CASE NOTE: Comandate Marine Corp v Pan Australia Shipping Pty Ltd [2006] FCAFC 192 (20 December 2006)

• Author: Samuel Luttrell
• Position: Associate Lecturer, Murdoch University School of Law. The author is grateful to Kate Lewins and Sarah Derrington for their comments on earlier drafts of this case note
• Pages: 92-95

Comandate Marine Corp v Pan Australia Shipping Pty Ltd [2006]

FCAFC 192

Sa m Luttre ll∗

Australia’s status as a forum supportive of international commercial arbitration has been strengthened by

the decision of the Full Court of the Federal Court in Comandate Marine Corp v Pan Australia Shipping

Pty Ltd. The Full Court held that the commencement of in rem proceedings for the arrest of a ship will not

constitute repudiation, or acceptance of repudiation, of an agreement to arbitrate or waiver of the right to

arbitrate. The Full Court also had occasion to consider the whether claims for misleading or deceptive

conduct brought under the Trade Practices Act 1974 (Cth)(TPA) were arbitrable in the context of an ‘all

disputes arising out of’ arbitration clause. The Full Court distinguished the decision in Hi-Fert Pty Ltd v

Kiukiang Maritime Carriers Inc1 (The Kiukiang Career) and held that, in the context of the NYPE 1993

contract and its embedded agreement to arbitrate, TPA pleas were arbitrable notwithstanding the absence of

an equivalent consumer protection statute in the law of the forum selected by the parties.

The case involved a dispute between the parties to an NYPE 1993 charter party with an arbitration clause

stipulating English law arbitration in London (The Agreement). Pan Australia Shipping Pty Ltd (Pan) was

involved in the coasting business in Australian waters. Comandate Marine Corp (Comandate), a Liberian

company, owned a general cargo vessel called The Comandate (the Vessel). Under the terms of the

Agreement, this vessel was time chartered to Pan for use as a second vessel in the costal trade. Pan’s

primary vessel, Boomerang I, was demise charted from an unrelated party. The Comandate, which was

known for a period as the Boomerang II, was to serve as the sister ship.

A dispute arose between Pan and Comandate after the Vessel was detained by the Australian Maritime

Safety Authority (AMSA). The Vessel had a hull fracture and its master and crew lacked visas. Pan argued

that Comandate had breached the terms of the time charter agreement, and USD 2.5 million in damages

were sought. Pan also claimed that Comandate had made misleading representations as to future events in

contravention of section 51A of the TPA. The relevant representations related to the fitness and legal

entitlement of the Vessel and its crew to conduct coastal trade in Australia.

Pan commenced in rem proceedings in the Federal Court for the arrest of the Vessel pursuant to the

Admiralty Act 1988 (Cth), and a warrant was granted and executed against the Vessel in Fremantle. The

Vessel was released five days later after security was put up by Comandate. Comandate then sought an

unconditional undertaking from Pan that Pan would arbitrate in London pursuant to the Agreement, and

threatened an application for an anti-suit injunction in the High Court of Justice in London in the event no

undertaking was given. None was. Comandate’s solicitors then commenced arbitration in London on 14

June 2006, putting Pan on notice on the same day.

Pan proceeded to apply for an anti-anti-suit injunction to restrain Comandate from applying to the High

Court for an anti-suit injunction. Emmett J granted the anti-anti-suit injunction on 22 June 2006. The

injunction was extended to 13 July 2006, by which time Pan had been ordered to file its Statement of Claim

pursuant to r22 of the Admiralty Rules. On 23 June 2006, Comandate filed a motion for a stay of Pan’s

proceedings in favour of arbitration in London. This application was brought under section 7(2) of the

International Arbitration Act 1974 (Cth). The matter was heard by Emmett J on 13 and 14 July 2006.

Orders extending the anti-anti-suit in favour of Pan, and denying the stay sought by Comandate, were

made.2

∗ Associate Lecturer, Murdoch University School of Law. The author is grateful to Kate Lewins and Sarah Derrington for their

comments on earlier drafts of this case note.

1 (No.5) (1998) 90 FCR 1.

2 Pan Australia Shipping Pty Ltd v The Ship ‘Comandate’ (No.2) [2006] FCA 1112.

(2007) 21 A&NZ Mar LJ

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