In China Civil Engineering Construction Corporation South Pacific (Fiji) Ltd v Sinclair Brook Pty Ltd [2025] NSWSC 960, the New South Wales Supreme Court, under section 7(2) of the International Arbitration Act 1974 (Cth) (the Act), recently stayed proceedings brought by a contractor in relation the design and construction of an office tower in Fiji.

Background

Carpenters Properties Pte Limited (the Third Defendant) (Carpenters) and China Civil Engineering Construction Corporation South Pacific (Fiji) Ltd (China Civil) entered into a design and construct contract for a new office tower project in Fiji (the D&C Contract). Carpenters also engaged Sinclair Brook (Fiji) Pte Limited (Sinclair Fiji) as superintendent for the project via a consultants agreement. The First Defendant, Sinclair Brook Pty Ltd (Sinclair Brook) guaranteed the performance of Sinclair Fiji, and the Second Defendant (Tucker), was appointed to carry out the superintendant’s functions.

Fiji was the governing law of the D&C Contract and the parties irrevocably submitted to the jurisdiction of the ‘Courts and Tribunals of Fiji’ (Jurisdiction Clause). The D&C Contract provided that disputes were to be referred to an arbitrator nominated by the President of the Fiji Association of Architects (Arbitration Clause).

Carpenters issued China Civil a notice of default and show cause notice asserting that China Civil had breached the D&C Contract. The parties unsuccessfully attempted to resolve the dispute and Carpenters referred the matter to arbitration. China Civil disputed the referral and Carpenters subsequently terminated the D&C Contract.

China Civil initiated proceedings in the New South Wales Supreme Court against all Defendants alleging, among other things, breach of contract, breach of duty of care and also wrongful termination of the D&C Contract by Carpenters. The Defendants sought an order that the proceedings be stayed either pursuant to section 7(2) of the Act or for forum non conveniens. China Civil opposed the stay on grounds including that:

• the Jurisdiction Clause displaced the operation of the Arbitration Clause, as the only forum for resolving disputes under the D&C Contract were the “Courts and Tribunals of Fiji”; and
• the matter was not capable of settlement by arbitration as the Arbitration Clause only covered disputes between the parties while the D&C Contract remained on foot.

Decision

The Court stayed the proceedings against all Defendants under section 7(2) of the Act. In rejecting China Civil’s submissions, Chief Justice Hammerschlag held that:

• while the parties submitted to the jurisdiction of Fiji, they did not do so for disputes which were to be resolved by arbitration;
• there was no tension between the Jurisdiction Clause and the Arbitration Clause as the Courts and Tribunals of Fiji still retained jurisdiction to do all “things that courts regularly do in connection with arbitrations”;
• by applying the doctrine of separability, the Arbitration Clause was still enforceable after the D&C Contract was terminated and the dispute was capable of settlement by arbitration; and
• Sinclair Brook and Tucker were parties within the meaning of section 7(4) of the Act claiming “through or under” Carpenters, having a direct interest in defending the claim that Carpenters acted unlawfully, and thus entitled to have the benefit of the stay.

Although not strictly necessary to resolve the dispute, the Court noted that it would have nonetheless stayed the proceedings on forum non conveniens grounds.

The decision can be found here.