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THE BILL
16. The Bill proposed in this consultation paper has drawn from the available models of the UNCITRAL Model Law, the UK Arbitration Act 1996 and the work done in the draft Bill developed in 2002. Some issues were not however finalised in that draft Bill.
Structure of the Bill
17. The Bill is designed to be useful self-standing legislation for the use of those involved in an arbitration which will give answers to most, if not all, of the questions likely to arise as parties and arbitrators move through the arbitration process. Schedule 1 to the Bill lays out a standard set or code of clauses ("the Scottish Arbitration Rules") that can be adopted wholesale by parties and used by their arbitrator. That Schedule contains a number of mandatory rules which cannot be departed from even by agreement of the parties, but the majority of the Rules are default rules which will apply, and be implied into parties arbitration agreements, in the absence of any inconsistent agreement between the parties.
18. The Bill provides a model law for Scotland which is in line with generally accepted international standards and aims to capture the best of international practice.
19. In reading the Bill and the Scottish Arbitration Rules, it should be kept in mind that for voluntary arbitrations, unlike arbitration under specific statutes, the parties have agreed to go to arbitration. Such arbitrations are principally private contractual arrangements. Any Scottish Arbitration Rule which is not mandatory will therefore not apply to the extent it is disapplied by or inconsistent with any agreement either before or after the dispute arises between the parties (section 8 of the Bill).
20. It is also of course important to bear in mind which Rules are mandatory and which are not. Section 7 of the Bill lists the Rules that are mandatory; the rest are not.
Terminology
21. In Scots law, while there is a technical difference between the term "arbiter" more commonly used, and the term "arbitrator" 2, "arbitrator" is employed in the Bill to follow modern international arbitral practice.
Objectives of the Bill
22. The primary objectives of the Bill are that it:
- Clarifies and consolidates Scottish arbitration law, filling in gaps where these exist;
- Provides a statutory framework for arbitrations which will operate in the absence of agreement to the contrary;
- Ensures fairness and impartiality in the process; and
- Minimises expense and ensures that the process is efficient.
23. The Scots law approach to arbitration taken in the Bill aims to be consistent with that in the rest of the UK where that is appropriate.
24. The Bill sets out some founding principles to be applied by parties and arbitrators in using the provisions of the Bill, and by the court in any case in which it is called on to intervene or to interpret the legislation. These principles will assist in achieving the policy objectives and largely mirror those set out in the Arbitration Act 1996. The courts in England, Wales and Northern Ireland have been able to refer to the general principles in the 1996 Act in cases which have arisen since its passing. The Bill follows similar principles in Scotland and the courts here may also be able to make use of the case law that has already been built up under the 1996 Act.
Summary of provisions in the Bill
25. A broad outline of the contents of the Bill is as follows:
- rules on the scope of the Bill and to which arbitration agreements it will apply
- when the optional and mandatory rules in the Bill will apply
- power to adapt specific statutory arbitration procedures to reflect the Bill
- provision on the recognition and enforcement of New York Convention foreign arbitral awards
- provision on prescription and limitation and other miscellaneous provisions
- detailed rules to regulate arbitration (mostly optional, some compulsory), including-
- commencement, appointment and challenge procedures
- conduct of proceedings and the powers and duties of the arbitrator
- duties of the parties
- effect and enforcement of arbitral awards
- intervention and control by the court
- expenses
- miscellaneous
Domestic and international arbitration
26. The intention is that in principle the same rules will apply to domestic, cross-border (with other parts of the UK) and international arbitrations, where the Scottish court have jurisdiction over an arbitration whose juridical seat or place is in Scotland. Accordingly, the separate treatment in Scotland of international commercial arbitrations under the UNCITRAL Model Law will be replaced by a single code but informed by the UNCITRAL Model Law principles.
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