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Arbitration agreements

Validity What are the validity requirements for an arbitration agreement? Australia has adopted Option 1 of Article 7 of the UNCITRAL Model Law for the definition and form of arbitration agreements. Option 1 requires arbitration agreements to be in writing (Article 7(2)). This requirement is broadly defined to include electronic communications (Article 7(4)) and any record in any form, whether the agreement has been concluded verbally, by conduct or by other means (Article 7(3)). 

Enforcement of agreements How are arbitration agreements enforced in your jurisdiction? What is the attitude of the national courts towards arbitration agreements? Australian courts are arbitration friendly and will enforce arbitration agreements. The courts must stay court proceedings if the parties have agreed to an arbitration agreement and the matter is capable of settlement by arbitration, unless the agreement is null and void, inoperative or incapable of being performed (Section 7 of the International Arbitration Act 1974 (Cth)). 

Consolidation Can an arbitral tribunal with its seat in your jurisdiction consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances? An arbitral tribunal may consolidate separate arbitral proceedings, provided that it has been given the power to do so in the arbitration agreement or arbitral rules. The new Australian Centre for International Commercial Arbitration Rules (which apply as of January 1 2016) include consolidation provisions that may apply in certain circumstances.

If there is no agreement to consolidate in the arbitration agreement and the arbitral rules do not include consolidation, there may be consolidation under Section 24 of the International Arbitration Act, provided that the parties have agreed to apply this provision (ie, it is an opt-in provision) and:

  • a common question of law or fact arises in the proceedings;
  • the rights to relief claimed in the proceedings are in respect of, or arise out of, the same transaction or series of transactions; or
  • for some other reason specified in the application, it is desirable that an order be made.  

Choice of law How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be? The substantive law of the dispute is usually chosen by the parties in the underlying contract. If the parties have not chosen the substantive law, Article 28 of the UNCITRAL Model Law (Schedule 2 of the International Arbitration Act 1974 (Cth)) provides that the arbitral tribunal will apply the law which it considers appropriate.

Separability Are there any provisions on the separability of arbitration agreements? The principle of separability is provided for in Article 16 of the UNCITRAL Model Law (Schedule 2 of the International Arbitration Act 1974 (Cth)). 

Multiparty agreements Are multiparty agreements recognised? Multiparty agreements are recognised in Australia as long as all of the parties to the arbitration have consented to arbitration pursuant to the relevant arbitration agreement. 

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