Republic of Peru (Peruvian State)

The Republic of Peru (Peruvian State) sought to enforce a foreign arbitral award against a company, the respondent. The dispute concerned the enforcement of an award made in Peru, which the respondent sought to resist on various grounds. The matter came before the Federal Court of Australia.

The primary legal issue before the court was whether the enforcement of the Peruvian arbitral award should be refused on the grounds that it was contrary to Australian public policy. The court was required to consider the scope of the public policy exception under the International Arbitration Act 1974 (Cth), which gives effect to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

The court reasoned that the public policy exception should be interpreted narrowly and applied only in exceptional circumstances where enforcement would be manifestly incompatible with the fundamental notions of justice and morality of the forum. Applying this principle, the court found that the grounds raised by the respondent did not meet the high threshold required to refuse enforcement. The court considered the nature of the award and the arbitration process, concluding that there was no evidence of fraud, corruption, or a denial of natural justice that would render the award contrary to Australian public policy.

The court ultimately ordered that the Peruvian arbitral award be recognised and enforced in Australia.