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Haddad, Michael --- "Adequacy of Reasons in Arbitral Awards" [2008] MqJlBLaw 16; (2008) 5 Macquarie Journal of Business Law 353


Adequacy of Reasons in Arbitral Awards

MICHAEL HADDAD[∗]

I Introduction

A recent Australian decision[1] highlighted the importance of the standard and the adequacy of the arbitral award reasons which given in writing by the arbitrators as the parties didn’t agree otherwise. A decision by the Court of Appeal of the Supreme Court of Victoria Australia[2] upheld the first instance decision of Hargrave J in the case of BHP Billiton Ltd and Oil Basins Ltd [2006] VSC 402. This decision and other connected precedent cases from common law system will be examined. However, common questions regarding arbitral awards will be answered first;

What is “Arbitral Award”? Arbitral award is a decision given by the arbitral tribunal, which resolves the dispute. The award gives a decision on all claims submitted by the claimant. The purpose of the award is to dispose of the controversy finally and conclusively. It is made within the limits of the arbitration agreement and it rules on each claim submitted.[3]

Should arbitral award contain reasons? Any arbitral tribunal must have reasons for its decision which conclude through arbitral award and based on facts the case and evidences provides by the parties. And this process is the same if it is conducted in any place.[4]

If it is accepted that any award is to resolve a dispute, do the reasons underpinning the award have to be expressed? Or is it the decision alone which carries it own reasons?

Common arguments against "reasoned" awards are: (1) they could discourage compromise awards when otherwise appropriate; (2) arbitration awards accompanied by written decisions may be challenged more frequently by petition to a court; (3) experience shows that "reasoned" decisions are often tailored predominantly to avoid reversal or criticism; and (4) requirements for "reasoned" decisions will ultimately favour appointing lawyers as arbitrators, whereas the essence of arbitration frequently is to obtain a business, rather than legalistic, resolution.[5]

On the other hand, a primary argument by supporters for "reasoned" awards is that it requires the panel to articulate the basis of its award in writing, which should improve the quality of the award. It also gives the parties a better idea of how they fared and increases their confidence in the process because it demonstrates, in a way that a one-line written award does not, what arguments the panel considered persuasive. Supporters of "reasoned" awards also disagree that written decisions make awards more vulnerable to post-hearing challenge, because many arbitration clauses specifically relieve arbitrators of the need to follow strict rules of law, instead providing that awards should be issued in accordance with the custom and practice of the subject matter of the dispute.[6]

In order to know the adequacy and sufficiency of reasons, we will look first in part II of this paper to the obligation of the arbitrator to give reasons and will posit the question is it a judicial or legislative duty? Part III discusses what reasons are considered to be adequate with respect to a judge, an arbitrator. In exploring this issue this paper will also discuss the recent decision in BHP Billiton Limited v Oil Basins Limited[7]. Part IV and V will describe the major features of reasons process and form.

II The Obligation to Give Reasons

The obligation to give reasons by arbitrators is different from country to country. Some jurisdictions require arbitrators to provide reasons for the award, otherwise it can be revoke. Other jurisdictions simply do not, unless all parties request the Panel to explain the reasons for its award. Internationally[8], the movement is in favour of giving reasons, unless the parties agree otherwise. This may be seen in the Model Law, which stipulates:

(2) The award shall state the reasons upon which it is based, unless the parties have agreed that no reasons are to be given or the award is an award on agreed terms under article 30.[9]

The Washington Convention calls for a reasoned award, without restriction,[10] also the Convention on the Settlement of the Investment Disputes between States and National of Other States stipulates:

(3) The award shall deal with every question submitted to the Tribunal, and shall state the reasons upon which it is based.[11]

In addition, in practice, the ICC’s court deems awards which are insufficiently reasoned to be defective as to form.[12] They are therefore remitted to the arbitral tribunal for amendment before they may be approved in accordance with Article 29 of the ICC Rules. The UNCITRAL Arbitration Rules[13], London Court of International Arbitration Rules[14], and European Convention of 1961,[15] take the same approach as the Model Law.

The pattern is the same in some national laws. Switzerland[16] requires a reasoned award as does the Netherlands[17], Jordan[18], Tunis[19] and Oman. [20] In England, a party may give notice to the arbitral tribunal that a reasoned award is required; if the award does not set out the reasons of the award, or does not set them sufficiently, the court may order the arbitral tribunal to state the reasons in sufficient detail to consider any question of law arising out of the award.[21]

However, unlike arbitration in the United Kingdom and certain other countries,[22] the United States custom and practice is that arbitration Panels, unless requested otherwise, do not issue written explanations of the basis of their award. Arbitration clauses almost never require the Panel to explain the basis of its decision, although the parties are free to request the Panel to do so[23]. The highest U.S. court has ruled that: “Arbitrators have no obligation to the court to give their reasons for an award.”[24]

Yet, Australia takes the same approach as the Model Law; s 29 of the Uniform Commercial Arbitration Acts (the Uniform Acts), set out the formal requirements which an arbitral award must comply with, which provides as follows:

29 Form of award

(1) Unless otherwise agreed in writing by the parties to the arbitration agreement, the arbitrator or umpire shall:
(a) make the award in writing,
(b) sign the award, and
(c) include in the award a statement of the reasons for making the award.

(2) Where an arbitrator or umpire makes an award otherwise than in writing, the arbitrator or umpire shall, upon request by a party within 7 days after the making of the award, give to the party a statement in writing signed by the arbitrator or umpire of the date, the terms of the award and the reasons for making the award.

Accordingly, in the absence of written agreement to the contrary, an award must be in writing, signed by the arbitrator, and include a statement of the reasons for the arbitrator’s decision.

As mentioned above, almost all jurisdictions and conventions required reasons for an arbitral award. However, they were silent on the nature and extent of what is required in “a statement of the reasons for making the award”[25]. However the common law fills the void by providing guidance on what the contents of those reasons are to contain. This is the main issue which will be addressed in this research paper.

As noted above, s 29(1)(c) of the Uniform Acts provides that “(u)nless otherwise agreed in writing by the parties to the arbitration agreement, the arbitrator or umpire shall …… (c) include in the award a statement of the reasons for the award”.

Australian courts have considered the obligation to give reasons in a number of decisions in recent times. A convenient summary of the various cases, and the relevant principles, can be found in the case Beale v Government Insurance Office (NSW)[26], in which the obligation to provide reasons for decision consider at first instance that a judge or magistrate in particular cases has an obligation to provide reasons for the judgment given[27]. That obligation arises as a matter of judicial duty[28]. However, it’s a normal incident of the judicial process[29]. In matter of fact, it does not arise from legislation as it does in the field of administrative law.[30] In the administrative field there is, at common law, no obligation on primary decision-makers to provide reasons for a decision. [31]

In Australia, still undecided whether there is a general rule of law of imposing a duty to provide reasons.[32] Although, the obligation on courts to provide reasons may have a different source, it is an incident of judicial duty. On the other hand, the obligation for courts to proved reasons for administrative decisions is a legislative requirement. Although both types of decision serve the same purpose, there content of reasons are different.

Probably the main reason for an obligation on courts to provide reasons, is the fact that a party seeking an appeal may generally only appeal where the trial judge has made an error of law. The absence of reasons or insufficient reasons may not allow an appeal court to determine whether the trial judge’s verdict was or was not based on an error of law or an appellable error. However, the provision of full reasons has other benefits, such as, it gives both party the confidence that the trail process went correctly. However, the parties look to the arbitrator for a decision, not an explanation.

A failure to provide sufficient reasons can and often does lead to a real sense of grievance that a party does not know or understand why the decision was made.[33] This court has previously accepted the proposition that a judge is bound to expose his reasoning in sufficient detail to enable a losing party to understand why they lost.[34] One reason is obvious: if decisions cannot be understood, a feeling of injustice can arise. [35]

Aside from the sense of injustice which can be caused, there is a broader interest in maintaining public acceptance of judicial decisions and the judicial system. The requirement to provide reasons can operate prophylactically on the judicial mind, guarding against the birth of an unconsidered or impulsive decision. It enhances judicial accountability.[36] The provision of reasons has an educative effect: it exposes the trial judge or magistrate to review and criticism and it facilitates and encourages consistency in decisions. The educative effect does not stop with judges but extends to other lawyers, to government and to the public. Decisions of courts usually influence the way in which society acts and it is trite to point out that it is better to understand why one should act in a particular way.[37]

III The Adequacy of Reasons

A The Adequacy of Reasons Provided by a Judge

The content of an adequate statement of reasons is depends on the particular matter, so the content of the reasons depends on the particular circumstances of the matter being considered by the court.[38] Further, it is an incident of judicial duty for the judge to consider all the evidence in the case. It is clearly unnecessary for a judge to refer to all the evidence led in the proceedings or to indicate which of it is accepted or rejected. In the matter of fact, the extent of the duty to record the evidence given and the findings made depend, as the duty to give reasons does, upon the circumstances of the individual case.[39]

Similarly, in Soulemezis v Dudley (Holdings) Pty Ltd,[40] the right of appeal is given only in respect of a question of law, different considerations apply from the case where there is a full appeal. An ultimate finding of fact, which is not subject to appeal and which is no way dependent upon the application of a legal standard, can be treated less elaborately than an issue involving a question of law or mixed fact and law. If no right of appeal is given against findings of fact, a failure to state the basis of even a crucial finding of fact, if it involves no legal standard, will only constitute an error of law if the failure can be characterised as a breach of the principle that justice must be seen to be done. But, if, in addition to the issue of credibility, other matters were relied on as going to the probability or improbability of the plaintiff’s case, such a simple finding would not be enough.

It follows, that reasons need not necessarily be lengthy or elaborate: Ex parte Powter; Re Powter.[41] The scope of the reasons to be given is, as in Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd,[42] related “to the function to be served by the giving of reasons”. Accordingly, the content of the obligation is not the same for every judicial decision. No mechanical formula can be given in determining what reasons are required. On the other hand, there are three essential elements of a statement of reasons, which it is useful to consider. First, a judge should refer to relevant evidence. There is no need to refer to the relevant evidence in detail, especially in circumstances where it is clear that the evidence has been considered.[43]

Secondly, a judge should set out any material findings of fact and any conclusions or ultimate findings of fact reached. Where findings of fact are not referred to, an appellate court may infer that the trial judge considered that finding to be immaterial. Where one set of evidence is accepted over a conflicting set of significant evidence, the trial judge should set out his findings as to how he comes to accept the one over the other. But that is not to say that a judge must make explicit findings on each disputed piece of evidence, especially if the inference as to what is found is appropriately clear. Further, it may not be necessary to make findings on every argument or destroy every submission, particularly where the arguments advanced are numerous and of varying significance.[44]

Thirdly, a judge should provide reasons for making the relevant findings of fact (and conclusions) and reasons in applying the law to the facts found. Those reasons or the process of reasoning should be understandable and preferably logical as well.[45]

At the same time it is desirable to address these elements in giving reasons for decision, it is the purpose which the reasons serve which believes major importance in determining the content of the reasons. That purpose must be weighed against other considerations. It has been noted that the content required of a statement of reasons is to be measured against the burden that the provision of reasons imposes on the judicial system.[46] The reason for this is that the giving of overly elaborate reasons can serve to undermine public confidence in the judiciary and in the judicial system in the same way that insufficient reasons can. On the one hand, the provision of inadequate reasons can lead to a sense of injustice and a reduced appreciation or understanding of legal rights and obligations. On the other hand, an overly onerous duty to provide reasons increases costs and delay in the judicial system which has the effect of undermining public confidence in the judicial system. In the end, the balancing act which needs to be undertaken in considering the sufficiency of a statement of reasons involves the adoption of, at the least, a minimum standard which places the parties in a position to understand why the decision was made sufficiently to allow them to exercise any right of appeal.[47]

B The adequacy of reasons provided by an arbitrator

It should be note that because of the differences in appeals rights between arbitration and litigation. Care needs to be exercised in applying cases which were mentioned previously to the adequacy of an arbitrator’s reasons.[48]

Limitations on the leave to appeal from an arbitrator’s award due to the amendments to s 38 of the Uniform Acts, as follows:

(4) An appeal under subsection (2) may be brought by any of the parties to an arbitration agreement:

(a) with the consent of all the other parties to the arbitration agreement, or

(b) subject to section 40, with the leave of the Supreme Court.

(5) The Supreme Court shall not grant leave under subsection (4)(b) unless it considers that:

(a) having regard to all the circumstances, the determination of the question of law concerned could substantially affect the rights of one or more parties to the arbitration agreement, and

(b) there is:

(i) manifest error of law on the face of the award, or

(ii) strong evidence that the arbitrator or umpire made an error of law and that the determination of the question may add, or may be likely to add, substantially to the certainty of commercial law.

The New South Wales Court of Appeal in Promenade Investments Pty Ltd v New South Wales[49]considered when leave to appeal will not be granted. This decision has been followed and approved in jurisdictions across Australia. Sheller JA, who gave the leading opinion, noted that the Second Reading Speech of the New South Wales Attorney General in introducing the amendment to the New South Wales Act, stated:

If arbitration is to be encouraged as a settlement procedure and not a dry run before litigation, a more restrictive criterion for the granting of leave is desirable and the parties should be left to accept the decision of the arbitrator whom they have chosen to decide the matter in the first place.[50]

Promenade Investments can now be understood to represents the law in all Australian jurisdictions in relation to appeals under s 38 of the Uniform Acts. In the space of 13 years since 1992 it has been referred to in 88 subsequent decisions, including decisions of appellate courts in New South Wales, Victoria, South Australia and Western Australia, and by judges at first instance in the Supreme Courts of all States and Territories. On 49 occasions (including by the Courts of Appeal in New South Wales and Victoria, the Full Court of the Supreme Court of South Australia, and the Full Court of the Supreme Court of Western Australia) the decision has been followed, and has been mentioned on 39 occasions. In no case has the decision in Promenade Investments been distinguished or not followed.

In Peter Schwarz (Overseas) Pty Ltd v Morton,[51] Byrne J of the Victorian Supreme Court, summarized the adequacy of reasons provided by an arbitrator in the following terms:

“It is the duty of an Arbitrator to consider and deal with all matters the subject of the reference [Askew v Fields [1985] HCA 4; (1985) 156 CLR 268 at page 270]. Commonly, the arbitrating parties will present contentions of fact and law in support of their own case in opposition to that of the opponent. Often there will be multiple contentions put forward, sometimes in the alternative to those which have preceded them. The Arbitrators must have regard to them all. When it comes to preparing the award pursuant to s 29(1), and to “a statement of reasons for making the award”, the obligation is not identical. The statutory requirement that the reasons be “reasons for making the award”, means that the Arbitrators are not required to provide reasons which did not lead to the determination of the disputes referred to arbitration. Accordingly, it is not necessary for them to deal with an alternative basis of claim or defence when the primary claim or defence has been accepted.

The requirement for reasons in s 29 means that the Arbitrators must set out the facts which they have found and the legal principles which they have relied upon as the foundation for the award and that this should be in terms suffıcient for the parties to understand why they have won and lost and for them to decide whether to make and for the Court to determine an application for leave to appeal or enforcement. [Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 381 per Hutley JA, at 385 per Mahoney JA.]

I have mentioned the purposes which the statement of reasons is to serve. The statement of reasons, at a minimum, must be suffıcient to achieve these purposes. I say “at a minimum”, because I am concerned with the point at which the Court will take an active interest in the insufficiency of reasons; the prudent Arbitrator will not be tempted to stray close to this cliff edge. The question may arise whether a particular contention must be dealt with in the statement of reasons. Judges, mindful of their own judgment-writing experience, have been careful not to impose upon Arbitrators a burden greater than their own. And so, there is no need to deal with contentions which are frivolous, irrelevant or even peripheral to the matters in issue.

This has led the Court to stipulate that Arbitrators must deal with every “submission worthy of serious consideration”. [Sydney Water Corp Ltd v Aqua Clear Technology Pty Ltd (unreported, NSWSC), Rolfe J, 17 December 1996) at 51.] In Fletcher Construction Australia Ltd v Lines MacFarlane and Marshall Pty Ltd [[2002] VSCA 189 at [166]] the Court of Appeal in this State said that a reasoned judgment of a court must “deal with the central contentions advanced by the parties”. However the test is expressed, the minimum requirement is not that the Arbitrators deal with every contention. Precisely where the line is to be drawn in a given case will depend upon the circumstances, including the relevance of the contention to the Arbitrators’ conclusions. The decision to deal in the reasons with a particular rejected submission may also depend upon an assessment of its weight, particularly in a case where the arbitrating parties are not legally represented. Putting it bluntly, some points are so obviously bad that no good purpose is served by dealing with them in any detail. I need hardly add that the prudent Arbitrator will prefer to err on the side of comprehensiveness in order that the award should be of benefit to the parties.

A further matter bearing upon the application of this principle is that the Arbitrators will commonly not have had the benefit of legal training. Accordingly, Smart J in a much quoted passage has said this:

Elaborate reasons finely expressed are not to be expected of an arbitrator. Further, the court should not construe his reasons in an overly critical way. [Menna v HD Building Pty Ltd (unreported, SC (NSW), 1 December 1986), at p 5.]

In what are often called trade arbitrations, the parties and the Arbitrators are all engaged in a particular trade. In such arbitration the reasons may be expressed in the jargon of the trade or they may ignore matters which will be well known to the participants. Such an award which may appear deficient to an outsider may nonetheless satisfy the fundamental purpose of the statement of reasons. It cannot be the case that an award should be drafted only with an eye to informing an appeal court which may be unfamiliar with the trade and its practices.”

Recently, a decision in BHP Billiton Limited v Oil Basins Limited[52], which A decision by the Court of Appeal of the Supreme Court of Victoria Australia[53] upheld the first instance decision, requires arbitrators to give reasons in certain circumstances, in the same form as is required from a judge. A number of cases on the subject were not referred to in the judgment,[54] which were the subject of comprehensive exposition two decades ago by Tom Bingham in an address in which he set out in point form the different requirements of reasons by a court and reasons by an arbitrator.[55]

As a result of the treatment in the BHP Billiton Limited v Oil Basins Limited[56], we can conclude that the decision of Supreme Court of Victoria regarding the duty of arbitrators to provide sufficient reasons on an equal basis of judges.

For the following reasons a different and less stringent standard could be seen to apply to arbitrators

(a) That the parties look usually to the arbitration for a decision, not an explanation.

(b) The arbitration process is quite different from litigation; arbitration is less formal and more flexible than litigation, in which the outcomes will not always be alike, particularly the reasons process.

(c) Arbitrators are usually experts in their field,[57] who may not have the ability to include reasons at the arbitral award in away similar to judges.

(d) In addition, arbitration delivers a faster settlement to the parties, in which will not give the arbitrators the time to provide a sufficient reasoned award.[58]

(e) The parties have chosen the arbitrators by their free will and they have to bear the consequence and the responsibilities of the arbitration outcome.

Another issue is that the royalty agreement between the late Dr Lewis Weeks and BHP provided that it “shall be interpreted and applied in accordance with the law of the State of New York, United Sates of America.”[59] While the arbitration between Oil Basins and BHP was conducted under the Commercial Arbitration Act 1984 (Vic).[60] As mentioned before, according to the custom and practice of US, which is unlike arbitration in Australia,[61] arbitrators do not have an obligation to provide reasons for rendered the award.[62]

IV The Reasons Process

Before commencing the task of writing the award, an arbitrator should consider the framework for the award and reasons, such as:[63]

(a) the issues in dispute;

(b) the factual evidence in respect of those issues, and submissions made by the parties in relation to the factual evidence;

(c) the arbitrator’s findings on the facts, and the reasons for those findings;

(d) submissions made by the parties on the legal principles relevant to the arbitrator’s determination;

(e) the arbitrator’s findings on the legal principles relevant to the arbitrator’s determination, and the reasons for those findings;

(f) the application of relevant legal principles to the facts as found by the arbitrator;

(g) the determination made, by applying relevant legal principles to the facts as found; and

(h) any consequential matters, such as entitlement to interest.

The arbitrator task of preparing and writing the award and reasons then involves carefully and logically filling in the detail for the framework.

Arbitrator, it would be expected, should provide a brief re-statement of the background facts and of the issues of the dispute when rendering an award. Such an approach helps the arbitrator to address the reasons for deciding each disputed issue, and informs the parties (and others) just what the arbitrator has done, and why.[64] Despite it perhaps seeming obvious that agreed facts are restated often such an exercise, to the parties, is not a waste of time and energy: it is a disciplined way of focusing attention of both the arbitrator and the parties and on a satisfactory understood outcome.

The reasoning process of an arbitrator often involves dealing with the evidence by reference to those issues in dispute and recording why one body of evidence is preferred to another, and then stating – as succinctly and clearly as possible – why each question has been decided in that manner by the arbitrator giving the parties an insight into the fabric of the award.

This approach also opens the eyes of the arbitrator and leads them to realize that often the first impressions of a dispute that an arbitrator has cannot be supported by a clear exposition of the facts and a reasoned resolution to the problem by reference to the relevant law.

From the perspective of clarity and also efficiently providing reasons may also help an arbitrator to settle similar disputes in the same matter concurrently, grouping like issues together and only dealing with evidence once will allow the arbitrator to more efficiently and flexibly resolve a dispute.

Some cases present a large number of issues. It is useful, in that type of dispute, to group like items together, and firstly deal with the general principles which apply to the group of items, so that individual items can then be dealt with more briefly.

V The Form of Reasons

For the best form of reasons, an arbitrator firstly should prepare the reasons as a separate document, and then to use them to prepare the form of the award, where the reasons are clearly included into the Award itself.

The reasons are clearer if they are set out in a logical sequence. An example would be:[65]

(a) Introduction.

(b) A summary, by way of re-statement by the arbitrator, of the issues in dispute.

(c) The contract, identifying particular contractual provisions which the parties say are relevant to the issues in dispute, any relevant legal principles involved in the proper interpretation of the contact, the arbitrator’s findings on contractual issues and the reasons for those findings.

(d) A summary of the factual evidence, including any general findings on issues of credit where witnesses give differing testimony.

(e) Each of the issues raised in the claimant’s claim, referring to the evidence which has been led together with the arbitrator’s findings of fact and reasons for those findings; identifying any relevant legal principles involved, together with the arbitrator’s findings on the application of those principles and reasons for those findings; the evidence on quantum, together with the arbitrator’s findings on quantum and reasons for those findings.

(f) Each of the issues raised in any cross claim by the respondent, referring to the evidence which has been led together with the arbitrator’s findings of fact and reasons for those findings; identifying any relevant legal principles involved, together with the arbitrator’s findings on the application of those principles and reasons for those findings; the evidence on quantum, together with the arbitrator’s findings on quantum and reasons for those findings.

(g) Interest, including the date from which and the rate at which, interest should be awarded, referring to the evidence and any relevant legal principles, and setting out the arbitrator’s findings and the reasons for those findings.

(h) A summary setting out the total amount awarded, and the various items included in the total amount.

The length of the form of reasons will depend on the extent and complexity of the issues contained in the case.[66]

VI Conclusion

Arbitrators should balance the parties’ right of having a binding award, and the right to know and understand why the decision was made, in a logical and professional approach. As not away to make the awards “appeal proof”. Depending on the complexity of a particular matter, the task of preparing reasons of sufficient standard may be difficult and time consuming. It is a task which demands both attention to detail and reasonable brevity.[67]

The standard to be applied in considering the sufficiency of an arbitrator’s reasons depends upon the circumstances of the case including the facts of the arbitration, the procedures adopted in the arbitration, the conduct of the parties to the arbitration and the qualifications and experience of the arbitrator or arbitrators.[68]

The BHP[69] decision raises some concerns among arbitrators, in a result of the large powers of judicial supervision on commercial arbitration. While these statutory powers should be regarded as conferring a supervisory jurisdiction principally directed to maintaining the integrity of the process of arbitration.

The statutory power to review produces an appeal on a question of law. That must not mean that every time such a question exists the power to intervene must be exercised.

It can be suggested that the supervisory jurisdiction may interferes in way with the autonomy of the parties which is the underlying rationale of commercial arbitration and the reason why it has acquired a broad level of acceptance in dispute resolution.

The autonomy of arbitration and the supervisory jurisdiction should be in balance, in order to enhance the confidence of the commercial community with respect to the arbitration process.

The BHP case[70] which requires arbitrator to provide equal standards of reasons as same as required from a judge; will open the door widely for other cases to fallow its pattern. In fact, the consequence of the BHP case is very serious on arbitration process; first, it shift arbitration to litigation because of the time consuming that arbitration process will take regarding the judicial review[71]. Secondly, as a result, the use of arbitration as an alternative dispute resolution method will be reduced dramatically. Finally, the losing parties will abuse the inadequacy of reasons, in order to get raid of the arbitral award.

A recommendation, all parties in arbitration and judicial systems should work together to limit the leave of appeal, regarding insufficient reasons of the arbitral award.


[∗] PhD Candidate, Macquarie University.

[1] BHP Billiton Ltd and Oil Basins Ltd [2006] VSC 402.

[2] BHP Billiton Ltd and Oil Basins Ltd [2007] VSCA 255.

[3] Mailto Geoffrey Hartwell, The Reasoned Award in International Arbitration, 2007, http://www.hartwell.demon.co.uk/intaward.htm, at 22 August 2007.

[4] Bingham, “Reasons and Reasons and Reasons: Differences Between a Court Judgment and an Arbitral Award” (1988) 4 Arbitration International 1 reprinted in Australia in (1997) 16 The Arbitrator 19.

[5] ARIAS. U.S., Improving arbitration, http://www.arias-us.org/index.cfm?a=42, at 7 November 2007.

[6] Charles Forer, Many Reasons Exist for a “Reasoned” Award, 2002, http://www.eckertseamans.com/media_center/publications/articles/2002_03_25_162.asp, at 9 November 2007.

[7] BHP Billiton Limited v Oil Basins Limited [2006] VSC 402.

[8] J.C.T. Chuah, Law of International Trade (2nd ed, 2001) Sweet & Maxwell, London, 555.

[9] Model Law, Art. 31.

[10] Washington Convention, Art. 48.3.

[11] Convention on the settlement of the Investment Disputes between States and National of other states, Art. 48.

[12] ICC Rules, Art. 25(2).

[13] UNCITRAL Arbitration Rules, Art. 32(3).

[14] London Court of International Arbitration Rules, Art. 26(1).

[15] European Convention of 1961, Art. VIII.

[16] Swiss Private International Law, Art. 189.

[17] Netherlands Arbitration Act, Art. 1057(4).

[18] Jordanian Arbitration Act, Art. 41(b).

[19] Tunisian Arbitration law, Prt. 75, Art.458.

[20] Omanian Arbitration Law, Art. 43(2).

[21] Universal Petroleum v Handels Uncl [1987] 1 Lloyd’s Rep. 517.

[22] Crowley D., The Duty to Give Reasons: English v. Emery Reimbold & Strick Ltd (2002) 68 (1) the Journal of the Charted Institute of Arbitrators, 321-324.

[23] ARIAS. U.S., Improving arbitration, http://www.arias-us.org/index.cfm?a=42, at 7 November 2007.

[24] United Steelworkers of America v Enterprise Wheel & Car Corp. [1960] USSC 108; 363 U.S. 593, 598 (1960).

[25] Robert Hunt, The adequacy of reasons, (2007) 23 BCL 111.

[26] Beale v Government Insurance Office (NSW) [1997] 48 NSWLR 430.

[27] Pettitt v Dunkley [1971] 1 NSWLR 376.

[28] Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 386.

[29] Public Service Board of New South Wales v Osmond (1986) 159 CLR 656.

[30] see, for example, Administrative Decisions (Judicial Review) Act (Cth) s 13, Administrative Appeals Tribunal Act (Cth) s 28, s 37 and s 43.

[31] Public Service Board of New South Wales v Osmond (1986) 159 CLR 656.

[32] Our Town FM Pty Ltd v Australian Broadcasting Tribunal (No 1) [1987] FCA 301; (1987) 16 FCR 465 at 479.

[33] Re Poyser and Mills’ Arbitration [1964] 2 QB 467 at 478.

[34] Clutha Ltd v Risby (Court of Appeal, unreported, 26 March 1996).

[35] Dave Hoffman, The Obligation to Give Reasons, 2007, http://lsolum.typepad.com/legal_theory_lexicon/2004/02/legal_theory_le_2.html, at 4 November 2007.

[36] Dave Hoffman, The Obligation to Give Reasons, 2007,

http://lsolum.typepad.com/legal_theory_lexicon/2004/02/legal_theory_le_2.html, at 4 November 2007.

[37] Beale v Government Insurance Offıce (NSW) (1997) 48 NSWLR 430.

[38] Beale v Government Insurance Offıce (NSW) (1997) 48 NSWLR 430.

[39] Mifsud v Campbell (1991) 21 NSWLR 725 at 726.

[40] Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 281.

[41] Ex parte Powter; Re Powter [1945] NSWStRp 35; (1945) 46 SR (NSW) 1 at 5.

[42] Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 386

[43] North Sydney Council v Ligon 302 Pty Ltd (1995) 87 LGERA 435.

[44] Rajski v Bainton (Court of Appeal, unreported, 6 September 1991).

[45] John Mo, International Commercial Law (3rd ed, 2003) LexisNexis Butterworths, Sydney, 684.

[46] Sincik v Tess (Court of Appeal, unreported, 15 March l995).

[47] Beale v Government Insurance Office (NSW) (1997) 48 NSWLR 430.

[48] Crowley D., The Duty to Give Reasons: English v. Emery Reimbold & Strick Ltd (2002) 68 (1) the Journal of the Charted Institute of Arbitrators, 321-324.

[49] Promenade Investments Pty Ltd v New South Wales (1992) 26 NSWLR 203.

[50] Ibid, 221.

[51] Peter Schwarz (Overseas) Pty Ltd v Morton (2004) 20 BCL 133; [2003] VSC 144.

[52] BHP Billiton Limited v Oil Basins Limited [2006] VSC 402

[53] BHP Billiton Ltd and Oil Basins Ltd [2007] VSCA 255.

[54] The Honourable J J Spigelman AC, Supreme Court NSW, 2007, http://64.233.169.104/search?q=cache:2oFV_U7WwKwJ:www.lawlink.nsw.gov.au/lawlink/Supreme_Court/ll_sc.nsf/pages/SCO_spigelman100807+reasons+and+reasons+for+reasons+differences+between+a+court+judgment+and+an+arbitral+award&hl=en&ct=clnk&cd=1&gl=au, at 26 November 2007.

[55] Tom Bingham, “Reasons and Reasons and Reasons: Differences Between a Court Judgment and an Arbitral Award” (1988) 4 Arbitration International 1 reprinted in Australia in (1997) 16 The Arbitrator 19.

[56] BHP Billiton Limited v Oil Basins Limited [2006] VSC 402

[57] Gabriel Moens and Peter Gillies, International Trade and Business: Law, Policy and Ethics (2nd ed, 2005) Routledge-Cavendish, Oxon, 567.

[58] Richard Granett et al, A Practical Guide to International Commercial Arbitration (1st ed, 2000) Ocean Publications Inc., New York, 31.

[59] BHP Billiton Limited v Oil Basins Limited [2006] VSC 402, 13.

[60] Ibid, 24.

[61] Crowley D., The Duty to Give Reasons: English v. Emery Reimbold & Strick Ltd (2002) 68 (1) the Journal of the Charted Institute of Arbitrators, 321-324.

[62] ARIAS. U.S., Improving arbitration, http://www.arias-us.org/index.cfm?a=42, at 7 November 2007.

[63] Robert Hunt, The adequacy of reasons, (2007) 23 BCL 111.

[64] Ibid, 118.

[65] Robert Hunt, The adequacy of reasons, (2007) 23 BCL 111.

[66] Re Poyser and Mills’ Arbitration (1964) 2 QB 467.

[67] Alan Redfern and Martin Hunter, Law and practice of International Commercial Arbitration (4th ed, 2004) Sweet and Maxwell, London, 155.

[68] BHP Billiton Limited v Oil Basins Limited [2006] VSC 402.

[69] BHP Billiton Limited v Oil Basins Limited [2006] VSC 402.

[70] BHP Billiton Limited v Oil Basins Limited [2006] VSC 402.

[71] Peter Gillies and Niloufer Selvadurai. Reasoned Awards: How Extensive Must the Reasoning Be? (2008) 74 Arbitration 125-132


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