Recent rule revisions of arbitration institutions

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Arbitration Rules

This article compares the new provisions and key revised provisions of the Arbitration Rules of the Hong Kong International Arbitration Centre (HKIAC) with the current arbitration rules of the International Court of Arbitration of the International Chamber of Commerce (ICC), the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) and the Singapore International Arbitration Centre (SIAC), examines the key additions to the arbitration rules of these institutions in recent years and analyzes current trends in the development of the practice of international commercial arbitration.

New additions to HKIAC rules

Alternative means of dispute resolution. Article 13.8 of the HKIAC rules expressly permits parties to pursue other means to settle their dispute after the commencement of arbitration, with the arbitration proceedings suspended under the appropriate conditions and resumable upon request by one of the parties. This provision, which provides the conditions for the initiation of a mediation procedure during arbitration, is conducive to the reasonable resolution of disputes by appropriate means.

Concurrent proceedings. Article 30 of the HKIAC rules provides that, where the same arbitral tribunal is constituted in each arbitration and a common question of law or fact arises in all the arbitrations, the arbitral tribunal may, after consulting with the parties, conduct two or more arbitrations at the same time, or one immediately after another, or suspend any of those arbitrations until after the determination of any other of them. That concurrent proceedings may be used for multiple arbitrations that cannot be consolidated, or for multiple contracts that cannot be addressed by a single arbitration, is conducive to clarifying the facts in the cases.

Early determination procedure. Article 43 of the HKIAC rules provides that, where the points of law or fact are manifestly without merit, or the points of law or fact are outside the arbitral tribunal’s jurisdiction, or even if the points of law or fact are submitted by another party and are assumed to be correct, no award could be rendered in favour of that party, and the arbitral tribunal has the power, at the request of any party, to decide one or more points of law or fact by way of the early determination procedure.

The arbitral tribunal is required to make its decision on whether to dismiss the request or allow the request to proceed within 30 days from the date of filing the request, and make its order or award within 60 days from the date of filing the request. This procedure can determine relatively clear points of law or fact early, preventing a delay in the proceedings due to interminable arguments. The early dismissal procedure in article 29 of the SIAC arbitration rules is similar, but the SIAC only provides the first two reasons above, and does not specify the deadline for the acceptance or dismissal of the request by the arbitral tribunal.

Disclosure of third party funding of arbitration. Article 44 of the HKIAC rules provides that, regardless of when the funding agreement is executed, the funded party is required to communicate a written notice to all other parties, the arbitral tribunal, any emergency arbitrator and the HKIAC of the fact that a funding agreement has been made; and the identity of the third-party funder. A disclosure is also required to include any changes to the above-mentioned information.

For a funding agreement executed after the commencement of arbitration, the disclosure is to be made “as soon as practicable”, and the requirement that disclosure be made within 15 days from the date of execution contained in the draft of the rules has been dropped. This maintains the flexibility of the rules, guarding against the risk of delayed disclosure while leaving room for the different circumstances of individual cases. However, the HKIAC does not specify the liability for non-disclosure.

New rules of each institution

In recent years, arbitration institutions have been busy revising their rules, with the newly added provisions mainly covering the joinder of additional parties, consolidation of arbitrations, multiple contracts, emergency arbitrators, and expedited or simplified procedures. Joinder of additional parties, consolidation of arbitrations and multiple contracts are mainly used where one or more arbitration cases involve multiple, not completely overlapping parties, effectively resolving related disputes through the aggregation of arbitration procedures and clarification of case facts.

Emergency arbitrators are used to make up for the deficiency in interim remedies before the constitution of the arbitral tribunal. Expedited or simplified procedures are generally used to handle small disputes. This column compares the above-mentioned rules of the HKIAC, SIAC, ICC and SCC in the accompanying tables.

By comparing the arbitration rules of the four international arbitration institutions, it can be seen that the rules of the institutions are closely connected to the current changes in the development of international commercial transactions. The increasing complexity of international commercial transactions, the diversity of the entities, and the exponential increase in commercial disputes have also engendered such issues as extremely high arbitration costs, complex proceedings and prolonged hearings. The rules set out in the accompanying tables are the responses of the institutions to these issues.

Simplifying the procedures for settling disputes, enhancing arbitration efficiency, and reducing the arbitration costs to the parties while ensuring fairness and respecting party autonomy are the major means by which institutions enhance their competitiveness. Additionally, arbitration institutions face risks and new issues engendered by rule innovation, for example, the potential conflict between strengthening of the management authority of the institutions reflected in the rules on the joinder of additional parties, consolidation of arbitrations and multiple contracts, and party autonomy. The effect of the implementation of the various rules awaits the test of practice.

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Du Xinli is director of the China Arbitration Institute of China University of Political Science and Law, and an arbitrator of the China International Economic and Trade Arbitration Commission (CIETAC)