Arbitration – practice and procedure

Enforcement of arbitration award – discretion of court to down judgment notwithstanding the parties’ settlement

In Hub Street Equipment Pty Ltd v Energy City Qatar Holding Company [2021] FCAFC 110 (25 June 2021), the Full Court allowed an appeal from a judgment enforcing an arbitration award under s8(3) of the International Arbitration Act 1974 (Cth).

The substantive issue in the appeal concerned whether the composition of the arbitral tribunal was in accordance with the agreement of the parties.

The matter also raised a question as to whether the court ccould or should proceed to hand down its judgment notwithstanding that the proceedings had ‘settled in principle’.

On 21 June 2021, the court was in full agreement as to the judgment to be handed down and intended to hand down judgment on 23 June 2021, subject to administrative matters.

The parties were to be notified on the morning of 21 June 2021. On that same morning (21 June), the appellant with the consent of the respondent sent an email to the court stating: “These proceedings have settled in principle, although the settlement remains subject to its terms being carried out. Should that occur, the parties anticipate that they will seek the leave of the Court to discontinue the appeal within 30 days. We are informing the Court of this development as a courtesy.”

The court communicated to the parties that it had intended to hand down judgment on 23 June 2021, and requested that the parties communicate as soon as possible their view as to whether the judgment should be handed down.

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The parties did not respond to this or another court communication.

Allsop CJ (with whom Middleton and Stewart JJ agreed) held that “important considerations of public policy and public interest support the judgment in this case being handed down” (at [5]); namely:

• the appeal raised points of law of general interest and it is in the public interest that these views are made the subject of a published judgment in order to facilitate the development of the law, and the provision of guidance to others (at [6])
• the judgment corrects errors of both law and fact in the judgment below (at [7])
• the stage at which preparation of judgment had reached was a relevant consideration (here, the judgment was complete at time of notification) (at [8])
• “whilst nothing in these reasons is intended to derogate from the dictum … that ‘the law … encourages reasonable settlements’, the parties had a long time in which they could have settled their dispute. They did not do so. The Court is unaware of the nature of the ‘in principle’ settlement” (at [9]).

Dan Star QC is a Senior Counsel at the Victorian Bar, ph (03) 9225 8757 or email danstar@vicbar.com.au. The full version of these judgments can be found at www.austlii.edu.au. Numbers in square brackets refer to a paragraph number in the judgment.