12 Pages

International commercial arbitration

What makes commercial arbitration international? This question is important because there are international conventions which establish special rules for facilitating international commercial arbitration and for the recognition and enforcement of international arbitral awards. There are two major conventions which have been implemented in Australia, namely: the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (commonly known as the New York Convention)6 and the UNCITRAL Model Law on International Commercial Arbitration.7 The New York Convention is restricted to the imposition of duties on State parties to recognise and enforce foreign arbitral awards. The UNCITRAL Model Law is a more extensive code. The New York Convention does not actually use the term ‘international’ but applies its provisions to ‘arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought’ and to ‘arbitral awards not considered as domestic awards in the State where their recognition and enforcement are sought’.8 In keeping with this clause, s 3 of the International Arbitration Act states that a ‘foreign award’ means ‘an arbitral award made, in pursuance of an arbitration agreement, in a country other than Australia, being an arbitral award in relation to which the convention applies’.9 The UNCITRAL Model Law gives a more detailed account of what constitutes ‘international’ arbitration. Under Article 1(3), an arbitration is international if, at the time of the conclusion of the agreement, the parties have their places of business in different States. Where the parties have their places of business in the same State, the arbitration will yet be international if the designated place of arbitration, the place where a substantial part of the commercial obligations have to be performed or the place with which the subject matter of the dispute is most closely connected is outside such State. Finally, even if all of the above criteria remain unmet, the arbitration will be international if ‘the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country’.10