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What is Arbitration?

Arbitration is the most traditional form of private dispute resolution. Arbitration is a binding procedure. It is often "administered" by a private organization that maintains lists of available arbitrators and provide rules under which the arbitration will be conducted. Such organizations can also manage the arbitration in whole or in part. Parties often select arbitrators on the basis of substantive expertise.

Arbitration is adjudicatory, as opposed to advisory, because of the fact that the arbitrator renders a decision at the end of an arbitration hearing, and that decision is final and binding.

 

There were two stages in the award of King Solomon, as recorded in the Book of Kings. First, he said:

"The one saith, This is my son that liveth, and thy son is the dead and the other saith, Nay; but thy son is the dead, and my son is the living. And the king said, Bring me a sword."

The sword having been produced, he said: " divide the living child in two and give half to the one, and half to the other...". The second stage followed the declarations of the two mothers, one relinquishing her claim to the child, "for her bowels yearned upon her son," the other demanding that the child be divided. The king ruled finally: "Give her the living child, and in no wise slay it hse is the mother thereof." This may be trhe first recorded arbitral award, short but clearly reasoned, and quintessentially just. The modern arbitrator, howeve, is not endowed with all the powers of Solomon, though he is expected to be as wise.

More recently, McCarthy J. In the course of his judgement in Keenen v Shield Insurance Company [1988]I.R. 89 at p. 96 set the standard for judicial restraint in considering arbitral awards. He deplored "fine-combing" exercises. He declared: "Arbitration is a significant feature of modern commercial life; there is an International Institute of Arbitration and the field of international arbitration is an ever expanding one. It ill becomes the courts to show any readiness to interfere in such a process; if policy consideration points to the desirability of making an arbitration award final in every sense of the term."

As I explained in my own judgement in McCarthy v Keane and others [2005] 2 I.L.R.M. 241, parties who submit disputes to arbitration "do not have any guarantee that the arbitrator will reach the correct result." I said that: "An arbitrator may err in his interpretation of the law or of the facts, without being guilty of misconduct." Why the do parties voluntary limit their ordinary right of access to the court. I think they desire three things: expedition, certainty of result, and saving of costs. The authors demonstrate that parties may, in addition, agree to submit their dispute to determination under a system of law other than national law. In Yisroel Meir Halpern v Nochum Halpern [2004] APP L.R. 03/24, it was held that the parties had been entitled to submit to the Jewish religious tribunal, Beth Din in accordance with Halachah (Jewish Law). Confidentiality may also be one of the objectives.

Foreword by: Mr Justice Nial Fennelly, Supreme Court, Oct 7, 2008

"Arbitration Law" by Arran Dowling-Hussey and Derek Dunne, Thompson Round Hall Ltd, 2008

Attached Documents

PDF icon Arbitration Act 2010 (Arbitration_Act_2010.pdf | 193 kB)