厦門新景地集團有限公司 formerly known as 厦門市鑫新景地房地產有限公司 v. ETON PROPERTIES LTD AND ANOTHER

cacv 106/2008 & CACV 197/2008

in the high court of the

hong kong special administrative region

court of appeal

civil appeal noS. 106 AND 197 of 2008

(on appeal from HCCT NO. 54 of 2007)

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D E C I S I O N

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1.  This is an application by the appellants themselves to stay two appeals.  The appeals are against decisions of Reyes J and they arise in this way.  There was an arbitration agreement and to put it as blandly as possible, it was for development of land and, in short, the party who I shall call “the applicant” for convenience but is actually the respondent to these appeals, was to develop the land which was in control of the respondents.

2.  The arbitration which arose in these circumstances, arose because the respondents, instead of passing the land over to the applicant, developed it themselves.  I am not going to go into the reasons why that happened and as to whether those were reasons which caused the land to be developed by the respondents were valid, because that is what happened.

3.  So the arbitration took place and it seems that, at that stage - the stage when the CIETAC Award was made - the original agreement could be put into effect one way or another.  The arbitration award was that first, RMB1,275,000 should be paid by the two respondents to the applicant and, secondly, that the respondents shall continue to perform the agreement that had been made in July 2003.  That is what happened.  Then application was made to enforce that CIETAC Award in Hong Kong and that application was acceded to.

4.  The first matter which came before Reyes J was on 31 March this year when there was an application by the respondents to admit the evidence of Mr Zhong Gang.  That application fell on very unsympathetic ears and Reyes J seemed to have very little difficulty in rejecting that application.

5.  That decision of Reyes J is the subject of the first appeal and that appeal has been set down for three hours on 23 December.  Then Reyes J heard what would really be the substantive matter to set aside the enforcement and he heard that on 24 June.  Again he dismissed that application, and that is the subject of the second appeal.  The estimate of time for that has been given as two hours.  I think that the two estimates are probably the wrong way round but, be that as it may, it does not matter, no date has been fixed for that appeal.  In my view - and I don't think counsel disagree with this - those two appeals should really come on at the same time.  It would make a nonsense to have them heard at different times.

6.  Since the date of the CIETAC Arbitration Award, it appears that a number of things have happened including that the land continued to be developed by the respondents, the residential premises were completed and apparently have been sold.  Also the respondents themselves have undergone some kind of reconstruction and it is said that, amongst other things, those matters caused the arbitration award to be unenforceable.  I am not sure that those arguments really carry very much weight because what has to be considered is whether or not the arbitration award should be enforced.

7.  The respondents have apparently commenced new arbitration proceedings under the CIETAC provisions.  My attention has been drawn to the terms of that.  The first claim is to order the termination of the agreement entered into by the applicants in 2003 and then there is a request for orders for payment by the parties that I shall call the applicants to the respondents of a sum of RMB6 million.

8.  Mr Yu SC who has appeared on behalf of the appellants, the respondents, today, indicated what is sought on that arbitration.  It seems to me to be a very substantial amendment to that arbitration application.  What happens there, I do not know.

9.  But all in all, the first approach I have is that one of the reasons that people go to arbitration is, first of all, that there is a certain amount of confidentiality attached to arbitration awards - that seems to have gone by the board; and, secondly, that the matter is dealt with expeditiously.  The way this is going is it is anything but expeditious.

10.  It seems to me that the long and short of this application is this:  that if the appellants wish to continue with their appeal, they must do so and it must be done probably on the basis of the circumstances which prevailed, certainly at the date of the arbitration award and possibly date of the seeking to enforce it and, whatever happens, if they wish to continue with further arbitrations under the CIETAC provisions, that is a matter for them.

11.  This is really a case of enforcement of an arbitration award.  In my view, it would be wrong for the court in this jurisdiction to delay matters now so that when the matter comes before CIETAC in the new arbitration proceedings, the matter is still in abeyance and the arbitrators there will be told, “Well, there’s an appeal which is still pending in Hong Kong,” and this, that and the other.

12.  In my view, it is the duty of this court to decide whether or not the arbitration award should be enforced and the quicker that is done, the better.  It would be a wrong approach to arbitration and enforcing arbitration awards to leave this matter over any longer than is necessary.

13.  So, in my view, on the time estimates that have been given todate, these two appeals should be heard together and there seems to be, looking at the diary, no reason why they should not be heard on 23 December.  I, however, am not going to fix the date.  That will have to be left to those who have a responsibility for fixing the date and I can foresee some sort of argument that the whole matter should be put off till some future date when this, that, or the other person who is not in front of this court today might or might not be available to conduct that appeal.  But I think I see no reason from the court’s point of view why this should not all take place on 23 December, inconvenient for the court though it may be.

14.  I therefore dismiss these two applications with costs.