Federal Court of Australia

Zhejiang Lishui Mengxiang Education Development Co Ltd v Pan [2026] FCA 992

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 8(3) of the International Arbitration Act 1974 (Cth), the arbitral award of the Arbitral Tribunal in the Beijing Arbitration Commission reference number (2024) Jing Zhong An Zi No. 00003, issued in Beijing on 3 April 2025, be enforced against the respondents as if it were a judgment of the Court.

2.    Judgment be entered in favour of the applicant against each of the respondents jointly and severally in the amount of CNY93,018,143.30 or the Australian dollar equivalent at the time of payment.

3.    The respondents jointly and severally pay the costs of the proceeding.

4.    The matter be returnable at 10:15 am on 4 September 2026 (Return Date).

5.    In respect of each of the respondents, orders 1 to 3 be stayed:

(a)    until 5:00pm on the Return Date; or

(b)    if by 31 August 2026 that respondent files an application to set aside these orders, until the final determination of that application.

6.    The applicant:

(a)    provide notice of these orders to each of the respondents by 5:00pm China Standard Time (CST) on 3 August 2026; and

(b)    inform each of the respondents that unless they file an application to oppose and set aside these orders by 31 August 2026, then upon an affidavit being provided establishing to the Court’s satisfaction that notice has been given to that respondent, the stay granted in order 5 will expire in respect of that respondent.

7.    In respect of the first respondent, the notice and information to be provided under order 6 are to be provided by the following methods:

(a)    by text message to +86 13301265336 notifying him/her of the case number of the Federal Court of Australia proceeding, the next return date, and the contact phone number and email address of the applicant’s Chinese lawyers;

(b)    by email to bj@skjyjt.com;

(c)    by letter to or left at Room 406, Federation of Industry and Commerce Building, No. 22 Baiqiao Street, Dongcheng District, Beijing, China; and

(d)    by letter to or left at Room 703, Unit 1, Building 2, Phase 1, Fuhaiyuan Community, Yanjiao Development Zone, Sanhe City, Hebei Province, China.

8.    In respect of the second respondent, the notice and information to be provided under order 6 are to be provided by the following methods:

(a)    by text message to +86 13301265336 notifying him/her of the case number of the Federal Court of Australia proceeding, the next return date, and the contact phone number and email address of the applicant’s Chinese lawyers;

(b)    by email to bj@skjyjt.com;

(c)    by letter to or left at Room 406, Federation of Industry and Commerce Building, No. 22 Baiqiao Street, Dongcheng District, Beijing, China;

(d)    by letter to or left at Room 2901, Unit 1, Building 32, Xinshuiwan Huating, Yanjiao Development Zone, Sanhe City, Hebei Province, China; and

(e)    by letter to or left at the office address of his/her arbitration lawyer, being Lawyer Zhou Xiaoshan, No. 11, Building 2, Xinjiekou Xili Area 3, Xicheng District, Beijing, China.

9.    In respect of the third respondent, the notice and information to be provided under order 6 are to be provided by the following methods:

(a)    by text message to +86 13301265336 notifying him/her of the case number of the Federal Court of Australia proceeding, the next return date, and the contact phone number and email address of the applicant’s Chinese lawyers;

(b)    by email to bj@skjyjt.com;

(c)    by letter to or left at Room 406, Federation of Industry and Commerce Building, No. 22 Baiqiao Street, Dongcheng District, Beijing, China; and

(d)    by letter to or left at No. 049, North Street, Chengguan Town, Tongxu County, Henan Province, China.

10.    In respect of the fourth respondent, the notice and information to be provided under order 6 are to be provided by the following methods:

(a)    by text message to +86 13301265336 notifying him/her of the case number of the Federal Court of Australia proceeding, the next return date, and the contact phone number and email address of the applicant’s Chinese lawyers;

(b)    by email to bj@skjyjt.com;

(c)    by letter to or left at Room 406, Federation of Industry and Commerce Building, No. 22 Baiqiao Street, Dongcheng District, Beijing, China; and

(d)    by letter to or left at No. 26, Group 24, Jianguo Community, Xunke County, Heilongjiang Province, China.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(Delivered ex tempore; revised from transcript)

STEWART J:

1    The applicant seeks to enforce, under s 8(3) of the International Arbitration Act 1974 (Cth) (IAA), an arbitral award of the Beijing Arbitration Commission, reference (2024) Jing Zhong An Zi No. 00003, issued in Beijing on 3 April 2025 against the four individual respondents.

2    On 27 July 2021, the applicant, the four respondents, Beijing Shangkun Education Technology Development Co., Ltd (Beijing Shangkun) and some other entities that are not parties to this court proceeding entered into an “Investment Cooperation Agreement”. As its title suggests, the subject matter of that agreement is commercial.

3    On 18 April 2022, the parties entered into Supplemental Agreement No. I. That agreement included an arbitration agreement. It was that any dispute arising out of or in connection with the “Investment Cooperation Agreement” and the supplementary agreement shall be submitted to the Beijing Arbitration Commission for arbitration in accordance with its arbitration rules.

4    Further supplementary agreements were concluded between different combinations of parties to the original Investment Cooperation Agreement. Relevantly, Supplemental Agreement No. V has the applicant, the first respondent and the third respondent as parties. It contains an arbitration agreement in materially the same terms as the arbitration agreement in Supplemental Agreement No. I.

5    During late 2023 or early 2024, the applicant commenced arbitration in the Beijing Arbitration Commission against Beijing Shangkun, the four respondents and a number of other parties.

6    The arbitral tribunal held a hearing in Beijing on 22 November 2024. The second respondent (who was called “Respondent 3” in the arbitration) sent a lawyer to attend the hearing. The other respondents and Beijing Shangkun had been notified by the Beijing Arbitration Commission about the arbitration and did not appear at the hearing. That is recorded in the subsequent award.

7    On 3 April 2025, the arbitral tribunal handed down its award, being the award referenced in the opening paragraph to these reasons for judgment.

8    The operative part of the award is as follows:

Based on the above facts and opinions, the arbitral tribunal, after deliberation, awards as follows:

(1)     [Beijing Shangkun] shall pay the [applicant] the contractual amount of RMB 72.41 million.

(2)     [The first respondent, the second respondent, the third respondent, and the fourth respondent] shall bear joint and several liability to the [applicant] for the amount payable by [Beijing Shangkun] under Item (1) of this Award.

(3)     Respondent 6 shall bear joint and several liability to the [applicant] for the amount payable by [Beijing Shangkun] under Item 91) of this Award within the scope of RMB 54.76 million.

(4)     [Beijing Shangkun] and [the first respondent, the second respondent, the third respondent, and the fourth respondent] and Respondent 6 shall pay the [applicant] liquidated damages of RMB 20 million.

(5)     The arbitration fee in this Case is RMB 640,496 (including arbitrators’ remuneration of RMB 360,471 and intuitional fee of RMB 280,025, which has been fully prepaid by the [applicant]). The [applicant] shall bear RMB 32,024.8, and [Beijing Shangkun] and [the first respondent, the second respondent, the third respondent, and the fourth respondent and Respondent 6 shall directly pay the [applicant] RMB 608,471.2 for the arbitration fees advanced by the [applicant] on their behalf.

(6)     The [applicant’s] other arbitration claims are dismissed.

9    After the award was rendered, the Beijing Arbitration Commission notified all the respondents of the award.

10    The applicant’s evidence is that it has only recovered CNY327.90 in satisfaction of the award.

11    The result is that as against the respondents, the outstanding component of the award is CNY93,018,143.30 calculated as follows:

12    There are a number of matters that an applicant seeking to enforce an award under the IAA must satisfy the Court of.

13    I am satisfied the award is a “foreign award” within s 8(1) read with 3(1) of the IAA. That is because it is an arbitral award made pursuant to an arbitration agreement in a country other than Australia.

14    As mentioned, the underlying dispute arising from an agreement regarding commercial investment cooperation. As such, the dispute is capable of settlement by arbitration. In that regard I refer to the requirement in Art 2(1) of the New York Convention (Convention on the Recognition and Enforcement of Foreign Arbitral Awards, opened for signature 10 June 1958, 30 UNTS 3 (entered into force 7 June 1959)) the official text of which is annexed as Sch 1 to the IAA.

15    I am satisfied that the copy of the arbitral award which has been tendered is duly authenticated and certified. I inspected the original and then returned it to the applicant. There is also a duly certified copy of the arbitration agreement exhibited to one of the affidavits that the applicant relies on. I also inspected the original of that and was satisfied as to its authenticity. There are English translations of those documents in evidence produced by an interpreter certified by the Ministry of Human Resources and Social Security of the People’s Republic of China.

16    The applicant has filed an affidavit by its solicitor stating the extent to which the foreign award has not been complied with as at the date of application and also the usual or last known place of residence or business of the respondents.

17    I am satisfied that the parties to the agreement are parties to the award.

18    The applicant seeks judgment against only some but not all of the award debtors. I am satisfied that the relief that is sought is nevertheless relief strictly in accordance with the award because in respect of each award debtor, the relief sought is in accordance with the award. Insofar as joint and several liability with award debtors against whom judgment is not sought is concerned, I am satisfied that any payment by such a debtor will be able to be called in credit by any judgment debtor under the judgment to be made who is faced with execution of the judgment. That is to say, the judgment will not result in a greater burden on the judgment debtors merely because it is not also entered against the other joint and several award debtors.

19    Finally, the applicant rightly points out as canvassed above that it and the first and third respondents are party to two arbitration agreements which might be thought to cover the dispute, one in Supplemental Agreement No. I and the other in Supplemental Agreement No. V. The point raised by the applicant is that it is conceivable that the first or third respondents might raise an objection to the enforcement of the award on the basis that the Beijing Arbitration Commission stated that it assumed jurisdiction under the arbitration agreement in Supplemental Agreement No. I and not that in Supplemental Agreement No. V. It may be contended that the latter is the applicable agreement.

20    For the moment, recognising that I have not heard any submissions on this point by the relevant respondents, I am satisfied that any such contention lacks merit, in particular because the terms of the relevant arbitration agreements are materially the same.

21    The evidence is that none of the respondents has raised any objection to the enforceability or validity of the arbitral award and no application has been made at the seat to set the award aside. On the evidence, it does not appear that there is a serious basis upon which enforcement might be resisted.

22    For those reasons, I am satisfied that it is justified to make the usual order enforcing the award and entering judgment on its terms but to issue a stay for a period of approximately six weeks to enable any of the respondents to apply to set aside the judgment. I will also make provision for the applicant to notify the respondents. In that respect, I am satisfied that the proposed methods of notification are in accordance with the parties’ agreement as recorded in the Investment Cooperation Agreement and in accordance with the notification provisions of the Beijing Arbitration Commission Rules to which the parties also agreed. They are the best methods of contact currently available to the applicant.

Associate:

Dated:    27 July 2026

SCHEDULE OF PARTIES