Arbitration*

Question 1

Define Arbitration.

Answer 1

An independent arbitrator will produce a legally binding decision for the parties.

Question 2

How does s.1 of the Arbitration Act 1996 define arbitration?

Answer 2

To obtain the fair resolution… without unnecessary delay or expense.

Question 3

Define a Scott v. Avery Clause.

Answer 3

A contractual clause that states the company will use arbitration should a dispute arise.

Question 4

What does s.9 of the Arbitration Act 1996 provide?

Answer 4

Provides the means for a Scott v. Avery clause to be enforced.

Question 5

What organisation will provide an arbitrator if the parties cannot agree?

Answer 5

The Institute for Arbitrators.

Question 6

Is an appeal route available for arbitration and where does the appeal go if so?

Answer 6

Yes. S.69 of the Arbitration Act 1996 allows the award to be appealed in the QBD of the High Court.

Question 6

Is an appeal route available for arbitration and where does the appeal go if so?

Answer 6

Yes. S.69 of the Arbitration Act 1996 allows the award to be appealed in the QBD of the High Court.

Question 7

Give some advantages of Arbitration.

Answer 7

• The arbitrator may be expert in a particular field - adds practical knowledge rather than legal knowledge - may be more useful in a setting that focuses less on law but more on facts and the conduct of each party.
• The decision may be appealed as s.69 of the Arbitration Act 1996 makes provision for this - however only go to the GBD - limited appeal routes - appeals may be expensive - defeating the object of arbitration.
• Arbitration is more flexible than litigation as both parties are able to select a mutually convenient date - furthermore they are able to opt for their own arbitrator of have the Institute of Arbitrators assign one - compared to litigation where there is no choice of date and judge.
• Arbitration is a private process as the media have little access to proceedings - unlike court where the media have the tendency to share sensitive info about the company to the public - may be damaging and deter shareholders.

Question 8

Give some disadvantages of arbitration.

Answer 8

• If arbitration fails to work, the only other option is a court setting - arbitration would be a waste of time.
• No legal aid is available - though this would only matter in small disputes - this is of no concern regarding larger companies - in which case, arbitration is cheaper anyway.
• Few appeal routes available as s.69 Arbitration Act 1996 states they will go to the QBD of the High Court - less flexible option than litigation - as appeals go to the QBD it may be expensive.
• Some cases may involve an issue an arbitrator isn’t qualified to resolve - thus will go to court - arbitration may be a waste of time.