Western Australia - The case for an arbitration centre in Perth

If a specialist energy and resource arbitration centre is set up in Perth, this could establish Western Australia as a key arbitration venue for disputes arising out of the iron ore and LNG industries.

Increasingly, businesses involved in the energy and resources industries are paying more attention to the arbitration agreements in their contracts. In particular, it is now common for businesses to enquire about the desirability and mechanics of providing for resolution of disputes by arbitrators who are specialists in the particular industry.

The focus is therefore shifting from the geographic location of the arbitral institution (which for some is simply a matter of the perceived independence of the body appointed to resolve any dispute) to the specialised skillset of the arbitrators.

As a result of this shift in focus, there are plans to establish a new arbitration centre in Perth, Western Australia. To be known as the Perth Centre for Energy and Resources Arbitration (PCERA), the centre will focus on the efficient, effective and expert determination of disputes in the energy and resources industries.

Western Australia, and the waters off its coast, is one of the most important energy and resource jurisdictions in the world. Its natural resources have an estimated value in excess of $100 billion.

Parties to commercial contracts exploiting Western Australia’s resources have tended to favour either ad hoc arbitration in Australia, or arbitration in either Singapore or Hong Kong using the services of SIAC or the HKIAC. Parties to existing arbitration agreements (particularly when the existing agreement provides for ad hoc arbitration seated in Perth) may be sufficiently attracted to having that dispute resolved by a specialist centre that they agree to modify the existing arbitration agreement to appoint PCERA to resolve the dispute.

The establishment of PCERA will be welcomed by participants in the energy and resources industry throughout Asia. Projects in resource-focused jurisdictions like Indonesia and Papua New Guinea may also benefit from a specialist arbitration centre in Western Australia.

Thanks to members of the Western Australian bar – Kanaga Dharmananda SC, Craig Colvin SC and Michael Feutrill – for their assistance in preparing this article.