Joining an Additional Party

International commercial relationships increasingly involve multiple parties and multiple contracts. The 2013 revisions to HKIAC's Administered Arbitration Rules ensure it, and tribunals appointed thereunder, have the ability to deal as flexibly as possible with complex disputes.

Previously, and as is still the case under other sets of arbitration rules, the joinder of third parties to an arbitration can only be ordered by a tribunal where there is written consent to the request to join. From November 2013, the power of the tribunal under the HKIAC Rules has been enhanced, extending the power to join to cover any additional party bound by a valid arbitration agreement under the Rules giving rise to the arbitration. Further, as well as requests by existing parties, a request for joinder is now also able to be made by an additional party.

In the interests of efficiency, should a request for joinder be submitted before the tribunal is constituted, HKIAC will have prima facie power to join such party, with any objection to jurisdiction being heard and decided by the tribunal after it has been constituted.

The steps involved in joining an additional party to an arbitration administered in accordance with the 2013 HKIAC Administered Arbitration Rules are set out below. (PDF version available here)

*  Other procedures, such as for the appointment of an Emergency Arbitrator, outlined in the flowchart “The Steps in an HKIAC Administered Arbitration", apply to the proceedings, unless otherwise stated.

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"

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

7. A party wishing to join an additional party to the arbitration must submit a Request for Joinder to HKIAC (see Art. 27.3). Likewise, a third party wishing to be joined as an additional party to an arbitration must also submit a Request for Joinder to HKIAC (see Art. 27.6). All Requests for Joinder must also be served on all other parties (and where applicable the Tribunal). It should have certain content (see Art. 27.4). HKIAC may adjust its Administrative Fees and the Tribunal's fees (where appropriate) after a Request for Joinder has been submitted (see Art. 27.14).

8. Art. 27.8: where HKIAC receives a Request for Joinder before the date on which the Tribunal is confirmed, HKIAC may join the additional party to the arbitration.

9. Art. 27.1: where HKIAC receives a Request for Joinder after the date on which the Tribunal is confirmed, the Tribunal has the power to allow an additional party to be joined to the arbitration.

10. Within 15 days of receiving the Request for Joinder, an additional party must submit to HKIAC an Answer to the Request for Joinder. It should have certain content (see Art. 27.5).

11. Within 15 days of receiving the Request for Joinder, the parties must submit to HKIAC their comments on the Request for Joinder. Such comments may have certain content as suggested in Art. 27.7.

12. The test applicable to the joinder of an additional party is set out in Art. 27.1 and 27.8.

13. HKIAC's decision on joinder is without prejudice to the admissibility or merits of any party's pleas (see Art 27.9). Any decision on joinder is without prejudice to Tribunal’s power to subsequently decide any relevant jurisdictional question (see Art. 27.2 and 27.8). Where an additional party is joined to the arbitration, the date on which the Request for Joinder is received by HKIAC will be deemed to be the date on which the arbitration in respect of the additional party commences (see Art. 27.10).

14. See Art. 27.11. The revocation of the appointment of an arbitrator is without prejudice to either the validity of any act done or order made by that arbitrator before his or her appointment was revoked or his or her entitlement to be paid his or her fees and expenses subject to Schedule 2 or 3 as applicable (see Art. 27.12).

15. See Art. 10 and 11.1 to 11.4 for the applicable terms and required qualifications for confirmation of the Tribunal.

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

17. 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).

18. See Art. 10.3 and Schedule 1. HKIAC may adjust its Administrative Fees and the Tribunal's fees (where appropriate) after a Request for Joinder has been submitted (see Art. 27.14). 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).

19. 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). They also waive any objection, on the basis of any decision to join an additional party to the arbitration, to the validity and/or enforcement of any award made by the Tribunal, in so far as such waiver can validly be made (see Art. 27.13). 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).