ACT Arbitration and the Commercial Arbitration Act 1986
By Michelle Janczarski, Lovegrove & Cotton.
Building disputes in ACT may not necessarily be resolved through a court or tribunal. Instead, the resolution of building disputes is governed by the terms of the building contract, which will frequently refer the dispute to arbitration. Further consideration of this process is available here.
Arbitration in the ACT is governed by the Commercial Arbitration Act 1986 (“the CAA”).
Arbitration procedure under the Commercial Arbitration Act
Arbitration under the CAA differs from litigation in a court or tribunal in many respects.
For example, under section 14 of the CAA, arbitrators may conduct arbitrations in such manner as the arbitrator sees fit, subject only to the CAA and the arbitration agreement signed by the parties. This clearly confers a broad discretion on the arbitrator in the conduct of the resolution of the dispute.
Section 22(1) does impose a constraint, in that the arbitrator must determine any question that arises during the arbitration according to law. However, the parties can agree to “opt out” of this provision and consent to the arbitrator conducting the arbitration in accordance with principles of general justice and fairness. Again, this gives arbitrators a very broad power to act as they see fit.
Additionally, the CAA does not prescribe many standard procedural steps found in litigation, such as discovery. Instead, section 19(3) of the CAA states that, unless the parties agree otherwise, the arbitrator is not bound by rules of evidence but may inform himself or herself in such manner as the arbitrator thinks fit. This may reduce a party’s ability to compel discovery from each other and places a broad discretion in the hands of the arbitrator.
Commercial arbitration in Australia is currently moving towards a uniform statutory regime. In May 2009, the Standing Committee of Attorneys-General agreed upon new uniform legislation to govern arbitration, based upon the UNCITRAL Model Law on International Commercial Arbitration.
To date, every State and Territory except for the ACT has enacted the uniform legislation or introduced it into Parliament as a Bill. The uniform legislation differs from the CAA in a number of ways.
For example, the uniform legislation will introduce a statutory duty of confidence, to the effect that the parties and arbitrator cannot disclose any confidential information, unless the parties agree to “opt out” of the duty or the Act provides otherwise. This will remove any doubt as to the private nature of arbitration.
Additionally, the uniform legislation reduces the grounds on which a court can set aside decisions (or “awards”) made by the arbitrator. Notably, a court can no longer overturn an award on the grounds that it contains a ‘manifest error of law’, unless both parties agree to such an appeal and the court grants leave. This change is intended to remove any requirement for arbitrators to act like judges, and give arbitrators greater flexibility to make decisions based on general principles of fairness. It will also make it easier for non-legally qualified arbitrators to act as arbitrators.
The parties will also have a greater opportunity to pursue other forms of dispute resolution under the uniform legislation, which will allow the arbitrator to act as a mediator or conciliator if both parties give consent.
It appears that this uniform legislation will promote increased certainty in the conduct Australian arbitrations. However, it remains to be seen how this legislative framework will be given effect in different states and territories, and when it will finally be implemented in the ACT.