New Zealand’s role in international arbitration - are we a seat, or are we just sitting?

John Walton                 “It is plainly more attractive to establish a carefully chosen tribunal of experienced arbitrators, with knowledge of the language of the contract, and an understanding of the commercial intentions of the parties who will sit in a ‘neutral’ country and do their best to carry out the reasonable expectations of the parties, than it is to entrust the resolution of the dispute to the court of one of the parties, which may lack experience of commercial matters or may, quite simply, be biased in favour of the local party.”


(N Blackaby and others, Redfearn and Hunter on International Arbitration, 5th ed, OUP, Oxford, 2009 at 43, with thanks to Williams & Kawharu on Arbitration for the citation.)

It is a common observation in many fields of endeavour that New Zealand is a crèche for international talent; none more so than in the law, and more specifically international arbitration with the explosion of international trade and investment treaty disputes over the last few years. Our young lawyers have easy access to work overseas; they are keen, curious, hardworking and bright-eyed. With London being a traditional centre for international arbitration, it is inevitable that the brightest will be exposed to the very best of this work.

While we have a high level of experience among practitioners, and some of the world’s best international commercial arbitrators, New Zealand is not currently seen as a centre for international commercial arbitration.  And yet, there are many compelling reasons why conducting an arbitration here should be seen as attractive:

  • New Zealand was an early adopter of the UNCITRAL Model Law, and our Arbitration Act 1996 is a highly regarded and exemplary piece of legislation;
  • The courts in New Zealand are very supportive of arbitration;
  • New Zealand is independent and neutral, being perceived internationally (along with Denmark) as the least corrupt country in the world (see http://www.transparency.org/news/pressrelease/new_zealand_tops_2013_corruption_perceptions_index);
  • New Zealand offers first world infrastructure at a considerably lower cost than London and other international centres. The NZIAC Panel of Arbitrators provided registry services for the Indonesia International Centre for Settlement of Investment Disputes (ICSID) arbitration in Auckland in 2012 –the second ICSID arbitration to be conducted here;
  • There is an increase in bilateral and multilateral trade and investment treaties, with a corresponding increase in cross-border transactions, which include provision for arbitration;
  • There has recently been a lot of interest in international commercial arbitration in the Pacific region, with the establishment of the International Bar Association’s (IBA) Asia Pacific Arbitration Group subcommittee.

There is a lot to be said for New Zealand arbitrators to be promoting themselves for international appointments, and for New Zealand to be nominated as a seat for regional international arbitration. The focus of world trade is shifting in the direction of Asia Pacific.

Against this, practitioners internationally and locally point out that there is little point in New Zealand promoting itself in competition with the established centres of London, Paris and New York, or their local extensions of Singapore and Hong Kong. But that rather misses the point: our advantage is that we are not those places; we do not carry the costs associated with litigating there; we are local, yet we can provide a comparable service.  Many of the issues people tend to point to as disadvantages to arbitrating here are also conducive to gaining prompt, cost effective, high quality and enforceable determinations of complex international disputes.

The international scene for commercial arbitration is changing.  Where in the past arbitration was the realm of technical disputes over rent reviews and cost and delay in construction contracts, determined by a select group of grey heads and retired judges, the growth in international commercial arbitration has attracted a new breed of practitioner.  Those practitioners are expert in international commerce and arbitration as its own area of practise, rather than as an adjunct to their existing litigation practises.

Following the success of Singapore and Hong Kong, new centres have opened in Malaysia (Kuala Lumpur Regional Centre for Arbitration or KLRCA), Sydney (Australian Centre for International Commercial Arbitration or ACICA) and Toronto (Arbitration Square).

The timing is perfect for New Zealand to join them as a preferred seat for regional international commercial arbitration.  

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