Arbitration: Year in Review 2025

This Year in Review surveys the key New Zealand arbitration decisions of 2025 and highlights important changes to arbitral legislation, rules and guidelines.

The New Zealand courts have continued to apply a light touch supervisory role, reinforced their willingness to grant interim relief when tribunals cannot yet act, and showed a readiness to interpret arbitration clauses broadly to capture multi-contract disputes. 

We also highlight selected reforms to the English Arbitration Act regime and practical implications for New Zealand practitioners. 

Executive summary and key takeaways

• Appeals and setting aside: The pathways to challenge arbitral awards remain narrow. In relation to appeals, special leave from the Court of Appeal is not an opportunity for a "second bite" at the same arguments on the merits of the award and will not be granted unless the High Court's leave decision was plainly wrong. A high bar will be applied to applications to set aside arbitral awards.
• Interim measures: Courts will grant interim relief to preserve the status quo where a tribunal is not yet constituted and relief is urgent, while deferring to the tribunal once it can act.
• "Disputes" under multiple contracts: Broad "out of or in connection with" language in arbitral clauses can capture related disputes, even if they arise under later contracts containing different dispute resolution provisions. 
• Costs: Arbitral tribunals are not bound by the High Court costs regime and have wide discretion to award costs they consider to be reasonable in the circumstances. 
• Third parties: In some (rare) circumstances third parties can be bound, practically, by the findings of an arbitral tribunal.
• Insolvency proceedings: Cross-claims subject to binding arbitration agreements can be disregarded for the purposes of insolvency proceedings if special circumstances warrant it.

Appeals and setting aside 

The Arbitration Act 1996 bestows limited rights of appeal from an arbitral award. Unless the parties have agreed a right of appeal (either prior to or after the issuance of the award), appeals on questions of law can only be pursued with the leave of the High Court. If the High Court declines to grant leave, a party can seek the High Court's leave to appeal to the Court of Appeal from that declinature. If the High Court declines to grant leave for that step, then special leave can be sought from the Court of Appeal.  

Antipodes New Zealand Ltd v Accel (HK) Company Ltd [2025] NZCA 18 concerned an attempt by a party to an international arbitration to obtain special leave from the Court of Appeal.

Antipodes and Accel submitted a dispute to arbitration and an award was made in Accel's favour. Antipodes initially sought leave to appeal from the High Court, which declined leave on the basis that there were no seriously arguable errors of law. The decision emphasised that this was an international arbitration between two experienced and substantial commercial parties before a legally qualified and highly experienced arbitrator, and the errors alleged by Antipodes were only incidental issues in the arbitration and would not justify the cost and delay of an appeal.  

Antipodes then sought special leave from the Court of Appeal. In declining special leave, the Court of Appeal reaffirmed that its powers do not give parties "a second bite at the same cherry". The Court of Appeal's focus will be on whether the High Court's decision to decline leave was plainly wrong or misapplied the relevant test, not on the merits of the award itself.   

Another avenue for challenging an arbitral award is to seek to set it aside under Schedule 1 of the Arbitration Act 1996. The grounds for setting aside include (amongst other things) where:

• the award deals with a dispute not contemplated by or falling within the terms of the submission to arbitration or contains decisions on matters beyond the scope of the submission to arbitration (in which case that part of the award may be set aside); or
• the High Court finds that the subject matter of the dispute is not capable of settlement by arbitration or the award is contrary to public policy.

In A & H (Kumeu) Ltd v Kumeu Playschool Ltd [2025] NZHC 843, a tenant sought to challenge the arbitrator's interpretation of a rent review clause and the mathematical treatment of the Consumer Price Index (CPI). The tenant argued that the arbitrator breached natural justice (because she refused to "correct" the award upon request by the tenant); dealt with matters outside the original dispute; and breached public policy. The High Court dismissed the application, finding:

• There was no breach of natural justice. Under Schedule 1 of the Act, parties can ask the arbitrator to correct simple, uncontested, arithmetical or grammatical mistakes in an award. However, this power cannot be used as a backdoor or de facto appeal on the merits of the arbitrator's decision.
• There was no basis to find that the arbitrator went outside the scope of the referral (the mathematical treatment of the CPI was squarely before the arbitrator).
• Nor was the arbitrator's decision so fundamentally wrong that it could be said to contrary to public policy. The High Court found that the arbitrator treated the mathematics correctly.

Interim measures

Under the Arbitration Act 1996, courts have the same powers as an arbitral tribunal to grant "interim measures". The pre-requisites for the granting of interim measures are that:

• harm not adequately reparable by an award of damages is likely to result if the measure is not granted;
• the harm substantially outweighs the harm that is likely to result to the respondent if the measure is granted; and
• there is a reasonable possibility that the applicant will succeed on the merits of the claim.

In Cavit v Deng [2025] NZHC 286, the applicant sought interim measures stopping a neighbour from redeveloping a residential property allegedly in breach of the terms of a cross-lease. At the time the application was heard no arbitral tribunal had been constituted and the respondent had commenced construction works. Observing that it was impracticable for the tribunal to act as none was yet constituted, the High Court granted the interim measures to preserve the status quo pending resolution of the dispute by arbitration.

In contrast, the High Court in Jellick v Perrett [2025] NZHC 929 declined to grant interim measures in the context of a shareholder dispute over a farming business. The Court declined to grant orders for the interim removal of the respondents as operators of the farm on the grounds that damages would be an adequate remedy and granting the orders sought would not preserve the status quo (it would, instead, cut across the arbitral tribunal's jurisdiction to resolve the dispute – particularly as the arbitral tribunal had since issued an interim award directing sale).

Jurisdiction and multi-contract disputes

In Acanthus Ltd v Watercare Services Ltd [2025] NZHC 749 (which Russell McVeagh acted on), the High Court confirmed that an arbitration clause in an earlier contract can apply to disputes that arise under subsequent, related agreements between the same parties even if they contain different dispute resolution provisions. 

The parties entered into various agreements regarding the provision of wastewater services for a development. The 2018 agreement contained a clause providing for disputes to be referred to arbitration, but subsequent agreements relating to the same development contained different dispute resolution terms. Disputes arose between the parties, and the developer commenced substantive proceedings in the High Court. Watercare applied for a stay on the grounds that the disputes were subject to a binding arbitration agreement.

The High Court found that the arbitration clause in the 2018 agreement had a wide scope. The subject matter of the disputes fell within the scope of that clause as the disputes all arose out of or in connection with the 2018 agreement. The application for a stay was granted.  This judgment confirms the Court's willingness to uphold broadly framed arbitration clauses where there is a sufficient connection with the dispute.

The High Court subsequently awarded indemnity costs to Watercare in Acanthus Ltd v Watercare Services Ltd [2025] NZHC 1182. The award was made in recognition of Watercare's contractual entitlement to reasonable costs incurred, incidental to enforcement of the 2018 agreement.

Costs

McCracken v Boyer [2025] NZHC 546 confirms that arbitrators do not have to adhere to the High Court scale costs regime when making costs awards and highlights the significant discretion that arbitrators have when awarding cost. 

Following the determination of a dispute between neighbours under a cross-lease, the arbitrator awarded the successful party 66% of their legal and arbitration costs and 50% of their expert costs, plus interest. The unsuccessful party challenged the costs award on the grounds that the arbitrator was required to (but did not) apply the High Court scale costs regime and also failed properly to assess the reasonableness of the successful party's legal costs.  

The High Court rejected the submission that arbitral tribunals are bound by the High Court scale costs regime. While the Arbitration Act 1996 gives arbitrators powers to grant any relief the High Court can give in civil proceedings, that does not bind arbitrators to follow the High Court Rules costs approach. The High Court also emphasised the wide discretion available to arbitrators to award costs that they consider reflect a reasonable outcome in the circumstances. Absent any obvious error of law or unreasonableness, the Court will not attempt to substitute its own view of what is reasonable.

Awards and third parties

An arbitral award cannot generally bind third parties. In certain (limited) circumstances, however, a third party may find itself practically bound by the findings of an arbitral tribunal.

In Spark New Zealand Trading Ltd v Bryan [2025] NZCA 153, a company owned and controlled by Mr Bryan made secret payments of over $3.5m to a contractor working for Spark. In return for these payments, the contractor took steps to secure an ongoing stream of work for the company at inflated prices from Spark.

Spark initiated arbitral proceedings against the contractor and Mr Bryan's company and obtained a damages award against both. The award was entered as a judgment of the High Court and sealed.

Spark then issued High Court proceedings against Mr Bryan in his personal capacity and sought summary judgment based on the causes of action that had succeeded against the company in the arbitration, and for the same sum. Spark contended it was entitled to summary judgment because, although Mr Bryan had not himself been a party to the arbitration, he was a privy of his company and accordingly bound by the arbitrator’s findings.

The High Court declined summary judgment. Spark then obtained leave to appeal to the Court of Appeal.

The proceeding concerned the doctrine of res judicata, which is one of the exceptions to the general rule in section 50 of the Evidence Act that evidence of a judgment or finding of fact in a civil proceeding is not admissible in another civil proceeding to prove the existence of a fact that was in issue in the proceeding in which the judgment was given.
 
The key issue was about privity. Although the Court accepted that caution was needed in making a finding of privity between a company and its shareholders or directors, it nevertheless found that privity existed between Mr Bryan and the company. Mr Bryan was the company’s alter ego. Mr Bryan established the company specifically for the Spark project. Spark was the company’s sole client and Mr Bryan the direct beneficiary of the company’s dishonest conduct. He had complete control of the company and at all material times its relevant decisions and actions were undertaken by him. Mr Bryan had actively participated in the arbitration, and it would, the Court said, be unjust for Mr Bryan to be able to distance himself from the company and require Spark to incur the cost of re-litigation. 

The Court went on to hold that the causes of action proved in the arbitration were identical to those claimed against Mr Bryan and that, in any event, there was identity as to the issues. Accordingly, he was liable to summary judgment. 

Interplay with insolvency proceedings

Body Corporate 172108 v Cummins [2025] NZHC 1378 clarifies that arbitration agreements, while generally enforceable, do not override the Court’s equitable jurisdiction in insolvency – particularly where invoking arbitration would frustrate the administration of justice or enable abuse of process.

The parties were involved in a long-running dispute over the repair of Hobson Apartments in Auckland. Central to the dispute was a Court-approved remedial scheme established under the Unit Titles Act 1972. The scheme set out how the costs of extensive remedial works were to be allocated between unit owners (including Mr Cummins). It also included an arbitration clause.

The Body Corporate sought an order from the Court adjudicating Mr Cummins bankrupt on the basis of failure to pay costs awarded in an earlier summary judgment. Mr Cummins argued that he had substantial cross-claims against the Body Corporate, which needed to be arbitrated under the scheme. He contended these should be determined by arbitration before any bankruptcy order could be made.  

The Court reaffirmed that, while cross-claims can be considered in insolvency proceedings, they must be “genuine triable claims” of substance, both as to liability and quantum. Mr Cummins' cross-claims did not qualify. The Court also went on say that, even where an arbitration clause exists, the Court could refuse to halt insolvency proceedings if special circumstances made it inappropriate to do so.

Changes to the English Arbitration Act

While there are differences, the New Zealand Act and the English Arbitration Act 1996 share the same broad structure, and their interpretation and application have often produced similar outcomes. English case law regarding the English Arbitration Act 1996 is often referenced by the New Zealand courts for the purpose of construing and applying the New Zealand Arbitration Act 1996.

The English Arbitration Act 2025 came into force on 1 August 2025. It amends the 1996 Act and aims to align the English legislation with recent reforms in other global arbitration hubs. Key changes include:

• a new power of summary disposal, which will broadly mirror the English courts’ power to award (and approach to awarding) summary judgment in English court proceedings;
• a new rule on the governing law of an arbitration agreement: where the parties do not specify the governing law of the arbitration agreement, it will be governed by the law of the seat (as opposed to the governing law of the matrix contract);
• a new statutory duty on arbitrators to disclose, on a continuing basis, any circumstances that "might reasonably give rise to justifiable doubts" about their impartiality; and
• clarification that the courts can make orders in support of arbitration that include orders against third parties (such as the grant of interim injunctions, the preservation and collection of evidence or the sale of goods).

These legislative reforms do not affect the New Zealand Arbitration Act 1996. However, the reforms will be relevant to any comparative analysis of English law and practice concerning the issues impacted by these reforms. Additionally, the reforms could potentially inform the New Zealand Law Commission’s approach to any future review of the New Zealand Arbitration Act 1996 (the last major review by the New Zealand Law Commission closed in 2003, with changes proposed being reflected in the Arbitration Amendment Act 2007).

On the horizon for 2026

Diversity remains a hot topic in both domestic and international arbitrations. 

In July 2025, Bankside Arbitrators Royden Hindle and Dr Anna Kirk, along with Diana Qiu of Thorndon Chambers, and in collaboration the New Zealand Dispute Resolution Centre, released The Second Aotearoa New Zealand Arbitration Survey, three years after their Inaugural Survey.

Key findings from the report, which covers the period 1 January 2021 to 31 December 2023, include that:

• There has been little progress on increasing the diversity of arbitrators, particularly in relation to ethnic diversity. Unlike the Inaugural Survey, all respondents identified as NZ European/Pākehā in the Second Survey, suggesting a reduction in diversity.
• Gender diversity remained similar, with clear evidence that institutions were responsible for most (but not all) appointments of female arbitrators.

Since 2018 Russell McVeagh has been promoting a list of women and gender diverse lawyers accepting appointments as commercial arbitrators in Aotearoa New Zealand. The list is designed as a practical tool for clients and law firms. It has been recently updated and can be accessed here.

This content is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter, please contact a Russell McVeagh partner/solicitor.