Case number: 20
Article number: sales convention / 1(3)(b)(ii); 3; 8; 10; 11; 16
Thessaurs issue:
Country of decision: United Kingdom
Year of decision: 1991
Type of decision: Judicial decision

Case 20: MAL 1(3)(b)(ii); 3; 8; 10; 11; 16
Hong Kong: High Court of Hong Kong (Kaplan J.) 29 October 1991
Fung Sang Trading Limited v. Kai Sun Sea Products and Food Company Limited
Original in English
Excerpts of judgement in Doyles dispute resolution practice: Asia, Pacific in 1 volume. North Ryde, N.S.W.: CCH
International, c1990-Tab 80-036, p.80, 661-80 and in: Yearbook Commercial Arbitration, (Deventer, Netherlands, Kluwer)
vol. XVII, 1992, p. 289-303. Commented on in: Doyles ADR update 5: 4-5, 28 February 1992, and by Pryles, World
Arbitration and Mediation Report 2:12:329 (December 1991).

(Abstract prepared by the Secretariat)

The plaintiff, a Hong Kong company, asked the court to appoint a second arbitrator, relying on a contract with another Hong
Kong company that contained an arbitration clause. The contract was for the sale of soybean extraction meal FOB Dalian;
Dalian, which is in China, was stated to be the place of delivery. The defendant, asserting that there was no valid contract since
the person who had signed had no authority to bind it, contended that an arbitrator had no jurisdiction to rule on whether or
not a contract had been concluded. Even if an arbitration agreement existed, the arbitration would be domestic and thus have
to be conducted by a sole arbitrator.

The court determined the arbitration to be international pursuant to article 1(3)(b)(ii) of the Model Law as enacted by the
Hong Kong Arbitration (Amendment) (No.2) Ordinance, 1989. It regarded delivery (which was to take place outside Hong
Kong) as "a substantial part of the obligations of the commercial relationship", without ignoring that payment and nomination of
the vessel (which were to take place in Hong Kong) were also important obligations in a contract of sale.

The court refused to deal