EXPLANATORY STATEMENT
Subject - International Arbitration Act 1974
International Arbitration Regulations 2011
The International Arbitration Act 1974 (the Act) gives the force of law to the United Nations Commission on International Trade Law Model Law on International Commercial Arbitration (‘the Model Law’) as the law governing the conduct of international commercial arbitrations in Australia.
Section 40 of the Act provides that the Governor‑General may make regulations prescribing matters required or permitted by the Act to be prescribed or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Section 18 of the Act provides that the Governor-General may prescribe a court or other authority as having been specified in Article 6 of the Model Law as an authority competent to perform the functions referred to in Articles 11(3) and (4) of the Model Law.
The purpose of the proposed Regulations is to prescribe the Australian Centre for International Commercial Arbitration (ACICA) as the sole competent authority to perform the functions set out in Articles 11(3) and 11(4) of the Model Law. ACICA is a national peak body for international commercial arbitrators in Australia.
Article 11(3) of the Model Law sets out a default procedure for the appointment of an arbitrator or arbitrators where the parties have not agreed on an appointment process between themselves. Where this default procedure breaks down, a competent authority specified in Article 6 may be called upon to make the necessary appointment or appointments.
Article 11(4) of the Model Law applies where the parties have agreed on a procedure for the appointment of an arbitrator or arbitrators between themselves but this procedure has broken down. Where this occurs, Article 11(4) provides for a competent authority specified in Article 6 to make the necessary appointment or appointments.
Prior to the enactment of the International Arbitration Amendment Act 2010 (the Amendment Act), these functions were performed exclusively by the courts. The Amendment Act amended section 18 of the Act to allow for the appointment of bodies other than the courts to perform these functions either alongside or in substitution for the courts. This is appropriate given that industry bodies may have more direct knowledge of who would be an appropriate arbitrator or arbitrators to resolve a particular dispute. The process for reform of the Act was the subject of an extensive consultation process involving public submissions.
The Act does not specify any conditions that need to be satisfied before the power to make the proposed Regulations may be exercised.
The proposed Regulations would be a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The proposed Regulations would commence on the day after they are registered on the Federal Register of Legislative Instruments.
The Minute recommends that Regulations be made in the form proposed.
Authority: Section 40 of the International Arbitration Act 1974