FUNG SANG TRADING LTD. v. KAI SUN SEA PRODUCTS & FOOD CO. LTD.

FUNG SANG TRADING LTD. v. KAI SUN SEA PRODUCTS & FOOD CO. LTD.

The court found that a substantial part of the contractual obligations (delivery FOB at Dalian) was to be performed outside Hong Kong, so the arbitration is international and the UNCITRAL Model Law applies; because the respondent defaulted in appointing an arbitrator the court must exercise its power under Article 10(3) to appoint an arbitrator; Article 16 means the arbitrator/trio may rule on jurisdiction including challenges to the contract's existence but such rulings are subject to final court review, so the court should appoint an arbitrator rather than decide the existence of the contract itself.

Citation
FUNG SANG TRADING LTD. v. KAI SUN SEA PRODUCTS & FOOD CO. LTD.
Parties
Plaintiff (claimant in Arbitration): Fung Sang Trading Ltd.; Defendant (respondent in Arbitration): Kai Sun Sea Products & Food Co. Ltd.
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
29 October 1991
Case Number
HCMP2674/1991
Procedural Posture
Application to Appoint Arbitrator Under Arbitration Agreement / High Court Application / Hearing to Appoint Arbitrator (interlocutory)
Outcome
Application granted in part; court appointed an arbitrator and made a costs order nisi in favour of the plaintiffs
Legal Topics
UNCITRAL Model Law, Competence Competence, Separability Doctrine, Internationality Test (place of Performance), Appointment of Arbitrator, Jurisdictional Challenge, Transitional Provisions
Source Language
EN
Arbitration Law Contract Law International Commercial Arbitration Civil Procedure UNCITRAL Model Law Competence Competence Separability Doctrine Internationality Test (place of Performance) +3 more

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Parties

Fung Sang Trading Ltd.

Plaintiff (claimant in Arbitration)

Kai Sun Sea Products & Food Co. Ltd.

Defendant (respondent in Arbitration)

Procedural Posture

Application to Appoint Arbitrator Under Arbitration Agreement / High Court Application / Hearing to Appoint Arbitrator (interlocutory)

Legal Issues

  1. 1 Whether the dispute is an international arbitration and the UNCITRAL Model Law applies
  2. 2 Whether the court should appoint an arbitrator on the plaintiff's application
  3. 3 Whether an arbitrator/arbitral tribunal may rule on the existence or validity of the contract containing the arbitration clause

Ratio Decidendi

The court found that a substantial part of the contractual obligations (delivery FOB at Dalian) was to be performed outside Hong Kong, so the arbitration is international and the UNCITRAL Model Law applies; because the respondent defaulted in appointing an arbitrator the court must exercise its power under Article 10(3) to appoint an arbitrator; Article 16 means the arbitrator/trio may rule on jurisdiction including challenges to the contract's existence but such rulings are subject to final court review, so the court should appoint an arbitrator rather than decide the existence of the contract itself.

Court Disposition

Application granted in part; court appointed an arbitrator and made a costs order nisi in favour of the plaintiffs

Orders

  • Philip Yang is appointed as arbitrator to the tribunal in place of a defaulting party's appointment
  • Costs order nisi made in favour of the plaintiffs