Bayly AndrewARBITRATION AMENDMENT BILLSecond ReadingANDREW BAYLY (National—Hunua): I move That the Arbitration Amendment Bill be now read a second time.It's an absolute pleasure to be talking on the Arbitration Amendment Bill second reading. This is in fact the first time that I've had the opportunity to talk on this bill. This is because this bill was originally introduced under the name of my former colleague Paul Foster-Bell in mid-2017. Unfortunately Paul is no longer a member of the House and he asked me to continue to steer this bill through the House which I gladly accepted. So this bill has had a long gestation period just to get to this second reading stage.The original genesis of this bill came from members of the Arbitrators' and Mediators' Institute of New Zealand Inc. At this stage I'd like to acknowledge the significant contributions of the renowned arbiters such as Sir David Williams QC and Mr John Walton. They and other members of the institute quite rightly highlighted that New Zealand has an enviable reputation as a place to do business. International commercial arbitration has grown significantly in the last 20 years and promoting New Zealand arbitration New Zealand arbiters themselves New Zealand law and New Zealand as a destination for conducting international commercial arbitrations is consistent with the policies of both our Government and the previous Labour Government.But improving arbitration proceedings generally in New Zealand is also an important objective. This is because when disputes arise many New Zealanders genuinely want to be able to access a professionally run alternative resolution process rather than having to immediately resort to going to the courts. There are many reasons for this and they are varied. Arbitration is a bona fide option as it offers the following advantages: it's first of all a much cheaper process for resolving disputes; it's often much quicker compared to a court process; it's less confrontational; and it's logical as a first step in seeking to resolve disputes.What many people do not know is that our arbitration rules in New Zealand are based on the United Nations Commission on International Trade Law model law. In fact New Zealand was one of the first countries in the world to adopt the 2006 amendments. We also ratified the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and we are regional leaders in arbitration. However having got ourselves into that leadership position places such as Singapore Hong Kong and increasingly Pacific Island States such as Fiji have and will deliberately target their respective areas as centres to undertake international arbitration dispute hearings. In fact the Asian Development Bank is actively seeking to support Pacific nations to improve their standing and adopt the model law legislation. The reason for this is that it's highly desirable. Big international arbitration disputes regularly cost over a million dollars per case and naturally benefit local experts. It also enhances the country's reputation as a place where local laws are regarded as robust and fair and enhance the country generally. These attributes are exactly what New Zealand offers and this bill seeks to promote that.Unfortunately there are some aspects of our current legislation that need to be reformed. I'm grateful that the Justice Committee has agreed to address some of these issues. In reaching this position the committee was advised by the Hon Paul Heath QC—a retired High Court judge—as well as hearing submissions from a range of participants involved in New Zealand arbitration. The agreed changes are first of all to avoid a late jurisdictional objection—this is article 16(4) in schedule 1 inserted by clause 6(1)—to deal with the issue of parties to arbitration deliberately using a provision to wait until the end of the arbitration proceedings and if they're unhappy with the outcome to then claim that the arbitration tribunal did not have the jurisdiction to rule on the proceedings. This clause seeks to specify that a party must make a timely request—and that's the insertion—on the tribunal's jurisdiction otherwise that right is lost. It's an important aspect.The second change that's been agreed to is the application to set aside as recourse against an award and this is covered in an amendment to article 34 in schedule 1. The committee agreed with the need to replace the reference to the schedule" with "the Act" as this amendment corrects the original drafting of the 1996 Act which incorrectly used the word "schedule" rather than "Act".The third aspect is what is commonly referred to as the "quick-draw procedure". Clause 1 of schedule 2 in the Act sets out default procedures for the appointment of arbiters where parties have reached no agreement as to the appointment. This appointment process commonly referred to as the "quick-fire appointment process" allows one party to the proceedings to appoint the arbiter if they're quick enough in the process and this is in conflict with the principles of good arbitration. The committee was keen to address this issue but was concerned that the issue was outside the scope of the bill's original intent. For this reason the committee asked the Business Committee of Parliament to extend the powers of the committee of the whole House in considering the Arbitration Amendment Bill. I'm again grateful that the Business Committee agreed to allow the committee to address this issue and has proposed to introduce a Supplementary Order Paper at the time that this bill is considered in the committee of the whole House.The other aspect is around confidentiality. Madam Deputy Speaker I'm just worried about the time.DEPUTY SPEAKER: I have the correct time so you keep going.ANDREW BAYLY: You have? OK. Whilst these changes are important they still put New Zealand at a disadvantage when it comes to trying to attract investment arbitration disputes to New Zealand. The core issue is the risk that if arbitration proceedings fail then the New Zealand courts operate on a rebuttable presumption of open justice—that is all evidence is heard in open court hearings. Privacy and confidentiality are frequently cited as defining characteristics and valuable benefits of arbitration over litigation. In fact a recent survey said that 87 respondents in the international arbitration survey believed that confidentiality is one of the most important.Other jurisdictions in the Trans-Pacific region—and notably Singapore and Hong Kong—have enacted legislation and developed arbitration law that has as a major feature provisions for the protection of confidentiality in court hearings related to international arbitration proceedings. Given the quality of our legal profession and particularly those involved in arbitration this represents a real loss of commercial opportunity for New Zealand.The recommendation that I propose is that New Zealand not overturn the important principle of rebuttable presumption of open justice but to give judges more discretion when deciding whether or not to proceed to hear international arbitration cases in private. The clause I proposed was an insertion to section 14H. This was an important aspect in my view as it would have provided some flexibility for New Zealand judges to respect the rights of international parties who choose to undertake their international arbitration proceedings in New Zealand. And of course such a change would ensure that New Zealand would become a far more attractive destination for international arbitration awards.Unfortunately I wasn't able to convince Government members of the advantages of this approach. Without such an amendment we will still be at a significant disadvantage. However we have made significant progress and any progress is a good thing. I want to thank all the members of the committee and particularly the Hon Paul Heath QC for his support during this process and as a wider context I'm heartened that arbitration issues are also being dealt with in the Trusts Bill that the committee is currently considering. I look forward to debating and talking about this issue further. Thank you Madam Deputy Speaker.DEPUTY SPEAKER: Just before I call the next speaker. For the benefit of those newer members in the House: the timers up there are for your assistance. Actually the Speaker controls the times so the Speaker always has control of the clock. So even if they're not working the Speaker is actually controlling the time—you can rest assured."