HKIAC Opens Public Consultation for Proposed Amendments to the Administered Arbitration Rules
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On 23 January 2024, the Hong Kong International Arbitration Centre (“HKIAC”) launched a public consultation on proposed amendments to the current version of the Administered Arbitration Rules, which came into force on 1 November 2018. The proposed amendments come after six years of implementation of the current Administered Arbitration Rules and include newly drafted provisions which reflect topical issues and developments in the global arbitration community. It should be noted that this is not a full re-write of the current rules, rather a tinkering to ensure that Hong Kong and the HKIAC remain both a jurisdiction and arbitral institution of choice for international parties.
Key Amendments
1. Diversity in Appointing Arbitrators
A significant change in the Administered Arbitration Rules is the inclusion of a new Article on diversity. The newly drafted Article 10 states that parties in arbitral proceeding and co-arbitrators should “take into account considerations of diversity” when choosing an arbitrator. By the same token, the HKIAC will also take diversity into consideration when exercising its authority of appointment.
2. Provisions on Mode of Communication and Data Protection
On the mode of communication, the HKIAC proposes in Article 3, to enable parties and arbitrators to communicate through any form of electronic communication that has previously been agreed upon, allowing for greater agility and ease on the conduct of arbitral proceedings.
Meanwhile, data protection takes the centre stage in the proposed amendment with the proposed inclusion of a newly drafted Article dedicated to information security. In the proposed amendments, parties can agree on “any reasonable measures to protect information shared, stored, or processed in relation to the arbitration” (Article 47). The arbitral tribunal may, after considering the parties’ views, give direction to parties on such protection of information security, and make decisions in respect of any breach of such direction.
3. Mechanism for a Single Arbitration to Proceed under Multiple Contracts
While the current Administered Arbitration Rules allow claims arising out of more than one contract to proceed under a single arbitration, the proposed amendments seek to add one specific provision whereby once the HKIAC decides that the arbitration is properly commenced under Article 20.5, parties will be deemed to have waived their rights to choose an arbitrator and the arbitral tribunal will be appointed by the HKIAC with or without regard to the preference of the parties.
Key Takeaways
No precise definition or guiding principles are offered by the HKIAC with regards to diversity such as what factors should be considered when complying with the proposal. Diversity and inclusion have been a heated topic in the arbitration community in recent years. Recent data suggests that the proportion of women appointed as arbitrators increased from around 13% to around 26% between 2015 to 2021 (Diversity in institutional arbitration: what does the data say and what next?). Meanwhile, the London Court of International Arbitration (“LCIA”) and the Singapore International Arbitration Centre have been making impressive progress in achieving gender equality in arbitrator appointments, with each appointing close to 50% of female arbitrators in 2022. The precise application of the newly drafted Article on diversity remains to be seen and maybe difficult to monitor in practice. Nevertheless, the inclusion of a diversity Article signals HKIAC’s welcoming stance towards diversity and inclusion.
On the other hand, the HKIAC’s proposal on data protection measures mirror similar provisions in the LCIA Arbitration Rules, which grant the arbitral tribunal the power to adopt specific measures to protect data shared for the arbitration and to issue cybersecurity directions. The proposed amendments signal HKIAC’s intention to align with provisions of other leading arbitration centres around the globe in this important area.
Conclusion and Next Step
Since the enactment of the Administered Arbitration Rules, the number of arbitrations conducted in HKIAC has seen a remarkable growth. The Administered Arbitration Rules is also lauded by practitioners for its effectiveness and cost-efficiency. Placing diversity and data protection at the forefront, the proposed amendments highlight the HKIAC’s intention to align with the on-going trends in the global legal community. It is hoped that the proposed amendments will strengthen Hong Kong’s position as a global dispute resolution hub.
The consultation is open until 23rd February 2024.