Comment

NZ could make millions solving disputes

International arbitration is on a global roll right now — but New Zealand has not taken full advantage of the opportunities it offers.

The extent of the potential market became clear at the biennial conference of the world leading arbitration body, the International Council for Commercial Arbitration, held recently in Queenstown.

This is the first time the event has been held in New Zealand and it has helped to give the industry here a nudge along.

International arbitration, that is the determining of cross-border disputes, is one of those areas, like higher education and air travel, that has developed significantly during recent decades. Until relatively recently, though, there has not been a huge amount of evidence of it in local legal life.

That has been a missed opportunity as the world turns towards Asia economically, at a time when the number of cross-border commercial contracts and international treaties containing arbitration clauses has grown apace, and the globalisation of world trade and investment has resulted in increasingly harmonised arbitration practices world-wide. Indeed the New York Convention, which allows for enforcement of arbitral decisions, is signed by a whopping 159 of the world’s states. That’s about 30 times more signatories than the better-known Hague Convention.

It's a missed opportunity because we also happen to have some of the world's most respected specialists in international and regional conflict resolution — and not just in the area of international commercial arbitration. And conflict resolution is something that successive New Zealand governments purport to support.

Eight years ago, for instance, former prime minister Sir Geoffrey Palmer accepted what some may have seen as an impossible brief: overseeing a panel charged with finding a reasonable resolution to the conflict that saw Israeli security forces clashing on the high seas with members of a Gaza-bound flotilla.

In the event, Sir Geoffrey’s panel managed to impressively deliver.

Sir David Williams, QC, was knighted last year in recognition of his reputation as one of world’s leading commercial arbitrators, a reputation vouchsafed as part of an arbitral body that awarded a record US$1.7 billion judgment against Ecuador.

Sir Ian Barker, Dame Sylvia Cartwright and Sir Kenneth Keith are among the others who have worked with distinction in this area. And there are many Kiwi rising stars, far in excess of what’s to be expected of the population from where they come.

The distance factor of New Zealand’s locale is dissipating as the world shrinks and technology kicks in. New Zealand enjoys the advantage of being corruption-free, transparent and respected. It has the infrastructure and a stable political and economic climate needed.

By bringing these skills home, as it were, and establishing itself as a regional arbitration hub, New Zealand stands to benefit in a number of ways.

An independent economic study in Canada in 2012 that looked at the economic significance of arbitration in Toronto found it benefited the economy on a number of fronts that would be equally applicable to New Zealand.

For one thing, the report’s authors found, it directly generates work for legal counsel, expert witnesses and providers of support services (document management, reporting and transcription, translation and interpretation) involved in the case.

Obviously, too, it directly generates work for arbitrators, and then indirectly for the hearing facilities and hotels, restaurants, shops, and service providers that support them. People involved also need to get local accommodation, transportation and entertainment.

The report concluded that each case generates around NZD$2 million for the country in which the arbitration is seated.

Arbitration also has the less tangible benefit of raising the international profile of the country and therefore enhancing its reputation. Nowhere is this lustre more attractive than if New Zealand could make itself into the place where climate change disputes can be solved. This is the new and pressing frontier for practical disputes resolution and New Zealand is well-placed to take a pivotal role.

With all this in mind, many nations are currently scrambling to establish themselves as arbitration hubs of one sort or another. It is why government support has flowed to the hugely successful arbitration centres in Hong Kong and Singapore. But not so far in New Zealand.

The distance factor of New Zealand’s locale is dissipating as the world shrinks and technology kicks in. New Zealand enjoys the advantage of being corruption-free, transparent and respected. It has the infrastructure and a stable political and economic climate needed.

We also have excellent arbitration-related laws — particularly if the Government passes amendments which it is currently contemplating, according to AMINZ president John Walton — and a supportive judiciary.

Not to mention beautiful scenery, great food and wine and golfing opportunities — as some of the delegates to the Queenstown conference discovered.

But do we have the political will? Time will tell.

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