Address to the Australian Maritime and Transport Arbitration Commission (AMTAC)

Sydney

1 July 2010

First, may I acknowledge the traditional owners of the land we meet on – and pay my respects to their elders, both past and present.

It is a pleasure to deliver the annual Australian Maritime and Transport Arbitration Commission address. Your conference comes at an exciting time for the arbitration profession, with a number of reforms aimed at making Australia an international leader in the field.

Today I would like to discuss these developments and their relevance to maritime and transport arbitration within the region.

Australia is an island nation whose economy depends on sea trade. Further, we are a nation in a region which is full of shipping nations and major sea routes. The Straits of Malacca are the main shipping channel and shortest trade route between the Indian Ocean and the South China Sea, one of the most important shipping lanes in the world. The Indian Ocean contains major sea routes connecting the Asia Pacific region with Europe, Africa and the Americas.

Australia uses the sea to transport 99 per cent of our exports. Consequently, when maritime disputes arise, they have the potential to adversely impact our national economic wellbeing. 

Given our geography and experience as a sea trading nation, Australia enjoys a natural advantage as a venue for resolving international maritime disputes. That advantage extends to our arbitrators and other legal professionals. We have the advantage that the Australian legal profession is highly regarded internationally.  Additionally, the number and expertise of maritime arbitration practitioners is testament to the fact that Australia is a key centre of expertise in maritime law.
 
However, I think it is fair to say that Australia is yet to turn these natural advantages into commercial advantages. The Government has pursued a number of reforms aimed at exploiting our advantages. In addition to reforms at the industry level to encourage commercial players to resolve commercial disputes through arbitration, we have also focussed on reforms to Australia’s international arbitration regime.

These reforms are underpinned by two key arguments. First, international arbitration is typically the most effective way for businesses to resolve cross-border disputes. A vibrant international arbitration culture is an essential tool for Australian business in the modern, global economy. Secondly, promoting the international dispute resolution industry here in Australia benefits not only lawyers and arbitrators, but also the economy in general.

The value of the international arbitration industry is demonstrated by the success of regional commercial arbitration centres in Hong Kong and Singapore - which heard around 700 disputes between them last year.

The centrepiece of the Government’s reforms is the International Arbitration Amendment Bill which was passed by Parliament earlier this month. The Bill amends the International Arbitration Act 1974 to:

As I have outlined, the Bill includes new interpretation provisions which provide greater guidance to the courts in exercising powers and functions under the Act and in interpreting provisions. Amongst other things, these provisions encourage the courts to bring certainty and finality to the resolution of international disputes. In effect this means they should only rarely interfere with arbitral proceedings and awards and even then, only with considerable circumspection.

The Bill also clarifies the circumstances in which the courts can refuse to recognise and enforce foreign awards. These provisions are intended to emphasise the importance of speed, fairness and cost-effectiveness in international arbitration. While at the same time, clearly defining and limiting the role of the courts in international arbitration without compromising the important protective function they undertake.

These reforms will strengthen the use of Alternative Dispute Resolution and equip Australian arbitrators and mediators to resolve commercial disputes efficiently and effectively.

State and Territory Arbitration Reforms

In May this year, States and Territories also agreed to adopt new uniform national laws on domestic arbitration based on the United Nations Commission on International Trade Law Model Law. Once implemented, this will mean that Australia will have a harmonised system of international and domestic arbitration. This will almost certainly increase our attractiveness to international customers and establish Australia as a global leader in the arbitration field.

However, before we can offer ourselves as the place to resolve international maritime disputes, I believe that Australia needs to create and promote a local arbitration culture to establish itself as a better alternative to existing locations. AMTAC has an important role to play in promoting Australia as an attractive venue to resolve international and domestic maritime and transport disputes. I would also particularly like to acknowledge the role of Justice James Allsop and Peter McQueen in establishing AMTAC.

Through their guidance, it is already pursuing a number of commendable initiatives including, for example, its model dispute resolution clause referring parties to mediation or arbitration and the AMTAC ‘Rocket Docket’. The Rocket Docket service, which guarantees a Final Award determination within 3 months of the commencement of arbitration proceedings, is yet another way to positively differentiate arbitration and mediation from often long and costly court processes. 

The Australian International Disputes Centre

In addition to reforms of Australia’s legal framework, we also need the facilities to accommodate these disputes.

Earlier this year, in conjunction with the New South Wales Attorney-General, John Hatzistergos, I announced the creation of the new Australian International Disputes Centre. This has been established as a partnership between the Commonwealth and New South Wales Governments, the Australian Commercial Disputes Centre, and the Australian Centre for International Commercial Arbitration.

The Centre - which is due to formally open in the near future - will be equipped with state of the art dispute resolution facilities. Together with the depth of arbitration expertise and support services already here in Australia, the Centre will make Sydney a key regional centre for international arbitration.

It is a first step – but an important first step in developing our international mediation and commercial arbitration infrastructure.

Australian Brand of Arbitration

It is my hope that together, the measures I have described will spark cultural reform in Australian arbitration.  Australia has the potential to become a leader in international arbitration, but only if we can promote a truly cutting-edge and internationalised model.

Creating a system that does away with unnecessary formalities and get on with identifying and solving the real dispute in issue.  A system that ensures that arbitration delivers swift and cost-competitive outcomes.

In short, the Australian brand of arbitration means we need to become known as the place to come to when you want your problem fixed fast and fairly. The promotion of this uniquely Australian brand will allow the undoubted talents and reputation that exist in the arbitration community to flourish.

I know I am likely preaching to the converted that before Australia can best present ourselves as the place to resolve international maritime disputes, we need to create and promote a local maritime and transport arbitration culture. This will help to establish ourselves as a better alternative to existing locations.

Fostering local maritime arbitration means that maritime disputes will no longer need to be resolved at great cost and in the quasi-judicial fora of the traditional seats of maritime arbitration - New York and London. 

In that context, AMTAC has an important role to play in promoting Australia as an attractive venue to resolve both international and domestic maritime and transport disputes.

Thank you.