IAMA's new arbitration rules incorporate the 'Fast Track' Arbitration Rules and set out predetermined time limits for procedural steps in an arbitration

On 1 June 2007 the Institute of Arbitrators and Mediators Australia (IAMA) introduced its new arbitration rules, which incorporate the IAMA 'Fast Track' Arbitration Rules. These rules, which are a new option for parties, set out predetermined time limits for procedural steps in an arbitration. Essentially, under the 'fast track' process, assuming the parties do not agree to modify any of the procedures or timeframes set out, and none of the limited rights of extension are invoked, the arbitration must be completed within 120 days and the arbitrator must make an award within 150 days.

In New Zealand all arbitrations are regulated by the Arbitration Act 1996 (NZ) (the Act). The schedules to the Act allow the parties to an arbitration and/or the arbitrator a significant amount of flexibility and input into all aspects of the arbitration, including procedure and timing. The first schedule to the Act applies to both international and domestic arbitrations,whereas the second schedule applies to all domestic arbitrations, unless the parties agree to exclude it and to international arbitrations if the parties agree to include it.

In particular, article 19 of the first schedule provides that the parties are free to agree on the procedure to be followed by the arbitrator in conducting the proceedings. Essentially, as in Australia, the progress and nature of any arbitration in New Zealand will be governed by the terms of the arbitration agreement agreed to by the parties. As such, conceivably any procedure and timetable may be agreed to, as long as it reflects the Act's purpose of equal treatment of parties.

Otherwise, the Act provides a flexible and wide ranging ability for the arbitrator to impose appropriate procedural rules. Pursuant to article 19, if the parties cannot agree as to the procedure to be followed, the arbitrator may conduct the arbitration in such a manner as he or she considers appropriate. Clause 3 of the second schedule provides further guidance for the arbitrator in this regard, as it sets out that these powers conferred on the arbitrator include the power to, among other things:

* Fix and amend time limits within which various steps in the arbitral proceedings must be completed
* Order any parties to do all such other things during the arbitral proceedings as may reasonably be needed to enable an award to be made properly and efficiently
* Order that any evidence be given orally or by affidavit or otherwise
* Order the discovery and production of documents and materials within the possession of the power of the party

Similarly, articles 23 and 24 of the first schedule establish the default procedure for filing of statements of claim and defence and the nature of the hearing of the arbitration. Other articles provide for particular situations such as interim orders.

No pre-drafted rules similar to the IAMA rules or their 'fast track' schedule exist in New Zealand at present. This may be because of the flexible nature of the legislation and the fact that parties often adopt either the High Court or the District Court Rules (or variations of these) which themselves contain timetabling directions although these will always be open to amendment by the arbitrator. In addition, construction disputes, which traditionally made up a large number of the matters that were resolved by arbitration, have been revolutionised in New Zealand by the introduction of the Construction Contracts Act 2002, which provides for regular payment of contractors and sub-contractors and includes fast track summary judgment and adjudication processes as an alternative or in addition to arbitration.

Notwithstanding the advantages of flexibility, one can see the benefit of pre-drafted uniform 'fast track' procedural rules for enhancing the image of arbitration as being an efficient and cost-effective method of resolving disputes, in particular in a larger federal jurisdiction such as Australia. Parties are likely to be attracted to the possibility of adopting the rules directly into the dispute resolution clauses of contracts, for example.

It will be interesting to see how the 'fast track' rules work in practice, in particular whether parties are keen to adopt them in dispute resolution clauses but then find it necessary to extend or amend the rules to accommodate the nature of the dispute which arises, and also whether arbitrators will in practice comply with the requirement to deliver their awards by the end of the permitted timeframe. Whether practical enforcement steps could be taken to force a party to comply with the timetable, or what sanctions will be imposed if an arbitrator fails to deliver an award in time, will also be issues worth watching out for.

Conclusion
Although 'fast track' rules such as those introduced by the IAMA assist in promoting arbitration as an attractive and simple process for the resolution of disputes, they may be less necessary in the New Zealand setting, given the already very flexible system for agreeing timeframes and procedure under the Act and the more recent processes established for construction contract disputes, which are designed to ensure expeditions resolution.

Graeme Hall is a partner and Sharley Willetts a senior solicitor in the Auckland litigation team of Buddle Findlay, one of New Zealand's leading law firms. The team has broad experience in commercial litigation including court action, arbitration and mediation and Graeme is a member of LEADR and an associate of AMINZ.

Hall can be contacted by phone: +64-9-358 7046 or e-mail graeme.hall@buddlefindlay.com Willetts can be contacted by phone: +64-9-363 0637 or e-mail: sharley.willetts@buddlefindlay.com