Adjudicative ADR (Arbitration)

Question 1

What is arbitration?

Answer 1

An alternative method of dispute resolution which involves an impartial arbitrator or tribunal considering both sides of a dispute and making a decision on the issues raised by the parties.

Question 2

When will a dispute be referred to arbitration?

Answer 2

When there is an agreement between the parties to refer their dispute or difference to arbitration. That agreement may be made before or after the relevant dispute has arisen.

Question 3

If the parties have a pre-existing arbitration agreement, do they have to use arbitration?

Answer 3

A party can seek to evade a pre-existing arbitration agreement, however there is a strong public policy in favour of upholding arbitration agreements, which is supported by the idea that an arbitration clause in a contract is separable from the rest of the substantive contract (and so continues to apply even if the substantive contract is avoided), and by the jurisdiction to stay court proceedings that are commenced in breach of an arbitration agreement.

Question 4

What are the three general principles of arbitration governed by the Arbitration Act 1996?

Answer 4

the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense

the parties should be free to agree how their disputes are resolved, subject only to such safeguard as are necessary in the public interest

the court should not intervene except as provided by the Arbitration Act 1996

Question 5

Where the parties have agreed to refer their dispute to arbitration, that implies they want their dispute decided in which ways?s

Answer 5

by a tribunal they have chosen

in a neutral location and with neutral arbitrators

in privacy

speedily and efficiently

with light but efficient supervision by the courts

Question 6

What are the requirements for arbitration?

Answer 6

there must be a dispute or difference

it must be a private law dispute

there must be an agreement in writing to arbitrate

the nature of the dispute must come within the terms of the arbitration agreement

Question 7

Whose responsibility is it to find an arbitral tribunal willing to act and decide the dispute?

Answer 7

The parties

Question 8

1. What can arbitration be used for?

2. What is arbitration most commonly used for?

Answer 8

1. Any type of dispute can be referred to arbitration, regardless of the legal classification of the underlying cause of action
2. Arbitration is most commonly used for resolving disputes arising out of a contract between the parties, frequently with the agreement to arbitrate being found in a clause in the substantive contract.

Question 9

What does an arbitrator have jurisdiction to do?

Answer 9

The arbitrator only has jurisdiction for matters that come within the terms of the arbitration agreement.

This means, e.g. the arbitrators cannot make a decision against a person who is not a party to the arbitration agreement, or on matters not covered by the arbitration agreement, or on matters not covered by the parties’ agreement with the arbitrators.

Question 10

To prevent a party from breaching an agreement to arbitrate by bringing court proceedings, the other side can apply for a stay of those court proceedings. The court must grant a stay unless the court is satisfied ……

Answer 10

unless the court is satisfied that the arbitration agreement is:

null and void

inoperative

incapable of being performed

Question 11

How are arbitrations commenced?

Answer 11

By sending a notice of arbitration and then appointing members of the arbitral tribunal

Question 12

Are there any restrictions on the procedure for appointing the arbitrator?

Answer 12

The parties are free to agree on the procedure for appointing the arbitrator or arbitrators, including the procedure for appointing any chairman or umpire.

Question 13

What is the usual position for appointing arbitrators where the parties agree to a three-member tribunal?

Answer 13

The usual position is that each party appoints one arbitrator and these two arbitrators then appoint a third member who acts as the chairman.

Question 14

Do all arbitrations adopt the same procedure?

Answer 14

No

The complexity of the procedure adopted in an arbitration will depend on what the parties have agreed, which will be influenced by the nature and importance of the dispute.

Question 15

What are the general elements of arbitration?

Answer 15

preliminary meeting

pre-trial hearing/conference

bundles

hearing

closing of proceedings

Question 16

What happens during the preliminary meeting?

Answer 16

This will often take place shortly after the tribunal is appointed. It is an opportunity for the parties and arbitrator to meet, but its main purpose is as a forum for the tribunal to discuss jurisdictional matters and to make procedural directions for the preparation of the evidence needed for deciding the reference.

There is no set agenda for preliminary meetings.

Question 17

Are preliminary meetings always necessary?

Answer 17

It may be possible for directions to be agreed between the parties, which will make a preliminary meeting less necessary.

Question 18

Do preliminary meetings have to take place in person?

Answer 18

No, it is becoming increasingly common to hold preliminary meetings by conference telephone calls or through video conferencing.

Question 19

Who decides the procedural and evidential matters that have been referred to arbitration?

Answer 19

It is for the arbitration tribunal to decide all procedural and evidential matters that have been referred to it, subject to the right of the parties to agree such matters between themselves.

Question 20

Can the tribunal fix the time within which any directs are to be complied with?

Answer 20

Yes, they may. They may also extend the time if it thinks fit.

Question 21

What will take place during the pre-trial hearing/conference and when is this necessary?

Answer 21

If the arbitration is of some complexity it may be sensible to hold a pre-trial hearing or conference.

This will usually take place a numb er of weeks before the expected start of the hearing.

The main purpose is to review what has been done in preparation for the hearing, to assess whether the parties are going to be ready for the hearing, and to make directions.

Question 22

What is to be contained in a bundle and are they always required?

Answer 22

Not always required but directions are usually made for the compilation of bundles for the hearing.

They will usually contain:

• documents dealing with the reference to the arbitration and the appointment of the tribunal
• statements of case
• any procedural orders/directions

Question 23

Is a separate bundle required for evidence?

Answer 23

Maybe, if a separate bundle is required for evidence, these files should be divided into:

• contemporaneous documentation
• witness statements
• expert evidence

Question 24

Is a separate bundle needed for written opening submissions/ skeleton arguments/ authorities.

Answer 24

Not always, but its likely that a separate bundle will be required.

Question 25

Do parties have a right to an oral hearing?

Answer 25

No, there is no right to an oral hearing.

Subject to contrary agreement between the parties, the tribunal can decide whether and to what extent there should be oral or written evidence or submissions

While it might be unwise to proceed without a hearing in an arbitration where a substantial amount of money is at stake, arbitrators have the power to do so.

Question 26

What are the two approaches arbitrators can choose to adopt when conducting the hearing?

Answer 26

Arbitrators can choose to adopt either an adversarial or inquisitorial approach to the hearing.

Adversarial: the parties have the responsibility for finding and presenting evidence

Inquisitorial: characterised by the judge performing an examining role.

Question 27

What can indicate the closing of proceedings?

Answer 27

The arbitrators will include a mechanism for closing the proceedings. This may be:

• a date designated in the tribunal’s directions
• a set period after a stage in the process
• after the last closing submission at the hearing

Question 28

What is the usual rule in relation to evidence and the closing of proceedings?

Answer 28

After the closure of proceedings the usual rule is that no further evidence or submissions can be given to the tribunal (although some tribunals give permission for further material to be advanced even after the close of proceedings).

Question 29

Is arbitration confidential?

Answer 29

YES

There are long-established principles of arbitration of law that arbitration proceedings are private and confidential.

Question 30

What are the different awards/orders that available to arbitrators?

Answer 30

Procedural orders: which provide procedural directions and measures designed to preserve evidence or the subject matter of the dispute while an arbitration is proceeding

Interim awards and awards on different issues: which finally dispose of one or more of the substantive issues in the arbitration, leaving the other issues to be decided later on.

Final awards: finally disposing of the arbitration

Costs awards: which provide for the payment of costs incurred in the arbitration between the parties.

Question 31

Is an award/order granted by arbitrators binding?

Answer 31

Yes

Question 32

How can a domestic arbitral award be enforced?

Answer 32

Either:

• bringing an ordinary civil claim on the award in the High Court
• using the summary procedure under s 66(1) Arbitration Act 1996

Question 33

How is permission to enforce the award sought?

Answer 33

By issuing an arbitration claim form in the High Court, which is considered without notice.

Question 34

Is it possible to appeal an arbitration award?

Answer 34

Yes but only on the following grounds:

• there was a serious irregularity
• on a point of law (unless the parties agree to exclude this right to appeal).

Appeals are allowed restrictively.

Question 35

What is an arbitration claim?

Answer 35

• any claim to the court under the 1996 Act
• a claim to determine whether there is a valid arbitration agreement/ whether an arbitration tribunal is properly constituted
• a claim to declare that an award by an arbitral tribunal is not binding on a party
• any other application affecting arbitration proceedings or arbitration agreements

Question 36

How is an arbitration claim started?

Answer 36

By issuing an arbitration claim form in accordance with the Part 8 procedure.

Question 37

What must be included in the arbitration claim form?

Answer 37

a concise statement of the remedy claim and any questions on which the claimant seeks the decision of the court

details of any arbitration award challenged by the claimant and specifying the grounds for the challenge

show that any statutory requirements have been met

identify against which (if any) defendants a costs order is sought

specify the persons on whom the arbitration claim form is to be served, stating their role in the arbitration and whether they are defendants, or (if made without notice) that the claim is made without notice.

Question 38

When must the arbitration claim form be served on the defendant?

Answer 38

Unless the court orders otherwise an arbitration claim form must be served on the defendant within one month from the date of issue

Question 39

Where does the burden lie to show that the dispute ought not to be referred to arbitration?

Answer 39

The onus rests on the claimant to show that the dispute ought not to be referred to arbitration.