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Focus: Federal Court becomes 'one stop shop' for international arbitration

30 October 2009

In brief: A Bill passed by the Senate this week will give the Federal Court concurrent jurisdiction with state and territory Supreme Courts in international arbitration matters. Partner Stephen McComish (view CV) and Lawyer Dr Sam Luttrell report.

How does it affect you?

  • The Federal Justice System Amendment (Efficiency Measures) Bill (No. 1) 2008 (the Bill) will:
    • eliminate the need to apply to multiple state and territory Supreme Courts for orders in aid of international arbitrations being conducted in Australia that have a connection to more than one state or territory; and
    • allow parties to commence a single Australia-wide Federal Court proceeding for the enforcement of foreign arbitral awards.

The current system

Until now, state and territory Supreme Courts have had exclusive first-instance jurisdiction over applications for orders in aid of international arbitration and motions to enforce foreign arbitral awards. In practice, this has meant that parties seeking orders in aid of proceedings (such as Mareva injunctions) have had to make parallel applications in multiple Supreme Courts.

At a higher level, although the state and territory Supreme Courts have tended to follow one another on matters of international arbitration, there have been situations where they have arrived at different, and even unique, conclusions when interpreting the International Arbitration Act 1974 (Cth) (the IAA).

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The new system

The Bill, which received Senate approval on 26 October 2009, will (subject to Royal Assent) amend the IAA to give the Federal Court concurrent jurisdiction with state and territory Supreme Courts in international arbitration matters, including applications:

  • for the default appointment and removal of arbitrators;
  • to set aside awards rendered in international arbitrations conducted in Australia; and
  • for the enforcement of foreign arbitral awards under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958.

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Consequences for users of international arbitration

In proceedings for the enforcement of a foreign award, or in respect of other steps that might need to be taken in aid of an international arbitration in more than one state or territory, the parties will be able to go to the Federal Court as a 'one stop shop'. This will make international arbitration in Australia cheaper and more efficient. In the longer term, it should aid the development of a coherent Australian body of common law on international arbitration.

The Bill is the first of a number of proposed changes to the IAA. These changes, which include amendments that will incorporate recent developments in international arbitration law and practice, are part of a broader push by the Commonwealth Attorney-General to make Australia a more attractive place for parties to conduct international arbitrations.

For further information, please contact:

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