Private-Public Arbitration in Australia: Public Law Concerns, Private Law Responses

Abstract

Unlike investor-state arbitration, commercial arbitration pursuant to contracts between governments and private actors has largely flown under the radar in Australia. By interpreting and applying the law to control government action, arbitrators exercise public authority and thus contribute to governance, but without the hallmarks of the judicial process. Although the past two decades have seen a growing awareness of the implications of contracting out public functions to private bodies in terms of public law accountability, Australian courts have generally not subjected decisions made under or pursuant to contracts to constitutional or administrative law judicial review. There are few limits on the ability of federal and state governments to enter contracts, and no real limitations on governments’ power to enter contracts that use arbitration to resolve disputes. For that matter, the law regulating arbitration in Australia does not distinguish between public-private arbitrations and arbitrations between private actors. As such, the law cannot account for the public law dimension of some public-private disputes, or account for the involvement of arbitrators in controlling government action. The choice of arbitration as the dispute resolution mechanism operates to further insulate exercises of public power under contract from the already limited prospect of judicial scrutiny in Australian law. Although the time might not yet have come for Australian law to confront these issues, any appreciable increase in the uptake of government contracts relying on arbitration and one or two more high profile arbitration cases might well raise the spectre of domestic legislative reform to better protect the public interest.

Keywords: arbitration, public-private, investor-state dispute settlement, government contracts, executive power, public law, accountability, administrative law, constitutional law, impartiality, transparency, judicial review,