The Hong Kong Court of Appeal has refused to stay to arbitration a court action brought on a dishonoured cheque because of an arbitration clause in the underlying loan agreement between.
[co-author: Carrie Yiu]
In
T v W (HCA 366/2020, [2020] HKCFI 2918), the Hong Kong Court of First Instance considered the interesting question of whether a claim made on a dishonoured cheque was caught by and fell within the application of an arbitration clause in the underlying loan agreement in respect of which the cheque was issued.
The Loan Agreement and the Cheque
On 22 March 2019, the Plaintiff (as the lender) and the Defendant (as the borrower) entered into an agreement for a loan of HK$5 million with monthly interest of 2.5% (the “
Loan Agreement”).
The Loan Agreement provided that the governing law of the agreement was Hong Kong law, and that any dispute should be arbitrated in Hong Kong. (Unfortunately, the judgment does not quote the actual wording of the arbitration clause. The judgment says simply that the underlying Loan Agreement provided that “any dispute should be arbitrated in Hong Kong”: para 4 of the judgment.)