Arbitrationpractitioners applauded last year's agreement by the Standing Committee of theAttorneys-General (SCAG) to introduce new domestic uniform commercialarbitration legislation based on the UNCITRAL Model Law.  Since then, the slow and uneven natureof its introduction across Australia has delayed the delivery of the benefits itpromised.

After NSW bolted tothe front last year by introducing the Commercial Arbitration Act 2010 (new CAA),which came into force on 1 October 2010, introduction throughout the rest ofthe country has been slow. Only Tasmania followed to do likewise. But in thelast few weeks there have been positive signs that the introduction of the newuniform Commercial Arbitration Act is starting to gather momentum. This monththe Attorneys-General in South Australia and the Northern Territory have both introducedbills and the Victorian Attorney-General has announced a bill for Victoria. Unfortunatelythere is still no word in Queensland, Western Australia and the ACT.

In April SCAGannounced a review into section 27D of the new CAA - an initiative that practitionersare hoping will not be used as a reason to delay the implementation of the uniformlegislation.   

Section 27D allowsan arbitrator to act as a mediator with certain safeguards.  While the SCAG discussion paper raisesvalid concerns in relation to this practice, it is not the main game. Section27D is a provision that is likely to be little used, given the potentialdangers of a party using the dual consent process in the legislation forstrategic reasons to derail an arbitration, not to mention the costconsequences of this. It would be disappointing to see such a minor issue delaythe introduction of the new CAA across all jurisdictions. 

Once in place, thenew arbitration act will offer a regime that is globally recognised andaccepted. The UNCITRAL Model Law has been introduced in more than 60 countriesand has influenced the legislation in many others. It will create more consistencyin the treatment of domestic and international arbitrations in Australia, aswell as clearly delineating what is a domestic or international arbitration.   

The new CAA has asits paramount object the fair and final resolution of commercial disputeswithout unnecessary delay or expense. It also offers parties the advantage ofextensive confidentiality provisions that will keep disputes private andconfidential. The new Act gives greater power to arbitrators thus reducing theneed for parties to make applications to the court and hopefully makingdisputes quicker to resolve. By removing the automatic right to apply for leaveto appeal and setting a high threshold for an award to be set aside, the newCAA will provide parties with much greater certainty as to the finality of arbitrationin settling disputes.

These benefits willnot be fully realised until the uniform legislation is in effect acrossAustralia.  Once in place, the realchallenge begins for practitioners and their clients to use arbitrationcreatively and effectively to deliver better resolution of commercial disputes.

By Amanda Lees, SeniorAssociate, Blake Dawson