Weltime Hong Kong Ltd v. Ken for Ward Engineering Ltd
Read the full judgment text of HCCT73/2000 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 6 March 2001 before Hon Burrell J in Chambers.
Construction and Arbitration Proceedings — Arbitration Ordinance (Cap.341) — Model Law Article 16(3) — Jurisdiction of arbitral tribunal — Preliminary ruling on jurisdiction — Right of appeal — Leave to appeal — Procedural abuse — Strike out application. The plaintiff, WELTIME HONG KONG LIMITED, challenged the jurisdiction of two arbitrators hearing arbitration claims involving the defendant, KEN FOR WARD ENGINEERING LTD, by summons seeking declarations of no jurisdiction and subsequently by originating motions for leave to appeal. The defendant filed summons to strike out the declaration summons arguing procedural impropriety. The Court found the arbitrators' rulings on jurisdiction to be preliminary rulings under Article 16(3) of the Model Law as adopted in Hong Kong law, which precludes any right of appeal. Consequently, the plaintiff's summons was procedurally defective and thus struck out as an abuse of process. The Court dismissed the plaintiff's summons for declaration with costs and granted the defendant's strike out summons with costs limited to $3,000. The costs of the leave to appeal summonses were also awarded to the defendant. No appeal rights exist against such preliminary jurisdiction rulings under the Arbitration Ordinance incorporating the Model Law. The orders emphasize the finality of arbitral tribunal jurisdiction rulings and prevent multiplicity of proceedings on the same issue.
Legal issues: Leave to appeal from arbitrator’s jurisdiction ruling · Strike out plaintiff's summons for declaration for lack of jurisdiction
Outcome: Plaintiff's summons for declaration dismissed; defendant’s strike out summons granted with costs; no right of appeal on jurisdiction issue.
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HCCT000108A/2000 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTRUCTION AND ARBITRATION PROCEEDINGS NOS.73, 97 AND 108 OF 2000 -----------------
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----------------- Coram: Hon Burrell J in Chambers Date of Hearing: 2 March 2001 Date of Decision: 6 March 2001 ----------------- DECISION ----------------- There are four matters before the court:- 1. The plaintiff's summons for a declaration that two arbitrators had no jurisdiction to hear arbitrations that they were currently hearing, dated 17 July 2000. 2. The defendant's summons to strike out the above action, dated 5 September 2000. In fact the plaintiff's summons has never been heard because the plaintiff took out, on 1 and 27 September, two originating motions to appeal the same point of the jurisdiction of the arbitrators as was sought in their summons for a declaration (1 above). 3 and 4. The plaintiff's application for leave to appeal this court's decisions on the plaintiff's originating motions for leave to appeal the arbitrators' determination of their own jurisdiction (dated 1 and 27 September above). That hearing was before this court on 27 November 2000 and the decision was handed down on 5 December 2000. These four summonses give rise to two separate issues. I will deal with them in reverse order. 1.Leave to appeal Mr Hingorani, for the defendant, relies on Article 16(3) of the Model Law which provides that :-
Mr Chain, for the plaintiff, submits that the two arbitrators ruling on jurisdiction was an "award" and that the right of appeal under Article 16(3) is only taken away on "a ruling as a preliminary question ...". I reject this submission. A ruling on jurisdiction, by its very nature, is a preliminary ruling which much precede an award on the merits. The fact that it may be titled an "award" or an "interim award" does not mean it ceases to be a preliminary ruling on jurisdiction, which it plainly was. Mr Chain also submits that the basis upon which Article 16(3) has been included in the Hong Kong law, namely by virtue of section 13B of the Arbitration Ordinance, Cap.341 which provides as follows :-
does not alter the provisions in Cap.341 which regulate the parties' right of appeal from arbitration generally, namely section 23 :-
Such leave may only be granted if :-
Mr Chain's argument is that section 13B only gives statutory recognition that the pre-existing rule in international arbitrations also applies on domestic arbitration and does not affect section 23. Again, I do not agree. I find myself unable to turn my back on the clear words of Article 16(3) which is part of the law of Hong Kong. In my judgment, no right of appeal is available to the plaintiff. Had there been a right of appeal, the plaintiff would still have had the task of persuading the court to determine that the case falls within the provisions of section 23(4) above. It is by no means certain that it would have succeeded in doing so. However, in view of my finding that no appeal lies, it is unnecessary for me to address that issue. 2.The declaration and strike out summonses There is no argument that the plaintiff's declaration summons should be dismissed. It was never pursued. The applications for leave to appeal took its place. The issues before the court would have been precisely the same. However, the defendant seeks an order in terms of its strike out summons and costs because, it is submitted, the defendant correctly took the view that the declaration summons was procedurally wrong and should be struck out. It was procedurally wrong because it was taken out before the learned arbitrator had made a determination on the question of jurisdiction. The arbitrator had the right to determine the question of her own jurisdiction and had been invited to do so by the plaintiff (the respondent in the arbitration) in the course of the arbitration. Thus two different tribunals were being asked to determine the same issue which, it is submitted, is an abuse of process. Mr Chain makes the point that the return date fixed for the hearing of striking out summons was in October, after the filing of the two motions for leave to appeal and the ruling by the arbitrator was published on 6 September, the day after the striking out summons was filed. It was therefore plain that the matter would proceed on the basis of the applications for leave to appeal and not on the summons for declarations. Both counsel referred to a wealth of authority on this matter. I am grateful for their assistance. Nonetheless, I consider the orders I should make, bearing in mind :-
are straightforward. They are as follows :-
This order is intended to reflect the fact that counsel had to come to court in any event to argue the main issue of leave to appeal. The pre-court costs of the strike out summons will be little more than the cost of service and filing, and the cost of Mr David Chow's affirmation of 4 September 2000. Finally, the costs of the two summonses seeking leave to appeal shall also be to the defendant.
Representation: Mr Benjamin Chain, instructed by Messrs Sit, Fung, Kwong & Shum, for the Plaintiff Mr Jeevan Hingorani, instructed by Messrs Fung, Wong, Ng & Lam, for the Defendant |
Further hearings and rulings under HCCT73/2000