In the face of an evolving landscape, arbitration must be adopted by Australian businesses as the presumptive mechanism for cross-border transactions, complex projects, and collaborations in highly regulated or emerging sectors, writes Nastasja Suhadolnik.
The Australian economy is being reshaped by the energy transition, rapid digitisation, and the growth of frontier industries such as critical minerals. As projects multiply and supply chains sprawl across borders, commercial disputes are becoming larger, more technical, and more international.
Across the world, businesses, investors and even states are responding to this complexity by inserting robust arbitration clauses into their contracts and – when conflict arises – opting for neutral, confidential, and readily enforceable arbitral proceedings. This trend is apparent not only in sectors that have long favoured arbitration – such as construction and natural resources – but also among users in finance and banking, technology, pharmaceuticals and life sciences, and corporate M&A transactions, among others. The leading institutions report growing filings: in 2024, the International Chamber of Commerce (ICC) registered over 830 new arbitrations, the Singapore International Arbitration Centre (SIAC) recorded nearly 630 new cases, and the London Court of International Arbitration (LCIA) registered nearly 320 new arbitrations conducted under the LCIA Rules.
Yet, in many respects, Australia remains an outlier. Domestic litigation is still the default forum for most corporations, notwithstanding our judiciary’s arbitration-friendly reputation. In a world where counterparties, assets and enforcement prospects are scattered across multiple jurisdictions, and businesses therefore stand to benefit significantly from a neutral and internationally enforceable dispute resolution process, this reliance on local courts is an avoidable handicap. Corrs’ recent review of global arbitration trends – The Arbitration Horizon: Key Trends and What Lies Ahead – highlights recent developments that should prompt Australian parties to rethink their dispute-resolution strategy.
Corrs observes that arbitration can prove to be particularly beneficial when Australian-domiciled corporations invest in high-risk jurisdictions. Regulatory risk has surged in sectors central to Australia’s growth, including renewable energy, critical minerals, data infrastructure, and technology. As a result, globally, investors are increasingly invoking bilateral and multilateral investment treaties to challenge abrupt policy shifts and seek compensation from the host state before independent arbitral tribunals, avoiding the need to resort to the host state’s national courts. While the need for protection is particularly acute in high-risk jurisdictions, recent claims against Australia, Canada, and the UK over climate-related measures demonstrate that investments in developed states are not immune. With more than 2,500 investment treaties in force, investment treaty arbitration is relied on by foreign investors around the world as a key risk-management tool. Australian sponsors and financiers of outbound projects should be aware of this tool, as well as the importance of structuring their investments through jurisdictions with suitable investment treaty protections in place.
Another significant trend is the increasing use of arbitration to resolve disputes in sectors beyond construction and natural resources, including post-M&A and finance disputes. The Stockholm Chamber of Commerce identified post-M&A disputes as its largest case category in 2023–24, while SIAC reported a 24 per cent year-on-year rise in corporate disputes. Banking and finance now consistently rank among the top two case types before the LCIA, and finance matters made up 15.4 per cent of the Australian Centre for International Commercial Arbitration’s 2024 caseload. In response, institutions are tailoring fast-track rules and emergency arbitrator provisions to meet market expectations for speed and enforceability.
Trade turbulence and supply-chain stress also play a critical role. Geopolitical tension, sanctions, and the weaponisation of trade measures have ended the Asia-Pacific’s two-decade period of relative calm. As a result, disputes over force majeure, price revision, and supply chain disruption are proliferating in sectors like steel, batteries, renewables, and agri-commodities. In response, companies are embedding escalation clauses that combine negotiation, mediation, and arbitration, thereby ensuring international enforceability of awards if relationships deteriorate.
A further development is the emergence of ventures in uncharted territory. The pursuit of critical minerals and the race to commercialise space and the deep seabed involve operations that extend beyond clear sovereign control, where court jurisdiction is uncertain. In these contexts, arbitration’s flexibility, the autonomy it offers parties in procedural design, and the ability of specialised decision-makers make it the preferred forum for resolving disputes arising from such frontier projects.
These global currents are not abstract. Australian businesses are already encountering them – and paying for outdated “midnight” arbitration clauses that fail to deliver the procedure that meets parties’ expectations and produces a speedy and enforceable result. Corrs’ recent Guide to Drafting Arbitration Clauses catalogues the costs of getting it wrong: satellite litigation over the seat, tribunal constitution and enforceability can drain millions and derail commercial objectives.
To keep pace with these developments, it is important for Australian parties to treat dispute-resolution strategy as a front-end issue rather than an afterthought. Arbitration should be adopted as the presumptive mechanism for cross-border transactions, complex projects, and collaborations in highly regulated or emerging sectors. Parties should draft bespoke clauses that identify a credible arbitral institution – such as ACICA, SIAC, ICC, or LCIA – specify the seat and governing law, and ensure alignment with any escalation or expert-determination processes.
Australia is already recognised internationally as a pro-arbitration jurisdiction, with modern legislation, a supportive judiciary and first-class hearing facilities. By aligning dispute resolution practice with global trends, Australian businesses can safeguard investments, preserve confidentiality, and ensure that when disputes arise, they are resolved in a forum that is well-suited to the demands of an increasingly fast-paced transnational commerce.
Corrs Chambers Westgarth head of arbitration Nastasja Suhadolnik.
