Chevron Australia Pty Ltd v CBI Constructors Pty Ltd - [2021] WASC 323

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
CITATION:   CHEVRON AUSTRALIA PTY LTD -v- CBI CONSTRUCTORS PTY LTD [2021] WASC 323
CORAM:   KENNETH MARTIN J
HEARD:   15 & 16 JUNE 2021
DELIVERED          :   28 SEPTEMBER 2021
FILE NO/S:   ARB 8 of 2020
BETWEEN:   CHEVRON AUSTRALIA PTY LTD
Plaintiff
AND
CBI CONSTRUCTORS PTY LTD
First Defendant
KENTZ PTY LTD
Second Defendant

FILE NO/S: ARB 9 of 2020
BETWEEN: CHEVRON AUSTRALIA PTY LTD
Plaintiff
AND
CBI CONSTRUCTORS PTY LTD
First Defendant
KENTZ PTY LTD
Second Defendant

Catchwords:

Arbitration - Private arbitration - Three arbitrators - Contract dispute - Interim award addressing all issues of liability upon claim and counterclaim - Contract dispute - Attempt to raise new liability entitlement issue subsequent to first interim award - Jurisdictional objections on basis of res judicata, issue estoppel, Anshun estoppel and functus officio - Arbitrators divided on jurisdictional objection - Majority allowed new argument - Dissent by one arbitrator as to functus officio - Second interim award issued - Application by respondent to set aside second interim award

Legislation:

Commercial Arbitration Act 2012 (WA)
International Arbitration Act 1974 (Cth)

Result:

ARB 8 of 2020 is dismissed
Application to set aside second interim award upheld in ARB 9 of 2020

Category: A

Representation:

ARB 8 of 2020

Counsel:

Plaintiff	:	Mr S Doyle QC & Mr S J Davis
First Defendant	:	Mr J Gleeson QC & Mr T N Owen
Second Defendant	:	Mr J Gleeson QC & Mr T N Owen

Solicitors:

Plaintiff	:	Norton Rose Fulbright Australia
First Defendant	:	Clayton Utz
Second Defendant	:	Clayton Utz

ARB 9 of 2020

Counsel:

Plaintiff	:	Mr S Doyle QC & Mr S J Davis
First Defendant	:	Mr J Gleeson QC & Mr T N Owen
Second Defendant	:	Mr J Gleeson QC & Mr T N Owen

Solicitors:

Plaintiff	:	Norton Rose Fulbright Australia
First Defendant	:	Clayton Utz
Second Defendant	:	Clayton Utz

Case(s) referred to in decision(s):

Alvaro v Temple [2009] WASC 205
AQZ v ARA [2015] SGHC 49
BTN v BTP [2020] SGCA 105
CRW Joint Operation v Pt Perusahaan Gas [2011] SGCA 33
CRW Joint Operation v PT Perusahaan Gas Negara (Persero) TBK [2011] SGCA 33
CRW Joint Operation v PT Perusahaan Gas Negara [2011] SGCA 33
Dallah Real Estate v Ministry of Religious Affairs, Government of Pakistan [2011] 1 AC 763
Discovery Beach Project Pty Ltd v Northbuild Construction Pty Ltd [2011] QSC 306
Emirates Trading Agency Llc v Sociedade De Formento Industrial Private Ltd [2016] 1 All ER 517
Hebei Jikai Industrial Group Co Ltd v Martin & Ors [2015] FCA 228; (2015) 324 ALR 268
Hui v Esposito Holdings Pty Ltd [2017] FCA 648; (2017) 345 ALR 287
IMC Aviation Solutions Pty Ltd v Altain Khuder LLC (2011) 38 VR 303
Ivankovic v Western Australian Planning Commission [2020] WASC 40
Lin Tiger Plastering Pty Ltd v Platinum Construction (Vic) Pty Ltd [2018] VSC 221; (2018) 56 VR 576
LW Infrastructure Pte Ltd v Lin…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] WASC 323
Decision Date

CaseChat Overview and Summary

The matter of Chevron Australia Pty Ltd v CBI Constructors Pty Ltd involves a dispute between the parties concerning an arbitral tribunal's authority and the potential for a section 34(2)(a)(iii) engagement under functus officio. The case was heard in the Federal Court of Australia, where the court was tasked with determining whether the arbitral tribunal had exceeded its authority by issuing an award after becoming functus officio.

The central legal issue before the court was whether the arbitral tribunal had exceeded its authority by making an award after it had become functus officio. This issue was explored in light of the relevant provisions of the Model Law on International Commercial Arbitration and the case law surrounding the functus officio principle. The court had to determine whether the arbitral tribunal's actions after issuing a final award constituted an excess of authority, and if so, whether the subsequent award should be set aside.

The court examined the arguments presented by the parties, with a particular focus on the authorities cited by the respondents. The court noted that while many national arbitration statutes and institutional arbitration rules permit corrections, interpretations, or supplementations of arbitral awards, such mechanisms do not necessarily apply in all circumstances. The court held that where such a mechanism does not exist, or is not applicable, a tribunal's actions (and awards) after it has become functus officio will constitute an excess of authority. In this case, the court found that the arbitral tribunal had indeed exceeded its authority by issuing a subsequent award after becoming functus officio.

The court ultimately decided in favour of Chevron Australia Pty Ltd, setting aside the arbitral tribunal's subsequent award. The court held that the arbitral tribunal had exceeded its authority by making an award after it had become functus officio, and that the subsequent award should be set aside. The court's decision was based on the principles set out in the Model Law on International Commercial Arbitration and the relevant case law, and provides guidance for parties and arbitral tribunals in similar circumstances.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

CRW Joint Operation v Pt Perusahaan Gas [2011] SGCA 33 at [30] to [33] concerning an arbitral tribunal exceeding its 'authority' is, in my view, a significant and influential authority towards supporting the potential for a s 34(2)(a)(iii) engagement under functus officio encountered circumstances. Returning to CKJV's written submissions on this issue, they advanced to contend:96.Born [referring to Born G, International Commercial Arbitration) (3rd ed, 2021) vol 3, ch 25 at 3575 - 3582] discusses the operation of article 34(2)(a)(iii) Model Law, including some international authorities where tribunals have purported to publish awards which (relevantly) contain 'decisions on matters beyond the scope of the arbitration'. The common examples cited by Born from the international authorities include:(a)where a tribunal grants relief which neither party has sought; or(b)where an award is purportedly made against a non‑party to the arbitration; or(c)where awards deal with issues or disputes which the parties have not submitted to the arbitral tribunal, or have not sought to press therein. (footnotes omitted). CKJV's (as amended) written submissions, by reference again to the Born text, then contend towards what looks to be the very point at issue (at par 97):Born also suggests that a tribunal may relevantly exceed its authority where it makes an award [after] becoming functus officio. [Footnote 93 referring to Born, vol 3, ch 25 at 3582.] It is helpful to see that complete citation from the Born text which reads (at par 3582):An arbitral tribunal may also exceed its authority if it makes an award after becoming functus officio. Thus, a few courts have held that the arbitral tribunal exceeded its mandate where, after issuing a final award, it reopened the case and issued another award (recalling or revising its earlier award). As discussed above, however, many national arbitration statutes and institutional arbitration rules authorise corrections, interpretations, or supplementations of arbitral awards (thereby removing most questions regarding the arbitrators' authority to take particular post award actions). Where such a mechanism does not exist, or is not applicable, however, a tribunal's actions (and awards) after it has become functus officio will constitute an excess of authority. (my emphasis in bold) (footnotes omitted) CKJV's written submissions then continued (at par 98):Moreover, in the section concerning set aside applications under s. 34(2)(a)(iii), UNCITRAL Digest (2012), states the following proposition: 'if the arbitral tribunal, after issuing another award, reopened the case by issuing another award, the effect of which was to recall or revise the earlier award, the latter award should be set aside since the mandate of the arbitral tribunal was terminated on the issuance of the final award.' [citing at footnote 94, Introduction to the UNICITRAL 2012 Digest of Case Law on The Model Law on International Commercial Arbitration (1985, with amendments as adopted in 2006), at [91] p.153.]