The New Arbitration Rules of Shenzhen Court of International Arbitration Come into Effect

A new set of Arbitration Rules (the “Rules”) published by the Shenzhen Court of International Arbitration (“SCIA”) on 23rd December 2018, recently came into effect on 22nd February 2019. The major highlights of the Rules include: 1) the introduction of a new mechanism for declaration by arbitrators and parties at the hearing; 2) promotion and safeguard of bona fide cooperation; 3) the enactment of SCIA Guidelines on ‘optional appellate arbitration procedure’ is the first ever exploration and introduction of ‘optional appellate arbitration procedure’ in China; and 4) strengthening of the measures crucial to diversification, specialization, high-efficiency and low-cost.

Singapore International Arbitration Centre：

the Most Preferred Arbitral Institution Based in Asia

In 2018, the Singapore International Arbitration Centre (“SIAC”) received 402 new cases from parties of 65 jurisdictions. SIAC administered 375 (93%) of these new cases, with the remaining 27(7%) being ad hoc appointments. Over the last decade, the number of new case fillings at SIAC have increased by more than 4 times and in 2018 SIAC’s total sums in dispute in respect of all new case filings increased to USD 7.06 billion (SGD 9.65 billion).

In a 2018 international survey by the prestigious Queen Mary University of London and White & Case, the SIAC was ranked the 3rd most preferred arbitral institution in the world. The survey also showed that the SIAC is currently the most preferred arbitral institution based in Asia.

The year 2018 saw the United States top the foreign user rankings of the SIAC for the first time, while India and China both remained major contributors of cases to the SIAC. The other top 10 foreign users were from a mix of common law and civil law jurisdictions, namely, the Cayman Islands, Hong Kong SAR, Indonesia, Japan, Malaysia, South Korea and the United Arab Emirates, attesting to the SIAC’s popularity among international arbitration users.

Latest Practice of Hong Kong Arbitration Ordinance (Cap 609) Section 20 (1)   — Court’s Standard of Review on Defendant’s Application for Stay of Action for Arbitration

Relevant Provision:

Section 20 of the Arbitration Ordinance (Cap 609) , i.e. article 8 of UNCITRAL Model Law (Arbitration agreement and substantive claim before court) provides,“ (1) …a court before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so requests not later than when submitting his first statement on substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed.”

Standard of Review: 

(1) Is the arbitration clause an arbitration agreement? 

(2) Is the arbitration agreement null and void, inoperative or incapable of being performed?

(3) Is there any substantial dispute between the parties?

(4) Is the dispute between the parties within the ambit of the arbitration agreement?

In Chu Kong v. Lau Wing Yan and others [2018] HKCA 1010, the key issue is whether or not the arbitration agreement is capable of being performed, due to the plaintiff, Chu Kong, not having the necessary locus standi to bring the matter to arbitration.

Court’s View: 

(1) The requirement to stay of action for arbitration under Arbitration Ordinance section 20(1) is mandatory. (2) The Court must stay the action unless it finds the arbitration agreement void, inoperative or incapable of being performed. (3) In this case, although the plaintiff Chu Kong has no locus standi to bring the arbitration, he may find alternative ways to address the issue of standing.  For example, it is open for Chu Kong to apply to the Court for an order compelling Giant Progress Limited to commence arbitration against Ever Ning Shipping and Trading Limited.

England and Wales High Court Case:

The Arbitration Clause in the Original Contract Can Apply to a Settlement Agreement without its own Arbitration Clause

In Sonact Group Limited v. Premuda SPA [2018] EWHC 3820, the key issue was that the settlement agreement being relied upon was not contained in its own document but merely part of an exchange of emails, which also did not include an arbitration clause. The court was asked to decide whether the arbitration clause in the original contract shall apply to the settlement agreement?

Court’s View: 

(1) The exchange of emails shall be regarded as a settlement agreement, and it is obvious that it is the parties’ intention that the arbitration clause in the original contract would continue to apply in the event that the agreed settlement sum was not paid. (2) There is no bright line rule that once the parties form a new legal relationship, including entering into a settlement agreement in this case, that an arbitration clause from a previous contract can no longer apply.

How to Determine the Time Limitation for Enforcement of an Arbitral Award by the High Court of Hong Kong

In CL v. SCG [2019] HKCFI 398, the key issue for the High Court to determine was when the exact date for the cause of action occurred, and whether it was time barred by the Limitation Ordinance.

Relevant Provision:

Section 4 (1) (c) of the Limitation Ordinance (Cap 347) provides, “The following actions shall not be brought after the expiration of 6 years from the date on which the cause of action accrued, that is to say –(c) actions to enforce an award, where the submission is not by an instrument under seal.”

Court’s View:

(1) The fact that SCG as debtor demonstrated a clear and unequivocal intention not to be bound by a 2011 arbitral award (“the Award”) and its obligations under the Award, shall not lead to the accrual of

the cause of action. The court rejected CL’s argument that a cause of action for enforcement of an arbitral award only starts to accrue when SCG first expressed their intention not to honor the Award. Otherwise, this would allow SCG to indefinitely defer and postpone the date of accrual, along with delaying any creditor’s their right to enforce the debt due under the Award. The court decided that a party simply expressing whether or not it would honor the Award does not suffice to the date for which a cause of action is accrued. Instead, the date of accrual shall commence when the creditor becomes entitled to apply for enforcement of the Award. (2) Even if the ‘Arrangements of the Supreme People's Court on the Reciprocal Enforcement of Arbitration Awards by Mainland China and the Hong Kong Special Administrative Region’ provides that the applicant may not lodge separate applications in the courts of the Mainland and Hong Kong at the same time, the Court still holds that the time limitation in Hong Kong for enforcement of an arbitral award shall continue to run during the period when a successful party to an arbitral award applies for enforcement on the Mainland.