Equitable Funds Management Ltd (in liq) v Heinze

The matter in Equitable Funds Management Ltd (in liq) v Heinze involved the liquidators of Equitable Funds Management Ltd seeking to set aside an arbitration award. The respondents in the arbitration, Heinze, contested the liquidators' application, arguing the award should stand. The case was heard in the Supreme Court of New South Wales.

The court had to determine whether the arbitrator's conduct during the arbitration process constituted a denial of natural justice, thereby warranting the setting aside of the award. Specifically, the court considered whether the arbitrator's decision to proceed with the final hearing on an ex parte basis, without allowing the respondents an opportunity to be heard, amounted to a failure to observe natural justice. Additionally, the court examined whether the denial of the respondents' right to be heard justified the setting aside of the entire award.

The court found that the arbitrator had indeed misconducted the arbitration by not allowing the respondents to be heard at the final hearing. The court concluded that this procedural error amounted to a failure to observe natural justice and warranted setting aside the award. The court held that the award could not stand given the significant procedural irregularity that denied the respondents their right to be heard.

The court ordered that the final award dated 31 March 2003 be set aside and that the matter be remitted to the arbitrator for reconsideration. Furthermore, the originating application was dismissed. The respondents were required to reimburse the applicants for their share of the arbitration costs before the order took effect.