The European, Middle Eastern And African Arbitration Review 2014

Author:Mr Andrew Lenny and Iseult Ní Ghallchóir
Profession:Arthur Cox

The Arbitration Act 2010

The Arbitration Act 2010 (the 2010 Act) repealed all previous arbitral legislation and effectively codified the law in this area into one Act of Parliament. It was signed into law on 8 March 2010 and entered into force on 8 June 2010. It applies to all arbitrations held in Ireland after the date of entering into force, both international and domestic.1

The main purpose of the 2010 Act is to bring Irish law into line with international best practice by adopting the UNCITRAL Model Law on International Commercial Arbitration and applying it to all arbitrations that take place in Ireland.

The 2010 Act provides a default framework to be applied to arbitrations in Ireland in circumstances where the parties themselves have not agreed to an alternative position or procedure. The 2010 Act provides certainty in relation to the arbitral process in Ireland while maintaining the independence of the arbitral process and protecting the autonomy of the parties who have chosen to arbitrate and agreed on the application of certain procedures.

Use of arbitration in Ireland

Arbitration as the preferred method of binding alternative dispute resolution is commonplace in commercial contracts and, in the construction sector, is almost the exclusive method. Insurance disputes in Ireland are also very frequently resolved by arbitration. Traditionally, prior to the complete overhaul and change of Ireland's arbitration law in 2010, arbitration was perceived as being prone to delays. However, the combination of the 2010 Act and the transformation of litigation efficiency in the Commercial List of the Irish High Court over the past few years has completely turned around the culture among practitioners, and now the rapid resolution of cases is the focus among the Irish legal community. One of the principal advantages of arbitration arises from the highly open and international nature of the economy and the almost routine situation whereby a counterparty to a contract is from overseas. The private, independent and internationally enforceable outcome of the arbitral process is particularly appropriate for an economy such as Ireland's.

Most arbitrations conducted in Ireland are domestic in nature, very often ad hoc, and, in the case of construction disputes, routinely conducted under the auspices of the Arbitration Procedure (2011) of Engineers Ireland, the Irish professional body for engineers.

Given the rapid development of Ireland as an open and international economy, international arbitration is now a regular feature of dispute resolution with increasing numbers of cases, particularly under the ICC Rules, involving an Irish party or Dublin as a seat. The Preamble to the 2010 Act gives the force of law in Ireland to the following international treaties:

the UNCITRAL Model Law (as amended by the United Nations Commission on International Trade Law on 7 July 2006); the Geneva Protocol on Arbitration Clauses (24 September 1923); the Geneva Convention on the Execution of Foreign Arbitral Awards (26 September 1927); the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (10 June 1958); and the Washington Convention on the settlement of investment disputes between states and nationals of other states (18 March 1965). The UNCITRAL Model Law, as adopted by section 6 of the 2010 Act, provides in its article 28 that the dispute should be decided in accordance with the rules of law chosen by the parties as applicable to the substance of the dispute, and unless otherwise expressed, the designation of a law or legal system by the parties refers to its substantive law not to its conflict of laws rules. Where the parties have failed to designate a chosen rule of law, the arbitral tribunal must apply the law determined by the conflict of laws rules which it considers applicable.

The 2010 Act provides that an arbitration agreement must be in writing. However, it will be held to be in writing if its content is recorded in writing including by electronic means, whether or not the arbitration agreement or contract has been concluded orally, by conduct or by other means.

Furthermore, an arbitration agreement is in writing if it is contained in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other.

Finally, the reference in a contract to any document containing an arbitration clause constitutes an arbitration agreement in writing, provided that the reference is such as to make that clause part of the contract under the general principles of contract law. This issue has recently been the subject of a decision of the Irish High Court, which is considered in detail later in this article.

Enforcement of agreements to arbitrate

Article 8 of the UNCITRAL Model, as adopted by the 2010 Act, provides that, where a dispute which is governed by an operative and enforceable arbitration agreement as defined under the 2010 Act comes before a court, the dispute must be referred to arbitration. Where court proceedings have been commenced in the above circumstances, arbitration proceedings can commence and an award can be made pending the outcome of the courts deliberation.

Multi-tier clauses prescribing steps in a dispute resolution process leading up to arbitration are very common, particularly in the construction sector. There is no direct authority on enforceability; however, the practice in Ireland clearly shows a respect for the steps in a tiered clause and parties in Ireland do not usually enter into a dispute about contracted-for steps leading to arbitration.

Arbitrability and jurisdiction

The Act does not apply to an arbitration under an agreement relating to the terms or conditions of employment or the remuneration of any employees, although the parties can always agree under contract or otherwise to refer non-statutory disputes to arbitration. Also, the arbitrator does not have the power to order specific performance for a contract for the sale of lands.

Article 16 of the UNCITRAL Model Law, as adopted by the 2010 Act, applies the principle of competence-competence to the law governing arbitrations in Ireland and provides that the arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms part of a contract shall be...

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