Cameron Australasia Pty Ltd v AED Oil Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
ARBITRATION LIST

S CI 2015 01186

CAMERON AUSTRALASIA PTY LTD	Applicant
v
AED OIL LIMITED (subject to deed of company arrangement)	Respondent

S CI 2015 01292

AED OIL LIMITED (subject to deed of company arrangement)	Applicant
v
CAMERON AUSTRALASIA PTY LTD	Respondent

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JUDGE:	CROFT J
WHERE HELD:	Melbourne
DATE OF HEARING:	21 April 2015
DATE OF JUDGMENT:	1 May 2015
CASE MAY BE CITED AS:	Cameron Australasia Pty Ltd v AED Oil Ltd
MEDIUM NEUTRAL CITATION:	[2015] VSC 163

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ARBITRATION — Application to set aside domestic award — Commercial Arbitration Act 2011 s 34(2)(a)(ii), s 34(2)(a)(iv) — Refusal by Tribunal to allow party to re-open its case not grounds for setting aside following strategic concession by party — Refusal to allow reliance on an expert report where expert not called, not grounds for setting aside — Model Law on International Commercial Arbitration — TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd (2014) 311 ALR 387 — Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in liq) (No 1) [2012] 4 HKLRD 1 — Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114 — AKN v ALC [2015] SGCA 18.

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APPEARANCES:	Counsel	Solicitors
For the Applicant (S CI 2015 01186)	Mr P. Solomon QC with Dr C. Parkinson	King & Wood Mallesons
For the Respondent (S CI 2015 01186)	Mr D.J. Batt QC with Mr C.P. Young	Maddocks Lawyers
For the Applicant (S CI 2015 01292)	Mr D.J. Batt QC with Mr C.P. Young	Maddocks Lawyers
For the Respondent (S CI 2015 01292)	Mr P. Solomon QC with Dr C. Parkinson	King & Wood Mallesons

TABLE OF CONTENTS

Introduction......................................................................................................................................... 1

Procedural background..................................................................................................................... 2

General principles.............................................................................................................................. 3

Relevant principles on applications to set aside awards.......................................................... 10

“Unable to present its case” ground............................................................................................. 17

Procedural decision to refuse to allow reliance on the report of Terrell................................ 33

Enforcement application................................................................................................................. 39

Conclusions and orders.................................................................................................................. 39

HIS HONOUR:

Introduction

There are two applications before the Court:

(a)Cameron Australasia Pty Ltd’s (“Cameron”) application dated 17 March 2015 and made under s 34(2) of the Commercial Arbitration Act 2011 (“the Act”) to set aside certain awards[1] in an arbitration between AED Oil Limited (subject to a deed of company arrangement) (“AED”) (as claimant) and Cameron (as respondent); and
(b)AED’s application dated 23 March 2015 and made under s 35 of the Act for enforcement of the awards.

[1]Cameron’s application is made in respect of the arbitral awards dated 17 December 2014 (Bonnell Affidavit, Exhibit Book Tab 3), 3 March 2015 (Bonnell Affidavit, Exhibit Book Tab 4), and 9 March 2015 (Bonnell Affidavit, Exhibit Book Tab 5).

The evidence before the Court in respect of the setting aside application is contained in—

(a)the affidavit and exhibits of Mr Max Bonnell (“Bonnell”) affirmed 13 March 2015 (“the Bonnell Affidavit”);
(b)the affidavit and exhibits of Bonnell affirmed 30 March 2015 (“the Further Bonnell Affidavit”); and
(c)the affidavit of Mr David Newman sworn 13 April 2015 (“the Newman Affidavit”).

The evidence before the Court in respect of AED’s enforcement application is contained in the affidavit of Mr Newman sworn 20 March 2015.

The focus of Cameron’s setting aside application is not on the awards, but on two procedural rulings made by the Tribunal:

(a)The first was a decision,[2] made about 6 months after the hearing had concluded, not to allow Cameron to re-open the hearing in order to withdraw its voluntary admission made immediately prior to the hearing that it owed a duty of care to AED, to amend its defence to allow it positively to dispute the existence of the duty and to present submissions that it owed no duty of care to AED.
(b)The second was a decision,[3] made in advance of the hearing, not to allow Cameron to rely upon the expert report of Mr Robert Terrell (“Terrell”) in circumstances where he was not to be called as a witness by Cameron and thus would not give oral evidence adopting the report or be able to be cross-examined by AED.
[2]Bonnell Affidavit, Exhibit Book Tab 15 (“Ruling (5 December 2014)”).
[3]Bonnell Affidavit, Exhibit Book Tabs 3, [17]–[24], 17.

Procedural background

In September and October 2007, AED incurred costs in rectifying a leak to an annulus (gas lift) hub connector and a production flowline hub connector on a subsea tree at the Puffin 8 well that formed part of the Puffin Field in the Timor Sea. AED contended that the leaks were traceable to, and caused by, a decision made on 31 March 2007 by an employee of Cameron to drill out the inside diameter of some washers which were then placed on the top side of retained dogs in the two hub connectors. Liability was denied by Cameron.

The parties agreed to resolve the dispute by arbitration and agreed to be bound by the terms of a document titled “Dispute Resolution Deed”.[4] AED referred the dispute to arbitration under the terms of the Dispute Resolution Deed by request dated 20 March 2013.[5]
[4]Bonnell Affidavit, Exhibit Book Tab 1, B27–B32.
[5]Bonnell Affidavit, Exhibit Book Tab 2.

Mr John Joseph Andrew Sharkey AM was appointed arbitrator (referred to, for convenience, as “the Tribunal”) to determine the dispute. Under the provisions of the Dispute Resolution Deed, the arbitration was agreed to be conducted under the Rules for the Conduct of Commercial Arbitration most recently published after the date of the Dispute Resolution Deed by the Institute of Arbitrators and Mediators Australia. The relevant rules for the purposes of the Dispute Resolution Deed are the IAMA Rules for the Conduct of Commercial Arbitrations (13 August 1999) (“the IAMA Rules”). It is common ground between the parties that the juridical seat of the arbitration was Victoria, with the arbitration to be held in Melbourne.[6]
[6]Dispute Resolution Deed, cl 17, 20.3.

The Tribunal conducted a hearing from 16 to 20 June 2014 and published its reasons on liability and quantum in the Partial Final Award dated 17 December 2014;[7] its reasons on the timing of payment of the sum Cameron was liable to pay under the Partial Final Award (17 December 2014) in the Partial Final Award dated 3 March 2015;[8] and its reasons on costs in the Final Award dated 9 March 2015.[9] In the result, the Tribunal found that Cameron had breached its duty of care to AED, and declared that Cameron was liable to pay damages and interest to AED in the amount of US$8,130,182, plus costs.
[7]Bonnell Affidavit, Exhibit Book Tab 3 (“Partial Final Award (17 December 2014)”).
[8]Bonnell Affidavit, Exhibit Book Tab 4.
[9]Bonnell Affidavit, Exhibit Book Tab 5.

General principles

Cameron relies upon ss 34(2)(a)(ii) and (iv) of the Act. These provisions must, however, be read in the context of both the provenance of the Act and also a number of other related and contextual provisions contained within the Act.

In terms of overall context and provenance, it is critical to have regard to ss 1AC and 2A of the Act. These provisions are as follows:[10]
[10]Commercial Arbitration Act 2011 ss 1AC, 2A (emphasis in original).

1AC Paramount object of Act
(1)The paramount object of this Act is to facilitate the fair and final resolution of commercial disputes by impartial arbitral tribunals without unnecessary delay or expense.
(2)This Act aims to achieve its paramount object by—
(a)enabling parties to agree about how their commercial disputes are to be resolved (subject to subsection (3) and such safeguards as are necessary in the public interest); and
(b)providing arbitration procedures that enable commercial disputes to be resolved in a cost effective manner, informally and quickly.
(3)This Act must be interpreted, and the functions of an arbitral tribunal must be exercised, so that (as far as practicable) the paramount object of this Act is achieved.

(4)Subsection (3) does not affect the application of section 35 of the Interpretation of Legislation Act 1984 for the purposes of interpreting this Act.
…

2A International origin and general principles (cf Model Law Art 2A) s 2A
(1)Subject to section 1AC, in the interpretation of this Act, regard is to be had to the need to promote so far as practicable uniformity between the application of this Act to domestic commercial arbitrations and the application of the provisions of the Model Law (as given effect by the International Arbitration Act 1974 of the Commonwealth) to international commercial arbitrations and the observance of good faith.

(2) [ omitted ]
(3)Without limiting subsection (1), in interpreting this Act, reference may be made to the documents relating to the Model Law of—
(a)the United Nations Commission on International Trade Law; and
(b)its working groups for the preparation of the Model Law.

(4)Subsection (3) does not affect the application of section 35 of the Interpretation of Legislation Act 1984 for the purposes of interpreting this Act.

Note
This section differs from the Model Law. Art 2A(1) has been changed as a consequence of the application of the Act to domestic (instead of international) commercial arbitrations. Art 2A(2) is omitted because it is covered by the provision referred to in section 1AC(4). Subsections (3) and (4) reflect section 17 of the International Commercial Arbitration Act 1974 of the Commonwealth.

Apart from providing a paramount object — a “guiding star” — for the interpretation of the provisions of the Act, s 1AC also reflects the philosophy and approach of the international instrument which the provisions of the Act reflect and substantially reproduce in the same terms. The international instrument in question is the product of the work of the United Nations Commission on International Trade Law (“UNCITRAL”). In June 1985, UNCITRAL adopted the Model Law on International Commercial Arbitration (“the Model Law”). The United Nations General Assembly recommended that—[11]

all States give due consideration to the Model Law … in view of the desirability of uniformity of the law of arbitral procedures and the specific needs of international commercial arbitration practice.

The Model Law was amended for the first time by UNCITRAL in December 2006. Again, the General Assembly resolved that all States “give favourable consideration” to enacting the revised articles of the Model Law.[12]

[11]Model Law on International Commercial Arbitration of the United Nations Commission on International Trade Law, GA Res 40/72, UN GAOR, 40^th sess, 112^th mtg, Supp No 17, UN Doc A/RES/40/72 (11 December 1985) annex I [2].

[12]Revised Articles of the Model Law on International Commercial Arbitration of the United Nations Commission on International Trade Law, and the Recommendation Regarding the Interpretation of Article II, Paragraph 2, and Article VII, Paragraph 1, of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Done at New York, 10 June 1958, GA Res 61/33, UN GAOR, 61^stsess, 64^th mtg, Agenda Item 77, Supp No 17, UN Doc A/RES/61/33 (18 December 2006) annex I.

The Victorian Parliament made clear its intention to enact the Model Law in the “Note” which appears in the preliminary part of the Act, in the following terms:[13]

Sections of this Act that contain a reference to the “Model Law” in the heading are substantially the same as the provisions of the UNCITRAL Model Law on International Commercial Arbitration … so as to be as uniform as possible with the UNCITRAL Model Law. Some changes have been made to those provisions of the Act based on the UNCITRAL Model Law to amend or supplement the provisions in their application to domestic arbitrations in Victoria or to accommodate modern drafting styles and conventions (for example, provisions are drafted in gender neutral terms and archaisms are replaced with modern alternatives). Notes draw attention to substantive changes.

[13]Commercial Arbitration Act 2011 pt 1A (emphasis added).

The international provenance of the Act is again made clear in the operative provisions of s 2A. In relation to these provisions, Maxwell P, in Subway Systems Australia Pty Ltd v Ireland said:[14]

24The Victorian Parliament here expressed its intention that the interpretation of the … Act should ensure “so far as practicable” that there was uniformity between:
(a)the application of the … Act to domestic commercial arbitrations; and
(b)the application of the provisions of the Model Law (as enacted at the Commonwealth level) to international commercial arbitrations.
[14][2014] VSCA 142 (1 July 2014) (emphasis in original).

25The Commonwealth Act is the International Arbitration Act 1974 (Cth). It has the following objects:
2D Objects of this Act
The objects of this Act are:
(a)to facilitate international trade and commerce by encouraging the use of arbitration as a method of resolving disputes; and
(b)to facilitate the use of arbitration agreements made in relation to international trade and commerce; and
(c)to facilitate the recognition and enforcement of arbitral awards made in relation to international trade and commerce; and
(d)to give effect to Australia’s obligations under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted in 1958 by the United Nations Conference on International Commercial Arbitration at its twenty-fourth meeting; and
(e)to give effect to the UNCITRAL Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law on 21 June 1985 and amended by the United Nations Commission on International Trade Law on 7 July 2006; and
(f)to give effect to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States signed by Australia on 24 March 1975.[15]

26As will appear, uniformity of interpretation across jurisdictions has been viewed as of paramount importance where a treaty (or a law implementing a treaty) is concerned with international commerce. It is therefore significant that the Victorian Parliament has expressed its own intention that the application of the Model Law to domestic arbitrations should be in line with its application to international arbitrations.
27The fact that the question in issue here is governed by the Victorian embodiment of the Model Law, rather than by the Model Law as implemented by another State or by the Commonwealth, emphasises the importance of uniformity. The fact that an international supplier of goods and services will very likely be subject, in a federation like Australia, to the laws of different States would seem to be a powerful argument for ensuring uniformity “so far as practicable”.

[15]International Arbitration Act 1974 (Cth) s 2D.

Of critical importance in the present proceedings is s 18 of the Act, which reflects Article 18 of the Model Law:

18 Equal treatment of parties (cf Model Law Art 18)
The parties must be treated with equality and each party must be given a reasonable opportunity of presenting the party’s case.

Note
This section differs from the Model Law to the extent that it requires a party to be given a “reasonable”, instead of “full”, opportunity of presenting the party’s case.

Also of significance is s 19 of the Act which, in turn, reflects Article 19 of the Model Law, which confers broad powers upon an arbitral tribunal with respect to the conduct of arbitration proceedings. The provisions of s 19 are as follows:

19 Determination of rules of procedure (cf Model Law Art 19)
(1)Subject to the provisions of this Act, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings.
(2)Failing such agreement, the arbitral tribunal may, subject to the provisions of this Act, conduct the arbitration in such manner as it considers appropriate.
(3)The power conferred on the arbitral tribunal includes the power to determine the admissibility, relevance, materiality and weight of any evidence.
(4)The power conferred on the tribunal also includes the power to make orders or give directions for the examination of a party or witness on oath or affirmation.
(5)For the purposes of the exercise of the power referred to in subsection (4), the arbitral tribunal may administer any necessary oath or take any necessary affirmation.
(6)An order made or direction given by an arbitral tribunal in the course of arbitral proceedings is, by leave of the Court, enforceable in the same manner as if it were an order of the Court and, where leave is so given, judgment may be entered in terms of the order or direction.

Note
This section (other than subsections (4), (5) and (6)) is substantially the same as Art 19 of the Model Law. Subsections (4), (5) and (6) elaborate on the powers conferred on arbitral tribunals.

The only provisions in the Model Law which provide for recourse against an arbitral award are the provisions of Article 34, which provide for an application for setting aside as exclusive recourse against an arbitral award. These provisions are reflected in s 34 of the Act, in the following terms:

34Application for setting aside as exclusive recourse against arbitral award (cf Model Law Art 34)
(1)Recourse to the Court against an arbitral award may be made only by an application for setting aside in accordance with subsections (2) and (3) or by an appeal under section 34A.

Note
The Model Law does not provide for appeals under section 34A.
(2)An arbitral award may be set aside by the Court only if—
(a)the party making the application furnishes proof that—
(i)a party to the arbitration agreement referred to in section 7 was under some incapacity; or the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication in it, under the law of this State; or
(ii)the party making the application was not given proper notice of the appointment of an arbitral tribunal or of the arbitral proceedings or was otherwise unable to present the party’s case; or
(iii)the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside; or
(iv)the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Act from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Act; or

(b)the Court finds that—
(i)the subject-matter of the dispute is not capable of settlement by arbitration under the law of this State; or
(ii)the award is in conflict with the public policy of this State.

(3)An application for setting aside may not be made after 3 months have elapsed from the date on which the party making that application had received the award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal.
(4)The Court, when asked to set aside an award, may, where appropriate and so requested by a party, suspend the setting aside of proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the arbitral tribunal’s opinion will eliminate the grounds for setting aside.

The reference to s 34A is a reference to a provision which appears only in the Act with respect to arbitrations within the ambit of its provisions, namely, domestic arbitrations. It is not a provision which is reflected in the International Arbitration Act 1974 (Cth), which, broadly speaking, enacts the provisions of the Model Law for the purpose of international commercial arbitrations. The provisions of s 34A of the Act allow for an appeal on a question of law arising out of an arbitral award, but only in limited circumstances, and only on an “opt-in” basis. Appeals against domestic arbitral awards on questions of law have a long history, both in England and in Australia.[16] Having regard to this history, it is unsurprising that it was thought appropriate to include limited provision for appeals on questions of law arising out of domestic arbitral awards in these terms; but to maintain the quite limited recourse against awards and provisions for refusal of recognition or enforcement of arbitral awards in terms of Articles 34 to 36 of the Model Law with respect to international commercial arbitration.

[16]Doug Jones, Commercial Arbitration in Australia (Thomson Reuters, 2^nd ed, 2013) 491–517.

Having regard to these matters and the inclusion of specific provisions for appeals on a question of law in s 34A, it is clear from the structure of the Act that the provisions of s 34 contemplate quite limited court intervention and nothing in the nature of an appeal on a question of law. Moreover, international jurisprudence with respect to Model Law Article 34, from which s 34 of the Act is derived, make this abundantly clear.[17] Reference is made to a number of authorities in this respect in the reasons which follow.
[17]See, eg, AKN v ALC [2015] SGCA 18, particularly the passages from the judgment of Menon CJ set out below at [21].

The provisions of the Act to which reference has been made, particularly the paramount object as articulated in s 1AC and the broad empowering provisions of s 19, are also reflected in the IAMA Rules, particularly rules 10 and 13, as follows:

RULE 10General Duty of Arbitrator
1.The Arbitrator shall adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay and expense, so as to provide an expeditious cost-effective and fair means of determining the matters in dispute.
…
RULE 13Procedural Directions
1.Subject to any Statute Law or prior written agreement of the parties, and the requirements of Rule 10, the Arbitrator shall make such directions or rulings in respect of procedural and evidentiary matters as he or she sees fit.
…

Relevant principles on applications to set aside awards

The parties made extensive reference, for the purposes of these proceedings, to decisions of courts in other jurisdictions with respect to the interpretation and operation of the relevant Model Law provisions. Particular reference was made to decisions of the courts of Singapore and Hong Kong. Having regard to the international provenance of the provisions of the Act, this is entirely appropriate in the present context, as explained in the preceding reasons. Moreover, in TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd, the Full Court of the Federal Court of Australia stated its intention in the interpretation of legislation mirroring the Model Law, so far as is possible, to create or maintain a “degree of international harmony and concordance of approach to international commercial arbitration … by reference to the reasoned judgments of common law countries in the region, such as Singapore, Hong Kong and New Zealand.”[18] In relation to the general principles to be applied to such applications, the parties are relevantly in agreement. The differences between them arise on the application of those principles with respect to the two grounds relied upon by Cameron under the provisions of s 34(2) of the Act, namely, the “unable to present its case” ground and the “incorrect procedure” ground.[19]
[18]TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd (2014) 311 ALR 387 at 405 [75].
[19]These grounds are those provided for in s 34(2)(ii) and (iv) of the Act.

As a general proposition, reference is made by Cameron to the approach stated and adopted by the Hong Kong Court of Appeal in Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in liq) (No 1).[20] With respect to an application for setting aside under Article 34 of the Model Law, Tang V-P (with whom Kwan and Fok JJA agreed) said:[21]

The Court’s approach to such application is not controversial. The Court is concerned with “the structural integrity of the arbitration proceedings”.[22] The remedy of setting aside [which is not materially distinguishable from refusal of enforcement under Article 36] is not an appeal, and the Court will not address itself to the substantive merits of the dispute, or to the correctness or otherwise of the award, whether concerning errors of fact or law.

[20][2012] 4 HKLRD 1.

[21]Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in liq) (No 1) [2012] 4 HKLRD 1 at 7 [7].

[22]Kanoria v Guinness [2006] EWCA Civ 222, [30].

Before moving to more particular aspects of these principles as they apply to the setting aside of awards of arbitral tribunals, it is salutary and instructive to set out the statement of principle by the Singapore Court of Appeal in AKN v ALC,[23] where Menon CJ (delivering the judgment of the Court of Appeal) said:[24]
[23][2015] SGCA 18.
[24][2015] SGCA 18, [37]–[39] (emphasis in original).

37A critical foundational principle in arbitration is that the parties choose their adjudicators. Central to this is the notion of party autonomy. Just as the parties enjoy many of the benefits of party autonomy, so too must they accept the consequences of the choices they have made. The courts do not and must not interfere in the merits of an arbitral award and, in the process, bail out parties who have made choices that they might come to regret, or offer them a second chance to canvass the merits of their respective cases. This important proscription is reflected in the policy of minimal curial intervention in arbitral proceedings, a mainstay of the Model Law and the [International Arbitration Act (Singapore, cap 143A, 2002 rev ed)].[25]
[25]BLC v BLB [2014] 4 SLR 79.
38In particular, there is no right of appeal from arbitral awards. That is not to say that the courts can never intervene. However, the grounds for curial intervention are narrowly circumscribed, and generally concern process failures that are unfair and prejudice the parties or instances where the arbitral tribunal has made a decision that is beyond the scope of the arbitration agreement. It follows that, from the courts’ perspective, the parties to an arbitration do not have a right to a “correct” decision from the arbitral tribunal that can be vindicated by the courts. Instead, they only have a right to a decision that is within the ambit of their consent to have their dispute arbitrated, and that is arrived at following a fair process.
39In the light of their limited role in arbitral proceedings, the courts must resist the temptation to engage with what is substantially an appeal on the legal merits of an arbitral award, but which, through the ingenuity of counsel, may be disguised and presented as a challenge to process failures during the arbitration. A prime example of this would be a challenge based on an alleged breach of natural justice. When examining such a challenge, it is important that the court assesses the real nature of the complaint. Among the arguments commonly raised in support of breach of natural justice challenges are these:
(a)that the arbitral tribunal misunderstood the case presented and so did not apply its mind to the actual case of the aggrieved party;
(b)that the arbitral tribunal did not mention the arguments raised by the aggrieved party and so must have failed to consider the latter’s actual case; and
(c)that the arbitral tribunal must have overlooked a part of the aggrieved party’s case because it did not engage with the merits of that part of the latter’s case.

Although such arguments may be commonly raised, more often than not, they do not, in fact, amount to breaches of natural justice.

Similarly, the Court of Appeal in Sauber Motorsport AG v Giedo van der Garde BV said:[26]

Courts should not entertain a disguised attack on the factual findings or legal conclusions of an arbitrator “dressed up as a complaint about natural justice”.[27] Errors of fact or law are not legitimate bases for curial intervention.[28] Unfairness in any particular case will depend upon context, and all the circumstances of that case.[29]

[26][2015] VSCA 37 (12 March 2015) [8].

[27]TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd (2014) 311 ALR 387 at 398 [54].

[28]TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd (2014) 311 ALR 387 at 414 [105].

[29]TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd (2014) 311 ALR 387 at 409–10 [86].

In the context of this general approach, the parties made more detailed submissions, focused on the provisions of Article 34 of the Model Law and its legislative derivatives in various jurisdictions. The submissions of the parties are not at odds in this respect and, read together, do, in my view, provide a helpful and comprehensive review of the authorities with respect to these provisions. For this reason, it is most useful to set these submissions out with the references to the authorities which they contain. Thus, Cameron submits:[30]
[30]Submissions by Cameron in Support of Application to Set Aside Award (31 March 2015) [20]–[23].

20.The following principles emerge from recent decisions in Hong Kong and Singapore as to the proper application of Art 34 of the Model … [Law].
(a)Domestic courts have a restricted role in the arbitral process.[31]
[31]Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114 at 128 [46].
(b)The setting aside mechanism does not give rise to a right of recourse simply because the arbitrator has made an error of law and/or fact. [32]
[32]Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114 at 134–5 [67] citing BLC v BLB [2014] 4 SLR 79.
(c)The setting aside application is not to be abused by a party who, with the benefit of hindsight, wished he had pleaded or presented his case in a different way before the arbitrator.[33]
[33]Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114 at 134–5 [67].
(d)The court’s power to set aside a decision under the analogue to s 34(2)(a) is a discretionary power. While prejudice to the party seeking to set aside the award is not a requirement of the provision, it is to be understood in the context of the discretionary nature of the remedy, such that a Court may refuse to set aside an award notwithstanding a violation of the provision if the Court is satisfied that the outcome could not have been different.[34] If the Court has no basis to conclude that the same result would be reached, the award should be set aside.[35]
[34]Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in liq) (No 1) [2012] 4 HKLRD 1 at 36 [101], at 38 [106]; Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114 at 132–4 [60]–[64], at 149–51 [118]–[125], at 153 [134].
[35]Brunswick Bowling & Billiards Corporation v Shanghai Zhonglu Industrial Co Ltd [2011] 1 HKLRD 707 at 724–5 [68]–[69].

21.Further to the above, the following principles emerge in relation to the analogue provision to s 34(2)(a)(ii) of the Act.
(a)It includes both substantive and procedural aspects.[36]
[36]Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in liq) (No 1) [2012] 4 HKLRD 1 at 33–4 [92] citing Corporacion Transnacional de Inversiones SA de CV v STET International SpA (1999) 45 OR (3d) 183, [33].
(b)The tribunal need only accord each party a “reasonable opportunity” to present its case (in contradistinction to the opportunity to present any case it wants) (which is expressly reflected in s 18 of the Act).[37]
[37]Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in liq) (No 1) [2012] 4 HKLRD 1 at 35 [95]; Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114 at 150 [123]–[124].
(c)The person seeking to set aside the award must prove that the impugned conduct or decision was “sufficiently serious or egregious so that one could say a party has been denied due process.”[38] The term “due process” is here used to direct “the focus to the elemental or fundamental aspects of the right to be heard rather than to its technical or incidental aspects.”[39] The test is not so high as to require the person seeking to set aside the award to establish that the impugned conduct or decision is “so serious that it cannot be condoned under the law of the enforcing state”.[40]
[38]Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in liq) (No 1) [2012] 4 HKLRD 1 at 35 [94]; Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114 at 149–51 [118]–[125], at 153 [134].
[39]Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114 at 153 [134] citing ADG v ADI [2014] 3 SLR 481 at 511–12 [116].
[40]Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in liq) (No 1) [2012] 4 HKLRD 1 at 33–4 [92], at 35 [94] citing Corporacion Transnacional de Inversiones SA de CV v STET International SpA (1999) 45 OR (3d) 183, [34].

22.The following principles emerge in relation to the analogue provision to s 34(2)(a)(iv) of the Act.
(a)The parties have the freedom to agree the procedural rules of the arbitration, subject to non-derogable minimum standards such as the requirements of natural justice (which is reflected in Art 19(1) of the Model Law and s 19(1) of the Act).[41]
[41]Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114 at 128–9 [46]–[48].
(b)If the parties have agreed upon the procedure to be adopted for the arbitration, the Tribunal is obliged to conduct the arbitration in accordance with that procedure.[42]
[42]Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114 at 129 [49].
(c)If the parties do not so agree, the Tribunal is the master of its own procedure, subject to the non-derogable minimum standards (which is reflected in Art 19(2) of the Model Law and s 19(2) of the Act).[43]
[43]Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114 at 152–3 [130]–[131].
(d)It is intended to protect a party from egregious and injudicious conduct by an arbitral tribunal, and is not intended to protect a party from its own failures or strategic choices.[44]
[44]Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114 at 129–30 [51].
(e)Minor breaches of an agreed arbitral procedure will not result in an award being set aside. The person seeking to set aside the award will either need to show that he has been prejudiced, or was reasonably likely to have been prejudiced, by the arbitrator’s conduct, or would have to advance an alternative basis to evince the materiality or seriousness of the breach.[45]
[45]Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in liq) (No 1) [2012] 4 HKLRD 1 at 33–4 [92], at 38 [105] citing Corporacion Transnacional de Inversiones SA de CV v STET International SpA (1999) 45 OR (3d) 183, [32]; Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114 at 130–2 [54]–[58], at 134 [66].

23.Relevantly, Australian courts have confirmed that the standard to be applied for the court to intervene under s 34(2)(a)(ii) is no different from that to be applied under s 34(2)(a)(iv).[46]
[46]Ringwood Agricultural Co Pty Ltd v Grain Link (NSW) Pty Ltd [2013] NSWSC 191 (21 February 2013) [54].

Similarly, but covering a slightly different field and with different emphasis, AED submits:[47]
[47]AED’s Written Submissions Opposing Cameron’s Application to Set Aside Awards and in Support of AED’s Application for Enforcement of Awards (13 April 2015) [7]–[15] (emphasis in original).
7.The paramount object of the Act (s 1AC) — being to facilitate the fair and final resolution of commercial disputes by impartial arbitral tribunals — supports the proposition that awards are not to be set aside easily and there should be minimal judicial intervention in awards. There is a strong public policy that underlies the Act in general, and s 34 in particular, in favour of supporting the parties’ choice of arbitration for the final resolution of their dispute.[48]
[48]CRW Joint Operations v PT Perushaan Gas Negara (Persero) TBK [2011] 4 SLR 305 at 317 [25].
8.It is of importance in this application that both of the decisions challenged by Cameron were procedural decisions. A decision to refuse to reopen proceedings is a procedural decision.[49] A decision about the admissibility of evidence is also a procedural decision.[50] Under s 19(2)–(3) of the Act and rr 10 and 13 of the IAMA Rules, the Tribunal had wide, flexible and discretionary powers to make procedural decisions about those matters.
[49]ADG v ADI [2014] 3 SLR 481 at 509 [107].
[50]Commercial Arbitration Act 2011 s 19(3).
9.Recourse under s 34 of the Act is available against “arbitral awards” and not against procedural orders and rulings.[51] That confirms that the principle of “minimal curial intervention” applies all the more strongly where the subject of the challenge is, in substance, a procedural order or ruling where the challenging party was heard, in full, on what order or ruling should be made and is simply dissatisfied with the Tribunal’s decision on the procedural matter.
[51]Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114 at 130 [52]–[53].
10.An application to set aside an award is not a proceeding in which evidence is re-evaluated and the correctness of the tribunal’s decision on the merits is examined.[52] That an award might be legally or factually wrong (which is not the case here) is not grounds to set it aside.[53] As Cameron recited (but did not in fact reflect) in its submissions, an application to set aside an award made under s 34 of the Act is to be distinguished from an appeal against an award brought under s 34A of the Act. An application to set aside an award is not concerned with the substantive merits of the dispute, nor with the correctness or otherwise of the award in fact or law.[54] A setting aside application is not to be abused by a party who, with the benefit of hindsight, wishes he had pleaded or presented his case in a different way before the arbitrator.[55]

[52]United Nations Commission on International Trade Law, UNCITRAL 2012 Digest of Case Law on the Model Law on International Commercial Arbitration (UNCITRAL, 2012) 134–5 [3]; Government of the Republic of the Philippines v Philippine International Air Terminals Co Inc [2007] 1 SLR (R) 278.
[53]Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114.
[54]Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in liq) (No 1) [2012] 4 HKLRD 1 at 7 [7].
[55]Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114 at 134–5 [67] citing BLC v BLB [2014] 4 SLR 79.
11.The grounds listed in s 34(2) of the Act are exhaustive of the grounds on which an award may be set aside.[56] The grounds should be construed narrowly.[57]
[56]Commercial Arbitration Act 2011 ss 5, 34(2).
[57]Corporacion Transnacional de Inversiones SA de CV v STET International SpA (1999) 45 OR (3d) 183 [26].
12.Even if one of the grounds for setting aside an award is made out, the Court retains a discretion to decide whether the award should be upheld or set aside.[58] No award should be set aside unless real unfairness and real practical injustice has been shown to have been suffered by a commercial party in the conduct and disposition of a dispute in an award.[59] Further, an award will not be set aside if it can be shown that the Tribunal would not have reached a different conclusion but for the matter complained of.[60] But that is not exhaustive of situations in which an award may be upheld in the Court’s discretion.[61] Prejudice to the respondent and the significance of the error of the tribunal to the outcome are relevant factors to consider in the exercise of the discretion. The discretion must also be exercised in accordance with the overarching purpose in the Civil Procedure Act 2010.
…
13.This is essentially a natural justice or procedural fairness ground.[62] Relevantly, what must be given, to each party, is a reasonable opportunity to present the party’s case (the Act, s 18) and a reasonable opportunity to deal with the case put by the opposing party (IAMA Rules, r 10(2)).[63] The purpose of that requirement is to protect the parties from egregious and injudicious conduct by an arbitral tribunal and it is not intended to protect a party from its own failures or strategic choices.[64]
14.In Dongwoo Mann+Hummel Co Ltd v Mann+Hummel GmbH, Chan Seng Onn J said in respect of the analogue provision in Article 34(2) of the Model Law:[65]
Whether a party was or was not able to present its case at the arbitration is very much a question of fact and degree, and it necessarily focuses on the overall conduct of the proceedings with particular attention paid to the conduct of the tribunal and the parties themselves. However, a tribunal’s ruling in accordance with the rules of the arbitration on discovery or admissibility of evidence after hearing the parties, which necessarily disadvantages one party, cannot, without more, be regarded as evidence which shows that the party was therefore unable to present its case.

15.The proposition also applies to procedural decision about reopening applications.
[58]TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd (2014) 311 ALR 387 at 415 [111]; Cargill International SA v Peabody Australia Mining Ltd [2010] NSWSC 887 (11 August 2010) [242]; United Nations Commission on International Trade Law, UNCITRAL 2012 Digest of Case Law on the Model Law on International Commercial Arbitration (UNCITRAL, 2012) 141 [30]; United Mexican States v Metalclad Corporation (2001) CarswellBC 995; (2001) BCSC 664; (2001) 89 BCLR (3d) 359 [129].
[59]TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd (2014) 311 ALR 387 at 415 [111].
[60]Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in liq) (No 1) [2012] 4 HKLRD 1 at 36 [101].
[61]Contra Submissions by Cameron in Support of Application to Set Aside Award (31 March 2015) [20(d)].
[62]Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in liq) (No 1) [2012] 4 HKLRD 1 at 31 [86] citing Howard M. Holtzmann and Joseph E Neuhaus, A Guide to The UNCITRAL Model Law on International Commerical Arbitration: Legislative History and Commentary (Kluwer Law and Taxation Publishers, 1989) 550; ADG v ADI [2014] 3 SLR 481 at 507–8 [99]–[100].
[63]ADG v ADI [2014] 3 SLR 481 at 508–9 [101]–[105].
[64]United Nations Commission on International Trade Law, UNCITRAL 2012 Digest of Case Law on the Model Law on International Commercial Arbitration (UNCITRAL, 2012) 98 [7]; Corporacion Transnacional de Inversiones SA de CV v STET International SpA (1999) 45 OR (3d) 183; Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114 at 129–30 [51].
[65][2008] 3 SLR(R) 871 at 892 [55].

“Unable to present its case” ground

Cameron submits that the Tribunal did not permit it to present part of its case, that is, that it did not owe AED a duty of care in tort to take reasonable care. Cameron says that as it was found liable for a breach of that duty, the Tribunal’s decision went to the heart of Cameron’s defence.

AED pleaded its claim in its Further Amended Points of Claim, dated 12 November 2013, on the basis that—

(a)there was a contract between AED and Cameron for the provision of services; and
(b)Cameron owed AED a duty to take reasonable care in the provision of those services.[66]

The Points of Defence delivered by Cameron, dated 26 July 2013, denied the existence of the pleaded contract and, further, did not admit the existence of the pleaded duty of care, whilst also denying breach and causation for each.[67]

[66]Bonnell Affidavit, Exhibit Book, Tab 6.

[67]Bonnell Affidavit, Exhibit Book ,Tab 7.

Prior to the exchange of opening submissions, but after the service of Cameron’s Points of Defence, the New South Wales Court of Appeal, on 23 September 2013, delivered its reasons in The Owners — Strata Plan No 61288 v Brookfield Australia Investments Ltd.[68] This decision of the Court of Appeal concerned whether the builder of strata title serviced apartments owed a duty of care to the Owners Corporation to avoid causing it to suffer loss resulting from latent defects in the common property. The apartments were built prior to the registration of the strata plan for the Owners Corporation.
[68](2013) 85 NSWLR 479 (“Brookfield”).

The relevant works were subject to a contract between Brookfield Australia Investments Ltd (“Brookfield”) and the property developer, Chelsea Apartments Pty Ltd (“Chelsea”). The apartments were subject to leases granted by the developer to Stockland Trust Group which was to operate them collectively as serviced apartments under the “Holiday Inn” brand. Apartments were then sold by Chelsea to purchasers who became, effectively, investors in the development. After discovering latent defects in the common property, the Owners Corporation, a statutory body, brought a claim against Brookfield.

McDougall J, at first instance, held that no duty of care existed under the general law because the building contract was negotiated “at arm’s length between parties of equal standing, who are able to bargain for and obtain the benefits that they seek, and to pay the price that they think appropriate”, such that there was no room for a tortious duty of care.[69] In other words, as Cameron submits, McDougall J found that no duty of care existed where sophisticated parties had negotiated contracts to regulate the relationship between them. The respondent to the appeal sought to uphold the decision at first instance on the basis that “the appellant was not in any relevant sense vulnerable, because it was the consequence of a sophisticated commercial arrangement between two well-resourced commercial entities, namely the developer and the Stockland Group, which were well able to negotiate on equal terms with any company tendering to design and construct the building, in relation to liability for defects.”[70]
[69][2012] NSWSC (2013) (10 October 2012) [89]–[90].
[70]The Owners — Strata Plan No 61288 v Brookfield Australia Investments Ltd (2013) 85 NSWLR 479 at 493 [51(e)].

The Court of Appeal considered recent High Court authority on pure economic loss, including Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad,[71] Bryan v Maloney,[72] Perre v Apand Pty Ltd,[73] Woolcock Street Investments Pty Ltd v CDG Pty Ltd,[74] and Barclay v Penberthy.[75] In relation to the issue of “vulnerability”, the Court of Appeal said:[76]

In a practical sense, vulnerability may have three aspects, namely inability to:
(a)control or influence the physical events which gave rise to the loss;
(b)negotiate a contractual arrangement imposing liability on the defendant; or
(c)obtain insurance against the economic loss suffered.

[71](1976) 136 CLR 529.

[72](1995) 182 CLR 609.

[73](1999) 198 CLR 180.

[74](2004) 216 CLR 515.

[75](2012) 246 CLR 258.

[76](2013) 85 NSWLR 479 at 489 [35] (Basten JA, with whom Macfarlan and Leeming JA relevantly agreed).

Moreover, in finding that a duty of care existed, the Court of Appeal held that even though the Owners Corporation gained some level of protection from contracts entered into with the developer, this did not preclude it from being vulnerable. Continuing, Basten JA said:[77]

It seems inconsistent with the concept of vulnerability, in relation to the existence of a liability on the part of the respondent in tort, to say that the purchasers were not vulnerable because they could have insisted upon a contractual right as against the builder or the developer.

[77](2013) 85 NSWLR 479 at 509 [125] (Basten JA, with whom Macfarlan and Leeming JA relevantly agreed).

Cameron says in its submissions that there was evidence before the Tribunal on the view it held as to the scope and applicability of this judgment of the Court of Appeal on the basis of an affidavit of Bonnell affirmed on 11 November 2014.[78] It is said that the credit of Bonnell as a legal practitioner was subject to significant attack,[79] but that the Arbitrator accepted all of the evidence of Bonnell.[80] It is submitted, therefore, that the following recitation of the facts as set out in the Cameron submissions should be accepted as non-controversial:[81]
[78]Bonnell Affidavit, Exhibit Book, Tab 11.
[79]Bonnell Affidavit, Exhibit Book, Tab 14, (T768.27–30 to T788.1).
[80]Ruling (5 December 2014) [19].
[81]Submissions by Cameron in Support of Application to Set Aside Award (31 March 2015) [36]–[47] (emphasis in original).

36.The Cameron legal team apprehended the Court of Appeal decision to be similar to the dispute between Cameron and AED, because—
(a)the claim involved latent defects in construction; and
(b)although no contract existed directly between the plaintiff and the defendant, there was a linear chain of contracts between the defendant, an intermediary and the plaintiff which regulated their relationships.

37.In preparing Cameron’s opening written submissions for the arbitration, Cameron’s legal team therefore re-considered the argument that Cameron owed no duty of care to AED.[82] In doing so, Cameron’s legal team considered the Court of Appeal decision and recent Australian authorities that could be used to distinguish the Court of Appeal decision.[83] The Cameron legal team concluded that it would be necessary to advise Cameron to concede the existence of a duty of care, because—
[82]Bonnell Affidavit, Exhibit Book, Tab 11, [6].
[83]Bonnell Affidavit, Exhibit Book, Tab 11, [8].
(a)a duty of care was found to exist in the Court of Appeal decision;
(b)the Court Appeal relied on cases from jurisdictions outside Australia in support of the view that a court could find “liability in negligence for economic loss resulting from defective construction work”;
(c)the circumstances of the case were strongly analogous to those of Cameron’s dispute with AED;
(d)the duty was observed by the Court of Appeal to be a novel one;
(e)thus Cameron would have no persuasive answer to the asserted duty of care by reason of the law as stated in the Court of Appeal decision.[84]
[84]Bonnell Affidavit, Exhibit Book, Tab 11, at [7]–[9].

38.The solicitors for Cameron advised Cameron accordingly, and Cameron gave instructions to admit the existence of the pleaded duty.[85]
[85]Bonnell Affidavit, Exhibit Book, Tab 11, at [7]–[9].
39.In its written opening submissions at 2.6,[86] Cameron conceded the existence of the pleaded duty of care. But Cameron maintained that it did not breach its duty, and submitted that even if it had, any such breach would not have caused the alleged leaks.
[86]Bonnell Affidavit, Exhibit Book, Tab 8.
40.Although the High Court granted special leave to appeal from the Court of Appeal decision, the High Court’s decision had not been published by the date of the hearing in June 2014.
41.On the first day of the application (viz., 16 June 2014), AED Oil abandoned its claim in contract, and put its case solely on the basis that Cameron had breached its duty of care.[87]
[87]Bonnell Affidavit, Exhibit Book, Tab 11, at [6].
42.On 8 October 2014, before the Arbitrator delivered his Award, the High Court delivered judgment in Brookfield Multiplex Ltd v Owners — Strata Plan No 61288,[88] which overturned the Court of Appeal’s decision in The Owners – Strata Plan No 61288 v Brookfield Australia Investments Ltd.[89]
[88](2014) 88 ALJR 911 (“Brookfield Multiplex”).
[89](2013) 85 NSWLR 479.
43.The High Court rejected the statement of law below by the New South Wales Court of Appeal with respect to when a duty of care will exist in a claim for pure economic loss. The High Court held that the purchasers were not vulnerable because they were able to protect their interests in relation to losses arising from the construction of the building in the terms of the purchase contracts.[90] In particular, Hayne and Kiefel JJ stated:[91]
[90](2014) 88 ALJR 911 at 923 [34] (French CJ); at 926 [57]–[58] (Hayne and Kiefel JJ); at 927–8 [66]–[67] (Crennan, Bell and Keane JJ); at 944 [182], at 945 [185] (Gageler J).
[91](2014) 88 ALJR 911 at 926 [57]–[58] (footnotes omitted).
[57]… As noted earlier, vulnerability is concerned with a plaintiff’s inability to protect itself from the defendant’s want of reasonable care, either entirely or at least in a way which would cast the consequence of loss on the defendant.
[58]It is neither necessary nor profitable to attempt to define what would or would not constitute vulnerability. It is enough to observe that both the developer and the original purchasers made contracts, including the standard contracts, which gave rights to have remedied defects in the common property vested in the Owners Corporation. The making of contracts which expressly provided for what quality of work was promised demonstrates the ability of the parties to protect against, and denies their vulnerability to, any lack of care by the builder in performance of its contractual obligations. It was not suggested that the parties could not protect their own interests. The builder did not owe the Owners Corporation a duty of care.

44.That is, contrary to the Court of Appeal decision, the High Court stated that the purchasers were not vulnerable because they could have insisted upon a contractual right as against the builder or the developer.
45.The Arbitrator accepted that, if the High Court’s decision had been published at the time Cameron was preparing its case, Cameron would not have conceded the existence of the duty of care;[92] and of course (on the sworn evidence) there would have been no occasion for it to have done so.
46.By reason of the High Court’s decision, on 23 October 2014 Cameron applied to the Tribunal to re-open its case on the limited issue of whether Cameron owed AED Oil the pleaded duty of care. Cameron sought to re-open the hearing, so as to contend that it did not.
47.The Tribunal heard the application on 26 November 2014, and delivered a Ruling on 5 December 2014 refusing the application.[93]

[92]Ruling (5 December 2014) [19].

[93]Ruling (5 December 2014).

Whilst this statement of facts would not appear to be in controversy — at least as facts but not as to the effect and consequences of these facts — the parties’ paths do start to diverge once issue is taken with respect to the decision of the Tribunal not to allow Cameron to re-open its case. Broadly speaking, Cameron’s submission in this respect is that the Tribunal, though articulating the correct test, with respect to an application to re-open the hearing, failed to apply the test.[94] As is explored further in these reasons, AED takes a different view and, in any event, submits that it is not open to the Court under the provisions of the Act to embark upon a consideration of the issues raised by Cameron with respect to the Tribunal’s disposition of Cameron’s application to re-open its case because to do so would, contrary to the provisions of the Act and the authorities discussed, amount to a merits appeal or something in the nature of a merits appeal.
[94]Submissions by Cameron in Support of Application to Set Aside Award (31 March 2015) [48]–[49].

Returning to the principal hearing before the Tribunal in June 2014, AED submits that Cameron was able to, and did, present the case it wished to present at that hearing. AED also submits that Cameron was able to, and did, present the case it wished to present on the re-opening application, but that is a matter I will come to separately in the reasons which follow.

I accept that, as AED submits, it is necessary to take account of all relevant circumstances in considering whether Cameron was, as it submits, unable to present its case at the hearing. In so doing, I observe that this is not an exercise in delving into the merits of the arbitration procedure or proceedings, or the Tribunal’s decision on the merits or otherwise succumbing to the temptation warned against by Menon CJ, the Chief Justice of Singapore.[95] A number of matters submitted to be of relevance in this context were raised by AED, matters which I will now consider separately.
[95][2015] SGCA 18, [39]. See above [21].

It is clear that the rules of natural justice or procedural fairness are not rigid, and depend on the context in which they are or are not applied. In the context of arbitration proceedings, a court must be mindful of the possibility that natural justice or procedural fairness claims are, as the authorities to which reference has been made warn, “dressed up” as such, but are in reality merits appeals, consideration of which would be contrary to the legislation.

Turning to the particular circumstances of these proceedings, it must be observed that, in its defence, Cameron had admitted a series of facts directly relevant to the existence of a tortious duty. Those facts included that Cameron was a provider of services to the oil industry and had specialist skills in the assembly of subsea trees and the provision of equipment, preparation and support services for the installation of subsea trees; that Cameron made available subsea tree technicians to provide services in relation to the subsea tree; that Cameron knew that AED was the operator of the Puffin Oil Field, that the services Cameron performed were in relation to equipment owned by AED and that those services were for the benefit of AED; and that Cameron knew that the subsea tree would be used in the production of oil.[96] Moreover, Cameron never denied the existence of a duty of care. Prior to its express admission of a duty, it had pleaded no more than a non-admission.
[96]Partial Final Award (17 December 2014) [7]; Further Amended Points of Claim, [1], [2], [5]; Points of Defence [1], [2], [5].

AED submits that Cameron’s admission of the existence of a duty of care was “voluntary”. Continuing, AED submits that, as was properly conceded by Bonnell in cross-examination before the Tribunal, the Court of Appeal’s decision in Brookfield[97] did not render it necessary to admit the existence of a duty.[98] The concession was recorded in the Tribunal’s ruling:[99]

Professor Bonnell acknowledged in cross-examination that it was not necessary for the respondent to make the concession and that it was open despite Brookfield to dispute the question of duty leaving it to the claimant to establish and the arbitral tribunal to determine.

AED submits that this concession was properly made because, on any view, the present dispute and the decision in Brookfield concerned quite distinct factual scenarios. I accept that it is trite that judicial decisions about the existence or non-existence of a duty of care in tort necessarily turn on the factual positions in particular classes of case.[100]

[97]The Owners — Strata Plan No 61288 v Brookfield Australia Investments Ltd (2013) 85 NSWLR 479.

[98]Ruling (5 December 2014) [16].

[99]Ruling (5 December 2014) [16] (footnotes omitted).

[100]Sullivan v Moody (2001) 207 CLR 562 at 579–80 [50]–[51].

As a result of the admission by Cameron of the duty, AED expressly abandoned its contract claim on the first day of the hearing. On the first day of the hearing, senior counsel for AED said:[101]

In our pleading we did put the matter in contract and in tort. The Cameron written submissions, as I noted right at the start, admit that there was a duty of care, so there is no need for us to press the contract case which would have involved analysis of a range of documents to determine if there was a contract or not. We don’t need to do that and we are not going to take up the time to do it unnecessarily. So we don’t press our contract case because, in light of the admitted duty of care, nothing turns on whether the claim is in negligence or for breach of an implied contractual term.

[101]Newman Affidavit, Exhibit DN1.

Thus, it is submitted by AED that at the hearing in June 2014, Cameron was able to, and did, present its case that it did not breach the duty of care in tort that it had admitted it owed to AED. It was no part of Cameron’s case at that hearing that it did not owe a duty of care in tort to AED. On the basis of the matters to which reference has been made, it appears to me that this is clearly the position. Moreover, it was the position adopted by Cameron in circumstances where, at the time of making the concession, it knew that the High Court had granted special leave to appeal in the Brookfield case[102] and, consequently, whatever it “apprehended” about that decision, it knew there would be a subsequent decision of the High Court.
[102]Ruling (5 December 2014) [15] (footnotes omitted).

The Tribunal formally closed the hearing on 20 June 2014, but after its close and following the delivery of the High Court’s judgment overturning the decision of the New South Wales Court of Appeal in Brookfield, Cameron sought to re-open the hearing so that it could withdraw its admission of a tortious duty and thus amend its defence from a non-admission to a positive denial and make positive submissions that it did not owe a duty of care in tort to AED. AED submits, further, that it is notable that Cameron no longer contends (as it did in its re-opening application of 22 October 2014) that its admission of a duty of care in tort was dictated and required by the Court of Appeal decision in Brookfield. In its application to re-open, Cameron said:[103]
[103]Newman Affidavit, Exhibit DN2.

At … [the time when Cameron’s written submissions were being prepared], the view was taken that the decision of the New South Wales Court of Appeal in The Owners — Strata Plan No 61288 v Brookfield Australia Investments Ltd,[104] which was delivered on 25 September 2013, precluded such an argument from being conducted.
These are unusual circumstances, but the fact is that Cameron prepared its case on the basis of the law as it was then enunciated, and that position has been altered by the decision of the High Court. It could cause Cameron substantial injustice if it were not permitted to put its case on the basis of the law as currently stated by the High Court.

With respect to this contention, AED submits:[105]
37.That contention was not pressed before the Tribunal[106] and is not put on this application.[107] This is important because it reveals that Cameron’s position must be that its legal advisers were mistaken in their advice that it was necessary to concede the existence of a duty of care based on the Court of Appeal’s decision. Once that is understood, the true character of Cameron’s procedural fairness contention is clear: viz, a contention that the Tribunal had a procedural fairness obligation to allow Cameron to reopen the hearing, withdraw its admission, amend its defence and make positive submissions denying a duty of care in order to remedy the mistaken advice given by the legal advisers. The law recognises no such obligation. As … [Aon Risk Services Australia Ltd v Australian National University] shows, procedural fairness does not require a court to allow a party to change its case during a trial.[108] The position is even stronger where the change is sought to be made long after the close of the hearing.
38.The points made above demonstrate that Cameron was able to, and did, present its case at hearing and on the rehearing application. Nothing in the rules of procedural fairness or in ss 18 or 34 of the Act meant the Tribunal was obliged to reopen the case so that Cameron could present a different case. Courts regularly hold litigants to positions or concessions in litigation without there being any suggestion of a denial of procedural fairness. That disposes of this ground.

[104](2013) 85 NSWLR 479.

[105]AED’s Written Submissions Opposing Cameron’s Application to Set Aside Awards and in Support of AED’s Application for Enforcement of Awards (13 April 2015) [37]–[38].

[106]See AED’s Written Submissions Opposing Cameron’s Application to Set Aside Awards and in Support of AED’s Application for Enforcement of Awards (13 April 2015) [29]–[30].

[107]Cf Submissions by Cameron in Support of Application to Set Aside Award (31 March 2015) [36]–[37] and especially [51]–[52].

[108]Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175.

In relation to the matters which have been canvassed in some detail with respect to the June 2014 hearing before the Tribunal, Cameron submits that it is not permissible, as AED seeks to do, to examine reasons for Cameron’s position. Rather it says that the proper approach is to have regard to the acceptance by the Tribunal of Bonnell’s evidence at the re-opening application as to the manner in which Cameron handled the tortious duty issue and that the only point of relevance is that the issue was not canvassed by Cameron at that hearing. Whilst I accept that Cameron’s reasons and motivation are not relevant to the present purposes, I am of the view that that is not the issue to which AED’s submissions are directed but, rather, as establishing that Cameron’s conduct of its case before the Tribunal at the June 2014 hearing was informed and considered, with the benefit of high level legal advice.

Whether the course adopted by Cameron at the June 2014 hearing is now regretted and thought to be inappropriate in all the circumstances is not the point. The point is whether Cameron had an opportunity to present its case as required by s 18 of the Act. In my view, it did have this opportunity and, further, if the provisions of Article 18 of the Model Law were applicable in the present circumstances, I would find that Cameron had a “full” opportunity of presenting its case to the Tribunal at the June 2014 hearing. Thus, I come to the point of considering whether Cameron was denied the requisite opportunity of presenting its case to re-open the hearing, both from the perspective of that hearing as a discrete hearing and also on the basis, as seemed to be implicit in Cameron’s submissions, that the Tribunal’s refusal to allow re-opening of the hearing meant that Cameron had thereby been deprived of the opportunity to put its case as a whole as required by s 18 of the Act.

I turn now to consider the position with respect to the application by Cameron to the Tribunal to allow it to re-open its case following the decision of the High Court in Brookfield Multiplex.[109]
[109]Brookfield Multiplex Ltd v Owners — Strata Plan No 61288 (2014) 88 ALJR 911.

Cameron applied to the Tribunal to re-open its case on the limited issue of whether Cameron owed AED the pleaded duty of care in tort. Cameron sought to re-open the hearing so as to contend that it did not. The Tribunal heard the application on 26 November 2014 and delivered a Ruling on 5 December 2014 refusing the application (“the Ruling”).[110] Cameron submits that the Tribunal accepted that if the High Court’s decision had been published at the time Cameron was preparing its case, it would not have conceded the existence of the duty of care in tort. In support of this proposition, reference is made to the following statement by the Tribunal in the Ruling:[111]
[110]Bonnell Affidavit, Exhibit Book Tab 15.
[111]Bonnell Affidavit, Exhibit Book Tab 15, [19].

19.I accept the evidence of Professor Bonnell. In my view the history of the issue of the existence of a duty of care from the respondent’s perspective from its treatment in the Points of Defence to the concession made in paragraph 2.6 of the respondent’s pre-hearing submissions of 13 June 2014 is as he has set out.

There is some controversy between the parties as to the significance of the Tribunal’s statement in this respect and the effect of accepting the Bonnell evidence. As indicated in these reasons, the issue is irrelevant to the issues raised in these proceedings. Moreover, if the point sought to be made is that it is clear that Cameron would have conducted its case differently at the June hearing if it had been armed with the decision of the High Court, this is not, in all the circumstances, a surprising proposition. But, more importantly and in any event, whatever the Tribunal might have thought in this respect, this is a matter which impinges upon the merits of the Ruling. Indeed, it is consistent with the approach which Cameron has taken to its challenge to the Ruling. As its submissions make clear, its application in this respect is, in substance, a merits appeal, an appeal on a question of law. Thus, Cameron submits:[112]
48.Cameron asked the Tribunal to re-open its case relying upon established principles on the exercise of discretion by a court to re-open a party’s case where there has been a mistaken apprehension of the law.[113] The Tribunal, correctly, accepted Cameron’s submission that the “overriding principle is that the court consider whether, taken as a whole, the justice of the case favours the grant of leave to re-open”.[114]
49.The Tribunal, however, did not apply that test, and its reasoning was manifestly erroneous.

[112]Submissions by Cameron in Support of Application to Set Aside Award (31 March 2015) [48]–[49].

[113]Ruling (5 December 2014) [21].

[114]Ruling (5 December 2014) [27].

Continuing, Cameron submits that the Tribunal’s refusal to re-open was based upon three apparently discrete bases. In the detail which follows in the Cameron submissions, it becomes very clear indeed that the challenge to the Ruling is in the nature of a merits appeal, an appeal on questions of law. Thus, in further detail, Cameron submits:[115]
[115]Submissions by Cameron in Support of Application to Set Aside Award (31 March 2015) [51]–[64] (emphasis in original).

51.The first reason relates to the nature of Cameron’s misapprehension of the law. The issue was dealt with in the 5 December 2014 Ruling at [23]–[30].[116] The Tribunal at [23] and [24] of the Ruling characterised Cameron’s mistaken apprehension of the law not as to legal doctrine, but as to the application of that doctrine to the particular facts of Brookfield[117] which concerned the Court of Appeal. It relied at [25] of the Ruling upon the comment of French CJ in the High Court that the element of novelty in Brookfield [Multiplex] as to the contractual and statutory matrix did not overcome “a straightforward application of precedent”.[118] It then stated at [25] of the Ruling, referring to the above matters, “those factors militate against … [Cameron’s] application.”
[116]Ruling (5 December 2014) [23]–[30].
[117]The Owners — Strata Plan No 61288 v Brookfield Australia Investments Ltd (2013) 85 NSWLR 479.
[118]Brookfield Multiplex Ltd v Owners — Strata Plan No 61288 (2014) 88 ALJR 911 at 920 [23].
…
54.The second reason (in the 5 December 2014 Ruling, at [31]), applies the obiter of Gaudron J in Commonwealth v Verwayen[119] to found the novel principle that, in the arbitral context, the relationship of the parties altered when Cameron made the concession on 13 June 2014 that it owed AED Oil a relevant duty of care, such that Cameron cannot now withdraw that concession.[120]
[119](1990) 170 CLR 394 at 484–5.
[120]Ruling (5 December 2014) [31].
55.The Tribunal’s assertion of the existence of such a principle is wrong; its existence would be inconsistent with the accepted “overriding principle” being whether the justice of the case favours the grant of leave to re-open.[121] Moreover, the Tribunal does not explain what about the relationship has changed, or why that change here should preclude Cameron having the opportunity to deny a duty of care in the present circumstances.
[121]Ruling (5 December 2014) [27].
56.The third reason (in the 5 December 2014 Ruling, at [32]–[34]) is the finding that, if Cameron’s application were granted, “the greater detriment would in my view be that to … [AED Oil] in having to prosecute its case in the changed circumstances.”[122]
[122]Ruling (5 December 2014) [33].
57.The Tribunal failed to identify properly the relevant prejudice to each party. In the circumstances to which we now turn, the Arbitrator legally erred.
58.The Tribunal’s total consideration of Cameron’s prejudice if it were not permitted to re-open and put its case is one sentence — “[Cameron] spoke in its written submissions of a substantial injustice if it was held bound to the position it took.”[123]
[123]Ruling (5 December 2014) [33].
59.The Tribunal identified the consequences of acceding to Cameron’s application, further to hearing legal argument on the existence of the alleged duty, as follows:[124]
[124]Ruling (5 December 2014) [9].
[G]ranting … [Cameron’s] application would inevitably entail the resurrection of … [AED Oil’s] contract claim, a further hearing of the matter to enable the claimant to cross examine further … [Cameron’s] witnesses and further submissions addressing … [AED Oil’s] contract claim, not to mention delay and costs.”

And, importantly, the Tribunal found that the prejudice to AED Oil was that—[125]
[125]Ruling (5 December 2014) [32], [34].
it would now be much harder for … [AED Oil] to weave into the fabric of case (sic) what would have to be addressed concerning contract and duty separately and later than it would have been at the hearing in June 2014.
…
[W]hile an appropriate order for costs might go some way to cure the additional expense to which the parties would be put if … [Cameron’s] application was granted there would in that event be further delay in the delivery of the award in this arbitration.

60.But the Tribunal failed to identify exactly what that prejudice to AED Oil entailed.
…
63.Had the Tribunal identified the respective relevant prejudice accurately, it could only have permitted Cameron to re-open its case and be heard on the existence of the alleged duty of care.
64.As can thus be seen, Cameron sought to reopen its case and put in issue the question of duty of care in tort. By reason of serious legal errors, the Tribunal wrongly refused it the ability to do so. The Tribunal’s conduct is contrary to s 34(2)(a)(ii) of the Act because its decision was “sufficiently serious or egregious” to have resulted in Cameron being denied the opportunity to present its case.[126] The Tribunal’s error goes beyond a mere error of law. Not permitting Cameron to reopen its case comprised an affront to the basic fairness of the arbitral process because Cameron could not present its case. Moreover, and importantly in the context of an application made under s 34(2)(a)(ii) of the Act,[127] Cameron was prevented from putting its case by matters outside its control — namely the error of the Court of Appeal in Brookfield and the Tribunal’s serious error of law.

[126]Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in liq) (No 1) [2012] 4 HKLRD 1 at 35 [94]; Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114 at 149–51, [118]–[125], at 153 [134].

[127]Kanoria v Guinness [2006] EWCA Civ 222, [23].

AED responds to these submissions by Cameron, but subject to its primary position that Cameron was not prevented from presenting its case, either at the June hearing or on the application to re-open its case; that there was no breach of the rules of natural justice or procedural fairness. Thus, AED submits:[128]

38.The points made above demonstrate that Cameron was able to, and did, present its case at hearing and on the rehearing application. Nothing in the rules of procedural fairness or in ss 18 or 34 of the Act meant the Tribunal was obliged to reopen the case so that Cameron could present a different case. Courts regularly hold litigants to positions or concessions in litigation without there being any suggestion of a denial of procedural fairness. That disposes of this ground.
39.It is neither appropriate nor necessary for the Court to consider whether or not there was error in the Tribunal’s ruling. Nevertheless, and for the avoidance of any doubt, AED’s position is that there was no error.

[128]AED’s Written Submissions Opposing Cameron’s Application to Set Aside Awards and in Support of AED’s Application for Enforcement of Awards (13 April 2015) [38]–[39].

AED then addressed the matters raised by Cameron, to which reference has been made, in support of its submission that: “By reason of serious legal errors, the Tribunal wrongly refused it the ability …” to re-open its case.[129] Thus, AED submitted, by way of preface to its detailed submissions with respect to the claimed “errors” Cameron raised and elucidated:[130]
[129]Submissions by Cameron in Support of Application to Set Aside Award (31 March 2015) [64].
[130]AED’s Written Submissions Opposing Cameron’s Application to Set Aside Awards and in Support of AED’s Application for Enforcement of Awards (13 April 2015) [40]–[42].

40.Before addressing each of the errors alleged by Cameron, it should be observed that if it were permissible to seek to set aside the award on this basis, Cameron would first need to establish that the Tribunal made an error in the exercise of its discretion in the sense explained in House v The King.[131] As appears below, Cameron’s criticisms of the Tribunal’s ruling do not satisfy this test, indeed [they] are without substance.[132]
41.The principles that govern when a court will interfere with a tribunal’s exercise of discretion are well established. It is not sufficient for the court to think that it might have exercised the discretion differently.[133]

It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.

42.This was a procedural ruling within the Tribunal’s province. The Tribunal identified and applied the correct test. That test – which required the demonstration of “exceptional circumstances”[134] and which was to be applied in a context in which there is a statutory policy in favour of finality — makes clear there is only a narrow scope for a reopening order to be made.

[131](1936) 55 CLR 499 at 503–505.

[132]Submissions by Cameron in Support of Application to Set Aside Award (31 March 2015) [49]–[64].

[133]House v The King (1936) 55 CLR 499 at 505.

[134]Spotlight Pty Ltd v NCON Australia Ltd [2012] VSCA 232 (27 September 2012) [17]–[18].

AED, in its submissions, addresses in detail the matters raised by Cameron in support of its attack on the Ruling. It is not necessary to make particular reference to these submissions, save to observe that they are both responsive to the matters raised by Cameron and that, if I were tempted by “domesticity” — that is, the failing identified by Menon CJ in the passage set out previously[135] — an appeal on the basis of an error of law would, for the reasons and on the basis of the authorities relied upon by AED in its submissions, be likely to fail. Nevertheless, I am not so tempted, and it is only necessary to observe for present purposes that the responsive submissions which the Cameron submissions invite serve to emphasise further that what Cameron is seeking to do is to pursue a merits appeal, an appeal on a question of law with respect to the Ruling.
[135]See above [21].

Critically to the present proceedings, there is no basis for suggesting, let alone seriously submitting, that Cameron was denied a “full” or “reasonable” opportunity of presenting its case to the Tribunal in seeking to re-open the hearing other than in accordance with the requirements of ss 8 and 34 of the Act or that, otherwise, there has been some failure to accord Cameron procedural fairness or natural justice.[136]
[136]Or, if it were relevant, Article 18 of the Model Law.

Procedural decision to refuse to allow reliance on the report of Terrell

Cameron submits that in not permitting Cameron to rely upon the expert report of Terrell dated 8 April 2014, the Tribunal acted contrary to cl 10(c)(i) of the Dispute Resolution Deed. These provisions, relied upon by Cameron, provide, under the heading of cl 10 “Conduct of arbitrations”, as follows:

Arbitrators:
(i) will not be bound by the rules of evidence

The basis upon which Cameron seeks relief in this respect is that there was a breach of the terms of the agreed arbitral procedure when the Tribunal refused to permit Cameron to put Terrell’s report into evidence. Further, Cameron submits that the Tribunal’s breach of the agreed arbitral procedure was serious and gives rise to real prejudice to Cameron because Terrell’s report may have affected the Tribunal’s findings on breach.[137]
[137]Referring in support of this proposition to Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114 at 143 [100].

In terms of principle, with respect to an application such as this, it should be observed that the Tribunal had power to conduct the arbitration in such a manner as it considered appropriate, subject to any procedure agreed upon by the parties,[138] and to determine the admissibility, relevance, materiality and weight of any evidence.[139] Nothing in cl 10 of the Dispute Resolution Deed, or in the other provisions of that Deed, detract from this position. Moreover, the Tribunal is also given power to make such directions or rulings in respect of evidentiary matters as it saw fit under r 13 of the IAMA Rules. Although reference is made to r 10(1) of the IAMA Rules by Cameron, it is also, as AED submits, relevant to make reference to r 10(2) of those rules, which is in the following terms:

The Arbitrator shall be independent of, and act fairly and impartially as between the parties, giving each a reasonable opportunity of putting its case and dealing with that of any opposing party, and a reasonable opportunity to be heard on the procedure adopted by the Arbitrator.

[138]See Commercial Arbitration Act 2011 ss 19(1), (2).

[139]Commercial Arbitration Act 2011 s 19(3).

In terms of breaches of an agreed arbitration procedure, it is clear that minor breaches will not result in an award being set aside. A person seeking to set aside the award will either need to show that he, she or it has been prejudiced, or is reasonably likely to have been prejudiced, by the arbitrator’s conduct, or would have to advance an alternative basis to evince the materiality or seriousness of the breach.[140]
[140]Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in liq) (No 1) [2012] 4 HKLRD 1 at 38 [105].

In relation to the construction of the relevant provisions of the Dispute Resolution Deed, Cameron submits:[141]

68.Plainly enough, the phrase in the Dispute Resolution Deed — “will not be bound by the rules of evidence” — needs to be construed under an identifiable system of law.
69.Clause 20.3 of the Dispute Resolution Deed provided that “the Deed” and “the procedures described in the Deed” were to be “governed by and construed in accordance with the laws for the time being in force in Victoria”. Clause 10(c)(i) specifies a procedure described in the Deed. Accordingly, the “procedure” that the Arbitrator “will not be bound by the rules of evidence” was, in its application, to be governed by and construed in accordance with the laws for the time being in force in Victoria.
70.One such important law was the Supreme Court Act 1986, and in particular, s 25 therein. Pursuant to that section, the publication of the Rules of Court were empowered.
71.In Victoria, by operation of r 44.04 of the Supreme Court (General Civil Procedure) Rules 2005, a party upon whom the report of an expert witness is served pursuant to Order 44 may put the statement in evidence without calling that expert.[142]
72.Clause 10(c)(i) is a term of expansion, not limitation. The phrase “will not be bound by the rules of evidence” has a plain enough meaning: it permits the decision-maker to admit evidence which would not be admissible in court under formal rules of evidence, whilst in addition not permitting the decision-maker to refuse to admit evidence that is admissible under the rules of evidence.

[141]Submissions by Cameron in Support of Application to Set Aside Award (31 March 2015) [68]–[72] (emphasis in original).

[142]Grinham v Tabro Meats Pty Ltd [2012] VSC 491 (23 October 2012) [129].

Cameron’s submissions in this respect, particularly the conclusion advanced in the last paragraph of the passage set out above, do not have regard to s 135 of the Evidence Act 2008, which is in the following terms:

135General discretion to exclude evidence

The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might—
(a)be unfairly prejudicial to a party; or
(b)be misleading or confusing; or
(c)cause or result in undue waste of time
…

It follows that whether or not the provisions of cl 10(c)(i) of the Dispute Resolution Deed are expansive of the range of evidence which is admissible — beyond but not detracting from evidence otherwise admissible according to the rules of evidence — it follows from the rules of evidence applied by the law of the arbitral seat — Victoria — that the Tribunal had a discretion to exclude evidence otherwise admissible as a matter of law without the benefit of any expansive operation effected by the provisions of cl 10(c)(i). In any event, this is, in my view, coming very close to succumbing to the temptation of “domesticity” because, in my view, the empowering provisions of s 19 of the Act and the IAMA Rules to which reference has been made transcend the arguments advanced by Cameron in the submissions to which reference has been made. For the reasons which follow, I am of the opinion that the Tribunal exercised its powers with respect to the refusal to admit the Terrell evidence in a considered and reasoned manner, in circumstances where there was no suggestion that the parties did not have a full or reasonable opportunity to put their arguments, their cases, with respect to the Terrell evidence. This is particularly clear, in my view, when, as AED submits, the situation regarding Terrell is put in its full context.

Before turning to some detail in respect of these matters, it is helpful to set out the “relevant facts”, at least as they are expressed in the Cameron submissions, as follows:[143]
[143]Submissions by Cameron in Support of Application to Set Aside Award (31 March 2015) [67].

(a)on 6 April 2014, AED Oil filed and served an expert report of Mr Terrell dated 6 April 2014;
(b)on 3 June 2014, AED Oil advised Cameron that it was not going to call Mr Terrell, nor rely upon his expert report;
(c)on 10 June 2014, Cameron filed its written opening submissions, and in its submissions relied upon parts of Mr Terrell’s expert report that supported its case;[144]
(d)on 12 June 2014, AED Oil sought directions from the Tribunal that Cameron give notice that it intended to call Mr Terrell, failing which Cameron not be permitted to rely upon Mr Terrell’s expert report;
(e)on 12 June 2014, by email, the Tribunal directed that if Cameron did not elect to call Mr Terrell, it could not rely upon his expert report and must remove references to it from its written opening submissions;[145]
(f)on 12 June 2014, Cameron advised the Tribunal that it would not call Mr Terrell, and sought full reasons from the Tribunal for the decision to exclude Mr Terrell’s evidence;
(g)the Tribunal gave reasons for the decision at paragraphs [17] to [24] of the award.[146]

[144]Further Bonnell Affidavit, Exhibit 1.

[145]Bonnell Affidavit, Exhibit Book Tab 17.

[146]Bonnell Affidavit, Exhibit Book Tab 3.

The critical parts of Terrell’s report that Cameron relied upon and the reason for its reliance upon it are set out in its opening written submissions to the Tribunal.[147] In summary, the position put by Cameron is that in circumstances where AED’s evidence of breach and causation was the subject of strident challenge at the hearing before the Tribunal, Cameron suffered real prejudice by not being permitted to put Terrell’s report before the Tribunal and to rely upon it in the running of that proceeding.
[147]See Submissions by Cameron in Support of Application to Set Aside Award (31 March 2015) [75] (referring to Cameron’s opening written submissions, Further Affidavit of Bonnell, Exhibit 1, [3.9] to [3.14]).

In response, AED submits:[148]
[148]AED’s Written Submissions Opposing Cameron’s Application to Set Aside Awards and in Support of AED’s Application for Enforcement of Awards (13 April 2015) [53] (emphasis in original).

53.It is first necessary to place the situation regarding Mr Terrell in its full context.
(a)This was a technically complicated case involving issues about the operation of subsea oil production equipment in which both parties sought, and were afforded the opportunity, to furnish the Tribunal with expert evidence.
(b)Section 19(3) of the Act empowered the Tribunal to determine the admissibility of any evidence. Section 19(2) of the Act empowered the Tribunal to conduct the arbitration in such manner as it considered appropriate. (See also rr 10 and 13 of the IAMA Rules.)
(c)There was nothing in the arbitration agreement, the Act or the IAMA Rules that obliged the arbitrator to allow a party to tender or rely upon whatever evidence or material it chose.
(d)By the time of the hearing, the arbitrator had made procedural orders[149] dealing with the conduct of the hearing. Those procedural orders expressly contemplated that (a) expert evidence would be given by way of witness statement (PO4 at [14]; PO6 at [12]); (b) experts would conclave and produce a joint report (PO4 at [16]; PO6 at [2]-[3]); (c) each party was entitled to cross-examine witness called by the other party (PO6 at [7]); and (d) the contents of a witness statement would only stand as evidence where the maker of the statement was not required for cross-examination (PO6 at [8]). Cameron raised, and now raises, no issue about those orders. At the hearing, the Tribunal directed that witnesses give sworn evidence.[150] The Tribunal had power to make those directions, and they were scrupulously fair.
[149]Newman Affidavit, Exhibits DN6 and DN9.
[150]Newman Affidavit, Exhibit DN13.
(e)Expert witness statements were provided by Mr Kuhnell (for Cameron) and by Dr Stark and Mr Witton (for AED). Each of those men attended the hearing, adopted his witness statements and reports, and was cross-examined.
(f)It is incomplete and misleading to say that the Tribunal “refused to permit Cameron to put Mr Terrell’s report into evidence”.[151] The Tribunal was quite willing to allow Cameron to put Mr Terrell’s report into evidence, if it called him as a witness to adopt his report and be available for cross-examination. AED expressly took the same position. Its objection was to Cameron seeking to rely upon parts of the Terrell Report as opinion evidence if Cameron was not calling him as a witness and making him available for cross-examination.[152]
[151]Submissions by Cameron in Support of Application to Set Aside Award (31 March 2015) [73].
[152]Newman Affidavit, Exhibits DN10 and DN12.
(g)Consistently with the procedural orders it had made, the Tribunal determined and informed the parties that it would not be assisted, at hearing, by the report of an expert who did not appear at the hearing without good reason. Cameron had the opportunity to call Mr Terrell; it elected not to do so. There was and is no suggestion that it could not call him; it simply chose not to.
(h)The Tribunal’s reasons for adopting the course that it did were unimpeachable and Cameron says nothing against them:[153]
However, in circumstances where I would have no confirmation by Mr Terrell of the contents of his report, where I would be denied the opportunity of observing him giving evidence and where he would not be subjected to cross-examination it was unsatisfactory, to say the least, and of no assistance to me to allow either party to rely upon any part of his report, the more so where the other relevant experts relied upon by the parties had participated in a joint report and were to give oral evidence before me to confirm their reports and submit themselves to cross-examination. The course I took seemed to me to be a preferable one and one of greater clarity for the parties than the only alternative of admitting as evidence those parts of Mr Terrell’s report upon which a party relied and then giving no, or negligible, weight to that evidence.

(i)Finally, it is important to recognise what Cameron does not say about the arbitrator’s ruling. Despite claiming in its originating application that the arbitrator’s ruling resulted in Cameron being unable to present its case, that claim is no longer made: in relation to Mr Terrell, Cameron’s written submissions rely only on s 34(2)(a)(iv) of the Act, and not also s 34(2)(a)(ii). That is important. It means that Cameron accepts that in this regard it could present its case at hearing. It also means that Cameron does not claim that the arbitrator’s ruling involved a denial of procedural fairness.

[153]Partial Final Award (17 December 2014) [24].

As indicated previously, the arguments put by Cameron in support of this ground of challenge are, in substance, an appeal against a ruling of the Tribunal, “dressed up” as a breach of the agreed arbitration procedure, seeking thereby to attract the operation of the provisions of s 34(2)(a)(iv). More particularly, but without detracting from this position, Cameron’s claim and submissions in support of the claim fail to have regard to the provisions of s 19(3) of the Act and the provisions of the IAMA Rules. Insofar as it may be relevant, they also overlook the possible application of s 135 of the Evidence Act 2008 with respect to the construction of cl 10(c)(i) of the Dispute Resolution Deed, in general terms, if not more particularly, and, additionally, seek to rely upon other aspects of Victorian law, including r 44.04 of the Supreme Court (General Civil Procedure) Rules 2005. These provisions of the Rules are relied upon in support of the proposition that the Tribunal was in error in not having regard to the operation of r 44.04 which, it is said, enabled a party on whom an expert witness report is served to put that statement in evidence without calling the expert. As AED submits, this is not a correct statement of the position under r 44.04 because, set out in full, it is provided that: “Unless otherwise ordered, a party may put in evidence a report served on that party by another party under this Order.” The reference made by Cameron to the decision of J Forrest J in Grinham v Tabro Meats Pty Ltd[154] is not at odds with the position put by AED. Moreover, the provisions of s 65G of the Civil Procedure Act 2010 do not detract from this position so as to oblige the Court or an arbitral tribunal bound by the procedural laws of the arbitral seat — Victoria — to admit an expert report tendered by a party, as a right and not subject to the exercise of a discretion by the Court — or such a tribunal. The position is, however, in the more general case and in the present case, that r 44.04 is a rule of procedure and not a rule of evidence and, consequently, does not impinge upon the operation of the provisions of the Act and the IAMA Rules to which reference has been made.
[154][2012] VSC 491 (23 October 2012) [129].

For these reasons, the second ground of challenge relied upon by Cameron also fails.

Enforcement application

It was accepted by the parties at the hearing of these applications that, in the event that the first of these applications failed — the setting aside application — then orders should be made for the enforcement of the awards.

Conclusions and orders

For the preceding reasons, the application by Cameron fails and, accordingly, the application by AED for enforcement of the awards is successful.

The question of costs is reserved. Otherwise, the parties are to bring in orders to give effect to these reasons.

[2015] VSC 163

1 May 2015