Read the full judgment text of HCCT000014/2001 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 19 September 2001 before Hon Burrell J.
Arbitration — Construction contract — Subcontractor payment dispute — 'Pay when paid' clause 11(b) — Application of general law of appropriation — Whether main contractor may appropriate payments under architect's certificates among subcontractors — Arbitrator's discretion and certification process preclude general law of appropriation applying — 'Pay when paid' interpreted consistently with Hong Kong case law — Delay and liquidated damages certified and deducted by employer — Arbitrator’s allocation of liquidated damages and payments among certificates upheld — Leave to appeal granted sparingly under P.T. Dover principles — Builders Federal’s application for leave to appeal held out of time as it attempted to appeal original award beyond statutory limitation — Costs awarded accordingly. Parties Shun Shing Construction & Engineering Co. Ltd and Builders Federal (HK) Ltd arbitrated over withheld payments following delay in completion. Arbitrator Nigel Aiken, SC issued final award and later clarification of payment application under clause 11(b). Shun Shing argued for application of general appropriation law, opposed by arbitrator and court. Court found arbitrator's approach both reasonable and proper application of contract and law. Leave to appeal granted only in exceptional cases; no very strong prima facie error found. Builders Federal’s attempt to increase award beyond arbitrator’s clarified sum refused as out of time. Costs awarded in split manner.
Legal issues: Whether general law of appropriation applies to main contractor's receipt of payment · Whether Shun Shing could set off $4,000,000 under Clause 8(a) against sums not yet due to Builders Federal under clause 11(b) · Whether Builders Federal’s cross application for leave to appeal was out of time
Outcome: Shun Shing's application for leave to appeal was refused; Builders Federal’s cross application was refused on grounds of being out of time. The arbitrator’s clarification and approach were upheld.
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