In ViaSat Inc v Hansen Yuncken Pty Ltd [2024] NSWSC 158, the New South Wales Supreme Court confirmed the occasions on which the Court may grant leave to appeal from an arbitral award under the Commercial Arbitration Act 2010 (NSW) are narrowly circumscribed.

Viasat Incorporated engaged Hansen Yuncken Pty Ltd to construct a building for the Department of Defence under a subcontract. The subcontract was based on the Australian Standard for Contracting Suite of Contracting Templates (ASDEFCON) which had been amended by the parties to incorporate bespoke terms. Disputes arose under the subcontract which were determined by an arbitrator in favour of Hansen Yuncken and Viasat sought leave to appeal the arbitral decision on three questions of law under s34A of the Act.

The Supreme Court held that that Viasat failed to satisfy the Court as to each of the requirements in s34A of the Act and refused to grant leave to appeal from the arbitral award.

In reaching this decision, the Court affirmed that s34A of the Act provides an ‘opt-in’ regime. The default position is that there is no right to appeal an arbitral award on a question of law unless the parties agree otherwise. Even if the parties agree, the Court must not grant leave unless it is satisfied of each of the requirements set out in s34A(3). In this case, the parties agreed that s34A(3)(b), which provides that the question in dispute be one which the arbitral tribunal was asked to determine, was satisfied and the focus of the application was on the remainder of the section. The Court observed:

• Section 34A(3)(a) requires the Court to be satisfied “that the determination of the question of law will substantially affect the rights of one or more of the parties”. The party asserting its rights are adversely affected must demonstrate how and why the particular point erroneously decided has a substantial effect on the rights of that party.
• Section 34A(3)(c) requires the Court to be satisfied that the question of law is “obviously wrong” or of “general public importance” and the tribunal’s decision is “at least open to serious doubt”. This requirement is intended to place a severe restraint on the role of the Courts. The test of general public importance may not be satisfied where questions of law are commercially unique to the parties and their particular circumstances.
• Section 34A(3)(d) requires the Court to be satisfied that, despite the parties’ agreement to submit to arbitration, it is “just and proper in all the circumstances for the Court to determine the question”. This sub-section provides the Court a final ‘sweep-up’ discretion to refuse leave even if the other three conditions are met.

Although the Court accepted that Viasat had satisfied s34A(3)(a), it did not agree that each of the three questions of law were of general public importance and further, that the tribunal’s decision was at least open to serious doubt as required by s34A(3)(c) of the Act.

The Court held that the amendments to the ASDEFCON precedent and unconventional use for constructing a building rendered the subcontract “unusual and unique” to the particular project. As such, the proper construction of the subcontract by the Court would not have provided guidance on the construction of Defence contracts more broadly. Further, the arbitrator’s application of established legal principles was unremarkable and it was not clear how the arbitrator’s treatment of those issues gave rise to a question of general public importance, beyond the fact that the question arose in the context of a defence contract.

As the preceding requirements of the statute had not been satisfied the Court did not consider it necessary to consider the ‘sweep-up’ discretion in s34A(3)(d) of the Act.

The Court dismissed the application and ordered ViaSat to pay Hansen Yuncken’s costs of the proceedings.

The judgement is available here.