International Commercial Arbitration - Australia in the Asian Century?

16 November 2012

Professor Luke Nottage says Australia's reputation as a plausible seat for international arbitration may be in jeopardy.

Chinese manufacturing company, TCL Air Conditioner claims in a case before the High Court that the Federal Court's power to enforce an arbitral award against it was a breach of constitutional separation of powers.

According to a report in the Australian Financial Review on 16 November, in the context of the annual Clayton Utz / University of Sydney international arbitration lecture (presented this year by David Rivkin from New York), whether the Court upholds the validity of arbitration legislation or not, some say the damage to Australia's reputation as a stable seat for arbitration has been done.

Professor Luke Nottage says Australia's government has been too slow to embrace arbitration in its state and federal laws, and as a consequence had given up valuable ground to other regional hubs such as Singapore and Hong Kong.
"The amendments made to the International Arbitration Act in 2010 were too little, too late.
"It hadn't been amended for 20 years and in the meantime Singapore in particular has shot ahead."

He believes the High Court challengeis a "disaster" and if TCL's view of the arbitration legislation is correct, it would put Australian law at odds with every other major legal system around the world.

"It's one of those cases where even if the High Court says 'no, this is nonsensical', which is the word around town, the damage has been done."

Professor Nottage also argues that Australia already needs another round of arbitration law reforms, not just because of further legislative activity recently in Singapore and Hong Kong.

His analysis of Australian judgments applying the International Arbitration Act since 2010 reveals quite a mixed bag.

Most disturbingly, there is a "legislative black hole" created by the 2010 amendments, which needs to be addressed anyway, as re-emphasised in Professor Nottage's co-authored article just published in 35(3) UNSWLJ.

Specifically, he and Professor Richard Garnett identify a lacuna for (a) international arbitration agreements, (b) concluded before 6 July 2010, (c) where parties have explicitly or implicitly opted out of the UNCITRAL Model Law regime in the International Arbitration Act, and (d) the seat of the arbitration is an Australian Territory or State (like NSW) that has repealed its old Commercial Arbitration Act - substituting a new Act, but which only applies to domestic arbitrations.

Contact: Greg Sherington

Phone: +61 2 9351 0202

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