Return to index
Institute of Arbitrators East Anglian Branch “Arbitration Reborn”
or “Arbitration – the new alternative
Geoffrey M Beresford Hartwell
Before I begin, I make no apology for
displaying a painting of the Battle of
Ushant in 1794, better known as the Glorious First of Junei.
It was a noble battle, and takes us back in time.
I don't know how many of you are familiar with
the philosopher John Lockeii,
who lived before that, in the seventeenth century and the first few
years of the eighteenth. Without him, I suggest, none of us would be
It is true that arbitration has a noble and
ancient history. Professor Derek Roebuck (I think he's a member of
the Thames Valley Branch) has written books on arbitration in Ancient
and among the Romansiv
as well as in Early Englishv
The modern story, I suggest, starts in the
seventeenth century, on 19 August 1696, 300 years before the English
Arbitration Act 1996. That was when John Locke, a physician by
profession, by the way, was commissioned by his fellow members of the
Board of Trade "to draw up a scheme
of some method of determining differences between merchants by
referees, that might be decisive without appeal."
The scheme was Arbitration. The first book
devoted to Arbitration - Arbitrium
Redivivum: Or the Law of Arbitrationvi
had been published in 1694. Matthew Bacon's The
appeared in 1731, with further editions to follow in 1744 and 1770.vii
Books on Arbitration were evidently big
business in the eighteenth century.
But you didn't ask me here to give you a
bibliography. It seems widely accepted that arbitration is failing;
that arbitration is failing the people it was intended for: merchants
and their customers; often also merchants and merchants.
For my friends in construction, merchants
and their customers are builders and
employers; merchants and merchants
are contractors and sub-contractors; architects, engineers and other
hangers-on are all in there somewhere.
The point of my excursion into history is
simply to say that then, as now, the sponsoring ministry was not the
Home Office, nor the Office of the Lord Chancellor, but the Board of
Trade. Admittedly it was a physician then, who dealt
with the details, but it was a practical business that Locke was to
The idea of a process with no appeal was
simply, I would argue, so that each matter could be dealt with as a
matter between parties, with no precedent created and therefore no
need for the Arbitrator or Arbitrators to look over their shoulders
to the possibility of influencing anything but the matter on the
table (and in those days of arbitration of goods by sample it often
was on the very table before them – your shoddy goods could, quite
literally, be weighed in the balance and found wantingviii.).
Jumping forward to 1892
when a precursor of the LCIA was established as the City of London
Chamber of Arbitration, the tribunal – sitting at the Guildhall –
was, according to the Law Quarterly Review, “to have all the
virtues which the law lacks.”. “It is,” the journal continued,
“to be expeditious where the law is slow, cheap where the law is
costly, simple where the law is technical, a peacemaker instead of a
stirrer-up of strife.”
We all know that makes sense; we all know that
is what business deserves and should expect. We know too, however,
that what we have given business is such a top-heavy system that it
isn't worth trying to recover anything less than £100,000 and even
then the costs may well be more than the amount claimed.
We have given business Arbitrations that last
for years, but a man like the late Cedric Barclay would join a ship
in the Pool of London and leave with the pilot, having heard all the
evidence and perhaps examined the cargo or the machinery and spoken
And thirdly, perhaps most importantly, we have
deprived business of arbitration as a peacemaker, the product of an
amicable agreement not to go to Law.
In short, whatever happened to all
the virtues that the Law lacks?ix
That's a rhetorical question. Instead of
answering it directly, I'll look further at the the history and the
way James Oldhamx
put it in his paper On the Constancy
and Pedigree of The Arbitrator's Heritage.
Of John Locke's task, he said “He discharged his commission
by drafting what became a 1698 statute encouraging
the use of arbitration, both in England and in America. Locke was
undoubtedly motivated by his belief that among those persons who
actively hindered trade were "multitudes of
That was the Arbitration Act of 1698, described as
“An Act for determining
differences by Arbitration, . . . It shall and may be lawful for all
merchants and traders and others desiring to end any controversy,
suit or quarrel. . . . by a personal action or suit in equity,
by arbitration whereby they oblige themselves to
submit to the award or umpirage of any person or persons . . . so
I'll dwell there briefly to emphasise the last words
– so agreed.
It's that agreement that lies at the root of everything we do in
arbitration. I make no apology for saying that – or if I do I
justify it by saying that it is the implication of that agreement,
that arbitration agreement, that is the source, the fons et origo
of all arbitral theory, of all arbitral jurisprudence or
meta-jurisprudence if you like.
Whether Locke was right or not in accusing those multitudes of
lawyers of hindering trade I know not. What I do know is that any
such hindrances would have been swept away by the act of 1698.
Lawyers are not to blame for the state of arbitration. Look at the
English Arbitration Act 1996; as I recall, but I'm
open to correction, lawyers are mentioned twice: in section 36xii
it is necessary to permit a party to be represented by a lawyer
or other person; if a solicitor is involved, section 75xiiimay
protect his costs.
Unless you're all very old-fashioned academics I'll bet that you
won't have thought about s. 36 very closely before.
I argue that it's a permissive provision. Just look at the words, “a
party . . . may be represented.”
I'm not suggesting that parties should not be represented by lawyers
or by engineers, by quantity surveyors or by accountants or anyone
else if they chose. Of course they may. That's what the English and
other statutes say. But it's a permission.
My contention is that there is nothing in the English legislation, or
in the history of arbitration that requires lawyers or anyone else to
bring their baggage with them. Their legal knowledge, yes of course;
their analytical skills, yes please. We won't discuss whether the
Common Law uses logic; now isn't the time.
Let's remind ourselves of Locke's brief: "to
draw up a scheme of some method of determining differences between
merchants by referees, that might be decisive
without appeal." If I may, I'll ask you to look, too, at my
favourite extract from the OED (in deference to our hosts, I didn't
spell out the words in full).
a. The settlement of a dispute or question at issue by one to whom
the conflicting parties agree to refer their claims in order to
obtain an equitable decision.
first thing to notice is that, from these sources, we learn what an
arbitrator is. He or she is a referee, but that means nothing more
(or less) than some one to whom the parties refer. Not a Judge at
all but possibly a juror or an investigator of a kind. Alone, or one
of three, or more rarely one of five. I'd like to tell you of the
excellent tribunals of two, one expert, one lawyer, each deciding
issues in their own field, but I would be drummed out of the
the equitable decision that might be decisive without appeal, as we
are in England, I'll let the Arbitration Act 1996
speak for me – again. “Section 1, General principles. The
provisions of this Part are founded on the following principles, and
shall be construed accordingly – (a) the object of arbitration is
to obtain the fair resolution of disputes by an
impartial tribunal without unnecessary delay or expense.”
yes, you've seen it before. Many times; many, many times. You've
all seen it, but have you read it; really read it, word by word?
Parliamentary draughtsmen don't waste words. Powerful words “the
fair resolution of disputes”. Does that mean a fair result, or
does it mean we have to use a fair method? Due process, as they say
three or four thousand miles to the west of us. And is the operative
word “process” or is it “due”, meaning appropriate or
the Court, our friends, our learned friends, believe that, if the
correct procedure is followed, necessarily the result is correct.
Well, I'm not a lawyer and I know nothing about that. In Court, one
is concerned with what has gone before; experience within Courts and
among Counsel and other lawyers is of vital importance. And so it
should be – it is out of that experience that law develops.
Arbitrator is in the here and now. There are no arbitral precedents.
They can't be made because an arbitral Award binds only the two
(perhaps more) involved in the immediate matter. Even the
Arbitrators aren't bound by their own past decisions; tomorrows
arguments may be different from yesterday's.
I say should discourage the lawyers who dominate modern arbitration.
Of course I respect them; many of my best friends, and indeed my best
students, have been lawyers from Anglo-Saxon, Asian and Continental
jurisdictions, to say nothing of that distinguished legal district to
the North, fish fowl and
good red herring. I only wish that, when Arbitrators, more of them
would act like Arbitrators and not like Judges. Judge not, that ye be
has been my purpose to suggest that the key to Arbitration is not the
emulation of the Court, whether in letter or in spirit. Arbitration
is fundamentally different. Easier in that a depth of legal
experience isn't necessary. It may be nice, of course, but it may
also tie your hands. Arbitration may be more difficult because, as
the English Act says at section 33xv
the Arbitrator has to adopt “procedures suitable to the
circumstances of the particular case, avoiding unnecessary delay or
expense, so as to provide a fair means for the resolution of the
matters falling to be determined”.
asking a lot. What you did last time isn't good enough; your
immediate task, your duty as Arbitrator is to understand the
particular case well enough to know precisely what you need to decide
that case. If I'm right, then the skill the Arbitrator needs is the
skill required to ascertain how to determine this one dispute; I say
that part of that skill is knowing what evidence or argument you want
for your decision.
sounds dangerous. Don't we have to give each party “a reasonable
opportunity of putting his case and dealing with that of his
opponent”? (Also in section 33). Yes, of course, but his case as
to the decision you have to make, that's all.
now you'll be feeling that sensation you get in the hair of the neck
when something's odd. I’d better come down to earth and explain
the usual procedure in the Court and in many arbitrations, each party
sets out his case and nowadays files statements, first of witnesses
of fact then of expert witnesses, who are often themselves witnesses
also of fact. All the documents required by a party are copied and
served; in the United States but now more rarely in Britain, the
entire files of a project may be disclosed with other documents of
notional relevance but no use. Any site inspection may be late in
the day and possibly during the very period set down for hearing.
all that may be needed to decide the issues; but it may well not.
The Arbitrator ought to have looked at the initial Claim and Defence,
which may be no more than Request for Arbitration and Answer (audi
remember) and then, in correspondence with the parties, or in
teleconference or in preliminary meeting if practical (a journey to
East Asia from London costs around £4,000 and we have to avoid
unnecessary expense!) to have discussed exactly what the parties seek
and how it's to be done.
again that is part of an Arbitrator's skill. I don't like to think
how many times I've come home from a preliminary meeting to report
that the parties have settled or are likely to settle. One's
accounts department will be unimpressed but I have to say that, if
your reason for practising in arbitration is mainly financial, you
need to think carefully. I had better stop there. I'm ashamed to
say that I seem to have settled more Arbitrations and Adjudications
than I have Mediations, but that's by the way. I do fewer
the parties, their Counsel and experts have to prepare blind, so to
speak, then of necessity each will have to deal with every point and
every argument that their opponent may decide to canvas. The
Respondent may have to find witnesses to refute the evidence of each
of the Claimant's witnesses and vice-versa.
I wonder how many of you have known of witnesses summoned but not
called; some of you may have had that experience. It all costs
money, contrary to s.1(a) of the Arbitration Act 1996.
the Arbitrator is on the ball, he or she may see straight-away the
salient features which will lead to the decision. I don't suggest
jumping to conclusions, far from it. But to ask questions may help
the parties a great deal provided that your mind remains open.
can see already that to be an old-fashioned arbitrator, a seriously
hands-on arbitrator, is hard work. You have to read the papers; you
have to understand the issues better than Counsel.
me call your attention to a remark by Mr Justice Coulson in a case in
December 2011. He said, “Although
there was a good deal of factual material before the court, the vast
majority of it seemed to me to be wholly irrelevant to the dispute
between the parties.”xvi
and Arbitrators have been saying such things since time immemorialxvii.
hope that the approach I have been describing will help to discourage
the disclosure of irrelevant material. It's important to bear in
mind that a tribunal is only human and that, in making a finding when
faced with a great bulk of material, inevitably will have to choose
what appears to be relevant and discard the rest. Decision making is
based on what is selected: the wheat sorted from the chaff.
have been leaning heavily on the differences between Litigation and
ADR in general, Arbitration in particular, it is because we already
have been taught the similarities but the differences are
like now briefly to explore an implication of one of the differences.
Some of you may know that a number of arbitral institutions, of
which the ICC is, as always, a leading example, have introduced
“Emergency Arbitration” to provide parties with a means for
obtaining interim measures without having recourse to the injunctive
powers of a Court.
don't criticise that; it isn't my place to do so. I merely mention
three points: a) an arbitral tribunal, however constituted, cannot
bind those, such as a bank holding assetsxviii,
not party to the arbitration agreementxix
b) an arbitral tribunal has no coercive powers if its orders are
c) an application ex
which necessarily has to be made without notice to the respondent, is
contrary to the rules of Natural Justice which should govern private
conduct in general and ADR in particular.
distinction between a private process agreed between two willing
and the overarching power of a State, to which all in the
jurisdiction are subject, seems obviousxxiii.
Arbitration, I argue, isn't some autonomous legal system; it's just
what people have agreed to do. No more but certainly no less.
simple thought gives one something to hang on to in the most complex
of matters. Arbitration is just something agreed between the
parties. It isn't a Court process, although it may look like it on
occasion. It isn't a process at Law at all, although it is
recognised by the Law; because it is agreed.
some ways Arbitration is difficult to discuss. I argue that it isn't
a process at Law. It's legitimate, we would hardly be here if it
were not. It's legal, but it isn't of the Law. It's legal in the
sense that marriage is legal. The analogy is not bad, marriage is
legal, but lawyers have little or no business with marriage until it
goes severely wrong. In the first edition of Commercial Arbitration,
Lord Mustill said words to the effect that the Law of Arbitration was
actually the Law regulating the intervention of the Court into
Arbitration. In my admittedly lay opinion, although the arbitrator
now has duties to the State the broad principle is unchanged. You
may care to consider whether S.1 (c)xxiv
repeats Lord Mustill's original contentionxxv.
a student is asked how an arbitration should be conducted, he or she
probably will refer to the procedure of one of several mighty
institutions LCIA, ICC, perhaps the UNCITRAL Rules or CIMAR the Rules
drafted by the Society of Construction Arbitrators both of which are
for use where an arbitral institution is not involved. When you ask
an experienced arbitrator what is the correct procedure for
arbitration, however, I suggest that he or she will say they don't
what do we do at a preliminary meeting before giving directions? The
purpose of the meeting is clear, I hope, from what I have said
not to fit the issues and the steps in the reference into the
structures we know well. It is not simply to create a timetable for
the submission of Claim, of Defence and Counter-claim, of Defence to
Counter-claim, to be followed by witness statements, discovery and
that the purpose of a preliminary meeting is to tell the Arbitrator
enough to let him decide what he or she needs to know in order to
make the decision or decisions that are needed for the Award. It is
very much more than a hearing for directions.
Counsel, used to the Court and its procedures, may find my idea of a
preliminary meeting something of a surprise. Nothing in arbitration
should be a surprise, so it seems to me that it is up to the
arbitrator to make it clear, quite clear, exactly what he or she will
expect of the parties and such lawyers or other persons as will
high time that I sought to justify the title of my talk. In
particular, the phrase, “Arbitration – the new alternative to
Adjudication”. Adjudication, of course, is prescribed by law for
the British construction industry. There are other countries that
have followed suit. Adjudication, albeit in a slightly different
regime, is prescribed in the FIDIC series of contract forms.
essence, I have argued, the intellectual task of an Adjudicator is no
different from that of an Arbitrator. It is to form a view as to the
facts and circumstances and to apply to them the intention of the
contract between the parties. Some would say, “to apply the law”
but that creates a difficulty in England and Wales with section 1(a)
of the Arbitration Act 1996, “the
object of arbitration is to obtain the fair resolution of disputes by
an impartial tribunal without unnecessary delay or expense”
is the AA 1996 relevant in Adjudication? Simply because, in the
the decision of the Adjudicator is effective unless and until it is
superseded by a decision of a Arbitrator or a Judge. In the
international example, the FIDIC series of contract forms, the
decision of an Adjudication is similarly effective unless a Party
gives a Notice of Dissatisfaction within a fixed period, failing
which the decision becomes final.
differences appear to have a psychological as well as a procedural
effect. They enable the procedure to be less formal, less obsessive.
The result is that many Adjudication decisions are achieved in a
fraction of the time and with less procedural preparation than would
be required for Arbitration. A good thing? Yes, of course, but the
purpose of this talk is, quite simply, to argue that such efficient
simplicity is available in Arbitration and always has been.
digress, if I may, to mention a curiosity of the laws of England &
Wales and of Scotland. The English Arbitration Act and the Housing
were drafted at the same time. In the Arbitration Act 1996 there is
a provision xxviii
for provisional awards or provisional relief to be made. Had it not
been necessary for the parties to make a special agreement, that
section could have provided a regime precisely like that of the
Housing Grants Act, save that it would have been universal in
application and not limited to the construction industry.
the English legislation is irrelevant. It is always open to parties
in arbitration to agree that their arbitrator or arbitrators may make
a provisional award that stands subject to revision by the same or a
different tribunal. A number of commodity associations have used
standard contracts with an inbuilt appeal arrangement for years. I
would argue that, in such a context, the awards at first instance
are, in fact, provisional.
am conscious that I have touched on but a little of the fascinating
subject of ADR, the regime in which two or more individuals or
entities create their own solutions without the intervention of the
State. I don't feel I have told you much. If I have encouraged you
to ask yourselves questions, I have done what I set out to do. And I
think I have taken too long over it. If you ever wondered why so
many of us talk so much, let me commend this link -
“The Science of Bragging and Boasting” by Robert Lee Hotz,
Health & Wellness updated May 7, 2012
Return to index
Glorious First of June
(also known as the Third
Battle of Ushant, and
in France as the Bataille
du 13 prairial an 2 or
Combat de Prairial)
of 1794 was the first and largest fleet action of the naval conflict
between the Kingdom of Great Britain and the First French Republic
during the French Revolutionary Wars. The British Channel Fleet under
Admiral Lord Howe attempted to prevent the passage of a vital French
grain convoy from the United States, which was protected by the
French Atlantic Fleet, commanded by Vice-Admiral Louis Thomas
Villaret de Joyeuse. The two forces clashed in the Atlantic Ocean,
some 400 nautical miles (741 km) west of the French island of Ushant
on 1 June 1794. http://en.wikipedia.org/wiki/Glorious_First_of_June
accessed Wednesday 15 February 2012:14:12:45 back.
Locke FRS (29 August 1632 – 28 October 1704), known as the Father
of Liberalism, was an English philosopher and physician regarded as
one of the most influential of Enlightenment thinkers. Considered
one of the first of the British empiricists, following the tradition
of Francis Bacon, he is equally important to social contract theory.
His work had a great impact upon the development of epistemology and
political philosophy. His writings influenced Voltaire and Rousseau,
many Scottish Enlightenment thinkers, as well as the American
revolutionaries. His contributions to classical republicanism and
liberal theory are reflected in the American Declaration of
Greek Arbitration, Derek Roebuck, Arbitration Press, Holo Books
Ltd, ISBN 0-9537730-1-9, Hardback, 420 Pages, Published
by HOLO Books: The Arbitration Press, 2001.
Arbitration, Derek Roebuck and Bruno de Loynes de Fumichon ISBN
0-9537730-3-5, Hardback, 295 Pages, Published
by HOLO Books: The Arbitration Press, 2004.
English Arbitration, Derek Roebuck,
ISBN780954405618, Hardback 336 pages, 4 maps, endpapers, dustjacket,
220x140mm, Published by HOLO Books: The Arbitration Press, 2008. He
quotes a fragment of an award dated 14 March 114AD.
redivivum: or The law of arbitration; collected from the law-books
both ancient and modern ... with several forms of arbitrements or
awards, Printed by R. and E. Atkins, for Issac Cleebe, 1694, 93
The Compleat Arbitrator (1731).
Law may not lack those virtues as much as it did then. Still
technical in their approach the courts have nevertheless improved in
their accessibility and efficiency. The writer would argue today
that the principal virtue of Arbitration is that of the judgement of
National Academy of Arbitrators; Professor, Georgetown University
Law Center, Washington, D.C.
Record Office, London, Colonial Office 39,1/9, 62. The full story of
the legislation resulting from this commission is told in Horwitz &
Oldham, John Locke, Lord Mansfield, and Arbitration During the
Eighteenth Century, 36 Hist.J. 137 (1993). at 139.
Legal or other representation. Unless otherwise agreed by the
parties, a party to arbitral proceedings may be represented in the
proceedings by a lawyer or other person chosen by him.
Charge to secure payment of solicitors’ costs. The powers of
the court to make declarations and orders under section 73 of the
Solicitors Act 1974 or Article 71H of the Solicitors (Northern
Ireland) Order 1976 (power to charge property recovered in the
proceedings with the payment of solicitors’ costs) may be
exercised in relation to arbitral proceedings as if those
proceedings were proceedings in the court.
A selfish little trick
favouring the legal professions (if the solicitors get their money,
the barristers are paid!).
General duty of the tribunal.
fairly and impartially as between the parties, giving each party a
reasonable opportunity of putting his case and dealing with that of
his opponent, and
procedures suitable to the circumstances of the particular case,
avoiding unnecessary delay or expense, so as to provide a fair means
for the resolution of the matters falling to be determined.
Construction Ltd v Mulalley & Company Ltd  EWHC 3449 (TCC)
(21 December 2011)
the first Statute of Westminster (3 Edw. I cap. 5) 1275, , the
time of memory was limited to the reign of Richard I (Richard
the Lionheart), beginning 6 July 1189, the date of the King's
accession. Since that date, proof of unbroken possession or
use of any right made it unnecessary to establish the original grant
under certain circumstances. Later, time immemorial was
re-defined by the Prescription Act, 1832 (2 & 3 Will. IV cap.
71) s.1 as "Time whereof the Memory of Man runneth not to the
contrary." Just so that we are clear!
it can be established as an alter ego of the principal party.
who is party to the agreement may be an open question. Dallah
Real Estate and Tourism Holding Company v The Ministry of Religious
Affairs, Government of Pakistan 
UKSC 46 cf. Gouvernement
du Pakistan Ministere des Affaires Religieuses v Société Dallah
Real Estate and Tourism Holding Company, Cour
d’Appel [CA][regional court of appeal] Paris, Feb. 17, 2011,
09-28533, 09/28535 and 09/28541.
in most jurisdictions, a court may enforce an arbitral order at its
term is widely used, in ADR practice, for hearings of one party in
the voluntary absence of the other. The crucial requirement of such
a proceeding is that notice be given so that the absent party can
take part. In English (and other) Courts, however, ex parte
often means “without notice”.
right, but at least we deem them to have been willing when they made
note: “. . . the main premise -- which
has it that, in international commercial relations , the incremental
organic creation of an autonomous system may be observed which
operates on the basis of rules of law rather than legal systems --
is appealing and increasingly well-founded.” Unidroit
Principles Applied as "Most Appropriate Rules of Law" in a
Swedish Arbitral Award, Loukas
Mistelis*, Uniform Law Review / Revue de droit uniforme, vol. VIII
*LLB (Athens), MLE, Dr Iuris (Hannover),
MCIArb, Clive M Schmitthoff Reader in International Commercial Law,
School of International Arbitration, Centre for Commercial Law
Studies, Queen Mary University of London (United Kingdom); Adjunct
Professor, Pace University Law School (United States of America) and
Secretary of the CISG-AC).
(c) AA 1996 in matters governed by this Part the court should not
intervene except as provided by this Part.
writer believes that his Lordship now favours the view of the
arbitrator's role as one of status, rather than of contract. No
reference can at present be given but the author's lay opinion is
that, whether status or contract the arbitrator's role is a role sui
Housing Grants, Construction and Regeneration Act 1996.
Power to make provisional awards.
(1)The parties are free to
agree that the tribunal shall have power to order on a provisional
basis any relief which it would have power to grant in a final
(2)This includes, for instance, making—
provisional order for the payment of money or the disposition of
property as between the parties, or
(b)an order to make an interim
payment on account of the costs of the arbitration.
order shall be subject to the tribunal’s final adjudication; and
the tribunal’s final award, on the merits or as to costs, shall
take account of any such order.
(4)Unless the parties agree to
confer such power on the tribunal, the tribunal has no such
power.This does not affect its powers under section 47 (awards on
different issues, &c.).