23 Nov 2010

International Arbitration Update: trends in the Asia-Pacific

Doug Jones, the head of Clayton Utz's International Arbitration group, and Sally Harpole from Sally Harpole & Co discuss the trends affecting the growth of international arbitration in the Asia-Pacific region.

The Clayton Utz International Arbitration Lecture: Trends in the Asia-Pacific
Doug Jones, Head of International Arbitration Group
Sally Harpole, Sally Harpole & Co, Hong Kong
David Bushby, BRR Media

David Bushby

Welcome to BRR Media. We're joined by Doug Jones who heads up the International Arbitration practice at Clayton Utz. He is also president of the Australian Centre for International Commercial Arbitration. Joining him also is Sally Harpole who runs her own practice as an international arbitrator, mediator and lawyer and has over 30 years of China experience. Thanks for joining us.

Doug Jones

You're very welcome.

Sally Harpole

It's wonderful to be here.

David Bushby

Doug, New South Wales looks to become a preferred destination for international arbitration. With the recent opening of the International Dispute Centre in Sydney and also New South Wales' recent revamp of commercial international arbitration laws, it certainly looks like exciting times.

Doug Jones

It is. One of the interesting features about Australia is that for many years it has been a logical place for international parties to come to find a neutral venue for arbitration, but the development of Australia as a seat of arbitration is still a work in progress.

The opening of the Sydney Centre provides a physical impetus for the development of international arbitration services in Sydney and the amendments to the Commonwealth Act for international arbitration and the State Act for domestic arbitration provide a very useful springboard for the development of arbitration in Australia and we hope, along with the other centres in Asia, that Australia will become a substantial venue for the hearing of international disputes between parties trading in the region.

David Bushby

Doug it's early days yet, but are businesses moving away from the courts and back to arbitration and if so, what's the attraction?

Doug Jones

One needs to separate international and domestic arbitration to answer that question. In the international arbitration context, courts simply aren't an option because you can't take a judgment from an Australian court to China and expect to have it easily enforced, whereas an international arbitration award is immediately recognised in China as an enforceable binding decision. So international arbitration has more or less a monopoly in the resolution of international commercial disputes.

Domestically unfortunately arbitration has lagged behind the commercial courts and other forms of dispute resolution such as adjudication as a preferred method of dispute resolution. By adopting the model law which we had for international arbitration for domestic arbitration, we now have the opportunity to reform domestic arbitration and provide it with a capacity to deliver to parties a different, efficient, expeditious means of binding dispute resolution not previously provided. It's going to take a little while for that to catch on but I'm very hopeful it will.

David Bushby

Sally the Asia-Pacific region has long been a hot spot for international arbitration. What key trends are you seeing in the Asia-Pacific market and what can Australia do to adapt to those trends?

Sally Harpole

If I had to put my finger on a single trend that I see evolving in the Asia-Pacific region it would be the internationalisation of arbitration.
Traditionally New York, London, Paris have been regarded as the world centre of arbitration, but I think we are now well into a period where the Asia-Pacific is also a venue for international arbitration involving international parties, not only Asian parties handling regional arbitration.

First of all we can see that the volume of arbitrations has been increasing significantly. Just to name one example, in 2008 there were 65,000 arbitrations counted. A large number of those were domestic arbitrations, but we can see that a very strong arbitration culture is evolving in China alone.

Apart from that the very widespread adoption of the UNCITRAL Model Law - which I understand is now significantly featured in New South Wales and has been adopted in Hong Kong, Singapore, Malaysia, Japan and Korea - these developments are very significant legislative efforts by the jurisdictions to harmonise with international norms and practices.

David Bushby

So it sounds like the framework is in place. What now needs to occur to turn Australia's vision as a destination for international commercial arbitration into reality?

Sally Harpole

I certainly would encourage the Centre to take every opportunity to assist others in familiarising themselves with what it has to offer. The excellent legal environment in New South Wales, of course, is very important. The support of the judiciary for arbitration is extremely important, essential I would say, as is the legal framework and then, of course, the Centre and what it can offer. It's important to let international parties be aware of what is here for them to consider using this as a venue for their arbitrations.

David Bushby

Doug Jones and Sally Harpole, thank you again for joining us today.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.