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Hanison, the main contractor in a construction project, applied as a third party for a stay of court proceedings instituted by Gay Constructions and Spaceframe Buildings, the sub-subcontractors, against Caledonian, the subcontractor. The contract between the plaintiff and the defendant was in writing. It contained an arbitration clause but, while it was signed by Hanison, it was not signed by Caledonian.

At issue was whether the letters exchanged between Hanison and Caledonian provided a record of the contract, including the arbitration clause and whether there is an exchange of a statement of claim and defence in which the existence of the arbitration agreement is alleged and not denied (article 7(2) MAL).

The court held that the letters exchanged between the parties provided a record of their contract in the sense of article 7(2) MAL, despite the fact that no explicit reference was made in the letters to the arbitration clause contained in the contract. In addition, the court found that Caledonian had submitted to Hanison a claim called "contractual claim for loss and expense" on the basis of the contract and held that this claim constituted either a letter or, alternatively, a claim under article 7(2), in which the existence of the arbitration agreement was alleged by Caledonian and not denied by Hanison. The court noted that the phrase "statements of claim and defence" in article 7(2) MAL was not defined and found no reason why it should be interpreted as referring "only to pleadings in the formal sense once an arbitration has commenced". The court stayed the court proceedings under section 6 of the Hong Kong Arbitration Ordinance.

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