AUSTRALIA Law and Practice Contributed by: Dennis Miralis, Jack Dennis, Henry Yu and Darren Pham, Nyman Gibson Miralis
Based on this, a party would have to show only on the balance of probabilities that they would breach Australian sanctions (a breach that would ordinarily require proving beyond a reasonable doubt). Even where there is not a suitable force majeure clause, there may be other avenues available to par - ties where sanctions impact contracted obligations, such as the common-law defence of supervening illegality. This defence is enlivened where there is a change in the law – after the formation of a contract – that renders the future performance of a contract unlawful. Supervening illegality is a defence to the non-performance of the contract. In some circum - stances, supervening illegality may have the same terminating effect as frustration. The impact of non-Australian sanctions on the per - formance of contractual obligations remains a largely Australian courts are yet to consider key questions concerning the enforcement of Australian judgments – or the recognition and enforcement of foreign judg - ments – where sanctions are live issues. These questions will turn on the precise sanction regimes that are at play, the role of the sanctioned person or entity (eg, plaintiff, defendant, judgment creditor or judgment debtor), and the circumstances of the matter, including the timing of the proceedings. There may be influence drawn from UK decisions such as PJSC National Bank Trust & Anor v Boris Mints & Ors (2023) EWHC 118 (Comm) and the Ministry of Defence and Support for Armed Forces of the Islamic Republic of Iran v International Military Services Ltd (2019) 1 WLR 6409 . As a starting point, a permit may be able to be issued under regulation 20 (4) of the Sanctions Regulations for certain dealings required to “satisfy a judicial, administrative or arbitral lien or judgment that was made before the date on which the person or entity became a designated person or entity” where the dealing is not “for the benefit” of that designatee. untested question. 6.2 Enforcement
It remains to be seen how courts will interpret and apply this provision, including whether it extends to foreign judgments. Regardless, ASO has noted that assets provided to a designated person or entity as a result of a legal proceeding or settlement will be frozen until the designation is removed, which is an approach that seeks compliance both with pre-des - ignation judgments and sanctions regimes. What is clear is that a permit basis is not expressly available for judgments secured after a designation, even where those proceedings were ongoing at the time the designation was made, further widening the impact of sanctions. 7. Designation, Compliance and Circumvention 7.1 Executive Body The Minister of Foreign Affairs is responsible for mak - ing designation decisions. 7.2 Scope of Designation Strictly speaking, only those who are expressly desig - nated are designated. However, Regulation 14 of the Sanctions Regulations prohibits indirect facilitation of providing sanctioned assets to a designated person. That is to say, it is an offence if one “indirectly makes an asset available to or for the benefit of a person or entity” without a permit. Australian courts have stated that this regulation should be given “the full mean - ing that is open from the words”, so as to include provision “through interposed corporate entities” and “where the benefit is either the object, effect or likely effect of making the asset available”. There are also additional offences that extend prohi - bitions to entities or bodies “owned or controlled” by or those “acting on behalf of” (and similar language) sanctioned governments, individuals, or entities. More definitively, the assets of a designated person may not be easy to identify and extend beyond those that are obvious as it encapsulates assets that are owned or controlled by the designated person. ASO’s Guidance Note – dealing with assets owned or con - trolled by designated persons and entities – advis -
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