The UNCITRAL Model Law on International Commercial Arbitration

The UNCITRAL Model Law on International Commercial Arbitration: 25 Years 4 June 2010 “The Influence of the UNCITRAL Model Law in Hong Kong and China”

Existing regime under the Hong Kong Arbitration Ordinance • Domestic Arbitration – largely follows the English Arbitration Acts • International Arbitration – UNCITRAL Model Law, since 1989 • Other features – Consolidation of arbitration proceedings – Arbitrator acting as a conciliator 2

Hong Kong Arbitration Bill • UNCITRAL Model Law will apply to all arbitration proceedings – commercial, non-commercial, domestic or international • Other features – Arbitrator acting as a mediator and a conciliator – Capping of costs – Award of interest – Tribunal has the power to order interim measures – Recognition and enforcement of awards originating from countries outside the New York Convention – The HKIAC as the appointing authority • Optional provisions – Consolidation of proceedings 3 – Right of appeal on points of law only

Arbitrator acting as a mediator • • Existing provision – arbitrator acting as a conciliator CIETAC experience Impartiality issue Control mechanisms – parties’ consent – challenging the award – refusal of enforcement 4

Capping of Costs • • Civil justice reform experience Cost effectiveness of dispute resolution – only such costs which are reasonable in the circumstances are allowed – court assessment of costs – the tribunal’s power to review its cost orders • 5 Assessment of costs by the tribunal or the court

Award of Interest • The tribunal has the power to award simple or compound interest from such dates and at such rates as the tribunal considers appropriate, on – money awarded by the tribunal, – money claimed or outstanding but paid before the award is made, or – costs • 6 Except when the award otherwise provides, the judgment rate applies

Power to order interim measures • The tribunal has the power to: – maintain or restore the status quo pending the determination of the dispute – take action preventing harm to the arbitral process – provide a means of preserving assets – preserve evidence that may be relevant – order security in connection with an interim measure • Additional power to: – modify, suspend or terminate an interim measure – order disclosure of all circumstances relevant to the granting of a preliminary order – order costs or undertaking as to damages • 7 Court support available

Recognition and Enforcement of Awards • • • 8 Not just commercial awards Not confined to member state countries Other countries

Hong Kong International Arbitration Centre 9 • • as the appointing authority • HKIAC celebrates its 25 th anniversary potential arbitrators have the obligations to disclose circumstances impacting on their impartiality or independence

Arbitration in the People’s Republic of China (“PRC”) 10 • China International Economic Trade Arbitration Commission (“CIETAC”), established in 1956 • Arbitration Law of the People’s Republic of China, promulgated on 31 October 1994, effective on 1 September 1995, applicable to all types of arbitration

The UNCITRAL Model Law and the Arbitration Law of the PRC 11 • Arbitration clause as a separate and severable part of the main contract • • • Parties’ consent to the dispute resolution mechanism Finality of arbitration awards Recognition and enforcement The tribunal’s competence to rule on its jurisdiction The court’s support

The Arbitration Clause 12 • A separate and severable part of the main contract. Article 19 of the Arbitration Law • Generally in relation to commercial disputes between “foreign firms” and Chinese legal persons • Exclusion of the court’s jurisdiction over the commercial dispute. Article 5 of the Arbitration Law • Requirements of a valid arbitration clause, scope & arbitration commission

Parties consent to the dispute resolution mechanism • Institutional -v- ad hoc arbitration – must have an arbitration commission – implications if the place of arbitration is in China 13

Validity of an arbitration clause 14 • • • Supplemental agreement of the parties • implications The PRC courts’ approach in interpretation The arbitration commission’s jurisdiction in determining the validity of an arbitration clause

Finality of arbitration awards • • No appeal to the Chinese courts Article 58, judicial review available where – no written arbitration agreement – no notice as to the appointment of the arbitrator – the composition of the tribunal or the arbitration process has violated legal procedure – the dispute falls outside the scope of the arbitration agreement or the power of the arbitration commission – the enforcement is contrary to public interest. 15

Recognition and enforcement 16 • • A New York Convention country • CIETAC award between a “foreign firm” and Chinese legal persons • • Ad hoc arbitration award held in China CIETAC award on a dispute between Chinese legal persons only ICC award of an arbitration held in China

The tribunal’s competence to rule on its jurisdiction 17 • The court or the arbitration commission, not the tribunal, determines the validity of the arbitration clause before taking on the dispute • No review by the court of the commission’s decision

Court’s support of arbitration 18 • Property preservation – application to a people’s court via the arbitration commission (Art. 28) • Evidence preservation – application via the arbitration commission (Art. 46) or via the foreign arbitration commission (Art. 48) • In respect of rulings on the validity of an arbitration clause, setting aside or refusal of enforcement – a system of reporting to the higher courts

25 Years of UNCITRAL Model Law Hong Kong • provides a legislative framework aiming at making Hong Kong a regional dispute resolution centre • HKIAC’s caseload increased from 9 cases in 1985 to 746 cases in 2009 (excluding ad hoc or other institutional arbitrations) China 19 • develops from a centrally planned economy to a market economy and an international business player • CIETAC’s caseload increased from 37 cases in 1985 to 1482 cases in 2009 • Today’s Hong Kong, tomorrow’s China?

Giovanna Kwong 20 • Giovanna Kwong is a Chartered Arbitrator, an Examiner and a Fellow of the Chartered Institute of Arbitrators. She is a Fellow of the Hong Kong Institute of Arbitrators. • She is an Accredited Mediator of the Hong Kong International Arbitration Centre. • Giovanna was admitted as a solicitor in England & Wales and in Hong Kong. She has practised in both Hong Kong and the United Kingdom for over 12 years in each jurisdiction. Her main practice areas are arbitration, mediation and commercial litigation. She has represented banks, insurers, public bodies, and corporate clients in numerous complex disputes, judicial reviews and non-contentious matters. • She also serves in a judicial capacity from time to time on various statutory appeal and disciplinary panels in Hong Kong.