There were a number of significant judgments in 2012.

In Castel Electronics Pty Ltd v TCL Air Conditioner (Zhongshan) Company Ltd [2012] FCA 21, the Federal Court of Australia held that it had jurisdiction to enforce an award made pursuant to an arbitration conducted under the International Arbitration Act 1974 (Cth) (1974 Act). The court held that it had jurisdiction pursuant to section 8 of the International Arbitration Act, the UNCITRAL Model Law, and section 39B(1A)(c) of the Judiciary Act 1903 (Cth) (see Legal update, Federal Court of Australia has jurisdiction to enforce both "non-foreign" and foreign arbitral awards).

In Castel Electronics Pty Ltd v TCL Air Conditioner (Zhongshan) Company Ltd (No 2) [2012] FCA 1214, the Federal Court of Australia was asked to interpret the meaning of "public policy" under the 1974 Act, particularly in the context of the UNCITRAL Model Law as it applies in Australia. The court held that the public policy ground for setting aside an award required an "offence to fundamental notions of fairness and justice".

A further judgment is expected in this dispute in 2013, in which the constitutionality of the Model Law for Australia's international arbitration regime is under challenge (see Anticipated developments in 2013 below).

In Ashjal Pty Ltd v Alfred Toepfer International (Australia) Pty Ltd [2012] NSWSC 1306, the Supreme Court of New South Wales rejected a challenge that certain sections of the Commercial Arbitration Act 2010 (NSW) (the uniform domestic arbitration legislation) were unconstitutional. The sections related to applications to a court to set aside an award, and the judicial recognition of awards (and the grounds for refusing recognition). The court held that the sections in question were not ultra vires and that the court's "institutional integrity" or “decisional independence" was not impaired by the effect of the 2010 Act.

In Ashjal Pty Ltd v Elders Toepfer Grain Pty Ltd [2012] NSWSC 545, the parties had entered into an arbitration agreement before the implementation of the Commercial Arbitration Act 2010 (NSW). Under the old Act, there was an automatic right of appeal to the Supreme Court on any question of law arising out of an award. However, under the new Act, parties can only appeal (in domestic arbitrations) where they expressly provided for this right in the arbitration agreement. As there was no right of appeal expressed in the arbitration agreement, the Supreme Court of New South Wales held that there was no right to appeal in this case.

In Curtin University of Technology v Woods Bagot Pty Ltd [2012] WASC 449, the Supreme Court of Western Australia determined that the Civil Liability Act 2002 (WA) (the proportionate liability regime) did not apply to arbitrations in Western Australia under the Commercial Arbitration Act 1985 (WA).

In November 2012, we reported on the speech by Chief Justice Keane (as he then was) on arbitration in Australia at ACICA's Australian Maritime and Transport Arbitration Commission (AMTAC) lecture (see Legal update, ACICA event considers the prospects for international arbitration in Australia). Later that month Chief Justice Keane was announced as the newest member of Australia's highest court, the High Court (see New High Court Justice and Federal Court Chief Justice).

Replacing Chief Justice Keane as the new Chief Justice of the Federal Court is Chief Justice Allsop. Chief Justice Allsop has also shown an active interest in the development of arbitral jurisprudence, having himself delivered the inaugural AMTAC lecture and delivered judgment in a wide range of leading arbitral cases. The role of the Federal Court, which has more of a trial load than the greater appellate load of the High Court, is likely to be the source of significant jurisprudence.

These changes suggest that arbitration in Australia will continue to be well supported by leading judicial officers who have a deep understanding of arbitral jurisprudence.

The process of rolling out the UNCITRAL Model Law as the basis for Australia's domestic arbitration law continues. 2012 saw the agreement between all states and territories to enact uniform commercial arbitration legislation come into effect in the majority of states. In 2010 and 2011, New South Wales and Victoria (respectively) enacted the uniform legislation in their jurisdictions. In 2012 the following developments occurred in the remaining states and territories:

The Australian Capital Territory has yet to introduce laws to modernise and unify the laws governing domestic commercial arbitration (see Anticipated developments in 2013).

The Australian High Court is expected to give judgment in TCL Air Conditioner (Zhongshan) Co Ltd v The Judges of the Federal Court of Australia and another in 2013. The case involves a fundamental challenge to the level of review required of arbitral awards prior to their enforcement by a court. The current approach adopts the Model Law approach, which is said to be insufficient as it impinges on the judicial character of the court.

No matter the outcome, this judgment is certain to be of great significance, and potentially fundamentally important, to Australian arbitral jurisprudence, giving guidance on the High Court's approach and attitude to arbitration. Arguments were heard this case in November 2012 (see Legal update, Viability of Australia's international arbitration industry soon to be determined).

We have been reporting on the process of modernising Australia's domestic arbitration law based on the Model Law for several years now (see Top developments of 2012 above). However it is likely that the process will finally be completed in 2013 with the remaining States and Territories completing the process.

Only three States and Territories remain to be completed in 2013, of which two of those are well advanced:

The UNCITRAL Model Law's spread across Australia is sure to lead to a growing range of issues for resolution by the Australian courts. The new domestic arbitration Acts only apply to arbitrations commenced after their passing, which means there is a little lag before the new Acts become the applicable legislation. However, we will start seeing more and more decisions based on Model Law provisions and, therefore, a growing level of Model law precedents available to Australian lawyers.