Philips Hong Kong, Ltd. (Hong Kong) v. Hyundai Electronics Industry Co. (Hong Kong)

Philips Hong Kong, Ltd. (Philips) (plaintiff) and Hyundai Electronics Industry Co. (Hyundai) (defendant) entered into a contract containing an arbitration clause. The arbitration clause stated that disputes would be resolved by a single arbitrator mutually chosen by the parties, or if the parties could not agree, the appointment would be made either by the chairman of the Hong Kong General Chamber of Commerce or pursuant to the arbitration rules of the International Chamber of Commerce (ICC). The arbitration clause further provided that arbitration would be conducted according to the Hong Kong Arbitration Ordinance (the ordinance). The Hong Kong General Chamber of Commerce declined a request to appoint an arbitrator, stating that it no longer handled arbitrator appointments. The parties never approached the ICC to seek an arbitrator appointment. Philips filed an action in Hong Kong Supreme Court requesting that the court appoint an arbitrator under § 12(1) of the ordinance. Philips also argued that the provision giving the ICC appointing authority was surplusage because the arbitration agreement stated that arbitration proceedings would be conducted pursuant to the ordinance, not ICC rules, and an ICC appointment would introduce entirely new procedures that would not apply or would conflict with the ordinance. Hyundai argued in response that § 12(1) of the ordinance was not applicable, because § 12(2) directly applied to situations in which a selected third-party appointing authority failed to appoint an arbitrator. Hyundai argued that under § 12(2), the court should dismiss Philip’s application for a court-appointed arbitrator because the ICC had not yet refused a request to appoint an arbitrator.