What is Arbitration?
Arbitration is a form of dispute resolution. It is the private, determination of a dispute, by an independent third party known as the arbitrator. The disputing parties voluntarily hand over the power to decide the dispute to the arbitrator.
Arbitration is a well-established and widely used means of dispute resolution. It is one of several methods of Alternative Dispute Resolution, which provide parties to a dispute with a choice other than litigation. Parties involved in arbitration are effectively opting out of the court system and submitting their dispute for resolution by a neutral, third party.
The arbitration process is governed by the laws of the country and the parties’ arbitration agreement. Parties are free to negotiate some of the ground rules for their arbitration within the limits permitted by law. The agreed provisions are included in a written contract to arbitrate. Binding arbitration clauses can also be written into most types of contracts, specifying that dispute arising out of the contract are to be resolved by arbitration instead of litigation
- How Does Arbitration Work?
Arbitration hearings are attended by the parties involved, their attorneys, the arbitrator, and the parties’ witnesses. The procedure is very similar to that of a normal court. Each party has the opportunity to present evidence, question and cross examine witnesses, and make a closing statement. Depending on what the parties have agreed the formal rules of evidence may not necessarily apply. Arbitration can also be conducted with written submissions only in appropriate cases. The arbitrator will then render his or her decision. This decision is called the award. The award is usually final and binding although there are limited rights of review and appeal.
- What are the benefits of arbitration?
Arbitration provides some distinct advantages over the court system in many different types of disputes. It is generally faster, less costly and more informal than going to court. It also has the advantage of being more private and confidential.
Also, because arbitration is a private method of settling disputes, the parties can tailor the arbitration proceeding in almost any manner they choose. For example, the parties can agree on the number of witnesses each side will present, the amount and type of evidence that will be presented, and what issues the arbitrator’s award should address.
- Is arbitration suitable for all types of cases?
We focus primarily on commercial and construction disputes. However, the technique is also used successfully in other areas including auto insurance claims, employment and labour relations disputes and claims involving intellectual property rights.
- What is High-Low Arbitration?
In High-Low Arbitration, the parties mutually establish a range in which the award must be, that is an upper and a lower limit. This is done before the hearing. If the arbitrator’s decision is between the high and the low figures, that amount is the final award. However, if the award is above the pre-set maximum, it automatically moves down to the previously agreed upon upper limit figure. Conversely, if the arbitrator’s decision is below the agreed minimum, the award moves up to the pre-determined lower figure. In most instances, the parties agree to not inform the arbitrator of the range of their High-Low agreement. This type of arbitration is most suitable in cases where the only issue in dispute is quantum.
- What is Submission Only Arbitration?
Submission Only arbitration is designed for a speedy resolution of minor disputes, these are disputes that are less complex and the amount in dispute is relatively small.
The fees are fixed and there are strict time frames as well as limitations on the number, type and length of documents that can be submitted. The process takes about twelve (12) weeks from the time of the parties’ submission to arbitration to the issuance of the award.
- Is Arbitration final?
Arbitration awards are final and binding on all parties to the arbitration and may not be appealed except in very limited circumstances. Awards may be confirmed in the court having jurisdiction, that is, the Eastern Caribbean Supreme, St. Kitts. Once this is done the awards will carry the same force and effect as a decision of that court and can be enforced accordingly.
- How are the awards enforced?
Proceedings to enforce an Award will are conducted in the High Court and in conformity with the Arbitration Act, The Eastern Caribbean Supreme Court Act and the Civil Procedure Rules.
- What factors should I consider before choosing arbitration?
If your dispute has any of the following characteristics arbitration may be a suitable option for you:
The parties want a decision in a short period of time.
Hearings can be set up fairly quickly so that the parties can easily have a decision within 90 days from the date the case is submitted if the hearing has been waived or within 6 months in cases where there is a full hearing.
The parties believe that the courtroom setting may be traumatic or intimidating to the participants.
Arbitration is much more informal than courtroom proceedings, the hearing will usually be held at a neutral location such as a conference room in a hotel. This type of setting may be less intimidating to parties and their witnesses. In addition, depending on the degree of simplicity the arbitration can be submitted with written briefs only to the arbitrator and a hearing can be waived. In such a case no one will need to attend.
The parties need a determination on a specific issue.
In many instances it is only one issue that is the “sticking point”. By having an arbitrator make a binding award with regard to that issue, the parties may then proceed to negotiate the remainder of the case to settlement. For example, the parties may have agreed on liability but issues of quantum must be decided or the quantum has been agreed but there is dispute as to apportionment. In such a case the parties may ask the arbitrator to make an award with regard to that one issue. Once the arbitrator makes a determination the parties will then be able to proceed to a settlement.
The parties want the rules of evidence to be more flexible.
Arbitration involves rules which can be amended or modified by the parties themselves. For example, if the parties want the rules of evidence to be made more flexible they can do so. This is because in arbitration the parties are the ultimate sources for determination of the rules. It must be noted however that all rules must be in conformity with the relevant arbitration laws.
The parties want the outcome to be within specified limits.
Some persons prefer the “high/low” arbitration format. In high/low arbitration, the parties specify that the award will be no higher than a certain amount and no lower than another amount. The arbitrators are not usually made aware of the parameters of the high/low, and make their awards based on the evidence. Any award which is not within the parameters of the high/low is then reduced or increased in order to conform to the parameters. High/low parameters are usually set out in an independent contract that the parties make prior to the arbitration.