Arbitrators - independent third parties, chosen either by the parties or the arbitration body, preferably also a specialist in the relevant area of dispute.
Binding - arbitration awards are binding and final, with very limited grounds of appeal.
Confidentiality - proceedings are conducted in private, and parties may not disclose any information received for the purposes of the arbitration.
Delay - it can take time to appoint an arbitrator, agree the process and co-ordinate diaries.
Enforcement - if you need to enforce an arbitration award, you may need to do so through the courts – at which stage the outcome of the arbitration award will come into the public domain.
Flexibility - parties have more flexibility to choose: you may be able to choose your arbitrators and agree the procedure to be adopted, which is fine as long as you can agree…
Get talking - the more you can agree in advance with the other side, the better (and more cheaply, easily and quickly the arbitration can be concluded).
How many arbitrators? The arbitration body may set the number of arbitrators required; usually one or three. The more arbitrators, the more the cost (and potential delay).
International - arbitration is well suited to disputes involving international parties and issues, because it can avoid jurisdictional issues.
Jurisdiction - the first of only three ways of challenging an arbitration award, on the basis that the tribunal lacked jurisdiction to make the award.
Keep it simple - do you need oral evidence? Do you need disclosure? Do you need expert evidence?
Legal framework - parties can choose which law applies to the arbitration agreement.
Multi-party disputes - arbitration may not be available or suitable where there are multiple parties to a dispute, or you need to join additional or third parties.
Neutrality - arbitration offers neutrality as to choice or arbitrator, law and location, and may be preferable where a party doesn’t wish to submit to the jurisdiction of the courts in a particular country.
Outcome - the outcome of an arbitration is not publicised (unless challenged or enforced), making it easier to contain commercially or reputationally sensitive matters.
Powers - an arbitrator has few powers to force parties to comply with his or her orders, or to require third parties to comply with requests for disclosure or to give evidence.
Quick(er) - arbitration should be easier to organise (not subject to the vagaries of court timetabling) and run (fewer procedural requirements) - in theory.
Rules - the rules governing the arbitral procedure vary depending on the arbitration body chosen – read them carefully before agreeing!
Serious irregularity - the second of three possible routes of challenge to an arbitration award, aimed at defeating procedural irregularity or impropriety.
The 1958 New York Convention requires 156 countries (at the last count) to enforce foreign arbitral awards. This is often easier than enforcing a UK court judgment abroad.
UK courts - their powers to intervene are prescribed by the Arbitration Act 1996. In the main, they will seek to uphold the integrity of the arbitral process.
Venue - parties can choose the venue for the arbitration – but they must also pay for it.
Written submissions - these often form the basis of arbitral proceedings, dispensing with the need for oral evidence, and its attendant costs (and unpredictability).
eXpense - arbitration may be cheaper than litigation, particularly since the court fees for commencing a claim have increased.
You may be wondering… what happened to the third ground of appeal: mistake on a point of law. Not an easy ground of challenge to succeed on.
Zzzz… it may take some time for the arbitral award to be handed down.
This article was published in New Law Journal in September 2016.
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