HKCFI 1841
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO 1316 OF 2018
||YUN KWAN CONSTRUCTION ENGINEERING LIMITED
||SHUI TAI CONSTRUCTION ENGINEERING COMPANY LIMITED
Before: Hon G Lam J in Chambers (not open to public)
Date of Hearing: 18 July 2019
Date of Decision: 18 July 2019
Date of Reasons for Decision: 23 July 2019
R E A S O N S F O R D E C I S I O N
1. The plaintiff is a company that carries on the business of steelworks for construction. The defendant is a construction company. By this action, the plaintiff sues the defendant for alleged outstanding sums under sub-contracts relating to 4 different projects. By the summons before me, the defendant seeks an order that further proceedings in the action in relation to 2 of the projects be stayed for arbitration. I shall refer to those 2 projects as “Project 1” and “Project 3” respectively, being the first and third projects referred to in the Statement of Claim. At the conclusion of the hearing I dismissed the summons with costs for reasons to be handed down. These are my reasons.
2. The sole issue is whether the arbitration clause contained in the contracts between the defendant and its own respective head contractors in the 2 projects has been incorporated into the corresponding contracts between the defendant and the plaintiff.
3. For present purposes, the relevant facts are not in dispute. In the case of the Project 1, which concerns a proposed residential and commercial development in Kai Tak:
(1) Konwall Construction & Engineering Co Ltd (“Konwall”) was the main contractor, who had entered into a main contract with the employer, Handy Solution Ltd, relating to hoarding, basement excavation and lateral support, foundation and pile caps. I shall refer to this as the “Employer-Konwall Contract”.
(2) By a contract letter dated 3 October 2015 and countersigned by the defendant on 5 October 2015, Konwall sub-contracted certain excavation and lateral support and RC works to the defendant. I shall refer to this as the “Konwall-D Contract”. Clause 7 of that letter expressly stated that a number of documents, including in particular the General Conditions of Sub-Contract (“GCSC”), shall form part of the contract.
(3) GCSC clause 18 provides:
“ 18.1 If any dispute arises between you and us in connection with the Sub-Contract, then either party shall give to the other notice in writing of such dispute and such dispute shall be referred to arbitration of such person as the parties may agree to appoint as the arbitrator in accordance with and subject to the provisions of the Arbitration Ordinance or any statutory modification thereof for the time being in force and any such reference shall be deemed to be a submission to arbitration, within the meaning of such Ordinance.
18.3 Any reference to arbitration under Clause 18.1 shall not be opened until after the completion or alleged completion of the Main Contract Works or termination of the Main Contract and the Sub-Contract without our written consent.”
(4) By a contract between the defendant and the plaintiff dated 30 September 2015 (“D-P Contract 1”), the defendant in turn sub-sub-contracted to the plaintiff part of the works. Clause 10 of the D-P Contract provides:
In English translation:
“ The Principal Contractor entered into a sub-contract with Party A to sub-contract the main works to Party A (Sub-Contract). Party B understands clearly that the works of this sub-contracting agreement were [all/part] of the Main Contract and Sub-Contract, and both parties agreed to the following terms.”
4. The contractual chain in Project 3, which concerns a proposed residential development in Tuen Mun, is similar:
(1) Vicon Construction Co Ltd (“Vicon”) had entered into a contract for foundation works. It is not clear whether this was entered into with the employer (Green Lotus Ltd) or the main contractor (New Concepts Foundation Ltd).
(2) By a letter of contract dated 4 March 2016, Vicon sub-contracted the earthwork to the defendant (“Vicon-D Contract”). Clause 2 of that letter states that the terms and conditions of the Standard Form of Domestic Sub-Contract (2008 Addition) published by the Hong Kong Construction Association shall apply (“SFDSC”).
(3) Clause 18 of the SFDSC provides as follows:
“ 18. DISPUTES
18.1 If any dispute or difference arises between the Sub-Contractor and the Contractor (together termed “the Parties” and either one termed “the Party”) in connection with this Sub-Contract, and if there exist within the Main Contract provisions allowing the reference of disputes or differences between the Contractor and the Employer to mediation and/or adjudication, then either party may request that the dispute or difference be referred to mediation or adjudication in accordance with whichever rules or other guide-lines for mediation or adjudication as may be specified in the Main Contract, or any modification thereof for the time being in force.
18.2 If either Party refuses such request for mediation or adjudication or if mediation or adjudication fails to resolve the dispute or difference then, within ninety (90) days of such refusal or failure or, should either Party not wish to refer the matter to mediation or adjudication or should there exist no such mediation and/or adjudication provisions within the Main Contract, such dispute or difference shall, subject to the provisions of this Clause, be referred to the arbitration and final decision of a single arbitrator in accordance with and subject to the provisions of Part II of the Arbitration Ordinance or any statutory modification thereof for the time being in force and any such reference shall be deemed to be a...