Interpret provisions of the Arbitration Act 1998 and advise your client on:

When are disputes referred to arbitration?

Where there is no prior agreement to arbitrate, it is still possible to refer a dispute to arbitration after it arises provided all parties agree to “ad hoc” arbitration.

Most arbitrations arise because your client has entered into a contract which has as one of its terms a clause which says that all disputes will be referred to arbitration.

Must agree in writing for Arbitration Act 1996 to apply (Premium Nafta Products Ltd) – assume that parties have intended the arbitration clause to cover any dispute arising out of their relationship

How to commence arbitration

The arbitration agreement will usually tell the parties how to begin the arbitration. A common

procedure is for the applicant to send a written request to arbitrate to the respondent, setting

out:

(a) the names and addresses of the parties;

(b) a brief statement of the nature and circumstances of the dispute and the relief being

sought; and

(c) who the claimant thinks the arbitrators should be and/or how they should be appointed

(if the claimant has to appoint an arbitrator, the request would contain the name and address of the nominated arbitrator).

The request will often be accompanied by a copy of the arbitration agreement

Under s 14, if the arbitration agreement identifies who the arbitrator shall be, the arbitration commences when one party gives written notice to the other requiring him to submit the dispute to arbitration.

If the parties are to appoint the arbitrator or arbitrators when a dispute arises, the arbitration will commence when one party serves the other with written notice requiring it to appoint or agree to the appointment of an arbitrator.

Such notice should deal with the following points:

(a) reference to the arbitration clause in the contract;

(b) the dispute that has arisen;

(c) requirement for the party to agree with the appointment of an arbitrator – often the notice will give a list of several proposed arbitrators.

If the arbitrator is to be appointed by a third party, the arbitration commences as soon

as one party asks the appointing authority to make an appointment.

How to appoint and remove and arbitrator

s.15(1) – parties free to agree number of arbitrators and whether chairman/umpire

s.15(3) – if no agreement then tribunal shall consist of sole arbitrator

s.16(1) – parties can agree own appointment procedure

s.16(3) – if no agreed then one party can make a written request to the other to make joint apt within 28 day

s.16(5) – if agreed to have 3 arbitrators, parties free to agree procedure for apt but if cant then each appoint one within 14 days and the two arbitrators will appoint the third

s.17 – if one party failed to appoint in above scenario then other party can give written notice and he then has 7 more days to appoint and if he doesn’t then he sole arbitrator can be confirmed

s.15(2) - Any agreement saying 2 arbitrators is understood as requiring apt of a 3^rd as chairman (parties can expressly say no chairman though)

s.17 – applies again if one party doesn’t apt an arbitrator when there should be two

s.22 – arbitra

tor decisions by majority vote

s.18(3) - If procedure for apt doesn’t work then either party can apply to the court. Court usually appoints an arbitrator but may simply give directions

s.18 – party who failed to appoint an arbitrator in accordance with s.16(5) only remedy is to apply to court and ask them to revoke the other partied appointment (will need a good reason for not appoint their own)

s.18 – if two arbitrators cant agree on third the can ask court to solve

s.18 – court can make app for directions is split vote of arbitrators

Appointing the arbitrator

Chairman – member of arbitration from outset and has casting vote if a tie in decision

Umpire –appointed when arbitrators can’t agree, if this doesn’t happen then before final hearing s.16(6)

s.21 – parties agree on his function but if not then takes over as if sole arbitrator when the others can’t agree

23(3)(a) revocation of arbitrators authority by acting jointly, must be agreed in writing;

23(4), 23(5)(b) nothing affects the ability of the court to remove an arbitrator

s 23 parties may agree to revoke the arbitrator’s appointment if all agree in writing.

If the parties cannot agree on the revocation of the arbitrator’s powers, either party may apply to the court for an order removing the arbitrator from office on certain grounds. Section 24, which gives this power, cannot be suspended by the agreement of the parties.

The grounds for removing an arbitrator under s 24 are either:

(a) that there are justifiable doubts about his impartiality;

(b) that he lacks the qualifications required by the arbitration agreement;

proceedings; or

(d) that he has failed to conduct the proceedings properly or with reasonable speed, and this will cause substantial injustice.

If applying to the court need to use CPR 62 – ask for courts help within arbitration (commercial court)

Considerations for an arbitration agreement

Limitation
Choice of law and jurisdiction
Arbitrator selection and qualifications
Timetable
Statements of case
Disclosure
Rules of evidence
Privacy
Appeal/enforcement
Limit of arbitrator’s authority
Interim remedies
costs

Powers of arbitral tribunal

Both in the preparation for the hearing and during the hearing itself the arbitrator must comply with s 33(1) of the AA 1996. This states:

The tribunal shall—

(a) act 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

(b) 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.

Section 33(2) goes on to provide:

The tribunal shall comply with that general duty in conducting the arbitral proceedings, in its decisions on matters of procedure and evidence and in the exercise of all other powers conferred on it.

Parties’ rights and obligations

s 40 of the AA 1996. This provides:

(1) The parties shall do all things necessary for the proper and expeditious conduct of the arbitral proceedings.

(2) This includes—

(a) complying without delay with any determination of the tribunal as to procedural or

evidential matters, or with any order or directions of the tribunal, and

(b) where appropriate, taking without delay any necessary steps to obtain a decision of the

court on a preliminary question of jurisdiction or law …

Party seeks the assistance of the court under the provisions of the Arbitration Act, other than staying legal proceedings s 9

S 12	Power of court to extend time for beginning of arbitral proceedings where circumstances were outside the reasonable contemplation of the parties and it would be just to extend the time or the conduct of one party makes it unjust to hold the other party to the strict terms
S 13	Court may order that period between commencement of arbitration and date of order be excluded under Limitations Act
S 18(4)	Either party may apply to court to appoint an arbitrator, appoint a replacement or make directions to resolve problem
S 24	May apply to court to remove arbitrator
S 32	Court may on application determine any question of substantive law
S 42	May apply to court for enforcement of peremptory orders after exhaustion of other remedies - Seek assistance of court for injunctions which carry the sanction of imprisonment for non-compliance
S 43	May seek assistance of the court in relation to witnesses within UK and arbitration within UK.
Ss 44	court has power under s 44 to make orders relating to: (a) taking evidence from witnesses; (b) preserving evidence; (c) inspecting, photographing, preserving, taking samples or experimenting on any property or goods involved in the proceedings and for the custody or detention of such property. To do this, it can authorise any person to enter the premises of any party; (d) selling goods which are involved in the proceedings; (e) interim injunctions; and (f ) appointing a receiver. The arbitration agreement may exclude all or part of the court’s powers under s 44. The court will, in any event, make an order only if the arbitrator has no power to make the order or his order would not be effective.
S 45	Refer matter of point of law to court for a decision on legal point on any question of law which substantially affects the rights of one or more parties.
S 66	The normal way of enforcing the award is under s 66 of the AA 1996 (which cannot be excluded by the parties). This enables the winning party to apply to the High Court for leave to enforce the award as if it were a court judgment.
S 67	Section 67 of the AA 1996 (which cannot be excluded by agreement) gives a party the right to apply to the court to challenge an award on the grounds of lack of jurisdiction. The courts have so far considered applications on the basis that: (a) the arbitration agreement was not binding on the applicant; (b) the arbitration clause was void for ambiguity and uncertainty; and (c) the arbitrator did not...

#13628 - Arbitration Clause Interpretation And Appointment Of Arbitrator - Commercial Dispute Resolution

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