Arbitration

What is arbitration?

 

It is a form of alternative dispute resolution (ADR), is a way to resolve disputes outside the judiciary courts. The dispute will be decided by one or more persons (the 'arbitrators', 'arbiters' or 'arbitral tribunal'), which renders the 'arbitration award'. An arbitration decision or award is legally binding on both sides and enforceable in the courts, unless all parties stipulate that the arbitration process and decision are non-binding.

Arbitral Tribunal

 

The arbitrators (like judges) which determine the outcome of the dispute are called the arbitral tribunal. The composition of the arbitral tribunal can vary enormously, with either a sole arbitrator sitting, two or more arbitrators, with or without a chairman or umpire, and various other combinations.

Arbitrations are usually divided into two types: ad hoc arbitrations and administered arbitrations.

In ad hoc arbitrations, the arbitral tribunals are appointed by the parties or by an appointing authority chosen by the parties. After the tribunal has been formed, the appointing authority will normally have no other role and the arbitration will be managed by the tribunal.

In administered arbitration, the arbitration will be administered by a professional arbitration institution providing arbitration services, such as the LCIA in London, the ICC in Paris, or the Swiss Arbitration Association in Switzerland.

Process

 

The choosing of the arbitrators and the process of the arbitration will either be subject to agreement or under the rules of the relevant arbitration forum.

Arbitral Award

 

An Arbitral Award is akin to a judgment following a court proceeding. Arbitral awards are characteristically an award of damages against a party and in many jurisdictions tribunals have a range of remedies that can form a part of the award. These may include:

  • payment of a sum of money (conventional damages)

  • the making of a "declaration" as to any matter to be determined in the proceedings

  • in some jurisdictions, the tribunal may have the same power as a court to:

    (a) order a party to do or refrain from doing something ("injunctive relief")

    (b) to order specific performance of a contract

    (c) to order the rectification, setting aside or cancellation of a deed or other document.

  • In other jurisdictions, however, unless the parties have expressly granted the arbitrators the right to decide such matters, the tribunal's powers may be limited to deciding whether a party is entitled to damages. It may not have the legal authority to order injunctive relief, issue a declaration, or rectify a contract, such powers being reserved to the exclusive jurisdiction of the courts.