International Commercial Dispute Resolution

This assignment delves into the complexities of resolving international commercial disputes. It examines various mechanisms like arbitration and litigation, comparing their strengths and weaknesses. Students will analyze real-world case studies, such as Supermicro Computer Inc. v. Digitechnic and Oceanic Sun Line Special Shipping Co Inc v Fay, to understand practical applications of these methods. The assignment also considers legal frameworks governing international dispute resolution, including the China-Australia Free Trade Agreement (ChAFTA) and the Foreign Judgments (Reciprocal Enforcement) Act 1933 (UK). Understanding confidentiality in arbitration and the 'judicialization' of this process are crucial aspects covered.

QUESTION ONE:
1.
According to Chapter 1.1of CHAFTAof 2015 states that a Free trade agreements are
entered into when the parties in the agreement as in consistent with the provisions of the so said
articles detailed therein agree to establish a free trade area.
CHAFTA provides that free trade agreements are recognised as forming part and relating
to other agreements that could the parties involved are party to and by that the parties affirm their
existing commitment to each other1.
Article 1.2(2) of CHAFTA stipulates that recognition of such an agreement will be under
only under the principle that the details and content of such an Agreement conforms to and does
not derogate nor seem to violate provisions of any other agreement that the parties may be have
entered into.
Article 1.2(3) of CHAFTA also provides that this the agreement will be legally binding to
any international value and that the Parties herein with the required immediacy consult with a in
order to find satisfactory solution that is mutual in case of emergence of inconsistencies in
relation to other agreements to2.
1 Government of Australia & The Government of The People’s Republic of China. (2015). The
China-Australia Free Trade Agreement (ChAFTA, [online]. Available
at:http://dfat.gov.au/trade/agreements/chafta/official-documents/Pages/official-documents.aspx
[Accessed on 2 October 2017]
2 Department of Foreign Affairs and Trade. (2014) Twenty-first round of negotiations [online].
Available on https://web.archive.org/web/20141114144307/http://www.dfat.gov.au/fta/acfta/
140905_update.html[Accessed on 2 October 2017]

The Agreement was a result of diplomatic and economic engagements between the
representatives of the Peoples’ Republic of China and the Prime Minister of the government of
Australia. It came into force after the completion of 21 rounds of negotiations between the two
governments that was held in Beijing on between 1st and 5th of September 2014(DFAT, 2014)
The agreement was adopted on the 20th, December of 2015. A deal to adopt this agreement
was completed and released to the public on 17th November 2014 through a joint press
Statement. After a decade of its first round of negotiations that began in Sydney on 23 rd of May
2005(Department of Trade and Foreign affairs, 2005). On 17th of June 2015, this agreement was
signed.
2. Objectives of CHAFTA and how CHAFTA attempts to its achieve its objectives
Chen& Li(2015), CHAFTA assigned was meant to bring some of these benefits and
opportunities to the parties; lifting of Foreign Investment Review Board (FIRB), access for
Australian financial services, and increased labor mobility among others.
In this discussions the below are discussed as the merits that Australia has been able to drive.
Lifting of some of the requirements of review board for Investment from Foreign
Companies
The agreement aimed at providing for lifting of the FIRB thresholds for Chinese investors and
allowing an increment of FIRB monetary threshold to $1,094million right from $252million so
as to much those of investors from the USA, Japan and Korea. The agreement also provided for
lowering investment thresholds of Agricultural land and agribusinesses.
Access for Australian financial services
Chen& Li(2015) point out that as outlined in this agreement, Australian financial institutions
were to be allowed to operate in China. Access to Chinese market has given unparalleled
opportunities to providers of financial services from Australia to exploit.
Labour mobility

Chen & Jiayue (2015), in Hall & Cox website argue that the ChAFTA aimed providing
opportunityfor movement of workers from China into Australia and that it was to be operational
within a framework of the existing 457 visa system and which could be subject to change.
Most favoured nation’ (MFN) clause
Chen & Li(2015) point out in the Hox & Cox website that ChAFTA provided for a MFN clause
which meant that Australia could also benefit from terms that are deeming favourable if China
would choose to enter into another agreement with a different party3.
Holiday and working visas
In the agreement it was established by estimates that there would be close to over 200million of
China population moving around the world by 2020. This informed the terms of agreement that
saw Australia scrap its three year holiday visa limitation and extend it to ten years. This meant
that Australia would gain an increased influx of international tourist from China. ChAFTA
recognized the importance of this for Australia .
CHAFTA ATTEMPTS TO ACHIEVE ITS OBJECTIVES
According to the Factsheet, ChaFTA has so far attempted to achieve its objectives in the
following spheres (Department of Foreign Affairs of Australia, 2017).
For Australian good Exporters
ChaFTA meant that there would be increased entry of Australian products to Chinawith no
imposition of tariff.Agricultural exports such as sheep-meat, dairies, beef, wine, and wool were
exported with no restriction on tariff.
The Factsheet details that ChaFTA was envisioned that China would provide a market for the
agricultural products from Australia.
For Australian services suppliers
3 Australian Trade and Investment Commission (2015). China-Australia Free Trade Agreement,
2015, [online]. Available at: https://www.austrade.gov.au/Australian/Export/Free-Trade-
Agreements/chafta [Accessed on 2 October 2017]

Since the enforcement of the agreement, in 2016 alone the exports in services to China has been
valued at $11.3 billion, this puts China as the largest market for Australia's services. In ChAFTA,
Australian banks, insurance providers, as well as security providers.
Under the Most-Favored Nation (MFN) clause Australia stand a chance to gain a protection if
China will continuously extend beneficial treatment to other parties4.
For investors
According to the report on the website of Department of Foreign Affairs of Australia (2017),
ChAFTA has improved chances for the two. Australia has continued to protection of the
competitive position of her businesses in China on a growing scale.
For Australian consumers and businesses
Australia is progressively eliminating remaining Australian tariffs on Chinese imports in order to
comply with other bilateral trade agreements (Department of Foreign Affairs of Australia, 2017)
Business and skilled worker mobility
The report in the website of Department of Foreign Affairs of Australia(2017) presuppose that
So far CHAFTA through improved temporary entry access within the two countries’ existing
migration and employment schemes and safeguards and through the reduction of barriers to
labor mobility has seen increased business flow for the two parties.
Work and Holiday Arrangement
Complementarily, the two countries have been able implement an immigration arrangement
granting increased demand for tourism services thus helping boost tourism in Australia.
Especially the rural parts of the same.
3. BENEFITS AND ANY DRAWBACKS FOR AUSTRALIA BECAUSE OF CHAFTA
4 Australian Trade and Investment Commission (2015). China-Australia Free Trade Agreement,
2015, [online]. Available at: https://www.austrade.gov.au/Australian/Export/Free-Trade-
Agreements/chafta [Accessed on 2 October 2017]

A news website illustrates the benefits and drawbacks that Australia has gained from the
ChAFTA since its adoption.It discusses this in terms of pros and cons looking at potential
benefits and the drawbacks the country have faced (ABC News, 2015)
Benefits for Australia:
 Consumers have been able to acquire cheaper Chinese priced manufactured products
such as electronics and white goods on cheaper prices.
 Over a period of two years, there has been an elimination of tariffs on various
commodities such as coal, and alumina gemstones.
 Australia has been able to benefit from an ongoing four year plan to reduce tariffs of 3-
14 percent between on her various manufactured exports
 Australian firms has been enjoying the privilege of guaranteed wholly-owned subsidiaries
tourism and hospitality operations in China.
 Australia has gained exclusive rights to collaborate with companies from China for both
financial and legal and services with competitive edge of owning up to 49% of joint
ventures5.
Drawbacks for Australia:
 The discretionary power by China to impose additional custom dutiesundermines
authority of Australian exporters.
 The raising threshold for review by board on Investment by Foreign Companies for the
screening of investments from China in sectors other than telecoms or agriculture may
present a bleak future Australian businesses6.
 The existence of rights to by Chinese firms to sue Australian firms is adversely affecting
Australia’s commercial interests
5 Australian Trade and Investment Commission (2015). China-Australia Free Trade Agreement,
2015, [online]. Available at: https://www.austrade.gov.au/Australian/Export/Free-Trade-
Agreements/chafta [Accessed on 2 October 2017]
6 Chen,Eugene & Li, Jiayue . (2015). The signing of the ChAFTA; A new chapter of opportunity.
Hall & Wilcox, [online]. Available oat: https://www.lexology.com/library/detail.aspx?
g=550a4b21-9c66-4a6a-9b7b-bf2bac2d3a5a[Accessed on 2 October 2017]

 The influx of Chinese labour force poses a big challenge to Australia’s labour market.
4. .
Yes ChAFTA can be enforced against either China or Australia for breach of agreement. Article
9.11(1)(b) provides that personal claiming will deliver written request to respondent for
consultations of measurements of a said dispute or breach of alleged provision the agreement., p-
92
Article 9.11(5) of ChAFTA provides the respondent herein (the party whom claimed has
been levelled against) has an obligation upon receipt of the notice for consultations within
30 days to measure and respond to the alleged matter, pg-92
Article 9.12.2(a) of ChaFTA provides the claimant may submit to arbitration body or
panel under this Section a claim is a based on, pg-93.
Article 15.14(2) provides that Pursuant to Article 15.13(1) and (2) a tribunal provides its
determination. This therefore means that if a party is found culpable then a penalty will be
issued against the respondent pursuant to Article 9.22.1, 2 and 3( pg-105).
All these illustrations therefore shows that ChaFTA is legally binding to the parties and
that a party shall be held liable if culpability is established for breach of agreement7.
QUESTION TWO
According to Turki (2009) the comparison between different avenues for resolving international
commercial disputes can take value in the following forms; in terms of the methods involved, the
7 Department of Foreign Affairs. (2017) FTA information and factsheets, [online]. Available at:
http://dfat.gov.au/trade/agreements/chafta/fact-sheets/pages/key-outcomes.aspx[Accessed on 2
October 2017]

rules and procedures within the said legal regimes, and jurisdiction and scope of the said
institutions8.
Noonan. (n.d) argues that matters arising from an internationaldisputes that is commercial in
nature are settled through three major means methods; arbitration, agriculture,and consultation.
In this discussion I will majorly dwell on Litigation.
Litigation
It involves taking a matter to court before a judge. ‘International commercial litigation’ describes
international disputes in a commercial setting requiring a settlement9.
On domestic disputes, the matter is taken to Domestic courts whichmay apply international law
applied through international conventions (e.g. CISG), customs and incoterms.
Voth v Manildra Flour Mills (1990) it was established that Domestic courts could apply
internationally available mechanisms to solve conflicts.
In hearing a case a court has to either adjudicate the dispute or to enforce a foreign judicial or
arbitral judgment. And while adjudicating a dispute, a court of law must determine the
jurisdiction, resolve the dispute with appropriate judicial personnel and applying appropriate law,
both domestic and international10.
In Supermicro Computer Inc v Digitechnic,(2001), it was held an event that a case is unsettled
under another court of different jurisdiction a domestic court may decline to exercise jurisdiction.
Enforcement: a court may choose not enforce an international treaty or foreign obligation
8 Von Glahn, Gerhard, and James Larry Taulbee. Law among nations: an introduction to public
international law. Routledge, 2015.
9 Dori, Adriani, and Vincent Richard. "Litigation Costs and Procedural Cultures–New Avenues
for Research in Procedural Law." (2016).
10 Voon, Tania. "Consolidating International Investment Law: The Mega-Regionals as a Pathway
towards Multilateral Rules." World Trade Review (2017): 1-31.

The actions of courts have been over limited by the existing conflict of laws means of different
countries in terms of the competing jurisdictions, cross vesting of jurisdiction, choice of
judgement’ and ‘choice of law’, aappropriateness of a court jurisdiction on a foreign matter and
‘Substantive law’ and ‘procedural law.11’
Jurisdictional issues are determined by courts of law and can be invoked as a right in a domestic
situation in which the court determines if it has jurisdiction. If jurisdictional issue exists the
appropriateness is therefore taken into account based on; convenience, the balancing test and
advantages and disadvantages. As established in Oceanic Sun Line Special Shipping Co Inc v
Fay (1988) decided that an existence of a consensual resolution in place that would override its
jurisdictional mandate. And when real conflicts of law exist then the doctrine of non
convenienscan be employed by a local court whether stay orders can be granted in favour of a
local court over a foreign court in local processes12.
And in determining the existence of substantivelaw, it must acknowledged in Bank of India v
Gobindram Naraindas Sadhwani (1988), the court upheld that an express choice of the
governing law having found it legal under the local law or public policy in order to establish the
liabilities and rightsof parties in the dispute and that such a law would not be merely declined on
grounds of imprecision or discretion13.
11 Moses, Margaret L. The principles and practice of international commercial arbitration.
Cambridge University Press, 2017.
12 Trakman, Leon E. "Confidentiality in international commercial arbitration." Arbitration
International 18.1 (2014): 1-18.
13 Born, Gary B., and Peter B. Rutledge. International civil litigation in United States courts.
Wolters Kluwer Law & Business, 2014.

Local courts can also enforce foreign either by adopting it or failing to adopt pursuant to the
local law. Foreign Judgments (Reciprocal Enforcement) Act 1933 (UK) provide a classic
example when Australian legislation may enforce judgments14.
Consultation: similar to negotiation, an exchange of arguments and presentations without an
adversarial approach. Consultation is sometimes embraced by parties and most treaties provide
for it including ChaFTA. In the event of an alleged breach of a treaty or an agreement parties are
always advised to consult before seeking the services of an arbiter15.
Arbitration: the use of impartial party to act arbitrator in a dispute. The parties choose the place
and time for the hearing, whether to be bound by procedural rules, the arbitrator. Most
international commercial disputes are resolved through arbitration or mediation, the International
chamber of Commerce of the ICJ and the Dispute Settlement Body of the WTO employ
arbitration as the main approach to resolving disputes among conflict bodies or even states16.
Kumar (n.d), argues that Australia Alternative Dispute Resolution has largely been a non-judicial
function as Victoria Courts seek Mediation is the main form of ADR used in Australian Courts
(Victorian). He also asserts that the following are the types of Alternative Dispute process that
exist in Australia17.
 Facilitative approach with a help of an arbiter parties develop and consider alternative
resolutions to their conflict18.
14 Briggs, Adrian. Civil jurisdiction and judgments. CRC Press, 2015.
15 Trakman, Leon, and Hugh Montgomery. "The ‘Judicialization’of International Commercial
Arbitration: Pitfall or Virtue?." Leiden Journal of International Law 30.2 (2017): 405-434.
16 Bremer, Nicolas. "Seeking Recognition and Enforcement of Foreign Court Judgments and
Arbitral Awards in the GCC Countries." (2016).
17 Zeynalova, Yuliya. "The Law on Recognition and Enforcement of Foreign Judgments: Is It
Broken and How Do We Fix It." Berkeley J. Int'l L. 31 (2013): 150.
18 Warren, Marilyn. "Australia's place in the world." Brief 44.3 (2017): 30.

 Advisory approach involving appraisal of case appraisal, conciliation, and neutral evaluation.
 Determinate processes including mediation, conciliation, facilitation and facilitated
negotiation.
 Negotiation – for example lawyers and agents.
Unlike the courts where lots of litigation take place, institutions such as the International Court
of Justice and the Dispute Settlement Body of the World Trade Organization and the ACICA
Australian Centre for International Commercial Arbitration embrace arbitration as an effective
tool for resolving commercial conflicts. In these three, the arbiter for the parties sets rules of
engagement and arbitration. The rules act as the common playground for each party to lay their
claims and counterclaims.

REFERENCES
Abbott, Tony & Robb Andrew. (2015). Minister for Trade and Investment Australia signs
landmark trade agreement with China. [online]. Available at:
http://trademinister.gov.au/releases/Pages/2015/ar_mr_150617.aspx[Accessed on 2 October
2017]
ABC News. (2015) China-Australia Free Trade Agreement: Pros and cons, [online]. Available
at: http://www.abc.net.au/news/2015-06-17/china-australia-free-trade-agreement-pros-and-
cons/6553680[Accessed on 2 October 2017]
Australian Trade and Investment Commission (2015). China-Australia Free Trade Agreement,
2015, [online]. Available at: https://www.austrade.gov.au/Australian/Export/Free-Trade-
Agreements/chafta [Accessed on 2 October 2017]
Bank of India v Gobindram Naraindas Sadhwani (1988)
Born, Gary B., and Peter B. Rutledge. International civil litigation in United States courts.
Wolters Kluwer Law & Business, 2014.
Bremer, Nicolas. "Seeking Recognition and Enforcement of Foreign Court Judgments and
Arbitral Awards in the GCC Countries." (2016).
Briggs, Adrian. Civil jurisdiction and judgments. CRC Press, 2015.
Chen,Eugene & Li, Jiayue . (2015). The signing of the ChAFTA; A new chapter of opportunity.
Hall & Wilcox, [online]. Available oat: https://www.lexology.com/library/detail.aspx?
g=550a4b21-9c66-4a6a-9b7b-bf2bac2d3a5a[Accessed on 2 October 2017]

Department of Foreign Affairs and Trade. (2014) Twenty-first round of negotiations [online].
Available on https://web.archive.org/web/20141114144307/http://www.dfat.gov.au/fta/acfta/
140905_update.html[Accessed on 2 October 2017]
Department of Foreign Affairs. (2017) FTA information and factsheets, [online]. Available at:
http://dfat.gov.au/trade/agreements/chafta/fact-sheets/pages/key-outcomes.aspx[Accessed on 2
October 2017]
Department of Trade and Foreign affairs. (2005). Australia-China FTA Negotiations, [online].
Available at: https://web.archive.org/web/20101215220124/http://dfat.gov.au/geo/china/fta/
050526_subscriber_update.html[Accessed on 2 October 2017]
Dori, Adriani, and Vincent Richard. "Litigation Costs and Procedural Cultures–New Avenues for
Research in Procedural Law." (2016).
Foreign Judgments (Reciprocal Enforcement) Act 1933 (UK)
Government of Australia & The Government of The People’s Republic of China. (2015). The
China-Australia Free Trade Agreement (ChAFTA, [online]. Available
at:http://dfat.gov.au/trade/agreements/chafta/official-documents/Pages/official-documents.aspx
[Accessed on 2 October 2017]
In Oceanic Sun Line Special Shipping Co Inc v Fay (1988)
Moses, Margaret L. The principles and practice of international commercial arbitration.
Cambridge University Press, 2017.
Moses, Margaret L. The principles and practice of international commercial arbitration.
Cambridge University Press, 2017.

Noonan, Maureen. (n.d). International commercial disputes, [online]. Available at:
http://sydney.edu.au/lec/subjects/commercial/topic_notes/Winter%202013/Module
%209%20international%20commercial%20dispute%20winter13.ppt[Accessed on 2 October
2017]
Supermicro Computer Inc. v. Digitechnic, 145 F. Supp. 2d 1147, 2001 U.S. Dist. LEXIS 7620
(N.D. Cal. Jan. 30, 2001)
Trakman, Leon E. "Confidentiality in international commercial arbitration." Arbitration
International 18.1 (2014): 1-18.
Trakman, Leon, and Hugh Montgomery. "The ‘Judicialization’of International Commercial
Arbitration: Pitfall or Virtue?." Leiden Journal of International Law 30.2 (2017): 405-434.
Turki, Al Saud. (2009). A Comparison between the Dispute Settlement Procedures in the
International Court Of Justice and the World Trade Organisation. LLB,[online]. Available at:
http://bura.brunel.ac.uk/bitstream/2438/4477/1/FulltestThesis.pdf
Von Glahn, Gerhard, and James Larry Taulbee. Law among nations: an introduction to public
international law. Routledge, 2015.
Voon, Tania. "Consolidating International Investment Law: The Mega-Regionals as a Pathway
towards Multilateral Rules." World Trade Review (2017): 1-31.
Voth v Manildra Flour Mills Pty Ltd (1990), 65 ALJR 83 (HC)
Warren, Marilyn. "Australia's place in the world." Brief 44.3 (2017): 30.
Zeynalova, Yuliya. "The Law on Recognition and Enforcement of Foreign Judgments: Is It
Broken and How Do We Fix It." Berkeley J. Int'l L. 31 (2013): 150.