Commencing arbitration in Hong Kong

Extension of time

The English Arbitration Act 1950, s27, conferred wide powers upon the English courts to override the agreed time limits for the commencement of arbitration. It was possible to apply to the courts for an extension of time, and this could be granted providing that the applicant could demonstrate that refusal of an extension would give rise to ‘undue hardship’. The cases demonstrated a willingness of the courts to intervene as long as the applicant had a reasonable excuse for the delay and the respondent would not be seriously prejudiced by having to face arbitration proceedings out of time. The Arbitration Act 1996 repealed s27, on the basis that it encouraged the courts to intervene in arbitrations, and replaced it with a far more limited provision, s12 of the Arbitration Act 1996. This provides that contractual time limits can be extended only if the court is satisfied: ‘(a) that the circumstances are such as were outside the reasonable contemplation of the parties when they agreed the provision in question, and that it would be just to extend the time, or (b) that the conduct of one party makes it unjust to hold the other party to the strict terms of the provision in question’. Although the post-1996 cases are not fully consistent on the point, the general drift of them is that the applicant has an uphill task in persuading the court to extend time. The problem of extension of time was also considered by the Hong Kong Court of Appeal in Downer & Co Ltd v Airport Authority , February 2000, in the context of leave to appeal against an arbitrator’s decision to extend time.