Federal Court of Australia
has struck down a commodities trading firm’s push to quash a $2m arbitration award stemming from a botched iron ore deal.
On Friday, the court ruled in favour of Singapore’s Noble Resources International, represented by Holman Fenwick Willan
, in a case brought by Hong Kong’s Sino Dragon Trading citing the latter’s contradictory arguments.
In January 2014, Sino Dragon inked a contract governed by the laws of Western Australia with Noble to buy 170,000 metric tons of iron ore. However, it subsequently missed two deadlines to open a letter of credit as required by the contract.
The HK-based company claimed that the same day Noble cancelled and sold the iron ore to another firm, it had given notice of its failure to perform the contract.
As the contract contained an arbitration clause for disputes to be resolved by arbitration in Australia under UNCITRAL rules, Noble took Sino Dragon to the Australian Centre for International Commercial Arbitration (ACICA).
Earlier this year, Noble won $2m in damages against Sino Dragon.
Sino Dragon, in a bid to quash the award, asked the Federal Court of Australia
to rule in its favour because it claimed technical difficulties and translation problems for a couple of their witnesses who appeared via video link from China caused the whole arbitration proceedings to be prejudiced against the company.
However, Justice Barry Beach pointed out this argument contradicts Sino Dragon’s claim during arbitration that the witness testimonies were not too hampered by technical difficulties and that the company was itself to be partly blamed for the technical and translation problems.
“Sino Dragon’s own counsel perceived and said to the arbitral tribunal that, notwithstanding the technical difficulties, the evidence of his witnesses had come out clearly and consistently with their evidence in chief,” the judge noted. “Sino Dragon’s present challenge and its assertions of substantial injustice because of misunderstanding or mistranslation are puzzling to say the least.”
The judge also said there was no “real unfairness” or “real practical injustice” due to the way the testimonies were given. Justice Beach also said that given the apparent importance of the testimonies of the witnesses, Sino Dragon should have either used the services of a professional video-conference company rather than an iPad with the WeChat app, secured Australian visas as quickly as possible for the witnesses, or moved to have the testimonies delayed to a later date.
Noble won its award after proceedings administered by the Permanent Court of Arbitration. It had filed to the ACICA way back in 2014, but hearings only proceeded last December in part because Sino Dragon had missed numerous deadlines and filed five unsuccessful challenges to the composition of the arbitration’s panel.
Peter E. King of Zhang Shijing Lawyers and Stephen R. Coleman of Queen's Square Chambers acted for Sino Dragon. Noble Resources was represented by E. Cox and Holman Fenwick Willan