How reasonable is a 'reasonable opportunity'? The Victorian Supreme Court considers the scope of procedural fairness in commercial arbitrations
Under the Commercial Arbitration Act 2011 (Vic) (the Act), parties to an arbitration must be given a reasonable opportunity of presenting their case (section 18 of the Act). This provision necessarily raises the question: what amounts to a 'reasonable opportunity' to present your case?
This was the central issue on appeal in the Victorian Supreme Court in Amasya Enterprises Pty Ltd v Asta Developments (Aust) Pty Ltd [2016] VSC 326. Amasya Enterprises Pty Ltd (Amasya) appealed against an arbitral award on the basis that they were denied procedural fairness in breach of section 18 of the Act because the arbitrator made the award on the basis of a claim that was not pleaded in the Notice of Dispute served by Asta Developments (Aust) Pty Ltd (Asta) and was not argued in the arbitration. The Court found that Amasya was afforded a reasonable opportunity to present their case, and dismissed the appeal. In doing so, Croft J clarified the requirements of procedural fairness applicable to commercial arbitrations. The Dispute Amasya and Asta entered into a construction contract which contained an arbitration agreement (Contract). Asta was the builder. Both parties purported to terminate the Contract after a number of disputes arose, and subsequently referred their respective claims to arbitration under the Contract. The principal issue in the arbitration was which party had rightfully determined the Contract. The arbitrator conducted a seven-day evidentiary hearing, at which the parties were represented by senior and junior counsel, evidence was tendered and witnesses were cross-examined. Following that hearing, the parties exchanged lengthy written submissions and there was a day-long final oral hearing. The arbitrator found that neither party was entitled to terminate the Contract, and found instead that the Contract had been mutually abandoned. The arbitrator then found that by reason of the mutual abandonment, Asta was entitled to its claim on a quantum meruit basis for the work which it had actually performed. The quantum meruit claim was an entitlement to reasonable remuneration for the work performed up to the point of abandonment. The Appeal Amasya sought an order to set aside the award on the grounds that it was 'unable to present its case' or alternatively, that the award was in conflict with the 'public policy of [Victoria]'. These claims were on the basis that Amasya was not afforded a sufficiently "reasonable opportunity" to