FEDERAL COURT OF AUSTRALIA

 

HongKong Henson Industrial Limited v Victorian Ferries Pty Ltd [2021] FCA 1450

Case Name: HongKong Henson Industrial Limited v Victorian Ferries Pty Ltd
File Number: QUD 297 of 2021
Before: COLVIN J
Court: Federal Court of Australia
Division: General Division
National Practice Area: Commercial and Corporations
Sub Area: International Commercial Arbitration
Judgment Date: 18 November 2021
Medium Neutral Citation:  [2021] FCA 1450
Keywords: ARBITRATION – application to enforce foreign arbitral award made in Singapore as judgment of Court – where arbitration agreement contained in contract executed by parties by electronically exchanging printed and scanned versions of agreement which were signed and sealed – where applicant unable to produce original version or certified copy of arbitral agreement – where arbitrator made award in favour of applicant – whether requirements of s 9 of International Arbitration Act 1974 (Cth) – application allowed
Legislation: Electronic Transactions Act 1999 (Cth) s 11

Federal Court of Australia Act 1976 (Cth) s 52

International Arbitration Act 1974 (Cth) ss 8, 9

Cases: Tianjin Jishengtai Investment Consulting Partnership Enterprise v Huang [2020] FCA 767
Orders: THE COURT DECLARES THAT:

1.           Pursuant to s 8(3) of the International Arbitration Act 1974 (Cth), the applicant is entitled to enforce against the respondent the Singapore International Arbitration Centre Final Award dated 19 July 2021, being Award No.  76 of 2021 in SIAC Arbitration No. 898 of 2020, as if the award were a judgment of this Court.

THE COURT ORDERS:

2.           There be judgment in favour of the applicant against the respondent in the amount of AUD$3,022,393.47.

3.           Pursuant to s 52 of the Federal Court of Australia Act 1976 (Cth), the respondent pay interest at the interest rate prescribed by r 39.06 of the Federal Court Rules 2011 (Cth) from 18 November 2021.

4.           The respondent pay the applicant’s costs of and incidental to the application to be assessed on a lump sum basis on the papers.

5.           There be leave to the applicant to uplift the original copy of Exhibit 1.

Parties: HONGKONG HENSON INDUSTRIAL LIMITED

Applicant

&

VICTORIAN FERRIES PTY LTD

Respondent

Representation: Counsel for the Applicant:

Mr SS Monks

Solicitor for the Applicant:

King & Wood Mallesons

Counsel for the Respondent:

The Respondent did not appear

 

 

REASONS FOR JUDGMENT

COLVIN J:

  1. Australia has assumed obligations under the Convention for the Recognition and Enforcement of Foreign Arbitral Awards adopted in 1958 by the United Nations Conference on International Commercial Arbitration (Convention).  It has taken steps to give effect to those obligations by enacting the International Arbitration Act 1974(Cth).  By s 8 of the International Arbitration Act, an arbitral award made in pursuance of an arbitral agreement in a country other than Australia which is an arbitral award to which the Convention applies is binding for all purposes and may be enforced in this Court as if the award were a judgment or order of the Court.
  2. The applicant has obtained an arbitral award in Singapore against Victorian Ferries Pty Ltd (VFPL).  VFPL is an Australian proprietary company with its registered office and principal place of business in Victoria.
  3. The award has been issued by Mr Niels Schiersing a sole arbitrator acting under the arbitration rules of the Singapore International Arbitration Centre (SIAC).  The award requires VFPL to pay certain amounts denominated in US$ and S$.  The applicant seeks to enforce the award as if it were a judgment of this Court.  It seeks a declaration that it is entitled to do so and a judgment in Australian dollars in this Court that includes interest and costs as determined in the arbitration.  It also seeks orders for payment of interest until the amount of the judgment is paid and orders for the costs of the present application to be fixed on a lump sum basis in accordance with the practice of the Court.
  4. The following affidavits were filed and read on the application:

(1)          affidavit of Ms Goldie Ji dated 20 October 2021; and

(2)          affidavits of Ms Edwina Mary Kwan dated 11 November 2021 and 18 November 2021.

  1. In addition to the matters already described, the affidavits establish that:

(1)          VFPL is engaged in sand mining in Queensland;

(2)          the applicant, a company incorporated in Hong Kong, contracted to purchase mineral sands from VFPL;

(3)          the contract was made by (a) VFPL sending by email to the applicant a scanned copy of an offer sheet that was signed by a director of VFPL and had the seal of VFPL affixed; and (b) the signature of a director of the applicant and the seal of the applicant was then affixed to a print out of the scanned copy of the offer sheet which document was then scanned and emailed to VFPL;

(4)          the contract included a settlement of disputes provision which provides (a) for all disputes or differences whatsoever between the parties ‘arising out of or relating to the construction, meaning or operation or effect of this contract or the breach thereof’ to be settled by arbitration in accordance with the rules of Singapore’s arbitration institution for the time being in force, the rules of which were incorporated by reference; (b) that the seat of arbitration shall be Singapore; (c) that the language of the arbitration shall be English; and (d) that the arbitration is to be conducted by three arbitrators, one appointed by each party and a third nominated by the arbitrators to act as chair;

(5)          on 13 August 2021, the applicant referred a dispute arising out of the performance of the contract to arbitration in accordance with the rules of SIAC;

(6)          in accordance with the rules of SIAC (which provide for an expedited procedure by which an arbitration may be conducted before a sole arbitrator), a case may be referred to a sole arbitrator by the President of SIAC after considering the views of the parties;

(7)          the dispute was referred to Mr Schiersing as sole arbitrator by the President;

(8)          VFPL thereafter participated in the arbitration by filing a response to the notice of arbitration and advanced a counterclaim and also participated in procedural and substantive hearings;

(9)          VFPL did not object to the arbitration proceeding before a sole arbitrator;

(10)         a final award in English was issued together with reasons for the award on 19 July 2021;

(11)         the reasons deal with the merits;

(12)         the arbitral award was expressed in the following terms:

FINAL AWARD (Operative/Dispositive Section)

Having carefully considered the facts and submissions and for the reasons set out above, and rejecting all submissions and contentions to the contrary, the Tribunal makes and renders the following Final Award:

(I)          The Tribunal orders that Victorian Ferries Pty Ltd shall pay to Hongkong Henson Industrial Limited the amount of US$ 2,010,079.09 as well as interest thereon calculated as set forth in (II) below.

(II)         The Tribunal declares and orders that the amount of US$ 2,010,079.09 mentioned at (I) (or in case of partial payment any outstanding part thereof) shall carry interest calculated at a simple (not compound) rate of 5.33 per cent (%) per annum from the date of this Final Award, i.e. 19 July 2021, and until payment is made.

(III)        The Parties are jointly and severally liable to pay the Costs of the Arbitration, vide Rule 34.5 of Arbitration Rules of the Singapore International Arbitration Centre (2016). The Costs of the Arbitration as determined by the Registrar are S$ 115,027.84.

As between the Parties, the Tribunal declares Hongkong Henson Industrial Limited shall bear 10 per cent (%) of the Costs of the Arbitration and Victorian Ferries Pty Ltd shall bear 90 per cent (%) of the Costs of the Arbitration.

The Tribunal, thus, orders that the Costs of the Arbitration shall be apportioned as follows:

Hongkong Henson Industrial Limited:   S$       11,502.78

Victorian Ferries Pty Ltd:  S$       103,525.06

Since only Hongkong Henson Industrial Limited has made payment of deposits towards the Costs of the Arbitration, the Tribunal orders Victorian Ferries Pty Ltd to pay to Hongkong Henson Industrial Limited the amount of S$ 103,525.06.

(IV)         The Tribunal orders that Victorian Ferries Pty Ltd shall pay to Hongkong Henson Industrial Limited the amount of US$ 75,000.00 and S$ 1,896.00 as Legal and Other Costs, vide Rule 37 of the Arbitration Rules of the Singapore International Arbitration Centre (2016).

(V)          All other requests or claims are dismissed.

This Final Award is made and signed on this nineteenth day of the month of July in the Year Two Thousand and Twenty-one.

The seat of the arbitration is Singapore

Signed by Sole Arbitrator

Niels Schiersing

(original emphasis)

  1. It is well known that SIAC has been established as Singapore’s institution to conduct international arbitrations.
  2. Singapore is a party to the Convention.
  3. The original of the award has been produced to the Court.  After receiving the award as an exhibit, I directed that the original may be uplifted by the applicant noting that a copy of the award is an exhibit to the affidavit of Ms Ji.
  4. An issue arises as to whether it is sufficient for the purposes of the present application for a copy of the contract containing the arbitral agreement to be relied upon in circumstances where the applicant is unable to produce an original signed and sealed version or a certified copy of such version.  The issue arises because of the manner in which the parties concluded the contract (as described above) and the fact that the applicant is unable now to locate the version of the scanned offer sheet to which the applicant’s seal and the signature of one of its directors was affixed.
  5. The provisions of s 9 of the International Arbitration Act are to the effect that in any proceedings seeking to enforce a foreign award the person seeking enforcement shall produce to the Court ‘the original arbitration agreement under which the award purports to have been made or a duly certified copy’.  The award in the present case purports to have been made under the arbitral agreement recorded in the contract (as already described).  The parties concluded that agreement not by the execution of a physical document but by the electronic exchange of signed and sealed counterparts.  VFPL signed and sealed a version of the offer sheet (containing the arbitral agreement) that was sent electronically to the applicant.  The applicant then signed and sealed a printed version of that electronic document which was signed and sealed and communicated electronically to VFPL.  By submitting the offer sheet in that manner, VFPL indicated that it could be accepted by the same mode of communication.
  6. In those circumstances, the original version comprises the two electronic counterparts. The affidavit of Ms Ji provides a print out of the electronic version that was received by the applicant and a print out of the electronic version that was sent. Section 11 of the Electronic Transactions Act 1999 (Cth) provides that if, under a law of the Commonwealth, a person is required to produce a document then the production of an electronic form of the document will meet the requirement. However, assuming that provision applies, that is not the course that has been followed.
  7. Section 9(2) of the International Arbitration Act itself provides for an alternative means of production.  It states, relevantly for present purposes, that the arbitral agreement shall be deemed to be duly certified if it purports to have been authenticated or certified by the arbitrator and it has not been shown to the court that it was not in fact so authenticated or it has been otherwise authenticated to the satisfaction of the court.
  8. In the present case, the original award affixed with the seal of SIAC and noted as an award registered as 076 of 2021 on 19 July 2021 contains within it (on page 3) the full text of the arbitral agreement.  Further, Ms Ji who has produced the relevant print outs of the electronic counterparts was the person who received and sent the relevant emails.  In those circumstances, I am satisfied that the original arbitration agreement has been deemed to be certified either because it has been authenticated by the arbitrator or because I am also satisfied on the evidence of Ms Ji that the versions produced are true copies of the electronic counterparts.
  9. Therefore, on the evidence led by the applicant, the requirements of s 9 of the International Arbitration Actare met and I am satisfied that the award is a foreign award for the purposes of the International Arbitration Act.
  10. In the circumstances, I am satisfied that the applicant is entitled to have the award recognised and enforced in Australia.  Further, it may be enforced in this Court as if it were a judgment of this Court.  The appropriate course is for a declaration to be made and in order to enable the award to be enforced as a judgment of this Court in accordance with the rights conferred by the International Arbitration Act, for judgment in the amount of the award to be ordered in favour of the applicant.
  11. As the award is to be enforced in Australia, it is appropriate that the judgment be expressed in Australian currency:  Tianjin Jishengtai Investment Consulting Partnership Enterprise v Huang[2020] FCA 767 at [22]‑[23]. That is the course pressed for by the applicant. On the evidence, using the foreign exchange rate published by the Reserve Bank of Australia on 17 November 2021 the total amount of the award expressed in Australian dollars is $3,022,393.47.
  12. The applicant also seeks an order that there be interest payable on the amount for which judgment is entered from the date judgment is entered. It seeks an order that interest be paid pursuant to s 52 of the Federal Court of Australia Act 1976 (Cth). In accordance with that provision, a rate has been prescribed by the Federal Court Rules 2011 (Cth). The prescribed rate moves every six months and it is currently 6.10%.
  13. I am also satisfied that there should also be an order for the applicant’s costs of and incidental to the application to be paid by VFPL.  The applicant seeks to have those costs assessed on a lump sum basis on the papers.  Consistent with the practice of the Court in relation to costs it is appropriate for such an order to be made.
  14. For the above reasons, I made orders on the application declaring that the applicant is entitled to enforce the award and for judgment against VFPL in favour of the applicant in the amount sought, together with interest and an order for the costs to be paid by VFPL, such costs to be assessed on a lump sum basis.
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Colvin.

Associate:

Dated:       19 November 2021