The Arbitration (Scotland) Act 2010 was passed by the Scottish Parliament on 18 November 2009, received Royal Assent on 5 January 2010 and is expected to come into force in March 2010.
It was said by the Enterprise, Energy & Tourism Minister, Jim Mather, that it "sets the scene for a renaissance of Scottish arbitration" so high expectations accompany it. Even more than that, it is hoped that it will make Scotland an attractive place for dispute resolution by providing a "modern, impartial and efficient arbitration regime". Whether that will prove to be the case remains to be seen. However, what it does do is to finally encapsulate, in one place, the Scottish law on arbitration thereby providing certainty as to the rules applicable.
The Act starts by setting out the "founding principles" namely:
- The object of arbitration is to resolve disputes fairly, impartially and without unnecessary delay or expense.
- Parties should be free to agree how to resolve disputes.
- The court should not intervene in arbitration except as specifically provided.
The Act itself contains provisions related to suspension of any court action if there is an agreement in the contract to arbitrate, enforcement of arbitration awards by the court, court intervention in arbitrations, recognition and enforcement of foreign arbitration awards, authorisation of "arbitral appointments referees" or appointing bodies, judges acting as arbitrators and transitional provisions.
Importantly, it also incorporates a set of Scottish Arbitration Rules, some of which are mandatory and some of which are non-mandatory (referred to as the "default rules"). These rules set out details of matters including appointment of arbitrators, the arbitrator's jurisdiction, duties of the arbitrator, procedural matters, powers of the court, arbitral awards, expenses and challenges to awards.
Addressing some of the criticisms levied at arbitration in the past - delay and expense - the new rules contain duties on both the arbitrator and the parties to the arbitration to conduct the arbitration without unnecessary delay and without incurring unnecessary expense. Operating this in practice will be key to persuading parties to reconsider arbitration as a form of dispute resolution.
After Arbitration's decline in recent years and the rise of the Commercial Courts and Adjudication, it will be a case of waiting to see whether this new Act is sufficient to increase Arbitration's popularity.