FEDERAL COURT OF AUSTRALIA
StoneX Financial Inc. v Ambrose (No 2) [2024] FCA 501
File number(s): QUD 507 of 2023 Judgment of: SARAH C DERRINGTON J Date of judgment: 7 May 2024 Catchwords: ARBITRATION – application to enforce arbitral award in Australia under International Arbitration Act 1974 (Cth) – declaration that applicant entitled to enforce award of the National Futures Association as if a judgment of the Court – where award made in the United States of America – where award remains unsatisfied – interlocutory application opposing enforcement of award – whether provisions of written arbitration agreement regarding notice and public policy breached – whether grounds under s 8(5)(c) and 8(7)(b) or any other grounds for refusal to enforce award demonstrated – enforcement of award under s 8(3) of the International Arbitration Act
PUBLIC INTERNATIONAL LAW – New York Convention – where Australia and the United States of America have adopted the Convention – where Article 3 requires Australia to recognise and enforce arbitral awards to which the Convention applies
PRACTICE AND PROCEDURE – judgment for enforcement sought in terms of arbitral award – persuasive onus on applicant – where respondents did not appear at final hearing – indemnity costs
Legislation: International Arbitration Act 1974 (Cth) ss 3(1), 8, 8(3), 8(5), 8(7), 9, 9(1)
Federal Court Rules 2011 (Cth) rr 28.44(2), 28.44(3), 4.05(2)
Cases cited: International Relief and Development Inc v Ladu [2014] FCA 887
Division: General Division Registry: Queensland National Practice Area: Commercial and Corporations Sub-area: Commercial Arbitration Number of paragraphs: 36 Date of hearing: 7 May 2024 Counsel for the Applicant Mr D Chesterman KC Solicitor for the Applicant Norton Rose Fulbright Counsel for the Respondents The Respondents did not appear ORDERS
QUD 507 of 2023 BETWEEN: STONEX FINANCIAL INC.
Applicant
AND: LINDA AMBROSE AND GRAHAM AMBROSE ATF AMBROSE SUPERANNUATION BENEFITS FUND (ABN 28 120 931 532)
First Respondent
LINDA AMBROSE
Second Respondent
GRAHAM AMBROSE
Third Respondent
ORDER MADE BY:
SARAH C DERRINGTON J
DATE OF ORDER:
7 MAY 2024
THE COURT ORDERS THAT:
1.The respondents’ interlocutory application filed on 29 January 2024 be dismissed.
2.Pursuant to s 8(3) of the International Arbitration Act 1974 (Cth), the Court declares that the applicant is entitled to enforce the award of the National Futures Association in Case No. 19-ARB-104, dated 12 May 2023, against Linda Ambrose and Graham Ambrose individually, and as joint trustees of the Ambrose Superannuation Benefits Fund, as if it were a judgment of this Court.
3.Judgment be granted in favour of the applicant against the respondents in the terms of the award, namely that the Ambrose Superannuation Benefits Fund, Linda Ambrose, and Graham Ambrose are jointly and severally liable for the following award and shall pay to the applicant US$710,764.42, plus interest. The judgment comprises the following amounts:
(a)compensatory damages, US$500,287.39;
(b)pre-judgment interest, US$137,579.03;
(c)post-judgment interest accruing at a rate of US$85.67 per day from 14 April 2023 until the date the judgment is paid;
(d)attorney’s fees,…
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- Case
- [2024] FCA 501
- Decision Date
CaseChat Overview and Summary
The court considered whether the grounds for refusal to enforce the award, as set out in sections 8(5)(c) and 8(7)(b) of the International Arbitration Act 1974 (Cth), were demonstrated. These sections pertain to breaches of the arbitration agreement and public policy, respectively. The court examined the arbitration agreement's notice provisions and whether they were complied with. It also assessed whether enforcing the award would contravene Australian public policy. Furthermore, the court acknowledged Australia's obligations under the New York Convention to recognise and enforce arbitral awards to which the Convention applies.
The court found that the arbitration agreement's notice provisions were not breached and that enforcing the award did not contravene Australian public policy. The persuasive onus on the applicant to demonstrate that the award should be enforced was met, as the respondents did not appear at the final hearing. Consequently, the court dismissed the respondents' interlocutory application and declared that StoneX Financial Inc. was entitled to enforce the arbitral award as if it were a judgment of the Court. The judgment mandated that the respondents pay the award amount, including damages, interest, attorney's fees, and costs, and ordered the respondents to pay StoneX Financial Inc.'s costs on an indemnity basis.
Orders
Orders of the court
1. The respondents’ interlocutory application filed on 29 January 2024 be dismissed.
2. Pursuant to s 8(3) of the International Arbitration Act 1974 (Cth), the Court declares that the applicant is entitled to enforce the award of the National Futures Association in Case No. 19-ARB-104, dated 12 May 2023, against Linda Ambrose and Graham Ambrose individually, and as joint trustees of the Ambrose Superannuation Benefits Fund, as if it were a judgment of this Court.
3. Judgment be granted in favour of the applicant against the respondents in the terms of the award, namely that the Ambrose Superannuation Benefits Fund, Linda Ambrose, and Graham Ambrose are jointly and severally liable for the following award and shall pay to the applicant US$710,764.42, plus interest. The judgment comprises the following amounts:
(a) compensatory damages, US$500,287.39;
(b) pre-judgment interest, US$137,579.03;
(c) post-judgment interest accruing at a rate of US$85.67 per day from 14 April 2023 until the date the judgment is paid;
(d) attorney’s fees, US$65,398.00; and
(e) costs and fees for filing, hearing and motion fees paid by the applicant to the National Futures Association, US$7,500.00.
4. The respondents pay the applicant’s costs of this proceeding, and of the interlocutory application filed on 29 January 2024, on an indemnity basis.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
The applicant in this matter applies to enforce a foreign arbitral award as if it were a judgment or order of this court pursuant to s 8(3) of the International Arbitration Act 1974 (Cth). The award was made in the United States of America. Both Australia and the United States are parties to the New York Convention, as defined in s 3(1) of the International Arbitration Act. The applicant is a corporate body registered in Florida, in the United States. It was formerly known as ‘International FC Financial Inc.’ but changed its name on 1 August 2020 to ‘StoneX Financial Inc.’ The applicant conducts business as a futures commission merchant; it executes and clears trades on various commodities exchanges for its account holders. Account holders are provided with statements for their futures trading accounts. On or about 10 May 2016, the second respondent, Mrs Linda Ambrose, and the third respondent, Mr Graham Ambrose, executed various documents to open a futures trading account on behalf of the first respondent, the Ambrose Superannuation Benefits Fund, with the applicant, StoneX. THE RELEVANT AGREEEMENTS In establishing the trading account with the applicant, the following documents were executed by the respondents: (1)a primary account owner information, primary account holder’s financial information, and account ownership form;(2)the arbitration agreement;(3)a futures and exchange traded options customer agreement (Customer Agreement); (4)a trustee certification of investment powers; and(5)a managed account agreement, power of attorney, and third party controller statement. The arbitration agreement provides, relevantly, that: This Futures & Exchange-Traded Options Customer Agreement (the “Agreement”) is entered into as of the date below between the undersigned Customer and the FCM Division of INTL FCStone Financial Inc., acting in its capacity as a futures commission merchant (“FCM”), (each referred to individually as a “Party” or collectively, the “Parties”) to enable the Customer to establish a non-discretionary account, unless additional documents are executed relating to a discretionary account, for the purchase and sale of futures contracts, option contracts thereon, commodity futures, cash commodities forward contracts, currency conversions, on-exchange foreign currency-denominated financial instruments, cleared swaps and transactions related thereto (“Commodity Interests”). This Agreement shall be continuous and shall cover all of the Customer’s accounts established at any time or closed and re-established from time to time, irrespective of any change at any time in FCM personnel or an assignment, reorganization, consolidation or merger of the FCM, and shall inure to the benefit of FCM and its successors and assigns, binding upon Customer and its estate, executors, administrators, legal representatives, successors and assigns. Clauses 7 and 9 of the Customer Agreement state:7. Indemnification. Customer agrees to Indemnify, defend and hold harmless FCM and its directors, officers, employees, and agents from and against any Losses (including reasonable attorney’s fees) caused directly or indirectly by (a) Customer’s failure, breach of, or failure to perform any provision of this Agreement or refusal to fully and timely comply with any provision of this Agreement or applicable law; (b) any actions of any Agent or third party selected by Customer which affect Customer’s account; (c) Customer’s failure to timely deliver any security, commodity, or other property previously sold by FCM on Customer’s behalf, (d) any taxes imposed on FCM on any property held in Customer’s account; or (e) any misstatement of Customer’s representations and warranties contained in this Agreement or any other documentation delivered by Customer to FCM that is untrue or ceases to be true and correct as of the date of this Agreement and for any failure of any transaction executed with respect to Customer’s account. Customer additionally agrees to pay promptly to FCM all reasonable attorney’s fees incurred by FCM (i) in the enforcement of any of the provisions of this Agreement, or (ii) in any action, claim or demand filed by Customer arising out of this Agreement or any other Agreements between FCM and Customer.[…]9. Debit Balances, Commissions and Other Costs. Customer agrees to pay, and authorizes FCM to debit its account for, (i) the amount of any trading loss, debit balance or deficiency in any of Customer’s accounts; (ii) all FCM commissions and other charges in effect from time to time, (iii) all commissions, fees and other costs incurred in connection with Commodity Interests executed, carried and/or cleared by FCM, including but not limited to, introducing broker and floor brokerage, clearing, exchange and National Futures Association (“NFA”) fees, (iv) all costs incurred by FCM in connection with taking and/or making deliveries, and (v) all regulatory, exchange and other self-regulatory fees, fines, penalties and charges, and any taxes incurred or imposed with respect to Commodity Interests or other transactions in or for Customer’s accounts and any other service-related fees charged to Customer’s account, including, but not limited to, wire transfer fees, statement fees and transaction fees. If Customer’s account is transferred to another futures commission merchant, transfer commissions and/or service fees may be charged. Customer agrees that all demands for debits owing FCM shall be me with twenty-four (24) hours following either of (i) Customer’s receipt of FCM’s oral request for payment or (ii) FCM’s delivery to Customer of FCM’s written request for payment (except as payment may be modified with respect to wire and telephone requests for margin fund). If, after such 24-hour period the amount in Customer’s account is not sufficient to pay outstanding fees and FCM deems it necessary to take collection action, Customer shall hold FCM harmless for all Losses incurred in connection with such collection and shall reimburse FCM for the debit and all costs incurred, including reasonable attorneys’ fees, in connection with such collection actions. Customer agrees to pay interest on debits and deficiencies at an annual rate of 1% over the prime rate as published by the Wall Street Journal on the date such debit or fee was incurred.