International arbitration in Australia: selected case notes and trends.

• Author: Monichino, Albert

Abstract

This article briefly considers caseload statistics and aggregate trends regarding International Arbitration Act 1974 (Cth) matters heard by Australian courts. It then provides selective case notes on 11 judgments rendered since 2010, querying the reasoning and application of the Act in several cases. In light also of some drafting infelicities in the 2010 amendments, the article concludes that Australia should consider another round of broader statutory reforms. This should be inspired by the legislative activism of major Asia-Pacific venues for international commercial arbitration, especially Hong Kong and Singapore, with similar legislation based on the UNCITRAL Mode/Law.

Introduction: Australia's New Regime for International Arbitration

On 6 July 2010, Australia amended its International Arbitration Act 1974 (Cth) ('IAA'), partly to give effect to most of the revisions made in 2006 to the United Nations Commission on International Trade Law ('UNCITRAL') Model Law on International Commercial Arbitration ('Mode/Law'), included as sch 2 to the IAA. The original Model Lan, approved by UNCITRAL in 1985 as a template aimed at harmonising and modernising national arbitration legislation, was given force of law in Australia by s 16 of the IAA, added in 1989 along with other provisions in pt III aimed primarily at supporting international arbitrations with the seat in Australia. The original IAA, enacted in 1974, aimed to give effect to Australia's obligations under the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards ('New York Convention'), included as sch 2 to the IAA. (1) Those provisions, with some amendments added in 2010, are still found in pt II of the IAA. (2)

The Australian states and territories are in the process of updating their uniform commercial arbitration Acts ('Uniform Acts'). (3) Once the new Uniform Acts are enacted throughout Australia, there will be a harmonised arbitral legislative regime for both international and domestic arbitration. However, the new Uniform Acts introduced maintain some differences from the Model Law regime, given that their focus is solely on domestic arbitrations. (4)

A previous article co-written by one of the present authors has outlined the amended IAA's aims and its provisions on writing requirements for arbitration agreements, enforcement of foreign awards, exclusion of the Model Law, interim measures, confidentiality, other substantive matters, and the temporal application of the 2010 amendments. It concluded that die scope of the 2010 amendments was somewhat limited and unadventurous, but that nevertheless they should significantly enhance the legal regime for international commercial arbitration in Australia. (5) An article written by another of the present authors argued that it would have been better for the Commonwealth to enact a single arbitration Act covering both domestic and international arbitration and conferring exclusive jurisdiction on a single court. (6)

These recent amendments to the IIA were introduced after a consultation period of about 18 months, without scrutiny by a select committee in the Commonwealth Parliament. Regrettably, there are a number of drafting problems with the amending legislation. Some are relatively minor. For example, the amended IAA usefully adopts art 171 of the revised Model Law, allowing parties to international arbitration agreements (even with the seat abroad) to apply to specified Australian courts to issue interim measures regarding the arbitral proceedings. (7) It also adopts most revisions providing for greater enforceability of interim measures issued by the arbitral tribunal. However, s 18B of the IAA prohibits applications for 'a preliminary order directing another party not to frustrate the purpose of an interim measure requested', without clarifying whether a party may apply ex parte to the tribunal simply for an interim measure. (8)

Other amendments to the IAA create more serious problems. Most significantly, there is uncertainty as to the temporal operation of the new s 21 which, in effect, provides that the IIA and Model Law cover the field in respect of international arbitration seated in Australia. If s 21 has prospective effect, parties' choices to opt out of the Model Lim, in arbitration agreements made before 6 July 2010 remain effective. Thus, although the lex arbitri would be the former commercial arbitration Acts, if an arbitration is commenced following enactment of new uniform legislation (which repeals the old legislation) in the state or territory in which the arbitration was seated, there will not be any arbitral law to regulate that arbitration. (9) As states and territories adopt the new uniform legislation, this 'legislative black hole' will only get bigger. Conceptually, the black hole arises:

* if an arbitration is commenced pursuant to a pre-6 July 2010 international arbitration agreement;

* following the enactment in the relevant state or territory in which the arbitration is seated of new domestic arbitration legislation (repealing the old) which is confined in its operation to domestic arbitration; and

* importantly, if the view is taken that MA new s 21 has prospective operation only. (10)

In this article the authors briefly consider caseload statistics and aggregate trends regarding IAA matters before Australian courts, then provide selective case notes on some of those judgments rendered since 2010. This is followed by a questioning of the reasoning and application of the IAA in several judgments, before concluding that Australia should consider another round of broader statutory reforms.

II Aggregate Trends in Caseloads

Judgments referring to the IAA have been increasing in recent years. This may partly reflect heightened awareness of Australia's legal framework for international commercial arbitration, as well as a worldwide expansion in international arbitration filings, particularly in the Asia-Pacific region. (11) The growing case law is evident from Figure 1. (12)

Figure 1 reflects not only more judgments dealing with s 7 of the IAA (approximating New York Convention art II: stay of proceedings in Australian courts where there is purportedly agreement to arbitrate abroad), but also a growing proportion of cases involving enforcement of foreign awards in Australia (under IAA s 8, approximating New York Convention art V). There are also now a few judgments dealing with pt III of the MA; in particular, judgments dealing with aspects of the Model Lam, mainly involving arbitrations where the seat is in Australia.

Figure 2 reveals the preference for the federal over state or territory courts for IAA proceedings, and shows the predominance of Victorian and New South Wales courts where IAA matters are litigated in state or territory courts.

Figure 3 provides the proportions after grouping together related proceedings, where multiple proceedings relating to a case (including appeals) are counted only once. In New South Wales, no appeals have been pursued from the Supreme Court through to the Court of Appeal since the High Court of Australia decision in Tanning Research Laboratories Inc v O'Brien. (13) There have been more appeals from first-instance federal and Victorian courts.

III Selected Case Notes

To further explore and enhance familiarity with Australia's legislative regime for international arbitration, the rest of this article presents selected case notes of recent Australian judgments. They were developed partly for the online CLOUT database, (15) and as materials for public seminars held in 2012 in Tokyo, Brisbane and Sydney. (16) Part A deals with three cases involving arbitrations with the seat in Australia, pt B covers three cases involving stay applications for arbitrations with a seat outside Australia and pt C deals with five cases involving enforcement of foreign awards.

A Arbitrations with the Seat in Australia

I teleMates v Standard SoftTel Solutions

In teleMates Pty Ltd v Standard SoftTel Solutions Pvt Ltd, (17) the applicant (an Australian company) and the respondent (an Indian company) entered into a written agreement which included a dispute resolution clause providing that all disputes be referred to arbitration 'in accordance with the provisions of "The Institute of Arbitrators & Mediators Australia" [TAMA] ... land that the] venue of arbitration shall be mutually decided within New South Wales Australia'. IAMA is a non-profit company that provides arbitration and mediation services in Australia, including administering domestic and international arbitrations where parties adopt the IAMA Arbitration Rules (published in 2007).

A dispute arose and the respondent subsequendy requested IAMA to nominate an arbitrator. An arbitrator (X) was nominated by IAMA, but this was disputed on the basis that the applicant had not consented to the referral or appointment. X published an 'interim award' holding that, as a preliminary question, he had jurisdiction to hear the dispute, and found against the applicant on the merits.

The applicant sought three separate declarations from the Court: first, that X had not been appointed as arbitrator; second, that the parties failed to agree on the procedures of appointment (or, in the alternative, that the respondent failed to follow the required procedures); and third, that an arbitrator should be nominated by the Australian Centre for International Commercial Arbitration ('ACICA').

The applicant submitted to the Court that X should not have been appointed as arbitrator, as the parties failed to agree on a procedure for appointing an arbitrator under Model Law art 11(3). The applicant alternatively argued that the respondent failed to comply with the procedure for appointing an arbitrator under Model Law art 11(4), on the basis that no reasonable steps were taken to seek the applicant's agreement on who would be appointed as arbitrator.

Both the applicant's primary and...