FEDERAL COURT OF AUSTRALIA
THE COURT ORDERS THAT:
- The applicant’s application for an adjournment of the hearing today (both the case management hearing and the hearing of the first respondent’s interlocutory application filed on 9 January 2020) made by email to the Associate of Stewart J and received at 5:45am AEDT on 20 February 2020 is dismissed.
- In consequence of Art 34(3) of the UNCITRAL Model Law on International Commercial Arbitration being Sch 2 to the International Arbitration Act 1974 (Cth) the Originating Application filed on 29 November 2019 be summarily dismissed.
- The applicant pay the first respondent’s costs of the proceeding.
- The first respondent have leave to make an application for a lump sum costs order to a Registrar of this Court.
- Before me on 20 February 2020 was the first respondent’s interlocutory application to summarily dismiss the applicant’s originating application. There was also an application on behalf of the applicant to adjourn the hearing of the first respondent’s interlocutory application to a date at the end of April or in May 2020.
- I dismissed the adjournment application and granted the first respondent the relief sought in its interlocutory application by summarily dismissing the originating application. That was in the application of Art 34(3) of the UNCITRAL Model Law on International Commercial Arbitration (being Schedule 2 to the International Arbitration Act 1974 (Cth) (IAA)) which requires an application to set aside an arbitration award – which is what the applicant’s originating application sought – to be made within three months of the applicant receiving the award.
- These are my reasons for making those orders.
- The first respondent, Military Ceramics Corporation (MCC), is a company incorporated in the British Virgin Islands.
- The applicant and each of the second, third and fourth respondents are citizens of India and are resident in India. I shall refer to them as the Indian parties. From what is stated in the arbitration award to which further reference is made below, the Indian parties appear to be business people.
- In March 2012, MCC and the Indian parties concluded a joint venture agreement. It provided for disputes to be resolved by arbitration with the seat of the arbitration being Sydney, Australia, and for the arbitration to be conducted in accordance with the rules of the Australian Centre for International Commercial Arbitration (ACICA). The law governing the March 2012 agreement was expressed to be the law of Hong Kong.
- In September 2014, MCC commenced arbitration proceedings against the Indian parties in relation to a dispute said to arise under the March agreement. In December 2014, ACICA appointed Ms Kim H Rooney, a Hong Kong barrister, as sole arbitrator.
- In the arbitration proceeding the applicant nominated a particular email address as being his address for the purposes of notice in that proceeding. Without identifying the address, I shall refer to it as the Sanya Builders email address. Thereafter, correspondence over more than three years with regard to the conduct of the arbitration was apparently conducted with the applicant at that email address. The applicant was legally represented and participated from time to time in the arbitration proceeding, but at other times he did not participate.
- On 4 April 2018, Ms Rooney published her final award in the arbitration. The award reflects it as having been signed and dated in Sydney on that date. In terms of the award, the Indian parties are to pay MCC various sums totalling approximately US$5.8 million, AU$333,000 and HK$138,000 including costs. Provision is also made in the award for interest on the principal sums at 8% per annum.
- In August 2018, MCC commenced proceedings in the High Court of Delhi in India to enforce the final award in India. I shall refer to this as the Indian proceeding.
THE PROCEEDING IN THIS COURT
- On 29 November 2019, the applicant commenced a proceeding by originating application in this Court in which he sought relief setting aside the final award and costs against MCC. That relief was said to be sought under Art 34 of the Model Law which deals with recourse against an arbitral award. Article 34(2) of the Model Law sets out various limited grounds on which an arbitral award may be set aside at its seat.
- Subject to other provisions of Pt III of the IAA, s 16(1) of the IAA gives the Model Law the force of law in Australia. In terms of Art 1(1) of the Model Law, it applies to international commercial arbitration. An arbitration is international if the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their places of business in different states (i.e. countries) (Art 1(3)). It is common ground that the Model Law applies in this case – the applicant relies on it to set aside the award and MCC relies on it to summarily dismiss the set aside application.
- The originating application recorded that the applicant’s solicitor on record was Mr Tony Soubris of Soubris & Associates Lawyers in Hurstville, Sydney. The significance of this will shortly become apparent.
- In the applicant’s affidavit filed in support of the originating application he identified numerous grounds to the application to set aside the award. They cover a wider range of matters including such things as error of law and errors in assessing the evidence. Few of the grounds, if made out on the facts, would qualify as grounds to set aside an award under Art 34(2) of the Model Law.
- After having commenced the proceeding, the applicant did not apply for leave to serve the originating process on MCC. Further, he did not serve the originating process on MCC.
- MCC first learnt of the applicant’s originating application in this Court on 16 December 2019 when the applicant served a copy of the originating application in the Indian proceeding. There was a call over listed in the High Court in Delhi on 18 December 2019. The originating application in this Court was filed in the High Court in Delhi just in time for that call over. I infer that that was for the purpose of opposing or perhaps delaying or staying that proceeding.
- As it happens, the matter was not called on 18 December 2019 in Delhi because the judge allocated to hear the case was ill. The matter was relisted in the High Court of Delhi for 24 February 2020. As will be seen, that date has some significance.
- Also on 16 December 2019, my Associate emailed Mr Soubris suggesting that the matter be listed for a first case management hearing on 6 February 2020. It was anticipated at that time that the applicant would in the meanwhile do whatever was required to serve the application, if it had not already been served, and to notify the respondents of the date for the first case management hearing.
- On the same day, Mr Soubris replied to my Associate asking that the matter be listed for 20 February 2020 or thereafter to suit his convenience. That email was copied to the applicant at the Sanya Builders email address which had the consequence, as will be seen, that subsequent correspondence to and from my Associate was also sent to that address.
- On 17 December 2019, Mr Greg Willis, a solicitor and a director of MCC, wrote by email to Mr Soubris pointing out that the originating application had not been served and that it was out of time because of the three month time limit provided for in Art 34(3) of the Model Law. Mr Willis also set out details of the occasions on which he contended that the applicant had received the final award which commenced the running of time, such that the originating application was filed well outside the three months allowed.
- By email on 17 December 2019, my Associate emailed Mr Soubris (copied to the Sanya Builders email address) notifying that the matter was listed for a case management hearing on 20 February 2020. At that stage, no respondent had entered an appearance.
- Given that the notice to Mr Soubris, who was unambiguously on record for the applicant at that time, was also copied directly to the applicant, the applicant can be taken to have known from 17 December 2019 that the matter was listed for a hearing on 20 February 2020, i.e. the applicant was given more than two months’ notice of the hearing.
- On 9 January 2020, Mr Willis on behalf of MCC filed a notice of address for service in accordance with the rules, as well as the interlocutory application referred to above (at ) and a supporting affidavit.
- In that regard, Art 34(3) of the Model Law, on which the interlocutory application was said to be based provides as follows:
An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the award or, if a request had been made under article 33, from the date on which that request had been disposed of by the arbitral tribunal.
- No request had been made under Art 33 so the reference to that provision in Art 34(3) is not relevant for present purposes.
- On 6 February 2020, Mr Soubris filed a notice of intention of ceasing to act for the applicant. The notice was in accordance with Form 7 of the Federal Court Rules 2011 (Cth) (FCR). It stated that after seven days from the date of service of the notice, Mr Soubris would file in the registry a notice that he had ceased to act as the applicant’s lawyer in the proceeding and that the applicant must, within five days after that notice, file in the registry a notice of address for service.
- Rule 4.05(1) of the FCR requires the notice to be served on the party who the lawyer represents, and r 4.05(2) requires the party to file a new notice of address for service within five days of the lawyer’s notice being filed. I infer that Mr Soubris served the notice on the applicant as he was required to do by the rule, because that is what he was required to do and because, as will be seen, the applicant did not later say that Mr Soubris had not served the notice on him.
- On the hearing of the adjournment application, Mr Willis tendered an email dated 8 February 2020 as evidence that on that day he served on Mr Soubris the interlocutory application, MCC’s genuine steps statement, MCC’s notice of address for service, the supporting affidavit, and an outline of submissions in support of the interlocutory application. The submissions had been filed on that day.
- The email stated that the documents that were attached were “stamped copies”, by which I infer that they were the copies that had been issued by the Court and that bore the stamp of the Court. The copy of the interlocutory application that was served on Mr Soubris therefore included the Court’s “notice of filing and hearing” form bearing the Court’s stamp and the signature of the Registrar. That form gave notice that the interlocutory application was listed for hearing on 20 February 2020 at 9:30am.
- It is thus apparent that at a time when Mr Soubris was still on record for the applicant – even before the expiry of the minimum period of seven days provided for in r 4.05(1)(b) – he received notice of the interlocutory application being listed for 20 February 2020. The applicant was thus given proper notice of that listing. In that regard, r 17.01(2) of the FCR requires that a party be given at least three days’ notice of an interlocutory application. Here the applicant was given 12 days’ notice. That was over and above the more than two months’ notice that he had in any event been given of the first case management hearing for the same date and time.
- On 12 February 2020, my Associate sent an email to the parties requesting them to confer with regard to appropriate orders to be made on 20 February 2020. The email was sent to the applicant’s Sanya Builders email address.
- On 13 February 2020, Mr Willis wrote to my Associate copying the applicant (at the Sanya Builders email address) and Mr Soubris asking that the interlocutory application be determined on 20 February 2020 on account of the fact that the matter would next be before the High Court of Delhi on 24 February 2020. Plainly, Mr Willis hoped that the originating application could be dismissed before the matter was called in Delhi on 24 February so that the fact of a pending application to set aside the award could not be relied on to delay or stay the Indian proceeding.
- Mr Willis gave evidence on affidavit that in India litigation moves at “glacial speed” and it is not uncommon for a straightforward case to take up to 12 years before a judgment is given. He was clearly seeking to minimise the opportunities for further delay in the Indian proceeding. I infer that if the originating application in this Court remained on foot on 24 February 2020 when the Indian proceeding was called, there was a real risk that the Indian proceeding would be significantly delayed. Such delay would cause MCC significant prejudice.
- On 19 February 2020 soon after 9:00am, my Associate emailed the parties (including Mr Soubris and the applicant at the Sanya Builders email address) advising that it was the Court’s intention that the interlocutory application would be heard on 20 February 2020. This email in effect served to confirm the notification of the listing for that day that had been given to Mr Soubris by Mr Willis on 8 February 2020.
- The email also pointed out that Mr Soubris had not yet withdrawn as solicitor for the applicant because he had not filed a notice of ceasing to act in accordance with Form 8, notwithstanding the passage of seven days since him having filed his notice of intention to withdraw.
- Later that day, Mr Soubris filed his notice of ceasing to act.
- Shortly before 6:00am on 20 February 2020, my Associate’s inbox received an email from Kapil Kher, the applicant’s advocate and solicitor in the Indian proceeding. The email was in the applicant’s name in which he requested an adjournment of the hearing on 20 February 2020 to a date at the end of April or in early May 2020. In summary, the applicant’s grounds were as follows:
(1) that on account of some misunderstandings on the quantum of fees chargeable by Mr Soubris he had ceased to act on 19 February 2020;
(2) the applicant is resident in India and unable to represent himself on 20 February 2020 “because of distance and travel times between the two countries” and it will not be possible for him to appear at the hearing;
(3) the applicant’s father had died in the month of January 2020 in respect of which the applicant has to perform certain rituals and will not be able to travel to Sydney for at least a month to attend a hearing and to engage the services of another lawyer.
- When the matter was called on 20 February 2020, a person identifying himself as Mr Vivek Sharma, the nephew of the applicant, appeared on behalf of the applicant. Mr V Sharma is not a lawyer and has no rights of appearance in the Court. Mr Willis, who appeared for MCC, did not object to Mr V Sharma’s appearance and I therefore gave him leave to address the Court on the applicant’s behalf.
- Mr V Sharma referred to the email from the applicant cited above and requested on behalf of the applicant that the matter be adjourned for the period of time indicated in the email. Mr V Sharma did not raise any new grounds for the adjournment.
- Notably, in neither the email nor in Mr V Sharma’s address to the Court was it contended that the applicant had not had ample notice of the interlocutory application being listed for 20 February, or that Mr Soubris’s withdrawal had taken the applicant by surprise. He had had notice of the listing from 17 December 2020 and of Mr Soubris’s intended withdrawal from at least 6 February 2020.
REFUSAL OF THE ADJOURNMENT
- The High Court made clear in Aon Risk Services Australia Limited v Australian National University  HCA 27; 239 CLR 175, that the types of matters that should be considered in the context of an adjournment application include: (a) the explanation for the adjournment; (b) the detriment to other parties; and (c) the detriment to the court and other litigants. That is not an exhaustive list.
- On the basis of the facts set out above, I took into account the following matters in refusing the applicant’s application for an adjournment of MCC’s interlocutory application.
- First, the applicant has delayed in the prosecution of this case. As indicated above, the originating application was filed on 29 November 2019, but it was never served and no application to serve outside of the jurisdiction was ever made. The applicant appears to have been content to have had the proceeding filed for the purpose of relying on it in the Indian proceeding without actually progressing the proceeding in this jurisdiction.
- Second, there is no suggestion that the applicant has been unable to appoint lawyers to represent him or that he does not have the means to ensure that his interests are properly represented. While he was participating in it, he was represented in the arbitration proceeding, he is represented in the Indian proceeding and he commenced the proceeding in this Court represented by a solicitor and a barrister. Moreover, the evidence of Mr Willis on affidavit is that the applicant manifests as a wealthy man with interests in real estate development, hotels and restaurants. In short, the applicant’s explanation for the need for the adjournment is unconvincing; to the extent that there is a need it has been created by him.
- I have had regard to the applicant’s difficulties arising from the death of his father to impact on his ability to travel. I do not accept that they prevented him from being reasonably able to appoint lawyers to represent him at the hearing in Sydney on 20 February 2020.
- Third, the applicant has not identified any basis upon which it might be suggested that the interlocutory application would not succeed; he has not filed any evidence and he has not identified any defence to the interlocutory application. The only suggestion is in his affidavit in support of the originating process in which he says that he received the final award on 2 October 2019.
- However, he does not say in terms that he did not also receive it at an earlier time, and, as will be seen, the evidence on the interlocutory application that the applicant in fact received the award much earlier than that is very strong. The applicant received notice of MCC’s contentions in that regard by email to Mr Soubris on 17 December 2019 (see at  above]) and he received MCC’s evidence in support of those contentions, and MCC’s submissions based on that evidence, on 8 February 2020 (see at  above), yet he never sought to dispute let alone answer that case.
- The applicant also does not suggest that the Court has the power to extend the time period of three months provided for in Art 34(3) of the Model Law or, if there is such a power, that there is any basis to exercise it in this case. It is thus not necessary to decide whether the time limit can be extended. The different positions on this question in a number of different jurisdictions are explored by Anselmo Reyes IJ in the Singapore International Commercial Court (SICC) in BXS v BXT  SGHC(I) 10 at -. His Honour concluded that there is no discretion in the SICC to extend the time period.
- In the absence of an express power given to the court in other legislation to extend the time period, which is the position in respect of this Court, the balance of authority heavily favours there being no power to extend the time period: Emerald Grain Australia Pty Ltd v Agrocorp International Pte Ltd  FCA 414; 314 ALR 299 at ; Hebei Jikai Industrial Group Co Ltd v Martin  FCA 228; 324 ALR 268 at - ; ABC Co v XYZ Co Ltd  SLR 546 at ; PT Pukuafu Indah v Newmont Indonesia Ltd  4 SLR 1157 at -; Opotiki Packing & Coolstorage Ltd v Opotiki Fruitgrowers Co-operative Ltd (In Receivership)  1 NZLR 205 at 210  and 219 ; Downer-Hill Joint Venture v Government of Fiji  1 NZLR 554 at  and ; Moohan v S. & R. Motors [Donegal] Ltd  IEHC 391 at [3.4]; Todd Petroleum Mining Co Ltd v Shell (Petroleum Mining) Co Ltd  NZCA 507;  2 NZLR 180 at ; Kyburn Investments Ltd v Beca Corporate Holdings Ltd  NZCA 290; 3 NZLR 644 at .
- Although, as explained, it is not necessary to decide the point, and it would be undesirable to do so without there having been any contradictor, I agree with the New Zealand Court of Appeal that “the whole scheme of the [Model Law] is to restrict court review of arbitration awards both with respect to grounds and time”: Opitiki at 220 . In the words of the Full Court in TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd  FCAFC 83; 232 FCR 361 at  per Allsop CJ, Middleton and Foster JJ, the Model Law requires for its efficacy “the swift and efficient judicial enforcement and recognition of contracts and awards”. That underlying policy also supports the proposition that the Court lacks the power to extend the time in Art 34(3).
- It is thus unlikely that even if the applicant had some basis to apply to extend the time period, and he made such an application, there would be any power in the Court to accede to such an application.
- The result is that on the available evidence there is simply no purpose in any adjournment; it would merely serve to delay what otherwise appears to be inevitable.
- Fourth, I took into account the overarching purpose of the civil practice and procedure outlined in ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth) (FCA Act), namely to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible.
- In my view, the applicant had ample notice of the listing of the interlocutory application, and of his solicitor’s intention to withdraw from representing him, yet he made no other arrangement to be legally represented at the hearing to oppose the interlocutory application. Moreover, he offered no defence to the interlocutory application. To have adjourned the interlocutory application to another day may have resulted in significant prejudice to MCC because of the possibility of further delay in the Indian proceedings and it would have served no identifiable legitimate purpose.
THE DISMISSAL OF THE PROCEEDING
- The adjournment application having been refused, the question of MCC’s interlocutory application arose for decision. In that regard, r 17.04 of the FCR provides that an interlocutory application can be heard and determined in the absence of a party if there was service of the interlocutory application and the party does not appear.
- As indicated above, Art 34(3) of the Model Law requires an application for setting aside an award to be made within three months “from the date on which the party making that application had received the award”. Bearing in mind that the applicant’s originating application for relief against the arbitral award was issued on 29 November 2019, the question is whether the applicant “had received the award” on or before 29 August 2019, i.e. three months’ earlier.
- MCC adduced the following evidence in support of its case that the applicant had received the award before 29 August 2019.
- First, MCC submitted that the applicant received the award from ACICA on 6 April 2018. The evidence in that regard is as follows.
- By letter dated 6 April 2018, Ms Deborah Tomkinson, the Secretary General of ACICA, wrote to the parties to the arbitration proceeding saying that ACICA had been asked by the arbitral tribunal to communicate its final award dated 4 April 2018. The letter stated that the final award is “enclosed” and that hard copies of the award would follow by courier.
- The letter was sent under cover of an email dated 6 April 2018 which was addressed to, amongst others, the applicant at the Sanya Builders email address and the applicant’s nominated counsel in the arbitration proceeding, namely Mr Kuldeep Rai SC, a Delhi advocate.
- The face of the email records that the attachments to it included the letter which I have referred to and the final award.
- Although he does not say what the source of his knowledge on the point is, Mr Willis in his affidavit says that a printed copy of the letter enclosing the final award was also sent by ACICA using a courier to the applicant’s postal address but that it was not accepted at that address.
- At no stage did the applicant dispute that he had received the award as an attachment to the email from Ms Tomkinson 6 April 2018. Moreover, by s 161 of the Evidence Act 1995 (Cth) it is presumed that he did receive the email and the attachment. There is nothing to raise sufficient doubt so as to displace that presumption.
- In the circumstances, I find that the applicant received the award on that date which was nearly 17 months before the commencement of the three month period preceding the date that the set aside proceeding was filed, or, simply put, some 20 months prior to the filing of the originating application in this Court..
- Second, MCC submitted that the applicant also received the award via the enforcement proceedings in India on 12 February 2019. The evidence in that regard is as follows.
- MCC commenced the Indian proceeding on 27 August 2018 by filing an enforcement petition pursuant to Pt II of the Indian Arbitration Act. The enforcement petition contained within it, as required by the Indian Arbitration Act, a notarised copy of the original of the final award.
- MCC’s Indian advocate, Mr Mohit Singh of P&A Law of New Delhi, sent a copy of the enforcement petition (including the award) to the applicant at his Sanya Builders email address on 12 February 2019 by email in two parts. Mr Singh deposed to an affidavit of service in the Indian proceeding which recorded that the High Court of Delhi had ordered that the applicant could be served “via all permissible modes including email” and that that had been done by serving a complete set of the enforcement petition including “documents” (which I understand to include the award) by email on the respondent on 12 February 2019.
- Mr Singh’s affidavit attached the two emails which showed that they were sent to the applicant at the Sanya Builders email address on 12 February 2019 and that they had as attachments a document titled “Enforcement Petition under 47 & 49…” in two parts.
- In the circumstances, I find that the applicant received the final award by email on or about 12 February 2019. That was some six months before the commencement of the three month period prior to the applicant’s proceeding being filed in this Court, or, nine months prior to the filing of the originating application in this Court.
- Third, MCC submits that the applicant received the final award by it being furnished to his solicitor in Sydney on 6 August 2019. The evidence in that regard is as follows.
- Mr Willis annexed to his affidavit a letter from ACICA to Mr Soubris dated 6 August 2019 which referenced the arbitral proceedings between MCC and the Indian parties. Relevantly, the letter stated as follows:
We refer to our previous correspondence in this matter, including our email to you dated 9 October 2018.
We also acknowledge receipt of your letter to the Australian Centre for International Commercial Arbitration (ACICA) dated 18 July 2019.
We understand you are authorised to act on behalf of Messrs Sanjay Sharma and Nitish Khetan in relation to the above-reference arbitration proceedings, which are closed.
Pursuant to your request, we enclose a certified copy of the original of the Final Award dated 4 April 2018 in the above-reference arbitration.
In relation to the other documents you have requested ACICA to provide you a copy, we are currently considering that request, including in light of the comments, if any, received from the Sole Arbitrator and the Claimant. …
- Mr Willis also tendered a courier’s waybill dated 6 August 2019 evidencing the shipment of a package of 0.8 kg from ACICA to Mr Soubris.
- In the applicant’s affidavit supporting the originating process he deals with the question of when he received a copy of the final award. In a heading in the affidavit it is stated “I/Mr Sharma did not have a signed copy of the Final Award…” Thereunder, the affidavit states that the address to which most of the written communications during the arbitration were sent to the applicant was not his address. That address is a physical address. The affidavit does not canvass the receipt of documents by email.
- The affidavit also deals with Mr Soubris having obtained documents from ACICA in September 2019 which were then made available to the applicant on 2 October 2019 which is when he says that he received the final award. These are apparently the documents referred to in ACICA’s letter of 6 August 2019 as being under further consideration. The affidavit does not deal with Mr Soubris’s receipt of that letter and the enclosed final award, save that it says that he was on an overseas holiday with his family from late July 2019 until 10 September 2019. In particular, the affidavit does not explain why receipt by Mr Soubris’s office of the final arbitration award on or about 6 August 2019 should not be taken as receipt by him of the award on that date. Nor does the affidavit say that the award was not forwarded to the applicant by Mr Soubris’s office in the absence of Mr Soubris.
- As the applicant’s affidavit was not read on the interlocutory application and he was not available for cross-examination, what he states in it is not strictly speaking evidence on the interlocutory application. I nevertheless take it into account for completeness to show that even if it was evidence in the interlocutory application it would not prove that the applicant did not receive the final award, at least in a deemed sense through it having been received at his solicitor’s office, on or about 6 August 2019.
- In the circumstances, I find that the applicant received a copy of the final arbitral award on or shortly after 6 August 2019. That was several weeks before the commencement of the three month period prior to the filing of the originating application in this Court. In view of my findings above that the applicant had in any event received the award on two earlier occasions, nothing turns on his receipt of the award on this third occasion.
- It follows, in the words of s 31A of the FCA Act and r 26.01(1)(a) of the FCR, that the applicant has no reasonable prospect of successfully prosecuting the proceeding and it should be summarily dismissed. The costs should follow the event.
Dated: 26 February 2020