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Atkins China Ltd v China State Construction Engineering (Hong Kong) Ltd

Judgment Cited authorities 2 Cited in Precedent Map Related
Vincent
Judgment Date14 August 2020
Neutral Citation[2020] HKCFI 2092
Year2020
Judgement NumberHCMP1193/2020
Subject MatterMiscellaneous Proceedings
CourtCourt of First Instance (Hong Kong)
HCMP1193/2020 ATKINS CHINA LTD v. CHINA STATE CONSTRUCTION ENGINEERING (HONG KONG) LTD

HCMP 1193/2020

[2020] HKCFI 2092

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1193 OF 2020

____________

IN THE MATTER of an application for a declaratory judgment pursuant to Order 15, rule 16 of the Rules of the High Court Cap 4A

and

IN THE MATTER of an agreement of final account dated 20 December 2019 between ATKINS CHINA LIMITED and CHINA STATE CONSTRUCTION ENGINEERING (HONG KONG) LIMITED

and

IN THE MATTER of an application for an injunction pursuant to Section 21L of the High Court Ordinance Cap 4

_____________

BETWEEN
ATKINS CHINA LIMITED Plaintiff

and
CHINA STATE CONSTRUCTION ENGINEERING (HONG KONG) LIMITED Defendant

____________

Before: Hon Au-Yeung J in Chambers
Date of Hearing: 14 August 2020
Date of Decision: 14 August 2020

_____________

D E C I S I O N

_____________

Introduction

1. The originating summons in this case seeks (i) a declaratory judgment that as a matter of construction a settlement agreement entered into between the parties have settled all claims and counterclaims arising under a design agreement; and (ii) a final injunction restraining the Defendant from taking further steps in the arbitration proceedings commenced in the name of the Defendant by its insurers.

2. The originating summons was issued on 11 August 2020. The present summons for an interim injunction to stay the arbitration proceedings pending resolution of the originating summons was also issued on the same date.

3. However, the summons was served (with the originating summons) on 11 August 2020, at 6:00 pm. There were less than 2 clear days before this hearing. Accordingly, although the Defendant has appeared by counsel today, this can only be treated as an ex parte application on notice.

Background

4. The Plaintiff and the Defendant had signed a design agreement dated 27 August 2012 (“Design Agreement”) whereby the Plaintiff was appointed to design permanent structures of certain sections of the Hong Kong Zhuhai-Macao Bridge, including reclamation works and construction of a seawall (“Project”). The Defendant would proceed with construction after approval of the Plaintiff’s design. There was an arbitration clause which required the parties to refer disputes arising out of or in connection with the Design Agreement to arbitration.

5. Pursuant to the Design Agreement, the Plaintiff did design and the Defendant did erect various structures.

6. In October to November 2014, certain instability incidents occurred at the Project as a result of which part of the seawall in the area collapsed and was submerged in the sea. The Plaintiff was owed money in respect of unpaid variation orders.

7. Thereafter, negotiations ensued between the parties between 2015 and 2018 culminating in a settlement agreement on 23 December 2019 under which the Defendant would pay the Plaintiff HK$10,000,883.65 (“Settlement Agreement”).

8. It was a term of the Settlement Agreement that,

“[The Defendant] and [the Plaintiff] hereby unanimously and irrevocably agree[d] to the Final Design Agreement Value for the said Design Agreement, this being in full and final settlement of all Variation Works claims, counterclaims, and contra-charges between [the Defendant] and [the Plaintiff] howsoever arising under the Design Agreement.” (emphasis added)

The Settlement Agreement did not contain an arbitration clause.

9. Upon execution of the Settlement Agreement, the ongoing settlement discussions and negotiations came to an end. The payment had been made to the Plaintiff.

10. Seven months later, the Defendant, by its insurers (China Overseas Insurance Limited) served on the Plaintiff a Notice of Arbitration dated 22 July 2020. According to the Notice of Arbitration, the claims in the arbitration arise from a dispute between the Plaintiff and the Defendant in relation to the Plaintiff’s defective design under the Design...

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