Regie National Des Usines Renault SA & Anor v Zhang

The High Court of Australia considered an appeal from the Supreme Court of New South Wales concerning the enforceability of a foreign arbitral award. The appellants, Regie National Des Usines Renault SA and another, sought to enforce an award made in France against the respondent, Mr. Zhang. The dispute arose from a joint venture agreement between the parties, which contained an arbitration clause. Mr. Zhang had challenged the enforcement of the award in the Australian courts, arguing that it was contrary to Australian public policy.

The central legal issue before the High Court was whether the enforcement of the French arbitral award in Australia would be contrary to Australia's public policy, as contemplated by section 8(5)(a) of the International Arbitration Act 1974 (Cth), which gives effect to Article V(2)(b) of the New York Convention. This required the Court to determine the scope and application of the public policy exception in the context of enforcing foreign arbitral awards.

The High Court, in a joint judgment, held that the public policy ground for refusing enforcement of a foreign arbitral award is to be interpreted narrowly. Their Honours explained that the exception is not intended to allow a party to re-litigate the merits of the dispute or to challenge the award simply because it is perceived as unjust or incorrect. Instead, it is reserved for circumstances where enforcement would be manifestly contrary to the fundamental notions of justice and morality of the forum. In this instance, the Court found that Mr. Zhang had not demonstrated that the enforcement of the award would offend Australian public policy.

The High Court accordingly allowed the appeal and ordered that the French arbitral award be enforced in Australia.