This article discusses the appeal rights of parties under the new uniform commercial arbitration law with specific reference to the Commercial Arbitration Act 2011 (SA) which commenced operation on 1 January 2012 and is part of a wider legislative framework proposed for the uniform conduct of domestic commercial arbitration throughout Australia. Under the old commercial arbitration law, appeals to Courts could be made either with the agreement of the parties to the arbitration agreement or with permission of the Court. Under the new arbitration law an appeal can only be made if the parties 'opt in' and agree no later than 3 months from the making of the award to preserve appeal rights and obtain leave of the Court. Current arbitration agreements may require amendment to preserve parties' appeal rights.
The Commercial Arbitration Act 2011 (SA) (the New Act) commenced operation on 1 January 2012 and is part of a wider procedural framework for the uniform conduct of domestic commercial arbitration throughout Australia. Similar legislation has also been passed in:
(together, the New Acts).
Bills are before Parliament in Queenslandand Western Australia. The Australian Capital Territory is yet to introduce a Commercial Arbitration Bill into Parliament. Before the commencement of the New Acts, domestic commercial arbitration was governed in each state by the old Commercial Arbitration Acts (Old Acts). The New Acts are fundamentally different to the Old Acts. Rather than being based on the UK arbitral law and system they are based on and supplement the United Nations Commission on International Trade Law Model Law on International Commercial Arbitration (UNCITRAL).
Under the Old Acts:
Under section 34A of the New Acts, an appeal can only be made if the parties 'opt in' and agree no later than 3 months from the making of the award to preserve appeal rights and obtain leave of the Court. It is unlikely the successful party will agree to an appeal after the award and therefore it makes sense for the parties to agree by way of the arbitration agreement (usually included in the relevant contract) to 'opt in' and reserve appeal rights.
The New Acts are not retrospective. Two important issues arise for consideration.
Arbitration agreements should be either amended (if this is practical) or drafted on an 'opt in' basis to preserve the parties' right to appeal. Otherwise, the parties' recourse against arbitration awards will be limited to either obtaining agreement from the successful party within 3 months of the award, or when the following defects in the arbitration process exist:
There are a range of other 'opt in' and 'opt out' procedural matters dealt with under the New Acts where the parties can reserve jurisdiction to the courts.
Current arbitration agreements are unlikely to contain an 'opt in' agreement to reserve appeal rights. In relation to a dispute which is to be arbitrated, be aware that as a result of the change in law:
We are able to assist in drafting or amending arbitration clauses to ensure compliance with the New Acts to preserve appeal rights. Please contact us if you require our assistance.
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