Parties to a contract which have the presence of mind to anticipate disputes, often provide for those disputes to be resolved by arbitration with nothing or little more. Typically, these would be short-form arbitration clauses, the longer arbitration agreements tending to provide for basic procedural rules for the arbitration.
Arbitration is expected to comply with the rules of natural justice unless the parties decide otherwise. Frequently, parties to a dispute that needs to be resolved by arbitration would prefer to select an arbitrator expert in the subject matter of the dispute; such as an engineer for a construction dispute.
Arbitration is, in theory, to be simpler than the traditional court system but basic rules of procedure are of great assistance to non-lawyer arbitrators or even to lawyers who are appointed arbitrators, in this latter case, to ensure that the proceedings do not become bogged down in legalism.
From the United Nations down to local government-sponsored arbitration agencies, there are a whole host of different arbitration rules published in almost every jurisdiction in the world, for those negotiating an arbitration agreement to select from.
In most jurisdictions, where the arbitration clause is silent as to the arbitration rules, an arbitration act generally sets out a set of default terms.
For example, in British Columbia, the default set of arbitration rules are those of a small, private local agency:
"Unless the parties to an arbitration otherwise agree, the rules of the British Columbia International Commercial Arbitration Centre for the conduct of domestic commercial arbitration apply to that arbitration."
Other jurisdictions and parties to arbitration clauses defer to the UNCITRAL Arbitration Rules or even the rules of the American Arbitration Association.
A typical set of arbitration rules will govern:
- the form of a notice of arbitration and of the initiating documents of both the complainant and the defendant;
- the number and selection of arbitrators and the challenge to any nominated arbitrator;
- basic natural justice statements such as the right to be heard;
- conduct of arbitration such as but not limited to, the receipt of evidence including the production of documents and whether or not a hearing will be held;
- where a hearing will be held;
- the language of the arbitration;
- provision and criteria for requiring a party to provide security for the arbitration;
- the use of experts; and
- the form of the award.
REFERENCES:
- Commercial Arbitration Act, revised Statutes of British Columbia, Chapter 55
- Duhaime, Lloyd, ADR - A Glossary of Terms
- UNCITRAL Arbitration Rules (1976) published at www.uncitral.org