United Mexican States v Pasini & Cabal & Ors

The United Mexican States sought to enforce a foreign arbitral award against Pasini and Cabal, and other respondents. The dispute concerned the enforcement of an award made in Mexico, which the United Mexican States sought to have recognised and enforced in Australia. The matter came before the High Court of Australia.

The primary legal issue before the High Court was whether the United Mexican States was entitled to enforce the arbitral award in Australia under the International Arbitration Act 1974 (Cth), which gives effect to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). Specifically, the court had to consider whether the award was contrary to Australian public policy, a ground for refusing enforcement under the Act.

Gummow and Hayne JJ considered the scope of the public policy exception to enforcement under the New York Convention and the International Arbitration Act. Their Honours noted that the exception is to be construed narrowly and applies only in exceptional circumstances where enforcement would be manifestly contrary to the fundamental notions of justice and morality of the forum. The court examined the nature of the arbitral proceedings and the award itself to determine if any aspect offended Australian public policy.

The High Court ultimately held that the United Mexican States had not established that the award was contrary to Australian public policy. Accordingly, the court ordered that the arbitral award be recognised and enforced in Australia.