Read the full judgment text of HCCT000038/1994 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 9 June 1995 before The Hon. Mr. Justice Leonard.
Contract — Construction and Engineering — Dispute Resolution Clause — Staying Proceedings — Arbitration and Mediation — Banking Undertaking — Contract Repudiation — Stay granted to enforce contractual dispute resolution mechanism. The parties entered a construction contract in 1993 with an incorporated banker's undertaking securing performance. In August 1994, the Employer certified the Contractor’s failure to proceed with due diligence and re-entered the site, expelling the Contractor under clause 65. The Contractor disputed repudiation and issued a Notice of Dispute under clause 66, proposing to bypass mediation and proceed directly to arbitration, but then issued writ proceedings concerning alleged repudiation and the banker's undertaking. The Employer applied for a stay to enforce the agreed dispute resolution process. The court held that the contractual dispute resolution procedure must be honoured to avoid parallel proceedings and multiplicity of litigation, exercising inherent jurisdiction to stay the legal action. Reference was made to Channel Tunnel Group Ltd v. Balfour Beatty Construction Ltd affirming enforcement of agreed dispute resolution clauses. The court recommended that all contractual disputes proceed to mediation and arbitration before litigation. Costs of the stay application were ordered to be taxed if not agreed. The case clarifies the court’s approach to stays in respect of dispute resolution clauses in construction contracts involving complex contractual arrangements including third-party bank undertakings.
Legal issues: Whether to grant stay of proceedings in favour of contractual dispute resolution procedure
Outcome: Proceedings stayed to allow contractual dispute resolution procedure of mediation and arbitration to proceed.
Cited by 1 case