Read the full judgment text of CACV 90/1995 on BabelCite. This Court of Appeal judgment was delivered on 7 July 1995 before Litton, V.-P., Liu, J.A. and Keith, J..
Arbitration – UNCITRAL Model Law – Article 11(3) and 11(5) – Arbitration Ordinance (Cap 341), 5th Schedule – appointment of arbitrator – whether Article 11(3) engaged where parties dispute existence of arbitration – two contracts dated 21 December 1993 for sale of television sets and micro-wave ovens containing arbitration clauses – plaintiff sought appointment of arbitrator – defendants contended first contract rescinded and 2nd defendant not party to second contract – Leonard J appointed arbitrator and ordered indemnity costs – defendants appealed – held that Article 11(3) is only engaged where the failure to agree the appointment of an arbitrator is because the parties have not agreed on a procedure for his appointment – it is not engaged where the failure is because the parties do not agree that there should be an arbitration at all, or that the arbitration should involve a particular party – therefore Article 11(5) did not exclude jurisdiction of the Court of Appeal – applying Salter Rex & Co. v. Ghosh [1971] 2 QB 597, the order was final and the notice of appeal was in time – on the substance, the judge was correct to form only a prima facie view on the existence and parties to the arbitration agreement, leaving the arbitrator to determine jurisdiction under Article 16(1) – unusual subsequent agreement relied on by defendants to show rescission of first contract was not self-evidently effective, and there was some evidence of agency supporting inclusion of the 2nd defendant in the second – indemnity costs order set aside and party-and-party costs substituted; appeal otherwise dismissed – Safond Shipping [1993] No. MP 2635 distinguished as exceptional case involving overseas service and 'thundering silence'.
Legal issues: Engagement of Article 11(3) of the UNCITRAL Model Law where parties dispute the existence of arbitration · Whether the judge's order was final or interlocutory for appeal time limits · Whether the Court of Appeal has jurisdiction to hear the appeal · Whether Leonard J erred in finding a prima facie case for appointing an arbitrator over Contract No. 1034HK · Whether the 2nd defendant should be made a party to the arbitration over Contract No. 1035HK · Whether the order for indemnity costs against the 1st defendant was appropriate
Outcome: Appeal dismissed save that the order for indemnity costs against the 1st defendant was set aside and substituted with an order for party-and-party costs.