NATIONAL COMMERCIAL LAW SEMINAR
25 February 2015
Australia – a vital commercial hub in the Asia Pacific region: the importance of and challenges for Australian commercial courts and arbitral institutions
Chief Justice Allsop
Federal Court of Australia

1	The topic bespeaks Australia’s participation in the regional and world economy.  It is a cliché to talk of globalisation of world trade that has occurred in the last two decades.  
2	What perhaps is not fully appreciated in Australia is the likely scale and volume of economic activity and trade in the Asia Pacific Region in the next quarter of a century.  It will produce huge demands for regional dispute resolution.  
3	One of this nation’s abiding strengths is the basal and structural quality of its legal system.  That is not to say that there are not challenges of great importance: the greatest of which is making the vindication and defence of rights of ordinary people (including ordinary commercial people) affordable and equitable.
4	The strength and quality of the Australian legal system is founded on the exceptional quality of Australian legal education.  One of the reasons why young Australian lawyers are so sought after in the legal centres of the English-speaking world is that there is no better national cohort of legally-educated students.
5	The second great strength is an independent profession: solicitor and counsel.  There are challenges here, as independence is corroded by systems that see the practice of the law as a business or commercial enterprise.  That said, the independent profession, especially the independent bar, is critical to the structural quality and integrity of the Australian legal system.
6	The third great strength is the independent integrated national court structure of federal and state courts.  Federation brings with it challenges for efficiency and simplicity; but the legal governance of a continental nation requires flexibility, a degree of autonomy, within overall coherent consistency.  That is achieved by the interlocking relationships of the court systems.
7	With this structure, what is Australia’s mandate and its opportunity? We cannot present one concentrated legal centre as Singapore, Hong Kong and London can.  We can, however, present at least three things:
(a)	practitioners of the highest quality,
(b)	courts of the highest quality, and 
(c)	available arbitral structures of the highest quality.
8	The presentation of these three attributes should not be based on competitive parochialism.  It is Australians and Australia that foreigners recognise as having relevant qualities (or not, as the case may be) not whether Brisbane is better than Sydney, or Sydney is better than Perth, or Melbourne is best.  Such self-focused parochialism is of no consequence to the foreign disputant or commercial party.  It is the reliable quality of all those three things (profession, courts, arbitral structures) in Australia that is fundamental.  If one jurisdiction does things badly; Australians have done these things badly.
9	In order that civil society may grow, within and across our region, a regional justice system must develop.  By this I mean the development of a trusted and reliable body of courts, and of trusted and reliable arbitral activity and institutions.  
10	Central to this process is the acceptance of the autonomous character of the arbitral legal order and the development of commercial courts of the highest quality in all countries of the region.  Australia’s challenge and opportunity is to play an integral part in this.
11	The acceptance of an arbitral legal order requires the legal and cultural acceptance by the judiciary and the national laws of a country of the legitimacy of fairly-run arbitration.  To achieve such, the arbitral legal order must be worthy of the trust placed in it by courts and national laws.  
12	The coherence of the arbitral order in the region is facilitated by the broad and comprehensive adoption of a uniform basis for the organisational framework of arbitration in the region: the UNCITRAL Model Law which has been brought  into domestic laws in Japan, South Korea, Australia, New Zealand, Singapore, Malaysia, Thailand, Vietnam, The Philippines, India, Sri Lanka and (substantially) Hong Kong.
13	Not only does this lead to a familiarity and coherence in legislative structure, it also encourages and facilitates a conscious and salutary discussion, and generally adoption, of regional jurisprudence.  For instance, recently, in TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd , the Full Court of the Federal Court of Australia in discussing the question of public policy in Art V of the New York Convention and Arts 34 and 36 of the Model Law, and the provisions of the Australian International Arbitration Act 1974 (Cth) that involved the same concept, drew heavily on regional (Hong Kong, Singapore and New Zealand) case law.
14	The development of consistency and interwoven jurisprudence within the region will assist in the development of a coherent regional law area. 
15	The quality, and legal culture, of the court of the seat of any arbitration is critical.  The court of the seat has a crucial role in the supervision of the procedural conduct of the reference and thus of its fairness.  It is the fairness of the arbitral procedure, the reputation for fairness of an arbitral centre, and of a legal order of a city or a state or a region, that is at the heart of the arbitral process, and its acceptance.  The supervising court has a primary role in the assessing of that fairness of the procedure.  
16	Courts and arbitral structures should not view themselves as necessarily competitive in an antagonistic sense.  The arbitral process depends upon the court system for enforcement.  It also depends upon the court system for oxygen and moral order.
17	The oxygen is provided by courts understanding the light touch of non-interference that is generally required.  That light touch will be founded upon  a deep familiarity of the court with the international legal framework of the arbitral order, upon a recognition of the significant skill and expertise of many practising in arbitration and upon the deference given to the contractual autonomy of the parties who have chosen arbitral resolution.
18	The moral order is provided by the courts being clear and unswerving in their enforcement of the premise of all arbitration – its fairness.  This is not achieved by micro-managing in a pernickety way complaints about procedure; rather, it is achieved by the skilled and experienced application of fundamental rules of fairness by a mature and skilled legal culture.  Article 18 of the Model Law expresses the fundamental norms of equality and fairness (so necessary for legitimacy and acceptance):

“The parties are to be treated with equality and each party shall be given a full opportunity of presenting his case.”
19	It is the short expression of the uncompromising demand of the fairness of the arbitration process.  This is not some pernickety body of rules, but the demand for equality and fairness that lie at the root of any legal order.
20	The supervising court of the seat and in its skilled, knowledgeable and fair attendance to this basic requirement is critical to the attractiveness (or not) of the chosen seat.  The flashiest arbitration rooms, the most appealing arbitral procedures are of little value if the supervising court is not a commercial court of the highest quality, with a sympathetic, but rigorous, understanding of the arbitral process, and with a legal culture of skill and despatch.
21	What do I mean by “legal culture” in this context?  I mean the values and expectations of those who participate in commercial dispute resolution in the jurisdiction: the legal profession, judges, arbitrators and commercial parties.  It is constituted and nourished, not so much by legal rules, but by practice, custom, convention and attitude; indeed, by a shared assumption as to how dispute resolution works, as to how cases should run, about what the reach of procedural power is, and ultimately, about what is fair.  
22	If I may be permitted to illustrate this with some personal reflections.  I began to practise as a barrister in the Commercial List in the Supreme Court of New South Wales in 1981.  No doubt Victorian practitioners of the time have a recollection about the commercial list of Marks J, and, later, Hayne J.  The younger of you may associate many (not all, I hope) of the following remarks with Goldberg J and Finkelstein J (speaking only of the Federal Court).  My practice as a junior barrister for a time was confined to handling matters in the Friday list, where directions and motions were heard.  No case could be won there, but a case could be lost there.   Under the, at times daunting, but always testing, supervision of the brilliant Justice Andrew Rogers, one learnt that only points worth running would be tolerated; complete preparation was compulsory; despatch and clear thinking were essential; co-operation with one’s opponents was expected and essential; a lack of frankness or obfuscation with the court, or any form of incompetence or unpreparedness risked the danger of ritual humiliation in front of one’s peers (the only aspect not to be copied; Andrew Rogers would forgive me for saying this: he was dragging people from another century, sometimes kicking and screaming, into the twentieth).  Practice there instilled in succeeding generations of lawyers how to run commercial litigation quickly, fairly and cost-effectively.  I can still hear the oft-expressed phrase uttered when some delaying tactic was being half-disguisedly run: “not in my court you won’t.”  
23	This approach changed utterly and completely the legal culture of commercial dispute resolution in Sydney, as no doubt did Marks J and Hayne J here.  Cases were run with efficiency; bad points were abandoned or leave was not given to run them.  For a time, loud complaints were made about a lack of fairness by parties (and their advisers) unable to run their litigation at their then customarily comfortable pace.  The Court of Appeal showed no mercy in its support of the new broom.  The legal culture changed.
24	The purpose of this reflection is to illustrate what I mean by legal culture and how it can develop and evolve.  It is also to reject, categorically, that judicial process is necessarily long, overly complex and institutionally inefficient.  As some of the best commercial courts demonstrate, this is simply not so.  It is a question of culture, technique and always recalling that commerce does not wait; it demands expedition.  We should recognise that in this country our commercial courts have developed, often pioneered, reforms and techniques well in advance of many other countries.  And, may I say, often in advance of arbitral procedures.
25	If a supervising court has that kind of legal culture, it must inevitably affect how the proper conduct of arbitrations is viewed in that jurisdiction, with an inevitable effect on how fairness is viewed in respect of procedural despatch.  In such a climate of efficient despatch, fairness and equality take on their binary, not unitary character.  If a party requests an unreasonable time or an apparently unnecessary or oppressive step to be taken, but the arbitrator agrees to the request in fear of being accused of denying the party a full opportunity to present its case, neither fairness nor equality is being exhibited to the other party.  If, however, the arbitrator is tolerably confident that his or her judgment as to what is robustly fair will be supported by the prevailing culture and practice in the supervising commercial court, that will give him or her a measure of confidence; it will empower him or her to exercise the authority vested in him or her.  
26	Efficient, skilled and experienced commercial courts thus have a crucial part to play in fostering and encouraging efficient, well-run arbitrations.  They do so by fostering the legal culture of commercial acumen, fairness, efficiency and despatch in the support of arbitrations in the jurisdiction. They also do so by constantly maintaining and developing their own efficiencies in the despatch of their business.  It is of the utmost importance for the health of arbitration in any jurisdiction that the commercial courts of the jurisdiction are viewed both as skilful and efficient and knowledgeable of commercial matters, and knowledgeable of, and sympathetic to, arbitration as the choice of the commercial community if that choice be made.
27	It is to be recognised that many international parties would prefer the swift, efficient and knowledgeable handling of first-rate commercial courts.  The problem with court adjudication can be, however, international enforcement.  That difficulty will be overcome by Australia and other nations recognising the significance of the Hague Convention on Choice of Court Agreements 2005.
28	The qualities of skill, fairness, equality and despatch are essential characteristics of a just legal order. The existence and concurrent development of commercial courts and arbitral structures of great quality creates a symbiotic legal order for the just resolution of commercial disputes.  The development of skill and consistency in and among the major legal centres of the region including Australia is critical to the creation of a self-conscious and coherent law area and justice system in this region, based on values of fairness and equality and marked by skill and despatch.  Australia’s opportunity and challenge is to be at the forefront of that judicial skill and expertise in its commercial courts and to develop arbitral institutions of equal skill and expertise.
29	The current important changes to the Federal Court’s organisation under the National Court Framework will, I anticipate, answer this opportunity and meet this challenge by the creation, in effect, of a national commercial court, an international maritime court, a national intellectual property court and a national tax court.
30	The steps the bar must take in the future are ones that should reflect the following realities:
(a)	the importance of the arbitral legal order,
(b)	the importance of international practice, and 
(c)	the importance of working with the courts to build, and constantly maintain, a legal culture in commercial dispute resolution of skill, fairness, equality and despatch.
31	The tasks of Australian commercial courts and the commercial profession are not simple.  They are not dictated by the simplicity of a unitary legal system located at a fulcrum of world trade.  But we have certain great strengths and advantages: a proximity to South Asia, Africa and India; a proximity to North Asia and the West Coast of Continental America; a legal culture of long standing and deep skill; and a profession and judiciary of the highest quality.  How the courts and the profession co-operate to develop these inter-related resources and skills will be a great challenge for the future.  The beginning, and the critical foundation, is the development of professional and judicial skill in the despatch of commercial cases.