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[2025] NSWSC 1111
Supreme Court of NSW
2025-11-21
Peden J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Illawarra Basketball Club Pty Ltd v National Basketball League Pty Ltd [2025] NSWSC 1111
Hearing dates: 4 November 2025; further submissions 10 and 14 November 2025
Date of orders: 21 November 2025
Decision date: 21 November 2025
Jurisdiction: Equity - Commercial List
Before: Peden J
Decision: At [48]
Catchwords: INTERNATIONAL ARBITRATION – Arbitration – Where plaintiffs and defendant parties to licence agreements containing dispute resolution clause culminating in arbitration before the Court of Arbitration for Sport in Switzerland – Plaintiffs commence proceedings for preliminary discovery – Whether proceedings ought be stayed – Whether a preliminary discovery dispute a “matter … capable of settlement by arbitration” – Proceedings not subject to s 7(2) International Arbitration Act 1974 (Cth)
INTERNATIONAL ARBITRATION – Arbitration – Stay of proceedings – Existence of inherent power to stay proceedings in favour of arbitration
CONTRACT – Covenant not to sue – Power to stay proceedings brought in breach of covenant not to sue
Legislation Cited: Civil Procedure Act 2005 (NSW)
Competition and Consumer Act 2010 (Cth)
International Arbitration Act 1974 (Cth) (Act)
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Amcor Packaging (Australia) Pty Ltd v Baulderstone Pty Ltd [2013] FCA 253
Anderson v GH Mitchell & Sons Ltd (1941) 65 CLR 543
BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd (2008) 168 FCR 169
Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45
Commonwealth v Adelaide Steamship Industries Pty Ltd (1974) 10 SASR 203
Doherty v Allman (1878) 3 App Cas 709
Elecnor Australia Pty Ltd v Clough Projects Australia Pty Ltd [2025] NSWSC 610
Flakt Australia Ltd v Wilkins and Davies Construction Co Ltd (1979) 2 NSWLR 243
Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160
Hancock Prospecting Pty Ltd v Rinehart (2017) 257 FCR 442
Huddart Parker Ltd v The Ship “Mill Hill” (1950) 81 CLR 502
In the matter of Prismex Technologies Pty Limited; Taggert v Matyear [2013] NSWSC 292
Lepcanfin Pty Ltd v Lepfin Pty Ltd (2020) 102 NSWLR 627
McDermott v Black (1940) 63 CLR 161
nearmap Ltd v Spookfish Pty Ltd [2014] NSWSC 1790
O’Connor v O’Connor [2018] NSWCA 214
Rinehart v Welker (2012) 95 NSWLR 221
Tanning Research Laboratories Inc v O’Brien (1990) 169 CLR 332
Texts Cited: Explanatory Note by the UNCITRAL Secretariat on the 1985 Model Law on International Commercial Arbitration as Amended in 2006
M Holmes and C Brown, The International Arbitration Act 1974: A Commentary (3rd ed, LexisNexis, 2018)
Category: Procedural rulings
Parties: Illawarra Basketball Club Pty Ltd (ACN 640 302 610) (First Plaintiff)
RC Aussie Hoops Pty Ltd (ACN 619 010 285) ATF RC Aussie Hoops Unit Trust (Second Plaintiff)
National Basketball League Pty Ltd (ACN 164 187 937) (Defendant)
Representation: Counsel:
P Herzfeld SC with T O’Brien and H Ryan (Applicant/Defendant)
D McLure SC with O Jones SC (Respondents/Plaintiffs)
Solicitors:
Arnold Bloch Leibler (Applicant/Defendant)
Johnson Winter Slattery (Respondents/Plaintiffs)
File Number(s): 2025/132598
Publication restriction: Nil
National Basketball League Pty Ltd (NBLCO) operates Australia’s National Basketball League (NBL). The Illawarra Hawks and South East Melbourne Phoenix basketball clubs operate teams in the NBL.
The clubs each have an almost identical licence agreement with NBLCO, which provides the terms on which the clubs can field a basketball team in the NBL. The licences prescribe in detail the parties’ rights and obligations, including the licence conditions, the parties’ general obligations, the terms for exploitation of commercial rights associated with the NBL, marketing, media and communications, and equalisation and revenue sharing arrangements. A condition precedent of each licence is entry into a Revenue Share Agreement (RSA), which the clubs have done. The RSA requires NBLCO to share some of its revenue with the clubs, so long as they have a licence agreement with NBLCO.
Here, the clubs’ corporate entities seek preliminary discovery of documents from NBLCO pursuant to r 5.3 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), which allows for discovery of documents from a prospective defendant “if it appears to the court that”, among other things, the applicant “may be entitled to make a claim for relief from the court against” that prospective defendant: UCPR r 5.3(1)(a). If the prerequisites in r 5.3(1) are satisfied, the court may order that the prospective defendant give discovery of documents “that relate to the question of whether or not the applicant is entitled to make a claim for relief”.
The clubs are considering bringing claims against NBLCO and Larry Kestelman, a director and the ultimate beneficial owner of NBLCO. The potential claims include claims for breach of contract in respect of various terms and alleged implied terms in the licences, the RSA, and a Letter Agreement between IBC and NBLCO, misleading or deceptive conduct, breach of fiduciary duty or directors’ duties in respect of Mr Kestelman and knowing assistance in respect of NBLCO, and breaches of the Competition and Consumer Act 2010 (Cth). One of the plaintiffs is also contemplating seeking a declaration that certain aspects of the licence are void as an unlawful restraint of trade.
However, the licences contain an arbitration clause providing for disputes to be arbitrated by the Court of Arbitration for Sport (CAS) in Switzerland. NBLCO seeks a stay of these preliminary discovery proceedings under any of s 7(2) International Arbitration Act 1974 (Cth) (Act), Article 8 of the UNCITRAL Model Law on International Commercial Arbitration contained in Schedule 2 of the Act (which has force of law by s 16(1)), or the court’s inherent jurisdiction).
As explained below, I consider it appropriate to order a stay.
Part 14 of the licences contains a “Grievance Procedure”, culminating in referral to arbitration by CAS. “Grievance” is defined broadly in cl 2.1 to mean “a dispute arising out of or in relation to the Club’s participation in the NBL, including a dispute about the breach, termination, validity, or subject matter of”, among other things, the licence “or any other matter”.
Under cl 14.1, a party may give the other a written notice setting out particulars of a Grievance.
Clause 14.2 then sets out a staged process “to obtain a resolution to any Grievance or any other matter regarding this Agreement or their participation in the NBL”: the parties are to attempt to negotiate a “resolution”, and if unsuccessful to then mediate, and if unsuccessful then to arbitrate.
Clause 14.3 provides:
The parties agree that the [Grievance Procedure] in clause 14.1 shall be followed and that the decision of CAS shall be final and binding. It is further agreed that no party will institute or maintain proceedings regarding a Grievance or any other matter regarding this Agreement or their participation in the NBL in any court or tribunal other than CAS.
Section 7(2) of the Act provides that where “proceedings instituted by a party to an arbitration agreement … against another party to the agreement are pending in a court” and the “proceedings involve the determination of a matter that, in pursuance of the agreement, is capable of settlement by arbitration”, then the Court “shall” stay the proceedings “or so much of the proceedings as involves the determination of the that matter” on the application of a party and refer the parties to arbitration.
In other words, where the Court identifies a “matter” that is the subject of a valid arbitration agreement and is capable of being resolved by arbitration, a stay is mandatory: see eg Elecnor Australia Pty Ltd v Clough Projects Australia Pty Ltd [2025] NSWSC 610 at [91] (Stevenson J) (Elecnor).
An application for preliminary discovery under r 5.3 UCPR involves the Court considering the exercise of a discretion to order the prospective defendant to give discovery to the applicant of documents that are or have been in the person’s possession and that relate to the question of whether or not the applicant is entitled to make a claim for relief.
There is no adjudication of substantive rights or liabilities in the application. Instead, the Court’s task in the “preliminary” process is simply to decide whether it “appears” that the applicant “may be entitled” to seek relief, and that the prospective defendant may possess documents relevant to whether proceedings should be commenced. The applicant need not establish “even a prima facie case for relief” nor “specify with precision the cause of action proposed”: O’Connor v O’Connor [2018] NSWCA 214 at [30] (Simpson AJA, McColl and Macfarlan JJA agreeing).
I must construe the arbitration agreement to identify what the parties agreed and whether the preliminary discovery application involves a “matter…capable of settlement by arbitration” for the purposes of s 7(2). That construction is to be guided by the orthodox principles governing the interpretation of arbitration agreements, about which there is no dispute: see eg Rinehart v Welker (2012) 95 NSWLR 221 at [117]-[120] (Bathurst CJ, McColl and Young JJA agreeing); Lepcanfin Pty Ltd v Lepfin Pty Ltd (2020) 102 NSWLR 627 at [85]-[93] (Bell P, Payne and McCallum JJA agreeing). The contract must be construed “giving meaning to the words chosen by the parties and giving liberal width and flexibility to elastic and general words of the contractual submission to arbitration”: Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45 at [164] (Allsop J, as his Honour then was, Finn and Finkelstein JJ agreeing) (Comandate Marine Corp).
The parties primarily relied on two authorities said to support their opposing positions: nearmap Ltd v Spookfish Pty Ltd [2014] NSWSC 1790 (Spookfish) and Amcor Packaging (Australia) Pty Ltd v Baulderstone Pty Ltd [2013] FCA 253 (Amcor).
The clubs relied on Spookfish, in which Bergin CJ in Eq refused to grant a stay of preliminary discovery proceedings under s 8 of the Commercial Arbitration Act 2012 (WA). The relevant arbitration agreement covered “any dispute between the parties as to … the rights or obligations of a party to this Agreement … or any other matter arising out of or relating to the contents of this Agreement”. Her Honour said (at [72]):
… the question whether the plaintiffs are entitled to [preliminary discovery] is in my view not a dispute as to the rights or obligations of a party to the Agreements. Nor does it arise out of or relate to “the contents of this Agreement” (cl 21.1(d)). It is a right independent of the Agreements. It [is] a right arising under the [UCPR] and any obligation to produce the documents arises from a judicial determination, having regard to whether the prerequisites in the Rule have been satisfied. It is true that in that process the Court must consider whether the plaintiffs “may be entitled to make a claim” against the prospective defendants and in so doing it will have regard to the obligations of the parties to the Agreements but it is not dealing with “a dispute” as defined in the Agreements. It is dealing with the plaintiffs’ entitlement to [an order for preliminary discovery].
There are differences between Spookfish and the current proceedings. First, Spookfish concerned WA legislation rather than the Act. However, they are not materially different. Secondly, Bergin CJ in Eq’s analysis turned on the wording of the particular arbitration clause and does not stand for a general principle that preliminary discovery would always fall outside the scope of an arbitration agreement.
Conversely in Amcor, upon which NBLCO relied, Marshall J stayed an application for preliminary discovery under s 8 of the Commercial Arbitration Act 2011 (Vic). The relevant arbitration agreement was located in a tiered dispute resolution clause, which was expressed to apply to “a dispute arising out of or in connection with this Agreement...”. Marshall J considered that “each of the proposed causes of action” being explored by Amcor in its preliminary discovery application arose “out of or in connection with” the Agreement and were thus subject to the arbitration agreement: at [39]. Marshall J did not expressly consider whether preliminary discovery constituted a “matter”, but instead limited the analysis to whether such an application fell within the arbitration agreement, which is in different terms to cl 14 here, and therefore Amcor is distinguishable.
In this case, the parties have made submissions about the scope of the arbitration agreement and the operation of s 7(2) and the Model Law.
I do not consider that an application for preliminary discovery falls within the scope of the arbitration agreement in cl 14.2, even though the arbitration agreement in this case is wider than those in Spookfish and Amcor. “Grievance” is not restricted to matters arising out of or relating to the licences but is defined as “a dispute arising out of or in relation to the Club’s participation in the NBL, including a “dispute” about the breach, termination, validity, or subject matter of”, among other things, the licence, “or any other matter”. The breadth of that definition is reinforced by cl 14.2, which envisages arbitration as the ultimate means to resolving “any Grievance or any other matter regarding this Agreement or their participation in the NBL”.
I accept that it might be said that NBLCO’s refusal to provide documents sought by the clubs and a contested preliminary discovery application could amount to a dispute about “any other matter” relating the clubs’ participation in the NBL. However, I am not persuaded that a contested preliminary discovery application qualifies as a “dispute” contemplated by the definition in cl 2.1 of “Grievance”, because it is a separate interlocutory process that, as explained above, lacks any substantive determination of the parties’ rights or liabilities found in their contractual and legal relationship.
The wording of cl 14.2 is framed in terms of a “process to obtain a resolution”, which I consider was intended to capture only those “disputes”, which can in fact be resolved by arbitration in CAS. The parties accepted that preliminary discovery is not available in CAS in the way it is under the UCPR. That would tell against the parties having intended that such a procedure would fall within the meaning of cl 14.2. That view is reinforced by the fact that an application under r 5.3 involves no adjudication or “resolution” of the substantive claims the applicant seeks to explore, nor does it resolve any substantive rights or liabilities: see at [72].
It requires that there be some subject matter, some right or liability in controversy which, if not co-extensive with the subject matter in controversy in the court proceedings, is at least susceptible of settlement as a discrete controversy. The words “capable of settlement by arbitration” indicate that the controversy must be one falling within the scope of the arbitration agreement and, perhaps, one relating to rights which are not required to be determined exclusively by the exercise of judicial power.
The term has been construed broadly, but it does not “include every issue which would, or might, arise for decision in the course of the determination of such a claim”: Flakt Australia Ltd v Wilkins and Davies Construction Co Ltd (1979) 2 NSWLR 243 at 250 (McLelland J).
NBLCO contended that either the preliminary discovery application itself, or any of the claims which the clubs are exploring, are a “matter…capable of settlement by arbitration”.
There are several reasons as to why a preliminary discovery application does not constitute a “matter…capable of settlement by arbitration”:
First, an arbitral tribunal cannot be seized of a “dispute” or “matter”, unless and until a claimant brings a claim in relation to “some right or liability” under the arbitration agreement. In contrast, preliminary discovery operates in circumstances where the applicant has not commenced proceedings and is unsure whether it has a claim at all.
Secondly, the very purpose of such an application is to allow a prospective applicant to gather evidence before deciding whether a cause of action or “matter” exists. As explained above, there is no adjudication of substantive rights or liabilities in the sense contemplated by the term “matter” in s 7(2): see Spookfish at [72].
Thirdly, statute gives the court jurisdiction to order preliminary discovery, but there is no statutory authority for arbitral tribunals to order preliminary discovery. I do not accept such authority is found through the references to “interim measures” in the Model Law (in Schedule 2 of the Act). Article 9 simply serves to ensure that seeking “an interim measure of protection” from a Court does not operate “as a waiver or an objection against the existence or effect of the arbitration agreement”: Explanatory Note by the UNCITRAL Secretariat on the 1985 Model Law on International Commercial Arbitration as Amended in 2006 at [22]. Moreover, the references to “interim measures” in Articles 17 and 17J of the Model Law presume that a dispute has already been referred to arbitration. None of these provisions has any application to the present proceedings.
Fourthly, it is clear from the experts’ joint report that preliminary discovery is not a procedure known to, or available in, CAS, which reinforces my conclusion that the application is not “capable of settlement by arbitration” as required by s 7(2).
Turning to NBLCO’s alternative argument regarding the claims underlying the application for preliminary discovery, I also do not accept that those claims qualify as “matters” and therefore fall within s 7(2). The question of entitlement to preliminary discovery under r 5.3 ought not be elided with the underlying contemplated cause of action, which does not arise for consideration in the preliminary discovery application. In any event, s 7(2) only applies to proceedings which involve the “determination” of a “matter”: see s 7(2)(b). The current proceedings will not determine any underlying claims the clubs seek to explore, and so s 7(2) cannot apply to those claims: see eg at [71]-[74].
Section 7(2) is not the exclusive code regulating applications for a stay of proceedings. Article 8(1) of the Model Law provides a separate course. Both operate as “independent operative provisions”: Comandate Marine Corp at [204] (Allsop J); cf Elecnor at [89] (Stevenson J).
However, the term “matter” has the same meaning in s 7(2) as it does in Article 8(1), as each comes from the wording of Article II(3) of the New York Convention: Malcolm Holmes and Chester Brown, The International Arbitration Act 1974: A Commentary (3rd ed, LexisNexis, 2018) 211. The question of interpretation raised by Article 8 is whether particular proceedings (referred to as the “action”) are brought in a “matter which is the subject of an arbitration agreement”. As I am not satisfied that these proceedings involve a “matter” for the purposes of s 7(2), it follows that no stay should be granted under Article 8.
NBLCO submitted that the Court should exercise its “inherent power” to stay the proceedings, because the parties had contracted for disputes to be only resolved by private alternative dispute resolution. In writing, NBLCO cited Huddart Parker Ltd v The Ship “Mill Hill” (1950) 81 CLR 502 (Huddart) as support for that submission. But that was a case where no “inherent power” was exercised. Dixon J stayed proceedings in the High Court’s admiralty jurisdiction in light of an arbitration clause, relying on s 5 of the Arbitration Act 1928 (Vic) together with s 79 of the Judiciary Act 1903 (Cth), and noting (at 507) that, at least in the context of the High Court, the power to stay proceedings on the ground of an arbitration clause “is not [one] that can arise otherwise than from statute”.
However, during oral argument, NBLCO’s primary position was different. It submitted that a stay should be granted because the clubs’ application was contrary to the contractual promise to arbitrate and the contractual covenant not to sue in cl 14.3, such that “as a pure matter of contract this action shouldn’t be allowed to proceed”. That submission drew on the power historically enjoyed by courts of equity to restrain a breach of a negative covenant, like a covenant not to sue, by issuing an injunction: see Doherty v Allman (1878) 3 App Cas 709; McDermott v Black (1940) 63 CLR 161 at 186-188 (Dixon J). After the adoption of Judicature legislation, that result is achieved by granting a stay of proceedings, rather than issuing an injunction: see eg s 61 Supreme Court Act 1970 (NSW); In the matter of Prismex Technologies Pty Limited; Taggert v Matyear [2013] NSWSC 292 at [49] (Brereton J); Broken Hill Proprietary Co Ltd v Hapag-Lloyd Aktiengesellschaft [1980] 2 NSWLR 572 (Yeldham J).
The existence of an inherent power to stay proceedings in favour of arbitration is not uncontroversial: see BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd (2008) 168 FCR 169 (Finkelstein J); Commonwealth v Adelaide Steamship Industries Pty Ltd (1974) 10 SASR 203 (Bray CJ, Hogarth and Jacobs JJ agreeing). Because the parties’ submissions did not deal with the issue in any detail, I sought further submissions from the parties on the Court’s inherent jurisdiction to issue a stay.
The clubs recognised that several decisions of the High Court accept that the power to stay may derive from statute: see eg Anderson v GH Mitchell & Sons Ltd (1941) 65 CLR 543 at 548 (Rich ACJ, Dixon and McTiernan JJ); Huddart at 507 (Dixon J).
NBLCO argued, and I accept, that the Court “has a broad statutory power to stay any proceedings before it pursuant to s 67 of the (NSW)”. As I have concluded that the application for preliminary discovery does not fall within the scope of the arbitration agreement, it is not necessary to traverse the question of whether there exists an inherent jurisdiction to stay proceedings in favour of arbitration. What matters for present purposes is whether these proceedings are in breach of the covenant not to sue, and whether the court should stay the proceedings on that basis, which it clearly has power to do.
For the reasons above, I consider it appropriate to stay these proceedings pursuant to s 67 of the Civil Procedure Act 2005 (NSW) because the clubs’ application for preliminary discovery is in breach of the promise in cl 14.3. There is no apparent reason why costs ought not follow the event.
I make the following orders:
The proceedings are stayed.
The plaintiffs are to pay the defendant’s costs of the motion as agreed or assessed.
Grant liberty to the parties to apply for an alternative costs order within seven days of today's date, setting out the application and any evidence and submissions of no more than three pages upon which they rely.
Should such an application be made for an alternative costs order, the responding party is to provide evidence and submissions of no more than three pages opposing any alternative costs order within seven days of receiving the first application.
The Court will determine any such alternative costs application on the papers, if appropriate.
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Illawarra Basketball Club Pty Ltd
National Basketball League Pty Ltd [2025] NSWSC 1111
(1941) 65 CLR 543
(2008) 168 FCR 169
(2006) 157 FCR 45
(1974) 10 SASR 203
(1979) 2 NSWLR 243
(1996) 39 NSWLR 160
(2017) 257 FCR 442
(1950) 81 CLR 502
(2020) 102 NSWLR 627
(1940) 63 CLR 161
(2012) 95 NSWLR 221
(1990) 169 CLR 332
The clubs relied upon cl 24.1(b), which I do not consider assists its construction that the parties intended they have access to a court’s preliminary discovery process. In cl 24.1(b), the parties agreed that the licences are governed by the law of Victoria and they submitted to the non-exclusive jurisdiction of the courts of that State. However, that does not support the construction that the parties intended procedures such as preliminary discovery to be available to them. Instead, the better view is that the parties intended courts to support the arbitration process, for example, by enforcing any arbitral award. This is particularly so in light of the second sentence of cl 14.3 discussed below.
Even if the above conclusion is erroneous, and preliminary discovery did fall within cl 14.2, that alone does not enliven s 7(2) or Article 8. The proper construction of the arbitration agreement is relevant to the meaning of a “matter” that is “capable of settlement by arbitration”: Hancock Prospecting Pty Ltd v Rinehart (2017) 257 FCR 442 at [157] (Allsop CJ, Besanko and O’Callaghan JJ). Yet whether an issue falls within the ambit of the arbitration agreement is not wholly synonymous with whether an issue falls within s 7(2) of the Act.
For those reasons, I am not satisfied that the proceedings involve the determination of a “matter…capable of settlement by arbitration” for the purposes of s 7(2) of the Act.
I do not accept the clubs’ submission that NBLCO “impermissibly seeks to rely on the Court’s power under s 67”, because it “has not sought any stay pursuant to this power” in “its motion or its previous submissions”. Prayer for relief 3 of the notice of motion enables the Court to grant “[s]uch further or other orders as the Court sees fit” and I am satisfied that the arguments in respect of the inherent power to stay sufficiently overlap with s 67, such that no additional submissions were required. NBLCO both orally and in writing argued that the Court should stay the proceedings in light of the covenant not to sue, and I am not granting a stay based on “the specifically conditioned power in s 7” of the Act, as argued by the clubs.
The clubs contended that the covenant not to sue only relates to a “Grievance or any other matter”, that is capable of being resolved by CAS arbitration on a “final and binding” basis, which preliminary discovery is not. In other words, no breach of the covenant not to sue has taken place because preliminary discovery does not fall within the terms of cl 14.3.
I do not agree.
The first sentence of cl 14.3 contains an agreement to follow the process set out in cl 14.2 (the clause refers to cl 14.1, which the parties agreed ought be taken as a reference to cl 14.2) to obtain a “resolution”, and that “the decision of CAS shall be final and binding”. But properly construed, the second sentence of cl 14.3 is not merely, as the clubs submitted, “the other side of the coin” and just a promise to not litigate disputes that must be arbitrated. It goes further. Both parties promise to not “institute or maintain proceedings regarding a Grievance or any other matter regarding [the licence agreement] or their participation in the NBL in any court or tribunal other than CAS”. The wording is important:
The language in the second sentence goes beyond “resolution” of a “Grievance” or “other matter” that is dealt with in the first sentence and cll 14.1 and 14.2; the promise is not to institute or maintain proceedings “regarding … any other matter regarding … their participation in the NBL”.
The reference to the second sentence being a “further” agreement reinforces that it was intended by way of addition and not mere emphasis.
Therefore, cl 14.3 makes clear that the parties have agreed to resolve all issues only through private dispute resolution and not in a court. Part of that bargain is that the parties are precluded from accessing court procedures, even if they are not available in CAS. Here, it is “unlikely” that the parties “intended that different disputes should be resolved before different tribunals, or that the appropriate tribunal should be determined by fine shades of difference in the legal character of individual issues, or by the ingenuity of lawyers in developing points of argument”: Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160 at 165 (Gleeson CJ).
I accept that the preliminary discovery application is “any other matter” regarding the clubs’ involvement in the NBL, and that such an application amounts to instituting proceedings. Therefore, this application falls within the scope of the covenant not to sue in cl 14.3.
I also reject the clubs’ submission that “it would not be proper to exercise” the power to grant a stay “where there is no arbitration that could or would resolve the relevant dispute”. The absence of arbitral power to order preliminary discovery does not revive or preserve a right that has otherwise been expressly relinquished by a covenant not to sue.