Power and Water Corporation v Eni Australia B.V - [2022] WASC 376

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   POWER AND WATER CORPORATION -v- ENI AUSTRALIA B.V [2022] WASC 376
CORAM:   ALLANSON J
HEARD:   29 SEPTEMBER 2022
DELIVERED          :   4 OCTOBER 2022
PUBLISHED           :   10 NOVEMBER 2022
FILE NO/S:   CIV 1895 of 2022
BETWEEN:   POWER AND WATER CORPORATION
Plaintiff
AND
ENI AUSTRALIA B.V
Defendant

Catchwords:

Arbitration - Where arbitration agreement has exception permitting party to apply to court for urgent declaratory relief - Where party to agreement sought urgent declaration of breach of contract - Whether proceedings should be stayed and parties referred to arbitration

Legislation:

Commercial Arbitration Act 2012 (WA)
Power and Water Corporation Act 1987 (NT)
Rules of the Supreme Court 1971 (WA)

Result:

Action stayed pursuant to the Commercial Arbitration Act 2012

Category: B

Representation:

Counsel:

Plaintiff	:	S K Dharmananda SC & L N Firios
Defendant	:	N J Young KC & P Walker

Solicitors:

Plaintiff	:	Grondal Bruining
Defendant	:	Allen & Overy

Cases referred to in decision:

AED Oil Ltd v Puffin FPSO Ltd (2010) 27 VR 22; [2010] VSCA 37
CPB Contractors Pty Ltd v JKC Australian LNG Pty Ltd [2017] WASC 112
CPB Contractors Pty Ltd v Rizzani De Eccher Australia Pty Ltd [2017] NSWSC 1798
Green v Econia Pty Ltd [2016] SASC 153
WCX M4-M5 Link At Pty Ltd v Acciona Infrastructure Projects Australia Pty Ltd (No 2) [2022] NSWSC 505

ALLANSON J:

Introduction

Power and Water Corporation (PWC) and Eni Australia BV (Eni) are parties to a Gas Sale Agreement, dated 1 June 2006 and subsequently amended and varied.
The Gas Sale Agreement is subject to an arbitration agreement set out in sch 4.
On 29 August 2022, PWC commenced proceedings by writ in which it seeks a declaration that Eni has breached the Gas Sale Agreement, orders giving effect to the declaration, and such other orders as the court deems fit. PWC relies on an exception to the agreement to refer disputes to arbitration. The exception is set out in item 5 of sch 4:
This Schedule 4 does not prevent either Party from seeking urgent interlocutory or declaratory relief from a court of competent jurisdiction where, in that Party's reasonable opinion, that action is necessary to protect that Party's rights.
Eni entered a conditional appearance on 9 September 2022, and on 16 September 2022, applied by summons for an order pursuant to s 8(1) of the Commercial Arbitration Act 2012 (WA) staying the proceedings.

The parties

PWC is a government owned corporation established under the Power and Water Corporation Act 1987 (NT). Its functions are set out in s 14 to 14C of the Act and include 'to generate, acquire, exchange, transport, distribute, market and otherwise supply electricity'; and 'to buy, sell, process, store or transport' gas or products derived from gas.
Eni is a company registered in the Netherlands and registered as a foreign company in Australia. Eni's registered office in Australia is in Perth. As at 1 June 2006, it primarily conducted business in Australia out of its Perth office.

The issues on the stay application

The issues on the application were confined to the operation of item 5. It was not in dispute that, pursuant to the Commercial Arbitration Act, the court should stay the action and refer the parties to arbitration unless that exception applied. Nor was it in dispute that the requirement for relief to be urgent applied to declaratory relief and not only interlocutory relief.
The parties agreed that, for a matter to be urgent, it must be 'pressing; compelling or requiring immediate action or attention'.[1] On a clause which was not materially distinguishable from item 5, the Victorian Court of Appeal expressly rejected that the only requirement imposed by the provision is that it be reasonably open to a party to determine that relief be urgent. The court held that the provision contains two requirements:
First, that the relief was in fact urgent, a matter to be determined objectively. Secondly, that the party claiming the relief form the reasonable opinion that the relief was necessary to protect that party's rights.[2]
[1] CPB Contractors Pty Ltd v JKC Australian LNG Pty Ltd [2017] WASC 112 [37]; see also Green v Econia Pty v Ltd [2016] SASC 153 [23]; CPB Contractors Pty Ltd v Rizzani De Eccher Australia Pty Ltd [2017] NSWSC 1798 [105], [119], WCX M4-M5 Link At Pty Ltd v Acciona Infrastructure Projects Australia Pty Ltd (No 2) [2022] NSWSC 505.
[2] AED Oil Ltd v Puffin FPSO Ltd (2010) 27 VR 22; [2010] VSCA 37 [27]; Green v Econia Pty Ltd[2016] SASC 153.
The issues identified by the parties are:
(1)Is the relief sought in the proceedings properly characterised as 'declaratory relief' where the prayer for relief is not so confined and the applicant also seeks orders 'giving effect to' the declaration?
(2)Is the action for declaratory relief urgent?
(3)Did PWC in fact form the opinion that the relief sought was necessary to protect its rights?
(4)Did PWC reasonably form that opinion?
(5)In forming that opinion, is it necessary that PWC considered the comparison between resolution in the court and in arbitration?
(6)What are the rights PWC sought to protect? Are they rights or simply a commercial or governmental position.
(7)The effect of delay in bringing proceedings on whether the action should be held to be urgent, and whether PWC has reasonably formed the opinion that the action is necessary to protect its rights.
I have not attempted to resolve all of the matters raised in the detailed submissions of both parties. To be able to provide the parties with a quick resolution of the application, I have determined only those matters which are sufficient for the conclusion I have reached.

The evidence

Eni read the following affidavits:
(1)Two affidavits of David Ashley Jenaway, lawyer, sworn 16 September 2022 and 27 September 2022; and
(2)The affidavit of Ernest Frank Oliver Delfos, Director and Managing Director of Exploration and Production Activity of Eni, sworn 27 September 2022.
PWC read:
(1)The affidavit of Antoni Simon Jon Murphy, Executive General Manager of the Gas Services Division of PWC, sworn 16 September 2022;
(2)The affidavit of Alistair John Kent Trier, Chairman of the Gas Task Force for the Department of the Chief Minister and Cabinet in the Northern Territory Government, sworn 22 September 2022;
(3)The affidavit of Dean Edward Grondal, lawyer, sworn 22 September 2022; and
(4)The affidavit of Charles Staples, Commercial Manager of the Gas Services Division of PWC, sworn 29 September 2022.
The affidavits were read subject to objections by PWC to five paragraphs in the affidavit of Mr Delfos. Only two of those paragraphs were read. In forming my opinion, I have not found it necessary to have regard to either of the paragraphs objected to.
Eni objected to part of the affidavit of Mr Staples. It was agreed that the objections could be dealt with, as required, in making my decision.
Mr Trier was briefly cross examined.
Evidence about what had occurred before the proceedings were commenced was largely based on documents attached to the affidavits of Mr Murphy and Mr Delfos. Mr Grondal gave evidence of procedural matters leading to the proceedings.
Evidence about PWC's need for information for the purposes of its contingency planning, both short term emergency planning and longer term arrangements, was adduced through the affidavits of Mr Murphy, Mr Trier, and Mr Staples.

The Gas Sale Agreement

The Gas Sale Agreement was made in 2006 and continues in effect for a Supply Period of 25 years from its actual start date.[3]
[3] Clause 6.
The relevant clauses relied on by PWC are:
(a)Eni will supply Gas to PWC to meet PWC's Daily Nomination during the Supply Period (cl 8.1).
(b)By cl 15, in the event of a curtailment, interruption or suspension to the delivery of gas to PWC (defined as a Curtailment), Eni must, among other things:
(i)within 6 hours, give written notice providing reasonable details of the reason for the Curtailment and its likely duration (cl 15.3(c));
(ii)within 24 hours, provide written particulars of an assessment of the cause of the Curtailment and the delivery capacity of the Seller's Facilities (if any) likely to be available during the Curtailment (cl 15.3(d)); and
(iii)update the notices given under clauses 15.3(c) and (d) whenever there is a material change (cl 15.3(e));
(c)PWC may inspect, or nominate a third party to inspect, Eni's records to confirm the accuracy of any information provided to PWC under clause 15, upon reasonable notice, for at least two years from the end of the year to which the records relate (cl 15.5).
Non-performance as a result of Force Majeure will be excused and will give rise to no liability.[4] Clause 19.4 requires a party which is, by reason of Force Majeure, unable to perform any obligation to notify the other party, providing prescribed information including full particulars of the event or circumstance of Force Majeure. There is no provision, equivalent to cl 15.5, for inspection of records.
[4] Clause 19.
Clause 29.2 provides:
Any dispute, controversy or claim (Dispute) arising out of or relating to this Agreement or the breach, termination or claimed invalidity of this Agreement must be dealt with in accordance with Schedule 4.
Schedule 4 contains a separate agreement for the resolution of disputes, including by reference to arbitration. Relevantly:
(a)Item 1.3 prescribes a dispute resolution procedure with written notice of the Dispute and meetings between representatives of the parties to discuss the Dispute with the aim of resolving it, and, if it is not resolved, referral to negotiation by senior executives.[5]
(b)If the senior executives are unable to resolve the dispute, or they do not convene, then either party may refer the Dispute to determination by an independent expert under item 3 (if the dispute is of a financial or technical nature or if the parties otherwise agree), or to arbitration under item 4 (in any other case).[6]
(c)If the Dispute is referred to arbitration, the arbitration is to be conducted in accordance with item 4.[7] The arbitration is to be conducted in accordance with the Australian Centre for International Commercial Arbitration Rules.[8] The arbitration is to be private and confidential.[9]
[5] Sch 4, item 1.3(a), 1.3(b) and item 2.
[6] Sch 4, item 1.3(c).
[7] Sch 4, item 4.1.
[8] Sch 4, item 4.2(a).
[9] Sch 4, item 4.2(g).
Item 5 in sch 4, which I have set out earlier, provides the exception for urgent interlocutory or declaratory relief.

PWC's pleaded case

PWC pleads that, starting on 14 April 2021, there has been a Curtailment under the agreement.[10] On or around 22 April 2021, Eni gave written particulars of the cause of the Curtailment and notice that it arose from a Force Majeure event.[11]
[10] Statement of Claim [5].
[11] Statement of Claim [6].
On or around 12 November 2021, PWC made a request under cl 15.5 of the agreement to inspect Eni's records to confirm the information about the Curtailment.[12]
[12] Statement of Claim [7].
On 14 December 2021, representatives of Eni and PWC attended a meeting at Eni's office in Perth to discuss, among other things, the Curtailment.[13]
[13] Statement of Claim [8].
On 18 January 2022, Eni provided an update to the notice of Curtailment and a second notice of Force Majeure.[14]
[14] Statement of Claim [9].
On or about 10 June 2022, PWC made a second request to inspect Eni's records.[15]
[15] Statement of Claim [10].
PWC alleges that Eni has breached cl 15.5 of the agreement by refusing to comply with the inspection requests.[16]
[16] Statement of Claim [11].
PWC pleads it has been unable to verify the information provided by Eni about the Curtailment, 'a matter to which PWC must give urgent attention'.[17]
[17] Statement of Claim [12].
In particulars, PWC identifies the letters containing the notices and requests. With one exception, the particulars identify only the date, parties, and title of each relevant letter. The exception is the particulars to Statement of Claim [11]. PWC there pleads a letter from Eni dated 29 June 2022:
denying the request [for inspection] on the basis that it was variously: (a) overbroad; (b) related to the second Force Majeure notice and not the Curtailment; (c) related to the slide deck provided with the commercial meeting held on 21 December 2021[18] and not the Curtailment; and (d) was out of time.
[18] The correct date of the meeting is 14 December 2021.
The particulars to [11], are the only statement of the issue of construction of the Gas Sale Agreement on which the parties are in dispute.

The notices and requests for information.

The first notice pleaded by PWC is a Notice of Curtailment by letter dated 22 April 2021.[19] The estimated duration of Curtailment was [redacted], with estimated delivery capacity during that period [redacted].
[19] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, AM 6.
Particulars of the cause of the Curtailment were set out in annexure which stated the Curtailment 'arises from [redacted]'. Eni noted that further investigations were needed to better define the cause, and the opportunity for those investigations would be during a planned offshore campaign scheduled for June/July 2021.
A Force Majeure Notice, also dated 22 April 2021, stated that the Curtailment had arisen 'as a result of the Force Majeure event or circumstances the subject of this Notice'.[20] Particulars of the event or circumstance of Force Majeure were the same as those given for the Curtailment.
[20] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, AM 7.
On 27 May 2021, PWC sent a request to inspect records relating a Curtailment in May 2020.[21] An 'indicative list' of records to which PWC sought access was provided. Without evidence about the contents of the Notice of Curtailment, it is not possible to comment on the items in that list.
[21] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, AM 8.
Eni wrote to PWC on 25 June 2021, responding to a letter from PWC of 27 May 2021.[22] The record of correspondence before the court appears incomplete: Eni responds to comments and statements by PWC which are not in the letter now in evidence. Eni's response suggests there had been another letter from PWC, dated 27 May 2021, responding to the Force Majeure Notice of 22 April 2021.
[22] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, AM 9.
PWC first requested to inspect Eni's records with regard to the Notice of Curtailment of 22 April 2021, pursuant to clause 15.5, by letter dated 12 November 2021.[23] The letter refers to both the Curtailment and the Force Majeure Notice, as well as to emails not in evidence. Relevantly, PWC requested Eni to update the Force Majeure Notice and other notices provided by Eni, and requested access 'to all such records of Eni in relation to the Seller's facilities that may reasonably enable it to confirm the information provided to PWC'. PWC wrote that it would shortly provide a list of the records it wished to access.
[23] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, AM 11.
On 12 November 2021, PWC sent two further letters to Eni headed 'Gas Sale Agreement - Curtailment and Force Majeure event notice', responding to Eni's letter of 25 June 2021.[24] The letters were primarily directed to the validity of the Force Majeure claim. PWC requested that Eni provide 'all relevant information and documents relating to the purported Force Majeure event or circumstance', and that the information would enable PWC to determine if Eni was meeting its obligations under cl 19.4.
[24] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, AM 12 and AM 13.
On the material now before the court, there is no evidence of list of records which PWC wished to inspect pursuant to cl 15.5 being sent around the time of these letters.
PWC wrote again on 24 December 2021, expressing concerns in relation to the flow of information from Eni in relation to the Force Majeure claim.[25]
[25] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, AM 14.
Eni responded on 31 December 2021,[26] and again on 18 January 2022.[27] Its responses were directed towards PWC's comments about the Force Majeure claim, and the information it provided at the meeting between the parties on 14 December 2021.
[26] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, AM 15.
[27] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, AM 16.
A second letter from Eni, dated 18 January 2022, headed 'Gas Sale Agreement - Curtailment' provided an update to the notice of April 2021. Eni stated its position that PWC's entitlement to inspect records was limited to 'records to confirm the accuracy of any information provided to [PWC] under this clause 15'. Eni suggested that PWC formulate a specific request for the categories of records that it wished to inspect and which matched 'the terms and purpose' of clause 15.5. Eni wrote that it was not obliged to and did not propose to accede to 'a far-ranging enquiry in a manner inconsistent with that provision'.[28]
[28] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, AM 17.
In an annexure to the letter of 18 January 2022, an update to the Notice of Curtailment, Eni provided information on the reason for the curtailment, its likely duration, and the estimated delivery capacity of its facilities during the period of Curtailment. Eni stated:
(i)The cause of the Curtailment is an event or circumstance of Force Majeure. Eni confirms that it provided full particulars of its current knowledge of the event or circumstance of Force Majeure at a meeting between the parties dated 14 December 2021. Eni has also provided PWC with the slide presentation that was given at that meeting. Eni relies upon, but does not repeat in full, the detail of that meeting and presentation in this notice.
(ii)As Eni explained in its Curtailment notice dated 22 April 2021, [redacted]. Eni also explained that investigations were ongoing and that further particulars would be provided.[29]
[29] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, AM 17.
Further letters passed between the parties. In summary, Eni continued to provide information to PWC but did not provide access to its records.
On 10 June 2022, PWC sent the second pleaded request to inspect records of Eni. The request was to inspect records 'to confirm the accuracy of the information provided to PWC under clause 15 of the [agreement] in relation to the Curtailment which forms the basis of the Second Force Majeure Notice'.[30] An annexure to the letter set out 'an indicative list' of the records PWC sought to inspect. The annexure listed 11 items (not exhaustive). In summary, the first five items were analyses and records referred to in the presentation on 14 December 2021; the remaining items related to matters referred to in the Second Force Majeure Notice.
[30] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, AM 23.
Eni responded on 29 June 2022.[31] In substance, it said the request to inspect was 'overbroad and impermissible' and would require Eni 'to embark on an unmanageable task to identify records that relate to any information that has been provided under clause 15, no matter how immaterial or uncontroversial'. Eni again required PWC to formulate specific requests for records 'that match the terms and purpose' of clause 15.5. In particular, Eni disputed PWC's reliance on the meeting of 14 December 2021 and the Second Force Majeure Notice as a basis for its request.
[31] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, AM 25.
There was further correspondence between the parties and some negotiations.

On 11 August 2022, Mr Murphy of PWC wrote by email to Mr Brett Walker of Eni, referring to those discussions and that PWC had been and was proceeding on the basis that Eni would not rely on any delay in response to any subsequent action.[32] Although the email was expressed as 'confirming' that position, there is no evidence that the position had previously been stated.
[32] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, AM 35.
One of the areas of objection regarding the affidavit evidence was the admissibility of paragraph 39 in the affidavit of Mr Delfos. I will not allow that evidence, on the basis that it refers to without prejudice meetings.

The evidence of urgency

The PWC witnesses

Mr Murphy

Mr Murphy is the Executive General Manager, Gas Services Division of PWC.
Through Mr Murphy, PWC adduced unchallenged evidence that it supplies gas to two main customer segments: 'Tier 1' customers, the gas‑fired power generators supplying power for the residential sector in the Northern Territory; and 'Tier 2' customers, being industrial customers.
There has been an ongoing curtailment to Eni's supply of gas since April 2021. As a result, Eni has been unable to supply PWC with its full contractual entitlement (up to a maximum of [redacted]/day) and this has disrupted PWC's ability to meet Tier 1 and Tier 2 customer demand.
From about February 2022, the Northern Territory Government set up a standard weekly meeting with Eni to advise the government directly on the Curtailment. PWC is invited to participate in the meetings.
Mr Murphy gave evidence that the only information PWC has about the Curtailment is the limited information provided by Eni, and PWC has been unable to verify the information.[33] He expressed concern that Eni 'has not given us the full picture', and that the Curtailment may 'represent an ongoing and long-term problem for supplies from the Blacktip field and potentially some associated problem with the onshore facilities'.[34] Eni is supplying less gas than PWC needs. PWC is currently receiving about [redacted]/day, when the demand from Tier 1 customers (the power generators) ranges between 50 to 60 TJ/day.[35] The demand for electricity is expected to increase with the approaching wet season.
[33] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, [34].
[34] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, [36].
[35] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, [40].
It was also not challenged that PWC must find alternative emergency supplies to cover the gap in the short term, and to meet demand in the longer term will need to identify and secure alternative sources of supply.[36] Mr Murphy said that should PWC need to go down the route of securing alternative supplies, it needed to get started immediately. He said:
A considerable amount of planning and logistical work is therefore required to deal with the Curtailment, depending on the nature of the issue and how serious it is. We therefore need to confirm, now, the information provided by Eni so that we can properly plan to take appropriate steps of mitigation in order to meet our obligations downstream, and work out the costs exposure and how this will be covered. Immediate action is necessary to protect PWC's position with respect to its customers and stakeholders.[37]
[36] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, [43].
[37] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, [45].
Mr Murphy referred to the formation of a Steering Committee established in December 2021 to manage the gas Curtailment situation. There is also a Gas Task Force working with PWC on risk mitigation options.[38]
[38] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, [48] - [49].
Mr Murphy said that when they inspect Eni's records they will report their findings through the Steering committee and that information will help inform the government about the options available and the costs and risks, including the potential exercise of emergency powers.[39]
[39] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, [51].
Mr Murphy deposed that PWC 'has become increasingly concerned about the reliability, completeness, and accuracy of the information provided [by Eni]'.[40] He expressed the view that PWC 'must take urgent action to resolve the situation to protect PWC's rights'.[41]

Mr Staples

[40] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, [54].

[41] Affidavit of Antoni Simon Jon Murphy, sworn 16 September 2022, [54].

Mr Staples is the Commercial Manager the Gas Services Division of PWC.
His affidavit was apparently produced to answer the submission by Eni, in its written submissions, that PWC had not proved that it actually formed the opinion that the court action was necessary to protect its rights. His evidence on that issue, however, was both vague and conclusionary. For example, he asserted, 'PWC commenced the proceedings and sought relief from this Honourable Court because it had formed the opinion that such action was necessary to protect its rights'.[42] And:
To put the matter beyond any doubt, I confirm that PWC has given due consideration to its rights in relation to the [Gas Sale Agreement] including its right to inspect and verify the information provided by Eni about the Curtailment, and what it must do to protect those rights. PWC formed the opinion that it was necessary to seek an urgent declaration from this Honourable Court to protect its rights because:
(a)this provides the most direct and clear path to a resolution of the issue over the inspection of Eni's record;
(b)there is an urgent need to conduct the inspection because of its impact on the capacity of PWC and the Northern Territory Government to plan and undertake steps of mitigation. I understand that Mr Murphy has provided an affidavit explaining this urgency; and
(c)PWC fears there would be time lost in, or challenges made in, an arbitration procedure.[43]
[42] Affidavit of Charles Staples, sworn 29 September 2022, [8].
[43] Affidavit of Charles Staples, sworn 29 September 2022, [99].
Counsel for Eni properly submitted that evidence of Mr Staples was conclusionary - with the necessary information upon which his conclusion was formed not in evidence - and argumentative. Even were it to be admitted, the evidence is so vague that I am not satisfied I could make fact findings based upon it.

Mr Trier

Mr Trier has been the Chairman of the Gas Taskforce in the Northern Territory since September 2020.
Mr Trier became aware of issues involving the reduction of the supply of gas from Eni in late 2021. In around December 2021, a Gas Strategy Steering Committee was established, with Mr Trier as chair, to help manage the Curtailment issues and keep the government informed of re-establishing supply.[44]
[44] Affidavit of Alister John Kent Trier, sworn 22 September 2022, [10].
Mr Trier gave very general evidence about the effect of the Curtailment on PWC. In particular, he stated that he was aware 'there is currently a real likelihood of gas supply from Eni to PWC ceasing in the coming months'.[45] Mr Trier was cross examined on this statement in particular. He identified no reasonable basis for the statement of a 'real likelihood', nor could he specify what period he meant by 'coming months'.
[45] Affidavit of Alister John Kent Trier, sworn 22 September 2022, [11(f)].
Mr Trier spoke generally of the need for information to enable the government to make contingency plans, including alternative suppliers of gas. His evidence highlighted the different positions of Eni and PWC (and the Northern Territory government). Eni presses that it has been making information available on a continuing basis and that the information provided is sufficient, at least as a base case, for planning for contingencies. Mr Trier said, in effect, that without inspection of the records the government would be undertaking its processes based on assertion and not factual information.
Mr Trier was also questioned about alternative supplies of gas, on the basis of emergency arrangements, and possibly longer term. It is impossible to make findings about the effect of these alternative arrangements, without knowing the terms (including commercial terms) on which that gas would be supplied. More relevantly, the evidence did not enable a finding about whether arrangements for alternative supply are dependent on, or materially affected by, the outcome of PWC's claim for declaratory relief.

The Eni witness

Eni read the affidavit of Ernest Delfos, its Managing Director of Exploration and Production Activity.
Mr Delfos stated Eni's position that the current curtailment is the result of a Force Majeure that excuses non-performance of certain of its obligations under the agreement.[46]
[46] Affidavit of Ernest Frank Oliver Delfos, sworn 27 September 2022, [10].
Mr Delfos set out the steps by which Eni provides ongoing updates to PWC, with daily updates of anticipated targets for that day, regular Technical Committee meetings, and, since February 2022, weekly technical meetings with PWC and the Northern Territory government. At those meetings, Eni presents information regarding the Curtailment, including plans and progress in seeking to mitigate it, and 'production forecasts and daily production data and detailed supporting information'.[47] The information is then summarised in documents entitled 'Blacktip Weekly Production Update'[48]
[47] Affidavit of Ernest Frank Oliver Delfos, sworn 27 September 2022, [31].
[48] Affidavit of Ernest Frank Oliver Delfos, sworn 27 September 2022, [32] ED 7.
Mr Delfos deposed to his belief, from what he has been told by those attending the weekly meetings, that PWC has said it has alternative gas supplies until at least November and the ability to source additional gas after 1 November 2022. I have already commented on the difficulty of making findings on this matter.

The evidence regarding arbitration

Each party adduced evidence, through affidavits of its solicitors, addressing the anticipated time to complete an arbitration process compared to seeking declaratory relief in the court.
PWC relied on the evidence of Dean Grondal. He estimated that, if the arbitration were to proceed under the ACICA Expedited Arbitration Rules, the procedure to final award would take approximately 6 months from commencement of the arbitration. If not conducted under the Expedited Arbitration Rules, the arbitration may take at least 10 to 12 months, assuming no interruptions or delays.[49]
[49] Affidavit of Dean Edward Grondal, sworn 22 September 2022, [15] - [19].
Mr Grondal also deposed, from his information and belief, that following Eni's letter of 29 June 2022, PWC was 'reporting to its Board of Directors and seeking approval to commence proceedings'.[50] He does not specify what proceedings were considered.
[50] Affidavit of Dean Edward Grondal, sworn 22 September 2022, [28(c)].
In his second affidavit of 29 September 2022, Mr Jenaway also addressed the possible times for completion of arbitration, particularly if conducted pursuant to the Expedited Arbitration Rules. Mr Jenaway estimated that an arbitration on that basis, and assuming no counterclaim, could be completed withing 4 months and 14 days.[51] He does not allow for the other procedures required by sch 4 before commencement of arbitration, including senior executive negotiations.
[51] Second affidavit of David Ashley Jenaway, sworn 27 September 2022, [5] - [6].
Mr Jenaway also estimated the time for completion of an arbitration, not under the expedited rules, at approximately 10 and a half months.[52]

The time for court proceedings

[52] Second affidavit of David Ashley Jenaway, sworn 27 September 2022, [10].

The time for completion of court proceedings depends on the extent to which interlocutory processes are required. By O 1 r 4A of the Rules of the Supreme Court 1971 (WA):
The practice, procedure and interlocutory processes of the Court shall have as their goal the elimination of any lapse of time from the date of initiation of proceedings to their final determination beyond that reasonably required for interlocutory activities essential to the fair and just determination of the issues bona fide in contention between the parties and the preparation of the case for trial.
The issue joined between the parties in their correspondence is whether PWC has sufficiently specified and confined the categories of records it seeks to inspect. At the heart of the dispute, as I understood the submissions of counsel for PWC, is the reliance by Eni on the same matters in its Notice of Curtailment and its Force Majeure Notice, and its reliance on the information presented in the meeting of 14 December 2021 in providing information about the Curtailment.
Eni responded to the second request for inspection by asserting that the 11 categories of documents that PWC sought related to the presentation at the technical meeting on 14 December 2021 and the Force Majeure Notice, and were not within the scope of the 'terms and purpose' of cl 15.5. PWC would argue for a construction of cl 15.5 that would include those records, so that, on reasonable notice from PWC, Eni is in breach by failing to allow the inspection requested.
PWC submitted that the court proceedings require no discovery, and no evidence outside what was before me on the stay application. The hearing would not be longer than a day, and the interlocutory processes could be confined to the filing of a defence to complete pleadings, and the filing of submissions.
On that basis, subject to the availability of the court and the parties, the matter could be heard within a month.
If, however, the matter is not so stark, and there is a question of what records Eni holds and that PWC is entitled to inspect under cl 15.5, the action may take longer to resolve.
The difficulty in reliably estimating the time necessary to complete court proceedings is obscured by the relief PWC seeks. PWC does not plead what records it is entitled to inspect, other than by reference to the text of cl 15.5. It descends to any level of detail only in the particulars to Statement of Claim [11], where it pleads the basis Eni gave, in its letter of 29 June 2022, for denying PWC's request. It is not apparent on the fact of the Statement of Claim whether all of Eni's objections are in issue.
If the court is required to find facts to determine the issues involved in the dispute, it must make findings about the records which Eni holds and which records it is obliged to make available for inspection. PWC may not know, or be in a position to plead or prove with any precision, what records Eni has. Eni may, properly, seek further particularisation of PWC's case. There are processes available through the court to overcome the imbalance in information between the parties: either by discovery, or by expert evidence about what records Eni would be expected to have. PWC relied on the latter process in attaching advice it has received from RISC Advisory Pty Ltd to the affidavit of Mr Grondal.[53] Once the parties go down either of those paths, however, the time required for resolution of the action becomes both uncertain and extended.
[53] Affidavit of Dean Edward Grondal, sworn 22 September 2022, DEG 9.
Eni referred also to the additional time that may arise from the appeal process available in court proceedings.

The issues

The prayer for orders to give effect to the declaration

Paragraph (b) of the prayer for relief in the Statement of Claim is not confined to a declaration of breach but also seeks orders 'giving effect to' the declaration.
Eni submitted that the orders in paragraph (b) cannot be properly characterised as either interlocutory or declaratory relief and do not fall within the exception in item 5.
PWC's position is that it expects the court's declaration to resolve the underlying controversy. It submitted that Eni's objection to the relief sought goes beyond the applicability of item 5, and descends into the dispute. That, PWC submitted, is 'for the next round'.
The objection taken by Eni cannot, however, be put aside in that way. The 'next round' - if there is to be one - must be in arbitration unless it can be properly characterised as seeking urgent interlocutory or declaration relief.
It may be that the objection could be overcome by proceeding only for declaratory relief. The perceived need for further relief to give effect to any declaration, however, highlights the limitation of a declaration in the terms sought and, in my opinion, is relevant to the next issue - whether declaratory relief in that form is urgent.

Urgency

There is no doubt PWC has a contractual right to inspect records within the scope of cl 15.5. And the parties' different views about the meaning and scope of cl 15.5 is a serious issue to be determined.
PWC contends the resolution of the dispute is urgently needed to facilitate the inspection of records. It submitted that a declaration in the form it seeks would finally determine an aspect of matters in its dispute with Eni. PWC further submitted that the capacity to confirm information provided by Eni is necessary for it to properly discharge its obligations and responsibilities downstream - that is, to the Tier 1, Tier 2 and other customers.
PWC relies also on the urgency of gas supply to the Northern Territory government, referring in particular to the evidence that it supplies all of the fuel for the Northern Territory electricity grid, and the risk of blackouts or other measures if not enough gas is supplied. It referred to Mr Trier's evidence of a real risk of crisis in the electricity market. PWC also referred to the potential consequences of continued failure to supply gas to a major downstream customer, Southern Cross Fertilisers. Those are consequences of the Curtailment. How they would be affected by the relief sought is unclear.
As Eni submitted, the question on this application is not the importance for the Northern Territory to maintain its gas or electricity supply, or the urgency of contingency measures to ensure the lights stay on. Eni does not dispute that the Curtailment requires steps to mitigate the effect of the reduced supply of gas. But the question of urgency must be tied to the relief sought. The declaratory relief, to the extent it may determine the scope of the right of inspection under cl 15.5 and facilitate access to Eni's records, must be objectively urgent so that the claim requires immediate attention by the court.
To the extent that PWC's case for urgency relies upon the demand for gas and electricity over the next few months, the evidence does not show how the resolution of this dispute would materially affect PWC's position. PWC has already taken short term measures to secure gas, although the evidence about what it has done is vague and imprecise. PWC, or the Northern Territory government, may wish to secure alternative sources of gas for the future. But the evidence does not demonstrate how the information obtained from access to Eni's records is immediately needed for the purpose of those arrangements.
It is not sufficient that the court is satisfied there is a real issue to be determined, or that PWC properly wishes to obtain information that will enable it to plan and estimate cost exposures with more certainty. PWC has not shown that the relief it seeks is urgent.
There are other matters which, in my opinion, support that conclusion.
First, there is the delay between relevant events and the bringing of these proceedings.
PWC submitted that it has acted in a timely way. PWC has sought to engage cooperatively with Eni, referring to its correspondence with Eni, the technical committee meeting of 14 December 2021, a meeting with Eni on 1 April 2002, and without prejudice discussions in the period between 27 July 2022 and 26 August 2022. PWC further submitted that there has been a deterioration in its trust in Eni, and the need to confirm the accuracy of information provided by Eni has grown.

The question of urgency must be considered in the factual context that the relevant Notice of Curtailment was issued in April 2021. PWC requested access to records, over six months later, on 12 November 2021. On 24 December 2021, PWC wrote 'to raise serious concerns about the flow of information from Eni to PWC…and to demand that Eni comply with its contractual obligations in that regard',[54] but did not then initiate the dispute resolution procedures.
[54] Affidavit of Antoni Simon Jon Murphy, sworn 16 Sept 2022, AM 14.
In its letter of 18 January 2022, Eni updated the Notice of Curtailment and clearly stated that PWC should formulate a specific request for the categories of records that it wished to inspect, and that it was not obliged to and did not propose to accede to 'a far-ranging enquiry in a manner inconsistent with [cl 15.5]'.[55] The second request to inspect documents was nearly five months later. In its Mitigation Weekly Update of 30 June 2022, Eni forecast no improvement in supply in 2022. PWC did not commence proceedings for nearly two months.
[55] Affidavit of Antoni Simon Jon Murphy, sworn 16 Sept 2022, AM 17.
Second, a bare declaration that Eni has breached cl 15.5, on the facts pleaded, may not resolve the dispute about the extent of records to which PWC is entitled. It is not that the relief sought relates to past breaches. If the failure to provide access is a breach of cl 15.5, the breach is continuing. The problem, as Eni submitted, is that the pleading does not raise any crystallised issue of construction for determination.
I am not, in this application, resolving issues which are the proper subject for any ultimate hearing. But I have doubts about the utility of the declaration in the way it has been pleaded, and how a declaration in those terms requires immediate action. If the action requires a determination of what records come within the scope of cl 15.5, on the facts of this case, I doubt that it can proceed simply on pleadings and without evidence. The time difference from an arbitration under the ACICA Expedited Rules may not be as significant as PWC contends.
Third, I have regard to the relative ability of the court and a single arbitrator[56] to resolve the dispute quickly. I have earlier referred to the difficulty of assessing how the matter would progress. I doubt that the comparison is between a matter of weeks and several months.
[56] See sch 4, item 4.2(d).
Assuming that the matter may be dealt with more swiftly in this court, the evidence does not indicate how the difference (whatever it is) materially affects PWC.
Fourth, an arbitrator would not be confined to making a bare declaration.
The major difficulty facing PWC in this application, however, is evidentiary. PWC must prove that the relief it seeks is urgent. It must show some purpose to be met by dealing with the matter immediately by urgent declaratory relief rather than by proceeding to arbitration. The evidence adduced by PWC is too general to satisfy me that the relief it seeks requires immediate attention.

The opinion required by item 5

I will briefly comment on the second requirement in item 5.
The first question is whether the evidence shows that PWC formed the opinion required by item 5. Eni submitted that there is no evidence that PWC had formed that opinion.
In general, the state of mind of a corporation is the state of mind of the directors and managers who represent its directing mind and will and control what is does. There is no direct evidence that the board of PWC, or any person with the authority of the corporation, had formed the required opinion. There is no evidence of any consideration by, or resolution of, the board of PWC, and no evidence that Mr Murphy or Mr Staples had such authority or functions within PWC that their opinion should be taken to be that of the corporation.
PWC submitted that the court should infer the second limb is satisfied from the evidence of Mr Murphy and Mr Staples, both of whom deposed that they had the authority of PWC to make the affidavit on its behalf, and from the fact of the action being brought. Their evidence is not sufficient. Mr Murphy's evidence was that he is responsible for PWC's gas portfolio strategy, including purchasing gas from suppliers, and that he report directly to the CEO, who reports to the Board.[57] Mr Murphy deposed that PWC had become increasingly concerned about the information provided by Eni, and that his opinion was that PWC 'must take urgent action to resolve the situation to protect PWC's rights'.[58] He gives no evidence of the opinion of the CEO or any expression of opinion by the Board.
[57] Affidavit of Antoni Simon Jon Murphy, sworn 16 Sept 2022, [6] - [7].
[58] Affidavit of Antoni Simon Jon Murphy, sworn 16 Sept 2022, [54].
Mr Staples' evidence did not advance the case.
I may infer from the fact that proceedings were commenced that someone with authority in PWC considered and authorised the bringing of the action. But the opinion required by item 5 is separate and more specific.
The application for a stay should be granted, and the parties referred to arbitration.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
TB
Associate to the Honourable Justice Allanson
10 NOVEMBER 2022