Read the full judgment text of HCCT 13/2021 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 29 December 2021 before Hon Coleman J.
Arbitration — Construction contracts — Arbitration agreement containing multi-tier dispute resolution clause requiring issue of completion certificate before arbitration — Prematurity of arbitration referral for lack of completion certificate — Whether challenge to arbitrator’s jurisdiction or admissibility of claim — Competence-competence doctrine — Whether arbitrator exceeded jurisdiction by construing arbitration clause — Validity of arbitration clause alleged invalid due to causing limitation defence risk — Distinction between jurisdiction and admissibility in arbitration — Court’s limited review powers of admissibility challenges — Effect of limitation defence on arbitration validity — Arbitration Ordinance (Cap 609) s.81 and s.34 — UNCITRAL Model Law Article 34. In this case, a construction subcontract contained Clause 31 providing that disputes could only be referred to arbitration after the issue of the last completion certificate under the main contract. The Plaintiff sought arbitration prematurely without such certificate, which the Defendant challenged. The arbitrator ruled he lacked jurisdiction due to prematurity. The Plaintiff applied to set aside part of the award and commenced court action, while the Defendant applied to stay court proceedings. The Court held that the prematurity challenge related to admissibility rather than true jurisdiction; the arbitrator’s decision on admissibility was final and not reviewable. The court rejected invalidity of Clause 31 on the basis of risk of limitation defence, reaffirming established authorities that limitation goes to admissibility, not to invalidity of arbitration agreements. The arbitrator was properly empowered to construe Clause 31 when deciding the preliminary challenge. The Court dismissed the Set Aside Application but granted the Stay Application in favour of arbitration, awarding costs to the Defendant on a party and party basis due to the novel admissibility/jurisdiction issue affirmed only after the applications were made.
Legal issues: Admissibility or Jurisdiction · Validity of Clause 31 and limitation defence · Scope of parties’ submission to arbitration and competence-competence doctrine
Outcome: The Plaintiff’s Set Aside Application is dismissed; the Defendant’s Stay Application is granted.
Cites 4 cases