New commercial arbitration legislation will bring
Queensland in step with other States.
Queensland's out-of-date arbitration regime is about to get
a much-needed overhaul with the introduction of the new
Commercial Arbitration Bill (2011).
And, it's not before time. As the frenzy of Queensland's
resources boom continues unabated, so too has there been an
inevitable increase in disputes. Given the money, corporate
profiles, commercially sensitive information and international
connections typical of these disputes, commercial arbitration is
fast becoming the preferred dispute resolution mechanism.
The arbitral process has a number of drawcards. Proceedings are
confidential and disputes can usually be kept out of the public
domain. Parties have more control over the process, including
decisions about the appointment of arbitrators and procedural
rules. The capacity of arbitration to enforce both international
and local awards also ensures it is no toothless tiger.
Perhaps more than any other feature, arbitration has been
promoted as a cheaper, faster means of dispute resolution than
litigation before the courts. However strong anecdotal evidence
suggests this has not been the case. In 2009, the then NSW Chief
Justice, the Honorable James Spigelman AC, concluded
Australia's commercial arbitration regime was 'not
delivering the cost savings it promised'.
In an attempt to re-capture the expediency and cost benefits of
arbitration, Queensland's new commercial arbitration bill
explicitly instructs parties to a dispute to take action to avoid
unnecessary delay or expense. A key section of the Bill is 24B. It
expressly requires the parties to an arbitration to 'do all
things necessary for the proper and expeditious conduct of the
The origins of 24B's intent can be traced back to section
40(1) of the UK's Arbitration Act 1996 which mandates the
"proper and expeditious conduct" of arbitral proceedings.
The inclusion of this statutory duty addresses delay tactics or
tardy behaviour of parties which go against the spirit of the
Notably only a handful of reported disputes have relied on
section 40 of the UK Arbitration Act to date.
Section 24B(1) also closely resembles rule 5 of Queensland's
Uniform Civil Procedure Rules 1999 (UCPR) which introduced
an 'overriding philosophy' into the civil procedure matrix.
Like section 24B(1), rule 5, emphasises the key points of
expeditious resolution, minimising expense and avoiding undue
In Queensland, rule 5 of the UCPR has prompted litigation based
on various complaints, including lengthy or inexcusable delays,
deliberate frustration or abuse of process, recourse to unnecessary
interlocutory proceedings and poorly timed settlement offers.
It remains to be seen whether parties to arbitration in
Queensland will seek to rely on section 24B(1) as a basis to invite
Queensland courts to intervene in the arbitral process or whether,
like section 40 of the UK Arbitration Act, cases brought before the
courts in reliance on section 24B will be rare.
In any event, Queensland courts will need to strike a balance -
ensuring that, on the one hand, the Bill's intent is observed
so that Queensland businesses maintain confidence in commercial
arbitration as an effective means of dispute resolution. On the
other hand, the courts will have to carefully consider the extent
to which they will willingly intervene in the arbitral process.
Aside from section 24B, Queensland's proposed commercial
arbitration legislation is closely aligned with the Model
Commercial Arbitration Bill adopted by the Standing Committee of
the Attorneys-General in 2009. This Model Bill, intended to be
enacted by the states and territories as a uniform piece of
legislation, aims to harmonise arbitration throughout all
Australian jurisdictions. The Model Bill reflects international
best practice by adopting the provisions of the UNCITRAL Model Law
on International Commercial Arbitration which was last updated in
The eventual enactment of Queensland's Commercial
Arbitration Bill will bring long-awaited and much required reform
to arbitration in Queensland. It is to be hoped that arbitration is
given every opportunity to prosper.
Note: The new Commercial Arbitration Bill 2011 (Qld)
will replace the existing Commercial Arbitration Act 1990
(Qld). The Bill was introduced into the Legislative Assembly in
November 2011, however it lapsed on 19 February 2012 with the
prorogation of the state government. The Bill currently awaits
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.
Most awarded firm and Australian deal of
Australasian Legal Business Awards
Employer of Choice for
Equal Opportunity for Women
in the Workplace (EOWA)
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Peter Sise explores how your contractual clause for recovery of legal costs might not do what you think it does.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).