Case 78: MAL 7(2)
Hong Kong: High Court of Hong Kong (Kaplan J.)
18 August 1994
Astel-Peiniger Joint Venture v. Argos Engineering & Heavy Industries Co. Ltd.
Original in English
(Abstract prepared by the Secretariat)
The plaintiff, a sub-subcontractor entrusted with the paint works foreseen in an assembly subcontract concluded between the main contractor and the defendant as a subcontractor, filed a claim in court. At issue was which of them was responsible under the sub-subcontract for the supply and construction of mobile paint sheds. The sub-subcontract was on a "back-to-back-basis" and "proportional" to the subcontract, and the plaintiff was given a copy of the subcontract well before the conclusion of the sub-subcontract, without raising any objections. The defendant sought a stay of the proceedings and referral of the dispute to arbitration on the grounds that the sub-subcontract incorporated by reference the terms and conditions of the subcontract, including an arbitration clause.
The court referred to the travaux préparatoiresof MAL (A/CN.9/264 and A/40/17)
and held, contrary to the plaintiff's arguments, that under article 7(2) MAL the document
containing the arbitration clause did not have to be between the same parties as the
contract into which the arbitration clause was incorporated by reference. The court stayed
the proceedings and referred the matter to arbitration, holding that the provision in the
sub-subcontract that it would be "back to back" with the subcontract
sufficiently demonstrated the intention of the parties to incorporate the arbitration
clause into the sub-subcontract; and that the provision that the sub-subcontract should be
"proportional" to the subcontract indicated that some modifications would have
to be made to the arbitration clause so that it would be capable of being performed in the
context of the sub-subcontract.
Additional Information published in later CLOUT issue (on "12 July 1995"):
Cases 39-41, 57, 60-64, 76 and 78, reported on in English:  The Arbitration and Dispute Resolution Law Journal (ADRLJ) 235,  ADRLJ 240,  ADRLJ 100 and  ADRLJ 49, 295, 307, 291, 290, 298 respectively.
Additional Information published in later CLOUT issue (on "9 February 2000"):
Abstract published in English:  Model Arbitration Law Quarterly Reports, Vol. 2, issue 3, 37
Text of the court decision published in English:  Model Arbitration Law Quarterly Reports, Vol. 2, issue 3, 40
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