Cases & Deals

Hyundai Engineering & Construction obtains favorable ruling from Hong Kong Court of Final Appeal in construction contract dispute

Clients Hyundai Engineering & Construction Co.

Jones Day successfully represented Hyundai Engineering & Construction Co. before the Hong Kong Court of Final Appeal in relation to contractual claims by a subcontractor arising out of the construction of Container Terminal 9 in Hong Kong. The case alleged claims arising out of a contract for the disposal of approximately five million cubic meters of contaminated mud in Mainland China as part of the construction of the terminal.

The subcontract was terminated after the Environmental Protection Department of Hong Kong refused permission for dumping contaminated mud outside of Hong Kong waters because of concerns by Green Peace and the Hong Kong government over monitoring and environmental protection requirements by Mainland authorities. The subcontractor then claimed payment and damages in excess of US$40 million resulting from the termination.

Hyundai succeeded at first instance, but the Court of Appeal reversed the decision. Jones Day was then engaged and successfully obtained leave for appeal to the Court of Final Appeal in November 2012, overcoming the high threshold of persuading the court that the case involved questions of great public importance; in particular, the extent to which a court should take into account the commercial expectations of parties when interpreting a contract.

The Court of Final Appeal held that the question before it involved important issues under Hong Kong contract law (which remains deeply rooted in English law) and granted leave.

The substantive appeal hearing was held on August 26, 2013 before five appellate judges. Reasons for the decision were handed down on September 20, holding unanimously in favor of Hyundai's interpretation of the contract.

Jones Day's team was led by Phillip Georgiou with assistance from Ostiane Goh-Livorness and Sonny Payne. Charles Manzoni SC, QC and Elizabeth Cheung, both of Temple Chambers in Hong Kong, were instructed by Jones Day.