Johnson Winter & Slattery is acting for Lighthouse Corporation in proceedings against the Democratic Republic of Timor-Leste and the Electricity Department of Timor-Leste (together, Timor-Leste) for alleged breaches and unlawful repudiation of fuel supply contracts entered into in October and November 2010. Lighthouse Corporation is seeking damages of approximately US$328 million, plus interest and costs in the Supreme Court of Victoria.

Justice Peter Almond has dismissed an application brought by Timor-Leste seeking the dismissal or permanent stay of the proceedings on the asserted grounds that:

  1. the Supreme Court of Victoria had no jurisdiction as the claim concerns acts of State; alternatively
  2. it is a clearly inappropriate forum for the resolution of the dispute between the parties.

His Honour found, firstly, that the subject matter of the dispute was a commercial transaction which did not attract the act of State doctrine. Justice Almond also rejected the contention that the Supreme Court of Victoria was a clearly inappropriate forum for the dispute given it had “significant connecting factors to Victoria”, including that fact that the contract stated that it was to be governed by the laws of Victoria.

Justice Almond said “[for] present purposes, the disputed questions as to whether the contract has been made and whether it includes the term that the contract is to be governed by the law of Victoria are matter for the law of the forum. In my view, this is a major impediment to the defendants’ argument that the current forum is ‘clearly inappropriate’”.

Subject to any appeal, the proceedings will now continue in the Supreme Court of Victoria.