Australia: Corrs High Vis: Episode 2 – Sydney Arbitration Week (Part 2)

Corrs High Vis tackles the issues that matter in the construction industry. The podcast series, brought to you by Corrs Construction team, offers views and analysis providing industry professionals with key insights to help them make smarter decisions.

This episode of Corrs High Vis, features Part Two of our special look at Sydney Arbitration Week. What must Australia do to strengthen its position as an arbitration hub? Host Jaclyn Smith is joined by Partner Andrew Stephenson, Head of Arbitration Chambers Hong Kong Gavin Denton and Abhinav Bhushan of the International Chamber of Commerce, South Asia.

These podcasts do not provide legal or other advice. Obtain legal or other professional advice as required.

TEXT VERSION

CORRS HIGH VIS PODCAST - EPISODE 2 - SYDNEY ARBITRATION WEEK (PART 2)

Jacqueline Smith: Commentator

Andrew Stevenson: Corrs Chambers Westgarth - Construction Partner

Gavin Denton: Arbitration Chambers Hong Kong - Founder and Head

Abhinav Bhushan: South East Asia ICC -Regional Director

JACQUELINE: Hello and welcome to High Vis – the Corrs Construction podcast. My name is Jacqueline Smith and I'm an associate in the Corrs Construction team and a director of the Society of Construction Law Australia. Today, we will be bringing you some key insights from Sydney Arbitration Week. We will be discussing what Australia needs to do to strengthen its position as an arbitration hub. Joining me today is Gavin Denton, the founder and head of Arbitration Chambers Hong Kong. Abhinav Bhushan, the regional director for South Asia of the ICC and Andrew Stevenson, partner in the Corrs Construction team. Welcome to Gavin, Abhinav and Andrew. What does Australia need to be doing to be strengthening its position as an arbitration hub, Andrew?

ANDREW: I think Australian lawyers generally have to address some cultural issues. While we have very good courts and a high level of competence in the judiciary what we do not know particularly well is the management of the process from inception to hearing and the lessons that are learnt associated with Supreme Court practice in every State is that it is not efficient. If we take that process and want to offer it internationally we will find - it certainly has been my experience in international arbitration - that the Australian process is singularly uncompetitive. So we need to move in the way in which we deal with things domestically both in domestic arbitration and in the court system and we need to recognise that in the context of international arbitration the process will be often radically different from that which is adopted in Australian courts borrowing heavily from civil procedure, civil law country procedure, that is continental European procedure which has completely different attitudes to discovery from that found in England and other common law countries. So these are issues which I think we need to address both for the purposes of remaining relevant in Australia and providing an internationally competitive service.

ABHINAV: Adding on to what Andrew said I think that a couple of things that the Australian bar might want to consider I think to start with is that my understanding and perhaps Andrew could correct me that the majority of arbitration that happens in Australia is ad hoc arbitration. I think that ad hoc arbitration should move towards institutional arbitration. Second, I think there needs to be an arbitration bar and there needs to be a diversity in arbitrators and arbitration practitioners. Further, I think that more women should be involved in arbitration in Australia. This will allow a vibrant bar with very intelligent, smart women and they should also look towards arbitration. So I think there needs to be an arbitrary unity in the bar. Most arbitrations jurisdictions which are progressed have a sense of loyalty to international arbitration. It's easier to say oh I'm a commercial lawyer and I do everything and I also do arbitration but if you actually look at it most developed jurisdictions: France, Singapore, Hong Kong, Paris [03:56] you would find a niche, a specialised group of people who do only international arbitration and I think the Australian bar could move towards specialisation, getting more qualifications when it comes to arbitration-related activities, for instance a CIR qualification, an admin secretary qualification from HTIC or CIR these are some of the things that I think that the bar could look at.

GAVIN: I think the idea that Australia is ever going to be a major hub for international arbitration is probably misconceived. I think there are people within Australia that have done an awful lot to progress things here but at the end of the day, we have to acknowledge that geographically we're restricted and as Abhinav says people in Australia have diverse practices and they touch on international arbitration periodically through their careers and it is rare for many of the bar or partners of firms to be doing significant amounts of arbitration day in day out. So we're up against jurisdictions where many of the firms have dedicated arbitration practices where they're practising in the field all day every day, year in year out and so you go from being an associate through senior associate, partner, etc, and that's all you've ever done and we can't underestimate the value of that versus when you're trying to appoint an arbitrator in a matter that involves an Australian entity it seems to me that the majority of partners in Australia are appointing international arbitrators that live elsewhere and they're not appointing the senior members of the bar here or partners of law firms. So I think what would be more useful while I've been focussing on Australia as an hub of international arbitration would be to say how do we create a greater nexus between those practitioners in Australia that really want to do international arbitration and engage them in the major seats you know Asia and Europe. So how do we go about encouraging, supporting that process so that they can get up into Singapore and Hong Kong and act and work more regularly so that like Abhinav says then you've got a core group of people within Australia and may be that then builds the knowledge and opens up the opportunities for them to then sit as international arbitrators as well.

ABHINAV: One thing I talk about was the dispute resolution clause and the sad part is that nobody really thinks about the dispute resolution clause at the time you're entering into the contract. I call it a [06:47] and therein lies the problem and I think even the general counsels I think in Australia and around the world particularly [06:56] the context of Australia today they need to understand dispute resolution at the same phase as the bar needs to understand international arbitration. You cannot ignore the dispute resolution clause and unfortunately the disputes lawyers have nothing to do with the dispute resolution clause because they are drafted by the corporate lawyers and I think there needs to be harmony, there needs to be a synchronisation between disputes teams and corporate departments at the time of entering into the contract so that they know and the GCs know the general counsels know that what sort of dispute resolution they would prefer should there be a dispute. Because unfortunately nobody is thinking about that at the time they enter into the contract and this collective approach I think will certainly assist the overall dispute resolution mechanism and [07:42] clauses which are good for nothing [07:49] clauses. A lot of arbitrations suffer because of these kind of clauses.

ANDREW: I just want to pick up on that last point. The value of the drafting of any commercial contract is to be determined by the capacity to enforce it and if the enforcement process is so expensive and so long that it frustrates the commercial parties to that contract then the value of the good work no doubt done by the commercial lawyers drawing the contract is devalued considerably. So that would be the first point. Just addressing some of Gavin's points in relation to the Australian current position. First of all I would agree with him that unless we are able to move Australia physically closer to Asia we are unlikely ever to have the capacity to compete with the major centres in Hong Kong and Singapore. That having been said, I think what will happen in the next 50 years is that those centres will grow stronger and stronger and may eclipse the European centres and in that context there will always be international arbitration out of Australia whether it's conducted in Singapore or Hong Kong or in Australia and for domestic international arbitration. That is arbitration of an international type that arises here the very good example are the disputes arising between joint venturers, between joint venturers and their contractors and other players associated with the imaging resources businesses that are resident in this country. The third point I'd make about arbitration and where we've come from and I think it's important to understand this that the judiciary in Australia has become much more pro arbitration than it was even 10 years ago and there has been a concerted campaign which is reflected in the reported cases increasingly which ensures that arbitration agreements will be honoured [10:20] or references to arbitration will be made pursuant to the relevant legislation whether domestic or international and awards will be in force and only challenged but in the context of international arbitration pursuant to the grounds identified in Article 5 of the New York Convention and, of course, Australia being the model or country awards seated in this country are susceptible to review at the seat on the same basis. So there is symmetry in terms of enforcement and in terms of the review of judgment of awards that are seated in Australia and so while I think if we want to compete in terms of size and number with Hong Kong and Singapore we are at a severe disadvantage because of geography but that's not to say that international arbitration will be unimportant in this country.

ABHINAV: I mean absolutely. We at the ICC are because some of the biggest disputes that we get are from Australia although Australia in terms of number of parties that come from Australia is not that high but Gavin as the chair of the ICC National Committee Nomination said will tell you that there were 42 Australian arbitrators who acted in ICC arbitrations just in 2015 which [11:51] Australia as the top 10 countries the ICC has [11:56] arbitrators and in Asia it's probably number 1 if you count sort of Australia as [12:06]. Then you have the open countries, you have Americans and then you have the United Kingdom and then in this part of the world you have Australia as the only country which is given maximum arbitrators to an ICC arbitration. So Australians as far as I'm concerned will never be irrelevant to international arbitration although international arbitration within Australia may have certain limitations for it being the hub but never Australian law [12:34] arbitrator.

GAVIN: That's one of the things we need to understand is that there are a huge number of Australians that have left our shores and gone overseas and built extremely successful practices and they're the sorts of people that we need to tap into I think from Australia now and to provide opportunities and I haven't really brainstormed about how we go about doing that because this was just something that arose during Sydney Arbitration Week the idea to become a major how do you do it or do you look at how you engage with these other regions and I do think that we need to find a way to link the practitioners here in Australia with those that have gone overseas and see if we can work together to aid particularly the younger Australians coming through and that's one of the things that ICC Australia does is give people their first opportunities to be appointed as an arbitrator in international arbitration and most people relying on institutions in that regard rather than party appointments to kick off their careers as arbitrators and so they need to try and get involved with some of the institutions I think at an early age to try and build a career anywhere but particularly out of Australia where you probably need more support to do that.

JACQUELINE: Thanks again to Gavin, Abhinav and Andrew. It's been great to hear some of the opportunities that Australia has to strengthen its position as an arbitration hub. My name is Jacqueline Smith. Thank for you listening. We look forward to you joining us for the next edition of Corrs High Vis.

This podcast does not give legal or other professional advice and its contents should not be relied upon as such. Formal legal and other professional advice should be sought in particular matters.

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.

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