29 March 2024 CONTRACTUAL INTERPRETATION IN HONG KONG AND SINGAPORE: WHAT HAPPENS WHEN PARTIES NAME A NON-EXISTENT ARBITRATION CENTRE?
In January 2023, the Hong Kong Court of First Instance in Grand Ocean & Williams Co Limited v. Huaxicun Offshore Engineering Co Ltd (江苏华西村海洋工程服务有限公司) [2023] HKCFI 86 (“Grand Ocean”) held that an arbitration clause, governed by the laws of the People’s Republic of China (“PRC”), was void and incapable of being performed on the basis that the institution named did not exist. Without an existing institution named, the arbitration clause fell short of the requirements for a valid arbitration agreement under the Arbitration Law of the PRC. Article 16 of the PRC Arbitration Law provides that an arbitration agreement must contain three particulars, including a designated arbitral commission selected by the parties. Without this, an agreement is invalid by way of Article 18.
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