The resources sector is undoubtedly going through challenging times, however, Perth has clearly established itself as a global centre for business expertise in mining and oil and gas.
The resources sector is undoubtedly going through challenging times, however, Perth has clearly established itself as a global centre for business expertise in mining and oil and gas.
We have moved on from simply being a quarry, or an operations centre, and have become a major global centre of business expertise for the resources sector. This means that many of the major business activities associated with the resources sector, such as negotiating and implementing financing arrangements, carrying out detailed design and engineering planning, and negotiating contracts, are undertaken here by Perth-based business decision makers and experts.
Challenging economic conditions can mean that legal disputes become more prevalent. Rather than being able to simply move on readily from one project to another, parties can be more inclined to fight hard to extract whatever profit they can from the existing or recently completed projects in difficult times.
In good or bad economic conditions, an important part of a successful resources sector is the capacity to efficiently resolve legal disputes that arise.
The newly launched Perth Centre for Energy and Resources Arbitration serves this need, and helps to complete the picture of Perth as a global centre for all of the business activities associated with the resources sector.
It is common practice throughout developed economies for the parties to construction projects and other resources sector major contracts to agree in their contracts that any disputes will be resolved through a commercial arbitration process. In the resources and energy sectors, many disputes will require detailed consideration of technically complex issues.
In commercial arbitration, the parties can agree on the process, venue and decision makers to resolve their disputes; this is generally believed to be the most efficient way to deal with these types of matters. It is also usually quicker, more private and, done right, less expensive than the going through the court system.
Arbitration itself is big business for law firms and professional services firms that may provide expert evidence. It can be a major activity for the companies directly involved.
Singapore has increasingly promoted itself as the regional centre for commercial arbitrations and has attracted arbitrations from around the region, including from Australia. In some of these arbitrations there are experts flown in from all over the world to give evidence, witnesses from the companies involved in the dispute, teams of lawyers for various parties, and the arbitrators themselves.
All of these parties may be involved in a case that can run for weeks or in some cases months. This is big business for the tourism and hospitality industries in Singapore, as well as legal and other professional services.
But if Perth is increasingly the regional centre for resources and energy business expertise and activity, why should the arbitrations not be carried out in Perth?
Recently launched by Attorney-General Michael Mischin, the Perth Centre for Energy and Resources Arbitration is set to capitalise on these opportunities. The centre promotes Perth as the natural venue for arbitrations in the energy and resources sector, and has a suite of expert arbitrators from Australia and overseas who may be appointed to arbitrate on any particular dispute.
The centre encourages major resources companies, whether they are operators, construction or services businesses, or other participants, to write into their contracts a commercial arbitration process that requires Perth as the seat for the arbitration.
This is another example of Perth asserting its central role in the resources and energy sector throughout the region, and a reverse of the brain drain that has typically led to highly qualified professionals leaving Perth to seek out opportunities elsewhere.
The expertise and the opportunities are now here in Perth and businesses should be encouraged to ensure that any arbitration processes are also undertaken in Perth.
