It is possible to make applications to the arbitrator, in the pre-hearing phase of an arbitration. This is analogous to pre-trial applications in court proceedings. The purpose is usually to assist in the preparation and correct formulation of the case. The arbitrator may make interim awards dealing with preliminary and preparatory matters. He may also make an interim award of damages or order restraining one party, where this appears necessary to preserve the status quo and safeguard the integrity of the process
As with Court proceedings, there are provisions where one or other party either does not appear or does not pursue or defend his case. The arbitrator may terminate proceedings, where the claimant fails to proceed with his claim and prosecute the requisite steps in a timely manner. Similarly, where the defendant fails to appear or having appeared, fails to defend or prosecute his defence, the matter may be heard without him, based on the claimant’s evidence only.
An Application can be made to amend the claim. If the one party’s case is not fully specified, the other party may request further and better particulars of the claim or defence. If this is refused, the arbitrator may make an order which so requires. If the party concerned continues to refuse to provide the particulars, the arbitrator may draw adverse inferences from this failure. He may even prevent the party concerned from proceeding with the claim or defence.
Parties are entitled to disclosure of documents held by the other side, which are relevant to the case/matters in dispute. If a party fails to make a voluntary disclosure of relevant documents on request, the arbitrator may make an order, which so requires. See the civil litigation, in relation to the principles of discovery. Discovery covers all types of documents and permanent records, whatever the medium. The same principles of privilege apply, as apply in civil proceedings.
The arbitrator may grant interim orders in the course of the proceedings, equivalent to court injunctions. The pre-trial orders are temporary measures designed to maintain or restore the status quo until the dispute is decided. The order may restrain action which is likely to be prejudicial to the process. It may preserve assets out of which an award might be satisfied. It may preserve evidence of likely relevance to the dispute.
The preliminary order may be sought in a one-sided application, where necessary. This might be necessary where, for example, the other party would be otherwise tipped off and given the opportunity to destroy the very thing that is ordered to be preserved. The Courts support interim arbitration orders in arbitration cases and will enforce them. In some cases, an application may be made directly to Court in support of the arbitration proceedings.
If the interim orders are not complied with, the arbitrator can take appropriate steps including striking out the claims or defence and making such adverse findings as appropriate. An adverse order of costs may be made. The courts will grant orders in support if interim orders in arbitration matters.
Challenges to Arbitrator’s Jurisdiction
The arbitrator himself has the primary power to decide his own jurisdiction under the appointment. This may be determined in an initial stage or the issue may be reserved for a later stage. Claims by the parties that the arbitrator does not have jurisdiction, must be raised by the time the defence is stated.
If the arbitrator is claimed to be acting outside his authority, the matter must be raised as soon as the alleged exceeding of jurisdiction occurs. Where the decision is made at the preliminary stage it can be challenged to the High Court within 30 days.
Conduct of Arbitration Hearing
The conduct of the arbitration hearing itself is largely left to the arbitrator unless and to the extent that the arbitration agreement makes specific provision for it. It is generally a matter for the arbitrator to decide whether an oral agreement should be held. Unlike litigation, an arbitration hearing is not open to the public.
The parties may or may not be represented by legal representatives. Basic principles of justice raise a presumption that there is a right to legal representation. However this may be excluded by agreement. In some cases, the nature of the dispute may make it more appropriate that the matter is dealt with by experts in the field.
The arbitrator or a party, with his approval, may apply to the High Court for assistance in securing evidence. This may include an Order requiring a witness to attend. The arbitrator can administer oaths and affirmations to witnesses. Knowingly giving false evidence constitutes the criminal offence of perjury.
The manner of examination of witnesses is similar to that in Court proceedings. The party who has called the witness (to prove his case) elicits his evidence without leading questions on contentious matters. The other side or his representative cross-examines the witness with a view to challenging and testing the truth and reliability of the evidence and undermining the credibility of the witness. Contradictory facts alleged by the other side must be put to the witness for his comment. The witness may then be re-examined by or on behalf of the party who has called him, in order to clarify matters raised in cross-examination.
Where there have been full statements of case and witness statements, the witness statements may be accepted and stand as that party’s evidence in chief (i.e. that given at the behest to the party, who has called him. In this case, the cross-examination would commence immediately, on the basis of the evidence in the witness statement.
Decision of the Arbitrator
The arbitrator decides matters in dispute. He should follow the normal rules of evidence. Only admissible relevant evidence should be considered. However, the arbitrator primarily decides whether the rules have been followed and a Court would be reluctant to interfere. The arbitrator should consider all relevant evidence offered and decide the case on the basis of that evidence.
One of the benefits of arbitration is that the arbitrator may be an expert in the relevant field. For example, in construction and engineering disputes the arbitrator with have expertise in that area. Unlike Judges, arbitrators may consult their own experts or advisers and seek advice and reports. If they do so, the parties should be given an opportunity to question the expert if they so require or if it is appropriate.
The arbitrator, however, is not allowed to use his own expertise to determine the dispute. His expertise must be used only to assist in evaluating and understanding the evidence. Where the arbitrator has a different view as to matters he should raise the point with the parties or their witnesses and allow them to comment. Ultimately, he must decide the matter on the basis of the evidence
Awards and Orders
An arbitration award is the equivalent of an order made in court proceedings. The arbitration award must be in writing and signed by the arbitrator. The award is not directly enforceable in the same manner as a court order. Summary steps can be taken to clothe award with the authority and enforceability of a court order.
The settlement of an arbitration may be agreed and recorded as an award. The arbitrator must record the settlement, it so requested.
Unless the parties otherwise agree, an arbitration award must contain reasons for the decision. The arbitrator award should set out the findings on foot of the statements of claim and defence. It either may make an order granting the relief sought, granting lesser relief, or it may dismissing the claim. If there is a counter-claim, an order will also be made in relation to it.
An award may require the payment of damages. Interest may be awarded on the award, for such a period as the arbitrator considers fair and reasonable. Simple or compound interest may be awarded. Interest may be awarded up to the date of award. It may also award interest on the award itself.
The award may grant the equivalent of an order of specific performance of a contract or other obligation. It may grant awards, equivalent to other courts orders. The award should state what is to be done or not to be done to.
The parties may make specific provision, by which the arbitrator will be bound. The arbitrator has the power to award costs, as he sees fit. However, he must base his decision in relation to costs on the facts of the case. Ordinarily, costs should be awarded in favour of the successful party.
If a party has made an offer of settlement, which has not been accepted, the successful claimant would normally be entitled to his costs from the date of rejection of the offer, only. Such an offer cannot be used as an admission of liability in the case.
An offer may be made “without prejudice as to costs”. As with Court orders, the arbitrator may not award the successful party its full costs or may award no costs if he has acted inappropriately. This may, for example, include exaggerating his case, protracting the hearing and not acting in good faith. Reasons should be given by the arbitrator, for the departure from the usual principle, that the cost follow the award.
Where each party succeeds in part, due, for example to a counterclaim, each may be asked to bear his own costs. Alternatively, costs may be apportioned by reference to the respective awards or the reduction due to the counterclaim. Alternatively, the net winner, may be awarded costs in full against the other party.
The arbitrator must specify the grounds on which he has exercised his discretion as to costs, the items of recoverable costs and by whom they should be paid. Either party may apply to have the costs taxed by the Taxing Master of the High Court or County Registrar.
Challenging the Award
An arbitration award is binding, in the absence of very limited grounds of challenge. The Courts are reluctant to interfere with arbitration awards. However, if the arbitration has been conducted in a wholly inappropriate manner or contrary to basic fair procedures, Courts, on an application, may nullify the award or remit it for reconsideration to the same arbitrator or to a new arbitrator.
The grounds for interference by the Courts with awards are set out in the Arbitration Act. The grounds are: the arbitration agreement was invalid, no proper notice of the arbitration was given; a party was not given the opportunity or he was unable to present his case; the award is outside the powers of the arbitrator or the award is unlawful. The Courts are more likely to remit the matter, than set it aside.
The Courts will not generally interfere on the basis of a technical failure to comply and procedures. Errors by themselves are not sufficient grounds of challenge. There must be an irregularity causing substantial injustice or unfairness. The following may be fundamental enough to allow the Order to be set aside or remitted:
- failing to give each party opportunity to be heard and present his case;
- acting on the basis of irrelevant considerations;
- failing to act on the basis of relevant considerations;
- failure to determine the matters in question.
A challenge must made within three months of the award. In certain cases, a shorter period applies.
Enforcing the Award
An arbitration award is equivalent to a Court judgment. It is enforceable in the State by legal action or alternatively, with the permission of the High Court, in the same manner as a Court order. The person affected by the award cannot simply claim that the award is invalid or unfair. He would need to take separate proceedings to challenge the award itself, within the requisite time limits.
An Application for leave to enforce must be made. This is a short form summary Application. Once leave is granted the board may be enforced in the same way as a judgment. Leave will be granted once the relevant arbitration agreement was entered, the dispute arose, was determined and the award was made. If this is proved, the Court will allow almost automatic enforcement.
Alternatively, a person may take a separate legal action on the basis of failure to comply with the awards. There may be advantages in this course in some cases.
Arbitration may be recognised internationally. International Convention requires States to recognise and enforce foreign arbitration awards on the production of authenticated copies of the arbitration agreement and award. There are very limited grounds for refusal of recognition.
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