Australia strengthens arbitration enforcement amid surge in high-value disputes

However, recent rulings on sovereign immunity signal nuanced challenges for investment treaty awards.

Australian arbitration participation and practitioner trends

The latest statistics from the Australian Centre of International Commercial Arbitration (ACICA), published in June 2025, revealed that it administered 25 new cases in the prior 12 months, with the total value of active cases above A$3.3 billion (approx. US$2.23bn), up from A$2.1bn in 2023, signalling that arbitration cases heard in the jurisdiction were often higher-value disputes.

• Read more: international arbitration developments and trends for 2025-26

Of the new arbitration cases, most were under ACICA Rules 2021, although some were under the ACICA Expedited Rules 2021 or UNCITRAL Rules 2021. 46% of new arbitrations involved at least one non-Australian party; however, this figure would rise to 69% if Australian-residing but foreign-owned entities were considered as international.

Construction industry disputes were the most prevalent, accounting for a significant 30.8% of all ACICA administered cases, while the energy and resources and finance sectors were also heavily featured. Domestically, Sydney was the preferred seat of new arbitrations, followed by Brisbane, South Australia and Queensland. 92% of new arbitrations were before sole arbitrators. Nationalities included Australian, British and Singaporean parties, and parties from Taiwan.

Australian courts continue to take proactive stance in upholding arbitral awards

Recent decisions of the Federal Court of Australia demonstrate that Australian courts will not hesitate to intervene in support of arbitration-related proceedings.

For example, the Federal Court of Australia confirmed it has jurisdiction to issue worldwide freezing orders, including over foreign entities, related to the enforcement of foreign arbitral awards in Australia. In one such case, a company based in the Hong Kong Special Administrative Region (SAR) was restrained from disposing of assets globally up to the award amount. On appeal, the court rejected arguments that consent was needed for the Federal Court to have jurisdiction, relying on Rule 10.42 of the Federal Court Rules 2011, on the basis that the proceedings related to enforcement of a foreign award pursuant to a law of the Commonwealth, the International Arbitration Act 1974 (Cth). The court clarified that this power to grant the freezing order was not limited to Australian assets and upheld the freezing order due to clear evidence of a risk of asset dissipation.

Similarly, in another case, the court granted a freezing order over Australian assets of a Chinese entity in relation to enforcement of a Chinese award in Australia, demonstrating a proactive stance to preserving assets and upholding the effectiveness of arbitral awards.

Further, the Queensland Court of Appeal adopted a pro-arbitration approach to contractual interpretation in a case (39-page / 564 PDF) involving parties to a coal-seam gas project in Queensland. Santos Toga Pty Ltd (Santos) had agreed to pay royalties to Tri-Star Petroleum Company (Tri-Star) on petroleum produced under a settlement agreement which contained an arbitration clause. Subsequently, JV partners Santos and KGLNG E&P Pty Ltd (KGLNG) entered into various agreements through which KGLNG acquired equity interests in the project and agreed to pay a proportionate sum of Santos’ royalty obligations to Tri-Star.

Following arbitration of a dispute between Santos and Tri-Star concerning the under-payment of royalties, Santos commenced proceedings to recover KGLNG’s proportionate share of the additional royalties awarded against it. The court found that KGLNG was contractually bound, via its agreements with Santos, to pay its proportionate share of the award amount to Santos, despite not being a party to the arbitration. The court found that the deeds must be construed as a whole, covering “any royalty payable” under the settlement agreement, not just amounts known at the time of execution. The court respected the sanctity of the arbitration agreement and the doctrine of privity in finding that, although KGLNG was not party to the arbitration agreement and the award could not be enforced against it by Tri-Star, KGLNG was nonetheless liable to pay its share of the royalties pursuant to its agreement with Santos. The arbitration award had simply quantified those obligations.

Australia’s approach to enforcing investment arbitration awards

Australia has established itself as a popular seat for the enforcement of investment arbitration awards. Notably, four Energy Charter Treaty awards were enforced by the Federal Court of Australia against Spain. The court found that by signing the ICSID Convention, Spain waived its sovereign immunity. In reaching this decision, the court dismissed Spain’s arguments on the ‘primacy’ of EU law, finding that Spain still owed obligations under international law by virtue of the ISCID and that EU law does not have primacy over international law beyond the EU system. The court found that ISCID awards are binding and enforceable and that the ISCID system is “self-contained”. The court also rejected Spain’s arguments that its immunity may apply to the execution against state assets but not to the recognition of the award itself.

Contrastingly, however, in CCDM Holdings LLC v Republic of India (23-page / 287KB PDF), the Federal Court ruled in favour of India’s defence to enforcement of an investment treaty award on the basis of state immunity. The court accepted India’s defence that, despite India being a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, its ‘commercial reservation’ limited its application to commercial disputes only. Since bilateral investment treaties and investor-state awards are not considered ‘commercial’ under Indian law, sovereign immunity was never waived for those awards. This decision may have important repercussions considering many state parties to the New York Convention have made commercial reservations: while a growing number of national courts are now interpreting "commercial" to include disputes arising from investment treaties, here the court adopted a narrow interpretation of commercial transactions. The case has been appealed to the High Court of Australia so it remains to be seen whether it will be confirmed. If the decision is upheld, it may affect the popularity of Australia as an enforcement seat for non-ICSID investment treaty awards.

Co-written by Alaryss Bosco of Pinsent Masons.