Australia's domestic arbitration law is governed by separate State and Territory legislation across Australia. Although each State and Territory has separate legislation, they have adopted a process whereby for over 20 years the States and Territories have used a common form Act such that, except for some minor inconsistencies in language, domestic arbitration in Australia is conducted under a consistent legislative framework. This framework has been maintained through the Standing Committee of Attorneys-General (SCAG), a forum involving the Federal, State and Territory Attorneys-General (the law minister for their respective governments).

These State and Territory Commercial Arbitration Acts were not aligned with the legislation applying to international arbitration. The law relating to international commercial arbitrations in Australia is the Federal International Arbitration Act, which is largely based on the UNCITRAL Model Law.

SCAG has previously indicated that the States and Territories had been considering replacing the current Commercial Arbitration Acts with a new Commercial Arbitration Act based on the UNCITRAL Model Law. Following their meeting on 7 May 2010, SCAG announced that ministers had now agreed to implement the "model Commercial Arbitration Bill 2010", which will be based on the UNCITRAL Model Law as previously proposed.

Australia's most populous State, New South Wales, has wasted no time in following through on this commitment, with the Bill being presented to the Parliament on 11 May 2010. Apparently, the Bill has already been passed through the lower house.

The Bill is heavily based on the UNCITRAL Model Law, adopting much of the language of the Model Law, and the Bill's section numbers also align with the articles of the Model Law. Significant additions and changes are:

Changes have been made throughout reflecting the domestic role of the legislation and provisions are made to assist the arbitral process.

The tenor of the Bill is very supportive of creating an environment to enable efficient and effective arbitrations to take place. The central backbone of the Bill being based on the UNCITRAL Model Law will increase awareness in Australia of the Model Law and international arbitration.

The enthusiasm in New South Wales extends beyond the speed with which the Bill is proceeding. Sydney, the capital of New South Wales, has been making a play to increase its profile within the international arbitration community. We previously noted the announcement of a new Australian International Disputes Centre in Sydney, jointly funded by the Federal Government, the New South Wales Government, the Australian Centre for International Commercial Arbitration and the Australian Commercial Disputes Centre (see Legal update, New arbitration centre planned for Sydney). It is expected that the Australian International Disputes Centre will open shortly.

Adding to these developments in domestic arbitration and the new Australian International Disputes Centre, amendments to the International Arbitration Act are also proceeding apace. The amendments modernise the legislation by adopting most of the 2006 amendments to the UNCITRAL Model Law (see Legal update, Australian international arbitration legislation). The Bill, which is before the House of Representatives, is proceeding through Parliament and has recently received a series of refinements agreed to by the Main Committee of the House of Representatives.