Stockco Agricapital Pty Ltd v Sugarloaf Nominees Pty Ltd and Others [2019] NSWDC 12

Stockco Agricapital Pty Ltd v Sugarloaf Nominees Pty Ltd and Others [2019] NSWDC 12

The conciliation requirement in clause 16 of the MLA is uncertain and unenforceable, but is severable. The core arbitration agreement remains valid and refers the parties' dispute to arbitration. There are no grounds to refuse a stay pursuant to s 8 of the Commercial Arbitration Act 2010. Proceedings against the guarantors are stayed to avoid duplicative litigation, pending outcome of the arbitration. Reference to the Civil Procedure Act 2005 in the arbitration clause does not preclude enforceability of the agreement.

Jurisdiction
Australia
Judgment Date
11 February 2019
Procedural Posture
Interlocutory Motion (stay and Referral to Arbitration) in Civil Proceedings / Interlocutory Application for Stay and Referral to Arbitration; Decision on Motion
Outcome
Proceedings between plaintiff and first defendant referred to arbitration; proceedings against second to fifth defendants stayed pending arbitration; plaintiff to pay defendants’ costs of the motion if recoverable legal costs.
Legal Topics
['enforceability of Arbitration Agreements' 'stay of Proceedings' 'severance of Alternative Dispute Resolution Clauses' 'guarantees and Sureties']
['commercial Law' 'arbitration' 'civil Procedure'] ['enforceability of Arbitration Agreements' 'stay of Proceedings' 'severance of Alternative Dispute Resolution Clauses' 'guarantees and Sureties']

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Procedural Posture

Interlocutory Motion (stay and Referral to Arbitration) in Civil Proceedings / Interlocutory Application for Stay and Referral to Arbitration; Decision on Motion

Legal Issues

  1. 1 ['Is the arbitration clause in clause 16 of the MLA enforceable despite uncertainty in the conciliation requirement?' 'Should the proceedings be referred to arbitration pursuant to the Commercial Arbitration Act 2010?' 'Should the proceedings against the guarantors (second to fifth defendants) be stayed?' 'Does the reference to the Civil Procedure Act 2005 in the arbitration clause affect its enforceability?']

Ratio Decidendi

The conciliation requirement in clause 16 of the MLA is uncertain and unenforceable, but is severable. The core arbitration agreement remains valid and refers the parties' dispute to arbitration. There are no grounds to refuse a stay pursuant to s 8 of the Commercial Arbitration Act 2010. Proceedings against the guarantors are stayed to avoid duplicative litigation, pending outcome of the arbitration. Reference to the Civil Procedure Act 2005 in the arbitration clause does not preclude enforceability of the agreement.

Court Disposition

Proceedings between plaintiff and first defendant referred to arbitration; proceedings against second to fifth defendants stayed pending arbitration; plaintiff to pay defendants’ costs of the motion if recoverable legal costs.

Orders

  • ['The proceedings between the plaintiff and the first defendant are referred to arbitration.' 'The proceedings between the plaintiff and each of the second to fifth defendants are stayed pending the resolution of the arbitration between the plaintiff and the first defendant or until further order of the Court.' 'The...