LEONONE 3D ELECTRICAL ENTERPRISES CO LTD v. TGI (FAR EAST) LTD

HCMP 2522/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2522 OF 2013

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D E C I S I O N

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1. I am not satisfied that there is a serious issue to be tried as to whether the court should on the facts of this case exercise its jurisdiction to rule on whether there is a valid arbitration agreement in force between the parties. Even if there was a serious question to be tried, on a balance of convenience and the risk of doing injustice to any party, I consider that this is not an appropriate case to grant the interlocutory injunction sought by the plaintiff, to restrain the defendant from proceeding with Arbitration Case number HKIAC/13103 (“Arbitration”).

2. I cannot see how it can be said that the plaintiff cannot be adequately compensated by damages in respect of any loss caused by the court’s refusal to grant the injunction.  The plaintiff can ask the arbitrator, in the arbitration proceedings which have already commenced, to determine the issue of whether there is an arbitration agreement, and to extend time for the filing of the defence in the Arbitration.  If the arbitrator rules against the existence of an arbitration agreement, the parties can come back to the court for the determination of their dispute.  Any costs said to be wasted are monetary and can be compensated.  Any delay can likewise be compensated by damages, or an award of interest.

3. There is no evidence, apart from the plaintiff’s bare assertion, that the defendant is not in a position to pay any damages.

4. The defendant already started the Arbitration in July 2013, before the issue of the Originating Summons in these proceedings on 27 September 2013. The arbitrator was already appointed on 9 September 2013, and I do not envisage any difficulty in the parties’ seeking a determination from the arbitrator on the preliminary issue of the existence of the arbitration agreement, and the time for the filing of the defence.  The arbitrator already declined the plaintiff’s application to stay the Arbitration, and indicated that the Arbitration would proceed.

5. The delay since the commencement of the Arbitration in July 2013 in seeking relief from this court only strengthens the argument of the lack of necessity for the interlocutory injunction sought.

6. To grant the injunction asked for by the plaintiff in these proceedings now would be to undermine the arbitration process and the credibility of the entire arbitration system of facilitating the speedy and effective resolution of disputes in a manner of the parties’ choice, and is tantamount to encouraging parties to shop for venue and abusing the court process when there is an available arbitrator to determine the issue in the dispute.

7. Nor am I satisfied that the defendant can be adequately compensated in damages if the grant of the interim injunction is proved to be wrong, since the plaintiff is not resident within the jurisdiction of Hong Kong and has not produced evidence of its financial worth.

8. For these reasons, I dismiss the plaintiff’s application for interim injunction to restrain the defendant from taking further steps in the Arbitration already commenced.  The plaintiff is to pay the defendant’s costs of the application for injunction.