Smith Elements & Controls Ltd v EPI Group Ltd
[2018] NZHC 336
•7 March 2018
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2017-419-000364 [2018] NZHC 336
BETWEEN SMITH ELEMENTS & CONTROLS
LIMITED Plaintiff
AND
EPI GROUP LIMITED First Defendant
INTROL PRODUCTS LIMITED Second Defendant
Hearing: 28 February 2018 Appearances:
M J Fisher for Plaintiff
S J Rawcliffe for DefendantsJudgment:
7 March 2018
JUDGMENT OF WYLIE J
This judgment was delivered by Justice Wylie
On 7 March 2018 at 3.00pm
Pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date:…………………………
Solicitors/counsel:
Clancy Fisher Oxner & Bryant, Tokoroa/M J Fisher, Auckland
Harkness Henry, Hamilton
SMITH ELEMENTS & CONTROLS LTD v EPI GROUP LTD [2018] NZHC 336 [7 March 2018]
Introduction
[1] The plaintiff – Smith Elements & Controls Limited (Smith) – applies under arts 9, 17A and 17B of sch 1 to the Arbitration Act 1996 (the Act) for interim orders against the first defendant, EPI Group Limited (EPI).
[2] Smith seeks to restrain EPI:
(a) from approaching any of its customers or competitors with a view to supplying them products or goods, as defined in a supply agreement entered into between the parties in September 2016 (the supply agreement), and
(b)from instructing, encouraging or permitting any other person or affiliate, including the second defendant – Introl Products Limited (Introl) – from approaching any of its customers or competitors with a view to supplying them products or goods, as defined in the supply agreement,
until 31 May 2018 (when the supply agreement comes to an end).
[3] EPI opposes the application.
[4] The orders sought are interim orders. The parties are, belatedly, in the process of appointing an arbitrator, in accordance with the terms of the supply agreement. Both agree that the central question for determination at the arbitral hearing will be whether, on its proper construction, the supply agreement restricts EPI from approaching Smith’s customers and competitors prior to 31 May 2018, or whether the supply agreement allows EPI to approach and conclude agreements with Smith’s customers and competitors before 31 May 2018, and only restricts EPI from delivering products and goods to Smith’s customers and competitors before 31 May 2018.
Relevant facts
[5] EPI is an importer of elements and controls used in electrical appliances such as ovens, refrigerators and water heating systems. The elements and controls are manufactured in China and they are brought into New Zealand by EPI.
[6] EPI supplies Smith and Smith, in turn, is a supplier/wholesaler of elements and controls, branded with its own name, to other wholesalers and service repairers. Smith has a significant share – estimated at 65 per cent – of the relevant wholesale market. It claims to be the largest national stockist of aftermarket spare parts for electrical appliances.
The trading relationship
[7] Smith and EPI have been associated in business for a number of years. Their first business dealings commenced in about 2002. In 2006, they entered into a supply agreement. Under that agreement, EPI agreed to “solely sell product covered by [the] agreement to Smith”. That agreement was for a term of 12 months. In 2009, EPI and Smith entered into a further supply agreement. This agreement came into effect in January 2009 and continued for a period of 24 months until 31 December 2010. Inter alia, EPI agreed not to sell or arrange the sale of the products covered by the agreement to any third party. After 31 December 2010, the parties continued to trade. The 2009 agreement provided that if they did so, the terms and conditions contained in that agreement would continue to apply.
[8] Notwithstanding the terms of the 2009 agreement, it seems that EPI was also supplying products to other parties and in May/June 2016, Smith sought to formalise a new supply agreement, because it was concerned about these supplies. EPI, for its part, was not prepared to give up the arrangements it had entered into to supply third parties and the proposed new supply agreement, which was initially drafted by Smith, was subject to significant amendment in the course of negotiations.
[9] The final agreement was signed by the parties on various dates in September
2016. The supply agreement recorded that it had commenced on 1 June 2016. As noted, t is due to expire on 31 May 2018.
[10] The supply agreement contains, inter alia, the following terms:
(a) EPI agrees to supply Smith with goods from its warehouses in New Zealand, and with goods it has had manufactured for Smith for distribution by Smith in New Zealand;
(b) The word “goods” is defined as follows:
‘Goods’ means either in store goods or manufactured goods supplied by [EPI] to [Smith] and includes goods described on any invoices, quotation or order forms as provided by [EPI] to [Smith].
(c) Smith agrees to use its best endeavours “to develop as large as possible market for the goods”, and to “continuously offer, advertise, demonstrate and otherwise promote the sale of the goods in New Zealand”.
(d) Clause 5 provides as follows:
5.0 NON COMPETE & PRODUCT DISTRIBUTION
5.1[Smith] will have the first opportunity to distribute goods produced by [EPI] to [Smith’s] New Zealand customers and potential customers. If a customer not listed [in] schedule 1 or potential customer of [Smith] approaches [EPI] directly they will be referred back to [Smith]. If the customer does not wish to deal with [Smith] then before [EPI] is allowed to supply the customer directly [EPI] must do the following:
5.1.1Meet with [Smith] to see if there is an opportunity for [Smith/EPI] or an affiliate to do a joint venture to obtain the customer; however
5.1.2If it is agreed this is not workable [EPI] or an affiliate will be allowed to deal with the customer directly with the written approval of [Smith].
5.2At the date of signing this Agreement it is agreed that in principle [EPI] will not compete directly with [Smith] in New Zealand by supplying [Smith] customers or competitors with [EPI] products, however, recognising there are supplier agreements already in place between [EPI] and the following companies that have been disclosed and agreed to by [Smith] as detailed in Schedule 1.
5.3[EPI] undertake that they will use commercially reasonable endeavours to prevent Australian distributors of [EPI] products from selling directly into the New Zealand market.
(e) Clause 9 provides as follows:
9.0 DISPUTE RESOLUTION
In the event of a dispute arising between [EPI] and [Smith] concerning a difference of opinion, interpretation, implementation or operation of this agreement then the following disputes processes shall be used:
9.1In the first instance both [EPI] and [Smith] managements will present to each other their respective views on the matter in dispute and their suggested basis of resolution. Both parties will negotiate in good faith to resolve the dispute.
9.2 If the parties are unable to resolve the dispute under
9.1 then the matter will be referred to mediation ...
9.3If the dispute is not resolved by mediation in accordance with the above provisions, the dispute will be referred to and finally resolved by arbitration
…
(f) Schedule 1 to the supply agreement sets out a list of the supplier relationships which EPI had in place as at 1 June 2016, and which are preserved by cl 5.1 noted above.
A dispute arises
[11] On or about 1 December 2017, one of Smith’s customers – Rexel New Zealand Limited, trading as Ideal Electrical Supplies (Ideal) – informed Smith that an agent of EPI, a Mr Hardy, had sent an email offering to supply products to it. Shortly thereafter, Mr Hardy approached Ideal again, this time with a view to visiting it to discuss the proposed supply of goods.
[12] By letter dated 5 December 2017, Smith informed EPI that it considered EPI might be in breach of the supply agreement. It advised that unless matters could be resolved, it would make application to this Court for urgent injunctive relief.
[13] EPI’s lawyers responded on 7 December 2017. They asserted that there was no basis in the supply agreement on which Smith could obtain urgent relief. They referred to cl 9 of the supply agreement and asserted that the process there set out had to be followed. They further asserted that none of the products Mr Hardy had offered to supply to Ideal were EPI products and that all the products would be supplied by Introl, which was not a party to the supply agreement. They also noted that EPI had
made it clear that supply could not commence until after 31 May 2018, given the terms of the supply agreement with EPI. The letter stated as follows:
EPI confirms it is aware of its obligations under the supply agreement and has no intention of breaching them. Up until 31 May 2018 your client will have the first opportunity to distribute goods produced by our client to your client’s customers and potential customers, subject to clause 5.1 of the supply agreement. EPI further confirms that up until 31 May 2018, it will not supply your client’s customers or competitors with EPI’s product.
[14] Smith did not accept EPI’s view of matters and two of its directors met with two of EPI’s directors in an attempt to resolve the dispute, as required by cl 9.1 of the supply agreement. They failed to reach agreement.
[15] Neither Smith nor EPI took any further steps under cl 9 of the supply agreement. Rather, Smith filed an application for an interim injunction in this Court on 15 December 2015. The application was accompanied by an affidavit from one of Smith’s directors – Andrew Tremewan. EPI and Introl responded by filing a protest to jurisdiction. An affidavit in support was filed by one of its directors – Andrew Neal. An affidavit in reply was then filed by Mr Tremewan.
The “interim/interim” measures
[16] The matter came before Whata J on 12 February 2018. The Judge recorded the applications filed and then noted as follows:1
[3] It transpires the parties agree there is no basis for protest as to jurisdiction provided the proceedings are limited to an application for an interim measure pursuant to art 9 of the Act. The focus therefore of this judgment is whether there should be what the parties have termed “interim/interim orders”. EPI is not yet in a position to defend an application for interim orders as they have not filed evidence.
[17] Whata J referred to both sch 1 of the Act and cl 5 of the supply agreement. He then observed as follows:
[10] In the present case, it is arguable that cl 5 of the agreement confers, in context, on the plaintiff an exclusive customer relationship in relation to the supply of the defendants’ products for the period up to 18 May 2018. I am advised from the bar the supply deal was brokered to provide EPI access to [Smith’s] supply chain in the period stated; access that it otherwise would not have had. Clause 5 was therefore designed to enable this to occur while
1 Smith Elements & Controls Ltd v EPI Group Ltd [2018] NZHC 99.
protecting [Smith’s] exclusive customer relationship. There is also evidence before me that EPI has been engaging with at least some of [Smith’s] clients to establish supply relationships, although for the period after the agreement has expired. I am prepared to find therefore, albeit in the absence of any evidence from the defendants, that there is a prima facie basis for the plaintiff’s claim.
[11] In terms of the respective impacts on the parties, interim relief preventing EPI from engaging with [Smith’s] customers may afford [Smith] an unfair advantage in terms of post-May 2018 contracts of supply. If ultimately it transpires that [Smith’s] argument is wrong, EPI could be irreparably harmed insofar as the contracts with those customers are secured by [Smith] in the interim.
[12] Further exploration of this issue with EPI, however, revealed that there is only one tender process of primary concern to EPI, namely, with [Ideal]. Mr Fisher, for [Smith], adopted a practical approach and conceded, quite properly in my view, that that tender process should be excluded from the ambit of any interim/interim measure. Furthermore, given that [Smith] could be unfairly advantaged by a one-sided interim measure, Mr Fisher accepted, again quite sensibly in my view, that any such interim/interim measure should apply to both parties, pending an opportunity to be heard on the substantive application for interim measure.
[13] On that basis, I indicated to the parties that I would grant an interim/interim order and invited the parties to settle on the terms of that order and the parties appeared happy to proceed on this basis, provided an urgent fixture could be found …
…
[15] Accordingly, there shall be an order, pending further order of the Court or 31 May 2018 (whichever event occurs first), restraining both the plaintiff and the first defendant (by their directors, agents and employees) from approaching any customers or competitors of the plaintiff with a view to [supplying] them products or goods, as defined in the supply agreement, subject to:
(a) The exception set out in cl 5.2 of the supply agreement;
(b) The agreed right of the plaintiff and the first defendant to approach [Ideal] in connection with the supply of goods/products after 31 May 2018; and
(c) The plaintiff is entitled to supply the products/goods to its customers under existing supply arrangements and meet orders but it is not permitted to seek new or extended supply arrangements for supply after 31 May 2018.
[18] I am told from the bar that Smith accepted that those parts of its statement of claim which went beyond the interim measures sought should be stayed pending an
arbitral hearing. This is not recorded by Whata J but it was accepted by Mr Fisher, appearing for Smith.
[19] Whata J also made procedural directions,2 so that the matter could proceed to hearing as a back-up fixture on 20 February 2018. An amended notice of interlocutory application was filed by Smith on 14 February 2018. The notice amended the terms of the interim orders sought to those set out above at [2]. An amended notice of opposition was filed by EPI – but not by Introl. It was accompanied by an affidavit from Mr Neal. Smith then filed four further affidavits, one from another of its directors, Amie Amosa, another from another director, Barbara Tremewan, confirming Ms Amosa’s affidavit, a fourth affidavit from Mr Tremewan and an affidavit from Campbell Smith, a technician, also confirming Ms Amosa’s affidavit.
[20] Unfortunately, Ms Amosa’s affidavit was not limited to matters in reply. EPI sought an adjournment of the 20 February 2018 hearing to enable it to properly prepare. An adjournment was granted until 28 February 2018 by Hinton J. The matter came before me on that date.
The parties’ respective positions – the proposed arbitration
[21] Smith submits that the interim/interim measures put in place by Whata J are too narrow. It seeks to preclude EPI from approaching any of its customers or competitors with a view to supplying them with products or goods. EPI, for its part, believes the interim/interim measures are too stringent and that it is entitled to approach any customers or competitors of Smith, as long as it does not supply them until after 31 May 2018.
[22] Both parties submitted that it was open to me to deal with the matter and both accepted that the Court has jurisdiction under arts 9 and 17 of sch 1 to the Act to put in place interim measures.
[23] EPI alerted Smith as at 7 December 2017 that, in its view, Smith should proceed under cl 9 of the supply agreement. EPI accepts that there was a meeting
between the directors of the parties and that that meeting did not progress matters. It
2 At [16].
also accepts that there was no mediation between the parties, as required by cl 9.2 of the supply agreement. It says that Smith delayed until 12 February 2018 in seeking the appointment of an arbitrator.
[24] Smith, for its part, accepts that there was a meeting but no mediation. It also accepts that it did not seek the appointment of an arbitrator until 12 February 2018. It says that it was open to EPI to take steps to appoint an arbitrator and that there was no response by EPI to its letter of 12 February 2018 until immediately before the hearing before me.
[25] As matters stood as at the date of the hearing, no arbitrator had been appointed. I observe that this should not have been a complicated exercise. The dispute resolution provision contained in the supply agreement – cl 9 – requires the appointment of only one arbitrator, to be agreed upon by the parties. It further provides that if the parties cannot agree on the identity of the arbitrator within 10 business days from the date upon which the dispute is referred to arbitration, the arbitrator is to be appointed by the president of the Arbitrators’ and Mediators’ Institute of New Zealand.
[26] It was open to either or both parties to attend mediation and to implement the provisions in the supply agreement requiring the appointment of an arbitrator. Neither has done so.
Jurisdiction to grant interim measures
[27] Pursuant to s 6(1)(a) of the Act, the provisions of sch 1 apply to the prospective arbitration between the parties.
[28] The Court’s power to grant an interim measure under the Act derives from art
9(1) in sch 1 to the Act. It provides as follows:
(1) It is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure and for a court to grant such measure.
As can be seen, a party to an arbitration does not forgo his, her or its rights to arbitration simply because it requests or obtains from the Court an interim measure by way of protection. The Court is not precluded from granting an interim measure by the existence of an arbitration agreement.
[29] The purpose of an interim measure is to maintain or restore a state of affairs pending the determination of the dispute. It is a holding or temporary order.3 The words “interim measure” are defined in the Act as follows:
interim measure means a temporary measure (whether or not in the form of an award) by which a party is required, at any time before an award is made in relation to a dispute, to do all or any of the following:
(a) maintain or restore the status quo pending the determination of the dispute:
(b) take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral proceedings:
(c) provide a means of preserving assets out of which a subsequent award may be satisfied:
(d) preserve evidence that may be relevant and material to the resolution of the dispute:
(e) give security for costs
[30] The reference to the status quo in para (a) of the definition is relevant in this case.
[31] Notwithstanding art 9, the Court will be loath to grant an interim measure unless it is either impossible or impracticable for the arbitral tribunal to deal with the matter. The purpose of Court imposed interim measures is to compliment and facilitate arbitrations, and not to encroach on the powers of arbitrators or act as a substitute for them.4 The Court and the arbitral tribunal are not “jurisdictional competitors”.5
[32] Commentators have suggested that the Courts should defer to the arbitral tribunal unless there are compelling reasons for it to grant the interim measures sought.6 It may, for example, be appropriate for a Court to grant interim measures
where the tribunal has not been formed, where the interim measures are sought against
3 Safe Kids in Daily Supervision Ltd v McNeill [2012] 1 NZLR 714 (HC) at [26]-[27].
4 Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] AC 334, [1993] 1 All ER
664 (HL) at 688; Sensation Yachts Ltd v Darby Maritime Ltd HC Auckland CIV-2005-404-1908,
16 May 2005 at [22].5 David Williams and Amokura Kawharu Williams & Kawharu on Arbitration (2nd ed, LexisNexis, Wellington, 2017) at [9.4.3].
6 Williams and Kawharu, above n 5, at [9.4.3].
a non-party (an arbitral tribunal has no power to make interim orders against a non- party), where it is sought to enforce interim measures outside the jurisdiction, or where the place of arbitration is in a foreign jurisdiction.7 It is only if the situation demands that the Court should grant an interim measure of protection, as opposed to an arbitrator.8
[33] The Courts have a discretion whether or not to grant an interim measure and they will generally be reluctant to express views on the merits, or take steps that might be seen as intruding on the arbitrator’s domain.9 Lord Mustill has commented as follows:10
… There is always a tension when the court is asked to order, by way of interim relief in support of an arbitration, a remedy of the same kind as will ultimately be sought from the arbitrators: between, on the one hand, the need for the court to make a tentative assessment of the merits in order to decide whether the plaintiff’s claim is strong enough to merit protection, and on the other the duty of the court to respect the choice of tribunal which both parties have made, and not to take out of the hands of the arbitrators (or other decision makers) a power of decision which the parties have entrusted to them alone. In the present instance I consider that the latter consideration must prevail. The court has stayed the action so that the panel and the arbitrators can decide whether to order a final mandatory injunction. If the court now itself orders an interlocutory mandatory injunction, there will be very little left for the arbitrators to decide.
Should interim measures be granted by the Court in this case?
[34] Article 9(2) of the Act provides as follows:
(2) For the purposes of paragraph (1), the High Court or … has the same powers as an arbitral tribunal to grant an interim measure under article
17A for the purposes of proceedings before that court, and that article
7 Williams and Kawharu, above n 5, at [9.4.4].
8 Laws of New Zealand Arbitration (online ed) at [36].
9 Coastal Tankers Ltd v Port Wellington Ltd HC Wellington CP32/99, 18 February 1999; Marnell
Corrao Associates Inc v Sensation Yachts Ltd (2000) 15 PRNZ 608 (HC). Here, interim measures were granted because, although the arbitral tribunal had been appointed, its ability to provide urgent interim measures was questionable, since the dates on which the tribunal would be able to convene had not been settled, and secondly, the hearing before the Court had occupied two days, and the Court decided not to require the parties to go through the time, expense or re-argue the
application. The Court also took the view that the nature of the application did not have the effect
of usurping the decision-making power of the arbitral tribunal; Mike Pero Real Estate Ltd v Tauranga Realty Ltd [2015] NZHC 1162; Pathak v Tourism Transport Ltd [2002] 3 NZLR 681 (HC) at [40]; Williams and Kawharu, above n 5, at [9.6]; Phillip Green and Barbara Hunt Green
& Hunt on Arbitration Law & Practice (online looseleaf ed, Thomson Reuters, 2017) at
[ARSch1.17A.02].
10 Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd, above n 4, at 690-691.
and article 17B apply accordingly subject to all necessary modifications.
[35] Articles 17A and 17B provide as follows:
17A Power of arbitral tribunal to grant interim measure
Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, grant an interim measure.
17B Conditions for granting interim measure
(1) If an interim measure of a kind described in subparagraph (a), (b), or (c) of the definition of that term in article 17 is requested, the applicant must satisfy the arbitral tribunal that—
(a) harm not adequately reparable by an award of damages is likely to result if the measure is not granted; and
(b) the harm substantially outweighs the harm that is likely to result to the respondent if the measure is granted; and
(c) there is a reasonable possibility that the applicant will succeed on the merits of the claim.
(2) If an interim measure of a kind described in subparagraph (d) of the definition of that term in article 17 is requested, the applicant must satisfy the arbitral tribunal of the matters specified in paragraph (1)(a) to (c), but only to the extent that the arbitral tribunal considers appropriate.
(3) If an interim measure of a kind described in subparagraph (e) of the definition of that term in article 17 is requested, the applicant must satisfy the arbitral tribunal that the applicant will be able to pay the costs of the respondent if the applicant is unsuccessful on the merits of the claim.
(4) A determination by the arbitral tribunal on the matter specified in paragraph (1)(c) does not affect its discretion to make any subsequent determination.
[36] As noted, the application here in question is made under art 9 of sch 1 to the
Act. It falls to be determined by applying the test set out in art 17B.11
11 See Safe Kids in Daily Supervision Ltd v McNeill, above n 3, at [18].
[37] The approach taken by the Court has been to reverse the considerations specified in art 17B(1) and deal first with whether or not there is a reasonable possibility that the applicant will succeed on the merits of the claim.12
[38] Before me, both parties argued for different interpretations of the supply agreement.
(a) EPI submitted that cl 5.2 is restricted to the actual supply of goods as defined in the supply agreement. It argued that a narrow definition should be given to the word “supply” and that because the only conduct restricted by cl 5.2 is supply, discussions about potential supply post expiry of the agreement cannot be in breach of the clause. It argued that this interpretation accords with commercial common-sense. It noted that the supply agreement has a fixed term and that the rights and obligations of the parties cannot extend beyond the term. It says that the parties plainly intended that at the end of the supply agreement, they would be free to compete for business. It submitted that a lead-in time of at least three months is required before a customer can be supplied with goods and that each party will need at least three months prior to the end of the supply agreement to set up new arrangements, so that business can continue as usual once the agreement expires.
(b)Smith submitted that EPI breached cl 5.2 of the supply agreement when it approached Ideal during the term of the agreement. It submitted that on a proper construction of cl 5.2, the restriction on EPI supplying Smith’s customers or competitors with EPI products necessarily includes taking any steps to supply Smith’s customers or competitors. It argued that the meaning it attributes to the word “supply” is consistent with the objective intention of the parties, namely that Smith was to benefit from its connection with its customers and protection from its competitors during the term of the supply agreement. It cited
in support cls 4.3, 5.1 and 5.3. In the alternative, Smith argued that
12 Safe Kids in Daily Supervision Ltd v McNeill, above n 3, at [30]-[31]; Solid Energy New Zealand Ltd v HWE Mining Pty Ltd HC Hamilton CIV-2010-419-904, 5 August 2010 at [33]; Discovery Geo Corp v STP Energy Pte Ltd [2012] NZHC 3549, [2013] 2 NZLR 122 at [54].
there was an implied term of the supply agreement that EPI would not, during the term of the agreement, approach customers or potential customers of, or competitors to, Smith, with a view to supplying them with EPI’s products. It submitted that EPI breached this implied term and a further implied term that Smith and EPI would deal with each other fairly and in good faith.
[39] As can be seen from these competing submissions, were I to accede to the parties’ wishes and deal with the matter, I would be cutting across the jurisdiction of the arbitral tribunal to be appointed by the parties. I have set out in [4] the question which the arbitral tribunal will have to determine. Were I to enter into the enquiry called for by art 17B(1)(c) in particular, I would be trespassing upon the final determination which the arbitral tribunal will be required to make.
[40] I accept that an arbitral tribunal has yet to be appointed. While that could, in some circumstances, justify a Court in granting an interim measure to preserve the status quo, I am not satisfied that it does so in the present case. Both parties have delayed in appointing an arbitral tribunal and neither offers any explanation for that delay. If they had wished to do so, they could have appointed an “emergency arbitrator”13 to deal with the interim measures sought. They have not done so. Rather, each points the finger at the other. I was left with the distinct impression that both parties have been playing a game of brinkmanship and waiting for the other “to blink first”.
[41] Both parties have entered into an agreement which puts in place comprehensive dispute resolution procedures. Neither has waived the requirement to go to arbitration. Both say that they still wish to do so. They have entrusted their dispute to the arbitral tribunal to be appointed, not to this Court.
[42] In my judgment, in the circumstances of this case, I should refrain from making any further interim orders.
13 See the definition of arbitral tribunal in s 2(1) of the Arbitration Act 1996, discussed in Williams and Kawharu, above n 5, at [9.10].
[43] The interim/interim measures granted by Whata J were drafted by the parties and imposed by consent. As Whata J noted, they protect the position of both parties – albeit only to a limited extent – pending expiry of the supply agreement or order of the arbitral tribunal. In my judgment, those interim/interim measures should remain in place. Once an arbitral tribunal is appointed, it will be open to the parties to seek new interim measures from the arbitral tribunal and/or to advance their dispute and obtain a decision from that arbitral tribunal.
[44] I decline to further intervene by granting substitute interim measures.
Costs
[45] It is my preliminary view that costs should lie where they fall. If either party dissents, then I direct as follows:
(a) EPI is to file a memorandum as to costs within five working days of the date of this judgment;
(b)Smith is to file a memorandum as to costs within a further five working days;
(c) EPI is to file a memorandum in reply within a further period of five working days; and
(d) memoranda are not to exceed five pages.
I will then deal with the issue of costs on the papers – unless I require the assistance of counsel.
Wylie J
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