Alternative Dispute Resolution Hong Kong International Arbitration Centre 29 December 2004

1
Alternative Dispute Resolution Hong Kong
International Arbitration Centre29 December
2004
2
Overview

• Origins and History of the Hong Kong
  International Arbitration Centre.
• The growing need for arbitration flowing from
  increasing involvement by Hong Kong and Overseas
  Companies in the Mainland Market.
• Arbitration in Hong Kong and Mainland China.
• Enforcement of settlements in Hong Kong and
  China.
• The role of the Hong Kong Institute of
  Arbitrators and the Chartered Institute of
  Arbitrators (East Asia Branch).

3
Business Disputes

• Should commercial disputes be a hindrance to your
  companys success.
• How should you prepare for the worst.
• What advice and guidance is available.
• How can you proactively manage your disputes that
  could substantially save you in unnecessary costs
  and time.
• Understanding the various dispute resolution
  mechanisms that are available in market place can
  assist you in managing your potential disputes in
  an effective and efficient manner while at the
  same time minimizing your exposure to potential
  risks.

4
Common Ways to Resolve Disputes in Society
Violence

• Adjudication

• Negotiation

• Arbitration

• Avoidance

• Mediation

• Litigation

5
The Advantages of Arbitration

• Flexibility in Proceedings
• Confidentiality of Proceedings
• The Speed of Resolution
• Low Cost relative to Litigation
• Legally Binding Nature
• International Enforceability
• Expertise of Arbitrator

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Disadvantages of Arbitration

• A major weakness of the arbitral process is the
  limited powers which the arbitral tribunal may
  exercise.
• Another perceived drawback of the arbitral
  process lies in the fact that, in general, it is
  not possible to bring multi-party disputes
  together before the same arbitral tribunal.
  Unlike a Court of Law, an arbitral tribunal
  generally has no power to order consolidation of
  actions.
• If the Arbitrator is an expert within a specified
  field, he/she may not have the requisite
  expertise when the dispute hinges on difficult
  points of law.
• The doctrine of precedent does not apply. Each
  case is decided on its merits and is therefore
  no guide to future similar cases.

7
Types of Arbitration Proceedings

• Institutionalized
• An institutional arbitration is one which is
• administered by one of the many specialist
• arbitral institutions under its own rules of
• Arbitration.
• Ad-hoc
• Ad-hoc arbitrations often take place under the
• provisions of a submission agreement which
• itself often establishes the arbitral tribunal
  and
• sets out the procedural rules upon which the
• parties have agreed. An ad-hoc arbitration
• arises under an arbitration clause.

8
Enforcement

• The New York Convention on the Recognition and
  Enforcement of Foreign Arbitral Awards lays down
  a detailed framework for the recognition and
  enforcement of arbitration awards.
• Over 140 countries are signatories to this
  convention
• HK adopted the convention on 21 April 1977 by
  virtue of the United Kingdoms accession on HKs
  behalf. China is also a signatory to the
  convention and applied it to HK with effect from
  1 July 1997
• HK Courts recognize and enforce arbitration
  awards made in countries which are signatories to
• the Convention in accordance with the
• terms of the Convention
• Arbitration awards are enforceable in the
  Mainland of China and vice versa.

9
Why Arbitrate in Hong Kong

• The Worlds Freest Economy
• The Rule of Law
• A Free and Open Society
• Accountable Government
• International Business Hub
• International Financial Centre
• International Arbitration and Dispute Resolution
  Centre
• Update Arbitration Law
• Available Expertise
• ( Including 3 Universities offering
  Postgraduate studies in Arbitration and
  Alternative Dispute Resolution courses)

10
Statistics
11
HKIAC 2003 Statistics

• Arbitration Mediation
• Construction 137 5
• Commercial 80 2
• Shipping 28 0
• Joint Venture 7 0
• Others 3 0
• Community 0 1
• Total 255 8
• Domain Names 32 N/A

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HKIAC 2003 Statistics

• Of 255 Arbitrations (excluding Domain Names)
• 198 cases involve Hong Kong and other Countries.
• 35 cases involve non-Hong Kong parties.
• 22 cases involve Hong Kong parties.

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HKIAC 2003 Statistics

• Of the 198 cases involving Hong Kong Parties
• - 18 cases from HK and Mainland of China.
• - 180 cases from HK and other countries.
• - 166 cases involve contracts performed in
  HK.
• - 32 cases involve contracts performed
• elsewhere.
• - Disputed amounts range from HK 61,000
• to over HK152 million.

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HKIAC 2003 Statistics

• Of the 35 cases involving non-Hong Kong Parties
• - 14 Mainland of China/ Mainland of China
• - 1 United Kingdom/ Mainland of China
• - 1 Australia/United States of America
• - 1 Singapore/Mainland of China
• - 5 Korea/Japan
• - 9 United States of America/Mainland of
  China
• - 3 Korea/Korea
• - 1 Netherlands/Mainland of China

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Hong Kong International Arbitration Centre

• The Hong Kong International Arbitration Centre an
  independent non-profit making limited by
  guarantee was established in 1985 to provide
  advisory and support services for the resolution
  of local and international disputes by mediation
  and arbitration.
• Twenty-six Council Members Board of Directors.
• Seven Full-time staff.
• 300 international and local arbitrators of
  experience and distinction.
• An active mediation body Hong Kong Mediation
  Council, a division of the HKIAC.
• Superb facilities to conduct Arbitrations and
  other forms of dispute resolution procedures.
• Publication of various rules and procedures for
  arbitrations in Hong Kong including the
  Securities Arbitration Rules and Small-
  Claims/Documents-Only Procedures.

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HKIAC Structure
17
HKIAC Services

• Provides a free information service on dispute
  resolution.
• Provides information on arbitration law and
  procedure relating to international arbitrations
  in Hong Kong.
• Promotes Hong Kong internationally, as the ideal
  venue for dispute resolution services.
• Authority to appoint arbitrators under both the
  domestic and international regimes of the
  Arbitration Ordinance.
• Authority to decide on the number of arbitrators
  under the international regime of the Arbitration
  Ordinance.
• Accredits mediators for use on the Court Annexed
  Family Mediation Scheme.
• Administers the mediation services for Hong Kong
  Government contracts.
• Administer gTLDs and ccTLDs as approved by ICANN
  under the organisation of Asian Domain Name
  Dispute Resolution Centre www.adndrc.org ( a
  joint venture between CIETAC and HKIAC), HKDNR
  (to handle .hk disputes) and CNNIC (to handle .cn
  disputes).
• Administer rules for the Securities and Futures
  Commission and the Hong Kong Society of
  Accountants WebTrust Programme - a third party
  arbitration framework for the use and adoption by
  on-line merchants to handle consumer disputes
  on-line .

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Hong Kong Mediation Council

• The Hong Kong Mediation Council (HKMC) was set up
  within Hong Kong International Arbitration Centre
  (HKIAC) in January 1994 to promote the
  development and use of mediation as a method of
  resolving disputes. The HKMC is a division of the
  HKIAC and was previously known as the Mediation
  Group.
• The Council is run by a committee who are
  responsible for activity co-ordination and who
  represent mediation interest in a wide variety of
  areas. In addition, there are specialist
  sub-committees who concentrate their mediation
  activities in specialist areas namely commercial,
  community, construction and family.
•  
• The Mediation Council aims to promote the use of
  mediation and other forms of ADR, encourage
  collaboration amongst its members and with
  similar professional bodies, facilitate exchange
  of information and provide education/training on
  ADR.

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Hong Kong Institute of Arbitrators

• Hong Kong Institute of Arbitrators (HKIArb) was
  set up in September 1996 by a group of Hong Kong
  professionals interested in arbitration,
  mediation and other kinds of dispute resolution.
  The Institute enjoys charitable status and is
  non-profit making. It is funded by annual
  membership fees and is financially independent.
• The administration of the Institute is conducted
  through a Council comprising of professionals of
  different nationalities and with a diversity of
  skills and experience. The Council, which is
  elected annually, has a number of committees
  covering such areas as membership, finance,
  institutional development, education and training
  programmes.
• A main objective of the Institute is to promote
  arbitration and other alternative methods of
  dispute resolution (ADR) in Hong Kong. HKIArb is
  involved in the training of arbitrators and
  mediators, the setting of appropriate standards
  of conduct for arbitrators and mediators in Hong
  Kong and law reform relevant both to arbitration
  and mediation. It is working to forge ties with
  other organizations involved in arbitration and
  ADR, particularly those within China and in the
  Asia region.

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Chartered Institute of Arbitrators (East Asia
Branch)

• The Chartered Institute of Arbitrators (CIArb)
  was founded in 1915 with the aim of promoting
  Arbitration as an alternative method of dispute
  resolution to litigation. It was incorporated in
  1925, granted a Royal Charter in 1979 and
  charitable status in 1990.There are branches of
  the Institute throughout the United Kingdom and
  overseas. The East Asia Branch, previously known
  as The Hong Kong Branch, was formed in 1972 which
  covers geographical area of China, Thailand,
  Vietnam, Philippines, Korea, Singapore and
  Indonesia. Changes to the Royal Charter in 1999
  means that the Institute now actively encourages
  the use of ADR to achieve the early and private
  settlement of disputes.

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Chartered Institute of Arbitrators (East Asia
Branch)

• The objectives of the Branch are to provide a
  regional organization for Members of the
  Institute who are resident in East Asia
  generally. The purpose is to promote, encourage
  and facilitate the practice of settlement of
  disputes by arbitration and other means of
  dispute resolution, and to support and promote
  the status and interests of the Chartered
  Institute of Arbitrators.
• The East Asia Branch is committed to providing
  education and training in areas of law and
  practice relating to arbitration, holding
  demonstration arbitrations, disseminating useful
  information connected with arbitration and
  protecting the public interest in relation to the
  conduct of arbitrations as a means of resolving
  disputes.

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Quote

• With a good man in the saddle, the unruly horse
  can be kept in control. It can jump over
  obstacles. It can leap the fences put up by
  frictions and come down on the side of justice.
• Enderby Town Football Club Ltd. V. The Football
  Association Ltd. 1971 AC 591
• By Lord Denning

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Another Quote

• World Peace, like community peace, does not
• require that each man love his neighbor it
• requires only that they live together with mutual
  
• tolerance, submitting their disputes to a just
  and
• peaceful settlement.
• By John F. Kennedy

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Hong Kong the City of Life

• The City where East greets West that offers you a
  truly Can-do attitude which ultimately leads
  you towards success year after year
• Your Partner in Asia

25
Thank You

• Should you have any questions
• please feel free to discuss them now or
• refer to the HKIAC website at
• www. hkiac.org
• 38/F, Two Exchange Square Central, Hong Kong
• Tel [phone] Fax [phone]
• E-mail adr_at_hkiac.org

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Hong Kong International Arbitration Centre

• 38th Floor, Two Exchange Square
• Central
• Hong Kong
• www.hkiac.org
• adr_at_hkiac.org
• Tel [phone]
• Fax [phone]