Originially from: World Arbitration and Mediation Review (WAMR)      

By Peter S. Caldwell, Secretary-General, Hong Kong International Arbitration Centre

On 6 April 1990, the Hong Kong arbitration law was amended, creating two arbitration regimes. One regime, which is broadly similar to English arbitration law, applies to domestic arbitration, and the other, which is governed by the UNCITRAL Model Law, applies to international arbitration. [Editor’s Note; Only the international regime is discussed herein.]

The definition of “international” is that of Article 1(3) of the UNCITRAL Model Law:

“An arbitration is international if: (a) the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their places of business in different States; or (b) one of the following places is situated outside the State in which the parties have their places of business: (i) the place of arbitration if determined in, or pursuant to, the arbitration agreement; (ii) any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected; or (c) the parties have expressly agreed that the subject-matter of the arbitration agreement relates to more than one country.”

Article 1(4) states that, for the purposes of Article 1(3), “(a) if a party has more than one place of business, the place of business is that which has the closest relationship to the arbitration agreement; (b) if a party does not have a place of business, reference is to be made to his habitual residence.” It is by this definition that the applicable regime—international or domestic—is decided.

Despite the definition of “international” arbitration above, parties are free to opt into the domestic regime

either before or after the dispute arises. Section 2L enables parties who would otherwise come within the domestic regime to opt into the international regime, but only after the dispute has arisen.