Commercial Arbitration

Hong Kong

Christopher Tung, Donna Ko and Jessie King

K&L Gates

    Infrastructure

  1. 1.The New York Convention
    Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?

    Hong Kong adopted the New York Convention (the Convention) on 21 April 1977 by virtue of the United Kingdom having acceded on Hong Kong’s behalf. China is also a signatory to the Convention and extended its membership of the Convention to Hong Kong after 1 July 1997.

  2. 2.Other treaties
    Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?

    Hong Kong is party to the Arrangement Concerning Mutual Enforcement of Arbitral Awards Between the Mainland and the Hong Kong Special Administrative Region (the Arrangement) issued in 2000. Additionally, on 5 January 2010, China’s Supreme People’s Court issued the Notice Regarding the Enforcement of Hong Kong Arbitral Award in Mainland China, which enforces ad hoc arbitral awards rendered in Hong Kong by the International Chamber of Commerce (ICC) or any other foreign institutions in Hong Kong.

    Hong Kong has signed bilateral investment treaties (BITs) with sixteen countries (see http://www.unctad.org/sections/dite_pcbb/docs/bits_hk_china.pdf ), each with an arbitration provision. Arbitral awards arising from these treaties are enforceable under the New York Convention.

  3. 3.National law
    Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?

    In 1990, Hong Kong adopted the United National Commission on International Trade Law (UNCITRAL) Model Law (the Model Law) in 1985 to apply to international arbitrations. Please see Section 34C of the Hong Kong Arbitration Ordinance (HKAO). The Model Law is reproduced in HKAO, Schedule 5.

    Under the HKAO, Section 34C, the Model Law may apply to arbitrations in Hong Kong. The Model Law can apply to both domestic and international arbitration agreements (HKAO, Section 6).

    The HKAO is being reviewed to unify the domestic and international arbitration rules; an Arbitration Bill has been proposed to the Hong Kong Legislative Council. The first reading was completed on 8 July 2009. A second reading has not yet been scheduled.

  4. 4.Arbitration bodies in your jurisdiction
    What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?

    Arbitration bodies relevant to international arbitration in Hong Kong include:

    • Hong Kong International Arbitration Center (HKIAC)

    • International Chamber of Commerce Court of Arbitration (ICC)

    • Chartered Institute of Arbitrators (East Asia Branch)

    • The Hong Kong Institute of Arbitrators

    Yes, HKIAC and ICC may act as appointing bodies where parties cannot come to agreement on the choice of an arbitrator.

  5. 5.Foreign institutions
    Can foreign arbitral providers operate in your jurisdiction?

    Foreign arbitral providers may operate in Hong Kong (eg. ICC).

  6. 6.Courts
    Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with the law and practice of international arbitration?

    The Construction and Arbitration List was established to facilitate the disposal of specialised classes of civil action by the Hong Kong High Court, including arbitration.

    The Hong Kong High Court is well versed in the law and practice of international arbitration and is often involved in:

    • the enforcement of arbitration agreements;

    • supporting the conduct of arbitration proceedings; and

    • the challenge, recognition and enforcement of awards.

    Hong Kong’s Court of First Instance handed down at least 20 judgments relating to international arbitration disputes in 2009.

    7. Agreement to arbitrate

  7. 7.Formalities
    What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?

    An arbitration agreement is an agreement by the parties to submit to arbitration disputes which have arisen or which may arise between them. Pursuant to the HKAO, Section 2AC, an arbitration agreement must be made in writing or evidenced in writing. It is not strictly necessary that the arbitration agreement be signed by the parties, although this is of course the conventional manner for the parties to formally indicate their consent.

  8. 8.Arbitrability
    Are any types of dispute non-arbitrable? If so, which?

    Disputes falling within the following categories may not be referred to arbitration:

    • criminal charges;

    • intellectual property;

    • competition and anti-trust;

    • marriage or divorce;

    • relations between parents and children;

    • actions in rem against vessels;

    • matters reserved for resolution by state agencies and tribunals (such as taxation, development control, immigration, nationality and social welfare entitlements); and

    • fraud.

    See Hong Kong Halsbury’s Laws, 2008 Reissue, Vol 1(2) at para 25.003.

  9. 9.Third parties
    Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?

    Arbitrations are based on the consent of the parties. Arbitrators generally have no power to make orders affecting non-parties to the arbitration agreement. In contrast to courts, they generally do not have power to compel witnesses to testify or produce documents, to require third parties to participate in arbitration proceedings, or to make awards requiring a third party to do (or to refrain from doing) something.

  10. 10.Consolidation
    Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?

    There is no statutory provision governing consolidation of concurrent hearing of separate but related international arbitrations.

  11. 11.Groups of companies
    Is the “group of companies doctrine” (or any other method of piercing the corporate veil) recognised in your jurisdiction?

    The ‘group of companies doctrine’ is not recognised under Hong Kong law.

  12. 12.Separability
    Are arbitration clauses considered separable from the main contract?

    Pursuant to the Model Law, Article 16, if a contract containing an arbitration clause is found to be invalid, this does not invalidate arbitration proceedings commenced under the arbitration clause. An arbitration clause is considered to be a separate agreement from the larger contract in which it is contained.

  13. 13.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?

    Pursuant to the Model Law, Article 16(3), an arbitrator may rule on its own jurisdiction. No appeal lies against a decision of the arbitral tribunal on the question of jurisdiction.

  14. 14.Drafting
    Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?

    Absent a contrary choice of law applicable to the arbitration, choosing Hong Kong as the seat of arbitration means Hong Kong law will be applicable to procedural matters to support the arbitration process or where arbitration rules chosen by the parties are silent. International arbitration awards may be enforced in Hong Kong under the New York Convention 1958 but the enforcement of awards made in Mainland China in Hong Kong and Hong Kong awards in Mainland China are based on the Arrangement. No specific drafting is required for the Arrangement to apply.

  15. 15.Institutional arbitration
    Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?

    Institutional arbitration is more common than ad hoc international arbitration. The Model Law is often applied in ad hoc arbitrations.

  16. 16.Multi-party agreements
    What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.

    Generally, little thought is given to drafting an arbitration clause to deal with multiple parties. Problems that may arise:

    • ensuring equal treatment between multiple parties in the appointment of arbitrators;

    • no joiner where a party subsequently wishes to join existing proceedings; and

    • no power to consolidate separate but related disputes.

    Drafting solutions include providing for:

    • joint appointment of the arbitrator or arbitral panel by the parties;

    • appointment of the arbitrator or arbitral panel by an appointing authority;

    • joiner where a party is added later;

    • consolidation where separate but related disputes are heard together; and

    • time limits and confer power on arbitrator to deal with costs.

    17. Commencing the arbitration

  17. 17.Request for arbitration
    How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?

    An arbitration is deemed to commence under Hong Kong law when one party to the arbitration agreement serves a notice on the other party requiring that party to appoint an arbitrator or agree to the appointment of an arbitrator or submit the dispute to a person designated to act as arbitrator in the applicable agreement (Limitation Ordinance, Section 34(3)).

    The most common time limitations encountered in relation to arbitration:

    • Contract related actions must be brought within six years from the date on which the cause of action accrued (Limitation Ordinance, Section 4(1)). Action for breach of contract accrues on the date when the breach occurs.

    • Tort related actions must be brought within six years from date on which a cause of action occurred (Limitation Ordinance, Section 4(1)). This may be extended in cases of negligence. With negligence, the claim must be brought within three years from date of knowledge of the relevant facts giving rise to the claim, subject to a time limit of 15 years.

    18. Choice of Law

  18. 18.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 substantive law of the dispute is agreed by the parties in the underlying contract or by subsequent agreement. In the absence of any agreement, the arbitral tribunal decides (Model Law, Article 28). Where no substantive law is specified or is unclear, the tribunal will determine the substantive law by applying Hong Kong conflict of law rules. An agreement may be implied on the choice of substantive law, but failing that, a law with the closest and most real connection to the contract, such as, the domicile of the parties, the place the contract was made and the place of performance of the contract, may be used.

    19. Appointing the tribunal

  19. 19.Choice of arbitrators
    Does the law of your jurisdiction place any limitations in respect of a party’s choice of arbitrator?

    No. Arbitrators must be independent and impartial, have the legal capacity to act (eg. not minors or of unsound mind) and properly qualified as may be required by the agreement to arbitrate or relevant arbitration rules.

  20. 20.Foreign arbitrators
    Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?

    Under the Model Law, Article 11(1) , no person shall be precluded by reason of his nationality from acting as an arbitrator, unless the parties otherwise agree.

    Foreign nationals from overseas countries and nationals from the People’s Republic of China (PRC) are required to apply for an employment visa for the purposes of participating in arbitration proceedings in Hong Kong. Further details are available at the HKIAC’s website at http://www.hkiac.org/show_content.php?article_id=241.

  21. 21.Default appointment of arbitrators
    How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?

    The court may exercise its power pursuant to the Model Law, Article 11 in the following circumstances:

    • if the arbitration agreement provides for three arbitrators, each party shall appoint one arbitrator, and the two arbitrators thus appointed shall appoint the third arbitrator. If a party fails to appoint the arbitrator within 30 days of receipt of a request to do so from the other party, or if the two arbitrators fail to agree on the third arbitrator within 30 days of their appointment, the appointment shall be made, upon request of a party, by the court;

    • if the arbitration agreement provides for a sole arbitrator and the parties are unable to agree on the arbitrator, the arbitrator shall be appointed by the court upon request of a party; and

    • when the court exercises the power to appoint an arbitrator, it shall have due regard to the qualifications required of the arbitrator by the agreement and to such considerations as are likely to secure the appointment of an independent and impartial arbitrator and, taking into account the advisability of appointing an arbitrator of a nationality other than those of the parties.

  22. 22.Immunity
    Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?

    Under the HKAO, Section 2GM, an arbitrator is only liable in law for an act done or omitted to be done in relation to the exercise or performance or the purported exercise or performance of the tribunal's arbitral functions only if it is proved that the act was done or omitted to be done dishonestly.

  23. 23.Securing payment of fees
    Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?

    The parties to proceedings before an arbitral tribunal are jointly and severally liable to pay to the tribunal such reasonable fees and expenses of the tribunal as are appropriate in the circumstances (HKAO, Section 2GK).

    Arbitrators may ask for security of their fees, or for the payment in advance of a non-refundable ‘commitment fee’ at the time of appointment to protect themselves against the possibility of the arbitration not taking place. See Norjarl K/S A/S v Hyundai Heavy Industries Co Ltd [1992] 1 QB 863.

    The HKIAC provides a holding security service for the fees and expenses of arbitrators. HKIAC's fee for holding security is HK$3,000 per party per annum, payable when the security for fees and expenses is sent to HKIAC.

    24. Challenges to arbitrators

  24. 24.Grounds of challenge
    On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?

    The Model Law, Article 12 permits the challenge of appointed arbitrators on two grounds:

    (a) Lack of impartiality or independence

    When a person is approached in connection with his possible appointment as an arbitrator, he is under a continuing obligation to disclose any circumstances likely to give rise to justifiable doubts as to his impartiality or independence from the time of appointment and throughout the arbitral proceedings, unless they have already been informed of them by him. Reference can made be to the International Bar Association (IBA) Guidelines on Conflicts of Interest in International Arbitration in assessing satisfactory compliance of this requirement.

    (b) Lack of qualifications

    A party may also raise a challenge if an arbitrator does not possess qualifications agreed to by the parties, regardless of whether the arbitrator is appointed by him or the other party.

    According to the Model Law, Article 13, if a party intends to challenge an arbitrator, it must send a written statement of the reasons for the challenge to the tribunal. If the arbitrator does not withdraw from the reference, the tribunal will decide on the challenge, failing which the High Court may be requested to decide on the challenge.

    25. Interim relief

  25. 25.Types of relief
    What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?

    Interim measures which may be granted by the arbitral tribunal – Section 2GB Interim measures which may be granted by the High Court – Section 2GC
    preservation, interim custody or sale of any goods that are the subject matter of the reference; preservation, interim custody or sale of any goods which are the subject matter of the reference;
    security for the amount in dispute in the reference; security for an amount in dispute in the reference
    detention, preservation or inspection of any property or thing that is the subject of the reference; detention, preservation or inspection of any property or thing which is the subject of the reference or as to which any question may arise therein and ancillary orders permitting access to any person for these purposes to any property in the possession of a party to the reference
    site inspections, the taking of samples and the conduct of experiments; and site inspections
    appointment of a receiver. the taking of samples or the conduct of experiments;
      interim injunctions, including Mareva injunctions and Anton Piller orders; and
      the appointment of a receiver

    Hong Kong courts may, either on an interlocutory or final basis, enjoin parties over whom they have jurisdiction from commencing or continuing with proceedings in a foreign court. Factors which the courts would consider in granting an injunction include whether Hong Kong is the natural forum for the action and whether the foreign court is oppressive to one of the parties and have been brought in bad faith.

  26. 26.Security for costs
    Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?

    Pursuant to the HKAO, Section 2GB(1), an arbitral tribunal may order a party to provide security for costs. He must specify a period within which the order is to be complied with, and may extend that period or an extended period. However, it must not make such order on the ground that the claimant is a natural person who is ordinarily resident outside Hong Kong or is a body corporate that is incorporated, or an association that is formed, under a law of a place outside Hong Kong or whose central management and control is exercised outside Hong Kong.

    The purpose of requiring a claimant to provide security for costs is to ensure that a defendant is not left out of pocket if the claimant is unsuccessful and is ordered to pay the respondent's costs. Security for costs may be appropriate if the respondent can show that the claimant's financial position is so weak that it may not be able to meet a costs order against it. Unlike in litigation, security for costs may not be ordered simply on the ground that the claimant is resident outside Hong Kong. Security for costs is awarded less commonly in arbitration than in litigation.

    Under the HKAO, the High Court has no power to order security for costs.

    27. Procedure

  27. 27.Procedural rules
    Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (e.g. general duties of the tribunal and/or the parties)?

    There are mandatory rules in Hong Kong governing the arbitration procedure. They are outlined in the HKAO. The following is a short-list of important mandatory rules:

    • Section 2B(3): an arbitrator shall disclose all confidential material to the parties, which he considers material to the arbitration proceedings;

    • Section 2GB(4)(a): arbitral tribunal must specify time period when making an order to provide security for costs;

    • Section 2GD(4): an applicant must give notice of the application to the other parties within 7 days of making it;

    • Section 2GJ(4): an applicant making an application for arbitration proceeding costs must do so within 30 days after the notification of the award or within the time allowed by tribunal;

    • Section 6B: where the court consolidates arbitration proceedings and parties cannot agree to an arbitrator, the court shall have the power to appoint one;

    • Section 11: the majority award of three arbitrators (ie, if two agree to the award), shall be binding; if no two arbitrators can agree, the award of the chairman arbitrator (appointed by the other two) shall be binding;

    • Section 18: unless contrary intention is expressed therein, the arbitration award shall be final; and

    • Sections 40D and 43: party seeking to enforce both a Mainland award and New York Convention award must respectively – original or certified copy of award; original or copy of arbitration agreement; and translation of award if in different language by official, sworn translator, or diplomat/consular agent.

  28. 28.Refusal to participate
    What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?

    The Model Law, Article 25 addresses a respondent’s failure to participate in an arbitration. In this situation, the arbitrator is still required to hold a hearing (either orally or on the papers) to ensure the claimant has proved its case. Unlike court proceedings, an arbitrator does not have the power to enter a default judgment against a party who fails to plead its case.

  29. 29.Admissible evidence
    What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Commercial Arbitration generally be taken into account?

    The arbitral tribunal is generally not bound by the strict rules of evidence in court proceedings. The arbitral tribunal can decide what evidence to admit and the weight to confer on such evidence. The IBA Rules on the Taking of Evidence in International Commercial Arbitration (IBA Rules) may be taken into account but this is not invariably so.

  30. 30.Court assistance
    Will the courts in your jurisdiction play any role in the obtaining of evidence?

    Under the HKAO, Section 2GC(3), the court or judge of a court may order a person to attend the arbitral tribunal to give evidence or prepare documents or other material evidence. Additionally, under the Model Law, Article 27, the arbitral tribunal or a party with approval from the arbitral tribunal, may request a competent court to assist in taking evidence.

  31. 31.Document production
    What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?

    Under the HKAO, Section 2GB(1)(c), the arbitral tribunal has general powers and may order the discovery of documents or the delivery of interrogatories. Additionally, Sections 2GB(7)(c) and 2GC(3) a arbitral tribunal may direct the attendance before the tribunal witness or a person attending proceedings to give evidence or to produce documents or other material evidence. Finally, Section 2GB(8) addresses documents or evidence, which a person could not be required to produce in civil proceedings, as also exempt in international arbitration.

  32. 32.Hearings
    Is it mandatory to have a final hearing on the merits?

    It is not mandatory to have a final hearing on the merits.

  33. 33.Seat or place of arbitration
    If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?

    Hearings and procedural meetings may be conducted elsewhere. There are no rules preventing parties from choosing a different place for hearings and procedural meetings.

    34. Award

  34. 34.Majority decisions
    Can the tribunal decide by majority?

    Yes. Under the Model Law, Article 29, arbitral decisions shall be made by a majority unless otherwise agreed to by parties.

  35. 35.Limitations to awards and relief
    Are there any particular types of remedies or relief that an arbitral tribunal may not grant?

    The HKAO does not specifically address any remedies or relief that may not be granted. Under the HKAO, Section 2GF, an arbitral tribunal may award any remedy or relief that could have been ordered by the court as if the dispute had been the subject of civil proceedings in the court. Unlike a court, an arbitral tribunal does not have the power to enforce awards. The arbitral tribunal may not make any order that is binding on non-parties to the arbitration.

  36. 36.Dissenting arbitrators
    Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?

    Yes but they are uncommon. See also question 34 on majority decisions.

  37. 37.Formalities
    What, if any, are the legal and formal requirements for a valid and enforceable award?

    The Model Law, Article 31 contains the following requirements for a valid and enforceable award:

    • in writing and signed by the arbitrator(s);

    • state the reasons upon which the award is based;

    • state the date of the award and place of arbitration; and

    • a signed copy must be sent to each of the parties.

  38. 38.Time frames
    What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?

    Under the Model Law, there is no specific time limit governing the issuance of an award. Article 33 addresses correction and interpretation of an award. For example, parties must notify the other party within 30 days of a request for an award correction. The tribunal may make any corrections within 30 days of the award. The HKAO, Section 2AA requires the fair and speedy resolution of disputes by arbitration without unnecessary expense. Where an arbitrator fails to act without undue delay, a party may apply to court to have him removed (Model Law, Article 14).

    39. Costs and interest

  39. 39.Costs
    Are parties able to recover fees paid and costs incurred? Does the “loser pays” rule generally apply in your jurisdiction?

    Under HKAO, section 2GJ, the tribunal has power to direct which party is liable to pay the costs of the arbitration and on what basis. The usual order is that the losing party is required to pay the winning party's costs.

    The costs of the arbitration include the costs incurred by the parties in the course of the arbitration such as professional fees, the arbitrators' fees, fees paid to the arbitration institution and other costs of the hearing.

    Tribunal may impose a cap on the parties' recoverable costs in the arbitration, thereby providing a deterrent against the parties incurring excessive costs.

  40. 40.Interest on the award
    Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?

    Pursuant to HKAO, Sections 2GH and 2GI, the tribunal has power to award simple or compound interest on the principal sum at the same rates as are payable on Hong Kong court judgments. Interests on the award is calculated at the rate from time to time as determined by the Chief Justice of Hong Kong, which is currently at 8 per cent per annum.

    41. Challenging awards

  41. 41.Grounds for appeal
    Are there any grounds on which an award may be appealed before the courts of your jurisdiction?

    Arbitration awards are usually final and not subject to review on the merits. In Hong Kong, awards made in international arbitrations conducted in Hong Kong are not subject to appeal. See Hong Kong Halsbury’s Laws, 2008 Reissue, Vol 1(2) at para 25.176.

  42. 42.Other grounds for challenge
    Are there any other bases on which an award may be challenged, and if so what?

    The Model Law, Article 34 provides for six exclusive and essentially procedural grounds for recourse against an award.

    The party making the application must prove that – Article 34(2)(a)
    • a party to the arbitration agreement referred to in article 7 was under some incapacity; or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of this state;
    • the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case;
    • the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside;
    • the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this law from which the parties cannot derogate, or, failing such agreement, was not in accordance with this law;
    The court finds that – Article 34(2)(b)
    • the subject-matter of the dispute is not capable of settlement by arbitration under the law of this state; or
    • the award is in conflict with the public policy of this state.

  43. 43.Modifying an award
    Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?

    See questions 41 and 42.

    44. Enforcement in your jurisdiction

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

    Awards which have been properly set aside in the seat of arbitration will not be enforced in Hong Kong.

  45. 45.Trends
    What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?

    Enforcement of Arbitration Awards in Hong Kong from 2005 to 2009
    Number of cases where enforcement was sought Number of cases where enforcement was opposed
    21 Nil
    15 1
    13 Nil
    11 2
    21 3
    Source: HKIAC

    According to the statistics from HKIAC, intervention by the courts is very limited. The courts presume where the parties decide to submit to arbitration, they must bear the consequences of the choice and any intervention by the courts should be exceptional and minimal. The presumption that parties desire finality by arbitration should also be respected.

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

    When a private party initiates arbitral proceedings or seeks recognition and enforcement of an arbitral award against a state, it runs the risk that the state may decline to participate on the grounds of sovereign immunity or put up a plea of sovereign immunity to avoid such recognition or enforcement of the arbitral award. Hong Kong law follows the restrictive theory of immunity, so that a Hong Kong court will generally not be prepared to allow a state arbitration party to invoke foreign state immunity from jurisdiction to prevent a Hong Kong court from recognising an international arbitration award, see FG Hemisphere Associates v Democratic Republic of Congo [2010] 2 HKLRD 1148.

    47. Further considerations

  47. 47.Confidentiality
    To what extent are arbitral proceedings in your jurisdiction confidential?

    Parties to an arbitration are under an implied duty of confidence in relation to documents and information disclosed in and for the purposes of an arbitration. These include pleadings or statements of case, experts’ reports, proofs of evidence of witnesses of fact, and transcripts of evidence disclosed. An injunction may be sought to prevent disclosure of these documents and information, even in a subsequent trial.

    However, this principle is subject to the qualification that the award and its reasons may be disclosed where it is necessary to disclose them in order to protect the rights of a party to the arbitration vis-à-vis a third party, with the consent of the other party or pursuant to a court order.

  48. 48.Evidence and pleadings
    What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?

    See question 47.

    Absolute confidentiality of the evidence produced and pleadings filed in an arbitration may not be achieved. They may be disclosed where:

    • the court gives leave;

    • to do so is in the interests of justice or the public interest;

    • disclosure is reasonably necessary in order to protect the legitimate interests of a party to the arbitration; and

    • the party who produced the document gives express or implied consent.

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

    The HKIAC promotes compliance with the Code of Ethical Conduct of the Chartered Institute of Arbitrators (the Code). The IBA Rules go further than the Code. For example, Rule 4.2(b) requires that written disclosure of ‘any substantial social relationships with any party or any person known to be likely to be an important witness’.

    However, the Code and the IBA Rules only serve as guidelines, compliance of which are not mandatory but are good evidence of best practice.

  50. 50.Procedural expectations
    Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?

    No. Hong Kong law is broadly supportive of arbitration proceedings.

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