Arbitration is a well-established dispute resolution mechanism used to resolve contractual, commercial and other types of legal disputes. It is a form of alternative dispute resolution (ADR) and is commonly used in the building and construction industry, workers compensation claims and industrial disputes. Due to the growth of cross-border commercial transactions between Australia and other Asia-Pacific countries arbitration is increasingly used in other industries such as the energy and trade sectors.

Domestic arbitration in Australia has undergone a major reform with the passing of the Commercial Arbitration Act 2010 (NSW) (CAA) and similar laws in other states. This reform was introduced to ensure greater consistency between the states and to create a regime that reflects international arbitration law. Although the domestic arbitration regime is state-based, international arbitration in Australia is regulated by federal legislation in the International Arbitration Act 1974 (Cth) (IAA). This Act was also amended in 2010 in order to conform with international practice. 

Arbitration is an appropriate method for the settlement of a dispute arising out of a contract between two or more parties. Arbitrations are run by either a single arbitrator or a panel of arbitrators who are chosen or agreed on by the parties. The decision of the arbitrator is called an ‘award’ that is binding upon the parties. The parties must include an arbitration clause in their contract in order to resolve their dispute through arbitration. However the parties can still enter into a separate agreement to allow an arbitrator to settle the dispute without such a clause in the contract.

Although arbitration is not as formal as the courts and the tribunals the procedure involves similar processes such as:

• statements of claim;
• statements of defence;
• counterclaims;
• the production of documents and other evidentiary procedures;
• oral hearings; and
• the making of a decision and often an award if settlement is not reached.

Arbitrators are sometimes specialists in a particular field such as construction and do not necessarily have any legal qualification. However if an arbitrator does not have a legal qualification and there are legal issues in dispute they are likely to call on the assistance of another arbitrator who does have a legal background.

This Legal Guide on Arbitration Law provides readers with information about the arbitration process. Before making important decisions it is advisable to obtain legal advice specific to your situation. LegalEagle’s™ free directory profiles all lawyers in Australia. You can use it to Find a Lawyer near you.

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Warning: Information provided through LegalEagle™ is for general guidance. It is not legal advice. Laws and procedures referred to may change and differ between states, territories and nationally. There may also be important exceptions or qualifications. Only a lawyer providing formal legal advice can assess your particular circumstances to determine how the law will apply.