Sydney Jacobs, Barrister at 13 Wentworth Chambers and Vikram Misra, Barrister at Clarence Chambers continue their series into arbitration and mediation. In Part 7, Sydney and Vikram examine the attitude of the Australian courts towards international commercial arbitrations by exploring the judgments in a number of cases. Follow their series here.
A measurable swing to a pro international arbitration attitude in Australia
One way to measure the attitude of the Australian courts to international commercial arbitrations, is to view matters through the lens of how the courts (Supreme and Federal) can intervene; and if one does so, one sees that generally speaking, the courts act in a supportive and facilitative manner by inter alia:
- Staying court proceedings when there is an enforceable arbitration agreement regulating the controversy between the parties;
- Ruling on interim measures of protection e.g. freezing orders;
- Assisting with the appointment of a tribunal;
- Ruling on the jurisdiction of an arbitrator;
- Recognition and enforcement of interim measures ordered by an arbitrator, subject to a number of grounds for opposition;
- Assisting in taking evidence;
- Exercising powers under Articles 34 to 36 of the Model Law, which provide limited grounds to set aside or refuse enforcement of an award.
Commenting on this last bullet point, the Hon Mr Justice Croft, of the Victorian Supreme Court observed extra curially at a symposium in 2014 that:
“Although the general position is that arbitral awards are considered to be final and binding, the limited and narrow grounds for challenging an award and resisting its enforcement are crucial to instil confidence in the arbitration process.”
In the paper delivered at that symposium, His Honour noted other pro arbitration statements by senior Judges, such as:
- Chief Justice Marilyn Warren of the Supreme Court of Victoria who said:
“In arbitration, the directive role of the Court needs to be minimised. The focus instead turns to ways in which the Court can support the arbitration process and enforce arbitral awards in a timely and cost effective manner.”
- Justice James Allsop (the Chief Justice of the Federal Court of Australia) observed at CIArb’s Asia Pacific Conference in 2011:
“The clear trend in judicial decision-making about arbitration in Australia [has transformed] from suspicion, to respect and support…In terms of intervention [by the judiciary], restraint is essential. Arbitration depends for its success on the informed and sympathetic attitude of the courts.”
This marks a clear shift from 2009, when it was observed by the Hon Michael Kirby, former judge on the High Court, that the Australian legal system has been somewhat slow in embracing ICA.
The clear trend is exemplified by the line of decisions of the Federal Court and then the High Court of Australia in TCL Air Conditioner (Zhongshan) Co Ltd v The Judges of the Federal Court of Australia.  HCA 5; (2013) 251 CLR 533. The unsuccessful party to an arbitral award unsuccessfully challenged the enforcement of an award; then sought special leave from the High Court on the basis that the International Arbitration Act 1974 (Cth) vests arbitrators with the Commonwealth’s judicial powers, which is repugnant to the Australian Constitution, Ch III. Rejecting this argument, French CJ and Gageler J observed:
“ Enforcement of an arbitral award is enforcement of the binding result of the agreement of the parties to submit their dispute to arbitration, not enforcement of any disputed right submitted to arbitration. The making of an appropriate order for enforcement of an arbitral award does not signify the Federal Court’s endorsement of the legal content of the award any more than it signifies its endorsement of the factual content of the award.”
Further, the Full Bench decision of the Federal Court in TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd  FCAFC 83 ; (2014) 311 ALR 387 (Allsop CJ, Middleton and Foster JJ) supports a consistent international system for the enforcement of arbitral award. In the course of the judgment, the Court considered the international provenance of Australia’s arbitration regime, and observed at :
“….it is not only appropriate, but essential, to pay due regard to the reasoned decisions of other countries where their laws are either based on, or take their content from, international conventions or instruments such as the New York Convention and the Model Law. It is of the first importance to attempt to create or maintain, as far as the language employed by Parliament in the … [International Arbitration Act] permits, a degree of international harmony and concordance of approach to international commercial arbitration. This is especially so by reference to the reasoned judgments of common law countries in the region, such as Singapore, Hong Kong and New Zealand.”
Consistent with the pro-arbitration approach, the Federal Court of Australia in Lahoud v Democratic Republic of Congo  FCA 982 enforce two investment arbitration awards for the first time. See further the article the Hon James Allsop, “The role of the Courts in Australia’s arbitration regime.”  FedJSchol 25 (viewed online December 2019), which continues judicial commentary, both curially and extra curially, along the same lines. His Honour observed that:
“The approach of Australian courts is reflective of this balancing act between minimal intervention and appropriate support, and emphasises the consensual, party-driven nature of arbitration.”
Part of this balancing act is the ordering that security be put up by an applicant mounting a challenge to enforcement an award, as the price for staying it pending judgment: Hyundai Engineering & Steel Industries Co Ltd v Alfasi Steel Constructions (NSW) Pty Ltd  FCA 1054.
Further, a case on a stay application, exemplifies the support Australian courts afford to arbitrations, by staying curial proceedings so as to allow arbitrations to proceed: Warner Bros. Feature Productions Pty Ltd v Kennedy Miller Mitchell Films Pty Ltd  NSWCA 81 (California arbitration pursuant to an arbitration clause in apparent standard form in that context).
In our next article, we will explore “avoiding the temptations of domesticity”, a phrase attributed to Hon Mr Justice Croft, of the Victorian Supreme Court, and how this phrase is a lens through which to explore the matters under discussion.
 Art 8 of the Model Law.
 Arts 8 and 17J of the Model Law, but noting that Art 17J is only available under the 2006 Model Law.
 Articles 11, 13 and 14 of the Model Law.
 Article 16 of the Model Law.
 Arts 17H and 17I of the 2006 Model Law only.
 Article 27 of the Model Law.
 Hon Michael Kirby, ‘International Commercial Arbitration and Domestic Legal Culture’ (Paper Presented at Australian Centre for International Commercial Arbitration Conference, Melbourne, 4 December 2009).
 See also; Cases such as Subway Systems Australia Pty Ltd v Ireland  VSCA 142 , Uganda Telecom Limited v Hi-Tech Telecom Pty Ltd  FCA 131 at , Gujarat NRE Coke Limited v Coeclerici Asia (Pte) Ltd  FCAFC 109 ; and Flint Ink NZ Limited v Huhtamaki Australia Pty Ltd and Lion-Dairy & Drinks Pty Ltd  VSCA 166 and Mango Boulevard P/L v Mio Art P/L  QSC 87, show the same pro-arbitration judicial trajectory.
With over 20 years’ experience as a barrister, Sydney Jacobs practices in the areas of commercial law and equity, real property and building and construction law. He has acquired experience in the area of easements: he has obtained easements for applicants and otherwise appeared in the cases listed below, has a number of current matters in the NSW Equity Division Real Property List being case -managed to final hearing 2018 and is briefed in certain easement matters being worked up for filing in Court. Prior to being called to the Bar, Sydney was a solicitor in the well -known firms listed below, as a commercial litigator with a construction law focus. Sydney has experience in acting for clients seeking or opposing easements and clients whose rights of way have been impeded by neighbours. You may connect with Sydney via email [email protected] or LinkedIn
Vikram Misra was admitted as a solicitor in 2012 and called to the NSW Bar in 2015. He maintains a broad commercial practice and is regularly briefed in matters relating to taxation law, property law, construction law and equity. Vikram has completed a Graduate Diploma in Taxation Law at the University of Sydney in 2015 and a Master of Laws majoring in construction law and contract law at the University of Melbourne in 2016. You may connect with Vikram via email [email protected] or LinkedIn
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