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[2026] NSWSC 717
Supreme Court of NSW
2026-09-04
Peden J
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Qube Re Services (No 2) Pty Limited v Martinus Rail Pty Ltd [2026] NSWSC 717
Hearing dates: 25 August 2026
Date of orders: 04 September 2026
Decision date: 04 September 2026
Jurisdiction: Equity - Commercial Arbitration List
Before: Peden J
Decision: Orders made enforcing partial arbitral awards as if they were judgments of the Court pursuant to s 35(1) of the Commercial Arbitration Act 2010 (NSW); judgment for plaintiff concerning principal, pre-judgment and post-judgment sums; defendant to pay plaintiff’s costs of the proceedings as agreed or assessed: see [59].
Catchwords: ARBITRATION – Public policy – Whether enforcement of partial arbitral awards is contrary to domestic public policy pursuant to s 36(1)(b)(ii) Commercial Arbitration Act 2010 (NSW) – Whether difference between international and domestic principles concerning public policy in refusing to enforce arbitral awards
BUILDING AND CONSTRUCTION – Policy under Building and Construction Industry Security of Payment Act 1999 (NSW) which allows contractors to receive progress payments pending final resolution of dispute – Whether SOPA policy is a public policy for the purposes of s 36(1)(b)(ii)
COSTS – Whether plaintiff entitled to its costs – Where defendant may be entitled to further monies following finalisation of arbitration – Where partial arbitral awards final – Whether post-judgment interest rate under Civil Procedure Act 2005 (NSW) is applicable
Original judgment source is linked above.
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW)
Civil Procedure Act 2005 (NSW)
Commercial Arbitration Act 2010 (NSW)
International Arbitration Act 1974 (Cth)
UNCITRAL Model Law on International Commercial Arbitration
Cases Cited: Argentine Republic v Petersen Energía Inversora, S.A.U. (No 2) [2026] NSWCA 121
Blanalko Pty Ltd v Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Constructions) (2017) 52 VR 198
Cameron Australasia Pty Ltd v AED Oil Ltd [2015] VSC 163
CBI Constructors Pty Ltd v Chevron Australia Pty Ltd (2024) 283 CLR 172
Colin Joss and Co Pty Ltd v Cube Furniture Pty Ltd [2015] NSWSC 735
Gulnick v Indian Farmers Fertiliser Cooperative Ltd (2016) 49 VR 732
Guoao Holding Group Co Ltdv Xue (No 2) [2022] FCA 1584
Hebei Import & Export Corporation v Polytek Engineering Company Ltd [1999] HKC 205
Larkden Pty Ltd v Lloyd Energy Systems Pty Ltd (2011) 279 ALR 772
Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd (No 2) [2024] NSWSC 1223
Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd [2023] NSWSC 1550
Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd [2024] NSWCA 49
Martinus Rail Pty Ltd v Qube RE Services (No 3) Pty Ltd (No 3) [2024] NSWSC 1483
Martinus Rail Pty Ltd v Qube RE Services (No. 2) Pty Limited in its capacity as trustee of the Moorebank Industrial Terminals Assets Trust [2026] NSWSC 316
PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA [2001] 1 SLR(R) 597
Qube RE Services (No.2) Pty Ltd v Martinus Rail Pty Ltd (No 2) [2025] NSWCA 63
Simple Investments Pty Ltd atf the Simple Investment Property Trust v Aram Developments Pty Ltd [2026] VSC 510
TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd (2014) 232 FCR 361
Tesseract v Pascale Construction (2024) 282 CLR 512
Traxys Europe SA v Balaji Coke Industry vt Ltd (2012) 201 FCR 535
Texts Cited: Mustill and Boyd, The Law and Practice of Commercial Arbitration in England (2nd ed, Lloyd’s Maritime and Commercial Law Quarterly, Butterworths, 1989)
Category: Principal judgment
Parties: Qube Re Services (No 2) Pty Limited in its capacity as trustee of the Moorebank Industrial Terminals Assets Trust, (ABN 95 320 369 982) (Plaintiff)
Martinus Rail Pty Ltd (Defendant)
Representation: Counsel:
T J Breakspear SC with J Kennedy (Plaintiff)
J J Gleeson KC with B Yin (Defendant)
Solicitors:
MinterEllison (Plaintiff)
HWL Ebsworth Lawyers (now HWLE Lawyers) (Defendant)
File Number(s): 2026/00233218
Publication restriction: Nil
This dispute concerns whether certain partial arbitral awards ought to be enforced under s 35(1) Commercial Arbitration Act 2010 (NSW) (CAA).
Pursuant to three 2023 and 2024 adjudication determinations under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA), Qube Re Services (No 2) Pty Ltd was required to pay Martinus Rail Pty Ltd almost $80 million in relation to payment claims for work connected to the Precinct Development Works for the Moorebank Intermodal Terminal Project.
Since the adjudication determinations, the parties have been engaged in significant litigation: see eg Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd [2023] NSWSC 1550; Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd (No 2) [2024] NSWSC 1223; Martinus Rail Pty Ltd v Qube RE Services (No 3) Pty Ltd (No 3*)* [2024] NSWSC 1483; Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd [2024] NSWCA 49; Qube RE Services (No.2) Pty Ltd v Martinus Rail Pty Ltd (No 2) [2025] NSWCA 63. Special leave to appeal to the High Court was refused. See also Martinus Rail Pty Ltd v Qube RE Services (No. 2) Pty Limited in its capacity as trustee of the Moorebank Industrial Terminals Assets Trust [2026] NSWSC 316.
Qube also commenced arbitration proceedings before the Honourable Robert McDougall KC, seeking to recover what it considers overpayment to Martinus. A final hearing is scheduled for later this year. There is no dispute that the arbitration proceedings are “final rights” proceedings, concerning the interim SOPA determinations.
In March 2026, Qube made an application to the arbitrator for separate questions concerning time bar clauses in the relevant contracts, which it considered ought to have barred some of the payment claims it has paid pursuant to the SOPA determinations. Qube claimed restitution of those amounts.
The ARBITRATOR: … I will formulate a draft order for separate decision, which under the [Resolution Institute] rules will lead to a partial award on the questions dealt with, and which, bearing in mind [CBI Constructions v Chevron Aust (2024) 283 CLR 172 (Chevron)], will be expressed to be final. Is everyone happy with that?
Mr BRAHAM [senior counsel for Martinus]: Yes.
Mr GILES [senior counsel for Qube]: Yes.
The ARBITRATOR: I’m not going to do it on the basis it can be retested at a later stage.
1. Order that there is to be decided separately from, and before, the decision of all other issues the question whether, having regard to matters pleaded in [Martinus’] Defence and Counter Claim and the Reply to the Counter-Claim, any and if so which of [Martinus’] claims described … are barred by the operation of any and if so which of the contractual provisions identified …
2. The consequences, including as to any award to be made and as to costs, in respect of the decision upon each of the said claims, is to be addressed in the parties’ written submissions.
To the extent that clauses … restrict or modify Martinus’ entitlement to be paid for work completed by Martinus for Qube’s benefit, they are void and unenforceable pursuant to s 34 of the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA) or at common law as a penalty.
For the purpose of determination of the separate question, Martinus relies on the matters addressed in its written submissions. The other points of principle raised by Martinus’ [pleading] but not addressed in its submissions are not to be addressed at the hearing …
There is no dispute that Martinus did not make any submissions on its s 34 SOPA point.
On 22 April 2026, at the hearing of the separate question, Mr Braham, senior counsel for Martinus, had the following exchange with the arbitrator about the finality of what was being determined:
Mr BRAHAM: … The issue that’s being determined once and for all is whether the time bars pleaded by the claimant bite for the claims made in our cross claim. That doesn’t come to be determined on some sort of contingent basis. It is determined once and for all. ...
… This isn’t a demurrer on an application to strike something out. … you are deciding, today, once and for all, whether the pleaded time bars bite, and that, I think, both parties accept that can only occur if we proceed on the basis there was a termination for convenience. If they do not bite on a termination for convenience, then we’re entitled to succeed in the separate question. That’s an end to those time bars for all time in this arbitration, and you would be functus.
…
MR McDOUGALL: One thing that I remember from Chevron says that I can’t determine a separate question and issue a partial award. What Chevron says is I can’t then revisit the subject matter of that partial award.
MR BRAHAM: That’s my point.
MR McDOUGALL: But that, as their Honours emphasised, is a question of defining the issue that was decided.
MR BRAHAM: So the separate question that has been set down for determination is the application of the time limit in clause 41 and other time limits in relation to the claims we’ve made and progress claim 15. That’s a binary question. If it’s answered, they apply or they don’t apply. They’re the basis upon which we are setting out to decide that question is on the basis there’s termination for convenience.
Now, that [i.e. that the contract was terminated for convenience rather than for breach] is not an agreed position between the parties, so I’m just making it clear that our position is, in the event that, contrary to the basis upon which this argument has been run, the ultimate finding is there was termination for cause, the claimants will have, by this process, lost the opportunity to re-enliven the question of the time limits. It just must be the case because you’re determining them now. …
On 29 April 2026, a further “separate issue” was included to be determined, namely whether a particular clause was “unenforceable and void as a penalty”. A further hearing was held on 8 May 2026.
On 15 May 2026, the arbitrator issued the First Partial Award providing reasons for concluding that many of Martinus’ claims were barred by contractual clauses and those clauses were not penalties. The arbitrator’s award recorded that he was not asked to, nor did he, determine Martinus’ s 34 SOPA point:
106. … I note … that Martinus pleads a counterclaim for misleading or deceptive conduct … Qube explicitly accepted that nothing that is contained in this Partial Award would have any effect of barring, or foreclosing, or rendering me functus officio in respect of, any claim for misleading or deceptive conduct.
107. I note … that Martinus pleaded … that to the extent that any of [the contractual clauses] restrict or modify its entitlement to be paid for work completed under the Contracts for Qube’s benefit, they are void and unenforceable either pursuant to SOPA, s.34 or at common law as a penalty. I have dealt with the penalty argument …
108. The argument under s. 34 of SOPA was not included in the questions to be the subject of separate determination. When I raised this, the parties agreed that it should not be decided as part of the hearing and determination upon those questions. It is therefore excluded from consideration.
109. … Martinus made an application to the effect that I should refrain from dealing with the separate questions, including … on the basis that their decision would lack utility. I do not accept that the separate determination procedure did lack utility. On the contrary, on my conclusions the ambit of Martinus’ counterclaims is very substantially reduced … I therefore decline to accede to Martinus’ application.
110. Nor do I see any other reason not to take the separate determination through to its conclusion. …
Relief
111. My conclusions set out above lead, necessarily, to the question of what, if any, relief is appropriate to give effect to them.
112. Qube’s application was for summary judgment … My understanding is that the amount stated [in an annexure] represents the amount that Qube has paid to Martinus pursuant to the determinations of an adjudicator in one or other of the adjudication applications brought by Martinus against Qube under SOPA. Qube claims restitution of that amount, together with interest.
113. It is uncontentious that payments made under the SOPA regime are, in effect, on account. They do not affect any rights that a party may have under the applicable contract … Where there are proceedings before a court or tribunal in relation to the contract, orders may be made for restitution of amounts paid under the SOPA regime …
The ARBITRATOR: … on any view, Qube is entitled to a partial award in its favour. That partial award has to be correct, because, once it’s decided, I can’t revisit it except under the slip rule …
…
The ARBITRATOR: … in relation to the Security of Payment Act point. I don’t know why it wasn’t argued, but it wasn’t. Your position, Mr Braham, is that the relevant clauses or some of them at least are void as a penalty. I’ve said my view is, no, they’re not and that should follow from what I said before; but, alternatively, illegal and unenforceable under section whatever it is of the SOPA.
If that is parked and I make an order for repayment of some of the claims to which that defence might be relevant it would be open to you to amend your counterclaim to seek repayment on the basis it was paid under duress and pursuant to an illegal purpose. Mr Giles, would there be any objection in principle to that being done, if I go down the path I just indicated?
Mr GILES: No, I understand [y]our Honour’s point.
The ARBITRATOR: I’m really concerned that we don’t Chevron ourselves out of something which may be legitimately arguable, but at the same time we resolve these questions as far as we can.
Mr BRAHAM: No, I understand that.
Mr GILES: No, I understand.
11. Qube submitted that it was entitled to an order for restitution of all monies paid by it to Martinus in respect of the Barred Claims, together with interest. …
…
14. Qube provided evidence … of the amounts it had paid to Martinus in respect of barred claims. …
15. I must note that Martinus submitted that there should be no order for payment. It noted that I had stated at [106] of the First Partial Award that its counterclaim for misleading or deceptive conduct had not been resolved. However, Martinus did not put submissions to show how that counterclaim, in whatever way it might be determined, could have any impact on, let alone somehow bar, Qube’s entitlement to have repaid to it amounts for what were, on my findings, contractually invalid (because barred) variation claims that ought never to have been paid to Martinus.
16. If Martinus’ submissions were, in some way, intended to advert to a possibility that Qube might not be able to meet any claim for damages that might be provided against it for misleading or deceptive conduct, Martinus offered no evidence to show how this could be so.
17. Next, Martinus noted that there was a SOPA argument referred to at [108] of the First Partial Award. As I there said, neither Martinus nor Qube had proffered that question as one to be decided as a separate and preliminary issue. It having been excluded from consideration, I do not see why the fact that it is a pending issue should be allowed to interfere with Qube’s entitlement to have repaid to it amounts that should never have been paid. If the point is argued at the final hearing and it is sustained, Martinus would be entitled to recover, by way of damages, moneys exacted from it as an illegal penalty (on the assumption, of course, that it proves its entitlement to have been paid those monies both as a matter of contract law and as a matter of quantum). I would have no difficulty permitting an amendment to Martinus’ [counter claim] to plead this specifically as an issue. This point was raised during the hearing on 20 May 2026. Qube stated that it would raise no objection to the penalty point being run this way should it be necessary to do so.
18. It follows, in my view, that an order for repayment of the amounts paid in respect of the Barred Claims, together with interest, should be made.
…
41. … For the reasons set out above together with those set out in the First Partial Award, I award as follows:
(a) Declare that each of [the] claims … as set out in … the Partial Award dated 15 May 2026 is barred by a relevant provision of the Contracts (Barred Claim).
…
(c) Declare that Qube is entitled to restitution of the amount (if any) paid by Qube to Martinus in respect of each Barred Claim, together with interest on the amount so paid calculated at the prejudgment interest rate applicable under section 100 of the Civil Procedure Act 2005 (NSW) from 8 April 2025 up until the date of payment.
(d) Order that the amount so payable be paid by 5 June 2026.
…
22. Martinus submitted that I should find that Qube had no present entitlement to restitution of any of the amounts that it claimed. It referred to its pleaded issue that in substance, the time bar provisions on which Qube relied were unenforceable by reason of SOPA section 34. Martinus submitted that any “entitlement” that Qube might have was defeasible by the operation of section 34. …
23. It is correct to say, as Martinus put, that “the application and operation of [section 34] has yet to be determined”. It followed, Martinus submitted, that I could not find that Qube had any present final entitlement to be repaid any of the amounts paid to Martinus in respect of the Barred Claims.
…
25. Qube submitted, correctly, that it was Martinus that had elected not to have the SOPA argument included in the separate question which was heard and decided. That, Qube submitted, was a “forensic decision” made by Martinus: a decision that Qube characterised as one “not to rely on such matters in opposition to Qube’s position as part of the Separate Question”. Thus, Qube submitted, it was not open to Martinus, having chosen to exclude the SOPA issue from the issues debated, now to argue that Qube should not have restitution in any event because that issue had not been put up for debate and decision.
26. The position, in my view, is that I have decided the separate questions and have decided, in effect, that each of the Barred Claims identified in the First and Second Partial Awards, was unsustainable, or barred, … It followed, necessarily, that Qube had no contractual liability to pay those amounts to Martinus and Martinus had no contractual entitlement to be paid them. I accept that the adjudicator who dealt with the relevant adjudication applications and made the relevant determinations decided otherwise, but the whole point is that those determinations were interim, or on account, and where open to be reviewed on a final and substantive hearing in a Court or Tribunal of competent jurisdiction.
27. It follows, in my view, that Qube is entitled to relief of the kind that I identified in the Second Partial Award, and that the relief should now be expressed in terms of a monetary amount. That was the specific nature of the relief that Qube claimed in its application for the separate question. It was always Qube’s application that if I held that any of the relevant claims had been contract-barred, it should have restitution of any amount [it] had paid to Martinus in respect of those claims. It is not, in my view, open to Martinus, having excluded the SOPA issue from consideration, now to say that the relief claimed by Qube, which I have found to be substantiated for the majority of the relevant claims, should nonetheless be refused, or that my substantive conclusion should be revisited and redecided because the section 34 issue, if argued and decided, might have led to some different conclusion.
…
42. I therefore award as follows:
(a) Declare that the amount payable pursuant to paragraphs 41(c) and 41(d) of the Second Partial Award made in this arbitration on 22 May 2026 is $26,439,381.58 inclusive of interest to 5 June 2026.
(b) Order that the said amount of $26,439,381.58 be paid by Martinus to Qube on 5 June 2026.
Qube sought orders enforcing the three Partial Awards. Martinus resisted their enforcement, submitting that to enforce them would be contrary to the public policy of New South Wales: s 36(1)(b)(ii) CAA. The “policy” said to be offended is that under SOPA, which, inter alia, allows contractors to receive progress payments, pending the final resolution of any disputes as to their entitlement under the relevant contracts. Martinus claimed that enforcing the Partial Awards would violate public policy because it would be required to repay amounts in respect of specific claims determined by the arbitrator, even though there are further arguments Martinus may wish to raise for subsequent determination relevant to the time bar provisions (namely, that they are void pursuant to s 34 SOPA).
Therefore, the issues to be determined are:
Is the policy of SOPA a type of public policy caught by s 36(1)(b)(ii) CAA?
If so, would the policy of SOPA and therefore the public policy of NSW be offended by enforcing the awards?
What orders ought to be made?
The parties differed as to the circumstances in which a domestic arbitral award would not be enforced because it offended public policy. Section 36(1)(b)(ii) CAA provides that recognition of an award may only be refused by a Court if, relevantly, “the recognition or enforcement of the award would be contrary to the public policy of this State.” This is in the context of other provisions, relevantly:
Section 5 CAA, which provides that “In matters governed by this Act, no court must intervene except where so provided by this Act”; and
Section 1C CAA, which provides that “The paramount object of this Act is to facilitate the fair and final resolution of commercial disputes by impartial arbitral tribunals without unnecessary delay or expense”.
Where the question is the enforcement of an international arbitration award under the International Arbitration Act 1974 (Cth) (ICA), the concept of “public policy” is limited to where enforcement of an award would violate the most basic, fundamental principles of morality and justice in the forum, recognising the international dimension of the enforcement of arbitral awards: TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd (2014) 232 FCR 361 at [64] and [76] (Allsop CJ, Middleton and Foster JJ) (TCL), cited with approval in Gulnick v Indian Farmers Fertiliser Cooperative Ltd (2016) 49 VR 732 at [19] (Warren CJ, Santamaria and Beach JJA) and Guoao Holding Group Co Ltd v Xue (No 2) [2022] FCA 1584 at [32] (Stewart J).
Further, it is not contrary to public policy to enforce an award that failed to apply (or incorrectly applied) a particular domestic law or statute. It is only where enforcing the award would “shock the conscience”, be “clearly injurious to the public good”, or be “wholly offensive to the ordinary reasonable and fully informed member of the public” that the public policy exception can arise: PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA [2001] 1 SLR(R) 597 at [59] (Chan CJ, Leong JA and Ang J) (and citations there), cited with approval in Simple Investments Pty Ltd atf the Simple Investment Property Trust v Aram Developments Pty Ltd [2026] VSC 510 at [36] (Croft J) (Simple Investment).
However, the parties differed as to the application of such principles where the challenge to the enforcement of a domestic arbitral award is “public policy”.
Qube’s submission was that:
The “public policy” exception to the enforcement of awards in s 36(2)(b)(ii) [sic] of the CAA has the same narrow operation as the exceptions to enforcement which exist in art 36 of the UNCITRAL Model Law on International Commercial Arbitration (Model Law) and s 8(7)(6) of the International Arbitration Act 1974 (Cth) (giving effect to art V of the New York Convention) [citing Mango Boulevard Pty Ltdv Mio Art Pty Ltd [2018] QCA 39 at [104] (McMurdo JA, Fraser JA agreeing); Simple Investments Pty Ltd atf the Simple Investment Property Trust v Aram Developments Pty Ltd [2026] VSC 510 at [25] (Croft J).]. …
I accept that submission.
In Simple Investment, Croft J noted the following:
A court ought not, in considering whether s 36 provides a basis for not enforcing an arbitral award, revisit the merits of the arbitral proceeding: at [24].
The same considerations that apply to international arbitrations apply to domestic arbitrations under the Victorian equivalent of the CAA: at [25].
The public policy relevant to s 36(1)(b)(ii) must be limited to one of rights which “are ‘fundamental’ to our legal system”: at [36] citing Colin Joss and Co Pty Ltd v Cube Furniture Pty Ltd [2015] NSWSC 735 at [46] (Hammerschlag J).
The threshold for establishing that an award is “contrary to public policy” is “high, and not readily overcome”: at [37].
See also Foster J’s consideration of the same matters in Traxys Europe SA v Balaji Coke Industry vt Ltd (2012) 201 FCR 535 at [90], [101] and [105].
Martinus submitted that there is a difference between domestic and international public policy, and where a domestic award is being considered, the concept of “public policy” need not be as “high” a bar as in the international context. Martinus relied on particular parts of TCL.
First, Martinus referred to TCL at [64], where the Full Federal Court summarised the negotiations concerning the UNCITRAL Model Law on International Commercial Arbitration. At [111], the Court stated: “Arts 34 and 36 should be seen as requiring the demonstration of real practical injustice or real unfairness in the conduct of the reference or in the making of the award”. Martinus therefore submitted that the “starting point” is recognising there exists a difference between international and domestic public policy. However, the reference in TCL to Arts 34 and 36 of the Model Law has been cited with approval in Australian cases concerning domestic arbitration: see notably eg Blanalko Pty Ltd v Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Constructions) (2017) 52 VR 198 at [55] (Croft J); Cameron Australasia Pty Ltd v AED Oil Ltd [2015] VSC 163 at [16]-[19] (Croft J).
Secondly, Martinus referred to TCL at [79] which quoted Bokhary PJ in Hebei Import & Export Corporation v Polytek Engineering Company Ltd [1999] HKC 205 at [27] and [31], that “there must be compelling reasons before enforcement of a Convention award can be refused on public policy grounds … the reasons must go beyond the minimum which would justify setting aside a domestic judgment or award”, and the acceptance that “the award must be so fundamentally offensive to that jurisdiction’s notions of justice that, despite it being a party to the Convention, it cannot reasonably be expected to overlook the objection”. However, I note that Bokhary PJ did not specify nor prescribe what the “minimum which would justify setting aside a domestic judgment or award” would be.
I do not find those submissions compelling. Unlike the present case, TCL involved a foreign award and the ICA, which engaged “the full discourse of natural morality as a way of achieving uniformity and commonality”. Martinus did not provide any authority to support its submission, nor as to how the principles enunciated in TCL operate in a domestic context.
Further, whilst Martinus did not disagree with the public policy considerations in Simple Investment, as outlined above, it was orally submitted that the distinction between domestic and international public policy was not argued before Croft J.
However, I do not accept that there is an evidenced difference between the nature of public policy relevant in an international context, compared to a domestic context, noting that in all cases it would be fact specific in any event.
I do not accept that SOPA embodies a “fundamental conception of morality and justice”. That is so, even if SOPA is considered a “mandatory law” of NSW because parties cannot contract out of it. In Tesseract v Pascale Construction (2024) 282 CLR 512 (Tesseract), where at [342] (citations omitted), Jagot and Beech-Jones JJ explained that:
Conflict with public policy does not arise from mere inconsistency of the award with so-called “mandatory laws” ... of the place in which the arbitration is being conducted (relevant to an application to set aside an award) or the place in which recognition and enforcement of the award may be sought. “Mandatory laws”, being “laws that purport to apply [in arbitration] irrespective of the contract’s proper law or the procedural regime selected by the parties”, may or may not embody fundamental precepts of public policy of the place in which the arbitration is being conducted or the place in which an award is sought to be recognised or enforced.
Gageler CJ in Tesseract also stated at [73] that “little is to be gained from surveying the variety of circumstances in which public policy has been found to impact on arbitration in other jurisdictions” other than noting that “[t]he modern trend both domestically and internationally is to facilitate and promote the use of arbitration and to minimise judicial intervention in the process” (quoting Larkden Pty Ltd v Lloyd Energy Systems Pty Ltd (2011) 279 ALR 772 at [65] (Hammerschlag J)).
Ultimately, while SOPA is intended to ensure a particular legislated policy operates in the construction industry, I do not accept that it embodies a “fundamental conception of morality and justice” which reflects a “public policy” of this State.
Even if the above conclusion is erroneous, and the policy behind SOPA is a relevant “public policy” that might fall within s 36(1)(b)(ii) CAA and justify the non-enforcement of the Partial Awards, I do not consider that the Partial Awards involved any violation of the “pay now fight later” policy of SOPA.
Martinus received payments through the SOPA adjudication process, pending the resolution of its substantive dispute with Qube. The arbitrator hearing the final rights dispute (in stages) decided that Martinus was not entitled to some of the payments for claims that were contractually barred.
Martinus complained that the policy of SOPA is offended because it may wish to argue that s 34 SOPA rendered the time bar provisions void, even though the arbitrator has found they are not penalties and operate to bar some of Martinus’ claims.
Martinus’ complaint amounts to an argument that the arbitrator should not have made a monetary award in favour of Qube, before deciding upon any further argument Martinus may decide to raise based on illegality by operation of s 34 SOPA. I do not accept that submission.
Martinus elected not to have its s 34 SOPA issue determined separately and before other issues. Instead, it elected to have such issue determined (if at all) as part of its counterclaim, together with arguments based on misleading or deceptive conduct. The arbitrator was alive to the fact that either party may be entitled to further payments at the conclusion of the arbitration. Martinus has not been shut out of its final right to have the issue of s 34 SOPA determined, should it wish to, as part of the ongoing final rights proceedings.
Consistent with s 32 SOPA, the arbitrator ordered restitution of some money. Even if that decision was wrong (which I am not asked to decide, nor do I), the Partial Awards were made in the course of the final rights proceedings. There is no provision in SOPA, nor anything in its policy, that restricts an arbitrator from deciding disputes in stages, including through the resolution of separate questions.
Martinus also submitted that the Partial Awards ought not be enforced in circumstances where they were orders for “interim restitution”. They are not “interim” orders; they are final and binding and cannot now be revisited: CBI Constructors Pty Ltd v Chevron Australia Pty Ltd (2024) 283 CLR 172 at [21]-[22] (Gageler CJ, Gordon, Edelman, Steward and Gleeson JJ) (Chevron).
This consequence of resolving the separate question was made clear by the arbitrator when deciding on Qube’s application for a separate question. The arbitrator warned the parties that it would “lead to a partial award on the questions dealt with” and “will be expressed to be final”, adding: “I’m not going to do it on the basis it can be retested at a later stage”. Martinus also insisted that the determination of the separate question was to be a “once and for all” decision, with the arbitrator to determine the “binary question” of whether the contractual time bars apply: “If it’s answered, they apply or they don’t apply”, and “the claimants will have… lost the opportunity to re-enliven the question of the time limits”. As the Court stated in Chevron at [27] quoting Mustill and Boyd, The Law and Practice of Commercial Arbitration in England (2nd ed, Lloyd’s Maritime and Commercial Law Quarterly, Butterworths, 1989) 405, “if the award is merely an interim award, ‘the arbitrator still has authority to deal with the matters left over, although he is functus officio as regards matters dealt with in the award*’**.*” (emphasis added).
Martinus submitted that whether or not the Partial Awards were final depended on the “issue” that was being determined: see eg Chevron at [58] (and citations there). It submitted, as it had before the arbitrator, that because the s 34 SOPA argument could render the contractual time bars void, the operability of the contractual time bars was the “issue” and only part of that issue had been determined, leaving the s 34 SOPA component undecided.
I reject that construction of the relevant “issue”. The “issue” was that defined by the separate question, and the arbitrator, and in particular, Martinus, accepted that the s 34 SOPA argument was not included in the separate questions, which were being determined on a final basis.
It is appropriate to enforce the Partial Awards as judgments of the Court.
There is no dispute as to the appropriate form of orders enforcing the Awards or the amount of interest until 5 June 2026 (inclusive), the date nominated by the arbitrator for the payment of the restitutionary amount.
The parties are in dispute as to the appropriate amount of interest from 6 June 2026 and costs.
I accept Qube’s submission that the arbitrator made it clear in the orders set out above in paragraph [41(c) and (d)] of the Second Partial Award and paragraph [42(a) and (b)] of the Third Partial Award, that payment of the specified sum was to occur on 5 June 2026.
The specified sum of $26,439,281.58 was made up of:
$24,232,589 of principal; and
$2,206,692.58 of interest calculated at the pre-judgment interest rate applicable under s 100 Civil Procedure Act 2005 (NSW) (CPA).
Therefore, I reject Martinus’ submission that the arbitrator already determined that s 100 CPA interest would continue to run until Martinus paid what has been ordered. Instead, the issue of interest from 6 June 2026 is a matter for me in enforcing the Partial Awards.
Because I am prepared to enforce the Partial Awards as if they were judgments of the Court, and the ordered date for payment has passed, the appropriate interest rate is the post-judgment interest rate under s 101 CPA.
Qube sought its costs of the hearing on the basis that costs ought to follow the event of seeking the Court’s enforcement of the Partial Awards, that was necessary where Martinus has refused to comply with those awards.
Martinus submitted that if the Partial Awards are enforced, the appropriate costs order was either no order as to costs, or alternatively, that the issue of costs is deferred until the finalisation of the arbitration as a whole.
I consider Qube is entitled to its costs of this hearing, and I reject Martinus’ submissions for the following reasons.
Martinus submitted that the present case resembles Argentine Republic v Petersen Energía Inversora*, S.A.U. (No 2)* [2026] NSWCA 121. There, Ward P, Payne and Mitchelmore JJA made no order as to costs in circumstances where the plaintiffs “took a risk of the adverse outcome that has eventuated” in commencing proceedings in NSW seeking enforcement of a US judgment that was under appeal and then overturned: at [12]-[13].
However, in that case, the US judgment was actually on appeal at the time the plaintiffs commenced proceedings in NSW. That is not the case here. The proceedings were commenced one day following the Third Partial Award being delivered, which had the effect of finally determining that Qube was entitled to restitution from Martinus because of the operation of the contractual time bars. Martinus failed to pay and Qube was entitled to seek enforcement.
The Partial Awards are final, they cannot be challenged. Merely because as a practical matter, Martinus may, at the finalisation of the arbitration be entitled to some further sum of money from Qube, does not mean that Qube has not been successful in these proceedings before me.
For those reasons, I make the following orders:
Pursuant to s 35(1) of the Commercial Arbitration Act 2010 (NSW), the Partial Awards of the Hon Robert McDougall KC dated 22 May 2026 and 4 June 2026 in the matter of an arbitration under Resolution Institute Arbitration Rules 2020, number RIARB20252015, be enforced as if they were judgments of the Court.
Judgment for Qube in the amount of $26,439,281.58 comprising principal and pre-award interest from 8 April 2026 to 5 June 2026 (inclusive).
Judgment for Qube for interest at the s 101 Civil Procedure Act 2005 (NSW) rate from 6 June 2026, with quantum to be agreed within 7 days of these orders, or, failing agreement, the parties are to approach Chambers of Peden J for the matter to be listed to determine the quantum.
Martinus to pay Qube’s costs of the proceedings as agreed or assessed.
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Qube Re Services (No 2) Pty Limited
Martinus Rail Pty Ltd
[2026] VSC 510
(2017) 52 VR 198
(2024) 283 CLR 172
(2016) 49 VR 732
(2011) 279 ALR 772
(2014) 232 FCR 361
(2024) 282 CLR 512
(2012) 201 FCR 535