SAVVY VINEYARDS 4334 LIMITED v WETA ESTATE LIMITED [2017] NZHC 1111

SAVVY VINEYARDS 4334 LIMITED v WETA ESTATE LIMITED [2017] NZHC 1111

The Court applied a prima facie test and found that clause 25.7 constituted an arbitration agreement that remained prima facie operative because the procedural cancellation route in clause 25 was not followed; accordingly the Court stayed the fourth and fifth causes of action and referred those disputes to arbitration, ordered the plaintiffs to provide security for costs of NZD 12,800 as a first tranche within 10 working days, stayed the proceeding pending provision of that security, and dismissed the defendants' strike out application.

Citation
[2017] NZHC 1111
Parties
First Plaintiff: Savvy Vineyards 4334 Limited; Second Plaintiff: Savvy Vineyards 3552 Limited; First Defendant: Weta Estate Limited; Second Defendant: Tirosh Estate Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
26 May 2017
Procedural Posture
Commercial Contract Dispute (vineyard Management and Grape Supply Agreements) / Interlocutory Applications (stay, Security for Costs, Strike Out)
Outcome
Partially granted: stay of VMAs claims and referral to arbitration; security for costs ordered; strike out application dismissed; costs reserved.
Legal Topics
Arbitration Stay, Interpretation of Arbitration Clause, Contract Termination, Repudiation, Security for Costs, Strike Out Pleadings, Contractual Remedies Act
Arbitration Contract Law Civil Procedure Commercial Law Arbitration Stay Interpretation of Arbitration Clause Contract Termination Repudiation +3 more

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Parties

Savvy Vineyards 4334 Limited

First Plaintiff

Savvy Vineyards 3552 Limited

Second Plaintiff

Weta Estate Limited

First Defendant

Tirosh Estate Limited

Second Defendant

Procedural Posture

Commercial Contract Dispute (vineyard Management and Grape Supply Agreements) / Interlocutory Applications (stay, Security for Costs, Strike Out)

Legal Issues

  1. 1 Whether clause 25 of the VMAs constituted an arbitration agreement enforceable under the Arbitration Act 1996
  2. 2 Whether the arbitration clause survived cancellation/termination of the principal contract or became inoperative
  3. 3 Whether a stay of court proceedings and referral to arbitration was mandatory under Schedule 1 Article 8(1) of the Arbitration Act 1996

Ratio Decidendi

The Court applied a prima facie test and found that clause 25.7 constituted an arbitration agreement that remained prima facie operative because the procedural cancellation route in clause 25 was not followed; accordingly the Court stayed the fourth and fifth causes of action and referred those disputes to arbitration, ordered the plaintiffs to provide security for costs of NZD 12,800 as a first tranche within 10 working days, stayed the proceeding pending provision of that security, and dismissed the defendants' strike out application.

Court Disposition

Partially granted: stay of VMAs claims and referral to arbitration; security for costs ordered; strike out application dismissed; costs reserved.

Orders

  • The plaintiffs' fourth and fifth causes of action are stayed and the plaintiffs' claims and disputes in relation to unpaid invoices under the vineyard management agreements are referred to arbitration.
  • The plaintiffs shall, within 10 working days, provide as a first tranche of security for the plaintiffs' joint costs security of NZD 12800 to the satisfaction of the Registrar.