HK may challenge award to steel mill

PUBLISHED : Saturday, 18 December, 1993, 12:00am
UPDATED : Saturday, 18 December, 1993, 12:00am

THE Hong Kong Government is considering appealing to the Privy Council over the increased compensation of more than $519 million, plus interest from mid-1986, awarded by the Court of Appeal to a steel mill company.

Yesterday, the Court of Appeal also granted Shun Fung Ironworks costs of more than $150 million for the 22-month hearing in the Lands Tribunal and the appeal.

Vice-President Mr Justice Power, Mr Justice Litton and Mr Justice Nazareth ruled out the claim by the Government that the tribunal hearing was prolonged because of the way counsel for Shun Fung conducted the hearing.

The background of the case is that Shun Fung Ironworks' Junk Bay site was taken by the Government in 1987 to make way for a new town, but it was not until June last year that the Lands Tribunal ruled that its damages should be limited to $131 million.

The company had claimed costs for relocating its business to China and loss of future profits.

The Lands Tribunal held Shun Fung had inflated its claim and was entitled to compensation only for its business being extinguished by the Government takeover of the land, as it was then incapable of relocating.

But the Court of Appeal last week said the tribunal found after almost four years that Shun Fung's business would have been profitable had the Government not taken the land, and yet the firm received an award that came nowhere near to compensating it forthe loss of business.

Shun Fung was seeking $1 billion compensation.