Is my foreign arbitral award enforceable? The effect of COGSA on foreign law and jurisdiction clauses and enforcement in Australia

This article looks at the effect that section 11 of the Carriage of Goods by Sea Act 1991 (Cth) (COGSA) can have on the prospects of enforcing, in Australia, a foreign arbitral award pursuant to a foreign jurisdiction/arbitration clause in a "sea carriage document". The issue is nothing altogether new, however, it still seems to take maritime practitioners by surprise!

COGSA seeks to implement, amongst other things, the Hague Visby Rules which deal with the liability of a carrier to cargo interests. But COGSA also has a protectionist aspect – namely, protecting Australian courts from having their jurisdiction "ousted" by parties to certain contracts. It does so by rendering invalid any clause in a sea carriage document that purports to preclude or limit the jurisdiction of an Australian court in respect of that sea carriage document (although it expressly preserves Australian arbitration). Such a provision is not unusual. However, the Australian provision arguably seems to go a couple of steps further, applying to (a) voyage charter parties and (b) both outbound and inbound shipments.

The International Arbitration Act 1974 (Cth) seeks to domestically implement the New York Convention[1] (the regime for the recognition and enforcement of foreign arbitral awards). There are certain instances when a party can ask an Australian court not to enforce a foreign arbitral award, including where to do so would be against public policy. The International Arbitration Act, in its own terms, surrenders itself to the primacy of COGSA (section 2C).

Section 11 of COGSA operates as follows:

in relation to outbound shipments, section 11(1) of COGSA would strike down a choice of law clause in a sea carriage document which did not stipulate Australian law. Section 11(2)(b) would then strike down a foreign jurisdiction clause in relation to the same outbound...