9.01  This chapter addresses a number of key procedural steps and principles in an HKIAC arbitration. It begins with a discussion of the general principles governing the conduct of proceedings (Section A), followed by rules concerning the seat and venue of the arbitration (Section B) and the language of the arbitration (Section C). The next two sections analyse the filing of and amendment to the parties’ written submissions (Section D), and explain the arbitral tribunal’s authority to rule on its own jurisdiction as well as HKIAC’s prima facie power to proceed with an arbitration (Section E). The remaining sections cover evidentiary matters and hearings (Section F); experts appointed by the arbitral tribunal (Section G); non-participation of a party in the arbitral proceedings (Section H); closure of the proceedings (Section I); and the waiver of a party’s right to object (Section J).

9.02  Article 13 outlines the general provisions to govern the conduct of an HKIAC arbitration. The key features of these provisions are summarized as follows:

1. (1)  The arbitral tribunal enjoys broad discretion to manage the proceedings in a manner that avoids unnecessary delay or expense, provided that the procedures adopted ensure equal treatment of the parties and afford the parties a reasonable opportunity to be heard (Article 13.1);

2. (2)  The arbitral tribunal shall consult with the parties and prepare a procedural timetable at the earliest opportunity (Article 13.2);

3. (3)  Any documents provided to the arbitral tribunal must be provided to each other party and to HKIAC (Article 13.3);

4. (p. 212) (4)  The arbitral tribunal may appoint a secretary after consulting with the parties (Article 13.4). HKIAC has developed separate guidelines on the use of tribunal secretaries;¹

5. (5)  The arbitral tribunal and the parties are required to do everything necessary to ensure the fair and efficient conduct of the arbitration (Article 13.5);

6. (6)  The parties are free to choose their legal representatives (Article 13.6);

7. (7)  A party is required to promptly communicate changes and/or additions to its legal representatives to all other parties, the arbitral tribunal, and HKIAC (Article 13.7);

8. (8)  If the parties agree, after the arbitration commences, to resolve their dispute by other means, HKIAC, the arbitral tribunal, or emergency arbitrator may suspend the arbitration or emergency arbitration proceedings until a party requests that they be resumed (Article 13.8);

9. (9)  Where the HKIAC Rules are silent on any issue, the arbitral tribunal and the parties must act in the spirit of the Rules (Article 13.9); and

10. (10)  The arbitral tribunal is required to make every reasonable effort to ensure that an award is valid (Article 13.10).

9.03  The HKIAC Rules give parties considerable scope to agree on how the arbitration is to be conducted. This approach is consistent with the central importance of party autonomy in international arbitration.² Article 13.1 makes clear, however, that the arbitral tribunal is ultimately responsible for determining the procedures for the conduct of the arbitration, subject to the requirement of due process.

9.04  An arbitral tribunal’s power to manage the arbitral procedure was upheld by the CA in Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in liq) (No 1).³ In that case, Hon Tang VP confirmed that the Hong Kong courts are not ‘entitled to interfere with a case management decision, which was fully within the discretion of the Tribunal to make’.⁴

9.05  In practice, arbitral tribunals will invariably seek the parties’ views on the procedures and will generally adopt the procedures agreed between the parties. Indeed, Article 13.2 (discussed in paragraphs 9.23–9.25 below) expressly contemplates that the arbitral tribunal will (p. 213) consult with the parties when preparing the procedural timetable for the arbitration. Where the parties have proposed a procedure that is unworkable or inconsistent with the terms of Article 13⁵ or any mandatory requirements of the applicable law,⁶ the arbitral tribunal may vary the parties’ proposed procedure or substitute its own. In Brunswick Bowling Billiards Corp v Shanghai Zhonglu Industrial Co Ltd,⁷ Lam J said that:

After hearing submissions from the parties, if the arbitrators were of the view that the procedure agreed by the parties would result in a breach of Article 18 [equal treatment of the parties and a party’s full opportunity to present its case], they should take steps to conduct the arbitration in such a manner that could redress the problem instead of being constrained by an unworkable agreement of the parties.⁸

9.06  Article 13.1 enumerates factors for the arbitral tribunal to take into account when fixing the procedures, namely: (a) the relevant provisions of the HKIAC Rules; (b) the need to avoid unnecessary delay or expense, having regard to the complexity of the issues and the amount in dispute; and (c) the need to treat the parties equally and afford the parties a reasonable opportunity to present their case. These factors are considered below.

9.07  The opening words of Article 13.1—‘[s]ubject to these Rules’—require the arbitral tribunal to have regard to other provisions of the Rules before adopting a procedure for the conduct of the arbitration. These provisions include but are not limited to: Article 13.2 (provisional timetable), Article 16 (Statement of Claim), Article 17 (Statement of Defence), Article 18 (amendments to the claim or defence), Article 20 (further written statements), Article 21 (time limits), Article 22 (evidence and hearings), and, where applicable, Article 42 (expedited procedure).

9.08  The arbitral tribunal must adopt procedures to avoid unnecessary delay or expense. Section 46(3)(c) of the Arbitration Ordinance specifically requires the arbitral tribunal to ‘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 to which the arbitral proceedings relate’.

9.09  The requirement for the arbitral tribunal to adopt efficient and cost-effective procedures is a response to the growing concern about the speed and cost of international arbitration.⁹ While the onus is on both the arbitral tribunal and the parties to ‘do everything to ensure the fair and efficient conduct of the arbitration’ as stipulated in Article 13.5, Article 13.1 emphasizes the arbitral tribunal’s role in managing the process. The HKIAC Rules (2018) provide (p. 214) several mechanisms to assist arbitral tribunals in enhancing efficiency and reducing costs, for example, the expedited procedure,¹⁰ joinder of additional parties,¹¹ consolidation of arbitrations,¹² the appointment of tribunal secretaries,¹³ and the early determination procedure.¹⁴ In choosing which procedures or mechanisms to adopt, the arbitral tribunal must carefully consider the circumstances of the case, including the complexity of the dispute and the disputed amount.

9.10  When determining suitable procedures for the conduct of an arbitration, the arbitral tribunal shall factor in the complexity of the issues and the amount in dispute. The complexity of the dispute is perhaps the most appropriate indicator as to the kind of process required to effectively resolve the dispute. Certain factors such as number of parties involved, the issues in dispute, the factual matrix of the dispute, provide a helpful metric for the arbitrator to establish a suitable procedure. The arbitral tribunal should also factor in the amount in dispute, which establishes a gauge for a process that is proportionate in cost.

9.11  The HKIAC Rules (2018) now also expressly require the arbitral tribunal to have regard to effective use of technology. This additional provision is intended to encourage the arbitral tribunal to consider available technology including, but not limited to, the HKIAC’s secured online document repository. Other technologies include use of audio and videoconferencing facilities, and translation and interpretation services.

Increasingly, technology provides tools for arbitrators and parties to maximize the efficiency of the proceedings, which in turn reduces cost and delay.

9.12  For example, use of electronic document bundles can significantly improve the document production exercise and, in certain circumstances, reduce cost. Likewise, case management conferences give the tribunal an opportunity to discuss with the parties and their representatives the size and nature of the case, including issues on which the parties cannot agree, and to establish a procedure that will be most appropriate to the circumstances of that case.

9.13  Moreover, increased use of virtual platforms means that tribunals can hold case management conferences (or indeed full hearings) remotely, saving the significant costs involved in travelling to an in-person hearing, and making the hearing considerably easier to schedule.

9.14  ‘Equal treatment of parties’ and ‘reasonable opportunity to present a case’ are two bedrock principles of arbitration.¹⁵ The arbitral tribunal cannot derogate from these principles when fixing the procedures for the arbitration.

(p. 215) 9.15  The same principles are reflected in section 46 of the Arbitration Ordinance, which provides in relevant part:

1. (2)  The parties must be treated with equality.

2. (3)  When conducting arbitral proceedings or exercising any of the powers conferred on an arbitral tribunal by this Ordinance or by the parties to any of those arbitral proceedings, the arbitral tribunal is required— …

   1. (b)  to 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.

9.16  Both Article 13.1 of the HKIAC Rules (2018) and section 46 of the Arbitration Ordinance are extensions of the principles in Article 18 of the UNCITRAL Model Law (2006),¹⁶ which has been described as a key element of the ‘Magna Carta of Arbitral Procedure’.¹⁷

9.17  The arbitral tribunal has discretion to determine what ‘equal treatment’ or ‘reasonable opportunity’ to present one’s case means in a particular case.

9.18  The meaning of ‘equal treatment’ must be assessed having regard to the circumstances of the case and does not necessarily equate, literally, to ‘the same treatment’ in relation to every aspect of the arbitration.¹⁸ For example, it may be appropriate to order one party to produce certain documents but not require any document production from the other party. Likewise, in scheduling a hearing, the arbitral tribunal may allot more time to one party on the basis that it is required to cross-examine more witnesses than the other party. On the other hand, it would be wrong to permit one party to present witnesses or address the arbitral tribunal orally but deny the other party an equivalent right.¹⁹

9.19  As to a party’s opportunity to present its case, there is a distinction between ‘full’ and ‘reasonable’ opportunity in this context.²⁰ As pointed out by a leading treaties on international arbitration, the word ‘full’ conjures up ‘visions of a party demanding the opportunity to present duplicative testimony for days or even weeks’.²¹ The word ‘reasonable’ allows the arbitral tribunal to take a proportionate and pragmatic approach to limiting the scope of the evidence which a party wishes to present.

9.20  The Arbitration Ordinance deviates from the use of ‘full’ opportunity as provided under Article 18 of the UNCITRAL Model Law (2006), instead requiring that parties be given a ‘reasonable’ opportunity to be heard. The drafting history of the Arbitration Ordinance records a concern that the ‘full’ opportunity might make it difficult for an arbitrator to prevent (p. 216) a party from calling unnecessary factual witnesses or an excessive number of expert witnesses, or from making repetitive submissions, without risking challenge to the award.²²

9.21  Similarly, the HKIAC Rules (2018) adopt the ‘reasonable’ test as regards a party’s right to be heard. Such a right is not without limits—it must be balanced with the need for procedural efficiency and fairness, as required under Article 13. Accordingly, the arbitral tribunal can (and should) actively manage the extent of the parties’ pleadings and evidence with a properly defined scope and appropriate time limits.

9.22  Where an arbitral tribunal fails to ensure the equal treatment of the parties or a reasonable opportunity for a party to present its case, the tribunal’s award may be vulnerable to challenge under the law of the seat, or to non-enforcement under Article V(1)(b) of the New York Convention. Nonetheless, in most jurisdictions, the threshold for challenging an award on procedural violation grounds is set appropriately high.²³ Arbitral tribunals generally have broad case management powers and considerable discretion to determine the arbitral procedures and national courts tend to defer to the procedural decisions made by arbitral tribunals, unless there has been a ‘serious or egregious’ breach of natural justice.²⁴

At an early stage of the arbitration and in consultation with the parties, the arbitral tribunal shall prepare a provisional timetable for the arbitration, which shall be provided to the parties and HKIAC.

9.23  Shortly after it is constituted, the arbitral tribunal must prepare a provisional timetable setting out the key procedural steps in the arbitral process. The timetable normally covers the timing of filing pleadings, witness statements, expert reports, document production requests, as well as the dates of the case management conference and the substantive hearing. In practice, the procedural timetable is commonly included in a ‘Procedural Order No 1’.²⁵

9.24  The arbitral tribunal is required to consult with the parties when preparing the provisional timetable. Often, this is done by way of a preliminary procedural conference, which can be convened in person, by telephone, or by videoconference. Alternatively, the arbitral tribunal may consult with the parties in writing by way of an exchange of proposed timetables.

9.25  The timetable is provisional, so the arbitral tribunal may vary timelines upon a party’s request (and comments from all other parties). After preparing this timetable, the arbitral tribunal shall provide it to the parties and to HKIAC. HKIAC will use this timetable as a reference to monitor the pace of the arbitral process. To the extent significant delays are caused by the arbitral tribunal, and particularly when prompted by the parties, HKIAC will consult (p. 217) the arbitral tribunal as to reasoning for the delay and work with the arbitral tribunal to keep delays it has caused to a minimum.

Subject to Article 11.5, all written communications between any party and the arbitral tribunal shall be communicated to all other parties and HKIAC.

9.26  Article 13.3 is intended to prevent parties from passing any written communications to the arbitral tribunal without providing the same to the other party or parties and HKIAC.²⁶ If the parties and tribunal agree to communicate by email, all parties and HKIAC must be copied on its emails to the arbitral tribunal. The requirement to supply communication to all parties is consistent with the arbitral tribunal’s duty to act independently and to ensure equal treatment of the parties,²⁷ as well as the parties’ duty not to engage in ex parte communications with the arbitral tribunal.²⁸

9.27  In limited circumstances, however, ex parte communications from the parties to an arbitrator may be permitted. As stipulated under Article 11.5, these circumstances include where a party advises an arbitrator candidate on the general nature of the dispute, discusses the candidate’s qualifications, availability, impartiality, or independence, or the suitability of candidates to act as the presiding arbitrator (where the parties or their designated arbitrators are to designate that arbitrator).²⁹ In any event, no parties shall have any ex parte communications relating to the arbitration with any candidate for the presiding arbitrator.³⁰

9.28  Article 13.3 seeks to meet the standard of due process under Hong Kong law. As a matter of Hong Kong’s public policy, an arbitrator must ensure that he or she is ‘not influenced, or seen to be influenced, by private communications’.³¹ This was confirmed in Gao Haiyan v Keeneye Holdings Ltd, in which the Court of First Instance (CFI) held that ‘basic notions of morality and justice in Hong Kong would not permit ex parte communication between a member of a tribunal and a party once an arbitration process has commenced’.³² However, this principle does not prevent unilateral contact between a party and an arbitrator candidate concerning the selection of arbitrators.³³

9.29  Article 13.3 also requires the parties to keep HKIAC informed of communications between them and the arbitral tribunal in order to enable HKIAC to monitor the arbitration process. Accordingly, HKIAC should receive copies of all written communications exchanged during the arbitration. Unilateral communications with HKIAC will generally be responded to with (p. 218) HKIAC supplying its response and the original correspondence to all parties and the arbitral tribunal. In circumstances whereby a party may be seeking information not specific to the arbitration at hand, HKIAC may respond to the requesting party only.

9.30  The use of tribunal secretaries in international arbitration is widely accepted and has become commonplace in the market. A survey conducted as part of the 2012 International Council for Commercial Arbitration (ICCA) Congress in Singapore reports that 95 per cent of respondents approve of the use of tribunal secretaries.³⁴ The 2015 International Arbitration Survey by Queen Mary University of London and White & Case reports that 82 per cent of respondents have directly been involved in cases involving a tribunal secretary and 71 per cent of them consider tribunal secretaries to be useful in arbitration.³⁵ The 2018 International Arbitration Survey by Queen Mary University of London and White & Case reveals that 70 per cent of respondents believe that arbitration rules (whether institutional or ad hoc) should include provisions dealing with the use of arbitral secretaries.³⁶

9.31  The prevalence of tribunal secretaries is largely due to the recognition of the value which secretaries can bring to arbitration. For example, tribunal secretaries can increase the efficiency of arbitral proceedings and allow the tribunal to focus on deciding the merits and to render awards faster.³⁷ Using a tribunal secretary for administrative and organizational tasks can also be more cost-effective, as the hourly rate of the secretary is generally much lower than that of the arbitral tribunal.³⁸

9.32  There are, however, concerns about the use of tribunal secretaries in arbitration. Some argue that the appointment of arbitrators is intuiti personae and therefore no work should be delegated.³⁹ Some take the view that the tribunal secretary’s work will necessarily bear his or her perspective and therefore might improperly influence the tribunal’s own decision-making.⁴⁰ (p. 219) It has also been argued that the use of tribunal secretaries allows eminent and busy arbitrators to take even more cases which will result in fewer appointments for the next generation of arbitrators.

9.33  In view of market demand and concerns, HKIAC has taken systematic and innovative measures to regulate and increase transparency to the practice of tribunal secretaries. These measures include the introduction of the tribunal secretary service,⁴¹ the issuance of the Guidelines on the Use of a Secretary to the Arbitral Tribunal (the Tribunal Secretary Guidelines),⁴² and the launch of the Tribunal Secretary Accreditation Programme.⁴³

9.34  HKIAC was the first major commercial arbitral institution to provide in its rules that an arbitral tribunal may appoint a tribunal secretary.⁴⁴ The power to appoint a tribunal secretary rests with the arbitral tribunal and is subject to consultation with the parties.

9.35  Article 13.4 does not expressly require the parties’ consent to the appointment of a tribunal secretary. It only requires the arbitral tribunal to seek the parties’ comments before making the appointment. This provision is not intended to encourage the arbitral tribunal to unilaterally introduce a tribunal secretary against the clear and reasonable wishes of the parties. Rather, Article 13.4 deals with the situation where a party unreasonably objects to the proposal of a tribunal secretary or does not participate in the arbitration. In these situations, the tribunal shall have discretion and flexibility, after having given due regard to the parties’ comments, to decide whether to appoint a tribunal secretary to increase the efficiency and save costs of the arbitral proceedings.⁴⁵

9.36  HKIAC has issued the Tribunal Secretary Guidelines to further standardize the appointment, removal, remuneration, and duties of tribunal secretaries.⁴⁶ The Tribunal Secretary Guidelines, which came into force on 1 June 2014, can be adopted by parties for cases administered by HKIAC or otherwise.

9.37  The appointment process in the Tribunal Secretary Guidelines comprises the following steps:

1. (1)  The arbitral tribunal selects an appropriate candidate to act as its secretary;

2. (2)  The candidate signs a declaration form confirming his or her availability, impartiality, and independence, and makes any appropriate disclosures;

3. (3)  The arbitral tribunal informs the parties of its proposal to appoint the candidate as tribunal secretary and circulates the candidate’s CV, declaration, and the Tribunal Secretary Guidelines to the parties for their comments;

4. (p. 220) (4)  After receiving and considering the parties’ comments, the arbitral tribunal decides whether to appoint the candidate; and

5. (5)  If the tribunal decides to appoint the candidate, the appointment becomes effective at the time the notice of the appointment is received by the parties.

9.38  HKIAC provides a tribunal secretary service, which allows the arbitral tribunal to appoint a member of the HKIAC Secretariat as its secretary in arbitrations involving the HKIAC or ad hoc arbitrations. The Secretariat member, once appointed, can assist the tribunal to run the proceedings efficiently, save time and costs for the parties, and provide useful insights on HKIAC procedures at competitive rates.

9.39  An arbitral tribunal that intends to appoint an HKIAC Secretariat member as secretary should send a written request to HKIAC. The request should include, to the extent possible, the following information:

1. (1)  The identity and contact details of all parties and the arbitral tribunal;

2. (2)  A copy of the arbitration agreement(s);

3. (3)  A summary of the case (including the current stage of the arbitration) and an indication of the amount in dispute; and

4. (4)  The applicable method of determining the fees and expenses of the arbitral tribunal.

9.40  Upon receipt of the request, HKIAC will endeavour to designate a Secretariat member to assist the tribunal as soon as practicable.⁴⁷

9.41  The appointment of an HKIAC Secretariat member as tribunal secretary in an HKIAC administered arbitration will be governed by the Tribunal Secretary Guidelines, unless the parties agree otherwise. Accordingly, the appointment process discussed in Chapter 7 applies also to an HKIAC Secretariat member’s appointment. It should be noted that the appointment of a Secretariat member requires confirmation by HKIAC.⁴⁸ Such Secretariat member must not act as a tribunal secretary and case manager in the same case.⁴⁹

9.42  The appointment of a member of the HKIAC’s Secretariat has a number of benefits. Firstly, an HKIAC Secretariat member is usually conflict free and is unlikely to attract challenges. Second, the Secretariat member is familiar with the HKIAC Rules and can provide valuable insights into HKIAC’s procedures. Third, the Secretariat member is employed by HKIAC and will work independently of the arbitral tribunal, thereby maintaining an arm’s-length relationship with the tribunal.

9.43  A tribunal secretary must be, and at all times remain, impartial and independent of the parties. Any matters which may give rise to justifiable doubts as to the impartiality or independence of a proposed or serving tribunal secretary must be disclosed (1) prior to his or her appointment; or (2) without delay if those circumstances arise after his or her appointment.⁵⁰ (p. 221) In this regard, the obligations of impartiality and independence imposed on tribunal secretaries mirror those imposed on the arbitral tribunal under Article 11.⁵¹ Under the Tribunal Secretary Guidelines, prior to his or her appointment, the tribunal secretary should sign a declaration of independence and impartiality, and disclose any circumstances which may give rise to justifiable doubts as to his or her impartiality or independence.⁵²

9.44  The Tribunal Secretary Guidelines include a procedure for a party to object to a tribunal secretary’s impartiality or independence. The party must send a notice of objection within fifteen days after the appointment of the secretary has been notified to that party, or within fifteen days after that party becomes aware or ought reasonably to have become aware of the relevant circumstances.⁵³ Subsequently, the arbitral tribunal must, after consulting with all the parties, promptly rule on the objection.⁵⁴ If the objection is upheld, the tribunal secretary will be released from appointment. The arbitral tribunal may continue the arbitration pending the determination of the objection. The tribunal secretary must not undertake any work in relation to the determination of the objection.⁵⁵

9.45  The role of a tribunal secretary is an ‘enormously grey area’ that has been a regular topic of discussion within the international arbitration community.⁵⁶ As a result, there has been a call for greater transparency and regulation of the role and function of tribunal secretaries.⁵⁷ In response, the Tribunal Secretary Guidelines codify existing best practices to define the proper duties of tribunal secretaries.

9.46  The Tribunal Secretary Guidelines permit a tribunal secretary to perform two types of tasks and contain a non-exhaustive list of examples.

9.47  The first type is ‘organizational and administrative tasks’, which includes transmitting documents and communication on behalf of the arbitral tribunal, organizing and maintaining the tribunal’s files, coordinating logistics for hearings and meetings, proofreading the tribunal’s decisions, and preparing invoices.⁵⁸

9.48  The second type legitimately goes beyond purely administrative tasks. Unless the parties agree or the arbitral tribunal directs otherwise, it allows a tribunal secretary to, for example: (a) conduct legal research; (b) research discrete questions relating to factual evidence and witness testimony; (c) draft memoranda summarizing the parties’ submissions (p. 222) and evidence; (d) attend the tribunal deliberations; and (e) prepare drafts of non-substantive parts of the tribunal’s orders, decisions, and awards (such as procedural histories and chronologies of events).⁵⁹

9.49  It is important to note that under the Tribunal Secretary Guidelines the arbitral tribunal cannot delegate any decision-making functions to a tribunal secretary, or rely on a tribunal secretary to perform any essential duties of the arbitral tribunal.⁶⁰ A tribunal secretary shall act upon the arbitral tribunal’s instructions and under its strict supervision. The tribunal shall, at all times, be responsible for the secretary’s conduct in connection with the arbitration.⁶¹

9.50  A tribunal secretary’s fees and expenses will be determined by the arbitral tribunal after consulting with the parties.⁶² The method of paying a tribunal secretary depends on the method by which the arbitral tribunal is remunerated. Where the fees of the arbitral tribunal are determined on an hourly rate basis, a tribunal secretary should be remunerated by his or her hours spent, which are charged separately from the arbitral tribunal’s fees. Where the arbitral tribunal’s fees are determined based on the amount in dispute, fees of a tribunal secretary should form part of the arbitral tribunal’s fees. Where the arbitral tribunal is composed of three arbitrators, the fees of a tribunal secretary should in principle be shared equally among the members of the arbitral tribunal, unless the arbitral tribunal decides otherwise.⁶³

9.51  Where a tribunal secretary is paid an hourly rate, such rate must not exceed HK$2,500 per hour unless the parties agree otherwise.⁶⁴ HKIAC Secretariat members’ hourly rates for acting as tribunal secretary are published on HKIAC’s website.⁶⁵

9.52  Under the Tribunal Secretary Guidelines, a tribunal secretary’s reasonable expenses will be borne by the parties and reimbursed in accordance with paragraphs 4.6 to 4.9 of the Tribunal Secretary Guidelines.

The arbitral tribunal and the parties shall do everything necessary to ensure the fair and efficient conduct of the arbitration.

9.53  Article 13.5 of the HKIAC Rules imposes an overarching obligation on both the parties and the arbitral tribunal to ensure that the arbitral proceedings be conducted fairly and expeditiously.⁶⁶ The provision requires the parties and the arbitral tribunal to ‘do everything (p. 223) necessary’ to achieve these objectives. This reflects a key objective of the HKIAC Rules (2018) to require all participants of an arbitration (including the parties, the arbitral tribunal, and HKIAC) to safeguard and enhance procedural efficiency and fairness. Such a principle can also be found in the Arbitration Ordinance which requires the ‘fair and speedy resolution of disputes by arbitration without unnecessary expense’.⁶⁷

9.54  The obligation under Article 13.5 sets a high ethical standard on the conduct of the parties (and their counsel). This standard will not be met if a party (or its counsel) deliberately adopts any tactics to delay or obstruct the arbitral proceedings, for example repeated requests for an extension of time to file a document; the use of a ‘fishing expedition’ during the discovery process; the introduction of new evidence or authorities at a very late stage of the proceedings; unreasonable objections to every request by the other party; and the non-compliance with the tribunal’s procedural orders without legitimate reasons.⁶⁸

9.55  The tribunal may impose a range of sanctions against the party who adopts these tactics. The tribunal can impose cost sanctions on the party or draw negative interferences from the conduct. It may also make references in its award to this effect.⁶⁹ Furthermore, counsel who engages in these tactics might face the risk of disciplinary or criminal sanctions.⁷⁰

9.56  Similarly the arbitral tribunal must act fairly and efficiently and adopt procedures in compliance with the requirements under Article 13.1 of the HKIAC Rules (2018).⁷¹ The expectation set for the arbitral tribunal will not be met if, for example, the tribunal is excessively slow in responding to the parties’ requests; the tribunal takes a very long time to render an award without legitimate justification; or the tribunal adopts an unrealistic hearing schedule that provides the parties with insufficient time for oral submissions and cross-examination.

9.57  Under the HKIAC Rules (2018), parties are generally free to choose legal representatives from anywhere in the world. There are no restrictions as to when a party may engage legal representation and how many legal representatives it may have. The Rules also do not require (p. 224) a party to be legally represented at all. While there have been a handful of cases in which parties represent themselves, in most cases, parties are represented by counsel.

9.58  Similarly, the Arbitration Ordinance gives parties considerable flexibility to appoint their legal representatives.⁷² Parties to arbitrations in Hong Kong may instruct any lawyers to (a) represent them in the arbitral proceedings; (b) give advice and prepare documents for the purposes of the proceedings; and (c) undertake any other work in relation to the arbitration except court proceedings arising in relation to the arbitration agreement or proceedings.⁷³ There is no requirement to instruct a Hong Kong-qualified lawyer in a Hong Kong seated arbitration.

9.59  The only condition on a party’s choice of legal representation is that it must not appoint a counsel who may compromise the party’s obligation to facilitate the fair and efficient conduct of the arbitration. In this regard, a party’s right to legal representation does not necessarily equate to a right to switch legal representatives repeatedly, or at a late stage, in a manner as to unreasonably delay the proceedings or create a conflict of interest issue to disqualify an arbitrator.

9.60  The HKIAC Rules (2018) do not contain an express provision to regulate the conduct of parties’ legal representatives. The question of whether such a provision should be included in the Rules was raised and discussed within the HKIAC Rules Committee during the rule revision process. The HKIAC Rules Committee ultimately decided not to include the provision, given the concern that such a provision may undermine parties’ fundamental right to choose legal representatives and the controversial issue of who should have the authority to regulate and impose sanctions on counsel in international arbitration. In light of the ongoing debate on this subject and the diverse and potentially conflicting rules and norms issued by different institutions, the HKIAC Rules Committee felt that it was not an opportune time to introduce provisions to deal expressly with counsel conduct in HKIAC arbitration.⁷⁴

9.61  Where a party has appointed a representative, it must inform the other parties, HKIAC, any emergency arbitrator where applicable, and the arbitral tribunal once constituted, of the representative’s identity and contact details.⁷⁵ Where a party has appointed a counsel, the counsel’s name and contact details must be provided in the Notice⁷⁶ or Answer.⁷⁷

9.62  Under the HKIAC Rules (2018), a party representative is not required to furnish proof of his or her authority unless the arbitral tribunal, the emergency arbitrator, or HKIAC directs him or her to do so. In practice, an arbitral tribunal and HKIAC rarely ask a party’s counsel to provide proof of authority. However, such proof may be required if a party changes counsel or the authority of a party’s counsel is challenged by the other party. The HKIAC Rules do not prescribe any requirement on the form of proof of authority. The common form is a power of attorney.

9.63  Any issue in relation to the authority of a party’s representatives is a matter to be determined by the arbitral tribunal. If such an issue arises before the tribunal is constituted, HKIAC may require the representative to provide proof of authority. If any issue of authority remains, HKIAC will normally proceed to constitute the arbitral tribunal and leave the issue to be decided by the tribunal.

After the arbitral tribunal is constituted, any change or addition by a party to its legal representatives shall be communicated promptly to all other parties, the arbitral tribunal and HKIAC.

9.64  It is not uncommon for a party to add to its legal representatives or to change them during an arbitration. If this occurs, that party is now expressly required to communicate any such addition or change to all other parties, the arbitral tribunal, and HKIAC. This is important not only to guarantee the smooth progress of the arbitral proceedings but also to allow all the other parties to challenge any new legal representative on the basis of potential conflicts of interest and/or lack of independence and impartiality.

Where the parties agree to pursue other means of settling their dispute after the arbitration commences, HKIAC, the arbitral tribunal or emergency arbitrator may, at the request of any party, suspend the arbitration or Emergency Arbitrator Procedure, as applicable, on such terms as it considers appropriate. The arbitration or Emergency Arbitrator Procedure shall resume at the request of any party to HKIAC, the arbitral tribunal or emergency arbitrator.

9.65  This new article acknowledges the growing trend in arbitration for parties to consider alternative dispute resolution mechanisms to settle their dispute during the course of an arbitration. Parties seek the most efficient mechanism for resolving their dispute and may in fact pursue different mechanisms in tandem. When appropriate, parties may wish to suspend their arbitration to pursue another means of resolving their dispute. In such instances, at the request of any party, the arbitral tribunal may suspend the arbitration or Emergency Arbitration Procedure, as applicable, and decide the terms of such suspension. However, the article is drafted to prevent a party from relying on this article to frustrate the arbitral (p. 226) proceedings. The arbitration or Emergency Arbitration Procedure, as applicable, will thus resume when any party makes a request to HKIAC, the arbitral tribunal, or emergency arbitrator.

In all matters not expressly provided for in these Rules, HKIAC, the arbitral tribunal, emergency arbitrator and the parties shall act in the spirit of these Rules.

9.66  The HKIAC Rules (2018) do not (and cannot possibly) cover all procedural matters of an arbitration. As a result, where there is a matter that is not expressly covered by the Rules, Article 13.9 requires HKIAC, the arbitral tribunal, emergency arbitrator, and the parties to act in line with the ‘spirit’ of the Rules.

9.67  The ‘spirit’ of the HKIAC Rules can be identified from the general objectives and principles set out in the Rules, in particular Article 13. These objectives and principles include the arbitral tribunal’s power to manage the arbitral procedure,⁷⁸ the need to avoid unnecessary delay or expense,⁷⁹ the requirement to ensure equal treatment of the parties and the parties’ reasonable opportunity to present their case,⁸⁰ the parties’ and tribunal’s duty to ensure the fair and efficient conduct of the arbitration,⁸¹ and the objective of the tribunal to make a valid award.⁸²

The arbitral tribunal or emergency arbitrator shall make every reasonable effort to ensure that an award is valid.

9.68  An arbitral tribunal or emergency arbitrator must make every reasonable effort to make sure that its award is valid. This provision was first introduced in the 2013 Rules⁸³ to ensure the validity and quality of HKIAC awards. This is critical because HKIAC does not scrutinize arbitral awards and it is the tribunal’s sole responsibility to make sure that its award complies with the applicable requirements and will be recognized by the applicable law.

9.69  Article 13.10 represents a different approach to the equivalent provision in many other major arbitration rules. For example, the ICC Rules and the SIAC Rules require the arbitral tribunal to endeavour to make an enforceable award.⁸⁴ The 2013 HKIAC Rules Committee made a conscious decision to change the word ‘enforceable’ to ‘valid’ to require the tribunal to consider only the law applicable to the validity of the arbitral award. In this regard, an award is generally accepted to be valid if it conforms to the requirements of the law of the seat.⁸⁵ The (p. 227) HKIAC Rules Committee recognized that it would be difficult for the tribunal to identify all places of enforcement and it would be onerous to ensure the enforceability of the award in all these places.⁸⁶ This article has not changed in the HKIAC Rules (2018).

9.70  Article 14 provides default rules for determining the seat and venue of the arbitration, which can be summarized as follows:

1. (1)  The default seat of the arbitration is Hong Kong, unless the arbitral tribunal determines that another seat is more appropriate;⁸⁷ and

2. (2)  Meetings and hearings may occur at any location in or outside of the seat.⁸⁸

9.71  Article 14.1 allows the parties to agree on the seat of an HKIAC arbitration, which can be Hong Kong or any other place in the world.⁸⁹ The HKIAC Rules are modelled on the UNCITRAL Rules and broadly compatible with arbitration laws of most Model Law jurisdictions. As the case with many institutions with a natural seat, Hong Kong is the natural and most commonly selected seat for HKIAC arbitrations. However, in some cases, other seats have been selected such as Singapore, Macau, Russia, the USA, and England.

9.72  The choice of seat is a critical decision to be made by parties for both legal and practical reasons. From a legal perspective, the seat of the arbitration determines the nationality of an arbitral award, the procedural law applicable to the arbitration, and the supervisory jurisdiction of a court to support the arbitral proceedings (eg issuing interim measures or assisting in taking evidence) and determine any challenge to an award.⁹⁰

9.73  There are also practical reasons why the seat of arbitration is important. The seat is the legal place where the parties’ dispute will be resolved. Therefore, the parties often prefer a place in a neutral jurisdiction (ie one in which none of the parties is resident or domiciled). The convenience of the seat is also important because, although hearings can take place anywhere in the world, the parties and tribunal often have hearings at the seat by default. As a result, ease (p. 228) and cost of travel, as well as the availability of adequate hearing facilities and support services, are also relevant factors when choosing a seat.

9.74  As a result of the Covid pandemic that began in 2020, many arbitral hearings are now conducted via online platforms. This is known as a ‘remote’ or ‘virtual’ hearing. It is now widely accepted that it is possible to hold full hearings without any requirement to travel to the physical location of the seat. HKIAC was an early adopter of virtual hearing technology and offers sophisticated facilities and support at its Hong Kong premises. It remains to be seen whether this practice will continue once the pandemic has abated, but it is the authors’ expectation that technology will play a greater and greater role in arbitration hearings, including by enabling hearings to go ahead more cheaply and without the need for international travel. HKIAC will continue to offer sophisticated virtual hearing services and support.

9.75  Holding a hearing remotely does not affect the legal seat of the arbitration. The legal seat is the jurisdiction selected by the parties in their arbitration agreement, or ordered by the tribunal in the absence of express choice.

9.76  Therefore, regardless of how and where hearings might be held, in order to avoid disputes regarding the validity or effectiveness of the arbitration agreement, parties should always strive to designate a clear and certain seat.⁹¹ If the arbitration agreement does not specify the seat, the parties should endeavour to reach an agreement on this issue at the outset of the arbitration, unless the applicable rules provide for a mechanism to determine the seat.⁹² In the absence of a clear indication of the seat or means for selecting the seat, it may be necessary to ask the arbitral tribunal to determine the seat. Where the clause does not include a method of constituting a tribunal, a national court with jurisdiction over the parties can make the determination.⁹³

9.77  With respect to the choice of seat, the Chartered Institute of Arbitrators has published a set of benchmarks for assessing an effective, efficient, and ‘safe’ seat of arbitration (the London Centenary Principles):⁹⁴

1. (1)  A clear, effective, and modern international arbitration law;

2. (2)  An independent, competent, and efficient judiciary;

3. (3)  An independent and competent legal profession with expertise in international arbitration;

4. (4)  An implemented commitment to the education of international arbitration;

5. (5)  A clear right for parties to be represented in arbitration by representatives of their choice;

6. (6)  Easy accessibility and safety;

7. (7)  Functional facilities for the provision of services to arbitral proceedings;

8. (8)  Professional and other norms which embrace a diversity of legal and cultural traditions;

9. (p. 229) (9)  Adherence to international treaties on the recognition and enforcement of foreign arbitration agreements, orders, and awards; and

10. (10)  A clear right to arbitrator immunity from civil liability.

9.78  Parties should seek to choose a seat that satisfies all the criteria listed above.

9.79  The HKIAC Rules designate Hong Kong as the seat of arbitration absent the parties’ agreement, which is consistent with other rules that also provide for a default seat of arbitration.⁹⁵ However, the arbitral tribunal may change the seat to another place if it considers that that place is more appropriate than Hong Kong, having regard to the circumstances of the case.

9.80  Fixing a default seat avoids a potential procedural skirmish at the outset of the arbitration to determine the seat and consequently the law of the arbitral procedure. In the absence of a default seat, parties who have not previously agreed on the seat will need to seek a decision from the arbitral tribunal, institution, or competent court (depending on the applicable rules), which will result in additional time and costs in the proceedings.⁹⁶ While the HKIAC Rules have designated a default seat, the Rules allow the arbitral tribunal to ultimately determine the appropriate seat of the arbitration, thereby striking a balance between certainty and flexibility.

9.81  Hong Kong is the natural choice for the default seat of arbitration under the HKIAC Rules. The territory enjoys a strong reputation as one of the world’s leading seats of arbitration. In the 2018 International Arbitration Survey by Queen Mary University of London and White & Case, Hong Kong was ranked among the world’s top four seats, alongside London, Paris, and Singapore.⁹⁷ Furthermore, Hong Kong appears to best reflect parties’ expectations on the seat when they agree to adopt the HKIAC Rules to resolve their disputes, but fail to specify the seat of the arbitration.

9.82  The key advantages and benefits of choosing Hong Kong as the seat of arbitration are discussed in Chapters 1 and 2.

9.83  Unless the parties have agreed on the seat, the arbitral tribunal has discretion to choose a seat other than Hong Kong if it considers that another seat is more appropriate, having regard to the circumstances of the case.⁹⁸ In practice, the tribunal will hear the views of the parties before choosing another seat.

9.84  In determining whether another seat is more appropriate than Hong Kong, the arbitral tribunal will typically take into account the legal and practical factors as well as the London Centenary Principles as discussed in paragraph 9.77 above. Regard may also be had to paragraph 29 of the UNCITRAL Notes on Organizing Arbitral Proceedings (2016), which set out factors that may influence a tribunal’s choice of a seat:⁹⁹

(p. 230)

1. (1)  Suitability of the law on arbitral procedure of the seat of arbitration;

2. (2)  Whether there is a multilateral or bilateral treaty on enforcement of arbitral awards between the state where the arbitration takes place and the state or states where the award may have to be enforced;

3. (3)  Convenience of the parties and the arbitrators including the travel distances;

4. (4)  Availability and cost of support services needed; and

5. (5)  Location of the subject matter in dispute and proximity of evidence.

Unless the parties have agreed otherwise, the arbitral tribunal may meet at any location outside of the seat of arbitration which it considers appropriate for consultation among its members, hearing witnesses, experts or the parties, or the inspection of goods, other property or documents. The arbitration shall nonetheless be treated for all purposes as an arbitration conducted at the seat.

9.85  Article 14.2 allows parties to agree to hold meetings or hearings at any location outside the legal seat. The arbitral tribunal (in consultation with the parties) may decide to hold hearings or meetings at any appropriate location outside of the seat of arbitration. It is worth noting that aside from its Hong Kong office, HKIAC has branch offices in Seoul at the Seoul International Dispute Resolution Centre (opened in May 2013) and in Shanghai (opened in November 2015). All three offices can assist in arranging HKIAC hearings in Hong Kong, South Korea, or mainland China.

9.86  In determining whether a location is appropriate for a meeting or hearing, the arbitral tribunal may consider various factors. A principal consideration is the convenience of the location. In this regard, the arbitral tribunal should consider the location of the potential attendees of the meeting or hearing as well as the ease of obtaining entry visas for them. The location of evidence may also be a relevant factor. In addition, the arbitral tribunal should take into account the neutrality of the location in relation to the parties, as well as the availability of hearing facilities and support services in the location.

9.87  Much will depend on the purpose of the meeting or hearing. Where the meeting is for the purpose of tribunal deliberations, the dominant consideration will be the location of the arbitral tribunal members. There is no requirement under the HKIAC Rules for the arbitral tribunal to inform the parties when and where it will meet for deliberations. However, where the meeting or hearing is to be held between the parties and the arbitral tribunal, the tribunal will usually consult with the parties on the venue. The arbitral tribunal must also give the parties adequate advance notice of the relevant date, time, and place of any oral hearings for the presentation of evidence and/or oral arguments pursuant to Article 22.4 of the HKIAC Rules. Where the arbitral tribunal is to inspect goods, property, or documents, the site of these goods, property, or documents is usually the location of the meeting.

9.88  As noted above, the arbitral tribunal may also hold meetings or hearings by electronic means such as by telephone, online platform, or videoconference. In practice, case management conferences and procedural hearings are often held in one of these ways. Substantive or evidential hearings are more commonly held in person at a physical location, although that has changed as a result of the 2020 Covid pandemic. It remains to be seen to what extent parties (p. 231) and tribunals will resume in-person hearings once travel restrictions are limited, but the authors anticipate that there will be continued use of virtual hearings.

9.89  Article 14.2 confirms that the arbitral proceedings are deemed to have been conducted at the seat of the arbitration even if any hearings or meetings are held outside of the seat, and if the award is signed outside of the seat. In cases where a hearing is held outside of the seat, some parties may argue that the seat has been changed to the location of the hearing and seek interference from the local courts. Article 14.2 is introduced to prevent such attempt or argument.

9.90  Article 15 sets out the rules regarding the language(s) of the arbitration, which can be summarized as follows:

1. (1)  Where the parties have not previously agreed on the language of the arbitration, they are required to communicate in English or Chinese until the arbitral tribunal determines such language;

2. (2)  Unless the parties have agreed upon the language of the arbitration, the tribunal must determine the language which will apply to all written communications, and will be used in any hearing;¹⁰⁰ and

3. (3)  The arbitral tribunal is empowered to order translation of any supporting materials.¹⁰¹

The arbitration shall be conducted in the language of the arbitration. Where the parties have not previously agreed on such language, any party shall communicate in English or Chinese prior to any determination by the arbitral tribunal under Article 15.2.

9.91  Until this provision was added to the 2018 HKIAC Rules, parties that had not agreed on the language of the arbitration found uncertainty in relation to the appropriate language by which to communicate with the HKIAC and the arbitral tribunal before any such language was determined. This would sometimes lead to extensive communications between the parties on this issue. The 2018 HKIAC Rules now make clear that parties that have not agreed on the language of the arbitration must communicate either in English or Chinese before the tribunal has decided on the language of the arbitration pursuant to Article 15.2. In such circumstances, the HKIAC Secretariat will communicate in both English and Chinese until the tribunal determines the language of the arbitration. This provision gives the parties the flexibility to choose either English or Chinese as valid languages for communication until the determination by the arbitral tribunal on the issue. At the same time, the provision provides enough certainty in the use of one of the two languages stipulated to allow parties to (p. 232) proceed with the arbitral proceedings efficiently until the issue regarding the language of the arbitration is resolved.

9.92  Article 15.1 allows the parties to agree on any language for an HKIAC arbitration.¹⁰² The parties may also agree on more than one language of the arbitration, although this will generally result in increased time and costs, and may reduce the pool of suitably qualified arbitrators.

9.93  The language of the arbitration is a matter of considerable practical importance. It may affect the choice of counsel, arbitrators, factual, and expert witnesses, as well as the costs and efficiency of the arbitral proceedings. As a result, parties will usually designate the language(s) of the arbitration in their arbitration agreement. Even where the arbitration agreement does not specify a language, the parties will usually try to agree upon the language(s) at the beginning of the arbitral proceedings.

9.94.  HKIAC maintains a multilingual team to administer cases in multiple languages, including English, Mandarin, and Cantonese.

9.95  HKIAC will communicate in the language(s) agreed by the parties or determined by the arbitral tribunal.

9.96  As noted above, if the parties have not agreed on the language of the arbitration, the Notice and Answer can be submitted in either English or Chinese. There are cases where one party communicates in English and the other party uses Chinese pursuant to Article 15.1. In such cases, HKIAC will use both languages to communicate with the parties for the sake of fairness and equal treatment, until the issue of language is resolved by party agreement or the tribunal’s decision.

9.97  If a party files a pleading prior to the constitution of the arbitral tribunal and that pleading is not in the language agreed by the parties, HKIAC will ask for the pleading to be submitted in the agreed language. If the parties have agreed to more than one language of the arbitration and a party submits a pleading in one of these languages (prior to the constitution of the arbitral tribunal), HKIAC will ask for the pleading to be submitted in all the agreed languages. If a party communicates in a language other than English or Chinese, and there is no agreed language in the clause, HKIAC will generally request it to translate its communications into either English or Chinese. In all of these scenarios, if the party does not comply (p. 233) with HKIAC’s directions, HKIAC will normally proceed to constitute the arbitral tribunal and refer the issue of language to the tribunal for its determination.

9.98  Article 15.1 requires the arbitral tribunal to determine the language of the arbitration promptly after its constitution. In this regard, the tribunal will usually seek the parties’ input and may take into account the following factors:

1. (1)  The language(s) of the relevant contract(s) and documentary evidence;

2. (2)  The language(s) spoken by the parties and their counsel;

3. (3)  The language(s) spoken by any potential factual or expert witnesses;

4. (4)  The language(s) spoken by the tribunal members; and

5. (5)  The language(s) of the applicable rules, regulations, and legislation.

9.99  The language determined by the arbitral tribunal must be used for all parties’ written communications and hearings.

The arbitral tribunal may order that any supporting materials submitted in their original language shall be accompanied by a translation, in whole or in part, into the language of the arbitration as agreed by the parties or determined by the arbitral tribunal.

9.100  Where supporting materials (including exhibits or legal authorities) are not submitted in the language of the arbitration, the arbitral tribunal may order the material to be translated, in whole or in part, into that language. The tribunal’s power to order translation is discretionary.

9.101  Where a party submits a large volume of documents or documents of excessive length, the arbitral tribunal may order the party to provide translation of the parts that are relied upon by the party or relevant to the case, rather than the entirety of the documents. In this regard, the ICCA Drafting Sourcebook for Logistical Matters in Procedural Orders provides that:

A partial or excerpt translation may be submitted where, due to length or otherwise, the submitting party considers that the burden of translating outweighs the relevance and materiality of the excluded portions.¹⁰³

9.102  During an evidential hearing, if a witness or expert is not able to give evidence in the language(s) of the arbitration, the arbitral tribunal may order the party who introduced the witness or expert to arrange a translator.

9.103.  There is no requirement under Article 15.3 that the translation be prepared by a certified translator. However, the arbitral tribunal may impose such a requirement if it considers it appropriate.

(p. 234) 9.104  If the parties have a dispute over the accuracy of a translation, the parties are expected to confer and try to come to an agreement on the translation. If the parties cannot agree, the arbitral tribunal should decide how to handle the disagreement.¹⁰⁴

9.105  Article 19 reflects the widely accepted principles of competence–competence and separability of the arbitration agreement from the main contract. Both principles are enshrined in Article 16(1) of the UNCITRAL Model Law (2006), given effect by section 34 of the Arbitration Ordinance and have been upheld by the Hong Kong courts.¹⁰⁵ The UNCITRAL Explanatory Note 2008 defines the two principles as follows:

[Competence-competence] means that the arbitral tribunal may independently rule on the question of whether it has jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement, without having to resort to a court. Separability means that an arbitration clause shall be treated as an agreement independent of the other terms of the contract.¹⁰⁶

9.106  In addition to affirming these principles, Article 19 regulates the manner in which jurisdictional challenges may be raised. It also introduces a mechanism that allows HKIAC to move the arbitral proceedings forward if it is satisfied, prima facie, that an arbitration agreement under the Rules may exist.

The arbitral tribunal may rule on its own jurisdiction under these Rules, including any objections with respect to the existence, validity or scope of the arbitration agreement.

9.107  Article 19.1 empowers the arbitral tribunal to decide on any issues in relation to its jurisdiction. Common issues that fall to be determined under Article 19.1 include the following:¹⁰⁷

1. (1)  Whether there is a valid arbitration agreement under the applicable law.¹⁰⁸ This issue may involve allegations that the arbitration agreement does not meet the mandatory requirements of the applicable law,¹⁰⁹ the agreement is inoperative,¹¹⁰ or was procured by fraud or corruption.

2. (p. 235) (2)  Whether a party lacks legal authority or legal capacity to enter into the arbitration agreement. This often gives rise to the question of whether an individual or entity has the authority to sign the arbitration agreement on behalf of a party to the arbitral proceedings. In some cases, the respondent raised this issue to argue that it was not bound by the arbitration agreement.

3. (3)  Whether the subject matter of a dispute is capable of settlement by arbitration. The range of disputes that can be referred to arbitration is very broad under Hong Kong law. Although the Arbitration Ordinance does not define arbitrable disputes, generally most types of commercial or contractual claims can be submitted to arbitration.¹¹¹

4. (4)  Whether a condition precedent to arbitration has been fulfilled. For example, there may be a question of whether the parties should negotiate or mediate their dispute before commencing arbitration.

5. (5)  Whether the subject matter submitted to arbitration falls within the scope of the arbitration agreement¹¹² This issue requires the examination of the terms of the arbitration agreement. Parties sometimes argue that the scope of a particular arbitration agreement does not cover, for example, tortious claims or claims that arise in relation to a separate agreement.

6. (6)  Whether the arbitral tribunal has been properly constituted.¹¹³ This may involve questions of whether an arbitrator was appointed in accordance with the arbitration agreement or whether there are any issues of due process in relation to the appointment procedure.

9.108  The arbitral tribunal may rule on jurisdictional issues on its own motion or upon a party’s request. In practice, it is relatively rare for a tribunal to exercise its power under Article 19.1 unless a party raises a jurisdictional objection.

9.109  The arbitral tribunal may bifurcate issues of jurisdiction and merits and rule on the jurisdictional issue as a preliminary question. The tribunal may also determine its jurisdiction and the merits together in the final award. If the tribunal decides that it has jurisdiction as a preliminary question, such a decision is not final under Hong Kong law. Within thirty days after receipt of the decision, any party may request the CFI to decide the matter, which decision will not be subject to appeal. While such a request is pending, the tribunal may continue the arbitration and proceed to make an award.¹¹⁴

9.110  If the tribunal decides that it does not have jurisdiction over a dispute, such a decision is not subject to appeal under Hong Kong law.¹¹⁵ In the circumstances, the Hong Kong court must decide the dispute (assuming it is competent to do so).¹¹⁶

The arbitral tribunal shall have the power to determine the existence or the validity of any contract of which an arbitration agreement forms a part. For the purposes of Article 19, an arbitration agreement which forms part of a contract, and which provides for arbitration under these Rules, shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not necessarily entail the invalidity of the arbitration agreement.

9.111  Article 19.2 affirms the doctrine of separability, whereby an arbitration agreement is considered to be separate and divisible from the contract in which it is contained. This means, for example, where a party alleges that the contract is null or void, such an allegation does not affect the arbitral tribunal’s authority to determine the validity of the contract. Even when the arbitral tribunal decides that the contract is null and void, it does not necessarily follow that the arbitration clause itself is invalid.¹¹⁷

9.112  The doctrine of separability has also been incorporated into the Arbitration Ordinance¹¹⁸ and many other arbitration rules.¹¹⁹ It has also been given effect to by the Hong Kong courts.¹²⁰

A plea that the arbitral tribunal does not have jurisdiction shall be raised if possible in the Answer to the Notice of Arbitration, and shall be raised no later than in the Statement of Defence, or, with respect to a counterclaim, in the Defence to the Counterclaim. A party is not precluded from raising such a plea by the fact that it has designated or appointed, or participated in the designation or appointment of, an arbitrator. A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitration. The arbitral tribunal may, in either case, admit a later plea if it considers the delay justified.

9.113  Article 19.3 deals with the timing of raising a jurisdictional objection. The provision is largely incorporated from Article 16(2) of the UNCITRAL Model Law (2006), given effect by section 34(1) of the Arbitration Ordinance.

9.114  There are two sets of time limits for raising an objection:

1. (1)  Where the objection relates to the tribunal’s lack of jurisdiction, the objection must be raised in the Answer if possible and must be raised no later than in the Statement of Defence. In the case of an objection to the tribunal’s jurisdiction to decide a counterclaim, the applicable deadline is the due date of the reply to the counterclaim.

2. (p. 237) (2)  Where the objection relates to the tribunal exceeding the scope of its authority, the objection should be raised as soon as the matter alleged to have exceeded the scope emerges during the arbitral proceedings.

9.115  Article 19.3 contains a sensible qualification to the effect that a party’s designation or appointment of an arbitrator, or its participation in the designation or appointment of an arbitrator, does not by itself preclude a party from raising a jurisdictional objection. This clarifies that a party will not lose its fundamental right to appoint an arbitrator simply because it intends to object to the jurisdiction of the arbitral tribunal, once constituted.¹²¹

9.116  While a party should make a jurisdictional objection as soon as practicable, Article 19.3 recognizes that the arbitral tribunal may accept and consider a late objection if it considers that the delay is justified, for example where new facts are discovered.¹²² This applies to both time limits in paragraph 9.114 above.

9.117  There is an ongoing debate as to whether the failure to raise a jurisdictional objection during the arbitration should preclude its use in setting aside or enforcement proceedings. Hong Kong and Singapore courts grappled with this issue in relation to the enforcement of five SIAC awards in Astro v Lippo.¹²³ For different reasons, both courts found that parties have a choice as to remedies, thereby allowing a party to reserve its right to raise a jurisdictional objection until the enforcement proceeding.¹²⁴ And it appears that the Hong Kong courts have a diverging view from the Singapore courts, whereby the CFI enforced the awards despite the Singapore Court of Appeal’s decision to refuse enforcement. A key area of difference between the two courts was whether a party could raise a jurisdictional objection at the enforcement stage if it failed to do so in the arbitration. The Singapore court found that a party was entitled to object to the tribunal’s jurisdiction at an enforcement court under the UNCITRAL Model Law, while the Hong Kong court took issue with a party keeping a jurisdictional objection in reserve to be deployed in the enforcement proceedings, depending on the outcome of the arbitration.¹²⁵ The approach adopted by the Hong Kong courts is that of English courts, which tend to reject challenges to an award on the basis of jurisdictional objections that were raised late during the arbitration.¹²⁶

9.118  Article 19.4 of the HKIAC Rules (2013) has been split into Articles 19.4 and 19.5 of the HKIAC Rules (2018). Together, these articles give HKIAC the power to proceed with an arbitration, even where there are questions about the tribunal’s jurisdiction, as long as HKIAC is satisfied on a prima facie basis that there may be a valid HKIAC arbitration agreement.

9.119  The jurisdictional questions contemplated by Article 19.4 are those in relation to the existence, validity, or scope of the arbitration agreement(s) or those concerning the authority of HKIAC to administer the arbitration. A new question has been included as a result of the addition of Article 29 in relation to one single arbitration under multiple contracts. These questions cover the common objections raised by the respondent in practice, which include allegations that, for example:

1. (1)  the person or entity who signed the arbitration agreement did not have the authority to represent the respondent;

2. (2)  the respondent is not a party to the arbitration agreement;

3. (3)  the arbitration agreement is invalid under the law of the place of the respondent;

4. (4)  the claimant’s claim falls outside the scope of the arbitration agreement; or

5. (5)  the arbitration agreement should not be construed to include a reference to the HKIAC Rules or HKIAC as the administering body.

9.120  Such a question may be raised by a party or identified by HKIAC. In practice, HKIAC will usually exercise its power pursuant to Article 19.5 only upon a party’s request and will make a decision after hearing the views from all the parties.

The arbitration shall proceed only if and to the extent that HKIAC is satisfied, prima facie, that an arbitration agreement under the Rules may exist or the arbitration has been properly commenced under Article 29. Any question as to the jurisdiction of the arbitral tribunal shall be decided by the arbitral tribunal once constituted, pursuant to Article 19.1.

9.121  Article 19.5, one of the most notable provisions introduced in the HKIAC Rules (2013), allows HKIAC to deal with jurisdictional issues at an early stage in the arbitration and prior to the constitution of the arbitral tribunal.

9.122  In practice, the respondent sometimes takes issue with the arbitration agreement or challenges the jurisdiction of the arbitral tribunal or institution, and relies on these grounds to seek suspension or termination of the arbitral proceedings even before the arbitral tribunal is put in place. The parties are often stuck in these situations, as the respondent may not wish to proceed any further and may create difficulty in the process for constituting the tribunal. Article 19.4 addresses this problem directly by authorizing HKIAC to step in and to decide whether and to what extent the arbitration shall proceed.

(p. 239) 9.123  The test adopted by HKIAC to deal with these jurisdictional objections is whether, prima facie, ‘an arbitration agreement under the Rules may exist’.¹²⁷ The test will be met if there is some (even tenuous) evidence that the parties may have an agreement to arbitrate under the HKIAC Rules.

9.124  The prima facie test in Article 19.5 sets a relatively low threshold. Its objective is to allow HKIAC to proceed with any arbitration commenced under a clause that meets the test in Article 1.1, which applies the Rules to ‘arbitrations where an arbitration agreement either (a) provides for these Rules to apply; or (b) … provides for arbitration “administered by HKIAC” or words to similar effect’. Article 19.5 does not allow HKIAC to determine whether the tribunal has jurisdiction to decide the dispute; that is the job of the arbitral tribunal itself. It does, however, give HKIAC power to reject arbitrations that are commenced under obviously invalid clauses, or clauses that do not provide for arbitration under the HKIAC Rules.

9.125  For example, in the past HKIAC has decided to proceed with the arbitration in the following situations:

1. (1)  The claimant commenced an arbitration under the terms and conditions of 100 purchase orders. The terms and conditions contained an HKIAC arbitration clause. The claimant was not able to provide copies of the purchase orders, but was able to provide a copy of the terms and conditions as well as purchase management records showing the relevant transactions between the parties. The respondent raised a jurisdictional objection on the basis that there was no arbitration agreement between the parties.

2. (2)  One of the respondents requested HKIAC to terminate the arbitration against it because that respondent was a non-signatory to the underlying contract. The claimant explained that a provision of the contract allowed the claimant to claim any of its right against that particular respondent, and, in the circumstances, that respondent must act as a direct party under the contract.

3. (3)  The respondent requested HKIAC not to proceed with an arbitration because the relief pleaded by the claimant was a matter within the exclusive jurisdiction of an accounting expert. The claimant argued that its claim related to the respondent’s breach of a share purchase agreement which was covered by the arbitration clause contained in the agreement.

4. (4)  The claimant commenced an arbitration under the HKIAC Rules pursuant to a charterparty with a clause providing ‘arbitration in Hong Kong (Hong Kong International Arbitration Centre)’. The respondent raised an objection under Article 19.4 on the basis that the clause refers to ad hoc arbitration with HKIAC as the appointing authority or a provider of administrative services. The claimant asserted that the reference to HKIAC in the clause should be construed as being words to similar effect as ‘administered by HKIAC’ and therefore HKIAC should administer the arbitration.

9.126  In practice, HKIAC is slow to discontinue an arbitration under Article 19.5 and will generally proceed, leaving the jurisdictional issue to be decided by the arbitral tribunal once (p. 240) constituted. However, HKIAC is unlikely to proceed if it is obvious that no arbitration agreement exists between the parties.

9.127  It should be noted that Article 19.5 does not empower HKIAC to decide on the jurisdiction of the arbitral tribunal or the substantive aspect of the jurisdictional question raised. Instead, HKIAC’s decision is limited to whether and to what extent the arbitration shall proceed. Such decisions are made by the Proceedings Committee.¹²⁸

HKIAC’s decision pursuant to Article 19.5 is without prejudice to the admissibility or merits of any party’s claim or defence.

9.128  Article 19.6 serves to clarify that HKIAC’s decision under Article 19.5 as to whether an arbitration shall proceed has no bearing on the substance of any party’s claim or defence. The HKIAC Rules (2018) add ‘defence’ to the language in this section to set out that such decision made under Article 19.5 shall be made without prejudice to the admissibility or merits of any party’s defence as well as claims. If HKIAC decides to proceed, such decision does not affect the arbitral tribunal’s ability to rule on the admissibility or merits of the claim. Similarly, if HKIAC decides not to proceed, such decision must not be regarded as a determination of the admissibility or merits of the claim.

9.129  These articles underwent minor changes in the HKIAC Rules (2018) revision process. The majority of the changes are linguistic, and do not affect the substantive requirements for written submissions, which remain largely unchanged from those in the HKIAC Rules (2013). The requirement to provide the parties’ contact details has been removed from Article 16.1 because Article 4.1 requires the same details to be provided in the Notice of Arbitration.

In addition, the HKIAC Rules (2018) now expressly provide that respondents may include cross-claims in the Statement of Defence (in addition to defences and counterclaims).

9.130  The filing of written submissions is a key procedural step for the parties to present their case and respond to their opposing party’s position. The HKIAC Rules offer considerable flexibility in the form and style of written submissions, with guidance on the content to be included in these submissions.

9.131  The arbitral tribunal retains the power to determine the appropriate form and contents of the parties’ written submissions and the manner in which these submissions should be exchanged. In most HKIAC cases, pleadings are exchanged sequentially. However, the arbitral tribunal may order simultaneous exchange in appropriate cases.

(p. 241) 9.132  It has been suggested that the ideal system of pleadings would include the following features:¹²⁹

1. (1)  Each issue must be clearly identified in a simple, concise but comprehensive manner. No intentional vagueness or obfuscation of issues should be allowed;

2. (2)  The issues should be identified early in the reference, but the system of identification should also cater for any (legitimate) need of the parties to amend their cases as the case evolves; and

3. (3)  The system should be strict enough to ensure that each party appreciates the case it has to meet and yet to be sufficiently flexible so that there is no need to devote inordinate time and resources to technical amendments and arguments on the pleadings.

These features are reflected by Articles 16 to 18, 20, and 21 of the HKIAC Rules (2018). Each of these provisions will be discussed in turn below.

9.133.  Article 16.1 does not impose any requirement regarding the form or style of the Statement of Claim, except that it has to be in writing. The claimant can determine the appropriate format or structure for its pleadings.

9.134  The claimant also has discretion to decide whether to file the Statement of Claim together with the Notice (or to treat the Notice as the Statement of Claim), or to file it separately.

9.135  Article 16.1 does not set a time limit for the claimant to submit the Statement of Claim, and instead leaves it to be determined by the arbitral tribunal. In this regard, Article 21 provides that time limits for the communication of written statements (including the Statement of Claim) should not exceed forty-five days, unless the arbitral tribunal considers otherwise, and subject to the arbitral tribunal’s power to extend this time limit.¹³⁰

9.136  Subject to the terms of the arbitral tribunal’s procedural order, the claimant may seek an extension of time for filing the Statement of Claim. The tribunal will decide whether to grant such a request.

9.137  The claimant must serve a copy of the Statement of Claim on all other parties and each member of the arbitral tribunal by one or more means of delivery under Article 2.16 of the (p. 242) HKIAC Rules (2018). A copy must also be provided to HKIAC in accordance with Article 13.3.

9.138  Article 16.2 provides a list of contents to be included in the Statement of Claim. In principle, the claimant is required to include summaries of relevant facts, points of law, the issues for determination and the relief sought. The claimant is free to include more particulars. As discussed in paragraph 9.106 below, the arbitral tribunal may vary this content requirement as it considers appropriate.

9.139  In contrast with the HKIAC Rules (2013),¹³¹ the claimant is no longer expressly required to include parties’ contact details in its Statement of Claim. The claimant is required to include this information in the Notice of Arbitration. In practice, the Statement of Claim is usually a more comprehensive and extensive document than the Notice and sets out the claimant’s case in substantial detail.