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arbitration definition

- Arbitration is a process by which parties consensually submit a dispute to a non-governmental decision maker selected by or for the parties, to render a binding decision resolving a dispute in accordance with neutral, adjudicatory procedures affording each party an opportunity to present its case.


elements of arbitration

- Elements
○ Consent
○ Independent, non-governmental decision makers selected by the parties.
§ The dispute isn't decided by state courts
§ Dispute is resolved by arbitrators.
○ Final and binding
§ Cant then go to court if you're unhappy with the result.
§ Arbitral awards are more binding than awards because of the New York principle.
○ Adjudicatory process
§ Almost no recourse is available to the loosing party.
Appeal is rarely successful.


international arbitration

- International
○ UNCITRAL model on international commercial arbitration article 1(3).
○ State is known as a nation state (i.e. country).
○ Can be international if the businesses are in the same state but the arbitration cause is to be in a different arbitration state.


commercial arbitration

○ UNCITRAL model law on international commercial arbitration article 1(1).
"the term commercial should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not.".



- UNCITRAL is handled by the UN.
UNCITRAL specialises in the modernisation and harmonisation of international business and commercial law to foster increased opportunities to international trade.
Why the UN? Trade can lead to economic growth, higher living standard increased harmony and contribute to world peace.


arbitration and neutrality

- Neutrality
○ As commercial businesses are often governed by multiple systems of law, it is preferred that a neutral law can be chosen.


arbitration and choice of law

- Centralised decisions on jurisdiction and choice of law
○ This law can be any law.
○ Parties can select the substantive and arbitral law to resolve their dispute.
○ The procedure can be changed to suit the dispute.
§ Can tailor the number of arbiters and the process to the dispute at hand.
§ Allows for fast tracked procedures, which is unavailable I the court system.
§ Can agree to what is disclosed to the other party.


other aspects of arbitration

- Enforceability
- Expertise of decision makers
- Finality of the award
- Flexibility of procedure- including confidentiality.


the NY convention

- The pro-enforcement regime of the NY Convention is one of the most highly valued attributes of international commercial arbitration.
○ 157 nation state signatories.
○ If both countries are signatories, the award needs to be enforced.
○ Almost every nation state that trades with Australia is a signatory.
○ Litigation often requires litigation to be made in both jurisdictions.
§ If there is no international conventions or reciprocal arrangements.
§ Need to make an application to the other court to ensure that it is applicable.
§ Therefore, arbitration is easier due to the NY convention.
§ This has significant litigation court risk.


arbitration agreements

- The basis of commercial arbitration is consent.
○ There is no jurisdiction unless there is consent.
○ Consent is usually found in the arbitration agreement.
- Consent is one of the three critical elements that must be present in an arbitration agreement.
○ Consent
○ Scope of disputes to be referred to arbitration
○ Finality of the award.
- Arbitration agreement triggers the operation of a legal framework comprised of
○ International conventions
○ State courts applying state law
○ Procedural rules
○ Soft law - best practice in arbitration


arbitration and party autonomy

- There is no code of civil procedure in international commercial arbitration.
- Party autonomy: the parties can agree to procedural rules that suit them.
- The parties choice of procedural rules tends to be closely related to their choice between institutional arbitration or ad hoc arbitration.
○ Each institution has its own model clause.


arbitration and procedure

- The procedural law of the arbitration is the lex arbitri.
- Party autonomy in international commercial arbitration enables the parties to agree to the terms upon which they arbitrate.
- It is advised that party autonomy should be exercised to select:
○ The choice of substantive law.
○ The arbitral law of the 'seat' governs all the procedural legal issues arising in the arbitration. The arbitral law of the seat is called the lex arbitri. The seat is the jurisdiction of the arbitration. It is not the physical venue where the arbitration is held.
○ The procedure to be used in the arbitration.
§ Identification of institutional rules
§ The number of arbitrators and how they will be appointed (usually 1 or 3)
§ The language of the arbitration.


legal framework of arbitration agreements

- Where the parties demonstrate their consent to final and binding arbitration of disputes.
- One of the most fundamental doctrines of international commercial arbitration is party autonomy. This gives the parties freedom to choose:
○ The seat
○ The substantive law
The procedure of the arbitration (e.g. the language and number of arbitrators).


international conventions

- NY convention is the most important.
- Panama Convention : some of America
- Geneva Convention: European states
- All signatories of panama and Geneva are signatories of the NY convention.


two main features of the NY convention

- NY convention is twofold
○ All contracting states must recognise and enforce international arbitration agreements (article II).
○ All contracting states must recognise and enforce arbitral awards (article III).
○ Both requirements are necessary.


NY convention and australia

- When using the convention Australia, as a dualist state, must;
○ Sign the terms of the convention
○ Introduce an act into parliament bringing the terms of that convention into domestic law.


state arbitration laws

- The UNCITRAL model law is adopted by 72 states.
- The UNCITRAL Model Law has force of law in Australia by virtue of International Arbitration Act 1974 (Cth), s 16.
- If Australia is selected as the lex arbitri, the arbitration act stipulates that the UNCITRAL model law is to be used.


model law

- Model law is set out in International Arbitration Act 1974 (Cth), ss 2D, part III, sch 2.
- The model law brings all of the fundamental principles of international commercial arbitration into the domestic law of adopting states.


the seat

The choice of the seat only chooses the procedural law not substantive law.


arbitrability in australia

- Criminal law matters are not arbitrable in Australia.
- The Aus court, if the seat, may set aside the award if they subject matter of the dispute is not arbitrable.
- If the award was made abroad, the Aus court may refuse recognition and enforcement if the subject matter o the dispute is not arbitrable in Australia.
○ This can be refused if it offends public policy.
○ E.g. an award made where ther parties were not afforded natural justice would be contrary to public policy.
§ Could be if arbitrators were bribed etc.


procedural rules

- Form part of the legal framework that govern the arbitrations.
- Soft law can also be bought into the agreement.
○ UNCITRAL notes on organising arbitral proceedings
○ Etc.