Hong Kong Arbitration Clauses

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legal

Hong Kong is fast becoming a popular destination for maritime dispute resolution centres, says an article published on Skuld.

International maritime expertise

This is due to its unique geographical location, business friendly policies and broad areas of international maritime expertise.

An increasing number of shipping contracts provide for Hong Kong to be the seat of arbitration in their arbitration clauses.

Vital arbitration clauses

To ensure a smooth Hong Kong arbitration it is vital that arbitration clauses must specify clearly its rules upon which the arbitration is to be conducted. A simple arbitration clause such as “Hong Kong arbitration English (or Hong Kong) law to apply” will lead to ambiguity, delay, and costs.

In the absence of arbitration rules

The problem with wording like the above starts at the beginning of a dispute. When one party has nominated their arbitrator and requested the other party to appoint their own one, the other party may either ignore the request or simply refuse to appoint.

Shipping contracts 

In this instance, the party who has nominated their arbitrator will have to apply to the Hong Kong International Arbitration Centre (HKIAC) for nominating the counter-party’s arbitrator. This will (1) cause delay extra costs[1], and (2) the nominated arbitrators might not be experienced maritime arbitrators.

As such, it is highly suggested that shipping contracts specify that the Hong Kong arbitration be conducted in accordance with the terms of the Hong Kong Maritime Arbitration Group (HKMAG).

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Source: skuld