Read the full judgment text of CACV 230/2011 on BabelCite. This 高等法院上訴法庭 judgment was delivered on 10 October 2012 before Hon Kwan JA, Hon Fok JA, Hon Lam JA.
Arbitration — Construction contract — Re-rating under GCC Clause 59(4)(b) — Standard form contract clause — Leave to appeal test under Arbitration Ordinance s.23 — Proper construction of contract rates — Composite rates incorporating fixed and variable costs — Whether arbitrator may consider tender build-up of rates in applying re-rating clause — Threshold test for leave to appeal on question of law concerning standard clause — The appellant joint venture was main contractor under a Government contract with standard GCCs. Dispute arose over payment for quantity of work significantly exceeding estimate. The arbitrator applied GCC 59(4)(b), considering the composite nature of the contract rate which included transferred fixed costs from other items, and found the rate unreasonable when applied to the increased quantity, thus re-rating the rate downward. The Court of Appeal held that the arbitrator was correct to consider the contractor’s rate build-up as relevant evidence and that the treatment of such composite rates was consistent with contract principles and established commentaries, distinguishing authorities concerning variations and immutable contract rates. The appellant failed to show at least a serious doubt as to the arbitrator’s legal reasoning to justify leave to appeal. The appeal against the refusal of leave to appeal was dismissed, and the appellant ordered to pay costs on indemnity basis. The court reaffirmed the proper threshold test for appeals against arbitration awards involving standard form contract clauses and the permissible scope of inquiry into contract rates under GCC 59(4)(b).
Legal issues: Proper construction and application of GCC Clause 59(4)(b) · Threshold for granting leave to appeal under s.23 Arbitration Ordinance
Outcome: Dismissal of appeal against refusal of leave to appeal arbitration award; appellant ordered to pay costs of appeal.
Cites 2 cases