Author's notes, not being part of the Draft Arbitration Agreement.
This Draft Arbitration Agreement is open for discussion and feedback is
earnestly sought. Readers should be aware of and have read the Arbitration Act
1996. The recommended book is "The Arbitration Act 1996 - a commentary 2nd
edition"; Harris, Bruce; Planterose, Rowan; Teiks, Jonathan. Blackwell Science
1996, ISBN 0-632-05063-2. The Act itself is very readable and brings a whole new
simplification to dispute resolution. This website contains links to the
text of the Act and other arbitration materials.
This Draft Arbitration Agreement is worded for inclusion as a clause in a contract. If arbitratiom is agreed after a dispute arises under an existing contract the lead in words should be altered to read "All disputes or differences between (A) and (B) and (C) shall be referred to...." with (A), (B) and (C) being replaced with the names of the parties who have agree to arbitration. No one who has not agreed to arbitrate can be forced into an arbitration, it is necessry to take out a summons and force them into court.
The intention of this Draft Arbitration Agreement is to provide a swift means of resolving any differences that are not rapidly resolved in the normal discussion that takes place during a business relationship. Modern Draft Arbitration Agreement Clause However, it is recognised that disputes of a major nature can arise where a "fast track" approach is not appropriate. The recognition that a particular dispute is of a major nature and the determination of the dispute resolution procedure to resolve that dispute is carried out under the "fast track" procedure, (ie that set out above) but there is no presumption in favour of arbitration, "fast track", ADR or litigation as the dispute resolution procedure to be used in the major dispute.
The arbitration process can be and is by the Draft Arbitration Agreement detached from the English Courts. The English courts would not have any power to stop the arbitration or to interfere with or consider an appeal from the arbitrator's award. A few sensible things like enforcing the award and seeing that the arbitrator gets paid do remain with the court. These sensible things are listed in Schedule 1 of the Arbitration Act 1996 as mandatory provisions
. The Draft Arbitration Agreement does not contemplate that there will be a hearing before the Arbitrator. It would be customary to conduct the arbitration on "documents only". That is why the draft excludes representation of a party by a lawyer. This does not mean that a party cannot obtain legal advice or assistance in drafting documents but they would need to submit the documents to the arbitrator themselves in their own name. Note that it is an essential practice that when any party communicates with the arbitrator they must send a copy at the same time to all the other parties. Communication may take place by email.
The arbitrator is required to be fair. No definition or explanation is given here as to what is meant by fair.
Under the Arbitration Act 1996 (S48(5)(a)) the arbitrator has the power to order a party to do or to refrain from doing anything. It is this power fairly exercised by a businessman who is technically aware and who has adopted procedures suitable for the circumstances of a particular case, avoiding unnecessary delay or expense (S33(1)(b)) that is seen as the utility of the Draft Arbitration Agreement. The arbitrator is able to award the payment of money with compound interest.
The arbitrator is able in advance to put a limit on the amount by way of costs a (winning) party may recover from a losing party. However, the Draft Arbitration Agreement provides for costs to be shared equally between the parties.
The arbitrator can take the initiative in ascertaining the facts. This means that a technically aware arbitrator can ask questions and explore the subject matter of the dispute in whatever way he thinks fit. In this respect arbitration is quite different (and probably more efficient as a result) from court proceedings.
It is possible for a provisional award made by an arbitrator to preserve the status quo or otherwise. The provisional award may be followed later by a final award that could well be entirely different from the provisional award.
No signatures are necessary on any document for an arbitration agreement to be binding. An arbitration agreement does need to be recorded in writing.
Summary This Arbitration Agreement is a fair way of dealing with a dispute by having someone who is prepared to get down to it to sort out the problem. It is fortunate that the arbitration mechanisms described here have arrived for problems to be resolved quickly, efficiently (S33) and conclusively within an otherwise uncertain contracting environment.
The author of this draft is Cliff Dilloway email: cliff@dilloway.co.uk; website: http://www.endispute.co.uk