Court says to avoid commercial nonsense when interpreting dispute resolution clauses

In Mineralogy Pty Ltd v Adani Mining Pty Ltd [2022] QSC 154, Justice Freeburn held that the parties to a dispute were required to resolve their dispute via the contractually agreed expert determination clause.

In his decision, His Honour provided insight into how to interpret dispute resolution clauses and the court's attitude to parties attempting to circumvent these clauses.

Background

Adani Mining Pty Ltd (Adani) agreed to pay royalties to Mineralogy Pty Ltd (Mineralogy) for mining a particular mining tenement (Royalty Deed).

A dispute arose between the parties when Adani sought funding from certain financiers to assist it with developing the mining tenement. The financiers required security. However, the Royalty Deed required that Adani not agree to encumber the tenement unless the financiers execute a priority deed which preserves Mineralogy's rights. There was some correspondence between the parties about the priority deed, however Mineralogy