The parties had entered into a settlement agreement which provided for a methodology derived by a special referee to calculate royalties payable with respect to hydrocarbons produced within a designated area in the Bass Strait. A dispute arose between the parties as to the proper calculation of the royalty. The parties agreed to refer certain aspects of the dispute to arbitration. However, they disagreed as to whether a dispute between them about the treatment of certain depreciation and decommissioning issues was arbitrable under the settlement agreement. The plaintiff commenced a proceeding in the Supreme Court of Victoria seeking declarations that the issues were not arbitrable pursuant to the agreement. The first to third defendants (applicants) applied for an order under s 7 of the International Arbitration Act 1974 (Cth) (IAA) staying the proceeding.