The Arbitration process & Arbitration Act 2010
Arbitration is a type of alternative dispute resolution (ADR); it is a consensual process whereby the parties agree to refer their dispute(s) to an Arbitrator rather than seeking to resolve their dispute through the courts. Normally once an Arbitrator is appointed, a procedural meeting takes place to set out the proposed stages of the process and the timeframe in which the procedure is to be completed. Ultimately the arbitrator will make his award and if appropriate, include a costs award which in effect brings an end to the arbitration process. In comparison to the litigation process, arbitration can have the following advantages:
- It is private dispute forum;
- The process can be much quicker;
- Arbitration can be a much less formal process;
- The arbitrator can be chosen for his specific expertise;
- Arbitrations can be a significantly cheaper;
The Arbitration Act 2010 (‘the 2010 Act’)
The main purpose of the 2010 Act was to modernise how arbitrations are conducted in this jurisdiction and to standardise the procedures, awards and enforcement avenues that already existed internationally. In order to do away with the prior distinction between domestic and international arbitrations, the 2010 Act adopted the United Nations Commission on International Trade Law Model Law (‘the Model Law’) which is the standard used internationally. The key changes from the Arbitrations Acts 1954 to 1980 are as follows:-
- Arbitrators have increased powers to include determining their own jurisdiction;
- the 2010 Act strictly limits the possibility of appeal essentially to public policy issues or procedural unfairness;
- Arbitrators are required to give written reasoned awards unless the parties agree otherwise; and
- The Arbitrator has the power to seek expert assistance to facilitate a determination being made.
It can be seen from the above that arbitration offers a real alternative to the adversarial civil litigation process. With the new improvements brought about by the 2010 Act, the appeal and integrity of this form of ADR has been strengthened. However, it is important to bear in mind that given the additional powers allocated to the role of an Arbitrator, it is essential that proper thought be given at the outset to whom the parties agree to appoint as an Arbitrator to the dispute. This has become more important after the 2010 Act and the very limited way an award can be challenged.