Gordian Runoff Ltd (formerly GIO Insurance Ltd) v The Underwriting Members of Lloyd's Syndicates [2002] NSWSC 1260

New South Wales Supreme Court

CITATION : Gordian Runoff Ltd (formerly GIO Insurance Ltd) v The Underwriting Members of Lloyd's Syndicates [2002] NSWSC 1260 revised - 5/02/2003 CURRENT JURISDICTION: EQUITY FILE NUMBER(S) : SC 50208/02 HEARING DATE(S) : 19/12/2002 JUDGMENT DATE : 19 December 2002

PARTIES : Gordian Runoff Ltd The Underwriting Members of Lloyd's Syndicates 102 & 2021 JUDGMENT OF : Brownie AJ at 1

Mr C. Gee, QC - Plaintiff COUNSEL : Mr M. Pembroke, SC - Defendant Mallesons Stephen Jaques - Plaintiff SOLICITORS : Allens Arthur Robinson - Defendant CATCHWORDS : International Arbitration Act 1974 (Cth) - when an arbitrator withdraws from office, within meaning of Article 15 of INICTRAL model law. LEGISLATION CITED : International Arbitration Act 1974 (Cth) DECISION : I make a declaration in terms of paragraph 1 of the summons and order the defendants to pay the plaintiff's costs.

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BROWNIE AJ

THURSDAY 19 DECEMBER 2002

50208/02 - GORDIAN RUNOFF LIMITED (formerly GIO INSURANCE LIMITED t/as GIO REINSURANCE) v THE UNDERWRITING MEMBERS OF LLOYD'S SYNDICATES 102 & 2021 FOR THE 1998 YEAR OF ACCOUNT.

JUDGMENT 1 HIS HONOUR: The plaintiff and the defendants are parties to a contract of reinsurance. A dispute arose concerning that contract. That was referred to arbitration. The arbitration is governed by the provision of the International Arbitration Act 1974 (Cth). Part III of that Act adopts the UNCITRAL model law on international commercial arbitration and gives it the force of law in Australia. 2 This case throws up a problem that arises under Chapter III of the model law. In short, the plaintiff says that the mandate of one of the arbitrators has terminated or that the arbitrator has withdrawn from office. 3 The facts giving rise to the dispute are not really in dispute. The plaintiff is itself a reinsurer. It entered into a contract with the defendants for the reinsurance of the plaintiff by the defendants of part of any loss which it might suffer. After the original contract was made it was reduced to writing in the form of a document titled "Lloyd's Marine Excess Loss Reinsurance Policy". 4 The plaintiff claims to be entitled to be paid some money under the policy and the defendants deny that this is so as a matter of construction of the policy. Alternatively they raise a claim for rectification of the instrument. The questions that arise about the proper construction of the policy and its possible rectification are matters for the arbitrators and I express no view about them. 5 Chapter III of the model law contains Articles 10 to 15 inclusive. Article 10 (1) provides that the parties are free to determine the number of arbitrators. Article 11 (2) provides that the parties are free to agree on a procedure of appointing the arbitrator or arbitrators. 6 The policy provided in clause 15 generally for the arbitration of disputes that might arise concerning the policy. Clause 15.3 provided: "Unless the parties agree upon a single arbitrator...the claimant (the parties requesting arbitration) shall appoint an arbitrator...Within 30 days of receiving such notice the respondent shall appoint an arbitrator..."