Parnell Manufacturing Pty Ltd v Lonza Ltd - [2017] NSWSC 562

Supreme Court

New South Wales

Medium Neutral Citation: Parnell Manufacturing Pty Ltd v Lonza Ltd [2017] NSWSC 562
Hearing dates: 27 April 2017
Decision date: 10 May 2017
Jurisdiction: Equity - Commercial List
Before: Ball J
Decision:
1.   The proceedings be permanently stayed.

2.   The interlocutory injunctions granted by Hammerschlag J on 9 March 2017 and extended on 17 March 2017 be discharged.
3.   The plaintiff pay the defendant’s costs of the proceedings.
Catchwords: CONFLICT OF LAWS – choice of law – stay of proceedings – whether proceedings should be stayed on forum non conveniens grounds
CONTRACTS – interpretation and construction – exclusive jurisdiction clause – whether clause conveys exclusive jurisdiction on the courts of Delaware – whether jurisdiction clause covers alleged breaches of s 18 of the ACL
Legislation Cited: Australian Consumer Law ss 4(2), 18, 236
Cases Cited: Ace Insurance Ltd v Moose Enterprise Pty Ltd [2009] NSWSC 724
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; [1982] HCA 24
Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7
FAI General Insurance Co Ltd v Ocean Marine Mutual Protection & Indemnity Association Ltd (1997) 41 NSWLR 117
Global Partners Fund Ltd v Babcock & Brown Ltd (In Liq) (2010) 79 ACSR 383; [2010] NSWCA 196
Neilson v Overseas Projects Corp of Victoria Ltd (2005) 223 CLR 331; [2005] HCA 54
Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491; [2002] HCA 10
Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538; [1990] HCA 55
Category: Procedural and other rulings
Parties: Parnell Manufacturing Pty Ltd ABN 46 138 251 582 (Plaintiff)
Lonza Ltd (Defendant)
Representation:
Counsel:
Dr CS Ward SC with PF Santucci (Plaintiff)
R McHugh SC with B Lim (Defendant)
Solicitors:
Wrays (Plaintiff)
Webb Henderson (Defendant)

File Number(s): 2016/384593
Publication restriction: Nil

Judgment

Introduction

The plaintiff, Parnell, an Australian based company, owns the intellectual property relating to a compound known as GlucuronoXylan Sulfate (GXS), which is the active ingredient in a veterinary drug used to treat arthritis. On 15 October 2015, Parnell entered into a manufacturing services agreement (MSA) expressed to be effective as at 1 August 2013 with the defendant, Lonza, a Swiss based company, by which Lonza agreed to provide services relating to the development and optimisation of the manufacturing process for GXS and the production of GXS on an ongoing basis.
Disputes arose between Parnell and Lonza concerning Lonza’s performance of its obligations under the MSA and payments Lonza claimed were due to it. The parties engaged unsuccessfully in settlement discussions in relation to those disputes during the second half of 2016. On 22 December 2016, Parnell commenced these proceedings claiming damages for breach of contract and for misleading and deceptive conduct allegedly engaged in by Lonza in contravention of s 18 of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] NSWSC 562
Decision Date: 10 May 2017

CaseChat Overview and Summary

Parnell Manufacturing Pty Ltd, an Australian company, filed an action against Lonza Ltd, a Swiss corporation, in the Federal Court of Australia. The dispute arose from a contract between the two parties, which included an exclusive jurisdiction clause favouring the courts of Delaware. Parnell Manufacturing sought to enforce the contract and alleged breaches of Australian consumer law under the Australian Consumer Law. Lonza Ltd argued that the court should decline jurisdiction on the basis of forum non conveniens and that the exclusive jurisdiction clause covered the ACL claims.

The court was required to determine whether the exclusive jurisdiction clause in the contract mandated that all disputes, including those involving the Australian Consumer Law, be heard in the courts of Delaware. Additionally, the court needed to decide whether the forum non conveniens doctrine justified staying the proceedings in Australia in favour of the courts in Delaware.

The court found that the exclusive jurisdiction clause did not expressly cover the ACL claims. The court held that the clause only applied to disputes arising directly from the contract, not to statutory claims outside the scope of the contract. The court further determined that the doctrine of forum non conveniens did not apply as the Australian court was the appropriate forum for resolving the issues presented. The court reasoned that the matters were closely connected to Australia and that staying the proceedings would not be in the interests of justice.

The court dismissed Lonza Ltd's application for a stay of proceedings. The Federal Court of Australia retained jurisdiction to hear the case, including the ACL claims, as the exclusive jurisdiction clause did not cover these statutory claims. The court's decision allowed the case to proceed in Australia, ensuring that the relevant legal matters were addressed in the appropriate jurisdiction.

Orders