TERRAFORM ENGINEERING COMPANY LTD. v. FULL WEALTH INVESTMENT LTD.

TERRAFORM ENGINEERING COMPANY LTD. v. FULL WEALTH INVESTMENT LTD.

The award was set aside because the arbitrator exceeded his lawful powers by granting extensions of time absent contractual authority, wrongly implied the word 'reasonable' into clear express clauses, misconstrued a supplementary clause that allocated risk of approval delays to the plaintiff, and failed to apply the contractual time-bar; additionally the ex parte enforcement order was set aside and indemnity costs ordered because the plaintiff did not disclose the defendant's pending leave application and reasonable offers to secure the award.

Citation
TERRAFORM ENGINEERING COMPANY LTD. v. FULL WEALTH INVESTMENT LTD.
Parties
Claimant and Plaintiff: Terraform Engineering Company Limited; Respondent and Defendant: Full Wealth Investment Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
19 June 1998
Case Number
HCCT28/1998
Procedural Posture
Arbitration Appeal and Enforcement / Leave to Appeal; Appeal Heard in Chambers; Application to Set Aside Enforcement Order
Outcome
Leave to appeal granted; appeal allowed; arbitrator's award set aside; enforcement order of 23 April 1998 set aside
Legal Topics
Extension of Time (eot) Clauses, Implied Terms, Time Bar Clauses, Ex Parte Disclosure, Costs Following the Event
Source Language
EN
Contract Law Arbitration Law Civil Procedure Extension of Time (eot) Clauses Implied Terms Time Bar Clauses Ex Parte Disclosure Costs Following the Event

Case Brief

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Parties

Terraform Engineering Company Limited

Claimant and Plaintiff

Full Wealth Investment Limited

Respondent and Defendant

Procedural Posture

Arbitration Appeal and Enforcement / Leave to Appeal; Appeal Heard in Chambers; Application to Set Aside Enforcement Order

Legal Issues

  1. 1 Whether an arbitrator can grant an extension of time absent an express contractual power
  2. 2 Whether the word 'reasonable' could be implied into express contract clauses to give them business efficacy
  3. 3 Construction of clauses allocating risk for delays in obtaining Building Authority approvals

Ratio Decidendi

The award was set aside because the arbitrator exceeded his lawful powers by granting extensions of time absent contractual authority, wrongly implied the word 'reasonable' into clear express clauses, misconstrued a supplementary clause that allocated risk of approval delays to the plaintiff, and failed to apply the contractual time-bar; additionally the ex parte enforcement order was set aside and indemnity costs ordered because the plaintiff did not disclose the defendant's pending leave application and reasonable offers to secure the award.

Court Disposition

Leave to appeal granted; appeal allowed; arbitrator's award set aside; enforcement order of 23 April 1998 set aside

Orders

  • Granted leave to appeal
  • Allowed the appeal and set aside the arbitrator's award