Summary

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS - where the parties are associated in an unincorporated joint venture concerning the upstream component of the GLNG Project - where the respondents agreed to pay the Tri-Star Royalty to Tri-Star on petroleum produced and sold by the upstream component from the Fairview and Arcadia Tenements - where such an obligation arose from the Settlement Agreement between the respondents and Tri-Star - where the appellants obtained interests in the upstream component by entry into three categories of deeds with the respondents, namely the Sale and Purchase Deeds, the Royalty Assumption Deeds and the Deeds of Assumption - where, by the Sale and Purchase Deeds, the appellants acquired 70 per cent of the undivided legal interest in and to the Fairview and Arcadia Tenements from the respondents - where the deeds did not alter the respondents' obligations under the Settlement Agreement to pay to Tri-Star the Tri-Star Royalty - where, by the Royalty Assumption Deeds, the appellants agreed to pay a "Buyer's Percentage" of the Tri-Star Royalty payable by the respondents to Tri-Star - where a dispute arose between the respondents and Tri-Star as to the calculation of the Tri-Star Royalty for the period September 2015 to September 2020 - where the Settlement Agreement provided for the resolution of disputes by way of arbitration in the State of Texas - where Tri-Star submitted the dispute to arbitration pursuant to that arbitration clause - where an arbitrator attempted to apply Exhibit C of the Settlement Agreement to calculate the Tri-Star Royalty - where the Award was confirmed in the District Court of Harris County, Texas - where the parties agree that the Award is erroneous - where the respondents have paid the additional payments for the Tri-Star Royalty as determined by the Award to Tri-Star - where the respondents issued new invoices to the appellants for the additional amount according to their respective "Buyer's Percentage" - where the appellants did not pay these invoices - where the respondents brought proceedings against the appellants for the amounts the subject of the new invoices - where the learned primary judge found that on a proper construction of the Royalty Assumption Deeds, the Buyer's Percentage that the appellants were bound to pay the respondents pursuant to Exhibit C of the Settlement Agreement necessarily included the additional amount determined by the Award - where the appellants challenge this finding - whether the learned primary judge erred in construing the Royalty Assumption Deeds - whether the learned primary judge failed to give proper effect to the term "payable"; failed to distinguish between a separate arbitration agreement and a valuation provision; failed to correctly assess commercial risk; dismissed points of principle; and erred in finding that the appellants' construction required a theoretical determination of the Tri-Star Royalty.