For the first time since 2018, Hong Kong International Arbitration Centre (HKIAC) has updated its flagship HKIAC Administered Arbitration Rules (Rules) which will take effect on 1 June 2024. The key changes include:

1. Enhancing efficiency of the arbitration process by giving HKIAC power to remove an arbitrator who cannot fulfil his/her functions (Article 13.10); granting express power to the tribunal to determine preliminary issues (Article 13.6); and prescribing stricter timeline for closure of proceedings and rendering of award (Articles 31.1 & 31.2).
2. Keeping up with social norms, taking diversity into account when it comes to arbitrator appointments (Article 9A); requiring compliance with information security (Articles 13.1 & 45A); and requiring consideration given to environmental impact in procedures (Article 13.1) and arbitration costs(Article 34.4).
3. Other refinements such as widening the scope of electronic communications (Article 3.1); aligning the consequential effect of proper commencement of a single arbitration under multiple contracts with that of a decision to consolidate two or more arbitrations (Article 29.2); and clarifying provisions relating to costs (Articles 35.1 & 35.3).

Since the last amendment to the Rules in 2018, HKIAC's statistics have shown a continuous growth of the number, amount and diversity of parties. In the latest statistics for 2023, HKIAC reported record new amounts in disputes across all arbitrations.¹

Indeed, the 2018 version of the Rules already laid down the foundation for effective and efficient conduct of arbitrations. Compared to the 2018 version – which introduced significant amendments such as early determination, third-party funding, emergency arbitration and improvements on multiple contracts and arbitrations – the current 2024 version, as HKIAC puts it, is largely a "refinement" to arbitration rules already widely recognised as market-leading.

Details of the key changes include:

1. Written communications (Article 3.1(f)).In addition to existing written communication methods such as email, facsimile, courier and secured online repository, the method of "any other form of electronic communication that the parties have agreed to use, subject to approval by HKIAC and the arbitral tribunal, once constituted" is added, allowing parties greater flexibility in light of the fast pace of change in instant messaging technology.
2. Diversity in appointment (Article 9A). Under this new Article, parties and co-arbitrators are encouraged, and HKIAC is required to take diversity into consideration when it comes to arbitrator designation or appointment (as the case may be). This change again reflects HKIAC's continued efforts to fulfil its pledge to improve the equal representation in arbitration (ERA Pledge) since 2016.
3. Information security (Article 13.1 & 45A). The new Article 45A allows parties to agree on reasonable measures to protect shared, stored or processed information. The tribunal is empowered to provide directions to the parties on safeguarding the security of such information, considering specific circumstances of the case. In the event of any breach of the agreed-upon or tribunal-directed information security measures, after consulting with the parties the tribunal may issue a decision, order or award to address the breach. This is an important tool to protect parties' interests in today's complex legal and regulatory environment relating to data security and cross-border data transfer. For discussion on this, please refer to our previous article in this link:https://www.mayerbrown.com/en/insights/publications/2024/01/cross-border-transfer-of-evidence-from-mainland-china-under-international-commercial-dispute-resolution-scenarios
4. Environmental impact (Article 13.1 & 34.4(f)). The tribunal is required to consider environmental impact when adopting suitable procedures for the conduct of the arbitration. When considering whether costs incurred are reasonable and whether and how to apportion costs between parties, one of the factors for tribunal consideration now includes any adverse environmental impact arising from parties' conduct in the arbitration. This move to a ‘greener arbitration’ clearly echoes global ESG initiatives widely adopted by almost all nations and industries to combat challenges faced by our communities.
5. Further express case management powers (Article 13.6). In addition to the existing power of early determination, the tribunal, after consulting with the parties, is also empowered to adopt procedures enhancing efficiency in deciding the case. Such procedures may include: determining preliminary issues that the tribunal considers could dispose of all or part of the case; bifurcating the proceedings; conducting the arbitration in sequential stages; and deciding the stage of the arbitration for determining any issue(s).
6. Avoiding conflict of interest (Article 13.9). After consulting with the parties, the tribunal is empowered to take any measure necessary to avoid a conflict of interest arising from a change in party representation, including by excluding a proposed new party representative from participating in the proceedings.
7. Preserving efficiency or integrity (Article 13.10). HKIAC has the power, after consulting with the parties and the tribunal, to take any measure necessary to preserve the efficiency or integrity of the arbitration, including revoking the appointment of any arbitrator in exceptional circumstances where the arbitrator is prevented from or has failed to fulfil his or her functions.
8. Single arbitration under multiple contracts (Article 29.2). This sub-article is added to clarify that where HKIAC decides that a single arbitration under multiple contracts has been properly commenced, the parties shall be deemed to have waived their rights to designate an arbitrator. This brings the arrangement in line with the position of a successful consolidation of two or more arbitrations under Article 28.8.
9. Closure of proceedings and prescribed time limit for rendering award (Articles 31.1 & 31.2). The tribunal is required to declare closure of the proceedings or relevant phase of the proceedings no later than 45 days from the last directed substantive oral or written submissions. From such closure, the date of rendering the award shall be no later than three months, subject to extensions by agreement of the parties or by HKIAC under Article 31.2.
10. Costs of arbitration (Articles 34.1 & 34.4). Article 34.1 now includes costs of Emergency Relief proceedings as part of the "costs of the arbitration". The new Article 34.4 sets out factors as to whether costs are reasonable, and whether and how to apportion the costs of the arbitration, including: the relative success of the parties; scale and complexity of the dispute; conduct of the parties; any third party funding arrangement or outcome-related fee structure agreement; and/or any adverse environmental impact arising out of the parties' conduct.

As acknowledged in the published Rules², Mayer Brown's Raymond Yang, Johnson Ng and Emily Chen contributed to the process of revising the Rules by providing comments on the draft Rules.

1. https://www.hkiac.org/news/hkiac-releases-statistics-2023

2. https://www.hkiac.org/news/hkiac-releases-2024-administered-arbitration-rules-effective-1-june-2024

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