Alternatives to Court: Arbitration

and Alternative Dispute

Resolution in Scotland

Brandon Malone FCIArb

Chairman
Scottish Arbitration Centre
 Arbitration and ADR
Arbitration
Mediation
Med Arb / Arb Med
Construction Adjudication
Expert Determination
Dispute Resolution Boards
Online Dispute Resolution
 Arbitration
Arbitration (Scotland) Act 2010
Similar to Arbitration Act 1996 (England)
Key features
Open
Flexible
Confidential
Restricted rights of challenge
Arbitration (Scotland) Act 2010
Structure
The ‘Scottish Arbitration Rules’ are
contained in the schedule to the Act
Some rules are mandatory
Some rules are default and can be
amended by the parties
 Scottish Arbitration
Open:
Any natural person can be appointed as an
arbitrator
No formal qualification required to be an
arbitrator
No restriction on nationality for arbitrator or
counsel
No requirement to be represented by a
lawyer qualified in Scotland or elsewhere
 Scottish Arbitration
Flexible:
Procedure is a matter for the agreement
of the parties, which failing the arbitral
tribunal
Procedure can be as formal or informal
as the subject matter of the dispute
requires
 Scottish Arbitration
Confidential
Confidentiality is written into the rules as a
default provision
A breach of confidentiality is actionable
If a breach of confidentiality causes loss,
the loss can be recovered as damages
An apprehended breach can be
prevented through interdict
 Confidentiality in arbitration
Where there is an incidental referral to the court:
Proceedings are anonymised
The case is referred to as ‘Arbitration
Application Number [ ] of [year]’
Hearings are held in private
Published decisions maintain anonymity
Parties may apply for a further redaction of
sensitive information or to prevent publication
of the case
 Scottish Arbitration
Restricted rights of challenge
Excess of jurisdiction
Serious irregularity
Legal error
only if the contract is subject to Scots
law
parties may exclude legal error
appeals by agreement
 Arbitration: legal culture
Generally a common law approach
Adversarial
Cross examination may be permitted
Some civil law influence
Use of written witness statements and
submissions common
No general duty of disclosure and
discovery is limited
 Use of arbitration
Construction and engineering contracts
Commercial leases
Partnership agreements
Separation agreements
Government contracts
Energy contracts
 Scottish Arbitration
The institutional picture
Scottish Arbitration Centre
International Centre for Energy
Arbitration
Arbitral Appointment Referees
Family Law Arbitration Group Scotland
(FLAGS)
 Scottish Arbitration Centre
Established to promote Scottish arbitration and
Scotland as seat and venue for arbitration

Founding Members
Chartered Institute of Arbitrators
Faculty of Advocates
Law Society of Scotland
RICS Scotland
Scottish Government
 Scottish Arbitration Centre
Does not currently administer arbitrations
Can make ad hoc appointments through its
appointments subcommittee
Works with other arbitral institutions such
as ICC, ICDR and LCIA
 Scottish Arbitration Centre
Independent Appointments Committee
Domestic and international
subcommittees
Committee members from around the
world
Including one Brazilian! - Eliana
Baraldi, Head of Arbitration and
Mediation at De Vivo, Whitaker e
Castro Advogados, São Paulo
 ICEA
The International Centre for Energy
Arbitration
launched in 2013
Joint project between the Scottish
Arbitration Centre and the Centre for
Energy, Petroleum and Mineral Law and
Policy (CEPMLP) at the University of
Dundee
 ICCA Edinburgh 2020
International Council for Commercial
Arbitration Congress 2020
To be held in Edinburgh 10-13 May 2020
Over a 1,000 senior international
arbitration professionals
CIArb London Centenary Principles

Best practice for arbitral seats

 Law
A clear effective, modern International Arbitration law which shall
recognise and respect the parties’ choice of arbitration as the method for
settlement of their disputes by:
(a) providing the necessary framework for facilitating fair and just resolution of
disputes through the arbitration process;
(b) limiting court intervention in disputes that parties have agreed to resolve by
arbitration.
(c) striking an appropriate balance between confidentiality and appropriate
transparency, including the growing practice of greater transparency in investor state
arbitration.
 Judiciary
An independent Judiciary, competent, efficient, with
expertise in International Commercial Arbitration and
respectful of the parties’ choice of arbitration as their
method for settlement of their disputes.
 Legal Expertise
An independent competent legal profession with expertise
in International Arbitration and International Dispute
Resolution providing significant choice for parties who
seek representation in the Courts of the Seat or in the
International Arbitration proceedings conducted at the
Seat.
 Education
An implemented commitment to the education of counsel,
arbitrators, the judiciary, experts, users and students of the
character and autonomy of International Arbitration and to
the further development of learning in the field of
arbitration.
 Right of Representation
A clear right for parties to be represented at arbitration by
party representatives (including but not limited to legal
counsel) of their choice whether from inside or outside the
Seat.
 Accessibility and Safety
Easy accessibility to the Seat, free from unreasonable
constraints on entry, work and exit for parties, witnesses,
and counsel in International Arbitration, and adequate
safety and protection of the participants, their
documentation and information.
 Facilities
Functional facilities for the provision of services to
International Arbitration proceedings including transcription
services, hearing rooms, document handling and
management services, and translation services.
 Ethics
Professional and other norms which embrace a diversity of
legal and cultural traditions, and the developing norms of
international ethical principles governing the behaviour of
arbitrators and counsel.
 Enforceability
Adherence to international treaties and agreements
governing and impacting the ready recognition and
enforcement of foreign arbitration agreements, orders and
awards made at the Seat in other countries.
 Immunity
A clear right to arbitrator immunity from civil liability for
anything done or omitted to be done by the arbitrator in
good faith in his or her capacity as an arbitrator
 Mediation
Consensual dispute resolution process
Slow take up in Scotland
Mainly used in family disputes
Some consumer and commercial dispute
resolution
European Union ADR Directive may lead
to increased use of mediation in consumer
disputes
 Mediation
No equivalent of New York Convention for
ADR
Problems with international enforcement of
mediation agreements
 Integrating mediation
International Centre for Energy Arbitration
Report (www.energyarbitration.org)
Strong support for compulsory mediation
as part of the arbitration process
Med-Arb and Arb-Med
 Integrating mediation
SIAC Rules
Arbitration-Mediation-Arbitration
Operates as Med-Arb but the intention is
that a mediated award can be enforced
under the New York Convention
A New York Convention for mediation
awards?
 Construction Adjudication
Rapid 28 day process
Temporarily binding award
Can be superseded by a court or arbitral
award
Very difficult to challenge
jurisdiction and natural justice grounds only
No recovery of legal expenses for successful
party
 Construction Adjudication
Adjudication has been very popular in the
construction industry
Used more widely than arbitration and
litigation
Some dissatisfaction because of
rough justice
inability to recover expense
challenges and temporarily binding nature
 Expert Determination
Best used for issues of expert opinion such
as
quality
measurement
conformity to contract
Very little prospect of challenging an award
Relatively fast and inexpensive
 Dispute Boards
Used on large scale long term projects
Dispute Resolution Boards
Issues recommendations which parties
may or may not accept
Dispute Adjudication Boards
Issues awards which bind the parties until
the end of the contract
Award may become permanent if not
challenged
 Uses of technology
Efficiencies achieved through

document management

e-discovery

video conferencing

Use of technology to reach settlement - blind bidding

 Online Blind-bidding
Standalone blind-bidding

Parallel online blind-bidding

integrated into a dispute process

available at key stages

 Brandon J Malone FRICS FCIArb WS
Chairman
Scottish Arbitration Centre, Edinburgh

Tel: +44 131 618 8868

Email: brandon@scottisharbitrationcentre.org