Australian Recognition and Enforcement of Foreign Charterparty Arbitration Clauses: Norden v. Gladstone

Abstract

The Norden case raised within Australia two familiar and related issues of policy in the carriage of goods by sea, namely protectionism and foreign arbitration. In the process it answered a very practical question about the extent to which a London (or any foreign) charterparty arbitration clause might be recognised and enforced in Australian courts. Arbitration, particularly maritime arbitration, is a big business; major centres, such as London or New York, are looked at with some envy by many States with nascent dispute resolution industries (especially by their lawyers and would-be arbitrators). In the Asia Pacific region, in particular, there is growing expertise and interest in capturing some of that business. States such as Singapore and Australia are actively promoting their own arbitration and mediation centres, but how far can such policy be assisted indirectly by protectionist legislation dating back to the early nineteenth century, especially in the modern context of the mutual recognition of arbitration awards under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (“New York Convention”)? Norden involved a shipment of coal from Australia to China under an AMWELSH 93 voyage charter with a standard London law and arbitration clause. A demurrage dispute was referred by the owners to arbitration, and the arbitrator issued two awards in their favour. The owners then sought recognition and enforcement of the awards in Australia under legislation giving effect to the New York Convention. The charterers contested the application on two grounds: (i) that they were not named as a contracting party on the face of the charter, and (ii) that the arbitration clause was invalid and of no effect by reason of the operation of s.11 of the Carriage of Goods by Sea Act 1991 (Cth) (“COGSA 1991”). The charterers lost on the first ground before Foster J at first instance (as they had before the arbitrator); the issue (though of practical interest as to identifying parties in recap emails) was not pursued on appeal to the Full Court of the Federal Court of Australia, and will not be discussed here. Of more significance was the discussion of the second ground, which rested on both a point of statutory interpretation and some longstanding authority. The charterers succeeded on this issue before Foster J, but that decision was reversed on appeal by a majority in the Full Court (Rares and Mansfield JJ).

JEL Classification: K00