In response to the oil crisis of the 1970’s on 1982 New Zealand entered into an Agreement with Mobil to participate in the erection of a synthetic gasoline. The agreement referred to ICSID arbitration. The plant was owned by the New Zealand Synthetic Fuel Co, 75% NZ & 25% Mobil. Art 11 of the agreement had the ‘most favoured purchaser’ MFP clause, which provided that in the event of sales to other purchasers being at prices lower than those paid by Mobil, a refund might be payable to Mobil
1986 NZ issued an act making unenforceable contracts which had the effect of lessening competition in a market.
1987 NZ said that article 11 was contrary to the Act and therefore, NZ suspended the MFP
1987 Mobil instituted proceedings under ICSID
NZ commenced interim injunction in NZ courts to restrain Mobil from continuing ICSID on the basis that any inquire of the application of the Act was not a dispute that had arisen under the Agreement
Mobil applied for a stay of proceedings under Arbitration (International Investment Disputes) Act