Construction Law Asia

July 2011

In this edition

A crack opens: calling of on demand bonds?

Law and practice established over many years has held that the ground to restrain a beneficiary from making an on demand bond is limited to fraud, either fraud at the bank or fraud by the giver of the demand.

In the recent case Simon Carves Ltd v Ensus UK Ltd [2011] EWHC 657 (TCC), a contractor obtained an interim injunction to prevent an employer from seeking payment under an on demand bond in circumstances where there was no fraud.
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The New Buildings Energy Efficiency Ordinance - Owners Beware!

In line with the recent trend towards energy preservation and environmental awareness, new legislation has been enacted with the aim of improving the energy efficiency standards of new buildings in Hong Kong.

The Buildings Energy Efficiency Ordinance (Cap. 610) (‘BEEO’) was gazetted on 3 December 2010 and came into operation on 21 February 2011, with the exception of Parts 2 to 6 of it which are expected to take effect from 21 September 2012. Under the Ordinance, owners and developers of buildings would face stiff fines and penalties for non-compliance with specified energy efficiency standards. BEEO focuses on energy efficiency for air conditioning, electrical, lift and escalator and lighting installations. In this article, we examine the key aspects of the BEEO, highlighting important issues for owners and developers.
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International Arbitration: Public policy ground against enforcement of foreign jurisdiction awards

The "contrary to public policy" ground under the New York Convention is seen by many as the last resort for resisting enforcement of a foreign arbitral award. It has been tried (unsuccessfully) on many occasions in jurisdictions worldwide. A recent Hong Kong court decision provides some guidance on when it might actually work.
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How reasonable is a reasonable settlement sum?

When things go wrong in a construction project, multiparty contractual relationships almost inevitably increase the difficulty of achieving a negotiated settlement. On the other hand, the motivations for settlement may remain strong, often in the hope of avoiding significant legal costs, saving time and preserving existing business relationships.
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