Case 44: MAL 7(2); 8
Hong Kong: High Court of Hong Kong (Kaplan J.)
17 February 1993
William Company v. Chu Kong Agency Co. Ltd. and Guangzhou Ocean Shipping Company
Published in English: 1993, Hong Kong Law Digest, B7
(Abstract prepared by the Secretariat)
The plaintiff filed a suit against the defendants requesting damages for loss and damage to its cargo carried under a bill of lading issued by the first defendant in Hong Kong. The bill of lading, which was subject to the Hague-Visby Rules, contained an arbitration clause providing for arbitration in China under Chinese law and an exclusive jurisdiction clause in favour of Chinese courts.
The defendants sought a stay of proceedings in favour of arbitration in China, alternatively a stay on the grounds of the Chinese exclusive jurisdiction clause and/or on the grounds of forum non conveniens.
The court found that the arbitration clause constituted a valid written agreement to arbitrate. Declining to follow a previous High Court decision to the contrary, namely Hissan Trading Co Ltd. v. Orkin Shipping Corporation [see [...], case 43], the court held that, although the bill of lading was not signed by both parties and the arbitration clause contained therein could not be said to be a written agreement to arbitrate in the sense of article 7(2) MAL, material addressed by one party to the other after the conclusion of the agreement to arbitrate could provide a record of the agreement to arbitrate. In this case it was shown conclusively through the presentation of such material that the parties had agreed on arbitration in China.
As the bill of lading contained both an arbitration and an exclusive jurisdiction
clause, the court addressed the question whether the arbitration clause was void. It was
held that the claimant had a choice, either to seek arbitration or litigation in China. As
the plaintiff opted for a method of dispute resolution not foreseen in the bill of lading,
namely litigation in Hong Kong, it was open to the defendants to exercise that choice. By
applying for a stay of proceedings pursuant to article 8 MAL, the defendants opted for
arbitration in China. The court granted the stay of proceedings.
Additional Information published in later CLOUT issue (on "14 October 1994"):
Summarized and commented on by Kaplan, Spruce and Moser in Hong Kong and China Arbitration, Cases and Materials, Butterworths, 1994.
Additional Information published in later CLOUT issue (on "10 April 1995"):
Commented on by Kaplan in Asia Law January/February 1995, 23.
Additional Information published in later CLOUT issue (on "9 February 2000"):
Abstract published in English:  Model Arbitration Law Quarterly Reports, Vol. 1, issue 4, 97
Text of the court decision published in English:  Model Arbitration Law Quarterly Reports, Vol. 1, issue 4, 101
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