Balancing the Scales: The Standard of Reasons Required in Commercial Arbitration and Litigation in Australia

Abstract

The Gordian Runoff decision of the High Court of Australia had been highly anticipated as being the first High Court decision on arbitration in some time, when significant law reform initiatives relating to arbitration were underway in Australia, where strong government support was being lent to arbitration as a dispute settlement procedure, and where differences had arisen between the state Supreme Courts and Courts of Appeal as to the standard of reasons required in arbitral awards.

This article analyses the High Court of Australia's Gordian Runoff decision in context. Part 2 considers the state of the law prior to the High Court's decision by providing an overview of the Victorian, New South Wales and Queensland positions on the issue as to the standard of reasoning expected in arbitral awards. Part 3 reviews the High Court's decision in Gordian Runoff itself. Part 4 then explores the 'scalability' of reasoning standards brought about by Gordian Runoff by comparing the standard of reasons required of arbitrators with that required of judges. Finally, Part 5 considers the implications of Gordian Runoff, decided under the Uniform Commercial Arbitration Acts, for Australia's new domestic commercial arbitration legislation based on the UNCITRAL Model Law on International Commercial Arbitration.

Keywords: arbitration, litigation, reasoning, dispute resolution