Arbitration Proceedings

Commencement of Arbitration

Arbitration must be commenced within the time limits for commencement of litigation.  Generally, a breach of contract claim must be commenced within six years of the date of the breach.  See the chapter on the Statute of Limitations.  Sometimes, shorter time limits are provided by the contract concerned. These time limits will generally be upheld by the courts in commercial contracts, but they be will be interpreted against the interests of the person who relies on them. Such time limits may not be upheld in consumer cases, where they may be deemed an unfair contract term.

Arbitration is usually commenced by a request to the other party, to submit to arbitration. The request must be communicated, in order to be effective. The proceedings are deemed commenced on the date so specified in the contract. Where no such date is identified, the date of the written communication requesting that the dispute be referred to arbitration is the commencement date.

Standard form contracts commonly specify how arbitration proceedings are to commence. The particular requirements of the contract for initiation of proceedings should be followed.  If nothing is specified, clear notice of reference to arbitration, details of the parties, details of the claim and particulars of the relief sought should be communicated.  The notice should require the other party to appoint or, more commonly to concur an appointment of the arbitrator. The substance of the notice and request is important, and no particular form is required unless the contract otherwise provides.

Appointment of Arbitrator

The parties are free to decide the arbitrator or the manner of his appointment.  An application may be made to the High Court to make the appointment if the appointment mechanism has not been provided or cannot be agreed.  Commonly, one party gives the other a list of potential arbitrators of which the other selects one.  Where an arbitrator dies, ceases to act, refuses to act the High Court can appoint a substitute.

Arbitration clauses as included or incorporated in standard form contracts usually provide procedures for the appointment and replacement of arbitrators.  Often in the event of disagreement, the arbitrator is appointed by a third party in the appropriate field e.g. in building contracts, by the President of the Royals Society of Chartered Surveyors Irish Branch).

The Arbitrator

A single arbitrator is usually appointed.  There may be provision for the appointment of several arbitrators, who sit together and who may act by a majority. An arbitrator does not need to be qualified as such.  However, it is desirable that the arbitrator has knowledge and expertise and experience in the relevant area and that he is experienced in arbitration proceedings.

The arbitrator\’s appointment becomes effective on his acceptance.  He need not accept the appointment. The arbitrator must be paid for his service.  This is unlike position with civil Judges, who are paid by the State. The arbitrator will usually require agreement on his fees at the outset. He may require an initial brief fee together with an hourly rate,  costs and expenses.  He may require fees to be paid on a rolling basis.  An arbitrator\’s costs may be taxed on the High Court scale or the Circuit Court scale.

The arbitrator must have no interest in the matter.  He must be impartial and fair.  He must disclose any circumstances which would give rise to any justifiable doubt regarding his impartiality or independence.  It may be possible for one party to challenge the arbitrator’s appointment on the basis of qualifications, independence, impartiality or failure to act.  The challenge must firstly be made to the arbitrator himself.  If this is rejected, an Application can be made to the High Court.

Generally, the Application must be made within 15 days of the party becoming aware of the circumstances of the grounds of challenge. The terms of the agreement may provide grounds upon which an arbitrator may be challenged. Where the potential ground of challenge is disclosed and not challenged in time, the right to do so is lost. .

Arbitrators are generally immune from personal liability in the performance of their duties. They cannot be sued for steps taken in the exercise of their functions. This immunity is similar to that enjoyed by Judges. There have been proposal s to modify this immunity.

The arbitrator should ensure that his communications with the parties are open and visible to both sides.  One-sided contact may give the impression of bias.  Communications with the arbitrator must be shown to the other side.  Reports relied on by the arbitrator, must be communicated to both sides.

Arbitration Procedures

The parties are largely free to set out the procedure for arbitration. This may be provided in the underlying contract entered before the dispute arose, which contains the arbitration clause. It may be agreed after the dispute has arisen. Various bodies provide standard rules, which may be incorporated by being referred to.  The arbitrator must abide by the rules which the parties have agreed to.

If the arbitration procedures have not been agreed, the arbitrator may determine the relevant procedure.  It is essential, however, that the arbitrator follows basic rules of justice.  The parties must be treated equally.  Each must be given an opportunity to present his case.  The arbitrator must determine the dispute in accordance with law, the terms of the contract, the facts and the customs of the trade.  He cannot simply decide on the basis of his own sense of fairness or common sense.

The parties usually exchange statements of their claim and a defence within a period. They should set the facts alleged and denied and the consequent relief and remedies sought.  The arbitrator decides whether or not to hold an oral hearing.  The arbitrator may be entitled to appoint experts in relation to the determination of particular issues.

Preliminary Hearing

The arbitrator usually arranges a preliminary meeting to deal with procedural issues, at an early date.  This is similar to the case management type conferences found in some legal proceedings. At the preliminary meeting, he will review the terms of the contract and consider the dispute in hand. He will deal with the likely course of the arbitration.  He may also consider issues regarding his fees and terms of appointment.

The preliminary meeting will generally specify a timetable for the exchange of the claim and the defence plus any reply or reply to defence.  The arbitrator may order an inspection of documents. The arbitrator decides whether an oral hearing should be held.  Some disputes may relate only to the interpretation of documents in which event an oral hearing may not be necessary.

If parties are to be required to give more details of their claim and defence, this may be specified.  A timetable for the various steps may be set or agreed.  If discovery is required, the details of how it will be ordered are provided for. The time, nature and venue of the hearing will be determined. Witness statements may be required, to be exchanged beforehand.

The modern trend is that witness statements are exchanged and advanced.  This reflects the England and Wales case management system. As with the English case management rules, the experts may be limited or they may be directed to agree to meet and agree on matters insofar as possible.  They will then give details of the common grounds or grounds of the dispute between them.

The arrangements regarding experts will be discussed.  Limitations may be imposed in relation to the number of witnesses.  Considerations relating to expert witnesses will be considered.  There may be a requirement that the witness statements of experts be exchanged.  The arbitrator himself may appoint an expert. A site visit may be important in some cases.  It should be done either alone or in the company of both sides to avoid any question of bias.

The arbitrator will make orders/directions after the meeting.  These will set out the procedural course of the dispute.  The cost will usually be borne by the party who will most ultimately pay costs.

The Parties’ Case

Each party must set out the facts which support his claim for the reliefs and orders sought.  The respondent must set out the particular facts if any which constitute his defence. Each party may submit documents which he claims to be relevant. As with Court proceedings, matters which are not pleaded or set out may not be raised at the hearing.  It is possible to apply to amend the claim, but the arbitrator has discretion as to whether to allow it. Costs may be awarded against the person seeking the amendment to compensate for the waste time.

Ordinary pleadings (claim and defence) are referred to as Points of Claim and Points of Defence. In some more complex types of dispute, a more detailed statement of case is required. This may include not only points of claim and defence but also detailed summaries of evidence.  Statements of the case are more complex up front, but reduce the time taken at the hearing. 

The arbitrator may give an award which would be equivalent to do a  decision or judgment.  The reasons may not necessarily be required.  The 2010 Act require reasons to be given in the award unless the parties otherwise agree.

Maintenance and Champerty

The offences and torts of maintenance and champerty do not apply to dispute resolution proceedings.

A third-party funding contract that meets the criteria (if any) prescribed below  shall not, insofar as it relates to dispute resolution proceedings, be treated as contrary to public policy or otherwise illegal or void.

The Minister may, by regulation prescribe criteria, including criteria relating to transparency in relation to funders and recipients, for third-party funding contracts.

Dispute resolution proceedings means:

• an international commercial arbitration;
• any proceedings arising out of an international commercial arbitration before a court of competent jurisdiction performing any of the functions provided for in the Model Law;
• any appeal from a decision of a court above
• any mediation or conciliation proceedings arising out of an international commercial arbitration, proceedings or an appeal referred to above;

A ‘third-party funding contract’ means a contract or agreement between a party or potential party to dispute resolution proceedings and a third-party funder, for the funding of all or part of the costs of the proceedings in return for a share or other interest in the proceeds or potential proceeds of the dispute resolution proceedings to which the party or potential party may become entitled.”.