MAEDA KENSETSU KOGYO KABUSHIKI KAISHA also known as MAEDA CORPORATION AND ANOTHER v. BAUER HONG KONG LTD

MAEDA KENSETSU KOGYO KABUSHIKI KAISHA also known as MAEDA CORPORATION AND ANOTHER v. BAUER HONG KONG LTD

The Measurement Rules, read in their contractual and commercial context, should not be amended; M12C's 'measurable core' definition does not apply to M12D (M12C was directed to classification of Rock Class A and B only), and Category 1(d) rock does not fall within the definition of 'bedrock' for purposes of M12D; the Arbitrator's re‑writing of the MRs to treat 1(d) as bedrock was incorrect but importing RQD30 into M12D was impractical and contrary to commercial sense.

Citation
[2018] HKCFI 1057
Parties
1st Plaintiff (1st Respondent in the Arbitration): MAEDA KENSETSU KOGYO KABUSHIKI KAISHA (also known as MAEDA CORPORATION); 2nd Plaintiff (2nd Respondent in the Arbitration): CHINA STATE CONSTRUCTION ENGINEERING (HONG KONG) LIMITED; Defendant (claimant in the Arbitration): BAUER HONG KONG LIMITED
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
18 May 2018
Case Number
HCCT35/2016
Procedural Posture
Appeal From Arbitration Under the Arbitration Ordinance (cap. 609); Construction and Payment Dispute in a Construction Subcontract / Judgment on Substantive Appeal (hearing 23–25 April 2018; Judgment 18 May 2018)
Outcome
Appeal allowed in part and dismissed in part: court refused to amend the Measurement Rules; held M12C does not apply to M12D; held Category 1(d) rock is not 'bedrock' for M12D; mixed result on the grounds of appeal.
Legal Topics
Contract Interpretation, Measurement Rules for Payment, Founding/bedrock Classification, Quantum of Payment Under Subcontract, Leave to Appeal Procedure, Costs Apportionment
Source Language
EN
Contract Law Construction Law Arbitration Law Civil Procedure Commercial Law Contract Interpretation Measurement Rules for Payment Founding/bedrock Classification +3 more

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Parties

MAEDA KENSETSU KOGYO KABUSHIKI KAISHA (also known as MAEDA CORPORATION)

1st Plaintiff (1st Respondent in the Arbitration)

CHINA STATE CONSTRUCTION ENGINEERING (HONG KONG) LIMITED

2nd Plaintiff (2nd Respondent in the Arbitration)

BAUER HONG KONG LIMITED

Defendant (claimant in the Arbitration)

Procedural Posture

Appeal From Arbitration Under the Arbitration Ordinance (cap. 609); Construction and Payment Dispute in a Construction Subcontract / Judgment on Substantive Appeal (hearing 23–25 April 2018; Judgment 18 May 2018)

Legal Issues

  1. 1 Whether Diagram C1 legend wording should refer to 'Bedrock level' rather than 'Founding levels determined by Engineer' and whether 'theoretical bedrock lines' wording should be amended
  2. 2 Whether definition of 'measurable core' in M12C applies to M12D (i.e. whether RQD 30 and 85% core recovery requirements apply to measurement of 'toe in to rock')
  3. 3 Whether 'Bedrock' in M12D includes Category 1(d) material

Ratio Decidendi

The Measurement Rules, read in their contractual and commercial context, should not be amended; M12C's 'measurable core' definition does not apply to M12D (M12C was directed to classification of Rock Class A and B only), and Category 1(d) rock does not fall within the definition of 'bedrock' for purposes of M12D; the Arbitrator's re‑writing of the MRs to treat 1(d) as bedrock was incorrect but importing RQD30 into M12D was impractical and contrary to commercial sense.

Court Disposition

Appeal allowed in part and dismissed in part: court refused to amend the Measurement Rules; held M12C does not apply to M12D; held Category 1(d) rock is not 'bedrock' for M12D; mixed result on the grounds of appeal.

Orders

  • Order that no amendment of the Measurement Rules is justified
  • Order that M12C does not apply to M12D