Southern Cross Electrical Engineering arbitration proceedings

Southern Cross Electrical Engineering (ASX:SXE) has announced that its subsidiary, Heyday, has started arbitration proceedings against the CPB Dragados Samsung Joint Venture (CDSJV). This move relates to the WestConnex M5 motorway tunnel project in Sydney. Heyday is seeking $22 million in compensation for costs incurred due to project delays and disruptions allegedly caused by CDSJV's mismanagement. The arbitration is under the Australian Centre for International Commercial Arbitration (ACICA) Expedited Arbitration Rules 2021, with an expected resolution within the current financial year.

Southern Cross Electrical Engineering arbitration outlook

Southern Cross Electrical Engineering's subsidiary, Heyday, is pursuing arbitration against CDSJV over the WestConnex M5 project in Sydney. The dispute centers on $22 million in claims for additional costs due to delays and disruptions attributed to CDSJV's alleged mismanagement. Despite attempts at negotiation and mediation, resolution was not reached, leading to arbitration. The process will follow ACICA's Expedited Arbitration Rules 2021, aiming for resolution within the current financial year. SCEE's Managing Director, Graeme Dunn, emphasized the necessity of this legal avenue while remaining open to alternative resolutions. This arbitration underscores the complex nature of large infrastructure projects and the potential financial implications.

Insights from SCEE on arbitration decision

We are reluctant to pursue arbitration and this is unprecedented for the SCEE Group. However, Heyday needs to pursue its contractual rights, but remains open to a commercial resolution. No further public comments will be made during the proceedings.