Arbitration Act England 1996 and Arbitration Act Scotland 2010 - Assignment Example

Arbitration Law No: Roll No: Arbitration Law (English and Scot) Introduction Arbitration is a legal term which is commonly used in resolving the disputes amongst the parties outside the court purview. It is the responsibility of the stakeholders to enforce the decision of the arbitrator in letter and spirit. It also includes the form of settlement that comes out through neutral third party. Arbitration is often used in terms of resolving offshore commercial transactions. Further its area of operation may be extended to employee and the employer, the consumer and the manufacturer1. Arbitration Act England 1996 The Arbitration Act 1996 was enforced in the initial quarter of 1997. Under the said act the stake holders are at liberty to choose arbitrator unanimously to settle the issue without referring the matter to the court of law. It does not mean that one should not go to the court to settle the issue outside the court provided the aggrieved party did not satisfy with the decision of the arbitrator2. Arbitration Act Scotland 2010 With the introduction of Arbitration Act Scotland 2010 the Scotland acquires the highest place in the comity of nation due to its state of the art legalities that provides stakeholders comfortable, flexible and less expensive mode to settle down the issues amicably without referring the matter to the court of law. It has an edge over the Arbitration Act England 1996 since it provides extra benefits to the stakeholders because it removes the grey areas that found in other jurisdictions3. The mentioned act in fact is mix of old statute and case laws which amalgamated into one act and named it as Arbitration Act 2010. This act is available in one page legislation whereas in other countries we will find it in voluminous pages. The one page document is easy to read understand and to implement. Therefore, the countries situated out of the purview of English borders enjoying the freedom of this act which facilitates the stake holders in resolving the issue at an affordable time and with less expense to be incurred4. Seat of Arbitration in London It plays a major role in determining the scope of application of the Act if an award is found fit and appropriate to have a place in the place of seat. If it is made out of the purview of English territorial jurisdiction, it can be implemented under the Geneva and New York Convention as the case may be. It has nothing to do with the appeal of an aggrieved party or the request for revision in court of law which has the possibility in the domestic award5. The choosing of London seat as an arbitrator by the offshore countries around the globe amounts to reposing confidence in the decision of arbitrators. The arbitrators of London have considerable knowledge, skills, expertise and experience in disposing of complex and technical international disputes. The arbitrators of London usually dealt with the cases of insurance, construction, engineering, oil, gas and shipping industries. They also offer their services in the field of banking and financial institution to resolve their complex transaction according to law6. The Arbitration Act in question provides a road map where no other rules are inserted in the arbitration agreement executed between the stakeholders. It provides a completed mechanism to enforce its award. There are other forums to decide the complex international commercial transactions. Details of which are as follows: International Commercial Arbitration International Commercial Arbitration requires the stakeholders to choose the substantive law which deals with the disputes provided clause of arbitration inserted in the agreement inked by the executors. The parties are at liberty to choose a law applicable in a particular jurisdiction. The applicable law in a particular jurisdiction refers to enforceable general principles of law of the land. Sometimes party tends to prefer neutral third party to arrive at a just and fair decision7. Role of ICC in Resolving Disputes The role of International Chamber of Commerce in trade promotion, fighting against menace of corruption or corrupt practices or to eliminate commercial crime and resolution of commercial disputes amongst the sovereign nations is laudable. The ICC establishes contacts with the domestic and offshore government through their domestic and international committees. Its secretariat located in Paris. The functional responsibilities besides others mentioned hereinabove is to provide feedback/suggestions to member countries aims at to promote business and trade amongst the sovereign countries8. Jurisdiction of ICC a) The arbitration cases are on the verge of increase in view the confidence reposed in by the member countries. The arbitration cases decide by the arbitrator(s) strictly in accordance with the rules of ICC9. b) According to UCP (Uniform Customs and Practice) banks extends billions of dollars documentary credits to their potential customers every year to promote trade and business amongst the member countries10. c) The model contract of ICC secures the interest of small businesses who cannot afford the expense of litigation which is time consuming also11. d) The ICC plays an important role in e-business strictly under the rules and regulations devised by itself for e-business12. International Court of Justice The International Court of Justice resolve the disputed cases in line with the International law referred to it by either of the member sovereign state or authorized organs of the United Nations and the specialized agencies working under it for its advisory opinion. Hence, the role of ICJ is two tiers a) to receive disputed cases from member countries b) to provide advisory services to subordinate offices of UN13. The member states have the prerogative to appear before the ICJ in disputed cases. However, the Court has nothing to do with the applications of Persons, NGOs, MNCs or any other private organization14. Apart from mentioned jurisdiction, State has the privilege to refer the case of its national for the wrongs done by another state to claim compensation against the damages done at the hands of state officials15. The judgment of ICJ is binding and legally enforceable by the losing State in letter and spirit. Look at the Article 94 of the UN Charter which clearly states that "each member of the UN undertakes to comply with the decision of the court in any case to which it is a party"16. It clearly indicates that the judgments require No appeal. However, its jurisdiction to hear the case is challengeable. An appeal for revision due to technical defects in the judgment may be acceptable for the court to reverse its decision if found fit and appropriate17. Arbitration in Hong Kong The sovereign countries and traders have faith in the legal system of Hong Kong. The Hong Kong courts have decided many cases of arbitration. This has reposed confidence of the stakeholders in the judicial system of Hong Kong. In the year 2007 the Hong Kong court of final appeal accepted the guiding principal of maintenance and champerty in the case of Unruh v Seeberger & Anor18. Arbitration in Switzerland It is a unique concept of arbitration funding, introduced by the Switzerland government wherein funding of third party is acceptable. In Switzerland there are people and companies who are providing funds for arbitration and litigation. Most of the companies hailing from UK, Netherlands, Germany and United States of America have shown their willingness to release funds to settle the claim provided they are based in Switzerland and their arbitration seat is in Switzerland19. It is transpired that mentioned countries have sound legal system and that systems have the capabilities to enforce the arbitrator’s decision in complex international transactions in letter and spirit. State Immunity Act The State Immunity Act in fact provides a protection to the citizen of its own country to be sued by the other stakeholders in the court of other countries to implement the decision. Under the mentioned scenario the courts of other countries initiate legal proceedings as per their rules and regulations and not to deal with the rules and regulations of the defendant country. In many cases the writ of one country court cannot be enforced in another country. Now the member of Geneva Convention and the members of International Chamber of Commerce are playing an important role in implementing the decision of an arbitrator20. The government of Languada is not subject to the jurisdiction of any arbitral panel as a sovereign State and that even if the arbitration proceeds, it is immune from all enforcement proceedings. Here the state of Languada has provided State immunity to its people and companies, therefore, the chances of enforcement of arbitration proceedings that took place in another country is out of question. Conclusion We have studies the cited multiple options available to sovereign states to resolve the disputed issues which may vary from case to case. Let us examine the issues involved between the two sovereign states (UK and Languada) to determine which option is most suited to resolve the issue. a) Whether the Government of Languada can terminate the agreement unilaterally on the basis of humorous comments of Director Image services of Toop Gearbox Limited despite its satisfactory performance as per the agreement? Legal position: As per the terms and conditions of the agreement, Government of Languada cannot terminate the agreement unilaterally on the basis of humorous comments passed by the Director Image Services of TGL. b) Whether the arbitrary judgment can be enforced by the government of Languada? Legal position: No it cannot enforce the arbitrary judgment since the government is immune from all enforcement proceedings. However, the affected company may file a suit in a competent court of law of Languada for a fair trial and just decision to implement the award by the UK Court. c) Whether the leaked legal advice received by TGL, given to the Minister of Languada will benefit from advantages or disadvantages point of view? Legal Status: Since the Languada government itself not answerable according to their legislation to implement the writ of the court of England or the court of another country in case of arbitration, therefore, the only option left for TGL to invoke the jurisdiction of Languada Court to claim and enforce compensatory award. d) Whether the law of Languada permits retrospective legislation on all civil and commercial law matters? Legal status: The constitution of Languada permits retrospective legislation concerning civil and commercial law matters. It may endanger the interest of TGL. Further it may harm the influx of foreign investment from abroad due to inconsistent trade and investment policies and retrospective legislation. Hence, the Languada cannot be treated as investment friendly country. e) Whether commercial assets of Government of Languada in Switzerland and Hong Kong can be attached to satisfy the claim of TGL? Legal position: Yes, commercial assets of government of Languada in Switzerland and Hong Kong can be attached to satisfy the claim of TGL provided the UK government refers the matter to International Court of Justice being the only legal remedy left in this case. Bibliography A Redfern and M Hunter, Law and Practice of International Commercial Arbitration (4th edn, Sweet & Maxwell 2004). C Buhring-Uhle and GL Kirchhof, Arbitration and Mediation in International Business (2nd edn, Kluwer Law International 2006). ‘Case Notes on Third Party Funding’ Global Arbitration Review accessed 29 March 2012. G Born, International Commercial Arbitration (Kluwer Law International 2009). G Parry and K Kilburn, Arbitration (Scotland) Act 2010: A New Chapter For Dispute Resolution In Scotland (Nov 2010) accessed 29 March 2012. H Fox, The Law of State Immunity (OUP 2008). H Smith, England and Wales: The Jurisdiction of Choice (The Law Society of England and Wales 2006). J Lew, L Mistelis and S Kroell, Comparative International Commercial Arbitration (Kluwer Law International 2003). Paris Smith and Randall, ‘Arbitration Act 1996’ (2004) accessed 29 March 2012. T Varady, JJ Barcelo and ATV Mehren, International Commercial Arbitration (3rd edn, West Group 2006). Y Dezalay and B G Garth, Dealing in Virtue: International Commercial Arbitration and the Construction of a Transnational Legal Order (University of Chicago Press 1998). Read More