The State of Scottish Arbitration: Consultation on the Arbitration (Scotland) Bill
In November 2007 we issued a note on the proposal for a new Bill for Arbitration in Scotland. On 27 June 2008 the Scottish Government launched a Consultation Paper to begin a three month consultation period for the Arbitration (Scotland) Bill.
The Scottish Government's Approach
In order to develop domestic arbitration and attract international arbitration business, and therein exploit the economic benefit that arbitration services can provide (The Chartered Institute of Arbitrators has reported that arbitration is the fifth highest earner of "invisible" earnings in London) the Scottish Government is adopting a three-tiered strategy:
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to introduce an Arbitration Bill to modernise and codify the law in statute to bring it into line with up-to-date arbitral practices in other jurisdictions;
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to develop a self-financing dispute resolution centre to which international arbitration as well as domestic dispute resolution business might be attracted; and
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to encourage representative bodies of arbitrators to improve quality assurance in the profession.
New Bill
The primary objectives of the Bill are to:
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Reform and consolidate the law of arbitration in Scotland;
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Provide a statutory framework for arbitrations which will operate in the absence of agreement to the contrary;
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Ensure fairness and impartiality in the process; and
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Minimise expense and ensure efficiency in the process.
The Bill, as proposed in the consultation paper, has drawn on the available models of the UNCITRAL Model Law, the Arbitration Act 1996 and the work done in the draft Bill developed in 2002.
Structure of the New Bill
Broadly, and in outline, the proposed Bill covers:
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rules on the scope of the Bill and to which arbitration agreements it will apply;
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provision for when the optional and mandatory rules in the Bill will apply;
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power to adapt specific statutory arbitration procedures to reflect the Bill;
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provision on the recognition and enforcement of New York Convention on foreign arbitral awards;
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provision on prescription and limitation and other miscellaneous provisions; and
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detailed rules to regulate arbitration (mostly optional, some compulsory).
Schedule 1 to the Bill lays out a standard code of clauses ("the Scottish Arbitration Rules") that can be wholly adopted by parties and used by the arbitrator. Schedule 1 also 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.
What Next?
The consultation period ends on 19 September 2008. The Scottish Government aims to issue a report on the consultation process by the end of the year with a view to introducing the Bill as soon as the legislative programme allows.
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Sheona Campbell Solicitor Construction & Engineering Tel. +44 (0)131 777 7454 sheona.campbell@mcgrigors.com |
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