Arbitration

Arbitration is one of the most common forms of alternative dispute resolution. It is a determinative process meaning that the outcome is binding.

Arbitration is a proceeding in which a dispute is resolved by an impartial adjudicator whose decision the parties to the dispute have agreed, or legislation has decreed, will be final and binding. There are limited rights of review and appeal of arbitration awards

Arbitration is very similar to a court room setting. The judge in this case will either be one arbitrator or several. The arbitrator will be an expert in the particular field which is being discussed.

Unlike other forms of alternative dispute resolution, arbitration is usually very expensive and can take a very long time. What makes it so popular is that the decision made is legally binding and cannot be appealed.

Arbitration is often used for the resolution of commercial disputes, particularly in the context of international commercial transactions. In certain countries such as the United States, arbitration is also frequently employed in consumer and employment matters, where arbitration may be mandated by the terms of employment or commercial contracts.

As stated, it is a confidential process, similar to litigation. It is mostly governed by the Arbitration Act 2010 which incorporates United Nations Convention on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration.

As a result, the act Includes guidance on Arbitration agreements, the Composition of the arbitral tribunal, Jurisdiction of the arbitral tribunal, Conduct of arbitral proceedings, making of award and termination of proceedings, recourse against award and the recognition and enforcement of awards.

This applies to all arbitration in Ireland, both domestic and international disputes. Interestingly, Section 3 of the arbitration act allows it to be applied to arbitration contracts which were created before the act became law.

Prior to the act, it was possible for the High Court to interfere in the arbitration process or to give advice to the arbitrator. However, since the introduction of the 2010 act this has been scrapped. The reason for this was to respect the autonomy of arbitrations.

A case is usually diverted from the courts to arbitration by way of agreement.  An Arbitration agreement” is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.

When determining whether or not the issue in question is the subject of the arbitration agreement, the Courts take a very broad scope. This was seen in the case of Gulliver v Matheson Ormby Prentice

Disputes as to validity of arbitration are also decided using arbitration. It was stated that

“Where parties agree that disputes under a contract or agreement or disputes arising out of a contract or agreement shall be submitted to arbitration, this shall include disputes as to the existence or validity of the contract or agreement.’’

This can create the paradox or conflict of interest of an arbitrator deciding whether or not his existence is valid.

There are certain exceptions to arbitration agreements. Consumers will not  be bound in disputes concerning sums of money less than €5000.

Section 32 of the Arbitration act allows the High Court to adjourn proceedings to enable the parties to consider whether any or all of the matters in dispute might be determined by arbitration. Many feel that this will make arbitration an integral possibility in all civil litigation, and it places arbitration in the mainstream of Irish litigation procedure.

Under section 13 of the Act, it states that arbitration should normally be conducted by one arbitrator. This is in contract to the UN model law which recommends three. In addition Arbitrators must now provide reasoned awards unless the parties have agreed otherwise.

The Act also limits court involvement in Arbitration and has led to an increased jurisdiction for arbitrators. This has been in an attempt to ensure that arbitration will produce finality. There is no appeal from the High Court decision in relation to award, enforcement etc.

An award may only be challenged on public policy grounds or on procedural unfairness. However, under the common law a challenge for “error of law on the face of the award” may still exist.

Previously the law allowed an arbitrator to refer a question of law to the High Court for determination during the course of arbitration. This could be requested by the parties to the dispute. However, the 2010 act removed this provision.  However arbitrators may get expert assistance on a specific issue (including a point of law).

As a result of all these provisions, the power of arbitrators has increased significantly.

Ireland  is also a signatory to the New York Convention on the Enforcement of Arbitral Awards meaning that arbitration decisions made elsewhere can be enforceable here.

It is important to note that the Arbitration act does not apply in the area of Industrial relations.

This Act shall not apply to—

(a) an arbitration under an arbitration agreement providing for the reference to, or the settlement by, arbitration of any question relating to the terms or conditions of employment or the remuneration of any employees, including persons employed by or under the State or local authorities, or

b) an arbitration under section 70 of the Industrial Relations Act 1946.

Brick and mortar arbitration has been the predominate form of arbitration used by businesses since its inception. Now with the lower cost, greater convenience, and accessibility of online arbitration, individuals and small businesses have the opportunity to take advantage of its benefits over litigation. Recently, both public and private institutions have been moving towards providing online platforms to resolve small-claims disputes via arbitration.

In November 2011, the European Union adopted a resolution to create a single-entry-point, Europe-wide, online platform to help resolve disputes concerning purchases made between consumers and businesses. It will be fully operational by 2015. Around the same time, an UNCITRAL (United Nations Commission on International Trade Law) Online Dispute Resolution working group declared that it would launch a global pilot ODR system.

The United States, Canada, and the European Union have been working together in "Working Group III" at UNCITRAL to establish an online dispute resolution framework to resolve low-value cross-border e-commerce disputes.

In 2012, British Columbia passed legislation that will have many of the civil claims under $25,000 go through an online dispute resolution system. This system is currently in development and should be fully operational in 2015.

There are several private companies that offer online arbitration services. Many have lawyers or former lawyers conduct the arbitrations. e.