Allen & Overy hosts London stop of HKIAC Road Show
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09 July 2014
On 30 May 2014, Allen & Overy hosted the London leg of the Hong Kong International Arbitration Centre’s (HKIAC) Road Show, showcasing its new 2013 Administered Arbitration Rules (the 2013 Rules).
Hong Kong is rising to the challenge as a modern centre for international arbitration
The committee that drafted the 2013 Rules was chaired by the Global Co-Head of Allen & Overy’s International Arbitration Group, Matthew Gearing QC, who is based in Hong Kong.
Allen & Overy Counsel Angeline Welsh, who has practised in both London and Hong Kong, spoke about the dynamism of the arbitration market in Asia, where international arbitration is fast becoming the preferred dispute resolution procedure, including for some sectors that have been slow to embrace international arbitration in the West, such as financial institutions. Angeline explained that the rising popularity of international arbitration in Asia has seen arbitration centres emerge that are now as well respected as those in the West. Hong Kong, and the HKIAC, has played an important role in this, although Singapore is also vying for the title of leading arbitration centre in the region, with Malaysia close behind. Angeline noted two developments in particular:
• Secondly, the 2013 Rules include provisions that reflect most of the current key issues in arbitral procedure, including the joinder of third parties, consolidation of arbitration claims and the use of emergency arbitrators.
Arbitral Trends – The HKIAC Perspective
Ruth Stackpool-Moore and Adiyta Kurian, respectively Managing Counsel and Counsel at the HKIAC, spoke about the key arbitral trends seen by the HKIAC over the past five years.
These included:
1. an increase in the use of the HKIAC’s administered rules, with a corresponding move away from ad hoc arbitration;
2. more parties making their own arbitrator appointments, rather than relying on the institution to appoint;
3. an increasing number of disputes relating to complex transactions, often involving multiple parties and contracts; and
4. a growing uptake in the use of its expedited arbitration procedure.
Friven Yeoh, partner at O’Melveny & Myers in Hong Kong, observed that although it was unsurprising, given its location and the fact that the use of arbitration is strongly encouraged in Asia, that the HKIAC sees a large number of Asian parties to arbitrations it administers, the increasing use of the HKIAC by non-Asian parties was striking. It suggests that there has been a shift in the balance of power between Asian and non-Asian parties, so that the Asian parties were in a stronger position to negotiate an Asian seat of arbitration. Friven also took the opportunity to address the concern sometime voiced that, as a Chinese city, the choice of Hong Kong as an arbitral seat may give rise to neutrality concerns for non-Chinese parties. Friven argued that a tribunal seated in Hong Kong could be as international as the parties want it to be and noted that Hong Kong has a well-respected and independent judiciary, with a pro-arbitration reputation.
A mock arbitration
The application for consolidation turned on Article 28.1(c) of the 2013 Rules, which gives the HKIAC the power to consolidate two or more arbitrations where:
“the claims are made under more than one arbitration agreement, a common question of law of 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”.
The mock application allowed a number of potential issues under Article 28.1(c) to be tested, including how much commonality between claims is required to give rise to “a common question of law or fact”, and how similar the arbitration agreements had to be for them to be “compatible”. Does it matter, for example, if the seat is stated to be Hong Kong in one arbitration agreement, while the other is silent as to the seat? And of what relevance – if any - is it if one arbitration agreement provides for proceedings in Chinese and English, while the other provides for the arbitration to be conducted solely in English?
The mock application provided a practical and entertaining way to see one aspect of the HKIAC’s 2013 Rules in action and prompted a number of questions from the floor as to the exact scope and flexibility of the Rules on the issue of consolidation. It left the audience with food for thought during the drinks and nibbles that followed.
After London, the HKIAC Road Show continued to New York and forthcoming stops include Singapore and Mumbai.