INTERNATIONAL ARBITRATION 1/3LY
Q&A AUSTRALIA: PERTH’S DEDICATED CENTRE FOR ENERGY AND RESOURCES DISPUTES BETH CUBITT, TOM FRENCH AND LUKE CARBON, PARTNER, SENIOR ASSOCIATE AND ASSOCIATE AT CLYDE & CO IN PERTH INTERVIEW THE DIRECTOR OF THE RECENTLY OPENED PERTH CENTRE FOR ENERGY AND RESOURCES ARBITRATION (PCERA), KANAGA DHARMANANDA SC. On 12 March, the Perth Centre for Energy and Resources Arbitration (PCERA) was officially launched by the Honourable Treasurer of Western Australia Mike Nahan. PCERA is a not-for-profit arbitration centre with a focus on disputes in the energy and resources sector. It is the first dedicated arbitration institution to be established in Western Australia, which is home to some of the world’s biggest energy and resources projects and companies. Western Australia is a global centre for exploration, exploitation and export of natural resources. Last year, the value of resources projects under construction or in the committed stage of development in Western Australia was valued at around AUD 160 billion. As a result, legal practitioners and judges in Western Australia have developed specialised legal and technical knowledge in the energy and resources sectors, both in relation to contentious and transactional legal work. Despite this, Perth has not historically been a common seat for international arbitration in the Asia Pacific Region. PCERA’s goal is to make use of local industry knowledge and expertise in the energy and resources industries. It is hoped PCERA will establish Perth (which is in the same time-zone as Singapore, Hong Kong and mainland China) as a specialised regional centre for energy and resources arbitrations. Clyde & Co has already advised local and international companies in relation to incorporating PCERA arbitration clauses into their energy and resources contracts. We spoke to the director of the centre, Kanaga Dharmananda SC.
Q What gave rise to the creation of PCERA? A PCERA arose as a result of a felt need for assistance in relation to a number of arbitrations being conducted in Western Australia without the support of any institution, being ad hoc arbitrations. It also responded to a perception about how international arbitration practice could be best implemented in relation to the energy and resources sector in Western Australia. The aim is to develop best practice by reference to the requirements of the industry. As it happens, I was awarded a Churchill Fellowship to study the establishment of an arbitral centre in 2012 and to some extent, PCERA reflects what I learnt during that fellowship. Q Do you think Perth could ever become a regional hub for energy and resources arbitration? What are the challenges? A Despite the tyranny of distance and the possibility that perceptions as to the attractiveness of Perth as a centre for arbitration may not be universally positive, I think there is real scope for Perth to become a regional hub for energy and resources arbitration. This is because the dispute may well relate to a project that is geographically most closely connected to Perth. It is also because, as there is greater familiarity with what Perth has to offer in terms of a stable court system with great efficiency in terms of support for arbitration, there well could be further interest in using Perth. Perth happens to be in the same time zone as a number of countries in South East Asia and in Asia. Ultimately, however, the question will be for in-house counsel as it is their preferences that usually dictate the selection of clauses. The challenges that PCERA faces in attracting international work relate to the fact that it is a nascent institution. It is developing its brand and its name recognition. This is to be contrasted with other more established institutions that have had decades to establish their brand. In addition, there are a number of alternatives including traditional litigation that will challenge the capacity of PCERA to build its book of cases. Still, ultimately where there is a desire for a private process using persons with a special expertise in energy and resources, PCERA presents as a good choice.
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