Many commercial contracts these days contain an Arbitration agreement, necessitating any dispute to be referred to arbitration before court proceedings are embarked on. The aim being is to prevent going to the court. Arbitrators tend to have some expertise in the relevant field. The parties themselves can select their arbitrator, ensuring that the person has the necessary expertise in their area and is not connected to either of them.
Once agreed for the arbitrator, it is for the arbitrator to act in an impartial, judicial manner just as a judge would be expected to do. Furthermore there would be less time consumed explaining the insight of the technical matters in the field. Hence, there will be no need for expert witnesses.
Disputes may involve disagreements over the quality of goods supplied, interpretation of a trade clause or point of law, or a mixture of these issues. In a situation where points of law are involved the arbitrator may be a lawyer. Hence MAT will use 2 arbitrators at every hearing – a UK qualified solicitor or barrister, and an Islamic scholar.
The Arbitration Act 1996 aims to encourage commercial arbitration by providing a clear framework for its use. It sets out the power of the parties involved to form the process based on their requirements and offers what they must each do to allow the arbitration to proceed properly.
Furthermore, it clearly lays the powers of the arbitrators that include limiting the costs to be recoverable by either party and making orders which are equivalent to High Court injunctions if the parties were in agreement. Arbitrators are also authorised to participate in an inquisitorial role, investigating the facts of the case, as many of them would be in specialised in the relevant fields.
Arbitration hearings must be handled in a judicial approach, in accordance with the rules of natural justice, but the proceedings are informal and can be held in private, with the time and place determined by the parties. The arbitrator’s judgment, known as the Award, can be delivered instantaneously, and is binding on the parties as a High Court judgement would be and if required can be imposed as one.
The award is generally considered as final, but appeal may be made to the High Court on a question of law, with the approval of all the parties, or with the permission of the Court by way of judicial review. The High Court may ratify, vary or reverse the award, or send it back to the arbitrator for reconsideration.