The Victorian Supreme Court decision of WTE Co-Generation
& Anor V RCR Energy Pty Ltd & Anor held that the
dispute resolution clause in many standard construction contracts
is uncertain and unenforceable.
Background
WTE Co-Generation (WTE) contracted with RCR Energy Pty Ltd (RCR)
for the supply of a co-generation facility. WTE claimed RCR had
breached the contract, issued a notice to terminate and commenced
proceedings in relation to the dispute.
The issue
The contract contained a dispute resolution clause that
stated:
"Within 7 days after receiving a notice of
dispute, the parties shall confer at least in the presence of the
Superintendent. In the event the parties have not resolved the
dispute then within a further 7 days a senior executive
representing each of the parties must meet to attempt to resolve
the dispute or to agree on methods of doing so. At every such
conference each party shall be represented by a person having
authority to agree to such
