The Existing Ordinance provides separate regimes for domestic and international arbitrations. This has often been criticised as confusing and outdated, and the New Ordinance eliminates this by adopting a single regime. The unified regime is substantially modelled, in both form and substance, on the 2006 version of the UNCITRAL Model Law on International Commercial Arbitration (Model Law). Conversely, the Existing Ordinance adopts the 1985 version of the Model Law. The New Ordinance extends the application of the Model Law to both international and domestic arbitrations.

Although the default position under the New Ordinance is that the bifurcated regime has been abolished, parties can still agree to opt-in to a regime resembling the domestic regime under the Existing Ordinance. The opt-in mechanism is provided under sections 99 to 101 of the New Ordinance.

Section 99 allows parties to adopt one or more of the provisions of Schedule 2, essentially enabling them to create a bespoke regime for their arbitration. Among the provisions that parties can choose to adopt under Schedule 2 are:

The ability to choose from and combine these powers gives the parties greater flexibility, and the potential for greater party autonomy, than is currently available under the Existing Ordinance.

Under sections 100 and 101, the parties are automatically opted-in to the whole of Schedule 2 in relation to the following:

However, to reinforce party autonomy, section 102 of the New Ordinance allows parties to opt-out of these automatic opt-in provisions if they choose to do so.

These transitional provisions are tailored to meet the needs of the construction industry which is one of the main users of the domestic arbitration regime.

One of the main features of the 2006 version of the Model Law was the introduction of a new Chapter IV A setting out in detail the arbitral tribunal's power to order interim measures. Under the New Ordinance, an arbitral tribunal will have express power to:

An interim order or a preliminary order made by an arbitral tribunal will be enforceable as an order or direction of the court (section 61).

In terms of the enforcement of interlocutory orders or directions, the arbitral tribunal will have the power to make peremptory orders to compel compliance with its orders and directions (section 53). Non-compliance may result in the tribunal making an order that a party may not rely on any allegation or material which was the subject of the peremptory order, drawing adverse inferences from the non-compliance, making an award based solely on the materials that have been properly submitted to the tribunal, or making an order as to the payment of costs which have been incurred as a result of non-compliance.

In addition, a tribunal can make orders for the payment of costs (including the fees and expenses of the tribunal) by a party either with immediate effect or at a time specified by the tribunal (section 74). This is another powerful method by which tribunals are empowered to impose real time sanctions on parties who are inclined to adopt obstructive tactics to stall the progress of arbitrations.

These important and powerful new measures, which will be available to a tribunal under the New Ordinance, are not dissimilar to powers which are already available in Hong Kong civil court proceedings.

The ability of the court to intervene in domestic arbitrations under the New Ordinance will, unless the opt-in provisions are employed, be severely limited (see above, Opt-in mechanism). This results from the domestic regime under the Existing Ordinance being brought into line with the international regime.

Article 17J of the Model Law has not, however, been adopted by the New Ordinance. This Article sets out the powers of the court to grant interim measures. Section 45 of the New Ordinance distinguishes between arbitrations that are taking place in Hong Kong, and those which are not. The Hong Kong court's power to grant interim measures in aid of arbitrations that are or will be commenced outside Hong Kong is limited to arbitrations which are capable of giving rise to awards enforceable in Hong Kong, and then only to the extent that the interim measures are of the type or description that could be granted by the Hong Kong court in relation to an arbitration taking place in Hong Kong (section 45(5)). This is much more restrictive than the power conferred by Article 17J of the Model Law. However, the restriction enables consistency to be maintained as between the interim measures which the court may grant in respect of Hong Kong seated arbitrations and those taking place elsewhere. Orders made by the court under section 45 are not subject to appeal.

Subject to the parties opting-in to Schedule 2 of the New Ordinance, the grounds for an application to set aside an award are limited to those which correspond to the grounds for non-recognition and non-enforcement of awards under Article V of the New York Convention (section 81). In relation to domestic arbitrations, the removal of the judicial safety net currently available under the Existing Ordinance to challenge awards on the merits may not be regarded as unequivocally desirable, and parties will need to exercise care to select a system of arbitration that will best satisfy their dispute resolution needs.

The costs of arbitral proceedings are to be assessed by the tribunal itself (section 74). The taxation (that is, assessment) of such costs by the court is only available if the parties agree (section 75). This is a departure from the Existing Ordinance, where taxation by the court is the norm unless the award directs otherwise.

The New Ordinance also introduces a provision (section 77), which deals with the situation where the arbitral tribunal has not been paid. The tribunal may refuse to release its award unless there has been full payment of its fees, although the court may give directions as to how the tribunal's fees are to be determined. These provisions are intended to enhance the efficiency of tribunals in dealing with costs, and to give greater comfort to parties in respect of the tribunal's determination of its own fees.

Despite the substantial adoption of its other major provisions, the New Ordinance has not adopted Articles 35 and 36 of the Model Law dealing with the recognition and enforcement of arbitral awards. Instead, the New Ordinance sets out, in separate parts, the different mechanisms for the enforcement of New York Convention awards, Mainland Chinese awards, and awards which are neither Convention or Mainland awards. The mechanisms for the enforcement of Convention awards and Mainland awards are essentially identical to those under the Existing Ordinance.

In relation to awards which are neither Convention nor Mainland Chinese awards, the New Ordinance specifies the grounds on which enforcement may be refused. These grounds are essentially the same as those available under the New York Convention but there is one important difference: under section 86(2)(c) of the New Ordinance the court is permitted to refuse to enforce an arbitral award "for any other reason that the court considers it just to do so".

The common law position on the enforcement of non-Convention awards is that the court will refuse leave to enforce only if there are real grounds for doubting the validity of the award, or where the award is not in a form which can be entered as a judgment. Perhaps section 86(2)(c) is intended to preserve these residual grounds for refusing enforcement even if they do not fall within any of the New York Convention grounds for non-enforcement. The attempt to harmonise standards applicable to the enforcement for all three types of arbitral awards is a welcome development.

A number of other features of the New Ordinance deserve attention.

First, the confidential nature of arbitration has been codified. Under common law, it was arguably implicit that arbitration is private and confidential. However, the scope of that confidentiality was debatable. For example, it was uncertain whether confidentiality extended to just the hearing, or whether it also covered documents disclosed during arbitration proceedings.

Parties to international arbitrations generally show a strong preference for confidentiality, and the legislature has therefore made a conscious effort to reflect this in the New Ordinance. Section 18(1) of the New Ordinance defines the scope of the confidentiality, which should extend to documents disclosed in an arbitration, and the exceptions.

Second, section 19 of the New Ordinance contains a new definition of "in writing". The definition reflects Article 7 (Option 1) of the Model Law, which, in turn, is in line with the requirements for arbitration agreements under the Existing Ordinance.

Third, the New Ordinance states that a party shall be given a reasonable opportunity of presenting its case (section 46). This is based on Article 18 of the Model Law, except that section 46 substitutes "reasonable" for "full". This is intended to discourage excessive presentation by the parties of their cases in arbitration proceedings, and to emphasise the desire for efficiency and the expeditious nature of arbitral proceedings.

Finally, although an arbitrator has the ability under the Existing Ordinance to act as a mediator/conciliator in the same dispute (section 33), this power has in practice been rarely exercised. With recent initiatives in favour of mediation, including the changes brought about by the Civil Justice Reforms, it is hoped that parties will agree to the more frequent use of the powers under section 33. However, it is commonly accepted that the ability of a mediator/arbitrator to extract confidential information from the parties in the course of a mediation will be considerably less than that of a mediator who is independent of the arbitration (and, therefore, not "wearing two hats"). Obviously, parties will be concerned as to the use that may be made by both the tribunal and the opponent of confidential information disclosed during the mediation.