Fiji enacts UNCITRAL Model Law on International Commercial Arbitration

Last month I was honoured and delighted to be a guest of the Fiji Law Society for its Annual Convention, in support of the Law Society President Laurel Vaurasi's laudable efforts to modernise the local profession. It was therefore of great interest to learn that on 15 September 2017, the Parliament of Fiji passed the International Arbitration Bill 2017 as an Act of Parliament, which was shortly assented to on 18 September 2017.  

The International Arbitration Act (Act No. 44 of 2017) incorporates provisions based on the UNCITRAL Model Law on International Commercial Arbitration (1985) (with amendments as adopted in 2006), in Fijian law. The Bill also gives effect to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which Fiji ratified on 27 September 2010.

The Bill is the first of its kind for Fiji and for most of the small island nations of the South Pacific. Fiji becomes the 76th State worldwide and the 24th out of 56 States in the Asia Pacific region to adopt the Model Law.  

The Bill is an implementation of the Asian Development Bank's findings that legal reforms would assist in attracting trading partners and strengthen international trade, and stimulate the growth in international business confidence in Fiji. Contractual arbitration can provide an efficient, neutral and private means to settle complex commercial disputes.

The new law brings Fiji’s international arbitration legislation in line with leading international arbitration jurisdictions such as Hong Kong, London, Paris, and Singapore as well as Fiji’s major trading partners. 

The Act applies to international arbitration only. The Act replaces the existing Fiji Arbitration Act 1965 in respect of “international” arbitrations, such that the Act will apply if:

  • one of the parties is not domiciled in Fiji;
  • the place of arbitration is outside of Fiji;
  • a substantial part of the obligations of the commercial relationship are to be performed outside Fiji; or
  • the place with which the subject matter of the dispute is most connected is outside Fiji.

The existing Fiji Arbitration Act 1965, which is based on the 1950 English Arbitration Act, will continue to apply to domestic arbitration. 

The Act creates a more favourable and standardised legal environment for the conduct of international arbitration by incorporating the 2006 amendments to the Model Law.

This includes:

  • a more detailed definition of an arbitration agreement (based on Article 7 of the Model Law, Option I)
  • provisions on the granting and enforcement of interim measures (based on Articles 17 and 17A-J of the Model Law)
  • obligation on Fijian courts to refer parties to arbitration if the court is seized of a matter which is the subject of the arbitration agreement, unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed (based on Article 8(1) of the Model Law)
  • empowering an arbitral tribunal to rule on its own jurisdiction,
  • specifying that an arbitration clause that forms part of a contract is separable from the other terms of that contract (based on Article 16 of the Model Law).  

Its also adapts international best practice, including:

  • extending the definition of arbitral tribunal to include an "emergency arbitrator"
  • express guarantee of confidentiality of the arbitration proceedings, subject to certain exceptions
  • provisions concerning liability and immunity of arbitrators, appointing authorities and arbitral institutions
  • provision on representation in arbitral proceedings  
  • additional clarity to parties and judges in construing the public policy ground for refusing enforcement, clarifying that an interim measure or award may be refused enforcement on public policy grounds where it is affected by fraud or corruption, or where a breach of the rules of natural justice has occurred in connection with the making of the award 

The Fiji economy is the largest of all independent Pacific Island countries, with the gross domestic product (GDP) in 2014 reported at $4.5 billion, an increase of 5.3% compared to GDP in 2013. Between 2010 and 2014, Fiji’s real GDP growth rate averaged around 3.5% annually. The economy is highly dependent on international trade.  This Act should prove a major milestone in supporting Fiji's future economic development.

30 September 2017

Dominique Hogan-Doran SC
Fellow, Chartered Institute of Arbitrators
 

 

FullSizeRender.jpg