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ARBITRATION IN SCOTLAND

Image:scotland.jpg By Rob Wilson and Alan Cole,
CMS Cameron McKenna LLP - Edinburgh.



OVERVIEW

Private arbitration in Scotland can be traced back to the twelfth century; but in spite of this long tradition of non-judicial dispute resolution, there has been little statutory codification of arbitration in Scotland. This means that the rules of arbitration in Scotland are not easily discovered.

Even after courts of law had been established in Scotland, recourse to arbitration continued to be frequent, particularly in mercantile matters. Arbitration also remained the preferred method of resolving disputes in cases where the questions at issue were best suited for determination by a person of skill or experience, rather than a judge, to avoid the delay, expense and publicity of court proceedings.

For a period of time in the course of the development of arbitration in Scotland, an arbitral award was subject to review on its merits at the discretion of the court. This deficiency was eliminated as early as 1695 by the 25th Act of the Articles of Regulation, which renewed arbitration’s “natural force and vigour” and secured an element of finality to the arbitrator’s award.

The law of arbitration in Scotland was considered and reform proposed by way of a draft Arbitration Bill that was circulated in January 1997 by the Scottish Courts Administration, following recommendations made by the Dervaird Committee. However, the Bill was not progressed and in 1999 the Scottish Council for International Arbitration (“SCIA”) and the Chartered Institute of Arbitrators (Scottish Branch) (“CIArb (SB)”) produced the Scottish Arbitration Code. The Code seeks to set out the general framework of arbitration and the rules under which arbitration in Scotland should be conducted. While the Code has been widely welcomed, it is only a voluntary code and its adoption requires agreement by all parties to the arbitration.

A second draft of the Bill was produced in December 2002 by the Arbitration (Scotland) Bill Working Group, in association with the SCIA and CIArb (SB). The Bill sought to provide a comprehensive statutory framework for arbitration with an emphasis on the expediency of arbitral proceedings. However, once again the Bill was not progressed.

The Scottish Government has since prepared a further Draft Bill, drawing on the UNCITRAL Model Law, the Arbitration Act 1996 and the Draft Bill of 2002. It was put out for consultation in June 2008 and its stated objectives are:

  • to clarify and consolidate Scottish arbitration law (filling in gaps where they exist);
  • to provide a statutory framework for arbitrations where none has been agreed between parties;
  • to ensure fairness and impartiality in the arbitral process; and
  • to minimise expense and ensure that the arbitral process is efficient.

In the meantime, parties in Scotland are currently free to choose the procedures and rules that will govern their arbitration. Importantly, the Model Law on International Commercial Arbitration promulgated by the United Nations Commission on International Trade Law (“the UNCITRAL Model Law”) has the force of law in Scotland, through the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990, (“the 1990 Act”). The UNCITRAL Model Law is set out in Schedule 7 to the 1990 Act in essentially its original form. Parties to international arbitration proceedings in Scotland are therefore at liberty to adopt the UNCITRAL Model Law. In accordance with Schedule 7, an arbitration is considered to be international if:

  • the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their places of business in different States;
  • the seat of arbitration specified in the arbitration agreement is situated outside the State in which the parties have their places of business; or
  • the place where a substantial part of the obligations of the commercial relationship is to be performed, or the place with which the subject matter of the dispute is most closely connected is situated outside the State in which the parties have their places of business.

The preliminary working group documents of the United Nations Commission on International Trade Law may be considered in ascertaining the meaning or effect of any provision of the UNCITRAL Model Law, as set out in Schedule 7 to the 1990 Act.

Of particular importance is the fact that the UNCITRAL Model Law applies to international commercial arbitrations in Scotland, subject to any agreement in force between the United Kingdom and any other State or States, which applies in Scotland.

However, the UNCITRAL Model Law forms only a small part of the law of arbitration in Scotland, which is instead based almost entirely on the common law. Over time the common law has only been marginally modified by statute, for example:

  • The 25th Act of the Articles of Regulation of 1695 – regulates the grounds for reduction of an arbitrator’s decision;
  • Arbitration (Scotland) Act 1894 – expands the common law rules governing the naming and selection of arbitrators and, in particular, states that a reference to arbitration is not to be ineffective by reason only that an arbitrator is not named. This Act opened the door for the common practice of naming an arbitrator by reference to a particular society, group or firm (for example, the President for the time being of the Chartered Institute of Surveyors (Scottish Branch)), and also gave power to the court to nominate an arbitrator should the parties fail to reach agreement;
  • Arbitration Act 1950 – gives effect to the Geneva Convention;
  • Administration of Justice (Scotland) Act 1972 (Section 3) – enables parties to an arbitration to request an arbitrator to state a case on a point of law for determination by the Court of Session. Therefore, should the parties decide that the arbitrator requires guidance on a legal (as opposed to a factual) issue, they can require that the arbitrator asks the court for an authoritative decision on that point only. The court will not decide the outcome of the arbitration itself. It is submitted that Section 3 should be repealed, as it was only brought into existence to provide a provision similar to that in place in England at the time.

The provision for stating a case has since been repealed in England, and it seems incongruous that it remains in force in Scotland as a potential bar to speedy arbitrations;

  • Arbitration Act 1975 – gives effect to the 1958 New York Convention. The court must sist (i.e. stay) proceedings where there is an arbitration agreement in place between the subjects of different countries in respect of the matter in dispute;
  • Law Reform Miscellaneous Provisions (Scotland) Act 1990 (Section 66 and Schedule 7) – subsumes the UNCITRAL Model Law into the law of Scotland; and
  • Sections 89, 90 and 91 of the Arbitration Act 1996 – (which extend the Unfair Terms in Consumer Contracts Regulations 1994 to arbitration agreements) also apply to Scotland.


THE ARBITRATION AGREEMENT

Principles
The law on arbitration is based on the fundamental principles of Scots Law in relation to the formation of contracts and natural justice.

Anyone who has legal capacity to bind himself to a contract can enter into an arbitration agreement to resolve disputes relating to his or her affairs in Scotland. The purpose of an arbitration agreement is to exclude the courts from the resolution of the dispute.

Formal requirements
Where arbitration relates to an interest in land, an arbitration agreement must be in writing to be valid in Scotland.

A reference to arbitration can be in one of two forms: either by an ad hoc submission of a particular dispute to arbitration, or by an agreement to submit all future disputes to arbitration.

The principle of separability applies in Scotland: under the Model Law, an arbitration clause contained in a contract which is principally drafted for another purpose is viewed separately from the remainder of the contract. If the contract is terminated by, for example, a material breach or frustration resulting in termination, the arbitration clause is likely to subsist unless the tribunal (or the courts upon review of the tribunal’s decision) takes the view that the factors resulting in the termination of the contract should also nullify the arbitration clause.

Mandatory/non-mandatory provisions
The parties are free to decide upon the terms of the arbitration wherever the provisions of the 1990 Act are non-mandatory (i.e. wherever such provisions are stated to apply ‘unless otherwise agreed by the parties’). The parties may agree bespoke rules or may agree to apply a standard set of institutional rules such as the Scottish Arbitration Code. Their instructions must be included in the submission itself, particularly in relation to interest, damages and expenses. The main exception is that the parties must expressly exclude the power under the Administration of Justice (Scotland) Act 1972 Section 3 to state a case to the Court of Session for it not to apply.

Arbitrability
There is little case law on arbitrability in Scots Law. However, generally speaking, the following matters may not be arbitrated: criminal matters, matters pertaining to public interest and status, and matters that are required to be determined according to specific regulatory regimes. In principle, however, if a matter can be litigated before the civil courts, then it can also be referred to arbitration. The Model Law does not affect the arbitrability of a dispute in Scotland or make any dispute arbitrable that would not otherwise be arbitrable.

COMPOSITION OF THE ARBITRAL TRIBUNAL

The constitution of the arbitral tribunal
The parties can agree to choose one or more arbitrators, and may specify the identities of the arbitrators.
Provided that there is no direct interest or bias, anyone may act as an arbitrator, and a waiver from the parties may even cure the problem of an arbitrator’s interest. A reference may be made to a society consisting of a changing body of members or to a firm, but care must be taken to avoid terms which are too general to effect an appointment. A judge may continue to act as an arbitrator if the proceedings were commenced before his appointment to the bench.

Oversmen
If a tribunal of two is appointed, it is possible to nominate an oversman, who, in the event of two arbitrators failing to agree, will take over the determination of the dispute.

If the arbitration agreement does not expressly provide for, or expressly prohibit, the appointment of an oversman, Section 4 of the Arbitration (Scotland) Act 1894 provides that the arbitrators may appoint an oversman if they fail to reach a consensus on the arbitral award.

Where the arbitrators have made a partial award, only the remainder of the dispute not covered by the partial award must be wholly devolved to the oversman.

Where the arbitrators return the dispute to the oversman they become functus officio (i.e. they are discharged from the duties of office), in relation to the whole or part of the divested submission.

The challenge of arbitrators
Bias:
If the arbitrator has a substantial interest in the outcome of a dispute, and this was not known to the parties when the arbitrator was selected, he will be disqualified, unless the interest was disclosed to the parties and acknowledged and the parties agreed to the arbitrator’s acting prior to the arbitrator accepting his appointment.

An arbitrator may be disqualified for showing bias in favour of one of the parties.

The appointment of substitute arbitrators
It may be necessary to appoint a substitute arbitrator should an arbitrator decline the appointment or be unable to act.

In such a case, the parties are free to agree on the appointment of a new arbitrator, failing which the court has the power to make an appointment under the Arbitration (Scotland) Act 1894 Sections 2 and 3.

Arbitrators’ fees and expenses
The arbitrator is entitled to a reasonable fee, which should ideally be stipulated by the arbitrator upon acceptance of his office.

The arbitrator can validly withhold the award until he receives payment of his fees.

The parties’ obligation to pay the arbitrator’s fee is joint and several, unless the arbitrator is given power in the submission to determine that one of the parties should be solely liable for the whole or part of the fee.

The arbitrator’s clerk and any expert witnesses are also entitled to a reasonable fee. Again, the parties are jointly and severally liable. The award need not contain any express directions to this effect.

Arbitrators’ immunity
Negligence:
It is thought that an arbitrator has immunity against negligence claims, but this has not been tested before the courts in Scotland.

Corruption:
If an award is successfully appealed on the grounds of corruption of the arbitrator, he will be liable to the parties for damages. An arbitrator will be deprived of the immunity normally available to him as a person carrying out a judicial function where he is found to have acted in bad faith.

JURISDICTION OF ARBITRAL TRIBUNAL

Competence to rule on its own jurisdiction
An arbitral tribunal has jurisdiction to rule upon its own jurisdiction (the principle of “Kompetenz-Kompetenz”). The arbitrator can make a ruling on his jurisdiction to deal with the dispute.

Under common law, the decision of the arbitral tribunal regarding its jurisdiction may be challenged in court at the behest of one of the parties, although the courts are generally reluctant to interfere.

Power to order interim measures
Under the Model Law, the arbitral tribunal has the power to order “interim measures of protection” in relation to a party if requested to do so. The arbitral tribunal can grant such interim measures as it considers necessary to protect the subject matter of the dispute, and may require the party seeking interim measures to provide security. This power to grant interim measures may be excluded by the parties’ agreement, or they may agree to allow the arbitrator to act of his own volition in awarding interim measures. Interim measures may only be directed at a party to the arbitration and not at any third party. The Model Law does not define “interim measures of protection”, however, examples include measures for the conservation of goods, the use of machinery or the continuation of works in order to prevent irreparable harm, the securing of evidence and the protection of trade secrets.

CONDUCT OF ARBITRAL PROCEEDINGS

Commencement of arbitration
Arbitration is commenced by notice to the arbitrator(s), who should then accept office and appoint a clerk and oversman, if necessary. If one or more decline to accept the office, the parties may agree a new arbitrator or arbitrators, failing which the court can make an appointment.

The arbitrator then invites the parties to state specifically the matters in dispute between them.

General procedural principles
Equity and natural justice are the overriding principles governing arbitration procedures in Scotland.

The arbitrator has a great deal of discretion in regulating the form of procedure which the parties must follow and his decision on incidental procedural points cannot be challenged except on grounds of bias.

Bell, the Scottish Institutional Writer, summarised the procedure as follows: “Now, it is an evident pre-requisite to the discharge of this judicial function, that an arbiter shall adequately inform his own mind regarding the nature and merits of the subject in dispute. This is the indispensable pre-requisite to the faithful performance of the judicial function, whether by a public or a private judge. And, in both cases alike, the necessary means of informing any judge’s mind may be regarded as mainly resolving into three great classes, viz.:

  • the obtaining of a clear and distinct statement from the parties, of the precise question which he has got to decide, and of their mutual averments and admissions relative thereto;
  • the ascertainment of the truth of disputed facts, by subjecting them to the test of a proof; and
  • the hearing of parties in support of their respective views and interests.”

Procedural powers of the tribunal
Unless the parties prescribe in the arbitration agreement that the arbitrator will conduct the proceedings in a particular way, the arbitrator is free to adopt his own approach to procedure provided that he observes the rules of natural justice.

At common law, certain powers of the arbitrator are implied – those that are “manifestly essential to the execution of the office of arbitrator.”

The arbitrator is basically a privately-appointed judge, and a number of the implied powers are those necessary for the proper exercise of any judicial function, for example:

  • appointing a clerk;
  • requiring the parties to specify the nature of the dispute;
  • receiving evidence from the parties concerning the dispute;
  • hearing the parties’ submissions about that evidence and any point of law; and
  • testing issues of fact according to a standard of proof.

The arbitrator may rely on his own specialist knowledge provided the parties are aware of such reliance and have an opportunity to make submissions on the relevant points.

Submissions
Submissions are different from pleadings in Scottish arbitration. There are three main types of submissions: (1) specific; (2) general; and (3) mixed. Specific submissions relate to a specific issue or issues and the arbitrator’s determination must be limited to such issues. A general submission will often arise from an arbitration clause and/or agreement and may cover all matters in dispute arising between the parties. General submissions are also known as ancillary submissions. A mixed submission generally takes the form of a general submission, which then specifies matters for the arbitrator’s consideration.

The submission must contain the parties’ instructions in relation to procedure and the award itself. In particular, it should grant the arbitrator the power to award interest and damages and should record any agreement the parties may have come to on how costs should be dealt with. If no express power to award damages is conferred on the arbitrator in the submission, or if damages and/or interest are not expressly provided for in the contract on which the arbitrator has been asked to adjudicate, the arbitrator will only be able to determine liability, and any assessment of damages and/or interest will need to be determined by a court. An arbitrator has an implied power to award interest, but only from the date of his award.

Place and language of arbitration
The parties are free to agree the place and language of the arbitration.

Oral hearings
Generally, the arbitrator will hear the parties before making his award at a full hearing of evidence if there are issues of fact to be resolved. An arbitrator with particular expertise in the subject matter of the arbitration may resolve issues of fact without a hearing of evidence.

The arbitrator may not hear one party and refuse to hear the other unless he is to decide wholly in the latter’s favour.

The parties may waive their right to be heard, either in the arbitration agreement itself, or by making such a direction in the course of the arbitration, or otherwise making it clear during the arbitration by their actions (for example, by refusing to participate).

If a party defaults on procedural directions made by the arbitrator (for example, by failing to attend a hearing) then that party cannot challenge an award made in the other party’s favour on grounds of bias.

Evidence
The arbitrator has no power to force either a witness to attend and give evidence or a “haver” (i.e. a third party who possesses documentary evidence that he holds on behalf of a party to the arbitration) to produce documents. If necessary, an application can be made to the Court of Session or the relevant Sheriff Court to secure the attendance of a witness or haver.

MAKING OF THE AWARD AND TERMINATION OF PROCEEDINGS

Choice of law
Where the parties have not chosen a system of law under which to determine the dispute, the tribunal must apply the legal system that is determined by the rules on conflict of laws that it considers applicable. In Scotland, the conflict of laws rules are governed by Article 4 of the E.C. Convention on the Law Applicable to Contactual Obligations, and that Article indicates that the governing law is that which is most closely connected with the contract.

Procedural law
In the absence of an express choice of the parties, the lex fori (law of the forum) will usually apply in relation to procedural issues. Thus, Scots Law will normally apply to arbitrations taking place in Scotland.

The law governing the substance of the dispute and the procedural law do not have to be within the same jurisdiction.

Remedies
The arbitrator can determine liability by default, but (as discussed above, under the Section ‘Submissions’) has no power to assess and award damages unless that is expressly provided for in the arbitration submission.

Interest
The arbitrator has an implied power to award interest to run from the date of any award of a financial nature, but not to award interest from an earlier date unless this is expressly provided for in the arbitration agreement.

If an agreement between the parties provides for the payment of interest, the arbitrator has no implied power to override it by awarding interest on different terms.

Decisionmaking by the tribunal
If the arbitral tribunal consists of an even number of arbitrators and a unanimous decision cannot be reached, the arbitrators may appoint an oversman to make a ruling on the particular issue.

Form, content and effect of the award
The award must be in writing and signed. Where there is more than one arbitrator, the award must be signed by all arbitrators.

Where there is a formal submission to arbitration the award must be in a similar form, and should begin with a narrative clause setting out the name(s) and designation(s) of the arbitrator(s) and the details of the submission. The award should then outline the procedure, an adjudication clause containing the decision, and any award of expenses and directions for the implementation of the award, and finally a testing clause (i.e. a formal execution clause).

It is not necessary for the arbitrator to give reasons for his decision in the final award, although a side note setting out the reasons is useful.

The arbitrator cannot order the enforcement of the award. A court may be asked to grant a decree in terms of the arbitrator’s award, or the award may contain a clause stating that the parties consent to its registration in the Books of Council and Session or the Sheriff Court Books for preservation and execution. This will render the award enforceable.

An award cannot be appealed on its merits or on a point of law in the courts.

Interim and partial awards
The arbitrator has the power to make an interim award if the parties have expressly provided for this in the arbitration agreement.

The interim award subsists for temporary purposes until it is recalled or replaced by another interim award or by the final award, which can be entirely different from the interim award.

The power to issue partial awards must be expressly conferred upon the arbitrator in the arbitration agreement.

A partial award is a final determination on a particular issue of the submission and is final and binding with regard to that issue.

Settlement
In so far as the jurisdictional basis for arbitration is the contract between the parties, the parties are free to agree on the termination of the arbitral proceedings and request the arbitrator to record a settlement in lieu of an award.

Costs
The arbitrator has an implied power to apportion the expenses (costs) of the proceedings between the parties, including his own fees and the expenses of conducting the arbitration. This discretion may be limited by agreement between the parties. Interim expenses may be awarded before the final determination of the arbitration.

The award of expenses should provide a clear formula for the determination and calculation or be fixed, so that any action for recovery will not be impeded.

Correction and interpretation of the award
A final award has the effect of rendering the arbitrator functus officio and thus unable to amend the award or to revise any point made in that award.

It is common practice for the arbitrator to provide a draft of his award to the parties for examination and comment before the award is issued, so that any omissions, misconceptions or ambiguities can be identified and, subject to the limits of the arbitrator’s overall jurisdiction, dealt with before the award is issued. This may also prompt a party to request an arbitrator to state a case (i.e. raise a legal point for determination) to the Court of Session, since a stated case cannot be referred after the award is issued.

The parties can expressly provide in the arbitration agreement that the arbitrator is bound to submit his award for the parties’ preliminary consideration. In the absence of such a stipulation, the arbitrator is under no duty to do so.

THE ROLE OF THE COURTS

The jurisdiction of the courts
It has long been considered a strength of arbitration in Scotland that an arbitration agreement effectively and conclusively replaces the jurisdiction of the court. However, case law has undermined this proposition to some extent. While the civil courts have an inherent jurisdiction to adjudicate upon commercial disputes, and parties to a commercial transaction have an inherent right to take any dispute to litigation, parties are also free to agree to submit the dispute to arbitration and to agree upon all aspects of the conduct of arbitration.

Where a valid agreement to arbitrate exists, the court has no jurisdiction to hear the case until the arbitration has been completed, unless the court is satisfied that the arbitration agreement is void or does not apply to the issue under dispute.

The court must sist (i.e. stay) a case pending a reference to arbitration. Upon completion of the arbitration, the parties may have the sisted case dismissed by the court or seek a judgment from the court in the same terms as the arbitrator’s award.

The court will not sist proceedings in favour of arbitration if the defender is personally barred by their actions from insisting upon the arbitration clause. For instance, the defender may be barred where he fails to enter a preliminary plea of no jurisdiction, or, having stated such a plea, he fails to make submissions in this regard while the litigation continues and generally acts in a manner inconsistent with an intention to exercise the right to refer the dispute to arbitration.

If litigation is commenced after the arbitration has taken place, a party to the original arbitration may enter a plea of res judicata. Any issues falling outside the scope of the arbitrator’s remit can be litigated.

The Administration of Justice (Scotland) Act 1972 Section 3 allows the arbitrator or oversman to state a case to the Court of Session on a point of law during the arbitration. This Section applies only if the parties have not expressly agreed otherwise in the arbitration submission.

A party can request that the arbitrator apply on legal questions proposed by the party. The arbitrator can refuse, but the party then has the power to ask the Court of Session to order that the arbitrator states a case for the court’s opinion.

The opinion of the court on a stated case is not open to appeal and the arbitrator is obliged to follow that opinion in making the award.

The opinion of the Court of Session may be sought at any time during the arbitration process prior to the issue of the final award, since at that point the arbitrator is functus officio and has no jurisdiction to state a case.

Preliminary rulings on points of jurisdiction
The arbitrator can state a case to the court for an opinion on a point of jurisdiction, but he is under no duty to do so.

One of the parties may refuse to accept the arbitrator’s decision on jurisdiction and challenge the arbitrator’s finding in court after an award is made.

Interim protective measures
The court has jurisdiction to grant or refuse orders to facilitate the conduct of the arbitration proceedings and to preserve the interests of the parties.

Where the arbitrator has been requested to exercise powers that he does not possess, the court may intervene by granting an interdict (i.e. an injunction) to prevent the arbitrator taking this action.

Obtaining evidence and other court assistance
If there is civil litigation in the Court of Session or the Sheriff Court, which has been suspended until the completion of arbitration, an application can nonetheless be made in those proceedings for orders allowing (a) preservation of documents or property, or (b) recovery of evidence. Otherwise such orders can be sought by separate application to the Court of Session or the Sheriff Court.

CHALLENGING THE AWARD BEFORE THE COURTS

The arbitration award is not open to review or appeal. However it may be reduced, set aside or suspended; and its enforcement may be challenged.

A party may apply to the court to have the award set aside at common law or under the 25th Act of the Articles of Regulation 1695 by way of an action for reduction by judicial review. In urgent cases, an interim interdict (i.e. an interim injunction) can be sought from the court. The more common and effective method for setting aside an award is to petition for judicial review.

Articles of Regulation 1695
The grounds of reduction are limited to the corruption, bribery or falsehood of the arbitrator.

Common law
Any reduction at common law is based on the contractual nature of a submission to arbitration. Thus, the arbitrator must observe the conditions contained in the submission and any implied conditions.

These common law grounds for reduction are separate from those set out in the 1695 Regulations and are as follows:

  • the arbitrator exceeded his powers;
  • the award does not resolve all of the issues submitted to the arbitrators;
  • the award is ambiguous or uncertain;
  • the arbitrator has acted improperly or contrary to natural justice (e.g. by refusing to hear evidence on a dispute of fact between the parties); or
  • the award has not been sufficient.

RECOGNITION AND ENFORCEMENT OF AWARDS

An arbitrator possesses no jurisdiction to enforce his award.

If either party refuses to fulfil his obligations under the award, then two options are available:

  • if a clause consenting to registration and execution of the award is included in the submission, then the award can be enforced by summary diligence; or
  • the other party may apply to the court for a decree of enforcement. Unless there is some objection to the award, the court will grant a decree for enforcement provided that the terms of the arbitration award conform to the draft decree upon which the court is being asked to pronounce.

Where an award is made outside the United Kingdom and has become final in that jurisdiction, a party may enforce the award in Scotland pursuant to the Arbitration Act 1975 (which incorporates the New York Convention into Scots Law).

Where an award made in another part of the United Kingdom has become final in that legal jurisdiction, enforcement may be possible under the Civil Jurisdiction and Judgments Act 1982.

Enforcement of both domestic and foreign awards may be refused:

  • where it would offend public policy;
  • on the grounds of a party’s incapacity;
  • on the grounds of the invalidity of the arbitration agreement;
  • where the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the *proceedings, or was otherwise unable to present his case;
  • the award deals with a dispute not contemplated by or not falling within the terms of the submission;
  • the composition of the arbitral tribunal was not in accordance with the arbitration agreement, or failing such agreement, was not in accordance with the law of the country in which the arbitration took place;
  • the award has not yet become binding on the parties or has been set aside or suspended by a court of the country in which or under the law of which the award was made; or
  • the subject matter of the dispute is not capable of settlement by arbitration under the law of Scotland.

Enforcement of domestic awards may also be refused where that would offend EC Competition Law or a fundamental principle of EC Law.

CONCLUSION

It remains to be seen whether the draft Arbitration (Scotland) Bill will become law. Although the law of arbitration in Scotland is comprehensively dealt with under common law, it is widely recognised that a consolidating Act of Parliament is required to clarify this area of law. In particular, default provisions are required for cases where the parties cannot agree on, or do not provide for, the award of interest and damages.

CONTACT

CMS Cameron McKenna LLP
Migvie House, North Silver Street
Aberdeen AB1 1RJ, Scotland


Rob Wilson
T +44 131 220 76-72
F +44 131 220 76-70
E rob.wilson@cms-cmck.com


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