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ARTICLE · 18 MAY 2016

Administrators use general power under s 447A to stay a commercial arbitration

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The Court used its general power to extend the voluntary administration moratorium period to a commercial arbitration.

AustraliaInsolvency/Bankruptcy/Re-Structuring
David Abernethy
David Abernethy
Jason Salman
Jason Salman
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This week's TGIF considers the decision of In the matter of THO Services Limited [2016] NSWSC 509 in which the Court exercised its general power to extend the voluntary administration moratorium period to a commercial arbitration.

Background

THO Services Limited (the Company) entered into a contract with the Commonwealth of Australia (the Commonwealth) for the construction of a fitness complex. The contract provided for any dispute between the parties to be referred to arbitration. The Company carried out the works and the Commonwealth subsequently notified the Company of a number of alleged defects. 

In September 2015, the Commonwealth commenced arbitration proceedings and claimed damages in excess of $12 million. In January 2016, the Company appointed voluntary administrators pursuant to the Corporations Act 2001 (Cth) (the Act).

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