2. Scope of arbitration agreements

2. Scope of arbitration agreements 

General principles 

The scope of an arbitration agreement defines which specific disputes the parties have agreed to submit to the tribunal. Hong Kong courts apply a “one-stop shop” presumption, assuming that rational businesspeople intend all disputes arising from their relationship to be decided by the same tribunal unless they clearly exclude certain matters.  

Broad and narrow drafting 

Broad language, such as disputes “arising out of”, “in connection with” or “relating to” a contract, is generally construed to cover a wide range of issues, including claims in tort, misrepresentation, and rectification, if they are closely connected to the underlying contract. 

In contrast, the phrase “arising under” may be interpreted more strictly, potentially excluding non-contractual claims. Consequently, parties should avoid narrow or uncertain wording unless they deliberately intend to bifurcate their dispute resolution. 

Disputes outside the arbitration agreement 

If a dispute is found to be outside the ambit of the agreement, the court will refuse to stay legal proceedings in favour of arbitration. For more information, please refer to “Stay of court proceedings in favour of arbitration”. 

Ultimately, the scope is a matter of contractual construction, giving the chosen words their natural meaning in the context of the overall relationship. For this reason, parties should avoid narrow or uncertain wording unless they deliberately intend to exclude particular categories of dispute from arbitration. 

Limits on scope: arbitrability 

Regardless of how broadly a clause is drafted, the scope of arbitration is limited by the doctrine of arbitrability. Non-arbitrable matters are categories of disputes that, for reasons of public policy or specific statutory reservation, cannot be resolved through private arbitration and must instead be determined by state courts or specific tribunals. While parties generally enjoy wide freedom to agree on how to resolve their disputes, this autonomy is subject to safeguards necessary in the public interest. 

Non-arbitrable matters under Hong Kong law 

Under Hong Kong law, certain matters are reserved for the courts and cannot be submitted to arbitration: 

(i) Criminal liability 

Criminal charges are reserved for the state and cannot be referred to arbitration. However, if an injury amounting to an indictable offence also gives rise to a civil cause of action that can be legitimately compromised, that specific civil claim may still be arbitrated. 

(ii) Matrimonial and family matters 

Disputes concerning the status of a marriage, divorce, and the relations between parents and children (such as custody) are non-arbitrable. An exception exists for the specific terms on which a husband and wife shall separate, as they can validly agree on these matters between themselves. 

(iii) Personal status 

Matters affecting a person’s legal status (e.g., mental capacity) are reserved for the courts. 

(iv) Actions in rem against vessels 

While admiralty claims for debt or damages can often be arbitrated, actions in rem against a vessel are generally non-arbitrable. 

(v) Matters reserved for state agencies 

Disputes involving issues specifically reserved for resolution by government bodies or specialized tribunals are non-arbitrable. These include: 

1. Taxation and revenue matters. 
2. Immigration and nationality issues. 
3. Social welfare entitlements. 
4. Development control. 

(vi) Employees’ compensation claims 

The Court of Final Appeal has held that the Employees’ Compensation Ordinance (Cap. 282) confers exclusive jurisdiction on the District Court for these claims. Consequently, there is no power to stay such proceedings in favour of arbitration. 

(vii) Competition and anti-trust 

These are listed as matters generally not capable of being referred to arbitration.