Ireland has a long history and tradition of resolving disputes by arbitration and its predecessor systems under its ancient laws. Ireland in more recent times has legislated for the arbitral process and now that evolution has taken another step forward with the passing of the Arbitration Act, 2010 ("the 2010 Act") which became operative on the 8th June 2010.
Arbitration is a dispute resolution process which is entered into by the parties by agreement and the Irish Courts have traditionally respected the independence of the arbitral process and have intervened only in circumstances where there were fundamental errors of law on the face of awards or errors in the procedure which if left to stand would result in an injustice. The Court's ability to intervene in the arbitral process has been dramatically restricted by the 2010 Act and time will tell what approach the Courts will take in cases of seeming injustice where the 2010 Act provides that they shall not interfere. It would appear that the Courts' willingness to exercise its inherent jurisdiction will be tested if parties seek assistance from the Courts in circumstances other than the limited ones allowed for by the Act. This truly is a new era for arbitration in Ireland and the relationship between arbitration and the Courts has fundamentally changed.
When one reads the 2010 Act and the UNCITRAL Model Law which now applies to all arbitrations in Ireland (with the exception of employment and some consumer disputes) one can not fail to be struck by the number of provisions which apply unless otherwise agreed by the parties. It is essential therefore to be aware of the provisions where the parties can come to an agreement and to be aware of what the default position is. In many cases the absence of agreement is a result of absence of any consideration of a particular aspect of the process and the various aspects will now more than ever be relevant considerations for parties agreeing to adopt arbitration whether at contract stage or once a dispute has arisen. It might be considered that once a dispute has arisen the parties might be more focussed on the various elements of the process and negotiation may be more likely to take place. For example, one radical change is in the ability of the parties to come to an agreement in respect of the costs of the arbitration.
Arbitration Law and Practice in Ireland to Date
In Ireland, separate legislation applied to domestic and international arbitrations. Before the 2010 Act, domestic arbitrations were governed by the Arbitration Act 1954 (the "1954 Act") as amended by the Arbitration Act 1980 (the "1980 Act") while international arbitrations were governed by the Arbitration (International Commercial) Act 1998 (the "1998 Act"). The 1998 Act adopted the UNCITRAL Model Law (as adopted by the United Nations Commission on International Trade Law on 21 June 1985) ("the Model Law").
The New Regime Under the 2010 Act.
The 2010 Act applies the Model Law to all arbitrations in Ireland. Where there is a difference between the 2010 Act and the Model Law, the 2010 Act prevails. The main provisions of the 2010 Act (which does not apply to employment arbitrations or arbitrations under the Industrial Relations Acts) and the Model Law are set out below. This summary does not purport to be a definitive description of the 2010 Act or the Model Law and the legislation should always be consulted and advice taken in appropriate cases.
Arbitrations are described as either "international commercial arbitrations" or "non international commercial arbitrations".
Commencement of Arbitral Proceedings
An arbitration commences either on the date the parties agree it commences on or on the date when a written request to refer the matter to arbitration is received. The default number of arbitrators is one.
The High Court
Unless otherwise agreed, the High Court has its usual powers as regards interim measures and the taking of evidence but it should not order security for costs or discovery unless the parties agree. There is no appeal from the High Court's decision on any matter including a stay application, an application to set aside or an application for recognition or enforcement.
Powers of an Arbitrator
Unless the parties agree otherwise an arbitrator can:
require evidence on oath and may administer the oath, award interest either simple or compound award security for costs, applying...