Mainland Holdings Limited trading as Huon Electrical Ltd v RD Tuna Cannery Limited

• Jurisdiction: Papua New Guinea
• Judge: Sakora J
• Judgment Date: 17 November 2000
• Court: National Court
• Citation: [2000] PNGLR 213
• Year: 2000
• Judgement Number: N2005

Full Title: Mainland Holdings Limited trading as Huon Electrical Ltd v RD Tuna Cannery Limited

National Court: Sakora J

Judgment Delivered: 17 November 2000

N2005

PAPUA NEW GUINEA

[In the National Court of Justice]

WS 927 of 1998

BETWEEN:

MAINLAND HOLDINGS LIMITED t/as

HUON ELECTRICAL LTD

Plaintiff

AND:

RD TUNA CANNERY LIMITED

Defendant

LAE: Sakora, J

1999: 14 April

2000: 17 November

Mr Poka for the Plaintiff.

Mr Ousi for the Defendant.

17 November 2000

SAKORA J: I have two applications before me. The first was filed on behalf of the plaintiff company, by Notice of Motion dated 8 March 1999, seeking the principal relief of:

"An order severing and deleting clause 47 and the related details in part "A" annexure from the contract entered between the Plaintiff and Defendant on 30 May 1996 in respect to the Plaintiff's provision of electrical services for the Defendant's cannery project at Madang."

The second application is that of the defendant company, filed 7 April 1999 by Notice of Motion dated of even date, seeking the following several orders:

1, That the proceedings be stayed.

2. That in the event that the proceedings are stayed:

(a) the matter be referred to arbitration for determination pursuant to clause 47.3 of the contract between the Plaintiff and the Defendant dated 30 May 1996, the matter to be determined by a sole arbitrator;

(b) the parties to jointly refer the matter to the Chairman, Papua New Guinea Commercial Disputes Inc. for the appointment of an arbitrator;

(c) each party to be required to deposit one half of the arbitrator's estimated fees in their respective lawyer's trust account to be applied only in terms of arbitrator's fees and not otherwise;

(d) the arbitrator appointed pursuant to these orders shall have the power to determine the procedure to be adopted.

3. The Plaintiff to pay the Defendant's costs of this notice of motion.

4. Such further or other orders that the Court deems fit.

5. That the time for entry of these order (sic) be abridged to the date of settlement which shall take place forthwith.

Each applicant relied upon the affidavit sworn and filed in support of each, these being, firstly, that of Harry Robertson sworn 8 and filed 18 March 1999 in support of the plaintiff, and that sworn by Philip Ross Payne 1st April 1999 and filed 8 April in support of the defendant.

The factual circumstances surrounding the bringing of these applications are deposed to in the affidavit of Harry Robertson, the General Manager of the plaintiff company.

A commercial dispute had arisen between the parties who had entered into a contract on or about 30 May 1996, whereby the plaintiff as the "contractor" agreed with the defendant the "principal" to provide electrical installation and service to its cannery project in Madang. This contract is annexed to the affidavit of Harry Robertson (supra) and marked with the letter "A".

The contract contains an arbitration clause, a term of the contract, whereby the parties agreed to refer their disputes to the determination of an independent arbitrator. Now, a dispute has arisen and the plaintiff wishes the Court to sever and delete the clause to enable it to proceed with the legal proceedings it has already initiated by the filing of a Writ of Summons against the defendant on 28 September 1998. Its argument is that a person nominated by the parties to arbitrate their disputes having declined to act, there cannot be any arbitration as intended. Thus the parties must go to the normal civil litigation in the Courts.

This argument of the plaintiff comes from the assertion of Harry Robertson in his affidavit (supra) that, as General Manager, when "he endorsed" the contract on behalf of the plaintiff company, signing at the bottom of each page of the contract, his clear understanding was that:

The Governor of Madang Province, more specifically Mr Peter Barter, would act as an arbitrator if such a need arose. I believed that situation was clearly clarified by the referred point 3 in annexure B which was a final addition to the Contract.

The contract itself contains annexures that provide further terms and conditions. At the top of the annexure designated Part A, the following statement appears:

This...