Read the full judgment text of HCCT11/2005 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 7 October 2005 before Hon Burrell J.
Construction law — Contract formation — Arbitration agreement — Whether binding contract existed with arbitration clause — Letters headed 'subject to contract' — Unresolved terms and ongoing negotiation — Commencement of work as evidence — Back to back contracts. Dickson Construction Company Ltd (“Dickson”) tendered for a project with ASD naming Carrier Hong Kong Limited (“Carrier”) as nominated HVAC subcontractor with an agreed price of $33 million. Carrier disputed that a binding contract containing a written arbitration agreement existed. The arbitrator found such contract existed incorporating a standard form domestic subcontract with arbitration clause 18.2. Carrier applied to the High Court under RHC Order 73 rule 3(2) to challenge this finding, arguing key terms remained unresolved, ‘subject to contract’ letters prevented agreement, work was preparatory and not evidential, and uncertainty as to applicable arbitration clause. Applying established legal principles, the Court held: a binding contract may exist despite unresolved non-essential terms; ‘subject to contract’ wording was conditional on ASD acceptance which occurred; lengthy work performance supported contract existence; minor post-formation price adjustments do not negate contract; and the arbitration clause incorporated by the blue form subcontract is applicable notwithstanding back-to-back main contract arbitration provisions. Carrier’s application was dismissed with costs to Dickson.
Legal issues: Existence of binding arbitration agreement · Effect of 'subject to contract' wording on contract formation · Whether ongoing negotiations and unresolved terms preclude contract formation · Whether commencement of work constitutes evidence of contract · Certainty of applicable arbitration agreement
Outcome: Carrier’s application under Order 73 rule 3(2) dismissed; arbitrator’s jurisdictional finding upheld