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08 June 2010
The Arbitration Act 2010 came into force in Ireland on June 8 2010. It repeals all previous arbitration legislation. Previously, two distinct regimes had operated in Ireland. Pursuant to the Arbitration (International Commercial) Act 1998, the United Nations Commission on International Trade Law (UNCITRAL) Model Law applied to all international commercial arbitrations. Meanwhile, the Arbitration Act 1954, which previously governed all arbitrations conducted in Ireland, remained applicable to what were effectively domestic arbitrations.
The 2010 act applies the UNCITRAL Model Law, with some slight revisions, uniformly to all arbitrations conducted in Ireland irrespective of whether they are domestic or international in nature.
The Irish courts have been explicitly arbitration friendly and quite non-interventionist, reflecting and respecting the decision of parties to elect for arbitration as their dispute resolution mechanism. However, while the case law under the 1954 act and particularly the 1998 act was limited, that is not to say that such legislation did not afford the courts the opportunity to oversee or intervene in the arbitration process at the request of the parties or the arbitrator, especially so under the 1954 act. However, through the uniform application of the UNCITRAL Model Law under the 2010 act, the scope for court intervention is reduced.
Formerly, under both the 1954 and 1998 acts, the High Court could exercise various powers in support of arbitration. For the most part, all of those powers still exist under the 2010 act except that, unless the parties otherwise agree, when dealing with interim relief or the taking of evidence the High Court has no jurisdiction to make any order relating to security for costs of the arbitration or any order for the discovery of documents. In addition, under both of the previous regimes, any determination by the High Court on matters pursuant to arbitration legislation was subject to the right to appeal to the Supreme Court. Under the 2010 act, however, there is no appellate jurisdiction in respect of stays, the setting aside of awards or the recognition and enforcement of awards.
Looking specifically at the 1954 act, the opportunity for cases to be stated to the High Court where an arbitrator could ask for a ruling on a particular point of law or could be required to seek one no longer exists under the 2010 act. The 1954 act also had its own particular mechanisms and bases upon which an award could be set aside or remitted to the arbitrator. Now recourse against an award is available only as provided for under Article 34 of the UNCITRAL Model Law. A challenge to the arbitration process could previously be made during the course of the reference under the 1954 act, but this can now be done only by way of seeking recourse against the award. The 1954 act also permitted a challenge to the arbitrator during the course of the reference, but there is now a more limited scope to do so under the model law.
One final difference between the previous legislation in terms of the role and powers of the court is that there is now a provision that the Circuit Court or High Court may, at any time during the trial of proceedings before it, adjourn those proceedings if it thinks it appropriate to do so and with the consent of the parties, so that the parties might consider whether all or any of the proceedings might be referred to arbitration.
As a consequence of the Arbitration Act 2010 coming into force, a bifurcated arbitration regime no longer exists in Ireland and an international uniform set of rules applies instead. For some, the reduction in the courts' opportunities to intervene adds to the finality and independence to which arbitration as a dispute resolution process should aspire. For others, without the opportunity of court oversight in certain regards, as was previously the case, the arbitration process may seem more unpredictable. However, notwithstanding the reduction in the number of statutory provisions regarding court involvement, it remains to be seen whether there will be in fact less litigation regarding arbitrations and the conduct of same.
For further information please contact Gearoid Carey at Matheson Ormsby Prentice by telephone (+353 1 232 2000), fax (+353 1 232 3333) or email (email@example.com).
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