Court clarifies role of courts in domestic arbitration | Practical Law

Court clarifies role of courts in domestic arbitration | Practical Law

Andrew Robertson (Partner), Piper Alderman

Court clarifies role of courts in domestic arbitration

Practical Law Legal Update 7-502-2263 (Approx. 3 pages)

Court clarifies role of courts in domestic arbitration

Law stated as at 06 May 2010Australia
Andrew Robertson (Partner), Piper Alderman
A Victorian Supreme Court decision has provided important clarification of the role of the courts in domestic arbitration, by confirming that the courts will not exercise a supervisory jurisdiction over interlocutory orders made in a domestic arbitration. This decision suggests a growing support for the arbitral process from the Australian judiciary.

Background

The domestic arbitration legislation in Australia, often referred to as the "common form Commercial Arbitration Acts", provides:
"Section 47: General power of the Court to make interlocutory orders
The Court shall have the same power of making interlocutory orders for the purposes of and in relation to arbitration proceedings as it has for the purposes of and in relation to proceedings in the Court."
Previous authorities (that is, South Australian Superannuation Fund Investment Trust v Leighton Contractors Pty Ltd (1990) 55 SASR 327) had suggested that section 47 granted the courts a supervisory jurisdiction over interlocutory orders in arbitrations.

Facts

In this case an arbitrator had refused to adjourn an arbitration hearing without first holding a directions hearing. The plaintiff asked the court to intervene to secure an adjournment of the arbitration hearing for approximately one week. The plaintiff relied on section 47 of the Act and the court's inherent jurisdiction to intervene in an arbitration to prevent an injustice.

Decision

Justice Croft indicated some caution as to whether the court's inherent jurisdiction was excluded by the Act. Ultimately he held that in the event that there was any inherent jurisdiction, it would only be exercised in the most unusual circumstances given the comprehensive provisions of the Act. Further, His Honour held that there was no jurisdiction to intervene arising from section 47.
In addition, His Honour said that, even if he was wrong and the court did have power, he would not intervene, having regard to the nature of the interlocutory order and there being no reason to doubt the veracity of the arbitrator's reasons for refusing an adjournment.

Comment

There have been a growing number of statements from the judiciary, albeit in domestic arbitration matters, that the Australian courts will be very reluctant to interfere in the arbitral process. As the domestic arbitration legislation envisages a greater role for the judiciary than the international arbitration legislation, this reluctance to interfere should be even greater in an international arbitration.
The recent approach of the courts suggests a growing awareness of, and support for, arbitration from the Australian judiciary.