Originally from Baker and McKenzie International Arbitration Yearbook 2014-2015

A. LEGISLATION, TRENDS AND TENDENCIES

A.1 Legislation

International arbitration in Australia continues to be governed by the International Arbitration Act 1974 (Cth) (“IAA”), to which no legislative amendments were made in 2014.

A.2 Trends and Tendencies

Investor-state dispute settlement (“ISDS”) in investment treaties and free trade agreements (“FTAs”) is a topical issue. The Australian government continues to consider ISDS on a case-by-case basis, as reported in last year’s Yearbook. ISDS has been or is to be included in the FTAs with Korea and China, but not Japan. Notably, the Senate Committee has rejected a Bill to exclude ISDS provisions in new trade and investment agreements. Australia continues to negotiate bilateral FTAs with Asian countries, such as India and Indonesia, as well as regional agreements such as the Trans-Pacific Partnership Agreement. The inclusion of ISDS in bilateral and regional FTAs may have a dramatic impact on the arbitral landscape in Australia and the Asia-Pacific region.

B. CASES

B.1 Third Parties in International Arbitration

Section 7 of the IAA provides that reference to a “party” to an arbitration agreement includes “a person claiming through or under a party”. The courts have stayed court proceedings where a related third party who is not a party to the arbitration agreement acts “through or under a party” who is party to it. In Flint Ink NZ Ltd v Huhtamaki Australia Pty Ltd,4 Huhtamaki Australia (“Huhtamaki Aus”) commenced third party proceedings against Flint Ink New Zealand Ltd (“Flint Ink”) in relation to a claim brought by a customer for faulty packaging of yoghurt. Huhtamaki Aus claimed the fault arose from the ink supplied by Flint Ink pursuant to a supply agreement (“Supply Agreement”) between Flint Ink and Huhtamaki New Zealand (“Huhtamaki NZ”). Flint Ink requested a stay of the court proceedings on the basis of the arbitration clause in the Supply Agreement, arguing that Huhtamaki Aus was claiming “through or under” Huhtamaki NZ. That argument was accepted, and the third party proceedings were stayed pending the outcome of an arbitration under the Supply Agreement.5