The High Court of Australia (High Court) has unanimously held
that the Supreme Court of Western Australia (WA Supreme Court) has
the inherent power to make a freezing order over assets in Western
Australia that are subject to an anticipated judgment of a foreign
court which, when delivered, would be registrable under the Foreign
Judgments Act 1991 (Cth) (Foreign Judgments Act).
PT Bayan Resources TBK (Bayan), an Indonesian entity, entered
into a joint venture agreement with BCBC Singapore Pte Ltd (BCBC),
a Singaporean entity. BCBC commenced proceedings against Bayan in
the High Court of Singapore earlier this year. Bayan owns shares in
Kangaroo Resources Limited (KRL), an ASX-listed company based in
Perth. BCBC made an ex parte application to the WA Supreme Court
seeking freezing orders against KRL and Bayan in respect of
Bayan's shareholdings in KRL.
The WA Supreme Court granted BCBC's application. KRL and
Bayan challenged the decision. The Court of Appeal dismissed the
freezing order against KRL, but upheld the order against Bayan.
Bayan subsequently appealed to the High Court.
Bayan argued that the making of a freezing order against an
anticipated judgment of a foreign court is beyond the inherent
powers of the WA Supreme Court. The High Court rejected this
argument and held that the Foreign Judgments Act's
comprehensive scheme does not limit the inherent powers of any
The High Court also held that the Foreign Judgments Act vests
superior courts with federal jurisdiction that encompasses the
totality of issues that arise for determination in the curial
processes which flow, directly or indirectly, from the making of an
application to enforce a foreign judgment under the Foreign
Judgments Act, including the making of freezing orders.
Significantly, the High Court affirmed that the WA Supreme
Court's status as a superior court in Western Australia implies
that it has a broad inherent jurisdiction to administer law and
make orders (including freezing orders). The High Court also
referred to its previous decisions which establish that the
inherent power of superior courts includes the power to make
orders, such as freezing orders, to prevent the abuse or
frustration of its processes in relation to matters coming within
This decision has clarified that the WA Supreme Court can make
freezing orders on assets within its jurisdiction, in respect to
anticipated judgements of foreign courts that would be registrable
under the Foreign Judgments Act. The decision should be welcomed by
the business community in the Asia-Pacific Region as it provides
protection against the dissipation of assets when doing business in
The criteria on which the WA Supreme Court will consider
freezing order applications in respect to anticipated foreign
judgments include where:
the applicant has a good arguable
case on an accrued/prospective cause of action that is capable of
being heard in a court outside Australia;
there is a sufficient prospect that
the foreign court will give judgment in favour of the
there is a sufficient prospect that
the judgment will be registered in or enforced by the WA Supreme
the WA Supreme Court is satisfied
that there is a danger the prospective judgment will be wholly or
partly unsatisfied because assets may be removed from Australia,
disposed of, or diminished in value.
Importantly, Australian companies doing business abroad should
understand that their assets in Australia may be at risk of being
subject to a freezing order in circumstances where disputes are
referred to foreign courts (prior to any judgment being delivered
in the foreign court).
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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