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Pora v Hull [2009] PGNC 120; N3729 (20 August 2009)

N3729

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS No. 422 OF 2009

BETWEEN:

PAUL PILIMBO PORA
Plaintiff

AND:

LARRY HULL
First Defendant

AARLIE HULL
Second Defendant

DEAN HULL
Third Defendant

Mt Hagen: David, J
2009: 15 & 20 August

PRACTICE AND PROCEDURE – application for interlocutory injunction – substantive claim based on sale of shares agreement - arbitration clause – clause mandatory - no waiver – parties to agreement must submit to arbitration - application refused.

COMPANY LAW – derivative action – nature of action - leave required before commencing action – s.143 Companies Act 1997- personal action - alleged breach of a fundamental term of sale of shares agreement – leave not required.

Cases cited:
Papua New Guinea Cases

Delta Constructions Pty Ltd v. The Administration of Papua & New Guinea [1965-66] PNGLR 381
Mauga Logging Company Pty Ltd v. Okura Trading Co. Ltd [1978] PNGLR 259.
Olympic Stationery Ltd v The Independent State of Papua New Guinea (2001) N2194
Niugini Civil and Petroleum Ltd v West New Britain Development Corporation Ltd (2005) N2909
Wara v. Kipa (2008) N3402

Overseas cases cited:

Hodgson v. Railway Passengers Assurance Co. [1882] UKLawRpKQB 108; [1882] 9 QBD 188
Willesford v. Watson [1873] 8 Ch. 473

Treatise cited:
Ford’s Principles of Corporations Law, 10th Edition

Counsel:

M.P. Tamutai, for the Plaintiff
KJ Peri, for the Defendants

RULING ON MOTION

20 August, 2009

1. DAVID, J: INTRODUCTION: This is an application on notice for an interlocutory injunction against the defendants which the Plaintiff says is necessary to preserve the status quo of the parties as there is chaos at the moment. As an interim measure, the Plaintiff is seeking, until further order, an interim injunction to restrain the defendants, their agents or servants or associates be restrained from harassing, intimidating, threatening or interfering with the Plaintiffs management of the company called Highlands Arabicas Ltd (Arabicas).

2. The application is moved pursuant to a Notice of Motion filed on 4 August 2009 and is supported by an Affidavit of Paul Pilimbo Pora sworn on 31 July 2009 and filed on 4 August 2009 and an Undertaking as to Damages given by the Plaintiff on 31 July 2009 and filed on 4 August 2009.

3. The defendants contest the application. They have not filed any responding affidavits.

4. I gave a brief ruling this afternoon refusing the application and undertook to give my full reasons later. This I now do.

BACKGROUND

5. In his Originating Summons filed on 4 August 2009, the Plaintiff claims a number of principal orders. These are:-

1. An order in the nature of a declaration that he is 51% shareholder of Arabicas while the Second and Third Defendants hold 49%.

2. An order in the nature of a declaration that he is the sole manager of Arabicas until the end of year 2014.

3. An order in the nature of a permanent injunction that the defendants, their agents or servants or associates be restrained from harassing, intimidating, threatening or interfering with his management of Arabicas.

6. The Plaintiff claims that he is a coffee breeder.

7. The Plaintiff also claims that he holds a bachelor’s degree in Science and master’s degrees in Plant Breeding & Crop Improvement and Applied Genetics. He says that the bachelor’s degree was attained from the University of Technology, Lae while the master’s degrees were attained from the University of Birmingham in the United Kingdom.

8. Arabicas was incorporated on 18 September 2002 under the Companies Act, 1997 and Certificate of Incorporation No.1-47367 was issued by the Registrar of Companies. The Plaintiff was initially the beneficial owner of 100% of the issued shares numbering 100 in the capital of Arabicas. According to a Sale of Shares Agreement entered into between the Plaintiff as vendor and the Second Defendant as purchaser dated 29 March 2006 (the Shares Agreement) 49 % of the issued shares numbering 49 was sold to the Second Defendant, Aarlie Hull.

9. The Current Extract for Arabicas obtained from the Office of the Registrar of Companies on 29 June 2009 (the Current Extract for Arabicas) (annexure "D" of the Plaintiffs Affidavit) shows that as at 28 February 2007 the shareholding of Arabicas was held by the Plaintiff, Paul Pilimbo Pora as to 51% (51 ordinary shares), Second Defendant, Aarlie Hull as to 39% (39 ordinary shares) and the Third Defendant, Dean Hull as to 10% (10 ordinary shares). According to the Current Extract for Arabicas, the directors of Arabicas are the Plaintiff and the Second and Third Defendants, but there is no information about who the company secretary is.

10. Apart from the Current Extract for Arabicas and the Affidavit evidence of the Plaintiff indicating that of the 49 shares purchased by the Second Defendant, 10 of them were in fact transferred to the Third Defendant, there is no other evidence, documentary or otherwise, to confirm how he acquired those shares. I think the only possible explanation might be that he may have acquired those shares and become a director of Arabicas as a result of being nominated by the Second Defendant to hold such shares and become a director in accordance with Clause 4 (a)(ii) and 4 (b) of the Shares Agreement. It is convenient to set out those terms and I do so below:-

"On the settlement date:-

a) The Vendor shall deliver to the Purchaser –

(i) .................

(ii) duly executed and registrable (subject only to the payment of stamp duty thereon) transfers of the Shares in favour of the Purchaser or as the Purchaser may nominate in writing not less than seven (7) days prior to the settlement date; ....

b) The Vendor will:

(i) subject to the Purchaser paying the stamp duty thereon use the said share transfers to be duly registered by the Company on settlement.

(ii) Procure the appointment to the Board of Directors such persons as may be nominated by the Purchaser...."

11. The First Defendant is the husband of the Second Defendant, and the father of the Third Defendant. According to the Plaintiff; the defendants are members of the Nazarene denomination; the First Defendant is an Orthopaedic Surgeon who owns a private medical practice which he operates in Centralia, Washington in the United States of America; and that since 1990, the First Defendant has been making regular visits to the Nazarene Hospital at Kudjip in the Western Highlands Province.

12. The Plaintiff claims that the present dispute is over the 51 issued shares currently held by him which the Second and Third Defendants want relinquished and transferred to them so that they can have total control of the company. He says that he was forced to sign an agreement (annexure "E" of the Plaintiffs Affidavit) on 17 March 2009 to surrender his shares in exchange for a piece of undeveloped land described as Allotments 7A and 7B Section 30 Mt. Hagen which the defendants claim belongs to Arabicas when in actual fact it is owned by a company with whose sole director namely William Kolgpi he was directly negotiating to buy (annexures "F" to "I" of the Plaintiffs Affidavit). The Plaintiff states that this is because the defendants allege that there has been mismanagement by the Plaintiff and loss incurred of between K3 million to K5 million by the defendants in investments they have put into Arabicas.

13. The Plaintiff concedes that while the defendants have injected some money into the operations of Arabicas, there is no lien over his shares because he did not personally borrow any money from the defendants. The money was given to Arabicas, claims the Plaintiff.

14. The Plaintiff also claims that when he refused to sign a formal Share Transfer to give effect to the agreement of 17 March 2009, he was given a Sale of Shares Agreement (annexure "J" of the Plaintiffs Affidavit) to dispose of those 51 shares to the Second and Third Defendants, but he also refused to sign.

15. The Plaintiff alleges that this has resulted in the interference by the defendants in the general management and operations of Arabicas. He cites as examples; pages of the website of Arabicas portraying the profile of Arabicas as containing false and misleading information (annexure "K" of the Plaintiffs Affidavit); memoranda caused to be issued by and on behalf of the defendants on 20 May 2009 and 5 June 2009 advising workers that the Plaintiff was no longer in charge (annexures "L1" and "L2" of the Plaintiffs Affidavit); and there have been a number of confrontations between the First Defendant and the Plaintiff and his wife since the return of the First Defendant to the country on 3 July 2009.

16. The Plaintiff further claims that the defendants operate a company called New Guinea Traders LLC (New Guinea Traders) in the United States of America in which he holds no share. He deposes at paragraph 47 of his Affidavit that the defendants offered him 49% of New Guinea Traders provided he reciprocated with the giving of 49% of Arabicas to the defendants, but while he has met his part of the bargain, the defendants have not.

17. The Plaintiff also claims that New Guinea Traders has benefited immensely from direct sales of coffee to it by Arabicas at FOB prices via Lae which it then resells there at its own mark up prices. He claims that New Guinea Traders then remits on a fortnightly basis to Arabicas account operated at Bank of South Pacific, Mt. Hagen monies for operational costs less interest for monies advanced to Arabicas.

18. As can be seen, the dispute in the present case concerns the control and management of Arabicas. The substantive reliefs sought by the Plaintiff appear to be centred around the construction and application of Clause 8 of the Shares Agreement (Special Clauses) particularly sub-clauses (a) and (b) and the purchase and transfer of 49 ordinary shares to the Second and Third Defendants facilitated by the Shares Agreement hence, I must be careful not to venture into any discussion of the merits of the substantive claim.

19. It is also convenient to set out the relevant terms of Clause 8 (a) and (b) which I do below:-

"The Vendor and Purchaser covenant and agree with each other as follows:

(a) This agreement will run for 8 years expiring on 2014.

(b) The Vendor shall solely manage the Company during this period..."

ISSUES

20. The major issues are:-

1. Whether these proceedings are in the nature of a derivative action;

2. Whether the arbitration clause makes it mandatory for the dispute to be referred to arbitration;

3. Whether a case for the issue of an interlocutory injunction has been made out.

ANALYSIS OF ISSUES, LAW AND EVIDENCE

Whether these proceedings are in the nature of a derivative action

21. Mr. Peri of counsel for the defendants submitted that since these proceedings are in the nature of a derivative action, it was imperative for the Plaintiff to seek leave under s.143 of the Companies Act, 1997 prior to commencing this action.

22. Mr. Tamutai of counsel for the Plaintiff disagreed. He submitted that this is a personal action in which the Plaintiff is seeking to enforce a fundamental term of the Shares Agreement which he claims makes him the sole manager for 8 years since the signing of the Shares Agreement and therefore leave was not required.

23. In a derivative action, leave is required before proceedings are instituted. It is a mandatory requirement: Wara v. Kipa (2008) N3402. The relevant provision is s.143 of the Companies Act, 1997 which states:-

"143. Derivative actions

(1) Subject to Subsection (3), the Court may, on the application of a shareholder or director of a company, grant leave to that shareholder or director to—

(a) bring proceedings in the name and on behalf of the company or any related company; or

(b) intervene in proceedings to which the company or any related company is a party for the purpose of continuing, defending, or discontinuing the proceedings on behalf of the company or related company, as the case may be.

(2) Without limiting Subsection (1), in determining whether to grant leave under that subsection, the Court shall have regard to—

(a) the likelihood of the proceedings succeeding; and

(b) the costs of the proceedings in relation to the relief likely to be obtained; and

(c) any action already taken by the company or related company to obtain relief; and

(d) the interests of the company or related company in the proceedings being commenced, continued, defended, or discontinued, as the case may be.

(3) Leave to bring proceedings or intervene in proceedings may be granted under Subsection (1), only where the Court is satisfied that either—

(a) the company or related company does not intend to bring, diligently continue or defend, or discontinue the proceedings, as the case may be; or

(b) it is in the interests of the company or related company that the conduct of the proceedings should not be left to the directors or to the determination of the shareholders as a whole.

(4) Notice of the application shall be served on the company or related company.

(5) The company or related company—

(a) may appear and be heard; and

(b) shall inform the Court, whether or not it intends to bring, continue, defend, or discontinue the proceedings, as the case may be.

(6) Except as provided in this section, a shareholder is not entitled to bring or intervene in any proceedings in the name of, or on behalf of, a company or a related company."

24. The learned authors of the textbook Ford’s Principles of Corporations Law, 10th Edition, state the nature of a derivative action as follows:-

"An action is derivative when the person or persons who bring the action rely, not on a cause of action belonging to them personally, but on one belonging to another person. It is an exception to the principle that one person cannot, in general, sue to obtain relief on behalf of another person who has been injured by a wrongdoer. In company law a derivative action is one brought by a member or members based on a cause of action vested in the company alone rather than a cause of action belonging to the plaintiff or plaintiffs personally."(my emphasis)

25. I accept Mr. Tamutai’s submission. The Plaintiff who is a shareholder and a director is not seeking to bring proceedings in the name and on behalf of Arabicas for a cause of action which is vested in it and for which it alone can sue except if permitted through a derivative action. His action is personal in nature. Subject to my other remarks below, the proceedings are in order.

Whether the arbitration clause makes it mandatory for the dispute to be referred to arbitration

26. Mr. Peri submitted that the Plaintiffs application should not be entertained or be refused because the Plaintiff must first refer the dispute to arbitration pursuant to Clause 10 of the Shares Agreement.

27. Mr. Tamutai on the other hand submitted that whether the dispute should be referred to arbitration or not was a matter that should be raised and dealt with at the substantive hearing. This was an exceptional case, counsel said. Right now, he said there was a chaotic situation caused by the actions of the defendants which the Court should immediately address and deal with in the Plaintiffs favour in the exercise of the inherent power vested in it under s.155 (4) of the Constitution with a view to dispensing justice as the Court was required to do under s.158 (2) of the Constitution without being impeded by the cloak of legalism.

28. Mr. Tamutai also submitted that the arbitration clause was complied with when a crisis meeting involving representatives of the parties including their lawyers was held at the offices of Warner Shand lawyers on Friday, 17 July 2009 chaired by Mr. Peri as a result of the Plaintiff stopping a shipment of 2 containers. According to the Plaintiffs Affidavit evidence, at the meeting, the First Defendant and his lawyer undertook to do a proposal to solve the impasse and this resulted in him advising that he would order the release of the containers. However, the Plaintiff says that no proposal has been given to him up to now and the First Defendant was continuing to meddle in the management of Arabicas particularly at Madan Plantation.

29. The term "submission" is defined by s.1 of Arbitration Act. It means:-

"a written agreement to submit present or future differences to arbitration, whether or not an arbitrator is named in the submission."

30. This means that the Shares Agreement is a "submission" for the purposes of the Arbitration Act.

31. Clause 10 of the Shares Agreement (Arbitration) states:-

"Neither party hereto shall be entitled to commence or maintain any action in respect of any dispute concerning the construction of this agreement or the intention of the parties as reflected in the provisions hereof without first referring such dispute to arbitration by a single arbitrator appointed and acting in accordance with the Arbitration Act, Chapter 146 of the Revised Laws of Papua New Guinea."

32. Section 2 of the Arbitration Act provides that unless a contrary intention is expressed in the submission, a submission is irrevocable, except by leave of the Court. The grammar and syntax used in Clause 10 is in mandatory terms. The clause, in my view, is clear and unambiguous. It is an expression of agreement by the parties to it to submit present or future differences to arbitration and the submission is irrevocable except by leave. The Plaintiff instituted these proceedings without seeking leave. The parties to the Shares Agreement namely, the Plaintiff and the Second Defendant, must therefore take their dispute to arbitration for determination as was mutually agreed unless the Second Defendant has done anything to prevent her from abiding by her contractual agreement: Mauga Logging Company Pty Ltd v. Okura Trading Co. Ltd [1978] PNGLR 259. It is for the Plaintiff here to demonstrate why the dispute should not go to arbitration: Delta Constructions Pty Ltd v. The Administration of Papua & New Guinea [1965-66] PNGLR 381.

33. Has the Second Defendant done anything to prevent her from exercising her right to arbitration? There is no application before the Court to stay the proceedings which a party to a submission is permitted to make under s.4 of the Arbitration Act, but I think some if not all of the considerations governing the grant or not of such applications should be taken into account in determining that question.

34. Eight considerations were suggested by Justice Cannings in Niugini Civil and Petroleum Ltd v. West New Britain Development Corporation Ltd (2005) N2909 to be taken into account when deciding how the discretion of the Court was to be exercised. These are:-

1. Has the application been made after the applicant’s appearance in the legal proceedings and before delivering any pleadings or taking any other steps in the proceedings?

2. Is the Court satisfied that there is no sufficient reason why the matter should not be referred in accordance with the submission?

3. Was the applicant ready and willing to do all things necessary for the proper conduct of the arbitration at the time when the legal proceedings were commenced?

4. Does the applicant still remain ready and willing to do all things necessary for the proper conduct of the arbitration?

5. Does the arbitration clause make it mandatory for disputes to be referred to arbitration?

6. Is the application for a stay of proceedings brought within a reasonable time after commencement of the legal proceedings?

7. Has the applicant not waived its right to arbitration?

8. Has the respondent to the application – which will usually be the plaintiff in the court proceedings – rushed to the court rather than exploiting the arbitration provisions of the contract?

35. I adopt those considerations and apply them below.

36. Has the application been made after the applicant’s appearance in the legal proceedings and before delivering any pleadings or taking any other steps in the proceedings? As I have stated earlier, there is no application for stay. What is relevant here is that the Second Defendant, apart from contesting the Plaintiffs application with the First and Third Defendants, has not taken any other step in the proceedings. The Second Defendant’s conduct does not suggest that she has acquiesced in these proceedings.

37. Is the Court satisfied that there is no sufficient reason why the matter should not be referred in accordance with the submission?

Immediately upon becoming aware of these proceedings and the Plaintiffs application, the Second Defendant together with the First and Third Defendants instructed counsel to register her objection to these proceedings and to contest the application arguing, inter alia, that the dispute should go to arbitration for determination pursuant to Clause 10 of the Shares Agreement. These proceedings were filed on 4 August 2009 and I heard the Plaintiffs application inter partes 11 days later on 15 August 2009. The Second Defendant acted promptly. I am satisfied that there is no sufficient reason why the matter should not be referred in accordance with the submission: Hodgson v. Railway Passengers Assurance Co. [1882] UKLawRpKQB 108; [1882] 9 QBD 188.

38. Was the applicant ready and willing to do all things necessary for the proper conduct of the arbitration at the time when the legal proceedings were commenced? By coming to Court as soon as becoming aware of these proceedings and contesting the Plaintiffs application arguing, inter alia, that the dispute should go to arbitration for determination pursuant to Clause 10 of the Shares Agreement, that demonstrates the Second Defendant’s willingness to do all things necessary for the proper conduct of the arbitration at the time when the legal proceedings were commenced. I am not satisfied that the Plaintiff has given sufficient reasons to warrant non referral to arbitration.

39. Does the applicant still remain ready and willing to do all things necessary for the proper conduct of the arbitration? Yes.

40. Does the arbitration clause make it mandatory for disputes to be referred to arbitration? As I have observed earlier, yes. The arbitration clause makes it mandatory for any dispute between the parties to be referred to arbitration initially. This is quite apparent when the clause says ‘[n]either party hereto shall be entitled to commence or maintain any action in respect of any dispute concerning the construction of this agreement or the intention of the parties as reflected in the provisions hereof without first referring such dispute to arbitration..’

41. Is the application for a stay of proceedings brought within a reasonable time after commencement of the legal proceedings? There is no stay application, but immediately upon becoming aware of these proceedings and the Plaintiffs application, the Second Defendant together with the First and Third Defendants instructed counsel to register her objection to these proceedings and to contest the Plaintiffs application arguing, inter alia, that the dispute should go to arbitration for determination pursuant to Clause 10 of the Shares Agreement. These proceedings were filed on 4 August 2009 and I heard this matter inter partes 11 days later on 15 August 2009. The Second Defendant acted promptly.

42. Has the applicant not waived its right to arbitration? The answers to the other 7 considerations will determine this answer.

43. Has the respondent to the application – which will usually be the plaintiff in the court proceedings – rushed to the court rather than exploiting the arbitration provisions of the contract? There is evidence that a meeting involving representatives of the parties including their lawyers was held at the offices of Warner Shand lawyers on Friday, 17 July 2009. This particular meeting concerned the shipment of 2 containers which was allegedly stopped by the Plaintiff. I reject Mr. Tamutai’s submission that that was an arbitration hearing paving the way for these proceedings to be instituted because in my view that meeting was not constituted in accordance with the Arbitration Act, Chapter 46. Surely, Mr. Peri as the lawyer for the defendants could not have been appointed as the single arbitrator because obviously he had a serious conflict of interest. It is therefore not surprising that Mr. Peri has submitted that the dispute should go to arbitration for determination. I think the Plaintiff has rushed to Court without first referring his dispute to arbitration.

44. As I have observed earlier, there is no evidence before the Court to suggest that the Second Defendant has taken any step in these proceedings either expressly or by implication taking into account the overall conduct of the Second Defendant which amounts to a waiver of her right to arbitration. I therefore consider that the Plaintiff cannot maintain this action without first exhausting the arbitration procedure: Olympic Stationery Ltd v The Independent State of Papua New Guinea (2001) N2194.

45. One may wonder why the Court has decided not to entertain the Plaintiffs application, but instead refer the disputing parties to arbitration when the First and Third Defendants are not parties to the Shares Agreement. This is simply because the Plaintiffs action is primarily based on or is about the construction of the Shares Agreement.

46. The alleged interference by the First Defendant in the operations of Arabicas appears to stem from the undisputed fact that he is the husband of the Second Defendant and father of the Third Defendant who are both shareholders and directors of Arabicas and through whom he has an interest in Arabicas. The other factors that might be relevant and should be taken into calculation are the current business arrangements between Arabicas and New Guinea Traders as to the sale and purchase of coffee; the alleged K3-5 million injected into Arabicas by the defendants; the alleged mismanagement of Arabicas by the Plaintiff; and the interest shown by the defendants to buy out the remaining issued shares in Arabicas.

47. Mr. Tamutai also suggested that the acquisition of the shares by the Second and Third Defendants and the manner in which the defendants have attempted to buy out the shares held by the Plaintiff in Arabicas may have been done in contravention of the Investment Promotion Act therefore unlawful, void and improper. I find this argument untenable mainly because whilst the Plaintiff wants to enforce the Shares Agreement treating it as subsisting and valid on the one hand for the purposes of seeking the reliefs in these proceedings, he is claiming irregularity of the transactions concerning the transfer of shares on the other hand. It does not make sense. The Plaintiff needs to state his position clearly.

48. As to the allegation of impropriety in the purchase of shares by the Second and Third Defendants, Clause 11 of the Shares Agreement (Conditions Precedent) appropriately deals with that concern. It provides that the completion of the Shares Agreement was conditional upon certain approvals being obtained. This I would imagine includes approval under s.36A of the Investment Promotion Act for the Second and Third Defendants to acquire or hold shares in Arabicas. It is also convenient to set out the terms of that clause. It reads:-

"Completion of this Agreement is conditional upon all relevant approvals being obtained form any relevant governmental, semi-governmental, provincial government or municipal authority and in respect of the payment of the deferred part of the consideration set out in the Third Schedule this agreement is conditional of there not having any failure by any of the Vendor to execute this Agreement or the transfers or other documents referred to in Clause 4 herein."

49. The Plaintiff who alleges impropriety in the issue of shares to the Second and Third Defendants has produced no evidence that approvals required under the Investment Promotion Act have not been obtained.

50. As to the allegation of impropriety in the conduct of the defendants in their attempts to purchase the 51 shares held by the Plaintiff as is evidenced by the agreement of 17 March 2009 (annexure "E" of the Plaintiffs Affidavit), I think the bottom line is that none of those shares were actually acquired by any of the defendants. The draft Sale of Shares Agreement (annexure "J" of the Plaintiffs Affidavit) is evidence of that. The draft agreement also has a condition precedent clause which is in similar terms as the one in the Shares Agreement therefore if that agreement were executed, the completion of it will still have to be subject to obtaining the necessary approvals from relevant authorities including under the Investment Promotion Act.

51. If the Plaintiff feels that the Shares Agreement and the other transaction involving the transfer of shares to the Third Defendant were not genuinely mutual or were manifestly unfair, then I accept Mr. Peri’s submission that he should consider availing himself of the provisions of the Fairness of Transactions Act 1993. That legislation deals with the fairness in contracts, promises, agreements, dealings or undertakings that are economic or commercial in nature whether supported by consideration or not entered into between parties that have not been renegotiated within 3 years from the date of the original transaction.

Whether a case for the issue of an interlocutory injunction has been made out

52. As I have already decided that the dispute between the parties should be taken to arbitration for reasons I have given, it is now not necessary to discuss this issue at length. It suffices to say that a case for the issue of an interlocutory injunction has not been made out by the Plaintiff under the circumstances.

CONCLUSION

53. I reiterate that the forum chosen by the Plaintiff and the Second Defendant to resolve any dispute concerning the construction of the Shares Agreement or to ascertain the intention of the parties evidenced by the Shares Agreement through arbitration by a single arbitrator appointed in accordance with the Arbitration Act must be given effect to by the Court where the terms of the arbitration clause is in clear terms: Willesford v. Watson [1873] 8 Ch. 473 at 480 per Lord Selborne LC. That is to ensure that the parties abide by their contractual rights: Mauga Logging Company Pty Ltd. The Shares Agreement in particular Clause 10 is in clear, unambiguous and mandatory terms. The Plaintiff must therefore go with the Second Defendant to arbitration to resolve the dispute which as I have observed already also concerns the Third Defendant in his capacity as a shareholder and director and the First Defendant whose interest or connection with Arabicas is that as I have discussed already.

ORDER

54. These are the formal orders of the Court:-

1. The Plaintiffs application is refused.

2. The Plaintiff shall meet the costs of this application to be taxed if not agreed.

________________________________________

Tamutai Lawyers: Lawyers for the Plaintiff
Warner Shand Lawyers: Lawyers for the Defendants