The Australian Centre for Commercial International Arbitration (ACICA), the Institute of Arbitrators & Mediators Australia (IAMA) and the Chartered Institute of Arbitrators Australia (CIArb) have signed a memorandum of co-operation in which they plan to promote the use and education of arbitration in the Asia-Pacific region.

The agreement was struck following amendments to the International Arbitration Act 1974 (Cth) introduced into Parliament by Attorney General, the Hon Robert McClelland.

Australian Centre for Commercial International Arbitration president Douglas Jones told The New Lawyer the reform is long overdue. 

He said new legislation would encourage both Australian and non-Australian parties to have their international arbitrations held in Australia. 

"We as a country have got significant advantages I think, with a well developed legal system and very competent practitioners to take advantage of that," he said. 

"Arbitration is a multi-billion industry in other places - in SIngapore, Hong Kong, London, all of them see that it adds huge value to the local economy in a range of areas," said Jones. 

The global financial crisis has seen an increase of commercial disputes but because

international investors want to avoid the uncertainty of litigation in a foreign court

system, the ACICA said.

It said litigation often presents excessive time and costs, the lack of familiarity with foreign court procedures, language barriers, a lack of confidentiality and a fear that some countries may lack an impartial judiciary.

A PricewaterhouseCoopers survey in 2008 revealed 73 per cent of corporations prefer to use international arbitration to resolve their cross-border disputes rather than transnational litigation and saw arbitration as a means to successfully preserve business relationships.

"It offers flexibility, enforceability and cost efficiency for parties in dispute," said Jones.

"The anticipated increase of international arbitrations in Australia will provide considerable financial benefits to the Australian economy."

Jones, who is also a partner at Clayton Utz, said law firms are investing in the venture because "they see it as providing huge opportunity to build local practices in this area, as our colleagues in London and other places have done over the year. It's a huge opportunity for lawyers".

IAMA President and former High Court Judge, the Hon Michael Kirby AC CMG said: “It will be a service that Australia can give that is useful to our neighbours and countries further afield” , noting also it could eventually be as lucrative to Australia as the country’s third-biggest export industry, international education