Downer EDI Limited v EDI Exploration Drilling International GmbH

In the Supreme Court of New South Wales, Downer EDI Limited (the applicant) sought to set aside an arbitral award made in favour of EDI Exploration Drilling International GmbH (the respondent). The dispute concerned a contract for the provision of drilling services, and the applicant alleged that the arbitral award was invalid due to a fundamental breach of natural justice.

The primary legal issue before the Court was whether the arbitrator had breached the rules of natural justice by failing to give the applicant a proper opportunity to present its case. Specifically, the applicant contended that the arbitrator had relied on evidence and arguments that were not put to the applicant during the arbitration proceedings, thereby denying it a fair hearing.

Justice McDonagh considered the principles of natural justice in arbitration, noting that an arbitrator must afford parties a reasonable opportunity to present their case and respond to the case against them. His Honour found that while the arbitrator had considered certain material, the applicant had been adequately informed of the case it needed to meet and had been given opportunities to respond. The Court concluded that the applicant had not established a breach of natural justice, as the arbitrator's conduct did not amount to a denial of procedural fairness.

Consequently, the application to set aside the arbitral award was dismissed.