The most important arbitration development in the coming year will be the coming into force of the Arbitration Ordinance, which was passed on 11 November 2010 (see Legal update, Hong Kong passes new Arbitration Ordinance).

The Arbitration Ordinance provides a six year transition period for domestic arbitrations, so it can be expected that some of the changes to the domestic regime will happen on a gradual basis. However, the adoption of a unified system governed by internationally recognised principles is likely to streamline the arbitration process in Hong Kong, making it an even more attractive venue to parties looking for efficiency and certainty in the resolution of their disputes.

The new Arbitration Ordinance removes the distinction between domestic and international arbitration which existed under the previous legislation, and creates a unified system based on the UNCITRAL Model Law (Model Law). These reforms aim to create an arbitration system that continues to accord with widely accepted international practice and maintains Hong Kong's position as a state-of-the-art arbitration venue for international arbitration.

The new regime provides a framework designed to:

It will be interesting to see how provisions taken from the Model Law are applied domestically, particularly those on interim measures. Those provisions will provide greater clarity in terms of the tribunal's power to grant interim measures, such as an order for preservation of assets, in domestic arbitrations. They will also empower the arbitral tribunal to grant preliminary orders directing a party not to frustrate the purposes of any interim measures.

The Arbitration Ordinance also retains some key provisions from Hong Kong's existing legislation, in particular in relation to enforcement. The provisions under the previous regime covering awards that are made in a New York Convention state or in mainland China are retained and also mirrored in a new section covering enforcement in Hong Kong of awards that are not made in a New York Convention state or in mainland China, providing further details on the evidence needed to enforce (and the grounds for refusal to enforce) such awards.