Tizard Judith: Arbitration Amendment Bill — Second Reading 
Tizard Judith: Arbitration Amendment Bill — Second Reading 
[Volume:639;Page:8975] 
Hon JUDITH TIZARD (Minister of Consumer Affairs) 
 on behalf of the 
 Associate Minister of Justice 
: I move  
That the Arbitration Amendment Bill be now read a second time 
. On behalf of the Minister I thank the Justice and Electoral Committee for its careful and efficient consideration of the bill. I agree with and wholly support the committee’s amendments. The changes I believe improve the bill and will help encourage the use of arbitration as an alternative means of dispute resolution. The Arbitration Amendment Bill is the first of four bills giving effect to Law Commission reports that the Associate Minister of Justice is responsible for. The Wills Bill and the Succession (Homicide) Bill now await their second readings while the Property Law Bill is currently before the Justice and Electoral Committee. 
The Arbitration Amendment Bill follows the Law Commission’s review of the Arbitration Act in 1996 which was completed in 2003. The Law Commission found that although the Act was working well some minor improvements were desirable. The Arbitration Act 1996 provides an important and increasingly preferred method for resolving civil disputes especially where underlying relationships must be maintained. Common examples include construction projects landlord and commercial tenant disputes and sharemilking agreements. The bill makes a number of minor amendments to the Arbitration Act 1996 to improve its operation with the goal of enhancing arbitration as a means of dispute resolution in New Zealand. The bill is consistent with the underlying themes of the Act—party autonomy limited scope for judicial involvement appropriate powers for the arbitral tribunal and the promotion of New Zealand as a place for international arbitrations. All of the amendments contained in the bill reflect one or other of these main themes. 
I now turn to the committee’s recommendations. At present under schedule 1 of the Act if a party is having difficulty with a witness or obtaining evidence that party is required to approach the arbitral tribunal for its assistance. Clause 8 as introduced proposed to remove that requirement instead enabling parties to go straight to the District Court or High Court for a subpoena. Following public submissions the committee considered that the amendment to this provision was not necessary. Submissions revealed that in practice the arbitral tribunal is generally able to resolve any issues that parties are having in regard to witnesses and evidence without needing to engage the courts. 
The effect of the proposed amendment would be to reduce the control the tribunal has over the process instead providing for easier access to the courts. This is at odds with the underlying themes of the Arbitration Act—namely reduced judicial intervention and increased control of the process by an arbitral tribunal. The committee recommends the removal of this proposed amendment to leave the current provisions in force and the Minister agrees with the committee’s recommendations. 
The committee has also made a similar recommendation in relation to clause 9 which amends schedule 2 of the Act. Clause 9 would have removed a default procedure for the appointment of an arbitrator where parties were unable to agree. The proposed amendment would have allowed parties to agree in their arbitration agreement on a process to resolve any difficulties they were having in appointing an arbitral tribunal. The committee recommended the removal of this proposed amendment. It was pointed out by submitters that in practice there are few problems with the current provision; under the status quo parties are already able to avoid the default procedure by providing for an agreed process in their arbitration agreement. As a result of the committee’s recommendations the default procedure will remain in the Act. I welcome the committee’s amendment. 
The committee has also recommended the inclusion in the bill of further amendments not initially proposed. The Arbitration Act is based on the model law on international commercial arbitration adopted by the United Nations Commission on International Trade Law in 1985. In December 2006 the United Nations General Assembly adopted changes to the model law which were agreed to by the United Nations Commission on International Trade Law earlier last year. The committee considered that it was suitable for the amendments to be included in the bill. The additional amendments are found in clause 8 and include a more comprehensive regime for dealing with interim measures during the course of arbitral proceedings. Arbitral tribunals will be better able to ensure for example that evidence and assets are preserved while the process occurs. This means that a party to the arbitration will be prevented for example from destroying or concealing evidence from taking assets out of the country and also from dealing with assets in a manner that would make enforcing a judgment by the other party worthless. 
The amendments to the model law now contained in the bill provide a lot more detail and guidance than what is currently found in the Act around the use of interim measures. The changes also include the introduction of preliminary orders where a party can apply for an addition to an interim measure. A preliminary order which may be granted without a hearing acts as a bridging device until the proper hearing for the interim measure application can be arranged. 
One change that was not made to the model law but that the committee has recommended is the inclusion of security for costs as an interim measure for international arbitrations. The proposed measure is very similar to the practice in New Zealand court proceedings. Again the Minister agrees with the committee’s inclusion of these additional amendments to the bill. The purpose of the revision of the model law is to ensure that the model law continues to meet the needs of its users reflecting best practice in the field of international arbitration. Having New Zealand law reflect international best practice can only enhance New Zealand’s reputation in this area of law and dispute resolution. 
The thorough consideration given to this bill by the Justice and Electoral Committee has resulted in a much-improved bill being returned to the House. The Minister greatly appreciates the work of the committee and its efforts to ensure that this bill achieves its aims of improving the operation of the Act and enhancing arbitration as an alternative dispute resolution method in New Zealand. I commend this bill to the House.