International commercial arbitration - a critique

The virtues of resolving international cross border commercial disputes by private arbitration are often extolled as convenient and effective. There is no doubt that the international arbitration regime established by the widely adopted New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards is supportive of this view. Recent litigation arising in the course of and out of an Australian based arbitration between an Australian company and a Chinese company illustrates that there can be significant problems in the course of international arbitration. Parties contemplating international arbitration need to be aware of and cognisant of issues such as the form and scope of the agreement to arbitrate, whether there will be parallel court proceedings, the seat of the arbitration and the likely place of enforcement. A key consideration is whether the enforcement jurisdiction subscribes to the New York Convention and fully supports its implementation within its domestic legal system. Such concerns are illustrated by the case history discussed in this article.