Commercial Arbitration Act 2013 (Qld) and International Arbitration Act 1974 (Cth)

For some, just hearing the word ‘arbitration’ gets them excited because it can mean an equally balanced dispute with a decision maker who wants to hear the case. For others, the word can make them nervous because it sounds so much scarier than it is.

Never fear, this ‘101 guide’ will help take away some of the mystery and at least help you sound like a pro.

Key Elements of an Arbitration

Source: negativespace.co

Arbitrations emulate a court process in that the arbitrator(s) make a determination, like that of a judge. However, the parties have greater control over the procedure and, most importantly, the choice of the arbitrator. For example, in a maritime, pricing or infrastructure dispute, the parties might choose an arbitrator with experience in the relevant area.

Often times, the process for the arbitration is set out in the primary contract between the parties. Arbitrations are a creature of contract, and as such, are a private process.

Parties generally appoint lawyers, and usually barristers, to represent them in the arbitration process.

What you need to know

1. Parties can agree on the procedure to be followed in their arbitration – s 19 Commercial Arbitration Act 2013 (Qld) (CAA)

2. Alternatively, directions can be made by the arbitrator as to how the arbitration will be conducted – s 19 CAA; art 19(2) International Arbitration Act 1974 (Cth)

3. The directions made by the arbitrator can be enforced by a Court if not complied with – s 27B CAA

4. Parties may seek leave of the Court to issue subpoenas to any relevant third parties – s 27AA

5. The payment of costs can be agreed by the parties, or determined by the arbitrator(s) – s 33B CAA

6. The award made by the arbitrator(s) can be enforced in the same way as a court judgment if not complied with – ss 35 & 36 CAA

Key Differences between Domestic and International Arbitration

Since 2010, each State and Territory (except ACT) has adopted the standardised Model Commercial Arbitration Bill. This uniform legislation change has allowed for consistency between each jurisdiction, which aids cross-border disputes. The International Arbitration Act 1974 (Cth) (International Act), on the other hand, is based closely on international instruments.

The key difference between the CAA (and its jurisdictional counterparts) (Domestic Acts) and the International Act is the matters in which each Act is relevant. Any international arbitration agreements entered into on or after 6 July 2010 are now exclusively to be dealt with by the International Act. As such, the Domestic Acts now only apply for domestic arbitration agreements. The Domestic Acts also apply retrospectively, so they capture any domestic arbitration agreements entered prior to the legislations’ introduction.

Confidentiality is also dealt with differently in the International Act and the Domestic Acts. In the Domestic Acts, as raised above, confidentiality is imposed as an obligation on the parties unless there are exceptional circumstances, such as where all the parties agree otherwise.[1] However, in the International Act, the right to confidentiality only exists in an international arbitration held in Australia where the parties expressly profit for it in their agreement. Ultimately, while the starting point may be different in the legislative instruments, as the International Act allows for parties to contract in confidentiality, the same end result can be achieved.

Appointing an Arbitrator

The parties have discretion to agree to the number of arbitrators to be appointed, and how they are to be appointed. Failing an agreement, the CAA provides that there will be one arbitrator, [2] and the International Act provides that there will be three.[3]

A deadlock process is contained within the legislation if the parties cannot agree whom to appoint.[4]

If an even number of arbitrators are appointed to the arbitral panel, a deadlock process for when the arbitrators do not agree will need to be determined. Some options include the appointment of a chair, or an umpire mechanism. The umpire mechanism can be particularly useful if the parties do not want to pay for three arbitrators to watch the entire arbitration.

Commercial considerations

Arbitrations are not in the open court, and are not publicly filed. With the recent move to upload all court documents to the Supreme Court Library, the discretion that comes with arbitration can be desirable.

However, it is important to realise that by undergoing a private process the services provided by the courts will have to be paid for by the parties. This includes room hire and the ‘judge’ of the matter, which can add up if it is a particularly lengthy arbitration.

If there are contested matters of fact or credit, it’s a good time to pause to consider whether arbitration is appropriate or whether a more formal court process is necessary.

Usual process and directions

Unless the process is already set out in the primary contract, the parties need to agree on the procedure to be followed in their arbitration. The process usually mirrors that of cases on the commercial list, e.g directions for exchange of points of claim and points of defence, exchange of evidence, dates for hearing and whether oral evidence will be adduced and/or cross-examination will occur. There may also be agreement as to timing for exchange of submissions.

The process can be adopted to meet the requirements of the relevant dispute. For example, in a valuation case, there will be directions about expert reports and possibly for conferences between experts.

Now you’re a pro!

Now that you have the basics, stay tuned for more posts about the arbitration process, including recent cases delving in to key issues.

Of course, feel free to contact my chambers if you have any questions or to enquire as to my availability to advise upon and appear at your next arbitration.

To access the Queensland statute, follow this link – https://www.legislation.qld.gov.au/LEGISLTN/ACTS/2013/13AC008.pdf

To access the Commonwealth statute, follow this link – https://www.legislation.gov.au/Details/C2011C00342

 

Legislation and catchwords

  • Arbitration
  • Commercial viability
  • Appointment
  • Arbitrator
  • Key differences
  • Confidentiality
  • Jurisdiction
  • Commercial Arbitration Act 2013 (Qld)
  • International Arbitration Act 1974 (Cth)
[1] Commercial Arbitration Act 2013 (Qld) ss 27E, 27F.
[2] Commercial Arbitration Act 2013 (Qld) s 10.
[3] International Arbitration Act 1974 (Cth) art 10(2).
[4] Commercial Arbtiration Act 2013 (Qld) s 11(3); International Arbitration Act 1974 (Cth) art 11(3).