The Reform of Commercial Arbitration in Australia: Recent and Prospective Developments

Abstract

International commercial arbitration (ICA) in Australia is growing, albeit not geometrically. These developments are attributable in part to new legislation adapted by the federal, state and territory governments that make arbitration in Australia more attractive to domestic and foreign parties. These include the preservation of the autonomy of the parties to choose their preferred form of arbitration, whether institutional or not, the fact that Australian courts are firmly committed to the principles of the rule of law, and that ICA awards are enforced consistent with international standards and laws that are incorporated into Australian federal, state and territorial law. Australia has ratified both the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitration Awards and the ICSID Convention in its domestic law. Both are included in section 40 of the International Arbitration Act 1974 (Cth) (IAA). Australia’s accession to the New York Convention is without reservation and extends to all States and Territories within the country. Australia has an established record of recognizing international commercial arbitration. It was one of the first to adopt the 2006 amendments to the 1985 United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration (the Model Law). It has long endorsed the principles embodied in that Model Law, including protection of the autonomy of parties to arbitration, flexibility in the conduct of arbitration and greater uniformity in arbitration across national jurisdictions. These tenets of arbitration were incorporated into the IAA by the 2010 amendment, as a reflection of international best practice. In accordance with the 2010 amendments to the IAA, disputing parties can no longer choose to exclude the application of the Model Law insofar as it is incorporated into the IAA. The IAA affirms the finality of arbitration awards and limits the grounds for judicial review. It also builds on the authority of arbitrators to grant interim awards and creates a regime to ensure confidentiality. The core principles regarding commercial arbitration embodied in the 2010 amendment are also reflected in uniform legislation across all Australian jurisdictions. They affirm the legitimacy of arbitration as a mechanism for dispute resolution and the significance of Australia as a center for the resolution of disputes. However, ICA in Australia continues to face concern over what are sometimes perceived to be protracted arbitral proceedings that are both dilatory and costly. The author has responded to these criticisms in a co-authored article which argues that comprehensive proceedings are often necessary in deciding complex arbitrations and the allegedly ‘judicialisation’ of the arbitral process is often misconceived and over-stated. In addition, there has been a signifi cant increase in resort to institutional arbitration in ICA proceedings, notably with the adoption of new Arbitration Rules by the Australian Centre for International Commercial Arbitration (ACICA) and the establishment of the Australian International Dispute Centre (AIDC). There have also been increases in arbitrations since the revision of the IAA in June 2010 and recent amendments to domestic Commercial Arbitration Acts (CAAs). While Article 1(3) of the UNCITRAL Model Law stipulates that it only applies to international commercial arbitration, and not to domestic arbitration, the recently revised CAAs of states across Australia now replicate the Model Law with some variations. This chapter will focus on the Australian legal system and its role in arbitration. It will examine the development of ICA in Australia and the 2010 amendment to the IAA. It will consider the role of the Australian Centre of International Commercial Arbitration (ACICA) as an exemplary centre governing commercial arbitration. It will focus on Australia’s role in promoting arbitration within the Asia Pacific region, of which it is an integral part. It will explore Australia’s whole-hearted embrace of international arbitration as a viable alternative to court proceedings. Finally, it will support the conservative and formalist underpinnings of current arbitration reforms, including the need to elaborate on them, and render them more dynamic in operation.