Arbitration

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Arbitration is a contract based dispute resolution process, though it does have a statutory oversight regime in Ireland by virtue of the Arbitration Act 2010. This act came into effect in Ireland in June 2010 and adopts the UNCITRAL Model Law on International Commercial Arbitration (1985, amended 2006) as core arbitration law, Ireland now has the same core arbitration law status as approx. 80 countries, states or territories around the globe (albeit there may be minor variants to the model law from jurisdiction to jurisdiction). UNCITRAL stands for United Nations Commission on International Trade Law.

Arbitration, which has been in use for centuries, is a dispute resolution process based on contract where the parties to a dispute agree to refer a future dispute (or disputes) between them to an independent third party neutral, known as the Arbitrator, or the Arbitration Tribunal. The tribunal can consist of a single member or an uneven number of members greater than one. Arbitration cannot commence without the agreement of both parties and such agreement is often included as a clause in the original – or underlying – contract between the parties, though such an agreement is a discrete contract in its own right. It is also possible to refer disputes to arbitration after the dispute has arisen (such post-dispute agreement to arbitrate are called ad-hoc arbitrations).  The arbitration agreement normally provides that the parties will agree as to whom to appoint as the arbitrator, and failing such agreement between the parties, the arbitration agreement usually provides a default mechanism allowing one party to the dispute to ask an independent person, such as the president for the time being of the Royal Institute of Architects of Ireland (RIAI), or the Chairperson for the time being of the Chartered Institute of Arbitrators (CIArb) Irish Branch, to appoint an arbitrator or an arbitral tribunal.

Arbitration is a private and confidential process and gives the Parties a fair degree of flexibility in the choice of arbitrator and process procedures. The process is fast, certainly quicker than the public courts, and is usually less expensive than going to court, albeit the cost of the Arbitrator and venue is borne by the Parties, whereas in the courts the Judge and the courthouse are free of direct charge. The process of arbitration leads to a final and binding resolution of the dispute in the form of a written – and usually reasoned- decision of the arbitrator called an arbitration award or an arbitral award.  

An arbitral award is private to the parties, thus it is not published anywhere and is not available to the public as court decisions are. An arbitral award has the same status as a Judgement or Order of the High Court and it is enforceable as such. Because Ireland has adopted the UNCITRAL Model Law, an arbitral award prepared in Ireland under the Arbitration Act 2010 is enforceable in any country, state or territory which has also adopted the UNCITRAL Model Law. It is not possible to appeal an arbitral award and there are very few and limited grounds to challenge an arbitral award under Article 34 of the UNCITRAL Model Law adopted in the Arbitration Act 2010.

Similar to litigation, the costs in arbitration normally “follow the event” whereby the losing party bears their own costs, the costs of the other party and the costs of the arbitration (i.e. the fees and expenses of the arbitration tribunal) unless the arbitral award provides otherwise.