Australian Court sets aside an international arbitration award and removes an arbitrator

The respondents in an international commercial arbitration were successful in the Federal Court in Australia in setting aside parts of two partial awards and removing the sole arbitrator pursuant to Articles 12, 18 and 34 of the UNCITRAL Model Law. These articles are incorporated into Australian law by the International Arbitration Act 1974 (Cth).

The Court found that the arbitrator had conducted himself in such a manner that the applicants could no longer have confidence in him. This was mainly because the arbitrator had decided various substantive questions in a final manner without giving some of the parties an opportunity to be heard on those questions.

The Court observed that procedural difficulties were encountered due to the hiving off and determination of incomplete separate questions where issues between the parties had not been properly crystallised.

Hui v Esposito Holdings Pty Ltd [2017] FCA 648 and Hui v Esposito Holdings Pty Ltd (No 2) [2017] FCA 728 demonstrate the circumstances in which the Court may review the actions of an arbitrator and may be prepared to terminate an arbitrator’s mandate and set aside awards.

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