The Efficacy of Using Independent Experts in Dispute Resolution Clauses – Are they Practical for Complex Disputes?
By Alexander Duffy
ABSTRACT
In the recent decision of Onslow Salt Pty Ltd v Buurabalayji Thalanyji Aboriginal Corporation [2018] FCAFC 118 (‘Onslow v BTAC’) the full bench of the Federal Court dismissed an appeal regarding the Federal Court’s first instance decision refusing to stay proceedings in the matter.1 The primary judge refused to stay proceedings despite the plaintiff not following the requirements of a dispute resolution clause included in a Deed that specified the use of an independent expert to resolve disputes between the parties. Although it is a well-established principle that parties should be held to their agreed dispute resolution procedures, this decision highlights the exceptional circumstances where a court may refuse a stay and depart from the commercial bargain struck between the parties to an agreement.
I Introduction
Expert appraisal and determination is a creature of dispute resolution where the parties to the dispute seek the assistance of a technical expert rather than a judge, legal expert or arbitrator to decide a dispute.2 Similar to other forms of alternate dispute resolution, its use is motivated by overlapping goals and objectives of the parties including the demand for quick, reliable, private and low-cost alternatives to traditional litigation.3
Although the use of independent experts in dispute resolution clause has wide-spread use in contracts and agreements, the appeal decision in Onslow v BTAC raises doubt over the efficacy of such clauses that rely on independent experts in complex and or multi-party disputes. Analysis of the decision in Onslow v BTAC highlights the use of independent experts in dispute resolution clauses may not be considered mandatory where the dispute is complex; the dispute resolution mechanism chosen by the parties is not suited to the subject of the dispute; the dispute involves a third party; or the independent expert’s determination is an opinion only (and not binding upon the parties to the dispute).
II Background to the dispute between Buurabalayji Thalanyji Aboriginal Corporation and Onslow Salt PTY LTD
A Initial Decision
Buurabalayji Thalanyi Aboriginal Corporation (‘BTAC’) is the holder and trustee of native title rights on behalf of the Thalayji people, for an area of land to the south of Onslow in Western Australia (‘WA’).4 In November 1992, the WA Government granted Onslow Salt Pty Ltd (‘Onslow’) a mining lease under the Mining Act 1978