Australia: Agreement for summary entry of arbitral award in event of default enforced - Australian court supports the flexibility of international arbitration under the New York Convention

Last Updated: 29 October 2013
Article by Michael Mitchell

Coeclerici Asia (Pte) Ltd v Gujarat NRE Coke Limited [2013] FCA 882

Judgment date: 30 August 2013

Jurisdiction: Federal Court of Australia1

In Brief

  • The Federal Court of Australia has enforced a settlement agreement by parties on the eve of arbitration in London, which provided for summary entry of an arbitral award in the event of default.
  • The award debtors sought to prevent enforcement of the summary award in both England and Australia. The English court declined to interfere. The Australian court did likewise and also held that it was bound by the decision of the English court, being the court of the seat of the arbitration.


Coeclerici Asia (Pte) Ltd (Coeclerici) was a Singaporean corporation. The first respondent, Gujarat NRE Coke Limited (Gujarat Coke) is a corporation incorporated under the laws of India. It is claimed to be the largest independent producer of metallurgical coke in India.

By a Purchase Agreement dated 15 September 2011 entered into between Coeclerici, as buyer, and Gujarat Coke, as seller (the Purchase Agreement), Coeclerici agreed to buy from Gujarat Coke 40,000 metric tonnes of metallurgical coke plus or minus 10% subject to shipping tolerance. Delivery was to take place within the first three calendar months of 2012. The Purchase Agreement contained a London arbitration clause2.

Coeclerici made a down-payment of USD 10 million. Additional terms could not be agreed and no coke was delivered. Coeclerici demanded the return of the down-payment, as well as USD 750,000 in liquidated damages. Gujarat Coke only repaid USD 2 million, in two instalments. Coeclerici invoked the London arbitration clause.

Before the arbitration could be heard, Gujarat Coke offered payment of an amount by instalments and Coeclerici accepted. The parties entered into a settlement agreement (the Payment Agreement), which provided for summary entry of an arbitral award in the event that an instalment was not paid. The Managing Director of Gujarat Coke was party to this agreement and guaranteed payment of the instalments.

Relevantly, clause 4 of the Payment Agreement provided:

"4. In the event that [Gujarat Coke] and the Guarantor fail to pay any of the Settlement Payments in accordance with this Payment Agreement, Coeclerici shall be entitled to resume the suspended arbitration proceedings and/or commence new arbitration proceedings in accordance with this Payment Agreement and the settlement in clause 3 shall be null and void. In that event, [Gujarat Coke] and the Guarantor expressly and irrevocably agree that Coeclerici will be entitled to an immediate consent award, without the need for any pleadings or hearings, for [the outstanding amounts, costs, expenses and interest]."

Failure to pay and entry of summary Award, over protests

Gujarat Coke and its Managing Director (the Respondents) failed to pay the first instalment, which was due on Friday, 1 February 2013.

On Monday, 4 February 2013, Coeclerici's solicitor sent an email to the arbitrators and to the solicitor for the Respondents, attaching the Payment Agreement and requesting that an immediate consent award be entered in accordance with clause 4. The solicitor for the Respondents replied the next day that he had not been able to get instructions as the principals of his client were "involved in a major international conference".

On 6 February 2013, Coeclerici's solicitor sent a further email request that an arbitral award be entered immediately. One of the arbitrators responded: "I confirm on behalf of the tribunal that it is now proceeding to an Award in this matter as requested by the Claimant. We hope to be in touch shortly with formal notice of publication of the Award."

However, on 7 February 2013, the solicitor for the Respondents sent a long email to the arbitrators which stated inter alia:

"... However we were surprised by the suggestion that the tribunal would proceed to its award without giving our clients a reasonable opportunity to put their case.

Our clients do not consider that they are in breach of the agreement. The sum claimed by the Claimant is very substantial. In our submission the tribunal simply does not have the power to proceed to an award at present. Our clients have a right to present their case and are in breach of no peremptory order. There are real issues for the tribunal to decide."

The email then went on to outline the submissions which the Respondents wished to make.

This email elicited a further exchange of detailed emails between the solicitors for each side which put further arguments for and against the entry of a summary award.

On 11 February 2013, the arbitrators sent an email to both solicitors, noting that:

"As the arbitrators see it, the Payment Agreement was a freestanding agreement made by sophisticated commercial parties who must/should have been aware of any possible complications arising from the need to obtain exchange control permission and who should therefore have made provision for any such contingency in that Agreement. ... The respondents appear to us to be in breach of the terms of the Payment Agreement and if we are correct in that conclusion then it seems to us that the claimants are entitled to the award which they now seek."

Despite a further protest from the solicitor for the Respondents, on 14 February 2013 the arbitrators made an award in favour of Coeclerici for USD 8.5 million plus interest and costs (the Award).

The Respondents fail to halt the Award in the English High Court of Justice

In England, the Respondents made an urgent application to the High Court of Justice, seeking to overturn the Award on the basis that it was "infected by serious irregularity"3 , as they were not given a reasonable opportunity to present their case. On 10 July 2013, Judge Mackie QC refused this application.

Enforcement against subsidiary in Australia

Gujarat Coke has a subsidiary in Australia which owns and operates two mines. Coeclerici moved to enforce the Award in Australia, by applying for an order under section 8(3) of the International Arbitration Act, which gives legal effect to the New York Convention in Australia4. Coeclerici also applied for an order appointing a receiver over the assets of the local subsidiary to effect the sale of its shares or otherwise to ensure that the Award debt was paid.

The Respondents appeared and vigorously opposed Coeclerici's application pursuant to section 8(5)(c) of the International Arbitration Act, on the basis that the arbitrators in London had not given them a reasonable opportunity to present their case. On this basis they also alleged that a breach of the rules of natural justice occurred in connection with the making of the Award, contract to section 8(7A) of the International Arbitration Act.


Foster J found against the Respondents on three distinct bases:

  1. Firstly, he found on the facts of the case that the Respondents had been given "more than a reasonable opportunity" to put their case before the arbitrators as to why a summary Award should not be made.
  2. Secondly, he found that the Respondents were estopped from raising these issues before him because they had already been decided by Judge Mackie QC in the English High Court. Although the precise details of the wording of the English and Australian Acts differed somewhat, nevertheless he noted:
  3. "... Gujarat Coke and [the Managing Director] ... submitted to that Court that they were shut out on 4 February 2013 by the arbitrators from making submissions in support of their opposition to the making of such an award. They also said that, thereafter, they were not afforded a reasonable opportunity to put their case. This last proposition was based upon the very same emails as were tendered before me in support of grounds 1 and 2 of the respondents' Amended Notice of Grounds of Opposition. Judge Mackie QC rejected all of these contentions. The issue has been determined by the English High Court of Justice and cannot be re litigated here. There is an issue estoppel. The matter is probably also res judicata."5

  1. Finally, he held as a separate ground that the English High Court of Justice was the court of the seat of the arbitration. Under the New York Convention, any application to set aside the Award should be made in that court:
  2. "Even if there were no issue estoppel or res judicata, it would generally be inappropriate for this Court, being the enforcement court of a Convention country, to reach a different conclusion on the same question as that reached by the court of the seat of the arbitration. It would be a rare case where such an outcome would be considered appropriate."6

Order to appoint receivers

Foster J agreed that a receiver should be appointed to the Australian subsidiary of Gujarat Coke in order to sell its shares or otherwise obtain payment of the Award debt:

"It seems to me that the Court may appoint receivers in aid of enforcement of a judgment at law if it can be shown that other methods of execution would be inadequate or extremely inconvenient. The guiding principle should be: What is just and convenient in all the circumstances of the case? ... The appointment of receivers ... is a convenient (and probably the most convenient) way of expeditiously effecting the sale of the relevant shares in aid of the judgment. In the end, it is likely to be less costly than proceeding down the charging order path."7


The Respondents have lodged an appeal against the decision. They applied for a stay of Foster J's judgment, but this was refused by Katzmann J on 6 September 2013. The present disposition of that appeal is unknown.


  • This decision emphasises the flexibility of international arbitral awards under the New York Convention, including as a means of enforcing agreements to settle arbitrated disputes.
  • Parties who are approaching an arbitration hearing may thus make a settlement agreement which provides for the enforcement of payment of liquidated sums by agreeing to a summary arbitral award in the event of default.
  • Whilst each case turns on its own facts, the readiness of both the English and Australian courts to quickly enforce this summary arbitral award will give parties to arbitration added confidence to enter into settlement agreements in appropriate cases, thus avoiding the necessity of a full arbitral hearing.


1Foster J
2To take place before three arbitrators in London under the auspices of the London Maritime Arbitrators' Association.
3Pursuant to section 68(1) of the Arbitration Act 1996 (UK)
4Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) (the New York Convention).
5Judgment at [102]
6Judgment at [103]
7Judgment at [108-109]

Ranked No 1 - Australia's fastest growing law firm' (Legal Partnership Survey, The Australian July 2010)

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.