United Mexican States v Cabal

The United Mexican States sought to enforce a foreign arbitral award against Mr. Cabal in Australia. Mr. Cabal resisted enforcement, arguing that the award was not final and binding, and that its enforcement would be contrary to Australian public policy. The matter came before Gummow J in chambers.

The primary legal issues before the Court were whether the arbitral award was final and binding within the meaning of the International Arbitration Act 1974 (Cth) and whether its enforcement in Australia would be contrary to Australian public policy. The Court was also required to consider the scope of the discretion to refuse enforcement on public policy grounds.

Gummow J considered the nature of the arbitral proceedings and the applicable arbitration law. His Honour found that the award was final and binding, notwithstanding ongoing proceedings in Mexico that Mr. Cabal contended affected its finality. On the public policy ground, Gummow J applied the principle that such a defence is to be construed narrowly and requires a high threshold to be met, involving a breach of fundamental notions of justice or morality. His Honour concluded that the grounds raised by Mr. Cabal did not meet this threshold.

The Court ordered that the arbitral award be recognised and enforced in Australia.