What is Arbitration?

Arbitration is the submission of a dispute to an independent and neutral third party (the Arbitrator) who resolves the dispute making a determination called an award. The arbitrator’s award is binding on the parties to the arbitration and can be enforced through the courts like a court order. 

How does Arbitration work?

Arbitration is somewhat legalistic and adversarial in its approach and is similar to court proceedings. The arbitrator appointed by the parties must determine a dispute according to the facts based on the evidence presented by the parties (normally represented by their lawyers). The evidence presented can be on an informal basis with few technical rules where the parties agree under the terms of their signed Arbitration Agreement or subject to formal technical evidentiary requirements.

Each party is required to present its evidence and arguments supporting its contentions and conclusions to the Arbitrator. The Arbitrator reaches a decision, after considering the competing evidence and arguments in relation to the issues to be decided, based on the application of relevant legal principles or, where the disputant’s so request, the principles of equity and fairness.

The principles of Natural Justice apply to arbitration: An Arbitrator must act in good faith, without bias, and must not hear one party whilst the other party is not present. If the arbitrator has an interest in the dispute they must disclose it before the arbitration commences.

The powers of the arbitrator are derived from the Arbitration Agreement signed by the disputant parties, the common law and the uniform Commercial Arbitration Acts of the various states and territories.
Why Use Arbitration?

Normally Arbitration is used when the contract between the parties includes an Arbitration clause specifying the submission of a dispute to Arbitration.

A dispute can also be referred to Arbitration where the disputant parties mutually agree to such a process, or by a court referral, either at the discretion of the court or an application of the parties.

A notable feature of Arbitration is that, unlike court proceedings, it is confidential to the parties. Arbitration is particularly useful in technical type matters where the parties require a binding decision. However, arbitration can be expensive, formal and legalistic.  



Selecting An Arbitrator

Arbitrators need to have been adequately trained in the technique of Arbitration and be experienced.

Many arbitrators are qualified lawyers, former judges, engineers, architects and other professionals who tend to specialise in particular fields, e.g. building and construction disputes.

One needs to be careful in selecting an arbitrator appropriate for a particular type of dispute.

Mediate Today is able to provide details of qualified and experienced arbitrators specialising in various fields.  


Preparing and Participating in Arbitrations

Arbitration, like court proceedings, requires thorough preparation. The supporting evidence needs to be collected and put into proper form and supporting arguments and conclusions carefully formulated before presentation to the Arbitrator. Normally the parties use their lawyers to undertake such work.

A comprehensive Arbitration Agreement regulating the Arbitration procedure and the setting out the issues to be determined will need to be signed by the disputant parties and the Arbitrator before the Arbitration commences.

Timetables and procedure will be laid down by the Arbitrator, which the parties must observe. The parties normally work closely with their lawyers during the Arbitration hearing, which is held at an agreed neutral venue.

Mediate Today can provide guidance to parties desiring an Arbitration, including providing a pro forma Arbitration Agreement, independent administration of the Arbitration process, arranging a venue and collection of the Arbitrator’s fees, etc.  


Application for Arbitration

This can be done by simply telephoning Mediate Today on 1300-760-225, faxing on 1300-760-220 or by email: medtoday@mediate.com.au with a request for Arbitration.

 

Copyright © 2000 Mediate Today Pty Limited. All rights reserved.
Revised: September 07, 2004 .