BACKGROUND

On 7 March, commercial arbitration in Queensland entered a new era after the Queensland Parliament passed the Commercial Arbitration Bill 2012 (Qld) ("the New Law").

The passage of the bill is part of an Australia-wide push toward a uniform commercial arbitration regime consistent with the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration. The UNCITRAL Model Law, although not binding, has been in place since 1985. The Australian government adopted a number of the UNCITRAL Model Law articles in legislation governing offshore commercial disputes.

Commercial Arbitration is legislated on a state-by-state basis. This bill repeals the Commercial Arbitration Act 1990 (Qld) which adopted few of the UNCITRAL Model Law articles. It is intended that the new legislation will provide local corporations and individuals with a broad, instructive framework for a uniform, efficient, court-free and inexpensive method of dispute resolution.

HOW IS THE LEGISLATION RELEVANT TO YOUR BUSINESS

Parties have the benefit of a number of provisions of the New Law which simplify or improve the commercial arbitration procedure.

  • . Parties are now given more freedom to determine between them arbitration rules and procedures which can be as expansive or as brief as desired.
  • Unless the parties opt out of this procedure, in order to make a complaint an aggrieved party must serve on the other party a "statement of claim" outlining their grievances, and the respondent party must serve a defence. That requirement, similar to that of pleadings in civil proceedings, is designed to provide the framework for a consistent procedure for the giving of evidence, as parties are entitled to submit evidence with these documents or refer to other evidence it will file. The process is designed to lay all cards on the able at an early stage of the arbitration process.
  • An arbitrator now has the power to appoint experts to determine technical matters.
  • The legislation requires the Parties to conduct proceedings expeditiously. Penalties may flow for non-compliance and delay.
  • The parties are required to appoint the arbitrator/s themselves; they can appoint as many as they desire.
  • The arbitrator/s now has more power to determine the weight, admissibility and relevance of evidence, where formerly the parties and arbitrators were hamstrung by requirements limiting consideration of evidence.

KEY THEMES OF THE BILL

Confidentiality (of pleadings, any award, documents disclosed by a party under the arbitrators' direction, evidence, notes by the arbitrators of oral evidence etc) has become paramount under the new legislation. There are stringent requirements to be followed in respect of confidentiality unless the parties opt out - a significant departure from the former regime.

A strong pro-enforcement stance is also evident. Where a party can demonstrate that an award made pursuant to the terms of a commercial arbitration agreement has been properly issued, a court must enforce it. Provided that a commercial arbitration clause or agreement has been validly consented to by the parties and an order has been properly made by compliant arbitrator/s, the court will enforce that agreement and any orders made pursuant to it.

SUMMARY

The new legislation provides for a more effective commercial arbitration regime both in terms of process and enforcement. Whether by way of a new agreement collateral to existing commercial relationships or by the insertion of a new clause into future commercial agreements, Queensland businesses now have a more effective cost efficient alternative to litigation.

Acting now to implement effective arbitration clauses into your new or existing commercial agreements might save you down the track on significant legal fees.

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.