Koolan Iron Ore Pty Ltd v Rizhao Steel Holding Group Co Ltd
[2010] WASC 335
•11 JANUARY 2011
KOOLAN IRON ORE PTY LTD -v- RIZHAO STEEL HOLDING GROUP CO LTD [2010] WASC 335
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2010] WASC 335 | |
| 11/01/2011 | |||
| Case No: | CIV:2325/2010 | 22 OCTOBER 2010 | |
| Coram: | KENNETH MARTIN J | 22/10/10 | |
| 16 | Judgment Part: | 1 of 1 | |
| Result: | Motion granted in part | ||
| B | |||
| PDF Version |
| Parties: | KOOLAN IRON ORE PTY LTD RIZHAO STEEL HOLDING GROUP CO LTD MOUNT GIBSON MINING LTD |
Catchwords: | Ex parte application for leave to serve out of jurisdiction Rules of the Supreme Court 1971 (WA) O 10 Earlier orders made allowing substituted service of notice of originating summons Substituted service to facsimile number in People's Republic of China Issue as to validity of service in People's Republic of China Notice not served under Hague Service Convention through Central Authority Application to personally serve defendant in United States of America Where no requirement to serve through a Central Authority |
Legislation: | Commercial Arbitration Act 1985 (WA), s 33 Rules of the Supreme Court 1971 (WA), O 10 |
Case References: | Channar Mining Pty Ltd v CMIEC (Channar) Pty Ltd [2003] WASC 253 Silverstone Holdings Pty Ltd (as trustee for the Devereux Property Trust) v American Home Assurance Company (1997) 18 WAR 516 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
RIZHAO STEEL HOLDING GROUP CO LTD
Defendant
- Plaintiff
AND
RIZHAO STEEL HOLDING GROUP CO LTD
Defendant
Catchwords:
Ex parte application for leave to serve out of jurisdiction - Rules of the Supreme Court 1971 (WA) O 10 - Earlier orders made allowing substituted service of
(Page 2)
notice of originating summons - Substituted service to facsimile number in People's Republic of China - Issue as to validity of service in People's Republic of China - Notice not served under Hague Service Convention through Central Authority - Application to personally serve defendant in United States of America - Where no requirement to serve through a Central Authority
Legislation:
Commercial Arbitration Act 1985 (WA), s 33
Rules of the Supreme Court 1971 (WA), O 10
Result:
Motion granted in part
Category: B
Representation:
CIV 2325 of 2010
Counsel:
Plaintiff : Mr S Penglis
Defendant : No appearance
Solicitors:
Plaintiff : Freehills
Defendant : Holman Fenwick Willan
CIV 2326 of 2010
Counsel:
Plaintiff : Mr S Penglis
Defendant : No appearance
Solicitors:
Plaintiff : Freehills
Defendant : Holman Fenwick Willan
Case(s) referred to in judgment(s):
Channar Mining Pty Ltd v CMIEC (Channar) Pty Ltd [2003] WASC 253
Silverstone Holdings Pty Ltd (as trustee for the Devereux Property Trust) v American Home Assurance Company (1997) 18 WAR 516
(Page 4)
- KENNETH MARTIN J: (These reasons were delivered orally and have been edited from transcript. For convenience, this decision, as part of a series of extempore reasons for decision, will be referred to as 'Rizhao 1'.)
1 Under earlier orders in these proceedings I granted leave to the plaintiff in each matter on their ex parte motions to serve proceedings out of the jurisdiction under Rules of the Supreme Court 1971 (WA) O 10. More correctly, leave was in respect of service of notice of the originating process (not the process itself).
2 The respective plaintiffs, namely, Koolan Iron Ore Pty Ltd (Koolan Iron) and Mount Gibson Mining Ltd (Mount Gibson), each seek leave under s 33 of the Commercial Arbitration Act 1985 (WA) to enforce, as judgments of the Supreme Court of Western Australia, two arbitral awards made on 16 August 2010 by the Honourable M Gleeson AC QC in the course of arbitral proceedings involving both plaintiffs and the same defendant in each matter, that is, the defendant corporation, Rizhao Steel Holding Group Co Ltd (Rizhao) of the People's Republic of China (the PRC).
3 There are two arbitral awards and two sets of proceedings, but for all intents and purposes the two proceedings mirror each other. It is therefore sufficient for me to refer to only one of the proceedings as the template and that will be the Koolan Iron proceeding.
4 Earlier orders which I made on 30 August 2010 in respect of these two proceedings acceded essentially, to the plaintiffs' application for the grant of leave to serve notice of the originating summons out of the jurisdiction of Western Australia seeking enforcement of the arbitral awards pursuant to s 33 of the Commercial Arbitration Act. The substantive question then was how service of the notice of the originating process was to be effected. Order 10 r 6 provides that service is to be effected essentially in the same fashion that service of a writ is effected in proceedings issued out of this court for service within Western Australia. Order 10 r 6 provides:
Where leave is given under this Order to serve notice of a writ out of the jurisdiction, the notice shall subject to any direction given by the court as to the manner in which such service shall be served or brought to the notice of the defendant, be served in the manner in which writs are served.
5 The manner in which writs are served extends to service prima facie by personal service (dealt with in O 9 r 1) and to substituted service, dealt with by O 72 r 4.
(Page 5)
6 On 30 August 2010, I dealt with the issue of service on the basis that service by facsimile would be appropriate as substituted service upon the defendant in the PRC. My reason for making an order in those terms was that the two particular iron ore supply contracts which were the subject matter of the arbitral proceedings, being contracts entered into in June 2007, both contained an express clause of relevance to this issue. In the Koolan Iron supply contract of 5 June 2007 this is cl 21.7, found at page 41 in that contract.
7 Clause 21.7 provides for two things, in essence. First, the parties submit to the jurisdiction of the Courts of the Supreme Court of Western Australia in respect of their disputes. This submission, by both parties, is not general. It is an 'exclusive' submission to the jurisdiction of the Supreme Court of Western Australia.
8 The second matter to note from cl 21.7 is that the contractual arrangements are stipulated (expressly) to be governed by way of the parties' choice of law as the laws of the State of Western Australia.
9 On that basis, this Court's 'long-arm' jurisdiction over this foreign defendant, not present within the jurisdiction of Western Australia, as a basis for jurisdiction by O 10 r 1(1)(e) is satisfied, in that the rule provides for the Court to have jurisdiction whenever an action is brought:
(e) … to enforce, rescind, dissolve, annul or otherwise affect a contract or to recover damages or obtain other relief in respect of the breach of a contract, being in either case a contract -
(i) made within the jurisdiction; or
(ii) …
(iii) which by its terms or implications is governed by the law of Western Australia.
11 Furthermore, O 10 r 2 provides:
Where it appears to the Court that a contract contains a term to the effect that the Supreme Court shall have jurisdiction to hear and determine any action in respect of the contract, the Court may, subject to Rule 3, grant leave to serve a person outside the Commonwealth of Australia with a writ, or notice of a writ, that begins such an action.
12 This is also met.
(Page 6)
13 Bearing all that in mind, it then became relevant to note that these parties in their June 2007 supply contracts had provided for a mechanism of communication in terms of notifications, as between themselves. This was pursuant to cl 21.2. In the contracts - it being the same in the Koolan Iron contract and the Mount Gibson contract - the parties dealt with each other on the basis that, as regards Rizhao, notice could be sent to that corporation's nominated address, namely 600 Yanhai Road, Rizhao, Shandong, People's Republic of China 276806, attention John Wang, and with a facsimile number specified. That facsimile number was +86 21-6236-0903.
14 It is not suggested that the parties had, under their iron ore supply contracts of 2007, faithfully set down a service regime by reference to O 9 r 3(1)(b) - in terms of there being a contractual provision which satisfied the requirements of:
In the event of an action in respect of the contract being begun, the process by which it is begun may be served on the defendant or on such other person on his behalf as may be specified in the contract, in such manner or at such place (whether within or out of the jurisdiction), as may be so specified.
15 Obviously, the iron ore supply contracts did not go so far as to lay down an address for service mechanism, in respect of a civil action, that may be commenced. The communication and notice provisions found in the iron ore contracts under cl 21.2 and in the schedule are more general. They are general notification provisions as between these parties for many purposes - and are not specifically tied to them having exclusive an applicability to service of originating process in litigation.
16 Nevertheless, bearing in mind the fact that these parties had obviously been in close communication with each other through their respective solicitors, for the purposes of conducting an extensive arbitration run before the Arbitrator in Perth in 2010 over many months, it seemed to me to be efficacious here, that this general contractual notice communication mechanism would provide a viable basis for effecting service on Rizhao here - through a facsimile medium that would be likely to bring the existence of the commencement of proceedings by Mount Gibson and Koolan Iron out of the Supreme Court of Western Australia, (seeking relief pursuant to s 33 of the Commercial Arbitration Act by way of enforcement of the two arbitral awards) to Rizhao's attention. In other words, a facsimile communication sent under cl 21.2 would provide a viable medium of bringing the commencement of this litigation out of the Supreme Court of Western Australia to this defendant's attention.
(Page 7)
17 The facsimile medium of service also seemed to me to be appropriate here, bearing in mind the exclusive submission to the jurisdiction of the Courts of Western Australia and the choice of West Australian law. Accordingly, there was no issue as to whether this Court had jurisdiction to exercise over Rizhao, since the contract explicitly provides it did. Rather, the issue I had in mind was the more pragmatic and mechanical one, of how the attention of this defendant might viably be drawn to the existence of originating process against it issued out of the Supreme Court of Western Australia - in which what was mooted was of enforcement of the arbitral awards, under s 33.
18 In due course, pursuant to the leave for service out of the jurisdiction by substituted service I granted, on 6 or 7 September 2010, there was a transmission to the PRC by way of service of notice, sent to the facsimile number, I have identified. That occurred for both the Koolan Iron proceedings and the Mount Gibson proceedings.
19 Subsequently solicitors acting on behalf of Rizhao in each matter filed memorandums of conditional appearance. The documents objected, essentially, to the service effected and sought - I am summarising - to have my order of 30 August 2010, which had granted leave to serve through this medium, set aside.
20 In the Koolan Iron matter, the memorandum of conditional appearance for Rizhao was filed pursuant to O 12 r 2(2) by the defendant's representative, Mr Alexander Baykitch of Holman Fenwick Willan, of Level 29, 201 Elizabeth Street, Sydney, New South Wales. The document carries a date 8 September 2010, although it appears only to have been filed at court on 9 September 2010.
21 In both matters on 20 September, applications (by summons) were then filed on behalf of Rizhao by its solicitors, seeking that service of the notice of the originating summons be set aside; alternatively that my orders made ex parte on 30 August 2010 granting leave to serve notice of the originating summons, be set aside.
22 In due course, similar applications have been filed in what I will refer to as the ARB actions (see ARB 18 and 19 of 2010) - the proceedings commenced by Koolan Iron and Mount Gibson under originating summons out of this court seeking to enforce, pursuant to s 33 of the Commercial Arbitration Act, the two arbitral awards of the Arbitrator.
(Page 8)
23 So there are now on foot applications to set aside either service, or the grant of leave in respect of service, (that is, by substituted service to sent the facsimile number in the PRC, I have identified). Both matters have since been before me for programming directions in the CMC list of this court, to which all these matters have now been admitted.
24 There currently stands pending, for hearing and determination on 3 November 2010, in the two ARB actions - applications by Rizhao to set aside either the service which has been effected by facsimile in the PRC, or the grant of leave. What is apparent is that an issue has now arisen concerning the effect of facsimile service by reference to the internal laws of the PRC. A cardinal principle of international law is that a court will not sanction a mode of service of proceedings, or even of service of notice of proceedings, if that mode of service would violate the domestic laws of the jurisdiction in which service is to be effected; see Rules of the Supreme Court O 10 r 10(2), which embodies that principle.
25 The issue then which has emerged is whether the transmissions of notice of the originating process by facsimile sent to the PRC, in accordance with my orders of 30 August 2010, infringed the laws of the People's Republic of China? As to that issue, the parties have each foreshadowed calling rival expert evidence by Professors of Law from the PRC. One affidavit submitted on behalf of the defendant Rizhao is to the effect that the facsimile service effected infringed domestic law. But there has also been foreshadowed evidence submitted on behalf of the plaintiff by another Professor of Law in the PRC to the opposite effect, namely that there is no infringement of PRC law by the facsimile service of notice of the WA proceedings. This clash of expert views needs to be resolved.
26 The validity of service issue is the subject of strong joinder from each of the parties - about what is the true position as regards a potential infringement of the domestic law of the PRC. As I observed, the international law principle to which I referred about not infringing domestic law is enshrined in O 10 r 10(2). It was the subject of observations by Pullin J (as he then was) in Channar Mining Pty Ltd v CMIEC (Channar) Pty Ltd [2003] WASC 253.
27 What has also emerged, however, since the programming orders I made in respect of the looming hearing of that contested expert issue on 3 November, is that the plaintiffs have now put forward further affidavit materials - indicating that Rizhao Steel Holding Group Co Ltd may also have a corporate presence in the United States of America, in the state of
(Page 9)
- New York. This information is the subject of the plaintiff's further affidavit materials which have been recently filed from a Mr Shane Michael Murphy, which are the subject of his three affidavits, the first of which is affirmed on 18 October 2010, his supplementary affidavit affirmed 21 October 2010, and with a second supplementary affidavit of Mr Murphy of 22 October 2010.
28 Mr Murphy's affidavit deposes to the fact that the amount of the arbitral awards by the Arbitrator currently remains wholly unmet - in the aggregate amount of $US114,415,303, and with interest accruing at 6% per annum from 16 August 2010.
29 Rizhao itself has now also commenced its own proceedings out of the Supreme Court of Western Australia, seeking leave to appeal under s 38 of the Commercial Arbitration Actagainst components of the arbitral damages awards of the Arbitrator against it. The applications by Rizhao for leave to appeal aspects of the awards, are set down for hearing at a special appointment before me on Tuesday, 16 November 2010. It is apparent, however, that even if successful in ultimately challenging the arbitral awards as it foreshadows, that Rizhao will only potentially reverse $US42,980,807 of the total award, at least on the materials before me today. That would leave an unchallenged aggregate balance due by Rizhao to the plaintiffs of $US71,434,496, without interest.
30 The new information which has emerged essentially from Mr Murphy's recent affidavits, concerns the issue of a possible corporate presence in the United States of Rizhao Steel Holding Group Co Ltd. In particular, I refer to Mr Murphy's affidavit of 18 October 2010, pars 33 - 46 of that affidavit, and the appended affidavit therein of an American attorney, Mr Christopher Michael Schierloh of 65 West 36th Street, 9th Floor, New York, New York, in the United States of America, at page 84 of Mr Murphy's affidavit of 18 October 2010.
31 In his affidavit Mr Schierloh refers to searches he has conducted, and inquiries he has made or caused to be made. He also answers various questions posed to him. The first question deals with the issue of Rizhao's legal presence in New York, and Mr Schierloh responds at par 11 at page 87 of the Murphy affidavit:
I am informed by a search of the NYS Department of State, division of corporations web site on 15 October 2010 and verily believe that on 15 October Rizhao was and still is registered as an active foreign business corporation with the state of New York.
(Page 10)
32 At par 12 Mr Sclierloh appends a copy of Rizhao's registration information per the NYS department of state, division of corporations web site. He continues at par 13:
This effectively means that Rizhao has obtained formal written authority to conduct business in New York state from the New York department of state and does have a legal presence in New York. Such registration information shows that Rizhao registered as a foreign corporation on December 30, 2008.
33 Mr Schierloh, at par 14, addresses the issue of a potential withdrawal or ending of Rizhao's legal presence in New York as follows:
Rizhao can surrender its authority to do business in New York. … A foreign corporation that decides it no longer wishes to do business in New York needs to end its obligation to pay future taxes and fees in the state of New York. It does this by surrendering its authority to do business in New York.
34 The procedure involves a number of steps (a) to (d), as outlined.
35 The significance of this is that it seems to be a relatively straightforward step for the legal presence of Rizhao in New York to be terminated. I regard that as a relevant consideration going to the basis of the application brought before me ex parte, this afternoon.
36 Mr Schierloh responds to a third question asked of him in regard to US law pertaining to the service of legal process and of notice of legal process in New York, as follows:
The laws of the state of New York permit the service of United States legal process. Rule 4 of the Federal Rules of Civil Procedure provides that on or after the filing of a complaint a plaintiff may present a summons to the clerk for signature and seal. The clerk may sign, seal and issue it to the plaintiff for service on a defendant. The summons may be served by any person at least 18 years old and not a party to the action.
37 A fourth question posed to Mr Schierloh is addressed at pars 19 and following of his affidavit, found at pages 89 to 90 of Mr Murphy's affidavit - in terms of the legally permissible nature of service in the State of New York. Mr Schierloh says at par 19:
The United States is a party to the convention on the service abroad of judicial and extra-judicial documents in civil or commercial matters -
- and referring to the 1965 Hague Service Convention.
(Page 11)
38 At par 21, Mr Schierloh says:
The United States has not opted out of article 10 and accordingly KIO is allowed to serve its Australian court process or notice of Australian court process upon Rizhao's agent for service in New York pursuant to New York state law.
39 And further at par 23:
It is well settled that a foreign company that is registered with the New York department of state for authority to do business in New York may be served with process in New York.
- Mr Schierloh cites a US case authority at par 24 in support of that proposition.
40 The base question then which is posed for my urgent determination today, is whether, by augmentation to the orders I made on 30 August 2010, I should now grant leave, essentially for a further mode of substituted service upon this defendant - on the basis that it has a corporate presence in the United States of America in the State of New York, at the place identified in Mr Murphy's affidavit by reference to the affidavit of Mr Schierloh.
41 In assessing that issue, admittedly on an ex parte basis and without the benefit of hearing from the defendant who has only at this stage entered, of course, a conditional appearance to these proceedings through solicitors, it seems to me to be first relevant to reflect upon the considerations which drove my grant of leave on 30 August 2010.
42 More particularly, I reflect upon the considerations which led me toward accepting the appropriateness of making, on that day, orders for substituted service by facsimile. That is particularly relevant in a situation where there was an exclusive submission to the jurisdiction of the Supreme Court of Western Australia by this defendant.
43 Underlying my determination of 30 August 2010 was an identification of an efficacious mechanism for drawing the existence of the West Australian proceedings, seeking to enforce pursuant to s 33 of the Commercial Arbitration Act, of the two arbitral awards, to the attention of this defendant. On 30 August 2010, I had thought that an efficacious method of doing so would be by substituted service, and by reference to a facsimile mode of communication - which the parties themselves had earlier identified for Rizhao in their iron ore supply contracts, entered into in June 2007. As events have transpired, however,
(Page 12)
- that mode of service has proved problematic - in the sense that it is now to be argued - and there is a fundamental clash of evidence over this - that the mode of service by facsimile of notice of the proceedings to the PRC, has infringed, or may have infringed the domestic laws of the PRC, in violation of one of the principles of international law and, thereby, governing the way this court ought proceed as regards permitted service or substituted service.
44 It is highly significant then, that what has now emerged in the further affidavit materials of Mr Murphy is an alternative further potential mechanism of viably and lawfully drawing the existence of these proceedings in the West Australian Supreme Court to the attention of this defendant - in the United States of America - where it would appear to have a corporate presence. This proposed further service would be by a lawful service mechanism. There is no suggestion that any law of the United States or, for that matter, any law of Australia being infringed by what is now proposed.
45 I am satisfied, in all the circumstances, that it is appropriate for me to make a further order for substituted service in the USA, addressing the issue of the bringing of the existence of the West Australian proceedings to the attention of this defendant - at the place identified, by reference to the affidavit of Mr Schierloh, in the State of New York. I reach this view on the basis that either the defendant is present in the United States of America as a foreign corporation doing business in a personal sense as a question of fact, or alternatively it is present in the USA, through an agent - which under American law the defendant has identified in the state of New York, as Corporation Service Company, at 80 State Street in Albany, New York, in the United States of America.
46 The greater issue of concern for me today, however, is that the plaintiffs have already proceeded to effect personal delivery of notice of the West Australian originating proceedings in the ARB matters on last Friday, 15 October 2010, at that address in the USA.
47 The plaintiffs now seek, pursuant to order 2 of Notices of Ex Parte Motion directions of 18 October 2010, to validate, retrospectively, last week's effecting of service of the notice of the originating summons - together with two affidavits, identified in par 2 of that Notice of Ex Parte Motion, as effected last Friday in the USA. The relief now sought is phrased on the basis of service being 'validated to the extent necessary, if any, pursuant to Order 2 rule 1(2) and Order 10 rule 6 of the Rules of the Supreme Court'.
(Page 13)
48 There is no doubt, by reference to case authorities that counsel for the plaintiffs has referred to, in argument before me today, that this court may validate irregularities in respect of noncompliance with its Rules in situations, where that is appropriate. The court will act on that basis where what has occurred is not a complete nullity, but rather is an irregularity. A court, acting in the interests of justice, can always exercise power to remedy an injustice, by correcting an irregularity. The decision of the Full Court of this Court, Silverstone Holdings Pty Ltd (as trustee for the Devereux Property Trust) v American Home Assurance Company (1997) 18 WAR 516 clearly establishes that proposition - see particularly observations of Parker J, at page 536.
49 But the real issue here is as to the appropriateness of such an order, in the present circumstances, as an exercise of that power? The first issue that needs to be established is whether what has occurred in the USA last Friday, 15 October, is to be assessed as an irregularity - and so, thereby susceptible to cure under the court's exercise of power by O 2 r 1(2). A difficulty over that issue is, as counsel for the plaintiffs made frank in his submissions before me, is that my orders of 30 August 2010 simply laid down one mechanism to facilitate service of notice of the originating process out of the jurisdiction by substituted service, as envisaged pursuant to O 10 r 6, and by reference in turn to O 72 r 4 of the Rules of the Supreme Court.
50 It will be a matter for future argument, but on the face of it there would seem to be a respectable case to contend, that my orders of 30 August 2010 did not close off any other lawful mechanisms of service out of the jurisdiction of WA available to the plaintiffs; such as, for instance, by effecting personal service in the USA. What occurred then last Friday in New York by way of delivery of materials to the address and person as identified - would fall within the ambit of regular (not irregular) personal service of notice of the Western Australian proceedings.
51 There is also another problematic issue about whether what occurred last Friday in New York was not actually service upon the defendant in person, but rather was only service upon the defendant's nominated registered agent in New York State, in which case there may not have been effected a personal service, but rather only substituted service upon the agent? That, however, would not be a valid substituted service effected upon the defendant's USA agent, since my orders of 30 August 2010 did not sanction substituted service upon an agent of the defendant in the United States of America.
(Page 14)
52 Where that all now leads, essentially, is that I am troubled as to sanctioning retrospectively in exercising any power I hold to validate today, what occurred by way of delivery of documents at the place identified in the State of New York, last Friday. If that service was effected personally upon the defendant, it then having a corporate presence as a foreign corporation doing business in New York, then there may be no irregularity to validate.
53 Because there is doubt about the existence of irregularity, it seems to me that it is inappropriate to seek to exercise a power to cure an irregularity, in the face of that position.
54 The plaintiff brings today's application, however, in the alternative - on a basis that by order 3 under its Notice of Ex Parte Motion it seeks, pursuant to O 10 r 6, to have the court direct that the Service Documents (as defined) be again served on the defendant, (essentially) and prospectively (not retrospectively), by serving the same documents yet again on Rizhao's registered agent, the Corporation Service Company at 80 State Street in Albany, New York in the United States of America.
55 As to this alternative, it seems to me that there is no reason in principle why an order today for such substituted service cannot be made prospectively, and in augmentation to my orders of 30 August 2010. If orders in those terms are made, that will obviate any issue arising for debate in future about whether or not there was an irregularity capable of being cured by a retrospective order. Bearing in mind the history of this matter to date, that it is undesirable that there be doubt upon such an issue, which might only add to further existing complexities about what is being done by way of service upon Rizhao.
56 That being the case, and bearing in mind the PRC service challenge has been listed for argument, as to the validity of service effected by facsimile in the PRC on 3 November 2010, a further (prospective) order made today - bearing in mind the plaintiff's affidavit material shows it has agents in the State of New York who can act promptly - is capable of being timeously executed, in accordance with the alternative proposed under order 3 in the Notice of Ex Parte Motion. That is I believe, the preferred way of proceeding at this time, rather than authorising or attempting to authorise what may or may not have been an irregularity in terms of something done in New York, last Friday.
(Page 15)
57 I should say something, about materials before me, in terms of a restructuring of the defendant which has been the subject of submissions and also much passing correspondence between the solicitors, including correspondence exhibited to Mr Murphy's supplementary affidavit, received only today. There is a communication from Holman Fenwick Willan, international solicitors for the defendant, who would seem to have a presence not only in China as solicitors, but also in Sydney and now, it would seem, also in Melbourne, Australia.
58 The evidence about a restructuring of the defendant was addressed by counsel for the plaintiff on the basis that those corporate arrangements appear to have been pending for some time. They are now looming in a fashion that would see them culminate at not later than 30 November 2010. I refer to Mr Murphy's affidavit of 18 October 2010 and attachment SMM4 being an announcement of what appears to be the defendant's parent company Kai Yuan Holdings Ltd made 1 September 2010 and par 4 of that announcement, which refers to 'completion of the proposed asset acquisition shall take place before 30 November 2010'.
59 The plaintiff's position about a corporate restructuring of the defendant was put on the basis that there was nothing pejorative to be inferred by reference to the pending restructuring arrangements. Corporate restructuring arrangements, of course, occur routinely, affecting, many corporations not only within Australia, but internationally. Nevertheless, the plaintiff's position is that the consummation of those arrangements has a potential to impact negatively against its ability to realise its judgment, say if, in due course, it is successful in obtaining registration of that judgment pursuant to s 33 of the Commercial Arbitration Act, and then if, in due course, its proceedings to attach assets either in Australia or internationally find themselves potentially thwarted or prejudiced - by the fact that property once the subject of the ownership of Rizhao has (somehow) been converted into unattachable property, that is now held by another entity by reason of the pending corporate restructure.
60 Those pending considerations do add an element of urgency to the need today for an efficacious mode of substituted service to be utilised here - in a fashion which could avoid arguments over problematic issues about potentially infringing the domestic laws of the PRC, having regard to considerations which have emerged since 30 August 2010, if it is possible to accomplish that objective. Again I emphasise the importance to my determination of this matter, of the fact that the court's jurisdiction over this defendant is not at all in issue. The question of jurisdiction is
(Page 16)
- extensively and exclusively dealt with under cl 21.7 of the 2007 iron ore supply contracts. Rather, the question is how service can be efficaciously effected upon Rizhao.
61 What has occurred in the USA last Friday has problematic considerations attached to it, in the context of seeking to retrospectively approve what was done unilaterally. But I see no potential prejudice to the defendant if an efficacious and lawful mode of service were to be freshly deployed - in terms of bringing to Rizhao's attention in the USA, the pendency of the respective ARB proceedings which have now been commenced it, in this court. On that basis, I am persuaded to accede to the application for substituted service upon Rizhao's agent, as sought in accordance with order 3, under its notice of ex parte motion of 18 October 2010, save that I would add to the second line of par 3 the word 'orders' after 'the Court', so that it will read, 'The Court orders and directs that the service documents may be served …'.
62 I observe finally, that the orders today, by way of substituted service by reference to an identified agent of the defendant in New York - are not crafted to undermine any other arguments that the plaintiff may have as to the validity of personal service as was effected upon the defendant at that address on Friday, 15 October 2010, in the circumstances I have explained. That is a different matter. What I am being asked to deal with today is the authorisation of service upon Rizhao's agent, by way of substituted service. I am thoroughly satisfied that on all the materials, that that order is appropriate.
0
2
2