Enforcement of international arbitration awards in Australia

8 February 2012

The Federal Court has confirmed its jurisdiction to hear applications for the enforcement of arbitral awards made under the International Arbitration Act 1974 (Cth) (the Act), in the case of Castel Electronics Pty Ltd v TCL Air Conditioner (Zhongshan) Co Ltd [2012] FCA 21.

The Act incorporates the UNCITRAL Model Law on Arbitration, which has the force of law in Australia. The relevant article of the Model Law refers to the enforcement of an arbitral award upon application to the “competent court”, but neither the Model Law, nor the Act, specifies what will be a “competent court” to enforce a non-foreign award (that is, an award under a Model Law arbitration that is held in Australia). Murphy J instead concluded, based on the Federal Court’s general jurisdiction under the Judiciary Act 1903 (Cth), that the Federal Court does have jurisdiction to enforce such arbitral awards.

While it did not affect his Honour’s finding in relation to the Federal Court’s jurisdiction, Murphy J also concluded that the Act “covers the field” in relation to international arbitrations, as a result of provisions in most State and Territory Commercial Arbitration Acts which make it clear that they only apply to “domestic commercial arbitration”, where both parties have their place of business in Australia.

In his Honour’s concluding remarks, Murphy J quoted and agreed with extra-judicial comments given by Justice Rares, which expressed frustration with a situation in which parties “have to sift through a legislative morass and apply constitutional law principles to find a court in which to enforce an award.”

The full decision can be viewed in full here.