Construcciones y Auxiliar de Ferrocarriles S.A. v CPB Contractors Pty Limited (No 2)

The case of Construcciones y Auxiliar de Ferrocarriles S.A. v CPB Contractors Pty Limited (No 2) involved a dispute between the parties relating to a construction contract. The respondent, CPB Contractors Pty Limited, had successfully obtained a stay of proceedings under section 7(2) of the International Arbitration Act 1974 (Cth) and sought an order for costs. The primary legal issue before the court was whether the general rule that costs follow the event should be departed from in this instance.

The court considered whether the respondent's success in obtaining the stay justified a departure from the general rule on costs. The court noted that the respondent's application for a stay was not frivolous and that it had a reasonable prospect of success. The court found that the respondent's application had been made in good faith, and that the applicant had acted reasonably in seeking the stay. The court held that in these circumstances, the general rule that costs follow the event should be departed from, and that the respondent was entitled to an order for costs.

The court ordered that the applicant pay the respondent's costs of and incidental to the application for a stay, and that the respondent pay the applicant's costs of and incidental to the application for an order for costs. The court emphasised that its decision was based on the specific circumstances of the case, and that it did not establish a broad precedent for departing from the general rule on costs.