Australia is considered a “pro-arbitration” jurisdiction including because, courts generally enforce domestic and foreign arbitration awards. This was illustrated in Guoao Holding Group Co Ltd v Xue (No 2) [2022] FCA 1584, which involved an unsuccessful attempt to set aside a Chinese arbitral award under section 8(7)(b) of the International Arbitration Act 1974 (Cth).
Section 8(7)(b) permits a court to decline to enforce an international arbitral award on public policy grounds. The international arbitral award unwound a contract and required Xue to repay loans and legal costs but did not require the transfer of shares back to Xue. Xue had unsuccessfully sought to have the award set aside in the Chinese jurisdiction.
When Guoao Holding Group sought to enforce the award in the Federal Court of Australia, Xue argued that to enforce the award would be contrary to public policy under section 8(7)(b) because the lack of share transfer in the award would cause an "imbalance of rights and obligations".
The Federal Court declined to set aside the award, emphasising that it was important to have “a degree of international harmony and concordance of approach”. This was especially so in circumstances where Xue had challenged the award in China on the same grounds, but Chinese courts and a supervisory body had refused to set it aside. The Federal Court held that Xue's arguments did not "rise to the level of the award being contrary to fundamental norms of justice and fairness in Australia" and did not enliven the public policy ground for resisting enforcement.
