High hurdle for procedural fairness and public policy challenges to arbitral awards reaffirmed by Victorian Supreme Court

In Simple Investments Pty Ltd v Bradley St Development Vic Pty Ltd [2026] VSC 510, the Supreme Court of Victoria enforced interim and final arbitral awards despite the respondents' attempts to resist enforcement on the grounds that they had been denied procedural fairness by the arbitrator and that enforcement would be contrary to the public policy of Victoria under the Commercial Arbitration Act 2011 (Vic) (CAA).

The Court confirmed that the grounds for refusing enforcement under s 36 of the CAA are to be construed narrowly and that parties seeking to resist enforcement face a substantial hurdle. The decision reinforces Australia's strongly pro-enforcement approach to arbitration. Alleged procedural unfairness, dissatisfaction with forensic outcomes or disagreement with an arbitrator's reasoning will rarely suffice to resist enforcement absent a clearly established ground for refusal.

The judgment provides useful guidance on the approach Australian courts will take when confronted with procedural fairness and public policy challenges to the enforcement of arbitral awards.

Overview

In a decision handed down on 11 August 2026, the Supreme Court of Victoria made orders enforcing interim and final arbitral awards in favour of Simple Investments Pty Ltd (the Applicant) against Bradley St Developments Vic Pty Ltd and Arram Developments Pty Ltd (the Respondents) pursuant to s 35 of the CAA.

The Court considered s 36 of the CAA, which sets out the grounds on which recognition or enforcement of an award may be refused. The Respondents contended that they had been denied a reasonable opportunity to present their case and that the arbitrator had determined matters beyond the scope of the arbitration, such that enforcement would be contrary to public policy.

In rejecting each of those grounds, Croft J reaffirmed the narrow scope of judicial intervention in arbitral proceedings.

Key Takeaways 

• An enforcement application under s 35 of the CAA is not an opportunity for an aggrieved party to revisit the merits of an arbitrator’s findings. Australian courts will resist attempts to turn enforcement proceedings into a disguised merits review.
• A party cannot adopt a particular forensic strategy (such as withholding evidence or a bare denial approach) and then recast the outcome as a denial of natural justice if it does not work out. Procedural unfairness requires an aggrieved party to establish real unfairness or real practical injustice.
• When assessing whether an issue falls within the scope of the arbitration, the court will look at pleadings, the evidence and submissions and may determine a matter that forms part of the pleaded case even if it is not identified in an agreed list of issues. An agreed list of issues does not necessarily limit a tribunal’s jurisdiction unless the arbitrator has clearly indicated otherwise.
• The threshold for establishing that an award is contrary to public policy is high and not readily overcome. It should not be cast so wide as to cure mere procedural imperfections but is aimed at rights which are fundamental to our legal system.
• A party alleging procedural unfairness should raise the issue with the tribunal at the earliest opportunity and seek corrective action. A party may be disadvantaged if it remains silent, awaits the outcome and then seeks to challenge the award after an adverse result.

Background

The dispute arose out of a property development joint venture agreement. Following disagreements between the parties, the dispute was referred to arbitration in accordance with the arbitration clause in the agreement.

In September 2025, the arbitrator issued an interim award, finding among other things that:

• An amount of $679,599 had been misappropriated from the joint venture account.
• The Respondents were required to provide access to books, records and accounting information relating to the joint venture. 
• The Applicant was entitled to payment of $289,244 representing its share of joint venture proceeds.

In January 2026, the arbitrator issued a final award requiring the Respondents to pay the Applicant's arbitration costs of $560,200.30.

The Applicant subsequently sought recognition and enforcement of the awards through the Supreme Court of Victoria pursuant to s 35 of the CAA. 

In response, the Respondents sought to resist enforcement under s 36 of the CAA, contending that the following grounds for refusing enforcement were present:

• The Respondents had been prevented from presenting their case on central matters decided by the arbitration (s 36(1)(a)(ii)).
• The arbitrator had determined matters beyond the scope of the parties’ submissions in the arbitration (s 36(1)(a)(iii)). 
• In the circumstances, enforcement would be contrary to public policy (s 36(1)(b)(ii)).

Central to each of the three grounds was the arbitrator's finding that $679,599 had been misappropriated from the joint venture account. The Respondents contended that that claim had not been properly advanced by the Applicant in the arbitration and that they had not been afforded a fair opportunity to address it.

The first two of these grounds fall under the broad scope of denial of procedural fairness and reflect s 18 of the CAA, which provides for the equal treatment of parties. 

Whether the Respondents were prevented from presenting their case – s 36(1)(a)(ii)

The Respondents’ contention that they had been denied a reasonable opportunity to present their case in relation to the arbitrator's finding that $679,599 had been misappropriated was underpinned by the following arguments:

• The claims against the Respondents sought a monetary order for amounts found to be misappropriated following the taking of accounts, but the arbitrator had ultimately declined to order a taking of accounts.
• The arbitrator’s finding that $679,599 had been misappropriated could not reasonably have been arrived at without evidence of the specific transactions justifying that figure.
• The monetary order was not one of the issues for determination agreed by the parties ahead of the hearing. It was raised for the first time in closing submissions (which differed from the case advanced by the Applicant during the arbitration).

Croft J rejected those arguments on the basis that, having regard to the totality of the circumstances, the Applicant had advanced the claim for misappropriation squarely within the bounds of the arbitral proceeding and the arbitrator was entitled to make findings with respect to the claim.

In reaching that conclusion, His Honour gave weight to the direct and precise allegation of misappropriation in the Applicant’s witness evidence but also the Respondents’ decision to withhold records relevant to those allegations.

The significance of the withheld records

While cautioning courts against being too ready to examine the rationale behind an arbitral tribunal’s decisions and highlighting the risk of such an approach leading to an impermissible merits review, Croft J thought it necessary to understand how the arbitrator concluded that $679,599 had been misappropriated; it being a key factor in determining whether there had been procedural unfairness.

His Honour found the following points to be relevant:

• The evidentiary record indicated that the amounts transferred totalled $679,599 but it was unclear if those funds were transferred legitimately or otherwise. 
• The arbitrator had ordered that the Respondents discover records relating to its transfer of funds but the Respondents had refused to produce those records. 
• The Applicant’s post-hearing submissions contended that it was open to the arbitrator to draw an adverse inference and conclude that the entire $679,599 sum was misappropriated given the Respondents’ obfuscation. 

His Honour concluded that the arbitrator was entitled to draw those inferences on the evidence before him, despite finding that the arbitrator’s approach in electing not to order a taking of accounts was atypical. His Honour also noted that the Respondents had control of the documents which could have explained the disputed transactions but took the forensic and strategic decision not to produce them.

In dismissing the Respondents’ claim, Croft J relied on the principle in TCL Air Conditioner¹ that a competent court may only refuse enforcement where the aggrieved party establishes “real unfairness” or “real practical injustice”.

Whether the arbitrator determined matters outside of the arbitration – s 36(1)(a)(iii)

The Respondents contended that the arbitrator exceeded the scope of his authority in the following ways:

• Determining the amount of the misappropriation claim without ordering a taking of accounts beforehand. 
• Determining the misappropriation issue despite it not forming part of the parties' agreed List of Issues.

His Honour rejected the Respondents’ first contention for the same reasons already set out above in respect of the Respondents’ complaint under s 36(1)(a)(ii) of the CAA.

As to the Respondents’ second contention, His Honour held that the relevant question was not whether the issue appeared in the List of Issues but whether it formed part of the matters referred to arbitration. While that inquiry required consideration of the parties’ pleadings, list of issues, submissions and evidence, the “overriding consideration” was whether the matter had been properly pleaded, which His Honour found to be the case.

His Honour also considered that the agreed List of Issues had been not treated by the parties or the arbitrator as an exhaustive statement of the matters capable of determination in concluding that it did not confine the arbitrator's jurisdiction in the manner suggested by the Respondents. His Honour noted, however, that if the arbitrator had indicated that the List of Issues was exhaustive, procedural unfairness may have arisen. 

Enforcement would be contrary to public policy - s 36(1)(b)(ii)

The Respondents conceded at the outset that their public policy ground stood with their other grounds for resisting enforcement under s 36 and was not a standalone basis for resisting enforcement. It was therefore dismissed alongside the other two grounds.

However, His Honour made the following notable observations about the “contrary to public policy” ground given its notoriety and the difficulties courts have defining its scope: 

• A public policy objection to the enforcement of an award should not be cast so wide as to cure “mere procedural imperfections”; it must be aimed at rights which are “fundamental” to our legal system. The threshold is high and not readily overcome. 
• Courts must be alive to the risk that it may be used as a “backdoor” method to circumvent the arbitral tribunal’s award and resist the temptation to review the merits of the award in its assessment of whether the award is contrary to public policy.

Conclusion

The judgment is an orthodox application of established principles but provides a useful illustration of the high bar faced by parties seeking to resist enforcement of arbitral awards in Australia.

Consistent with the pro-enforcement framework reflected in the New York Convention, the Model Law and Australian arbitration legislation, the Court emphasised that challenges based on procedural fairness or public policy will only succeed in exceptional cases involving real unfairness or practical injustice. Such unfairness or injustice must generally be readily demonstrable and concern matters of a fundamental, rather than merely procedural, character.

[1] TCL Air Conditioner (Zhongshan) Company Ltd v Castel Electronics Pty Ltd (2014) 232 FCR  361