Finding: The arbitrators have applied pressure to the parties to agree to a cancellation or commitment fee, constituting misconduct in terms of s44(a) of the Commercial Arbitration Act 1984.

 

Parties:

Claimant: Sea Containers Ltd (Australia)

Respondent: ICT Pty Ltd (Australia)

 

Place of Court Proceedings: Sydney, Australia

 

Applicable law: New South Wales Commercial Arbitration Act 1984

 

EXTRACT FROM THE JUDGMENT

 

This appeal involved a challenge to the validity of an order removing certain arbitrators after matters were referred to them under the terms of shipbuilding contracts between the parties. The respondent had applied for the order pursuant to s44 of the Commercial Arbitration Act 1984 (the Act) upon the grounds of apprehended bias on the part of the arbitrators and misconduct of the arbitrators in pressing the parties to agree to the payment of cancellation fees. At first instance, Gzell J found that the three arbitrators should be removed.

 

Before the trial Judge the respondent had contended that the arbitrators had misconducted themselves by repeated demands for cancellation fees and by pressuring the parties to agree to the payment of such; by declining to make orders unless the parties acknowledged an obligation to pay the fees; and by the fixing of a final hearing date without adequate notice to the parties and without hearing from the parties.