ZEBRA INDUSTRIES (OROGENESIS NOVA) LTD v. WAH TONG PAPER PRODUCTS GROUP LTD

HCMP 2044/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 2044 OF 2008

(ON AN INTENDED APPEAL FROM HCA NO. 1551 OF 2004)

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Before: Hon Tang VP and Sakhrani J in Court

Date of Hearing: 8 January 2009

Date of Judgment: 8 January 2009

Date of Reasons for Judgment: 15 January 2009

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REASONS FOR JUDGMENT

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Hon Tang VP (giving the reasons for judgment of the Court):

1.  The plaintiff’s claim was commenced on 2 July 2004.  On 9 July 2004, the defendant applied, pursuant to section 6 of the Arbitration Ordinance, Cap. 341, for the action to be stayed for arbitration.

2.  Burrell J decided on 17 December 2004 that the action should be stayed for arbitration.  At the time, the plaintiff was represented by its director Mr Elijah Saatori.

3.  There followed unsuccessful applications to leave to appoint Mr Saatori to represent the plaintiff for the purpose of an appeal.  There is a decision of Mr Registrar C Chan which explained why leave was refused on 14 February 2005.

4.  On 17 October 2008, the plaintiff applied for leave to appeal out of time.  That was refused by Rogers VP on 3 November 2008.  He refused leave essentially because of the almost 4 years delay.

5.  At the hearing before Rogers VP, the plaintiff was represented by counsel.

6.  At the hearing before us, the plaintiff was represented by Mr Adrian Bell.  He relied in particular on what the learned Vice President said in para. 2 of his decision:

“2.    Had it not been for the delay I might have given leave to appeal in this matter because I am not sure that the so-called agreement to arbitrate really was enforceable.  In any event, it seems to me clearly arguable that the Defendant in this matter has no intention of arbitrating.”

7.  Mr Bell, in his helpful written and oral submission, emphasized that Rogers VP had not expressed any view as to the reasons for the delay or why such reasons might not provide the basis for the plaintiff’s application for leave to appeal out of time to succeed, in particular, that the reasons for delay was because the plaintiff was unable:

“… through lack of funds (due to the defendant’s actions) to obtain the services of counsel until recently, and the plaintiff was therefore blameless in failing to pursue its appeal diligently and was in effect prevented from appealing”.

8.  We have no doubt that the decision of Rogers VP cannot be faulted. 

9.  With respect, if we were to exercise our discretion, we would also refuse leave to appeal.  We have carefully considered the decision of Burrell J, and do not believe that an appeal has any reasonable prospect of success. 

10.  The clause of the contract which was relied on for the stay provided as follows:

“Clause 5 of the contract stated:

‘This Agreement will be construed under the Laws Governing Hong Kong SAR. In the unlikely event of any breach or conflict, the Parties hereby agree to use every resource available to reconcile any disputes or breaches, in the spirit of friendship and integrity.

In the unlikely event of inability to resolve or reconcile any issues that may arise from the smooth implementation of this Agreement, the parties hereby agree to employ the use of a professional, third party Christian Arbiter to resolve the issue, with such decision being final …’”

We do not agree that this is not enforceable.

11.  Mr Bell submitted that by letter dated 28 May 2004, Messrs W. K. To & Co, solicitors for the defendant, had repudiated the agreement to arbitrate even if there had been an agreement to arbitrate when Messrs W. K. To & Co wrote in a letter marked without prejudice that:

“Our client will not agree to another arbitration.  There is already the arbitration decision of Mr Edwin Leung.”

12.  This argument had not been raised before Burrell J.  In any event, we do not believe that leave should be granted at such a late stage to enable the plaintiff to raise a new argument which at best is barely arguable.

13.  Mr Bell also submitted that the defendant would suffer no prejudice if leave to appeal out of time was granted.  We do not agree.  To be vexed with an appeal, almost 4 years after the order was made is prejudice enough.

14.  For the above reasons, we have dismissed the application.