Province of Balochistan v Tethyan Copper Company Pty Ltd (Rev 1)

Arbitration challenges under sections 67 and 68 of the Arbitration Act 1996 should be determined promptly and within the statutory framework of speed, finality and limited court intervention.

A section 67 challenge is a rehearing, but the court retains case-management powers to restrict late submissions and evidence. A party must ordinarily raise each jurisdictional ground before the tribunal; section 73 may preclude a new ground later. Where proposed allegations could create extensive and costly proceedings, issues concerning their admissibility, statutory preclusion and procedural scope may properly be determined as preliminary issues before a defence is required.

The Province of Balochistan applied for non-standard directions in arbitration claims under sections 67 and 68 of the Arbitration Act 1996, challenging an ICC partial award concerning a mining joint venture agreement. It sought pleadings, a case management conference and bifurcation of the jurisdiction and serious-irregularity applications.

Tethyan Copper Company opposed the application. It argued that corruption-based jurisdictional allegations were precluded because they had not been raised before the ICC tribunal, were out of time, and were affected by findings in related ICSID proceedings. The central issue was how the proposed grounds and evidence should be controlled before the arbitration claim proceeded.

1. Applicable principles. The statutory scheme emphasises fair and efficient arbitration, party autonomy and limited court intervention. Applications under sections 67 and 68 should ordinarily be determined as promptly as possible. A section 67 challenge involves a rehearing rather than a review, but that does not deprive the court of general case-management powers to control further submissions and evidence.
2. Section 73(1). The authorities establish a principle of openness and fair dealing. A party which participates in arbitration must ordinarily raise each ground of jurisdictional objection when it knows, or with reasonable diligence could discover, it. The material before the court gave TCC at least a prima facie case that Balochistan’s proposed corruption-based jurisdictional challenge had been withheld or disavowed in the ICC arbitration. The issue was not finally decided at this directions hearing.
3. Preclusion and time. The possible preclusive effect of the ICSID determination, the contention that the proposed challenge impermissibly attacked the ICC tribunal’s merits decision, and the scope of the arbitration claim form required further consideration. The 28-day period in section 70(3) serves speed and finality. Late particulars and evidence cannot be used routinely to circumvent it, although the appropriateness of additional evidence depends on the grounds that remain properly available.
4. Order. Before Tethyan was required to serve a defence or the claim proceeded further, a prompt preliminary hearing was directed to determine: section 73(1) preclusion; whether the corruption allegations improperly challenged the merits; whether they were included in the claim form; what directions and evidence were appropriate; and whether the section 68 application should be deferred until the section 67 application was determined. The judge reserved the precise form of order.