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Background to the new Arbitration Ordinance, Cap. 609
Under the now repealed Arbitration Ordinance (Cap. 341) ("the Repealed Ordinance"), there were separate regimes for the conduct of domestic and international arbitrations in Hong Kong. The regime for domestic arbitration was largely based on the United Kingdom ("UK") arbitration legislation, while the regime for international arbitration was based on the Model Law.
In 1998, the Hong Kong Institute of Arbitrators in co-operation with the HKIAC established a Committee on Hong Kong Arbitration Law on the reform of the arbitration law. The Committee issued a report in 2003 recommending that the then Arbitration Ordinance be redrafted and an unitary regime with the Model Law governing both domestic and international arbitrations be created. The Department of Justice ("DoJ") set up in September 2005 the Departmental Working Group to implement the Report of the Committee on Hong Kong Arbitration Law, chaired by the Solicitor General and comprising representatives of the legal profession, arbitration experts and relevant government officials, to formulate legislative proposals to implement the recommendations in the report of the Committee.
DoJ published a Consultation Paper on Reform of the Law of Arbitration in Hong Kong and draft Arbitration Bill ("Consultation Paper") on 31 December 2007 for a 6-month consultation on the reform of the law of arbitration in Hong Kong. With the draft Bill adopting the structure of the Model Law as its framework, the purposes of the reform are -
The text of the Consultation Paper is available at:
http://www.doj.gov.hk/eng/public/pdf/2007/arbitration.pdf
The consultation period ended on 30 June 2008, and DoJ reported to the Legislative Council Panel on Administration of Justice and Legal Services on 23 February 2009 on the outcome. A copy of the discussion paper is available at:
http://www.legco.gov.hk/yr08-09/english/panels/ajls/papers/aj0223cb2-899-6-e.pdf
For more detailed discussion, please see the paper on "Summary of Submissions and Comments on the Consultation Paper on Reform of the Law of Arbitration in Hong Kong and Draft Arbitration Bill" prepared by the Administration for the Bills Committee on Arbitration Bill:
http://www.legco.gov.hk/yr08-09/english/bc/bc59/papers/bc590916cb2-2469-3-e.pdf
The Arbitration Bill was introduced into the Legislative Council in June 2009. A Bills Committee was formed by the Council to study the Bill. The Bills Committee held 15 meetings with the Administration and received views from eight deputations at one of the meetings. The Report of the Bills Committee, which sets out the deliberations of the Bills Committee, is available at:
http://www.legco.gov.hk/yr10-11/english/hc/papers/hc1022cb2-83-e.pdf
The new Arbitration Ordinance, Cap. 609 was enacted by the Legislative Council on 10 November 2010 ("the Ordinance") and the new law came into effect on 1 June 2011. Please click here to read the text of the Arbitration Ordinance (Cap. 609).
Attractive Features of the New Law on Arbitration
The Ordinance has the following attractive features:
Clear, certain and accessible arbitration law based on the Model Law
Please see more detailed discussion in the paper on the "Rationale and Justifications for the Drafting Approach of the Arbitration Bill" prepared by the Administration for the Bills Committee on Arbitration Bill. The paper is available at:
http://legco.gov.hk/yr08-09/english/bc/bc59/papers/bc590916cb2-2469-1-e.pdf
Incorporation of recent Model Law initiatives
Protection of confidentiality in arbitration proceedings and related court hearing
Please see more detailed discussion in the paper on the confidentiality provisions and related issues of the Arbitration Bill prepared by the Administration for the Bills Committee on Arbitration Bill. The paper is available at:
http://legco.gov.hk/yr08-09/english/bc/bc59/papers/bc590430cb2-1404-1-e.pdf
Provisions for a fair and speedy method of resolution of dispute by arbitration with minimal court intervention
Please see more detailed discussion in paragraphs 8 to 16 under the heading of "ways in which the provisions of the Arbitration Bill could facilitate the fair and speedy resolution of disputes" of the paper prepared by the Administration for the Bills Committee on Arbitration Bill. The paper is available at:
http://legco.gov.hk/yr08-09/english/bc/bc59/papers/bc591005cb2-2546-3-e.pdf
Automatic opt-in mechanism to cater for the special circumstances of the construction industry
In the legislative process, deputations from the construction industry pointed out that under the legislation then, a domestic subcontract in the construction industry did not need to expressly refer to the domestic regime as it would automatically apply. Without an express opt-in under the new Ordinance, all subcontracts would have been governed by the international unitary regime. Thus, the status quo of local construction subcontractors would immediately change when the new Ordinance came into force. In response, the Administration introduced an automatic opt-in mechanism for the construction industry: under section 100 of the Ordinance, all the opt-in provisions (under Schedule 2) will automatically apply to an arbitration agreement entered into before, or at any time within a period of 6 years after, the commencement of the Ordinance and which has provided that arbitration under the agreement is a domestic arbitration. Schedule 2 of the Ordinance includes provisions for:
Moreover, under section 101 of the Ordinance, the opt-in provisions also apply to arbitration agreement (if any) under subcontracts, if the main construction contracts contain arbitration agreement to which the opt-in provisions automatically apply. However, this is not applicable to "non-local subcontractors" to avoid opt-in provisions being imposed on unwary non-local subcontractors, thereby undermining Hong Kong's reputation as an international arbitration centre.
Please see more detailed discussion in the paper of "Arbitration Bill gazetted in June 2009 - Automatic Opt-in for Subcontractors" prepared by the Administration for the Bills Committee on Arbitration Bill. The paper is available at:
http://legco.gov.hk/yr08-09/english/bc/bc59/papers/bc590512cb2-1477-3-e.pdf
Further information
Further information about arbitration in Hong Kong may be obtained from:
Legal Policy Division
Department of Justice
4/F, High Block
Queensway Government Offices
66 Queensway, Hong Kong
Tel: 852 2867 2189
Fax: 852 2180 9928
E-mail: lpd@doj.gov.hk
Web Site: www.doj.gov.hk
The Secretary-General
Hong Kong International Arbitration Centre
38/F Two Exchange Square
8 Connaught Place
Hong Kong
Tel: 852 2525 2381
Fax: 852 2524 2171
E-mail: adr@hkiac.org
Web Site: www.hkiac.org