INTRODUCTION TO HONG KONG ARBITRATION AND THE HKIAC

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HKIAC in the Americas Navigating Dispute
Resolution in Asia

Chiann Bao, Secretary General, HKIAC
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Asia Latin America Trade
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Chinas Global Reach

• Chinese Outbound investment rose 14 to US77.2
  billion in 2012.
• China now holds the no 3 spot in global outbound
  investment rankings, behind the US and Japan, up
  from 16 place in 2011

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Chinas Global Reach United States
According to the Bureau of Economic Analysis,
annual outbound direct investment from China to
the U.S. has grown by more than 300 since 2007
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Chinas Global Reach Latin America

• In 2012, the value of bilateral trade increased,
  amounting to USD240 billion
• China - the third largest investor
• China is the major importer of Latin American raw
  materials

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HKIAC in the Americas
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HKIAC in the Americas
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Overview of Hong Kong and HKIAC
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Overview

• Seat of Arbitration Hong Kong
• Pro-Arbitration Legislative Framework
• Independent Arbitration-Friendly Judicial
  System
• Arbitral Institution Rules HKIAC
• About HKIAC
• HKIAC Administered Arbitration Rules
• HKIAC Arbitrators

Asias Prime Location for Dispute Resolution
Services www.hkiac.org
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HK Arbitration Ordinance

• Effective 1 June 2011 (HK Ordinance Cap.609)
• Previous statutes were based on a split regime
  an international regime, based on the UNCITRAL
  Model Law, and a domestic regime
• New Arbitration Ordinance unifies the two regimes
• More user-friendly
• Effectively extends the application of the
  UNCITRAL Model Law to all arbitrations in Hong
  Kong

Asias Prime Location for Dispute Resolution
Services www.hkiac.org
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HK Arbitration Ordinance

• Ease of Use
• Clear, certain and accessible arbitration law
  based on the Model Law
• Confidentiality
• Protection of confidentiality in arbitration
  proceedings and related court hearing
• Discovery
• Reasonable no automatic right to discovery
• Interim Measures
• Expanded provisions on interim measures
• Costs
• Assessment and taxation of costs and review of
  fees and expenses by courts

Asias Prime Location for Dispute Resolution
Services www.hkiac.org
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HK Judicial System

• One country, Two systems
• Independent and based on Rule of Law
• Court of Final Appeal an expatriate judge will
  sit as one of the 5 members of the Panel
• No concerns of a PRC home court advantage as
  the HK Court of Final Appeal has adjudication
  power fully independent of the PRC Supreme Court.
• Pro-Enforcement

Asias Prime Location for Dispute Resolution
Services www.hkiac.org
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Enforcement of Arbitral Awards

• New York Convention for the Recognition and
  Enforcement of Arbitral Awards
• Arrangement Concerning Mutual Enforcement of
  Arbitral Awards Between the Mainland and the Hong
  Kong SAR

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HKIAC Overview

• Established in 1985, independent and non-profit
  organisation
• 25 Council Members Board of Directors
• 20 full-time staff
• International and multilingual Secretariat
  representing both common law and civil law
  traditions
• 300 arbitrators, 500 mediators

Asias Prime Location for Dispute Resolution
Services www.hkiac.org
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Role of the HKIAC

• Administrator of arbitrations, mediations and
  domain name disputes
• Appointing authority under the Hong Kong
  Arbitration Ordinance
• Determine number of arbitrators
• Appoint arbitrator(s)
• Appoint mediator
• Hearing center for arbitrations and mediations
• Fundholder for arbitrations
• Administration center for arbitration institutes
  based in Hong Kong
• Chartered Institute of Arbitrators (East Asia
  Branch)
• Hong Kong Institute of Arbitrators
• Society of Construction Law

Asias Prime Location for Dispute Resolution
Services www.hkiac.org
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HKIAC Arbitration Institutional Ad Hoc

• Institutional Arbitration
• HKIAC Administered Arbitration Rules (2008, to be
  amended in 2013)
• Procedures for the Administration of
  International Arbitration (2005)
• Ad Hoc Arbitration
• Form 1 2 applications (to determine number of
  arbitrators and appointment of arbitrators)

Asias Prime Location for Dispute Resolution
Services www.hkiac.org
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HKIAC Administered Arbitration Rules (2008)

• Key Features
• Flexible Fees
• Competitive Costs
• Light Touch Approach
• Expedited Procedures

Asias Prime Location for Dispute Resolution
Services www.hkiac.org
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HKIAC Administered Arbitration Rules Fees
and Costs

• Arbitrators Fees - parties have a choice of
  agreeing to either
• (a) the Schedule of Fees attached to the Rules
  or
• (b) a separate fee arrangement.
• Registration Fee - US1,000
• Administrative Fees - Schedule of Fees attached
  to the Rules
• Administered fees are based on the value of the
  claim(s) and counterclaim(s) and capped at
  US26,850.

Asias Prime Location for Dispute Resolution
Services www.hkiac.org
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Cost Comparison Administrative Fees
Disputed Amount (US) HKIAC ICC KCAB KLRCA SIAC
500,000 4,250 14,165 3,155 6,500 5,809
5,000,000 11,850 45,015 23,900 14,500 16,827
10,000,000 14,850 57,515 44,371 19,500 21,212
50,000,000 26,850 95,515 122,984 30,000 39,872
100,000,000 26,850 99,215 131,010 30,000 39,872
Asias Prime Location for Dispute Resolution
Services www.hkiac.org
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HKIAC Statistics

• In 2012, HKIAC handled a total of 456 dispute
  matters
• 293 arbitration
• 116 domain name disputes
• 47 mediation disputes
• Of the 293 arbitration cases handled by the HKIAC
  in 2012,
• 68 were international
• 32 were domestic
• 68 cases were fully administered by the HKIAC in
  accordance with its Rules
• The total amount in dispute for administered
  cases was approximately US1.8 billion

Asias Prime Location for Dispute Resolution
Services www.hkiac.org
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HKIAC International Arbitration
212
199
178
173
175
139
Asias Prime Location for Dispute Resolution
Services www.hkiac.org
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Panel/List of Arbitrators

• HKIAC Panel of Arbitrators -300
• HKIAC List of Arbitrators - 90
• http//www.hkiac.org/index.php/en/arbitrators

The HKIAC Online Searchable Database allows
parties to search for arbitrators by way of
nationality, professional background and areas of
expertise, thereby ensuring the appropriate
appointment for their dispute.
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HKIAC Administered Arbitration Rules (2013)
Proposed Amendments

• Key Changes
• Emergency arbitrator provision
• HKIACs prima facie power to join additional
  parties
• HKIACs power to consolidate arbitrations
• Enhanced system to determine number of
  arbitrators, including aHK6,500 cap on
  arbitrators hourly rate
• Robust expedited procedure

Asias Prime Location for Dispute Resolution
Services www.hkiac.org
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THANK YOU
Website www.hkiac.org Address 38th Floor, Two
Exchange Square Central, Hong Kong Tel No.
(852) 2525 2381 Fax No. (852) 2524
2171 Email adr_at_hkiac.org