Shandong Hongri Acron Chemical Joint Stock Co Ltd v. Petrochina International (Hong Kong) Corporation Ltd
Read the full judgment text of HCCT 45/2009 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 30 November 2011 before Hon Saunders J.
Construction and Arbitration Proceedings — Enforcement of Arbitration Award — Mechanistic Approach — Costs — Indemnity basis — Court initially imposed conditions on enforcement but Court of Appeal set aside conditions allowing unconditional enforcement. Court reaffirmed the principle that a party unsuccessfully resisting enforcement must pay costs on indemnity basis absent special circumstances, referencing Xiamen Xinjingdi Group Ltd v Eton Properties Ltd & Anor [2008] 4 HKLRD 972 and A v R [2010] 3 HKC 67. The Respondent resisted enforcement unnecessarily extending proceedings and must pay Applicant’s costs of all relevant summonses on indemnity basis, with certificate for two counsel allowed. Orders made accordingly.
Legal issues: Costs liability for resisting enforcement of arbitration award
Outcome: The Respondent must pay the Applicant’s costs on an indemnity basis for resisting enforcement of the arbitral award, save for any expressly contrary orders.
Cited by 5 cases · Cites 1 case
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HCCT 45/2009 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTRUCTION AND ARBITRATION PROCEEDINGS NO. 45 OF 2009 ____________
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____________ Before: Hon Saunders J in Chambers Dates of Written Submissions: 3, 10 & 16 November 2011 Date of Ruling: 30 November 2011 ___________ R U L I N G ___________ 1.On 25 January 2011, I made a decision in these proceedings in respect of the enforcement of an arbitral award between these parties. 2.On 25 July 2011, the Court of Appeal allowed an appeal against my decision and ordered that if the outstanding costs in respect of the proceedings before me could not be agreed I should fix those costs, in accordance with the Court’s judgment. 3.In my original decision I had imposed conditions upon the enforcement of the award. The effect of the appeal was to set aside those conditions, and allow the enforcement of the award on an unconditional basis. 4.When the proceedings first came before me in December 2009, I expressed concern as to the effect of the arbitral award, if it were to be enforced as the Applicant sought. The Respondent, encouraged by my concern, resisted the order for enforcement. 5.The effect of the decision of the Court of Appeal is to remind me that an application to enforce an arbitral award the court adopts a purely mechanistic approach. The Applicant’s application was to ask for nothing more than a mechanistic conversion of paragraphs 2-6 of the award into a court judgment. As the judgment of the Court of Appeal shows, the Applicant was entitled to the order and I should not have been persuaded, out of a sense of fairness, to resist that entitlement. 6.It has been well established for some time that the mechanistic approach is the correct approach: see Xiamen Xinjingdi Group Ltd v Eton Properties Ltd & Anor [2008] 4 HKLRD 972. The Respondent should have resisted my efforts to depart from the mechanistic approach. As the judgment of the Court of Appeal shows, Ms Cheng SC was quite right when she argued before me that my concerns were more properly addressed at the enforcement or execution stage. 7.It is well established that a party who is unsuccessful in an application to appeal against or set aside an arbitration award or who unsuccessfully resists an order for enforcement must pay costs on an indemnity basis in the absence of special circumstances: see A v R [2010] 3 HKC 67. 8.Mr Khaw seeks to deal with the matter on a summons by summons basis, looking individually at each summons to determine where the costs should lie. Unpalatable though it may now seem to the Respondent, its proper course at the very start was to ensure that I did not depart from the proper procedure, and to take appropriate steps, in the light of the views I had taken of the matter, at the enforcement or execution stage. By not doing so the proceedings were unnecessarily extended. 9.There are no special circumstances in this case. 10.There will be an order that the Respondent must pay the Applicant’s costs of the application, including but not limited to the costs of and occasioned by the following Summonses, on an indemnity basis, save in respect of any contrary costs orders expressly made:
11.This is a costs matter which would normally be dealt with by the junior counsel. But in view of the history of the matter, I am satisfied that there should be a certificate for two counsel.
Ms Teresa Cheng SC, leading Mr Adrian Lai, instructed by Messrs Hogan Lovells, for the Applicant/Creditor Mr Richard Khaw, instructed by Messrs Mayer Brown JSM, for the Respondent/Debtor | ||||||||||||||||
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