It’s the tragic echo of Michael Bolton’s plea to start over that has struck a chord with generations of fans. The truth is sometimes people just don’t want to start over if the fighting never ends.
Imagine if parties agree to lower their guns and sign a settlement agreement to resolve an arbitration before it begins, but then one party doesn’t honour the bargain. Would you want to start an arbitration over again? Well if you’re clever you’ll agree that if the other party doesn’t honour the settlement, the arbitral tribunal will make an award in your favour without hearing any argument. It’s a quick, cheap and just solution, we reckon. And, after a decision on Monday, it looks like the Full Court of the Federal Court of Australia (including the Chief Justice) will have your back (Gujarat Coke v Coeclerici  FCAFC 109). It’s a good sign for the enforcement of foreign arbitral awards in Australia.
In that case the parties suspended their arbitration in London by signing a settlement agreement. Gujarat agreed to pay up within 15 days, or else Coerlerici would ‘be entitled to an immediate consent award, without the need for any pleadings or hearings’. Gujarat didn’t pay, so the tribunal in London made an award in favour of Coerlerici. Then Coerlerici came to Australia to enforce the award. What did the Australian court think of all this?
Well to enforce a foreign arbitral award in Australia the courts don’t hear the case again, they just check that both sides had a chance to be heard and that the arbitration followed fair procedure (s8, International Arbitration Act 1974). Gujarat tried to argue that they didn’t get a chance to be heard – but that argument failed. The court took a practical approach and wouldn’t let Gujarat escape the express words of its settlement agreement, and their consent to an award if they didn’t pay.
We think this is a sensible decision. Arbitration only exists because parties agree to it. And courts in Australia are showing a tendency to leave arbitral awards alone if that’s what the parties have chosen.