HONG KONG SAR, CHINA Law and Practice Contributed by: Lianjun Li, Matthew Townsend, Patrick Chong and Max Lam, Reed Smith
Section 24 of the AO provides that unless parties agree otherwise, no person shall be precluded by reason of his or her nationality from acting as an arbitrator. Parties are also entitled to displace Section 24 of the AO by incorporation of arbitral rules that include nationality-based constraints on appointments. For example, under Article 11.2 of the 2024 HKIAC Administered Arbitration Rules (the “HKIAC Rules”), where the parties to an arbitration under the HKIAC Rules are of different nationalities, a sole or presiding arbitrator shall not have the same nationality as any party unless agreed otherwise by all parties. Notwithstanding the parties’ considerable freedom to select arbitrators of their choosing, this freedom is tempered by the arbitrators’ duties of impartiality and independence, and arbitrators can be challenged if there are justifiable doubts about their independ- ence or impartiality. See 4.4 Challenge and Removal of Arbitrators . 4.2 Default Procedures If the parties’ agreed method for appointing the tribu- nal fails or if they have not agreed on a method at all, Section 24 of the AO sets out the following default mechanisms: • For an arbitration with a three-member tribunal, each party shall appoint one arbitrator, and those two shall appoint the third arbitrator. • For an arbitration with a sole arbitrator, if the par- ties cannot agree on the arbitrator, the Hong Kong International Arbitration Centre (HKIAC) will make the appointment upon a party’s request. • For an arbitration with an even number of arbitra - tors, each party shall appoint the same number of arbitrators. • For an arbitration with an uneven number of arbi - trators greater than three, each party shall appoint the same number of arbitrators, and (unless other - wise agreed by the parties) the HKIAC shall appoint the remaining arbitrator(s). • If a party fails to act as required under an appoint- ment procedure agreed upon by the parties or the parties’ chosen method fails in certain situations, the HKIAC, upon any party’s request, will take the necessary measure (including making the neces-
sary appointment). The aforesaid mechanism also applies in the case of multi-party arbitrations. 4.3 Court Intervention Under Hong Kong law, the court’s intervention in the arbitral process is limited. More specifically, under Sections 26 and 27 of the AO, the court is empow- ered to rule on challenges in the appointment process and decide on issues relating to termination of the mandate of an arbitrator who is de jure or de facto unable to perform his or her functions. Section 58 of the AO also allows the court to extend the time for commencement of arbitral proceedings where, at the relevant time, no arbitral tribunal exists that is capable of exercising that power. 4.4 Challenge and Removal of Arbitrators Section 25 of the AO (incorporating Article 12 of the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”)) narrowly circumscribes the grounds on which an arbitrator can be challenged. Such challenge is permissible only where there are circumstances creating justifiable doubts as to his or her independence or impartiality, or where he or she lacks the qualifications agreed to by the parties. Fur- ther, where the arbitrator concerned is appointed by the party making the challenge or the party has par- ticipated in his or her appointment, the challenge can only be based on grounds of which the party becomes aware after the appointment has been made. Section 26 of the AO (incorporating Article 13 of the Model Law) governs the challenge procedure. The parties may agree on a procedure for challenging an arbitrator. If there is no such agreement, a party seek- ing to challenge must deliver to the arbitral tribunal a written statement of the reasons for the challenge within 15 days of becoming aware of the constitution of the arbitral tribunal or of any circumstances referred to in Article 12 (2) of the Model Law (circumstances rendering a challenge permissible as set out in the paragraph above). The arbitral tribunal shall decide on the challenge unless the arbitrator withdraws from his or her office or the opposing party consents to the challenge. If the challenge is unsuccessful, the chal- lenging party may, within 30 days of receiving notice of the decision, apply to the court for a determination.
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