Arbitration Amendment Bill

I move, That the Arbitration Amendment Bill be now read a first time. I nominate the Justice and Electoral Committee to consider this bill. I hope that this bill is something that will meet somewhat less controversy in this House than some of the other matters that have been discussed here today. It is, in my view, a very, very good bill. This might be an unusual thing for the sponsoring member to say, but in doing so I want to give full credit to the people who drove the formulation of this bill.

I would like to first begin by thanking Deborah Hart, the executive director of the Arbitrators and Mediators Institute of New Zealand, and that institute’s president, John Walton, who have produced a memorandum, which I hope has been circulated around this House, in support of this measure. Many of the ideas and concepts in this bill did originate from that venerable institution.

I also want to single out Jeremy Johnson of Wynn Williams, who is the youngest fellow in the history of the Arbitrators and Mediators Institute of New Zealand, who helped with the drafting; the team in the office of the Minister of Justice, the Hon Amy Adams; Rosemary Colson, our researcher; and a colleague and dear friend of mine who ensured this bill was in the biscuit tin and who is currently recuperating in Ward 5 North in Wellington Hospital. I want to pay tribute to the team of medical professionals there who are assisting with his recovery. Without his assistance, the bill would not have been drawn from the institution that is the biscuit tin.

This bill, in terms of what it actually does—it does a couple of quite technical things, which I will try to explain in terms that the lay person, such as myself, can understand and appreciate. This bill does bring greater certainty to our arbitration regime in New Zealand. What is important is that we are seen to be in line with international standards to make New Zealand an attractive destination for arbitration, but to provide that greater clarity and certainty. In particular areas around confidentiality it introduces a rebuttable presumption of confidentiality, should an arbitration decision be appealed to a court.

Why is this important? Well, two parties who freely enter into a contract, which may contain a dispute resolution mechanism of arbitration—and it should be acknowledged that no party is obliged to undertake arbitration; it is a voluntary measure that parties enter into when they sign, usually, a commercial contract. Part of the appeal of the arbitration process is the privacy and confidentiality that it affords. This might be for the more obvious things that suggest themselves, so that companies do not have trade secrets—their market intelligence that they would prefer to keep private—exposed publicly, but actually for a wider reason. In some cases it is the very fact that there is a dispute between two firms that can be injurious and have a detrimental effect on the confidence in the company and perhaps even share prices—their ability to conduct their business. Sometimes the effect of that exposure is highly disproportionate to the substance of the matter that is actually being resolved in a dispute.

The particular case that I want to refer to in that regard is the 2014 High Court case of Danone v Fonterra, where the High Court, very sensibly, sent Danone back into arbitration in Singapore with Fonterra to deal with the dispute. But, in my view, it is problematic when the parties to arbitration, who have freely contracted to use that dispute resolution means, use the threat of the publicity that can happen if a case is then appealed to a court as a weapon in their negotiations.

This is intended to be a rebuttable presumption of confidentiality, meaning that if there is an overriding public interest in the matter that is being dealt with, the court can of course decide that they should be matters of public record and publicised as such. But, in general, there is a presumption that the confidentiality of the arbitration will continue on into the courts, should the case end up in the courts.

Secondly, this bill intends to make arbitrations more enforceable in the courts in New Zealand. We have had a couple of recent instances, and in particular I refer to the case of Carr v Gallaway Cook Allan. It is also a 2014 case, although that one was in the Supreme Court. It is Ewan Robert Carr and Brookside Farm Trust Limited v Gallaway Cook Allan [2014] NZSC 75 for members who might want to look up several hundred pages of deliberations, mainly highly technical in nature. But the key question here concerned the validity of an arbitration agreement with a clause allowing appeal on questions of law and fact. The Supreme Court found there that there is actually no legislative grounds allowing appeals on questions of fact. As a result, it ruled that the parties could not lawfully provide a contract allowing this. So this did introduce an element of uncertainty as to the enforceability of an arbitration agreement.

This bill does seek to remedy that issue by introducing several changes to the 1996 Act, which I believe will be positive. Tribunals undertaking arbitrations are currently able to rule on their own jurisdiction, and this bill will require that objections on jurisdictional issues are raised in a timely fashion, not after the case has already been decided if one party does not like the particular result. It also provides that when there are minor or procedural issues that these are dealt with, I think, in a more sensible fashion.

Finally, in terms of the provisions there are some very technical changes, but these are there around disputes between trusts where the trust deed, a contract, will effectively provide arbitration provisions. Around the world this is happening more frequently. So this is when disputes are not between, necessarily, companies or limited liability companies but perhaps between a trust and an NGO, or a trust and a company. So when there is an arbitration clause within a trust deed, that will be treated in the same way as an arbitration clause in a commercial contract.

Why is arbitration useful? Why do companies opt for that path of, I think, sensible, mature, cost effective, and speedy dispute resolution? It is for those reasons, because it is occasionally more cost effective, although not always; sometimes it is actually more expensive to go through an arbitration process. But there are huge positives not only for those who opt into them but actually for us as taxpayers in New Zealand. It keeps cases out of the courts that do not, frankly, need to be there. It is better that parties to a dispute can resolve their differences in a responsible adult fashion without clogging up our already very busy court system and preventing other cases getting in there.

Secondly, there is a public benefit in New Zealand for arbitration cases that come to this country. The Arbitrators and Mediators Institute of New Zealand estimates the value of each arbitration to be around a million dollars. This is not just spend on expensive lawyers’ fees, although I know the lawyers in the House probably will be wringing their hands in glee—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Sorry, I’m a bit late. I was intrigued.

Thank you, Mr Assistant Speaker. The lawyers in the House will be excited to learn that arbitrators and the legal counsel involved in those cases are often very well remunerated. But, actually, there will be spend in a wide range of services in the New Zealand economy from conference venues through to hotels and accommodation, taxis, food, and secretarial support. So a wide range of people stand to benefit from New Zealand bringing itself into line with jurisdictions such as Hong Kong, Singapore, even Australia, our near neighbours, and the UK—those systems that are closest to ours, but also those systems that are known to be international centres of arbitration.

Arbitration is also very useful for New Zealand companies, and we are a trading nation. So you can imagine a New Zealand company trading in a third country that may not have the strong rule of law, may not have the justice system, and the lack of corruption that this country, thankfully, enjoys. If they are trading in a country where the courts cannot be relied upon to be fair it is very useful for New Zealand companies to be able to contract to go to arbitration should they end up in dispute. I think, actually, it is positive for this country. It does trade on our reputation as being fair-minded, having a strong rule of law, and being a just country with a low level of corruption.

I think this is a bill without drawbacks. I think there are obviously positives for the companies, the trusts, and the other organisations that want a contract for arbitration. There are also benefits for the taxpayers and savings in the court system, and for our economy should we become an international destination of arbitration. I commend this bill to the House and hope it will receive widespread support.

Before I call Hon David Parker, earlier in the day I complimented Jami-Lee Ross on his ability to master his subject and to refer only to brief notes on a first reading speech. I want to add Paul Foster-Bell to those comments. I think the quality of the debate is improved by people who do not just mumble their way through a speech that someone else has written. I want to compliment the member.

💬 Hon Simon Bridges: No pressure, David.

No pressure at all—no pressure at all. The Labour Party is supporting this bill at its first reading, but I do want to address a number of issues that I would like the select committee to address. The first one, if I could deal with the issue that Paul Foster-Bell raised in respect of this issue, is that there should be a rebuttable presumption that court proceedings in respect of disputes arising out of arbitration proceedings should not be published. I am not sure about that. I heard Paul Foster-Bell’s arguments in favour of it, and I accept the proposition that you should not be able to hold over the threat of litigation as a negotiating technique, but, on the other hand, there is also a public interest in court decisions being published. That applies in every other area of law, and I would want the select committee to test whether that presumption should be overridden in respect of arbitration, and, if so, why.

The other example that is given about the need for confidentiality in order to preserve the feelings of people in respect of matters arising from trusts is another issue where there is scrutiny needed, because I can understand families not wanting to have publicity around disputes over large amounts of money in trusts. But, again, there is an argument that there is a public interest in those sorts of things being scrutinised. We live in a society where there is this increasing concentration of wealth amongst the 1 percent around the world and in New Zealand, and I am not sure that it is right that trusts, in respect of the financial interests of “1 percenters”, once they come into conflict, should escape the scrutiny of the public.

There are some interesting principles that lie behind theoretical limits to trusts. The rule against perpetuities, which is still in New Zealand law through proxy periods defined at law, stops people controlling the future for ever after their death by controlling the way in which their wealth is dealt with after their death. So there is a rule that says—the old rule at equity was that the length of a trust created by someone could be no longer than a life in being plus 21 years. A life in being plus 21 years was the length of life of a person alive at the date of the death of the person who created the trust plus 21 years. If you had a trust you could say “This trust shall last for the life of my last living descendant”—might be a grandchild—“plus 21 years.” If it was any longer than that, it was an illegal trust and the trust failed. The reason for that is that at equity the courts decided that it was not desirable that you have these dynasties that go on for ever on the basis of these concentrations of wealth where the person who made the original wealth could control the lives of their descendants through the way in which that wealth was dispensed under the trust that was created by the wealthy person in the first place.

In this world where we have got this move towards concentrations of wealth, which have been well described by Thomas Piketty and others, I think it is appropriate to ask ourselves the question: now that we have these concentrations of wealth, when these disputes arise amongst subsequent generations as to the division of these large amounts of wealth, maybe it is appropriate that we occasionally do see into these disputes so that we can get an idea as to how long these bundles of wealth are persisting in society, and whether we think these rules are fair. I am not sure where the correct line lies there, but it is another area that I would like to see the select committee consider.

In respect of the issue arising from the issue of Carr v Gallaway Cook Allan, I have to disclose an interest. Mr Carr was a client of mine for many years, in a very complex—very complex—series of disputes involving various parties, which were the preceding facts that led to the very complex set of affairs that arose, leading to Carr v Gallaway Cook Allan. It is a very sad case in a lot of ways, in that there was a very large award of damages in the end, which exceeded the insurance cover of the defendant firm and so caused hardship—quite considerable hardship—to some of the defendants in that case. I think that the amendment that is proposed to the Arbitration Act, arising out of the jurisdictional issues that were raised too late in that case, is something that I agree with. The member’s amendment, in that regard, has my support, because I think if you are going to raise objection to an arbitrator’s jurisdiction, you should do so early. You should not leave it until later in the process.

I think that is probably all I have got to say at that stage on this bill. Can I thank Paul Foster-Bell for bringing it. Can I also thank the Arbitrators and Mediators Institute of New Zealand for its note. I did think that its advice in respect of moving to trust disputes involving descendants, such as grandchildren, being able to be resolved through arbitration, rather than through the courts, did raise some of those questions for me as to whether that was the right step, but I would not have had that question or that insight if it had not been for the information provided by it. The restrictions on reporting I have covered.

The final thing is the reference to a challenge to jurisdiction arising out of the Singapore case, referred to as Astro v Lippo. That was a lengthy and expensive arbitration of issues arising in the telecommunications industry, and the amendments that are proposed here are to close the potential loophole in the New Zealand Act, which was exposed by that decision in respect of either Singapore or Hong Kong—I am not sure which. So that seems a sensible provision in this bill too.

It is a pretty technical bill. There are some issues that I think we should delve into as a matter of first principle, as to whether we should have further confidentially around some of these trust arrangements. I am not completely convinced that we should remove this current requirement that some disputes, in respect of grandchildren of trusts, should be dealt with through the courts rather than through arbitration. I quite like the openness of court processes in respect of these large amounts of wealth and the attempt to control that wealth beyond death.

Sarah Dowie.

💬 Clayton Mitchell: I raise a point of order, Mr Speaker. I just think it is an appropriate time to commend the earlier speaker for his lack of notes and the eloquent way in which he spoke on this bill. I think it is just another indication of the calibre—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! The member will resume his seat. If the member interrupts another member with a point of order of that type again, he will get half an hour off.

💬 Hon David Parker: He didn’t interrupt anyone.

The ASSISTANT SPEAKER (Hon Trevor Mallard): I had called Sarah Dowie.

💬 Hon David Parker: She hadn’t started.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! David Parker will now be quiet. I indicated—I called Sarah Dowie. She had the floor, and, therefore, she was interrupted by the point of order. The member should know that. Sarah Dowie—I will let the member start again.

💬 Hon David Parker: I raise a point of order, Mr Speaker. I would refer to an earlier point of order by a gentleman who sits behind me at question time, who has previously said to the Speaker that an interjection during the time before people start a contribution is not interrupting their contribution at question time. That honourable member was the Hon Trevor Mallard, and I wonder whether the same thing applies during speeches at this time rather than question time.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I think the member knows that that sort of consistency is the last refuge of fools. I call Sarah Dowie.

I rise in support of the Arbitration Amendment Bill in this first reading, brought to the House by Mr Paul Foster-Bell. I want to start by congratulating the member. While this is a technical bill, it is a well-thought-out bill, and one that will certainly strengthen our systems and procedures around arbitration. I also want to congratulate him, given that he is going to leave our ranks come election 2017. He has already had one member’s bill pulled from the ballot, debated in this House, and passed, and now he has a second. I thank him for that, and I thank him for the thought around this bill.

I am a fan of arbitration. I think that alternative dispute resolution has a real place in our legal system. I think that mediation and arbitration are valuable tools in the legal tool box. While arbitration is still very formal in nature, it does significantly reduce cost, it is effective—definitely time effective—and it certainly reduces the pressure on our court system if people who have commercial disputes or disputes regarding trust deeds decide to opt into them. I pick up on the point of Mr Foster-Bell that not only is it an effective way forward to resolving disputes, but certainly, given our reputation internationally as one of the least corrupt places in the world, that we do abide by the rule of law. It is a good thing for our reputation to have strengthened arbitration laws, to have them consistent with international law, and to have them available when there are parties in a dispute that are international so that they can choose New Zealand as a place to arbitrate their disputes. That $1 million that was provided as revenue to arbitration is certainly significant, and one that we should be capitalising on.

Again, I say that this is a nuanced bill, but it is certainly one that will strengthen arbitration in New Zealand moving forward. I do like the idea that this plans to change the confidentiality rules. Obviously, arbitration in itself—the negotiations are confidential. We do that so that parties go to dispute resolution and feel safe in the room, so that they can get to the nub of the issue and discuss their issues robustly, and so that they can come to the table in a bona fide way.

I actually disagree with the member opposite, Mr Parker, in that I think that if you are going to dispute resolution to negotiate an outcome in good faith, then you should not be allowed to use that confidentiality as a weapon in the future, should you appeal some procedural matter. I think that the confidentiality that is set out in this bill—the presumption of it—strengthens the tool of arbitration and gives it extra weight as a method forward to resolve disputes. So we will look into that issue as a committee moving forward, but, certainly, I think that it is a very good change that Mr Foster-Bell has mooted, and one that will strengthen the tool box around arbitration. Obviously, the court, under this bill, would reserve the right to waive that confidentiality if it was in the public interest to release certain details of a case. So I think that covers Mr Parker’s concerns. But, again, I say that we, as a committee, will look into that issue moving forward.

Certainly, the last thing that the bill does is strengthen the enforceability of arbitration awards, which is particularly good, given that in the past there have been appeals on procedural issues that are meaningless. It is only fair that awards should be enforceable, and, again, that adds strength to the objective of arbitration moving forward.

So I think this is a good bill. I commend the member for bringing it to the House. Again, I think that arbitration has a valid place in our justice system and should be supported.

I rise with regard to this member’s bill, the Arbitration Amendment Bill. This bill seeks changes to New Zealand’s arbitration procedures. Arbitration is an alternative form of dispute settlement, and the Green Party supports it on a number of grounds. It can reduce legal caseloads and reduce costs for participants, and it is often faster. It has its place in a number of areas apart from just commercial law, such as in family disputes and disputes between neighbours, maritime disputes, sports, employment, environment, domain names, and it is good to see the Arbitrators and Mediators Institute of New Zealand discussing arbitration to support climate action, for example, and even international conflict resolution. So we are in support of arbitration. It is an important tool.

We have some, should I say, concerns about issues of transparency. We understand that participants may want to avoid the glare of publicity for reasons that are often peculiar to a case—for example, for commercial reasons or for commercial confidentiality in trademarking. It could be for the reasons of family privacy—I think that is an important one for many families—and for emotionally sensitive issues. So there are some strong grounds for confidentiality. Like the previous Labour speaker, David Parker, we have some questions around confidentiality that we will look to address during the select committee process.

We think that the arbitration system in New Zealand has gained credibility through the appointment of experts, including former judges, through having a code of ethics and a right of appeal on legal grounds, and through having a complaints procedure. These are important safeguards to ensure that the arbitration system is working well.

So we regard this bill as being useful. It enables trusts to agree on arbitration in trust deeds, it sets a presumption of confidentiality and clarifies jurisdictional grounds, and it makes arbitrations more enforceable. We agree with those aims. Therefore, we support this bill, in accordance with the constructive approach that the Green Party always brings to members’ bills, and we commend Paul Foster-Bell for bringing in this bill.

I cannot help but conclude this speech in this debate without making one other comment on arbitration. Not all arbitration is supported by the Green Party. In particular, there is a form of investor-State dispute settlement as a form of arbitration, which is not directly the subject of this bill, but—

The ASSISTANT SPEAKER (Hon Trevor Mallard): No.

—I feel that I cannot help but mention it. So we do not like investor-State dispute settlement as a form of arbitration applied to Government laws and regulations—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I think the member, even before he started his comments, pled guilty—one of us stands up at a time, all right?

Oh, yes. Sorry.

The ASSISTANT SPEAKER (Hon Trevor Mallard): The member pled guilty to going into irrelevancies, and unless he can absolutely relate his comments to the bill while talking about a system that he says is no part of this, I cannot quite see how he can do it. I will give him another chance, but it will be a brief one.

Thank you, Mr Assistant Speaker. I definitely would not want to talk about issues that are not in the scope of the bill, and I am very pleased that the bill does not address issues like investor-State dispute settlement. So—

Order! The member will resume his seat.

Well, there has been a lot of talk this evening about eloquent speeches that people have made with very few notes, and I would just like to assure the House that this will not be one of them. There are a few notes in front of me and, certainly, eloquence on this topic is probably not what you are going to get from me.

However, I do at this point want to commend Paul Foster-Bell. As my colleague Sarah Dowie said earlier, it is pretty impressive to get a second member’s bill out of the ballot. The first one, of course, was his very successful Anzac Day licensing one, and I think that was a very good bill. This one, I am sure, is going to be a very good bill once it comes into force as well—which I am sure it will—having been through all stages of the parliamentary process. It is great to see already from the speeches that we have heard from the other side of the House that there is wide support for it.

I have to acknowledge that when I first saw this bill and saw that it proposed changes to the Arbitration Act 1996, I misread it and thought that the Arbitration Act was from 1966. As someone who was born in 1966, I could not understand why anyone would want to change anything that originated in 1966, but I realise now that this is, in fact, a 1996 Act that we are going to bring some changes to.

I think there are some really good points that have been made already tonight. I am particularly pleased to see that this bill is going to bring us more in line with other international practices of arbitration law. I think, generally, I would say that it is a good thing that we are aligned with international practice in law, although I have to say, having visited the Australian legislature in the last couple of weeks, there are some things that go on over there that I do not think we want to be aligned with, particularly when it comes to protection orders for women across states, and all that kind of stuff.

But, in this one, I think it is actually really important, when you do have disputes that cross international boundaries, that our laws are consistent with what you have in other countries. My ears pricked up a little, I have to say, when it was talked about that people may then make New Zealand their place of choice to bring arbitration. I thought that perhaps the Minister of Tourism might be interested. We could perhaps start an arbitration tourism venture. We are starting to see that happen already after Louisa Wall’s marriage equality bill, where people are travelling here to get married. Perhaps there is a tourism opportunity in the field of arbitration as well.

When it comes to this presumption of confidentiality—and I think it is interesting that this has been one of the things that has been talked about throughout this debate as we have gone on this evening. From my lay background it certainly seems particularly appropriate when relating to trusts. I will stand to be corrected—and I am sure I will be when the time comes at select committee or otherwise. When Mr Parker spoke, the immediate place that he went to when talking about trusts was talking about the very wealthy who might protect their wealth inside a trust and for generations to come. My mind always goes immediately, because of my background, to charitable trusts, and I would imagine that for a charitable trust, having confidentiality when involved in an arbitration could well be a useful thing, because if there is some sort of dispute that has yet to be settled, having their good name taken out there publicly may not be useful to them or to the people that they work for. So at this stage I support the idea of it being a presumption of confidentiality because that does, in fact, ensure that we can get things sorted clearly and, as my colleague Sarah Dowie said earlier, of course the proceedings of the arbitration would always be done in private as well.

So, as I said, it is a good bill brought forward by Mr Paul Foster-Bell. As promised, this has not been eloquent at all. I would normally say that I look forward to discussing this when it comes through to the select committee. I am not sure that on this particularly occasion I will be enjoying it. Law is not a field, as a general rule, that I enjoy getting stuck into, but the bill will be an important piece of legislation for what is an important part of our legal system, and I commend it to the House.

New Zealand First generally supports arbitration as an alternative dispute resolution method because it does tend to reduce the caseload of the courts, it reduces delays, it is usually less expensive, and, mostly, it allows the parties to work out a solution of their own, with professional assistance, of course. But New Zealand First will not be supporting this bill because we doubt very much that it is appropriate to do the things that it sets out to do in relation to court proceedings concerning arbitrations.

We were told by the member who is promoting the bill that there are two issues addressed by it. The first is that the bill would actually introduce a new presumption of confidentiality in relation to proceedings concerning arbitrations, whereas, of course, as we know, court proceedings are usually public, and that principle is well-established in the legal system. We also understand, however, that parties are keen, often, about confidentiality because they do want to protect their intellectual property, or their sensitive business information, trade secrets, and so on, and they may well be afraid of reputational damage because of what happens during the proceedings. But we were not told very much by the member about why it is important for court proceedings to be public, so I think it is a bit one-sided in the way he presented his argument, for that reason. Second, we were told also that the court would have the discretion in this bill to set aside confidentiality in appropriate cases, but I doubt whether that would actually be enough, and I would like to hear a little bit more discussion about that particular point.

The second of the issues mentioned by the member concerns enforceability. The bill would have provisions that would prevent arbitrations from being set aside for procedural reasons, and we are told that there are clauses in contracts about confidentiality because that is what the parties want and they do that by contract. I accept that—no problem with that. But there are almost always good public interest reasons why proceedings about such arbitrations need to be public. That should still be the main rule, and that procedure should not be reversed.

Just turning to the main provisions in the bill, the first one actually concerns a rather narrow area concerning arbitration of trust disputes. We have all heard some quite interesting cases reported in newspapers about that, and you can understand why the parties concerned would prefer privacy about that. Also, they would be interested in the thing being dealt with promptly, and privacy, of course, is something that the parties themselves usually want—not necessarily always, but usually. But we in New Zealand First are very uncertain about this whole area because it appears to us that the proposals in the bill go too far in that they would tend to oust the jurisdiction of a court. We are very concerned about that—very concerned, indeed—because that is a very important principle in our legal system and we think that it needs to be preserved.

The other main amendment concerns the restriction on reporting of court proceedings to arbitrations—for example, about challenges to why an arbitrator would be appointed, or some other appeal on a question of law. But it is actually in the public interest that those things be public, so that the public is aware and there can be debate not just amongst the legal community but others as well. So we have grave concerns about that proposal, too.

On balance, we would not support the bill. It is highly technical. It has not come through a department with the benefit of its advice, or the Law Commission, and we think that a bill of this kind ought to do so. So, for those reasons, New Zealand First will be voting against it.

One of the things that I have discovered on the Justice and Electoral Committee, which I am very privileged to serve on, is the very worthy contribution very often made on that committee by Mr Denis O’Rourke. Sadly, he did not join us in Australia a couple of weeks ago. It is a shame, actually, because I am sure he would have made a useful contribution. But I have to say that some of the remarks made just then are wrong, actually. Actually, it seems to me that if you listen to the tenor of his speech and if you listen to the points he was making, everything would lead one listening to think that he would support the bill rather than vote against it. So I think it is a shame that New Zealand First is voting against it, and there are a couple of reasons for that.

The first was that just at the very end of his speech he said: “Well, this hasn’t been through the Law Commission process or through the department, therefore we can’t vote for it.” Well, that seems to me to be a reason to vote for the bill. Often members’ bills come before the House and one of the things about drafting members’ bills is—I see members opposite, some of whom have had member’s bills drawn, particularly notable ones, with Ms Wall over there, including myself and other members—you do not have the—

💬 Hon Simon Bridges: Yeah, not Faafoi.

“Not Faafoi”, my colleague Simon says. Well, maybe Lady Luck of the biscuit tin has not smiled on my breakfast club friend over there.

💬 Hon David Bennett: He’s seen a biscuit tin, all right—ha, ha!

Anyway, the biscuit tin has treated to me OK so far—two in 2 years.

💬 Hon Simon Bridges: Yeah, Chris likes the biscuit tin too.

Anyway—sometimes a bit too much, on both sides. The thing is that often members’ bills come to the House without that background work.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! We are going to get back to the bill, are we?

Yes. I am making the point that often bills come to the House for that work.

The second reason he advanced was a very concerning worry about confidentiality, because what this bill does—in, I have to say, a very poorly drafted sentence in the general policy statement in the explanatory note of the bill—is: “ensure arbitration clauses in trust deeds are given effect to extend the presumption of confidentiality in arbitration to a rebuttable presumption of confidentiality in related court proceedings”. Mr O’Rourke was very concerned about the erosion of confidentiality. I think that is fair enough. There is a legitimate debate to be had around that, and I think Mr Foster-Bell would be the first person to acknowledge that. You can have a legitimate debate about that, but the place for that debate is actually at the select committee where you get the legal experts.

I have got to say, on a bill like this, as a committee we are going to rely on not only the Ministry of Justice officials but also very worthy groups like the Law Society, and I suspect we will see a few Queen’s Counsel turning up. It is usually the Queen’s Counsel who end up doing the arbitration, and they will have very firm views, I suspect. We will be relying on their evidence as to whether or not that is the right approach, as outlined by Mr Foster-Bell. But that is a reason to vote for the bill at the first reading.

The other reason that I think New Zealand First should support the bill is that this brings New Zealand, I think, increasingly into line with foreign legislation. If you read the general policy statement in the explanatory note of the bill, it talks about how there has been a large increase in arbitration worldwide over the last few years, and New Zealand is increasingly out of step with the legislation. The Arbitration Act was passed in 1996. That is 21 years ago, and it is probably about time that we updated that Act. There is probably a case for a thorough-scale review. It is not something that can be done through a member’s bill, but what one can do is make small and incremental useful changes, and I think that is what this bill does.

So I would have expected a party such as New Zealand First, which often rails against how we are out of step with tax legislation and multinational trusts and things like that, to vote for a bill that increases New Zealand’s international linkages and brings New Zealand into line with other legislation, but New Zealand First is not going to vote for it and that is a shame.

I think the bill will pass. I am looking forward to examining it on the Justice and Electoral Committee. It is a very busy committee. We have got a lot of bills before it at the moment—

💬 Paul Foster-Bell: Punishing.

It is a punishing schedule of business, Mr Foster-Bell says. I do not know about punishing; we certainly have a lot of business and I think this will be a worthy addition to our schedule.

Tēnā koe e te Māngai o Te Whare. It is my pleasure as a member of the Justice and Electoral Committee to speak on this, the first reading of the Arbitration Amendment Bill. I would like to commend my colleague Paul Foster-Bell. It is a bill that meets a need and I want to acknowledge that, and certainly I want to acknowledge the information that we have received from John Walton, the President of the Arbitrators and Mediators Institute of New Zealand.

I also want to acknowledge that this whole area actually stems from the United Nations Commission on International Trade Law model law on international commercial arbitration of 1985. So it is actually called the 1985 model law, and it was amended in 2006, which added a more comprehensive approach to interim measures in support of arbitration. New Zealand became a signatory in 1996. It is interesting, the whole issue about model law, which is really about suggested patterns for lawmakers and Governments to consider adopting their own domestic legislation based on the framework. We are actually implementing an international instrument—so well done, Mr Foster-Bell.

I find it interesting, the whole discussion around arbitration versus court proceedings. I have googled, and arbitration is “a private dispute resolution mechanism”. So I think the reason you have highlighted specifically that it is about confidentiality is that it is a private process, and that process is undertaken by agreement by contract—which is actually why there are limited rights of appeal—as opposed to a court process, which we all know is public. The courts are usually governed by judges and juries, and there are rights of appeal. So those are essentially the differences.

I was fascinated to look at the Carr v Gallaway Cook Allan Supreme Court decision. Just as a bit of background, that Supreme Court decision was a dispute about a commercial property sale, and included within that particular arbitration agreement the right of appeal based on questions of law and fact, which, in fact, is not part of clause 5 of schedule 2 of the Arbitration Act 1996. Within that judgment—and I think it is really interesting to note, given that, actually, that seems to be the premise and context for this amendment—the Supreme Court identified three issues. The first was what constitutes an arbitration agreement terms of the Act; secondly, can the offending words in relation to appeals on question of fact be severed from the overall agreement to arbitrate; and, thirdly, if they cannot, should the award be set aside on policy grounds under article 34 of the model law in schedule 1 of the Arbitration Act—because that is, in fact, what happened. The agreement that was reached in the arbitration was set aside.

So I think this is a very important piece of legislation. Our select committee is incredibly busy, but I do not think that we are too busy to fit this piece of legislation into our schedule.

I also want to particularly highlight the issue between the court and arbitration as it relates to trust issues, and there have been issues lately where families have had to go through very public processes. As noted in some of the information that I have received, some of those family members—I do not think it was good for their family matters to be aired in such a public way.

That is what this particular bill seeks to do. It is to provide that mechanism of arbitration that allows families to have their disputes, but let us have disputes that are related to family matters in private and let them be confidential. Overall, we want an agreement that is binding on both parties, so that if people go through that process they cannot then go to court and, in fact, end up starting the entire process again.

So well done, Mr Foster-Bell. There are questions to be answered, but I am sure that the select committee has the capacity to answer those questions. I look forward to participating in the process and hearing from esteemed legal minds, because I am sure—as Chris Bishop has already highlighted—there will be much interest, particularly from certain sectors of our judicial system. Kia ora.

It is my pleasure tonight to stand up as a member of the Justice and Electoral Committee to welcome the Arbitration Amendment Bill into the House in its first reading here tonight. I do look forward, as my colleagues have said, to further scrutiny of this bill at the select committee stage. Being not of a legal background, I too look forward to the input of our Law Society colleagues, of the Queen’s Counsel, and, mostly, of our advisors to the committee, because we will be relying on their expertise to guide us through this process. I acknowledge my colleague Paul Foster-Bell for bringing this member’s bill to the House, and I congratulate him on having it drawn from the ballot.

This bill is an alternative to dispute resolution, and, as we have heard tonight, there is quite a lot of focus placed on the issue of confidentiality, and this bill introduces the presumption of confidentiality. It is also vital to know, for the people involved in these dispute resolutions, that the arbitration process cannot be used as a lever, or a form of blackmail, even, to take cases further into the court system where the confidentiality is lost, and, therefore, intellectual property and private business information can become public in that forum. That can have a devastating effect on a business, particularly if it is publicly listed and its share price can be affected and deals can be cancelled—and that can be irrespective of the substance of the dispute.

There is another aspect to this bill, and it is that those arbitration decisions are more enforceable. The bill also allows for this process, because it is more timely, to free up our court system. Of course, when that saves time in the court system it in turn saves money for everyone involved. We need this process and confidentiality so that people approach it in a spirit of good faith.

There is also a strengthening in this bill of the enforceability of awards. At the moment courts can be reluctant to enforce awards if there are slight procedural matters that may not have been dealt to as well as they could be. Having a strengthening of that aspect is also beneficial to all parties involved.

One of the more important aspects of this bill is that it brings us into line with international arbitration and the procedures used. As a trading nation, this is particularly helpful to us because we are known throughout the world as an honest and respectful country to trade with, and, in order to maintain that reputation internationally, adjustments to our legal framework, just procedurally—and the Arbitration Act 1996 is the one that I am referring to—make good sense in bringing us into line with the rest of the world. We want to maintain that respected and honest reputation with our trading partners.

I have great pleasure in supporting this bill, as do most of my colleagues here in the House tonight, and I have pleasure in commending it to the House. Thank you.

Firstly, I want to thank all the members who have made a constructive and well-informed contribution in this debate—in particular, my colleagues on this side of the House, but also the Hon David Parker and Louisa Wall, and Barry Coates from the Green Party. There are some issues that we will obviously need to address in the select committee. As a proud member of Transparency International New Zealand I want to make sure that the extension of a rebuttable presumption of confidentiality does not impact on our proud reputation for transparency and lack of corruption in this country.

I think there will be an opportunity later, during the select committee process, to rebut some of the incorrect statements made by the member Denis O’Rourke. Given that this bill is seeking to enforce confidentiality throughout the whole process should the outcome of an arbitration go to an appeal—and these are private agreements. That was a very good point, I think, that Louisa Wall made. These are agreements made voluntarily between two parties. No one is being stifled in this regard, and the court will—

Order! I apologise for the interrupting the member, but the time has come for me to leave the Chair.

Debate interrupted.

Sitting suspended from 10 p.m. to 9. a.m. (Thursday)