High Court rules NZ appropriate forum to hear Tongan government dispute with cable company

The New Zealand High Court has ruled that New Zealand is the right forum for a dispute between the Tongan government, Tonga Cable Ltd and Hawaiki Submarine Cable.

The ruling was made as part of a legal dispute between the three parties over a debt of US$1.4 million which Hawaiki Cable says it is owed.

According to Kaniva News, the Cable company had wanted the case heard in New Zealand, but the Tongan defendants said Hawaiki Cable required leave to serve proceedings on it in Tonga and argued that New Zealand was not a legally convenient location.

However, both sides chose to approach the case using New Zealand law.

Hawaiki Submarine Cable owns and operates a fibre optic submarine cable network, which runs between New Zealand, Australia, Hawai’i and the mainland USA.

It provides international data bandwidth capacity to Hawaiki’s customers.

Hawaiki Cable sued the Tongan government and Tonga Cable Ltd over US$1.4 million it claims is owed a binding agreement.

Under the agreement Hawaiki Cable laid a spur of the underseas cable to allow Tonga to connect to the Hawaiki cable network. The Kingdom of Tonga was guarantor for the punctual payment of the debt.

The terms of the agreement provided that by March 31, 2019, Hawaiki Cable  would build the branching unit and complete a marine survey covering the route of the cable spur from the branching unit to Tonga.

Tonga Cable agreed to pay US$1.4 million on the date of execution of the agreement.

It would  pay US$1.4 million on or before  June 30, 2018 and the date on which the Hawaiki cable network and the branching unit was fully built, operational and ready for service;

Tonga Cable paid US$1.4 million to Hawaiki Cable’s bank account on October 6, 2016.

The marine survey was completed in July 2017. Following acceptance testing in New Zealand and the USA, the Hawaiki cable network and the branching unit were fully built, operational and in-service as from about  July 20, 2018.

In July 2018, an invoice for US$1.4 million was sent to Tonga Cable. Despite the demand, neither Tonga Cable  nor the Kingdom paid the sum.

Subsequently, Hawaiki Cable took legal action.

Associate Judge P.J.Andrew said both sides had chosen to approach the case under New Zealand law and there would be no real difficulty in enforcing a New Zealand judgement in Tonga.

“While there can be no suggestion that the courts of Tonga are unable to determine an apparently straightforward claim under an alleged guarantee, the parties’ choice (which, by implication, is New Zealand law) should be respected in applying New Zealand law as the proper law of contract.

“I thus conclude that New Zealand is the appropriate forum.”