Victorian Consolidated Legislation

Commercial Arbitration Act 1984 - SECT 8

Default in the exercise of power to appoint an arbitrator

8. Default in the exercise of power to appoint an arbitrator



(1) Where a person who has a power to appoint an arbitrator defaults in the
exercise of that power, a party to the relevant arbitration agreement may, by
notice in writing-

   (a)  require the person in default to exercise the power within such period
        (not being a period of less than seven days after service of the
        notice) as may be specified in the notice; and

   (b)  propose that in default of that person so doing-

   (i)  a person named in the notice (a default nominee) should be appointed
        to the office in respect of which the power is exercisable; or

   (ii) specified arbitrators (being the arbitrators who have prior to the
        date of the notice been appointed in relation to the arbitration)
        should be the sole arbitrators in relation to the arbitration.

(2) A notice under subsection (1) (or, where appropriate, a copy of the
notice) must be served upon-

   (a)  each party to the arbitration agreement (except the party by whom the
        notice is given); and

   (b)  each other person (not being a party to the arbitration agreement) who
        is in default in the exercise of a power of appointment in relation to
        the office in question-

and the notice shall be deemed to have been served when service is last
effected under this subsection.

(3) Where a person who is in default in the exercise of a power of appointment
fails to exercise the power as required by a notice under subsection (1),
then-

   (a)  where the notice named a default nominee-that nominee shall be deemed
        to have been duly appointed to the office in respect of which the
        power was exercisable; or

   (b)  where the notice proposed that specified arbitrators should be the
        sole arbitrators in relation to the arbitration-

   (i)  the power to which the notice relates shall lapse;

   (ii) the arbitrators specified in the notice may enter on the arbitration
        as if they were the sole arbitrators to be appointed in relation to
        the arbitration; and

   (iii) the arbitration agreement shall be construed subject to such
        modifications (if any) as are necessary to enable those arbitrators
        effectively to enter on and conduct the arbitration.

(4) The Court may, on the application of a party to an arbitration agreement,
set aside an appointment or any other consequence of non-compliance with a
notice under this section that takes effect by operation of subsection (3),
and may itself make an appointment to the office in respect of which the
relevant power of appointment was exercisable.

(5) For the purposes of this section a person defaults in the exercise of a
power of appointment if, after an occasion for the exercise of the power has
arisen, that person does not exercise the power within the time fixed by the
relevant arbitration agreement or, if no time is so fixed, within a reasonable
time.