30 July 2013
The Arbitration (Amendment) Bill 2013 (Amendment Ordinance) was passed on 10 July 2013. Save and except for the amendments governing the enforcement of Macau arbitral awards, which shall commence on a day to be appointed by the Secretary for Justice by notice published in the gazette, all other amendments came into operation on 19 July 2013.
The Amendment Ordinance seeks to:
- Implement the "Arrangement Concerning Reciprocal Recognition and Enforcement of Arbitral Awards" between Hong Kong and Macau concluded in January 2013 (Arrangement) (this development is the main focus of this article);
- Provide for (i) the enforcement of emergency relief made by an emergency arbitrator in or outside Hong Kong in the same manner as an order or direction of the Court that has the same effect, but with the leave of the Court, and (ii) further guidance about the types of emergency relief granted outside Hong Kong that may be enforced by the Court;
- Add Fiji, Liechtenstein, Myanmar, Sao Tome and Principe, and Tajikistan to the list of parties to the New York Convention by updating the subsidiary legislation;
- Provide for the costs of the arbitral proceedings to be taxed on a "party to party" basis if the parties to arbitration have agreed that such costs are to be taxed by the Court;
- Provide for other miscellaneous amendments.
Prior to the conclusion of the Arrangement, there was no arrangement between Hong Kong and Macau on the reciprocal recognition and enforcement of arbitral awards. Nevertheless, Macau awards may still be enforceable in Hong Kong under section 84 of the Ordinance which provides for the enforcement of an arbitral award made outside Hong Kong in the same manner as a judgment of the Court, but only with the leave of the Court. Alternatively a party may bring an action at common law to enforce a Macau arbitral award in a Hong Kong court by way of summary judgment on the terms of the award.
Section 87 of the Ordinance, which concerns the enforcement of Convention awards, did not apply to Macau awards, even though the New York Convention applied to Macau by virtue of a declaration made by the PRC government in July 2005. This is because the New York Convention does not apply to recognition and enforcement of arbitral awards between Hong Kong and Macau, which are both territories of the same Contracting State (i.e., the PRC).
With the passage of Division 4 (comprising sections 98A to 98D) in Part 10 of the Ordinance which governs the enforcement of Macau awards, Macau awards are now enforceable in Hong Kong either by action in the Court, or in the same manner as an arbitral award under section 84 of the Ordinance with the leave of Court, pursuant to section 98A. This enforcement provision is similar to those provisions governing the enforcement of Convention awards and Mainland awards under section 87 and section 92 of the Ordinance respectively.
Section 98B provides that if a Macau award is not fully satisfied by way of enforcement proceeding instituted in Macau (or in any place other than Hong Kong), that part of the award which is not satisfied in those proceedings is enforceable under Division 4. A similar amendment is also made under the Amendment Ordinance to section 93(2) of the Ordinance which applies to Mainland awards.
Section 98C provides for the evidence required to be produced for the enforcement of Macau awards.
Section 98D sets out the grounds for refusal of enforcement of Macau awards, which are in line with the principles under the New York Convention as set out in sections 89 and section 95 of the Ordinance which apply to Convention awards and Mainland awards respectively.
Due to the new Division 4 in Part 10 of the Ordinance, consequential amendments are made to Order 73 of the Rules of High Court which governs arbitration proceedings.
The above amendments are intended to enhance Hong Kong's role as an arbitration centre.