obligation to pay the unliquidated damages is not contained within the contract but is an obligation arising by operation of law as a result of a breach.
As a result, the majority declared that the dispute was not subject to the arbitration agreement contained in Clause 23.6.1.
Interpretation of multi-tiered dispute resolution clauses
Justice Bell, President of the NSW Court of Appeal, disagreed with the decision of the majority in its assessment of whether unliquidated damages for breach of the agreement was a claim “under the Agreement”. Bell P found that the damages claim was a claim “under the Agreement”. Bell P gave extensive consideration to dispute resolution clauses, emphasising the importance of the courts taking a broad and liberal approach to the construction of dispute resolution clauses. His Honour noted, with reference to recent case law, that “in Australia, unlike other jurisdictions, the process of contractual construction of dispute resolution clauses has not been overlaid by presumptions”. In particular, his Honour commented: “where one has relational phrases capable of liberal width, it is a mistake to ascribe to such words a narrow meaning, unless some aspect of the constructional process, such as context, requires it.”
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ReSolution | Dec 2020
End Notes