STEWART J:
1 The applicant, Hankuk Carbon Co Ltd, is a company incorporated in the Republic of Korea. It seeks orders for the recognition and enforcement of foreign arbitral awards against Energy World Corporation Ltd, an Australian registered company that is listed on the Australian Securities Exchange. The orders are sought pursuant to s 8 of the International Arbitration Act 1974 (Cth).
2 At this stage, the applicant seeks orders on an ex parte basis as envisaged by r 28.14(4) of the Federal Court Rules 2011 (Cth). The applicant invokes the two-stage procedure provided for in the Commercial Arbitration Practice Note (CA-1).
3 In January 2016, the applicant as seller and the respondent as buyer entered into a contract for the supply and delivery of goods, including insulation panels and stainless steel membranes to be used in the building of an LNG (liquefied natural gas) storage tank in the Philippines. The contract included an agreement that all disputes, controversies or differences which may arise between the parties out of or in relation to or in connection with the contract or for its breach shall be finally settled by arbitration.
4 The applicant has produced a copy of the arbitration agreement in accordance with s 9(1)(b) of the Act. The applicant's solicitor has identified the agreement on affidavit and has confirmed on information and belief that it is a true copy of the arbitration agreement between the parties. On that basis, the agreement has been satisfactorily authenticated (s 9(2)(b)), but on the document being tendered it in any event amounts to prima face evidence of the arbitration agreement (s 9(5)). As the agreement is in English, no question of translation arises (s 9(3)).
5 A dispute arose between the parties regarding the respondent's non-payment for completed shipments under the contract. The applicant claimed that the respondent had failed to pay for goods delivered under the contract, and that it had failed to accept other contracted-for goods, referred to as undelivered goods, which continued to be stored in a warehouse in Korea.
6 The applicant commenced arbitral proceedings against the respondent by filing and serving a notice of arbitration dated 17 December 2020 pursuant to the 2018 Hong Kong International Arbitration Centre (HKIAC) Administered Arbitration Rules.
7 That procedure ultimately produced two arbitral awards, a merits award dated 19 October 2022 and a costs award dated 3 March 2023. The applicant has produced copies of the awards in accordance with s 9(1)(a) of the Act. The applicant's solicitor has identified the copies on affidavit and has confirmed on information and belief that they are true copies of the awards. On that basis, the awards have been satisfactorily authenticated (s 9(2)(b)). The copies of the documents are in any event, on being tendered, prima face evidence of the awards (s 9(5)). The awards are in English.
8 The merits award records that in its response to the applicant's notice of arbitration, the respondent agreed to adopt the 2018 HKIAC Rules for the conduct of the arbitration. The merits award also records that the parties agreed that "the legal place of the arbitration … shall be Hong Kong".
9 By the merits award, the Tribunal ordered that the respondent pay the applicant:
(1) US$5,163,283.05 for the delivered and undelivered goods;
(2) warehousing costs at the rate of US$21,667.75 per month from 1 December 2017 up to the date of actual payment for the undelivered goods; and
(3) costs and interest to be determined.
10 By the costs award, the Tribunal ordered that the respondent pay the applicant;
(1) HK$2,321,691.16 for costs and expenses of the arbitration;
(2) simple interest on the amounts awarded in the merits award at 1% above prime based on HSBC's Best Lending Rate in Hong Kong as at the date of the merits award;
(3) pre-award interest:
(a) on damages for the delivered goods accruing from specified dates for different shipments until the date of the merits award;
(b) on damages for the award in relation to the undelivered goods from 16 July 2018 until the date of the merits award and on the monthly warehousing costs from 1 December 2017 until the date of actual payment for the undelivered goods.
11 On the basis of the above, I am satisfied that the applicant and the respondent were parties to the arbitration agreement, that the arbitration was convened pursuant to that agreement and that the applicant and the respondent are the parties to the merits award and the costs award.
12 The applicant has produced evidence of the applicable interest rates and it has calculated the amounts payable for interest in accordance with the award. I am satisfied that the relief that it seeks is in accordance with the awards.
13 For completeness it may be mentioned that the respondent brought proceedings at the seat of the arbitration, ie in Hong Kong, to set aside the awards but it was unsuccessful; its proceeding was dismissed. It was also denied leave to appeal. On the evidence, the awards are final in the sense that they are no longer subject to any revision or variation by the Tribunal, and they are also no longer subject to recourse at the seat.
14 There is no apparent reason why the awards might not be enforced, with reference to ss 8(5) and (7) of the Act. Also, I am satisfied that this is an appropriate case for the two-stage procedure to be followed.
15 The applicant seeks judgment in its favour for the various amounts awarded, and for the judgment to then be stayed. It further seeks that the stay of the judgment will expire if the respondent does not file an application to oppose and set aside the judgment within 28 days of being given notice of the orders.
16 That form of order in the two-stage process already referred to, in entering judgment and then staying that judgment to give the respondent the opportunity to apply to set it aside, is slightly different from the form of order more commonly made in this Court. The more common form of order is to give the respondent notice that unless it files an application to oppose the making of orders to enforce the relevant award within a specified time, orders enforcing the judgment will be made. See StoneX Financial Inc v Ambrose [2023] FCA 1568 as an example.
17 The applicant refers to IMC Aviation Solutions Pty Ltd v Altain Khuder LLC [2011] VSCA 248; 38 VR 303 and Yukos Oil v Dadana Ltd [2002] EWCA Civ 543; [2002] 2 Lloyd's Rep 326 in support of the form of orders that it seeks.
18 In IMC Aviation, the primary judge had made ex parte orders entering judgment for the award creditor and granting the award debtors 42 days within which to apply to set the judgment aside, and stayed enforcement of the award until the expiration of that time or determination of any application to set aside (at [69]). The plurality (Hansen JA and Kyrou AJA) approved the ex parte orders against one of the respondents but not against the other because of a question as to whether it was indeed a party to the award, but in doing so made no adverse comment as to the form of order (at [196]). The applicant takes that as endorsement of the Court of Appeal of the form of orders that it seeks.
19 In Yukos Oil, the primary judge made ex parte orders "giving permission to enforce the award … in the same manner as a judgment" and gave liberty to the award debtor to apply to set aside the order within 21 days after service on it, and provided that "the award shall not be enforced until after the expiration of that period or, if the respondent applies within that period to set aside the order, until the application is finally disposed of" (at [2]). The Court of Appeal of England and Wales recognised that that procedure was in accordance with the Practice Direction - Arbitrations (Civil Procedure 2001, vol 2, s 2B) (at [15]). That procedure is now provided for in r 62.18 of the Civil Procedure Rules (UK).
20 The applicant also refers to enforcement orders made in Hong Kong in respect of the awards that are the subject of this case. On 17 October 2023, but amended and refiled on 4 December 2023, the High Court of the Hong Kong Special Administrative Region, Court of First Instance, made ex parte orders enforcing the awards including by ordering payment of the various monetary sums, and providing that within 14 days after service of the orders on it the respondent could apply to set aside the orders which would not be enforced until after the expiration of that period or, if applicable, after the application was finally disposed of.
21 There is thus precedent for the form of orders sought by the applicant in Victoria, England and Wales and Hong Kong. There is nothing in the governing legislation or rules of this Court that is against such orders being made. I am satisfied that in circumstances where, as here, the award creditor has not been notified by an award debtor of an intention to object to enforcement of the award with particulars of the basis or bases for that position, the award creditor is not otherwise aware of any reasonably arguable basis upon which the award debtor may object, and the award debtor has unsuccessfully exhausted its options of setting aside the award at the seat such form of orders is appropriate. The significance of the dismissal of the challenge at the arbitral seat arises from the special respect that an Australian court will give to the outcome of such a challenge: Gujarat NRE Coke Ltd v Coeclerici Asia (Pte) Ltd [2013] FCAFC 109; 304 ALR 468 at [65] (Allsop CJ, Besanko and Middleton JJ), citing Minmetals Germany GmbH v Ferco Steel Ltd [1999] 1 All ER (Comm) 315 at 331 (Colman J).
22 In my assessment the approach identified in the previous paragraph strikes a proper balance between the rights and interests of the award creditor who is armed with an award that must, prima facie, be enforced under s 8 of the Act, and the rights and interests of the award debtor who may conceivably have a legitimate basis to oppose enforcement of the award under ss 8(5) or (7) of the Act and thus the orders made against them ex parte. The award debtor's position is protected by the stay and r 39.05(a) of the Rules which provides that the Court may vary or set aside a judgment or order after it has been entered if it was made in the absence of a party. The approach also gives proper recognition to the award creditor's position by allowing post-judgment interest to run in the interim.
23 I will make orders accordingly.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Stewart.