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Arbitral proceedings

Starting an arbitration proceeding
What is needed to commence arbitration?

Arbitration is commenced by one party (the claimant) issuing a notice in writing (a notice of arbitration or a request for arbitration) to the other party (the respondent) to begin the arbitral proceedings. The arbitral rules agreed to by the parties (if any) may set out the requirements for the notice of arbitration or request for arbitration. The notice of arbitration or request for arbitration is usually emailed or couriered to the respondent. 

Limitation periods
Are there any limitation periods for the commencement of arbitration?

No specific limitation periods apply to the commencement of arbitration. However, the usual limitation periods that apply to the commencement of claims in the courts also apply to arbitration. The limitation period for contractual claims is six years (12 years if the contract is a deed) from the date on which the breach occurred. The limitation period for tort claims is six years from the date on which the cause of action arose. 

Procedural rules
Are there any procedural rules that arbitrators must follow?

The only procedural rules that must be followed are those set out by the parties in the arbitration agreement. Otherwise, the arbitral tribunal has extensive powers to determine the rules of procedure, provided that the arbitration is conducted in an appropriate manner (Article 19 of the UNCITRAL Model Law). The tribunal has the power to determine the admissibility, relevance, materiality and weight of any evidence.

Dissenting arbitrators
Are dissenting opinions permitted under the law of your jurisdiction?

An arbitrator may issue a dissenting opinion. Article 31 of the UNCITRAL Model Law provides that an award must be decided by the majority of the tribunal. The dissenting arbitrator may issue a dissenting opinion explaining the reasons for his or her dissent.

Judicial assistance
Can local courts intervene in proceedings?

The extent to which the local courts may intervene in the arbitral proceedings is limited to the express provisions in the International Arbitration Act 1974 (Cth) and the UNCITRAL Model Law (Article 5 of the UNCITRAL Model Law). The local courts may support and supervise arbitral proceedings by, for example:

  • ordering a stay of court proceedings and referring the parties to arbitration (Section 7 of the International Arbitration Act);
  • ruling on the arbitral tribunal’s jurisdiction after the tribunal has issued its decision on jurisdiction (Article 16 of the UNCITRAL Model Law);
  • ordering interim measures in certain circumstances (Article 9 and 17J of the UNCITRAL Model Law); and
  • hearing a challenge to an arbitrator (Article 13 of the UNCITRAL Model Law).

Can the local courts assist in choosing arbitrators?

The local courts cannot assist in choosing arbitrators. The appointing authority is the Australian Centre for International Commercial Arbitration, pursuant to the International Arbitration Regulations 2011 (Cth).  

What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration? Can the courts compel parties to arbitrate? Can they issue subpoenas to third parties?

Arbitral tribunals have the power to continue with arbitration if the respondent fails to participate in the proceedings. Specifically, the tribunal may continue if the respondent fails to communicate its statement of defence (Article 25(b) of the UNCITRAL Model Law). The tribunal may also continue if either party fails to appear at a hearing or produce documentary evidence (Article 25(c) of the UNCITRAL Model Law). 

Tribunals cannot compel the parties to arbitrate or issue subpoenas. If a party does not comply with a tribunal order, the tribunal cannot enforce the order, but may draw adverse inferences from that party's conduct. A party may apply to the Australian courts, with the permission or approval of the tribunal (if the arbitration is seated in Australia and the relevant witness or documents are based in Australia) for a subpoena to compel the witness to give evidence or compel the production of documents before the tribunal in certain circumstances (Section 23 of the International Arbitration Act 1974 (Cth) and Article 27 of the UNCITRAL Model Law).

Third parties
In what instances can third parties be bound by an arbitration agreement or award?

Third parties are not usually bound by arbitration agreements, unless they are party to the agreement or have otherwise consented to arbitration. There are circumstances in which a court may stay court proceedings pending arbitration where the proceedings have been brought by a person or company claiming "through or under a party".

Third parties are not usually bound by arbitral awards. However, awards may have an effect on third parties where, for example, the third party owed money to the award debtor which may be paid to the award creditor on the order of the court (garnishee orders or third-party orders). 

Default language and seat
Unless agreed by the parties, what is the default language and location for arbitrations?

There is no default language or seat of arbitration under the International Arbitration Act. However, the applicable arbitral rules may provide for the default language or seat of the arbitration. For example, the new Australian Centre for International Commercial Arbitration Rules provide that the default seat is Sydney (Article 23.1).

The arbitral tribunal has the power to determine the language of the arbitration (Article 22 of the UNCITRAL Model Law) and the seat of the arbitration (Article 20 of the UNCITRAL Model Law) if this has not been agreed by the parties.

Gathering evidence
How is evidence obtained by the tribunal?

The arbitral tribunal has discretion to determine the rules of procedure for the arbitration (subject to the arbitral rules agreed by the parties and the principle of equal treatment of the parties). The tribunal and the parties may agree to apply the International Bar Association Rules of Evidence.

Usually, the parties and tribunal will agree to the procedural timetable for the proceedings, which set outs the submissions and evidence to be provided by the parties. This process includes:

  • documentary evidence relied on by each party;
  • witness evidence; and
  • expert evidence (if any) that is provided in writing.

Oral evidence is then provided during the hearing, including the cross-examination and re-examination of witnesses and experts. 

What kinds of evidence are acceptable?

Arbitral tribunals have broad discretion to determine the admissibility, relevance, materiality and weight of any evidence (Article 19 of the UNCITRAL Model Law). Usually, the tribunal will consider and accept documentary evidence, witness evidence and expert evidence. The parties do not usually object to the admissibility and relevance of evidence, although some specific points may be raised if they are particularly significant. Rather, the tribunal will consider and determine the evidence that is relevant and material to the outcome of the dispute.

Evidence that may be excluded includes evidence where legal professional privilege is claimed or where the documents are commercially confidential. 

Confidentiality
Is confidentiality ensured?

One of the amendments made to the International Arbitration Act 1974 (Cth) in October 2015 changed the provisions on confidentiality from opt-in to opt-out (Sections 23C, 23D, 23E, 23F and 23G). This means that the legislation now provides that arbitral proceedings are confidential unless the parties have agreed otherwise. The new Australian Centre for International Commercial Arbitration Rules also state that all arbitrations are confidential unless the parties have agreed otherwise (Article 22). 

Can information in arbitral proceedings be disclosed in subsequent proceedings?

As all information provided to or produced during the arbitral proceedings is confidential, this information cannot be disclosed in subsequent proceedings, except in certain circumstances. Section 23D sets out circumstances in which confidential information may be disclosed. For example, information may be disclosed where it is required by a court order, law or a regulatory body. Confidential information may be disclosed in subsequent arbitral proceedings where it is necessary to:

  • ensure that a party has a full opportunity to present its case;
  • protect legal rights in relation to a third party and the disclosure is no more than reasonable for that purpose; or
  • enforce an arbitral award. 

Ethical codes
What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

Solicitors admitted in Australia and registered foreign lawyers are bound by the rules that apply to the state in which they are admitted. There is now a Legal Profession Uniform Application Act in New South Wales and Victoria with uniform rules. The other states have not yet adopted the Uniform Law or rules.

Barristers in Australia are subject to the relevant rules and codes for the state in which they practice. For example, in New South Wales barristers are subject to the rules and guidelines of the New South Wales Bar Association.

These rules and guidelines do not apply to foreign lawyers who are not registered as such in Australia.