Arbitration-part 3
As we saw last week there are strong public policy grounds upon which the courts hold parties to agreements to go to arbitration. That means that it is then for the arbitrator to determine the dispute, exercising the powers given whether under the agreement or the Arbitration Act 1996 generally ("the Act"), (some of the provisions under the act are mandatory, some can be varied by the agreement) and subject to following the general duties specified in section 33 of the Act. Those include a duty to act fairly and impartially, to give each party a reasonable opportunity of putting its own case and deal with the opponent's case, and adopting procedures suitable to the circumstances of the case. The arbitrator is given a very wide discretion as regards procedure and evidential matters under section 34. The whole point is that an arbitration is not supposed to be necessarily the same as a court hearing, unless the arbitrator decides that that is appropriate. Therefore the arbitrator is given great control as regards what questions can or should be put, whether the evidence is to be given orally or in writing, and whether for example the strict rules of evidence or other rules should be applied. Subject to the general duty to act fairly in accordance with section 33 of the Act, the idea is that the arbitrator is the one best placed to decide how matter should proceed.
Although the courts enforce arbitration, the court will exercise a number of powers to support arbitration and these are set out in section 44 of the Act. These powers can include granting an injunction (an order forcing the parties to do something or not to do something) or various orders regarding preserving evidence etc. The aim is that the courts are supplementing the arbitration, not overriding it. As it is put in section 44 (5) of the Act, the court is only to act to the extent that the arbitrator has no power to do so or is unable for the time being to act effectively. Therefore the aim is to exercise powers which the arbitrator either does not have or for any particular reason is unable to use, still with a view to supporting the arbitration process
As part of this public policy, the grounds upon which an arbitration can be appealed to the court and hence overturned are very limited. One basis is an appeal on a point of law (section 69 of the Act). However the parties can agree to dispense with appeals on a point of law, and if the parties have agreed to dispense with reasons for the award that will be considered to be an agreement to exclude the section 69 jurisdiction. There are various limitations in any event on allowing such an appeal to proceed, and unless there is agreement the court has to give leave. It will only do that if certain conditions are satisfied, including that the decision is obviously wrong or the question is one of general public importance. It also has to be satisfied that the arbitration decision will substantially affect the rights of one of the parties and that although the parties have agreed to resolve matters by arbitration, in all the circumstances it is just and proper for the court to determine the question of law.
Other challenges can be on the basis of jurisdiction under section 67 (for example was this something that the arbitrator was able to determine in the first place under the arbitration) and serious irregularity under section 68. That can include a failure by the arbitrator to follow the duties set out in section 33 above, irregularity in the conduct of the proceedings, the award being obtained by fraud and various other possibilities. These are designed to allow the court to review matters only in extreme cases.
Thus although there are occasions when the court can interfere with an arbitration decision, the aim is that this will only be done if something has gone seriously wrong. Otherwise the public policy is that where parties have agreed to dispose of matters by arbitration, that should be that.