上海佳船机械设备进出口有限公司 v. 美克斯海洋工程设备股份有限公司

At a glance

Parties

上海佳船机械设备进出口有限公司 (Shanghai Jiachuan Machinery Equipment Import & Export Co., Ltd., "Jiachuan") v. 美克斯海洋工程设备股份有限公司 (Max Ocean Engineering Equipment Co., Ltd., "Max"; in bankruptcy, represented by its bankruptcy administrator)

Case no.

(2019)浙04协外认2号

Court

Jiaxing Intermediate People's Court, Zhejiang Province, China

Forum and rules

Application to recognise a foreign award under the New York Convention and Article 283 of the PRC Civil Procedure Law

Underlying award(s)

Award of 14 May 2018 by sole arbitrator Clive Aston (London Maritime Arbitrators Association (LMAA) ad hoc arbitration, London) on the shipbuilding contract of 15 June 2015 for hull DJHC8009

Treaty

New York Convention (Article V(1)(b), V(1)(d), V(2)(b))

Court

Presiding judge 张涛 (Zhang Tao); judges 杨剑 (Yang Jian), 王黎明 (Wang Liming)

Sector

Shipbuilding; offshore engineering platform

Outcome

The award was recognised as legally effective in the People's Republic of China (1 July 2020).

Amount

Award: USD 8,010,405.08 plus interest and other sums, payable by Max to Jiachuan and Jiangsu Dajin. Contract price: USD 58 million. The court application fee of RMB 500 was charged to Max.

The dispute

On 15 June 2015, Jiachuan (the main contractor) and Jiangsu Dajin Heavy Industry Co., Ltd. (the builder), as joint sellers, signed a contract with Max, the buyer, to build an offshore self-elevating multi-purpose work platform, hull DJHC8009, for USD 58 million. Clause 12 chose English law and provided for LMAA arbitration before three arbitrators. A dispute arose over performance of the contract. The sellers began arbitration on 24 November 2017. Max did not appoint an arbitrator, so the sellers' appointee, Clive Aston, became sole arbitrator under section 17 of the English Arbitration Act 1996. On 14 May 2018 he ordered Max to pay USD 8,010,405.08 plus interest. When Jiachuan applied for recognition in China, Max raised four objections: (1) it had been unable to present its case because the tribunal did not stay the arbitration while its action on the validity of the arbitration clause was pending before the Shanghai Maritime Court; (2) a sole arbitrator breached the agreement for three arbitrators; (3) the required LMAA "list of issues" exchange was skipped; (4) Jiachuan had concealed the true contract price, so the resale loss found in the award was wrong.

Key holdings

1. The court had jurisdiction. The award came from an ad hoc arbitration seated outside China, so Article 545 of the Supreme People's Court Interpretation and Article 283 of the Civil Procedure Law apply. The court sits where Max is domiciled. Because China and the UK are both parties to the New York Convention, the Convention governs the review. pp. 7
2. Article V(1)(b) does not apply: Max was not deprived of the chance to present its case. Max filed no defence within the 28 days allowed by Schedule 2 of the LMAA Terms 2017. The arbitrator then extended the deadline several times and warned Max of the consequences. Max's only response was an email of 27 April 2018 asking for a stay and alleging that the price had been concealed. pp. 7–8
3. Article V(1)(d) does not apply to the make-up of the tribunal. Clause 12 did not say what happens if a party fails to appoint an arbitrator. In that situation Article 10 of the LMAA Terms 2017 and section 17 of the Arbitration Act 1996 govern. Jiachuan gave the required notices, so its appointee could properly act as sole arbitrator. pp. 8–9
4. Skipping the exchange of the list of issues did not breach the agreed procedure. Under Article 14 of the LMAA Terms 2017, the tribunal may adjust the standard procedure in Schedule 2 at any time. That step is not mandatory, and it could be dropped because Max never filed a defence. pp. 9–10
5. Article V(2)(b) public policy is not breached. Max never raised a formal jurisdictional objection in the arbitration. The arbitrator found the clause valid under English law, and the Shanghai Maritime Court also held the clause valid in ruling (2017)沪72民特182号之一. So continuing the arbitration did not harm Chinese judicial jurisdiction. pp. 10–11
6. The claim that Jiachuan concealed evidence (its link with H&C and the true price) is not a ground under Article V(1). It would affect only the amount of damages, which is not enough to breach public policy. The award was recognised, and Max bears the RMB 500 fee. pp. 11–12

Procedural history

1. 15 June 2015Shipbuilding contract for hull DJHC8009 signed, with an LMAA arbitration clause (clause 12).
2. 23–24 November 2017Sellers appoint Clive Aston as their arbitrator and give Max notice of the arbitration.
3. 21–28 December 2017Max tells the arbitrator that it has sued in the Shanghai Maritime Court over the validity of the arbitration clause. The sellers serve a section 17 notice under the Arbitration Act 1996.
4. 4 January 2018Clive Aston confirms his appointment as sole arbitrator.
5. 7 May 2018The Shanghai Maritime Court rules the arbitration clause valid.
6. 14 May 2018Award: Max is to pay USD 8,010,405.08 plus interest.
7. 19 August 2019The Jiaxing Intermediate People's Court registers the recognition application. A hearing is held on 30 August 2019.
8. 1 July 2020Ruling recognising the award in China.

Tribunal, counsel and experts

Decided by

• Clive Aston Sole arbitrator, LMAA arbitral tribunal — appointed by the claimant (appointed by the sellers; became sole arbitrator under s. 17 of the Arbitration Act 1996 after Max failed to appoint)

For the claimant

上海中派律师事务所 · 上海佳船机械设备进出口有限公司 (in-house)

For the respondent

浙江峻德律师事务所

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Keywords

• recognition of foreign award
• New York Convention
• Article V(1)(b)
• Article V(1)(d)
• public policy
• LMAA
• LMAA Terms 2017
• ad hoc arbitration
• sole arbitrator
• section 17 Arbitration Act 1996
• default appointment
• list of issues
• shipbuilding contract
• offshore jack-up platform
• Shanghai Maritime Court
• validity of arbitration clause
• judicial sovereignty
• China

Summary generated with AI from the published documents — refer to the award for the authoritative text.