International Petroleum Investment Company v Independent Public Business Corporation of Papua New Guinea

The appeal concerned the construction of a Bond Deed Poll between International Petroleum Investment Company (the plaintiff) and the Independent Public Business Corporation of Papua New Guinea (the defendant). The dispute arose from a mandatory exchange procedure stipulated in the deed, which involved the valuation of certain assets. The primary judge had made orders concerning the valuation and the defendant's liability to the plaintiff.

The Court of Appeal was required to determine whether the primary judge had erred in construing the term "market value" within the context of the mandatory exchange procedure. Specifically, the court considered whether the primary judge was correct in concluding that the respondent's valuer had not delivered a binding valuation and whether the respondent was entitled to request a subsequent alternative valuation under the deed. A key issue was the consequence, as a matter of deed construction, where each party appointed an independent valuer but only one of the two determinations was binding on the parties. The court also considered whether it was appropriate for the court to undertake the valuation process itself or to appoint a referee.

The Court of Appeal allowed the appeal, finding that the primary judge had erred in his construction of the deed. The court determined that the valuation provided by the respondent's valuer was indeed binding and that the respondent was not entitled to a subsequent alternative valuation. The court reasoned that the deed's provisions regarding the appointment of valuers and the determination of market value were clear and did not permit the course of action taken by the respondent. Consequently, the court set aside the primary judge's orders regarding the valuation and the defendant's liability.

The Court of Appeal ordered that the defendant pay to the plaintiff the sum of AUD 40,303,856.33, plus interest from 3 April 2014 at the Default Rate specified in the Bond Deed. The defendant was also ordered to pay the plaintiff's costs of the proceedings at first instance. The cross-appeal and notice of contention were dismissed, and the respondent was ordered to pay the appellant's costs of the appeal.