Supreme Court of Western Australia proceedings arising from a contractual dispute between Chevron and joint venturer contractors CBI Constructors Pty Ltd and Kentz Pty Ltd (CKJV). Prior to the proceedings, the parties participated in a bifurcated arbitration concerning a contractor’s entitlement to payment for development of a significant infrastructure project in Western Australia. Procedural directions were made for a first hearing to deal with liability. An interim award was made (broadly against the contractor) but thereafter the contractor amended its case to raise a further issue concerning the construction of the contract affecting the basis of its entitlement to payment.
In a second interim award the tribunal determined it was open to the contractor to raise that new case, and then went on to decide the construction issue in its favour. Chevron commenced proceedings to set aside that second interim award contending that it was invalid due to the Tribunal being functus officio in relation to matters of liability after the first interim award.
Martin J discussed three core issues, firstly whether Chevron’s functus officio arguments properly fitted within the criteria of the Commercial Arbitration Act 2012 (WA) section s 34(2)(a)(iii). Secondly, if Chevron’s functus officio arguments did fit under the criteria, the substantive question of whether the functus officio challenge could be made good on the merits. Finally, if both of Chevron’s previous grounds were made out, whether the court should exercise its discretion to set aside the award.
Each of these issues was decided in favour of Chevron.
Accordingly, Martin J upheld Chevron’s application to set aside the second interim award. The contractor has now commenced an appeal to be heard in the Western Australia Court of Appeal.
Shane Doyle QC (with S Davis of the WA Bar), appeared on behalf of Chevron, instructed by Norton Rose Fulbright Australia.
The judgment is published here.
