1. CIArb Workshop: Costs in Arbitration
28 March 2017
Hong Kong
Dr. Fan Yang, FCIArb
Founding Director
International Dispute Resolution Academy (IDRA)

2. Award and Assessment of Costs
I. Costs under the Hong Kong Arbitration Ordinance
II. Assessment of Costs in Hong Kong courts
III. Costs under the HKIAC Administered Rules

3. Hong Kong Arbitration Ordinance (Cap.609)
Section 74 [Non-ML provision]
(1) costs of the arbitral proceedings
(2) all relevant circumstances (offer of settlement)
(3) costs of application (including interim measure)
(4) time of payment of (3)
(5) obligation to assess/award costs
(6) not obliged to follow court taxation
(7) reasonable costs, may allow preparation costs
(8) Arbitration agreement that provides for Parties to pay their own costs (Void)
(9) ‘compromis’ – not void

4. Hong Kong Arbitration Ordinance (Cap.609)
Section 75: Court taxation of costs of arbitral proceedings
(1) costs (other than the fees and expenses of the tribunal) to be taxed by the court “on the party and party basis” in accordance with rule 28(2) of Order 62 of the Rules of the High Court (Cap 4 sub. leg. A). (Amended 7 of 2013 s. 7)
(2) additional award as a result of taxation.
(3) taxation by court not subject to appeal.
(4) not apply to s.74(3).

5. Hong Kong Arbitration Ordinance (Cap.609)
Section 57 [Non-ML provision]
Arbitral tribunal may limit the amount of recoverable costs (as parties’ own costs).

6. Costs in Hong Kong Courts
“Costs follow the event”
Unless agreed, the costs to be assessed (or “taxed”) by the court
Hong Kong RHC, O.62:
Party-and-party
Common fund
Indemnity
Trustee
Solicitor and own client
Sanctioned offers and sanctioned payments, O.22
Split trial: offer on liability (O. 33, r. 4A)

7. The Hong Kong Civil Justice Reform (2009)
The importance of Cost Effectiveness
The case of A v R [2010] 3 HKC 67
Reyes J on costs: ‘absent special circumstances, when an award was unsuccessfully challenged the court will normally consider awarding costs against a losing party on an indemnity basis.’

8. The HKIAC Administered Rules (2013)
How the rules guide the tribunal in regards to costs:
Article 33

9. Thank you!