ALLIED KAJIMA LTD v. HIP HING CONSTRUCTION CO LTD

IN THE HIGH COURT OF HONG KONG

COURT OF FIRST INSTANCE

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JUDGMENT

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The Background

1. The parties are involved in an arbitration. The applicant is unhappy with the way the arbitration is being conducted. On 24 April 1997, the applicant issued an originating summons and a notice of motion, both aimed at getting rid of the arbitrator appointed. Mr Pow says that the originating summons is misconceived, and the applicant does not wish to proceed with it. He asks for leave to discontinue those proceedings. Mr Pow says that this summons has no costs implications. This may or may not be so, but there is no doubt that the respondent is entitled to an order for costs on this summons, and I so order. The Taxing Master will decide if additional costs have been incurred thereby.

The Notice of Motion

2. The notice proceeds on the basis that the arbitrator has been guilty of misconduct, albeit, Mr Pow says, of the technical kind. Broadly, the applicant's complaints may be put into four categories -

Jurisdiction

3. The applicant says that the dispute submitted to the arbitrator was whether or not the respondent was entitled to interest on the sum of $200,000, but the arbitrator has indicated an intention to decide whether or not interest was due on a sum of $797,500. The applicant says that there was an agreement that the dispute was limited to the question of interest on $200,000.

4. The applicant challenged the arbitrator's jurisdiction on this matter after the points of claim and points of defence had been filed. The arbitrator was entitled to decide this matter of jurisdiction, and did so. The arbitrator was entitled to decide the matter in this way. In any event, the points of claim made it quite clear that the respondent was claiming interest on the sum of $797,500, and the points of defence took issue with this, without raising any question of jurisdiction. In essence, by their pleadings, the parties submitted the dispute regarding interest on the larger sum to the arbitrator.

5. I do not see any grounds for any allegation of misconduct here.

The Provisional View

6. On 20 March 1997, the applicant wrote to the arbitrator saying that it intended to seek relief from the courts, and suggested that, in the meantime, the arbitrator did not proceed with the award. On 21 March 1997, the respondent wrote to the arbitrator saying that it wished the arbitrator to proceed with the award. The arbitrator wrote to both parties in response. The allegation of misconduct centres on this letter. The part of the letter about which complaint is made reads -

"I hereby advise the parties, that I intend to proceed to an interim award, subject to any objection from the Claimant in support of that of the Respondent."

7. The applicant says that these words could be read as saying that the arbitrator intended to proceed to an interim award in its favour, and this would have left the award open to attack. This is nonsense. It is simply not possible to read the arbitrator's statement as saying this. The words are "in support of that of the Respondent" (my emphasis), and this can mean only in support of the objection. The paragraph means, and can only mean, that the arbitrator intends to proceed, unless both parties agree.

8. There is no possible ground here for an allegation of misconduct.

The Architect's Report

9. This was, or was supposed to be a quick, cheap arbitration on documents only. The applicant's conduct sought to turn the procedure into major exercise that would have been anything but cheap and quick. The arbitrator exercised a discretion to refuse to receive an architect's report. The applicant persisted in badgering the arbitrator to receive the report. The arbitrator, somewhat reluctantly in view of the costs, sought legal advice.

10. The applicant complains about this. I cannot understand why. There is certainly no basis here at all for the suggestion of misconduct.

The Closing of Submissions

11. The arbitrator received all the submissions I would have expected in this type of arbitration. Eventually, the arbitrator said that "No further uninvited submissions shall me made". A line was drawn. A line had to be drawn. In the light of the appellant unseemly enthusiasm for enlarging this arbitration beyond reasonable bounds, I am not at all surprised that the arbitrator drew the line where it was drawn.

12. I cannot see, on this basis, any reasonable ground for suggesting misconduct.

The Result

13. In the result, I can find no grounds for the alleged misconduct. The application is dismissed, with costs to the respondent.