Otis Elevator Co (HK) Ltd v. Chun Wo Building Construction Ltd
Read the full judgment text of HCCT 9/2001 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 6 June 2001 before Hon Burrell J.
Arbitration — Stay of proceedings — Valid arbitration clause — Mandatory stay under Arbitration Ordinance s.6(1) and UNCITRAL model law Art 8 — Existence of dispute — Absence of unequivocal admission of liability and quantum — No discretion for refusal — Summary judgment application — Costs — Indemnity costs refused — Enhanced costs order awarded on common fund basis — The defendant applied for a stay of proceedings in favour of arbitration based on a valid arbitration clause. The plaintiff sought summary judgment. The court held that a mandatory stay must be granted if a dispute exists and the arbitration clause is valid. Since there was no unequivocal admission of liability and quantum, a dispute existed. The stay was granted, summary judgment dismissed. Indemnity costs were refused as the plaintiff's conduct was not vexatious or malicious, but an enhanced costs order on a common fund basis was awarded given the clarity of the law and prior notice. Orders made accordingly.
Legal issues: Stay of proceedings in favour of arbitration · Costs order following stay application
Outcome: Stay of proceedings granted in favour of arbitration; plaintiff's summary judgment application dismissed; defendant awarded costs on a common fund basis.
Cited by 1 case
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HCCT000009/2001
IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTRUCTION AND ARBITRATION PROCEEDINGS NO. 9 OF 2001 -----------------
----------------- Coram: Hon Burrell J in Chambers Date of Hearing: 6 June 2001 Date of Decision: 6 June 2001 ----------------- DECISION ----------------- 1.This is an application by the defence for a stay of proceedings in favour of arbitration dated 28 February 2001. The plaintiff filed a later summons, date 8 March 2001, seeking summary judgment pursuant to Order 14. The stay application must be heard first. The test for a stay in favour of arbitration is different from an Order 14 test. If a stay is granted, the Order 14 summons would automatically fall away. If the stay is refused on the basis that there is no dispute between the a parties, in normal circumstances summary judgment would follow the event. 2.The law on a stay application is clear. Section 6(1) of the Arbitration Ordinance in Hong Kong and Article 8 of the UNCITRAL model law provide for a mandatory stay where the agreement contains a valid arbitration clause. If there is a dispute it must be arbitrated. A dispute exists unless the defence have admitted liability and quantum. In this case, Mr Liu, for the plaintiff concedes that he cannot submit that the defendant has made such admissions. There is no unequivocal admission of liability and quantum, thus there is a dispute and the defendant relies on the arbitration clause. The plaintiff does not contend either that the arbitration clause is null and void, inoperative or incapable of being performed. The court has no discretion in these circumstances. 3.For these reasons, I grant the defendant's application for a stay and dismiss the plaintiff's application for summary judgment. 4.The defendant has asked for indemnity costs. I do not consider the plaintiff's stance in this matter to be have been vexatious or scandalous or malicious or an affront, which would be grounds for awarding indemnity costs. Neither do I think there are other reasons for awarding indemnity costs. However, I think the costs order in this case should reflect the fact that the law on this issue was clear and the result was as close to inevitable as one can get. The plaintiff was put on notice of the defence's intention to seek such a costs order by letter. I am persuaded therefore that in such circumstances it is appropriate to award costs on a slightly higher level than the normal costs order. The defence shall have its costs on the common fund basis to be taxed if not agreed.
Representation: Mr Michael K.W. Liu instructed by Messrs Wilkinson & Grist, for the Plaintiff. Mr Russell Coleman, instructed by Messrs Lovells, for the Defendant |
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