At the beginning of the summer, Scotland suddenly became a more attractive forum for both domestic and international arbitration with the advent of the new Arbitration (Scotland) Act 2010, including state-of-the-art legislation that offers parties a flexible, confidential, quicker and cheaper alternative to litigation.
Although similar to the English Arbitration Act 1996, the Scots approach makes additional benefits available to parties, addressing deficiencies by:
- Incorporating the procedural rules in a schedule to the Act;
- Creating Arbitral Appointments Referees;
- Granting arbitrators the power to award damages and interest;
- Requiring arbitrators to be independent as well as impartial;
- Providing for an express confidentiality rule;
- Dealing with the resignation of an arbitrator;
- Limiting appeals to the court, there being no appeal to the Supreme Court; and
- Ensuring the Act reflects changes to the UNCITRAL Model law, the UNCITRAL Arbitration Rules and the New York Convention.
Arbitrations started before 7 June 2010 will not be affected, but the Act will apply to arbitration agreements made before or after that date, subject to certain transitional arrangements.
The Act brings with it both a modernisation and an improvement of the law of arbitration in Scotland, incorporating the best of arbitral practice from around the world.
The Act is a significant departure from existing Scots law governing arbitration, which was found in a mixture of old statute and case law.
Now, the entire law of arbitration is to be found in a single piece of legislation.
As a result, UK organisations will benefit from the similarities now enjoyed north and south of the border.
Keith Kilburn is an Associate in the Engineering & Construction Team in Scotland at law firm DLA Piper