Arbitrators in Hong Kong may soon be empowered to freeze assets in a bid to
preserve evidence, if the appropriate rules and regulations are incorporated
into the Arbitration Ordinance. Whilst no specific timetable has been slated
as yet, it looks likely that arbitrators will be armed with these emergency
powers later this year.* These measures are designed to address a legal
lacuna which at present allows parties to tamper with assets and evidence
before an arbitration is heard. And sometimes this can take weeks if not
months. Currently, only judges in Hong Kong are able to issue interim orders
freezing assets.
Though the extension of power for arbitrators has been met with some
scepticism, Albert Wong Kwai-huen, the chairman of Hong Kong’s arbitration
centre is in favour of the rule. As powerful as he thinks these measures can
be, he believes that they are an extension of existing, but rarely used powers.
The controversy of handing these privileges over to arbitrators lies in the
fact that they are open to abuse. The rationale being that the training needed
to become an arbitrator is not as cumbersome as the training associated with
becoming a lawyer and to that extent, the new powers may be used inappropriately.
On the flipside, with Hong Kong rapidly becoming a hub for Asian arbitration,
it is argued that such a function is necessary given the mounting pressure on
the courts and the rise in arbitrations.
*according to an article in the South China morning Post: “Rise in
arbitrators’ powers queried” – 19 March 2012
Recent examples of consent decrees in Korea and their implications
