Clough Projects Australia Pty Ltd v Elecnor Australia Pty Ltd [2026] NSWCA 111

Court of Appeal  Supreme Court New South Wales

Case Name:	Clough Projects Australia Pty Ltd v Elecnor Australia Pty Ltd
Medium Neutral Citation:	[2026] NSWCA 111
Hearing Date(s):	28 November 2025
Date of Orders:	15 June 2026
Decision Date:	15 June 2026
Before:	Bell CJ at [1];  Ward P at [125];  Free JA at [126].
Decision:	1.   Grant leave to appeal other than in respect of ground 5 of the draft Notice of Appeal.  2.   Grant leave to cross-appeal.   3.   Dismiss the appeal.   4.   Dismiss the cross-appeal.   5.   Order the Applicants to pay 90% of the costs of the Respondent on the appeal.
Catchwords:	INTERNATIONAL ARBITRATION — arbitration agreement — stay of proceedings under s 7(2) of International Arbitration Act 1974 (Cth) — whether proceedings involved “matter[s]…capable of settlement by arbitration” — meaning of “matter” as distinct from “proceedings” — arbitrability — where bad faith defence was part of the same “matter” as claim — where cross-claim was a distinct matter — where cross-claim involved construction of deed of company arrangement and was not arbitrable     INTERNATIONAL ARBITRATION — arbitration agreement — stay of proceedings — meaning of “through or under” in s 7(4) of the International Arbitration Act 1974 (Cth) — whether third-party defence was brought “through or under” party to arbitration agreement     INTERNATIONAL ARBITRATION — arbitration agreement — stay of proceedings — whether arbitration agreement was “inoperative” under s 7(5) of the International Arbitration Act 1974 (Cth) — whether agreement was waived, abandoned or repudiated by commencement or continuation of curial proceedings      CONTRACT — ready, willing and able — whether disputing of cross-claim meant party was not ready, willing and able to perform contractual obligations —confined to essential obligations
Legislation Cited:	Civil Procedure Act 2005 (NSW) s 67  Corporations Act 2001 (Cth) Pt 5.3A, ss 440D(1), 444D(1), 444G, 447A, 447B, 451E  International Arbitration Act 1974 (Cth) s 7, Sch 2 Art 8
Cases Cited:	A Best Floor Sanding Pty Ltd v Skyer Australia Pty Ltd [1999] VSC 170  ACD Tridon Inc v Tridon Australia Pty Ltd [2002] NSWSC 896  Agricultural and Rural Finance Pty Limited v Gardiner (2008) 238 CLR 570; [2008] HCA 57  Ahad v Uddin [2005] EWCA Civ 883  Airservices Australia v Civil Air Operations Officers’ Association of Australia (2022) 295 FCR 36; [2022] FCAFC 172  Armada Balnaves Pte Ltd v Woodside Energy Julimar Pty Ltd [2022] WASCA 69  Bahr v Nicolay (No 2) (1988) 164 CLR 604; [1988] HCA 16  Bakri Navigation Company Ltd v Owners of the ship ‘Golden Glory’ Glorious Shipping SA (1991) 217 ALR 152  BEA Hotels NV v Bellway LLC [2007] 2 Lloyd’s Rep 493; [2007] EWHC 1363 (Comm)  BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd (2008) 168 FCR 169; [2008] FCA 551  Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49  Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corp Ltd [1981] AC 909; [1979] 3 WLR 471  Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66; (2013) 298 ALR 666  Carmichael Rail Network Pty Ltd v BBC Chartering Carriers GmbH & Co. KG (The BBC Nile) (2022) 295 FCR 81; [2022] FCAFC 171  CLQ v CLR [2022] 3 SLR 145; [2021] SGHC(I) 15  Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45; [2006] FCAFC 192  Commonwealth v Verwayen (1990) 170 CLR 394; [1990] HCA 39  DFD Rhodes Pty Ltd v Hancock Prospecting Pty Ltd (2022) 59 WAR 316; [2022] WASCA 97  Dnata Airport Services Pty Ltd v Polar Air Cargo Worldwide Inc [2026] NSWCA 105  Elders CED Ltd v Dravo Corporation (1984) 59 ALR 206; (1984) 2 BCL 68  Ferris v Plaister (1994) 34 NSWLR; (1994) 11 BCL 417  Flakt Australia Ltd v Wilkins & Davies Construction Co Ltd [1979] 2 NSWLR 243; (1979) 25 ALR 605  Flint Ink NZ Ltd v Huhtamaki Australia Pty Ltd (2014) 44 VR 64; [2014] VSCA 166  Goldus Pty Ltd (Subject to a Deed of Company Arrangement) v Cummins (No 4) [2021] FCA 1095; (2021) 157 ACSR 118  Green v Sommerville (1979) 141 CLR 594; [1979] HCA 60  Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd (2020) 55 WAR 435; [2020] WASCA 77  Hi-Fert Pty Ltd v Kiukiang Maritime Carriers Inc (No 5) (1998) 90 FCR 1; [1998] FCA 1485  House v The King (1936) 55 CLR 499; [1936] HCA 40  In the matter of Infinite Plus Pty Ltd (2017) 95 NSWLR 282; [2017] NSWSC 470  Incitec Ltd v Alkimos Shipping Corporation (2004) 138 FCR 496; [2004] FCA 698  Inghams Enterprises Pty Ltd v Hannigan [2020] NSWCA 82; (2020) 379 ALR 196  John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451  Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; [2007] HCA 61  Kuru v State of New South Wales (2008) 236 CLR 1; [2008] HCA 26  Larkden Pty Ltd v Lloyd Energy Systems Pty Ltd [2011] NSWSC 268; (2011) 279 ALR 772  Marty Ltd v Hualon Corp (Malaysia) Sdn Bhd (rec and mgr apptd) [2018] 2 SLR 1207; [2018] SGCA 63  Mehmet v Benson (1965) 113 CLR 295; [1965] HCA 18  Mighty River International Ltd v Hughes (2018) 265 CLR 480; [2018] HCA 38  MYT Engineering Pty Ltd v Mulcon Pty Ltd (1999) 195 CLR 636; [1999] HCA 24  PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48  Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17; [1985] HCA 14  Rawson v Hobbs (1961) 107 CLR 466; [1961] HCA 72  Recyclers of Australia Pty Ltd v Hettinga Equipment Inc (2000) 100 FCR 420; [2000] FCA 547  Rederi Kommanditselskaabet Merc-Scandia IV v Couniniotis SA [1980] 2 Lloyd’s Rep 183  Reed Constructions Australia Ltd v DM Fabrications Pty Ltd [2007] NSWSC 1190  Rinehart v Hancock Prospecting Pty Ltd (2019) 267 CLR 514; [2019] HCA 13  Rinehart v Welker (2012) 95 NSWLR 221; [2012] NSWCA 95  Sargent v ASL Developments Ltd (1974) 131 CLR 634; [1974] HCA 40  Siemens Ltd v Origin Energy Uranquinty Power Pty Ltd (2011) 80 NSWLR 398; [2011] NSWSC 195  Société Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] AC 871; [1987] 3 WLR 59  Tanning Research Laboratories Inc v O’Brien (1990) 169 CLR 332; [1990] HCA 8  Tesseract International Pty Ltd v Pascale Construction Pty Ltd [2024] HCA 24; (2024) 98 ALJR 880  WDR Delaware Corporation v Hydrox Holdings Pty Ltd (2016) 245 FCR 452; [2016] FCA 1164  Woolworths Group Ltd v Gazcorp Pty Ltd [2022] NSWCA 19  Zhang v Shanghai Wool and Jute Textile Co Ltd [2006] VSCA 133; (2006) 201 FLR 178
Texts Cited:	M Davies et al, Nygh’s Conflict of Laws in Australia (11th ed, 2026, LexisNexis)  M Mustill and S Boyd, The Law and Practice of Commercial Arbitration in England (2nd ed, 1989, Butterworths)
Category:	Principal judgment
Parties:	Clough Projects Australia Pty Ltd  (First Applicant/Cross-Respondent)  Salvatore Algeri (Second Applicant/Second Cross-Respondent)  David Orr (Third Applicant/Third Cross-Respondent)  Elecnor Australia Pty Ltd (Respondent/Cross-Applicant)
Representation:	Counsel:  J Taylor SC, T O’Brien, D Farinha (Applicants/Cross-Respondents)  J Hutton SC, J Kennedy (Respondent/Cross-Applicant)    Solicitors:  Arnold Bloch Leibler (Applicants/Cross-Respondents)  Gilbert + Tobin (Respondent/Cross-Applicant)
File Number(s):	2025/273969
Publication Restriction:	N/A
Decision under appeal:
Court or Tribunal:	Supreme Court of New South Wales
Jurisdiction:	Equity – Commercial List
Citation:	[2025] NSWSC 610
Date of Decision:	12 June 2025
Before:	Stevenson J
File Number(s):	2024/467526

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court’s computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE

[This headnote is not to be read as part of the judgment]

This case involved applications for leave to appeal and cross-appeal from the primary judge’s decision to stay part but not all of a cross-claim brought by Clough Projects Australia Pty Ltd (Clough) against Elecnor Australia Pty Ltd (Elecnor) and to refer that part to arbitration in circumstances where Elecnor’s claim against Clough will be resolved curially. 

Elecnor and Clough were parties to a Joint Venture Deed (the Joint Venture Deed) which established an unincorporated joint venture between them to undertake a large-scale energy infrastructure project for NSW Electricity Operation Pty Ltd (Transgrid). On 2 June 2021, Elecnor and Clough entered an “Engineer, Procure and Construct Contract” with Transgrid to deliver the Project (the EPC Contract). Clause 21.3 of the Joint Venture Deed included a compulsory acquisition process by which a non-defaulting party may elect to treat the Defaulting Party’s failure to remedy a Material Default within the Remedy Period as an invitation to receive an offer to purchase the Defaulting Party’s Participating Interest in the Joint Venture. Clause 22.2 provided for the “effect of [an] insolvency event” and included the entitlement of the “Continuing Parties” to “carry on the business of the Joint Venture with sole full and absolute operational and financial control”. Clause 23.3 was an arbitration clause. 

On 5 December 2022, following an earlier Material Default, Clough’s directors determined that it was insolvent or likely to become insolvent, and resolved to appoint voluntary administrators, which Elecnor subsequently notified Clough was an “Insolvency Event” under the Joint Venture Deed and therefore another “Material Default”. On 3 February 2023, Clough entered into a contract with Holding Construction Australia Pty Ltd (the Purchaser) for the sale of Clough’s business. On 14 February 2023, Transgrid drew down on all bank guarantees and insurance bonds that were issued at Clough’s request (but not those procured by Elecnor) in the amount of some $110 million. On 16 February 2023, the Purchaser, Clough and its related entities entered a Deed of Company Arrangement (the DOCA), pursuant to which all “Trust Assets” were paid into a Creditors’ Trust Account or transferred to the Trustees in exchange for shares in the Clough Entities being transferred to the Purchaser. Elecnor subsequently exercised “step-in” rights under cll 21.3 and 22.2 of the Joint Venture Deed to carry on the joint venture and complete the balance of the works under the EPC Contract. 

In pre-litigation correspondence between the parties, Elecnor notified Clough that it was electing to exercise the compulsory acquisition process in cl 21.3 of the Joint Venture Deed and offered to buy Clough’s Participating Interest for $1.00. Elecnor’s position in response was that the DOCA precluded Elecnor from exercising its rights under the Joint Venture Deed against Clough, and the Trustees alternatively rejected Elecnor’s Offer to Purchase.

On 16 December 2024, Elecnor commenced proceedings against Clough and the Trustees seeking a declaration that the DOCA did not cause Clough’s interest in the joint venture, the Joint Venture Deed, or the EPC Contract to be transferred to the Trustees, and also an order for specific performance of Clough’s obligations in relation to the compulsory acquisition process (the Clause 21.3 Matter). 

Clough and the Trustees filed a Commercial List Response, which included, inter alia, an allegation that Elecnor breached its quasi-fiduciary and good faith obligations created by the Joint Venture Deed in respect of Elecnor’s Offer to Purchase (the Bad Faith Breach Contention). Clough also filed a cross-claim seeking contribution in respect of Transgrid’s 2023 call on bank guarantees and insurance bonds (the Call Contribution Matter).

Elecnor sought a stay of the Call Contribution Matter and the Bad Faith Breach Contention on the basis that they fell within the scope of the arbitration clause in cl 23.3 of the Joint Venture Deed, pursuantto s 7(2) of the International Arbitration Act 1974 (Cth) (the Act), Art 8 of the UNCITRAL Model Law on International Commercial Arbitration (the Model Law), or cl 23.2 of the Joint Venture Deed. By cross-motion, Clough and the Trustees sought orders that, if Elecnor succeeded in obtaining a stay, Elecnor’s claim should be temporarily stayed pending the determination of any arbitration. Further or alternatively, Clough and the Trustees also sought to have Elecnor’s claim permanently stayed and referred to arbitration pursuant to s 7(2) of the Act or Art 8 of the Model Law. 

The primary judge stayed the cross-claim (other than the Bad Faith Breach Contention) but declined to stay any aspect of Elecnor’s claim on either a permanent or temporary basis. 

The Court (Bell CJ, Ward P and Free JA agreeing) held, granting leave to appeal and cross-appeal (except in relation to draft appeal ground 5) but dismissing the appeal and cross-appeal: 

1. Discussion of the principles which have emerged from 50 years of jurisprudence in relation to s 7 of the Act, including regarding the construction of arbitration agreements, the meaning of “matter” in s 7(2) as distinct from “proceedings”, the method of identifying the scope of a particular “matter” and the inevitable potential for proceedings to be fractured, the concept of “arbitrability”, circumstances in which a non-party to an arbitration agreement may bring a claim “through or under” a party under s 7(4), and where an arbitration agreement may become “inoperative” under s 7(5) by election, abandonment, waiver or repudiation: [52]-[70] (Bell CJ); [125] (Ward P); [126] (Free JA). 
2. The primary judge did not err in declining to stay the Bad Faith Breach Contention on the basis that it formed part of the same “matter” as the Clause 21.3 Matter. Both parties waived their right to refer to arbitration the Clause 21.3 Matter (if it was arbitrable) or defences to it which formed part of the same “matter”. The primary judge was correct to hold that the Bad Faith Breach Contention was part of the Clause 21.3 Matter, as it formed a non-colourable part of Clough’s defence: [71]-[78] (Bell CJ); [125] (Ward P); [126] (Free JA). 

Tanning Research Laboratories Inc v O’Brien (1990) 169 CLR 332; [1990] HCA 8, cited.

3. The primary judge did not err in finding that there were two “matters” for the purpose of s 7(2) of the Act, namely the Clause 21.3 Matter and the Call Contribution Matter. The Call Contribution Matter did not represent the “other side” of the Clause 21.3 Matter, but rather was a separate “matter” susceptible of settlement as a discrete controversy. Further, the mere disputing of Clough’s claim for contribution did not mean that Elecnor was not ready, willing and able to discharge its contractual obligations in respect of the Clause 21.3 Matter: [79]-[96] (Bell CJ); [125] (Ward P); [126] (Free JA). 

Tanning Research Laboratories Inc v O’Brien (1990) 169 CLR 332; [1990] HCA 8; Rawson v Hobbs (1961) 107 CLR 466; [1961] HCA 72; Mehmet v Benson (1965) 113 CLR 295; [1965] HCA 18; Bahr v Nicolay (No 2) (1988) 164 CLR 604; [1988] HCA 16, cited. 

DFD Rhodes Pty Ltd v Hancock Prospecting Pty Ltd (2022) 59 WAR 316; [2022] WASCA 97, Incitec Ltd v Alkimos Shipping Corporation (2004) 138 FCR 496; [2004] FCA 698; Société Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] AC 871; [1987] 3 WLR 59; Flint Ink NZ Ltd v Huhtamaki Australia Pty Ltd (2014) 44 VR 64; [2014] VSCA 166, considered.

4. The primary judge did not err by finding that the arbitration agreement was not “inoperative” on the basis of waiver, abandonment, or repudiation. The commencement of proceedings involving a “matter” that is not arbitrable says nothing about a party’s attitude to its right to arbitrate arbitral matters. Even assuming the Clause 23.1 Matter was arbitrable, no waiver arose from Elecnor’s continuation of proceedings, since it sought a stay of the cross-claim raising the Call Contribution Matter shortly after it was filed, conduct which was the antithesis of a “deliberate, intentional and equivocal release or abandonment of the right” to refer the Call Contribution Matter to arbitration. As for repudiation, Elecnor’s commencement of court proceedings did not evince any intention to no longer be bound by the arbitration agreement because, even if the Clause 21.3 Matter was arbitrable, it was not self-evidently so: [97]-[107] (Bell CJ); [125] (Ward P); [126] (Free JA). 

Zhang v Shanghai Wool and Jute Textile Co Ltd [2006] VSCA 133; (2006) 201 FLR 178, cited.

Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17; [1985] HCA 14; Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; [2007] HCA 61, referred to.

5. Although not strictly necessary to decide, the primary judge did not err in finding that the Clause 21.3 Matter was not arbitrable given that the resolution of that matter involved the construction of the DOCA, and the operation of the distinctive deed of company arrangement regime in pt 5.3A of the Corporations Act 2001 (Cth) (the Corporations Act) in a way that may affect third party creditors: [108]-[115] (Bell CJ); [125] (Ward P); [126] (Free JA). 

Kuru v State of New South Wales (2008) 236 CLR 1; [2008] HCA 26; Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49; ACD Tridon Inc v Tridon Australia Pty Ltd [2002] NSWSC 896; Siemens Ltd v Origin Energy Uranquinty Power Pty Ltd (2011) 80 NSWLR 398; [2011] NSWSC 195; MYT Engineering Pty Ltd v Mulcon Pty Ltd (1999) 195 CLR 636; [1999] HCA 24; Goldus Pty Ltd (Subject to a Deed of Company Arrangement) v Cummins (No 4) [2021] FCA 1095; Reed Constructions Australia Ltd v DM Fabrications Pty Ltd [2007] NSWSC 1190; Mighty River International Ltd v Hughes (2018) 265 CLR 480; [2018] HCA 38, WDR Delaware Corporation v Hydrox Holdings Pty Ltd (2016) 245 FCR 452; [2016] FCA 1164; Best Floor Sanding Pty Ltd v Skyer Australia Pty Ltd [1999] VSC 170,cited.

6. The primary judge did not err in finding that it was not necessary to resolve the dispute as to whether the Trustees were claiming “through or under Clough” in respect of the Clause 21.3 Matter. If it was necessary to decide, the Trustees were not so claiming, given this aspect of their defence turned on the effect of the DOCA and the operation of the Corporations Act, rather than any defence that may have been available to the Trustees “through or under” Clough: [116]-[120] (Bell CJ); [125] (Ward P); [126] (Free JA). 
7. The primary judge’s decision not to stay the Clause 21.3 Matter pending the determination of the arbitration of the Call Contribution Matter was a discretionary case management decision. No error of principle has been shown vitiating that exercise of discretion and leave to appeal in relation to it, as sought in draft appeal ground 5, should be refused: [121]-[122] (Bell CJ); [125] (Ward P); [126] (Free JA).

JUDGMENT

1. BELL CJ: The principal issue which arises on these applications for leave to appeal and leave to cross-appeal relates to whether Stevenson J (the primary judge) erred in staying part (but not all) of a Cross-Claim by Clough Projects Australia Pty Ltd (Clough) against Elecnor Australia Pty Ltd (Elecnor) and referring that part to arbitration in Singapore in circumstances where Elecnor’s claim against Clough will proceed in the Commercial List of this Court : Elecnor Australia Pty Ltd v Clough Projects Australia Pty Ltd [2025] NSWSC 610 (PJ or the primary judgment).
2. The sophisticated arguments advanced at the hearing, expertly presented by counsel for both parties, ranged widely across the background of the International Arbitration Act 1974 (Cth) (the Act) and included questions of arbitrability, the meaning of “matter” and the concept of “through and under” in s 7 of the Act, waiver, election, repudiation of the arbitration agreement and temporary case management stays of curial proceedings.
3. Leave to appeal should be granted (other than in respect of ground 5 of the draft Notice of Appeal). For the reasons that follow, however, both the appeal and cross-appeal should be dismissed. The complexity of the arguments requires a reasonably detailed statement of the commercial background to the parties’ disputes.

Background

The Joint Venture Deed

4. Elecnor and Clough were parties to a Joint Venture Deed (the Joint Venture Deed) which established an unincorporated joint venture between Elecnor and Clough to undertake a large-scale energy infrastructure project (the Project) for NSW Electricity Operation Pty Ltd (Transgrid). On 2 June 2021, Elecnor and Clough entered an “Engineer, Procure and Construct Contract” with Transgrid to deliver the Project (the EPC Contract). 
5. The Joint Venture Deed imposed various obligations of a fiduciary or quasi-fiduciary nature on Clough and Elecnor: cl 5(c) prohibited each of the parties from making undisclosed profits in relation to the project or using their position to obtain a personal benefit or profit; cl 5(h) provided that the “parties must act in good faith towards each other for all matters relating to the Joint Venture and be fair, reasonable, honest and diligent in performing their respective obligations under this Deed and the [EPC] Contract”. 
6. Clause 6(b) of the Joint Venture Deed established that Elecnor and Clough each had 50% interests in the joint venture and agreed to be liable to the other to the extent of their respective interests. In this respect, the parties agreed to share in the joint venture as tenants in common including as to liabilities under any security: Joint Venture Deed, cl 6(a)-(b).
7. Clause 13.2 of the Joint Venture Deed provides: 

“13.2   Calls on Security

(a)   Where:

(i)   [Transgrid] calls on Security under the [EPC] Contract; and

(ii)   the call is made on one or more party’s security (Primary Call Party) and in respect of any other party’s security no call, or a call of equal or lesser value taking into account is respective Participating Interest, is made (Secondary Call Party),

then:

(iii)  the parties must use their best endeavours to mitigate any loss suffered as a result of a call on any Security; and

(iv)  within two Business Days of a written demand by the Primary Call Party, the Secondary Call Party must, without limiting clause 7, pay the Primary Call Party an amount calculated by multiplying the Secondary Call Party’s Participating Interest by the total amount of the combined calls and subtracting the amount of the call made on the Secondary Call Party’s Security (if any).

(b)   Where [Transgrid] calls on Security based on an act or omission by a party which is a Material Default or unrelated to the Project (Responsible Party), then:

(i)   the Responsible Party must use its best endeavours to mitigate any loss suffered as a result of a call on any Security; and

(ii)   where the Primary Call Party is not the Responsible Party, then within five Business Days of a written demand by the Primary Call Party, the Secondary Call Party (also the Responsible Party) must, without limiting clause 7, pay the Primary Call Party 100% of the amount of the call on the Primary Call Party’s Security, plus any loss incurred by the Primary Call Party as a result of the call. (Emphasis in original.)

8. A “Material Default” is defined by cl 1.1 of the Joint Venture Deed as including:

“[(a)]   an act or omission of a party, its officers, employees (excluding Project Employees) or agents, which

…

(iii)  is a material breach by any party of any of its obligations under [the JV Deed] or the Project Documents which is capable of remedy and has remained unremedied for 15 Business Days from receipt of a notice from the Non-Defaulting Party which stipulates the breach and requires it to be rectified (or such longer period expressly stipulated by [the JV Deed] in relation to the circumstances);

…

[(b)]   a failure by a party to provide Security in accordance with [the JV Deed];

[(c)]   a failure by a party to make payment of:

(i)   the amount stated in a Late Payment Notice within 14 days of the Late Payment Notice; or

(ii)   its proportion of [costs or expenses incurred] in accordance with [the JV Deed];

(d)   a failure by a party to indemnify another party in accordance with clause 7 within 10 Business Days of receipt of a written demand for payment;

(e)   an Insolvency Event occurs in respect of a party.”

9. Clause 19(a) of the Joint Venture Deed and cll 1.7.1(a) and (d) of the EPC Contract required the consent of the “client” (Transgrid) and the other parties in relation to a transfer or assignment of rights in respect of the Joint Venture Deed. Clause 19(a) of the Joint Venture Deed provides as follows: 

“19.   Assignment and Change in Control 

(a)   A party must not: 

(i)   employ, assign or transfer any of the Joint Venture monies, property or credit except on behalf of the Joint Venture;

(ii)   draw, accept, endorse or negotiate any bill of exchange, promissory note or other instrument in the name of the Joint Venture unless approved by the Steering Committee; or 

(iii)   sell, assign pledge, encumber, novate, or transfer its rights, interests, benefits, or liabilities in the Joint Venture or permit any of the Joint Venture property or its interest in the Joint Venture to be encumbered or sub-let any of its obligations to any other company, firm or person, 

(iv)   without the prior written consent of: 

(A)   the Cient, if required under the Projects Documents; and 

(B)   the other parties, which consent must not be unreasonably withheld or delayed.”

10. Clause 21.1 of the Joint Venture Deed provides that:

“21.1   Notification of default

If a party commits or is the subject of a Material Default (Defaulting Party), the Non-Defaulting Party may issue the Defaulting Party with a written notice requiring it to remedy the Material Default within 10 Business Days of the date on which the notice is deemed to have been received, or such later period stated in the notice (Remedy Period).”

11. Clause 21.3 of the Joint Venture Deed provides:

“21.3   Rights of Non-Defaulting Party

(a)   If the defaulting Party fails to remedy the Material Default within the Remedy Period, the Non-Defaulting Parties may, without limiting or otherwise affecting its rights or remedies under any other clause of this Deed, available at law or in equity:

(i)   preclude the Defaulting Party from voting and contributing to a quorum in meetings of the Steering Committee until the Defaulting Party makes good the Material Default; and/or

(ii)   complete the balance of the Works under the Contract without the Defaulting Party; and/or

(iii)  recover damages from the Defaulting Party in connection with each and every default, including pursuant to any indemnity in this Deed; and/or

(iv)  elect to treat the failure to remedy as an invitation from the Defaulting Party to receive an offer from the Non-Defaulting Parties to purchase the Defaulting Party’s Participating Interest, in which case:

(A)   the Non-Defaulting Parties may, at any time after expiry of the Remedy Period provide the Defaulting Party with a written offer (the date of which is the Offer Start Date), specifying the Offer Price the Offer Expiry Date (being the date which is the earlier of the date on which the Material Default is subsequently remedied and the date which is 30 days after the Offer Start Date);

(B)   the Defaulting Party:

(I)   may accept the offer by written notice (which must restate the Offer Price), at any time prior to expiry of the Offer Expiry Date;

(II)   may reject the Offer Price (but not the offer itself) by written notice within five Business Days of receipt of the offer referred to in clause 21.3(a)(iv)(A);

(C)   if the Defaulting Party rejects the Offer Price in accordance with clause 21.3(a)(iv)(B)(II), the Purchase Price will be the Expert Price determined in accordance with Schedule 23;

(D)   if the Defaulting Party does not reject the Offer Price in accordance with clause 21.3(a)(iv)(B)(II), the Purchase Price is deemed to be the Offer Price; and

(E)   subject to clause 21.4, 10 Business Days after the later of:

(I)    a written notice provided pursuant to clause 21.3(a)(iv);

(II)   the Offer Expiry Date; and 

(III)  the date on which the Purchase Price is finally determined,

the:

(IV)  Non-Defaulting Parties must pay the Purchase Price to the Defaulting Party; and

(V)   Defaulting Party must execute all documents necessary to vest its Participating Interest in the Non-Defaulting Parties and must pay all stamp duty and taxes as a result of the operation of this clause.”

12. Clause 22.2 of the Joint Venture Deed provides: 

“22.2   Effect of Insolvency Event 

(a)   The right of the Insolvent Party to have any operational or financial input or control of the Joint Venture terminates immediately on the date of its first Insolvency Event until such point in time that the Insolvency Event ceases to apply.

(b)   The Continuing Parties are entitled to proceed to carry on the business of the Joint Venture with sole full and absolute operational and financial control, including as permitted by clause 21.3(a)(i). 

(c)   Except where the Continuing Parties have exercised their rights under clause 21.3(a)(iv), when the profits of the Joint Venture are finally determined the Insolvent Party is entitled to share in the profits of the Joint Venture up to the date of its first Insolvency Event in accordance with clause 22.2(d). 

(d)   The share of the profits of the Insolvent Party is to be the Insolvent Party’s Participating Interest of an amount determined by the following formula…

(e)   Subject to clause 22.2(f), the Continuing Parties are entitled to all of the profits of the Joint Venture following the date of the Insolvent Party’s first Insolvency Event. 

(f)   Following completion of the Works and the Joint Venture and the preparation of the final statement pursuant to clause 17: 

(i)   the Continuing Parties must set of any amounts owed or owing by the Insolvent Party against any payment due under clause 22.2(d) and, following such set-off, account to the Insolvent Party or its relevant controller, receiver, trustee or other legal representative a net amount equal to any amount advanced to the Joint Venture by the Insolvent Party: 

(A)   plus the Insolvent Party’s share of the profits, determined in accordance with clause 22.2(d); and 

(B)   less the Insolvent Party’s Participating Interest share of any losses, without reduction; and 

(ii)   if the share of the losses chargeable to the Insolvent Party exceeds the sum advanced by the Insolvent Party, then the Insolvent Party or its receiver, trustee or other legal representative is liable to the Continuing Parties, and must pay the Continuing Parties on demand, the amount of such excess, including by exercising its rights under any security, guarantee or charge granted to it in accordance with this Deed. The parties agree that the Continuing Parties may make interim calculations, of, and demand for, the likely losses contemplated for the Joint Venture for the purposes of proving in any insolvency process of the Insolvent Party.

(g)   Nothing in this clause 22.2 limits or otherwise affects the Non-Defaulting Party’s rights under clause 21[.]1 or otherwise under this Deed.”

13. Clause 23.2 of the Joint Venture Deed provides:

“23.2   Executive negotiation

(a)   If a dispute or difference in connection with this Deed or the Project (hereafter called a ‘dispute’) arises between the parties, which cannot be resolved by the Steering Committee, the Steering Committee must, by written notice, refer the dispute to the Chief Executive Officer of each party.

(b)   Within 10 Business Days of receipt of the notice from the Steering Committee, the Chief Executive Officers, or such other person nominated by the Chief Executive Officers with authority to agree a resolution of the disputed must meet and use their reasonable endeavours to resolve the dispute.”

14. Clause 23.3 of the Joint Venture Deed provides:

“23.3   Arbitration

(a)   If the parties have not resolved the dispute or agreed on an alternative dispute resolution process within 45 days of the dispute being referred in writing to the Steering Committee pursuant to clause 23.2 (or such longer period agreed between the parties), any party may, by written notice to the other parties, submit the dispute to arbitration in accordance with, and subject to, the Rules of Arbitration of the International Chamber of Commerce (ICC Rules) in effect on the date of this Deed.

(b)   Despite any provision of the ICC Rules to the contrary the following principles will apply in the conduct of an arbitration, unless the parties otherwise agree:

(i)    one arbitrator will be appointed;

(ii)   the appointing authority will by the ICC;

(iii)  the seat of the arbitration will be Singapore;

(iv)  all proceedings will be conducted in the English language; and

(v)   the arbitrator’s award will be final and binding and enforceable in any legal jurisdiction;

(c)   Any information or documents disclosed under this clause:

(i)    must be kept confidential; and

(ii)   may only be used to attempt to resolve the dispute.

(d)   Subject to the award of the arbitrator, each party must bear its own costs of complying with this clause.

(e)   Judgment upon the award rendered may be entered in any court having jurisdiction or application may be made to such court for a judicial acceptance of the award and an order for enforcement, as the case may be.

(f)    The parties must continue to perform their obligations under this Deed and the Project Documents despite the existence of a dispute and/or any stage of the process in this clause 23[.]3 being followed, including the commencement of an arbitral proceeding.

(g)   Nothing in this clause 23[.]3 will prejudice the right of any party to see urgent injunctive or declaratory relief in respect of a dispute or any matter arising out of or in connection with this Deed or the Project Documents.” 

15. Clause 26.2 of the Joint Venture Deed provides that the Deed will be governed and construed in accordance with the laws of New South Wales, and that the parties submit to the non-exclusive jurisdiction of the Supreme Court of New South Wales.

Default

16. On 31 October 2022, Clough failed to provide a form of security under the EPC Contract. This constituted a “Material Default” under the Joint Venture Deed (the First Material Default). 
17. On 2 November 2022, Elecnor issued a notice of default. On 28 November 2022, however, the parties agreed to modify the Joint Venture Deed to provide that Elecnor would not exercise its rights in relation to that default for an agreed period.
18. On 5 December 2022, Clough’s directors determined that it was insolvent or likely to become insolvent, and resolved to appoint voluntary administrators. 
19. On 14 December 2022, Elecnor notified Clough that the appointment of administrators was an “Insolvency Event” under the Joint Venture Deed and therefore a “Material Default” (the Second Material Default).
20. On 3 February 2023, Clough entered into a contract with Holding Construction Australia Pty Ltd (the Purchaser) for the sale of Clough’s business.
21. On 14 February 2023, Transgrid drew down on all bank guarantees and insurance bonds that were issued at Clough’s request (but not those procured by Elecnor) in the amount of some $110 million.
22. On 16 February 2023, the Purchaser, Clough and its related entities entered a Deed of Company Arrangement (DOCA). The DOCA required that specified assets such as the purchase price from the sale to the Purchaser be transferred to a Creditors’ Trust in exchange for shares in the Clough Entities being transferred to the Purchaser. Creditors’ claims were converted into claims against the Creditors’ Trust. All “Trust Assets” (including rights in respect of specified bonds such as those called on by Transgrid) were paid into the Creditors’ Trust Account or transferred to the Trustees. The EPC Contract did not form part of the Trust Assets transferred to the Trustees.
23. Elecnor subsequently exercised “step-in” rights under cll 21.3 and 22.2 of the Joint Venture Deed to carry on the joint venture and complete the balance of the works under the EPC Contract. 
24. On 1 July 2024, Elecnor wrote to Clough and the Trustees, noting that:

“1.   neither the appointment of administrators to Clough nor the execution of the DOCA has the effect of terminating the Joint Venture Deed;

2.    any purported transfer or assignment of Clough’s rights in respect of the Joint Venture Deed to the Trustees of the Creditors’ Trust established by the DOCA is of no effect, because under the Joint Venture Deed any such transfer or assignment required consent, and as consent was neither sought nor given any purported transfer or assignment is ineffective; and

3.   as at the date of this notice, Clough has not remedied the Material Default.

[Elecnor] hereby gives notice to Clough that pursuant to clause 21.3(a)(iv) of the Joint Venture Deed:

1.   [Elecnor] elects to treat the failure to remedy as an invitation from Clough to receive an offer from [Elecnor] to purchase Clough’s Participating Interest; and

2.   [Elecnor] offers to buy Clough’s Participating Interest for $1.00 (one dollar) (the Offer Price), with the Offer Expiry Date being the date which is the earlier of the date on which the Material Default is subsequently remedied and the date which is 30 days after the Offer Start Date (which is the date of this Notice).”

25. By email dated 8 July 2024, the Trustees and Clough expressed to Elecnor that their position was that the DOCA had transferred Clough’s interest in the joint venture to the Trustees before Elecnor made its offer – precluding Elecnor from exercising its rights under the Joint Venture Deed against Clough.   The full text of this email is set out at [105] below. The Trustees alternatively rejected Elecnor’s Offer to Purchase.

Commencement of proceedings

26. On 16 December 2024, Elecnor commenced proceedings against Clough and the Trustees seeking a declaration that the DOCA did not cause Clough’s interest in the joint venture, the Joint Venture Deed or the EPC Contract to be transferred to the Trustees. Elecnor also sought an order for specific performance of Clough’s obligations in relation to the compulsory acquisition process.
27. On 7 March 2025, almost three months after commencement of the proceedings and more than two years after their call (see [21] above), Clough and the Trustees notified Elecnor of Transgrid’s call on Clough’s securities and demanded payment by Elecnor of half the amount paid to Transgrid, being $55 million.
28. On the same day, Clough and the Trustees filed a Commercial List Response, contending that Elecnor did not have a right to purchase Clough’s interest in the Joint Venture Deed because:

“(i)   the effect of the DOCA and the transfer of Trust Assets was that Elecnor could not purchase Clough’s interest in the joint venture from Clough;

(ii)   any right to purchase Clough’s ‘Participating Interest’ in the joint venture under the terms of the JV Deed was a ‘claim’ within the meaning of s 444D(1) of the Corporations Act 2001 (Cth) and the DOCA, and had thereby been extinguished and released; and

(iii)  any right to purchase based on the First or Second Material Default was unenforceable by reason of s 451E(4) of the Corporations Act [2001 (Cth)].”

29. Clough and the Trustees also alleged, in [15] of their Commercial List Response, that Elecnor breached its quasi-fiduciary and good faith obligations created by the Joint Venture Deed in respect of Elecnor’s Offer to Purchase (the Bad Faith Breach Contention).
30. A week later, on 14 March 2025, Clough and the Trustees filed a Cross-Claim against Elecnor seeking contribution in respect of Transgrid’s 2023 call on bank guarantees and insurance bonds (the Call Contribution Matter). By the Cross-Claim, Clough and the Trustees sought that Elecnor pay half of the amount owing to the Trustees or Clough to satisfy its contribution obligations arising from the Joint Venture Deed or general law. Paragraph [15] of the Cross-Claim repeated paragraphs 7, 8, 11, 21 and 24-26 of the Commercial List Response and pleaded that “the right to be paid the Call Contribution Amount and or the amount of contribution in equity was transferred to the Trustees by the DOCA”.
31. By notice of motion filed on 27 March 2025 which was amended on 6 May 2025, Elecnor sought a stay of the Call Contribution Matter and the Bad Faith Breach Contention pursuant to s 7(2) of the Act or, alternatively, Art 8 of the UNCITRAL Model Law on International Commercial Arbitration (the Model Law), or cl 23.2 of the Joint Venture Deed. It argued that those claims fell within the scope of the arbitration clause in cl 23.3 of the Joint Venture Deed and were required to be referred to arbitration. 
32. Section 7(2) of the Act provides that:

“Subject to this Part, where:

(a)   proceedings instituted by a party to an arbitration agreement to which this section applies against another party to the agreement are pending in a court; and

(b)   the proceedings involve the determination of a matter that, in pursuance of the agreement, is capable of settlement by arbitration;

on the application of a party to the agreement, the court shall, by order, upon such conditions (if any) as it thinks fit, stay the proceedings or so much of the proceedings as involves the determination of that matter, as the case may be, and refer the parties to arbitration in respect of that matter.”

33. By cross-motion, Clough and the Trustees sought orders pursuant to s 7(2) of the Act, or s 67 of the Civil Procedure Act 2005 (NSW),or the inherent jurisdiction of the Court that, if and only if Elecnor succeeded in obtaining a stay as sought in its notice of motion, then Elecnor’s claim should be stayed pending the determination of any arbitration.
34. Clough and the Trustees also sought, but only further or alternatively, that Elecnor’s claim be permanently stayed and referred to arbitration pursuant to s 7(2) of the Act or Art 8 of the Model Law. 
35. The primary judge ordered that the Call Contribution Matter (other than [15] of the Cross-Claim (see [29] above)) be stayed and referred to arbitration. His Honour declined to stay Elecnor’s claim on either a permanent or temporary basis. 

Primary judgment

36. After considering matters going to construction of the scope and effect of the arbitration clause, the primary judge identified two further key issues, being:
37. the application of s 7(2)(b) of the Act, and, in particular, whether the Cross-Claim involved any “matter” that is “capable of settlement by arbitration” pursuant to cl 23.3 of the Joint Venture Deed; and 
38. if so, whether Elecnor had, by commencing the proceedings, repudiated, waived or abandoned any entitlement to seek a stay of Clough’s Cross-Claim, thus rendering cl 23.3 “null and void, inoperative or incapable of being performed” within the meaning of s 7(5) of the Act.
39. As to the first of these matters and whether the Call Contribution Matter should be stayed pursuant to s 7(2) of the Act or the Model Law and referred to arbitration, the primary judge held that:

“[102]  In my opinion, looking at the substance of the disputes between the parties, there are two s 7(2) ‘matters’. The first is a dispute or controversy about the engagement and enforcement of the compulsory acquisition process set out in cl 21.3 of the JV Deed, of which the Bad Faith Breach Contention forms part (‘the Clause 21.3 Matter’). The second is a dispute or controversy in relation to Clough’s entitlement to contribution for the call on its security by Transgrid that forms the basis of the Cross-Claim (‘the Call Contribution Matter’). 

[103]   This is for four reasons. 

[104]   First, it is clear that the substantive controversy between the parties, at least until the Cross-Claim was filed, related to Elecnor’s entitlement compulsorily to acquire Clough’s interest in the joint venture under cl 21.3. … 

[105]   Second, I do not see the Bad Faith Breach Contention as being a discrete controversy separate from that substantive controversy. An allegation raised in defence can be, or form part of, a ‘matter’. Although the Bad Faith Breach Contention is, in effect, an allegation of breach of the JV Deed by Elecnor, it is responsive to and intrinsically connected with Elecnor’s Offer to Purchase. It is thus part of the substantive controversy relating to cl 21.3, such that it would not be susceptible to settlement as a discrete controversy. Indeed, the allegation appears to go to the heart of the question of whether Elecnor’s Offer to Purchase was valid and effective to set in train the compulsory acquisition process in cl 21.3. The Bad Faith Breach Contention is thus part of the substantive controversy in Elecnor’s claim and part of the same “matter”. 

[106]   Third, the position is different with respect to Clough and the Trustees’ claim for contribution in the Cross-Claim. That is a dispute which, as Ms Taylor accepted, is separate from the Bad Faith Breach Contention in the sense that it is not a response to Elecnor’s Offer to Purchase and involves the exercise of different rights, both contractual and equitable. And, as submitted by Mr Hutton, it may involve different factual and legal issues, such as set-off claims and factual matters to do with the performance of both parties in carrying out the Project up to the call being made on the performance security, particularly in view of cl 13.2(b) of the JV Deed. Seen in that way, it is a ‘right or liability in controversy’ that is ‘susceptible of settlement as a discrete controversy’; and thus, its own s 7(2) ‘matter’. 

[107]   Fourth, and finally, it does not follow from Elecnor’s allegation that it is ready and willing to perform the terms of the JV Deed that any unperformed or ongoing obligations under the JV Deed are called into issue and thus form part of one ‘interlocking controversy’. The existence of unperformed or ongoing contractual obligations may be relevant to the nature and availability of the relief sought by Elecnor; but do not dictate how to identify the ‘matter’ for the purposes s 7(2) of the Act. Performing that task in the manner I described compels the conclusion that the parties’ dispute about payment in respect of calls on security under cl 13.2 is a ‘matter’ of its own.”

38. The primary judge held that both the “Clause 21.3 Matter and the Call Contribution Matter, insofar as they involve disputes about the compulsory acquisition process and the provisions for contribution to calls on security, fell within the scope of the Arbitration Clause”: PJ [108]
39. The primary judge found, however, that the Clause 21.3 Matter was not arbitrable or capable of settlement by arbitration but that the Call Contribution Matter was arbitrable, saying:

“[110]   However, the Clause 21.3 Matter is not capable of settlement by arbitration. It does not merely involve the resolution of a private dispute between Elecnor and Clough or the Trustees. It invokes and involves questions as to the efficacy of the DOCA and the provisions of Pt 5.3A of the Corporations Act. It raises questions about the efficacy of the transfer by the DOCA of Clough’s interest in the JV Deed to the Trustees and the extent of the interest so transferred. Those questions may affect the rights of creditors. There may be a ‘legitimate public interest’ in seeing a dispute of that type ‘resolved by public institutions or in accordance with structures that are established by parliament rather than institutions and structures established by the parties’. 

[111]   The Call Contribution Matter, on the other hand, is capable of settlement of arbitration. It is a private dispute that does not involve questions as to the operation of provisions of the Corporations Act. Although creditors may be interested in the outcome of that claim, as it may increase the Trust Assets, it would not have the potential to affect the substantive rights of creditors to the same extent as the Clause 21.3 Matter.”

40. The primary judge also rejected the contention that the parties’ failure to follow the tiered dispute resolution process in cl 23.2 precluded the ordering of a stay of proceedings because: (i) such a result would permit a party to “bypass its contractual bargain to submit a dispute to arbitration simply by commencing proceedings before all preliminary steps have been completed” (PJ [116]); and (ii) “the fact that the cl 23.2 process has not been followed to date does not mean that it is now incapable of occurring”: PJ [118]. 
41. The primary judge found that the Trustees were claiming “through or under” Clough in relation to the Call Contribution Matter, observing as follows:

“[123]  Here, the Trustees deny that they have adopted the JV Deed. Their List Response puts in issue matters arguably going beyond those which are available to Clough, such as defences in relation to the effect of the DOCA on the transfer of Clough’s rights and interests and the operation of provisions of the Corporations Act. These matters suggest that the Trustees are not claiming ‘through or under’ Clough in relation to the Clause 21.3 Matter. As I have concluded that the Clause 21.3 Matter is not capable of settlement by arbitration, it is not necessary for me to resolve this.

[124]   However, the Call Contribution Matter arises in proceedings between ‘parties’ to the arbitration agreement. Clough is a signatory to the arbitration agreement. To the extent the Trustees bring the Cross-Claim, they do so ‘through or under’ Clough as an ‘essential element’ of that claim ‘was or is vested in or exercisable by’ Clough under the terms of the JV Deed.”

42. The primary judge also rejected a contention that Elecnor’s commencement of proceedings rendered the arbitration agreement “inoperative” by virtue of repudiation, waiver or abandonment, finding:

“[128]  I do not accept that the commencement of these proceedings by Elecnor was repudiatory in nature. The test is ‘whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it’. Elecnor’s proceedings concern a non-arbitrable matter and were commenced in circumstances where the status of the Trustees as ‘through or under’ parties was in issue. Seen in that light, the commencement of the proceedings did not objectively evince a repudiatory intent. 

[129]   Nor do I consider there to have been any waiver of the arbitration agreement. This is not a case where a party has waived its right to arbitrate an arbitrable dispute in the sense of having intentionally and unequivocally abandoned it. As Mr Hutton submitted, waiver does not operate as a blunt instrument. I do not accept that by commencing proceedings of this kind, and of this content, Elecnor waived its right to arbitrate what is in substance a different matter raised in the Cross-Claim. That is particularly so when a demand for contribution under cl 13.2 of the JV Deed, which is an essential requirement for the crystallisation of any obligation on the part of Elecnor to contribute, had not yet been made by Clough when the proceedings were commenced. 

[130]   For the same reasons, I do not accept that Elecnor has abandoned the arbitration agreement.”

43. In the result, pursuant to s 7(2) of the Act, the primary judge stayed the Cross-Claim (other than the Bad Faith Breach Contention) and referred it to arbitration but did not stay any aspect of Elecnor’s claims: PJ [132]. 
44. His Honour also refused Clough and the Trustees’ cross-motion seeking that Elecnor’s claim be stayed pending the determination of any arbitration on the basis that (PJ [135]):

“Resolution of the controversy between the parties as to the acquisition of Clough’s interest will not depend on the outcome of the arbitration of the Trustees’ claim for contribution for the call on Clough’s security. If anything, the latter would depend on the former, where any declarations made by the Court would resolve the question of the effect of the DOCA on the transfer of Clough’s rights under the JV Deed.”

That decision was a discretionary one, involving a matter of practice and procedure. The difficulties of obtaining leave to appeal in respect of such a decision are well-known: see PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48 (PPK Willoughby).

Grounds of appeal, cross-appeal and notice of contention

45. The complexity of the issues raised on this appeal may be seen in the draft Notices of Appeal and Cross-Appeal, and the Notice of Contention. A number of these issues interacted with each other. Unless the context otherwise indicates, reference to Clough includes the Trustees.
46. The draft Notice of Appeal advanced the following grounds:

“1   The primary judge erred in finding that there are two ‘matters’ in the proceeding for the purposes of s 7(2) of the International Arbitration Act 1974 (Cth), being:

a.   ‘a dispute or controversy about the engagement and enforcement of the compulsory acquisition process set out in clause 21.3 of the JV Deed’ (‘the Clause 21.3 Matter’); and

b.   ‘a dispute or controversy in relation to [the first appellant’s] entitlement to contribution for the call on its security by [NSW Electricity Operations Pty Ltd] that forms the basis of the Cross-Claim’ (‘the Call Contribution Matter’) 

(cf Elecnor Australia Pty Ltd v Clough Projects Australia Pty Ltd [2025] NSWSC 610 (J) [102], [107]).

2   The primary judge erred in finding that the ‘Clause 21.3 Matter’, but not the ‘Call Contribution Matter’, is incapable of settlement by arbitration (cf J [110], [128]).

3   The primary judge erred in finding that whether the second and third appellants were claiming ‘through or under’ the first appellant in relation to the respondent’s claims was ‘in issue’ (cf J [123], [128]).

4   The primary judge erred in finding that the arbitration agreement in cl 23.3 of the JV Deed was not ‘inoperative’ by reason of any repudiation, waiver or abandonment by the respondent (cf J [128]–[131]).

5   In the alternative to grounds 1 to 4 above, the primary judge acted upon a wrong principle, took into account an irrelevant matter and/or failed to take into account material considerations in declining to stay the ‘Clause 21.3 Matter’ or any part thereof on the basis that ‘[r]esolution of the controversy between the parties as to the acquisition of Clough’s interest will not depend on the outcome of the arbitration of the [second and third appellants’] claim for contribution for the call on [the first appellant’s] security’ (cf J [135]).”

47. Apart from seeking that the appeal be allowed and that the primary judge’s orders be set aside, the orders sought in the draft Notice of Appeal in lieu of those to be set aside were that:

“a.  the notice of motion filed by [Elecnor] on 27 March 2025 be dismissed with costs; or

b.   alternatively:

i.   [Elecnor’s] claim be stayed pending the determination of an arbitration; and

ii.  [Elecnor] pay [Clough’s] costs.”

48. It may be noted that Clough and the Trustees did not, on appeal, seek the further or alternative orders that they had sought in the cross-motion before the primary judge, namely the permanent staying of Elecnor’s claim pursuant to 
     s 7(2) of the Act: see [33] above. This is of some significance because that meant that at least Elecnor’s positive claims will proceed in this Court but the question of whether the Cross-Claim will be permitted to do so will be a function of the operation of the Act and the question of whether Elecnor had lost its right to insist on a stay and referral to arbitration of the Call Contribution Matter by reason of waiver, election or repudiation of the arbitration agreement. Part of this question turns upon whether the Clause 21.3 Matter was arbitrable, contrary to the primary judge’s finding that it was not. If that finding be sustained, the commencement and continuation of the Clause 21.3 Matter could not amount to a waiver, election or repudiation of the arbitration agreement. If the Clause 21.3 Matter were arbitrable, on the other hand, whether its commencement and continuation amounted to a waiver or election or was repudiatory calls for a close analysis of those doctrines and their application to the facts of the case.   
49. The sole challenge raised by the draft Notice of Cross-Appeal related to his Honour’s failure to stay theBad Faith Breach Contention which formed part of Clough’s response to Elecnor’s claim:

“The primary judge erred in failing to find that [29(d)], read with [7], of the cross-respondents’ Commercial List Response raised a matter capable of settlement by arbitration as a discrete controversy, which must be stayed pursuant to s 7(2) of the International Arbitration Act 1974 (Cth)”.

The primary judge’s reasons for declining to stay the Bad Faith Breach Contention were contained in [105] of his reasons, reproduced at [37] above. In short, his Honour held that the Bad Faith Contention formed part of the same matter that was the subject of the Clause 21.3 Matter, which was not arbitrable.

50. The Notice of Contention was in the following terms:

“1   The second to fourth defendants in the proceedings below are not parties claiming ‘through or under’ the first defendant within the meaning of s 7(4) of the International Arbitration Act 1974 (Cth) in respect of the Clause 21.3 Matter (or part thereof), such that the Clause 21.3 Matter (or part thereof) does not arise as between parties to the arbitration agreement.

2   On a proper construction of clause 23.3 of the Transgrid Project Energy Connect Project Joint Venture Deed (as amended) between the plaintiff and first defendant (JV Deed), a party is not in breach of that clause in commencing or pursuing court proceedings in respect of a dispute falling within the scope of that clause, unless the other party requires that dispute to be arbitrated. 

3   The commencing of court proceedings in respect of a dispute within the scope of clause 23.3 of the JV Deed, even in breach of that clause, does not of itself evince an intention to repudiate or abandon the arbitration agreement.”

51. Before turning to consider the parties’ respective submissions, some principles which have emerged from 50 years of jurisprudence in relation to s 7 of the Act should be identified.

The International Arbitration Act

52. Subject to some qualifications (for example, if the arbitration agreement is no longer operative), arbitration is a function of parties’ contractual agreement. It is trite that arbitration agreements may be broadly or narrowly drawn (see Inghams Enterprises Pty Ltd v Hannigan [2020] NSWCA 82; (2020) 379 ALR 196 at [48] (Inghams)) and, even though it is now generally accepted that the scope of arbitration agreements should be liberally construed, there are numerous examples of court proceedings in which some but not all claims fall within the scope of an arbitration agreement or arbitration clause in a commercial agreement and are liable to being stayed and referred to arbitration in accordance with the parties’ agreement and the Act. A recent example is supplied by Dnata Airport Services Pty Ltd v Polar Air Cargo Worldwide Inc[2026] NSWCA 105 where contractual but not negligence claims fell within the scope of the arbitration clause in question although, for other reasons, that clause was ultimately held not to constitute an arbitration agreement within the meaning of the Act. Principles guiding the construction of arbitration agreements including their scope were identified in Inghams at [53]-[63].
53. The terms of s 7(2) of the Act have been set out at [32] above. It will be clear from the text of s 7(2)(b) that “proceedings” pending in a court may “involve the determination of a matter that, in pursuance of the agreement, is capable of settlement by arbitration”. In Tanning Research Laboratories Inc v O’Brien (1990) 169 CLR 332; [1990] HCA 8 (Tanning), Deane and Gaudron JJ noted at 351 that:

“In the context of s 7(2), the expression ‘matter … capable of settlement by arbitration’ may, but does not necessarily, mean the whole matter in controversy in the court proceedings. So too, it may, but does not necessarily encompass all the claims within the scope of the controversy in the court proceedings.”

The expression “matter…capable of settlement by arbitration” requires that “there be some subject matter, some right or liability in controversy which, if not co-extensive with the subject matter in controversy in the court proceedings, is at least susceptible of settlement as a discrete controversy”: Tanning at 351.

54. It is also clear from the text of s 7(2) of the Act that the term “matter” is distinct from the word “proceedings”. It is important not to conflate the word “matter” in s 7(2) of the Act with the meaning of the term “matter” in Chapter III of the Commonwealth Constitution. In the context of the Act and as made clear in Tanning, the ambit of the “matter” may be co-extensive with the whole of the proceedings or only part of the proceedings. So much is reflected in the words – “stay the proceedings or so much of the proceedings as involves the determination of that matter, as the case may be” – that appear in s 7(2). There may be numerous “matters” to be determined in any given set of proceedings: see, for example, WDR Delaware Corporation v Hydrox Holdings Pty Ltd (2016) 245 FCR 452; [2016] FCA 1164 at [122] (WDR Delaware). Not all these matters may fall within the scope of the arbitration agreement and, even where they do, they may not all be matters which are “capable of settlement by arbitration”: as to which, see [56]-[58] below. Tanning was an example of such a case: see [85] below.
55. Accepting that proceedings may involve more than one “matter” within the meaning of the Act, the identification of what falls within the scope of a particular matter (as opposed to the scope of the arbitration agreement itself) “is to be ascertained from the pleadings and from the underlying subject matter upon which the pleadings, including the defence, are based”: Recyclers of Australia Pty Ltd v Hettinga Equipment Inc (2000) 100 FCR 420; [2000] FCA 547 (Recyclers) at [18], approved in Flint Ink NZ Ltd v Huhtamaki Australia Pty Ltd (2014) 44 VR 64; [2014] VSCA 166 (Flint Ink) at [33]-[34], In the matter of Infinite Plus Pty Ltd (2017) 95 NSWLR 282; [2017] NSWSC 470 at [60] and Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd (2020) 55 WAR 435; [2020] WASCA 77 (Hancock Prospecting v DFD Rhodes) at [128]-[134].
56. The expression “capable of settlement by arbitration” gives effect to the concept of “arbitrability” and has, as its corollary, the proposition that some matters are, by their nature, not arbitrable. It has been observed that “[t]he types of disputes which national laws may see as not arbitrable” have the common elements “that there [is] a sufficient element of legitimate public interest … making the enforceable private resolution of disputes concerning them outside the national court system inappropriate” and that “the identification and control of these subjects [is] the legitimate domain of national legislatures and courts”: Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45; [2006] FCAFC 192 (Comandate) at [200]. It is, however, only in very limited circumstances that a dispute which the parties have agreed to refer to arbitration will be held to be non-arbitrable: Larkden Pty Ltd v Lloyd Energy Systems Pty Ltd [2011] NSWSC 268; (2011) 279 ALR 772 at [62]-[65]; Siemens Ltd v Origin Energy Uranquinty Power Pty Ltd (2011) 80 NSWLR 398; [2011] NSWSC 195 at [38] (Siemens); Rinehart v Welker (2012) 95 NSWLR 221; [2012] NSWCA 95 (Welker) at [167]. 
57. Examples of matters which have been held not to be arbitrable include: proceedings in which a company is being wound up; actions under the corporations legislation to rectify a share register; where the resolution of the dispute is capable of affecting the interests of third parties not party to the relevant arbitration agreement, including, for example, the avoidance of payments deriving from a statutory insolvency regime; or where a statutory text otherwise evinces a legislative intention to exclude arbitration of the statutory rights or liabilities in issue: see cases cited in M Davies et al, Nygh’s Conflict of Laws in Australia (11th ed, 2026, LexisNexis) at [7.54]-[7.60] (Nygh’s) and Tesseract International Pty Ltd v Pascale Construction Pty Ltd [2024] HCA 24; (2024) 98 ALJR 880 at [341] (Tesseract). To those examples may be added the following summary by M Mustill and S Boyd in The Law and Practice of Commercial Arbitration in England (2nd ed, 1989, Butterworths) at 149-50, in a passage partly quoted in Tesseract at [272], and Airservices Australia v Civil Air Operations Officers’ Association of Australia (2022) 295 FCR 36; [2022] FCAFC 172 at [86]:

“For example, [the arbitrator] cannot impose a fine or a term of imprisonment, commit a person for contempt or issue a writ of subpoena; nor can he make an award which is binding on third parties or affects the public at large, such as a judgment in rem against a ship, an assessment of the rateable value of land, a divorce decree, a winding‐up order or a decision that an agreement is exempt from the competition rules of the EEC under Article 85(3) of the Treaty of Rome. It would be wrong, however, to draw from this any general rule that criminal, admiralty, family or company matters cannot be referred to arbitration: indeed, examples of each of these types of dispute being referred to arbitration are to be found in the reported cases.”

58. A matter which is capable of settlement by arbitration may be a matter raised as part of the plaintiff’s claim or may be a matter raised by way of defence. In Tanning, Brennan and Dawson JJ observedat 342 that:

“In the first place, as sub-s (2) speaks of both parties to an arbitration agreement, a person who claims through or under a party may be either a person seeking to enforce or a person seeking to resist the enforcement of an alleged contractual right. The subject of the claim may be either a cause of Action or a ground of defence. Next, the prepositions ‘through’ and ‘under’ convey the notion of a derivative cause of action or ground of defence, that is to say, a cause of action or ground of defence derived from the party. In other words, an essential element of the cause of action or defence must be or must have been vested in or exercisable by the party before the person claiming through or under the party can rely on the cause of action or ground of defence. A liquidator may be a person claiming through or under a company because the causes of action or grounds of defence on which he relies are vested in or exercisable by the company; a trustee in bankruptcy may be such a person because the causes of action or grounds of defence on which he relies were vested in or exercisable by the bankrupt.” 

59. Further, and related to this, s 7(4) of the Act, which provides that “for the purposes of sub-sections (2) and (3), a reference to a party includes a reference to a person claiming through or under a party”, means that a curial claim brought by a non-party to the arbitration agreement against a party to the arbitration agreement may be stayed if it derives from a claim (or defence) of another who is party to the arbitration agreement: Tanning. Thus, notwithstanding the use of the word “claiming” in s 7(4), a defendant who or which is not a party to the arbitration agreement may be treated as a party to it if it raises a defence which derives from a right of a party to the arbitration agreement. In Rinehart v Hancock Prospecting Pty Ltd (2019) 267 CLR 514; [2019] HCA 13 at [73]-[74] (Rinehart v Hancock Prospecting), the majority in the High Court held that a non-party invoking a defence dependent on the position of a party to an arbitration agreement should be recognised as a person claiming through or under that party, and thus be bound to arbitrate, a position which the majority of the Court recognised was doubted in England and was contrary to the strong dissent of Edelman J. See also DFD Rhodes Pty Ltd v Hancock Prospecting Pty Ltd (2022) 59 WAR 316; [2022] WASCA 97 (DFD Rhodes v Hancock Prospecting) at [111].
60. Where a matter (whether raised by the plaintiff or the defendant) is identified in proceedings and that matter falls within the scope of an arbitration clause or agreement and is capable of settlement by arbitration, s 7(2) of the Act has a mandatory operation when a party to the arbitration agreement seeks to stay that matter and have it referred to arbitration: Flakt Australia Ltd v Wilkins & Davies Construction Co Ltd [1979] 2 NSWLR 243 at 250; (1979) 25 ALR 605; Elders CED Ltd v Dravo Corporation (1984) 59 ALR 206 at 207; (1984) 2 BCL 68; Tanning at 349-50; Hi-Fert Pty Ltd v Kiukiang Maritime Carriers Inc (No 5) (1998) 90 FCR 1 at 12-13; [1998] FCA 1485 (Hi-Fert); Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66; (2013) 298 ALR 666 at [43]; Carmichael Rail Network Pty Ltd v BBC Chartering Carriers GmbH & Co. KG (The BBC Nile) (2022) 295 FCR 81; [2022] FCAFC 171 at [109]; Comandate at [35]. In other words, the Court is bound to stay the proceedings insofar as they involve that matter and refer it for determination in arbitration.
61. It is implicit in s 7(2) itself and follows from what has been said in [52]-[55] above that, even in a two party case, the resolution of proceedings commenced in court which involve a matter “that, in pursuance of the [arbitration] agreement, is capable of settlement by arbitration” may be fractured by a party to the arbitration agreement successfully applying to stay “so much of the proceedings as involves the determination of that matter” (or those matters) and refer the parties to arbitration “in respect of that matter” (or those matters). This may be an inconvenient and apparently inefficient outcome but it is a function of the parties’ agreement and the operation of the Act. As Nettle JA observed in Flint Ink at [116], “[t]he statutory imperative is to refer to arbitration so much of the proceeding as involves the determination of the matter”. See also John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [86] (John Holland).
62. The scope for fracturing of the resolution of aspects of a dispute is magnified, of course, in cases of multi-party disputes where not all of the parties to the litigation are parties to an arbitration agreement.   Hi-Fert was a case where there were three parties, and only two were party to an arbitration agreement. Moreover, as between the two parties who were party to the arbitration agreement, not all of the disputes between those parties fell within the scope of the arbitration agreement. The Court stayed those aspects of the proceedings which did and referred them to arbitration in London with the balance of the proceedings continuing in the Federal Court of Australia. The Court imposed, as a condition on the stay (as it was entitled to under s 7(2)) that the arbitration not proceed until final determination of the matters not referred to arbitration.
63. An important qualification to the mandatory operation of s 7 of the Act is supplied by s 7(5) which provides that a “court shall not make an order under subsection (2) if the court finds that the arbitration agreement is null and void, inoperative or incapable of being performed”. 
64. An arbitration agreement may become “inoperative” where a party to it has made an election and abandoned or waived its right to rely upon it or has, by its conduct, repudiated it and that repudiation has been accepted by the counterparty. 
65. When considering the operation of the doctrine of repudiation in this context, it is important to appreciate that an arbitration clause in a commercial contract will itself be treated as a self-contained agreement within but collateral or ancillary to that larger commercial contract under what is sometimes known as the doctrine of separability: see, for example, Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corp Ltd [1981] AC 909 at 980; [1979] 3 WLR 471; Comandate  at [219]; Ferris v Plaister (1994) 34 NSWLR 474 at 504; (1994) 11 BCL 417. As such, that separate agreement may be repudiated in accordance with orthodox contractual principles where the conduct of the party in bringing curial proceedings “evinces an intention no longer to be bound by the contract [or arbitration agreement] or to fulfil it only in a manner substantially inconsistent with the party’s obligations”: Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; [2007] HCA 61 (Koompahtoo) at [44]. These contractual principles are to be applied, however, in the context of the wording of the particular arbitration agreement and against the background of the Act. What is required is clear and unequivocal conduct that demonstrates an intention of a party no longer to be bound by the arbitration agreement in respect of any and all disputes: Rederi Kommanditselskaabet Merc-Scandia IV v Couniniotis SA [1980] 2 Lloyd’s Rep 183 at 185; Armada Balnaves Pte Ltd v Woodside Energy Julimar Pty Ltd [2022] WASCA 69 at [515]; Comandate at [62]; BEA Hotels NV v Bellway LLC [2007] 2 Lloyd’s Rep 493 at [13]-[14]; [2007] EWHC 1363 (Comm); CLQ v CLR [2022] 3 SLR 145; [2021] SGHC(I) 15 at [30]-[34]. Events and correspondence predating the commencement of proceedings may negative any inference to be drawn from the commencement of court proceedings: Marty Ltd v Hualon Corp (Malaysia) Sdn Bhd (rec and mgr apptd) [2018] 2 SLR 1207;[2018] SGCA 63 at [54]. 
66. Where repudiatory conduct is identified, the arbitration agreement may be terminated by express or inferred agreement. The latter may be implied by the filing of a defence to court proceedings brought in repudiatory breach of the arbitration agreement: see, for example, Woolworths Group Ltd v Gazcorp Pty Ltd [2022] NSWCA 19 at [91], [93].
67. A party with a contractual right to have a matter capable of settlement by arbitration stayed and referred to arbitration may also waive or be taken to have waived that right. In general terms, waiver which was described in Zhang v Shanghai Wool and Jute Textile Co Ltd [2006] VSCA 133; (2006) 201 FLR 178 (Zhang) at [14] as a “vague or imprecise term that is used in many senses” is constituted by “the deliberate, intentional and unequivocal release or abandonment of the right that is later sought to be enforced”: at [14]. A party may waive its right to insist on arbitration by various means, examples of which are identified in Nygh’s at [7.34]-[7.40]. These include the filing of a cross-claim and/or a defence on the merits (see, for example, BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd (2008) 168 FCR 169; [2008] FCA 551) or other conduct consistent only with an intention to defend the matter on its merits in the court in which proceedings have been commenced by, for example, seeking security for costs or discovery or the striking out of the plaintiff’s claim on the merits.
68. The juridical concept of waiver has often been closely associated with that of election and estoppel and variation of contract: Agricultural and Rural Finance Pty Limited v Gardiner (2008) 238 CLR 570; [2008] HCA 57 at [46] and [51]-[54]; see also Sargent v ASL Developments Ltd (1974) 131 CLR 634 at 655 per Mason J; [1974] HCA 40 (Sargent). Where a party has elected to exercise one of two inconsistent rights, that may, depending on the circumstances, result in the loss of the other right.  Both waiver and election require an awareness of at least the facts giving rise to the rights which are being foregone: Zhang at [14]; Sargent at 656-8, Commonwealth v Verwayen (1990) 170 CLR 394 at 423-4, 473, 482 and 497; [1990] HCA 39. Where a matter is not arbitrable, the bringing of proceedings in respect of that matter does not involve any election because there is no (inconsistent) right to arbitrate by reason of the nature of the matter. Where a dispute involves more than one matter (in the sense of s 7(2) of the Act), an election in respect of one matter will not necessarily affect the operation of the arbitration agreement in respect of the other matter(s): cf Bakri Navigation Company Ltd v Owners of the ship ‘Golden Glory’ Glorious Shipping SA (1991) 217 ALR 152 at 168; Ahad v Uddin [2005] EWCA Civ 883 at [19]-[21].
69. As has been noted above, the operation of an arbitration agreement in combination with s 7 of the Act may result in a circumstance where the resolution of the entirety of the parties’ dispute[s] in a single forum, whether curial or arbitral may not be possible absent supervening agreement. In this context, s 7(2) of the Act permits a stay and referral to arbitration to be made “on such condition (if any) as it sees fit”. In some cases where there is a fracturing of the dispute resolution process, the power to impose conditions on a stay of proceedings has been used for what may be described as case management purposes: see Hi-Fert discussed at [62] above. 
70. In the present case, Clough sought orders (which the primary judge declined to make) staying the Supreme Court proceedings pending the resolution of what was referred to arbitration in Singapore. This was the converse of the conditions imposed in Hi-Fert. The imposition or non-imposition of conditions is really a question of case management, and is quintessentially a matter for the judge hearing the stay application. Unlike the decision to grant a stay under s 7(2) (which is mandatory when the necessary probanda are established), any decision to impose conditions upon that stay is a discretionary one. This distinction has implications for appellate review of the latter kind of decision (House v The King (1936) 55 CLR 499; [1936] HCA 40), and also the principles governing a grant of leave to appeal: PPK Willoughby.

Draft Notice of Cross-Appeal

71. It is convenient, first, to deal with the sole ground of the draft Notice of Cross-Appeal, which concerned the primary judge’s decision not to stay the Bad Faith Breach Contention on the basis that it formed part of the same “matter” as the Clause 21.3 Matter: see [49] above. The analysis may be stated in six steps.
72. First, by commencing its proceedings in the Commercial List, Elecnor lost any right it had to refer the subject matter of its own claim to arbitration (assuming that its claim was capable of settlement by arbitration, which it contended it was not).   Moreover, it also lost the right (absent Clough’s agreement) to refer defences to its curial claim that formed part of the “matter” in the sense of s 7(2) of the Act to arbitration. So much follows from the decision in Tanning: see [58] above. 
73. Second, if the subject matter of Elecnor’s claim fell within the scope of the arbitration clause and was capable of settlement by arbitration (that is to say, if it was “arbitrable”), Clough could have sought and would have been entitled to a mandatory stay of Elecnor’s proceedings exercising its contractual rights, underpinned by s 7 of the Act, provided only that it had not otherwise lost by waiver or election or otherwise repudiated its right to seek such a stay.
74. Third, by filing its defence to the proceedings in the form of its Commercial List Response, Clough waived its right to seek a stay of the Clause 21.3 Matter by reason of the doctrine of waiver: see [67] above.
75. Fourth, thus far in the analysis, no question of the meaning and scope of the word “matter” in s 7(2) of the Act had arisen for, at the point that Clough filed its defence to Elecnor’s Claim (which only entailed the Clause 21.3 Matter and defences thereto), the Cross-Claim had not been brought. There was thus at that point only one matter and, at least by the time of the appeal, Clough did not seek permanently to stay that matter and have it referred to arbitration: see [48] above.
76. Fifth, if the Clause 21.3 Matter was not arbitrable in the first place, no question of the meaning and scope of the word “matter” in s 7(2) of the Act would arise and Elecnor’s claim and any defence to it would necessarily fall to be determined curially.
77. Sixth, the Bad Faith Breach Contention formed a non-colourable part of Clough’s defence. It falls to be determined in the same hearing as the Clause 21.3 Matter and the primary judge was correct to hold that it was part of that matter. Because both parties by their actions had lost the right to have that matter referred to arbitration (if indeed it was arbitrable) — Elecnor by its curial commencement of the claim and Clough by its filing of a defence without first seeking a stay of proceedings — the primary judge was correct and the cross-appeal should be dismissed.  
78. This result must also follow if the Clause 21.3 Matter was not arbitrable, as the primary judge held. It is not, however, necessary to determine this for the purposes of dealing with the Cross-Appeal (although it remains relevant to the questions of election, waiver and repudiation which arise on the Appeal and which are dealt with below.)

One “matter” (NOA ground 1)

79. Clough challenged the primary judge’s finding that there were two “matters” for the purpose of s 7(2) of the Act, being: (i) the “Clause 21.3 Matter”, which included the issue as to the compulsory acquisition process raised by Elecnor, and the Bad Faith Breach Contention; and (ii) the “Call Contribution Matter”, relating to Clough and the Trustees’ Cross-Claim for contribution as against Elecnor. Rather, Clough contended that there was only one “matter” and that what the primary judge called the “Call Contribution Matter” was in fact encompassed and bound up in the “Clause 21.3 Matter” in respect of the compulsory acquisition process issue.  His Honour’s essential reasoning was contained in [102] ff set out at [37] above.
80. It should at once be observed that more than one “matter” may be involved in parties’ dispute[s], as explained at [53]-[55] above. As Deane and Gaudron JJ pointed out in Tanning, “matter” when used in s 7 of the Act has a different meaning to “matter” in Chapter 3 of the Commonwealth Constitution. The primary judge did not err in conceiving of the possibility that more than one matter may be involved and Clough accepted that not “every possible defence to every possible claim forms part of the same ‘matter’ as the claim”. The contention advanced by Clough was therefore not that there could only ever be one matter but that, on the facts of the present case, his Honour should have characterised the parties’ dispute as only involving a single matter.
81. Clough argued that what the primary judge characterised as the Call Contribution Matter could not “stand alone” as a separate matter because that issue represented the “other side” of the Clause 21.3 Matter raised by Elecnor concerning the compulsory acquisition process.  In this respect, Clough relied upon DFD Rhodes v Hancock Prospecting at [171] where Quinlan CJ and Beech JA observed that “paragraphs of a reply (or any other form of pleading) cannot, standing alone, constitute a matter; there must be two sides to a controversy”. 
82. Clough submitted that the “other side” of the Clause 21.3 Matter included the issue as to contribution because it formed a basis on which Clough resisted Elecnor’s claim concerning the compulsory acquisition process. Elecnor’s claim for specific performance concerned the enforcement of the compulsory acquisition process under cl 21.3, and it pleaded that it was ready and willing to perform its obligations under the Joint Venture Deed “insofar as they remain to be performed, and to do all matters and things on its part to be done”. Clough submitted that such a plea included that Elecnor was ready and willing to pay any contribution for which it was liable to pay. As such, it was submitted that the Call Contribution Matter in fact involved the same matter as the Clause 21.3 Matter.
83. While such a characterisation may have produced a convenient result, meaning that all aspects of the overall dispute could be held and heard together in one forum, which is a result that courts invested with discretion to stay proceedings or grant anti-suit injunctions may strive to achieve (see, for example, Incitec Ltd v Alkimos Shipping Corporation (2004) 138 FCR 496; [2004] FCA 698; Société Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] AC 871; [1987] 3 WLR 59), convenience is not the criterion to be applied by courts required to apply s 7(2) of the Act: cf John Holland at [86]. Rather, the characterisation exercise must be performed in accordance with Tanning. In that context and contrary to Clough’s submission, the Call Contribution Matter was susceptible of settlement as a discrete controversy and the “statutory imperative” was to stay that matter and refer it to arbitration: Flint Ink at [116], cited at [61] above.
84. Although Elecnor accepted, consistent with DFD Rhodes v Hancock Prospecting, that there are “two sides” to each controversy, it argued that this did not mean that everything that a party could raise in response to another’s claim necessarily fell on the “other side” of the same coin, or constituted the same single “matter”.   Rather, it contended that where a response to a claim itself constitutes a right or liability in dispute capable of settlement as a discrete controversy and covered by the arbitration agreement – that is itself a matter capable of being referred to arbitration regardless of whether the claim to which it may respond falls outside the arbitration agreement. Such a result, Elecnor suggested, was reached in Tanning, Flint Ink, and DFD Rhodes v Hancock Prospecting.
85. In Tanning, the claim involved a non-arbitrable dispute about whether the liquidator should admit the proof of a debt in the winding up of a company. An issue involved in determining that claim was whether the alleged debt was in fact owing under the relevant agreement. The High Court held that this latter issue was capable of settlement as a discrete controversy and was required to be arbitrated even though the broader issue concerning proof of debts was not arbitrable. As Elecnor put it in written submissions, the arbitrable matter concerning the existence of the debt was required to be referred to arbitration, even though it formed part of the larger, non-arbitrable, matter concerning admission to proof.
86. In Flint Ink, a question as between Flint Ink and Huhtamaki NZ was stayed and referred to arbitration even though it arose in the context of a claim by Flint Ink against Huhtamaki Australia.
87. DFD Rhodes v Hancock Prospecting involved the staying and referral to arbitration of cross-claims which raised matters capable of settlement by arbitration even though they arose as part of a four way dispute as to the ownership of mining tenements.
88. Elecnor therefore submitted that interdependencies between issues, even when comprising a defence to a claim, did not render the issues all part of the same matter. Instead, Elecnor contended that s 7(2) of the Act requires that a controversy is resolved in arbitration upon the application of a party where that controversy: (i) falls within the scope of the arbitration agreement; and 
     (ii) concerns rights or liabilities capable of settlement as a discrete controversy. 
89. In reply, Clough contended that neither Tanning, Flint Ink nor Hancock suggested that a defence to a claim could be regarded as a separate matter. Rather, Clough argued that those cases were relevantly distinguishable on the basis that none of them involved a plaintiff seeking to stay issues which arose through the traversing of its own contention by the defendant. It, in turn, also sought to derive assistance from Recyclers where multiple claims were held to form part of one matter.
90. The issue of characterisation is not ultimately assisted by reference to the facts of other cases but rather by close analysis of the nature of the connectedness or otherwise between the Clause 21.3 Matter and the Call Contribution Matter and resolution of the question raised in Tanning, namely the susceptibility of the matter being resolved as a discrete controversy. Clough, in its reply submissions, accepted that “separate ‘matters’ do not become one merely because the issues involved in them are interdependent”. The connection between the Clause 21.3 Matter and the Call Contribution Matter was, in my view, tenuous. Clough sought to use as a hook to link the matters Elecnor’s plea that it was ready, willing and able to perform its contractual obligations under the Joint Venture Deed, claiming that Elecnor was not willing and able because it disputed the Call Contribution Matter (even though that cross-claim was brought well after the commencement of proceedings by Elecnor). 
91. The mere disputing of Clough’s claim for contribution did not mean that Elecnor was not ready, willing and able to discharge its contractual obligations. As Dixon CJ said in Rawson v Hobbs (1961) 107 CLR 466 at 481; [1961] HCA 72, “[o]ne must be very careful to see that nothing but a substantial incapacity or definitive resolve or decision against doing in the future what the contract requires is counted as an absence of readiness and willingness”. So long as the disputing of the claim made is not colourable (and there was no suggestion that it was), the fact of such a dispute does not necessarily negative either the readiness, willingness or ability of the disputing party to perform the contract in question, once a disputed issue of liability has been determined. While, on Elecnor’s case, it had no such obligation, it was not put that, even if it were held to have an obligation at a point in the future to make a 50% contribution to the Trustees or Clough (see Mehmet v Benson (1965) 113 CLR 295 at 314; [1965] HCA 18 (Mehmet)), it would be unable or unwilling or unready to perform that obligation once it had been determined. 
92. Moreover, as Elecnor submitted, a plea of readiness and willingness applies only to obligations that are essential to that which is sought to be enforced, namely the acquisition of Clough’s shares. A breach of an independent obligation will not stand in the way of specific performance: Mehmet at 307-8; Green v Sommerville (1979) 141 CLR 594 at 608-9; [1979] HCA 60; Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 619-20; [1988] HCA 16. An obligation to make contribution, if in fact made good, would be independent of and unconnected with an obligation on the part of Elecnor in relation to the acquisition of Clough’s shares. Such an obligation would relate to payment for those shares at a price to be determined in the event of a dispute. 
93. Clough contended that Elecnor’s plea of being ready, willing and able was not confined to essential obligations. It should be understood, as a matter of substance, however, as so confined, being a precondition for the grant of specific performance which was the ultimate relief sought by Elecnor.
94. In any event, as the primary judge held, if there were a question about Elecnor’s readiness and willingness to perform, the Court could make the declarations sought in respect of the Clause 21.3 Matter and defer specific performance until after resolution of the arbitration just as the winding up in Tanning needed to abide the determination of the contested question of the existence of a debt in the arbitration in that case.  In the present case, an arbitration on the Call Contribution Matter would determine whether Elecnor had any such liability. 
95. Although the question is not easy of resolution, the primary judge was correct, in my view, to identify the Call Contribution Matter as a discrete controversy, capable of settlement by arbitration. It was a matter in respect of which the arbitral tribunal could award final declaratory relief and, subject to the Court’s ruling on the effect of the DOCA, award further final relief in the form of damages if appropriate.
96. It follows that the first ground of appeal should be dismissed. That logically leads to consideration of whether Elecnor had lost its right to seek a stay and referral of the Call Contribution Matter to arbitration by reason of its conduct in commencing and continuing the Clause 21.3 Matter. 

Waiver, abandonment and repudiation (NOA ground 4)

97. Clough contended that the primary judge erred by finding that the arbitration agreement was not “inoperative” on the basis of waiver.   His Honour did “not accept that by commencing proceedings of this kind, and of this content, Elecnor waived its right to arbitrate what is in substance a different matter raised in the Cross-Claim”: PJ [129]. The reference to “this content” was to his Honour’s conclusion that the Clause 21.3 Matter was not arbitrable: see [39] above. It is obvious that waiver could not arise by litigating a matter that was not arbitrable. (This question is dealt with further at [108]-[115] below). But his Honour’s finding that Elecnor had not lost its right to insist that Clough’s Call Contribution Matter be referred to arbitration did not turn solely on his conclusion that the Clause 21.3 Matter was not arbitrable.
98. The principles in relation to waiver and election have been referred to at [67]-[68] above. Elecnor could not have waived its rights to insist on arbitration of a claim the underlying facts of which it was not aware. The primary judge also made this point crisply at PJ [129]: see [42] above. No demand for contribution had been made at the time of the commencement of proceedings and a stay was sought by Elecnor expeditiously following the commencement of the Cross-Claim.
99. Had the Call Contribution Matter been characterised as involving the Clause 21.3 Matter, the analysis would have differed and Mr Hutton SC, who appeared for Elecnor, candidly accepted that, on that scenario, Elecnor must be taken to have waived its right to refer the Call Contribution Matter to arbitration. For reasons already given, however, the primary judge was correct to hold that that was a separate “matter” within the meaning of the Act and one capable of settlement by arbitration.
100. In oral argument, Ms Taylor SC, who appeared for Clough, adapted her argument on waiver by contending that, if there were no waiver at the time of the commencement of the Court proceedings because the facts giving rise to the claim for contribution were not known to Elecnor at that point in time, the waiver arose from the continuation of the proceedings and the claim for specific performance after the claim for contribution had been made and raised by way of cross-claim. This argument was well met, in my view, by reference to the statement in Zhang that waiver requires “the deliberate, intentional and unequivocal release or abandonment of the right”: see [67] above. In the present case, Elecnor’s Notice of Motion seeking a stay of the Cross-Claim was filed very shortly after the Cross-Claim had been filed. By that Notice of Motion, Elecnor was signalling the antithesis of any abandonment of its right to refer a matter to arbitration; to the contrary, the Notice of Motion entailed the assertion of that contractual right. As such, there was no deliberate, intentional and unequivocal release or abandonment of the right to refer the Call Contribution Matter to arbitration.
101. Turning from waiver to repudiation, as with waiver, this argument does not pass first base if the Clause 21.3 Matter was not arbitrable because the commencement of proceedings involving a matter that is not arbitrable says nothing about a party’s attitude to its right to arbitrate arbitrable matters. The question of arbitrability is dealt with at [108]-[115] below. What follows necessarily presupposes that the primary judge was incorrect in his conclusion that the Clause 21.3 Matter was not arbitrable.
102. On this footing, Clough’s submission was that “[i]n choosing to litigate disputes going to its ability to acquire Clough’s Participating Interest, Elecnor repudiated the arbitration agreement, and that repudiation was accepted by the applicants filing their Commercial List Response. It follows that the agreement was rendered inoperative by repudiation”.
103. The parties were agreed as to the principles of repudiation, including that: 
104. repudiation is a “serious matter and is not to be lightly inferred”: Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 32; [1985] HCA 14; 
105. repudiation requires “conduct of a party which evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party’s obligations”: Koompahtoo at [44]; and
106. the same principles apply to an arbitration agreement which is regarded as a self-contained contract which is collateral to the main agreement in which it appears.
107. The primary judge rejected the repudiation case for reasons set out at PJ [128]: see [42] above. Elecnor emphasised that one could not discern an intention no longer to be bound by the arbitration agreement in circumstances where, even if the Clause 21.3 Matter was arbitrable (contrary to the primary judge’s finding), it was not self-evidently so, especially given that relief was sought against the Trustees who were not parties to the Joint Venture Deed, in circumstances where those non-signatories disavowed any adoption of the Joint Venture Deed on their part in all of their capacities and where the purported assignment from Clough to them under the DOCA was being challenged.
108. Reference should be had in this regard to pre-litigation correspondence between the parties set out at PJ [41]-[42]:

“On 1 July 2024, Elecnor made the Offer to Purchase Clough’s interest in the joint venture for $1.00, on the basis that Clough had failed to remedy the First and Second Material Defaults. Elecnor also put in issue the efficacy of any purported transfer or assignment of Clough’s rights in respect of the JV Deed to the Trustees on the basis that neither Elecnor nor Transgrid had consented to the transfer; a requirement under the terms of the JV Deed and the EPC Contract.

The Trustees and Clough responded on 8 July 2024:

“[T]he DOCA which effected the transfer [of Clough’s rights in respect of the JV Deed to the Trustees] is binding on all creditors of Clough including [Elecnor] pursuant to the Corporations Act 2001 (Cth). Nevertheless, for the avoidance of doubt, we confirm that we write this letter on behalf of the Trustees and on behalf of Clough.

In writing this letter, we confirm that:

1   We have not, in our capacity as either administrators or as trustees of the Creditors’ Trust adopted the [JV] Deed to date;

2   In sending this letter, the Trustees do not adopt the Joint Venture Agreement; and

3   We reserve all of the Trustees’ and Clough’s rights including our rights under the DOCA and the Creditors’ Trust Deed, including in respect of the matters set out in your Letter.

The Trustees and Clough do not accept:

1   [Elecnor’s] entitlement to make the offer purportedly contained in the Letter; and

2   the validity of the purported offer for the purposes of clause 21.3 of the [JV] Deed.

…

In the alternative, should the purported offer be valid for any reason, we confirm, on behalf of the Trustees and Clough that:

1   the offer contained in the Letter is rejected in its entirety; and

2   in the alternative, the Offer Price is rejected for the purposes of clause 21.3(a)(iv)(B)(II) of the [JV] Deed”. (Emphasis added.)

106. In my view, in the light of this correspondence, there is great merit in Elecnor’s argument that its commencement of court proceedings could not have been construed as an abandonment for all purposes of its right to refer arbitrable matters to arbitration or an unequivocal renunciation of the arbitration agreement constituted by cl 23.3 of the Joint Venture Deed. I accept Elecnor’s submission that a “party commencing proceedings in these circumstances, even if the claims are in fact covered by the arbitration agreement, does not objectively evince any intention to no longer be bound by the arbitration agreement for all disputes in the future”.
107. For these reasons, ground 4 of the draft Notice of Appeal should be dismissed. My conclusion in relation to repudiation obviates the need to deal with the second and third grounds of Elecnor’s Notice of Contention.

Arbitrability (NOA ground 2)

108. Clough challenged the primary judge’s finding that the Clause 21.3 Matter was non-arbitrable because it “invokes and involves questions as to the efficacy of the DOCA and the provisions of Pt 5.3A of the Corporations Act”, which “may affect the rights of creditors” (PJ [110]).
109. As has already been explained, and given that no permanent stay and referral to arbitration is sought of the Clause 21.3 Matter, the question of the correctness of the primary judge’s decision as to arbitrability would only have ongoing significance if I had reached a different conclusion as to waiver and repudiation. As already explained (and accepted by Clough), the waiver and repudiation arguments would not have been able to be made at all if the Clause 21.3 Matter was not arbitrable. Therefore, what follows is not strictly necessary to be dealt with but, consistent with Kuru v State of New South Wales (2008) 236 CLR 1; [2008] HCA 26 at [12] and Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49 at [8], I will do so briefly, albeit relatively succinctly. 
110. The primary judge’s reasons for finding that the Clause 21.3 Matter was not capable of settlement by arbitration were contained in PJ [110], reproduced at [39] above. His Honour referred to Siemens at [38], Comandate at [200] and ACD Tridon Inc v Tridon Australia Pty Ltd [2002] NSWSC 896 at [189]-[194] in reaching that conclusion. In Siemens at [38], Ball J observed that situations where a matter may not be capable of settlement by arbitration:

“may be apparent from the nature of the subject matter or the way that it is dealt with by the legislature that it is appropriate for disputes concerning that subject matter to be resolved by the courts, or specialist tribunals established for that purpose. What normally distinguishes this class of case is the existence of some legitimate public interest in seeing that disputes of the type in question are resolved by public institutions or in accordance with structures that are established by parliament rather than institutions and structures established by the parties: see Comandate Marine Corp at [200] per Allsop J. Examples include proceedings to recover fines, proceedings relating to insolvency and competition law claims: see ACD Tridon v Tridon Australia at [189]-[194] per Austin J; Comandate Marine Corp at [200] per Allsop J.” 

111. Elecnor’s contention, consistent with the primary judge’s finding, was that the Clause 21.3 Matter was concerned principally with the effect of the DOCA, whether provisions of both the Joint Venture Deed and the EPC Contract affect the operation of the DOCA or the Trustees’ rights thereunder, and whether Elecnor’s exercise of its rights under cl 21.3 of the Joint Venture Deed comprised a “claim” within the meaning of s 444D(1) of the Corporations Act 2001 (Cth) (Corporations Act) that was extinguished and released by the DOCA or otherwise affected by s 451E of that Act.
112. The centrality of the DOCA and the Corporations Act to the Clause 21.3 Matter may be seen in Part B of Clough’s Commercial List Response which required the specification of “Issues Likely to Arise”. Those issues identified by Clough included the following:

“●   Whether the provision as to assignment in the joint venture deed and/or contrAct with Transgrid:

(a)   purports to prohibit dealings with rights by a deed of company arrangement;

(b)   could prevent rights to payment from being available to pay creditors’ claims in accordance with the terms of a deed of company arrangement;

….

●   Whether the appointment of administrators is an Act or event analogous or having a similar effect to a person being bankrupt or insolvent, going into liquidation, or being wound-up or dissolved within the meaning of the contrAct with Transgrid.

●   Whether any right of Elecnor:

(a)   to issue a notice of default based on Clough’s insolvency and/or the appointment of administrators to Clough, and/or

(b)   to make an offer to purchase based on a failure to remedy Clough’s nonprovision of security, Clough’s insolvency and/or the appointment of administrators to Clough,

could be enforced notwithstanding s 451E of the Corporations Act 2001 (Cth).

●   Whether any right of Elecnor to make an offer to purchase based on a failure to remedy a material default was extinguished and released by the deed of company arrangement.”

113. As Gleeson CJ, Gaudron, Gummow and Hayne JJ explained in MYT Engineering Pty Ltd v Mulcon Pty Ltd (1999) 195 CLR 636; [1999] HCA 24 at [25] (footnotes omitted):

“a deed of company arrangement is more than a set of promises between those who are parties to it. (The only essential parties to a deed of company arrangement are the company and the deed administrator.) First, it is a document that, on execution, effects a change in status of the company – from a company under administration to a company subject to a deed of company arrangement. Secondly, it is a document that contains terms that bind all creditors of the company ‘so far as concerns claims arising on or before the day specified in the deed under paragraph 444A(4)(i)’. Those obligations stem from the combined operation of the deed of company arrangement and the Law, not from any contractual bargain between the persons bound, and are imposed on all creditors – not just those who voted in favour of any composition or moratorium reflected in the deed of company arrangement.” 

114. A Deed of Company Arrangement operates as a form of statutory instrument which has binding effect upon the persons specified in s 444D (creditors) and s 444G (officers and members) of the Corporations Act: Goldus Pty Ltd (Subject to a Deed of Company Arrangement) v Cummins (No 4) [2021] FCA 1095 at [183]; see also Reed Constructions Australia Ltd v DM Fabrications Pty Ltd [2007] NSWSC 1190 at [20]‑[24]. In Mighty River International Ltd v Hughes (2018) 265 CLR 480; [2018] HCA 38, Gageler CJ referred at [64]-[65] to a range of provisions provided for by Pt 5.3A of the Corporations Act which empowered the Court to make orders on the application of a creditor of the company, the company itself, or the Australian Securities and Investments Commission in the context of a deed of company arrangement. The scope for the Court to make orders in relation to Part 5.3A under both ss 447A and 447B highlights the distinctive nature of the deed of company arrangement regime as does the leave requirement imposed by s 440D(1) of the Corporations Act in relation to the commencement of proceedings. 
115. Not every matter involving the Corporations Act will be incapable of settlement by arbitration: see the lengthy discussion of this matter by Foster J in WDR Delaware at [124]-[164] and the consideration of the question by Warren J in A Best Floor Sanding Pty Ltd v Skyer Australia Pty Ltd [1999] VSC 170 at [13]-[18]. In the present case, however, the primary judge was correct in my view to hold that the Clause 21.3 Matter was not arbitrable. The issues raised by that matter were very different from those raised by the Call Contribution Matter which related directly to the Joint Venture Deed and did not involve a construction of the DOCA or consideration of the operation of the Corporations Act in a way that may affect third party creditors.

Trustees claiming “through or under” (NOA ground 3 and NOC ground 1)

116. The primary judge relevantly held that:

“[121]  There is a question as to whether the Trustees are claiming ‘through or under’ Clough in relation to the Clause 21.3 Matter, within the meaning of s 7(4) of the Act, such that it arises in proceedings between ‘parties’ to the arbitration agreement.

…

[123]   Here, the Trustees deny that they have adopted the JV Deed. Their List Response puts in issue matters arguably going beyond those which are available to Clough, such as defences in relation to the effect of the DOCA on the transfer of Clough’s rights and interests and the operation of provisions of the Corporations Act. These matters suggest that the Trustees are not claiming ‘through or under’ Clough in relation to the Clause 21.3 Matter. As I have concluded that the Clause 21.3 Matter is not capable of settlement by arbitration, it is not necessary for me to resolve this.”

117. Both Clough and Elecnor challenged the primary judge’s finding that it was “not necessary” to resolve the issue as to whether the Trustees were claiming ‘through or under” Clough in respect of the compulsory acquisition dispute.  It should be plain enough from what has already been written that his Honour did not err in this regard.
118. That having been said, if the Trustees’ defence to Elecnor’s claim in relation to the Clause 21.3 Matter was not derivative in the sense of being made through or under Clough, within the meaning of s 7(4) of the Act, that would supply a further reason why the Clause 21.3 Matter could not have been stayed as against the Trustees and would strengthen Elecnor’s case on waiver and repudiation. In this context, Mr Hutton SC submitted by reference to the Trustees’ defence that:

“…Yes, 28(c). This is our offer to purchase, and at 28(c), it’s said that it can’t be purchased from Clough, because they’ve been transferred by the DOCA to the trustees, and that, really, is the nub of the issue. Now, we say that, to the extent the trustees are in this claim, they are not defending through or under, because, in saying that, ‘We actually have the joint venture interest’, they’re not asserting any right of Clough. What they’re saying is that, ‘We are not Clough, we have taken something from Clough, and therefore you can’t get it from us by exercising your rights against Clough’. So they’re very much taking a stand on their own ground as trustees of the Creditors’ Trust, who it is said have taken receipt of the joint venture interest.”

119. I would accept this argument. At least this aspect of the Trustees’ defence turns on the effect of the DOCA and the operation of the Corporations Act and not on any defence that may have been available to the Trustees “through or under” Clough. By way of contrast, in seeking contribution from Elecnor under the Cross-Claim, the Trustees were plainly acting through or under Clough.
120. I would dismiss ground 3 of the draft Notice of Appeal and, had it been necessary to deal with this issue, I would have upheld ground 1 of the Notice of Contention.

Discretionary stay (NOA ground 5)

121. Clough argued that the primary judge erred in finding at PJ [132]-[135] that, if required to stay the Call Contribution Matter and refer it to arbitration pursuant to s 7(2) of the Act, there was “no reason” why the Clause 21.3 Matter should be stayed pending the determination of that arbitration.  His Honour justified this conclusion on the basis that “[r]esolution of the controversy between the parties as to the acquisition of Clough’s interest will not depend on the outcome of the arbitration of the Trustees’ claim for contribution for the call on Clough’s security”: PJ [135].  His Honour recognised, however, that the prayer for specific performance may have to abide the outcome of the arbitration, if Elecnor were found liable to make contribution to Clough or the Trustees and refused to do so.
122. As explained at [44] of these reasons, the decision whether to impose a condition regulating the sequencing of the hearing of the arbitration and the court proceedings was essentially a discretionary case management decision. No error of principle has been shown vitiating the primary judge’s exercise of discretion in respect of it. Leave to appeal should be refused in respect of this ground of appeal.

Conclusion

123. For the above reasons, although I would grant leave to appeal and cross-appeal other than in respect of ground 5 of the draft Notice of Appeal, I would dismiss both the appeal and cross-appeal.
124. As a matter of substance, the bulk of the hearing in the Court of Appeal involved Clough’s appeal. I would order that Clough and the Trustees pay 90% of Elecnor’s costs of the appeal and that there be no order as to costs in respect of the Cross-Appeal.
125. WARD P: I agree with Bell CJ. 
126. FREE JA: I agree with the Chief Justice.  

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