Read the full judgment text of HCCT 37/2012 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 21 June 2013 before Deputy High Court Judge Lok in Chambers.
Arbitration — Construction contract dispute — Delay claim under back-to-back contracts — Interpretation of possession dates as tentative or actual — Application of standard form provisions SP 6.02 and SCC 11(4) — Whether contractual delay arises and entitlement to additional payments — Pay-when-paid clause — Certification and payment condition precedents — Leave to appeal against Interim Award granted — Appeal allowed with Interim Award set aside. The dispute arose from the upgrading works of hospital ventilation systems with Standard as sub-contractor and Kim Hung as main contractor under contracts incorporating standard forms modified by correspondence. The key issues were whether delay in possession constituted contractual delay entitling payment under SCC 11(4), and whether payment to Standard was conditional on Kim Hung receiving payment from the Employer (pay-when-paid). The court found possession dates in SP 6.02 were tentative and risk of delay absorbed by the Main Contractor without claim entitlement until written possession notification from the Architect. Hence, no contractual delay at the time of claim. For payment timing, the court held detailed contract provisions required certification and receipt of payment by the Main Contractor before sums became due to the Sub-Contractor, constituting a de facto pay-when-paid arrangement. The court disagreed with the Arbitrator’s reasoning, granting leave to appeal and setting aside the relevant parts of the Interim Award. The matter was directed for further hearing to determine the disposal of Standard's Delay Claim and costs.
Legal issues: The Delay Issue · The Payment Issue
Outcome: Leave to appeal granted; appeal allowed; Interim Award on Delay Claim set aside.
Cites 3 cases