Arbitration The issues for determination by the arbitrator were whether the engineer was entitled to issue the bond certificate, and whether Custom was entitled to make demand on the bond. Having considered the NZS 3910 contract, the arbitrator found that the engineer had erred and was not entitled to issue the certificate for the purposes of the bond. The arbitrator found that Plus had not failed to perform its obligations under the contract, and had in fact validly terminated the contract in February 2015 rendering it impossible for Plus to be in default when the engineer issued his certificate later that month. The arbitrator also found that the engineer was wrong in certifying the claim for damages of $24,948,392.35, as in accordance with the contract, any claim for additional completion costs could only be determined after the works have been completed. Therefore, no amount was properly due under the contract, including the bond certified by the engineer. Custom sought (and was granted) leave to appeal against the arbitral award on five questions of law. High Court The High Court upheld the arbitral award finding in accordance with the arbitrator’s determination on all five points. Two of the pivotal questions considered by the High Court were whether a breach must be repudiatory in nature before disentitling a party from terminating, and whether the arbitrator correctly construed clause 14.3.3 of the contract in reaching his decision. During the arbitration, Custom claimed that Plus’s termination was invalid because its request to the engineer to suspend the contract works was made prematurely (inside the 10-day time limit Custom had for rectification), and was therefore invalid. Further, that the engineer did not suspend the contract works in response to the request; and a valid termination notice could only be given “following such [a] suspension” in accordance with clause 14.3.3. The High Court took a different approach to the arbitrator, focussing on interpreting the contract in the context of the Contractual Remedies Act 1979 (“CRA”), as opposed to interpreting the wording of the contract in isolation. The High Court discussed cases confirming the principle that a party purporting to terminate must be ready and willing to perform the contract in all material respects, to ensure that it cannot benefit from its own wrong in any cancellation. Further, that a party who is in breach of an essential term of a contract, is not entitled to enforce its rights of cancellation.