based on HKIAC’s experience in the time generally required by it to appoint an emergency arbitrator. In practice, HKIAC will begin the appointment process as soon as it learns about an emergency arbitrator application. Even if an application is incomplete or the required deposit has not yet been paid, the Secretariat will start to approach potential emergency arbitrators. This enables the candidates to conduct a conflict check and provide their hourly rates as soon as possible to be ready for the appointment. Once HKIAC accepts the application, the Secretariat will circulate relevant information and propose a number of candidates to the Appointments Committee for approval. The entire appointment process can be completed very swiftly, usually within a matter of hours.

8.33  To ensure an efficient appointment process, HKIAC will appoint emergency arbitrators directly. When appointing an emergency arbitrator, HKIAC will consider any suggested candidates or any comments on the qualification and nationality of the emergency arbitrator from the parties. HKIAC has established a Panel of Emergency Arbitrators (EA Panel),²¹ whose members have significant experience in dealing with interim relief applications arising from a broad range of disputes and have indicated their availability to act as an emergency arbitrator. The EA Panel comprises arbitrators from around the world so that the Secretariat can have access to potential candidates no matter when it receives the application. HKIAC will seek to appoint an emergency arbitrator based in a jurisdiction that is convenient to the parties. Generally, an emergency arbitrator will be appointed from the EA Panel, but in appropriate circumstances, HKIAC may choose someone from outside the EA Panel.

The Application Deposit is the amount set by HKIAC, as stated on HKIAC’s website on the date the Application is submitted. The Application Deposit consists of HKIAC’s emergency administrative fees and the emergency arbitrator’s fees and expenses. The emergency arbitrator’s fees shall be determined by reference to his or her hourly rate subject to the terms of Schedule 2 and shall not exceed the amount set by HKIAC, as stated on HKIAC’s website on the date the Application is submitted unless the parties agree or HKIAC determines otherwise in exceptional circumstances. HKIAC may, at any time during the Emergency Relief proceedings, request additional deposits to cover any increase in the emergency arbitrator’s fees or HKIAC’s emergency administrative fees, taking into account, inter alia, the nature of the case and the nature and amount of work performed by the emergency arbitrator and HKIAC. If the party which submitted the Application fails to pay the additional deposits within the time limit fixed by HKIAC, the Application shall be dismissed.

8.34  A party applying for the appointment of an emergency arbitrator under the HKIAC Rules (2018) must pay an initial deposit to cover HKIAC’s administrative expenses and the emergency arbitrator’s fees and expenses (Application Deposit). The amount of the deposit, set by HKIAC, is as stated on its website on the date of application. At the time of writing, the Application Deposit is HK$250,000, which is intended to cover (a) HKIAC’s administrative expenses in the amount of HK$45,000, and (b) the emergency arbitrator’s fees and expenses in the amount of HK$205,000.²²

8.35  HKIAC’s administrative expenses are a fixed amount and cover primarily the work undertaken by HKIAC to examine an application for emergency relief and to appoint an emergency arbitrator if the application is accepted. The emergency arbitrator’s fees are calculated by reference to his or her hourly rate. The standard terms of appointment in Schedule 2 of the HKIAC Rules (2018) apply to the appointment of an emergency arbitrator. Accordingly, at the time of writing, an emergency arbitrator’s hourly rate shall not exceed HK$6,500, unless the parties agree or HKIAC determines otherwise. In addition, paragraph 5 of Schedule 2 of the HKIAC Rules (2018) introduces a maximum total fee of HK$200,000 which can be charged by an emergency arbitrator. An emergency arbitrator wishing to exceed the maximum hourly rate or maximum total fee (in exceptional circumstances) must obtain the parties’ agreement or HKIAC’s decision.

8.36  In appropriate circumstances, HKIAC may increase its administrative expenses and the emergency arbitrator’s fees, and request additional deposits at any time during the proceedings. Such circumstances may include cases involving complex factual and legal issues, lengthy hearings, and an excessive amount of work by the emergency arbitrator or HKIAC. The applicant’s failure (p. 187) to pay the additional deposits within the applicable time limit will risk having the application dismissed.

8.37  Where an application is filed by more than one party, those parties must pay the Application Deposit in equal shares, unless they otherwise agree. The deposit must generally be paid by the party who submitted the application. Failure to make the payment within the time limit set by HKIAC may result in the dismissal of the application.

Once the emergency arbitrator has been appointed, HKIAC shall communicate the appointment to the parties to the Application and shall communicate the case file to the emergency arbitrator. Thereafter, the parties shall communicate with the emergency arbitrator directly, with a copy to all other parties to the Application and HKIAC. Any written communications from the emergency arbitrator to the parties shall also be copied to HKIAC.

8.38  Following the appointment of the emergency arbitrator, HKIAC will communicate an electronic copy of the case file to the emergency arbitrator (unless he or she requests a hard copy) and notify the parties accordingly. During the course of the emergency relief proceedings, the parties and the emergency arbitrator will communicate with each other directly, copying any correspondence to HKIAC. This allows HKIAC to monitor and facilitate an efficient emergency arbitration process. Communications in emergency relief proceedings are usually conducted by email to ensure that the proceedings progress expeditiously.

Article 11 of the Rules shall apply to the emergency arbitrator, except that the time limits set out in Articles 11.7 and 11.9 are shortened to three days.

8.39  An emergency arbitrator assumes the same responsibility to be impartial and independent as applies to members of an arbitral tribunal. For this reason, the same provisions on qualifications and neutrality of arbitrators under the HKIAC Rules (2018)²³ apply to emergency arbitrators, except that the time limits for the procedure for challenging emergency arbitrators are shortened. A detailed discussion about qualifications and challenge to an arbitral tribunal can be found in Chapter 7.

8.40  In general, where parties have different nationalities, a sole or presiding arbitrator will not have the same nationality as any party, unless the parties otherwise agree in writing.²⁴ Although this rule does not expressly apply to an emergency arbitrator, in practice HKIAC will aim to appoint an emergency arbitrator of a neutral nationality.²⁵

8.41  As part of the appointment process, a prospective emergency arbitrator must sign a statement confirming his or her availability to decide the dispute and his or her impartiality and (p. 188) independence. Before the appointment, the prospective emergency arbitrator must also disclose any circumstances likely to give rise to justifiable doubts as to his or her impartiality or independence.

8.42  A party may challenge the appointment of an emergency arbitrator on any of the following grounds:²⁶

1. (1)  Justifiable doubts exist as to the emergency arbitrator’s impartiality and independence;

2. (2)  The emergency arbitrator does not possess the qualifications agreed by the parties;

3. (3)  The emergency arbitrator becomes de jure or de facto unable to perform his or her functions; or

4. (4)  The emergency arbitrator fails to act without undue delay.

8.43  These are the same grounds for challenging an arbitrator under Article 11 of the HKIAC Rules (2018). Likewise, the same standard for determining whether any of these grounds has been established should apply in respect of emergency arbitrators.

8.44  The challenge procedure operates under a very short timeframe.²⁷ A party who intends to challenge an emergency arbitrator must send a notice of the challenge to HKIAC, all other parties, and the emergency arbitrator within three days after the appointment was notified to the challenging party or within three days after that party becomes aware of the circumstances for challenge.²⁸ If the emergency arbitrator refuses to withdraw or the non-challenging party does not agree to the challenge within three days from receipt of the notice of challenge, HKIAC will decide on the challenge. While the challenge is being determined by HKIAC, the emergency arbitrator may proceed with the arbitration.

Where an emergency arbitrator dies, has been successfully challenged, has been otherwise removed, or has resigned, HKIAC shall seek to appoint a substitute emergency arbitrator within 24 hours. If an emergency arbitrator withdraws or a party agrees to terminate an emergency arbitrator’s appointment under paragraph 8 of this Schedule, no acceptance of the validity of any ground referred to in Article 11.6 of the Rules shall be implied. If the emergency arbitrator is replaced, the Emergency Relief proceedings shall resume at the stage where the emergency arbitrator was replaced or ceased to perform his or her functions, unless the substitute emergency arbitrator decides otherwise.

8.45  This provision follows the general rule for replacement of an arbitrator under Article 12.1 of the HKIAC Rules (2018). It provides that a substitute arbitrator shall be appointed pursuant to the rules that were applicable to the appointment of the arbitrator being replaced. Since an emergency arbitrator is appointed by HKIAC under paragraph 4 of Schedule 4, HKIAC will endeavour to appoint a replacement emergency arbitrator within twenty-four hours. The time period by which to appoint a replacement emergency arbitrator is shortened in the HKIAC Rules (2018) to be consistent with paragraph 4 which sets out the time period by which to appoint an emergency arbitrator.

8.46  Where a challenged emergency arbitrator withdraws or a party agrees to the challenge, no acceptance of the validity of any ground for such challenge is implied. The reason for such provision is that an emergency arbitrator sometimes chooses to resign for reasons unrelated to any ground of the challenge. For example, an emergency arbitrator may resign simply to avoid any delay to the emergency relief proceedings.

8.47  Where an emergency arbitrator is replaced, the substitute emergency arbitrator has the power to decide how to resume the emergency relief proceedings. In the absence of such decision, the proceedings will resume at the point where the previous emergency arbitrator was replaced or ceased to perform his or her functions.

If the parties have agreed on the seat of arbitration, such seat shall be the seat of the Emergency Relief proceedings. Where the parties have not agreed on the seat of arbitration, and without prejudice to the arbitral tribunal’s determination of the seat of arbitration pursuant to Article 14.1 of the Rules, the seat of the Emergency Relief proceedings shall be Hong Kong.

8.48  The seat of the emergency relief proceedings generally determines the nationality of any emergency decision and the applicable procedural law.²⁹ Under the HKIAC Rules (2018), parties are free to agree on the seat of the emergency relief proceedings, which can be different from the seat of arbitration. In practice, parties rarely turn their minds to the seat of their emergency relief proceedings. Paragraph 9 of Schedule 4 therefore provides a default rule that the seat of the emergency relief proceedings will be the seat of arbitration absent the parties’ agreement to the contrary. If there is no agreed seat of arbitration, the seat of (p. 190) the emergency relief proceedings will be Hong Kong. This rule does not affect the arbitral tribunal’s power to determine the seat of arbitration under Article 14.1 of the HKIAC Rules (2018). To the extent that a hearing is necessary, the emergency arbitrator may hold such hearing at any convenient location, including virtually.

Taking into account the urgency inherent in the Emergency Relief proceedings and ensuring that each party has a reasonable opportunity to be heard on the Application, the emergency arbitrator may conduct such proceedings in such a manner as the emergency arbitrator considers appropriate. The emergency arbitrator shall have the power to rule on objections that the emergency arbitrator has no jurisdiction, including any objections with respect to the existence, validity or scope of the arbitration clause or of the separate arbitration agreement, and shall resolve any disputes over the applicability of this Schedule.

8.49  The HKIAC Rules (2018) give an emergency arbitrator wide discretion to conduct the emergency relief proceedings in a manner appropriate to the circumstances of the case. For example, the emergency arbitrator has the power to: (a) fix a timetable for written submissions by the parties; (b) decide the number of written submissions required and the manner in which they are exchanged (eg simultaneous or sequential filing); (c) decide whether to hold any hearing or alternatively to determine the application based on documents only; and (d) if a hearing is to be held, to decide whether such hearing shall be conducted in person or by telephone or video conference.

8.50  When exercising these case management powers, an emergency arbitrator must bear in mind the urgency of the matter and ensure each party will be given a reasonable opportunity to be heard. Emergency relief proceedings must be conducted in a highly efficient manner and in accordance with due process.³⁰ The use of the term ‘reasonable opportunity to be heard’ in paragraph 10 (rather than ‘full opportunity’) is consistent with the standard which applies to regular proceedings in Article 13.1 of the HKIAC Rules (2018) and section 46(3)(b) of the Arbitration Ordinance.³¹

8.51  In HKIAC’s experience, emergency arbitrators have used the following techniques to facilitate an expeditious determination of the emergency relief application:

1. (1)  All written communications are to be exchanged by email only (except for voluminous pleadings and supporting documents which may be delivered in hard copy);

2. (2)  After filing the application for emergency relief, there will be a single round of written submissions (filed sequentially) by each party, with full particulars of their cases;

3. (3)  The time periods for filing written submissions are significantly shortened;

4. (4)  The application will be decided solely on the documents submitted. If there is to be a hearing, the hearing should be no longer than one day and may be conducted by telephone or videoconference if the parties and emergency arbitrator are in different locations; and

5. (p. 191) (5)  A tribunal secretary may be engaged to provide administrative assistance to the emergency arbitrator (such as organizing files, drafting correspondence and non-substantive sections of the emergency decision). This allows the emergency arbitrator to focus on deciding the merits of the application and issue a decision quickly.

8.52  An emergency arbitrator appointed under the HKIAC Rules (2018) may rule on any jurisdictional objection, including arguments that:

1. (1)  there is no arbitration agreement between the parties;

2. (2)  the arbitration agreement is invalid, inoperative, or incapable of being performed under the applicable law;

3. (3)  the emergency relief application relates to matters that do not fall within the scope of the arbitration agreement;

4. (4)  the emergency arbitrator does not have the power to issue the type of emergency relief sought by the applicant;

5. (5)  the applicant’s application is not urgent;

6. (6)  the emergency arbitrator procedures do not apply;

7. (7)  a party is not a party to the arbitration agreement.

8.53  Any jurisdictional decision does not bind the arbitral tribunal, as the tribunal may modify or vacate a decision made by an emergency arbitrator upon a party’s request. While an emergency arbitrator can rule on its own jurisdiction, he or she cannot determine the substance of the dispute, which is a matter to be decided by the arbitral tribunal.

Articles 23.2 to 23.8 shall apply, mutatis mutandis, to any Emergency Relief granted by the emergency arbitrator.

8.54  Paragraph 11 of Schedule 4 is a new provision in the HKIAC Rules (2018) that clarifies that provisions related to the interim measures of protection granted by the arbitral tribunal (Articles 23.2 to 23.8 of the HKIAC Rules (2018)) shall apply,³² mutatis mutandis, to any emergency relief granted by the emergency arbitrator.

(p. 192) 8.55  Given the urgency associated with emergency relief proceedings, paragraph 12 requires an emergency arbitrator to issue a decision within fourteen days after receipt of the case file from HKIAC, unless the time limit is extended by the parties or HKIAC. The HKIAC Rules (2018) shorten the period from fifteen days (as set out in the HKIAC Rules (2013)) to fourteen days. In practice, for many less complicated cases, an emergency arbitrator may be able to render a decision in less than fourteen days. Emergency arbitrator procedures under many major arbitration rules provide a time limit for the issuance of an emergency decision, which ranges from five days to fifteen days,³³ while some institutional rules do not provide for any such deadline.³⁴

8.56  In exceptional cases, the emergency arbitrator may require additional time to render a decision. An emergency arbitrator arguably becomes functus officio when the time limit for issuing an emergency decision expires.³⁵ Any decision issued outside the time limit may be vulnerable to challenge. The HKIAC Rules (2018) therefore provide that the fourteen-day time period referred to in paragraph 12 of Schedule 4 may be extended by the parties’ agreement or by HKIAC in appropriate circumstances. This ensures that an enforceable emergency decision is issued within the applicable time limit, especially in circumstances where it is practically difficult to obtain all parties’ agreement to extend the time limit (eg where a party refuses to participate in the proceedings).

8.57  The flexibility to extend time limits when necessary is also reflected in paragraph 13. As a general rule, an emergency arbitrator ceases to act as soon as the tribunal is constituted.³⁶ However, where the tribunal is formed before the conclusion of the time period for issuing an emergency decision, the emergency arbitrator retains the power to proceed to handle the emergency relief application. This may occur, for example, where the parties jointly designate a sole arbitrator before the conclusion of the emergency relief proceedings. In this situation, the emergency arbitrator may continue to make a decision on the application for emergency relief.

(p. 193) 8.58 

8.59  First, an emergency decision must be in writing. A decision is in writing if its content is recorded in any form, such as a printed document, fax, or email.

8.60  Second, an emergency decision must state the date of the decision and the reasons for the emergency decision. The HKIAC Rules (2018) clarify that such reasons may be in summary form. As the expedited procedure is intended to be a speedy process, the form applied to expedited procedures was thought to be appropriate for emergency decisions as well. A decision must expressly address one preliminary issue: whether the emergency arbitrator has jurisdiction over the application. The issue of jurisdiction concerns whether the emergency arbitrator has the power to issue the relief sought pursuant to the relevant arbitration agreement and the HKIAC Rules (2018).

8.61  Third, the emergency arbitrator must sign an emergency decision. The same requirement applies to an award issued by the arbitral tribunal under the HKIAC Rules (2018).³⁷

Any Emergency Decision may fix and apportion the costs of the Emergency Relief proceedings, subject always to the power of the arbitral tribunal to fix and apportion finally such costs in accordance with Article 34 of the Rules. The costs of the Emergency Relief proceedings include HKIAC’s emergency administrative fees, the fees and expenses of the emergency arbitrator and any tribunal secretary, and the reasonable legal and other costs incurred by the parties for the Emergency Relief proceedings.

8.62  Under the HKIAC Rules (2018), an emergency decision may contain a determination on the costs incurred by the parties in the emergency relief proceedings. The emergency arbitrator may fix the amount and allocate such costs between the parties or leave it to the arbitral tribunal, once constituted. Often costs are dealt with at the conclusion of the emergency arbitration proceedings in the event that, for some reason, the arbitral tribunal is not subsequently constituted or the parties do not ask the tribunal to make a decision on costs. For example, after receipt of the emergency decision, the claimant may no longer wish to proceed with the constitution of the arbitral tribunal to decide the substantive dispute, in which case there will be no subsequent decision on costs. If a tribunal is subsequently constituted, the emergency arbitrator’s decision on costs is subject to the tribunal’s determination in this regard under Article 34 of the HKIAC Rules (2018).

8.63  The costs of the emergency relief proceedings include:

1. (1)  HKIAC’s emergency administrative fees;

2. (2)  the fees and expenses of the emergency arbitrator and any tribunal secretary; and

3. (3)  the reasonable legal and other costs incurred by the parties.

(p. 194) 8.64  HKIAC’s emergency administrative fees are a fixed amount and, at the time of writing, are set at HK$45,000. HKIAC may increase this amount, taking into account the nature of the case and the amount of work performed by HKIAC.³⁸ HKIAC’s emergency administrative fees cover primarily HKIAC’s work on reviewing an application for emergency relief, ensuring that the application is properly filed, and appointing an emergency arbitrator within twenty-four hours. Such fees are included in the Application Deposit, to be paid by the applicant. However, the applicant may seek an order from the emergency arbitrator or, if applicable, the arbitral tribunal, to recover such costs from the respondent.

8.65  The emergency arbitrator’s fees are calculated on the basis of the hourly rates set out in Schedule 2 of the HKIAC Rules (2018).³⁹ The emergency arbitrator’s fees and expenses are determined pursuant to paragraphs 4 and 5 of HKIAC’s Practice Note on Costs of Arbitration Based on Schedule 2 and Hourly Rates (effective 11 March 2019).⁴⁰ HKIAC will collect an initial deposit of HK$250,000 from the applicant to cover the initial costs of the emergency arbitrator which may increase during the course of the proceedings pursuant to paragraph 5 of Schedule 4.

8.66  Only ‘reasonable’ legal costs of the parties are included in the costs of the emergency relief proceedings. The question whether a legal cost has been reasonably incurred will be decided by the emergency arbitrator or arbitral tribunal having regard to matters, including the conduct of that party’s counsel in the proceedings and the complexity of the case. The emergency arbitrator or arbitral tribunal may ask each party to submit a summary of their legal costs to assess the reasonableness of the costs and apportion them between the parties.

8.67  There may be other costs in the emergency relief proceedings. Parties may seek to recover these costs in an application. For example, the parties may have to pay fees for transcription services, hearing room charges and, if the emergency arbitrator has appointed a secretary, the fees and expenses of that secretary.

Any Emergency Decision shall have the same effect as an interim measure granted pursuant to Article 23 of the Rules and shall be binding on the parties when rendered.

8.68  Under the HKIAC Rules (2018), an emergency decision has the same effect as an interim measure ordered by the arbitral tribunal. Accordingly, an emergency arbitrator may be guided by the provisions on interim measures in the HKIAC Rules (2018) when deciding an application for emergency relief.

8.69  Any decision issued by an emergency arbitrator is binding on the parties. There is a strong incentive for a party to comply with an emergency decision.⁴¹ If it fails to do so, the arbitral tribunal may draw an adverse inference from non-compliance.

(p. 195) 8.70  In Hong Kong, if a party fails to comply with an emergency decision (regardless of where it was made) the other party may seek the leave of the CFI to enforce the decision in the same manner as an order or direction of the Court.⁴² If leave is granted, the CFI may enter judgment in terms of the emergency decision.⁴³ For emergency relief issued outside Hong Kong, the CFI will enforce such relief if the enforcing party can demonstrate that it comprises a temporary measure ordering a party to do any of the following:⁴⁴

1. (1)  Maintain or restore the status quo pending the determination of the dispute;

2. (2)  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;

3. (3)  Provide a means of preserving assets out of which a subsequent award made by an arbitral tribunal may be satisfied;

4. (4)  Preserve evidence that may be relevant and material to resolving the dispute;

5. (5)  Give security in connection with anything to be done under (1)–(4) above; and

6. (6)  Give security for the costs of the arbitration.

8.71  Paragraph 17 sets out the circumstances where an emergency decision will cease to be binding. It provides a clear endpoint for such decisions, which may have a substantive impact on a dispute if they last for an indefinite period of time.

(p. 196) 8.72  Under some institutional rules, emergency arbitrators must cease to exercise their functions once the arbitral tribunal is constituted and they are disqualified from acting as an arbitrator in the same dispute.⁴⁶ HKIAC has taken a more flexible approach. While paragraph 18 follows the general rule that an emergency arbitrator will have no power to act after the arbitral tribunal is formed, this rule is subject to an exception which permits an emergency arbitrator to make an emergency decision even after the tribunal is constituted. As discussed in paragraph 8.57 above, this exception is of practical importance because, where the tribunal is constituted quickly within the time limit for emergency decisions, the parties may still wish to have a decision on the application for emergency relief from the emergency arbitrator, who may have already spent significant time and effort hearing the parties’ submissions on the application and is in a position to render a decision.

8.73  An emergency arbitrator is generally not permitted to act as an arbitrator to decide the same dispute. Having determined an emergency relief application deriving from the dispute, there may be a concern that an emergency arbitrator may not be able to evaluate the evidence and submissions on the merits of the arbitration as objectively as another arbitrator. The emergency arbitrator may also be called upon as a member of an arbitral tribunal to modify or terminate their own decision, which gives rise to similar issues. In any event, some parties may prefer to retain the emergency arbitrator as an arbitrator to determine the substance of the dispute given his or her prior knowledge of the case. For this purpose, paragraph 19 permits an emergency arbitrator to act as arbitrator if the parties so agree.

The Emergency Arbitrator Procedure is not intended to prevent any party from seeking urgent interim or conservatory measures from a competent authority at any time.

8.74  Paragraph 20 clarifies that the emergency arbitrator procedure does not impinge upon a party’s right to seek urgent interim relief from a competent authority. There are certain benefits of seeking interim relief from the courts. For example, courts can grant orders on an ex parte basis, bind third parties, and exercise coercive powers to sanction breaches of any such orders.

8.75  Paragraph 20 preserves a party’s right of access to a competent authority for urgent interim and conservatory relief throughout the emergency arbitrator proceedings. However, under section 45(4) of the Arbitration Ordinance, the CFI may decline to issue an interim measure on the ground that: (a) the interim measure sought is the subject of the arbitral proceedings; or (b) it is more appropriate for the interim measure sought to be dealt with by the arbitral tribunal.⁴⁷

The Emergency Arbitrator Procedure shall be terminated if a Notice of Arbitration has not been submitted by the applicant to HKIAC within seven days of HKIAC’s receipt of the Application, unless the emergency arbitrator extends this time limit.

8.76  This is a new provision which complements the amendment in paragraph 1(a) which allows the applications to be made before the filing of the Notice of Arbitration. If the applicant fails to submit a Notice of Arbitration to HKIAC within seven days of HKIAC’s receipt of the application for emergency relief, as a default rule, the Emergency Arbitrator Procedure shall be terminated. Such time limit was included to ensure that emergency arbitrator applications are not filed without the intention to commence an arbitration and are instead based on genuine disputes. The emergency arbitrator is empowered to extend this time limit under certain circumstances, in particular, where it is clear that a Notice of Arbitration will be filed imminently. The power of the emergency arbitrator to extend the time limit provides necessary flexibility in the event that the claimant is not able to commence an arbitration within seven days for legitimate reasons, including, but not limited to, instances where certain condition-precedent for arbitration has not yet been completed.

Where the Emergency Arbitrator Procedure is terminated without an Emergency Decision, the emergency arbitrator may fix and apportion any costs of the Emergency Relief proceedings, subject to the power of the arbitral tribunal to fix and apportion finally such costs in accordance with Article 34 of the Rules.

8.77  As discussed above, any emergency decision may fix and apportion costs of the Emergency Relief proceedings under paragraph 15 of Schedule 4. This provision has been added to account for circumstances whereby the emergency arbitrator decision is terminated without an emergency decision. In such instances, the emergency arbitrator retains the power to fix and apportion such costs even where the Emergency Arbitrator Procedure is terminated without an Emergency Decision. The arbitral tribunal, once constituted, will then have the power to fix and apportion finally such costs pursuant to Article 34 of the Rules.

8.78  The HKIAC Rules (2018) are one of the few sets of institutional arbitration rules which contain detailed and comprehensive provisions on interim relief. These detailed provisions have proven to be a very useful feature, as discussed further below. Articles 23.2–23.9 are largely modelled on the relevant provisions of the UNCITRAL Rules (2013) and the UNCITRAL Model Law (2006), to which effect is given by Part 6 of the Arbitration Ordinance.

(p. 198) 8.79  The HKIAC Rules (2013) significantly expanded the provisions on interim measures from those contained in the HKIAC Rules (2008)⁴⁸ and the HKIAC Rules (2018) have retained such provisions. As interim measures are often sought by parties from arbitral tribunals in international arbitration, detailed rules can be effective in addressing the increasingly complex issues associated with requests for interim measures. Users of arbitration prefer clearer rules to avoid uncertainty on issues such as the types of interim measures that can be ordered and the criteria for issuing such measures. HKIAC has responded to these concerns by incorporating international standards on interim measures, covering the following matters:

1. (1)  The discretionary power of the arbitral tribunal to issue an interim measure;

2. (2)  The meaning of interim measures under the HKIAC Rules (2018);

3. (3)  The forms and types of interim measures available under the HKIAC Rules (2018);

4. (4)  The relevant factors to be considered by the arbitral tribunal when deciding whether to grant an interim measure;

5. (5)  The tribunal’s ability to modify, suspend, or terminate an interim measure;

6. (6)  The provision of security in connection with interim measures;

7. (7)  The parties’ obligation to disclose any material change of circumstances underlying the interim measure sought or granted;

8. (8)  The requesting party’s liability for costs and damages caused by any wrongfully issued interim measure; and

9. (9)  A party’s ability to seek interim measures from a competent court.

8.80  As detailed above and as set out in paragraph 11 of Schedule 4 of the HKIAC Rules (2018), Articles 23.2–23.8 apply, mutatis mutandis, to emergency relief granted by emergency arbitrators.

At the request of either party, the arbitral tribunal may order any interim measures it deems necessary or appropriate.

8.81  Interim measures are an important and effective tool for parties engaged in international arbitration. In practice, parties usually approach an arbitral tribunal (rather than a court of competent jurisdiction) for interim measures. If a party requires urgent interim relief prior to the constitution of the tribunal, it may seek such relief from an emergency arbitrator (see Section A above) or a court of competent jurisdiction (see Section C below).

8.82  Article 23.2 empowers the arbitral tribunal, at the request of any party, to order any interim measures it deems necessary or appropriate. This provision is consistent with international arbitral practice and the relevant provision of the Arbitration Ordinance.⁴⁹ Article 23.2 deliberately uses very broad language to avoid any fetter on an arbitral tribunal’s discretion to order interim relief. This provision remains unchanged from Article 23.2 of the HKIAC Rules (2013) and Article 24.1 of the HKIAC Rules (2008).

8.83  Unlike many institutional rules and the HKIAC Rules (2008),⁵⁰ Article 23.3 of the HKIAC Rules (2018) contains a definition of interim measures. This provision reduces uncertainty and disputes about the meaning of such measures. The definition draws heavily on Article 17(2) of the UNCITRAL Model Law (2006), given effect to by section 35(1) of the Arbitration Ordinance. However, Article 23.3 of the HKIAC Rules (2018) makes clear that the categories of interim measures are not an exhaustive list and are expressed as examples. This is a deliberate modification from the UNCITRAL Model Law (2006), which adds flexibility to the types of interim measures available under the HKIAC Rules (2018).

8.84  Examples of the categories of interim measures available from arbitral tribunals are enumerated in Article 23.3(a) to (d) of the HKIAC Rules (2018):

1. (1)  Interim measures to maintain or restore status quo. An interim measure may be ordered to maintain or restore the status quo pending a determination of the dispute. This is a well-established and important example of an interim measure.⁵¹ The term ‘status quo’ has been held to mean ‘the last peaceable state [of affairs] between the parties’.⁵² The purpose of ordering interim relief is to prevent any modifications to the legal or factual circumstances that would render the final award ineffectual or meaningless.⁵³ The disjunctive use of the words ‘maintain’ and ‘restore’ implies that the relevant ‘status quo’ may be a time anterior to the filing of the Notice of Arbitration.⁵⁴

2. (2)  Interim measures to prevent harm to the arbitral process. An interim measure may be ordered to require parties to take action that would prevent, or refrain from taking action likely to cause, current or imminent harm or prejudice to the arbitral process. Article 23.3(b) of the HKIAC Rules (2018) provides the arbitral tribunal with the (p. 200) authority to order interim relief to prevent a party from obstructing or frustrating the arbitral process.⁵⁵ This may include, for example, anti-suit injunctions to restrain a party that is threatening to commence or has actually commenced court proceedings in breach of an arbitration agreement.

3. (3)  Interim measures to preserve assets. An arbitral tribunal may issue an interim measure to preserve assets out of which any subsequent award may be satisfied. Article 23.3(c) of the HKIAC Rules (2018) is intended to provide arbitral tribunals with the authority to make asset preservation orders for the purposes of preventing a counterparty from sequestering or destroying assets rendering the final award meaningless.⁵⁶ An arbitral tribunal must exercise caution when making asset preservation orders to avoid inadvertently binding third parties, as any order of an arbitral tribunal extending to third parties is likely to be ineffective because they are not privy to the arbitral proceedings.⁵⁷

4. (4)  Interim measures to preserve evidence. An arbitral tribunal may order interim measures to preserve evidence that may be relevant and material to the resolution of the dispute. Article 23.3(d) allows the arbitral tribunal to order the inspection, delivery, and custody of photographs, audiovisual recordings, documents, or other forms of evidence. The phrase ‘relevant and material’ is used in the IBA Rules on the Taking of Evidence in International Commercial Arbitration⁵⁸ and is widely used for determining whether documents should be produced in international arbitration.

8.85  Article 23.3 of the HKIAC Rules (2018) empowers an arbitral tribunal to issue injunctive relief by virtue of its broad definition of interim measures. This is consistent with section 35(2) of the Arbitration Ordinance which provides that an interim measure is to be construed as including an injunction.

8.86  An order requiring a claimant to give security for the costs of the arbitration is not considered an interim measure under Hong Kong law.⁵⁹ Accordingly, security for costs is dealt with separately in Article 24 of the HKIAC Rules (2018).⁶⁰

8.87  In light of the above, tribunals may order a broad range of interim relief including, without limitation, the following:

1. (1)  An anti-suit injunction restraining a party from pursuing or proceeding with court proceedings in breach of the applicable arbitration agreement;

2. (2)  Injunctive relief preventing a party from taking any actions in breach of its duty of confidentiality;

3. (3)  An order directing a party not to destroy certain material documents that are relevant to the determination of the dispute;

4. (4)  An interim award requiring a party to make an interim payment;

5. (5)  An order restraining a party from entering into a transaction with a third party which may violate the contract under which the dispute arises; and

6. (p. 201) (6)  An order requiring a party to arrange for a bank to issue a letter of credit to provide sufficient security for a claim.

8.88  An interim measure under Article 23.3 may take various forms. It can be a decision, order, an award or in another form. This feature enhances the possibility of enforcement under the New York Convention or other enforcement regimes.⁶¹ With respect to the enforcement of interim measures, the courts in some (non-Model Law) jurisdictions may only enforce final arbitral awards. In such jurisdictions, there is a risk of non-enforcement even if the interim measures are labelled as awards since interim measures are usually provisional decisions.⁶²

8.89  An arbitral tribunal seated in Hong Kong is not restricted to ordering the interim measures provided for in Article 17 of the UNCITRAL Model Law (2006). A tribunal can make a range of other incidental orders or directions to ensure the effectiveness of an interim measure requested and to facilitate an efficient arbitral process.

8.90  Under section 37 of the Arbitration Ordinance, an arbitral tribunal may grant a preliminary order ex parte directing a party not to frustrate the purpose of an interim measure. This is a feature of the Arbitration Ordinance, which gives effect to Article 17B of the UNCITRAL Model Law (2006). Article 17B provides that a party may, without notice to any other party, make a request for an interim measure together with an application for a preliminary order directing a party not to frustrate the purpose of the interim measure requested. The tribunal may grant a preliminary order if it considers that prior disclosure of the request for the interim measure to the party against whom it is directed risks frustrating the purpose of the measure. Similar conditions for granting interim measures apply to any preliminary orders.⁶³

8.91  Section 56(1) of the Arbitration Ordinance lists a number of additional measures that can be ordered by an arbitral tribunal. These measures include:

1. (1)  an order requiring a claimant to provide security for costs;⁶⁴

2. (2)  an order directing the discovery of documents or the delivery of interrogatories;

3. (3)  an order directing evidence to be given by affidavit;

4. (4)  an order directing the inspection, photographing, preservation, custody, detention, or sale of any relevant property; and

5. (5)  an order directing samples to be taken from, observations to be made of, or experiments to be conducted on any relevant property.

8.92  Furthermore, unless otherwise agreed by the parties, an arbitral tribunal may:⁶⁵

1. (1)  administer oaths to, or take the affirmations of, witnesses and parties;

2. (2)  examine witnesses and parties on oath or affirmation; or

3. (p. 202) (3)  direct witnesses to attend before the arbitral tribunal to give evidence or to produce documents or other evidence.

8.93  Article 23.4 sets out the factors to be considered by the arbitral tribunal when determining a request for an interim measure. This provision is also contained in the HKIAC Rules (2013) and (2008). In deciding whether to issue interim relief, the arbitral tribunal must consider all the circumstances of the case, including the following factors:

1. (1)  Reparability of harm: whether the failure to grant the interim measure sought is likely to cause harm not adequately reparable by an award of damages;

2. (2)  Balance of harms: whether any such harm substantially outweighs the harm likely to be caused to the party against whom the measure is directed if the measure is granted; and

3. (3)  Reasonable possibility of success: whether there is a reasonable possibility that the applicant will succeed on the merits of the claim.⁶⁶

8.94  The ‘reparability of harm’ test does not require literal irreparability.⁶⁷ This standard must be interpreted flexibly.⁶⁸ In examining whether the harm is not adequately reparable, a tribunal must examine the nature of the harm.⁶⁹ Where damages are an adequate remedy for any alleged breach of duty, interim measures will often be refused.⁷⁰ Examples of ‘not adequately reparable harm’ provided by the UNCITRAL Working Group include loss of a priceless or unique cultural artefact, corporate insolvency, essential evidence being destroyed, loss of an essential business opportunity, or damage to corporate goodwill or reputation.⁷¹

8.95  The ‘balance of harms’ test requires a tribunal to examine the relative hardship and risk of injustice to the claimant and respondent which is likely to arise if the interim order is refused.⁷² (p. 203) Where the hardship imposed on the respondent is slight if interim relief is granted, but the potential damage to the applicant is grave if interim relief is refused, this will weigh strongly in favour of granting interim relief.⁷³ This test involves a balancing exercise and it depends on the factual and legal circumstances of each case.⁷⁴

8.96  The ‘reasonable possibility of success’ test requires a prima facie assessment of the merits of the claim.⁷⁵ This prevents a tribunal from granting interim relief in a frivolous, vexatious, or manifestly unmeritorious claim.⁷⁶ However, the tribunal must not prejudge the merits of the case or engage in practices which would justify any challenge to its impartiality or independence. In this respect, Article 23.4(b) of the HKIAC Rules (2018) expressly prescribes that any preliminary assessment of the possibility of success must not affect the discretion of the tribunal in making any subsequent determination.

8.97  The factors enumerated in Article 23.4 of the HKIAC Rules (2018) are taken from Article 17A(1) of the UNCITRAL Model Law (2006), given effect to by section 36 of the Arbitration Ordinance. These are internationally recognized standards that are applied widely in Model Law jurisdictions. Although under Article 23.4 of the HKIAC Rules (2018) the three tests discussed above are non-exhaustive factors that a tribunal may consider, they are strict conditions for granting interim measures under Article 17A(1) of the UNCITRAL Model Law (2006). In this regard, the HKIAC Rules (2018) represent a more flexible approach and provide the tribunal with broader discretion to grant interim relief in comparison to the UNCITRAL Model Law (2006).

The arbitral tribunal may modify, suspend or terminate an interim measure it has granted, upon application of any party or, in exceptional circumstances and upon prior notice to the parties, on the arbitral tribunal’s own initiative.

8.98  The HKIAC Rules (2018) are one of the few institutional rules which expressly allow the arbitral tribunal to modify, suspend, or terminate an interim measure that has already been granted. The tribunal may do so either: (a) upon application by any party; or (b) in exceptional circumstances and upon prior notice to the parties, on the tribunal’s own initiative.

8.99  Article 23.5 provides a clear basis for the tribunal to remedy any errors or omissions made in relation to a prior interim measure or to adjust a measure ordered in light of any change in the underlying circumstances. If a tribunal lacks express power to remedy any defects of an interim measure it has ordered, a party may face a wrongfully ordered interim measure that may have a devastating effect on that party’s business and commercial interests for a significant period of time.

The arbitral tribunal may require the party requesting an interim measure to provide appropriate security in connection with the measure.

8.100  The arbitral tribunal has discretion to direct the party requesting an interim measure to provide appropriate security as a condition for granting the requested measure. The security is intended to compensate any harm or loss suffered by the targeted party as a result of the interim measure. The tribunal may determine the form and amount of security, which can be the provision of a deposit, bank guarantee, bond, or letter of credit.

8.101  This provision adopts Article 17E of the UNCITRAL Model Law (2006), given effect to by section 40 of the Arbitration Ordinance, which is expressed in identical terms. This provision remains unchanged from the HKIAC Rules (2013) and (2008).

The arbitral tribunal may require any party promptly to disclose any material change in the circumstances on the basis of which an interim measure was requested or granted.

8.102  It is important that the arbitral tribunal is promptly and effectively informed of any change in the circumstances that may affect the basis of a request for, or a decision on, interim relief. For this reason, Article 23.7 expressly allows the arbitral tribunal to require any party promptly to disclose such information. This provision is based on the identical provision of Article 17F(1) of the UNCITRAL Model Law (2006).

The party requesting an interim measure may be liable for any costs and damages caused by the measure to any party if the arbitral tribunal later determines that, in the circumstances then prevailing, the measure should not have been granted. The arbitral tribunal may award such costs and damages at any point during the arbitration.

8.103  If an interim measure is subsequently determined to be unjustified, the party requesting the measure may be held liable for any costs and damages caused by the measure. The arbitral tribunal may award such costs and damages at any point during the arbitration. Article 23.8, a provision first introduced in the HKIAC Rules (2013), is based substantially on Article 17G of the UNCITRAL Model Law (2006), given effect to by section 42 of the Arbitration Ordinance.

8.104  Notably, the HKIAC Rules (2018) do not only allow the tribunal to order security for costs in relation to an interim measure, but also permit the tribunal to determine the liability for costs and damages as a result of a wrongfully ordered interim measure.

A request for interim measures addressed by any party to a competent authority shall not be deemed incompatible with the arbitration agreement, or as a waiver thereof.

8.105  Article 23.9 expressly preserves the right of any party to seek interim relief from a competent authority and it provides that such a request is not incompatible with, nor does it constitute a waiver of, the arbitration agreement. This provision (amended to recognize the possibility of seeking interim measures from non-judicial authority in the event this is permitted in certain jurisdictions) is consistent with Article 9 of the UNCITRAL Model Law (2006), given effect to by section 21 of the Arbitration Ordinance, which provides that:

It is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection and for a court to grant such measure.

8.106  Seeking interim relief from a court has its advantages and disadvantages. The key advantages of a court-ordered interim measure are that the measure can be granted on an ex parte basis, bind third parties, and can be directly enforced in the jurisdiction of the court. On the other hand, certain courts, especially those in emerging jurisdictions, may prove to be a cumbersome, inefficient, and slow forum for interim relief. Parties who seek relief from a court will also have to translate the application and relevant documents into the local language. As court proceedings are generally public, seeking an interim measure from a court may lead to disclosure of confidential information used in the arbitral proceedings. In some jurisdictions, the type of interim relief that can be ordered by a court is significantly limited by national law and a court may also be reluctant to issue an interim order in certain cases against a sovereign or state-owned enterprise that claims sovereign immunity. Furthermore, perceptions of bias and local protectionism remain an issue in some local courts.

8.107  By contrast, arbitral tribunals are generally perceived to be a more neutral authority and are less likely to be affected by local bureaucracy and sovereign immunity. Parties can appoint an arbitral tribunal with the relevant expertise and experience to determine the disputes, including a request for interim relief that involves complex and technical issues. A tribunal can decide the application swiftly in a language chosen by the parties and the process is generally confidential. Although there exists a potential risk of non-enforcement in some jurisdictions of interim measures issued by arbitral tribunals, parties tend to comply with the tribunal’s interim decisions to avoid any negative inference or cost order which may be made by the tribunal from non-compliance.

8.108  By virtue of section 45 of the Arbitration Ordinance, upon the application of a party, the CFI has the power to issue interim relief in relation to any arbitral proceedings which have been, (p. 206) or are to be, commenced in or outside Hong Kong.⁷⁷ Hong Kong is one of the few jurisdictions which empower its courts with a very wide mandate to issue interim relief in support of arbitration, regardless of the seat of the arbitration, whether the arbitration has commenced, and even whether the person or entity is a party to the arbitration.⁷⁸

8.109  The CFI can issue the same interim measures as those available from an arbitral tribunal under Article 17(2) of the UNCITRAL Model Law (2006), given effect to by section 35(1) of the Arbitration Ordinance.⁷⁹ Such measures also include injunctive relief.⁸⁰

8.110  Similar to arbitral tribunals, the CFI has the power to order a wide range of interim relief in support of arbitration. It may exercise these powers irrespective of whether or not similar powers may be exercised by the arbitral tribunal.⁸¹ However, the CFI may decline to grant an interim measure on the grounds that:⁸²

1. (1)  the interim measure sought is currently the subject of arbitral proceedings; or

2. (2)  it is more appropriate for the interim measure sought to be dealt with by the tribunal.

8.111  Unlike in some jurisdictions,⁸³ the Arbitration Ordinance does not expressly specify whether a party should first approach an arbitral tribunal to request interim measures before approaching the CFI. However, as noted, the CFI may decline to grant interim measures under section 45(4) of the Arbitration Ordinance if it is ‘more appropriate for the interim measure sought to be dealt with by the tribunal’.

8.112  In relation to arbitral proceedings seated outside Hong Kong, the CFI may grant an interim measure only if:⁸⁴

1. (1)  the arbitral proceedings are capable of giving rise to an arbitral award (whether interim or final) that may be enforced in Hong Kong; and

2. (2)  the interim measure belongs to a type or description of interim measure that may be granted in Hong Kong in relation to arbitral proceedings by the CFI.

8.113  The Arbitration Ordinance expressly recognizes that the purpose of the CFI’s power to grant interim measures in support of foreign arbitral proceedings is to facilitate the process of a court or arbitral tribunal outside Hong Kong that has primary jurisdiction over the arbitral proceedings.⁸⁵ For example, in Top Gains Minerals Macao Commercial Offshore Ltd v TL (p. 207) Resources Ptd Ltd,⁸⁶ the CFI granted an asset freezing order in support of a pending ICC arbitration seated in Singapore.

8.114  The CFI may also issue a variety of incidental orders in support of arbitration within or outside Hong Kong. These orders include the following:⁸⁷

1. (1)  An order directing the inspection, photographing, preservation, custody, detention, or sale of any relevant property; and

2. (2)  An order directing samples to be taken from, observations to be made of, or experiments to be conducted on, any relevant property.

8.115  The Arbitration Ordinance expressly recognizes the enforceability of interim relief issued by an arbitral tribunal in or outside Hong Kong. Such relief is enforceable in the same manner as an order or direction of the CFI, and the Court may enter judgment in terms of the order or direction.⁸⁸ This helps facilitate effective arbitration processes in or outside Hong Kong.

8.116  On 1 October 2019, the Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Court of the Mainland and the Hong Kong Special Administrative Region (the Arrangement) came into force.⁸⁹

8.117  Under the Arrangement, any party to arbitral proceedings seated in Hong Kong and administered by a qualified arbitral institution may apply to the Intermediate People’s Court of the place of residence of the party against whom the application is made, or the place where the property or the place of residence of the party against whom the application is made, or the place where the property or evidence is situated, for interim measures in accordance with the Civil Procedure Law of the PRC, Arbitration Law of the PRC, and relevant judicial interpretations. HKIAC has been designed as a qualified arbitral institution under Article 2 of the Arrangement.⁹⁰

8.118  To date, HKIAC has processed thirty-seven applications made to the mainland Chinese courts for interim measures. Of these thirty-seven applications, thirty-four have been made for preservation of assets, two have been made for the preservation of evidence, and one for the preservation of conduct. Of the decisions issued by the Intermediate People’s Courts in the PRC, HKIAC is aware of twenty-four of them, twenty-two of which granted the applications for preservation of assets upon the applicant provision of security and two of which rejected such applications. The total value of assets preserved totals approximately US$1.6 billion.⁹¹

The arbitral tribunal may make an order requiring a party to provide security for the costs of the arbitration.

8.119  As noted at paragraph 8.86, HKIAC Rules (2018) contain a separate provision dealing with security for costs in Article 24, because an order requiring security for costs is not treated as an interim measure under Hong Kong law.⁹² An order requiring a party to provide security for costs is intended to provide some form of assurance that the claimant will be able to pay the respondent’s costs in the event that the respondent prevails in the arbitration and costs are awarded in favour of the respondent. An order for security is generally issued against a claimant or, in the case of a counterclaim or cross-claim, against a respondent.