16 In the present case, I consider that it was not open to his Honour on the evidence to conclude that the appellants waived their right to arbitration in the sense of having intentionally and unequivocally abandoned it. I say this for the following reasons. First, it seems to me that they have consistently pressed that the dispute be sent to arbitration. Thus, in May and July 2004, Mr Zhang sought to resolve the proceeding by negotiations with the respondent's representatives, and, when this was unsuccessful, the appellants filed their summons of 11 May 2004 asserting that the dispute should be resolved by arbitration and not curially. That this was their primary aim is confirmed by Judge Shelton's note of 19 May 2004. Notwithstanding that the summons was struck out they filed a "replacement" summons on 24 September 2004 by which they pressed their right to arbitration. And in July or August 2004, Mr Zhang submitted the dispute to arbitration in Beijing pursuant to clause 5 of the Sales Confirmation. Furthermore, in their defence to the further amended statement of claim the appellants reserved the right to insist that the dispute be resolved by arbitration. Moreover, in the course of the appearances at the interlocutory hearings to which reference has been made - at most of which they represented themselves - the appellants made it plain to the court that they wanted the dispute to be arbitrated.
17 Secondly, an examination of the matters on which Mr Sandbach relies as establishing waiver does not bear out such a claim. Even if Mr Zhang refused to participate in the arbitration proceeding that was proposed by the respondent, such conduct would not, by itself, amount to an unequivocal abandonment of the right to arbitration particularly given the appellants' conduct to which I have referred. In any event, there must be some doubt about the seriousness of the respondent's wish to have the matter resolved by arbitration bearing in mind that it chose not to proceed with it notwithstanding that it could have done so despite the absence of the appellants.[29] The respondent did not explain to the court why it was that it did not adopt such a course. Moreover, I consider that the material in the solicitor's affidavit is unpersuasive. First, it is not clear from its terms what were the circumstances in which the respondent sought Mr Zhang's agreement to participate in the arbitration. Secondly, it provides no information as to who it was at the respondent who gave the deponent the instructions as to the hearsay matters about which he deposed.
18 I also consider that the failure by the company to press for the arbitration in its defence of 9 September 2004 did not amount to waiver. Generally, the mere filing of a defence that does not raise the right to arbitration, although a step in the proceeding, does not necessarily amount to an unequivocal waiver of the right to arbitrate such as to disentitle the defendant from later seeking an order pursuant to s.7(2) of the Act.[30] This is particularly so in this case given that the principal purpose of that defence was to identify to the respondent the fact that the agreement was made with Mr Zhang and not the company.
19 I am also not satisfied that the evidence shows that the appellants acquiesced in the fixing of the trial date as was claimed by Mr Sandbach or, if they did, that this amounted to waiver of the right to arbitration. It is true that the order of Judge Harbison of 24 February 2004, which gave the respondent leave to add Mr Zhang as a defendant, also set down this matter for trial and that the order was counter-signed by Mrs Zhang. But it is plain enough that the order was an administrative one which gave effect to that court's policy of fixing a trial date very early in the proceeding and then determining the timing of all preceding interlocutory steps accordingly. I note that the trial date that was fixed - 26 March 2004 - was plainly unrealistic given that, amongst other matters, the respondent had, at the time for the order, not even filed its amended statement of claim (and only obtained leave to do so from Judge Harbison on that day). Importantly, the signature of Mrs Zhang was procured, apparently in accordance with standard practice, either by a court officer or a member of the judge's staff in circumstances where the appellants were unrepresented and were plainly unfamiliar with the procedure. In the circumstances, her signature at the foot of Judge Harbison's order does not amount to the acquiescence by the appellants for which the respondent contends. I mention for completeness that, so far as I can see from the material, the appellants' claim in its summons for security for costs was not pursued.
20 Thus, not only does the evidence not disclose that the appellants had, by their conduct, waived their right to insist that the dispute go to arbitration but I think that it demonstrated that at all relevant times they pressed to have the dispute arbitrated in accordance with the arbitration clause in the Sales Confirmation. In the circumstances, it was not open for his Honour to conclude on the evidence that there was waiver as claimed by the respondent.
Whether dispute is " commercial"
21 The respondent's notice of contention claims that his Honour's decision should stand in any event because the evidence did not establish that China was a Convention country for the purposes of the Act and, therefore, it was said, the Act does not operate to compel a reference of the dispute to arbitration. In his oral submissions, however, Mr Sandbach did not press this argument but, rightly, I think, accepted that China was a Convention country. Counsel nevertheless argued that the orders sought should not be made because it would be futile to do so given that it was not established below that the dispute was a "commercial" dispute under the law of China. Unless that were first made out, Mr Sandbach maintained, it was not certain that the matter could be arbitrated in China under the Act and, even if it could be arbitrated there, it was not clear that it could be enforced. In order better to explain this argument, it is necessary to refer to the context in which it was propounded. In the proceeding before the learned primary judge, the appellants tendered without objection a certificate pursuant to s.10 of the Act as prima facie evidence of the fact that China is a Convention country. So far as is relevant, the certificate provided that China acceded to the Convention but declared that it "will apply the Convention only [to disputes] which are considered as commercial under [its] national law ... " It was the respondent's case, as I have said, that the appellants failed to establish that the dispute had the character of a "commercial" dispute under the law of China and, therefore, it would be futile to make the order sought pursuant to the Act for reasons which I have briefly set out. In the circumstances, it was said for the respondent, his Honour's decision not to make the order sought should be upheld.
22 In my view, this argument is plainly misconceived and should be rejected for reasons that include the following. First, given that it was the respondent that contended that an order referring the dispute to arbitration would be futile, it was for it to have led evidence to establish that position, more particularly, that the dispute does not have the relevant character under the law of China. Secondly, irrespective of which of the parties had the onus of proof on this issue, the relevant reservation made by China on its acceding to the Convention can be treated as having been satisfied in this case because it is almost inconceivable that the dispute in question - arising, as it does, out of a commercial dealing in the context of the contractual relationship - would not be treated as a "commercial dispute" under the national law of China. Moreover, the relevant arbitration body in China must have concluded that the dispute is of that character given that it accepted the reference to arbitration and charged the appellants a fee in respect of it. It is plain, therefore, that the dispute is of a nature that can be properly arbitrated pursuant to the Convention and any award made as a consequence would be enforceable in Australia pursuant to s.8 of the Act.
Claim based on substituted sale agreement should proceed to curial resolution
23 At one stage, Mr Sandbach sought to argue that, because the respondent now relies on the substituted sale agreement which does not contain an arbitration clause, s.7(2) of the Act has no operation in respect of such a claim, and, therefore, the dispute as a whole could not be "settled by arbitration" within the meaning of s.7. It follows, so it was suggested, that the proceeding could not be properly stayed under that provision. In his oral submissions, however, Mr Sandbach did not press this argument, and rightly so. But he did contend that in a case such as the present, where the dispute is said to arise from a contract, the constituent elements of which are pleaded in a number of alternatives, the claim based on the version of the contract that does not contain an arbitration clause should be litigated first, and the resolution of the balance of the dispute should be stayed in the interim. It was said that such an order was made in Hi-Fert Pty Ltd v. Kiukiang Maritime Carriers Inc.[31] But the relevant order in that case was made in circumstances that were materially different from those operating here. So far as is relevant, the plaintiffs in Hi-Fert claimed that the defendant was liable for damages for breach of Part V of the Trade Practices Act 1974 (Cth) and for negligent performance of the contract, which provided that all disputes that arose "from it" were to go to arbitration. Emmett, J., with whom Branson, J. agreed, concluded[32] that the circumstances giving rise to the Trade Practices complaint arose before the contract was made and, therefore, the arbitration clause was inoperative in relation to it. Consequently, it was held that the defendant was not entitled to an order under s.7(2) of the Act staying the proceeding in respect of the Trade Practices claim. His Honour considered,[33] however, that the defendant should succeed in its claim for a stay of that part of the proceeding that involved the determination of the claim based on negligent performance of the contract on the basis that the claim should be determined by arbitration. In order to avoid parallel proceedings in two tribunals, however, the court imposed a condition on the stay of the contractual claim to the effect that the arbitration proceeding not be progressed until the final determination of the proceeding in court in respect of the Trade Practices complaint.
24 It does not follow, however, that the proceeding here, in so far as it involves the claim based on the substituted sale agreement, should proceed to be determined by the court and, in the meantime, the arbitration of the dispute based on the other versions of the contract be stayed. The respondent's primary claim is based on the original sale agreement or the alternative sale agreement and both parties contend that the first two versions of the contract contain the Sales Confirmation. In the circumstances, I consider that, contrary to counsel's submissions, the Court should order a stay of the whole of the proceeding and that the dispute, in so far as it arises out of the Sales Confirmation, be referred to arbitration. Such an order could be made, I think, partly pursuant to s.7(2) of the Act and partly in the exercise of the Court's general jurisdiction.
Abuse of process
25 Mr Sandbach next argued, also under cover of the notice of contention, that his Honour's decision should be affirmed on the basis that the appellants' claim, made in their summons of 24 September 2004, was an abuse of process given that the same case was determined against them by Judge F.B. Lewis who struck out their summons of 11 May 2004. Counsel claimed that the appellants' later summons was "unjustifiably vexatious and oppressive for the reason that it sought to litigate anew a case which has already been disposed of by earlier proceedings".[34] In my view, this claim should be rejected for at least two reasons. First, the summons of 24 September 2004 did not raise the same "case" as that which was sought to be pursued by the appellants in their summons of 11 May 2004. The earlier summons was, as I have mentioned, misconceived. It effectively sought a dismissal of the respondent's proceeding. When this was made apparent to Judge F.B. Lewis on 28 June 2004, his Honour understandably struck it out. Mr Sandbach, however, claimed that the appellants told his Honour on 28 June 2004 that they wished the dispute to go to arbitration pursuant to clause 5 of the Sales Confirmation and that this claim was rejected by the judge. Thus, it was said, it was an abuse of process for the appellants to litigate the matter again. But I think that the learned primary judge below was clearly correct in his conclusion that there was no hearing by Judge F.B. Lewis of the merits of the appellants' summons of 11 May 2004. As I have said, his Honour recognised that the claim, as formulated, was defective so that he had little choice but to strike it out. It is apparent from Mr Zhang's affidavit of 9 November 2004 that all that he put to Judge F.B. Lewis, that arguably bore on the issue whether there should be a reference to arbitration, was that he had attempted to negotiate a settlement but had failed so that the matter should be referred to arbitration. In my view, this plainly does not give rise to appellants' real claim being considered on its merits as counsel would have it. I note for completeness that his Honour did not dismiss the summons but ordered that it be struck out, thereby implicitly recognising that the appellants' real complaint has not been considered on its merits. Usually, such an order does not reflect a curial determination of the merits of the proceeding.[35] Secondly, nothing was put forward by Mr Sandbach that could sensibly lead to the conclusion that the hearing of the appellants' summons of 24 September 2004 was oppressive to the respondent and should be rejected for that reason.
Application out of time
26 Finally, Mr Sandbach contended that his Honour's decision should not be disturbed because the appellants' summons of 24 September 2004 was issued outside the time limit prescribed by Judge Harbison on 19 August 2004 as I have mentioned. I can see no relationship between the lateness of the issue of the summons and the merits of the claim raised by it. Moreover, it is plain that the respondent does not assert that it was prejudiced by the delay. In the circumstances, this complaint should be rejected.
Conclusion
27 To reiterate, I consider that the company should be given leave to appeal and be added as an appellant. I would uphold the appeal and set aside his Honour's order. In lieu of it, I would order that such part of the proceeding as is concerned with the respondent's claim that is said to arise out of the original sale agreement or the alternate sale agreement be referred to arbitration pursuant to clause 5 of the Sales Confirmation. I would also order that there be a stay of the proceeding pending the hearing and determination of the arbitration or further order. The latter part of the order will enable the respondent to move the court to vacate this order in the event that the proposed arbitration cannot be effected or for some other appropriate reason.