Modern Laws, Developing Practice: Is Papua New Guinea ready to become an Arbitration hub for the Pacific?

By Eunice Noki and Olive Tiri

Key takeaways:

• Papua New Guinea (PNG) has modernised its arbitration framework through the enactment of the Arbitration (Domestic) Act 2024 and Arbitration (International) Act 2024, replacing the Arbitration Act (Chapter 46).

• The new system introduces a dual track regime, distinguishing between domestic and international arbitration and bringing PNG’s arbitration laws into closer alignment with international standards.

• The Arbitration (International) Act 2024 strengthens party autonomy, limits judicial intervention, and enhances the recognition and enforcement of arbitral awards.

• Despite the introduction of a modern legal framework, challenges remain in the practical administration of arbitration, including institutional capacity, practitioner expertise, and judicial consistency.

• While PNG is among the most legislatively advanced arbitration jurisdictions in the Pacific, it has not yet emerged as a fully developed regional arbitration hub.

• The long term success of the reforms will depend on continued institutional development, a supportive and consistent judiciary, and broader commercial adoption of arbitration as a dispute resolution mechanism.

Has PNG's arbitration reform created the foundations for a regional arbitration hub?

PNG may now possess one of the most modern arbitration frameworks in the Pacific region. However legislative reform alone does not necessarily translate into arbitral maturity. The effectiveness of the arbitration regime depends not only on the quality of its statutory framework, but also on the but also on the strength of its institutions, the consistency of judicial support, the availability of specialist practitioners, and the confidence of commercial parties in arbitration as a reliable dispute resolution mechanism.

The enactment of the Arbitration (Domestic) Act 2024 (ADA) and the Arbitration (International) Act 2024 (AIA), which came into force on 9 July 2024 marks a significant milestone in the development of PNG’s dispute resolution landscape. Replacing the former Arbitration Act (Chapter 46) (AA), the new regime establishes a modern, dual-track framework for domestic and international arbitration and reflects a clear policy objective of aligning PNG's arbitration laws with contemporary international standards.

The more difficult question is whether legislative modernisation alone is sufficient to transform PNG into a credible arbitral seat for both domestic and cross-border disputes. As with any arbitration jurisdiction, the true test lies not in the legislation itself, but in how effectively it operates in practice.

Why was arbitration reform necessary in PNG?

Under the former Arbitration Act (Chapter 46) arbitration operated within a single statutory framework that reflected a more traditional and court supervised model to dispute resolution.

Several structural features characterised the previous regime:

1. Arbitration was often treated as an extension of court-supervised dispute resolution rather than a fully autonomous dispute resolution process;

2. The legislation did not distinguish between domestic and international arbitration;

3. Courts played a more prominent supervisory role; and

4. The framework did not fully reflect modern arbitration principles such as party autonomy, minimal court intervention, and internationally recognised arbitration procedures.

While arbitration remained available as a dispute resolution option, it lacked many features found in mature arbitration jurisdictions.

Over time, these limitations became more apparent as PNG’s commercial environment expanded and became increasingly involved in cross-border transactions, foreign investment structures, and complex commercial arrangements requiring neutral and efficient dispute resolution mechanisms. Reform therefore became necessary not merely to update the legislation, but to reposition arbitration as a viable and internationally credible dispute resolution mechanism in PNG.

What has changed under PNG's new arbitration framework?

PNG's current arbitration regime is built on the ADA and AIA.

The introduction of separate legislation for domestic and international arbitration represents a significant departure from the previous framework and reflects a more sophisticated understanding of the differing needs of local and international disputes.

The ADA modernises arbitration for domestic disputes by promoting procedural flexibility, efficiency, and reduced court involvement. Its objective is to encourage arbitration as a practical and accessible method of resolving commercial disputes within PNG.

The AIA represents the most significant reform shift. It is designed specifically for cross-border disputes and aligns more closely with internationally recognised arbitration principles, including those reflected in the UNCITRAL Model Law framework. It strengthens party autonomy, limits judicial intervention, supports procedural neutrality and improves enforceability of arbitral awards.

A key distinction between the two regimes is therefore functional:

• the ADA prioritises accessibility and efficiency in local disputes; while

• the AIA prioritises neutrality, enforceability, and international acceptability.

The result is not simply a modernisation of the previous regime, but a fundamental redesign of PNG's arbitration architecture.

Where does the gap between legislative reform and arbitral maturity remain?

From a legislative standpoint, PNG’s new arbitration framework represents a significant advancement and places it among the more modern arbitration jurisdictions in the Pacific region. However, a distinction must be maintained between statutory design and institutional maturity.

The legislative foundations are now largely in place. The more difficult challenge is ensuring that the broader arbitration ecosystem develops alongside the law.

The principal gaps between legislative strength and practical capability include:

• Institutional capacity - unlike established arbitration hubs, PNG does not yet have a fully embedded and internationally recognised arbitral institution with a sustained track record of administering disputes. While there have been positive institutional developments, the system remains in at a relatively early stage of development;

• Specialist expertise - the pool of experienced arbitration practitioners and arbitrators is also still developing. International arbitration requires not only legal expertise, but also sustained exposure to arbitral procedure, institutional practice, and complex cross-border disputes;

• Judicial support and consistency - the effectiveness of the new regime will depend on consistent judicial support, particularly in relation to enforcement of awards and the application of a restrained, pro-arbitration approach to court intervention;

• Market confidence and adoption - commercial parties must have confidence not only in the legislation itself, but also in the predictability, efficiency and credibility of the broader dispute resolution ecosystem.

The gap is not one of legislative design, but of practical implementation. While PNG has established a modern arbitration framework, the institutions, expertise and market confidence necessary to support a mature arbitration environment are still developing.

Where does PNG currently sit in the Pacific arbitration landscape?

Within the Pacific region, PNG occupies a unique position in the arbitration landscape. Following the introduction of its dual-track arbitration regime, PNG is now among the more legislatively advanced arbitration jurisdictions in the region.

This places PNG in a potential position to serve as a regional arbitration reference point, particularly for disputes arising from infrastructure, resource development, and cross-border investment activity within the Melanesian and broader Pacific economic space.

However, this legislative advantage has not yet translated into institutional leadership or arbitral market centrality. In practice, parties in the region continue to rely on established arbitral institutions outside the Pacific for complex international disputes.

PNG’s current position can be characterised as legislatively progressive within the Pacific, but institutionally and commercially still emerging.

What must happen for PNG to become a credible arbitration hub?

The enactment of the ADA and AIA is only the first step. The next phase of development will require a focus on building the institutional and professional foundations necessary to support the new framework.

Key areas for development include:

• Institutional capacity - the establishment of a credible arbitration center with clear procedural rules, administrative support, and case management capacity would significantly strengthen the regime’s operational credibility.

• Judicial capacity - building capacity is equally essential to ensure consistent application of arbitration principles, particularly in enforcement and non-intervention.

• Professional expertise - increasing practitioner training and exposure to domestic and international arbitration practice to develop a sustainable pool of experienced arbitrators and counsel.

• Commercial adoption - encouraging businesses to incorporate arbitration clauses into commercial agreements and view arbitration as a practical and reliable dispute resolution mechanism.

Ultimately, the success of the reforms will depend on whether arbitration becomes embedded within PNG's broader commercial and dispute resolution culture.

Can PNG become the Pacific’s next arbitration hub?

PNG has undertaken a significant reform of its arbitration framework through the introduction of the ADA and the AIA, replacing the former regime under the AA.

The reforms establish a modern and internationally aligned legislative framework that compares favourably with other jurisdictions in the Pacific region. They demonstrate a clear commitment to promoting arbitration as an effective mechanism for resolving both domestic and international disputes.

However, the long-term success of the reforms will not be determined by legislation alone. The challenge now lies in ensuring that institutional capacity, judicial support, professional expertise and commercial confidence develop alongside the new framework.

If PNG can successfully bridge the gap between legislative reform and practical implementation, it has the potential not only to strengthen its domestic dispute resolution framework, but also to emerge as a credible arbitration jurisdiction within the Pacific region.