Legal News & Analysis – Asia Pacific – Australia – Dispute Resolution

Western Australia's new Commercial Arbitration Act 2012 (CAA) came into full force by proclamation on 7 August 2013. The CAA applies retrospectively to any domestic arbitration agreement made before or after the commencement of the CAA where the seat of the arbitration is Western Australia. Furthermore, any reference in an arbitration agreement to the former Commercial Arbitration Act 1985 (WA) (Act) shall be taken to be a reference to the CAA. The CAA does not apply to any arbitration under the former Act if the arbitration itself has already commenced.

Following the significant changes to the International Arbitration Act 1974 (Cth) (IAA), State governments considered an overhaul of existing State arbitration legislation and proceeded to draft uniform commercial arbitration legislation to incorporate changes made at the international level. The objective of those changes was to align both Australia's State and Federal arbitration laws with the international standard under the Model Law. Western Australia responded by introducing theCommercial Arbitration Bill (WA) 2011 into parliament in June 2011.

The CAA also applies to domestic arbitration agreements where the seat is outside Western Australia in relation to various interim measures such as staying proceedings, and seeking freezing orders and other interlocutory injunctions. 

International or domestic arbitration?

International arbitration in Australia generally occurs where one party to a dispute under a valid arbitration agreement is located outside of Australia. International arbitration in Australia is governed by the IAA.

Domestic arbitration in Australia occurs under the CAA where:

1. the parties to an arbitration agreement have their places of business in Australia;
2. the parties have agreed (whether in the arbitration agreement or in any other document in writing) that any dispute that has arisen or may arise between them is to be settled by arbitration; and
3. it is not an arbitration to which the IAA applies.

Features of the CAA

The CAA is more comprehensive, logically structured, and easier to understand than its predecessor instrument. The adoption of the Model Law affects a number of positive changes to arbitration in Western Australia by providing more comprehensive and sophisticated rules of procedure with the objective of enhancing the speed and cost-efficiency for those involved in the arbitral process. Some of the significant changes are summarised below:

• The arbitration agreement is paramount – Under the CAA, the court must refer a matter to arbitration where there is a valid arbitration agreement. Advice should be sought when drafting an arbitration agreement to ensure its validity and avoid ambiguity.
• Limited court intervention – The CAA provides limited circumstances when a court may intervene in the arbitral process (for example, the recognition and enforcement of awards, recognising the validity of an arbitration agreement, granting interim measures, and challenging the jurisdiction of arbitrators).
• Greater recognition of valid arbitration agreements – The CAA allows an arbitration agreement to be incorporated into a particular contract by its reference in another contract, in circumstances where the reference is such as to make that clause part of the contract.
• Limited right to appeal an arbitral award – The CAA only allows appeals on points of law if the parties agree that an appeal may be made, that appeal is brought within 3 months of the award, and that the decision of the arbitrator was 'obviously wrong' or there is a question of general public importance.
• Arbitration in WA will be confidential – Confidentiality is a cornerstone of arbitration, but it was not expressly provided for in the former Act. The CAA provides that parties to arbitral proceedings in Western Australia must not disclose confidential information in relation to those proceedings except in very limited circumstances.
• Party autonomy – The CAA provides greater autonomy for participating parties, for example, parties may agree that an arbitrator act as a 'non-arbitral intermediary', such as a mediator or conciliator, and parties may elect a non-legal representative to represent them in arbitration.