His Honour held that the Applicant was entitled to indemnity costs, applying conventional authority, because:
• no coherent challenge was made by the Respondents in seeking to resist enforcement;
• notwithstanding that they were given the opportunity to do so, the Respondents failed to adduce any evidence in support of the lack of procedural fairness ground;
• the Respondents advanced other untenable grounds;
• in sum, the inescapable conclusion was that enforcement of the award was resisted in circumstances where the Respondents, properly advised, should have known that there were no reasonable prospects of resisting enforcement.
So far the above is relatively unremarkable. What is of particular interest is Allsop CJ’s closing remarks (at 23]):
‘It is both unnecessary, and, sitting at first instance, inappropriate, to decide theobiterquestion whether the Hong Kong approach should be preferred and adopted in Australia. There can be seen to be powerful considerations to that effect. See generally the discussion, though without the benefit of argument, in “Public Policy in the New York Convention and the Model Law”, Enforcement of International Arbitration Awards and Public Policy: Part III(Paper presented to the AMTAC and Holding Redlich Seminar, Sydney, 10 November 2014) at [56]-[77]. The parties have had their dispute resolved under contract by the tribunal of their choice. The NYC and the [IAA] have limited and constrained bases for resistance to paying an award sum that is the contractually provided outcome of a dispute. It is not merely a debt, it is the resolution of a dispute by a chosen contractual mechanism. Courts should be astute to distinguish between conduct that reflects no more than an attempt to delay or impede payment and the reasonable invocation of the proper protections built into the NYC and the [IAA].
Comment
In the earlier address referred to by Allsop CJ, his Honour argued that the approach of the Victorian Court of Appeal in Altain Khuder operates on the (mistaken) assumption that enforcement proceedings are substantially the same as other proceedings brought in Australian courts. Allsop CJ stated:
‘Commencing litigation to resist enforcement (if without foundation) may be viewed first and foremost as an abandonment of that contractual bargain. The United Kingdom is explicit in referring to this as a breach of contractual obligations. It may be said that there is a public policy interest in discouraging parties from abandoning promises made by way of contract. Distinguishing it from other kinds of proceedings, the very act of commencing (unsuccessful) litigation to resist enforcement is itself an attempt to subvert a dispute resolution agreed upon by the parties, a repudiation of a contractual undertaking that causes further, unnecessary damage to the innocent party.’8
In contrast, in Sino Dragon Trading Ltd v Noble Resources International Pte Ltd (No. 2),9 Edelman J doubted the legitimacy of a default indemnity costs rule in arbitration-related court proceedings.
In John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd (No 2),10 Hammerschlag J noted, in the context of an arbitration under the Commercial Arbitration Act 2010 (NSW), that one of the reasons for not following the Hong Kong approach is the fact that ‘…the Legislature could have, but did not, create or recognise any such categories for an award of indemnity costs in the Act’.11