Adjungbilly and canada entered into contract for adjungbilly

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Reference no: EM133936113

Question

Adjungbilly Honey Pty Ltd ("Adjungbilly") is an exporter of Australian Premium Honey to the Canadian market, the Canadian Wholesaler is Honey Canada Pty Ltd ("Canada"). Adjungbilly and Canada entered into a contract for Adjungbilly to supply Canada with 10 tons of premium grade honey. The parties agreed that the honey would be supplied between February and November 2020 in equal instalments, that is one ton a month for ten months.Other relevant terms of the contract are:a.The law of New South Wales will apply to the contract.b. In the event of a dispute between the parties the matter is to be referred to arbitration, the arbitration to be conducted at the Singapore International Arbitration Centre.c.Each party will pay their own costs of any arbitration.d. The decision of the arbitration panel is final and binding on the parties.The first six shipments of the honey were received by Canada, however in July 2020 the Canadian honey marked was flooded with cheap honey from Mexico. Canada was unable to sell the honey into the Canadian domestic market and they failed to make the payments as they fell due in July and August.Sarah the Chief Financial Officer of Adjungbilly notified her counterpart in Canada that non-payment was a fundamental breach of the contract and that Adjungbilly was terminating the contract and referring the matter to arbitration in accordance with the contract.The arbitration was conducted by three experts as required by the contract. Unknown to Adjungbilly one of the arbitrators was the brother-in-law of the Managing Director of Canada.The Arbitration found in Canada's favour. The determination of the arbitration panel was as follows:

The honey provided by Adjungbilly was not premium grade honey as required in the contract.

The Canadian honey market is saturated, imported honey is not required to meet demand. Adjungbilly has an unpaid debt to the Australian Taxation Office of 3.5 million Australian dollars. Adjungbilly is to pay the costs of Canada of the Arbitration in the sum of $1,000,000.

Adjungbilly is to pay Canada damages for breach of contract in the sum of $2,000,000.Canada, having been successful in the arbitration is seeking to recover both costs and damages.

1. Canada whether it can enforce the arbitration award in an Australian Court and the process to be followed.

2. Adjungbilly whether there are any grounds on which it can seek to have the arbitral award set aside by the Court.

Reference no: EM133936113

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