- Hong Kong—court stays third-party proceedings against insurer in favour of arbitration (Lau Lan Ying v Top Hill Co)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- On construction of the arbitration clause
- On stay of proceedings in favour of arbitration
- On public policy
- Case details
Arbitration analysis: This case involved an insurer’s application to stay third-party proceedings in favour of arbitration pursuant to an arbitration clause in an employee compensation insurance policy. The third-party proceedings were concerned with the insurer’s indemnity/contribution in respect of a subcontractor employee’s claims against the principal contractor, the insured, in the main action. The court offered guidance as to the principles of construction of an arbitration clause in an insurance context and the policy rationale behind the court’s power to grant a mandatory stay under section 20 of the Arbitration Ordinance (Cap 609) (AO). The court held that the subject matter of the third-party proceedings was a matter arising out of the insurance policy and fell squarely within the ambit of its arbitration clause. The court did not find that there were countervailing public policy considerations under the statutory employee compensation scheme which would render the proceedings non-arbitrable. The court granted the stay of third-party proceedings and referred the parties to arbitration. Written by Paul Starr, co-head of International Arbitration, at King & Wood Mallesons and Felicity Ng, associate, at King & Wood Mallesons.
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