Newsflash - COVID-19 Online Dispute Resolution
In our previous advisory “Hong Kong LawTech Development – Online Dispute Resolution” we discussed the introduction of Online Dispute Resolution (“ODR”) through the plaform of eBRAM (electronic Business Related Arbitration & Mediation system).
In anticipation of an increase in disputes arising from or relating to COVID-19 (“COVID-19 Disputes”), the Secretary for Justice has, on 13 April 2020, announced on her Blog an extension of the application of ODR and introduced the COVID-19 ODR Scheme (“COVID-19 ODR Scheme”). This would be launched in June 2020.
The COVID-19 ODR Scheme aims to provide speedy and cost-effective means to resolve COVID-19 Disputes, in particular for micro, small and medium-sized enterprises (“MSMEs”) affected by the current pandemic.
The features of the COVID-19 ODR Scheme are as follows:
The COVID-19 ODR Scheme will engage the eBRAM system to provide ODR services.
The COVID-19 ODR Scheme plans to cover COVID-19 Disputes with the claim amount for each case to be capped at HK$500,000 (approximately US$64,103 equivalent).
Either one of the parties (claimant or respondent) must be a Hong Kong resident or company.
The registration fee for participating in the COVID-19 ODR Scheme will be HK$200 (approximately US$26 equivalent), payable by each party.
The COVID-19 ODR Scheme’s offers a multi-tiered dispute resolution mechanism. The parties will first attempt to negotiate their dispute. If the dispute is unable to be resolved, the parties will enter into mediation. If a settlement agreement cannot be reached through negotiation and mediation, arbitration will be commenced for a final, binding and enforceable award.
Each tier will be conducted within a limited time, with details to be further announced.
The dispute resolution process will be handled online, in line with the social distancing measures during the COVID-19 pandemic.
The parties will be at liberty to appoint a neutral third party of their choice, failing which there will be a mechanism for appointment.
It should however be noted that the COVID-19 ODR Scheme is not compulsory, but offers optional roads to resolution for the disputing parties. Furthermore, the jurisdiction and dispute resolution clauses in the contracts concerned remain applicable. Disputing parties will therefore be required to enter into a separate dispute resolution agreement to record their consent if they decide to adopt the COVID-19 ODR Scheme instead of the chosen form of dispute resolution as outline in the contracts.
For details of the announcement regarding the COVID-19 ODR Scheme, please refer to: https://www.news.gov.hk/eng/2020/04/20200413/20200413_110404_476.html.
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