Last edited 10 Oct 2016

Arbitration Act

Contents

[edit] Introduction

The Arbitration Act 1996 is the main piece of legislation relating to all arbitrations (both domestic and international) in England, Wales and Northern Ireland. It consolidates three prior acts of 1950, 1975 and 1979 which applied to different aspects of arbitration and were built on by case law.

Arbitration is a private, contractual form of dispute resolution. It provides for the determination of disputes by a third party arbitrator or arbitration panel, selected by the parties to the dispute. Disputes are resolved on the basis of material facts, documents and relevant principles of law. The arbitration process is administered by an appointed arbitrator. There are only limited rights of appeal and legal costs are usually awarded to the successful party.

It is often used in collective employment related disputes such as trade unions pay disputes, but it can also be used in construction disputes and by individuals.

[edit] Purpose of the Act

The Arbitration Act:

  • Consolidates and updates the existing legislation on arbitration.
  • Organises the legal rules and principles that had been established by case law.
  • Brings English law into line with internationally recognised principles of arbitration law.
  • Aims to make arbitration more appealing both to domestic and to international users.
  • Is intended to be easy to use with a logical structure and composed in plain English.
  • Defines the objective of arbitration but does not include a definition.
  • Increases the scope of party autonomy.
  • Enhances the powers of the arbitral tribunal.
  • Limits judicial intervention in the arbitration process while preserving the courts’ powers to provide assistance where necessary to make arbitration fair and efficient.

[edit] Application

The majority of commercial disputes can be taken to arbitration, if both parties agree on this approach. The Act emphasises the parties' right to choose their own form of dispute resolution and also preserves the ability of other statutes and the public interest to override this. The Act does not define the circumstances in which disputes cannot be taken to arbitration. However it does state various other pieces of legislation that protect the rights of access to court for certain types of dispute, such as for employment discrimination claims, applications for access to children or applications for financial assistance in divorce cases where a post-nuptial agreement exists.

It will not be possible for some disputes to be taken to arbitration because the remedy sought is not one that a tribunal can grant. In the commercial environment, there are not many disputes that cannot be taken to abitration. The courts will consider whether there are public interest reasons for a dispute to be decided in a judicial process, but this is not common.

[edit] General principles

The Arbitration Act is based on three guiding principles:

  • Fairness – The aim of arbitration is to obtain a fair resolution of a dispute by an impartial tribunal.
  • Party autonomy – Parties are free to decide how their dispute may be resolved, with any necessary safeguards for public safety.
  • Non-intervention by the court – The Act emphasises that the courts should not intervene unless stated within the Act.

[edit] Arbitrators

The Act does not specify a limit on the number of arbitrators that can be appointed by parties, however typically between one and three are chosen.

The act does not specify who can be appointed as an arbitrator but some arbitration agreements specify that they must be members of a specific profession or hold certain qualifications. However, they must be impartial.

The arbitrator(s) form a judgment based on the evidence presented by both parties.

[edit] Arbitration agreement

There are various requirements for the arbitration agreement:

  • Formal requirements – The agreement must be made in writing.
  • Separability – The agreement is considered separate to the main commercial agreement into which it is incorporated.
  • Mandatory and non-mandatory provisions – There are various mandatory provisions that are specified in Schedule 1 of the Arbitration Act and other provisions in Part I are non-mandatory.

[edit] Find out more

[edit] Related articles on Designing Buildings Wiki.

[edit] External references