Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd - [2013] WASCA 66

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: CAPE LAMBERT RESOURCES LTD -v- MCC AUSTRALIA SANJIN MINING PTY LTD [2013] WASCA 66

CORAM: MARTIN CJ
McLURE P
BUSS JA

HEARD: 18 OCTOBER & 4 DECEMBER 2012

DELIVERED : 12 MARCH 2013

FILE NO/S: CACV 98 of 2012

BETWEEN: CAPE LAMBERT RESOURCES LTD
MT ANKETELL PTY LTD
Appellants
AND
MCC AUSTRALIA SANJIN MINING PTY LTD
First Respondent
MCC MINING (WESTERN AUSTRALIA) PTY LTD
Second Respondent
METALLURGICAL CORPORATION OF CHINA LIMITED
Third Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :CORBOY J
Citation  :CAPE LAMBERT RESOURCES LTD -v- MCC AUSTRALIA SANJIN MINING PTY LTD [2012] WASC 228
File No  :CIV 2408 of 2010

Catchwords:

International commercial arbitration - Interim orders - Refusal to award payment into escrow as a condition of stay of proceedings or as an interim or supplementary order - Interim powers of court when parties have agreed that disputes be referred to arbitration - Proper construction of clause referring disputes to arbitration - Conditions that may be placed on a stay of proceedings

Legislation:

Commercial Arbitration Act 1985 (WA), s 53
International Arbitration Act 1974 (Cth), s 2D, s 7, s 16, s 21, s 39
United Nations Commission on International Trade Law - Model Law on International Arbitration, Art 1, Art 9, Art 17J

Result:

Leave to appeal granted
Notice of contention upheld
Appeal dismissed

Category: A

Representation:

Counsel:

Appellants:     Mr A J Myers QC & Mr M P Bruce
First Respondent           :     Dr A S Bell SC & Mr C W Lockhart
Second Respondent      :     Dr A S Bell SC & Mr C W Lockhart
Third Respondent          :     Dr A S Bell SC & Mr C W Lockhart

Solicitors:

Appellants:     Bennett & Co
First Respondent           :     Corrs Chambers Westgarth
Second Respondent      :     Corrs Chambers Westgarth
Third Respondent          :     Corrs Chambers Westgarth

Case(s) referred to in judgment(s):

Abigroup Contractors Pty Ltd v Transfield Pty Ltd [1998] VSC 103; (1998) 217 ALR 435
ACD Tridon Inc v Tridon Australia Pty Ltd [2002] NSWSC 896
Allen v Henry [1999] VSC 238
Ansett Australia Ltd v Malaysian Airline System [2008] VSC 109; (2008) 217 FLR 376
Ashville Investments Ltd v Elmer Contractors Ltd [1989] QB 488; [1988] 2 All ER 577
Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153
Canadian National Railway Co v Lovat Tunnel Equipment Inc (1999) 174 DLR (4th) 385
Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2012] WASC 228
Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2012] WASC 228(S)
Cetelem SA v Roust Holdings [2005] ECWA Civ 618; [2005] 4 All ER 52
Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] AC 334
Charrington & Co Ltd v Wooder [1914] AC 71
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
Comandate Marine Corp v Pan Australia Shipping Pty Ltd [2006] FCAFC 192; (2006) 157 FCR 45
Commonwealth of Australia v Cockatoo Dockyard Pty Ltd (1995) 36 NSWLR 662
Electra Air Conditioning BV v Seeley International Pty Ltd [2008] FCAFC 169
Fiona Trust and Holding Corporation v Privalov [2007] UKHL 40
Forge v Australian Securities and Investments Commission [2006] HCA 44; (2006) 228 CLR 45
Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160
Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216
Harris v Caladine (1991) 172 CLR 84
Hebei Import & Export Corporation v Polytek Engineering Co Ltd [1999] HKCFA 40
IBM Australia Ltd v National Distribution Services Pty Ltd (1991) 22 NSWLR 466
Knight v Henderson [1958] VR 134
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited [2007] HCA 61; (2007) 233 CLR 115
Larsen Oil and Gas Pte Ltd v Petropod Ltd [2011] SGCA 21
Leviathan Shipping Co Ltd v Sky Sailing Overseas Co Ltd [1998] 4 HKC 347
Lipman Pty Ltd v Emergency Services Superannuation Board [2011] NSWCA 163
Marnell Corrao Associates Inc v Sensation Yachts Ltd (2000) 15 PRNZ 608
McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579
Metcalf v Permanent Building Society (in liq) (1993) 10 WAR 145
Mitsubishi Motors Corporation v Soler Chrysler‑Plymouth Inc 473 US 614 (1985)
Moses H Cone Memorial Hospital v Mercury Construction Corporation 460 US 1 (1983)
NCC International AB v Alliance Concrete Singapore Pte Ltd [2008] 2 SLR(R) 565
O'Brien v Tanning Research Laboratories Inc (1988) 14 NSWLR 601
Oceanic Sun Line Special Shipping Co Inc v Fay (1987) 8 NSWLR 242
Onex Corp v Ball Corp (1994) 12 BLR (2d) 151
Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451
Paharpur Cooling Towers Ltd v Paramount (WA) Ltd [2008] WASCA 110
Pathak v Tourism Transport Ltd [2002] 3 NZLR 681
Permanent Building Society (in liq) v Wheeler (1992) 10 WAR 109
Photo Production Ltd v Securicor Transport Ltd [1980] AC 827
Rinehart v Welker [2012] NSWCA 95
Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] HCA 5; (2002) 240 CLR 45
Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332
The Owners of the Ship or Vessel, 'The Lady Muriel' v Transorient Shipping [1995] 2 HKC 320
Tjong Very Sumito v Antig Investments Pte Ltd [2009] 4 SLR(R) 732
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165
Transfield Philippines Inc & Ors v Pacific Hydro Limited [2006] VSC 175
Traxys Europe SA v Balaji Coke Industry Pvt Ltd (No 2) [2012] FCA 276; (2012) 201 FCR 535
United Group Rail Services Ltd v Rail Corporation New South Wales [2009] NSWCA 177
Walter Rau Neusser Oel und Fett AG v Cross Pacific Trading Ltd [2005] FCA 1102
Waterside Workers' Federation of Australia v JW Alexander Ltd (1918) 25 CLR 434
Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; (2011) 86 ALJR 1
WesTrac Pty Ltd v Eastcoast OTR Tyres Pty Ltd [2008] NSWSC 894; (2008) 219 FLR 461
Wilson v Metaxas [1989] WAR 285

MARTIN CJ:

Summary

Cape Lambert Resources Ltd and Mt Anketell Pty Ltd (together, the Cape Lambert parties) appeal from a decision of the primary judge refusing to order that Metallurgical Corporation of China Ltd (MCC) pay $80,000,000 into escrow either as a condition of the grant of a stay of proceedings which he ordered pursuant to s 7(2) of the International Arbitration Act 1974 (Cth) (the Act), or as an interim or supplementary order in the exercise of the powers conferred upon the court by s 7(3) of the Act. The appeal raises a number of issues with respect to the exercise of the powers of a court when the parties to an agreement have agreed that their disputes are to be referred to international arbitration for resolution. For the reasons which follow, the appeal should be dismissed.

The agreements

It is appropriate to set the context for a consideration of the issues which arise in this appeal by first outlining the commercial transactions which have given rise to the disputes between the parties and identifying the provisions in the agreements recording those transactions which are relevant.

The Asset Sale Agreement

By an agreement made on 11 June 2008, the Cape Lambert parties agreed to sell certain mining tenements and related assets to MCC Mining (Western Australia) Pty Ltd (MCC WA) (Asset Sale Agreement). The purchase price for the assets was $390,000,000, payable in three tranches. The first payment of $230,000,000 was payable on settlement, and the second payment of $80,000,000 was payable within 45 days of settlement. Both of those payments were made.
The third and final instalment of $80,000,000 was payable on terms set out in cl 3.5(c) and cl 3.6 of the Asset Sale Agreement which relevantly provide:
3.5 Payment of the Purchase Price
…
(c)[S]ubject to clause 3.6, $80,000,000 will be payable to the Seller in Immediately Available Funds without counterclaim or set off within seven days of the conditions described in schedule 2 (Approvals Conditions) being satisfied on terms satisfactory to the Buyer, acting reasonably, within two years of the date of this agreement.
3.6Payment for the Approvals Conditions
(a)The Buyer must act in good faith and use all reasonable endeavours to do all things reasonably requested by the Seller to assist it with the satisfaction of the Approvals Conditions in the time prescribed in clause 3.5(c).
(b)If:
(1) the Buyer breaches clause 3.6(a); or
(2)any event or occurrence outside of the control of the Seller results in the Seller being unable to satisfy Approval Conditions within the period prescribed in clause 3.5(c),
then
(3)the period prescribed in clause 3.5(c) will be extended by such time as the Seller can demonstrate to the Buyer's satisfaction, acting reasonably, that the Buyer's breach or the event or occurrence delayed the Seller's satisfaction of the Approval Conditions; and
(4)the Buyer must pay the Seller $80,000,000 in Immediately Available Funds without counterclaim or set off within seven days of the expiration of the period prescribed in clause 3.5(c).
Schedule 2 to the Asset Sale Agreement provides that the 'Approvals Conditions' are 'All Mining Approvals'.
Clause 16.2 of the Asset Sale Agreement specifies the law governing the agreement and the procedures to be followed by the parties in the event of a dispute. It provides:
16.2Governing Law and Dispute Resolution
(a)This agreement is governed by the laws of Western Australia.
(b)Subject to clause 16.2(d), the procedures prescribed in this clause 16 must be strictly followed to settle a dispute arising under this agreement.
(c)If any dispute arises out of or in connection with this agreement, including any question regarding the existence, validity or termination of this agreement;
(1)within ten Business Days of the dispute arising senior representatives from each party must meet in good faith, act reasonably and use their best endeavours to resolve the dispute by joint discussions;
(2)failing settlement by negotiation, either party may, by notice to the other party, refer the dispute for resolution by mediation:
(A)at the Singapore Mediation Centre (SMC) in Singapore;
(B)      under the SMC Mediation Procedures;
(C)      with one mediator;
(D)      with English as the language of the mediation; and
(E)with each party bearing its own costs of the mediation; and
(3)failing settlement by mediation, either party may, by notice to the other party, refer the dispute for final and binding resolution by arbitration:
(A)at the Singapore International Arbitration Centre (SIAC) in Singapore;
(B)under the United Nations Commission on International Trade Law Arbitration Rules (UNCITRAL) in force on the date of this agreement, which are deemed to be incorporated by reference into this clause;
(C)to the extent, if any, that the UNCITRAL do not deal with any procedural issues for the arbitration, the procedural rules in the SIAC Arbitration Rules in force on the date of this agreement will apply to the arbitration;
(D)with the substantive law of the arbitration being Western Australian law;
(E)with one Arbitrator;
(F)with English as the language of the arbitration; and
(G)with each party bearing its own costs of the arbitration.
(d)Nothing in this clause 16:
(1)prevents either party seeking urgent injunctive or declaratory relief from the Supreme Court of Western Australia in connection with the dispute without first having to attempt to negotiate and settle the dispute in accordance with this clause 16; or
(2)requires a party to do anything which may have an adverse effect on, or compromise that party's position under, any policy of insurance effected by that party.

The Novation Agreement

By an agreement dated 23 December 2009, the parties to the Asset Sale Agreement agreed to novate that agreement so as to substitute MCC Australia Sanjin Mining Pty Ltd (MCC Sanjin) for MCC WA (Novation Agreement). Under the terms of the Novation Agreement, MCC Sanjin was obliged to perform all of MCC WA's obligations under the Asset Sale Agreement (cl 2.2). The Novation Agreement further provided that the Cape Lambert parties were obliged to perform their obligations under the Asset Sale Agreement in favour of MCC Sanjin (cl 2.3).

The Guarantee Agreement

By an agreement also dated 23 December 2009, MCC agreed to guarantee the obligation to pay the final tranche of the purchase price due under the Asset Sale Agreement (Guarantee Agreement). The terms and conditions of the Guarantee Agreement include the following:
2.1Guarantee and indemnity
(a)Subject to clause 3(a), on and from the Start Date the Guarantor:
(i)guarantees for the benefit of the Beneficiaries the full, complete and prompt payment of each Guaranteed Obligation (allowing for any defence, set-off or counterclaim that MCC WA, or MCC Sanjin if the Principal Agreement is novated from MCC WA to MCC Sanjin, asserts) and indemnifies the Beneficiaries from and against all loss, damage, costs, claims and expenses suffered or incurred by the Beneficiaries by reason of MCC WA's, or MCC Sanjin's if the Principal Agreement is novated from MCC WA to MCC Sanjin, default, breach or non‑performance or non‑observance of any of the Guaranteed Obligations; and
(ii)within 24 hours of receiving a Valid Demand, must pay the Beneficiaries the Guaranteed Obligation that is the subject of the Valid Demand (all payment obligations must be satisfied by the payment of a bank cheque).
(b)Immediately upon receiving any amount under clause 2.1 (a)(ii) the Beneficiaries must:
(i)provide a receipt of payment to the Guarantor and MCC WA, or MCC Sanjin if the Principal Agreement is novated from MCC WA to MCC Sanjin; and
(ii)Release MCC WA, or MCC Sanjin if the Principal Agreement is novated from MCC WA to MCC Sanjin, from any obligation to pay that amount under the Principal Agreement.
For the purposes of the Guarantee Agreement, the Guarantor is MCC, the Beneficiaries are the Cape Lambert parties, and the Guaranteed Obligation is defined to mean, after novation, the obligation of MCC Sanjin to pay the final tranche of the purchase price under cl 3.5 of the Asset Sale Agreement. It is common ground that the 'Start Date', defined as the date on which all shares in MCC WA and MCC Australia Holdings are transferred to MCC, has occurred and the guarantee is in force.
Clause 3 of the Guarantee Agreement provides:
3Valid Demand
(a)The Guarantor is only liable to pay the Beneficiaries under clause 2.1(a) if:
(i)subject to clause 3(b), upon a Guaranteed Obligation becoming due under the Principal Agreement to the Beneficiaries:
(A)demands MCC WA, or MCC Sanjin if the Principal Agreement is novated from MCC WA to MCC Sanjin, to pay the Guaranteed Obligation;
(B) provides a copy of the demand to the Guarantor; and
(C)notifies MCC WA, or MCC Sanjin if the Principal Agreement is novated from MCC WA to MCC Sanjin, and the Guarantor of its intention to demand the Guarantor to pay the Guaranteed Obligation under this document; and
(ii)upon MCC WA, or MCC Sanjin if the Principal Agreement is novated from MCC WA to MCC Sanjin, failing to pay the Guaranteed Obligation in accordance with clause 3(a)(i)(A), the Beneficiaries demand the Guarantor to pay the Guaranteed Obligation, providing evidence substantiating the amount of the Guaranteed Obligation owed.
(b)If there is any dispute between the parties to this document regarding whether an amount is payable that amount will be paid into an escrow account organised by a solicitor that is independent from the parties (on such reasonable escrow terms as the parties may agree in good faith) and must be released as soon as practicable in accordance with the outcome or decision of the mediation or arbitration (as the case may be).
The provisions of cl 3(b) of the Guarantee Agreement relating to the payment of funds into escrow are central to the issues that arise in the appeal.
Clause 9.9 of the Guarantee Agreement makes provision for the governing law of the agreement and the procedures to be followed by the parties in the event of a dispute. It provides:
9.9Governing law and jurisdiction
(a)This document is governed by the laws of Western Australia.
(b)Subject to clause 9.9(c)(iii)(G), the procedures prescribed in this clause 9.9 must be strictly followed to settle a dispute arising under this document.
(c)If any dispute arises out of or in connection with this document, including any question regarding the existence, validity or termination of this document:
(i)within 10 Business Days of the dispute arising senior representatives from each party must meet in good faith, act reasonably and use their best endeavours to resolve the dispute by joint discussions;
(ii)failing settlement by negotiation, any party may, by notice to the other parties, refer the dispute for resolution by mediation:
(A)at the Singapore Mediation Centre (SMC) in Singapore;
(B)with one mediator;
(C)with English as the language of the Mediation; and
(D)with each party bearing its own costs of the mediation; and
(iii)failing settlement by mediation, any party may, by notice to the other parties, refer the dispute for final and binding resolution by arbitration:
(A)at the Singapore International Arbitration Centre (SIAC) in Singapore or in Hong Kong;
(B)under the United Nations Commission on International Trade Law Arbitration Rules (UNCITRAL) in force on the date of this agreement, which are deemed to be incorporated by reference into this clause;
(C)to the extent, if any, that UNCITRAL do not deal with any procedural issues for the arbitration, the procedural rules in the SIAC Arbitration Rules in force on the date of this agreement will apply to the arbitration;
(D)with the substantive law of the arbitration being Western Australian law;
(E)with one arbitrator;
(F)with English as the language of the arbitration; and
(G)with each party bearing its own costs of the arbitration.
(d)Nothing in this clause 9.9:
(i)prevents any party seeking urgent injunctive or declaratory relief from the Supreme Court of Western Australia in connection with the dispute without first having to attempt to negotiate and settle the dispute in accordance with this clause 9.9; or
(ii)requires a party to do anything which may have an adverse effect on, or compromise that party's position under, any policy of insurance effected by that party.
It will be noticed that the provisions of the Guarantee Agreement relating to the resolution of disputes are very similar to the equivalent terms of the Asset Sale Agreement. There are two material differences. First, under the Guarantee Agreement, an arbitration can take place in either Singapore or in Hong Kong, whereas under the Asset Sale Agreement, the arbitration is to take place in Singapore. Second, under the Asset Sale Agreement, the obligation of the parties to 'strictly follow' the dispute resolution procedures is subject to the provision which allows either party to seek urgent injunctive or declaratory relief from the Supreme Court of Western Australia without having first followed the dispute resolution procedures. However, under the Guarantee Agreement, read literally, the obligation to strictly follow the dispute resolution procedures is said to be subject to 'clause 9.9(c)(iii)(G)' which is a clause relating to the costs of an arbitration. It seems likely that there was a drafting error in the Guarantee Agreement, and that the parties intended the obligation to strictly follow the dispute resolution procedures to be subject to cl 9.9(d), which empowers any party to seek urgent injunctive or declaratory relief from the Supreme Court of Western Australia without first having followed the dispute resolution process specified by the Guarantee Agreement. Argument in the appeal was presented on this assumption, and these reasons proceed on the same assumption.

The disputes

The approvals required to allow mining to take place on the tenements the subject of the Asset Sale Agreement were not granted within the time specified by that agreement (within two years of entry into the Asset Sale Agreement, that is, by 11 June 2010). The Cape Lambert parties assert that this failure to obtain the mining approvals within the time prescribed was caused by the failure of each of MCC WA and MCC Sanjin to act in good faith and use all reasonable endeavours to do all things reasonably requested by the Cape Lambert parties to assist in procuring the grant of the approvals within the prescribed time, in breach of cl 3.6(a) of that agreement (Approvals Dispute). Alternatively, the Cape Lambert parties assert that the failure to obtain the required mining approvals within the prescribed time occurred by reason of events and occurrences outside their control. The Cape Lambert parties therefore assert that MCC Sanjin was liable to pay the balance of the purchase price ($80,000,000) without counterclaim or set‑off within seven days of 11 June 2010. The Cape Lambert parties assert that demand for payment of that amount was made by letter to MCC WA dated 14 June 2010, and again by letter from the Cape Lambert parties' solicitors to the solicitors for MCC Sanjin dated 30 July 2010 (30 July Letter). In the 30 July Letter, the Cape Lambert parties' solicitors advised the respondents' solicitors that they had instructions to make a demand under the Guarantee Agreement. The Cape Lambert parties further assert that by letter from the Cape Lambert parties' solicitors to MCC dated 10 August 2010, they made a demand for payment of $80,000,000 by MCC pursuant to the Guarantee Agreement. The Cape Lambert parties further assert that MCC has failed to perform its obligations under the Guarantee Agreement (Guarantee Dispute).

The dispute resolution proceedings

After the occurrence of the disputes, the Cape Lambert parties commenced proceedings in the Supreme Court of Western Australia. The dispute resolution procedures specified in the Asset Sale Agreement and the Guarantee Agreement were also invoked. Both the court proceedings and the dispute resolution procedures specified by the agreement have been protracted and tortuous. The information available to the court does not enable any assessment to be made with respect to the allocation of responsibility for the delays as between the parties. The Supreme Court must accept a significant share of the responsibility for the delay in the resolution of the issues the subject of this appeal. However, it seems that this delay has had no impact on the ultimate resolution of the disputes between the parties because, at the time the matter last came before this court, the dispute resolution procedures specified under the agreements had not reached the point where an arbitrator had been appointed, for a variety of reasons (appeal ts 116).

The court proceedings

The Cape Lambert parties commenced proceedings in this court by a writ issued on 7 September 2010. Each of the respondents (MCC Sanjin, MCC WA and MCC) is named as defendants to those proceedings, although no relief is sought against MCC WA. As against MCC Sanjin and MCC, the relief sought is declaratory, together with judgment in the amount of $80,000,000 plus interest. MCC has entered a conditional appearance to those proceedings, solely for the purposes of obtaining a stay, and has not otherwise submitted to the jurisdiction of the court.
On 29 September 2010, the respondents applied for a stay of the proceedings on the grounds that both the Asset Sale Agreement and the Guarantee Agreement contained dispute resolution procedures such as to constitute arbitration agreements, and that these arbitration agreements governed the disputes the subject of the proceedings. Although stays were sought under both the Commercial Arbitration Act 1985 (WA) (WA Act) and the Act, it is now common ground that the WA Act does not apply to the proceedings, due to the operation of s 21 of the Act (see [45] ‑ [46] below). The Cape Lambert parties responded to the application for a stay by applying for an interlocutory injunction requiring MCC to pay $80,000,000 into an escrow account (pursuant to the terms of cl 3(b) of the Guarantee Agreement) as a condition of any stay of the court proceedings, or in the alternative, as an interim or supplementary order granted in conjunction with a stay of the proceedings.
For reasons which it is unnecessary to recount, the cross‑applications were heard before the primary judge on 24 November 2010, and three times during 2011. The primary judge delivered reasons for his initial conclusion on 26 June 2012, although orders were ultimately made on 13 August 2012 for supplementary reasons published on 20 August 2012 - see Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd[2012] WASC 228(S). Delays of this magnitude are unacceptable in proceedings of this nature. The procedures of the court have been changed in order to eliminate the risk of any recurrence of delays of this magnitude in proceedings concerning commercial arbitration.

The reasons of the primary judge

The primary judge concluded that the dispute resolution procedures contained in the Asset Sale Agreement and the Guarantee Agreement each created a mandatory regime for the resolution of disputes rather than an optional procedure that might be invoked by one or other of the parties (Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2012] WASC 228 [54] ‑ [59]). He also concluded that each of those procedures was an arbitration agreement for the purposes of the Act, and that s 7(1)(d) of the Act was satisfied (at least in relation to the Guarantee Dispute) because MCC was, at the time the Guarantee Agreement was made, ordinarily resident in the People's Republic of China (PRC), a country party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (see sch 1 of the Act), and that the dispute arose out of a legal relationship that would be considered commercial under the national law of the PRC (reasons [41] ‑ [43]; [117] ‑ [122]).
The primary judge also concluded that the dispute over whether MCC was obliged to pay $80,000,000 into an escrow account (Escrow Dispute) was a dispute for the purposes of cl 9.9(c) of the Guarantee Agreement, and was therefore covered by the dispute resolution procedures specified in that clause (reasons [93] ‑ [95]). He also made a number of observations with respect to the competing contentions of the parties relating to the proper construction of the guarantee obligation in cl 2, but as he did not purport to resolve those competing contentions, it is unnecessary to relate the views expressed.
The primary judge concluded that orders should be made staying the proceedings against all of the respondents, and that MCC should be ordered to pay $80,000,000 into an escrow account as an interim order pursuant to s 7(3) of the Act. His reasons for that conclusion are at [130] ‑ [134], and involved the following process of reasoning.
First, he considered that it was reasonably arguable that a dispute could arise under the Guarantee Agreement contemporaneously with a dispute under the Asset Sale Agreement. Second, the obligation to pay funds into an escrow account was triggered by the existence of the Guarantee Dispute. In his Honour's view, the right to be preserved by the order which he proposed to make under s 7(3) of the Act was 'the right to have the Disputed Amount paid into an escrow account prior to and pending the outcome of the mediation - and to have any amount agreed to be paid to the plaintiffs in a mediation paid out of the account' (reasons [130]). However, the order proposed by his Honour was only intended to preserve the rights of the parties pending mediation. It was intended by his Honour that any arbitrator would be able to review the order of the court if requested to do so, although the mechanism by which that was to occur was not identified (and would have been problematic - see [26] ‑ [28] below).
His Honour considered that the balance of convenience favoured the grant of an interim order on the basis that it would give effect to a status quo which the parties intended would prevail during the dispute resolution process, and would enable the intention of the parties evident in cl 3(b) of the Guarantee Agreement to be given effect; that is, that the outcome of any mediation or arbitration could be immediately satisfied by payment of the funds held in escrow. The final step in the process of reasoning was his Honour's conclusion that damages would not be an adequate remedy.
His Honour also outlined the competing contentions of the parties with respect to the proper construction and effect of cl 3(b) of the Guarantee Agreement in the context of the dispute resolution procedures of each of the Guarantee Agreement and the Asset Sale Agreement. His Honour observed that those issues:
[S]hould be left to the arbitrator to consider if the disputes between the plaintiffs and MCC are referred to arbitration and the question of the interim order requiring a payment into escrow is revisited. The purpose of the interim order I propose to make is to preserve the rights of the plaintiffs in the dispute resolution procedures prior to any referral to arbitration [133].
The primary judge rejected the application for an interlocutory injunction requiring the payment of funds into escrow, primarily on the ground that there was no factual basis for the grant of urgent relief against MCC under cl 9.9(d) of the Guarantee Agreement. His Honour noted that the audited accounts for MCC for the year ended 31 December 2009 disclosed net assets of approximately $AUD10 billion (reasons [142]). No appeal has been brought from the findings of fact made by the primary judge, or from his order refusing the interlocutory injunction.

Proposed interim order of the primary judge

As I have noted, the primary judge intended that the interim order he proposed to grant would be able to be reviewed by the arbitrator following mediation (reasons [130(c)]). However, there are a number of significant difficulties with that aspect of his Honour's proposed orders which were not addressed in the reasons given. First, the power of any arbitrator to modify any order of this court would be governed by the lex arbitri, which would most likely be the law of Singapore, or perhaps Hong Kong, if an arbitration was commenced in that forum under the Guarantee Agreement. No evidence was adduced which established that the law of either forum empowered an arbitrator to make orders modifying an order of this court.
Second, the comity between jurisdictions that underpins private international law may give pause to any arbitrator in another jurisdiction considering modifying or setting aside an order of this court, even if empowered to do so - see Oceanic Sun Line Special Shipping Co Inc v Fay(1987) 8 NSWLR 242, 260; Allen v Henry [1999] VSC 238 [64]; Traxys Europe SA v Balaji Coke Industry Pvt Ltd (No 2) [2012] FCA 276; (2012) 201 FCR 535 [105]; Comandate Marine Corp v Pan Australia Shipping Pty Ltd[2006] FCAFC 192; (2006) 157 FCR 45 [252]; Hebei Import & Export Corporation v Polytek Engineering Co Ltd [1999] HKCFA 40 [27] - [28].
Thirdly, arbitrators do not exercise judicial power; an arbitrator's power is defined by the content of the relevant arbitration agreement and the lex arbitri - see Electra Air Conditioning BV v Seeley International Pty Ltd [2008] FCAFC 169 [50]; Commonwealth of Australia v Cockatoo Dockyard Pty Ltd(1995) 36 NSWLR 662, 675 ‑ 677 (Kirby P); Waterside Workers' Federation of Australia v JW Alexander Ltd (1918) 25 CLR 434, 464. While a court is able to attach conditions to the orders which it makes which can limit the operation of those orders generally (Knight v Henderson[1958] VR 134, 141), and under the Act (s 7(2)), under Australian law (Ch III of the Australian Constitution), federal judicial power cannot be delegated to a non‑judicial person or body - see Forge v Australian Securities and Investments Commission[2006] HCA 44; (2006) 228 CLR 45 [60]; Harris v Caladine(1991) 172 CLR 84, 94 ‑ 95. Accordingly, the powers conferred upon the court by the Act cannot be delegated by the court to an arbitrator. However, this is not to say that a court could not make orders which terminate upon the occurrence of an event, such as the appointment of an arbitrator. Such an order would not involve the delegation of judicial power - rather it would define the extent of its exercise.

The supplementary reasons of the primary judge

As I have already noted, no orders were made by the primary judge at the time he published the reasons to which I have referred. Subsequent to the publication of those reasons, and prior to the making of any orders, the primary judge was advised by the parties that, contrary to his understanding, the mediation had occurred and was concluded without any agreement being reached in relation to the disputes between the parties. His Honour was also informed that following publication of his reasons, the respondents had referred the disputes under the Asset Sale Agreement and Guarantee Agreement to arbitration, but that this referral was disputed by the Cape Lambert parties (Referral Dispute). In his supplementary reasons published on 20 August 2012, the primary judge concluded that there had been a material change in the circumstances from those which he understood existed at the time he published his earlier reasons, in that the right of the Cape Lambert parties to have funds paid into escrow so that they could immediately receive any amount agreed to be paid as a result of mediation no longer had any practical utility, the mediation having failed to result in an agreement. The primary judge also concluded that because the mediation had concluded, there was no status quo to be preserved in the sense he had described in his preceding reasons, between completion of the mediation and the reference of the disputes to arbitration. As the primary judge had not contemplated that the interim order he had proposed would bind the arbitrator, it was appropriate that the question of whether MCC should pay the amount of $80,000,000 into an escrow account pursuant to cl 3(b) of the Guarantee Agreement should be considered and determined by the arbitrator as a preliminary issue.
For the purpose of resolving the Referral Dispute, the primary judge directed that the Cape Lambert parties were to refer the disputes to arbitration. His Honour ruled that this referral was to occur on terms which would require that the same arbitrator be appointed to determine each of the disputes (and that the appointment of the same arbitrator was not to be opposed by the respondents). The primary judge also ordered the respondents to consent to any application made by the Cape Lambert parties for the preliminary determination of the Escrow Dispute, and that the Cape Lambert parties and MCC take all steps that may be reasonably required to expedite the hearing and determination of the Escrow Dispute.

The dispute resolution procedures

As I have noted, the dispute resolution procedures specified in each of the Asset Sale Agreement and the Guarantee Agreement have been invoked. Both conferral between representatives of the relevant parties to each of the disputes, and mediation, have failed to resolve either the Approvals Dispute, or the Guarantee Dispute. Further, in accordance with the directions made by the primary judge, the Cape Lambert parties have referred each of those disputes to arbitration to be managed by the Singapore International Arbitration Centre. Each reference to arbitration was accompanied by a statement of claim. Although the statement of claim relating to the Guarantee Dispute makes reference to the obligation to pay funds into an escrow account, no specific relief is sought in the statement of claim with respect to the payment of funds into escrow. However, the Cape Lambert parties expressly accept that it is within the power of the arbitrator appointed to determine the Guarantee Dispute to determine the Escrow Dispute as a preliminary issue, and to order the payment of such funds into escrow prior to determination of the Guarantee Dispute (appeal ts 48, 55). It is common ground that the arbitrator would have such jurisdiction and powers either by reason of Article 26 of the UNCITRAL Arbitration Rules applicable at the time the Guarantee Agreement was entered into, or pursuant to the International Arbitration Act (Singapore) Ch 143A, s 12 - see Sun CL, Singapore Law on Arbitral Awards (2011) 23 ‑ 29 and appeal ts 48, 55 and 63. The evidence with respect to the latter provision, being evidence of foreign law, was adduced in the form of a written report from Mr Malcolm Holmes QC, an expert in the field of international arbitration.
At the most recent hearing of the appeal (on 4 December 2012), the court was advised that as at that date, no arbitrator had been appointed to embark upon the references, despite extensive correspondence between the SIAC and the parties (appeal ts 116). However, subsequent to the hearing, the court has been advised that an arbitrator has now been appointed to determine both references.

The grounds of appeal and notice of contention

At the commencement of the hearing of the appeal there were three grounds of appeal. The first two grounds are closely related, and essentially advance the proposition that the right to be protected by the making of an interim order was the right to have funds paid into escrow pending resolution of the dispute by either mediation or arbitration, so that the fact that the mediation had been concluded did not materially alter the considerations relevant to the making of an interim order to protect that right, given the pending arbitration. The third ground asserts that the primary judge erred in the exercise of the discretion conferred by s 7(3) of the Act by failing to take into consideration a number of relevant matters which, in combination, are said to compel the conclusion that the power conferred by the section should have been exercised by making an order that MCC pay $80,000,000 into an escrow account.
Shortly after the hearing commenced, counsel for the Cape Lambert parties moved to amend the grounds to include an additional ground of appeal contesting the conclusion of the primary judge to the effect that the Escrow Dispute was itself a dispute within the meaning of the dispute resolution procedure specified by cl 9.9(c) of the Guarantee Agreement. Leave to amend the grounds by including this additional ground was granted on the basis that the respondents would be given an opportunity to present written submissions in response to the additional ground, and, upon request, oral submissions augmenting those written submissions. Such a request was made, which explains the second hearing of the appeal on 4 December 2012.
In addition, the respondents have served notice to the effect that they contend that the decision of the primary judge should be upheld for reasons other than those given by his Honour, namely:
(a)the court had no jurisdiction to make an order requiring MCC to pay funds into the escrow account under s 7(3) of the Act; or in the alternative
(b)if the court did have jurisdiction to make such an order, it would have been an inappropriate exercise of the court's power under s 7(3) of the Act.

Interaction of Laws

When considering a dispute referable to international commercial arbitration, it is appropriate to identify the law applying to the various dimensions of the dispute, given the complex interaction between the different systems of law bearing on the different aspects of the arbitration. As described by Blackaby N, Partasides C, Redfern A and Hunter M in Redfern and Hunter on International Arbitration (5^th ed 2009), there are at least five systems of law that may apply to an international commercial arbitration. These include:
(a)The law governing the arbitration agreement and performance of that agreement;
(b)the law governing the existence and proceedings of the arbitral tribunal (lex arbitri);
(c)the law governing the substantive issues of the dispute (the applicable or governing law);
(d)other applicable rules and non-binding guidelines and recommendations, including any ethical codes of conduct and any UNCITRAL guidelines for international arbitral proceedings; and
(e)the law governing the recognition and enforcement of the award (which may involve more than one law, depending on the nature of the arbitration) (165).

The procedural law of the arbitration must further be distinguished from the procedure of the arbitration, as the parties may elect that a particular set of rules govern the procedure of their arbitration (such as, in this case, the UNCITRAL Arbitration Rules). However, those rules will be subject to the procedural law of the jurisdiction in which the arbitration takes place.
To apply this taxonomy to these disputes, in accordance with both the Asset Sale Agreement and the Guarantee Agreement, relevantly:
(a)the law governing the arbitration agreement is the law of Western Australia, which in this context is the Act - see cl 16.2(a) of the Asset Sale Agreement and cl 9.9(a) of the Guarantee Agreement;
(b)the lex arbitri governing the arbitration is the law of Singapore, in accordance with the agreement of the parties, and the orders made by the primary judge requiring that the same arbitrator determine the disputes in the same forum - see also 16.2(c)(3)(A) of the Asset Sale Agreement and cl 9.9(c)(iii)(A) of the Guarantee Agreement;
(c)subject to the lex arbitri, the UNCITRAL Arbitration Rules will govern the procedure of the arbitration;
(d)the substantive law of the dispute is the law of Western Australia - see cl 16.2(c)(3)(D) of the Asset Sale Agreement and cl 9.9(c)(iii)(D) of the Guarantee Agreement; and
(e)the law governing the recognition and enforcement of the award will depend upon the jurisdiction in which the parties seek recognition and enforcement, and might be expected to be either Australia or PRC or both.
As these proceedings concern the proper construction and effect of the arbitration clauses contained in the Asset Sale Agreement and the Guarantee Agreement, the law with which these proceedings primarily engage is the Act. It is therefore appropriate to set out the legal regime created by the Act, and place the competing contentions of the parties in that context.

Objects of the Act

Section 2D of the Act provides:
2D Objects of this Act
The objects of this Act are:
(a)to facilitate international trade and commerce by encouraging the use of arbitration as a method of resolving disputes; and
(b)to facilitate the use of arbitration agreements made in relation to international trade and commerce; and
(c)to facilitate the recognition and enforcement of arbitral awards made in relation to international trade and commerce; and
(d)to give effect to Australia's obligations under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted in 1958 by the United Nations Conference on International Commercial Arbitration at its twenty‑fourth meeting; and
(e)to give effect to the UNCITRAL Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law on 21 June 1985 and amended by the United Nations Commission on International Trade Law on 7 July 2006; and
(f)to give effect to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States signed by Australia on 24 March 1975.
Further, s 39 of the Act provides that where a court is considering performing any functions or exercising any powers under the Act, or interpreting an agreement to which the Act applies:
(2) The Court or authority must, in doing so, have regard to:
(a)the objects of the Act; and
(b)the fact that:
(i)arbitration is an efficient, impartial, enforceable and timely method by which to resolve commercial disputes; and
(ii)awards are intended to provide certainty and finality.

Part II of the Act

Part II of the Act is concerned with the enforcement of foreign arbitration agreements and foreign awards. Section 7, which is within that part, provides:
7 Enforcement of foreign arbitration agreements
(1)Where:
(a)the procedure in relation to arbitration under an arbitration agreement is governed, whether by virtue of the express terms of the agreement or otherwise, by the law of a Convention country;
(b)the procedure in relation to arbitration under an arbitration agreement is governed, whether by virtue of the express terms of the agreement or otherwise, by the law of a country not being Australia or a Convention country, and a party to the agreement is Australia or a State or a person who was, at the time when the agreement was made, domiciled or ordinarily resident in Australia;
(c)a party to an arbitration agreement is the Government of a Convention country or of part of a Convention country or the Government of a territory of a Convention country, being a territory to which the Convention extends; or
(d)a party to an arbitration agreement is a person who was, at the time when the agreement was made, domiciled or ordinarily resident in a country that is a Convention country;
this section applies to the agreement.
(2)Subject to this Part, where:
(a)proceedings instituted by a party to an arbitration agreement to which this section applies against another party to the agreement are pending in a court; and
(b)the proceedings involve the determination of a matter that, in pursuance of the agreement, is capable of settlement by arbitration;
on the application of a party to the agreement, the court shall, by order, upon such conditions (if any) as it thinks fit, stay the proceedings or so much of the proceedings as involves the determination of that matter, as the case may be, and refer the parties to arbitration in respect of that matter.
(3)Where a court makes an order under subsection (2), it may, for the purpose of preserving the rights of the parties, make such interim or supplementary orders as it thinks fit in relation to any property that is the subject of the matter to which the first‑mentioned order relates.
(4)For the purposes of subsections (2) and (3), a reference to a party includes a reference to a person claiming through or under a party.
(5)A court shall not make an order under subsection (2) if the court finds that the arbitration agreement is null and void, inoperative or incapable of being performed.
It has been noted on several occasions that once the requirements of s 7 are satisfied, so long as the arbitration agreement is not null and void, inoperative, or incapable of being performed, a stay under s 7(2) is mandatory - see Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332, 350 (Deane and Gaudron JJ); Abigroup Contractors Pty Ltd v Transfield Pty Ltd [1998] VSC 103; (1998) 217 ALR 435 [79] ‑ [80]; Transfield Philippines Inc & Ors v Pacific Hydro Limited [2006] VSC 175 [55]; Comandate Marine Corp [35]; Ansett Australia Ltd v Malaysian Airline System [2008] VSC 109; (2008) 217 FLR 376 [4]. This is consistent with the express objects of the Act which include the encouragement of arbitration as a method of resolving disputes.

Part III of the Act

Part III of the Act is concerned with international commercial arbitration. By s 16 of the Act, which is within that part, the UNCITRAL Model Law on International Commercial Arbitration 1985, as adopted by the United Nations Commission on International Trade Law on 21 June 1985, and as amended by the United Nations Commission on International Trade Law on 7 July 2006 (UNCITRAL Model Law) is given the force of law in Australia. The UNCITRAL Model Law is therefore part of the law governing the arbitration agreement.

Section 21 of the Act

The Act was significantly amended by the International Arbitration Amendment Act 2010 (Cth). Prior to the amendments, s 21 of the Act enabled parties to exclude the operation of the UNCITRAL Model Law by agreement. The former s 21 was observed to have caused 'considerable practical and interpretive problems', and a number of decisions had undermined the 'exclusivity' of the Act in governing international commercial arbitrations in Australia (Explanatory Memorandum, International Arbitration Amendment Bill 2010 (Cth) [112]; Holmes M and Brown C, The International Arbitration Act 1974: A Commentary (2011) 98). The 2010 amendments repealed the former s 21, and substituted a new s 21 in the following terms:
21. Model Law covers the field
If the Model Law applies to an arbitration, the law of a State or Territory relating to arbitration does not apply to that arbitration.
Article 1(1) of the UNCITRAL Model Law applies the model law to 'international commercial arbitration', a term defined in Article 1(3). Hence, since the 2010 amendments came into effect on 6 July 2010, the Act has covered the field in relation to international commercial arbitration (although it may be noted that this consequence has become less significant as the States and Territories have progressively adopted legislation which applies the UNCITRAL Model Law, with some modification, to domestic commercial arbitration). In this case, by the time of the appeal hearing, it was common ground that each of the arbitrations was an 'international commercial arbitration' within the meaning of Article 1, and that the WA Act does not apply to these proceedings (appeal ts 34, 38).

Schedule 2 - UNCITRAL The Model Law

The UNCITRAL Model Law is Schedule 2 to the Act. Articles of the UNCITRAL Model Law which inform the proper construction and effect of the provisions of the Act relevant to this appeal include Article 9 which provides that:
Article 9. Arbitration agreement and interim measures by court
It is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection and for a court to grant such measure.
Further, Article 17J of the UNCITRAL Model Law provides:
Article 17 J. Court‑ordered interim measures
A court shall have the same power of issuing an interim measure in relation to arbitration proceedings, irrespective of whether their place is in the territory of this State, as it has in relation to proceedings in courts. The court shall exercise such power in accordance with its own procedures in consideration of the specific features of international arbitration.
Although the application by the Cape Lambert parties for an order that MCC pay funds into an escrow account was, for the purposes of the appeal, primarily based upon the powers conferred upon the court by s 7(3) of the Act, or alternatively the power to impose conditions upon the grant of the stay of proceedings under s 7(2) of the Act, during oral argument brief reference was made to Article 17J of the UNCITRAL Model Law. However, there is no ground of appeal which asserts that the primary judge erred by failing to exercise powers conferred by that Article. Further, any contention to that effect would face the insuperable obstacle that there has been no appeal from the finding of the primary judge to the effect that the evidence with respect to the financial position of MCC did not justify the grant of urgent interim relief, or from the decision of the primary judge to refuse the application for interlocutory injunctive relief. Relief of that character is precisely the kind of relief contemplated by Article 17J, and there has been no appeal from its refusal. It is therefore unnecessary to give any further consideration to the powers conferred by Article 17J in these reasons.

Ground 4 - is the Escrow Dispute a dispute falling within cl 9.9(c) of the Guarantee Agreement?

It is appropriate to first consider amended ground of appeal 4, which contests the primary judge's conclusion to the effect that the Escrow Dispute was itself a dispute falling within the mandatory dispute resolution procedures of cl 9.9(c) of the Guarantee Agreement. That is because rejection of that ground of appeal makes it much more difficult for the Cape Lambert parties to succeed on any of the other grounds of appeal, because of the forceful argument to the effect that an order of the court requiring MCC to pay funds into the escrow account would effectively resolve the Escrow Dispute, thereby subverting the parties' agreement to deal with that dispute in accordance with the agreed dispute resolution procedures.
The issue raised by ground 4 essentially concerns the proper construction to be given to the Guarantee Agreement, particularly cl 3(b) and cl 9.9 of that agreement. The principles to be applied to the process of construction are well established, and may be succinctly stated. Both the individual clauses, and the agreement as a whole, must be construed objectively. In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165, the High Court observed that:
This Court, in Pacific Carriers Ltd v BNP Paribas, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transactionhttp:// - 7#7 [40]. (citations omitted)
In order to determine the proper construction of the Guarantee Agreement, reference must be made to the language used by the parties read in the context of the commercial transaction as a whole, including the Asset Sale Agreement and the Novation Agreement, and the common intention of the parties as manifest in the text and explicit and implicit objects of the agreement - see Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited [2007] HCA 61; (2007) 233 CLR 115 [48]; Pacific Carriers Ltd v BNP Paribas[2004] HCA 35; (2004) 218 CLR 451, 462 [22]; Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] HCA 5; (2002) 240 CLR 45 [70]; Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153, 191 – 192; McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579, 589; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, 352 - 354; Charrington & Co Ltd v Wooder [1914] AC 71, 77.
In the present case, it was not suggested by any party that consideration should be given to the matrix of circumstances known to the parties when the Guarantee Agreement was executed. It is therefore unnecessary to analyse the emphatic observations made by Gummow, Heydon and Bell JJ in Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; (2011) 86 ALJR 1 [2] ‑ [5].
Because the parties have agreed that their agreement is to be governed by the law of Western Australia (which of course includes the Act), and because the agreement falls to be construed in a context in which the parties ask the court to exercise powers under the Act, it is appropriate to take into account such principles of public policy as are evident in the Act, and to give effect to s 39 of the Act when construing the arbitration agreement contained within cl 9 of the Guarantee Agreement.
In addition, because the Guarantee Agreement has been made by parties resident in different jurisdictions providing for resolution of their disputes by international commercial arbitration in a third jurisdiction, account should be taken of principles which are evident in international jurisprudence dealing with the construction of such agreements, and the relationship between national courts and international arbitral tribunals - see Comandate Marine Corp [164] (Allsop J).
The weight of decisions in Australia and in leading commercial jurisdictions internationally establishes that courts will generally take a broad, liberal, and flexible approach to the construction of agreements to refer disputes to arbitration, and will favour a construction of an agreement which provides a single forum for the adjudication of all disputes arising from, or in connection with, that agreement. In Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160, the New South Wales Court of Appeal was asked to consider whether an arbitration clause was sufficiently broad to cover a claim under the Trade Practices Act 1974 (Cth). Gleeson CJ (with whom Meagher and Sheller JJA agreed) stated that:
When the parties to a commercial contract agree, at the time of making the contract, and before any disputes have yet arisen, to refer to arbitration any dispute or difference arising out of the agreement, their agreement should not be construed narrowly. They are unlikely to have intended that different disputes should be resolved before different tribunals, or that the appropriate tribunal should be determined by fine shades of difference in the legal character of individual issues, or by the ingenuity of lawyers in developing points of argument (165).
As Allsop J (as his Honour then was) said in Comandate Marine Corp:
The court should, however, construe the contract giving meaning to the words chosen by the parties and giving liberal width and flexibility to elastic and general words of the contractual submission to arbitration.
This liberal approach is underpinned by the sensible commercial presumption that the parties did not intend the inconvenience of having possible disputes from their transaction being heard in two places. This may be seen to be especially so in circumstances where disputes can be given different labels, or placed into different juridical categories, possibly by reference to the approaches of different legal systems. The benevolent and encouraging approach to consensual alternative non-curial dispute resolution assists in the conclusion that words capable of broad and flexible meaning will be given liberal construction and content. This approach conforms with a common-sense approach to commercial agreements, in particular when the parties are operating in a truly international market and come from different countries and legal systems and it provides appropriate respect for party autonomy [164] - [165].
These principles have been accepted in this court - see Paharpur Cooling Towers Ltd v Paramount (WA) Ltd [2008] WASCA 11 [33] - [45], referring to Francis Travel Marketing, as well as ACD Tridon Inc v Tridon Australia Pty Ltd [2002] NSWSC 896; Ashville Investments Ltd v Elmer Contractors Ltd [1989] QB 488; [1988] 2 All ER 577; Fiona Trust and Holding Corporation v Privalov [2007] UKHL 40; Walter Rau Neusser Oel und Fett AG v Cross Pacific Trading Ltd [2005] FCA 1102; IBM Australia Ltd v National Distribution Services Ltd (1991) 22 NSWLR 466, 483.
Moreover, an expansive approach to the construction of arbitration clauses is consistent with principles enunciated in other jurisdictions, forming 'part of the law of international commerce' - see Fiona Trust and Holding Corporation [31]; United Group Rail Services Ltd v Rail Corporation New South Wales [2009] NSWCA 177 [3]; Lipman Pty Ltd v Emergency Services Superannuation Board [2011] NSWCA 163 [6]. In Ashville Investments Ltd v Elmer Contractors Ltd at 517, Bingham LJ (as his Lordship then was) said, with respect to the scope of an arbitration clause:
I would be very slow to attribute to reasonable parties an intention that there should in any foreseeable eventuality be two sets of proceedings (598).
In Fiona Trust and Holding Corporation, a decision referred to in Paharpur, Lord Hoffman held that:
Arbitration is consensual. It depends upon the intention of the parties as expressed in their agreement. Only the agreement can tell you what kind of disputes they intended to submit to arbitration. But the meaning which parties intended to express by the words which they used will be affected by the commercial background and the reader's understanding of the purpose for which the agreement was made. Businessmen in particular are assumed to have entered into agreements to achieve some rational commercial purpose and an understanding of this purpose will influence the way in which one interprets their language [5].
…
[T]he construction of an arbitration clause should start from the assumption that the parties, as rational businessmen, are likely to have intended any dispute arising out of the relationship into which they have entered or purported to enter to be decided by the same tribunal. The clause should be construed in accordance with this presumption unless the language makes it clear that certain questions were intended to be excluded from the arbitrator's jurisdiction [13].

In Rinehart v Welker [2012] NSWCA 95, Bathurst CJ declined to follow Lord Hoffman's speech in Fiona Trust and Holding Corporation due to his Honour's concern that it may be interpreted as suggesting 'a particular rule of construction be applied [when construing arbitration clauses] irrespective of the plain meaning of the words' [122]. Nevertheless, to the extent that Lord Hoffman's observations endorse an expansive approach to the construction of the ordinary meaning of the words of dispute resolution clauses, they are consistent with authority in Australia and other jurisdictions (see [63] below). As Austin J observed in ACD Tridon Inc:
In Australia, courts see their task as ascertaining the intention of the authors of a commercial instrument, as expressed in the instrument, taking into account surrounding circumstances and extrinsic materials to the extent permitted by law
…
[W]hile Australian courts are not constrained by considerations of public policy to adopt a 'liberal' construction or arbitration clauses, reflection on the likely intention of the parties will steer them away from any narrow construction.
…
If, however, the parties have chosen narrow language - for example, language that that [sic], on its face, confines the reference to arbitration to the contractual aspects of their dispute - an Australian court will not disregard the language used so as to permit a reference to arbitration of the non-contractual aspects of the dispute as well [119] - [121].
Similarly, as was observed by the New South Wales Court of Appeal in Lipman:
To adopt the liberal approach is not to depart from the meaning of the words chosen by the parties. Rather, it is to give effect to a coherent business purpose through an assumption commercial courts around the world will make that parties are unlikely to have intended multiple venues or occasions for the resolution of their disputes unless they say so [8].
An expansive approach towards the construction of arbitration clauses has also been favoured by the courts in Singapore (see Larsen Oil and Gas Pte Ltd v Petropod Ltd [2011] SGCA 21; [2011] 3 SLR 414 [11] ‑ [19]; Tjong Very Sumito v Antig Investments Pte Ltd [2009] 4 SLR(R) 732), the United States (where federal arbitration legislation establishes that any doubts concerning the scope of arbitrable issues should be resolved in favour of arbitration - see Moses H Cone Memorial Hospital v Mercury Construction Corporation 460 US 1 (1983), 24-25 ; Mitsubishi Motors Corporation v Soler Chrysler‑Plymouth Inc 473 US 614 (1985), 625 - 626), and Canada (Canadian National Railway Co v Lovat Tunnel Equipment Inc (1999) 174 DLR (4th) 385 [20]); Onex Corp v Ball Corp (1994) 12 BLR (2d) 151, 158).

Ground 4 - submissions

Before considering the submissions of the parties with respect to the issue raised by ground 4, it is appropriate to briefly outline the competing contentions of the parties with respect to the Escrow Dispute for the purpose of identifying the nature of that dispute (and not for the purpose of endeavouring to resolve it).
The Cape Lambert parties contend that demand for the amount of $80,000,000, due and payable by MCC Sanjin under the Asset Sale Agreement, was made in accordance with that agreement. They further assert that they have made a demand upon MCC in accordance with the Guarantee Agreement, providing evidence substantiating the amount due, with the result that MCC is obliged to pay the guaranteed amount within 24 hours of that demand. They further contend that in the event of any dispute between them and MCC as to whether an amount is payable under the Guarantee Agreement, MCC is obliged to pay the disputed amount into an escrow account in accordance with cl 3(b).
MCC draws attention to the fact that cl 3(a) requires the Cape Lambert parties to serve a demand 'providing evidence substantiating the amount of the Guaranteed Obligation owed' before the obligation to pay arises under the Guarantee Agreement. In a context in which the Asset Sale Agreement itself contains a mandatory procedure for the resolution of disputes between the parties with respect to payment of the final tranche of the purchase price, MCC submits that evidence substantiating the amount of the Guaranteed Obligation owed can only be provided after the procedure for the resolution of disputes contained within the Asset Sale Agreement has run its course. In the present circumstances, as conferral between the representatives of the parties and mediation have failed to resolve the Approvals Dispute, MCC submits that the evidence required to substantiate the amount owed under that agreement must be the award of the arbitrator appointed to resolve that dispute.
MCC also submits that the distinction between the obligations of MCC Sanjin under the Asset Sale Agreement, and MCC's obligations under the Guarantee Agreement, provides an explanation for the terms used in cl 3(b) of the Guarantee Agreement. Under the Asset Sale Agreement, the obligation of MCC Sanjin is to pay the amount of $80,000,000 without counterclaim or set‑off (cl 3.6(b)). By contrast, under the Guarantee Agreement, MCC's obligation is to pay the Guaranteed Obligation allowing for any defence, set‑off or counterclaim that MCC WA or MCC Sanjin asserts (cl 2.1(a)(i)). MCC asserts that cl 3(b) of the Guarantee Agreement is intended to cover a situation in which the dispute resolution procedures contained in the Asset Sale Agreement have run their course and the obligation of MCC Sanjin to the Cape Lambert parties has been ascertained (without regard to any counterclaim or set‑off by MCC Sanjin), but either MCC Sanjin asserts a set‑off or counterclaim of the kind expressly envisaged by cl 2.1(a)(i) of the Guarantee Agreement, or MCC itself asserts that its obligations are subject to set‑off or counterclaim under the general law governing the agreement. MCC asserts that in such a circumstance, cl 3(b) would operate to require MCC to pay into an escrow account an amount equal to the amount in dispute - that is, the amount of the relevant set‑off or counterclaim. MCC asserts that in this way, cl 3(b) is given a sensible commercial operation which only takes effect after the dispute resolution procedures contained in the Asset Sale Agreement have run their course. MCC further asserts that if cl 3(b) is given the construction for which the Cape Lambert parties contend, any purported demand by those parties, whether unjustified, colorable or tendentious would by reason only of the fact of demand being made, give rise to an immediate obligation on its part to pay $80,000,000 into an escrow account. MCC asserts that it would not be appropriate to attribute to the parties such an uncommercial and impractical intention.
As I have noted, the purpose of outlining these competing contentions is not to suggest which should be preferred. The Cape Lambert parties have not asked the court to finally resolve these issues, and there is no process before the court which would enable the court to finally resolve them. In particular, the Cape Lambert parties have not sought specific performance of cl 3(b) of the Guarantee Agreement, nor has any application for summary judgment been made in respect of any such claim. Procedural fairness would, of course, require MCC to be given notice of any such claim, and a full opportunity to meet it. That has not occurred.
It is sufficient for present purposes to note that there are competing contentions between the parties as to whether, in the current circumstances, MCC is obliged to pay $80,000,000 into an escrow account. I accept MCC's submission that there is a genuine dispute between the parties in that regard, and that its contentions are at least arguable. The question which must now be addressed is whether the Escrow Dispute is a dispute which falls within the dispute resolution procedures mandated by cl 9.9 of the Guarantee Agreement.
The Cape Lambert parties submit that cl 3(b) is to be construed in a context in which the parties clearly intended that payment of the guaranteed amount would be made promptly after the making of valid demand, evident in the requirement of cl 2.1(a)(ii) that payment be made within 24 hours. Turning to the terms of cl 3(b) itself, the Cape Lambert parties draw attention to the definition of the dispute which gives rise to the obligation to pay funds into an escrow account, namely a 'dispute between the parties to this document regarding whether an amount is payable'. They submit that these words must be construed as a reference to a dispute as to whether an amount is payable under the Guarantee Agreement, not a dispute as to whether an amount is payable under the Asset Sale Agreement. Next, the Cape Lambert parties draw attention to the requirement of cl 3(b) to the effect that the funds in escrow 'must be released as soon as practicable in accordance with the outcome or decision of the mediation or arbitration (as the case may be)'. They say that this provision manifests an intention that the funds will be provided as and by way of security for the outcome of the dispute with respect to the guaranteed obligation, and to enable prompt payment to be achieved immediately after the dispute resolution procedures have run their course. They submit that this objective of the parties would be thwarted if the obligation to pay funds into an escrow account was itself the subject of the dispute resolution procedures, thus necessitating conferral, mediation and arbitration in the event of a dispute with respect to the escrow obligation, before the funds would have to be paid into escrow.
MCC points to the language of cl 9.9 to support its contention that a dispute with respect to payment of funds into escrow comes within its terms. First, it draws attention to the language of cl 9.9(b) which requires that the procedures prescribed in the clause 'must be strictly followed to settle a dispute arising under this document'. It points out that there has been no appeal from the finding of the primary judge to the effect that the procedure specified in cl 9.9 is mandatory, and 'did not provide for [dispute] resolution procedures that were merely facilitative' (reasons [59]). Further, it points to the breadth of the language used to describe the disputes falling within the scope of the mandatory procedure, namely 'a dispute arising under the document'. MCC asserts that it is impossible to construe a dispute with respect to the obligation to pay funds into an escrow account as not being a dispute arising under the document, without distorting the plain meaning of the language used in the provision.
Next, MCC points to the breadth of the language used in cl 9.9(c) which refers to the circumstance in which 'any dispute arises out of or in connection with this document, including any question regarding the existence, validity or termination of the document'. Consistently with its earlier submission, MCC points to the breadth of the language used, and in particular the expressions 'arising out of' and 'in connection with'; both being expressions of wide meaning - see IBM Australia v National Distribution Services Pty Ltd, 475 - 477 (Kirby P), 487 (Handley JA); Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160, 165 (Gleeson CJ); Comandate Marine Corporation [164] - [165].
Further, MCC points to cl 9.9(d) which prescribes the limited exceptions to the mandatory procedure required by the other provisions of cl 9.9. MCC submits that if it had been the intention of the parties that a dispute with respect to the operation of cl 3(b) should be exempted from the operation of cl 9.9, the parties could have simply included an express provision to that effect in cl 9.9(d). However, they have not done so.
In response to the submissions by the Cape Lambert parties, MCC accepts that cl 3(b) applies where there is a dispute between the beneficiaries of the Guarantee Agreement and the guarantor with respect to amounts payable under the guarantee. However, MCC submits that this does not mean that the Escrow Dispute falls outside the procedures specified by cl 9.9 - to the contrary, it brings the Escrow Dispute within the clear and ordinary meaning of cls 9.9(b) and (c).
MCC further submits that the fact that cl 3(b) contemplates that an amount will be paid into escrow prior to resolution of a substantive dispute between the parties by mediation or arbitration does not mean that a dispute with respect to the obligation to pay funds into escrow cannot itself be the subject of the dispute resolution procedure occurring prior to or independently of the dispute resolution procedure relating to the substantive dispute between the parties to the Guarantee Agreement. It observes that, as in this case, once the dispute resolution procedure relating to a substantive dispute between the parties to the Guarantee Agreement has reached the point of arbitration, the arbitrator of that dispute is empowered to resolve any preliminary dispute in relation to the obligation to pay funds into escrow as a preliminary issue in the substantive arbitration.
MCC submits that the construction for which the Cape Lambert parties contend would attribute to the parties an intention that all their disputes would be subject to the dispute resolution procedure upon which they had agreed, except for a dispute as to whether funds should be paid into escrow, which would have to be resolved some other way, with the only other way available being litigation in a national court seized of jurisdiction. MCC submits that such a conclusion would attribute to the parties an intention which is inconsistent with the breadth of their agreement in cl 9.9, and which embraces conferral, mediation and arbitration as their chosen method of dispute resolution. MCC further submits that such a construction would attribute to the parties an intention which is not consistent with the commercial context of the Guarantee Agreement or commercial practicality. It would mean that any dispute in relation to the obligation to pay funds into escrow could be litigated in any national court seized of jurisdiction, being a court in which one of the parties is resident, rather than by way of resolution in a third jurisdiction. MCC points also to the difficulties which might arise with respect to enforcement of a court order resolving a dispute in relation to the obligation to pay funds into escrow, as compared to the greater enforceability of international arbitral awards. MCC points also to the lack of confidentiality, and the possible loss of flexibility of procedure, including in relation to the availability and enforcement of particular remedies, which attends curial adjudication, as opposed to mediation and arbitration, all of which, according to MCC, militate strongly against attribution of such an intention to the parties (appeal ts 89).
MCC further asserts that these considerations are underpinned by the public policy and objects evident in the Act, which the parties have agreed is to form part of the law governing their arbitration agreement, and which, pursuant to s 39 of the Act, the court is obliged to apply in construing the arbitration agreement.
Finally, MCC relies on the series of decisions in this country and elsewhere which support the principles commonly applied to the construction of agreements to refer disputes to arbitration; that agreements to refer disputes to arbitration should be given a broad and liberal construction, rather than a narrow or pedantic construction, and that parties to commercial agreements are unlikely to have intended that different disputes should be resolved in different tribunals or fora (sometimes called the 'one stop shop' or 'single adjudication' principle). I have referred to a number of these decisions above (at [56] ‑ [63]).

Ground 4 - Conclusion

In my view, the arguments enunciated on behalf of MCC should generally be accepted and ground 4 dismissed. The only substantive argument contrary to MCC's position is the proposition that the court should infer that it was not the intention of the parties that the dispute resolution procedure upon which they had agreed should apply to a dispute with respect to the payment of funds into escrow because it is implicit in cl 3(b) that the funds will be available to be paid out of the escrow account when the mediation or arbitration of the substantive dispute is complete. However, as MCC submits, there is nothing to prevent the parties applying the dispute resolution procedure upon which they have agreed to the Escrow Dispute prior to the resolution of the Guarantee Dispute. Such a course would enable funds to be available in the escrow account at the time the Guarantee Dispute is resolved by mediation or arbitration.
The fundamental obstacle faced by ground 4 is that the construction which it would place upon the Guarantee Agreement is fundamentally inconsistent with, and contradicted by, the plain and ordinary language of cl 9.9 of that agreement, which requires any dispute arising out of or in connection with the Guarantee Agreement to be resolved by the dispute resolution processes specified in that clause.
The plain and ordinary meaning of the language used by the parties cannot be overridden by a court's perception of commercial infelicity, unsupported by the language of the agreement - see Western Export Services Inc v Jireh International Pty Ltd; Permanent Building Society (in liq) v Wheeler(1992) 10 WAR 109, 123 (affirmed in Metcalf v Permanent Building Society (in liq) (1993) 10 WAR 145); Photo Production Ltd v Securicor Transport Ltd[1980] AC 827, 851 (Lord Diplock). Further, the construction of the dispute resolution processes of the Guarantee Agreement for which the Cape Lambert parties contend would be entirely inconsistent with well-established international principles relating to the construction of such provisions. For these reasons, ground 4 of the appeal should be dismissed.

Appeal grounds 1-3 and the notice of contention

It is appropriate to deal with the remaining appeal grounds, and the notice of contention together, as all are essentially concerned with the scope and appropriate exercise of the powers conferred upon the court by s 7(3) of the Act, and to a lesser extent, the power to impose conditions upon a stay of proceedings conferred by s 7(2) of the Act. The remaining appeal grounds, and the notice of contention, must be approached on the basis that the primary judge was correct to conclude that the Escrow Dispute is subject to the mandatory dispute resolution procedures outlined in cl 9.9 of the agreement. It follows that the court is obliged, by s 7 of the Act, to respect and give effect to the agreement of the parties to that effect. It would be fundamentally inconsistent with the obligations of the court under s 7 of the Act, the objects of the Act specified in s 2D (to which the court must have regard when interpreting an agreement to which the Act applies pursuant to s 39(1) and s 39(2)(a)), and with the considerations which must be taken into account under s 39(2)(b) of the Act, for the court to use the powers conferred by s 7 to effectively resolve the Escrow Dispute by making an order for the payment of funds into an escrow account, or by making any stay of proceedings conditional upon such a payment. Such an exercise of power by the court would also be subversive of the agreement of the parties which requires the escrow dispute to be resolved utilising the processes specified in cl 9.9 of the Guarantee Agreement.
Observations cast at that level of generality are of themselves capable of leading to the conclusion that the remaining grounds of appeal should be dismissed and the notice of contention upheld. However, that conclusion is reinforced by more detailed consideration of the relevant portions of s 7 of the Act, and the authorities, both domestic and international, relating to the exercise of interim powers by courts in the context of pending arbitrations.

Section 7(3)

Before turning to the cases, there are a number of observations usefully made in relation to the terminology of s 7(3). First, the exercise of the powers conferred by the section is conditioned upon the making of an order under subsection (2) staying proceedings so that a dispute may be resolved by arbitration. It follows that it is reasonable to infer that the legislature intended that the powers conferred by subsection (3), like the power to attach conditions conferred by subsection (2), should be utilised for the purpose of promoting and enforcing the agreement of the parties to resolve their disputes by arbitration, rather than by making orders which would be inconsistent with, or subversive of that agreement.
Next, it is significant that the powers conferred by the section can only be exercised 'for the purpose of preserving the rights of the parties'. It is therefore pertinent in the present case to ask what rights would be preserved by the orders sought by the Cape Lambert parties. In my view, with respect to the primary judge, it is not correct to characterise those rights in terms of a right to have money available in an escrow account at the time any mediation of the Guarantee Dispute concludes in an agreement with respect to the resolution of that dispute. The relevant rights of the Cape Lambert parties arising under cl 3(b) are properly characterised as a chose in action, being the right to enforce payment of an amount into escrow. Having regard to the conclusion I have reached in relation to ground 4, enforcement of that chose in action is itself subject to compliance with the dispute resolution procedure contained in cl 9.9 of the Guarantee Agreement.
The orders sought by the Cape Lambert parties would not have the purpose or effect of preserving their chose in action. Rather, the orders sought would have the effect of enforcing that chose in action without the parties having followed the dispute resolution procedure mandated by cl 9.9 of the agreement. Such orders cannot be made within the scope of s 7(3) properly construed, and would be inconsistent with, and subversive of, the parties' agreement to resolve their disputes, including the Escrow Dispute, in accordance with cl 9.9 of the Guarantee Agreement.
Next, the orders authorised by s 7(3) are 'interim or supplementary orders'. Given that the court is authorised to make such orders in a context in which curial proceedings have been stayed pending resolution of a dispute by arbitration, it is fair to infer that the orders contemplated by the section are orders which are interim, in the sense that they are necessary to preserve the rights of the parties in relation to any property that is the subject of the matter to which the stay orders relate until such time as the arbitral tribunal can itself embark upon the reference and determine whether interim measures in relation to that property should be ordered, or supplementary in the sense that they augment or facilitate the reference of the dispute to arbitration, by preserving those rights until the arbitral tribunal is properly seized of the dispute.
The orders sought by the Cape Lambert parties do not have either of these characteristics. As I have noted, the Cape Lambert parties accept that the arbitrator who will be appointed to determine the Guarantee Dispute will have jurisdiction to make an interim order for payment of an amount into escrow. Having regard to the unchallenged finding of the primary judge to the effect that the evidence did not sustain any basis for the grant of urgent interim relief pending the reference of the Guarantee Dispute to arbitration, in the particular circumstances of this case, the orders sought by the Cape Lambert parties cannot be characterised as 'interim' in the sense in which that term is used in s 7(3). Nor could those orders be characterised as 'supplementary' in the sense that they augment or facilitate reference of the Guarantee Dispute to arbitration, especially in a context in which it is accepted that the arbitrator will have power to make orders with respect to payment of funds into escrow and no case has been made out for the urgent exercise of that power.
MCC submitted that the orders sought by the Cape Lambert parties did not fall within the description of being orders 'in relation to any property that is the subject of the matter to which the first‑mentioned order relates' within the meaning of s 7(3). The 'first‑mentioned order' is, of course, the order of the court staying curial proceedings pursuant to s 7(2) of the Act. In that context, 'the matter' is 'a reference to the differences between the parties or the controversy that are or is covered by the terms of the arbitration agreement' (Comandate Marine Corp [235]); the dispute which has been or is to be referred to arbitration. In that context, the reference to 'any property' that is the subject of the dispute referred to arbitration is apt to describe, at least, any property which can be made the subject of orders within the arbitration. As it is common ground that the chose in action relating to the payment of funds into an escrow account by MCC can be the subject of orders within the arbitration, in my view, this aspect of s 7(3) would not constrain the making of the orders sought by the Cape Lambert parties. However, for the reasons I have given, the orders sought by those parties fall outside the scope of the powers conferred by the section.
This approach to the construction of s 7(3) is consistent with the approach which has been taken to the construction of s 7(2). Courts should refrain from imposing conditions which may 'pre-empt the decision of the arbitrator and the operation of the arbitration clause' - see Comandate Marine Corp [245]. In O'Brien v Tanning Research Laboratories Inc (1988) 14 NSWLR 601, Kirby P observed:
To resolve these arguments, it is necessary to consider the kinds of conditions that the Court may impose such as are contemplated by the power conferred in this respect by s 7(2) of the Act. It is true that the subsection is expressed in apparently wide terms ('upon such conditions (if any) as it thinks fit'). But it is obvious that the conditions are incidental and ancillary to the achievement of the main purpose of s 7(2). This is to hold the parties to international commercial agreements to an agreement to arbitrate. I do not consider, in this context, that it would be proper to impose a condition which effectively distorted the agreement initially entered between the parties. Nor should such a condition be imposed as would manipulate the rights of the parties under that agreement, notwithstanding their agreement to arbitrate. Nor should conditions frustrate the achievement of the policy of the statute to enforce that agreement. The 'conditions' which s 7(2) of the Act contemplates are machinery conditions. They relate to hearing and the like procedures and not to conditions which determine, in effect, the substantive rights of the parties. Those substantive rights were, relevantly, fixed by the agreement.
The Court should neutrally hold the parties to that agreement. In my opinion it would be wrong for the Court to distort and frustrate that agreement (whilst requiring the stay necessitated by the statute) to impose conditions which were not within the agreement which it is the purpose of the Act to enforce (622).
This passage was cited with approval by Barrett J in WesTrac Pty Ltd v Eastcoast OTR Tyres Pty Ltd [2008] NSWSC 894; (2008) 219 FLR 461. After citing the observations of Kirby P, Barrett J observed:
[I]t is not open to the court to impose conditions upon a s 7 stay which will detract from the integrity of the arbitration process the Commonwealth Act mandates [30].
Obviously a similar approach should be taken to the interpretation and application of s 7(3), which is conditioned upon the exercise of the power conferred by s 7(2).
This approach to the ambit of the powers conferred upon the court by s 7 of the Act is consistent with the limited role which national courts play when parties have agreed to resolve their disputes by international commercial arbitration. National courts are not properly regarded as competitors or rivals for the jurisdiction which the parties have agreed to confer upon an arbitral tribunal. As I have already noted, the exercise of judicial power to facilitate the agreement of the parties to resolve their disputes by arbitration, and the strictly limited supervisory role usually conferred upon national courts by the lex arbitri, which is generally limited to containing arbitral tribunals within the jurisdiction conferred upon them by the parties and ensuring that the jurisdiction is exercised, is fundamentally different in character to the role of the arbitral tribunal in resolving the dispute by making an award defining the substantive rights and obligations of the parties. International comity requires national courts to faithfully respect these limitations upon their role - in this case by appropriately construing the ambit of the powers conferred upon the court by s 7 of the Act having regard to such limitations.
Such an approach to the construction of s 7(3) is consistent with international authority. In Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] AC 334, Lord Mustill observed:
There is always a tension when the court is asked to order, by way of interim relief in support of an arbitration, a remedy of the same kind as will ultimately be sought from the arbitrators: between, on the one hand, the need for the court to make a tentative assessment of the merits in order to decide whether the plaintiff's claim is strong enough to merit protection, and on the other, the duty of the court to respect the choice of tribunal which both parties have made, and not to take out of the hands of the arbitrators (or other decision-makers) a power of decision which the parties have entrusted to them alone. In the present instance I consider that the latter consideration must prevail. The court has stayed the action so that the panel and the arbitrators can decide whether to order a final mandatory injunction. If the court now itself orders an interlocutory mandatory injunction, there will be very little left for the arbitrators to decide (367 - 368).
No doubt the tension of which his Lordship speaks may be resolved in different ways, depending upon the circumstances of the case. However, in the present case, there is an uncontested finding that there was no justification for the grant of urgent interim relief. That finding compels the conclusion that the powers conferred by s 7(3) of the Act should not be exercised to usurp jurisdiction which the parties have agreed should be conferred upon an arbitrator.
Further, in Cetelem SA v Roust Holdings [2005] ECWA Civ 618; [2005] 4 All ER 52, the Court of Appeal of England and Wales observed that the power to make interim orders for the purposes of arbitral proceedings should be exercised very sparingly and in circumstances in which such orders were effectively the only means by which the position of a party could be protected until an arbitral tribunal was convened.
Similar observations with respect to the sparing exercise of the jurisdiction to make interim orders pending arbitration have been made internationally. In Hong Kong, in the Court of First Instance in Leviathan Shipping Co Ltd v Sky Sailing Overseas Co Ltd [1998] 4 HKC 347 Findlay J held that:
For a long time now, the courts have leaned in favour of making the parties who have agreed to settle their disputes by arbitration stick to that method of dispute resolution rather than resorting to litigation when it suits them to do so.
…
The legislature has provided for the intervention of the courts, but, in my view, this jurisdiction should be exercised sparingly, and only where there are special reasons to utilise it [35].
Further, in the Hong Kong Court of Appeal in The Owners of the Ship or Vessel, 'The Lady Muriel' v Transorient Shipping [1995] 2 HKC 320 Godfrey JA noted that where interim relief may be sought from either a court or an arbitrator, unless there is an urgent or other special need for protection of a party to an arbitration, due deference should be given to the arbitrator, and the power 'which the parties have entrusted to them alone' (325).
Similar views have been expressed in New Zealand (Marnell Corrao Associates Inc v Sensation Yachts Ltd (2000) 15 PRNZ 608, 625 [74] (Wild J); Pathak v Tourism Transport Ltd [2002] 3 NZLR 681 [40] (Heath J)), and in the Court of Appeal of Singapore (NCC International AB v Alliance Concrete Singapore Pte Ltd [2008] 2 SLR(R) 565, 582, [61], [69], [75]).
In the latter case, the absence of urgency was considered by the Court of Appeal to count decisively against the grant of the interim relief sought. In this case, the unchallenged finding to the effect that there is no factual foundation for the grant of urgent interim relief, and the acceptance of the proposition that an arbitrator would have power to make orders for payment of funds into escrow as an interim measure, necessarily means that it would be inconsistent with the trend of international authority for the court to intervene in the way sought by the Cape Lambert parties.
Turning now to the proposition that the orders sought by the Cape Lambert parties could be justified as conditions imposed upon the grant of the stay of proceedings, the principles to which I have already referred, and the cases to which reference has been made, are sufficient to dispose of that proposition. In particular, the principles enunciated by Kirby J in O'Brien v Tanning Research Laboratories Inc (1988) 14 NSWLR 601 tell strongly against the imposition of conditions which would, in effect, usurp the powers of the arbitrator in circumstances where there is no pressing need or justification for the imposition of such conditions. The orders actually made by the primary judge as conditions of the stay which he granted - that the disputes be referred to a single arbitrator, and that the Cape Lambert parties are to have the option of requiring the Escrow Dispute to be determined as a preliminary issue if they wish - provide examples of the types of orders appropriately made under s 7(2) of the Act. These orders have the character of facilitative machinery orders, and do not usurp or subvert the powers of arbitrator in the resolution of the dispute which the parties have agreed to refer to arbitration.

Conclusion in relation to grounds 1-3 of the appeal and the notice of contention

For these reasons, I would dismiss those grounds of appeal which challenge the decision of the primary judge to refuse to exercise the powers conferred upon the court by s 7 of the Act and would uphold the respondent's notice of contention to the effect that the primary judge should have held that the orders sought by the Cape Lambert parties went

beyond the scope of the orders properly authorised by s 7 of the Act, having regard to the circumstances in which the orders were sought.

Leave to appeal

It is common ground that the decision of the primary judge is interlocutory in character, with the consequence that leave to appeal is required. The principles governing the grant of leave to appeal from interlocutory decisions are well established and need not be restated - see Wilson v Metaxas [1989] WAR 285. However, those principles are not inflexible. In the somewhat unusual circumstances of this case, considerations which favour the grant of leave include the apparent tension between the reasons first published by the primary judge and his subsequent decision to refuse the orders sought by the Cape Lambert parties, the commercial significance of the issue to the parties, the unfortunate delay in the resolution of those issues, and the general importance of some of the issues addressed in the appeal. Having regard to those considerations, I would grant leave to appeal but would dismiss the appeal.
McLURE P: I agree with the Chief Justice that the appeal should be dismissed. Save for the matters discussed below, I agree with his reasons.
All of the necessary factual background is detailed by the Chief Justice. It is not repeated here unless required for an understanding of these reasons. For convenience, I will adopt the definitions used by the Chief Justice.
The scope of cl 9.9(c) (the arbitration agreement) of the Guarantee Agreement is a question of contractual construction. The proper law of the Guarantee Agreement, which includes the law relating to contractual construction, is the law of Western Australia. Thus the common law of Australia on that subject applies. Australian law also applies for the purpose of determining whether the arbitration agreement falls within s 7 of the International Arbitration Act 1974 (Cth) (the Act).
Notwithstanding the heated controversy surrounding the correctness and consequences (legal and practical) of the High Court decision in the special leave application in Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45, it cannot be ignored. I would apply it until otherwise directed. The consequence is that Australian law on the principles of contractual construction differs in material respects from English law. The primary difference is the Australian law requirement for ambiguity as a precondition to taking into account

extrinsic surrounding circumstances. Many of the cases opining on the proper approach to the construction of an arbitration agreement predate Western Export Services. See for example, Comandate Marine Corp v Pan Australia Shipping Pty Ltd [2006] FCAFC 192; (2006) 157 FCR 45 [163].

All of the issues of contractual construction that figure prominently in this case stem from ambiguity in the contractual text for Codelfa purposes, if ambiguity means any situation in which the scope or applicability of a contract is, for whatever reason, doubtful. See Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216.
I am not persuaded that the notion of mutual 'comity' between Contracting States to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the courts thereof (Traxys Europe SA v Balaji Coke Industry Pvt Ltd (No 2) [2012] FCA 276; (2012) 201 FCR 535 [105]; Hebei Import & Export Corporation v Polytek Engineering Co Ltd [1999] HKCFA 40 [26] ‑ [28]) applies as between courts exercising federal judicial power under the Act and arbitrators whose authority to decide a dispute between contracting parties derives from the private agreement of those parties. The limitations on this court's jurisdiction and power in relation to disputes covered by an international arbitration agreement are sourced in the Act.
The objects of the Act include the facilitation of international trade and commerce by encouraging the use of arbitration as a method of resolving disputes and facilitating the use of arbitration agreements made in relation to international trade and commerce (s 2D). A court in interpreting the Act is required to have regard to the objects of the Act and the statutory 'fact' that 'arbitration is an efficient, impartial, enforceable and timely method by which to resolve commercial disputes' (s 39(2)).
Pivotal to the limitations on this court's jurisdiction and power is s 7 of the Act. It relevantly provides:
(2)Subject to this Part, where:
(a)proceedings instituted by a party to an arbitration agreement to which this section applies against another party to the agreement are pending in a court; and
(b)the proceedings involve the determination of a matter that, in pursuance of the agreement, is capable of settlement by arbitration;
on the application of a party to the agreement, the court shall, by order, upon such conditions (if any) as it thinks fit, stay the proceedings or so much of the proceedings as involves the determination of that matter, as the case may be, and refer the parties to arbitration in respect of that matter.
(3)Where a court makes an order under subsection (2), it may, for the purpose of preserving the rights of the parties, make such interim or supplementary orders as it thinks fit in relation to any property that is the subject of the matter to which the first-mentioned order relates.

It is necessary to identify the relevant 'proceedings' and 'matters' for the purpose of construing and applying s 7(2) and s 7(3) of the Act. First some necessary factual background. There are three relevant disputes between the parties. First, the Approvals Dispute which concerns the liability of the first respondent under the novated Asset Sale Agreement to pay the sum of $80 million (the Disputed Amount), being the third tranche of the purchase price of the Western Australian mining tenements and related assets sold by the appellants.
Second, the Guarantee Dispute which relates to the liability of the third respondent (the guarantor) to pay the Disputed Amount under cl 2.1(a)(ii) of the Guarantee Agreement. The nub of the guarantor's defence is that on a proper construction of the Guarantee Agreement, its liability to guarantee the first respondent's indebtedness under the Asset Sale Agreement does not arise until the Approvals Dispute has been finally resolved.
Third, the Escrow Dispute which concerns the proper construction and effect of cl 3(b) of the Guarantee Agreement. The Escrow Dispute is separate from but closely linked with the Guarantee Dispute. The guarantor contends that its liability to pay the cl 3(b) amount into escrow pending the resolution of the Guarantee Dispute by mediation or arbitration does not arise until the Approval Dispute is resolved. The reasoning underpinning the Guarantee Dispute and the Escrow Dispute is the same.
I agree with the Chief Justice that cl 9.9(c) of the Guarantee Agreement applies to the Escrow Dispute. A 'dispute' for the purposes of cl 9.9(c) (and s 7 of the Act) does not have to satisfy any minimum merits threshold: Blackaby et al, Redfern and Hunter on International Arbitration (5th ed, 2009) [1.59].
The Supreme Court action the subject of the stay application (the substantive proceeding) was commenced by the appellants prior to the commencement of the second step (mediation) in the three‑tiered dispute resolution process in the Guarantee Agreement (and the Asset Sale Agreement). The matters the subject of the substantive proceeding are the Approvals Dispute and the Guarantee Dispute but not the Escrow Dispute.
After the respondents applied for a stay of the substantive proceeding, the appellants filed an application for an interlocutory mandatory injunction requiring the guarantor to pay the Disputed Amount into an escrow account pursuant to the terms of the Guarantee Agreement. Orders were sought in the alternative that the guarantor be required to pay the Disputed Amount into escrow as a condition of any stay of the substantive proceedings (the appellants' interlocutory application). The application for the mandatory injunction was dismissed. There is no appeal from that dismissal.
The order sought by the appellants in their (written) case in the appeal is that the guarantor pay the Disputed Amount into escrow. The proposed order is not conditional upon the making of the stay order or otherwise qualified in any way. At the hearing of the appeal the appellants' position had changed. By that stage the appellants had referred the Approvals Dispute and the Guarantee Dispute (but not the Escrow Dispute) to arbitration and accepted that a stay of the substantive proceedings was appropriate. They also accepted that the Escrow Dispute is capable of settlement by arbitration and that the arbitrator would have power to order the parties to, in effect, undo any escrow payment order made by this court. I understand the appellants' counsel to suggest (ts 110) that this court should make an interim order for payment into escrow to the effect of 'until further order made by the arbitrator in the Guarantee Dispute'. That is, an order by a court exercising federal judicial power would fall for review by the arbitrator who cannot exercise federal judicial power.
The second tier of the dispute resolution mediation had not been completed at the time of the hearing of the appellants' interlocutory application. Prior to completion of the mediation, it was not open to the parties or the court to refer the relevant disputes to arbitration. However, the mediation had finished by the time the primary judge was about to make orders on the appellants' interlocutory application. In those circumstances it is unnecessary to determine whether the court's duty to stay the substantive proceeding had arisen or if any referral of the parties to arbitration would have been premature.
Against that background, I turn to the scope and application of s 7(2) of the Act. The parties accept that the requirements in pars (a) and (b) of s 7(2) are satisfied. For the purposes of s 7(2), the relevant 'proceeding' is the substantive proceeding and the relevant 'matters' are the Approvals Dispute and Guarantee Dispute. There must be a stay of the substantive proceedings because both matters fall within s 7(2)(b).
The Escrow Dispute is not the subject of a claim in the substantive proceeding, or any other separate proceeding, for final relief in the form of specific performance or a mandatory injunction of the guarantor's contractual obligation in cl 3(b) of the Guarantee Agreement. Such a proceeding would have to be stayed under s 7(2).
Any application for an interlocutory mandatory injunction based on the contractual right in cl 3(b) should be made in proceedings for relevant final relief. Such interlocutory relief would not be available in the Guarantee Dispute matter in the substantive proceeding which seeks to enforce a different contractual obligation (that in cl 2.1(a)(i)) for the unconditional final payment to the appellants of the guaranteed amount.
Section 7(2) does not empower the court to grant the relief claimed, being an interlocutory order requiring the guarantor to pay the Disputed Amount into escrow, for the following reasons. First, the court's power is limited to imposing conditions as part of the order imposing the stay. That is, the only consequence of a failure to comply with a condition of the stay is the cessation of the stay of proceedings. The conditions cannot be, in effect, free‑standing orders.
Secondly, the appellants seek an order that is not relevantly connected with the matters the subject of the substantive proceeding. In particular, the appellants seek the imposition of an order that achieves an outcome that would not be available in the substantive proceeding as currently framed.
Thirdly, for the reasons given by the Chief Justice, the order sought by the appellants is not incidental and ancillary to the achievement of the main purpose of s 7(2), being to hold the parties to international commercial agreements to their agreement to arbitrate: O'Brien v Tanning Research Laboratories Inc (1988) 14 NSWLR 601, 622.
Section 7(3) of the Act is the source of the court's power to make a free‑standing interim or supplementary order where it has referred the parties to arbitration under s 7(2) of the Act.
In construing s 7(3), it is proper to have regard to the UNCITRAL Model Law which, subject to pt III of the Act, has the force of law in Australia: s 16 of the Act. Article 9 of the UNCITRAL Model Law provides that it is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection and for a court to grant such measure. An arbitral tribunal has power to order interim measures (as defined) and associated preliminary orders: Article 17, 17A ‑ 17C. An interim measure issued by an arbitral tribunal shall be recognised as binding and, unless otherwise provided by the arbitral tribunal, enforced upon application to a competent court (Article 17H). The court may refuse to recognise or enforce an interim measure on the grounds identified in Article 17I.
Article 17J provides that '[a] court shall have the same power of issuing an interim measure in relation to arbitration proceedings, irrespective of whether their place is in the territory of this State, as it has in relation to proceedings in courts'. With concurrent jurisdiction of that nature, it seems unlikely that the default position is that a court should formulate its orders to facilitate a review or reconsideration thereof by the arbitral tribunal. At first blush, it appears that Articles 9 and 17J of the UNCITRAL Model Law are in tension with the evident policy and purpose of s 7 of the Act. That tension can be reconciled by the court exercising its Article 17J power sparingly and only if there are compelling reasons to do so.
Against that background, I would construe the word 'interim' in s 7(3) to include interlocutory orders (as to the distinction between interim and interlocutory, see Spry ICF, The Principles of Equitable Remedies (6th ed, 2001) 508). It is not necessary to determine what the term 'supplementary' adds. Both type of orders must be in relation to any property that is the subject of the matter to which the stay relates and be for the purpose of preserving the rights of the parties. I am not persuaded that the court's power in s 7(3) is enlivened. In this case the relevant property is the money/damages claim in the Guarantee Dispute matter in the substantive proceeding stayed under s 7(2). The purpose of the s 7(3) order must be the preservation of the appellants' rights to that property if successful in the arbitration. The order sought by the appellants is not to preserve their rights the subject of the Guarantee Dispute, but to enforce a different contractual right, being the payment of funds into an escrow account for subsequent release to the appellants in the event they succeed in the arbitration.

In any event, even if the power in s 7(3) is enlivened, I would decline to exercise it as the proposed order would not be available in the substantive proceeding as currently framed. Moreover, both the Escrow Dispute and the interlocutory application should be determined by the decision‑maker with jurisdiction to determine the Guarantee Dispute and the Approvals Dispute. That is, the arbitral tribunal.
BUSS JA: I agree with Martin CJ.

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: CAPE LAMBERT RESOURCES LTD -v- MCC AUSTRALIA SANJIN MINING PTY LTD [2013] WASCA 66 (S)

CORAM: MARTIN CJ
McLURE P
BUSS JA

HEARD: ON THE PAPERS

DELIVERED : 10 MAY 2013

FILE NO/S: CACV 98 of 2012

BETWEEN: CAPE LAMBERT RESOURCES LTD
MT ANKETELL PTY LTD
Appellants
AND
MCC AUSTRALIA SANJIN MINING PTY LTD
First Respondent
MCC MINING (WESTERN AUSTRALIA) PTY LTD
Second Respondent
METALLURGICAL CORPORATION OF CHINA LIMITED
Third Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :CORBOY J
Citation  :CAPE LAMBERT RESOURCES LTD -v- MCC AUSTRALIA SANJIN MINING PTY LTD [2012] WASC 228
File No  :CIV 2408 of 2010

Catchwords:

Costs - Special costs order - Legal Profession Act (WA), s 280(2) - Importance and complexity

Legislation:

International Arbitration Act 1974 (Cth)
Legal Profession Act 2008 (WA), s 280(2)(c)

Result:

Special costs order made

Category: B

Representation:

Counsel:

Appellants:     Mr A J Myers QC & Mr M P Bruce
First Respondent           :     Dr A S Bell SC & Mr C W Lockhart
Second Respondent      :     Dr A S Bell SC & Mr C W Lockhart
Third Respondent          :     Dr A S Bell SC & Mr C W Lockhart

Solicitors:

Appellants:     Bennett & Co
First Respondent           :     Corrs Chambers Westgarth
Second Respondent      :     Corrs Chambers Westgarth
Third Respondent          :     Corrs Chambers Westgarth

Case(s) referred to in judgment(s):

Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66
EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2008] WASC 275 (S)
Grundy v Cassar [No 2] [2012] WASC 103
Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S)
Verdell Pty Ltd v F & G Nominees Pty Ltd [2002] WASC 58 (S2)

REASONS OF THE COURT:

Summary

This appeal was dismissed for reasons published on 12 March 2013 (Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66). At the time the reasons were published, orders were made dismissing the appeal and requiring the appellants to pay the respondents' costs of the appeal to be taxed if not agreed. The respondents were also given liberty to apply for any special orders relating to the costs of the appeal, and directions were made for the exchange of written submissions in the event that the respondents sought such orders on the basis that the application would be resolved by the court on the papers.
The respondents have applied for an order that their costs of the appeal be taxed without regard to any limit fixed by any applicable costs determinations, including any limits with respect to maximum hourly rates. The appellants neither oppose nor consent to the making of such an order. These are our reasons for concluding that such an order should be made.

Section 280 of the Legal Profession Act 2008 (WA)

The application is made pursuant to s 280(2)(c) of the Legal Profession Act 2008 (WA) (the Act). That section provides that a court may make an order of the kind sought by the respondents if it is of the opinion that the amount of costs allowable in respect of a matter under a costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter. The section requires that before making an order pursuant to its terms the court must form an opinion which has two components. First, the court must determine that the amount of costs allowable in respect of a matter under a legal costs determination is inadequate. Second, the court must conclude that the inadequacy arises because of the 'unusual difficulty, complexity or importance of the matter' (Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S) [11]). Having heard the matter and being familiar with the way in which the case was conducted and the issues which were litigated, the court is in a position to form the opinions required under the section as matters of impression rather than science or mathematics: EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2008] WASC 275 (S) [7]; Verdell Pty Ltd v F & G Nominees Pty Ltd [2002] WASC 58 (S2) [14].

Inadequacy

The customary way of establishing that the amount of costs allowable under the applicable legal costs determination is inadequate is by establishing that there is a fairly arguable case that the bill to be presented to the taxing officer may tax at an amount which is greater than the limit imposed by that determination (Heartlink [16]). In this case, the respondents have filed an affidavit by a lawyer which sets out the amount which the respondents would wish to claim on taxation in respect of relevant items of the applicable scale, if they were not constrained by the limits imposed in that scale. Those amounts substantially exceed the limits applicable under the relevant scale. The lawyer deposes to the fact that the amounts actually charged in respect of those items exceed the amounts which the respondents wish to claim on taxation. Having regard to the financial significance and complexity of the issues ventilated during the appeal, the affidavit satisfies us that there is a fairly arguable case that the bill to be presented may tax at an amount which is greater than the limits applicable under the relevant costs determination, and that the amount allowable under the relevant determination is inadequate, in accordance with s 280 of the Act.

Unusual difficulty, complexity or importance

It is accepted that the word 'unusual' in s 280(2) qualifies only the term 'difficulty' and not the terms 'complexity' or 'importance' - see Grundy v Cassar [No 2] [2012] WASC 103 [50]. At the heart of the appeal was an issue concerning an assertion that an amount of $80,000,000 should be paid into escrow pending a commercial arbitration between the parties. The issues in the appeal included issues with respect to the construction of the arbitration agreement in force between the parties and the proper construction and effect of s 7 of the International Arbitration Act 1974 (Cth) governing the relationship between the domestic courts of Australia and international commercial arbitration tribunals. In our view, these issues, and the other matters raised during the course of argument on the appeal were complex and important within the meaning of s 280 of the Act.

Conclusion

For these reasons, an order should be made pursuant to s 280 of the Act providing that the respondents' costs be taxed without regard to any limits imposed by any applicable costs determination including any limit with respect to maximum hourly rates.