THE Hongkong Supreme Court has overturned an award granted by China's International Economic and Trade Arbitration Commission against a Hongkong company in a decision which invokes the New York Convention on international arbitration.
The decision by Mr Justice Kaplan in favour of Klockner East Asia Ltd, a Hongkong subsidiary of the giant German steel and metal trader, is the first of its kind in nearly 40 cases heard by the Supreme Court and of potential significance to many China traders.
The Hongkong court has ruled that findings against Klockner by the China International Economic and Trade Arbitration Commission (CIETAC) were reached in a process not fully conforming to the New York Convention of which both China and Hongkong are signatories.
As such, the Hongkong court upheld an earlier decision by Master Cannon not to enforce the CIETAC finding against Hongkong-based Klockner East Asia for about US$800,000.
Although CIETAC's ruling was made in China, the plaintiff, Paklito Investment Ltd, sought to collect the award in Hongkong as provided for in the New York Convention of 1958.
The case involved a dispute over the landed condition of a 2,500-tonne, US$1.9 million shipment of galvanised steel coil sent from Istanbul to Huangpu in Guangdong province which arrived in January 1989.
