Australia’s Anti-ISDS Approach Again: AANZFTA Protocol To Be Ratified

Around 21 May 2024, after I had presented a submission and oral evidence at a public hearing late March, the Australian Parliament’s Joint Standing Committee on Treaties (JSCOT) issued its Report 215 agreeing that the Australian government should proceed to ratify the ASEAN Australia NZ Agreement for a Free Trade Area (AANZFTA) Second Protocol. This is despite the Labor Government in November 2022 declaring that it will not agree to any form of investor-state dispute settlement (ISDS), relevantly arbitration, in future treaties; and will approach counterparties seeking to remove or otherwise revise ISDS provisions under existing treaties. The Protocol includes a Work Program to review the ISDS provisions, within 18 months of coming into force, which will proceed largely in parallel to a review of the investment chapter also in the Regional Comprehensive Economic Partnership (RCEP) FTA, which might involve adding ISDS provisions, as it includes the same 12 states party but also three big FDI exporting economies that have generally favoured ISDS: Japan, Korea and China.

In the JSCOT inquiry into ratifying the AANZFTA Second Protocol, the Australian Council of Trade Unions (ACTU) and a small NGO (the Australian Fair Trade and Investment Network, AFTINET, which has persistently objected to ISDS in IIAs in parliamentary inquiries) recommended against ratification due to the Second Protocol retaining ISDS for at least the next few years. My Submission recommended ratification, explaining some of the context for ISDS (along the lines and other cited writings mentioned above) and appending my 2020 Submission to DFAT’s review of old IIAs (reiterating where the Second Protocol’s work programme might make some further drafting improvements around ISDS, especially to further enhance transparency and efficiency). We three were then invited to give (concurrently) oral evidence to JSCOT on 25 March 2023.[1]

The ACTU and AFTINET presented a very broad (and curiously similar) definition of ISDS:  a procedure giving corporations additional rights to sue governments for compensation if they can argue a change in law or policy will harm or impinge on their future profits. They also both highlighted the three claims recently brought under AANZFTA against Australia by Zeph (a Singapore-incorporated company controlled by Australian mining magnate and politician Clive Palmer) and more generally the risks of regulatory chill to sovereign states particularly from fossil fuel investors, as well as the costs of defending claims even when states prevail. (Similar arguments were presented in the Open Letter from Australian academics and lawyers opposing ISDS, circulating from May 2024.[2]) AFTINET also asserted that there was no good evidence that ISDS-backed IIAs promoted FDI flows and that recent IIAs were omitting ISDS – including supposedly for India and New Zealand, but also the EU and Brazil.

My own evidence countered that ISDS claims require additionally proof of violation of substantive commitments offered by host states, that the Zeph claims face difficulties and anyway Australia does not close down its courts due to occasional aggressive litigants, while its outbound investors also protect their investments abroad through ISDS claims – particularly against states with governance issues. I also reiterated that there is some evidence ISDS-backed IIAs promote cross-border FDI, developing economies are failing to attract sufficient FDI to support the global energy transition,[3] and many states (including also eg Indonesia, India and Vietnam) are still offering ISDS in IIAs despite experiencing some inbound claims.


[1] The transcript of this Evidence is at ‘Second Protocol to Amend the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (ANAZFTA) Public Hearings’, Parliament of Australia (Transcript) <https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Treaties/AANZFTASecondProtocol/Public_Hearings> and the video-recording is at https://www.aph.gov.au/News_and_Events/Watch_Read_Listen/ParlView/video/2299575.

[2] Open Letter on ISDS (May 2024) <https://docs.google.com/forms/d/e/1FAIpQLSddWDUB2NzZAHYlGJDOxg0DiA-JySOGEE7f_09ZdwQNhryr3g/viewform>.

[3] ‘World Investment Report 2023’, United Nations Conference on Trade and Development (Report) <https://unctad.org/publication/world-investment-report-2023>.

When JSCOT’s Report 215 was issued, contrary to my expectation and curiously as this departs from her party’s past practice where a treaty includes ISDS, the Greens Senator for Western Australia Dorinda Cox did not issue a dissenting report – nor even seemingly attend either parliamentary hearing. The Report’s summary emphasised that:[1]

“Notably, Australia successfully negotiated a review of the existing ISDS provisions in [… marking] an instalment of the Government’s commitment to review ISDS provisions in agreements where they already exist, while ensuring Australia does not agree to ISDS mechanisms in new agreements.”

The Report’s Conclusions added (after noting my call for transparency around this ongoing Work Program):[2]

“Considering the significant interest in this issue demonstrated by a range of stakeholders in this and previous JSCOT inquiries, the Committee will seek an update on the progress of the ISDS review work program commitment in due course, and in any case would expect the Department [of Foreign Affairs and Trade: DFAT] to draw any notable developments to the Committee’s attention.”

The Report also quoted evidence given by DFAT that it “will obviously be coming to government to seek a mandate for the positions that we take into that review’ of ISDS under the Work Program”.[3]

Interestingly, the Report did not specifically mention the Zeph claims, although it stated:[4]

“At the public hearing submitters to the inquiry pointed out that there are currently ISDS actions afoot, some of which involve arrangements between Australia and ASEAN nations. The Committee inquired as to the cost of these legal actions to the Australian taxpayer. The Attorney-General’s Department (AGD) said ‘the Attorney-General and the Prime Minister have instructed us to vigorously defend those matters and we are in the process of doing so, and that does accrue cost.

In addition, after recording the opposition to ISDS and hence treaty ratification from the ACTU and AFTINET, the Report noted my concerns about relying solely on more politicised inter-state dispute settlement or arbitration agreed under individual investment contracts, before observing:[5]

The Committee sought clarification as to the recent trend away from ISDS. Professor Nottage said, ‘I think that’s a good thing—that we try something; it has an effect; we realise some of its problems, so we try to fix the problems […] and come up with a new compromise solution’.

My quoted statement in fact followed more specifically from my observation about the question of a ‘retreat from the high water mark of pro-ISDS approaches’.[6] The Committee also did not go on to mention my point immediately following in evidence that the EU has not abandoned direct claims by foreign investors altogether, but come up instead with the investment court compromise. I had suggested that this model could be considered by Australia (and regional states) in future treaty practice even when not negotiating with the EU, for example in the ongoing review of ISDS under AANZFTA’s Second Protocol and RCEP. (Subsequently I developed this proposal in a letter dated 10 April to the Trade Ministers of Australia and New Zealand.)

Furthermore, the Report did not mention my written Submission urging again specific improvements, including restrictions on ‘double-hatting’ and compulsory mediation before arbitration.[7] Overall, therefore, it seems that parliamentary interest and scrutiny around the specifics of ISDS or possible alternatives remains quite limited, deferring largely to the executive branch of government.


[1] Report 215: AANZFTA Second Protocol, available at Parliament of Australia <https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Treaties/AANZFTASecondProtocol/Report>, xv.

[2] ibid, para 2.95 (and 2.79).

[3] Ibid, para 2.74.

[4] Ibid, para 2.75. This level of generality may reflect a compromise reached between the Labor and Greens members (who might have preferred to mention Zeph and Clive Palmer specifically) and the Coalition members in drafting the joint Report.

[5] Ibid, para 2.80.

[6] Idem.

[7] Available at Parliament of Australia, <https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Treaties/AANZFTASecondProtocol/Submissions>.

Compromise way forward on investment treaty/FTA (re)negotiations

[On 10 April 2024, following my submission and then oral evidence given to the Australian parliament inquiring into the AANZFTA Second Protocol ratification, I wrote as follows to the respective Trade Ministers of Australia (Hon Don Farrell) and New Zealand (Hon Todd McClay). The latter’s response dated 29 April, quite non-committal, is below and here. I also had (confidential) discussions with DFAT officials on 23 May 2024 regarding my proposal.]

I am a New Zealander working in Australia since 2001, specialising in international business law including international and domestic investment law and dispute resolution.[1] I have provided many submissions to Australian parliamentary inquiries into ratifications of bilateral investment treaties or investment chapters of Free Trade Agreements (FTAs), including giving related evidence on 28 March 2024 urging ratification of the Second Protocol to the (ASEAN+2) AANZFTA.[2] Representatives from the Australian Council of Trade Unions and AFTINET (Australian Fair Trade and Investment Network) opposed ratification of the Protocol especially as it retained investor-state dispute settlement (ISDS) provisions, albeit to be revisited in a Work Program. The latter will run largely in parallel to negotiations to consider instead adding ISDS to the ASEAN+5 Regional Comprehensive Economic Partnership (RCEP), which FTA also involves Australia and New Zealand.

Australia’s Labor Government from November 2022 has reverted to its stance, when in power over 2011-13, to opposing ISDS in new treaties, but seemingly does not extend this position to protocols to existing treaties like AANZFTA. The Labor Government also will approach counterparty states to review past treaties. Until losing the general election in October 2023, New Zealand’s Labor Government from 2018 had similarly opposed ISDS in new treaties. However, the new Coalition Government may revert to a more flexible approach towards ISDS provisions.

As a compromise way forward for both countries, with significantly shared economic and geopolitical interests, I proposed in the AANZFTA parliamentary inquiry that in that FTA’s Work Program as well as the parallel RCEP (re)negotiations concerning ISDS, serious consideration be given to substituting an EU-style “permanent investment court” hybrid form of dispute resolution to underpin the substantive commitments (like non-discrimination and fair and equitable treatment) offered in such treaties. Unlike ISDS, the foreign investor complainant does not nominate an arbitrator. Instead, the investor’s home state and the host state counterparty select in advance a panel of “judges”, who are then selected to decide the claim (albeit following arbitration rules and issuing awards). The model also provides for a second-tier review, by other adjudicators selected from the panel, for any serious error of law or fact. Such features make this investment court model sufficiently different from ISDS, in my view, to not conflict with the anti-ISDS policy of the current Australia’s Labor Government or the previous New Zealand Labour Government. Yet it still allows for foreign investors to initiate a claim, without having to lobby its home state to press for initiation of an inter-state arbitration. The latter mechanism is also provided in investment treaties, but is rarely used where the more direct ISDS route is available and is much more subject to (geo-)political vagaries – as we observe also with WTO inter-state adjudication.

Further, this compromise investment court model was developed in the EU almost a decade ago after extensive consultation with legal experts and other stakeholders there, and it has since been accepted in FTAs notably concluded by Canada, Singapore and Vietnam.[3] The model is also promoted by the EU in ongoing UN deliberations on reforming ISDS multilaterally. It is in the EU’s negotiating mandate for the FTA being negotiated with Australia, and if it is not accepted then that FTA unfortunately will not include provisions on investment protection (only instead on preferential market access for agreed investments, underpinned solely by inter-state arbitration). That was also the outcome in the FTA between the EU and Japan, which preferred to retain instead ISDS-backed protections for its investors into many individual EU states under older treaties. The New Zealand-EU FTA similarly does not include any provisions on investment protection, yet New Zealand’s outbound investors lack such BITs with individual EU member states. New Zealand’s new Coalition Government might now consider adding a protocol on investment protection, agreeing after all with the EU’s court mechanism, to encourage more cross-border investment flows.

Greater consideration by both New Zealand and Australia to the investment court model would also be useful as each continues to negotiate FTAs with the other non-EU counterparties, including across Asia (such as the Australia-India negotiations to conclude a treaty going beyond trade in goods). It would also open up space for greater bipartisanship with each country and therefore speed up FTA negotiations.

In fact, in late 2017 I wrote to your respective predecessors as Trade Minister with Dr Amokura Kawharu (then a professor at University of Auckland, now President of the New Zealand Law Commission). Drawing on recent research (which I have updated[4]), we urged even then Australia and New Zealand to consider the EU-style investment court model and coordinate more in progressing investment treaty negotiations, including for RCEP.[5] That FTA could then have been more easily and quickly agreed upon, and indeed included India which in 2019 withdrew from negotiations. Closer joint consideration of the investment court model deserves renewed attention from both Australian and New Zealand governments, as they look to (re)negotiate various investment treaties, including still AANZFTA. The investment court model may not be perfect but nothing ever is, and it promises a better way forward than the current flip-flops in each country around traditional ISDS.

I would be happy to confer with you or relevant staff to discuss this further, or provide additional information.

Yours sincerely

Luke R Nottage


[1] Profile and CV at https://www.sydney.edu.au/law/about/our-people/academic-staff/luke-nottage.html. My father (Richard Nottage) was former Secretary of Foreign Affairs in New Zealand and my brother (Hunter) was later Senior Trade Law Advisor with MFAT.

[2] See transcript and Submission via https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Treaties/AANZFTASecondProtocol

[3] For details see eg Moritz Keller (ed) EU Investment Protection Law: Article-by-Article Commentary (Beck/Hart, 2023).

[4] See eg, on the evolving studies on the impact of ISDS provisions on cross-border FDI, my submission in 2020 to DFAT’s review of Australia’s bilateral investment treaties (available at https://www.dfat.gov.au/trade-and-investment/discussion-paper-review-australias-bilateral-investment-treaties), summarised eg in my chapter “Rebalancing Investment Treaties and Arbitration in the Asian Region”, in Mahdev Mohan and Chester Brown (eds) The Asian Turn in International Investment(Cambridge University Press, 2021) 379-398.

[5] Our 2017 letters can be found at https://japaneselaw.sydney.edu.au/wp-content/uploads/2017/11/2017KawharuNottageTurnbullGovt_Combined_LN01.pdf, via https://japaneselaw.sydney.edu.au/2017/11/nz-renounces-isds-deja-vu/

Australia’s Anti-ISDS Approach Again: AANZFTA Protocol Ratification Hearing in Parliament

On 21 August 2023 Australia signed, with New Zealand and the ten member states of the Association of Southeast Asian Nations (ASEAN), the Second Protocol to Amend the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), after announcing in November 2022 substantial conclusion of the free trade agreement (FTA) review that had commenced in September 2018. This amended treaty added new chapters and updated many others, whereas the first Protocol in 2015 focused on streamlining certification for cross-border movement of goods.

For example, as I noted in my written Submission in January 2024 to the Australian Parliament’s Joint Standing Committee on Treaties (JSCOT) inquiry into ratifying the Second Protocol, it added more provisions on consumer protection generally (in Article 7 of Chapter 17, but setting narrow minimum standards for national laws and not subject even to the inter-state dispute settlement Chapter that could help give those commitments more bite, compared to the Australia-UK FTA signed in 2021) and for e-commerce (Article 18 of Chapter 10, underpinned by inter-state dispute settlement – unlike the ASEAN+5 Regional Comprehensive Economic Partnership or RCEP signed in 2020).

However, my Submission and others focused mainly on the Second Protocol’s update to Chapter 11 on Investment. The substantive commitments (in Section A, Arts 1-18) were adjusted largely in line with RCEP’s Investment Chapter, but the main controversy concerned Section B’s retention of the investor-state dispute settlement (ISDS) option allowing arbitration as with the original AANZFTA (in forced from 2010). A week before the Second Protocol was substantially agreed, Australia’s Labor Government had declared on 14 November 2022 that it would not agree to ISDS protections for foreign investors in any future treaties, and would seek to review and remove them in past investment treaties. The New Zealand government had also announced in late 2017 that it would not agree to ISDS in future treaties, mimicking the stance of an earlier Labor (with Greens) Government when in power in Australia over 2011-2013.

Compromises were made when retaining ISDS in the Second Protocol’s Investment Chapter. The parties will first suspend application of the National Treatment commitment (not to discriminate against foreign investors compared to local investors, subject to scheduled country-specific exceptions) for breaches arising within 30 months of the upgrade. This is quite significant as the Second Protocol enlivens a previously inactive (Article 3) obligation for National Treatment. The second compromise is Article 17, providing for a work program to review Section B on ISDS no later than 18 months after the date of entry into force of the Second Protocol, to be concluded within 12 months unless extended by the states party – so probably by the end of 2027. (The program also requires discussion about adding two extra prohibitions of performance requirements in Article 6.1.) Given the Australian Labor Government’s opposition to ISDS, it can be expected to press for the removal or otherwise significant curtailing of Section B on ISDS. However, it faces a general election by May 2025, and if it loses to the Coalition the latter will reinstate a more flexible approach – agreeing to ISDS on a treaty-by-treaty assessment of Australia’s national interests. New Zealand’s Labor Government also lost the general election in October 2023, and its new Coalition Government is also likely to be quite sanguine about retaining ISDS.

In parallel, RCEP’s investment chapter had instead omitted ISDS but Article 10.18 established a work program to reconsider whether or not and how to add ISDS. This negotiation was to be started within two years of this ASEAN+5 treaty coming into force (January 2022 for ten states), to be concluded then within three years – so by the end of 2025. The largest non-ASEAN member states of RCEP with large outbound investments such as Japan, Korea and even China, may press for adding ISDS. However, their outbound investors mostly have anyway at least one other ISDS-backed treaty to invoke even without RCEP (eg Japan and Australia have the CPTPP, even though ISDS was omitted also from their 2014 bilateral FTA).

My Submission, and oral evidence given (with video-recording here) in favour of ratifying the Second Protocol (contrasting with the evidence and submissions opposing ratification from the Australian Council of Trade Unions and AFTINET), identified likely net benefits from ISDS-backed treaties including this one but also options for further drafting improvements, drawing partly on my submission to the 2020 DFAT review of Australia’s standalone bilateral investment treaties. I also urged ongoing transparency and stakeholder involvement in the envisaged work program.

We can expect most JSCOT members to recommend that Australia ratifies the Second Protocol. After all, JSCOT always has a majority of Government parliamentarians on the Committee, and its own minister has already signed the Protocol (after review by Cabinet colleagues). In addition, the Coalition parliamentarians in opposition have always maintained a flexible approach towards ISDS provisions. The solitary Australian Greens member, however, seems likely to recommend against ratification, as its parliamentarians have done on committees considering treaties that contain ISDS provisions. What will be more interesting is what the Labor members say about ISDS, including the evidence given, and what that might imply for Australia’s ongoing negotiations regarding investment agreements with India and the European Union.

Cross-Fertilisation in International Commercial Arbitration, Investor-State Arbitration and Mediation: The Good, the Bad and the Ugly?

[This is the title of the 6th Annual ADR Address for the Supreme Court of New South Wales, co-organised by the Australian Disputes Centre. It was orginally to be presented on 2 November 2023 but my e-bike accident meant deferring it until 22 February 2024! The public lecture includes several comparisons to developments in Japan and other Asian countries. Registration and other information regarding this lecture event, including the forthcoming paper, are available via https://disputescentre.com.au/events/supreme-court-of-new-south-wales-adr-address-2023/. The Introduction is reproduced below, a few more details are published on 12 February 2024 via the Kluwer Arbitration Blog, and my draft Powerpoints for the public Address are here. Past presenters and topics were:

2018 – Chief Justice Tom Bathurst –“ADR, ODR and AI-DR or, Do We Even Need Courts Anymore?”

2019 – Her Excellency the Hon. Margaret Beazely AO KC – “Conflicts of Interest in Commercial Arbitration”

2020 – The Hon. Justice Andrew Bell – “The Rise of the Anti-Arbitration Injunction”

2021 – The Hon. Justice Julie Ward – “Online Dispute Resolution in the Age Covid-19”

2022 – The Hon. Robert French AC – “ADR and the Elusive Butterfly of Social Justice”

I thank Chief Justice Bell and the Supreme Court of New South Wales for hosting this event, and Deborah Lockhart and her team at the Australian Disputes Centre for organising this Annual ADR Address. I particularly appreciate their flexibility in deferring the presentation date after my e-bike accident late last year, and for everyone’s attendance today instead. I acknowledge the Gadigal People of the Eora Nation as the traditional custodians of this land, along with their elders. I also acknowledge the elders from the judiciary who have presented the past five Annual Addresses, which I refer to in my paper soon available via the ADC webpage, and I am grateful for other information and feedback on earlier drafts from them and several others. As my paper is now too long to present verbatim, and Alternative Dispute Resolution is all about flexibility, I will mainly present this Address around these Powerpoint slides (also available in draft via my University of Sydney blog).

  1. Introduction

International arbitration (IA) has burgeoned especially since the 1990s, including across the Asian region (as elaborated below in Part 2). The growth originated in international commercial arbitration (ICA), but it has been bolstered especially over the last 10-15 years from mostly now treaty-based investor-state arbitration (ISA). However, as in the 1990s, concerns are again building about escalating delays and especially costs (Part 3). This is due not just to the growing complexity of transactions and therefore disputes. Other factors contributing to costs and delays arguably include IA still having no real competitors for cross-border dispute resolution, the growth of large law firms and the billable hours culture, conservatism about controlling legal costs (eg via caps on fees or sealed offers), the double-edged sword of confidentiality, and the proliferation of soft law instruments. 

There has been quite extensive discussion in case law and commentaries about the relationship between ICA and international litigation conducted through courts, as part of an overall system for resolving cross-border commercial disputes.[1] The present paper takes an even more encompassing view. It teases out some connections or influences among ICA, ISA, international and domestic mediation, which may be or become more or less productive, particularly from the perspective of reducing costs and delays.

Cross-fertilisation from mediation practice has not yet borne much fruit globally in the form of hybrid Arb-Med, where parties authorise arbitrators themselves to act as mediators (Part 4), in ISA and even in ICA. Instead, Med-Arb and other multi-tiered dispute resolution clauses (involving separate neutrals) are becoming more prevalent in cross-border transactions, aiming to reduce the costs and delays associated with proceeding to IA (Part 5). However, the spread has not been uniform across the world of ICA, and has not yet impacted much on investment treaties and therefore ISA. In addition, cross-fertilisation partly from ISA regarding the consequences of non-compliance with pre-arbitration steps in such clauses is causing complications, although it may lead to constructive solutions in ICA as well as ISA. Overall, various cross-overs are already evident among ICA, ISA and international mediation, and such cross-fertilisation needs to be tracked and channelled into the most productive interactions.


[1] See, eg, Michael Hwang, ‘Commercial Courts and International Arbitration—Competitors or Partners?’ (2015) 31(2) Arbitration International 193; James Allsop and Samuel Walpole, ‘International Commercial Dispute Resolution as a System’ in Sundaresh Menon and Anselmo Reyes (eds) Transnational Commercial Disputes in an Age of Anti-Globalism and Pandemic (Hart 2022) 43; Franco Ferrari and Friedrich Rosenfeld, ‘Deference in International Commercial Arbitration: Setting the Stage’ in Franco Ferrari and Friedrich Rosenfeld (eds), Deference in International Commercial Arbitration (Wolters Kluwer, 2023) 3.

“The Vis Moot in Japan: Tips and Tricks for Participants”

This hybrid-format 14 February 2024 seminar in Tokyo was planned primarily by the “Japan Arbitration Club” formed recently among younger arbitration experts and afficionados, led by Carlotta Bruessel (now with Nishimura & Asahi, Japan’s largest law firm, and previously working in Canberra and Sydney) who also moderated this seminar. My co-panellists included Eriko Kadota, now a managing associate in Tokyo with Linklaters (which co-sponsored the seminar and provided the venue) who competed successfully for ANJeL’s “Team Australia” in the intercollegiate negotiation and arbitration moot competition (INC) while a student at Sydney Law School. Other event supporters were the Australian Network for Japanese Law (ANJeL), the International Chamber of Commerce’s Young Arbitration and ADR Forum (ICC-YAAF, as this year’s Vis Moot applies the ICC Arbitration Rules) and the Moot Alumni Association for the Vis moot. The latter’s Japan members and others have started coordinating a “pre-moot” competition for Japanese university teams before they go to the main Vis Moot held in Vienna or the spin-off Vis East Moot held in Hong Kong.

The main focus of this seminar was to share experiences and ideas especially for Japanese students and coaches about what to expect in the Vis Moots. However, to that end I added some contrasts with the INC, which has also greatly enhanced interest and skills in arbitration among Japanese and other law students over the last two decades.

My first encounters with the Vis Moot dated back to the late 1990s, when I was joined as associate professor at Kyushu University Law Faculty by Hiroo Sono, who had already attended the Vis Moot and eventually became Dean of the Law School at Hokkaido University. (We also ended up co-authoring in 2019 a Kluwer book on Contract Law in Japan.) I took his prescient advice to attend the Sixth Vis Moot in Vienna as a mock arbitrator around Easter in 1999, as he had done in 1997. Then we ran a small courses for the Japanese-language LLM program and then new English-language LLM/LLD program in Kyushu University to coach a team that competed in the Seventh Vis Moot in Vienna in early 2000. Already there had been one Japanese team, from Meiji Gakuin University (competing in the Fifth and Sixth Vis Moots), but there was very little awareness of the competition around that time – or indeed about arbitration – in Japan. Writing articles in Japanese (in 1186 Jurisuto and 67 Hosei Kenkyu / Journal of Law and Politics, in 2000) with Professor Sono and in English (66 Hosei Kenkyu Part I and Part II in 1999) to promote more interest in the Vis Moot, I speculated that its growth already over the 1990s was linked partly to states starting to accede to the UN Sales Convention (CISG, agreed in 1980 and in force from 1988). It was even clearer that the numbers of teams per country were rising, generating critical mass and even by then creating scope for “pre-moots” before the main competition in Vienna – as seen from this Figure 1 reproduced Part II of my 1999 article in Hosei Kenkyu:

Japan acceded in 2008 (as explained in his JJL article here), thanks significantly to the efforts of Professor Sono who was seconded around then to the Ministry of Justice from Hokkaido University to promote understanding and engagement with CISG. This has made the UN Sales Convention directly relevant for Japanese traders and their legal advisors, who also need to assist Japanese subsidiaries and affiliates especially in Asian states that are also increasingly member states of CISG. Another contemporaneous development has been the comparatively belated but (especially since 2017) significantly greater interest in international arbitration among stakeholders in Japan (including now some very large local law firms, as well as branches of Western firms that were allowed full profit-sharing partnerships with Japanese bengoshi lawyers from 2004). This evolving context helps explain why by the 30th Vis Moot in Vienna held in 2023, there were four teams from Japanese universities (out of by then 380 teams in total): Doshisha, Kwansei Gakuin, Waseda and Seinan Gakuin. And for the 20th Vis East Moot in 2023, for example, Nagoya University reached the final eight teams.

These are impressive achievements for teams coming from a country where the native language is not English (the language of the Vis Moots), which helps Australian and other university teams; and not even a Western language, which helps continental European and other teams that have also been frequent and often very successful competitors as well. A further challenge for Japanese teams has been that traditionally the law schools from common law jurisdictions put more emphasis on mooting generally, to build up the oral advocacy skills needed for the court cases that drove the development of the common law. (Already in 1999 I was impressed by the enthusiasm and skills of a team from an Indian law schools, which are also now often top performers in both Vienna and Hong Kong moots.) However, more opportunities for mooting and oral argumentation have grown also within the civil law tradition countries, including Japan – perhaps linked to its postgraduate Law School program inaugurated from 2004, which (with some difficulties) has expanded the numbers and skills of bengoshi lawyers. This gradual transformation in Japanese legal education more generally is arguably also reflected in the growing popularity and skill levels associated with the INC moot held in Tokyo towards the end of each year since 2002.

However, the INC moot differs in several ways from the Vis Moot, so the latter creates extra challenges for Japanese university teams – most of which compete now in both competitions. First, INC has a division or track where (sub)teams compete in Japanese, not just in English, and indeed the aggregate score for each university is reduced if competing only in one of the two languages. More preparations – in research, writing memorandums and the crucial practice moots – can therefore be done in Japanese as a native language. Japanese university teams competing only in English in the Vis Moots therefore need to factor in extra time and confidence-building exercises, perhaps involving more English-speakers as team members and coaches.

Secondly, the INC applies the UNIDROIT Principles of International Commercial Coontracts (first issued in 2004). Although their provisions overlap with CISG considerably, as later and opt-in rules of law (that parties must actively adopt), the UNIDROIT Principles can be more ambitious in their scope. They include provisions, say on regulating contractual unfairness, or allowing for adjustment of contracts in the event of supervening hardship, that are mostly left out of CISG for the applicable national law. The UNIDROIT Principles additionally apply to more complex (services and other) contracts than the international sale of goods, allowing for more arguments emphasising good faith and cooperation among the contracting parties than under CISG. In addition, the UNIDROIT as a restatement of the lex mercatoria are still not accepted by courts in many jurisdictions as governing law even if agreed upon by the parties for their cross-border contracts, unless combined with an international arbitration clause. And because arbitration is mostly confidential, whereas court litigation is mostly public, this means there is now much more publically-available case law on CISG from national courts around the world (and therefore related commentary) than on the UNIDROIT Principles as applied by arbitral tribunals.

The result of these differences is that arguments on contract law applying CISG in the Vis Moot tend to be more neo-classical and based on formal reasoning centred on the parties’ agreement and language used. By contrast, the arguments applying the UNIDROIT Principles in the INC moot can be more open-textured, appealing to wider contextual (moral, economic and other) considerations, although over the last decade or so these arguments have also become more formalised.

Thirdly, the INC is a one-shot competition. Each university only argues once in the arbitration round (and indeed only for one side, as assigned randomly by the organisers), even if the university fields multiple sub-teams competing in parallel. By contrast, the Vis Moot envisages that the higher-scoring teams can progress through to Finals, over many days of mock arbitration hearings. This also makes that competition more amenable to detailed and therefore more formal-reasoning arguments by the teams.

Fourthly, the INC traditionally did not address arbitration law problems, whereas those are often at least as important in the Vis Moot as the contract law problems. Recently, the INC incorporate some arbitration law questions in that round, but a key difference remains that the second day of the INC competition is a mock commercial negotiation seeking to reach agreement on a complex international joint venture. The skills required for successful negotiation, such as asking open-ended questions to try to understand the other side’s underlying interests, are often quite different that the more adversarial advocacy skills expected in international arbitration. Developing the latter is another challenge for Japanese university teams, even if students or coaches have become familiar with the INC moot.

Overall, the Vis Moot is designed to run as a quite formalised procedure, and has become more so as the numbers of teams competing in that competition has continued to grow. (This is true even of the Vis Moot East event, which I attended also in its earlier years when it was still smaller and therefore more like the Vienna moot over the 1990s.) This reflects the fact that the Vis Moots (in Vienna and to a growing extent also in Hong Kong) are also now a premier competition for students, coaches and mock arbitrators to network in order to enhance opportunities to actually practice international arbitration. There has also been resurgent formalisation of international arbitration over the last 10-15 years, including burgeoning costs and delays. Accordingly, Japanese participants in the Vis Moots should not be surprised to find that competition to be more rule-bound and intense even compared to moots like the INC.

Lastly, I share with you some excellent practical tips especially on oral advocacy for the Vis Moot (but also useful for the INC moot), from my colleague Prof Chester Brown. He has been lead coach for the University of Sydney Law School team that has competed very successfully in Vienna for around the last 15 years:

  1. Present clear and simplified arguments
  2. Signpost them (eg “We have three points …[but due to time the main focus will be on … unless the tribunal has particular interest in …]”)
  3. If “respondent” on issues, respond to points made by claimants rather than reverting to written submissions
  4. identify for the tribunal where parties agree or disagree (eg on the legal test)
  5. use evidentiary record and precisely
  6. remember points given for teamwork (eg for keeping to time)
  7. remember one’s own timekeeping (eg if arbitrator questions a lot on an early issue, be ready to present on the second issue in say 1-2 not 6-7 minutes (& then ask for extra minute for both sides).

ANJeL “Team Australia” 2nd again in INC Negotiation & Arbitration Moot!

Congratulations to University of Sydney Law School LLB and JD students Michelle Chen Daniel Hu, Kim Nguyen and Sean Yalcinkaya. They combined with other students mostly from ANU to form “Team Australia”, which again came second in the INC negotiation  and arbitration competition held over 9-10 December 2023 in Japan (this time pipped by UTokyo, with KyotoU coming third).

Importantly and deservedly, Team Australia won the ANJeL-sponsored prize for best (marks in) Teamwork. That was particularly impressive as the students have to cooperate cross-institutionally, and focus on moot preparations over the tense exam period. The students were also able to have a special tour of the apex Supreme Court, helped by ANJeL’s longstanding support for judicial visitors from Japan.

Special thanks to the lead coach and ANU law lecturer, James C. Fisher (and in past years Profs Kent Anderson and Veronica L. Taylor, ANJeL Advisors) as well as CAPLUS affiliate Nobumichi Teramura and Inma Conde for practice arbitrations. We are also grateful for support from DFAT (New Colombo Plan scholarships), Dean Simon Bronitt, Mitsui Matsushima and many past Moot alumni – including Ben Hines  and Irene Ma (both in the 2022 Team that also came second) and Eriko Kadota (now with Linklaters in Tokyo). For more details about this and past Teams see here.

Arbitration and Sports Law (Baseball) Dispute Resolution in Australia and Japan

As part of the Japanaroo suite of events, ANJeL is delighted to coordinate at Sydney Law School the two free public seminars below, both including a strong comparative focus on Japan and Australia, and involving a former Chief Justice of Victoria. One on Thursday 21 September compares arbitration’s historical trajectory (hybrid-format seminar, including two ANJeL program convenors based abroad – register via https://law-events.sydney.edu.au/events/intarbitrationaujp). The second on Friday 22 September compares sports law and dispute resolution (generally and with baseball as a major case study; in-person only, chaired by another ANJeL convenor Micah Burch – register via https://law-events.sydney.edu.au/events/globalsports-767).

1. Comparative History of International Arbitration: Australia, Japan and Beyond

This hybrid-format webinar compares the historical trajectory of international arbitration law and practice in Australia and Japan in regional and global contexts. An aim is to explore the evolving images and contours of arbitration and scope for cross-border collaboration in promoting this popular but sometimes contested form of dispute resolution.

Speakers

Commentator: Prof Luke Nottage (University of Sydney)(Drawing on the concluding chapter in his 2021 book: https://japaneselaw.sydney.edu.au/2020/08/book-in-press-with-elgar/ and his Encyclopedia entry on ACICA (with Prof Richard Garnett) at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4431276 )

Thursday 21 September

Time: 4-5.30pm

Location: The University of Sydney, Common Room, Level 4, New Law Building (F10), Eastern Avenue, Camperdown

Cost: Free, but registration is essential. Please select your attendance type during registration.

CPD points: 1.5 points

This event is being held an online and in-person at Sydney Law School. Please indicate your viewing preference when registering.

This event is proudly co-presented by the Centre for Asian and Pacific Law, the Resolution Institute and the Australian Network for Japanese Law at the University of Sydney Law School.

2. 2nd Annual Global Sports Law Symposium: Dispute Resolution

In-person event

This symposium brings together luminary experts and practitioners in sports law to discuss dispute resolution in the world of sports (it follows on from ANJeL’s seminar on international arbitration). The symposium’s first panel will feature two giants of the Australian sports law world reflecting on their careers in jurisprudence and sports administration resolving disputes in the sports area. The second panel will be a case study focusing on dispute resolution in baseball with two experts on both Japanese and Australian baseball.

About the Speakers

A. Dispute Resolution in Sports: Expert Reflections

Professor Deborah Healey (University of New South Wales)

Deborah Healey is the Director of the Herbert Smith Freehills China International Business and Economic Law (CIBEL) Centre and the Editor of the Sports Law Journal. She has more than 30 years of experience serving on the boards of major sports governance organizations and serves on the National Sports Tribunal.

Professor the Hon Marilyn Warren AC KC (Monash University)

Marilyn Warren is a Vice Chancellor’s Professorial Fellow of Monash University and is the former Chief Justice of Victoria. She practices as a commercial arbitrator and teaches law as a Professor at Monash’s Law Faculty.

B. Dispute Resolution in Sports: Baseball Case Study

Mr. Mark Marino (CEO, Baseball NSW)

Mark Marino has been the CEO of Baseball NSW since 2014 and is an Executive Committee Member of the Australian Baseball Players Alumni Association. Mark played collegiate and professional baseball in the United States and was the CEO of the Sydney Blue Sox 2014-2018.

Dr. Matt Nichol (Lecturer, Central Queensland University, (Melbourne))

Matt Nichol is a lecturer and sports law academic at the School of Business and Law at Central Queensland University and a board member of Baseball Victoria. His research uses approaches to labour law and regulatory theory to understand the regulation of labour in professional team sports.

Moderator: Mr. Micah Burch, Senior Lecturer, Sydney Law School.

Hosts: Sydney Law School, Australian Network for Japanese Law, Australia New Zealand Sports Law Association

Date: Friday, 22 September 2023

Time: 4.00-5.30pm

Location: Common Room, Level 4, New Law Building (F10), The University of Sydney

Please follow directional signage on arrival.

CPD Points: 1.5

This event is proudly co-presented by The University of Sydney Law School, the Australian Network for Japanese Law and the Australia New Zealand Sports Law Association.

Vote of thanks for Chief Justice Bell’s launch of “Comparing Online Legal Education” (& Foreword by James Douglas KC)

[From book launch on 3 August 2023]

I am very grateful for NSW Chief Justice Andrew Bell [pictured, above on left] for taking time from his busy schedule to launch this book [video-recording here or via the Sydney Law School podcasts on Youtube]. Perhaps I should have asked instead for such a favour for my next volume just into press, on Corruption and Asian Investment Arbitration, given His Honour’s longstanding shared interest in cross-border dispute resolution. But the Chief Justice also was a valued lecturer for Sydney Law School over many years, and I was struck by the remarks made about online legal education in another book launch following the annual Winterton lecture in the Banco Court a few months ago. Thank you very much for sharing some further ideas and kind words, reminding us of the history of technological developments in the research and teaching of law over our lifetimes, in the context of this volume.

I also acknowledge the Foreword [reproduced below] kindly contributed by former Queensland Supreme Court Justice James Douglas, here today [pictured, 2nd from right] and a longstanding elected member of the International Academy of Comparative Law. I also appreciate that Academy and then Secretary-General Prof Diego Fernández Arroyo for inviting me in early 2020 to become the General Reporter comparing developments world-wide related to online legal education. That became of course a very hot topic due to the COVID-19 pandemic, which unfortunately meant not all nominated national reporters ended up producing chapters for this book. But I think it nonetheless achieved a fairly representative mix of jurisdictions to draw wider comparative conclusions – jurisdictions from common law, civil law and mixed traditions, more or less democratic states, large and small states, developed and developing economies.

I thank all the contributors to this book, especially my co-editor Seijo University Prof Makoto Ibusuki, ANJeL-in-Japan program convenor and frequent visitor to Australia (and many parts of the world). I particularly valued some early zoom discussions over 2020, comparing different challenges and reactions in Australia and Japan. We and this book also benefited from an excellent chapter co-authored by ANJeL Advisor and Newcastle DVC, Prof Kent Anderson here tonight, comparing different “gatekeepers” across jurisdictions that regulate entry to the legal profession: lawyers, governments, universities and the market. The book’s summary general report plus the jurisdictional reports consider how each model, along with other factors such as ICT infrastructure and funding for universities as well as the extent of COVID-19 impact, can influence the trajectories of in-person and then online legal education.

I thank also Rebecca Moffat and the very professional team at Intersentia, which has become the publisher for the book series from the Academy’s four-yearly major comparative law congresses. (I only hope they bring down the price for the e-book version.) I am especially grateful to Intersentia and the Academy for adapting for the book cover an abstract artwork provided by my daughter Erica Kobayashi Nottage of Enso Circulation, finishing off at the National Art School this year, and for the rest of my immediate family for joining us for the book launch.

For hosting tonight, I thank Dean Simon Bronitt [pictured in photo above, right] and Sydney Law School (including its Centre for Asian and Pacific Law, the cross-institutional Australian Network for Japanese Law, and Carla and Ashleigh from our terrific Events Team). Further editorial and research assistance for the book was kindly provided through the University of Wollongong’s Transnational Law and Policy Centre, where I enjoy an honorary affiliation. I am also glad for the support of Assoc Prof Markus Wagner, leading that Centre, and his Dean Trish Mundy kindly co-authored an insightful chapter on online legal education in Australia.

Thank you again for the insightful remarks on launching this book, Chief Justice, and for all my colleagues, family, friends and others who attended to support this event.

***

Book’s Foreword, by the Hon James Douglas KC:

A long time ago I experienced the mixed joys of both undergraduate and postgraduate law lectures and tutorials delivered directly in the classroom among fellow students. In my final undergraduate year in 1973, however, I studied part-time entirely remotely by reading lecture notes with references to the relevant texts and cases. Luckily, I had access to an excellent law library and was the associate of a judge in a final appellate court where there were other such judges with associates who were recent graduates. I could bounce ideas off them and learn from the cases argued before the court. I hate to think what that experience of remote learning would have been like had I not had that environment around me. I admire greatly those lawyers who have successfully educated themselves solely through distance or online education. 

I recognise the advantages that modern technology can provide to remote learning not only through video-conferencing of lectures and tutorials but by direct access to relevant primary materials online. That early experience, however, has biased me in favour of live teaching in a class full of students actually present. As the authors recognise in their introduction, even interactive video-conferencing makes it more difficult for remote students ‘to engage in classroom discussions … where picking up on nuances can be harder than in physical interactions, even for native speakers’. Common experience of video-conferencing outside the academic environment backs up those conclusions. 

There is so much to be learned also in informal discussion with lecturers and other students and from an environment where the social interaction and physical facilities are focused on what you are studying. As the authors say about the experience of online education in Macao, ‘law is rooted in human interactions, benefiting not only from direct student–teacher contact but also from student learning among peers, through classroom teaching but also other personal contacts on campus’. This personal contact is recognised as a continuing advantage particularly in aspects of courses where students need to learn practical or ‘soft’ skills.

The period leading up to the International Academy of Comparative Law’s 2022 Congress in Paraguay coincided with the spread of the COVID-19 virus and the curtailment of normal legal education in very many jurisdictions. So the decision to examine the topic of online legal education at the Congress proved to be very ‘timely’, as Professors Nottage and Ibusuki say in their General Report. Suddenly online legal education had become frighteningly necessary and common. It can also provide access to courses otherwise practically too expensive or unavailable to less privileged students. What, therefore, may be the consequences of greater use of online legal education for the future of the profession and the teaching of law around the world?

This useful volume examines those issues relevant to online legal education in 13 jurisdictions representative of the major common law and civilian traditions as well as some hybrid jurisdictions. It makes some tentative predictions for the future of such education. The examples also carry the advantage of having been drawn from countries with widely varying economies, unequal access to technology for online teaching and differing traditions in the teaching of law. 

The authors link legal education to the legal profession and main legal traditions of each jurisdiction covered, and include pre- and post-admission education for law graduates. The focus is mostly on university-level legal education but practical professional training in some jurisdictions is also addressed. Online education for such practical training can be more effective than may be the case for young undergraduates. It is also notable that the topic shows the typical tensions between continuity and change often found in comparative studies. 

Some of the main general conclusions reached are that developments in online legal education in the 13 jurisdictions examined should be influenced by the nature of the jurisdiction’s legal tradition and legal profession, its level of public funding for universities, its level of economic development, including its infrastructure for information and communications technology, and the particular impact of the COVID-19 pandemic. The work as a whole will be especially useful for those considering how to deploy online legal education in a particular jurisdiction, using that analysis, with a view to setting up a properly nuanced regime for that style of education for that jurisdiction. 

Those charged with these significant responsibilities in jurisdictions and universities around the world will derive great benefit from studying the insights contained in this volume. 

Japanese Imperial Decoration for former NSW Chief Justice Bathurst

ANJeL is delighted to join in congratulating its member and longstanding supporter the Hon Tom Bathurst AC KC, former Chief Justice of New South Wales and now King’s Counsel with 6 Selbourne Wentworth Chambers, for being awarded recently this year a very high Honour from the Emperor on the advice of the Japanese Government. Very few jurists have been accorded this Honour, but among them are French law reform advisor and professor Gustave Emile Boissonade (1825–1910) and former High Court of Australia justice the Hon Michael Kirby AC CMG (awarded in 2017).

Photos from the conferment ceremony, attended also by the immediate past President (now NSW governor) and current President of the NSW Court of Appeal as well as ANJeL visiting Judge Kohei Sasaki and others, can be found here along with the Consulate-General’s further explanation:

“On 29 April, Mr Tom Bathurst was announced as a recipient of The Order of the Rising Sun, Gold and Silver Star, in the 2023 Spring Imperial Decorations, in recognition of his contribution to strengthening ties between Japan and Australia and the promotion of mutual understanding in the judicial field.

On 6 July, at his official residence, Consul-General Tokuda presented the Order of the Rising Sun, Gold and Silver Star to Mr Bathurst, former Chief Justice of the Supreme Court of New South Wales and former Chair of the Judicial Section of the Law Association for Asia and the Pacific (LAWASIA). During the ceremony, a video message from Japan’s Chief Justice TOKURA Saburo was played to Mr Bathurst and assembled guests.”

ANJeL is also very grateful for support over the last two decades from the current NSW Chief Justice, the Hon Andrew Bell (launching on 3 August Luke Nottage’s book co-edited with Prof Makoto Ibusuki, comparing online legal education) and Mr Bathurst’s predecessor, the Hon J J Spigelman who first collaborated with ANJeL in its formal judicial exchange program with the Supreme Court of Japan. ANJeL also thanks Mr Shuichi Tokuda and his predecessors as Consul-General of Japan in Sydney, who have assisted with this program and other ANJeL activities while serving on its Advisory Board.

Comparing “Consumer Law in New Zealand”

[This is a draft of a Review Essay of a new edition textbook, comparing mainly developments in Australia. The Trans-Tasman developments in consumer law can be usefully compared to those in Asia including Japan, which Prof Souichirou Kozuka and I recently compared with Australia.]

Kate Tokeley and Victoria Stace (eds) Consumer Law in New Zealand

(3rd ed 2022, LexisNexis NZ Ltd, Wellington) lxxii + 769pp

This rich and authoritative textbook deserves a wide readership among researchers, practitioners and policy-makers also beyond New Zealand, especially in Australia – but potentially too across Asia, for example, where consumer law is similarly developing apace.[1] This review essay gives a taste of the book’s scope and points of comparative interest, particularly from a trans-Tasman perspective.[2] Overall, it highlights how New Zealand’s consumer law has long been influenced by Australia and sometimes in turn impacted the latter, but has arguably provided less protection, although NZ has introduced some similar reforms in recent years. Various reasons for this disparity are proposed briefly by way of conclusion below, but this textbook provides an excellent basis to explore that theoretical question as well as for readers seeking more specific practical analysis of consumer law in NZ.

The pioneering first edition of this textbook (2000, Butterworths) was written by Kate Tokeley of Victoria University of Wellington (VUW), who then authored parts and edited the lengthier second edition (2014, LexisNexis, 543pp) with seven other consumer law experts. For this even more detailed third edition, she was joined as co-editor by Victoria Stace (also now at VUW) and three contributors to the previous edition as well as three new authors.

This book is divided neatly into seven parts: (1) introduction and general themes (comprising Tokeley’s chapters 1 and 2 on consumer law history and, very interestingly, rationales); (2) defective goods and services (Tokeley’s chapter 3 on pre-sale product safety rules and chapters 4-6 on the coverage, rights and remedies under the Consumer Guarantees Act 1993 or CGA); (3) consumer education (chapters 7-9 by Canterbury University’s Debra Wilson, expert on the Fair Trading Act 1986 [FTA] and some more specific enactment regulating advertising and labelling); (4) unfairness and unconscionability (chapters 10-12 respectively on unfair terms by Alex Sims from the University of Auckland, unconscionable conduct in trade by Stace, and unfairness in particular selling methods by Wilson); (5) financial consumer protection (chapters 13-14 by Stace providing an overview and then focusing on the retail investment market, chapters 15-16 by Barry Allan on consumer credit); (6) consumers and technology (chapter 17 on contract formation and chapter 18 on data collection, privacy and consumer manipulation by Colin Gavaghan and Simon Connell, being much expanded of course compared to the second edition); and (7) dispute resolution (chapter 19 generally on “access to justice for consumers” by Bridgette Toy-Cronin, and Sims’ chapter 20 detailing the “industry-specific dispute resolution schemes”).

Defective Good and Services

On pre-sale product safety rules, hearkening back to her chapter 2 on consumer law rationales, Tokeley begins by highlighting that these rules “are paternalistic in nature in that they limit consumers’ freedom to choose what are deemed to be unsafe products”, although there are “strong arguments that overall consumer welfare is improved if we are protected from products that pose a real danger of causing injury or death” (p51). She notes that the OECD has called for a general consumer right to safe products, yet New Zealand’s FTA only sets six mandatory product safety standards for general consumer (mostly children’s) products, compared to over 40 under the Australian Consumer Law (ACL, p53).

Tokeley asks whether New Zealand should add a general safety provision (GSP) requiring all consumer products to be safe before being put on the market, especially as no claims for personal injury caused by unsafe products can be brought (since the introduction of a state-run no-fault compensation scheme in the early 1970s). She notes that this requirement has operated in the EU for over 20 years (in fact, since a 1992 Directive) and similarly enacted in Canada in 2010 and (in fact, not as extensively) in Singapore in 2011. We could add that a GSP also applies in former colonies Hong Kong and Macau, Malaysia and (since 2019) Thailand, and enactment in Australia has been long discussed including through a (stalled) Regulatory Impact Statement consultation in 2019.[3]

Tokeley observes that determining whether a GSP would be a good idea in New Zealand “would require a debate about how to balance safety interests against consumer freedom of choice and increases in enforcement and monitoring costs” (p54). Such a debate would seem timely, given extensive arguments and evidence now from comparable economies, and the very high value that the government in New Zealand (and to a lesser extent Australia) was prepared to put on saving lives during the COVID-19 pandemic. Introducing a GSP would also seems more advantageous in New Zealand as there have only been three “product safety policy statements” issued seeking voluntary compliance by suppliers, since 2013 amendments to the FTA (ss 30A and 30B, p56). Furthermore, a duty on suppliers to notify voluntary recalls was only added in 2013 (long after Australia), but New Zealand still lacks a duty to report serious product related accidents (added in the ACL since 2010) and other risks (as in the EU and Canada, for example).

This textbook’s discussion of the 1993 CGA is also very useful for Australian consumer law experts. The ACL in 2010 largely slotted in the CGA regime (including especially its set of statutory remedies for the supply of defective goods or services) in lieu of the mandatory statutory warranties introduced by the ACL’s predecessor Trade Practices Act (Cth) 1974. The CGA was also influenced by some Canadian legislation, and it is also largely adopted by Malaysia’s Consumer Protection Act 1999. Tokeley’s discussion of New Zealand (and some Canadian) case law and academic commentary is therefore very relevant for Australian experts. Interestingly, for example, a District Court in New Zealand had ruled already in Cooper v Ashley & Johnson Motors Ltd [1997] DCR 170 that accumulated minor defects can add up to a substantial (or major) failure, justifying extra CGA remedies such as a refund rather than merely repair or replacement. Tokeley also notes a similar approach taken by some Saskatchewan courts (pp 145-6). We could add that this wheel had to be reinvented by tribunals and lawmakers in Australia, but the ACL was recently amended to clarify this possibility (s260), partly given the persistent problem of “lemon” vehicles in Australia.[4]

Also interesting from a Trans-Tasman perspective is the narrower scope of application of the CGA. It only applies to “consumers” as defined in s2(1) as those (a) acquiring goods and services (objectively) of a kind “ordinarily acquired for personal, domestic, or household use or consumption”, plus (b) not for the (subjective) purpose of resupply in trade or consuming them for production etc. The ACL (s3) tries to add certainty to the first limb (a) by extending the scope of “consumer” guarantee coverage to all purchases under a monetary threshold (recently increased to A$100,000), albeit still subject to the second limb (b) exclusions. This means that more business-to-business (B2B) transactions are probably covered by the mandatory guarantees in Australia.

New Zealand also allows more contracting out than in Australia, in that CGA s43 (modified in 2013 in line with an FTA insertion) allows parties both in trade to agree in writing to exclude the mandatory “consumer” guarantees provided this is “fair and reasonable” (as elaborated in a new s43(2A), p94). By contrast, the ACL only allows parties to agree on terms specifying more limited liability (excluding consequential damages etc.) if the goods or services are not ordinarily for personal use (s64A).

New Zealand may also allow more scope for parties, especially perhaps in B2B transactions, to exclude the application of the CGA regime altogether by expressly agreeing on a foreign law to govern all disputes related to their contract. Tokeley notes that under traditional private international law principles, the threshold for overriding the parties’ express choice of law based on a “public policy exception is exceptionally high” (p104). She adds that the CGA does not contain any express provision dealing with this issue that could be construed as an overriding mandatory statutory provision preventing parties from choosing a foreign governing law, contrasting ACL s67 as interpreted (perhaps in a rather strained way) in Valve Corporation v ACCC [2017] FCAFC 224. However, Tokeley indicates that New Zealand courts might not apply either traditional private international law approach to determine this possibility of parties choosing a foreign law. They might instead adopt an “ordinary statutory interpretation approach” – divining what the legislator intended from its text and purpose – as applied in the cross-border employment dispute of Brown v New Zealand Basing Ltd [2017] NZSC 139, even though the outcome of such an approach “applied to the [CGA] is difficult to predict” (p106).

In my view, her subsequent brief analysis suggests that it might result in consumers in a narrower (EU-style) sense, namely individuals contracting for non-business purposes, but not necessarily businesses being protected against at least some foreign governing law clauses. After all, earlier Tokeley notes that a new s1A added in 2013 to the CGA (again, mirroring that added to the FTA) clarifies that the legislative purpose is “consumer protection but that this is also balanced against businesses being able to compete effectively and participate int the market with confidence” (p69). This unresolved issue certainly deserves public consultation by policy-makers, both in New Zealand and Australia, especially as an agreed foreign law clause can be combined with a clause providing for exclusive jurisdiction of a foreign court or arbitral tribunal[5] – although Sims later remarks that the latter type of clause may be void as unfair (p315).

Misleading and Unconscionable Conduct

Chapter 8, where Wilson sets out the “general rules on misleading and deceptive conduct and misrepresentations”, is also interesting because the FTA statutory prohibitions and then New Zealand case law were heavily influenced by Australian law. However, it seems that the Supreme Court in Red Eagle Corp Ltd v Ellis [2010] NZSC 20 has developed a simpler one-step approach to determining misleading conduct in at least some situations (pp192-3). More unusual for Australian consumer law experts will be the helpful discussion of the Contract and Commercial Law Act 2017. That subsumed the Contractual Remedies Act 1979, which had adjusted common law rules on misrepresentations and termination of contracts. Again, the 2017 legislation retained the capacity for parties to agree on “ouster” clauses preventing investigation into whether pre-contractual statements were made or relied on, for example, but provided these were “fair and reasonable” (e.g. between commercial parties of equal bargaining power advised by lawyers, pp 241-3).

Chapter 11 by Stace contains even more extensive (and well-argued) analysis of the complex and evolving Australian case law on statutory “unconscionable conduct in trade”, which is informed but not limited by equitable doctrines (pp 349-70).[6] This is justified because New Zealand only added such a prohibition to its FTA (s7) with effect from 16 August 2022. Stace explains how the New Zealand Commerce Commission (enforcing the FTA) favoured adopting the ACL’s approach, which had developed legislatively since 1986 and especially 1992, when in 2018 a consultation paper was released by New Zealand’s Ministry of Business Innovation and Enterprise (MBIE, which had subsumed the Ministry of Consumer Affairs). To address survey and other evidence about gaps in the legislative framework and poor practices by businesses, towards consumers but also other businesses, MBIE had instead favoured the option of enacting a prohibition against “oppressive” conduct (centred on the  “reasonable standard of commercial practice” test) modelled on consumer credit contract law. Neither government entity favoured the option of prohibiting unfair practices along EU Directive lines, with MBIE assessing this option as “the most complex and uncertain” (p336) although it has long been operating in the EU, United Kingdom and for example Singapore.

However, Stace later notes (p370) that in the wake of the ACCC’s Digital Practices Inquiry Final Report (June 2019), for example: “There is some regulatory support for the introduction of a more general prohibition on unfair conduct in trade in Australia. It is likely that the New Zealand government would have to consider something similar in New Zealand, if such a prohibition were introduced in Australia, in the interests of harmonisation of business law between the two countries” (p370). Since the book was published, pressure towards adding this wider prohibition has kept growing in Australia.[7] This is partially caused by growing awareness and concern, especially given the expansion of e-commerce particularly during the pandemic, about the use of “dark patterns” to manipulate consumer behaviour (helpfully summarised by Gavaghan and Connell at pp641-9) through business systems that are not readily impugned as misleading or unconscionable.

Unfair Contract Terms

Australian experts will also find familiar and useful the discussion by Sims of “unfair contract terms” regulation in chapter 10, as this too was added to the FTA in 2013 (with effect from 2015) “modelled on Australia’s law, albeit there are significant differences” (p288). The most important distinction in the ACL regime applied nationwide since 2010, based on Victorian state legislation enacted a decade earlier based on a 1993 EU Directive (and supplemented by the Contracts (Review) Act 1980 still curiously in effect in New South Wales), is that unfair terms in Australia can be asserted by consumers as void.

By contrast, New Zealand’s regime since 2015 requires the Commerce Commission to bring proceedings for Court declarations that the term is void. A concern underlying this narrow standing requirement, not found either across Europe or many other jurisdictions enacting similar unfair contract terms rules for consumers, was reportedly that allowing consumers directly to challenge unfair terms (as urged in 2010 by the then Ministry of Consumer Affairs) would mean more transaction costs for traders (p289). Sims notes that her prediction in the second edition textbook, that the limited standing and resources for the Commerce Commission would mean few declarations being sought, has been borne out: only three applications had been made when she wrote for this third edition (December 2021), despite significant evidence that unfair terms are widespread (p290). Unsurprisingly, therefore, too, the chapter by Sims includes many more references to Australian case law on unfair terms than the few New Zealand court judgments.

A second significant Trans-Tasman difference is the scope of the main regime voiding unfair terms. Under the ACL, it applies to individual consumers transacting for non-business purposes (s23). In New Zealand, this is similar for dealings in land. However, for goods and services its unfair terms regime adopts the same definition as for the CGA as mentioned above (ordinarily for personal use etc., but not for resupply etc.: p293). In addition, the ACL added protections for “small business contracts” already in 2016, defined by setting a maximum contract amount plus number of employees. ACL amendments in November 2022 (in force from a year later) remove the contract amount threshold, and extend protection if at least one party employs fewer than 100 (rather than 20) employees. By contrast, the FTA was amended with effect again only from 22 August 2022 and protects against unfairness in “small trade contracts” defined solely by reference to a maximum contract amount (p288).

A third difference, not evident from this textbook because it was published after the ACL November 2022 amendments, is that an initial use of a term found unfair will attract civil penalties. Under the prior scheme (still found in New Zealand), penalties only applied for continuing to use a term declared unfair by a court.[8] (Australian penalties are also significantly higher than for contravention of the consumer protection provisions in New Zealand’s FTA and CGA, as noted already in some other parts of this book.) The November 2022 ACL amendments also clarify that Australian courts can make orders applying to any existing contract entered into by a respondent containing a substantially similar term to one the court has declared to be unfair, and/or which prevents a term from being included in future contracts. This too could be a useful way to make the New Zealand regime more effective. Its present FTA only provides that once the court declares the term void (if challenged by the Commerce Commission), this “automatically extends to the trader’s contracts with other consumers. The trader would therefore be unable to enforce that term against other customers who had entered into the same standard form contract” (p304).

It should also now be added that from November 2021 the federal Treasury began consulting about allowing ACL regulators also to impose civil penalties on suppliers that do not provide consumers remedies for at least major failures under the consumer guarantees regime, perhaps only for goods or services that are causing more problems (such as lemon vehicles).[9] The proposal parallels a recommendation from the Productivity Commission’s Right to Repair report, made public on 1 December 2021.[10] Such a reform would supplement the ACL regulators’ powers to bring representative actions for violations of consumer guarantees if consumers opt-in, which the regulators however have been curiously loath to use. New Zealand regulators lack even the latter power (cf p697), and policy-makers in that country could consider whether the Treasury’s more recent initiative would significantly reduce problems uncovered by evidence cited in this textbook regarding unfair terms and practices more generally.

Access to Justice for Consumers

In New Zealand, therefore, prospects for “public enforcement” of consumer rights have been more restricted than in Australia. More reliance therefore must be placed on New Zealand consumers knowing about and then enforcing their rights themselves. Yet Toy-Cronin remarks in chapter 19 that a “2020 survey found that almost all consumers were aware that laws exist in New Zealand to protect their consumer rights, but detailed knowledge of those rights was less widespread … only 26 per cent of consumers answered at least six of the ten scenarios about consumer problems correctly” (p672). Incidentally, such more specific questions would be useful to pose to Australian consumers, in multiple national surveys and recently one just for Victorian consumers.[11]

Her chapter on “access to justice for consumers” shows that there is significantly less available first through the courts, in that there is still no US-style opt-out class action regime to efficiently aggregate small claims (as in Australian federal courts since 1992, and various states starting with Victoria from 2000). However, Toy-Cronin notes that the New Zealand Law Commission was investigating this possibility (pp 690-1). We can add now that in June 2022 it issued a Final Report recommending enactment of a scheme quite similar to Australia’s class action regime, as well as recommendations about third-party litigation funding, which has become a major part of Australia’s civil litigation landscape since 2007. She also notes that New Zealand lacks a regime for pure contingency fees, where lawyers agree with clients to fund litigation themselves in exchange for a percentage of damages obtained (pp687-9). Plaintiff lawyers and some other groups pressed strongly to allow this in Victoria, with reforms in effect from 1 July 2020 for class actions.[12]

As for what Toy-Cronin’s chapter 19 outlines as “self-help” options for consumer access to justice, some of the concerns about disputes tribunals seem similar to those raised for Australian counterparts. These include some formalisation of proceedings, challenges in enforcing tribunal rulings, and concerns about whether “the current balance is right” between procedural fairness and expeditious dispute resolution given that the same adjudicator also has a preliminary role in encouraging settlement (p679). She adds that a 2008 response by the Government to a Law Commission inquiry into Disputes and other tribunals, aiming to reduce ad hoc elements and duplication of resources through a more uniform regime, has not progressed (p683). This contrasts with reforms combining administrative and consumer tribunals in Victoria and New South Wales, for example, which seem to have been fairly successful.[13] There also seem to be fewer developments to expand online dispute resolution (p675), compared to Australia where the Digital Platforms inquiry has kept this more firmly on the agenda.[14] Another development that New Zealand might consider copying is a UK-style “super complaints” procedure, expected to be enacted this year, whereby peak consumer groups can provide evidence of widespread harm, to regulators who then need to respond publically within a specific timeframe.[15]

Conclusions

In sum, this is an excellent textbook detailing all elements of consumer law in New Zealand, deftly combining legislative analysis, case law, illuminating further examples, academic commentaries and recent developments, which should be on the shelves or computers of all Australian consumer law experts. The many comparisons made with Australia, and some of the additional ones added in this review of the book, also leaves a wider question. Why is it that the protection for consumers seems nonetheless to remain less extensive in New Zealand, despite a long history of Trans-Tasman business law harmonisation and other close legal cooperation?[16] The evidence presented in this textbook suggests that the answer is not that New Zealand traders are much better behaved than Australian counterparts.

One possible explanation from political history is that the Labour Governments in New Zealand (1984-1990) pursued a more extensive deregulatory agenda than the Hawke/Keating Labor Governments in Australia, and this more laissez-faire mentality perhaps carried over into subsequent Governments (largely equally split between Labour and National Governments). New Zealand has also not seen the same phenomenon of small and even large businesses pressing ministers in Australia to add protections for ever more B2B transactions, not just protections for consumers in the narrower (EU-style) sense. Federal and state ministers have often been open to such entreaties, for better or worse, perhaps because many smaller businesses are sole traders who also therefore vote in elections.

A more socio-economic factor could be that although New Zealand has a higher proportion of indigenous and Pacific Island background consumers, Australia has long had a higher intake per capita of humanitarian and other immigrants.[17] Those have included many whose native language is not English and can therefore be seen as in further need of consumer law protections. A more institutional explanation might be that Australian consumer law regulators have developed more critical mass, not only for enforcing laws but advocating for further reforms, benefitting also from multiple reports from the influential Productivity Commission (with an analogue operating in New Zealand only since 2011). A political economy aspect may be that Australia’s federal system has generated more of a “California effect” (or “trading up” to stronger regulator standards),[18] rather than a deregulatory “Delaware effect”. Another possible explanation from comparative legal history or philosophy is that New Zealand contract law and supporting legal institutions have favoured more formal rather than substantive reasoning, at least traditionally.[19]

Such broader speculations, and therefore prospects for further convergence or divergence between New Zealand and Australia, merit further investigation. For such theoretical as well as practical purposes, by offering a comprehensive and deep understanding of New Zealand consumer law, this textbook provides an excellent basis to assess similarities and differences compared to Australia, and potentially other jurisdictions particularly around the Asia-Pacific region.


[1] See generally eg Nottage, Luke R. and Paterson, Jeannie Marie, Consumer Contracts and Product Safety Law in Southeast Asia: Partly Trading Up? (June 25, 2019). in Hsieh, Pasha L.; Mercurio, Bryan (eds), “ASEAN Law in the New Regional Economic Order: Global Trends and Shifting Paradigms”, Cambridge University Press, 2019, Sydney Law School Research Paper No. #19/37, Available at SSRN: https://ssrn.com/abstract=3409602; and Howells et al (eds) Consumer Protection in Asia (Hart, 2022) https://www.bloomsbury.com/au/consumer-protection-in-asia-9781509957545/

[2] For some earlier comparisons, see also Nottage, Luke R. and Riefa, Christine and Tokeley, Kate, Comparative Consumer Law Reform and Economic Integration (2013). CONSUMER LAW AND POLICY IN AUSTRALIA AND NEW ZEALAND, J. Malbon and L. Nottage, eds, Federation Press, Australia, 2013, Sydney Law School Research Paper No. 15/77, Victoria University of Wellington Legal Research Paper No. 15/2016, Available at SSRN: https://ssrn.com/abstract=2662295

[3] Nottage, Luke R., Improving the Effectiveness of the Consumer Product Safety System: Australian Law Reform in Asia-Pacific Context (February 3, 2020). Journal of Consumer Policy (2020) 43:829-850, also at https://ssrn.com/abstract=3530671

[4] For an analysis of divergent Australian tribunal decisions, arguably influencing the ACL amendment, see Jeannie Paterson “The Consumer Guarantee Remedial Regime: Some Uncertainties and the Role of Common Law Analogy” 33 Journal of Contract Law (2006) 210 at 221-3.

[5] Compare also generally Garnett, Richard, “Arbitration of Cross-Border Consumer Transactions in Australia: A Way Forward?” (2017) 39(4) Sydney Law Review 569, also at http://classic.austlii.edu.au/au/journals/SydLawRw/2017/23.html; Teramura, Nobumichi and Nottage, Luke R. and Morrison, James, International Commercial Arbitration in Australia: Judicial Control over Arbitral Awards, in “The Cambridge Handbook of Judicial Control of Arbitral Awards”, edited by Larry A. DiMatteo, Marta Infantino and Nathalie M-P Potin, Cambridge University Press, 2020, pp. 175 – 197, also at https://ssrn.com/abstract=3379494

[6] For an early comparison of unconscionability and other doctrines, including undue influence (touched on at pp647-8 in this textbook’s discussion of “dark patterns”), see also Nottage, Luke R., Form and Substance in US, English, New Zealand and Japanese Law: A Framework for Better Comparisons of Developments in the Law of Unfair Contracts. Victoria University of Wellington Law Review, Vol. 26, pp. 247-292, 1996, also at https://ssrn.com/abstract=842684

[7] See Nottage, Luke R. and Kozuka, Souichirou, Consumer Law Redress and Administration, Product Safety Regulation and Contracts in Japan and Australia (May 26, 2023), manuscript at https://ssrn.com/abstract=4459890

[8] For an assessment of this reform, combined with the expansion of protections to more B2B transactions, see Jeannie Paterson and Hal Bolitho, “Unfair terms and legitimate business interests in standard form small business contracts” (2023) 30 CCLJ 19.

[9] https://treasury.gov.au/consultation/c2021-224294

[10] https://www.pc.gov.au/inquiries/completed/repair#report

[11] See https://consumer.gov.au/consultations-and-reviews/australian-consumer-survey and https://cprc.org.au/vic-consumers/

[12] See eg https://www.ibanet.org/contingency-fee-revolution-in-australia.

[13] Compare eg Nottage, Luke R., Consumer ADR and the Proposed ‘Consumer Law’ in Australia: Room for Improvement (March 29, 2009). QUT Law and Justice Journal, Vol. 9, No. 2, February 2010, pp 176-97, Sydney Law School Research Paper No. 09/10, Available at SSRN: https://ssrn.com/abstract=1370106; and Productivity Commission, Consumer Law Enforcement and Administration – Final Report (12 April 2017) https://www.pc.gov.au/inquiries/completed/consumer-law.

[14] See eg the ACCC’s Interim Report (September 2022) https://www.accc.gov.au/about-us/publications/serial-publications/digital-platform-services-inquiry-2020-2025/digital-platform-services-inquiry-september-2022-interim-report-regulatory-reform

[15] Nottage and Kozuka, op cit (with further references).

[16] See generally Nottage, Luke R., Asia-Pacific Regional Architecture and Consumer Product Safety Regulation for a Post-FTA Era, in Meredith Kolsky Lewis and Susy Frankel (eds) Trade Agreements at the Crossroads(London: Routledge, 2014) 114-38, earlier version also at https://ssrn.com/abstract=1509810

[17] See eg https://theconversation.com/new-zealand-has-one-of-the-lowest-numbers-of-refugees-per-capita-in-the-world-there-is-room-for-many-more-162663

[18] Compare also generally Nottage and Paterson op cit

[19] See generally eg Nottage (1996 VUWLR) op cit, and Nottage, Luke R., Tracing Trajectories in Contract Law Theory: Form in Anglo-New Zealand Law, Substance in Japan and the United States, Yonsei Law Journal, Vol. 4, No. 2, pp. 175-271, 2013, Sydney Law School Research Paper No. 13/37, also at https://ssrn.com/abstract=2270889