Case number: 78
Article number: model arbitration law / 7(2)
Thessaurs issue:
Country of decision: United Kingdom
Year of decision: 1994
Type of decision: Judicial decision

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
Unpublished

(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 pr‚paratoires of 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.