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HKIAC allows consolidation of arbitration cases

The Hong Kong International Arbitration Centre can now combine arbitrations if they involve either a common question of law or fact, claims arising from the same transaction, or compatible arbitration agreements.06 Jan 2016

This consolidation is possible in related disputes under a web or chain of contracts, even if the parties to each transaction are different.

A practice note issued on 1 January covered these provisions on consolidation, as one of three mechanisms that the HKIAC has designed to deal with multi party and / or multi-contract disputes, the arbitration centre said.

The other two mechanisms are a provision to allow an additional party to be added to an existing arbitration, and a provision that lets a claimant commence one arbitration under multiple contracts.

HKIAC has had to deal with "numerous" requests for consolidation since it introduced the original two mechanisms in 2013, it said. For example, in one case related to a single loan transaction the HKIAC consolidated two arbitrations on claims, a guarantee and two memoranda of understanding, all of which provided for HKIAC arbitration and gave rise to the same factual and legal issues, it said.

"Parties who have utilised such tools have found them effective in reducing costs and avoiding the risk of conflicting rulings," the HKIAC said.

The HKIAC opened its first office in mainland China in November