Construcciones y Auxiliar de Ferrocarriles S.A. v CPB Contractors Pty Limited [2022] NSWSC 1264

Construcciones y Auxiliar de Ferrocarriles S.A. v CPB Contractors Pty Limited [2022] NSWSC 1264

The arbitration agreement in the contract is not inoperative or incapable of being performed; the proceedings and the dispute about the CAF Equipment Claim are the same, and both are subject to the contract's dispute resolution mechanism, which ends in arbitration. Discussion about preconditions (expert determination) can itself be arbitrated, and neither the conduct of the parties nor logistical delays render the agreement void or inapplicable. Therefore, a stay in favour of arbitration is ordered, with a condition preventing the defendant from arguing lack of jurisdiction based on failure to conduct expert determination.

Jurisdiction
Australia
Judgment Date
23 September 2022
Procedural Posture
Notice of Motion Seeking Stay Pending Arbitration / Determination of Stay Application in Supreme Court Before Arbitration
Outcome
Proceedings stayed pending arbitration; condition imposed that defendant not raise jurisdictional objection re: expert determination; costs to be determined by agreement or further submissions.
Legal Topics
['arbitration Agreement' 'stay of Proceedings' 'tiered Dispute Resolution' 'expert Determination' 'building and Construction Industry Security of Payment Act' 'interpretation of Contracts']
['commercial Law' 'arbitration' 'construction Law'] ['arbitration Agreement' 'stay of Proceedings' 'tiered Dispute Resolution' 'expert Determination' 'building and Construction Industry Security of Payment Act' 'interpretation of Contracts']

Case Brief

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Procedural Posture

Notice of Motion Seeking Stay Pending Arbitration / Determination of Stay Application in Supreme Court Before Arbitration

Legal Issues

  1. 1 ['Whether proceedings should be stayed in favour of arbitration under s 7(2) of the International Arbitration Act 1974 (Cth)' 'Whether the dispute is distinct from or the same as the underlying CAF Equipment Claim' 'Whether the arbitration agreement is inoperative or incapable of being performed due to alleged failure to satisfy precondition of expert determination']

Ratio Decidendi

The arbitration agreement in the contract is not inoperative or incapable of being performed; the proceedings and the dispute about the CAF Equipment Claim are the same, and both are subject to the contract's dispute resolution mechanism, which ends in arbitration. Discussion about preconditions (expert determination) can itself be arbitrated, and neither the conduct of the parties nor logistical delays render the agreement void or inapplicable. Therefore, a stay in favour of arbitration is ordered, with a condition preventing the defendant from arguing lack of jurisdiction based on failure to conduct expert determination.

Court Disposition

Proceedings stayed pending arbitration; condition imposed that defendant not raise jurisdictional objection re: expert determination; costs to be determined by agreement or further submissions.

Orders

  • ['Pursuant to s 7(2) of the International Arbitration Act 1974 (Cth) these proceedings be stayed pending referral of the subject-matter to arbitration or until further order.' 'It is a condition of the stay that the defendant not raise as a defence in any such arbitration that the arbitral tribunal lacks...