Arbitration is a form of Alternative Dispute Resolution. Besides its principal features such as the finality of award and flexibility in proceedings, one must consider the costs of going through such a proceeding.
The costs of Arbitration – appointment
The Hong Kong International Arbitration Centre (HKIAC) has that, between 1 November 2013 and 31 May 2019, the average duration of arbitration is approximately 15.8 and it costs 119,078 US Dollars on average.
Furthermore, the cost of conducting ad hoc arbitration with HKIAC are as of the following:
| Actions | Fee cost (HKD) |
| Appointing one arbitrator | 8,000 |
| Fees for determining the number of arbitrators | 8,000 |
| The Challenge Registration fee | 50,000 |
Costs of arbitrators
An hourly rate for an arbitrator averages around 4,000 to 6,000 HKD per hour.
Costs of expert witnesses
The report of the Legislative Council on the cost of arbitration has found that, on average, expert witnesses in arbitration cost between 2,500 to 4,000 HKD per hour.
Administration costs and Fees of the Arbitral Tribunal
Administration costs and arbitral tribunal fees are charged according to the sum in dispute. Generally, if the disputed sum is higher, the fees that are chargeable will be higher. Please visit HKIAC’s website to check its tier list for both of the fees.
https://www.hkiac.org/arbitration/fees/administered-arbitration-fees
Venue Costs
The HKIAC charges at an daily hourly rate of around 7,500 HKD for an arbitration hearing room. However, a different rate applies for virtual hearing.
Who pays the costs of arbitration?
Generally, the losing party will have to bear the costs incurred by the winning party, as far as the arbitrator considers as reasonable to do so, including the arbitrator’s fees. The arbitration will also consider whether the losing party has made any settlement offer.
Key Takeaways
- Primary fees of arbitration include the cost of appointment, cost of the arbitrator, administrative and arbitral tribunal fees, and the cost of the hearing.
- Arbitration can be a very costly; administrative and arbitral fees are charged according to the disputed sum.
- Generally, the losing party of the arbitration will have to bear the cost of arbitration.
References
The Hong Kong International Arbitration Centre (“HKIAC”):
https://www.hkiac.org/content/costs-duration
Legislative Council, “Costs of Conducting Arbitral Proceedings in Hong Kong”, LC Paper No. CB(2)2546/08-09(03):
https://www.legco.gov.hk/yr08-09/english/bc/bc59/papers/bc591005cb2-2546-3-e.pdf