The legal status of arbitration


Arbitration can be defined as the process of two parties agreeing to enter into a legally binding dispute resolution in which the courts play a minimal part. The current legal arbitration framework (through operation of the Arbitration Act 1996) allows the decisions (known as awards) provided by the arbitration tribunal to bind parties.

Most arbitration proceedings are entered into as a result of a dispute which arises from a contract which contains an arbitration clause. This clause ensures that the parties, in the event of a dispute, will not be able to sue each other in court, but must instead proceed with arbitration. Legal restrictions such as these are not commonly enforced by statute, but the Arbitration Act does in fact allow a defendant in litigation to point out an arbitration clause and argue that a related claim should be referred to arbitration.

The arbitration process is flexible, and it changes depending on what the parties agree. The norm is for each party to appoint an equal number of arbitrators to the tribunal. These arbitrators are not necessarily experts in arbitration – often legal experts with industry-specific knowledge make good arbitrators because they are familiar with the subject matter as well as with the laws that govern it.

It should be noted that if you have a dispute which did not develop out of a contract containing an arbitration clause you may still be able to resolve it through arbitration. In order to do that you must agree with the other party and enter into a legal arbitration contract which will bind both of you. 

If you would like to obtain legal advice on arbitration, Caven can put you in touch with a local arbitration solicitor free of charge. So, if you have any questions or would like our help in finding local arbitration solicitors please call us on 08001 221 2299 or complete the web-form above.

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