#14708 - Alternate Dispute Resolution - Civil Litigation

Arbitration vs Litigation vs Mediation

Responding to Claim Forms

If the claimant has filed a claim form then the defendant should file an acknowledgement of service so that the claimant cannot apply for judgment in default. In the acknowledgement of service, the defendant should indicate that they are contesting the court’s jurisdiction by ticking the relevant box in the form. In accordance with CPR 10.3 the acknowledgement of service should be filed within 14 days of service of the particulars of claim being served.

Under CPR 62.8 the defendant should make an application to court asking for a stay of proceedings pursuant to s.9 AA in which the court should stay the proceedings because there exists a valid and binding arbitration clause which means the court should allow the case to be dealt with arbitration. s.9 AA is a mandatory provision so it cannot be excluded by the parties.

In the application, the defendant should submit:

An Application Notice (Form N244);

A Draft Order; and

Evidence in Support (usually in the form of the witness statement supported by a statement of truth).

The evidence should establish that there is a binding arbitration clause (pursuant to s.5(1) and s.6(1) AA) and show that the current dispute falls within the parameters of the clause.

Commencing Proceedings

Proceedings are commenced when one party serves notice on the other instructing them to appoint an arbitrator (s.14(4));

Each party appoints one arbitrator within 14 days of the notice being served (s.16(5)(a)). If a party fails to appoint an arbitrator then the other party can serve notice on them stating that they will use a sole arbitrator appointed by the non-defaulting party (s.17);

The two appointed arbitrators shall appoint a third arbitrator to make up the panel (s.16(5)(b)). If the two arbitrators fail to appoint another arbitrator the parties can apply to court for an appointment of the third arbitrator under s.18(3);

The tribunal will be formed and decisions are made on competency and compliance with duties (ss.30 & 33).

s.33 sets out the arbitrator’s general duties; these are to act fairly and impartially, to avoid any unnecessary delay or expense and to allow each party to put forward their case.

s.40 sets out the parties’ general duties; these are to comply with the proceedings, directions and orders of the tribunal and to apply to court where relevant.

Procedure of Arbitration

Pre-Arbitration - the arbitration will be dictated by the arbitration clause or agreement. These are defined in ss.5 & 6 which requires the agreement to be in writing and must be an agreement by the parties to use arbitration to resolve their disputes. A med-arb clause can be used to force the parties to attempt mediation, and if this fails to use arbitration to resolve the dispute.

Commencement - one party will serve on the other party notice to appoint an arbitrator (see above) under s.14(4).

Preliminary Hearing - the tribunal will decide the extent of their jurisdiction (s.30) and limit any costs recoverable (s.65). The tribunal will also decide whether statements of case are required, the form and extent can also be ruled upon (s.34).

Directions - these will be given and will cover issues such as disclosure of documents (s.34(2)(d)), the rules, manner and form of evidence (s.34(2)(f)) and any witness or expert evidence which is required (s.34(2)(h)).

Hearing - the tribunal will decide the dispute according to the law or considerations chosen by the parties - e.g. equitable, commercial or religious rules.

Enforcement - the award is enforceable as a court judgment (s.66) and the New York Convention is available for international enforcement.

Appeal/Challenges - the award can be appealed or challenged in a number of scenarios; appeals can be made against jurisdictional issues (s.67), against serious irregularity that occurred (s.68) or an appeal on a point of law (s.69).

Peremptory Orders

If a party fails to comply with a direction made by a tribunal, s.41(1) allows the tribunal to make a peremptory order giving the defaulting party a specified time to comply (considering s.33).

If the party fails to comply with the order then the consequences listed in s.41(7) can be invoked; these include cost consequences, adverse inferences and preventing reliance on the material in question.

The tribunal or non-defaulting party also has the right to apply to the court under s.42 to enforce the peremptory order. A penal notice can be attached to the court order so that further non-compliance can be punished as a contempt of court.

Costs

Any clause in an arbitration agreement which relates to one party paying the others costs irrespective of the outcome is void unless the agreement...