Australia Knuckles Down on Westinghouse Case

Searching for a way to protect Australian companies from the reach of U.S. antitrust action, the conservative coalition government of Prime Minister Malcolm Fraser recently announced it is considering legislation that would allow Australian companies to seize the foreign assets of U.S. corporations.

The announcement, coming days before the Fraser government's narrow election victory on October 18, was an extraordinary step for a party that has staunchly defended U.S. multinational interests. Prompting Australia's stand is Westinghouse Electric's "uranium cartel" antitrust suit, currently pending in the federal district court of Northern Illinois. Named in the suit are 29 uranium producers, including four Australian companies.

The Fraser government accompanied its threat of action with the release of confidential diplomatic communications between Australia and the U.S. State Department, detailing Canberra's efforts to convince the U.S. that its courts have no jurisdiction over the Australian defendants in the case, Conzinc Rio-Tinto, Pancontinental, Mary, Kathleen Uranium and Queensland Mines.

Australia's retaliation would be modeled on the United Kingdom's grab-back law, the Australian attorney general announced. Under such a statute, if a U.S. court seized the American assets of the Australian companies to satisfy a judgment in favor of Westinghouse, the four companies could respond by taking Westinghouse's Australian assets.

Westinghouse initiated the antitrust action after it was sued by a number of U.S. and foreign utilities for breach of uranium supply contracts. During the late sixties and early seventies, Westinghouse offered to supply low-priced uranium to purchasers of its nuclear reactors. When the price of uranium tripled in 1975, Westinghouse broke the agreements and began negotiating settlements that may eventually cost the company 11.5.$1 billion.

Shortly after Westinghouse filed suit in October 1976, the Australian parliament enacted a law prohibiting companies from complying with the U.S. court's request for information. The government has invoked this law on several occasions, once to prevent the subsidiary of Getty Oil, a U.S. company, from responding to a subpoena. In 1979, Parliament passed a statute prohibiting the enforcement in Australia of court judgments in foreign antitrust cases.

Westinghouse seeks to recover treble damages under the Clayton Antitrust Act by arguing that 20 American and nine foreign companies conspired to restrict the production of uranium. The Australian government admits that it restrained exports and sought production agreements from other countries, but it defends these actions as necessary to stabilize prices after the U.S. embargoed the importation of uranium in 1971.

Referring to the U.S. prohibition on imports, Deputy Prime Minister J. Douglas Anthony said: "It seems to me that it's quite inappropriate for the United States, having acted in that way, now to seek legal jurisdiction over the response of others." Anthony warned that "there are serious dangers if one country is to cast its laws too widely in substantial disregard of the laws and policies of other governments."

- George Riley