International arbitration law and rules in Australia

1.1  Australia is a federation (officially known as the Commonwealth of Australia) consisting of six States and two major Territories.  

1.2 Traditionally, arbitration in Australia was governed by the legislative regimes of the individual States and Territories and closely followed the law of arbitration in England.  

1.3 Federal legislation governing international arbitration in Australia was introduced in the Arbitration (Foreign Awards and Agreements) Act 1974 (Cth), which also approved Australia’s accession to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention). Australia acceded to the New York Convention (which also applied to all of Australia’s then external Territories except Papua New Guinea), without any reservations, on 26 March 1975. This legislation was subsequently amended and renamed, with effect from 12 June 1989, to become the International Arbitration Act 1974 (IAA).

1.4 Section 16 of the IAA gives effect to the UNCITRAL Model Law on International Commercial Arbitration (Model Law) in relation to international arbitrations seated in Australia, which is set out in Schedule 2 of the IAA.

2.1.1 Australian law distinguishes between domestic and international arbitration.  

2.1.2 The Commonwealth government has legislative power over international arbitrations (with the IAA being the relevant legislation) while the States and Territories have the legislative power over domestic arbitrations seated within those individual States and Territories.  

2.1.3 An arbitration is international if: 

1. the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their places of business in different countries; or 
2. one of the following places is situated outside the country in which the parties have their place of business:
   1. the place of arbitration if determined in, or pursuant to, the arbitration agreement;
   2. any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected; or 
3.  the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country.  1 IAA, Sch 2, Art 1(3).  

2.1.4 Each individual State and Territory has enacted its own Commercial Arbitration Act (CAA) (known as the uniform Commercial Arbitration Acts), which deals with arbitration of commercial disputes in a domestic setting: 

1. where parties have agreed that such disputes are to be settled by arbitration; 
2. the parties have, at the time of conclusion of an arbitration agreement, their place of business in Australia; and  
3. the arbitration is not an arbitration to which the Model Law (as given effect to by the IAA) applies. 2 For example, Commercial Arbitration Act 2013 (Qld), s 1(3).   

2.1.5 The uniform Commercial Arbitration Acts do not apply to international arbitrations and provide a generally consistent (albeit not identical) domestic regime across Australia’s multiple domestic jurisdictions, each of which are also consistent with the Model Law.  

2.1.6 Notably, if the IAA applies to an arbitration, the arbitration legislation of a State or Territory does not apply 3 IAA, s 21(1) . as the Model Law (consistent with the provisions of the uniform Commercial Arbitration Acts) is said to “cover the field”. 

2.1.7 This chapter only addresses international commercial arbitration in Australia. Domestic arbitration and the enforcement of foreign arbitration agreements in Australia are beyond the scope of this publication. 

2.2.1 Most, but not all, commercial disputes are capable of being submitted to arbitration.  

2.2.2. Certain matters under the Corporations Act 2001 (Cth) are not arbitrable, such as matters involving insolvency or winding-up. 4  WDR Delaware Corporation v Hydrox Holdings Pty Ltd (2016) 245 FCR 452, Foster J at para 144.

2.2.3 In certain circumstances, disputes are only arbitrable if certain conditions are met. For example, the IAA is expressly subject to section 11 of the Carriage of Goods by Sea Act 1991 (Cth), which provides that arbitration agreements included in bills of lading or similar documents relating to the carriage of goods to or from Australia are void, unless the arbitration agreement provides that the arbitration must be conducted in Australia. 

2.2.4 Another example is an arbitration agreement in insurance contracts, which is void. In order to arbitrate any disputes arising out of, or in connection with, an insurance contract, the parties must agree to submit the dispute to arbitration after the dispute arises. 5  Insurance Contracts Act 1984 (Cth), s 43(1). However, s 43(2) provides that s 43(1) does not affect an arbitration agreement made after the relevant dispute arose.  

2.3.1 The IAA (which largely adopts the Model Law) is founded on the principle that the Court shall not intervene in matters governed by the IAA, except as expressly provided for in the IAA. 6  IAA, Sch 2, Art 5.

2.3.2 The circumstances where the court may intervene include:  

1. granting interim measures of protection (see section 5.2 below);  
2. assisting with the appointment and removal of arbitrators (see section 4.2 below); 
3. assisting with taking evidence (including for the production of documents) (see section 6.9 below); and
4. making orders to assist the arbitral tribunal (section 23A of the IAA). 

3.1.1 An “arbitration agreement” is defined as an agreement by the parties to submit to arbitration all or certain disputes which have arisen, or which may arise between them in respect of a defined legal relationship, whether contractual or otherwise. 7  IAA, ss 3 and 16(2) and Sch 2, Option 1 of Art 7(1).

3.2.1 An arbitration agreement must be in writing. 8 IAA, ss 3 and 16(2) and Sch 2, Option 1 of Art 7(2). The writing requirement is satisfied if the agreement’s content is recorded in any form, whether the arbitration agreement or contract has been concluded orally, by conduct or by other means. 9 IAA, ss 3 and 16(2) and Sch 2, Option 1 of Art 7(3).   

3.2.2 The agreement can be in an electronic communication if the information contained in it is accessible to be used for subsequent reference. Examples of acceptable forms of electronic communication include (but are not limited to), electronic data interchange, email, telegram, telex or telecopy. 10 IAA, ss 3 and 16(2) and Sch 2, Option 1 of Art 7(4).   

3.2.3 There is no requirement for a separate arbitration agreement. A clause in a contract will suffice. 11 IAA, ss 3 and 16(2) and Sch 2, Option 1 of Art 7(1). Alternatively, an enforceable arbitration clause can be incorporated into a contract by reference to a separate document. 12 IAA, ss 3 and 16(2) and Sch 2, Option 1 of Art 7(6).   

3.3.1 Parties are generally free to agree the procedural rules that will apply to their arbitration, although it is common to adopt the rules of an arbitral institution (eg the Australian Centre for International Commercial Arbitration (ACICA), the Singapore International Arbitration Centre (SIAC) or the London Court of International Arbitration (LCIA)). Whatever procedural rules are adopted, they are subject to the mandatory provisions of the IAA that apply to all international commercial arbitrations seated in Australia.

3.3.2 The mandatory provisions include requirements that:  

1. the parties are to be treated with equality and each party is to be given a full opportunity to present its case (Article 18 of the Model Law); 13 IAA, Sch 2, Art 18. and 
2. the parties are to be given sufficient advance notice of any hearing (Article 24 (2) of the Model Law). 14 IAA, Sch 2, Art 24(2).  

3.3.3 While the IAA largely adopts but also supplements the Model Law. For example, section 18C of the IAA provides that for the purposes of Article 18 of the Model Law, 15 IAA, Sch 2, Art 18. a party is taken to have been given a “full opportunity” to present its case if the party is given a “reasonable opportunity” to present its case.

3.3.4 The IAA also supplements the Model Law by including additional provisions that will apply unless the parties “opt-out” of their application (in the arbitration agreement or otherwise in writing). Such provisions that apply unless the parties “opt-out” include:   

1. allowing a party (with the permission of the arbitral tribunal) to apply to the court for a subpoena requiring a person to attend for examination or to produce evidence; 16  IAA, s 23.  
2. allowing a party to apply to the court for an order requiring compliance by the other party if there is a failure by that party to attend arbitral proceedings for examination (when required by a subpoena or by the arbitral tribunal), or to comply with orders of the arbitral tribunal or court in relation to production of documents, or if there is a more general default by that party; 17 IAA, s 23A.  
3. preventing parties disclosing confidential information in relation to the arbitration (except in specific circumstances); 18 IAA, ss 23C to 23G.  
4. allowing the arbitral tribunal to make orders relating to the scrutiny of evidence, including allowing the arbitral tribunal or a person specified in the order to take a sample of evidence or to inspect, photograph, observe or conduct experiments on evidence in the possession of a party; 19  IAA, s 23J.
5. allowing the arbitral tribunal to make orders relating to security for costs, and the costs of the arbitration; 20 IAA, ss 23K and 27. and  
6. allowing the arbitral tribunal to provide for the payment of interest on awards. 21 IAA, ss 25 and 26.   

3.3.5 The parties may also agree to consolidate arbitral proceedings. 22 IAA, s 24(8).   

3.4.1 The doctrine of separability is recognised in Australia, such that an arbitration clause is treated as separable from the contract which it is within. If the arbitral tribunal decides that the contract is null and void, that does not of itself invalidate the arbitration agreement. 23 IAA, Sch 2, Art 16(1).   

3.5.1 A fundamental principle of arbitration is that, except in the limited circumstances in which an award may be set aside, corrected or interpreted, the award is binding on the parties to the arbitration agreement.  

3.5.2 Subject to Articles 33 and 34 of the Model Law, an international arbitral award made in Australia is binding and may be recognised and enforced pursuant to Article 35 of the Model Law (which is also subject to the grounds for refusing recognition or enforcement in Article 36 of the Model Law). 24 IAA, Sch 2, Arts 33, 34 35 and 36. This is addressed in more detail in section 10 below.  

3.6.1 The English approach to interpretation of arbitral clauses has been the subject of recent judicial consideration by the Australian courts.  

3.6.2 In England, in Fiona Trust v Privalov, 25 Fiona Trust & Holdings v Privalov [2007] 4 All ER 951. the House of Lords rejected a distinction between an interpretation of “arising under” or “arising out of” an agreement, calling for a “fresh start”. 26 Fiona Trust & Holdings v Privalov [2007] 4 All ER 951 at p 958, para 12. Lord Hoffman was of the view that the construction of an arbitral clause should “start from the assumption that the parties, as rational businessmen, are likely to have intended any dispute arising out of the relationship into which they have entered or purported to enter to be decided by the same tribunal”, and that the clause should be construed in accordance with that presumption “unless the language makes it clear that the certain questions were intended to be excluded from the arbitrator’s jurisdiction”. 27 Fiona Trust & Holdings v Privalov [2007] 4 All ER 951 at p 958, para 13.   

3.6.3. The High Court of Australia, in Rinehart v Hancock Prospecting, 28 Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13. determined that the “proper” approach as to the interpretation of arbitration agreements is through the application of “orthodox principles of interpretation, which require consideration of the context and purpose of the [arbitration agreement]”. 29 Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13 at p 18. The High Court of Australia held that in the circumstances of this case there was no need to have reference to the English position established in Fiona Trust v Privalov, leaving unresolved the issue of whether the principles of Fiona Trust v Privalov will be applied in Australia. While the case of Rinehart v Hancock Prospecting was decided in the context of domestic arbitration, these principles are highly likely to be applied consistently by Australian courts in the context of international arbitration.  

4.1.1 Parties are free to agree the procedure for the appointment of an arbitrator, 30 IAA, Sch 2, Art 11(2). failing which the default procedure set out in Article 11(3) of the Model Law 31 IAA, Sch 2, Art 11(3). will apply. This provides as follows:  

1. Where three arbitrators are to be appointed, each party is to appoint an arbitrator and the two arbitrators appointed must agree on a third arbitrator. 32 IAA, Sch 2, Art 11(3)(a).   If the two arbitrators appointed by the parties fail to agree on the third arbitrator within 30 days of their appointment, the appointment is to be made upon request of a party by either the court or the prescribed authority. 33 IAA, Sch 2, Art 11(3)(a).   
2. Where a sole arbitrator is to be appointed, if the parties cannot agree on the arbitrator to be appointed, then the appointment is to be made upon request of a party by either the court or the prescribed authority. 34   IAA, Sch 2, Art 11(3)(b).

4.1.2 The only prescribed authority for the purposes of Article 11(3) of the Model Law 35 IAA, Sch 2, Art 11(3). is the ACICA. 36 International Arbitration Regulations 2020 (Cth), reg 6.  

4.1.3 A person is not automatically precluded from appointment as an arbitrator by reason of their nationality. 37 IAA, Sch 2, Art 11(1). However, the parties can agree to impose any requirement in relation to the qualifications of the arbitrator(s), including nationality. 38 IAA, Sch 2, Arts 11(1) and 11(2). Any agreement in relation to the necessary qualifications for the arbitrator(s) should be carefully drafted to avoid uncertainty or ambiguity which may give rise to a challenge to the appointment of an arbitrator. 

4.2.1 Parties are free to agree to a procedure for challenging an arbitrator. 39  IAA, Sch 2, Art 13.  

4.2.2 If the parties fail to agree a procedure for challenging an arbitrator, either party may challenge the arbitrator’s appointment where circumstances exist that give rise to “justifiable doubts” as to the arbitrator’s impartiality or independence, or if the arbitrator does not possess the qualifications the parties have agreed as being required. 40 IAA, Sch 2, Art 12(2). A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made. 41   IAA, Sch 2, Art 12(2).

4.2.3 Section 18A(2) of the IAA provides that a “justifiable doubt” only arises where there is a “real danger” of bias on the part of the arbitrator. This provision supplements Article 12 of the Model Law 42 IAA, Sch 2, Art 12 . and clarifies the interpretation of “justifiable doubts” for arbitrations under the IAA.  

4.2.4 If the parties have not agreed a procedure for challenging the arbitrator(s), Article 13(2) of the Model Law 43 IAA, Sch 2, Art 13(2). provides that a party who intends to challenge an arbitrator shall submit a written statement of reasons for the challenge to the arbitral tribunal within 15 days of becoming aware of the constitution of the arbitral tribunal or any justifiable doubt as to the arbitrator’s impartiality and independence. Unless the arbitrator withdraws, or the other party agrees to the challenge, the arbitral tribunal will decide on the challenge. 44 IAA, Sch 2, Art 13(2). If the challenge fails, then the party that brought it may, within 30 days of receiving the decision rejecting the challenge, apply to the court to hear and determine the challenge. 45 IAA, Sch 2, Art 13(2). The arbitral tribunal may continue the proceedings and make an award while a challenge is before the courts. 46 IAA, Sch 2, Art 13(3) .  

4.3.1 Section 28(1) of the IAA provides that “an arbitrator is not liable for anything done or omitted to be done by the arbitrator in good faith in his or her capacity as arbitrator”. 

5.1.1Article 16(1) of the Model Law 47 IAA, Sch 2, Art 16(1). gives effect to the Kompetenz-Kompetenz principle which allows an arbitral tribunal to rule on its own jurisdiction. The arbitral tribunal may do so as a preliminary issue or in the final award.  

5.1.2 If a party wishes to challenge the jurisdiction of the arbitral tribunal it must do so no later than the submission of the statement of defence. 48 IAA, Sch 2, Art 16(2). An allegation that the arbitral tribunal has exceeded the scope of its authority must be raised as soon as the matter alleged to be beyond authority arises. 49 IAA, Sch 2, Art 16(2).   

5.1.3 Where the arbitral tribunal rules on its jurisdiction as a preliminary issue, within 30 days of the arbitral tribunal making its ruling either party may request the court having jurisdiction (being the Federal Court of Australia or in the Supreme Court of the State or Territory of the place of arbitration) 50 IAA, s 18(2) specifies the Court having jurisdiction under Sch 2, Art 16(3). to finally determine whether the arbitral tribunal does have jurisdiction. 51 IAA, Sch 2, Art 16(3). The decision of the courts is not subject to appeal and the arbitral tribunal may continue with the proceedings (including making an award) while the challenge to their jurisdiction is before the court .52  IAA, Sch 2, Art 16(3).

5.2.1The arbitral tribunal may make interim orders/measures at the request of either party, unless the parties to the arbitration have agreed otherwise. 53  IAA, Sch 2, Art 17(1).

5.2.2 Article 17(2) of the Model Law 54 IAA, Sch 2, Art 17(2). empowers the arbitral tribunal to grant interim measures ordering a party to: 

1. maintain or restore the status quo pending determination of the dispute; 
2. take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral process itself; 
3. provide a means of preserving assets out of which a subsequent award may be satisfied; or 
4. preserve evidence that may be relevant and material to the resolution of a dispute.  

5.2.3 The party requesting the interim measure(s) must satisfy the arbitral tribunal that: 55 IAA, Sch 2, Art 17A(1).  

1. damages are not likely to adequately compensate the party for the harm likely to be suffered if the requested measure is not ordered, and such harm substantially outweighs the harm that is likely to result to the other party if the measure is granted; and 
2. there is a reasonable possibility that the requesting party will succeed on the merits of the claim.  

5.2.4 The arbitral tribunal may require the party requesting an interim measure to provide security in connection with that measure 56 IAA, Sch 2, Art 17E. and to disclose any material change in the circumstances which supports the measure granted. 57 IAA, Sch 2, Art 17F. If the arbitral tribunal subsequently determines that an interim measure or preliminary order should not have been granted, it may order the party which sought the measure/order to pay any costs and/or damages caused to any party as a result of that measure/order. 58 IAA, Sch 2, Art 17G.

6.1.1 Unless otherwise agreed by the parties (eg in institutional rules which the parties have adopted), Article 21 of the Model Law 59 IAA, Sch 2, Art 21. provides that arbitral proceedings commence on the date the request for the dispute to be referred to arbitration is received by the respondent.  

6.2.1 Subject to any mandatory provisions (see section 3.3 above), the parties may agree on the procedural rules for the conduct of the arbitration; 60 IAA, Sch 2, Art 19(1). and failing such agreement, the arbitral tribunal may conduct the arbitration in the manner it considers appropriate (including determining the admissibility, relevance, materiality and weight of any evidence). 61   IAA, Sch 2, Art 19(2).

6.2.2 Chapter V of the Model Law 62 IAA, Sch 2, ch V. generally sets out provisions for the conduct of arbitral proceedings covering such matters as: 

1. equal treatment of the parties; 63   IAA, Sch 2, Art 18.
2. determination of rules of procedure; 64  IAA, Sch 2, Art 19.
3. determining the place of the arbitration (consistent with many other jurisdictions, it is permissible to have the arbitration hearing(s) at a different location to its juridical seat); 65 IAA, Sch 2, Art 20.  
4. when the arbitration commenced; 66  IAA, Sch 2, Art 21.  
5. the language of the arbitration; 67  IAA, Sch 2, Art 22.
6. exchange of statements of claim and defence; 68  IAA, Sch 2, Art 23.  
7. the power of the arbitral tribunal to determine whether to hold oral hearings (which are mandatory if requested by a party); 69 IAA, Sch 2, Art 24.  
8. the powers of the arbitral tribunal where a party defaults in providing their statement of claim or defence, or by a failure to appear at a hearing or to produce documentary evidence; 70  IAA, Sch 2, Art 25.
9. the power of the arbitral tribunal to appoint experts; 71 IAA, Sch 2, Art 26. and  
10. the ability to seek the assistance of the courts in taking evidence. 72 IAA, Sch 2, Art 27.  

6.3.1 Article 20(1) of the Model Law 73 IAA, Sch 2, Art 20(1). provides that the parties are free to agree on the place of arbitration. Failing such agreement, the place of arbitration will be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties. 

6.3.2 Notwithstanding Article 20(1) of the Model Law, 74 IAA, Sch 2, Art 20(1). the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of goods, other property or documents .75 IAA, Sch 2, Art 20(2). This mirrors common practice in many jurisdictions, such that it is possible to have hearings or meetings in relation to the arbitration at a different location than the seat. 

6.3.3 Article 22 of the Model Law 76 IAA, Sch 2, Art 20(1). provides that the parties are free to agree on the language or languages to be used in the arbitral proceedings, failing which this shall be determined by the arbitral tribunal. Provision is also made for the arbitral tribunal to order that any documentary evidence be translated into the language of the arbitration .77  IAA, Sch 2, Art 22(2).

6.4.1 Unless agreed by the parties, the format and timetable for submissions will be determined by the arbitral tribunal. 78 IAA, Sch 2, Art 19(2).   

6.4.2 In Australia, arbitrations generally follow a common law litigation style procedure where the parties exchange written submissions in the form of statements of claim and statements of defence (which define the parties’ respective cases), followed by disclosure, factual evidence and expert evidence followed by a hearing (or a determination on the papers). Notwithstanding the foregoing, there is nothing prohibiting the parties adopting, or the arbitral tribunal ordering, a memorial style process. 

6.5.1 Subject to any contrary agreement by the parties, or a request by any party that an oral hearing be held (which must be accommodated unless there was a prior agreement between the parties to proceed on the papers only), the arbitral tribunal will decide whether to hold oral hearings, or whether the proceedings shall be conducted on the papers. 79 IAA, Sch 2, Art 24(1).   

6.5.2 Ex parte communications with the arbitral tribunal are not permitted. All statements, documents or other information supplied to the arbitral tribunal by one party must also be provided to the other party .80 IAA, Sch 2, Art 24(3).  

6.6.1 As is common practice in international arbitrations elsewhere, the civil law rules of evidence applicable in litigation proceedings do not apply to arbitrations and the arbitral tribunal is empowered to determine the admissibility, relevance, materiality and weight of any evidence, subject to any agreement on such matters between the parties .81 IAA, Sch 2, Art 19(2).   

6.6.2 From a practical perspective, it is common for the International Bar Association (IBA) Rules on the Taking of Evidence in International Arbitration to be adopted as a guide.  

6.6.3 In addition to the provisions of the Model Law, the IAA expressly provides that the arbitral tribunal may make an order that allows the arbitral tribunal or a specified person to inspect, photograph, observe or conduct experiments on evidence that is in the possession of a party to the arbitral proceedings and that may be relevant to those proceedings. 82 IAA, s 23J(1)(a). The arbitral tribunal may also make an order allowing a sample of the relevant evidence to be taken by the arbitral tribunal or a specified person. 83 IAA, s 23J(1)(b). As set out in section 3.3 above, this applies unless the parties “opt-out” of this provision. 

6.7.1 Unless the parties agree otherwise, the arbitral tribunal may: 

1. appoint one or more experts to report to it on specific issues determined by it; and/or 
2. require a party to give the expert any relevant information or to produce, or to provide access to, relevant documents, goods or other property for inspection by the expert. 84  IAA, Sch 2, Art 26(1).

6.7.2 Similarly, unless otherwise agreed by the parties, if a party so requests or if the arbitral tribunal considers it necessary, the expert shall, after delivery of their report (written or oral), participate in a hearing where the parties have the opportunity to question the expert and to present their own expert witness evidence on the relevant issues. 85  IAA, Sch 2, Art 26(2).

6.8.1 Unless the parties “opt out” of the confidentiality regime (see section 3.3 above), 86 The “opt out” provisions in relation to confidentiality (ss 23C to 23G) were inserted into the IAA by the Civil Law and Justice (Omnibus Amendments) Act 2015 (Cth). the parties may not disclose “confidential information” in relation to the proceedings, except in the very limited circumstances permitted by the IAA, 87 Amendments, including ss 23C to 23G were inserted into the IAA by the International Arbitration Amendment Act 2010 (Cth). which are as follows:

1. all parties consent to the disclosure; 
2. disclosure is to a professional or other adviser of a party; 
3. disclosure is allowed by an order of the arbitral tribunal; 
4. disclosure is necessary to establish or protect the legal rights of a party (including for enforcement purposes); 
5. disclosure is necessary to ensure a party has a full opportunity to present its case (and the disclosure is no more than reasonable for that purpose);  
6. disclosure is required to comply with a subpoena or a court order; or 
7. disclosure is authorised or required by “another relevant law”. 88  IAA, ss 23C to 23 G.

6.8.2 “Confidential information” is defined as having a wide ambit and includes information that relates to the proceedings or to an award made in the proceedings and includes pleadings, evidence, transcripts, rulings and awards. 89 IAA, s 15(1).

6.8.3 The “opt-out” confidentiality regime in the IAA was inserted by way of legislative intervention to override the position that had previously been established by the High Court of Australia in Esso Australia Resources v Plowman, 90 Esso Australia Resources v Plowman (1985) 183 CLR 10. in which the High Court of Australia held that confidentiality was not an essential feature of “private” arbitrations.  

6.9.1 An arbitral tribunal, or a party with the arbitral tribunal’s approval, may request assistance from a competent court in taking evidence. 91 IAA, ss 18(4) and 18(5) specifies the court under Sch 2, Art 27. This may be the Federal Court of Australia or the Supreme Court of a State of Territory where the taking of evidence occurs.  

6.9.2 Save for when the parties “opt out” of these provisions, (see section 3.3 above), upon the application of a party to the proceedings, the Federal Court of Australia or the Supreme Court of the State of Territory where the arbitral proceedings are conducted 92 IAA, s 22A. may issue a subpoena requiring a person to attend for examination before the arbitral tribunal, or to produce documents to the arbitral tribunal .93 IAA, s 23. This provision only applies to arbitrations seated in Australia. 94 Samsung C&T Corporation, in the matter of Samsung C&T Corporation [2017] FCA 1169. A person may not be compelled to answer any question or to produce any document which they could not otherwise be compelled to answer or produce in proceedings before that court. 95   IAA, s23(4).

7.1.1 The substantive law to be applied to determine the parties’ rights will be the governing law agreed to in the underlying contract or agreement, 96 IAA, Sch 2, Art 28(1). or where the parties have failed to make such a provision the arbitral tribunal shall determine the law to be applied by reference to the conflicts of law rules that it considers appropriate. 97  IAA, Sch 2, Art 28(2).

7.2.1 If the arbitral tribunal is of the view that it will narrow the issues in dispute, or that it is otherwise prudent to do so, the arbitral tribunal is free to render one or more partial awards determining some of the issues in dispute between the parties. Of course, any such partial award must comply with the form and content requirements set out in Article 31 of the Model Law 98 IAA, Sch 2, Art 31. and a res judicata will arise in respect of any issue which is finally determined in such a partial award. 

7.3.1 The award must be in writing and signed by the arbitrator. 99 IAA, Sch 2, Art 31(1). If there is more than one arbitrator, the signatures of a majority of the arbitral tribunal members is sufficient, provided that the reason for any omitted signature is stated. 100 IAA, Sch 2, Art 31(1).   

7.3.2 The award must state the reasons upon which it is based, unless the parties have agreed that no reasons are to be given (or where the award records an agreed settlement). 101 IAA, Sch 2, Art 31(2). Although the courts have not determined what is required in order to satisfy this provision in the IAA, in Westport Insurance Corporation v Gordian Runoff Ltd, 102 Westport Insurance Corporation v Gordian Runoff Ltd [2011] HCA 37. which concerned a domestic arbitration in Australia, the court considered the requirement in the Commercial Arbitration Act 1984 (1984) (being the domestic legislation in force prior to the commencement of the uniform Commercial Arbitration Acts in each Australian State and Territory) that “reasons for making the award …be given”. The High Court held that the necessary standard is not equivalent to a judicial standard, but that the level of detail required “will depend upon the nature of the dispute and the particular circumstances of the case”. 103 Westport Insurance Corporation v Gordian Runoff Ltd [2011] HCA 37 at para 53.  

7.3.3 The award is also required to state the date and place of the arbitration 104 IAA, Sch 2, Art 31(3). and a copy must be delivered to each party. 105   IAA, Sch 2, Art 31(4).

7.4.1 If the parties settle the dispute while the proceedings are on foot, the arbitral tribunal shall terminate the proceedings and, if requested by the parties and not objected to by the arbitral tribunal, record the settlement in the form of an arbitral award on agreed terms. 106  IAA, Sch 2, Art 30(1).

7.4.2 An award on agreed terms must still satisfy the form and content requirements for an award set out in Article 31 of the Model Law.107 

7.5.1 An award of costs is at the discretion of the arbitral tribunal. 108  IAA, s 27(1). See also costs and damages for interim measures or preliminary orders in IAA, Sch 2, Art 17G. The IAA does not stipulate any specific factors that an arbitral tribunal must consider when exercising its discretion in relation to costs.   

7.5.2 Australian courts have long followed the principal that ‘costs follow the event’ meaning that the successful party will ordinarily be awarded costs in its favour.  This is also the usual position that an arbitral tribunal will follow in Australia, but it is not bound to do so. For example, an arbitrator may choose to award costs to the parties based on which discrete issues in the dispute they succeeded in, or may order that each party is to bear their own costs.   

7.5.3 An arbitral tribunal is not required to use any court scales or other rules when making orders in relation to costs. 109 IAA, s 27(2AA). Amendments made to the IAA by the Civil Law and Justice Amendment Act 2018 (Cth) expanded the arbitral tribunal’s powers in relation to costs.  Previously, costs were awarded on a “party and party” or “solicitor and client” basis.  Party-party costs are typically significantly lower than solicitor-client costs.  The usual order that a court will make is for party-party costs to be paid to the successful party.  Australian courts have also been reluctant to make a “special rule” reversing the usual position and imposing a rebuttable presumption in favour of indemnity costs (solicitor-client costs). Notwithstanding this reluctance to create a “special rule”, the Australian courts have been prepared to award costs on an indemnity basis in appropriate circumstances. 110 Sino Dragon Trading Ltd v Noble Resources International Pte Ltd (No. 2) [2016] FCA 1169; Ye v Zeng (No 5) [2016] FCA 850.  

7.5.4 These amendments to the IAA provide the arbitral tribunal with “more flexibility in making costs awards” and now follow the principle that it is a “matter for the tribunal to settle an appropriate approach to awarding costs”. 111 Explanatory Memorandum to Civil Law and Justice Amendment Act 2018, para 318. In any event, arbitrators tend to take a more broad-brush approach than the courts, particularly given that there is no requirement to apply court scales or to tax the costs as in litigation. 

7.5.5 If the award does not make any award of costs, either party may apply to the arbitral tribunal for directions as to the payment of costs within 14 days of receiving the award. 112 IAA, s 27(4). The arbitral tribunal must then, after hearing any party who wishes to be heard, amend the award by adding to it such directions as the arbitral tribunal thinks proper with respect to the costs of the arbitration. 113    IAA, s 27(4).

7.6.1 Except where the parties have agreed otherwise, the arbitral tribunal has the power to award interest up to the making of an award and/or interest on a debt under an award. 114 IAA, ss 25 and 26.   

7.6.2 In relation to interest on a debt under an award, the arbitral tribunal may direct that compound interest is payable if payment is not made on or before the due date, 115 IAA, s 26(2). at a reasonable rate set by the arbitral tribunal .116   IAA, s 26(3).

7.6.3 Compound interest may not be ordered for the period between the date on which the cause of action arose and the making of the award. 117  IAA, s 25(2)(a).

7.7.1 If an arbitrator becomes unable to perform their function or fails to act without undue delay (for example, if there is an undue delay in delivery of the award), either party may apply to the competent court (being the Federal Court of Australia or the Supreme Court of the State or Territory in the place of arbitration) 118 IAA, s 18(3) specifies the Court under Sch 2, Art 14. to decide on the termination of the arbitrator’s mandate .119 IAA, Sch 2, Art 14.   

7.7.2 Where an arbitrator’s mandate is terminated, a substitute arbitrator must be appointed according to the rules that applied to the appointment of the arbitrator being replaced. 120 IAA, Sch 2, Art 15.   

7.8.1 The arbitral proceedings are terminated by the final award 121 IAA, Sch 2, Art 32(1). or an order under Article 32(2) of the Model Law (eg where the parties agree to the termination of proceedings). 122 IAA, Sch 2, Art 32(2).   

7.8.2 The arbitrator becomes functus officio in respect of their mandate with the termination of the arbitral proceedings except where: 

1. a party, with notice to the other party, requests the arbitral tribunal to correct in the award computational errors, clerical or typographical errors or errors of a similar nature (analogous to what is often referred to as the “slip rule” in litigation); 123 IAA, Sch 2, Art 33(1)(a).  
2. the parties agree that a party, with notice to the other party, may request the arbitrator to interpret a specific point or part of the award; 124  IAA, Sch 2, Art 33(1)(b).
3. a party, with notice to the other party (subject to an agreement to the contrary) requests the arbitral tribunal within 30 days of receipt of the award to make an additional award to deal with claims presented in the arbitration which the tribunal did not deal with in any previous award(s); 125 IAA, Sch 2, Art 33(3). or 
4. where court proceedings to set aside an award are suspended to give the arbitral tribunal an opportunity to take action that in the arbitral tribunal’s opinion will eliminate the grounds for setting aside. 126  IAA, Sch 2, Art 34(4).  

7.9.1 Within 30 days of receipt of the award, unless another time period has been agreed by the parties, a party, on notice to the other party, may request the arbitral tribunal to correct any errors in computation, any clerical or typographical errors or any errors of similar nature. 127 IAA, Sch 2, Art 33(1)(a). The arbitral tribunal may also correct any errors of this type on its own initiative within 30 days of the date of the award .128   IAA, Sch 2, Art 33(2).

7.9.2 In addition, if the parties agree, a party, with notice to the other party, may request the arbitral tribunal to give an interpretation of a specific point or part of the award within the same time frame. 129 IAA, Sch 2, Art 33(1)(b) .  

7.9.3 If the arbitral tribunal considers the request to be justified, it shall make the correction or give the interpretation within 30 days of receipt of the request (subject to the tribunal’s right to extend this period under Article 33(4) of the Model Law) 130 IAA, Sch 2, Art 33(4). and the interpretation forms part of the award .131 IAA, Sch 2, Art 33(1).  

7.9.4 Unless otherwise agreed by the parties, a party, with notice to the other party, may request, within 30 days of receipt of the award, that the arbitral tribunal make an additional award in relation to claims presented in the arbitral proceedings but omitted from the award. If the arbitral tribunal considers the request to be justified, it will make the additional award within 60 days. 132  IAA, Sch 2, Art 33(3).

7.9.5 Any time limits which apply to the correction or interpretation of the award, or the delivery of an additional award in relation to an omitted issue, under Articles 33(1) to (3) of the Model Law 133 IAA, Sch 2, Arts 33(1) to 33(4). can be extended by the arbitral tribunal on its own initiative. 134  IAA, Sch 2, Art 33(4).   

8.1.1 The courts do not have jurisdiction to intervene in arbitral proceedings in relation to matters governed by the Model Law, except where the Model Law expressly permits such interference. 135   IAA, Sch 2, Art 5.

8.2.1 Where there is an arbitration agreement between parties and a dispute arises which is within the ambit of that arbitration agreement then, where proceedings have been commenced in the courts and a party so requests (not later than when submitting its first statement on the substance of the dispute), the court must stay the court proceeding and refer the parties to arbitration to resolve that dispute, unless the court finds that the arbitration agreement is void, inoperative or incapable of being performed. 136 IAA, Sch 2, Art 8(1).    

8.3.1 The Model Law expressly recognises that it is not incompatible with an arbitration agreement for a party to request, either before or during arbitral proceedings, a court to grant an interim measure. 137 IAA, Sch 2, Art 9. The IAA does not require a party to seek an interim measure from an arbitral tribunal before a party makes such a request.  

8.3.2 A court has the same power of issuing an interim measure in relation to arbitration proceedings as it has in relation to proceedings in court. 138  IAA, Sch 2, Art 17J.  

8.3.3 The arbitration rules for an institution may also provide a more detailed (or constrained) procedure for applying to the courts or the arbitral tribunal for interim or emergency relief. For example, clause 7.1 of Schedule 1 to the ACICA Arbitration Rules provides that a party has the right to apply to the courts for emergency interim measures. 

9.1.1 An application to set aside an award must be made within: 

1. three months after the date of receipt of the award; or  
2. where a party has made a request under Article 33 of the Model Law, 139 IAA, Sch 2, Art 33. within three months after the arbitral tribunal has disposed of the application to correct or interpret the award or to provide a further award in respect of an issue not dealt with in the award. 140   IAA, Sch 2, Art 34(3).

9.2.1 There is no provision in the IAA that allows parties to agree to exclude the right to seek to set aside an award pursuant to Article 34 of the Model Law. 141 The grounds to set aside an arbitral award include a ground where there is a conflict with the public policy of Australia. It is considered a fundamental Australian principle of law that the rules of natural justice apply to an arbitration, such that a breach of the requirement to afford a party natural justice may found the ability to set aside an award. See for example, TCL Air Conditioner (Zhongshan) Co Ltd v. Castel Electronics Pty Ltd [2014] FCAFC 83 [at 111] which states “The rules of natural justice are part of Australian public policy”…. “The provisions (…Arts 34 …) deal with fundamental conceptions of fairness and justice”. That right is a fundamental right afforded to each party. However, if a party wishes to rely upon this provision, it must comply with the strict time limit set out in Article 34(3); otherwise it would have no statutory right to seek to have an award set aside.  

9.3.1 For international arbitrations seated in Australia, there is no ability to appeal an award. The only recourse permitted is to apply to set aside the award on the limited grounds specified in Article 34 of the Model Law. 142 IAA, Sch 2, Art 34. These are as follows:  

1. a party to the arbitration agreement was under some incapacity or the arbitration agreement is not legally valid; 143 IAA, Sch 2, Art 34(2)(a)(i).  
2. the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present its case; 144  IAA, Sch 2, Art 34(2)(a)(ii).
3. the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions beyond the scope of the submission to arbitration (note that if those aspects of the decision can be separated from the matters properly decided then only the matters not properly decided shall be set aside); 145  IAA, Sch 2, Art 34(2)(a)(iii).
4. the composition of the arbitral tribunal was not in accordance with the parties’ agreement (unless that agreement breached a mandatory provision of the Model Law), or failing such agreement was not in accordance with the Model Law; 146 IAA, Sch 2, Art 34(2)(a)(iv).  
5. the arbitration procedure was not in accordance with the parties’ agreement (unless that agreement breached a mandatory provision of the Model Law), or failing such agreement was not in accordance with the Model Law; 147 IAA, Sch 2, Art 34(2)(a)(iv).  
6. (f) the subject matter of the dispute is not capable of settlement by arbitration under the laws of Australia; 148 IAA, Sch 2, Art 34(2)(b)(i). or (g) the award conflicts with public policy in Australia. 149 IAA, Sch 2, Art 34(2)(b)(ii). An interim measure or an award will be contrary to public policy if the making of the interim measure or award was induced or affected by fraud or corruption, or where a breach of the rules of natural justice occurred in connection with the making of the interim measure or the award. 150  IAA, s 19.

10.1.1 Article 35 of the Model Law 151 IAA, Sch 2, Art 35. governs the recognition and enforcement of international arbitration awards made in Australia.  

10.1.2 The first step to enforce an arbitral award is to apply to the Federal Court of Australia or the Supreme Court of a State or Territory for the award to be recognised. 152 Federal Court Rules 2011 (Cth), r 28.49; Uniform Civil Procedure Rules 1999 (Qld), r 365K; Order 9.11, Supreme Court (Miscellaneous Civil Proceedings) Rules 2018 (Vic). The party applying for the enforcement is required to supply the original award or a copy. 153 IAA, Sch 2, Art 35(2). If the award is not in English, the court may request the party supply a translation. 154  IAA, Sch 2, Art 35(2).

10.1.3 An Australian court can refuse enforcement of an international award made in Australia if one of the grounds in Article 36(a) and (b) of the Model Law 155 IAA, Sch 2, Arts 36(1)(a) and 36(1)(b) exist. These are: 

1. a party to the arbitration agreement was under some incapacity or the arbitration agreement is not legally valid; 156 IAA, Sch 2, Art 36(1)(a)(i).  
2. the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present its case; 157  IAA, Sch 2, Art 36(1)(a)(ii).
3. the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions beyond the scope of the submission to arbitration (note that if those aspects of the decision can be separated from the matters properly decided then only the matters not properly decided shall be set aside); 158 IAA, Sch 2, Art 36(1)(a)(iii).  
4. the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the parties’ agreement (unless that agreement breached a mandatory provision of the Model Law), or failing such agreement was not in accordance with the Model Law; 159  IAA, Sch 2, Art 36(1)(a)(iv).
5. the subject matter of the dispute is not capable of settlement by arbitration under the laws of Australia; 160 IAA, Sch 2, Art 36(1)(b)(i). or 
6. the award conflicts with public policy in Australia. 161 IAA, Sch 2, Art 36(1)(b)(ii). An interim measure or an award will be contrary to public policy if the making of the interim measure or award was induced or affected by fraud or corruption, or where a breach of the rules of natural justice occurred in connection with the making of the interim measure or the award .162 IAA, s19.  

10.2.1 As noted above, Australia is a signatory to the New York Convention. Foreign awards are enforceable in the Federal Court of Australia pursuant to section 8(3) of the IAA. The only grounds on which the Federal Court of Australia may refuse to enforce a foreign award are set out in section 8(5) and section 8(7) of the IAA, which provide for the court to refuse enforcement where: 

1. a party to the arbitration agreement, under the law applicable to them, was under some incapacity at the time when the agreement was made;  163   IAA, s 8(5)(a).
2. the arbitration agreement is not valid under the law expressed in the arbitration agreement to be applicable to it or, where no law is so expressed to be applicable, under the law of the country where the award was made; 164   IAA, s 8(5)(b).
3. that party was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present their case in the arbitration proceedings; 165 IAA, s 8(5)(c).   
4. the award deals with a difference not contemplated by, or not falling within the terms of, the submission to arbitration, or contains a decision on a matter beyond the scope of the submission to arbitration 166 IAA, s 8(5)(d). (note that where the issues not contemplated by or falling within the submission to arbitration can be separated then the part of the award dealing with matters properly within the arbitral tribunal’s jurisdiction may be enforced); 167 IAA, s 8(6).   
5. the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; 168  IAA, s 8(5)(e).  
6. the award has not yet become binding on the parties to the award or has been set aside or suspended by a competent authority of the country in which, or under the law of which, the award was made; 169 IAA, s 8(5)(f).  
7. the subject matter of the difference between the parties to the award is not capable of settlement by arbitration under the laws in force in the State or Territory in which the court is sitting; 170 IAA, s 8(7)(a). or 
8. to enforce the award would be contrary to public policy (including, without limitation where the award was induced or affected by fraud or corruption or a breach of the rules of natural justice occurred in connection with the making of the award). 171  IA, ss 8(7)(b) and 8(7A).