Consideration of Issue 1
71 Section 9(1) of the Act obliges an applicant who seeks to enforce a foreign award under s 8 of the Act to produce the duly authenticated original award or a duly certified copy of that award and the original arbitration agreement under which the award "purports" to have been made or a duly certified copy of that agreement. Section 9 substantially reproduces Article IV of the Convention.
72 Subsection (5) of s 9 provides that a document produced to the Court in accordance with s 9(1):
… is, upon mere production, receivable by the court as prima facie evidence of the matters to which it relates.
73 In the present case, a duly certified copy of the Charterparty and a duly certified copy of each of the Awards were produced to the Court in conformity with the requirements of s 9(1).
74 In my view, the production of those documents in the present case constitutes prima facie evidence of:
(a) The fact that each Award was made as it purports to have been made;
(b) The subject matter of each Award; and
(c) The fact that each Award purports to have been made pursuant to cl 32 of the Charterparty. This is so because the Charterparty was the only place suggested either by the Arbitrator or by DKN as the place where the relevant arbitration clause was to be found. That is to say, cl 32 of the Charterparty was the only arbitration agreement relied upon by the Arbitrator and by DKN as the source of the Arbitrator's jurisdiction and power to conduct the arbitration and to make the Awards. These matters necessarily also inevitably imply that Beach Civil was the charterer under the Charterparty. How else could it have been found liable to pay demurrage to DKN?
75 At [46] (pp 730-731) in Altain Khuder LLC, Warren CJ concluded that, in the absence of contrary evidence, the prima facie evidence described in s 9(5) of the Act would take on a stronger complexion and become conclusive evidence of the matters to which it relates. I am not convinced that this dictum is correct and do not propose to apply it in the present case.
76 Beach Civil called no evidence in the proceeding before me. It made no attempt whatsoever to demonstrate by evidence that it was not truly the charterer in the Charterparty. All that Beach Civil did was point to the description of the charterer in the Charterparty and assert that, on the face of that document, it was not named as charterer. That assertion, without more, is not enough to overcome the evidentiary effect provided for in s 9(5) of the Act of the production of a certified copy of the Charterparty and of each of the Awards in the circumstances of this case.
77 It follows, in my judgment, that, subject to Issue 2, in this case, DKN has established to a prima facie level that each of the two Awards is a foreign award within the meaning of that expression in s 8(1) of the Act. Therefore, if Beach Civil is to succeed in resisting enforcement of those Awards, it must make out one of the grounds specified in s 8(5) and s 8(7) of the Act. In order to achieve that result, it is incumbent upon Beach Civil to identify for the benefit of DKN and the Court one or more of those grounds as grounds upon which it intends to rely and then "… prove to the satisfaction of the Court …" one or more of the matters specified in s 8(5) and s 8(7).
78 This approach is supported by the reasoning of Mance LJ (as he then was) (with whom Neuberger and Thorpe LJJ agreed) in Dardana Ltd v Yukos Oil Co [2002] 2 Lloyd's Rep 326 at [10]-[12] (pp 331-332) where his Lordship said:
(a) Under the UK Act, a successful party to a Convention award has a prima facie right to enforcement. This reflects the pro-enforcement bias of the Convention.
(b) At the first stage of enforcement, upon production of the award and of the arbitration agreement appropriately authenticated, the award creditor is entitled to have the award enforced. Enforcement may be refused at the second stage (the inter partes stage) only if the award debtor proves to the satisfaction of the Court that the situation falls within [one of the heads in the UK Act equivalent to s 8(5) and s 8(7) in the Act].
(c) Provided that the documents produced to the Court at the first stage establish that the arbitrators had purported to act pursuant to the arbitration agreement produced at that stage, that is sufficient to move the enquiry to the stage where the award debtor must establish one or more of the statutory grounds for refusing to enforce the award.
(d) Once the award creditor establishes the matters referred to in (b) and (c) above, any challenge to the existence or validity of the arbitration agreement must be brought under [the statutory provision in the UK Act which is equivalent to s 8(5)(b) of the Act]. That is to say, it is for the party resisting enforcement of the award to raise and prove any challenge to the validity of the arbitration agreement.
79 In the later case of Dallah Real Estate v Ministry of Religious Affairs [2010] 2 Lloyd's Rep 691, Lord Mance repeated these views.
80 In Dallah Real Estate, arbitrators had held that the Government of Pakistan was bound by an arbitration agreement entered into between Dallah and a statutory trust even though the Government was not named therein. The arbitrators held that the Government was the "true party" to the agreement because the trust was its alter ego. The primary issue in the case before the English courts was whether there existed between Dallah and the government any relevant arbitration agreement at all.
81 The UK Supreme Court held that the statutory equivalent to s 8(5)(b) in England covered the case before it: That is to say, it covered the case where the party resisting enforcement claimed that the asserted arbitration agreement was not binding on it because it was never a party to that arbitration agreement.
82 The Court also held that the existence of any relevant arbitration agreement falls to be determined by the Supreme Court as a UK court under provisions of national law which are contained in the UK Act and which reflect Article V(1)(a) of the Convention. The onus of proving that it was not a party to the relevant arbitration agreement rested on the Government of Pakistan under the UK Act even though the arbitration clause, on its face, did not refer to the Government of Pakistan. In this regard, Lord Mance at [12] (p 697) expressly followed his reasoning in Dardana at [10]-[12] (pp 331-332).
83 Once the equivalent provision to s 8(5)(b) of the Act is invoked, in the opinion of Lord Mance, (at [26] (p 701)), the party resisting enforcement is entitled to an ordinary judicial determination of the issue of whether that party was a party to and thus bound by the arbitration agreement.
84 Lord Collins at [77]-[98] (pp 712-716) expressed similar views. Lords Hope, Saville and Clarke agreed with the reasons of Lords Mance and Collins.
85 In Altain Khuder LLC, at [125]-[187] (pp 754-765), Hansen JA and Kyrou AJA, in their joint judgment, discussed the correct interpretation of s 8 of the Act with particular emphasis on the level of proof required of an award creditor in order to engage s 8(1) and thereby shift the onus of proof to the award debtor and to do so in respect of the grounds for refusing enforcement specified in s 8(5) and s 8(7).
86 At [134]-[135] (p 756), their Honours said:
134 As the party invoking the court's jurisdiction, the award creditor has an evidential onus of satisfying the court, on a prima facie basis, that it has jurisdiction to make an order enforcing a foreign arbitral award. Section 9 of the Act assists the award creditor to discharge the evidential onus. If prima facie proof is established to the court's satisfaction pursuant to s 8(2), the court may make an order enforcing the award, subject to the order being set aside upon application by the award debtor.
135 In our opinion, at stage one, the award creditor must satisfy the court, on a prima facie basis, of the following matters before the court may make an order enforcing the award:
(a) an award has been made by a foreign arbitral tribunal granting relief to the award creditor against the award debtor;
(b) the award was made pursuant to an arbitration agreement; and
(c) the award creditor and the award debtor are parties to the arbitration agreement.
87 At [139]-[140] (p 757), their Honours went on to explain that, if the named parties to the relevant arbitration agreement were X and Y and the award was made in favour of X against Z, production of the arbitration agreement would not suffice for the making of an ex parte order for the enforcement of the award even if the award stated that it was made pursuant to the arbitration agreement. Where the contents of the documents produced to the Court do not provide a sufficient basis for engaging s 8 of the Act, their Honours held that the court should move to an inter partes hearing.
88 Their Honours continued at [144]-[149] (pp 758-759) as follows:
144 In our view, where a judge determines that the documents filed in accordance with s 9(1) of the Act do not satisfy the prima facie evidential requirements set out at [135] above and orders that the application for enforcement proceed inter partes, at the inter partes hearing, the evidential onus would be on the award creditor to adduce evidence, in addition to the arbitration agreement and the award, to satisfy the court of those prima facie evidential requirements.
145 Once the award creditor establishes a prima facie entitlement to an order enforcing a foreign arbitral award, if the award debtor wishes to resist such an order, it can do so only by proving "to the satisfaction of the court" one of the matters set out in s 8(5) or (7) of the Act. This follows from s 8(3A), (5) and (7). If the award debtor fails to satisfy the court of one of the matters set out in s 8(5) or (7), the award creditor would be entitled to an order enforcing the award.
146 In practice, in an inter partes hearing, both parties will usually adduce evidence and make submissions on all the issues in dispute. That does not mean, however, that the legal onus will immediately be on the award debtor to prove one of the matters in s 8(5) or (7). That will occur only if the award creditor discharges the evidential onus of adducing prima facie evidence of the matters set out at [135] above.
147 The award creditor's evidential onus remains important in an inter partes hearing because, at the conclusion of the award creditor's evidence, the award debtor could make a "no case submission" seeking the dismissal of the proceeding on the basis that the award creditor has not established a prima facie case. The fact that such a course may be infrequent because of the potential risks that may be involved if the award debtor elected not to call evidence, does not gainsay the possibility.
148 Where an inter partes hearing proceeds in the normal way, the court will decide the issues in dispute by determining whether each party's evidence was sufficient to discharge the onus falling on that party.
149 The fact that s 8(5) and (7) of the Act do not expressly include a ground that the award debtor was not a party to the arbitration agreement in pursuance of which the award was made, gives rise to the question of whether s 8(1), (3A), (5) and (7) apply differently in relation to onus where the award debtor denies being a party to the arbitration agreement. In particular, the question arises whether, in such a case, s 8(3A), (5) and (7) are subject to s 8(1).
89 These observations made by Hansen JA and Kyrou AJA are not entirely consistent with the views of Lord Mance. Lord Mance reasoned that, as long as the documents produced to the Court at the first stage established that the arbitrators had "purported" to act pursuant to the relevant arbitration agreement, that was sufficient to move the relevant enquiry and the onus of proof onto the award debtor. Hansen JA and Kyrou AJA seem to require more than this.
90 I pause to note that it is not the practice of this Court to make an enforcement order under s 8 of the Act on the return date of the Originating Application ex parte. It is the usual practice of this Court in such matters to require an inter partes hearing. The enforcement hearing would only proceed ex parte if the award debtor failed to appear at that hearing. In point of principle, however, that difference in practice does not affect the question presently under discussion.
91 I prefer the approach of Lord Mance. His Lordship's approach accommodates more satisfactorily the language of s 9(1)(b) (read with s 9(5)). What is required to be produced is the arbitration agreement under which the award "purports" to have been made.
92 At [150]-[187] (pp 759-765), Hansen JA and Kyrou AJA then considered the issues which they had raised at [149] (p 759). At [169]-[170] (p 762), their Honours concluded as follows:
169 Regarding the matter overall, the considerations supporting the view that s 8(3A), (5) and (7) are not subject to s 8(1) are more compelling than the considerations supporting the opposite view. To interpret the Act in a manner that treated the issue of whether a person was a party to an arbitration agreement as standing outside the legislative scheme that applies to all other grounds of impugning an award, would fly in the face of the express language in s 8(3A) that the court may only refuse to enforce a foreign award in the circumstances mentioned in s 8(5) and (7).
170 Similarly, it would fly in the face of the carefully enacted statutory scheme to impose a legal onus on the award creditor to prove that the award debtor was a party to the arbitration agreement in pursuance of which the award was made, while placing the legal onus on the award debtor to prove other grounds which are implicitly covered by s 8(1), such as the validity of the award and the arbitration agreement. It is neither logical nor consistent with the language of the Act to elevate the importance of privity of contract over the importance of the validity of the contract.
93 Their Honours followed Dardana Ltd and Dallah Real Estate on these points.
94 At [266]-[270] (pp 789-796), their Honours considered the nature of the enforcement court's power to consider for itself questions relating to the foreign arbitral tribunal's jurisdiction.
95 Their Honours concluded that the enforcement court can determine for itself not only whether the tribunal correctly determined that it had jurisdiction but whether the tribunal, in fact, did have jurisdiction to arbitrate the disputes determined by the award. Their Honours held that the enforcement court ought to do so if requested by a party to the award.
96 If I am wrong in the conclusions which I have expressed at [74]-[79] above, the uncontested evidence before me (which I have summarised in my synopsis of DKN's submissions at [68] and [69] above) establishes that the charterer was misdescribed in the Charterparty and that the entity which was intended to be nominated in that document was Beach Civil. This error can be remedied by applying appropriate rules of construction (see eg Noon v Bondi Beach Astra Retirement Village [2010] NSWCA 202 at [180]-[182] per Young JA; and Nittan (UK) Ltd v Solent Steel Fabrications Ltd [1981] 1 Lloyd's Rep 633).
97 To the extent that the question of whether Beach Civil was a party to the Charterparty is raised for determination by this Court, I find that it was the charterer under the Charterparty.
98 I now turn to s 8(5)(b).
99 The law expressed in the arbitration agreement as applicable to it was English law. But, in my view, English law should not be held to be the law under which the question of the validity of the arbitration agreement is to be determined for that reason, given that Beach Civil argues that it is not a party to and therefore not bound by the Charterparty. However, English law is the law of the country where both Awards were made. England is the seat of the arbitration. It is for these latter reasons that I think that the question of whether Beach Civil was a party to the Charterparty should be decided according to English law.
100 There is no evidence before me as to the relevant principles of construction of contracts under English law. I am, therefore, entitled to assume that it is the same as Australian law. It follows that, as a matter of construction of the Charterparty, for the reasons which I have already given at [96] and [97] above, Beach Civil was the charterer under the Charterparty.
101 That conclusion may also be arrived at by a different route.
102 Section 30 of the UK Act empowered the Arbitrator to rule on his own substantive jurisdiction and, in particular, to rule on the question of whether there is a valid arbitration agreement. Section 48(5)(c) gave to the Arbitrator the same powers as the English Commercial Court to order the rectification of a document. A party who has unsuccessfully challenged the arbitrator's jurisdiction before the arbitrator may apply to the Court for an order overturning the arbitrator's decision as to his own jurisdiction (s 67) but must do so within 28 days of the date of the award. In the present case, no such challenge was made within that timeframe, or at all. The first Award cannot now be challenged under English law and is therefore determinative of the point at issue.
103 For all of the above reasons, I am of the view that the challenge to the validity of the Award based upon the proposition that Beach Civil was never a party to the Charterparty and thus not a party to and bound by the arbitration agreement embodied in cl 32 fails.