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16 Purposes of the Arbitration Act 1996

233 SECTION 5 OF THE ACT sets out certain specific purposes. It states:

The purposes of this Act are—
(a) To encourage the use of arbitration as an agreed method of resolving commercial and other disputes; and
(b) To promote international consistency of arbitral regimes based on the Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law on the 21st day of June 1985; and
(c) To promote consistency between the international and domestic arbitral regimes in New Zealand; and
(d) To redefine and clarify the limits of judicial review of the arbitral process and of arbitral awards; and
(e) To facilitate the recognition and enforcement of arbitration agreements and arbitral awards; and
(f) To give effect to the obligations of the Government of New Zealand under the Protocol on Arbitration Clauses (1923), the Convention on the Execution of Foreign Arbitral Awards (1927), and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (the English texts of which are set out in the Schedule 3).

234 The AMINZ, drawing on legislation in other jurisdictions, submits that a further provision should be inserted into the Act, as section 5A, to identify the main objects of the Act. The AMINZ submits that a new section 5A should be enacted in the following terms:

5A General Principles
The provisions of this Act are founded upon the following principles and shall be construed accordingly:
(a) The object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense.
(b) The parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest.

235 The AMINZ submits that these objects are already implicit in the Act and it is appropriate to make explicit what is currently implicit.

236 We are not prepared, at this stage, to embark upon a consideration of this new issue. We say that because:

• We have already summarised in the preface to this report the principles underpinning the Act which we believe have now been widely accepted. The possibility of adding a new section dealing with general principles, to be read alongside a provision dealing with purposes, seems to us to have the potential to cause difficulties. Which provision is to be given priority? And, why? As an example of a judgment which acknowledges principles underpinning the Act we refer to Gold & Resource Developments (NZ) Ltd v Doug Hood Ltd where Blanchard J, delivering the judgment of the Court of Appeal, referred to Parliament’s intentions to encourage the use of arbitration to resolve disputes between parties, and to limit the High Court’s involvement in reviewing and setting aside arbitral decisions, citing, as support, observations made by the sponsor of the Arbitration Bill into the House of Representatives, Mr P Hilt MP, during the course of debates before the House.²³⁶
• We think that any suggestion of this type cannot properly be characterised as incidental to the issues which we addressed in our preliminary paper. In the absence of consultation on the issue we are not prepared to make any recommendation.