Hong Kong is planning to overhaul its arbitration
procedures in a bid to improve its position as a leading dispute
resolution centre in Asia.
The Hong Kong International Arbitration Centre (HKIAC) is planning to
introduce new rules in the first quarter of next year which would usher
in a cap on hourly rates on arbitration held in the centre, making the
process less expensive for companies and individuals.
In addition the organisation plans to introduce new guidelines for arbitrator expenses.
The current rules, introduced in 2008, prescribe that fees can be
calculated either according to a schedule of fees relating to the value
of the dispute or on the basis of hourly rates. The proposed change
would cap this rate at HK$6,500 (£518) per hour, preventing them
reaching current levels, which can go as high as HK$10,000-15,000
(£801-£1,200) per hour at present.
Kathryn Sanger, a Clifford Chance consultant and a council member for
the HKIAC, said: "Under the first system, there is a schedule of fees
which will relate to the sum in dispute, so what the parties are
claiming. Under the second system, fees will be charged as hourly rates,
subject to a fee cap. The proposal is a cap of HK$6,500 (£518) per
hour, which can be increased if both parties agree."
She added: "Also, each system contains the same standard terms of
appointment on matters such as cancellation arrangements, which again
can be changed with the parties' agreement. The HKIAC is also proposing
to issue a practice note dealing with arbitrator expenses."
Other major changes to the rules include the introduction of
emergency arbitrator provisions and the ability of the HKIAC to
consolidate arbitrations. Respectively, this will make it easier for
companies and individuals to obtain interim relief quickly from an
emergency arbitrator before a tribunal is constituted, and will allow
the arbitration centre to hear more than one case at the same time.
According to Sanger, the new principles are part of a wider plan to
bring HKIAC in line with other international institutions and attract
more arbitration work to Hong Kong.
"One of the big complaints about arbitration is that it's expensive
and that parties don't have any control over what arbitrators charge and
what expenses they charge, so we're following the best practice of
other institutions," she said. "The real trend now is to have control
over fees."
News of the changes was discussed as part of Hong Kong International
Arbitration Week, where Hong Kong justice secretary Rimsky Yuen stressed
the importance of arbitration in the region, stating that "the
promotion and development of arbitration and ADR will continue to be a
major and top priority of the department of justice."
The capacity of the HKIAC is also set to be increased following the
move to new and bigger offices, which it is hoped will facilitate a rise
in arbitration cases in the future. Hong Kong is also in the process of
reaching agreements with Taiwan and Macau which would enable Hong Kong
arbitral awards to be enforceable across Greater China.
Chiann Bao, the Secretary-General of the HKIAC, said Hong Kong was a
naturally attractive place for dispute resolution, but was continuing to
review and update its processes in order to stay ahead of the
competition.
She said: "The competition is not hostile; in Europe there are five
major seats for arbitration, in Asia there are two, arguably three or
four coming down the pipeline. Singapore is regarded as another one, as
well as Kuala Lumpur and Seoul. We are just doing our best to ensure we
are the most attractive seat."
Source: legalweek
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