Kim Hung Construction & Engineering Co. Ltd v. Standard Refrigeration & Engineering Co. Ltd
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 5 cases
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HCCT 37/2012 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTRUCTION AND ARBITRATION LIST NO. 37 OF 2012 _____________
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__________________________ JUDGMENT __________________________ 1.This is an application of Kim Hung Construction & Engineering Co Ltd (“Kim Hung”) made by originating summons for leave to appeal against the Interim Award Save as to Costs dated 23 August 2012 (“the Interim Award”) in its arbitration with Standard Refrigeration & Engineering Co Ltd (“Standard”). 2.It is trite law that, in considering whether to grant leave to an applicant to appeal against an arbitral award, the court needs to consider the merits of the appeal itself. 3.In the oral hearing on 5 March 2013, I have raised the question that, if the court were to grant leave to appeal, whether the court should proceed to determine the substantive appeal in the same hearing. By that time, both counsel indicated to the court that there had prepared the submissions on the basis that it was a leave application only, and so they were not prepared to treat the hearing as the substantive appeal if leave to appeal were to be granted. However, having considered the submissions of the parties, it is clear that the merits of the appeal would depend very much on the construction of the terms in the various contractual documents. As the court has to determine the meanings of these terms in any event, it would be more convenient, time and costs efficient and desirable for the court, in the case that leave to appeal is granted, to deal with substantial appeal in the same hearing. The parties were therefore invited to make further submissions on the proposal and whether they would like to present further evidence and submissions on the substantive appeal. After considering the further submissions of the parties, I decided to conduct the appeal in the manner as proposed. For the substantive appeal, both parties did not file additional evidence but they did make further written submissions to the court (“the Further Submissions”). BACKGROUND 4.The present dispute arose out of a programme implemented by the Hospital Authority (“HA”) to improve the ventilation systems in various public hospitals after the outbreak of SARS in Hong Kong in 2003. 5.On or about 7 December 2005, Kim Hung (the Main Contractor) entered into a contract with HA (the Employer) to undertake construction works for the improvement of infection control provisions for autopsy facilities in 11 public hospitals. One of the construction works was the upgrading of the Mechanical Ventilation Air-Conditioning System which was sub-contracted to Standard (the Sub-Contractor). 6.The sub-contract between Kim Hung and Standard (“the Sub-Contract”) was based on the Hong Kong Construction Association’s Standard Form of Domestic Sub-contract 1994 Edition (“SFDSC”) as supplemented and modified by Standard’s letter dated 3 April 2006 and Kim Hung’s subsequent letter also of the same date. By this subsequent letter of Kim Hung, the terms and conditions of the main contract between HA and Kim Hung (“the Main Contract”), i.e. the Hong Kong Standard Form of Building Contract with the General Conditions amended by para 7.03 of the Specification Preliminaries (“SP”), were applied to the Sub-Contract on a “back-to-back” basis. 7.Disputes subsequently arose between HA, Kim Hung and Standard. Standard commenced arbitration proceedings against Kim Hung on 22 July 2010 (“the Arbitration”), and Kim Hung also commenced arbitration proceedings against HA on 9 September 2010. 8.In the Arbitration, Standard claimed against Kim Hung for:
9.On the other hand, Kim Hung counterclaimed Standard for loss and damage in the sum of $2,572,670 suffered as a result of the negligence on the part of Standard in failing to replace an old air duct at the North District Hospital, and as a result the contractually required fresh air intake and air pressure were not attained. 10.After the arbitral hearing, the Arbitrator made and published the Interim Award in the following terms:
11.The intended appeal by Kim Hung is related to both the Delay Claim and the issue of liability under the CCMS Variation Claim. However, since the quantum assessed for the CCMS Variation Claim is nil, Kim Hung is not pressing for the appeal in respect of such claim. PRINCIPLES ABOUT THE GRANTING OF LEAVE TO APPEAL AGAINST ARBITRAL AWARD 12.The Notice of Arbitration of this Reference was issued on 22 July 2010 and hence the Reference is governed by the Arbitration Ordinance (Cap 341). The Arbitration Ordinance (Cap 341) was repealed and replaced by the new Arbitration Ordinance (Cap 609) which came into operation on 1 June 2011. However, according to para 1 of Schedule 3 of the current Arbitration Ordinance (Cap 609), this application for leave to appeal is a set of proceedings related to the Reference which should be governed by the repealed Ordinance. 13.Further, by virtue of s 110 of the current Arbitration Ordinance (Cap 609), the repealed O 73 of the RHC (Cap 4A) continues to apply to this application for leave to appeal. 14.Under the repealed Arbitration Ordinance (Cap 341), s 23(2) provides that an appeal shall lie to the court on any question of law arising out of an award made on an arbitration agreement, and on the determination of such appeal the court may by order: (a) confirm, vary or set aside the award; or (b) remit the award for reconsideration by the arbitrator together with the court’s opinion on the question of law. 15.S 23(2) of the repealed Arbitration Ordinance (Cap 341) provides that an appeal must be brought with the consent of all the other parties to the reference or with the leave of the court. As no consent has been given by Standard, the present appeal requires the leave of the court. 16.S 23(4) of the repealed Arbitration Ordinance (cap 341) further provides that the court shall not grant leave to appeal unless it considers that, having regard to all the circumstances, the determination of the question of law concerned can substantially affect the rights of one of more of the parties to the arbitration agreement. 17.Apart from the consideration as expressly stated in s 23(4), the following additional requirements have been laid down in the Court of Final Appeal’s decision in Swire Properties & Ors v Secretary for Justice (2003) 6 HKCFAR 236 in granting leave to appeal against an arbitral award:
18.In Penta-Ocean Construction Co Ltd v CWF Piling & Civil Engineering Co Ltd [2007] 3 HKLRD 233, A Cheung J (as he then was) held the following at paras 4 to 12 of the judgment:
19.In the present case, I do not find it necessary to determine whether the construction is one involving a standard clause or a “one-off” clause, as I take the view that the Arbitrator has clearly made a mistake in his construction of the relevant clauses in the Main Contract and the Sub-Contract. 20.Although Kim Hung has advanced 6 grounds of appeal, the dispute between the parties can be narrowed down to the following two issues:
21.I will deal with these two issues in turn. THE DELAY ISSUE (a) The relevant contractual provisions 22.The Delay Issue involves the construction of the following terms in the Main Contract and the Sub-Contract. Firstly, SP 6.02 of the Main Contract provides the following:
23.Further, SP 7.02 provides that the dates for site possession of all Sections 1 to 3 Hospitals are “to be notified by the Architect”. 24.In the letter of acceptance from Kim Hung dated 3 April 2006, Kim Hung provided a schedule of Tentative Date for Possession and Handover of each hospital to Standard. 25.In advancing the Delay Claim, Standard relies on the following contractual provisions. Clause 10.2 of the Sub-Contract provides:
26.On the other hand, clause 11(4) of the Supplementary Condition of Contract (“SCC”) of the Main Contract (which amended clause 21 of the Main Contract) stipulates the following:
27.The Main Contract provides for the completion of works in stages. After the completion of works in Section 1 Hospitals, the sites in Section 2 Hospitals would be handed over to the Main Contractor and the Sub-Contractor, and so on. The Delay Claim relates to the alleged delays in handing over sites of Sections 2 and 3 Hospitals. 28.Standard submits that Kim Hung is entitled to claim additional expenditure when the Employer had delayed in giving possession of sites pursuant to SCC 11(4), and accordingly Standard has the same right for payment under clause 10.2 of the Sub-Contract. 29.On the other hand, Kim Hung claims the following:
(b) The decision of the Arbitrator 30.In reaching the decision, the Arbitrator proceeded on the basis that there was a conflict between the provisions in SP 6.02 and SCC 11(4). In paras 27 to 30 of the Reasons for the Interim Award (“the Reasons”), the Arbitrator said the following:
31.The Arbitrator also relied on the admissions made by Kim Hung in finding that there was delay on the part of the Employer in giving possession of the hospital sites to Kim Hung and its sub-contractor Standard. The Arbitrator said the following in the Reasons:
32.Further, as Kim Hung had all along maintained that there was a cause of action against the Employer for the Delay Claim, the Arbitrator also relied on such admission in finding that there was delay on the part of the Employer in giving possession of the sites to Kim Hung. In this regard, the Arbitrator said the following:
(c) Merits of the Delay Claim 33.With respect to the learned Arbitrator, I cannot agree with his reasoning. 34.Firstly, I do not see any conflict between SP 6.02 and SCC 11(4). To me, the meaning of SP 6.02 is more than clear. It expressly stipulates that:
35.The fact that the dates of possession were tentative which had to be notified by the Architect in writing is actually supported by the Arbitrator’s own finding. In para 22 of the Reasons, the Arbitrator said the following:
36.The tentative nature of the dates can also be illustrated by one instance. The tentative dates of possession of Alice Ho Miu Ling Nethersole Hospital, Pamela Youde (Nethersole Eastern) Hospital, Kwong Wah Hospital and United Christian Hospital were all before the date of the letter of acceptance by Standard dated 3 April 2006. If Standard’s argument is correct, Kim Hung would be liable to pay damages to Standard once the Sub-Contract was made, as some of the tentative dates were actually before the making of the Sub-Contract. This simply cannot be right. Hence in my judgment, the dates of possession stated in SP 6.02 were all tentative dates only. As specified, the Main Contractor had to make allowance in his tender for all extra costs and expenses that might be incurred due to early or delayed possession of any of the sites and the Main Contractor shall not be entitled to claim any loss or expenses in the event that the actual dates were different from the tentative dates. 37.On the other hand, SCC 11(4) would govern the scenario if the Employer did not give possession of the hospital sites to the Main Contractor after the notification issued by the Architect, then the Main Contractor is entitled to lodge a delay claim against the Employer. There is therefore no conflict between SP 6.02 and SCC 11(4). 38.I also agree with Mr Chong, counsel for Kim Hung, that the Arbitrator had wrongly relied on the alleged admissions made by Kim Hung in finding that there was actionable delay on the part of the Employer or Kim Hung in giving possession of the hospital sites to Standard. 39.Apparently, the Arbitrator was relying on the admission made by Kim Hung in para 8 of the Defence and Counterclaim in the Arbitration proceedings. In that paragraph, Kim Hung was simply referring to para 11 of the Statement of Claim, which spelt out the respective “periods of delay” for Sections 2 and 3 Hospitals with reference to the tentative dates of possession set out in SP 6.02 of the Main Contract and the actual dates of possession. It was therefore right for Kim Hung to admit that there was such a lapse of time in the tentative dates and the actual dates as a matter of fact, but this cannot be taken as an admission of contractual delay on the part of the Employer or Kim Hung. Further, it was made clear in the opening and final submissions of Kim Hung’s counsel in the arbitral hearing that contractual delay was a disputed issue in the proceedings, and so the Arbitrator had erred in law in just relying on these so-called “admissions” in finding that Standard has a valid delay claim in law against Kim Hung or HA. 40.Similarly, the Arbitrator also should not have relied on the “admissions” of Kim Hung in its correspondence with the Architect and the Quantity Surveyor in finding that there is a valid delay claim in law. It is clear that the Sub-Contract was made on a back-to-back basis with the Main Contract. Under SFDSC 10.3, Kim Hung as the Main Contractor had a duty to submit the delay claim to the Employer on behalf of Standard, and Kim Hung shall take all reasonable steps to secure from the Employer the contractual benefits in respect of any such claim by Standard. Kim Hung therefore had to present the delay claim on Standard’s behalf, and in so doing, Kim Hung had to make an assertion to the Employer that the delay claim was a valid one. Under such circumstances, such assertion by Kim Hung should not be regarded as an admission that there is a valid contractual delay claim in law vis-à-vis Kim Hung and Standard. 41.In the Further Submissions, Ms Lam, counsel for Standard, has also raised the following arguments:
42.I cannot accept these arguments. Firstly, whether the Architect had issued notifications for possession of sites was not an issue raised in the Arbitration, and that was why the Arbitrator had not dealt with such issue anywhere in the Reasons. As I see it, the meanings of SP 6.02 and SCC 11(4) are clear. The actual possession dates for each Section would be notified in writing by the Architect. If it is Standard’s case that, because of the lack of formal notifications, it was the understanding of the parties that the tentative possession dates were to be regarded as actual possession dates, then the matter had to be expressly raised in the Arbitration proceedings so that both parties would have the opportunity to adduce evidence on the issue. In any event, the Reasons do not contain sufficient materials to support Ms Lam’s argument in this regard, and hence the Interim Award relating to the Delay Claim should not be allowed to stand. 43.Secondly, it is not open to the court to rewrite a contract on the ground of commercial fairness. Standard did have the opportunity to look at all the terms of the Main Contract before committing itself to the project. Further, the terms of SP 6.02 are clear. Any risk of additional expenditure being incurred by reason of the difference between the actual dates of possession and the tentative dates should be within the contemplation of Standard, and it was always open to Standard to reflect such risk in the tender price. As the court cannot turn a blind eye to the clear language of the relevant clauses, there is no room for the court to disturb such allocation of risks between the parties as clearly expressed in the Main Contract and the Sub-Contract. Further, as commercial fairness was not an issue canvassed in the Arbitration proceedings, the court should not jump into any conclusion about the commercial fairness of a particular arrangement agreed by the parties. 44.Finally, I do find that there is any ambiguity in the terms contained in SP 6.02 and SCC 11(4), and so there is no room for the application of the contra proferentum rule. 45.As I have mentioned above, the Arbitrator’s construction of the relevant terms in the Main Contract and the Sub-Contract is clearly wrong. No matter whether the relevant contractual terms are standard or “one-off” clauses, the court should grant leave to appeal against the Arbitrator’s finding on the Delay Claim. Further, adopting the dicta of A Cheung J in Penta-Ocean, supra, theses clauses are very much standard clauses or very nearly standard clauses, and the construction of these clauses would have considerable impact as to how the parties can allocate their risks resulting from the change of dates in the handing over of construction sites, leave to appeal should therefore be granted in any event. I therefore so order. 46.I also proceed to deal with the substantive appeal. As the Arbitrator had erred in the construction of the relevant contractual provisions, I allow the appeal and set aside the Interim Award relating to the Delay Claim. 47.My opinion on the Delay Claim should have been sufficient to dispose the appeal. However, in case I am wrong on the Delay Issue, the Payment Issue would become relevant and so I also give my opinion on such issue. THE PAYMENT ISSUE (a) The relevant contractual provisions 48.In opposing Standard’s claim, Kim Hung argues that payment by Kim Hung to Standard under the Sub-Contract was on a “pay-when-paid” basis, i.e. Kim Hung would only be contractually liable to pay Standard conditional upon receipt of payment from the Employer. 49.As submitted by Mr Chong, the commercial purpose of “pay-when-paid” clauses is to share a proportion of the loss suffered by the main contractor with the sub-contractor in the event that the employer becomes insolvent or fails to pay the main contractor (see: Chitty on Contracts – Hong Kong Specific Contracts (3 ed), para 5-140 and Construction Law and Practice in Hong Kong (2 ed), para 15-070). 50.Kim Hung accepts that sufficiently clear wording must be used in contractual provisions to express a “pay-when-paid” agreement (see: Wo Hing Engineering Ltd v Pekko Engineers Ltd, unreported, HCA 5561/1996, 7 September 1998, at para 47, Honeywell Ltd v Kin Ming E&M Works Ltd and Anr, unreported, HCCT 76/2001, 5 May 2004, at para 23, Massford (HK) Ltd v Wah Seng General Contractors Ltd [2006] 1 HKC 58, at paras 62H-63A, Chitty on Contracts – Hong Kong Specific Contracts, supra, para 5-140). 51.The question whether there was a “pay-when-paid” agreement in the Sub-Contract between Kim Hung and Standard involves the construction of a number of provisions in the letter of acceptance dated 3 April 2006 from Kim Hung, the Sub-Contract (based on SFDSC) and the Main Contract. 52.Firstly, clauses 1 and 2 of the letter of acceptance dated 3 April 2006 from Kim Hung apply all terms of the Main Contract to the Sub-Contract on a back-to-back basis. 53.Secondly, under SCC 11(4) of the Main Contract, Kim Hung has a contractual right to lodge a delay claim for additional expenditure if the Quantity Surveyor ascertains the costs incurred and certifies the same in accordance with the Main Contract. Further pursuant to SCC 11(4) and 11(6) as well as SCC 4 of the Main Contract, all variations required by the Architect and the direct loss and expenses thereof shall be measured, valued and ascertained by the Quantity Surveyor. 54.Thirdly, SFDSC 10.3, which is a sub-clause under the heading “Notices and Claims”, provides the following:
55.Fourthly, SFDSC 15 is a clause with the heading “Payment”. SFDSC 15.1 to 15.4 provide the procedures as to how the Sub-Contractor could claim for payment for the works done by it under the Sub-Contract. In short, the Sub-Contractor would provide a statement of the value of works to the Main Contractor, who would then submit the statement to the Employer and make an application for payment. 56.The remaining part of SFDSC 15 reads as follows:
(b) The decision of the Arbitrator 57.As seen above, the Sub-Contract contains quite elaborated provisions governing the time for payment. In rejecting Kim Hung’s argument that the payment under the Sub-Contract was on a “pay-when-paid” basis, the Arbitrator relied on the terms in SFDSC 15.8. In the Reasons, the Arbitrator said the following:
(c) The court’s opinion on the Payment Issue 58.As I see it, the SFDSC contains very detailed provisions relating to the requests for payments by sub-contractor and when those requests were due for payment. So far as SFDSC 15 is concerned, it refers to a “valid statement” by the sub-contractor setting out the value of the work properly done under the sub-contract and of all material delivered to the site for incorporation in the sub-contract works. The main contractor would then submit the “valid statement” to the employer for payment. Under SFDSC 15.5, it provides the due date for the payment of the sums specified in the “valid statement”, but the main contractor is entitled to withhold payments under the circumstances specified in SFDSC 15.6. Under SFDSC 15.8, the main contractor has to pay to the sub-contractor the sub-contract price and “any other sums that may become due under the Sub-Contract” within 3 months after the sub-contractor has fully performed his obligations relating to maintenance and defects, or within 14 days after the contractor has recovered full payment under the main contract, whichever is the sooner, subject to the provisio that 1 month has expired since the submission of the “valid statement of the final account” to the main contractor. 59.Both parties concentrate on the interpretation of the provisions contained in SFDSC 15, and so I have to proceed on the basis that SFDSC 15 governs the procedure for the lodging of the Delay Claim, and Standard had properly included the Delay Claim in a “valid statement” as defined in SFDSC 15. 60.Mr Chong submits that there is an apparent conflict between the provisions in SFDSC 15.6(d) and 15.8. As SFDSC 15.6(d) is expressed to apply to the whole SFDSC 15, SFDSC 15.8 should be read subject to SFDSC 15.6(d). 61.Construction contracts may provide for works to be completed in stages and sub-contractor may submit “valid statements” to the main contractor from time to time. SFDSC 15.8 deals with the specific scenario that the sub-contractor has completed all the works under the sub-contractor and submitted the “valid statements of final account” to the main contractor. 62.To me, the main point here is whether the payment under the Delay Claim is a sum due under the Sub-Contract under SFDSC 15.8. After construing the relevant provisions in the contracts, I find that the amount claimed under the Delay Claim has yet been due for payment. 63.SFDSC 15.5 actually provides for the due date for the payment of the value of work and materials if included in a “valid statement”, which is 49 days after the Specified Date as defined. Despite such provision, SPDSC 15.6(a) provides that the Main Contractor is entitled to withhold payment under certain circumstances, and it is common ground that those circumstances are applicable in the present case (i,e. the Delay Claim has not been certified by the Architect, Kim Hung has not received the payment for the Delay Claim and there is a dispute between the Employer and Kim Hung relating to the Delay Claim). Further, SFDSC 15.6(d) specifically provides that the amounts or quantities in any valid statement by the Sub-Contractor which had been included in the Main Contractor’s “statement of final account” to the Employer would only be due 7 days after receipt by the Main Contractor of any payment which included a sum in respect of such amounts or quantities. Under such circumstances, the payment for the Delay Claim simply has not been due for payment under the Sub-Contract. 64.Further support can also be found in the wording of SCC 11(4) of the Main Contract. SCC 11(4) forms the basis of Standard’s Delay Claim against Kim Hung and the Main Contractor. However, the said provision requires the payment to be certified by the Architect. In such circumstances, the Delay Claim would not have been due for payment under the Main Contract before certification by the Architect. As the terms of the Main Contract were applied to the Sub-Contract on a back-to-back basis, the Delay Claim has yet been due for payment under the Sub-Contract. 65.In this respect, the present case is similar to Massford (HK) Ltd v Wah Seng General Contractors Ltd, supra. In that case, the terms were slightly different, which read:
66.I agree with the dicta of Roger JA in Massford that every case would have to be determined according to its own facts. In Massford, the terms used might be clearer. However, SFDSC 15.6(a)(iii)-(v) and 15.6 expressly provide that, Kim Hung, as the Main Contractor, was entitled to withhold or defer payment to the Sub-Contractor under certain circumstances. Further, SFDSC 15.6(d) specifically provides that the amounts or quantities in any valid statement by the Sub-Contractor which had been included in the Main Contractor’s “statement of final account” to the Employer would only be due 7 days after receipt by the Main Contractor of any payment which included a sum in respect of such amounts or quantities. Construing all these provisions as a whole, I find that the payment for the Delay Claim has yet been due under the Sub-Contract and so Standard cannot ask Kim Hung for such payment under SFDSC 15.8. 67.As I see it, the payment term for a delay claim was that it required certification by the Architect. Under the Main Contract, the arbitrator in the arbitration proceedings would have the power to review the decision of the Architect. If Standard seeks to make a delay claim under SCC 11(4), it first has to submit such a claim to Kim Hung. Kim Hung, under the provision in SFDSC 10.3 or an implied term under the common law, has a duty to pursue such claim against the Employer perhaps in arbitration proceedings. If the arbitrator disagrees with the decision of the Architect and allows the delay Claim, the Employer has the obligation to make such payment to Kim Hung who would in turn be obliged to make the payment to Standard. After construing the provisions in the Main Contract and the Sub-Contract, I find that this was the arrangement agreed by the parties relating to the payment term for a delay claim under SCC 11(4). 68.I would also add one more observation. Whether the payment for a delay claim is on a “pay-when-paid” basis and whether Kim Hung had taken reasonable steps to secure the contractual benefit for Standard are two distinct issues. To a certain extent, these two issues are mutually exclusive. If the payment is not on a “pay-when-paid” basis, there is simply no reason to require Kim Hung to take reasonable steps to secure such payment for Standard, as Standard can always pursue such claim directly against Kim Hung. Apparently, the Arbitrator has mixed up these two distinct issues in the Reasons. According to the Arbitrator, there was inaction on the part of Kim Hung in taking any further action to chase the Employer for payment after the submission of the claim by Standard. However, this has nothing to do with the question as to whether, under the terms of the Sub-Contract, the payment arrangement for the delay claim is one on “pay-when-paid” basis. 69.For the above reasons, insofar as a delay claim is concerned, I find that the agreed payment arrangement between the parties is one on a “pay-when-paid” basis. CONCLUSION 70.I have dealt with the two main issues raised by the parties in this appeal, both in favour of Kim Hung. Given the court’s construction of the relevant terms in the Main Contract and the Sub-Contract, I grant leave to Kim Hung to appeal against the Interim Award relating to the Delay Claim. I also allow the appeal and set aside the Interim Award on the Delay Claim. 71.Without the opportunity of hearing further submissions from the parties, I am not sure whether I should proceed to dismiss Standard’s Delay Claim right the way or to remit the case back for reconsideration by the Arbitrator together with the court’s opinion on the question of law. I am also not certain whether I would need to resolve other issues for the purpose of this appeal. I therefore direct the parties to fix another hearing before myself with an estimated time of 2 hours to deal with these matters. If the parties think that the time estimate is incorrect, they should write to the court to provide their time estimate for the hearing. 72.I will also deal with the issue of costs in the next hearing.
Mr K M Chong and Mr Aidan Tam, instructed by Au, Thong & Tsang, for the applicant (respondent in arbitration) Ms Priscilia Lam, instructed by Fried, Frank, Harris, Shriver & Jacobson, for the respondent (claimant in arbitration) | |||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under HCCT 37/2012