by Joshua Banks & Dr Sam Luttrell, Clifford Chance, Perth
In a recent decision,1 the Federal Court of Australia granted enforcement of an arbitral award issued by the Beijing Arbitration Commission for over AUD 40 million plus interest, pursuant to section 8(3) if the International Arbitration Act 1974 (Cth) (the IAA). The respondent (one of the award debtors) sought to oppose the enforcement on grounds that enforcement of the award would be contrary to public policy, the essence of the respondent’s case was that the award left the award creditor in a position of double recovery. The Court disagreed and granted enforcement.
This decision confirms the narrow scope available to deny enforcement of foreign arbitral awards on the ground that enforcement would be contrary to public policy within the meaning of section 8(7)(b) of the IAA. Specifically, the decision confirms that the public policy exception to enforcement is reserved for circumstances that are contrary to fundamental norms of justice and fairness in Australia within the context of international commercial arbitration.
On the specific issue of public policy and double recovery – which has arisen in other cases, including Gutnik v Indian Farmers Fertiliser Cooperative Ltd 2– the decision of Stewart J confirms that no double recovery will exist where, after the arbitral award is issued, there remain “processes of the law available to the parties to ensure an equitable outcome“.3 On this point, the Guoao decision provides particularly useful guidance.
Download a PDF of the full Case Note here: Guoao Holding Group Co Ltd v Xue (No 2) [2022] FCA 1584