{"id":424,"date":"2019-04-10T11:06:49","date_gmt":"2019-04-10T11:06:49","guid":{"rendered":""},"modified":"2019-06-11T08:47:38","modified_gmt":"2019-06-11T08:47:38","slug":"role-courts-arbitration-process-5528","status":"publish","type":"post","link":"https:\/\/www.lawteacher.net\/free-law-essays\/arbitration-law\/role-courts-arbitration-process-5528.php","title":{"rendered":"Role of the Courts in Arbitration Process"},"content":{"rendered":"

1.0 Introduction<\/h2>\n

Arbitration is a process<\/a> whereby two or more parties agree to submit a legal dispute to one or more third parties, whose role it is to enunciate judicially on that dispute in the shape of a binding award.[1]<\/a> The purpose of arbitration is to retract the power to decide a dispute from the national court, and to transfer that power to an arbitrator.[2]<\/a> The consensual nature of arbitration may need the parties in the arbitration agreement to resort to the Court to enforce incidence of their agreement.[3]<\/a> The court will support and supervise the arbitration process, but this does not imply that the court gives powers to the arbiter beyond those that are strictly necessary to permit the arbiter to perform the duties that have been imposed upon, and accepted by him.[4]<\/a> As a general principle, the Court should not intervene with the arbitration process except as provided by the Act.[5]<\/a> <\/p>\n

2.0 Role of Court in Arbitration<\/h2>\n

2.0.1 Extension of Time<\/h3>\n

In section 12 and section 79 of the Arbitration
\nAct 1996 (AA 1996), the court has power to extend time for beginning of
\narbitral proceedings, and to extend time limits relating to arbitral
\nproceedings. The court\u2019s pro-arbitration stance is demonstrated in the case Xstrata Coal Queensland Pty Ltd and others v
\nBenxi Iron & Steel (Group) International and Economic Trading Co Ltd,[6]<\/strong><\/a><\/em>
\nwhere it allows an application under section 79 of AA 1996 to extend the time
\nlimit in which a party could apply to the tribunal under Article 27 of the
\nLondon Court of International Arbitration (LCIA) Rules 1998. The application
\nwas in the circumstance of seeking the correction of an ambiguity regarding to
\nthe identity of one of the claimants. Since the time limit under Article 27 of
\nthe LCIA Rules 1998 would almost always expire in practice before the outcome
\nof enforcement proceedings, the decision to allow a retroactive extension of
\ntime displays the court\u2019s pragmatic approach.[7]<\/a> <\/p>\n

2.0.2 Appointment of Arbiter<\/h3>\n

Section 18 of AA 1996 and Rule 7 of
\nArbitration (Scotland) Act 2010 (AA 2010) enable a party to apply to the court
\nfor the court to exercise its powers to give directions as to the making of
\ntribunal appointments or make the appointments itself.[8]<\/a> Any
\nappointment made by the court has effect as if made with the agreements of the
\nparties.[9]<\/a> In the
\nEnglish case Silver Dry Bulk Company
\nLimited v Homer Hulbert Maritime Company Limited<\/em>,[10]<\/a> the
\ncourt has established the relevant principle when asked to assist with
\nappointments of the tribunal. It was held that an initial threshold test must
\nbe made in order for an application under section 18(3) to succeed, namely
\nthere must be a \u201cgood arguable case\u201d that a tribunal would have a jurisdiction
\nto hear the issue. It was also concluded that even if the court has such power
\nunder section 18, it would not have been applied as a matter of discretion,
\nprimarily because making an order that the tribunal had been \u201cvalidly
\nconstituted\u201d in this case would go much deeper than would be justified from
\nmerely concluding that there was a \u201cgood arguable case\u201d, and that the tribunal
\nwas in existence and was already dealing with the matter, and also capable to
\ncontinue without any assistance from the court, even if its status at the time
\nwas uncertain.[11]<\/a>
\nThe court\u2019s approach in this matter remain in favour of not interfering with
\ndecisions that fall within the realm if an arbitral tribunal\u2019s jurisdiction, in
\nline with the kompetenz-kompetenz<\/em>
\nprinciple.<\/p>\n

2.0.3 Evidence and Disclosure<\/h3>\n

The court in England and Wales has the
\nsame power as the arbiters to make orders in support of arbitral proceedings in
\nregards to certain matters, including taking evidence of witness outside the
\njurisdiction, and the preservation of evidence.[12]<\/a> The
\npower primarily relates to the parties in the arbitration, and the court will
\nonly exercise such powers in exceptional circumstances.[13]<\/a> The
\ncourt will only make such an order if, or to the extent that the tribunal has
\nno power or unable act effectively. In Scotland, while the court also has the
\npower to take evidence,[14]<\/a> there
\nis no right of discovery at the commencement of the proceedings.[15]<\/a>
\nNonetheless, during the arbitration proceedings, the court will order
\nproduction of the documents in the hands of the parties to the dispute or
\nothers, provided that they can be shown to be relevant in regards to the
\npleadings and not protected by privilege or confidentiality.[16]<\/a> <\/p>\n

2.0.4 Court Orders and Foreign Arbitration Proceedings<\/h3>\n

In Scotland, the court will grant a
\nwarrant to arrest on the dependence of an action (that is for an attachment
\nmade pending the outcome of the proceedings) founded on a contract that
\nincludes an enforceable arbitration clause, even where an arbitration is being
\nconducted, or is anticipated to be conducted outside Scotland.[17]<\/a> In the
\ncase of Motordrift A\/S -v- Trachem<\/em>,[18]<\/a> a
\nNorwegian company raised an action in Scotland against an English company whose
\nregistered office was in London. The pursuer established his jurisdiction on
\nthe arrestment of funds held by the English company’s bankers in Scotland. Arrestment
\nof moveable property in Scotland was one of the grounds to establish
\njurisdiction in the Scottish courts. The English company sought recall of the
\narrestment obtained on the dependence of the action, on the ground that the
\naction was founded on a contract containing an arbitration clause referring
\ndisputes between the parties to arbitration, and another clause stipulating that
\nEnglish law would apply. The court held that the pursuers would be entitled to
\nuse the present process to enforce any arbitral award in their favour relating
\nto the matters raised in the action, and refused to recall the arrestment. <\/p>\n

Furthermore, in the case of Channel Tunnel Group Ltd v Balfour Beatty
\nConstruction Ltd,[19]<\/strong><\/a>
\n<\/em>in the speech of Lord Mustill in the House of Lord,[20]<\/a> while
\nthe court had no power to grant an injunction in an arbitration whose seat was
\noutside England and Wales, the High Court may by order (whether interlocutory
\nor final) award an injunction or appoint a receiver in all cases where it
\nappears to the court that it is just and convenient to do so.[21]<\/a> He held
\nthat the English court had power under this provision to award interim
\ninjunction although the arbitration was not seated in England or Wales.
\nBesides, by awarding the order, the court does not involve itself at all in the
\nresolution of the dispute, instead it merely seeks to make the resolution of
\nthe dispute by the foreign court more effective. The granting of the
\ninterlocutory injunction by way of interim protection does not mean that the
\ncourt is playing any part in the decision, but rather, doing its best that the
\nresolution by the arbiters is fruitful.[22]<\/a><\/p>\n

2.1 Discussion<\/h2>\n

Based on the above situations, it can be
\nseen that the court would only intervene with the arbitration process when it
\nis very necessary, and when the arbiter or tribunal is incapable to carry out
\nthe arbitration effectively. The court would try to stay as far away from
\nmaking any decision for the tribunal, and would only do so on the basis of very
\nstrong ground. It also allows the tribunal to run the arbitration on their own
\ncourse, and would only interfere to ensure that the arbitration is carried
\nforward to its best advantage.[23]<\/a> Also
\nwhen the court intervenes, it is because it is just and convenient to do so.
\nFurthermore, when the court exercise it powers, for instance in the disclosure
\nof evidence and witness, it is to ensure that the arbitration proceedings run
\nsmoothly, and not to replace the power of the arbiter or the tribunal. <\/p>\n

3.0 Conclusion <\/h2>\n

To perceive the role of the court either
\nas supporter, or enforcer is a difficult stance to take, because the court
\nenforce its power to support the arbitration proceedings. Perhaps it would be
\neasier to see the role of the court as complementary in arbitration, where it
\nonly exerts its power when the tribunal alone is unable to bring the best
\noutcome in a proceeding.<\/p>\n

Table of Cases<\/h2>\n

UK Cases<\/h3>\n