Arbitration Reform – A Perspective from the Pacific Islands

International arbitration practitioners have traditionally overlooked the Pacific Islands. With expanding trade routes expanding and increasingly diversified regional economies, that view requires a second look.

Recent developments in Papua New Guinea (“PNG”), Fiji, and Vanuatu signal a growing regional commitment to modernise arbitration practices. These reforms present new opportunities and challenges for the international business community.

Legislative Overhaul in PNG

PNG enacted two new arbitration laws in July 2024:

• Arbitration (Domestic) Act 2024; and
• Arbitration (International) Act 2024, (the “Acts”).

The Acts repeal outdated arbitration laws and implement the UNCITRAL (United Nations Commission On International Trade Law) Model Law on International Commercial Arbitration (2006) (“UNCITRAL Model Law”), with local modifications. Notably, PNG has expressly incorporated confidentiality into its arbitration framework. This is a strategic move, particularly relevant to the mining and energy sectors, where protecting proprietary and commercially sensitive information is paramount.

Equally significant is the recognition that arbitrator nationality shall not disqualify a person from being appointed as an arbitrator – which aligns with international practice and enhances party autonomy.

The Acts also clarify that arbitral awards are enforceable regardless of country of origin and streamlines enforcement through its national courts. A court referral system supports the new domestic regime, designed to ease the burden on PNG’s already stretched judiciary.

Supported by the Asian Development Bank (“ADB”), these reforms position PNG as a more predictable and attractive destination for foreign investment. However, the absence of a domestic arbitral institution and experienced practitioners may challenge effective implementation of these laws.

Fiji's Jurisprudential Advancements

Fiji continues to lead the region in arbitral jurisprudence. Its International Arbitration Act 2017 (“IAA”) remains the Pacific region’s most tested framework. The IAA is based on the UNICTRAL Model Law and incorporates aspects of the Australian, Hong Kong and Singapore legislation. Fiji is also a party to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (the “New York Convention”), reinforcing its credibility.

Unlike PNG, Fiji’s appeal as an arbitration seat lies not in recent legislative reform but in consistent judicial support. The Fijian High Court’s decision in Housing Authority v Top Symphony (2023) exemplifies this trend.

In this case, the High Court stayed court proceedings and deferred to the arbitral tribunal on the interpretation of a multi-tiered dispute resolution clause. In doing so, the High Court sent a clear message: Fiji respects the autonomy of arbitration agreements. This restrained judicial approach, along with a track record of enforcing valid arbitration agreements, enhances legal certainty – which is crucial for attracting foreign investment.

The Fijian government's National Development Plan 2025-2029 further signals policy and institutional support for arbitration as an economic development tool.

Vanuatu – Tentative Steps

Vanuatu's accession to the Permanent Court of Arbitration (“PCA”) on 11 August 2024 is a positive symbolic step, signalling openness to international dispute resolution.

While PCA membership provides a framework for resolving investor-state disputes, it does not automatically resolve the inadequacies in Vanuatu’s current domestic arbitration laws. Without accession to the New York Convention or modern arbitration legislation, Vanuatu’s framework remains fragmented.

The broad powers retained by the national courts - including expansive grounds for setting aside awards will pose a serious risk to party autonomy and procedural integrity. If left unaddressed, these features will continue to deter serious investment and cross-border dispute resolution.

Challenges and Opportunities

Despite the positive developments, several shortcomings remain across the Pacific region. One critical area is the lack of clear rules on interim measures before the arbitral tribunal is constituted. This gap creates uncertainty for parties needing urgent relief and could undermine arbitration’s appeal as a reliable alternative to litigation.

The absence of dedicated arbitration institutions in PNG, Fiji, and Vanuatu is another limiting factor. While legislation and jurisprudence provide a foundation, arbitral institutions provide more than administrative support. They foster practitioner development, promote best practices and foster a local arbitration culture. Without such infrastructure, reforms risk remaining theoretical.

Vanuatu's framework gives local courts broad intervention powers and provides grounds for setting aside an award, which are broader and is indicative of more involvement from the judicial system than in PNG or Fiji. There needs to be more recognition of party autonomy and consideration for what international best practices require to safeguard arbitration in Vanuatu.

Conclusion

The Pacific Islands are no longer invisible on the international arbitration map. PNG’s legislative overhaul, Fiji’s jurisprudential consistency and Vanuatu’s tentative international engagement show that the Pacific region is taking arbitration seriously.

Reform must go deeper. Without credible interim relief mechanisms, independent institutions, and more rigorous alignment with international norms - particularly in Vanuatu - the region’s full potential as an arbitral hub remains unrealised.

For practitioners willing to engage with these emerging systems, the Pacific Islands present a rare opportunity: to shape not just disputes, but the development of dispute resolution architecture in a region poised for economic growth.

ABOUT THE AUTHORS

Melissa Tang is a partner at Clyde & Co’s Sydney office after spending nearly 6 years in the firm’s Singapore office. Melissa works within the Energy, Marine, and Natural Resources team. She has extensive cross-border experience across the maritime, aviation and aerospace sectors. She has handled high-value multi-party litigated disputes for operators and their insurers in respect of major aviation/shipping incidents, cross-border aviation and maritime disputes, subrogated recoveries and regulatory investigations/ prosecutions.

Oliver Ryan is a paralegal in the Sydney dispute resolution team at Clyde & Co, working within the Energy, Marine, and Natural Resources team.

Cassandra Devitt is a law graduate in the Sydney dispute resolution team at Clyde & Co, working within the Energy, Marine, and Natural Resources team.

This article was originally published on Daily Jus on Friday 4th of April, with thanks to Jus Mundi & Jus Connect.