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Supreme Court, New South Wales, Equity – Commercial List, 29 April 2022, File Number 2022/55988

(WCX M4-M5 Link AT Pty Ltd in its personal capacity and in its capacity as trustee of the WCX M4-M5 Link Asset Trust et al. v. Acciona Infrastructure Projects Australia Pty Ltd et al.)

29 - 04 - 2022

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Yearbook Yearbook Commercial Arbitration, S. W. Schill (ed.), Vol. XLVIII (2023)
Jurisdiction Australia
Summary

In a dispute arising in respect of back-to-back deeds concerning the construction of a series of tunnels (the Deeds), the Court was seized with an application to enjoin the defendants from referring the dispute to expert determination and then arbitration – in accordance with the tiered dispute resolution procedure established in the Deeds – before a dispute over the jurisdiction of the expert was decided. The Court granted the defendant’s request to stay the proceedings because of the parties’ agreement to arbitrate in the agreed tiered dispute resolution procedure. It determined that, contrary to the plaintiffs’ contention, the arbitration agreement in question was “operative”, notwithstanding the fact that the expert determination phase envisaged by the tiered dispute resolution procedure agreed to by the parties had yet to be undertaken. The Court held that the failure to complete preliminary steps to arbitration in a tiered dispute resolution clause did not render the arbitration agreement “inoperative” for the purposes of Sect. 8(1) of the Commercial Arbitration Act (mirroring Art. II(3) of the 1958 New York Convention). To consider the arbitration agreement “inoperative” in such circumstances, the Court explained, would undermine the object of Australian arbitration law and depart from the interpretation of the term under the 1958 New York Convention, and in UNCITRAL Model Law jurisdictions. In particular, according to the Court, the approach suggested by the plaintiffs would have allowed a party to evade its agreement to submit disputes to arbitration by commencing court proceedings before the preliminary steps had been completed. The Court then rejected the plaintiffs’ application for injunctive relief, finding that the question of the order in which related disputes should be resolved was for the expert/arbitrator, not the courts, in accordance with the tiered dispute resolution procedure established in the Deeds. The plaintiffs had relied on a section of the Deeds which entitled the parties to seek “urgent” interlocutory relief from courts, but the plaintiffs’ application in the present case did not meet that “urgent” requirement. Although the Court opined that the plaintiffs’ case for hearing the jurisdiction dispute first was “compelling”, this was a procedural issue for the expert and then arbitrator to decide in accordance with the rules of the dispute resolution institution to which the parties had agreed to submit disputes for the expert determination phase. The plaintiffs’ argument that the Expert Determination Rules of the institution in question allowed for recourse to the court on a preliminary question of jurisdiction or law failed: the rule on which the plaintiffs relied presupposed that the expert determination process had already begun before a party applied to the court, the Court explained, and this was not the case here.

Related topics
217

The court discusses the meaning and effect of the referral of the resolution of disputes to arbitration, including: who can ask for referral and when, whether a party has waived its right to request arbitration, the defense that there was no contract at all; whether there was a condition precedent to the commencement of arbitration (e.g. mediation), stay of proceedings v. compelling arbitration, and national procedural specificities such as remand and removal (US), effect of class action. etc.

Referral to arbitration in general
220

The court discusses how to interpret the Convention’s requirement that the agreement is not null and void etc., as well as specific cases of invalidity: e.g., lack of consent (misrepresentation, duress, or fraud), vague wording of the arbitral clause; other terms of the contract contradict the intention to arbitrate, etc.

"Null and void", etc.
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