ICOS VIBRO LTD. v. SFK CONSTRUCTION MANAGEMENT LTD. AND ANOTHER

ICOS VIBRO LTD. v. SFK CONSTRUCTION MANAGEMENT LTD. AND ANOTHER

The court held that summary judgment could not be granted for the HK$1,200,000 deduction under Clause 10 because it was not clearly a penalty and employer's prevention and other factual issues made the matter arguable (leave to defend granted); the court found the Architect's letters did not comply with Clause 22...

Source-derived case information.

Citation
ICOS VIBRO LTD. v. SFK CONSTRUCTION MANAGEMENT LTD. AND ANOTHER
Parties
Plaintiff: ICOS Vibro Ltd.; 1st Defendant: SFK Construction Management Ltd.; 2nd Defendant: Sung Foo Kee (Civil) Ltd.
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
26 February 1992
Case Number
HCCL9/1991
Procedural Posture
Construction/building Contract Dispute / Interlocutory Applications: Summary Judgment (order 14) and Stay to Arbitration
Outcome
Interlocutory judgment: claim for HK$1,200,000 to proceed to trial/arbitration (leave to defend granted); summary judgment for HK$518,722.59 awarded to Plaintiff; stay to arbitration refused; 2nd Defendant not struck out
Legal Topics
Stay to Arbitration, Summary Judgment (order 14), Penalty Clause, Liquidated Damages, Employer's Prevention, Declaration, Striking Out (o.18 R.19), Arbitral Jurisdiction Vs Court Jurisdiction
Source Language
en
Arbitration Contract Construction Law Civil Procedure Stay to Arbitration Summary Judgment (order 14) Penalty Clause Liquidated Damages +4 more

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Summary, issues, holding and outcome

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Parties

ICOS Vibro Ltd.

Plaintiff

SFK Construction Management Ltd.

1st Defendant

Sung Foo Kee (Civil) Ltd.

2nd Defendant

Procedural Posture

Construction/building Contract Dispute / Interlocutory Applications: Summary Judgment (order 14) and Stay to Arbitration

Legal Issues

  1. 1 Whether Clause 10 deduction of HK$1,200,000 is a penalty enforceable as liquidated damages or arbitrary deduction
  2. 2 Whether employer's prevention doctrine prevents the employer from deducting the HK$1,200,000
  3. 3 Whether the dispute should be stayed to arbitration under the Arbitration Ordinance s.6 given the presence of a non‑arbitral party (2nd Defendant)

Ratio Decidendi

The court held that summary judgment could not be granted for the HK$1,200,000 deduction under Clause 10 because it was not clearly a penalty and employer's prevention and other factual issues made the matter arguable (leave to defend granted); the court found the Architect's letters did not comply with Clause 22 and awarded summary judgment for interest and related sums totalling HK$518,722.59 and a declaration that the Plaintiff is entitled to receive that sum; the court refused a stay to arbitration because the 2nd Defendant (not bound by arbitration clause) remained a party and it was desirable that one tribunal determine all related disputes; the court refused to strike out the 2nd...

Court Disposition

Interlocutory judgment: claim for HK$1,200,000 to proceed to trial/arbitration (leave to defend granted); summary judgment for HK$518,722.59 awarded to Plaintiff; stay to arbitration refused; 2nd Defendant not struck out

Orders

  • Unconditional leave to defend in relation to the claim for HK$1,200,000 under Clause 10 of the Letter of Award
  • Summary judgment for the Plaintiff against the 1st Defendant in the sum of HK$518,722.59 in respect of interest on sums unlawfully withheld