CHINA MERCHANTS HEAVY INDUSTRY CO., LTD (formerly known as Yiu Lian Engineering & Heavy Industry Limited) (Plaintiff) v JGC CORPORATION (a company incorporated under the laws of Japan) (Defendant)

Read the full judgment text of HCCT 5/2000 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 12 December 2000 before Hon Burrell J in Chambers.

Construction and arbitration – Contractual arbitration clause under building contract – Clause 12 provided unilateral right for defendant to issue binding decision letter on disputes pending completion and limited plaintiff’s right to arbitrate disputes if notified in writing within 15 days – Defendant issued letters in March and June 1999 constituting decision letters under clause 12 – Plaintiff failed to notify arbitration within 15 days and commenced writ action instead – Court held plaintiff remained bound by defendant’s decision letter and clause 12 arbitration clause was valid and enforceable – Stay of writ proceedings ordered pending arbitration in Tokyo under Hong Kong law – Alternative application to set aside writ refused as mere procedural technicality without prejudice to plaintiff’s rights – Costs ordered against defendant. The plaintiff’s subsequent appeal was dismissed by the Court of Appeal under CACV112/2001 dated 4 July 2001.

Legal issues: Effect of failure to comply with 15-day period in arbitration clause · Whether letters of 29 March 1999 and 10 June 1999 constitute a decision letter under clause 12

Outcome: The court granted a stay of the plaintiff's writ action pending arbitration in Tokyo under clause 12 of the contract.