International Petroleum Investment Company v Independent Public Business Corporation of Papua New Guinea [2015] NSWCA 363

International Petroleum Investment Company v Independent Public Business Corporation of Papua New Guinea [2015] NSWCA 363

Where only one Independent Valuer produces a binding determination and that determination confirms or approximates VWAP, and no valid alternative value is provided, the Current Market Value is the VWAP Value as determined under the bond deed. No further determination is permitted. The contractual mechanisms control, and absent manifest or proven error, the outcome reverts to VWAP. Judicial or referee valuation is not appropriate where contract machinery has not failed.

Jurisdiction
Australia
Judgment Date
26 November 2015
Procedural Posture
Appeal / Court of Appeal Decision
Outcome
Appeal allowed; cross-appeal and notice of contention dismissed.
Legal Topics
['construction of Contracts' 'valuation Methodology' 'bonds and Financing Arrangements']
['contract'] ['construction of Contracts' 'valuation Methodology' 'bonds and Financing Arrangements']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Appeal / Court of Appeal Decision

Legal Issues

  1. 1 ["Proper construction of 'market value' in bond deed" "Whether the Independent Valuer's determination was binding under contractual terms" "Entitlement to further valuation if Independent Valuer's determination flawed" 'Appropriateness of court or referee determination where mechanism fails']

Ratio Decidendi

Where only one Independent Valuer produces a binding determination and that determination confirms or approximates VWAP, and no valid alternative value is provided, the Current Market Value is the VWAP Value as determined under the bond deed. No further determination is permitted. The contractual mechanisms control, and absent manifest or proven error, the outcome reverts to VWAP. Judicial or referee valuation is not appropriate where contract machinery has not failed.

Court Disposition

Appeal allowed; cross-appeal and notice of contention dismissed.

Orders

  • ['The appeal is allowed.' 'Orders 3, 4, 5 and 6(ii) of Hammerschlag J set aside; in lieu, the defendant to pay the plaintiff AUD 40,303,856.33 plus interest from 3 April 2014 at the Default Rate specified in Condition 6.4 of the Bond Deed.' "The defendant to pay the plaintiff's costs of the proceedings." 'The...