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Shagang South-Asia (Hong Kong) Trading v Daewoo Logistics

5th Feb 2015

English High Court boost for Hong Kong arbitration Robert Bright QC succeeded in an arbitration claim on a fixture note providing: “Arbitration: Arbitration to be held in Hong Kong. English law to be applied,” as well as incorporating Gencon 1994.

The issue was whether the Arbitration Act 1996 applied, either because the arbitration itself was subject to English law as the curial law or because the reference to Gencon 1994 meant clause 19(a) of Gencon (which provides for the Arbitration Act 1996).

Robert Bright QC successfully presented Shagang’s case, the Judge agreeing that the arbitration was subject to the Hong Kong Arbitration Ordinance, and that the Arbitration Act 1996 did not apply. The provision for the arbitration to take place in Hong Kong meant that all aspects of the arbitration process were to take place there, including any supervisory court proceedings. English law was to apply only as the law governing the charter obligations.

The general incorporation of Gencon 1994 did not incorporate clause 19 in all the circumstances. The fixture note was a short form contract which should not be interpreted as if it had been the result of careful and deliberate drafting.

The judgment will be welcomed by maritime arbitration practitioners and their client in the Far East as it makes it easier for Hong Kong to retain jurisdiction in cases where the parties use short-form, informally worded chartering contracts.

The judgment is also notable because it praises Hong Kong as “a well known and respected arbitration forum with a reputation for neutrality, not least because of its supervising courts”.

To view the judgment please click here.

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