Practical Arbitration Issues - Essay Example

?Practical Arbitration Issues Introduction Arbitration is a technique that is legally applied in resolving disputes without the involvement of the courts1. What this means is that arbitration is an alternative dispute resolution method where one or more third parties, the arbitrator or panel of arbitrators, listen to the different parties involved in a dispute and make a decision to which they (the disputing parties) are bound by agreement. Arbitration is more like a court-based adjudication considering its adversarial nature2. What this means is that the parties involved in the dispute make presentations to prove that they are right and the other party is wrong. In the United Kingdom, arbitration is governed by the Arbitration Act of 1996. Preliminary Preparations Before the disputing parties appoint an arbitrator, one party has to provide a written request for arbitration to the respondent through an arbitration notice3. The arbitration process is assumed to begin at the point where a third party is appointed as arbitrator by agreement of the disputing parties. Having received a letter signed by two disputing parties appointing an arbitrator, it must be noted by the two parties that the arbitration process has formally begun. The parties to the dispute should be aware that the purpose of arbitration is to find a fair resolution of the contention without unnecessary expense or delay4. The parties should further be aware that they have the freedom to agree on how resolutions will be arrived at subject to the legal demands of public interest. Yet again, the parties must be aware that any court of law will not intervene in the arbitration process unless in the case of special appeal5. The arbitration process will begin by the summoning of the parties in dispute for the purpose of confirming their identity and status in relation to the matter in dispute. In order for the arbitrator to be adequately acquainted with the matter or terms of the development contract, the parties will have to submit a copy of the notice of arbitration and confirm that the process of appointing the arbitrator was valid. Furthermore, the parties will have to serve the arbitrator with the original (development) contract for inspection6. It is important that the jurisdiction of the arbitrator is clearly outlined in the early stages of the process. In this case, the arbitrator should reserve the right to rule substantively on their personal jurisdiction. Any objections that arise in respect of the arbitrator’s jurisdiction should be dealt with in line with the law as set out by the Arbitration Act7. In order for the process of arbitration to be effective, the parties must be able to hold meetings and make presentations. The parties in dispute will have to agree on the venue or seat of the arbitration8. The arbitrator, on their own judgement, may choose a seat in the event that the parties fail to agree on a particular seat9. Furthermore, it should be made clear that the statutory laws that will apply during the arbitration. In the case of residents in the UK, the Law of England and Wales may apply. Once the seat has been decided, a date should be set for the commencement of the arbitration, subject to the agreement of the relevant parties. While there are laws that will apply during the arbitration, it is important for the arbitrator to set out specific rules, in writing, that will apply in the process10. These terms and conditions will include elements related to the arbitrator’s independence, compensation, fines, and prohibition of ex parte communications of the parties with the arbitrator on the matter being arbitrated except for administrative purposes. These terms and conditions will be consented to and signed by the parties. The items in dispute will then be identified with both parties presenting their cases. At this point, any important issues related to the matter should be raised by the parties. In addition, arbitrator will identify and record the main contentious issues as well as issues that are contested to by both parties11. It is important for the arbitrator to known in advance if the contending parties will prefer to enjoin other parties to the case. The parties in dispute will be given change to enjoin others to the case subject to the jurisdiction of the arbitrator. Furthermore, the parties to the arbitration will present any agreements on whether or not to consolidate the process with other concurrent hearings or arbitral proceedings. It is important for parties to disclose issues that may affect the outcome of the arbitration process if decided in a particular way. Issues that may substantiate the dispute further if decided in a certain way should also be disclosed to the arbitrator and contender. So as to simplify the arbitration process, certain elements of the matter can be split and provisional relief granted on various issues subject to the parties’ agreement. If this is successfully done, awards may be granted at different stages and in relation to divergent issues. Proceedings One of the most important parts of the arbitration is the proceedings. It is during the proceedings that facts and arguments surrounding the dispute are presented12. Proceedings should be preceded by the setting of arbitrary rules and terms of references. The arbitrator should take it upon themselves to adopt procedures that are respective of prevailing circumstances and avoid unnecessary costs and delays13. Furthermore, the proceedings should be done with the reduction of cost in mind. On their part, the contesting parties should do whatever is necessary so as to ensure that the proceedings are conducted expeditiously and properly. The parties may decide that the proceedings will involve the attendance of meetings (formal or informal) or reliance on documents. The parties may decide on their preferred option by considering such factors as convenience, cost, place, time, duration, and effectiveness14. So as to assure truth when presenting documentary evidence or statements, it is important to have these accompanied by statements of truth. Considering that time is a valuable resource and a significant constraint, proper use of time is of great importance during the process of arbitration. It is for this reason that the arbitrator should make a timetable for the proceedings which all parties should adhere to. Fines or awards may be instituted for going against the decrees of the established timetable as a way of ensuring that time does not go to waste and the matter is settled in the shortest possible time. Based on the formulated timetable, the parties will make their claims and counterclaims, present evidences, make clarifications regarding their evidences, and make replies15. In case a party fails to abide by the timetable, the other party should notify the arbitrator of the late service. The parties may apply for time extensions in writing in good time and the same copied to the other party. Considering that the process of arbitration should be open, it is important that all parties get to know whatever information other parties have in their possession. In order for this to happen, all responses, replies, statements and other documents or information presented to one party by another should be copied to the third party. Copies of statements and other documentary evidences should be sent to the other party at the same time they are being sent to the arbitrator16. When disclosing documents, it is necessary for both parties to present documents in their possession that support their opponent’s case, adversely affect their own case, and adversely impact on their opponent’s case. Each party retains the right to inspect the documents presented for disclosure by the other and that are not privileged. Further, the arbitrator should give judgement regarding expert reports and witness statements. However, as much as possible, expert evidence should be limited subject to good reason and expert reports presented in writing. When any party has to communicate with the arbitrator, it should be in writing. Although parties may communicate by sending faxes, these should be followed by written communication; a copy of the same information sent by email, post or hand delivered. Other issues to be outlined during the proceeding include limitation on oral submissions, examination, and presenting submissions. At the end of the proceedings, advocates may present their submissions seven or fourteen days to the date of hearing. Furthermore, the parties way opt to dispense with reasoned awards and exclude their right of appeal if they agree to this. The evaluation of insurance issues in relation to consequential loss and protracted reference by the arbitrator should also be done before the arbitration is closed following any other business. References Agenda for Preliminary Meeting MPR No. 16, N.d. Arbitration Act 1996: Chapter 23 Chartered Institute of Arbitrators, Arbitration rules: For use in England, Wales and Northern Ireland, Chartered Institute of Arbitrators, London, 2000. Craig, W., Park, W. & Paulsson, J., International Chamber of Commerce Arbitration, Oxford University Press, 2001. Dugan, C., Wallace, Don. & Rubins, N. Investor-State Arbitration, Oxford University Press, 2005. Read More