International Relief and Development Inc v Ladu
[2014] FCA 887
•20 August 2014
FEDERAL COURT OF AUSTRALIA
International Relief and Development Inc v Ladu [2014] FCA 887
Citation: International Relief and Development Inc v Ladu [2014] FCA 887 Parties: INTERNATIONAL RELIEF AND DEVELOPMENT, INC v GODFREY EMMANUEL LADU File number: VID 522 of 2012 Judge: KENNY J Date of judgment: 20 August 2014 Catchwords: ARBITRATION – Foreign arbitral award – Application to enforce foreign award – Opposition to enforcement on the basis of no proper notice – Whether absence of proper notice of appointment of the arbitrator or of the arbitration proceedings – Whether breach of the rules of natural justice – Whether no notice of the arbitration hearing – Consideration of grounds for refusing to enforce foreign award under ss 8(5)(c), (7) and (7A) of the International Arbitration Act 1974 (Cth) – Respondent failed to establish alleged absence of notice – Order for enforcement made. Legislation: International Arbitration Act 1974 (Cth)
Federal Court Rules 2011 (Cth)
Evidence Act 1995 (Cth)Convention on the Recognition and Enforcement of Foreign Arbitral Awards, opened for signature 10 June 1958, 330 UNTS 3 (entered into force 7 June 1959)
Cases cited:
TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 295 ALR 596
Uganda Telecom Ltd v Hi-Tech Telecom Pty Ltd (2011) 277 ALR 415
Jones v Dunkel (1959) 101 CLR 298
Payne v Parker (1976) 1 NSWLR 191
Traxys Europe SA v Balaji Coke Industry Pty Ltd (No 2) (2012) 201 FCR 535
Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 (2006) 231 CLR 1
Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation Berhad (1998) 196 CLR 161
Povey v Qantas Airways Ltd (2005) 223 CLR 189
TCL Air Conditioner (Zhongshan)Co Ltd v Castel Electronics Pty Ltd [2014] FCAFC 83
Gujarat NRE Coke Ltd v Coeclerici Asia (Pte) Ltd (2013) 304 ALR 468Text cited: Emmanuel Gaillard and Domenico Di Pietro (editors); Nanou Leleu-Knobil (reference editor), Enforcement of Arbitration Agreements and International Arbitral Awards. The New York Convention in Practice (Cameron May, 2008) Date of hearing: 4 – 6 September 2013
26 – 27 November 2013Date of last submissions: 13 December 2013 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 191 Counsel for the Applicant: D Crennan with K Popova (without fee) Solicitor for the Applicant: Cornwall Stodart Lawyers (without fee) Counsel for the Respondent: M Stirling Solicitor for the Respondent: Zindilis Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 522 of 2012
BETWEEN: INTERNATIONAL RELIEF AND DEVELOPMENT, INC.
ApplicantAND: GODFREY EMMANUEL LADU
Respondent
JUDGE:
KENNY J
DATE OF ORDER:
20 AUGUST 2014
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.Pursuant to section 8(3) of the International Arbitration Act 1974 (Cth), the foreign arbitral award dated 21 July 2011 made pursuant to clause 14 of the employment agreement dated 14 September 2009 between the applicant and the respondent be enforced in the Federal Court of Australia as if that award were a judgment or order of that Court.
2.The respondent pay the applicant’s costs of this application.
Note: On 20 August 2014, Order 2 above was vacated.
Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 522 of 2012
BETWEEN: INTERNATIONAL RELIEF AND DEVELOPMENT, INC.
ApplicantAND: GODFREY EMMANUEL LADU
Respondent
JUDGE:
KENNY J
DATE:
20 AUGUST 2014
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
INTRODUCTION
International Relief and Development, Inc. (IRD) has applied for the enforcement of a foreign arbitral award pursuant to s 8(3) of the International Arbitration Act 1974 (Cth) (IAA). Section 8(3) of the IAA provides that, subject to Part II of that Act, “a foreign award may be enforced in the Federal Court of Australia as if the award were a judgment or order of that court”. For the following reasons, I would make an order for enforcement of the kind IRD seeks.
The dispute between the parties arises out of the termination of a contract of employment for foreign aid work in South Sudan.
IRD is:
(a) a not-for-profit entity headquartered in Virginia in the United States of America; and
(b)an international humanitarian organisation that undertakes relief work outside the USA, including in countries in Africa.
IRD has about 4,000 employees working in approximately 40 developing and transitioning countries.
Mr Godfrey Emmanuel Ladu (also known as Godfrey Ladu or Godfrey Ladu Emmanuel) is an Australian citizen, born in Sudan in 1961, who describes his current occupation as a community development consultant. After completing a forestry course in South Sudan, Mr Ladu continued his studies in the United Kingdom, before migrating to Australia in 1987 and acquiring Australian citizenship in 1990. Mr Ladu has a Masters in Forestry Science and a MBA; and is now partly resident in Australia and partly in South Sudan.
Mr Ladu was an employee of IRD from September 2009 until April 2011, when IRD terminated his employment. The ensuing dispute between them was the subject of court proceedings in South Sudan, and arbitration in the United States pursuant to Mr Ladu’s employment contract with IRD. The arbitration resulted in an award dated 21 July 2011. It is this award (Award) that IRD now seeks to enforce in this Court.
Even in this Court, the matter has not had a straightforward history. IRD’s application was originally made ex parte on the basis that the award was enforceable under s 8(3) of the IAA, without notice to Mr Ladu. Middleton J in fact made orders registering the Award as a judgment on 31 August 2012. On 21 March 2013, however, these orders were set aside by consent. IRD renewed its application, this time on the basis that Mr Ladu had notice of the hearing in this Court and opposed the relief it sought.
BACKGROUND FACTS
The following paragraphs set out the circumstances that led to the Award and IRD’s current application to enforce it.
Mr Ladu’s employment by IRD
On 14 September 2009, IRD and Mr Ladu entered into an employment agreement (Employment Agreement), pursuant to which Mr Ladu worked in Warrap State, South Sudan as a Project (or Program) Manager for IRD’s South Sudan Sustainable Foods and Livelihoods Initiative (Initiative). The Initiative was established for the purpose of increasing local food security, economic opportunities and sustainable resettlement in Warrap State. As Program Manager, Mr Ladu was to “take overall charge of the programmatic and operational deliverables, including programme implementation, accounting, financial management and reporting needs of the sub-office”. He was to report directly to IRD’s South Sudan Country Director. Mr Ladu’s responsibilities included procuring seeds for distribution to local beneficiaries in South Sudan.
In early 2011, Mr Mor Gueye, IRD’s South Sudan Country Director from November 2010 until July 2011, became concerned about irregularities relating to the procurement of seeds by IRD from an entity known as Sunspace Construction and Supply Company Ltd (or Sun Space Construction & Suppliers) (Sunspace Construction). Mr Gueye recorded his concerns in an email dated 14 January 2011, which he sent to IRD’s staff in the United States. As a result of these concerns, IRD conducted a review process, with the assistance of Mr Solomon Ngoze, a senior IRD officer. Mr Ladu was not involved in the IRD review process.
Following the review, IRD decided to terminate Mr Ladu’s employment, which under cl 3 of the Employment Agreement was terminable “at will”. IRD’s HR Director at Arlington, Virginia, Jennifer Yi, prepared a letter of termination dated 1 April 2011, which Mr Gueye received in South Sudan via email the same day. Mr Gueye’s evidence was that, as directed, he did not tell Mr Ladu about the letter but held it pending the arrival of Mr Alan Calder. I accept his evidence on this point: it was consistent with the evidence of Mr Calder, a security and investigation consultant for IRD, and the evidence about the termination event that followed.
IRD’s termination of Mr Ladu’s employment
On 6 April 2011, IRD notified Mr Ladu that his employment with IRD was terminated. As Mr Ladu put it, this was “because of [an] allegation of mismanagement and damaging IRD programs in Sudan”. The notification was given to Mr Ladu by Mr Ngoze, in the presence of Mr Calder, at IRD’s office in Juba, South Sudan. Mr Gueye was also present at the Juba office that day, although he was not present when Mr Ngoze gave the termination letter to Mr Ladu.
The evidence of Mr Gueye and Mr Calder was that Mr Ladu was notified that his employment had ceased on 6 April 2011. Mr Ladu’s evidence was that he was notified earlier, on 28 March 2011. In his 7 March 2013 affidavit, Mr Ladu said that he was notified by Mr Calder, but, at the hearing on 5 September 2013, he said he was notified by Mr Gueye and that Mr Calder arrived some days later, on 6 April. I prefer the evidence of Mr Gueye and Mr Calder on this point. Their evidence is consistent with Mr Calder’s arrival in South Sudan on 5 April 2011, as corroborated by a date stamped in Mr Calder’s passport, and the stated purpose of his presence; the fact that Mr Ngoze was a senior employee of IRD; and that Mr Gueye held IRD’s letter of termination confidentially until Messrs Ngoze and Calder were able to take charge of the interview in which Mr Ladu was informed his employment with IRD was terminated. Further, the evidence of Mr Calder and Mr Gueye was consistent. Mr Calder was clear that he arrived in Juba on 5 April 2011; and Mr Gueye agreed, adding that Mr Calder and Mr Ngoze met with Mr Ladu in the morning of the following day. While Mr Calder deposed that he could not remember if Mr Ladu was given the termination letter by Mr Gueye or Mr Ngoze, as Mr Gueye deposed that he was not at this meeting, I find that the letter was given to Mr Ladu by Mr Ngoze. As noted, Mr Ladu changed his evidence, which was in either case inconsistent with that of Messrs Gueye and Calder (who had no evident reason to misstate events) and, on his first account, with contemporaneous documentary evidence. I conclude that Mr Ladu’s evidence on this point was a recent fabrication, seeking to accommodate his evidence as to the dates of his dismissal and communication with Dr Mulla (see below) with the extrinsic evidence in Mr Calder’s passport as to the date of Mr Calder’s arrival in South Sudan.
Later on the day of Mr Ladu’s termination, Mr Ladu returned to IRD’s Juba office with a representative of the South Sudan Relief and Rehabilitation Commission (SSRRC), to talk about Mr Ladu’s termination. The SSRRC is a South Sudan government entity that regulates international non-government organisations and their operations within South Sudan. Mr Calder’s evidence was that he met with Mr Ladu and the SSRRC representative. I accept his evidence in this regard. Two days later, on 8 April 2011, Mr Calder arranged a follow-up meeting with a representative of the SSRRC, this time to discuss IRD’s investigation into the seed procurement irregularities that IRD attributed to Mr Ladu’s wrongdoing. Following this meeting, Mr Calder received a package of materials from the SSRRC, which Mr Calder later took back to the United States, where they were read by IRD’s General (Legal) Counsel, Mr Jason Matechak.
The package contained a “Company Profile” document, which was dated February 2011. The Company Profile document indicated that, as at February 2011, Mr Ladu was the Chairman, Managing Director and shareholder of a company known as Ladu & Brothers Company Ltd (Ladu Company). IRD considered that this kind of involvement with a commercial entity was contrary to its Employee Code of Conduct and in breach of Mr Ladu’s Employment Agreement: see Agreement, cl 5 and Appendix B. The Company Profile document was important to IRD for this reason. As appears hereafter, the document was also important for other reasons, including that Mr Ladu was the Ladu Company’s designated “prime” contact person, with an email address of [email protected]; and its contents bore on the Court’s assessment of Mr Ladu’s credibility.
Commencement of proceedings in the Juba County Court
On 7 April 2011, Mr Gueye received a letter from Dr Richard Mulla, an advocate with Mulla & Co. Advocates, in Juba, South Sudan. This letter claimed that Mr Ladu’s termination was in breach of the law of South Sudan and stated that, if Mr Ladu was not reinstated within ten days, then Mr Ladu would sue IRD for the unlawful termination of his employment. Mr Gueye forwarded the letter to Mr Matechak at IRD’s US headquarters in Arlington, Virginia.
On 11 April 2011, Mr Matechak sent a letter bearing that date to Dr Mulla via email. The letter was emailed to the email address printed on Dr Mulla’s letterhead – [email protected]. Mr Matechak also copied the letter to Mr Gueye and other IRD staff. The letter indicated that it was in response to Dr Mulla’s 7 April 2011 letter and advised that, by virtue of cl 13 of the Employment Agreement between IRD and Mr Ladu, Mr Ladu’s Employment Agreement was “subject to the laws of the Commonwealth of Virginia, USA” and that the laws of South Sudan were inapplicable in the case. The letter further stated:
In response to the demand in your letter, we must respectfully decline. And in return, we must ask you to counsel your client to bring forth any ill-gotten gains that may have arisen from his procurement improprieties while employed by IRD. … [W]e estimate this amount to be in excess of $70,000. However, the final amount will be determined at the close of an internal audit we were forced to undertake at our own expense due to Mr Ladu’s actions.
Mr Matechak received no response to this letter from Dr Mulla.
In his 23 May 2013 affidavit, Mr Gueye deposed that he attended a meeting on 12 April 2011 at the SSRRC offices, at which Mr Ladu was also present. He said that, at this meeting, he gave the SSRRC representative a copy of Mr Ladu’s employment contract and a copy of Mr Matechak’s 11 April 2011 letter, telling both the representative and Mr Ladu that “any claim Mr Ladu may have against IRD would have to be arbitrated in accordance with his employment agreement”. I accept Mr Gueye’s evidence in this regard. As explained hereafter, I found Mr Gueye to be an honest and reliable witness. Mr Ladu said that he did not receive a copy of the 11 April 2011 letter at the meeting. Even if this were the case, Mr Gueye’s statement to him and the SSRRC would have put Mr Ladu on notice that his Employment Agreement provided for dispute resolution by arbitration.
Notwithstanding Mr Matechak’s 11 April 2011 letter, on 9 May 2011, Mr Ladu instituted proceedings in the County Court of Juba against IRD seeking damages for the unlawful termination of his employment. IRD retained Sogora & Co. Advocates (Sogora & Co) in Juba, to represent IRD in the Juba County Court. From the outset of their involvement, IRD argued in these proceedings that the Juba County Court lacked jurisdiction because, pursuant to cl 13 of the Employment Agreement between Mr Ladu and IRD, Mr Ladu’s employment was governed by the laws of the Commonwealth of Virginia, not the laws of South Sudan. The Court accepted IRD’s submissions to this effect on 1 July 2011, dismissing Mr Ladu’s proceeding for lack of jurisdiction.
IRD gives notice of its demand for arbitration in Virginia
Meanwhile IRD made it clear in its written Defence dated 14 June 2011 to Mr Ladu’s complaint in the Juba County Court and in letters to Mr Ladu’s legal representative, Dr Mulla, that IRD relied not only on cl 13 but also on cl 14 of the Employment Agreement. Clause 14 provided that:
Disputes. If any dispute arises out of this agreement or any aspect of the employment relationship between you and IRD that cannot be resolved amicably, IRD may, at its sole discretion, bring such dispute to arbitration before a single arbitrator in Arlington, Virginia, in accordance with the rules of the American Arbitration Association. Judgment upon any award rendered by an arbitrator in accordance with this provision will be final and binding upon you and IRD, and may be entered in any court of competent jurisdiction.
(Emphasis added)
The Defence of 14 June 2011 made it clear to Mr Ladu that IRD was exercising its discretion to arbitrate the dispute between him and it, as cl 14 contemplated. The Defence relevantly stated:
This court has no competent Jurisdiction to try this case as the plaintiff is still being waited [on] in Arlington Virginia for Arbitration with pending demand letters dated 11th April, 2011 and June 9th 2011 …
Even before the Defence was filed, IRD made it clear to Mr Ladu’s legal representative in Juba, Dr Mulla, that it was requiring arbitration pursuant to cl 14 of the Employment Agreement. On 11 May 2011, Mr Matechak, for IRD, sent a letter headed “Re: Mr Godfrey Emmanuel Ladu – DEMAND FOR ARBITRATION” via email to Dr Mulla (again, at [email protected]) in which IRD advised that, since there had been no reply to the 11 April 2011 letter –
… it seems that we have no choice but to invoke the dispute resolution provisions contained in Mr Ladu’s employment contract with IRD. See ¶¶ 13 and 14 of Mr Ladu’s employment contract. We trust that Mr Ladu will cooperate with these proceedings to be held in Arlington, Virginia and that no judicial compulsion will be necessary.
The letter advised that “IRD’s basic claims” were as set out in IRD’s earlier letter of 11 April 2011 and added:
Since Mr. Ladu’s termination, IRD has also learned that he violated ¶6(b) of his employment contract arising from his undisclosed ownership of Ladu & Brothers Company, Ltd. in Atlabala – Juba, South Sudan. By express agreement, Mr Ladu is liable to IRD for an additional $25,000 in liquidated damages.
(Whilst the letters of 11 April 2011 and 9 June 2011 (see below) indicated that they were to be copied to [email protected], the email that accompanied them did not show that this had been done; and Mr Matechak agreed in cross-examination that no arbitration notifications went to that email address prior to the 14 June 2011 email (see below).)
A further letter was sent by Mr Matechak, for IRD, on 9 June 2011, via email to Dr Mulla (at [email protected]), headed “Re: Mr Godfrey Emmanuel Ladu – 2nd DEMAND FOR ARBITRATION”. This letter read as follows:
It has been nearly a month since International Relief & Development (“IRD”) demanded that Mr Godfrey Emmanuel Ladu appear for arbitration in accordance with ¶¶ 13 and 14 of Mr Ladu’s employment contract previously provided. It has now been nearly an additional 30 days and we have yet to hear back from you or Mr Ladu.
Our position remains firm. IRD rejects Mr Ladu’s demands and counter demands that Mr Ladu return approximately $70,000 in ill-gotten gains plus administrative costs related to the review and audit of Mr Ladu’s impropriety, plus $25,000 in liquidated damages as per ¶6(b) of his employment contract.
We, after not hearing from you, have no confidence that Mr Ladu will cooperate with these proceedings to be held in Arlington, Virginia. If we do not hear from you within 5 days confirming Mr Ladu’s participation, we will seek judicial measures and compel his participation at his expense in Arlington, Virginia. If Mr Ladu fails to appear we will seek a default judgment against him.
On 14 June 2011, Mr Matechak in Arlington, Virginia received an email from Mr Gueye in Juba, South Sudan stating (in part):
We hand delivered all of your correspondence to our lawyer. At the moment, our lawyer’s stand is to convince the Juba Court of its incompetency to trial this issue.
In today’s session, he defended this before the Judge to whom he mentioned the terms of Godfrey’s contract. … [T]he court has ordered our lawyer to avail both to the judge and to Godfrey’s lawyer, the followings [sic].
- Copy of the contract;
- Copy of the code of conduct;
- Your letter dated April 11;
- Your ‘‘ dated May 11
- Your ‘‘ dated June 9
- Copy of Godfrey’s Australian passport.
Dr Mulla has up to June 21st to reply to the attached correspondence presented, today before the court, by our lawyer.
…The evidence concerning the delivery of the letters of 11 April, 11 May and 9 June 2011 by Mr Alfred K Lado, a lawyer with Sogora & Co acting for IRD in Juba, to Dr Mulla is discussed hereafter.
Also on 14 June 2011, IRD, through Mr Matechak, emailed a further demand for arbitration to Dr Mulla (at [email protected]) and copied it to [email protected]. This letter, headed “Re: Mr Godfrey Emmanuel Ladu – 3rd DEMAND FOR ARBITRATION”, read as follows:
Five days have now lapsed since we provided our second demand for arbitration regarding the employment and collection dispute between International Relief & Development (“IRD”) and Mr Godfrey Emmanuel Ladu. You have failed to respond to my April 11, 2011, May 11, 2011, or June 9, 2011 letters to you. At this point, IRD is hereby initiating arbitration in accordance with ¶¶ 13 and 14 of Mr Ladu’s employment contract previously provided. The substance of the arbitration will be the return approximately $70,000 in ill-gotten gains plus administrative costs related to the review and audit of Mr Ladu’s impropriety, plus $25,000 in liquidated damages as per ¶6(b) of his employment contract. We will of course provide you with the time and place for arbitration so that your client may have one last chance to participate before we commence the proceedings ex parte.
(Emphasis added)
On 24 June 2011, ten days after the first hearing in the Juba County Court, IRD, via Mr Matechak, emailed a notice of commencement of arbitration to Dr Mulla at [email protected] and copied the notice to [email protected]. This read as follows:
You have failed to respond to April 11, 2011, May 11, 2011, June 9, 2011 or June 14, 2011 letters to you regarding the employment and collection dispute between International Relief & Development (“IRD”) and Mr Godfrey Emmanuel Ladu. As set forth in those letters, which I know you have received as they were presented to you in court, IRD has properly invoked the dispute resolution provisions contained in Mr Ladu’s employment contract with IRD. See ¶¶ 13 and 14 of Mr Ladu’s employment contract. IRD will engage a reputable Employment Arbitrator to serve as the sole arbitrator. See for a CV of Paul J Waters, Esq of the Akerman Senterfitt firm. The arbitration will commence at 10:00 am on July 14, 2011 and will be at our offices on 1621 North Kent Street in Arlington, Virginia. Please confirm Mr Ladu’s attendance.
(Emphasis added)
Mr Matechak did not receive any acknowledgement of receipt of any of his letters from Dr Mulla; nor did he receive any electronic notification that his emailed letters had not been delivered to the email addresses ([email protected] and [email protected]) to which they were sent.
Arbitration in the USA
Around 8 July 2011, Paul J Waters, IRD’s nominated arbitrator, sent a letter to IRD’s Mr Matechak, Dr Mulla at [email protected] and to ‘[email protected]’, proposing a date, time and venue for the arbitration and making other preparatory arrangements for the arbitration. (The email address [email protected] was incorrect in that it failed to include the ‘.co.uk’ ending.)
Shortly thereafter, on 14 July 2011, Mr Matechak emailed a responsive letter to Mr Waters, which was copied to Dr Mulla at [email protected] and to Mr Ladu at [email protected]. The letter relevantly read:
Dear Mr. Waters
I am writing to you to confirm receipt of your letter dated July 8th, 2011 regarding the scheduling of the arbitration for July 20th at 10:00am EST. In addition, International Relief & Development would like to confirm;
1) Participation in the pre-hearing telephone conference scheduled for July 18th at 2:00pm.
2) Submission of (a) Memorandum in Support of Judgment. (b) Exhibit list and exhibits.
3)Participation of two witnesses, Jean M Hacken, Chief of Compliance with respect to IRD’s internal investigation surrounding the defendant’s impropriety and Francia Poholchuk, Director, International HR with respect to human resources aspects of hiring. Depending on your view of the documentation submitted, both aforementioned witnesses need not provide testimony.
Should you have any questions or concerns preceding the scheduled conference call, please do not hesitate to contact me directly.
As discussed below, I accept that this letter and IRD’s Memorandum in Support of Judgment were sent electronically to the arbitrator, Dr Mulla at [email protected] and to Mr Ladu at [email protected].
As arranged, there was a pre-hearing conference with Mr Waters on 18 July 2011, in which Mr Matechak for IRD, but not Mr Ladu, participated.
The next day, 19 July 2011, Mr Matechak, for IRD, emailed Mr Waters and Dr Mulla at [email protected] and, again mistakenly, [email protected], relevantly advising that:
As Mr Ladu and his counsel chose not to join the session, I agree that the most efficient means of handling the session will be through the use of a video conference. I am working with my team to provide you with an appropriate dial in and will circulate that later today to you as well as to Mr Ladu and his counsel should they choose to participate.
On 20 July 2011, Mr Waters sent an email to Mr Matechak; to Dr Mulla at [email protected]; and, again in error, to [email protected]. This email advised that the arbitration would be held by videoconference and there would be consequential amendments to the original scheduling arrangements. Mr Waters’ email also stated:
1)For convenience of the parties, the physical location of the arbitration will be moved to the IRD offices at 1621 North Kent Street, Fourth Floor, Arlington, VA 22209. There will also be a videoconference hookup at IP address 38.103.19.102. The address has been tested and is functional.
I also wish to remind all parties, as set forth in my original communication, that a witness and exhibit list, together with a statement of position, were due on July 14, 2011. I have received materials from IRD. I have not received any materials from Mr Ladu. Failure to submit witness and exhibit lists may result in a party being unable to rely on the exhibit or witness tomorrow. In addition, failure to follow that order, as well as failure to attend tomorrow’s proceeding, will support adverse inferences against the non-compliant party as the circumstances justify.
(Emphasis added)
Dr Mulla did not acknowledge receipt of any of these emails; and nor did he respond to them. There was also no response from Mr Ladu personally.
The arbitration by way of videoconference took place before Mr Waters on 20 July 2011, although Mr Ladu did not take part in it. This is the date recorded in the Award as the hearing date and in the certification given by the public notary before whom Mr Waters made his affidavit verifying the Award. (Reference in Mr Matechak’s affidavit to a hearing date of 21 July 2011, though consistent with the 20 July email set out above, is apparently in error.)
On 21 July 2011, Mr Waters as arbitrator published his final arbitration award in favour of IRD. This is the Award that IRD seeks to enforce in this court.
Enforcement of the Award in the US Courts
Mr Ladu did not pay the amount under the Award within the stipulated period or at all. In consequence, between late August and early September 2011, IRD took steps to have the Award registered as a judgment in the United States.
On 2 September 2011, IRD filed a Motion and Application for Confirmation of Arbitration Award in the United States District Court for the Eastern District of Virginia (US District Court) under s 9 of the US Federal Arbitration Act. IRD sought orders confirming the Award and entering judgment against Mr Ladu in the amount of $219,280, the total amount (mistakenly) stated in the Award. (The individual amounts awarded by the arbitrator in fact totalled $213,780 not $219,280, as US District Judge Trenga later noted: see below). Certificates of service filed in the US District Court indicated that service was attempted in various ways (including by email to Dr Mulla at [email protected] and to Mr Ladu at [email protected]).
On 16 September 2011, IRD’s legal representatives in the US District Court proceeding emailed Mr Matechak a copy of an email sent by Mr Ladu to them. Mr Ladu did not, however, appear at the hearing in that Court on 23 September 2011. Indeed, Mr Ladu did nothing in the US District Court proceeding until 14 November 2011, when he filed a letter dated 24 October 2011, with a document entitled “Objection to the Confirmation of Arbitration Award”. Amongst other things, Mr Ladu maintained that he had “no opportunity to defend himself due to lack of notice, bad timing and resources”.
Mr Ladu failed to dissuade United States Magistrate Judge Ivan D Davis of the US District Court from handing down a Report and Recommendation on 12 January 2012 in favour of IRD. In the course of his analysis, Magistrate Judge Davis found that “a review of the Respondent’s objections is not required because it is untimely”.
Mr Ladu’s subsequent challenges to this decision were unsuccessful. On 10 February 2012, following a de novo review hearing, United States District Judge Anthony T Trenga “adopt[ed] and incorporate[ed] the findings and recommendations of the Magistrate Judge” (save for the arithmetical error in the calculation of the total amount of the judgment, mentioned above). Judge Trenga ordered that Mr Ladu’s objection be overruled; that IRD’s motion be granted; and that judgment be entered against Mr Ladu in the amount of $213,780. On 13 February 2012, judgment in this amount was entered in the US District Court, in favour of IRD and against Mr Ladu.
On 14 June 2012, the United States Court of Appeal for the Fourth Circuit handed down judgment affirming the judgment of the US District Court, stating in its reasons that the US District Court “did not commit clear error in determining that Ladu did not file a motion to vacate the arbitration award until more than three months after receiving notice of it”; and on 16 July 2012, the Court made an order denying Mr Ladu’s petition for a rehearing en banc. Mr Ladu has not paid IRD any amount in satisfaction of the judgment of the US District Court entered on 13 February 2012.
LEGISLATIVE CONTEXT
The enforcement of a “foreign award” (as defined in s 3(1): see below) is governed by Part II of the IAA: IAA, s 8(3). The procedure for enforcing such an award in this Court under s 8(3) is the subject of rule 28.44 of the Federal Court Rules 2011 (Cth) (Court Rules). IRD’s compliance with the Court Rules is not in issue.
Section 8(3A) of the IAA provides that “the court may only refuse to enforce the foreign award in the circumstances mentioned in” s 8(5) and s 8(7) (emphasis added). The court cannot refuse to enforce an award for an error of law on the face of the award: TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 295 ALR 596 (‘TCL Air Conditioner (Zhongshan)’) at 607 [33] (French CJ and Gageler J) and 623 [111] (Hayne, Crennan, Keifel and Bell JJ).
Further, it is the party against whom the award has been made who must satisfy the court that it should not enforce the award on a ground for which s 8(5) and s 8(7) provide. Section 8(5) of the IAA relevantly provides:
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:
…
(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; …That is, this Court cannot refuse to enforce the Award unless Mr Ladu “proves to the satisfaction of the court” that a ground listed in s 8(5), including in paragraph (c), is established: see also Uganda Telecom Ltd v Hi-Tech Telecom Pty Ltd (2011) 277 ALR 415 (‘Uganda Telecom’) at 422 [23] (Foster J).
Section 8(7), which is to be read with s 8(7A), further provides:
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.
Section 8(7A) provides as follows:
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.Various terms are defined in s 3(1) of the IAA for the purposes of Part II. They include the following:
…
arbitral award has the same meaning as in the Convention.…
Convention means 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 twenty-fourth meeting, a copy of the English text of which is set out in Schedule 1.
Convention country means a country (other than Australia) that is a Contracting State within the meaning of the Convention.
court means any court in Australia, including, but not limited to, the Federal Court of Australia and a court of a State or Territory.
…
foreign award means an arbitral award made, in pursuance of an arbitration agreement, in a country other than Australia, being an arbitral award in relation to which the Convention applies.
It is not disputed that the Award is a “foreign award” within the meaning of s 3(1) of the IAA, for the purposes of Part II – Enforcement of foreign awards (which includes ss 3 to 14). The United States is a Convention country, as defined in s 3(1) of the IAA.
Section 3(2) of the IAA further provides:
In this Part, where the context so admits, enforcement, in relation to a foreign award, includes the recognition of the award as binding for any purpose, and enforce and enforced have corresponding meanings.
It is also important to bear in mind s 39 of the IAA, which applies in various circumstances, including (as here) where a court is considering an exercise of power under s 8 to enforce, or refuse to enforce, a foreign award (s 39(1)(a)(i) and (ii)); or where a court is interpreting the IAA (s 39(1)(b)). Where s 39 applies, s 39(2) requires the court to have regard to the objects of the IAA and to the fact that:
(i)arbitration is an efficient, impartial, enforceable and timely method by which to resolve commercial disputes; and
(ii) awards are intended to provide certainty and finality.
The objects of the IAA are set out in s 2D and, relevantly for this case, include:
(a)to facilitate international trade and commerce by encouraging the use of arbitration as a method of resolving disputes; and
(b)to facilitate the use of arbitration agreements made in relation to international trade and commerce; and
(c)to facilitate the recognition and enforcement of arbitral awards made in relation to international trade and commerce; and
(d)to give effect to Australia’s obligations under 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 twenty-fourth meeting; …
Reference to Part II shows that it is intended to implement the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, opened for signature 10 June 1958, 330 UNTS 3 (entered into force 7 June 1959) (New York Convention): see, for example, Schedule 1, Article III, IV and V; and see also TCL Air Conditioner (Zhongshan) at 599 [7] (French CJ and Gageler J) and 610 [47] (Hayne, Crennan, Kiefel and Bell JJ).
MR LADU’S SUBMISSIONS
Since Mr Ladu, as the party requesting the court to refuse to enforce the Award, bears the onus of persuading the Court that a ground in s 8(5) or s 8(7) is made out, it is convenient to outline his position first. In closing written submissions, the case for Mr Ladu was summarised as follows:
(1) any notices purportedly sent to Dr Mulla were not effective because,
first, he was not an authorised agent of Ladu for the purposes of service
of the arbitration proceedings, second, the notices were not, as a matter
of fact, received by Dr Mulla, third, the notices were not passed on by
Dr Mulla to Ladu (with the consequence that Ladu did not receive
“notice” of either the appointment of the arbitrator or of the arbitration hearing);
(2) any notices sent to the lbc email address were not effective to give
notice to Ladu as it was not his email address at the relevant time; nor
did Ladu & Brothers Company receive any such documents or pass
them on to Ladu;
(3) neither Ladu nor Dr Mulla were personally given any of the notices
which IRD contends were delivered personally, whether by Lado,
Gueye or Matechak;
(4) all of the notices relied on by IRD to show that Ladu was notified of the
appointment of the arbitrator prior to 8 July 2011 are ineffective
because the arbitrator was not appointed until 8 July 2011;
(5) the arbitration hearing in fact took place on 21 July 2011; there was no
notification to Ladu or to Dr Mulla of any arbitration hearing date, let
alone a change in the hearing date from 20 July 2011 to 21 July 2011;
(6) even if the arbitration hearing took place on 20 July 2011, for the
reasons under (1) to (3) above, Ladu was not given notice of the
arbitration hearing; and
(7) Ladu did not participate in the arbitration hearing and, in circumstances
where he has legitimate and arguable defences to each of the claims on
which IRD was successful, it would be contrary to public policy to
allow the award to be enforced as a judgment in this Court.
There were said to be four issues:
(1) whether Ladu was given notice of the appointment of the arbitrator: see
s. 8(5)(c) …;(2) whether Ladu was given notice of the hearing of the arbitration, which
took place on either 20 or 21 July 2011: s. 8(5)(c);
(3) whether Ladu was otherwise unable to present his case in the
arbitration proceedings: see s. 8(5)(c); and
(4) whether enforcing the award would be contrary to public policy, in that
a breach of the rules of natural justice has occurred in connection with
the making of the arbitral award: see ss. 8(7)(b) and (7A)(b).In short, the case for Mr Ladu was that enforcement of the Award should be refused because the Court should be satisfied on the evidence before it that he was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings. Mr Stirling conceded that, if Mr Ladu failed to prove to the Court’s satisfaction that s 8(5)(c) of the IAA was made out, then Mr Ladu would also fail to establish his case under s 8(7)(b) (read with s 8(7A)(b)). As Mr Stirling put it, “[a]rguments 3 and 4 are a consequence of the notice points 1 and 2”. Although Mr Ladu’s submissions (especially at (3) above) were not limited to lack of notice, his case at trial focussed on the alleged lack of notice of the arbitration proceedings and the appointment of the arbitrator. In so far as Mr Ladu made a separate allegation that he did not receive notice of the hearing, I discuss (and reject) this allegation for the reasons stated at [186] below. Mr Ladu did not advance any other reason for his assertion that he was unable to present his case in the arbitration proceedings.
In seeking to satisfy the court that he had not received proper notice of the arbitrator’s appointment or of the arbitration proceedings, Mr Ladu relied on his own affidavits of 7 March 2013, 3 May 2013 and 11 July 2013 and the evidence he gave in person at the hearing. Mr Ladu also relied on the affidavit of Dr Mulla affirmed on 5 July 2013 and the evidence he gave by way of videoconference; as well as the affidavit of Mr Luwaya Wani sworn on 4 July 2013 and the evidence he gave by way of videoconference. The three witnesses were subject to cross-examination; and their evidence is discussed hereafter.
IRD’S SUBMISSIONS
IRD’s position was straightforward enough. It would obtain an order for enforcement of the Award if Mr Ladu was unable to prove to the Court’s satisfaction that he was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings.
IRD relied on the evidence of Messrs Matechak, Gueye and Calder, given by way of affidavit and at the hearing by way of videoconference. All three witnesses were subject to cross-examination. IRD also relied on four affidavits of Mr Stephen Sawer, a solicitor for IRD in this proceeding who also gave evidence at the hearing in person; and the affidavit and videoconference evidence of Mr Benjamin Sogora Moses (in the hearing transcript, also “Mr Sagora”), an advocate in South Sudan. I refer to him hereafter as Mr Sogora. He was also subject to cross-examination. The evidence of these witnesses is also discussed hereafter.
In closing submissions, in response to Mr Ladu, IRD submitted that it gave notice of its intention to arbitrate by demands for arbitration on 11 May 2011, 9 June 2011 and 14 June 2011 and a commencement of arbitration notice on 24 June 2011. IRD further submitted that: (1) each notice was served by email on Dr Mulla in his capacity as Mr Ladu’s counsel, and was copied to Mr Ladu by email to [email protected]; (2) the demands for arbitration were served on Dr Mulla personally in June 2011 during the South Sudan court proceedings that were initiated by Mr Ladu; and (3) the letters of 11 May 2011, 9 June 2011 and 14 June 2011 were given to Dr Mulla by Mr Lado, then an advocate with Sogora & Co, when Mr Lado was driven by Mr Sogora to Dr Mulla’s office in Juba.
It is convenient to note here that, when Mr Stirling, counsel for Mr Ladu, informed the Court that he apprehended that IRD might argue that, even if it had failed to give notice, this should not preclude an enforcement order because Mr Ladu had in fact “no defence to what happened in the arbitration anyway”, Mr Crennan, counsel for IRD, responded that IRD would not contend that, if Mr Ladu won on the notice point, nonetheless the Court had discretion to order that the Award be enforced.
CONSIDERATION
Having regard to the way Mr Ladu put his case there is but one principal issue for determination. Has Mr Ladu proved to the satisfaction of the Court that he was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings? The answer in this case almost entirely depends on the evidence before the Court. A subsidiary issue concerning notice of the arbitration hearing is also discussed hereafter.
The evidence adduced by the parties
The evidence adduced by Mr Ladu
Since Mr Ladu bears the onus of proof, it is most convenient to commence consideration of the primary question with an analysis of the evidence adduced by him.
Mr Ladu
Mr Ladu gave evidence concerning his employment by IRD and, as already noted, the termination of that employment. Mr Ladu’s evidence was that, when his employment was terminated, he was not given an opportunity to discuss IRD’s “allegation of mismanagement and damage to IRD programs” and that he was not afforded an opportunity to have the dispute resolved amicably prior to arbitration.
Mr Ladu maintained in evidence that he had no notice of the appointment of the arbitrator or of the arbitration proceedings. He deposed that he did not receive information about the arbitration and the Award until 14 September 2011, which was more than thirty days after the Award, with the consequence that it had become binding and he was deprived of the opportunity to appeal. In his 3 May 2013 affidavit, Mr Ladu stated that “had I been aware of the proceedings, I would have appeared and submitted written material for the arbitrator’s consideration”.
More specifically, Mr Ladu said that he consulted Dr Mulla, of Mulla & Co. Advocates, after his employment with IRD was terminated; and that, on 30 March 2011, Dr Mulla telephoned IRD’s Country Director (Mr Gueye) in relation to this event and was told to contact IRD headquarters in the United States. Mr Ladu deposed that, on 2 April 2011, Dr Mulla sent a letter on his behalf to IRD’s Country Director. The letter (exhibit GL-20 to Mr Ladu’s 7 March 2013 affidavit) read in part:
Ref: Legal representation of Godfrey Ladu Emmanuel
Please be informed that my instructions to represent Godfrey Ladu Emmanuel are limited to the jurisdiction of South Sudanese Courts only.
The author of the letter was said to be “Dr Richard K Mulla Legal Counsel for Godfrey Ladu Emmanuel”. In a subsequent affidavit, Mr Ladu reiterated that he did not instruct Dr Mulla to act on his behalf in relation to the arbitration proceedings.
I reject Mr Ladu’s evidence that he consulted Dr Mulla about the termination of his employment on 30 March 2011. As explained, I accept the evidence of Mr Gueye and Mr Calder that his employment was not terminated until 6 April 2011. Mr Ladu could not have spoken to Dr Mulla on 30 March 2011 about his termination, because his termination had not yet occurred. I accept Mr Gueye’s evidence that he kept IRD’s termination letter (which was dated 1 April 2011: see below) confidential until the arrival of Mr Calder. As stated below, I also accept Mr Gueye’s evidence that he did not have a conversation with Dr Mulla on 30 March 2011 (as Mr Ladu and Dr Mulla claimed); and that Mr Gueye did not receive the letter bearing the date “2 April 2011” and marked GL-20 to Mr Ladu’s 7 March 2013 affidavit.
Mr Ladu deposed that Dr Mulla ceased representing him when, on 1 July 2011, the County Court in Juba declared that it had no jurisdiction to determine the proceeding that Mr Ladu had initiated. In this regard, Mr Ladu also relied on a letter bearing the date 18 September 2011 (GL-24 to his affidavit of 7 March 2013), said to be written by Dr Mulla to Mr Gueye, as IRD’s Country Director. This letter read as follows:
Re: Arbitration letters
Dear Mor,
Your former employee, Mr Godfrey Ladu has contacted our office regarding assertions that your organization has sent me letters concerning arbitration from your offices in the United States of America.
First of all, I draw your attention to my letter sent to you dated 2nd April 2011, wherein you were notified of limitations concerning jurisdiction. I only handle local legal matters in connection with organizations and Institutions within the South Sudan legal system. Therefore, as your organization operate and is registered locally in South Sudan, I expected your registered office here, located just a few kilometres from my office, to directly communicate with my office, including sending or delivery of important letters. Normally, all letters, delivered to my office are recorded, filed and acknowledged.
Please note, there are no records of the arbitration letters that were brought to my office. And, I did not receive, see or read any of those arbitration related letters. Also, I understand there was assertion that some of those letters were given to me in front of a judge. This is not true. Please immediately let me know which judge, date and time of the delivery.
Due to the aforementioned, I have not been able to inform Mr Godfrey Ladu on matters concerning arbitration of his dispute with your organization in the United States of America. If Mr Ladu had been informed, perhaps, he would have sought an American–based legal Counsel to represent him in the United States of America on the arbitration matter.
Please respond to this letter as a matter of urgency if there are any issues you want to clarify.
I doubt that this letter was created on or about the date it bears. IRD’s Juba office closed in July 2011 and there was therefore no Country Director working there after that date (see below). Even if Mr Ladu did not know this, as he claimed, Dr Mulla, who worked “just a few kilometres” away, probably did. Even if Dr Mulla did not know that IRD’s office had closed, the letter could not have been delivered to the addressee, because IRD and its staff were no longer there.
Mr Ladu’s evidence was that he ceased being a director of the Ladu Company after November 2007, when he sold his shares in the Company. Mr Ladu exhibited a letter (GL-46 to his 3 May 2013 affidavit) purportedly from the Ladu Company’s then Director, Morris Luate (also Morris Taipei Luwate) to the “IRD Country Director South Sudan” dated 13 April 2011, advising that “Mr Godfrey Ladu does not work for us and is not associated with us since 2007”. Indeed, the Ladu Company’s administrator, Mr Wani (see below) deposed that he had delivered a letter dated 13 April 2011 to the IRD’s compound about that date.
Mr Gueye deposed, however, that he did not receive this letter and first read it only as part of GL-46 to Mr Ladu’s 3 May 2013 affidavit. As explained below, I accept that Mr Gueye was an honest and reliable witness, whose evidence was to be preferred to that of Mr Ladu and Mr Wani (also discussed below). It is improbable that Mr Gueye received this letter and did not inform Mr Matechak at IRD’s headquarters in the United States of its receipt and contents. Like some other documents relied on by Mr Ladu (see below), the letter was a recent fabrication designed to support Mr Ladu’s claim that his involvement with the Ladu Company ceased in November 2007. In any event, Mr Ladu did not explain the provenance of the letter and the basis of its admissibility was not established.
Mr Ladu said (and I accept) that he did not provide IRD with the email address [email protected]. IRD obtained this email address from the Ladu Company’s Company Profile document, which Mr Calder obtained shortly after 8 April 2011 from the SSRRC and subsequently provided to IRD staff in the United States. The email address and the Company Profile document are discussed further below.
Mr Ladu argued that IRD had an email address for him, which was [email protected]; and that IRD might have used this address to give him the requisite notice of the arbitration. It may be accepted that Mr Ladu’s IRD employee profile gave Mr Ladu’s email address as [email protected]; and that, in May 2011, Mr Ladu communicated via this email with IRD. On 20 May 2011, Mr Daniel Misser, an associate compliance officer at IRD, emailed Mr Ladu at this address (and at [email protected]); and Mr Ladu acknowledged receipt by an email also dated 20 May 2011 sent from [email protected]. The fact that IRD did not use this email address to communicate with Mr Ladu about the arbitration did not, however, show that IRD did not give Mr Ladu proper notice, as he claimed.
As I have already indicated, I did not find Mr Ladu an honest and reliable witness. I have already referred to instances of fabrication. There were others, to which I now turn.
Mr Ladu and the Ladu Company
As noted, Mr Ladu sought to distance himself from the Ladu Company. As explained below, I reject Mr Ladu’s evidence that he ceased being a director of the Ladu Company after November 2007. In so doing, I find other instances of recent fabrication of evidence by him.
Mr Ladu initially said that, shortly before 11 or 13 July 2013 (it is unclear to which date he was referring), he obtained certain official documents relating to the Ladu Company previously filed with relevant government agencies (the South Sudan Register of Companies, the Department of Justice and the Ministry of Legal and Constitutional Affairs). At the hearing on 27 November 2013, however, Mr Ladu stated that all three agencies were part of the same business complex in Juba and that the documents came only from the Registrar of Companies.
The documents were said to include the following: a certificate of incorporation dated 6 September 2006; a resolution at a special general meeting of the board dated 10 November 2007; a resolution at a special general meeting of shareholders dated 19 November 2007; an affirmation by a lawyer for the Ladu Company dated 14 March 2012 on the special resolution; and the Memorandum and Articles of Association of the Ladu Company.
There were, however, significant discrepancies between the documents that Mr Ladu said he obtained (Mr Ladu’s documents) and what appeared to be substantially the same documents that Mr Sogora obtained also from the South Sudan Register of Companies, at the request of Mr Matechak (Mr Sogora’s documents). Mr Sogora’s documents included: the Ladu Company’s Memorandum and Articles of Association dated 6 September 2006, a front page of the Ladu Company’s Memorandum and Articles of Association dated 6 September 2006 with date stamps attaching a document entitled “Certificates and Other Documents Accompanying Annual Return”; and a special resolution of the Ladu Company dated 14 March 2012 recording a resolution as having occurred on 10 November 2007.
When Mr Ladu’s documents (in GL-49 to his affidavit of 11 July 2013) are compared with Mr Sogora’s documents, the discrepancies between Mr Ladu’s and Mr Sogora’s documents lead me to infer that the documents in GL-49 were prepared for the purpose of the US court proceedings or the proceeding in this Court. By virtue of the discrepancies, Mr Ladu’s documents (and only those documents) indicate that Mr Ladu ended his connection with the Ladu Company in 2007. Mr Sogora’s documents do not support this conclusion.
I accept Mr Sogora’s sworn evidence that, in June 2013, at Mr Matechak’s request, he sought the documents (now marked BSM-7, BSM-8 and BSM-9 to his 25 November 2013 affidavit) from the Companies Registry in Juba and received them from the South Sudan Register of Companies on 4 June 2013. BSM-7 is a copy of the Memorandum and Articles of Association of the Ladu Company, the front page of which states that the Ladu Company was incorporated on 6 September 2006. This page also bears two stamps. They are: the stamp of the “Ministry of Legal Affairs & Constitutional Development (MOLACD) Office of the Chief Registrar, Juba, Southern Sudan”; and “South Sudan Associated Advocates, South Sudan”. The latter stamp is dated 18 August 2006. The Memorandum of Association indicated that, as at that date, there were six subscribers, although only three signed the document, including “Godrey Ladu”. Mr Ladu is shown as subscribing for 75 out of 100 shares.
Clause 37 of the Ladu Company’s Articles of Association states that the company’s directors were to be Mr Ladu and five others (Samuel Remo, Morris Taipei, Lobaris Crasser, Tumbura James and Consi James). Mr Ladu’s signature appears against his name. The stamp of the “South Sudan Associated Advocates, South Sudan” appears beneath their names and signatures, bearing the date 18 August 2006.
BSM-8 is a three-page document, consisting of the front page of the Ladu Company Memorandum and Articles of Association, this time with only the stamp of the “South Sudan Associated Advocates, South Sudan”. The date written within this stamp is illegible. In addition, the front page bears some handwritten dates (6 9 07, 6 9 08, 6 9 09 6 9 10 and 6 9 11). The second page is headed:
Republic of South Sudan
Ministry of Justice
(MOJ)
The Companies Act, 2003)
Office of the Chief Registrar of Companies, NGOs, Societies and Association
Certificates and other documents accompanying annual returnThis page shows other stamps headed “Renewed” and at the bottom “Office of the Chief Registrar, Juba, Southern Sudan”, with each of the dates written within them. The third page appears to be the back of this second page.
The discrepancies between BSM-7 and BSM-8 (obtained by Mr Sogora) and the equivalent documents in GL-49 presented by Mr Ladu were as follows:
(a)the front page of Mr Ladu’s Articles and Memorandum of Association bears the dated “Renewed” stamps, most of which in fact appear on the second page of Mr Sogora’s BMS-8, which is the Tax Return document “Certificates and other documents accompanying annual return”. The effect of these stamps on Mr Ladu’s document is to give the impression that his document existed in this form since 2007. Mr Sogora’s Articles and Memorandum of Association document (BSM-7) does not have this front page.
(b)The second last page of Mr Ladu’s Articles of Association document (in GL-49) purports to list the subscribers for the Company’s share capital at 17 November 2007, as Bismark Bura, Tom Kurasuk, “Morris Tapei” [sic], Lubari Ceaser, Malisi Lopuc, Moro Ceaser Baba and Tumbura James. There is no such list in Mr Sogora’s BSM-7. Further, this page in Mr Ladu’s document is stamped “The Republic of South Sudan Ministry of Justice, Office of the Chief Registrar, Juba, South Sudan” and “William Umba Lako, date 7.11.2007”; and would, if genuine, indicate that Mr Ladu was not a shareholder as at 17 November 2007, as he indeed claimed. This particular page does not, however, exist in the Articles of Association document (BSM-7) obtained by Mr Sogora. I note too that, in contrast to the rest of Mr Ladu’s document, this different page is unnumbered and its typeface is not the same as the other pages of the same document. Moreover, the stamp of the advocate, “William Umba Lako”, that appears in Mr Ladu’s Articles of Association document does not appear in the Articles of Association document obtained by Mr Sogora. This is significant, as appears below.
(c)Clause 37 of Mr Ladu’s Articles of Association document provides a different list of directors to that in cl 37 of Mr Sogora’s Articles of Association document. Mr Ladu’s document lists as directors Morris Tapei Luwate, Ceaser Lubari, Malisi Loputo, Moro Ceaser Baba and Tom Kurasuk. Mr Ladu’s name does not appear in this document as a director, but his name does appear as a director in Mr Sogora’s Articles of Association document. I note too that the typeface of the “15” representing the page number in Mr Ladu’s document (appearing under cl 37) is different to the numbers in the balance of the document. There are a number of other differences between this page of Mr Ladu’s Articles of Association document and the equivalent page in Mr Sogora’s Articles of Association document, which are evident on comparison.
As already indicated, I accept that, as IRD submitted, Mr Ladu’s Memorandum and Articles of Association document in GL-49 was created for court proceedings in which Mr Ladu has contested the Award and in order to substantiate his claim that he had ceased to be a director as at 17 November 2007. This is, in the circumstances, the probable explanation for the discrepancies to which I have referred. (It is unnecessary to determine whether the document was created specifically for the present proceeding or at an earlier time for the proceedings in the United States.) Mr Ladu’s document is not, therefore, a contemporaneous document recording a change in the identity of the shareholders and directors of the Ladu Company in 2007.
At the hearing on 27 November 2007, Mr Ladu said that the documents obtained by him from the Registrar of Companies shortly before 11 or 13 July 2013 were loose when they were given to him; and that he sent them from South Sudan to his lawyers. Mr Ladu believed that he had put his affidavit together in Juba. When asked whether the annexure certificate and exhibit GL-49 were sent to him by his solicitor or put together by him in Juba, Mr Ladu initially said “it’s confusing because I can’t remember well”.
I am not persuaded that, because of Mr Ladu’s evidence in re-examination on 27 November 2012, I should conclude that Mr Ladu “simply” “put together” the Articles of Association, for the purposes of preparing his exhibit from the loose documents he obtained from the Registrar of Companies. I do not accept that there was merely “some superficial appearance of concoction”, as Mr Stirling submitted.
Mr Sogora’s evidence, which I accept, was that he also received BSM-9 from the South Sudan Register of Companies on 4 June 2013. This included a document dated 14 March 2012, with the letterhead “William Umba Lako Advocate & Legal Consultant”, dated 14 March 2012. Under a subheading “Special Resolution”, there appeared the following:
At an ordinary meeting of the board of directors of LADU AND BROTHERS Co. Limited held at its HQ in Juba South Sudan on the 10th November 2007 [, t]he under signed was nominated to be the Managing Director of LADU AND BROTHERS a private company limited by share that register [sic] under South Sudan Company act [sic] 2003, at which meeting quorum for the shareholders was at all times present and the following was duly adopted:
BE IT RESOLVED that the company nominated Mr Morris Taipei Luwate to be the Managing Director of the company and legal agent for the company transactions and any other financial transactions.
[signature]
Morris Taipei LuwateFile by [signature]
Advocate & Legal Consultant
William UmbaBSM-9 includes further pages, including a page dated “10th November 2007”, which relevantly reads:
Subject: Resolutions at the Special General meeting [sic] of the Board:
The meeting held at At Jabara Juba in the premises of the company it was resolved that:
(a)The Company shall concentrate in its core business of flour Grinding mil [sic] and building materials Supplies.
(b)The company shall seek new shareholders through advertisement in the Print media and the radio network [sic]
(c)Those shareholders who wish to sell their shares Back to the Company or to others outside the company are encouraged to do so.
(d)The price per share has been reduced from $1000 One thousand dollars to 75 dollars to encourage more participation by the local population.
(e)Mr Cons [sic] James and Godfrey Ladu have stepped down from the post of Directors of the company due to pursue other interests outside the company and have divested their shares in the company. Also Samuel Remo and Tom Kurasuk Janet have received the previous allocations of Mr Godfrey Ladu following payment of a collective sum of $35,000 as a consideration for receiving shares previously held by Mr Godrey Ladu who left the company and departed overseas to pursue other interests.
(f)Mr Bismarck Bura and Tom Kurasuk have been appointed as new board Directors of the company to replace the two directors that have moved away from the company to pursue other interests.
(g) The new share holding list is thus:
Bismarck Bura 55 shares
Tom Kurasuk 20 shares
Morris Tapei 5 shares
Lubari Ceaser 5 shares
Malisi Lopup 5 shares
Moro Ceaser Baba 5 sharesTumbura James 5 shares
Resolution passed on 7th of November 2007 at Juba.
These names, apparently with signatures, were listed on the following page. The name of Morris Tapei Luwate, styled Managing Director, appeared below this list and the Ladu Company stamp, with the date “21 November 200” [sic], was applied over and above the words “Managing Director”.
Another page in BMS-9 is a letter dated 12 March 2012 addressed to the Registrar of Companies, Associations and NGOs by “Morris Luate” [sic], “Director”, referring to a change in share ownership “as per the minutes of the resolutions as attached” and stating:
Therefore we kindly ask you office [sic] to endorse th[e] new share holders [sic] of the company as the older list is now obsolete and those members are no longer share holders [sic] of the said fairm [sic].
A following page closely resembling the second last page of Mr Ladu's Articles of Association document, purported to list the subscribers for the Ladu Company share capital at 17 November 2007. There are some discrepancies between this page and the second last page of Mr Ladu’s Articles of Association that indicate that the pages are not precisely the same, particularly when regard is had to the placing of the two stamps on the relevant pages. A final page headed “Republic of South Sudan Ministry of Justice” related to the “assessment/comment of Memorandum of Understanding and Article Association [sic]” and purported to record official approval of changes to company documents.
Mr Ladu also provided a version of a document entitled “Resolution at Special General meeting of the board” dated 10 November 2007 and a letter apparently from Morris Taipei Luwate dated 14 March 2012, on the letterhead of “William Umba Lako Advocate and Legal Consultant” relating to the special resolution pursuant to which Mr Luwate became Managing Director of the Ladu Company and referring to the 10 November 2007 resolution. Both these documents formed part of GL-49. The 10 November 2007 document was stamped with the stamp of the advocate, William Umba Lako. The William Umba Lako stamp on this document bears the date 10 November 2007, which, as IRD noted, gives the impression that the document itself was created on 10 November 2007. This stamp also seems to have appeared on the 14 March 2012 document (although the stamp was unclear) and on the unnumbered page in Mr Ladu’s Memorandum and Articles of Association, with the date “7 November 2007”.
The 10 November 2007 document presented by Mr Ladu in GL-49 concluded with the name of “Luwaya Wani”, described as “Adminstrator Ladu & Brothers Company Ltd, Atlabara, Juba South Sudan”. The William Umba Lako stamp on this document bears the date 10 November 2007, which, as IRD noted, gives the impression that the document itself was created on 10 November 2007. The other version of this document in Mr Sogora’s BSM-9 concludes with the name Morris Tapei Luwate, identified as Managing Director, and Mr Wani’s name does not appear. The document dated 10 November 2007 in Mr Sogora’s BSM-9 does not bear the stamp of William Umba Lako, with the date 10 November 2007. (There are also other discrepancies between Mr Sogora’s BSM-9 and the equivalent pages in Mr Ladu’s GL-49, which are evident on comparison.)
In BSM-9, the letter dated 12 March 2012, entitled, “Share holder [sic] records for LADU AND BROTHERS COMPANY LTD”, indicates that this and the other documents in BSM-9 were lodged with the South Sudan Companies Registry on or shortly after 12 March 2012. This was some four weeks after Mr Ladu had first claimed in the United States appellate proceeding that he did not have any on-going involvement with the Ladu Company.
I accept that, as IRD argued, Mr Ladu created his version of the 10 November 2007 resolution for the purpose of court proceedings (most probably in the United States) in order to support his claim that he ceased to be a shareholder and director of the Ladu Company in November 2007. I accept that, as IRD submitted, the 10 November 2007 document was not a document created on or around 10 November 2007. I also find that the documents forming Mr Sogora’s BSM-9 were brought into existence and filed with the South Sudan Companies Registry for the same purpose, which is further supported by the date on which they were filed.
In cross-examination, Mr Ladu was taken to the documents in GL-49 to which I have referred and to the documents in Mr Sogora’s BSM-7, BSM-8 and BSM-9. Mr Ladu denied that he had created any of these documents for the purposes of court proceedings. I reject Mr Ladu’s evidence and find that Mr Ladu did not give truthful evidence in this regard. As indicated already, I did not find Mr Ladu an honest and reliable witness.
Company Profile document
As already noted, shortly after 8 April 2011, Mr Calder received documents from the SSRRC, which he later provided to IRD staff in the United States. These documents contained the “Ladu & Brothers Company Ltd Company Profile” (Company Profile). The Company Profile was dated February 2011 and prominently displayed the email address [email protected] on its front page. As noted below, elsewhere the Company Profile stated that the “Prime” Contact Person was “Godfrey Ladu Emmanuel”. Mr Wani’s evidence was that the Company Profile had in fact been prepared by the Ladu Company. (I return to his evidence below.)
The Company Profile stated (at page 6) that:
LADU & BROTHERS CO. LTD is 100% owned by South Sudanese nationals and elites. They are: Associate Professor Godfrey Ladu Emmanuel, Mr. Samuel Remo, Mr. Lubari Ceasar [sic], Mr. Tumbura James, Mr. Morris Taipei [sic].
On page 11, the Company Profile stated that “[t]he day to day company operations is run by the Associate Professor Godfrey Ladu Emmanuel, the Managing Director and Chairman of the company”. An organisational diagram also identified Associate Professor Godfrey Ladu as “Chairman & Managing Director”.
Under the heading, “Company Details” (at page 27), there appeared the following:
Email: [email protected]
Contact Person (Prime): Godfrey Ladu Emmanuel (Associate Professor),
Designation: Managing DirectorUnder the heading “Key Personnel” (on page 29), the Company Profile stated:
Managing Director & Chairman – Godfrey Ladu Emmanuel (Associate Professor)
In addition to being a top notch hands-on Managing Director (MD); Ladu, an Associate Professor and Southern Sudanese national, is a qualified scholar. Among other qualifications he holds a Masters degree in Natural Resources (University of Melbourne, Australia), an MBA in Technology (University of La Trobe) awarded in conjunction Association of Professional Engineers, Scientist [sic], Managers, Australia (APESMA).He has extensive experience in project management and development of international nature. Prior to forming the company, he worked for 24 years in various capacities in Australia and Southern Sudan in the Natural Resource Management sector. He has overseen programs aimed at sustainable forest harvesting, management and development that have comprehensive infrastructure development strategies within the forest areas with subcomponents of roads, water point, and community livelihoods development. He is an associate member of Institute of Wood Science and member of APESMA and Lions Club International.
Godfrey, the MD is currently engaged in market research and monitoring for potentially new investment opportunities for the company and synergy with industry leaders across the globe. Acting on behalf of the company, the MD has frequently been hired by multinational companies and organization as the in-country private consultant supporting the local business interests and performing business development within the Southern Sudan market.
The Company Profile thus unequivocally identified Mr Ladu as Managing Director and Chairman of the Ladu Company as at February 2011, as well as the “Prime” Contact Person for the Ladu Company, with the email address [email protected]. When Mr Ladu was asked about this in cross-examination, he was unable to give a credible explanation.
In cross examination, Mr Ladu gave evidence that he had nothing to do with the preparation of the Company Profile. When asked how the author of the document knew so much about him, Mr. Ladu answered “most people know about me ... in South Sudan”. I accept that, as Mr Crennan submitted, this was a disingenuous answer. Amongst other things, Mr Ladu gave evidence in cross-examination that he joined the Lions Club International in Footscray five years ago. When asked how the author of the Company Profile could have known that he was a member of the Lions Club when Mr Ladu claimed to have left the Ladu Company in 2007, Mr Ladu said:
I have mentioned to people that I want to form a Lions Club in South Sudan. And many people have come to meetings.
Once again, this was a disingenuous answer, which tended to highlight that Mr Ladu was not an honest and reliable witness.
A document headed “Completion Certificate” and dated 25 September 2009 was attached to the Company Profile document. It referred to “Japan International Cooperation Agency (JICA)” as employer; the Ladu Company as contractor; and identified “Mr Godfrey Ladu Emmanuel” as the Managing Director of the Ladu Company. Mr Ladu agreed in cross-examination that a signature which was or appeared to be his signature was on the “Completion Certificate” document. In re-examination at the hearing on 27 November 2012, Mr Ladu denied that he had signed the Completion Certificate or that he had prepared, or provided information for the preparation of, parts of the Company Profile. As explained, I have not found Mr Ladu to be a truthful witness.
Bearing in mind the above discussion and that, as stated below, I did not find Mr Wani (purportedly the Ladu Company’s administrator) to be a reliable witness, I reject Mr Ladu’s evidence that he ceased to be a major shareholder and Managing Director of the Ladu Company in November 2007. Mr Ladu first claimed he was no longer involved with the Ladu Company to justify his assertion in the United States courts that he did not receive the communications sent to l[email protected]. He has continued to claim in this Court that he left the Ladu Company in November 2007 in order to support his reliance on s 8(5) (and s 8(7)) of the IAA. I reject Mr Ladu’s evidence in this regard and find that he has presented documents recently fabricated by him to support his claim.
Bearing in mind my rejection of Mr Wani’s evidence (see below), I also reject Mr Ladu’s evidence that he did not receive any communication concerning the arbitration sent by IRD to [email protected]. Further, bearing in mind my rejection of Dr Mulla’s evidence (see below), I reject Mr Ladu’s evidence that he was not informed by Dr Mulla of the substance of communications about the arbitration that Dr Mulla received from IRD or the arbitrator.
Having regard to the conduct of the hearing, the parties’ use of videoconferencing to adduce evidence from witnesses outside Australia and the time available between the conclusion of the hearing on 6 September 2012 and its resumption on 26 November 2012 to take remedial steps, I reject the submission (intimated in Mr Stirling’s closing written submissions) that in this proceeding Mr Ladu was in any sense deprived of a proper opportunity to put forward his case and respond to IRD.
Finally, I would observe that IRD did not rely on evidence by Mr Ladu in cross-examination about the flow of certain funds into a bank account in his name. This evidence was ultimately not explored. I do not therefore refer to it. I have not had occasion to rely on it. It is therefore unnecessary to discuss Mr Stirling’s submissions on the subject.
Mr Wani
Mr Wani’s evidence was that he had been the Company Administrator for the Ladu Company since September/October 2006. Mr Wani stated in his affidavit that:
My duties as company administrator are to receive emails and letters and also send emails and letters on behalf of the Company and any other duties assigned to me.
Mr Wani’s evidence was that, due to lack of experience and educated staff, the Ladu Company had stopped trading in 2007 and only started trading again in 2012.
Mr Wani deposed that Mr Ladu had not been “involved with the Company in any capacity” since November 2007, when he also ceased to be a director. Mr Wani said that:
The first time I heard from the Respondent since November 2007 was on 16 September 2011 when he called to ask if we received any documents addressed to him. I informed him we had not.
In cross-examination, Mr Wani agreed that the Ladu Company email address was indeed [email protected], being the address to which IRD had sent some of its communications. Nonetheless, in his affidavit Mr Wani denied that the Company received emailed documents from IRD at [email protected], in particular:
a. Email dated 11 May 2011 attaching demand for arbitration;
b. Email dated and 9 June 2011 attaching further demand for arbitration;
c. Email dated 14 June 2011;
d. Email dated 24 June 2011 attaching notice of commencement of arbitration;
e. Email dated 8 July 2011 attaching engagement letter and scheduling order;
f. Email dated 14 July 2011;
g. Email dated 19 July 2011
h. Email dated 20 July 2011;i. Email dated 21 July 2011 attaching final award;
j. Email attaching Motion and Memorandum in support;
k. Email attaching Report and Recommendation;
l. Email dated 1 February 2012 attaching Motion to Overrule the Objections to Report and Recommendation.He repeated this denial in cross-examination.
In his affidavit, Mr Wani deposed that he had been asked by Mr Morris Luwate to deliver a letter dated 13 April 2011 to IRD’s Country Director, adding:
I personally delivered the letter to the Applicant’s premises at Kololo Road Tongping in Juba, Central Equatoria State. I did this by meeting the guard at the gate and handing him the letter …
Mr Wani’s evidence about the delivery of a letter of 13 April 2011 was presumably intended to show that the letter of that date in GL-46 was in fact delivered to IRD’s Country Director in Juba. I have previously explained why the letter could not have been delivered, as claimed. I would reject Mr Wani’s evidence about the letter as false. Mr Wani’s evidence about the 13 April 2011 letter was presumably another instance when Mr Wani gave evidence “as directed”: see below.
In cross-examination, Mr Wani agreed that he was the company administrator in February 2011, which was the date of the Company Profile document, and knew about its preparation. Nonetheless, in his affidavit he said the Company Profile was “fraudulent” and that:
The Company was facing stressful times and there was no one with an educated background within the company and therefore the Company used the Respondent’s educated background to portray itself in a better light to new customers.
In cross-examination, he reiterated that many of the statements in the Company Profile were false. Given this evidence, it is difficult to place much faith in Mr Wani’s honesty, but, as already indicated, there were other aspects of his evidence that indicated that he was not a reliable witness.
I have already mentioned his evidence about the 13 April 2011 letter. In addition, Mr Wani was unable to explain why, as the company administrator in February 2011, his name did not appear in the Company Profile, whilst the name of an employed electrician did. The following exchange is indicative of the nature of Mr Wani’s evidence:
Mr Crennan: Mr Wani, do you know why you are not referred to in this document?
Mr Wani:I was employed by the director to come and work at their company as administrator. … you don’t have to do it. Whatever things they tell you to do, you have to do, because you are being employed. Yes.
Mr Crennan: Yes?
Mr Wani:I’m definitely employed.
This was followed by another exchange:
Her Honour: So, Mr Wani, as I understand your evidence, you say you are an employee and you do whatever you’re instructed to do by those who employ you?
Mr Wani: Yes, exactly. Yes
Mr Crennan: Mr Wani, did someone tell you to say that the references to Mr Ladu in this document are fraudulent?
Mr Wani: That’s true. … fraudulent …
Mr Crennan: I’m asking you a slightly different question. You said that you were an employee and effectively you do what you are told by your employer. Did someone tell you to say that the references to Mr Ladu in this document are false, yes or no?
Mr Wani: Yes.Mr Stirling interrupted almost immediately after this and said in front of the witness:
It’s a most unsatisfactory way of going about a situation where we have a witness with a patchy line, English …
As already noted, Mr Gueye also gave evidence (which I accept) concerning his receipt of a copy of Mr Ladu’s letter of termination; the termination of Mr Ladu; and the receipt of Dr Mulla’s letter of 7 April 2011, which Mr Gueye said he forwarded to Mr Matechak.
Mr Gueye specifically deposed that the 7 April 2011 letter was “the first correspondence [he] had received from Dr Mulla”. Mr Gueye continued:
I have read paragraph 77 of Mr Ladu’s first affidavit. I deny speaking to Dr Richard Mulla of Mulla & Co Advocates, Mr Ladu’s Sudanese legal counsel, on 30 March 2011. I have never spoken with Dr Mulla on the telephone or otherwise. The first I came to know that Mr Ladu was legally represented by Dr Mulla was on 7 April 2011, when I received his letter.
I did not receive nor had I ever seen until reading exhibit ‘GL20’ to the affidavit of Mr Ladu sworn 7 March 2013, a letter purportedly dated 2 April 2011 from Dr Mulla. 2 April 2011 is a Saturday. Saturdays and Sundays are non-business (weekend) days in South Sudan
In cross-examination, Mr Gueye reiterated that Dr Mulla had not spoken with him by telephone, as Dr Mulla claimed, saying: “I never, ever, ever, ever talked to Dr Mulla”. He also repeated that he had not mentioned the prospect of termination of employment to Mr Ladu at any time before IRD’s termination letter (dated 1 April 2011) was given to Mr Ladu on 6 April 2011. As already indicated, I accept Mr Gueye’s evidence as to these matters.
As already noted (at [17] above), Mr Gueye also gave evidence (which I accept) about the meeting he and Mr Ladu attended at the SSRRC’s offices on 12 April 2011, at which he informed Mr Ladu that any claim he made against IRD arising from the termination of his employment would need to be arbitrated pursuant to the Employment Agreement.
Also as already noted (at [67] above), Mr Gueye also gave evidence (which I accept) that, prior to this proceeding, he had never seen the letter purportedly dated 13 April 2011 from Mr Morris Luate (also Luwate) of the Ladu Company, which was included in GL-46 to Mr Ladu’s 3 May 2013 affidavit. I have found that this letter was a recent fabrication.
Mr Gueye impressed me as an honest and reliable witness, who drew a clear distinction between matters he could clearly recollect and matters he could not recall. His evidence was consistent with that given by Mr Calder and Mr Matechak, the verified documentary record and contemporaneously documented events.
As previously noted, Mr Gueye denied parts of Mr Ladu’s account touching his termination and Dr Mulla’s communications with him. I have already stated that I prefer Mr Gueye’s evidence to that of Mr Ladu; and if (as I have found) Mr Ladu was advised by Mr Ngoze (in front of Mr Calder) that that his employment was terminated on 6 April 2011, Dr Mulla could not have spoken with Mr Gueye about this event on 30 March 2011, as Mr Ladu claimed. For much the same reason, I accept Mr Gueye’s statement that he did not receive the letter purportedly dated 2 April 2011 (GL-20 to Mr Ladu’s affidavit of 7 March 2013); and I have found that this letter was a recent fabrication.
Mr Sogora
As already noted, Mr Sogora was an advocate in Juba, South Sudan and the principal of Sogora & Co. In his 25 November 2013 affidavit (filed, with leave, on 29 November 2013) Mr Sogora deposed that he attended the offices of the South Sudan Register of Companies, where he obtained the documents concerning the Ladu Company, which were earlier discussed in detail: see [75] and following.
Mr Sogora also gave evidence concerning Mr Lado’s employment at Sogora & Co, including that Mr Lado worked under Mr Sogora’s direct supervision during the Juba Court proceeding instituted by Mr Ladu against IRD. In his affidavit, Mr Sogora deposed, however, that Mr Lado had left Sogora & Co in August 2012 and that he did not know Mr Lado’s whereabouts or contact details. In oral evidence in chief, Mr Sogora said that he had not been in contact with Mr Lado since Mr Lado left the firm, although he had tried unsuccessfully to telephone him. When asked was there any other method within his knowledge by which he could have contacted Mr Lado, Mr Sogora responded:
No. We used to contact him on the phone number, so there’s no other method. Yes. I could have seen him physically but I haven’t approached him since he left the office. I’ve never got in contact with him again.
Mr Sogora added, “I’ve been asking around but no one gives you the information”. Mr Crennan then asked:
Did I understand you to say, Mr Sogora, that you had been asking around about him and his whereabouts?
Mr Sogora responded:
When needs arise – because I was in need of him. There were some things that he used to handle in the office so I wanted to get him involved. But then I couldn’t get him. So I asked one [sic] of the people but they said “I’ve not seen him since he left”.
In his affidavit, Mr Sogora deposed that, on the basis of Mr Lado’s statements to him, he believed that Mr Lado had delivered a number of documents to Dr Mulla at the Court in Juba before the Judge on 14 June 2011. These documents included IRD’s letters to Dr Mulla dated 11 April 2011, 11 May 2011, 9 June 2011, as well as a copy of Mr Ladu’s employment contract, IRD’s code of conduct and Mr Ladu’s Australian passport. Mr Sogora further deposed that Mr Lado had informed him that he had delivered the letters to Dr Mulla’s office and that Dr Mulla had received them. Mr Sogora gave more detailed oral evidence in chief (which I accept) to the effect that Mr Lado delivered a series of letters to Dr Mulla, including letters dated 11 April 2011, 11 May 2011 and 9 June 2011. When asked by Mr Crennan about the basis for his knowledge, Mr Sogora said that, on or around the dates of the letters, he drove in a car with Mr Lado to Dr Mulla’s office. Mr Sogora stated:
We came together and Lado went with the letter and delivered. I waited for him in the car [outside] the office of the – Dr Mulla.
Mr Sogora’s evidence was that this was the way each of these three letters was delivered to Dr Mulla’s office. Mr Sogora said that, on each occasion, Mr Lado came back to the car without the letter, saying he had delivered the letter to Dr Mulla.
As indicated, I accept Mr Sogora’s evidence to the effect that he accompanied Mr Lado in the car driven to Dr Mulla’s office so that Mr Lado could deliver the letters. His evidence as to the means by which the letters were delivered was broadly consistent with the evidence before the Court as to the delivery of documents in South Sudan. Although this evidence came late in the hearing, I accept it because it seemed to me that Mr Sogora was an essentially honest witness and that the failure to present this evidence earlier was most likely due to misunderstandings arising from differences between the Australian legal system and the legal system with which Mr Sogora was familiar.
Counsel for Mr Ladu submitted that Mr Sogora’s evidence to the effect that Mr Lado gave Dr Mulla the letters on three separate occasions between April and June 2011 was inadmissible as hearsay. Even if Mr Sogora’s statements about what Mr Lado said to him are inadmissible as to the facts that Mr Lado asserted in those statements, nonetheless I would infer from Mr Sogora’s evidence as to what he did, saw and heard that Mr Lado hand delivered these three letters to Dr Mulla or to Dr Mulla’s office where, even on Dr Mulla’s evidence, they would have come to Dr Mulla’s attention.
Neither IRD nor Mr Ladu called Mr Lado to give evidence. I accept Mr Sogora’s evidence that he took the steps as described in his evidence to contact Mr Lado. Mr Crennan, counsel for IRD, argued that Mr Sogora’s statements about what Mr Lado said to him, whether about the delivery of documents to Dr Mulla in the Juba Court on 14 June 2011 or about the delivery of the letters to Dr Mulla on or about 11 April 2011, 11 May 2011 and 9 June 2011, should be admissible as an exception to the hearsay rule (as set out in s 59) on the basis that the maker was not available within the meaning of s 63 of the Evidence Act 1995 (Cth) (Evidence Act). Mr Stirling submitted that the relevant s 63 matters were not established and that Mr Sogora’s statements were not admissible on this basis, as IRD contended.
Section 63 of the Evidence Act provides that the hearsay rule does not apply in civil proceedings to evidence of a previous representation by an unavailable person if it is given by a person who saw, heard or otherwise perceived the representation being made: s 63(2)(a). It was not submitted that s 67(1) was not satisfied. A person is “unavailable”, as defined in the Evidence Act Dictionary, Pt 2, cl 4(1), where all reasonable steps have been taken by the party seeking to prove unavailability to find the person or secure his or her attendance. At the hearing on 26 November 2013, the Court ruled that Mr Matechak’s evidence as to the steps he took to locate Mr Lado did not satisfy the statutory criterion. In substance, Mr Sogora’s evidence was that he tried unsuccessfully to telephone Mr Lado on the telephone number he had for him and he “asked around” in efforts to locate him, but could not locate him. Even in the circumstances existing in South Sudan at the relevant time, as shown in the evidence, this does not satisfy the statutory criterion; and the truth of Mr Lado’s statements are not admissible on the basis for which IRD contended.
Notwithstanding this, as stated in [156] above, I am satisfied that Dr Mulla received copies of IRD’s letters dated 11 April 2011, 11 May 2011 and 9 June 2011 on or around those dates.
Citing Jones v Dunkel (1959) 101 CLR 298, Mr Crennan further submitted that, in so far as the parties invited the Court to draw competing inferences in relation to Mr Lado, IRD’s inferences should be preferred on the basis that the respondent in fact knew of Mr Lado’s whereabouts and failed to call him. I interpolate at this point that, on the final day of the hearing (27 November 2013), Dr Mulla gave evidence that he had seen Mr Lado “last week” and that he knew Mr Lado’s current firm, Nile Basin Advocates, to be about “10 metres away” from where his own firm was currently located, at Mahata Yui, in Malakia Street. I would not, however, draw any relevant Jones v Dunkel inference against either party.
I accept that Mr Matechak and Mr Sorgora took the steps they described to locate Mr Lado. It does not follow from the fact that these steps were insufficient to permit reliance on s 63(2)(a) that I reject their evidence that they did not know Mr Lado’s whereabouts. I accept their evidence that they did not.
Further, for different reasons, it does not seem to me that a Jones v Dunkel inference should be drawn against Mr Ladu. This is not a case for the Jones v Dunkel ‘rule’: Mr Lado, who had been IRD’s lawyer, was not a person that “would be expected to be called” by Mr Ladu: compare Payne v Parker (1976) 1 NSWLR 191 at 201-2 (Glass JA). Further, I have not found Dr Mulla to be an honest and reliable witness and do not accept his uncorroborated evidence as to Mr Lado’s whereabouts, given as it was at the very end of the hearing and without any prior intimation. There was therefore no credible evidence that Mr Ladu was in fact in a position to have called Mr Lado.
Mr Sawer
Mr Sawer was a partner at the firm of solicitors representing IRD in this proceeding. It is unnecessary to outline his evidence here. His evidence did not assist either party on the issue of notification.
Did Mr Ladu establish that he was not given proper notice of the appointment of the arbitrator and/or the arbitration proceedings?
As already indicated:
1.Mr Ladu failed to establish that he was not involved with the Ladu Company at the time when IRD sent emails to the email address, [email protected], and that he did not receive, or was not notified of, those emails.
1.1Mr Ladu was described as Chairman & Managing Director and the “Prime” Contact Person in the Ladu Company’s Company Profile dated February 2011. This was consistent with Mr Sogora’s documents obtained from the South Sudan Register of Companies on 4 June 2013. The Company Profile specifically identified [email protected] as the Ladu Company’s email address.
1.2I have rejected Mr Ladu’s testimony that he ceased to be involved with the Ladu Company in November 2007 and did not receive and was not notified of the receipt of the emails sent to the Ladu Company’s email address concerning the arbitration.
1.3I have rejected Mr Wani’s testimony, including that Mr Ladu ceased to be involved with the Ladu Company in November 2007 and that, as the Ladu Company’s administrator, he had not received the emails sent to the Ladu Company’s email address concerning the arbitration.
2.Mr Ladu failed to establish that he did not receive, or was not notified of:
(a)the documents created for the proceedings in the Juba County Court and given to his legal representative, Dr Mulla, in those proceedings.
(b)the emails sent by IRD and later the arbitrator to Dr Mulla’s email address [email protected] concerning the arbitration.
(c)the letters delivered to Dr Mulla at Dr Mulla’s office.
2.1I have rejected Dr Mulla’s testimony that he did not receive the emails that IRD and the arbitrator sent to his email address [email protected] and thus did not notify Mr Ladu accordingly.
2.2I have rejected Dr Mulla’s testimony that he did not receive IRD’s letters dated 11 April 2011, 11 May 2011 and 9 June 2011, which Mr Lado delivered to his office on or about 11 April 2011, 11 May 2011 and 9 June 2011.
Also, as indicated, the evidence accepted by the court showed that:
1.IRD emailed letters dated 11 April 2011, 11 May 2011, 9 June 2011 and 14 June 2011 to Dr Mulla at [email protected]. The last three letters were headed “Demand for Arbitration” and gave notice that IRD intended to proceed under the arbitration clause of Mr Ladu’s Employment Agreement. The letter of 14 June 2011 specifically stated: “At this point, IRD is hereby initiating arbitration in accordance with ¶¶ 13 and 14 of Mr Ladu’s employment contract previously provided.”
2.IRD copy emailed the letter dated 14 June 2011 to Mr Ladu at [email protected].
3.IRD emailed to Dr Mulla at [email protected] and copy emailed Mr Ladu at [email protected] a notice of commencement of arbitration dated 24 June 2011, which named Paul J Waters, of Akerman Senterfitt, as the arbitrator.
4.As the initiating party to the court proceeding in Juba, Mr Ladu and his lawyer, Dr Mulla, had notice that IRD invoked cl 14 of the Employment Agreement, amongst other things, via IRD’s Defence of 14 June 2011.
5.IRD, via its lawyer Mr Lado, delivered copies of the letters dated 11 April 2011, 11 May 2011 and 9 June 2011 to Dr Mulla’s office, on or around those dates, where he would have received them.
6.Around 8 July 2011, the arbitrator emailed a letter to IRD and Dr Mulla at [email protected] proposing a date, time and venue for the arbitration.
7.On 14 July 2011, IRD responded by email to the arbitrator, amongst other things, referring to the hearing date for the arbitration and a pre-hearing telephone conference. This email was copied to Dr Mulla at [email protected] and Mr Ladu at [email protected].
8.Further emails as to the conduct of the arbitration were copied to Dr Mulla at [email protected] on 19 and 20 July 2011.
As stated earlier, Dr Mulla, as Mr Ladu’s legal representative, initiated correspondence with IRD by his letter of 7 April 2011. IRD’s letter of 11 April 2011 was sent in response to him. The court proceedings in Juba, in which Dr Mulla appeared for Mr Ladu, did not conclude until 1 July that year. In view of the evidence, it cannot be said that IRD acted other than reasonably in directing communications to Dr Mulla. Dr Mulla did not advise IRD that he was no longer retained by, or in communication, with Mr Ladu. As noted, there was no indication that one, let alone, all of IRD’s communications had not reached Dr Mulla; and, in any event, Mr Lado hand-delivered at least three of IRD’s letters (letters of 11 April 2011, 11 May 2011 and 9 June 2011) to his office. I have already referred to the evidence that IRD had of Mr Ladu’s involvement in the Ladu Company, including that he was nominated as the Prime Contact Person in the Ladu Company’s Company Profile, which led IRD to believe that communications to [email protected] would come to his attention. Again, in view of the evidence, it cannot be said that IRD acted other than reasonably in directing their communications to this email address.
Absence of ‘proper notice’?
Bearing in mind the way this case has been argued, it is unnecessary to delve deeply into the question, “what is proper notice?” Mr Ladu did not contend at trial that, even if I rejected his evidence and accepted IRD’s account of what it had done to give him notice of the appointment of an arbitrator and of the arbitration proceedings, he might nonetheless satisfy the court that there was no “proper notice”, within the meaning of s 8(5) of the IAA, or that, save for what appears below at [186], he might otherwise satisfy s 8(7)(b).
The decision in this case cannot, however, be made without regard to the relevant legal context. Pursuant to s 39 of the IAA, in determining IRD’s present application and in interpreting the IAA, the Court is obliged to have regard to the objects of the IAA (see s 2D and [48] above), including, in this particular case, that effect be given to Australia’s obligations under the New York Convention; the fact that arbitration is an efficient, impartial, enforceable and timely method by which to resolve commercial disputes; and the fact that awards are intended to provide certainty and finality. The expression “proper notice” in s 8(5)(c) of the IAA must be interpreted having regard to these matters and, to the extent relevant and not inconsistent with s 39, the principles of statutory interpretation applicable to Australian statutes. It is, moreover, clear enough that, as Foster J said in Traxys Europe SA v Balaji Coke Industry Pty Ltd (No 2) (2012) 201 FCR 535 (‘Traxys’) at 551 [63], it would be contrary to the statutory direction in s 39, “for the Court to adopt an overly technical approach to enforcement applications unless such an approach was expressly required by the IAA”.
The limited grounds stated in ss 8(5) and (7) of the IAA for refusing to enforce a foreign award give effect in Australian law to the grounds set out in Article V of the New York Convention. Where Australian statutory provisions implement an international agreement, Australian courts will seek a construction of those provisions that conforms to the international agreement, if such a construction is available: see, for example, Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 (2006) 231 CLR 1 at 15 [34]. Absent any contrary indication (and there is none here), where an Australian law implements an international agreement, the courts assume that the Parliament intended that “the transposed text should bear the same meaning in the domestic statute as it bears in the treaty”: Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation Berhad (1998) 196 CLR 161 at 186 [70]; also Povey v Qantas Airways Ltd (2005) 223 CLR 189 (‘Povey’) at 202 [25] and 230 [128]. Consistently with this, as Gleeson CJ, Gummow, Hayne and Heydon JJ noted in Povey at 202 [25], it is important that international treaties should receive a uniform construction in the contracting states; and, as s 39 of the IAA emphasises, this approach is particularly important in the context of the enforcement of foreign arbitral awards. See further TCL Air Conditioner (Zhongshan)Co Ltd v Castel Electronics Pty Ltd [2014] FCAFC 83 at [75].
If possible, then, the expression “proper notice” in s 8(5)(c) of the IAA should be construed in conformity with the use of the same expression in Article V(1)(b) of the New York Convention and in other contracting states. This said, the parties made no submissions specifically directed to the meaning of “proper notice” in Article V(1)(b) of the New York Convention, including as understood in other jurisdictions. I return to the meaning of “proper notice” in Article V(1)(b) hereafter.
Counsel for IRD contended that:
“Notice” for the purpose of section 8(5)(c) means either notice in fact or deemed notice. … [T]he Court in determining whether there was notice in fact, must determine whether the respondent received notice of the commencement of arbitration proceedings or appointment of the arbitrator. …[T]he applicant submits that the Court in determining whether there was deemed notice, must first determine whether documents concerning the arbitration were required to be served on the respondent in accordance with the Employment Agreement … and/or the law governing the arbitration agreement, namely the rules of the American Arbitration Association, and second whether the notices were so served.
(Citations omitted)
Where actual notice is given of the appointment of an arbitrator and arbitration proceedings, then no question as to “proper notice” arises. The proper notice requirement must be satisfied where actual notice is given. Unsurprisingly, this understanding is, as counsel for IRD noted, consistent with the approach adopted in Australian courts: see, for example, Uganda Telecom mentioned earlier.
In the circumstances set out at [164]-[166] above, Mr Ladu has failed to satisfy me that, on the balance of probabilities, he was not given actual notice of the appointment of the arbitrator and the arbitration proceedings. As already indicated, the evidence that Mr Ladu adduced in support of his case was to be evaluated, having regard to the evidence adduced by IRD. IRD gave notice of the arbitration proceedings to Mr Ladu by its Defence of 14 June 2011, filed in the Juba court. IRD also gave notice of the arbitration proceedings to Mr Ladu by its letters dated 11 May 2011, 9 June 2011 and 14 June 2011 (whether considered collectively or individually); and notice of the appointment of the arbitrator by its letter dated 24 June 2011, alternatively, by its email of 14 July 2011. As well, I note that further details of the arbitration were provided to Dr Mulla at [email protected] by Mr Marechak on 19 July 2011 and by the arbitrator on 20 July 2011.
Mr Ladu has not shown that Dr Mulla (as Mr Ladu’s legal representative) did not receive these notices either personally (in the case of the letters of 11 May and 9 June, 2011) or via email and inform Mr Ladu accordingly. Contrary to Mr Stirling’s submission, IRD was not obliged to show that, in the absence of Mr Ladu’s consent to Dr Mulla accepting service, Dr Mulla in fact passed the relevant communications to Mr Ladu. As indicated already, this approach is an overly technical one, with its basis in Australian legal practice and procedure. This procedure has not been shown to be relevant in this case: see below. Further, such an approach is contrary to the statutory direction in s 39 of the IAA. I return to this hereafter. Additionally, Mr Ladu has not shown that, as the Ladu Company’s “Prime” “Contact Person”, he did not receive the letters of 14 June 2011, 24 June 2011 and 14 July 2011 via the email address of the Ladu Company. In this regard, his only argument was that he had ceased to be involved in November 2007; and I have rejected his and Mr Wani’s evidence in support of this proposition.
Counsel for Mr Ladu argued that the arbitrator could not have been appointed before 8 July 2011. I do not consider this argument has merit. For one thing, the letter of 24 June 2011 was evidence to the contrary; and in any event, subsequent emails, including that of 14 July 2011, gave the requisite notice. Further, notwithstanding Mr Stirling’s submissions, I would not regard the absence of a reference to attachments in IRD’s email of 14 July 2011 as sufficient to contradict Mr Matechak’s sworn evidence that the Memorandum in Support of Judgment and the letter of 14 July 2011 were in fact emailed to the arbitrator, [email protected] and [email protected]. Further, it was not put to Mr Matechak in cross-examination that he was in error on this point.
Whilst it is unnecessary to make the further finding that Dr Mulla and Mr Ladu did in fact receive the communications emailed to them at [email protected] and [email protected] and, in Dr Mulla’s case, hand-delivered on or about 11 May 2011 and 9 June 2011 (and, to the extent relevant, on or about 11 April 2011), I find it more probable than not that they did receive them in the ways mentioned; and that via these communications Mr Ladu had actual notice of the arbitration proceeding and the appointment of an arbitrator.
Further, whilst it is perhaps unnecessary to deal with the issue of deemed notice in light of the above conclusions, Mr Ladu has not satisfied me that the steps taken by IRD to notify him (as outlined above) could not amount to deemed notice, if indeed the notion of deemed notice is applicable in this case.
For present purposes, I accept that, as Mr Crennan submitted, notice of the appointment of the arbitrator or of the arbitration proceeding was not notice “submitted under” the Employment Agreement; and that therefore cl 15 of that agreement was inapplicable. This is because notice of the appointment of the arbitrator or of the arbitration proceedings (or, to the extent relevant, of the arbitration hearing) was in the nature of a formal communication concerning the arbitration, as opposed to a communication under the Employment Agreement. This is the same distinction made by Foster J in Uganda Telecom at 435 [114]. It may be that a communication from IRD to Mr Ladu that it was exercising its discretion to arbitrate would be, relevantly, a notice “submitted under” the Employment Agreement. This case is not, however, concerned with notice of this kind; and in any event such notice was clearly conveyed in person to Mr Ladu’s legal representative in the Juba court.
Since the notice of the appointment of the arbitrator and of the arbitration proceedings was in the nature of a formal communication concerning the arbitration, I accept that, pursuant to cl 14 of the Employment Agreement (set out at [19] above), particularly in the absence of actual notice (which was not this case), IRD would have been obliged to give notice of the arbitration proceedings and of the appointment of the arbitrator (and, to the extent relevant, of the arbitration hearing) in accordance with the applicable rules (if any) of the American Arbitration Association. It may be recalled that cl 14 stated that IRD might bring the dispute to arbitration “in accordance with the rules of the American Arbitration Association”. Since Mr Ladu bore the civil onus of proof (as he accepted) it was for him to show that IRD had not given notice in accordance with these rules. The rules of the American Arbitration Association were not, however, in evidence before the Court; and Mr Ladu did not seek to elucidate what they relevantly required.
For the reasons set out above, Mr Ladu’s submissions therefore failed to satisfy me that he was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings (or, to the extent relevant, of the arbitration hearing, as to which, see further [186]).
As already stated, in determining the present application and in attributing meaning to the expression “proper notice” in s 8(5)(c) of the IAA, the Court is obliged to have regard to the objects of the IAA, including that effect be given to Australia’s obligations under the New York Convention; that arbitration is an efficient, impartial, enforceable and timely method by which to resolve commercial disputes; and that awards are intended to provide certainty and finality. The approach to “proper notice” that counsel for Mr Ladu invited me to take pays insufficient regard to these considerations.
Counsel for Mr Ladu relied on various factors in support of his case, including the availability of the email address ([email protected]) and the fact that neither Mr Matechak nor the arbitrator telephoned Dr Mulla. The fact that IRD had another email address ([email protected]) available to it to communicate with Mr Ladu and that no telephone call was made to Dr Mulla does not detract from the fact that Mr Ladu has failed to satisfy me that he did not receive proper notice of the appointment of the arbitrator and of the arbitration proceedings, as he alleged.
Moreover, although the parties made no submissions directed specifically to what was meant by “proper notice” in Article V(1)(b) of the New York Convention (to which s 8(5)(c) of the IAA gives effect), reference to leading texts, including Emmanuel Gaillard and Domenico Di Pietro (editors); Nanou Leleu-Knobil (reference editor), Enforcement of Arbitration Agreements and International Arbitral Awards. The New York Convention in Practice (Cameron May, 2008) at 686-687, 688-689, 702-704, indicates that the defence in Article V(1)(b) of the New York Convention is to be construed narrowly and a pragmatic approach is to be taken to “proper notice” consistent with the fact that, as the IAA itself affirms in s 39(2), arbitration is intended as an efficient, impartial, enforceable and timely method by which to resolve disputes and that awards are intended to provide certainty and finality.
Mr Ladu’s case under s 8(7)(b) of the IAA
As noted earlier in these reasons, Mr Ladu’s case was run on the basis that Mr Ladu resisted the application for enforcement because he had not been given notice of the arbitration. At the hearing Mr Ladu focussed on the proposition that IRD failed to give proper notice of the appointment of the arbitrator or of the arbitration proceedings – the ground set out in s 8(5)(c) of the IAA.
Although s 8(7)(b) was mentioned from time to time, it was not at the forefront of Mr Stirling’s argument. In relation to the public policy ground in s 8(7)(b), Foster J said in Traxys at 555 [90]:
Clearly the pro-enforcement bias of the Convention, as reflected in the IAA, requires that the public policy ground for refusing enforcement not be allowed to be used as an escape route for a defaulting debtor. That ground should not be made available too readily, lest it undermine the purpose of encouraging and facilitating the enforcement of foreign arbitral awards as embodied in the Convention and the IAA.
This approach was approved in TCL Air Conditioner (Zhongshan)Co Ltd v Castel Electronics Pty Ltd [2014] FCAFC 83 at [80].
In so far as Mr Ladu relied on s 8(7)(b) of the IAA, he had to establish either that the making of the Award was induced by fraud or corruption (s 8(7A)(a)); or that there had been a breach of the rules of natural justice in connection with the making of the Award (s 8(7A)(b)). Mr Ladu did not allege that there was fraud or corruption in the making of the Award; and there was no evidence of this in any event. In substance, Mr Ladu’s case under s 8(7)(b) was that there had been a breach of the rules of natural justice. In making this argument, he relied on much the same lack of notice argument as he made with respect to s 8(5). As already stated, I have rejected that argument. In so far as Mr Ladu made a separate allegation that he did not receive notice of the hearing, I would also reject this proposition because, for the reasons previously stated, Mr Ladu received actual notice of the hearing, including the date, by IRD’s emailed communications of 14 July 2011 to [email protected] and by the arbitrator’s emailed communication around 8 July 2011 to Dr Mulla at [email protected]. The circumstances in which the hearing was to occur were confirmed by further emails on 19 and 20 July sent to Dr Mulla at [email protected] by the arbitrator and IRD respectively. In so far as Mr Ladu complained of a lack of notice of the pre-conference hearing on 18 July 2011, I would dismiss that complaint on the basis that notice of it was given by the arbitrator in his email around 8 July 2011 to Dr Mulla at [email protected] and by IRD in its emailed communications of 14 July 2011. Accordingly, having regard to the foregoing discussion, I do not accept that, as Mr Ladu’s closing submissions posited, Mr Ladu “did not have notice of the appointment of the arbitrator, or of the arbitration hearing, and that for one of these reasons he did not participate in it”.
As already noted at [57] above, Mr Crennan did not seek to argue that, if Mr Ladu satisfied the court that he did not receive proper notice of the arbitration proceedings or the appointment of the arbitrator (or, in so far as relevant, the arbitration hearing), nonetheless Mr Ladu had no arguable defence and, as a matter of discretion, the court should order that the Award be enforced. Having regard to this and to the fact that Mr Ladu has not satisfied the court that he did not receive proper notice, it is unnecessary to discuss, in this context, whether or not Mr Ladu had any arguable defence.
In closing submissions, Mr Ladu also submitted that since he had “legitimate and arguable defences” to the claims on which IRD succeeded at arbitration and he did not participate in the arbitration hearing, then “it would be contrary to public policy to allow the award to be enforced as a judgment in this Court”. For the reasons already stated, Mr Ladu failed to satisfy the court as required by s 8(5)(c) or s 8(7) of the IAA. In particular, he failed to establish that there was a breach of natural justice (within the meaning of s 8(7A) of the IAA) in connection with the making of the Award. In the circumstances of this case, any supposed defence to the Award is therefore immaterial to IRD’s present application in this Court.
Issue estoppel
IRD advanced an alternative argument that Mr Ladu is estopped “from bringing any argument concerning lack of notice in this proceeding”. Having regard to the conclusions I have reached with respect to the central issue, I shall not discuss this in detail. The question whether issue estoppel operates where an Australian court is considering whether to refuse to enforce a foreign award on the grounds identified in ss 8(5)(c) and 8(7) of the IAA is unresolved: see Gujarat NRE Coke Ltd v Coeclerici Asia (Pte) Ltd (2013) 304 ALR 468 (‘Gujarat’) 486 [64]-[65]. It is clear, however, that, if issue estoppel is to operate in this context, it “only arises in relation to those matters which a prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion”: see Gujarat at 485 [60].
IRD submitted that the questions regarding Mr Ladu’s lack of notice of the appointment of the arbitrator and the arbitration proceedings have been dealt with and rejected by the courts of the United States. The facts surrounding Mr Ladu’s attempts to resist IRD’s application to confirm the Award in the US District Court and Court of Appeals for the Fourth Circuit are set out above at [35]-[40]. As outlined, the only relevant finding made or upheld in those courts was that Mr Ladu’s challenge had been made out of time (or, as the US Magistrate Judge said, “a review of the … objections is not required because it is untimely”. No findings were therefore made on Mr Ladu’s objections to the Award, including whether he received notice of the appointment of the arbitrator or the arbitration proceedings. In this circumstance, it cannot be said that they are matters that a prior judgment or order has “necessarily established as the legal foundation or justification of its conclusion”, to adopt the language of the Full Court in Gujarat. Accordingly, even if it were accepted that issue estoppel might apply in a proceeding of this kind, IRD could not apparently rely on issue estoppel in this case.
DISPOSITION
For the reasons stated, I would grant the relief that the applicant seeks enforcing the award under s 8(3) of the IAA and order that the respondent pay the applicant’s costs of the application.
I certify that the preceding one hundred and ninety-one (191) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. Associate:
Dated: 20 August 2014
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