Arbitration Flashcards
ARBITRATION ACT 1996 s.59-70
Where A Big & Giant Racoon Fully Stands And Claps Eating Chocolate (Jam In Proper Apple Relish Arty Sandwich)
1) Which
2) Agreement
3) Between & General
4) Recoverable
5) Fit & Standard
6) Arbitrators
7) Capping
8) Enforcement
9) Challenge/Appeal
ARBITRATION ACT 1996
Where A Big & Giant Racoon Fully Stands And Claps Eating Chocolate (Jam In Proper Apple Relish Arty Sandwich)
1) Which – S.59 (1) (arb, institution, parties) & (2) (of & incidental), Essar oil and Norscol Rig (2016) – includes costs for 3rd party funding, S.28(1)(joint & several) and (2)(can apply) and S.37(2) (includes experts, legal advisers, assessors)
2) Agreement – S.1 and S.60 and S.62
3) Between & General – S.61, Lewis (1953) if depart, need clear reasons
4) Recoverable – S.62
5) Fit & Standard – S.63 (3) and (5) and CPR 44.1(2) – gen civil rules apply to award and quantification
6) Arbitrators – S.64(1) (appropriate in circs) and (2) (if not, can apply) and S.56 – can refuse
7) Capping – S.65(1) (limit) and (2)(in advance)
8) Enforcement – S.66(1) (final), (2) (converted) and (3) (unless), CPR 62.18 – procedure set out
9) Challenge/Appeal – S.67 (Jurisdiction), S.68 (Irregularity) , S.69 (Point of Law) , S.70(2) and (3) (Appeal), S.52(4) (Reasons)), 70(4) and (5) (Award), S.38(3) (Security for Costs)
- Which costs are assessed in Arbitration
Section 59(1)
Section 59(2) -
Essar Oilfields Services Limited V Norscol Rig (2016) -
S.28(1) –
S.28(2) –
S.37(2) –
- Which costs are assessed in Arbitration
Section 59(1) of the Arbitration Act 1996 – fall into 3 categories –
- arbitrators fees and expenses,
- the fees and expenses of any arbitral institution concerned,
- the legal or other costs of the parties
Section 59(2) - also include costs of and incidental to any proceedings when determining the amount of the recoverable costs of the arbitration which may include premiums charged by third parties
Essar Oilfields Services Limited V Norscol Rig (2016) - which may include premiums charged by third parties. This judgment holds that arbitrators have the power to go further than the courts to award a claimant the cost incurred for litigation funding.
S.28(1) – Parties jointly and severally liable for Arbitrators Expenses
S.28(2) – Any party may apply to the Court (upon notice) re Arbitrators Fees & Expenses
S.37(2) – Arbitrators Expenses include any expert, legal adviser or assessor appointed by the Arbitrator
- Agreements in Arbitration – unless parties agree otherwise, S.59-65 applies i.e. S.59-65 non-mandatory and parties can agree they do not apply
Section 1 - Objective of Arb,
Section 60 -
- Agreements in Arbitration – unless parties agree otherwise, S.59-65 applies i.e. S.59-65 non-mandatory and parties can agree they do not apply
Section 1 - Objective of Arb, fair resolution without unnecessary expense or delay - Parties should be free to agree how that disputes are resolved subject only to safeguards that are necessary in the public interest
Section 60 - An agreement which has the effect that the party is to pay the whole or part of the costs is only valid if made after the dispute in question has arisen
3) Between & General –
S.61,
Lewis (1953)
Section 61 (1) - An arbitrator can allocate costs of the arbitrator between the parties, subject to any agreement between the parties
Section 61 (2) - unless the parties have agreed otherwise, the arbitrator shall award costs on the general rule that costs should follow the event
Depart – may depart from general rule if 1) Gross Exaggeration 2) Conduct 3) failure on an issue that was time consuming 4) extravagance in the conduct of the proceedings 5) a sealed offer (i.e. w/o prejudice) (Usually departure hotly contested. Arb will hear submissions b4 exercising discretion)
Lewis v Haverfordwest District Council (1953) – Arb must clearly set out its reasons for departing from general rule. Reason: parties less likely to dispute. Also, requirement for demonstrating fairness.
4) Recoverable
– S.62
Section 62 - An award can only extend to such costs as are recoverable unless the parties decide otherwise
5) Fit & Standard –
S.63 (3) and (5)
Section 63 (3) - the arbitrator must assess costs as he sees fit
Section 63 (4) – if Arb does not determine, any party may apply to Court
Section 63 (5) - where costs are determined by the arbitrator they are assessed on the standard basis (any doubt about reasonableness of amount or reasonably incurred resolved in favour of paying party), unless the arbitrator or court orders otherwise
6) Arbitrators – S.64(1) (appropriate in circs) and (2) (if not, can apply) and S.56 – can refuse
Section 64 (1) - unless otherwise agreed by the parties, shall include in respect of the fees and expenses of the arbitrators only such fees and expenses as appropriate in the circumstances
Section 64(2) - If there is any question, as to reasonableness in the circumstances an application can be made to the court by either party to determine the matter (On Notice)
United Tyrico Ltd v Born (2004) - Application - must be prompt
S.56 – Arb can refuse to deliver his award if his fees and expenses are not paid
7) Capping – S.65(1) (limit) and (2)(in advance)
Section 65 (1) - unless agreed by the parties, the Arbitrator may direct that the recoverable costs of the arbitration, or of any part of the arbitral proceedings, shall be limited to a specified amount.
Arb can limit on own initiative or on application
Section 65 (2) – can be made/varied at any stage but sufficiently in advance of incurring the costs to which it relates
8) Enforcement – S.66(1) (final), (2) (converted) and (3) (unless), CPR 62.18 – procedure set out
Section 66(1) – an award is effectively a final order, therefore, can be enforced with leave of the court if a party fails to comply
Section 66(2) - where leave is given, judgement can be entered in the terms of the award i.e award converted to Judgment
Section 66(3) - unless, the person against whom the order is made, can show the arbitrator lacked jurisdiction to make the award
CPR 62.18 – Enforcement of Awards – sets out procedure to enforce (usually w/o notice). App should include costs to be included in the order giving permission, and if judgment is to be obtained, for the costs of any judgement to be entered. (Need Claim form, witness statement with costs info, Arb Agreement and Award).
2x Principle Routes – 1) S.66 Summary Procedure 2) S.66(4) By action of the award for failure to comply
9) Challenge/Appeal – S.67 (Jurisdiction), S.68 (Irregularity) , S.69 (Point of Law) , S.70(2) and (3) (Appeal), S.52(4) (Reasons)), 70(4) and (5) (Award), S.38(3) (Security for Costs)
Section 67 - Tribunal did not have substantive jurisdiction.- (App to be On Notice. Operate AFTER an award made. Can also apply under s.31 – at outset of proceedings and S.32 as a preliminary point)
Section 68 - Ground of serious irregularity affecting the tribunal, the proceedings are the award- (App to be On Notice. If found, Court must remit the award to Arb for reconsideration, set aside or declare to be of no affect)
Section 69 - May appeal on a question of law arising out of an award, unless agreed otherwise - (S.69(2) Need Agreement of Parties or Leave of the Court).
( Leave only given if Court satisfied determination will substantially affect the rights of the parties, point is one that tribunal was asked to determine, on basis of findings of fact the decision was obviously wrong, is a Q of public importance and is at least open to serious doubt).
(App for leave usually w/o hearing unless Court considers one required)
Challenges & Appeals Continued
Section 70 (2) - an application or appeal may not be brought if they have not first exhausted any available arbitral process of appeal or review and any available recourse under section 57 (correction of award or additional award)
Section 70(3) - must be brought within 28 days of date of award or outcome of Arb appeal or review
Section 52(4) – an award should contain reasons for award, but no sanctions if not. A Party can apply to Court for reasons under S.68.
Section 70(4) – Court may order Arb to state reasons for award in sufficient detail to enable the Court to properly consider
Section 70(5) – Court may make such further order as it thinks fit with respect of any additional costs
- & 6. Continued - When The Matter May Go to Court – if not determined by agreement or the arbitrator
Applications to the Court to Determine Costs
Section 63 (4) -
Section 64 (2) -
Section 28 (2) –
- & 6. Continued - When The Matter May Go to Court – if not determined by agreement or the arbitrator
Note: Usually dealt with by Costs Judge
Applications to the Court to Determine Costs
Section 63 (4) - the parties can apply to court (on notice), if costs not determined by agreement (they are free to agree as per S.63(1)) or by the arbitrator
Section 64 (2) - The court may then determine the matter
Section 28 (2) – Court may make any adjustments it sees fit
Misc.
CPR PD 47 –
S.89 Solicitors Act 1974 – Costs of proceedings before Arbitrator are ……..
Funding Permitted
Offers to Settle
Security for Costs
Interest
Misc
Halliburton v Chubb Bermuda Insurance (2020) - the judgment has re-emphasised the importance of
Misc.
CPR PD 47 – Bill of Costs to follow format in precedents annexed
S.89 Solicitors Act 1974 – Costs of proceedings before Arbitrator are contentious
Funding Permitted
CFA’s, Max. Success Fess 100%
DBA’s (but not other contingency fee agreements)
3rd Party Funding (not regulated by law but litigation funders adopted Code of Conduct)
Essar Oilfields Services Ltd v Norscot Rig Management (2016) – 3rd Party Funding costs recoverable in Arb, in principle
Offers to Settle
Similar to Part 36. Consequence is that normally entitled to costs from date of offer if award is less than offer (i.e. fail to beat offer)
Procedurally, normal for an award and costs to be considered at same time and existence of sealed offer to be brought to attention of Arb b4 he has reached decision or he may have to revise.
Security for Costs
S.38(3) – Allows Arb to order security be provided by Claimant (unless parties agree otherwise (S.38(2)) but not where Claimant resides outside UK, is a corporation, associate corporation or formed other than the law of the UK.
Discretionary – and must have regard to objectives of S.1 of AA 1996 – fair resolution and w/o unnecessary delay or expense
Factors to consider if counterclaiming defendant makes application:-
- whether counter claim or cross claim
- whether set-off and type of set-off
- whether parties are in jurisdiction
Interest
S.49(1) – parties can agree on the power of the Arb to award interest
S.49(3) – unless otherwise agreed, Arb has discretion to award simple or compound interests, rates and dates run from
S.49(4) – can award interest from date of award until payment
Misc
Halliburton v Chubb Bermuda Insurance (2020) - the judgment has re-emphasised the importance of arbitrator impartiality in English-seated arbitration (not a costs specific judgment)
