Reeves v Alt Advisory (Jersey) Limited and Alt Financial Group Limited [2023] VSC 249 

Nikki Miller |  Chris Hey  |  Isobel Carmody | Phillip Martin

Key takeout

• Australian courts cannot refuse enforcement of a foreign arbitration award under s 8(5) of the International Arbitration Act 1974 (Act) where the party against whom enforcement is sought fails to participate in the enforcement proceedings. 
• The opportunity to refuse enforcement of the award under s 8(5) is only enlivened ‘at the request of the party against whom‘ the foreign award has been made.

Facts

Reeves entered into an employment agreement with ALT Advisory (Jersey) Limited, a company based in Jersey in the Channel Islands (ALT Jersey) and ALT Financial Group Limited, a company registered in Australia (ALT Australia) in May 2018.  Reeves was a director of each of ALT Jersey and ALT Australia, as well as chairman of the boards of directors.  ALT Australia provided a guarantee of ALT Jersey’s obligations under the employment agreement with Reeves.  Aside from dealing with renumeration and other employee entitlements, the employment agreement contained an arbitration agreement providing that any dispute was to be resolved under the rules of conciliation and arbitration of the International Chamber of Commerce.  The law applicable to the arbitration agreement was the law of England.

In December 2018, Reeves resigned from his employment.  He had a number of accrued entitlements under the employment agreement which were outstanding.  Reeves issued a notice of dispute in accordance with the dispute resolution process in the employment agreement and then filed a request for arbitration in July 2020.

ALT Australia challenged the arbitral tribunal’s jurisdiction on the basis that only a single director of ALT Australia had signed the employment agreement, contending that this ‘would, in all probability, make [the agreement] unenforceable‘ as against ALT Australia.  As a preliminary issue in the arbitration, the arbitral tribunal determined that ALT Australia was bound by the employment agreement.  Neither ALT Australia nor ALT Jersey participated in the arbitration after that point. The arbitral tribunal delivered an award in favour of Reeves.

ALT Australia and ALT Jersey did not comply with the arbitral award and did not pay Reeves any of the amount awarded by the tribunal.  Reeves applied for an order under s 8(2) of the Act for enforcement of the foreign arbitral award against the respondents in the Supreme Court of Victoria.  ALT Australia and ALT Jersey did not participate in the proceedings in the Supreme Court of Victoria

Decision

The court made orders for enforcement of the arbitral award pursuant to s 8(2) of the Act.

In doing so, the court considered the circumstances in which it may consider to refuse to enforce an arbitral award, as set out in s 8(5) of the Act.  Of particular relevance was s 8(5)(b) of the Act, which provides the court may refuse to enforce an award if the arbitration agreement is not valid under law.  The court’s entitlement to refuse enforcement of the award applying any of the circumstances in s 8(5) of the Act only arises ‘at the request of the party‘ against whom the award is otherwise to be enforced.  As the respondents did not participate in the court proceedings, they had not requested that the court refuse to enforce the award on the basis of any of the circumstances in s 8(5).  The court therefore could not consider refusing enforcement of the award on the based on s 8(5) as there was no request to do so.

The court also considered s 8(7) of the Act, which provides the court may refuse to enforce an award if it finds that the subject matter of the difference between the parties is not capable of being settled by arbitration, or it would be contrary to public policy to enforce the award.  The drafting in this section of the Act does not include the same drafting requiring the request of the party against whom the award is otherwise to be enforced.  The court concluded that there was nothing in the material before it to suggest it should not enforce the arbitral award on the basis of s 8(7) of the Act.

This decision emphasises the pro-arbitration approach of Australia’s international arbitration legislation – where a party who is successful in a foreign arbitration files the documents required by s 9 of the Act, Australian courts will generally make orders for enforcement of the arbitration award unless one of the circumstances in s 8(5) or s 8(7) of the Act exist.