Since January 2012, Australia is one step closer to a uniform framework for domestic arbitration, the finalisation of which will see major benefits to any party attempting to resolve disputes by way of Alternative Dispute Resolution (ADR) measures. In July 2010, new legislation governing international arbitration in Australia, the International Arbitration Amendment Act 2010 (Cth), passed into law and created a framework for international arbitration consistent with worldwide best practice. At that time, the reform was complemented by the Commercial Arbitration Bill (Cth), a Model Law drafted by the Standing Committee of Attorneys-General, with the aim of creating a uniform framework for domestic arbitration in Australia.
The aims of the Model Law included aligning Australian domestic arbitration processes with international arbitration processes, enhancing the powers of arbitrators and increasing efficiency and certainty by reducing the scope for intervention by courts. The effect of the Model Law is to strengthen commercial arbitration as a cost-effective and binding form of ADR in Australia.
For Australian Government Agencies, the use of arbitration and other forms of ADR is an important element of compliance with the Legal Services Directions as well as the Civil Dispute Resolution Act 2011 (Cth) and new Federal Court Rules which both came into force in 2011. It is also consistent with the former Commonwealth Attorney-General's push for a cultural shift within agencies away from litigious resolution of disputes towards early resolution by way of ADR processes.
In relation to the adoption of the Model Law by each state and territory, NSW was the first state to pass legislation reflecting the Model Law in 2010. Since that time, the uniform Model Law has been adopted and is currently in operation in Victoria and South Australia. As at January 2012, Tasmania and the Northern Territory have now assented to a uniform Act and are currently in the process of setting a commencement date. Bills are currently before the Parliaments of Western Australia and Queensland which reflect the Model Law. A bill reflecting the Model Law is yet to be introduced into the Legislative Assembly of the Australian Capital Territory.
Based on current trends, it is likely that uniform commercial arbitration legislation will be in operation in at least five states and territories by the end of 2012. Australian Government Agencies should be open to the use of arbitration as an efficient and effective form of ADR and be on the look out for circumstances where arbitration may be a viable alternative to lengthy and expensive court processes.
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