International arbitration law and rules in Hong Kong

Hong Kong is probably the only city in the world with three leading international arbitral institutions. These are HKIAC, CIETAC (with its CIETAC Hong Kong Arbitration Centre (CIETAC HKAC)), and ICC (with its ICA8 secretariat).

1.1.1 Hong Kong has a long-standing reputation as one of the most preferred seats for commercial arbitration. This is largely due to its modern arbitration regime, neutral and impartial judiciary, positive track record in the enforcement of arbitration agreements and arbitral awards, and world-class legal services. In addition, extensive government support in promoting Hong Kong’s arbitration services has attracted world-class arbitration institutions, namely the International Court of Arbitration of the International Chamber of Commerce (ICC) and the China International Economic Trade and Arbitration Commission Hong Kong Arbitration Centre (CIETAC-HKAC), to open up regional offices in Hong Kong. These international arbitral institutions join the Hong Kong International Arbitration Centre (HKIAC), Hong Kong’s home-grown arbitration institution, in offering international arbitration services to users worldwide.

1.1.2 The HKIAC administers arbitrations under its own set of institutional arbitration rules and under the UNCITRAL Arbitration Rules. The current version of the HKIAC Administered Arbitration Rules (HKIAC Rules), which took effect on 1 June 2024, improves on the previous rules that were in force since 2018. The revisions follow an extensive consultation process and introduce substantial improvements designed to enhance the efficiency and integrity of arbitration proceedings. Key innovations include new powers and responsibilities for the HKIAC and arbitral tribunals specifically aimed at preventing disruptive party tactics and ensuring swift, cost-effective dispute resolution. Notably, the HKIAC now has the authority to take any measures necessary to preserve the efficiency or integrity of the arbitration process. 1  This includes the power to revoke, in exceptional cases, the appointment of an arbitrator who fails to fulfil their duties and increased powers to review arbitrators’ fees. 2  In addition, for the first time, the new HKIAC Rules, explicitly address diversity, environmental impact, and information security. 3

1.1.3 The enactment of the Hong Kong Arbitration Ordinance (Cap. 609) (Arbitration Ordinance), effective from 1 June 2011, has further increased Hong Kong’s attractiveness as an arbitration venue. The Arbitration Ordinance, which replaced the previous Arbitration Ordinance (Cap. 341), unifies the legislative regimes for domestic and international arbitrations in Hong Kong on the basis of the Model Law on International Commercial Arbitration of the United Nations Commission on International Trade Law (Model Law) with modifications tailored for Hong Kong. 4  With the enactment of the Arbitration Ordinance, Hong Kong’s arbitration law is clear, certain, and easily accessible to arbitration users and practitioners worldwide.

1.1.4 Additionally, the Hong Kong government has actively pursued a number of initiatives to promote arbitration. These initiatives include:

• legislation allowing third party funding for arbitrations;
• legislation on the arbitrability of intellectual property right disputes;
• an arrangement with the Permanent Court of Arbitration (PCA) under which disputes administered by the PCA can be conducted in Hong Kong on an ad hoc basis;
• the Arrangement Concerning Mutual Enforcement of Arbitral Awards Between the Mainland and the Hong Kong SAR, which makes it simpler to enforce Hong Kong awards in Mainland China;
• the Arrangement Concerning Mutual Assistance in Court-Ordered Interim Measures in Aid of Arbitral Proceedings, which makes Hong Kong the only jurisdiction where parties to arbitral proceedings can apply directly to Mainland Chinese courts for interim measures;
• a pilot scheme on Facilitation for Persons Participating in Arbitral Proceedings in Hong Kong (launched in June 2020), allowing arbitrators, counsel, parties, expert and factual witnesses from about 170 jurisdictions to participate in arbitration proceedings in Hong Kong as visitors without obtaining employment visas; 5  and
• Outcome-Related Fee Structures for Arbitration (ORFSA): Hong Kong has implemented one of the world’s most expansive legal success fee frameworks for arbitration. 6  This marks a significant shift from Hong Kong's previous regulations, where such success-based fee agreements were barred under law and professional conduct rules. The new regime allows Hong Kong-based lawyers to charge success fees for arbitrations, regardless of whether the arbitration is seated within or outside Hong Kong. Lawyers and clients from outside Hong Kong are also eligible to use these fee structures when they engage in arbitrations that are seated in Hong Kong. The ORFSA framework permits a variety of fee options, including conditional fee agreements (CFAs), damages-based agreements (DBAs), and hybrid damages-based agreements, 7  thereby broadening the scope for lawyers and clients to negotiate terms that align with the financial and strategic interests of both parties.

1.1.5 Further, Hong Kong’s strategic location, business environment and legal expertise have also enhanced its status as one of the most viable seats for settling disputes arising from China’s Belt & Road Initiative, an initiative supported by the Hong Kong government.

1.1.6 Finally, Hong Kong has practically no restriction on foreign law firms engaging in and advising on arbitration in Hong Kong. Parties involved in arbitration may retain advisers without restrictions as to their nationalities and professional qualifications. This provides parties with premium support for disputes involving international parties and legal frameworks.

1.2.1 Arbitration has a long-standing history in Hong Kong.

1.2.2 Hong Kong’s first law on arbitration was Ordinance 6 of 1844 (Ordinance 6). This ordinance authorised the governor of Hong Kong to refer all civil actions and suits to arbitration. 8  This extraordinary power vested in the governor was disallowed shortly thereafter by the British Colonial Office. However, with the enactment of the Civil Administration of Justice (Amendment) Ordinance 1855, the same power to refer disputes to arbitration was granted to the Hong Kong courts. 9

1.2.3 As Hong Kong continued to develop under British rule, the laws of arbitration enacted and applied in England were also applied in Hong Kong. When in 1963 the Arbitration Ordinance (Cap 341) was enacted in Hong Kong, adopting unitary arbitration regime for both domestic and international cases, this was largely in emulation of the UK Arbitration Act 1950. 10

1.2.4 This trend took a distinctive turn in 1989 when Hong Kong adopted the Arbitration (Amendment) (No. 2) Ordinance 1989 (64 of 1989). This ordinance implemented the Law Reform Commission Report 1987 and adopted the Model Law.The ordinance applied solely to international arbitrations, whereas domestic arbitration remained governed by the 1963 the Arbitration Ordinance (Cap 341).  11

1.2.5 In 1996, a new arbitration ordinance was implemented in Hong Kong. The Arbitration (Amendment) Ordinance 1996 (75 of 1996) introduced a number of provisions that applied to both domestic and international arbitrations. 12  While this ordinance reverted back to and partially reflected English law, it began the process of harmonising Hong Kong’s domestic and international arbitration laws by using the Model Law as a common ground. Nevertheless, separate regimes for the conduct of domestic and international arbitrations in Hong Kong remained in place.

1.2.6  In 2007, following a series of reports and consultations, the Hong Kong Department of Justice (DoJ) published a Consultation Paper on the Reform of the Law of Arbitration in Hong Kong and draft Arbitration Bill for public consultation. 13  The draft Arbitration Bill was distributed to over 60 entities (including arbitration institutions, representatives of the legal profession, academic institutions, government bureaux, public authorities, and private organisations) during the consultation period and over 40 responses were submitted. 14

1.2.7 A working group appointed to work with the DoJ reviewed all of the responses and made recommendations. The DoJ, taking into consideration these recommendations, revised the draft Arbitration Bill and submitted a new draft to the Legislative Council in 2009. Following subsequent additional revisions, the Arbitration Ordinance was enacted in 2011.

1.2.8 The purpose of the reform of the Arbitration Ordinance was to attract arbitration users to Hong Kong by:

• making the law of arbitration more user-friendly;
• establishing an arbitration regime in line with widely accepted international arbitration practices familiar to practitioners from both Civil and Common law jurisdictions; and
• promoting Hong Kong as a regional centre for dispute resolution. 15

2.1.1 The Arbitration Ordinance applies to all arbitrations in Hong Kong, whether domestic, international, ad hoc, or institutional arbitration.

2.1.2 Although the Arbitration Ordinance provides for a unified regime for domestic and international arbitrations, Schedule 2 provides a set of specific rules designed for domestic arbitrations. Schedule 2 was included in the Arbitration Ordinance to respond to concerns from the Hong Kong construction industry, preserving key elements previously exclusive to domestic arbitration setting. These elements include the default appointment of a sole arbitrator where there is no party agreement, the power of the Hong Kong courts to consolidate multiple arbitrations under certain circumstances, the referral of preliminary questions of law to the courts, the challenge of arbitral awards on the grounds of “serious irregularity”, and the appeal of arbitral awards to the courts on questions of law.

2.1.3 Schedule 2 applies either if the parties expressly agree so or if the arbitration agreement has been concluded before or within six years of the Arbitration Ordinance's effective date that is, before 1 June 2019, provided that the arbitration agreements states that the arbitration is domestic. Outside of what is stipulated in the arbitration agreement, there is no separate test to classify an arbitration as domestic or international.

A clear, certain, accessible arbitration law based on the Model Law

2.2.1 The Arbitration Ordinance is self-contained and comprehensively regulates all issues relevant to both domestic and international arbitration. It provides a user-friendly and accessible interface as it sets out the Model Law provisions in the main body with modifications set out before each provision. This is a significant improvement on its predecessor, where users had to consult a schedule to find the provisions of the Model Law. 16

Wide interpretation of the written requirements for arbitration agreements

2.2.2 The Arbitration Ordinance has been updated to reflect advancements in technology and the increased use of electronic communications. The requirement that an arbitration agreement should be in writing has been broadened to encompass electronic forms of communication, as well as circumstances where a “written instrument” can be construed. 17

Enforceability of interim measures

2.2.3 The courts of Hong Kong are authorised under the Arbitration Ordinance to recognise and enforce interim measures ordered by an arbitral tribunal seated in or outside Hong Kong. 18  In addition, the courts can grant interim relief in aid of arbitral proceedings seated outside of Hong Kong without the requirement that the relief sought must be incidental to substantive proceedings commenced in Hong Kong. 19

Enforceability of emergency relief

2.2.4 Hong Kong is one of the few jurisdictions where emergency arbitration is expressly recognised by legislation. Sections 22A and 22B of the Arbitration Ordinance recognise the authority of an emergency arbitrator appointed under a set of arbitral rules, provide for the enforcement of emergency relief granted by an emergency arbitrator appointed by the parties before the constitution of the arbitral tribunal, and empower the courts to turn any interim relief granted by an emergency arbitrator into court judgments on the same terms. The introduction of emergency relief powers into the Arbitration Ordinance enhances Hong Kong’s arbitration regime by making it clear that emergency relief is recognisable under law and enforceable by the judiciary.

Confidentiality of arbitration proceedings and related court proceedings

2.2.5 Hong Kong is one of the few jurisdictions with express legislative provisions on confidentiality. 20 The Arbitration Ordinance requires the parties’ express agreement for publication, disclosure, or communication of information related to the arbitral proceedings or an arbitral award subject to very limited exceptions. Additionally, court proceedings in Hong Kong relating to arbitration will not be heard in open court unless a party making the request for open court can show good reasons for such request. 21

Minimal court intervention

2.2.6 In line with the fundamental principle of party autonomy, the Arbitration Ordinance gives parties freedom to agree on how a dispute should be resolved with minimal court supervision and intervention. Hong Kong’s courts may intervene in an arbitration only in circumstances that are expressly provided for in the Arbitration Ordinance. 22  The primary role of the Hong Kong courts is to facilitate the arbitral process and assist with the enforcement of arbitral awards.  23

3.1.1 Section 19 of the Arbitration Ordinance governs the definition and form of an arbitration agreement. Although the Arbitration Ordinance is based on the Model Law, the definition of a valid arbitration agreement under Hong Kong law is broader than the definition under the Model Law.

3.1.2 Section 19(1) of the Arbitration Ordinance mirrors Option I of Article 7 of the Model Law. It provides a definition of an arbitration agreement and of the requirements for it to be in writing. These requirements are very broad, allowing the arbitration agreement to be recorded in any form even where the actual agreement was made orally or by conduct. 24 Parties may further agree to arbitration through electronic communication, 25   or if the agreement is contained in an exchange of statements of claim and defence, in which the existence of an arbitration agreement is alleged by one party and not denied by the other. 26

3.1.3 Section 19(2) of the Arbitration Ordinance provides that an arbitration agreement that is recorded in writing will be found to be valid even if the underlying written agreement is not signed by the parties (the doctrine of separability). Further, an agreement to arbitrate that has been recorded, with the authority of the other party, in a form other than in writing (ie orally) will also be recognised as valid. 

3.1.4 Section 19(3) of the Arbitration Ordinance further broadens the definition of an arbitration agreement by including agreements that are incorporated by reference from other documents. Such agreements to arbitrate, however, must be in writing, while the underlying agreement containing this reference does not.

3.1.5 While Hong Kong still requires that an arbitration agreement be “in writing”, the term “writing” is broadly defined and includes an arbitration agreement recorded in any form. This agreement can be concluded orally, by conduct, or by other means. Thus, the “writing” requirement is relaxed and in line with modern developments in contract formation and advances in means of communication.

3.2.1 Hong Kong law recognises the doctrine of separability.

3.2.2 Section 34 of the Arbitration Ordinance adopts Article 16(1) of the Model Law and provides that an arbitral tribunal may rule on its own jurisdiction, including on any objections with respect to the existence or validity of the arbitration agreement. For this purpose, an arbitration agreement which forms part of a contract shall be treated independently from other provisions of the contract. Hence, a decision by the arbitral tribunal that the underlying contract is null and void does not (automatically) render the arbitration agreement invalid.

Law governing the arbitration agreement

3.3.1 It follows from the doctrine of separability that the governing law of the underlying agreement does not necessarily govern the arbitration agreement itself. Courts in Hong Kong have not laid down a strict rule on the applicable law. However, the courts in Hong Kong have recognised that the law governing the contract, the law of the place of arbitration (lex arbitri) and the law governing the arbitration agreement may be different.  27  Generally, if there is no evidence of the parties’ intentions or an express governing law provision, then the court will apply to the arbitration agreement the law of the arbitral seat. As such, arbitral institutions such as the HKIAC suggest as a matter of best practice,  model arbitration clauses that clearly provide for a designated law applicable to the arbitration agreement. 28

Arbitrability and restrictions on arbitration

3.3.2 Some types of disputes are not arbitrable in Hong Kong. These include disputes that:

• affect the rights of third parties or rights enforceable against the world at large;
• are reserved exclusively for the courts (ie criminal cases, divorce, guardianship applications);
• concern administrative law matters such as taxation and immigration;
• are against public interest if submitted to arbitration; and
• concern employee statutory compensation; 29

3.4.1 Where there is a legally binding arbitration agreement, the parties are bound to submit their dispute to arbitration and the courts of Hong Kong are obligated to refer the parties to arbitration. 30  This obligation of courts to refer parties to arbitration is subject to certain preconditions laid out in Article 20 of the Arbitration Ordinance in particular for labour and admiralty proceedings.

3.5.1 In a recent case of note, the Hong Kong Court of Appeal addressed the issue of the effect of pre-arbitration procedural requirements contained in an arbitration agreement. In the case at hand, this concerned escalation clauses – contractual terms that contain a multi-step approach, often requiring parties to attempt negotiation or mediation (or another preliminary step such as management consultations) before initiating formal arbitral proceedings. The court was confronted with the issue of whether an arbitral tribunal's determination that such an agreement had been fulfilled is subject to review by the courts. 31

3.5.2 Drawing on case law and legal scholarship, the Court of Appeal ruled that challenges under Article 34(2)(a)(iii) of the Model Law, pursuant to which an award may be set aside by state courts if it "deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration", should be based on objections to jurisdiction rather than objections to admissibility. 32  The court went on to observe that not all objections to the non-fulfilment of conditions precedent can be considered jurisdictional. Instead, the court determined that the issue hinges on whether the parties intended the question of whether the condition precedent had been fulfilled to be resolved by the arbitral tribunal, and thus to fall “within the terms of the submission to arbitration” under Article 34(2)(a)(iii) of the Model Law. 33

3.5.3 The court concluded that the objection in question, namely as to the non-fulfilment of the escalation clause, was an objection to the admissibility of the claim and, thus, not subject to court review under Article 34(2)(a)(iii) of the Model Law. This was because it was ultimately an objection that the claim was brought prematurely and, as such, was aimed “at the claim' instead of 'at the tribunal”. 34  The court added, “for the sake of completeness”, that it would have reached the same result even disregarding the distinction between admissibility and jurisdiction, since the (non-)fulfilment of the escalation clause had fallen “within the terms of the submission to arbitration”. 35  Citing UK precedent, 36  the court held that it was reasonable to assume that the parties, as sensible business people, would want any conflicts stemming from their relationship to be resolved by the same tribunal. 37  Accordingly, all related disputes should be submitted to arbitration, unless they were explicitly excluded under wording of the arbitration clause. 38  Since no such exclusion was found in the parties' arbitration clause, the parties had intended to refer their dispute concerning the escalation clause to arbitration.

3.5.4 Besides clarifying the legal nature of escalation clauses, the Court of Appeal's decision will have a reassuring effect on parties by confirming that disputes concerning such clauses can be resolved within the arbitration, rather than through external challenges before the courts. The decision is also reflective of the pro-arbitration stance of Hong Kong courts in general, while aligning with an increasing international trend toward reducing judicial intervention in arbitration, and is expected to guide future jurisprudence on this issue also in other common law jurisdictions.

4.1.1 Number of arbitrators

Parties are free to decide on the number of arbitrators or have a third party determine the number. There are no limitations on the number of arbitrators that the parties are permitted to agree. If there is no agreement, the HKIAC (which under the Arbitration Ordinance is assigned a role often held by courts in other Model Law jurisdictions) will replace the parties' decision, determining that there will be either one or three arbitrators. 39

4.1.2 Appointment of arbitrators

Like the Model Law, the Arbitration Ordinance allows the parties to agree the procedure for the appointment of arbitrators. If the agreed appointment procedure fails, a party has the right to seek assistance from the HKIAC. 40  If the parties fail to agree an appointing procedure, the Arbitration Ordinance provides default appointment rules. For a three-member tribunal, each party appoints an arbitrator and the two arbitrators appoint the third arbitrator. If a party fails to appoint its arbitrator within 30 days of the date it was requested to do so by the other side, or if the two party-appointed arbitrators fail to appoint the third arbitrator within 30 days of their appointment, either party can request the HKIAC to substitute the appointment. 41  In case of a sole arbitrator, either party can request the HKIAC to make the appointment. 42

4.1.3 The Arbitration Ordinance also provides for a default appointing mechanism for an even number of arbitrators. In this case, each party appoints the same number of arbitrators and, if a party fails to do so within 30 days of being requested to by the other side, the HKIAC makes a substitute appointment if so requested. 43

4.2.1 The Arbitration Ordinance requires arbitrators to be impartial and independent. 44  An arbitrator has an obligation to promptly disclose any circumstances that are likely to cast doubts on their impartiality and/or independence. 45  An arbitrator’s duty of disclosure is continuous during the arbitrator’s tenure. 46 

Duties of arbitrators

4.2.2  The Arbitration Ordinance provides that arbitrators must:

• be independent and impartial 47 ;
• act fairly and impartially 48 ;
• disclose all circumstances which may give justifiable doubts as to their impartiality or independence 49 ;
• give parties a reasonable opportunity to present their cases 50 ; and
• avoid unnecessary delay or expense.  51    

Grounds for Challenge

4.2.3 The Arbitration Ordinance provides grounds for challenging an arbitrator. These grounds are:

• where circumstances exist that give justifiable doubts as to the arbitrator’s impartiality or independence; and
• if the arbitrator does not possess the qualifications agreed by the parties. 52

4.2.4 In Hong Kong, an objective test is applied when determining whether an arbitrator is biased. 53  Such objective test looks at whether a fair-minded and informed observer, having considered the relevant facts, would conclude that there is a real possibility that the arbitrator was biased. 54 A challenge, however, cannot be raised by a party against its own appointed arbitrator in situations where the party was already privy to the circumstances prior to the making the appointment. 55

4.2.5 Challenge procedure: The Arbitration Ordinance promotes party autonomy by giving parties the freedom to agree upon a procedure to challenge an arbitrator. 56 Where parties fail to agree on a procedure, the party making the challenge must submit a written statement with reasons for the challenge to the arbitral tribunal within 15 days after becoming aware of the constitution of the arbitral tribunal or the grounds for such challenge. If the arbitrator does not withdraw from the proceedings upon being challenged, the arbitral tribunal decides on the challenge. 57  If a challenge is unsuccessful, the party making the challenge may appeal the decision with the Court of First Instance within 30 days of receiving notice of the decision. 58

4.2.5.1  Any arbitral award issued by an arbitral tribunal which includes an arbitrator against whom a challenge is pending before the courts, may be refused enforcement until the final decision on the challenge.  59 If the challenge of the arbitrator is eventually upheld, the courts may set aside the award. 60

4.2.6 Replacement of an arbitrator: if an arbitrator’s mandate has terminated (whether by a successful challenge, withdrawal, party agreement, death, failing to act without undue delay, etc), a substitute arbitrator shall be appointed. 61  This replacement should be in accordance with the same process adopted for the appointment of the original arbitrator except where the parties have agreed otherwise.

4.3.1In Hong Kong, the parties are expressly liable under the Arbitration Ordinance to pay all arbitral tribunal's fees and expenses. 62

4.3.2 If parties fail to pay the arbitral tribunal’s fees and expenses, the arbitral tribunal is empowered to refuse to deliver an award. 63   Parties are not, however, held at the mercy of the arbitral tribunal if they dispute the tribunal’s fees and expenses. The Arbitration Ordinance provides a procedure for a party to dispute the arbitral tribunal’s fees and expenses. The Hong Kong Courts are empowered to determine the dispute over the arbitral tribunal’s fees and expenses, including ordering lower fees and expenses when they deem proper. 64 This procedure is, however, subject to any party-agreed process for fee appeal or review, eg in institutional rules. 65

5.1.1  In Hong Kong, the arbitral tribunal is empowered to rule on its own jurisdiction. 66  This power flows from the principles of “competence-competence” and “separability”, which are recognised in Section 34(1) of the Arbitration Ordinance. Competence-competence means that an arbitral tribunal may independently rule on its jurisdiction and on objections relating to the validity of the arbitration agreement, without resort to a court. Separability, as briefly explained in paragraph 3.2 above, means that an arbitration agreement shall be treated as an agreement independent from other terms of the underlying contract. 67  By applying these two concepts concurrently, even when an arbitral tribunal’s competence is challenged by one of the parties, it is nevertheless empowered to rule on validity of the challenge.

5.1.2 An arbitral tribunal may decide on the issue of its own jurisdiction either as a preliminary question or in an award on merits. 68  If an arbitral tribunal finds that it has jurisdiction as a preliminary question, any party may challenge this decision before the Hong Kong Court of First Instance. If an arbitral tribunal decides that it does not have jurisdiction over a matter, the decision is final. A party does not have the right to appeal this decision. 69  When an arbitral tribunal decides the issue of jurisdiction with the merits, a judicial review of the question of jurisdiction is available during setting aside and enforcement proceedings.

Interim measures

5.2.1 In Hong Kong, an arbitral tribunal has the power to issue interim measures requested by a party.  70 Generally, the purpose of issuing interim orders is to prevent or minimise disadvantages which may occur before final resolution of a dispute and before enforcement of an arbitral award. 71  An arbitral tribunal may issue interim measures to:

• maintain or restore the status quo until the dispute is decided by the arbitral tribunal; 72
• prevent imminent harm or prevent prejudice of the arbitral process; 73
• preserve assets that may be used to satisfy an award; 74  or
• preserve relevant and material evidence for an arbitration. 75

5.2.2 The Arbitration Ordinance confers equal powers to both the courts and arbitral tribunals to order interim measures. 76 Accordingly, interim measures issued by arbitral tribunals in Hong Kong must meet the same conditions as court-ordered interim measures in regular judicial proceedings. 77  An application for an interim measure must show that: 

• if the measure is not ordered, the resulting harm will not be adequately reparable by damages; and
• there is a reasonable possibility of the applicant’s success on the merits.

5.2.3 While an applicant must satisfy this two-pronged test, an arbitral tribunal may take into consideration other relevant factors when determining an application for the grant of interim measures.

Ex parte preliminary orders

5.2.4 Arbitral tribunals seated in Hong Kong also have the power to issue preliminary orders. In particular, parties can apply for interim measures on an ex parte basis. 78  The power of arbitral tribunals to order preliminary orders on an ex parte basis was introduced to prevent parties from pre-empting interim measures. The purpose was aimed at preventing party action which may render such measures moot or unenforceable, eg depleting assets. 79

Interim Measures in Mainland China

5.2.5 Hong Kong is the only jurisdiction where parties to arbitral proceedings seated in Hong Kong can apply to Mainland Chinese courts for interim measures. 80  This ground breaking arrangement is discussed in more detail in section 8.5 below.

6.1.1 The Arbitration Ordinance provides that where parties do not agree otherwise, arbitral proceedings will commence on the date on which the request for arbitration is received by the respondent. 81

6.2.1 In accordance with the principle of party autonomy, the Arbitration Ordinance provides that parties are free to agree on the procedure to be followed by the arbitral tribunal in the conduct of the arbitral proceeding. 82  If the parties are unable to agree on the applicable procedure, the arbitral tribunal may conduct the proceedings in a manner that it deems appropriate. 83  Notably, when conducting arbitral proceedings, an arbitral tribunal is not bound by the rules of evidence applicable in the Hong Kong courts. 84

6.2.2 Subject to the parties’ agreement otherwise, the procedural powers of the arbitral tribunal include the power to:

• extend time for arbitral proceedings; 85
• order interim measures; 86
• order that documentary evidence should be accompanied by a translation; 87
• dismiss a claim where it is satisfied that the party has unreasonably delayed pursuit of the claim; 88
• request court assistance for taking evidence; 89
• require a claimant to give security for the costs of the arbitration; 90
• direct the disclosure of documents or the delivery of interrogatories; 91
• direct evidence to be given by affidavit; 92  and
• make an award at any time. 93

The arbitral tribunal has no power under the Arbitration Ordinance to consolidate proceedings. An arbitrator hearing court ordered consolidated arbitral proceedings has the power to consolidate in relation to the costs of those arbitral proceedings.

6.3.1 Place of arbitration: the place of arbitration determines the jurisdiction that governs the arbitration procedure and the legal seat of the arbitration. The Arbitration Ordinance, in line with party autonomy, allows parties to choose the place of arbitration. Failing party agreement, the arbitral tribunal will choose the place of arbitration. 94

6.3.2 Place of hearing: the place of hearing is different from the place of arbitration and refers to the venue or location of the arbitration. The Arbitration Ordinance acknowledges the distinction between the place of arbitration and the place of hearing. While it is common for hearings to take place at the place of arbitration, this is not mandatory. The Arbitration Ordinance expressly provides that the meetings and hearings can take place at a location other than the place of arbitration. 95

6.3.3 Language of arbitration: also in line with party autonomy, the Arbitration Ordinance provides that the parties are free to decide on the language(s) to be used in the proceedings. If no agreement exists, the tribunal decides the language of the proceedings. 96

6.4.1 Subject to the parties’ agreement, submissions may include written pre-hearing submissions, oral opening submissions, closing submissions and post-hearing briefs. An arbitral tribunal must adhere to the fundamental rules of natural justice and give parties reasonable opportunities to present their case through their submissions. 97

6.5.1 Subject to the agreement of the parties, the arbitral tribunal has discretion to hold oral hearings or conduct proceedings solely on the basis of written documents. 98  However, if a party requests an oral hearing, the tribunal is obliged to hold a hearing unless the parties have previously agreed not to.

6.6.1 As mentioned above in paragraph 6.2.1, the arbitral tribunal is not bound by the Hong Kong rules of evidence. Parties are free to agree on the procedure for the collection of evidence. In the absence of any agreement between the parties, the arbitral tribunal has the discretion to take evidence it considers relevant for the proceedings. 99

6.6.2  Although the arbitral tribunal is not bound by the rules of evidence applicable in the Hong Kong courts, a person cannot be required to produce documents or evidence that it would not be required to produce in civil court proceedings. 100

Types of Awards

7.1.1 During the course of an arbitration, different types of awards can be issued by the arbitral tribunal. These include:

• interim awards;
• partial awards;
• consent awards; and
• final awards. 

Form and Contents of the Award

7.1.2 An arbitral award in Hong Kong must: 

• be in writing; 101
• be signed by the majority of the arbitrators; 102
• state the reasons on which it is based (unless the parties have agreed that no reasons are to be given);  103
• state the date of the award; 104  and
• state the place of the arbitration. 105

Effect of the Award

7.1.3 An award rendered by the arbitral tribunal under an arbitration agreement is final and binding on the parties and any person claiming through or under any of the parties. 106

Enforceability

7.1.4 Arbitration awards, whether rendered in Hong Kong or outside of Hong Kong are generally enforceable in the same manner as a court judgment, subject to a successful challenge or setting aside procedure. 107

7.2.1 If parties settle their dispute before a final award is rendered, the arbitral tribunal will terminate the proceedings. As seen in paragraph 7.1.1 above, the arbitral tribunal may also render a consent award. A consent award records the parties’ settlement in an arbitral award. This award has the same status and effect as an award on the merits and is final and binding on the parties. 108

7.3.1 The Arbitration Ordinance empowers arbitral tribunals seated in Hong Kong to award simple or compound interest from the dates and at the rates that it considers appropriate. 109 Unless otherwise provided by the arbitral tribunal, interest is payable on money awarded by the arbitral tribunal from the date of the award. 110  Interest is also payable on costs from the date of the costs award, unless otherwise provided by the arbitral tribunal. 111

7.3.2 Unless otherwise awarded by the arbitral tribunal, the interest rate for awards in Hong Kong is generally the judgment rate, which is the rate of interest determined by the Hong Kong Chief Justice under Section 49(1)(b) of the High Court Ordinance (Cap. 4). 112

7.4.1 The Arbitration Ordinance authorises the arbitral tribunal to award costs of the arbitral proceedings.  113  These costs include:

• fees and expenses of the tribunal;
• reasonable travel expenses;
• reasonable costs of expert advice and other assistance required by the tribunal;
• reasonable travel and other expenses of witnesses;
• legal and other costs incurred by parties in relation to the arbitration; and
• any fees and expenses of the appointing authority.

7.4.2 The arbitral tribunal will consider all relevant circumstances including a written offer of settlement of the dispute when allocating the costs to each party.

7.5.1 Within 30 days of receipt of the award, the tribunal can, of its own motion or upon the request of a party, correct computational, clerical or typographical errors. 114

7.5.2  With the consent of both parties and at the request of one of the parties, the arbitral tribunal is empowered to give an interpretation of a specific point or part of the award. 115

8.1.1 Hong Kong courts are empowered to provide assistance to arbitration proceedings in a variety of situations. These include:

• determining a challenge of an arbitrator; 116
• assisting in the taking of evidence for an arbitration proceeding; 117
• ordering an individual to attend proceedings before an arbitral tribunal for evidentiary purposes; 118
• granting time extensions where an arbitration agreement prescribes a time limit for raising claims in arbitration;  119
• dismissing claims that are not diligently pursued by the claimant in arbitration in case no tribunal exists that could make such a decision; 120
• making orders for the inspection, photographing, preservation, custody, detention or sale of relevant property by the arbitral tribunal, a party to the arbitral proceedings, or an expert or for the collection of samples, making of observations, or conducting of experiments on any relevant property; 121
• setting aside arbitral awards; 122  and
• enforcing arbitral awards. 123

8.2.1 When a matter before the court is subject to an arbitration agreement, before the submission of the first substantive submission, at the request of a party, the court must stay the court proceedings in favour of arbitration unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed. 124

8.2.2 If court proceedings, on whether the arbitration agreement is null and void, are ongoing, a party may nevertheless commence or continue arbitration proceedings and an arbitral award may be rendered while the issue is pending before the court. 125

8.3.1 The Arbitration Ordinance empowers the Hong Kong courts to extend contractual limitations for commencing arbitral proceedings. 126  This power is exercisable only when an arbitral tribunal has not yet been constituted. 127   An order by the court to extend the time limit to commence an arbitration proceeding is non-appealable. 128

8.4.1 As set out in paragraph 5.2 above, the Arbitration Ordinance empowers arbitral tribunals to issue protective interim measures. The Arbitration Ordinance also provides a party with the right to request protective interim measures from the Hong Kong courts, before and during the arbitration. Common interim protective measures include interlocutory injections such as freezing orders (Mareva Injunctions) and search orders (Anton Piller Orders).

8.4.2 In addition to a party not meeting the requisite threshold, the Hong Kong courts may also refuse to grant interim measures on the grounds that the measure sought is the same subject of the arbitral proceedings and/or if it considers it more appropriate for the interim measures to be handled by the arbitral tribunal.  129

8.4.3 Hong Kong courts also have the power to grant interim protective measures concerning arbitrations seated outside of Hong Kong. 130  However, the Hong Kong courts may only grant such interim measures, if an award in the arbitration may be enforced in Hong Kong. 131

8.5.1 The Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administrative Region (the Interim Measures Arrangement) was signed on 2 April 2019. The Interim Measures Arrangement became effective and entered into operation on 1 October 2019.

8.5.2 The Interim Measures Arrangement makes Hong Kong the first, and thus far only, jurisdiction outside of Mainland China where parties to arbitration proceedings (which must be seated in Hong Kong and administered by an approved Hong Kong arbitral institution) are able to apply to the courts of Mainland China for interim measures. 132

8.5.3 Consistent with Mainland Chinese practice, interim reliefs will only be applicable to proceedings before Hong Kong arbitral institutions and will thus not apply to ad hoc arbitral proceedings. A list of arbitral institutions including the HKIAC, ICC, CIETAC-HKAC, HKMAG, SCIA-HK, eBRAM International Online Dispute Resolution Centre, and AALCO Hong Kong Regional Arbitration Centre has been approved by both Mainland China and Hong Kong. 133

8.5.4 Through the administering arbitration institution, a party can make an application to the People’s Intermediate Court in the Mainland Chinese responding party’s place of residence or the place where the property and/or assets are located. 134  Interim measures obtainable from Mainland Chinese courts include property preservation, evidence preservation, and conduct preservation. 135

8.5.5 Reciprocal rights apply with respect to interim measures obtainable from Hong Kong courts and Mainland Chinese-seated arbitrations in accordance with the existing Hong Kong law. 136

9.1.1 Grounds for setting aside an arbitral award in Hong Kong follow the Model Law and include:

• a party to the arbitration agreement was incapacitated;
• the arbitration agreement was not valid;
• a violation of due process (lack of proper notice on the constitution of the arbitral tribunal or a party was unable to present its case);
• the arbitral tribunal went outside the scope of the arbitration agreement;
• the constitution of the arbitral tribunal was in violation of the parties’ agreement;
• the arbitral award deals with issues that are non-arbitrable; and
• the arbitral award is against public policy.

9.1.2 The Hong Kong courts apply the above cited grounds in line with international practice and thus generally interpret them narrowly. Accordingly, in the vast majority of cases, arbitral awards will be upheld by the Hong Kong courts.

9.1.3 In addition, where Schedule 2 of the Arbitration Ordinance applies and the arbitration is thus considered domestic, 137  an arbitral award can also be challenged on the grounds of serious irregularity, which provides for similar grounds as the Model Law. 138

9.2.1 Further, where Schedule 2 of the Arbitration Ordinance applies, 139  arbitral awards can be appealed on questions of law. 140  However, such a right to appeal requires leave of the court, which is granted if the competent court is satisfied that:  141

• the decision of the question of law will substantially affect the rights of one or more of the parties;
• the question is one which the arbitral tribunal was asked to decide; and
• on the basis of the findings of the fact in the award, the arbitral tribunal’s decision on the question was “obviously wrong” or the question is one of general importance and the decision of the tribunal is “at least open to serious doubt”.  142

9.2.2 Leave of the Court of First Instance or the Court of Appeal is required for any further appeal. This leave will only be granted if the court is satisfied that the question is one of general importance or that the question should be considered for special reasons.  143

10.1.1 Arbitral awards seated in Mainland China, Macao, and New York Convention member states are enforceable just like awards seated in Hong Kong, 144  namely in the same manner as Hong Kong court judgments.  145 In this respect, the Arbitration Ordinance adopts a unified legislative regime for domestic and international arbitration. 

10.1.2 Evidence required to enforce an award: under the Arbitration Ordinance, a party seeking to enforce an arbitration award, whether made in Hong Kong or outside of Hong Kong, must produce the following:

• a duly authenticated original award or duly certified copy of the award;
• the original arbitration agreement or a duly certified copy of the arbitration agreement; and
• a translation of the award in one (or both) of the official languages of Hong Kong, if the award is in a different language.  146

10.1.3 Refusal of recognition and enforcement: the grounds under which an arbitration award may be refused enforcement in Hong Kong mirror the New York Convention. They include:

• a party to the arbitration agreement was incapacitated;
• the arbitration agreement was not valid;
• a violation of due process (ie lack of proper notice on the constitution of the arbitral tribunal or a party was unable to present its case);
• the arbitral tribunal went outside the scope of the arbitration agreement;
• the constitution of the arbitral tribunal was in violation of the parties’ agreement;
• the arbitral award has been set aside;
• the arbitral award deals with issues that are non-arbitrable; and
• the arbitral award is against public policy.  147

10.1.4 As with the setting aside of awards, the Hong Kong courts also apply the above cited grounds for refusing enforcement in line with international practice and thus generally interpret them narrowly. Accordingly, in the vast majority of cases, arbitral awards will be enforced by the Hong Kong courts.

10.2.1 Following the handover of Hong Kong to the People's Republic of China on 1 July 1997, the New York Convention no longer applied between Hong Kong and Mainland China. It was replaced in its function by the Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the HKSAR (Enforcement Arrangement) which has been in effect since 1 February 2000 and has ensured the mutual enforcement of Awards under much the same terms as previously the New York Convention. The scope of the Enforcement Arrangement was amended by the Supplemental Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region (Supplemental Arrangement) signed on 27 November 2020 and coming into effect the following year. In addition to other changes, the Supplemental Arrangement broadened the scope of the Enforcement Arrangement to include all awards from Mainland China, provided they were issued under the PRC's Arbitration Law. Previously, coverage had been limited to awards from specific arbitral institutions. Additionally, the Supplemental Arrangement permitted parallel enforcement actions in both Hong Kong and Mainland China. 149

10.2.2 The Enforcement Arrangement and the Supplemental Arrangement have led to awards from Mainland China being enforceable under the same rules as awards seated in Hong Kong. 150  At the same time, they have also allowed Hong Kong awards to be enforceable in Mainland China under terms substantially similar to the New York Convention. There are no reliable statistics on the success rate of enforcement actions based on Hong Kong awards brought before courts in Mainland China. However, there is some evidence suggesting that the success rate of Hong Kong awards may be higher than that of other foreign awards seeking enforcement under the New York Convention. 151

10.2.3 Disputes over the enforcement of Mainland awards in Hong Kong were brought into focus through a recent case by the Hong Kong Court of First Instance. 152  In that case, the claimant had already applied for and obtained an enforcement order by the Hong Kong Court of First Instance. 153  This order was then challenged by the respondent, among other things on grounds that it would be contrary to public policy to enforce the award as per Section 95(3) of the Arbitration Ordinance. 154  The evidence reviewed by the Hong Kong court included a video recording of the arbitration hearings. This video revealed that one of the arbitrators, who had been attending remotely, “was moving from one location to another, indoors and outdoors”, that he “travelled in a car”, “was off-line for periods of time from the second half, and obviously could not hear what was being said by the parties’ lawyers or by the other members of the tribunal”. 155  The court noted specifically that there were times when the arbitrator did not respond to communications from other tribunal members or the tribunal secretary. 156  Additionally, he had not clarified whether he had been able to follow the proceedings during the intervals when he appeared to be offline. 157  Based on these observations, the Hong Kong Court of First Instance concluded that enforcing the award would be contrary to public policy, 158  namely to the principles of equality before the courts and the right to a fair hearing. 159  The court noted specifically that “not only must these rules be applied, but they must be seen by the objective reasonable observer to have been applied”. 160  This at least had been undermined by the Mainland arbitrator's conduct. The arbitrator's inattentiveness violated, or seemed to be violating, the parties' right to be heard. 161  In addition, the arbitrator's ostensible lack of interest in the proceedings indicated that he had already made up his mind without hearing the parties, undermining the principle of fairness. 162

11.1.1 Hong Kong is the latest country in the Asia-Pacific region to permit third party funding (TPF) of arbitration proceedings.

11.1.2 On 14 June 2017, the Legislative Council of Hong Kong passed the Arbitration and Mediation Legislation (Third Party Funding) (Amendment) Ordinance 2017 (TPF Ordinance).  163  The TPF Ordinance amended the Arbitration Ordinance to allow third party funding of arbitration in Hong Kong (whether it be for arbitrations seated in Hong Kong or for arbitration with services provided in Hong Kong). 164  Under the TPF Ordinance, a funded party must give written notice of the existence of the funding agreement and the name of the third-party funder to the arbitral tribunal and the other parties.  165  Failure to give such notice will not give rise to judicial liability but may be considered during an arbitral tribunal’s decision making.  166

11.1.3 The Code of Practice for Third Party Funding of Arbitration and Mediation came into effect on 1 February 2019 setting out the practices and standards that third-party funders are ordinarily expected to comply with in connection with TPF of arbitrations (and mediation) in Hong Kong. This includes the scope of funding agreements, termination of funding agreements, capital adequacy, conflicts of interest, control of proceedings, and liability for adverse costs.