Hong Kong Case Law: Decisions & Judgments

Topic

Performance bond

Legal area

Court

5 Jan 2024

GOLDEN WAY ENGINEERING DEVELOPMENT LTD v. GWP ENGINEERING LTD

Citation

[2024] HKDC 32
Court

District Court
Case number

DCCJ2595/2022

Defendant established a cogent and plainly arguable case that the Document dated 3 September 2021, read with the Works Order Summary and the parties' subsequent conduct (including plaintiff obtaining and relying on a Performance Bond referencing that contract), constituted a binding agreement containing Clause 25 which required disputes to be arbitrated. The mediation wording did not impose an absolute pre-condition to arbitration. Accordingly, under s20 Arbitration Ordinance the action is stayed and the parties are referred to arbitration; costs awarded to defendant.
2 Apr 2020

WEST KOWLOON CULTURAL DISTRICT AUTHORITY v. AIG INSURANCE HONG KONG LTD

Citation

[2020] HKCFI 569
Court

Court of First Instance
Case number

HCA2039/2018

The 1st Demand complied with Clause 2 of the Bond because it was written, expressed the Plaintiff's opinion that the Contractor was or had been in default, and identified the amount claimed (the bonded sum) as in respect of damages, losses etc caused by the default; references to future losses were surplusage. The Defendant failed to adduce particularly cogent evidence of fraud such that the fraud exception applied. Summary judgment for the Plaintiff for the full bonded sum with interest was therefore appropriate.
23 Mar 2018

CLA ENGINEERING LTD v. DBS BANK (HONG KONG) LTD AND ANOTHER

Citation

[2018] HKCFI 626
Court

Court of First Instance
Case number

HCMP273/2018

The bond was an on‑demand unconditional performance bond triggered by Leighton's compliant written demand and accompanying statement; the clause relied on by CLA governed extension of the Long Stop Date and did not make payment conditional; unconscionability is not a sufficient ground to restrain payment under such a bond; Leighton was not obliged to hold any paid sum on trust absent the specified contractual trigger; accordingly the ex parte injunction was discharged and CLA's applications dismissed, though leave to abridge service and to amend were granted and a short continuation of the in…
16 May 2016

ASIA INSURANCE CO, LTD v. WARM HOME CONSTRUCTION CO., LTD AND OTHERS

Citation

ASIA INSURANCE CO, LTD v. WARM HOME CONSTRUCTION CO., LTD AND OTHERS
Court

Court of Appeal
Case number

CACV186/2015

The demand complied with the Bond because BNIL acted for and on behalf of the IO as expressly defined in the Bond and the Indemnity Agreement; the Bond did not expire upon termination of the Works Contract under Clause 4; the appellant failed to demonstrate a defence on the merits with a real prospect of success, so there was no basis to set aside the default judgment.
30 Sept 2015

LEIGHTON LLC v. MONGOLIA ENERGY CORPORATION LTD

Citation

LEIGHTON LLC v. MONGOLIA ENERGY CORPORATION LTD
Court

Court of First Instance
Case number

HCCL15/2013

The court held the Company Guarantee is a traditional guarantee (guarantor's liability dependent on the principal) because the non‑banking context presumption against on‑demand instruments was not rebutted: the guarantee lacks a conclusive evidence/certificate clause, contains wording tying guarantor liability to obligations of the principal (including maximum aggregate liability and discharge when principal's obligations are discharged), and other clauses are neutral or inconsistent with an independent on‑demand bond; therefore Leighton was not entitled to Order 14 judgment on the guarantee…
23 Sept 2015

GRANDE CACHE COAL LP AND ANOTHER v. MARUBENI CORPORATION AND ANOTHER

Citation

GRANDE CACHE COAL LP AND ANOTHER v. MARUBENI CORPORATION AND ANOTHER
Court

Court of First Instance
Case number

HCA2136/2015

The Ex Parte Order was discharged because the Advance Payment Guarantee is independent and no fraud was alleged; the plaintiffs failed to meet the higher evidential threshold required to restrain payment under such a guarantee; there was material non-disclosure regarding the nature of the guarantee and governing principles and improper/illusory notice was given of the ex parte hearing; damages were an adequate alternative remedy.
24 Oct 2012

HYUNDAI ENGINEERING & CONSTRUCTION CO., LTD v. UBAF (HONG KONG) LTD

Citation

HYUNDAI ENGINEERING & CONSTRUCTION CO., LTD v. UBAF (HONG KONG) LTD
Court

Court of First Instance
Case number

HCA175/2012

The court granted summary judgment because the plaintiff's demand complied with the APG and the defendant failed to discharge the burden of particularising and adducing cogent evidence of fraud sufficient to raise a triable issue; consequently the fraud exception did not apply. The court also refused a stay because the APG contained governing law and exclusive jurisdiction under the Uniform Rules, the Hong Kong proceedings were narrow and readily resolvable, and a stay would cause injustice and uncertainty given the unrelated wider Mainland proceedings.
4 Jul 2012

KONE ELEVATOR (H.K.) LTD v. CITYBASE PROPERTY MANAGEMENT LTD

Citation

KONE ELEVATOR (H.K.) LTD v. CITYBASE PROPERTY MANAGEMENT LTD
Court

Court of First Instance
Case number

HCA1898/2008

Kone was guilty of malpractice (i.e. breach) only in respect of the items it expressly admitted; the remaining alleged defects were not proven or were outside Kone's contractual responsibility; Clause 30 permitted Citybase to deduct a 'sum in dispute' from the Performance Bond and SCB was entitled to pay on that basis, but Citybase must account and repay any overdrawn amount once the dispute is resolved — accordingly Kone succeeds in restitution and is awarded HK$654,260 (the bond draw of HK$771,400 less proven rectification costs HK$117,140), with interest and costs.
13 Nov 2009

CHIU TIN YAU LESLEY v. DICKSON NG

Citation

CHIU TIN YAU LESLEY v. DICKSON NG
Court

Court of First Instance
Case number

HCA105/2004

The court accepted the plaintiff's evidence and contemporaneous documents showing payment of HK$2,500,000 as a deposit under an oral agreement; the specified decoration project did not materialize constituting total failure of consideration; the defendant's absent and unproven account was rejected; therefore the defendant must repay HK$2,500,000 with interest and pay costs.
19 Sept 2006

BLISS SUCCESS LTD v. TONG HOK KEUNG AND OTHERS

Citation

BLISS SUCCESS LTD v. TONG HOK KEUNG AND OTHERS
Court

District Court
Case number

DCCJ4761/2005

The court held the guarantee was unenforceable: the Plaintiff failed to show consideration for the collateral guarantee, the document's terms were ambiguous and construed against the Plaintiff, and the underlying arrangement involved illicit under‑table payments rendering the contract illegal and contrary to public policy; accordingly the Plaintiff's claim for US$76,800 was dismissed and costs were awarded to the Defendants.