How is an arbitration tribunal formed?
Firstly, the number of arbitrators must be confirmed; it may be a sole arbitrator or a three-person tribunal, usually specified in the contract. If no such provision or contracting parties cannot agree with how many arbitrators there should be, the number of arbitrators will be determined by the applicable rules and procedures.
Suppose the contract stipulates for a sole arbitrator. In that case, the choice of the arbitrator will be determined by the procedures set out in the contract or by an independent third party nominated under the contract. If the contract provisions stipulate for three arbitrators, then each contracting party will typically nominate an arbitrator, with a third arbitrator (the Chair) nominated by the two-party nominated arbitrators. Where parties cannot agree on arbitrators, or their contract does not make such provisions, any party may request the Hong Kong International Arbitration Centre (HKIAC) to make a ruling.
In arbitration, parties can freely choose the arbitration tribunal, whereas, in litigation, the presiding judge is selected by the court. This is also an advantage that arbitration has over traditional litigation. Nominating arbitrators can be an essential tactic in arbitration: the ideal nominee should be experienced and is well respected. A good arbitrator should be able to effectively control arbitration proceedings to resolve the dispute as effectively as possible. Considerations that parties should take into account when choosing a suitable arbitrator will be explored in later articles.
What disputes can be resolved via arbitration?
Arbitration can resolve all forms of civil and commercial disputes, except in disputes where the court has exclusive jurisdiction. For example, under Hong Kong law, disputes over employment and employment wages, criminal cases, and divorces cannot be arbitrated.
What laws are applicable in arbitral disputes?
Most contracts include a governing law provision. Arbitration tribunals will consequently follow these provisions in arbitrating the disputes between contracting parties.
At the same time, the arbitration will be subject to procedural law, which themselves are determined by the location of the arbitration, which in turn is determined in the relevant arbitration agreement(s). For example, suppose a contract stipulates that Hong Kong is to be the venue of arbitration. In that case, the Hong Kong Arbitration Ordinance (Cap 609) will serve as the procedural law governing the arbitration proceedings. Similarly, if Beijing or Shanghai was chosen as the arbitration venue, then the Arbitration Law of the People’s Republic of China will govern arbitration proceedings.
Dorsey & Whitney LLP has rich experience handling complex arbitration cases and arbitral disputes under mainland China and Hong Kong.
In what language is arbitration held?
In principle, both arbitrating parties can freely agree to the language of the arbitration. When deciding on a language, both parties should consider their native language and the language used in relevant contracts and evidence. Generally, arbitration agreements will have already stipulated the language of use in the arbitration.
If relevant contracts use more than one language, then generally, when parties conflict, one of the multiple languages used should be made the “priority use” language. This also applies to the arbitration proceeding itself, as a dual-lingual or multi-lingual arbitration proceeding is not the ideal solution.
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