The Australian Federal Government is looking to promote Australia as a regional seat for international arbitration. To support this the Government is committed to ensuring Australia’s arbitral law meets the needs of users. Dispute Resolution Partner, Andrew Robertson, explains.

The Australian Federal Government, and especially the Australian Federal Attorney-General, has indicated that modernisation of Australia’s international commercial arbitration law is a priority for the Government with an ultimate goal of attracting more international arbitration to Australia.

Australia has been a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) since 1975. Indeed Australia has gone so far as incorporating the text of the New York Convention into Australian law as a schedule to the International Arbitration Act 1974 (Cth) (International Arbitration Act). The New York Convention is a significant international treaty enabling international arbitral awards to be recognised and enforced easier than some international judicial decisions. It is the cornerstone for modern international commercial arbitration law.

Australia has also already adopted the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration (Model Law), the 1985 text, as part of Australia’s arbitral law, albeit presently with an ability to opt out and select another law to apply to the arbitration.

In November 2008 the Attorney-General announced a major review of Australia’s International Arbitration Act as part of a commitment to developing Australia as a regional hub for international commercial dispute resolution.

That review has found support for Australia’s arbitral law but has also identified improvements that could be made.

As a result on 25 November 2009 the Attorney-General introduced into Federal Parliament a Bill to update the International Arbitration Act to further develop Australia’s arbitral law. As the Attorney-General said in his second reading speech, “This Bill will not only assist Australian businesses in resolving their disputes but will ensure Australia is an attractive venue for parties from around the world to resolve their disputes.”

Significant developments in the Bill are:

  • the UNCITRAL Model Law will remain the back-bone of Australia’s legislation. However Australia will by and large now adopt the 2006 text of the UNCITRAL Model Law in lieu of the 1985 text
  •  the ability to choose a law other than the UNCITRAL Model Law will be removed
  • the Bill clarifies the bases upon which recognition and enforcement can be refused, and what is the nature of public policy
  • the operation of domestic arbitration legislation on international arbitrations is excluded
  • a statement of objects including that the purpose of the amendments is to facilitate trade and commerce by encouraging the use of arbitration as a method of resolving disputes. These objects are to be taken into account in performing operations pursuant to the International Arbitration Act. The Bill goes further to provide that in interpreting the legislation regard is to be had to the fact that arbitration is an efficient, impartial, enforceable and timely method by which to resolve commercial disputes; and that awards are intended to provide certainty and finality
  • confirmation for the “avoidance of doubt” that an agreement in writing includes:
    • agreements recorded in any form even if concluded orally
    • electronic records
    • an exchange of statements of claim and defence
    • incorporation by reference
  • provisions that arbitral process and documents in it are confidential. Australian common (case) law had determined that the arbitral process was not impliedly confidential but if passed the Bill will reverse this position.

These amendments reflect a willingness by the Government to take the legislative measures necessary to ensure that Australia’s arbitral jurisprudence meets the needs of the international commercial arbitration community.

These amendments to Australia’s international arbitral law are being matched in developments in Australia’s domestic arbitral law. The Australian States propose to amend domestic arbitration legislation, which presently had been quite distinct in form, to also largely adopt the UNCITRAL Model Law (with some amendments reflecting the domestic nature of the arbitrations). This would by and large create a consistent jurisprudence for domestic and international arbitration in Australia.

Piper Alderman has partners qualified in both domestic and international arbitration who can assist with queries in relation to the drafting of effective arbitration agreements and the conduct of arbitral proceedings.