HKIAC Administered Arbitration Rules 2008

Effective from 1 September 2008

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Section V. THE AWARD

Article 29 - Decisions
29.1 When there are three arbitrators, any award or other decision of the arbitral tribunal shall be made by a majority of the arbitrators. If there is no majority, the award shall be made by the presiding arbitrator alone.

29.2 With the prior authorisation of the arbitral tribunal, the presiding arbitrator may decide questions of procedure on his own.

Article 30 - Form and Effect of the Award
30.1 In addition to making a final award, the arbitral tribunal shall be entitled to make interim, interlocutory, or partial awards. If appropriate, the arbitral tribunal may also award costs in awards that are not final.

30.2 Awards shall be made in writing and shall be final and binding on the parties. The parties undertake to carry out any award without delay.

30.3 An award shall state the reasons upon which it is based.

30.4 An award shall be signed by the arbitrators and it shall contain the date on which and the place where the award was made. Where there are three arbitrators and one or two of them fail(s) to sign, the award shall state the reason for the absence of the signature(s).

30.5 An award shall be affixed with the seal of the HKIAC.

30.6 Publication of awards is governed by Article 39.3.

30.7 Subject to any lien to which the arbitrators may be entitled, originals of the award signed by the arbitrators and affixed with the seal of the HKIAC shall be communicated to the parties and to the HKIAC Secretariat by the arbitral tribunal. The HKIAC Secretariat shall retain a copy of the award.

Article 31 - Applicable Law, Amiable Compositeur
31.1 The arbitral tribunal shall decide the case in accordance with the rules of law agreed upon by the parties or, in the absence of a choice of law, by applying the rules of law with which the dispute has the closest connection.

31.2 The arbitral tribunal shall decide as amiable compositeur or ex aequo et bono only if the parties have expressly authorised the arbitral tribunal to do so.

31.3 In all cases, the arbitral tribunal shall decide the case in accordance with the terms of the contract and shall take into account the usages of the trade applicable to the transaction.

Article 32 - Settlement or Other Grounds for Termination
32.1 If, before the award is made, the parties agree on a settlement of the dispute, the arbitral tribunal shall either issue an order for the termination of the arbitral proceedings or, if requested by both parties and accepted by the tribunal, record the settlement in the form of an arbitral award on agreed terms. The arbitral tribunal is not obliged to give reasons for such an award.

32.2 If, before the award is made, the continuation of the arbitral proceedings becomes unnecessary or impossible for any reason not mentioned in paragraph 1, the arbitral tribunal shall issue an order for the termination of the proceedings. The arbitral tribunal shall issue such an order unless a party raises justifiable objection, having been given a reasonable opportunity to comment upon the proposed course of action.

32.3 Copies of the order for termination of the arbitral proceedings or of the arbitral award on agreed terms, signed by the arbitrators, shall be communicated by the arbitral tribunal to the parties and to the HKIAC Secretariat. Where an arbitral award on agreed terms is made, the provisions of Articles 30.2 and 30.4 to 30.7, shall apply.

Article 33 - Interpretation of the Award
33.1 Within 30 days after the receipt of the award, either party, with notice to the other party, may request that the arbitral tribunal give an interpretation of the award. The arbitral tribunal may set a time limit, normally not exceeding 30 days, for the other party to comment on such request.

33.2 Any interpretation considered appropriate by the arbitral tribunal shall be given in writing within 45 days after the earlier of: (a) receipt of the other party's comments on the request for interpretation; or (b) expiry of the time limit set by the tribunal pursuant to Article 33.1 for the other party to provide such comments.  The interpretation shall form part of the award and the provisions of Articles 30.2 to 30.7, shall apply.

Article 34 - Correction of the Award
34.1 Within 30 days after the receipt of the award, either party, with notice to the other party, may request the arbitral tribunal to correct in the award any errors in computation, any clerical or typographical errors, or any errors of similar nature. The arbitral tribunal may set a time limit, normally not exceeding 30 days, for the other party to comment on such request.

34.2 The tribunal shall make any corrections it considers appropriate within 45 days after the earlier of: (a) the receipt of the other party's comments on the request for correction; or (b) the expiry of the time limit set by the tribunal pursuant to Article 34.1 for the other party to provide such comments.

34.3 The arbitral tribunal may within 30 days after the communication of the award make such corrections on its own initiative.

34.4 Such corrections shall be in writing, and the provisions of Articles 30.2 to 30.7, shall apply.

Article 35 - Additional Award
35.1 Within 30 days after the receipt of the award, either party, with notice to the other party, may request the arbitral tribunal to make an additional award as to claims presented in the arbitral proceedings but omitted from the award. The arbitral tribunal may set a time limit, normally not exceeding 30 days, for the other party to comment on such request.

35.2 If the arbitral tribunal considers the request for an additional award to be justified and considers that the omission can be rectified without any further hearings or evidence, it shall complete its award within 60 days after the receipt of the request.

35.3 When an additional award is made, the provisions of Articles 30.2 to 30.7, shall apply.

Article 36 - Fees and Costs
36.1 The arbitral tribunal shall determine the costs of arbitration in its award. The term "costs" includes only:

  • the fees of the arbitral tribunal to be determined in accordance with Articles 36.2 and 36.3;
  • the travel and other expenses incurred by the arbitrators;
  • the costs of expert advice and of other assistance required by the arbitral tribunal;
  • the travel and other expenses of witnesses to the extent such expenses are approved by the arbitral tribunal;
  • the costs for legal representation and assistance if such costs were claimed during the arbitral proceedings, and only to the extent that the arbitral tribunal determines that the amount of such costs is reasonable;
  • the Registration Fee and Administrative Fees payable to the HKIAC in accordance with the Schedule of Fees and Costs of Arbitration attached hereto.

36.2 The fees of the arbitral tribunal shall be determined, at the option of the parties, either (a) in conformity with Section 3 of the Schedule of Fees and Costs of Arbitration attached hereto, or (b) in accordance with the fee arrangements agreed between the appointing party or parties and the arbitrator so appointed (and, in the case of the third arbitrator in a three-member tribunal, between the parties and such third arbitrator). The method for determining the fees of the arbitral tribunal shall be notified to the HKIAC Secretariat within 30 days from the date of the Notice of Arbitration. Where the parties fail to agree on the method for determining the fees of the arbitral tribunal by such date, then the fees shall be determined in accordance with the fee arrangements agreed between the appointing party or parties and the arbitrator so appointed.

36.3 Where the fees of the arbitral tribunal are determined in conformity with the Schedule of Fees and Costs of Arbitration attached hereto, such fees shall be fixed by the HKIAC Council in accordance with the Schedule and the following rules:

  • the fees of the arbitral tribunal shall be reasonable in amount, taking into account the amount in dispute, the complexity of the subject-matter, the time spent by the arbitrators and any other relevant circumstances of the case, including, but not limited to, the discontinuation of the arbitral proceedings in case of settlement or other reasons. In the event of such discontinuation, the fees of the arbitral tribunal may be less than the minimum amount provided for in the Schedule of Fees and Costs of the Arbitration;
  • in general, the Chairman shall receive 40% and each co-arbitrator 30% of the total fees, unless the arbitral tribunal otherwise agrees.

36.4 Except as provided in Article 36.5, the costs of arbitration shall in principle be borne by the unsuccessful party. However, the arbitral tribunal may apportion all or part of such costs between the parties if it determines that apportionment is reasonable, taking into account the circumstances of the case.

36.5 With respect to the costs of legal representation and assistance referred to in Article 36.1(e), the arbitral tribunal, taking into account the circumstances of the case, shall be free to determine which party shall bear such costs or may apportion such costs between the parties if it determines that apportionment is reasonable.

36.6 When the arbitral tribunal issues an order for the termination of the arbitral proceedings or makes an award on agreed terms, it or the HKIAC shall determine the costs of arbitration referred to in Article 36.1 and Article 36.2, in the text of that order or award.

36.7 No additional fees may be charged by an arbitral tribunal for interpretation or correction or completion of its award under Articles 33 to 35.

Article 37 - Deposits for Costs
37.1 On the establishment of the arbitral tribunal, the HKIAC Secretariat shall request each party to deposit with the HKIAC an equal amount as an advance for the costs referred to in Article 36.1, paragraphs (a), (b), (c) and (f). The HKIAC Secretariat shall provide a copy of such request to the arbitral tribunal.

37.2 Where a Respondent submits a counterclaim, or it otherwise appears appropriate in the circumstances, the HKIAC Secretariat may establish separate deposits.

37.3 During the course of the arbitral proceedings the HKIAC Secretariat may request the parties to make supplementary deposits with the HKIAC. The HKIAC Secretariat shall provide a copy of such request to the arbitral tribunal.

37.4 If the required deposits are not paid in full to the HKIAC within 30 days after the receipt of the request, the HKIAC Secretariat shall so inform the parties in order that one or another of them may make the required payment. If such payment is not made, the arbitral tribunal may order the suspension or termination of the arbitral proceedings or continue with the proceedings on such basis as the tribunal sees fit.

37.5 In its final award, the arbitral tribunal shall render an accounting to the parties of the deposits received by the HKIAC Secretariat. Any unexpended balance shall be returned to the parties by the HKIAC Secretariat.

37.6 Other provisions regarding fees and costs of the arbitration are set out in the Schedule of Fees and Costs of Arbitration which is attached hereto and forms an integral part of these Rules.

Section VI. OTHER PROVISIONS

Article 38 - Expedited Procedure
38.1 Unless the parties agree otherwise or the HKIAC Secretariat decides otherwise taking into account all relevant circumstances, the following provisions shall apply to all cases in which the amount in dispute representing the aggregate of the claim and the counterclaim (or any set-off defence) does not exceed USD 250,000 (Two Hundred Fifty Thousand United States Dollars):

  • the arbitral proceedings shall be conducted in accordance with the Expedited Procedure set forth in Article 38.2;
  • the case shall be referred to a sole arbitrator, unless the arbitration agreement provides for a three-member arbitral tribunal;
  • if the arbitration agreement provides for a three-member arbitral tribunal, the HKIAC Secretariat shall invite the parties to agree to refer the case to a sole arbitrator. If the parties do not agree to refer the case to a sole arbitrator, the fees of the three arbitrators shall be determined in accordance with the Schedule of Fees and Costs of Arbitration attached hereto.

38.2 If the provisions of Article 38.1 are applicable, the arbitral proceedings shall be conducted in accordance with an Expedited Procedure based upon the foregoing provisions of these Rules, subject to the following changes:

  • the HKIAC Secretariat may shorten the time limits for the appointment of arbitrators under Articles 7.1, 7.2 and 8.2;
  • after the submission of the Answer to the Notice of Arbitration, the parties shall in principle be entitled to submit one Statement of Claim and one Statement of Defence (and Counterclaim) and, where applicable, one Statement of Defence in reply to the Counterclaim;
  • the arbitral tribunal shall decide the dispute on the basis of documentary evidence only, unless it decides that it is necessary to hold one or more hearings;
  • the award shall be made within six months from the date when the HKIAC Secretariat transmitted the file to the arbitral tribunal. In exceptional circumstances, the HKIAC Secretariat may extend this time limit;
  • the arbitral tribunal shall state the reasons upon which the award is based in summary form, unless the parties have agreed that no reasons are to be given.

Article 39 - Confidentiality
39.1 Unless the parties expressly agree in writing to the contrary, the parties undertake to keep confidential all matters and documents relating to the arbitral proceedings, including the existence of the proceedings as well as all correspondence, written statements, evidence, awards and orders not otherwise in the public domain, save and to the extent that a disclosure may be required of a party by a legal or regulatory duty, to protect or pursue a legal right or to enforce or challenge an award in legal proceedings before a judicial authority. This undertaking also applies to the arbitrators, the tribunal-appointed experts, the secretary of the arbitral tribunal and the HKIAC Secretariat and Council.

39.2 The deliberations of the arbitral tribunal are confidential.

39.3 An award may be published, whether in its entirety or in the form of excerpts or a summary, only under the following conditions:

  • a request for publication is addressed to the HKIAC Secretariat;
  • all references to the parties' names are deleted; and
  • no party objects to such publication within the time limit fixed for that purpose by the HKIAC Secretariat. In the case of an objection, the award shall not be published.

Article 40 - Exclusion of Liability
40.1 None of the HKIAC, the HKIAC Council, the HKIAC Secretariat or their staff, arbitrators, tribunal-appointed experts or the secretary of the arbitral tribunal shall be liable for any act or omission in connection with an arbitration conducted under these Rules, save where the act was done or omitted to be done dishonestly.

40.2 After the award has been made and the possibilities of correction, interpretation and additional awards referred to in Article 33 to Article 35 have lapsed or been exhausted, neither the HKIAC (including the HKIAC Council, the HKIAC Secretariat or any of their staff) nor the arbitrators, the tribunal-appointed experts or the secretary of the arbitral tribunal shall be under an obligation to make statements to any person about any matter concerning the arbitration, nor shall a party seek to make any of these persons a witness in any legal or other proceedings arising out of the arbitration.

SCHEDULE OF FEES AND COSTS OF ARBITRATION

(All amounts are in United States Dollars, hereinafter "USD")
(Effective 1st September 2008)

1. Registration Fee
1.1 When submitting a Notice of Arbitration, the Claimant shall pay a Registration Fee of USD 1,000.
1.2 If the Claimant fails to pay the Registration Fee, the HKIAC shall not proceed with the arbitration.
1.3 The Registration Fee is not refundable.
1.4 The above provisions shall also apply to any counterclaim.

2. The HKIAC's Administrative Fee
2.1 The HKIAC's Administrative Fee shall be charged in accordance with the following table

ADMINISTRATIVE FEE

Sum in dispute (in USD)Administrative fee(*)
up to 50,000USD 1,500
from 50,001 to 100,0000.70%
from 100,001 to 500,0000.60%
from 500,001 to 1,000,0000.40%
from 1,000,001 to 2,000,0000.20%
from 2,000,001 to 5,000,0000.12%
from 5,000,001 to 100,000.0000.06%
from 10,000,001 to 50,000,0000.03%
over 50,000,001USD26,850

(*) The table under Section 4.1 below indicates the resulting administrative fee payable in USD after the appropriate calculations have been made.

3. The Arbitrators' Fees
3.1 Where both parties agree to the application of this Schedule for to the determination of the Arbitrators' Fees, Arbitrators' Fees shall be charged in accordance with the following table:

ARBITRATORS' FEES
(PER ARBITRATOR)

Sum in dispute (in USD)
Fees(**)
Minimum
Maximum
up to 50,000
USD2,000
14.00%
up to 50,001 to 100,000
2.50%
10.00%
from 100,001 to 500,000
1.00%
5.00%
from 500,001 to 1,000,001
0.70%
2.60%
from 1,000,001 to 2,000,000
0.40%
1.40%
from 2,000,001 to 5,000,000
0.25%
0.70%
from 5,000,001 to 10,000,000
0.075%
0.40%
from 10,000,001 o 50,000,000
0.05%
0.20%
from 50,000,001 to 80,000,000
0.025%
0.14%
from 80,000,01 to 100,000,000
0.012%
0.12%
over 100,000,000
0.01%
0.06%

(*) The table under Section 4.1 below indicates the resulting range of fees payable per arbitrator after the appropriate calculations have been made.

3.2 The arbitrators' fees shall cover the activities of the arbitral tribunal from the time the file is transmitted to the tribunal until the last award.

4. Computation of Fees
4.1 The administrative fees and arbitrators' fees payable shall be calculated in accordance with the following charts and fixed by the HKIAC Council. The fees payable for each successive range in this chart are added together.

COMPUTATION OF FEES

SUM IN DISPUTE (in USD)A. ADMINISTRATIVE FEES(*)  (in USD)B. ARBITRATOR'S FEES (**) (PER ARBITRATOR) (in USD)
MinimumMaximum
up to 50,0001,5002,00014.00% of amount in dispute
up to 50,001 to 100,0001,500 + 0.70% of amt. over 50,0002,000 + 2.50% of amt. over 50,000 7,000 + 10.00% of amt. over 50,000
from 100,001 to 500,0001,850 + 0.60% of amt. over 100,0003,250 + 1.00% of amt. over 100,000 12,000 + 5.00% of amt. over 100,000
from 500,001 to 1,000,0014,250 + 0.40% of amt. over 500,000 7,250 + 0.70% of amt. over 500,00032,000 + 2.60% of amt. over 500,000
from 1,000,001 to 2,000,0006,250 + 0.20% of amt. over 1,000,00010,750 + 0.40% of amt. over 1,000,00045,000 + 1.40% of amt. over 1,000,000
from 2,000,001 to 5,000,0008,250 + 0.12% of amt. over 2,000,00014,750 + 0.25% of amt. over 2,000,00059,000 + 0.70% of amt. over 2,000,000
from 5,000,001 to 10,000,00011,850 + 0.06% of amt. over 5,000,00022,250 + 0.075% of amt. over 5,000,00080,000 + 0.40% of amt. over 5,000,000
from 10,000,001 to 50,000,00014,850 + 0.03% of amt. over 10,000,000 26,000 + 0.05% of amt. over 10,000,000100,000 + 0.20% of amt. over 10,000,000
from 50,000,001 to 80,000,00026,850 46,000 + 0.025% of amt. over 50,000,000180,000 + 0.14% of amt. over 50,000,000
from 80,000,01 to 100,000,00026,85053,500 + 0.012% of amt. over 80,000,000222,000 + 0.12% of amt. over 80,000,000
over 100,000,00026,85055,900 + 0.01% of amt. over 100,000,000246,000 + 0.06% of amt. over 100,000,000

(*)(**) See preceding page

4.2 The HKIAC's Administrative Fees and the Arbitrators' Fees may exceed the amounts set out in the scale above where in the opinion of the HKIAC Council there are exceptional circumstances which shall include and not be limited to the parties conducting the arbitration in a manner not reasonably contemplated by the arbitral tribunal at the time of appointment.

4.3 Claims and counterclaims are added for the determination of the amount in dispute. The same rule applies to set-off defences, unless the arbitral tribunal, after consulting with the parties, concludes that such set-off claims will not require significant additional work.

4.4 Interest claims shall not be taken into account for the calculation of the amount in dispute. However, when the interest claims exceed the amounts claimed in principal, the interest claims alone shall be considered in calculating the amount in dispute.

4.5 Currencies other than the United States Dollars shall be converted into United States Dollars at the average rate of exchange between the date when the Notice of Arbitration is received by the HKIAC Secretariat and the date when the final award is made. For the purpose of determining the Registration Fee under Section 1 herein, the rate of exchange shall be that of the date when the Notice of Arbitration is received by the HKIAC Secretariat.

4.6 If the amount in dispute is not quantified, the HKIAC's Administrative Fees and the Arbitrators' Fees shall be fixed by the HKIAC Council, taking into account all relevant circumstances.

5. Arbitrators' Expenses
The expenses of the arbitrators shall relate to the actual disbursements for the arbitration, such as reasonable expenses relating to: travel (business class airfare, unless special arrangements have been agreed), accommodation, meals (if in home city, only meals among arbitrators are taken into account), taxi, communications costs, and any other costs related to the conduct of the proceedings (such as rental of hearing rooms, court reporting services, interpreters, etc.). The HKIAC may issue general guidelines to the arbitrators for the accounting of their expenses. The expenses of the arbitrators shall be invoiced and paid separately and are not included in the Arbitrators' Fees under Section 3 above.

6. Interest Earned on Deposits Made by the Parties
The HKIAC shall place the deposits made by the parties in interest bearing deposit account(s) at reputable licensed Hong Kong deposit-taking institution(s). In selecting the account(s), the HKIAC shall also have due regard to the possible need to make the deposited funds available immediately. Any interest earned shall be included in the final computation of the costs of the arbitration in favour of the party or parties having made the deposit or deposits so invested.

7. Interim Payments
The HKIAC may direct that interim payments shall be made from time to time out of funds held on deposit to cover the HKIAC's Administrative Fees and the Arbitrators' Fees and Expenses.

8. Parties Jointly and Severally Liable
The parties shall be jointly and severally liable to the arbitral tribunal and the HKIAC for the costs of the arbitration.

9. Lien on Award
The HKIAC and the arbitral tribunal shall have a lien over any awards issued by a tribunal to secure the payment of the costs referred to in Article 36.1, paragraphs (a), (b), (c) and (f), and may accordingly refuse to release any such awards to the parties until all such costs have been paid in full.

ACKNOWLEDGEMENTS
The HKIAC expresses its thanks to the following organisations and individuals for their advice and guidance in the preparation of these Rules: Mr. Peter Caldwell; Ms. Teresa Y.W. Cheng S.C.; Mr. Matthew Gearing; Ms. Sally Harpole; Mr. Graeme Johnston; Mr. Neil Kaplan C.B.E., Q.C.; Dr. Pierre Karrer; Mr. Jing Liu; Mr. Michael Moser; Mr. Robin Peard; Professor Michael Pryles; Ms. Kathryn Sanger; Mr. Christopher To; Dr. Markus Wirth; Mr. Philip Yang; the Department of Justice; the Hong Kong Bar Association; the Hong Kong Computer Society; the Hong Kong Construction Association; the Hong Kong Federation of Electrical and Mechanical Contractors Ltd.; the Hong Kong Federation of Insurers; the Hong Kong Institute of Arbitrators; the Hong Kong Institute of Architects; the Hong Kong Maritime Law Association; the Hong Kong Shipowners Association; the Law Society of Hong Kong and the Swiss Arbitration Association (ASA).

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