Important amendments to Arbitration Act 1996 (New Zealand)

POSTED BY Timothy Lindsay
Edith Offner
08 November 2016

posted in Dispute Resolution | AMINZ | Legislation | Arbitration



Changes confirm decisions made by “emergency arbitrators” are enforceable as arbitral awards

A number of amendments to the Arbitration Act 1996 (Arbitration Act) will come into force on the 1 March 2017. The key changes are:

  • The inclusion of “emergency arbitrators” (and arbitral institutions) in the definition of “arbitral tribunal”. This has important implications for the enforceability of awards and orders made by so-called emergency arbitrators.
  • The inclusion of machinery in the Act that will likely lead to the Arbitrators and Mediators Institute of New Zealand or, the New Zealand Dispute Resolution Centre (AMINZ and NZDRC - New Zealand’s leading ADR bodies) being designated the default appointment authority for the appointment of arbitrators for New Zealand seated arbitrations.

These changes bring New Zealand in line with international best practice, and enhance the efficient conduct of arbitral proceedings. They raise New Zealand’s profile as a venue for international arbitration and improve the enforceability in New Zealand of orders made by emergency arbitrators (whether seated in New Zealand or elsewhere).

Emergency arbitrations—confirming the enforceability of awards and orders made by emergency arbitrators

Over recent years all of the world’s leading arbitral institutions have included in their rules the ability for parties to seek, prior to the constitution of the arbitral tribunal, the appointment of an “emergency arbitrator” to assist parties where they need urgent interim relief. Beginning with the Singapore International Arbitration Centre (SIAC) in 2010.[1] Followed by the International Chamber of Commerce (ICC) Court of Arbitration in 2012,[2] the London Court of International Arbitration (LCIA),[3] the International Centre for Dispute Resolution of the American Arbitration Association (ICDR),[4] the Stockholm Chamber of Commerce (SCC)[5] and the Hong Kong International Arbitration Centre (HKIAC)[6]. The critical feature of the emergency arbitrator facility is that it enables parties to avoid the need to go to a domestic court to obtain interim or conservatory measures.[7] This reinforces parties’ election to resolve their dispute privately without reference to national courts, and also ensures that arbitral proceedings are as efficient and effective as possible.

However, it has been a matter of some controversy whether awards and orders made by emergency arbitrators have the same binding and enforceable status as awards made by arbitral tribunals.

To resolve this uncertainty, in 2012 the Singapore Parliament introduced amendments to the International Arbitration Act (Singapore) to make clear that awards and orders given by emergency arbitrators (whether made in Singapore seated arbitrations or elsewhere) are enforceable in Singapore. Numerous other leading arbitral jurisdictions (e.g., Switzerland, Hong Kong, Austria) have followed suit.[8] New Zealand’s amendments to the Arbitration Act do likewise.

The key change is that the definition of “arbitral tribunal” in the Arbitration Act has been extended to include any emergency arbitrator appointed either the arbitration agreement that the parties have entered into or the arbitration rules of any institution or organization that the parties have adopted. This ensures that awards and orders made by emergency arbitrators (whether in New Zealand or foreign seated arbitrations) are enforceable in New Zealand.

Comment: Having argued and successfully obtained emergency orders in one of the first emergency arbitrations under the ICC Rules, this is a welcome development. When electing to arbitrate their disputes parties are (for good reasons) choosing to do so privately so as to avoid court procedures. The ability to obtain urgent relief from an emergency arbitrator prior to constitution of the arbitral tribunal removes the anomaly of having to seek such relief from the very courts parties are seeking to avoid. Confirming the status of emergency arbitral tribunal awards as being on the same level as traditional arbitral awards reinforces arbitration as the “one stop shop” parties intend it to be.

Appointment authority to make arbitrator appointments

A new provision to be inserted into the Act allows the Ministry of Justice to appoint a suitably qualified body to assist with the appointment of arbitral panel members under Article 11 (3) – (6) of Schedule 1, rather than the High Court. If the appointed body fails to appoint an arbitrator within 30 days or a dispute arises as to the appointed body’s process, the parties may appeal to the High Court. The structure of the appointed body is yet to be determined, but it is widely expected that AMINZ —New Zealand’s leading arbitration and ADR body— will become the default appointment authority under this new machinery.

Lowndes Jordan—arbitration specialists

Tim Lindsay returned to Lowndes Jordan in August 2016, having been a partner in one of the world’s leading arbitration practices at Dechert LLP and leading that firm’s international arbitration practice in London. For the past decade Tim has acted as counsel in dozens of international and domestic arbitrations under all of the leading arbitration rules. He has also been at the forefront of policy development in the international arbitration field, including the revision to the ICC Rules (2012) and arguing one of the first emergency arbitrations held under the ICC rules.

[1] SIAC Rules, Rule 30
[2] ICC Rules, Article 29 and Appendix V.
[3] LCIA Rules, Article 9B
[4] ICDR Rules, Article 6
[5] SCC Rules, Rule 30 and Schedule 1.
[6] HKIAC Rules, Article 23 and Schedule 4.
[7] All leading international arbitral rules and the arbitration legislation of leading arbitral jurisdictions expressly permits parties to seek interim and conservatory measures from domestic courts prior to the constitution of an arbitral tribunal.
[8] Switzerland, Austria, and Hong Kong have enacted similar legislation while the US District Court, in Yahoo! Inc v Microsoft Corp no 13 CV 7237, 2013, upheld an award of injunctive relief issued by an emergency arbitrator appointed by the American Arbitration Association.

POSTED BY Timothy Lindsay
Edith Offner
08 November 2016

posted in Dispute ResolutionAMINZLegislationArbitration



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