Vol 10 (2013) - Issue 6

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Eopply New Energy Technology Co Ltd v EP Solar Pty Ltd [2013] FCA 356

Introduction
On 19 April 2013 the Federal Court of Australia handed down its judgment in the matter of Eopply New Energy Technology Co Ltd v EP Solar Pty Ltd [2013] FCA 356 granting Eopply leave to enforce a foreign arbitral award against an Australian company in liquidation. The applicant, Eopply, sought to enforce an award made in China on 15 February 2012 by the China International Economic and Trade Arbitration Commission ('CIETAC') Shanghai Sub-Commission against EP Solar, an Australian corporation in liquidation.
The matters for the Court’s consideration were:
– whether leave to proceed against a company in members’ voluntary liquidation ought be granted pursuant to section 500(2) of the Corporations Act 2001 (Cth) ('Corporations Act'); and
– whether the applicant had satisfied the requirements for the enforcement of a foreign arbitral award in the Federal Court of Australia.

Background
On 5 April 2013, joint and several liquidators were appointed to EP Solar by resolution of its sole shareholder (member). Although the shareholder did not pass a separate resolution that EP Solar be ‘wound up’ voluntarily pursuant to section 491 of the Corporations Act, the Court considered such resolution implicit in the resolution passed by the sole shareholder on 5 April 2013 and proceeded on that basis.
Under the Australian regime, following the making of a section 491 resolution for winding up, unless the directors of a company, or a majority of them, make a declaration of solvency pursuant to section 494 of the Corporations Act, a members’ voluntary (solvent) winding up proceeds as a creditors’ voluntary (insolvent) winding up. There was no evidence before the Court as to whether the directors of EP Solar had made such a declaration. Moreover, EP Solar did not appear in the proceedings and the Court dealt with the applicant’s claim in its absence.
EP Solar’s liquidators had indicated to the applicant’s solicitors and to the Federal Court registry by facsimile dated 9 April 2013 that:
(a) the liquidators did not intend to take any steps in relation to the proceedings or to instruct solicitors to appear on their behalf in the proceedings; and
(b) they did not oppose the applicant’s claim, nor the grant of leave to the applicant to proceed with its claim under section 500(2) of the Corporations Act.

Section 500(2) of the Corporations Act provides that:
'After the passing of the resolution for voluntary winding up, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.'
In addition to seeking leave under section 500(2) of the Corporations Act (the threshold question), Eopply also sought leave pursuant to section 8(3) of the International Arbitration Act 1974 (Cth) ('IAA') to enforce the arbitral award against EP Solar as if it were a judgment of the Court.
Section 8(3) of the IAA provides that:
'Subject to [Part II of the IAA], a foreign award may be enforced in the Federal Court of Australia as if the award were a judgment or order of [this/that] Court.'
In his judgment, Justice Foster noted that there is no longer any necessity for an award creditor to seek leave to enforce a foreign award under the IAA. The only relevant issue (apart from the threshold question ) was whether the requirements of Part II of the IAA had been satisfied by the applicant.