Geoffrey M. Beresford Hartwell
is but one law for all, namely the law which governs all law, the
law of our Creator, the law of humanity,
Part 1 -- The Theoretical Basis of Arbitration
This paper is about arbitration in the international context. It is a peculiarly interesting subject. In a limited way, limited by the nature of the class of dispute with which we can deal and limited also by the recognition which nation states are content to allow, international arbitration represents a kind of law beyond law - you might almost call it the philosophy of law in action - yet very much at a practical level, useful, perhaps even essential, to business throughout the world.
This paper is the first in a series principally directed to the practical aspects of arbitration and to a comparison of methods and techniques in a variety of jurisdictions, yet what I wish to discuss is not method but principle, that is to say not "how?" but "why?". I want to invite you to think about what Arbitration is and perhaps then about its implications. To do that, I shall be looking beyond the confines of England and Wales, because what I have to say seems to me to have a wider scope.
I hope to demonstrate that Arbitration is not, as is sometimes supposed, a part of the legal system. I believe it to have a more fundamental justification than that; I will take you through some arguments to support my view that, in accepting an appointment as Arbitrator or in acting for a Client in arbitration, you embark on a noble task.
Some of you may think that it is curious that what seems to be a particularly esoteric province of the law should be presented to you by someone who professes no law at all. Perhaps one of those whom Kipling had in mind when he spoke of "Lesser Breeds without the Law." I make no apology for that. Law must be accessible to all, and open to analysis by all. If Law is a private fief, a mystery known only to a privileged few adepts, then all pretence to Justice is lost.
I will begin by taking you back to the fundamentals. I apologise if, by doing so, I seem to ignore your knowledge and experience of law, but my premise has to begin with a foundation which is logically sound. That requires me to set my argument in context.
There exists, of course, a body of law, a very sophisticated body of law, about contracts, relationships that come about by agreement; there is a similar body of law about other obligations which arise independently of agreements. To a greater or lesser degree, whatever our quarrel with our neighbour, the power of the State can be brought to bear on the rights and wrongs of it.
Most of us are used to the idea that the State should step in to deal with our private relationships; an idea so commonplace that we take it for granted, without asking the question which all self-respecting toddlers ask - Why?
In history, it was not always so. In English Law, for example, quite complex legal fictions had to be developed to enable the Courts to deal with private relationships. Land always was a matter for the Crown, but before you could invoke the power of the king and his judges in any other context, you had to answer the first question: "Why should we intervene in your private affairs?" or, in modern words, which you may recognise, "What's in it for us?"
Broadly speaking, there were two ways to answer that question. If the matter were one within the scope of an ecclesiastical court, then it would suffice to allege that it was a matter of conscience, but your own conscience had to be quite clear before you could take that line with any safety.
Otherwise the ploy, if I may call it that, was to protest that, because of your neighbour's failure to comply with his bargain, you were unable, or less able, to pay your taxes. That idea would engage the King's attention. It was the origin of the writ of quominus and provided the essential link between your private contract and the more or less enlightened self interest of the Court.
I said there were two ways. In fact, there was another aspect of policy which could motivate the Court and the Crown to assist an allegedly injured party. It springs from the principle of the King's peace. If an injured party were to have no recourse available, then the only remaining choice would be self-help, retaliation, or seizure of the goods, or of money, by private force.
Clearly, as Society became more regulated, self-help became less acceptable, for obvious reasons, at least one of which has come down to us as a guiding principle in Rugby Football "Get your retaliation in first." The validity of this policy is illustrated rather well in those countries where gambling of one kind or another is permitted but where gambling debts cannot be enforced at Law. Two choices are open to the creditor. One is to "warn off" the offending debtor, which is a relatively civilised method used in horse racing. The other is recourse to violence which, since its purpose is to set an example to others, may be very unpleasant.
I have used English Law for the purposes of illustration. In other countries, the Roman tradition remained in place and the principles of the Law of Obligations developed along rather different lines, but essentially with the same consequences, at least in general terms.
I have looked at the basis for the Law's intervention in private affairs, albeit in a fairly superficial way, to demonstrate that it is by no means a natural phenomenon.
Moreover, there is an additional problem about the intervention of the Law which arises as soon as you start to consider commerce and private relationships across national boundaries. Recognition. The sad fact is that States do not, as a general rule, recognise and enforce the decisions of foreign Courts in private matters.
There are exceptions to that general rule. Some States have reciprocal treaties with others, there are some matters, usually rather restricted, with which Courts will deal in the context of the comity of Nations, and, increasingly, there are arrangements within free trade areas and specific conventions.Nevertheless, it may be said that States generally do not enforce foreign judgements in private law. Arguably, therefore, in private international commerce, there is no Law. Let me repeat that, because it is a surprising conclusion: In private international commerce, there is no Law.
When I first set out on this study, I aimed to produce a clean slate, a tabula rasa as we engineers call it, on which to develop my ideas. Well, you could hardly hope for a cleaner slate than that. No Law.
Fortunately, however, that is only half the picture. For the rest of the picture, I would ask you to think about the necessary fundamentals of human social behaviour, how they apply to commerce, and particularly how they apply to International Commerce. Then I will try to take you back to the firmer ground of Law.
Commerce is an aspect of social intercourse, a practical aspect of social intercourse which has real benefits for the individuals who trade with one another and generally for society as a whole. It is the way in which skills, abilities and goods become available for the common weal.
The prime means for social intercourse, and for facilitating commerce, is language. Language is essentially structured by definitions. At the fundamental level, those definitions are held in common by most, if not all peoples. I exclude, for this purpose, those imaginary islands, beloved of philosophers, where one tribe tells only the truth and the other tells only lies.
Truth or lie notwithstanding, I suggest to you that an exchange of words (or of signs or symbols or, for that matter, of actions) between persons engaging in commerce has the purpose of defining the commerce between them. If that purposive proposition is unattractive, then I suggest that, to make sense of their commerce, their exchange must be taken to have the effect of defining the commerce between them.
I have a peach, you have an apple. I give you my peach, you give me your apple. That is a commercial transaction, perhaps without words. You bite the peach and the transaction is no longer reversible.
Offer and acceptance in the raw, followed by conversion of the goods. The actions define the commerce. Of course commerce is more sophisticated than that. It exists at a higher level of abstraction, a level which depends upon the promise.
Now, the promise is at the root of commercial transactions of all kinds. It is also the basis of intervention at Law. Law enforces promises, but promises are not a creation of Law. The principle pacta sunt servanda is a definition, an identity, a simple truism if you like. Agreements are to be honoured. In mathematical terms pactum ≡ servandum(1); the two words are simply the same in every respect.
It is language, not Law, that makes a pact something to be performed. If it is not to be performed then, quite simply, it is not a pact. If it is a pact then it is to be performed. Now, of course, logical consequences flow and Law will follow those consequences and enforce them.
Nevertheless, Law is the creation of society, not society the creation of Law. Law is the servant of the people; the people are not servants of the Law. At least, if and insofar as the people may be servants of the Law, it is because they are servants one of another and of the State.
To return to the promise, you will see that it is fundamental to the whole conduct of Commerce.
A promise is a fact. Save only for such restriction of the right to make and enforce promises as may be accepted as a matter of common principle or may have become the subject of legislation or other legal sanction in individual jurisdictions, it is a commonplace that commercial promises are effective and will be enforced by systems of Law worldwide. As I have said, there is a practical difficulty in taking the decision of a State Court outside its own borders, but that is only a practical difficulty, not something that detracts from the universal nature of the promise.
I would like now to turn to one class of promise that is so universally recognised that it transcends, in effect, the limitations of national jurisdiction. It is at once an ethical promise which puts commerce on to a higher footing and a practical promise which makes possible free commerce between nations. A promise, moreover, which has created an entirely distinct and separate jurisprudence or, more correctly perhaps, meta-jurisprudence of its own, more complete and arguably more just, within the limited scope of its application, than any National Jurisprudence.
Let me go back to the fruit. I have a peach, I would like an apple. You have an apple and would like my peach. I promise to give you my peach, you promise to give me your apple, but only if the peach is ripe and not rotten. That may be in words, it may be a customary term in the exchange of fruit. We look at the peach and cannot agree. We decide to ask a friend about the peach and agree to do as he says. (As it happens, you can judge for yourself by looking at the picture which heads this paper!)
That is another level of promise. We promise one another that we will comply with a friend's decision. In doing so, we each relinquish a measure of personal freedom. We do not elevate the friend beyond us. We do not cloak him in a gown, we do not put a cap or a wig upon his head, still less a crown. We merely say to each other that we will abide by what he says. Incidentally, if neither of us likes what he says, we can agree to ignore it. Save where the State or others have a direct interest in it, the parties to a promise may release each other by consent whenever they please. It is that promise that is the basis of private arbitration.
You will find that much debate about arbitration takes place in what appears to be a legal context. If my submission is correct, then arbitration does not have its basis in Law but in a more fundamental principle of human society.
Law has relevance, however, for a number of sound reasons: First, perhaps, is that, in a complex society, it may be assumed that commercial transactions take place in what may be called a climate of Law, so that common legal principles, at least, may be taken to have been in the contemplation of the parties to any promise and thus to form a part of the promise. Secondly, if the promise to abide by the outcome of an arbitral reference is not honoured, then a Court may be asked to enforce it; in those circumstances it would be surprising if the Court did not expect the decision it is asked to enforce to be one which it can countenance, even if it is not one the Court itself would have made. Thirdly, Law in general, and Commercial Law in particular, has developed largely to recognise bargains and reasonable expectations between parties, so that it is more than likely that the private decisions made by an arbitral tribunal will be at one with the decisions that an appropriate Court would have made.
One may summarise all that by saying that there is a presumption (which may be rebuttable by evidence, by the way) that a contract between parties is to be taken as according to the appropriate Law, so that an Arbitral Tribunal will be bound by that Law, even if its methods of proceeding are not the same as those of the Court.
Apart from procedure, the other principal differences between arbitration and the Court are first that, because the arbitral tribunal is private and created only for the purposes of the immediate reference, it does not make new Law, does not interpret law for the purposes of others and therefore has only the concerns of the disputing parties in its mind.
The second principal and often important difference is that the arbitral tribunal is not concerned with the interests of the State. If commercial arbitration is a private affair, and if the principles underlying it are philosophical, rather than legal principles, then how is it of practical value? You and I may ask for an honest man to decide between us, but what if one or the other reneges on the agreement? Honest men do not have armies.
Essentially, there are two methods of enforcement. One is purely commercial. In many trades, there are associations whose practice is to publish the names of those who fail to comply with the decision of an arbitral tribunal. That may put an end to the credit of the trader so identified. It may put an end to his ability to trade. It is a draconian sanction. Like many sanctions, to invoke it brings no satisfaction to the injured party, but it creates a powerful incentive for compliance.
The second method of enforcement is through the Courts. Almost every nation recognises the promise to arbitrate and, subject usually to various local conditions, will enforce the decision of an arbitral tribunal. It is when the Courts are asked to assist in an international matter, however, that the full rationale and advantage of arbitration can be seen. That is because there exists a mechanism whereby the decision of a foreign arbitral tribunal may be recognised and enforced almost anywhere in the world.
I ought to emphasis here that, unlike the judgement of a national Court, the award of an arbitral tribunal may be enforced almost anywhere in the world. The mechanism for recognition and enforcement of foreign awards is The New York Convention of 1958(2) . Even England and Wales, possibly the most chauvinist of nations in the value set on their national Law, adopted the Convention (in 1975, which was swift by English standards). I have discussed the New York Convention elsewhere(3) but for now I ask you to view it as a Convention based upon the ethical principle of the promise, of pacta sunt servanda, rather than upon Law, which I say it transcends. I have discussed this ethical principle earlier in the paper, at page 4.
It is this almost universal international recognition, which is subject to a very limited control, combined with the moral and ethical principles that I have outlined, that has made International Commercial Arbitration, for most practical purposes, the inevitable method of choice for determining issues in International Commerce.
The secondary advantages, such as efficiency and confidentiality, are just that - secondary, as is the advantage of selecting a tribunal having familiarity with the issues or with the trade. The vital feature of International Commercial Arbitration is that it is recognised by the Law in almost every country, but free of the influence of any State. In its limited area, it brings us as close to the ideal of Justice as we are likely to get.
Whether I am right in my somewhat free-thinking concept of the arbitral process, which is essentially an expression of the so-called "promissory" or "radical" hypothesis of arbitration or whether my jurist friends are more correct in their presentation of arbitration as a kind of licensed extension of the Court into the private sector, the "jurisprudential" hypothesis, is now a debate of little other than academic interest. For all practical purposes, the New York Convention ties them firmly together, as do the various forms of legislation by which arbitration is linked to the legal systems of the nations.
In addition, whatever else may be said about it, the UNCITRAL Model Law provides a very fair and practical guide as to those aspects of laws applicable to arbitration which are commonly held. There is, therefore, a basis to our study which is practical and need not depend upon our philosophical approach (although there may be times when a return to first principles provides a new light upon an immediate problem).
My purpose is to set in motion some trains of thought which you may find interesting and supportive as my distinguished colleagues take you through the work of the days which follow. The first was the universal nature of the promise and the special importance of a promise to abide by the decision of a tribunal of your own making. Another is about the implications of arbitration as a practical choice.
Now, as this article originally was drafted for an Oxford Summer School, might be as good a time as any to remind you of the definition of arbitration in the Shorter Oxford English Dictionary:
Arbitration 1. Uncontrolled decision 1651. 2. The settlement of a matter at issue by one to whom the parties agree to refer their claims in order to obtain an equitable decision 1634.
Well, I know that there is at least one learned judge here in England who would suggest that the first was a fairly good definition. With great respect (another well known saying among engineers) I do not agree with him and I want to concentrate on the second definition, the definition of Arbitration as we understand it.
The definition makes remarkably clear and efficient use of language. It is all there. The settlement of a matter at issue by one to whom the parties agree to refer their claims in order to obtain an equitable decision. No mention of the Court, no mention of the legal system, no mention of rebuttals, rejoinders, surrebuttals and surrejoinders, no mention of any White Book, Green Book, Code de Procedure Civile, rules or any of the paraphernalia which give us so much opportunity to waste time and employ ourselves at the expense of the hapless and often unwitting parties.
I go further, looking at the definition in the context of English Law: What of equity? Although the Judicature Acts of 1873 to 1875 sought to fuse only the administration of law and equity, they did more than that. Inexorably, the flexibility of equity was lost as more and more discretionary powers of the court came to be the subject of rules, interpreted in the more or less formulaic manner that has come to exemplify English Law in action. The present position is very largely one in which the flexible concept of equity could be said to have been subsumed into law and, indeed, tamed by the Court.
If I were to argue the extreme, I would say that there is no longer any independent concept and practice of equity within the English Legal System. Sir George Jessel, M.R., were he alive today could say again, as he said in the late nineteenth century, "This Court is not, as I have often said, a Court of Conscience, but a Court of Law." (Re National Funds Assurance Co. (1878), 10 Ch.D. 118, at p.128).Interestingly, and half way around the World, Oliver Wendell Holmes said much the same. Perhaps it may have been to silence a "bleeding heart" advocate, I do not know, but Holmes said "This is a Court of Law, young man, not a Court of Justice."
How sad that is. These were great men, but no equity means no justice. That is why people need something else. Law is no longer predictable, because law has to develop in the Courts. Decisions are capricious and the expense intolerable. There must be a way for parties in dispute to solve their differences themselves.
That is what Arbitration is. It is a means for parties to determine their differences themselves. They do that by agreeing to appoint someone of their choice to determine their differences on their behalf. The Arbitrator makes the decision they cannot make, but, and I repeat myself, he makes it on their behalf.
The judge has all the honour and panoply that go with his office. He or she is a high Officer of the State, worthy of every respect and entitled to every deference. That must be right. An arbitrator is just a worker, under a duty to do his best, but with no authority other than the will of the parties themselves.
Nevertheless, I suggest to you that there is no higher honour, in the field of international commerce, than that of being freely selected by professional colleagues or commercial parties to determine issues between them and to make the decisions they cannot make. No higher honour and no more fascinating area of study, whatever our profession.
Part 2 -- Arbitration in perspective as a method of dispute closure
Now, I turn to the range of methods available for the determination of disputes. Disputes between commercial parties. What I intend is to review a number of methods and, at the same time, indicate where the expert is able to play a part. I will try to set out the methods in a kind of spectrum, to show that the natural and informal merges with and moves to the more artificial and formal in a relatively seamless progression.
It may seem pedantic to include the passage of time as a method of dispute resolution but it has a place in the scheme of things. Tom Beauchamp, in his article Ethical theory and the problem of closure(4) , describes closure by natural death if, and only if, a controversy has come to an end through a gradual natural death. Issues are sometimes closed out, he says, even though there has been no definite intention to close them out, no procedure for closure employed, and no sound argument resolution known to have been provided. Interest in the issues simply disappears. Practitioners play little direct part in that process, although they may play a part in what Beauchamp called sound argument closure, which occurs if, and only if, a correct position has been reached in a context of controversy, thereby rendering opposed views incorrect. Clearly that is a position which well might result from study or investigation.
The method often forgotten by professionals is at once the most effective and the most sensible discussion among the parties themselves. Whether that is on the golf course, at the lunch table or in more formal surroundings, it is often the least expensive mode of resolution as well as being the most amicable. The role of the professional in such negotiation may be to explain the causes of events or to indicate the likely consequences of a course of action. He or she may assist in a neutral way or may be at the elbow of the negotiators. The value of an professional, even in informal negotiation, lies in the disinterested advice given and in the duty of a person with special qualifications, whatever they may be, not to use his or her esoteric knowledge improperly.
Among the logical developments of simple negotiation are all
the so-called ADR (Alternative Dispute Resolution) processes which
use the assistance of a Third Party. To make sense of them, it is
probably wise to divide them into three principal categories:
a) facilitative, in which the third party's role is essentially one of creating understanding between the disputing parties;
b) interventionist, in which the third party seeks to find solutions for the parties; and
c) determinative, in which the third party actually decides the issues for the parties.
Determinative processes divide again into
those which are voluntary, both as to taking part and as to adoption of the decision;
those which are voluntary as to taking part but which create an enforceable decision and
those which are coercive at both levels.
Strictly speaking, only national legal systems are truly coercive both as to taking part and as to compliance. Recourse to the Court is important for two main reasons. The first is that it is the means whereby the power of the state, the imperium, is brought into play. The second is that recourse to the Court involves a form of decision making in which society or the state plays a overt or covert role and the extent to which natural justice(5) is or is not engaged may vary from jurisdiction to jurisdiction. In passing, it is worth noting that both the Court and the determinative processes of ADR, such as arbitration, have the peculiar feature that a determination is made whether or not all the criteria for a decision are present. The device of burden of proof is used to ensure that the coin never falls between a crack in the boards. Generally speaking, an uncertain case cannot be shelved to await developments in science. If it cannot be determined on the balance of probabilities, however thin, it fails.
Where a controversy exists and policy requires that it be closed in a public manner and that the closure apply to a populace at large, then there remains the possibility of legislative closure. That may be by way of primary legislation directing that citizens comply with a set of rules relating to the topic; it may be by secondary legislation, mandated to a department by the legislature. The philosophical concept of secondary legislation could be said to merge almost seamlessly into the realm of executive or administrative decision making, which, in turn, merges with the perhaps more stylised role of the Court.
Arbitration, our principal subject here, is a third-party determinative mechanism; I am going now to concentrate upon the third party processes to put its role more clearly into context.
The primary coercive process is that of the Courts. It may be argued that the Rules of some trading associations, such as commodity trading associations, themselves create private coercive environments, but I suggest the better view to be that they are a special example of the voluntary process of determination.
Arbitration is, at least in theory, voluntary as to taking part (although agreements often are made at the time of a Contract and the effect is binding when a dispute later arises). Usually, arbitration creates an enforceable decision. It creates an enforceable decision of special importance, first because many countries have statutory provisions giving the award of an arbitral tribunal status comparable with a decision of the Court and secondly because arbitral awards made in one country are often enforceable in others, as I have mentioned previously, by virtue of the New York Convention(6) of 1958.
There are two exceptions to the generality that arbitration creates enforceable decisions. First, the parties may themselves agree, at any time, not to use the decision to bind them, but to treat it as consultative, allowing them to negotiate. Then there may be reasons of public policy or of law which make the enforcement of an award impermissible at law.
What is true of arbitration is also largely true of what has come to be called expert determination. An expert is engaged by the parties to examine the circumstances and any evidence offered and to make a binding decision. A difference is that an Expert acting in this way is said not to be bound by the rules of natural justice which are said to bind the arbitrator or a Court(7). For that reason, the determination of an expert is usually enforced as if it were a term of agreement between the parties. There is a philosophical question as to whether the determination of an expert, or the determination of the so-called adjudicator in modern British Construction(8), is actually different in kind from the award of an arbitrator; nevertheless, the distinction is made, and it seems clear that only the more or less formal arbitration award attracts the international recognition of the New York Convention, which I have mentioned.
The role of the expert in a more or less formal expert determination is no more than one of seeing what the parties have to say, investigating and making a decision. Here again, there is no protection against suit and it is the usual practice for an indemnity to be sought. As I have already mentioned, it is commonly said that an expert need not follow the rules of natural justice. I think that too much can be made of this point. It is only a technical point, underlining the freedom to consult with either party in the absence of the other. Not to heed both points of view, and not to ensure that each party has a chance to deal with what is said by the other would be bad science and very bad tactics as well as being arguably in bad faith and contrary to an implied term of the expert's contract, to decide properly and fairly. An expert in this role is entitled to draw on the whole of his or her knowledge and to look into whatever texts and records may help in making the decision.
If the disputing parties are to be bound by the expert's decision, it is probably best if they appoint him or her jointly, but that is not absolutely necessary. The important requirement is that they agree to be bound. The International Chamber of Commerce, in Paris, operates a scheme for expertise and will locate suitable experts if asked to do so, as will the major technical Institutions of the United Kingdom.
In assisting negotiation and in conciliation or mediation, the role of the neutral third party appears self-evident. Nevertheless, a third party, and especially a third party with special skills relevant to the dispute, may become involved in a variety of ways. He or she may play a part in guiding one or other party, he may act as an honest broker with understanding, or as mediator or conciliator. He may go so far as to suggest solutions, if that is what is wanted.
There are differing views as to the skills best suited to these process. The inherently disinterested nature of the scientific or technical mind may make an expert less attractive in those negotiations which concentrate on achieving a power-based result, but where the basis of the outcome is to be a fair result, or where facts are at the heart of the question, an appropriate expert is doing nothing outside his or her ordinary formation in ascertaining the solution to problems about which there are disputes. It is worth noting, however, that an expert may be liable for the advice given, unless some form of indemnity is obtained from the disputing parties. A caveat here: It is not sufficient that the two parties agree not to sue the expert; the advice may be adopted by, or may affect, a third party. Furthermore, even an indemnity might not cut the mustard, if the two parties turned out to be no longer in business.
When it comes to the practical aspects of Arbitration, the choice is between a number of methods: An almost infinite variety of possibilities exists, even within the framework of national arbitral legislation. From the tradition of the commodities markets, the so-called "look-sniff" arbitration of a fellow trader, through expert arbitration by one whose principal qualification is in the context of the subject matter with his or her appreciation of procedural and substantive law no more than is needed for the purpose, to the practising lawyer, the academic jurist and, indeed, sovereigns both spiritual(9) and temporal. Determination may be factual, it may be based on strict or "black letter" law, it may even be based upon common concepts of justice and can even extend to the creation of new contract terms if the parties so agree(10).
Some years ago, I wrote an article whose purpose was to put an end to the recurring debate as to whether disputing parties want to be judged by lawyers or by their peers. It is a foolish debate, somewhat confused by the difficulties which arise when the techniques and practices of national Courts are brought into international arbitration. As a matter of practicality, the majority of international arbitrators are lawyers of one kind or another; there is a minority, I hope a respectable minority, of those from other professions(11).
Where an esoteric matter forms part of a dispute, it seems obvious to include someone of relevant expertise in the tribunal itself, but that may not always be the best answer and involves some questions as to how best the tribunal's mind can be made known to the parties. Nevertheless, expert arbitration is a common method of determining disputes with a long pedigree. An arbitral tribunal may comprise a single arbitrator, with a working knowledge of the field of endeavour and a working knowledge both of the law that relates to the subject matter and of the procedural law and practice of arbitration.
It is helpful to bear in mind the possibility that an arbitrator may not be a jurist when considering questions of personal authority and when considering the extent to which an arbitrator can or should entertain matters of public policy and the like of his or her own motion.
Too much emphasis should not be laid upon the procedural questions. The days of the forms of action and of the archaic mantras of Bleak House(12) are long gone. Modern Arbitration Statutes are designed, generally, to follow commonsense and to ensure that both sides are properly and honestly heard. The English legislation is somewhat more regulatory than most and requires a little care, but its principles are bold enough:
"The object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense; [and] the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest."(13)
The public interest, it turns out, includes a great deal of Court intervention, for good or ill, and is likely to include the future development of law(14), so English arbitration, unless the relevant steps are taken(15) , by agreement between the parties and with some care, remains under Court control and subject to appeal.
Part 3 -- Introduction to the Practice of Arbitration(16)
Before leaving the introduction, I should perhaps deal with the essentials that are required to make arbitration practical. To do so, I have used the current English legislation as an illustration of the ways in which a legal system may interact with the arbitral process to assist and control it. Other jurisdictions have much the same principles, but differ in detail. In the early part of this introductory paper I discussed whether arbitration was a creature of law at all. Mustill and Boyd say clearly, at the beginning of their powerful treatise(17), "The law of private arbitration is concerned with the relationship between the courts and the arbitral process."; not therefore, with the inherent nature of the process itself. In England, that may have changed somewhat as a result of the Arbitration Act 1996, which sets out some of the powers of an arbitrator in the absence of agreement between the parties. Many of those default powers are, in international practice, the subject of published rules, which, if adopted, seem to constitute agreement between the parties as to their contents.
Arbitration may be provided for in one of two ways. By far the most common basis for arbitration is a clause, within a contract between two parties, which provides that differences between them will be referred to a sole arbitrator or to an arbitral tribunal of more than one person, generally three. If a decision is sought, there are obvious advantages in having an odd number in the tribunal. It is perfectly practical, however, for any two persons, or companies, or any other kind of group, in conflict, whether or not they are in a contractual relationship, to agree to have their differences determined by arbitration and, once the agreement is made, they will be bound by it. It needs to be an agreement in writing, but writing is often defined widely, at least in the English legislation(18),(19).
Note particularly that the agreement is between two parties only. That is because the tribunal is the creation of the parties and only they are bound by it. The decision of an arbitral tribunal cannot be effective against others(20).
Commonly, arbitration clauses and agreements provide for the parties to agree upon an arbitrator. If agreement cannot be achieved, then it is usual for an appointing body to be designated. In many UK construction contracts (and manufacturing contracts), that is likely to be one of the major technical institutions(21). In international contracts, an administering authority, such as the ICC Court of Arbitration in Paris, or the London Court of International Arbitration may be named. "Court" is perhaps an unfortunate misnomer. Some of these bodies may have some state connections and some not. The London Court of International Arbitration is in fact a private company, with contacts in a world-wide arbitral community.
The precise method whereby one party, usually the party who has made a claim that has not been met, invokes the arbitration provision of a contract, is likely to be set out in the contract itself (or in a set of arbitration rules, if rules have been adopted in the contract). Where there is no specific arrangement, the Claimant may write to the other party, the Respondent, simply stating what is claimed, giving notice that, as there has been no satisfactory answer, a dispute exists and requiring the Respondent to go to arbitration. The Claimant may suggest the name of one or more arbitrators, if a sole arbitrator is to be chosen. The Claimant may nominate his arbitrator if a three-arbitrator tribunal is required. Ideally, the Claimant should give consideration to inviting the Respondent to discuss a tribunal that will suit both of them. Three arbitrators of different skills may well be the best team to approach some complex problems. Unfortunately, however, relationships are sometimes allowed to sour, so that such cooperation becomes impracticable.
Even if there is no contract, as where there is a dispute about a tortious issue, or where a contract has no arbitration agreement, the Claimant still may suggest arbitration by giving notice of the dispute and offering to go to arbitration. If the offer is accepted, arbitration may proceed on the basis of a specific and new agreement. If it is not, then an action may have to be commenced in the Court, but there may be a possibility of suggesting arbitration or some other method of solution during the early stages.
Where there is an appointing authority named in the contract, then the notice may advise the Respondent of the intention of the Claimant to go to that appointing authority. An application for the appointment of an arbitrator usually is made without any specific suggestion on the part of the Claimant, but there is no reason, in principle, why a Claimant should not put forward the name of a putative arbitrator, although the choice of whether or not to appoint that person remains in the discretion of the appointor. In such an instance, the appointor, having ascertained that the nominee is prepared to act, would advise the Respondent of an intention to make the appointment, so that the Respondent would have an opportunity to object or suggest an alternative.
It is not uncommon for so-called questions of jurisdiction to arise at this stage. In this context, jurisdiction means no more than the entitlement of an arbitrator to act. There may be a question about the contract, or about the arbitration provision itself, that could lead to a conclusion, either that there was no arbitration agreement or that there are preconditions that have not been satisfied.
In England(22), the Arbitration Act 1996 provides for an arbitrator to deal with questions of his own jurisdiction, and generally an arbitrator's powers are somewhat more clear than those of an appointor. Consequently, most appointors do no more than satisfy themselves that there is some prima facie basis for making the appointment, leaving the arbitrator so appointed to make the necessary investigation into his own jurisdiction. That is a necessary course to take, as any other approach might stifle the process at birth, defeating the likely intentions, or what must be presumed to have been the original intentions, of the parties themselves.
To proceed, the arbitrator needs to be satisfied that, at least on the face of it, there is an arbitration agreement of some kind, there are differences between the parties and he has been appointed, either in accordance with the arrangements set out in the agreement or else, if there are no clear arrangements, in the manner set out in the Arbitration Act 1996(23).
Often nothing complicated is required; all that is needed is an agreement to invite the arbitrator to act and a letter by one or other party, on behalf of both, giving the invitation. That in itself serves the purpose both of an arbitration agreement and, if accepted, the arbitrator's appointment. The letter may say no more than "Dear Mr Jones, There are differences between ourselves and Messrs. Company Ltd. We have agreed that you should be asked to accept appointment as Arbitrator to determine those differences and would be grateful if you would indicate your terms for doing so."
Once the terms are agreed, the reference is under way. Once appointed, or perhaps as a condition of his acceptance, the arbitrator will decide upon a reasonably practical procedure for the reference. The parties are at liberty to make their own agreement about this, but even so, they would be well advised to consider what the arbitrator has to say. He or she is likely to be an expert in the subject matter of the dispute, as well as a specialist in the resolution of disputes. It is probable, therefore, that the arbitrator may be able to guide the parties along the most efficient practicable route to a fair result.
If the parties, or their professional advisers, try to compel the arbitrator to adopt some unsuitable course, they may run the risk of losing the services of that arbitrator(24). They certainly will run the risk of a penalty as to costs(25).
Once the Arbitrator has been appointed, it will be necessary first for him to know what the dispute is about and then to be given the information he needs to enable him to resolve it. That may be very simply done. It may require no more than a single letter from each party, setting out that party's case, following which the arbitrator can decide and write his award.
More commonly, each party may prepare a more or less formal statement setting out the facts that party asserts together with the relief sought and the reasons, which may be factual or legal, why the party considers that relief to be justified. Relief may be an award that either sums found due or damages be paid, that an extension of time be given (that often also involves a payment); it may also be in the form of a declaration or, in appropriate cases, an award of specific performance(26)(the handing over of disputed goods, for example). In some major cases, it may be appropriate for the parties to submit full statements of case, similar to those used in Court proceedings, but it should be emphasised that no special form is required and that the method of the Court often will not be well suited to the task of the Arbitrator.
Several systems of Rules provide for the exchange of statements in terms generally as follows: "Within 21 days, the Claimant shall send to the Arbitrator and to the other parties a statement of Points of Claim setting out in sufficient detail the facts and contentions of law on which he relies and the relief that he claims." That may be followed by a statement of Points of Defence and any Counterclaim and a further round of Defence to Counterclaim and reply.
The time allowed may vary, some international rules allow longer periods some rules shorter periods. It may depend upon the system of Rules; it may depend upon the nature of the matters in issue. What is necessary is that a fair opportunity be given. Often the submitted statements of case will be accompanied by copies of the documents upon which a party relies (and particularly those that are mentioned in the statements). They may also be accompanied by witness statements of principal witnesses. Sometimes, the original application for arbitration may be in the form of a statement of case, with all its attachments.
There is now no right of discovery of documents in English arbitration(27) but the arbitrator has power(28) to ask for documents he needs or to which a party has drawn attention.
It should be noted that the arbitrator in an English reference has power to control the recoverable costs of a reference(29). He or she will take into account the most appropriate method of conducting the reference in making any decision about a limit to the recoverable costs.
Obviously, parties should be particularly careful to make sure that it is their own point of view, and not merely that of any professional team they may have employed, which the arbitrator has in mind when considering any possible limits. Otherwise, there would be a possibility that the professional teams for each side, both anxious to do as complete a job as possible, might agree among themselves upon amounts which would not be appropriate.
It is sometimes thought that arbitration procedure should imitate that of the Courts. That is not right and there is no legal or logical justification for such a view. Indeed, there is a clear justification for the view that arbitration procedure should not mimic that of the Courts.
The distinguished author Mr Stewart Boyd QC(30), in one of the Bernstein Lectures of 1989, suggested that, if a member of the public was asked if an arbitrator was entitled to disregard strict rules of law, if satisfied that they would lead to a wholly unjust result, his answer would be that this was the whole purpose of going to arbitration.
Commenting on this proposition, Mr Fali Nariman, a distinguished senior lawyer and President of the World's leading arbitral association, the International Council on Commercial Arbitration (ICCA), observed(31) "The general feeling is that, in arbitration, devotion to law is less admired by the public than a willingness to strain it."
That must be right and, although it applies also to the arbitrator's substantive decisions, it applies with particular force to decisions about how to proceed.
Now, in a brief overview, would not be the time to discuss the entire range of options open to the arbitrators and the parties in a reference to arbitration, even if to define such a range were possible. It is not possible to set limits to the possibilities. Provided the procedure is fair(32) and open, and compliant with the mandatory rules of the place where the arbitration is held(33), there are no limits to what may be done.
At one extreme, the procedure may not merely approximate to the proceedings of a court but may go beyond that, particularly where both parties are anxious to canvass aspects which ordinarily would be thought of peripheral relevance in the Court. Such references arise where the parties are peculiarly embittered and wish to thrash out, before a sympathetic third party, every detail of what has gone between them. It is not the most efficient way of resolving issues, but the parties may have decided that the expense of a complete catharsis is justified.
Arbitration can provide that solution if required to do so, in a way that the Court may not, but most arbitrators would wish to be quite satisfied that such a long-drawn out process is actually what the parties require. The duty of the arbitrator is to seek an efficient and fair answer to the parties' problems. Unfortunately, these "theatrical" arbitrations are what sometimes attract attention and criticism, particularly as they are especially likely to go on to appeal in Court if the parties' bitterness is not fully expunged.
More conventionally, an arbitral hearing, following the exchange of statements, is likely to involve evidence from a small number of witnesses, much of which will be taken from the written material, together with some argument on behalf of the parties, following which the arbitrator will make his or her award.
The hearing will be set down for an agreed date, if possible and, because the arbitrator's task is to deal with the one reference (unlike that of the Court which may have a more or less full daily case list), that date will remain fixed and the reference heard as arranged, other than in wholly exceptional circumstances.
At the other extreme, an arbitration concerning the quality of some product or some construction may involve no more than a letter from each party to the arbitrator (copied, of course to the other party) and a brief visit to the site or a brief examination of a sample, followed by a decision.
Among the other notable choices are two alternatives provided in Civil Engineering practice(34), although not by any means limited to that field.
One is a procedure using experts for each side. They need not be independent experts; provided they adopt a professional approach, they may be appropriately expert members of the staff of one or both parties. In the procedure(35) each party provides the arbitrator with a file or dossier, including a signed report from an expert upon whom that party relies. The arbitrator may then have a look at the subject of the arbitration, perhaps a machine or a building, and arrange for a meeting at which he or she will discuss the reports with the two experts together. The arbitrator's decision, based on that discussion, may deal with the whole reference; if the expert procedure has been restricted to particular issues, then the issues will be decided so that the rest of the reference may continue in the light of the answers found in the expert procedure. It is a process well suited to deal with technical issues and matters of opinion.
Another method encouraged by the Institution of Civil Engineers is the so-called "Short Procedure"(36). There is nothing about this simple procedure which limits it to engineering, or indeed any field. It is eminently well suited to most commercial disputes and is perhaps the most archetypical form of commercial arbitration as understood by the commercial world. Again, the parties deliver a file or dossier to the arbitrator, saying what they seek, and why they consider themselves entitled to the decision they seek. Those dossiers are complete, they may be the only submissions the parties need to make. With them are included any documents or statements to which the parties wish to draw the arbitrator's attention. Within a month the arbitrator fixes a day on which the parties may attend to make oral submissions or to answer the arbitrator's questions. He or she tells the parties whom they should bring(37). Within a month after that, the arbitrator makes his award.
In fact, of course, the arbitrator and the parties may agree to adopt shorter (or longer) intervals as the case may require. There is no reason why an arbitrator should not read brief dossiers one day and hear and decide the issues the next (or that afternoon). Similar procedures are available, and have been customary for years, under many other systems. One noted maritime arbitrator is recalled as having made his enquiry on-board ship and issued his decision orally before the turn of the tide, to allow the ship to sail. The author has inspected a damaged machine, a high-voltage electric motor, on site, to make a finding of liability before the machine was taken away by heavy transport the same day.
A variant on the Expert procedure, mentioned above, is for the arbitrator to order and attend a test or trial of machinery, in the presence of representatives, perhaps experts, for each side. If the arbitrator oversees the trial and himself endorses the readings taken, for example, then that may eliminate a great deal of oral testimony and argument. If the test or trial is a part of a major reference in which lawyers and others are involved, it may have the merit of enabling them to see the issues more clearly.
The ICE(38) Procedures, mentioned above, incorporate their own provisions for costs. Those provisions may not be appropriate in another context, where the principle behind the Procedure is to be adopted but there has been no prior agreement to the ICE Procedure. In International Arbitration, a regime for costs has developed, based on the different sets of published Rules. It will be discussed in another paper.
An important distinction between a reference to arbitration and an action in court is that an arbitrator, particularly a technical expert arbitrator, has a duty to use his own skill and experience. That is why an expert has been selected. This aspect of arbitration has been much misunderstood and misinterpreted over the years.
Put simply, there are two commonsense restraints on the use of an arbitrator's knowledge and experience in a reference.
Nevertheless, his task is to enquire, where enquiry is necessary(39), at least within those constraints.
After the hearing or hearings, which may be as formal or informal as the parties and the arbitrator agree, the arbitrator will prepare the Award. This is a document which sets out the final decision of the arbitral tribunal, usually saying what payment is due, as a matter of Contract or as restitution, from one party to the other. It will also make directions as to who shall pay the costs of the arbitration; that usually means that the loser pays the common costs of the arbitrator and the venue, together with the winner's costs (or such proportion of them as can be shown to have been reasonable and reasonably incurred). In that way, the party who has been in the right is fully recompensed, although it is in the interests of all concerned to ensure that money is not spent unnecessarily.
Sometimes the decision on costs may be reserved for argument after the substantive decision is made. If the costs cannot be agreed (they are usually agreed between the parties' solicitors or other representatives) then the arbitrator may be asked to determine the correct amount. An award may provide for interest (in jurisdictions where that is permissible).
Generally speaking an Award is enforceable as if it were a judgement of the Court(40). There is a special facility for the enforcement of foreign awards in countries that have subscribed to the New York Convention of 1958; for the English provision, see the footnote(41). Nevertheless, the successful party may well prefer not to enforce the Award directly but to negotiate further with the other party, to produce some more constructive or creative solution, with the award itself available in the last resort.
The award is final(42), and there are very limited grounds upon which it may be appealed(43) or challenged(44). In some jurisdictions it cannot be appealed at all, and the grounds for refusing execution of a foreign award under the New York Convention of 1958 are severely restricted(45). It is particularly interesting to note that Article V of the Convention, which lists the grounds on which a Court may refuse exequatur, the execution of a foreign award, is purely discretionary. The Court has to be satisfied that one or more of the grounds for objection is valid; then it has to be satisfied that it should refuse exequatur. The onus is upon the party resisting the Award.
It can be seen that arbitration, while flexible and capable of being conducted in a manner suited to the parties and the subject matter of their dispute, is nevertheless sufficiently precise and final to enable the parties to achieve a final and binding award, which Courts will recognise, subject to reasonable safe guards.
Once an award is made, the parties then have an opportunity, either to enforce its terms or to use it as the basis of an appropriate but creative settlement.
This paper has been an overview. The remainder of the course will concentrate in detail upon aspects of arbitration law and practice world-wide. The philosophy of commercial arbitration is in continual development and the reader is encouraged to look to specialist works if further reading is required.
Companies and persons who agree to arbitration demonstrate a willingness to have their differences determined by a commonsense method, using experts or others who understand their problems and will find a just and fair solution. The presence of an arbitration provision in a contract affirms the parties intentions to deal ethically and fairly with one another. In international commerce, that is tantamount to an assurance that, should matters go wrong, a party can look forward to a satisfactory and predictable means of recourse. If justice is truth in action(46) then arbitration is the route to that truth.
Geoffrey M. Beresford Hartwell
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Footnotes - to return to the text click on the symbol
1. The symbol h is the mathematical symbol for a logical identity and means equal in every respect. I regret that, because the symbol is a part of a mathematical font, it may not be displayd correctly in all browsers.
2. For the full text, see the WWW article http://www..beresfordhartwell.com/nyc_text.htm
3. See the WWW article - http://www.beresfordhartwell.com/nyc_asa.htm
4. In Scientific Controversies Case studies in the resolution and closure of disputes in science and technology - Engelhardt and Caplan (ed), Cambridge University Press 1989.
5. It is suggested that "Natural", or Intuitive Justice, which necessarily is difficult of precise and formulaic definition, falls to be distinguished from "Unnatural Justice", that is to say the formal structure of man-made laws, although in practice the distinction may be narrow and of little import save in exceptional cases.
6. Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) now recognised in well over 100 countries world-wide.
7. Although that can hardly be right. Natural justice is essentially fairness and honesty. It is scarcely credible that a decision maker who knowingly failed to follow the principles of fairness and honesty could be said to have fulfilled his mandate.
8. Housing Grants, Construction and Regeneration Act 1996 provides a statutory right to a form of adjudication of disputes
9. As, for example when His Holiness the Pope was invited to arbitrate between Chile and Argentina on the matter of the Beagle Channel.
10. In this category come arbitrations in which the arbitrators are required to decide ex aequo et bono, i.e. on a basis of equity as between the parties, or to function as amiable compositeurs, i.e. with power to complete lacunae or to adjust contracts, particulalrly where long-term contracts are affected by circumstances.
It may be interesting to consider the traditional practice in Italy where two forms of arbitration are recognised - arbitratio rituale, which follows a fairly strict procedure parallel to that of the Court and the award of which is enforceable when registered and arbitratio irrituale, which is more informal and may fill in lacunae in the contractual arrangements of the parties but requires to be enforced as a contract.
11. The same is not necessarily true of domestic arbitration. In the United Kingdom, for example, more arbitration, particularly at the consumer level, in the adjudication of property rents, and in technical disputes, is conducted by non-lawyers than by lawyers.
12. Bleak House is a novel by Charles Dickens which satirises the legal procedures of the nineteenth century, particularly the long drawn-out procedures of the Chancery Court, in the fictitious case of Jarndyce -v- Jarndyce.
13. Section 1 (a) and (b), Arbitration Act 1996.
14. There is a long tradition of intervention by English Courts in arbitration. Contrast the position in Scotland, where the Courts are guided by the Articles of Regulation 1695, which are still (1998) in force.
Article 25 provides: "that for the cutting off of the groundless and expensive pleas and processes in time coming, the Lords of Session sustain no reduction (the Scots word for review) of any decree arbitral that shall be pronounced hereafter on a subscribed submission at the instance of the parties submitters, upon any cause whatever, unless that of corruption, bribery or falsehood, to be alleged against the judges-arbitrators who pronounced the same." (With acknowledgements to the Honourable Lord Dervaird).
At the time of writing, a new Scottish Statute has been proposed and is in draft. That, if enacted, would bring the statutory positions of the legal districts of the United Kingdom more closely into line.
15. Section 69(1) Arbitration Act 1996 reads:
Unless otherwise agreed by the parties, a party to arbitral proceedings may (upon notice to the other parties and to the tribunal) appeal to the court on a question of law arising out of an award made in the proceedings. An agreement to dispense with reasons for the tribunal's award shall be considered an agreement to exclude the court's jurisdiction under this section.
There is no general facility for the exclusion of court control.
16. Much of this part is based upon material prepared for a chapter by the writer, in Construction Disputes - Resolution and Avoidance (Peter Campbell ed), Whittles Publishing, by permission. You can read the chapter at this web site.
17. The Law and Practice of Commercial Arbitration in England, Sir Michael J. Mustill and Stewart C. Boyd, Second Edition, Butterworths, 1989.
18. Although the definition of a written agreement is wide See Section 5, Arbitration Act 1996:
S5 - (1) The provisions of this Part apply only where the arbitration agreement is in writing, and any other agreement between the parties as to any matter is effective for the purposes of this Part only if in writing.
(2) There is an agreement in writing -
(a) if the agreement is made in writing (whether or not it is signed by the parties)
(b) if the agreement is made by exchange of communications in writing, or
(c) if the agreement is evidenced in writing.
(3) Where parties agree otherwise than in writing by reference to terms which are in writing, they make an agreement in writing.
(4) An agreement is evidenced in writing if an agreement made otherwise than in writing is recorded by one of the parties, or by a third party, with the authority of the parties to the agreement.
(5) An exchange of written submissions in arbitral or legal proceedings in which the existence of an agreement otherwise than in writing is alleged by one party against another party and not denied by the other party in his response constitutes as between those parties an agreement in writing to the effect alleged.
(6) References in this Part to anything being written or in writing include its being recorded by any means.
19. Cf. also the New York Convention 1958, Article II:
2. The term "agreement in writing shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams.
A point to note about Article II.2 is that it does not purport to be an exclusive definition. There is much discussion at present as to the status of facsimile messages and e-mail.
20. Although in some circumstances it is possible for a third party to be joined if all consent and detailed rules or local legislation may allow a Court, or even the tribunal, to compel joinder of third parties without the consent of all concerned. Where rules so provide, all parties must subscribe to them; it may be incorrect, therefore, to describe that as joinder without consent.
21. For example: in the United Kingdom (not only England and Wales) the Institutions of Civil, of Mechanical, of Electrical and of Chemical Engineers, the Royal Institution of Chartered Surveyors, The Royal Institute of British Architects.
Other bodies who may appoint arbitrators upon request in England are the Chartered Institute of Arbitrators and the Law Society (separately in England and in Scotland). Other notable bodies are the American Arbitration Associiation and Arbitral Chambers attached to many Chambers of Commerce worldwide.
Arbitral Institutions such as the London Court of International Arbitration and the Court of Arbitration of the International Chamber of Commerce make appointments in the context of arbitrations to be carried out according to their special rules (and also the UNCITRAL Rules, if requested).
22. More correctly England and Wales with Northern Ireland, but the point will be taken for granted hereinafter.
23. In Sections 15 - 18
24. Because, for example, S33(1)(b) of the English Act makes it a mandatory duty of the arbitrator to adopt suitable procedures and to avoid unnecessary expense or delay, so as to provide a fair means for the resolution of the matters falling to be determined. The parties may not exclude that provision and semble may not prevent the arbitrator from abiding by it. That is contrary to the principle of party autonomy, but the Statute appears to embrace the conflict between party autonomy and a presumed state interest in the efficient operation of the arbitral process. It is an area to be developed by the Courts.
25. In England, the arbitrator has a power - S65(1) AA 1996 - to limit the recoverable costs of the arbitration, unless the parties agree otherwise. Alternatively, and in most jurisdictions, arbitrators have power to direct what costs shall be paid and who shall pay them.
26. AA 1996, Section 48(5)(b) but specific
performance of an contract relating to land cannot be ordered. (It is
suggested that is for two main reasons, one concerning the operation
of ownership of land against others, including authorities, not party
to the arbitration, and the other the close concern of the Court,
throughout history, for matters concerning land). Quaere the
possibility that the provisions of the English Act might be a public
policy ground to refuse exequatur of a foreign award
ordering specific performance of a contract relating to land in
Specific performance is ordered only where damages are inappropriate. In building contracts, for example, specific performance will rarely, if ever, be ordered. That is because of the inherent difficulty of carrying out future work under supervision. Specific performance occasionally may be the subject of a consent award, an award agreed between the parties.
27. See Section 34(2)AA 1996 - Procedural and
evidential matters for the tribunal to decide (subject to the right
of the parties to agree otherwise) include -
. . . . . . . . . . . . . . .
(d) whether any and if so which documents or classes of documents should be disclosed between and produced between the parties and at what stage;
28. Under Section 34(2)(d) above (footnote 7) and also see Section 40 (1) - The parties shall do all things necessary for the proper and expeditious conduct of the arbitral proceedings.
29. Section 65 - (1) Unless otherwise agreed by the parties, the tribunal may direct that the recoverable costs of the arbitration, or of any part of the arbitral proceedings, shall be limited to a specified amount. (2) Any direction may be made or varied at any stage, but this must be done sufficiently in advance of the incurring of costs to which it relates, or the taking of any steps in the proceedings which may be affected by it, for the limit to be taken into account.
30. Co-Author with the Right Honourable the Lord Mustill of the leading textbook "Commercial Arbitration", Mustill and Boyd, Butterworths 1989
31. In his paper to a symposium at Boston University Law School, 25 September 1995. Boston University International Law Journal, Vol 15, No 1, page 187
32. Fairness necessarily implies that the parties have a proper opportunity each to state their case and to deal with the case of the other. On rare occasions, when one or other party refuses to take part, or fails to appear, proceedings may continue ex parte, that is to say in the absence of that party, provided adequate notice and opportunity has been given. That is exceptional, but necessary in fairness to the party whose grievance is to be heard.
That should not be confused with the practice of ex parte applications in the Court, where the absent party is not upon notice of the application. There is no such practice in arbitration and arguably cannot be, save where urgency makes a temporary step unavoidable. This is a difficult area of arbitral jurisprudence.
33. i.e in England the mandatory provisions of the Arbitration Act 1996.
34. In the Institution of Civil Engineers' Arbitration Procedure (1983).
35. Part G - Special Procedure for Experts - Rules 22 and 23 of the Institution of Civil Engineers' Arbitration Procedure (1983) qv.
36. Part F - Short Procedure - Rules 20 and 21 of the Institution of Civil Engineers' Arbitration Procedure(1983) qv.
37. Although the arbitrator cannot command attendance under these rules, logical inferences may be drawn if a requested person is absent without good reason
38. Institution of Civil Engineers.
39. See Section 34(2)AA 1996 - Procedural and
evidential matters for the tribunal to decide (subject to the right
of the parties to agree otherwise) include -
(g) whether and to what extent the tribunal should itself take the initiative in ascertaining the facts and the law;
(h) whether and to what extent there should be oral or written evidence or submissions.
40. Section 66. Enforcement of the award.
(1) An award made by the tribunal pursuant to an arbitration agreement may, by leave of the court, be enforced in the same manner as a judgement or order of the court to the same effect.
(2) Where leave is so given, judgement may be entered in terms of the award.
(3) Leave to enforce an award shall not be given where, or to the extent that, the person against whom it is sought to be enforced shows that the tribunal lacked substantive jurisdiction to make the award. The right to raise such an objection may have been lost (see section 73).
(4) Nothing in this section affects the recognition or enforcement of an award under any other enactment or rule of law, in particular under Part II of the Arbitration Act 1950 (enforcement of awards under Geneva Convention) or the provisions of Part III of this Act relating to the recognition and enforcement of awards under the New York Convention or by an action on the award.
41. In England see Section 101 AA 1996:
(1) A New York Convention award shall be recognised as binding on the persons as between whom it was made, and may accordingly be relied on by those persons by way of defence, set-off or otherwise in any legal proceedings in England and Wales or Northern Ireland.
(2) A New York Convention award may, by leave of the court, be enforced in the same manner as a judgement or order of the court to the same effect. As to the meaning of "the court" see section 105.
(3) Where leave is so given, judgement may be entered in terms of the award.
42. Although interim awards may be, and often are, made during the course of a complex reference. Even interim awards may be final if they make a final determination of any issue.
43. In England see Section 69 AA 1996:
44. In England only on the ground of a serious irregularity which has caused or will cause substantial injustice to a party - see Section 68 AA 1996:
45. In England, see Sections 103 & 104, AA
(1) Recognition or enforcement of a New York Convention award shall not be refused except in the following cases.
(2) Recognition or enforcement of the award may be refused if the person against whom it is invoked proves--
(a) that a party to the arbitration agreement was (under the law applicable to him) under some incapacity;
(b) that the arbitration agreement was not valid under the law to which the parties subjected it or, failing any indication thereon, under the law of the country where the award was made;
46. Benjamin Disraeli, Earl of Beaconsfield (1804-1881), speech in the House of Commons, 11 February 1851
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