Australia, Aug. 13 -- New South Wales Land and Environment Court issued text of the following judgement on July 14:

1. This judgment involves a 'price cap' agreement for the wholesale supply of natural gas.

2. The plaintiff/cross-defendant is Weston Energy Pty Ltd ('Weston'), represented by S Fitzpatrick of senior counsel. The defendant/cross-claimant is National Ceramic Industries Australia Pty Ltd ('Ceramics'), represented by M S White of senior counsel.

3. Weston relied on the affidavits of:

1) Garbis Simonian ('Mr Simonian'), the director of Weston and father of James Aram Simonian, dated 10 August 2023 ('GS-A');

2) James Aram Simonian ('James'), a director of Weston, dated 2 December 2022 ('JS-A 1') and 10 August 2023 ('JS-A 2');

3) Amin Gholami ('Dr Gholami'), the Executive Manager of Customer Operations at Weston, dated 9 August 2023 ('AG-A').

4. Ceramics relied on the affidavits of Christopher Paul Schneider ('Mr Schneider'), the managing director of Ceramics, dated 9 February 2023 ('CPS-A 1'); 15 September 2023 ('CPS-A 2'); and 26 August 2024 ('CPS-A 3'). There was also an exhibit to these affidavits ('CPS-A Ex').

5. Ceramics also relied on two expert reports of Mr Arnold Shields ('Mr Shields'), dated 10 February 2023 ('the original report') (CB536-785) and 30 September 2024 ('the supplementary report') (Exhibit 1, tab 2) which relate to the quantum of damages sought by Ceramics.

6. With the exception of Mr Shields, each of the above-named deponents were cross-examined.

Background

7. Weston was a supplier of natural gas to commercial clients. Ceramics is a manufacturer of tiles and uses natural gas to fire its kilns.

8. In January 2018, the parties entered into a gas supply agreement for the 2018 and 2019 calendar years (JS-A 2 at [9]).

9. On 19 December 2019, the parties executed a new agreement for the 2020 and 2021 calendar years (JS-A 2 at [12]). In December 2020, this agreement was renegotiated, and was extended to cover the 2021 and 2022 calendar years (JS-A 2 at [14]). Under this arrangement, Weston would charge Ceramics the 'wholesale market price', that is, the 'spot price' of natural gas.

10. In early 2022, Mr Schneider had begun to search for new offers for gas supply contracts. It engaged NUS Consulting Group ('NUS Consulting') to assist (CPS-A 1 at [19]-[20]). In February 2022, Mr Schneider instructed Ralph Willy ('Mr Willy') of NUS Consulting to conduct a tender on behalf of Ceramics (CPS-A 1 at [21]-[23]).

11. Mr Willy conducted the tender, seeking offers on both 'capped spot price' contracts and fixed price contracts (CPS-A 1 at [24]).

12. On 15 February 2022, Mr Willy sent an email to Weston seeking both a fixed price offer and a capped spot price offer (JS-A 2 at [19]; CPS-A 1 at [24]). On 24 February, Mr Willy received a response from Dr Gholami with a fixed price quote (CPS-A 1 at [26]) ('the first Weston offer').

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/197f719b4c590c9322bb6b4e)

Disclaimer: Curated by HT Syndication.