ELIZE FUNG AND ANOTHER v. WELL LUCK INTERNATIONAL HOLDINGS LTD. AND OTHERS

ELIZE FUNG AND ANOTHER v. WELL LUCK INTERNATIONAL HOLDINGS LTD. AND OTHERS

The court held that the references to legal action in the defendant's solicitors' letters could not reasonably be understood as repudiating the arbitration agreement; the plaintiffs advanced no other valid grounds to resist the stay; accordingly, applying the principle that a stay must be granted where the dispute falls within a valid arbitration agreement, the stay sought by the 4th Defendant was granted.

Citation
ELIZE FUNG AND ANOTHER v. WELL LUCK INTERNATIONAL HOLDINGS LTD. AND OTHERS
Parties
1st Plaintiff: Elize Fung; 2nd Plaintiff: Landmark Investments Trading Limited; 1st Defendant: Well Luck International Holdings Limited; 2nd Defendant: Joyful Luck Investments Limited; 3rd Defendant: Winco International Group Limited; 4th Defendant: Global Faith Investments Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
3 February 2000
Case Number
HCA939/2000
Procedural Posture
Stay Application Under Arbitration Ordinance (commercial Dispute Arising From Shareholder Agreement) / Application for Stay of Proceedings Under S.6 Arbitration Ordinance Before Trial (interim Hearing)
Outcome
Application for stay granted in favour of the 4th Defendant
Legal Topics
Stay of Proceedings, Arbitration Agreement, Anticipatory Breach, Articles of Incorporation, Shareholder Agreement
Source Language
EN
Arbitration Contract Company Law Civil Procedure Stay of Proceedings Arbitration Agreement Anticipatory Breach Articles of Incorporation +1 more

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Parties

Elize Fung

1st Plaintiff

Landmark Investments Trading Limited

2nd Plaintiff

Well Luck International Holdings Limited

1st Defendant

Joyful Luck Investments Limited

2nd Defendant

Winco International Group Limited

3rd Defendant

Global Faith Investments Limited

4th Defendant

Procedural Posture

Stay Application Under Arbitration Ordinance (commercial Dispute Arising From Shareholder Agreement) / Application for Stay of Proceedings Under S.6 Arbitration Ordinance Before Trial (interim Hearing)

Legal Issues

  1. 1 Whether the court must grant a stay under s.6 of the Arbitration Ordinance and Model Law principles
  2. 2 Whether the defendant's pre-action correspondence constituted an anticipatory breach of the arbitration agreement
  3. 3 Whether the arbitration agreement is null, inoperative or incapable of being performed

Ratio Decidendi

The court held that the references to legal action in the defendant's solicitors' letters could not reasonably be understood as repudiating the arbitration agreement; the plaintiffs advanced no other valid grounds to resist the stay; accordingly, applying the principle that a stay must be granted where the dispute falls within a valid arbitration agreement, the stay sought by the 4th Defendant was granted.

Court Disposition

Application for stay granted in favour of the 4th Defendant

Orders

  • Stay proceedings against the 4th Defendant (Global Faith Investments Limited) granted in terms of the 4th Defendant's application pursuant to s.6 of the Arbitration Ordinance (Cap. 341)