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Federal Court of Australia adopts pro-arbitration approach to enforce Foreign Award.
Introduction: Under the regime of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, a recent judgement of the Federal Court of Australia confirms the Australian courts' pro-enforcement stance to foreign arbitral awards. The Federal Court used the New York Convention framework in an expedient way in Neptune Wellness Solutions, Inc v Azpa Pharmaceuticals Pty Ltd [2021] FCA 676, which fits with best practise in UNCITRAL Model Law nations and indicates the Australian courts' support for arbitration.
Facts: Neptune Wellness Solutions, Inc (Neptune) and Azpa Pharmaceuticals Pty Ltd and Azpa Pty Ltd (collectively, the Azpa Parties) signed an arbitration agreement in December 2011 as part of a distributorship arrangement. Azpa Pty Ltd was the sole distributor of Neptune Krill Oil in Australia and New Zealand under the distributorship agreement. “If the distributor is the defendant,” the arbitration agreement said, “an arbitration in Quebec pursuant to Canadian legislation will be held.”
A disagreement occurred between the parties, and arbitration procedures were initiated in August 2014 under the arbitration agreement, with the Azpa Parties as respondents. The parties took part in the arbitral procedure actively, were represented by lawyers, and provided written and oral evidence. In February 2021, the arbitrator rendered an award in Neptune's favour, including pre-award interest and an amount to cover Neptune's costs.
The Azpa Parties had not paid their share of the award. Neptune filed a petition in the Federal Court of Australia, requesting a declaration that it has the right to enforce the award as if it were a Federal Court decision. The original procedure was served on the Azpa Parties at their registered offices in Melbourne, but they did not reply or attend. Despite the Azpa Parties' refusal to present, Neptune sought orders on the application.
Decision and Analysis: Colvin J observed that Australia is a contracting state under the New York Convention and that the International Arbitration Act 1974 (Cth) gives effect to the Convention's requirements (International Arbitration Act). The International Arbitration Act provides that an arbitral award governed by the New York Convention is binding on the parties and can be enforced by Australian courts as if it were a judgement or order of an Australian court. The award was made in Montreal, Canada, therefore Canada is likewise a New York Convention contracting state, according to the Judge. As a result, the award qualified as a foreign award under the International Arbitration Act.
Neptune was entitled to have the award recognised and enforced in Australia since proof of the arbitration agreement and award was supplied in line with section 9 of the International Arbitration Act. The amount of the award, pre-award interest, and Neptune's arbitration expenses were all entered into judgement in favour of Neptune by the Judge. The court further directed the Azpa Parties to pay Neptune's enforcement application fees and expenses.
Conclusion: This case demonstrates that Australian courts execute arbitral decisions in a timely and cost-effective way. Despite the absence of the Azpa Parties, the judge held that Neptune had the right to have the award recognised and enforced against them. It is important to remember that failure or unwillingness to attend enforcement proceedings before Australian courts would not prevent an award from being enforced.
Links Referred:
https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2021/2021fca0676
https://freehills169.rssing.com/chan-67856860/latest.php
(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 Foundation shall not be responsible for any errors caused due to human error or otherwise.)
- Facts
- Decision and Analysis
- Conclusion
