Comandate Marine Corp v Pan Australia Shipping Pty Ltd

[2006] FCAFC 192

FEDERAL COURT OF AUSTRALIA

Comandate Marine Corp v Pan Australia Shipping Pty Ltd [2006] FCAFC 192

ADMIRALTY AND MARITIME JURISDICTION – action in rem in Australia commenced by foreign party who had commenced London arbitration against Australian party – no statutory basis for commencing the in rem action – no election or waiver or abandonment of arbitration – nature of action in rem discussed  

INTERNATIONAL ARBITRATION – proceedings begun in this Court by Australian party – stay sought by foreign party under International Arbitration Act 1974 (Cth) – stay granted

International Arbitration Act 1974 (Cth) ss 3, 7, 16
Trade Practices Act 1974 (Cth) ss 52, 82, 87

ACD Tridon Inc v Tridon Australia Pty Ltd [2002] NSWSC 896 approved
Aichhorn & Co KG v The Ship MV ‘Talabot’ (1974) 132 CLR 449applied

Allergan Pharmaceuticals Inc v Bausch & Lomb Inc (1985) 7 ATPR 40-636 discussed and distinguished

Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 applied
Caltex Oil (Australia) Pty Ltd v The Dredge ‘Willemstad’ (1976) 136 CLR 529 applied
Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 discussed and distinguished
Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305 applied

Ethiopian Oilseeds and Pulses Export Corporation v Rio del Mar Foods Inc [1990] 1 Lloyd’s Rep 86 discussed and approved

Ferris v Plaister (1994) 34 NSWLR 474 discussed and approved

Flakt Australia Ltd v Wilkins & Davies Construction Co Ltd [1979] 2 NSWLR 243 referred to

Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160 discussed and approved
Government of Gibraltar v Kenney [1956] 2 QB 410 discussed

Harbour Assurance Co (UK) Ltd v Kansa General International Insurance Co Ltd [1992] 1 Lloyd’s Rep 81 discussed

Harbour Assurance Co (UK) Ltd v Kansa General International Insurance Co Ltd [1993] QB 701 referred to

Heyman v Darwins Ltd [1942] AC 356 referred to
Hi-Fert Pty Ltd v Kiukiang Maritime Carriers Inc (No 5) (1998) 90 FCR 1 discussed and not followed
Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26 applied
Kuo Fen Ching v Dauphin Offshore Engineering & Trading Pte Ltd [1999] 3 SLR 721 referred to
La Donna Pty Ltd v Wolford AG (2005) 194 FLR 26 discussed and distinguished
Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 applied
Recyclers of Australia Pty Ltd v Hettinga Equipment Inc (2000) 100 FCR 420 referred to
Republic of India v India Steamship Co Ltd (No 2) (The ‘Indian Grace’) [1998] AC 878 discussed and disapproved

Samick Lines Co Ltd v Owners of The ‘Antonis P Lemos’ [1985] AC 711 discussed

Sargent v ASL Developments Ltd (1974) 131 CLR 656 applied

SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 150 FCR 214 applied

Tanning Research Laboratories Inc v O’Brien (1990) 169 CLR 332 discussed
The ‘August 8’ [1983] 2 AC 450 discussed
The ‘Bold Buccleugh’ (1851) 7 Moo PC 267, 13 ER 884 discussed
The ‘Broadmayne’ [1916] P 64 applied
The ‘Deichland’ [1990] 1 QB 361 discussed
The ‘Dictator’ [1892] P 304 applied
The ‘Dupleix’ [1912] P 8 applied
The ‘Gemma’ [1899] P 285 applied
The ‘Indian Grace’ (No 2) [1994] 2 Lloyd’s Rep 331 discussed and approved
The ‘Irina Zharkikh and Ksenia Zharkikh’ [2001] 2 NZLR 801 discussed
The ‘Maciej Rataj’ [1995] 1 Lloyd’s Rep 302 discussed
The ‘Parlement Belge’ (1880) 5 PD 197 discussed
The ‘Rena K’ [1979] QB 377 discussed
The ‘Tervaete’ [1922] P 259 discussed
Tisand Pty Ltd v The Owners of the Ship MV ‘Cape Moreton’ (Ex Freya) (2005) 143 FCR 43 referred to
Wealands v CLC Contractors and Key Scaffolding Ltd [1999] 2 Lloyd’s Rep 739 referred to
Zambia Steel & Building Supplies Ltd v James Clark & Eaton Ltd [1986] 2 Lloyd’s Rep 225 discussed

Commonwealth of Australia Parliamentary Debates Senate, 2 and 24 October 1974 and 1973-76, 24 November 1988 and 12 April 1989 and House of Representatives, 2 December 1974, 3 and 22 November 1988
Australian Law Reform Commission (Report No 33)
Handley, K Estoppel by Conduct and Election (Thomson/Sweet and Maxwell 2006)
Holtzmann, HM and Neuhaus, JE A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and Commentary (Kluwer, the TMC Asser Institute 1989)
Jacobs, M Commercial Arbitration law and Practice (Lawbook Co)
Merkin, R Arbitration Law (LLP 2004)
Mustill, M and Boyd, S Commercial Arbitration (Butterworths 1989 and 2001 Companion) 
Redfern, A and Hunter, M Law and Practice of Commercial Arbitration (Thomson/Sweet and Maxwell 2004)
Sanders, P (Ed) International Handbook on Commercial Arbitration Vol 1 (Kluwer)
Sutton, D and Gill, J Russell on Arbitration (22^nd Ed 2003 Sweet and Maxwell)
Thomas, DR Maritime Liens (Stevens 1980)
van den Berg, AJ The New York Arbitration Convention of 1958 (Kluwer 1981)
Wiswall, F The Development of Admiralty Jurisdiction and Practice Since 1800 (Cambridge University Press 1970)

COMANDATE MARINE CORP. v PAN AUSTRALIA SHIPPING PTY LTD
NSD 1613 OF 2006

FINN, FINKELSTEIN AND ALLSOP JJ
20 DECEMBER 2006
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1613 OF 2006

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	COMANDATE MARINE CORP. Appellant
AND:	PAN AUSTRALIA SHIPPING PTY LTD Respondent
JUDGES:	FINN, FINKELSTEIN AND ALLSOP JJ
DATE OF ORDER:	20 DECEMBER 2006
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The appeal be allowed.

2.Order 5 made by the Court on 13 July 2006 and the order made by the Court on 22 August 2006 be dissolved and set aside, respectively and in lieu of the order made on 22 August 2006:

(a)Subject to the retention of the security provided for the release of Comandate remaining as security for Pan’s claims against Comandate Marine in the arbitration, proceeding NSD 1330 of 2006 be stayed.

(b)Pan pay the costs of Comandate Marine of the motion for a stay of proceedings served on 23 June 2006 and filed 4 July 2006.

3.Pan pay Comandate Marine’s costs of the appeal.

4.The question of the costs of the anti-anti suit injunction and of the balance of the proceedings at first instance be stood over for argument to a date to be fixed.

THE COURT NOTES:

5.The undertaking to the Court of Comandate Marine Corp that it will allow the arbitration to determine all issues between the parties arising under the Trade Practices Act 1974 (Cth).

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1613 OF 2006

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	COMANDATE MARINE CORP. Appellant
AND:	PAN AUSTRALIA SHIPPING PTY LTD Respondent

JUDGES:	FINN, FINKELSTEIN AND ALLSOP JJ
DATE:	20 DECEMBER 2006
PLACE:	SYDNEY

REASONS FOR JUDGMENT

FINN J

1. I have had the advantage of considering the reasons of, and the orders proposed by, Allsop J.  I agree with the orders proposed.  Subject to what I say below, I agree with his Honour’s reasons.

2. My unpreparedness to agree generally with Allsop J’s reasons does not reflect unarticulated differences I have with what his Honour has said.  Rather, because I am of the view that the appeal can properly be disposed of on bases that are somewhat more narrow than those canvassed by his Honour, I do not consider it necessary to express a view on a number of matters dealt with by Allsop J. 

3. I am satisfied that Comandate Marine did not make an election between inconsistent rights; and it did not expressly or impliedly abandon the London arbitration.  I likewise am of the view that Pan ought not be permitted to rely upon the two grounds advanced in its notice of contention although I do not consider that either ground has been made out in any event on the material before the Court.  I agree with Allsop J’s reasons in relation to all of these matters save that I do not consider it necessary to express any view on the correctness or otherwise of Lord Steyn’s speech in Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878. In my view there was no election or abandonment by Comandate Marine, irrespective how Comandate Marine’s commencement of the action in rem against Boomerang 1 is formally to be characterised.

4. The central question in the appeal is whether, in the circumstances, the primary judge was obliged by s 7(2) of the International Arbitration Act to stay Pan’s Federal Court proceeding, Comandate Marine having applied under that Act for such an order.  I am satisfied that the parties’ arbitration agreement satisfied the requirements of Article II of what, for convenience, I will call the New York Convention;  see International Arbitration Act, Sched I, Art II.  In particular it was contained in the exchange of letters and telegrams which acquired contractual force when, as is acknowledged by Pan, a binding contract later came into existence. I equally am satisfied that that contract, though subject to a condition precedent to performance (i.e. the prior provision of a bank guarantee by Pan) was itself brought into existence through a process of documentary exchanges. I agree with Allsop J’s reasons for these conclusions. I do not, though, consider it necessary to express a view on whether Article 8 of what I will call the Model Law: see s 15 of the International Arbitration Act 1974;  could be relied upon by Comandate Marine if it could not bring itself within Article II of the New York Convention.

5. Having fulfilled the requirements of Article II, the arbitration agreement was one to which s 7(1) of the International Arbitration Act applied. For the purposes of s 7(1)(d), Pan was at the time of the agreement “ordinarily resident in a Convention country”, i.e. Australia: see s 3(3) of the International Arbitration Act. For the reasons given by Allsop J, I am satisfied that the arbitration agreement is not null and void, inoperative or incapable of being performed: cf s 7(5) of the International Arbitration Act.  I would emphasise, in particular, my concurrence in his Honour’s views on why we should follow Ferris v Plaister (1994) 34 NSWLR 474.

6. I likewise agree with Allsop J’s construction of the scope of the arbitration agreement.  I would emphasise in particular my concurrence in his Honour’s views on the reasoning of Emmett J in Hi-Fert Pty Ltd v Kiuking Maritime Carriers Inc (No 5) (1998) 90 FCR 1 in construing the scope of the arbitration clause in that case. I also do not consider we are bound by that decision.

7. Given the scope of the arbitration clause and given that the Trade Practices Act claims (including Pan’s s 87 claim) are arbitrable in the sense of “capable of settlement by arbitration” in the London arbitration: cf Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160 at 166-167; I am satisfied for the reasons given by Allsop J that the requirements of s 7(2) of the International Arbitration Act have been satisfied in this matter and that a stay ought to have been ordered.

8. I would merely add that, whatever advantage or disadvantage accrued to Pan from having both the relevant legal effects of its pre-contractual conduct and its Trade Practices Act claims determined in London according to English law (including relevant principles of conflict of laws), this is what has been agreed to by the parties as international commercial contractors. There is no legal principle of, nor is there any policy immanent in, Australian law that denies them what they have agreed. On the contrary, s 7 of the International Arbitration Act upholds it. 

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn.

Associate:

Dated:  20 December 2006

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1613 OF 2006

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	COMANDATE MARINE CORP. Appellant
AND:	PAN AUSTRALIA SHIPPING PTY LTD Respondent

JUDGES:	FINN, FINKELSTEIN AND ALLSOP JJ
DATE:	20 DECEMBER 2006
PLACE:	SYDNEY

REASONS FOR JUDGMENT

FINKELSTEIN J

1. I agree in the reasons of Allsop J.

I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.

Associate:

Dated:        20 December 2006

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1613 OF 2006

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	COMANDATE MARINE CORP. Appellant
AND:	PAN AUSTRALIA SHIPPING PTY LTD Respondent

JUDGES:	FINN, FINKELSTEIN AND ALLSOP JJ
DATE:	20 DECEMBER 2006
PLACE:	SYDNEY

REASONS FOR JUDGMENT

ALLSOP J

1. This is an appeal from orders made by a Judge of the Court in a matter between a Liberian company, Comandate Marine Corp (Comandate Marine) and an Australian company, Pan Australia Shipping Pty Ltd (Pan), concerning the time charter of the ship Comandate, a general cargo vessel of 25,855 dwt in metric tons and 18,775 Gross Tonnage, built in 1983, registered in Liberia, managed and owned by Greek interests and with a container capacity of 1,358 twenty foot equivalent units (TEUs).  I would allow the appeal, set aside the orders made by the primary judge, stay proceedings in this Court and discharge the anti-anti-suit injunction that is in place.

2. I set out a table of contents of these reasons:

   -     Background to the litigation  [12] - [20]

   -     Pan’s Amended statement of claim  [21] - [33]

   -     The provisions of the International Arbitration Act1974 (Cth)

   and Comandate Marine’s notice of motion  [34] - [45]

   -     The issues on appeal and my conclusions in summary form  [46] - [52]

   -     The first group of issues: waiver, election and abandonment  [53] - [132]

   -     The second group of issues: whether there was an

   agreement in writing for the purposes of the International

   Arbitration Act 1974 (Cth)  [133] - [161]

   -     The third group of issues: the scope of the arbitration clause  [162] - [187]

   -     The fourth group of issues:  the operation of the International

   Arbitration Act 1974 (Cth) in the light of the proper construction
   of the arbitration clause  [188] - [245]

   -     The fifth group of issues: other bases for a stay by reason of the

   arbitration clause, assuming the inapplicability of the International
        Arbitration Act 1974 (Cth)  [246] - [250]

   -     The sixth group of issues: the anti-anti-suit injunction  [251] - [253]

   -     The appropriate orders  [254] - [256]

   Background to the litigation

3. An understanding of the orders made by the primary judge and the issues on appeal require an appreciation of the background facts of the dispute.

4. At all relevant times, Pan carried on a coastal liner shipping service from and to Australian ports. It was engaged in the coasting trade as that term is understood in s 7 of the Navigation Act 1912 (Cth). Pan is now in voluntary administration. There was no asserted present relevance of that fact to the disposition of the appeal.

5. The service run by Pan was undertaken initially by one ship, Boomerang I, and was to be undertaken also by a second ship, Comandate, which was known, for a short time, as Boomerang II.  For clarity, I will refer to the second ship as Comandate.  Boomerang I  was demise chartered by Pan from Jaymont Shipping Company Limited, a company wholly unrelated to Comandate Marine.  Comandate was time chartered to Pan under terms which included those contained in New York Produce Exchange Form 1993 Revision (NYPE 93).

6. The time charter indicated that it was made for a duration of 24 months with a further 12 months at charterer’s option from 19 April 2006. It will be necessary to examine the assertions of the parties in relation to the formation of the time charter in a little detail. For the moment, it is only necessary to understand the relevant terms of the arbitration clause (which both parties accept formed part of the time charter) being, clause 45(b) of the NYPE 93 (clause 45(a), providing for New York arbitration, had been excised and the final paragraph of clause 45(b) dealing with small claims is not relevant):

   “(b)    LONDON
   All disputes arising out of this contract shall be arbitrated at London and, unless the parties agree forthwith on a single Arbitrator, be referred to the final arbitrament of two Arbitrators carrying on business in London who shall be members of the Baltic Mercantile & Shipping Exchange and engaged in Shipping one to be appointed by each of the parties, with the power to such Arbitrators to appoint an Umpire.  No award shall be questioned or invalidated on the ground that any of the Arbitrators is not qualified as above, unless objection to his action be taken before the award is made.  Any dispute arising hereunder shall be governed by English Law.
   …”

   [emphasis added]

7. Disputes arose under the time charter.  Pan alleged various breaches of the time charter and claimed damages in the order of USD 2.5m.  Pan commenced in rem proceedings against Comandate  in the Court under the Admiralty Act 1988 (Cth) and obtained the arrest of Comandate in Fremantle pursuant to a warrant issued on 9 June 2006.  Security was put up by or on behalf of Comandate Marine and Comandate was released from arrest on 14 June 2006. 

8. After some communications between the solicitors for the parties, the London solicitors for Comandate Marine sought an assurance that Pan would submit all disputes exclusively to arbitration under clause 45(b) of the time charter. Comandate Marine’s London solicitors indicated that failing the provision of such assurance, they were instructed to seek an anti-suit injunction in the High Court of Justice in London to restrain Pan taking any steps to prosecute its claims, or any of them, otherwise than in London arbitration. Pan was given until the morning (London time) of 22 June 2006 to respond. In this body of communication, Comandate Marine asserted a claim for over USD 4m for what it said were Pan’s breaches of the time charter.

9. On 20 June 2006, Emmett J made ex parte orders which, amongst other things, restrained Comandate Marine, until further order, from taking any step in the High Court of Justice or in any other court to restrain the continuation of the proceeding in the Court brought under the Admiralty Act. (This is the anti-anti-suit injunction to which I have referred. I will continue to use this expression in relation to this order as made and extended.) The notice of motion pursuant to which Emmett J made those orders came before the primary judge on 22 June 2006. On that day, for reasons which his Honour gave extempore, the primary judge made orders extending the anti-anti-suit injunction up to and including 13 July 2006. This was done principally to permit Pan to file its statement of claim under Rule 22 of the Admiralty Rules against Comandate Marine, and in this regard to protect the integrity of the Court’s processes. At the time the matter was before the primary judge on 22 June 2006, there was no notice of motion filed on behalf of Comandate Marine seeking a stay under the International Arbitration Act 1974 (Cth). The orders made by his Honour provided for the filing of such a motion by Comandate Marine. The following day, 23 June 2006, such a motion was served. It was filed on 4 July 2006. On 6 July 2006, a statement of claim was filed by Pan. On 11 July 2006, an amended statement of claim was filed by Pan.

10. The matter came before the primary judge again on 13 and 14 July 2006.  The questions before his Honour were whether the anti-anti-suit injunction should be extended and whether a stay of the proceedings of this Court should be given under the International Arbitration Act, or otherwise.  On 13 July 2006, after taking evidence and hearing argument over two days, his Honour reserved his decision on the stay application and extended the anti-anti-suit injunction until further order.  On 22 August 2006, the primary judge made an order dismissing the motion for a stay of the proceedings of the Court and left undisturbed the anti-anti-suit injunction: see Pan Australian Shipping Pty Ltd v The Ship ‘Comandate’ (No 2) [2006] FCA 1112.

1. It is necessary to describe other events of June and July.  On 14 June 2006, Comandate Marine’s London solicitors notified Pan of the commencement of the arbitration in London.  On 23 June 2006, that is on the day it served its notice of motion under the International Arbitration Act for a stay of the proceedings in this Court, Comandate Marine, as plaintiff, commenced in rem proceedings against Boomerang I.  In the early hours of Saturday 24 June 2006, Boomerang I was arrested in Fremantle.  There was an urgent application before me on the evening of Saturday 24 June for the setting aside of the writ and the arrest.  I did not deal with the substance of the arguments that evening, but I permitted Boomerang I to load and sail for the east coast:  see Comandate Marine Corp v The Ship ‘Boomerang I’ [2006] FCA 859. Before she arrived in Sydney, a Full Court sat on Tuesday 27 June 2006 exercising the original jurisdiction of the Court pursuant to a direction of the Chief Justice under s 20(1A) of the Federal Court of Australia Act 1976 (Cth), and set aside the writ and the arrest. The Court refused to accept the argument put on behalf of Comandate Marine that the surrogate ship arrest provided for by s 19 of the Admiralty Act could be availed of in circumstances where the relevant person (Pan) was the demise charterer of the ship: see Comandate Marine Corp v The Ship ‘Boomerang I’ (2006) 151 FCR 403.

   Pan’s Amended Statement of Claim

2. Before dealing with the orders and reasons of the primary judge, it is necessary to appreciate the terms of Pan’s claims against Comandate Marine.  They have a direct bearing on the claim by Comandate Marine for a stay.

3. The early paragraphs of the amended statement of claim plead the negotiations said to have been undertaken by the parties’ shipbrokers.  Pan’s broker was in Australia.  Comandate Marine’s broker was outside Australia.  It was alleged that in these negotiations Comandate Marine’s broker made six representations on behalf of Comandate Marine by the sending of various communications to Pan’s broker in Australia, as follows:

   ·that Comandate Marine would provide a master and crew who were capable of performing their respective obligations under the contemplated charter in the Australian coastal trade;

   ·that the master, officers and crew were and would be lawfully able to enter and work in Australia and Australian waters, and to discharge their respective obligations under the contemplated charter;

   ·that the vessel was and would be kept in a thoroughly efficient state in hull, machinery and equipment for and during the proposed service in the coastal trade;

   ·that the vessel would have a full complement of officers and crew for that purpose;

   ·that the vessel was and would be seaworthy in all respects; and

   ·that the vessel, its master and crew were and would be fit for service in the Australian coastal trade.

4. It was said that the making of these representations amounted to conduct in trade and commerce within the meaning of the Trade Practices Act 1974 (Cth). Importantly, it is to be noted that these representations arose wholly from the negotiations leading up to the fixing of the vessel. The conduct included the sending of a telex on 7 April 2006 confirming discussions on terms and the sending of a pro forma charterparty relating to an earlier and unrelated fixture between the disponent owners of Comandate and an entity called Asiatic Shipping Services dated 1 February 2005 that was used as a basis for discussion and the making of a counter offer on 14 April 2006.  Thus, the conduct said to give rise to the claims under the Trade Practices Act was within the confines of the body of negotiations which culminated in the time charter and concerned the subject and operation of that anticipated contract.  It is also worthy of note that each of the representations can be seen to be reflected in the language of the terms (express and implied) of the time charter that were pleaded and that are referred to below.

5. To the extent that the above representations were in respect of future matters, it was said that Comandate Marine did not have reasonable grounds for making them. Reliance was placed on s 51A(2) of the Trade Practices Act; but the absence of reasonable grounds was also said to be inferred from facts otherwise pleaded: the detention of the vessel by the Australian Maritime Safety Authority (AMSA) for various deficiencies in Comandate identified by it in the exercise of its inspection functions; deficiencies identified by a surveyor on 7 May 2006; a hull fracture identified by those on board tugs assisting Comandate on 22 May 2006; and the absence of appropriate visas for, and immigration documentation of, the master and crew.

6. The pleading asserted that on 19 and 20 April 2006 Comandate Marine accepted by email a counter offer made by Pan on 19 April 2006, for the time charter of the ship, subject to Pan providing a bank guarantee.  In the alternative, it was also pleaded that on 20 August 2006 Comandate offered to have the vessel with master and crew for service in the Australian coastal trade, which was accepted by accepting delivery of the vessel in Singapore on 22 April 2006.  The assertions as to the formation of the contract of time charter became more precise at the hearing on 13 and 14 July 2006.  I deal with them in some more detail below.  They are of importance to the application and operation of the International Arbitration Act and to the application for a stay sought by Comandate Marine thereunder.

7. The pleading then asserted various express terms from clauses 2, 5, 6, 8, 28, 88 and 92 of the pro forma charterparty.  It also pleaded various implied terms as follows:

   ·that the vessel was seaworthy;

   ·that the vessel was in all respects fit for service in the Australian coastal trade;

   ·that the vessel complied with flag and class requirements;

   ·that the master, officers and crew were lawfully able to enter Australia so as to command and crew the vessel in accordance with the express terms of the charter; and

   ·that the master, officers and crew were capable of performing their respective obligations under the charter.

8. The entry into the charterparty was said to have been in reliance on the representations being the conduct for the purposes of the Trade Practice Act.

9. The upshot of the master and crew not possessing appropriate visa and other immigration documentation was that on completion of necessary repairs to permit the lifting of the detention of Comandate by AMSA, she was only permitted to sail for a foreign port with that crew.  The master and crew were not to be granted bridging visas to allow them to remain in Australia and were to be required to apply for any appropriate visas from outside Australia.  Comandate Marine therefore made arrangements for Comandate to proceed to Singapore.  The pleading then asserted that an offer was made by Pan, without prejudice and without admissions, to repatriate the existing crew and replace them with a crew arranged by Pan through an Australian company.  This offer was said to have been refused by Comandate Marine.

10. The pleading asserted that the conduct comprising the pleaded representations was misleading or deceptive or likely to mislead or deceive.  The particulars to this allegation were as follows:

    ·    Comandate Marine did not provide a master and crew who were capable of performing their respective obligations under the contemplated charter in the Australian coastal trade;

    ·    Comandate Marine failed to ensure the master, officers and crew were lawfully able to enter and work in Australia and Australian waters, and to discharge their respective obligations under the contemplated charter;

    ·    the vessel was not kept in a thoroughly efficient state in hull, machinery and equipment for and during the proposed service in the coastal trade;

    ·    the vessel did not have a full complement of officers and crew for that purpose;

    ·    the vessel was not seaworthy in all respects;

    ·    the vessel, its master and crew were unfit for service in the Australian coastal trade;

    ·    Comandate Marine did not have a reasonable basis for the representations in respect of future matters at the time they were made;

    Pan also referred to matters referred to earlier in the pleading, relied upon s 51A of the Trade Practice Act and reserved the right to provide further particulars following discovery and interrogatories.

11. An alternative count based on s 55A of the Trade Practice Act was pleaded stating that Comandate Marine had engaged in conduct liable to mislead as to the characteristics and suitability for purpose of services.

12. The pleading asserted that by refusing to sail to Sydney pursuant to instructions and stating an intention to sail for Singapore, and by its conduct otherwise, including the breaches pleaded, Comandate Marine evinced an intention not to be bound by the time charter.  The pleading also asserted that the various deficiencies of ship and crew were also fundamental breaches of the pleaded express and implied terms of the time charter amounting to repudiation.  It was asserted that Comandate Marine’s repudiation was accepted on 10 June 2006.

13. These assertions were followed by a final section of the pleading which sought to take advantage of the conduct of Comandate Marine in commencing in rem proceedings against, and arresting, Boomerang I.  It was said that by the commencement and pursuit of those proceedings in the Court and the taking of steps and the seeking of special leave in the High Court of Australia Comandate Marine had elected to submit the resolution of all disputes arising out of or in relation to the time charter to the Federal Court of Australia or that it had waived its right to have any disputes arising out of the time charter referred to arbitration.

14. As to relief, Pan claimed damages under s 82 of the Trade Practices Act caused by the pleaded conduct and also for the contractual breaches of the time charter. The same particulars of damage were given to these two claims for damages. The pleading also claimed an order under s 87 of the Trade Practices Act setting aside ab initio the time charter.  Various other orders were sought.

    The provisions of the International Arbitration Act and Comandate Marine’s notice of motion

15. The notice of motion of Comandate Marine before the primary judge sought a stay on a number of bases.  Most importantly, a stay was sought by reason of the International Arbitration Act. In this respect the motion raised, and this appeal raises, important issues as to the operation of that Act. 

16. Section 7(2) of the International Arbitration Act provides for a mandatory stay of legal proceedings where there is an arbitration clause applicable to the resolution of the dispute when s 7(1) makes the section applicable. The terms of s 7 are as follows:

    “(1)     Where:

    (a)the procedure in relation to arbitration under an arbitration agreement is governed, whether by virtue of the express terms of the agreement or otherwise, by the law of a Convention country;

    (b)the procedure in relation to arbitration under an arbitration agreement is governed, whether by virtue of the express terms of the agreement or otherwise, by the law of a country not being Australia or a Convention country, and a party to the agreement is Australia or a State or a person who was, at the time when the agreement was made, domiciled or ordinarily resident in Australia;

    (c)a party to an arbitration agreement is the Government of a Convention country or of part of a Convention country or the Government of a territory of a Convention country, being a territory to which the Convention extends; or

    (d)a party to an arbitration agreement is a person who was, at the time when the agreement was made, domiciled or ordinarily resident in a country that is a Convention country;

    this section applies to the agreement.

    (2)      Subject to this Part, where:

    (a)proceedings instituted by a party to an arbitration agreement to which this section applies against another party to the agreement are pending in a court; and

    (b)the proceedings involve the determination of a matter that, in pursuance of the agreement, is capable of settlement by arbitration;

    on the application of a party to the agreement, the court shall, by order, upon such conditions (if any) as it thinks fit, stay the proceedings or so much of the proceedings as involves the determination of that matter, as the case may be, and refer the parties to arbitration in respect of that matter.

    (3)Where a court makes an order under subsection (2), it may, for the purpose of preserving the rights of the parties, make such interim or supplementary orders as it thinks fit in relation to any property that is the subject of the matter to which the first-mentioned order relates.

    (4)For the purposes of subsections (2) and (3), a reference to a party includes a reference to a person claiming through or under a party.

    (5)A court shall not make an order under subsection (2) if the court finds that the arbitration agreement is null and void, inoperative or incapable of being performed.”

    There was no dispute but that s 7(1) made the International Arbitration Act relevant.

17. The phrase “arbitration agreement” is defined in s 3(1) of the International Arbitration Act as follows:

    “arbitration agreement means an agreement in writing of the kind referred to in sub-article 1 of Article II of the Convention.”

18. The “Convention” there mentioned is defined in s 3(1) of the International Arbitration Act as “the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted in 1958 by the United Nations Conference on International Commercial Arbitration at its 24^th meeting, a copy of the English text of which is set out in Schedule 1”, well known, of course, as the New York Convention.

19. Article II of the Convention is in the following terms:

    “1.      Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen on which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.

    2.        The term ‘agreement in writing’ shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams.

    3.        The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.”

20. The International Arbitration Act was the fulfilment of Australia’s international obligations arising from its accession to the Convention.  Section 7 was the placement into Australian domestic law of the elements of the Convention reflected in Article II and elsewhere in the Convention that Contracting States should take steps to recognise and enforce the contractual will of parties to submit their disputes to international arbitration.

21. In 1989, amendments were made to the International Arbitration Act by the International Arbitration Amendment Act 1989 (Act No 25 of 1989) to implement the Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law (“UNCITRAL”) on 21 June 1985, the English text of which is set out in Schedule 2 of the International Arbitration Act (the “Model Law”). Section 16(1) of the International Arbitration Act provides that, subject to Part III, the Model Law has the force of law in Australia.

22. Section 17 of the International Arbitration Act is in the following terms:

    (1) For the purposes of interpreting the Model Law, reference may be made to the documents of:

    (a)    the United Nations Commission on International Trade Law; and

    (b) its working group for the preparation of the Model Law;

    relating to the Model Law.

    (2) Subsection (1) does not affect the application of section 15AB of the Acts Interpretation Act 1901 for the purposes of interpreting this Part.”

23. Article 1 deals with scope of application of the Model Law and relevantly is in the following terms:

    “Article 1. Scope of application ^*

    (1)This Law applies to international commercial ^** arbitration, subject to any agreement in force between this State and any other State or States.

    (2)The provisions of this Law, except articles 8, 9, 35 and 36, apply only if the place of arbitration is in the territory of this State.

    …

    (5)This Law shall not affect any other law of this State by virtue of which certain disputes may not be submitted to arbitration or may be submitted to arbitration only according to provisions other than those of this Law.

    *    Article headings are for reference purposes only and are not to be used for purposes of interpretation.

    **  The term ‘commercial’ should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of a commercial nature include, but are not limited to, the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of industrial or business co-operation; carriage of goods or passengers by air, sea, rail or road.”

    There was no dispute that the time charter here and the location and characteristics of the parties made any arbitration under clause 45(b) of NYPE 93 an international commercial arbitration for the purpose of the Model Law.

24. Given that the place of the arbitration pursuant to clause 45(b) of the time charter was not Australia (“this State” in Article 1(2) meaning Australia: s 16(2) of the International Arbitration Act) only articles 8, 9, 35 and 36 of the Model Law expressly apply here. Articles 35 and 36 deal with recognition and enforcement of foreign awards and are irrelevant to the resolution of this dispute in their operation. Though Article 7 is not expressly picked up by Article 1(2), the terms of Article 8 include the phrase “arbitration agreement” which is defined in Article 7. It is therefore convenient to set out the terms of Articles 7, 8 and 9 of the Model Law:

    “Article 7. Definition and form of arbitration agreement

    (1)‘Arbitration agreement’ is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.

    (2)The arbitration agreement shall be in writing. An agreement is in writing if it is contained in a document signed by the parties or in an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement, or in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by another. The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement provided that the contract is in writing and the reference is such as to make that clause part of the contract.

    Article 8. Arbitration agreement and substantive claim before court

    (1)A court before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so requests not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed.

    (2)Where an action referred to in paragraph (1) of this article has been brought, arbitral proceedings may nevertheless be commenced or continued, and an award may be made, while the issue is pending before the court.

    Article 9. Arbitration agreement and interim measures by court

    It is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection and for a court to grant such measure.”

1. Reading s 16(1) of the International Arbitration Act and the Model Law together, Article 1 would appear to be given the force of law in Australia even where, as here, the arbitration is foreign. Other provisions relevant to the operation of Article 8 are not expressly made applicable by Article 1(2): Article 2 contains definitions and rules of interpretation; and Article 3 deals with receipt of written communications (relevant to the formation of the relevant arbitration agreement). There is no explanation for these omissions in the comprehensive work by Holtzmann, HM and Neuhaus, JE on the travaux préparatoires to the Model Law: A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and Commentary (Kluwer, the TMC Asser Institute 1989).

2. It will be necessary to refer to other provisions of the International Arbitration Act, the Convention and the Model Law and to the content of those various provisions later in these reasons.

   The issues on appeal and my conclusions in summary form

3. There were numerous issues argued on the appeal.  To assist in the understanding of these reasons I set out the issues in six groups in the order in which they fall for consideration and my views in summary on them.

4. The first group of issues concerns the assertions by Pan that Comandate Marine waived or elected to abandon the London arbitration by its conduct.  If Pan is correct in this respect, the later questions as to the extent of the arbitration agreement, the meaning and operation of the International Arbitration Act, and other discretionary considerations do not arise.  For the purpose of these issues an arbitration agreement with ample relevant scope can be assumed.  My views are that the primary judge erred in his conclusion that there had been waiver and election and that Pan fails on all these arguments.  It is therefore necessary to move to the next group of issues.

5. The second group of issues is whether there was an agreement in writing so that there can be an agreement for the purposes of the operation of the International Arbitration Act. My views are that the primary judge erred in concluding that there was no agreement in writing for the purposes of the International Arbitration Act. 

6. The third group of issues concerns the proper scope of the arbitration clause here, and, in particular, whether it is wide enough to encompass the Trade Practices Act claims. My views are that the primary judge erred in construing clause 45(b) too narrowly and that the clause is sufficiently wide to cover all the disputes between the parties.

7. The fourth group of issues concerns the operation of the International Arbitration Act. My views are that Comandate Marine is entitled to an unconditional stay based on Article 8 of the Model Law and s 7 of the International Arbitration Act.

8. The fifth group of issues concerns other possible basis for a stay assuming no order under the International Arbitration Act. It is unnecessary to deal with these issues.

9. The sixth group of issues concerns the anti-anti-suit injunction.  My view is that the anti-anti-suit injunction should be dissolved.

   The first group of issues:  whether Comandate Marine by its conduct elected to waive or abandon, waived, abandoned, or otherwise lost its right to insist on arbitration

10. The primary judge concluded that Comandate Marine had elected not to pursue its arbitration proceedings by beginning its in rem proceedings against Boomerang I without placing on the writ its intention to seek a stay under s 29 of the Admiralty Act or otherwise indicating on the writ that the proceeding was brought solely for the purpose of obtaining security for the London arbitration. Secondly, he concluded that by the conduct of both parties in electing to litigate in the Court the arbitration agreement had been, in substance, abandoned. So his Honour concluded that the arbitration agreement was either “incapable of being performed” or “inoperative” for the purposes of s 7(5) of the International Arbitration Act.

11. Pan sought in argument to bolster these conclusions by putting the matter in two other ways.  First, it said that the filing of the in rem writ against Boomerang I was the acceptance by Comandate Marine of Pan’s repudiation of the arbitration agreement; and, secondly, it said that there was an implied contractual abandonment of the arbitration agreement.  These ways of putting the matter were formalised in a notice of contention filed after the hearing on 1 November 2006.  (It was not submitted by Pan that Comandate Marine’s conduct was itself a repudiation of the arbitration agreement.  Though, in fairness, it was said to be an abandonment of the arbitration agreement.)

12. For the reasons that follow, in my view: the primary judge erred in reaching the conclusions that he did, Pan should not be permitted to raise the new ways of putting the matter on appeal and, even if Pan be permitted to do so, on the material before the Court, it should not be concluded that there was an acceptance by Comandate Marine of a repudiation by Pan or that the parties had impliedly agreed to abandon the arbitration.

13. Central to the reasoning of the primary judge was the form of relief in the writ in rem filed on 23 June 2006 and served on the ship, together with the arrest warrant, late on 23 June or in the early hours of 24 June 2006.  The writ was, relevantly, in the following terms:

    “BY THIS WRIT the Plaintiff commences action against the Ship specified below.

    DATE OF ISSUE:     23 June 2006

    PARTICULARS OF PROPERTY:   The Ship “Boomerang 1” registered in Cyprus.

    AMOUNT CLAIMED OR OTHER RELIEF SOUGHT:

    1.arrest of the ship “Boomerang I”;

    2.damages;

    3.interest;

    4.costs.

    PARTICULARS OF CLAIM:

    1.   The Plaintiff’s claim is for damages for breach of a time charter entered into between the Plaintiff and Pan Australia Shipping Pty Ltd on or about 19 April 2006 in respect of the ship “Comandate”.  In breach of the time charter, Pan Australia Shipping Pty Ltd has:

    (a)failed to obtain valid crew visas for the intended trade of the ship “Comandate”;

    (b)wrongfully terminated the charter in respect of the ship “Comandate”; and

    (c)failed to make hire payments due under the time charter.

    The Court’s jurisdiction in respect of this claim arises under sections 10, 17 and 4(3)(d), (f), (o) and (w) of the Admiralty Act.

    RELEVANT PERSON:

    Pan Australia Shipping Pty Ltd
    the demise or bareboat charterer of the vessel “Boomerang 1”

    …

    TO THE DEFENDANT

    If you wish to defend this claim, you must, within 21 days after this writ is served on you, file an appearance.”

14. The writ was based on Form 6 of the Admiralty Rules. In Form 6, adjacent to the heading “relevant person” there is a footnote which states: “Refer to Rule 15 and specify the relevant person in relation to the claim, if known to the plaintiff.” Rule 15 is in the following terms:

    “(1)Initiating process in a proceeding commenced as an action in rem shall specify a relevant person in relation to the maritime claim concerned as a defendant.

    (2) A relevant person may be specified by reference to ownership of, or other relevant relationship with, the ship or other property concerned.”

15. The phrase “relevant person” is defined in s 3(1) of the Admiralty Act as meaning in relation to a maritime claim a person who would be liable on the claim in a proceeding commenced as an action in personam.  As to its meaning, see Owners of the Motor Vessel ‘Iran Amanat’ v KMP Coastal Oil Pte Ltd (1999) 196 CLR 130.

16. Section 29 of the Admiralty Act provides for the staying of proceedings commenced under the Admiralty Act in favour of arbitration (in Australia or elsewhere) or litigation elsewhere on condition that the ship or other property be retained as security for the award or judgment in the arbitration or litigation.  Thus, in practice, in rem proceedings can be commenced only as security for foreign arbitration or litigation.  In the practice of Admiralty in Australia, a regular occurrence is the arrest of a ship under in rem proceedings without any further in personam proceeding occurring. That is, ships are regularly arrested for security for an arbitration award or foreign judgment.

17. In my respectful view, the first error committed by the primary judge was to posit the existence, at the point of the filing and serving of the writ in rem, of two mutually inconsistent rights, the exercise of one of which was inconsistent with the existence of the other.  Comandate Marine was a party to a contract whereby it had agreed to submit disputes between it and Pan under the time charter exclusively to arbitration.  It commenced that arbitration.  It commenced in rem proceedings against the ship.  This is an action against the ship itself:  Aichhorn & Co KG v The Ship MV ‘Talabot’ (1974) 132 CLR 449 at 455-56. Upon the entry of appearance by the relevant person the action proceeds also as if it were an action in personam, though it does not cease to be an action in rem:  Caltex Oil (Australia) Pty Ltd v The Dredge ‘Willemstad’ (1976) 136 CLR 529 at 538. For present purposes, however, in dealing with the question of an election between mutually inconsistent rights, it is unnecessary to stress the in rem character of the action, and the in rem action can be assumed to be an action between Pan and Comandate Marine.  I will deal with the correctness of this assumption in due course.

18. The commencement of the action in rem may have greater, or lesser, significance depending upon the circumstances.  It is not necessary to conclude that such an act cannot, in any circumstances, amount to a repudiation of an agreement to resolve disputes in a particular way.  All the relevant circumstances would need to be examined in order to assess that.  The approach of the primary judge was to ascribe a significance to the writ, in the form it took, as inconsistent with the continued existence of the entitlement and obligation to take the dispute between Pan and Comandate Marine exclusively to arbitration.  There are a number of difficulties with this conclusion. 

19. The principal difficulty is the absence of two mutually inconsistent rights, in the sense that exercise of one presupposes the non-existence of the other.  I agree with Austin J in ACD Tridon Inc v Tridon Australia Pty Ltd [2002] NSWSC 896 at [58] that the selection of the method of dispute resolution is not between inconsistent rights. See also Yimin Zhang v Shanghai Wool and Jute Textile Co Ltd [2006] VSCA 133 at [15] per Chernov JA, with whom Ashley JA and Bongiorno AJA agreed at [28] and [29], respectively. The notion of inconsistent rights was explained by Stephen J in Sargent v ASL Developments Ltd (1974) 131 CLR 634 at 641-2: the rights are inconsistent if neither may be enjoyed without the extinction of the other. For instance, when a contract is repudiated the innocent party either accepts the repudiation and ends the contract or chooses not to end the contract. Both cannot be done – the contract is either ended or on foot. A litigant who has bound itself to arbitrate and commences so to do and who files court proceedings as well may be acting oppressively or abusively and may be in breach of contract, but has not elected between inconsistent rights. Here, the filing of the writ did not extinguish the rights under the arbitration agreement; it may or may not have constituted, or formed part of, an inconsistent course of conduct; it may or may not have amounted to a breach of contract; but it did not cause or presuppose the extinction of the rights under the arbitration agreement. To express the matter in the terms of Professor Hohfeld used by Mr Justice Handley in Estoppel by Conduct and Election (Thomson/Sweet and Maxwell 2006) at 230-231:

    “The elector has a power to change the legal rights and duties of himself and another with a corresponding liability in that other to submit to the change.”

20. Undoubtedly, the institution of some legal proceedings can work an election in some circumstances:  the commencement of ejectment proceedings effects a forfeiture:  Scarf v Jardine (1882) LR 7 App Cas 345 at 361; commencement of proceedings to enforce a contract which could be rescinded for fraud or other cause is an election to affirm; many other examples could be given. No such inconsistency arises here.

21. It was likely, and no doubt assumed by those advising Comandate Marine, that Pan would, in some fashion, move to protect the ship of which it was demise charterer.  Indeed, Pan’s first (and only) substantive step in the proceeding after filing an appearance was to challenge (successfully) the authority of the Court to hear the in rem action. There can have been little doubt in those who advised Comandate Marine that there would be a debate about the validity of the invocation of the authority of the Court given the terms of s 19 of the Admiralty Act and the well-known jurisprudence discussed in the reasons of the Full Court:  see Comandate Marine Corp v The Ship ‘Boomerang I’ (2006) 151 FCR 403 at 407-409 [18]-[26]. If s 19 were validly invoked, Comandate Marine could use s 29 to stay the action once security had been put up. If Pan did not appear (an unlikely, but theoretical, scenario) Comandate Marine would have had to decide whether to press on or otherwise make an application under s 29. I do not see how the form of the writ, without an endorsement as to an intention to use s 29 of the Admiralty Act was decisive.  Ordinarily, there is nothing conclusive about the form in which a writ is issued or about the claims made in a writ:  see United Australia Limited v Barclays Bank Limited [1941] AC 1 at 18-19. Taken alone, the commencement of the in rem action did not work an election or waiver of any right to arbitrate.  There was no step by Comandate Marine unequivocably inconsistent with the existence of the right and obligation to arbitrate.

22. This is not to say that legal proceedings may not be conducted to such a point that the only conclusion is that the party can be taken to have waived or abandoned the right to arbitrate: cf The Commonwealth of Australia  v Verwayen (1990) 170 CLR 394 at 472 per Toohey J. Thus, at this point it is necessary to appreciate the balance of the evidence insofar as it bears on the conduct of the parties, in particular the whole context of the commencement of, and abortive attempt to prosecute, the Boomerang I proceedings in order to see whether Comandate Marine waived (in the sense of abandoning) the right to arbitrate and to assess the two new ways the matter was put on appeal: implied contractual abandonment and acceptance by Comandate Marine of the asserted repudiation by Pan. 

23. The facts earlier set out provide the background to the commencement of the in rem action against Boomerang I and her arrest.  The following further facts are also relevant.  I have ignored the time differences between Sydney, London and New York in discussing these events.

24. After the arrest of Comandate on 9 June 2006, a letter of guarantee was provided on behalf of Comandate Marine on 13 June 2006.  On 14 June 2006, a number of things occurred: a conditional appearance was filed by Comandate Marine; Comandate was released; and Comandate Marine in a letter to Pan articulated, and gave particulars of, its claim against Pan in excess of USD 4m, gave formal notice of the commencement of the arbitration and appointed an arbitrator on its behalf.

25. On 15 June 2006, Mr O’Neil of Stephenson Harwood (Comandate Marine’s London solicitors) sent an email to Ms Wilmshurst of Ebsworth & Ebsworth (Pan’s Sydney solicitors).  This email was sent in the context of some telephone discussions of which there was no direct evidence.  It is unnecessary to deal with most of the email that was concerned largely with the perceived relative merits, or lack thereof, of the parties’ respective claims.  Importantly, however, Mr O’Neil made an unequivocal request for a statement from Pan as to the arbitration clause.  He said:

    “Finally, please confirm by tomorrow morning that your clients accept and will abide by the exclusive English law and arbitration provisions provided under the governing Charter, or whether they will seek to have this dispute resolved and or litigated in Australia.  Unless we have your unequivocal confirmation by tomorrow morning our time, we hereby place you on formal notice that we will have no choice but to apply for an anti-suit injunction in the English High Court on Monday to restrain any substantive proceedings in Australia.  Please be guided accordingly and we reserve all of our clients rights on costs in the event that such an application is necessary.”

26. On the following day, 16 June 2006, Ms Wilmshurst respondent to this part of Mr O’Neil’s email as follows:

    “The threatened anti-suit injunction is, in our view, misconceived.  If your client is minded to seek a stay of the in rem action, we will obtain instructions in relation to our client’s attitude to such an application including the costs of the proceeding to date.”

27. Mr O’Neil respondent to this part of Ms Wilmshurst’s email was as follows:

    “Unless you revert now as requested yesterday with your clients’ unequivocal agreement and affirmation that any and all disputes between them and owners will be resolved in accordance with English Law and arbitration as provided by Clause 45 of the governing CP, we will proceed as previously notified and will recover the costs of doing so against your clients.  You have formal notice of our intentions.”

    The parties had also been discussing the provision of security by Pan for Comandate Marine’s claim.  As to this, in this same email, Mr O’Neil stated:

    “Absent the voluntary provision of security, our clients will now take whatever steps are necessary to properly secure their claim.”

28. Twenty minutes later (it is not clear whether there had been an intervening telephone discussion), Mr O’Neil once again taxed Ms Wilmshurst for her instructions about the arbitration, saying:

    “I repeat that I now want your clients’ categoric and unequivocal agreement, confirmation and affirmation that all disputes between our clients will be resolved exclusively in accordance with the dispute resolution clause of the CP, i.e. English law and arbitration.  Nothing less will do.  You are on Notice.”

29. A conversation between Mr O’Neil and Ms Wilmshurst then took place (still on 16 June), following which Ms Wilmshurst sent an email stating:

    “Further to our conversation of a moment ago, I do not have Charterers’ instructions on the matter you have sought an unequivocal response upon through the course of your day today.  Should you wish to attempt to construe my comments as being confirmation of our client’s position then you will be deliberately misconstruing the position.

    Personally I had thought that we have had a professional and constructive dialogue to date and hope this can continue.”

30. Later still on 16 June, Mr O’Neil responded in a short email, the totality of which was as follows:

    “You know what we want and you are deliberately equivocating.  You have until our Monday morning to respond as requested.”

31. The strength of the correspondence from Mr O’Neil caused Ms Wilmshurst to express her views more than once (by way of suggestion) that Mr O’Neil “tone down” his correspondence.  Whether or not the tone of Mr O’Neil’s communications was appropriate need not be debated.  What was clear, however, was the blunt and forceful proposition put forward by him that his client wished to arbitrate and that his client demanded an unequivocal acceptance by Pan that it would submit all disputes to arbitration in accordance with the disputes.

32. Also on 16 June, Comandate Marine commenced proceedings in the United States District Court, Southern District of New York claiming maritime attachment under Rule B of the Supplemental Rules for Certain Admiralty and Maritime Claims.  The Verified Complaint filed stated that Comandate Marine sought the “issuance of process of maritime attachment so that it may obtain security for its claims against [Pan].”  The complaint made clear the existence of the arbitration.  On the same day, an order for maritime attachment was made by Judge Crotty of the United States District Court.

1. On 17 June 2006, Ebsworth & Ebsworth sent by facsimile a letter to Stephenson Harwood. In the light of Pan’s submissions on appeal that it (Pan) had repudiated its own obligations under the arbitration agreement by 23 June 2006, it is necessary to set the letter out in full:

   “We refer to our emails dated 15 and 16 June 2006.

   We note that your client will apply for an anti-suit injunction on Monday morning unless our client provides by then its “categoric and unequivocal agreement, confirmation and affirmation that all disputes between our clients will be resolved exclusively in accordance with the dispute resolution clause”.

   As you know, we have indicated that it is our view the application you intend to bring is misconceived and entirely inappropriate at this stage.  The reasons for this view on our part include the following:

   1.Our clients commenced in rem proceedings in the Australian Courts to obtain security for the claim against your client and the Australian Courts clearly have jurisdiction in relation to such arrest proceedings.

   2.It is not a breach of the arbitration clause to have brought such proceedings in the Australian Court.

   3.Owners only appointed their arbitrator on 14 June.

   4.Charterers are considering their position and will respond to Owners’ appointment of an arbitrator at an appropriate time which will be within a matter of days.

   5.Charterers have not commenced in personam proceedings in Australia, nor have they threatened to do so at any stage.

   6.You have provided nothing to suggest that there is such urgency that our client should not be entitled to provide instructions on the confirmation you have sought within a reasonable time frame rather than within the 24 hour period prescribed in your initial demand.

   We understand that pursuant to the Protocol Practice Direction, litigation should be viewed as the last resort, not the first resort.  The heavy-handed approach adopted by your client in respect of the foreshadowed application is inconsistent with the obligations under this document.

   Any application for an anti-suit injunction should be made on notice by summons, and our client is able to make appropriate arrangements for service.  There is no justification whatsoever for an urgent ex-parte application.  If, regardless of this, your client proceeds with an ex-parte application then we ask that a copy of this letter and our emails dated 16 June 2006 are shown to the Court.”

2. The letter was astute (as Ms Wilmshurst had been in her prior emails and, to the extent one can infer from them, in conversation) not to deny the binding nature of the arbitration agreement.

3. Mr O’Neil’s response was by email on 17 June and conformed with the direct and uncompromising tone and content of earlier correspondence from him.  It stated:

   “Thank you for your fax which will of course be brought to the Court’s attention.

   Once again, you have sought to avoid directly answering my very simple request, attempting to justify you avoidance and delay on the basis that you have had insufficient time to take instructions.  Your points 4, 5 and 6 equivocate further.

   We will be applying to Court on Monday or Tuesday of next week and you are on notice of this fact.  You have had more than sufficient time to seek instructions from your clients as to whether they agree that all disputes between them arising under and/or in connection with the CP will and should be exclusively resolved in accordance with the English law and arbitration provision of the CP.  The fact that they (and you) have not confirmed and affirmed this immediately is very telling.

   The issue is very simple.  Are your clients intending to bring in personam proceedings in Australia, yes or no?

   I look forward to hearing from you.”

4. Ms Wilmshurst’s response, again on 17 June, was as follows:

   “Again you are speculating without any basis.  As you know I intend to take instructions and revert but do not consider your heavy-handed approach means that it must be within the unreasonable time frames that you are seeking to dictate.”

5. On 19 June 2006, Mr O’Neil sent a two page facsimile to Ms Wilmshurst.  Again because of Pan’s submission as to its  own repudiation and the acceptance of it by Comandate Marine it is necessary to set out this letter in full:

   “We refer to your fax of 17 June 2006.  Obviously there are a number of matters contained within your fax about which we do not agree, some of which need to be addressed.  On behalf of our client we have since Thursday 15 June 2006 been asking you to answer what is, with respect, a very straight forward question.  Despite repeated opportunities to do so you have failed completely to answer the pertinent question, namely, does your client intend to honour its contractual agreement as evidenced in the arbitration clause of the Charter?

   Because you have deliberately refused to answer this simple question we have taken steps to prepare for an urgent ex parte application for the issue of an anti-suit injunction to restrain your client from continuing or prosecuting any proceedings against our client otherwise than via the mechanism contemplated in the Charter.  You have been no [sic] notice of our client’s intended course of action for adequate time.  Contrary to your self-serving protestation your client has been allowed more than sufficient time to consider its position (especially when contrasted with the notice our client received prior to the arrest of the vessel).

   On 14 June 2006 your Partner Mr Drew James inquired whether our client would be agreeable to all disputes being determined in the Federal Court of Australia or whether they press for those matters to be determined by way of London arbitration.  It is clear from service of the Notice of Commencement later that same day that Owners want to give effect to the contractual bargain and do not consent to a non-contractual jurisdiction.

   On 16 June 2006 you asked whether it was my client’s intention to seek a stay of the in rem proceedings.  The critical question in that regard is whether your client would agree to a stay of those proceedings in favour of having the dispute resolved by way of London arbitration in accordance with the arbitration clause in the Charter?  Clearly this is an issue that you have turned your mind to and one about which from your correspondence it is reasonable to assume that you have discussed with your client.  As mentioned above we are instructed to (and are ready to execute) apply for an anti-suit injunction against your client to give effect to the parties agreement.  We intend to appear before the Court on  that application on Thursday 22 June 2006.  By that date you will have been on notice of the application for 7 days, which on any view is a reasonable period of time.

   We therefore request your clear and unequivocal answer to the question of whether your client would agree to a stay of the Australia in rem proceedings?  Please answer this question on or before our opening Thursday morning, 0800 hours local time or 1700 hours AEST.

   Please note, if you fail to answer the question whether our client will agree to a stay of the in rem proceedings in favour of London arbitration , or give a qualified/equivocal answer to same, we shall assume that to be conduct on instruction from your client evidencing an intention to refuse to abide by the terms of the Charter and will ask the Court to draw that inference when we appear for the anti-suit injunction.

   Finally, if your client is not prepared to unequivocally confirm that it will abide by its contractual bargain and agree to submit to the arbitration mechanism contained in the Charter (or fails to answer within time) it would be useful if you could nominate a firm of London solicitors who will be instructed on behalf of your client.

   We look forward to hearing from you.”
   [emphasis in original]

6. On the following day, 20 June 2006, Pan sought and was granted the anti-anti-suit injunction by Emmett J.  The matter came before Rares J at 11.10 am on 22 June 2006.  His Honour delivered extempore reasons between 4.34 pm and 5.17 pm.  The conduct of the motion that day occupies 73 pages of transcript.  In the light of Pan’s submission that its conduct leading up to 23 June was a repudiation of the arbitration agreement, it is necessary to refer to aspects of the transcript.  Pan was represented by Dr Bell who appeared with Mr Gray, Comandate Marine by Mr Street SC who appeared with Mr McLure.

7. The first matter discussed was the conditionality of the appearance of Comandate Marine.  It is unnecessary to deal with the discussion at length, but a concern was expressed by Mr Street about the creation of an in personam proceeding by the filing of an unconditional appearance.

8. In describing the purpose of the application for the anti-anti-suit injunction, Dr Bell said at pp 5, 6 and 8 of the transcript:

   “…What we seek to achieve, your Honour, by the relief we seek is to preserve the status quo in the classical sense. The status quo would allow, an appearance having been entered, these proceedings to run along to the stage that an in personam claim is filed setting out the causes of action sought to be pursued on behalf of the plaintiff and when and if that claim is filed it will be open to the defendant to move, if so advised, for any form of interlocutory relief in this court including a stay of the proceedings pursuant to the provisions of the International Arbitration Act.

   …

   …[T]he serious question to be tried relevantly is whether there is an arguable case that this court should move now in light of the evidence which I will identify shortly to preserve its own ability to control these proceedings including its ability under the International Arbitration Act to impose conditions which may or may not be considered appropriate by the court in relation to the future conduct both of these proceedings and if the court finds there is a binding arbitration agreement and the dispute is sought to be agitated by my client is otherwise within the scope of that arbitration agreement if the proceedings were otherwise to be stayed including the question of whether any such dispute is capable of settlement by arbitration.

   …

   The serious question to be tried is whether or not this court should on the basis of the material before the court, namely a claim at a very early stage where there has been a defective appearance up to now and where factual inquiries are still being undertaken, whether this court should act to preserve its ability under the International Arbitration Act, if that Act applies, to impose conditions to ensure that potential statutory claims aren't able to be shut out on the merits through the combined operation of an arbitration clause and a foreign government law clause as has happened to Australian statutory claims in the past as a result of the very kind of application which has been threatened by my learned friend's clients in England.

   In my submission, and this is why we put it on an interlocutory basis, what we wish is a time within the time contemplated by the rules of court, that is to say the time within which an in personam claim is to be filed to formulate fully the claim my clients seeks to make including formulation of potential Trade Practices Act claims and to hold the status quo until that time,

   …

   …obviously one of the reasons of relevance of the TPA claim is that there is a live issue as to whether or not such claims are capable of settlement by arbitration or the parties should be intended to have referred as Emmett J said in the Full Court in Kiukiang Korea [sic] whether you would attribute to the parties an intention to refer an Australian statutory claim to commercial men in London, etcetera, those sort of considerations

   …

   But also even if it is within the scope of this agreement, and we simply wish to, the reason this relief is being sought now, we wish to preserve the possibility of an argument that even if our friends establish that there is an arbitration agreement and even if they establish that some or all of an in personam claim falls within the scope of the arbitration agreement on its proper construction the court should still, we wish to preserve the ability ask the court to impose conditions of the kind Allsop J indicated which are designed to ensure that that claim is not defeated without ever being heard on its merits.  And the rationale of that, as I say, is the approach English courts take to picking up or not picking up relevantly strange statutory claims.”

9. It is unnecessary to set out further parts of the transcript.  It was plain that Dr Bell was putting Pan’s submission that there was a fear that an English Court would issue an anti-suit injunction thereby depriving Pan of the available arguments relevant to the operation of the International Arbitration Act, including the proper scope of the arbitration clause and the possibility of conditions on any stay.  It was made clear that Pan would rely heavily on the approach of the Full Court in Hi-Fert Pty Ltd v Kiukiang Maritime Carriers Inc (No 5) (1998) 90 FCR 1 (The ‘Kiukiang Career’). 

10. During the hearing Mr Street made it clear that Comandate Marine would move the Court for a stay under the International Arbitration Act.

11. Stopping at this point, if Pan is to show that the filing and serving of the writ on 23 June 2006 was an acceptance by Comandate Marine of a repudiation by Pan, it must be recognised that on 14 June 2006, Comandate Marine commenced the arbitration, thus waiving any right to accept any repudiation by Pan in commencing the in rem proceedings on 9 June 2006.  In any event, taking the whole of Pan’s conduct up to and including 22 June 2006, it is not clear to me that Pan evinced an intention not to be bound by the arbitration agreement.  Both Ms Wilmshurst and Dr Bell were carefully stating Pan’s position, and stopping short of repudiating any obligation under the arbitration clause.  They wanted issues concerning the arbitration clause addressed in Australia, in the first instance, under the International Arbitration Act.  That Ms Wilmshurst did not accede to Mr O’Neil’s demands does not necessarily amount to a repudiation.  Mr O’Neil’s views as to what his client was entitled and his demands therefor did not unilaterally set the boundary of conduct conforming to the contract.  Dr Bell relied on an English case in the Court of Appeal (Downing v Al Tameer Establishment [2002] EWCA Civ 721) in support of the propositions that his client had repudiated the arbitration agreement and that Comandate Marine had accepted that repudiation. I find no assistance in the case in this respect. The questions whether a party’s conduct evinces an intention not to be bound by a contract or whether another party has accepted such is not to be answered by examining the different facts of another entirely unrelated case or even one with some similarities. To the extent that the case was cited for the proposition that a refusal to answer questions such as those posed by Mr O’Neil of Mr Wilmshurst was repudiatory conduct, it only needs to be said that no such legal principle exists. (The existence of the case may, however, in fairness to Mr O’Neil, explain why he thought it necessary or appropriate to engage in the correspondence that he did.)

12. The orders made on 22 June 2006 continued the anti-anti-suit injunction up to 13 July.  Orders 7, 8 and 10 dealt with the filing by Comandate Marine of its motion for a stay and by Pan of its statement of claim and provided for the hearing of the notice of motion, as follows:

    “7.Leave be granted to the defendant to file and serve on or before 5 pm 23 June 2006 an amended notice of motion seeking, as it may be advised, a stay under s 7 of the International Arbitration Act 1974 (Cth).

    8.The time for filing of any statement of claim under Order 22 of the Admiralty Rules 1988 (Cth) be extended to 12 noon on 5 July 2006.

    …

    10.The hearing of the amended notice of motion of the defendant to be filed pursuant to Order 2 [sic: 7] be provisionally fixed before Rares J at 10.15 am on 13 July 2006.”

13. Much was made in argument by Dr Bell that Comandate Marine did not comply with order 7.  The notice of motion was not filed and served on 23 June 2006, rather the in rem writ against Boomerang I was.  It was not filed until 4 July 2006.  This demonstrated, it was submitted, a clear change of approach which could be taken as reflective of a decision by Comandate Marine to litigate in Australia and not arbitrate in London.  One difficulty with this submission (indeed an obstacle of some size) was that though the notice of motion was not filed on 23 June 2006, it was served on Ebsworth & Ebsworth on that day.  Indeed at a subsequent directions hearing (on 7 July 2006) Dr Bell himself suggested to the primary judge that an order regularising the matter should be made, nunc pro tunc.  The judge did so.  Thus, the filing of the writ in rem against Boomerang I was in the context of Comandate Marine continuing to assert its wish for the dispute to be arbitrated.  I reject the submission of Dr Bell that the timing of this filing reflected a reversion to the previous course of action, after a failed attempt to litigate in court.  There is nothing to suggest that Comandate Marine ever evinced an intention to abandon the arbitration or that the filing of the notice of motion was not simply the completion of the steps taken on 23 June 2006 to comply with the primary judge’s order.

14. On the first day (Saturday) after the filing of the writ against Boomerang I, Pan filed an appearance as bareboat charterer and moved to set aside the writ.  The filing of an appearance by Pan marked the commencement of the time from which the action, if validly commenced, could be said to proceed as if it were an action in personam.  Comandate Marine did not file a statement of claim.  The order of the Full Court setting aside the writ made on Tuesday 27 June 2006 was stayed until 29 June 2006 to allow an application to the High Court of Australia.  On 28 June 2006, Comandate Marine filed a summons in the High Court of Australia seeking a stay of the orders of the Full Court and seeking the issue of a warrant for the re-arrest of Boomerang I.  Heydon J heard the motion on the following day and dismissed the summons.  Special leave, which was also sought, was later dismissed.

15. For the short life of the litigation represented by the in rem action against Boomerang I, the parties were focussed on the question of the statutory authority, or lack of it, for the invocation of the authority of the Court under Part III of the Admiralty Act.  No occasion for Comandate Marine arose to press an articulated claim in a statement of claim or otherwise.  No occasion arose for Comandate Marine to be taxed with the issue as to whether it was oppressive or abusive to be proceeding with an in personam claim and the arbitration. No occasion arose for Comandate Marine to apply for a stay under s 29 of the Admiralty Act.

16. The action against Boomerang I was capable of being prosecuted as a means of obtaining security for the arbitration. The parties had discussed Pan’s provision of security and Comandate Marine had obtained orders for maritime attachment in New York plainly for that purpose.  A strong, indeed strident, body of communication made plain Comandate Marine’s insistence on arbitration.  The filing of a writ which could be used to found an in personam claim against Pan prosecuted in this Court or which could be used for a more limited purpose contemplated by s 29 of the Admiralty Act did not unequivocably bespeak an abandonment of, or change to, that position.  At most, it can be seen as the making of a tactical move to obtain an advantage in a litigation landscape which was unfolding and which was uncertain.

17. I do not see how the failure to inscribe in the writ an intention to apply for a stay under s 29 of the Admiralty Act converts what was done into an abandonment of a position consistently maintained.  For the reasons that I expressed earlier, it was not a choice between inconsistent rights.  When one examines fully the context, it was not an unequivocal statement either that Comandate Marine wished to abandon the arbitration or accept any repudiation by Pan (even assuming that such occurred) of the arbitration agreement.

1. The circumstances here do not require answers to these questions.  I am prepared to proceed (without being taken to have decided the issue) on a basis favourable to Pan, that a claim under the Trade Practices Act for an order avoiding the arbitration agreement ab initio answers the description of “null and void” and that if a credible case for such is made out the Court should not grant a stay and should allow that issue to be heard by the Court before any arbitration.

2. It is at this point that the doctrine of separability becomes relevant.  Though a case has been propounded in the pleadings to the effect that the time charter was induced by conduct that was misleading or deceptive, no allegation of any kind is made to the effect that there was anything misleading or deceptive that concerned the reaching of agreement about the arbitration clause.  If one views the arbitration clause as an agreement separate from the substantive time charter, one can see that none of the allegations of misrepresentation is directed to the separate arbitration agreement.  The importance of this is highlighted by van den Berg, AJ op cit at 156 when he proffers an explanation for the dearth of case law on the question of the meaning of “null and void”, as follows:

   “…there are two reasons for which these matters will rarely occur in the practice, and have, indeed, not yet come up before the courts in relation to an action for the enforcement of an arbitration agreement under Article II(3).  The first reason is that the lack of consent must concern the arbitral clause specifically, in those countries where the separability doctrine is applied.  Under this doctrine, accepted in many countries, the lack of consent for the main contract does not necessarily constitute lack of consent for the arbitral clause contained in it. …  It must therefore be proven that the arbitral clause itself is tainted by misrepresentation, duress, fraud or undue influence.”
   [footnotes omitted]

3. This doctrine of separability (or severability or autonomy) that the arbitration clause is considered to be an agreement independent from the main contract has two principal aspects of importance.  First, the arbitrator can be seen to have a clear basis of jurisdiction to decide whether the substantive contract was void or voidable or should be rescinded, without destroying his or her own authority or jurisdiction to arbitrate.  Secondly, and underpinning this first question, the invalidity of the substantive contract does not necessarily entail the invalidity of the arbitration clause.  (For a discussion of these two interconnected notions, see Merkin, R op cit [5.40]-[5.45].)

4. Pan submitted that this doctrine of separability was not part of the law of Australia.  It submitted that the arbitration clause and the contract to which it related stood or fell together. Thus, it was said that it was not possible for an issue or allegation relating to the validity of the main contract to be considered by arbitrators and that an attack of the kind made on the time charter as a whole based on the asserted contraventions of the Trade Practices Act and the invocation of s 87 thereof was at once an attack on the arbitration clause as a constituent part of the time charter. Thus, the Court should not stay the proceedings, at least in respect of this claim to avoid the agreement.

5. In Ferris v Plaister (1994) 34 NSWLR 474, the New South Wales Court of Appeal decided that an arbitration clause is to be regarded as separate and severable from the main contract. The Court found that the doctrine of separability was part of the proper approach to analysing arbitration clauses and agreements: that it was part of the proper approach of the common law of Australia in that regard. The decision was unanimous, Kirby P, Mahoney JA and Clarke JA. The Court overruled its earlier decision, given only three years previously, in IBM Australia Ltd v National Distribution Services Ltd (1991) 22 NSWLR 466.  In Ferris v Plaister, Clarke JA was persuaded to alter his earlier expressed view, though it had only been expressed by way of obiter dicta in IBM.

6. This approach in Ferris v Plaister is in conformity with the development of the common law in other jurisdictions, as demonstrated in the detailed reasons of Kirby P and in the learned judgment of the primary judge in that case, Young J, as his Honour then was; see also Jacobs, M Commercial Arbitration Law and Practice (Lawbook Co) at [5.160]-[5.224].  In Harbour Assurance v Kansa General International Insurance Co Ltd [1993] QB 701 Steyn J exposed the difficulties involved in the approach of earlier authorities (all of which he found to be obiter dicta) in particular in Jureidini v National British and Irish Millers Insurance Company Ltd [1915] AC 499 and the majority in Heyman v Darwins Ltd [1942] AC 356, though the felt bound to decide against any approach in accordance with separability based on what he saw as the binding ratio in David Taylor & Son Ltd v Barnett Trading Co [1953] 1 Lloyd’s Rep 181. The Court of Appeal in Harbour Assurance [1993] QB 701, agreed with Steyn J’s expression of view and overturned David Taylor & Son v Barnett Trading Co.  The Arbitration Act 1996 (UK) now deals with the subject.

7. Article 16(1) of the Model Law sets out the doctrine of separability:

   “The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.”

   Article 16(1) does not apply here, however, in circumstances of a foreign arbitration: Article 1(2) of the Model Law.

8. All three judges in Ferris v Plaister gave, if I may respectfully say, powerfully reasoned decisions in favour of their conclusions.  I have no hesitation in following their approach in a co-ordinate intermediate appellate court dealing with an important aspect of commercial law in the common law of Australia, unless, as a matter of authority, this Court is bound not to do so. 

9. Pan argued that this Court was bound not to follow Ferris v Plaister because of what was said by Mason J in Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1981) 149 CLR 337 at 364-5 as follows:

   “Hirji Mulji decided that an arbitrator had no jurisdiction under an arbitration clause in a charterparty when the charterparty was terminated by frustration because the arbitration clause was brought to an end with the contract of which it formed part. In Heyman the House of Lords decided that an arbitration clause, which provided that any difference or dispute which might arise ‘in respect of’ or ‘with regard to’ or ‘under the’ contract should be referred to arbitration, applied to a dispute arising out of a claim by one party that liability under the contract had been discharged by reason of repudiation which had been accepted.

   In Heyman their Lordships drew a distinction between a contract void ab initio, in which event there is no valid submission to arbitration, and a valid contract which is subsequently repudiated, where acceptance of the repudiation leaves the contract, including the arbitration clause, on foot for the purpose of enforcement, though performance under the contract is at an end. Viscount Simon L.C.  [1942] A.C., at p. 367, Lord Wright  [1942] A.C., at p. 383 and Lord Porter   [1942] A.C., at p. 395 thought that the effect of frustration was similar to that of repudiation which has been accepted by the innocent party, with the consequence that the arbitration clause is left on foot. Although Lord Wright and Lord Porter did not express a concluded opinion upon the question, they nevertheless expressed reasons for arriving at a result contrary to that reached in Hirji Mulji.  As might be expected, emphasis was given to the need to construe the relevant arbitration clause so as to ensure that it comprehends the particular dispute or difference which has arisen between the parties. In this action the Lord Chancellor expressly left open the effect of a Scott v. Avery clause.

   Lord Macmillan [1942] AC at p 375, who spoke for Lord Russell of Killowen as well, in putting cases of frustration to one side, expressed doubt as to the correctness of some of the views enunciated by Lord Sumner in Hirji Mulji. Nothing in Lord Macmillan's speech is inconsistent with the proposition that frustration does not put an end to a submission to an arbitration clause so expressed as to confer jurisdiction on an arbitrator to decide a dispute relating to frustration. Indeed, the emphasis which his Lordship gave to the special nature and purpose of arbitration clauses suggests that he would have come to the same conclusion upon the point as that reached by the Lord Chancellor.

   In my opinion, the reasoning of the House of Lords in Heyman is to be preferred to that of Lord Sumner in Hirji Mulji [1926] A.C., 497. In its application to an arbitration clause the distinction between a contract which is void ab initio and a contract which is valid but subsequently repudiated is well taken. Lord Sumner was in error in holding that the acceptance by an innocent party of the repudiation of a contract brings the contract, including an arbitration clause, to an end for all purposes. I agree with the House of Lords that the case of frustration is to be assimilated for relevant purposes to the determination of a contract by breach or by acceptance of repudiation. The fact that the Lord Chancellor proceeded on the implied term theory of frustration does not in my view affect the reasoning by which he arrived at his conclusion.”

10. Pan submitted that the approval by Mason J in this passage of the approach of their Lordships in Heyman v Darwins, agreed in as it was by Stephen J at 345, Aickin J at 392 and Wilson J at 392, bound this Court (as it should have bound their Honours in Ferris v Plaister) to reject the notion of separability; and thus, it was said, this Court should not follow Ferris v Plaister.

11. I reject this submission.  The High Court in Codelfa and Mason J in this passage were not dealing with the question of separability.  Mason J was, of course, dealing with the question of the jurisdiction of the arbitrator.  In that context, his Honour was rejecting the notion present in the advice of the Privy Council delivered by Lord Sumner in Hirji Mulji v Cheong Yue Steamship CoLtd [1926] AC 497 that acceptance by an innocent party of a repudiation put an end to the contract from the beginning, thus destroying the arbitration clause and that frustration had the same effect. Mason J was agreeing with the assimilation of frustration and acceptance of repudiation in this context made by their Lordships in Heyman v Darwins and with the distinction that they made between avoidance ab initio as a result of rescission and termination for breach, the former putting an end to the contract from the beginning, the latter not.  It was only necessary for Mason J’s purposes to demonstrate that frustration of the contract did not avoid the contract ab initio.  The issue of the separability of the arbitration clause from the main contract was not before the Court in Codelfa.  In this context, it cannot be said that the notion of separability or non-separability of the arbitration clause was part of the ratio of Mason J’s judgment in Codelfa.  The judges in Ferris v Plaister were correct to consider themselves not to be bound by Codelfa in that respect. 

12. The doctrine of separability is sometimes said to be based on a fiction:  see Baron, A “Arbitration and the Fiction of Severability” (1999) 19 Australian Bar Review 49.The use of the word “fiction” is often a precursor to some criticism, or at least damning with faint praise.  Fictions are not entirely without their utility.  The relevance of the corporation as a separately existing entity is perhaps more than a modest example:  cf Davies, M “In Defence of Unpopular Virtues; Personification and Ratification” (2000-2001) 75 Tulane Law Review 337.  But the doctrine of separability is not so much a fiction as an approach by the law to accommodating commercial practicality and commonsense to the operation of legal rules.  Commercial law and honest, practical common sense should never be far apart.  The approach to construing and dealing with commercial contracts in this way, subject always of course to the particular contract at hand, is not to introduce a fiction, but to apply a legal rule or perspective borne of precedent and common sense better to facilitate the intentions (express and inferred) of the commercial parties involved:  see also Mahoney JA in Ferris v Plaister at 496-97.

13. In my respectful view, Ferris v Plaister should be followed, not merely because it is not plainly wrong, but because it is correct.

14. Approaching the matter from this perspective, there is no basis put forward by Pan upon which it could be concluded that the arbitration agreement, being clause 45(b) of the time charter, as opposed to the substantive agreement, was null and void.

15. On this basis, assuming Article 8 to have an operation independent of s 7, the Court is required to refer the parties to arbitration. There was no debate that the appropriate way to achieve that command is the stay the proceedings in this Court: cf Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] AC 334 at 353-55 and the note in (1993) 109 Law Quarterly Review 337.

16. The above also deals with s 7(5) of the International Arbitration Act.

17. I will deal with any questions of conditions on the stay shortly, when dealing with issue (f) at [189] above.

    The issues for consideration: issue (e) at [189] above: the content of the phrase “the determination of a matter that, in pursuance of the agreement, is capable of settlement by arbitration” and whether s 7 calls for a stay

18. The starting point of understanding this part of s 7(2)(b) is the recognition that it is a reduction into domestic law of aspects of Article II of the Convention. I do not repeat what I said earlier about “capable of settlement by arbitration” and “arbitrability”. Three aspects of this part of s 7(2)(b) are important: “a matter”, “in pursuance of the agreement” and “capable of settlement by arbitration”. These are elements of Article II of the Convention brought into domestic law. They are not independent elements to be understood separately from each other. Rather, they are part of one paragraph dealing with elements of Article II: the difference or differences between the parties which, pursuant to the arbitration agreement, is and are capable of settlement by arbitration.

19. The phrase “a matter” is apt to be understood at a level of generality by reference to the arbitration agreement.  This conforms with the views of all the justices in Tanning Research Laboratories Inc v O’Brien (1990) 169 CLR 332 at 344-45 and 351-52 and McLelland J in Flakt Australia Ltd v Wilkins & Davies Construction Co Ltd [1979] 2 NSWLR 243 at 250. See also Metrocall Inc v Electronic Tracking Systems Pty Ltd (2000) 52 NSWLR 1. It is plain that the phrase “a matter” cannot have the full connotation of the phrase in the Constitutional sense: Tanning Research at 351. This is so because it is linked to the terms of the arbitration agreement. It is the matter, the differences between the parties, the controversy between the parties, which, under the agreement, the parties have agreed to submit to arbitration. Thus, some issue may be part of the overall controversy or matter in the sense understood in federal jurisdiction: Fencott v Muller (1983) 152 CLR 570 at 608 and Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 585-86, but not fall within the scope of the arbitration clause. Recognising how the word “matter” is used in Article II sub-article 3 and the content of Article II sub-article 1, the word “matter” in s 7(2)(b) can be seen to be a reference to the differences between the parties or the controversy that are or is covered by the terms of the arbitration agreement. That is, such part (or all) of the differences that fall within the scope of the arbitration agreement. It is that body of differences which is to be capable of settlement by arbitration.

20. Here, the matter is all disputes arising out of the time charter of this particular commercial vessel that must be capable of settlement by arbitration. As I have already said, this last phrase is one which, according to the law of Australia, as the domestic law governing the question of referral, must be of a character that is arbitrable. There is nothing to suggest that such a quintessentially commercially based dispute is not appropriate for arbitral resolution in accordance with the venue and law chosen by the parties. I see no warrant to construe s 7(2)(b) as requiring all causes of action or issues thrown up by Australian law to be dealt with by the arbitrator according to Australian law or as they would be in a suit in this Court for the “matter” in pursuance of the agreement to be capable of settlement by arbitration. The matter, being the disputes arising out of the time charter, will be heard by the arbitrator at the place and under the law chosen by the parties: see Francis Travel at 167. The matter in pursuance of the agreement is capable of settlement by arbitration.

21. Here, it is said that Pan’s claims under ss 52 and 87 of the Trade Practices Act will not be agitated before the arbitrator because English law will not recognise an Australian statute in the employment of English Law to resolve the dispute. So, it is said, that matter or that part of the matter is not, in pursuance of the agreement, capable of settlement by arbitration, since it will not be heard and determined on its merits. This submission misunderstands the content of s 7(2)(b) of the International Arbitration Act and in particular gives a different meaning to the phrase “capable of settlement by arbitration” than is found in the Convention. Indeed, it is a meaning of the phrase which would undermine the operation of the Convention, a result which one would not reach without the clear intention of the Parliament through the words of the statute. The aim of the Convention is to accord respect and recognition to the autonomy of the parties in the choice of arbitration. It would be antithetical to the Convention to limit the reference to arbitration to those parts of the differences of the parties that would be dealt with in the same way in the arbitration as they would be in the national court in which proceedings have been begun. This is not to give the Convention precedence over the words of s 7(2)(b). Rather, it is to recognise that the International Arbitration Act was seeking to place the Convention into domestic law, and here s 7(2) was dealing with Article II. Section 7(2) should be understood and interpreted, if it can be, in conformity with the relevant parts of the Convention, that is Article II that it seeks to incorporate. Thus, if the words of s 7(2) can be understood as not undermining or being contrary to Article II they should be so construed. The whole point of an arbitration agreement (as indeed appears to be the case with clause 45 of NYPE 93) is to remove all relevant disputes to a defined legal regime for resolution: here, to London arbitration, under English law. To interpret legislation implementing the Convention to operate only to refer to arbitration such parts of the differences between the parties as are covered by the arbitration agreement that will be dealt with by the arbitrator in the same way that the staying court would deal with them, would be to undermine the Convention by infringing on the autonomy of the parties recognised by the Convention in the scope of the arbitration agreement. It would be to give a meaning to the domestic law implementing the Convention contrary to the Convention, in particular by ascribing to the phrase “is capable of settlement by arbitration” a meaning in s 7(2)(b) different from that which it carries in the Convention.

1. Nothing in Tanning Research is inconsistent with the above approach.  The above approach conforms to the requirement expressed in Tanning Research to ascertain the “matter” by reference to the subject matter in dispute and the substantive questions for determination in the proceedings and, necessarily, by reference to the scope of the arbitration agreement.  See also Recyclers of Australia Pty Ltd v Hettinga Equipment Inc (2000) 100 FCR 420 at [18].

2. In The ‘Kiukiang Career’ Emmett J, however, said the following at 23-24:

   “Arbitrators, from that point of view, would not be in any different position from the Federal Court. The reference to English law, as being the law by which the Charter Contract was to be governed and in accordance with which it was to be construed, would not exclude the operation of the Trade Practices Act. However, it may be an indication, when coupled with the reference to arbitration under the English legislation, that the parties did not intend that claims arising out of the statute would be resolved by arbitrators in London. In other words, there is no basis for concluding that the parties to the Charter Contract intended the implication of a term that claims under the Trade Practices Act would be settled by arbitration.

   Clearly, the Trade Practices Act confers no jurisdiction on arbitrators in London. On the other hand, it would certainly be open to the parties to a dispute as to whether or not a claim arises under the Trade Practices Act, to refer that dispute to arbitrators. That, of course, is not this case. Nevertheless, it would also be possible for two parties to agree, subject to the following proviso, that if a dispute arises between them in the future as to whether one is entitled to a remedy under the Trade Practices Act, they will refer that dispute to arbitration.

   The proviso is that if such a dispute did arise, and one party wished to have the dispute resolved by a court with appropriate jurisdiction, that party could not be compelled to have the matter resolved by arbitration if the effect would be a contract excluding the application of the Trade Practices Act. If the effect of the agreement would be to exclude a claim under the Trade Practices Act and to deprive the parties of the remedies which a court may grant under the Trade Practices Act, in favour of a determination by an arbitrator, the provision may be void by the operation of the Trade Practices Act. If the effect of such a provision would be to exclude the jurisdiction of the court and enable the parties to contract out of the remedies conferred by the Trade Practices Act, the provision may be void.”

3. With the utmost respect to Emmett J and to Branson J, who agreed with Emmett J’s reasons, the proviso in the last paragraph above cannot be correct if the International Arbitration Act through s 7 or Article 8 applies to call for a stay. Clause 45(b) is not contrary to the Trade Practices Act. There is nothing inimical to Australian public policy or to the terms of the Trade Practices Act in commercial parties agreeing to commercial arbitration in London under English law. There is no relevant Australian statutory provision such as s 11 of the Carriage of Goods by Sea Act 1991 (Cth) or s 52 of the Insurance Contracts Act 1984 (Cth) that might affect its operation.Here, if a stay is mandated under s 7 or Article 8, that is because of the operation of a law of the Parliament exhibiting the public policy to which I have referred. The Trade Practices Act is not being undermined; rather, another law of the Parliament is in operation. If Australian public policy of the kind found in s 2C of the International Arbitration Act or s 52 of the Insurance Contracts Act were relevant then the issues would be determined in that light. 

4. Taking this approach, and in the light of the undertaking to the Court by Comandate Marine, it is unnecessary to deal with the submissions of the parties on English law, the Rome Convention and how the arbitrator will approach the matter, and to resolve the question as to whether the arbitrator would, in the absence of any undertaking of the kind given here, be obliged or entitled to deal with the Trade Practices Act claims.  It is sufficient in this context to refer to what Gleeson CJ said in Francis Travel at 167 and to make two points. The first is that, as Gleeson CJ said at 167, it will be for the arbitrator to decide, applying relevant principles of conflict of laws, what part the Trade Practices Act allegations and claimed relief will play in the arbitration and it is not for this Court to pre-empt that decision.  The second is that Comandate Marine’s undertaking to this Court can be viewed not as gratuitous, but as in accordance with its obligations under a term that may be seen to be implied into the arbitration agreement that the arbitrator is to have the authority to give the claimant such relief as would be available to it in a court of law having jurisdiction with respect to the subject matter:  Government Insurance Office of New South Wales v Atkinson-Leighton Joint Venture (1981) 146 CLR 206 at 246-47 and Francis Travel at 167.

5. A dispute concerning the time chartering of a general cargo ship for commercial purposes under NYPE 93 is a matter capable of settlement by arbitration whether that dispute relates to the formation or performance of that contract.  

6. Thus, the Court is obliged to stay the proceedings in this Court pursuant to s 7.

   The issues or consideration:  issue (f) at [189] above:  the imposition of any conditions

7. I see no need for any conditions on the stay.  In Walter Rau, subject to hearing the parties on the matter, I indicated at [111] that I would:

   “… impose a condition upon the parties to the arbitration to consent to all aspects of any TP Act claims, which would have been justiciable in this Court, being litigated in the arbitration irrespective of any conclusion as to the proper law.  Such a condition would solve the potential conflict of Australian domestic statutory public policy and the operation by a foreign arbitrator of the rules of conflicts of law to set at nought governing Australian law.  The arbitration agreement is a contract about submission.  Its enforcement should not undermine the operation of a statute such as the TP Act.”

8. Having had the benefit of argument in the appeal here I would not impose such a condition.  At least in the circumstances here, I do not see such a term as appropriate.  It would, to use the expression of Gleeson CJ in Francis Travel at 167, pre-empt the decision of the arbitrator and the operation of the arbitration clause. In any event, here, Comandate Marine has undertaken to the Court to agree to the determination in the arbitration of the Trade Practices Act claims.

   The fifth group of issues:  other bases for a stay by reason of the arbitration clause, assuming the inapplicability of the International Arbitration Act and the question of discretion involved therein

9. Even if there were no agreement in writing for the purposes of s 7 of the International Arbitration Act, there is no debate but that there was and is a contractually binding arbitration clause in the time charter in terms of clause 45(b) of NYPE 93. Comandate Marine argued below that if s 7 did not apply a stay should be granted pursuant to s 53 of the Commercial Arbitration Act 1984 (NSW). Section 53 is in the following terms:

   “(1)     If a party to an arbitration agreement commences proceedings in a court against another party to the arbitration agreement in respect of a matter agreed to be referred to arbitration by the agreement, that other party may, subject to subsection (2), apply to that court to stay the proceedings and that court, if satisfied:

   (a)that there is no sufficient reason why the matter should not be referred to arbitration in accordance with the agreement, and

   (b)that the applicant was at the time when the proceedings were commenced and still remains ready and willing to do all things necessary for the proper conduct of the arbitration,

   may make an order staying the proceedings and may further give such directions with respect to the future conduct of the arbitration as it thinks fit.

   (2)      An application under subsection (1) shall not, except with the leave of the court in which the proceedings have been commenced, be made after the applicant has delivered pleadings or taken any other step in the proceedings other than the entry of an appearance.

   (3)      Notwithstanding any rule of law to the contrary, a party to an arbitration agreement shall not be entitled to recover damages in any court from another party to the agreement by reason that that other party takes proceedings in a court in respect of the matter agreed to be referred to arbitration by the arbitration agreement.”

10. It is unnecessary to discuss the inter-relationship between the Commonwealth and State and Territory legislation dealing with commercial arbitration and international commercial arbitration. In particular, it is unnecessary to discuss (and inappropriate given the absence of notices under s 78B of the Judiciary Act 1903 (Cth)) the extent to which the International Arbitration Act covers the field for the purposes of s 109 of the Australian Constitution.  I therefore leave s 53 to one side.

11. It was argued that there should be no stay because of the connection of the issues with Australia – the state of the ship in Australia, the local witnesses and the relevance of Australian immigration law.  These matters, taken alone or together, do not outweigh the holding of the parties to their bargain.

12. It was submitted that the Court should not take a step which would stifle the ability of Pan to agitate its rights under the Trade Practices Act and that to do so would be giving clause 45(b) a scope effectively to exclude the operation of the Trade Practices Act. That is not the appropriate perspective. These commercial parties freely entered a bargain to resolve their disputes in London according to English law. No one forced Pan to do so. Through its broker, it entered the international market for the time chartering of vessels. It negotiated hire and terms on the foundation of a dispute resolution clause in clause 45(b). If it had wanted to maintain any rights by reference to Australian law governing its relationship, it could have bargained for them. It did not. There is no provision of the Trade Practices Act that says the parties cannot enter a clause such as clause 45(b). There are powerful discretionary reasons why an arbitration agreement should be enforced, even if the contractually chosen venue and law give rights not entirely the same as would arise under one party’s domestic law and in one party’s domestic courts: see Wealands v CLC Contractors and Key Scaffolding Ltd [1999] 2 Lloyd’s Rep 739 at 747-48 and Société Commerciale de Reassurance v Eras International Ltd [1992] 1 Lloyd’s Rep 570 at 610-11. If Australian commercial parties desire Australian dispute resolution clauses they should bargain for them.

13. That said, given that arbitration clauses can be taken as ousting or lessening the jurisdiction of courts:  see for example, Compagnie des Messageries Maritimes v Wilson (1954) 94 CLR 577, Kim Meller Imports Pty Ltd v Eurolevant SpA (1986) 7 NSWLR 269 and Furness Withy (Aust) Pty Ltd v Metal Distributors (UK) Ltd (The ‘Amazonia’) [1990] 1 Lloyd’s Rep 236, I would leave the question of the enforcement of an arbitration clause which would deny a party a chance to ventilate its rights under a statute such as the Trade Practices Act for a case in which it was necessary to decide that question.  Here, the issue is determined by the operation of a law of the Parliament, the International Arbitration Act.

    The sixth group of issues:  the anti-anti-suit injunction

14. Given my views that there should be an unconditional stay of Pan’s proceedings, there is no reason for Comandate Marine to seek an anti-suit injunction.  Also, in this light, the anti-anti-suit injunction, now plays no useful purpose.

15. In these circumstances, there is no need to canvas at any length the question of the use of anti-suit injunctions in advance of the court whose processes are interfered with by the anti-suit injunction (in this case, this Court) dealing with the matter.  The anti-suit injunction, in form, is not directed to the court.  This much is obvious.  If it were otherwise, there would be a direct interference with an arm of government of a sovereign State.  Nevertheless, to order a party not to approach a court of competent jurisdiction is an indirect interference with that court.  That is not to say anti-suit injunctions should not be issued.  But it is to recognise that in a potentially complex exercise of discretion comity is not an “incantation”, as Millett LJ put it in The ‘Angelic Grace’ [1995] 1 Lloyd’s Rep 87 at 96, but a real consideration, in particular if legitimate national legislation (such as that protecting or regulating a body of commercial law eg insurance law or bill of lading carriage) applies and if parties have conducted themselves and contracted against that background or in that framework: (cf Article 7 of the draft Hague Convention on Exclusive Choice of Court Agreements; s 11 of the Carriage of Goods by Sea Act 1991 (Cth); The ‘Hollandia’ [1983] 1 AC 565; OT Africa Line Ltd v Magic Sportswear Corporation & Ors Ltd [2005] EWCA Civ 710; s 52 of the Insurance Contracts Act 1984; and Akai Pty Ltd v People’s Insurance Co Ltd (1996) 188 CLR 418 a decision of the High Court of Australia ignored by Thomas J in the anti-suit injunction between the same parties: [1998] 1 Lloyd’s Rep 90; cf The ‘Al Battani’ [1993] 2 Lloyd’s Rep 219 at 224).

16. These considerations may be relevant to the questions of costs of the anti-anti-suit injunction.  There is, however, no reason why Comandate Marine should not have its costs of the notice of motion for a stay.  I would hear the parties on the costs of the anti-anti-suit injunction.

    The appropriate orders

17. It is appropriate to note formally the terms of the undertaking that Comandate Marine has provided to the Court to allow the arbitration to determine all issues between the parties arising under the Trade Practices Act. The text of the notation below is taken from Comandate Marine’s submissions on appeal.  If some greater precision or some variation is required the parties should approach the Court.

18. The orders that I would make are:

    1.The appeal be allowed.

    2.Order 5 made by the Court on 13 July 2006 and the order made by the Court on 22 August 2006 be dissolved and set aside, respectively, and in lieu of the order made on 22 August 2006 it be ordered that:

    (a)Subject to the retention of the security provided for the release of Comandate remaining as security for Pan’s claims against Comandate Marine in the arbitration, proceeding NSD 1330 of 2006 be stayed.

    (b)Pan pay the costs of Comandate Marine of the motion for a stay of proceedings served on 23 June 2006 and filed 4 July 2006.

    3.Pan pay Comandate Marine’s costs of the appeal.

    4.The question of the costs of the anti-anti suit injunction and of the balance of the proceedings at first instance be stood over for argument to a date to be fixed.

    5.The Court notes the undertaking to the Court of Comandate Marine Corp that it will allow the arbitration to determine all issues between the parties arising under the Trade Practices Act 1974 (Cth).

19. It also may be necessary for a stay for a short period to allow any application that Pan might consider appropriate.  Any such application should be made promptly.

I certify that the preceding two hundred and forty seven (247) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop.

Associate:
Dated:        20 December 2006

Counsel for the Appellant:	Mr A J Sullivan QC and Mr D A McLure
Solicitor for the Appellant:	Norton White
Counsel for the Respondent:	Dr A S Bell SC and Mr C Carter
Solicitor for the Respondent:	Ebsworth & Ebsworth
Dates of Hearing:	25 and 26 October 2006
Last Submission filed:	2 November 2006
Date of Judgment:	20 December 2006