The Civil Law & Justice Bill 2015 received approval earlier in October of this year, making vital amendments to the International Arbitration Act 1974 while simultaneously boosting Australia’s standing as a pro-arbitration nation.
The confidentiality afforded international arbitrations taking place in Australia was previously granted on an opt-in basis under Sections 23G-C of the Act. So the arbitral proceedings of those parties who chose not to opt-in were private, however, they were not confidential.
A presumption in favour of confidentiality with the former provisions carried out on an opt-out basis will now be the norm thanks to the recent Bill amendments.
Before the amendments, Section 8(5) allowed a party to contest enforcement based on not having legal capacity at the time both parties entered into the agreement. The amendments have now fleshed-out Section 8(5) and brought it in line with the uniform State domestic arbitration legislation and the UNCITRAL Model Law.
A party is now allowed to oppose enforcement based on any other party involved in the arbitration agreement not having legal capacity when the agreement was settled, broadening the scope to consider all parties involved, not just the party fighting enforcement.
A Section 21 amendment which was passed separately, earlier in August this year, fixed what some law experts have dubbed a ‘legislative black hole’. Section 21 of the Act stipulates if the UNCITRAL Model Law pertains to an arbitration case then no Territory, or State arbitral law applies.
Prior to July 6th, 2010, parties were able to opt-out of the UNCITRAL Model Law provided in the Act in favour of a Territory, or State arbitral law. This black hole emerged due to Section 21 omitting whether it applied retrospectively, as well as prospectively.
The problem which arises is that if we follow this scenario through to its logical conclusion then it’s clear a party may inadvertently end up nominating an arbitral law which ceases to exist as the prior Territory & State arbitral laws have been increasingly revoked since July 6th, 2010.
This confusion within the Act has been cleared up. Now Section 21 functions prospectively only, applying to any arbitration proceeding initiated after July 6th, 2010.