HIGH COURT OF AUSTRALIA RULES ON INTERPRETATION OF ARBITRATION CLAUSES

In an important and clarifying decision, the High Court of Australia has handed down its decision in Rinehart & Anor v Hancock Prospecting Pty Ltd & Ors.1

The decision is significant for the conduct of international arbitration in Australia because:

  1. the High Court held that the phrase “any dispute under this deed” in an arbitration clause was sufficiently broad in the context of the deeds in question to encompass disputes about the validity of the arbitration agreement as well as substantive claims; and
  2. the High Court found that in this case, third parties who were not contractual parties to the deed in question, but who wished to rely on certain releases and clauses in the deed containing the arbitration agreement could be treated as a party to the arbitration under the Commercial Arbitration Act 2010 (NSW) (Commercial Arbitration Act).

Continue reading

NSW Supreme Court refuses indemnity costs on successful application for referral to arbitration

Justice Hammerschlag of the New South Wales Supreme Court (the Court) has refused to award indemnity costs to parties which successfully obtained a stay of proceedings in favour of arbitration: John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd (No 2) [2015] NSWSC 565. 

The decision was made in the context of a domestic arbitration regulated by the Commercial Arbitration Act 2010 (NSW), although, as his Honour noted in the course of the judgment [t]he International Arbitration Act and the suite of State and Territory Commercial Arbitration Acts enacted since 2010 are generally intended to give effect to the UNCITRAL Model Law on International Commercial Arbitration.  Good policy suggests that absent clear legislative intent to the contrary, construing them so as to result in incongruent outcomes should be avoided. 

In rejecting the application for indemnity costs, the Court declined to follow the approach taken in other regional jurisdictions.

Continue reading