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Westport Insurance Corporation v Gordian Runoff Ltd
Church Grammar School v Bosnich & Anor [2010] VSC 476 (29 October 2010)Section 22(2) of the Commercial Arbitration Act 1984 (Vic) specifically permits parties to agree to an arbitrator or umpire deciding any question by reference to “considerations of general justice and fairness.” If the parties do not agree, the question must be decided according to law. However, even an agreement for the matter to be determined by reference to considerations of general justice and fairness does not mean an arbitrator is entitled to disregard the law entirely.1)
Woodbud Pty Ltd v Warea Pty Ltd, Unreported, Supreme Court of New South Wales, Young J, 15 June 1995.Young J noted that “it was most debatable” whether s 22(2) of the Commercial Arbitration Act 1984 (NSW)2), which is the equivalent to s 22(2) of the Commercial Arbitration Act 1984 (Vic), goes much further than permitting the arbitrator to disregard evidentiary and procedural rules and technical rules relating to evidence, deeds and contracts.

This provision does not appear in the Commercial Arbitration Act 2010 (NSW), hence its application which is currently limited based on the case law, appears even more limited.

Hence, arbitrations should be determined according to law.

1) paragraph 39
2) now repealed

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