KENON ENGINEERING LTD v. NIPPON KOKAN KOJI KABUSHIKI KAISHA

KENON ENGINEERING LTD v. NIPPON KOKAN KOJI KABUSHIKI KAISHA

Clause 21.1, read in context and having been shown to refer specifically to a 'Mediation Procedure' with no identifiable mediation regime and with ambiguous wording, is not an arbitration clause; there is no valid arbitration agreement obliging Kenon to refer the disputes to arbitration; the court has jurisdiction to decide that question finally and accordingly denies the stay to arbitration and grants Kenon's declaratory relief.

Citation
KENON ENGINEERING LTD v. NIPPON KOKAN KOJI KABUSHIKI KAISHA
Parties
Plaintiff in HCA3492 and Hcct21; Defendant in HCA3973: Kenon Engineering Limited; Defendant in HCA3492 and Hcct21; Plaintiff in HCA3973: Nippon Kokan Koji Kabushiki Kaisha (Nippon Kokan Koji Corporation)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
2 July 2003
Case Number
HCCT21/2003
Procedural Posture
Construction Contract Dispute; Challenge to Arbitration Jurisdiction / Applications Heard on Summons; Judgment Delivered (declaration and Interlocutory Applications)
Outcome
Kenon's originating summons in HCCT21/2003 granted (declaration that Clause 21.1 is not an arbitration clause and no valid arbitration agreement); NK3's applications for stays dismissed
Legal Topics
Validity of Arbitration Clause, Stay to Arbitration Under Model Law/arbitration Ordinance, Competence‑competence (arbitral Tribunal Jurisdiction), Mediation Versus Arbitration, Contract Interpretation and Ambiguity
Source Language
EN
Arbitration Construction Law Contract Law Civil Procedure Validity of Arbitration Clause Stay to Arbitration Under Model Law/arbitration Ordinance Competence‑competence (arbitral Tribunal Jurisdiction) Mediation Versus Arbitration +1 more

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Parties

Kenon Engineering Limited

Plaintiff in HCA3492 and Hcct21; Defendant in HCA3973

Nippon Kokan Koji Kabushiki Kaisha (Nippon Kokan Koji Corporation)

Defendant in HCA3492 and Hcct21; Plaintiff in HCA3973

Procedural Posture

Construction Contract Dispute; Challenge to Arbitration Jurisdiction / Applications Heard on Summons; Judgment Delivered (declaration and Interlocutory Applications)

Legal Issues

  1. 1 Whether Clause 21.1 of the Sub-Contract is an arbitration agreement
  2. 2 Whether Clause 21.1 is superseded by Clause 5.5 of the 2nd Supplemental Agreement
  3. 3 Whether the court should stay proceedings to arbitration under Article 8 of the Model Law/Arbitration Ordinance

Ratio Decidendi

Clause 21.1, read in context and having been shown to refer specifically to a 'Mediation Procedure' with no identifiable mediation regime and with ambiguous wording, is not an arbitration clause; there is no valid arbitration agreement obliging Kenon to refer the disputes to arbitration; the court has jurisdiction to decide that question finally and accordingly denies the stay to arbitration and grants Kenon's declaratory relief.

Court Disposition

Kenon's originating summons in HCCT21/2003 granted (declaration that Clause 21.1 is not an arbitration clause and no valid arbitration agreement); NK3's applications for stays dismissed

Orders

  • Declaration that Clause 21.1 of the Sub-Contract is not an arbitration clause and there is no valid arbitration agreement between the parties
  • Kenon's Originating Summons in HCCT21/2003 granted with costs (to be taxed if not agreed)