Duro Felguera Australia Pty Ltd v Samsung C&T Corporation

Duro Felguera Australia Pty Ltd sought an interim injunction against Samsung C&T Corporation, arguing that requiring payment of a bond would contravene a prohibition in the Corporations Act 2001 (Cth). Duro contended that as a foreign company, Samsung C&T Corporation is not permitted to carry on business in Australia unless it is registered as a foreign company, and that payment of the bond would amount to carrying on business. Duro also argued that the corporate personality of the companies that merged to form Samsung C&T Corporation would continue in the merged entity. The court had to decide whether Duro had made out a prima facie case that the defendant would contravene s 601CD by demanding payment of the bond, and whether the inconvenience or injury Duro would suffer if an injunction were refused outweighed the injury Samsung C&T Corporation would suffer if an injunction were granted.

The court held that Duro had not made out a prima facie case that Samsung C&T Corporation would contravene s 601CD by demanding payment of the bond. The court noted that Duro had not identified any relevant authority to support its contention that demanding payment of the bond would amount to carrying on business. Furthermore, the court held that Duro had not established that the corporate personalities of the merged companies would continue in the merged entity. The court found that Duro had not made out a strong case that Samsung C&T Corporation would contravene s 601CD by demanding payment of the bond. The court held that Duro had not shown a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial.

The court further held that even if Duro had made out a prima facie case, the inconvenience or injury Duro would suffer if an injunction were refused would be outweighed by the injury Samsung C&T Corporation would suffer if an injunction were granted. The court noted that the Advance Payment Bond was provided by Duro to Samsung C&T Corporation pursuant to its contractual obligations under the Interim Subcontract. One of the purposes of the bond was to allocate risk between the parties such that Duro and not Samsung C&T Corporation shall be out of pocket pending the resolution of the dispute between them. The court held that if an injunction were granted, Samsung C&T Corporation would be deprived of the benefit of the bond and Duro would not bear the financial risk pending final determination of the dispute. This would result in substantial injustice to Samsung C&T Corporation.

Accordingly, the court dismissed Duro's application for an interim injunction.