Read the full judgment text of CACV 79/2011 on BabelCite. This Court of Appeal judgment was delivered on 12 January 2012 before Tang VP, Fok JA, Sakhrani J.
Civil procedure – costs – arbitration – enforcement of arbitral award – whether unsuccessful challenge to enforcement of award warrants indemnity costs – Civil Justice Reform – underlying objectives – practice in Construction and Arbitration List – whether special circumstances required to depart from indemnity costs – whether Karaha Bodas Co Llc v Perusahaan Pertambangan Minyak Dan Gas Bumi Negara still applicable post-CJR – whether certificate for three counsel should be granted. The Applicants obtained Arbitral Award No. 2232 of 2009 from the Xi'an Arbitration Commission and sought to enforce it in Hong Kong. Reyes J set aside leave to enforce the Award; the Court of Appeal set aside that order and made an order nisi that the Applicants should have their costs both before the Court of Appeal and at first instance. The Applicants sought costs on an indemnity basis and a certificate for three counsel. Held, in relation to the first issue (whether indemnity costs should be awarded), that the practice adopted by Reyes J in A v R [2010] 3 HKC 67 and by Saunders J, that in proceedings arising out of or in connection with arbitral proceedings costs will normally be ordered on an indemnity basis in the absence of special circumstances, is a salutary practice and should be followed. Karaha Bodas Co Llc v Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (FACV 6/2008, 6 February 2009) predated CJR and the court must give effect to the underlying objectives of CJR when exercising its powers; the court may be more ready to award indemnity costs post-CJR, particularly given provisions such as O 22 r 23(4)(a) relating to sanctioned payments and offers. The Respondents' reliance on Town Planning Board v Society for Protection of the Harbour Ltd (No 2) (2004) 7 HKCFAR 114 was rejected because the discretion to award indemnity costs must not be fettered beyond the requirement that it be appropriate, and the fact that the Respondents' case was not unarguable was not a special circumstance warranting departure from indemnity costs. Held, in relation to the second issue (whether a certificate for three counsel should be granted), that no such certificate would be granted, as there was nothing exceptional about the complexity of the case, although the question of recovery on a taxation on an indemnity basis was left to the taxing master under O 62 r 28 para (4A). Outcome: order nisi for costs on an indemnity basis made absolute; certificate for three counsel refused.
Legal issues: Whether indemnity costs should be awarded for unsuccessful challenge to enforcement of arbitration award · Whether a certificate for three counsel should be granted
Outcome: Order nisi for costs on an indemnity basis made absolute; certificate for three counsel refused
Cited by 1 case · Cites 3 cases