Arbitration as a mechanism for resolving disputes has an ancient history stretching back thousands of years and was primarily based upon the principles of fairness and common sense. The origins of arbitration go back to dispute settlements in Roman law, Asia and Greece and Aristotle is reported to say an arbitrator goes to the equity of the case but a judge decides strictly with the rule of law. Philip the Second, the father of Alexander the Great, was an arbitrator who used this method to settle territorial disputes with the Southern States of Greece dated to be around 337 BC In England the use of arbitration is older than the common law system upon which English law is based and was a functioning process in use to settle commercial disputes between merchants on market days in the Middle Ages. The Guilds of London and the “The Great Twelve Livery Companies” that date back to the 14th century demonstrated that this practice was of a great importance to resolve many disagreements that were brought within their halls.
The English Courts did however perceive arbitration as a competitor to their authority and in particular as a disruption to the revenue that flowed into them as Judges were paid on the number of cases that they had to deal with. The Courts were also suspicious as to the standards being applied in these arbitrations at that time. It was not until the 20th Century that the courts began to recognise the decisions of arbitrators and the close control by the courts over arbitration was slowly diminished. The result of legislation from the Arbitration 1950 Act, the 1975 and 1979 Acts to the Arbitration 1996 Act and the cases that have been decided under the umbrella of these Acts bear witness to show arbitration to be a companion to the judiciary rather than a rival.
Commercial entities recognise that Arbitration can be expeditious where the courts and the law are slow. It is generally more cost effective where litigation is in many cases expensive. Arbitration can be simple and can go the technical aspects of the disputes that are within the domain and understanding of the parties involved, e.g. Construction and Civil Engineering disputes. The Arbitrator may, in such a dispute, even be a Civil Engineer with the knowledge and the experience of the industry that has been gained over many years and can comprehend the aspects that are in contention. Arbitration is by agreement between the parties, with the confidentiality arbitral tribunal can give, that the courts when ruling on the legal issues may not be able to provide. When the dispute is brought before a judge then his decision must be decided according to the law rather the commercial fairness of the contract between the plaintiff and defendant. It must be remembered however that in keeping with modern society it is the law which has provided Arbitration with the tools, statutes and regulations so that the parties in dispute have the confidence that their case will be resolved in an equitable manner.
The opening words under section 1 (a) of the Arbitration Act 1996 and the Arbitration (Scotland) Act 2010, states the object of Arbitration is have the fair resolution of a dispute by an impartial tribunal without delay and unnecessary expense. This is part of the principles upon which Arbitration in the United Kingdom is founded upon. In many international Arbitration arrangements England and English Law is favoured above other jurisdictions and the arbitral procedure is probably the best known in the world. England, under its legal system has shown that it is very much in favour of the arbitral process. It is because of this pro-arbitral approach that many parties to a contract decide in their Arbitration Agreements to nominate England as the seat of the arbitration and that English law is the substantive law to cover such an agreement. England has built up a valuable reputation when dealing with cases and therefore there is considerable jurisprudence in resolving conflicts with a variety of commercial contracts on the international scene and the domestic arena.
Many parties to a contract often enter into an agreement at the beginning with the optimistic belief that the contract will run well without any dispute arising and at the time accept the briefest of agreement to arbitrate. It is when a dispute does arise that a defendant may resist his obligation to arbitrate.
The courts generally where it is possible respect the autonomy of the arbitration and do not interfere with the decisions of the arbitral tribunal and would only act when called to do so by the parties to the arbitration. Most challenges to the arbitral tribunal arise when some procedural issue has been affected. The question as to the validity of the agreement or there is a challenge on the substantive jurisdiction of the tribunal, and the challenge to the award itself, (see s66, s67 & s68 of the Act)
In England case law has evolved that show the courts will go to great lengths to give effect to what is seen as an agreement to arbitrate, which is a more relaxed approach than we would be applied to the other terms within a contract. In Hobbs v Kirkland, the contract stated “16. Suitable Arbitration Clause” was held as being a suitable arbitration clause which the parties have agreed to. Similar brief arbitration clauses have been examined and upheld by the courts; see Swiss Bank v Novorissiyk Shipping, and Tritonia v South Nelson. The Scottish position is different being conservative and to interoperate the arbitration clause more strictly than is the case in England and Wales. Scottish Courts consider that the agreement must be void of any uncertainty, be clear and unambiguous.
The supporting role of the Courts under the Act fall into three main categories where the issues relate to Jurisdiction, the review of the final decisions of the tribunal or where the tribunal requires assistance during the Arbitral proceedings. During progress of the arbitration the Arbitrator under s41 (5) may require a party to comply with particular order, but the party fails to do so. The tribunal under s42 can ask the court to compel the party in default to comply with such an order, however such an order would only be raised when all avenues to resolve the issue has been exhausted. What the defaulting party must understand that as soon as the courts become involved, then what initially was a confidential dispute can be catapulted into the public domain, and where it is considered necessary the court has powers to secure the attendance of witnesses under s43 by the issue of a summons under the Civil Procedure Rules. This would further cause a disruption to the confidentiality of the arbitral proceedings.
Further powers under s44 of the Act state that apart from dealing with the making of orders to assist the arbitral process it also has the listed powers with regard to a number of legal proceedings such as the taking and securing of evidence, the sale of goods subject to the proceedings and the granting interim injunctions. Despite the broad formulation of the court’s intervening powers s44 remains strictly subject to the autonomy of the tribunal and controlled by the will of the parties. These powers are only invoked when the parties are not in agreement (s44 (1)) and echoed under subsection 5.
The tribunal’s proceedings are in generally conducted in privacy, controlled by the Arbitrator but always with the agreement of the parties. It is only when one of the parties refuses to comply with an order or a ruling will the court step in. No more so as to the enforcement of the Award. The Act regulates the award as to the form of the award s52, the place s53 the date s54 and the notification of the award s55. If the award is properly prepared and survives any challenge then the award in England and Wales automatically caries enforcement status and settlement should ensue. Unfortunately if the unsuccessful party resists in complying with the Arbitrator’s award enforcement if it is required will have to be sought from the court under s66. The award can be enforced in the same manner as a judgement of the court, however s66 not only applies where the seat of the Arbitration is in England and Wales but also where the seat is outside the jurisdiction of England and enforcement is being sought through the English courts. The English courts recognise Arbitral awards from other jurisdictions especially those jurisdictions that are signatories to the New York Convention. Monetary assets of a defaulting party can be moved from one jurisdiction to another but business operations, property and other immovable assets can not. The watchword is that a defaulting party should beware, as the possibility of having the commercial assets seized by the courts to satisfy an award is real. (See Sedelmayer v Russia)
The English courts would seek upon the evidence presented before it to support the integrity of the arbitral award. More recent events have shown this to be true and based upon the facts of the Dallah case the English Supreme Court refused to enforce a New York Convention Award. This is considered as a rare occurrence and there are only two other cases that have been reported, Irvani Irvani, and Kanoria v Guinness. The background to Dallah, was a case that looked into the existence of a valid arbitration agreement and to the names of the participants to this agreement. Dallah argued that under Article V of the New York Convention the courts had the discretion to enforce an arbitration award even where the court finds that there was no agreement to arbitrate. The Supreme Court gave little credence to this argument and decided otherwise. The judgement is an interesting development in international arbitration as while the English courts will live up to its pro-arbitration reputation it will still protect the integrity of the arbitration proceedings. More recently the Court of Appeal upheld a pro-arbitration approach in West Tankers; this was a decision to uphold a declaratory award under s66 of the Act.
Parties to a contract for what ever reasons known only unto them selves who attempt to wiggle out of the due process of the arbitral tribunal are faced with the power of the courts that are more focused on supporting the arbitration than opposing this system. Cases have been brought before the courts that have challenged a tribunal in almost every aspect of the Act, and the courts have taken a common sense approach when dealing with them. There are some differences between what can be seen as a restrictive approach in Scotland and the position in England and Wales, but it can be demonstrated that despite these difference both jurisdictions will try to uphold the commercial common sense that commercial enterprise often requires. In support of Scotland when dealing with an arbitral challenge it will often be persuaded by many of the authorities’ generated by the English courts therefore the English courts should be applauded when taking the purposive approach when deciding the validity of the arbitration agreement, the challenge to the tribunal and the enforcement of the award.

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[ 1 ]. Massey R.V. History of Arbitration and Grievance Arbitration in the United States
[ 2 ]. http://en.wikipedia.org/wiki/Worshipful_Company_of_Mercers
[ 3 ]. http://www.legislation.gov.uk/
[ 4 ]. Arbitration Act 1996
[ 5 ]. Arbitration (Scotland) Act 2010
[ 6 ]. Hobbs Padgett & Co. (Reinsurance) Ltd. V JC Kirkland Ltd 1969 2 Lloyds Rep. 547
[ 7 ]. Swiss Bank Corporation v Novorissiysk Shipping Co. [1995] 1 Lloyds Rep. 202
[ 8 ]. Tritonia Shipping Inc v South Nelson Forest Products Corporation [1966] 1 Lloyds Rep. 114
[ 9 ]. Wylie Hill & Co. Ltd v The Profits and Income Insurance Co. Ltd. (1904) 12 S.L.T. 407
[ 10 ]. Arbitration Act 1996 s42 to s45
[ 11 ]. Civil Procedure Rules 1998, Pt.34 s4
[ 12 ]. Arbitration Act 1996 s44
[ 13 ]. Convention on the Recognition and Enforcement of Arbitral Awards 1958
[ 14 ]. Orascom Telecom Holding SAE v Chad [2008] 2 C.L.C.296
[ 15 ]. www.salans.com “Supporting the fundamental structural integrity of arbitration”
[ 16 ]. Dallah Real Estate and Tourism Holding Company v The Ministry of Religious Affairs, Government of Pakistan [2010] UKSC 46
[ 17 ]. [2000] 1 Lloyds Rep. 412
[ 18 ]. [2006] 2 All E.R. (Comm) 413
[ 19 ]. West Tankers Inc v Allianz SPA & General Assicurazione Gererali SPA [2012] EWCA Civ. 27