11 ReSolution | Nov 2017
Arbitration: when a final award is not final
Cont...
Croft J noted that the fact that a party did not make a request under s 33(5) for an issue to be the subject of a further award may be relevant to the court’s discretion in a setting aside application by that party under s 34. As s 33(5) had no application in the present case, this was not a relevant consideration. His Honour also noted that a party may request an additional award (under s 33(5)) and apply for an award to be set aside (under s 34) simultaneously.
Turning to L’s stay application, Croft J observed that unless the Court found that the arbitration agreement was inoperative or incapable of being performed, it was obliged to stay B’s application to the court for it to determine the remaining issue. His Honour noted that “inoperative or incapable of being performed”, for the purposes of s 8, was a high bar to satisfy. Practical impossibility as opposed to mere inconvenience was required: [34]
Croft J rejected the submission that an arbitration agreement is inoperative when an arbitrator determines not to decide all of the matters contained in the reference to arbitration: [37]. Indeed, the fact that an arbitrator is rendered functus officio does not result in an arbitration agreement being inoperative or incapable of being performed: [14]. Thus, whether the arbitrator was functus officio was irrelevant for the purposes of L’s stay application: [37].
Consequently, B’s application to set aside part of the award failed, and L’s application for a stay succeeded. The Court concluded that the arbitrator’s mandate continued to determine the remaining issue, and that either party could apply to the arbitrator to re-engage the arbitral process to determine that issue.
Comment
Accepting for the moment that the arbitrator decided, expressly, not to decide the Supreme Court costs claim “at that time on the then available evidence”, it is incongruous that he styled his award as a Final Award and made no directions for the later determination of the outstanding issue. Indeed, it is surprising that the arbitrator neither requested further evidence before delivering his Final Award nor decided the issue on the available evidence.
Nevertheless, the judgment is instructive in illuminating, amongst other things, what constitutes a final award and the operation of ss 33(5) and 34(2)(a)(iii) of the CAA.
© 2015 Commercial Bar Association of Victoria (CommBar®)
Conclusion
This decision recognises the binding nature of consent orders made by the Court after settlement during a mediation.
It clarifies that, although a mediation may not always be conducted in the way that a certain party expects, this is no basis for overturning an agreement reached during mediation and subsequently endorsed by court order. For a court to set aside consent orders after they have been entered, a party must prove that one of the circumstances provided by the relevant Court Rules applies, or that the bargain between the parties should be regarded as void or voidable.
From a mediator's perspective, the decision confirms that it is appropriate for a mediator to encourage parties to participate in a mediation process in preference to litigation, and that this will not necessarily constitute undue pressure or duress.
Note: The above material provides a summary only of the subject matter covered, without an assumption of a duty of care by Clayton Utz. The material is not intended to be nor should it be relied upon as a substitute for legal or other professional advice. Copyright in the material is owned by Clayton Utz.
Cecile Bester
Graduate
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Partner
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