The Hong Kong Arbitration (Amendment) Ordinance 2013 came into force on July 19, 2013. Of most relevance to international arbitration users are changes regarding the enforcement in Hong Kong of emergency relief granted prior to the commencement of arbitration. Another prominent amendment relates to the reciprocal enforcement of awards between Hong Kong and Macao.
HKIAC introduces emergency procedures
The Hong Kong International Arbitration Centre (HKIAC) has amended its own Administered Arbitration Rules (with effect from November 1, 2013) by introducing emergency procedures. The new rules enable parties to apply for the appointment of an emergency arbitrator at the same time, or immediately following, the filing of a notice of arbitration.
Under the new HKIAC Administered Arbitration Rules, an emergency relief application should describe the background of the underlying dispute as well as the grounds for the application. In most cases, an emergency arbitrator will be appointed within two days following the acceptance of an application by the HKIAC, and a decision on the relief sought within 15 days following the receipt of the file by the emergency arbitrator.
The arbitration rules of other arbitral institutions increasingly contain similar provisions for the appointment of emergency arbitrators and the granting of emergency relief.
Under the 2013 Singapore International Arbitration Centre (SIAC) Rules, a party in need of emergency relief may, concurrently with or following the filing of a notice of arbitration but prior to the constitution of the arbitral tribunal, make an application for emergency interim relief. The party seeking emergency relief under the SIAC Rules is expected to state the grounds for making the application and the nature of the relief sought. An emergency arbitrator may be appointed within one business day following the receipt of the application and required fees by the registrar.
Under the 2012 International Chamber of Commerce (ICC) Rules of Arbitration, a party may apply to appoint an emergency arbitrator to issue orders concerning interim or conservatory measures that cannot await the constitution of an arbitral tribunal. Unlike other arbitration rules which only allow for the appointment of an emergency arbitrator concurrently with, or following the filing of, a notice of arbitration, it is possible, under the ICC Rules, to seek to appoint an emergency arbitrator prior to the filing of a request for arbitration, provided a request is filed within 10 days. As with the emergency procedures under the HKIAC Administered Arbitration Rules, an emergency arbitrator may be appointed by the President of the ICC Court within two days from the application. The emergency arbitrator is expected to make an order within 15 days following receipt of the file.
The current London Court of International Arbitration (LCIA) Rules do not provide for procedures in relation to emergency arbitrator and emergency relief. However, the rules do have mechanisms for the “expedited formation” of an arbitral tribunal. In cases of exceptional urgency (on or after commencement of the arbitration), a party may submit a written application to the LCIA Court setting out grounds to request the expedited formation of an arbitral tribunal. A similar mechanism for the “emergency formation” of the arbitral tribunal has been preserved in the new LCIA Rules 2014.
Hong Kong amendments
Part 3A has been added to the Hong Kong Arbitration Ordinance to deal with the enforcement of emergency relief. All emergency relief granted by an emergency arbitrator, whether granted inside or outside Hong Kong, is now enforceable in the same manner as an order or direction of the Hong Kong courts, with leave of the High Court.
The court may refuse leave to enforce emergency relief granted outside Hong Kong unless the party seeking to enforce it can demonstrate that the relief being sought is a “temporary measure” (including, for example, an injunction) with the aim of doing one or more of the following:
- maintain or restore the status quo pending the determination of the dispute concerned
- take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral process itself
- provide a means of preserving assets out of which a subsequent award made by an arbitral tribunal may be satisfied
- preserve evidence that may be relevant and material to resolving the dispute
- give security in connection with anything to be done under the measures stated above
- give security for the costs of the arbitration.
The changes made in the HKIAC Administered Arbitration Rules and the Arbitration Ordinance bring Hong Kong in line with other prominent international arbitration regimes – clearly a necessary step in the continuing development of Hong Kong as one of the world’s foremost arbitration venues.
Hong Kong and Macao
As Hong Kong and Macao are both Special Administrative Regions (SARs) within the People’s Republic of China, an arbitral award rendered in Macao is not a “foreign” award in Hong Kong (and vice versa) and so is not subject to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This lacuna was rectified on January 7, 2013, when the Macao SAR entered into the Arrangement Concerning Reciprocal Recognition and Enforcement of Arbitral Awards with the Hong Kong SAR.
This arrangement (which is similar to that in place between the Hong Kong SAR and mainland China) establishes a mechanism for the mutual recognition and enforcement of arbitral awards between Macao and Hong Kong. To implement this arrangement, the Arbitration Ordinance had been amended to include a new Section 98A on the enforcement of Macao awards, which sets out the formal requirements for enforcing Macao awards in Hong Kong and the grounds for refusing such enforcement. The limited grounds for refusing to enforce a Macao award in Hong Kong are identical to those for refusing a mainland China award and also those in the New York Convention.