In this article we consider the Commercial Arbitration Bill 2010 (Cth) and its progress across the States and Territories towards enacting the uniform national legislation.
What is it?
The Bill is intended to align 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 Standing Committee of Attorneys-General agreed on the wording for the uniform legislation in May 2010. To date, NSW, Victoria, South Australia, Tasmania and the Northern Territory have brought uniform legalisation into effect. Western Australia has introduced a Commercial Arbitration Bill into parliament leaving Queensland and Canberra as the only states/territories yet to introduce a bill.
Each State's legislation also includes optional provisions for arbitration agreements should a dispute arise and transitional arrangements for the introduction of the Act.
Why has it come about?
Participants in the construction industry are well aware that it is the source of some of the most complex and technical legal disputes. This complexity has demanded the use of expert determinations, adjudication, litigation and arbitration to resolve the various types of dispute. In Australia, arbitration has historically been the least popular of these. Criticisms concern cost, efficiency, certainty and uniformity.
A lack of uniformity across the States has caused uncertainty as to the enforceability and finality of arbitration awards in Australia. Claimants have often preferred more traditional means of dispute resolution such as litigation.
Criticisms as to cost and efficiency in arbitration are not unique to Australian domestic arbitration. A study of the Corporate Counsel International Arbitration Group in 2010 found that 100% of the corporate counsel participants believe that international arbitration "takes too long" and "costs too much".
The Bill was enacted in 2010 to combat the above limitations of arbitration in Australia.
The NSW Act
The Commercial Arbitration Act 2010 was enacted on 28 June 2010 and came into force on 1 October 2010. The paramount objective of the uniform legislation, as stated in the Act, is to facilitate the "fair, quick, cost effective and final resolution of disputes by arbitration by allowing the parties greater procedural control and further restricting the basis for court intervention and appeals of arbitral awards."
Around Australia
The current status of the legislation around the other jurisdiction is as follows:
- Commercial Arbitration (National Uniform Legislation) Act (NT) 2011 – this Act was assented to on 31 August 2011 and contains minor technical amendments to the NSW Act. The Act will commence on a day to be fixed by the Territory Administrator by Gazette notice.
- Commercial Arbitration (Consequential Amendments) Act (TAS) 2011 – this Act was passed by both Houses of Parliament and given the Royal Assent on 7 September 2011. It is consistent with the NSW Act and has yet to come fully into force.
- Commercial Arbitration Act (VIC) 2011 – this Bill was introduced into parliament on 16 August 2011 and assented to on 18 October 2011. The Act contains minor technical amendments to the model Bill to make it consistent as far as possible with the Commercial Arbitration Acts already passed in NSW and Tasmania. The Act will commence on a day to be fixed by proclamation.
- Commercial Arbitration Bill (WA) 2011 – this Bill was introduced into parliament on 15 June 2011 and has yet to come into force.
- Commercial Arbitration Bill (SA) 2011 – this Bill was introduced into parliament on 4 May 2011 and was assented to on 22 September 2011. It will commence on proclamation.
- Queensland and Canberra have yet to introduce a Bill.
What can we expect?
Assuming the uniform laws are adopted throughout Australia, it will only be a matter of time before confidence returns and arbitration will take its place as a reliable and viable alternative to litigation in construction disputes.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
