Scotland has a modern arbitration system and can offer the best in legal and dispute resolution services for both domestic and international businesses. The Scottish Arbitration Centre has been at the forefront of the campaign to promote arbitration in Scotland, and Scottish arbitration to the world. It actively encourages international business to Scotland by promoting Scotland as a jurisdiction of arbitration in international disputes; working to put Scotland on the international arbitration map.
Established in March 2011 following the introduction of the Arbitration (Scotland) Act 2010 as a long term investment to develop arbitration in Scotland, the Scottish Arbitration Centre is a not-for-profit organisation made up of five member bodies; the Law Society of Scotland, the Faculty of Advocates, the Chartered Institute of Arbitrators, the Royal Institution of Chartered Surveyors, and the Scottish Ministers. Their hope, and indeed their expectation, is that the Centre’s work will lead to a significant boost in work for members of these professions, as well as other key professionals involved in dispute resolution, including expert witnesses.
Andrew Mackenzie, Chief Executive of the Scottish Arbitration Centre, explains why Scotland has become the place to arbitrate and why bringing the ICCA Congress to Edinburgh in 2020 will be a game changer for Scotland in international arbitration.
What is arbitration?
“Arbitration is a form of alternative dispute resolution (ADR); a legal technique for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons (the “arbitrators” or “arbitral tribunal”) by whose decision (the “award”) they agree to be bound. Above, Arbitration Board Room
Arbitration can be either voluntary or mandatory (although mandatory arbitration can only come from a statute or from a contract that is voluntarily entered into, where the parties agree to hold all disputes to arbitration, without knowing, specifically, what disputes will ever occur).
Arbitration is often used for the resolution of commercial disputes, particularly in the context of international commercial transactions. The use of arbitration is also frequently employed in consumer and employment matters, where arbitration may be mandated by the terms of employment or commercial contracts.
Arbitration differs from mediation in that an arbitrator will issue a final decision on the dispute, which is called an arbitral award. An arbitral award is binding on the parties to the dispute and is legally enforceable. However in mediation, a mediator may only guide the parties toward a mutually agreeable settlement by helping them clarify their underlying interests and concerns and encouraging compromise. However, if no agreement is reached, the mediator is unable to issue a binding decision on the dispute.”
Why arbitrate in Scotland?
“Arbitration has a long history in Scotland, spanning some seven hundred years, and yet in the Arbitration (Scotland) Act 2010 (“the Scottish Act”), Scotland has one of the most modern systems of arbitration in the world.
The Scottish Act is similar to the 1996 Act in use in England and Wales, and will feel instantly familiar to international arbitration practitioners. Indeed, the Scottish Courts have held that English case law applying to the Act in force there since 1996 can be used to interpret the Scottish Act. This provides predictability and certainty to the Scottish regime.
However, there are some key differences and benefits to arbitrating in Scotland. Arbitration in Scotland is a confidential process, and unlike the position in most
jurisdictions, the duty to treat proceedings as confidential is backed up by legislation. Confidentiality is of course one of the attractions of arbitration to parties whose dispute is commercially sensitive. The obligation to treat all matters relating to the arbitration confidentially is enshrined in the Scottish Act, and is has been strongly backed by the Scottish courts. Where a party to an arbitration suffers loss as a result of another party breaching the duty of confidentiality, the aggrieved party can bring an action for damages. Furthermore, and unlike anywhere else, the anonymity provisions ensure that where there is an appeal to the Court parties can request that their names do not appear on the decision. If a challenge is made to court in respect of an arbitration, the courts will keep the parties’ names, and details of the case anonymous, so as to preserve confidentiality. It is possible to persuade the Court that the case should not be reported at all.
There are also no appeals on points of law where the arbitration is an international arbitration. Where the arbitration is ‘domestic’ (concerns two parties based in Scotland), the parties can exclude ‘legal error’ appeals by agreement, thus reducing recourse to the Courts. To reduce unnecessary court challenges, the Scottish Act limits appeals to the Court, and from the Court to the appeal court (the Inner House). There is no appeal to the UK Supreme Court.
Scotland is, in arbitration terms, separate from England – this neutrality may be attractive to foreign parties in dispute with English firms. Scots law is a hybrid or mixed legal system, containing civil and common law elements, making it attractive to companies trading in both these jurisdictions. We also have a mature legal system that backs arbitration, with judges who appreciate the need to support the arbitral process. Scotland itself is a very attractive venue in which to arbitrate, with good transport links and accommodation, and with arbitration costs roughly half of those of London and New York.”
What we’ve achieved so far:
“Scotland is driving to become a serious contender on the international arbitration stage, and the results of the Centre’s promotional work over the past five years are easily seen.
We understand that arbitration business is generally on the increase in Scotland, with the Centre’s rules increasingly being used as the default dispute clause in business contracts. The Scottish Building Contract Committee has announced it will move to arbitration in contracts and Scottish Government has Scottish
arbitration, and the Centre as an appointing body, as the default dispute resolution clause in their goods and service contracts. The Centre has also received a
steady number of bookings for its arbitration suites since moving to new premises overlooking Edinburgh Castle on Princes Street in September 2014, including
bookings for mediations and arbitration hearings.
We have made a huge impact internationally. We nowover 4,300 subscribers to our quarterly newsletter, with over half of these subscribers located outside of the UK. We have also been shortlisted for awards by Global Arbitration Review for the past two consecutive years.
However, our biggest win to date has certainly been our successful bid to bring the International Council for Commercial Arbitration (ICCA) Congress, the largest international arbitration conference in the world, to Edinburgh in 2020. ICCA is a worldwide nongovernmental organisation (NGO) devoted to promoting the use and improving the processes of arbitration, conciliation and other forms of resolving international commercial disputes. Its activities include convening international arbitration congresses and conferences, sponsoring authoritative dispute resolution publications, and promoting the harmonisation of arbitration and conciliation rules, laws, procedures and standards.
An ICCA Congress is held every second year for the presentation and discussion of papers on different aspects of international dispute resolution. These meetings attract a large number of participants from all parts of the world, and have made significant contributions to the development of dispute resolution theory and practice. The next ICCA Congress will be held in Sydney in 2018 and then in Edinburgh in 2020.
Hosting such a prestigious event is a unique opportunity to attract international attention and business to Scotland. Bringing ICCA to Scotland will allow the international arbitration community to forge relationships with a wide cross-section of the Scottish arbitration community, not just those few who attend international conferences in other countries. It will also enable us to showcase Scotland as a destination, and to crystallise the concept of Scotland as a possible arbitral seat in the minds of those deciding where to arbitrate.
There are also wider benefits from bringing ICCA 2020 to Scotland. Scottish solicitors will be obvious beneficiaries from an increase in arbitrations seated in Scotland as a result of incidental court work. With additional arbitrations and incidental court work will also come an increase in work for expert witnesses and other professionals involved in dispute resolution proceedings. There is also the angle of marketing Scottish firms as a bridge between common law and civil law jurisdictions. More generally, the conference will put Scotland in the spotlight over the next four years, and in particular, in the two years between the 2018 and 2020 conferences. It will give Scotland an unprecedented profile in the international legal sphere. There is also the economic benefit that will flow from having over 1,000 international lawyers descending on Edinburgh for a week. There will be a very significant boost to the local economy, and to the wider Scottish economy, estimated to be worth more than £2 million.”
How to support us:
“Firms or individuals can join our membership programme to receive advertising on our website, discounts off room hire and training events at the Centre, and our quarterly newsletter. Current members include international construction and law firms, as well as London chambers.
The Centre is also currently welcoming expressions of interest from firms or businesses wishing to sponsor or support the ICCA 2020 Congress.
Should you be interested in joining the Centre as a member, or sponsoring ICCA 2020, please contact us.“
About the Scottish Arbitration Centre:
The Board of the Centre comprises ten directors; two directors from each of the member bodies, and is chaired by Brandon Malone. Sir David Edward QC is the Centre’s Honorary President, and Hew Dundas is Honorary Vice President. The Centre’s executive team is led by Andrew Mackenzie, a solicitor on secondment from Scottish Government.
The Centre’s independent arbitral appointments service was unveiled in 2014. On request, the Scottish Arbitration Centre can appoint an arbitrator through its Arbitral Appointments Committee. The Arbitral Appointments Committee is an independent committee that acts separately from the Centre’s Board and has complete discretion to choose the most suitable arbitrator for the dispute from leading international and domestic arbitrators.
The Centre also established two sub-committees within its Arbitral Appointments Committee; one specialising in international appointments, and the other in domestic appointments. The Centre has appointed Juliet Blanch as Chair of the international committee, and James Wolffe QC as Chair of the domestic sub-committee. The full list of committee members is below:
• David Carrick, Hill International, Edinburgh
• Thomas Halket, Halket Weitz, New York
• Kaj Hobér, 3 Verulam Buildings, London and Stockholm
• Elie Kleiman, Freshfields, Paris
• Lindy Patterson QC, CMS Cameron McKenna, Edinburgh
• James Wolffe QC, Faculty of Advocates, Edinburgh
• Sandra Cassels, Brechin Tindal Oatts, Edinburgh
• Juliet Blanch, Weil's International Dispute Resolution, London
• Alice Leggat, SSE PLC, Perth
• Olufunke Adekoya, ǼLEX, Nigeria
• Eliana Baraldi, De Vivo, Whitaker & Castro, Brazil
• Joyce Cullen, Brodies, Edinburgh
The Directions and Guidance for the appointment of an arbitrator by the Arbitral Appointments Committee and user forms for the service are available on the Scottish Arbitration Centre’s website.
The Scottish Arbitration Centre is located on Princes Street in Edinburgh, in the heart of Edinburgh’s central business district. The Centre’s state of the art hearing rooms and meeting rooms overlooking Edinburgh Castle offer a modern, centrally located and affordable venue for arbitration, mediation and other dispute hearings, and for conferences, events and meetings. Details on room hire are available to view on our website.
The Scottish Arbitration Centre holds an annual arbitrator training day. The training day involves the provision of practical guidance on acting as an arbitrator in a dispute under the Scottish Arbitration Rules (forming Schedule 1) to the Arbitration (Scotland) Act 2010. Leading practitioners provide guidance on how to apply the Rules to common problems; how to deal with difficult cases; and how to avoid challenges to awards.
The Centre is also involved in a joint energy arbitration project with the Centre for Energy, Petroleum, Mineral Law and Policy at the University of Dundee. Following the launch of the International Centre for Energy Arbitration (ICEA) by former First Minister Alex Salmond MSP in 2013, the Centre commenced a survey in April of relevant professionals within the energy sector to identify current trends and desired requirements in respect of dispute resolution within the industry. The results of the consultation were published in a report in May 2015, generating much local and international press coverage and interest from arbitration professionals worldwide. Following the publication of the report, the ICEA will now work towards developing bespoke arbitration rules.
The Scottish Arbitration Centre is a long term investment to create a new industry of arbitration in Scotland to support growth and increase business. We believe this will lead to significant benefits for relevant practitioners now and into the future