International Commercial Arbitration - the role of the Courts; the enforcement of arbitration awards and anti-arbitration injunctions
1. At the outset I would like to congratulate Justice Clyde Croft and Ms Bronwyn Lincoln for their Paper. Their Paper
provided a comprehensive insight into some various issues involving the role of the courts.
2. I wish to comment on one general aspect, namely, the need for court involvement in the arbitral process to be minimal.
Looking at it from a service provider’s point of view, the judge and Ms Lincoln consider that whilst court participation
is often beneficial and supportive of arbitration, the degree of involvement must be carefully considered to attract custom: there
must be enough court involvement to support and encourage arbitration but not so much as to stifle it. There is obviously a balance:
too much intervention will encourage litigation and layers of appeals; too little, will fail to prevent misconduct and fail to ensure
fairness and justice in the arbitral process.
3. The degree of scepticism traditionally involved in judicial attitudes to arbitration process is now at an end. Changes
in law regulating the conduct of arbitrations, re-defining of the role of the courts, and perhaps cultural change, has led to a
change in attitude of the courts.
4. The Singapore Court of Appeal in Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd [2007] SGCA 28 at [59]- [62] recently observed:
These cases must be read in the context of the current judicial climate which dictates that courts should not without good reason
interfere with the arbitral process, whether domestic or international. It is incontrovertible that international practice has
now radially shifted in favour of respecting and preserving the autonomy in the arbitral process in contrast to earlier practice
of enthusiastic curial intervention…This minimal interference policy underscores two further considerations. The first is
the need to support arbitration as a useful and efficient alternative dispute resolution (ADR) to settle commercial disputes…Aggressive
judicial intervention can only result in the prolonging of the arbitral process and encourage myriad unmeritorious challenges to
arbitral award by dissatisfied parties. Left unchecked, an interventionist approach can lead to indeterminate challenges, cause
indeterminate costs to be incurred and lead to indeterminate delays.
5. The courts have recognised the important purpose of arbitration especially in commercial disputes to avoid delays and
to allow for the effective decision making simply and without much elaboration.
6. Arbitration seems to have become a preferred method of dispute resolution for parties involved in international trade.
Undoubtedly, the parties who choose arbitration see it as offering a number of distinct advantages over litigation in the national
courts – certainty and neutrality of forum, speed, low costs, consistency, procedural simplicity and sometimes a technical
competency of the decision maker. These advantages will be lost if extensive judicial intervention by national courts is allowed.
7. The courts should facilitate international trade and commerce by encouraging the use of arbitration as a method of resolving
disputes, rather than narrowly interpreting an arbitration agreement, or by taking an overly technical approach to the conduct
of the arbitration.
8. However, whilst the court should be careful in respect to international arbitration to only intervene to the extent necessary,
the court should not be timid if intervention is required. The confidence of the international community in arbitration depends
on the expectation that the process will work according to the rules. This will sometimes require the exercise of a supervisory
jurisdiction by the court. This jurisdiction assists in maintaining the integrity of the system. The parties and the community
will come to expect that any error is capable of correction. The court must then ensure that its own procedures allow for a quick
and efficient resolution of the dispute before the court, so that any error is corrected in a timely manner.
9. This supervisory role of the courts also ensures a consistency of approach and this aspect of the court’s role
should not be forgotten. The courts publish their decisions, providing guidance which would otherwise not exist if the courts did
not have the ability to regulate arbitral conduct. In other words, the court system sets out and explains the legal principles
applicable to the many individual situations arising in international commerce. It is important to have the courts set out the
principles to give guidance to the international community involved in arbitrations and strive for consistency as far as possible
in matters involving international trade disputes.
10. On this aspect of consistency, I wish to make one observation on the proposal for the State and Federal Courts to have
concurrent jurisdiction in the supportive and supervisory role just referred to.
11. It goes without saying that if there is concurrent jurisdiction the court should strive for consistent jurisprudence.
There is no reason why this will not occur as it has occurred in other areas where the State and Federal Courts exercise concurrent
jurisdiction in respect of the interpretation of Commonwealth statutes. The High Court of Australia has often stated that intermediate
appellate courts and trial judges in Australia should not depart from decisions of other intermediate appellate courts in another
jurisdiction on the interpretation of Commonwealth legislation or uniform national legislation unless they are convinced the interpretation
is plainly wrong: see for example Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at [135]. Obviously all judicial decision makers will and should strive for consistent jurisprudence, and assist in the proper
supervision of the arbitral process.
12. I would like to make one other comment in relation to the extent to which there should be judicial intervention, and that
relates to the giving reasons by arbitrators.
13. As most of you know a recent decision of the Victorian Court of Appeal considered the standard and adequacy of arbitral
award reasons: Oil Basins Ltd v BHP Billiton Ltd [2007] VSCA 255; (2007) 18 VR 346. Effectively the decision lays down a requirement for arbitrators to give reasons in certain circumstances to the same standard
as required from a judge. There has been some criticism of this decision, reference being made to exposition by then Tom Bingham
in an address in which he set out the different requirements of reasons by a court and reasons of an arbitrator: Bingham, “Differences
between a Judgment and a Reasoned Award” (1997) 16 The Arbitrator 19. I do not wish to enter upon that debate. However, a question may arise as to the remedy available if reasons provided by an
arbitrator are not adequate. Some concern has been expressed that court may take the approach that the failure of an arbitrator
to provide adequate reasons for a decision may amount to a breach of natural justice occurring in connection with the making of
an award, and would render the award “in conflict with public policy of Australia” for the purposes of section 19 of
the IAA. By taking this approach, and by insisting upon reasons of the standard dictated by the Victorian Court of Appeal, may
impact adversely upon the usefulness of the arbitral process.
14. I finish with this final observation. Dispute resolution of international trade dispute requires the corporation between
judges and the arbitral process – it already exists, but it can always be improved. One aspect the courts must consider
is developing efficient and speedy procedures for dealing with its supportive and supervisory role upon the courts being asked to
become involved in the arbitral process.
