King & Wood Mallesons

Asia-Pacific 100 position: 3

Topic in focus — arbitration and proportionate liability

By Katherine Vines and Kristina Botsis

In a construction context, arbitration is a common dispute-resolution mechanism agreed to by parties to resolve disputes arising under their contract. Since the introduction of proportionate liability legislation in Australia, it has been unclear whether the proportionate liability regime applies to disputes referred to arbitration. In the recent decision of the Western Australian Supreme Court in Curtin University of Technology v Woods Bagot Pty Ltd [2012] WASC 449, the court decided that the proportionate liability provisions of the Civil Liability Act 2002 (WA) did not apply to arbitrations.

Prior to this decision, there had only been one Australian case, Aquagenics Pty Ltd v Break O’Day Council Ltd [2010] TASFC 3, which commented on the issue. While the court’s comments in the Aquagenics decision were obiter, they did suggest that proportionate liability does not apply to arbitration.

In the Curtin University decision, the parties were in dispute under a construction contract they had entered into. The dispute was being resolved by arbitration. The central issue for the court was whether the regime for proportionate liability in Part 1F of the Civil Liability Act applies to commercial arbitrations…

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