TRIBUNALS AND

ALTERNATIVE DISPUTE RESOLUTION (II)

ARBITRATION
English Legal System
1 October 2020
 LEARNING OUTCOMES

 Understanding the basic idea of arbitration as a form of ADR

 To be able to outline the advantages and disadvantages of arbitration

 Understanding the position of arbitration alongside the ordinary court process

 ARBITRATION
 A procedure whereby all sides to a dispute agree to let a neutral third party (the
arbitrator) decide the case between them on a binding basis.
 The arbitrator may be a lawyer or an expert in the field of the dispute.
 There can be one sole arbitrator or a panel of several arbitrators.
 The arbitrator/s will decide according to the law.
 The arbitrator’s decision is legally binding and can be enforced via the court process (as
though it was a decision of a court).
 Arbitration is usually provided for in contractual arrangements between parties ie parties
agree from the outset that if any disputes arise between them in future, the dispute will
go to arbitration instead of the courts.
 Court
 WHY SELECT ARBITRATION
 Avoids the need to go to court – proceedings can be kept confidential. This is of great importance to
commercial entities.
 Arbitration is usually faster and (sometimes) cheaper than going to court.
 Parties can select a neutral arbitrator themselves, thereby ensuring that the person chosen has the correct
technical expertise to deal with the matter. This reduces the need to call expert evidence and/or to explain
technical matters in argument.
 Parties can select a neutral venue (the “seat of arbitration”) thereby avoiding having to go to court in a
country where one of the parties has an advantage (in international disputes).
 Lists of suitable arbitrators according to each commercial field are kept by the Chartered Institute of
Arbitrators (which also accredits arbitrators)
 Once appointed, the arbitrator is required to act in an impartial, judicial manner just like a judge.
 DOWNSIDES OF ARBITRATION
 Arbitrators’ fees are generally very high, so the costs of arbitration may even exceed
that of litigation.

 Whatever is decided in arbitration is confidential to the parties involved – usually only

the decision (and sometimes only parts of the decision) are released to the public/media
if necessary by consent of all the parties involved.

 Arbitration is binding, so it does not have the conciliatory effect of mediation ie there is
a clear winner and loser, just like going to court.

 Although it is meant to be consensual at the point of contracting, one may be ‘obliged’

in practice to agree to an arbitration clause in order to get the rest of the contract done.
 ARBITRATION ACT 1996
 Adopted to promote the use of commercial arbitration in the UK.
 Governs all arbitration ‘seated’ in England, Wales and Northern Ireland.
 Sets out a clear framework for the use of arbitration in the UK.
 Repeals earlier legal framework on arbitration eg Arbitration Acts 1975 and 1979.
 Key principles of the Act’s framework:
 To facilitate “fair resolution of disputes by an impartial tribunal without unnecessary delay and expense”
 Parties should be free to decide how their disputes are resolved, subject only to such safeguards as are necessary
in the public interest
 In matters governed by the Act, the court should not intervene except as provided for under the Act.
 The arbitrator can rule of questions relating to its own jurisdiction ie whether there is a valid arbitration
agreement (s.30)
 The arbitrator can decide its own procedure and its methods of admitting evidence.
 ARBITRATION ACT 1996
 Where parties have included an arbitration clause in their contract, the court will give effect to it and may
stay any court proceedings commenced by any party to the contract (ss 9-11)
 The court may also compel any party to comply with an order by the arbitrator/s (s 43)
 The court may exercise a supervisory role over the arbitration by revoking the appointment of an
arbitrator where he/she has not acted impartially or has refused to conduct the proceedings properly (s 24)
 The court may if necessary decide a preliminary question of law arising in the arbitration proceedings so
that the arbitration can proceed on that basis (s 45)
 Parties may appeal on a point of law only from the decision of the arbitrator (s 69). However if they have
agreed beforehand that there shall be no such appeal, then there is no appeal.
 An arbitrator’s award may be enforced in the same way as a court judgment (s 66).
 SCOPE OF ARBITRATION IN THE UK

 Generally, the following matters are most often referred to arbitration:

 Intellectual property
 Competition law
 Maritime/shipping/admiralty
 Contract/sale of goods
 Statutory claims
 Insurance disputes
 Construction and building (although this is now referred to ‘adjudication’)

 Arbitration cannot be done in the areas of criminal law and family law.
SAMPLE PAST YEAR QUESTION