Read the full judgment text of HCCT 100/2003 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 14 April 2004 before Hon Reyes J.
Construction contracts involving Hyundai Engineering and Vigour Limited under the KCRC 5Ha Site project led to disputes over extensions of time and liquidated damages. The parties entered into a March Agreement whereby they agreed not to pursue arbitration or court action and to negotiate or mediate to resolve differences. The court considered the interpretation and effect of the March Agreement including whether it settled all disputes, whether it revoked arbitration rights, the meaning of 'managing directors of the ultimate shareholder group of the highest level,' and whether it barred court access. The court found the March Agreement did not constitute a full settlement nor revoke arbitration agreements but only temporarily restrained exercising rights. Mr Kim was accepted as the managing director of the highest level. The Agreement postponed litigation but did not oust court jurisdiction permanently. The validity and enforceability of the March Agreement were upheld against public policy and uncertainty challenges; obligations to negotiate and mediate in good faith were enforceable. Vigour was found to have repudiated the Agreement by obstructing mediation; Hyundai accepted repudiation, terminating the Agreement and reviving the right to arbitrate. Estoppel by convention did not apply as the March Agreement was valid. The interim injunction restraining arbitration was discharged. Directions were given for further pleadings and costs were awarded to Hyundai. The judgment clarifies the limits of agreements to forebear from arbitration or litigation pending negotiation and the enforceability of good faith negotiation and mediation clauses. Appeal by Vigour dismissed (CACV128/2004).
Legal issues: Construction and effect of the March Agreement on arbitration rights · Meaning of 'managing directors of the ultimate shareholder group of the highest level' · Effect of the March Agreement on the parties' rights to access courts · Validity and enforceability of the March Agreement against public policy and uncertainty challenges · Whether Vigour repudiated the March Agreement · Effect of repudiation on March Agreement and arbitration rights · Estoppel by convention based on the March Agreement
Outcome: March Agreement does not bar court recourse; arbitration rights under Clause 86 remain; Vigour repudiated March Agreement; repudiation accepted by Hyundai terminates March Agreement releasing Hyundai to pursue arbitration; no estoppel by convention arises; Interim Injunction discharged.
Cited by 4 cases