CBI Constructors Pty Ltd v Chevron Australia Pty Ltd

The appeal concerned an application to set aside an interim arbitral award. The dispute arose from a contract between CBI Constructors Pty Ltd and Kent Projects Pty Ltd (collectively, CKJV) and Chevron Australia Pty Ltd (Chevron) concerning an offshore oil and gas project. CKJV claimed Chevron had underpaid it for staff costs, while Chevron counterclaimed that it had been overcharged and overpaid. The parties had agreed to resolve disputes through binding arbitration under the UNCITRAL Rules, with awards to be final and binding.

The arbitral tribunal issued a first interim award determining issues of liability, finding that CKJV was entitled to recover actual staff costs incurred, not contractual rates, and that Chevron's counterclaim regarding overpayment was also subject to certain adjustments. CKJV subsequently repleaded its case on quantum, which Chevron objected to on grounds of *res judicata*, issue estoppel, *Anshun* estoppel, and that the tribunal was *functus officio*. The tribunal rejected Chevron's objections and issued a second interim award. Chevron then applied to the Supreme Court of Western Australia to set aside this second award under section 34(2)(a)(iii) of the *Commercial Arbitration Act 2012* (WA), arguing the tribunal lacked authority. The primary judge set aside the award, finding the tribunal was *functus officio*, and the Court of Appeal dismissed Chevron's subsequent appeal.

The High Court of Australia considered whether the Court of Appeal erred in holding that the Supreme Court had the power to set aside the second interim award under section 34(2)(a)(iii) of the *Commercial Arbitration Act 2012* (WA) and whether the standard of review applied by the Supreme Court was a *de novo* review. The Court determined that section 34(2)(a)(iii) permits a court to set aside an award if it deals with a dispute not contemplated by or falling within the submission to arbitration, or contains decisions beyond the scope of that submission. The Court affirmed that the question of whether an arbitral tribunal has exceeded its jurisdiction, including by becoming *functus officio* in relation to issues already determined, is a matter that a court can review *de novo* under section 34(2)(a)(iii). The Court found that the first interim award had finally determined the issues of liability, and the subsequent repleaded case on quantum by CKJV related to those same issues, thus falling beyond the scope of the tribunal's authority after the first award.

The High Court dismissed the appeal, upholding the decision of the Court of Appeal. The Court concluded that the Supreme Court had the power to review the tribunal's decision *de novo* and correctly found that the tribunal had acted *functus officio* in issuing the second interim award, thereby exceeding the scope of the submission to arbitration. Consequently, the second interim award was properly set aside.