Rinehart arbitration provisions upheld by the High Court of Australia

Technically, arbitration under the UNCITRAL Model Law, and for that matter under the 1958 NY Convention on the Enforcement of Foreign Arbitration Awards, if an arbitral award is to be upheld, there must be a valid agreement to arbitrate.  This is the case under our Arbitration Act 1996, and that position has been confirmed by the Supreme Court.

Where rights are granted, or equitable rights conferred, for example in a trust deed, if that deed provides for the arbitration of disputes arising out of or through the trust, then the sort of problem which seems to only interest lawyers arises - trustees and beneficiaries are not parties to an "agreement to arbitrate" as the law requires.  So, arguably, an enthusiastic party wishing to stay court proceedings under article 8, or to otherwise engage the support of the court for enforcing the arbitration agreement or the award might find themselves in difficulty.  More critically, with the lead set by the Supreme Court, an application to set aside an award (under article 34) or resist enforcement of an award (under article 36) would be hard to resist.

This issue has been considered in Australia in a number of related cases involving a dispute between mining magnate, Gina Rinehart, and her daughter, Bianca.  The High Court of Australia has held today, in Bianca Rinehart v Gina Rinehart [2019] HCA 13 has held that, having regard to the subject matter in dispute, the third party companies taking assignments of the mining rights from parties to the relevant deeds are persons claiming "through or under" that deed, and are therefore parties to an agreement to arbitrate under s 8 of the NSW legislation.

With arbitration under trust deeds currently under consideration in the Trusts Bill, this case is of considerable interest.