S Apci 2013 0162 Flint Ink NZ Limited v Huhtamaki Australia Pty Ltd (ACN 003 122 843) Appellant First Respondent and Lion-Dairy & Drinks Pty Ltd (ACN 004 486 631) Second Respondent

Flint Ink NZ Limited appealed against a decision of the Supreme Court of Victoria, which had refused to stay a third party proceeding brought by Lion-Dairy & Drinks Pty Ltd against Huhtamaki Australia Pty Ltd on the basis of an arbitration agreement. The dispute involved a contractual relationship between the parties, where Flint Ink NZ Limited and Huhtamaki Australia Pty Ltd had entered into an arbitration agreement. Lion-Dairy & Drinks Pty Ltd, who were not parties to the arbitration agreement, sought to participate in the third party proceeding, claiming damages for breach of contract. The central legal issues for the court to determine were whether Lion-Dairy & Drinks Pty Ltd was claiming 'through or under' a party to the arbitration agreement and whether the matter was capable of resolution by arbitration.

The court held that the central issue was whether the third party proceeding could be stayed under section 7 of the International Arbitration Act 1974 (Cth), which allows for a stay of legal proceedings where there is an arbitration agreement between the parties. The court examined whether Lion-Dairy & Drinks Pty Ltd could be considered as claiming 'through or under' a party to the arbitration agreement, which would bring them within the scope of the arbitration clause. The court noted that the issue was one of statutory interpretation and the application of the principles set out in Tanning Research Laboratories Inc v O’Brien. The court concluded that the claim made by Lion-Dairy & Drinks Pty Ltd was indeed made through Flint Ink NZ Limited, who was a party to the arbitration agreement. Consequently, the court found that the matter was capable of resolution by arbitration, and the appeal was allowed.

The final orders of the court were that the appeal was allowed, and the proceeding brought by Lion-Dairy & Drinks Pty Ltd against Huhtamaki Australia Pty Ltd was stayed pending the outcome of the arbitration. The court directed the parties to proceed with the arbitration in accordance with the terms of the arbitration agreement. This decision underscores the importance of the proper interpretation of arbitration agreements and the application of statutory provisions to determine the scope of the arbitration clause.