DICKSON CONSTRUCTION CO LTD v. SCHINDLER LIFTS (HK) LTD AND ANOTHER

1992 No. MP 545

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN

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J U D G M E N T

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1. On 28th May 1992, I dismissed Dickson Construction Co. Ltd.'s application to consolidate their arbitration with Schindler Lifts together with their arbitration with the Attorney General. I said I would briefly reduce my reasons into writing which I now do.

2. On 29th May 1985, the Attorney General as employer entered into a main contract with Dickson as main contractor for certain works to be carried out at Kai Tak Airport. It was a substantial contract.

3. On 21st October 1986, Dickson entered into a nominated sub-contract with Schindler in relation to various lift and escalator works at the airport.

4. Disputes arose in both the main contract and the sub-contract. On 19th June 1991, His Honour Judge Leonard (as he then was) appointed Dr. John Uff Q.C. as the arbitrator in the sub-contract arbitration. Subsequently, I appointed Dr. Uff as arbitrator in the main contract arbitration.

5. Dickson applied under s.6B of the Arbitration ordinance that both arbitrations be heard at the same time. In fact the summons seeks a formal order for consolidation but no point was taken on this and, in any event, consolidation is a useful composite term for the various orders which the court can make under that section.

6. The grounds of the application are in common form. Mr. K.M. Chong for Dickson submits that consolidation will be cheaper for his clients and will avoid inconsistent findings of fact and multiplicity of proceedings.

7. To some extent, the risk of inconsistent findings of facts is greatly reduced by the fact that the arbitrator in both arbitrations is the same person. I accept, of course, that the evidence might be different, but nevertheless, I think it appropriate to attach only a little weight to this consideration.

8. This application is opposed by both Schindler for whom Mr. John Scott appears, and by the Attorney General for whom Mr. Patrick O'Sullivan appears. The mere fact of their opposition is not conclusive as I must consider the reasons put forward by them.

9. The main contract arbitration involves a claim of approximately $7,000,000. Mr. O'Sullivan, supported by Mr. Scott, estimates that it is likely to last some 2 to 3 months. Mr. Chong takes issue with this estimate but his counter estimate is so absurdly short that I can give it little credence. I prefer to rely on Mr. O'Sullivan's estimate.

10. The sub-contract arbitration involves a claim for some HK$700,000. Mr. Scott estimates that it would take weeks rather than months. On behalf of his clients he is horrified at the prospect of being joined into a larger and longer arbitration which may last for some 3 to 4 months.

11. Both Mr. Scott and Mr. O'Sullivan submitted that, despite Mr. Chong's attempt to submit otherwise, the issues of fact and law in the two arbitrations are not sufficiently similar or connected to justify the order sought. The pleadings are voluminous and in the short time available, it was not possible for me to delve deeply into them. However, taking into account the various matters raised by Mr. Scott and Mr. O'Sullivan, I am not persuaded that there is sufficient connection between the two disputes so as to justify the order sought. I take into account that the burden is on Dickson to establish sufficient connection and, in my judgment, they have not discharged this burden.

12. Another feature of this application that has caused me considerable concern is that although neither arbitration has been set down for a hearing, the sub-contract arbitration is virtually ready for dates to be fixed. I have been shown correspondence from Dr. Uff's clerk which indicates that, due to his other commitments, he will be unable to sit on either arbitration (or a consolidated one) from more than a few weeks each year. If I were to order consolidation, I would effectively be preventing Schindler from getting their arbitration determined for some considerable time perhaps some two years. Given the size of Schindler's claim and the likely length of their arbitration, it would, in my judgment, be grossly unfair to Schindler if I bought about such a delay. Mr. Scott referred me to, and I note, that Dickson appears to have given Dr. tiff's clerk a somewhat unrealistic time estimate, and indeed, had he been told what I have been told about the length of these arbitrations, he might well have declined to accept appointment.

13. Mr. Scott also submitted that the papers show that Dickson have adopted a policy of obstruction, and delay which should also be a factor against making the order sought. He referred me to the lateness with which Dickson served a list of documents which led to an application before me which came on immediately prior to this application for consolidation. Not only were they four months late in filing the list but Mr. Scott submits that it is virtually identical to the list served by Schindler, therefore there is no excuse whatsoever for such delay.

14. I think there is some force in Mr. Scott's submissions on this point, but they do not weigh too heavily with me.

15. At the end of the day, the major factors that persuade me not to make the order are the delay the consolidation will cause to Schindler and the insufficiency of the factual and legal connection between the two arbitrations. Mr. O'Sullivan estimated that the main contract arbitration, which is nowhere near ready, would not in fact be ready for some two years. This would cause considerable hardship to Schindler and I am not prepared to permit this. I further take into account that if these two arbitrations were heard together Schindler would be forced to sit through a considerable amount of evidence and submissions which did not concern them and which would inevitably increase their exposure to costs.

16. Mr. Scott also raised what he termed conceptual problems such as who would be claimant in a consolidated arbitration, but this is always a problem in matter of this nature and one has to leave it to the good sense of the arbitrator or judge.

17. For all the reasons given, I do not think it would be just or fair to make the order sought, and in the exercise of my discretion under s.6B I dismiss; this Originating Summons. Dickson will pay the costs of both Schindler and the Attorney General.