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High Court refuses to revisit arbitral decision made by former High Court judge

21 Apr 2023

| Author: Fiona Wu

Arbitration Act 1996 – application for leave to appeal to High Court against decision of Arbitral Tribunal – contractual interpretation – question of law – no issue of general precedential value – jurisdiction exists for appeal – principles in Gold and Resource Developments (NZ) Ltd adopted – proposed appeal has little prospect of success – considerable time passed – application dismissed – costs.

QST Ltd v Mobil Oil NZ Ltd [2023] NZHC 518 per Downs J

QST Ltd and Mobil Oil NZ Ltd are parties to a sublease under which Mobil is obliged to pay rent to QST.  There was a dispute as to the rent payable by Mobil to QST following a rent review from 3 April 2021.  QST contends that clause 3.3 of the sublease is applicable, whereas Mobil contends clause 3.2 is applicable.  Essentially, the dispute is the date on which the rent review mechanism takes effect.

The parties submitted their dispute to arbitration and agreed that Rodney Hansen KC, a former High Court judge, be appointed to the Arbitral Tribunal. He concluded that clause 3.2 was an application. QST sought permission to appeal to the High Court.

There was no dispute that a question of law arises in this case, which confers jurisdiction on the High Court to hear the appeal. Considerations relevant when deciding whether to grant permission include: strength of the challenge, nature of the point of law, how the question arose before the arbitrator, qualifications of the arbitrator, importance of dispute to the parties and amount of money involved, delay, and whether the contract provides for the arbitral award to be final and binding.

Two considerations favour an appeal: importance of the dispute to the parties and amount of money involved. However, with the exception of one neutral consideration, all remaining considerations tell against an appeal, including the most important: strength of QST’s challenge.

Applicable principles – Jurisdictional threshold for appeal of arbitral award – factors in Gold and Resource Developments (NZ) Ltd applied – most important consideration is the strength of the challenge.

Held:  Permission to appeal declined. A question of law exists and High Court can hear the appeal. Dispute is important to the parties and there is large amount of money involved. Other factors weigh against consideration, including limited strength of the challenge, lack of general precedential value, and delay in the matter going to the court.

qst_ltd_v_mobil_oil_nz_ltd

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