Proper notice: s 8(5)(c) of the IAA
27 At a general level, the proper notice requirement in s 8(5)(c) of the IAA will be satisfied if the party was given a reasonable opportunity, in all the circumstances, to present its case: Liaoing Zhongwang Group Co Ltd v Alfield Group Pty Ltd [2017] FCA 1223 ('Liaoing Zhongwang') at [98] (Gleeson J); Gujarat NRE Coke Limited v Coeclerici Asia (Pte) Ltd (2013) 304 ALR 368; [2013] FCAFC 109 at [3] (Allsop CJ, Besanko and Middleton JJ). In determining whether this has been done, the enforcing court should have regard to the adequacy of the form of notice, as well as the method and timing of its delivery.
28 In International Relief and Development Inc v Ladu [2014] FCA 887 ('Ladu'), Kenny J held that where actual notice is given of the appointment of the arbitration and the appointment of arbitrators, then no question as to the further ambit of proper notice under s 8(5)(c) of the IAA arises: at [172]. I respectfully agree, subject to questions as to the form and timing of the notice.
29 In LKT Industrial Berhad (Malaysia) v Chun [2004] NSWSC 820, McDougall J considered an objection to enforcement of a foreign award. His Honour found that the award debtor had actual notice of the arbitration but did not accept that this necessarily meant that he had received "proper notice" for the purpose of s 8(5)(c) of the IAA. His Honour held:
[68] Mr Chun's denial of receipt of any of those documents is implausible… I think the probabilities are that those documents were (or a majority of them was) brought to his attention. That does not mean that he had proper notice of the arbitration. But, coupled with my findings in respect of the ICA's letter, it means that Mr Chun, had he taken the trouble to read the documents, must have appreciated that LKT was proceeding with the arbitration of its dispute.
[…]
[73] I think it likely, on balance, that at least some of the faxes sent to Mr Chun's Hong Kong residential fax number were received there. I think it likely that at least some of those faxes came to his attention. Again, this does not mean that he had proper notice of the arbitration proceedings. It does however mean, as I have said in para [68] above, that he must have been aware that LKT was prosecuting those proceedings.
[…]
[74] I find that Mr Chun was given notice of the arbitration proceedings against him. Although he was misnamed in the letter and notice (and other correspondence) that he received, I find that he would have understood the documents that he received as relating to him, and that they identified him as a party to the arbitration proceedings.
[75] Mr Chun did not seek to make a case that, notwithstanding the notifications to which I have referred, he was unable to present a case in the arbitration proceedings. That is not a criticism: any such evidence would have been entirely inconsistent with his principal ground of defence. It means, however, that since I have found that the principal ground of defence fails, there is no reason for finding that he was unable to present a case in the arbitration proceedings.
30 The enforcing court must look at all the circumstances (with due regard to the bargain that has been struck between the parties) to objectively determine whether proper notice of the arbitration and appointment of arbitrators has been given. It is my view that, in circumstances where businesspersons have entered into an agreement to submit to international commercial arbitration, the question of what is "proper" will take into account what the parties have agreed where such agreement relevantly covers the issue of notification of the arbitration and appointment of arbitrators.
31 In this proceeding, an issue has arisen as to whether the proper notice question should be determined under the law governing the arbitration (or the agreement). In Uganda Telecom Limited v Hi-Tech Telecom Pty Ltd (2011) 277 ALR 415; [2011] FCA 131 ('Uganda Telecom'), Foster J found that the parties' arbitration agreement did not apply as the formal communications concerning the arbitration were not made "under" or "according to" the agreement: at [114]. His Honour then applied Ugandan law, which was both the governing law of the agreement and the domestic arbitration in Uganda, to determine that the award debtor had been given proper notice of the arbitration: at [115]-[118].
32 In Ladu, after finding that the award debtor had received actual notice, Kenny J nonetheless considered whether there would have been proper notice in the absence of such actual notice. With reference to Uganda Telecom, her Honour accepted that the relevant contractual notice provision was inapplicable to notice of the appointment of the arbitrator or the arbitration proceeding as it was only directed to the provision of notice under the agreement: at [178]. Her Honour thus went on to consider the potential application of the arbitral rules that were made applicable under the arbitration agreement (at [179]):
Since the notice of the appointment of the arbitrator and of the arbitration proceedings was in the nature of a formal communication concerning the arbitration, I accept that, pursuant to cl 14 of the Employment Agreement…particularly in the absence of actual notice (which was not this case), IRD would have been obliged to give notice of the arbitration proceedings and of the appointment of the arbitrator (and, to the extent relevant, of the arbitration hearing) in accordance with the applicable rules (if any) of the American Arbitration Association. It may be recalled that cl 14 stated that IRD might bring the dispute to arbitration "in accordance with the rules of the American Arbitration Association". Since Mr Ladu bore the civil onus of proof (as he accepted) it was for him to show that IRD had not given notice in accordance with these rules. The rules of the American Arbitration Association were not, however, in evidence before the Court; and Mr Ladu did not seek to elucidate what they relevantly required.
33 In both Uganda Telecom and Ladu, their Honours looked first to any directly applicable contractual provision, and then to the arbitral rules that applied to the conduct of the arbitration. Their Honours both seemed to accept that these matters were at least highly relevant (if not determinative of) the proper notice question.
34 In Energy City Qatar Holding Company v Hub Street Equipment Pty Ltd (No 2) [2020] FCA 116 ('Energy City Qatar v Hub Street'), a decision which has since been appealed to the Full Court of this Court, Jagot J considered the issue of proper notice. Her Honour did not engage in any substantive consideration of the issue of "proper notice".
35 In that case, there was a contractual notice provision that applied to notice "under the Contract": see [8(1)]. Justice Jagot did not expressly consider whether the contractual notice provision applied to formal communications concerning the arbitration but appeared to find (at [10]) that the applicant had not complied with the relevant provision. In considering whether the award debtor had received notice of the appointment of arbitrators, her Honour observed (at [13]):
The Qatari Plenary Court of First Instance made orders in January 2017 appointing an arbitral tribunal. The arbitral tribunal sent to the Chippendale Address, six notices in English about the conduct of the arbitration between 18 April 2017 and 12 July 2017 (with the arbitration being adjourned on three occasions due to Hub's failure to attend). The evidence shows that the letters were sent by pre-paid registered mail and receipts show that each of the notices was sent to the Chippendale Address. Under Art 4 of Law No. 2 of 2017 Promulgating the Civil and Commercial Arbitration Law (Qatar)…which was in force from March 2017 onwards, written notices may be served by service to the addressee's place of business that is known to the parties or specified in the arbitration agreement and is deemed to have been received if it is received or sent before 6.00pm in the country where it is received or otherwise receipt will be deemed to have occurred on the following day.
36 Her Honour later referred again to the relevance of Qatari law (at [55]):
…there was no dispute between the parties that the law of Qatar governs the conduct and validity of the arbitration. Accordingly, the questions whether Hub was given proper notice of the appointment of the arbitrator and whether the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the Contract are subject to the operation of Qatari law. Australian law governs the enforcement of the arbitral award in Australia but that law is to be applied having regard to the fact that Qatar law determines the validity of the arbitration and its conduct.
37 Ultimately, Jagot J found that the award debtor had received actual notice of the constitution of the arbitral tribunal between April and July 2017 "in ample time for Hub to take a role in the arbitration had it wished to do so": [61(5)], and so did not apply Qatari law to determine whether the award debtor had received proper notice of the appointment of arbitrators.
38 As I have said, in considering whether proper notice has been given in the application of s 8(5)(c) of the IAA, the Court, in applying Australian law, looks to the arbitration agreement or any applicable rules interpreted in accordance with the appropriate governing law. However, I do not consider that the question of what constitutes proper notice for the purpose of s 8(5)(c) of the IAA is to be determined solely or determinatively under the law governing the validity of the arbitration and its conduct.
39 This Court is being asked to construe an Australian statute in accordance with established principles of Australian statutory interpretation. Section 8(5)(c) of the IAA, unlike most of the other grounds in sub-s (5), makes no reference to any other system of law. I do not consider the plain language of the statute to support a construction of s 8(5)(c) whereby the function of the enforcing court is limited to determining compliance with the governing law, thereby eschewing Australian standards of what is proper notice.
40 It is important that any approach to construction of s 8(5)(c) of the IAA is consistent with the approaches taken in other jurisdictions that have enacted domestic law to implement the terms of the Convention, subject to any relevant difference between the enacting legislation. In TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd (2014) 232 FCR 361 ('TCL Air Conditioner v Castel'), the Full Court (Allsop CJ, Middleton and Foster JJ) observed (at [75]):
…Contrary to the submission of the appellant, it is not only appropriate, but essential, to pay due regard to the reasoned decisions of other countries where their laws are either based on, or take their content from, international conventions or instruments such as the [Convention] and the Model Law. It is of the first importance to attempt to create or maintain as far as the language employed by Parliament in the IAA permits, a degree of international harmony and concordance of approach to international commercial arbitration….
41 Similarly, in IMC Aviation Solutions, the majority of the Court of Appeal of the Supreme Court of Victoria (Hansen JA and Kyrou AJA) said (at [130]):
…as the Act gives effect to the Convention, decisions of overseas courts on the meaning of provisions of domestic legislation that adopt the wording of the Convention may be of assistance in the interpretation of the Act. Apart from promoting comity, there are obvious advantages in consistency in the interpretation of legislation that gives effect to an international convention. In that regard, however, it will be important to note any relevant differences in the legislation of another jurisdiction.
(Footnotes omitted.)
42 In United States and Canadian courts, the proper notice requirement has been distilled as notice reasonably calculated to inform the respondent of the proceeding and to afford it an opportunity to be heard: see, eg, CEEG (Shanghai) Solar Science & Tech v LUMOS 829 F3d 1201 (10th Cir 2016) at 1203 and Tianjin Huarong Equity Investment Fund Partnership LLP v Xu [2019] ONSC 628 at [31].
43 Essentially the same test has been applied in the United Kingdom. In Zavod Ekran OAO v Magneco Metrel UK Ltd [2017] EWHC 2208 (Comm) at [12]:
"proper notice"…is an aspect of the wider notion that the party contesting enforcement was unable to present its case (Merkin, Arbitration Law, s19.53), so that lack of proper notice suggests some unfairness (Russell on Arbitration, 24th edn, s8-040: and see generally, Minmetals Germany GmbH v Ferco Steel Ltd [1999] 1 AII ER (Comm) 315 at 327; Irvani v Irvani [2000] 1 Lloyd's Rep 412 at 426, Kanoria v Guinness [2006] 1 Lloyd's Rep 701 at [23]). In the context of s 103(2)(c) Arbitration Act 1996, "proper notice" is such as is likely to bring the relevant information to the attention of the person notified, taking account of the parties' contractual dispute resolution mechanism, including any applicable institutional arbitration rules. In this sense, notice is treated by the court as a question of fact (as in LKT Industrial Berhad (Malaysia) v Chun [2004] NSWSC 820), the onus of proof being on the party raising it as a ground of refusal of enforcement of the ward, as expressly specified in s 103(2) Arbitration Act 1996.
44 This approach recognises that the proper notice ground for objection under s 8(5)(c) of the IAA is, in essence, a matter of procedural fairness. In this regard, it is no different from the separate ground in s 8(7)(b) of the IAA, read with sub-s (7A)(b), under which the court may refuse to enforce a foreign award where a breach of the rules of natural justice occurred such that it would be contrary to public policy to do otherwise. There is an obvious link between proper notice and the ability of a party to present its case, involving rules of natural justice and public policy.