Return to flip book view

The Deeper Magic of Arbitration Is there a hidden depth to section 1 of the 1996 Arbitration Act

The Society of Construction Arbitrators President Ian Salisbury MA Oxon DiplArch RIBA FCIArb Honorary Secretary Christopher Miers BA Hons DipArch MSc RIBA FCIArb Wednesday 19th February 2014 12 o clock for 12 30pm Royal Thames Yacht Club 60 Knightsbridge London SW1X 7LF The deeper magic of arbitration is there hidden depth to section 1 of the 1996 Arbitration Act Eur Ing Professor Geoffrey M Beresford Hartwell1 Thank you President for giving me this opportunity If I may I ll address myself principally to my own class among us the technicians I use the word in its broader sense I would not wish to offend Architects Surveyors or fellow Engineers You lawyers are different I don t presume to address you Isn t it curious that we strive so hard closely to emulate our friends Her Majesty s Judges when they have made it abundantly clear that that is the last thing they desire Think carefully of what John Donaldson didn t say in Westzucker2 We all know some by heart what he did say All that is necessary is that the arbitrators should set out what on their view of the evidence did or did not happen and should explain succinctly why in the light of what happened they have reached their decision and what that decision is This is all that is meant by a reasoned award To introduce today s topic I must try to define my terms in particular perhaps magic and arbitration Before that however I must remind you of s 1 of the Act especially subsection 1 a that describes the object of the process 1 General principles The provisions of this Part are founded on the following principles and shall be construed accordingly 1 2 Details at www beresfordhartwell com Westz cker GmbH v Bunge GmbH Bremer Handelsgesellschaft GmbH v Westz cker GmbH 1981 Lloyds LR 130 at 132 approved in Universal Petroleum at 1192 I have the judgment at http wp me PZlBS3P Accessed 18 February 2014 See also T Bingham Differences between a Judgment and a Reasoned Award 1997 The Arbitrator 19 Bingham at 28 29

a the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense 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 this Part the court should not intervene except as provided by this Part For now I ll do no more than call your attention to the words the fair resolution of disputes I ll add fair to my list of terms to define I m among friends and most of you know that I turn as do you I imagine to the OED3 for my definitions I looked at the word fair knowing there would be several definitions and hoping to set them in a footnote to the short paper that I read now It s 41 pages long including the quoted examples And that was one of four entries I haven t printed it What I have done is put the version that I edited to give you into my Dropbox at https www dropbox com s kagz9b8ph6kj1d3 Fair 20OED docx You are welcome to that version or to follow the link in the footnote Fair is not a legal term of art In my opinion the best interpretation for the purpose of the Arbitration Act 1996 is that of Free from blemish imperfection or fault just proper equitable reasonable From that I note the word equitable that echoes the OED definition of arbitration4 The settlement of a dispute or question at issue by one to whom the conflicting parties agree to refer their claims in order to obtain an equitable decision What remains to be defined The word magic Back to the OED again I liked the definition one of several which read The use of ritual activities or observances which are intended to influence the course of events or to manipulate the natural world usually involving the use of an occult or secret body of knowledge sorcery witchcraft Also this practice as a subject of study If that sounds a bit like advocacy to you as it does to me so be it Actually the definition went on to speak of manipulat ing the natural world Even the late George Carman QC couldn t do that at the height of his powers 3 The Oxford English Dictionary Nowadays I have recourse to the online edition at http www oed com search searchType dictionary q fair accessed Tuesday 18 February 2014 4 arbitration n 1 A deciding according to one s will or pleasure uncontrolled or absolute decision Obs 2 a The settlement of a dispute or question at issue by one to whom the conflicting parties agree to refer their claims in order to obtain an equitable decision b attrib as in arbitration bond arbitration rate etc 3 Arbitration of Exchange cf French arbitrage in same sense The determination of the rate of exchange to be obtained between two countries or currencies when the operation is conducted through a third or several intermediate ones in order to ascertain the most advantageous method of drawing or remitting bills

So at last what is this deeper magic to be found in the Act Well I find it in the use of the word fair and in the absence of the words according to law Procedurally I think that means all the things we know well audi alteram partem and nemo judex in causa sua It means it shall be for the tribunal to decide all procedural and evidential matters including whether and to what extent the tribunal should itself take the initiative in ascertaining the facts and the law Some of our lawyer friends have said that a fair procedure necessarily means that the outcome will be fair and that is all the Act guarantees I respect the logic of that but I go deeper than that and propose that an unfair result however correct legally necessarily implies an unfair process Sir Michael Kerr a friend of many of us and whose memory we all revere said in his Keating Lecture and elsewhere I think that an international arbitrator sometimes could do Justice where a Judge could not He was right Justice a fair outcome And that President is the deeper magic of Section 1 It never was practice to draft English Acts with a statement of purpose I think the only previous example was a Children Act In passing I remind you that of the rest of the Section that disputes be resolved by an impartial tribunal without unnecessary delay or expense subject only to such safeguards as are necessary in the public interest and the court should not intervene It doesn t mean that an arbitration shall be a feeble simulacrum of proceedings in a Court of Law Toby Landau QC is a master of the language as is Lord Savile If they d wanted that they would have said so What it means say I is quite the reverse Important in construing a statute is the evil that it was intended to rectify There had been unnecessary delay and expense From 1996 to continue with the practices of the day was not merely undesirable not merely wrong but illegal Sadly I don t suppose one could challenge an Award for its own prolixity or the prolixity of the proceedings But with that mention of prolixity I had better come to an end but not before I have mentioned the word fair again in the context of Justice as Fairness5 by John Rawls which I think brings me full circle Thank you President Colleagues 5 John Rawls b 1921 d 2002 was an American political philosopher in the liberal tradition His theory of justice as fairness envisions a society of free citizens holding equal basic rights cooperating within an egalitarian economic system His account of political liberalism addresses the legitimate use of political power in a democracy aiming to show how enduring unity may be achieved despite the diversity of worldviews that free institutions allow His writings on the law of peoples extend these theories to liberal foreign policy with the goal of imagining how a peaceful and tolerant international order might be possible His relevance to the present topic is tenuous but fun