COURTS SHOULD not interfere in a decision made by people to have their dispute settled by arbitration, a seminar on the Arbitration Bill was told at the weekend.
The proposed new Bill should not contain a specific section allowing the courts to overturn arbitrations where there was an error of law or the arbitration was procedurally unfair, Colm Ó hOisin SC told the seminar, organised by the Irish branch of the Chartered Institute of Arbitrators, the Law Society and the Bar Council.
The core principle in arbitration is the autonomy of the parties and of the arbitral process, he said. At its heart is the agreement between the parties to resolve their disputes by arbitration.
“Inherent in that choice is an agreement as to a method of resolution of their disputes by an arbitrator and that the arbitrator’s award is to be final and binding and that there is to be no appeal on the merits,” he said.
The identity of the arbitrator was obviously important, so parties should always reflect carefully on their choice of arbitrator. One advantage of arbitration was that one could choose who was deciding the dispute, while parties cannot choose a judge.
He said the UN Model Law, providing for a system of international arbitration, and which the Arbitration Bill was intended to bring into Irish law, introduces a requirement that reasons be given for awards. This allows the arbitrator’s competence to be assessed.
“If the parties have chosen arbitration for whatever reason – be that finality, privacy, cost or the technical expertise of the arbitrator – such choice should be respected and the parties should be held to that agreement,” he said.
Mr Justice Frank Clarke said dissatisfaction with the outcome of an arbitration could be dealt with through a review mechanism within the arbitration process. “If the courts have relatively wide jurisdiction to interfere there will be uncertainty until the limitation period runs out. We need to find a balance between the problem of a person who gets a bad decision from an arbitrator and the interests of all those who go to arbitration and who need certainty.”
He also said that if there were to be court challenges to arbitrators’ decisions, the Circuit Court, as well as the High Court, should have jurisdiction to hear them if the amount at stake fell within the jurisdiction of the Circuit Court.
Prof Noel Bunni, an arbitrator and consulting engineer, said both domestic and international arbitration should be the same. The Model Law empowers an arbitration tribunal to appoint one or more experts, who could be a senior counsel, to advise on legal and other issues, and this should assist in avoiding errors of law.
Ciarán Fahy, the institute’s chairman, said a report on the seminar would be sent to the Department of Justice for consideration before the Bill was finally brought forward.