Alternative dispute resolution (ADR) Exam Questions With
Complete Solutions
Staying legal proceedings
Even though there may be an arbitration agreement in existence,
some parties still commence court proceedings when disputes
arise. This often happens when a party does not appreciate that
its contract with the other side contains an arbitration agreement
or when it believes it will gain a tactical advantage by litigating
rather than arbitrating.
If this happens, the purported defendant who still wants to
arbitrate must:
Acknowledge service of the particulars of claim (or claim form
in the Commercial Court) to stop the purported claimant from
obtaining default judgment under CPR 12. In the
acknowledgment of service form, the defendant should indicate
that they are contesting the court's jurisdiction.
Apply to the court under CPR 62.8, asking the court to stay the
proceedings pursuant to s. 9 of the Act so that the dispute can be
dealt with by arbitration.
Section 9 of the Act is a mandatory provision. It is important
that the purported defendant does not take any other steps in the
court proceedings - if he does, he may be treated as having
'submitted' to the court's jurisdiction which means the litigation
will continue in place of arbitration.
CPR 62.8 Procedure
,The documentation the purported defendant must prepare to
make an application under CPR 62.8, asking the court to stay the
proceedings, is (as under CPR 23):
an application notice;
a draft order; and
evidence in support (either in a witness statement or in the
application notice itself).
The evidence should confirm that there is a binding agreement
between the parties, there is a dispute eg breach of contract, the
contract contains a binding arbitration agreement (pursuant to
s.5 and s.6 of the Act) and, importantly, that the dispute falls
within the scope of the arbitration clause.
The court is obliged to grant a stay unless it finds that the
arbitration agreement is 'null and void, inoperative or incapable
of being performed': see s. 9(4) of the Act. It is rare for the court
not to order a stay and, once the legal proceedings are stayed,
the claimant will need to commence the arbitration, as
previously agreed, to determine the dispute.
Commencement of the arbitration
The arbitration agreement usually sets out the procedure for
commencing the arbitration.
The most common procedure is for one of the parties to serve a
written request to arbitrate on the other. The request will
contain:
The names and addresses of the parties;
A brief statement of the nature and circumstances of the dispute
and the relief being sought; and
A list of possible arbitrators and/or how they should be
,appointed.
Any arbitration institutional rules that have been adopted by the
parties will set out very clearly what needs to be included in the
notice/request that commences the arbitration.
Appointing an arbitrator
The arbitration agreement or the rules incorporated into it will
usually contain a procedure for appointing arbitrators.
In the absence of any agreement, this issue is dealt with by ss.16
- 18 of the Act, which imposes time limits within which the
parties must make an appointment.
It is unusual for an arbitration agreement to actually name an
arbitrator. The more common course is for the agreement to
state how the arbitrator (or arbitrators) will be appointed.
The parties often agree to appoint one arbitrator each, with a
third arbitrator appointed by the co-arbitrators or the relevant
arbitral institution.
Commonly, however, parties will agree to adopt the rules of
procedure of an arbitration institution in their arbitration clause
or once a dispute has arisen. Such rules would stipulate how the
arbitrators are to be appointed.
Duties of the arbitrator
Section 33 of the Act is a mandatory provision and states the
general duty of the arbitrator. It provides:
The tribunal shall:
act fairly and impartially between the parties, giving each party
a reasonable opportunity of putting their case and dealing with
that of their opponent; and
, adopt procedures suitable to the circumstances of the particular
case, avoiding unnecessary delay or expense, so as to provide a
fair means for the resolution of the matters falling to be
determined.
It is the arbitrator's responsibility, upon receipt of a notification
of appointment, to decide that:
he is competent and has the time to do the job;
the agreement gives them power to act; and/or
he has been validly appointed.
General duty of the parties
The parties also have duties imposed upon them in an
arbitration.
Both in preparing for the hearing and during the hearing itself
the parties must comply with section 40, another mandatory
provision of the Act. This states that:
"The parties shall do all things necessary for the proper and
expeditious conduct of the arbitral proceedings, and this
includes:
complying without delay with any determination of the tribunal
as to procedural or evidential matters, or with any order or
directions of the tribunal; and
where appropriate, taking without delay any necessary steps to
obtain a decision of the court on a preliminary question of
jurisdiction or law."
The parties cannot contract out of s. 40, even with the
arbitrator's consent.
The preliminary meeting
Complete Solutions
Staying legal proceedings
Even though there may be an arbitration agreement in existence,
some parties still commence court proceedings when disputes
arise. This often happens when a party does not appreciate that
its contract with the other side contains an arbitration agreement
or when it believes it will gain a tactical advantage by litigating
rather than arbitrating.
If this happens, the purported defendant who still wants to
arbitrate must:
Acknowledge service of the particulars of claim (or claim form
in the Commercial Court) to stop the purported claimant from
obtaining default judgment under CPR 12. In the
acknowledgment of service form, the defendant should indicate
that they are contesting the court's jurisdiction.
Apply to the court under CPR 62.8, asking the court to stay the
proceedings pursuant to s. 9 of the Act so that the dispute can be
dealt with by arbitration.
Section 9 of the Act is a mandatory provision. It is important
that the purported defendant does not take any other steps in the
court proceedings - if he does, he may be treated as having
'submitted' to the court's jurisdiction which means the litigation
will continue in place of arbitration.
CPR 62.8 Procedure
,The documentation the purported defendant must prepare to
make an application under CPR 62.8, asking the court to stay the
proceedings, is (as under CPR 23):
an application notice;
a draft order; and
evidence in support (either in a witness statement or in the
application notice itself).
The evidence should confirm that there is a binding agreement
between the parties, there is a dispute eg breach of contract, the
contract contains a binding arbitration agreement (pursuant to
s.5 and s.6 of the Act) and, importantly, that the dispute falls
within the scope of the arbitration clause.
The court is obliged to grant a stay unless it finds that the
arbitration agreement is 'null and void, inoperative or incapable
of being performed': see s. 9(4) of the Act. It is rare for the court
not to order a stay and, once the legal proceedings are stayed,
the claimant will need to commence the arbitration, as
previously agreed, to determine the dispute.
Commencement of the arbitration
The arbitration agreement usually sets out the procedure for
commencing the arbitration.
The most common procedure is for one of the parties to serve a
written request to arbitrate on the other. The request will
contain:
The names and addresses of the parties;
A brief statement of the nature and circumstances of the dispute
and the relief being sought; and
A list of possible arbitrators and/or how they should be
,appointed.
Any arbitration institutional rules that have been adopted by the
parties will set out very clearly what needs to be included in the
notice/request that commences the arbitration.
Appointing an arbitrator
The arbitration agreement or the rules incorporated into it will
usually contain a procedure for appointing arbitrators.
In the absence of any agreement, this issue is dealt with by ss.16
- 18 of the Act, which imposes time limits within which the
parties must make an appointment.
It is unusual for an arbitration agreement to actually name an
arbitrator. The more common course is for the agreement to
state how the arbitrator (or arbitrators) will be appointed.
The parties often agree to appoint one arbitrator each, with a
third arbitrator appointed by the co-arbitrators or the relevant
arbitral institution.
Commonly, however, parties will agree to adopt the rules of
procedure of an arbitration institution in their arbitration clause
or once a dispute has arisen. Such rules would stipulate how the
arbitrators are to be appointed.
Duties of the arbitrator
Section 33 of the Act is a mandatory provision and states the
general duty of the arbitrator. It provides:
The tribunal shall:
act fairly and impartially between the parties, giving each party
a reasonable opportunity of putting their case and dealing with
that of their opponent; and
, adopt procedures suitable to the circumstances of the particular
case, avoiding unnecessary delay or expense, so as to provide a
fair means for the resolution of the matters falling to be
determined.
It is the arbitrator's responsibility, upon receipt of a notification
of appointment, to decide that:
he is competent and has the time to do the job;
the agreement gives them power to act; and/or
he has been validly appointed.
General duty of the parties
The parties also have duties imposed upon them in an
arbitration.
Both in preparing for the hearing and during the hearing itself
the parties must comply with section 40, another mandatory
provision of the Act. This states that:
"The parties shall do all things necessary for the proper and
expeditious conduct of the arbitral proceedings, and this
includes:
complying without delay with any determination of the tribunal
as to procedural or evidential matters, or with any order or
directions of the tribunal; and
where appropriate, taking without delay any necessary steps to
obtain a decision of the court on a preliminary question of
jurisdiction or law."
The parties cannot contract out of s. 40, even with the
arbitrator's consent.
The preliminary meeting
