Shui on Construction Company Limited v. Moon Yik Company Limited and Another

HCMP002114/1985

1985, No. MP 2114

Consolidation of Arbitrations - Section 6B of the Arbitration Ordinance Cap. 341 - Regulatory orders - Liberty to apply.

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HEAD - NOTE

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On an application under Section 6B of the Arbitration Ordinance, Cap. 341, the Court has jurisdiction to make only any of the four regulatory orders specified in the section, namely :

(i)     that the arbitration proceedings be consolidated; or

(ii)    that they be heard together at the same time; or

(iii)   that they be heard one immediately after another; or

(iv)   that one of them be stayed until the determination of any other of them.

When making one of those orders, the Court lacks jurisdiction to include a provision for liberty to apply.

By analogy with applications under 0.4, r.10 of the Rules of the Supreme Court (on which Section 6B of the Arbitration Ordinance is obviously based), applications for orders under Section 6B should be made as early as practicable, and there is no need to wait till the close of pleadings.

1985, No. MP2114

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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IN THE MATTER OF THE ARBITRATION ORDINANCE CAP. 341

and

IN THE MATTER OF AN ARBITRATION

BETWEEN

AND BETWEEN

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Coram: Hon. Rhind, J.

Dates of hearing: 28th July 1986 - 30th July 1986

Date of delivery of judgment in open-court: 12th September 1986

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JUDGMENT

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1. This is an application by Shui On Construction Company Limited ("the Main Contractor") for an order under S. 6B of the Arbitration Ordinance, Cap. 341. The marginal note of S. 6B describes it as being concerned with the "Consolidation of arbitrations". I will now set out the text of S. 6B:-

"    (1)      Where in relation to two or more arbitration proceedings it appears to the Court -

the Court may order those arbitration proceedings to be consolidated on such terms as it thinks just or may order them to be heard at the same time, or one immediately after another, or may order any of them to be stayed until after the determination of any other of them.

(2)     Where the Court orders arbitration proceedings to be consolidated under subsection (1) and all parties to the consolidated arbitration proceedings are in agreement as to the choice of arbitrator or umpire for those proceedings the same shall be appointed by the Court but if all parties cannot agree the Court shall have power to appoint an arbitrator or umpire for those proceedings. (Added, 10 of 1982, s. 3)

(3)     Where the Court makes an appointment under subsection (2) of an arbitrator or umpire for consolidated arbitration proceedings, any appointment of any other arbitrator or umpire that has been made for any of the arbitration proceedings forming part of the consolidation shall for all purpose cease to have effect on and from the appointment under subsection (2). (Added, 75 of 1985, s. 2)"

2. The Main Contractor entered into a contract ("the Main Contract"), dated 18th September 1981, with Moon Yik Company Limited and Xipho Development Company Limited ("the Employers") for the construction of two thirty-four storey buildings on opposite sides of Harbour Road where it intersects with Fleming Road at the Wanchai reclamation. One of those buildings is the Great Eagle Centre and the other the Harbour Centre. There is a foot-bridge over Harbour Road connecting the two buildings. That Main Contract was in the Standard Form of Building Contract for use in Hong Kong issued under the sanction of the Hong Kong Institute of Architects, The Royal Institution of Chartered Surveyors (Hong Kong Branch). and the Society of Builders, Hong Kong, 1976 Private Edition (May 1979 Revision), with Quantities. The contract sum under that Main Contract was HK$408.6 million.

3. There was a provision in the Main Contract for the Employers to nominate sub-contractors. In all, the Employers nominated twenty-two different sub-contractors. One of the sub-contractors thus nominated was Schindler Lifts (Hong Kong) Limited ("Schindler Lifts''). Schindler Lifts duly entered into a sub-contract ("the Schindler Sub-Contract") with the Main Contractor for the supply and installation of lifts and escalators for the Great Eagle and Harbour Contres at a contract price of HK$29.8 million. This Schindler Sub-Contract was in the Standard Form of Sub-Contract (1968 Edition) issued under the sanction of the Hong Kong Institute of Architects, the Royal Institution of Chartered Surveyors (Hong Kong & China Branch) and the Society of Builders, Hong Kong for use where the sub-contractor is nominated under the Standard Form of Building Contract for Hong Kong.

4. Those standard forms, as employed for the Main Contract and the Schindler Sub-Contract have been, needless to say, drafted with reference to each other, in such a way as to dovetail.

5. Under the Main Contract, the date for completion was shown as the 19th February 1983. That has been extended by the Architect to the 14th March 1983. The completion period under the Schindler Sub-Contract was described in the Appendix to that document as “To suit the Main Contractor's programme of work".

6. According to the Certificate of Practical Completion issued by the Architect pursuant to the Main Contract, practical completion of the works did not take place until the 1st March 1984. On 5th December 1983, the Architect had issued a certificate for the purposes of clause 22 of the Main Contract to the effect that, in his opinion, the works should have been completed by the 14th March 1983. I now set out the text of clause 22, which carries the marginal note "Damages for Non-completion":-

"If the Main Contractor fails to complete the Works by the Date for Completion stated in the appendix to these Conditions or within any extended time fixed under clause 23 or clause 33(1)(c) of these Condition and the Architect certifies in writing that in his opinion the same ought reasonably so to have been completed, then the Main Contractor shall pay or allow to the Employer a sum calculated at the rate stated in the said appendix as Liquidated and Ascertained Damages for the period during which the Works shall so remain or have remained incomplete, and the Employer may deduct such sum from. any movies due or to become due to the Main Contractor under this Contract. "

7. The effect of the Architect issuing a Certificate of Non-completion under clause 22 of the Main Contract was that the Employers became entitled to liquidated damages in respect of the period from the 14th March 1983, which was the completion date (as extended), until the 1st of March 1984 when the Certificate of Practical Completion issued. As the sum for liquidated damages provided under the Main Contract is at least HK$150,000 per day, the amount claimed by the Employers in respect of liquidated damages for the period from 14th of March 1983 to the 1st March 1984 is in the region of HK$50 million.

8. At the time the Architect issued his Certificate of Non-completion on 5th December 1983, there was a sum of approximately $6 million due from the Employers to the Main Contractor in respect of progress payments under the Main Contract. Within that figure of approximately $6 million, there was an amount of approximately $1½ million due from the Main Contractor to Schindler Lifts as the latter's progress payment under the Schindler Sub-Contract. When the Architect (on 20th December 1983) issued an interim certificate for that progress payment of approximately $6 million due to the Main Contractor, the Employers refused to pay the Main Contractor, contending that the sum of approximately $6 million to which the interim certificate related was overtopped by the Employers' claim for liquidated damages which the Employers, at that stage, estimated to be about $25 million. Because of the interaction of clause 22 of the Main Contract and clause 11(b) of the Schindler Sub-Contract, the Main Contractor adopted the attitude that, as it had not been paid by the Employers, it was relieved from having to make any progress payment to Schindler Lifts under the Schindler Sub-Contract. On the one hand, if the Architect was not justified in issuing the clause 22 Certificate of Non-completion, the Employers will have to pay the withheld progress payments to the Main Contractor who, in turn, will have to pay Schindler Lifts its share. On the other hand, if there was justification for what the Architect did then whether the Main Contractor is obliged to pay Schindler Lifts progress payments will depend on whether the Main Contractor or Schindler Lifts was responsible for the delays. The positions of the Main Contractor and Schindler Lifts are thus inextricably linked.

9. I now set out clause 11(b) of the Schindler Sub-Contract:-

10. Thus, by the end of December 1983, a dispute as to payment had arisen between the Employers and the Main Contractor under the Main Contract, and a dispute as to payment had arisen between the Main Contractor and Schindler Lifts under the Schindler Sub-Contract. The Main Contract and the Schindler Sub-Contract each contains its own arbitration clause. No point has been taken about any material difference in those arbitration clauses.

11. Since December 1983, the disputes under the Main Contract and under the Schindler Sub-Contract have both become greatly enlarged. The Main Contractor now complains that, in the end, the Employers withheld over $23 million due under interim payment certificates. The Main Contractor claims, in addition, that the Employers are liable to the Main Contractor for over $50 million in respect of loss and expenses caused by delays in the works for which the Employers were responsible. The Main Contractors have some further relatively minor claims against the Employers, besides those already mentioned. Schindler Lifts' claim under the Schindler Sub-Contract has now grown to over $3 million for outstanding progress payments, plus over $7 million for loss and expense arising from delay for which Schindler Lifts seek to hold the Main Contractor responsible.

12. The Main Contractor served Notice of Arbitration on the Employers relating to the disputes arising under the Main Contract on 28th September 1984. Previously to that, Schindler Lifts had commenced proceedings by way of writ against the Main Contractor, claiming the progress payments under the Schindler Sub-Contract as monies due. In the face of objection from the Main Contractor, that litigation was stayed by the Court of Appeal on the 21st December 1984 in favour of arbitration. After that, Schindler Lifts pursued its claim against the Main Contractor by serving a Notice of Arbitration on 13th August 1985.

13. From the outset, the Main Contractor wanted the arbitration between itself and the Employers ("the Main Arbitration") to be consolidated with the arbitration between itself and Schindler Lifts ("the Schindler Arbitration"). Although the Employers had no objections to such a course, Schindler Lifts opposed it, taking the attitude that the two arbitrations were separate and unconnected.

14. On the 23rd September 1985, Mr Christopher Haffner, an architect, was appointed the arbitrator for each of the two arbitrations. Two days after that, the Main Contractor moved the Court for one of the regulatory orders covered by S. 6B of the Arbitration Ordinance, which I set out in the opening paragraph of this judgment. The Main Contractor's Motion was "for an order pursuant to section 6B(1) of the Arbitration Ordinance that :-

"these arbitration proceedings be consolidated on such terms as the Court thinks just or that they be heard at the same time, or that the Schindler Arbitration be heard immediately after the Main Arbitration, or that the . former arbitration proceedings be stayed until after determination of the latter arbitration proceedings. "

The grounds set forth in the Notice of Motion were :-

15. The Main Contractor's Motion was supported by an affidavit, made by Catherine Michelle Blunt and filed on 13th September 1985, giving reasons in support of the application. When the matter first came before the Court on the 25th September 1985, the judge adjourned the hearing until the 20th November 1985 to enable Schindler Lifts and the Employers to file affidavits in view of Schindler Lifts' opposition.

16. Although the Main Contractor wanted the arbitrator to postpone giving Directions in either of the arbitrations until after the outcome of the Court hearing on the 20th November, 1985, Schindler Lifts insisted that the arbitrator embark on his reference in the Schindler Arbitration straight away. Because of that insistence by Schindler Lifts, the arbitrator had no choice other than to treat the Schindler Arbitration as quite separate from the Main Arbitration (see Oxford Shipping Co. Ltd v. Nippon Yuen Kaisha "The Eastern Saga"⁽¹⁾), and gave Directions on the 5th November 1985 in the Schindler Arbitration.

17. When the Main Contractor's Motion under S. 6B of the Arbitration Ordinance came on again before the Court on the 20th November 1985, the judge took the view that it was too early at that stage to make one of the regulatory orders sought by the Main Contractor, because the issues in the two arbitrations had not yet been sufficiently identified. He, therefore, adjourned the Motion sine die with liberty to restore. After that, the arbitrator continued to deal with the two arbitrations quite separately, without reference to each other. His approach is encapsulated in his letter, dated 3rd December 1985, to all of the parties interested in the two arbitrations, where he said "It is apparent that matters concerning one of these disputes must not be touched upon with me at a meeting to consider the other, except when it is directly relevant".

18. The Schindler Arbitration, which is a relatively light affair compared with the Main Arbitration, has moved along at a reasonable pace. Points of Claim were served by Schindler Lifts on the 20th January 1986; Points of Defence and Counterclaim were served by the Main Contractor on the 1st May 1986; Points of Reply and Defence to the Counterclaim were served on 29th May 1986. The pleadings in the Schindler Arbitration are either completed, or close to being completed, I am not sure whether all the Further and Better Particulars have been furnished yet, but I gather they have certainly reached an advanced stage.

19. Meanwhile, in the Main Arbitration, the pleadings have only reached the stage of the Main Contractor serving its Points of Claim on the Employers on the 1st July 1986. Why the Main Contractor has taken so. long to reach this stage is not, I am satisfied, because of any foot-dragging on its part, but is attributable to the fact that the Main Arbitration is so heavy and complex. It features claims on behalf of the twenty-two sub-contractors including Schindler Lifts. I am satisfied, too, that the Main Contractor's progress on the Main Arbitration has been hampered by having to divert resources to keep abreast with the time-table laid down by the Directions in the Schindler Arbitration. Instead of being able to deploy its resources to the best effect by bringing along the Main Arbitration and the Schindler Arbitration in a co-ordinated way, the Main Contractor has been forced to give priority to the Schindler Arbitration so as to meet the exigencies of the time-table imposed in the Schindler Arbitration without reference to the needs of the Main Arbitration. Fighting uncoordinated battles on separate fronts is not conducive to the most economical disposal of resources.

20. Now that the pleadings have been closed, or almost closed, in the Schindler Arbitration, and the Points of Claim served in the Main Arbitration, the Main Contractor has restored its Motion for one of the regulatory orders it seeks under S. 6B of the Arbitration Ordinance, in the hope that the stage has already been reached where the issues in the two arbitrations are sufficiently well defined for the Court to reach a decision.

21. First choice by the Main Contractor would be for an order to have the two arbitrations heard at the same time. If the Court is not agreeable to that course, then the Main Contractor's second choice would be for the arbitration s to be formally consolidated. The problem with an order for a formal consolidation is that the parties then have to go through the wearisome process of amending all the pleadings so far filed.

22. The Main Contractor no longer seeks an order for having the Schindler Arbitration heard after the Main Arbitration or for staying the Schindler Arbitration until after the disposal of the Main Arbitration, because such orders give rise to the spectre of inconsistent verdicts, as well as involving duplication of effort and unnecessary expense.

23. Schindler Lifts concede that common questions of law and fact arise in the two arbitrations and that the rights to relief claimed in the two arbitrations arise out of the same transaction, namely, the project to develop the Great Eagle and Harbour Centres. It was further conceded on behalf of Schindler Lifts that it would be desirable to have an order from the Court which would eliminate the possibility of inconsistent verdicts on the common questions in the two arbitrations. However, Schindler Lifts would not agree to the order sought by the Main Contractor to have the two arbitrations heard at the same time, nor to an order for consolidation. Schindler Lifts submitted that such orders might limit the arbitrator's flexibility, in effect, putting him into what Schindler Lifts described as "a strait-jacket". According to Schindler Lifts, the arbitrator might feel that in the face of such orders from the Court, he must insist on all the parties being present before him all the time for the trial of all issues, regardless of whether some issues might be of relevance only in the Main Arbitration and others only in the Schindler Arbitration. The view was further expressed on behalf of Schindler Lifts that the arbitrator might feel inhibited from segregating preliminary issues which might shorten one or other of the arbitrations. Examples of such preliminary issues were whether Schindler Lifts' rights against the Main Contractor were governed by the provisions of a document described as "The Schedule of Obligations by Customer", rather than the terms of the Schindler Sub-Contract, or whether Schindler Lifts had agreed to release its claim against the Main Contractor in exchange for a payment of $100,000. In this context, it was pointed out on behalf of Schindler Lifts that as the pleadings had not yet been completed in both arbitrations, it was not possible to tell whether the common questions of law and fact bore sufficient importance in proportion to the rest of the matters in dispute to render it desirable that the whole of the matters should be disposed of at the same time. Daws v. the Daily Sketch and Daily Graphic Ltd ⁽²⁾ was prayed in aid for this line of argument.

24. To ensure that the arbitrator retained his procedural flexibility, Schindler Lifts proposed that, instead of making the order sought by the Main Contractor, the Court should make an order in the following terms: -

Liberty to all parties to apply. "

25. While not opposing the order sought by the Main Contractor, the Employers expressed the opinion to the Court that the order proposed by Schindler Lifts might have advantages on account of the apparent flexibility it conferred on the arbitrator for the purpose of regulating procedure in the two arbitrations.

26. Mr Dicks, on behalf of the Main Contractor, objected to the order proposed by Schindler Lifts on the ground that the Court lacked jurisdiction to make such an order, the Court's jurisdiction being confined to making one of the four orders specified in S. 6B of the Arbitration Ordinance, namely, either :-

27. Clearly, S. 6B of the Arbitration Ordinance owes its parentage to 0. 4,r. 10 of the Rules of the Supreme Court, which is as follows :-

"                                                           ORDER 4

CONSOLIDATION, ETC., OF CAUSES OR MATTERS

Consolidation, etc. of causes or matters

10.     Where two or more causes or matters are pending, then, if it appears to the Court –

the Court may order those causes or matters to be consolidated on such terms as it thinks just or may order them to be tried at the same time, or one immediately after another, or may order any of them to be stayed until after the determination of any other of them. "

28. Although a Master or a Judge giving directions under 0. 4, r. 10 could, no doubt, make an order in litigation such as the one now sought by Schindler Lifts, I do not think the Court enjoys the jurisdiction to make such an order to regulate arbitration proceedings. Under 0. 4, r. 10, the Court can always fall back on its inherent jurisdiction for the purpose of regulating the procedure in litigation. However, the Court lacks inherent jurisdiction in relation to arbitration proceedings. Where the parties have chosen an. arbitration forum, the parties have removed their dispute from the jurisdiction of the Court. In such circumstances, the Court can only claim such jurisdiction as has been expressly conferred on it by the legislature. The extent of the jurisdiction conferred on the Court for present purposes is clearly set out in S. 6B of the Arbitration Ordinance. The Court cannot, and should not, stray beyond the four corners of the Jurisdiction limited by S.6 B. I, therefore, hold that it is beyond the powers of the Court to grant the order suggested by Schindler Lifts.

29. If I am right in my conclusion that the Court lacks the power to make an order of the type requested by Schindler Lifts, the question still remains whether the Court should make one of the regulatory orders sought by the Main Contractor under S. 6B of the Arbitration Ordinance.

30. That the pleadings have not been closed in the two arbitrations is by no means a fatal objection to an order under S. 6B. In the same way that, in litigation, the pleadings do not need to be closed in the two actions for an order under 0.4, r.10, they need not be closed in the two arbitrations for an order under S. 6B of the Arbitration Ordinance, so long as the Court is sufficiently apprised of the issues which are likely to arise. Pleadings are not the only way of identifying issues: they caN also be sufficiently identified by affidavit or by oral explanation to the Court. Under 0.4, r. 10, the normal practice is to apply for consolidation of actions at a stage well before the close of pleadings. Such an application should ideally be made at the earliest convenient moment: in that way, unnecessary expense and effort can be saved from the outset, even on pleadings. Sometimes, depending on the nature of the actions and the vagaries of litigation, the application is not made till after the close of pleadings. Daws v. The Daily Sketch and Daily Graphic Ltd ⁽²⁾ was such a case. That case is not, however, any authority for the proposition that applications for consolidation should not be made till after the close of pleadings.

31. Even without the benefit of the Employers' Points of Defence and Counterclaim in the Main Arbitration, it is already clear that the overriding issue in the Main Arbitration is going to be: Who was responsible for the delays on this Great Eagle and Harbour Centre Project? That is also the all-important question in the Schindler Arbitration. The answer to that question will determine whether it is the Employers who are liable to the Main Contractor for damages in respect of that delay, or vice versa, and whether the Main Contractor is liable to Schindler Lifts for damages in respect of delay, or vice versa.

32. The very fact that the Employers chose to discontinue making progress payments as soon as the Architect issued his Certificate of Non-completion pursuant to clause 22 of the Main Contract serves to foreshadow that the Employers have a major complaint against the Main Contractor in respect of delays. That issue is further identified in the letter from the solicitors for the Employers to the President of the Hong Kong Institute of Architects, dated 14th August 1985.

33. Besides the general question, common to both arbitrations, of who bears responsibility for the delay, I have already touched upon another issue common to both arbitrations, namely the validity of the Architect's Certificate of Non-completion. As I described earlier in this judgment, a consequence flowing from a finding that the Certificate of Non-completion was invalidly issued means that the Main Contractor becomes entitled to receive the withheld progress payments, and Schindler Lifts in its turn, becomes entitled to its share by virtue of Clause 11(b) of the Schindler Sub-Contract.

34. Numerous other issues of fact and law common to both the Main Arbitration and the Schindler Arbitration were highlighted for me by Mr Dicks when taking me through the relevant parts of the pleadings and the Main Contract together with the Schindler Sub-Contract. I do not propose listing those common issues in view of the concessions made by Mr Wong. Suffice it refer only to the indemnities raised by the Main Contractor in its pleadings. On the one hand, it wants to be indemnified by Schindler Lifts for any loss attributable to Schindler Lifts delays if there is a finding in the Main Arbitration in favour of the Employers against the Main Contractor. On the other hand, the Main Contractor seeks to be indemnified by the Employers for any loss attributable to the Employers' delays if there is a finding in the Schindler Arbitration in favour of Schindler Lifts against the Main Contractor. Those interlocking claims for indemnities in the two arbitrations would by themselves sufficiently justify a regulatory order under S.6B of the Arbitration Ordinance, in my view.

35. There is no point in deferring the Main Contractor's application any longer. Clearly, the prospect of two separate arbitrations, even before the same arbitrator, is intolerable, because of the possibility of inconsistent decisions. The witnesses on the common matters of fact might not give their evidence the same each time, and the submissions on the law might not be the same for the common points in the arbitrations. Hence, inconsistent verdicts might occur. How the courts recoil from the prospect of inconsistent findings in situations involving common issues is illustrated by a wealth of authority, including Halifax Overseas Freighters Ltd v. Rasno Export (The "Pine Hill") ⁽³⁾; Taunton-Collins v. Cromie ⁽⁴⁾; Erkowit (Owners) & Others v. Salus (Owners) & Others (The "Eschersheim")⁽⁵⁾; Berkshire Senior Citizens Honsing Association v. McCarthy E. Fitt Ltd and National Westminster Bank Ltd.⁽⁶⁾; Aratra Potato Co. Ltd v. Egyptian Navigation Co. (The "El Amria")⁽⁷⁾; and Abu Dhabi Gas Liquefaction Co. Ltd v. Eastern Bechtel Corporation and Chiyoda Chemical Engineering & Construction Co. Ltd.⁽⁸⁾ There is also the point that the claimant in the arbitration heard second might feel that the arbitrator had already pre-judged the issues in the first arbitration without the claimant in the second arbitration having had any opportunity to influence him. That was a risk deplored in Abu Dhabi Gas Liquefaction Co. Ltd v. Eastern Bechtel Corporation etc.⁽⁸⁾, where Lord Denning M.R. pointed out :-

"The sub-contractors, for instance might say that the arbitrator's decision in the first arbitration might affect his decision in the second arbitration. If he had already formed his view in the first arbitration, they would be prejudiced. It would be most unfair to them: because he would be inclined to hold the same view in the second arbitration. "

and :-

"On the other hand, it is equally desirable that it should be done so that neither party should feel that any issue has been decided against them beforehand: or without their having an opportunity of being heard in the case. "

36. Of the four possible regulatory orders specified in S. 6B of the Arbitration Ordinance, those I numbered (iii) and (iv) when I set them out earlier in this judgment are clearly unsuitable for the present arbitrations. Regulatory orders (iii) and (iv) relate to a situation where one arbitration will be heard after the other, or one will be stayed till the other has been disposed of. That pair of regulatory orders suffers from the same defect as when an arbitrator, of his own volition, hears one arbitration after the other, namely, the risk of inconsistent verdicts, and the sense of injustice likely to be experienced by the claimant in the second arbitration who does not get an opportunity to be heard on the common issues before the arbitrator makes up his mind in the first arbitration. The risk of witnesses not giving their evidence the same in both arbitrations must be very real in the present instance because, if the two arbitrations were to be heard separately, there would inevitably be a long time gap - a matter of months - between the two hearings, since both of the arbitrations are of such magnitude.

37. As regulatory orders of types (iii) and (iv) are inappropriate for the present arbitrations, regulatory orders of types (i) and (ii) become the only possibilities by a process of elimination. Regulatory orders types (i) and (ii), it will be remembered, are formal consolidation, and hearing the arbitrations at the same time, respectively.

38. Besides being inherently tiresome because of all the amendments which have to be made where the pleadings have reached an advanced stage, formal consolidation does not impress me as a viable alternative when, as here, one party, namely the Main Contractor, is claimant in one set of arbitral proceedings, yet respondent in another. A party being both a claimant and a respondent is simply incompatible with formal consolidation. .

39. The only practical possibility in the present circumstances is for a regulatory order of type (ii), namely, that the two arbitrations should be heard at the same time in one set of arbitral proceedings. Might there be something in Schindler Lifts fears that such an order might unnecessarily curtail the arbitrator's procedural flexibility? I do not think so. Within the limits of that order, the arbitrator will still remain the master of his own procedure. There will be nothing to prevent the arbitrator from segregating the issues in the two arbitrations in such manner as he deems most appropriate, and hearing preliminary issues, if so minded. Only those parties affected by a particular issue will need to be in attendance before the arbitrator. How he conducts the day-to-day running of the trial will be his affair. The only way in which the arbitrator will be constrained by the Court's order is that all parties must be given the opportunity to be present when issues common to both arbitrations are being dealt with. All parties must be given the opportunity to cross-examine the witnesses on common issues of fact and to address the arbitrator on common issues of law. I feel I am labouring the obvious, and will be surprised if any problem arises in practice.

40. It was suggested on behalf of both Schindler Lifts and the Employers that the Court might care to include a provision for liberty to apply in its order. Such a provision was opposed by the Main Contractor. I am satisfied the Court lacks jurisdiction to make an order for liberty to apply. At common law, the Court could not include such a provision (see the Abu Dhabi case) without the consent of the parties, and I do not think the Court has been clothed with such jurisdiction either by S. 6B or any other section of the Arbitration Ordinance. The modern trend in arbitration legislation, generally, has been to reduce the opportunities for parties to arbitration agreements to have resort to the Courts. Where the parties have chosen to include arbitration clauses in their agreements, the implication is they want to keep away from the Courts. S. 6B of the Arbitration Ordinance is, of course, a limited exception, enabling the parties to come to Court, but, in my view, S. 6B should be construed restrictively, so that parties can only make applications to the Court when expressly empowered to do so by that section.

41. As already indicated, the order I make is that the Main Arbitration and the Schindler Arbitration be heard at the same time.

42. This being a reserved judgment delivered in writing pursuant to the provisions of 0. 42, r. 5B, I make an order nisi as to the costs of the Motion. That order is that Schindler Lifts should pay the Main Contractor's and the employers' costs.

(1)    [1984] 2 LL.L. Rep. 373

(2)    [1960] 1 W.L. R. 126

(3)    [1958] 2 Ll. L. R. 146

(4)    [1964] 1 W. L. R. 633

(5)    [1975] 1 W. L. R. 83 and, on appeal, [1976] 1 W. L. R. 339

(6)    15 B.L.R. 27

(7)    [1981] 2 Ll. L. R. 119

(8)    [1982] 2 L1. L. R. 425

Representation:

Mr Anthony Dicks (inst'd by M/s Lovell, White & King) for Shui On Construction Co. Ltd/Applicant

Mr R. Lewington of Denton, Hall, Burgin & Warren for Moon Yik Co. Ltd and Xipho Development Co. Ltd.

Mr Ronny Wong (inst'd by M/s Deacons) for Schindler Lifts (Hong Kong) Ltd.