Charndell
Dispute management services

                                                                         Charndell Associates Co., Ltd.
                                                                     4/F, Unit 1402, GP House, 
                                                                                      572 Soi Ladprao 112. Wangthonglang,
                                                                   Bangkok 10310, Thailand
                                                                         Phone: (66-2) 514-9170 to 1
                                                              Fax: (66-2) 514-9172
                                                                       E-mail: info@charndell.com
 

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Arbitration

As an alternative to litigation parties to disputes are turning to arbitration and other forms of ADR to resolve their disputes. Arbitration is not a new practice, but has become increasingly more well known in recent times as a result of greater publicity and public awareness of arbitration.

Some of the potential advantages and disadvantages of arbitration are:

Advantages:

• Arbitration should be a more speedy and therefore cheaper process than litigation.

• Technical matters can be referred to a person with expert knowledge in the field of the dispute so the matter can be quickly and easily understood.

• The proceedings and results of arbitration are private and not in the public domain.

• The formalities can be adjusted to suit the circumstances.

• The venue and date of hearings can be adjusted to suit the parties, rather than being fixed by the court.

• An arbitration award is more easily enforced than a court award in foreign jurisdictions.

Disadvantages:

• Judges are normally more experienced in acting in a judicial capacity and are more familiar with the details of the law.

• The right of appeal is limited (this is considered by some to be an advantage).

• There are no means of joining third parties, unless the parties consent.

• Arbitration incurs expenses for the venue of the hearing and the cost of the arbitrator(s) whereas the cost of using the court system is minimal.

The Arbitration Process:

Arbitration is a consensual form of dispute resolution allowing the parties to determine how they wish the proceedings to be conducted, subject to any limitations the rules and laws governing the arbitration may impose on the parties, e.g. public interest etc.

The procedures for an arbitration would normally consist of a notice to submit a dispute to arbitration followed by the appointment of the arbitrator(s) to sit on the tribunal. Normally the number of arbitrators on a tribunal to determine the disputes would be one or three. Following the appointment of the tribunal a preliminary meeting is held to determine the issues and decide the procedures to be adopted. This is a very important part of the proceedings as it sets the stage as to how the arbitration will be managed.

The record of the preliminary meeting is made by the tribunal and issued to the parties in the form of directions that the parties are required to comply with. The parties would then normally submit their detailed statements of claim, statement of defence and supporting documents. Unless the arbitration is a ‘documents only’ case a hearing then follows at which the parties are able to orally present their case. Based on the submissions of the parties and the results of the hearing the tribunal will then make its award. At this time the tribunal becomes ‘ex-officio’ and no longer has any jurisdiction over the dispute.

Once an award has been made the parties are required to comply with the terms of the award unless there are grounds for appeal. Under most arbitration rules there are time limits within which appeal must be made. Should a party default and not comply with the award the other party can normally seek enforcement of the award through the courts by either summary judgment or an action on the award.

Management of the Arbitration:

The effectiveness of arbitration is depends largely on the tribunal’s ability to manage the dispute. The tribunal is provided with a number of powers manage the arbitration, some of these are provided by the arbitration agreement with others being provided by the law chosen to govern the arbitration, the specified arbitration rules or the parties themselves (by mutual consent). While these powers can be increased they can also be limited by the same methods, an example of this would be where the applicable rules state that both parties shall bear their own costs of the arbitration.

Reference to Arbitration:

There are a number of ways in which a dispute can be referred to arbitration. These normally consist of an agreement contained within a contract, by an ‘ad-hoc’ agreement made by the parties once a dispute has arisen or by a statutory instrument. It is vital that the arbitration agreement within a contract is effective for the purpose of referring the dispute to arbitration, failing which the parties cannot be obliged to submit their dispute to arbitration or request a stay of legal proceedings. Many arbitration agreements contained within contracts are either ineffective or are sufficiently unclear to provide one of the parties with the opportunity of delaying the arbitration proceedings.

Arbitration is a complex issue that is difficult to briefly summarize due to its dependence on a variety of factors and circumstances. Should more information on arbitration and ADR be required we are willing to meet and discuss these matters with interested parties.