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HKIAC’s new rules addressing diversity and the environment a welcome step

The Hong Kong International Arbitration Centre’s (HKIAC) new administered arbitration rules encouraging arbitrators and parties to consider diversity, information security and environmental impacts are a step in the right direction, legal experts have said.

In its 2024 Administered Arbitration Rules (79-page / 528KB PDF) which recently came into effect, the HKIAC addressed diversity in the form of a new provision encouraging parties and arbitral tribunals to take diversity into account when designating arbitrators, and requiring the HKIAC to do the same when appointing arbitrators.

The new rules do not specify diversity criteria – such as age, experience, gender and nationality – with it instead being left to parties and co-arbitrators to decide what might best suit their case.

In another first for the HKIAC, the new rules require arbitral tribunals to consider environmental impact when making directions. The rules also give the tribunal discretion to adopt procedures ensuring information security, and allow for tribunals to make decisions, orders or awards in respect of breaches of information security measures after consulting with the parties.

Jennifer Wu, a commercial and technology disputes expert at Pinsent Masons, welcomed the implementation of the new rules.

“Diversity, greener arbitration and information security are all matters close to my heart,” Wu said. “Seeing the increase in cyber breaches across the world, and increasingly in APAC, it is important for parties and the arbitral tribunal to have in mind where the data is stored, how it is shared and the appropriate level of security during the arbitration to ensure the confidentiality obligation is upheld.”

“Where we can add affirmative actions to increase diversity and greener practices into the conduct of the arbitration, the question should be ‘why can’t we?’ rather than ‘why should we?’.”

According to the rules, the HKIAC will also have new powers in relation to the determination, review and adjustment of arbitrators’ fees and expenses.

The rules also provide ‘emergency arbitrators’ (EAs) with the power to make preliminary or interim orders before making their emergency decision which is usually issued 14 days from the date of transmission of the file to the EA. The rules provide that the EA may proceed to render its emergency decision within the mandated period, even after the case file has been transmitted to the tribunal.

Rachel Turner, an arbitration expert at Pinsent Masons, said the new powers relating to the determination, review and adjustment of arbitrators’ fees and expenses indicated the HKIAC’s commitment to the integrity of the service it provides in the rare situations where questions are raised.   

“The provisions relating to emergency arbitration permit rapid action to be taken to prevent harm whilst the EA determines the application before it. Previously the time taken was cited as a disadvantage when compared to an application for interim relief to court.  The new rules will support this developing and increasingly popular area of arbitration practice,” she added.

Further provisions and amendments in the HKIAC’s latest administered arbitration rules intend to provide an enhanced user experience for parties agreeing HKIAC administered arbitration in their arbitration agreements. 

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