Lack of ‘Australian law’ a barrier to arbitration
The federal nature of Australia’s legal systems may deter organisations from hosting their international arbitrations in Australia.
Chief Justice James Allsop of the Federal Court, speaking at an event celebrating the centenary of the Chartered Institute of Arbitrators (CIArb), praised the country as an arbitration platform but pointed to its fragmented system as a potential obstacle.
Under international arbitration agreements, companies can nominate the jurisdiction and law which will apply to their transaction.
CIArb national councillor and barrister Stephen Lee said the Chief Justice warned that companies may hesitate to choose Australia because they cannot adopt “Australian law”.
“This is not only because we have states, but also because parties' rights could fall to be governed by a combination of state and federal law,” Dr Lee said.
In reality, the High Court of Australia creates uniformity between states by acting as a final court of appeal, he suggested. However, this uniformity may not be obvious to non-Australian organisations.
“We realise as lawyers that because of the High Court's role, the different jurisdictions are practically the same in the law they apply, subject to statutory amendments which are, on the whole, fairly minor,” Dr Lee said.
“But it's all about perception, and the international marketplace may not understand that degree of subtlety.”
By contrast, Australia’s closest competitors for arbitrations tend to have a single jurisdiction.
“Unitary systems such as Singapore do not have this problem,” Dr Lee said. “So the issue raised by the Chief Justice comes down to how can we make the choice to arbitrate in Australia under our law as uncomplicated as possible for parties negotiating arbitration agreements.”
In addition, Dr Lee urged Australian lawyers to recognise the opportunity presented by the arbitration market.
“It's the preferred method of dispute resolution in transnational disputes and we need to communicate our skills in that area better than we are.”
He agreed with the view, espoused by Chief Justice Allsop and Chief Justice Robert French of the High Court, that Australia offered an attractive prospect for arbitrations.
“We're seen as a neutral venue and we have a solid platform for arbitration as we have very good commercial judges.”
The CIArb Centenary celebration in Brisbane, hosted by Corrs Chambers Westgarth, attracted more than 100 attendees, including Dr Lee (pictured below left), Chief Justice Allsop (pictured below centre) and Justice Dowsett of the Federal Court (pictured below right).