What is commercial arbitration?

Commercial arbitration is a well-established method of business alternative dispute resolution. The Arbitration Act 1996 is the principal piece of legislation that governs arbitration in England, Wales, and Northern Ireland. The Act sets out the general principles, such as the fairness and impartiality of the process, and gives the parties considerable autonomy in determining the procedure for their arbitration. 

Arbitration is used when it is deemed appropriate for a case. It is often used if there is an arbitration clause within the contract between parties.

One of the significant advantages of arbitration in the UK is confidentiality. Unlike court proceedings, arbitration is generally private. The details of the dispute and the award are not made public.

The parties have the flexibility to tailor the arbitration process to their needs. This includes the rules, procedures, and location of the arbitration.

The London Court of International Arbitration (LCIA) is one of the leading institutions providing rules and administrative support for arbitrations.

International commercial arbitration

International arbitration is a method of resolving disputes arising from international commercial agreements and other international relationships without resorting to litigation in national courts. It involves the submission of the dispute to one or more arbitrators who render a binding decision. 

Key international law conventions, such as the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958), facilitate the enforcement of arbitration agreements and awards across signatory countries.

The UNCITRAL Model Law on International Commercial Arbitration provides a template for countries to harmonise their arbitration laws, promoting a consistent and predictable legal environment.

What happens during commercial arbitration?

During arbitration proceedings, the process typically involves several key stages, which can be customised based on the parties’ agreement and the applicable rules. Outlined below is a detailed outline of what happens during arbitration:

Initiation:

The process begins with an agreement to arbitrate, either through a clause in a contract or a separate arbitration agreement signed after a dispute arises.

One party (the claimant) sends a notice of arbitration to the other party (the respondent), outlining the nature of the dispute, the relief sought, and the names of proposed arbitrators, if applicable.

Selection of arbitrators:

Arbitrators are selected based on the parties’ agreement or the rules of the chosen arbitration institution (e.g., LCIA, CIArb). If the parties cannot agree, the institution may appoint arbitrators on their behalf.

Once selected, the arbitrators form the arbitral tribunal, which will oversee the arbitration process.

Preliminary meeting and procedural order:

The tribunal may hold a preliminary meeting to discuss procedural matters, set timelines, and establish the rules governing the arbitration.

The tribunal issues a procedural order outlining the agreed procedures, deadlines, and any preliminary decisions.

Exchange of pleadings:

The claimant submits a detailed statement of claim, including the facts, legal arguments, and evidence supporting their case.

The respondent submits a statement of defence, addressing the claimant’s arguments and providing their own facts, legal arguments, and evidence.

If the respondent has any counterclaims, they may be submitted at this stage, followed by the claimant’s reply to the defence and counterclaims.

Discovery and evidence gathering:

The parties may request documents from each other to support their case. The tribunal can order the production of specific documents. Parties submit written statements from witnesses outlining their testimony. If expert evidence is needed, parties may submit reports from expert witnesses.

Hearing:

The tribunal holds a hearing where both parties present their cases. This includes opening statements, witness examination (direct and cross-examination), and closing arguments. Hearings are usually recorded, and transcripts may be produced for the record.

Post-hearing submissions:

Parties may be asked to submit post-hearing briefs summarising their arguments and addressing any issues raised during the hearing. Final written or oral closing statements may be made before the tribunal deliberates.

Deliberation and award:

The arbitrators deliberate in private to review the evidence and arguments presented. The tribunal issues a written award, which includes the decision, reasoning, and any relief granted. The award is binding on the parties.

Enforcement and challenge:

The winning party can seek to enforce the award through national courts if the losing party does not comply voluntarily. The New York Convention facilitates the enforcement of international arbitral awards.

Under limited circumstances, such as serious procedural irregularities or issues of jurisdiction, a party may challenge an arbitral award in court. However, courts generally uphold arbitral awards unless there are compelling reasons to set them aside.

How can ARC Costs assist?

ARC Costs maintains an extensive legal network of expert commercial litigation solicitors who can assist with commercial arbitration. We would be happy to pass on your details to assist in your case. 

In addition to introducing you to a commercial litigation solicitor, we can also assist in the recovery and negotiation of legal costs in commercial cases, whether you are the paying or receiving party.

ARC Costs are highly experienced in advising and assisting with costs issues and disputes in different areas of law. As Costs Draftsman and Costs Lawyers, we can assist in your Commercial Litigation Costs issues.

Should you wish to discuss your costs query with us, please contact us on 01204 397302 or via email at info@arccosts.co.uk. Alternatively, you can complete our online query form and we will contact you to discuss your query further. We can provide expert legal advice on costs in our free, no obligation initial consultation.

We may receive payments from third party solicitors on our panel to whom we may refer your claim. We will never charge you for any referrals made to our panel of third parties.