CBI Constructors Pty Ltd & Anor v Chevron Australia Pty Ltd

[2024] HCATrans 25

[2024] HCATrans 025

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth   No P22 of 2023

B e t w e e n -

CBI CONSTRUCTORS PTY LTD

First Appellant

KENT PROJECTS PTY LTD

Second Appellant

and

CHEVRON AUSTRALIA PTY LTD

Respondent

GAGELER CJ
GORDON J
EDELMAN J
STEWARD J
GLEESON J
JAGOT J
BEECH‑JONES J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 16 APRIL 2024, AT 10.00 AM

Copyright in the High Court of Australia

GAGELER CJ:   In this matter, I note that MR J.C. SHEAHAN, KC appears with MR B. YIN for the appellants.  (instructed by Clayton Utz)

MR S.L. DOYLE, KC appears with MR S.J. DAVIS and MR D.C. McKIMMIE for the respondent.  (instructed by Norton Rose Fulbright)

GAGELER CJ:   Mr Sheahan.

MR SHEAHAN:   Thank you, your Honours.  Can I spend a few minutes going to some of the central facts; just a couple of minutes on the critical provisions of the statute before going to the propositions in our outline.  As to the key facts, it was a contract between the parties made in July 2011.  My client, the appellant, was to provide staff for engineering work being done at various sites by the respondent.  The arbitration clause can be seen in the appellant’s further materials in volume 8, at page 14, and the relevant parts of it are very broad – 21.2, on page 14: 

Any Dispute shall be exclusively and finally settled as set forth hereafter.

We can simply note 21.2 the UNCITRAL rules are adopted, and the expression capitalised, “Dispute”, is defined on page 8, in clause 1.26, again in very broad terms.  Going to the primary judgment to find the relevant sequence of events, at page 86 in the core appeal book, paragraph 10, your Honours will see that there was a notice given:

pursuant to Clause 21.2.1 . . . 

initiating arbitration –

for:

non‑payment by Owner of outstanding amounts –

That is in (b).

GORDON J:   What page?

MR SHEAHAN:   On page 86, I am sorry.

GORDON J:   Page 86, thank you.

MR SHEAHAN:   And then, at about point 8 on the page:

The Contractor –

my client:

seeks that the Company:

(a)     make payment . . . of AUD $130,000,000 –

There is no dispute that the substantive issues that were dealt with in the second interim award were within the matters submitted to arbitration.  If we go over to page 87, your Honours will see the procedural order 1 was made on 9 May, that was just three weeks after the tribunal was constituted; that is paragraph 13.  Amongst other things, it set a hearing date by that procedural order in November 2018:

Extensive pleadings were served –

as is noted there, over a period of a year.  We do not need to go into the history, but it was complex.  The final one was on 25 July 2018, which, as recorded in paragraph 13, increased our learned friends’ claim by counterclaim to 411‑odd million dollars.  That was incorporated by further amended particulars of the counterclaim.  Four days later the tribunal issued procedural order 14, ordering:

‘bifurcation’ of the proceedings –

It did so on my client’s application.  The order appears in the reasons of the Court of Appeal, at page 221 of the core appeal book, in paragraph 48.  The relevant paragraphs are 1(a) and 1(c).  Paragraph 1(a), that shall be heard first:

all issues of liability –

And there is a clarification:

shall exclude all quantum and quantification issues arising out of [Chevron’s] Counterclaim –

And (c):

A further hearing (the Second Hearing) shall take place . . . and shall address all matters outstanding in issue between the parties including all quantum quantification issues not dealt with in the First Hearing.

Now, at page 241 of the core appeal book, your Honours will see an admission recorded for the purposes of the first hearing.  That is in paragraph 80, and I draw this to your Honours’ attention because it is the subject of some reliance by our learned friends in their submissions.  They treat it as an admission of liability.  Your Honours will see from its terms that it is explicitly qualified:

[CKJV] admits liability in respect of [audit 6, audit 10] and the Counterclaims in the sense that it admits that it has billed and been paid more than it has paid its Staff.  The quantum of [Chevron’s] claim in respect of [audit inquiries 6 and 10] and the Counterclaims, ie, the proper calculation of [CKJV’s] actual costs is in dispute.

If we go back to the primary judgment, at pages 41 to 42, we can see what happened at the hearing of the first interim award.  At paragraph 130, there is a summary of the findings, and it is only necessary to read what is adjacent the word “Finding”.  This disposed of the issues, broadly speaking, contrary to my clients claims.  So, finding (i):

There was no agreement . . . to convert the Price . . . from Cost items to Rate items.

That was our case.  Finding (ii), there was no estoppel denying such agreement.  There was no subsequent agreement to that effect, is finding (iii).  Then over the page, page 42, at about point 7:

the Claimant may bring into to account by way of defence, in these proceedings, the amounts particularized . . . and any other amounts of cost which it seeks to prove have not yet been accounted for in what it has been paid.

Now, in the core appeal book, at page 156, in paragraph 27, your Honours will see that my client repleaded its case on 28 May.  This is after the first interim award.  It is pursuant to an order that we:

replead . . . in a fashion that would better respond Chevron’s further amended statement of defence and counterclaim –

Then the jurisdictional issue arose, as appears in paragraph 28 on the same page.  Chevron objected to our repleading.  Your Honours will see the grounds in 2(a)(i), the respondent relied upon:

estoppel per rem judicatum and/or issue estoppel –

and in (ii), that:

the Tribunal, having made determinations inconsistent with –

the case that appeared in the new pleading, which we can call the “contract criteria case”, the tribunal was “functus officio”.  They also alleged Anshun estoppel, as appears from paragraph 29.

Now, in the second interim award, as appears at page 159 at paragraph 33, the tribunal essentially upheld the appellant’s case on the contract criteria case, and rejected the functus officio and estoppel arguments.  We see that rejection more particularly, spelled out at some length, in paragraph 31, going over to page 158.

EDELMAN J:   Sorry, which paragraph?

MR SHEAHAN:   Paragraph 34, pages 159 to 160.

GAGELER CJ:   That is a primary decision.  I think you meant paragraph 31.  Did you?

MR SHEAHAN:   Your Honour is right.  Paragraph 31 – I was right the first time – pages 157 to 158.  What happened in the court was that the trial judge in the Court of Appeal came to different conclusions to the majority of the tribunal in deciding the second interim award.  In particular, they came to different conclusions as to the questions which underlay all the defences which have been raised by the respondent in relation to the matters dealt with in the second interim award; preclusionary estoppels and functus officio.  What underlay all of them was a proposition that the claim or issue that my client relied upon had been finally determined in the first interim award.  The courts felt free to engage in that inquiry because they did it solely under the rubric of functus officio, rather than looking at questions of estoppel.

GLEESON J:   That is a question of jurisdiction.

MR SHEAHAN:   Yes, they saw it as raising a question of jurisdiction.  We should go next to the statute.  It is in volume 1 of the joint appeal book, starting at page 18.  The paramount object of the Act is in section 1C:

The paramount object of this Act is to facilitate fair and final resolution of commercial disputes by impartial arbitral tribunals without unnecessary delay or expense.

Then, in (2):

providing arbitration procedures that enable commercial disputes to be resolved in a cost effective manner, informally and quickly.

Paragraph 3 is an interpretive command.  Section 2A also deals with interpretation on page 23, and that requires:

practicable uniformity between the application of this Act to domestic commercial arbitrations and the . . . Model Law . . . to international commercial arbitrations –

Section 5 on page 25, consistently with the paramount object, enacts the principle of limital curial intervention:

no court must intervene except where so provided by this Act.

Section 16, on pages 34 to 35, deals with jurisdiction.  It provides, in subsection (1), for the well‑understood principle of competence‑competence.  The tribunal may make decisions about its own jurisdiction, but not in a final way.  The section also has a mechanism by which questions of jurisdiction can be resolved, short of a challenge to an award – that is in subsection (6) and subsection (9).  Section 19 on page 42 deals with procedure.  Your Honours will see by subsection (2):

Failing such agreement, the arbitral tribunal may . . . conduct the arbitration in such manner as it considers appropriate.

So, giving broad powers to the tribunal.  But, in this case, there is under subsection (1) an agreement on the procedure which was to adopt the UNCITRAL Rules.  They appear – I do not think we need to go to them – in joint appeal book volume 8, at page 1256.  Article 17 at page 1274 gives the tribunal broad powers and wide discretions.

GAGELER CJ:   Do the UNCITRAL Rules say anything specifically about interim awards or about bifurcation?

MR SHEAHAN:   They say two things that are relied upon by our learned friends – and we will come to them a little later.  One, is that – it is really one thing.  They say that interim awards are awards, and all awards are final and binding, so, relevantly, interim awards are final and binding.  We say, in short, that does not address the question that we raise for this Court which is narrower and anterior.

That narrower anterior question is:  who decides the premise on which a question as to what is binding – is it the tribunal who decides we have not resolved this issue finally, or is it the court that decides we have resolved this issue finally and gives effect to it by setting aside, or not setting aside?  So, we say, in short, that where the tribunal’s decision about the underlying mixed question of fact or law is within its jurisdiction, then the court – when deciding a question raised with it under section 34 – has to respect that finding because it was made within jurisdiction.

GORDON J:   But then you address the authorities which said that the tribunal cannot create or decide its own jurisdiction outside the ambit of what is submitted to arbitration.

MR SHEAHAN:   Yes.  In short, all those authorities are consistent with our position because our premise is that the finding that there has not been a prior final determination on this claim or issue is within jurisdiction.  It is the corollaries that the court can look at independently.

GORDON J:   So, to pick up the Chief Justice’s question, at some point – and I am sure you are going to come to it – when you are looking at 34, and you are looking what is submitted to arbitration, you go back to the definition of “dispute” in section 7 within the Act and within the Model Law, does one adopt a different approach from an interim approach, as distinct from what I will call a final award?

MR SHEAHAN:   I do not think so, your Honour, but I will reflect on it, if I may. 

GORDON J:   Thank you.

EDELMAN J:   Is the reason that you say it is within jurisdiction because of competence‑competence?

MR SHEAHAN:   The reason, your Honour, it is within jurisdiction is easily exposed.  It was the respondent that raised the question whether there was an issue estoppel or a res judicata for determination in the second interim award.  There is no question that the tribunal had authority under the scope of the submission of arbitrator to arbitration to deal with any defence of res judicata, issue estoppel, or Anshun estoppel; it was within the scope of the submission to arbitration.  So, within that scope is the entitlement jurisdiction to decide whether there had been a prior final determination of the relevant claim or issue by that tribunal in the first interim award.

EDELMAN J:   But do you accept that the question raised by the respondent is a jurisdictional question – the Anshun estoppel questions or the res judicata questions were jurisdictional questions?

MR SHEAHAN:   So, estoppel, res judicata, Anshun estoppel are not jurisdictional.  That is plain, and we do not think contentious.  Colour of jurisdiction – we say “colour” – is given to the issue by their reliance on functus officio, but our short point is the functus officio question, so far as it arises, depends upon the same facts, same matters determined within jurisdiction by the tribunal in addressing issue estoppel, and so on.

GLEESON J:   Mr Sheahan, if the tribunal had not ruled on that issue at the request of the respondent, but had simply gone ahead and dealt with the contract criteria issue – let us assume there had not been a waiver by the respondent – would the position be any different?

MR SHEAHAN:   The mere raising of these arguments is not critical to what is within the scope of the submission for this reason, that the tribunal would always be authorised by the original creation of the dispute to deal with all proper defences.  An issue estoppel defence or res judicata defence would be a proper defence, so it always had within its scope the ability, the jurisdiction, to deal with such issues.  So, it is not an accidental phenomenon.

GLEESON J:   At some point, I would be assisted if you could deal with the decision of the Court of Appeal of Singapore in CBX in 2021.

MR SHEAHAN:   Thank you, your Honour.  Now, there are just a couple more provisions of the Act that I need to take your Honours to.  Section 32 ‑ ‑ ‑

STEWARD J:   Just before you get to section 32, can I ask you a question about section 23(3), which is about parties amending their pleadings.  There is a reference there to the phrase:

during the course of the arbitral proceedings –

Does that have any received meaning, what “the course of the arbitral proceedings” might be?  If you want to take this on notice, that is fine.

MR SHEAHAN:   I think I will need to, your Honour.  There is almost bound to be, having regard to the size of Mr Born’s three‑volume text of International Commercial Arbitration.

STEWARD J:   Yes, all right.  Thank you for that.

MR SHEAHAN:   Section 32, on pages 61 and 62, is the only provision dealing explicitly with the concept of exhaustion of the tribunal’s mandate, which is what functus officio is directed at.  It provides that:

The arbitral proceedings are terminated by the final award –

one possibility:

or by an order of the arbitral tribunal in accordance with subsection (2).

None of those alternatives in subsection (2) are relevant here.  Subsection (3) says:

The mandate of the arbitral tribunal terminates with the termination of the arbitral proceedings, subject to –

two exceptions.  Again, neither of those exceptions are relevant.

GAGELER CJ:   Now, do the UNCITRAL rules have the effect that an interim award is a final award?

MR SHEAHAN:   The UNCITRAL rules have the effect that an interim award is final and binding.

GAGELER CJ:   But, within the meaning of Article 32, is an interim award a final award?

MR SHEAHAN:   No.  So, the content that has been given to the expression “final award” in the authorities is that it is an award that disposes of all issues that have arisen between the parties that are within the scope of the arbitration, including costs.  Hence, the termination – the entire termination – of the mandate under subsection (3).

GAGELER CJ:   So, a short way of putting your case is that the mandate continues until there is a final award.  There is no final award, so there is no functus officio.

MR SHEAHAN:   Correct.  Yes.

BEECH‑JONES J:   And just about everything else that happens is within jurisdiction?

MR SHEAHAN:   Yes.  That is a short way of putting the case.  But we do not rest entirely on that.

GAGELER CJ:   Is it infirm in some way?

MR SHEAHAN:   Your Honour, one of the difficulties is raised by section 16, which, as your Honours saw, deals with jurisdiction and provides a mechanism for resolving issues about jurisdiction, but it is not expressed in the same language in which section 34 is expressed.  So, if we go now to section 34 – which is the one I was going to go to next, and this is the critical one for present purposes – it sets out a negative proposition:

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.

Which is not relevant.  In subsection (2), paragraph (a) deals with four limbs that depend upon, as the chapeau indicates, the applicant providing proof of something; (b) operates quite independently and looks more at public policy questions.  Each of the four matters in (2)(a) – as Justice Ribeiro said in C v D, which we will come to – is ultimately grounded in the absence of consent.  So, (i) deals with matters going to the validity of the arbitration agreement; (ii) goes to a notice of the appointment to a party or other inability for the party to present its case; (iii), with which we are concerned, has two limbs, an:

award deals with a dispute not contemplated by . . . the submission to arbitration, or contains decision on matters beyond the scope of the submission to arbitration –

and (iv) deals with the composition or procedure not being as agreed:

the composition of the arbitral tribunal or the arbitral procedure –

not being as agreed.  Going back to your Honour the Chief Justice’s question, an issue has arisen as to how sections 16 and 34 interact.  If I can just say this without going to the passages, in C v D in the Hong Kong Final Court of Appeal, the Chief Justice and Justice Ribeiro appear to have concluded that 34 has to be read harmoniously with 36, so that, in effect, anything that is a true jurisdictional question has to be available under 34, although textually it is not easy to see how that works.  On the other hand, Justice Gummow, at paragraph 157, says that section 34 should be read epexegetically against section 16.

BEECH‑JONES J:   Mr Sheahan, did you mean a minute ago that 34 should be read with 16?  You said 36.

MR SHEAHAN:   Yes, I meant 34 and 16.

BEECH‑JONES J:   Yes, I am sorry.  You were saying about Justice Gummow.

MR SHEAHAN:   Yes.  Justice Gummow said that section 34, which has those very limited grounds of setting aside awards, should be read epexegetically against section 16, meaning, as we understand it, that it explains section 16.  So, it qualifies section 16, not the other way around.  I am sorry, that is a long answer to your Honour the Chief Justice’s question; there are some nuances about this.

GORDON J:   Can I ask a practical question in relation to 34(2)(a)(iii).  It has the two limbs that you identify at the beginning.  The submission toward arbitration in both of those limbs, is it a reference back to, in a sense, section 7, submission to arbitration by agreement – in section 7(1), which is like the Model Law?  In other words, one is looking to see what was the subject of agreement; that is, what was submitted to arbitration.

MR SHEAHAN:   It is at least a reference back to section 7(1), as your Honour points out, but your Honour will see that 7(1) is about the arbitration – characterising an arbitration agreement, so it is an agreement to submit, and so the submission is something that happens consequent upon there being an agreement to submit.

GORDON J:   That was my next point.  So, one has a starting point of an agreement to submit to arbitration.  One then has identification of what it was the subject of the agreement that was submitted to arbitration, for the purposes of section 34(2)(a)(iii), and consistent with the underlying philosophy of party autonomy in arbitration, does that mean that the agreement can subsequently change?

MR SHEAHAN:   Yes, it does.

GORDON J:   I will come back to this, then.  Are we then concerned with the parties’ agreement here as to what was within the scope of the first interim hearing?  I ask that for this question, because if that is truly the question – I think it goes to jurisdiction – what is the subject matter of that which was to be decided in the first interim hearing?  Then one is concerned to know what the parties agree on, are they not?

MR SHEAHAN:   Can I see if I end up addressing your Honour’s query in the course of my submissions?

GORDON J:   Yes, of course.

MR SHEAHAN:   Because it is, if I may say so, a very good question, but I think we will deal with it.

GORDON J:   Okay, thank you.

BEECH-JONES J:   Mr Sheahan, just while we are on 34(a)(iii), the first limb refers to the dispute, the second limb refers to matters beyond the scope of submission.  What is the significance, or example, of the difference, you say?

MR SHEAHAN:   So, if the notice of arbitration related to provision of staff at well site number 1, and the tribunal went on to give an award in respect of staff provided at number 2, then it would be outside the scope of the submission to arbitration.

BEECH-JONES J:   That would be the dispute, but what about decisions on matters?  Or do you say that the example that covers both?

MR SHEAHAN:   So, that example could cover both, but you might have a dispute about well site number 1, that it is only dealing with staff for a particular period, and the tribunal decides for a longer period, for example – that would be a matter outside.  There may not be a great distinction between the two.  Justice Gummow described them as gradations in his judgment in C v D, rather than bright lines between them.

GLEESON J:   Mr Sheahan, can I ask, do you accept that section 34(2)(a)(iii) involves a two‑stage process in relation to that second limb – that is, the identification of the scope of the submission to arbitration – and then a question about whether the award involved matters within the scope or outside the scope of the submission – which is the way that the test was formulated in PT Asuransi?

MR SHEAHAN:   Yes.  If I said that was the last section I needed to go to, I was mistaken.  The last one is section 36 – only to note that it deals with enforcement of awards, and it substantially mirrors section 34.

Your Honours, the starting point of our discussion is what we understand to be an uncontroversial proposition, and that is that one matter that was within the scope of the submission to arbitration was whether the first interim award had finally determined the contract criteria claim.  That that was within the scope of the submission is made plain, as we have mentioned, by the fact that it was the respondent that raised that question as the foundation for its defences of estoppel and functus officio.  It is recorded explicitly by the primary judge at paragraph 63 at pages 23 to 24 of the core appeal book.  We noted that:

Chevron acknowledges that where an arbitral tribunal has (erroneously) concluded a party is not precluded from advancing certain claims by reason of a cause of action . . . estoppel, an issue estoppel or an Anshun estoppel) that such an error will be an error of law.  But significantly, Chevron accepts that any such error of law ultimately will not bear against the jurisdictional authority of the arbitral tribunal.

And authority is then cited.

BEECH-JONES J:   So, where did you read from again, Mr Sheahan? 

MR SHEAHAN:   That is paragraph 63 at the bottom of page 23 of the core appeal book.  Now, can we just pause to note that, despite the concession, what was done by the Court of Appeal was to hold that the finding that the contract criteria claim had not been finally determined in the first interim award was wrong and did hold that against the tribunal as regards jurisdiction. 

The approach we adopt in our submissions here is supported by a case that is indistinguishable, except in one interesting respect.  That is the decision of the Singapore Court of Appeal in PT Asuransi v Dexia Bank, volume 6 of the joint appeal book, at page 597.  If I can summarise the facts very briefly.  There was a first award that allowed a monetary claim.  The appellant commenced a new arbitration based on circumstances arising after the commencement of the first arbitration and sought a declaration that it had no obligation to pay.  The second tribunal held that that argument was precluded by a Henderson v Henderson estoppel and upheld an objection to the jurisdiction of the second tribunal.   We see this at pages 967 to 968 in paragraphs 18 and 19.  So, paragraph 18 has the matters held by the second tribunal, and then in 19 the jurisdictional consequence of those findings. 

In the Court of Appeal, it was held that the estoppel finding, which they call the third critical finding, was wrong, and we see that at paragraph 41 on page 976.  That is the third critical finding, and in the last sentence, “erroneous”.  The court also held that the second critical finding was wrong.  The second critical finding appears at page 969, in paragraph (b) at the bottom of the page, and your Honours will immediately appreciate that that is a finding that goes to the Henderson v Henderson‑type estoppel that was relied upon and accepted by the tribunal at the second hearing, and the Court of Appeal held that that finding was wrong, as well.

The court held that both those decisions were within jurisdiction, with the consequence that the jurisdictional – it held on ultimate jurisdictional finding, could not be attacked inconsistently with those decisions even though they were wrong, and we see this at paragraph 45: 

It is clear from the Second Award that the Second Tribunal dismissed the appellant’s claim on the basis of issue estoppel.  As we have noted earlier, this finding is erroneous.  However, it does not necessarily follow that such an erroneous finding of law can be set aside.

In 46, they set out the appellant’s argument, and on the next page, at 48, the court says, in the second sentence: 

It was, after all –

This is the argument: 

the third critical finding that led the Second Tribunal to find that it had no jurisdiction to decide the substantive issues –

but that argument is rejected at paragraph 50.  Nonetheless, in our view, the third critical finding, estoppel or not, stems from an issue which a tribunal, in determining its own jurisdiction, is entitled to determine; it was a matter within the scope.  For that reason, the third critical finding, that led the second tribunal to find that it had no jurisdiction, cannot be set aside.

What we have, in our respectful submission, is, subject to one matter, a decision on all fours with the present case, and reasoning, in our respectful submission, powerfully supports the arguments for the appellant.  That is, if a tribunal makes a finding of estoppel, or not, and a consequent finding of jurisdiction predicated upon the estoppel finding, you cannot attack the jurisdictional finding.

BEECH‑JONES J:   When you say the tribunal makes a consequent finding of jurisdiction based on the estoppel finding, is that really just the tribunal saying, we are bound by the estoppel, claim dismissed, as opposed to it saying, we do not have any jurisdiction in the way we would use it in this country to look at the claim?

MR SHEAHAN:   That could be how it was worked out, but procedurally what happened was that there was – if I recall the facts correctly – a section 16‑type application for an interim ruling of the court on a question of jurisdiction, and the court did rule on that question, and it ruled it had no jurisdiction because of the operation of the estoppel.  So, it was explicitly a jurisdictional finding.

GAGELER CJ:   It must have embodied that in something called an award for Article 34 to be engaged at all.

MR SHEAHAN:   For Article 34, it would have to be engaged, and one of the subsidiary points that arose in this case was whether the decision on jurisdiction – the decision of no jurisdiction, could be an Article 34 award, and the answer was that it is not, because a finding of no jurisdiction is not an award.

GAGELER CJ:   So, Article 34 was not engaged?

MR SHEAHAN:   Strictly speaking, no.

GORDON J:   I thought the Singapore Act had its own weird definition, did it not, of an award?

MR SHEAHAN:   It does now, since ‑ ‑ ‑ 

GORDON J:   But in this decision it did, because the amicus was required to address that very issue, and it pointed out that there is no definition of “award” in the Model Law and that the Act adopted a narrower version.

MR SHEAHAN:   I will come to the history of that in a little while, but the Singapore Act was amended, in summary, to include a definition of “award”, that it made it extend to partial awards as well as final awards, and it had a specific provision dealing with the limitations of a tribunal, the limits on its power to interfere with, vary, correct or upset what had been decided by a partial award.

GAGELER CJ:   Is a partial award different from an interim award?

MR SHEAHAN:   I am sorry, your Honour?

GAGELER CJ:   Is a partial award different from an interim award?

MR SHEAHAN:   They just use different language, your Honour.  So, in substance, no.  I said there was a point of distinction that takes this case one step away from ours.  The point of distinction is that there were two arbitral tribunals, not one. 

GAGELER CJ:   Well, two disputes.

MR SHEAHAN:   Your Honour can put it that way.  There are two things about that.  One is that it does not affect the reasoning.  The logic of the Court of Appeal is that where the matters said to affect jurisdiction have been decided within jurisdiction as going to, for example, estoppel, the court cannot decide the jurisdictional question by setting them aside, even if it thinks that they were erroneously decided.  The court has to respect the tribunal’s findings about those matters.  So, that is the reasoning for which we contend.

The second is that it is, I think, accepted that if, in the circumstances here, the first interim award had been given by a different tribunal – for some reason the proceedings stopped and then there was a second interim award given by a second tribunal – it is accepted that the argument of functus officio, the jurisdiction argument, could not be raised in respect of the identical decision, reasoned identically, by the second tribunal. 

That is a profound anomaly, in our respectful submission.  Not only because it is difficult to see why there should be a difference but that it is actually counter‑intuitive, given that the question in a case like this was something finally determined by an earlier award, fundamentally dependent on the interpretation of procedural orders of the tribunal, and who better to determine that question than the tribunal which issued them and which was familiar with the complex procedural context in which those orders were made.

GAGELER CJ:   Are you just using “functus officio” as a label for the outcome of a consideration of other doctrines, rather than a separate jurisdictional ground?

MR SHEAHAN:   The way your Honour puts it, the second description is correct; it is just a label that directs attention to other questions about the exhaustion of the power of a particular body.  But it is the label – there was talk of, in the reasoning of the Court of Appeal and the primary judge – it seems to have been seen as an independent, free‑floating doctrine going to jurisdiction.  That may have been, in our submission, part of the thinking that led the court, as we would have it, astray.

EDELMAN J:   All of these different but related doctrines, whether you put them under the broad banner in England of abuse of process, or whether you treat them all as independent doctrines, they may be said to be within jurisdiction, but ultimately, is not the question of whether there is a dispute a question of jurisdiction itself?  So, each of these doctrines are steps on the way to determine whether there remains a dispute within section 34.

MR SHEAHAN:   Forgive me for pausing, your Honour.  When you get to section 32, the dispute has achieved finality and the mandate of the tribunal is terminated.  For the purposes of section 34, the dispute is not going to be resolved.  There is a question of the scope of what is submitted to the tribunal, and so the dispute is assumed, as it were, still to be in existence by section 34(2)(a)(iii).

EDELMAN J:   But the scope of the dispute would necessarily also be a jurisdictional question in the same way that the dispute is a jurisdictional question.

MR SHEAHAN:   Yes, the scope of the dispute is a fundamental question here, but there is no question – there is no contest that the substantive issue, my client’s contract criteria case, was within the scope of the dispute submitted to the arbitrators, and there is no question that the issue estoppel, res judicata, Anshun estoppel defences were within the scope of the dispute submitted to the tribunal for determination in the second interim award.  All we are saying is the corollary is that the findings that are made within jurisdiction in resolving those matters within the scope of the dispute cannot be set aside for the purposes of drawing a conclusion about functus officio.

EDELMAN J:   Would that then mean that – suppose the arbitration had proceeded to a full conclusion and a final award where the contract claim had never been raised, and that a new arbitration is sought to be commenced now to raise that contract claim, why on your argument would that not be possible?

MR SHEAHAN:   It would be possible, and the second tribunal would have to decide a question of res judicata or issue estoppel, or something of that kind, and that decision would not be reviewable by a court.  That is the incongruence that we point to with the outcome of the decision of the court below.  In other words, the same tribunal, one outcome; different tribunals, different outcome.  I know it is bad advocacy to ask a rhetorical question, but we do rhetorically ask why.

GAGELER CJ:   Can I just understand why you put the existence of a submission of a dispute to arbitration?  There is only one submission, is there not, at the beginning of the arbitration, and then what happens in the bifurcation and then the determination of the first interim award and second interim award is all within the arbitration of the one dispute, I think, but I am not sure.  You seem, perhaps, to slip from time.

MR SHEAHAN:   There is one dispute, but in the course of an arbitration the precise boundaries of it may expand by amendments, by the parties agreeing to deal with an issue, even if not formally amended, and so on.  So, the scope of the dispute may expand, as long as there is the consent, or it may contract, again as long as there is consent.  It is not simply a matter that is set in stone when there is a notice of arbitration and then a response.  It will be affected by subsequent pleadings and the course that is taken by the parties, it will be affected by the tribunal’s orders made in accordance with its powers under the relevant rules, which give it power to permit new claims to be extended or contracted.

BEECH‑JONES J:   Is your approach that this concept of functus as a jurisdictional concept is not engaged or does not mean anything until section 32 is engaged?

MR SHEAHAN:   Yes, but I will come back to that. 

GORDON J:   As I understand your submission, you cannot have a question about the tribunal having exhausted its remit unless you have a section 32 termination.

MR SHEAHAN:   Yes.

EDELMAN J:   But even then, a new arbitration could be commenced, raising exactly the same issues, and that would still be within jurisdiction of the new tribunal, but subject to defences of res judicata, or Anshun estoppel, and so on.

MR SHEAHAN:   Yes, and that is the way the system is supposed to work.  That is to say, it seems odd that that could happen, and it might be that the second tribunal makes an erroneous decision about an estoppel point, and parties have to litigate again, but the philosophy on which this whole system is erected is that if the cure to a problem is more curial oversight, then the cure is worse than the disease.

BEECH‑JONES J:   The situation you just addressed there, there might be an argument about whether there is a dispute, would there not?

MR SHEAHAN:   There may be.  There may be, your Honour.

BEECH‑JONES J:   Because the original dispute, there might be an argument.  There may not be an argument where both parties agree to submit that new further dispute to arbitration.

MR SHEAHAN:   Your Honour, that may be so.

GORDON J:   I mean, you have to have consent.  So, I do not quite understand the second tribunal in that example, because in the case of Dexia Bank, as the Chief Justice pointed out, there were two disputes.  But in your example here, if you have a dispute submitted to arbitration, you have a section 32 termination, then I do not understand why there would be the prospect in relation to the same dispute, a second arbitration.  Am I being slow about that aspect of it?

MR SHEAHAN:   No, your Honour, never.  We would say while you could say – as the Chief Justice did in respect of Dexia – that there were two disputes, from another point of view, there was just one.  That was the entitlement of the claimant to be paid the sum of money.  It was one dispute, it arose twice.  The first time it arose, it was answered favourably to the claimant; the second time, that was put in issue, and there was a decision about estoppel and res judicata.  So, when one talks about disputes, you could say that the second one was a different dispute, but more fundamentally, it was the same.

Your Honours, it all hinged – in a sense, all of this has to be resolved within the language of 34(2)(a)(iii).  It is not easy to find in 34(2)(a)(iii) a textual footing for our learned friends’ position.

GAGELER CJ:   Which bit is it said to be?

MR SHEAHAN:   I am sorry, your Honour?

GAGELER CJ:   Which bit of section 34(2)(a)(iii) is said to be engaged?

MR SHEAHAN:   As I stand here, your Honour, it is not clear to me.  I could be – I think the first.

GORDON J:   The argument that is put against you is that, by reason of agreement to bifurcation, consistent with procedural orders of the tribunal, that what was determined to fall within the terms of submission to arbitration for the first hearing subsumed and consumed all issues of liability, including the contract criteria case.

MR SHEAHAN:   So that was, in a sense, the argument.  But, as we submit, we attack it at an anterior point.  Let that be the argument.  Our submission is that the question of whether those matters had been dealt with in the first interim award was a question for the tribunal, because it made a finding on that very question in the second interim award, and it made that finding within jurisdiction.  So, when the court comes to address a set‑aside application under section 34, it can entertain it.  But when the argument is, the tribunal got that finding wrong, and because they got it wrong, you can see that, really, there was a jurisdictional problem, you cannot take the first step because the finding – like the finding in Dexia – was made within jurisdiction.

So, it is about the anterior step – not the argument about, something has been decided finally, therefore it cannot be decided again; it is the anterior step.  You do not have the factual basis for asserting that it was decided finally. 

STEWARD J:   Can I ask you a question – a very basic question.  In the second award, I think the majority took the view that, at least in some respects, the contract criterion issue did go to quantum and not liability.  So, there are two questions arising from that:  (a), is that what you say now, and, (b), is the question of whether it goes to liability or quantum a matter that the tribunal itself, and only itself, can answer?

MR SHEAHAN:   So, we say the latter, because the tribunal was seized with that question in deciding, for example, the issue estoppel defence in the second interim award; it was seized with the question, what was finally determined by our earlier award, and it answered that question.  Having answered that question within jurisdiction, the court cannot undo that answer as the premise for a further inquiry about jurisdiction.

It is not necessary for anything we say, your Honours, to argue that the tribunal was right, the majority of the tribunal was right, or the minority was right, or the Court of Appeal was right in their analysis of all the circumstances; the point of our submission is that the court should not have started the inquiry.

STEWARD J:   So, we do not have to worry about whether it went to liability or quantum.  You do not have to answer that? 

MR SHEAHAN:   No, you do not have to answer that question.

STEWARD J:   We just need to ask the question:  who gets to answer that question?

MR SHEAHAN:   That is precisely the question. 

BEECH-JONES J:   Underneath, you, I think, articulated a proposition that every fact or matter found within jurisdiction effectively binds a court, looking at the question of something as to whether it was out of jurisdiction.

MR SHEAHAN:   Yes.  That is, as we submit, completely consistent with the reasoning in Dexia.

BEECH-JONES J:   Outside of an arbitration context, you do not draw any – I am not aware of any other context of judicial review, whether that would be true or not ‑ ‑ ‑

MR SHEAHAN:   I do not have the mental capacity to think about judicial review on top of this, your Honour, but ‑ ‑ ‑

EDELMAN J:   But it would be jurisdictional facts.  I mean, jurisdictional fact could be found by a tribunal within its jurisdiction, but no one would suggest that the court would be bound by that finding of jurisdictional fact. 

MR SHEAHAN:   I certainly would not suggest that, your Honour, no.  But it is a different area of discourse because, in the public law context, the court – it is fundamental that the court will interfere because – where there is no actual legislative authority for the conduct of the official.  But the opposite position is the case in arbitration; it is fundamental that the court will not interfere, unless you can point to something falling within 34(2)(a).

As to that, I just want to take your Honours to the decision in C v D, in volume 4 of the joint book of authorities at page 314.  What was in question in that case was whether a pre‑arbitral step in the dispute resolution provisions went to jurisdiction or not – an agreement that the CEOs negotiate, that sort of thing.  The principal judgment was given by Justice Ribeiro, with whom the Chief Justice and Justices Fok and Lam agreed; all the justices agreed in result.  I wanted to take your Honours to page 338.  This is just to take your Honours to statements of what ‑ ‑ ‑

GORDON J:   Could you just give us the paragraph numbers?  Some of us are working off other copies.

MR SHEAHAN:   Certainly, your Honour.  Paragraph 51.

GORDON J:   Thank you. 

MR SHEAHAN:   The last sentence – these are just descriptions of what 34 is all about: 

Subject to the public policy exception . . . the objections which warrant recourse to the court uniformly postulate situations where consent to the tribunal’s authority is negated.

And then at paragraph 65 on page 344, again, the proposition is all these separate limbs are grounded in questions of consent.  Similarly, at paragraph 128, in the judgment of Justice Gummow on page 364.  And at paragraph 129, on the next page, his Honour cites with approval – it was said in CRW by the Singapore Court of Appeal, in the second part of the quote: 

it is trite that mere errors of law or even fact are not sufficient to warrant setting aside –

And then about halfway down:

the vital distinction between the erroneous exercise by an arbitral tribunal of an available power vested in it . . . and the purported exercise by the arbitral tribunal of a power which it did not possess.

GLEESON J:   So, the former is PT Asuransi? 

MR SHEAHAN:   I am sorry, your Honour?

GLEESON J:   I think you might be calling it Dexia.

MR SHEAHAN:   The case that I was referring to earlier was Dexia.

GLEESON J:   So, that is the erroneous exercise by the tribunal of an available power? 

MR SHEAHAN:   Dexia is a finding by a second tribunal that it was bound by an issue estoppel and therefore had no jurisdiction, even though it concluded that the tribunal was wrong to find that there was an issue estoppel.  So, it is, in that sense, the flip side of the present case, but the reasoning is the same.

BEECH-JONES J:   Mr Sheahan, just in terms of paragraph 129, the description in the passage from CRW of Article 34(2)(a)(iii) addressed the situation where:

the arbitral tribunal exceeded . . . the authority that the parties granted to it –

As I understand it, here, the argument is the parties did not grant the tribunal authority to decide the same issue twice.

MR SHEAHAN:   That is the argument, but it omits the anterior step.

BEECH-JONES J:   Which is:  who decides whether they have decided it twice?

MR SHEAHAN:   Who decides whether it is looking at it a second time.  And the last sentence:

Art 34(2)(a)(iii) . . . applies where an arbitral tribunal exceeds its authority –

et cetera.  Your Honours will appreciate that our submission is that any determination by a tribunal that its own previous interim award did not determine a claim or issue so as not to give rise to an estoppel of some kind will be within jurisdiction, will be within the scope of the submission to arbitration, because it is simply dealing with a defence to a claim or an answer to an issue raised by the other party. 

The distinction that we draw here is supported by the distinction recognised in international arbitration law between matters going to the jurisdiction of the tribunal and matters going to the admissibility of the claim.  This is sometimes called the jurisdiction admissibility distinction, but more helpfully, I think, the “tribunal versus claim” test.  It has been approved and applied by the Singapore Court of Appeal and the Hong Kong Final Court of Appeal.  In the Singapore Court of Appeal, in BTN and BTP in the joint appeal book at page 286 in the same volume. 

Can I just mention to your Honours – it was discussed by a Court of Appeal at paragraphs 93 to 96, and distinguished on the basis that the court in BTN was not concerned with the question of functus officio as such.  And that is correct; it was not.  But your Honours will see why the reasoning in it is of relevance here.  In BTN ‑ ‑ ‑ 

GAGELER CJ:   I am sorry, what paragraphs of what judgment where you just referring to then?

MR SHEAHAN:   I was just referring to the Court of Appeal in this case – at 93 to 96, that is where they discuss BTN. 

GAGELER CJ:   Thank you.

MR SHEAHAN:   Now, in BTN, the question was whether an arbitral tribunal had erred by finding that issues had been finally determined by a court so as to give rise to estoppels.  The Court of Appeal said that that was plainly within jurisdiction – to make a decision on that issue – and was not reviewable or liable to be set aside under 34(2)(a)(iii).  The critical passages are at paragraphs 69 and 71 on pages 309 to 311.  At page 309, paragraph 69, the court refers to one of its own decisions, BBA v BAZ, citing paragraph 77:

The ‘tribunal versus claim’ test asks whether the objection is targeted at the tribunal (in the sense that the claim should not be arbitrated due to a defect in or omission to consent to arbitration), or at the claim (in that the claim itself is defective and should not be raised at all).

BEECH‑JONES J:   Mr Sheahan, what paragraph was that again, sorry?

GORDON J:   I think we are a bit lost.

MR SHEAHAN:   I am sorry, your Honours.  It is in the joint bundle of authorities at page 309, and for your Honour Justice Gordon, paragraph 69 in BTN.

GAGELER CJ:   It begins:

I first address –

Is that the paragraph?

MR SHEAHAN:   The paragraph commences:

As this Court explained in BBA v BAZ –

GORDON J:   I think we need to be in tab 11.  We have two copies of BTN, I think we have been looking at the wrong BTN.

MR SHEAHAN:   I see.

GORDON J:   We are now in the right BTN, which is tab 11.

MR SHEAHAN:   I am sorry, your Honour, I did not have tabs.

GORDON J:   That is all right.

MR SHEAHAN:   So, the first instance judgment is here as well as the Court of Appeal.

GORDON J:   Correct.  We need to be in the Court of Appeal judgment?

MR SHEAHAN:   Correct, yes.

GORDON J:   We are in tab 11 and we want to be at paragraph 69 on page 309.

MR SHEAHAN:   Correct.

GORDON J:   Thank you.

MR SHEAHAN:   It is just the first paragraph of the quote:

The ‘tribunal versus claim’ test asks whether the objection is targeted at the tribunal . . . or at the claim (in that the claim itself is defective and should not be raised at all).

Now, on the next page, at paragraph 71, the court continues:

determinations of res judicata issues should likewise be treated as decisions on matters of admissibility, not jurisdiction.

I should say, we do not understand this to be challenged.  Going to the bottom of the page:

We agree with the Judge below that this statement of principle is applicable to decisions made by arbitral tribunals –

and then they go on to quote some observations by an author, Ms Walters.  Relevantly, at the top of the next page, they approve this statement:

as a matter of logic, where a party alleges that a dispute has already been resolved and should not be reheard, the party is not attempting to get the dispute resolved in a different forum; rather the party does not want the claim (or part thereof) to be resolved in any forum.  In sum, a decision on the issue of res judicata is one of admissibility, and the courts cannot review it on its merits.

Now, that proposition, the matter of logic, is applicable in this case.  Although it was put as a jurisdictional question under the label “functus officio”, as a matter of truth and substance everyone knew that the party, the respondent, was alleging a dispute, had already been resolved and should not be resolved anywhere.  It was not a complaint about the tribunal, want of consent or something of that kind, it was a complaint that the claim was now bad, and that sort of claim is a claim in accordance with this jurisdiction goes to the admissibility of a claim, not to the jurisdiction of a tribunal, and dressing it up as something called functus officio does not change that, in our respectful submission.

GAGELER CJ:   How does the concept of admissibility help?  I mean, one could just say, well, it is a question of jurisdiction or not jurisdiction, there are things in jurisdiction, there are things that do not go to jurisdiction, I am just – this intermediate concept of admissibility is difficult to grasp.  I think it comes from international law, does it not?

MR SHEAHAN:   Your Honour, as Justice Gummow explained in C v D, where he differed on the utility of this tool of analysis, he traced its origins to international arbitrations in the true sense between countries and he thought it had relatively little explanatory power in international commercial arbitrations under the Model Law.

BEECH‑JONES J:   Sometimes a party is very happy with their estoppel.  They are not just saying do not resolve the dispute, they are saying in this dispute take my earlier victory and give me a further one.  So, it does not necessarily mean it is not admissible, it means – it can mean do not decide this dispute, or it can mean decide this dispute my way.

MR SHEAHAN:   Quite so, quite so, but the question is the preclusive effect of what was previously finally decided, and here it was just a complete preclusion that was set up.  Can I just say one more thing to your Honour the Chief Justice about the distinction and its utility?  There is much to be said, of course, for Justice Gummow’s observations.  Although they were in the minority, every other member of the court looked at the question and thought that there was some utility in this tool of analysis and, as we have seen, it has been adopted in Singapore as well.

It is also the case that the particular question that he was confronting in C v D was not really much assisted on one view by a claim versus tribunal analysis because it was just a question of an anterior step in the dispute resolution process.  Whereas here, in our respectful submission, the way the distinction is analysed in cases like BTN, and in the passage we just took your Honours to, is plainly applicable and pertinent to the question before the Court.

GORDON J:   In the Court of Appeal, at paragraph 119, they deal with BTN, and they explain that it is possible to have inconsistencies between the two concepts of, as I read it, distinction between what they label as “functus officio” and the estoppel res judicata‑type argument.  That is how I read the way they deal with that paragraph.  Is that right, and if it is not right, what is wrong with it?

MR SHEAHAN:   In paragraph 119, which is on page 201 of the core appeal book, we would rely on what is said in the first sentence:

The Tribunal’s findings . . . no preclusionary estoppels . . . were underpinned by the same findings from which it concluded that it was not functus officio –

GORDON J:   So, take that as a given, I think that is a proposition you made earlier.  It is the last sentence:

There is nothing ‘highly unusual’ in the court intervening –

et cetera.  That is the way they distinguish, as I understand the argument, or seek to answer the argument you have just put to us.

MR SHEAHAN:   When the Court says in the last sentence that:

There is nothing ‘highly unusual’ I the court intervening –

in one sense, or on one ground but not on another, we do, with respect, beg to differ.  The decision of the Singapore Court of Appeal in Dexia is on point.  The court looked at findings on issue estoppel and the basis on which they were granted and said they were wrong, and then they looked at the corollary of those same findings – res judicata, no jurisdiction – and they said, well, we cannot interfere with that because those earlier findings that we said are erroneous were made within jurisdiction.  So, we cannot use, as a launchpad for reversing a jurisdictional decision, our own view of those matters independent and in contradiction to the view of the tribunal.

So, with respect, the position that was adopted by the Court of Appeal on this matter glossed over the problem that we seek to identify and failed to give effect to the acknowledged fact that the decisions of the tribunal in relation to whether matters have been finally determined were made within jurisdiction.  That should have been respected, and it was not. 

GAGELER CJ:   We will take the morning adjournment at this stage.

AT 11.16 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.30 AM:

MR SHEAHAN:   Can I provisionally correct something I said to your Honour Justice Steward.  We have not been able to find any commentary on the critical words in section 23(3).

STEWARD J:   Would you say that the language in that section needs to be read with section 32?

MR SHEAHAN:   The language in the section ‑ ‑ ‑

STEWARD J:   Where it talks about the course of an arbitration.

MR SHEAHAN:   Yes, it does need to be read with section 32 ‑ ‑ ‑

STEWARD J:   There needs to be a start and an end date.

MR SHEAHAN:   Yes.  Your Honour Justice Gleeson asked me if would we be addressing CBX, I think.  It had not been our intention to do so, but can I simply say this:  it was a case under the ICC rules, and as I understand it, what happened was that there were terms of reference contemplated by the ICC rules.  One party sought to raise a new claim that was outside the terms of reference.  Permission to do that was neither sought nor given, but the claim was determined, and it was held that it was determined outside the scope of the submission to arbitration.  But that was because the particular procedural rules – Article 23, rule 4 of the ICC Rules – confined the circumstances in which the claim could be expanded beyond the matters in the terms of reference, and they were not complied with.

It exemplifies a feature of arbitral practice, that expansion of the dispute can occur either by the parties’ agreement or by the powers of the tribunal conferred on it by agreement.  Here, there was a power, but not exercised, and there was limiting language in the rules that meant that the result follow.

EDELMAN J:   If the dispute can be expanded by the tribunal in that way, can the dispute not be contracted by the tribunal by deciding aspects of the dispute?

MR SHEAHAN:   The decision – let us assume the correctness of that for the moment.  It certainly seems arguable, it does not aim at our point, if I may say so with respect, because ours is the anterior point:  who decides.

EDELMAN J:   I appreciate that, but it was also put to you earlier that 34 and 32 could be read together in a way that “dispute” in 34 really just meant the entirety of the proceedings, so that the dispute was not concluded until every aspect of it was determined.  I think you acceded to that proposition, but that appears to me to be inconsistent with the answer that you just gave to my question then.

MR SHEAHAN:   Your Honour will have noticed my answer was a little bit tentative to your Honour’s second question.  The idea that the dispute is the broader thing, it is the substance of the issue between the parties, is the better one as arose in discussion between Justice Gordon and myself before the break.  In Dexia, the dispute properly seen encompassed – it was the same dispute in both arbitrations:  was there an entitlement to be paid the particular sum by the bank?  One dispute, two arbitrations; now, a fortiori, one arbitration, the same dispute.

GLEESON J:   You, ultimately, do not disagree with the proposition that the scope of the arbitration is a matter for the court to decide where a question of jurisdiction arises?

MR SHEAHAN:   No, we do not differ from that at all, that is correct.  Can we turn then to paragraph 4(b) and (c) in our outline, that is that the wider statutory context tells against 34(2)(a)(iii) being a source of power of the kind the Court of Appeal thought it had.  We have already said something about section 32 and I will not repeat that.  The second point is this, and it requires going back to the “paramount object” language in volume 1 of the joint bundle of authorities, at page 19, in the Commercial Arbitration Act.  We saw it earlier, but I just want to focus on some particular expressions.  In section 1C(1), it is facilitating:

the fair and final resolution of commercial disputes by impartial arbitral tribunals –

Now, the decision below increases the role for courts and correspondingly reduces the place of tribunals as the place for final determination of the dispute.

GAGELER CJ:   Mr Sheahan, I have a little difficulty with an argument based on section 1C when we are interpreting the provision that is drawn from the Model Law.  You are not suggesting that one gives section 34(2)(a)(iii) a different operation from Article 34(2)(a)(iii), are you?

MR SHEAHAN:   I do not think we are making that submission.  I think what we would say, your Honour, is that section 1C, in setting out the paramount object of the Act, is setting objects entirely harmonious with the objects of the Model Law, but they are conveniently stated here, for reference, as governing the interpretation of the provisions of the Model Law incorporated in the Act.  We see no distinction arising because of this language.  It is, simply, authoritative language about the purpose of the Model Law and this Act. 

The second language that we emphasise is “without unnecessary delay or expense”.  There is, without doubt, additional delay and expense consequent upon the approach of the Court of Appeal in this case.  Just to take this case as an example, the second interim award was handed down on 4 September 2020, three and a half years ago.  If the decision below stands, then there will need to be another second interim award – perhaps by the same, perhaps by a different tribunal – to assess quantum without the contract criteria case, and all because, as we submit, the courts of Western Australia have variegated them to themselves and in appropriate jurisdictions of review.  The third matter to which we draw attention is in subparagraph (2)(b):

providing arbitration procedures that enable commercial disputes to be resolved in a cost effective manner, informally and quickly.

Can we emphasise the word “informally”.  If curial review of decisions about interim award finality is permitted, then informality will be, itself, an invitation to cost and delay, and only scrupulous attention to form will minimise the risk of a detour to the courts.  Can I exemplify that with just instance, your Honour, not remote from this case? 

Orders to divide issues of liability from quantum are a commonplace, and often made in very simple terms.  Such orders do not always cater for features of some Australian statutory wrongs – I am thinking of misleading and deceptive conduct, for example – where damage is the gist of the action, so that, strictly speaking, it is a liability issue.  That is, that some damage was suffered.  The quantification of the damage might be separated out, but quite careful attention to language is necessary for the orders of bifurcation to recognise that damage exists in both limbs of a bifurcated case dealing with a statutory or common law wrong where damage is the gist.

The court’s approach in this matter invites – requires – formality and stands against informality.  We have already referred your Honours to section 5 that enacts policy of minimal curial intervention.  What that means at least – at least – is that there is no basis for a liberal interpretation of section 34.  We have referred to the broad procedural powers of the tribunal under the Act, and the rules, which highlight the incongruity of the court imposing on the parties its interpretation of the tribunal’s procedural orders, inconsistent with the tribunal’s own interpretation of its own procedural orders in a complex procedural history.

We can see that exemplified in this case.  I will not take your Honours to the passage, but in the judgment of the primary judge at paragraphs 171 to 184, he goes through a series of critical findings of the tribunal from its second interim award, explaining its reasoning for the decision it came to, and then gives a running commentary on each of those paragraphs, taking pot shots at what the trial judge – perhaps rightly – thought were errors in the reasoning of the majority of the tribunal.  At the risk of repetition, the point we make is not that the primary judge was right, or that the majority of the tribunal was right, but that the exercise should not have been embarked upon in the courts.  Those considerations are reinforced by the point made by the Canadian Supreme Court in Chandler, which is in the joint bundle of authorities volume 4 at page 406, pages 419 to 420.

GAGELER CJ:   Mr Sheahan, could you speak up a little?

MR SHEAHAN:   Yes, I will move closer to the microphone.

GAGELER CJ:   Thank you.

MR SHEAHAN:   Chandler, in the joint bundle at volume 4, page 406, pages 419 to 420, a passage that was cited with approval by Justices Gaudron and Gummow in Bhardwaj.  The point that their Honours make is this:  this notion of functus officio, whatever content it has, should be more flexibly applied when you are dealing with a body that is subject to very limited powers of court oversight – they were dealing with administrative law there, but the same applies here.  The point being that you reach a conclusion of functus officio less readily because you want the body to have the power to correct injustice or inefficiency itself, rather than relying upon the very limited powers of curial overview.

Finally, in terms of the wider context, and so far as the scope of the submission to arbitration should be concerned, the court should have regard to the objectives reasonably to be attributed to businesspeople who have agreed to arbitrate.  In C v D again, Justice Gummow, at paragraphs 117 and 118, referred to well‑known passages of the speech of Lord Hoffman in Fiona Trust.  C v D is joint bundle volume 4, page 360.  In particular, paragraphs 117, starting at the bottom of that page, and over to the top of the next; in particular, paragraph 118.

The same passages were quoted by Justice Ribeiro at paragraph 48 on page 336, and he also helpfully set out the observations of Mr Born in paragraph 49, even more directly pertinent here.  That is page 337 of the book in the last paragraph of the quote:

parties can be assumed to desire a single, centralized forum (a ‘one‑stop shop’) for resolution of their disputes, particularly those disputes regarding the procedural aspects of their dispute resolution mechanism.  Fragmenting resolution of procedural issues between national courts and the arbitral tribunal produces the risk of –

the usual consequences.  These decisions are not, in a sense, core procedural questions but they are predicated on answers to investigation of core procedural questions:  what happened?  Why?  When we made this order what did we mean?  When we made this interim award what were we deciding?

If I can turn to point 6 in our outline of oral submissions, it is not, we think, in contest here that any finding as to functus officio would simply be a corollary of the same findings that underpinned estoppel.  We can see this clearly enough in the judgments of the court below.  We have talked about paragraph 119 already with Justice Gordon, but in the Court of Appeal at pages 158 to 159, your Honours will see at the top of the page in paragraph 32 an extract from the judgment of the primary judge.  I suppose it starts at the bottom of the previous page, really:

Arbitrator Pullin would have accepted . . . res judicata, issue estoppel and functus officio . . . (which effectively all dovetailed) –

Then at paragraph 88 on page 187, there is a quote from the judgment of Lord Justice Diplock in Fidelitas, and that quote ends with his Lordship saying:

Where his award is an interim award stated in the form of a special case –

Can I just pause there to note that language because reading English cases, in some respects, needs to take account of the very different statutory position at various times in the United Kingdom and they have not, I think, yet adopted the Model Law, being very content with their own system.

GAGELER CJ:   I actually have – finish your submission, I want to ask you a question about this section of the Court of Appeal’s reasoning.

MR SHEAHAN:   Thank you, your Honour.  So, what emerges is the same facts.  In this case, the answer of the court to an award stated in the form of a special case created an issue estoppel and the arbitrator was functus officio.  So, the one thing led to both consequences, and if there had been no estoppel there would have been no functus officio.  We have already looked at paragraph 119 at appeal book 201.  Now, your Honour had a question.

GAGELER CJ:   I did.  You lost solely on ground 4, which was cast in terms of functus officio.  From paragraphs 85 through to 91, the court discusses that concept.  When you get to paragraph 91 – I will just change the language of the first sentence, but there is a proposition that seems to then form the basis of the decision the court ultimately made, and it is that:

Where a valid award is an interim award, the arbitrator is . . . functus officio with respect to the issues dealt with in that interim award –

At the end of the sentence there are some cases mentioned.  My question is, is that proposition correct in a Model Law context?  I have not looked at these cases, but are they Model Law cases, or are we drawing on a body of case law that really dealt with different arbitral regimes?

MR SHEAHAN:   So, your Honour will see the third case referred to is Discovery Beach.  That is a decision of the Supreme Court of Queensland under the Commercial Arbitration Act 1990, so, not the Model Law.  Next, there is a reference to an English decision, and again, dealing with a different statutory regime.  Alvaro – that is pre‑Model Law, Mr Yin tells me, and he will know.  I cannot answer in relation to ABB Service.

GAGELER CJ:   I mean, unless that proposition is correct, it is hard to see how the result in this case is correct.

MR SHEAHAN:   Quite.  And that takes us back to the point based on section 32.  You have, on the face of it, in section 32, the Act dealing with the subject of exhaustion of authority, and it deals with it in a narrow way, and subject to certain exceptions.

BEECH‑JONES J:   Mr Sheahan, can I ask you about paragraph 97, which picks this up?

MR SHEAHAN:   Yes, your Honour.

BEECH‑JONES J:   There is a proposition put there that the parties could be taken to have agreed to resolve their disputes on the basis of the principles we have just been looking at.  Now, I have two questions.  One, do you accept that?  Second, even if you do, is your point that that looks to how they agreed to resolve their dispute, but 34(2)(a)(iii) is not looking at the how, or method, or rules you apply?

MR SHEAHAN:   Our answers are, your Honour, that it is a large assumption on the part of the court in the context of the Model Law.  It may be right in the particular case, obviously, but it is an assumption which is not warranted by any particular process of reasoning or analysis that the court has developed.

As to the second proposition or question, assuming it to be correct, in effect, we would say it does not answer our fundamental point, because it does not get to who decides whether something has been finally determined.  In other words, it may be right – you could have a particular case where it was clearly right that the parties have, by express terms, confined their submissions to arbitration in a particular way, but it would not be an answer to the point that we make to your Honours.  For those reasons, in our submission, functus officio truly was just a distraction in this case.  The label was of no assistance to the court in properly addressing the matters that it had to deal with.

As to point 8 in the outline, I have noted that the respondent in their submissions relies upon the adoption of the UNCITRAL Rules, which provide that interim awards are final and binding.  We do not gainsay the operation of that provision, but it again does not answer the fundamental question of who decides what has been finally determined by an interim award.  There are two final points ‑ ‑ ‑

GAGELER CJ:   What is the relationship between that choice, which derives from Article 19, and the mandate of the tribunal under Article 32?  Does an interim award become a “final award” within the meaning of Article 32 because the parties choose, procedurally, to label it?

MR SHEAHAN:   No, it does not.  The law is clear, we think, that – and I think Dexia is authority for this – to call an award final is not to make it final.  Finality, for the purposes of Article 32, is to be assessed objectively, and the question is, has this award resolved all the issues in the dispute between the parties as to liability, remedy and costs?

GAGELER CJ:   Do we see that in Dexia specifically?

MR SHEAHAN:   I think we do, your Honour.  I will have it looked up and give your Honour a reference.

GAGELER CJ:   Thank you.

BEECH-JONES J:   In the same vein, Mr Sheahan, in 34(2), where it talks about an arbitral award being “set aside”, is that a final award?

MR SHEAHAN:   Yes.  A final award can be set aside under 34.

BEECH-JONES J:   What about an interim award?

MR SHEAHAN:   One can set aside an interim award under 34(2).

BEECH-JONES J:   Yes – that may be because of the way the subparagraphs – but to the reference to “an arbitral award” at the opening.  So that, if, say, could someone have applied under 34(2) to set aside the interim award – in this case, the first award – before the second award was made?

MR SHEAHAN:   If a basis for it ‑ ‑ ‑

BEECH-JONES J:   Was made?

MR SHEAHAN:   Subject to this:  a question of exhaustion might not be an available basis, would not be an available basis, but other grounds – for example, if there has not been fair process, or the parties had not agreed, et cetera, et cetera, the interim award could be set aside.

Two final points – I have mentioned this already, but the more recent position in Singapore since 2001 is that its statute has been amended to specifically deal with what can and cannot be done with interim awards.  If I can just give your Honours the reference.  It is in PT First Media in the joint bundle of authorities, volume 6, page 989, in particular at paragraphs 133 and 138 to 139 on pages 1035 and 1037.

Those amendments were made, in effect, legislatively, to overrule a decision of the Singapore Court of Appeal that interim awards could be changed by the tribunal without more, in effect, because there had not been a final exhaustion of the mandate.  So, the position in Singapore is plainly different and the Parliament saw the need for legislation to bring that about.

Finally, I should say something very briefly about the respondent’s arguments as it were, in terrorem.  The theme seems to be that if the appellant is correct there is a risk of untethered reconsideration of issues by tribunals.  This appears, for example, in paragraph 34(d) and (f) of their written submissions.  This is truly a chimera.  The premise is that our argument involves the tribunal being able to make decisions as to its own jurisdiction, and that is a straw man.

Our argument is not that.  Our argument is that where a jurisdictional question – if I can call it that – under 34(2)(a)(iii) depends on findings as to matters which are within the jurisdiction of the tribunal to decide, then those findings must be respected by the court when it comes to address a jurisdictional argument under section 34.  This is not to give arbitral tribunals a carte blanche to extend their own remit.

If I can turn, then, to the second ground, your Honours, it proceeds on the basis that ground 1 has been unsuccessful.  So, it proceeds on the basis that a tribunal’s conclusion that its interim award did not finally determine a claim or an issue can be reviewed on an application under section 34(2)(a)(iii).  If that is right, it raises the question posed by Lord Collins in a passage cited by Justice Gummow in C v D.  That is volume 4, at page 361, in paragraph 119 where his Honour quoted his Lordship observing that:

“The principle that a tribunal has jurisdiction to determine its own jurisdiction does not deal with, or still less answer, the question whether the tribunal’s determination of its own jurisdiction is subject to review, or –

and these are the important words:

if it is subject to review, what that level of review is or should be.”

And that is the question raised by this ground of appeal.  Now, in our submission, a standard which accords at least substantial difference to the decision of the tribunal is necessary, and that would entail at least not interfering with the finding of that evidence of genuine or reasoned attempt to answer the correct question.  And the following matters support that conclusion.

First, so defined, this ground of review does not involve what might be called a basic question of consent of the kind that is involved in all the other grounds in 34(2)(a), including (2)(a)(iii) itself so far as it would deal with every other aspect of its content.  What follows from that is that the principle which underlies the endorsement of a correctness test in cases like Dallah and in TCL, in the judgment of the Chief Justice and your Honour Justice Gageler, that that reasoning is not applicable.

That reasoning was directed to a case where there was a true question of substantial consent.  Dallah is in volume 5, and the passages are at page 531 and 534.  The issue in the case was that the respondent denied ever having been a party to the arbitration agreement.  At paragraph 24, on page 531, Lord Mance said:

Dallah’s stance on question (d) cannot be accepted.

That stance was, as appears from paragraph 21, a sort of, give deference to the ruling of the tribunal argument.  His Lordship went on:

Arbitration . . . is consensual – the manifestation of parties’ choice –

And then at about letter E:

But, absent specific authority to do this, they cannot –

that is, the tribunal cannot:

by their own decision on such matters create or extend the authority conferred upon them.

The same proposition appears on page 534 in paragraph 31, in particular, a quote from the government’s written case.  Now, that is all well and good where you have a question like, was I ever a party to the arbitration agreement?

GAGELER CJ:   The difficulty for you in this branch of your case is that Justice Jonathon Mance, delivering the decision of the Court of Appeal of Singapore in CBX in 2021, has said that it was a de novo review required by a court under Article 34(2)(a)(iii).

MR SHEAHAN:   And we accept, as a general proposition, that that is correct, because 34(2)(a)(iii), in almost all its applications, will involve a true question of consent – the definition of the dispute submitted to the tribunal.  But this case, even on the assumption that we have lost ground 1, admits of a slightly different character, a materially different character, in our respectful submission, because what the court would be invited to do is precisely re‑examine the tribunal’s thinking about the meaning of its own interlocutory and interim awards – interlocutory orders and interim awards.  And where that is the question, in this kind of unique functus officio derived from an interim award terrain, a different approach is warranted, and warranted by the policy of the statute.  Authorities that indicate that as a general rule, where you necessarily have a consent‑based analysis, it is a review de novo are correct and applicable, but should not be applied to this particular kind of question.

GORDON J:   In CBX, Lord Mance did describe it as to decide the matter de novo, and then at the foot of paragraph 12 of that judgment, he recognises a proposition that you put earlier, that is, that although it is to be a hearing de novo, he talks about:

striking an appropriate balance between ensuring the integrity of the arbitral process –

bearing:

in mind the policy of “minimal curial intervention –

Does that detract at all from the de novo review?

MR SHEAHAN:   It does.

GORDON J:   And if so, how?

MR SHEAHAN:   It does so because it says that the nature of the review is such that it has a character that is not simply starting afresh.  So, literally, de novo is not perfectly apt, and a more nuanced exposition of the proper role of the court is necessary, but the underlying point, consistently with Dallah, is correct, that is to say, the court on a review as to jurisdiction is not bound by what the tribunal decided on that question.  It will respectfully review its reasons.  It may defer to it perhaps, but it is not bound by it, and ultimately must give effect to its own conclusion.  That is my attempt at a summary of the position.

Our submission in relation to ground 2 is that while that is almost universally correct in relation to matters that might be raised under section 34, it ought not be applied, consistently with the policy of a statute, to a ground of review, if it is available, that depends upon a reinterpretation by the court of the tribunal’s procedural orders and the intent of its interim awards.

STEWARD J:   Is that any different from saying that for procedural matters, we should respect the advantages the arbitral tribunal had in dealing with its own procedures?

MR SHEAHAN:   It is not different from that, your Honour.

STEWARD J:   It may be that “substantial deference” might not be the best way of capturing that concept.

MR SHEAHAN:   It may be.  We used that expression because it seemed to capture one approach to this type of issue, which is the approach of the Supreme Court of the United States in dealing with questions of power under section 10 of the Federal Arbitration Act, as expressed in Oxford Health Plans, which is in the joint bundle at volume 6, in particular at page 952.  There, the court says, although there is a question of power, if the arbitrator has made “a good faith attempt” to address the correct question – has not gone off on a frolic – then you respect the arbitrator’s approach because the parties have bargained for the arbitrator’s decision on such a matter.

We would say that, consistently with the passage from Born that we took your Honours to earlier, in C v D, and the passage in Lord Hoffman’s speech in Fiona Trust, the parties will have bargained for the tribunal’s determination on procedural matters, and we would submit that would extend to the tribunal’s interpretation of its own procedural orders and its interim awards.  These are our submissions, your Honours.

GAGELER CJ:   Thank you, Mr Sheahan.  Mr Doyle.

MR DOYLE:   Thank you, your Honours.  I am grateful for the accommodation that I may address your Honours sitting down.  Thank you.  Your Honours, can we also start with just a couple of factual matters, before I come to the gravamen of this case.  Our learned friends took you to two.  One was to suggest that there was some very recent amendment of a relevant kind to our pleading on the eve of, or some months before, the hearing which led to the bifurcation orders being made.

In a sense, that is true, but I want to take you to precisely what that was, because it did not affect the issue of liability which had been raised by my client in its defence and counterclaim more than a year earlier.  It was concerned with – as your Honours appreciate – the nature of the claim which the – I am sorry, can your Honours hear me?

GAGELER CJ:   Not very well, Mr Doyle.

MR DOYLE:   And you obviously cannot, Justice Jagot?

JAGOT J:   It is just because I have the lectern in the way.  Just a bit louder, if that is possible.

MR DOYLE:   The nature of the case was that CKJV said it had a contractual entitlement to be paid for staff, relevantly, which had been amended by either some subsequent amendments which rendered the staff to be paid according to rates or, alternatively, if that not had been amended, there was an estoppel which prevented my client from contending that that was the case.  That was resisted – as it turns out, successfully resisted, but I will come back to that.

Chevron’s case all along was that it had overpaid the appellant, and it pleaded that overpayment on the basis that it had paid it more than it had paid its staff and was obliged to pay its staff – the actual costs contention.  In June or July 2018, when that later amendment was made, it was to introduce a different methodology for calculating the difference between actual costs and what had been paid.

It was put in fact by our learned friend’s predecessor against us that what we had done, instead of using a bottom‑up approach – looking at every invoice and seeing what had been paid – we had used a top‑down approach – see what they had been paid and take off those things they were not entitled to.  That involved some modelling and so on, which they were not in a position to meet.  That is why the trial did not go ahead on all issues of liability and quantum, and why there was a bifurcation.

What it did not change was the nature of our contention that they had been overpaid.  They had been overpaid because they had been paid more than they had to pay their staff, or had paid their staff.  Can I take you to just some short passages to identify that that had always been our case, and there is a finding that had always been our case both at first instance and on appeal.  First, in the core appeal book, in the primary judge’s reasons at page 70 – if your Honours would read paragraph 174.  Then, at page 77, paragraph 207.  In the Court of Appeal, can we ask you to go to the book at page 210 and read paragraph 21.  It is enough to read down to the words “overpayment plea” in bold.  Can I then ask you to go back to the primary judge’s reasons, to page 94.

We deal with the admission that was made.  Our friend said it was qualified, and I will take you to that qualification in a moment.  But at page 94, his Honour sets out there what was an attachment that the parties had given, a list the parties had given to the tribunal of the issues.  You will see there was an issue 1, which does not matter – that was about the variation.  Then an issue 3 and 2, dealing with estoppel – again, that does not matter for these purposes.  Then, the one that does matter is the next box:

If the answer to –

those contentions:

1, 2 and 3 are “no” –

that is, if the claimant fails:

the Claimants admits liability in respect of –

now the words “A1 6” and “A1 10” are references to particular audit claims which you need not trouble too much about, they were particular examples of overpayment that had been identified:

and the Counterclaims in the sense that it admits that it has billed and been paid more than it has paid its Staff.

So, the case which my client was putting on its counterclaim if the appellant failed in their primary contentions was admitted.  The tribunal proceeded to deal with the issues of – sorry, they made an order that all issues of liability be determined at the first hearing, and they proceeded to decide all issues of liability, including rejecting the amendment construction and the estoppel contention on the basis that the contract provided for payment of actual costs and no more and the parties knew that, and they decided those issues and delivered the first award.  Effectively, by doing it, they have determined that my client is entitled to – the quantification, of course, yet to be determined – be repaid the sums it has paid the claimant more than its actual cost.

GORDON J:   Is your submission then that the only question on quantification was how you worked out the actual costs?

MR DOYLE:   How you work it out and what they were, rather than the legal entitlement from which they are to be assessed, and really that is the point we are now coming to.  The contract criteria case is a case which says my client is not entitled to be repaid the difference between what it has paid the appellant and its actual costs because there is some other basis that they say they are entitled to a higher figure – many millions of dollars higher figure.

That is the contention, they want to say, that a tribunal who has ordered that it determine all issues of liability and has decided them may, nonetheless, revisit and reopen.   The reasons they advance for that contention, which emerge really in this Court and not terribly clearly at all before, seem to be that a tribunal cannot be functus in respect of an interim award, whatever it does, or that because the estoppel issue was also raised before that tribunal and the tribunal decided it, my client loses any right it has to contend the tribunal was functus; that is the substance of the two ways it is put.  I will come back to address those in a moment, but neither should be accepted.

Still dealing with factual matters, it was constantly characterised that the respondent’s position was about the – the question was whether there was finality in the first award.  We submitted that question to the tribunal for its determination.  The respondent submitted lots of questions, but three, relevantly, in respect of the second award.  The first, that it had no jurisdiction.  The second, if it did have jurisdiction, the claimants cannot amount this claim, because there is an estoppel that precludes them from doing it.  Thirdly, if we are wrong about all that, they are wrong about the construction question.  That all was to be decided.

It is wrong, in our submission, to isolate one of those and say that is the nature of our submission to the tribunal or our complaint, to say we have asked them to decide finality.  We are asking them to decide first their jurisdiction, and if we win that, of course, we stop.  If we lose that, the other two arise.  That is important, for reasons we will come to in a moment.

Can I go to section 16 of the Act, please.  Your Honours, I think, have been taken to it, but we want to go through it again, if we may.  It starts, in subsection (1), by dealing with the competence question – that is, the competence‑competence notion – and it does so in order to overcome, really, what would otherwise be a logical circle:  how can a tribunal decide if it has jurisdiction if it has no jurisdiction?  So, the law has said, you can decide it, but the law has also said, you may not decide it finally.  That is the effect of the section.  It requires that the party raise the objection, and that is in subsection (4).  In subsection (6):

A plea that the arbitral tribunal is exceeding . . . must be raised as soon as –

you become aware of that.  Then it provides, in subsection (8):

The arbitral tribunal may rule on a plea –

in either of those two, in one of two ways:

either as a preliminary question or in an award on the merits.

I will move on, but I will come back to that in a moment.  Subsection (11) provides that:

While a request under subsection (9) is pending, the arbitral tribunal may continue the arbitral proceedings and make an award.

So, the structure of the Act contemplates that someone in the position of the respondent makes its objection, the tribunal can either decide to deal with it then, and depending on the outcome of that, if we were to fail then we would obviously have a right of review under section 16, and that is not disputed; if we win on it, that is the end of it, the tribunal will not hear the claim.

EDELMAN J:   And section 16(6) would contemplate or, in fact, require that an interim award be challenged before the tribunal very shortly after it is made.

MR DOYLE:   Correct.  And the other aspect that we take your Honours to this section for is this:  it contemplates the tribunal may not do that.  It may not decide it in a preliminary way.  It may decide that, as courts often do, bundle it up and deal with it in one hearing at the end, which has the consequence that someone in the respondent’s position must also bring to fore any other defence it wishes to raise. 

If it wants to say, not only do you not have jurisdiction – the tribunal – but this is a claim – the claim it cannot mount – or they are on about the construction – or anything else that might be germane – you are obliged, obviously, to bring that forward in order to deal with the alternative course the tribunal has dealt with.  The tribunal, instead of deciding it in a preliminary way, has decided to deal with your jurisdictional challenge along with everything else in an award on the merits, and that it is what happened here. 

Our learned friends accept the general proposition that a tribunal cannot, by error, enlarge its own jurisdiction, and section 16(1) presupposes you have jurisdiction to decide the question but not finally because it is a decision which was the subject of the court’s review.  And yet, the effect of the approach that our learned friends contend for would be to enable the tribunal to enlarge its own jurisdiction by not deciding a point as a preliminary point, but rather by deciding it in an award or a merits, because obviously, the estoppel question will be decided the same time, and other questions will be decided at the same time.  We do not submit that there is any difficulty with them doing that, but it does not overcome the obstacle that there has been a challenge to the jurisdiction, its adjudication has been deferred until the award, and that adjudication is one which is subject to this Court’s review. 

I am sorry, in a sense to – with preliminary matters we have dealt with quite a bit, but this brings us to the gravamen of the two points that are put against us.  I will deal with them probably not in the order that our learned friends did, but with the suggestion which is made here that this issue does not arise because interim awards cannot give rise to a circumstance in which the tribunal is functus.  I am going to use that as a shorthand term, and it is probably best if I explain before I go any further why I am doing that – it is a shorthand term.

It is our underlying submission that because arbitration is consensual, the parties, obviously, have been taken to agree to the tribunal deciding the disputes in particular ways, and to do so finally.  These parties agreed that the tribunal could do so by delivery of interim awards that would be final.  But the consequence of that – either by construing the parties’ intentions or by looking at the notion of what is the tribunal’s jurisdiction to decide something finally – is that it only can decide it finally once, and having decided it once, it lacks the power to re‑open that question, because the parties did not confer authority on the tribunal to have a second go.  It would cut across the concept of arbitration if an interim award – which they agree is to be one which can be made and can be final – is not final but rather one which the tribunal is free to revisit. 

EDELMAN J:   It is not an interim award.

MR DOYLE:   Sorry, what did ‑ ‑ ‑

EDELMAN J:   It is not an interim award.

MR DOYLE:   No.  It would not be an award at all.  It would be a statement of opinion, or view, which, provisionally, is held.  Of course, that would serve no purpose.  One would have to ask, why, in the international arbitration field, have the authors of the Model Law struck upon this notion that the parties do not have something which is final and binding until the mandate is terminated – which is the case now put against us – and I want to come back to that.  But these parties did not.  These parties, by the terms of their contract, incorporated the UNCITRAL Rules, and those rules – I will have to have my junior find me exactly where it appears – but it expressly contemplates that there can be interim awards, each of which is final.  That is what these parties agreed to be the case.  In our submission, the consequence of that is that they conferred upon the tribunal the authority to decided something once ‑ ‑ ‑

BEECH-JONES J:   It is volume 8, I think, Mr Doyle.  Page 1283.

MR DOYLE:   Thank you.  Page 1283.  My other junior helped me there.  So, the consequence of that is that these parties have agreed to enable this tribunal to make an interim award which has the character of being final, and the consequence of that – otherwise it is not final – is that it cannot be re‑opened.

GLEESON J:   Mr Sheahan said that a final award had some special meaning that was identified in PT Asuransi?

MR DOYLE:   With respect, what I think Mr Sheahan relies upon is the expression “final award” in section 32, which, if convenient, I will come back to, but I will deal briefly with it now.  It is, undoubtedly, dealing with something which brings about the cessation of the mandate.  It is the only occasion the Act talks about a final award.  So, it tells us that, upon delivery of a final report, the mandate is terminated – subject to some statutory exceptions which do not particularly matter – or by some other order, it can be terminated. 

It does not use the language “jurisdiction”.  It does not tell you what the scope of that mandate is prior to termination  So, it is not actually helping understand the question.  In circumstances where the parties have conferred upon a tribunal the power to decide something finally once, yes, their mandate continues until they decide everything else, but it does not tell you what that mandate is, and it does not enlarge the mandate to enable them to decide the same thing a second, third or fourth time.  That is the first answer, and I may as well touch upon it now.  There are many other parts of the Act which point in the same direction ‑ ‑ ‑ 

EDELMAN J:   Are you going to take us to the provision of the agreement by which you say the parties agreed that interim awards would, within the intention of UNCITRAL, be treated as final and binding?

MR DOYLE:   Well, I can do, your Honour.  Yes, excuse me.  There is a bundle called the appellant’s book of further materials, your Honours.  Do your Honours have that?  At page 14 of that, there is an extract from the contract dealing with, obviously, dispute resolution.  Clause 21.2 is the clause which is the referral to arbitration.  In 21.2.2, it refers to the UNCITRAL Rules.  In the joint book of authorities, tab 36, which I took your Honours to a moment ago, are those rules at page 1283:

1.The arbitral tribunal may make separate awards on different issues at different times.

2.All awards shall be made in writing and shall be final and binding –

So that this is an award on a separate issue which the parties have conferred the authority on the tribunal to make, and to make it in a way which is final and binding. 

GORDON J:   There is no suggestion that it is not signed in the usual way?

MR DOYLE:   There is no issue about its form.

GORDON J:   Thank you.

GAGELER CJ:   Mr Doyle, is there any commentary on the relationship between Article 34 of the Rules and Article 32 of the Model Law?  Obviously, the Rules have been developed for the purposes of the Model Law.

MR DOYLE:   We are not aware of any.  There are cases which suggest, but with a degree of hesitation, that you cannot contract out of your rights to the review under section 34, which is the analogue of Article 34, but beyond that I am not sure we can help, your Honour. 

Still dealing – sorry, I did say I would finish answering the question about the significance of section 32, and I will have to come back to this after lunch.  I am sure there is a decision which I will need to deal with.  But not only does it not say anything about the power of the tribunal prior to its mandate being determined, it is the only section that uses the expression “final award”.  Other sections which talk about an award, or an award on the merits, are likely to mean something different, and there is no reason to read them down as to not apply to the circumstances where the mandate persists.  One of those, of course, is section 34, which is the one we rely upon here.

EDELMAN J:   I think it is common ground that an arbitral award, referred to in 34(2), includes an interim award. 

MR DOYLE:   It is common ground.  What seems not to be common ground is whether the first award here could be described as final, so as to give rise to any consequence.  Now, our friends are putting it in terms of, so as to give rise to the consequence, there is no functus officio.  But similarly, it must give rise to no estoppel; if it is not final, it is not final.  The consequence of their construction, as I have said, is that the tribunal can revisit it whenever it wishes.

BEECH-JONES J:   Mr Doyle, it might be final under the rules, and that could give rise to an estoppel, but not final under the Act and not go to jurisdiction.  I think that is kind of where Mr Sheahan might have been at the end.

MR DOYLE:   Well then, your Honour, we would adopt part of that.  It is final under whatever the rules provide for.  The consequence of that is the one that I have advanced. 

GORDON J:   What was that last bit you just said, then?

MR DOYLE:   The consequence of it being final is the one that I have advanced, that the tribunal has no power to decide it at another time, because the parties only conferred upon the tribunal the jurisdiction to decide the issues finally once.  That falls within the operation of section 34(2)(a)(iii) because there has been no submission to arbitration to decide this question a second time. 

The decision will contain – sorry, the second award does contain decisions on matters beyond the scope of the submission to the arbitration because the scope of the submission to the arbitration was to decide things finally once.  That is what the shorthand “functus officio” really stands for.  The parties have agreed to confer upon these people the power to decide a number of things.  To get them wrong, in a sense; to make factual and law findings which are wrong, but to decide them once.  Having decided them once, if someone wants to agitate them again, they have to either come within the statutory exceptions – and there is no suggestion that is the case here – or start somewhere else.

GORDON J:   Or agree.

MR DOYLE:   Or agree.  Now, the further consequence of our friends’ construction of section 32 as to “final” meaning the very last award, which terminates the mandate, is that common experience is the last award is one which deals with costs.  So, the suggestion being put by the appellants here is that the tribunal retains the power to revisit whatever it decides in an uninhibited way up until the moment it delivers its award on costs, usually, and that would be contrary to any sensible parties’ intentions and unlikely to have been the drafters of the Model Law’s intentions when they drafted section 32.

STEWARD J:   Did the arbitral panel proceed in that way of thinking?  Would they have thought that they were revisiting the issue, or did they take the view that this either went to quantum or the way to interpret what was finally decided was not everything?  And then the next question is, do we have to worry about any of that?

MR DOYLE:   Well, you do not have to worry about it because one of them thought that is what they were doing – seeking to revisit something already decided – two of them thought they were not.  But all of the judges which had decided this at first instance and on appeal have looked carefully at all the facts – facts being pleadings, particulars, transcripts, there are no credit questions in this – and have found that that was wrong.  That is, that the tribunal’s order and their first award in fact decided all issues of liability, and, in broad terms, found that because they concluded the majority of the tribunal had really misunderstood Chevron’s counterclaim and consequently misunderstood the admission and the other things that we would take you to if this was to be a hearing on those questions.

STEWARD J:   Assuming that that is right, your complaint is that if Mr Sheahan is right, Chevron has no remedy.

MR DOYLE:   One of us has no remedy, that is true ‑ ‑ ‑ 

STEWARD J:   But just assuming that the panel misunderstood what they were doing and that they were revisiting an issue for a second time, Mr Sheahan is right, you have no remedy for that.

MR DOYLE:   That is so.

BEECH‑JONES J:   Mr Doyle, if you had an appeal on a question of law, you would have a remedy under Mr Sheahan’s approach.

MR DOYLE:   Yes, and we have no right of appeal.

BEECH‑JONES J:   Right.  And in your earlier example you said they would have the power – I think you added the word “uninhibited” – to revisit even up to time of costs.  Courts have that power – there are restrictions, Autodesk v Dyason – what is the difference?

MR DOYLE:   Courts derive their power from a different source.  These parties have agreed upon something, and the real question is what that something is, and – I would be repeating myself, your Honour – they agreed at least they wanted something, an award could be made on an issue which was to be final.  And there are only two ways of understanding that:  they intended it to be final, or they intended to reserve to the tribunal the right to keep opening it.  Our learned friends opt for the latter, we opt for the former.

GAGELER CJ:   In Article 32, you seem to use the word, or interpret the word “final” as to mean the last.

MR DOYLE:   Yes.

GAGELER CJ:   The last in a series.

MR DOYLE:   It must, in a sense, because as it is the thing which brings about the cessation of the mandate, it is axiomatically the last, in a sense, because thereafter there will be no mandate that exists for them to do anything except for the statutory exceptions which are provided by other provisions.

GORDON J:   But you draw a distinction between that use of “final award” in 32 and the other descriptions of the award in 34 and the like.

MR DOYLE:   We do.  We draw two distinctions.  That one, and that in any event, section 32 tells you nothing about the content of the mandate, which exists up until the moment that it is terminated.  It is talking about whatever mandate there might be, and our submission is that the mandate after the publication of the first award did not extend to deciding issues of liability.  It extended only to deciding questions of quantum.  That persisted, it persists now.

I should really correct one other thing that our learned friend – I may have misunderstood.  The suggestion that somehow or another that the approach we are urging means that an awkward consequence is that there is yet to be a quantum hearing on the case.  But on either view, that is going to happen.  That is, there needs to be a quantum hearing to work out what part of my client’s counterclaim it actually gets money for – the quantification of its claim.  That is to take place on the basis of the issues as determined by the first award, we submit, or, on our learned friends’ basis, there is to be a quantum issue on the basis identified in the second award.  But either way, there is yet to be a quantum hearing, so that is really a neutral consideration.

GLEESON J:   What is the purpose of terminating the arbitral proceedings?

MR DOYLE:   I cannot help you, I am sorry, your Honour.  In the sense that it if it is conditioned – it provides for a circumstance where it terminates other than by a final award.  So, one can understand why it does that.  But in the case of a final award, in the sense that it has been put against us, the very last award, it is hard to understand what its function is.

GAGELER CJ:   The Court will adjourn until 2.15 pm.

AT 12.44 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.15 PM:

MR DOYLE:   Thank you, your Honour.  The first point we would make, which is a summary, really, is the orthodox position.  It is the one that I have outlined, that parties confer the jurisdiction upon a tribunal to decide something once.  The incapacity of the tribunal to revisit or re‑open it is variously described in cases as them “lacking jurisdiction”, “lacking authority”, “lacking capacity” – those are the languages used.  Those are the cases referred to in both courts below.

Each of those descriptions and this approach is directed to the power of the tribunal, directed to the tribunal.  Our learned friends in their reply submission at paragraph 6 seem to accept that orthodox position.  They say:

It is certainly “orthodox and well‑established” that an arbitral tribunal only has jurisdiction to decide a dispute finally and only once, and that it cannot reopen or revisit the dispute –

The second question which then arises is, can that be achieved by an interim award?  For clarity, the word “interim award” is an inelegant one, it really means a partial award.

GORDON J:   A partial final award?

MR DOYLE:   A partial final award as distinct from “interim” in the sense of “interlocutory”, but it has fallen into use to describe it as an interim one, so I will continue.  We have already addressed you as to what these parties agreed this tribunal could do.

Can we move on to a related point, that is, that what the appellants are now advancing is inconsistent with the way in which they have conducted the case up until this Court.  Can we ask you to take up our written submissions, please – that is, the complete written submissions – to paragraph 34(b).  In the second sentence:  before the tribunal itself, the appellants admitted that the tribunal was functus officio in relation to the issues decided as part of the November Hearing.

We have given your Honours, in the footnote, a reference to the respondent’s further book of material, which, perhaps, I can ask you to go to, to page 8, and to note, please – these are our friends’ pleading in the arbitration, a response to our objection.

JAGOT J:   I assume CKJV’s primary case there is the claimant contract claim.

MR DOYLE:   Yes.

JAGOT J:   The new case, yes.

MR DOYLE:   Yes.  After the first award, it reconfigured itself so that the contract criteria case became its primary case.  Similarly, if you go to page 10 of that material, you have an extract of our friends’ submissions at first instance in this matter.  We ask you to note paragraphs 88 and 89.  If your Honours would then take up the core appeal book and go to page 171, you have, in the reasons of the Court of Appeal, the statement of the grounds of appeal to that court.  No ground of appeal was that an interim award was not capable of giving rise to the orthodox and accepted concept of functus officio or, indeed, about the operation of section 32, and it is no ground of appeal to this Court.

GORDON J:   May I ask a question in relation to the book of further materials you took us to, and to paragraph 2.45.4 and 2.45.6, which I understand is there applied to your objection to the tribunal having and determining this question?

MR DOYLE:   Yes.

GORDON J:   What are we to make of the second sentence in relation to 45.4, and also in relation to the second and third sentences of 45.6?  Is that to say that it is a debate about what is liability and what is quantum?

MR DOYLE:   Can I answer that by saying I am coming to that? 

GORDON J:   Sorry.

MR DOYLE:   No, I am trying to do things sequentially, the first thing is whether ‑ ‑ ‑ 

GORDON J:   Then please do so, Mr Doyle. 

MR DOYLE:   ‑ ‑ ‑  the concept can apply to an interim award, and it has been accepted it could, for various reasons.

GORDON J:   Yes, I see.

MR DOYLE:   The next question which arises, which is the one that your Honour Justice Gordon is asking about, is, if it applies, what is the capture of the operation of the functus?  That is, how broadly does the operation of the tribunal being functus officio operate in respect of an interim award?

There are various formulations of this which are all set out in – I am not going to trouble you to go to the detail, but I will just tell you what they are – the decision of the primary judge and footnoted in the Court of Appeal, where the language used is that the tribunal is “functus” as to the issues to which the “interim award relates”, and that is from Fidelitas.  Or the issues dealt with in the interim award, which is the ABB Service v Pyrmont decision, which is one of the ones I will come to in a footnote in a moment, or the part of the reference which was the subject of the interim award, and that is Discovery Beach.  Emirates Trading Agency spoke of the subject matter of the award; and so on, that kind of language.  The detail does not matter.  We have set out in our written submissions an extract from Mustill and Boyd.  This is in paragraph 12, which relevantly says:

if the award is merely an interim award, the arbitrator still has authority to deal with the matters left over, although he is functus officio as regards matters dealt with in the award.

That is the language.  That, of course, in some cases might lead to shades of argument about whether something is or is not within the capture of the functus officio.  But at first instance in this case, and on appeal in this case, findings were made that the first interim award dealt with all issues of liability.  Whether they were right to entertain that question is, of course, something we are coming to, but on the facts, it has been determined in these proceedings, that the first interim award dealt with all issues of liability, and that was correct for the reasons I have shown you at the outset, because one of the issues of liability was the extent to which Chevron was entitled to recover overpayments beyond actual costs.

EDELMAN J:   But that issue is not before us, though, is it?

MR DOYLE:   No.  The fact which gives rise to the ultimate finding that the first interim award decided all issues of liability is the fact upon which you can proceed.  So, in answering your question, what is the capture of the interim award, the concept of estoppel in relation to the interim award, the answer is it captures all issues of liability.  The other part of the answer is, of course, that the contract criteria case was found to be, and is, an issue of liability, so that whilst in other cases the area of possible shades of debate capture the effect of functus in respect of interim awards, on the facts of this case it does not arise.

STEWARD J:   So, those two propositions are currently – I will not say agreed, but they are not challenged?

MR DOYLE:   They are not.  They were challenged factually below –

STEWARD J:   Below, yes.

MR DOYLE:   ‑ ‑ ‑ but not here.  Then, assuming we get past that third question, the question then becomes:  is the operation, the capture of functus officio, something that falls within the scope of section 34(2)(a)(iii), so as to be something which enlivens the court’s power to set aside the second award?  I have largely addressed your Honours on this.  The answer is, in our submission, plainly correct, and this is the answer which was accepted by the courts below because it is beyond the scope of submission to arbitration, or containing decisions on matters beyond the scope of this commission of arbitration, to decide an issue of liability a second time.

Now, if that question is decided in our favour, the next question arises:  does it matter, to all of that, that the preclusionary estoppel contention was raised by us in our objection, in addition to the objection to jurisdiction?  Our contention is that the contract criteria case is one which is outside the jurisdiction of the tribunal to decide.  That has always been our objection.  As I have explained to you at the outset, the structure of the Act is such that could have been dealt with as a preliminary matter, and if we had failed could have led to an – it is accepted, would have led to the court’s capacity to review its correctness under section 16.

The other option available to the tribunal was to deal with it all at the end and that, of course, leads us to section 34(2)(a)(iii) as the avenue to mount that challenge once the award is made.  Now, whether 34(2)(a)(iii) is an explanation of 16 or whether they are to be read in a cooperative sense, it does not really matter to these purposes.  They are obviously directed to matters of the same species.  That is, as my learned friend put it, matters of consent, and our contention is there was no consent to the tribunal to decide the liability issue a second time.  So, it cannot matter, in our respectful submission – it would render the right of review afforded by sections 16 and 34 nugatory – if the tribunal, instead of deciding it in a preliminary way, said they had decided it all at one time and if in, therefore, addressing other issues, we somehow gave up our rights in respect of the objection.

There is no case that says that, and there is no language in section 34 that suggests that is the consequence.  It would put a premium on persuading a tribunal to decide things as a preliminary point and it would have the effect of enabling the tribunal to expand its own jurisdiction – all of which would be contrary to any sensible international arbitration scheme.  Courts have generally and at large stated that tribunals may not expand their own jurisdiction.  But the effect of the contention put against us is that that can be done.

So, if we get past that, the next question becomes, does it matter, then, that the preclusionary estoppel was actually decided by the tribunal in its award, along with the other issues that were raised before it?  Again, in our submission, it cannot be right that it does.  Our friend puts it in the form that the issue which was being decided by the tribunal was the finality of the award.  Yet, curiously, as an aside, I observe that in these proceedings our friends wanted to say that the operation of section 32 was such that it is not final at all – but that is an aside.

We mounted two challenges, one for jurisdiction, and one to say to the claimants, you are estopped from advancing that claim.  For the purposes of the Commercial Arbitration Act, we accepted below – as we accept here – that an error which is within jurisdiction cannot be challenged under section 34(2)(a).  But one of the objections was an objection to jurisdiction.  It is the limited right of review under section 34 that causes us to focus on the issue of functus rather than the issue of estoppel.

Our contention, ultimately, is the tribunal got them both wrong.  Ultimately, the findings of the court at first instance and on appeal suggest they got them both wrong, but the court cannot interfere to correct the conclusion on the estoppel; a conclusion that, it was being said, these claimants were not estopped from advancing that claim anywhere.  But that is a different question from whether that “anywhere” can be in front of this tribunal, because that is a jurisdictional question:  can this tribunal hear a matter where it has not had further authority conferred upon it to decide something a second time?  The objection to jurisdiction and ‑ ‑ ‑

BEECH‑JONES J:   Mr Doyle, can I just ask you this:  do you accept that if this tribunal cannot look at the contract criteria claim, then a further dispute could be run to a different tribunal that raises it?

MR DOYLE:   This is slightly more complex than just to say yes or no, your Honour.  Our learned friends say that is the submission, a further tribunal could.  Our answer would be to say that that is yet to be determined, because the – and I need to take you to section 34 ‑ ‑ ‑

BEECH‑JONES J:   Just take it in the course of your argument, Mr Doyle, if it is easier to do that.  Whichever way suits you.

MR DOYLE:   It is easy to do it now, your Honour, if that is convenient.  The case put against us assumes that there is no estoppel, and that it has been determined there is no estoppel.  That is based upon the articulation of the majority in the second award.  But the whole of the second award has been set aside.  The effect of the order below is not simply to set aside something, but to set aside the whole award.  That is a power expressly conferred upon the court by section 34(2)(a)(iii).  If your Honours can go to that section ‑ ‑ ‑

GORDON J:   Is your argument, put another way, that you cannot use the finding of the tribunal in relation to estoppel, whether it is right or wrong, to infect or be taken into account in considering the jurisdiction question?

MR DOYLE:   You cannot do that, and it is wrong to suggest that the contract criteria case necessarily can be decided somewhere else, because our case will be if they were to go somewhere else, we would point to the findings of the primary judge here, and the Court of Appeal here, that the first interim award decided all issues of liability, and that will give rise to an estoppel.

The only thing that is put against us on that is the findings made by the tribunal that there was no estoppel – and that is gone.  So, there is no residual capacity.  I am going to trouble you to go to 34(2)(a)(iii) just for this purpose, because you will see at the end of it there is a proviso that says:

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 –

That is the proviso at the end of the very provision we are here concerned with.  So, putting it slightly differently, the drafters of the modern law contemplated that you may set aside the whole award even though it contains decisions within jurisdiction if they cannot be separated from the errors outside jurisdiction.  That was the power that was exercised here – after identifying that there was a jurisdictional error, the whole of the award was set aside, as was justified under this proviso, because the things which were not outside jurisdiction could not be separated from the things that were.

That necessarily is an answer to our learned friends’ contention that these two are inextricably interwoven – yes, if they are, the consequence of us demonstrating a jurisdictional error is the whole award goes.  That is what has in fact happened in this case.  That was done by the judge at first instance and there was no appeal from his decision to do that – that is, to set aside the whole rather than just part.

STEWARD J:   Sorry, when you are talking about “the whole award”, the whole second award?

MR DOYLE:   The whole second award.

STEWARD J:   Yes, thank you.

MR DOYLE:   Which comprises not only the determination on the contract criteria contention, but also the findings of there being no estoppel.

Both our written submissions and, I think, our learned friends mentioned to you BTN v BTP.  It is tab 11 of the joint bundle of authorities – and I hope I have referred to you the Court of Appeal decision.  This was a case where there was no functus question, because of a different – there was a question which arose in a different forum, so there was no issue of the kinds with which we are concerned here.  But we wanted your Honours to read – excuse me, I may have the wrong reference – paragraph 68, and I was going to ask you to read 69, but I have a note that our learned friends took you to that, and then, similarly, paragraph 71.

EDELMAN J:   How do those paragraphs help you? 

MR DOYLE:   Because they identify two things:  a distinction being drawn between something that is jurisdictional and something that goes to the capacity of a litigant to advance a claim, called “admissibility”; and estoppel is being identified as the latter.  It is sometimes referred to as the tribunal versus claim distinction – these labels are meant to be aids to understand.  It is an illustration – this, and the same language which was taken up in C v D in the Hong Kong Court of Final Appeal, where it is spoken of in terms of admissibility versus jurisdiction.

EDELMAN J:   Why would not your description of the issue being whether or not the parties have agreed for the arbitration to decide an issue for a second time fall within the description of res judicata, which is being here characterised as an admissibility issue rather than a jurisdictional issue?

MR DOYLE:   What is being characterised there is the capacity of a litigant to advance a claim anywhere – that is, the operation of estoppels operate on the parties.  Are you able, because of some anterior decision, to litigate this claim again anywhere?  That is why the distinction is drawn between something directed to the claim or the party, and a different character of thing which is directed to the tribunal, even if it can be litigated somewhere else.

BEECH-JONES J:   When we talk about the tribunal and we talk about functus, are we not talking about something that describes the effect of the Act?  Where does the Act say the authority ends?  Is that not what we mean by functus in this context?

MR DOYLE:   No.

BEECH-JONES J:   Or is there a freestanding concept that we are looking at?

MR DOYLE:   The latter.  I would put as I did at the outset, that the Act certainly contemplates that awards would be final, and the parties here agreed that would extend to interim awards as being final.  A lot of assistance is given by the Act to the achieving of that outcome, the expeditious determination by the means chosen by the parties for the final determination of their claims.

That is premised upon the power of the tribunal being derived from the consent of the parties, and then when you ask, what have the parties consented to, you have a choice: they have consented to authorising this panel to decide an issue finally once, or authorising this panel to do so by repeatedly – it has only happened once here, but if it is true once, it can be true four times – repeatedly re‑opening them.  So, it is the application of the Act to the underlying principle which informs the operation of arbitration generally – that the power of the tribunal is consensual, so, it derives from what the parties are to be taken to have intended, and it is only to do it once.

That is the same – I am sorry, I am moving off your Honour’s point back to the admissibility jurisdiction question.  It is the same discussion which takes place in C v D, and correctly so, albeit in that case the question was whether a precondition to the arbitration was jurisdictional or not.  But the language used, which is an aid to understand what the parties intended to be the power of the tribunal to re-open something, can only help us, in our respectful submission, because the whole concept of functus derives from the tribunal not having the power to do so.

GORDON J:   Can I play devil’s advocate just for one moment.  If you accept, as you do, that the parties by their agreement have – to use your language – agreed to the arbitration to decide issues only once, and here that was done by both the arbitration agreement and the relevant rules which you have taken us to, the decision to split liability and quantum was not really done by consent in the sense that there was objection taken by you and, ultimately, the tribunal itself determined that that would be the approach adopted.  Does that alter, in effect, the presumption of a starting point from which you come?

In other words, is it a matter where, absent that sort of dispute and some sort of determination by the tribunal itself, one can understand if there is a dispute about what is submitted to arbitration by agreement and by consent of the parties, then one understands we are dealing with it in a particular field, but where you have a procedural order that is made by a determination by a tribunal and then orders made as a result of it, does that make the premise different?

MR DOYLE:   No, with respect, your Honour, because the package that the parties consented to was both the tribunal deciding things finally once and not revisiting them but also giving the tribunal the procedural management for how that is achieved.

GORDON J:   I raise that because does that mean that when they then come back to look at the question of liability and what is within the liability bucket, they themselves were entitled to form the view of what was in the bucket?

MR DOYLE:   No – well, they have to – the operation of the notion of competence to decide requires – it does not require, they could say we are not going to decide it, but it contemplates that they have the capacity to decide it, but not to decide it finally.  Absent there being in the very clear language, which is not the case here, they can decide the issue but never finally, and that is given statutory effect to by the combination of section 16 and 34 here, which says – section 16 says they can decide it.  The objection is to them, and they can decide it in one of the two ways.

Now, how they go about getting there is within their gift, so they can make procedural orders.  If we were here, challenging a procedural order we would have a completely different case, but we are here challenging not a procedural order but the consequence of a final order.  That is, the final award.

GLEESON J:   So, you accept that the finding on issue estoppel was a final decision on that issue by the tribunal?

MR DOYLE:   Yes.  I accept that it is not one which we have a right under section 34(2)(a)(iii) to challenge.  I would assert, they had no jurisdiction to embark upon it because of the nature of our other challenge, which was to their jurisdiction.

BEECH-JONES J:   So, analogous to an administrative decision or an inferior court, you say they had no jurisdiction, what they did decide has no legal validity.

MR DOYLE:   I cannot say that because the scope for court intervention displacing the recognition that otherwise would be given to the award is limited.  Here, we are talking about the parameters of that limit, really.  If we get to the point that what is being said is, because the tribunal decided something which has two consequences – one is that the parties cannot litigate that question there or anywhere else, if correct; secondly, the tribunal can or cannot hear that question – the Model Law in Parliament has intervened and said, if the tribunal makes an error within jurisdiction, bad luck, because that is what you agreed you.  But it says, in our terms, if it makes an error about its jurisdiction, you have not agreed to that, and you can have that set aside.  Then, it adds the additional consideration that if, in setting it aside, there are bits that are within jurisdiction that are so connected to it that you cannot separate them, you can set the whole thing aside.  

So, the real question is:  why is that not this case?  I am adopting my learned friend’s position here, asking rhetorical questions.  It is plainly the case that we bring ourselves within 34(2)(a)(iii), if you are with me on the anterior points I have gone through, and the mere fact that this tribunal made some other finding – which, if it were acting within jurisdiction, would not be challengeable – does not deprive us of the right to challenge the thing which is challengeable. 

GAGELER CJ:   Mr Doyle, can I ask a highly technical question about the status of the UNCITRAL arbitration clause.  We were shown the provision of the contract that refers to them.  It was said by Mr Sheahan that they come in through section 19 – or Article 19 – as rules of procedure.  I wonder whether Article 34(2) of the UNCITRAL rules – which tell us about the status of an award – can really be characterised as a rule of procedure, and I wonder whether Article 28(4) of the model rules – or section 28(5), I think, of the Act – might be the relevant source.  That is, that the arbitral tribunal shall decide in accordance with the terms of the contract.

MR DOYLE:   I am not sure that I am in a position to answer your Honour, but the way we have viewed it is this way:  that the contract itself contemplates that disputes will be resolved by something – an arbitrator.  It says that the rules would apply to the procedure to be employed by the tribunal in resolving the disputes, accepting, for the moment, that the intention is to resolve them finally and once.  Construing what the parties had in mind under the contract, taking into account those rules, you can see that they plainly had in mind that the tribunal could do so by deciding separate issues in separate awards.

EDELMAN J:   In other words, the parties did not use the word “procedure” in their contract in any narrow sense.

MR DOYLE:   No, and it is part of – how else does one give effect to their agreement that the tribunal is empowered to decide separate issues by separate awards, except by contemplating that there would be just that?  Your Honour, it may well be that the avenue for that is augmented by the operation of section 28(5) – that is, that the tribunal itself is obliged to take into account the contract, and the contract here does the same thing that I have just outlined that the parties are to be taken to have intended.

It is put against us that – a number of things put against us were dealt with in our written submissions.  I was not proposing to go through all of them unless there are matters that your Honour would wish me to.  One of the things that was put against us is that our approach was unprincipled.  That is, it is said that it is unprincipled because it would be odd if a different outcome is obtained if the tribunal is considering – as this one was – its own earlier decision as distinct from a tribunal – as in BTN – considering an earlier decision of another tribunal.  But that difference is essential in principle, and that is because of what I have really just addressed your Honours on, that the authority of the tribunal is contractual, and derives from the consent of the parties to decide something once, and only once.

The question of estoppel is concerned with a different question – whether these litigants have had something decided so that they cannot agitate it anywhere.  Both of them, of course, are informed by giving effect to the concept of finality in different ways.  But the distinguishing feature of the functus officio, it is talking about finality before this tribunal, whereas estoppel is talking about the capacity of the litigants to litigate in any tribunal.  Of course, there will be differences from time to time.

Your Honours, can I deal then with two cases, one of which our learned friend took you to, PT Asuransi v Dexia Bank, which is ‑ ‑ ‑ 

GORDON J:   Tab 29.

MR DOYLE:   Thank you, your Honour.  Not to labour the case, but our learned friends took you specifically to the reasoning in paragraph 50.  This case is factually and, in principle, distinguishable from anything you have to deal with because there was no question raised as to the effect of this second tribunal’s decision in an earlier decision by that second tribunal.  There were two arbitrations, so there will never be the occasion for the concept of functus officio, as we have been urging it, to arise in this case. 

There will, of course, be scope for estoppel.  The support, if there is any, that our friends get from this case is the use of the word “jurisdiction” in paragraph 50.  And we accept, of course, taken in isolation, that seems to be against us, but it is a case in which what is being urged is that the effect of a different and earlier tribunal’s decision was to prevent these people from raising this new point now in the second arbitration.

The second tribunal, having decided that they were estopped from running it, there was nothing left for them to decide.  So, I suppose in one sense, it might be right to say, in that case, the effect of identifying that the claimant could not raise this new point in the second proceedings – and that was all it wanted to do – meant that there was no jurisdiction for the tribunal, but it cannot be elevated as a decision on the operation of functus officio.

In a subsequent decision – that is, the decision of BTN at first instance, which is at tab 10, I am told – your Honours need not go to it – that passage is adverted to and the learned judge at first instance in that case says that the use of “jurisdiction” in that passage is misplaced and, in our respectful submission, plainly so.  So, the next question is – and one that I have, I think, largely dealt with – does section 32 affect any of this?  In our learned friends’ written submissions, at paragraph 32, they say:

the concept of functus officio is given effect by s 32, and the exceptions in ss 33 and 34(4) . . . Those provisions describe the point at which a tribunal has exhausted its jurisdiction –

And then, 33:

In the present case, there has been neither a final award –

By which we must take them to mean one in the meaning of section 32:

nor an order under CAA s 32(3).  It follows that in this context the notion of functus officio strictly speaking has no application.

Now, I have partly touched on this.  That is to read far too much into section 32.  I am sorry, can I ask your Honours to take up our written submissions now?  At paragraph 34 again – this is not a point that has been urged before anywhere.  It is inconsistent with the way in which the case was conducted before the tribunal and before the courts below, as I have already taken you to.  Paragraph 34(c) I have already dealt with.  That is, section 32 is concerned with the termination of the mandate as a whole.  It tells you nothing about the content of that mandate before termination.

BEECH-JONES J:   I am sorry, could you just say that again?

MR DOYLE:   Section 32 is concerned with the termination of the mandate.  It tells you nothing about the content of that mandate prior to termination.  So, even if this section operates – the way in which this section operates is to say if something which meets the description of a final award is made, it terminates the mandate, but it does not answer the question whether the mandate which existed before authorised the tribunal to decide a particular issue – any issue, really, but as it turns out in this case, it is an issue that crosses over with functus officio.

GLEESON J:   Does “mandate” mean anything other than jurisdiction?

MR DOYLE:   Probably not – authority from the parties.  More fundamentally, I suppose, section 34(2)(a)(iii) contains the express power to do the thing we are doing here, and we note that it speaks in terms of a decision outside the scope of submission to arbitration, and however that is to be characterised in this case, it is outside the scope for the tribunal to decide something a second time.

There are two cases on this that we should take you to.  The first is Tang v Tan, which is tab 32 of the joint authorities bundle.  This is a decision of the Court of Appeal in Singapore.  It was concerned with, ultimately, whether – and I am summarising, if I may – a non‑final award, in the section 32 sense, was a final award which would give rise to the operation of the principles that I have been advancing here.  And it was held – against my submission, it was held that it was not.  That is, it was not a final award.  Their Honours considered section 32 and formed the view contrary to what I have been submitting.

Subsequent to that, the Act was amended in response to that, and it was amended to add in some new provisions that made it plain that an interim award was to be final as well, and so the law in Singapore is now sitting in common with what we would contend to be the law more generally.

GAGELER CJ:   Did Tang v Tan – actually, having been decided in 2001, it could not have been decided in relation to the UNCITRAL Model rules.

MR DOYLE:   No, but it was – I want to take you to some things about it.  Again, I am sorry to do this quickly but – in Tang v Tan, the things to note are that there is nothing in the report to suggest that the arbitration agreement contemplated, as this one does, that there can be any award which is to be final, or that the rules contemplated there could be interim awards.  It is distinguishable on that basis alone.

The terms of the arbitration agreement do not feature at all in their Honours’ reasoning other than to note that there was an arbitration agreement.  Nor did it consider the different language used in other provisions of the Act – other provisions of the Model law.  Sections 33, 34(a), 34 – the one we are concerned with – and so on, all of those are features I will come back to explain in a moment.  But, shortly after that decision, it was reversed, really, by the legislative amendment.  Can we ask you to go to joint appeal book tab 30, to the decision of PT First Media TBK v Astro and others, et cetera, to direct your attention to paragraph 137, which sets out the second reading speech for the amendment.  Can we ask your Honours to read that, please.  Then, 138:

Hence, s 19B was concerned with ensuring that interim awards were final and binding.

Would your Honours read just the end of 138.

BEECH‑JONES J:   Mr Doyle, how does this help you?  The provisions in Tang v Tan look very similar to the provisions we are dealing with here.

MR DOYLE:   It helps me to, hopefully, persuade you that the view that was taken both by the Singaporean Parliament and the people involved in the community were surprised by the result in Tang v Tan, and thought that it was anomalous, and it was immediately reversed so as to bring it into line with what everyone had anticipated the position to be, and which is also the case here, specifically because of the terms of the UNCITRAL rules.

GORDON J:   It is all you need, do you not?  Your argument is once a trial is here part of our arbitration agreement, we have to turn our mind to that procedure, and we have an agreement about it.  Is that not right?

MR DOYLE:   I am indebted to your Honour, that is right.

GORDON J:   So, this is provided as context to support for the view.

MR DOYLE:   It is provided, really, to anticipate what might be said, after I finish, by my learned friend in reply.  I will finish, if I may, and I will do it briefly.

EDELMAN J:   Just before you do, is there – the passage at 137 that you took us to, that talks about how practitioners have long assumed that the position is the same as well, which I take it to be your position.  Does that have any purchase under section 28(5) when one is interpreting the terms of the contract in accordance with the usages of the trade.  It does say “applicable to the transaction”, but it must include the wider context.

MR DOYLE:   I would be reluctant to say no, your Honour, because it sounds like saying yes would assist me; I had not thought of that before now.  The point we take from this, not to diminish that point, is just that it seems it was thought to be anomalous and wrong.  It was immediately reversed.  There is a decision of a Supreme Court judge in Queensland, called Mango Boulevard Pty Ltd v Mio Art Pty Ltd, which is – I am sure this will be terribly persuasive, your Honours, but it is tab 24 of your bundle, which explains why it is – it explains two things, but I would ask you to go, first, to paragraph [29].

When you have read that, the reason that I have taken your Honours to that is that your Honour the Chief Justice asked my learned friend whether any of the cases in a particular paragraph of the Court of Appeal judgment were Model Law cases.  None of them are, but this is, and it affirms the proposition that is advanced in those cases.

Then, if you turn to paragraph [45], his Honour expresses the view, with which we, of course, would agree, that Tang was wrong and, really – I will summarise it – for these reasons:  that the language “final award” only appears in 32.  That language is not reflected in the other provisions which his Honour referred to – sections 33, 34A or Part 8, which is the recognition and enforcement provisions – or, indeed, in other provisions of the Act, and the language used in those is apposite to apply to interim final awards, to partial awards.  So, the absence of consideration of those in coming to the view that was expressed in Tang, about the effect of 32 defining the scope of functus officio, was made without proper consideration of the whole of the Act, and that is the submission we would make.

Your Honours, there is ample authority that a tribunal cannot be the decider of its own jurisdiction.  Sorry, still on this section 32 point before I leave it.  Your Honour the Chief Justice, again, asked us a question of whether there was any consideration of the relationship between – I hope we have this correctly – section 32 of the Act and 34 of the rules, the UNCITRAL rules.  We have been able to identify just a little, and we have copies of what I will then take you to, to demonstrate what there is.  Is it possible to hand that up?  My friend has only been given this over lunch.  If your Honours would go to page 16 – we have only given you extracts – about halfway down the page, you will see a heading:

Form and effect of the award –

BEECH-JONES J:   Sorry, which page is that?

MR DOYLE:   Page 16.  Under that, Article 32.  This is a reference to the rules, and 32 is the old analogue of the current 34.  If your Honours then go to page 17, could we ask you to read paragraph 81.  I accept it is not much of a discussion, but the discussion there – and your Honours will recall that Article 32, Article 34 of the rules, refers to interim awards, amongst others, being final and binding.  There was discussion about taking the word “final” out to avoid confusion.

Ultimately, that was not done, and the discussion shows that at least those who were involved in the discussion had in mind that to call it final has one of three meanings, and they intended it to be final at each stage.  They observed that the narrower meaning, perhaps, is the meaning accorded to it in Article 32(1), as meaning “the last”, but as not affecting final in the sense we have been describing it has.  It is to be noted that the rules speak of the thing being final and binding, a composite expression which, fairly, describes the effect of a partial award on a separate issue.

With all that we end up, in our submission, back at the orthodox position.  There is a determination by a tribunal of the first award, which determined all issues of liability.  Subsequently, a litigant wants to raise a new issue of liability, and it is outside the power of the tribunal to entertain that.  It is within the scope of both section 16 and 34 for us to challenge it, and on that challenge the court exercises its review power to review whether the tribunal was right or wrong in assuming the jurisdiction.

It only arises in circumstances where the tribunal assumes jurisdiction.  So, there is already a view of the tribunal which is contrary to that, which a party wants to litigate and which the court has called upon to adjudicate on, and that is this case.  None of the factors that were pointed to against us stand in the way of that being the right outcome in this case.

JAGOT J:   Could I just ask, the “all issues of liability”, is the source of that – the sole source of that – the procedural order that preceded the first hearing or is there something in the first award where the tribunal has said, in terms, we are deciding all issues of liability.

MR DOYLE:   Both is the answer.

JAGOT J:   I know it is in the procedural order, is there some reference to that being in the first award?  You see, what I am thinking is, you could make a procedural order, we are going to decide all issues of liability – I mean, judges and parties know this because we separate out matters – and then when you get to it you cannot decide all issues of liability in the actual hearing, and so you decide what you can.  I am just wondering how a procedural order overcomes the actual terms of the award, but, as you say, there might be something in the award that says, no, this is deciding all issues of liability as per the procedural order.

MR DOYLE:   I am going to answer it a long way around, if I may.  One of the things that the other side could and should have done is seek a variation of the order to say, not all procedural issues, but these nominated pleaded paragraphs.

JAGOT J:   Seek a variation of the procedural order?

MR DOYLE:   Correct, the procedural order, before the hearing, so as to ‑ ‑ ‑

JAGOT J:   The procedural order is not an award, it is just a ‑ ‑ ‑

MR DOYLE:   That is, they could have gone back before the first hearing at least, and said, we have looked at it more closely, we think you should not have made an order to determine all issues of liability, just decide these paragraphs of the pleadings, whatever they are, so as to confine the scope of what was to be the subject of the parties ‑ ‑ ‑

JAGOT J:   But that is surely not the only way you could confine – you could confine, surely, during the hearing.

MR DOYLE:   I said I would answer it the long way around, if I may.  The tribunal – and this is not in the material because none of this is really raised in any of the grounds of appeal, in this Court at least.  The tribunal said the parties have exchanged lots of pleadings and so on, they are all very complex.  They have been synthesised into a number of specific issues, and those issues included the question of whether there was a variation by some conduct subsequent to the contract, or whether there was an estoppel.  In answering those two questions, the tribunal started off by identifying some facts, and they said, one of the fundamental facts is the background to be used to construe whether there has been a variation, whether there is an estoppel, is that the parties fully understood the contractual entitlement, unless there was a variation, was that CKJV was entitled to its actual costs. 

So, one of the fundamental points, which was the foundation for the decision of what they did decide, was that proposition.  When they came to consider the terms of the variations and the terms of the estoppel, they had regard to the language that had been used, because if there was an entitlement to be paid only actual costs, there is an obligation to reconcile the invoice of the costs that had been incurred.  And if it was to be paid according to rates, there is no obligation to have a reconciliation; you just got paid the rates.  The variation spoke of reconciliations, that there would be a reconciliation, a right to audit, and so on, and the tribunal said, you can see that they still had in mind, not a variation but just the same kind of arrangement that already existed:  entitlement to be paid actual costs. 

In terms of the estoppel case, it was found that no one on my side believed the facts were as they were suggesting they were, that we were not on the view that this was the right way to construe it, and they knew, we thought, that we knew that.  So, the facts were identified as part of the reasoning which gave rise to the finding of the issues they decided. 

GORDON J:   I had thought that your answer in response to questions from others was that there was a finding that the contract criteria case was a case on quantum, not on liability by the Court of Appeal at paragraph 121, and that has not been appealed.

MR DOYLE:   Well, my final answer is to say that one.  This controversy – which I am now struggling to answer adequately, and I accept I probably put it very badly and perhaps quite inaccurately – is not before you.  The findings of the primary judge in the Court of Appeal were the two findings:  that the first award, in fact, decided all issues of liability, and that the contract criteria case is not a question of quantum, it is a question of liability.  Now, if we are here to agitate that, I would be in a better position to answer your Honour about why it is that the first award on its face disposes of the case put against us. 

JAGOT J:   I am just wondering – or maybe the question should just be – you accept, had they applied to vary the procedural order to confine it as opposed to doing what they did in that pleading which said in the sense that – the place which I cannot now recall where that is – but they said, we accepted, in the sense that – we would not be here.

MR DOYLE:   Well, if they had applied and succeeded, that is if the – I am sorry to ‑ ‑ ‑

JAGOT J:   If the arbitral tribunal had varied it to say, we are deciding this, but not to the extent that they have confined their admission that you rely on by querying what “actual costs” actually means – we are not deciding that – then you could not be here.  I am just trying to work out if that is all it took – a variation of the procedural order.

MR DOYLE:   Before the first hearing, yes is the answer.  And that is, in fact, what both their Lordships in Fidelitas and the primary judge in Discovery Beach said, that if you go to a hearing and you have the tribunal make a decision, and what you really want to say is, well, there is another point we want to raise, the time to do it is beforehand, to qualify the capture of the interim award, so it no longer captures all issues of liability but only discrete issues.

Now, they did not do that, and your Honour will perhaps appreciate it was their application to bifurcate.  They were the ones who came along and asked for ‑ ‑ ‑

JAGOT J:   Sure.

MR DOYLE:   ‑ ‑ ‑ all issues of liability to be determined.  But, if they had changed their mind, if they had thought of this contract criteria case as their primary case and wanted to plead it beforehand, they should have gone back and got a variation to the procedural order.  But rather, they waited to see how they go.  When they did not go so well, they thought, we will run a new liability question.

The final question on this first ground actually overlaps with the second ground, but the final question is:  who gets to decide this question?  I have addressed that.  The answer is obvious.  Section 16 contemplates that the tribunal can make a decision about it, but that that is subject to the court’s review.  That is the articulation of the competence‑competence proposition.  Section 34(2)(a)(iii) makes it plain as well.  They can make the decision, but they cannot be the final arbiter of their own jurisdiction. 

Your Honours, I can deal – and I will deal – briefly with the second ground by reference to our written submissions.  If your Honours would go to paragraph 45, we would commence to deal with this.  The first thing that our friends urge is that there should be absolute deference paid to the views of the tribunal.  The language of section 34(2)(a) cannot be made to sit with that.  Indeed, absolute deference means that you cannot question it.  Yet, that would amount to the complete abrogation of the statutory right conferred by section 34(2)(a)(iii).  Even substantial deference cannot be made to fit with the language of the section, which calls for furnishing a proof of something, and that proof means to the court, and it is that which enlivens the court’s discretion.  There is no requirement to overcome some elevated threshold.

Adopting – perhaps a little out of context – what Lord Mance said in Dallah, one of the cases that has been referred to in our written submissions, the advantage from having the award is the advantage of service, not starting 15 or 30‑0 up.  The advantage is that we bear the onus of providing the proof, but that is all that is required.  It is clear that section 16 – which is the option of the tribunal deciding this preliminary question – calls for a court’s review and the law uniformly as being that is a de novo hearing to the correctness standard.  There is really no reason to think a different standard would apply to section 34.  Virtually identical language appears in section 36, which is the section dealing with the denial of enforcement of an award.  This Court in TCL decided that the test was one of correctness.

The test urged by the appellants would be impossible to apply.  The courts here have gone through the facts very carefully, and they were controversial at first instance – I am sorry, the facts themselves are not terribly controversial, it is just looking at pleadings and so on, but the conclusion to be drawn from them were controversial.  The court here concluded – and this is in the Court of Appeal’s reasons at 121 – that the majority had:

overlooked or mischaracterised the effect of many of the pleadings, particulars and submissions and the procedural orders leading up to the First Hearing.

In the circumstances where that is the case, how does one provide substantial deference to someone who has:

overlooked or mischaracterised the effect of many of the pleadings, particulars and submissions and the procedural orders –

when they were the very things upon which the question would turn.  The standard of correctness has been widely applied throughout the world and we have identified a list of these in paragraph 48 of our written submissions.  I will not take the time to take you through them now.  They include this Court in TCL – now, that was of course concerned with a section 36 question, ultimately, but the language is identical.  So, there is no reason to suppose a different meaning to be given to the expression used in those two analogue provisions.  Similarly, Dallah was an equivalent of an enforcement proceeding, but all of the others we mentioned are section 34(2)(a) cases and they all apply the standard point of correctness.

Our friends say they draw some support from Oxford Health Plans v Sutter in the United States Supreme Court.  That is at tab 28 of the joint bundle.  Would your Honours go to that, please?  Mr Sutter was a medical practitioner who had contracted with Oxford Health to supply services to members of Oxford’s network and be paid some specified fees.  He sued for himself and a class of other medical practitioners, and the court ordered that the dispute be referred to arbitration.  An issue arose as to whether the contract authorised a class action.  Importantly, it was agreed that the arbitrator should decide whether their contract authorised class arbitration.

The arbitrator decided it, and there was a challenge based upon the contention that he had exceeded his power, which was the American test.  As our learned friend said, it was said that he had not because, as long as he made a good faith attempt to properly construe the contract, that was within his power.  But there was no jurisdictional challenge in that case.  Can we ask your Honours to go to page 949.  At about point 3 of the page, the court says:

So the sole question for us is whether the arbitrator (even arguably) interpreted the parties’ contract, not whether he got its meaning right or wrong.

But if your Honours would note the footnote, which is hard to read:

We would face a different issue if Oxford had urged below that the availability of class arbitration is a so‑called “question of arbitrability.”  Those questions – which “include –

various things:

or whether a concededly binding arbitration clause applies to a certain type of controversy” – are presumptively for courts to decide . . . A court may therefore review an arbitrator’s determination of such a matter de novo absent “clear[] and unmistakabl[e]” evidence that the parties wanted an arbitrator to resolve the dispute. 

Leave some words out:

But this case gives us no opportunity to do so because Oxford agreed that the arbitrator should determine whether its contract with Sutter authorized –

the determination.  This case just does not raise the issue with which we are concerned.  It was accepted that the arbitrator was acting within jurisdiction because the parties had asked him to decide the very question, whether the arbitration contract allowed for class action.  So, the only question is whether he got it so wrong that it cannot be said that he made an attempt to construe the contract. 

Finally, we think on this point, is that both the courts below undertook a very careful consideration of the facts, and they came to the view that I have just read out to you – and whatever deference has been necessary has been paid to their views.  Those are our submissions.

BEECH-JONES J:   Mr Doyle, could I ask you just one question.  Does it follow from your submission that every time an arbitral tribunal decides a question about an estoppel, based on what has been decided by it – or someone else previously – that raises a question that goes to its jurisdiction?

MR DOYLE:   No, quite the reverse.  If it is decided by someone else – so, there is a court hearing or an arbitration in which some decisions are made, then someone else is to decide the question, can a claim be advanced, no question of that tribunal being functus can arise.  The question is simply:  does the dispute which has been referred to the second tribunal capture deciding the effect of an estoppel in the earlier one?  And it would, by and large.

If it is a decision by itself – in a sense, it might depend upon the nature of the estoppel.  One can imagine circumstances in which there is a very narrow issue to be decided.  So, the tribunal decides, and it is functus, that issue, but also decides that there is an Anshun estoppel that should prevent someone else from dealing with it.  So, there might be overlap between the two or there might not be.  But it is not our case that every – I may have lost the tenor of your Honour’s question.  It is probably the case that the facts so overlap that a tribunal that correctly found it had no jurisdiction because it has decided something in the first award, would also find that the parties were functus – that the parties were estopped from contending that anywhere.

Ultimately, we contend that the tribunal got both wrong, but the Parliament only gives us the window in – the Model Law only gives us the window in to challenge the jurisdictional finding.  The consequence of that

is the tribunal had no jurisdiction, and the consequence of that, in this case, is that the whole of the whole of the second award is set aside – as I have explained – within the power conferred by the proviso to section 34(2)(a)(iii).

GAGELER CJ:   Thank you, Mr Doyle.  Mr Sheahan.

MR SHEAHAN:   Your Honours, on what was our main point – that is, the question of who decides whether an issue has been finally determined – our learned friends’ submissions did not say much, but their focus was on the impact of our submission on the operation of section 16.  If I can ask your Honours to take that up, at page 34.  There seems to be perhaps two aspects to the argument.  One of them was a factual proposition which we may have misheard, but we thought our learned friend said that the actual order in which the issues were raised by the respondent at the second interim award hearing stage was jurisdiction first, estoppel second.  That is not how we understand the position from the record.  If your Honours look at page 156 ‑ ‑ ‑

GORDON J:   This is the core appeal book?

MR SHEAHAN:   This is in the core appeal book.  There is an extract at paragraph 28 from Chevron’s written objection.  Your Honours will see point (i) is estoppel, point (ii) is functus officio.  It appears similarly in the primary judgment, we think at page 18, paragraph 34, which deals first with Chevron’s argument about estoppel and then, furthermore, in the last sentence, res judicata.  Now, we do not – we actually submit that nothing turns on the ‑ ‑ ‑ 

GORDON J:   I was going to say, does it turn?  I thought the proposition put against you was that if you had a jurisdiction question – which was a question within jurisdiction – and that was taken as the preliminary point ‑ ‑ ‑

MR SHEAHAN:   That was the main argument.

GORDON J:   Otherwise, if your argument was taken to its logical conclusion, what was put against you was that you would lose that ability to challenge that preliminary point.

MR SHEAHAN:   Yes.  It was said that on our construction, one option available under section 16 would become nugatory, in effect.  The option is in subsection (8).  Your Honours will see that it is the tribunal’s option, not the parties’.  If a party raises, as a preliminary objection, a question of jurisdiction, then the tribunal may deal with it as a primary question, or deal with it in an award on the merits.  In this case, the latter happened.  It is not an option for the party, it is a discretion given by the statute to the tribunal.

EDELMAN J:   In your submission, to expand its own jurisdiction.

MR SHEAHAN:   To deal with the matter as it thinks best, having regard to the object of these processes.  It might be efficient, in other words, to do it as a preliminary question, or dealing with it as a preliminary question might be inefficient, unproductive, add delay, and waste expense.  The tribunal would, no doubt, properly approach it with those considerations in mind.

GORDON J:   Do you read it with subsection (6)?

MR SHEAHAN:   One does, of course – that subsection (6) imposes a burden on the party consistently with other provisions of the Act, and the ordinary expectation that if you are going to take a jurisdictional question you must do it properly, and if you do not, it will be taken to be waived.

GORDON J:   And then (9) says if they do do that, you have a very limited time a party request for the court to review it.

MR SHEAHAN:   Yes.  If the tribunal decides the question of jurisdiction first in a preliminary way, it simply does not follow, in our respectful submission, that the court, on review, can undo findings made by the tribunal as to what claims or issues had been previously determined.

GAGELER CJ:   Are you talking about the nature of the decision to be made by the court under section 16(9)?

MR SHEAHAN:   I am talking about a review under section 16(9).

GAGELER CJ:   Is it not de novo review?  Your proposition is that it is not de novo review, is it?

MR SHEAHAN:   No, we accept that it is de novo review, but our point is that, even in this context, the submission to arbitration includes, within its compass, making decisions as to what had been, or had not been, finally determined in an earlier award by the same tribunal, and that follows from several things.

First, as in this case, the estoppel issues will have been raised already, as they were in the document that we just saw, which raised estoppel jurisdiction.  They are on the record.  They are part of what has been submitted to the tribunal for determination.  They are in‑scope questions, not out‑of‑scope questions.  Once those questions of have we decided this finally before are decided, they are decided within scope.  That is this case, where there is an estoppel plea on the record.

Even if there is no estoppel plea on the record, and someone just has a jurisdiction plea, and the tribunal sends it up and makes a decision about it in a preliminary way, and it goes up to the court, in our submission, those underlying questions – did our orders, properly construed, have the consequence that this issue is finally determined by us – they are all within the scope of what has been submitted to the tribunal for its submissions, really for the reasons given in C v D, in the passages we took your Honours to this morning, that this whole procedure is aimed at producing a one‑stop shop, in particular on things and issues related to procedure, and scope is not limited to substantive questions, as Justice Gummow pointed out in his reasons at paragraph 133.

Scope questions are not defined to entitlements to money or defences, they extend to procedural issues.  So, in that case, the court entertained a question whether scope encompassed a preliminary process, a pre‑arbitration process.  Here, absent any raising of an estoppel defence, those matters – all the integers that would have to be decided to create the foundation for a functus officio argument – they are all within scope.  That conclusion is confirmed, in our respectful submission, by the distinction between admissibility and jurisdiction, between claim and tribunal, the language used in BTN at paragraph 71, which our learned friends took your Honours to – again, plain and on point:

as a matter of logic, where a party alleges that a dispute has already been resolved and should not be reheard, the party is not attempting to get the dispute resolved in a different forum –

That is, it is an admissibility of the claim argument, and when our learned friends went to one of our arguments about inconvenience, they made it plain, ultimately, that their position is – and they are probably right – that since the Court of Appeal has set aside the whole of the second interim award, the only issue estoppels that are going to be in place are issue estoppels deriving from its judgment and the judgment of the primary judge.

It is clear that the position adopted by the respondent is to bring an end to this claim anywhere.  You can say, as they do, well, yes, but it is just directed at the tribunal.  That is true in a formal sense – in a formal sense only.

BEECH‑JONES J:   So, Mr Sheahan, is this an argument directed to why all these questions are in jurisdiction, or the further point you seek to make, which I think is, if the arbitrator decides something within jurisdiction, its findings on that are binding to the extent anyone complains about jurisdiction?

MR SHEAHAN:   Both.  Yes, both.  Absolutely, both.  And the final point on this is that in Dexia, it seems that the issue estoppel argument – this is consistent with what we have been saying – was raised by the tribunal itself.  We see this at volume 6, at pages 966 to 967 of the joint bundle of authorities, in paragraph 16, where the court says at the bottom of the page 966:

before filing its statement of defence, the respondent raised certain jurisdictional issues –

Your Honours will see they are quoted at the top of page 967, and they do not include an estoppel argument.  What was put front and centre there was jurisdiction.  Nevertheless, it was dealt with in the way we have been through, on the footing that the underlying findings could not be undone by the court even though the court held that they were all erroneous.  That approach is consistent with the position for which we would contend, that these matters are to be dealt with substantively, not formalistically.

As to section 32, can we just say this.  The procedural rules in the UNCITRAL rules cannot enlarge the power of the court under section 34.  We are not aware of any authority to support the proposition that an interim award affects the scope of the dispute contemplated by the submission to arbitration.  That expression “submission to arbitration” is undefined, and I will just mention that we have addressed three possible senses of it in our submissions in‑chief at paragraphs 53 to 61.

As to factual matters, from the second interim award and so on, they do not matter, but for balance can I just mention a couple of the aspects of the reasons of the majority of the tribunal from the primary judgment at page 70, paragraph 175:

the pleadings up to Procedural Order 14 were not clear as to what either party was saying the term ‘actual cost’ actually meant.

That issue unravelled much later.  Paragraph 177:

It is not, in the majority’s view, a correct attribution to say that there were admissions on the pleadings by the Claimant as to how ‘actual cost’ was, contractually, to be ascertained.

Page 72, paragraph 181.

BEECH-JONES J:   I thought you were not asking us to look at this.

MR SHEAHAN:   No, but a lot was said, so I am just wanting to draw your Honours’ attention to the other side of the story.  We submit that your Honours do not go here.  It is wrong to go here – unnecessary to go here. 

GORDON J:   So, you do not have a notice of appeal or a ground of appeal against the finding that the contract criteria case was a quantum? 

MR SHEAHAN:   No, no, because it is not ‑ ‑ ‑

GORDON J:   Because you say that is not relevant to your argument. 

MR SHEAHAN:   Not relevant to our argument. 

GORDON J:   But is that not what you are now seeking to do?

BEECH-JONES J:   You are just having a nibble at the merits.

GORDON J:   Just having a nibble, yes.

MR SHEAHAN:   Just having a nibble, your Honour – there would seem to be a feast on the other side and I ‑ ‑ ‑

GORDON J:   You just want to be part of the banquet.

MR SHEAHAN:   I did, yes.  There is more of that – your Honours should not be detained by it.  Can I address a question that your Honour Justice Gordon asked our learned friends?  As your Honour pointed out, the bifurcation was by order.  As our learned friends correctly responded, that was an order under a power conferred by consent, but the result was a product of the order.  The intermediate source of the order – of the power to make that order – was the rules.  The ultimate source of the power to make the order was the submission to arbitration, which depends on consent.  Within that context, it is appropriate to conclude that the tribunal can, within its jurisdiction – within what is then submitted to it – say what the result was.

Your Honours Justices Gageler and Edelman raised section 28 – what I am about to say may be of no assistance to anyone, but section 28 is headed:

Rules applicable to substance of dispute –

When one gets to a provision like, for example, subsection (4), it is probably directed at provisions of arbitration agreements that often call for

the matter to be decided aequo et bono and not merely according to the strict legality and matters of that kind.  So, it is probably not pertinent to procedural questions, although, insofar as we drift into matters of substance, it may have some relevance.  Finally, your Honour Justice Beech‑Jones’ question to our learned friends.  It seems to us, with respect, that the corollary of their argument is that any sane tribunal estoppel finding goes to jurisdiction, if they are right.

Those are our submissions, your Honours.

GAGELER CJ:   Thank you, Mr Sheahan.  The Court will reserve its decision in this matter and will adjourn until 10.00 am tomorrow.

AT 3.54 PM THE MATTER WAS ADJOURNED