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The Arbitration Act 1996 (the ‘Act’) cameinto effect on 31 January 1997. The Act
applies to arbitration proceedings commenced on or afterthat date.The Act is expressly
stated to be Construed inaccordance with three principles which are:
(a)the object of arbitration is to obtain the fair resolution of disputes by an impartial
tribunal without unnecessary delay or expense;
(b)the parties should be free to agree how their disputes are resolved, subject only
to such safeguards as are necessary in the public interest;
(c)the court should not intervene in arbitrations save as expressly provided in the Act.
Agreements to be in Writings.
Part I applies only where the arbitration agreement is in writing. The writing can
simply be evidence of an agreement, rather than the agreement itself. The agreement
does not have to be signed by the parties. It can be made by an exchange of
communications in writing. It caneven be made orally but by reference to written
terms or by exchange of written submissions inarbitral or legal proceedings.
Oral agreements remain outside the scope of the Act but may be enforceable under
common law. Variations of an arbitration agreement must also be in writing and
any agreement to exclude or vary the non-mandatory provisions of the Act
must certainly be so.
Jurisdiction.
Unless otherwise agreed by the parties,arbitrators may rule on their own substantive jurisdictions which would include such questions as, for example, whether there was
a valid arbitration agreement. However, any decision by the arbitral tribunal may be
subject to review by the court, although objection must be taken in the arbitration
before a party takes a step to contest the merits of the case.
Procedure.
One of the themes which runs through the Act, is that of party autonomy: within certain bounds,the parties are free to agree the arbitral process they chose. The most important expression of this idea in the Act provides that although it is for the tribunal to decide
evidential matters this is subject to the right of the parties to agree on any matter. It is only where there is no such agreement that the tribunal will decide the procedure. This could even involve actinginquisitorially.the procedure includes evidence. It is therefore for the parties to decide, for example, whether they wish the strict rules of evidence to apply. If the
partiesare not agreed on this issue, however, the Act allows the tribunal to disapply
the rules of evidence. This gives a valuable opportunity to lift the burden of a number of technical rules off the arbitrators and the parties in what is, after all, intended to be a more informal procedure than litigation.
The flexibility of the procedure which can be adopted as regards exchange of witness
statements of case, disclosure of documents and the like allows the procedure
to be adapted to the circumstances of each case.
The Basis for decision.
An innovation brought in by the Act is to allow the arbitral tribunal to decide the dispute either inaccordance with the law chosen by the parties or (if the parties so agree in writing) “in accordance with such other considerations as are agreed by them or determined by the tribunal”. The traditional stance of English arbitration law has been that, subject to minor exceptions, arbitrators must apply the law.The words quoted are intended to allow awards to be made on general equitable principles.
tribunal Powers.
The Act confers a number of powers on the arbitral tribunal unless parties otherwise agree. Forexample, the tribunal will have the same powers as the court in order to grant an injunction or order specific performance. The parties may agree to give the tribunal powers which are not available to the courts. These powers must not be contrary to public policy, otherwise problems with enforcing the award may arise.
Conclusion.
The 1996 Act represents a significant advance in arbitration law. It puts more power in the hands of parties, while at the same time imposing obligations on them and the tribunal to achieve what arbitration was always supposed to be able to do: to provide an efficient and cost-effective means of dispute resolution. This booklet contains a general description of the provisions of the Arbitration Act 1996. It is designed for guidance only and not as a substitute for specific legal advice.