Read the full judgment text of HCCT 12/2013, HCCT 16/2013 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 24 July 2014 before Hon Mimmie Chan J.
Arbitration — Jurisdiction challenge — Article 16(3) and Article 34 of the UNCITRAL Model Law — Arbitration Clause scope — Cooperation Agreement and Letters of Undertaking — Whether dispute arose in course of performance of Cooperation Agreement — Whether the Balance Payment Claim was included in Form 2 notice of arbitration — Whether Tribunal had jurisdiction over damages related to Revised Phase 2 Contract (S III Contract) — Whether Tribunal exceeded jurisdiction by findings on unpleaded issues — Whether S Co was deprived of opportunity to present case — Standard of judicial review of arbitral tribunal's jurisdiction ruling — Mode of challenge to jurisdiction ruling (Article 16 vs Article 34) — Public policy ground to set aside arbitration award — Court's de novo review of jurisdiction — Waiver of procedural objections — Construction of arbitration clause limited to disputes arising in course of performance — Claims under Letters of Undertaking derived from Cooperation Agreement and within Arbitration Clause — Tribunal’s award for unliquidated damages supported by evidence and reasons — Tribunal’s referencing of relevant authorities did not constitute procedural irregularity or prejudice — Court rejects challenge to awards and orders indemnity costs to B Co. The court emphasised the importance of prompt objection to procedural irregularities and good faith in arbitral proceedings, narrow construction of public policy grounds, and the necessity of de novo judicial review of Tribunal jurisdiction determinations made in awards on the merits. It is proper to challenge jurisdiction under Article 34 when Tribunal decides jurisdiction with merits, instead of Article 16(3) which is for preliminary rulings. The dispute over unpaid consultancy fees arose within the scope of parties’ arbitration agreement and the Tribunal did not exceed jurisdiction in making findings on associated issues, including those concerning the affiliated company S III. S Co had full opportunity to present its case. The challenges to the Interim Award and Costs Award are dismissed with costs to B Co on indemnity basis.
Legal issues: Jurisdiction of arbitral tribunal over Balance Payment Claim · Whether omission of Balance Payment Claim from Form 2 affects jurisdiction · Jurisdiction of Tribunal over S III Contract Claim and award of unliquidated damages · Whether Tribunal exceeded jurisdiction by findings on non-exclusion clauses and authority issues · Whether S Co was deprived of the opportunity to present its case · Proper mode for challenging Tribunal jurisdiction: Article 16 vs Article 34
Outcome: Application to set aside the Interim and Costs Awards dismissed; Article 16 OS dismissed; costs awarded to B Co against S Co on an indemnity basis.
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