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COMMERCIAL ARBITRATION (AMENDMENT) BILL 1990
NEW SOUTH WALES
EXPLANATORY NOTE
(This Explanatory Note relates to this Bill as introduced into Parliament)
The Commercial Arbitration Act 1984 was enacted, following agreement of the
Standing Committee of Attorneys-General, as part of a series of substantially
uniform laws of the States 'and Territories dealing with the arbitration of disputes.
The substance of this Bill has also been approved by the Standing Committee of
Attorneys General, and corresponding legislation is expected to be enacted in the
other States and Territories.
The object of the Bill is to amend the Commercial Arbitration Act 1984 by
making:
(a) a series of substantive amendments to the Act, which are set out in Schedule
1 to the Bill, dealing with
* the conduct of arbitration proceedings;
* the representation of parties;
* the consolidation of proceedings;
* the use of mediation, conciliation or similar means of settlement;
* the awarding of costs;
* the judicial review of awards;
* the prevention of delay in prosecuting claims;
* the repeal of provisions dealing with the recognition and enforcement
of foreign awards and agreements;
* the rule-making powers of certain courts; and
(b) a series of minor amendments to the Act, which are set out in Schedule 2
to the Bill, for the purpose of achieving uniformity of expression with the
corresponding legislation of the other States and Territories.
Clause 2 provides that the proposed Act is to commence on a day or days to be
appointed by proclamation.
Clauses 3 and 4 are formal provisions that give effect to the Schedules of
amendments to the Commercial Arbitration Act 1984.
Clause 5 contains savings and transitional provisions.
Definition (section 4)
Schedule 1
(1) makes it clear that
a reference to "an arbitrator" in the Act extends
to all arbitrators in a particular case if there is more than one. This makes explicit
in the Act what is probably already achieved by the Interpretation Act 1987, which
provides that the singular includes the plural.
Representation of parties in arbitration proceedings (section 20)
Schedule 1 (2) proposes that the existing provision dealing with the repre-
sentation of parties in arbitration proceedings be rephrased and extended.
Under the present section, a party may be represented by a legal practitioner or
other representative if the arbitrator or umpire gives leave; additionally, an
incorporated or unincorporated body may be represented by an officer, employee or
agent.
The new section generally extends these provisions, so that a party may be legally
represented also if another party is represented by a legally qualified person, or if all
the parties agree, or if the value of the claim exceeds a certain amount; additionally,
a party may be represented by a person who is not a legally qualified person if all the
parties agree.
A legal practitioner from outside the State is brought within the provisions, and
is protected from committing an offence under the Legal Profession Act 1987.
Consolidation of arbitration proceedings (section 26)
Schedule 1 (3) amends the existing provisions of the Act dealing with the
consolidation of arbitration proceedings.
Whereas previously only the parties by agreement or the Court by order could
consolidate proceedings, it is now proposed that arbitrators or umpires may
themselves make orders for the consolidation of arbitration proceedings. Different
procedures are prescribed, according to whether the proceedings have the same or
different arbitrators or umpires.
Procedural directions are provided and the role of the Court becomes one of
review. The grounds on which consolidation can be ordered remain substantially as
in the existing provision and the parties to two or more arbitration proceedings
remain free to agree on consolidation of these proceedings.
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Commercial Arbitration (Amendment) 1990
Settlement of disputes by means other than arbitration (section 27)
Schedule 1 (4) replaces a provision dealing with the settlement of disputes
otherwise than by arbitration.
The existing section provides that, unless agreed by the parties in writing, an
arbitrator or umpire may order the parries to take such steps as the arbitrator or
umpire thinks fit to achieve a settlement of a dispute, including attendance at a
conference conducted by the arbitrator or umpire, either without proceeding to or
while continuing with arbitration.
The new section provides for greater control by the parties in that they may seek
settlement by mediation, conciliation or similar means or may authorise an arbitrator
or umpire to act as a mediator, conciliator or other non-arbitral intermediary,
whether or not involving a conference and whether before or after proceeding to or
continuing with arbitration. It is also proposed that an arbitrator or umpire be
expressly bound by the rules of natural justice when proceeding under the section
unless the parties otherwise agree.
Discretion to award costs (section 34)
Schedule 1 (5) deletes a provision which requires an arbitrator or umpire, when
exercising the discretion to award costs, to take into account a refusal or failure to
attend a conference ordered by the arbitrator or umpire. As section 27 of the Act as
proposed to be amended will no longer confer power on the arbitrator or umpire to
order attendance at a conference, the existing provision is inappropriate.
In its place, a provision is to be inserted which requires an arbitrator or umpire,
when exercising the discretion to award costs, to take into account both the fact that
an offer of compromise has been made and the terms of that offer. An offer of
compromise system is now available in New South Wales in consequence of
amendments to rules of court.
Judicial review of awards (section 38)
Schedule 1 (6) adds to the provision dealing with judicial review of awards by
providing that the Court must not grant leave to a party to appeal on a question of
law, unless the Court is satisfied that:
* there has been a manifest error of law on the face of the award; or
* there is strong evidence that the arbitrator or umpire made an error of law and
the determination of the question will add to the certainty of commercial law,
in addition to being
satisfied (under the
current provisions) that determination of the
question could substantially affect the rights of a party.
Delay in prosecuting claims (section 46)
Schedule 1 (7) re-enacts the provisions of section 46 with a number of alterations.
The section deals with delay in prosecuting claims that are subject to arbitration.
The first alteration is to insert a requirement that each party to arbitration
proceedings (in addition to the claimant as is presently the case) has a duty to
exercise due diligence in the conduct of arbitration proceedings.
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Recognition and enforcement of foreign awards and agreements (Part VII and
Schedule 2)
Schedule 1 (8) and (11) repeal the provisions of the Act dealing with the
recognition of foreign awards and agreements and Schedule 2 to the Act which sets
out the text of the Convention on the Recognition and Enforcement of Foreign
Arbitral Awards. The deletion of these provisions is proposed because the
International Arbitration Act 1974 of the Commonwealth covers the field and the
State provisions are inconsistent in terms of section 109 of the Commonwealth,
Constitution.
Rule making powers (sections 62 and 63)
Schedule 1 (9) and (10)
amend existing provisions of the
Act which deal with the
making of rules of court by the Supreme Court and the District Court for the
purposes of carrying the Act into effect. The amendments will enable rules to be
made concerning offers of compromise in relation to claims to which arbitration
agreements apply.
These provisions are among the miscellaneous provisions at the end of the Act
which have never been uniform. Each jurisdiction is adopting its own approach in
dealing with court rules.
SCHEDULE 2--AMENDMENTS FOR THE PURPOSES OF UNIFORMITY
The amendments in this Schedule are, together with similar kinds of amendments
proposed for the corresponding legislation of the other States and Territories,
designed to secure greater uniformity of language among the corresponding Acts.
Schedule 2 (1) amends punctuation and substitutes a provision excluding the
application of the Act to certain kinds of arbitrations. Exemptions will be able to be
extended to non-statutory arbitrations.
Schedule 2 (2) omits definitions that are not uniform, and that are in any case now
covered by the
Interpretation Act 1987.
Schedule 2 (3) makes a change of wording merely for uniformity purposes.
Schedule 2 (4) provides that an arbitration agreement is to be taken to envisage
appointment of a single arbitrator unless the agreement otherwise provides or the
parties agree.
Schedule 2 (5) re-expresses section 15 merely for uniformity purposes.
Schedule 2 (6)-(14) and (15) (a) and (b) make minor amendments to the wording
of various sections to accord with usage in other Australian jurisdictions.
Schedule 2 (15) (c) and (16) merely reposition section 33 (2) to form part of
section 32, for uniformity purposes.
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Commercial Arbitration (Amendment) 1990
Schedule 2 (17) makes minor uniform amendments to wording. A revised
provision declaring void arbitration agreements which contain requirements for
parties to bear costs in certain circumstances is proposed.
Schedule 2 (18) and (19) make minor amendments to wording for uniformity
purposes.
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