Full Court of the Federal Court of Australia gives guidance on award enforcement

In an appellate judgment, the Full Court of the Federal Court of Australia has ruled that a foreign arbitral award is not enforceable because the arbitral tribunal was not constituted strictly in accordance with the parties’ arbitration agreement. Notably, the decision also considers the courts’ discretion to enforce an award even where a party establishes a ground for non-enforcement, an issue on which there was previously “no authoritative statement in Australia”.

The Full Court allowed an appeal from its first instance decision that enforced a foreign award pursuant to the International Arbitration Act 1974 (Cth).

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Australian Full Federal Court decision highlights the importance of explicitly binding all parties to an arbitration agreement

On 25 January 2017, the Full Federal Court of Australia dismissed Trina Solar US, Inc.’s (Trina) appeal from an earlier decision of a single Federal Court Judge not to exercise residual discretion to refuse Jasmin Solar Pty Ltd (Jasmin) leave to serve an originating application on Trina in the US, while arbitration proceedings were ongoing in New York. As discussed below, the decision highlights the importance of ensuring that all parties to a transaction are bound by the relevant arbitration agreement from the outset of the transaction.

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New South Wales Supreme Court orders partial enforcement of foreign arbitral award where breach of natural justice found in relation to one claim

In William Hare UAE LLC v Aircraft Support Industries Pty Ltd [2014] NSWSC 1403, the plaintiff, a company incorporated in Abu Dhabi, sought enforcement of a foreign arbitral award under the International Arbitration Act 1974 (Cth).  The enforcement was challenged by the defendant on grounds that a breach of public policy occurred in connection with the making of the award.  The defendant claimed principally, that the tribunal’s finding that the plaintiff was entitled to payment of US$50,000 when a claim for that sum was not made and the tribunal’s alleged failure to consider contentions of the defendant with respect to a variation of the relevant agreement constituted a breach of natural justice.  The defendant also based its challenge on the refusal of the tribunal to allow the defendant to rely on supplementary grounds of defence and the tribunal’s failure to give reasons for a number of its findings.

The arbitration hearing had been held in the UAE in December 2013 after several adjournments (at the request of the defendant).  At the hearing, the defendant made application to rely on certain supplementary defences, including a defence that the tribunal was not competent.  The application was heard de bene esse and the substantive hearing followed.

The award was issued on 1 May 2014.

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Australian court grants leave to enforce Chinese award against company in liquidation

On 19 April 2013, Justice Foster of the Federal Court of Australia handed down judgment in the case of Eopply New Energy Technology Co Ltd v EP Solar Pty Ltd [2013] FCA 356.  The question before his Honour was whether a foreign arbitral award made in China ought to be enforced in Australia against an Australian company in liquidation. The judge allowed Eopply to proceed with its originating motion seeking leave under Australia’s Corporations Act 2001 (Cth) (Corporations Act), and ordered enforcement of the award under the International Arbitration Act 1974 (Cth) (IAA).

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