Case number: 58
Article number: model arbitration law / 1(3)(b)(ii)
Thessaurs issue:
Country of decision: United Kingdom
Year of decision: 1993
Type of decision: Judicial decision

Case 58: MAL 1(3)(b)(ii)
Hong Kong: High Court of Hong Kong (Kaplan J.) 22 June and 12 July 1993; appeal pending
Ananda Non-Ferrous Metals Ltd. v. China Resources Metal and Minerals Co. Ltd.
Excerpts published in [1993] 2 Hong Kong Law Reports (HKLR), 348

(Abstract prepared by the Secretariat)

The plaintiff, a Hong Kong company, agreed to sell to the defendant, also a Hong Kong company, 40 metric tonnes of
cadmium c.i.f. Rotterdam. Upon arrival in Rotterdam, the goods were inspected and the defendant contended that they did not
comply with the description contained in the contract. The issue was submitted to arbitration and the arbitral tribunal in an
interim award found in favour of the defendant. The plaintiff sought leave from the court to appeal against that interim award.
The defendant argued that an international arbitration was involved, to which MAL applied, and that under MAL there was no
right to appeal. It was agreed that the court should first deal with the issue whether it had jurisdiction depending on whether a
domestic or international arbitration was involved. The plaintiff argued that the arbitration was domestic since both parties were
Hong Kong companies and that, even if it were international, the defendant was estopped from raising that defence or had
waived such a defence since the circumstances and the conduct of the parties indicated that a domestic arbitration was
involved.

The court, applying article 1(3)(b)(ii) MAL and citing its ruling on Fung Sang Trading Limited etc. (case 20), held that an
international arbitration was involved since a substantial part of the obligations of the commercial relationship was to be
performed outside Hong Kong. It was found that the documents submitted by the plaintiff and the circumstances did not
indicate that the parties had agreed to opt into the domestic regime. It was also found that the defendant was not estopped
from raising the defence that an international arbitration was involved since there was no representation by the defendant on
which the plaintiff might have acted to its detriment; nor did the defendant waive such defence since the fact that the arbitration
was international was never an issue in the arbitration proceedings and the defendant could not have waived a right of which it
was not aware. The court dismissed the application.