High Court of Australia

Westport Insurance Corporation v Gordian Runoff Limited [2011] HCA 37

244 CLR 239

5 Oct 2011

Case Number: S110/2010 S219/2010

Before

French CJ, Gummow, Heydon, Crennan, Kiefel, Bell JJ

Catchwords

Arbitration – Judicial review of awards - Section 38(5) of Commercial Arbitration Act 1984 (NSW) ("Arbitration Act") provided that the Supreme Court shall not grant leave to appeal on any question of law unless it considers that, having regard to all the circumstances, the determination of the question of law could substantially affect the rights of a party to the arbitration agreement (par (a)), and there is a "manifest error of law on the face of the award" (par (b)(i)) - Reinsurance treaties between respondent and appellants included arbitration agreement which required that any dispute arising thereunder be referred to arbitration to be held in accordance with and subject to Arbitration Act - Appellants appealed to Supreme Court on questions of law arising out of award - Whether leave to appeal should have been granted - Whether error of law manifest on face of award.

Arbitration – Reasons for award - Section 29(1)(c) of Arbitration Act required arbitrator to include in award a statement of reasons for making award, unless parties otherwise agreed in writing - Arbitrators delivered written award accompanied by "Reasons for Award" comprising 96 paragraphs - Nature and extent of reasons for award required by s 29(1)(c) of Arbitration Act - Whether reasons for award must be same standard as judicial reasons - Whether nature and extent of reasons for award depends upon circumstances of particular dispute.

Insurance – Statutory construction - Statutory limitation on exclusion clauses - Section 18B of Insurance Act 1902 (NSW) prevented insurer from avoiding liability by relying upon exclusion clause in contract of insurance where operation of exclusion clause was triggered by event with no relationship to cause of event giving rise to particular loss and claim, unless in all the circumstances it was not reasonable for insurer to be bound to indemnify insured - Respondent sought to rely on s 18B to overcome finding by arbitrators that reinsurance treaties between respondent and appellants did not respond to certain policies of insurance underwritten by respondent - Whether s 18B applicable to reinsurance treaties between respondent and appellants.

Words and phrases – "appeal", "arbitration agreement", "award", "considerations of general justice and fairness", "exclusion clause", "judicial standard", "manifest error of law on the face of the award", "question of law", "reasons", "reinsurance treaty".

Commercial Arbitration Act 1984 (NSW) – ss 22, 29, 38-40.

Insurance Act 1902 (NSW) – s 18B.

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