International Commercial Law: Arbitration in Australia Analysis

This report provides an overview of international commercial arbitration in Australia. It begins by outlining the relevant legislation governing arbitration, emphasizing the importance of mutual consent and the role of the government in resolving disputes. The report then details the advantages of arbitration in Australia, such as privacy, the benefits of the New York Convention, and the ability to select the arbitration procedure. It also explores the disadvantages, including potential issues with arbitrator competency and the complexities of varying state laws. Furthermore, the report analyzes the costs associated with resolving international commercial disputes, including arbitrator fees, costs for obtaining court documents, and transaction costs. The report references key legal acts and conventions, offering a comprehensive analysis of the landscape of international commercial arbitration in Australia.

International Commercial Law
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Table of Contents
Legislations on Arbitration in Australia..........................................................................................3
Advantages of Arbitrary in Australia..............................................................................................3
Disadvantages of Arbitrary in Australia..........................................................................................4
Costs of Resolving International Commercial Disputes..................................................................5
References........................................................................................................................................7
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Legislations on Arbitration in Australia
Australia has its own set of commercial legislation, which is associated with a preamble. Based
on this legislation, resolutions on disputes are resolved by the government. In arbitrary cases of
international commercial disputes, the legislation preamble of Australia states that ‘’Recognizing
that mutual consent by the country to submit such disputes to conciliation or to arbitration
through such facilities constitutes a binding agreement which requires in particular that due
consideration be given to any recommendation of conciliators and that any arbitral award be
complied with; and Declaring that no Contracting State shall by the mere fact of its ratification,
acceptance or approval of this Convention and without its consent be deemed to be under any
obligation to submit any particular dispute to conciliation or arbitration”1.
Advantages of Arbitrary in Australia
In arbitrary cases of international commercial disputes between the two countries in Australia,
Section 1 Establishment and Organization states that the country can experience benefits only
after a judgment is made with respect to resolution. One of the advantages is related to the
privacy of information of the parties. Information, which is passed on to develop a resolution
remains confidential from the opposing country or countries and the public as well. At present,
an addition of the New York convention of legislation along with the ruling has been an
additional benefit exercised by the arbitrator. The states in the country get a chance to experience
about the requirements in guarding the order of international commercial legislation. Based on
this, they get a chance for developing measures so that they do not go through the same problem
in future. Mandatory rules of ‘lex contractus’ under the arbitrary cases in international
commercial disputes favors the two opposing countries, as their expectations in ensuring justice
1 CIL, ‘1965 Convention on the settlement of investment disputes between states and nationals of other states’,
(2010), Centre for International Law, 1-24.
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is actually practiced through this rule. In case a party being uneducated or unfamiliar with this
rules, are required to make sure that they know about the mandatory rules. Thus, efforts are made
in order to ensure that they understand the mandatory rules completely2;3;4. The two countries
also have an advantage in selecting the procedure of arbitration, decisions or judgments, as they
take less time. In addition, they can also ask for more arbitraries in case if they feel insecure
about wrong judgment by the court5.
Beside this, a major benefit of avoiding criticism between the two countries is exercised so that
they can agree to settle the ongoing disputes. Resolution with respect to arbitration is made from
the perspectives of both the country by informing the arbitrators about the facts relating to the
disputes between the two countries6;7.The section 34(a) of the International Arbitration Act 1974
involves these judgments with respect to the two countries so that they experience justice8.
Disadvantages of Arbitrary in Australia
Arbitration process can face several disadvantages while two countries are on disputes during at
the time of judgment made by the court of Australia under the International Arbitration Act 1974
(Cth) and the Australian Commercial Arbitration Acts include formalism of the arbitrators. The
two opposing countries may suffer due to the lack of knowledge, competency, and decisive
approach with respect to the arbitrators in the country. Informal procedures are usually initiated
2Robert French, ‘International Commercial Dispute Resolution and the Place of Judicial Power’, (2013),
International Commercial Law and Arbitration Conference, 1-17.
3 Barraclough, Andrew & Waincymer, Jeff, ‘Mandatory Rules of Law in International Commercial Arbitration’,
(2007) Melbourne Journal of International Law, 1-40.
4 CIL, ‘1965 Convention on the settlement of investment disputes between states and nationals of other states’,
(2010), Centre for International Law, 1-24.
5 Thompson Reuters, ‘Introduction to International Commercial Arbitration’, (2011), Chapter 1, 1-28.
6 Robert French, ‘International Commercial Dispute Resolution and the Place of Judicial Power’, (2013),
International Commercial Law and Arbitration Conference, 1-17.
7 Barraclough, Andrew & Waincymer, Jeff, ‘Mandatory Rules of Law in International Commercial Arbitration’,
(2007) Melbourne Journal of International Law, 1-40.
8 ComLaw Authoritative Act, ‘Foreign Judgments Act 1991’, (2012). Act No. 112 of 1991 as amended, 1-31.
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by these types of arbitrators in the country. Thus, this may lead to creating problems in the
judgment made by the Supreme Court9. One of the major issues faced by the countries during the
judgment of commercial disputes by the Supreme Court of Australia is the change in legislation
as per the state. Contextually, different states have varied set of rules and making judgment can
be problematic if viewed in terms of geographical aspect. In some cases, jurisdictions of the
courts may not be possible, as several states do not consider this under their legislation10. Other
than these disadvantages, a country usually has to experience a whole set of new laws,
regulations, new or foreign court systems, language, and legal procedures. A problem is created,
which can take a long time to be resolved. This will largely increase the costs of the arbitration
process. This includes paying arbitrators for their legal services. When these occur, a country or
a party lacks strength in defending themselves in their case. Since the judgments by the courts of
Australia are made publicly, a company can incur major business loss after being exposed as a
guilty party to the public11.
Costs of Resolving International Commercial Disputes
As per the Foreign Judgments Act, 1991 of Australia, the rules of the court states that every
provision carried out on resolving the commercial disputes between two countries depends on
the person or the arbitrator for applying or registering the process of judgment. The model
implemented or approached by the registered arbitrator varies along with its cost for the country.
In terms of cost, the time period is of utmost importance because the arbitrator charges a fee until
till the issue is settled. The costs for a country also depends on the judgment made by the
Australian Supreme Court, as it may be possible that losing party will have to pay a large sum of
9 Michael Kirby, ‘Alternative Dispute Resolution – A Hard-Nosed View of its Strengths and Limitations,’
(2009)The Institute of Arbitrators & Mediators Australia South Australian Chapter, 1-19.
10 Thompson Reuters, ‘Introduction to International Commercial Arbitration’, (2011), Chapter 1, 1-28.
11 Clayton Utz, ‘A Guide to International Arbitration’, (2012) Introduction to International Arbitration, 1-33.
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money in return if they are found guilty. Thus, a reasonable cost is paid while registering the
arbitrator during the case of commercial disputes. Apart from these, the two parties need to pay
the price for obtaining the certified copy of the judgment made by the Supreme Court of
Australia as well as price in obtaining the evidence from the foreign exchange affairs. This is to
be considered in terms of Australian Dollar currency12.
Besides, the transactions cost, which needs to be paid by the country completely depends on the
negotiation until final judgment is made. In some cases, international commercial disputes may
observe to be serious. Thus, during these phases, these types of cases are directly handed over to
the Australian High Courts. The costs generally multiply for the country or party than that of
which they were paying while the case was in the hands of the Supreme Court. This indicates
that they will have to pay a higher amount as compared to the past13.
12 ComLaw Authoritative Act, ‘Foreign Judgments Act 1991’, (2012). Act No. 112 of 1991 as amended, 1-31.
13Richard Garnett & Luke Nottage, ‘What Law Applies to International Commercial Arbitration in Australia?’,
(2017) UNSW Law Journal, vol. 35, no. 3, pp 1-26.
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References
Barraclough, Andrew & Waincymer, Jeff, ‘Mandatory Rules of Law in International
Commercial Arbitration’, (2007) Melbourne Journal of International Law, 1-40.
CIL, ‘1965 Convention on the settlement of investment disputes between states and nationals of
other states’, (2010), Centre for International Law, 1-24.
Clayton Utz, ‘A Guide to International Arbitration’, (2012) Introduction to International
Arbitration, 1-33.
ComLaw Authoritative Act, ‘Foreign Judgments Act 1991’, (2012). Act No. 112 of 1991 as
amended, 1-31.
Michael Kirby, ‘Alternative Dispute Resolution – A Hard-Nosed View of its Strengths and
Limitations,’ (2009) The Institute of Arbitrators & Mediators Australia South Australian
Chapter, 1-19.
Richard Garnett & Luke Nottage, ‘What Law Applies to International Commercial Arbitration in
Australia?’, (2017) UNSW Law Journal, vol. 35, no. 3, pp 1-26.
Robert French, ‘International Commercial Dispute Resolution and the Place of Judicial Power’,
(2013), International Commercial Law and Arbitration Conference, 1-17.
Thompson Reuters, ‘Introduction to International Commercial Arbitration’, (2011), Chapter 1, 1-
28.
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