The Hong Kong International Arbitration Centre (HKIAC) has recently released their statistics for 2022, providing an interesting glimpse into the state of international arbitration in Hong Kong.
- A total of 515 cases were submitted to the HKIAC (344 arbitrations, 10 mediations and 161 domain name disputes).
- Of those 515 cases, 83.1% were international in nature (meaning at least one party was not from Hong Kong), 32% had no Hong Kong parties at all and 5.8% had no Asian parties at all.
- The overall value in dispute was US$5.5 billion (HK$43.1 billion).
- A total of 997 parties from 63 jurisdictions participated in HKIAC arbitrations. The top 10 jurisdictions for parties’ origins included Hong Kong, Mainland China, British Virgin Islands, Cayman Islands, Singapore, South Korea, United States, Jersey, United Kingdom and Australia.
- The largest sectors represented were banking and financial services, corporate, international trade and sale of goods.
- The three most popular governing laws applicable to the disputes were Hong Kong law, English law and Jersey law.
- Of the 344 arbitrations, 87% were conducted in English.
- HKIAC hosted 93 hearings: 75 were fully or partially conducted virtually, and only 18 were conducted in person.
Many of the 2022 statistics are very similar to the 2019 (i.e., pre-COVID) numbers: for instance, with 503 new cases in 2019 and 81% of cases being international in nature in 2019. This shows Hong Kong, and the HKIAC, remained a popular centre for international disputes throughout the COVID lockdown period and into 2022.
The value of cases in dispute at the HKIAC also grew in 2022 from pre-COVID levels, as there were only approximately US$4.7 billion (HK$36.4 billion) in dispute in 2019. But looking back to the 2021 numbers, there was a notable decrease in value of the cases in 2022, from a peak of US$7 billion in 2021 to US$5.5 billion in 2022 (the amount in Hong Kong dollars went down from HK$54.6 billion in 2021 to HK$43.1 billion in 2022). Whilst this may reflect the global economic picture in 2022, it will be interesting to see whether the total values of the cases heard in the HKIAC bounces back in a turbulent 2023, or whether 2021 was a distinct year.
Meanwhile another powerhouse in the Asia-Pacific arbitration circuit, the Singapore International Arbitration Centre (SIAC), has revised its model arbitration clause. The revision gives parties the opportunity to include the following wording in their arbitration agreements:
[In respect of any court proceedings in Singapore commenced under the International Arbitration Act 1994 in relation to the arbitration, the parties agree (a) to commence such proceedings before the Singapore International Commercial Court (“the SICC”); and (b) in any event, that such proceedings shall be heard and adjudicated by the SICC.]
This revision gives parties clarity on which court determines issues related to the seat of the arbitration and therefore helps the parties avoid otherwise expensive satellite litigation. SIAC recommends this wording as the parties will then “benefit from the quick turnaround of applications as observed from the SICC judgments that have been released, as well as from the costs awards that are reflective of actual costs involved in the application.”
The SIAC said that this change was made against the backdrop of an increase in the number of cases heard by the SICC derived from arbitrations in the SIAC. However, the optional clause still gives the parties flexibility to either designate a different court or stay silent on the matter of how to deal with court proceedings in Singapore under the Singapore International Arbitration Act.
The Arbitration Institute of the Stockholm Chamber of Commerce has announced a re-brand and revised versions of its arbitration rules. From January 1, 2023, the institute will be known as the SCC Arbitration Institute. Revisions to its arbitration rules are mostly limited to practical issues arising in arbitration.
A key change is to the SCC’s model arbitration clause: The revised model arbitration clause removes the recommendation to parties to agree on the number of arbitrators, e.g., one or three. The SCC’s rationale is to increase opportunities for the board of the SCC to decide on the number of arbitrators. This indicates a more proactive approach to early case management.
Additionally, the SCC has changed its arbitration rules to expressly authorize the arbitral tribunal to decide whether hearings should be conducted in person or remotely (article 32). This was a key change from the pre-COVID-19 rules (last revised in 2017), to reflect the changing practice toward more virtual hearings. Further clarifications were also made to the rules to ensure clarity as to what information needs to be included in a statement of claim and defence (article 29), among other minor changes.