Janelle Saffin (Page, Australian Labor Party) Share this | Hansard source

I speak in support of the International Arbitration Amendment Bill 2009, which was introduced into this place in November last year. I want to thank the Attorney-General for causing a review of the act to be undertaken, after announcing it in November 2008. It was a timely review. I note that the review took into account some 30 submissions, a literature review, court cases and judgments—all manner of things—plus the model law and some amendments that were needed. No doubt the thinking of the Attorney-General and, I would say, the people in the Attorney-General’s Department was also brought to bear on this issue.

The predominant thinking around the act is to maintain its simplicity and its ease of take-up, application and enforcement. Yes, it is done within the rule of law but it is not so rule bound that it cannot take account of realities and agreements in the world of commerce. Any changes to the legislation need to be considered within this framework because amending laws can sometimes complicate, not simplify, an issue.

I have read the review and am familiar with the act and the conventions. One is the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958. It is also called the New York convention because it was agreed to there. This is often how such things are named—for instance, the Doha Round, the Uruguay Round, the Bretton Woods agreement et cetera. There is also the International Convention on the Settlement of Investment Disputes Between States and Nationals of Other States from 1965, and the United Nations Commission on International Trade Law Model Law on International Commercial Arbitration is what we call the model law.

UNCITRAL was established by a resolution of the General Assembly back in 1966 to help states face the problem of the diversity of national laws. We should be aware that many states are also federal in some form, which brings with it another set of complexities when dealing with any international-national system. This is a common way for states to organise—in fact, it is one of the most common ways. The particular challenges and obstacles that this presents to the free flow of trade was one of the key problems that the commission was given to address. The commission’s mandate is to further the progressive harmonisation and unification of the law of international trade. ‘Harmonisation’ and ‘unification’ are terms that we are well familiar with and they sound good, but in practice they can be very difficult, particularly when we are dealing with 192 states.

Australia is one of the 60 states on the commission. People are elected for six years. I think that the terms of the current members expire this year. All of this can seem a bit complex but in practice it works well enough. However, it is recognised that it can always work better—hence the bill before this place. One of the problems we face in multilateral jurisdictions such as Australia is that state, territory and federal courts each apply their own enforcement or absence of procedures. Some parties agree to submit themselves, but they agree in the context of electing certain jurisdictions to be covered by certain arbitration settlement and enforcement rules.

I have had experience in negotiating some of those contract agreements by way of leases and licences with major international companies and states—namely, Timor Leste. I have also had experience in working on how to introduce a simple law that sets up a no-frills arbitration system for a state and then getting it off the ground so that business and commerce have some certainty and can work to build capacity vis-a-vis this whole area of trade law and trade capacity. It is challenging indeed.

In Australia, the states have their own commercial arbitration acts and tribunals. In fact, I was a member of the New South Wales Commercial Tribunal for a number of years—not that it sat in country New South Wales very much. I was also a member of the Administrative Decisions Tribunal. So I am familiar with the way in which some of this works at a very local level and how it manifests itself in a variety of configurations.

The amendments to the act seek to coalesce some of the matters that I have just discussed and some others that I have not discussed. There are three objectives to be achieved by the amendments. Firstly, they are to provide guidance to the courts in the interpretation of the act. If I remember correctly—because it was some time ago that I prepared these notes—it currently has none and, I believe, no particular or focused objects either. I think they are now being included. Secondly, they are to clarify the application of the act between the various Commonwealth, state and territory pieces of legislation. Thirdly, they will implement amendments to the UNCITRAL Model Law on International Commercial Arbitration.

The bill also gives effect to enhanced flexibility, including a range of optimal mechanisms that parties can use to resolve a dispute, recognising that it does not all have to be strictly legislated. If I remember correctly, it gives more certainty to what constitutes an agreement. There is a broader definition, including e-communications and e-commerce. Then it addresses some technical matters around confidentiality, court orders, capping costs and subpoenas or the availability thereof.

Regarding the model law provisions, there is a good inclusion in that parties will be able to preserve the status quo of disputed assets while arbitration is being resolved. That is always quite a problem in practice. Often those assets will disappear, flee or go missing in action while the matter is in dispute, so it will give some effect to that.

The bill will set out the types of matters that a court should have regard to when exercising functions under or interpreting the act. The model law and arbitration agreement, or arbitral award, and these provisions emphasise the importance of arbitration in supporting international trade and commerce—because that is what it is about—and recognise that arbitration is an efficient, impartial, enforceable and timely method by which to resolve disputes. That is the ideal, of course, because we want it to be efficient, impartial, enforceable and timely. These amendments will seek to further enhance those attributes.

The bill will also clarify the only grounds—and that is important—on which the court may refuse to recognise a foreign award, and these are the ones set out in section 8 of the act. They are consistent with Australia’s obligations under the New York convention.

In closing, I would just like to say that the bill will provide clear guidance to the courts on interpretation. That is a good thing. By adopting amendments made to the model law, the bill ensures that we stay at the forefront of international commercial arbitration practice. I will be interested to see how this works in practice, having had a little bit of experience in the area. I know that the object is to simplify and stay ahead of the game. I am sure that will happen, but often things need a bit of tweaking after they are implemented and this is one of those areas that I see as a work in progress. With those words, I commend the bill to the House.

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