Module 1 (Part 1)Introduction to Arbitration copy

Arbitrator Training CourseIntroduction to Arbitration

Module 1 (Part 1)

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What is Arbitration?

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Definition

Attempts at a definition have been several but an early one is as follows: “An arbitration is a reference to the decision of one or more persons, either with or without umpire, of some matter or matters in difference between the parties” (Collins v Collins (1858)) The Act does not contain a definition, but states the object of arbitration and the general principles on which the Act is founded, as follows:

• the object of arbitration is to obtain the fair resolution of disputes by an impartial Tribunal without unnecessary delay or expense;
• the parties should be free to agree how their disputes are resolved subject only to such safeguards as are necessary in the public interest; and
• the Courts should not intervene except as provided by the Act.

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What is Arbitration?

(2)

Arbitration vs other forms of dispute resolution

It is difficult to identify the exact combination of features which distinguishes arbitration from other forms of dispute resolution, but certain features are found in arbitration:

1. the need for an agreement to refer a matter to arbitration;
2. the privacy of the proceedings; and
3. the finality of the decision (the possibility of appeal to the Court against an arbitration award being very limited, unless the parties agree otherwise).

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Advantages of Arbitration

1. As mentioned, arbitration proceedings are generally private. Exceptionally, in certain are cases when they become the subject of Court proceedings, they can become public.
2. The decision is generally final. In limited circumstances, an arbitration award may be challenged in court.
3. An arbitration award is generally easier to enforce abroad than an English Court judgment, pursuant to the 1958 New York Convention. Far more foreign countries apply the New York Convention than have treaties with UK recognising English Court judgments.
4. Arbitration proceedings are less formal than Court proceedings. Arbitration allows disputes to be determined by specialist trade Arbitrators. FCC arbitrations are generally less expensive than Court proceedings.

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FCC is an Arbitral Institution

An arbitral institution is a body to which parties have given powers by the terms of their arbitration agreement. Arbitral institutions typically undertake one or more of the following functions: The FCC provides all of these functions. It is vested with its powers and administers arbitrations by virtue of the Arbitration and Appeal Rules ("A&A") being incorporated into FCC Contracts

1. appoint Tribunals to hear disputes;
2. act as account holders for fees and deposits;
3. supervise the conduct of arbitrations; and
4. provide arbitration rules pursuant to which arbitrations will be conducted.

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A Core Business Service of FCC

The FCC will be involved as an arbitral institution in the administration of a reference to arbitration in accordance with FCC Rules.

What are the main advantages of FCC Arbitration?

1. provision of a procedural framework;
2. provision of specialist Arbitrators i.e. experienced cocoa people to judge cases referred to them; and
3. reduction in the administrative burden on parties and Arbitrators.

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Reason for using FCC Arbitration services

1. Court proceedings are costly.
2. Judges will not necessarily be familiar with the cocoa market.
3. For decades the cocoa market has chosen to have its disputes dealt with under the FCC rules: cocoa trade people dealing with cocoa trade disputes.

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Retaining confidence of the market

For the FCC as an arbitral institution to stand the test of time, it is essential that its trade Arbitrators deliver an excellent service that continues to be preferred by members of the cocoa trade. This can only be achieved by the professionalism of the FCC Arbitrators and this underlies our commitment to training new Arbitrators and providing Continuous Development Program (CPD) for those already on the FCC Arbitration and Appeal Panel to maintain and enhance their arbitration knowledge and expertise.

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