Great China Metal Industries Co Ltd v Malaysian International Shipping Corp Berhad

Great China Metal Industries Co Ltd (Great China) appealed to the High Court of Australia against a decision of the Full Federal Court concerning the enforceability of a foreign arbitral award. The dispute arose from a contract for the sale of steel products, which contained an arbitration clause. Following arbitration in Malaysia, an award was made in favour of Malaysian International Shipping Corp Berhad (MISC). Great China sought to resist the enforcement of this award in Australia.

The High Court was required to determine whether the arbitral award was enforceable in Australia under the International Arbitration Act 1974 (Cth), which gives effect to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). Specifically, the court considered whether the award was contrary to Australian public policy, a ground for refusing enforcement under Article V(2)(b) of the Convention and section 8(5)(b) of the Act. The central question was whether the enforcement of the award would be contrary to the fundamental notions of justice and fairness in Australia.

The majority of the High Court, comprising Gaudron, McHugh, Gummow, and Hayne JJ, held that the enforcement of the award would not be contrary to Australian public policy. Their Honours reasoned that the public policy exception should be construed narrowly and applied only in exceptional circumstances where the award is so fundamentally unfair or unjust that its enforcement would offend Australian legal principles. They found that the arbitration process, despite certain criticisms raised by Great China, did not reach this threshold. Kirby and Callinan JJ dissented, taking a broader view of public policy and finding that the procedural irregularities in the arbitration were sufficient to warrant refusal of enforcement.

The High Court ultimately dismissed the appeal, upholding the enforceability of the Malaysian arbitral award.