Fast-track to emergency relief: 2024 HKIAC rules enhance emergency arbitrators’ powers

The 2024 HKIAC Rules introduce several welcome amendments aimed at further enhancing the time- and cost-efficiency of HKIAC arbitrations. These amendments include revisions to the mechanism by which a single arbitration can proceed under multiple contracts, clarifications of arbitral tribunals’ powers to address preliminary issues, and new provisions concerning information security matters and arbitrator diversity. 

In addition, the 2024 HKIAC Rules clarify the scope of emergency arbitrators’ powers by confirming that an emergency arbitrator can grant interim measures in the period between the emergency arbitrator’s appointment and his/her issuance of the emergency decision. This development should be welcomed by HKIAC arbitration users for the reasons explained in this post.

Emergency arbitration under the 2018 HKIAC Rules

The previous 2018 version of the HKIAC Rules contained an emergency arbitration mechanism in Schedule 4. That mechanism, which was first introduced in the 2013 version of the HKIAC Rules and worked well in practice, enabled a party to obtain interim measures from an emergency arbitrator prior to the constitution of the arbitral tribunal. Generally, the HKIAC would appoint an emergency arbitrator within 24 hours of receiving an application who would then issue his/her emergency decision within 14 days.

Depending upon the circumstances, the HKIAC’s emergency arbitrator mechanism provided a party who urgently needed interim measures at the outset of a dispute with a viable alternative to applying to national courts for such relief. 

However, the 2018 HKIAC Rules did not expressly address whether an emergency arbitrator had the power to issue interim measures in the period prior to the emergency arbitrator’s issuance of the emergency decision (e.g., to temporarily preserve the status quo between the parties during the emergency arbitration proceedings).

2024 HKIAC Rules confirm emergency arbitrators’ broad powers

The 2024 HKIAC Rules retain the emergency arbitration mechanism from the 2018 HKIAC Rules but now expressly confirm, via an addition to paragraph 10 of Schedule 4, that “[t]he emergency arbitrator shall have the power to make any preliminary or interim order the emergency arbitrator deems necessary before making the Emergency Decision referred to in paragraph 12 of this Schedule.”

The HKIAC’s clarification of emergency arbitrators’ powers in the period between the emergency arbitrator’s appointment and his/her issuance of the emergency decision is welcome for at least two reasons.

First, as a practical matter, emergency arbitrators should have the power to issue orders that temporarily bind the parties in the temporal gap between the emergency arbitrator’s appointment and the issuance of the emergency decision. Absent this power, the purpose for which a party initiated emergency arbitration proceedings may be frustrated since the other party would, for example, be free to take the wrongful conduct that the emergency arbitration proceedings were initiated to prevent. This, in turn, could aggravate the parties’ dispute or cause irreparable harm to the party seeking emergency relief.

Second, while emergency arbitrators could potentially already imply the power under the 2018 HKIAC Rules to issue interim measures prior to the issuance of the emergency decision, the 2024 HKIAC Rules remove any ambiguity in this regard. This is welcome since emergency arbitration mechanisms work best when the scope of an emergency arbitrator’s powers is addressed in detail. This reduces the scope for “due process paranoia” by emergency arbitrators and avoids the need for parties to incur the time and costs in briefing, and emergency arbitrators deciding, such issues, which can materially delay the issuance of the emergency decision.

With respect to how a party can use this amendment in practice, a party might submit its request for a “preliminary or interim order” at the same time, or shortly after, it submits its application to the HKIAC to appoint an emergency arbitrator. The emergency arbitrator, once appointed, could then provide the respondent party with a reasonable opportunity to be heard on the request (e.g., several hours) before deciding whether to issue the order.

The HKIAC’s amendment achieves a similar outcome to Article 25(7) of the 2022 Prime Finance Arbitration Rules (“The emergency arbitrator shall have the power to grant interim relief in the form of a preliminary order prior to rendering the decision on emergency measures”) and paragraph 8 of Schedule 1 to the 2016 SIAC Arbitration Rules (“The Emergency Arbitrator shall have the power to order or award any interim relief that he deems necessary, including preliminary orders that may be made pending any hearing, telephone or video conference or written submissions by the parties”).

Conclusion

Hong Kong, as a world-class seat of arbitration, already offers arbitrating parties a sophisticated and comprehensive regime for interim relief. Parties can obtain and, where necessary, enforce interim relief from emergency arbitrators, arbitral tribunals and the Hong Kong courts, as well as having access to interim relief from the courts of mainland China via the Arrangement between Mainland China and Hong Kong. The HKIAC’s reforms to its emergency arbitration mechanism complement this regime.

For further information on resolving disputes in Asia and internationally, including how to obtain interim measures from emergency arbitrators, arbitral tribunals and national courts, please contact our international arbitration team.