L v. M AND ANOTHER

L v. M AND ANOTHER

The court varied the costs order nisi and held that because the stay applied both to claims against the 2nd Defendant under the arbitration agreement and to claims against the 1st Defendant (who had no arbitration clause) and because the 1st Defendant's undertaking was produced late (which materially affected the litigation conduct), it was unjust to award the 2nd Defendant full indemnity costs; instead the 2nd Defendant was entitled to 50% of the costs of and incidental to the Summons, certificate for Counsel, on party and party basis, with the balance in the cause; costs of the variation applications follow this order.

Citation
[2021] HKCFI 3206
Parties
Plaintiff: L; 1st Defendant: M; 2nd Defendant: N
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
27 October 2021
Case Number
HCCT6/2021
Procedural Posture
Construction and Arbitration Proceedings / Costs Variation Decision Following Stay to Arbitration Order
Outcome
Order nisi varied: 2nd Defendant to be allowed 50% of the costs of and incidental to the Summons with certificate for Counsel on party and party basis; balance of costs in the cause; costs of the applications for variation to follow the same order.
Legal Topics
Stay to Arbitration, Indemnity Costs, Case Management Stay, Undertaking by Non‑party
Source Language
EN
Arbitration Civil Procedure Costs Construction Law Stay to Arbitration Indemnity Costs Case Management Stay Undertaking by Non‑party

Case Brief

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Parties

L

Plaintiff

M

1st Defendant

N

2nd Defendant

Procedural Posture

Construction and Arbitration Proceedings / Costs Variation Decision Following Stay to Arbitration Order

Legal Issues

  1. 1 Whether the costs order nisi should be varied
  2. 2 Whether indemnity costs are appropriate where part of the stay related to a non‑arbitral defendant
  3. 3 Effect of the late production of the 1st Defendant's undertaking on costs allocation

Ratio Decidendi

The court varied the costs order nisi and held that because the stay applied both to claims against the 2nd Defendant under the arbitration agreement and to claims against the 1st Defendant (who had no arbitration clause) and because the 1st Defendant's undertaking was produced late (which materially affected the litigation conduct), it was unjust to award the 2nd Defendant full indemnity costs; instead the 2nd Defendant was entitled to 50% of the costs of and incidental to the Summons, certificate for Counsel, on party and party basis, with the balance in the cause; costs of the variation applications follow this order.

Court Disposition

Order nisi varied: 2nd Defendant to be allowed 50% of the costs of and incidental to the Summons with certificate for Counsel on party and party basis; balance of costs in the cause; costs of the applications for variation to follow the same order.

Orders

  • 2nd Defendant to receive 50% of the costs of and incidental to the Summons, with certificate for Counsel, on party and party basis.
  • The balance of the costs to be in the cause.