Welcome to our free industry leading guide on Arbitration and Dispute Resolution. Whatever side of a dispute you are on - our expert team can give you the help you need to resolve the issues you have. Call today to speak to one of our friendly team.
Since 2002, Francis Wilks & Jones solicitors have been helping clients successfully resolve their disputes, whatever the nature, size or side of the claim they are on.
One solution might be taking the dispute for formal Arbitration and our brilliant team can guide you through this process from start to finish. Whether it is a domestic claim or an international arbitration – we can help achieve a successful outcome.
This comprehensive guide will take you through the key aspects of the Arbitration process and provide links to other useful Dispute Resolution content on our website.
For more immediate help – call one of our expert dispute resolution lawyers today for a free consultation. There are very few situations we haven’t come across since 2002. Our experience can help you too.
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Arbitration – an overview
In England and Wales, legal arbitration refers to a method of resolving disputes outside of the traditional court system. It involves the parties to a dispute agreeing to submit their disagreement to an impartial third party, known as an Arbitrator or a panel of arbitrators, who will make a binding decision on the matter. The decision of the arbitrator is known as an “award.”
Arbitration Act 1996
Arbitration is governed by the Arbitration Act 1996 in England and Wales. It provides a flexible and more private alternative to litigation, which is the process of resolving disputes through the formal court system. While litigation involves presenting the case before a judge in a court of law, arbitration clause allows the parties to choose their arbitrator and determine the procedural rules that will apply.
Arbitration is a private and consensual system of dispute resolution.
Key differences between arbitration and litigation
Set out below are some key differences between legal arbitration and litigation in the English courts
1. Choice of decision maker. In litigation claims, a judge is appointed by the court to hear the case and make a judgment. In arbitration, the parties have more control over the decision-making process as they can select the arbitrator(s) based on their expertise and experience in the relevant field.
2. Procedure. Litigation follows formal court procedures as set out in the Civil Procedure Rules. These can involve various stages such as filing pleadings, gathering evidence, disclosure, preparation of witness statement, and cross-examining witnesses at trial.
Arbitration allows for more flexibility, and the parties can agree on the procedure to be followed, including the extent of document disclosure, witness statements, and the use of experts.
3. Privacy and confidentiality. Court proceedings are generally open to the public, which means anyone can attend and access the records.
Arbitration, on the other hand, offers privacy and confidentiality, as the process is usually conducted behind closed doors, and the details of the dispute are not made public unless the parties agree otherwise.
As a result of arbitration being private and confidential.
- no external reports or connected parties can visit hearings or seek copies of judgments and orders,
- the decision made does not provide a “judgment” which could potentially bind other related disputes; and
- it avoids publicity for the paying party as to any alleged wrongs done by them.
For this reason, arbitration is an important alternative to formal litigation on, especially when a dispute exists between international parties and the strength, coherency and consistency of UK law is needed to help resolve the dispute, but without unwanted publicity.
4. Speed and efficiency. Arbitration enforcement can often be faster than litigation because the parties have more control over the process and can set the timetable. Additionally, the workload of the courts can cause delays in litigation, whereas arbitration allows the parties to avoid potential backlog.
5. Enforceability. Awards made in arbitration are generally enforceable in the same way as court judgments, both domestically and internationally, under the New York Convention. This facilitates the enforcement of arbitration awards across different jurisdictions. However, litigation judgments can be enforced more directly within the jurisdiction where they were issued and can be harder to enforce outside the jurisdiction where the Court Judgement was obtained.
6. Appeal. In general, arbitration awards are final and binding, with limited grounds for appeal. On the other hand, decisions made in litigation can be appealed to higher courts, which can lead to a longer and more uncertain resolution process.
It’s important to note that arbitration is not suitable for all types of disputes. Some matters, such as certain family law disputes and criminal cases, are generally not subject to arbitration. Additionally, parties usually need to have a valid arbitration agreement in place before a dispute arises to opt for arbitration as a method of resolution.
Arbitration is a way of resolving disputes without the cost and expense of formal litigation. Let our brilliant team help you see whether arbitration can work for you – whichever side of the dispute you are on. Call us today.
Arbitration can be an ideal to resolve a wide range of disputes. Our brilliant team at FWJ can help find the right dispute resolution process for you – call us today.
Common disputes resolved by Arbitration
In England and Wales, arbitration is commonly used for a wide range of commercial disputes. The flexibility, efficiency, and confidentiality offered by arbitration make it an attractive option for parties seeking to resolve their disputes outside of the court system.
While the Arbitration Act 1996 provides the general framework for arbitration, there are no specific statutory restrictions on the types of disputes that can be subject to arbitration.
Some of the most common disputes that are often subject to arbitration:
- Commercial contracts. Arbitration negotiation is frequently used to resolve disputes arising from commercial contracts, including disputes related to the sale of goods, services, construction projects, joint ventures, distribution agreements, and international trade. The parties can agree to arbitration either through an arbitration agreement contained within the contract or by subsequently entering into a separate arbitration agreement.
- Construction and engineering. Construction and engineering disputes are commonly resolved through arbitration. The construction industry often includes arbitration clauses in contracts to provide a mechanism for resolving disputes that may arise during or after a construction project. The most widely used arbitration rules in this sector are those of the Institution of Civil Engineers (ICE) and the International Chamber of Commerce (ICC).
- International trade. Arbitration process is frequently utilised in disputes arising from international trade transactions, such as disputes related to the sale of goods, shipping, financing, and international commercial agreements. The parties involved in cross-border transactions often choose arbitration to avoid potential difficulties associated with litigation in multiple jurisdictions.
- Insurance and reinsurance. Disputes arising from insurance and reinsurance contracts are commonly resolved through arbitration. The London insurance market, known as Lloyd’s of London, has a long-established tradition of using arbitration to settle insurance-related disputes. The arbitration rules of the Chartered Institute of Arbitrators (CIArb) and other specialised institutions are often used in this sector.
- Intellectual property. While intellectual property disputes can be subject to litigation, parties may also choose arbitration enforcement as a means of resolving such disputes. The World Intellectual Property Organisation (WIPO) offers specialised arbitration rules for intellectual property disputes, providing a forum for resolving disputes related to patents, trademarks, copyrights, and other intellectual property rights.
Generally speaking, most disputes are arbitrable and national laws will determine what may or may not be capable of settlement by arbitration.
Each dispute will therefore have to be analysed on a case by case basis, as it may be affected by a state’s public policy at the time.
For that reason, some types of claims need to be looked at in greater detail to determine if they are arbitrable.
As set out above, typical disputes often concern
- The grant of patents, trade marks or copyright.
- Antitrust or competition laws.
- Securities transactions.
- Bribery and corruption.
- Natural resources.
- Corporate governance. For example, in the Netherlands, a dispute that dealt with the validity of a shareholders’ meeting was not held to be arbitrable by the Dutch courts, whereas the laws of England and Wales have affirmed the opposite. National law is therefore important.
Claims not suitable for Arbitration
Some disputes can only be settled by a court, or the remedies requested granted by a court. For example
- Land contracts. In England and Wales, under the Arbitration Act 1996, an arbitral tribunal does not have the power to order specific performance of a contract if it relates to land.
- Certain statutory remedies. Specific statutory remedies or basis of a cause of action cannot be subject to Arbitration. The reason for this is because the opponents are of a very different standing – one may be passive and unresponsive, whilst one has suffered a loss or wants reparation for a wrong. In these circumstances the passive party benefits as s/he has no incentive to enter into negotiations or arbitrate, as they currently have the best result.
- Family law disputes. Family law matters, such as divorce, child custody, and child support, are generally not subject to arbitration. Family law disputes are primarily dealt with by the family courts, and arbitration is not commonly used in this context.
- Statutory provisions. An Arbitration Tribunal cannot make orders under statutory provisions as they do not have the jurisdiction vested in the courts to make such awards. This is in part because they are not part of the court process but also because they are not subject to the Civil Procedure Rules or human rights and other related obligations that are adopted in England and Wales (and many other international jurisdictions).
- Public interest disputes. Certain matters involving public interest or public policy may not be suitable for arbitration England Law. For example, disputes relating to the public enforcement of competition law or criminal offenses are typically excluded from arbitration.
- Statutory disputes. Some disputes that are specifically governed by particular statutes may have restrictions on arbitration. For instance, disputes related to intellectual property rights, certain landlord and tenant matters, and certain insolvency issues may have specific statutory provisions that restrict or prohibit arbitration.
Early resolution of a dispute is always advisable
It is an unfortunate fact of life that everyone argues from time to time. Whether in family or business life, often the smallest of issues can quickly spiral into something neither side intended at the outset. In business – if you add in the complexities of different corporations, countries, cultures and political systems, it can become very difficult to resolve these issues unless there is access to a proven dispute resolution mechanism.
Arbitration can provide the answer for many businesses facing these types of complex issues.
And our team at FWJ can provide the advice you need to help you resolve your commercial or business dispute – whether as alleged wrongdoer or the wronged – and in any forum.
Rights to Arbitration
If you are in dispute with another party, and either you have an agreement to arbitrate disputes or it is more cost effective (and better for business) to get matters resolved quickly, then Arbitration is the perfect forum to resolve disputes which the parties must accept as having been independently resolved.
Specific instances of Arbitration – commercial & business agreements
If there is a business agreement, especially an international business agreement in respect of a commercial venture, then it will almost certainly have an Arbitration clause which the parties will be required to abide by.
If this applies to your dispute, then arbitration must be adopted. In England & Wales, if parties ignore this obligation then the other party can apply to the Court to stay the legal proceedings pending the conclusion of the Arbitration.
Arguably, in such instances the wasted costs of the legal proceedings can be sought by the defending party in such circumstances.
Resolving disputes by arbitration
Ideally, in a perfect world, everyone would sit down together and find a solution to their disputes.
When the disputes arise between businesses, early resolution is positively encouraged in the English & Welsh legal system by reference to
- Alternate Dispute Resolution (“ADR”) and
- the Pre-Action Protocols embedded into the Civil Procedure Rules 1998 (as amended), which is the main procedural guidance book for navigating our legal system of litigation in the Courts to resolve business disputes.
However, for many parties neither negotiation (which often reaches a stalemate) nor court proceedings (which are lengthy are expensive, although just) are satisfactory options.
In these circumstances, and especially for large companies and companies involved in international trade and international disputes, the best option (by pre-existing agreement or alternatively by agreement when the dispute arises) is Arbitration.
At FWJ we can advise and assist you on any matter related to Arbitration. If you have concerns as to whether or not a dispute may be subject to arbitration, please contact us for a confidential discussion, and we would be delighted to assist.
Arbitration can be a brilliant way of resolving disputes without the cost and expense of formal litigation. Our superb team can see whether arbitration can work for you – whichever side of the dispute you are on. Call us today.
An arbitration agreement is a contractual provision or a separate agreement between parties that establishes their intention to resolve any disputes arising between them through arbitration rather than litigation. It is a legally binding agreement that binds the parties to submit their disputes to arbitration and outlines the terms and conditions of the arbitration process. The existence of an arbitration agreement is crucial for initiating arbitration proceedings.
An arbitration agreement can come about in 3 main ways:
- Express agreement. Parties may include an arbitration clause within a broader contract. An arbitration clause is a provision that specifies that any disputes arising from the contract will be resolved through arbitration. The clause should clearly indicate the intention of the parties to arbitrate and may specify the rules or governing body under which the arbitration will take place. This is quite a common is a clause within a commercial contract which directs the parties to resolve their disputes by arbitration.
- Submission agreement. The second is a submission agreement which is a standalone document that is generally used after a dispute has arisen. This is by its nature longer than an arbitration clause, as it details the dispute, whereas an arbitration agreement usually deals with disputes in the future, and so does not need to go into much detail due to the unknown.
The parties enter into a separate agreement solely for the purpose of establishing an arbitration arrangement. This agreement can be in the form of a standalone contract or a memorandum of understanding specifically focused on arbitration.
- International treaty. The final way an arbitration agreement may come about is in an international treaty. Bilateral investment treaties, commonly known as BITs, are agreements made between countries with various rights and undertakings for the promotion and protection of private investments. These bits usually contain a dispute resolution clause that allows investors to arbitrate disputes against the state in which its investment is based.
The arbitration agreement unsurprisingly is the foundation of arbitrations, and it is important to get it drafted correctly, if it is within your control.
The formation and validity of an arbitration agreement are governed by the Arbitration Act 1996 in England and Wales. The Act provides that an arbitration agreement should be in writing, whether in a document signed by the parties, in an exchange of letters, emails, or other written communication, or in a recorded oral agreement. The writing requirement aims to ensure that the agreement is clear and definite, and the parties have a clear understanding of their commitment to arbitration.
The Arbitration Act 1996 also recognises that an arbitration agreement can be implied or inferred from the conduct of the parties. This means that even if there is no explicit written agreement, if the parties’ behaviour demonstrates a mutual intention to arbitrate, an arbitration agreement may be deemed to exist.
It is important to carefully review the specific legislation, contractual agreements, and any industry-specific rules that may apply to determine the requirements for a valid arbitration agreement in a particular context. Consulting legal experts such as our team at FWJ can provide guidance on drafting and interpreting arbitration agreements to ensure their enforceability and effectiveness.
Whatever your Arbitration enquiry – our team has the expertise to help you. FWJ are experienced in helping clients domestically and internationally resolve their disputes through the use of Arbitration or other types of Dispute Resolution mechanism. No matter what your issues – call our team of experts today and we can help
Arbitration can be a brilliant way of resolving disputes without the cost and expense of formal litigation. Our superb team can see whether arbitration can work for you – whichever side of the dispute you are on. Call us today.
Agreement to arbitrate is needed
Arbitration, despite being a dispute resolution procedure, requires an agreement to arbitrate from all sides to a dispute. You cannot force a party into arbitration proceedings, although conversely a party can be required to engage in Arbitration if they are contractually bound to do so.
In England and Wales, the parties to a dispute formally agree to arbitrate by entering into an arbitration agreement. The arbitration agreement establishes their mutual consent to resolve any disputes arising between them through arbitration. It can be a standalone agreement or a provision within a broader contract.
The steps to commence the arbitration process
The steps to commence the arbitration process and the voluntary or mandatory nature of arbitration depend on the specific circumstances and the agreement between the parties. Arbitration is generally a voluntary process in England and Wales. It requires the consent of all parties involved in the dispute. The parties must agree to submit their disputes to arbitration either through an arbitration clause in their contract or by entering into a separate agreement to arbitrate. Without the agreement of all parties, arbitration cannot be compelled.
Once an arbitration agreement is in place, the process of commencing arbitration typically involves the following steps:
- Notice of Arbitration. The party seeking arbitration will typically serve a Notice of Arbitration on the other party/parties. The Notice of Arbitration informs the other party that they are invoking the arbitration clause and initiating the arbitration process. The Notice of Arbitration may include details such as the nature of the dispute, the relief sought, and the arbitrator or arbitration institution proposed.
- Appointment of Arbitrator(s). If the arbitration agreement specifies the appointment procedure for the arbitrator(s), the parties will follow that procedure. If not, they may negotiate and agree on the appointment of a specific arbitrator or a panel of arbitrators. Alternatively, the parties may choose to appoint arbitrators through an arbitration institution or follow the default procedures outlined in the Arbitration Act 1996.
- Response and Statement of Defence. The other party/parties have the opportunity to respond to the Notice of Arbitration by submitting a Statement of Defence. This statement outlines their position and any counterclaims or defences they wish to raise.
- Arbitration Proceedings. Once the arbitrator(s) are appointed, the arbitration proceedings will commence. The proceedings include the exchange of statements, submission of evidence, witness testimony, and oral arguments. The specific procedural rules and timelines will depend on the agreement between the parties and any applicable institutional rules or the Arbitration Act 1996.
- Arbitration Award. At the conclusion of the proceedings, the arbitrator(s) will issue an arbitration award. The award is a binding decision on the dispute, similar to a court judgment. The Arbitration Act 1996 provides that the award should be in writing and reasoned unless the parties agree otherwise.
It’s important to note that the Arbitration Act 1996 provides a framework for arbitration in England and Wales but allows parties to have autonomy and flexibility in determining the procedural rules and process. The specific provisions of the arbitration agreement and any applicable institutional rules or legislation will govern the details of the arbitration process.
An Arbitration Tribunal has no inherent jurisdiction to decide a dispute.
How do parties agree to arbitrate?
Often it is the case that parties to a dispute have already sat down and tried to resolve a dispute, only to find that they become deadlocked. This in turn can lead to each side instructing lawyers and other professionals to enter into quasi-arbitration. This may lead to threats of litigation and increase the overall prospects of formal legal proceedings.
For some disputes this may be the appropriate route. For others it is not – court proceedings are expensive and can make the dispute more painful, time consuming and costly.
Instead the parties could agree to arbitrate. There are generally two ways to agree to arbitrate, both of which are consensual, as follows:
- Arbitration clauses within commercial agreements.
- Voluntary arbitration
In either of the above scenarios, there must be an element of consensual agreement, a will to settle the dispute and ultimately a likely acknowledgement of some (but not all) of the issues in dispute).
Most commercial agreements, particularly those where disputes may arise during an ongoing business relationship, contain an arbitration clause. The commercial agreement is entered into voluntarily by both parties, who consent (in advance) for any future dispute to be subject to arbitration.
This agreement to arbitrate is a clause that survives the initial contract, and unless there is inconsistency, uncertainty or inoperability, will be binding and effective on the parties in their consequential dealings.
These consequential dealings could include:
- Future commercial dealings (unless the contract itself, including the arbitration clause, is brought to an end) or
- Associated contracts, including settlement agreements which do not necessarily require an express arbitration clause (if one is embedded in the original contract which provided for arbitration).
If the existence of an arbitration clause is disputed, most national courts will however try to give meaning to an arbitration clause in an attempt to try to uphold it, by reference to what they consider the true intention of the parties.
The ideal of arbitration as a consensual, neutral forum (which incidentally is also self-funding) is of great appeal to the courts, in todays’ justice system where increased engagement in mediation, negotiation and, ultimately, arbitration are encouraged to mitigate the in exhaustive demand for use of the Courts.
There is no requirement for a pre-existing agreement, with an arbitration clause, to exist for parties to engage in a dispute resolution process which is efficient and likely less contentious.
If you have a dispute with another, whether that be in terms of the amount owed or any incidental terms of agreement (and whether any such terms were agreed) then you may wish to consider arbitration as a way to resolve this dispute.
The parties must consent to arbitration.
An Arbitration Tribunal does not have authority to decide any dispute without the authority of both or all parties.
If the parties can agree on this, and the practical aspects of the Arbitration (including identification of the Arbitrator) then once agreed matters proceed – facts are submitted, evidence is presented and an Arbitrator ultimately makes his decision on the basis of the information before him.
- The identity of the Arbitrator is something often of great importance and at Francis Wilks & Jones we can assist with this with this important part of the process.
- In addition, if you are currently involved in legal proceedings relating to a dispute and want a swifter resolution to these proceedings, you may wish to consider Arbitration.
The court can be required (providing both parties consent) to suspend the litigation proceedings (as with all forms of ADR, including for mediation) to enable Arbitration to occur.
Drafting arbitration clauses and disputes
It is not unusual for one party to have agreed to an arbitration clause in a commercial agreement without properly understanding what they are committing to. Alternatively, they may dispute that such a clause was relevant to the dispute at hand.
These defects are most often raised when one party tries to litigate the dispute, and the other party instead seeks to rely on the arbitration agreement.
It is vitally important therefore that any arbitration clause is drafted in clear and concise ways. For example,
The London Court of International Arbitration has as selection of recommended clauses that may be appropriate to your agreement.
Alternatively, you may have a demand for a bespoke arbitration clause that is more relevant to your industry or the circumstances of your business arrangement.
If you are considering relying on an arbitration clause, or seeking assistance with drafting one, and have concerns as to whether or not it is effective, at Francis Wilks & Jones we can assist you with understanding the risks or finding the resolution to this dilemma.
The importance of a well drafted Arbitration clause cannot be underestimated. It can help save considerable time and costs, as it ensures fewer areas of dispute with how it is to be interpreted. Our brilliant team is here to help.
An arbitration clause within an agreement should contain certain elements to ensure its enforceability. The key considerations for an enforceable arbitration clause include clarity, specificity, and compliance with legal requirements.
Key terms to include
While there is no rigid template for an arbitration clause, here are some important elements that should be included
- Intent to arbitrate. The arbitration clause should clearly express the parties’ intention to submit any disputes arising from the agreement to arbitration. The clause should use clear and unambiguous language, explicitly stating that the parties agree to resolve disputes through arbitration rather than litigation.
- Scope of disputes. The arbitration clause should define the scope of disputes subject to arbitration. It can be broad, covering all disputes arising from or in connection with the agreement, or it can be more specific, limiting arbitration to certain types of disputes. The clause should clearly specify the types of claims, controversies, or issues that fall within the scope of the arbitration agreement. And it should set out that all future and/or existing disputes are covered. The New York Convention provides clarity and confirmation for this to parties – “all or any differences which have arisen or which may arise between them” (emphasis added).
- Designation of arbitration rules. The arbitration clause should identify the set of arbitration rules that will govern the arbitration proceedings. Parties can choose established institutional rules such as those provided by the International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA), or the rules of specialised institutions if relevant to the specific industry. Alternatively, parties can opt for ad hoc arbitration, where they define the procedural rules themselves.
- Number and appointment of Arbitrators. The arbitration clause should indicate the number of arbitrators to be appointed. Parties can opt for a single arbitrator or a panel of arbitrators. If multiple arbitrators are to be appointed, the clause should outline the procedure for their appointment, such as the method of selection or the use of an arbitration institution.
- Seat or place of arbitration. The arbitration clause should specify the seat or place of arbitration. The seat determines the legal framework under which the arbitration is conducted, including the supervisory court and the applicable procedural law. The choice of seat can have implications for the enforceability of the arbitration award.
- Governing law. The arbitration clause should identify the governing law that will govern the arbitration agreement. This is separate from the seat of arbitration and determines the law that the arbitrator(s) will apply in deciding the substantive issues of the dispute.
- Language of arbitration. The arbitration clause can specify the language(s) to be used in the arbitration proceedings. This can include the language of the arbitration agreement, submissions, evidence, and the final award.
- That the dispute is arbitral. i.e. that it is capable of being settled by arbitration. It is vital that the dispute is covered by the clause. If not, any award will not be enforceable. Generally issues of patents, antitrust and competition laws, securities, insolvency, bribery and corruption, fraud, natural resources, and corporate governance need to be looked at closely to ensure that they are arbitrable in the jurisdiction the dispute is taking place at.
- There is a mechanism to commence the arbitration. This differs from ad hoc arbitrations to institutional arbitrations, but usually will take the form of a formal notice. This mechanism should also include the method by which the arbitrators are chosen, and the number of arbitrators.
Many arbitral institutions such as the LCIA or the ICC have model clauses which parties are encouraged to follow. For example the ICC rules suggest the following
“All disputes arising out of or in connection with the present contract shall be submitted to the International Court of Arbitration of the International Chamber of Commerce and shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.”
The Arbitration Act 1996.
In terms of relevant legislation, the key statutory instrument governing arbitration in England and Wales is the Arbitration Act 1996. The Act provides the legal framework for the enforcement and conduct of arbitration proceedings. It sets out the requirements for a valid arbitration agreement, the powers of the arbitrators, and the recognition and enforcement of arbitral awards.
Additionally, parties should consider any industry-specific legislation or regulations that may be applicable to their particular agreement or dispute. They should also review the rules of the chosen arbitration institution, if applicable, as those rules may prescribe certain requirements or provisions that should be included in the arbitration clause.
Whatever your Arbitration enquiry – our team has the expertise to help you. FWJ are experienced in helping clients domestically and internationally deal with Arbitration clauses and help resolve disputes as quickly and commercially as possible. No matter what your issues – call our team of experts today and we can help.
Types of Arbitration
Arbitration encompasses a wide range of disputes. Whatever the nature of your dispute and whichever side you are on – we have the team to help.
In England & Wales, there are different types of arbitration available for both domestic disputes and international arbitration. The types of arbitration can vary based on factors such as the nature of the dispute, the location of the parties, and their preferences.
Here are the key types of arbitration:
Ad Hoc Arbitration.
- Ad hoc arbitration refers to arbitration proceedings that are conducted without the involvement of any specific arbitration institution. The parties have the freedom to determine the procedural rules, including the appointment of arbitrators, the conduct of proceedings, and the enforcement of the award.
- The Arbitration Act 1996 in England and Wales governs ad hoc domestic arbitrations.
Institutional arbitration involves conducting arbitration proceedings under the rules and administration of a recognised arbitration institution. These institutions provide a framework and guidelines for the arbitration process, including the appointment of arbitrators, procedural rules, and administration of the case.
Examples of such institutions in England and Wales include,
- The London Court of International Arbitration (LCIA).
- The Chartered Institute of Arbitrators (CIArb).
1. International Commercial Arbitration.
International commercial arbitration involves the resolution of disputes arising from international commercial transactions. It is governed by the rules and principles of international arbitration, which may include the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration.
The Arbitration Act 1996 also provides a legal framework for international commercial arbitration in England and Wales.
2. Investor-State Arbitration.
Investor-state arbitration is a specific type of international arbitration that allows foreign investors to bring claims against host states for alleged violations of investment treaties. This type of arbitration typically arises from bilateral or multilateral investment treaties (BITs or MITs) and is governed by the relevant treaty provisions or the rules of international arbitration institutions. For example, Investor State Dispute Settlement (ISDS) is a form of arbitration that allows investors to bring claims in the foreign country that they are investing in.
International disputes are slightly more complex – as parties have to take into account additional factors such as the law of the contract, and the seat of the arbitration.
Relevant Legislation and Statutory Regime.
The primary legislation governing arbitration in England and Wales is the Arbitration Act 1996. This Act provides the legal framework for both domestic and international arbitration, including the recognition and enforcement of arbitration agreements and arbitral awards. The Act incorporates the UNCITRAL Model Law into English law, ensuring alignment with international standards for arbitration.
For international arbitration, England and Wales are also signatories to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This convention facilitates the enforcement of foreign arbitral awards in countries that are parties to the convention, promoting the international enforceability of arbitration awards.
In addition to the legislation, parties engaged in international arbitration may be subject to specific procedural rules of arbitration institutions. For example, the LCIA provides its own set of rules for the administration of arbitration, which parties can adopt by agreement.
It is important to consult the relevant legislation, international conventions, and institutional rules specific to the type of arbitration being pursued to understand the procedural requirements and legal framework applicable to a particular dispute. Seeking legal advice from arbitration specialists is recommended to ensure compliance with the relevant statutory regime and procedural rules.
Whatever your Arbitration enquiry – our team has the expertise to help. FWJ are experienced in helping both domestic and international clients resolve their Arbitration disputes in the UK & London. Don’t Delay – call our team of experts today.
England and Wales has historically been renowned for the strength of its legal system. This is especially so in London, which has a global reputation for justice built on its common law system. Based in the heart of London – our brilliant team is here to help.
The benefits of resolving international disputes by Arbitration in London are huge. Amongst these are:
- Common law expertise. This common law system originated all the way back in the reign of King Henry II in 1154-80 and has established a long body of precedence, which is the principle that a rule established in a previous case, i.e. a judicial decision is binding on the lower courts. It is a system that is recognised worldwide, deriving from England and Wales, with one third of the word’s population currently living in common law jurisdiction.
- Contract law expertise. Similarly, English contract law enjoys a well-established profile, and it is common to see international contracts governed by ‘the law of England and Wales’. In the context of international arbitration, this has led to demand in English qualified advocate to act on behalf of disputing parties, and English judges as arbitrators.
- London recognised for solving international disputes. Many factors have led to London becoming and remaining a significant ‘seat’ for international disputes, due to its internally recognised practice, its basis in English law, and high legal standards. Parties therefore not native to the United Kingdom often choose London as the neutral seat for the arbitration of their dispute.
- Neutral and experienced arbitrators. London has a pool of highly experienced and respected arbitrators from diverse legal backgrounds. Parties can have confidence in the expertise and impartiality of the arbitrators available in London, ensuring a fair resolution of their disputes.
- Arbitration friendly legal environment. England and Wales have a long-standing tradition of supporting arbitration. The Arbitration Act 1996 provides a modern and comprehensive legal framework for arbitration, offering parties flexibility and certainty in the arbitration process. The courts in England and Wales have a pro-arbitration approach and uphold the principle of party autonomy.
- Established Institutions. London is home to several reputable arbitration institutions, such as the London Court of International Arbitration (LCIA), which was established in 1892. These institutions provide administrative services, rules, and facilities for the conduct of arbitration proceedings, offering a recognised and reliable framework for parties.
- Expertise in Commercial Law. London is known for its expertise in commercial law and is a hub for international business. Many commercial transactions and contracts have English law as the governing law or choose London as the seat of arbitration. The availability of legal professionals experienced in complex commercial matters contributes to the effectiveness and efficiency of arbitration in London.
What is The London Court of International Arbitration?
The London Court of International Arbitration (LCIA) is a leading international institution based in London that offers various services to parties engaged in arbitration. It was established in 1892 and has a long history of facilitating arbitration in a wide range of sectors and jurisdictions.
- The LCIA’s services include appointing arbitrators, assisting with the administration of the arbitration, and providing facilities for hearings.
- The LCIA Rules provide a comprehensive set of procedural rules for the conduct of arbitration proceedings, addressing key aspects such as the appointment of arbitrators, conduct of the proceedings, and the making of awards.
By selecting the LCIA as the administering institution, parties benefit from its established reputation, experienced arbitrators, and efficient case management procedures.
The LCIA’s expertise and resources can help parties navigate the complexities of their international disputes, ensuring a fair and effective resolution.
It is important for parties to carefully review the LCIA Rules and seek legal advice to understand the specific requirements and procedures for arbitrating their international dispute in London.
- It has innovative and updated rules, as well as model clauses for arbitration agreements.
- Typically over 80% of LCIA cases are not of English nationality.
- The LCIA has access to an exceptional talent pool of arbitrators, and is available for use to all contracting parties, with no membership requirements.
- In 2020, the LCIA received 444 referrals, and administered 407 claims, with its rules widely praised by the parties.
Steps to ensure a dispute can be arbitrated in London
To ensure that an international dispute can be arbitrated in London, parties need to take certain steps:
- Choice of arbitration agreement. The parties should include an arbitration clause in their agreement that designates London as the seat of arbitration. This choice should be clearly expressed and agreed upon by all parties.
- Selection of Arbitration Institution. Parties can choose the London Court of International Arbitration (LCIA) as the administering institution for their arbitration. The LCIA provides rules and administrative support for the conduct of arbitration proceedings, ensuring a structured and efficient process.
Our brilliant team at FWJ are well versed in helping clients from all over the world in resolving their disputes in the London Court of International Arbitration. Or simply providing the necessary advice to help guide you to the outcome you desire. Call our team of experts today.
The Chartered Institute of Arbitrators
The Chartered Institute of Arbitrators (CIArb) is a professional body dedicated to promoting and facilitating the practice of arbitration and other alternative dispute resolution (ADR) methods. It was formed in 1915 and has since grown into a leading global organisation in the field of dispute resolution.
The CIArb plays a vital role in the field of arbitration in England and Wales and internationally. Some of the key aspects are set out below.
- Professional membership and qualifications. The CIArb offers professional membership and qualifications to individuals interested in pursuing a career in arbitration and ADR. They provide training, education, and professional development opportunities to enhance knowledge and skills in dispute resolution.
- Dispute resolution services. The CIArb provides various services to parties engaged in disputes. They can act as appointing authority, helping parties to appoint arbitrators or mediators. They also offer dispute resolution facilities and support, such as hearing venues and administrative assistance.
- International reach and influence. The CIArb has a global presence with branches and members worldwide. It promotes the use of arbitration and ADR as effective means of resolving disputes globally. The CIArb actively engages with governments, organisations, and institutions to shape policy, legislation, and best practices in the field.
- Code of professional and ethical conduct. The The Chartered Institute of Arbitrators (CIArb) is bound by its Code of Professional and Ethical Conduct, which sets out the standards of integrity and professionalism expected from its members. The Code provides guidance on issues such as independence, impartiality, confidentiality, and the duty to act in the best interests of the parties.
- Appointment of arbitrators and mediators. The CIArb maintains a panel of trained and qualified arbitrators and mediators. Parties can engage with the CIArb to seek assistance in appointing arbitrators or mediators who meet the specific requirements of their dispute. The CIArb provides a rigorous selection process to ensure the competence and expertise of its panel members.
The CIArb is not specifically governed by legislation but operates under its own governance documents, including its Royal Charter, Bye-Laws, and Regulations. These documents outline the structure, governance, and responsibilities of the CIArb.
Benefits of engaging with the CIArb
Engaging with the CIArb can bring many benefits when it comes to the arbitration of disputes, such as
- Professional Standards. The CIArb sets high professional standards for its members, ensuring that those engaged in dispute resolution have the necessary knowledge, skills, and ethical conduct.
- Expertise and networking. Through its membership and training programs, the CIArb provides access to a network of experienced professionals in the field of arbitration and ADR. Engaging with the CIArb can facilitate connections with experts, practitioners, and thought leaders in the industry.
- Dispute resolution assistance. The CIArb’s services, such as appointment assistance and dispute resolution facilities, can provide practical support to parties engaged in arbitration or other alternative dispute resolution (ADR) methods.
How to become a member of CIArb
To become a member of the CIArb, individuals must meet certain criteria, including completing relevant training and demonstrating competence in the field. The CIArb offers different levels of membership and qualifications, such as Associate, Member, Fellow, and Chartered Arbitrator or Mediator. The process for appointment to the CIArb involves fulfilling the membership requirements and demonstrating expertise and experience in dispute resolution.
London location important
London is home to the Chartered Institute of Arbitrators, or CIARB as it is often known.
- It is a global centre for the practice and profession of ADR, with an extensive network.
- there are some 17,000 plus members across 149 countries and 42 branches of the CIARB.
This network allows for the proliferation of ideas, support, advice and guidance for all members, which gives clients the best chance to find specialist counsel, a knowledgeable tribunal and venue for their dispute.
Whatever your Arbitration enquiry – our team has the expertise to help. FWJ are experienced in helping clients from all over the world resolving their disputes, whether it is in the London Court of International Arbitration or elsewhere. Call our team of experts today.
The New York Convention
More formally known as the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the New York Convention 1958 (which came into force 7 June 1959) is arguably the most important factor in the viability and effectiveness of international commercial arbitration.
Practical effect of the New York Convention
As any lawyer will tell their client, there is usually no good commercial reason to sue “a man of straw”. Put simply, there is no point bringing any proceedings if you cannot enforce them. What the New York Convention does is create a system of arbitration enforcement that is recognised worldwide. There are 168 parties to the New York Convention, which is far more than any other treaty or convention that recognises foreign judgments.
Practically speaking, what this means is that if a party that is a member or located in a member state that is a signatory of the New York Convention, that Award will be automatically recognised and enforceable in other contracting states. Thus, if a losing party does not voluntarily meet the Award against it, the winning party would be able to enforce that award locally.
Key aspects of the New York Convention
These are as follows
- Recognition and enforcement. The New York Convention facilitates the recognition and enforcement of arbitral awards across national borders. It requires signatory countries to recognise and enforce arbitral awards made in other member states. This means that an award granted in one member state can be enforced in another member state, subject to limited grounds for refusal.
- Wide global application. The New York Convention has achieved broad international acceptance, with over 160 countries being party to the Convention. This widespread adoption provides a unified framework for the enforcement of arbitral awards globally, promoting the finality and effectiveness of the arbitral process.
- Binding obligations. Member states are obligated to recognise and enforce arbitral awards under the New York Convention. They must treat such awards as binding and enforceable in their domestic courts. This obligation enhances the enforceability of arbitral awards and gives parties confidence in choosing arbitration as a dispute resolution mechanism.
- Limited grounds for refusal. The New York Convention sets out limited grounds on which a court may refuse recognition and enforcement of an arbitral award. These grounds include incapacity of the parties, invalidity of the arbitration agreement, procedural irregularities, and public policy considerations. The Convention establishes a pro-enforcement bias, emphasising the principle of minimal intervention by national courts.
Viability of international contracts
The New York Convention is highly relevant and important when considering the viability of international commercial arbitration, including in England and Wales, for several reasons.
- Enforcement of awards. The Convention provides a framework for the enforcement of arbitral awards across borders. This is especially significant in international commercial disputes where parties may be located in different countries. The availability of enforcement mechanisms under the New York Convention increases the efficacy of international arbitration as a means of resolving cross-border disputes.
- Party confidence and predictability. The existence of the New York Convention instils confidence in parties engaging in international commercial arbitration. It provides predictability and reassurance that an arbitral award can be enforced in other member states, reducing the risk of non-compliance by the losing party.
- Choice of seat. The New York Convention influences the choice of the seat of arbitration. Parties often opt for seats in countries that are signatories to the Convention to ensure the enforceability of the resulting arbitral awards. In the context of England and Wales, the Convention enhances the attractiveness of London as a seat for international arbitration.
- Promoting global consistency. The New York Convention promotes a consistent approach to the enforcement of arbitral awards globally. It establishes a level playing field for parties engaged in international commercial arbitration, as the standards for enforcement are widely recognised and applied.
In summary, the New York Convention plays a vital role in international commercial arbitration, including in England and Wales. Its provisions ensure the recognition and enforcement of arbitral awards, enhancing the enforceability of awards and providing parties with confidence in choosing arbitration as a dispute resolution mechanism in cross-border transactions.
What is the Arbitrator?
At its simplest, arbitration is a method of dispute resolution whereby the parties at dispute agree to submit their dispute to an independent third party. That person is called the arbitrator and the parties are bound by any decision the arbitrator makes.
How to become an arbitrator
In England and Wales, the qualifications and requirements to become an arbitrator are primarily governed by the Arbitration Act 1996 and the rules and procedures of various arbitration institutions. Some of the key points regarding who can be an arbitrator, qualifications, and the process to become one are set out below.
- Eligibility. The Arbitration Act 1996 does not impose strict qualifications or restrictions on who can be an arbitrator. In general, any individual with the necessary skills, knowledge, and experience in the relevant field of law or industry can act as an arbitrator.
- Party agreement. The appointment of an arbitrator is typically based on the agreement of the parties involved in the dispute. Parties have the freedom to choose an arbitrator who they believe possesses the appropriate expertise to resolve their specific dispute effectively.
- Formal qualifications. The Arbitration Act 1996 does not require formal qualifications for arbitrators. However, certain arbitration institutions, such as the Chartered Institute of Arbitrators (CIArb), offer membership and qualification programs that provide individuals with recognised credentials and enhance their credibility as arbitrators. While these qualifications are not mandatory, they can contribute to an arbitrator’s professional standing.
- Industry specific expertise. Depending on the nature of the dispute, parties may prefer arbitrators with specialised knowledge or experience in a particular industry or field. For complex or technical disputes, arbitrators with relevant expertise can help ensure a better understanding of the issues at hand and facilitate a fair resolution.
- Professional reputation and experience. Arbitrators are generally expected to have a good reputation for integrity, impartiality, and professionalism. Previous experience as an arbitrator or a legal practitioner can also enhance an individual’s qualifications and suitability for appointment.
- Selection process. The process of becoming an arbitrator involves establishing a reputation in the field, gaining practical experience, and networking with professionals in the arbitration community. Arbitrators may be appointed through recommendations, selection by the parties, or appointment by an arbitration institution, depending on the specific circumstances of the dispute.
It is important to note that while the Arbitration Act 1996 provides a framework for arbitration proceedings, it does not prescribe specific qualifications or requirements for arbitrators. The Act focuses more on the conduct of arbitration, procedural matters, and the enforcement of arbitral awards.
To gain further recognition and enhance their skills as arbitrators, individuals may choose to pursue membership and qualifications offered by professional bodies such as the CIArb. The CIArb provides a structured pathway for professional development, including its Membership and Fellowship levels and the Chartered Arbitrator designation.
These qualifications demonstrate a commitment to ongoing education, adherence to professional standards, and an understanding of best practices in arbitration.
In summary, the qualifications to become an arbitrator in England and Wales are flexible, with no strict formal requirements mandated by legislation. The focus is on an individual’s expertise, knowledge, and experience in the relevant field of law or industry, as well as their reputation for integrity and professionalism. Professional bodies such as the CIArb offer qualifications that can enhance an arbitrator’s standing and demonstrate their commitment to professional development in the field of arbitration.
The importance of choosing the right Arbitrator
It goes without saying that choosing the right arbitrator for the dispute will go a long way to ensuring a fair and effective arbitration. This lends itself to arbitrators being chosen on fact/dispute specific cases.
Factors influencing choice of Arbitrator
Choosing the right arbitrator for a dispute in England and Wales is crucial as it can significantly impact the outcome and efficiency of the arbitration process. Set out below are some reasons why selecting the appropriate arbitrator is important:
- Expertise and knowledge. Different disputes may require specific expertise and knowledge in particular areas of law or industries. By choosing an arbitrator with relevant experience and expertise, parties can ensure that the arbitrator has a deep understanding of the legal and factual complexities involved in the dispute. This can lead to more informed decisions and a fair resolution. It is important to understand what the arbitrator’s legal qualifications and knowledge of the relevant substantive area of law are before making a choice.
- Procedural understanding. Arbitrators play a vital role in managing the procedural aspects of an arbitration, including the selection of rules, determination of the timetable, and conduct of hearings. An arbitrator familiar with the relevant procedural rules and experienced in handling similar disputes can efficiently manage the process, ensuring a smooth and effective resolution.
- Impartiality and independence. Arbitrators are expected to be impartial and independent in their decision-making. It is important to select an arbitrator who has a reputation for fairness, integrity, and absence of any conflicts of interest. This ensures that all parties have confidence in the arbitrator’s ability to render an unbiased and impartial decision.
- Case management skills. Arbitrators differ in their case management styles and approaches. Some may be more proactive, while others may adopt a more hands-off approach. Choosing an arbitrator with the right case management skills for a particular dispute can help ensure that the process is tailored to the specific needs of the parties, promoting efficiency and effective resolution.
- Cultural and language considerations. In international disputes, cultural and language factors may come into play. Selecting an arbitrator who is familiar with the cultural nuances and speaks the relevant languages can contribute to better communication and understanding among the parties involved.
Other helpful matters to bearing in mind include?
- Is the arbitration is international or domestic?
- What are the arbitrator’s technical qualifications if any (for example in a construction dispute)?
- what is the availability of the arbitrator(s?)
However, it is important to ensure that one is not unduly restricted. If parties wish to place restrictions in an arbitration clause, it is important not to be too specific, otherwise, this may cause significant delay in sourcing the arbitrator. For example, to put into a clause “a lawyer with experience in Russian law and the aeronautical industry” would limit the field considerably.
Where to look for the right Arbitrator
In terms of finding the right arbitrator, there are several avenues available:
- Arbitral institutions. Many arbitral institutions, such as the International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA), and the Chartered Institute of Arbitrators (CIArb), maintain panels of qualified arbitrators. These institutions have established rigorous processes for arbitrator selection and can provide a list of arbitrators with specific expertise in various areas of law and industry.
- Specialist arbitrator associations. There are also specialist arbitrator associations that focus on specific industries or areas of law. For example, the Technology and Construction Solicitors Association (TeCSA) in the UK focuses on disputes in the construction and technology sectors. These associations can help parties find arbitrators who have in-depth knowledge and experience in the specific field of the dispute.
- Personal recommendations. Recommendations from colleagues, legal professionals, or individuals who have previously been involved in arbitration can also be valuable in identifying suitable arbitrators. Personal referrals can provide insights into an arbitrator’s reputation, skills, and approach.
Who can choose the arbitrator?
It is normal that the disputing parties (especially if a sole arbitrator is to be appointed) will appoint a lawyer to deal with the dispute.
One of the key advantages of arbitration is that parties are able to choose their own tribunals, which means choosing their own arbitrators.
- This allows for parties to choose arbitrators of relevant expertise, for example a civil engineer in a construction dispute may sit as an arbitrator in a panel of 3 to provide relevant expertise to the dispute.
- It is common however, for the chairman of the tribunal to be legally trained, as lawyers are thought to have a better grasp of procedure, and consequently are able to progress disputes more efficiently and expediently.
That being said, there are worldwide institutions such as the CIArb where one can formally train as an arbitrator, with the relevant qualifications.
There are also international guidelines that arbitrators should follow, especially as the world becomes more globalised. For example,
- These include disclosing relationships with various parties, and circumstances in which arbitrators should or should not act to adhere to standards of impartiality, independence and disclosure.
- The International Bar Association provides a “list” of specific situations that are organised like a traffic light. A red list example is where an arbitrator should not be appointed in circumstances where they have a significant financial or personal interest in one of the parties, or the outcome of the case.
It is important to note that the arbitrator selection process should involve thorough research and consideration of the specific requirements of the dispute. Parties should assess the arbitrator’s qualifications, experience, and reputation, ensuring a good fit for the particular circumstances of the case.
In summary, choosing the right arbitrator is critical in arbitration proceedings in England and Wales. It ensures that the arbitrator has the necessary expertise, knowledge, and qualities to effectively handle the dispute. Various arbitral institutions and specialist arbitrator associations can assist parties in finding arbitrators with the relevant experience and expertise for their specific disputes.
At Francis Wilks & Jones – we can help you avoid mistakes and make sure you choose the right arbitrator for your claim.
Whatever your Arbitration enquiry – our team has the expertise to help. FWJ are experienced in helping clients from all over the world resolving their disputes using the Arbitration process, including ensuring the right choice of Arbitrator is made. Call our team of experts today and we can help.
The Arbitration Process
It is common for smaller disputes to be heard by a sole arbitrator, and in larger disputes, a panel of 3 arbitrators are often chosen.
The parties to the dispute
- Can then choose their own rules and timetable to the dispute, usually known as an ad hoc arbitration, or
- Look to an established arbitral institution and adopt or amend those rules to suit their purposes.
- Both sides to the dispute will then prepare their arguments for consideration by the panel of arbitrators or sole arbitrator,
Following this process, a final and binding award will be made in respect of the dispute.
It is seen as a simpler, quicker alternative to litigation. On this basis a substantial amount of national and international commercial agreements provides for dispute resolution by way of arbitration, which can reduce the associated costs and delays (which may not be preferable to commercial entities).
Benefit to international parties of arbitration
Arbitration is an excellent procedure to resolve disputes between international parties. This is because it the dispute can be resolved (subject to the terms of any arbitration agreement or clause providing for arbitration) in any court internationally (subject to the laws of that country) applying the legal principles relevant to the dispute.
In England and Wales, arbitration of international disputes in any country can exist, with experts in the relevant legal system providing evidence on the legal principles (despite the fact they may not mirror the laws in the UK).
Possible downsides to be aware of in the arbitration process
Arbitration is carried out under agreement by an independent arbitrator. If you do not agree with the arbitrator’s decision, there are very limited grounds to appeal the arbitration decision. This is different to normal court proceedings, where an application can be made to set aside an order or appeal a judgment.
Simultaneously, from the benefitting party’s perspective, an arbitration award can be less enforceable. Whilst the New York Convention (and, in the UK, the Arbitration Act 1996) provides for many jurisdictions in which an arbitration award will be recognised, not all countries are subscribed to this agreement.
Arbitration is less flexible in these respects and careful consideration is always needed of these aspects before proceeding. Our specialist team is able to advise you on this.
Binding effect of arbitration decision
Once an arbitrator’s decision is made, it is final and binding, which is agreed by the parties at the inception of the process to allow the parties certainty.
It is for this reason that arbitration (in whatever form or guise) has historically been a popular method of dispute resolution between merchants and traders due to its simplicity and informality. Today, it is one of the main ways of dispute resolution adopted by individuals, companies and states across the world.
- In the UK it is private, independent, free from corruption and forms a prescribed, quick and efficient solution for companies to resolve any disputes.
- Unlike litigation, there is little ability to abuse the process and the parties are restrained to very limited grounds to make their representations and argue their points, all of which are done over a closely defined timescale.
Should you have a matter that requires arbitration, at FWJ we will be able to assist you with the commencement of the arbitration process through to conclusion. If required, FWJ may also consider alternate litigation funding methods to assist you with the funding of the arbitration process.
There are many potential steps in the arbitration process – some mandatory, others optional. Whatever your circumstances – we have a brilliant dispute resolution here to help you today.
Below is a set of the typical steps which one might expect once the decision is taken to commence an arbitration.
Key steps in arbitration process
The arbitration process will include many of the following steps:
- Request for arbitration sent. The arbitration process typically begins with one party (the claimant) submitting a written request for arbitration to the other party (the respondent). This request should include a statement of the claimant’s position and the relief sought.
- Possible response to the request for arbitration. The respondent has a specified period to respond to the request for arbitration. They may file a written statement of defence, counterclaims, or any other relevant submissions.
- Constitution of the arbitral panel. The parties must agree on the appointment of the arbitrator(s) who will preside over the dispute. If the parties have not agreed on a specific method of appointment, the Arbitration Act provides default procedures for the appointment of arbitrators.
- Hearing for the procedure of the arbitration. At this preliminary hearing, the arbitrator(s) may hold a preliminary hearing to discuss procedural matters, clarify the issues in dispute, and set a timetable for subsequent stages of the arbitration.
- Exchanges of evidence. There will be a date for the claimant to submit their statement of case and for any issues or objections to jurisdiction, a date for the Defendant to respond and further dates for rejoinder/surrejoinder (ie responses).
- Hearing on jurisdiction and partial award on jurisdiction.
- Date for Defendant’s Defence.
- Date for Claimant’s Reply/Defence to Counterclaim.
- Further dates for responses.
- Expert evidence. If expert evidence is required, the parties may submit expert reports addressing specific issues in dispute. These reports are exchanged between the parties.
- Final hearing.
- Submission on costs.
- Final award rendered. Following the final hearing, the arbitrator(s) will issue an arbitral award, which sets out the decision on the dispute and may include reasons for the decision. The award is binding on the parties and enforceable under the Arbitration Act 1996.
- Challenges and appeals against the award.
- Enforcement of arbitration awards.
Is it a Voluntary or mandatory timetable?
Regarding the mandatory or voluntary nature of these steps, it is important to note that arbitration is generally a consensual process based on the agreement of the parties. The specific procedures and steps in the arbitration process are typically determined by the arbitration agreement and the rules of the chosen arbitral institution, if applicable. While certain steps may be mandatory as per the agreed procedure, parties have some flexibility to tailor the process to their specific needs.
Are there specific time limits for each step?
As for time limits, the Arbitration Act 1996 does not prescribe specific time limits for each procedural step. The time limits for various stages of the arbitration process are usually determined by the arbitration agreement, the chosen arbitral institution’s rules, or the arbitrator(s) themselves. Parties should adhere to the agreed timelines to ensure a smooth and efficient resolution of their dispute.
- It is worth noting that the procedural steps and time limits can vary depending on the specific arbitration agreement, the rules of the chosen arbitral institution (if any), and the discretion of the arbitrator(s) appointed in the case.
- Therefore, parties should refer to the specific arbitration agreement, rules, and instructions provided by the chosen arbitrator(s) or arbitral institution to ascertain the exact procedural requirements and timeframes applicable to their dispute.
Overall timings of the arbitration process
The overall arbitration process may be more streamlined or more complex, depending on the wishes of the parties, and the issues at stake. This can obviously have a knock on effect on how quickly an arbitration award may be given. But typically, the time period from commencement to an arbitration aware can range from 6 months to 3.5 years depending on the complexity of the case.
Another factor that may impact the timing of the arbitration is the constitution of the tribunal. If a panel of 3 arbitrators is required, it can often take some time for diaries to align for all the parties.
At FWJ, we are abl to assist and advise on any of the above stages of the arbitration process. Should you have any queries, please do not hesitate to contact one of the team, and we would be delighted to assist you.
Need assistance to arbitrate your dispute? Our brilliant team at FWJ is here to help. Call us today for an initial consultation
The arbitration hearing
It is important to remember that arbitration proceedings are a consensual, contractual process, agreed by the parties.
- There is no formal courtroom, nor judges or counsel ‘robed’ in a wig and gown as it would be for a trial.
- Whilst the hearing it does not have the formality of the court process, the arbitration proceedings are usually conducted with the same level of diligence and exertion by the parties.
Confidential nature of the arbitration hearing
The hearing is ‘in camera’ ie in private.
- This keeps the nature of the dispute confidential, ensuing that no business secrets, or sensitive information will come to light.
- By contrast proceedings in England & Wales are subject to the concept of open justice, ie that the starting position is that hearings are open to the public, and can be attended by the press.
Organising an Arbitration hearing
Hearings can be organised by the tribunal, parties or the arbitral institutions. Much akin to organising a mediation, parties need to consider the logistics of organising the hearing themselves, as there is no Court venue to attend.
- Parties will need to organise a hearing room, break out rooms for each party and the tribunal, as well as possibly accommodation.
- In arbitrations in London, it is common for parties to book facilities through organisations such as the International Dispute Resolution Centre, in Fleet Street.
- Such organisations also usually provide facilities on site for printing, telephones, monitors, transcribing, and of course refreshments.
Structure of the Arbitration hearing
The structure of the hearing will also need to be agreed by the parties. Matters to be considered are:
- How many hearings do there need to be?
- What is the time limit for opening statements/arguments?
- What is the time limit for witness examination?
- Will there be closing submissions or post hearing briefs, or both?
The hearing itself.
Other key aspects of an arbitration hearing include:
- Attendance. The arbitration hearing typically involves the attendance of the parties to the dispute, their legal representatives, and witnesses. The presence of the arbitrator(s) is essential as they preside over the hearing and make the final decision.
- Organisation and procedure. The hearing is organised and conducted by the arbitrator(s), who have the discretion to determine the procedure, subject to any agreed terms or the rules of the chosen arbitral institution. The hearing can be conducted in person or, in some cases, through virtual or remote means, depending on the circumstances and parties’ agreement.
- Hearing schedule. The arbitrator(s) will set a hearing schedule, including the dates, duration, and order of proceedings. This schedule may be determined in consultation with the parties and should be communicated in advance.
- Presentation of evidence. During the hearing, the parties present their evidence, legal arguments, and submissions. This includes witness testimony, expert reports, documentary evidence, and any other relevant materials.
- Examination of witnesses. Witnesses may be called to give evidence to support the parties’ positions. The examination of witnesses can include direct examination by the party calling the witness and cross-examination by the opposing party. The arbitrator(s) may also ask questions of the witnesses to clarify issues or gather additional information.
- Oral submissions. Parties have an opportunity to make oral submissions to present their case and address the legal and factual issues involved. This allows parties to highlight key points, argue their positions, and respond to the opposing party’s arguments.
- Admissibility of evidence. The admissibility of evidence is determined by the arbitration agreement, relevant procedural rules, and the discretion of the arbitrator(s). The standard of admissibility may be more flexible than in traditional court proceedings, allowing the introduction of evidence that is relevant and material to the dispute.
- Cross examination and rebuttal. Parties have the opportunity to cross-examine witnesses called by the opposing party to challenge their credibility, elicit further information, or clarify issues. Following cross-examination, the calling party may have an opportunity to present rebuttal evidence or arguments.
- Closing statements. At the conclusion of the hearing, parties are generally allowed to make closing statements summarising their case, highlighting key points, and addressing any remaining issues. These statements help parties present a final overview of their arguments before the arbitrator(s) make a decision.
- Post hearing submissions. In some cases, the arbitrator(s) may allow parties to submit post-hearing written submissions to address any additional points or provide further clarification on matters raised during the hearing.
It is important to note that the specific procedures and rules governing the arbitration hearing can vary depending on the arbitration agreement, chosen arbitral institution (if any), and the discretion of the arbitrator(s) appointed in the case. Parties should refer to the specific arbitration agreement, rules, and instructions provided by the chosen arbitrator(s) to understand the detailed requirements and procedures applicable to their dispute.
Whatever your Arbitration needs – FWJ, has the team for you. We have extensive experience of such matters and will be able to assist and guide you every step of the way in the dispute resolution process.
The Arbitration Award
Arbitration can be a brilliant way of resolving disputes without the cost and expense of formal litigation. Our superb team can see whether arbitration can work for you – whichever side of the dispute you are on. Call us today.
The requirements of the Award are dependant usually on two matters. Firstly, the arbitration agreement, and secondly the law governing the arbitration.
This means that one should always check the institutional rules (if any) that may specific what the Award needs to contain. Here are two very different requirements by different rules.
1. UNCITRAL 2013 Rules
The UNCITRAL 2013 Rules set out the following
- All arbitration awards shall be made in writing.
- The arbitral tribunal shall state the reasons upon which the award is based, unless the parties have agreed that no reasons are to be given.
- An arbitration award shall be signed by the arbitrators and it shall contain the date on which the award was made and indicate the place of arbitration. Where there is more than one arbitrator and any of them fails to sign, the award shall state the reason for the absence of the signature.
- An award may be made public with the consent of all parties or where and to the extent disclosure is required of a party by legal duty, to protect or pursue a legal right or in relation to legal proceedings before a court or other competent authority.
- Copies of the arbitration award signed by the arbitrators shall be communicated to the parties by the arbitral tribunal.
- Decision – the arbitration award must include a reasoned decision on the issues submitted to arbitration. The reasoning should explain the basis for the decision reached by the arbitral tribunal.
- Dissenting opinions – if any arbitrator dissents from the majority decision, they have the right to include a dissenting opinion in the award.
- Costs – the arbitration award should address the issue of costs, including the allocation of arbitration costs and legal expenses between the parties.
2. ICSID Rules
The ICSID Rules state the arbitration award shall be in writing and shall contain:
- A precise designation of each party.
- A statement that the Tribunal was established under the Convention, and a description of the method of its constitution.
- The name of each member of the Tribunal, and an identification of the appointing authority of each.
- The names of the agents, counsel and advocates of the parties.
- The dates and place of the sittings of the Tribunal.
- A summary of the proceeding.
- A statement of the facts as found by the Tribunal.
- The submissions of the parties.
- The decision of the Tribunal on every question submitted to it, together with the reasons upon which the decision is based.
- Any decision of the Tribunal regarding the cost of the proceeding.
- The arbitration award shall be signed by the members of the Tribunal who voted for it; the date of each signature shall be indicated.
- Any member of the Tribunal may attach his individual opinion to the arbitration award, whether he dissents from the majority or not, or a statement of his dissent.
- Operative part – the arbitration award must include an operative part that sets out the tribunal’s decision on the claims submitted, including any determinations on liability and damages.
- Reasons – the award should provide a concise statement of the reasons on which the tribunal’s decision is based.
- Dissenting opinions – if any arbitrator dissents from the majority decision, they have the right to include a dissenting opinion.
- Depositary – the award is deposited with the International Centre for Settlement of Investment Disputes (ICSID) and copies are sent to the parties involved.
Local laws – e.g. Arbitration Act 1996
In respect of local laws dealing with the arbitration for example, the English Arbitration Act 1996 provides that awards must comply with the below:
- The parties are free to agree on the form of an arbitration award.
- If or to the extent that there is no such agreement, the following provisions apply.
- The award shall be in writing signed by all the arbitrators or all those assenting to the arbitration award.
- The award shall contain the reasons for the award unless it is an agreed arbitration award or the parties have agreed to dispense with reasons.
- The arbitration award shall state the seat of the arbitration and the date when the award is made.
It is clear that there are varying rules by different laws and institutions. What is important is that the arbitration awards are made in compliance with both, so to limit any arguments that the arbitration award is void or unenforceable due to invalidity or procedural irregularity.
UNCITRAL 2013 Rules, ICSID Rules or something else?
The choice between the United Nations Commission On International Trade Law (UNCITRAL) 2013 Rules and ICSID Rules depends on the nature of the dispute and the agreement of the parties. The UNCITRAL Rules are often used in ad hoc arbitrations, where the parties have not chosen a specific set of rules. On the other hand, the ICSID Rules are specifically designed for investment disputes between states and foreign investors, providing a specialised framework for such cases.
While the UNCITRAL 2013 Rules and ICSID Rules differ in some aspects, they generally share common features, such as the requirement for a reasoned decision, signature by the arbitrator(s), and specification of the date and place of the award. The differences lie in the specific provisions addressing dissenting opinions, depositary requirements, and the specialised nature of investment disputes under the ICSID Rules framework.
In the context of arbitration of disputes in England and Wales, parties may choose to adopt other sets of rules, such as those provided by arbitral institutions like the ICC, LCIA, or CIArb, or they may agree on specific procedures tailored to their dispute in the arbitration agreement. The content of the arbitration award in such cases would be governed by the chosen rules or agreed procedures.
Whatever your Arbitration enquiry – our team has the expertise to help. FWJ are experienced in helping clients from all over the world resolving their Arbitration disputes and where necessary, deal with the content and format of Arbitration awards. Don’t Delay – call our team of experts today.
An arbitration award is similar to a court order.
Whilst there is no internationally accepted definition (yet) for an award, due to the many types of ‘awards’ available, it generally means a decision that is dispositive of (or deals with) the substantive issues the tribunal is charged to deal with.
There are the following generally recognisable categories of arbitration award:
- Partial awards. These are commonly used to determine any issues of jurisdiction. This saves time and expense, as it would be inefficient to run a whole dispute, only to obtain a ruling that the tribunal did not have jurisdiction to make a decision/hear the matter. A partial award is an interim decision on a specific issue or a particular aspect of the dispute. It may address preliminary matters, jurisdictional issues, liability, or quantum of damages. A partial award can be issued before the final award to resolve certain aspects of the dispute, but it does not finally determine the entire dispute.
- Final award. A final award is the definitive decision of the arbitral tribunal on the merits of the dispute. It provides a resolution to the substantive issues and typically determines the rights and obligations of the parties. A final award is binding on the parties and is enforceable under the Arbitration Act 1996.
- Interim award. An interim award is a provisional decision issued by the arbitral tribunal during the course of the proceedings. It may address interim measures, procedural issues, or specific requests made by the parties. Interim awards aim to provide temporary relief or guidance pending the final resolution of the dispute.
- Foreign and domestic awards. It is important to distinguish between the two for enforcement purposes.
- Default awards. These awards deal with arbitrations that proceed without one party, either where it fails or refuses to take part.
- Additional awards. In instances where an award is rendered which does not deal with all the issues, the parties can request a further award to deal with this oversight.
- Consent awards. The parties may settle the case prior to the tribunal needing to issue a decision. In these instances, they can agree an award, which has the terms of settlement embodied within it. This creates an award that can be enforced via the New York Convention. A consent award is an award that results from the parties’ agreement to settle the dispute through arbitration. It is reached by mutual consent and reflects the terms of the settlement agreed upon by the parties. Consent awards have the same legal effect as other types of arbitration awards.
- Supplementary award. A supplementary award is issued to address matters that were not fully resolved in the original award. It may be necessary when there are outstanding issues or when the original award requires clarification or modification. Supplementary awards aim to complete or complement the initial award.
These categories of arbitration awards are generally recognised and understood in the field of arbitration. They provide different types of decisions that can be made by the arbitral tribunal throughout the arbitration process. The specific categories and terminology may vary depending on the chosen arbitral institution, rules, or the agreement of the parties.
Whatever the nature of your Arbitration enquiry – we have the team of experts to help you. FWJ are experienced in helping clients domestically and internationally resolve their disputes using Arbitration. No matter what your issues – call our team of experts today and we can help.
The short answer to whether an arbitration award is binding – is yes.
This means that the parties are legally obligated to comply with the decision and the terms set forth in the award. The binding nature of arbitration awards in England & Wales is established through various legal provisions and conventions.
Set out below are some of the key provisions dealing with the binding nature of arbitration awards.
The Arbitration Act 1996.
The Arbitration Act 1996 is the primary legislation governing arbitration in England and Wales. Section 58(1) of the Act expressly states that an arbitration award made by the arbitral tribunal pursuant to an arbitration agreement is final and binding on the parties and any persons claiming through or under them.
New York Convention
The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards is an international treaty to which England and Wales are signatories. Under the New York Convention, arbitration awards made in one member state are generally recognised and enforceable in other member states. The Convention emphasises the binding nature of arbitration awards and provides a framework for their recognition and enforcement.
Principle of party autonomy
The principle of party autonomy is a fundamental aspect of arbitration. It allows parties to agree to resolve their disputes through arbitration and to determine the rules and procedures governing the arbitration process. When parties voluntarily submit to arbitration and agree to be bound by the decision of the arbitral tribunal, their intention to be legally bound is a significant factor supporting the enforceability of arbitration awards.
Arbitration awards are binding because they arise from contractual agreements between the parties. Parties enter into arbitration agreements, either as standalone agreements or as clauses within broader contracts, expressly agreeing to resolve their disputes through arbitration. By entering into such agreements, the parties demonstrate their intention to be bound by the resulting arbitration award.
- It is important to note that there may be limited grounds for challenging or setting aside arbitration awards under the Arbitration Act 1996, such as procedural irregularities or jurisdictional issues.
- However, the general presumption is that arbitration awards are binding and enforceable, providing parties with a final and conclusive resolution to their disputes.
Challenging Arbitration Awards
It is possible to challenge an arbitration award – and the path you take will be dictated by whether it is a domestic or international award being challenge
Domestic Arbitration – challenging the arbitration award
In England and Wales, challenges made are made under the Arbitration Act 1996. There are 3 grounds of challenge or arbitration appeal. These are:
- A challenge under section 67 of the Arbitration Act 1996 on the grounds that the tribunal did not have substantive jurisdiction
- A challenge under section 68 of the Arbitration Act 1996 on the grounds that there was serious irregularity in the proceedings or the award
- An appeal under section 69 of the Arbitration Act 1996 on a point of law
Of those three grounds, the parties may agree to dispense with only section 69; the other two grounds (s67 and s68) are capable of being contracted out of.
The party challenging the award must demonstrate that there was a serious irregularity affecting the tribunal, the proceedings, or the award itself.
This could include issues such as lack of jurisdiction, improper conduct by the arbitrator, or a failure to comply with due process.
There is a time limit to challenge – the application to challenge must be made within 28 days of the award being issued, unless the court grants an extension of time.
International Arbitration – challenging the arbitration award
1. New York Convention awards
If the award falls under the New York Convention, it can be challenged under Section 103 of the Arbitration Act 1996. The grounds for challenge are limited to those provided in Article V of the New York Convention, such as incapacity of a party, invalidity of the arbitration agreement, or a breach of due process.
2. Non New York Convention awards
If the award does not fall under the New York Convention, the challenge can be made under Section 68 of the Arbitration Act 1996. The grounds for challenge include serious irregularity affecting the tribunal, the proceedings, or the award, similar to the grounds for domestic arbitration challenges.
Time limit: The time limit for challenging international arbitration awards is 28 days from the date of the award, unless the court allows an extension of time.
- The general principle in arbitration is that awards are final and binding, and there is no automatic right of appeal on the merits of the case.
- However, parties can agree in their arbitration agreement or contract to an appeal process or to review procedures, allowing for a more extensive review of the award by an appellate tribunal. This is known as an “appeal on a point of law.”
- The appeal on a point of law can be made to the court, usually the High Court of England and Wales, and it must be based on a question of law arising out of the award.
- The parties can also agree to an appeal process under institutional rules, such as those provided by the LCIA (London Court of International Arbitration) or the ICC (International Chamber of Commerce).
- It’s important to note that the specific procedures and requirements for challenging an arbitration award may vary depending on the chosen arbitration rules, institutional guidelines, and the terms of the arbitration agreement. Parties involved in an arbitration should consult the relevant legislation, rules, and agreements and seek legal advice to understand the specific processes applicable to their case.
How hard is it to challenge an Arbitration award?
In reality, it is very difficult to successfully challenge or appeal an arbitral award. By way of example, In the Commercial Courts 2019 Report published by the judiciary show just how difficult.
- In 2015-2016, there were 34 s68 applications, of which 1 was successful. From 2016 to March 2018, there were a combined 78 s68 applications, of which none were successful.
- Similarly, in 2015-2016, there were 60 s69 applications, of which 4 were successful. From 2016 to 2017, there were no successful challenges (out of 46 s69 applications), and from 2017 to March 2018, out of the 56 s69 applications, only 1 was successful.
So practically speaking, arbitration awards, whilst open to challenge, it is rare for any such challenge to be successful. There is an incredibly high threshold, and so it is vital that the whole arbitration process is managed carefully, as there is rarely a second bite of the cherry.
Whatever your Arbitration enquiry – our team has the expertise to help, including dealing with challenges to Arbitration awards. FWJ are experienced in helping clients from all over the world resolving their disputes and dealing with Arbitration matters. Let our team help you today.
Arbitration and legal costs
It is always important to have a full understanding of the various costs regimes before starting an arbitration process. Our brilliant team can advise you on this and more. Contact us today for help.
It is vitally important to understand who bears the costs in an Arbitration process – our brilliant team at FWJ can help guide you through this.
As with any dispute, costs are often a very high concern for the parties. Costs can include:
- Legal representative fees.
- Expert’s fees.
- Tribunal fees.
As arbitration is a contractual method of dispute resolution, the parties can pre-agree how costs are to fall. Usually this would either take the form of either both parties agreeing to bear their own costs, or for the loser to pay the winner’s costs. Curiously enough, this aspect of arbitration rarely makes it into an arbitration clause, leaving the parties at the mercy of the tribunal.
Wider costs powers of Arbitrators in England & Wales
In England and Wales, under the Arbitration Act 1996, arbitrators have far wider powers than the Court in ordering costs.
- By way of example, success fees are not recoverable at Court (under Conditional Fee Agreements concluded after 1 April 2013), nor are any premiums payable under ATE insurance policies.
- However, the Arbitration Act allows under s59(1) c, makes provision for the arbitrator to award also the “legal or other costs of the parties”.
Insofar as these costs are connected with the arbitration, they appear to be recoverable, as seen in Essar Oilfields Services Limited v Norscot Rig Management Pvt Limited (2016) QBD, where the winning party recovered not just the legal fees, but also the success fee which the winning party had to pay to a third party. This was not an insignificant sum, as it was 300% of the sum advanced by the funder to the winning party, equating some £1.94 million.
In England and Wales, the default position under the Arbitration Act is that costs should be awarded to the winning party. This is also the case under the UNCITRAL Arbitration rules, but is not necessarily the default position in other jurisdictions or for different arbitral institutions, and parties must take care to investigate this further, ideally prior to drafting their arbitration clause or request for arbitration.
Whatever your Arbitration enquiry – our team has the expertise to help you. FWJ are experienced in helping clients domestically and internationally resolve their disputes through the use of Arbitration and regularly advice on the question of Arbitration costs. No matter what your claim or dispute – call our team of experts today and we can help.
Enforcement of Arbitral Awards
Enforceability of an Arbitration award
In England and Wales, the enforcement of an arbitration award is governed by the Arbitration Act 1996 and other international conventions, most notably the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
We set out below the key steps in the enforcement process – but our team is here to speak to if you need any further information.
1. Recognition of the award. Before enforcement proceedings can commence, the arbitration award must be recognised as binding and enforceable by the court. The party seeking enforcement must apply to the relevant court, typically the High Court of England and Wales, to obtain a judgment recognising the award.
2. Grounds for refusal. The court may refuse to recognise or enforce an arbitration award on limited grounds specified in the Arbitration Act 1996. These grounds include issues related to the validity of the arbitration agreement, lack of jurisdiction, procedural irregularities, public policy considerations, or if the subject matter of the dispute is not capable of settlement by arbitration.
3. New York Convention. If the arbitration award falls under the New York Convention, the recognition and enforcement process is streamlined. The party seeking enforcement must provide the court with the original award or a duly certified copy, along with the original arbitration agreement or a duly certified copy. The court will examine whether any grounds for refusal exist under the Convention before granting recognition and enforcement.
4. Enforcement proceedings. Once the arbitration award is recognised by the court, the prevailing party can initiate enforcement proceedings. Enforcement can be pursued through various means, including:
- Write of Execution. The prevailing party may apply for a writ of execution to enforce the award, which allows for the seizure and sale of the respondent’s assets to satisfy the award.
- Charging Orders. The prevailing party may seek a charging order, which places a charge on the respondent’s assets, such as property or securities, to secure the payment of the award.
- Third-Party Debt Orders. The prevailing party may apply for a third-party debt order, which freezes the respondent’s assets held by a third party, such as a bank, and requires the third party to pay the amount owed directly to the prevailing party.
- Our expert debt recovery and enforcement team at FWJ is here to advise on all the different enforcement procedures and what would be best for you.
5. Assistance from the court. The court has the power to assist with the enforcement process by granting injunctions, orders for disclosure of assets, or orders for examination of judgment debtors to aid in the identification and recovery of assets.
Our expert team is here to help you navigate the specific procedures and requirements under the relevant legislation, rules, and conventions, such as the Arbitration Act 1996 and the New York Convention.
Other useful information
- If you have an arbitral award that the other side refuses to comply with, you may need to apply to Court to enforce it.
- One of the benefits of obtaining an award instead of a judgment in a domestic Court, is that there exists a comprehensive regime of enforcement.
- As of 2021, there are 167 state parties, who have signed up to the New York Convention 1958;
- This is a reciprocal convention which recognises and the enforcement of foreign arbitral awards.
How to enforce an Arbitration Award?
Francis Wilks & Jones can assist you in making an application to enforce the award in England and Wales. The application is made on a ‘without notice’ basis meaning that the opponents will only find out about the application after it has been made.
We will assist you by:
- Drafting the application notice.
- Drafting the written evidence that will be required to support the application.
- Preparing the draft order stating that you have permission to enforce the award
To begin this process for you, we will need to review copies of the relevant arbitration agreement, as well as the award.
Possible defences against enforcement of Arbitration Awards
It is also important to appreciate that there are a number of defences available to parties against enforcement. These will need to be carefully considered prior to an application being issued so that you are aware of the likely merits and risks of the application.
- If the award concerns parties whose countries are contracted to the 1958 New York Convention, Article V contains a carve out provision that recognition and enforcement may be refused.
- One of the common defences that we see deployed in enforcement proceedings is where parties to an arbitration agreement was under some incapacity, or that the agreement is invalid under the English and Welsh law.
Please note that there is a limitation date for a claim to be submitted and so, it is important that you act promptly and contact us as soon as possible if you wish to enforce an award.
Whatever your Arbitration enquiry – our team has the expertise to help. FWJ are experienced in helping clients from all over the world resolving their Arbitration disputes and where necessary, deal with enforcement of Arbitration awards. Don’t Delay – call our team of experts today.
Appealing Arbitral Awards
If an award has been made in arbitration proceedings that you are unhappy with, Francis Wilks & Jones will be able to advise you as to whether there are any potential grounds for appeal challenge.
It is important to note that any appeal or challenge does not ‘stay’ or ‘stop’ enforcement of the award and so, it is vital that you act quickly to obtain advice as soon as the award is made. Our brilliant arbitration team at FWJ can provide fast effective advice.
The court’s approach to appealing arbitration awards
As a general rule, due to international commercial principles, the English courts are reluctant to interfere with arbitration awards.
- This is in keeping with the idea that international commercial arbitration should be a “one stop shop”, with parties generally preferring finality over the ‘correctness’ of an award in resolving their disputes.
- Bearing this in mind, there is a high threshold that you will need to overcome in order to challenge or set aside an award made against you.
Domestic award appeals
There are the three main grounds of challenge under the Arbitration Act 1996.
- Section 67 Arbitration Act 1996 – challenge on the grounds that the arbitral tribunal lacked substantive jurisdiction;
- Section 68 Arbitration Act 1996 – challenge on the grounds that the award contains a serious irregularity; and / or
- Section 69 Arbitration Act 1996 – appeal on a point of law.
Of all the above, only section 69 is not a mandatory provision. This means that the parties can opt out of it by agreement, either before or after the arbitration proceedings begin. Section 69 is otherwise a very difficult avenue for challenge. In 2019, there were no successful applications (out of 39).
Section 68 challenges are more successful, although arguably, only marginally so, and some of the common grounds used for challenge under Section 68 include:
- Failure by the tribunal to deal with all the issues that were put to it;
- Uncertainty or ambiguity as to the effect of the award; and / or
- Failure by the tribunal to comply with section 33 of the Arbitration Act (the general duty for the tribunal to act fairly and impartially, and to give each party a reasonable opportunity to put its case and to deal with its opponent’s case).
The party seeking to appeal must first seek permission from the court to appeal the award. The court will consider whether the appeal raises a question of law of general public importance, and either the tribunal or the court must have given permission for the appeal to proceed.
If permission is granted, the appeal is heard by the relevant appellate court, which is usually the Court of Appeal or the Supreme Court. The appellate court will review the award based on the identified point of law and provide its decision.
International award appeals
1. New York Convention awards
- If the arbitration award falls under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the appeal process is limited.
- Article V(1)(e) of the New York Convention allows a court to refuse recognition or enforcement of an award if it has been set aside or suspended in the country where it was made.
- The party seeking to challenge the award may apply to the relevant court in the jurisdiction where recognition or enforcement is sought, providing evidence that the award has been set aside or suspended in the country where it was made.
2. Non-New York Convention awards
- For international arbitration awards that do not fall under the New York Convention, the appeal process is governed by Section 69 of the Arbitration Act 1996, similar to domestic arbitration.
- The party seeking to appeal must first seek permission from the court to appeal the award on a point of law.
If permission is granted, the appeal proceeds to the relevant appellate court for review.
Key Differences between domestic and international appeals
The main difference between the domestic and international arbitration appeal processes is that domestic appeals are based on Section 69 of the Arbitration Act 1996, while international appeals rely on the New York Convention (Article V(1)(e)) or Section 69 of the Arbitration Act 1996 for non-New York Convention awards.
- Domestic appeals have a broader scope and may encompass a wider range of legal issues, while international appeals are typically limited to issues of recognition and enforcement based on specific grounds under the New York Convention.
- The appellate court for domestic appeals is typically the Court of Appeal or the Supreme Court, while international appeals may involve courts in multiple jurisdictions depending on the enforcement location.
It is important to note that the availability and process of appeals in arbitration may also be influenced by the chosen arbitration rules, institutional guidelines, and the terms of the arbitration agreement. Parties involved in arbitration should carefully consider the provisions of relevant legislation, rules, conventions, and agreements and seek legal advice to understand the specific appeal processes applicable to their situation.
If you have an arbitral award that you wish to challenge or appeal, please get in contact with us. Francis Wilks & Jones will review the award and consider whether a challenge or an appeal can be brought to set it aside.
Arbitration, Mediation and ADR
In short, yes.
Alternative Dispute Resolution (ADR) is any such method that does not involve formal litigation but is aimed at settling a dispute. Arbitration is a more formal type of ADR than mediation and has sometimes been described as a “private litigation system”.
ADR comes in many various forms which include:
Generally, the benefits of ADR is that it allows the parties to be more flexible with their solutions as a sensible and cost effective way of keeping litigants out of Court. It is supposed to reduce costs and delays, and can do so, although ADR costs have been criticised in the past for being too high. This mainly comes down to the mentality of the parties, and if parties attend ADR with a litigious, win at all costs mindset, they are unlikely to reap the benefits of ADR.
Key Differences between arbitration and other ADR remedies
- Arbitration is a formal process where a neutral third party makes a binding decision on the dispute, whereas mediation and negotiation are more flexible and non-binding.
- In arbitration, the decision-maker (arbitrator or arbitral tribunal) renders a binding decision, whereas in mediation and negotiation, the parties retain control over the outcome and reach a voluntary settlement.
- Arbitration generally involves more formal procedures and rules, while mediation and negotiation are generally less formal and provide greater flexibility.
- Litigation is a court-based process where a judge or jury makes the final decision, while arbitration is a private process agreed upon by the parties.
It’s important to note that parties have the autonomy to choose the most appropriate dispute resolution method for their specific circumstances. They may consider factors such as the nature of the dispute, desired outcome, complexity, costs, and time constraints when selecting the appropriate process.
What is better: Arbitration or Mediation?
This is a commonly asked question amongst our clients at the outset of a dispute. The answer is inevitably fact sensitive, and dependant on the dispute at hand, with many different permutations. Our team can help find the best solution for you.
It is important to note that arbitration and mediation are not mutually exclusive. One could utilise both in the same proceedings in seeking to resolve a dispute.
Generally, we would advise that mediation is considered at all times.
- Mediations allow parties to interact with each other on a ‘without prejudice’ basis to explore settlement.
- Parties are able to explore creative solutions to the dispute which arbitration or court proceedings may restrict.
- There is nothing stopping a party from mediation at any point of the dispute, be it pre-issue, before or after the exchange of disclosure/evidence or even right before a final hearing.
By contrast, Arbitration is a much more involved process, akin to court proceedings. It can be extremely useful in certain cases – but ultimately it is important to obtain specialist advice so that you are advised thoroughly from the outset and to plan the best tactical way forward.
How is Arbitration different from mediation?
Both arbitration and mediation are forms of Alternative Dispute Resolution (ADR).
The material difference between Arbitration and Mediation is that Arbitration is binding on the parties with a decision made by the arbitrator, and mediation is usually just a voluntary process, and no decision is made by the mediator presiding over the dispute.
Essentially, this means that there is an outcome at an arbitration, as the parties agree to arbitrate in lieu of litigation.
- A decision has to be made – and is made by the arbitrator if the parties cannot come to an agreement.
- So in many ways it is similar to “traditional” court proceedings where there will be an award at the end with an outcome.
In mediation however, as the process is not binding, ie any party can at any time walk away, and no decision is made, leaving any underlying dispute unresolved.
Arbitrations are more formal, and can last for many weeks in certain complex cases. By contrast, mediation is usually much more informal, and will last usually no longer than a day in most instances.
Both are equally valid methods of Alternative Dispute Resolution, and it is increasingly common to see provisions for mediation to take place in a dispute prior to arbitration or litigation being utilised. This is an added layer of possible cost and time saving for the parties.
Our expert team at FWJ is well versed in all types of ADR, including arbitration – and can help find the right solution for you.
Whatever your Arbitration enquiry – our team has the expertise to help you. FWJ are experienced in helping clients domestically and internationally resolve their disputes through the use of Arbitration or other types of Dispute Resolution mechanism. No matter what your issues – call our team of experts today and we can help.
In England and Wales, arbitration is a method of resolving disputes that takes place outside of the traditional court system. It involves the parties involved in a dispute agreeing to submit their disagreement to an impartial third party, known as an arbitrator or a panel of arbitrators, who will make a binding decision on the matter. The process and rules governing arbitration in England and Wales are primarily governed by the Arbitration Act 1996.
Set out below are some of the key aspects of arbitration and how it differs from more traditional “litigation claims” heard in the English courts:
Choice of decision maker
In litigation, a judge is appointed by the court to hear the case and make a judgment. In arbitration, the parties have the flexibility to choose their arbitrator(s) based on their expertise and experience in the relevant field. The Arbitration Act 1996 sets out the qualifications and requirements for arbitrators.
Litigation follows formal court procedures, which include filing court documents, presenting evidence, and making legal arguments, disclosure and trial.
In contrast, arbitration offers more flexibility and party autonomy. The parties can agree on the procedural rules that will apply, including the extent of document disclosure, witness statements, and the use of experts. The Arbitration Act 1996 provides a framework for conducting arbitration proceedings and allows the parties to tailor the procedure to suit their needs.
Privacy and confidentiality
Court proceedings are generally open to the public, allowing anyone to attend and access court records. Arbitration provides a private and confidential process. The Arbitration Act 1996 recognises and protects the confidentiality of arbitration proceedings unless the parties agree otherwise. This confidentiality can be important for commercial or sensitive disputes.
Speed and efficiency
Arbitration can often be a faster and more efficient process compared to litigation. The parties have more control over the timetable and can agree on specific time limits for different stages of the arbitration. This flexibility allows for a more expeditious resolution. In contrast, litigation in the English courts can be subject to delays due to court schedules and workload.
Arbitration awards are generally enforceable under the Arbitration Act 1996. The Act incorporates the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention), which facilitates the enforcement of arbitration awards in other jurisdictions. Litigation judgments can also be enforced, but the process may differ depending on the specific circumstances.
In general, arbitration awards are final and binding, with limited grounds for appeal. The Arbitration Act 1996 provides limited grounds for challenging an arbitration award, such as serious irregularity or lack of jurisdiction. In contrast, litigation judgments can be appealed to higher courts, providing a more extensive appellate process.
- It’s important to note that not all disputes are suitable for arbitration, and certain matters, such as criminal cases and certain family law disputes, are generally excluded from arbitration.
- Additionally, parties usually need to have a valid arbitration agreement in place before a dispute arises to opt for arbitration as a method of resolution. The arbitration agreement can be in the form of a separate contract or a clause within a larger agreement, specifying the intention to resolve disputes through arbitration.
At Francis Wilks & Jones – our expert team is able to guide you through all the legal options available to you for resolving your dispute – and help you achieve a successful outcome.
Benefits of Arbitration
Arbitration is an excellent procedure for the resolution of business disputes between parties, especially international parties where the jurisdiction in which you would prefer to settle these disputes is not the jurisdiction in which your business relationship was carried out.
There are many benefits to the arbitration process, including:
1. Avoiding lengthy and expensive disputes
Arbitration can be an excellent process for avoiding cost and wasted management time.
For example, Arbitration can help with,
- Resolving disputes over jurisdiction. Otherwise, jurisdiction disputes can continue for years, focusing on the “correct” legal territory, with arguments for example over the Rome Convention (in Europe) or the New York Convention (in the US). This can lead to substantial legal costs before the points in dispute are even addressed.
- Removing arguments and issues about the legal jurisdiction where the work took place, especially in international agreements. The jurisdiction for the contract may be unstable, politically or economically, or the trust in the domestic justice system may not be there.
- Enforcement. When it comes to enforcing an award often the parties to the agreement subject to the dispute are located elsewhere (or their assets are) and thus recognition of an award in that jurisdiction may be uncertain (particularly in circumstances where the judgement you seek to enforce is handed down in a poorly recognised or corrupt legal system). Enforcement of arbitral awards can be much easier.
2. Choice of Location
Different countries have different arbitration rules – many have adopted the New York Convention on Arbitration and in the UK we have the Arbitration Act 1996, which embodies legal rules addressing such matters.
- For business arrangements that are entered into in respect of international agreements, both parties may be partisan or biased as to where the dispute is settled.
- Accordingly, it is fair to both parties to have a neutral venue free of corruption and with a strong arbitration system.
In the UK we have a strong legal system which, although it does not interfere with the legal jurisdiction referred to in the arbitration agreement, protects the arbitration process from abuse and enables arbitration awards to be more enforceable in jurisdictions where such Arbitration decisions are recognised.
3. It is consensual
Litigation proceedings are almost always contested – the Civil Procedure Rules 1998 (as amended) in the UK require that parties attempt to correspond and mediate before issuing a litigation claim, but ultimately if the parties do not agree then litigation commences and continues on the basis that there is a right or wrong for the Court decide (although Court judgments often do not fall as cleanly as this).
However, with Arbitration both parties have consented to the dispute resolution procedure. Whilst there may be some attempt to resolve such disputes without recourse to arbitration, ultimately the Arbitration procedure commences based on where in this grey area does the Arbitrator’s decision fall.
4. It is Confidential
If your issue is commercially sensitive, Arbitration offers both a neutral venue and private hearings.
- In conventional litigation proceedings, the Court is accessible by the public (a necessary right of the UK litigation procedure and a feature which is present in many countries) and judgements and orders are freely accessible to the public.
- This is not the case with an Arbitration decision. The arbitration process and decision is all confidential.
5. It is quicker
In the UK, the Arbitration Act 1996 (which governs most of the rules and procedure for arbitration) pales in volume when compared to the Civil Procedure Rules 1998 (as amended) which govern normal Court procedure.
- Whilst the Arbitration process does require the use of experts on laws and other expertise, and may be more expensive to administer, it is a finite hearing of submitted facts with an expert controlling the Tribunal hearing.
- It is considerably quicker to resolve and there are fewer procedural opportunities to delay or use other tactical mechanisms (as are available for civil litigation procedures).
If, for commercial or other reasons, you require a swift resolution to a dispute then Arbitration may be a wise course to adopt.
If your dispute is international, it is almost certainly going to be easier to enforce any award you obtain by arbitration.
- This is mainly due to the New York Convention which is often described as the cornerstone of international commercial arbitration.
- As of September 2019, 161 states have contracted to it. The effect of the Convention is that contracting states would recognise written arbitration agreements and foreign arbitral awards. Foreign judgments do not have any such similar convention.
Ultimately the enforcement of an Arbitration award may face other difficulties but at Francis Wilks & Jones we can assist you with considering the best course of action for enforcing an award overseas.
7. Choice of tribunal and flexibility
Another advantage which arbitration has is the choice of tribunal and flexibility.
The parties can agree a tailored arbitration which would save you time and money.
- The tribunal is not tied to formal rules of litigation.
- An expedited timetable can be drawn and agreed.
- Furthermore, as you can choose your Arbitrator, you are much more likely to obtain the level of expertise required to deal with the discrete issues in your dispute.
8. Neutrality and expertise
Parties have the opportunity to select an arbitrator with expertise and experience in the subject matter of the dispute. This ensures that the decision-maker has a deeper understanding of the technical and legal aspects involved, leading to a more informed and specialised resolution.
9. International disputes resolution
Arbitration is particularly advantageous for resolving international disputes. The New York Convention facilitates the enforcement of arbitration awards across different jurisdictions, making it easier for parties to enforce the outcome of the arbitration in multiple countries.
10. Expert determination
In certain specialised areas, such as construction or intellectual property disputes, parties may benefit from having an expert arbitrator who possesses specific industry knowledge. This can lead to more informed and accurate decisions on technical matters.
Should you have a matter that requires arbitration, at FWJ we will be able to assist you with the commencement of the arbitration process through to conclusion. If required, FWJ may also consider alternate litigation funding methods to assist you with the funding of the arbitration process.
Simply put – arbitration is a way of resolving disputes without the cost and expense of formal litigation. Let our brilliant team help you see whether arbitration can work for you – whichever side of the dispute you are on. Call us today.
There are several benefits that arbitration has over “traditional” forms of litigation. In a commercial or business context, some of the main reasons cited by parties as to why they prefer arbitration to litigation include.
- Commercial disputes can and often involves sensitive information. This may include the identity of investors, the balance sheet of a company, or commercial deals in the process of being negotiated. Arbitration, unlike court proceedings are private. Parties can have more certainty and confidence in disclosing sensitive commercial information that they may not be keen to do in open court.
- In business, speed and certainty helps. Arbitration can be a much faster process than issuing a claim at court, as the parties are not at the mercy of the court’s timetable, which may not have the capacity or availability for judges to hear claims as soon as the parties would like. As parties can choose their arbitrator, this issue is negated considerably, as they can ensure that the arbitrator that they choose is available within their particular time constraints.
- Arbitration is more certain than litigation. By that, we mean that there is very limited grounds of appeal. There are no higher courts for parties to appeal to. Challenges available are limited, and empirical data shows that very few challenges succeed. A party who arbitrates has more certainty that once an award is made, it is highly unlikely to be successfully challenged.
- Arbitration awards are easier to enforce, by virtue of the New York Convention 1958 than Court judgments in foreign jurisdictions. This means that regardless of the above advantages, for practical reasons, it is often the most material point for disputing parties.
Whatever your Arbitration enquiry – our team has the expertise to help you. FWJ are experienced in helping clients domestically and internationally resolve their disputes through the use of Arbitration or other types of Dispute Resolution mechanism. No matter what your issues – call our team of experts today and we can help.
Has Brexit had an impact?
Undeniably one of the more significant events of the last few years, Brexit has had wide ranging impact on the United Kingdom and the EU.
The United Kingdom will also not be re-acceding to the Lugano Convention, which governs judicial co-operation between the EU and the EFTA states.
However, this is expected to have very little impact on international arbitration.
This is because arbitration agreements are contractual, and the laws applicable, will be the national laws as agreed by the parties, which would also govern the methods of challenge. Enforcement of arbitral awards is also governed by the New York Convention 1958, and so you should not need to worry about the impact of Brexit in respect to any of the disputes arising out of the nature of your business/contracts.
What is important is that arbitration clauses are drafted clearly and unambiguously. For This can make a real difference when ensuing you are fully protected in the event of a dispute.