Australia tipped for arbitration upswing

Australia’s proximity to Asia and booming international trading activity make it the next arbitration hotspot.

An increasing number of companies are choosing arbitration to settle disputes to avoid ending up in local court of their business partner, said King & Wood Mallesons senior associate Daisy Mallet, who specialises in international arbitration and commercial dispute resolution. 

“International arbitration takes the dispute out of the jurisdiction of either party’s local courts, and requires it to be resolved by one or three independent, impartial persons, chosen by the parties,” she said.  “This is often because companies are not comfortable resolving their disputes in the home courts of their trading partner because of lack of familiarity with that jurisdiction’s rules and court procedures.”

Alex Baykitch, partner at King & Wood Mallesons and president of the Australian Centre for International Commercial Arbitration, the nation’s leading international dispute resolution body which turned 30 this week, said the outlook for future arbitration in Australia is bright. 

While Singapore and Hong Kong are attracting a high volume of international arbitrations, Baykitch said Australia is well placed to pick up some of the action, particularly from the US.

“We have a common history, a common language, a common legal tradition and it’s a lot easier to fly to Australia from the US than Singapore, for example,” he said.

“Clients tend to find that choosing arbitration practitioners in Australia is more cost effective than elsewhere in the region,” Mallet added.
Growing international trade, promoted by an increasing number of free trade agreements, is expected to generate a growing volume of arbitration work in the coming years.
“As Australian businesses take advantage of the huge increase in cross border opportunities through initiatives such as free trade agreements, companies should be considering options for dispute resolution earlier in the investment process. This means that decision to opt for international arbitration when entering new markets is something that is likely to increasingly become the norm,” Mallet said.

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