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Arbitration - When to Arbitrate

Tuesday, 10 July 2012

Arbitration is arguably the most important form of alternative dispute resolution and it has made its way into a wide variety of commercial spheres. Parties from all over the world have their contract disputes referred to arbitration in England and Wales in relation to intellectual property disputes, maritime disputes, competition and many other issues.


The provisions of the Arbitration Act 1996 state as follows:

a) The object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense;

b) The parties should be free to agree how their disputes are resolved, subject only to the public interest;

c) the court should not intervene except as provided by the Act.

It can be seen that the main emphasis is to enable resolution of disputes by means of consensual agreement.

The Arbitration Agreement

For arbitration to take place the parties must have entered into an agreement in which they agree to submit future disputes to the arbitration procedure. The agreement must be in writing, for example there may be an arbitration clause in a contract or there may be a separate arbitration agreement. Where an arbitration agreement is ente red into there are certain mandatory and non-mandatory provisions that apply under the Act.

The mandatory provisions cannot be disapplied by the parties and relate to:

  • the staying of legal proceedings
  • the power of the court to extend time limits
  • the power of the court to remove an arbitrator
  • the general duty of the arbitrator to act fairly and impartially
  • the power to withhold an award for non-payment
  • enforcement of the award
  • challenging the award

The non-mandatory provisions operate in the absence of an agreement to the contrary but may be varied by agreement between the parties.

Commencing Proceedings

In line with the consensual nature of Arbitration, the parties are free to agree when proceedings are to be regarded as commenced. Alternatively, where the arbitration agreement designates a particular arbitrator, arbitration may be started by one party serving on another a notice requiring a dispute to be referred to arbitration.

If a claim has been brought against a party that has signed up to an arbitration agreement, that party may apply to the court for a stay of proceedings in relation to the subject matter of that claim.

Rollingsons has lawyers experienced in advising parties to disputes; if you would like more information please contact James Crighton ( via e-mail or by telephone on 0207 611 4848.