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Draft
REPORT
OF
THE REVIEW COMMITTEE
OF
THE CHARTERED INSTITUTE OF ARBITRATORS – CARIBBEAN BRANCH
1
Kingston, 25 August 2009
THE COMMITTEE MEMBERS
CHAIRMAN: Christopher P Malcolm
John Bassie
Eileen Boxhill
Sherene Golding-Campbell
Stephen Shelton
Maurice Stoppi
Lowel Morgan
2
TABLE OF CONTENTS
Page
Preamble................................................................................................................... 4
Summary Committee Recommendations ................................ 5
Introduction 6
Chapter I Reasons for Change.................................................. 7 - 13
Chapter II Policy and Legislative Reform................................... 14 - 16
Chapter III Design and Implementation....................................... 17 - 22
Annex 1 Terms of Reference................................................... 23 - 25
Annex 2 Arbitration Act, 1900.................................................. 26
Annex 3 WAR Contribution...................................................... 27 - 80
Annex 4 English Arbitration Act, 1996...................................... 81
Annex 5 UNCITRAL Model Law................................................. 82
Annex 6 UNCITRAL Guidance Notes.......................................... 83
Annex 7 Morgan Paper ............................................................ 84 - 129
Annex 8 Elements to be considered in Drafting Instructions....... 130 - 133
Annex 9 Proposed Time table ................................................... 134
Additional Annexes
- Annex 2
- Annex 4
- Annex 5
- Annex 6
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PREAMBLE
This document constitutes the Report of the Review Committee of the Chartered Institute of Arbitrators – Caribbean Branch concerning the possible Establishment of a New Framework for Regulation of Arbitration in Jamaica in accordance with Committee’s terms of reference of 23 June 2009.1
The three main elements of the mandate appear to be:
1. Assessment of the current framework for arbitration in Jamaica;
2. Preparing a draft policy document and outline drafting instructions for the proposed new framework for discussion and ultimate presentation to the relevant authorities;
3. Preparing draft legislation as well as rules for discussion and ultimate presentation to the relevant authorities.
The Committee decided that the main focus of this work should be to distil relevant information and then prepare a draft policy document as well as outline drafting instructions for a proposed new framework. It will thereafter be involved in a workshop being hosted by the Mona Law Institute at the Mona Visitors Lodge on February 18, 2009, which will consider how to implement a modern Jamaican framework for arbitration.
In sum, this Report has been presented in the context of a progressive agenda that has been determined by the Caribbean Branch. This agenda is intended to inform policy makers as well as technocrats who are involved in efforts being made or to be made to reform the legislative and regulatory framework for arbitration.
1 See Annex 1.4
SUMMARY OF COMMITTEE RECOMENDATIONS
The Review Committee now recommends:
1. A comprehensive overview and ultimate modernisation of the framework for arbitration of Jamaica;
2. The specific steps which should now be taken are:
a. To critique the laws which now regulate the practice of arbitration, including by reference to comparative analysis;
b. To determine how and in what specific ways the existing law may be improved;
c. To devise a well considered policy document as well as outline drafting instructions;
d. To secure the early and continuing involvement of critical policy makers as well as of the Chief Parliamentary Counsel;
e. To caucus together with other interested persons at the earliest opportunity and to then distil relevant information and thereafter devise an implementable plan of action and support draft documents;
f. To present policy and supporting draft documents to the relevant authorities;
g. To undertake such lobby activities as are appropriate in attempts to secure earliest implementation of a comprehensive and workable new framework for arbitration in Jamaica.
3. That any new law to be implemented should include adequate provisions for domestic as well as international arbitration;
4. That the new law is to reflect intentional best practice;
5. That the UNCLITAL Model Law represents a good framework which could be adapted for implementation;
6. That modernisation should also include adequate arrangements in support of training and apprenticeship, institution building and for the supervision and control of arbitration.
5
INTRODUCTION
Jamaica is surrounded by the Caribbean Sea and ideally situated between North and South America. The weather is good all year and the infrastructure which supports telecommunications and travel is of a very high standard. The official language is English and the legal system is Common Law.
Jamaica now has two domestic universities providing degrees in law 2 and a number of other institutions provide distance learning opportunities and degrees in law from recognised international universities. Jamaica also hosts the Norman Manley Law School, which provides practitioner training in law.
The field of arbitration has been intricately inked to the field of law and programmes in Arbitration and ADR are usually offered through Faculties of Law. Furthermore, the judicial system is relied upon and provides significant support to the practice of arbitration.
Although global use of commercial arbitration, in particular, has expanded in recent years, little has been done to enhance the Jamaican practice environment. Indeed, the most critical best practice component – an enabling legislative and regulatory framework – has remained firmly rooted in 19 th
Century thinking. This represents a lacuna in need of immediate attention.
The Committee has decided to get involved in a very tangible way and recognises that there is need for action now. Delay means delaying benefits that could be derived, or perhaps risking no benefits at all. Delay means the continuation of an undated framework and suboptimal performance in a field which could have significant implications for capacity building, administration of justice and general economic performance.
2 These are: University of the West Indies (UWI); and University of Technology (UTECH).6
CHAPTER I
REASONS FOR CHANGE
1. ECONOMIC BENEFITS
The development of a modern arbitration regime and support services could become the catalyst for the development of specialized arbitration institutes. These could, in addition to training in arbitration, offer programmes in English as well as in Common Law to Latin Americans who function under Civil Law systems. The latter objective – training in English and Common Law – could bear significant fruit given that the Common Law is the law of international commerce and there is already a captive market of students who travel to the US and England each year from Latin America to be schooled in English and the Common Law.
The economic value of foreign students is such that two or three years ago the Provost at Oxford indicated that he prefers to accept foreign students – many of them Latin Americans – over more qualified locals because they contributed more to the coffers. While Jamaica would not be able to attract every student who would like to go to Oxford or Harvard, there is still a significant population that can be attracted and with properly designed programmes – which could be in collaboration with theses said institutions – a lot could be accomplished, which would inure to the economic benefit of Jamaica. This effort would also provide another excellent opportunity for the alignment of education strategies to economic development through specific sector involvement.
Beyond the education frontier, the most significant and easiest to accomplish economic benefit would flow from user and other fees related to the conduct of international as well as domestic arbitration.
As indicated above, Jamaica is ideally placed as a matter of Geography and studies have shown that Jamaica is among the most recognised international brands. Jamaicans have also distinguished themselves in the field of International Law and Dispute Settlement, including through the judiciary. One recalls, for example, that the current President of the War Crimes Tribunal for the former Yugoslavia is Patrick Robinson, a son of the Jamaican soil, and others, including Dr. Kenneth Rattray (deceased), Professor Steven Vacciannie and Maurice Stoppi – esteemed member of this Review Committee – have attained international notoriety in the field of dispute settlement. This can be leveraged in any attempt to position Jamaica as an international arbitration centre. Thereafter, as has been the case in Singapore, Jamaica could reap quantifiable and significant economic benefit from international arbitration.
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In the case of Singapore, the practical as well as the intellectual or academic aspects of arbitration have received ongoing policy and implementation support. Education is considered critical and this component has been secured including through the National University of Singapore (NUS) which now has one the best arbitration programmes in the World. It attracts local as well as foreign students and the economic implication for NUS and the economy more generally is significant.
Jamaica could become the Singapore of the Western Hemisphere. This is not fanciful thinking. Indeed, studies have shown that there is a lacuna since there is no recognised major international arbitration centre in Latin America or the Caribbean. This has meant that the most international commercial arbitration involving the region go outside, including to London or Paris.
In short, there is a market to be satisfied and money to be made. However, Jamaica cannot benefit as an officious or innocent bystander. She must get involved and the first required step is the modernisation of the arbitration regime. It must also be borne in mind that with modernisation a basis would be established for Jamaica to reap possible cost savings from the greater use of arbitration instead of judicial proceedings at the domestic level.
For many years, until 2002, Jamaica did not accede to the New York Convention and studies have shown that this would have hindered any attempt to compete in the market. This obstacle has now been removed and the time is ripe for further action. However, Jamaica cannot procrastinate and must bear in mind that there are rumblings which suggest that other Caribbean jurisdictions are making attempts to get into and corner the market.
2. INTERNATIONAL TRENDS
The modernisation of arbitration regimes has been gathered significant pace in recent years. Some jurisdictions, such as the England, have designed and implemented ‘home grown’ legislation.3 However, the vast majority of others have adopted, either wholesale or with minor adjustments, the UNCITRAL Model Law. This UNCITRAL Model was specifically designed to assist States in reforming and modernising their arbitral procedure so as to take into account the particular features and needs of international commercial arbitration and it has been accepted and implemented across divergent legal and economic systems.4
The implementation of modern arbitration regimes coincides with a more general trend in favour of the settlement of commercial and other disputes by non-judicial mechanisms, such as re-negotiation, good offices, mediation and conciliation. It also coincides with recognition that arbitration is big business having the capacity to generate significant income for international arbitration centres while at the same time expanding the range of opportunities for local professionals in the field of dispute settlement and support services.
3 Annex 4.4 See http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/1985Model_arbitration.html
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Jamaica now has an opportunity to capitalize on emerging opportunities in the field of arbitration. However, this requires modernisation of the arbitration regime. While the most attractive opportunities relate to the practice of international commercial arbitration, a programme of modernisation will also have positive implications for the settlement of domestic disputes.
3. CAPACITY BUILDING
It has been said, and this Committee accepts, that “the arbitrator is the sine qua non of the arbitral process. The process cannot rise above the quality of the arbitrator.”5
Jamaica does not have a cadre of internationally recognised professionals in the field of arbitration. Nevertheless, a small number of local arbitration practitioners have gained some regional and even international notoriety. Still, Jamaica is not itself recognised for international arbitration or even for having a credible framework for domestic arbitration and there is no institutional arrangement, as such, which is responsible for the supervision and control of arbitration practitioners.
Capacity building is intended to bridge the abovementioned gap at two basic levels – improve human resources through training; provide opportunities for apprenticeship. A properly designed capacity building programme will also create possibilities for a broader range of required skill sets as well as establish professional relationships which enable optimal participation in regional and international arbitration.
A. RANGE OF REQUIRED SKILLS
The range of skills and professional input required for arbitration increases with the complexity of matters to be determined and can also be influenced by the content of the enabling legislation.
The usual participants in arbitration are: (a) the Disputants; (b) their Representatives; (c) their Witnesses; and (d) the Tribunal. With modernisation, it is anticipated that more complex matters, including the settlement of international disputes, will be dealt with. These will require the involvement of other participants, many of whom will have to possess special skills.
These other participants will likely include: (a) a Secretary to the Tribunal, who will be a trained arbitration practitioner will capacity to assist with research and writing; (b) Expert witnesses, who could, for example, be trade and investment practitioners or cross-border legal experts; (c) Bankers; (d) Accountants; (e) Local lawyers advising international participants on local law; (f) Foreign lawyers advising on other jurisdictional issues; (g)
5 Von Mehren, ‘Concluding Remarks’ in ICC (ed), The Status of the Arbitrator, 129. 9
Administrative support – teleconferencing; audio and videography; printing; and (h) Ancillary support. Furthermore, an arbitration centre will create its own demand and require, among other areas, publicity and marketing support.
B. CSME, ICSID AND OTHER ARRANGEMENTS
The Revised Treaty of Chaguaramas under which the CSME has been established requires the establishment of an arbitration panel and settlement of disputes by arbitration is a preferred method. There is a similar requirement under the Treaty of Basseterre, which established the OECS. Other institutional arrangements, including the ICSID, WTO, WIPO, NAFTA and the proposed FTAA also include special provisions requiring the use of arbitration.
The modernisation of the regime for arbitration, including a well designed capacity building programme, will enable Jamaica to derive greater benefit from these arrangements at two basic levels. First, Jamaica will be better able to attract disputants to Jamaica with consequential benefit for local practitioners and the economy more generally. Second, with modernisation and greater involvement in the arena the profile of local practitioners will be raised and it will become easier for them to serve international panels. This second benefit will have positive implications for the first. It should also be clear that increased profile and involvement will enhance the possibility of critical involvement in the establishment of international standards for arbitration and for international commerce more generally.
C. RESOURCES
The modernisation of the arbitration regime will make Jamaica more attractive to international arbitration institutions, such as AAA, LCIA, and ICC as well as to international donor agencies that are interested in funding justice improvement and related projects. These institutions – AAA, LCIA and ICC – seek to broaden their reach on an ongoing basis and can be persuaded to establish satellite arrangements in Jamaica at their own expense with consequential benefits for economy.
D. TRAINING AND APPRENTICESHIP
Jamaica is not now recognised for an established cadre of highly trained arbitration practitioners. As the jurisdiction develops in this area, there will be consequential need for highly skilled professionals whose competence will have to extend beyond the taking of evidence and the rendering of a decision.
Assuming that development will include participation in the settlement of international commercial transactions, including trade and investment disputes, practitioners will then be
10
required to demonstrate sound understanding of: (a) globalisation and international standardisation; (b) the nature and practice of foreign investment; (c) the nuances of bilateral, regional and international arrangements; (d) options of dispute settlement; and (e) elements of comparative international arbitration – awareness of the laws, rules and practice of both domestic and international arbitration. This will require specialized training, which could be developed in collaboration with and offered through local institutions of higher learning.
Given that best practice in arbitration, like practice at the bar and sitting as a Judge, is experiential, a programme of apprenticeship should also be encouraged. This will enhance the capacity of young practitioners and will play a vital support role in any attempt to establish Jamaica as a credible international arbitration centre.
4. INSTITUTION BUILDING AND MARKET OPPORTUNITIES
Institution building must be a critical component of any attempt to modernise the regime for arbitration in Jamaica. There are cost implications and these must be properly considered. Thereafter, every effort must be made to ensure that scarce financial resources are not wasted.
While there is no recognised arbitration institution, as such, the building blocks have already been laid by the Dispute Resolution Foundation of Jamaica as well as the Chartered Institute of Arbitrators – Caribbean Branch. These can be assisted with direct as well as indirect government support as they seek to establish a credible institutional mechanism for the management and control of arbitration.
The Review Committee is also aware of attempts now being made by the PSOJ to source funds and thereafter establish an arbitration centre. While this effort is commendable, their objective cannot be realised without competent practitioners. Accordingly, their attempt at institution building must also include a credible training and apprenticeship component. Furthermore, it must be recalled that “arbitration can only be as good as its arbitrators.”6
Notwithstanding any perceived or other limitations in the PSOJ strategy, their approach supports the view of the Review Committee that there is a market opportunity in the area of institution building. This must, however, be supported by modernisation more generally that includes a significant capacity building component.
5. ESTABLISHING AND MAINTAINING PROFESSIONAL STANDARDS
At present there is no specific qualification or other requirement for arbitration practitioners. This is cause for concern given that an arbitrator could on any given day be required to
6 See K-H Bockstigel ‘The Internationalisation of International Arbitration: Looking Ahead to the Next Ten Years’ in M Hunter, A Marriott and VV Veeder (eds) The Internationalisation of International Arbitration: The LCIA Conference (Graham & Trotman London 1995) 77.
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determine a matter with significant implications for the national economy and the parties involved in circumstances where they might have agreed that there is no right of appeal. Furthermore, the arbitrator could be an unattached person who has no regulatory body to which he or she is accountable and no clearly established ethical standard to guide his or her conduct.
Modernisation of the arbitration regime could now establish regulations requiring: (a) specific qualification of arbitrators; (b) implementation of a professional designation as well as ethical standards for practitioners; (c) a regulatory mechanism for supervision and control; and (d) a specific complaint procedure.
The Review Committee recognises that there are persons who have been involved in the practice of arbitration over a long period and any new arrangement should include a grandfathering for their benefit. It is also recognised, however, that many of these persons may have limited, if any experience, in the field of international trade and commerce and any grandfathering exercise will have to bear this in mind.
Against this background and given also that the skills set for international arbitration could differ in material respects from those required for domestic arbitration, it could become necessary to implement a framework which includes: (a) Domestic Arbitrators, who would not be able to function as panellists in international arbitration matters; and (b) International Arbitrators, who satisfy specific requirements and are able to function as domestic as well as international panellists. To ensure that all persons have an equal opportunity to participate at both levels support will be given to appropriate training and accreditation programmes.
In any event, the regulatory body will be required to implement a programme of continuing education to ensure the maintenance of best practice.
7. CONVERGENCE AND HARMONISATION IN CARICOM
Full implementation of the CSME will require the harmonisation of laws and convergence of regulatory regimes. At present, the framework for arbitration in CARICOM is uneven. However, the basic instruments that govern arbitration within the Commonwealth Caribbean are similar.
In the early 1990s, the CARICOM Law Institute Centre (CLIC) had embarked on an ambitious programme that was intended to harmonise the law for arbitration throughout the region. While draft legislation was completed for domestic as well as international arbitration, the effort faltered. In recent times, the Drafting Unit of CARICOM has been involved an attempt to produce a model law for the region.
It is unlikely that the CARICOM process will bear immediate fruit and, in any event, their model might not suit the best interest of Jamaica. Furthermore, given what should be a real effort to get onboard early and also in an attempt to demonstrate leadership in the field, the time is ripe
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for Jamaica to enact a new law and establish a modern arbitration regime which could then become the model for CARICOM.
CHAPTER II
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POLICY AND LEGLISLATVE REFORM
1. INTRODUCTION
The legal framework which now exists cannot support expansion of or optimal benefit from arbitration in Jamaica. It therefore requires urgent policy and legislative review and any such attempt must properly involve a broad cross-section of interested parties.
2. POLICY CONSIDERATIONS
The proposed policy justification for reform has already been established in Chapter I – Reasons for Change.
Other considerations would include: (a) cost; (b) benefit to be derived; (c) human resources; (d) CARICOM leadership; and (e) International Profile. These issues have also been discussed in Chapter I.
The Review Committee recognises that ultimately it is for the political directorate to take the necessary steps that are required to implement a new and improved regime for arbitration. On front, the signs are positive since the Minister of Justice and Attorney General has indicated publicly that she now intends to support the establishment of modern regime for arbitration.
3. CONCEPTUAL FRAMEWORK FOR LEGISLATION
The Review Committee is of the opinion that modernisation must be based on a conceptual framework which includes best practice arrangements for both domestic and international arbitration. The new framework should also include appropriate arrangements for: (a) ongoing review and corrective adjustment; (b) supervision and control; and (d) ensuring the growth and development of Jamaica as an international arbitration centre.
4. DETAILS OF THE COMMITTEE’S PROPOSAL
The Review Committee is of the opinion that the new framework must include framework principles that are derived from international best practice that have been adapted to local circumstances. However, the Committee recognise that time is now of the essence and believe that while initial model selection and implementation is critical it is even more important to ensure that the new framework includes a sufficient mechanism for ongoing review and corrective adjustment that will be able to secure and maintain Jamaica as a preferred destination for international arbitration.
A. FRAMEWORK PRINCIPLES
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The Review Committee is of the opinion that the new law should be part of an overall reform effort that is intended to improve the conduct of dispute settlement in the commercial arena. It must:
1. Secure confidence in the arrangements introduced for settlement of disputes;
2. Assure the maintenance of able and suitably qualified practitioners. Suitability must be subject to periodic review and annual certification;
3. Require certification which will enable arbitrators to practice as: domestic arbitrators; and international & domestic arbitrators;
4. Clarify specific or additional requirements that must be met by persons who are able to practice as international arbitrators and these requirements must be included in the primary law or regulations;
5. Include a process of ‘grandfathering’ which within a pre-determined period enable special categories to operate as arbitrators without meeting the strict qualification requirements of the new law;
6. Assure best practice, efficient and timely conduct of proceedings;
7. Assure maintenance of institutional mechanisms at the highest level possible;
8. Assure critical court support;
9. Secure proper arrangements for continuing education and discipline of practitioners;
10. Include an appropriate mechanism for marketing and publicity.
These components will be preserved under specific provisions of the primary law and supporting regulations.
B. CONSULTATION AND TRANSPARENCY
The Review Committee would recommend that policy-makers consult with interested parties in an open, transparent and systematic way. Where necessary public forums should be held and use of innovative technologies, including the internet, must be encouraged. Furthermore, where corrective measures are to be introduced the active involvement of interested parties must be included.
The Committee would also recommend that institutions be required to publish their activities as well as a List of certified arbitrators on a pre-determined basis.
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C. ONGOING REVIEW AND CORRECTIVE ADJUSTMENT
The Review Committee would recommend that the proposed new framework includes an in-built mechanism to secure ongoing review. This process must include capacity to track international developments and their implications for Jamaica. In addition, the new framework must include a mechanism whereby adjustments can made on an ongoing basis without the need for Parliamentary involvement on each occasion that change is required.
5. POSSIBLE OBSTACLES AND MITIGATING RESPONSES
There are those who benefit from and could find innumerable reasons for retention of the current system. These persons include legal practitioners who can now rely on the current framework to pursue unnecessary court actions, which ultimately militate against the just, equitable, timely and most cost-effective settlement of commercial disputes.
The mitigating responses must include: pre-implementation negotiation and public discourse; rigorous research and best practice drafting; ensuring that the law when implemented assures the highest possible standard; quality assurance and practitioner vigilance.
CHAPTER III
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DESIGN AND IMPLEMENTATION
1. INTRODUCTION
The design and implementation of a new arbitration law and institutional mechanism must consider the current framework7 and changes that are required to make it more effective. It must be recognised that arbitration will or at least could involve both domestic and international matters and any model selected should be adequate for both types of matters.
2. MODEL SELECTION
In selecting a model for implementation, the legislature must determine whether to enact separate laws for domestic and international arbitration or consolidated legislation. They must also determine whether to separate the primary law(s) from the relevant regulations.
While domestic factors will be paramount, the model selection process should involve comparative study. In this latter regard, the UNCITRAL Model Law as well as the English Arbitration Act of 1996 would be recommended for special consideration.
A. ENGLISH ARBITRATION ACT, 1996
The English Arbitration Act was implemented on January 31, 2007 and it applies to arbitration proceedings commenced on or after that date. It is to be construed in accordance with three principles:
1. The object of arbitration is considered to be obtaining a fair resolution of disputes by an impartial tribunal without unnecessary delay or expense;
2. The parties should be free to agree how their disputes are to be resolved, subject only to such safeguards as are necessary in the public interest;
3. The court should not intervene in arbitrations unless their intervention is expressly contemplated and in the manner provided for under the Act.
The Act includes mandatory as well as well as non-mandatory provisions. It is possible to contract out of non-mandatory aspects and the parties may, for example, agree a foreign law to govern procedural aspects of the arbitration. However, they are unable to contract out of mandatory aspects, such as the power of the court to stay legal proceedings brought in breach of an arbitration agreement, which guard against exclusion of what would be considered contrary to the public interest.
7 Annex 3.17
The Act treats the arbitration agreement as distinct from any more substantive agreement of which it forms or was intended to form a part. Accordingly, it can still be effective even if that substantive agreement is invalid, did not come into existence, or has become ineffective.
The Act contemplates the possibility of a chairman being appointed who is then vested with such powers as the partied may agree. In absence of agreement, the chairman will become involved in the proceedings and any award then made shall be by majority. However, if there is neither unanimity nor a majority then the chairman will decide.
Instead of a chairman, the parties may prefer to have an umpire who only becomes involved in the decision-making when the other arbitrators fail to agree. Where there is such failure, the umpire then steps in to make the award as though he were the sole arbitrator.
The Act also deals with: immunity of arbitrators and arbitral institutions as well of their servants or agents unless they have acted in bad faith or have failed to act at all; how the substantive jurisdiction of the arbitrator is to be determined; general duties of the tribunal and the parties; procedure to be applied and the scope of party autonomy in this regard; possibility and scope of court intervention; challenges to an award; and powers of the tribunal. These provisions, while they may have incorporated best practice as it has evolved over time, are generic in nature.
By way of innovation or departure from traditional practice, the Act now allows the tribunal to determine a dispute either in accordance with the law chosen by the parties or “in accordance with such other considerations as are agreed by them or determined by the tribunal”. This new approach, which contradicts traditional practice requiring that, subject to minor exceptions, arbitrators must apply the law, enables the making of an award by reference to general equitable principles.
It has been said that the 1996 Act represents a significant advance in arbitration law. It is considered to have been responsible for putting more power in the hands of parties, while at the same time imposing obligations on them as well as on the tribunal to ensure that the process is efficient and cost-effective.
Notwithstanding the advances made, there are several prominent UK based arbitrators and academics in the field who contend that England would have been served by the UNCITRAL Model Law instead of the 1996 Act in its current form. These persons include Professors Julian Lew and Loukas Mistelis, both of whom are practitioner/academics.8
8 Julian Lew is considered to be among the top three arbitrators in the World and is a leading academic in the field. Loukas Mistelis is also a prominent practitioner and Head of the School of International Arbitration, Centre for
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A new Jamaican Arbitration law based on the English Act of 1996 could find favour, if only because it would have been influenced by legislation that has been crafted under the Common Law Tradition. Furthermore, there is now a body of relevant and available English case law which would be considered highly persuasive by the Jamaican courts. Nevertheless, the current challenge must be to design and implement a best fit law which has all the necessary ingredients to support the development of Jamaica as a credible centre for international as well as domestic arbitration. Thus, the easy English option should never be implemented simply because there is a body of case law that can easily be referred when interpretation and application of the new law is in issue.
It must also be recalled that arbitration is intended to avoid the process of national courts as much as possible and there is a growing trend to underscore and in practice assure that arbitrations should not simply mimic or reflect court proceedings. And insofar as the judiciary is concerned, the time must by now be ripe (if not already the case) for policy makers to repose required confidence in the judiciary and for them to then accept that they have sufficient capacity to interpret and apply law, by reference to accepted standards, without need for unadulterated umbilical support from English or other courts.
B. UNCITRAL MODEL LAW
The UNCITRAL Model Law (Model Law) was adopted in 1985 and amended in 2006. It has since been implemented in a number of jurisdictions and administrative regimes across divergent legal traditions and economic systems.
The Model Law deals with all stages of the arbitral process, including: the arbitration agreement, the composition and jurisdiction of the arbitral tribunal, the extent of court intervention, recognition and enforcement of the award. It is considered to have reflected worldwide consensus on key aspects of international arbitration practice and has been adapted for domestic as well as international arbitration.
The Model Law was designed to deal with, but is not limited, to international arbitration. Indeed, the more general intention was to encourage the harmonisation of arbitration practice across jurisdictions in relation to commercial matters through the instrumentality of common or harmonised legislation.
Notwithstanding the ‘intended international’ scope, the Model Law has been adapted for both domestic and international arbitration: in common law jurisdictions, such as India; civilian jurisdictions, such as Germany; and socialist jurisdictions, such as Russia. Its use in Germany is of particular significance since their system relies more on arbitration for settlement of commercial disputes than any other developed country. Germany is also
Commercial Law Studies, Queen Mary University of London. 19
considered as being more progressive in her approach to arbitration than most other countries.
The Model Law does not delimit which disputes are arbitrable. Indeed, it specifically provides that it is not intended to affect other laws which preclude certain disputes being submitted to arbitration.9 Accordingly, when implementing the Model Law legislators are completely free to determine which disputes are arbitrable and which are not. This may be done by express exclusion in the law itself or could result from the conferral of jurisdiction, in relation to excluded matters, on specialised tribunals or national courts.
The selection and appointment of arbitrators, including the number of arbitrators, is subject to the will or autonomy of the parties. However national laws may be adapted to secure quality or qualification control. While this intervention will have negative implications for free choice, it must be given serious consideration as: parties are typically guided in their choice by what is held out as available; and if the interest of the economy more generally as well as the establishment of a credible international arbitration centre is being considered then quality or qualification control would be a critical distinguishing and marketing component.
The provisions of the Model Law are not set in stone and it is anticipated in its implementation necessary adaptations will be made to suit the particular needs of the jurisdiction. In India, for example, their adaptation has been implemented as an Arbitration and Conciliation Act while in Germany their adaptation includes ongoing deliberate efforts to distinguish the practice of arbitration from court proceedings.
The Model Law has been supplemented by ‘Notes on Organising Arbitral Proceedings’ which were finalised between 28 May and 14 June 1996.10 While these notes have been prepared with international arbitrations in mind, they also provide invaluable best practice guidance for the organisation and conduct of domestic arbitrations.
C. ENTIRELY HOME GROWN
While this represents a romantic option, which could conceivable best suit domestic conditions, its design and implementation would involve an expensive and time-consuming process which Jamaica cannot afford. Furthermore, the human and financial resources that would be required to craft this option are simply not available locally. In any event, both the UNCITRAL Model Law and the English Act are sufficiently well designed and either can be tailored, if necessary, to satisfy local requirements.
D. BEST FIT
9 Art 1 (5).10 Annex 6.
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In a word, it must now be emphasised that while arbitration has over time relied on support from the judiciary it is itself quazi-judicial in nature and party autonomy is considered paramount. It is clear that arbitration is intended to stand on its own and relevant laws wherever found and however archaic support this contention. It follows then that a progressive approach to arbitration law and institutional reform, especially where international arbitration is also being considered, should not be constrained by the availability of relevant case law. It must also be recalled that the vast majority of domestic as well as international arbitration awards and proceedings do not involve the courts in any shape or form.
Lowel Morgan has in an unpublished paper11 argued that the English Arbitration Act is suited for Jamaica than the Model Law. He there details aspects of both and includes an abridged comparison.
The Committee found the information included in Morgan’s paper to be quite helpful but cannot agree with his conclusion that the Model Law is limited to international arbitration. In fact, the implementation record will show that the Model Law has formed the basis for new legislation in more than fifty countries12 and has in most instances been adapted for both domestic and international arbitration.
While it may be argued that the English tradition has served Jamaica well and that adaptation of their legislation could be more compatible with time honoured legislative practice, in this instance it must be recognised that England is on a limb which is inconsistent with a global and what could be considered more progressive trend. In this vein, it must also be recognised that maximum benefits will be reaped not from domestic arbitration but instead from international arbitration.
With the economy foremost in mind having especial regard always for the best interest of justice, the Committee has now determined that adaptation of the Model Law is better able to secure the require modernisation which will support the establishment of a credible arbitration centre. It has also been determined that effective quality and regulatory control of practice and practitioners must be introduced in order to secure best results and also as a distinguishing basis when compared other jurisdictions in the market.
Confidence has to be reposed in the judiciary and practitioners; however, this has to be supported by a regime which encourages and indeed requires that arbitrators have minimum qualification and are required to be involved in continuing education. It will also become necessary to over time revisit the court system and its approach to commercial
11 Annex 7.12 See http://www.uncitral.org/uncitral/en/about/origin.html
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matters more generally. In this latter regard, the system that has been recently adopted in the British Virgin Islands is to be commended.
3. ONGOING REVIEW AND CORRECTIVE ADJUSTMENT
Whichever model is selected or crafted, the legislature should ensure that it includes appropriate provisions for ongoing review and necessary corrective adjustment on a timely basis.
In practice, ongoing review and corrective adjustment might be best secured under an arrangement which separates the primary law from applicable regulations. These regulations will then include provisions dealing, for example, with: minimum qualification and certification; continuing education; ethical conduct and discipline; procedural matters; as well as institutional design and maintenance.
ANNEX 1
TERMS OF REFERENCE GIVEN BY THE CHARTERED INSTITUTE OF ARBITRATORS – CARIBBEAN BRANCH - ON 23rd DAY OF JUNE 2009
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The statutory basis for arbitration in Jamaica is the Arbitration Act 1900. The Act is outdated and it has been determined that there is need for urgent legislative reform as well as improvements in the institutional mechanisms available for domestic and international arbitration. It also appears that there is need for improvements across the Caribbean region more generally.
Against this background, the Chartered Institute of Arbitrators - Caribbean Branch have now determined that they will take such steps as are available to:
1. Chart a possible new framework for arbitration in Jamaica which could thereafter be applied across the Commonwealth Caribbean;
2. Examine and thereafter propose a policy document which will be made available to the relevant authorities;
3. Prepare outline drafting instructions and related documents to support the establishment of a proposed new framework for arbitration in Jamaica;
4. Prepare draft legislation and arbitration rules for possible implementation;
5. Make the outline drafting instructions, draft legislation and rules available to the relevant authorities;
6. Devise a lobby and related programme that is intended to secure the implementation of a new and more appropriate arbitration regime for Jamaica;
7. Undertake such collaborative and other efforts as are required to ensure that persons are adequately informed about and prepared for the best use of arbitration;
8. Devise a basis which will enable enhanced regional cooperation in the field of arbitration as well as support the implementation of new and more conducive arbitration frameworks where required within the Commonwealth Caribbean.
While the establishment of an optimal arbitration framework is being considered, the ultimate objectives of the measures being undertaken include:
1. Establishing a proposed new framework that will be able to assist the securing of social, cultural and economic development;
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2. Improving the framework for settlement of disputes more generally;
3. Improving international competiveness;
4. Assisting with the development of Jamaica and the Caribbean more generally as a preferred destination for investment and the settlement of international disputes;
5. Establishing new frontiers for professional development in the field of economic development and dispute settlement;
6. Promoting and protecting the economic and social well-being of all.
A Review Committee has now been established by the Caribbean Branch and is required to:
1. Assess the current framework for arbitration in Jamaica;
2. Assess how this framework can be best adjusted/reformed in order to better serve the interest of disputants and the economy more generally;
3. Assess how to secure and maintain best practice in arbitration as well as ensure cohesion with other aspects of the framework for settlement of disputes, including the court system;
4. Assess how arbitration can best be positioned to serve as the preferred mechanism for settlement of commercial disputes and as a basis for development as an international arbitration centre;
5. Seek to determine the resources and future action that could be required to implement the necessary policy and related activities;
6. Seek to determine what measures need to be specifically considered for implementation having regard to any attempts, if any, that are now being made at the CARICOM level to harmonise policy and implementation in the field of arbitration;
7. Determine how arbitration can best be positioned to ensure maximum benefit within the CSME as well as influence a broader regional agenda;
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8. Prepare a draft policy document and outline drafting instructions for the proposed new framework for discussion and ultimate presentation to the relevant authorities;
9. Prepare draft legislation and rules for discussion and ultimate presentation to the relevant authorities.
The Review Committee should be able to present a report and proposals for draft legislation to the Steering Committee of the Caribbean Branch in August 2009. This report will then be considered and amendments made where necessary before presentation to the relevant authorities in September 2009.
The following persons have now been appointed to serve as the Review Committee:
Christopher Malcolm (Chair) Stephen Shelton Maurice Stoppi Eileen Boxhill Lowel Morgan John Bassie Sherene Golding-Campbell
Dated this 23rd day of June 2009
Chartered Institute of Arbitrators – Caribbean Branch
Per: John Bassie
Chairman
ANNEX 2
ARBITRATION ACT, 1900
For Text of Act see
25
http://www.moj.gov.jm/laws/statutes/The%20Arbitration%20Act.pdf
Or
Additional Annexes
ANNEX 3
WAR CONTRIBUTION
26
The information included below will, subject to final edit, appear as the Jamaica chapter in a soon to be published completely new edition of the World Arbitration Reporter. The authors are Dr. Christopher Malcolm and Mr. Lowel Morgan.
This contribution has been made available with kind permission for purposes of this Workshop/Seminar and must not be cited or otherwise referred before publication and thereafter any reference to or citation must be accordance with accepted standards.
World Arbitration Reporter
Country Report - Jamaica
I. Introduction
A. Current status of the law on arbitration
1. Short history
The settlement of disputes without the process of national courts has long been a feature of the Jamaican society. This reflects a throwback to the African ancestry of the majority as well as the impact of colonialism.13
The Maroon communities, which were started by runaway slaves of African birth or descent, still retain a community based system for settlement of disputes which involves the intervention of neutral umpires or a Community Council.
In the Maroon setting, formal arbitration, relying on established
13 Jamaica was first colonised by the Spanish from 1494-1655 and subsequently by the British from 1655-1962.
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national laws and procedural norms, some of which would have gained international notoriety, is not practiced. Nevertheless, the Maroon system includes a mechanism for disputants to present their case to a Tribunal, howsoever called, who will then make a binding determination on the merits.
At the national level, colonialism had introduced aspects of the legal system, including specific mechanisms for settlement of disputes, which obtained in Britain. These mechanisms now include formal arbitration under the Jamaican Arbitration Act of 1900, which was modelled on the English Arbitration Act of 1889.
Since its enactment, the Jamaican Arbitration Act has been in force without any significant amendment.14 It is limited in scope and domestic arbitration has had to rely on a number of international rules, such as the ICC Rules and the UNCITRAL Rules.
Notwithstanding its limitations, a significant number of awards have been made under the Arbitration Act and each is treated as a judgement of the court.15 This contrasts with awards made without reference to the Act which are not so considered and have to be enforced, if not voluntarily complied with, by common law suits for breach of contract.
2. Law in force and future projects
The Arbitration Act applies to arbitration under any law passed before or after its commencement, except where it is inconsistent with the law regulating the arbitration or with any rules or procedure authorized or recognized by that law.16
14 The Arbitration Act had minor revisions in 1969 and again in 1973 but has not been updated since. 15 See Arbitration Act, s 13.16 Ibid, s 24.
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The Act is outdated and the Ministry of Justice has indicated an intention to reform the existing framework. It is anticipated that any new arrangement will also include specific provisions for international arbitration.
3. Distinction between national and international arbitration
The Arbitration Act regulates domestic arbitration and does not now include any specific provisions for international arbitration.
Arbitration in Jamaica is primarily concerned with domestic construction disputes and the jurisdiction is not yet recognised for international arbitration.
In practice, domestic arbitration is considered to include cases where the parties are Jamaican and where the contract giving rise to the dispute is located in Jamaica. Whereas international arbitration is considered to include cases where there is no connection to Jamaica other than the fact that it is held in Jamaican territory.17
B. Practice of arbitration
1. Frequency of arbitration as opposed to litigation
There are no available records which would enable an objective or any real assessment of the frequency of arbitration as opposed to litigation. It appears, however, that litigation is now much more commonly relied upon for settlement of commercial and other disputes.
2. Leading arbitration institutions
The Dispute Resolution Foundation of Jamaica (DRFJ) was established 17 See MJ Stoppi Commercial Arbitration in the Caribbean: A Practical Guide (UWI Press Kingston 2001) 107.
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in 1994 with the encouragement of the use of mediation as it main objective. It has since grown in stature and now includes arbitration in its menu of possible options for the settlement of disputes.
The DRFJ has established a panel of arbitrators but has not yet become a recognised arbitration institution.
In addition, the Chartered Institute of Arbitrators has now established a Caribbean Branch in Jamaica. Like the DRFJ it has not yet cemented its place and cannot now rank as a leading arbitration institution.
Nevertheless, the Caribbean Branch has already commenced work on an ambitious reform-oriented lobby agenda. This is intended to provide guidance for policy intervention as well as implementation support for legislative and other reform efforts.
II. Jurisdiction of the arbitration tribunal
A. Arbitration agreement
1. Arbitration clause and submission agreement
An arbitration clause or agreement: evidences the consent of the parties to submit their dispute to arbitration; establishes the jurisdiction and authority of the tribunal over that of the courts; is the basic source of power for the arbitrators; establishes an obligation for the parties to arbitrate.18
18 See JDM Lew, LA Mistelis & SM Kroll Comparative International Commercial Arbitration (KLI The Hague 2003) 100.
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The Jamaican Arbitration Act speaks to a submission, which is a written agreement to submit present and future differences to arbitration that may or may not name an arbitrator.19 This submission is generally more simply referred to as an “arbitration agreement”.
Unless a contrary intention is express therein, a submission is irrevocable, except by leave of the Court or a Judge, and shall have the same effect in all respects as if it had been made by an order of Court.20
2. Essential content of the arbitration agreement
The Arbitration Act does not require that an arbitration agreement or submission contain any special or essential provisions. However, an arbitration agreement is ordinarily subject to the normal rules which govern the interpretation of contracts.
At a minimum, the agreement or submission must therefore provide a sufficient basis for a tribunal to find that the parties intended and specifically agreed to submit their dispute to arbitration.
3. Form of the arbitration agreement
There is no special formal requirement for an arbitration agreement per se. However, a submission, which is commonly referred to as the arbitration agreement, must be in writing.21
4. Incorporation of an arbitration clause contained in general terms and conditions
19 See Arbitration Act, s 2.20 Ibid, s 3.21 See Arbitration Act, s 2.
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The Arbitration Act does not provide for the incorporation of an arbitration clause contained in general terms and conditions of any contract.
However, relevant common law principles and rules of interpretation could be relied upon to determine whether incorporation is permissible in a particular case.
5. Law applicable to the interpretation of arbitration clauses
Where the parties have specifically determined that their agreement is to be regulated by a specific law then it shall apply to the interpretation of the arbitration clause or submission. Otherwise, the arbitration shall be regulated by the Arbitration Act and the more general laws of Jamaica.22
6. Binding effect of an arbitration clause on third parties
The Arbitration Act presumes that arbitration is a mechanism for resolving disputes between two parties. This conclusion is supported by several provisions under the Act, including section 7, which refers to two arbitrators where one is to be appointed by each party.
While this presumption does not represent the nature of commercial arrangements, which usually involve a host of interconnected parties joined by a chain or network of separate contracts, the arbitrator has not been conferred with specific jurisdiction to determine multiparty disputes.
22 Ibid, s 24.32
Furthermore, there is no provision under the Act which specifically enables the joinder of third party guarantors, assignees or other persons who do not have privity under the arbitration agreement.
The parties can themselves agree to involve third parties in their arbitration. However, in the absence of specific third party agreement to this end, difficulties could arise concerning: the scope of the agreement to arbitrate; the constitution of the arbitral tribunal; the jurisdiction of the arbitrator to hear the dispute; and enforcement of the award.
In any event, an award that has been improperly procured may be set aside by the Court.23 Accordingly, if it is made in favour or against a party who had no right or obligation under the arbitration agreement by an arbitrator who did not have express jurisdiction so to do the award could be successfully challenged.
While this conclusion comports with general principles of law, there is no reported Jamaican case law that has dealt with: consolidation of two or more running arbitration proceedings; admissibility of third party participation without being a Claimant or Respondent; and the prerequisites and effects of such participation if it were to be permitted.
7. Termination of an arbitration agreement by a party
Termination can be effected by: effluxion of time, where the parties specifically agree to end to their agreement to arbitrate on a particular date; satisfaction of a condition subsequent, which results in termination on the occurrence of a particular event; performance; and breach.
23 Ibid, s 12 (2). 33
While breach could result in failure or refusal to participate under a submission, it does not necessarily bring the agreement to an end as the aggrieved party may be able to rely on the terms of the agreement and then secure a reference to arbitration under an order of the court.
B. Arbitrability
1. Subjective Arbitrability
1.1 State/state enterprises
The Arbitration Act applies to arbitration where the Attorney-General on behalf of the Crown or Government of Jamaica is a party.24 However, it does not empower the Court or a Judge to order any proceedings where Her Majesty or the Attorney-General on behalf of the Crown or Government of Jamaica is a party without consent of the Attorney-General.25
The substantive effect of section 23 is that no arbitration agreement should be concluded with the State or even with state enterprises without consent of the Attorney-General. With consent, there is no prohibition, as such, against arbitration involving the State or state enterprises.
1.2 Legal entities/Artificial persons
Subject to general limitations, an artificial person or legal entity has such capacity to conclude arbitration agreements as is permitted under its articles of incorporation.
24 Ibid, s 23.25 Ibid.
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Accordingly, when dealing with an artificial person the other party must examine its incorporation documents and thereafter determine whether it is properly authorised to enter a contemplated agreement to arbitrate.
1.3 Natural persons
The law limits the capacity of mentally disordered and drunken persons as well as minors to enter contracts. Such persons are generally permitted to enter into contract for necessaries but are otherwise considered not to have the capacity to contract.
An arbitration agreement would not be considered a contract for necessaries. Therefore each party must satisfy him or herself that the other is not incapacitated as a result of mental disorder, drunkenness or minority.
Once general capacity to contract has been established, a natural person can enter any agreement to arbitrate unless it is otherwise objectionable under established law or for public policy considerations.
2. Objective Arbitrability
Arbitration cannot extend to criminal proceedings involving the Crown. This prohibition applies to references under order of the court26 as well as to references by consent of the parties.27
As is the case with contracts more generally, an agreement to arbitrate is subject to other relevant rules of law governing capacity
26 Ibid, s 14 (1).27 Ibid, s 15.
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as well as public policy considerations.
Accordingly, arbitration cannot properly extend to disputes where the underlying contract is for an illegal purpose or otherwise contrary to public policy.
C. Decision on the arbitral tribunal’s jurisdiction (“competence-competence”)
The Arbitration Act does not make any direct reference to the question of jurisdiction. This contrasts, for example, with section 30 of the English Arbitration Act of 1996, which provides that the tribunal may rule on its own substantive jurisdiction unless the parties otherwise agree.
Therefore, unless the parties specifically agree, the arbitrator does not have legal capacity to determine his or her own jurisdiction.
If a dispute arises as to jurisdiction, which the parties cannot determine by consent, the proper forum for resolution is the court in an action for breach of contract. Subject to rules of court and if the circumstances merit, the Court may then refer any question arising (other than a criminal proceeding by the crown) to arbitration.28
Furthermore, the arbitrator may at any stage of the proceedings under a reference, and shall if so directed by the Court or a Judge, state in the form of special case for the opinion of the Court any question of law arising in the course of the reference.29
28 Ibid, s 14 (1).29 Ibid s 20.
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The abovementioned section 20 of the Arbitration Act enables the arbitrator to seek the intervention of the court where the question of jurisdiction or other substantive legal issues has to be determined.
D. Enforcement of an arbitration agreement within or by court proceedings
Where court proceedings are commenced without regard for a valid agreement requiring submission to arbitration, the aggrieved party may at any time after appearance, and before delivering any pleadings or taking any other steps in the proceedings, apply to the court for a stay of proceedings.30
If the Court or a Judge is then satisfied that there is no sufficient reason why the matter should not be referred on accordance with the submission, and that the applicant was, at the time when the proceedings were commenced, and still remains, ready willing and able to do all things necessary to the proper conduct of the arbitration, he or she may make an order staying the court proceedings.31
The Jamaican courts have adopted the principle that where the parties have so agreed they should be compelled to carry out their agreement to arbitrate. Accordingly, an application to stay proceedings will be refused in only exceptional cases.
In American Home Assurance Company and Eight Others v. Edward Shoucair t/a S.N. Shoucair32 the Court of Appeal had to consider a summons that had been filed to stay arbitration proceedings while
30 Ibid, s 5.31 Ibid.32 (1993) 30 J.L.R. 12.
37
civil proceedings were on-going between the parties. The summons had been dismissed by the Supreme Court.
In dismissing the appeal, Carey, J.A., then acting President of the Court of Appeal, relying on the English decision of Lloyd v Wright,33
said:
It is, I think, important to note from this case that the matter in dispute must be the same in the arbitration proceedings as it is in the action. And as well it should be noted, that the defendant is at liberty to invoke the provisions of the Arbitration Act which allow for the action to be stayed. If this is so, then I do not accept that the mere filing of the action renders the arbitration proceedings at an end.
In Douglas Wright t/a Douglas Wright Associates v The Bank of Nova Scotia Jamaica Limited34 an application was made for an order setting aside judgment and granting a stay of further proceedings in the action on the ground that both parties had agreed to refer their dispute to arbitration. The judge relied on the learned authors of Mustill and Boyd on Commercial Arbitration (2nd edn) page 472 and said:
The circumstances which accompany an act may be looked at to see whether the act amounts to an election to give up the right to stay. Thus, an application to the Court which might otherwise amount to a step in the proceedings is deprived of this characteristic if the applicant makes it clear- by stating that his application is without prejudice to a subsequent request for stay or in simultaneously taking out a summons to stay- that he intends to insist on a reference to arbitration.
33 [1983] 2 All E.R. 970.34 (1994) 31 J.L.R. 350.
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The judge then determined that by issuing a summons to set aside the judgment and applying for a stay of proceedings in one document on the same day that execution was levied, the applicant had acted promptly and did not take any step such as to preclude it from seeking a stay of proceedings. Therefore, there was no sufficient reason why the matter should not be referred to arbitration.
In Bentley Estates Limited v. Castle Construction Limited and A. L. Richards (t/a A.L. Richards and Associates)35 the appellant had brought an action against the respondent contractors alleging breach of contract and in the alternative negligence. A clause in the contract provided for disputes to be referred to arbitration.
The trial Judge granted a stay of proceedings and there was an appeal.
The Court of Appeal held that the alleged breach was within the ambit of the arbitration clause. Accordingly, the onus was on the appellant who had failed to show that there was sufficient reason why the dispute should not have been referred to arbitration.
The approach of the Jamaican Courts has demonstrated that they are prepared to enforce valid arbitration agreements and compel resort to arbitration where this has been agreed by the parties.
III. The arbitration tribunal
A. Number and qualification of arbitrators35 (1992) 29 J.L.R. 480.
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1. Sole arbitrator or arbitral tribunal with several arbitrators
The Arbitration Act provides that reference shall be to a single arbitration unless the parties otherwise agree.36
Where there is reference to two arbitrators, they may appoint an umpire at any time within the period during which they have power to make an award.37 However, the umpire is not a third arbitrator but is instead a person appointed to hand down a decision if no consensus can be reached by the two arbitrators.38
The umpire has the same powers, duties and responsibilities as a sole arbitrator and usually sits with the arbitrators during the hearings. Nevertheless, the full authority of the umpire does not come into existence until the arbitrators give him or her written notice that they cannot reach an agreement.39
2. Qualification of the arbitrators
The Arbitration Act does not require that persons who offer to provide arbitration services should possess any specific qualification.
In practice, most persons who offer or are called upon to serve as arbitrators or umpires are qualified attorneys-at-law.
3. Status of arbitrators
36 Ibid, s 4 (a). 37 Ibid, s 4 (b). 38 See Stoppi Commercial Arbitration (n 5) 37-38, citing A Walton Russell on the Law of Arbitration (18th edn Stevens and Sons London 1970) 201-202.39 Ibid.
40
Unless the parties agree otherwise, the arbitrators or umpire acting under a submission have power to: administer oaths or take the affirmation of parties and witnesses; state a special case for the opinion of the Court; correct clerical slips in an award.40
The arbitrator or umpire is not beholden to any party and is required to act as an independent. Furthermore, he or she is subject to the jurisdiction of the Court and may be removed for misconduct.41
B. Appointment of arbitrators
Subject to the provisions of Arbitration Act and the terms of the agreement to arbitrate, the arbitrators are usually appointed by: the parties; or the institution administering the arbitration; or the court.
1. Extent of party autonomy to establish appointment procedureThe parties have the capacity to and may establish a specific or default appointment procedure in their agreement to arbitrate.
Where the parties agree a particular appointment procedure, their rights and wishes must be respected unless there is conflict with provisions of the Arbitration Act or other relevant law.
In the case of a privately appointed sole arbitrator, the parties normally exchange lists of suggested arbitrators until there is mutual agreement.
40 See Arbitration Act, s 8.41 Ibid, s 12 (1).
41
It is customary for the arbitration agreement to provide that if the parties are unable or unwilling to agree an arbitrator then one may be nominated by a recognised body or person, such as the President of the Jamaica Bar Association.
2. Procedure in absence of an agreement by the parties – Default appointing authority
In the absence of agreement by the parties, an arbitrator may be appointed by reference to any default procedure that has been established under the agreement to arbitrate. Otherwise, a party may serve the others with a written notice to appoint an arbitrator and if an appointment is not then made within seven clear days of the notice, the Court or a Judge may, on application by the person who gave the notice, appoint an arbitrator.42
The Court appointed arbitrator shall have the like powers to act in the reference, and make an award as if he or she had been appointed by consent of the parties.43
3. Effect of the refusal of one party to co-operate in the constitution of the arbitral tribunal
If any party refuses to co-operate in the constitution of the arbitral tribunal the default procedure established under section 6 (a) of the Arbitration Act can also be triggered. The appointee will then be clothed with the sanction of the Court and his or her authority is irrevocable except by leave of the Court.44
4. Circumstances and valid reasons for an arbitrator to resign
42 Ibid, s 6 (a).43 Ibid.44 See Stoppi Commercial Arbitration (n 5) 37.
42
An arbitrator should not accept an appointment to adjudicate on any issue where his or her appointment could be challenged at any stage of the proceedings on the grounds of partiality or interest or where there is any other factor that could undermine his or her capacity to be fair.
Having been appointed, an arbitrator should resign if the circumstances indicate that any award made could be successfully challenged for the reasons set out above.
An arbitrator should also resign if: unable to proceed with reasonable dispatch; unwilling to hear evidence that is being properly presented; he or she develops an improper relationship with any party or a party representative; or accepts and improper gift from any party or their representatives.45
C. Challenge and replacement of arbitrators
1. Grounds, procedure and deadlines for challenging an arbitrator
Where an arbitrator is guilty of misconduct, the Court may remove him or her.46 Besides this generic provision, the Arbitration Act does not include any other provision which could be considered when dealing with challenge or removal of an arbitrator. Nor does the Act include any specific procedure or deadlines for challenge.
The Act does establish, however, that a Court appointed arbitrator becomes an officer of the Court. As such, the Court may of its own motion or on application enquire into his or her conduct and may then apply sanctions against him or her, including removal, if the
45 Ibid.46 Ibid s 12 (1).
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circumstances merit.47
In practice, an arbitrator may be challenged and could be removed at any time before, during or after an appointment where there is evidence of: interest; misconduct; bribery; failure to be impartial or honest.48
2. Procedure for appointing a new arbitrator
If an appointed arbitrator is incapable as a result of a successful challenge, unless the submission specifically prevents this happening, the parties are liberty to agree and then appoint another arbitrator.49
Where the parties cannot agree, if the submission permits, any party may serve on the others a notice to appoint, which if not complied with within seven days will enable him or her to apply to the Court which will then be able to sanction the appointment of a new arbitrator.50
IV. The arbitration procedure
A. General principles
1. Extent of party autonomy to determine the arbitral procedure
Arbitration may commence by references under court orders.51
47 Ibid, s 16 (1).48 See Stoppi Commercial Arbitration (n 5) 37.49 See Arbitration Act, s 6. 50 Ibid. 51Ibid, ss 14 & 15
44
However, they usually arise under written agreements to submit present or future disputes to arbitration.
The parties have the capacity to determine the scope of their submission. However, if they do not express a contrary intention then they are bound by the statutory provisions contained in section 4 of the Arbitration Act.52
Subject to the parameters of national laws, the doctrine of fundamental freedom of contract prevails. Accordingly, the parties have general autonomy to determine the rules to be applied as well as the procedure to be adopted in their arbitration.
2. Basic procedural principles or mandatory rules to be applied by the arbitral tribunal
The Arbitration Act does not establish any procedural principles or mandatory rules to be applied by the tribunal. However, at the preliminary stage, the arbitrator will seek to: determine questions related to the jurisdiction of the tribunal; fix timelines for the delivery of points of claim and responses; provide guidelines concerning list of documents and their discovery; agree figures and facts where possible; determine the number of witness, including experts, that will be allowed to participate in the proceedings.
The overriding objective is to ensure that the proceedings are fair and equitable. Furthermore, the arbitrator will be guided by the now established principle that justice should not only be done but should manifestly appear to have been done.53
52 Ibid, s 4.53 See R v Sussex Justices, Ex parte McCarty [1924] 1 KB 256.
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Thus, directions should, as far as possible, be issued on the basis on consensus. If this is not possible, then they should be based on logic and after having given the parties every possible opportunity to present their conflicting views.
In cases of extreme difficulty or where the circumstances suggest that this approach would assist the overriding objective, the arbitrator should seek the opinion of the Court on a case stated.
Where the hearing is concerned, each party must have: due notice of place and time; reasonable opportunity to be present during the hearing with advisors and witnesses; reasonable opportunity to present evidence and arguments in support of case; reasonable opportunity for cross-examination of witnesses and to present a rebuttal.
3. Oral hearing or proceeding on basis of written documents
The Arbitration Act does not prescribe any requirement for oral or written documents. However, the proceeding may include oral as well as written evidence and conduct will be influenced by: the circumstances of the case; agreement of the parties; and control of the arbitrator.
4. Power of the tribunal (in particular the chairman) to issue procedural orders
The Arbitration Act does not confer any special power on the tribunal to issue procedural orders. However, in taking control of the proceedings the arbitrator give such directions, including procedural orders, as are necessary to ensure the fair and equitable conduct of the proceedings.
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5. Distinction of matters of substance and matters of procedure
The Arbitration Act does not establish or include a distinction between matters of substance and matters of procedure.
In practice, substantive matters are considered to be technical matters relating to the organisation and conduct of the proceedings while substantive matters influence the outcome of the case.
6. Persons able to represent a party in arbitration proceedings
The Arbitration Act does not delimit a category or persons who are able to represent a party in arbitration proceedings. However, the usual party representatives are qualified attorneys-at-law.
B. Place of arbitration
1. Determination of the place of arbitration in absence of an agreement by the parties
The Arbitration Act does not include any specific requirement concerning how the place or seat of arbitration is to be determined.
Nevertheless, this may be determined by: agreement of the parties; any arbitral or other institution or person vested with power granted by the parties to determine the seat; the arbitral tribunal, if so authorised by the parties or where general provisions in the agreement of the parties and all the relevant circumstances enable them so to do.
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A determination by the tribunal without the unequivocal and express intention of the parties could be subject to challenge. In exercising this option, the tribunal must therefore ensure that the circumstances justify the selection.
2. Importance and legal effect of place (seat) of the arbitration
The place of the arbitration is its judicial seat. It has significant implications for the applicable law as well as the jurisdiction of the tribunal more generally, especially where the parties have not made an express choice of law for any aspect of their arbitration.
C. Submissions, deadlines and default
1. Contents and form of submissions
The Arbitration Act does not include any provisions as to the content and form of submissions.
However, the terms of reference and general approach of the tribunal will usually establish whether written or oral submissions will be accepted. The tribunal might also then establish the required scope of submissions.
Over time, written submissions, as directed by the tribunal, have become more common and this practice is followed almost exclusively in voluminous and complex matters.
2. Legal deadlines (provided by law or set by the tribunal) and effect of non-compliance
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The Arbitration Act does not establish any deadlines for submissions. Nor does it grant any specific power to an arbitrator to impose deadlines or sanctions for non-compliance with an established deadline.
However, the arbitrator will at the outset seek to establish deadlines and possible sanctions for non-compliance which are mutually agreed by the parties. The arbitrator might also issue peremptory orders which are not consensual concerning deadlines and sanctions to be applied where there is default.
The usual sanction often renders a defaulting party liable for extra costs incurred or further actions to be taken as a result of non-compliance.
3. Statutory requirements as to notifications during an arbitration
The Arbitration Act does not include any statutory requirement for notifications as to deadlines or impending sanctions for non-compliance with established deadlines.
4. Effect of the insolvency of a party
The Arbitration Act does not include any provision concerning insolvency of a party.
Where, however, a provisional or absolute order in bankruptcy is made against a party to arbitration he or she could be found guilty of a criminal offence if he or she does not deliver up to the trustee or as directed all books, documents, papers and writings, in his or her custody or under his or her control, which relate to his or her
49
property or affairs.54
While this provision does not establish a modus operandi, as such, in these circumstances, the best approach would be to seek the direction of the Court. It could then order a stay or permit continuation of the arbitration.
Where the insolvent party is a company and a winding up order has been made or provisional liquidator appointed, no action or proceeding shall be continued or commenced against the company except by leave of the Court and subject to such terms as the Court may impose.55
While this provision does not speak directly to arbitration, in these circumstances, the best approach would be to seek the direction of the Court. It could then order a stay or permit continuation of the arbitration.
D. Facts and evidence: general
The evidence of parties and of witnesses shall be given under oath or affirmation.56
1. Burden of proof
Jamaica is a common law jurisdiction and legal proceedings are adversarial in nature. Under this system of law, he or she who alleges must prove. Accordingly, the burden of proof in relation to any issue
54 See Bankruptcy Act, s 177 (c). 55 See Companies Act, s 229.56 Ibid, s 4 (f) & (g).
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rests with the party who raises it.
2. Standard of proof
Arbitration is founded on a contract between or among parties. As such, it is considered to be a civil proceeding where the required standard of proof is on a balance of probabilities.
3. Power of the tribunal to determine the admissibility and weight of the evidence
The Arbitration Act specifically provides that where a reference has been made under order of the Court or a Judge, the arbitrator is deemed an officer of the Court and subject to any special direction of the Court or Judge he or she has authority to conduct the reference in such manner as may be prescribed by rules of court.57
Whereas a submission does not specifically confer officer of the Court status on an arbitrator, where there has been a submission he or she is nevertheless still considered to be bound by rules of evidence which apply in the courts of law.58
The general principles concerning the approach to evidence are included in the Supreme Court of Jamaica Civil Procedure Rules 2002 (CPR). These rules are buttressed by common law interpretations and other guidance that may be found in relevant case law.
The rules enable the arbitrator to give appropriate directions as to: the issues on which evidence is required; the nature of the evidence that is required; and the way in which evidence is to be placed before
57 Ibid, s 16 (1).58 See Stoppi Commercial Arbitration (n 5) 92.
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the arbitrator.59
Furthermore, the arbitrator may use his or her power to exclude evidence that would otherwise be admissible60 and may also limit cross-examination.61
Insofar as weight is concerned, the arbitrator will have to determine this issue on a case by case basis and his or her own subjective assessment is critical.
The question of admissibility has important implications, including that an arbitrator who wrongfully admits evidence, which goes to the root of the question to be submitted, is guilty of misconduct and the award will be set aside.62
E. Witnesses
1. Ability of a person to act as a witness
The Arbitration does not limit the category of persons who may give evidence. However, the rules evidence, including rules related to capacity, which apply in national courts, are observed.
The basic rule is that a witness must be competent and compellable. Accordingly, a child of tender years or a person of unsound mind could, for example, be considered incompetent to act as a witness.
59 See Arbitration Act, s 29 (1).60 Ibid, s 29 (2).61 Ibid, s 29 (3).62 See Stoppi Commercial Arbitration (n 5) 93, citing IN Duncan Hudson’s Building and Engineering Contracts (Sweet & Maxwell London 1978) 235.
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The preferred option is to rely on witnesses who avail themselves without compulsion of law. However, the Court or a Judge may order a writ of subpoena ad testificandum or of subpoena duces tecum to compel the attendance of a witness whenever he or she may be in Jamaica.63
Furthermore, the Court or a Judge may also order a writ of habeas corpus ad testificandum to bring up a prisoner for examination as a witness.64
An order compelling the attendance of a witness which is made by the Court or a Judge will include such terms as to costs, or otherwise, as the Court or Judge making the order thinks just.65
In practice, an ordinary witness is required to deal with and present relevant facts that are within his or her personal knowledge or experience. Expert witnesses may opine on the facts presented based on their professional or technical experience.
Each witness must be prepared to be cross-examined on the facts or opinions that he or she presents. And any witness who wilfully or corruptly gives false evidence shall be guilty of perjury, as if the evidence had been given in open Court, and may be dealt with, prosecuted and punished accordingly.66
2. Preparation of witnesses and limits thereof
63 Arbitration Act, s 19 (1). 64 Ibid, s 19 (2).65 Ibid, s 21.66 Ibid, s 22.
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The Arbitration Act does not deal with whether or the extent to which a witness may be prepared by the party relying on him or her. Nevertheless, the usual practice involves careful assessment of potential witnesses by party representatives as well as assistance with how they should present their evidence and thereafter deal with cross-examination.
3. Admissibility of written witness statements
The Arbitration Act does not require the admission of written witness statements. However, these are usually relied upon to assist the progress of the arbitration.
The intention to admit is usually settled at a preliminary stage of the proceedings and relevant statements are then agreed and exchanged. Furthermore, it is then made clear that authors of witness statements must be prepared to be cross-examined on their content at the appropriate time.
4. Entitlement of a party to have a hearing or cross-examination of witnesses
The ultimate objective when dealing with evidence is to ensure that fairness and equality is maintained.
Each party is therefore entitled and standard practice ensures that he or she is able to cross-examine the witnesses of other parties. A party may also present rebutting evidence in support of his or her case as well as oral or documentary arguments.
F. Documents
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1. Form and kind of documents to be presented to the arbitral tribunal
Subject to any legal objection, the parties shall, in relation to the matters in dispute, produce before all books, deeds, papers, accounts, writings and documents within their possession or power which may be required or called for, and do all things which the arbitrator or umpire may require.67
2. Requirement to produce certain documents and consequences of a failure to do so
Any party to a submission may sue out a writ of subpoena ad testificandum or a writ of subpoena duces tecum in an attempt to have relevant documents available for arbitration. However, no person shall be compelled under any writ to produce any document which he or she could not be compelled to produce on the trial of an action.68
Where there has been a reference, the arbitrator is deemed an officer of the Court and is authorised to conduct the proceedings in such manner as may be prescribed by rules of court, subject to the direction of the Court or a Judge.69
The relevant rules of court permit applications for the production or discovery of relevant documents in a prescribed manner. The arbitrator may then exercise any power that could have been exercised at a case management conference and may grant the production order sought on specified terms.70
67 Ibid, s 4 (e).68 Ibid, s 9. 69 Ibid, s 16 (1).70 Supreme Court of Jamaica Civil Procedure Rules 2002, Part 11.
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Failure or refusal to comply with a production order made by an arbitrator under a reference or by the Court or a Judge on application by any party to a submission would be considered a contempt of Court for which defaulting party could be imprisoned.
3. Protection of the confidentiality of documents
The Arbitration Act does not include any special protection for documents that could be considered confidential.
If a production order is sought through the Court only those documents protected by legal privilege, such as correspondence between a party and his or her legal representative, are guaranteed protection from disclosure.
The parties may themselves agree that certain documents will not be disclosed. Furthermore, each application to the Court will be assessed on its own merits and the production order will be ordinarily limited by the question of relevance.
A fulsome Court order should also include other terms, such as sanctions to be applied where there is default, as are necessary to secure non-disclosure to uninterested third parties.
G. Experts
1. Appointment and presentation of experts by the party or the arbitral tribunal
Subject to rules of evidence concerning in particular questions of relevance and competence, each party is allowed to appoint and
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present expert evidence in support of his or her case. Nevertheless, the parties may agree to share and present evidence of the same experts and the arbitrator may limit the number of experts.
In appropriate circumstances where there is an established need for expert assistance, the tribunal could of its own motion under a submission, unless the parties object to this course of action, appoint and allow the presentation of expert witnesses.
Where there is objection or in cases where there has been a Court reference, the tribunal may seek an order of the Court or a Judge which permits the appointment of expert witnesses and also determines the scope and manner in which their evidence is to be presented.
2. Admissibility and role of expert witnesses
The main function of an expert witness is to assist the arbitrator in arriving at a just conclusion rather than to serve the best interest of the party who employs him or her. Accordingly, an astute arbitrator should guard against the slanting of evidence or opinion in favour of one party or another.
Where expert reports or opinions are used by the several parties, the arbitrator will at the preliminary stage usually encourage agreement of facts and figures in order to reduce the scope of matters in dispute during the hearing.
3. Influence of the parties upon the selection of questions to be submitted to the expert
The arbitrator is required to maintain control of the proceedings and 57
should only permit expert evidence that assists a just and equitable determination of the issues in dispute. Accordingly, while party autonomy is to be respected, no party is permitted to influence the selection of questions to be determined by an expert which have no relevance to the proceedings.
4. Independence and impartiality of the expert and the right to reject a proposed/appointed expert
An expert may be appointed by any party and his or her appointment cannot be rejected unless the agreement to arbitrate requires a mutually acceptable appointment or is otherwise an affront to arbitral process.
Nevertheless, where it is clear that the expert lacks capacity to be independent or impartial then his or her evidence could be easily undermined and if accepted could from the basis of a challenge to the award.
5. Oral examination of an expert in a hearing
Every witness, including experts, shall, subject to any legal objection, submit to be examined on oath or affirmation.71 Such evidence may be oral, documentary or real.72
H. Interim measures of protection
1. Kind of interim measures which the tribunal may order
71 See Arbitration Act, s 4 (f).72 See Stoppi Commercial Arbitration (n 5) 92. Real evidence is considered to include a site or samples of material.
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The tribunal performs a quazi-judicial function and is required to make an award which is fair, binding and capable of enforcement.
Although the Arbitration Act does not establish that interim measures that may be ordered by the tribunal, such measures may become necessary during the proceedings and will be justified as having been necessary in the interest of justice.
Such measures may include: an injunction to stop building works; an injunction to restrain the depletion of monies in a bank account; an order requiring a party to deliver up prescribed assets or documents to a third party on specified conditions.
2. Limits of the tribunal’s powers to order interim measures
The Arbitration Act does not delimit the capacity of the tribunal to order interim measures. Where such measures are contemplated, however, the tribunal should not overreach the authority included in the terms of reference or which could reasonably be justified as having been required to ensure a fair and equitable conduct of the proceedings.
Furthermore, where the tribunal has been appointed under a Court reference, the Court or a Judge could specifically direct the extent to which the tribunal may order interim measures.
3. Orders to provide security for the costs of the proceeding
The Arbitration Act does not include any specific provision concerning security for costs. However, section 4 (i) enables the arbitrator or umpire to direct how the costs of the reference is to be paid.
Where security for costs is ordered, the arbitrator or umpire will seek to justify it under section 4 (i).
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4. Attachment of assets by an order of the tribunal
The Arbitration Act does not include any provision which enables the tribunal to make an order for the attachment of assets. Assistance, in this regard, may be sought from the Court and is the preferred option.
I. Assistance by the courts
The courts can and should provide assistance to the arbitral process in appropriate circumstances.73
1. Extent of court assistance in the gathering of evidence
The Court may order a writ of subpoena ad testificandum or of subpoena duces tecum to compel the attendance of any person before an arbitrator.74 The Court may as well order a writ of habeas corpus and ad testificandum to bring up a prisoner for examination.75
By these devices, the Court is able to provide significant assistance to the arbitral process in the gathering of evidence.
2. Assistance for enforcing the attachment of assets
Every attachment or other device that is available to a successful litigant in attempts to enforce a judgement can by leave of the Court be relied upon in attempts to enforce an arbitration award.76
73 See Channel Tunnel Group v Balfour Beatty Ltd. [1983] AC 334, 336.74 See Arbitration Act, s 19 (1).75 Ibid, s 19 (2).76 Ibid, s 13.
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An award for money may be enforced through the Court by: an order seizure and sale of goods; a charging order; an order for attachment of debts; the appointment of a receiver; Judgement Summons; an order for sale of land.77
The Civil Procedure Rules also include more general provisions concerning the enforcement of judgments, which would apply to arbitration awards where enforcement is being sought through the court.78
If an enforcement order is not complied with, the Court is empowered to commit the offending party to prison or to make an order for confiscation of assets for failure to comply.79
3. Other examples of possible assistance
The arbitrator or umpire may at stage of proceedings under a reference, if so directed by the Court or a Judge, state in the form of a special case for the opinion of the Court any question of law arising in the course of the reference.80
Furthermore, the Court may and in appropriate circumstances, on the application of a party who at any stage after entering appearance and before delivering pleadings or taking any other steps, stay judicial proceedings and require settlement in accordance with their arbitration agreement.81
This function is often relied upon and has been the subject of several
77 See Supreme Court of Jamaica Civil Procedure Rules 2002, r 45 (2).78 Ibid, Parts 45-52.79 Ibid, Part 53.80 See Arbitration Act, s 20.81 Ibid, s 5.
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decisions in the Supreme Court as well as in the Court of Appeal.
The court also has power to and will in appropriate circumstances: appoint an arbitrator or umpire;82 set aside the appointment of an arbitrator or umpire;83 enlarge the time for making an award;84 remit matter for reconsideration by the arbitrators or umpire;85 remove an arbitrator;86 set aside an award;87 grant leave to permit the enforcement of an award.88
4. Power of state courts to intervene during the proceedings concerning the procedural law applied by the arbitral tribunal
Where there has been a reference, the Court or a Judge may at any stage of the proceedings give specific directions to the arbitrator and may on a case stated opine on any question of law that arises.89
More generally, in cases of extreme difficulty for the arbitrator or upon application by either side, the Court may determine points of law, including in relation to the procedural law to be applied by the tribunal.90
In these cases, the arbitrator may apply to the Court for leave to submit the question to be determined or the Court could on the request of any party order that a special case be stated for their opinion.
82 See Arbitration Act, s 6.83 Ibid, s 7. 84 Ibid, s 10.85 Ibid, s 11.86 Ibid, s 12 (1). 87 Ibid, s 12 (2).88 Ibid, s 13.89 Ibid, s 20. 90 See Stoppi Commercial Arbitration (n 5) 76.
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Access to the Court and their intervention must, in all cases, be carefully managed as the parties may use this device to unnecessarily and unfairly delay the arbitration.
V. The award
A. Types of award
1. Interim award
The arbitrator is authorised to make an interim award, unless this is expressly precluded by the submission91 or is inconsistent with the authority granted under a reference.92
2. Partial award
The arbitrator is authorised to make a partial award, unless this is expressly precluded by the submission93 or is inconsistent with the authority granted under a reference.94
3. Final award
The arbitrator is authorised to make a final award, which is binding on the parties and the persons claiming under them.95
4. Default award91 Ibid, s 8 (b).92 Ibid, s 16 (1).93 Ibid.94 Ibid, s 16 (1).95 Ibid, s 4 (h).
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The Arbitration Act does not include any provision that specifically enables an arbitrator to make a default award. However, the capacity to proceed ex parte and thereafter render an award in default is considered to be an automatic right which is necessary to protect a willing party against a reluctant or non-appearing party.96
This authority is only to be exercised in exceptional cases. Furthermore, adequate written and explicit notice must be give to the recalcitrant party and the proceeding should be justified on the basis that it was required in the interest of justice and furtherance of the arbitral process.97
5. Award on agreed terms
The parties may of their own volition or with assistance from the arbitrator agree terms of an interim, partial or final award at a preliminary or other stage of the proceedings. The arbitrator will then document the agreement and enter same as a consent order or award on agreed terms.
B. Deliberations and agreement on the award
1. Time limits for making the award
The award is to be made within three months after entering on a reference or after a party to the submission has by notice in writing called on the arbitrator to act.98
96 See Stoppi Commercial Arbitration (n 5) 71.97 Ibid. 98 Ibid, s 4 (c).
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However, time may be enlarged in writing signed by the arbitrators. In this case, the award shall be made available on or before the day when the enlarged period expires.99
If the arbitrators allow their time or extended time to expire without making an award, or indicate by notice in writing that they cannot agree, the umpire may forthwith enter on the reference in lieu of the arbitrators.100
The umpire shall then make an award within one month after the original or extended time for the award has expired or within such other period as has been enlarged in writing signed by him or her.101
The time for making an award may also be enlarged from time to time by order of the Court or a Judge, whether same has expired or not.102
2. Procedure for the decision of the arbitrators
The Arbitration Act does not prescribe a decision-making process that should be adhered to by the arbitrators and there is no judicial guidance, as such, in this area. However, the parties are free to determine the form and other procedural considerations that should be followed.
Nevertheless, the arbitrators or umpire shall make the award within three months of the reference or within such other enlarged time as shall be notified to the parties in writing.103
99 Ibid.100 See Arbitration Act, s 4 (d). 101 Ibid, s 4 (e). 102 Ibid, s 10.103 Ibid, s 4 (d).
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Furthermore, the process adopted should result in an award that is: relevant and complete; incapable of ambiguity; final and binding; capable of enforcement in the same manner as a judgment or order of the court; duly signed and witnessed.
3. Admissibility of dissenting opinions
The Arbitration Act does not deal with dissenting opinions and there is no judicial guidance in this area.
4. Signature by the arbitrators and potential failure of one arbitrator to sign
While this is not required under the Arbitration Act, the award is usually signed by the arbitrator or umpire in the presence of a witness.
Failure to sign will not incur any specific sanction. However, where there is a challenge an unsigned award, which has not been verified by a witness, could be subjected to additional scrutiny.
C. Form of the award and deposition
1. Form and minimum contents of an award
The award shall be in writing.104
104 Ibid, s 4 (c).66
2. Requirement to give reasons in the award
The Arbitration Act does not require that reasons be given in the award. However, this may be specifically required in the agreement to arbitrate or under the terms of reference that is agreed to by the arbitrator.
3. Necessity to specify place and time where and when the award was made
The Arbitration Act does not require that the arbitrator must specify the time or place where the award was made. However, this could become important where, for example, enforcement is being sought under the New York Convention in another jurisdiction and the practice is encouraged.
4. Other requirements
Once an award has been made, the arbitrator may not re-open or recall it except of the correction of clerical mistakes or errors arising from accidental slips or omissions.105 He or she will, however, remain in possession of the hearing bundles, drawings and other items of evidence, witness statements, personal notes, and transcripts of evidence.
The normal procedure thereafter is for the arbitrator to index and file away his or her notes and correspondence for a minimum of six years. He or she will also then fix a time period within which the parties may collect their submissions.
D. Applicable substantive law
105 Ibid, s 8 (1) (c).67
1. Party autonomy to choose the applicable substantive law or rules of law
The parties have the autonomy to agree the applicable substantive law and if their choice may avoid the application of Arbitration Act.106
2. Decisions according to equity or as amiable compositeur
The Arbitration Act does not permit nor does it preclude decisions according to equity or as amiable compositeur. Accordingly, the parties may require the arbitrators or umpire to determine their dispute under these principles or subject their arbitration to rules which permit this latitude.
3. Application of lex mercatoria, general principles etc.
The Arbitration Act does not permit nor does it preclude the application of lex mercatoria or general principles. Accordingly, the parties may require the arbitrators or umpire to determine their dispute in this manner or subject their arbitration to rules which permit this latitude.
4. Applicable substantive law absence a choice of law by the parties
Where there has been no express choice of law, the Arbitration Act will apply107 and a determination will be made according to: any discernable intention of the parties that is not contrary to public policy; evidence in the contract of any reasonable implication of law; most convenient place of enforcement; the considered choice of the
106 Ibid, s 24.107 Ibid.
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tribunal.
E. Settlement
1. Settlement by agreement of the parties with or without support of the arbitral tribunal
Arbitration involves proceedings between or among parties who have the autonomy to themselves settle their dispute at any stage with or without support of the tribunal.
2. "Private settlement" and its impact on the arbitral procedure
Where there has been a private settlement, the tribunal could record the agreement of the parties and enter same as a consent award. Otherwise, the proceeding should be treated as having been discontinued by the parties.
3. Form and effect of a settlement
A settlement or award on agreed terms is no different in substance than one entered after full consideration of the issues. It is more difficult, however, to challenge such an award on the basis that it was improperly obtained.
F. Costs of the arbitration
1. General allocation of the costs of the proceedings
The costs of the reference and award shall be in the discretion of the 69
arbitrators or umpire, who may direct to and by whom and in what manner those costs or any part thereof shall be paid.108
The arbitrators or umpire may also tax or settle the amount of costs to be paid or any part thereof and may award costs as between solicitor and client.109
2. Deposits or advances for costs or fees
The Arbitration Act does not include any specific provision for fees, deposits or advances. However, fees may be determined after the event on a discretionary basis and it is also possible for the arbitrators or umpire to make a binding preliminary determination as to fees and advances.110
In any event, the parties have autonomy to agree the question of fees, deposits or advances with the arbitrators or umpire. Furthermore, they may agree to proceed under ad hoc or other rules which include specific provisions for the determination of fees and advances.
3. Costs of the administration by an arbitration institution
The cost of the reference, which would include the cost of the administration, is in the discretion of the arbitrator111 unless the parties agree otherwise or the arbitration is subject to specific rules which provide how these are to be determined and paid for.
4. Arbitrators´ fees: law and practice, judicial control
108 Ibid, s 4 (i). 109 Ibid.110 Ibid, s 4 (i). 111 Ibid, s 4 (i).
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Since implementation of the Fair Competition Act, service professionals, including arbitrators, look to the market for guidance in determining their fees.
Where an appointment is made under a submission, the arbitrator is not subject to judicial control, as such, in the determination of a fee. However, the agreement could be subject to specific rules, such as ICC or LCIA, which prescribe how fees are to be determined.
If there is a breach of the fee agreement, then the Court could intervene. Furthermore, an aggrieved party who did not at the outset specifically agree a fee or the basis on which it should be determined could apply to the Court to have an ‘imposed’ fee examined for unreasonableness and a ‘proper’ fee substituted.
In instances where the arbitration has been under a Court reference, the Court or Judge will give specific directions to the arbitrator, which could include a direction as to the fee to be charged.112 To this extent, judicial control of the arbitrator’s fees can be maintained.
5. Attorneys´ fees and the winning party´s claim for reimbursement
The general rule is that costs follow the event and are usually awarded to the party who succeeds on the claim. And an award may be made as on such terms as to costs, or otherwise, as the arbitrator thinks just.113
Accordingly, the quantum as well as any specific direction as to 112 Ibid, s 16 (1).113 Ibid, s 21.
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liability and manner of payment is in the discretion of the arbitrator or umpire. He or she is also authorised to tax or settle the amount and may award costs as between solicitor and client.114
6. Time and form of the decision on costs
The award shall be made in writing within three months of the reference or such other enlarged time as shall be communicated in writing to the parties.115 A cost order will then be made and failure in this regard could result in the award being remitted by the Court.116
G. Publication of the award
There are no specific provisions under the Arbitration Act requiring publication of awards with or without consent of the parties or in any particular manner.
In practice an award is considered to have been published when the arbitrator signs the document and it is witnessed. The arbitrator will then write to the parties advising that the award has been published and invite collection against payment of fees.117
VI. Amendment and challenge of the award; liability of arbitrators
A. Amendment, correction or interpretation of the award
1. Motion to amend or correct an award
114 Ibid, 4 (i). 115 Ibid, s 4 (c).116 See Stoppi Commercial Arbitration (n 5) 130.117 Ibid, 131.
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The arbitrators or umpire have power to correct in an award any clerical mistake or error arising from any accidental slip or omission.118 And in all cases of reference to arbitration the Court or a Judge may remit the matters referred for reconsideration by the arbitrators or umpire.119
A motion to amend or correct an award is in the nature of a challenge which must disclose valid reasons for the Court to exercise its discretionary power to remit the matter for reconsideration. Where, however, the award is remitted, unless the order otherwise directs, the arbitrators or umpire must make their amended award within three months after the date of the order.120
2. Interpretation of the award by the tribunal
The Arbitration Act does not confer express authority on the tribunal to interpret their award. However, this jurisdiction is exercisable in the normal course unless the parties agree otherwise.
Furthermore, the tribunal may state an award as to the whole or part thereof in the form of a special case for the opinion of the Court.121 By this method, the tribunal may secure and thereafter provide a Court assisted interpretation of the award.
B. Appeal on the merits
1. Admissibility and procedure of an appeal on the merits
118 See Arbitration Act, s 8 (c).119 Ibid, s 11 (1). 120 Ibid, s 11 (2).121 Ibid, s 8 (b).
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The Courts will consider an appeal on the merits in appropriate circumstances.
In San Souci Limited v. VRL Services Limited,122 the Court of Appeal had to consider an appeal from an Order of Sykes J which had refused an application to set aside an Order of Reid J to VRL Services Limited (VRLS) to enforce an arbitration award against Sans Souci limited (SSL). Reid had also then refused a stay execution of the order until the final determination of the claim brought by SSL to set aside the award.
The appeal was allowed on the merits, thus preventing enforcement of the award by VRLS. This decision confirms that an award may be set aside where the circumstances merit and that an application refused in the Supreme Court could be taken on appeal to the Court of Appeal.
2. Possibility to exclude an appeal
The parties are free to agree as they will subject only to established legal prohibitions and the dictates of public policy. They are not precluded from agreeing not to appeal and award and as such may exclude this possibility when they agree to arbitrate.
C. Setting aside of the award
1. Reasons for setting aside an award
The Court may set an award aside where there has been misconduct 122 SCCA No. 108 of 2004
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by the arbitrator or umpire or if it has been improperly procured.123
In Book Traders (Caribbean) Ltd. v. Jamaica General Insurance Company Ltd.,124 an award was challenged on the basis that it was bad on the face and refusal to award interest at commercial rates was erroneous in law.
The respondent contended that the appellant had demanded and accepted the payment of the award including interest. Having heard the arguments, the trial judge dismissed the appellant’s case on a preliminary point on the basis that they were ‘approbating and reprobating.’
On appeal, the Court declined the invitation to interfere with the arbitrator’s findings and confined their decision to whether the acceptance of payment by the appellant amounted to a waiver. They concluded that the appellant was estopped by its conduct from challenging the arbitrator’s award.
They Court of Appeal confirmed that an award under the Arbitration Act results from an agreement by the parties to subject the resolution of their dispute to an arbitrator. They also affirmed that the agreement to arbitrate require the parties to accept an award which has no error on the face of it.
In National Transport Co-operative Society Ltd. v The Attorney General of Jamaica,125 the Court of Appeal had to consider an appeal from the judgment of trial judge Brooks J. He had set aside an award where there were apparent errors on the face of the record, including
123 See Arbitration Act, s 12 (2) 124 SCCA No: 128/2000, Judgement Book October-December 2002, Vol. 4. 125 SCCA No. 117/2004, Judgment delivered on June 8, 2008.
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that the arbitrators had failed to find that a Minister of Government had no power to grant exclusive licences to transport operators.
The Court of Appeal relied on the English decisions of Harbour Assurance Company v. Kansa126 and Soleimany v. Soleimany127 and determined that they will not enforce an award with its genesis in an illegal contract. Where illegality is established, the award will be set aside for misconduct.
The Court found that arbitrators would have been in a similar position to a court of law which would have been precluded by fundamental public policy from enforcing the instant contract and awarding damages. This decision is now the subject of an appeal to the Judicial Committee of the Privy Council.
In Marley and Plant Limited v. Mutual Housing Services Limited,128
and application to set aside an award was made in the Supreme Court on the basis that the arbitrator had not complied with the terms of reference. It was further contended that the arbitrator had no power to award interest and that there was an error on the face of the record.
The trial judge set aside the award on the basis that in accordance with the terms of reference the arbitrator should have made specific findings in relation to the claims. There was then an appeal to the Court of Appeal.
The Court of Appeal disagreed and stated that where parties have chosen to use arbitration the jurisdiction of the Supreme Court to set
126 [1993] 3 All E.R. 897.127 [1997] 3 All E.R. 847.128 (1988) 25 JLR. 38.
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aside award can only be exercised in well defined circumstances, where the arbitrator has committed an error in law.
Furthermore, save for an award in a special case, an arbitrator need not give any reason for the award. Findings of fact and law cannot therefore be challenged unless an error of law appears on the face of the award which can only be detected if there is a speaking award.
2. Procedure and deadlines for challenging an award
The Arbitration Act does not include any procedure to be followed or deadlines to be met where an award is being challenged.
However, an award on a submission is enforceable in the same manner as a judgment or order of the Court. Accordingly, a proper challenge must conform to time and other procedural requirements that are applicable in the Supreme Court.129 These may be found in the Supreme Court of Jamaica Civil Procedure Rules 2002.
In any event, the parties can themselves agree specific procedure and deadlines under ad hoc rules or conduct their arbitration under other rules which include specific guidelines in these areas.
3. Effect of a court decision which sets the award aside
The effects of a successful challenge differ depending on the grounds of the challenge, the relevant law and the decision of the court that dealt with it.
129 See Arbitration Act, s 2 provides that Court means the Supreme Court. 77
Where a foreign award is concerned, a decision to set it aside, in whole or in part, would only render it unenforceable in Jamaica .It could still be enforced where it was made and possibly also in other jurisdictions.
The party who won the arbitration but loses the challenge is in an unenviable position.
If the award is set aside completely on the basis that the arbitration agreement was null and void, further resort to arbitration would be wasted and while resort to litigation may be possible such action would be subject to time-limits.
Where the award is set aside for procedural defects, including for lack of due process, the arbitration agreement will usually, but not always, still be effective. Provided the claim is not time-barred, the dispute could then be re-submitted to arbitration.
4. Appeal against the court´s decision to set aside or not set aside the award
An appeal against a decision of the Supreme Court to set aside or confirm an award can be pursued in the Court of Appeal and beyond to Judicial Committee of the Privy Council.
5. Possibility of the parties to exclude, limit or expand actions for setting aside
Arbitration involves proceedings where the parties are free to establish their own procedural and other rules unless these are contrary to established law or public policy. Accordingly, they may agree to exclude, limit or expand the basis on which and award may
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be set aside.
Their agreement is enforceable by action for breach of contract. Therefore if an appeal against an award is contrary to party established time or other limitations then the Court is obliged to dismiss the application.
D. Liability of arbitrators
1. Duties and liabilities of arbitrators regarding the conduct of the proceedings
The arbitrator is required to conduct the proceedings in a manner which is fair and equitable. The two basic rules to be followed in this regard are: (a) keeping control of the proceedings; and (b) follow the law.
Upon appointment, the arbitrator takes charge and should make this fact know to the parties. He or she will then settle questions concerning jurisdiction and interlocutory procedures and will become familiar with the issues and documents to be considered.
Although arbitrators are usually chosen for their expertise, integrity and experience in a particular field and are expected to rely on their talent, they must not use their own judgement to contradict evidence presented or in substitution for evidence not presented.130
Where the arbitrator is guilty of misconduct he or she may be removed by the Court.131 Actionable misconduct could include failure
130 See Fox v PG Wellfair [1981] 19 BLR 52. 131 See Arbitration Act, s 12 (2).
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or refusal to perform as intended under a submission or a reference. And it has been clearly established that a submission appointment can be revoked with leave of the court.132
2. Possibility to restrict or exclude the arbitrators´ liability
The terms of reference under a submission or the arbitration agreement may contain express exclusion or limitation of liability for certain acts or omissions of the arbitrator.
Where there is a Court reference, this may also include restrictions or exclusion of liability for certain acts or omissions of the arbitrator.
VII. Enforcement of domestic awards
1. Requirement of a particular procedure to make an award enforceable
An award may be set aside where the arbitrator or umpire is guilty of misconduct or where it has been improperly procured.133
Accordingly, the first rule of enforcement requires that the award must have been properly procured and rendered by an arbitrator who did not misconduct him or herself.
The award shall be in writing134 and is usually signed and dated by the arbitrator in the presence of a witness who also signs. It must also have been made within three months after entering on the reference
132 Ibid, s 3.133 Ibid, s 12 (2). 134 Ibid, s 4 (c).
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or within such other enlarged time as has been agreed.135
In the final analysis, the award must be capable of enforcement in the same manner as a judgement or order of the Court.136
2. Details of such enforcement procedure
An application for leave to enforce an award, including in relation to a foreign award, is made in the Supreme Court.137 The application must conform to the requirements of Civil Procedure Rules, 2002.
Enforcement of domestic awards should only be refused where the arbitrator has committed an error in law.138 Where there is a foreign award, enforcement should only be refused where the requirements of the Arbitration (Recognition and Enforcement of Foreign Awards) Act have not been satisfied.
3. Appeal against the decision granting exequatur
Leave granted in the Supreme Court to formally recognise an award may be challenged in the Court of Appeal and beyond to the Judicial Committee of the Privy Council in meritorious cases.
4. Appeal (and procedure) if exequatur has been refused
Where leave to formally recognise an award has been refused in the
135 Ibid.136 Ibid, s 13. 137 See Arbitration Act, s 2. This section has established that the Court referred to in section 13 is the Supreme Court.138 Marley and Plant Limited v. Mutual Housing Services Limited, (1988) 25 JLR. 38.
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Supreme Court this may be challenged in the Court of Appeal and beyond to the Judicial Committee of the Privy Council in meritorious cases.
5. Procedure of enforcement
The procedure for enforcement of an award that has not been voluntarily complied with is through the process of the Court. This is subject to the mechanism established under the Civil Procedure Rules 2002.139
VIII. Foreign awards
A. Recognition and/or enforcement of foreign awards (national law)
1. Rules according to national law
Foreign awards are enforceable under section 13 of the Arbitration Act.140 Furthermore, the award shall be treated as binding on persons between whom it was made and they may rely on it by way of defence, set-off or otherwise in any legal proceedings in Jamaica.141
2. Requirements to be fulfilled by the applicant
A party who makes an application to enforce a foreign award must supply: the duly authenticated original award or a duly certified copy thereof; the original agreement with an arbitration clause, which is signed by the parties or included in an exchange of letters of telegrams, or a duly certified copy of the said agreement.142
139 See Supreme Court of Jamaica Civil Procedure Rules 2002, Parts 45-52.140 See Arbitration (Recognition and Enforcement of Foreign Awards) Act, s 4 (1). 141 Ibid, s 4 (2).142 Ibid, Sch., art IV (1).
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The award and agreement must be in English. Otherwise, the party seeking to enforce the award shall produce an English translation of these documents which have been duly certified by an official or sworn translator or by a diplomatic or consular agent.143
The applicant must also satisfy the requirements of article V of the New York Convention, which has been included in the Schedule to the Arbitration (Recognition and Enforcement of Foreign Awards) Act.
The applicant must, for example, satisfy the Court that: the subject matter of the dispute would have been capable of settlement under the laws of Jamaica; and recognition and enforcement would not be contrary to the public policy of Jamaica.144
There are no prescribed time limits. However, the applicant should act in a timely manner, if only to ensure that subsequent attempts at recovery are not frustrated by laches on his or her part that permits the respondent to whittle away assets that could be attached or otherwise called upon to satisfy the award.
3. Remedies against decisions granting or declining enforcement
The application to recognise as well as subsequent attempts to secure enforcement, if the award is not voluntarily complied with, would first be made in the Supreme Court.145
A Supreme Court order to grant or decline enforcement may be taken
143 Ibid, art IV (2). 144 Ibid, art V (2). 145 See Arbitration Act, s 2. This section has established that the Court referred to in section 13 is the Supreme Court.
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on appeal to the Court of Appeal and beyond to the Judicial Committee of the Privy Council.
B. Recognition and/or enforcement of foreign awards (conventions, treaties)
1. Specific bilateral or multilateral treaties
Jamaica is a contracting party to the New York Convention as well as the Washington (ICSID) Convention.146
Jamaica is also a party to a number of bilateral investment treaties. Each includes arbitration as a mechanism for the settlement of disputes and an aggrieved party from another signatory state may institute arbitration under ICSID.147
ICSID is a delocalised arrangement and an award there is not subject to the provisions of any particular national arbitration but is instead governed by the Regulations and Rules of the Convention.148
Nevertheless, an award rendered under ICSID is enforceable by the Supreme Court as if it were a judgement of that Court.149
ICSID also administers non-Convention arbitrations under Additional Facility Rules where the Convention does not apply. These awards are capable of enforcement under the New York Convention.
146 Jamaica ratified the New York Convention on October 8, 2002 and the Washington Convention on October 14, 1966. 147 See CP Malcolm ‘The Settlement of Foreign Investment Disputes: Distilling some of the Considerations for Jamaican Arbitration Practitioners’ 14 Carib. L.R. 23, 53.148 See Washington Convention, Chp IV, s 6.149 See The Investment Disputes Awards (Enforcement) Act, s 3 (1).
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Jamaica is a member of CARICOM and the governing Revised Treaty of Chaguaramas requires the encouragement and use of arbitration.150
Furthermore, member states should enact appropriate legislation to ensure observance of agreements to arbitrate and for recognition and enforcement of awards.151
Implementation of the New York Convention is deemed sufficient152
and to this extent Jamaica has complied with its CARICOM obligation to enact appropriate arbitration legislation.
2. Existence of a standard procedure for the enforcement of foreign awards
There is no standard procedure for the enforcement of foreign awards per se. These are enforceable by action under section 13 of the Arbitration Act and once recognised are subject to the same conditions that apply in relation to domestic awards.
3. Extent of examination and review of the award by the court
There are no reported decisions from which guidance may be sought as to the extent of examination and review that the Court will undertake.
The Court must, however, be satisfied that the award in question is foreign, it having been made outside of Jamaica.153 The award must also have been properly made in a state party to the New York Convention and must have arisen out of a relationship which would be considered commercial in Jamaica.154
150 See Revised Treaty of Chaguaramas, art 223 (1). 151 Ibid, art 223 (2). 152 Ibid, art 223 (3).153 See Arbitration (Recognition and Enforcement of Foreign Awards) Act, Sch., art I.154 Ibid, s 3 (2).
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C. Application of the New York Convention
1. Application of the New York Convention in practice
Jamaica acceded to the New York Convention on July 10, 2002 and it entered into force on October 8, 2002.155
Since then there have been no reported decisions concerning the application of the Convention.
2. Examples of decisions which do not apply the Convention correctly
There have been no reported decisions concerning the correct or incorrect application of the Convention.
IX. Appendix
A. National legislation [including TEXT]
The relevant Laws – the Arbitration Act, the Arbitration (Recognition and Enforcement of Foreign Awards) Act, the Bankruptcy Act, the Caribbean Community Act, the Companies Act, the Investment Disputes Awards (Enforcement) Act – are available at: http://www.moj.go.jm.
B. Arbitration institutions [names, addresses, websites]
155 See Malcolm ‘The Settlement of Foreign Investment Disputes’ (n 135) 52. 86
There is none really.
C. Published (and/or cited) cases / List with place of original publication
American Home Assurance Company and Eight Others v Edward Shoucair t/a S.N. Shoucair (1993) 30 J.L.R. 12.
Bentley Estates Limited v Castle Construction Limited and A. L. Richards (t/a A.L. Richards and Associates) (1992) 29 J.L.R. 480.
Book Traders (Caribbean) Ltd. v Jamaica General Insurance Company Ltd, SCCA No: 128/2000, Judgement Book October-December 2002, Vol. 4.
Channel Tunnel Group v Balfour Beatty Ltd. [1983] AC 334, 336.
Douglas Wright t/a Douglas Wright Associates v The Bank of Nova Scotia Jamaica Limited (1994) 31 J.L.R. 350.
Fox v PG Wellfair [1981] 19 BLR 52.
Harbour Assurance Company v Kansa [1993] 3 All E.R. 897.
Lloyd v Wright Lloyd v Wright [1983] 2 All E.R. 970.
Marley and Plant Limited v Mutual Housing Services Limited (1988) 25 JLR. 38.
National Transport Co-operative Society Ltd. v The Attorney General of Jamaica, SCCA No. 117/2004, Judgment delivered on June 8, 2008.
R v Sussex Justices, Ex parte McCarty [1924] 1 KB 256.
San Souci Limited v VRL Services Limited, SCCA No. 108 of 2004.
Soleimany v Soleimany [1997] 3 All E.R. 847.
D. Bibliography
87
JDM Lew, LA Mistelis & SM Kroll Comparative International Commercial Arbitration (KLI The Hague 2003)
CP Malcolm ‘The Settlement of Foreign Investment Disputes: Distilling some of the Considerations for Jamaican Arbitration Practitioners’ 14 Carib. L.R. 23
MJ Stoppi Commercial Arbitration in the Caribbean: A Practical Guide (UWI Press Kingston 2001)
Supreme Court of Jamaica Civil Procedure Rules 2002
ANNEX 4
88
ENGLISH ACT, 1996
For Text of Act see
http://www.opsi.gov.uk/Acts/acts1996/ukpga_19960023_en_1
Or
Additional Annexes
89
ANNEX 5
UNCITRAL MODEL LAW
For Text of Model Law (as amended in 2006) see
http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/07-86998_Ebook.pdf
Or
Additional Annexes
ANNEX 6
90
UNCITRAL GUIDANCE NOTES
For Text of Guidance Notes see
http://www.uncitral.org/pdf/english/texts/arbitration/arb-notes/arb-notes-e.pdf
Or
Additional Annexes
ANNEX 7
91
MORGAN PAPER
The information included here is an as yet unpublished paper of Mr. Lowel Morgan. It has been made available with his kind permission for purposes of this Workshop/Seminar and must not be cited or otherwise referred without his express consent.
A Case for Modernising the Jamaican Arbitration Statute
Introduction
Arbitration is defined as a process used by the agreement of the parties to resolve disputes. In
arbitration, disputes are resolved, with binding effect, by a person or persons acting in a judicial manner
in private, rather than by a national court of law that woul have jurisdiction but for the agreement of the
parties to exclude it. The decision of the arbitral tribunal is usually called an award.156
This procedure for resolving disputes has been accepted internationally as a viable alternative to
litigation. The trend worldwide has been to increase its use. There are encouraging signs in Jamaica that
the commercial sector would like to see this happen also. A major problem however is the state of the
law. The principal arbitration statute in Jamaica is more than 100 years old. It is the Arbitration Act 1900
which is modelled off the United Kingdom (UK) Arbitration Act, 1889.
Since that time, arbitration law has seen many far-reaching developments. Of particular note is
the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International
156 HALSBURY’S Laws of England, Fourth Edition Reissue Volume 2 (3) p.2 para. 192
Commercial Arbitration 1985 which was amended in 2006 (‘the Model Law’). Over fifty-five countries
have enacted legislation based on the Model Law. 157
The UK itself has enacted the Arbitration Acts 1889 to 1934, the Arbitration Act 1950, and the
Arbitration Act 1975 (which was enacted to give effect to the Convention on the Recognition and
Enforcement of Foreign Arbitral Awards (New York Convention 1958) (‘the New York Convention’), the
Arbitration Act 1979 and the Arbitration Act 1996.158 By contrast, the Jamaican Arbitration Act remains
substantially as it was enacted in 1900 as there have been no significant amendments to the statute.
One commentator has described the Act as being very basic, although it deals with the most
fundamental aspects of arbitration.159
To compensate for some of the limitations in the law, domestic arbitration practice relies on a
number of international rules, such as the International Chamber of Commerce (ICC) Arbitration Rules
and the UNCITRAL Arbitration Rules, as a matter of course160 and the common law. These Rules
however, are not incorporated into domestic law and therefore do not have the force of law. One
important exception is the New York Convention, to which Jamaica acceded on July 10, 2002, the
provisions of which are contained in the Arbitration (Recognition and Enforcement of Foreign Awards)
Act, 2001.
Fortunately, the Jamaican courts have taken a deferential approach to the application of the
1900 Act and have brought a modern interpretation to the Act. This is clear when one examines the
courts’ treatment of applications under the core provisions of the Act, namely, sections 5, 12(2) and 13. 157 http://www.uncitral.org/uncitral/en/about/origin.html158 Keren Tweeddale & Andrew Tweeddale, a practical approach to Arbitration Law, 1999 p. 1
159 Stephen Shelton ‘Arbitration as an Alternative Means of Dispute Resolution: An Introductory Road Map’ , Continuing Legal Education Seminar, Jamaica Bar Association (unpublished paper presented at the Norman Manley Law School on June 12, 2001) p.5160 Christopher P. Malcolm ‘ The Settlement of Foreign Investment Disputes: Distilling Some of the Considerations for Jamaican Arbitration Practitioners’, Caribbean Law Review 2004 p.25
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The courts’ approach however cannot cure the inherent limitations of the Act and in any event, such
important matters should not be left to the discretion of judges.
There is therefore urgent need to update and modernise the Jamaican Arbitration Act. This will
have enormous benefits for the domestic and hopefully, international arbitration practice in Jamaica.
Modernisation alone will not be enough. Other steps including programmes to sensitise the public and
to train arbitrators will also be critical.
In this paper I will:
a. examine the approach of the Jamaican courts to the application of the Act;
b. discuss some encouraging developments on the Jamaican arbitration landscape;
c. look at three possible models for a new Jamaican statute;
d. suggest which model would be most appropriate;
e. look at the benefits of modernisation; and
f. suggest a way forward.
The Jamaican Arbitration Act, 1900
The Courts’ Approach
The courts have an inherent jurisdiction to stay legal proceedings. However, for the purposes of
arbitration reliance is placed on section 5 of the Arbitration Act.
Section 5
This section gives the court power to stay litigation where there is a valid arbitration agreement. It
provides as follows:94
‘…If any party to a submission… commences any legal proceedings in the court against any
other person to the submission….any party to such legal proceedings may…apply to the court to
stay the proceedings, and the court or a Judge thereof…may make an order staying the
proceedings.’ (emphasis mine)
In applying this section, the Jamaican courts have adopted the principle that where the parties have
agreed to, they should be compelled to carry out that agreement.
A review of a significant number of cases which have come before the courts demonstrates that
the Jamaican courts will refuse a stay of proceedings only in exceptional cases. So for example, in a well
known case in the insurance industry, American Home Assurance Company and Eight Others v. Edward
Shoucair T/A S.N. Shoucair161 the Court of Appeal had to consider a summons filed by the appellants/
defendants to stay the arbitration proceedings while civil proceedings were on going between the
parties. The summons had been dismissed by the Supreme Court.
The facts are that the respondent submitted a claim arising out of damage caused by a fire. The
appellants made no admission of liability and the respondent filed suit on the day before the limitation
period expired claiming indemnity. The appellants admitted liability after the suit was filed. The
respondent commenced arbitration proceedings under a clause in the policy which provided that any
disputes as to quantum of any loss or damage arising from destruction of the insured property, must be
referred to arbitration. The respondent subsequently filed a statement of claim in which he abandoned
the action in respect of the indemnity but maintained the action for damages for unreasonable delay in
the settlement of the claim.
161 (1993) 30 J.L.R. 1295
The appellants contended that where a party has filed a writ in breach of an arbitration clause
and the subject matter before the arbitrator is the same as that before the court, the party has thereby
chosen to place the matter before the court which, being the overriding authority, must proceed to
adjudicate upon the matter in the absence of an application by the other party for a stay of the court
proceedings.
Carey, J.A., the acting President of the Court of Appeal, relying on the English decision of Lloyd v.
Wright162 opined:
‘It is, I think, important to note from this case that the matter in dispute must be the same in the
arbitration proceedings as it is in the action. And as well it should be noted, that the defendant
is at liberty to invoke the provisions of the Arbitration Act which allow for the action to be
stayed. If this is so, then I do not accept that the mere filing of the action renders the arbitration
proceedings at an end.’
Carey, J.A., also felt that it would be wholly inequitable to restrain the arbitrator from proceeding to
carry out his terms of reference under the arbitration clause unilaterally imposed by the appellants, by
process initiated at the instance of the very appellants themselves. Forte, J.A., in dismissing the
appellants’ attempt to convince the court that it being seized of the matter, should not surrender its
superior jurisdiction to the arbitrator or engage in a race with the arbitrator as to a determination of the
quantum of the indemnity for which it is liable said that:
‘ having regard to the condition stipulated in condition 18, i.e. that an award by an arbitrator is
a condition precedent to any right of action- the action cannot be proceeded with, until the
arbitrator’s award has been obtained.’
162 [1983] 2 All E.R. 97096
In another case, Douglas Wright T/A Douglas Wright Associates v. The Bank of Nova Scotia Jamaica
Limited,163 the issue involved an application for an order setting aside judgment and granting a stay of
further proceedings in the action on the ground that both parties had agreed to refer the matter to
arbitration in the event of a dispute. The judge relied on the learned authors of Mustill and Boyd on
Commercial Arbitration (2nd Edition) page 472 and said:
‘The circumstances which accompany an act may be looked at to see whether the act amounts
to an election to give up the right to stay. Thus, an application to the Court which might
otherwise amount to a step in the proceedings is deprived of this characteristic if the applicant
makes it clear- by stating that his application is without prejudice to a subsequent request for
stay or in simultaneously taking out a summons to stay- that he intends to insist on a reference
to arbitration.’
The judge accepted this as a correct statement of the law and in keeping with the authorities ruled that
the applicant by issuing a summons to set aside the judgment and applying for a stay of proceedings in
one document on the same day that execution was levied, had acted promptly and did not take any step
such as to preclude it from seeking a stay of proceedings. He said further that the dispute involved
questions of both law and fact and evidence would be needed both as to the technical terms used in the
agreement and the custom in the profession in order to construe the contract. He held that there was
no sufficient reason why the matter should not be referred to arbitration.
A similar result was arrived at in the case of Bentley Estates Limited v. Castle Construction
Limited and A. L. Richards (T/A A.L. Richards and Associates).164 Here the appellant brought an action
against the respondent contractors alleging breach of contract and in the alternative negligence. A
163 (1994) 31 J.L.R. 350164 (1992) 29 J.L.R. 480
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clause in the contract provided for disputes to be referred to arbitration. The trial Judge granted a stay
of proceedings to the respondent. The appellant appealed. The Court of Appeal held that since the
appellant had alleged a breach of contract there must be a construction of the contract and therefore
the matter was within the ambit of the arbitration clause. The court also felt that the onus lay on the
appellant to show that there was sufficient reason why the dispute should not be referred to arbitration.
Section 12 (2)
This section deals with the conduct of the arbitrator or umpire and the manner of procuring an
arbitration or award. It provides as follows:
‘Where an arbitrator or umpire has misconducted himself or an arbitration or award has been
improperly procured the court may set aside the award.’ (emphasis mine)
The court’s power to set aside the award for misconduct, includes ‘misconducting the proceedings’, in
addition to serious breaches of the nemo iudex in sua causa and the audi alteram partem maxims. These
include acting without or outside jurisdiction such as where there was no binding arbitration agreement,
where the matter in dispute fell outside the agreement, where the relief granted lay outside the
arbitrator’s powers and where he was not validly appointed.165 Parties aggrieved or dissatisfied with the
award of an arbitrator, attempt to persuade the court to set aside an award usually on the basis that
there is an error on the face of the record. This is a finding that the basis of the award is some legal
proposition which is erroneous.166
How have the Jamaican courts treated with this provision?
165 Michael Forde , Arbitration Law and Procedure, 1994 p. 23166 Honourable Irish Society v. Minister for Finance [1958] N I 170 at p.180
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In Book Traders (Caribbean) Ltd. v. Jamaica General Insurance Company Ltd.167, a challenge was made to
an arbitrator’s award on the basis that it was bad on the face of it because his refusal to award interest
at commercial rates was erroneous in law. The respondent alleged in response that the appellant had
demanded and accepted the payment of the award including interest. The trial judge dismissed the
appellant’s contention on a preliminary point on the basis that they were ‘approbating and reprobating.’
The appeal court declined the invitation to interfere with the arbitrator’s findings and confined
its decision to the issue as to whether the acceptance of the payment by the appellant amounted to a
waiver. The court concluded that the appellant was estopped because of its conduct, from challenging
the arbitrator’s award and affirmed that the nature of an award under the Arbitration Act is of a
different character as it results from an agreement by the parties to subject the resolution of their
dispute to an arbitrator and to accept any award given by him which has no error on the face of it.
More recently, the Court of Appeal was in the case of National Transport Co-operative Society
Ltd. v. The Attorney General of Jamaica168 faced with an appeal from the judgment of trial judge Brooks
J. who set aside the award of a formidable team of arbitrators169 for a number of errors on the face of
the record. The appeal court ruled that the failure of the arbitrators to find that a Minister of
Government had no power to grant exclusive licences to transport operators was an error of law.
The court relied on the English Court decisions of Harbour Assurance Company v. Kansa170 and
Soleimany v. Soleimany 171 that a court will not enforce an arbitral award having its genesis in an illegal
contract and will set it aside on the ground of misconduct. The court found that the contract was illegal
and accordingly, the arbitrators would have been in a similar position to a court of law and would be
167 Jamaica SCCA No: 128/2000, Judgement Book October- December 2002 Vol.4, 168 Jamaica SCCA No. 117/2004, Judgment delivered on June 8, 2008 169 Former Justices of Appeal Ira Rowe & Boyd Carey and Mrs. Angela Hudson Phillips Q.C.170 [1993] 3 All E.R. 897171 [1997] 3 All E.R. 847
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precluded by fundamental public policy from enforcing the contract and awarding damages. In addition,
the court found that there was ample material for the learned trial judge to conclude that the Heads of
Agreement had amended the Franchise Agreements. The arbitrators had therefore committed an act of
misconduct when they misconstrued a clause in the Heads of Agreement. These amounted to errors on
the face of the record. The decision is the subject of an appeal to Jamaica’s highest court, the Judicial
Committee of the Privy Council in the United Kingdom.172
In Marley and Plant Limited v. Mutual Housing Services Limited,173 the respondent applied to the
Supreme Court to set aside the award of the arbitrator on the ground that he did not follow one of the
terms of reference which states as follows: - (c) (he has the power) to rule on the issue set out in the
claims before him and hand down such findings as he may deem fit, based on the evidence before him.
The respondent further contended that the arbitrator had no power to award interest and that there
was an error on the face of the record. The trial judge set aside the award on the ground that in keeping
with term (c) the arbitrator ought to have made specific findings in relation to the claims.
The Court of Appeal disagreed and stated that where parties have chosen to use arbitration, the
jurisdiction of the Supreme Court to set aside an arbitration award can only be exercised in well defined
circumstances where the arbitrator has committed an error in law. Furthermore, the general law is that
save in an award in a special case, an arbitrator need not give any reason for his award. His findings of
fact and law cannot be challenged unless an error of law appears on the face of the award and such
error can only be detected if there is a speaking award.
Section 13
This section deals with the manner of enforcement of an award. The section provides as follows:
172 The Constitution of Jamaica – section 110 gives a right of appeal to Her Majesty in Council173 (1988) 25 J. L.R. 38
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‘An award on a submission may, by leave of the court or a judge, be enforced in the same
manner as a judgment or order to the same effect.’
The judge remarked that the advantages of s.13 are many but the most significant one is that once
permission is given, the award can be enforced as if it were a judgment of the Supreme Court.174
In that case, the court dismissed an application to set aside an award even though the court
found that there was a non-disclosure by the party seeking to have the judgment enforced. The judge
noted that section 13 does not state the applicable criteria when an application is being made to set
aside the permission granted to enforce an award.175 It is to be noted that a foreign award is enforceable
either by action or under this section.176
The foregoing analysis of the cases demonstrate that despite the antiquity of the Act, the courts
have not sought to control and supervise arbitrations taking place in Jamaica. Instead, the courts have
sought to provide support for the arbitration process by refusing to intervene or interfere in the process
itself, as opposed to a strict supervision of the arbitration process. The courts have adopted a minimalist
approach to arbitration and are trying to make the best use of an old Act.
Encouraging Developments
A number of encouraging developments have been taking place in Jamaica over the last few years which
show that there is a growing appreciation in the commercial sector for the need to modernise the
arbitration framework in Jamaica.
174 VRL Services limited v. Sans Souci Limited Supreme Court Judgment October- December 2004, Per Sykes J.175 VRL Services limited v. Sans Souci Limited 176 The Arbitration (Recognition. and Enforcement of Foreign Awards) Act, 2001, Section 4
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The Private Sector Organisation of Jamaica (PSOJ) which was established in 1967 is a national
organisation of, as the name suggests, private associations, companies and individuals working together
to promote a competitive and productive private sector. It seeks to influence national policy issues of a
political, social or economic nature.177 The Jamaica Chamber of Commerce (JCC) is a membership based
organisation, comprising businesses and professionals working together to build and promote a healthy
economy and to improve the quality of life in the country.178Both organisations have been persuaded by
Mr. Justice Hugh Small Q.C.179 to make an application to the Multilateral Investment Fund (MIF) of the
Inter-American Development Bank for funding to establish a Commercial ADR Centre. He is optimistic
that the application will succeed and has committed to supporting the project when it is established.
According to the Project Proposal submitted to the MIF:180
‘The ultimate long term goal is to assist the private sector in developing a system which will
provide efficient, flexible, effective and transparent settlement of disputes as they arise and
therefore help reduce the backlog of cases in the Jamaican court system through the
establishment of a modern alternative dispute resolution system that obviates the need to have
the Courts resolve the disputes.’
The establishment of the Centre and the cultivation of a culture of alternative dispute resolution of
commercial disputes are expected to benefit ‘small, medium and large businesses working in the areas
of commerce, finance, manufacturing, the service sectors and professionals in construction, accounting
177 The Private Sector Organisation of Jamaica: www.psoj.org last visited on August 2, 2008178The Jamaica Chamber of Commerce: www.jamaicachamber.org.jm179 A former cabinet Minister in Jamaica (Jamaica) and a retired High Court Judge in the Bahamas 180 Project Proposal made available by the kind courtesy of the PSOJ
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and law.’ In addition, the Jamaican business environment will become ‘more attractive to local, regional
and international firms that operate’ in the country. 181
The Dispute Resolution Foundation of Jamaica (DRFJ) was incorporated in 1994 to increase co-
operation in the management and resolution of disputes involving business, the police, courts, social
services agencies and the people, through the controlled process of mediation. The core objectives of
the DRFJ includes the establishment of methods of resolving disputes which are supplementary,
complementary or alternative to litigation, to encourage and educate the public about using ADR
techniques to handle conflicts and to explore and establish ADR techniques as methods of resolving
commercial disputes.182 Arbitration is a major service offered by the DRFJ.
In 2007, Mr. John Bassie183 (a mediator and arbitrator) and the DRFJ came together to establish a
local arm of the Chartered Institute of Arbitrators (CIArb). In March 2008, an inaugural workshop for
certification of arbitrators as Associates of the Chartered Institute of Arbitrators was held. It is felt that
there is a demand for competent and certified arbitrators supported by a credible and respected
organisation with global influence. It is hoped that a pool of local arbitrators will eventually be identified
and that programmes will be conducted to enable persons to become certified as arbitrators.
Partners for Economic Development Limited and the University College of the Caribbean will in
November 2008 jointly stage an International Commercial Arbitration Post-graduate Certificate Course.
The objective is to develop a cadre of local and regional arbitration practitioners who will become
members of the CIArb and who will be able to promote greater use of arbitration in settlement of
commercial disputes. The programme is accredited by the CIArb and will be endorsed by the DRFJ.
181 Project Proposal to the Multilateral Investment Fund to establish a commercial alternative dispute resolution centre in Jamaica182 Website www.disputeresolutionfoundation.com183 Barrister and Attorney at Law and a fellow of the Chartered Institute of Arbitrators
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Successful completion of this programme will satisfy the examination requirements for membership in
the CIArb and thereafter enable use of the designation Member of the Chartered Institute of Arbitrators
(MCIArb). It will also enable additions to the Arbitration Panel of the DRFJ and ultimately to the panels
for Caribbean Community (CARICOM) and the Organisation of Eastern Caribbean States (OECS).
Possible models for a new Jamaican statute
A piecemeal approach towards the modernisation of the statute is not recommended. The statute is old,
limited and not user- friendly. A new comprehensive Act which takes a modern and flexible approach to
arbitral procedures is proposed.184 There is also the need to introduce international arbitration
legislation as part of a modern and complete legal framework, according to international standards.185
In crafting the new statute, the logical starting point is the UNCITRAL Model Law. Indeed this has
been recognised in the Commonwealth Caribbean where an initiative has been undertaken by the
Caribbean Law institute (CLI) to introduce the UNCITRAL Model Law on a regional rules basis. It has been
painstaking, cautious and diligent. The project commenced in September 1988 in response to requests
from legal and commercial sources. The project has been undertaken out of a realization that, at this
juncture, it is desirable that Caribbean countries should embrace international arbitration. 186
UNCITRAL Model Law
The UNCITRAL Model Law has been recognised as a model for countries without modern developed law
and practice in the field of arbitration.187 This is illustrated by a review of the countries which have based
their laws on the Model Law.
184 Andrew Bartlett, ‘The Journal of the Chartered Institute of Arbitrators,’ Volume 66, Number 1, February 2000185 HEW R. Dundas, ‘ The Journal of the Chartered Institute of Arbitrators,’ Volume 73, Number 4, November 2007186 Hugh A. Rawlins, ‘Aspects of the UNCITRAL Regimes for Procurement and for International Commercial Arbitration and Government International Commercial Contracts in the Commonwealth Caribbean,’ Caribbean Law Review, June 1997 p. 214187 Lord Mustill and Stewart Boyd, Commercial Arbitration, Second Edition, 2001 Part 1 p. 7
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UNCITRAL was established by the United Nations General Assembly in 1966 (Resolution
2205(XXI) of 17 December 1966). In establishing the Commission, the General Assembly recognized that
disparities in national laws governing international trade created obstacles to the flow of trade, and it
regarded the Commission as the vehicle by which the United Nations could play a more active role in
reducing or removing these obstacles.188
The General Assembly gave the Commission the general mandate to further the progressive
harmonization and unification of the law of international trade. The Commission has since come to be
the core legal body of the United Nations system in the field of international trade law.189
The Model Law is designed to assist States in reforming and modernizing their laws on arbitral
procedure so as to take into account the particular features and needs of international commercial
arbitration. It covers all stages of the arbitral process from the arbitration agreement, the composition
and jurisdiction of the arbitral tribunal and the extent of court intervention through to the recognition
and enforcement of the arbitral award. It reflects worldwide consensus on key aspects of international
arbitration practice having been accepted by States of all regions and the different legal or economic
systems of the world.190
The Model Law was adopted by the UNCITRAL on 21 June 1985 and by the UN General Assembly
on 11 December 1985. Its presentation and content is indeed ‘a model’. ‘It commences by defining an
international arbitration and continues in a logical order through the whole processes of arbitration
down to enforcement of arbitration awards. Its language is simple and its text short.’191
188 http://www.uncitral.org/uncitral/en/about/origin.html189 http://www.uncitral.org/uncitral/en/about/origin.html190 http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/1985Model_arbitration.html191 Lord Hacking, ‘Arbitration law reform: the impact of the UNCITRAL Model Law on the English Arbitration Act 1996’, Arbitration, November 1997, p. 292
105
On July 7, 2006 UNCITRAL amended the Model Law in three important respects – general
principles concerning the interpretation of the Model Law, the form of the arbitration agreement and
interim measures. These amendments were made so that the Model Law would ‘conform to current
practices in international trade and modern means of contracting with regard to the form of the
arbitration agreement and the granting of interim measures.’192
General Provisions of the Model Law 193
The Model Law comprises thirty-six articles divided into nine chapters. The sequence of the chapters
and articles is straight forward and logical.
Chapter I with six articles sets out the General Provisions. Article 1(1) provides that the Model
Law is applicable to international commercial arbitration. Commercial is to be given a wide
interpretation.
Article 1 (3) defines the word ‘international’ as where the parties to the arbitration agreement
have, at the time when the arbitration agreement was concluded, their places of business in different
states, or one of the parties has its place of business in a state other than that of the ‘place’ of
arbitration, or a substantial part of the contract is to be performed in a state different to where one of
the parties has its place of business.
Article 2A was introduced in 2006 and sets out general principles concerning the interpretation
of the Model Law. Article 4 deals with the waiver of the right to object where a party knows that any
provision of the Model Law has not been complied with and does not object within the necessary time.
192 Resolution of the General Assembly dated December 4, 2006193 Keren and Andrew Tweeddale, ‘ a practical approach to Arbitration Law’, 1999 Chapter 19 p. 320
106
Article 5 is a critical article and provides that ‘[i]n matters governed by this Law, no court shall
intervene except where so provided by this Law.’
Chapter II has three articles and deals with the Arbitration Agreement. Article 7 was amended in
2006. It now has two optional wordings. Option 1 defines arbitration agreement as an agreement to
submit disputes to arbitration ‘which have arisen or which may arise’ between the parties in respect of a
defined legal relationship, whether contractual or not. This Option which is similar to the original article
7 requires the arbitration agreement to be in writing. The definition of ‘in writing’ has been expanded
considerably by the amendment to take into account evolving practice in international trade and
technological developments.194
Option II is simply the same definition of arbitration agreement under Option I. There is no
requirement as to form. Countries are required to select the option which best suits their needs.
Article 8 states that where an action is brought before a court in a matter which is subject to an
arbitration agreement and a party so requests, the court shall refer the dispute to arbitration unless it
finds the agreement null and void, inoperative or incapable of being performed.
Article 9 provides that it is not incompatible with the arbitration agreement for a party to
request before or during the proceedings that a court provide interim measures of protection.
Chapter III of the Model Law has six articles and deals with the composition of the arbitral
tribunal. Articles 10 & 11 deal with the composition as well as setting up of the arbitral tribunal while
Article 12 states the grounds of challenge to the arbitrator. The challenge procedure is set out in article
13.
194 Explanatory note by the UNCITRAL secretariat on the Model Law, paragraph 4107
Article 14 deals with the situation where the arbitrator becomes de jure or de facto unable to
perform his functions or fails to act without undue delay. And Article 15 deals with the appointment of
a substitute arbitrator.
Chapter IV consists of article 16 and deals with the jurisdiction of the arbitral tribunal. Article 16
is one of the cornerstones of the Model Law. It provides that the ‘arbitral tribunal may rule on its own
jurisdiction, including any objection with respect to the existence or validity of the arbitration
agreement.’
Chapter IVA comprises articles 17 to 17J and deals with interim measures and preliminary
orders. This new chapter represents the third substantive amendment made in 2006. It bears little
resemblance to the original article 17 which dealt only with the power of the arbitral tribunal to grant
interim measures.195
This new chapter, in addition to giving the arbitral tribunal the power to order interim measures, also:
a. defines interim measures;
b. sets out the conditions for granting interim measures;
c. introduces preliminary orders;
d. provides for the recognition and enforcement of interim measures;
e. provides for court-ordered interim measures.
According to the Explanatory Note by the UNCITRAL secretariat on the Model Law, paragraph 4:
‘The extensive revision of article 17 on interim measures was considered necessary in light of
the fact that such measures are increasingly relied upon in the practice of international
195 http://www.uncitral.org/uncitral/en/about/origin.html108
commercial arbitration. The revision also includes an enforcement regime for such measures in
recognition of the fact that the effectiveness of arbitration frequently depends upon the
possibility of enforcing interim measures.’
Chapter V has ten articles and deals with the conduct of arbitral proceedings. Article 18 provides
for the equal treatment of the parties and Article 19 gives the parties the right to determine the
procedure for the proceedings, subject to the provisions of the Model Law.
Articles 20 and 22 state that the parties can choose the place of arbitration and the language of
the arbitration, while Article 23 deals with the statement of claim and defence, article 24 with the
hearing and article 26 with the appointment of experts.
Chapter VI comprises six articles dealing with the making of the award and termination of
proceedings. Article 28 provides that the tribunal shall decide the dispute in accordance with the law
designated by the parties in relation to the substance of the dispute.
Article 29 provides that the decision–making of the arbitral tribunal shall be by majority or by
the presiding arbitrator unless otherwise agreed while Article 30 provides for the situation where the
dispute is settled during the arbitral proceedings.
Article 31 provides that an award should be in writing and signed by the arbitral tribunal or a
majority of them and Article 32 provides for the termination of the arbitral proceedings. This may occur
on the publication of the final award. Article 33 deals with residual powers of the arbitral tribunal after
the issue of an award.
Chapter VII consists of article 34 which deals with recourse against an award. Article 34 provides
that recourse to a court against an award can only be made by application to set aside in accordance
109
with the provisions of the article which lists the grounds on which the award may be set aside. The
grounds reflect those on which recognition and enforcement may be refused under the New York
Convention.
Chapter VIII, the final chapter, has two articles and deals with the recognition and enforcement
of awards. Article 35 provides for the enforcement of awards properly made. The award, irrespective of
where it is made, shall be recognised and enforced. There is therefore no need for reciprocity in
recognition and enforcement. Article 35 (2) deals with the conditions that are required before
enforcement will be allowed.
Article 36 sets out the grounds for refusing recognition and enforcement. These grounds are
identical to those in the New York Convention. Article 36 (1) (b) sets out other grounds on which the
award may be refused recognition or enforcement.196
In proceedings under the Model Law, unless the parties have agreed otherwise in writing:
a. the arbitral proceedings commence on the date that the request for arbitration is received
by the respondent;
b. the arbitral tribunal can make interim [and preliminary] orders for the protection of the
subject matter in dispute;
c. the arbitral tribunal may conduct the arbitration in such a manner as it deems appropriate;
d. the arbitral tribunal may determine the place of the arbitration;
e. the arbitral tribunal may determine the language of the arbitration;
f. the arbitral tribunal may seek the advice of one or more experts;
g. the award shall set out the reasons on which it is based;
196 Keren and Andrew Tweeddale, a practical approach to Arbitration Law, 1999110
h. the arbitral tribunal may order interest up to the date of the award;
i. the arbitral tribunal may order interest from the date of award until payment;
j. the arbitral tribunal may order costs; and
k. either party has 30 days within which to request a correction to or interpretation of the
award or to seek an additional award.
On application of a party, a stay of litigation must be ordered by a court for which the Model Law applies
unless the court finds that the arbitration agreement is null and void, inoperable or incapable of being
performed.197
There are no mandatory provisions in the Model Law.
The UK Arbitration Act 1996 198
The UK Arbitration Act, 1996 (the UK Act) is the second proposed model. Its format and language were
significantly influenced by the Model Law.
Section 1 of the UK Act is very important as it sets out the guiding principles of the statute.
Regard should be had to these principles in the case of doubt in the interpretation of any section of the
statute. The section merits reproduction in full.
‘1. The provisions of … Part [1 of the UK Act] are founded on the following general
principles, and shall be construed accordingly-
(a) the object of arbitration is to obtain the fair resolution of disputes by an
impartial tribunal without unnecessary delay and expense;
197 The Australian Encyclopaedia of Forms and Precedents, Third Edition, 2007198 Keren & Andrew Tweeddale, ‘a practical approach to Arbitration Law’ ,1999 Chapters 3- 18
111
(b) the parties should be free to agree how their disputes are resolved, subject only
to such safeguards as are necessary in the public interest;
(c) in matters governed by … Part [1 of the UK Act] the Court should not intervene
except as provided by … Part [1 of the UK Act].’
This section encapsulates the main advantages of arbitration proceedings over litigation.
Section 4 provides for mandatory and non-mandatory sections of the Act. The mandatory
provisions are listed in Schedule 1 to the Act ‘and have effect notwithstanding any agreement to the
contrary.’ They are:
a. sections 9-11 - stay of legal proceedings;
b. section 12 - power of the court to extend agreed time limits;
c. section 13 - application of Limitation Acts
d. section 24 - power of the court to remove arbitral tribunal
e. section 26(1) - effect of death of arbitrator
f. section 28 - liability of parties for fees and expenses of arbitrators
g. section 29 - immunity of arbitrator
h. section 31 - objection to substantive jurisdiction of tribunal
i. section 32 - determination of preliminary point of jurisdiction
j. section 33 - general duty of tribunal
k. section 37(2)- items to be treated as expenses of arbitrators;
l. section 40 - general duty of the parties
m. section 43 - securing the attendance of a witness
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n. section 56 - power to withhold an award in the case of non-
payment
o. section 60 - effectiveness of agreement for payment of costs in any event
p. section 66 - enforcement of award
q. sections 67-68 - challenging the award: substantive jurisdiction and serious irregularity
and
r. sections 70 and 71 - supplementary provisions; effect of order of court so far as relating
to those sections;
s. section 72 - saving for rights of person who takes no part in proceedings;
t. section 73 - loss of right to object;
u. section 74 - immunity of arbitral institutions, & c;
v. section 75 - charge to secure payment of solicitor’s costs.
The parties are free to exclude the non-mandatory provisions of the Act by written agreement.
Section 5 provides that an arbitration agreement must be in writing. ‘Agreement in writing’ has
a wide definition. Agreement to terminate an arbitration agreement however, need not be in writing
(section 23(4)).
Section 6 (1) defines an arbitration agreement as ‘an agreement to submit to arbitration present
or future disputes (whether they are contractual or not).’ By virtue of section 82 (1) dispute includes any
difference.
Section 7 provides that the arbitration agreement must be treated as a distinct agreement from
the substantive agreement of which it may form a part.
113
Section 9 gives the court the power to stay legal proceedings in favour of arbitration. A stay will
only be granted on application.
Section 12 deals with the power of the Court to extend time limits which are set out in
contracts, not those set out in statutes. It should be read alongside section 14 which gives the parties
the freedom to agree when arbitral proceedings are to be regarded as commenced.
Under section 13, ‘[t]he Limitation Acts apply to arbitral proceedings as they apply to legal
proceedings.’ Section 14 gives the parties the right to decide when arbitral proceedings commence.
Under section 15, the arbitral tribunal may be composed of one or more arbitrators. The parties
are free to agree on the number of arbitrators to form the arbitral tribunal and whether there is a
chairman or umpire. If there is no agreement on the number of arbitrators, the tribunal shall consist of a
sole arbitrator.
Section 29 gives the arbitrator indemnity ‘for anything done or omitted in the discharge or
purported discharge of his functions as arbitrator unless the act or omission is shown to have been in
bad faith.’ Importantly, section 74 gives an indemnity to ‘an arbitral or other institution or person
designated or requested by the parties to appoint or nominate an arbitrator.’
Section 30 provides for the arbitral tribunal to rule upon its own jurisdiction. And Section 33(1)
imposes positive duties on the tribunal to:
‘(a) act fairly and impartially as between the parties, giving each party a reasonable opportunity of
putting his case and dealing with that of his opponent; and
114
(b) adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary
delay or expense, so as to provide a fair means for the resolution of the matters falling to be
determined.’
Section 33 which is a critical section in the UK Act should be read alongside section 1(a). Section
35 states that the parties are free to agree to consolidate one arbitral proceeding with other arbitral
proceedings or to hold concurrent hearings.
The parties are given the power to choose the law to be used to determine the dispute under
section 46. If there is no choice or agreement, the tribunal must apply conflict of law rules.
Section 47 provides that the tribunal may make more than one award at different times on
different aspects of the matters to be determined.
The parties are free to agree the powers of the arbitral tribunal in respect of awarding interest
under section 49.
Section 50 allows the parties or the arbitral tribunal to apply to the court for an extension of
time for the making of the award.
Sections 59 – 65 set out a comprehensive code for awarding costs in arbitration. And Section 66
deals with the enforcement of awards. Under sub-section (1):
‘An award made by the tribunal pursuant to an arbitration agreement may, by leave of the
court, be enforced in the same manner as a judgment or order of the court to the same effect.’
Alternatively, under sub-section (2), where leave is given ‘judgment may be entered in terms of the
award.’ This alternative is useful where registration of the judgment in a foreign court is necessary to
secure enforcement in that country or for the purpose of bringing other proceedings.115
The court will not grant leave to enforce the award where it is shown that ‘the tribunal lacked
substantive jurisdiction to make the award.’ ‘Substantive jurisdiction’ is defined in section 82 by
reference to section 30 (1) (a) to (c) to mean:
‘(a) where there is a valid arbitration agreement.
(b) whether the tribunal is properly constituted, and
(c) what matters have been submitted to arbitration in accordance with the arbitration
agreement.’
Sections 67 (1) gives a party the power to challenge any award where the arbitral tribunal lacked
substantive jurisdiction to hear the matter in the first place. The arbitral tribunal’s jurisdiction can be
challenged on questions of fact and law.
Section 68 (1) provides that an arbitral tribunal’s award may be challenged by any party on the
ground that the arbitral tribunal has committed a ‘serious irregularity.’ Sub-section (2) defines serious
irregularity to mean:
‘an irregularity of one or more of the following kinds which the court considers has caused or will cause
substantial injustice to the applicant -
a. failure by the tribunal to comply with section 33 (general duty of tribunal);
b. the tribunal exceeding its powers (otherwise than by exceeding its substantive
jurisdiction: see section 67);
c. failure by the tribunal to conduct the proceedings in accordance with the procedure
agreed by the parties;
d. failure by the tribunal to deal with all the issues that were put to it;
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e. any arbitral or other institution or person vested by the parties with powers in relation
to the proceedings or the award exceeding its powers;
f. uncertainty or ambiguity as to the effect of the award;
g. the award being obtained by fraud or the award or the way in which it was procured
being contrary to public policy;
h. failure to comply with the requirements as to the form of the award; or
i. any irregularity in the conduct of the proceedings or in the award which is admitted by
the tribunal or by any arbitral or other institution or person vested by the parties with
powers in relation to the proceedings or the award.’
Section 69 gives a party the right to appeal to the court on a question of law arising out of an award
made in the proceedings, provided there is no agreement by the parties to the contrary.
Sections 85 – 98 constitute Part II of the UK Act and deal with domestic arbitration agreements,
consumer arbitration agreements, small claims arbitration in the county courts, appointment of judges
as arbitrators and statutory arbitration.
Part III of the UK Act comprises sections 99 – 104 which deal with the enforcement of Geneva
Convention awards and the recognition and enforcement of New York Convention awards.
Sections 105 – 110 make up Part IV of the Act which is the final Part. Under section 106, the
Crown can be a party to an arbitration agreement.
Comparison between the UNCITRAL Model Law and the UK Arbitration Act 1996 199
The Model Law does not have an article like section 1 of the UK Act. Aspects of section 1 of the Act are
reflected in articles 5 and 19(1) of the Model Law. Article 5 provides that ‘no court shall intervene’ in 199 Keren and Andrew Tweeddale, a practical approach to Arbitration Law, 1999 Chapter 19 p. 327 and Lord Mustill and Stewart Boyd, Commercial Arbitration, Second Edition, 2001 Part 1 p. 37
117
matters governed by the Law, except where so provided by the Law. This however, is stronger than
section 1 (c) in which ‘shall’ is replaced with ‘should.’ This was done to preserve the inherent jurisdiction
of the English Courts.200
Article 19(1) of the Model law provides: ‘[s]ubject to the provisions of this Law, the parties are
free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings.’
This is similar to section 1 (b) of the UK Act.
Section 5 of the Act requires that arbitration agreements be in writing. ‘[I]n writing is given a
wide definition. Before the 2006 amendment of article 7 of the Model Law, there was a wide difference
between the ‘in writing’ definition under the UK Act and the Model Law. This is no longer the case.
Indeed, in Option II of article 7 there is no requirement as to form of the arbitration agreement.
Section 6 of the Act defines “arbitration agreement.” This definition is similar to that in article 7
of the Model Law.
Section 7 of the Act, which deals with the separability of the arbitration agreement from the
substantive contract, reflects Article 16(1) of the Model Law.
Section 9 of the Act which deals with stay of legal proceedings follows Article 8 of the Model
Law. Under both, a Court is required to stay legal proceedings unless the arbitration agreement is found
to be ‘null and void, inoperative or incapable of being performed.’
Sections 30-32 of the Act deal with the jurisdiction of the arbitral tribunal. These sections follow
Article 16(1) of the Model Law to a large extent.
200 T. Landau, ‘ New Duties and Liabilities-Party Autonomy v Powers of the Tribunal’, IBC Conference, 4 July 1996118
Section 33 follows the Model Law in part. Section 33 (1) (a) of the Act imposes an obligation on
the arbitral tribunal to ‘act fairly and impartially as between the parties, giving each a reasonable
opportunity of putting his case and dealing with that of his opponent’. Article 18 of the Model Law
provides that “[T]he parties shall be treated with equality and each party shall be given a full
opportunity of presenting his case.” The use of the words ‘reasonable’ and ‘full’ must be noted. There
are other similar provisions in the Model Law of the UK Act.
There are some provisions of the UK Act which arise out of the peculiarity of the English law and
are therefore absent from the Model Law. These include:
section 12 - the power to extend time for commencing an
arbitration
section 21 - provisions relating to umpires;
section 23 - revocation of the arbitrator’s authority;
sections 29 and 74 - explicit immunity for arbitrators and arbitral
institutions;
section 38(8) - the power of the arbitrator to order security for
costs;
section 41(3) - the power of the arbitrator to dismiss a claim
for want of prosecution;
section 56 - the lien on the award for the arbitrator’s fees;
119
section 65 - the power of the arbitrator to impose a limit on
recoverable costs of the arbitration.
section 69 - the possibility of bringing a preliminary
question of law before the court;
Other provisions present in the UK Act but missing from the Model Law are:
sections 1(a) and 33(b) - the requirement to proceed with
dispatch;
section 1(b) - the principle of party autonomy;
section 4 - mandatory and non-mandatory
provisions;
section 28 and 64 - the liability of the parties for the fees of
the arbitrator and the limitation of those
fees to what is reasonable;
section 34(1) and (2) - disclosure of documents and evidence;
section 34(2)(g) - the power of the arbitrator to decide the
extent to which proceedings should be
inquisitorial or adversarial;
120
section 35 - consolidation of arbitrations;
section 36 - the right to legal representation;
section 38(5) - administration of oaths to witnesses;
section 39 - provisional awards;
section 40 - the duty of parties to comply with the
orders of the arbitrator and to do
everything necessary for the proper and
expeditious conduct of the proceedings;
section 47 - interim awards;
section 49 - awards of interest;
section 59 - awards of costs.
Finally, the Model Law is confined to international commercial arbitration. There is no such limitation in
the UK Act.
Arbitration in Australia 201
The Australian situation represents an interesting option for Jamaica because it operates two separate
regimes for arbitration – one for domestic disputes and the other for international disputes. Each
regime is governed by its own legislation.
201 The Australian Encyclopaedia of Forms and Precedents , Third Edition, 2007
121
Domestic Arbitration
Each of the states and territories of Australia has enacted substantially identical legislation which
regulates the arbitration of commercial matters between the years 1984 and1986. These Acts are known
collectively as the Uniform Acts.
Salient aspects of the Uniform Acts include:
a. Unless the contrary intention appears in the agreement the arbitral tribunal will consist of a
single arbitrator.
b. The parties are required to participate in such a manner that does not delay or prevent the
making of an arbitral award.
c. Unless the contrary intention appears in the arbitration agreement, where any person refuses to
attend or give evidence or to produce a document, the arbitrator, umpire or opposing party may
seek a court order that the person comply with the arbitral procedure.
d. A rebuttable presumption arises that each party has a duty to exercise due diligence in referring
a dispute to arbitration.
e. The arbitrator may conduct the proceedings in a manner that he deems fit, subject to the other
legislative provisions and the arbitration agreement itself.
f. Specifically, the arbitrator may conduct the arbitration without regard to the rules of evidence
and may choose whether to require oral evidence be given on oath.
g. Where certain preconditions are met the parties may be represented by legal practitioners.
h. The arbitrator is required to decide questions arising from the dispute according to law unless
the parties have agreed otherwise.
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i. Alternatively, the Uniform Acts allow for the arbitrator to make decisions according to notions of
general justice and fairness if this is provided for in the arbitration agreement.
j. Unless the contrary intention appears in the arbitration agreement the arbitrator may give
interim awards.
k. Unless the contrary intention appears in the arbitration agreement, the arbitrator may order
specific performance of a contract.
l. The award by the arbitrator must be in writing, signed and include a statement of the reasons
for the making of the award.
m. There is a rebuttable presumption that the arbitral award is final and binding on each of the
parties.
n. The authority of an arbitrator is irrevocable unless a contrary intention is expressed in the
arbitration agreement.
The procedure in arbitration will typically approximate that of litigation proceedings. Fast Track
Arbitration Rules were developed in response to a perceived demise in the utilisation of arbitration
procedures. In essence, Fast Track Arbitration expedites the resolution of disputes by limiting or
prescribing the time to be taken in completing each aspect of arbitral proceedings.
The courts have an important administrative jurisdiction in regard to the arbitral process. The
appropriate court may:
a. On application of a party to the arbitration agreement, issue subpoenas requiring a person to
attend for examination before an arbitrator or umpire, or to produce documents to the
arbitrator or umpire.
b. Set aside an appointment of an arbitrator and appoint a replacement.
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c. On application of a party to the arbitration agreement, remove an arbitrator or umpire where
the arbitrator or umpire is guilty of misconduct. Misconduct is defined as including corruption,
fraud, partiality, bias and a breach of the rules of natural justice.
d. Set aside an award where the arbitrator is guilty of misconduct.
e. On application of a party to the arbitration agreement, remove an arbitrator or umpire where
undue influence has been exercised in relation to the arbitrator or umpire.
f. On application of a party to the arbitration agreement, remove an arbitrator or umpire where
the arbitrator or umpire is incompetent or unsuitable to deal with the particular dispute.
g. On application of a party to the arbitration agreement, where an arbitrator or umpire has been
removed, appoint a replacement.
h. On application of a party to the arbitration agreement, where an arbitrator or umpire has been
removed, order that the arbitration agreement cease to have effect in relation to the dispute in
question.
i. Remit an award for reconsideration by an arbitrator.
j. On application of a party to the arbitration agreement, where there has been undue delay in the
arbitral proceedings, terminate the arbitration proceedings and remove it into the court.
k. On application of a party to the arbitration agreement, where the necessary consents are given,
determine any preliminary question of law where such a determination would produce
substantial savings in costs.
Appeals
Pursuant to section 28 of the Uniform Acts an award made by an arbitrator or umpire is final and
binding on the parties to the agreement unless the arbitration agreement states otherwise. Although
the court has power to review procedural directions or rulings of the arbitrator there is no general right
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of appeal to the court. The court has no general power to set aside the arbitrator’s decision for an error
appearing on the face of the record.
An appeal lies to the court only for a question of law in circumstances where all of the parties
are in agreement or the court has given leave.
Stay of proceedings
The court has a discretionary jurisdiction, on application of a party to the dispute, to order a stay of
litigation proceedings. However, the court may only order a stay where there is no sufficient reason
preventing the referral of the dispute to arbitration in accordance with the parties’ agreement and it
has been shown that the applicant was ready, willing and able to participate in the arbitration at the
time the proceedings were commenced and remains so.
Enforcement of arbitral awards
Where an award has been made pursuant to an arbitration agreement, a party may apply for leave of
the court for the award to be enforced as if it were a judgment or order of the court. If leave is granted
then the court may enter judgment in the same terms as that of the arbitral award.
International Arbitration
International arbitration is governed by the International Arbitration Act 1974 (Cth). This legislation gives
effect to the UNCITRAL Model Law. Parties may agree to exclude the operation of the UNCITRAL Model
Law, in which case the Uniform Act of the state or territory where the arbitration is held will apply.
125
Australian colonies inherited the English Arbitration Act 1697.202 The reform of the English law
on arbitration in 1979 was the catalyst for the revision of state legislation on arbitration between the
years 1984 and 1986.
Australia has adopted the Model Law only in respect of international commercial arbitration and
accordingly, English and Australian Law have departed quite significantly from each other.203
A Model for Jamaica
The main drawback with the UNCITRAL Model Law is that it was crafted to deal specifically with
international commercial arbitration. Although its provisions could be extended to cover domestic
disputes, such an exercise would be in the nature of recreating the wheel which is not desirable. In
addition, the Model Law leaves many important areas of arbitration law untouched.
Jamaica needs to modernise its statute dealing with domestic arbitration and to introduce
provisions applicable to international arbitration. The UK Act represents an attractive fusion of domestic
and international requirements.
The UK Act creates an accessible and almost complete code of conduct, embodying a consistent
vision of the arbitral process, which will in the great majority of cases take effect automatically.204
The UK Act took the existing English Law on arbitration and supplemented it with many
principles from the UNCITRAL Model Law. It radically alters the existing English Law of arbitration and at
the same time preserves many perceived benefits of English arbitration law that have developed over
centuries.205
202 Hilary Astor and Christine Chinkin, Dispute Resolution in Australia, Second Edition, 2002203 D Mark Cato, ‘Is the Australian Arbitrator Disadvantaged over his UK counterpart?’ (1998) 16 (4) The Arbitrator p. 252204 Lord Mustill and Stewart Boyd, Commercial Arbitration, Second Edition 2001205 Keren and Andrew Tweeddale, a practical approach to Arbitration Law, 1999
126
Using English legislation as a model would be in keeping with the legal tradition of Jamaica. The
fact is that the Jamaican legal system is based on the British legal system. Jamaica was colonised by
Britain in 1655 and at that time, received the English common law to the extent suitable to its situation.
Jamaica received English statute law which was in use prior to 1728.206 Jamaica remained a colony of
Britain until 1962 when it gained its Independence.
The Independence Constitution recognises a right of appeal from the court of appeal to Her
Majesty in Council. Our final court of appeal to this day remains the Judicial Committee of the UK Privy
Council.207 Judgements from the English courts are highly persuasive authorities for Jamaican courts. Our
colonial past explains why we look to English legislation whenever there is a need to update our
legislation.
In recent times, we have also modelled our new legislation off other Commonwealth
jurisdictions and, in particular Australia. This is also due to a similar jurisprudential heritage from
Britain. In this case however, the Australian model is not attractive because it comprises two separate
regimes- domestic and international which are governed by specific statutes. One comprehensive
statute would be better suited to the needs of Jamaica. In addition, the Australian statutes pre-date the
UK Act and would therefore not include some of its innovative features.
Arbitration in Australia is just one process in a well-developed inter-connected system of ADR
processes. The others are negotiation, mediation, conciliation, facilitation and expert appraisal and
determination. There are also hybrid processes, namely, early neutral evaluation, med-arb, which is a
206 C. Dennis Morrison, The Reception of English Law in Jamaica, West Indian Law Journal, October 1979, p.43207 The debate continues in Jamaica as to whether the Caribbean Court of Justice should replace the Judicial Committee of the UK Privy Council as the final appeal court for Jamaica
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combination of mediation, conciliation and arbitration and mini-trial.208 Adoption of the arbitration
process without the other processes would be short sighted and not desirable.
Another very important factor which would support the use of the UK Act as a model is that the
Act has been in force for more than ten years. In that time a body of learning would have built up
around the Act. Jamaica would be able to benefit from that learning which would assist in crafting the
Jamaican statute. It is also important to mention the Departmental Advisory Committee on Arbitration
Law (DAC) Report on the Arbitration Bill of February, 1996. The intention is not to adopt the UK Act
wholesale but to fashion a statute suitable to Jamaica and its international needs.
The UK Act is modern and innovative. It is said to provide for swift, effective and fair resolution
of disputes.209 This is a critical feature for any new statute in Jamaica.
A modern user-friendly and updated arbitration statute should minimise the court’s
involvement in the arbitration process. The UK Act provides that feature in that it uses straightforward
and logical language to explain arbitration principles and presents them in a chronological format. A
cross referencing system is used within the Act to assist both lawyers and lay persons to find other
sections of the Act relevant to the matter in dispute.210
The UK Act also has many unique and distinctive features not present in any other arbitration
statute. These include section 42 which deals with the enforcement of a peremptory order of the
arbitral tribunal, section 44 which deals with the enforcement of interim awards, section 35(1) which
deal with multi-party arbitrations and section 68(2) which defines serious irregularities. Importantly
section 33(1)(b) enables the arbitrator to adopt procedures suitable to the circumstances of the
208 Hilary Astor and Christine Chinkin, Dispute Resolution in Australia, Second Edition, 2002209 D. Mark Cato, Arbitrate don’t litigate- The Arbitration and Dispute Resolution Law Journal [1997] ADRLJ 158210 Lord Mustill and Stewart Boyd, ‘ Commercial Arbitration’
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particular case. This gives the arbitral tribunal wide discretion and the ability to avoid unnecessary delay
and expense.
The UK Act does not address the important issue of confidentiality. The position is similar in
Australia where, an expressed agreement of confidentiality is required to ensure that the proceedings
remain confidential. The High Court of Australia has ruled that arbitration is private, in that others
cannot attend, but is not confidential and the documents produced in the course of the arbitration could
be made public.211
The New Zealand Arbitration Act 1996 is unique as section 14 states:
‘ Disclosure of information relating to arbitral proceedings and awards prohibited- (1) Subject
to subsection (2), an arbitration agreement, that unless otherwise agreed by the parties, is
deemed to provide that the parties shall not publish, disclose, or communicate any information
relating to the arbitral proceedings under the agreement or to an award made in the
proceedings.’
Arbitration proceedings in New Zealand are therefore confidential.
The case law in England has developed in such a way for one to conclude that there is in fact an
implied duty of confidentiality.212 It is however recommended that the new arbitration statute in
Jamaica adopt the position taken by the New Zealand legislature. Such a clear statement would no
doubt encourage users of commercial arbitration, in particular the private sector which places great
importance on privacy and confidentiality.
211 Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10212 Hassneh Insurance Co. of Israel v Stuart J Mew [1993] 2 Lloyd’s Rep. 243, Ali Shipping Corp v Shipyard Trogir [1998] 2 All E.R. 136, Department of Economic Policy and Development of the City of Moscow v Bankers Trust Co. [2004] 4All E.R. 746 and Redfern and Hunter, ‘ Law and Practice of International Commercial Arbitration’, Fourth Edition p.29
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A modern arbitration statute would complement the efforts of the Jamaican Government in
modernising and improving the Jamaican justice system. As part of that effort, in September 2002, the
Civil Procedure Rules 2002 (CPR 2002) were introduced. CPR 2002 has brought about a revolution in the
conduct of civil litigation in the courts.213 It has had and continues to have an educative effect. It
introduced case management techniques and greater procedural flexibility. It places emphasis on the
idea that the legal costs and effort expended on a case should be proportionate to its importance and
the amount in dispute.214 The underlying spirit of the CPR 2002 is very much in accord with the UK Act.
Benefits from a modern arbitration statute
Modernising the arbitration statute would answer some of the criticisms levelled against the process in
Jamaica. These criticisms were summed up by one of Jamaica’s most brilliant and able counsel Gordon
Robinson who has stated repeatedly that he prefers a judge to an arbitrator because a judge comes free
of cost. In elaborating Robinson says:
‘Arbitration very much resembles court proceedings in that there is a case management
conference (preliminary meeting with the arbitrator) followed by an exchange of pleadings
(briefs to the arbitrator) and a formal hearing with cross examination of the witnesses,
submissions etc before the arbitrator hands down the award.’
Lawyers, he finds, have become a necessity at every arbitration and so the cost to the parties resembles
the cost of a lawsuit except, in the courts, the judge works for free. In arbitration proceedings, not only
must the lawyers be paid but also the arbitrator (who charges by the hour) and the verbatim note-taker.
In addition, the premises in which the arbitration is held must be rented. Robinson continues:
213 Andrew Bartlett, Client- Friendly Arbitration, The Journal of the Chartered Institute of Arbitrators, Volume 66, Number 1, February 2000214Supreme Court of Jamaica civil Procedure Rules 2002- The Overriding Objective
130
‘Despite the usual ‘agreement’ in the reference that the arbitrator's decision will be final, 99%
of losing lawyers find a reason to carry the arbitrator's decision into the Supreme Court to be
quashed for some technical reason. So, the parties to an arbitration do not even have the
consolation of avoiding the costs, delays and inconveniences associated with litigation as
litigation will follow arbitration as sure as night follows day.’
Modern legislation would introduce procedural flexibility and restrict the situations in which awards can
be challenged. This would no doubt save time and expense.
In Jamaica at present, the major users of arbitration are the construction and the insurance
industries. There is a tendency to use retired judges, distinguished lawyers and senior engineers as
arbitrators. Another criticism levelled by Robinson is that ‘the upside of arbitration’ which ‘is supposed
to be that the arbitrator will likely have special technical skills in the subject matter while a judge must
be taught by way of expert evidence’ is not available in Jamaica. He says that because Jamaica is very
small, most professionals will find themselves in a conflict of duty as they will be in one camp or the
other due to the shortage of expertise and the consequential unavoidable involvement with one or the
other of the parties.
A new modern arbitration statute would assist this situation as it will enable more persons to be
trained as arbitrators thereby creating a much larger pool to choose from.
An allied benefit from modernisation is that practitioners would be able to go to one
comprehensive piece of legislation instead of having to look at different instruments, for example, the
Act, the UNCITAL Arbitration Rules and the ICC Arbitration Rules in order to deal with a dispute. This
should result, over time, in the greater utilisation of arbitration as a means of resolving commercial
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disputes. It is fair to say that domestically, ignorance of the benefits and profits is a major problem
which has contributed to ambivalence towards arbitration.
Modern legislation would introduce a framework for international arbitration. This would be
welcomed in Jamaica having regard to the initiatives being pursued by the PSOJ and the JCC and the
DRFJ. This would enhance Jamaica’s chances of becoming the seat for arbitration, at the very least, in
the Commonwealth Caribbean. Maurice J. Stoppi,215 a well respected quantity surveyor and perhaps
Jamaica’s foremost arbitrator in the construction arena, thinks that the time is now right for Jamaica to
develop an international/regional system of commercial and/or political dispute settlement system.
The experience of countries like Singapore and Hong Kong has shown that having a modern
arbitration system adds to the attractiveness of countries to foreign investment. Modernisation should
also lead to the creation of new institutions offering arbitration services. This will increase the skills in
this area and hopefully provide quality jobs for Jamaicans.
Arbitration is unquestionably an attractive alternative for the resolution of commercial disputes.
Its increased use will reduce the burden on the court system. The expansion in the commercial sector
has shown up inadequacies in our court system. The commercial sector is interested in the resolution of
disputes in a timely and efficient manner. There have also been criticisms levelled at the judiciary whom
it is felt have little or no knowledge of commercial matters. The appointment of a specialist commercial
judge and a revenue judge has not solved these problems. Arbitration however would go a far way in
assisting.
Commercial contracts usually include a clause making arbitration a prerequisite to any litigation.
An ordinary arbitration clause is not a contract to oust the court’s jurisdiction and, with one
215 Author of the book , Commercial Arbitration in the Caribbean, A Practical Guide,2001132
qualification, the parties to such clauses are not thereby prevented from prosecuting their claims in
court rather than by arbitration.216
The combined effect of a modern arbitration statute and the CPR 2002 will help to create the
framework for more timely resolution of commercial disputes.
The way forward
The proposed new arbitration statute must not only be modern but must suit the needs of Jamaica both
domestically and internationally. A delicate balance must therefore be achieved. This will only be
possible if a Committee similar to the DAC is established by the Government of Jamaica to conduct a
comprehensive study of the arbitration needs and to recommend the necessary changes to the law. A
similar strategy was employed in Australia. Following the reform of the English law in 1979 a number of
State Reform Commissions were set up to examine arbitration law in Australia and to recommend the
revision of state legislation. The recommendations of the Commissions led to the passing of similar but
not identical Commercial Arbitration Acts during the period 1984 – 1986.217
The study must include the Arbitration (Recognition and Enforcement of Foreign Awards) Act
and any treaty obligations which the country may have. Of particular importance is the Caribbean
Community (CARICOM) connection. CARICOM has commenced the establishment of a single market and
economy called the CARICOM Single Market and Economy (CSME).
A programme to sensitise the public would contribute to more widespread use of arbitration
and possibly erase or at least ease the well entrenched mindset by Jamaicans that only a court can bring
about finality to legal proceedings. The tradition of resolving disputes by way of litigation in the courts of
216 Lew, Mistelis and Kroll, Comparative International Commercial Arbitration, March 2003217 Hilary Astor and Christine Chinkin, Dispute Resolution in Australia, Second Edition, 2002
133
law rather than by arbitration is very deeply rooted in the legal culture of Caribbean countries. 218 Even if
it is not possible to completely change this mindset and tradition, the availability of a modern arbitration
process would provide a very useful option to Jamaicans.
In tandem with the modernisation of the legislation, there is an urgent need to train arbitrators.
A cadre of highly qualified and experienced arbitrators must be available if Jamaica is serious about
becoming the seat of arbitration in the Caribbean.
The teaching of arbitration as a core subject in our Universities must be seen as a matter of
urgency. Lawyers should also be encouraged to develop specialist arbitration practices in order to
increase the pool of arbitrators in the short term.
A strong judicial policy favouring arbitration as in the UK219 is critical. This ought not to be
difficult as the courts already seem to be favourably disposed to arbitration. The establishment of a
specialist court would also support the process. And on an international level, there must be a
commitment to membership to other international arbitral tribunals and institutions.
Conclusion
Jamaica needs a comprehensive, modern, innovative, user-friendly arbitration statute. The UK Act has all
those features and therefore presents the best model. Adjustments would have to be made to take into
account Jamaica’s specific needs and circumstances. In addition, to ensure a successful implementation
of the process, supporting activities including widespread consultation, public education and training
would be necessary. If these are achieved, I anticipate an exciting future for arbitration in Jamaica.
218 Hugh A. Rawlins, ‘Aspects of the UNCITRAL Regimes for Procurement and for International Commercial Arbitration and Government International Commercial Contracts in the Commonwealth Caribbean ,’ Caribbean Law Review, June 1997 p. 214.
219 Fiona Trust & Holding Corporation v Privalov [2007] EWCA 20; [2007] UKHL 40134
Bibliography
1. Hilary Astor and Christine Chinkin, Dispute Resolution in Australia Second Edition, 2002
2. Andrew Bartlett, Client- Friendly Arbitration, ‘The Journal of Chartered Institute of Arbitrators’,
Volume 66, Number 1, February 2000
135
3. D. Mark Cato, ‘Arbitrate don’t litigate’- The Arbitration and Dispute Resolution Law Journal
[1997] ADRLJ 158
4. HEW R. Dundas, ‘The Journal of the Chartered Institute of Arbitrators’, Volume 73, Number 4,
November 2007
5. Lord Hacking, ‘Arbitration law reform: the impact of the UNCITRAL Model Law on the English
Arbitration Act 1996’, Arbitration, November 1997, p. 292
6. Bruce Harris, Rowan Planterose & Jonathan Tecks, The Arbitration Act 1996, A Commentary,
Fourth Edition, 2007
7. Martin Hunter and Toby Landau, The English Arbitration Act 1996 Text and notes, February 1998
8. Christopher P. Malcolm, ‘ The Settlement of Foreign Investment Disputes: Distilling Some of the
Considerations for Jamaican Arbitration Practitioners’, Caribbean Law Review 2004 p. 25
9. Robert Merkin, Arbitration Act 1996, Third Edition, 2005
10. C. Dennis Morrison, ‘The Reception of English Law in Jamaica’, West Indian Law Journal, October
1979 p. 43
11. Lord Mustill and Stewart C Boyd QC, Commercial Arbitration Second Edition, 2001 Companion
12. Hugh A. Rawlins, ‘Aspects of the UNCITRAL Regimes for Procurement and for International
Commercial Arbitration and Government International Commercial Contracts in the
Commonwealth Caribbean.’ – Caribbean Law Review, June 1997 p. 214
13. Alan Redfern and Martin Hunter with Nigel Blackaby and Constantine Partasides, Law and
Practice of International Commercial Arbitration, Fourth Edition, 2004
14. Stephen Shelton, ‘Arbitration as an Alternative Means of Dispute Resolution: An Introductory
Road Map’, Continuing Legal Education Seminar, Jamaica Bar Association (unpublished paper
presented at the Norman Manley Law School on June 12, 2001)
15. Peter Spiller, Dispute Resolution in New Zealand, 1999136
16. Ercus Stewart S.C., Arbitration: Commentary and Sources March 2003
17. M.J. Stoppi, Commercial Arbitration in the Caribbean: A Practical Guide 2001
18. Supreme Court of Jamaica Civil Procedure Rules (2002)
19. The Australian Encyclopaedia of Forms and Precedents, Third Edition, 2007
20. The Arbitration Act, 1996 (New Zealand)
21. The Uniform Acts (Australia)
22. The Arbitration Act, 1996 (UK)
23. Keren Tweeddale and Andrew Tweeddale, A Practical Approach to Arbitration Law, 1999
24. UNICTRAL MODEL LAW on International Commercial Arbitration
25. AAP Willy, Arbitration in New Zealand Second Edition, 2003
ANNEX 8
Elements that are to be considered in Drafting Instructions for the modernisation of the regime for Arbitration in Jamaica and thereafter included in supporting legislation.
1. Modernisation of the Jamaican regime for arbitration should include the implementation of revised or new legislation with adequate provision for domestic as well as international dispute settlement.
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2. The new framework should require the establishment of arbitration as a recognised professional discipline and include appropriate mechanisms for its supervision and control.
3. The new framework should also establish ethical standards for arbitration practitioners and require the implementation of a special regulatory regime.
4. The overarching structure of the new framework should be based on international best practice but must be sufficiently adapted for local circumstances, including that Jamaica intends to become an international arbitration centre.
5. The establishment of this new framework could build on the institutional/administrative arrangements which now exist under the Dispute Resolution Foundation and the Chartered Institute of Arbitrators – Caribbean Branch.
6. The new framework will also seek to build on any institutional or other arrangements that have been or are now being pursued by the PSOJ and other bodies.
7. In considering model selection, the UNCLITRAL Model Law as well as the English Arbitration Act, 1996 could provide guidance. However, the Review Committee is of the opinion that the UNCLITRAL Model Law is more suitable for adoption.
8. In designing the new framework, the following are some of the questions that will require careful consideration. The answers should determine the policy, design and detail. The content in brackets suggests outline answers as well as sources for guidance.
(a) What is the current framework for arbitration in Jamaica? [Annex 3]
(b) Is the current framework effective? [No]
(c) Can the current framework support further growth and development, including the establishment of Jamaica as a credible destination for international arbitration? [No]
(d) When is the intended outcome to be achieved? [Modernisation requires urgent attention and a new framework should now be implemented now]
(e) Who are the critical persons to be involved if the intended outcome of modernisation is to be achieved? [Policy-makers, practitioners, end-users, courts, domestic and international institutions]
(g) How will the new regime be implemented? [This will be achieved by legislation and supporting regulations.]
(h) What are the likely constitutional or other impediments? [Anticipated resistance will come from practitioners, business community, other interested service providers.
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However, the main challenge would be inadequate or lack of political support for implementation.]
(i) How will these be resolved? [Negotiation and public discourse]
(j) How will the new framework be funded? [Initial set-up costs could be funded from budgetary or other allocations. Thereafter, the recurrent expenditure will be met from this Fund as well as through user fees]
(k) How will accountability be secured? [In-built mechanisms and peer control]
(l) How will disputes/complaints be resolved? [In-built mechanisms and possible court action]
(o) How will enforcement be secured? [In-built mechanisms, possible court action]
9. Among other areas, an ideal new law should specifically include provisions dealing with:
(a) The essential content of the arbitration agreement;
(b) The form of the arbitration agreement;
(c) Incorporation of an arbitration clause contained in general terms and conditions;
(d) The law applicable to the interpretation of arbitration clauses;
(e) The effect of arbitration clauses on third parties, such as assignees and guarantors;
(f) Multiparty arbitration – joinder, constitution of the tribunal, etc;
(g) Termination of agreement by a party;
(h) Subjective and objective arbitrability;
(i) Competence-Competence;
(j) Enforcement of arbitration agreement within or by court proceedings;
(k) Number and qualification of arbitrators;
(l) Appointment of arbitrators – party autonomy, default authority;
(m) Implications of a party refusal to cooperate in the constitution of tribunal;
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(n) Circumstances and valid reasons for resignation of an arbitrator;
(o) Challenge and replacement of arbitrators;
(p) General principles as to conduct of arbitration – party autonomy to determine procedure, rules to be applied, nature of hearings, power of tribunal to make procedural orders, party representation, etc;
(q) Place of arbitration – how to be determined in absence of party agreement, importance and legal effect of seat;
(r) Submissions, deadlines and default – content and form of submissions, deadlines (set by law or determined by tribunal) and effect of non-compliance, notifications during arbitration, effect of insolvency;
(s) Facts and Evidence – burden and standard of proof, power of tribunal to determine admissibility and weight of evidence;
(t) Witnesses, documents and expert evidence;
(u) Interim measures of protection;
(v) Court assistance;
(w) The Award – type, formal requirements, applicable substantive law, consent of parties, cost, publication, amendment and challenge, liability or arbitrator, enforcement and recognition of domestic and foreign awards;
(x) Application of New York Convention.
The overriding objective will be to ensure that party autonomy is secured to the highest extent possible without undermining the legal system more generally and its obligation to serve the best interest of justice. Furthermore, if there is real intention to develop Jamaica as a credible international arbitration centre then best international practice must be observed in the design and implementation of any new law.
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ANNEX 9
PROPOSED TIMETABLE
This will be determined after further consultation.
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142
