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Lloyd's Maritime and Commercial Law Quarterly

FIDELITAS AND FINALITY: WHEN AN ARBITRATOR IS FUNCTUS OFFICIO

Matthew Paterson*

CBI v Chevron
What is an arbitrator to do when they have made an interim award, and one of the parties seeks later to raise an argument they should have run before the interim award was decided? While many arbitrators remain hesitant to bifurcate proceedings—including to avoid having to deal with this question—it is unfortunately the case that this issue is arising with increasing frequency. The High Court of Australia has recently provided ultimate appellate guidance on this question, in CBI Constructors Pty Ltd v Chevron Australia Pty Ltd.1 A strong majority of the High Court concluded that, while issue estoppel might operate inter partes (and so is not a ground of review by the courts), the concept of functus officio means that an arbitrator lacks jurisdiction to hear fresh arguments on issues it has already decided. Should an arbitrator hear those arguments anyway, their award is subject to de novo review by the courts.

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