Eopply, the award creditor, sought to enforce an arbitral award
made by China International Economic and Trade Arbitration
Commission (CIETAC) Shanghai Sub-Commission on 15 February 2012
against the respondent. The day before the first return of the
proceeding before the Court, Eopply received a letter informing
that liquidators had been appointed to the respondent for the
purpose of winding it up. The letter also confirmed that the
liquidators did not oppose leave to proceed being granted to Eopply
pursuant to s 500(2) of the Corporations Act 2001 (Cth)
nor did they oppose Eopply's claim.
CONSIDERATION FOR GRANTING LEAVE TO PROCEED UNDER SECTION
500(2) OF THE CORPORATIONS ACT
Section 500(2) of the Corporations Act provides that, after the
passing of a resolution for voluntary winding up of a corporation,
no action or other civil proceeding is to proceed against that
corporation except by leave of the Court and subject to such terms
as the Court imposes. In deciding whether to grant leave, Justice
Foster extracted the following considerations from the judgment in
Executive Director of the Department of Conservation and Land
Management v Ringfab Environmental Structures Pty Ltd 
The purpose of having a requirement for leave is to prevent a
corporation in liquidation being subjected to expensive, and
perhaps, unnecessary, actions.
In determining whether leave should be granted, the Court
considers whether the balance of convenience lies in allowing the
applicant to proceed by way of action to judgment, or whether the
applicant should be left to pursue its claim by lodging a proof of
debt with the liquidator.
For leave to be granted, it must be shown that there is a
serious or substantial question to be tried and a real dispute
between the parties.
With regard to the above, Justice Foster considered that:
If leave is granted, virtually no additional expense or
inconvenience will be visited upon the respondent and judgment will
be entered immediately.
When appropriate regard is had to section 2D of the
International Arbitration Act 1974 (Cth)
(IAA) which specifies the objects of the IAA and
to the matters set out in section 39 of the IAA (namely that
arbitration is intended to be an efficient, enforceable and timely
method of resolving commercial disputes and that awards are
intended to provide certainty and finality), there is good reason
to make the path to recovery by the award creditor easier by
granting leave and allowing judgment to be entered rather than
leave the award creditor to the vagaries of the proof of debt
There is no opposition to leave being granted.
Although Justice Foster was concerned that there was no evidence
before the Court as to the financial position of the respondent and
thus no basis upon which the Court could make an assessment as to
whether Eopply was likely to recover any part of the amount awarded
to it, his Honour was satisfied that the above considerations
weighed heavily in favour of the grant of leave. In his
Honour's judgment, there was no consideration of any moment
which would weigh in the balance against the grant of leave.
NO REQUIREMENT TO SEEK LEAVE TO ENFORCE A FOREIGN AWARD UNDER
Eopply also sought an order that it be granted leave to enforce
the award pursuant to section 8(3) of IAA, but Justice Foster
pointed out that there is no longer any need for an award
creditor/applicant to seek leave to enforce a foreign award.
Having satisfied itself that Eopply had produced to the Court,
pursuant to section 9 of the IAA, a duly certified copy of the
relevant arbitration agreement and the award (including a certified
English translation) and that neither the respondent nor its
liquidators had requested the Court not to enforce the award on one
or more of the exhaustive grounds specified in sections 8(5) and
(7) of the IAA, the Court proceeded to order that the award be duly
This decision reaffirms the Federal Court's commitment to
enforce foreign arbitral awards, consistent with the
pro-enforcement bias of the New York Convention. Unless the
resisting party is able to prove to the court's satisfaction
one of the grounds specified in sections 8(5) and 8(7) of the IAA,
the award creditor will be entitled to have the award(s) enforced
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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