Introduction
As one of the world’s leading financial and trading centers, Hong Kong holds an important position in international commercial arbitration. Amendments to its Arbitration Ordinance reflect the modernization of its arbitration law framework. Drawing on international best practices while accommodating local circumstances, the Ordinance provides an efficient, flexible and fair legal framework for resolving international commercial disputes. This article examines its evolution, principal provisions and features to explain Hong Kong arbitration’s institutional advantages.
I. Historical Development of Hong Kong’s Arbitration Ordinance
Hong Kong’s arbitration system dates back to the British colonial period, when it was primarily influenced by English law. Its Arbitration Ordinance was first enacted in 1963 and subsequently amended several times. The most important amendment was in 2011, when Hong Kong abandoned the dual-track system for domestic and international arbitration and modeled its system on the UNCITRAL Model Law on International Commercial Arbitration, even quoting and reproducing the Model Law directly in its provisions. This laid the foundation for Hong Kong to become a major commercial arbitration center in the Asia Pacific and one of the world’s most popular arbitral seats. Subsequent amendments clarified contentious theoretical and practical issues, including intellectual property disputes and third-party funding, to accommodate developments in international arbitration practice and changes in Hong Kong’s legal environment. Hong Kong’s consistently open and supportive approach has made the Ordinance a flexible, professional and international arbitration statute.
By comparison, the Arbitration Law of the People’s Republic of China (the Arbitration Law) was enacted in 1994. Although amended several times, those amendments did not address substantive matters. To keep laws aligned with social change and development, meet new social needs and satisfy reasonable public expectations, legislatures must review and remedy possible shortcomings and gaps in existing laws in a timely manner, enhancing their effectiveness and enforceability. Economic and social development needs and deeper theoretical research have made revision of mainland China’s Arbitration Law amply necessary. In July 2021, the mainland published the Arbitration Law of the People’s Republic of China (Revision) (Draft for Comments), addressing matters such as the arbitral seat and ad hoc arbitration. If implemented, these proposals would bring mainland arbitration closer to international practice, a development worth anticipating.
II. Principal Provisions of Hong Kong’s Arbitration Ordinance
The Model Law on International Commercial Arbitration, adopted by the United Nations Commission on International Trade Law in 1985, is among the most influential legal instruments in international arbitration and has been recognized and used as a reference in many countries’ domestic arbitration legislation. Its logical structure and precise language demonstrate its legislative quality. Hong Kong’s localized adoption of these provisions deserves recognition for its coherent framework and forward-looking content. Specifically, the Ordinance comprises 14 Parts. Parts 1 and 2 are Preliminary and General Provisions; Parts 13 and 14 are Repeal, Savings and Transitional Provisions and Omitted as spent. Parts 3 to 10 cover the entire arbitral process, from arbitration agreements, tribunal composition and interim measures to awards and enforcement. From Part 10A onward, it addresses special issues such as third-party funding, ORFS agreements and intellectual property disputes. The incorporation of the Model Law is particularly direct. Normally, legislation drawing on other laws has similar structures and meaning but not identical wording, especially when the source law is in another language. Hong Kong’s Ordinance, however, quotes the Model Law verbatim. For example, section 11 of Part 2 states in its Chinese text that Article 4 of the UNCITRAL Model Law has effect and sets out its text: “Article 4. Waiver of right to object. A party who knows that any provision of this Law from which the parties may derogate or any requirement under the arbitration agreement has not been complied with and yet proceeds with the arbitration without stating its objection to such non-compliance without undue delay or, if a time-limit is provided therefor, within such period of time, shall be deemed to have waived his right to object.” Apart from such verbatim provisions, most other provisions supplement, replace or connect with the Model Law. The Ordinance can therefore be regarded as a localized version of the Model Law.
In practical terms, the Ordinance’s direct use of the Model Law is ingenious: it saves foreign parties choosing the Ordinance as their procedural law the trouble of interpreting and adapting provisions, maximizing the Model Law’s exemplary role. This provides efficient international commercial arbitration procedures and improves the predictability of recognition and enforcement of international awards.
III. Distinctive Features of Hong Kong’s Arbitration Ordinance
The Ordinance has the following notable features in its detailed institutional design:
(1) Strong Judicial Support for Arbitration
The relationship between courts and arbitration involves judicial assistance and supervision. Assistance primarily includes granting interim measures upon application, helping tribunals obtain evidence and enforcing awards. Supervision mainly involves reviewing tribunal jurisdiction and award validity. The balance jurisdictions strike between assistance and supervision reflects their attitude toward arbitration. Hong Kong’s Ordinance covers almost every need for judicial assistance while showing considerable restraint in supervision. For example, section 12 provides that “In matters governed by this Law, no court shall intervene except where so provided in this Law.” Several other provisions prohibit appeals against court decisions on arbitration matters, maximizing tribunal independence and procedural flexibility while limiting judicial intervention.
(2) Emphasis on Enforcement of Arbitral Awards
Enforcement is a primary concern for parties. Hong Kong’s Ordinance devotes considerable attention to it through Part 10, “Recognition and Enforcement of Awards,” with detailed categories covering general enforcement provisions, awards from New York Convention states, mainland awards and Macao awards. Chapter VI of the Arbitration Law also addresses enforcement, but has only three articles, all general provisions. Other mainland enforcement provisions appear in the Civil Procedure Law. For convenience and practicality, Hong Kong’s Ordinance is clearer and more consolidated, making it evidently more suitable for foreign parties. This is another institutional advantage of Hong Kong arbitration.
Conclusion
Hong Kong’s popularity as an international arbitral seat depends not only on its distinctive cultural, economic and political position, but also on institutional safeguards and an arbitration-friendly approach. The Ordinance’s amendment history and direction show that Hong Kong’s legislature closely follows developments in international commercial arbitration, continually fills gaps and keeps pace with change. Its determination and sincerity in making Hong Kong a leading international arbitration hub offer valuable lessons.
