ALYK (HK) Ltd v Caprock Commodities Trading Pty Ltd - [2015] NSWSC 1006

Supreme Court

New South Wales

Medium Neutral Citation: ALYK (H.K.) Limited v Caprock Commodities Trading Pty Limited and China Construction Bank Corporation [2015] NSWSC 1006
Hearing dates: 26 June 2015
Decision date: 24 July 2015
Jurisdiction: Equity Division
Before: Black J
Decision:
Order that arbitration award be enforced as a judgment of this Court pursuant to s 8(2) of the International Arbitration Act 1974 (Cth). The sum of US $20,000,000 paid into Court by the Second Defendant be paid to the Plaintiff together with any interest earned on that amount. Order that the sum of AU $1,000,000 paid into Court by or on behalf of the Plaintiff be paid to the Plaintiff together with any interest earned on that amount. The costs of the Plaintiff’s application made on 14 December 2012, as reserved on that day, and of the hearing on 26 June 2015, be paid by the First Defendant, as agreed or as assessed. Liberty to restore the issues as to whether, and to what extent, there should be judgment in favour of the Plaintiff against the First Defendant in respect of amounts of USD 2,384,000 and EUR 500,000 or any part of them.

Catchwords:
ARBITRATION – enforcing foreign arbitration awards – where money previously paid into New South Wales Supreme Court as a result of a judgment – whether to enforce foreign award as judgment of the Court under s 8 of the International Arbitration Act 1974 (Cth).

ARBITRATION –enforcing foreign arbitration awards – where allegations of bias of arbitral tribunal – whether breach of natural justice for the purposes of s 8(7A)(b) of the International Arbitration Act 1974 (Cth) – whether foreign award should not be enforced for reasons of public policy under s 8(7)(b) of the International Arbitration Act 1974 (Cth).
EQUITY – trusts and trustees – trust is not a separate legal entity – where First Defendant was party to impugned contract as trustee of a trust – whether First Defendant properly party to the proceedings.
Legislation Cited: - Civil Procedure Act 2005 (NSW) s 101
- Evidence Act 1995 (NSW) s 136
- International Arbitration Act 1974 (Cth) ss 2D, 3, 8, 8(2), 8(5), 8(7), 8(7A), 39
Cases Cited: - ACES Sogutlu Holdings Pty Ltd (in liq) v Commonwealth Bank of Australia [2014] NSWCA 402
- ALYK (H.K.) Limited v Caprock Commodities Trading Pty Ltd [2012] NSWSC 1558
- Helvetic Investment Corporation Pty Ltd v Knight (1984) 9 ACLR 773
- Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360
- Sauber Motorsport AG v Giedo Van Der Garde BV [2015] VSCA 37; (2015) 317 ALR 786
- TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd [2014] FCAFC 83; (2014) 311 ALR 387
- William Hare UAE LLC v Aircraft Support Industries Pty Ltd [2014] NSWSC 1403
Texts Cited: - D Loxton & N D’Angelo, “Trustee’s limitation of liability: Myths, mysteries and a model clause” (2013) 41 ABLR 142
J. Allsop, “The Nature of the Trustee’s Right of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] NSWSC 1006
Decision Date: 24 July 2015

CaseChat Overview and Summary

The case between ALYK (HK) Ltd and Caprock Commodities Trading Pty Ltd involved the enforcement of a foreign arbitration award in the New South Wales Supreme Court. ALYK, the applicant, sought to enforce an arbitration award made in Hong Kong against Caprock, the respondent. The dispute arose from a contractual obligation between the parties that was ultimately settled via arbitration. ALYK sought to have the arbitration award recognised and enforced in Australia under the provisions of the International Arbitration Act 1974 (Cth).

The court was required to determine whether the foreign arbitration award could be enforced as a judgment of the Court under section 8 of the Act, despite money previously paid into court as a result of a judgment. Additionally, the court needed to address whether there were any allegations of bias within the arbitral tribunal that would constitute a breach of natural justice under section 8(7A)(b) of the Act. Finally, the court had to consider if the enforcement of the foreign award should be refused on the grounds of public policy under section 8(7)(b) of the Act. Another issue pertained to whether the First Defendant, who was a party to the contract as a trustee of a trust, was a proper party to the proceedings since a trust is not a separate legal entity.

The court found that the foreign arbitration award could be enforced as a judgment of the Court, notwithstanding the prior payment into court. The allegations of bias were found to be unsubstantiated, and therefore, there was no breach of natural justice. Furthermore, the court concluded that there were no grounds to refuse enforcement on public policy considerations. Regarding the participation of the First Defendant as a trustee, the court ruled that the First Defendant was a proper party to the proceedings as the trustee was the entity that entered into the contract. The court ultimately granted the enforcement of the foreign arbitration award, with the First Defendant remaining a party to the litigation.

Orders