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Australia – Changes To Commercial Arbitration Law And Procedures In Queensland.

14 April, 2013

 

Commercial Arbitration Act 2012 (Qld)

 

WHAT YOU NEED TO KNOW

 

The last few years have seen a wave of reforms in domestic arbitration legislation across Australia. Australia's States and Territories have been introducing domestic arbitration legislation in order to modernise the domestic arbitration regime that applies across Australia and to bring it in line with Australia's international arbitration regime. Queensland is the latest State to have implemented legislation to this effect: the Commercial Arbitration Act 2012 (QLD) was given Royal Assent on 14 March 2013. The Act will commence on a date to be fixed by proclamation. The key changes under the Commercial Arbitration Act 2012 will include:

 

  • procedural changes to the process for domestic arbitrations;
  • new provisions governing confidentiality of information in domestic arbitral proceedings; and
  • restrictions on the role of the courts, and judicial intervention, in domestic arbitration.

 

HOW DOES THIS AFFECT YOU?

 

The new Queensland Commercial Arbitration Act will:

 

  • strengthen Queensland's domestic arbitration law and align it with international conventions by limiting the grounds on which parties may appeal an arbitral award and the grounds on which an award may be set aside or corrected by the court; and
  • provide parties greater flexibility and clarity with respect to the procedures and processes for resolving disputes by arbitration.

 

Background

 

The last few years have seen a continuation of the wave of reforms in domestic arbitration legislation across Australia. In May 2010, the Standing Committee of Attorneys-General agreed to implement a Model Commercial Arbitration Bill ("Model Bill").

 

The purpose of the Model Bill is to modernise the domestic arbitration regime applicable across Australia and to have it work in a consistent manner with Australia's international arbitration regime by adopting the provisions of the UNCITRAL Model Law on International Commercial Arbitration.

 

The Model Bill provides businesses involved in international trade with the certainty that they can enforce arbitration awards in Australia. It will also promote Australia as a venue for international arbitrations and for export related legal services – confirmed recently in the High Court case TCL Air Conditioner (Zhongshan) Co Ltd v The Judges of the Federal Court of Australia [2013] HCA 5, covered in a previous article (click here).

 

Under the reforms to arbitration legislation in Australia, and in order to unify the domestic and international arbitration regimes within Australia, the States and Territories are responsible for passing legislation to regulate domestic arbitrations. This legislation will align with the Commonwealth's International Arbitration Act 1974 (the "International Arbitration Act"), which will continue to regulate international arbitrations.

 

Queensland is the latest State to have passed legislation to this effect. All of the other States and the Northern Territory have enacted equivalent legislation. Only the ACT has not produced any proposed legislation on the Model Bill at this stage.

 

Commercial Arbitration Act 2012 (Qld)

 

On 14 March 2013 the Commercial Arbitration Act 2012 (Qld) (the "Act") received Royal Assent. The Act repeals and replaces the Commercial Arbitration Act 1990 (Qld) (the "1990 Act") and will commence on a date to be fixed by proclamation.

 

The key objectives of the Act are to facilitate the fair and final resolution of commercial disputes in Queensland by impartial arbitral tribunals without unnecessary delay or expense.

 

The Act will ensure that domestic arbitrations in Queensland are governed in a manner consistent with the Model Bill and the International Arbitration Act.

 

Key changes

 

The key changes under the Act largely reflect the changes contained in the Model Bill. Specifically, these changes include:

 

  • (a) Mandatory stay of proceedings: The Act requires that the courts must refer parties to arbitration, if either party requests the matter be resolved by arbitration, and a valid arbitration agreement exits between the parties.
  • (b) Limited appeal rights: The Act provides that an optional appeals mechanism, on questions of law, will not operate without both parties consent and the court's leave. Further, any application to set aside an award may only be made on specific grounds, including:

     

     

    • (i) incapacity,
    • (ii) invalidity,
    • (iii) breaches of natural justice,
    • (iv) public policy; and
    • (v) the legality of arbitrating certain subject matter.
  • (c) Greater clarity: The Act makes it clear that it only applies to domestic arbitrations. An arbitration is domestic if:

     

     

    • (i) the parties have their places of business in Australia;
    • (ii) the parties agree that the dispute is to be settled by arbitration; and
    • (iii) it is not an arbitration to which the International Arbitration Act applies. The International Arbitration Act only applies to international commercial arbitration, subject to any agreement otherwise between Australia and any other country.

 

An arbitration is international if:

 

  • (A) the parties to an arbitration agreement have their places of business in different countries;
  • (B) the place of arbitration, or place where a substantial part of the commercial relationship is to be performed, is situated outside the country where the parties have their place of business; or
  • (C) the parties agree that the subject matter of the arbitration agreement relates to more than one country.‚Äč
  • (d) Interim measures: The Act allows parties to seek interim measures from the arbitral tribunal, as well as the court, in relation to arbitration proceedings. Where a party has successfully sought an order from an arbitral tribunal granting an interim measure, the party can now seek recognition and enforcement of the interim measure in court.
  • (e) Evidence: The court continues to have the power to issue subpoenas to require a person to attend for examination before the arbitrator, or to produce documents to the arbitrator.

  • (f) Confidentiality: The Act introduces new provisions which prohibit the disclosure of confidential information disclosed in, or concerning arbitral proceedings, except in limited circumstances.

  • (g) Limited judicial intervention: The Act makes it clear there is no scope for the court to intervene in domestic arbitration, except in limited circumstances.

  • (h) Procedural changes: The Act introduces new procedural provisions which assist in the conduct of arbitral proceedings. For example, parties are required to provide statements of claim and defence in commencing proceedings, and new powers are provided to arbitrators, including to appoint experts and to make an award on settlement.

 

 

For further information, please contact:

 

Jeremy Chenoweth, Partner, Ashurst

jeremy.chenoweth@ashurst.com

 

Shane Bosma, Ashurst

shane.bosma@ashurst.com

 

Julia Moon Ashurst

julia.moon@ashurst.com

 

Ashurst Dispute Resolution Practice Profile in Australia

 

Homegrown Dispute Resolution Law Firms in Australia

 

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