5/14/2021 Supreme Court confirms arbitration clause encompasses claims for equitable relief and statutory unconscionable conduct

e conduct - Lexology

Supreme Court con rms arbitration clause encompasses claims for

equitable relief and statutory unconscionable conduct
Australia May 13 2021
A recent decision of the Queensland Supreme Court has taken an expansive approach to the scope of an
arbitration clause in the context of a subcontract for road construction. In Cheshire Contractors Pty Ltd v Civil
Mining & Construction Pty Ltd [2021] QSC 75, Civil Mining & Construction Pty Ltd (CMC) successfully
applied to stay proceedings and refer a dispute to arbitration pursuant to 8(1) Commercial Arbitration Act 2013
(Qld).
Justice Henry considered that the arbitration clause in question (which was relevantly expressed to apply to
"disputes or differences arising between the Parties") merited a liberal construction. In this case, his Honour
found that the scope of the arbitration clause encompassed Cheshire's claims for relief based on estoppel by
convention or statutory unconscionable conduct under the Australian Consumer Law.
Justice Henry interpreted the scope of the arbitration clause in the light of three general principles of
interpretation:
consider the contract when construing the arbitration clause; construe commercial contracts to give effect to
their commercial purpose; and avoid construing arbitration clauses narrowly.
He also engaged in an extensive review of cases considering the degree or nature of connection a dispute must
have to a contract to be covered by a broadly worded dispute resolution clause, such as that found in the
contract in this case. Justice Henry also considered but distinguished cases in which the relevant arbitration
clause was limited to disputes arising "under" the applicable agreement. Here, the drafting of the arbitration
clause had no such specificity.
Justice Henry concluded that Cheshire’s claim fell within the ambit of the arbitration clause in the contract. He
found a “sufficiently close connection” (as contemplated by the authorities) between Cheshire’s claims and the
contract. The work performed by Cheshire, to which its claim for additional payment (the genesis of the dispute
between the parties) related, would not have been performed but for the commercial relationship created by the
contract.

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