Cs v. Hkr

CACV 76/2025 · [2026] HKCA 1142 · Court of Appeal · 2026-07-20 · published 21 July 2026

Background

CS was main contractor on the Hong Kong-Zhuhai-Macau Bridge Project. HKR was the marine works subcontractor under a remeasurement contract (§6). Two disputes went to arbitration: the Sand Fill Issue (whether HKR could claim 100% sand fill, or had to use 30% public fill under a pre-contract oral agreement and Main Contract terms) and the Double Recovery Issue (whether BQ Item 19 and Extra Works Item 20 paid twice for the same rockfill). Arbitrator Mr Bernard Wu found for HKR on both. CS sought leave to appeal under s 5/6 of Schedule 2 to the Arbitration Ordinance. The judge refused leave on 22 November 2024, then granted it on 7 February 2025. CS appealed. The Court of Appeal (Poon CJHC, Kwan VP and Chow JA) dismissed the appeal on 20 July 2026.

Key findings

1. The Court applied appellate restraint: it would not disturb the judge's exercise of discretion unless she erred in law or approach, or was plainly wrong (§25). 2. On Question 1, the arbitrator's finding of a specific oral agreement at the 2 April 2012 tender meeting for 100% sand as Type A fill was a finding of fact, not law (§28-29). The court could not revisit it under s 5(3) of Schedule 2. 3. The arbitrator found the oral agreement had been incorporated into the Subcontract via the BQ description change from "Type A fill to +2.5mPD" to "Sand fill" (§28, §47 of the Reasons). This displaced any obligation to maximize public fill under the Main Contract (§27). 4. The court rejected CS's argument that the oral agreement could not override the written Subcontract: construction contracts can be partly oral and partly written (§29). 5. On Question 3, the arbitrator accepted that BQ Item 19 measured excavation and Extra Works No 20 measured deposition costs, with no overlap (§33, §§43-44 of the Decision). 6. The arbitrator also rejected the factual premise that the 23,059 m³ of disputed rockfill came from material already paid under BQ Item 18 (§35, §167 of the Reasons). The double recovery argument failed at the factual level. 7. The court reaffirmed the three-stage process in Finelvet AG v Vinava Shipping Co Ltd (The "Chrysalis") [1983] 1 WLR 1469: only the second stage (contract construction) is appealable as a question of law (§24(3)). 8. The "obviously wrong" or "open to serious doubt" threshold remains high; a different view on document construction does not automatically meet it (§24(6), §34).

Why it matters

This case is a useful reminder of the deference paid to arbitral fact-finding under Schedule 2. Findings about pre-contractual negotiations, even where said to override written terms, are generally treated as facts immune from appellate review. Practitioners should check whether a complaint is genuinely about contract construction (appealable) or factual findings dressed up as errors of law (not appealable). The Double Recovery Issue also shows that double recovery arguments can be defeated on factual grounds (identity of the material) before reaching the legal question.