HCCT63/2003 NEHLSEN HONG KONG LTD v. CHINA STATE CONSTRUCTION ENGINEERING (HONG KONG) LTD - LawHero
HCCT63/2003
高等法院（建築及仲裁）Burrell J5/11/2003
HCCT63/2003
由此
A A
HCCT63/2003
B B
IN THE HIGH COURT OF THE
C HONG KONG SPECIAL ADMINISTRATIVE REGION C
COURT OF FIRST INSTANCE
D D
CONSTRUCTION AND ARBITRATION PROCEEDINGS
E NO.63 OF 2003 E
F ------------------------- F
G
BETWEEN G
H
NEHLSEN HONG KONG LIMITED Applicant H
and
I I
CHINA STATE CONSTRUCTION Respondent
ENGINEERING (HONG KONG) LIMITED
J J
----------------------
K K
Before : Hon Burrell J in Chambers
L Date of Hearing : 3 November 2003 L
Date of Decision : 6 November 2003
M M
-----------------------
N N
DECISION
-----------------------
O O
1. This is an application to stay proceedings brought by the
P P
plaintiff by writ in favour of arbitration pursuant to section 6 of the
Q Arbitration Ordinance, Cap.341. Q
R R
2. Article 8 of UNCITRAL Model Law applies :
S S
“A court before which an action is brought in a matter which is
the subject of an arbitration agreement shall, if a party so
T T
requests not later than when submitting his first statement on the
U U
V V
由此
- 2 -
A A
substance of the dispute, refer the parties to arbitration unless it
finds that the agreement is null and void, inoperative or
B B
incapable of being performed.”
C C
3. In the present case the fact that a dispute exists is not
D D
challenged. Neither is it challenged that there is an arbitration clause in
E the sub-contract. The wording of the arbitration clause is important. It E
says :
F F
“DISPUTE RESOLUTION
G G
Any dispute that arises between the Main Contractor and the
Sub-Contractor, either during the progress or after the
H completion or abandonment of the Sub-Contract Works, on the H
construction of the Sub-Contract or any matter or thing of
I whatsoever nature arising thereunder or in connection therewith, I
then such dispute or difference shall be resolved according to the
law of the HKSAR. Unless the Sub-Contract has been
J determined or abandoned the Sub-Contractor shall continue to J
proceed with the Sub-Contract Works. After determination,
abandonment or completion of the Sub-Contract Works
K K
(whichever is the later) the parties to this Sub-Contract shall
refer the dispute or difference to arbitration which shall be
L submitted to the Hong Kong International Arbitration Centre to L
be proceeded under its Domestic Arbitration Rules. The award
of the arbitration shall be final and binding on the parties to the
M Sub-Contract.” M
N N
4. Article 8 provides for a mandatory stay if “the matter” i.e. the
O O
dispute, “is the subject of an arbitration agreement”.
P P
5. The dispute in this case concerns alleged shortfalls in
Q Q
payments by the defendant to the plaintiff and for prolongation costs.
R The dispute is not about the construction of the sub-contract. R
S S
T T
U U
V V
由此
- 3 -
A A
6. Mr John Scott SC, for the plaintiff, submits as his
B
first argument, that the arbitration clause only provides for “construction of B
C
the sub-contract” issues to be referred to arbitration. C
D D
7. He analyses the four sentences in Clause 15 separately. The
E first sentence, he submits, provides that Hong Kong law shall apply to any E
dispute concerning :
F F
(a) the construction of the sub-contract;
G G
(b) any matter arising under the construction of the sub-contract;
H (c) any matter in connection with the construction of the H
sub-contract.
I I
J J
8. Accordingly, the choice of law sentence applies to
K
construction issues only. What law is to be applied to other disputes it K
does not say.
L L
M 9. I reject this analysis. I am satisfied that the plain meaning of M
the first sentence is that “any dispute” shall be resolved by Hong Kong law
N N
which arises on :
O O
(a) the construction of the sub-contract;
P (b) any matter arising under the sub-contract; P
(c) any matter in connection with the sub-contract.
Q Q
R R
10. This is the submission advanced by Mr Charles Manzoni for
S the defendant. Thus, any matter “of whatsoever nature” is subject to S
Hong Kong law. Thus, the first thing the arbitration clause does is to
T T
state the applicable law.
U U
V V
由此
- 4 -
A A
11. The second sentence in clause 15 has no application to this
B B
issue.
C C
12. Mr Scott’s second argument concerns the third sentence.
D D
I set it out again :
E E
“… After determination, abandonment or completion of the
Sub-Contract Works (whichever is the later) the parties to this
F Sub-Contract shall refer the dispute or difference to arbitration F
which shall be submitted to the Hong Kong International
Arbitration Centre to be proceeded under its Domestic
G Arbitration Rules.” G
H H
13. Mr Scott submits that even if his argument on the
I I
first sentence is unsuccessful, this sentence means that only disputes which
J
arose after the end of the sub-contract, not during it, can be referred to J
arbitration.
K K
L 14. Again I disagree. Again Mr Manzoni’s interpretation is the L
correct one. This sentence plainly says that the time when “the dispute”
M M
(which can only be a reference to the expressions “any dispute” and “such
N dispute” in the first sentence) shall be referred to the Arbitration Centre is N
“after” … the completion of the contract.
O O
P 15. The result of Mr Scott’s interpretation of both sentences, P
taken together, would be that only issues of the construction of the
Q Q
sub-contract which arise after the completion of the contract shall be
R referred to arbitration. Everything else may be commenced by writ. R
The purpose of such a narrow arbitration clause defies commercial
S S
common sense.
T T
U U
V V
由此
- 5 -
A A
16. In my judgment there can be no real argument but that
B B
Mr Manzoni’s submissions are correct. Similar words have been
C
considered in previous cases. For example, in Ashville Investments v. C
Elmer Contractors Ltd [1988] 2 Lloyd’s Reports 73, Balcombe L.J said,
D D
quoting an almost identical clause :
E E
“… in case any dispute or difference shall arise between the
Employer … and the Contractor … as to the construction of this
F Contract or as to any matter or thing of whatsoever nature arising F
thereunder or in connection therewith … then such dispute or
difference shall be and is hereby referred to … arbitration …
G G
Thus there are referred to arbitration :
H H
(i) Any dispute or difference as to the construction of the
contract.
I I
(ii) Any dispute or difference as to any matter or thing of
whatsoever nature arising under the contract.
J J
(iii) Any dispute or difference as to any matter or thing of
whatsoever nature arising in connection with the contract.”
K K
L L
17. Mr Scott’s point that our Clause 15 is different from the above,
M
because it does not immediately say, at the conclusion of the first sentence, M
that “then such dispute shall be referred … etc.” is a point without
N N
substance. One only has to look two lines further on in the same single
O paragraph, 10 line, clause for such information. O
P P
18. The plain meaning of Clause 15 does however result in a
Q possible injustice to the plaintiff. By agreeing to Clause 15 a party cannot Q
refer an arbitration to the Arbitration Centre until the determination,
R R
abandonment or completion of the sub-contract (whichever is the later).
S S
19. This sub-contract originally concerned the supply, operation,
T T
maintenance and dismantling of a rock crushing machine. In the event,
U U
V V
由此
- 6 -
A A
and within the terms of the contract, the plaintiff’s role was limited to the
B B
supply, initial construction and ultimate dismantling of the machine. The
C
dismantling may not occur until November 2005 at the earliest. The C
plaintiff may have to wait some time before the dispute is resolved.
D D
E 20. However, having decided the issue of the proper meaning of E
Clause 15 it is not for this court to say more. If the plaintiff attempts to
F F
commence arbitration proceedings at an earlier stage (which Mr Scott has
G said they will, should they be unsuccessful on the stay application) it will G
raise issues for the arbitrator to decide not the court.
H H
I 21. I deliberately used the expression “a possible injustice” I
because Mr Manzoni has briefly suggested why there is in fact no injustice
J J
and why there were good commercial reasons for the clause being drafted
K in the way it was. However, I agree that the court is not concerned with K
such matters on the hearing of this summons.
L L
M 22. The decision on this summons is confined to this court’s M
interpretation of Clause 15. It does not fetter the Arbitrator’s power to
N N
rule on his or her own jurisdiction under Article 16 of the Model Law.
O O
23. I grant an order in the terms of the summons dated 25 July
P P
2003.
Q Q
R R
S ( M.P. Burrell ) S
Judge of the Court of First Instance,
High Court
T T
U U
V V
由此
- 7 -
A A
Mr John Scott, SC, instructed by Messrs Wong & Fok, for the Plaintiff
B B
Mr Charlie Manzoni, instructed by Messrs Lovells, for the Defendant
C C
D D
E E
F F
G G
H H
I I
J J
K K
L L
M M
N N
O O
P P
Q Q
R R
S S
T T
U U
V V
NEHLSEN HONG KONG LTD v. CHINA STATE CONSTRUCTION ENGINEERING (HONG KONG) LTD
由此
A A
HCCT63/2003
B B
IN THE HIGH COURT OF THE
C HONG KONG SPECIAL ADMINISTRATIVE REGION C
COURT OF FIRST INSTANCE
D D
CONSTRUCTION AND ARBITRATION PROCEEDINGS
E NO.63 OF 2003 E
F ------------------------- F
G
BETWEEN G
H
NEHLSEN HONG KONG LIMITED Applicant H
and
I I
CHINA STATE CONSTRUCTION Respondent
ENGINEERING (HONG KONG) LIMITED
J J
----------------------
K K
Before : Hon Burrell J in Chambers
L Date of Hearing : 3 November 2003 L
Date of Decision : 6 November 2003
M M
-----------------------
N N
DECISION
-----------------------
O O
1. This is an application to stay proceedings brought by the
P P
plaintiff by writ in favour of arbitration pursuant to section 6 of the
Q Arbitration Ordinance, Cap.341. Q
R R
2. Article 8 of UNCITRAL Model Law applies :
S S
“A court before which an action is brought in a matter which is
the subject of an arbitration agreement shall, if a party so
T T
requests not later than when submitting his first statement on the
U U
V V
由此
- 2 -
A A
substance of the dispute, refer the parties to arbitration unless it
finds that the agreement is null and void, inoperative or
B B
incapable of being performed.”
C C
3. In the present case the fact that a dispute exists is not
D D
challenged. Neither is it challenged that there is an arbitration clause in
E the sub-contract. The wording of the arbitration clause is important. It E
says :
F F
“DISPUTE RESOLUTION
G G
Any dispute that arises between the Main Contractor and the
Sub-Contractor, either during the progress or after the
H completion or abandonment of the Sub-Contract Works, on the H
construction of the Sub-Contract or any matter or thing of
I whatsoever nature arising thereunder or in connection therewith, I
then such dispute or difference shall be resolved according to the
law of the HKSAR. Unless the Sub-Contract has been
J determined or abandoned the Sub-Contractor shall continue to J
proceed with the Sub-Contract Works. After determination,
abandonment or completion of the Sub-Contract Works
K K
(whichever is the later) the parties to this Sub-Contract shall
refer the dispute or difference to arbitration which shall be
L submitted to the Hong Kong International Arbitration Centre to L
be proceeded under its Domestic Arbitration Rules. The award
of the arbitration shall be final and binding on the parties to the
M Sub-Contract.” M
N N
4. Article 8 provides for a mandatory stay if “the matter” i.e. the
O O
dispute, “is the subject of an arbitration agreement”.
P P
5. The dispute in this case concerns alleged shortfalls in
Q Q
payments by the defendant to the plaintiff and for prolongation costs.
R The dispute is not about the construction of the sub-contract. R
S S
T T
U U
V V
由此
- 3 -
A A
6. Mr John Scott SC, for the plaintiff, submits as his
B
first argument, that the arbitration clause only provides for “construction of B
C
the sub-contract” issues to be referred to arbitration. C
D D
7. He analyses the four sentences in Clause 15 separately. The
E first sentence, he submits, provides that Hong Kong law shall apply to any E
dispute concerning :
F F
(a) the construction of the sub-contract;
G G
(b) any matter arising under the construction of the sub-contract;
H (c) any matter in connection with the construction of the H
sub-contract.
I I
J J
8. Accordingly, the choice of law sentence applies to
K
construction issues only. What law is to be applied to other disputes it K
does not say.
L L
M 9. I reject this analysis. I am satisfied that the plain meaning of M
the first sentence is that “any dispute” shall be resolved by Hong Kong law
N N
which arises on :
O O
(a) the construction of the sub-contract;
P (b) any matter arising under the sub-contract; P
(c) any matter in connection with the sub-contract.
Q Q
R R
10. This is the submission advanced by Mr Charles Manzoni for
S the defendant. Thus, any matter “of whatsoever nature” is subject to S
Hong Kong law. Thus, the first thing the arbitration clause does is to
T T
state the applicable law.
U U
V V
由此
- 4 -
A A
11. The second sentence in clause 15 has no application to this
B B
issue.
C C
12. Mr Scott’s second argument concerns the third sentence.
D D
I set it out again :
E E
“… After determination, abandonment or completion of the
Sub-Contract Works (whichever is the later) the parties to this
F Sub-Contract shall refer the dispute or difference to arbitration F
which shall be submitted to the Hong Kong International
Arbitration Centre to be proceeded under its Domestic
G Arbitration Rules.” G
H H
13. Mr Scott submits that even if his argument on the
I I
first sentence is unsuccessful, this sentence means that only disputes which
J
arose after the end of the sub-contract, not during it, can be referred to J
arbitration.
K K
L 14. Again I disagree. Again Mr Manzoni’s interpretation is the L
correct one. This sentence plainly says that the time when “the dispute”
M M
(which can only be a reference to the expressions “any dispute” and “such
N dispute” in the first sentence) shall be referred to the Arbitration Centre is N
“after” … the completion of the contract.
O O
P 15. The result of Mr Scott’s interpretation of both sentences, P
taken together, would be that only issues of the construction of the
Q Q
sub-contract which arise after the completion of the contract shall be
R referred to arbitration. Everything else may be commenced by writ. R
The purpose of such a narrow arbitration clause defies commercial
S S
common sense.
T T
U U
V V
由此
- 5 -
A A
16. In my judgment there can be no real argument but that
B B
Mr Manzoni’s submissions are correct. Similar words have been
C
considered in previous cases. For example, in Ashville Investments v. C
Elmer Contractors Ltd [1988] 2 Lloyd’s Reports 73, Balcombe L.J said,
D D
quoting an almost identical clause :
E E
“… in case any dispute or difference shall arise between the
Employer … and the Contractor … as to the construction of this
F Contract or as to any matter or thing of whatsoever nature arising F
thereunder or in connection therewith … then such dispute or
difference shall be and is hereby referred to … arbitration …
G G
Thus there are referred to arbitration :
H H
(i) Any dispute or difference as to the construction of the
contract.
I I
(ii) Any dispute or difference as to any matter or thing of
whatsoever nature arising under the contract.
J J
(iii) Any dispute or difference as to any matter or thing of
whatsoever nature arising in connection with the contract.”
K K
L L
17. Mr Scott’s point that our Clause 15 is different from the above,
M
because it does not immediately say, at the conclusion of the first sentence, M
that “then such dispute shall be referred … etc.” is a point without
N N
substance. One only has to look two lines further on in the same single
O paragraph, 10 line, clause for such information. O
P P
18. The plain meaning of Clause 15 does however result in a
Q possible injustice to the plaintiff. By agreeing to Clause 15 a party cannot Q
refer an arbitration to the Arbitration Centre until the determination,
R R
abandonment or completion of the sub-contract (whichever is the later).
S S
19. This sub-contract originally concerned the supply, operation,
T T
maintenance and dismantling of a rock crushing machine. In the event,
U U
V V
由此
- 6 -
A A
and within the terms of the contract, the plaintiff’s role was limited to the
B B
supply, initial construction and ultimate dismantling of the machine. The
C
dismantling may not occur until November 2005 at the earliest. The C
plaintiff may have to wait some time before the dispute is resolved.
D D
E 20. However, having decided the issue of the proper meaning of E
Clause 15 it is not for this court to say more. If the plaintiff attempts to
F F
commence arbitration proceedings at an earlier stage (which Mr Scott has
G said they will, should they be unsuccessful on the stay application) it will G
raise issues for the arbitrator to decide not the court.
H H
I 21. I deliberately used the expression “a possible injustice” I
because Mr Manzoni has briefly suggested why there is in fact no injustice
J J
and why there were good commercial reasons for the clause being drafted
K in the way it was. However, I agree that the court is not concerned with K
such matters on the hearing of this summons.
L L
M 22. The decision on this summons is confined to this court’s M
interpretation of Clause 15. It does not fetter the Arbitrator’s power to
N N
rule on his or her own jurisdiction under Article 16 of the Model Law.
O O
23. I grant an order in the terms of the summons dated 25 July
P P
2003.
Q Q
R R
S ( M.P. Burrell ) S
Judge of the Court of First Instance,
High Court
T T
U U
V V
由此
- 7 -
A A
Mr John Scott, SC, instructed by Messrs Wong & Fok, for the Plaintiff
B B
Mr Charlie Manzoni, instructed by Messrs Lovells, for the Defendant
C C
D D
E E
F F
G G
H H
I I
J J
K K
L L
M M
N N
O O
P P
Q Q
R R
S S
T T
U U
V V