Case number: 44
Article number: model arbitration law / 7(2); 8
Thessaurs issue:
Country of decision: United Kingdom
Year of decision: 1993
Type of decision: Judicial decision

Case 44: MAL 7(2); 8
Hong Kong: High Court of Hong Kong (Kaplan J.) 17 February 1993
William Company v. Chu Kong Agency Co. Ltd. and Guangzhou Ocean Shipping Company
Published in English: 1993, Hong Kong Law Digest, B7

(Abstract prepared by the Secretariat)

The plaintiff filed a suit against the defendants requesting damages for loss and damage to its cargo carried under a bill of lading
issued by the first defendant in Hong Kong. The bill of lading, which was subject to the Hague-Visby Rules, contained an
arbitration clause providing for arbitration in China under Chinese law and an exclusive jurisdiction clause in favour of Chinese
courts.

The defendants sought a stay of proceedings in favour of arbitration in China, alternatively a stay on the grounds of the Chinese
exclusive jurisdiction clause and/or on the grounds of forum non conveniens.

The court found that the arbitration clause constituted a valid written agreement to arbitrate. Declining to follow a previous
High Court decision to the contrary, namely Hissan Trading Co Ltd. v. Orkin Shipping Corporation [see
A/CN.9/SER.C/ABSTRACTS/2, case 43], the court held that, although the bill of lading was not signed by both parties and
the arbitration clause contained therein could not be said to be a written agreement to arbitrate in the sense of article 7(2)
MAL, material addressed by one party to the other after the conclusion of the agreement to arbitrate could provide a record of
the agreement to arbitrate. In this case it was shown conclusively through the presentation of such material that the parties had
agreed on arbitration in China.

As the bill of lading contained both an arbitration and an exclusive jurisdiction clause, the court addressed the question whether
the arbitration clause was void. It was held that the claimant had a choice, either to seek arbitration or litigation in China. As
the plaintiff opted for a method of dispute resolution not foreseen in the bill of lading, namely litigation in Hong Kong, it was
open to the defendants to exercise that choice. By applying for a stay of proceedings pursuant to article 8 MAL, the
defendants opted for arbitration in China. The court granted the stay of proceedings.