Elecnor Australia Pty Ltd v Clough Projects Australia Pty Ltd [2025] NSWSC 61

On 12 June, the Supreme Court of New South Wales delivered judgment in the matter of 𝙀𝙡𝙚𝙘𝙣𝙤𝙧 𝘼𝙪𝙨𝙩𝙧𝙖𝙡𝙞𝙖 𝙋𝙩𝙮 𝙇𝙩𝙙 𝙫 𝘾𝙡𝙤𝙪𝙜𝙝 𝙋𝙧𝙤𝙟𝙚𝙘𝙩𝙨 𝘼𝙪𝙨𝙩𝙧𝙖𝙡𝙞𝙖 𝙋𝙩𝙮 𝙇𝙩𝙙 [𝟮𝟬𝟮𝟱] 𝗡𝗦𝗪𝗦𝗖 𝟲𝟭𝟬.

Elecnor and Clough were parties to a joint venture agreement for the construction of an electricity transmission system between New South Wales and South Australia. Under that agreement, a party could acquire the other party’s interest in the joint venture upon a default. The parties also agreed for disputes to be referred to arbitration in Singapore. Clough subsequently went into administration through a Deed of Company Arrangement, with trustees appointed to administer claims against the company.

Elecnor commenced proceedings against Clough and the Trustees seeking specific performance of its contractual right to acquire Clough’s interest in the joint venture and declarations that the Deed of Company Arrangement did not affect those contractual rights. Clough and the Trustees brought a cross-claim, alleging a breach by Elecnor of other contractual provisions concerned with calls on security bonds by the operator of the electricity transmission system. The Supreme Court found that the cross-claim raised a different matter to what was raised on Elecnor’s claim, and that Elecnor did not waive, abandon or repudiate the arbitration agreement by commencing proceedings in court.

This is one of only a few cases around the world considering whether a party who commenced court proceedings is entitled to still rely on an arbitration agreement to stay other claims subsequently made in the court proceedings.

James Hutton SC and Jesse Kennedy appeared for the successful applicant, Elecnor Australia Pty Ltd, instructed by Gilbert + Tobin. Tom O’Brien and Daniel Farinha appeared for Clough Projects Australia (led by Julie Taylor SC of Shoreline Chambers), instructed by Arnold Bloch Leibler.