In the matter of Jamac Excel Logistics Pty Ltd ACN 165 961 268)

[2020] NSWSC 1036

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of Jamac Excel Logistics Pty Ltd ACN 165 961 268) [2020] NSWSC 1036

Hearing dates:

6 August 2020

Date of orders:

6 August 2020

Decision date:

06 August 2020

Jurisdiction:

Equity - Commercial Arbitration List

Before:

Ball J

Decision:

1 The plaintiff has leave under s 8 of the International Arbitration Act 1974 (Cth) to enforce the award dated 26 April 2019 issued to the Plaintiff and the First Defendant by Mr Ningjie Nu of the China International Economic and Trade Arbitration Commission (reference CC18626) (the Award) as if it were a judgment of the Court.

2   The First Defendant pay to the Plaintiff USD 650,000, plus interest on USD 50,000 from the date of the Award at the rate of 3 percent per annum.

3   The First Defendant pay to the Plaintiff RMB297,511.50.

4   The First Defendant pay the Plaintiff the costs of the claim for relief in paragraphs 2 to 4 the originating process.

5    The plaintiff has leave to amend the Originating Process to add the following claims for relief:

6 An order under s 459A of the Corporations Act 2001, on the application of the Plaintiff under s 459P(1), that the First Defendant be wound up insolvency.

7 Further and in the alternative, an order under s 461(1)(k) of the Corporations Act 2001 that the First Defendant be wound up.

8   An order that Patrick Loi be appointed as the liquidator of the First Defendant.

9   Costs, in respect of orders 6 to 8 above.

6    The plaintiff shall file and serve the amended originating process on the First Defendant on or before 14 August 2020.

7    A direction that such amended originating process be made returnable before the Corporations List Registrar at 9am on 24 August 2020 for further directions.

Catchwords:

COMMERCIAL ARBITRATION – Order sought under International Arbitration Act 1974 (Cth), s 8 – No issues of principle

Legislation Cited:

Corporations Act 2001 (Cth)

International Arbitration Act 1974 (Cth)

Category:

Procedural and other rulings

Parties:

Xiamen King East Far Supply Chain Co Ltd
(Plaintiff)
Jamac Excel Logistics Pty Ltd (First Defendant)
Australian Securities and Investments Commission (Second Defendant)

Representation:

Counsel:
J Hogan-Doran (Plaintiff)

Solicitors:
Guantao & CS Lawyers (Plaintiff)

File Number(s):

2020/150026

EX TEMPORE Judgment

1. The plaintiff is incorporated under the law of the People's Republic of China. The first defendant, Jamac Excel Logistics Pty Ltd, is a company incorporated under the rules of Australia. At all material times the sole director of the first defendant was Mr Yang Yong Jian aka Jason Yang.

2. By a contract made on 20 April 2017, the plaintiff agreed to purchase from the first defendant 3,500 dry metric tons (+/- five percent) of zircon sand on certain terms and conditions.

3. Clause 14 of the contract provided:

Governing Law & Arbitration: The contract will be governed, and interpreted in accordance with the rules of the International Chamber of Commerce and subject to the interpretation of INCOTERMS 2010 edition and amended to apply. All disputes arising out of the contract or in connection with the contract shall be submitted to the China International Economic and Trade Arbitration Commission for arbitration in accordance with its Rules of Arbitration in Xiamen, China. The arbitral award is final and binding upon both parties.

4. The plaintiff paid certain amounts under the contract but it appears that no sand was shipped to it.

5. On 18 October 2017, the plaintiff submitted an arbitration application to the China International Economic and Trade Arbitration Commission (CIETAC) seeking termination of the contract and damages of USD650,000. The first defendant filed a defence and cross-claim in the arbitration, however, the cross-claim was dismissed for non-payment of the relevant fee. On occasions, the first defendant was represented during the arbitration but on others it was not.

6. On 26 April 2019, the Arbitral Tribunal issued its award. The Tribunal concluded that the first defendant should:

1. Return twice the amount of the deposit to the plaintiff totalling USD600,000;

2. Return the payment for the goods of USD50,000 together with interest to the plaintiff;

3. Pay interest on the USD50,000 at an annualised rate of three percent from the date of termination of the contract to the date of actual payment;

4. Bear the lawyers' fees of USD140,000 incurred by the plaintiff for the current case;

5. Pay RMB150,548 to the plaintiff to compensate for the arbitration fee paid by the plaintiff on behalf of the first defendant; and

6. Pay RMB6,963.50 to the plaintiff to compensate for the expenses paid by the plaintiff.

(the Award).

7. On 10 June 2019, the first defendant was deregistered after a form 6010 was lodged by Mr Yang.

8. On 29 October 2019, the plaintiff made an application to reinstate the first defendant to the register. An order for reinstatement was made on 25 June 2020 and was notified to Mr Yang on 6 July 2020.

9. In these proceedings the plaintiff seeks an order under s 8 of the International Arbitration Act 1974 (Cth) (the Act) to enforce the Award as if it were a judgment of this Court. Section 8 of the Act relevantly provides:

8   Recognition of foreign awards

(1)   Subject to this Part, a foreign award is binding by virtue of this Act for all purposes on the parties to the award.

(2)   Subject to this Part, a foreign award may be enforced in a court of a State or Territory as if the award were a judgment or order of that court.

(3)   …

(3A)   The court may only refuse to enforce the foreign award in the circumstances mentioned in subsections (5) and (7).

(5)   Subject to subsection (6), in any proceedings in which the enforcement of a foreign award by virtue of this Part is sought, the court may, at the request of the party against whom it is invoked, refuse to enforce the award if that party proves to the satisfaction of the court that:

(a)   a party to the arbitration agreement in pursuance of which the award was made was, under the law applicable to him or her, under some incapacity at the time when the agreement was made; or

(b)   the arbitration agreement is not valid under the law expressed in the agreement to be applicable to it or, where no law is so expressed to be applicable, under the law of the country where the award was made; or

(c)   that party was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his or her case in the arbitration proceedings; or

(d)   the award deals with a difference not contemplated by, or not falling within the terms of, the submission to arbitration, or contains a decision on a matter beyond the scope of the submission to arbitration; or

(e)   the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or

(f)   the award has not yet become binding on the parties to the award has been set aside or suspended by a competent authority of the country in which, or under the law of which, the award was made.

(6)   Where an award to which paragraph (5)(d) applies contains decisions on matters submitted to arbitration and those decisions can be separated from decisions on matters not so submitted, that part of the award which contains decisions on matters so submitted may be enforced.

(7)   In any proceedings in which the enforcement of a foreign award by virtue of this Part is sought, the court may refuse to enforce the award if it finds that:

(a)   the subject matter of the difference between the parties to the award is not capable of settlement by arbitration under the laws in force in the State or Territory in which the court is sitting; or

(b)   to enforce the award would be contrary to public policy.

(7A)   To avoid doubt and without limiting paragraph (7)(b), the enforcement of a foreign award would be contrary to public policy if:

(a)   the making of the award was induced or affected by fraud or corruption; or

(b)   a breach of the rules of natural justice occurred in connection with the making of the award.

...

10. At the hearing of this matter, Mr Yang, appeared on behalf of the first defendant. He cannot speak English and he made submissions to the Court through an interpreter. Initially, I granted leave to Mr Yang to appear on behalf of the first defendant. However, it became apparent that Mr Yang was not in a position to assist the Court in determining whether the orders sought by the plaintiff should be made and I revoked that leave. Despite revoking that leave, I permitted Mr Yang to make some submissions to the Court in response to those made by Mr Hogan-Doran on behalf of the plaintiff.

11. It appears that Mr Yang's principal contention is that the Court should not make orders under s 8 of the Act because that arbitration occurred in accordance with Chinese law, rather than in accordance with the rules of the International Chamber of Commerce and subject to the interpretation of INCOTERMS 2010 edition as required by cl 14 of the agreement.

12. Two points may be made about that submission. First, it does not appear to be a ground for refusal to make orders under s 8 of the Act. In any event, a reading of the award does not support that submission. In those circumstances, I can see no reason why orders should not be made under s 8 in this case.

13. It is plain from the evidence before the Court that the other conditions for making such an order have been satisfied.

14. By an interlocutory process filed on 23 July 2020, the plaintiff also seeks leave to amend its originating process to add claims seeking orders that the first defendant be wound up. In my opinion, it is appropriate to grant that order.

15. In making submissions for why he should be entitled to represent the first defendant, Mr Yang said that neither he, and I infer, nor the company could afford to pay for a lawyer. It seems strongly arguable that in view of the judgment against the first defendant that it is insolvent. In those circumstances, it seems appropriate that the question whether the first defendant should be wound up should be determined sooner rather than later.

16. The orders proposed by the plaintiff provide that the amended originating process be made returnable before the Corporations List Registrar at 9am on 24 August 2020 for further directions. That seems to me to be an appropriate course to take.

17. In those circumstances, I make the following orders:

1. The plaintiff has leave under s 8 of the International Arbitration Act 1974 (Cth) to enforce the award dated 26 April 2019 issued to the Plaintiff and the First Defendant by Mr Ningjie Nu of the China international Economic and Trade Arbitration Commission (reference CC18626) (the Award) as if it were a judgment of the Court.

2. The First Defendant pay to the Plaintiff USD 650,000, plus interest on USD 50,000 from the date of the Award at the rate of three percent annum.

3. The First Defendant pay to the Plaintiff RMB 297,511.50.

4. The First Defendant pay the Plaintiff the costs of the claim for relief in paragraphs 2 to 4 the originating process.

5. The plaintiff has leave to amend the Originating Process to add the following claims for relief:

6. An order under s 459A of the Corporations Act 2001 (Cth), on the application of the Plaintiff under s 459P(1), that the First Defendant be wound up insolvency.

7. Further and in the alternative, an order under s 461(1)(k) of the Corporations Act 2001 (Cth) that the First Defendant be wound up.

8.   An order that Patrick Loi be appointed as the liquidator of the First Defendant.

9.   Costs, in respect of orders 6 to 8 above.

6. The plaintiff shall file and serve the amended originating process on the First Defendant on or before 14 August 2020.

7. A direction that such amended originating process be made returnable before the Corporations List Registrar at 9am on 24 August 2020 for further directions.

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Decision last updated: 07 August 2020