Hong Kong Court Stays Litigation In Favour Of Arbitration

In November 2017, the Hong Kong High Court delivered its decision in Neo Intelligence Holdings Ltd v Giant Crown Industries Ltd HCA 1127/2017, where the Court held that an arbitration clause (in the main June-date agreement) was not superseded by a clause in the subsequent November-dated supplemental agreement which conferred non-exclusive jurisdiction on the Hong Kong courts. The Court considered that the arbitration clause in the June agreement was a detailed dispute resolution clause specifying the procedures to be followed when a dispute arose, including a stepped process of consultation and negotiation and only if that failed, submission to arbitration, while the jurisdiction clause of the November agreement was only a simple jurisdiction clause.

The Court held that it was clear that the parties did not intend the November Agreement to replace the June Agreement; the November agreement was stated in one of its clauses to be an agreement which supplements the June agreement and as from its date the November agreement is to be regarded as part of the June agreement and they shall be viewed as the same document, and govern the rights and duties of all parties under the June agreement. The clause in the November Agreement was therefore not sufficiently clear and unequivocal to indicate a waiver of the arbitration clause in the June agreement, with the Court also emphasising the principle that absent overwhelming evidence of an unequivocal waiver of the arbitration clause, an order to stay the proceedings in favour of arbitration should be granted.

Herbert Smith Freehills provide a review of the case.

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About Phillip Rompotis

Phillip practices as a barrister and arbitrator in Hong Kong. He has over 25 years’ litigation and arbitration experience in commercial disputes relating to construction & engineering, financial services, joint venture & shareholders agreements, technology, trusts, property and landlord & tenant. He is a Fellow of the Chartered Institute of Arbitrators, the Singapore Institute of Arbitrators, the Malaysian Institute of Arbitrators, and a member of various lists/panels of arbitrators.

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