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enforcement_of_an_arbitration_clause

Enforcement of an Arbitration Clause

  • An agreement to arbitrate is in most cases enforceable. Please see the cases below for more information.

Legislation

Cases

2017

2016

    • This proceeding involves the determination of a matter, whether the Condition Precedent in cl 2.1 of the Deed was satisfied and whether the Deed has terminated, that, in pursuance of the agreement in cl 8.4(b) of the Deed, is capable of settlement by arbitration. The proceeding must be stayed and the parties referred to arbitration.

2015

2014

2013

2012

2011

    • Our Mr White was the arbitrator in this matter.
    • Commercial Arbitration Act 2010 (NSW), ss 35 and 36 - Award by arbitrator declaring a constructive trust, ordering specific performance of a Licencing Agreement and requiring the defendant to take steps - recognition and enforcement opposed on the basis that part of the Award dealt with the dispute not contemplated by or falling within the terms of arbitration and that recognition and enforcement of parts of the Award would be contrary to the public policy of this State - orders for recognition and enforcement made
    • Our Mr White was the arbitrator in this matter.
    • Corporations Act 2001 (Cth), s440D - an application for leave to bring and continue proceedings against a company in voluntary administration for recognition and enforcement of an arbitral award pursuant to Commercial Arbitration Act 2010 (NSW) s 35 - nature of discretion to be exercised - relevant circumstances - leave granted
    • There was no material before the Court which satisfies it that the rules provided for in the arbitration clause formed part of the laws of Sweden (a convention country)
    • The Court found that taken together the following amount to a sufficient reason why the matter should not be referred to arbitration in accordance with the agreement.
      • the proceedings under the Trade Practices Act may not be susceptible of determination in Sweden under Swedish law and are better dealt with in Australia by courts well familiar with the statutory (and common law) concepts of unconscionability;
      • the proceedings have a strong connection with Australia where, no doubt, most of the relevant witnesses are and where all the relevant conduct occurred;
      • the arbitration is now time-barred;
      • the plaintiff has foreshadowed that there are other persons who could be joined to the proceedings who are not party to the arbitration agreement and who, therefore, could not be party to the arbitration, though none have yet been joined.
    • Our Mr White was the arbitrator in this matter.
    • Commercial Arbitration Act 2010 (NSW) s 16(9) - jurisdiction of arbitrator to determine dispute concerning patents and patent applications - Contract - construction - meaning of term “dispute” in an arbitration clause - whether issues raised are purely hypothetical
    • This is an application by the defendant, Origin, for the stay of these proceedings under s 8 of the Commercial Arbitration Act 2010 (the CA Act 2010)
    • Origin's motion filed on 17 February 2011 should be dismissed with costs

2010

AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC

    • Lord Collins cites from the DTI Departmental Advisory Committee in its February 1994 report on a draft Arbitration Bill (the “Saville Report”), records the statutory position now accomplished (principally by sections 30, 32 and 67), and continues:
      • The consistent practice of the courts in England has been that they will examine or re-examine for themselves the jurisdiction of arbitrators.
      • This can arise in a variety of contexts, including a challenge to the tribunal's jurisdiction under section 67 of the 1996 Act, or in an application to stay judicial proceedings on the ground that the parties have agreed to arbitrate.
      • Thus in Azov Shipping Co v Baltic Shipping Co 32) Rix J decided that where there was a substantial issue of fact as to whether a party had entered into an arbitration agreement, then even if there had already been a full hearing before the arbitrator the court, on a challenge under section 67, should not be in a worse position than the arbitrator for the purpose of determining challenge.
      • This decision has been consistently applied at first instance 33) and is plainly right
      • Where there is an application to stay proceedings under section 9 of the 1996 Act, both in international and domestic cases, the court will examine the issue of whether there ever was an agreement to arbitrate34).
      • So also where an injunction was refused restraining an arbitrator from ruling on his own jurisdiction in Geneva arbitration, the Court of Appeal recognised that the arbitrator could consider the question of his own jurisdiction, but that would only be a first step in determining that question, whether the subsequent steps took place in Switzerland or England35)
    • This analysis, in my respectful opinion, usefully underscores the wider picture about the autonomy of the parties and the jurisdiction of arbitrators with power to investigate their own jurisdiction
    • …namely that, sooner or later, the question of substantive jurisdiction is likely to come before the court.
    • Where parties differ as to a matter as fundamental as whether they have agreed any contract, or any contract containing an arbitration clause, it is most unlikely that one or other of them will rest content with the decision of arbitrators as to either their jurisdiction or as to the parties' rights.
    • For one or other party is saying that there is simply no agreement that arbitrators can resolve their disputes.
    • In such circumstances, the issue of jurisdiction is likely to come before the courts sooner or later, and when it does, it will have to be decided by the court from first principles and in the light of facts which, whatever the investigation by the arbitrators, are yet to be determined on the evidence by the court.
    • That is the learning of Azov Shipping, approved by the Supreme Court in Dallah, where I said this:
      • This was perhaps a case where the parties might well have come to Court, either by agreement or upon the application by one side or the other for the Court to determine the issues of jurisdiction, on the ground that it was likely to produce substantial savings in cost and that there was good reason why the matter should be decided by the Court.
      • With hindsight it seems to me that even if the parties could not agree on that course, the Court would be persuaded to allow such a determination if, of course, the tribunal had given its own permission, which is a sine qua non in the absence of the agreement of the parties.
      • It might be assumed that the arbitrator may have been the more willing to give his agreement inasmuch as the question of jurisdiction in this case involved the prior question of whether Azov had ever become a party to the agreement as a whole…
      • I can quite see that there is an interest in encouraging parties to put their arguments on jurisdiction before the arbitrator himself under s30.
      • In many cases, and perhaps in the ordinary and normal case of such a challenge, where, for instance, there is simply an issue as to the width of an arbitration clause and no issue as to whether a party is bound to the relevant contract in the first place, the arbitrator's view may be accepted.
      • If it is not, a challenge to the court is likely to be a limited affair raising, essentially, a point of construction on the clause and thus no problem arises.
      • Where, however, there are substantial issues of fact as to whether a party has made the relevant agreement in the first place, then it seems to me that, even if there has been a full hearing before the arbitrators the Court, upon a challenge under s. 67, should not be placed in a worse position than the arbitrator for the purpose of determining that challenge…“
    • Thus, a question of jurisdiction may come before the court in a number of different situations.
    • It might arise where one party goes to court with a claim and the defendant seeks a stay for arbitration: the claimant may say there is no contract or no arbitration agreement, and the court will have to investigate that question for the purpose of dealing with the application to stay.
    • Or a party may commence an arbitration, and the other party may say there is no agreement or no agreement to arbitrate, in which case the matter is prima facie for the arbitrators to decide in the first instance pursuant to section 30.
    • In a plain case, the arbitrators may proceed to determine their own jurisdiction, but equally the parties may agree to come straight to court to determine the question, or the arbitrators may give permission for the issue to be taken to court and the court may agree to accept the issue at that stage.
    • Or the respondent in the arbitration may stand aloof, and come to court under section 72, or, following an award, under section 67.
    • Or, a party may start proceedings in another country and the defendant there then comes to the English court to ask it to uphold their arbitration agreement by granting an anti-suit injunction.
    • That is the equivalent of a party seeking a stay where an action is begun in England.
    • Where the action in breach or alleged breach of an arbitration agreement is begun in a foreign country, the respondent may or may not seek a stay there, but here he may ask for an anti-suit injunction.
    • There are further variations thrown up by the cases.
    • In some cases, it is reasonably plain that an arbitration agreement has been made, but there may be an issue as to its scope, or as to whether there has been a repudiation of it, or, as here, as to its surviving effectiveness.
    • In other cases, there is a factual dispute as to whether any agreement has ever been made in the first place, or a legal dispute as to whether an arbitration clause has been incorporated into the parties' contract.
    • Moreover in some cases, what is sought from the court is an interim injunction, which is among the subject-matters of section 44, and in other cases what is sought is a final injunction, which is not within section 44 but, subject to contrary agreement by the parties, may be within the powers of an arbitral tribunal in a final award 36).
    • Moreover, a distinction may have to be made between a declaration as to the existence or effectiveness of an arbitration agreement about which parties are in dispute, which is a form of final relief as to the parties' legal rights, and an anti-suit injunction which, at any rate in its interim form, is only intended to hold the ring until some tribunal, whether it is the court itself at some later date, or an arbitral tribunal, can grapple with the merits of the parties' dispute.

Oakton Services Pty Ltd v Tenix Solutions IMES Pty Ltd

2009

    • The scope of a referral to arbitration depends upon the proper construction of the relevant arbitration clause.
    • ..[an arbitration] clause is to be read liberally as required by the common law of Australia 42)
    • So reading the clause, it can be seen to require the totality of likely disputes between the parties to be dealt with by the clause.
    • No evidence is needed to appreciate that an engineering contract for the designing and building of new rolling stock for Railcorp could lead to complex disputes, which, if litigated, could be productive of very large legal and associated forensic costs.
    • As said in Comandate
      • An ordered efficient dispute resolution mechanism leading to an enforceable award or judgment by the adjudicator, is an essential underpinning of commerce.
      • Disputes arising from commercial bargains are unavoidable.
      • They are part of the activity of commerce itself.
      • Parties therefore often deal with the possibility of their occurrence in advance by the terms of their bargain.
    • all and any disputes shall be referred to and subject to arbitration in London before a tribunal of three arbitrators
    • Applied the principles set out Fiona Trust v Privalov 44) and concluded that the Arbitral Tribunal had jurisdiction.
    • The case also involved the enforcement of a peremptory order.
    • The order was granted together with a freezing order.

2008

  • Ace Capital Ltd v CMS Energy Corporation45)
    • The owners have commenced court proceedings for a declaration that the charters have been validly rescinded and the charterers have applied for a stay under section 9 of the Arbitration Act 1996
    • The parties have entered into a relationship, an agreement or what is alleged to be an agreement or what appears on its face to be an agreement, which may give rise to disputes.
    • They want those disputes decided by a tribunal which they have chosen, commonly on the grounds of such matters as its neutrality, expertise and privacy, the availability of legal services at the seat of the arbitration and the unobtrusive efficiency of its supervisory law.
    • Particularly in the case of international contracts, they want a quick and efficient adjudication and do not want to take the risks of delay and, in too many cases, partiality, in proceedings before a national jurisdiction.
    • In my opinion the construction of an arbitration clause should start from the assumption that the parties, as rational businessmen, are likely to have intended any dispute arising out of the relationship into which they have entered or purported to enter to be decided by the same tribunal.
    • The clause should be construed in accordance with this presumption unless the language makes it clear that certain questions were intended to be excluded from the arbitrator's jurisdiction. 48)
    • As Longmore LJ remarked, 49)
      • if any businessman did want to exclude disputes about the validity of a contract, it would be comparatively easy to say so.
    • If one adopts this approach, the language of clause 41 of Shelltime4 Dispute Clause contains nothing to exclude disputes about the validity of the contract, whether on the grounds that it was procured by fraud, bribery, misrepresentation or anything else.
    • In my opinion it therefore applies to the present dispute.
    • where a party to an arbitration agreement makes the same claim against both the other party to the arbitration agreement and a person who is not a party to the arbitration agreement – with the result that, so far as it involves the latter, the dispute cannot be referred to arbitration – it will generally be equally difficult to ascribe to the parties to the arbitration agreement an intention that in such an event the dispute should be fragmented and that the liability of the party to the arbitration agreement and that of the third party respectively should be determined in different forums

2006

  • HMI Casualty & General Insurance Limited (in liq) v RJ Wallace & Ors 51)
    • Option to arbitrate or litigate
    • King v Brandywine Reinsurance Co (UK) Ltd52)
    • Commercial Union Assurance Co Pk v NRG Victory Reinsurance Limited53)
    • BP plc v National Union Fire insurance Co54)
    • EI Du Point de Nemours & Co v IC Agnew55)
    • These commercial parties freely entered a bargain to resolve their disputes in London according to English law.
    • No one forced Pan to do so.
    • Through its broker, it entered the international market for the time chartering of vessels.
    • It negotiated hire and terms on the foundation of a dispute resolution clause in clause 45(b).
    • If it had wanted to maintain any rights by reference to Australian law governing its relationship, it could have bargained for them.
    • It did not.
    • There is no provision of the Trade Practices Act that says the parties cannot enter a clause such as clause 45(b).
    • There are powerful discretionary reasons why an arbitration agreement should be enforced, even if the contractually chosen venue and law give rights not entirely the same as would arise under one party’s domestic law and in one party’s domestic courts57)
    • If Australian commercial parties desire Australian dispute resolution clauses they should bargain for them

2004

2002

    • I accept, as well, that public policy considerations operate against referring to arbitration a determination to wind up a company on the grounds upon which a court may order that a company be wound up.
    • However, I would not regard these public policy considerations as preventing parties to a dispute from referring questions to arbitration merely because those questions arise under the Corporations Act.
    • I see nothing special about the Corporations Act that would distinguish it, as a whole, from other legislation such as the Trade Practices Act.
    • This seems to be the position reached by United States courts 61)
    • The statutory powers of a Court under the Corporations Act are, generally speaking, comparable to the powers exercised by a court under the general law (the power to make a winding up order being an exception to this proposition). They are generally not special powers to be exercised having regard to specialist public interest criteria.
    • Specifically, the public policy considerations held by Warren J62)63)to be applicable to a disputed claim to wind up a company do not seem to me to prevent the parties from referring to arbitration a claim for some merely inter partes relief under the oppression provisions of the Corporations Act, or for access to corporate information under s 247A.
    • However, the “in rem” nature of an order for rectification of the share register of a company may prevent reference of that power to an arbitrator.”

2001

2000

1998

1996

1991

  • IBM Australia Ltd v National Distribution Services Ltd71)
    • From the foregoing trend of authority, both in Australian and overseas courts, it can be seen that an arbitration clause, expressed in the language of the clause here under consideration, is not to be narrowly construed.
    • It is sufficiently wide to include claims for rectification and for relief on the grounds of misrepresentation or mistake ….
    • Whilst it is true that the conduct complained of as being in breach of the Trade Practices Act (Cth) is alone sufficient to enliven the provisions of that Act and whilst such provisions do not depend upon the agreement of the parties, such considerations do not determine the simple question posed.
    • That question is whether the misrepresentations alleged are `related to this agreement or the breach thereof'.
    • It is enough to say that, in this case, it was open to Rogers CJ Comm Div to determine that the relationship was made out on the pleadings

1990

    • In the context of s 7(2), the expression ‘matter … capable of settlement by arbitration’ may, but does not necessarily, mean the whole matter in controversy in the court proceedings.
    • So too, it may, but does not necessarily encompass all the claims within the scope of the controversy in the court proceedings.
    • Even so, the expression ‘matter … capable of settlement by arbitration’ indicates something more than a mere issue which might fall for decision in the court proceedings or might fall for decision in arbitral proceedings if they were instituted 73).
    • It requires that there be some subject matter, some right or liability in controversy which, if not co-extensive with the subject matter in controversy in the court proceedings, is at least susceptible of settlement as a discrete controversy.

1986

  • AT & T Technologies Inc v Communications Workers of America, 475 US 643 (1986), 650, the United States Supreme Court said that, in the absence of any express provision excluding a particular grievance from arbitration, only the most forceful evidence of a purpose to exclude the claim from arbitration could prevail.

1985

1979

  • Flakt Australia Ltd v Wilkens & Davies Construction Co Ltd75)
    • In my opinion, the word ‘matter’ in s 7(2)(b) denotes any claim for relief of a kind proper for determination in a court.
    • It does not include every issue which would, or might, arise for decision in the course of the determination of such a claim.

1950

    • But the courts begin with the fact that there is a special contract between the parties to refer, and therefore
      • consider the circumstances of a case with a strong bias in favour of maintaining the special bargain77) and
      • a guiding principle on one side and a very natural and proper one, is that parties who have made a contract should keep it.78)
1) [2015] WASC 458
2) [2015] NSWSC 451
3) [2014] NSWSC 1790
4) [2014] VSC 647
5) [2014] NSWSC 1403
6) [2014] VSCA 264
7) [2014] WASC 10
8) [2013] VSCA 381
9) [2013] VSC 550
10) [2013] QSC 105
11) [2013] UKSC 35
12) [2012] EWHC 3205 (TCC)
13) [2012] WASC 492
14) [2012] WASC 228
15) [2012] FCA 696
16) [2012] FCA 691
17) 2012 SCC 9
18) [2012] EWCA Civ 14
19) 06-1871-cv
20) C09-1392JLR
21) [2011] EWHC 308 (Comm)
22) [2012] VSC 98
23) [2011] NSWSC 1451
24) [2011] NSWSC 1331
25) [2011] NSWSC 1305
26) [2012] SASC 50
27) [2011] EWHC 2251 (Comm)
28) [2011] ACTSC 59
29) [2011] NSWSC 268
30) [2011] NSWSC 195
31) [2011] EWCA Civ 647
32) [1999] 1 All ER 476
33) see, eg, Peterson Farms Inc v C & M Farming Ltd [2004] 1 Lloyd's Rep 603
34) see Al-Naimi (trading as Buildmaster Construction Services) v Islamic Press agency Inc [2000] 1 Lloyd's Rep 522 (Court of Appeal: English arbitration) and Albon (trading as NA Carriage Co) v Naza Trading Sdn Bhd (No 4) [2008] 1 Lloyd's Rep 1 (Malaysian arbitration
35) see Weissfisch v Julius [2006] 1 Lloyd's Rep 716, para 32
36) see section 48 of the AA 1996
37) Our Steve White did all the preparatory arbitration work for Tenix Solutions IMES Pty Ltd for over 12 months including running the dispute process the subject of this reported decision.
38) [2010] VSC 176
39) [2009] SGHC 13
40) [2009] VSC 553
41) (2009) 74 NSWLR 618
42) Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160 at 165-166 (Gleeson CJ with whom Meagher JA and Sheller JA agreed) and Comandate Marine Corporation v Pan Australia Shipping Pty Ltd [2006] FCAFC 192; 157 FCR 45 at 87-93 [162]- [187] (Allsop J with whom Finn J and Finkelstein J agreed).
See also the law of international commerce: Fiona Trust & Holding Corporation v Privalov [2007] UKHL 40; [2008] 1 Lloyd’s Rep 254 (see [31] for the phrase “law of international commerce”) and Threlkeld & Co Inc v Metallgesellschaft Limited (London) [1991] USCA2 61; 923 F 2d 245 (2nd Cir. 1991).
43) [2009] EWHC 1 (Comm)
44) [2008] 1 Lloyd's Rep. 254
45) [2008] EWHC 1843
46) [2008] FCAFC 169
47) [2007] UKHL 40; [2008] 1 Lloyd's Rep 254
48) Cited with approval Emmott v Michael Wilson & Partners Ltd [2009] EWHC 1 (Comm)
49) at para 17
50) [2008] WASCA 110 at [43]
51) (2006) 204 FLR 297
52) [2004] 2 Lloyd's Rep 670
53) [1998] 1 Lloyd's Rep 80
54) [2004] EWHC 1132
55) [1987] 2 Lloyd's Rep 585
56) [2006] FCAFC 192
57) see Wealands v CLC Contractors and Key Scaffolding Ltd [1999] 2 Lloyd’s Rep 739 at 747-48 and Société Commerciale de Reassurance v Eras International Ltd [1992] 1 Lloyd’s Rep 570 at 610-11.
58) [2006] VSC 175 (at [87])
59) [2004] FCA 706 at [6]
60) [2002] NSWSC 896
61) see Dean Witter Reynolds Inc v Byrd [1985] USSC 44; 470 US 213 (1985); Shearson Lehman Hutton Inc v Wagoner 944 F 2d 114 (2nd Cir 1991); also Pick v Discover Financial Services Inc 2001 No.Civ.A 00-935-SLR (D) Del Sept 28, 2001
63) A Best Floor Sanding Party Ltd
64) [2001] FCA 74
65) (2000) 52 NSWLR 1 (at 21; [63])
66) (1998) 90 FCR 1
67) ([1998] FCA 1485
68) [1998] FCA 558
69) [1996] FCA 1059
70) (1996) 39 NSWLR 160
71) (1991) 22 NSWLR 466
72) (1990) 169 CLR 332 (at 350)
73) Flakt [1979] 2 N.S.W.L.R., at p 250
74) [1985] FCA 369
75) [1979] 2 NSWLR 243 (at 245, 250)
76) [1950] HCA 43
77) in the language of Lord Moulton in Bristol Corporation v John Hard & Co
78) Scrutton LJ said in Metropolitan Tunnel and Public Works Ltd v London Electric Railway Co

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