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Conciliation & arbitration (part 3) - Coggle Diagram
Conciliation & arbitration (part 3)
Arbitration
A form of ADR whereby all sides agree to let a neutral 3rd party (the arbitrator) decide the case between them on a binding basis
How it works
Documents containing a each party's submissions in arbitration proceedings is called a
memorial
and the judgment of the arbitration panel is called an
award
Places where arbitration takes place is called a
seat of arbitration
and the law according to which arbitration panel must decide the case is called a
governing law
The number of arbitrators, seat of arbitration and governing laws are usually agreed upon by parties in the clause providing for arbitration
Usually provided for contractual agreements between parties
Such clauses are known as the "Scott v Avery clauses" after the case of Scott v Avery
The rules in Scott v Avery is now known as s9(1) and 9(4) of the Arbitration Act 1996
The exception to this is when the courts are satisfied that arbitration agreement fails
-
Scott v Avery (1855):
HoL held that if parties have provided for a clause to go for arbitration in the contract between them then the court will give effect to it
The arbitrator's decision is legally binding and can be enforced via court process (its like a decision of a court)
The arbitrator may be a lawyer/expert in the field of the dispute
There can be one sole arbitrator or a panel of several. An arbitral panel usually has between 1-3 arbitrators
Following matters are most often referred to arbitration: Intellectual property, competition law, statutory claims, maritime/shipping, construction/building
Conciliation
Procedurally similar to mediation and is increasingly known as a sub-species of mediation
An assigned conciliator takes a more active role in finding a "middle ground" solution to the dispute between parties
Usually applicable for employment matters
Unfair dismissals:
Conciliation in unfair dismissals are mainly successful, where 2/3 of cases are settled by conciliation before being referred to the Employment Tribunal
But process can cause unfairness between employer and employee: due to difference of resources available for the 2 parties, so conciliator fails to achieve neutrality to help parties with weaker bargaining power
A study was done on unfair dismissals cases where tribunals awards more than conciliation
Advantages of arbitration
List of suitable arbitrators according to each commercial field are kept by the Chartered Institutes of Arbitrators (also accredits arbitrators)
Once appointed, arbitrators must act impartial, judicial manner like a judge
There is still the supervisory jurisdiction of the courts if the arbitrator seriously misapplies the law
Disadvantages of arbitration
Fees are high, so the costs of arbitration may even exceed litigation
Whatever decided in arbitration is confidential to parties involved - only parts of the decision are released to the public if necessary with consent of the parties
Arbitration is binding: does not have conciliatory effect of mediation (there's a clear winner/loser, just like going to court)
Although it is meant to be consensual at the point of contracting, one party may feel "obliged" to agree on an arbitration clause to get the rest of the contract done (can be unfair)
Arbitration Act 1996
Important sections
Arbitrator can rule of questions relating to its own jurisdiction i.e. whether there is valid arbitration agreement (s.30)
When parties include an arbitration clause in their contract, courts will give effect to it and may stay any court proceedings commenced by any party to the contract (s.9-11)
Courts may compel any party to comply with an order by a arbitrator (s.43)
Courts can exercise supervisory role over arbitration by revoking appointment of an arbitrator where he/she has not acted impartially/refused to conduct proceedings properly (s.24)
Courts may need if necessary to decide preliminary question of law arising in the arbitration proceedings so that arbitration can proceed on that basis (s.45)
An arbitrator's award may be enforced in the same way as a court judgement (s.66)
What it does
Adopted to promote the use of commercial arbitration in the UK
Governs all arbitration 'seated' in England and Northern Ireland
Sets out the clear frameworks for the use of arbitration in the UK
Repeals earlier legal framework on arbitration e.g. Arbitration Acts 1975 and 1979
Key principles of the Act's framework
To facilitate "fair resolution of disputes by an impartial tribunals without unnecessary delay and expense"
Parties should be free to decide how their disputes are resolved, subject only to such safeguards necessary in the public interest
In matters governed by the Act, the court should not intervene except as provided under the Act
When can you appeal an arbitrator's decision?
Arbitration should not be a mere precursor to continued litigation before the courts (that delays resolution of the matter
Arbitration Act 1996 provides limited groups on which to challenge an arbitration decision on appeal
When arbitrator/panel of arbitrators exceed jurisdiction (s.67)
Parties may appeal on a point of law arising from the decision of the arbitrator (s.69). But if they have agreed beforehand that there should be no such appeal, = no appeal
There is serious procedural irregularity in the arbitration leading to unfairness (s.68)
Further encouragement of ADR
Court of Appeal Mediation Scheme:
If parties agree to mediate, CA will arrange mediation and mediators provide their service for free
Commercial Court ADR Scheme:
The Commercial Court (part of the Queens's Bench Division, HC) issues ADR orders for commercial disputes which it regards as suitable as ADR
If ADR is not used/unsuccessful, the Court will need parties to explain in writing why it failed
Ministry of Justice Small Claims Mediation Service:
The MoJ runs a telephone-based mediation service for small claims (those involving less than $10,000) operated by Ministry staff who have received mediation training
If mediation unsuccessful, claim is referred back to small claims track of the County Court