Read the full judgment text of CAMP 222/2020 on BabelCite. This 高等法院上訴法庭 judgment was delivered on 7 July 2021 before Hon Kwan VP and G Lam JA in Chambers.
Arbitration — Appeal on questions of law — Arbitration Ordinance (Cap 609) Schedule 2 — Leave to appeal — Scope and threshold — Strict and limited grounds for appeal to be questions of law only — distinction between facts and law — Interpretation of construction subcontracts — Rock socket length measurement and payment — Extra over rates and valuation items — Application of leading contractual interpretation principles — Necessity of clear questions of law properly before arbitrator and court — Court’s high threshold for disturbing arbitral awards on questions of law — Application refused. K. H. Foundations Ltd engaged Sze Fung Engineering Ltd as foundations subcontractor for two residential projects under subcontracts A to E. Disputes on payment arose including whether payment for rock sockets should be based on minimum lengths in drawings or actual drilled lengths, and valuation of various piling works under different Schedule of Rates items. The sole arbitrator found in favour of SF on liability, interpreting the contracts to permit payment based on actual founding level and on specific SOR items. KH applied for leave to appeal on questions of law which were refused at first instance and again at appeal. This court carefully reviewed statutory framework for appeals under Arbitration Ordinance (Cap 609) schedule 2, reaffirming the strict criteria and the insufficient nature of KH’s questions posed. The court analysed four key questions raised concerning (1) scope of arbitrator's powers regarding pleadings and arbitration rules, (2) entitlement to over‑drilling payment, (3) valuation disputes and (4) interpretation of “extra over” SOR items. It concluded none raised sufficient legal importance or error of law on which leave to appeal could be granted. Costs were reduced from the amount claimed by SF but ordered on an indemnity basis. The case illustrates the strict confines and judicial deference accorded to arbitral awards on legal questions under the current legal regime in Hong Kong.
Legal issues: Scope of appeal on questions of law under Arbitration Ordinance · Proper construction of re-measurement subcontracts regarding rock socket length entitlement · Valuation of additional temporary piles (SP1-34 and KP1-84) under subcontracts · Correct contractual interpretation of ‘extra over’ items in subcontracts
Outcome: KH’s application for leave to appeal against the Refusal Decision dismissed with costs on indemnity basis
Cites 3 cases