Australia: 2024 – A look back at Significant Decisions in Arbitration Practice

Introduction

1. In August, the High Court published two decisions in arbitration practice:
   • In Tesseract International Pty Ltd v Pascale Construction Pty Ltd [2024] HCA 24 (Tesseract), the High Court considered the applicability of South Australian and Federal proportionate liability regimes, finding that the proportionate liability statutes were capable of applying in arbitration; and
   • In CBI Constructors Pty Ltd v Chevron Australia Pty Ltd [2024] HCA 28 (CBI Constructors), the High Court upheld the principle that an arbitrator was functus officio in relation to the issues to which an interim award relates.
2. Earlier in the year, the Supreme Court of New South Wales published a decision, Icon Si (Aust) Pty Ltd v Australian Nuclear Science and Technology Organisation [2024] NSWSC 324 (Icon Si), where the Court considered whether a waiver of an expert determination clause, which was said to be a pre-condition to an arbitration clause, resulted in a waiver of the arbitration clause itself.The Court held that the arbitration clause remained operative and binding.

Tesseract

Proportionate liability in Australia

Proportionate liability legislation has been enacted in each of the Australian States and Territories.  The legislation governs apportionable claims, replacing the common law doctrine of joint and several liability for claims for property damage or pure economic loss arising from a failure to take reasonable care.  At a federal level, proportionate liability legislation is incorporated under the misleading and deceptive conduct provisions of the Competition and Consumer Act 2010 (Cth), the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth).

The proportionate liability legislation permits a wrongdoer to seek to reduce its liability to reflect the extent to which it caused loss in circumstances where there is more than one ‘wrongdoer’. 

Whether parties can contract out of the proportionate liability regimes differs across the states and territories in Australia.

Tesseract

In Tesseract, the High Court considered Tesseract’s alleged substandard performance of obligations under a construction contract. Tesseract denied liability, and argued, in the alternative, that its liability should be reduced due to the alleged negligence of a third party…