Eisenwerk Reconsidered (Twice) - A Case Note on Cargill International SA v. Peabody Australia Mining Ltd, and Wagners Nouvelle Caledonie Sarl v. Vale Inco Nouvelle Caledonie SAS

Abstract

On 2 July 1999, the Queensland Court of Appeal handed down its decision in Australian Granites Ltd v Eisenwerk Hensel Bayreuth Dipl-Ing Burkhardt GmbH. The case, which concerned the legal framework governing an international commercial arbitration, became instantly infamous for establishing the so-called Eisenwerk principle, pursuant to which the adoption of arbitration rules was said to constitute a displacement of the UNCITRAL Model Law on International Commercial Arbitration. The decision was not well received in arbitration circles, with a number of academic commentaries criticising the approach taken in Eisenwerk to the interactions and relationships between the curial law governing an arbitration, and procedural rules which may be adopted for the purposes of conducting an arbitration.More than 10 years later, in August 2010, two different courts in two different Australian states had occasion to review the Eisenwerk principle. On 11 August 2010, the New South Wales Supreme Court handed down its decision in Cargill International SA v Peabody Australia Mining Ltd. Just nine days later, the Queensland Court of Appeal itself reconsidered Eisenwerk in Wagners Nouvelle Caledonie Sarl v Vale Inco Nouvelle Caledonie SAS.This case note comprises four main parts. In Part II, the legal background to the two recent decisions (that background consisting of the Eisenwerk case and Australia’s international commercial arbitration legislation) is reviewed. In Parts III and IV, Cargill International SA and Wagners respectively are examined. Finally, in Part V, the current status of Eisenwerk in Australian law (in light of these two decisions and recent legislative reforms) is considered. Both decisions are notable not only because of the controversy surrounding the original Eisenwerk decision, but also because of the differing approach each takes to the Eisenwerk principle and the place that principle now occupies within an amended legislative regime for international commercial arbitration in Australia.