Paharpur Cooling Towers Ltd v Paramount (WA) Ltd

[2008] WASCA 110

Western Australia Court of Appeal

Built by Barristers,
For Australian Law.

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Interrogate

Catchwords

1. Practice and Procedure
2. › Arbitration
3. › Stay of proceedings
4. › Scope of arbitration agreement
5. › Whether dispute involving party to arbitration agreement and non-party falls within arbitration clause
6. › Whether parties intended fragmentation of dispute across different forums
7. › International Arbitration Act 1974 (Cth), s 7
8. › Commercial Arbitration Act 1985 (WA), s 53(1)
1. Practice and Procedure
2. › Arbitration
3. › Construction of arbitration clauses
4. › Liberal construction
5. › Presumption that rational businessmen intend all disputes to be resolved by same tribunal
6. › Limits of presumption where dispute involves non-parties to arbitration agreement
1. Bills of Exchange
2. › Liability of acceptors
3. › Bill of exchange as separate contract
4. › Whether claim on bill of exchange arising from underlying contract falls within arbitration clause in that contract

Quick Take

Where a claim is made against both a party to an arbitration agreement and a non-party on the same instrument (such as co-acceptors of a bill of exchange), the arbitration clause will generally not be construed as covering the dispute, because the parties would not have intended the fragmentation of the dispute across different forums. The 'one stop adjudication' rationale that ordinarily supports broad construction of arbitration clauses operates in reverse where the dispute necessarily involves a non-party.