Commercial Arbitration Act 2010 (NSW) passed by Parliament

The Commercial Arbitration Act 2010 (NSW) was passed by the Parliament of New South Wales on 22 June and assented to on 28 June and came into effect in New South Wales on October 1^st, 2010.

It dramatically alters the way arbitration is conducted in NSW. The Act is the first piece of legislation put into effect as a result of the overhaul of Australia's domestic arbitration regime. This Act is the first to adopt the uniform national laws that were announced by the Standing Committee of Attorneys-General on 7 May this year. All states and territories of the Commonwealth have agreed to enact similar legislation to replace the Commercial Arbitration Act 1984.

The Act repeals the Commercial Arbitration Act 1984 (NSW) that was deemed unable to provide a flexible, efficient and cost effective method of dispute resolution, and lacked finality and certainty because of judicial intervention. The object of the Act is to facilitate the fair and final resolution of commercial disputes by impartial arbitral tribunals.

The Act creates an alignment of domestic arbitration processes with international arbitration processes using the UNCITRAL model as a guide. Consistent with the UNCITRAL approach, the Act gives substantial enhancement to arbitrators' powers with a reduction of the option to seek Court intervention, the Act increases efficiency and finality by limiting the role of the Courts.

By way of example, a right of appeal is only available if both parties agree or opt-in, a reverse of the pre-existing situation. There are very limited express bases for the removal of arbitrators or nominees. Arbitrators have been given powers to order interim relief and specific performance.

The new Act applies to arbitration of disputes which have arisen since the commencement date of the operation of the Act, October 1^st, 2010.