Alternative dispute resolution in Hong Kong



Alternative Dispute Resolution (ADR) is not a single technique, but consists of assisted negotiations with a view to achieving a settlement. ADR is a consensual process. Except for arbitration, ADR usually has a non-binding outcome and, as a result, may not resolve the dispute. It can be much faster and cheaper than litigation, but, if it fails, it may only add to the cost and delay in resolving the dispute. Common forms of ADR in Hong Kong include arbitration and mediation.


Arbitration



Arbitration is a popular method of dispute resolution in the HKSAR. It seeks to facilitate the fair and speedy resolution of disputes without unnecessary expense within a private setting.

The
Arbitration Ordinance establishes the arbitration framework for Hong Kong. It lays down a general legal framework, giving certain protections to the parties, vesting certain powers in arbitral tribunals and reserving a minimal number of powers to the Court of First Instance to intervene for the purpose of supporting and supervising the arbitration process.

The previous law that provided for a different regime for domestic arbitration (compared with international arbitration) in Hong Kong is now abolished under the new
Arbitration Ordinance, which came into effect on 1 June 2011. Under the new law, both international and domestic arbitration are now subject to a unitary regime largely based after the UNCITRAL Model Law on International Commercial Arbitration. The Model Law represents internationally agreed principles of best practice. This change of arbitration law is set to enhance Hong Kong as an ideal place for arbitration.

The
Arbitration Ordinance, however, retains certain provisions from the former Arbitration Ordinance (Cap 341) which applied to domestic arbitrations as optional "opt-in" provisions. These provisions are automatically applied to any arbitration agreement entered into before the commencement of the Arbitration Ordinance, or up to 6 years later (1 June 2017) if it is stipulated as "domestic arbitration". Further, the Arbitration Ordinance allows parties to expressly opt-in the provisions into their arbitration agreements.

The Hong Kong Courts are empowered by the Arbitration Ordinance to enforce arbitral awards made in or outside Hong Kong. Leave to enforce an arbitral award made outside Hong Kong will be granted if the award is of a type or description that may be made in Hong Kong by an arbitral tribunal. Separate provisions set out the enforcement of New York Convention awards, Mainland awards and other awards.



Mediation



On 22 June 2012, the Mediation Ordinance (Cap 620) was enacted in Hong Kong, further establishing mediation as a preferred alternative dispute resolution in Hong Kong.

The main objectives of the Mediation Ordinance are to:


  • encourage and promote mediation as an alternative dispute resolution;
  • to define the scope of confidentiality of mediation communications; and
  • provide a statutory framework for the conduct of mediations in Hong Kong.

It has also been announced that the Mediation Task Force and its Accreditation Subgroup are working towards establishing a single accreditation body, with a provisional name of "the Hong Kong Mediation Accreditation Association Limited" which will be governed by a council made up of representatives of key mediation service providers in Hong Kong.

As such, the Mediation Ordinance will likely be subject to amendment when such accreditation body has been established and when further detailed guidelines for mediation are created.


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