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20 May 13
Arbitration alert - new Act comes into law

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The Commercial Arbitration Bill 2013 (Qld) was assented to on 14 March 2013 and came into force on 17 May 2013.

Over the last twenty years there has been significant criticism of Australia’s domestic arbitration regime.  Arbitration under the Commercial Arbitration Act 1990 (Qld) and its equivalent legislation in other states was seen as mimicking drawn out and costly court litigation.  A further complication was that the arbitral process was subject to judicial intervention.  As a consequence, arbitration in Australia was left in a state of malaise.

Through the adoption of the UNCITRAL Model Law, the new legislation will bring Queensland in line with world’s best practice and harmonises Australia’s domestic and international arbitration regimes.  The Australian Capital Territory will be the last jurisdiction remaining to bring its Act into line with the new regime.

The paramount object of the new Act is to facilitate the fair and final resolution of commercial disputes without unnecessary delay or expense.  Arbitrators are given substantial powers to ensure that this objective is met.

The new Act also provides a real opportunity for arbitration to become a legitimate and effective means of dispute resolution, particularly for those operating in the resources and infrastructure industries.  The Act provides owners and contractors with a powerful alternative to the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA).  BCIPA does not permit breach of contract claims or damages claims, nor the recovery of positive amounts by respondents.  Unlike adjudication under BCIPA, arbitration also allows for evidence to be properly tested and it is not constrained by strict time limits.  The new Commercial Arbitration Act provides respondents to an adjudication application with an ability to claw back any monies that have been paid on an interim basis under BCIPA.

Arbitration clauses need to be drafted with precision.  In particular, care needs to be taken to ensure that the place of arbitration is designated.

Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.

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