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Thursday, 24 October 1974
Page: 1973


Senator GREENWOOD (Victoria) - The Opposition will vote for the second reading of the Arbitration (Foreign Awards and Agreements) Bill 1 974. There is some concern on the part of the Opposition about the method by which the implementation of this Convention on the Recognition and Enforcement of Foreign Arbitral Awards is being carried through. But the Opposition recognises that there is value to Australia in acceding to the Convention. There are several points which I think should be made. The first is that Australia decided in 1969 to accede to the Convention. The decision to accede to the Convention was made by the then Commonwealth Government in consultation with the State governments as there was a general benefit resulting to Australia from Australia adhering to the arrangements of the Convention.

The second point is that the method of accession to the Convention which was then agreed upon was by the implementation of the Convention through State legislation. Pursuant to that general arrangement, a Commonwealth draft of legislation which could be adopted uniformly by the States was sent to the States in, I think, mid- 1971. I am not aware of what events have taken place since mid- 1971, except that from time to time the Commonwealth was seeking information from the States as to how they were progressing with the implementation of the legislation. It was in that condition that I recall the matter rested when there was a change in government at the end of 1972. It is obviousand again I say that I do not know whether any steps have been taken between the Australian and State governments since late 1972 to implement it on a State basis- that the Government has introduced the Commonwealth legislation believing that this is the effective way in which the Convention should be acceded to and the provisions of the Convention made available to citizens of this country.

The Opposition supports the principle of accession. It indicated that when it was in government. But there is a genuine doubt as to whether a Commonwealth legislative enactment is the most efficacious way of proceeding and whether accession to the Convention and the provision of the abilities which this Convention grants will be provided on a sure constitutional basis. I would be interested to know the way in which the AttorneyGeneral (Senator Murphy) views the constitutional base upon which the legislation is framed, because it does appear that the opportunity to enforce arbitration agreements or to rely upon awards made in foreign arbitrations is a right which citizens have in the conduct of their litigation within Australia. There is no doubt that in terms of overseas trade and commerce it is unquestionably of advantage to the parties to agreements with importers or exporters of other countries to be able to fix upon an arrangement whereby disputes which might arise between them pursuant to the contractual arrangements which they are making should be determined by arbitration or by an arbitrator appointed in a manner which is agreed upon and to fix clearly so that there can be no equivocation the law which is to apply for the resolution of their disputes. That is unquestionably a facility which is advantaged by the provisions of this Convention.

Having said that, it is equally apparent that if a person is suing in accordance with the law of the country in which he is resident in order to enforce what are his rights under the law of that country, he may be met with an application that would seek to defeat his claim and that is that he should rely upon the provisions of an arbitration agreement to which he has entered. In that sense there is a domestic matter which may have application so as to raise the question whether or not there is a constitutional base for the Commonwealth legislation. In short, we recognise that there are doubts. Probably any advice which any government received as to whether or not the Commonwealth had the power to enact this legislation is advice which would have some element of uncertainty about it until such time as the High Court was called upon to adjudicate. The steps which the Commonwealth has taken are steps which the Opposition will not object to.

There are provisions, however, which might usefully be referred to. The Convention was made in New York in June 1958 and came into force with the requisite number of countries acceding to it in 1959. 1 notice from the AttorneyGeneral's second reading speech that some 41 countries have acceded to the convention. Information which was secured for me from the Parliamentary Library indicates that some 50 countries had acceded to the convention.


Senator Murphy - This has been kicking around for a while.


Senator GREENWOOD -The information that came to me was that there were 50 countries as at the end of 1973. I am interested to know that the point is adverted to because I notice that one of the provisions of the legislation enables a certificate to be given by the Secretary of the Department of Foreign Affairs which will indicate conclusively whether or not a nation is a Convention country adhering to the Convention. It is highly important naturally that the information should be accurate. The present situation, of course, is that citizens of Australia who enter into agreements which contain arbitration clauses in respect of their overseas transactions do have means of enforcement of foreign arbitral awards, but that is a procedure which varies in Australia from State to State. It is also a procedure which, whether one relies on the general common law or the facilities which various State legislation gives, depends upon fairly complicated and often cumbersome and, therefore, not worthwhile procedures whereby one has to prove the agreement and the making of the award. Frequently it is a matter of concern to persons who sense that they have rights which are being denied because of conduct of the other party and they are not able effectively to enforce the provisions of the agreement to which they have entered.

These are part of the background considerations which make it desirable for Australia to have the facility which this Convention provides and which its implementation in Australia will give to citizens who want to avail themselves of the provisions. The benefits of adhering to the Convention are set out in the explanatory memorandum which accompanied the Bill and I simply state them. The Convention provides a single procedure for enforcement of foreign arbitral awards, requires the recognition and enforcement of foreign arbitral agreements, provides a uniform law throughout Australia with regard to these matters and, by adhering to the Convention Australians will have similar procedural advantages with regard to arbitral awards and agreements in the jurisdictions of other contracting countries. lt is interesting to see the way in which the provisions are carried through. In the first place where proceedings are instituted by a party to an arbitration agreement those proceedings shall be stayed by the other party to the agreement if application is made to a court. The significant factor there is that in ordinary arbitration proceedings under domestic law the court always has a discretion as to whether or not it will stay the proceedings. One result of adherence to the Convention will be that the provisions of the arbitration agreement will be paramount and the court shall give effect to them by ensuring that the proceedings are stayed. The other way in which the Convention may be utilised is where an award has been made by an arbitrator and it is desired to enforce that award as if it were a judgement of a foreign court, and the provisions of the legislation enable that award to be enforced in a court of a State or Territory as if the award had been made in that State of Territory in accordance with the law of that State or Territory.

Leaving aside some of the constitutional questions which may arise with regard to that, it obviously is a facility which is of great advantage if that award can readily be produced in the courts. I would imagine that the real advantage of the legislation is therefore to be found in the provisions which relate to the evidence of awards and arbitration agreements. A duly authenticated original award or a duly certified copy of an award or agreement may be produced in court in circumstances which seem to be straight forward and simple and which are laid down in the legislation. If those provisions are availed of the document is prima facie evidence of what it purports to be. In those circumstances one can imagine that it must be of immense benefit to those who have increasing trading obligations with overseas countries to know that the courts of Australia can give recognition and enforcement to these awards in a relatively simple and straightforward matter. There is little occasion to embark upon an expatiation which simply acknowledges the merit of a provision on which there is generally bipartisan approach. There is some concern, as surely the Attorney-General (Senator Murphy) recognises, as to whether this is the best way in the circumstances to proceed with the matter. I have no doubt that experience has shown that it is the most expeditious way. I trust that if it is to be challenged in the future it will prove to be legislation which will be upheld because it is legislation which obviously bestows benefit on those who want to avail themselves of its provision. The Opposition supports it.







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