Proposed changes to arbitration law

The Arbitration Amendment Bill 2017 has passed its first reading and is currently before select committee. The Bill is a private member’s Bill introduced by National MP Paul Foster-Bell. It is intended to clarify the law of arbitration, respond to recent cases, and make New Zealand conform more closely to international arbitration standards.

The Bill clarifies that trust disputes can be resolved through arbitration, rather than the usual route through the High Court which can be prolonged and painfully public.

The default position under the current Act is that court proceedings on arbitration matters are public. The Bill introduces a rebuttable presumption of confidentiality to bring New Zealand law in line with international standards. The Bill allows for cases to be reported if they are of major legal interest. However, published cases must be redacted to conceal any matter which a party reasonably wishes to keep private. There is also the option for a court to delay publication for up to 10 years to protect the interests of the parties.

The Bill also closes a loophole which was problematic in the recent case of Astro v Lippo in the Singapore Court of Appeal. The Bill clarifies that any challenges to jurisdiction must be made during the arbitration proceedings and, if not made in a timely manner, cannot be raised on appeal.

The Bill also limits the scope for a Court to set aside or not enforce an award made in arbitration on procedural grounds when there is a clear agreement of the parties to submit a dispute to arbitration. This is in response to the case of Carr v Gallaway Cook Alan where the Supreme Court set aside an award on technical grounds, despite the parties willingly agreeing to arbitration.

The Arbitrators’ and Mediator’s Institute of New Zealand (AMINZ) support the Bill. John Walton, president of AMINZ, states that while the amendments are technical, they are important to the international commercial arbitration community which will notice that New Zealand is responsive to arbitration issues. This will promote New Zealand as an international destination for arbitration disputes.

The Bill is currently before the Justice and Electoral select committee and submissions are being accepted until 22 June 2017.

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