WONG KING CHUEN AND ANOTHER v. THE HONG KONG FOOTBALL ASSOCIATION LTD

HCA 1333/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1333 OF 2007

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J U D G M E N T

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1.  This is an application by the defendant to stay the action of the plaintiffs in favour of arbitration pursuant to article 8 of the Model Law. 

2.  The only real issue between the parties is whether there exists an arbitration agreement under the relevant articles in the articles of association of the defendant to refer the disputes between the parties to arbitration.  There is no dispute that if such an arbitration agreement exists, the existing disputes between the parties fall within the scope of the relevant articles.  They can be found in articles 65 to 67 of the articles of association of the defendant and they read:

“	65.	The Association shall create an Arbitration Tribunal which shall deal with all internal domestic disputes between the Association, its members, players, officials and match and players’ agents that do not fall under the jurisdiction of its judicial bodies.  The board shall draw special regulations regarding the composition, jurisdiction and procedural rules of this Arbitration Tribunal.
	66.	The Association, its members, players, officials and match and players’ agents will not take any disputes to the ordinary court unless specifically provided for in these Articles and FIFA Regulations.  Any disagreement shall be submitted to the jurisdiction of FIFA, AFC or the Association.
	67.	The Association shall have jurisdiction on internal domestic disputes, i.e. disputes between parties belonging to the Association.  FIFA shall have jurisdiction on international disputes, i.e. disputes between parties belonging to different associations and/or confederations.”

3.  There is no doubt that the disputes in question fall within the definition of internal domestic disputes to be dealt with by the defendant and the arbitration tribunal, assuming that there exists an arbitration agreement between the parties.  The only substantive point taken by Mr Albert Yau, counsel for the plaintiffs, is that no such arbitration agreement has yet come into existence.  His general submission is that essentially, an arbitration agreement takes away a party’s constitutional right of access to the courts and, therefore, an agreement must be unequivocal and clear before it will be construed as an arbitration agreement. 

4.  In the context of the relevant articles, Mr Yau’s contention is that unless and until an arbitration tribunal is set up by the defendant pursuant to article 65, the relevant articles have not “matured”, in counsel’s word, into an arbitration agreement.  In this context, I should add that after the disputes between the parties arose and indeed after the commencement of action, the board of the defendant has adopted the relevant arbitration rules of the Football Association of the United Kingdom as the defendant’s relevant arbitration rules, which rules include provisions regarding the composition, jurisdiction and procedural rules of setting up an arbitration tribunal to deal with disputes.  Mr Yau’s point remains that until the arbitration tribunal, referred to in article 65, is set up pursuant to those rules, which apparently counsel does not take issue with, there is no arbitration agreement.

5.  I have carefully listened to counsel’s submission.  If I may say so with respect, counsel has said everything that he possibly could on behalf of his client in resisting the application, but I am unable to agree with his submission. 

6.  I do not see the fact that the arbitration tribunal is yet to be set up as an obstacle to the coming into existence of a valid and binding arbitration agreement.  In my view, once the Islands District Sports Association became a full member of the defendant, there came into existence pursuant to articles 65 to 67 of the articles of association of the defendant a valid and binding arbitration agreement.  Fairly often, in an arbitration clause the parties merely agree to refer their future differences and disputes to arbitration by a tribunal to be set up and in accordance with rules to be decided either by the tribunal or by someone else.  I have never heard that such type of arrangement would render the arbitration clause non-existent until and unless the tribunal is set up or, for that matter, the rules of arbitration are determined. 

7.  In this regard, I note that under article 8 of the Model Law the court has no discretion not to order a stay of proceedings in favour of arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed. 

8.  In my view, the point made by counsel is more relevant to, in appropriate circumstances, whether the arbitration agreement is inoperative or incapable of being performed.  So, for instance, if the circumstances were such that no arbitration tribunal could be set up or that no acceptable regulations regarding the composition, jurisdiction or procedural rules of the tribunal could be determined upon, one could perhaps argue that the court should not refer the parties to arbitration because the agreement was inoperative or incapable of being performed.  But even in such circumstances, one would not elevate the difficulties faced in the path of arbitration to the level of there being no arbitration agreement in existence.

9.  I have, of course, borne in mind Mr Yau’s general point that an arbitration agreement, in the final analysis, takes away the parties’ constitutional right of access to the courts.  Therefore, an agreement to arbitrate must be clear and unequivocal.  I have no difficulty with these propositions.  Having considered the relevant articles, I have no doubt that they are clear and unequivocal.  In other words, there is a valid and binding arbitration agreement, in my view, within which the present disputes fall. 

10.  In those circumstances, as required by article 8 of the Model Law, the disputes must be referred to arbitration and the present action must be stayed for that purpose.