International arbitration in your backyard: The new ACICA Arbitration Rules

By Doug Jones AM RFD and Andrew Barraclough.

Key Points:
The new ACICA Rules are based on the well known and tested UNCITRAL Arbitration Rules, and offer an interesting, sophisticated and welcome addition to existing sets of rules.

What is ACICA?

The Australian Centre for International Commercial Arbitration (ACICA) is a non-profit public company established in 1985, with the objectives of supporting and facilitating international arbitration, and promoting Sydney and Australia as venues for international commercial arbitration.

ACICA carries out a number of functions and activities. Its main role as an arbitration institution is to administer and support international arbitrations taking place in Australia (or overseas). For that purpose ACICA maintains a panel of international arbitrators and a list of qualified arbitration practitioners. It further assists with hearing rooms and provides translation, secretarial, transcription and IT services where requested.

ACICA is also involved in a wide range of educational activities including holding seminars and conferences to enhance the knowledge and understanding of international arbitration. The current President of ACICA is Professor Michael Pryles.

ACICA Arbitration Rules

On 12 July 2005 the new ACICA Arbitration Rules were released (click here for a copy). The rules were designed to give further support to ACICA's role as an administrator of arbitrations. The new rules provide an advanced, efficient and flexible framework for the conduct of arbitrations.

The ACICA Rules are to a large degree based on the UNCITRAL Arbitration Rules 1985, one of the most widely spread and thoroughly tested rules in the world, which were amended and modified to allow for administrative support through ACICA.

Notable features include:

• parties may commence arbitration proceedings by submitting a Notice of Arbitration to ACICA. A Statement of Claim can be submitted at a later stage, which enables parties to quickly commence arbitration proceedings where time is pressing;
• where there are multiple parties (multiple claimants or multiple respondents) those parties must act jointly when appointing arbitrators. Most arbitral rules are silent on this point which can create confusion;
• where there is no agreement between the parties, ACICA will determine the number of arbitrators - either one or three depending on the circumstances of the dispute. This flexibility helps to minimise costs;
• where the parties fail to appoint an arbitrator in time, ACICA will appoint the arbitrator(s);
• where parties do not agree upon the challenge of an arbitrator or where the arbitrator does not accept the challenge, ACICA will determine the challenge;
• there are detailed provisions governing interim measures which draw on recent UNCITRAL Working Group deliberations. They provide for, inter alia:
  • an expanded definition of "interim measures";
  • criteria which must be established before an interim measure can be ordered; and
  • provisions for the modification, suspension and termination of an interim measure;
• proceedings are expressed to be both private and confidential, unless the parties have a contrary agreement in writing. Many arbitral rules are silent on this issue of confidentiality which can be problematic in light of the High Court of Australia's decision in Esso v Plowman (1995) 183 CLR 10.
  
  Exceptions to the obligation of confidentiality include:
  • disclosure of information for the purposes of applications made to competent courts, including for enforcement;
  • disclosure of information/documents pursuant to the order of a court of competent jurisdiction;
  • obligations under any mandatory laws considered applicable by the arbitral tribunal; and
  • compliance with regulatory bodies (such as the ASX);
• unless the parties agree otherwise, arbitrators shall take guidance from the International Bar Association's specialised Rules on the Taking of Evidence in International Commercial Arbitration;
• upon request, ACICA will arrange facilities such as hearing rooms, secretarial assistance and interpretation facilities;
• ACICA will participate in determining the remuneration of arbitrators where the parties and the arbitrators cannot agree; and
• ACICA's fees, stipulated in Appendix A of the rules, compare favourably with those of national and international arbitration institutions.

ACICA model arbitration clause

Parties can at any stage agree to arbitration over litigation. However once a dispute has arisen, reaching an agreement on any issue can be difficult. Therefore when negotiating a contract careful consideration should be given to inserting an arbitration clause. ACICA now has a standard model clause which it recommends for use in commercial contracts:

"Any dispute, controversy or claim arising out of, relating to or in connection with this contract, including any question regarding its existence, validity or termination, shall be resolved by arbitration in accordance with the ACICA Arbitration Rules. The seat of arbitration shall be Sydney, Australia [or choose another city]. The language of the arbitration shall be English [or choose another language]. The number of arbitrators shall be one [or three, or delete this sentence and rely on article 8 of the ACICA Arbitration Rules]."

Article 8 provides for ACICA to determine the number of arbitrators, taking into account all relevant circumstances. This may be desirable if the size and complexity of the dispute are not known at the time the contract is drafted.

The ACICA Rules are an interesting, sophisticated and welcome addition to the group of arbitration rules that are available to parties when drafting their arbitration clauses.

For further information, please contact Doug Jones AM RFD.