CLOUT
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Original in English

Excerpts of judgement in Doyles dispute resolution practice: Asia, Pacific in 1 volume. North Ryde, N.S.W.: CCH International, c1990-Tab 80-036, p.80, 661-80 and in: Yearbook Commercial Arbitration, (Deventer, Netherlands, Kluwer) vol. XVII, 1992, p. 289-303.

Commented on in: Doyles ADR update 5: 4-5, 28 February 1992, and by Pryles, World Arbitration and Mediation Report 2:12:329 (December 1991).

(Abstract prepared by the Secretariat)

The plaintiff, a Hong Kong company, asked the court to appoint a second arbitrator, relying on a contract with another Hong Kong company that contained an arbitration clause. The contract was for the sale of soybean extraction meal FOB Dalian; Dalian, which is in China, was stated to be the place of delivery. The defendant, asserting that there was no valid contract since the person who had signed had no authority to bind it, contended that an arbitrator had no jurisdiction to rule on whether or not a contract had been concluded. Even if an arbitration agreement existed, the arbitration would be domestic and thus have to be conducted by a sole arbitrator.

The court determined the arbitration to be international pursuant to article 1(3)(b)(ii) of the Model Law as enacted by the Hong Kong Arbitration (Amendment) (No.2) Ordinance, 1989. It regarded delivery (which was to take place outside Hong Kong) as "a substantial part of the obligations of the commercial relationship", without ignoring that payment and nomination of the vessel (which were to take place in Hong Kong) were also important obligations in a contract of sale.

The court refused to deal with the question of whether a valid contract had been concluded since, according to article 16 MAL, it was first for the arbitral tribunal to decide on its jurisdiction. Recognizing the autonomy or separability of the arbitration clause except in the case of ab initio illegality of the contract (with references to English law), the court stated that the decision of the arbitral tribunal was neither final nor exclusive but subject to immediate review under article 16(3) MAL.

In making the appointment under article 11(5) MAL, the court deemed it important that when "appointing on behalf of the defaulting appointing party, it should go out of its way to ensure that no sense of grievance is felt, however unreasonable that attitude might appear to others".

This case is cited in Case 39 and Case 58.

Additional Information published in later CLOUT issue (on "24 May 1994"):

    Summary published: Yearbook XVIII-1992, International Council for Commercial Arbitration, 11

Additional Information published in later CLOUT issue (on "14 October 1994"):

    Summarized and commented on by Kaplan, Spruce and Moser in Hong Kong and China Arbitration, Cases and Materials, Butterworths, 1994.

    Excerpts published in [1992] 1 Hong Kong Law Reports (HKLR), 40.

Additional Information published in later CLOUT issue (on "9 February 2000"):

Abstract published in English: [1995] Model Arbitration Law Quarterly Reports, Vol. 1, issue 2, 55

Text of the court decision published in English: [1995] Model Arbitration Law Quarterly Reports, Vol. 1, issue 2, 59

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