Rizhao Steel Holding Group Co Ltd v Koolan Iron Ore Pty Ltd

---

(Judgment by: Murphy JA)

Rizhao Steel Holding Group Co Ltd
v Koolan Iron Ore Pty Ltd

Court:

Judges: Martin CJ
Buss JA

Murphy JA

Hearing date: 12 August 2011
Judgment date: 9 March 2012

---

Judgment by:
Murphy JA

[154] I have had the advantage of reading, in draft, the reasons of Martin CJ. I agree that the appeals should be dismissed. I respectfully agree with his Honour's reasons on the question of whether the orders below were interlocutory, whether the appellants should be permitted to raise a new point on appeal, and on the question of prejudice to the respondents. I also agree with his Honour's reasons on the proper construction of s 21 of the International Arbitration Act 1974 (Cth) (the IA Act) prior to its repeal and substitution in July 2010 by the International Arbitration Amendment Act 2010 (Cth) (the Amendment Act). Subject to what follows, I am also in general agreement with Martin CJ's reasons in relation to the operation of the current s 21 of the IA Act. I wish, however, to explain further why I would not accept the appellants' contention that the repeal and substitution effected by the Amendment Act in relation to s 21 of the IA Act merely operated as a law with respect to procedure and did not affect accrued rights in this case.

[155] In this context, the question for consideration which arises in these appeals is whether the repeal of s 21 of the IA Act and the substitution of a new provision in its place, operates upon existing arbitrations which were underway pursuant to references which were entered into in accordance with the law as it stood prior to the relevant repeal and substitution. These appeals do not call for a determination of the effect of the repeal and substitution of s 21 with respect to agreements under which the parties had not referred their disputes at the time of the commencement of the Amendment Act.

[156] In light of the appellants' concession referred to by Martin CJ at [65]-[67] of his Honour's reasons, I would, if necessary, have also allowed the respondents' notice of contention as an alternative basis for upholding the order below.

Sections 16 and 21 of the International Arbitration Act

[157] At all material times, s 16(1) of the IA Act (within Pt III Div 2 of the IA Act headed "Model Law") provided:

16 Model Law to have force of law

(1)

Subject to this Part, the Model Law has the force of law in Australia.

[158] Article 1(1) of the Model Law applied the Model Law to "international commercial arbitration" and Art 1(3) (read with Art 2(a)), in effect, defined when an "arbitration" was "international". It was common ground that each of the arbitrations pursuant to the arbitration agreements in this case was an "international commercial arbitration" within the meaning of Art 1 of the Model Law. Accordingly, by s 16 of the IA Act, the Model Law applied by force of law to the arbitrations in question, subject to the remainder of Pt III of the IA Act.

[159] The agreements in connection with which these appeals are concerned were entered into in 2007.

[160] At the time the agreements were entered into (and prior to 6 July 2010), s 21 of the IA Act (also within Pt III Div 2) provided:

If the parties to an arbitration agreement have (whether in the agreement or in any other document in writing) agreed that any dispute that has arisen or may arise between them is to be settled otherwise than in accordance with the Model Law, the Model Law does not apply in relation to the settlement of that dispute.

[161] On 6 July 2010, the Amendment Act relevantly commenced operation. The Amendment Act (by Sch 1) provided, amongst other things:

1 At the end of Part 1

Add:

2D Objects of this Act

The objects of this Act are:

(a)

to facilitate international trade and commerce by encouraging the use of arbitration as a method of resolving disputes; and

(b)

to facilitate the use of arbitration agreements made in relation to international trade and commerce; and

(c)

to facilitate the recognition and enforcement of arbitral awards made in relation to international trade and commerce; and

(d)

to give effect to Australia's obligations under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted in 1958 by the United Nations Conference on International Commercial Arbitration at its twenty-fourth meeting; and

(e)

to give effect to the UNCITRAL Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law on 21 June 1985 and amended by the United Nations Commission on International Trade Law on 7 July 2006; and

(f)

to give effect to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States signed by Australia on 24 March 1975.

...

16 Section 21

Repeal the section, substitute:

21 Model Law covers the field

If the Model Law applies to an arbitration, the law of a State or Territory relating to arbitration does not apply to that arbitration.

[162] Part 2 of Sch 1 to the Amendment Act contained a number of provisions which expressly referred to the circumstances in which a number of amendments effected by the Amendment Act were to apply. For example, item 4 makes further provision for what may be said to constitute "an agreement in writing". It applies in relation to agreements entered into on or after the commencement of the item. Items 5 to 9, 10, 24 and 25 concern the recognition and enforcement of awards. Items 5 to 9, 24 and 25 apply to proceedings brought on or after the commencement of those items. Item 10 has, in effect, express retrospective operation. Item 14, in substance, amends certain provisions of the Model Law, including Art 12 and, in effect, is given a prospective operation in relation to the amendments to Art 12 of the Model Law. Items 18 to 23 contain various provisions, many of which might well be regarded as merely procedural and, notwithstanding their character, are said to apply only prospectively. However, Pt 2 of Sch 1 to the Amendment Act does not address item 16 in Pt III Div 2 of the IA Act.

The arbitration agreements and their construction and effect

Terms

[163] Each of the contracts between the parties contained, relevantly, the following terms:

20 Dispute Resolution

20.1 Resolution of Disputes.

If any dispute or difference of any kind (Dispute) arises between the

Parties out of or in connection with this agreement, the Parties shall use all reasonable endeavours to resolve that Dispute as soon as possible.

...

20.3 Referral of Dispute for determination

If the Parties cannot resolve the Dispute within 14 days of it first arising, and the Dispute relates to:

...

(b) any other matter referred to in, or contemplated by this agreement, then that Dispute shall be referred to arbitration in accordance with the Commercial Arbitration Act 1985 (WA).

... ..

20.5 Determination by arbitration

In the case of a Dispute to which cl 20.3(b) applies and unless the Parties otherwise agree in writing:

(a)

the place of arbitration shall be Perth, Western Australia;

(b)

the parties to the arbitration shall be entitled to legal representation;

(c)

the arbitrator shall be appointed by the President for the time being of the Perth Branch of the Australasian Institute of Mining and Metallurgy;

(d)

the arbitrator shall deliver his decision within 21 days after the conclusion of the hearing, provided that the arbitrator shall have power to extend this time for a further period of 21 days as he deems necessary; and

(e)

the costs of such referral and award shall be at the discretion of the arbitrator.

20.6 Arbitration award final

(a)

Any arbitral award shall be final and binding on the Parties.

(b)

The Parties shall carry out any arbitral award without delay. The arbitral tribunal shall state the reasons upon which the award is based. No Party shall appeal to any court against an arbitral award which is properly and lawfully made in accordance with this agreement.

20.7 Enforcement of judgment

Judgment on the award rendered may be entered in any court having jurisdiction or application may be made to such court for judicial acceptance of the award and an order of enforcement.

[164] Clause 21.7 of each agreement provided that it was governed by the laws in force in Western Australia and, where applicable, the Commonwealth of Australia. Clause 21.8 excluded the application of the Vienna Convention on the Sale of Goods.

Construction

[165] An arbitration clause is considered to be a contract independent of the underlying contract in which it is contained -and for that reason survives termination of the underlying contract: Ferris v Plaister (1994) 34 NSWLR 474 at 484 496-497 500-501 and 503-504; Harbour Assurance Co (UK) Ltd v Kansa General International Insurance Co Ltd (1993) 3 WLR 42 at 52-54 and 61; Heyman v Darwins Ltd [1942] AC 356 at 374; Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corp Ltd [1981] 2 WLR 141 at 166.

[166] The terms of an arbitration agreement bind the parties and the arbitrator who enters upon a reference pursuant to the arbitration agreement: Esso Australia Resources Ltd v Plowman [1995] HCA 19 ; (1995) 183 CLR 10, 29. In this regard, there is a further agreement which arises when a dispute is referred to arbitration, which is subsidiary to, but separate from, the arbitration agreement itself: Black Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1981] 2 Lloyd's Rep 446, 454-455; Sumitomo Heavy Industries Ltd v Oil and Natural Gas Commission [1994] 1 Lloyd's Rep 45, 57; C v D [2007] EWCA (Comm) 1541 [43].

[167] By cl 20.5(a), particularly read in the context of cls 20.5(c) and 21.7, the parties agreed, in effect, that the "seat" of the arbitration would be Western Australia -- the "seat" being a juridical concept identifying the "legal place" of the arbitration: Raguz v Sullivan (2000) 50 NSWLR 236 ; [2000] NSWCA 240, 254-257, 259.

[168] Both by implication from the agreed seat of the arbitration, and expressly by cl 20.3(b), the parties agreed that the curial or procedural law of the arbitration of the relevant disputes would be the law applying in Western Australia. As to the system of curial law generally being implied by the agreement of the seat of an arbitration, and the seat of the arbitration generally being implied by the agreement as to the curial law, see for example: Naviera Amazonica Peruana SA v Compania Internacional de Seguros del Peru [1988] 1 Lloyd's Rep 116, 119-120; Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] 1 AC 334 at 357-358; Union of India v McDonnell Douglas Corporation [1993] 2 Lloyd's Rep 48, 50; Sumitomo v Oil and Natural GasAmerican Diagnostica Inc v Gradipore Ltd (1998) 44 NSWLR 312 at 324.

[169] It was common ground in this appeal that on the proper construction of the arbitration agreements, the parties agreed that relevant disputes were to be settled "otherwise than in accordance with the Model Law", within the meaning of s 21 of the IA Act as it stood prior to the commencement of the Amendment Act. In this regard, see, eg, Aerospatiale Holdings Australia Pty Ltd v Elspan International Ltd (1992) 28 NSWLR 321 at 325 (in relation to a clause with similar wording) and Cargill International SA v Peabody Australia Mining Ltd [2010] NSWSC 887 [55]-[57]; American Diagnostica Inc v Gradipore Ltd (323). This is not a case where the parties have merely agreed that a set of procedural rules is to apply and the question is whether the agreement as to the application of the procedural rules is sufficient to exclude the Model Law as the curial or procedural law -- see Cargill v Peabody; cf Australian Granites Ltd v Eisenwerk Hensel Bayreuth Dipl.-ing Burkhardt GmbH [2001] 1 Qd R 461.

[170] Accordingly, in my view, the parties had agreed, and the agreement was sanctioned by s 21 of the IA Act at the time, that their disputes were to be referred to arbitration in Western Australia and that the curial or procedural law of the arbitration should be the Commercial Arbitration Act and not the Model Law.

[171] By the arbitration agreement, properly construed, the parties also agreed that the Commercial Arbitration Act should apply as it stood at the time that a dispute is referred to arbitration. That is so because under cl 20.3(b) the parties have agreed that the Commercial Arbitration Act is to apply at the point in time when the unresolved dispute is referred to arbitration.

[172] Finally, I would add that the meaning of cl 20.6(b) was not debated in this appeal, and it is not necessary to consider whether it operated as an effective "exclusion agreement" within the meaning of ss 40(1) and 41 of the Commercial Arbitration Act, either with respect to judicial review of an award under s 38(2) or the determination of a question of law under s 39(1) of the Commercial Arbitration Act.

The arbitration proceedings

[173] Disputes arose between the parties in 2008 within the meaning of cl 20.3(b) and the disputes were referred to arbitration in accordance with the agreements.

[174] On 16 February 2009, the arbitrator (the Hon Murray Gleeson AC QC) was appointed an arbitrator by the chairman of the Perth Branch of the Australasian Institute of Mining and Metallurgy, at the joint request of the parties.

[175] There were various interlocutory proceedings in the arbitration over the period 5 March 2009 to February 2010.

[176] The hearing of the arbitration commenced in Perth on 22 March 2010. The hearing continued until 1 April 2010, when, by consent, it was adjourned until 1 July 2010. The hearing resumed in Perth on 1 July 2010 and concluded on 8 July 2010.

[177] On 16 August 2010, the arbitrator delivered his awards pursuant to the references under the arbitration agreements.

[178] The arbitrator recorded (Award para 20):

20. It is common ground between the parties that the arbitrator has jurisdiction to hear and determine the disputes set out in the Points of Claim and the Counterclaim referred to below. For the avoidance of doubt, on the first day of the hearing the parties made application for an order under s 25 of the Commercial Arbitration Act 1925 (WA) [sic 1985] directing that the arbitration be extended to include all the disputes referred to in or arising out of the Points of Claim and Counterclaim in their final amended forms, and such an order was made.

Arbitral procedural law

[179] Although the parties agreed that the procedural law of the arbitration should be the Commercial Arbitration Act, as Toulson J (as his Lordship then was) observed in XL Insurance Ltd v Owens Corning [2000] 2 Lloyd's Rep 500, 507, in relation to broadly analogous UK legislation:

Arbitration law is all about a particular method of resolving disputes. Its substances and processes are closely intertwined. The Arbitration Act contains various provisions which could not readily be separated into boxes labelled substantive arbitration law or procedural law, because that would be an artificial division.

[180] Similarly, in American Diagnostica Inc v Gradipore (324), Giles CJ Comm D said:

Although the law governing the conduct of the arbitration (the lex arbitri) is said to be concerned only with procedural matters, it goes beyond, for example, the production of documents or the order of witnesses. The appointment, removal, and replacement of arbitrators, time-limits, interim relief, consolidation of arbitrations, representation before the arbitrator, the form and validity of the award, and the finality of the award, are amongst the matters which can fall within the lex arbitri.

[181] The Commercial Arbitration Act 1985 (WA) is a statute which broadly followed the form of similar statutes in other States and Territories.

[182] In PMT Partners Pty Ltd (in liq) v Australian National Parks and Wildlife Service [1995] HCA 36 ; (1995) 184 CLR 301, 319 Toohey and Gummow JJ described cognate Northern Territory legislation in these terms:

One evident object of the Act is to encourage resolution by arbitration of disputes. But the legislation has a system of checks and balances. Thus, it provides for review of awards by the Court in respect of questions of law (s 38) and the determination of preliminary points of law by the Court (s 39); in certain circumstances, the rights to approach the Court under ss 38 and 39 may be excluded (ss 40, 41). The Court may stay proceedings brought in respect of a matter agreed to be referred to arbitration (s 53). On the other hand, a " Scott v Avery clause" does not, in the circumstances described in s 55, operate to prevent the institution of legal proceedings on the matter in dispute and is to be construed as an agreement to refer the matter to arbitration.

Further, s 53, while providing for an application to the Court to stay proceedings which have been instituted in the Court in respect of a matter agreed to be referred to arbitration, provides that, notwithstanding any rule of law to the contrary, a party to an arbitration agreement shall not be entitled to recover damages from another party to the agreement by reason that the other party has taken proceedings in a court in respect of a matter agreed to be referred to arbitration ... (emphasis added) (footnotes omitted)

[183] The legislative system of "checks and balances" in the Commercial Arbitration Act also enables the court to set aside an award in certain circumstances relating, in effect, to misconduct (s 42). There is provision for remitter to the arbitrator subject to s 38(1) (s 43). The court may, on the application of a party, remove the arbitrator if the court is satisfied that certain circumstances exist, including on the grounds of incompetence (s 44). The court may also, on the application of a party, terminate the arbitration and remove the dispute into court in specified circumstances involving inordinate delay (s 46).

[184] The Commercial Arbitration Act also shapes the character of the arbitral proceedings and, in effect, the potential scope of their time and cost, by providing, in effect, that the parties' disputes are to be settled by a single arbitrator unless the arbitration agreement provides otherwise or the parties otherwise agree (s 6). The general law background was that where there are more arbitrators than one, apart from statute or agreement, a majority award is insufficient: United Kingdom Mutual Steamship Assurance Association v Houston & Co [1896] 1 QB 567. Section 8 allows an arbitrator to be appointed by a party where there has been a default in the exercise of the power by the person conferred with the authority for nomination, subject to the power of the court to set aside that party's nomination and make its own appointment. The composition of an arbitral tribunal (as opposed to the identity of a judge in curial proceedings) is generally a matter of major importance to the parties in an arbitration.

[185] Provisions of the nature referred to in [182]-[184] above, at least in their collective operation, could not, in my view, be readily described as matters of mere procedure. They may be compared with a provision such as s 19(1) of the Commercial Arbitration Act which provides that unless a contrary intention is expressed in the arbitration agreement, evidence may be given orally or in writing and, if the arbitrator so requires, be given on oath or affirmation or by affidavit. A provision of that kind is evidently a matter of mere procedure.

[186] The Model Law, on the other hand, provides, in effect, for the appointment of three arbitrators unless the parties determine otherwise (Art 10). An arbitrator's appointment may be challenged only if circumstances exist that give rise to a justifiable doubt as to his impartiality or independence, or if he does not possess qualifications agreed to by the parties (Art 12(2)). Absent agreement otherwise, a challenge must be made within 15 days after a party becomes aware of the constitution of the tribunal or after becoming aware of circumstances giving rise to a challenge under Art 12(2) (Art 13(2)). The Model Law provides that an award may (not must) be set aside on limited, specified grounds (Art 34(1) and (2)), and requires an application to set aside to be made within a three-month period (Art 34(3)). The remedy of remitter is confined within the framework of an application to set aside (Art 34(4)). Recognition or enforcement of an award may only be refused, in effect, on largely the same grounds as those available to set aside an award (Arts 35 and 36)). Except where the Model Law so provides, no court shall intervene in matters governed by the Model Law (Art 5). The Model Law provides a different, and in general terms more restrictive, regime of checks and balances, but the regime is again not readily characterised as mere procedure.

The question of retrospectivity

[187] In Rodway v R [1990] HCA 19 ; (1990) 169 CLR 515, 518, Mason CJ, Dawson, Toohey, Gaudron & McHugh JJ said:

The rule at common law is that a statute ought not be given a retrospective operation where to do so would affect an existing right or obligation unless the language of the statute expressly or by necessary implication requires such construction. It is said that statutes dealing with procedure are an exception to the rule and that they should be given a retrospective operation. It would, we think, be more accurate to say that there is no presumption against retrospectivity in the case of statutes which affect mere matters of procedure. Indeed, strictly speaking, where procedure alone is involved, a statute will invariably operate prospectively and there is no room for the application of such a presumption. It will operate prospectively because it will prescribe the manner in which something may or must be done in the future, even if what is to be done relates to, or is based upon, past events. A statute which prescribes the manner in which the trial of a past offence is to be conducted is one instance. But the difference between substantive law and procedure is often difficult to draw ...

[188] In John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36 ; (2000) 203 CLR 503, Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ said [99]:

Two guiding principles should be seen as lying behind the need to distinguish between substantive and procedural issues. First, litigants who resort to a court to obtain relief must take the court as they find it ... the plaintiff cannot ask that the courts of the forum adopt procedures or give remedies of a kind which their constituting statutes do not contemplate any more than the plaintiff can ask that the court apply any adjectival law other than the laws of the forum. Secondly, matters that affect the existence, extent or enforceability of the rights or duties of the parties to an action are matters that, on their face, appear to be concerned with issues of substance, not with issues of procedure. Or to adopt the formulation put forward by Mason CJ in McKain, "rules which are directed to governing or regulating the mode or conduct of court proceedings" are procedural and all other provisions or rules are to be classified as substantive. (footnotes omitted)

[189] In Maxwell v Murphy [1957] HCA 7 ; (1957) 96 CLR 261, 270, Dixon CJ adopted a practical summary of the relevant principles as follows:

(a)

a statute divesting vested rights is to be construed as prospective;

(b)

a statute, merely procedural, is to be construed as retrospective;

(c)

a statute which, while procedural in its character, affects vested rights adversely is to be construed as prospective.

[190] Thus, a provision conferring a right of appeal is not "merely" procedural with respect to pending actions: Colonial Sugar Refining Co Ltd v Irving [1905] AC 369 at 372, per Lord Macnaghten speaking for the Judicial Committee; Worrall vCommercial Banking Co of Sydney Ltd [1917] HCA 67 ; (1917) 24 CLR 28, 31; Australian Coal and Shale Employees Federation v Aberfield Coal Mining Co Ltd [1942] HCA 23 ; (1942) 66 CLR 161, 175, 178, 185, 194; Minister for Home & Territories v Smith [1924] HCA 41 ; (1924) 35 CLR 120.

[191] In the last-mentioned case, which I will refer to as Minister for Home & Territories v Smith (No 2), Isaacs ACJ and Starke J quoted Lord Macnaghten's observations in Colonial Sugar v Irving and said with respect to his Lordship's remarks:

Seeing that the appellants were suitors in a pending action, he [Lord Macnaghten] holds they had a right. The decision established that the Judiciary Act did not operate upon pending actions so as to deprive the suitors in those actions of rights including rights of appeal which were in existence at the time of the passing of the Act. It supplies an instance of "a good reason", referred to by Lord Blackburn [in Gardner v Lucas (1878) App Cas at 603], why an Act altering procedure should not operate retrospectively. (emphasis in original)

[192] The decision in Minister for Home & Territories v Smith (No 2) arose in the following circumstances.

[193] In that case, the Commonwealth had compulsorily acquired certain land in South Australia owned by Smith and another. The Minister applied to the High Court, by originating summons, to determine the compensation claim which had been made by Smith and the other owners. The application in the High Court was stayed when, by private agreement, the parties agreed to submit their dispute to arbitration by a justice of the High Court. The agreement provided that the South Australian Arbitration Act of 1891 would not apply, and that the parties would treat any award as a "rule" (ie judgment) of the High Court. Justice Powers accepted the reference and made an award in due course. The Minister applied to the High Court to have the award made a "rule" (judgment) of the court. The application originally came before Starke J, who dismissed it on the basis that there was no statutory jurisdiction to enable the court to treat the award as a judgment of the court, and that the parties could not, by private agreement, confer such jurisdiction on the High Court: Minister for Home & Territories v Teesdale Smith [1920] HCA 48 ; (1920) 28 CLR 584, 586-587.

[194] Subsequently, the Commonwealth enacted s 33A of the Judiciary Act which relevantly provided, in effect, that the High Court could direct that an award in an arbitration in respect of any matter in which it had original jurisdiction, "shall be made a rule [judgment] of the High Court". The Minister then renewed his application to have the award by Powers J made a judgment of the court, relying upon the enlarged statutory jurisdiction provided by s 33A of the Judiciary Act. The claimants for compensation again opposed the application, this time on three bases, two of which need only be mentioned for present purposes. The first was that s 33A could not operate retrospectively, and the second was that the decision of Starke J in refusing the earlier application by the Minister operated as a res judicata. The High Court rejected these arguments. In dealing with the question of alleged retrospectivity, Isaacs ACJ and Starke J in Minister for Home & Territories v Smith (No 2) made the observations quoted in [191] above, and continued (at 129):

Applying the principles stated to sec 33A, it appears that the enactment is one relating to procedure, that is, to the method of enforcing existing rights. It does not assume to alter any rights; it merely invests the High Court with a measure of original jurisdiction to ascertain and compel the observance of rights. Awards are not altered, the contracts of the parties to the submission under which the awards are made are not varied -- nothing is done but to provide for a judicial recognition of whatever rights exist. (emphasis added)

[195] In relation to the res judicata argument, Isaacs ACJ and Starke J said (at 129):

The decision of Starke J was not founded on the rights of the parties as between themselves, or on the circumstances of the award, or on the general law of liability to make awards rules of Court. It rested solely on the incapacity of the Court to entertain such an application. Now that the Court is invested with the power to entertain, and in proper circumstances to grant, such an application, the applicant has for the first time a legal right to ask, and cannot be met with the objection that he has already lawfully asked once and been refused by a final judgment. (emphasis added)

[196] In this case, the Amendment Act does not simply enlarge the jurisdiction of the court to enforce an award as a judgment of the court. It is not simply adding a right which had hitherto not existed.

[197] Whilst a provision such as s 33 of the Commercial Arbitration Act provides a summary procedure for the enforcement of an award, and is in that regard procedural in character, the discretion to grant leave under s 33 is in terms unconfined, with its limitations to be ascertained by implication from the subject matter, scope and purpose of the provision in the context of the Commercial Arbitration Act read as a whole: see Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24, 39-40. The relevant context includes the procedural law provisions referred to in [182]-[184] above. Cases in which some consideration has been given to the nature and scope of the discretion under s 33 include Cockatoo Dockyard Pty Ltd v Commonwealth (No 3) (1995) 35 NSWLR 689 at 695-696; Tridon Australia Pty Ltd v ACD Tridon Inc (Incorporated in Ontario) [2004] NSWCA 146.

[198] The Model Law, which the appellants contend applies to the enforcement of the awards in question, provides relevantly (Art 36) that the enforcement of an award may only be refused on limited, specified criteria, and similarly, may only be set aside on broadly the same limited criteria (Art 34). Accordingly, whilst the application of the Model Law would not alter the procedural character of summary enforcement, it would significantly alter the legislative criteria under which, and the legislative framework within which, the parties would be entitled to obtain or resist enforcement.

[199] Here, the right to enforce an award under s 33 of the Commercial Arbitration Act was a final element within an integrated statutory system of checks and balances governing the enforceability of the underlying rights and obligations of the parties. Once the arbitrator entered upon the reference in accordance with an agreement which excluded the Model Law, the legislative system of checks and balances in the Commercial Arbitration Act, as it then stood, defined the rights of the parties, both as between themselves, and as between themselves and the arbitrator, in relation to the settlement up to and including the point of enforcement, of the particular disputes the subject of the reference to arbitration. If the Amendment Act were read so as to apply to disputes which, under existing contractual arrangements, the parties had already referred to arbitration to be settled other than in accordance with the Model Law, it would operate not to augment their accrued rights, but to displace them.

[200] It is also to be noted that the current s 21 of the IA Act is prefaced by the word "[I]f". It provides that if the Model Law "applies" to "an arbitration", then State law does not "apply" to "that arbitration". The preclusion of State law is dependent upon the application of the Model Law to the arbitration in question. There is no express statutory provision which makes the repeal and substitution of s 21 retrospective, and it is difficult to discern from the statutory language a necessary intendment (as that concept is explained in Worrall v Commercial Banking Co of Sydney Ltd at (32)) that State law does not apply as the agreed procedural law to arbitrations underway in respect of which the Model Law has been lawfully excluded.

[201] The objects of the IA Act which were enacted by the Amendment Act (see [161] above) are consistent with the IA Act operating as I have indicated. The objects are in accord with a statutory intention not to interfere with existing rights. Further, the absence from Pt 2 of Sch 1 to the Amendment Act of a provision dealing with the application of item 16 (see [162] above), does not signify a necessary intendment to interfere with existing rights.

[202] As Martin CJ has observed, since the hearing of this appeal, Murphy J in the Federal Court has delivered his decision in Castel Electronics Pty Ltd v TCL Air Conditioner (Zhongshan) Co Ltd [2012] FCA 21, in which his Honour expressed the view, in the case before him, that the current s 21 of the IA Act operated as a procedural law which applied to arbitration agreements entered into prior to the commencement of the Amendment Act. In that case, the arbitration agreement did not exclude the Model Law and, accordingly, the Model Law applied as the procedural law of the arbitration, both before and after the commencement of the Amendment Act. The respondent in that case contended, however, that under the IA Act prior to the Amendment Act, it was the Supreme Court of Victoria, and not the Federal Court, which was the court which was empowered to enforce the award in question. His Honour was not required to address the particular questions which have arisen for consideration in this case. Also, his Honour appears to have indicated at [69], as I understand it, that if and insofar as the amendment was said to operate to give the Federal Court jurisdiction to enforce an award in an arbitration conducted under the Model Law, it was difficult to see how its operation could be regarded as altering substantive rights. In that event, in whichever court the application to enforce the award was made, the court would be applying the Model Law as the procedural law of the arbitration.

[203] Finally, we were referred, by the appellants, to the revised explanatory memorandum with respect to the International Arbitration Amendment Bill 2010. In my view, it is unnecessary to have recourse to the revised explanatory memorandum to construe the IA Act. Moreover, the memorandum does not seem to me to provide a clear guide to the resolution of the issue under contention. Indeed, on one view of it, it points towards the proposition that the repeal and substitution of s 21 is intended to apply prospectively rather than retrospectively. For example, in the "Outline", in the section dealing with "Application of the Act and the Model Law", the revised explanatory memorandum provides:

The Bill repeals s 21, removing the ability of the parties to an arbitration agreement to nominate an alternative arbitral law. (emphasis added)

[204] Paragraph 114 of the revised explanatory memorandum provides, with reference to the repeal of s 21:

While it is appropriate to give parties the flexibility to determine the procedures they want and the substantive law that is applicable to the dispute, allowing parties to oust the arbitral law creates significant difficulties that cannot be easily remedied without complex litigation. Accordingly, this item repeals section 21. Consequently, while the parties will continue to have freedom to choose both the procedures and applicable substantive law, they will not be free to oust the Model Law as the applicable arbitral law. (emphasis added)

[205] As I have said, it seems to me that no real assistance can be derived from the revised explanatory memorandum, but I would not accept the appellants' submission that it positively assists their case in these appeals.

[206] For these reasons, in my view, on general law principles, the repeal of the former s 21 of the IA Act and its replacement with the current provision, do not affect the continuing operation of the Commercial Arbitration Act with respect to the enforcement of the arbitral awards in this case. The result is the same by virtue of the operation of s 7(2) of the Acts Interpretation Act 1901 (Cth) as it now stands, or s 8 of that Act it stood prior to its repeal and replacement by the Acts Interpretation Amendment Act 2011 (Cth): cf Carr v Finance Corporation of Australia Ltd (No 2) [1982] HCA 43 ; (1982) 150 CLR 139 at 152.

[207] The situation may be different with respect to disputes not referred to arbitration prior to 6 July 2010. In that event, the arbitration agreement would be wholly executory, and the rights under the agreement to have any particular dispute settled by arbitration in accordance with its terms would arguably not have vested. As I have said, it appears to me that the contractual right was, in effect, to refer disputes to an arbitration to be governed by the Commercial Arbitration Act as it stood at the time of the referral. If, between the date of the arbitration agreement and the date of referral, the Commercial Arbitration Act had been modified directly by the Parliament of Western Australia, or by yielding to the operation of inconsistent Commonwealth legislation, it might be difficult to contend that there was a relevant accrued right which would invoke the principles of statutory construction concerning retrospectivity. That point is, however, not necessary to decide in this case.