Challenging & Replacing an Arbitrator

The steps involved in challenging and replacing an arbitrator in proceedings administered in accordance with the 2013 HKIAC Administered Arbitration Rules are set out below. (PDF version available here)

1. The requirements which must be satisfied for claims under multiple contracts to be brought in the same proceedings are set out in Art. 29. Unless otherwise agreed by the parties, Art. 29 will only apply to arbitrations commenced in accordance with an arbitration agreement entered into after 1 November 2013 (see Art. 1.4).

2. Art. 4: the Notice of Arbitration must be submitted to HKIAC and also served by Claimant on all other parties; it should have certain content (see Art. 4.3) and be accompanied by payment of the Registration Fee (see Art. 4.4, Sch. 1 and the Schedule of Fees); it may include the Statement of Claim (see Art. 4.6 and 16).

3. Art. 5: the Answer to the Notice of Arbitration must be submitted to HKIAC and also served by Respondent on all other parties within 30 days from Respondent’s receipt of the Notice of Arbitration; it should have certain content (see Art. 5.1) and may include the Statement of Defence (see Art. 5.3 and 17). Any counterclaim or set-off defence must, to the extent possible, be raised with Respondent’s Answer to the Notice of Arbitration (see Art. 5.4).

4. Art. 40 and the Practice Notes on Arbitral Tribunal's Fees, Expenses, Terms and Conditions Based on Schedules 2 and 3 Para. 7.1: as soon as practicable, and in any event within 15 days, after receipt of the Notice of Arbitration by Respondent, HKIAC will request Claimant and Respondent to deposit an advance for costs; in principle this will be an equal amount, however, where a Respondent submits a counterclaim, or it otherwise appears appropriate in the circumstances, HKIAC may request separate deposits. HKIAC may request further deposits from each party within 15 days from receipt of a counterclaim or set-off defence (see Practice Notes on Arbitral Tribunal's Fees, Expenses, Terms and Conditions Based on Schedules 2 and 3 Para. 7.2). Supplementary deposits may be requested during the course of the arbitration.

5. See Art. 7, 8, 9, 10 and 11. See also flowchart “The Steps in an HKIAC Administered Arbitration" No party or its representatives may have any ex parte communication relating to the arbitration with any arbitrator, or with any candidate to be designated as arbitrator by a party, except to advise the candidate of the general nature of the dispute, to discuss the candidate's qualifications, availability or independence, or to discuss the suitability of candidates for the designation of a third arbitrator, where the parties or party-designated arbitrators are to designate that arbitrator. No party or its representatives may have any ex parte communication relating to the arbitration with any candidate for the presiding arbitrator (see Art. 11.5).

6. Art. 9: designations of any arbitrator, whether made by the parties or the arbitrators, are subject to confirmation by HKIAC, upon which the appointments will become effective. See also Art. 10 and 11.1 to 11.4 for the applicable terms and required qualifications for confirmation.

7. Art. 11.4: before confirmation, a prospective arbitrator must (a) sign a statement confirming his or her availability to decide the dispute and his or her impartiality and independence; and (b) disclose any circumstances likely to give rise to justifiable doubts as to his or her impartiality or independence. An arbitrator, once confirmed and throughout the arbitration, must disclose without delay any such circumstances to the parties unless they have already been informed by him or her of these circumstances. A Tribunal confirmed under the Rules must be and remain at all times impartial and independent of the parties (see Art. 11.1).

8. Art. 5.6: once the Registration Fee has been paid and the Tribunal confirmed, HKIAC will transmit the case file to the Tribunal.

9. See Art. 11.6 and Practice Note on the Challenge of an Arbitrator (the “Practice Note”) Para. 2.

10. Art. 11.7 and Practice Note Para. 3: a party who intends to challenge an arbitrator must send notice of its challenge within 15 days after the confirmation of that arbitrator has been notified to the challenging party or within 15 days after that party became aware or ought reasonably to have become aware of the circumstances giving rise to the challenge. A party may challenge the arbitrator designated by it or in whose appointment it has participated only for reasons of which it becomes aware after the designation has been made (see Art. 11.6 and Practice Note Para. 2).

11. A challenge to an arbitrator (the "Challenged Arbitrator") under the Rules will be determined by HKIAC in accordance with the procedures set out in the Practice Note. The notification (the “Notice of Challenge”) must be in writing and must state the reasons for the challenge (see Art. 11.8 and Practice Note Para. 4(a)). The grounds of a challenge will, in principle, be limited to those set out in the Notice of Challenge. The challenging party may only amend or supplement the grounds of challenge if HKIAC considers it appropriate to allow such amendment having regard to the circumstances of the case (see Practice Note Para. 8). The challenge must be notified to HKIAC, all other parties, the arbitrator who is challenged and the other members of the Tribunal (see Art. 11.8 and Practice Note Para. 3). The Notice of Challenge must be accompanied by payment of a non-refundable Challenge Registration Fee of HKD 50,000 on account of HKIAC's fees and expenses. If the party submitting the Notice of Challenge fails to pay the Challenge Registration Fee the challenge will be dismissed (see Practice Note Para. 4(b)).

12. See Art. 11.9 and Practice Note Para. 7: pending determination of the challenge by HKIAC, the Tribunal (including the Challenged Arbitrator) may continue the arbitration.

13. See Art. 11.9 and Practice Note Para. 7. If an arbitrator withdraws or a party agrees to a challenge under Article 11.9, no acceptance of the validity of any ground for challenge will be implied (see Art. 11.10).

14. Art. 12.1: where an arbitrator has been successfully challenged, a substitute arbitrator will be appointed pursuant to the rules that were applicable to the appointment of the arbitrator being replaced. These rules will apply even if during the process of appointing the arbitrator being replaced, a party had failed to exercise its right to designate or to participate in the appointment. However, if, at the request of a party, HKIAC determines that, in view of the exceptional circumstances of the case, it would be justified for a party to be deprived of its right to designate a substitute arbitrator, HKIAC may, after giving an opportunity to the parties and the remaining arbitrators to express their views (i) appoint the substitute arbitrator; or (ii) after the proceedings are declared closed under Article 30.1, authorise the other arbitrators to proceed with the arbitration and make any decision or award (see Art. 12.2).

15. Art. 11.9 and Practice Note Para. 7: unless the Challenged Arbitrator withdraws or the non-challenging party agrees to the challenge within 15 days of receipt of the Notice of Challenge, HKIAC will determine the challenge.

16. Practice Note Para. 9: following receipt of a Notice of Challenge, all other parties to the arbitration and the Challenged Arbitrator must submit an Answer to the Notice of Challenge, within such time as HKIAC will direct. Copies of any Answer to the Notice of Challenge must be submitted to HKIAC, all other parties to the arbitration, the Challenged Arbitrator and, where applicable, the other members of the Tribunal (see Practice Note Para. 11).

17. Practice Note Para. 10: the challenging party will be given, within such time as HKIAC directs, an opportunity to comment on the Answers to the Notice of Challenge. Copies of any comments made on the Answer to the Notice of Challenge must be submitted to HKIAC, all other parties to the arbitration, the Challenged Arbitrator and, where applicable, the other members of the Tribunal (see Practice Note Para. 11).

18. Practice Note Para. 12: HKIAC will determine the challenge on the basis of written evidence and written submissions alone, unless it decides that it is appropriate to hold one or more hearings.

19. Practice Note Para. 13: HKIAC’s determination of the challenge will be given to the parties, the Challenged Arbitrator and, where applicable, the other members of the Tribunal in writing. HKIAC may, in its sole discretion, decide whether to support such determination with reasons. Where the seat of the arbitration is Hong Kong and HKIAC rejects the challenge, the challenging party may request the Hong Kong Court of First Instance to decide the challenge within 30 days after having received HKIAC’s decision (see Art. 13(3) of the UNCITRAL Model Law).

20. Art. 12.3: if an arbitrator is replaced, the arbitration will resume at the stage where the arbitrator was replaced or ceased to perform his or her functions, unless the Tribunal decides otherwise.

21. See flowchart “The Steps in an HKIAC Administered Arbitration"

22. Art. 30.1: when it is satisfied that the parties have had a reasonable opportunity to present their case, the Tribunal will declare the proceedings closed. Thereafter, no further submission or argument may be made, or evidence produced. The Tribunal may re-open the proceedings before the award is made in exceptional circumstances (see Art. 30.2).

23. See Art. 10.3 and Schedule 1. HKIAC and the Tribunal have a lien over any awards issued by the Tribunal to secure the payment of their outstanding fees and expenses, and may accordingly refuse to release any such awards to the parties until all such fees and expenses have been paid in full (see Paragraph 7 of Schedules 2 and 3).

24. Art. 34: awards will be in writing and are final and binding on the parties (see Art. 34.2); by agreeing to the HKIAC Administered Arbitration Rules parties undertake to comply without delay with any award or order of the Tribunal (see Art. 34.3). Any award will state the reasons upon which it is based unless the parties have agreed that no reasons are to be given (see Art. 34.4).