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Amasya Enterprises Pty Ltd v Asta Developments (Aust) Pty Ltd

Amasya Enterprises Pty Ltd v Asta Developments (Aust) Pty Ltd

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Case Copied 17 June 2016 66 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

ARBITRATION LIST

S CI 2016 01359

AMASYA ENTERPRISES PTY LTD (ACN 145 743 915) & ORS	Applicants
v
ASTA DEVELOPMENTS (AUST) PTY LTD (ACN 142 875 876)	Respondent

S CI 2016 01254

ASTA DEVELOPMENTS (AUST) PTY LTD (ACN 142 875 876)	Applicant
v
AMASYA ENTERPRISES PTY LTD (ACN 145 743 915)	First Respondent
TEK FOODS PTY LTD (ACN 115 663 262)	Second Respondent

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JUDGE:	CROFT J
WHERE HELD:	Melbourne
DATE OF HEARING:	16 May 2016
DATE OF JUDGMENT:	17 June 2016
CASE MAY BE CITED AS:	Amasya Enterprises Pty Ltd v Asta Developments (Aust) Pty Ltd
MEDIUM NEUTRAL CITATION:	[2016] VSC 326

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ARBITRATION – Commercial Arbitration Act 2011, s 18 – UNCITRAL Model Law on International Commercial Arbitration, art 18 – Relevant test – Divergence of Model Law and common law approaches – Trustees of Rotoaira Forest Trust v Attorney-General [1999] 2 NZLR 452 distinguished – Irrelevance of the merits – Allegation that award made on the basis of a claim that was not pleaded or argued in the arbitration – Whether objecting party given a reasonable opportunity of presenting the party’s case – Whether there was an “opportunity” – Interbulk Ltd v Aiden Shipping Co Ltd; The Vimeira [1984] 2 Lloyd’s Rep 66 – Terna Bahrain Holding Co WLL v Bin Kamil Al Shamsi [2013] 2 CLC 1 – Whether opportunity amounted to a “reasonable opportunity” – Relevance of all the circumstances of the case – AKN v ALC [2015] SGCA 18.

ARBITRATION – Application to set aside domestic award – Commercial Arbitration Act 2011 ss 23(3), 34(2)(a)(ii) and 34(2)(b)(ii) – Content of and relationship between “unable to present its case” ground and “public policy” ground – Procedural fairness – Natural justice – TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd (2014) 232 FCR 361.

ARBITRATION – Application to enforce domestic award – Commercial Arbitration Act 2011 ss 35, 36(1)(a)(ii) and 36(1)(b)(ii).

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APPEARANCES:

Counsel

Solicitors

For the Applicants
(S CI 2016 01359)

M.F. Wheelahan QC with
R. Andrew and
N.J. Phillpott

Starnet Legal

For the Respondent
(S CI 2016 01359)

For the Applicant
(S CI 2016 01254)

For the Respondents
(S CI 2016 01254)

J.A.F. Twigg QC with
N.A. Andreou

M.F. Wheelahan QC with
R. Andrew and
N.J. Phillpott

LMS Lawyers

Starnet Legal

TABLE OF CONTENTS

Introduction......................................................................................................................................... 1

Background and procedural history of the arbitration............................................................... 2

Setting aside and refusing enforcement of arbitral awards....................................................... 5

The “unable to present its case” and “public policy” grounds............................................... 16

Was s 18 of the Act complied with?............................................................................................... 21

The relevant test.......................................................................................................................... 23
Trustees of Rotoaira Forest Trust v Attorney-General................................................ 25
Merits are irrelevant.......................................................................................................... 28
The proper approach to determining compliance with s 18 (Model Law Art 18)... 33

What was the Amasya parties’ case?........................................................................................ 34
Were the Amasya parties given an “opportunity” to present their case?.......................... 34
Did the opportunity amount to a “reasonable…

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: [2016] VSC 326
Decision Date: 17 June 2016

CaseChat Overview and Summary

Amasya Enterprises Pty Ltd commenced proceedings against Asta Developments (Aust) Pty Ltd, seeking to set aside an arbitration award and also to enforce it. The dispute centred on the validity and enforceability of an arbitration award, which Amasya sought to set aside on the basis that it was made on the basis of a claim not pleaded or argued in the arbitration. Conversely, Asta sought to enforce the same award, arguing it was valid and enforceable. The matter was heard in the Federal Court of Australia.

The legal issues before the court were whether the award was made on a claim not pleaded or argued in the arbitration, and if so, whether the objecting party had been given a reasonable opportunity to present its case. This issue was complicated by the divergent approaches of the UNCITRAL Model Law on International Commercial Arbitration and common law in assessing the reasonableness of an opportunity. Additionally, the court had to consider the content and relationship between the grounds for setting aside an award under the Commercial Arbitration Act 2011.

The court found that the award was indeed made on a claim not pleaded or argued in the arbitration, but it was not sufficient for the objecting party to merely allege this without showing that it was denied a reasonable opportunity to present its case. The court held that the test for a reasonable opportunity is context-dependent, taking into account all circumstances of the case, and not solely on the presence or absence of certain procedural steps. The court found that Amasya had not been denied a reasonable opportunity to present its case, and therefore, the award stood. The court dismissed Amasya’s application to set aside the award and allowed Asta’s application to enforce it.

The court made orders dismissing Amasya’s application to set aside the arbitration award and granting Asta’s application to enforce the award. The court further clarified that the grounds for setting aside an award under the Commercial Arbitration Act 2011, specifically the "unable to present its case" ground and the "public policy" ground, must be carefully distinguished and applied in light of the procedural fairness and natural justice principles.

Orders