Penk ChrisCHRIS PENK (National—Helensville): Thank you very much Mr Assistant Speaker. It's a pleasure to rise and make a contribution on the Arbitration Amendment Bill. It's traditional in the case of members' bills to start by acknowledging the member himself or herself but this time I'll make my acknowledgments chronological and I'll start in fact Mr Bayly with Paul Foster-Bell—PFB Fozzie Bear"—who is the architect of the bill. I understand it's legitimate to refer to those who are no longer members of the House in that fashion but perhaps I shouldn't have all the same. Moving on now if I may—and I feel I should—I do want to acknowledge the member whose name the bill is in fact now under: Andrew Bayly. Both of those gentlemen I know have worked hard to bring us a product that is worthy of our consideration and indeed our vote here tonight. I'm pleased to observe that that will be the case across the House.Mr Bayly has acknowledged others who have contributed to that process including in the arbitration sector so I won't belabour that point but I do note that Raymond Huo and others who were on the Justice Committee no doubt made a positive contribution in helping to shape the bill in the way that's already been described.I'd like to emphasise in my contribution the interaction of this bill with the justice system specifically the courts portfolio which I hold for my party. Of course the nature of arbitration is that it's separate to the judicial branch of Government. It's precisely because it's separate that it is so important in the context of the court system. I'll explain I suppose by observing in the first instance that arbitration is a subset of what's known as alternative dispute resolution. In other words it's a manner of resolving disputes that doesn't require the standard process I suppose as we might view it traditionally of going off to court and having a judge preside and decide the matter. Instead of course what we have is a system that is specifically designed to avoid that. So although it's outside the area of the strained New Zealand court system it's important for the court system precisely because it can relieve some of that strain if done well.The purpose of the bill of course is to improve the system that already exists and to do it not only well but better and it seems to me that it does that in a very admirable fashion. So just to finish off on that line of thought the backlog that the New Zealand court system has been developing in various different jurisdictions and various different levels over a number of years may be relieved somewhat if the arbitration sector is able to deal with as many disputes as possible. So there's an issue of timeliness and there's also an issue of access to justice such that an arbitration can be dealt with not only more quickly but also in a more cost-effective manner for the parties and that is a thing to be encouraged.Next I want to emphasise the importance of the bill to the extent that all arbitration provides legally binding awards. That's the nature of it. That's the whole purpose of the exercise of course: for parties to be able to reach an agreement albeit one that is mediated. I hesitate to use that word because of course mediation is a separate beast technically. But it's mediated in a sense of having a third party decide a matter that two parties to a dispute have decided to bring before them. So because the stakes are high because we are talking about a legally binding award that will arise and derive from the arbitration process it's all the more important that we have a system that is very clear. The clarity that is provided for example by the amendment of Schedule 1 as has already been described is therefore a good thing that we should be happy to pursue in this House tonight.Fletcher Tabuteau: Look happy.CHRIS PENK: The next point that I will make with all the enthusiasm I can muster for Fletcher Tabuteau is in relation to the voluntary nature of arbitration. So this is essentially an exercise that parties willingly enter into. They do so voluntarily because it's in their best interests. As I've already explained it's in the best interests of New Zealand's justice system separate to that. If we are to encourage members of our society—whether it's natural persons or corporate bodies or whatever form a legal person might take—to engage in this constructive way then we should do everything possible to make the law better for that purpose. As a small-government conservative this is something that I think Parliament's time is well spent engaged in namely legislating to allow individuals to be able to carry on their business as best as possible without the intervention of the State—although noting of course that might be the most appropriate course of action in any given case.My next point essentially in praise of the bill is to note that arbitration is actually often a first resort option. Often commercial contracts will state within standard terms—and would rarely be varied in fact—that arbitration would be the first recourse that a party must have if believing that there has been a breach of the terms of the contract. That being so its significance is heightened: it's the most likely course of action that parties will take if they feel as though they have been wronged in that contractual way. With the original Act having been passed in 1996 or at least effective in 1996 we're now 20 years beyond that so it feels like an appropriate time to consider ways that the Act can be improved and I think therefore that this work in the name of Andrew Bayly is quite timely.I'll just touch on each of the different amendments that have been made. The first is the Schedule 1 amendment at clause 6. We see that the phrase "To avoid doubt" is used. This is a pretty good indication I think of the purpose to clarify the existing law and that's a worthwhile thing to do. We read that the parties are effectively waiving a right to object later to the ruling of the tribunal. Of course if the system is to have any meaning at all it needs to be relied upon as something that the parties can go to and receive a determination and be able to move forward. That indeed is the magic of it—that parties can get on with their lives their commercial or personal lives as the case may be. So the clarity about the consequence of going to arbitration is important not least of all because it provides parties an informed basis to make a decision in the first instance that they are happy to submit themselves to arbitration.The so-called quick-draw procedure has already been mentioned by both of the previous contributors to the bill. The ability of one party to pre-empt essentially the other in the appointment of the arbitrator is one that is something we need to consider in the context of fairness. In terms of the principles of natural justice we might call to mind the Latin motto "nemo judex in causa sua"—Fletcher Tabuteau: Sorry what?CHRIS PENK: —no person should be a judge in his or her own cause. "Professor" Tabuteau of course is well familiar with that. So it's a bit of a strain I suppose if I were to say that a person would be judging their own cause merely by being able to appoint an arbitrator but it's the next step removed I suppose to have the ability of one person being able to appoint the arbitrator—or the judge essentially with a lower case "j"—of the matter above the ability of the other one. That would also unfairly privilege the person who is quicker on the draw than the other to the point where the one with greater resources or perhaps knowledge or perhaps who is motivated to come to the table first—we think that they should not have that unfair advantage.We've heard about the presumption of open justice. That's already been well covered by colleagues on both sides of the House. So I'll finish by noting that I think the clarification is helpful where the Arbitration Amendment Bill talks about "the composition of the arbitral tribunal" or the procedure in relation to whether that's "in accordance with the agreements of the parties" and so on—so just highlighting the consequences of a failure of the parties to come to agreement about whether the Act has been observed or not. So on that I'll conclude my contribution again by congratulating and thanking those involved in its passage so far and indeed into law now."