Bjorn Gehle wrote a detailed examination of the ACICA Rules. The Arbitration Rules of the Australian Centre for International Commercial. These rules (“Rules”) are the rules of arbitration of the Australian Centre for InternationalCommercial Arbitration. This changed significantly in when ACICA launched its own institutional arbitration rules, known as the ACICA Arbitration Rules (“ACICA Rules” or “Rules ”).
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We look at how Australia keeps up to date with international best practice by amendments to ACICA arbitral rules and international arbitration laws; potential improvements and innovations identified in the Queen Mary University of London International Arbitration Survey; the investor-state dispute settlement mechanism under the Trans Pacific Partnership agreement; and in Hong Kong, increasing support for third party arbitration funding and the introduction of arbitrator ‘report cards’.
The Australian Centre for International Commercial Arbitration has recently updated their arbitration rules. The changes are in response to recent developments in the region and bring the rules into line with the best practice of other international arbitration centres. International arbitration in Australia has grown significantly in recent years. Australia is, now more so than ever, well placed to serve as a seat for international arbitration, with a now well-developed and tried and tested legislative framework that supports the fair and efficient resolution of disputes by means of arbitration and the enforceability of arbitral awards produced through arbitration.
Businesses engaged in international trade and commerce may specify certain institutional rules to be applied in the event that a dispute is referred to arbitration. ACICA aims to facilitate and promote fair and efficient resolution of disputes by arbitration where Australia is the seat for arbitration. ACICA periodically reviews and updates its rules to ensure that they reflect international best practice and continue to best serve the needs of its users.
ACICA has also tidied the rules by attending to some important, albeit minor, ‘housekeeping’ matters.
These changes are not expected to have any significant effect on arbitration practice. The latest changes by ACICA are valuable reforms that will serve to better meet the needs of those engaged in international trade and commerce.
Asian Dispute Review – Kluwer Law Online
While the changes are not completely uniform with the rules of other institutions and contain subtle differences arbitdation approach, the changes modernise the rules in a way that administers more effective arbitration proceedings where multiple parties, similar disputes or ambiguities may be involved.
On 13 Octoberthree significant amendments to the International Arbitration Act Cth came into force. They relate to the enforcement of foreign arbitral awards, the confidentiality of arbitral proceedings and the resistance of enforcement on the basis of incapacity. Lawyer Evan Lacey reports. Now, following the recent amendments, any arbitral award is, subject to the usual grounds for challenge, enforceable in Australia, regardless of the country in which it was made.
Awards made in these countries will now be enforceable in Australia. Confidentiality is widely recognised as a key advantage of arbitration. The previous position under the IAA required parties to specifically ‘opt-in’ to gain the benefit of the IAA’s confidentiality provisions.
Asian Dispute Review
This position has now been reversed so that the default position is that proceedings are confidential, unless the parties opt out. Under the current provisions of the IAA, a party can resist the enforcement of an arbitral award on the basis that it is under an incapacity at the time the arbitration agreement was made. The recent amendments to the IAA mean that the incapacity of either the award debtor or the award creditor may justify the refusal to enforce a foreign award.
These amendments ensure that the IAA remains consistent with current international best practice and that Australia remains an attractive seat for arbitrations in the region.
In OctoberQueen Mary University of London released its latest comprehensive survey about the use of international arbitration. The survey sheds light on international arbitration trends and examines improvements and innovations in the arbitral process.
The survey was conducted through questionnaires and personal interviews. The survey noted the continuing popularity of international arbitration with 90 per cent of respondents indicating that it was their preferred dispute resolution mechanism for resolving cross-border disputes.
The enforceability of awards was viewed as the most valuable characteristic, and confidentiality and privacy were of particular importance to in-house counsel. The worst-perceived features of international arbitration were its cost 68 per cent of respondents and the lack of effective sanctions during the arbitral process 46 per cent of respondents.
London 47 per cent and Paris 38 per cent were rated highest as the most preferred seats for international arbitration, with respondents indicating that reputation and recognition were the main drivers behind their selection of a seat.
More interestingly, the survey found Singapore and Hong Kong to be the most improved arbitral seats. This was largely due to improved hearing facilities, availability of qualified arbitrators with a degree of familiarity of the seat and improved local arbitral institutions.
The results suggest that both of these regional seats may continue to attract a greater number of international arbitrations users. Even though respondents identified the length and cost of international arbitration as its most problematic features, they did not select a clear winner when presented with a list of potential innovations to control those issues.
The best perceived innovation was a requirement that tribunals commit to a timetable for deliberations and the delivery of the final award, which may have the effect of motivating arbitrators and providing greater certainty to parties. The survey also analysed the use of emergency arbitrators in the context of reducing time and cost and found that 66 per cent of respondents had no experience with emergency arbitrations.
While more respondents indicated that they would prefer domestic courts for seeking urgent relief, 26 per cent of respondents were undecided.
The reluctance to use emergency arbitrators appears to revolve around the enforceability of emergency arbitration decisions, which may vary across jurisdictions and may be time-consuming and unpredictable. Nevertheless, a surprisingly large majority of respondents 93 per cent expressed a preference for arbitral institutions to include in their rules provisions relating to emergency arbitrations.
Combined with the high proportion of respondents who were undecided about the use of emergency arbitrators, this result suggests potential growth in this area. If you need to seek urgent relief before the constitution of the arbitral tribunal, which of the following options would generally be your preferred course assuming that the same relief will be available in each case?
This is consistent with statistics released by arbitral institutions such as SIAC and HKIAC which have indicated a rising use of emergency arbitrators in regional seats. Between 1 July aacica 1 OctoberSIAC received 46 emergency arbitration applications, of which relief was granted in 27 applications riles per cent. In Australia, a statutory provision allowing courts to enforce interim awards of arbitral tribunals section 17H of the International Arbitration Act Cth coupled with provisions in the ACICA rules to facilitate emergency arbitration are likely to result in increased use of emergency arbitrators.
Respondents also saw adbitration counsel as having a role in reducing time and cost, in particular suggesting that cooperation with opposing counsel could be improved to narrow issues and limit document production. In addition, in-house counsel wanted arbitration counsel to further encourage settlements, including by using mediation during an arbitration. On that note, the survey shows that mediation remains a much lesser used method for resolving cross-border disputes and the idea of having an arbitration run concurrently with a separate mediation for the same dispute was unsurprisingly not favoured by respondents.
While 70 per cent of respondents thought that there was a sufficient level of regulation in international arbitration, many indicated that certain rlues, including third party funders 71 per centarbitrators 55 per cent and tribunal secretaries 68 per cent should be the arbifration of greater regulation. A majority of in-house counsel 68 per cent also favoured ruls regulation of party representative conduct. The survey noted that the use of third party funding in international arbitrations appears to be a growing phenomenon.
Around 39 per cent arnitration respondents indicated that they had encountered third party funding in practice, with 12 per cent stating that they had used such funding. While third party funding was viewed in a neutral light by about half of the respondents, 71 per cent of respondents indicated that third party funding should aciac regulated, with recommended proposals ranging from the use of guidelines, codes of conduct to individual self-regulation.
Having said that, a number of interviewees stated that regulation should focus more on disclosure rather than the establishment of a prescriptive, substantive regime. This would allow tribunals to handle potential issues relating to third party funding on a case-by-case basis.
A clear majority of respondents 71 per cent believed that arbitratiin was undesirable for the full terms of third party funding arrangements to be subject to mandatory disclosure, although they did believe that certain aspects of third party funding should be mandatorily disclosed.
These included disclosure of the use of third party funding 76 per cent and the identity of the funder 63 per cent to increase transparency and assist with conflicts of interest checks. Should it be mandatory for a claimant to make disclosure of each of the following? Respondents had mixed preferences for the manner in which arbitrator conduct should be regulated.
Suggestions included the use of instruments issued by arbitral institutions 23 per centa code of conduct by a professional body 22 per cent and databases providing information about arbitrator performance 21 per cent. It is noteworthy that 63 per cent of respondents indicated that ‘issue conflicts’, where an arbitrator has previously taken a particular position on an issue to be decided in the case, did not require specific regulation in commercial abritration.
In comparison, respondents were more divided as to whether issue conflicts should be regulated arbitrstion the context of investment treaty arbitrations. A clear majority of respondents considered repeat appointments of arbitrators to be problematic in both commercial and investment treaty arbitrations.
Notwithstanding that, they felt that further regulation was not necessary as current instruments offered adequate assistance to deal with this issue. Tribunal secretaries were widely used by respondents 82 per cent and their role was generally positively perceived, with interviewees indicating that tribunal secretaries improved the efficiency of arbitral proceedings and should be more frequently offered by arbitral institutions. Most respondents however preferred tribunal secretaries to only complete administrative tasks and 70 per cent of respondents preferred for tribunal secretaries to be regulated through arbitral institutions as opposed to the use of guidelines by international organisations.
On 5 Octoberagreement was reached on the long-awaited Trans-Pacific Partnership. Chapter 9 of the TPP includes substantive provisions on the protection of investments of nationals of contracting states in the territory of the other contracting states. These protections include the ‘national treatment’ protection, the ‘most favoured nation’ protection, a right to fair and equitable treatment, full protection and security and protection against expropriation. The chapter also includes a modern investor-State dispute settlement ISDS mechanism, which permits investors to arbitratioj these protections through consultation and negotiation, or failing these processes, through binding international arbitration.
Investors have the option arbiyration both institutional and ad hoc arbitration. Alternatively, an investor can commence arbitration under:.
Claims must be brought within three and a half years from the date on which the investor first knew or should have known of the alleged breach of the TPP and the investor knew it had incurred loss or damage. The TPP introduces several procedural adica not generally found in older bilateral investment treaties, including provisions: Following agreement on the text of the TPP, it must now be ratified by the respective national legislatures. This is expected to happen within approximately two years.
Once implemented, the TPP will significantly expand the ability of investors in several capital exporting states to take advantage of ISDS mechanisms.
In Junethe Hong Kong Law Reform Commission established a sub-committee to review the position of third party funding in Hong Kong for arbitration. A third party funding arrangement for rulez commonly provides that the third party funder will pay the funded party’s legal and other costs of the arbitration in return for a percentage of the award. While most major international arbitration seats now allow third party funding in arbitration, it is still unclear in Hong Kong whether such arrangements are prohibited by the common-law doctrines of champerty and maintenance.
The purpose of the sub-committee was to review the current position in Hong Kong and to consider whether reform is needed. On 19 Octoberthe sub-committee released a consultation paper in which it recommended that the Arbitration Ordinance should be amended to permit third party funding for arbitrations taking place in Hong Kong.
The recommendation is subject to the proviso that such reform is accompanied by appropriate ethical and financial standards for funders.
The paper invites submissions on issues such as whether there should be a government or independent body overseeing the use of funding and in particular, whether funders should be directly subject to adverse costs orders or made to pay security. In Australia, third party funding of litigation is not prohibited by the common law doctrines of maintenance and champerty.
Court rules and procedures are considered sufficiently robust to protect against potential abuses of process arising from such funding arrangements. However in Singapore third party funding agreements are generally unenforceable unless the funder can demonstrate either that it has a legitimate commercial interest in the claim or the assignment of interest is ancillary to a transfer of property.
This consultation paper from the Hong Kong Law Reform Commission is another sign of Hong Kong’s commitment to attract the international arbitration community to continue to use Hong Kong as a seat in international arbitrations.
A summary of the consultation paper can be found here. The Hong Kong International Arbitration Centre recently launched a new system that allows users to submit confidential evaluations on the performance of their arbitrators and the conduct of their arbitral proceedings. The arbitrators themselves will also be able to rate HKIAC’s services and give feedback on the performance of fellow arbitrators. In a press release, the HKIAC stated that the launch of the system was a response to the preferences expressed in the Queen Mary International Arbitration Survey which indicated that users were looking for greater transparency on arbitrator availability and performance.
GAR Chapter: Australia
The survey reported that 75 per cent of respondents wanted to assess arbitrators at the end of a dispute and 76 per cent of them would like to report to the arbitral institution.
While the results of individual evaluations will not be published, it is expected that the new system will encourage arbitratoin greater sense of accountability among arbitrators who will inevitably be more conscious of their performance. It will no doubt be a challenge for HKIAC to determine what feedback is fair, however, the system should prove useful for HKIAC when deciding whether to renew an arbitrator’s terms on its panel and list of arbitrators.
Acicq arbitral institutions are increasingly afbitration as drivers of innovation in international arbitration. Given the competition between the institutions, it would not be surprising to see similar systems emerge in other arbitral institutions in the region. For further information, please contact: Andrea Martignoni Partner, Sydney Ph: Nick Rudge Partner, Melbourne Ph: