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Proper notification in the enforcement of foreign arbitral awards

Proper notification in the enforcement of foreign arbitral awards

 

The Federal Court of Australia refused to enforce a foreign arbitration award against a defendant (one of four) who claimed he was entirely unaware of the arbitration proceedings in China on May 11, 2021. The court decided that the individual defendant had not been provided proper notice of arbitration and, as a result, the award could not be enforced against her. The court's ruling emphasises the importance of appropriate information in enforcing foreign arbitral awards in Australia and warns parties seeking to enforce foreign arbitral awards in Australia to ensure that the arbitration defendant is properly notified in any way possible.

 

When trying to enforce a foreign arbitration ruling, please confirm with the applicant what actions were taken at the outset to ensure that the respondent was served with notice of the proceedings. The foreign arbitration tribunal's satisfaction with the service of the notice is insufficient because the Australian courts will decide whether the notice is proper. This is especially true in some jurisdictions (such as China, where arbitral courts are required to give notices to the affected parties without transferring responsibility to the applicant under the China International Economic and Trade Arbitration Commission (CIETAC)). Even if the applicant is not accountable for the unsuccessful service, the applicant may face repercussions. Even if the contract contains new information that may indicate that the data is no longer accurate, the applicant should take steps to comply with the contract's service and notification responsibilities.

 

BACKGROUND

In the case of Beijing Cornerstone Venture Capital Fund (Limited Partnership) v. Liu Yi, the Chinese applicant sought to enforce the CIETAC arbitration award against the four defendants using the International Arbitration Act of 1974 (United States Federal) and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (commonly known as the New York Convention). Unfortunately, the arbitral tribunal's notice was mislabeled and could not be properly served in Australia. The applicant later offered other alternate service addresses, which the Chinese arbitration tribunal accepted.

The courts in Australia will not recognise delivery services to other addresses (including, most notably, company addresses in China) as valid, nor will they accept that the husband's notice of service is sufficient to be judged to have properly notified the wife. The court also agreed with the wife's assertion that the right to service is a "personal right," finding no "technical or procedural failing" and that good service is a "basic need for the integrity of arbitration." As a result, the court declined to rule on the wife's lawsuit enforcement.

 

NEXT STEP

Stakeholders are closely following the case of Energy City Qatar Holding Company v. Hub Street Equipment Pty Ltd, which has been appealed from the Federal Court and is currently awaiting judgements from all federal courts. In addition to other difficulties, the Energy City case addressed similar concerns about appropriate notification and natural justice violations. Applicants are encouraged to evaluate any judgements carefully they intend to enforce and what procedures to take to ensure proper communication before the federal courts issue a judgement.

 

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre shall not be responsible for any errors caused due to human error or otherwise.

  • Proper notification in the enforcement of foreign arbitral awards
  • Background
  • Next step

BY : Aakrashi Jain

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