Summary of facts
The dispute arose from the alleged breach of a co-operation agreement between Company C (P) and Company D (D) (Agreement). P applied to the Hong Kong court for a declaration that the Award made in the arbitration between P and D was made without jurisdiction and not binding on P, and for an order that the Award be set aside.
The main complaint of P was that D had not complied with the multi-tiered dispute resolution clause in the Agreement, the key provisions of which read as follows:
Clause 14.2 – Dispute Resolution
“The Parties agree that if any controversy, dispute or claim arises …, the Parties shall attempt in good faith promptly to resolve such dispute by negotiation. Either Party may, by written notice to the other, have such dispute referred to the Chief Executive Officers of the Parties for resolution …” (emphasis added)
Clause 14.3 – Arbitration
“If any dispute cannot be resolved amicably within sixty (60) business days of the date of a Party’s request in writing for such negotiation, or such other time period as may be agreed, then such dispute shall be referred by either Party for settlement exclusively and finally by arbitration in Hong Kong at the Hong Kong International Arbitration Centre (‘HKIAC’) in accordance with the UNCITRAL Arbitration Rules in force at the time of commencement of the arbitration (the ‘Rules’) …” (emphasis added)
It was common ground between the parties that the first sentence in clause 14.3 provided a condition precedent to any reference to arbitration that there should have been a request in writing for negotiation and that the dispute could not be resolved within 60 business days. The parties, however, disagreed on how the condition could be fulfilleor determination:
- Was compliance with the dispute resolution procedure a question of the admissibility of the claim or of the tribunal’s jurisdiction?
- If the latter, what was the precise condition precedent and was the condition fulfilled on the facts of the case?