Hong Kong Court Finds Third Party Bound by Arbitration Agreement

Lau Lan Ying v Top Hill Company and another [2021] HKCFI 290, involved an insurer’s application to stay third-party proceedings in favour of arbitration pursuant to an arbitration clause in an employee compensation insurance policy.  The third-party proceedings concerned the insurer’s indemnity/contribution in respect of a subcontractor employee’s claims against the principal contractor in the main action.

The court held that the subject matter of the third-party proceedings was a matter arising out of the insurance policy and fell squarely within the ambit of its arbitration clause, also finding that there were no countervailing public policy considerations under the statutory employee compensation scheme which would render the proceedings non-arbitrable.

In the result, the Hong Kong High Court stayed the third party proceedings on the basis that the parties were bound by the arbitration clause contained in the insurance policy, reinforcing the principle of party autonomy (albeit that the result of the decision would be that the main action and the third party proceedings would need to be pursued in different forums).

See the commentary on this case by Herbert Smith Freehills.

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 Hong Kong 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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