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Westport Insurance Corporation v Gordian Runoff Limited

  • Westport Insurance Corporation v Gordian Runoff Limited 1) French CJ, Gummow, Crennan and Bell JJ
    • The arbitration proceeded before a panel of three arbitrators upon a set of detailed pleadings which extended to more than 60 pages.
    • The hearing commenced on 14 July 2008 and continued until 22 July, with representation by senior counsel, witnesses being sworn and cross-examined on their written statements, many documents being in evidence and a full transcript provided.
    • In many respects, therefore, the arbitration proceeded along the lines of the conduct of a commercial cause in a superior court.
    • This complexity of the arbitration will be relevant when considering the content of the requirement in s 29(1)(c) of the Arbitration Act that the arbitrators provide a statement of the reasons for the making of the award.
    • The primary judge in Oil Basins had, as the Court of Appeal put it, properly held that
      • in order to provide reasons of the standard required by s 29(1)(c), it was necessary for the arbitrators to decide and give reasons for deciding whether 'overriding royalty' was a technical term with a meaning usually understood by persons in the oil and gas industry and, if so, whether the context of the royalty agreement or the surrounding circumstances implied that the parties intended a different meaning from the technical meaning.
    • In this case, the arbitrators were obliged to explain succinctly why the various integers in that complex statutory provision were satisfied….
    • There is no indication of factual findings in the Reasons which supported the inapplicability of the proviso, nor, indeed, of those considerations tending to support its application.
    • Other grounds namely a manifest error of law were also established.


1) [2011] HCA 37

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