Rules as Appointing Authority (2019)

HKIAC is the default appointing authority for ad hoc arbitrations seated in Hong Kong. In that role, HKIAC performs the following functions under the Hong Kong Arbitration Ordinance (Cap 609) (the “Ordinance”):

• determining the number of arbitrators where the parties have not agreed on the number pursuant to section 23(3) of the Ordinance;
• appointing an arbitrator where the applicable appointment procedure fails to result in an appointment pursuant to section 24 of the Ordinance; and   
• appointing a mediator where the procedure specified in an arbitration agreement fails to result in an appointment pursuant to section 32(1) of the Ordinance.

Section 13(3) of the Ordinance authorises HKIAC to issue rules to facilitate its exercise of the functions above.

The Arbitration (Appointment of Arbitrators and Mediators and Decision on Number of Arbitrators) Amendment Rules 2019 (Cap 609C) (the “Rules”) came into force on 1 August 2019. The full text of the Rules is available here.  

Any party that seeks a decision or an appointment from HKIAC under the Rules must complete and submit the applicable form listed below pursuant to the Rules:

• Form 1 – Request for Appointment of Arbitrator
• Form 2 – Application for Decision on Number of Arbitrators
• Form 3 – Application for Appointment of Mediator

Rule 13(2A) of the Rules provides that, HKIAC may, if it considers reasonable in any particular case, waive any of the fees referred to in Rule 13(1). Pursuant to Rule 13(2A), HKIAC will charge a one-off fee of HK$8,000 for performing all its functions under the Ordinance in an arbitration in which the total amount in dispute is less than HK$2.5 million, unless HKIAC determines otherwise in appropriate circumstances.

For this purpose, HKIAC generally applies the following practice in determining the total amount in dispute:

• Claims and any counterclaims, cross claims or set-off defences are added for the determination of the total amount in dispute.  
• A claim for interest or costs shall not be taken into account for the calculation of the total amount in dispute, except where HKIAC determines that doing so would be appropriate.
• Where there are alternative claims, only the principal claim shall be taken into account for the calculation of the total amount in dispute, except where HKIAC considers it appropriate to take into account the amount of any alternative claim.
• If the amount in dispute is not quantified by any party, HKIAC will make a reasonable estimate taking into account the circumstances of the case.
• Amounts in currencies other than Hong Kong Dollars shall be converted into Hong Kong Dollars at the rate of exchange published by HSBC Bank on the date a request for HKIAC’s decision or appointment is submitted to HKIAC pursuant to the Rules.

Unless HKIAC directs otherwise, in an arbitration in which the total amount in dispute is less than HK$2.5 million, a one-off fee of HK$8,000 shall be paid by the party that submits the first request for HKIAC’s decision or appointment pursuant to the Rules.

HKIAC will not charge a further fee for any subsequent request submitted by any party in the arbitration unless HKIAC determines otherwise in appropriate circumstances.