Gorgon project payment dispute ongoing

CBI Contractors and Kentz have lost their appeal over a Supreme Court ruling in favour of Chevron, relating to the parties’ contract for work on the Gorgon gas project.

A joint venture between US company CBI Constructors and Irish company Kentz, named CKJV, was awarded a $2.1 billion contract for planned work on the Gorgon project in 2011.

The Supreme Court of Western Australia court of appeal today upheld Justice Kenneth Martin’s decision to set aside an arbitration award between the parties.

CKJV demanded payment in excess of $130 million from Chevron but the oil and gas giant counter-claimed that the contractor had overcharged by more than $400 million, according to Justice Martin’s judgment in September 2021.

A three-person arbitral tribunal has published two interim awards, including issuing 29 procedural orders for major hearings in Perth conducted in 2018 and 2020.

Chevron sought to set aside an arbitral award dated September 4, 2020, which was related to interpretation of the terms of the contract.

CKJV appealed the Justice Martin’s decision, claiming he erred in law in setting aside the arbitration award.

The WA Court of Appeal upheld Justice Martin’s decision today, finding that there was nothing “highly unusual” for a court intervening where findings were made in a jurisdiction not properly analysed.

“In this case, and in any event, the majority of the tribunal appears, with respect, to have overlooked or mischaracterised the effect of many of the pleadings, particulars and submissions and the procedural orders leading up to the first hearing,” today’s judgment said.

The bench also noted the general rule was that an award made by an arbitrator was final and conclusive but dependant on the authority given by the parties involved.