Arbitration

Arbitration agreements

What are the formal requirements for an enforceable arbitration agreement?

The arbitration agreement must be in writing (article 7 of the UNCITRAL Model Law).

Also, because Bermuda recognises the principle of separability of arbitration clauses from within a main contract, an arbitration clause within a main contract is sufficient for the arbitration agreement to be valid and enforceable (see article 16(1) of the UNCITRAL Model Law and Soujuznefteexport v Joc Oil Ltd [1989] Bda LR 11). This will be the case even if the validity of the contract in which the arbitration clause is incorporated is being challenged.

Arbitral procedure

Does the domestic law contain substantive requirements for the procedure to be followed?

Yes. Although the general approach of the UNCITRAL Model Law is to allow the parties the autonomy to agree the procedure to be followed, failing such agreement the arbitral tribunal can conduct the arbitration as it thinks fit, subject to the requirement that the parties be treated with equality and each party be given a full opportunity of presenting its case (see article 18 of the UNCITRAL Model Law).

Award

When and in what form must the award be delivered?

Section 21(1) of the 1986 Arbitration Act provides that an arbitrator shall generally have power to make an award at any time; however, the 1986 Arbitration Act does not prescribe the proposed form of an award.

Under the 1993 Arbitration Act, article 31 of the UNCITRAL Model Law does not prescribe a time frame for the delivery of an award. However, article 31 outlines the following requirements with regard to the form of an award:

  • the award must be in writing and signed by the arbitrator or arbitrators;
  • the award must state the reasons upon which it is based unless the parties have agreed that no reasons are to be given or the award is on agreed terms under article 30; and
  • the award must state its date and the place of arbitration as determined in accordance with article 20(1).
Appeal

On what grounds can an award be appealed to the court?

Under the 1986 Arbitration Act, an award can be appealed to the Court of Appeal on any question of law arising out of an award made on an arbitration agreement. An appeal may be brought by any of the parties to the reference either with the consent of all the parties to the reference or with the leave of the Supreme Court subject to section 31. However, the Supreme Court will not grant leave unless it considers that the determination of the question of law concerned could substantially affect the rights of one or more of the parties to the arbitration agreement having regard to all the circumstances.

Under the 1993 Arbitration Act, article 34(2) of the UNCITRAL Model Law outlines the following six grounds upon which an arbitral award can be set aside by the Court of Appeal:

  • a party to the arbitration agreement was under some incapacity, or the agreement was not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of Bermuda;
  • the applicant was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his or her case;
  • the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the award that contains decisions on matters not submitted to arbitration may be set aside;
  • the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of the UNICTRAL Model Law from which the parties cannot derogate or, failing such agreement, was not in accordance with the UNICTRAL Model Law;
  • the subject matter of the dispute is not capable of settlement by arbitration under the law of Bermuda; or
  • the award is in conflict with the public policy of Bermuda.

An application to set aside an arbitral award under the 1993 Arbitration Act must be made to the Court of Appeal within three months of the date of the award.

There is no right of further appeal from a decision of the Court of Appeal under article 34(2) of the UNCITRAL Model Law.

Enforcement

What procedures exist for enforcement of foreign and domestic awards?

The procedure for the enforcement of foreign and domestic arbitration awards is set out in Order 73, rule 10 of the Rules. An application for leave to enforce an award either under section 37 of the 1986 Arbitration Act or under section 48 of the 1993 Arbitration Act may be made ex parte, or the court hearing the application may direct a summons to be issued. If the court directs a summons to be issued, the summons shall be an originating summons.

An application for leave to enforce an award must be supported by an affidavit that:

  • exhibits either the original arbitration agreement and the original award or copies of the same;
  • states the name and the usual or last known place of abode or business of the applicant and the person against whom it is sought to enforce the award respectively; and
  • states either that the award has not been complied with or the extent to which it has not been complied with at the date of the application.

With respect to seeking to enforce a foreign award in Bermuda, an application must be made for leave to serve the originating summons out of the jurisdiction as outlined within Order 73, rule 7 to rule 10 of the Rules.