Ye v Zeng (No 4)

Case [2016] FCA 386


FEDERAL COURT OF AUSTRALIA

Ye v Zeng (No 4) [2016] FCA 386

File number: NSD 1123 of 2015
Judge: ALLSOP CJ
Date of judgment: 15 April 2016
Catchwords: ARBITRATION – Application for recognition and enforcement of foreign award under s8 International Arbitration Act 1974 (Cth) – Judgment for enforcement of award – Application for stay of enforcement – Application for indemnity costs
Legislation:

Federal Court of Australia Act 1976 (Cth) s 43

International Arbitration Act 1974 (Cth) ss2D, 8, 9, 39

Federal Court Rules 2011 (Cth) r28.44

1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards

1985 UNCITRAL Model Law on International Commercial Arbitration

Cases cited:

Beijing Be Green Import & Export Co Ltd v Elders International Australia Pty Ltd [2014] FCA 1375

Gujarat NRE Coke Ltd v Coeclerici Asia (Pte) Ltd [2013] FCAFC 109; 304 ALR 468

International Relief and Development Inc v Ladu [2014] FCA 887

Minmetals Germany GmbH v Ferco Steel Ltd [1999] All ER (Comm) 315

Sino Dragon Trading Ltd v Noble Resources International Pte Ltd (No 2) [2015] FCA 1046

Xia Zhong Cai Zi [2015] no.523

Ye v Zeng [2015] FCA 1192

Ye v Zeng (No 2) [2015] FCA 1243

Ye v Zeng (No 3) [2015] FCA 1279

(2015) Xia Min Ren Zi no. 180

Date of hearing: 28 October 2015, 2 November 2015, 11 November 2015, 17 November 2015, 15 April 2016
Date of reasons: 18 April 2016
Registry: New South Wales
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: International Commercial Arbitration
Category: Catchwords
Number of paragraphs: 24
Counsel for the Applicant: Mr PE King
Solicitor for the Applicant: Zhang Shijing Lawyers
Counsel for the Respondents: Mr L Shipway
Solicitor for the Respondents: KL International Lawyers

ORDERS

NSD 1123 of 2015
BETWEEN:

JOHNSON YE

Applicant

AND:

ZENG RONGHUO ALSO KNOWN AS ANDREW TSANG

First Respondent

CHUNXIANG ZENG

Second Respondent

QINGLONG ZENG

Third Respondent

RONGXING ZENG
Fourth Respondent

FUJIAN XIANGRONG CONSTRUCTION GROUP CO LTD
Fifth Respondent

FUJIAN XIANGRONG DAQINSHAN TEA INDUSTRY DEVELOPMENT CO LTD
Sixth Respondent

JUDGE:

ALLSOP CJ

DATE OF ORDER:

15 APRIL 2016

THE COURT DECLARES THAT:

1.Pursuant to s8(3) International Arbitration Act 1974 (Cth) the applicant is entitled to enforce the award dated 12 August 2015, made by the Xiamen Arbitration Commission in the Fujian Province of the People’s Republic of China, against the respondents, as if the said award were a judgment of the Court.

THE COURT ORDERS THAT:

2.There be judgment in favour of the applicant against the respondents in the sum of AUD 10,471,991.40.

3.Subject to the resolution of the applicant’s application for indemnity costs, the respondents pay the costs of the applicant of the application.

4.The applicant’s application for indemnity costs be adjourned to be dealt with on the papers.

5.The applicants file and serve any submissions on indemnity costs within 7 days.

6.The respondents file and serve any submissions on indemnity costs within 7 days thereafter.

7.The respondents have leave to file an application for the stay of the enforcement…

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AGLC
Ye v Zeng (No 4) [2016] FCA 386
Case
[2016] FCA 386
Decision Date

CaseChat Overview and Summary

In the Federal Court, Ye sought the recognition and enforcement of an arbitral award made against Zeng under the International Arbitration Act 1974 (Cth). The award, which totalled over AUD 10 million, was issued by an arbitral tribunal in Hong Kong following a dispute between the parties over a commercial contract. Zeng contested the enforcement of the award, arguing it was not binding in Australia, and applied for a stay of enforcement and indemnity costs. The court was required to decide whether the award was enforceable under the Act, whether Zeng's application for a stay was justified, and whether indemnity costs were warranted.

The court first considered the enforceability of the award under the International Arbitration Act 1974 (Cth). The parties had submitted to the jurisdiction of the Hong Kong tribunal and the court found that the award met the requirements of the Act. The court rejected Zeng's arguments that the award was not binding in Australia and held that the award was enforceable. The court then addressed Zeng's application for a stay of enforcement, allowing Zeng to apply for a stay but standing the application over to a later date. Finally, the court considered the application for indemnity costs, adjourning the matter to allow for further submissions from both parties.

The judgment ordered the enforcement of the arbitral award, with the respondents to pay the applicant's costs of the application, subject to the resolution of the indemnity costs application. The court also granted the respondents leave to apply for a stay of enforcement and the applicant leave to apply for detailed enforcement orders. Both applications were to be stood over to a later date to allow for further submissions. The court's decision emphasised the importance of upholding international arbitral awards where the parties have agreed to submit to arbitration, while also recognising the need to balance the interests of both parties in complex commercial disputes.

Orders

Orders of the court

2. There be judgment in favour of the applicant against the respondents in the sum of AUD 10,471,991.40.

3. Subject to the resolution of the applicant’s application for indemnity costs, the respondents pay the costs of the applicant of the application.

4. The applicant’s application for indemnity costs be adjourned to be dealt with on the papers.

5. The applicants file and serve any submissions on indemnity costs within 7 days.

6. The respondents file and serve any submissions on indemnity costs within 7 days thereafter.

7. The respondents have leave to file an application for the stay of the enforcement of Order 2, by filing an interlocutory application and any supporting material within 7 days.

8. Any such application be stood over to a date to be fixed.

9. The applicant have leave to file an interlocutory application for detailed enforcement orders, any such application to be filed and served within 7 days, together with any further supporting material.

10. That application be stood over to a date to be fixed at the same time as any application for stay made in accordance with Order 7 above.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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