On 8 August 2025, the Queensland Supreme Court in Santos v Fluor¹ delivered a significant victory for Santos by adopting the referees report (with amendments) and requiring Fluor to pay $692 million to Santos, with further sums to be determined.

A brief history this time

The dispute concerned a cost reimbursable Engineering Procurement and Construction (EPC) contract entered into by Santos and Fluor in 2011 pursuant to which Fluor delivered the upstream component of the Gladstone Liquified Natural Gas (GLNG) project in Queensland between 2011 and 2014.

Primarily, Santos claimed the recovery of amounts overpaid to Fluor (exceeding $1.4 billion) which it claimed were excluded or otherwise not properly payable under the EPC contract.

In 2021, the matters in dispute were referred to three referees who produced a draft report and then a final report in 2023 which Santos sought to have adopted by the court.

Fluor sought to have the report set aside, including on the grounds of:

• • 1. apparent bias;
    2. failure to comply with the referral order;
    3. excess of jurisdiction;
    4. lack of procedural fairness; and
    5. miscarriage of justice.

Initially filed in 2016, the litigation has been hard fought by the parties for nearly 10 years and has longer to run given the outstanding matters to be heard and even longer still if (or when) Fluor seeks to appeal the decision.

Litigation on a monumental scale

The scale of litigation has been massive with numerous interlocutory disputes and 2 appeals so far (twelve decisions of the Queensland Supreme Court and Court of Appeal to date).

Applegarth J in the 2023 Santos v Fluor decision described the litigation as being “on a monumental scale”.²

Freeburn J noted several times the scale of the case and volume of documentation including the displeasure of the referees:

“The referees’ report was approximately 1,100 pages. As with the reference, the submissions made to this court were monumental in scale.”³

“…the oral submissions covered 43 sitting days. Many of the submissions referred extensively to the vast volume of material before the referees and the oral and written evidence tendered during the 62 sitting days before them. There were, as the referees described it, 171 lay witness statements, 76 expert reports, eight joint expert reports, 6115 pages of oral evidence and many, many thousands of documentary exhibits- not all of them short. A number of contract interpretation battles were waged. The contract and the three subcontracts were all substantial documents in their own right.”⁴

“The pleadings were reasonably accurately described by the referees as ‘quite extraordinarily prolix… of Byzantine complexity: labyrinthine, cumbersome and repetitive.”⁵

[the referees noted] “the parties inflicted prodigious quantities of submissions on us”⁶

“… the referees were critical of the pleadings which they describe as ‘extraordinarily verbose and repetitive’.”⁷

[the referees noted] “the degree of detail in the various pleadings is extensive to the point of absurdity”⁸

“Just reading and digesting the referees report and more than 3,639 pages of written submissions has been a substantial undertaking.”⁹

“One reason for mentioning the scale of the case is that on many occasions in the course of preparing these reasons, it has saved time to simply quote from a party’s submission, the referees’ reasons, a transcript or some other document, rather than taking time to reduce the passage to its elements. That was particularly useful in traversing the vast tundra that comprised the delay claims.”¹⁰

The decision itself is substantial, divided into 26 parts over 863 pages.

The decision

As noted above, it was held that the final report of the referees should be adopted with a number of qualifications and amendments imposed by the court.

The decision gives detailed reasons for rejecting Fluor’s claim to set aside the report including for the reasons summarised below.

Apparent bias

In refusing Fluor’s application to have the report set aside on grounds of bias, the court determined that “the criticisms made by the referees of Fluor, and Fluor’s case and its witnesses were the end-product of their decision-making process and would not have caused the fair-minded lay observer to think that the referees had prejudged the case, or that the referees had brought minds that were other than impartial to the decision-making process”.¹¹

Failure to comply with referral order

Fluor claimed the referees did not comply with the terms of the referral order which required the referees to consider questions raised on the pleadings as amended from time to time.

The referees criticised the pleadings in their report and noted they had “for the most part eschewed the traditional approach of seeking to describe the nature of the claims by reference to the pleadings”. Instead, they noted they had worked from the “very extensive written submissions of the parties“.¹²

The court determined that the referees complied with the referral order in that they did not expressly disregard the pleadings and referred to both the submissions and the pleadings. It was held that there was no error in this approach and that “it was reasonable for the referees to base their identification of the ‘essential arguments on the real issues’ on the submissions of the parties rather than directly from the pleadings”.¹³

Lack of procedural fairness

Fluor claimed the referees breached requirements of procedural fairness by not expressly having regard to every one of the submissions made by the parties.

The court rejected this claim noting:

“In this case that would mean that the referees’ task in articulating their reasons was to address each of the literally hundreds of submissions by both parties. Such a task would not only be an unbelievably onerous task. It is a task with the wrong focus. The purpose of the referees’ reasons was not to resolve every clash between the parties. The purpose was to indicate to the parties why the various decisions were made by the referees and to allow the parties to exercise such appeal rights, or other rights, as may be available to them.“¹⁴

Miscarriage of justice

Fluor claimed that the court should vacate the referral order on the grounds that the referee’s report resulted in a miscarriage of justice including due to the manner in which the referees dealt with the question of overlapping claims.

The court held that the referees were entitled to adopt the process they did and there was no basis for concluding that there was a miscarriage of justice.

Watch this space

Given the nature of the matters contested and the amount of money involved, it is likely that Fluor will look to appeal the decision on as many grounds as possible.

Fluor has noted that “the contracting principles addressed by the court have wide-sweeping consequences in the engineering and construction industry” and that “the company is reviewing the court decision and exploring its response including the timing of its appeal”.¹⁵

This article was written by Kevin Lock, Partner and Garima Singh, Senior Associate. 

¹ [2025] QSC 184.

² [2023] QSC 77 at [1].

³ [2025] QSC 184 at Part 1, [43].

⁴ Ibid at Part 1, [44].

⁵ Ibid.

⁶ Ibid at Part 1, [34].

⁷ Ibid at Part 4, [2].

⁸ Ibid at Part 4, [3].

⁹ Ibid at Part 1, [38].

¹⁰ Ibid at Part 1, [45].

¹¹ Ibid at Part 1, [7].

¹² Ibid at Part 4, [47].

¹³ Ibid at Part 4, [10].

¹⁴ Ibid at Part 6, [7].

¹⁵ Newsroom.fluor.com news release dated 11 August 2025.