Arbitration Law provides that an arbitration agreement shall exist independently, and that any invalidity of the underlying contract shall not affect the validity of the arbitration agreement. Further, the Interpretation of the Supreme People’s Court specifies at section 10(2) that if parties reach an agreement for arbitration when entering into a contract, the validity of the agreement shall not be impacted even where the underlying contract is not formed. Having regard to email communications between the Seller and Purchaser, the CICC determined that an arbitration agreement had been reached in this case. Accordingly, it was held to be valid despite the fact the underlying contracts had not been signed. These first rulings will interest many who wish to note the approach the CICC takes to its cases.
Council succeeds in referring construction dispute to arbitration In a dispute between The Rintoul Group Ltd (Rintoul) and the Far North District Council (the Council,) the Court has stayed proceedings and referred the dispute to arbitration. The construction project from which the dispute arose included a culvert replacement on West Coast Rd and slip repairs on Awaroa Rd, Broadwood Rd and Mangakahia Rd which the Council had contracted Rintoul to complete. This case commenced when Rintoul filed an application for summary judgment against the Council with respect to retention monies for the construction project in the District Court. The Council, in response, filed an appearance under protest and sought a stay of proceedings and a referral to arbitration. Both parties relied on Zurich Australian Insurance Limited v Cognition Education Limited, a case which also concerned an application for summary judgment and a competing application for a referral to arbitration. In that case, it was found that the Court was required to grant a stay of proceedings where there were competing applications for summary judgment and a referral to arbitration, as per the Arbitration Act 1996. The exception to this rule, according to Article 8(1), Schedule 1 of the Act, is where the Court finds that the arbitration agreement is null and void, inoperative, or incapable of being performed, or that there is not in fact any dispute between the parties with regard to the matters agreed to be referred. Rintoul submitted that there was no dispute and therefore that the application for a stay could not succeed. The Court found, however, that although “there is very little if in fact any dispute about the essential background facts relating to this proceeding…. there is dispute about the applicability of the summary judgment procedure, the Arbitration Act 1996 and the provisions of the Construction Contracts Act 2002.” Accordingly, the Court issued an order staying the plaintiff’s proceedings and referred the dispute to arbitration. The District Court decision has now been upheld on appeal by Rintoul to the High Court.