Hong Kong passes amendments to Arbitration Ordinance

On 10 July, the Legislative Council of Hong Kong passed the Arbitration (Amendment) Bill 2013 (click here for our earlier post on the Bill).

The Arbitration (Amendment) Ordinance 2013 introduces a number of changes to the 2011 Arbitration Ordinance (Cap. 609), aimed at ensuring Hong Kong remains at the forefront of modern arbitral practice.

The amendments to the Arbitration Ordinance include:

• New provisions allowing Hong Kong courts to enforce relief granted by an emergency arbitrator, whether made in or outside Hong Kong.
• Implementation of the Arrangement Concerning Reciprocal Recognition and Enforcement of Arbitral Awards between the Hong Kong SAR and the Macao SAR, signed in January 2013.
• Amendments to the provisions for taxation of arbitration costs by the Hong Kong courts.
• Inclusion of five new New York Convention signatories in the relevant Schedule

The amendments took effect on 19 July 2013, with the exception of the Hong Kong/Macao mutual enforcement arrangements, which will come into force at a later date, to be notified in the Hong Kong Government Gazette.

The new legislation amends the Arbitration Ordinance (Cap. 609) to include:

• New ss. 22A and 22B, allowing the Hong Kong courts to enforce relief granted by an emergency arbitrator. These provisions were introduced in response to HKIAC's updated Administered Arbitration Rules, which come into force on 1 November 2013 and include a new emergency arbitrator procedure. However, the provisions also allow the Hong Kong courts to support parties who have obtained emergency relief outside Hong Kong, and want to enforce it in Hong Kong. Emergency arbitration is one of the newest trends in international arbitration; in addition to HKIAC, the ICC, SIAC and CIETAC have all introduced emergency procedures into their arbitration rules in recent years.
• New ss. 98A-98D, implementing the Arrangement Concerning Reciprocal Recognition and Enforcement of Arbitral Awards between the Hong Kong SAR and the Macao SAR, signed in January 2013. Under the new regime, a Macao award will be enforceable in Hong Kong either by action in the Court, or in the same manner as a Hong Kong or other non-NY Convention arbitral award (with leave of the court). If a Macao award is not fully satisfied by enforcement proceedings in Macao, the outstanding part of the award is enforceable in Hong Kong. The Ordinance now includes grounds for refusal to enforce a Macao award, which are in line with the principles for refusal to enforce under the New York Convention.

It is not uncommon for a party holding a Hong Kong award in its favour to want to enforce against assets in Macao, so this is a welcome development, particularly viewed alongside a similar arrangement – already in force – between Hong Kong and mainland China. The new sections of the Arbitration Ordinance are broadly similar to ss. 92-98, which implement the Hong Kong/mainland China arrangement.

• S.75 is amended to provide that where the costs of an arbitration are to be taxed by the court, they will be taxed on a "party and party" basis under rule 28(2) of Order 62, Rules of the High Court.
• Five new territories are added to the Schedule to the Arbitration (Parties to New York Convention) Order (Cap. 609 sub. leg. A). The additions are: Liechtenstein, Myanmar, Sao Tome and Principe, Fiji and Tajikistan, all of which have recently acceded to the New York Convention, taking the number of signatories over 150.

The Amendment Ordinance also makes a number of technical amendments to the Ordinance, to improve the language and "readability" of the relevant provisions.

The nature of the amendments, reflecting some of the most recent developments in arbitral practice and the desire for effective enforceability, combined with the fact that they have been implemented so soon after the introduction of the Arbitration Ordinance itself, are further confirmation of Hong Kong's status as a leading seat for international arbitration, and its commitment to remaining so.