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A successful litigant has various enforcement options, each varying in cost and effectiveness. The choice of method should be guided by the debtor’s available assets and the litigant’s strategic goals. Depending on the jurisdiction and the nature of the claim, enforcement can generally be pursued some years following the order. Potential enforcement steps are outlined in the table below.
| Enforcement option | How it works | When to use it |
| Examination notice | This compels a debtor to answer questions about their assets in an oral examination in a court. | You need information about the debtor’s assets to decide which enforcement option to pursue. |
| Writ of execution, seizure and levy of property | This directs a court official to take and sell property of the person that owes the money. | The debtor has illiquid assets (such as housing, vehicles or other items of value) that can be liquidated or available money. |
| Garnishee order | Order of the court to a third party directing it to pay assets of the debtor to you directly instead (such as a person’s employer). | You have the bank account or other key details so you can direct the bank to pay you the debtor’s money directly. |
| Charging order | Creates a security interest over specific assets owned by the debtor to the value of the judgment debt and restrains the debtor from dealing with the asset. | There is a particular asset of value which you seek to secure. |
| Asset preservation orders, provisional liquidation or receivership | Freezing orders restrain the debtor from dealing with their assets in a way intended to put them beyond reach and frustrate the court’s process.
Provisional liquidators or receivers can be appointed to corporate debtors to take control of their affairs and assets where it appears the assets of the company will be dissipated and a lack of control and proper corporate governance. |
You have reason to believe assets are being put beyond reach or dissipated outside of the ordinary course of the debtor’s business. |
| Winding up and bankruptcy proceedings | Appointing an independent third party to the debtor’s assets with a view to liquidating them and paying out creditors.
The most common method in Australia is to issue a statutory demand or bankruptcy notice, which gives the debtor 21 days to pay, failing which they are presumed insolvent and liable to have an administrator or trustee appointed. |
The process of appointing an external administrator presents an existential threat to the debtor, who may offer up assets to preserve their reputation and credit rating.
If external administrators are appointed, it is their duty to investigate and gather in all assets of the debtor for distribution to creditors. They have extraordinary powers of investigation and can prosecute antecedent transactions and claims against the former officers of the company. |
Enforcement of arbitral awards
Arbitration awards, the product of a successful arbitration, can also be enforced. An award is final and binding with limited recourse to challenge. Sometimes, a creditor needs to enforce the award in a country other than that which issued the award.
Australia has implemented the central international arbitration framework (UNCITRAL Model Law and the New York Convention) into federal legislation through the International Arbitration Act 1974 (Cth) (IAA). Domestic arbitration sits at state and territory level, with each Australian state giving effect to the UNCITRAL Model Law through their respective Commercial Arbitration Acts, such as the Commercial Arbitration Act 2010 (NSW).
The legislation provides international parties with reassurance as to Australia’s approach to foreign arbitral awards, particularly given one of the IAA’s objects is to encourage the use of arbitration as a method of resolving disputes. Overall, Australia is considered a pro-arbitration jurisdiction, and recognition and enforcement of both foreign and domestic arbitral awards is typically conducted with consistency and transparency.
Federal or Supreme Courts
The Federal Court of Australia or an Australian state or territory court may enforce foreign and domestic international arbitral award as if it were a judgment or order of that court. The Federal Court enforces most international arbitral awards. Domestic commercial arbitral awards are enforced by the relevant state or territory supreme court, unless the parties agree another court has jurisdiction.
The enforcement process
A party seeking to enforce an arbitral award will need to make a written application, with accompanying affidavit evidence, to the appropriate court to recognise and enforce the award as a judgment. This process can occur within a few weeks.
Challenges to the award
Parties have strictly defined parameters within which they can seek review of the award (with a view to it being set aside) or challenge enforcement and recognition of the award, with different timing requirements applying.
| Potential grounds to challenge an arbitral award (fairness and procedural) |
| 1. Incapacity of a party to the arbitration agreement. |
| 2. Invalid arbitration agreement under applicable laws of the agreement or where the award was made. |
| 3. Inadequate notice of an arbitrator’s appointment or the arbitral proceedings, or a party was otherwise unable to present their case. |
| 4. Award addresses issues not contemplated by arbitration submission or goes beyond its scope |
| 5. Non-compliance of arbitral tribunal or procedure with parties’ agreement or laws of arbitration venue. |
| 6. Subject matter incapable of settlement by arbitration (by reference to law of the country reviewing or enforcing the award). |
| 7. Enforcement would be contrary to public policy e.g. fraud or corruption in relation to the making of award; breach of natural rules of justice. |
| 8. Recognition / enforcement challenge: award is not yet binding or has been annulled or suspended by a competent authority in the relevant country. |
Appeal (domestic tribunal award only)
A domestic arbitral award can be appealed on a question of law, subject to the appeal application being made within three months of the award, with the parties’ agreement, and the court’s leave. The court will only grant leave if satisfied one of the parties’ rights would be substantially affected by determination of the question of law, and the arbitral tribunal’s decision on the question was obviously wrong or open to serious doubt.
There is no equivalent section in the Model Law as applicable to foreign arbitral awards.
What if a sovereign State is involved?
Where seeking to enforce the foreign arbitral award against a foreign State, or separate entity of a Foreign State, the Foreign States Immunities Act 1985 grants immunity from the jurisdiction of Australian courts in a proceeding, although it can submit to the jurisdiction by agreement (such as by a contract or treaty).
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