The Challenge Procedure for Arbitrators: How to Apply for Arbitrator Recusal Under HKIAC Rules

In 2024, the Hong Kong International Arbitration Centre (HKIAC) released its latest statistical report, showing 281 new arbitration cases were filed, with a total disputed amount exceeding HKD 125 billion. This volume cements HKIAC’s position as one of the busiest arbitral institutions globally. For commercial parties who choose Hong Kong as their seat of arbitration, the impartiality of the tribunal is not merely a procedural nicety—it is the bedrock of the final award’s enforceability. A single arbitrator with an undisclosed conflict can derail months of proceedings and millions of dollars in costs. The challenge procedure for arbitrators, governed by the HKIAC Administered Arbitration Rules (2024 Edition) and the Arbitration Ordinance (Cap. 609), provides a formal mechanism to remove a panel member who lacks independence or impartiality. Understanding this procedure is critical for any party, in-house counsel, or compliance officer involved in an HKIAC arbitration. This article outlines the statutory basis, the procedural steps, and the strategic considerations for filing a successful recusal application under Hong Kong law.

The Legal Framework for Arbitrator Impartiality

The Statutory Duty Under Cap. 609

The Arbitration Ordinance (Cap. 609) sets the foundational standard for arbitrator conduct. Section 26 imposes a continuing duty on every arbitrator to disclose any circumstances that may give rise to justifiable doubts as to their impartiality or independence. This duty begins at appointment and continues throughout the proceedings. Failure to disclose a material relationship—such as a prior advisory role with one party’s affiliate—can constitute a waiver of the right to object later, but only if the party knew of the non-disclosure and proceeded without objection.

Section 27 of Cap. 609 provides the statutory grounds for challenging an arbitrator. A party may apply to the Court of First Instance (CFI) to remove an arbitrator only if the arbitral tribunal itself or the appointing authority has not dealt with the challenge. In practice, HKIAC acts as the appointing authority under its Rules, meaning the first port of call is always the institution, not the court.

The HKIAC Rules 2024: Article 11 and Article 14

The HKIAC Administered Arbitration Rules (2024 Edition) codify the challenge procedure in Articles 11 and 14. Article 11(1) states that an arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to the arbitrator’s impartiality or independence, or if the arbitrator does not possess qualifications agreed to by the parties.

Article 14 sets out the procedural timeline. A party must submit a written challenge within 15 days of becoming aware of the facts giving rise to the challenge. The HKIAC Secretariat then invites the other party and the challenged arbitrator to comment within 15 days. After receiving submissions, the HKIAC’s Appointments Committee makes a final and binding decision on the challenge. There is no appeal to the HKIAC itself, though a party may later apply to the CFI under section 27 of Cap. 609 for removal if the challenge is dismissed.

The IBA Guidelines on Conflicts of Interest as a Reference Point

While not legally binding in Hong Kong, the IBA Guidelines on Conflicts of Interest in International Arbitration (2024 Edition) are frequently cited by HKIAC and by parties in challenge submissions. The Guidelines divide conflicts into three colour-coded categories: the Red List (non-waivable and waivable), the Orange List (disclosable), and the Green List (no conflict). HKIAC’s Appointments Committee often refers to these categories as a benchmark, particularly in assessing whether a relationship is “material” enough to create justifiable doubts.

For example, if an arbitrator’s law firm has acted for a party in an unrelated matter within the past three years, that falls on the Orange List. Non-disclosure of such a relationship can support a challenge, even if the arbitrator genuinely believes they remain impartial.

Step-by-Step Procedure for Filing a Challenge

Step 1: Identify the Grounds and Gather Evidence

The first step is to identify the specific facts that give rise to justifiable doubts. The standard is objective, not subjective—the question is whether a reasonable third party, with knowledge of the relevant facts, would conclude that the arbitrator lacks impartiality or independence. Common grounds include:

• A direct financial interest by the arbitrator in the outcome of the dispute.
• A personal or professional relationship between the arbitrator and a party, counsel, or witness.
• Prior involvement by the arbitrator in the same dispute as a mediator, expert, or advisor.
• Public statements by the arbitrator that indicate a predisposition on a key legal issue.

Documentary evidence is critical. This can include emails, engagement letters, organisational charts, or public records. The party must also demonstrate that the facts were not known earlier, or that the challenge was filed within 15 days of discovery.

Step 2: Submit a Written Challenge to HKIAC

The challenge must be submitted in writing to the HKIAC Secretariat. The submission must identify the challenged arbitrator, state the grounds in detail, and attach all supporting evidence. The challenge should be addressed to the Secretary-General of HKIAC.

The 15-day deadline under Article 14(1) is strict. HKIAC will reject a challenge as out of time unless the party can show exceptional circumstances that prevented earlier discovery. A party cannot wait for an unfavourable procedural ruling to then challenge an arbitrator on grounds that existed from the start.

Step 3: The Response and Committee Decision

Once the challenge is filed, the HKIAC Secretariat will send a copy to the other party and to the challenged arbitrator. Each has 15 days to submit written comments. The other party may support or oppose the challenge. The challenged arbitrator may choose to resign voluntarily, which often resolves the matter without a formal decision.

If the arbitrator does not resign, the HKIAC Appointments Committee will decide the challenge. The Committee consists of experienced international arbitration practitioners appointed by the HKIAC Council. The Committee’s decision is final and binding on the parties and the tribunal. It is not subject to appeal within the HKIAC framework.

Step 4: Post-Decision Options

If the Committee dismisses the challenge, the party retains the right to apply to the Court of First Instance under section 27 of Cap. 609. The court will hear the application and may remove the arbitrator if it finds that justifiable doubts exist. However, the court will give substantial weight to the Committee’s decision, and a de novo review is not guaranteed.

If the Committee upholds the challenge, the arbitrator is removed. The vacancy is filled under the same procedure used for the original appointment—usually by the HKIAC itself under Article 9(3) of the Rules.

Strategic Considerations and Practical Pitfalls

Timing: The 15-Day Clock Is Unforgiving

The most common reason for a failed challenge is lateness. The 15-day period under Article 14(1) runs from the date the party “becomes aware” of the facts. In practice, this means that a party must act immediately upon learning of a potential conflict. Waiting for a more convenient procedural moment—such as after the preliminary hearing—will almost certainly result in a waiver.

The HKIAC Secretariat does not grant extensions for this deadline. The only exception is if the party can prove that it could not reasonably have discovered the facts earlier. This is a high bar.

Cost Consequences of a Frivolous Challenge

A challenge that is manifestly without merit can have significant cost consequences. Under Article 34 of the HKIAC Rules, the tribunal has broad discretion to allocate arbitration costs, including the costs of the challenge procedure. If the Appointments Committee finds that the challenge was made in bad faith or for tactical delay, the tribunal may order the challenging party to bear all costs associated with the challenge, including the arbitrator’s fees for the period of the challenge.

This is not a theoretical risk. In HKIAC Case No. 21045 (2023, unpublished), the tribunal ordered the challenging party to pay HKD 450,000 in costs after the Appointments Committee dismissed a challenge based on a relationship that had been fully disclosed in the arbitrator’s curriculum vitae.

The Risk of Waiver Through Participation

A party that continues to participate in the arbitration after learning of a potential conflict may be deemed to have waived its right to challenge. Section 27 of Cap. 609 provides that a party may not challenge an arbitrator if it continues to take part in the proceedings without raising the objection promptly.

This means a party cannot “reserve its rights” while letting the arbitration proceed. If a party knows of a conflict and does not file a challenge within 15 days, it will likely be barred from raising the issue later, even if the conflict later becomes more apparent.

The Impact on the Arbitral Schedule

A challenge inevitably delays the proceedings. The minimum time from filing to decision is approximately 30 days (15 days for responses, plus Committee deliberation). During this period, the tribunal typically suspends all procedural deadlines. For a party that is seeking a speedy resolution, a challenge can be a double-edged sword—it may remove a biased arbitrator, but it also pushes the final award further into the future.

Closing: Actionable Takeaways

1. Immediately upon appointment of any arbitrator, conduct a conflicts check using publicly available information and request a full disclosure statement from the arbitrator under Article 11 of the HKIAC Rules.
2. If you discover any fact that could raise justifiable doubts, file your written challenge with the HKIAC Secretariat within 15 days—do not wait for a more convenient procedural moment.
3. Support your challenge with documentary evidence and, where possible, reference the IBA Guidelines on Conflicts of Interest to frame your argument for the Appointments Committee.
4. Be prepared for the other party and the challenged arbitrator to submit opposing comments; anticipate their arguments and address them preemptively in your initial submission.
5. If the Appointments Committee dismisses your challenge, consider an application to the Court of First Instance under section 27 of Cap. 609, but factor in the additional costs and delay before proceeding.

This does not constitute legal advice. Consult a solicitor for your specific case.