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Brief Counsel

Lessons for Christmas Eve injunctions

21 December 2012

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​The obligations on a party seeking urgent interim relief in New Zealand in support of foreign arbitrations has been clarified by the High Court in a pre-Christmas injunction proceeding heard this week.1 

Chapman Tripp successfully acted for the respondent opposing the injunction.

The context

Discovery Geo, a United States’ incorporated company, sought urgent interim orders requiring the respondent, a Singapore incorporated company, to request the Minister of Energy to halt consideration of the transfer of a petroleum exploration permit pending a London ICC arbitration commenced by Discovery Geo. 

In its request for arbitration, Discovery Geo claimed an interest in the permit, and damages for its wrongful transfer, in alleged breach of a contract governed by English Law.

As the application was brought urgently, and without service in Singapore, it was treated as a without notice application.2  Counsel for the respondent appeared on a Pickwick basis (that is, to assist the Court but without filing evidence), and subject to a protest for jurisdiction.

The decision 

Despite taking less than 48 hours to produce reasons, Justice Kós delivered a thorough judgment clarifying the obligations on parties seeking without notice interim relief in support of arbitral proceedings. 

The main take-aways are:

  • the Court has authority under the Arbitration Act 1996 (the Act: see Schedule 1, Article 9(2)) to make without notice orders in support of arbitral proceedings.  (This resolves a dispute between the authors of Dicey Morris & Collins, Conflict of Laws3 and Williams & Kawharu on Arbitration4 in favour of the locals)5
  • the Court’s jurisdiction over foreign parties requires valid service in accordance with the High Court Rules,6 and can be exercised only subject to any protest to jurisdiction.   The Court will not (certainly ordinarily) make interim orders prior to resolving a signalled protest to jurisdiction7
  • the purpose of interim relief is to support the arbitral process, and not to grant relief of a kind not contemplated in the arbitral proceedings8  
  • the requirement to file an undertaking as to damages applies equally to an application for interim measures under the Act.  Where the nature of the interim measure sought is effectively to impose a freezing order, the undertaking must offer real protection, and evidence (and if need be, security) must be given of the substance behind it,9 and
  • as might be expected, delay in seeking urgent injunctive relief can be fatal.

All of which is to say that care, as well as speed, is required in seeking urgent injunctive relief, especially against foreign parties.

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Footnotes

  1. Discovery Geo Corporation v STP Energy Pte Limited [2012] NZHC 3549.
  2. Above, at [32].
  3. Dicey Morris & Collins, Conflict of Laws (14ed, 4th Supp., 2011) at [16.085].
  4. Williams & Kawharu on Arbitration (LexisNexis, Wellington, 2011) at [9.5.1].
  5. Discovery Geo Corporation v STP Energy Pte Limited [2012] NZHC 3549, at [37].
  6. Above, at [39].
  7. Above, at [41] – [43].  The Court applied Advanced Cardiovascular Systems Inc v Universal Specialities Ltd [1997] 1 NZLR 186 (CA); Rimini Ltd v Manning Management & Marketing Pty Ltd [2003] 3 NZLR 22 (HC); and Hamilton v Infiniti Capital Andante Ltd HC Auckland CIV 2008-404-2304.  The Court left open the correctness of Dale v Jeffery HC Auckland CIV 2007-404-2015, 24 April 2007.
  8. Above, at [45]
  9. Above, at [53].

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