Visa Global Logistics Pty Limited v Connell

Visa Global Logistics Pty Limited (the applicant) sought to set aside an arbitration award made in favour of Connell (the respondent). The dispute arose from a contract for the supply of freight forwarding services. The arbitration concerned claims by Connell for unpaid invoices and claims by Visa Global Logistics for alleged breaches of contract by Connell.

The primary legal issue before Emmett J was whether the arbitration award should be set aside pursuant to section 34(2)(b)(ii) of the Commercial Arbitration Act 2010 (NSW) (the Act). This section permits an award to be set aside if the award is in conflict with the public policy of New South Wales. Visa Global Logistics contended that the arbitrator's decision to award interest on the unpaid invoices was contrary to public policy because it was based on an interpretation of the contract that was alleged to be fundamentally flawed and, in their submission, amounted to an improper exercise of the arbitrator's power.

Emmett J considered the meaning of "public policy" in the context of setting aside arbitration awards. His Honour referred to established authority that public policy grounds for setting aside an award are to be narrowly construed and are generally limited to situations where the award is affected by fraud, corruption, or a serious breach of natural justice, or where the award itself is illegal or irrational. His Honour found that the arbitrator's interpretation of the contract, even if considered erroneous by Visa Global Logistics, did not rise to the level of irrationality or illegality required to engage the public policy exception. The arbitrator had applied contractual terms to determine the entitlement to interest, and the applicant's disagreement with this interpretation did not constitute a breach of public policy.

Consequently, Emmett J dismissed the application to set aside the arbitration award.