Santos Limited V Fluor Australia Pty Ltd [2016] QSC 129

KEYWORDS: STAY PROCEEDINGS; SETTLEMENT OF DISPUTES; DISPUTE RESOLUTION CLAUSES

KEY TAKEAWAY

There is a heavy onus on a party to prove it does not have to comply with contractual dispute resolution clauses.

Background

Santos Limited (Principal) engaged Fluor Australia Pty Ltd (Contractor) on a project which involved coal seam gas being extracted, processed and exported in its liquefied form from Curtis Island near Gladstone. The contract originally commenced in early 2011. Later that year it was amended and converted into a costs reimbursable contract subject to various conditions.

At the completion of the project the Principal was concerned that the Contractor had claimed costs which were excluded under the contract and to which it was not entitled. The Contractor had claimed and been paid $5.43 billion, which was an overrun of $1.854 billion from its target budget estimate.