Australia / 23 March 2012 / Australia, Federal Court of Australia / Traxys Europe SA v. Balaji Coke Industry Pvt Ltd / NSD 1490 of 2011
| Country | Australia |
| Court | Australia, Federal Court of Australia |
| Date | 23 March 2012 |
| Parties | Traxys Europe SA v. Balaji Coke Industry Pvt Ltd |
| Case number | NSD 1490 of 2011 |
| Source |
[2012] FCA 276, online: AustLII |
| Languages | English |
| Summary | Traxys Europe SA (“Traxys”), a Luxembourgian company, and Balaji Coke Industry Pvt Ltd (“Balaji”), an Indian company, entered into a contract for the sale of metallurgical coke. A dispute arose and arbitration was commenced pursuant to an arbitral clause contained in the contract, providing for arbitration in London under the Rules of the London Court of International Arbitration. The tribunal ruled in favour of Traxys. Traxys sought enforcement of the award in the Federal Court of Australia under s 8(3) of the International Arbitration Act 1974 (Cth) (“the Act”) (providing for the enforcement in the Federal Court of NYC awards, as defined by the Act, as if the award were a judgment or order of that court). Balaji opposed the application primarily on three grounds. First, it argued that the orders sought by Traxys (for the appointment of receivers to shares held by Balaji in an Australian company) did not amount to “enforcement” for the purposes of the Act. Second, it asserted that an applicant for enforcement of a foreign award in Australia must establish that, at the time enforcement is to be ordered, the party against whom enforcement is sought has assets in Australia; if the applicant fails to prove that matter, enforcement must be denied. Third, it submitted that, in any event, to enforce the award would be contrary to public policy, which was a ground for refusing enforcement under s 8(7)(b) of the Act (implementing Article V(2)(b) NYC). The Federal Court granted enforcement. First, it held that the appointment of receivers to the shares amounted to “enforcement” for the purposes of s 8(3) of the Act. In so finding, it noted that the Act did not confine enforcement to actual execution of the award. It also noted that the NYC, to which the Act gives effect, refers broadly to both “recognition” and “enforcement”. As such, it reasoned that an overly technical approach to s 8(3) applications should be avoided. It also observed that the 2010 amendments to the Act had, inter alia, removed the requirement for leave to enforce a foreign award. Thus, it concluded that enforcement could be refused only in the limited circumstances mentioned in ss 8(5) and (7) of the Act (implementing Article V(1) and Article V(2) NYC, respectively). Second, it held that there was nothing in the Act to prevent a court, as a matter of law, from directing the entry of judgment or the making of an order in the terms of the relevant award if there was evidence that, at the time such judgment was entered or such order was made, there might be, or even definitely were, no assets in Australia against which execution might be levied. Third, it held that there was no public policy ground on which to refuse enforcement under s 8(7)(b) of the Act. In so finding, the Court considered that the pro-enforcement bias of the NYC, as reflected in the Act, required that this ground for refusing enforcement not be made available too readily. |
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