By introducing the new Commercial Arbitration Act 2017 (ACT), the Australian Capital Territory is the last Australian State to adopt the United Nations Commission on International Trade Law Model Law on International Commercial Arbitration (the Model Law). At the Federal and State level, the Model Law now applies to both international and domestic arbitrations seated in Australia.

The new Act

On 21 March 2017, the Legislative Assembly for the Australian Capital Territory (ACT) passed the Commercial Arbitration Act 2017 (ACT) (the Act). The Act was notified and came into effect on 4 April 2017. This Act repeals the previous Commercial Arbitration Act 1986 (ACT).

ACT was the last of the Australian States and Territories which had not adopted the Model Law. The Model Law has been a very successful instrument in harmonising arbitration laws across the globe, having been adopted by 74 countries (covering a total of 104 jurisdictions), including all major arbitration centres (Hong Kong, Singapore, USA (California, Connecticut, Florida, Georgia, Illinois, Louisiana, Oregon and Texas), Austria and Germany (notably not in England & Wales).

The Federal government of Australia had adopted the Model Law in 1974 governing international arbitrations. The various Australian States and the Northern Territory followed suit and adopted the Model Law to apply to domestic arbitrations (NSW in 2010, NT, SA, TAS and VIC in 2011, WA in 2012 and QLD in 2013). However, ACT was notably absent from those adopting the internationally recognised standard.

The Act which has now come into effect rectifies this issue. The object of the Act is specifically stated “to facilitate the fair and final resolution of commercial disputes by impartial arbitral tribunals without unnecessary delay or expense”. The Act expressly identifies the international origin of the Model Law and seeks to promote uniformity between the application of this Act and domestic arbitrations, and the provisions of the Model Law in international commercial arbitrations.

In addition, the Act adds to the Model Law in some respects to improve the regime applicable to arbitrations even further. For example, parties may seek assistance from the Supreme Court on issues such as deciding preliminary points of law, and obtaining subpoenas requiring persons to attend before the arbitral tribunal for examination, or to produce specified documents. A party can also apply to the arbitral tribunal to consolidate arbitral proceedings where common questions of law or fact arise, or where the relief sought is in respect of the same transaction(s). The Act still allows an appeal of an arbitral award on a point of law, but only if the parties agree before the appeal period and with leave of the court.

Comment

It is a welcome development that at both Federal and State level, arbitrations seated in Australia will be governed by the internationally recognised principles of the Model Law. Practically, where one might have shied away from nominating Canberra as the seat of a domestic arbitration, the new Act dispels any such concerns.