Arbitration Law paper - Essay Example

For example, section 1(c) stipulates “in matters governed by this part the court should not intervene except as provided by this part”. Nevertheless, the Act makes several provisions for court intervention at various stages of the proceeding. Arbitration agreement is an agreement to submit to arbitration present or future disputes.6 The Arbitration Act 1996 and the Scotland equivalent, Arbitration Act 2010, have several provisions with regards to requirements for a valid arbitration agreement; for example, it should be in writing.

7 If the agreement does not satiate any of the requirements, a party can challenge its validity in court. The court has the power to rule on the validity of the arbitration agreement. It is crucial for courts to exercise powers with regards to the arbitration agreement, so as to maintain autonomy of the parties in making an agreement. The will of the parties to enter into the agreement should be genuine, and therefore if a party is coerced into the agreement, the court should invalidate it. Section 10(2) of the Scotland Act goes ahead and invalidates any provision in the arbitral agreement that prevents the bringing of a legal action.

Moreover, courts, pursuant to section 7 have the power to severe an arbitration agreement from the rest of the contract where the contract is held void for some reason. In Heyman v Darwins the House of Lords held that, “an arbitration agreement was not terminated by a breach of the underlying contract.”8 In Amir Weissfisch V. Anthony Julius, Rami Weissfisch, and Philip Davis9, the court upheld an arbitration agreement where the arbitrator would rule on whether he has jurisdiction over arbitration, even though the party argued that the agreement was void due to fraudulent acts committed by the arbitrator.

With regards to the jurisdiction of the tribunal, section 31 enshrines the competence-competence principle, whereby the tribunal is empowered to rule on its own jurisdiction. Section 32(1) provides that the court may, on the application of a party to arbitral proceeding (upon notice to the other parties); determine any question as to the substantive jurisdiction of the tribunal. Courts have been entertaining many cases of this nature. In First Options v Kaplan10 the Supreme Court ruled that clear and unmistakable evidence should be submitted by the parties as agreed to submit to the arbitrator the question of the arbitrator’s jurisdiction.

If not, the court will determine whether or not the arbitrator had a mandate to arbitrate.11 In Paine Webber Inc. v Mohammad S Elahi, the Court of Appeals held that, unless the parties specifically agreed otherwise it was incumbent for the court to determine both jurisdictional arbitrability and subject matter it was empowered to take up. Section 7 empowers the court to stay proceedings and refer parties to arbitration if an action subject to the agreement is commenced. An application to the effect is made by the other party subject to taking steps in those proceeding, to answer the substantive claim against him.

12 The law requires the court to grant a stay of legal proceeding unless it is satisfied that the arbitration agree