Milligan Contractors Pty Ltd v Jaxon Construction Pty Ltd

Milligan Contractors Pty Ltd sought to set aside an arbitration award on the basis that the arbitrator had acted with misconduct. The application was brought in the Federal Court of Australia, where it was determined that the arbitrator had failed to address issues raised by reference in the arbitration agreement. Instead, the arbitrator had relied on their own facts, leading to the conclusion that the award should be set aside.

The central legal issues revolved around whether the arbitrator's conduct amounted to misconduct and whether this misconduct was sufficient to warrant setting aside the award. Milligan Contractors argued that the arbitrator's failure to adhere to the terms of the arbitration agreement and to consider the issues raised by reference constituted misconduct. Jaxon Construction Pty Ltd contended that the arbitrator's approach, while perhaps not ideal, did not reach the level of misconduct necessary to set aside the award.

The court found that the arbitrator's reliance on their own facts and failure to address the issues raised by reference did constitute misconduct. This misconduct was significant enough to warrant setting aside the award, as it undermined the integrity of the arbitration process. The court held that the award should be set aside, and the matter was remitted to the arbitrator for reconsideration in accordance with the terms of the arbitration agreement. This decision emphasised the importance of arbitrators adhering strictly to the terms of their appointment and the arbitration agreement.