Review of the International Arbitration Act 1974 - Streamlining International Commerce
On 21 November 2008, the Federal Government announced its intention to review the International Arbitration Act 1974 (the "Act). The Act regulates international commercial arbitration in Australia and provides for the recognition and enforcement of international arbitration agreements and foreign arbitral awards (ie judgments/awards made by Courts overseas). Currently international business arrangements which fall into dispute can result in proceedings being conducted in either State/Territory Supreme Courts or the Federal Court of Australia. In the international arena this system is proving very confusing and costly. As a result the review process has been instigated).
Depending on the outcome of the review there are likely to be consequences for those pursuing:
- disputes with overseas based suppliers, of goods and services
- disputes over the outbound provision of goods and services; and
- judgments/awards made in overseas courts.
In conducting the review, the Government has proposed amendments to ensure that international arbitration in Australia is conducted within a clear framework and that greater efficacy is given to the framework.
Proposed Amendments
The following amendments are proposed:
- That the jurisdiction of the Federal Court of Australia be significantly widened with respect to the Act.
- That the application of the Act be extended such that it exclusively governs all international commercial arbitration in Australia to which the UNCITRAL Model Law applies.
- That the Act expressly state that a Court may only refuse to enforce a foreign arbitral award if a specified ground is made out. This is in response to the Supreme Court of Queensland decision of Resort Condominiums International Inc v Bolwell & Anor, that the Court retains a general discretion whether to enforce a foreign arbitral award even if none of the specified grounds are made out.
- Various amendments with respect to remedying inconsistencies and incorporating earlier amendments to the UNCITRAL Model Law. Many of these potential amendments have the object of ensuring that Australia's arbitration framework is in line with international best practice.
Potential Effects of Amendments
In the current economic climate, arbitration is an important dispute resolution mechanism in the international arena. It arguably provides a faster and cost effective alternative to litigation. Improving the appeal of Australia's arbitration framework to the international market should encourage foreign investment