Proctor : June 2017
20 PROCTOR | June 2017 Turbines tussle may test free trade agreement Exploring domestic and international options for settlement The New South Wales Court of Appeal has dismissed an appeal by Power Rental Op Co Australia (OpCo) against a decision by the New South Wales Supreme Court which held that the interest in millions of dollars’ worth of wind turbines vested in Forge Group Power Pty Ltd (Forge) upon it entering administration due to the operation of the Personal Property Securities Act 2009 (Cth) (PPSA).1 This article considers what steps are now available to OpCo or its parent company, APR Energy PLS (APR), including pathways to investor-state arbitration against the Commonwealth of Australia. Background Forge entered into an agreement to lease four mobile gas turbines from General Electric International Inc. (GE) for a fixed-term period. In October 2013, APR bought the business that leased the turbines to Forge. As a consequence, the lease and title of the turbines were subsequently assigned to the two US subsidiaries of APR, OpCo and Power Rental Asset Co Two LLC. The turbines were subject to a lease when Forge went into voluntary administration in March 2014. At first instance, the court found that the lease for the turbines was a PPS lease under section 13 of the PPSA, which gave rise to a security interest to GE. Accordingly, Justice Hammerschlag held that because APR had failed to register its security interest under the Personal Property Securities Register (PPSR) the interest in the turbines automatically vested in Forge immediately prior to it entering into voluntary administration.