Read the full judgment text of HCCT 7/2005 on BabelCite. This HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE judgment was delivered on 8 July 2005 before Hon A Cheung J.
Arbitration — Costs — Calderbank offers — Payment into court — Relevance of Calderbank offers in arbitration costs when payment into court is available — Order 73, rules 11 to 18 — Whether arbitrator may take into account Calderbank letters in costs assessment — Finality of arbitrator’s award on costs and functus officio — Jurisdiction of court to remit an award under section 23(2) and 24 of Arbitration Ordinance — Procedural mishap and natural justice — Unilateral procedural mistake by one party — Appeal for leave granted and appeal allowed with remission to arbitrator. The dispute concerns costs awards from arbitration between Chinney Construction Company Limited and Po Kwong Marble Factory Limited. The arbitrator awarded costs and taxed them. Chinney made four Calderbank offers to settle costs, all rejected. The arbitrator refused to consider Calderbank letters post-taxation, claiming functus officio. The Court considered whether Calderbank offers may be taken into account in arbitration costs when payment into court procedures exist, concluding no express statutory prohibition exists under Order 73, rules 11 to 18, unlike civil litigation rules. The court held costs are discretionary and Calderbank offers may be relevant depending on facts. The court further addressed finality of arbitrator’s award and held that the court has jurisdiction to remit an award for reconsideration due to procedural mishap resulting in possible injustice, citing English authorities Harrison v. Thompson and King v. Thomas McKenna. Chinney’s failure to request reservation on costs was a unilateral procedural mistake justifying remission. The court granted leave to appeal under section 23(2), recognized the serious legal issues, and remitted the costs decision to the arbitrator for reconsideration. Chinney must pay Po Kwong’s costs of this appeal. This judgment clarifies the application of Calderbank offers and procedural fairness in arbitration costs assessment and the court’s power to remit awards resulting from procedural errors.
Legal issues: Whether the arbitrator may take into account Calderbank offers in considering costs where payment into court can be made · Whether the arbitrator's award on costs is final and cannot be re-opened by the arbitrator or court · Leave to appeal under section 23(2) of the Arbitration Ordinance
Outcome: Leave to appeal granted; appeal allowed; the award and decision on costs of the taxation exercise remitted to the arbitrator for reconsideration.
Cited by 1 case