Given that the US District Court has found that the arguments advanced by Bradken in support of its application to set aside the Award in part are not frivolous but are plainly arguable, I think that I should regard Bradken’s applications in both the US District Court and in the US Appeals Court as having been made bona fide.
If an adjournment is not granted, Bradken will be denied an opportunity to seek to persuade this Court that the Award should not be enforced by relying upon the ground specified in s 8(5)(f) of the IAA. It currently has on foot an application for a stay of the first instance judgment of the US District Court and an application to set aside the Award in part.
In the arbitration agreement, the parties chose Oregon as the seat of the arbitration and Oregon law as the law which was to govern the interpretation of the Licence Agreement.
The first forum chosen by ESCO as the jurisdiction in which it would seek to enforce the Award was the US District Court. Bradken was entitled to seek to “vacate” the Award in part in the confirmation proceedings commenced by ESCO.
The US District Court and the US Appeals Court are more appropriate venues than this Court to determine all questions of the validity and enforcement of the Award.
Those questions involve US law.
ESCO did not seek to enforce the Award in Australia until after the US District Court entered judgment in its favour in May 2011.
It came to Australia only after it failed in its bid to secure interest on the amount of the legal costs awarded to it at the higher rate provided under the State law of Oregon.
It could have sought to enforce the Award in Australia in June 2010 but chose not to do so at that time.
The present proceeding raises interesting and difficult questions as to the correct interpretation of s 51A of the Federal Court Act and its application in circumstances where (as here) a party seeking to enforce a foreign arbitral award under the IAA has failed to secure an award of post-award pre-judgment interest in its home jurisdiction and only secured post-judgment interest at a negligible rate.
There is no question that an adjournment, even for a relatively long period of time, will detrimentally affect ESCO’s prospects of recovering the amount for legal costs awarded by the arbitrator.
Bradken and the group of companies of which it is a member comprise substantial corporations with income and assets that could easily support a payment of the amount awarded.
There is no suggestion that Bradken will move assets in order to avoid payment or that improvident trading will erode its financial position.
ESCO can be adequately protected by requiring Bradken to put up substantial security.
I think that the concerns of ESCO can be met by an order for substantial security and by the Court closely monitoring the progress of the US litigation.
(These) factors above lead me to grant the adjournment sought. I shall do so, however, only on condition that substantial security be provided.