The Commercial Arbitration Act 2013 (Qld) (the Act) was assented to on 14 March 2013. The Act is significantly different to the statute it is replacing, with those changes designed both to improve the conduct of commercial arbitrations in Queensland, and to align Queensland with the other Australian jurisdictions that have already introduced legislation in an effort to overhaul the arbitration regime in Australia.
We discuss a number of the key measures below.
The Act replaces the Commercial Arbitration Act 1990 (Qld) (1990 Act), although its commencement date remains to be fixed by proclamation. Transitional provisions ensure the 1990 Act applies to those arbitrations where the arbitral tribunal has been properly constituted prior to the commencement of the Act.
The Act substantially adopts the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration (Model Law) for domestic commercial arbitrations. The Act also reflects the drafting of the Standing Council of Attorneys General of a Model Commercial Arbitration Bill, which was adopted as part of a push for uniform commercial arbitration laws across Australia.
By implementing the Act, which is substantively similar to the Model Commercial Arbitration Bill, Queensland has brought its arbitration legislation into line with most other Australian jurisdictions.1 This represents a step towards uniformity in Australian commercial arbitration law.
Key developments and changes
Some of the key changes contained in the Act relate to:
- judicial oversight of arbitrations;
- improved procedure;
- increased powers of arbitral tribunals; and
- Judicial oversight and review
Litigation in breach of an arbitration agreement
The Act gives primacy to the arbitral process by limiting the opportunity for judicial interference. Section 8 of the Act requires the Supreme Court, upon the request of a party, to stay a matter involving a valid arbitration agreement. This provision also provides that an arbitration process may be commenced or continued (including the making of a final award) while a stay application is before the Court (s 8(2)).
Review of awards by the Court
In quite a substantial change from the 1990 Act, both the leave of the Court and agreement between the parties is now required for an appeal of the award (ss 34, 34A). The parties may agree to an appeal before the arbitration (for example, in the arbitration agreement itself) or otherwise within three months of receipt of the arbitral award.
Even where the parties agree, the Court will only be able to grant leave in extremely limited circumstances where, among other things, it is satisfied on the basis of the findings of fact in the award that:
- the decision of the arbitral tribunal on the question is obviously wrong; or
- the question is one of general public importance and the decision of the arbitral tribunal is at least open to serious doubt.
It is worth noting that in circumstances where the parties have not agreed to an appeal before the arbitration commences, it is doubtful that a party who has been successful at arbitration would agree to a review of that award by the Court. Therefore, it may be prudent for the parties to consider this issue when drafting the original arbitration agreement.
- Improved procedure
Section 19 of the Act provides new mechanisms which enable the parties to agree on the procedure to be followed by an arbitral tribunal. Only in the absence of such agreement is the arbitral tribunal then permitted, subject to the other provisions of the Act, to conduct the arbitration in such manner as it considers appropriate.
In the absence of such an agreement between the parties, the Act provides specific default requirements concerning the procedure to be followed by the arbitral tribunal. These procedures include:
- the use of both a statement of claim and defence (s 23); and
- the use of oral hearings for the presentation of evidence and oral argument (s 24).
The Act otherwise retains the power for an arbitrator to act as a mediator, conciliator or other non-arbitral intermediary, if the parties consent (s 27D). This uniquely practical provision is not found in the Model Law.
Whatever the benefits of the same person assuming different roles in relation to a dispute, the Act introduces an important safeguard beyond that in the 1990 Act. The Act provides that an arbitrator who has acted as a mediator in an unsuccessful mediation may not conduct subsequent arbitration proceedings in relation to the dispute without the written consent of all the parties to the arbitration. The consent must be given on or after the termination of the mediation.
In contrast, under the 1990 Act, the consent of the parties was not required and parties were expressly prohibited from objecting to the arbitrator conducting the subsequent arbitration proceedings solely on the ground that the arbitrator had previously taken action in relation to the dispute.
- Increased powers of the arbitral tribunal for the effective conduct of arbitrations
Section 17 of the Act provides arbitral tribunals with the power to grant a wide range of interim measures to promote the effectiveness of the arbitration.
Interim measures include those necessary to:
- maintain the status quo;
- prevent prejudice to the arbitral process; preserve assets from which a final award may be satisfied; or
- preserve evidence potentially relevant to the dispute.
While the arbitral tribunal and the Court can issue interim measures, any interim measures granted by an arbitral tribunal cannot easily be challenged before the Court.
The Act separately empowers an arbitral tribunal to appoint one or more experts to report to it on any specific issue (s 26(1)). Any expert appointed may then be required to participate in a hearing of the arbitral tribunal (s 26(2)).
In a break from the common law position established by the High Court in Esso Australia Resources Ltd v Plowman,2 the Act provides new automatic restrictions on the use and disclosure of information relating to arbitral proceedings, unless otherwise agreed by the parties (ss 2, 27E-27I).
Confidential Information is defined broadly and includes pleadings and submissions, along with the evidence, transcript, rulings and award of the arbitral tribunal (s 2). In the first instance Confidential Information may only be disclosed in the circumstances listed in sections 27E and 27F (including where it is necessary for the purpose of enforcing an arbitral award).
Confidential Information sought to be disclosed outside of the above scope may only be disclosed at the request of one of the parties and after giving each of the parties the opportunity to be heard by the arbitral tribunal (s 27G).
The Act provides a right of appeal to the Court on any determination regarding confidentiality by an arbitral tribunal (ss 27H(3), 27I(3)).
What these changes mean for you
The Act represents a comprehensive overhaul of the regime governing commercial arbitrations in Queensland. It is important for parties to recognise that the Act contains default requirements, which will come into operation unless otherwise agreed between the parties (such as through an arbitration agreement). The parties have some ability to choose their own arbitral adventure and should accordingly consider any unique procedures or requirements they would like to include (to the extent they are permitted by the Act) at the time of drafting any arbitration clause or agreement.
With the Model Law at the new Act’s core, the Act promotes consistency at a national level by aligning Queensland with other Australian jurisdictions. Similarly, with the Model Law having been adopted in over 60 countries, including the regional arbitration centres of Singapore and Hong Kong, the Act contributes to a growing global standard for the conduct of arbitration.3