15 - Alternative Dispute Resolution

Summary

INTRODUCTION

This chapter deals with the different forms of alternative dispute resolution (ADR). There is no single definition of ADR. The types of ADR that are covered in this chapter are arbitration, adjudication, expert determination, and mediation.

ARBITRATION

What is arbitration?

Arbitration is a form of dispute resolution procedure whereby the parties to a dispute agree to submit their differences to a third party for a binding decision. The party on whom jurisdiction is conferred to determine the dispute was traditionally known in Scotland as the ‘arbiter’, but that person is now known by the internationally recognised term, ‘arbitrator’. Certain characteristic elements of arbitration may be identified:

• (i) Arbitration is based on party autonomy: parties to a dispute are free to agree the bases and parameters on which they will be bound by the decision of an arbitral tribunal.

• (ii) The parties are free to choose their arbitrator(s).

• (iii) A valid agreement to arbitrate, if founded upon, will normally prevent court action from proceeding. ‘If the parties have contracted to arbitrate, to arbitration they must go.’

• (iv) The court will not intervene in the arbitration except where expressly permitted to do so by the law of the seat; but the court will assist the arbitration where permitted.

• (v) Arbitration is, as a default rule, private and confidential.

• (vi) Arbitration gives rise to a final and binding determination of the mat-ters submitted to the arbitrator, which are contained in the arbitrator's ‘award’. The grounds of challenge are limited.

• (vii) Subject to the limited grounds of challenge, the arbitrator's award will be recognised and enforced by the courts in Scotland and, in very many cases, internationally.

Each of these aspects will be considered further below.

The legal framework

Arbitration has been said to be as old as Scots law itself. A legislative framework that was rooted in the language of late seventeenth century Scotland, and various perceived deficiencies in the common law rules, led to the passing of the principal legislation which today regulates the law of arbitration in Scotland: the Arbitration (Scotland) Act 2010 (the ‘2010 Act’). The 2010 Act is heavily influenced by both the English Arbitration Act 1996 and the benchmark international instrument, the UNCITRAL Model Law on International Commercial Arbitration (the ‘Model Law’).