3. Arbitral tribunals and arbitrators

3. Arbitral tribunals and arbitrators 

Under the Arbitration Ordinance (Cap. 609), Hong Kong arbitration law is based largely on the UNCITRAL Model Law. The Arbitration Ordinance gives arbitral tribunals broad powers to conduct proceedings in a fair, efficient and flexible manner. At the same time, the law seeks to minimise unnecessary court intervention, so that arbitration can remain a private and effective method of dispute resolution. 

General duties of the arbitral tribunal 

Arbitrators in Hong Kong are subject to important statutory duties. Section 46 of the Arbitration Ordinance provides that the parties must be treated with equality. This duty applies to all stages of the proceedings, including interlocutory applications and the final hearing. Each party must also be given a reasonable opportunity to present its case and to respond to the other party’s case. 

The requirement of a “reasonable opportunity” is significant. It does not mean that a party is entitled to take every possible procedural step, regardless of cost or delay. The tribunal may control the proceedings and prevent unreasonable conduct, such as calling excessive witnesses, making repetitive submissions, or using procedures that are disproportionate to the dispute. 

Arbitrators must also act independently, fairly and impartially. This applies to all arbitrators, including an arbitrator appointed by one party. Independence is generally assessed by reference to objective circumstances, such as the arbitrator’s relationships with the parties, their lawyers, or the subject matter of the dispute. Impartiality concerns whether the arbitrator approaches the dispute with an open mind and without bias. 

In addition, the tribunal must adopt procedures suitable for the particular case. The aim is to avoid unnecessary delay or expense while ensuring that the parties have a proper opportunity to be heard. 

Duty of disclosure 

Under section 25, a person approached for a possible appointment as an arbitrator is under a mandatory duty to disclose any circumstances likely to give rise to justifiable doubts as to their impartiality or independence. This is a continuing obligation that persists from the moment of initial contact through the final conclusion of the arbitral proceedings. The purpose of disclosure is to allow the parties to consider whether they object to the appointment or continued involvement of the arbitrator. 

The legal threshold for “justifiable doubts” in Hong Kong is an objective one: whether a fair-minded and informed observer, having considered the relevant facts, would conclude there is a real possibility that the tribunal is biased. While failure to disclose a relevant circumstance does not, by itself, prove partiality, it is a factor that the objective observer may take into account when assessing whether there was intentional concealment. 

Jurisdiction of the arbitral tribunal 

The Arbitration Ordinance recognises the principle of competence-competence. This means that an arbitral tribunal has power to rule on its own jurisdiction. The tribunal may decide: 

• whether a valid arbitration agreement exists; 
• whether the tribunal has been properly constituted;  
• whether the matters in dispute fall within the scope of the arbitration agreement; and 
• whether the tribunal is exceeding its authority. 

A jurisdictional objection must generally be raised no later than the statement of defence. An objection that the tribunal is exceeding its authority must be raised as soon as the relevant issue arises. 

If a tribunal rules as a preliminary question that it has jurisdiction, a party may request the Court of First Instance to decide the matter within 30 days. The Court performs a de novo review, meaning it considers the issue anew and is not bound by the tribunal’s findings. The court’s decision is not subject to appeal. 

Powers relating to procedural management and evidence 

An arbitrator is not merely a passive decision-maker. The tribunal has an active case management role and is expected to take charge of the proceedings. Unless the parties have agreed otherwise, the tribunal has wide powers to decide how the arbitration should be conducted. 

For example, the tribunal may decide what evidence is admissible, relevant or important, and how much weight should be given to it. It may also decide whether there should be an oral hearing or whether the case can be dealt with on a documents-only basis. In appropriate cases, the tribunal may adopt a more inquisitorial approach by taking the initiative to identify relevant facts or legal issues. However, the tribunal cannot compel a person to produce evidence that would be privileged in a court of law. 

Under section 56, unless excluded by the parties, the tribunal has broad powers to: 

• Require a claimant to give security for costs of the arbitration; 
• Direct discovery of documents or the delivery of interrogatories; 
• Direct evidence to be given by affidavit; 
• Direct the inspection, preservation, or sale of “relevant property” involved in the dispute. 

If a party fails to comply with a procedural order without sufficient cause, the tribunal may issue a peremptory order. Such orders are intended to ensure that the arbitration proceeds efficiently and that a party cannot obstruct or delay the process by ignoring directions. 

Personal duty to decide and decision-making 

Arbitrators have a personal and non-delegable duty to resolve the dispute. While they may appoint experts or assessors to advise on technical matters or costs, the tribunal must not delegate the ultimate power of decision to them. In tribunals with multiple members, any decision must be made by a majority of all members, though the parties may authorize a presiding arbitrator to decide procedural questions. Once a final award is made, the tribunal is functus officio and generally lacks the power to revisit its decision, except for correcting clerical errors or making an additional award for omitted claims. 

Procedure for challenging an arbitrator 

The parties are free to agree on the procedure for challenging an arbitrator. In many cases, the applicable institutional rules, such as arbitration rules of an arbitral institution, will set out the procedure. 

If there is no agreed procedure, section 26 applies. A party wishing to challenge an arbitrator must send a written statement of the reasons for the challenge to the tribunal within 15 days after becoming aware of the constitution of the tribunal or the relevant grounds for challenge. 

Unless the challenged arbitrator withdraws, or the other party agrees to the challenge, the tribunal (including the challenged member) will decide on the challenge. If the challenge is rejected, the challenging party may apply to the Court of First Instance for a decision within 30 days. The decision of the Court of First Instance is final and is not subject to appeal. 

While such a court application is pending, the tribunal may continue the arbitration and may even make an award. This prevents parties from using challenges merely as a tactic to delay the arbitration. However, to protect the parties, section 26(2) empowers the court to refuse the enforcement of any such award, and section 26(5) allows the court to set aside the award if it ultimately upholds the challenge. 

Termination of an arbitrator’s mandate 

An arbitrator’s mandate may terminate in several situations. It may end if the arbitrator becomes legally or physically unable to perform his functions, or if the arbitrator fails to act without undue delay. The mandate also terminates on the death of the arbitrator, because the authority of an arbitrator is personal. If a controversy exists regarding these grounds, any party may apply to the Court of First Instance for a final decision. 

However, under section 29, the death of the person who appointed the arbitrator does not revoke the arbitrator’s authority. The arbitrator may continue to act unless there is some other reason why the mandate has ended. 

An arbitrator may also withdraw or resign from office, including where a challenge has been made. The parties may also agree to terminate the arbitrator’s mandate. In the ordinary course, the mandate ends when the tribunal has completed its function by making a final award and becomes functus officio. 

Where an arbitrator’s mandate terminates, a substitute arbitrator is usually appointed according to the same rules that applied to the original appointment. 

Immunity of arbitrators and appointing authorities 

To safeguard the integrity and finality of the process, section 104 provides that an arbitral tribunal is not liable in law for acts or omissions in the performance of its functions unless it is proved the act was done dishonestly. This protection is mandatory, cannot be waived by agreement, and extends to the tribunal’s employees and agents. 

Similar immunity is granted under section 105 to appointing authorities (such as the HKIAC) and other bodies performing administrative functions in connection with the arbitration. They are only liable if their acts or omissions are proven to be dishonest. In Hong Kong, “dishonesty” is used as the statutory standard rather than “bad faith” to connote a lack of probity or a deceptive intent for personal gain, providing a high threshold that protects arbitrators even in cases of negligence. This immunity remains in effect even if an arbitrator resigns before the completion of the proceedings.