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FEDERAL COURT OF AUSTRALIA
- DECLARES that, pursuant to r 13.01(c) of the Federal Court Rules 2011 (FCR), and in the events which have happened, the Originating Application filed herein on 22 December 2016 (Originating Application) has not been duly served on any of the respondents.
- ORDERS that the Interlocutory Application filed by the respondents on 22 March 2017 otherwise be dismissed.
- ORDERS that, pursuant to r 10.48 FCR, by the steps taken by the applicant of sending the Originating Application, the two affidavits sworn by Jody Jordahl on 21 December 2016 and a copy of the Court’s Orders of 8 February 2017 (together, Court Documents) to the respondents by electronic transmission on 16 February 2017 and by post on 16 February 2017, the Court Documents are taken to have been duly served upon each of the respondents.
- ORDERS that half of the applicant’s costs of:
(a) The Interlocutory Application filed by the respondents on 22 March 2017; and
(b) The Interlocutory Application filed by the applicant on 19 May 2017;
be the applicant’s costs in the proceeding as taxed or agreed.
- ORDERS that the proceeding be listed for case management on a date to be fixed by arrangement with the Associate to Foster J.
- On 22 August 2016, an arbitral tribunal (tribunal) constituted under the rules of the Singapore International Arbitration Centre (SIAC) handed down an award, purportedly binding on all parties to the present dispute (Award). The arbitration was conducted in Singapore and, in the Award, the tribunal specified the seat of the arbitration as Singapore.
- The applicant in this proceeding, Sanum Investments Limited (Sanum) is a corporation based in Macau, SAR, China and is the award creditor under the Award.
- The respondents, ST Group Co., Ltd (STG), Mr Sithat Xaysoulivong (SX), ST Vegas Co., Ltd (STV) and S.T. Vegas Enterprise Ltd (STVE), are the award debtors under the Award. Sanum’s claims in the arbitration against two further respondents, Xaya Construction Co., Ltd and Xaysana Xaysoulivong, were dismissed by the tribunal.
- None of the respondents participated in the arbitration and none of them was represented in the arbitration.
- None of the respondents has a presence in Australia. It is not clear whether any of them has any assets in this country. The evidence did not address this second point.
- The evidence before me established that each of the corporate respondents was incorporated in the Lao People’s Democratic Republic (Laos) and, at all relevant times, had its principal place of business in Vientiane, the capital of Laos. The evidence suggested that SX is ordinarily resident in Laos.
- In its Originating Application (OA) filed in this proceeding, Sanum seeks an order pursuant to s 8(3) of the International Arbitration Act 1974 (Cth) (IAA) enforcing the Award against the respondents in Australia. In addition, it claims monetary judgments totalling in excess of USD 202 million plus interest thereon and costs.
- By an Interlocutory Application (IA) filed in this proceeding on 22 December 2016, Sanum sought an order that leave be granted to it to serve the OA and two supporting affidavits of Jody Jordahl sworn on 21 December 2016 on each of the respondents in Laos. It took that step notwithstanding that, under r 28.44(3) of the Federal Court Rules 2011 (FCR), an application to enforce a foreign award under s 8(3) of the IAA may be made without notice to any person. That is, such an application may be made without serving or advising another party or any other person of the application.
- The hearing before me of the later IAs with which this judgment is concerned (as to which, see – below) was conducted upon the basis that, once Sanum had filed its IA on 22 December 2016, it was thereafter obliged to address the two applications presently before the Court upon the basis that it was required to satisfy the requirements of Pt 10 FCR in respect of the service of the OA and Mr Jordahl’s supporting affidavits upon the respondents in Laos. Sanum did not rely upon r 28.44(3) FCR at that hearing and did not argue that, notwithstanding that it had invoked Pt 10 FCR by filing its IA on 22 December 2016, it could nonetheless proceed ex parte to press for final relief in this proceeding without satisfying the requirements of Pt 10 FCR. For these reasons, I shall put to one side r 28.44(3) FCR.
- In August 2016, very soon after the Award was handed down, Sanum served copies of it upon each of the respondents by pre-paid ordinary post and by email.
- Shortly after commencing this proceeding, Sanum attempted to enforce the Award in Laos pursuant to the provisions of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). Laos is a signatory to that Convention. By mid-May 2017, Sanum’s efforts to enforce the Award in Laos had come to nought and its prospects of subsequently being allowed to enforce the Award there seemed slim.
- On 8 February 2017, I heard ex parte the IA which Sanum had filed on 22 December 2016 (as to which, see  above). On that day, I made the following orders:
- Pursuant to r 10.42 and r 10.43 of the Federal Court Rules 2011, GRANTS leave to the applicant to serve the Originating Application, the two affidavits sworn by Mr Jody Jordahl on 21 December 2016 and a copy of this Order upon each of the respondents in the Lao People’s Democratic Republic.
- ORDERS that the costs of the Interlocutory Application filed by the applicant on 22 December 2016 be costs in the proceeding.
- GRANTS liberty to all parties to apply on three (3) days’ notice or on such shorter notice as a Judge might allow.
- DIRECTS that the applicant inform the Associate to Foster J when service has been effected upon the respondents so that the Court might arrange for an appropriate Case Management listing soon thereafter.
- The making of those Orders was supported by Reasons for Judgment delivered the same day (Sanum Investments Limited v ST Group Co., Ltd  FCA 75) (Sanum No 1).
- In the second (shorter) affidavit sworn by him on 21 December 2016, Mr Jordahl said that, if Sanum was successful in obtaining leave to serve the OA and supporting affidavits upon the respondents in Laos, it would serve each of the respondents in accordance with the law of Laos as to service of such process. He expressed the view that the law of Laos permitted service of the relevant process by pre-paid ordinary post, by email or by facsimile transmission. He said that Sanum intended to serve the relevant documents by email and by post. Mr Jordahl also said that Laos was not a signatory to the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters done at the Hague on 15 November 1965 (Hague Convention). That observation on the part of Mr Jordahl was, at that time, and remains, a correct statement.
- On 16 February 2017, service of the OA and the two supporting affidavits was effected upon the respondents in Laos by pre-paid ordinary post and by email. The relevant documents were sent by Sanum’s Australian lawyers to the last known address of each of the respondents and to the last known email address of each of the respondents. The documents which were served by these means were in English. No translations of these documents into the Lao language were served at this time or at any other time.
- There is no doubt that, on or about 16 February 2017, or very soon thereafter, the OA and the two affidavits of Mr Jordahl were brought to the attention of all of the respondents. It is also clear that SX has a good command of the English language. The respondents did not argue before me that the absence of translations of the documents into the Lao language had caused or would cause any of them any particular difficulties.
- In late February 2017, the respondents retained lawyers in Australia and they appeared conditionally at the hearing of this proceeding listed on 23 March 2017.
- It is obvious, and I find, that the OA and the two affidavits of Mr Jordahl were brought to the attention of all of the respondents by no later than 20 February 2017, the date when they first instructed their Australian lawyers in relation to this matter.
- On 22 March 2017, the respondents filed (conditionally) an IA in which they sought inter alia:
(a) A declaration, pursuant to r 13.01(c) FCR that the OA has not been duly served upon any of the respondents.
(b) An order pursuant to r 13.01(d) FCR that Order 1 made by me on 8 February 2017 be discharged.
- The respondents advanced two principal contentions in support of the relief claimed by them in their IA filed on 22 March 2017, namely:
(a) Sanum had not demonstrated on 8 February 2017, when I granted leave to serve the OA and supporting affidavits upon the respondents in Laos, and could not demonstrate as at the date of the contested hearing before me, a prima facie case for any of the relief which it claimed in the OA as required by r 10.43(4)(c) FCR; and/or
(b) The mode of service effected by Sanum on each of the respondents was not in accordance with the law of Laos as required by r 10.43(2) FCR.
- These contentions were developed in Written Submissions filed on behalf of the respondents on 22 March 2017, 23 June 2017, 7 July 2017 and 9 August 2017 as well as in oral submissions made on 23 March 2017, 20 July 2017 and 26 September 2017. The main contested hearing of the respondents’ r 13.01 IA took place on 20 July 2017.
- Sanum opposed the relief claimed by the respondents in their IA filed on 22 March 2017 and also sought to meet the respondents’ contentions by filing an IA of its own on 19 May 2017 in which it claimed the following relief:
- An order pursuant to rule 10.48 of the Federal Court Rules 2011 that, by the steps taken by the Applicant of sending the Originating Application, the two Affidavits sworn by Jody Jordahl on 21 December 2016 and a copy of the Court’s Orders of 8 February 2017 (together, “Court Documents”) to the Respondents by electronic transmission on 16 February 2017 and by post on 16 February 2017, the Court Documents are taken to have been served on each of the Respondents.
2. An order that the Respondents pay the Applicant’s Costs of this application.
- Sanum supported its position by Written Submissions filed on 21 March 2017, 6 July 2017 and 9 August 2017 together with oral submissions made on 23 March 2017, 20 July 2017 and 26 September 2017. The contested hearing of Sanum’s r 10.48 IA also took place on 20 July 2017.
- By these Reasons for Judgment, I determine the claims for relief made by Sanum in its IA filed on 19 May 2017 and the claims for relief made by the respondents in their IA filed on 22 March 2017.
- The following issues arise:
(a) What is the law of Laos as to the service in Laos of foreign court initiating process such as the OA upon an individual who is a Lao citizen and who is ordinarily resident in Laos?
(b) What is the law of Laos as to the service in Laos of foreign court initiating process such as the OA upon corporations which are based in Laos?
(c) Was the service of the OA and supporting affidavits which was actually effected upon each of the respondents in Laos on 16 February 2017 by pre-paid ordinary post and by email valid according to the law of Laos?
(d) If the answer to (c) is no, or no in part, should the Court now make an order pursuant to r 10.48 FCR that those documents be taken to have been served upon each of the respondents on 16 February 2017 (or on some other date)? This question largely turns upon the additional question of whether, in the period from February to September 2017, it was not practicable to serve those documents on each of the respondents in Laos in accordance with the law of that country.
(e) In any event, has Sanum established a prima facie case for enforcement of the Award against each of the respondents for the purposes of r 10.42 and r 10.43 FCR? This question turns upon whether the respondents have been able to satisfy the Court that their case for resisting enforcement of the Award based upon one or more of the grounds specified in s 8(5)(b), (d) and (e) of the IAA is sufficiently strong as to negate the prima facie case for enforcement of the Award advanced by Sanum. The respondents contend that none of the respondents was bound by any of the agreements to arbitrate relied upon by Sanum both here and in the arbitration and that, in any event, the only arbitration agreement that might conceivably have underpinned the arbitration and the Award required that the arbitration take place in Macau, not Singapore.
THE RELEVANT RULES OF COURT
The Terms of the Rules and the Relevant Legal Principles
- Part 10, Div 10.4 (Service outside Australia) regulates the circumstances in which a party is permitted to serve Court documents in places outside Australia.
- Rule 10.41 FCR provides as follows:
10.41 Definitions for Division 10.4
In this Division:
convention, for a foreign country, means a convention (other than the Hague Convention), agreement, arrangement or treaty about service abroad of judicial documents to which the Crown in right of the Commonwealth or, if appropriate, in right of a State, and a foreign country are parties.
foreign country means a country other than Australia.
Hague Convention means the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters done at the Hague on 15 November 1965.
Note 1: Originating application is defined in the Dictionary.
Note 2 to r 10.41FCR is not presently relevant.
- The chapeau to r 10.42 is in the following terms:
10.42 When originating application may be served outside Australia
Subject to rule 10.43, an originating application, or an application under Part 7 of these Rules, may be served on a person in a foreign country in a proceeding that consists of, or includes, any one or more of the kinds of proceeding mentioned in the following table.
- Item 10 in the table referred to in r 10.42 FCR is in the following terms:
|Item||Kind of proceeding in which originating application may be served on a person outside Australia|
|10||Proceeding for an order under Division 28.5 in relation to an arbitration under the International Arbitration Act 1974|
- Rule 10.43 FCR provides as follows:
10.43 Application for leave to serve originating application outside Australia
(1) Service of an originating application on a person in a foreign country is effective for the purpose of a proceeding only if:
(a) the Court has given leave under subrule (2) before the application is served; or
(b) the Court confirms the service under subrule (6); or
(c) the person served waives any objection to the service by filing a notice of address for service without also making an application under rule 13.01.
Note: A respondent may apply to set aside an originating application or service of that application—see rule 13.01.
(2) A party may apply to the Court for leave to serve an originating application on a person in a foreign country in accordance with a convention, the Hague Convention or the law of the foreign country.
(3) The application under subrule (2) must be accompanied by an affidavit stating:
(a) the name of the foreign country where the person to be served is or is likely to be; and
(b) the proposed method of service; and
(c) that the proposed method of service is permitted by:
(i) if a convention applies—the convention; or
(ii) if the Hague Convention applies—the Hague Convention; or
(iii) in any other case—the law of the foreign country.
(4) For subrule (2), the party must satisfy the Court that:
(a) the Court has jurisdiction in the proceeding; and
(b) the proceeding is of a kind mentioned in rule 10.42; and
(c) the party has a prima facie case for all or any of the relief claimed in the proceeding.
Note 1: The law of a foreign country may permit service through the diplomatic channel or service by a private agent—see Division 10.5.
Note 2: Rules 10.63 to 10.68 deal with service of local judicial documents in a country, other than Australia, that is a party to the Hague Convention.
Note 3: The Court may give permission under subrule (4) on conditions—see rule 1.33.
(5) A party may apply to the Court for leave to give notice, in a foreign country, of a proceeding in the Court, if giving the notice takes the place of serving the originating application.
(6) If an originating application was served on a person in a foreign country without the leave of the Court, a party may apply to the Court for an order confirming the service.
(7) For subrule (6), the party must satisfy the Court that:
(a) paragraphs (4)(a) to (c) apply to the proceeding; and
(b) the service was permitted by:
(i) if a convention applies—the convention; or
(ii) if the Hague Convention applies—the Hague Convention; or
(iii) in any other case—the law of the foreign country; and
(c) there is a sufficient explanation for the failure to apply for leave.
- This Court has jurisdiction to hear and determine an application to enforce a foreign arbitral award under s 8 of the IAA (see s 8(1) and s 8(3)). Therefore, in this case, Sanum has satisfied the requirement as to jurisdiction specified in r 10.43(4)(a) FCR.
- Sanum relies upon Item 10 in the table in r 10.42 FCR as the basis for its having met the requirement specified in r 10.43(4)(b) FCR that, before leave to serve process outside Australia is granted, the Court must be satisfied that the proceeding is of a kind mentioned in r 10.42 FCR. It was common ground between Sanum and the respondents that this proceeding falls within the kind of proceeding described in Item 10. I note in passing that Sanum may also have been able to rely upon Item 15 in the table in r 10.42 FCR. So, Sanum has also satisfied r 10.43(4)(b) FCR.
- In the present case, Sanum contends that the service of the OA and the supporting affidavits of Mr Jordahl upon the respondents in Laos actually undertaken by it on 16 February 2017 (ie by pre-paid ordinary post and by email) was valid for the purposes of this proceeding because the Court gave leave for such service to be effected under subr (2) of r 10.43 FCR before the OA and supporting affidavits were served (r 10.43(1)(a)) and because, as at 8 February 2017, it met the requirements of subr (2) of r 10.43 FCR in that the method of service which it had chosen was in accordance with the law of Laos. Sanum did not rely upon either of the other bases referred to in subr (2) of r 10.43 FCR viz service in accordance with a convention (as defined in r 10.41 FCR) or service in accordance with the Hague Convention. Sanum accepted that there was no applicable convention (as defined in r 10.41 FCR) that would support the method of service of the OA and supporting affidavits upon the respondents in Laos which it had chosen and also accepted, as was fact, that Laos was not a signatory to the Hague Convention.
- Sanum’s application for leave to serve the OA and supporting affidavits upon the respondents in Laos was supported by the two affidavits of Mr Jordahl which, when read together, on their face, satisfied the requirements specified in r 10.43(3) FCR. In addition, as is apparent from the reasons which I gave on 8 February 2017 when granting leave, I was satisfied at that time that Sanum had a prima facie case for all of the relief claimed by it in this proceeding. For these reasons, Order 1 made by me on 8 February 2017 was regularly obtained and was valid until set aside or discharged.
- Rule 13.01 FCR provides as follows:
13.01 Setting aside originating application etc
(1) A respondent may apply to the Court for an order:
(a) setting aside an originating application; or
(b) setting aside the service of an originating application on the respondent; or
(c) declaring that an originating application has not been duly served on the respondent; or
(d) discharging any order giving leave to serve an originating application outside Australia or confirming service of an originating application outside Australia.
Note: Rule 10.43 deals with the procedures for serving originating applications outside of Australia.
(2) If an order under paragraph (1)(b) or (c) is sought, the application must be accompanied by an affidavit stating:
(a) the date on which the originating application was served on the respondent; and
(b) details of the service.
(3) A respondent applying for an order under subrule (1) must file the interlocutory application and affidavit at the same time that the respondent files a notice of address for service.
- There is no doubt that the Court has jurisdiction in this proceeding (as to which, see s 8(3) of the IAA, r 10.42 FCR, Items 10 and 15 and r 10.43(4)(a) FCR) nor is there any doubt that the proceeding is of a kind mentioned in r 10.42. The principal issues arising for determination are:
(a) Whether service, as effected, was permitted by and in accordance with the law of Laos;
(b) Whether Sanum had established a prima facie case for all or any of the relief claimed by it in the OA (as to which, see r 10.43(4)(c)); and
(c) If service, as effected, was invalid, whether Sanum should be granted relief pursuant to r 10.48 FCR.
- In the present case, the respondents rely upon r 13.01(1)(c) and (d) FCR as the source of the Court’s power to hold that service of the OA and the supporting affidavits, as effected, was invalid. In doing so, they do not contend that I was misled by Sanum when I granted leave to it to serve the OA and the supporting affidavits upon the respondents in Laos or that Sanum was guilty of some material failure to disclose or misrepresentation. The respondents’ case pursuant to r 13.01(d) FCR for discharging Order 1 made by me on 8 February 2017 rests upon the proposition that Sanum had not then established and could not then or at all establish a prima facie case for any of the relief which it claimed in this proceeding as required by r 10.43(4)(c) FCR. The respondents’ case in support of the declaration which they seek pursuant to r 13.01(1)(c) FCR is based upon the same alleged defect concerning Sanum’s failure to establish a prima facie case as well as upon the proposition that service, as effected, was not permitted by nor in accordance with the law of Laos.
- As to the prima facie case requirement, in Israel Discount Bank Limited v ACN 078 272 867 Pty Ltd (in liq) (formerly Advance Finances Pty Ltd)  FCAFC 90 at , the Full Court recently said:
The primary judge set out the applicable principles regarding the prima facie case requirement in r 10.43(4)(c) of the Federal Court Rules at - of the Reasons, referring to cases including Morris v McConaghy Australia Pty Ltd  FCA 435 at -  per Rares J; Australian Competition and Consumer Commission v Yellow Page Marketing BV  FCA 1218 at  per Gordon J; and Australian Competition and Consumer Commission v April International Marketing Services Australia Pty Ltd (No 6)  FCA 704; (2010) 270 ALR 504 at  per Bennett J. In Morris, Rares J quoted from the judgment of the Full Court of this Court in Ho v Akai Pty Ltd (in liq)  FCAFC 159; (2006) 247 FCR 205 (Ho v Akai) at , where the Full Court said that “a prima facie case for relief is made out if, on the material before the court, inferences are open which, if translated into findings of fact, would support the relief claimed”. It was sufficient for the plaintiffs to establish a prima facie case in relation to either the Conveyancing Act claim or the Corporations Act claim: Reasons at , citing Bell Group Ltd (in liq) v Westpac Banking Corporation (1996) 20 ACSR 760; Cell Tech Communications Pty Ltd v Nokia Mobile Phones (UK) Ltd (1995) 58 FCR 365(Cell Tech) at 373.
- In the same case at first instance, (ACN 078 272 867 Pty Ltd (in liq) (formerly Advance Finances Pty Ltd) v Binetter, in the matter of ACN 078 272 867 Pty Ltd (in liq) (formerly Advance Finances Pty Ltd)  FCA 952), the primary judge (Lee J), at –, summarised the relevant principles in the following terms:
The principles are well established and have been very recently summarised by Rares J in Morris v McConaghy Australia Pty Ltd  FCA 435 at -  as follows:
In Ho v Akai Pty Ltd (In Liq)  FCAFC 159; (2006) 247 FCR 205 at 208 , Finn, Weinberg and Rares JJ said:
As has been observed on many occasions, the prima facie case requirement has to be met at the outset, usually on an ex parte basis, and without the advantage of discovery and other procedural aids to the making out of a case: see eg Merpro Montassa Ltd v Conoco Specialty Products Inc  FCA 70; (1991) 28 FCR 387 at 390. It “should not call for a substantial inquiry”: WSGAL Pty Ltd v Trade Practices Commission  FCA 510; (1992) 39 FCR 472 at 476; see also Sydbank Soenderjylland A/S v Bannerton Holdings Pty Ltd FCA 1224; (1996) 68 FCR 539 at 549. For present purposes it is sufficient to say that a prima facie case for relief is made out if, on the material before the court, inferences are open which, if translated into findings of fact, would support the relief claimed: Western Australia v Vetter Trittler Pty Ltd (in liq) (1991) 30 FCR 102 at 110. Or, to put the matter more prosaically as Lee J did in Century Insurance Ltd (in prov liq) v New Zealand Guardian Trust Ltd  FCA 376:
What the Court must determine is whether the case made out on the material presented shows that a controversy exists between the parties that warrants the use of the Court’s processes to resolve it and whether causing a proposed respondent to be involved in litigation in the Court in Australia is justified.
The requirement of r 10.43(4)(c), that there be a prima facie case for all or any of the relief sought, will be satisfied if the applicant makes out a prima facie case, to the standard referred to above, in respect of any one of the causes of action for which relief is sought: Ho 247 FCR at 215 to 216  applying Bray v F Hoffman-La Roche Ltd  FCAFC 153; (2003) 130 FCR 317 in respect of an analogue of r 10.43(4)(c).
The requirement has been described as “not particularly onerous”: see Australian Competition and Consumer Commission v Yellow Page Marketing BV  FCA 1218 at per Gordon J. It was observed of a predecessor provision by Bennett J in Australian Competition and Consumer Commission v April International Marketing Services Australia Pty Ltd (No 6)  FCA 704; (2010) 270 ALR 504 at 507 :
Establishing a prima facie case for the relief claimed…should not call for a substantial inquiry. A prima facie case is made out where, upon a broad examination rather than an intense scrutiny of the material before the court, inferences are shown to be open which, if translated into findings of fact, would support the relief claimed: Western Australia v Vetter Trittler Pty Ltd (in liq) (rec and mgr apptd) (1991) 30 FCR 102 at 110; 4 ACSR 795 at 802–3 per French J; Sydbank Soenderjylland (A/S) v Bannerton Holdings Pty Ltd  FCA 1224;(1996) 68 FCR 539 at 549;  FCA 1224; 149 ALR 134 at 142–3; the Full Court in F Hoffman-La Roche at  and – per Carr J.
Like the former rule (O 9, r 7), it was common ground that FCR 13.01 requires the conduct of a rehearing of the original decision to grant leave, taking into account any additional material put to the Court on the later application: Tycoon Holdings Ltd v Trencor Jetco Inc FCA 25; (1992) 34 FCR 31 at 33; Bray v F Hoffman-La Roche Ltd  FCAFC 153;(2003) 130 FCR 317 at 332 ; Australian Competition and Consumer Commission v Prysmian Cavi E Sistemi Energia SRL (formerly Pirelli Cavi E Sistemi Energia SPA) (No 4)  FCA 1323; (2012) 298 ALR 251 at 258 . In this regard, it was uncontroversial that it was open to the plaintiffs, on the hearing of the Bank’s inter partes application to set aside service, to adduce additional evidence to that put before Foster J on the ex parteapplication: WSGAL Pty Limited v Trade Practices Commission  FCA 510; (1992) 39 FCR 472; Costa Vraca Pty Ltd v Bell Regal Pty Ltd  FCAFC 305.
Further, in the context of applications under FCR 13.01, where a prima facie case for relief is established, it was accepted that the Court would not set aside service merely because the case for relief did not conform precisely to the words of the statement of claim. This makes sense, because in this way, applications such as the present do not provide a mechanism for some form of collateral attack on the pleadings: Cell Tech Communications Pty Ltd v Nokia Mobile Phones (UK) Ltd (1995) 58 FCR 365 at 373-374.
It follows in the present circumstances that a sufficient prima facie case will be established if such a case is made out in relation to either the Conveyancing Act Claim or the Corporations Act Claim: see Bell Group Ltd (in liq) v Westpac Banking Corporation (1996) 20 ACSR 760; Cell Tech at 373.
- I propose to apply these principles when considering the question of whether Sanum has established a prima facie case for some or all of the relief claimed by it in the OA, as required by r 10.43(4)(c) FCR.
- The onus of establishing that it has a prima facie case to the requisite standard rests upon Sanum as the claimant for final relief. What may be required in any particular case to discharge that onus will depend upon (inter alia) the nature of the claims for final relief made by the applicant and the requirements of the substantive law underpinning the causes of action relied upon in support of those claims for relief.
- If an applicant ultimately fails to establish that she has a prima facie case for some or all of the relief claimed by her in the proceeding, then leave to serve the originating process outside Australia must be refused or, if leave has already been granted but is subsequently being challenged by the respondent, the order granting leave to serve the relevant process outside Australia should be discharged and/or service should be set aside. This would be so whether or not the method of service chosen by the plaintiff was permitted by and in accordance with the law of the foreign country where service is to be effected. That is, if an applicant fails to establish that she has a prima facie case to the requisite standard, the challenged service will not be valid.
- The content of the law of a foreign country for the purposes of proceedings in this Court is a question of fact. Commonly, parties adduce evidence before the Court from a suitably qualified expert as to the content of the relevant foreign law. This was the approach taken in the present case, although the weight to be accorded to the expert testimony of the witnesses called by the parties here has been influenced by the circumstance that neither party cross-examined the other party’s expert witness or witnesses and by the additional circumstance that none of the expert witnesses addressed the possibility that the relevant law as to the service of foreign court initiating process in Laos was, in fact, contained in a treaty entered into between the Republic of France and the United Kingdom on 2 February 1922 styled the Convention between the United Kingdom and France respecting Legal Proceedings in Civil and Commercial Matters (1922 Treaty).
- The onus of proving the relevant law of Laos rests upon Sanum. If it is unable to prove the content of that law or if the requirements of that law, as proven before me, do not permit the service of the OA and supporting affidavits by pre-paid ordinary post or by email despatched by the lawyers for the plaintiff/applicant, then Sanum will have failed to prove that service of that process as effected was valid service. In that event, subject to Sanum’s application for relief under r 10.48 FCR, the respondents would be entitled to the declaration pursuant to r 13.01(c) FCR which they claim and would also be entitled to an order discharging Order 1 made by me on 8 February 2017 even if Sanum has established a prima facie case for the relief claimed by it in the OA within the meaning of r 10.43(4)(c) FCR. If, however, I grant to Sanum the relief which it claims pursuant to r 10.48 FCR then, provided that it has established the requisite prima facie case, service as effected will be deemed to be valid. Of course, r 10.48 FCR is only engaged when the Court is satisfied that it is not practicable to serve the document in question on the relevant person in a foreign country in accordance with one or other of the lawful methods allowed by the law of that foreign country and the serving party proves that the document has been brought to the attention of the person served.
- The expression “not practicable” does not have the same meaning as the word “impractical”. Rule 10.48 FCR was inserted into the Rules of Court when the prior rules were replaced by the Federal Court Rules 2011. The terms of r 10.48 mirror the language of r 10.23 FCR. The expression “not practicable” is found not only in r 10.23 and in r 10.48 but also in r 10.24 which deals with substituted service of Court documents within Australia. The authorities which explain the meaning of the expression in r 10.24 FCR are apt to be applied to explain the expression in r 10.48. The Court should construe the expression in the same way for the purposes of all three rules—rr 10.23, 10.24 and 10.48. I shall discuss those authorities and the meaning of the expression “not practicable” when I consider Sanum’s r 10.48 IA below.
- Paragraph 2.4 of the Court’s Overseas Service and Evidence Practice Note (GPN-OSE) is in the following terms:
2.4 A party applying for leave to serve an originating process or other court documents on a person in a country other than Australia under Division 10.4 of the Federal Court Rules, or for an order confirming service already undertaken, should support the application with an affidavit (as required by rr 10.43(3) and 10.44(2) of the Federal Court Rules) and include information obtained from the Australian Government Attorney-General’s Department in relation to the appropriate method of transmitting documents for service in that country, including whether documents:
(a) should be transmitted in accordance with an international agreement or arrangement, and the details of that agreement or arrangement (see Division 10.6 of the Federal Court Rules with respect to service under the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters;
(b) should be transmitted for service via the diplomatic channel (see Division 10.5 of the Federal Court Rules); or
(c) may be transmitted for service by a private agent within the territory of that country.
Such information may be obtained from the Private International Law Section of the website of the Attorney-General’s Department.
- In the present case, Sanum did not comply with par 2.4 of Practice Note GPN-OSE when it made its ex parteapplication for leave to serve the OA and supporting affidavits upon the respondents in Laos on 8 February 2017. However, its solicitor subsequently made appropriate enquiries of the Attorney-General’s Department and was informed by an officer of that Department that the Department had not come across any cases involving the service or attempted service of Australian Court documents in Laos.
SERVICE OF FOREIGN LEGAL PROCESS IN LAOS
- Determining the law of Laos as to the service of foreign legal process in Laos is treated in this Court as a question of fact. The parties sought to prove the relevant facts in two ways: First, by calling expert evidence; and, second, by addressing questions raised by the Court as to the application of the 1922 Treaty.
The 1922 Treaty
- On 2 February 1922, the United Kingdom and the Republic of France signed the 1922 Treaty. Both countries subsequently ratified the 1922 Treaty and ratifications were exchanged in London on 2 May 1922.
- The English version of Arts 1, 2, 3 and 4 provided as follows:
This Convention applies only to civil and commercial matters.
Transmission of Judicial and Extra-judicial Documents
In cases where the law of one of the High Contracting Parties permits documents to be served in the territory of the other, such service may be effected in either of the following ways indicated in Articles 3 and 4.
(a.) The request for service is addressed:
In France, by the British Consul to the “Procureur de la République” within whose jurisdiction the recipient of the document is;
In England, by the Consul-General of France in London to the Senior Master of the Supreme Court of Judicature in England.
(b.) The request is drawn up in the language of the authority applied to. It contains the name of the authority from whom the document enclosed emanates, the names and descriptions of the parties, and the address of the recipient. It is accompanied by the original and two copies of the document in question in the language of the State making the request, and by a translation certified by the consular authority of that State, and a copy of such translation.
(c.) The service is effected by the delivery of the original or a copy of the document, as indicated in the request, and the copy of the translation, to the recipient in person, in England, by a process server; in France, by a “huissier” appointed by the “Procureur de la République”.
(d.) The judicial authority applied to transmits to the consular authority making the request a certificate establishing the fact and the date of the service in person, or indicating the reasons for which it has not been possible to effect it.
(e.) When the document transmitted to the “Procureur de la République” is intended for a person resident in another jurisdiction, this magistrate will immediately notify the consular authority making the request, and will, of his own motion, transmit the document to the “Procureur de la République” who is competent.
(f.) No State fees of any nature whatever shall be charged in respect of the service. Nevertheless, the State making the request must repay to the State applied to any charges which are payable under the local law to the persons employed to effect service. These charges are calculated in accordance with the tariff in force in the State applied to. Repayment of these charges is claimed by the judicial authority applied to from the consular authority making the request when transmitting the certificate provided for in paragraph (d).
(g.) The execution of a request for service can only be refused if the State in whose territory it is to be effected considers it such as to compromise its sovereignty or safety.
(h.) Any difficulties which may arise in respect of the request shall be settled through the diplomatic channel.
The service of judicial or extrajudicial documents may also be made directly and without the application of any compulsion through the medium and under the responsibility of the consular authority of each of the High Contracting Powers in the territory of the other.
- Therefore, under the 1922 Treaty, two different methods of service of documents were permitted.
- The first method was by the Consul of the country whose court or litigant wanted to effect service sending a request for service to the official specified in Art 3 of the Treaty as the appropriate person to receive such a request. Such a request had to comply with the more detailed requirements of Art 3 of the 1922 Treaty. The documents were then to be served by a process server or huissier (as appropriate).
- The second method involved service directly upon the person or entity to be served by or under the supervision of the consular authority of the serving country in the territory of the other country (Art 4).
- After Art 9, the following text appeared under the heading Final Provisions:
(a.) The present Convention shall come into force two months after the date on which ratifications are exchanged and shall remain in force for three years after its coming into force. In case neither of the High Contracting Parties shall have given notice to the other six months before the expiration of the said period of its intention to terminate the Convention, it shall remain in force until the expiration of six months from the day on which either of the High Contracting Parties shall have given such notice.
(b.) This Convention shall not apply to any of the Dominions, Colonies, Possessions or Protectorates of the two High Contracting Parties, but either High Contracting Party may at any time extend, by a simple notification, this Convention to any such Dominion, Colony, Possession or Protectorate.
Such notification shall state the date on which the Convention shall come into force, the authorities to whom judicial and extra-judicial acts and “commissions rogatoires” are to be transmitted, and the language in which communications and translations are to be made.
Each of the High Contracting Parties may, at any time after the expiry of three years from the coming into force of the extension of this Convention to any of its Dominions, Colonies, Possessions or Protectorates, terminate such extension on giving six months’ previous notice.
(c.) This Convention shall also not apply to Scotland or Ireland; but his Britannic Majesty shall have the right to extend the Convention to Scotland or Ireland on the conditions set forth in the preceding paragraph in respect of Dominions, Colonies, Possessions or Protectorates.
In witness whereof the Undersigned have signed the present Convention and have affixed thereto their seals.
Done in duplicate at London, the 2nd day of February, 1922.
- The High Contracting Parties referred to in the 1922 Treaty were the UK and France. Initially, the Treaty was not to apply to the Dominions, Colonies, Possessions or Protectorates of the High Contracting Parties but each of those parties had the right to extend the Treaty to such entities in accordance with Final Provision (b).
- In 1922, Australia was a Dominion of the UK and French Indochina was a colony or possession of France. At that time, French Indochina comprised modern Vietnam, Laos and Cambodia.
- On 8 March 1928, the UK gave a notification under par (b) of the Final Provisions in the 1922 Treaty that the UK was “extending the Convention [referring to the 1922 Treaty] to the Commonwealth of Australia”. France accepted that notification on 22 May 1928 and it became effective on 22 June 1928.
- In similar fashion, France extended the 1922 Treaty to French Indochina. This extension became effective from 1 January 1933.
- Laos became independent from France in 1953.
- On 22 October 1953, the Kingdom of Laos and France signed a treaty called: Treaty of Friendship and Association concluded between France and Laos at Paris on 22 October 1953 (Treaty of Friendship).
- In a note dated 15 March 1961, the Laotian Ministry of Foreign Affairs informed the UK Embassy in Vientiane that Laos considered that the 1922 Treaty was still in force as between the UK and the Kingdom of Laos. Article 1 of the Treaty of Friendship provided that:
The French Republic recognises and declares that the Kingdom of Laos is a fully independent and sovereign State. Consequently it succeeds the French Republic in all the rights and obligations deriving from all international treaties and special conventions contracted by France prior to the present convention on behalf of Laos or French Indo-China.
- The UK government was willing to regard the 1922 Treaty as continuing to apply between the UK and the Kingdom of Laos but wished it to be understood by the Laotian government that, in the opinion of the UK government, the 1922 Treaty continued in force, not by virtue of the Treaty of Friendship, but because the UK government and the government of Laos had expressly agreed that the 1922 Treaty should continue in force as between the UK and Laos. That agreement was documented in an exchange of notes as between the Government of Laos and the UK Government which took place in the period between 23 August 1962 and 26 December 1962. Of particular importance in this regard were the notes from the UK Ministry of Foreign Affairs to the Laotian Ministry of Foreign Affairs dated 17 December 1962 and the latter’s response dated 26 December 1962. The note from the government of Laos dated 26 December 1962 contained a statement to the effect that the earlier notes of 23 August 1962 and 17 December 1962 constituted an exchange of notes confirming a formal agreement between the two governments to the effect that the 1922 Treaty continued to apply as between those two governments.
- According to the United Nations Legislative Series, Materials on Succession of States (United Nations, New York, 1967) at pp 188–189:
Her Majesty’s Government did not consider that there was any automatic succession by newly independent territories to the rights and obligations under civil procedure conventions or treaties of a similar nature entered into by their mother country on their behalf before independence. Any agreement between the mother country and the newly independent State to the effect that the independent State should succeed to the rights and duties under treaties entered into by the mother country on their behalf was binding upon the Contracting Parties to that agreement, but not necessarily on States which had entered into Agreements with the mother country in respect of the territory which had now become independent. Consequently there must be some act after independence of “novation” between the newly independent State and the other Contracting Party.
- In light of the above matters, there seems little doubt, and I find, that, after 26 December 1962, the 1922 Treaty continued to apply as between the UK and the Kingdom of Laos. It does not matter for present purposes whether the 1922 Treaty so applied because of the application of the doctrine of treaty succession or because of the novation effected by the exchange of notes in late 1962.
- The fact that the 1922 Treaty continued to apply as between the UK and Laos after Laos achieved independence says nothing about whether that treaty continued to apply as between Australia and Laos after Laos became independent of France. For this reason, the position as between Australia and Laos requires further consideration.
- It seems to me that, throughout the period from 1 January 1933 to the date when Laos became independent from France in 1953, the 1922 Treaty applied as between Australia and Laos. This is because the government of the UK had extended the operation of that Treaty to the Commonwealth of Australia in 1928 and the government of France had done likewise in respect of its colonies in Indochina which included the colony which subsequently became the Kingdom of Laos in 1953. Australia seems to have accepted that position notwithstanding certain changes in that period in the constitutional arrangements between Australia and the UK.
- In addition, as between France and the Kingdom of Laos, it was agreed in the Treaty of Friendship that Laos would continue to have the benefit of, but would remain subject to the burdens in, the 1922 Treaty.
- But, what was the position as between Australia and Laos after Laos secured its independence from France? Was the 1922 Treaty binding as between Laos and Australia after 1953? Did the establishment of the Lao PDR in 1975 alter the position?
- At the heart of these issues are several further questions, namely whether, in order for the 1922 Treaty to continue to bind Australia and Laos according to international law, there must be an express novation between the government of Australia and the government of Laos of the 1922 Treaty following Laos achieving independence from France in 1953 or following the establishment of the Lao PDR in 1975 and, if so, whether, as between those two countries, there ever was such a novation or, whether, by application of the doctrine of succession, the 1922 Treaty continued to apply whether or not there was ever an express novation entered into.
- The learned author of Aust A, Modern Treaty Law and Practice (3rd ed, Cambridge University Press, 2013), at 324–325, said:
Former colonies and other overseas territories
Although since the Second World War some hundred colonies or other overseas territories, such as protectorates, protected states and trust territories, have attained their independence, the practice of newly independent states has not been consistent. It is therefore not possible to promulgate a set of rules of customary international law on state succession applicable in such situations. The most one can do is to summarise the main approaches which have been taken.
There are two theoretical starting points. The first is the nineteenth century theory of universal succession, which persisted up to the 1960s. According to this, a new state inherited all the treaty rights and obligations of the former colonial power insofar as they had been applicable to the territory before independence. This approach was reflected in the devolution agreements entered into by Iraq in 1931 and by some former Asian colonies in the 1940s and 1950s [UK-Iraq (UKTS (1931) 15); Netherlands-Indonesia 1949 (69 UNTS 266 (No. 3)); France-Vietnam 1954 (161 BFSP 649); UK-Malaya 1957 (163 BFSP 46)]. From 1955, all former British colonies in West Africa, except for the Gambia, concluded devolution agreements with the United Kingdom. These provided that, as from the date of independence, all obligations and responsibilities of the United Kingdom that arose from ‘any valid international instrument’ would be assumed by the new state, ‘insofar as such instruments may be held to have application’ to it; and the rights and benefits previously enjoyed by the United Kingdom, by virtue of the application of such instruments to the former colony, would be enjoyed by the new state. Although these agreements created a presumption that a treaty that could apply to the new state would apply to it, they naturally left many questions unanswered [Maluwa, ‘Succession to Treaties in Post-Independence Africa’, p.804]. A devolution agreement could not, of course, bind a third state that is party to a devolved treaty (and especially a bilateral treaty) unless it consented, expressly or tacitly. Nevertheless, a devolution agreement was useful in serving as a formal and public statement of the general attitude of the new state towards its treaty obligations.
Although they did not enter into devolution agreements, most former French colonies in Africa regarded themselves as successors to pre-independence treaties, and made declarations to that effect that they notified to the UN Secretary-General [For the Malagasy Republic’s declaration, see UN Doc. A/CN. 4/150, p. 31, para. 87; and Maluwa, ‘Succession to Treaties in Post-Independence Africa’, pp. 792-3].
The other starting point is the so-called clean slate doctrine, under which the new state is free to pick and choose the treaties to which it will succeed. This approach was followed most famously by the United States when it gained its independence from the United Kingdom in the late eighteenth century. However, even when the clean-slate doctrine is applied, treaties that concern territorial rights, such as boundary treaties and those granting rights of navigation or passage, will usually bind the new state, for obvious reasons.
(Emphasis in original)
See also the discussion in Ch 16 of The Oxford Guide to Treaties (Hollis DB (ed), Oxford University Press, 2012) esp at pp 396–402.
- I do not regard the establishment of the Lao PDR in 1975 as altering the post-independence position. This was merely a change of government and perhaps a change in the type of government but not a change in the international personality of the state.
- Here, France and Laos entered into a devolution agreement viz the Treaty of Friendship. This agreement was typical of the devolution agreements which many new states entered into with their former colonial power. Such an agreement cannot bind a third state that is party to a devolved treaty unless that third state consented, expressly or tacitly, to the devolution. This is a reflection of the international law principle of res inter alios acta. Nevertheless, a devolution agreement is useful in serving as a formal and public statement of the general attitude of the new state towards its treaty obligations. Devolution agreements may be construed as offers of novation by the new states which may be accepted by the third parties, either expressly or impliedly, by acting upon such offer.
- There was no evidence before me which proved or supported a finding that, at some time after France and Laos entered into the Treaty of Friendship on 22 October 1953, Australia and Laos entered into any novation of the 1922 Treaty or entered into any separate bilateral treaty or other arrangement which stipulated the methods which Laos would accept as lawful service of Australian court process within its borders.
- As at December 2015 and, I infer, at all times between 22 October 1953 and December 2015, the website of the Attorney-General of the Commonwealth contained a statement to the effect that the 1922 Treaty continued to apply as between Australia and Laos by succession from France. On that website, under the heading “Australia’s bilateral treaties with other countries” in respect of judicial assistance, the following text appeared:
Australia is also party to bilateral service conventions with the following countries (as they were at the time they entered into the conventions);
Austria, Belgium, Denmark, Czechoslovakia, Estonia, Finland, France, Germany, Greece, Hungary, Iraq, Italy, Lithuania, Netherlands, Norway, Poland, Portugal, Spain, Sweden, Turkey.
These bilateral treaties were established as a result of the United Kingdom extending the Convention between the United Kingdom and Germany regarding Legal Proceedings in Civil and Commercial Matters to include Australia. Please note many of these bilateral arrangements were concluded during the 1920s and 1930s. Many countries extended their obligations under this bilateral convention to include their external territories at the time. Even though those territories are now independent states, in many instances the Convention continues in force over the independent states:
|A bilateral service convention between Australia and||Applies by succession from:||To the following countries:|
|France||France||… Laos* …|
* Countries which are not party to the Hague Service Convention as at November 2015.
- The Attorney-General’s website no longer displays the text which I have extracted at  above and no longer contains any statement to the effect that service of Australian court process in Laos is governed by the 1922 Treaty or by some other bilateral treaty.
- I do not think that the fact sheet displayed on the Attorney-General’s website to which I have referred at  above can be used as a basis for concluding that, at some point in time, Australia tacitly accepted the continued operation of the 1922 Treaty as between it and Laos or that the official position of the Australian Government has ever been that that treaty continued to apply as between it and Laos after Laos became independent by the application of the doctrine of succession. Much more evidence would be required for those propositions to be established. For the above reasons, I am not prepared to find that Australia has tacitly or otherwise accepted that the 1922 Treaty continues to bind both it and Laos or that the official view of the Australian Government is that the 1922 Treaty continues to bind it and Laos by reason of the doctrine of treaty succession.
- Furthermore, notwithstanding that it appears that Laos has never formally withdrawn from the 1922 Treaty, the present Government of Laos appears to take the view that it is no longer bound by the 1922 Treaty, at least as far as Australia is concerned. Although a party to that treaty may withdraw from it, it can only do so if it gives notice of its withdrawal in accordance with Art 9(a) of the treaty. There was no evidence before me that Laos has ever given such a notice.
- After considering all of the circumstances referred to at – above, I am not satisfied on the evidence before me that the 1922 Treaty continues to apply as between Australia and Laos. There is a conflict in the relevant public international authorities as to whether the doctrine of universal treaty succession in respect of treaties entered into by former colonial powers should be applied in every case at the present time or whether the clean slate approach is better suited to such circumstances. In addition, there is no basis for any finding that either Australia or Laos otherwise agreed, expressly or tacitly, that the 1922 Treaty should continue to apply post 1953 when Laos became independent.
- The conclusion which I have expressed at  above also means that, when I come to consider Sanum’s r 10.48 FCR IA, I must proceed upon the basis that, for the purposes of this case, the 1922 Treaty has not been proven to govern the service of Australian court process in Laos. I note that, in any event, the methods of service chosen by Sanum to serve the OA and the two supporting affidavits of Mr Jordahl upon the respondents in Laos were not compliant with either Art 3 or Art 4 of the 1922 Treaty. For that reason, even if the 1922 Treaty had continued application in February 2017, it is clear that Sanum did not serve the relevant process in accordance with the requirements of that treaty.
The Expert Evidence
- At the hearing of Sanum’s ex parte application for leave to serve this proceeding outside Australia and in Laos, Sanum relied, in part, upon the hearsay evidence of Mr Jordahl, the President of Sanum. Relevantly, that evidence was in the following terms:
I am advised by Mr Jorge Menezes, the Applicant’s Macau counsel who has extensively studied Lao law and appeared in Lao courts that, in accordance with the Lao law on Civil Procedure, service of the Originating Application and supporting affidavit may be effected on the Respondents in Laos by way of post or by telecommunication, including by email and facsimile transmission.
- That evidence was not led by Sanum at the contested hearing which took place on 20 July 2017.
- In addition, at the ex parte hearing, Mr Jordahl said that Laos is not a signatory to the Hague Convention. By the time of the later hearings before me, that statement was accepted as correct by all parties.
- Sanum also read an affidavit affirmed by Jorge Menezes on 17 May 2017. Mr Menezes is an Attorney who practises in the Macau Special Administrative Region of the People’s Republic of China. He said that he had also practised law in Laos although not formally as a lawyer but as a party representative pursuant to Lao law. Mr Menezes’ evidence was brought forward in response to two affidavits read and relied upon by the respondents, namely, the affidavit of Sithat Xaysoulivong affirmed on 22 March 2017 and the affidavit of Viengvilay Thiengchanhxay affirmed on 19 April 2017. Mr Menezes is also not independent of Sanum having represented it in the past. In particular, he was one of the Counsel for Sanum at the arbitration hearing which resulted in the Award.
- At pars 10 and 11 of his affidavit, under the heading “Executive Summary”, Mr Menezes said the following:
In my opinion, the position under Lao law is as follows:
(a) There are no express statues [sic] or rules in Lao law governing the service of Foreign Court Documents in Laos;
(b) Nonetheless, this gap in the law can and should be filled by the rules contained in Part VIII of the LLCP which governs the service of Lao domestic processes and other Court documents relating to those Lao domestic processes (together, “Domestic Court Documents”) in Laos, to the extent that those rules are applicable by analogy;
(c) Part VIII of the LLCP specifically provides for inter alia service of Domestic Court Documents by post and by telecommunication including email; and
(d) Part XVII of the LLCP does not and cannot apply to the service of Foreign Court Documents in Laos.
On the foregoing basis, my opinion is that:
(a) the Applicant has validly effected service on each of the Respondents in Laos by posting the Australian Court Documents to the Respondents at the addresses mentioned in paragraph 9 above; and
(b) quite separate to (a), the Applicant has also validly effected service on each of the Respondents in Laos by sending the Australian Court Documents to the Respondents at the email address mentioned in paragraph 9 above.
- In the balance of his affidavit, Mr Menezes explained his reasons for reaching the conclusions which he had expressed in pars 10 and 11.
- Mr Menezes’ reasons may be summarised as follows:
(a) There are no express statutory provisions or rules which govern the service of foreign court documents in Laos. There is a gap in Lao law regarding the service of such documents.
(b) Laos is not a signatory to the Hague Convention.
(c) Lao Court judgments and decisions are not published in Laos and trials in Lao Courts are not conducted in public. For these reasons, there is no publicly available body of Lao case law which could provide guidance as to the appropriate principles.
(d) Laos has a codified legal system which is modelled on the French legal system. This means that the Lao Courts, when applying Lao law, are obliged to reason “from the law”and fill any gaps using French principles of interpretation seeking, in particular, to discern and apply the purpose of the law. This is known as the teleological interpretation in Continental legal systems. This approach is supported by Article 12 of the Amended Law on the People’s Courts of 2009 (ALPC) which provides inter alia:
In its adjudication, a court must refer to and comply with the laws of the Lao PDR. In the event that any matter is not determined by the laws, the court must make a decision upon the facts and such decision must be in accordance with fairness and court precedents. …
(e) In Continental legal systems, gaps are regulated by the rules applicable to analogous situations. Reasoning by analogy should be used to fill the gap in the law on service of foreign court documents in Laos. In Mr Menezes’ view, the rules best positioned to serve as an analogy and to fill the gap are the ones covering service of domestic court documents mentioned in Arts 142 to 154 of the Amended Lao Law on Civil Procedure dated 4 July 2012 (LLCP). Article 146 authorises the service of domestic court process through post or telecommunication.
(f) No appropriate analogy can be drawn from Pt XVII of the LLCP.
- Mr Menezes then embarked upon a detailed rebuttal of the evidence led by the respondents in support of the proposition that Pt XVII of the LLCP governed the circumstances of the present case. The respondents’ expert, Professor Thiengchanhxay, had relied in particular upon Arts 361 to 367 of the LLCP (which are contained in Pt XVII of that instrument) in order to support his opinions.
- Sanum also read and relied upon an affidavit from Khamsouk Phommarath affirmed on 18 May 2017. Mr Phommarath was also not independent of Sanum. His father had acted for Sanum in certain proceedings in Laos.
- Mr Phommarath was also of the opinion that Pt XVII of the LLCP did not assist in determining the law of Laos as to the service in Laos of foreign court process and disagreed with Professor Thiengchanhxay’s views that Pt XVII of the LLCP did so apply. He said that Pt XVII was confined to the service of domestic legal process in Laos. He said that Art 361 was a “dead letter law” ie a provision that is formally in effect but not enforced in practice. Mr Phommarath also considered whether Arts 142 to 154 of the LLCP applied. His view seemed to be that, although those Articles did not apply directly, they provided the best guidance as to the law applicable to the service of foreign legal process in Laos.
- In summary, Mr Phommarath expressed the opinion that, for service of foreign court process in Laos to be considered effective under Lao law, the following must be fulfilled:
(a) There must be assurances that the served person received the documents by reliable means of effecting service, for example, by direct delivery, post, telefax or email.
(b) Direct delivery must be undertaken by Lao Court officers.
(c) When the means of effecting service as outlined in subpar (a) above are not possible, an appropriate announcement should be affixed on relevant places or conveyed through the media.
(d) The method described at subpar (b) above does not apply if the served person was given the opportunity of being served and refused it, declining to co-operate.
(e) Documents served should contain information from which the served person can see the contents of the matter served, his rights and obligations, and the consequences of not acting.
- For their part, the respondents relied upon two affidavits affirmed by Viengvilay Thiengchanhxay on 19 April 2017 and 10 July 2017 respectively. Professor Thiengchanhxay is the Dean of the Faculty of Law and Political Science at the National University of Laos. He oversees the education and training of law students in Lao law. He has over 30 years of experience in this field. He has had wide experience in the practise of law in Laos.
- In the following paragraphs (–), I will endeavour to capture the essence of Professor Thiengchanhxay’s opinions concerning the law of Laos as to the service of foreign court process in that country.
- Lao law is influenced by tradition and the prevailing socio-economic conditions of the country. It is based upon the Master Plan of the Lao Ministry of Justice. Legislation and international treaties that the Lao PDR has ratified are the main sources of law in Laos. Judgments of the Lao courts are not usually published.
- Part XVII of the LLCP governs all proceedings involving claims, orders and decisions from foreign courts, including service of such claims, orders and decisions in Laos. According to Professor Thiengchanhxay, the English version of Art 361 of the LLCP is in the following terms:
Article 361, entitled “Proceedings Involving Foreign Elements”, states:
“Individuals, organisations or enterprises in the Lao People’s Democratic Republic wishing to submit a claim against individuals, organisations or enterprises residing in other countries or individuals, organisations or enterprises in foreign countries wishing to submit a claim against individuals, organisations or enterprises in the Lao People’s Democratic Republic must comply with treaties relating to judicial cooperation. In the event that such treaties do not exist, the claim must be submitted through the Ministry of Foreign Affairs to the concerned authority in the country where the defendant resides for consideration”.
- There are no treaties relating to judicial co-operation between Australia and Laos. For this reason, a claim commenced in Australia against a Lao company or individual must be submitted through the Lao Ministry of Foreign Affairs. The word “claim” in Art 361 of the LLCP extends to claims commenced by foreign entities against Laotian entities, even if the claim is commenced in a jurisdiction outside Laos. Such claims include foreign proceedings to recognise and/or enforce a foreign judgment or arbitral award against a Laotian entity.
- Articles 362 to 367 of the LLCP set out the procedure for acknowledgment of a “decision of a foreign court”. Thus, the service of an order of a foreign court on a Laotian entity must be submitted through the Ministry of Foreign Affairs, the Ministry of Justice, the People’s Supreme Court and the Lao Courts of relevant jurisdiction, even if the proceedings are wholly outside Laos. When the Lao Courts acknowledge the foreign order, it will have the order sent to the relevant respondent or defendant, as the case may be.
- Under the LLCP, the only party authorised to effect service in Laos of foreign court process is the Lao Court and its officers. Private lawyers are not officers of the Lao Court for this purpose.
- In Arts 362 to 367 of the LLCP, a “decision of a foreign court” includes a decision of a foreign arbitral tribunal. It also includes any order or judgment made by a foreign court. It would cover the orders which I made on 8 February 2017.
- The English version of Article 360 of the LLCP provides:
Civil proceedings between the people’s courts of the Lao People’s Democratic Republic and foreign courts must comply with the principles of respect for the independence and territorial sovereignty of states, non interference in the domestic affairs of one another, equality and mutual benefit …
- The service effected by Sanum in Laos on or about 16 February 2017 is defective for the following reasons: First, the documents which were served had not been translated into the Lao language. This is contrary to the provisions at Arts 362 to 364 of the LLCP which expressly provide that documents must be translated into the Lao language and certified for correctness by the Notary Office. Second, the documents were not sent through the Lao Ministry of Foreign Affairs to the Lao Courts. This is contrary to Arts 361 to 363 of the LLCP.
- Concepts of deemed service apply only in respect of the service of domestic court documents. There is no basis upon which the defective service of foreign court process can be cured.
- Articles 142 to 154 of the LLCP apply only to service of domestic court documents. In any event, the service actually effected by Sanum in the present case would not have complied with the requirements of Arts 142 to 154 of the LLCP. This is because service in accordance with those Articles “must be carried out by the court’s officer”. Only the court may effect service through the post or telecommunication (as to which, see Art 148). Thus, the only entities authorised to effect service are the Lao Courts themselves through their officers.
- For all of the above reasons, the service actually effected by Sanum upon the respondents in Laos in February 2017 was ineffective. Professor Thiengchanhxay goes on to address a number of matters relating to the substantive law of contract in Laos. His opinions in respect of these matters are not relevant to the present question.
- In his second affidavit, in addition to endeavouring to rebut the evidence of Mr Phommarath, Professor Thiengchanhxay referred to the website of the Attorney-General of Australia in order to support the proposition that, in circumstances where there are no specific stipulations in the law of the destination state as to service of foreign court process, in circumstances where the destination state is not a party to the Hague Convention and in circumstances where the destination state is not bound by any bilateral treaty with Australia, the following process for the service of foreign court process would usually be followed:
(a) The foreign court documents issued by the foreign court would be passed on to the Foreign Ministry of the issuing country in the destination state.
(b) The issuing state’s Foreign Ministry would then send a request to the Foreign Ministry of the destination state for assistance with service of the process.
(c) The destination state’s Foreign Ministry would then send the request for service, with the foreign court documents, to the relevant court in the destination state.
(d) The relevant court in the destination state would then make an order for service of the foreign court documents in accordance with the law of the destination state.
- In his second affidavit, Professor Thiengchanhxay expressed the opinion that the process which I have summarised at  above is very similar to the procedure set out in Arts 360 to 368 of the LLCP.
- As I have already noted, Professor Thiengchanhxay also said in his second affidavit that there is no provision in Lao law which provides that a failure to serve foreign court documents in accordance with the prescribed procedure may be cured. There is no process of deeming ineffective service to be effective. No so-called duty of co-operation can overcome these problems.
- In the present case, none of the expert witnesses was cross-examined. There was no searching forensic examination of any of the opinions expressed by these witnesses nor were their reasoning processes subjected to any challenge in the courtroom.
- Professor Thiengchanhxay was apparently an independent expert witness while Messrs Menezes and Phommarath could not be so described. In addition, Professor Thiengchanhxay appeared to be well qualified both by education and experience to express the views which he did as to the relevant law of Laos. Messrs Menezes and Phommarath relied more upon their respective practical experience rather than any formal qualifications in respect of the law of Laos.
- Professor Thiengchanhxay expressed the view that, under the law of Laos, in order to be validly served, foreign court process such as the OA and the supporting affidavits of Mr Jordahl had to be translated into the Lao language before being served. He also said that the law of Laos required that such process be submitted to the Ministry of Foreign Affairs of Laos via the Embassy or Consulate of the issuing state in Laos. The relevant documents are required to be accompanied by an appropriately worded request for service which must then be passed on to the relevant court in Laos for consideration by that court. If the court considers it appropriate to authorise that service be effected, that court must then make arrangements for service of the relevant documents upon the Lao defendants by officers of the relevant court. The documents cannot be served by a party’s lawyers or their contractors.
- It can readily be seen that, in the present case, none of the above steps was followed. If I were to accept the evidence of Professor Thiengchanhxay, I would make a finding that service, as effected by Sanum’s Australian lawyers in February 2017, was ineffective because it was not carried out in accordance with the law of Laos.
- Messrs Menezes and Phommarath contended that the provisions of Pt VIII of the LLCP applied to the service of foreign court process in Laos. Professor Thiengchanhxay disagreed with that contention. It does seem to me that Pt VIII (Arts 142–154) apply only to domestic litigation in Laos and were not intended to apply to the service of foreign court process in Laos, directly or indirectly. Also, those provisions seem to proceed upon the basis that service of the relevant process is to be undertaken by officers of the relevant court.
- It is extremely difficult to come to a firm view as to which of the competing contentions advanced by the expert witnesses should be accepted by the Court when those witnesses have not been cross-examined and when the Court has not had an opportunity to ask questions of them. Of course, I am able to read the English text of the relevant articles in the LLCP and it is fair to say that a textual analysis favours the views of Professor Thiengchanhxay over those of Messrs Menezes and Phommarath.
- Even if I were to accept the evidence led by Sanum in relation to the law of Laos as to the service of foreign court process in Laos, Sanum would confront the obvious difficulty that service, as effected by its Australian lawyers in February 2017, did not comply with the requirements of Pt VIII of the LLCP because it was effected by Sanum’s Australian lawyers and not by officers of the appropriate Lao court. For this reason, on any view of matters, service as effected, was ineffective.
- Notwithstanding the difficulties which were presented to the Court by the forensic choices made by the parties in relation to expert evidence, I think that the better view is that the law of Laos as to the service of foreign court process in Laos is more likely than not to be as explained by Professor Thiengchanhxay. Given that I favour the evidence of Professor Thiengchanhxay over that of the other two witnesses and given that the respondents can hardly complain if I proceed upon the basis that the relevant law of Laos was correctly explained by Professor Thiengchanhxay, I propose to consider Sanum’s r 10.48 FCR IA upon the basis that the law is as stated by Professor Thiengchanhxay.
- I now turn to consider Sanum’s prima facie case.
SANUM’S PRIMA FACIE CASE
- In the OA, Sanum claims by way of final relief an order pursuant to s 8(3) of the IAA enforcing the Award against the respondents in Australia and consequential monetary judgments. This Court may only refuse to enforce the Award in the circumstances mentioned in subs (5) and subs (7) of s 8 (see s 8(3A)).
- Pursuant to case management orders made by me, the respondents set out in a Statement of Contentions filed on 19 April 2017 the grounds upon which they proposed to resist enforcement of the Award.
- The respondents advanced four such grounds. Each ground was supported by detailed particulars. The terms of the grounds (omitting the detailed particulars) were as follows:
The second respondent would contend that the Award should not be enforced against him, because, to the extent that the Award is said to have been made pursuant to the Master Agreement dated 30 May 2007, he was not a party to the Master Agreement with the result that, pursuant to s 8(5)(b) of the International Arbitration Act 1974 (Cth) (the Act), “the arbitration agreement is not valid under the law expressed in the agreement to be applicable to it”.
The first, second, and third respondents would contend that the Award should not be enforced against them, because, to the extent that the Award is said to have been made pursuant to the Slot Clubs Joint Venture Agreement dated 6 August 2007, they were not a party to the Slot Clubs Joint Venture Agreement with the result that, pursuant to s 8(5)(b)of the International Arbitration Act 1974 (Cth) (the Act), “the arbitration agreement is not valid under the law expressed in the agreement to be applicable to it”.
The first, second, third and fourth respondents would contend that the Award should not be enforced against them, because, to the extent that the Award is said to have been made pursuant to the Master Agreement, there was no agreement between the applicant and the respondents to submit to arbitration in Singapore to be administered by the Singapore International Arbitration Centre under the Arbitration Rules of the Singapore International Arbitration Centre (SIAC Rules, 5th Edition, 1 April 2013), such that pursuant to s 8(5)(e) of the Act, the “arbitral procedure was not in accordance with the agreement of the parties”.
The fourth respondent and, in the event that Ground 2 above is not upheld, the first, second and third respondents, would contend that the Award should not be enforced against them, because, to the extent that the Award is said to have been in respect of disputes arising from the Slot Clubs Joint Venture Agreement, to which the fourth respondent was a party, there was no dispute arising out of the Slot Clubs Joint Venture Agreement which could be submitted to arbitration in Singapore to be administered by the Singapore International Arbitration Centre under the Arbitration Rules of the Singapore International Arbitration Centre (SIAC Rules, 5th Edition, 1 April 2013), such that pursuant to s 8(5)(d) of the Act, the Final Award “deals with a difference not contemplated by, or not falling within the terms of, the submission to arbitration, or contains a decision on a matter beyond the scope of the submission to arbitration”.
- Grounds 1 and 2 rely upon s 8(5)(b) of the IAA; Ground 3 relies upon s 8(5)(e) of the IAA; and Ground 4 relies upon s 8(5)(d) of the IAA. The essence of each of the provisions of the IAA relied upon is satisfactorily captured in the text of the relevant ground in each case.
- Section 9 of the IAA is in the following terms:
9 Evidence of awards and arbitration agreements
(1) In any proceedings in which a person seeks the enforcement of a foreign award by virtue of this Part, he or she shall produce to the court:
(a) the duly authenticated original award or a duly certified copy; and
(b) the original arbitration agreement under which the award purports to have been made or a duly certified copy.
(2) For the purposes of subsection (1), an award shall be deemed to have been duly authenticated, and a copy of an award or agreement shall be deemed to have been duly certified, if:
(a) it purports to have been authenticated or certified, as the case may be, by the arbitrator or, where the arbitrator is a tribunal, by an officer of that tribunal, and it has not been shown to the court that it was not in fact so authenticated or certified; or
(b) it has been otherwise authenticated or certified to the satisfaction of the court.
(3) If a document or part of a document produced under subsection (1) is written in a language other than English, there shall be produced with the document a translation, in the English language, of the document or that part, as the case may be, certified to be a correct translation.
(4) For the purposes of subsection (3), a translation shall be certified by a diplomatic or consular agent in Australia of the country in which the award was made or otherwise to the satisfaction of the court.
(5) A document produced to a court in accordance with this section is, upon mere production, receivable by the court as prima facie evidence of the matters to which it relates.
- In the present case, both at the ex parte hearing before me on 8 February 2017 and at the subsequent contested hearings, Sanum satisfied the requirements of s 9 of the IAA.
- At  in Sanum No 1, I said:
The substantive relief claimed by the applicant in this proceeding is for enforcement of the award pursuant to s 8(3) of the International Arbitration Act 1974 (Cth) (the IAA). By that section, this Court is given jurisdiction to enforce a foreign award as if the award were a judgment or order of this Court. For the purposes of s 8(3), a foreign award is an arbitral award made, in pursuance of an arbitration agreement, in a country other than Australia, being an arbitral award in relation to which the New York Convention applies, a copy of the English text of which is set out in Schedule 1 to the IAA.
- Upon the Court being satisfied that the Award which is the subject of an enforcement application pursuant to s 8(3) of the IAA is a “foreign award” as defined in s 3(1) of that Act and upon the Court also being satisfied that the applicant for enforcement has met the requirements of s 9 of the IAA, the Court must enforce the award unless it is persuaded not to do so because the award debtor proves to the satisfaction of the Court that at least one of the bases for refusing to enforce the award specified in s 8(5) and/or in s 8(7) of the IAA has been made out. The onus of establishing grounds for refusing to enforce such an award is upon the award debtor.
- Subject to weighing the balance the strength of the respondents’ case based upon the grounds specified in their Statement of Contentions, Sanum has clearly established a prima facie case for enforcement of the Award and for the entry of consequential monetary judgments as sought.
- In evaluating Sanum’s prima facie case in light of the respondents’ contentions as to the engagement of s 8(5) of the IAA, I must apply the principles to which I have made reference at – above. Consideration of the question of whether a prima facie case has been established should not call for substantial enquiry. The requirement is not particularly onerous and all that the Court is required to do is to satisfy itself that, on the material presented, a controversy exists between the parties that warrants the use of the Court’s processes to resolve it and whether causing a proposed respondent to be involved in litigation in the Court in Australia is justified.
- The respondents led evidence from SX as to the background and context to the entry into of the various contracts in play in the present case. They also led evidence from Professor Thiengchanhxay as to the relevant substantive law of contract in Laos.
The Relevant Agreements
- There were five relevant agreements tendered before me.
- The respondents made detailed submissions as to the parties to the relevant agreements and the important clauses in each of them. At pars 8–23 of their Written Submission filed on 23 June 2017, the respondents said:
On 31 May 2007, the parties entered into a Master Agreement, which set out the basic framework and material terms that were to govern proposed joint ventures (in which the applicant would, ultimately, have a 60% interest [See Master Agreement cl. 2(1)]. It was stated that the agreement was “not intended to be a definitive agreement but only provides the Parties’ general understandings of their relationship. The Parties agree to work together in good faith to negotiate and finalize all necessary agreements to fully implement the concepts and terms set forth in this Agreement.” The Master Agreement made plain, however, that it “was authoritative; any contradiction or vagueness shall be clarified by the plain meaning of the terms of this Agreement” [Master Agreement at cl. 1(5)].
Although there is some dispute as to who exactly was a party to the Master Agreement, it is uncontroversial that the parties included the applicant (being the “1st Party), and the first and third respondent (being the “2nd Party”).
The Master Agreement provided for the creation of three joint ventures, including, relevantly for these proceedings, the Slot Club Joint Venture (SCJV). Those joint ventures, once created, would “represent and include all of 2nd Party’s present and future gaming businesses in Lao PDR” with the “only exception” being the “Vientiane Friendship Bridge location” (also known as the Thanaleng slot club) [Master Agreement at cl. 1].
The SCJV was contemplated to “include, but [not be] limited to, Slot Club at Lao border at Lao Bao, Slot Club Savannakhet/Daensaven checkpoint and 100% of all future slot clubs and gaming of any type that 2nd Party should become involved in.” [Master Agreement at cl 1(3)]
The reason for the separate treatment of the Vientiane Friendship Bridge Location was because it was operated by other entities pursuant to existing contracts. The Master Agreement provided that, when those existing contracts expired [Master Agreement at cl. 1(3)(d)]:
- “1st Party will take the place of the current operators under the same conditions and terms as the existing participation agreements.”
- “Each entity [i.e. the existing operators] may submit a proposal to 1st Party detailing how it may continue a relationship with the Vientiane Friendship Bridge location, 2nd Party, 1st Party or the Joint Ventures.”
- “1st Party has the sole discretion to approve or disapprove such proposals.”
- “Upon the expiration of the existing entities’ participation agreements with 2nd Party and turnover of the location to the [SCJV], the 1st Party shall pay to 2nd Party $500,000.”
The Master Agreement also contained a dispute resolution clause at cl 2(10), which relevantly stated that parties “shall mediate and, if necessary, arbitrate such dispute using an internationally recognized mediation/arbitration company in Macau, SAR PRC.”
Slot Clubs Joint Venture Agreement
A specific “Participation Agreement”, entered into to give effect to some of the arrangements outlined in the Master Agreement, was entered into between the applicant and the fourth respondent and no other parties. That agreement (the Slot Clubs Joint Venture Agreement) specifically covered the two slot clubs mentioned in cl 1(3) of the Master Agreement, the Lao Bao Slot Club and the Slot Club at the Savannakhet/Daensaven checkpoint [Clause (A) of the Slot Clubs Joint Venture Agreement], which together were defined as the “Business Operations”.
Clause 16 provided that that agreement “along with the [Master] Agreement…, shall constitute the entire agreement between the parties…”. This agreement had its own dispute resolution clause, and relevantly stated at 19(c) that the parties shall “arbitrate such dispute using an internationally recognized mediation/arbitration at the Singapore International Arbitration Centre, Singapore, and the rules of SIAC shall be applied.”
Temporary Thanaleng Participation Agreement
Another agreement was entered into between the applicant and the third respondent in relation to the Thanaleng slot club (the Temporary Thanaleng Participation Agreement). That agreement did not refer to the Master Agreement, and was said to constitute the “entire agreement” of the parties. It provided for a profit split of only 40% to the applicant, with 60% going to the fourth respondent.
The Temporary Thanaleng Participation Agreement provided that “this Agreement shall terminate on October 11, 2011.” [Clause ]
First Expansion Agreement
This agreement, titled “Agreement for the Expansion of the Vientiane Friendship Bridge’s Slot Club”, was between the applicant and the first respondent.
The agreement concerned the terms upon which the Thanaleng slot club would be expanded, and included a provision that, after various investment costs had been repaid, “the generated revenues shall then be paid 60% to [the first respondent] and 40% to [the applicant] until the turnover date in 2011, when the terms of the Master Agreement shall prevail.”
Second Expansion Agreement
The second expansion agreement was entered into on 16 November 2010, between the applicant, and the first and third respondents, and provided for the acquisition, construction and operation of an “Additional Facility” at the Thanaleng slot club.
The agreement provided that the slot club, as expanded, “shall be operated by the parties as one slot club in accordance with the provisions of the [Temporary Thanaleng Participation Agreeement] [sic] and the Master Agreement” and that the “Participating Percentage of [the applicant] … shall be 40% from the date of this Agreement and 60% from October 11, 2011” [Cl. 2].
By an Amended Notice of Arbitration dated 22 September 2015, the applicant, amongst other things, claimed relief in the form of a declaration that the respondents had “violated and breached the various Agreements between the parties”, and for an “award and order from the Arbitral Tribunal that ST, and each respondent individually, pay to Sanum its damages resulting from the aforementioned violations with respect to Thanaleng…” [Amended Notice of Arbitration at [33(a) and (b)]].
It is apparent from the description under the “Nature and Circumstance of Dispute”, that the dispute subject of the arbitration was in relation to the Thanaleng slot club at the Vientiane Friendship Bridge, and in particular, what was to have occurred in relation to that slot club as at 11 October 2011 [Amended Notice of Arbitration at -].
- Those submissions accurately summarise the important elements of the relevant agreements. In addition, I now set out the precise terms of the two relevant clauses constituting the agreements to arbitrate relied upon by Sanum.
- Clause 2(10) of the Master Agreement provides as follows:
If any dispute shall arise, the Parties agree to conduct an amicable negotiation. If such dispute cannot be settled by mediation, the Parties may submit such disputes to the Resolution of Economic Dispute Organization or Courts of the Lao PDR according to the provision and law of Lao PDR in accordance with this Agreement. All proceedings of the arbitration shall be conducted in Lao and English languages.
Before settlement by the arbitrator under the rules of the Resolution of Economic Dispute Organization, the Parties shall use all efforts to assist the dispute resolution in accordance with the laws of Lao PDR.
If one of the Parties is unsatisfied with the results of the above procedure, the Parties shall mediate and, if necessary, arbitrate such dispute using an internationally recognized mediation/arbitration company in Macau, SAR PRC.
- Clause 19 in the Participation Agreement (called by the respondents “the Slot Clubs Joint Venture Agreement” or “the SCJV”) is (inter alia) a dispute resolution clause. That clause is in the following terms:
19. Applicable Law and Dispute Resolution
(a) This Agreement is governed by the laws of Lao PDR.
(b) Any dispute, controversy or claim arising out of or relating to this Agreement, including any question regarding its existence, validity or termination, the parties agree to conduct an amicable negotiation. In the event such dispute cannot be settled by mediation, the unsettled dispute shall be referred to and resolved by, unless the parties otherwise agree, Resolution of Economic Dispute Organization or Courts of the Lao PDR according to the provision and law of Lao PDR.
(c) If one of the parties is unsatisfied with the results of the decision or judgment of the above procedure, the Parties shall mediate and, if necessary, arbitrate such dispute using an internationally recognized mediation/arbitration at the Singapore International Arbitration Centre (SIAC), Singapore and the rules of SIAC shall be applied.
(d) The tribunal shall consist of three arbitrators. Each of the parties to this Agreement (as a group) shall each be entitled to appoint one arbitrator and the third shall be nominated by the chairman of the arbitration in Singapore, but must be an arbitrator of a different nationality from that of the others. All proceeding of mediation or arbitration shall be conducted in English language.
(e) The parties shall continue to perform their respective obligations under this Agreement despite the occurrence of a dispute or arbitration to resolve that dispute.
- The respondents fairly summarised the way in which the tribunal approached the question of its jurisdiction in pars 25–36 of their Written Submissions filed on 23 June 2017. Those paragraphs were in the following terms:
Seat of the Arbitration
In reconciling cl 2(10) of the Master Agreement with cl 19 of the SCJV Agreement, the Tribunal found that the seat of the arbitration was Singapore, and that the SIAC Rules should apply for the following reasons:
- The evidence of the Chairman of Sanum, Mr John Baldwin, was that Sanum specifically bargained in its contracts for the right to have its disputes heard and determined in a SIAC arbitration: [6.11]-[6.13];
- In construing the dispute resolution provisions together, the clear intention of the parties was relevantly that arbitration would take place under SIAC Rules in Singapore: [6.14];
- The SCJV Agreement amplified and supplemented the dispute resolution procedure set out in the Master Agreement: at [6.15].
Resolution of the Dispute
The Tribunal noted that the Master Agreement provided that separate arrangements were necessary for the Thanaleng slot club because of three existing third party contracts at the time the Master Agreement was entered into, including one with RGB Ltd [Award at [10.15]; Master Agreement at p 2 and p 3, cl 1(3)(d)].
The Tribunal then identified the 11 October 2011 termination date within the Temporary Thanaleng Participation Agreement as the “turnover date” for the purposes of cl. 1(3)(d) of the Master Agreement and cl. 2(d) of the First Expansion Agreement [Award at [7.4]].
The Tribunal found that as the turnover date approached, the applicant purchased 88 new machines for the Thanaleng slot club at a cost of US$1.4million [Award at [8.18]].
On 23 August 2011 and 10 October 2011, the first respondent wrote to the applicant stating that it had been mistaken as to when the RGB contract (ie, the last of the three third party contracts) was set to expire, and that the date was actually 12 April 2012 [Award at [8.18]].
The Tribunal found that what occurred on 11 April 2012 (one day before the Agreement between RGB and the third respondent was then due to expire), was that the first respondent told the applicant that “it considered all of the agreements between the parties to be terminated, and that it would no longer use the slot machines that [the applicant] had purchased and installed at the Thanaleng Slot Club.” [Award at [8.23]] The first respondent thereafter “shut down the Thanaleng slot club, closed its doors and refused to allow access to the Club for any of [the applicant’s] personnel.” [Award at [8.24]].
The Tribunal noted that “none of the agreements provides in specific terms for what was to happen after the Turnover Date in respect of the Thanaleng Slot Club” [Award at [10.15]].
The Tribunal in determining that issue had regard to the five agreements listed above “read together” [Award at [10.14]], and heard evidence from two experts.
The Tribunal held that the Master Agreement provided that upon the date of expiration of the third party contracts, the Thanaleng slot club would be turned over to the SCJV [Award at [9.13.3]; Masters Agreement, cl 1(3)(d)].
The Tribunal was satisfied that the Second Expansion Agreement not only confirmed that 11 October 2011 was the turnover date, but that it also confirmed that the participating percentage of [the applicant] in the Thenaleng slot club should be 60%, and the participating percentage of the first respondent should be 40% [Award at [9.2.1]; [10.16], referring to cl 2 of the Second Expansion Agreement]. The First Expansion Agreement also provided that as at “the turnover date in 2011,…the terms of the Master Agreement shall prevail” [Award at [10.19], referring to cl 2(d) of the First Expansion Agreement, which provided that “[w]hen the investments are repaid in full, the generated revenues shall then be paid 60% to ST and 40% to Sanum until the turnover date in 2011, when the terms of the Master Agreement shall prevail.”].
Though the first respondent in the Lao Court proceedings had asserted that the Temporary Thanaleng Participation Agreement was “terminated” under cl 6 of that agreement as at 11 October 2011, the Tribunal held that following that date, the contractual relationship between the first and third respondents, and the applicant, “was governed by the Master Agreement and the SCJV Agreement.” [Award at [10.20]]
The Tribunal then concluded that “[t]he first to fourth Respondents breached the agreements referred to above, insofar as they concern the Thanaleng slot club.” [Award at . See also Award at p 64 : “The Tribunal declares that the first to fourth respondents…were in breach of the Master Agreement, the Slot Clubs Joint Venture Agreement, the Thanaleng Participation Agreement and the First and Second Expansion Agreements, insofar as they related to the Thanaleng Slot Club.” ]
- After alluding to the essential terms of the relevant agreements and explaining the way in which the tribunal approached its jurisdiction in the Award, the respondents addressed detailed submissions to each of the grounds for refusal of enforcement which it had notified. On the evidence presently available to the Court, the respondents have advanced a forceful and compelling case in support of each of the grounds for refusal of the Award relied upon by them. It may well be that, in due course, when the matter is heard on a final basis, the Court will be persuaded that the respondents will have made out one or more of the grounds specified in s 8(5) of the IAA justifying a refusal by the Court to enforce the Award.
Decision (Prima Facie Case)
- As submitted by Sanum, the materials before the Court provide a basis for an arguable construction of the various agreements, when read together, which supports the proposition that each of the respondents was in fact a party to both of the arbitration agreements relied upon by Sanum and that there is a sufficient basis in those materials to support the additional proposition that the mere fact that the arbitration took place in Singapore and not in Macau is not fatal to the enforceability of the Award.
- Professor Thiengchanhxay explained the principles under Lao law pursuant to which the question of whether SX is a party to the relevant arbitration agreements would be determined. Professor Thiengchanhxay’s opinion was based entirely upon his consideration of the relevant agreements and did not take into account any evidence of the circumstances in which those agreements came to be signed. Professor Thiengchanhxay also addressed the question of whether any of the respondents had agreed to arbitration in Singapore and, if not, what consequences flowed from that circumstance. Again, Professor Thiengchanhxay’s opinion in this respect was confined to his consideration of the agreements themselves.
- Professor Thiengchanhxay also addressed and criticised some of the evidence given by witnesses called by Sanum at the arbitration hearing. He dealt with that evidence by commenting upon its purport as recorded in the Award. He did not have access to the witness statements of the relevant witnesses.
- The Award makes clear that, at the arbitration hearing, Sanum called five witnesses of fact, including Messrs Baldwin and Jordahl, and four expert witnesses. Each witness provided a Witness Statement to the tribunal and also gave evidence at the hearing. A perusal of the Award reveals the following matters:
(a) The tribunal paid regard to the evidence of Mr Baldwin when endeavouring to determine the intention of the parties as to the substance of their agreement in respect of dispute resolution (pars 6.5–6.16 of the Award).
(b) The tribunal also took account of Mr Baldwin’s evidence in determining various aspects of the substantive commercial agreement reached between the parties (pars 8.6–8.20 of the Award).
(c) The tribunal also took account of Mr Baldwin’s evidence when it came to analyse all of the relevant contracts in more detail (s 9 of the Award).
(d) The tribunal considered the evidence of Dr Ngo and Ms Follett, who were both expert witnesses called at the arbitration to prove the relevant law of Laos in respect of the contracts. In particular, the tribunal accepted the proposition that all five agreements should be read together in order to determine the intentions and agreements of the parties in relation to the Thanaleng Slot Club (par 10.14 of the Award).
(e) At pars 10.12–10.26 of the Award, the tribunal considered the true construction of the relevant contracts in detail, relying upon the evidence of both Dr Ngo and Ms Follett.
- Although the respondents’ contentions in support of their case that the Court should refuse to enforce the Award and in support of their argument that Sanum has failed to establish the requisite prima facie case have some superficial attraction, the matters raised by the respondents in the four grounds relied upon by them referable to s 8(5) of the IAA appear to me, at the moment, to require a far more extensive investigation of the relevant facts and circumstances underpinning those arguments than the respondents are prepared to accept. In my view, this is not the time for the Court to undertake the detailed analysis which will ultimately be required at the final hearing.
- In the end, I am satisfied that Sanum’s prima facie case for enforcement demonstrated by its meeting the requirements of s 8(3) and s 9 of the IAA has not been weakened to such an extent by the evidence and arguments brought forward by the respondents in support of the four specific grounds relied upon by them in support of their overall contention that the Court should not enforce the Award, that the Court should now decline to authorise service of the OA and the supporting affidavits of Mr Jordahl because the prima facie case requirement specified in r 10.43(4)(c) FCR has not been satisfied.
SANUM’S RULE 10.48 FCR IA
- For the reasons which I have already explained, I am of the opinion that service of the OA and the two affidavits of Mr Jordahl upon the respondents in Laos as effected by Sanum’s Australian lawyers was ineffective. This is the starting point for my consideration of Sanum’s r 10.48 FCR IA.
- Further, for the purposes of my consideration of Sanum’s r 10.48 FCR IA, I will proceed upon the basis that Professor Thiengchanhxay’s exposition of the relevant law of Laos is correct. That is to say, in order to effect valid service of the OA and the supporting affidavits of Mr Jordahl upon the respondents in Laos, Sanum would have to comply with all of the requirements which I have set out at  above.
- Rule 10.48 FCR is in the following terms:
10.48 Deemed service
A party may apply to the Court without notice for an order that a document is taken to have been served on a person on the date mentioned in the order if:
(a) it is not practicable to serve the document on the person in a foreign country in accordance with a convention, the Hague Convention or the law of a foreign country; and
(b) the party provides evidence that the document has been brought to the attention of the person to be served.
Note: Without notice is defined in the Dictionary.
- I have no doubt that the requirement specified in subr 10.48(b) is satisfied in the present case. The real issue here is whether Sanum has satisfied the Court that “it is not practicable to serve” the OA and the supporting affidavits of Mr Jordahl upon the respondents in Laos in accordance with the law of Laos as explained by Professor Thiengchanhxay.
- In Humane Society International Inc v Kyodo Senpaku Kaisha Ltd  FCA 124, Allsop J (as the Chief Justice then was) considered a previous rule of Court (O 7 r 9) which governed the circumstances in which the Court might order substituted service of process. In that previous rule, the Court was required to be satisfied that it was “impractical” to serve the relevant document in the manner set out in the rules. The word deployed in the rule under consideration by his Honour in that case was not “impracticable”. At –, his Honour said:
The relevant word in the rule is “impractical”. “Impractical”, depending on context, can have a different meaning to “impracticable”. The Shorter Oxford Dictionary on Historical Principles (1986) gives the definition of “impracticable” as “practically impossible” or “that (which) cannot be carried out or done”. It gives as the meaning of “impractical” both “impracticable” and “un-practical”. When one examines the definitions of “practical” it is clear that “un-practical” has a wider meaning, in a more relative sense, than that which cannot be done.
The editors of the New Fowler’s Modern English Usage say the following at 383:
“impracticable, impractical. Impracticable means ‘that cannot be carried out, that is not feasible’ (it would be impracticable to place a ban on smoking in pubs; a manned mission to Mars is impracticable at present). In generalimpractical (which is a relatively recent word, first recorded in the mid-19c.) means ‘not practical, unpractical’, ie (of an idea or course of action) not sensible or realistic; (of a person) lacking the ability to do practical things. Unfortunately impractical is tending to encroach on the territory of impracticable, and it is not easy to see how they can be permanently kept apart.”
The Macquarie Dictionary also appears to draw the distinction drawn in Fowler and by the Shorter Oxford.
The same distinction is drawn in various well-known language books. In Sir Ernest Gower’s The Complete Plain Words (3rd Ed), p 254 the following appears:
Practical, with its implied antithesis of theoretical, means useful in practice.Practicable means capable of being carried out in action.
That which is practicable is often not practical. Anything that is possible of accomplishment by available means may be called practicable. Only that which can be accomplished successfully or profitably under given circumstances may be called practical.”
Penguin Working Words, said to be an Australian Guide to Modern English Usage (Viking 1993), at 410-11 makes the same distinction:
“practicable/practical Practicable means capable of being done or used:
A third bricklayer made construction practicable in the time available.
This route is practicable in dry weather only.
Practical has a wide range of meanings, all related to practice or action as opposed to theory. A practical idea, for example, is one that is useful, realistic and likely to be successful. Note that something practicable may not bepractical:
Finishing the file may be practicable, but it is not practical to invest so much more money in it.
Similar distinctions apply to the antonyms of these words, impracticable andimpractical.”
Of course, the meaning of a provision in the Rules is not to be gained only by consulting dictionaries and books on usage. Context and purpose are important. Nevertheless, the word used in the rule is “impractical”, which is recognised widely as having a meaning different from “impracticable” and thus, arguably, its meaning is not just governed by notions of whether service is factually possible or feasible, but can include relative notions of sensible and realistic in the circumstances.
In Ricegrowers Co-operative Ltd v ABC Container Line NV  FCA 1663; (1996) 138 ALR 480 at 482 Tamberlin J said that “not practicable” in an English Rule to which he was referred was “essentially identical” in meaning to “impractical” in Order 7 Rule 9. In that case, Tamberlin J seemed to express the view that futility or inability to serve was an essential requirement for invocation of the rule. Whether that gives full breadth to the language of the rule may be open to debate. On one view of the language of the rule, “impractical” may be wide enough to cover circumstances where in the light of the nature of the claim and the circumstances of the applicant and respondent service through the method provided for by following the Rules is not sensible or realistic, even if it is possible or feasible. It is unnecessary to deal with this question here. Here, on the evidence, it is not possible or feasible to serve the process in Japan using diplomatic channels. Thus, on any view, service ex juris, in accordance with the Rules, is impractical.
- In Electrolux Home Products Pty Ltd v Delap Impex Ltd  FCA 600; (2013) 103 IPR 421 at 432–433 –, Katzmann J said:
Tamberlin J in Ricegrowers Co-Operative Ltd v ABC Containerline NV  FCA 1663;(1996) 138 ALR 480 at 482 (Ricegrowers) said of the former rule (O 7 r 9) (where the test was whether service under the Rules was “practical” rather than “practicable”) that in order to establish impracticality some attempt should be made to effect service in accordance with the Rules or some evidence led to show that it was “so obviously futile” so as not to warrant an attempt. If the suggestion was that it was necessary in every case to show futility, then I respectfully agree with Allsop J (as his Honour then was) in Humane Society International Inc v Kyodo Senpaku Kaisha Ltd  FCA 124 (Humane Society International) who suggested that “the language of the [former] rule … may be wide enough to cover circumstances where in the light of the nature of the claim and the circumstances of the applicant and respondent service through the method provided for by following the Rules is not sensible or realistic, even if it is possible or feasible”.
I doubt that in Ricegrowers Tamberlin J was suggesting that an applicant for substituted service needs to show that it is futile to attempt service. His Honour was merely dealing with the case before him where no attempt had been made to effect service in accordance with the Rules. In that context, he pointed out that an applicant had to either make an attempt or prove that an attempt would be futile. Here, some effort was put into obtaining an address so as to effect personal service.
Tamberlin J thought that “impractical” and “impracticable” were synonymous. In Humane Society International, however, Allsop J explored the etymology of the two words and came to a different conclusion. His Honour referred at  to the discussion in New Fowler’s Modern English Usage at 383:
“impracticable, impractical. Impracticable means ‘that cannot be carried out, that is not feasible’ (it would be impracticable to place a ban on smoking in pubs; a manned mission to Mars is impracticable at present). In generalimpractical (which is a relatively recent word, first recorded in the mid-19c.) means ‘not practical, unpractical’, ie (of an idea or course of action) not sensible or realistic; (of a person) lacking the ability to do practical things. Unfortunately impractical is tending to encroach on the territory of impracticable, and it is not easy to see how they can be permanently kept apart.
I tend to think that the author’s fears have been realised. I frankly doubt that the differences in meaning are widely appreciated.
In the context of the Rules, however, I prefer the approach taken by Palmer J in Alstom Ltd v Sirakas  NSWSC 669 who, when dealing with the requirement under the Uniform Civil Procedure Rules 2005 (NSW) that documents “cannot practicably be served” said at  that on the one hand “impracticable” does not mean “impossible” (referring to Re Conan Doyle’s Will Trusts  Ch 982 at 994;  2 All ER 1377) and, on the other, that it does not mean “inconvenient” (citing Syndicate Mortgage Solutions Pty Ltd v El-Sayed NSWSC 207). Presumably, the (or at least a) purpose of the rule was to enable service to be effected where a party was evading personal service. In such a case persistence might pay off. In these circumstances it could not be said that personal service was impossible or not feasible. But I doubt that it was the intention of the rule to require vast resources to be put into the task. Thus, like Flick J in Statewide Secured Investments Pty Ltd v Tarrant  FCA 1067 (Statewid”), I am of the opinion that it is unnecessary for an applicant to prove that it is impossible or futile to effect personal service.
In both Statewide and Speedo Holdings B.V. v Evans  FCA 1089 (Speedo) Flick J expressed the view that the present rule should not be given “a meaning more constrained” than its predecessor. Dodds-Streeton J expressed the same view in British American Tobacco Australasia Ltd v Taleb (No 1)  FCA 1065. I respectfully agree. As Flick J indicated in Speedo, that view is supported by the Explanatory Statement on the new Rules which states that, with the exception of Div 10.6 and rr 10.02, 10.07 and 10.08, Part 10 merely “adopts, simplifies and streamlines the process and procedures which operated under the former Rules and does not substantially alter existing practice”. This indicates that the change in language was not intended to make it more difficult to obtain an order for substituted service under the new rule.
It is, however, easier to say what “impracticable” does not mean than what it does mean. None of these authorities provides any real guidance on this question. There can, of course, be problems in looking for synonyms (compare Spencer v The Commonwealth (2010) 241 CLR 118;  HCA 28). Still, I incline to the view that the meaning that should attach to “impracticable” in r 10.24 is the first meaning given to the word in the Macquarie Dictionary: “not practicable; that cannot be put into practice with the available means”.
In Speedo Flick J was satisfied that it was not practicable to effect personal service after a number of attempts had been made to do so.
- Her Honour again considered the meaning of the word “impracticable” in Commissioner of Taxation v Zeitouni  FCA 1011; (2013) 306 ALR 603 at 615–619 –.
- In Titan Enterprises (Qld) Pty Ltd v Cross  FCA 664 at , Edelman J, when a Judge of this Court, considered the meaning of the word “impracticable” for the purposes of r 10.24 FCR which provides for substituted service. At , his Honour said:
In Electrolux Home Products Pty Ltd v Delap Impex Ltd  FCA 600; (2013) 103 IPR 421, 432-433 , Katzmann J explained that service which is “not practicable” within the rule does not require an applicant to prove that it is impossible or futile to effect personal service. The intention of the rule was unlikely to have been to require that service must be effected personally, even if it was extraordinarily difficult to do so, provided that it was possible. This is so despite the etymology of “impracticable” in contradistinction to “impractical” (see Humane Society International Inc v Kyodo Senpaku Kaisha Ltd  FCA 124 - (Allsop J)). As Katzmann J observed, this approach has been taken in other decisions: Statewide Secured Investments Pty Ltd v Tarrant  FCA 1067 - (Flick J); Speedo Holdings BV v Evans  FCA 1089  (Flick J); British American Tobacco Australasia Limited v Taleb (No 1)  FCA 1065  (Dodds-Streeton J).
- The cases to which I have referred support the proposition that, in order to prove that service is impracticable, an applicant is not required to prove that it is impossible or futile to effect service as required. In addition, in the context of r 10.48 FCR, an applicant for relief under that rule is not required to undertake service in accordance with the strict requirements of the relevant law before seeking relief pursuant to r 10.48. It should also be remembered that, although mere inconvenience may not be enough to constitute“impracticability”, r 10.48 FCR is intended to ameliorate the stultification of cases against foreign defendants caused by an unduly cumbersome and uncertain set of requirements governing service of this Court’s process in a foreign country. In my judgment, once this court is satisfied that its process and other documents have come to the attention of the foreign defendants, it should not hesitate to deem service to have been effective if there is any suggestion that the law of the relevant foreign country as to service will unreasonably delay or even frustrate the progress of the proceeding.
- Recently, in bCode Pty Ltd (in liq) v Holford  FCA 798 at –, Gleeson J considered the meaning of the expression “not practicable” when used in r 10.24 FCR which, as I have said, concerns substituted service. Her Honour said:
In Australian Securities and Investments Commission v China Environment Group Ltd  FCA 286 at , Besanko J noted that the ordinary meaning of the word “practicable” includes the concepts of feasibility and capability. At , his Honour stated that the meaning of “not practicable” must be determined according to the circumstances of the particular proceedings, including the relief sought and the requirement that the litigation be progressed quickly and efficiently, citing Rohalo Pharmaceutical Pty Ltd v R P Scherer SpA (1994) 15 ACSR 347 at 366 and Ricegrowers Co-operative Ltd and Another v ABC Containerline NV and Others  FCA 1663; (1996) 138 ALR 480 (“Ricegrowers”) at 482.
In Ricegrowers, Tamberlin J explained at 482 that:
The meaning of the expression “practicable” for the purpose of a substituted service application under the corresponding United Kingdom rule was considered by the Court of Appeal in Paragon Group Ltd v Burnell  2 All ER 388. Lloyd LJ considered that the word “practicable” should be given a wide meaning and that the simple question was whether it was “practicable” to serve by one of the prescribed methods (at 390). The expression “not practicable” is in my view essentially identical in meaning to the term “impractical”. In order to establish impracticality some attempt, at least, should be made to effect service in accordance with the rules, or evidence should be led that it is so obviously futile as not to warrant an attempt at service. In this case, there is no evidence of obvious futility nor has any attempt been made to serve in accordance with the rules.
It is not necessary for the applicant to prove that it is impossible to effect personal service, or that it would be futile to attempt to do so, before an order for substituted service can be made: Commissioner of Taxation v Zeitouni  FCA 1011; (2013) 306 ALR 603 at .
- As will already be apparent, I agree that the meaning of “impracticable” (or “not practicable”) when used in the particular rules of Court concerning service must be determined according to the circumstances of the particular proceedings, including the relief sought and the requirement that the litigation be progressed quickly and efficiently. In the case of applications to enforce a foreign award under the IAA, these observations are particularly pertinent. See also the observations of Colvin J in Commissioner of Taxation v Caratti (No 2)  FCA 1500, at –, where his Honour held that the preponderance of authority is to the effect that r 10.24 FCR requires the applicant for orders for substituted service to demonstrate that it is not sensible or realistic to effect personal service even though it may be possible or feasible to do so.
- In r 10.48 FCR, “impracticable” should be understood as encompassing more than the impossible. In this sense, its meaning is very close to “impractical”. What the rule contemplates is a state of affairs which is practically impossible to navigate without substantial difficulty.
- Sanum led evidence as to the difficulties of serving foreign legal process in Laos. In this regard, it read and relied upon the affidavit of Warathorn Wongsawangsiri affirmed on 17 May 2017.
- Mr Wongsawangsiri is a member of the Thai Bar Association and practises as a Barrister-at-law in Thailand. He is not independent of Sanum, having acted for it in the past.
- Mr Wongsawangsiri gave evidence as to his experience in relation to the process of requesting the service of Thai Court Documents via what he called the “Lengthy Procedure” in Laos. At par 4 of his affidavit, he said:
… Under the Lengthy Procedure the Thai Court Documents are required to be delivered from the Thai Court through the Office of Court of Justice of Thailand to the Thai Ministry of Foreign Affairs who would then pass the Thai Court Documents on to the Thai Embassy in Laos. Then the Thai Embassy in Laos would contact the Laos Ministry of Foreign Affairs and pass on the Thai Court Documents to them. Subsequently, the Thai Court Documents would then be passed on to the Lao Courts so that they are able to be served on the Defendant/s.
- Mr Wongsawangsiri gave one example of his experience of trying to serve Thai Court Documents in Laos under the Lengthy Procedure. In the example which he gave, the particular Thai Court Documents were never served before the case was settled. However, in that example, six months had passed since the Thai Court had started the process of delivering the Thai Court Documents to the Thai Ministry of Foreign Affairs and, even after the lapse of that period of time, no report as to service had been received.
- Sanum also led evidence from Mr Baldwin, its Chairman, to the effect that he feared that Sanum’s endeavours to serve the OA and the supporting affidavits of Mr Jordahl in Laos would be disrupted by inappropriate or corrupt influence being exercised by the respondents in Laos. Although I admitted Mr Baldwin’s affidavit into evidence, I take the view that the material in that affidavit did not rise so high as to establish that such inappropriate interference was likely. Mr Baldwin’s affidavit provoked a response from SX which left me with a series of assertions and counter-assertions which ultimately turned out to be of little or no assistance.
- The requirements of service as explained by Professor Thiengchanhxay are cumbersome and unwieldy. On any view of matters, the pursuit of those processes is very likely to result in substantial delay. In addition, Sanum’s attempts to enforce the Award directly in Laos by diplomatic means encountered obfuscation and delay at the hands of the Ministry of Foreign Affairs of Laos. There seems to be considerable doubt as to whether, if the processes explained by Professor Thiengchanhxay are to be followed, service of this Court’s process would be effected any time soon.
- Section 2D of the IAA is in the following terms:
2D Objects of this Act
The objects of this Act are:
(a) to facilitate international trade and commerce by encouraging the use of arbitration as a method of resolving disputes; and
(b) to facilitate the use of arbitration agreements made in relation to international trade and commerce; and
(c) to facilitate the recognition and enforcement of arbitral awards made in relation to international trade and commerce; and
(d) to give effect to Australia’s obligations under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted in 1958 by the United Nations Conference on International Commercial Arbitration at its twenty fourth meeting; and
(e) to give effect to the UNCITRAL Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law on 21 June 1985 and amended by the United Nations Commission on International Trade Law on 7 July 2006; and
(f) to give effect to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States signed by Australia on 24 March 1975.
- Section 39(2) of the IAA provides as follows:
39 Matters to which court must have regard
(2) The court or authority must, in doing so, have regard to:
(a) the objects of the Act; and
(b) the fact that:
(i) arbitration is an efficient, impartial, enforceable and timely method by which to resolve commercial disputes; and
(ii) awards are intended to provide certainty and finality.
- Efficiency and speed in the resolution of commercial disputes are key elements of the objects of the IAA. A particular aim of the IAA is the timely and efficient enforcement of foreign arbitral awards under the New York Convention.
- In this case, Sanum seeks to enforce the Award against foreign defendants who ordinarily reside in Laos. The law of Laos as to service of foreign court process is at best unwieldy and productive of delay and at worst uncertain. The respondents are well aware of this proceeding and the claims made by Sanum in this proceeding. The present context demands that the Court take a sensible view of what is “impracticable” by not requiring too high a threshold.
- The claims made by Sanum against the respondents are substantial and the prima facie position is that, subject to appropriate consideration of the respondents’ arguments based upon s 8(5) of the IAA, Sanum is entitled to have the Award enforced against the respondents in Australia. The respondents are not only well aware of the existence of this proceeding but must be taken to fully appreciate the claims made therein and the basis for those claims. It seems to me that the time has come for the respondents to be required to elect whether or not they will appear unconditionally in this proceeding in order to resist the claims for relief made by Sanum.
- Accordingly, I propose to grant the relief sought by Sanum in its r 10.48 FCR IA.
- Each party has had some success in relation to the arguments and claims determined by this judgment. The respondents have succeeded in establishing that service of the OA and the supporting affidavits of Mr Jordahl as effected by Sanum’s Australian lawyers in February 2017 was ineffective but have failed to persuade the Court that its arguments in relation to the question of prima facie case and deemed service should be accepted. On the other hand, Sanum has failed to prove that service as effected was in accordance with the law of Laos but has succeeded on the questions of prima facie case and deemed service.
- In my view, more time was spent both in preparation and at the various hearings on the questions in respect of which Sanum succeeded than those in respect of which it lost. For that reason, I am inclined to think that the appropriate order for costs is that half of Sanum’s costs of both applications considered together be Sanum’s costs in the proceeding and that there be no other order as to costs. To my way of thinking, this is a preferred option to making separate orders in respect of each IA.
- For the reasons which I have explained, the respondents are entitled to a declaration, pursuant to r 13.01(c) FCR, that the OA and supporting affidavits of Mr Jordahl have not been duly served on the respondents outside Australia in Laos. The balance of the respondents’ IA filed on 22 March 2017 should be dismissed.
- Sanum is entitled to an order in the terms of Order 1 claimed by it in its IA filed on 19 May 2017.
- There will be orders accordingly.