Australia

Part I: what can be enforced?

1. What arbitral “awards” can be enforced?

The Commonwealth of Australia is a federation of six states and two territories. The federal parliament and each state and territory parliament have enacted legislation to facilitate the conduct of arbitrations and the recognition and enforcement of arbitral awards.

At the federal level, the principal legislation is the International Arbitration Act 1974 (Cth) (IAA). Relevantly:

• Part II of the IAA gives legal effect to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (New York Convention);
• Part III of the IAA gives legal effect to the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration (as modified in 2006) (Model Law); and
• Part IV of the IAA gives legal effect to Chapters II to VII of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1966) (ICSID Convention).

At the state and territory level, each state and territory parliament has enacted uniform legislation based on the Model Law (Uniform Arbitration Acts), which govern the recognition and enforcement of domestic arbitral awards, being an award made in an arbitration:

• between parties who at the time of concluding the arbitration agreement have their places of business in Australia;
• between parties who have agreed in writing that any dispute between them is to be settled by arbitration; and
• to which the Model Law does not apply.

2. Formal requirements for an award to be enforceable

To be enforceable in Australia, an arbitral award must be in writing, must be signed by the tribunal (or the majority of the tribunal), must set out the reasons upon which the award is based (unless otherwise agreed), must set out the date and place of arbitration, and must be delivered to each party to the arbitration.

3. Orders on interim measures: enforceability

a. Foreign arbitrations

If a party fails to comply with an interim measure made by the arbitral tribunal in a foreign arbitration, the opposing party may apply to the Federal Court or the Supreme Court to enforce the interim measure. Alternatively, a party to a foreign arbitration may apply directly to the Federal Court or the Supreme Court for the court to make interim measures in aid of the foreign arbitration. This is discussed further in question III(12) below.

b. Domestic arbitrations

Similarly, if a party fails to comply with an interim measure made by the arbitral tribunal in a domestic arbitration, the opposing party may apply to the Supreme Court of any state or territory in Australia (or to an inferior court if the parties have agreed) to enforce the interim measure. Alternatively, a party to a domestic arbitration may apply directly to the Supreme Court of any state or territory for the court to make interim measures in aid of the domestic arbitration. This is discussed further in question IV(27) below.

4. Emergency awards: enforceability

Emergency arbitral awards are a recent development in international arbitration. The term is used to describe the practice of seeking urgent interim relief from an “emergency arbitrator”, prior to the formal appointment of the arbitral tribunal, rather than from the court. The enforceability of an emergency award has not yet been considered by an Australian court. However, it is to be noted that unlike in some other jurisdictions, the definition of “arbitral tribunal” in the relevant Australian legislation governing the recognition and enforcement of arbitral awards has not been extended to include the concept of an emergency arbitrator.

Part II: resisting enforcement

5. Enforceable arbitral awards

a. How can awards be set aside?

A party to a foreign arbitral award may apply to the Federal Court or a state or territory Supreme Court for an order that the award be set aside. Similarly, a party to a domestic arbitral award may apply to a state or territory Supreme Court for an order that the domestic award be set aside. The grounds upon which a foreign or a domestic award may be set aside are discussed at question II(5)(d) below.

b. Can enforcement be resisted if the respondent has not formally applied to set aside the award?

An Australian court may exercise its discretion not to enforce an arbitral award, regardless of whether a party to the award is resisting its enforcement, if the court finds either (a) the subject matter of the award is not capable of settlement by arbitration under the laws of the place where the court is sitting, or (b) to enforce the award would be contrary to the public policy of the place where the court is sitting.

c. Can non-parties seek annulment?

The ability to resist enforcement is limited to the party against whom enforcement of the award is sought. A third party has no standing to seek to have an award annulled.

d. Grounds for setting aside an award

The grounds on which a party may apply to an Australian court for orders setting aside an arbitral award are confined to those set out in the IAA (for foreign awards) and the Uniform Arbitration Acts (for domestic awards). The grounds are:

• a party to the arbitration agreement was incapacitated at the time the agreement was made;
• the arbitration agreement was not valid under the law of the arbitration agreement. If no law is specified, the law of the place where the award was made will apply;
• the party seeking to set aside the award was not given proper notice of the arbitrator’s appointment or the arbitration proceedings or was unable to present its case in the arbitration proceedings;
• the award deals with a dispute not contemplated by, or not falling within the terms of, the submission to arbitration, or the award contains a decision on a matter beyond the scope of the submission to arbitration; or
• the composition of the arbitral tribunal or the arbitral procedure was not in compliance with the arbitration agreement or, if no procedure was agreed to, the procedure was not in accordance with the law of the place where the arbitration took place.

In addition, the court has a discretion to set aside an award if:

• the subject matter of the award is not capable of settlement by arbitration under the laws of the state or territory where the court is sitting; or
• to enforce the award would be contrary to public policy.

e. Timelines to seek setting aside

An application to set aside a foreign or a domestic arbitral award must be made within three months of the party seeking to set aside the award receiving the award (or any corrected award).

f. Grounds to resist enforcement

The grounds for resisting recognition and enforcement of an arbitral award in Australia are confined to those set out in the IAA (for foreign awards) and the Uniform Arbitration Acts (for domestic awards). The grounds are the same as the grounds for seeking to have an award set aside described at question II(5)(d) above.

g. Which court to go to for setting aside?

A party seeking to set aside a foreign award may apply to the Federal Court or the Supreme Court of any state or territory in Australia. A party seeking to set aside a domestic arbitral award may apply to any state or territory Supreme Court (or a lower court if the parties agree). As a matter of practicality, a party seeking to set aside an award should bring the application in the same proceeding in which the enforcing party is seeking to enforce the award.

h. Formal requirements before court can grant setting aside

The formal requirements for setting aside an award are set out in the procedural rules of each court. Despite minor differences, the procedure in each court is largely the same and requires the party seeking to have the award set aside to file an originating application or summons identifying the grounds upon which enforcement is resisted.

The application should be accompanied by an affidavit providing evidence of the grounds for resisting enforcement and the date on which the party received the award. The application should also be accompanied by a copy of the arbitration agreement and a copy of the award, including the reasons for the award.

The application and the supporting material must be served on any party whose interests might be affected by the award being set aside.

i. Do courts grant stay on enforcement as an interim measure?

Where in any proceeding to enforce a foreign arbitral award the court is satisfied that an application to set aside or suspend the award has been made to a competent authority of the country in which, or under the law of which, the award was made, the Australian court may adjourn the Australian enforcement proceedings and order the party seeking to set aside the award to give suitable security.

Similarly, where in any proceeding to enforce a domestic arbitral award the court is satisfied that an application to set aside or suspend the award has been made to a court in the state or territory in Australia in which the award was made, the court may adjourn the enforcement proceedings and order the party seeking to set aside the award to provide appropriate security.

j. What is the appellate mechanism against the decision of the court at first instance?

Where a decision to enforce or set aside an arbitral award is made by a single judge of the Federal Court, an appeal will lie as of right to the Full Federal Court. Any further appeal to the High Court may only be brought if the High Court grants special leave to appeal. Generally, special leave will only be granted if the appeal raises an issue of public importance, or the determination of the appeal will resolve inconsistent decisions of lower courts.

Similarly, where a decision to enforce or set aside an arbitral award is made by a single judge of a state or territory Supreme Court, an appeal lies as of right to the Court of Appeal of that state or territory. Any further appeal to the High Court may only be brought if the High Court grants special leave.

Part III: enforcing foreign awards

6. New York Convention applicability

Enforcement under the New York Convention

The main avenue for enforcing a foreign arbitral award in Australia is Part II of the IAA which gives legal effect to the New York Convention. IAA s8 provides that a “foreign award” is binding on the parties to the award and may be enforced by an Australian court as if the award were a judgment or order of that court. A “foreign award” is defined in the IAA as “an arbitral award made, in pursuance of an arbitration agreement, in a country other than Australia, being an award in relation to which the [New York Convention] applies”.

Australia ratified the New York Convention without entering any reservations pursuant to Article 1(3). Further, as a result of amendments to the IAA in 2015, for the purposes of enforcing a foreign award in Australia under IAA Part II, there is no requirement that the foreign award sought to be enforced was made in a state which is a signatory to the New York Convention. Nor is there a requirement that the foreign award arise out of a legal relationship considered as commercial under Australian law.

Enforcement under the Model Law

Part III of the IAA gives legal effect to the Model Law. Chapter VIII of the Model Law contains provisions governing the recognition and enforcement of foreign arbitral awards. IAA s20 provides that when IAA Part II applies (enforcement under the New York Convention), the recognition and enforcement provisions in Chapter VIII of the Model Law have no application.

However, the recognition and enforcement provisions in the Model Law will still apply, for example, where a party seeks to enforce an arbitral award made in Australia between non-Australian parties. Such an award will not be governed by IAA Part II (New York Convention) because the award was made in Australia. Nor will the award be governed by the Uniform Arbitration Acts of each state and territory which govern domestic arbitrations made in Australia between parties whose place of business is in Australia.

Enforcement under the ICSID Convention

IAA Part IV gives legal effect to Chapters II to VII of the ICSID Convention. The ICSID Convention was established in 1966 to provide a mechanism for arbitration and other forms of dispute resolution concerning investment disputes between contracting states and nationals of contracting states. It was signed by Australia in 1975.

IAA ss33 and 35 provide that an award made under the ICSID Convention is binding on the parties to the dispute and may, with the leave of the court, be enforced in Australia in the Federal Court or a state or territory Supreme Court as if it were a judgment or order of that court.

IAA s34 provides that other laws relating to the recognition and enforcement of arbitral awards, including IAA Parts II and III, have no application to disputes within the jurisdiction of the ICSID Centre or an award under IAA Part IV.

7. Timelines for enforcement

The limitation periods for enforcing a foreign award are governed by the limitation laws applicable in the state or territory in which enforcement is sought.

If the award arises from an agreement to arbitrate contained in a deed under seal, the limitation period in most Australian states and territories is 12 years, except in Victoria and South Australia, where the limitation period is 15 years. If the award arises from a simple agreement not under seal, the limitation period in all Australian states and territories is six years, except in the Northern Territory, where the limitation period is three years.

The limitation period commences from the time the enforcing party becomes entitled to enforce the award.

8. Which court to go to? Relation with location of assets?

An application to enforce a foreign arbitral award under IAA Part II may be made to the Federal Court. A judgment of the Federal Court is enforceable anywhere in Australia.

Alternatively, an application to enforce a foreign arbitral award under IAA Part II may be made to a court of an Australian state or territory. Such applications would typically be made in the Supreme Court of that state or territory. A judgment of a state or territory court will be recognised and may be enforced in any other state or territory upon a copy of the judgment being lodged with the court of that other state.

9. Can non-parties resist enforcement?

The IAA provides that in any proceeding seeking the enforcement of a foreign arbitral award under IAA Part II, the court may, at the request of the party against whom it is invoked, refuse to enforce the award if the court is satisfied that one of the grounds identified at question 11(5)(d) above exists. This suggests that only the party against whom the award is being enforced has standing to resist enforcement.

10. Compelling disclosure of local assets? How to identify assets available for enforcement?

In Australia, it is generally not possible to compel a respondent to disclose their assets prior to the enforcement of an arbitral award. However, it is possible to conduct searches of public registers at any time to obtain limited information about a respondent’s financial position.

11. Are third-party funded awards enforceable?

In Australia, there are no restrictions on the enforcement of an arbitral award obtained in proceedings funded by a third-party funder. The High Court has held that there is no general public policy against litigation funding agreements and litigation funding is commonplace in Australia.

12. What interim reliefs are available pending enforcement of awards? Which of those reliefs are granted ex parte?

The Federal Court and the Supreme Court of each state and territory have power to make interim orders in proceedings before the court. This includes the power to make asset-freezing orders (Mareva injunctions) restraining a respondent from removing, diminishing, or disposing of its assets.

Article 17J of the Model Law, which is given force of law by IAA s16, provides that the Federal Court and the Supreme Court of each state and territory have the same power to issue an interim measure in relation to arbitration proceedings, irrespective of whether the place of the arbitration is Australia or elsewhere, as the courts have in relation to proceedings before the court.

Usually, freezing orders will be made on an interim ex parte basis in the first instance to preserve assets pending any contested hearing about the continuation of the freezing orders. Such orders have been granted by the Federal Court in aid of proceedings to enforce a foreign arbitral award in advance of the court delivering judgment in enforcement proceedings. In addition, the court may appoint a receiver to the award debtor’s assets to preserve them pending enforcement of the foreign award.

13. Formal requirements for enforcement application: what documents need to be filed in court?

Each court has its own rules and court forms. However, the procedure for making an application to enforce a foreign arbitral award is essentially the same, regardless of the court. Broadly, the documents which must be filed with the court are:

• an application seeking an order for enforcement;
• the original or certified copy of the arbitration agreement;
• the original or certified copy of the arbitral award;
• if the arbitral award is not in English, a certified translation of the award; and
• an affidavit setting out the background to the dispute, including the extent to which the respondent has failed to comply with the award, and the last known place of residence or business of the respondent.

14. Enforcing awards that have been annulled/set aside at other courts. Enforcing when an annulment application is pending at a foreign court

Under the IAA, an Australian court may refuse to enforce a foreign arbitral award if the award has been set aside or suspended by a competent authority of the country in which, or under the law of which, the foreign award was made. The IAA also allows an Australian court to decline to enforce a foreign arbitral award if it has not yet become binding, for example, if a stay has been ordered pending appeal.

Further, if an Australian court is satisfied that an application to set aside or suspend the foreign award has been made by a competent authority in the country in which it was made, or under the law of which the award was made, the Australian court may adjourn the proceedings to enforce the foreign award, either in full or in part, and order the party against whom enforcement is sought to give suitable security.

15. Once application for enforcement is allowed, how does the actual enforcement against assets work? What are the remedies available for tracing assets during enforcement proceedings including for assets disposed of by fraud?

Enforcement remedies

Under the IAA, a foreign arbitral award may be enforced in an Australian court as if it were a judgment of that court. The successful award creditor can apply to the court for various civil enforcement orders against the award debtor. This includes a writ of execution against any property or land owned by the award debtor, a garnishee order (requiring a third-party creditor of the award debtor to pay amounts that the third party owes to the award debtor directly to the award creditor), or a charging order (creating a security over specific assets owned by the award debtor and restraining the award debtor from dealing with those assets). It also includes the appointment of a receiver to the assets of the award debtor.

A successful award creditor can also apply to the Supreme Court of any state or territory for an order that the award debtor be publicly examined in court as to their assets and liabilities and their ability to meet the award debt. If the award debtor is a corporation, the award creditor can apply for an examination order against a current or former director or officer of the corporation.

If an arbitral award is made against an Australian registered corporation which defaults in payment of the award, a creditor can issue a statutory demand for payment of the award within 21 days. If the award debtor fails within that 21-day period to either pay the award or have the statutory demand set aside, the creditor is also able to commence proceedings seeking an order that the company be wound up and a liquidator appointed. Similarly, if the award is made against a natural person who is either in Australia or has a residential or business connection with Australia, the creditor is able to commence proceedings with the Federal Circuit and Family Court for an order that the debtor be declared bankrupt and a trustee in bankruptcy appointed to the debtor’s estate after taking the necessary steps to commence bankruptcy proceedings. The liquidator or trustee in bankruptcy can then require the award debtor to attend court and be examined as to their assets and liabilities.

Tracing

Tracing orders may be obtained by a court, not as a right or remedy, but as a process of demonstrating what has happened to certain assets. Tracing orders would typically be sought in circumstances where a claimant suspects that a respondent has distributed assets acquired with the claimant’s funds to a third party and, accordingly, would be sought as part of a separate claim against those third parties.

A third party may be held to be a party to the arbitration agreement by reason of the extended definition of that term in the IAA and the Uniform Arbitration Acts, notwithstanding they are not a signatory to the arbitration agreement. In this regard, both the IAA and the Uniform Arbitration Acts provide that a party to the arbitration agreement includes a party “claiming through or under a party to the arbitration agreement”.

Until recently, Australian courts have taken a narrow approach to determining when a third party falls within the “claiming through or under” provisions. However, more recently, the High Court has taken a more liberal view of these provisions.

16. What is the procedure for repatriation of sums awarded after obtaining an order for enforcement?

There are no special requirements in the IAA governing the transfer of funds received through enforcement of a foreign arbitral award to an overseas applicant. However, parties should consider any relevant sanctions and anti-money-laundering laws.

17. Do courts grant orders for security for costs?

The Federal Court and the Supreme Court of each state and territory have power to make interim orders in proceedings before the court, including orders for security for costs.

Article 17J of the Model Law, which is given force of law in Australia by IAA s16, provides that the Federal Court and the Supreme Court of each state and territory have the same power to issue interim measures in relation to arbitration proceedings, irrespective of whether the arbitration proceedings are in Australia, as they have in relation to proceedings before the court.

18. Exchange control regulations: do they affect payments to foreign award holders?

There are no specific exchange control regulations governing payments of foreign arbitral awards to foreign award holders. However, the parties should consider any relevant sanctions and anti-money-laundering laws.

19. Enforcing awards from non-New York convention places

As stated at question III(6) above, since 2015, for the purposes of enforcing a foreign arbitral award in Australia under IAA Part II, there is no requirement that the foreign award was made in a state which is a signatory to the New York Convention.

20. Enforcing against sovereigns

Under the Foreign States Immunities Act 1985 (Cth) (FSI Act), foreign states, including heads of state, are generally immune from court proceedings in Australia, unless the foreign state or foreign head of state has submitted to the jurisdiction of the Australian court or agreed to waive immunity.

This general right of immunity is subject to a number of exceptions under the FSI Act. This includes where the proceeding relates to a commercial transaction, a contract of employment, personal injury, death, or damage to property, the sovereign’s ownership or use of immovable property in Australia, ownership of copyrights, patents, or trademarks registered in Australia, membership of a body corporate, arbitrations where a state is party to an agreement to submit to arbitration, actions in rem, bills of exchange, and taxation under Australian law.

The High Court recently held that the Kingdom of Spain’s agreement to Articles 53, 54, and 55 of the ICSID Convention amounted to a waiver of immunity under the FSI Act, but only in respect of recognition and enforcement of the foreign award, not in respect of execution (Kingdom of Spain v Infrastructure Services Luxembourg S.a.r.l. (2023) 275 CLR 292 at [72] to [75]).

Similarly, the Federal Court recently held that, by being a party to the New York Convention, the Republic of India had given a “clear and unmistakable submission by agreement” to the Australian courts within the meaning of FSI Act s10(2), for the purposes of recognising and enforcing a foreign arbitral award (CCDM Holdings, LLC v Republic of India (No 3) [2023] FCA 1266 at [103]).

21. Appellate mechanism available?

Apart from applications to set aside or resist enforcement, the IAA does not provide any basis on which a party may appeal a foreign arbitral award.

Where an order to enforce a foreign award has been made by the Federal Court, the parties may appeal to the Full Federal Court. Where an order to enforce a foreign arbitral award has been made by a state or territory Supreme Court, the parties may appeal to the Court of Appeal in that state or territory. Any further appeal from the Full Federal Court or from the state or territory Court of Appeal to the High Court may only be made if the High Court grants special leave to appeal.

Part IV: enforcing domestic awards

22. Timelines for enforcement

The limitation periods for enforcing a domestic award are regulated by the limitation of actions laws in the jurisdiction where the award is being enforced and are as set out at question III(7) above. The limitation period commences from the time the enforcing party becomes entitled to enforce the award.

23. Which court to go to? Relation with location of assets?

An application to enforce a domestic arbitral award may be made to the Supreme Court of each state or territory of Australia, or to a lower state or territory court if the parties have agreed. Irrespective of the state or territory in which it was made, a domestic award is recognised and may on application to the court be enforced in any state or territory of Australia.

24. Compelling disclosure of local assets? How to identify assets available for enforcement?

In Australia, there is no general right to compel a respondent to arbitration proceedings to disclose their assets prior to obtaining an award against them. However, it is possible to conduct searches of public records to obtain some limited information concerning a respondent’s financial position.

25. Are third-party funded awards enforceable?

In Australia, there are no restrictions on the enforceability of an arbitral award obtained in proceedings funded by a third-party funder.

26. What interim reliefs are available pending enforcement of awards? Which of those reliefs are granted ex parte?

A party to a domestic commercial arbitration in Australia may apply directly to any state or territory Supreme Court for interim measures to be made by the court in respect of the arbitration proceeding without first having to apply and obtain such an order from the arbitral tribunal.

The Supreme Court of each state and territory has power to make interim orders in proceedings properly before the court. Such orders include asset-freezing orders (Mareva injunctions). which restrain a respondent from removing, diminishing, or disposing of its assets up to a specified amount.

Under the Uniform Arbitration Acts, the Supreme Court of each state and territory has the same power to award interim relief in relation to domestic arbitration proceedings as it does in relation to proceedings before the court and is to exercise such power in accordance with its own procedures, taking into account the specific features of a domestic arbitration.

An application for a freezing order is usually made prior to service of the proceedings and without notice to the respondent. However, it is possible to apply for a freezing order at any time, including after the making of the arbitral award.

27. Formal requirements for enforcement application: what documents need to be filed in court?

An application to enforce a domestic commercial arbitration must be commenced by an originating application or summons in accordance with the rules and practice notes of the court in which the application for enforcement is made.

An application for enforcement must be supported by an affidavit exhibiting the arbitration agreement and the award, stating the extent to which the award has not been complied with and the last known place of residence or business of the person against whom enforcement is sought, or if a corporation, its registered office.

If the award is not in English, the court may ask the enforcing party to supply a translation of the award in English.

The application for enforcement must be served on the respondent so that they can elect whether to resist enforcement of the award and/or seek to have the award set aside.

28. Filing for enforcement when application for annulment is pending

An application for the annulment or setting aside of a domestic arbitral award will not automatically stay an enforcement proceeding in respect of the same award. However, the court has a discretion to adjourn the enforcement proceeding pending resolution of the application for annulment or setting aside.

Any decision to adjourn the enforcement proceeding is to be exercised cautiously, having regard to the principles of the Uniform Arbitration Acts which seek to strike a balance in favour of court support for arbitral processes rather than intervention in those processes.

29. Once application for enforcement is allowed, how does the actual enforcement against assets work? What are the remedies available for tracing assets during enforcement proceedings including for assets disposed of by fraud?

Once the award has been recognised, a successful award creditor can seek various civil enforcement orders against an award debtor. The types of remedies available are discussed at question III(15) above.

Tracing may be conducted by the court, not as a right or remedy, but as a process of demonstrating what has happened to certain assets. Tracing orders are typically sought in circumstances where an applicant suspects that assets have been distributed by a respondent to third parties and, accordingly, are usually sought as part of separate legal proceedings against those third parties.

30. Do courts grant orders for security for costs?

A respondent to a domestic arbitration can apply to the arbitral tribunal for an order that the applicant provide security for the respondent’s costs of the arbitration pursuant to s17(3)(a) of the Uniform Arbitration Acts. If the party ordered to provide security fails to comply with the tribunal’s order, the party in whose favour the order was made can seek to enforce the arbitral tribunal’s order by applying to the court pursuant to s17H of the Uniform Arbitration Acts, subject to the grounds of refusal in s17I.

A respondent to a domestic commercial arbitration can also apply directly to the court for an order that the applicant provide security for the respondent’s costs of the arbitration pursuant to s17J of the Uniform Arbitration Acts. That section provides that the court has the same power to issue interim measures in relation to arbitration proceedings as it has in relation to proceedings before the court, including ordering security for costs.

31. Appellate mechanism available?

Section 34A of the Uniform Arbitration Acts provides a limited “opt in” right to appeal to the court on a question of law arising from a domestic arbitration provided the following three conditions are met:

• the appeal is brought within three months of the date on which the party making the appeal received the award;
• the parties agree within that three-month period that an appeal may be made; and
• the court grants leave to appeal.

Section 34A(3) further provides that the court must not grant leave to appeal unless:

• the determination of the question will substantially affect the rights of one or more of the parties;
• the question is one which the arbitral tribunal was asked to determine;
• based on the findings of fact in the award:
• the decision of the tribunal on the question is obviously wrong; or
• the question is one of general public importance and the decision of the tribunal is at least open to serious doubt; and
• it is just and proper in all the circumstances for the court to determine the question.

Alternatively, the parties to the arbitration may agree an appeal procedure within the scope of the referral to arbitration itself.