ViewHK: Arbitration in Hong Kong - Lexology Navigator Q&A

Arbitration in Hong Kong - Lexology Navigator Q&A

Vinson & Elkins LLP John G. ZadkovichHong KongSeptember 5 2014

Legal framework

National arbitration laws
What legislation applies to arbitration in your jurisdiction?

The Arbitration Ordinance (Cap 609), which came into operation on June 1 2011.

Mandatory laws
Are there any mandatory laws?

The Arbitration Ordinance contains numerous mandatory provisions applicable to arbitration proceedings, such as the following:

the provision that the Hong Kong courts should not interfere in arbitration proceedings, except as expressly provided for in the Arbitration Ordinance (Section 3(2)(b));the requirement that the arbitration agreement be in writing (Section 19);the court’s power to order a stay of court proceedings in favour of arbitration (Section 20).the provisions on the appointment of arbitrators, including the appointment itself and the grounds and procedure for challenging an appointment (Sections 23 to 28);the tribunal’s authority to rule on its own jurisdiction (Section 34);the requirement that the parties be treated equally, including the requirement that the tribunal be independent and act fairly and impartially towards the parties, giving each reasonable opportunity to present its case and deal with its opponent's case, and to use procedures that are appropriate to the particular case to avoid unnecessary delay and expenses (Section 46);certain general powers of the tribunal, including the power to make orders for security for costs, discovery, the collection of evidence and the preservation of property (Section 56);the court’s power to order recovery of the tribunal's fees (Section 62) and the tribunal's power to withhold an award for non-payment of the arbitrators' fees and expenses (Section 78); andthe court’s power to set aside an award (Section 81).

New York Convention
Is your country a signatory to the New York Convention? If so, what is the date of entry into force?

Hong Kong is a signatory by virtue of China’s accession to the convention. China acceded to the convention on January 22 1987.

Are there any reservations to the general obligations of the convention?

No.

Treaties and conventions
What other treaties and conventions in relation to arbitration is your jurisdiction party to?

Hong Kong is a signatory to numerous treaties, either in its own right or by virtue of China’s accession/ratification. A full list of the treaties in force and applicable to Hong Kong can be accessed via the Department of Justice website (www.doj.gov.hk/eng/laws/interlaw.html). Some of the more relevant in the context of arbitration include the following:

the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ratified by China in 1994);the Statute of the Hague Conference on Private International Law (signed by China in 1987);the Hague Convention for the Pacific Settlement of International Disputes 1899 and 1907; andthe Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (acceded to by China in 1997).

Hong Kong has entered into numerous bilateral investment treaties with the following countries:

Australia (came into force on October 15 1993);Austria (came into force on October 1 1997);Belgium and Luxembourg (came into force on June 18 2001);Denmark (came into force on May 4 1994);France (came into force on May 30 1997);Germany (came into force on February 19 1998);Italy (came into force on February 2 1998)Japan (came into force on June 18 1997);South Korea (came into force on July 30 1997);Netherlands (came into force on September 1 1993);New Zealand (came into force on August 5 1995);Sweden (came into force on June 26 1994);Switzerland (came into force on October 22 1994);Thailand (came into force on April 18 2006); andUnited Kingdom (came into force on April 12 1999).

While Hong Kong is a signatory to numerous treaties, either in its own right or by virtue of China’s accession/ratification, particular attention should be paid to treaties that bind Hong Kong as certain of them contain reservations.

UNCITRAL
Has your jurisdiction adopted the UNCITRAL Model Law?

The Arbitration Ordinance largely incorporates the provisions of the UNCITRAL Model Law, with amendments where necessary or appropriate.

Reform
Are there any impending plans to reform the arbitration laws in your jurisdiction?

Not at present.

Arbitration agreements

Validity
What are the validity requirements for an arbitration agreement?

An arbitration agreement must be in writing. An arbitration agreement is considered to be in writing if its content is recorded in any form, which includes electronic communications, an agreement in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other, and/or a reference in a contract (Section 19 of the Arbitration Ordinance).

Enforcement of agreements
How are arbitration agreements enforced in your jurisdiction? What is the attitude of the national courts towards arbitration agreements?

If a party commences court proceedings in breach of a valid arbitration agreement, the court must refer the parties to arbitration and stay the court proceedings, unless the arbitration agreement is null and void, inoperative or incapable of being performed (Section 20 of the Arbitration Ordinance).

The Hong Kong courts are very supportive of arbitration proceedings and arbitration agreements generally.

Consolidation
Can an arbitral tribunal with its seat in your jurisdiction consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances?

A tribunal has no general power to consolidate arbitration proceedings. Arbitration is a consensual process and the parties may thus agree to consolidate proceedings.

Under the Hong Kong International Arbitration Centre (HKIAC) Rules, the HKIAC shall have the power, at the request of a party and after consulting with the parties and any confirmed arbitrators, to consolidate two or more arbitrations pending under the HKIAC Rules where:

the parties agree to consolidate;all of the claims in the arbitrations are made under the same arbitration agreement; orthe claims are made under more than one arbitration agreement, a common question of law or fact arises in both or all of the arbitrations, the rights to relief claimed are in respect of or arise out of the same transaction or series of transactions and HKIAC finds the arbitration agreements to be compatible (Article 28 of the rules).

The Hong Court courts also have the power to consolidate domestic arbitrations (Schedule 2, paragraph 2 of the Arbitration Ordinance).

Choice of law
How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?

The parties are free to choose the substantive law that will apply to their dispute. This will generally be the law stated to apply to the parties’ contract. The tribunal can decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorised it to do so.

The tribunal will decide the dispute in accordance with such rules of law as are chosen by the parties as applicable to the substance of the dispute. Failing any designation by the parties, the tribunal shall apply the law determined by the conflict of laws rules which it considers applicable.

Separability
Are there any provisions on the separability of arbitration agreements?

The tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. To that end, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract (Section 34 of the Arbitration Ordinance).

Multiparty agreements
Are multiparty agreements recognised?

The Arbitration Ordinance does not prescribe that arbitration agreements must be between two parties only (see Section 19). Therefore, there appears to be no reason why multi-party agreements could not be recognised (except where the arbitration agreement is null and void, inoperative or incapable of being performed (Section 20)).

Arbitral tribunal

Criteria for arbitrators
Are there any restrictions?

The parties are free to determine the number and qualifications of arbitrators in the arbitration agreement (Section 23 of the Arbitration Ordinance). The parties can stipulate that an arbitrator must possess certain characteristics, such as being a professional in a certain field/sector. No one shall be precluded by reason of his nationality from acting as an arbitrator, unless otherwise agreed by the parties (Section 24).

Contractual stipulations
What can be stipulated about the tribunal in the agreement?

Default requirements
Are there any default legal requirements as to the selection of a tribunal - for example, concerning the number of arbitrators or their characteristics?

If the parties fail to agree on the number of arbitrators, the number of arbitrators must be either one or three, as decided by the Hong KongInternational Arbitration Centre (Section 24 of the Arbitration Ordinance).

Arbitrators must:

be independent;act fairly and impartially as between the parties, giving each a reasonable opportunity to present its cases and to deal with the case of its opponent; anduse 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 arbitration proceedings relate (Section 46).

Challenging the appointment of an arbitrator
Can the appointment of an arbitrator be challenged? Can an arbitrator be disqualified? What is the procedure for this?

The appointment of an arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to his impartiality or independence, or if he does not possess qualifications agreed to by the parties. A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made (Section 25).

Yes – see above, an arbitrator can be disqualified.

The parties are free to agree on a procedure for challenging the appointment of an arbitrator.

If no agreement is reached, a party that intends to challenge an arbitrator must, within 15 days of becoming aware of the constitution of the tribunal, send a written statement of the reasons for the challenge to the tribunal. Unless the challenged arbitrator withdraws from his office or the other party agrees to the challenge, the tribunal shall decide on the challenge.

If a challenge is unsuccessful, the challenging party may request, within 30 days of receiving notice of the decision rejecting the challenge, the court or other authority specified (eg, the Hong Kong International Arbitration Centre) to decide on the challenge; this decision cannot be appealed. While such a request is pending, the tribunal, including the challenged arbitrator, may continue the arbitration proceedings and make an award.

Jurisdictional objections
How should an objection to jurisdiction be raised?

The tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement (Section 34 of the Arbitration Ordinance).

A plea that the tribunal does not have jurisdiction must be raised by no later than submission of the statement of defence. A party is not precluded from raising such a plea by the fact that he has appointed or participated in the appointment of an arbitrator. A plea that the tribunal is exceeding the scope of its authority must be raised as soon as the matter alleged to be beyond the scope of its authority arises during the arbitration proceedings. The tribunal may, in either case, admit a later plea if it considers the delay justified (Section 34).

Replacement of an arbitrator
Why and how can an arbitrator be replaced?

An arbitrator can be replaced where:

he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay (Section 27 of the Arbitration Ordinance);he dies (Section 29); orjustifiable doubts as to his impartiality or independence are proven (Section 25).

A substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced (Section 28).

Powers and obligations
What powers and obligations do arbitrators have?

Arbitrators have the powers conferred upon them by the arbitration agreement and applicable arbitration rules as agreed by the parties.

The tribunal also has general powers to:

require a claimant to provide security for the costs of the arbitration;direct the discovery of documents or the delivery of interrogatories;direct that evidence be given by affidavit;direct the inspection, photographing, preservation, custody, detention or sale of any relevant property;direct that samples be taken from, observations be made of or experiments be conducted on any relevant property;initiate the determination of facts and law relevant to the proceedings;administer oaths and take affirmations;examine witnesses and parties under oath or affirmation; anddirect the attendance of witnesses in order to give evidence or produce documents or other material evidence (Section 54 of the Arbitration Ordinance).

In addition to these general powers, the tribunal has the power to:

appoint experts and assessors (Section 54);require the parties to provide the experts with relevant materials (Section 54);require the expert to participate in the hearing (Section 54); andrequest the assistance of the court in taking evidence (Section 55).

The arbitrator’s obligations include the obligation to:

Liability of arbitrators
Are arbitrators immune from liability?

An arbitrator is liable in law for an act done or omitted to be done by him in relation to the exercise or performance of his functions only if it is proved that the act was done or omitted to be done dishonestly (Section 104 of the Arbitration Ordinance).

Communicating with the tribunal
How do the parties communicate with the tribunal?

Communications with the tribunal will generally be in writing.

All statements, documents or other information supplied to the tribunal by one party must be communicated to the other party (Section 52 of the Arbitration Ordinance).

Reaching decisions
Is unanimous agreement of the tribunal required? If there is disagreement, does the will of the majority suffice? What are the implications of this?

In arbitration proceedings with more than one arbitrator, any decision of the tribunal shall be made, unless otherwise agreed by the parties, by a majority of all its members (Section 65 of the Arbitration Ordinance).

In arbitration proceedings with more than one arbitrator, any decision of the tribunal shall be made, unless otherwise agreed by the parties, by a majority of all its members (Section 65).

Where there is a dissenting opinion, the signature of the dissenting arbitrator may not feature in the final award, but this does not undermine its effect, provided that the reasons for any omitted signature are stated (see Section 67).

Arbitrability
Are there any disputes incapable of being referred to arbitration?

Criminal law matters and matters concerning the custody of children cannot be arbitrated in HongKong.

The Arbitration Ordinance also provides that the tribunal cannot make orders as to specific performance of any contract which relates to land or any interest in land (Section 70).

Can the arbitrability of a dispute be challenged?

The tribunal may rule on its own jurisdiction, including any objections with respect to its constitution, matters submitted to arbitration and the existence or validity of the arbitration agreement (Section 34).

Jurisdiction and competence-competence
Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?

The principle of competence-competence is recognised in the Arbitration Ordinance (Section 34).

A jurisdictional challenge must first be raised with the tribunal; if it rules that it has jurisdiction, a party has 30 days within which to request the Hong Kongcourts to decide the matter. If the tribunal rules that it does not have jurisdiction, then the court must decide the matter if it has jurisdiction (Section 34).

Arbitral proceedings

Starting an arbitration proceeding
What is needed to commence arbitration?

Unless otherwise agreed by the parties, the arbitration proceedings commence on the date that the respondent receives the request to refer the dispute to arbitration (Section 49).

Section 10 of the Arbitration Ordinance governs the receipt of written communications, which may include a request to refer a dispute to arbitration.

Limitation periods
Are there any limitation periods for the commencement of arbitration?

Limitation periods in Hong Kong are governed by the Limitation Ordinance (Cap 347). The duration of the limitation period varies depending on the cause of action, but generally is between six and 12 years.

The Limitation Ordinance and any other ordinance relating to the limitation of actions apply to arbitrations just as they apply to court actions. A reference in a limitation enactment to bringing an action is to be construed, in relation to arbitration, as commencement of the arbitration proceedings (Section 14 of the Arbitration Ordinance).

The Arbitration Ordinance also provides that if an arbitration agreement stipulates that a claim will be time barred unless it is referred to arbitration within a period specified in the agreement, the tribunal may extend the period within which that claim may be made if:

it is just to do so in the circumstances; andthe circumstances of the claim are outside the reasonable contemplation of the parties at the time they entered into the agreement (Section 58).

Procedural rules
Are there any procedural rules that arbitrators must follow?

The parties are free to agree on the procedural rules (Section 47 of the Arbitration Ordinance). If the parties fail to agree, the tribunal may conduct the arbitration in the manner that it considers appropriate, "subject to the provisions of this Ordinance". This principally refers to the requirement that the tribunal act fairly and impartially, which cannot be overridden (Section 46).

Dissenting arbitrators
Are dissenting opinions permitted under the law of your jurisdiction?

There is no prohibition in the Arbitration Ordinance against including a dissenting opinion, although this may be a question left for the law applicable at the place of arbitration.

Judicial assistance
Can local courts intervene in proceedings?

Courts must not intervene in matters governed by the Arbitration Ordinance, except as provided in the Arbitration Ordinance (Section 12).

Can the local courts assist in choosing arbitrators?

Under the Arbitration Ordinance, it is the Hong KongInternational Arbitration Centre (not the Hong Kongcourts) that assists in selecting and appointing arbitrators where:

one party has failed to appoint an arbitrator;the parties have failed to appoint an arbitrator;the parties have failed to agree on an arbitrator;the parties have not designated an appointing authority; orthe designated appointing authority has failed to make an appointment(Section 24 of the Arbitration Ordinance).

However, the Hong Kong courts may decide on a challenge to an arbitrator made by one of the parties once the tribunal has made such a ruling (Section 27).

What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration? Can they compel parties to arbitrate? Can they issue subpoenas to third parties?

A respondent cannot be compelled to participate in the arbitration if it refuses/fails to participate.

At the tribunal level (cf court level), unless otherwise agreed by the parties, if the respondent fails to communicate its statement of defence and/or appear at a hearing without showing sufficient cause, the tribunal shall continue the proceedings and make the award on the evidence before it (Section 53).

The court may order a party to attend proceedings before a tribunal to give evidence or to produce documents or other evidence (Section 55).

Third parties
In what instances can third parties be bound by an arbitration agreement or award?

Arbitration is a consensual process and a third party can generally be joined to arbitration proceedings only when it consents. Third parties must have agreed to be bound by the arbitration agreement or otherwise agreed to become a party to the arbitration proceedings.

Default language and seat
Unless agreed by the parties, what is the default language and location for arbitrations?

The parties are free to agree on the language or languages to be used in the arbitration proceedings. Failing such agreement, the tribunal shall determine the language or languages to be used in the proceedings (Section 50 of the Arbitration Ordinance).

Gathering evidence
How is evidence obtained by the tribunal?

The tribunal (or a party with the approval of the tribunal) may request from a competent Hong Kongcourt assistance in taking evidence. The court may execute the request within its competence and according to its rules on taking evidence. To this end, the court may order a person to attend proceedings before a tribunal to give evidence or to produce documents or other evidence (Section 55 of the Arbitration Ordinance).

Unless otherwise agreed by the parties, a tribunal may, when conducting arbitration proceedings, decide whether and to what extent it should itself take the initiative in ascertaining the facts and the law relevant to those proceedings. Unless otherwise agreed by the parties, the tribunal may direct the attendance before it of witnesses in order to give evidence or to produce documents or other evidence (Section 56).

What kinds of evidence are acceptable?

When conducting arbitration proceedings, the tribunal is not bound by the rules of evidence and may accept any evidence that it considers relevant to the proceedings, but it must give the weight that it considers appropriate to the evidence adduced in the proceedings (Section 47).

Confidentiality
Is confidentiality ensured?

Arbitration proceedings and awards are confidential, with certain exceptions (Section 18 of the Arbitration Ordinance).

Can information in arbitral proceedings be disclosed in subsequent proceedings?

Unless otherwise agreed by the parties, documents disclosed in arbitration proceedings are confidential and generally may not be disclosed and/or relied upon in subsequent proceedings (Section 18).

Ethical codes
What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

There are no such codes in Hong Kong.

Costs

Estimation & allocation
How are the costs of arbitration proceedings estimated and allocated?

The tribunal may include in an award directions concerning the costs of the arbitration proceedings (including the fees and expenses of the tribunal) (Section 74 of the Arbitration Ordinance). It may specify to whom, by whom and how the costs of the arbitration proceedings must be paid.

The tribunal is not obliged to follow the scales and practices adopted by the court on taxation when assessing the amount of costs. The tribunal must allow only costs that are reasonable and may allow costs incurred in the preparation of the proceedings before the start of the arbitration.

The parties can agree that the costs of the arbitration proceedings are to be taxed by the court. If they do, then unless the tribunal directs otherwise, the award is deemed to include the tribunal's directions that the costs (other than the fees and expenses of the tribunal) are to be taxed by the court and to be paid on any basis on which the court can award costs in civil proceedings before the court. On taxation by the court, the tribunal must make an additional award of costs reflecting the result of the taxation (Section 75).

Unless the parties have agreed to the contrary, the tribunal can direct that the recoverable costs of arbitration proceedings are limited to a specified amount (Section 57).

As Hong Kong is a common law jurisdiction, the normal common law approach to the recovery of costs applies: that is, the losing party to an arbitration will generally be required to cover the costs of the winning party.

Security for costs
Can the national court or tribunal order security for costs under the law in your jurisdiction?

The tribunal has the power to require a claimant to give security for the costs of the arbitration only where the claimant is:

a natural person who is ordinarily resident outsideHong Kong; ora body corporate or association incorporated outside Hong Kong or with its central management and control exercised outside Hong Kong (Section 56 of the Arbitration Ordinance).

The award

Requirements
What legal requirements are there for recognition of an award? Must reasons be given for the award? Does the award need to be reviewed by any other body?

The Arbitration Ordinance provides that in arbitration proceedings conducted by more than one arbitrator, any decision of the tribunal shall be made by a majority of all its members, unless otherwise agreed by the parties (Section 65 of the Arbitration Ordinance).

The Arbitration Ordinance requires the award to be in writing and signed by the arbitrators, and to state the reasons on which it is based, the date and the place of the arbitration (Section 67).

It does not need to be reviewed by an other body.

Timeframe for delivery
Are there any time limits on delivery of the award?

No.

Remedies
Does the law impose limits on the available remedies? Are some remedies not enforceable by the court?

The Arbitration Ordinance provides that, unless otherwise agreed by the parties, the tribunal may award any remedy or relief that could have been ordered by the court if the dispute had been the subject of civil proceedings in court. This includes the ability to order specific performance of any contract, other than a contract relating to land or any interest in land (Section 70).

The Arbitration Ordinance provides that the tribunal cannot make orders as to specific performance of any contract which relates to land or any interest in land (Section 70); therefore, any such order is not capable of enforcement.

Exemplary damages (the common law equivalent of punitive damages) may be awarded under the Arbitration Ordinance, but in practice this is extremely rare.

What interim measures are available? Will local courts issue interim measures pending constitution of the tribunal?

The court may order interim measures requiring a party to:

maintain or restore the status quo pending determination of the dispute;take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitration proceedings;provide a means of preserving assets out of which a subsequent award may be satisfied; orpreserve evidence that may be relevant and material to the resolution of the dispute (Section 45).

On the application of any party, the court may, in relation to any arbitration proceedings which have been or are to be commenced in or outside HongKong, grant an interim measure (Section 45).

Interest
Can interest be awarded?

Unless otherwise agreed by the parties, the tribunal may award simple or compound interest from the dates and at the rates it considers appropriate (Section 79 of the Arbitration Ordinance).

The Arbitration Ordinance provides that interest is payable on money awarded by the tribunal from the date of the award, except where otherwise provided by the tribunal. Similarly, interest is payable on costs awarded from the date of the order on costs, unless otherwise provided by the tribunal.

At what rate?

Interest is to be paid at the judgment rate (Section 80 of the Arbitration Ordinance). This is the rate of judgment determined in compliance with Section 49(1)(b) of the High Court Ordinance (Cap 4).

Finality
Is the award final and binding?

Unless otherwise agreed by the parties, an award made by a tribunal pursuant to an arbitration agreement is final and binding both on the parties and on any person claiming through or under any of the parties (Section 73 of the Arbitration Ordinance).

What if there are any mistakes?

Within 30 days of receipt of the award, unless another period has been agreed upon by the parties, a party may request the tribunal to:

correct any computational, clerical or typographical errors or any errors of similar nature in the award;provide an interpretation of a specific point or part of the award; ormake an additional award as to claims presented in the arbitration proceedings but omitted from the award (Section 69).

Can the parties exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?

The parties cannot agree to exclude any basis of challenge under the Arbitration Ordinance.

Appeal
On what grounds can parties appeal an award?

Section 81 of the Arbitration Ordinance provides that an award may be challenged and set aside where the party making the challenge can prove that:

a party to the arbitration was under some incapacity;the arbitration agreement is invalid under the law to which the parties subjected it or, failing any indication in the agreement as to which law the agreement is subject to, under the law of HongKong;the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitration, or was otherwise unable to present its case;the award deals with a dispute not contemplated by the terms of the submission to arbitration or contains a decision on matters not contemplated by the terms of the submission to arbitration (if it is possible to separate the relevant parts of the award, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside); orthe composition of the tribunal or the arbitration proceedings did not accord with the agreement of the parties, unless such agreement conflicted with a provision of the Arbitration Ordinance.

Alternatively, the court can set aside the award if it finds that the subject matter of the dispute is not capable of settlement by arbitration under the law ofHong Kong or if the award conflicts with the public policy of the Hong Kong.

What is the procedure for challenging awards?

An application to the court under Section 81 of the Arbitration Ordinance to challenge and set aside an award must be made within three months of the date on which the party making the application received the award (Section 81 of the Arbitration Ordinance). The application is made by originating summons in accordance with Order 73, Rule 1 of the Hong KongRules of the High Court (Cap 4A).

Enforcement
What steps can be taken to enforce the award if there is a failure to comply?

Where an unsuccessful party fails and/or refuses to comply with an award, the successful party will most likely need to seek the assistance of the court to enforce the award.

Can awards be enforced in local courts?

Section 84 of the Arbitration Ordinance provides that an award issued in relation to arbitration proceedings by a tribunal is enforceable in the same way as a judgment of the court, but only with the leave of the court. Leave is also required for any appeal of a decision of the court to grant or refuse leave to enforce an award.

Enforcement procedures under the Arbitration Ordinance depend on whether the award is:

a local Hong Kong award;an award made in mainland China;an award made in a country which is a signatory to the New York Convention; oran award made in some other country.

Section 85 of the Arbitration Ordinance requires that the party seeking to enforce an arbitral award which is neither a convention award nor a mainland China award must produce the original or a certified copy of the award, the arbitration agreement and, if relevant, any necessary translations.

The courts may refuse to enforce an award under Section 86 of the ordinance for similar reasons as are set out in Article 34 of the UNCITRAL Model Law for the setting aside of an award. If the parties have opted in to the additional clauses in Schedule 2 to the ordinance, these will also provide grounds for refusal of enforcement.

How enforceable is the award internationally?

While Hong Kong is a signatory to the New York Convention by virtue of China’s accession to the convention, whether an award is enforceable internationally will depend on the domestic laws where the award is sought to be enforced.

To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

This will depend on the merits of the case.

Are there any other bases on which an award may be challenged, and if so, by what?

Whereas the grounds for refusing to enforce an award in Hong Kong under the Arbitration Ordinance largely mirror those of the New York Convention, Section 86(2) of the Arbitration Ordinance gives the court discretion to refuse enforcement of an award for any other reason that the court considers just.

How enforceable are foreign arbitral awards in your jurisdiction?

Arbitration awards made by non-New York Convention states and territories are still enforceable in Hong Kong at the discretion of the Hong Kongcourts (Section 84 of the Arbitration Ordinance).

Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?

This will depend on the merits of the case.

Third-party funding

Rules and restrictions
Are there rules or restrictions on third-party funders?

In Hong Kong, laws regarding champerty and maintenance generally prohibit third-party litigation funding. The position concerning arbitration is not so clear and in June 2013 a sub-committee was set up by the Hong Kong Law Reform Commission to review the current position.

Class-action or group arbitration

Concept
Is there a concept in your jurisdiction providing for class-action arbitration or group arbitration? If so, are there any limitations to the arbitrability of such claims or requirements that must be met before such claims may be arbitrated?

There is currently no class-action regime supported by Hong Kong law. However, in January 2014 the Department of Justice established a working group to consider the Hong Kong Law Reform Commission’s proposals regarding class actions.

Hot topics

Emerging trends
Are there any hot topics or trends emerging in arbitration in your jurisdiction?

Not at the time of writing.

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