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Australia has a long-standing tradition of embracing arbitration as a means of alternative dispute resolution (ADR). At a domestic level this is reflected by court-annexed and compulsory arbitration prescribed for certain disputes. Arbitration has become equally common in international disputes. Traditionally, arbitration in Australia was largely confined to disputes in areas such as building and construction. Strong and steady growth of the Australian economy over much of the past two decades and the opening of Asian markets have accelerated a growing trend towards the use of arbitration in other areas, particularly the energy and trade sectors.
The 21st century has aptly been described as the ‘Pacific Century’ (or the Asia-Pacific century). This is certainly evident in relation to international trade developments and foreign direct investment (FDI) inflows. Key trade agreements were executed and entered into force during the first two decades of this century, including the Trans-Pacific Partnership Agreement that was signed on 4 February 2016 (the TPP) by the original 12 contracting states and bilateral free trade agreements such as the US-Korea Free Trade Agreement that was signed on 30 June 2007 and entered into force on 15 March 2012. In addition, the 2014 World Investment Report of the United Nations Conference on Trade and Development indicated that Asia continues to be the world’s top recipient of FDI, accounting for approximately 30 per cent of FDI inflows globally.
Arbitration in Asia continues to be on the rise. In 2017, the Singapore International Arbitration Centre (SIAC) received a record-breaking 452 new cases from parties across 58 jurisdictions, which marked a 32 per cent increase from 2016.1 In Hong Kong, a total of 460 new cases were filed at the Hong Kong International Arbitration Centre (HKIAC).2 This continued rise may be explained by a number of factors including growth in the region, the relatively low costs of conducting an arbitration in the Asia-Pacific (as opposed to, for instance, in America or Europe),3 and the proliferation (and continued development and advancement) of arbitral institutions in Asia.
The Asia-Pacific region is without a doubt becoming the unrivalled centre of the global energy trade.1 Global demand for energy is expected to climb about 25 per cent by the end of 2040, with a significant contribution from the expanding economies in the Asia Pacific region.
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