In the recent case of Dualcorp Pty Limited v Remo
Constructions Pty Limited  NSWSC 749, the NSW Supreme
Court confirmed that it will only enforce alternate dispute
resolution clauses if it satisfied that the proposed process is
complete and appropriate. Dualcorp Pty Ltd (Dualcorp) and Remo
Constructions Pty Ltd (Remo) entered into a contract under which
Dualcorp would carry out demolition, excavation and piling works
for Remo at a site in Five Dock in New South Wales.
Dualcorp and Remo agreed that if disputes arose between them,
they would give a notice of dispute and then submit the dispute to
a dispute resolution process consisting of three stages:
The final and binding determination of an expert that is not
subject to review (except for judicial review).
The type of disputes that the parties agreed could be the
subject of dispute resolution were:
'Any dispute, difference or Claim arising between the
parties to this Agreement, at any time as to the construction of
this Agreement or as to any matter or thing of whatsoever nature
... must be referred to a conference in the following manner
A dispute arose between the parties that included an allegation
by Dualcorp of misleading and deceptive conduct that had led them
to enter into the contract with Remo. Dualcorp commenced Supreme
Court proceedings in relation to that and other matters of dispute.
Remo asked the Court to stay the Court proceedings commenced by
Dualcorp. Remo said that the issues raised by the Court proceedings
should have been dealt with under the dispute resolution process
provided by the contract.
The Court looked at the definition of 'dispute' in the
contract and concluded that the definition was far too wide to be
enforceable. The parties had not tried to limit the dispute
resolution clause in the usual way by saying 'in relation to
disputes arising out of the contract' and the Court took the
view that the clauses were 'so imprecise, and so devoid of any
limitation... they cannot be given effect.'
The Court concluded that it should decide on issues between the
parties. The Court found that it was impossible to read the dispute
resolution clause in a way that gave it rational meaning and any
attempt to give the clause meaning would be like re-writing the
This case sends a very clear message to those involved in
preparing dispute resolution clauses to make sure that the clause
is precise and carefully prepared. While a dispute resolution
clause can be widely drafted to cover a range of possible disputes,
it must also be limited in some way to the contracting relationship
between the parties. A dispute resolution clause will only be
enforced by the Court if it provides a complete regime for the
resolution of a dispute including appropriate limits on what the
expert can deal with.
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and should not be relied on as a substitute for professional
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