Papua New Guinea’s $3 Billion Arbitration

Dentons has won a final judgement from Papua New Guinea’s (PNG) Supreme Court, staying a US$3 billion arbitration against its client, the Independent State of Papua New Guinea.

Arbitration commenced in 2015, when IT&S claimed US$3 billion against the State for not actioning a claimed Project Agreement with the State for an extremely large scale forestry and road project in Western Province.

Acting on instructions from the PNG Attorney General and State Solicitor Dentons’ PNG litigation team, led by Partner Erik Andersen as lead counsel, contested the arbitration and challenged its jurisdiction in the PNG courts.

After a lengthy court battle Dentons received the judgement in the final court of appeal. The Supreme Court ruled that claiming by arbitration was not authorised, permanently staying the arbitration and awarding all costs to the State. This was an extremely significant win, given at current exchange rates the size of the arbitration claim represents approximately one-third of the country’s annual budget.

Dentons team was led by Partners Erik Andersen (Picture) and Stephen Massa.

Involved fees earner: Erik Andersen – Dentons; Stephen Massa – Dentons;

Law Firms: Dentons;

Clients: Government of Papua New Guinea;

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Author: Michael Patrini