Adjudication Services

1. Object of Adjudication

• The object of adjudication is to provide a fair and expeditious means on an interim basis to resolve payment disputes arising under construction contracts without delay. The rules hereof should be interpreted in accordance with this object.
• The adjudication shall be decided under these rules and in accordance with the terms and conditions of the contract and its applicable law, and by a sole adjudicator impartially, who is both an experienced professional in the relevant discipline(s) in the construction industry and familiar with adjudication procedures and requirements.

These rules (“Rules”) are prepared in accordance with the Security of Payment Provisions (“SOPP”) regime as set out in Hong Kong Government’s Technical Circular (Works) no. 6/2021 – Security of Payment Provisions in Public Works Contracts and should be understood and interpreted accordingly under this context.

2. Administration of Adjudication

• The Adjudication shall be submitted to and administrated by the Secretariat of HKICM, whose address is:

Rooms 801-2, 8/F On Lok Yuen Building 25 Des Voeux Road Central, Hong Kong

(Attention: Secretariat of HKICM)

Email:      adjudication@hkicm.org.hk

Tel: (852) 2523 2081    Fax: (852) 2845 4749

• Unless the adjudicator and the parties agree otherwise, any hearings conducted shall take place at the premises of HKICM and in the language adopted in the Contract in question.
• Notwithstanding any other rules herein, the parties shall remain jointly and severally liable for the fees and expenses of HKICM and the adjudicator until they are fully paid.
• Reference herein to days shall mean working days and within working hours from 9:00 am to 5:00 pm. Any communication or document may be served or submitted to the HKICM by the Claimants and/or the Respondents on working days, as the HKICM does not operate on Saturdays, Sundays or general holidays. Documents are deemed to be received on the day they are submitted to the HKICM.

3. Adjudication Request

• The party initiating the adjudication (“Claimant”) shall submit to HKICM a written request by completing an application form and submit it together with the supporting documents (“Request”) at any time to refer any payment dispute arising under the contract to adjudication.
• The Request shall be served simultaneously on every parties to the dispute (“Respondent”) and on HKICM. An adjudication shall be deemed to commence on the date when the Claimant issues a Notice of Adjudication to the parties after the Request is received by HKICM.
• The Request shall contain a concise statement of the nature and background information of the payment dispute, the issues arisen, the amount claimed, and remedy sought (“Statement of Claim”). It shall also contain the name of the Claimant and each Respondent and their addresses for service.
• The Request shall be made simultaneously with the prescribed fees settled by the Claimant in the amount determined by the HKICM. Failing to deposit the entire sum within 3 days could lead to termination of the proceedings subject to the discretion of the HKICM.

4. Appointment of Adjudicator

• Upon receiving the Request, the HKICM shall nominate one adjudicator based on the list of its panel of adjudicators and give the Claimant and Respondent written notice regarding its nomination, within 3 working days of the receipt of the Request, for the parties’ further consideration. The HKICM has full discretion over this nomination process.
• When nominating the adjudicators from the panel, the HKICM shall use its discretion appropriately, taking the following aspects into consideration
  • the background of the dispute and the professional perspectives in which the dispute relates;
  • whether the adjudicator has the qualifications and professional knowledge necessary for deciding over the dispute;
  • any potential conflict of interest that will give rise to justifiable doubts as to the adjudicator’s impartiality or independence;
  • whether the adjudicator nominated will likely accept the nomination; and
  • other aspects that the HKICM considers relevant or important.
• Before accepting the nomination, the nominated adjudicator should submit to the HKICM a written statement to declare that:
  • there are no circumstances likely to give rise to justifiable doubts as to the adjudicator’s impartiality or independence regarding this nomination, and that it has the duty to disclose any and all information in respect of such circumstances to the parties while it is incumbent of the adjudication proceedings;
  • it confirms the nature of the dispute shall fall within the sphere of its professional experience;
  • the adjudicator shall be devoted to the adjudication proceedings and to make sure the proceedings will be conduct within the time limits set out by the Rules;
  • it will comply with the principles of natural justice and decide the payment dispute in accordance with the applicable law and the terms and conditions of the Contract in question; and
  • it will act independently, impartially and in a timely manner and avoid incurring unnecessary expenses.
• Should the nominated adjudicator fail to respond within 1 day or should it be unable to make the above declaration in the written statement, the HKICM shall within 1 day nominate another adjudicator.
• If within 2 days after receiving the nomination of the adjudicator, the parties do not raise any substantial issues against such a nomination, the HKICM shall promptly and in its sole discretion appoint the nominee as adjudicator, and shall notify the parties of the appointment in writing as soon as possible.

5. Disclaimer of the Appointment

• The adjudicator and the HKICM are not agents of, or acting in any capacity for, any of the parties. The adjudicator is not an agent of the HKICM and the HKICM shall not be liable for anything done or omitted to be done by the adjudicator in the adjudication proceedings.
• HKICM or its appointed adjudicator or any person acting under the direction of HKICM shall not be liable for anything done or omitted to be done in the adjudication proceedings.
• The HKICM is not responsible for providing any advice in respect of the SOPP regime or any other related rules and regulations.

6. Claimant’s Submissions

• Unless its written submissions were contained in the Request or the Claimant elects to treat the Request as its submissions, the Claimant shall serve its submissions on each Respondent, the adjudicator and the HKICM, within 1 day of receipt of the written appointment of adjudicator.
• The Claimant may make necessary amendments to its original Statement of Claim submitted along with the Request in its written submissions.
• In support of the Statement of Claim, the Claimant may also include in its written submissions copies of all documents or evidence which could have a direct bearing on the issues of the dispute. All documents submitted shall be consecutively paragraphed, and page numbered, and accompanied with a table of contents identifying the documents submitted.

7. Respondent’s Submissions

• Within 20 days of receipt of the Claimant’s submissions, the Respondent shall serve its written response (“the Response”) on the Claimant, the adjudicator and the HKICM.
• The Response shall contain the Respondent’s concise reply in relation to the Notice of Adjudication, the Request and the Claimant’s submissions (“Statement of Defence”). The Response shall also contain copies of any additional documents, not contained in the Request and the Claimant’s submissions, which have an important and direct bearing on the issues in dispute. All documents submitted shall be consecutively paragraphed, and page numbered, and accompanied with a table of contents identifying the documents submitted.
• Upon a written request made by the Respondent within the 20-day time limit, the adjudicator may decide whether to give the Respondent a reasonable extension of time to prepare and serve its written submissions.

8. Amendments to the Request or Response

• During the conduct of adjudication, a party may amend or supplement its Request or Response, save that it is considered by the adjudicator inappropriate to allow such amendment to be made under the circumstances of the case.
• The Request or Response may not be amended, provided that the Request or Response shall fall outside the jurisdiction of the adjudicator after the said amendment.
• Where appropriate, HKICM and the adjudicator may adjust accordingly any fees or expenses of the adjudication based on the amendment made by any party.

9. Confidentiality

• The parties to the adjudication, and the adjudicator must not disclose or give to another person any information relating to —
  • the adjudication; or
  • the decision rendered in the adjudication.
• Despite the above, the Adjudicator may disclose or give to another person information if —
  
  • the information is in the public domain;
  • the disclosure is made with the consent of each of the parties and the adjudicator;
  • the disclosure is made in accordance with the contract or a requirement imposed by law;
  • the disclosure is necessary for the purpose of settlement of the adjudicated amount;
  • the disclosure is made to the HKICM; or
  • the disclosure is made to —

1. 1. 1. a professional or any other adviser of the party for the purpose of seeking legal or other professional advice;
      2. insurers or bankers for reasonable commercial purposes;
      3. enable proper applications for or assessments of payments; or
      4. the parties under the contract.

10. Payment on Account

• The adjudicator may from time to time direct the parties to make deposits with the HKICM as payments on account of the anticipated fees and expenses of the adjudication. Upon receipt of the deposits, the HKICM will acknowledge receipt of payment.
• Should a party fail to provide its share of the deposits as required, its share may be paid by the other party. Any failure to deposit the entire sum required by the specified period shall entitle the adjudicator to terminate the proceedings.
• Following the conclusion of the adjudication, the adjudicator shall collect the adjudicator’s fees and expenses out of the funds deposited with the HKICM. Any surplus funds remaining after the adjudicator’s fees and expenses have been paid in full shall be returned to the party that deposited it, unless otherwise directed by the adjudicator.

11. Overriding Duties of the Adjudicator

• The adjudicator shall act impartially and fairly, and in accordance with these Rules, the terms and conditions of the contract along with its applicable law.
• The adjudicator shall avoid incurring unreasonable expense or delay in adjudicating the dispute.
• The dispute shall be decided, and the decision of the adjudication shall be served to the parties and the HKICM by the adjudicator within 55 days from the date of his or her appointment, or any longer period which the parties all agree on.

12. Rules for the Adjudicator to Conduct Adjudication

• The adjudicator can on its own initiative and based on its own judgment ascertain the facts and the law necessary to determine the dispute.
• The adjudicator is not bound by the rules of evidence and may consider any relevant evidence or information, whether or not it would be otherwise admissible in a court of law.
• The adjudicator shall remain impartial and give each party a fair chance to put its case and to respond to the case put by the other party.
• The adjudicator shall consider any relevant information submitted to or obtained by it, and shall make available to the parties any information to be considered in reaching its decision.
• The adjudicator shall have the widest available discretion to decide on the procedure to be followed in the adjudication.
• The adjudicator having considered the parties submissions may decide in its sole discretion whether or not to convene a hearing, whether or not otherwise to take oral evidence, and whether or not to proceed to determine the dispute on the basis of documents alone.
• The adjudicator shall fix the date and time of any meetings, hearings or inspections as he or she considers appropriate and shall give the parties reasonable advance notice of such matters.
• The adjudicator shall hold any meetings and hearings at the premises of the HKICM as far as practicable. The costs of renting the premises at the HKICM or other premises shall be borne by the parties in equal share.

13. Jurisdiction

• The adjudicator’s jurisdiction is limited to determining —
  • the payment dispute that is referred to adjudication by the Claimant; and
  • any other matters that are of a consequential or ancillary nature necessary to exercise or complete the exercise of the jurisdiction conferred by the above sub-clause.
• The adjudicator has the power to rule on its own jurisdiction and the validity of its appointment.

14. Witnesses

• Before any hearing, the adjudicator may require each party to give notice of the identity and qualifications of witnesses to be called, and to exchange witness statements.
• The adjudicator may allow, refuse or limit the appearance of witnesses at any hearing, whether witnesses of fact or expert witnesses.
• Any witness who gives oral evidence at a hearing may be questioned by each party or their representatives under the control of the adjudicator. The adjudicator may put questions to the witness at any stage.
• Any party may make representations that a witness should attend for oral examination at a hearing, and the adjudicator may so direct.
• If a witness fails to attend as directed, the adjudicator may attach such weight to the written evidence as he or she thinks fit or exclude it altogether.

15. Powers of the Adjudicator

• Notwithstanding any other power granted to the adjudicator by the Rules hereof, its powers shall include the following:
  • To establish the procedures for conducting the adjudication proceedings;
  • To determine the language or languages to be used in the adjudication proceedings;
  • To make use of his or her own specialist knowledge;
  • To set deadlines for the submission, production of documents and provision of information;
  • To extend the deadline for service of an adjudication Response;
  • To request or allow a party to the adjudication to produce any document or provide any information that the adjudicator reasonably requires;
  • To meet and question any party or representative or witness;
  • To make any inspection or site visit, and to carry out or require to be carried out any test or experiment or opening up;
  • To request any further submissions or representations or statements, and at any time to permit any party to amend the aforesaid;
  • To direct the inspection, preservation, storage or interim custody of any property or sample or thing under the control of any party;
  • To direct any party to produce to every other party and to the adjudicator for inspection, and to supply copies of any documents in that party’s possession, custody or control;
  • To appoint, with the consent of the parties to the adjudication, an independent expert to inquire or report on any specific matter;
  • To decide on the proportion of fees and expenses of the adjudicator and any independent expert appointed under the above sub-clause to be paid by the parties to the adjudication;
  • To give directions as to the timetable for the adjudication, or as to any deadlines, or limits as to the length of written documents or oral representations; and
  • Otherwise to issue directions relating to the conduct of the adjudication.
• The parties to the adjudication must comply with any request or direction of the adjudicator made or given in accordance with the above clause. All communications between a party to the adjudication and the adjudicator must be simultaneously copied to the other party.
• The adjudicator may review any decision, opinion, instruction, direction, requirement, notice, certificate, or valuation made under or in connection with the contract, unless such is stated in the contract to be final and conclusive.

16. Parties Represented

• A party to the adjudication may be represented by the representatives (whether legally qualified or not) that the party considers appropriate.

17. Parties to Facilitate Adjudication

• For the proper and expeditious conduct of the adjudication, the parties shall comply with any request or direction made by the adjudicator, and any requirements or obligations stipulated under these Rules.
• If, without showing sufficient cause, any party fails to comply with a request or direction of the adjudicator, or otherwise fails to comply with these Rules, the adjudicator may—
  • decide to disregard all or part of a party’s submissions;
  • continue with the adjudication in the absence of a party or witness or document or evidence;
  • draw such adverse inferences from that failure to comply as the adjudicator feels are justified in the circumstances;
  • decide based on the information properly provided to the adjudicator;
  • attach such weight as the adjudicator thinks fit to any evidence submitted to the adjudicator outside any period he or she may have requested or directed; and
  • make such order as the adjudicator thinks fit.

18. Consolidation and Joinder

• By agreement between the parties and the adjudicator, the adjudicator may adjudicate at the same time on more than one dispute arising under the same contract, or on related disputes under different contracts.
• Any party may at any time ask that additional parties be joined to the adjudication. Such joinder is subject to the agreement of the adjudicator and the current and additional parties. The additional parties shall be bound by these rules, unless otherwise agreed by the adjudicator and the parties.

19. Resignation of Adjudicator

• The adjudicator may give the parties and the HKICM written notice to resign if —
  • the Claimant fails to pay the deposit in accordance with the Payment on Account Clause of the Rules;
  • the adjudicator considers that it is not possible to decide the dispute fairly due to the conflict of interest; or
  • it appears to the adjudicator that the dispute is the same or substantially the same as one which has previously been referred to adjudication with a decision given in that adjudication.
• The authority of an adjudicator is personal and ceases on the adjudicator’s death.
• A resignation takes effect on —
  • the date specified in the notice; or
  • if no date is so specified, it will be the date on which the notice is served on the parties to the adjudication.
• Where, prior to any decision being given, the adjudicator resigns, the Claimant may make a fresh request for adjudication in relation to the same or any dispute.

20. Revoking the Appointment

• The appointment of an adjudicator may be revoked upon the agreement between the parties, at any time on giving written notice to the adjudicator and to the HKICM.
• Should the adjudicator fail to carry out its duties and responsibilities diligently under the Rules， the HKICM shall have the power to revoke the appointment of an adjudicator at any time on giving written notice to the parties and to the adjudicator. Before revoking the appointment, the HKICM shall afford the adjudicator a reasonable opportunity to respond, and shall consider the response accordingly.
• If, for any reason whatsoever, a party objects to the appointment of an adjudicator, or fails to comply with these Rules, that objection or failure shall not otherwise invalidate the appointment or any decision.

21. Termination of Adjudication Proceedings

• By agreement between the parties, the adjudication may be terminated at any time on giving written notice to the adjudicator and to the HKICM.
• An adjudication is terminated if —
  • the Claimant fails to serve an adjudication submission on the adjudicator and the Respondent(s) within the specified time;
  • the Claimant serves a notice of withdrawal;
  • the Respondent pays the claimed amount stated in the Request in full to the Claimant;
  • the payment dispute is settled by agreement in writing between the parties to the adjudication;
  • the payment dispute is determined by arbitration or court proceedings;
  • the adjudicator resigns;
  • the adjudicator becomes unable or unsuitable to act as the adjudicator under the Rules, or the adjudicator becomes ineligible to act as the adjudicator under the Rules;
  • the adjudicator fails to deliver an adjudication decision in accordance with the Rules; or
  • the adjudicator decides that he/she has no jurisdiction to determine the payment dispute.
• The Claimant may at any time withdraw an adjudication by serving a notice of withdrawal in writing on the adjudicator, the Respondent(s) and the HKICM.
• The Claimant who withdraws an adjudication must bear the fees and expenses of the adjudicator and of any independent expert appointed unless the adjudicator orders otherwise.
• The adjudicator shall be entitled to collect reasonable fees and expenses incurred up to the date of the service of notice of termination or the date of settlement if —
  • the adjudicator’s appointment is terminated by withdrawal or revocation and any other reasons provided in the Rules through no fault of its own; or
  • the parties settle the dispute before the making of the adjudicator’s decision.

22. Adjudication Decision

• The Adjudication Decision shall be made in writing, signed and dated by the adjudicator, in which the adjudicator shall determine the following particulars —
  • the issues in dispute set out in the Notice of Adjudication, the Request and Response together with all the amendments made, and both parties’ submissions, together with any other issues which the parties and the adjudicator agree should be within the scope of the adjudication;
  • the adjudicated amount to be paid by one party to another;
  • the interest payable on the adjudicated amount, if such a matter is within the jurisdiction of the adjudicator according to the terms and conditions of the contract;
  • the date on which the adjudicated amount is payable, and the date on or before which the payment of the adjudicated amount must be made;
  • the proportion of the fees and expenses of the adjudicator and of any independent expert appointed under the Rules payable by each party to the adjudication; and
  • the reasoning of the adjudicator for making its decision on the above issues, unless otherwise agreed by the parties.
• The adjudicator shall reach a decision within 55 days from its appointment, or any longer period agreed by the parties.
• The adjudicator shall serve a copy of the adjudication decision on the parties and the HKICM by hand or through the HKICM, if otherwise agree between the adjudicator and the HKICM.
• After the decision being made, the adjudicator may withhold its decision until the HKICM and adjudicator’s fees and expenses have been fully paid or deposited.
• The adjudicator may order that any surplus sums deposited with the HKICM as payment on account of the costs of adjudication be paid out to any party.
• The decision of the adjudicator is binding on the parties as from the date upon which it is made, until the dispute is finally determined by legal proceedings, by arbitration (if provided by the contract or agreed by the parties), or by agreement. The parties may agree to accept the decision of the adjudicator as finally determining the dispute.

23. Interest on Late Payment of Adjudicated Amount

• If a party fails to pay the adjudicated amount before the date specified in the adjudication decision, the other party is entitled to interest on the unpaid amount.
• Such interest is calculated on a simple interest basis at the judgment debt rate prescribed from time to time by the Rules of the High Court (Cap. 4A) from the day immediately after the payment due date, to the day when full payment is made.

24. Corrections and Clarifications

• Within 5 days of the date of the adjudication decision being served on the parties, and upon the request or initiative of the adjudicator, the adjudicator may —
  • correct the decision to remove any clerical or computational or typographical errors or any errors of a similar nature;
  • clarify any ambiguity in his or her decision, or make an additional decision on any issues within the scope of the adjudication but not dealt with in the decision.
• Any request made for the above purposes shall be in writing and served on the adjudicator, with copies to the HKICM and to the other party. Before acting on the request, the adjudicator shall afford the other party an opportunity to respond to the request, reasonable in the circumstances and considering the time limits above, and shall consider any response.
• Any correction or clarification made under the above rules does not affect the validity of the adjudication decision.

25. Cost of Adjudication

• The adjudicator is entitled to his or her fees and expenses, in reasonable amount and reasonably incurred, or any amount agreed by the parties and the adjudicator.
• The parties shall remain jointly and severally liable to pay the adjudicator’s fees and expenses, in the proportions the adjudicator decides as part of the adjudication decision, including whether any party shall pay for a specific expense. Should the proportion not be decided by the adjudication decision, the parties shall be liable equally.
• If a party has already paid the adjudicator fees and expenses which the adjudicator has ordered be paid by the other party, the former shall have the right to recover that amount from the latter as a debt.
• A party is not liable to pay any costs or expenses incurred by the other party as a result of or in relation to the adjudication regardless of whether a party has caused the costs or expenses to be incurred by the other party unnecessarily or for any other reasons.
• Upon the adjudicator’s resignation, or the adjudicator’s failure to reach a decision within the time specified, the adjudicator is not entitled to his or her fees and expenses.
• Where the appointment of an adjudicator is revoked, the adjudicator shall be entitled to his or her fees and expenses unless the revocation was due to the adjudicator’s own fault or misconduct.
• The HKICM shall pay to the adjudicator any fees and expenses deposited by the parties upon receiving a copy of the adjudication decision, and refund to the parties any fees and expenses relating to the adjudication if the adjudicator fails to decide the dispute within the prescribed time limit.

26. Dispute Arising from the Adjudicator’s Fees and Expenses

• Any dispute as to the adjudicator’s entitlement to the adjudicator’s fees and expenses, or the reasonable amount of his or her fees and expenses, shall be determined by the HKICM in its absolute discretion, on the written request of any party or the adjudicator, with copies to the other parties and the adjudicator.
• Before acting on the request, the HKICM shall afford the other parties and the adjudicator a reasonable opportunity to respond to the request, and shall consider any response. The adjudicator shall repay any amount already received but deemed excessive.

27. Exclusion of Liability

• None of the HKICM, HKICM Council, its various Committees, secretariat or other staff, or the adjudicators shall be liable for any act or omission in connection with an adjudication conducted under these Rules, save where the act was done or omitted to be done dishonestly.
• The adjudicator is appointed to determine the payment disputes between the parties, and the adjudicator shall owe no duty of care to any third party whatsoever.

28. Subsequent Arbitration or Litigation

• The adjudicator shall not be appointed as arbitrator in any subsequent arbitration between the parties, except for the parties otherwise agree in writing.
• In the event of any subsequent arbitration or litigation, any information or documents or evidence submitted or obtained during the adjudication, and the decision of the adjudicator, shall be made available as appropriate.
• In the event of any subsequent arbitration or litigation, the decision of the adjudicator shall not prevent the tribunal or court from considering the dispute anew.

29. Miscellaneous

• For the purpose of potential saving in costs and time, the HKICM shall nominate one same adjudicator for a series of adjudications on the same contract. Unless the parties agreed otherwise before the adjudicator is appointed.
• Each application is treated on an individual basis and there may be circumstances where it may not be appropriate to nominate the same adjudicator. These could include but not limited to the following:
  • the availability of the adjudicator;
  • different type of dispute; or
  • other reasons which the HKICM consider making such a nomination inappropriate.
• The HKICM is not obliged to seek representations from the parties concerning possible conflict of interest before appointing an adjudicator.
• The appointment of adjudicator does not constitute any contract between the HKICM and the adjudicator.

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