IRONSANDS INVESTMENTS LTD V TOWARD INDUSTRIES LTD HC AK CIV-2011-404-1289

IRONSANDS INVESTMENTS LTD V TOWARD INDUSTRIES LTD HC AK CIV-2011-404-1289

The High Court struck out CKI's challenges because (1) the art 34(6) fraud/corruption ground requires actual dishonesty/deliberate concealment and unexplained or negligent non‑disclosure of documents did not meet that standard and thus could not excuse the time bar or permit setting aside the liability award; (2) the arbitrator was entitled to prefer the evidence he accepted on quantum and weight of invoices falls within the tribunal's domain, and cl 5(10) precludes court re‑examination of whether an award was supported by sufficient evidence; and (3) clause 12.14 unambiguously provided that monetary compensation for warranty breach is a reduction/refund of the purchase price, so where no...

Citation
openlaw-c20ef0fe_155a_4654_a297_f4c0e7723ee6.pdf
Parties
First Applicant: IRONSANDS INVESTMENTS LIMITED; Second Applicant: CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED; First Respondent: TOWARD INDUSTRIES LIMITED; Second Respondent: NEW ZEALAND STEEL LIMITED
Court
High Court
Jurisdiction
New Zealand
Judgment Date
8 June 2012
Procedural Posture
Applications to Set Aside Arbitral Awards Under the Arbitration Act 1996 / Strike‑out Applications (high Court Hearing)
Outcome
Applications by IRONSANDS/Cheung Kong to set aside the liability and quantum awards struck out; CKI's further challenge to the cancellation ruling abandoned
Legal Topics
Setting Aside Arbitral Awards, Fraud and Corruption Threshold, Non‑disclosure of Documents, Natural Justice in Arbitration, Interpretation of Contractual Set‑off Clause (cl 12.14), Damages and Mitigation
Arbitration Contract Law Civil Procedure Public Policy Administrative Law (natural Justice) Setting Aside Arbitral Awards Fraud and Corruption Threshold Non‑disclosure of Documents +3 more

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Parties

IRONSANDS INVESTMENTS LIMITED

First Applicant

CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED

Second Applicant

TOWARD INDUSTRIES LIMITED

First Respondent

NEW ZEALAND STEEL LIMITED

Second Respondent

Procedural Posture

Applications to Set Aside Arbitral Awards Under the Arbitration Act 1996 / Strike‑out Applications (high Court Hearing)

Legal Issues

  1. 1 Whether alleged post‑award discovery/non‑disclosure of documents rendered tribunal's liability award induced or affected by fraud or corruption under art 34(6) of the Arbitration Act 1996
  2. 2 Whether unexplained or negligent non‑disclosure can satisfy the fraud/corruption exception to the three month limitation
  3. 3 Whether parts of the quantum award were made in breach of natural justice for lack of probative evidence

Ratio Decidendi

The High Court struck out CKI's challenges because (1) the art 34(6) fraud/corruption ground requires actual dishonesty/deliberate concealment and unexplained or negligent non‑disclosure of documents did not meet that standard and thus could not excuse the time bar or permit setting aside the liability award; (2) the arbitrator was entitled to prefer the evidence he accepted on quantum and weight of invoices falls within the tribunal's domain, and cl 5(10) precludes court re‑examination of whether an award was supported by sufficient evidence; and (3) clause 12.14 unambiguously provided that monetary compensation for warranty breach is a reduction/refund of the purchase price, so where no...

Court Disposition

Applications by IRONSANDS/Cheung Kong to set aside the liability and quantum awards struck out; CKI's further challenge to the cancellation ruling abandoned

Orders

  • Liability award challenge (CIV‑2011‑404‑002012) struck out
  • Quantum award challenge (CIV‑2011‑404‑006843) struck out