Enforcement of arbitral awards in Australia: overview
A Q&A guide to enforcement of arbitral awards law in Australia.
The Q&A gives a structured overview of the key practical issues concerning enforcement of arbitral awards in this jurisdiction, including definitions and preliminary proceedings; applicable conventions; enforcing awards; public policy, enforcement proceedings; formalities; actual enforcement; and any reform proposals.
This Q&A is part of the Enforcement of Judgments and Arbitral Awards in Commercial Matters Global Guide.
Enforcement of arbitral awards
Definitions and preliminary proceedings
Foreign arbitration awards are governed by the Commonwealth International Arbitration Act 1974 (IAA) and domestic commercial arbitrations are governed by the Commercial Arbitration Acts of the various States. In New South Wales, it is the Commercial Arbitration Act 2010 (CAA) that is very similar to the legislation governing commercial arbitration in the other States. Only the law in New South Wales (as opposed to the other States) will be referred to in this chapter in relation to domestic commercial arbitrations. A domestic award is one where both parties are Australian. An international award is one involving at least one non-Australian party. A foreign arbitral award is one made outside of Australia.
The IAA and the CAA rely heavily on the UNCITRAL Model Law on International Commercial Arbitration 1985 (Model Law). The Model Law applies to international arbitrations conducted in Australia and therefore has the force of law (section 16, IAA), and it is heavily relied on in the CAA. The IAA and the CAA, as well as the decisions of the courts in recent years and especially after amendments to the IAA made in 2010, make it clear that the courts use the Model Law as the template for the conduct of international and domestic commercial arbitrations. A string of recent judicial decisions at both Commonwealth and State level have reinforced this view most recently in a decision of the New South Wales Court of Appeal (Aircraft Support Industries Pty Ltd v William Hare UAE LLC  NSWCA 229). Similarly, there are many recent court judgments making it very clear that at both State and Commonwealth level, Australia is a pro-arbitral award enforcement jurisdiction and will require the strongest proof consistent with the law to challenge a commercial arbitration or to challenge the enforcement of an award whether international or domestic. This applies as much to foreign arbitral awards where applications are made to enforce them under the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention) as to arbitration awards made in Australia, whether international or domestic. The Model Law does not apply as such to the enforcement of foreign awards under the IAA.
Many definitions in the IAA and the CAA are similar, if not identical, and there are often cross references to the New York Convention and the Model Law or, alternatively, provisions in legislation that are identical or almost identical to the provisions in the New York Convention or Model Law. This relationship is the key to understanding how the IAA and the CAA work in commercial arbitrations in relation to the:
Conduct of the arbitration.
Enforcement of the award both domestically and internationally.
The Model Law covers the field, so that if it applies to an arbitration in Australia, it does so to the exclusion of State laws (section 21, IAA).
An "arbitration award" is defined in the IAA as having the same meaning as under the New York Convention. "Arbitral awards" are described as including "not only awards made by arbitrators appointed for each case but also those made by permanent arbitral bodies to which the parties have submitted" (Article 1, New York Convention). The definition of "judgment" under the Commonwealth Foreign Judgments Act 1991 (FJA) is broad enough to include a foreign arbitral award recognised under the IAA (see Enforcement of judgments in Australia, Question 1). Just as the enforcement of foreign judgments is the province of the FJA, the enforcement of foreign arbitral awards is the province of the IAA, and in both cases no other legislation applies.
Both the Commonwealth International Arbitration Act 1974 (IAA) and the Commercial Arbitration Act 2010 (CAA) provide for the recognition and enforcement of preliminary or interim orders in effect by reference to the provisions of Article 17B of the UNCITRAL Model Law on International Commercial Arbitration 1985 (Model Law) with some minor modifications. There are examples of interim orders such as (Part 4A, CAA):
Security for costs.
Discovery of documents and interrogatories.
Giving of evidence by affidavit.
Inspection of property.
Other interlocutory matters.
Interestingly, the CAA omits Article 17C of the Model Law, which contains safeguards for the party against whom a preliminary order is directed.
Australia is a party to the:
UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention).
UNCITRAL Model Law on International Commercial Arbitration 1985 (Model Law).
The Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID), which is dealt with specifically in Part IV of the Commonwealth International Arbitration Act 1974 (IAA).
This chapter will not discuss enforcement of ICSID arbitral awards as they involve disputes with national governments that (while they may be of a very commercial nature) are quite distinct in many ways to private commercial arbitration agreements that are the subject of this chapter.
Both the Commonwealth International Arbitration Act 1974 (IAA) and the Commercial Arbitration Act 2010 (CAA) provide a relatively simple and succinct process of recognition and enforcement of foreign and domestic arbitral awards respectively with very limited grounds for refusing recognition or enforcement. The terms "recognition" and "enforcement" are used synonymously in both the IAA and the CAA (section 1(2), IAA). Enforcement of foreign awards is found in Part II of the IAA (sections 3 to 14, IAA). Enforcement of international awards made in Australia is dealt with in the UNCITRAL Model Law on International Commercial Arbitration 1985 (Model Law) as incorporated into the IAA.
There are only limited grounds for refusing enforcement and they reflect the UNCITRAL Model Law on International Commercial Arbitration 1985 (Model Law). Application must be made promptly to the relevant State Supreme Court. There are exclusive grounds for refusing recognition or enforcement where the burden of proof is on the party seeking to have enforcement of the award refused (Article 36, Model Law). The court can decide whether to refuse to enforce the award if any of the following grounds are made out:
A party of the arbitration agreement was incapacitated or the arbitration agreement was not valid under the law of the arbitration agreement or under the law of the State where the award was made.
A party against whom the award was made was not given proper notice of the employment of an arbitrator or of the arbitral proceedings or is otherwise unable to present the party's case.
The award deals with a dispute that was either not contemplated by nor falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration (see the recent decision of the New South Wales Supreme Court: InfraShore Pty Ltd v Health Administration Corporation  NSW SC 736).
The composition of the tribunal or its procedure was not in accordance with the arbitral agreement, or failing the agreement was not in accordance with the law of the State where the arbitration took place.
The award had not become binding on the parties or had been set aside or suspended by a court of the State in which, or under the law of which, that award was made.
The subject matter of the dispute is not capable of settlement by arbitration or the recognition or enforcement of the award would be contrary to a public policy of the State.
Recognition of enforcement of the award would be against the public policy of the State.
There is a limited list of grounds for setting aside a domestic award in the courts of the State where the award was made (section 34, Commercial Arbitration Act 2010 (CAA)). These grounds are the same as section 36 of the CAA.
The grounds for refusing enforcement of a foreign arbitral award are listed in section 8(5), (7) and (7A) of the Commonwealth International Arbitration Act 1974 (IAA) and are very similar to those in the CAA. They are based on Article 5 of the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention). One slight difference is that the public policy ground is more specific. An award is contrary to public policy if (section 8(7A), IAA):
The making of the award was induced or affected by fraud or corruption.
A breach of the rules of natural justice occurred in connection with the making of the award.
However, "public policy" is not confined to these two grounds.
Most of the recent attempts to refuse enforcement of foreign arbitral awards have come within the public policy ground and have been almost uniformly unsuccessful. Many of these cases have been heard in the Federal Court of Australia (FCA). One of the most well-known of these judgments, which has been followed in several State Supreme Courts including the NSW Supreme Court, is Colin Joss v. Cube Furniture  FCR 735.
Under both the Commonwealth International Arbitration Act 1974 (IAA) and the Commercial Arbitration Act 2010 (CAA), the court does not have to examine the grounds for refusal ex officio. If a party wishes to oppose enforcement of either a domestic or foreign arbitral award it must do so by making an application and it has the burden of proof. That is a very high burden of proof based on the principles behind the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention), the UNCITRAL Model Law on International Commercial Arbitration 1985 (Model Law), the IAA and CAA. Indeed, as successive judgments in the Federal Court of Australia (FCA), the Full Federal Court of Australia (FFCA) and the various State Supreme Courts have made it clear in recent years the courts must have regard to the objectives of the IAA and the CAA, specifically that arbitration is an efficient, impartial, enforceable and timely method by which to resolve commercial disputes and that awards are intended to provide certainty and finality (section 39(2), IAA). Therefore, the courts will not take it on themselves to investigate whether there are any grounds for setting aside or refusing to enforce an arbitral award either domestic or foreign.
This question can only apply in relation to foreign arbitral awards. If the arbitral award is under challenge in the foreign State where the award was made, and at the same time the award creditor is seeking to enforce the award in Australia, the Australian courts will stay the enforcement proceedings (section 8(8), Commonwealth International Arbitration Act 1974).
These awards are enforceable for both foreign and domestic awards.
Awards containing injunctions ordering or prohibiting the doing of acts
These awards are enforceable in both foreign and domestic awards.
Decisions or awards by arbitral tribunals (including emergency arbitrators) granting provisional measures
These awards are enforceable subject to the discretion of the court that can extend to requiring the parties seeking the provisional measures to provide security for costs, and provided the granting of such provisional measures does not lead to fraud, corruption or injustice and are not in breach of public policy (section 18B, Commonwealth International Arbitration Act 1974 giving effect to Article 17B, UNCITRAL Model Law on International Commercial Arbitration 1985; section 17; Commercial Arbitration Act 2010).
These are enforceable for both foreign and domestic arbitral awards (see the decision of the Federal Court of Australia in Armada (Singapore) Pte Ltd (under judicial management) v Gujarat NRE Coke Limited  FCA 636).
The category of remedies available for enforcement in an arbitral award are not closed in Australia and unless they offend Australian public policy and are capable of being given effect, then there is no reason why a court would not enforce such an award.
Parties can seek to enforce only part of an award as was held recently by the New South Wales Court of Appeal in Aircraft Support Industries Pty Ltd v William Hare UAE LLC  NSW 229 where, unusually for Australia, at first instance, part of the award had been refused recognition because it was against public policy on the basis that there had been a breach of natural justice in connection with making the award under section 8(7)(b) of the Commonwealth International Arbitration Act 1974. This is because part of the reasons in the award had never been argued in the arbitration. Importantly, the court held that the unenforceable part of the award could be severed from the award and the rest of it enforced. The juristic principle that the courts must adopt a pro-arbitration stance except in the strongest of circumstances was stated firmly by the Full Federal Court of Australia (FFCA) in TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd  FCA FC 83 and also by the Federal Court of Australia in a domestic arbitral award case in Emerald Grain Pty Ltd v Agrocorp International Pty Ltd  FCA 414.
There is no specific class of awards excluded from enforcement under the Commonwealth International Arbitration Act 1974 (IAA) or the Commercial Arbitration Act 2010 (CAA). However, if an award requires payment of some form of criminal fine or penalty (perhaps unlikely in a commercial arbitration) then it is likely that a court would refuse to enforce that part of the award on the basis that it was contrary to public policy under the IAA or in relation to the domestic award under various grounds such that such awards are not contemplated in the CAA, the UNCITRAL Model Law on International Commercial Arbitration 1985 or the common law.
This question can only relate to enforcement of foreign arbitral awards. If service was not in accordance with the law of the place of the arbitration or the law of the arbitration, there would be a ground for refusing to enforce the foreign arbitral award under section 8(5)(c) of the Commonwealth International Arbitration Act 1974. However, as there are no such treaties or regulations in Australia relevant to the enforcement of a foreign arbitral award, the issue cannot arise.
Neither the Commonwealth International Arbitration Act 1974 (IAA) nor the Commercial Arbitration Act 2010 (CAA) prescribes any particular form of service against an award debtor (defendant) domiciled in Australia or in another country. The local procedural rules of service apply. For parties domiciled in Australia, essentially these rules are that legal proceedings have to be served personally on the defendant if they are an individual, or if the defendant is a corporation then it must be served at its registered office is within Australia. In some exceptional circumstances, substituted service is permitted by the court.
The public policy that is a ground for refusing enforcement of a domestic arbitral award in Australia under section 36(i)(b)(ii) of the Commercial Arbitration Act 2010 (CAA) is the public policy of New South Wales or whichever other State court hears the enforcement application (see Sugar Australia Pty Ltd v. McKay Sugar Limited  RSC 38).
The limited grounds for refusing enforcement of foreign arbitral awards under the public policy head of the Commonwealth International Arbitration Act 1974 (IAA) make it clear that it is Australian public policy and not the public policy of the country where the award was made or any other country. If the international award is made in Australia, then the public policy ground for refusal of enforcement under Article 36(1)(b)(ii) of the UNCITRAL Model Law on International Commercial Arbitration 1985 is Australia's public policy. With enforcement of foreign awards, the relevant public policy ground for refusing to enforce such judgments is Australian public policy (see Traxis Europe SA v Balaji Coke Industry Pvt Ltd  205 FCR 535).
Recent judgments in both domestic and international (including foreign award) enforcement cases have involved alleged breaches of the "natural justice" ground of public policy. With one small exception (see Aircraft Support Industries Pty Ltd v William Hare UAE LLC  NSW 229: Question 9) all public policy challenges have failed.
In order for a domestic arbitral award to be recognised in New South Wales, the award creditor must apply in writing to the court and provide the original of the award or a copy of the original award. If the award is not made in English (this is most unusual in Australia) the court can request that the party supply a translation of it into English (see section 35, Commercial Arbitration Act 2010 (CAA)).
Ex parte or on notice. The application is usually made ex parte.
Applicable court. The applicable court is the Supreme Court of the State where the award was made, or where the judgment debtor has assets, at the election of the judgment creditor.
Limitation period. The usual limitation period in which proceedings for the enforcement of a domestic arbitral award need to be commenced is six years from the date when the judgment debtor failed to pay the award (section 20, New South Wales Limitation Act 1969). However, proceedings to set aside such an award need to be made no later than three months after the applicant received the award (section 34(3), CAA).
Timing. As with most enforcement proceedings, the time the proceedings will take depends on whether or not there is any opposition to them. If there is not then the enforcement process is likely to be completed within three months.
Court fees. Depending on whether the judgment creditor is an individual or a corporation, the court fees are usually between AU$2,000 and AU$5,000.
Recourse. The affected party can apply to the court to set aside a domestic arbitral award (section 34, CAA) on the grounds listed in section 34(2) of the CAA, which are the same grounds that apply under section 36 of the CAA that are the grounds for refusing recognition or enforcement (based on Article 34 of the UNCITRAL Model Law on International Commercial Arbitration 1985 (Model Law)). Once the court has granted or denied enforcement of a domestic arbitral award (and on the basis that the affected party has not commenced an appeal against the award under the very limited grounds available for appeal in section 34A of the CAA), then that is the end of the matter. That is unless the affected party appeals the award enforcement or setting aside itself, which it can do under the usual rules for appeal judgments of a State Supreme Court that are essentially that there must be appealable errors of law in the judgment.
The only grounds for appealing against a domestic award are if the parties agree and the court grants leave to do so (section 34A, CAA).
If a court orders the enforcement of a foreign arbitral award or an international arbitral award made in Australia, or has refused to do so, then its judgment can be appealed under the ordinary rules of appeal against the court's judgment. This is essentially that there needs to be appealable errors of law in the judgment from which the appeal is made.
There is no appeal to any court against an international arbitration award made in Australia or a foreign award recognition and enforcement that is sought in Australia.
Ex parte or on notice. An appeal must be on notice to the affected party.
Applicable court. Depending on whether the enforcement order (or refusal to enforce) was made in the Federal Court of Australia (FCA) or a State Supreme Court, the appeal lies either in the Full Federal Court of Australia (FFCA) or the Court of Appeal of a State Supreme Court (in New South Wales the New South Wales Court of Appeal).
Limitation period. The limitation period for enforcing an international award is six years in New South Wales (section 20, New South Wales Limitation Act 1969). Similar periods apply in other States.
Timing. This depends on the rules of the relevant court but usually must be within 28 days, although sometimes extensions can be obtained in certain circumstances.
Court fees. As with other court fees, the fees vary from court to court and on whether the appellant is an individual corporation, but generally for an appeal they range between AU$3,000 to AU$7,500.
Recourse. This is only possible under Article 34 of the Model Law for international awards, but this will not apply to the enforcement of foreign awards, which can only be challenged at the enforcement step under the limited grounds in sections 8(5), (7) and (7A) of the Commonwealth International Arbitration Act 1974.
The courts do not have the power to generally review foreign arbitral awards except to the very limited extent set out in the Commonwealth International Arbitration Act 1974 in relation to challenging enforcement where there is a high burden of proof on the applicant requesting that the court refuses to enforce the foreign arbitral award.
The documentary requirements of recognition and enforcement of the foreign arbitral award depends to a slight extent on whether the application for recognition and enforcement is brought in the Federal Court of Australia (FCA) or one of the State Supreme Courts. Parties do not need to appoint a lawyer under a power of attorney. A party needs an actual lawyer if it is a corporation but an individual applicant can be self-represented. The employment of the lawyer is an informal process and the relevant applications for the recognition and enforcement must be supported by an affidavit setting out compliance with the relevant facts and annexing copies of the relevant documents including the foreign award and a certified copy of the arbitration agreement. There is no need to provide an original of the award although a court will not refuse to look at the original.
The foreign award must be authenticated by the arbitral body to the appointed tribunal or by a representative tribunal and the arbitral agreement is normally sufficient for it to be authenticated by a representative of the parties seeking to enforce the award.
The application must set out the:
Details of the parties.
Parts of the foreign award that are the subject to the application for recognition and enforcement.
Amount originally owing.
Evidence that the court in which the application is brought is the appropriate court.
Evidence of the entitlement of the award credited to be able to enforce the award.
Evidence that the award is enforceable.
The non-applicability of the exceptions to enforcement under section 8 of the Commonwealth International Arbitration Act 1974.
If interest is payable for an arbitral award, details of the applicable interest must be set out including the:
Rate of interest.
Amount of interest that has become due.
Daily amount of interest that is accruing.
If the Tribunal awarded costs then details of those costs should be set out.
Claim as awarded
See above Award.
Facts and legal grounds
See above Award.
It is prudent, although not necessary, to state that the award has not been appealed or an application made to set aside is in the place where the award was made. If the period for any appeal or setting aside has passed then that should be stated, but is not generally necessary to state that any period for appeal or setting aside has passed, as in some jurisdictions those periods can be very lengthy and can even be years and it is not the role of the enforcing court to enquire on the possibility (theoretical or otherwise) of an appeal or setting aside an application against the foreign award.
The award creditor can ask the enforcing court to make orders for provisional security for the amount of the award debt or other measures of injunctive nature but whether the court makes such orders depends on the facts and the circumstances of the case and the court exercises its discretion in the usual way. However, if the judgment creditor brings evidence that the judgment debtor has assets in Australia and evidence that those assets may be dissipated if interim security created by an interim attachment of the assets is not ordered by the court, then the court is more likely than not to make the orders providing interim attachment of the relevant assets. This is pending the determination of the recognition of an enforcement of an international arbitral award whether it is a foreign or an Australian award.
The court can order a stay of the enforcement proceedings under section 7(2) of the Commonwealth International Arbitration Act 1974 (IAA) on such terms and conditions including security as it sees fit in relation to any property that is the subject of the matter to which the award relates (section 8(8), IAA).
Once a declaration of enforceability is granted by the enforcement court (an order recognising the award), the award becomes a judgment of the enforcing court and the usual enforcement measures are as for the enforcement of a judgment (see Enforcement of judgments in Australia, Question 16). These include:
Writs of possession of property.
Garnishee and charging orders.
Delivery of goods.
Ultimately commencement of bankruptcy proceedings against an individual or winding up proceedings against a corporation.
Defendants can oppose the actual enforcement procedure, but only in very limited circumstances (see Question 17).
Proposals for reform
The Australian Commonwealth Parliament recently passed legislation amending the Commonwealth International Arbitration Act 1974 (IAA) as follows:
To make non-UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention) awards enforceable under the IAA (there are only a very small number of countries that are not parties to the New York Convention).
An award debtor can resist enforcement under section 8(5)(a) of the IAA on the basis of the incapacity of any party to the arbitration agreement not just the incapacity of the award debtor itself as is the current position.
To reverse the confidentiality regime under the IAA that is suitable to apply unless the parties agree otherwise (opt-out).
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Derek Luxford, Partner
Professional qualifications. New South Wales, Solicitor, 1976
Areas of practice. Transport; trade; energy.
- Acting for Lloyds Underwriters in a marine cargo policy coverage dispute concerning the hijacking of valuable cargo on a vessel in Indonesia.
- Advising an Australian commodity trader in a marine cargo policy coverage dispute arising out of missing consignments of ingots shipped from Indonesia to Australia and advising the client on recovery prospects.
- Acting for an Australian commodity trader in an international commodity arbitration in Sydney and subsequently enforcing the arbitral award in India.
- Acting for Singapore based ship owners whose vessels were arrested in Australia in relation to maritime liens and obtaining the release of the vessels from arrest.
Languages. English, German (conversational)
Professional associations/memberships. Maritime Law Association of Australia and New Zealand; Average Adjusters Association; London Maritime Arbitrators Association supporting member; Sydney Marine Discussion Group; Institute of Chartered Shipbrokers; Chartered Institute for Logistics and Transport.
- The Australian chapter of "Enforcement of Judgments, Awards and Deeds in Commercial Matters", Thomson Reuters, December 2012.
- The Australian chapter of "International Cargo Insurance" Informa, December 2012.
- The Australian chapter of "Getting the deal through: Shipping 2016" to be published in September 2015.
- Numerous articles over several decades on shipping, trade and commercial dispute resolution in publications such as "Lloyds List Australia" and "Maritime Risk International" and the IBA Maritime and Transport Committee Newsletter.