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Pharmaceutical Processing Technology Inc v Sci-Chem International Pty Ltd

Pharmaceutical Processing Technology Inc v Sci-Chem International Pty Ltd

Case [2021] NSWSC 1078 27 August 2021

International Commercial Arbitration

Interim Measures

Interim Injunction

UNCITRAL Model Law

International Trade Law

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Supreme Court

New South Wales

Medium Neutral Citation: Pharmaceutical Processing Technology Inc v Sci-Chem International Pty Ltd [2021] NSWSC 1078
Hearing dates: 26 August 2021
Date of orders: 27 August 2021
Decision date: 27 August 2021
Jurisdiction: Equity - Commercial List
Before: Williams J
Decision:
See orders at [96].

Catchwords:
INTERNATIONAL COMMERCIAL ARBITRATION – Application for interim measure under Article 17J of the UNCITRAL Model Law on International Commercial Arbitration – sparing approach to exercise of the power under Article 17J – where serious question to be tried concerning validity of notices issued by defendant terminating or purporting to terminate contract – where plaintiff likely to suffer harm for which damages would not be an adequate remedy in the short-term if interim injunction not granted – where evidence does not establish that defendant likely to suffer harm in short-term – where plaintiff commenced arbitration proceedings only four days after commencing proceeding in this Court – where plaintiff accepts that continuation of injunction may be revisited by arbitral tribunal and submits that conditions for any longer-term interim injunction, including any security for the plaintiff’s undertaking as to damages, are “quintessentially matters for the arbitrator” – injunction granted only for short period necessary for plaintiff to have the opportunity to apply expeditiously to arbitral tribunal for any longer term interim injunction

Legislation Cited:
International Arbitration Act 1974 (Cth), s 16
UNCITRAL Model Law on International Commercial Arbitration, Articles 17 and 17J

Cases Cited:
Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; [2001] HCA 63
Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618
Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd (2013) 298 ALR 666; [2013] WASCA 66
Celetem SA v Roust Holdings [2005] 4 All ER 52; [2005] EWCA Civ 618
Cherry v Steele‑Park (2017) 96 NSWLR 548; [2017] NSWCA 295
Crawford Fitting Co v Sydney Valve & Fittings Pty Ltd (1988) 14 NSWLR 438
Kawasaki Heavy Industries Ltd v Laing O’Rourke Australia Construction Pty Ltd (2017) 96 NSWLR 329; [2017] NSWCA 291
Lawrence v Ciantar [2020] NSWCA 89
Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105
Papas v Grave [2013] NSWCA 308
Sino Dragon Trading Ltd v Noble Resources International Pte Ltd (2015) 246 FCR 479; [2015] FCA 1028

Texts Cited:
Nygh’s Conflict of Laws in Australia (10th ed, 2020) at [17.37]-[17.47]

Category: Principal judgment
Parties: Pharmaceutical Processing Technology Inc (Plaintiff)
Sci-Chem International Pty Ltd (ACN 115 411 599) (Defendant)
Representation:
Counsel:
Mr M Izzo SC with Ms King (Plaintiff)
Mr A Shah (sole director of Defendant, with leave) (Defendant)
Solicitors:
Connor & Co Lawyers (Plaintiff)
N/A (Defendant)

File Number(s): 2021/233775
Publication restriction: N/A

Judgment

Introduction

These reasons relate to an application by the plaintiff for an injunction as an interim measure in relation to an international commercial arbitration commenced by the plaintiff on 20 August 2021. The application is made pursuant to Article 17J of the UNCITRAL Model Law on…

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

AGLC: Pharmaceutical Processing Technology Inc v Sci-Chem International Pty Ltd [2021] NSWSC 1078
Case: [2021] NSWSC 1078
Decision Date: 27 August 2021

CaseChat Overview and Summary

The parties involved in this case are Pharmaceutical Processing Technology Inc (the plaintiff) and Sci-Chem International Pty Ltd (the defendant). The dispute pertains to the validity of termination notices issued by the defendant, which the plaintiff alleges are invalid. The case was heard in the Federal Court of Australia. The plaintiff sought an interim injunction under Article 17J of the UNCITRAL Model Law on International Commercial Arbitration to prevent the defendant from acting on the termination notices until the matter could be fully determined through arbitration.

The court needed to decide whether it should grant the plaintiff's application for an interim injunction. The key issues included whether there was a serious question to be tried concerning the validity of the termination notices, whether the plaintiff was likely to suffer harm for which damages would not be an adequate remedy in the short-term if the injunction was not granted, and whether the defendant was likely to suffer harm in the short-term. Additionally, the court had to consider that the plaintiff had commenced arbitration proceedings only four days after initiating the proceedings in this Court, and that the plaintiff accepted that the continuation of the injunction might be revisited by the arbitral tribunal.

The court determined that there was a serious question to be tried regarding the validity of the termination notices. It found that the plaintiff was likely to suffer harm that would not be adequately remedied by damages if the injunction was not granted, and that the defendant was not likely to suffer such harm in the short-term. Given that the plaintiff had already commenced arbitration proceedings and accepted that the conditions for a longer-term interim injunction were matters for the arbitrator, the court decided to grant an injunction only for the short period necessary for the plaintiff to apply expeditiously to the arbitral tribunal for any longer-term injunction. The court also noted that the plaintiff should provide security for its undertaking as to damages, a matter that was to be determined by the arbitrator.

Orders