ReSolution Issue 13, May 2017 | Page 20

Confidentiality of arbitration related court proceedings
The current default position under section 14F of the Act is that court proceedings on arbitral matters are to be public. This approach is inconsistent with the confidentiality normally afforded to arbitral proceedings and with other international legislative approaches that seek to preserve such confidentiality. Other jurisdictions have struck the balance between open justice and confidentiality of arbitral proceedings in a way that preserves confidentiality by default. Section 14F is also inconsistent with the move to preserving the privacy of arbitral proceedings in the Arbitration Amendment Act 2007. Reforming section 14F by introducing a rebuttable presumption of confidentiality will support the existing principles under section 5 by making New Zealand a more attractive destination for international arbitration.
NZDRC and NZIAC have long advocated for a presumption of confidentiality in Court proceedings in relation to arbitral matters. Our arbitration rules expressly provide, in terms of s14H(d) of the Act, that the parties agree that any Court proceedings related to the arbitration must, to the full extent permitted by the law, be conducted in private. However, the present default position is that a Court must conduct proceedings under the Act in public and any agreement that proceedings be conducted in private such as that provided for in our rules is just one of the matters that the Court must consider in coming to a determination.
Narrowed grounds for setting aside an arbitral award
Articles 34 and 36 of Schedule 1, concerning the enforceability of an arbitral award, were in issue in the Supreme Court of New Zealand decision of Carr v Gallaway Cook Allan [2014] NZSC 75 where the definition of “arbitration agreement” was disputed.
In that case, the Supreme Court held that an arbitration agreement providing for invalid recourse against an arbitral award (appeal on a question of fact) is not a valid arbitration agreement.
The decision in Carr highlighted the need for amendment to these articles to move in line with the foreign approaches to the adoption of the Model Law provisions. The narrowing of articles 34(2)(a)(i) and 36(1)(a)(i) will limit the Court’s scope to set aside or not recognise/enforce an arbitral award which might otherwise be unenforceable due to procedural provisions being in conflict with the Act in circumstances where there is clear agreement of the parties to submit a dispute to arbitration. The proposed amendment adopts language different from the Model Law but is the minimum change necessary to correct the problem raised in Carr.
Amendments to articles 34(2)(a)(iv) and 36(1)(a)(iv) would address the views of the majority in Carr that the language regarding non-derogation in article 34(2)(a)(iv) has no wider application beyond Schedule 1, and would bring New Zealand law into line with foreign legislation. The article 34(2)(a)(iv) equivalents in Australian legislation (International Arbitration Act 1974 and the Commercial Arbitration Acts in each State), Hong Kong’s Arbitration Ordinance 2011, and the Singapore International Arbitration Act 1994 apply to the entire Act, not only the Model Law parts of it like our Act. The current limitation under the Act to derogation under Schedule 1 only is flawed and the amendment would ensure that the principle of non-derogation is protected and given proper effect in setting aside and enforcement proceedings.
The consequence of failing to raise a timely objection to an arbitral tribunal’s jurisdiction
Clearly defining the consequence of not raising an objection to an arbitral tribunal’s jurisdiction to hear and determine a dispute in accordance with article 16(3) of Schedule 1 will ensure that objections are raised in a timely manner and cannot be heard or given effect to out of time.