2. Commencement of arbitration

2. Commencement of arbitration

Commencement and the notice of arbitration 

An arbitration is formally initiated when one party serves a written notice on the other party or parties expressing an intention to refer a specific dispute to arbitration. Under section 49(1) of the Arbitration Ordinance (Cap. 609), unless the parties have agreed otherwise, the proceedings are deemed to have legally commenced on the date this request is received by the respondent. This timing is critical for the application of statutory limitation periods, as the service of a timely notice protects a claimant from arguments that their claim is time-barred. If the arbitration agreement includes specific formalities, preliminary procedures, or timeframes for the notice, these conditions precedent must be strictly followed to ensure the tribunal has jurisdiction and that any subsequent award is valid and enforceable. 

The request for arbitration 

The document initiating the process may be called a “Notice of Arbitration”, “Request for Arbitration”, or “Application for Arbitration”. The specific nomenclature used has no legal significance; rather, the validity of the document depends on its substance and effect. At a minimum, the request must leave the recipient in no doubt of the sender’s intention to resort to arbitration and must indicate that an action in response is required, such as the appointment of an arbitrator. In institutional arbitration, such as those administered by the Hong Kong International Arbitration Centre (“HKIAC”), the process is typically started by filing a formal request using specific forms that require the claimant to certify that all details are true and accurate. 

Institutional requirements 

In institutional arbitration, the process may be governed by the specific set of rules promulgated by the arbitral institution appointed to administer the proceedings. These rules are typically incorporated by reference into the parties’ arbitration agreement. Because arbitration is a contractual process, these institutional schemes override non-mandatory default procedural provisions of the Arbitration Ordinance unless the parties have specifically agreed to modify them. 

For example, the claimant may be required to communicate a Notice of Arbitration to both the chosen institution and the respondent, and an arbitration may be deemed to commence on the date on which the chosen institution receives a copy of the Notice of Arbitration. 

Mandatory content of the request 

To allow the respondent to prepare an informed response, the notice must provide sufficient particulars of the dispute. Under common practice and institutional rules like those of the HKIAC, a valid request should include: 

1. The names and contact details of all parties and their representatives. 
2. A copy of the arbitration agreement being invoked and the contract out of which the dispute arises. 
3. A description of the dispute, including the circumstances in which it arose and the approximate amount at issue. 
4. The relief or remedy being sought by the claimant. 
5. A proposal for the number of arbitrators and the method of their appointment if not already agreed. 

Respondent’s response and counterclaims 

Following the receipt of the notice, the respondent is typically given an opportunity to provide a summary of its defences and any counterclaims it wishes to assert. While some procedural rules treat the respondent’s answer as optional, providing this information early helps the appointing authority or the tribunal understand the full scope of the case before the first hearing. A counterclaim is legally defined as a claim made by the respondent and is treated with the same weight as the claimant’s initial case. The arbitral tribunal has jurisdiction to decide on a counterclaim, or a claim relied on for the purpose of a set-off, provided the subject matter falls within the ambit of the same arbitration agreement. 

Defining the issues to be decided 

The notice of arbitration serves as the framework for the proceedings, as it delineates the scope of the reference and the specific issues the tribunal is empowered to decide. It is essential to draft the notice with sufficient width because it is generally not possible to raise new issues later in the proceedings if they were not encompassed by the original notice. Any claim found to be outside the ambit of the original notice would technically require a separate arbitration, though such matters could potentially be consolidated later. Once the tribunal is constituted, the parties and the arbitrator will often agree on a “list of issues” or “terms of reference” to further refine the factual and legal points that require a binding determination.