Society of Construction Law Australia
National Seminar, 17 September 2024
The arbitration jurisdiction of the Federal Court of Australia

The Hon Justice Angus Stewart*
Introduction
1.	Commercial arbitration has a history that stretches back into antiquity. The considerations that lead parties to arbitration are evident throughout that long history – the costs and delays of litigation in courts, a desire for procedural flexibility, concerns about the confidentiality of the subject matter of the dispute, and, where the dispute spans more than one jurisdiction, concerns as to fair and equal treatment in the courts of one or other of those jurisdictions.
2.	There is sometimes a perceived competition between the courts and arbitration in the settlement of disputes. However, this tension is not grounded in modern commercial reality. Instead, commercial courts play a crucial role in supporting arbitration and in bolstering the trust and confidence of its users. In TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia [2013] HCA 5; 251 CLR 533, the High Court of Australia explained that the foundation of arbitration is the consent of the parties, and unlike judgments produced by the exercise of judicial power, an arbitral award is not binding of its own force: ‘its effect, if any, depends on the law which operates with respect to it’. Accordingly, where there is a dispute in the process, including as to the legitimacy of an award, reference to a court for the invocation of its coercive powers to apply the law is indispensable. It is the ready availability of such reference, in particular to courts with specialist expertise and the willingness and ability to deal with matters quickly, which is part of the reason that such a substantial number of arbitrations require no reference to a court at all.
3.	This paper discusses the arbitration jurisdiction of the Federal Court of Australia: when can you seek the assistance of the Federal Court, and what forms of assistance can you seek? The first part of this paper canvasses how matters relating to arbitration come before the Federal Court. The second part discusses the conduct of the Federal Court’s Commercial Arbitration List, particularly enforcement procedures.
How matters relating to arbitration come before the Court 
4.	Section 39B(1A)(c) of the Judiciary Act 1903 (Cth) vests the Federal Court with jurisdiction over ‘any matter arising under any laws made by the Parliament, other than a matter in respect of which criminal prosecution is instituted or any other criminal matter’.
5.	There are two principal sources of Federal Court jurisdiction relating to arbitration: jurisdiction under the Federal Court of Australia Act 1976 (Cth), and jurisdiction arising under the International Arbitration Act 1974 (Cth).
6.	Although State and Territory laws cannot give jurisdiction to the Federal Court, in some circumstances relevant provisions may be picked up and applied as surrogate federal law under s 79 of the Judiciary Act. An example of this is where a stay of domestic proceedings between Australian parties in federal jurisdiction is sought in which a State or Territory Commercial Arbitration Act applies.
Federal Court Act
7.	The first source of Federal Court arbitration jurisdiction arises under the Federal Court Act. The Court has two distinct powers under the Act in relation to arbitration: referral and enforcement.
Referral to arbitration
8.	The Federal Court has an express statutory power to refer the whole or part of a civil proceeding to arbitration pursuant to s 53A of the Federal Court Act. As arbitration is based on the agreement of the parties, such a referral requires their consent. There is no power to force a party to arbitration who has not agreed to it.
9.	A referral of proceedings to arbitration under s 53A will deal with matters that are usually addressed by parties making a private reference to arbitration. These include the identity of the arbitrators or a procedure for appointing arbitrators, the seat of arbitration, and any applicable procedural or institutional rules. The Commercial Arbitration Practice Note (CA-1) of the Federal Court provides some broader guidance on how the Court approaches referral to arbitration. Under the Federal Court Rules 2011 (Cth), a party may also apply for various orders including the nomination of a person as arbitrator and specifying the manner in which the arbitration is to be conducted, the time by which the arbitration is to be completed, how the arbitrator’s fees and expenses are to be paid and how the arbitrator is to report to the Court.
10.	Very significantly – because it does not otherwise apply to arbitrations – where there has been a s 53A referral, the arbitrator can apply to the Court for leave to refer a question of law arising from the arbitration. Leave will not be granted unless the Court is satisfied that the determination of the question of law by the Court may result in substantial savings in costs to the parties. Also, after an award has been made and registered, a party may apply to the Court to review an award on a question of law. If the matter in either case is of sufficient importance, the Chief Justice may direct that the question be determined by a Full Court.
11.	An application can also be made to register an award in such an arbitration, which has the force and effect of an order of the Court. The Court’s Rules specify how such an application should be made.
12.	The s 53A referral power is seldom used – indeed, it may never have been used. But parties should constantly bear it in mind in considering how to facilitate the just resolution of their dispute according to law and as quickly, inexpensively and efficiently as possible (as required by s 37M of the Federal Court Act). It has the obvious advantages of the parties being able to choose a specialist arbitrator (or panel) and to retain confidentiality, yet have the back-up of a court to determine, or review, any dispositive points of law.
An order in the terms of the award (enforcement)
13.	The Federal Court also has jurisdiction in applications for orders in the terms of an award pursuant to s 54 of the Federal Court Act, which is a means of enforcing an award. The judgment should reflect the award and not differ in any material way from its terms, although the judgment need not be in the exact same words as the award. Such an application cannot be made in respect of an award made pursuant to a s 53A referral unless the award has been registered with the Court under the Rules. Critically, the order in the terms of an award under s 54 can only be made if the ‘matter’ which is the subject of the arbitration was within the original jurisdiction of the Court. That is to say, the underlying ‘matter’ must be within federal jurisdiction.
14.	A matter in which the Court has original jurisdiction does not necessarily need to be the enforcement of a foreign award under the International Arbitration Act. An award in an arbitration is not a new matter that is distinct from the underlying justiciable controversy that was the subject of the arbitration. Thus, a domestic award governed by a State or Territory Commercial Arbitration Act may nevertheless be enforceable in the Federal Court if it concerns a matter in federal jurisdiction. For instance, in First Solar (Australia) Pty Ltd, in the matter of Lyon Infrastructure Investments Pty Ltd v Lyon Investments Pty Ltd (No 2) [2021] FCA 109, it was held that an award made in a domestic arbitration was ‘in relation to a matter in which the Court has original jurisdiction’ as referred to in s 54(1) of the Federal Court Act and r 28.14(1) of the Federal Court Rules because a cross-claim made in the domestic arbitration invoked the Australian Consumer Law as given effect by the Competition and Consumer Act 2010 (Cth). On that basis, the award was in relation to a matter arising under a law of the Parliament. 
15.	Rule 28.14 of the Federal Court Rules sets out certain requirements with regard to the application for an order in the terms of an arbitral award, including that the application must be accompanied by a copy of the arbitration agreement, a copy of the award and an affidavit stating certain material facts, including those demonstrating why the Court has original jurisdiction in the matter that is the subject of the award.
16.	The Court’s jurisdiction to make an order in the terms of an arbitral award is distinct from, although overlapping with, its similar jurisdiction to recognise and enforce an award under s 8 of the International Arbitration Act.
International Arbitration Act 
17.	The International Arbitration Act essentially does three things. Part II of the Act gives the force of law to the New York Convention on the Recognition and Enforcement of Arbitral Awards. Part III gives the force of law to the UNCITRAL Model Law on International Commercial Arbitration. Part IV gives the force of law to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States – the ICSID Convention. Given that it is not likely to ever be relevant to a construction dispute, I do not intend to say anything more about the ICSID Convention.
Part II: Enforcement of arbitration agreements and awards
18.	Part II of the International Arbitration Act applies to arbitration agreements and arbitral awards referred to in the New York Convention. An ‘arbitration agreement’ referred to in the New York Convention is an agreement in which the curial law is that of a Convention country other than Australia. Part II also applies to a ‘foreign award’, meaning an award made in a country other than Australia, but not necessarily a Convention country. That is because when acceding to the New York Convention, Australia did not require reciprocity for the enforcement of foreign awards as allowed for by Art I(3).
Enforcement of agreements to arbitrate
19.	Section 7 of the International Arbitration Act is often the source of the Federal Court’s involvement in international arbitration. It provides that the Court shall enforce a foreign arbitration agreement made in writing by staying proceedings that involve the determination of a matter that falls within the ambit of the arbitration agreement. Although this is sometimes loosely referred to as a ‘referral’ to arbitration, it differs from a s 53A Federal Court Act referral as it is based on the prior contractual undertaking by the parties to have their dispute determined by arbitration. The Federal Court also has an inherent power to order the stay of its own proceedings in favour of arbitration.
20.	It will be rare for a court not to stay court proceedings even if there is some doubt over whether the matter falls within the scope of the arbitration agreement. The courts have reached the position that arbitration agreements should be liberally construed, in line with commercial realities and to give effect to the presumed intention of parties wishing to submit their disputes to arbitration (although there is no legal presumption in favour of arbitration).
21.	By s 7(2), the Court shall stay the proceeding ‘upon such conditions (if any) as it thinks fit’. Although expressed broadly, appropriate conditions are limited to those that support the agreement to arbitrate and do not intrude in the province of the arbitrators – the purpose is to uphold and enforce the arbitration agreement, not to alter or undermine it or the parties’ rights under it.
Recognition and enforcement of foreign awards
22.	By s 8(3) of the International Arbitration Act, a foreign award may be enforced in the Federal Court as if the award were a judgment or order of the Court. The Court may only refuse to enforce a foreign award in the circumstances set out in ss 8(5) and (7). Those are the grounds for resisting enforcement of an award enumerated in the New York Convention. They are also now mirrored in the Model Law in respect of a non-foreign international award (ie an award in an Australian-seated international arbitration under Pt III) and a domestic award (ie under the State and Territory Commercial Arbitration Acts which give effect to the Model Law in respect of domestic commercial arbitrations).
23.	Briefly stated, the grounds for resisting the enforcement of an arbitral award are the following:
a)	the incapacity of one of the parties to the arbitration agreement to enter into the agreement (s 8(5)(a));
b)	the arbitration agreement is not valid under the applicable law (s 8(5)(b));
c)	there was no proper notice of the arbitration or a party was unable to present their case in the arbitration proceeding (s 8(5)(c));
d)	the award decides matters outside the scope of the agreement to arbitrate (s 8(5)(d));
e)	the composition of the arbitral tribunal or the procedure adopted was not in accordance with the agreement to arbitrate (s 8(5)(e)) – Hub Street Equipment Pty Ltd v Energy City Qatar Holding Company [2021] FCAFC 110; 290 FCR 298 is an example;
f)	the award is not yet binding or has been set aside or suspended (s 8(5)(f));
g)	the subject matter of the dispute is not capable of settlement by arbitration under the law where enforcement is being sought (s 8(7)(a));
h)	enforcement of the award would be contrary to public policy (s 8(7)(b)), including by reason of fraud, corruption or breach of the rules of natural justice (s 8(7A)) – that is, as said in Traxys Europe SA v Balaji Coke Industry Pvt Ltd (No 2) [2012] FCA 276; 201 FCR 535 at [105], ‘only those aspects of public policy that go to the fundamental, core questions of morality and justice … [and not] parochial and idiosyncratic tendencies of the courts of the enforcement state’.
24.	It should be remembered that enforcement of ICSID Convention awards is dealt with separately under s 35 of the International Arbitration Act.
Part III: Supervisory jurisdiction under the Model Law
25.	Part III of the International Arbitration Act sets out the supervisory jurisdiction of the Court over international arbitrations under the Model Law. An international arbitration is one in which the parties to the arbitration agreement had their places of business in different countries at the time of concluding the agreement. Importantly, this supervisory jurisdiction only arises where Australia is the seat of the arbitration; there is no such jurisdiction in respect of foreign-seated arbitrations. Several of these powers are briefly discussed below.
Appointment and disqualification of arbitrators
26.	In some circumstances, parties may not make provision for identified or identifiable arbitrators in their arbitration agreement, or agreed procedures for the appointment of arbitrators may fail. For instance, parties may provide for the appointment of an arbitrator ‘by agreement’ but may be unable to agree upon the identity of an arbitrator once a dispute arises. In such circumstances, a party may request the Court to make the appointment of arbitrators unless the arbitration agreement provides for other means of securing the appointment.
27.	If an arbitrator becomes de jure or de facto unable to perform their functions, a party may request the Court to decide on the termination of the arbitrator’s mandate. The Court may also determine claims of disqualification of arbitrators on account of bias.
Jurisdiction 
28.	Under Art 16 of the Model Law, a party may apply to the Court to challenge a preliminary determination by an arbitral tribunal on its own jurisdiction.
Interim measures
29.	The Court has the same powers of issuing interim measures in relation to arbitration proceedings as it has in relation to court proceedings.
Evidence
30.	The Court can assist parties in an international arbitration with the taking of evidence, including the issuing of subpoenas for oral or documentary evidence. Arbitral tribunals have no power to compel the production of documents or the attendance of witnesses. Courts have a role in supporting arbitral tribunals by exercising the power to compel that tribunals lack.
31.	In a series of cases in Victoria concerning the equivalent provision in that jurisdiction’s Commercial Arbitration Act to s 23 of the International Arbitration Act, Croft J discussed the extent to which courts should involve themselves in evidence-taking in the arbitral process. The power conferred on courts to issue subpoenas is not intended to facilitate ‘“heavy-handed” intervention’ by the courts, but nor is the issuing of subpoenas to be taken lightly such that the court becomes ‘a mere “rubber stamp”’. The provision that the court may issue a subpoena, adopted from the Model Law, implicitly requires the court to be independently satisfied that there are reasonable grounds on which to exercise the discretion to grant the request. As Croft J noted in Aurecon Australasia Pty Ltd v BMD Constructions Pty Ltd [2017] VSC 382; 52 VR 267, this is of particular importance for subpoenas relating to non-parties to the arbitration who have not agreed to participate in the arbitration.
Recourse against the award, and recognition and enforcement
32.	The grounds for seeking recourse against an award (ie setting it aside) and for resisting recognition and enforcement of an award are the same (Arts 34 and 36), and they are the same as the grounds for resisting recognition and enforcement of an award under the New York Convention. I have identified those already so I will not do so again here.
33.	A recent decision by the High Court on setting aside arbitral awards is CBI Constructors Pty Ltd v Chevron Australia Pty Ltd [2024] HCA 28; 98 ALJR 1096. Although the decision concerned a domestic arbitral award rendered under the Commercial Arbitration Act 2012 (WA), the relevant provision there is the same as Art 34 of the Model Law. In CBI Constructors, Chevron and CBI were involved in a construction dispute that was referred to arbitration. The tribunal made orders bifurcating the dispute, with issues of liability to be determined first, followed by quantum. However, in the second hearing following the determination of liability, CBI sought to raise a new argument as to liability. Chevron objected on the grounds that, because the tribunal had already determined issues of liability, the tribunal did not have jurisdiction to consider the new argument. The tribunal disagreed and issued a second award dealing with liability. Chevron applied to the Supreme Court of Western Australia to set aside the tribunal’s award. The primary judge concluded that the award should be set aside, a decision which was affirmed by the Court of Appeal. A majority of the High Court, in finding that the decision of the tribunal should be set aside, held that the first award was a ‘final and binding determination of the issues with which it dealt’. The corollary was that the tribunal had no authority to hear the new argument as to liability, and the first instance court had been correct in setting aside the decision of the arbitrators. This decision illustrates that only errors which go to the fundamental issues of a tribunal’s jurisdiction can be the basis to set aside an award. This maintains an appropriate balance between ‘ensuring the integrity of the arbitral process and the policy of “minimal curial intervention”’. 
An excursus on the applicable law under the Model Law
34.	When parties have agreed to submit a dispute between them to arbitration, there are three systems of national law that may be relevant and applicable to different issues. They are the law governing the substance of the dispute, the law governing the validity and scope of the agreement to arbitrate and the law governing the arbitration process.
35.	The Model Law recognises that the parties can choose three sets of rules that are applicable to their arbitration, in the form of the law applicable to the substance of the dispute, the curial law (law of the seat), and any procedural or institutional rules. The procedural and institutional rules form part of the law governing the arbitration process.
36.	This is illustrated in the recent decision of the High Court in Tesseract International Pty Ltd v Pascale Construction Pty Ltd [2024] HCA 24; 98 ALJR 880. Tesseract involved a construction dispute relating to the design and construction of a warehouse in South Australia. A relevant issue was whether the liability of the engineering consultant could be reduced in accordance with the proportionate liability regime established by Pt 3 of the Law Reform Act (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) or Pt VIA of the Competition and Consumer Act 2010 (Cth), on account of the alleged negligence of a third party. The arbitral tribunal referred the question to the South Australian Court of Appeal, the decision of which was subsequently appealed to the High Court.
37.	Those comprising the majority of the High Court emphasised that party autonomy is foundational, meaning that the parties are free to choose for themselves the law or legal rules applicable to their arbitration. As the parties had selected South Australian law as the substantive law governing the arbitration, the South Australian proportionate liability regime applied to the arbitration. Accordingly, the majority rejected the submission that the proportionate liability regime did not apply to an arbitration because of the arbitrator’s inability to order joinder of a concurrent wrongdoer. 
The conduct of the Court’s commercial arbitration list 
Overview 
38.	The Federal Court has a specialist arbitration practice list under the operation of the Court’s National Court Framework. The list has two Commercial Arbitration List judges, one for Western Australia (Feutrill J) and the other for the rest of the country (Stewart J).  There are also designated Commercial Arbitration National Practice Area judges in each registry.
39.	The characterisation of a matter is undertaken by the National Operations Registrar. Upon filing, all commercial arbitration proceedings are provisionally allocated to a Commercial Arbitration List judge who is responsible for case managing the proceeding. Matters are brought on quickly, with the first case management hearing usually occurring within 14 days of filing. Proceedings are disposed of by the list judge if they are short or confined; otherwise they are docketed to one of the Commercial Arbitration NPA judges for case management and determination in the usual way.
40.	The benefits flowing from having a specialist arbitration list are numerous, including, and of real significance, having a specialist judge who is aware of the developments and specific issues that can arise in the arbitration context, both from a legal and practical perspective, and who can ensure that a relatively consistent body of arbitration-related decisions is developed. This provides parties with a greater degree of confidence and certainty in how judicial intervention will be effected if required in a particular case.
41.	Over the last three years, the Federal Court has dealt with 21 original arbitration jurisdiction matters. Fifteen of those matters were filed in New South Wales, three in Queensland, two in Western Australia, and one in Victoria. Fourteen applications were for the enforcement of foreign awards, five were for the issue of subpoenas, one was a stay application, and one application was to set aside an arbitral award.
42.	At the time of this seminar, there are 14 current arbitration matters before the Court. Ten matters are in the Court’s original jurisdiction, and all involve enforcement of an award. Three of these are current in the Commercial Arbitration List and the rest are docketed. The figures given here exclude stay applications that arose in the context of an existing matter not initially characterised as being appropriate for the Commercial Arbitration NPA.
Enforcement procedure 
43.	Enforcement of an international arbitral award in the Federal Court generally occurs by a two-stage procedure. First, a party must file an originating application accompanied by the documents required by s 9 of the International Arbitration Act and an affidavit stating certain material facts. 
44.	The Federal Court Rules do not require notice to be given when filing an application to enforce an arbitration award. If an award creditor has not been informed by an award debtor of an intention to seek recourse against the award or object to the enforcement of the award and the award creditor is not aware of a reasonably arguable basis to oppose the enforcement of the award, it will usually be appropriate for an application to enforce the award to be made without notice to the award debtor. At the first, ex parte, hearing provisional enforcement orders may be made. Generally, unless an application opposing enforcement of the award is made by a day specified in those orders, enforcement orders (including judgment) will be made on the return day. Procedural fairness requires notice to be given to the award debtor before final orders for enforcement are made. 
45.	In Hankuk Carbon Co Ltd v Energy World Corporation Ltd [2024] FCA 232, the award creditor sought enforcement of two arbitral awards in an ex parte application. Recourse at the seat against the awards had already been dismissed, such that the awards were no longer subject to revision or variation by the tribunal or recourse at the seat. In those exceptional circumstances, I was persuaded by authority in Victoria, England and Hong Kong that it was appropriate to enter and then stay judgment pending notice being given and a return day. The award debtor’s position was protected by the stay and by r 39.05(a) of the Federal Court Rules, which provides that the Court may vary or set aside a judgment or order after it has been entered if it was made in the absence of a party.
46.	It is not appropriate for a party to seek enforcement of an award without notice if there is a genuine dispute, such as to take recourse against the award at the seat of arbitration. However, when enforcing the award, there is no need for the award creditor to disprove the various bases for resisting the enforcement of a foreign award under ss 8(5) and 8(7) of the International Arbitration Act. These do not arise unless raised by the party against whom the foreign award is invoked. 
Confidentiality 
47.	Confidentiality is one of the significant attractions of submitting disputes to arbitration. From the viewpoint of parties to arbitration, there are legitimate interests to be protected by the confidentiality of arbitral proceedings: they may not wish to air their unsavoury conduct in the public eye, they may desire to maintain an ongoing commercial relationship without the interference of a public dispute, or they may seek to maintain commercially confidential or sensitive information such as trade secrets or customer information. However, confidentiality is generally lost once a party goes to court in relation to the arbitration. For instance, court proceedings to seek the recognition or enforcement of an award are public and inevitably entail the disclosure of some information that would otherwise be confidential in the arbitration. 
48.	The Federal Court has the power to make suppression or non-publication orders in proceedings relating to an arbitration under s 37AF of the Federal Court Act. The ambit of the section is wide; orders may relate to the identity of a party or witness, evidence or information about evidence, or information obtained in the process of discovery, by subpoena, or lodged with or filed in the Court.
49.	However, a suppression or non-publication order must be ‘necessary to prevent prejudice to the proper administration of justice’. This reflects the strong public interest in open justice in relation to court proceedings. There is a high bar to establishing prejudice to the proper administration of justice, as ‘necessary’ is a strong word. 
50.	A circumstance in which prejudice to the proper administration of justice may be established is where proceedings to enforce an arbitral award are commenced other than for substantial legitimate purposes. In EBJ21 v EBO21 [2021] FCA 1406; 290 FCR 325, it was found that the proper administration of justice was prejudiced by a party commencing enforcement proceedings prior to the pecuniary obligation in the award being due and payable, where the result was to make information public that was otherwise confidential under the parties’ agreement and the confidentiality regime under the International Arbitration Act. Making suppression orders was therefore necessary to prevent that prejudice. 
51.	In respect of arbitrations governed by the Model Law under Pt III of the International Arbitration Act, the particular provisions with regard to confidentiality in ss 23C-23G apply. Those include giving the Court the power to prohibit or allow disclosure of confidential information in relation to an arbitral proceeding in certain circumstances. These provisions have thus far received little judicial attention.
Conclusion 
52.	The Federal Court has jurisdiction over arbitration beyond that which is provided for in the International Arbitration Act. The power to refer proceedings to arbitration pursuant to s 53A of the Federal Court Act is significant, and the power to enforce awards by entering judgment in the terms of the award under s 54 of the Federal Court Act exists independently of the enforcement provisions of the International Arbitration Act. As I have explained, that includes the power to enforce a domestic award if the underlying ‘matter’ is within federal jurisdiction.
53.	The power and duty of the Federal Court to stay proceedings subject to arbitration agreements is also diverse, arising under s 7(2) of the International Arbitration Act and Art 8 of the Model Law, the inherent power of the Federal Court, and under State or Territory Commercial Arbitration Acts applying as surrogate federal law.
54.	It is thus apparent that the Federal Court plays an essential role in supervising and supporting arbitrations and enforcing arbitral awards. Without such intervention, the fair, efficient and expeditious resolution of disputes by arbitral tribunals may not be achieved.