What is arbitration?
Arbitration is a process where parties in dispute agree for one or more persons appointed by them or appointed by default to determine their dispute.
How is a dispute referred to arbitration?
There needs to be an agreement between the parties to submit disputes between them to arbitration. It is not necessary for an arbitration agreement to be in writing unless one of the parties is a “consumer” in which case the Arbitration Act 1996 sets out specific requirements before such an arbitration agreement is enforceable.
Unless otherwise agreed, an arbitration is commenced when one party gives notice to the other party requesting that the dispute or disputes between them be referred to arbitration.
What are the advantages of arbitration?
Arbitration is more flexible than court proceedings. The parties are able to choose who will decide their dispute and can agree on the procedure for determining it.
The arbitration is confidential to the parties and the hearing is held in private.
What are the disadvantages of arbitration?
The parties have to meet the cost of the arbitrator but the courts also charge filing fees and hearing fees.
There is no ability to join other parties to the arbitration unless they are also parties to the arbitration agreement.
What procedure is used by the arbitrator?
The general rules are set out in the Arbitration Act 1996 but the parties can agree to vary some of them. The general rules include:
- Within the time period agreed by the parties or determined by the arbitrator, the claimant sets out the facts supporting the claim and the relief or remedy sought and the respondent sets out the defence to the claim. The parties may submit all documents they consider to be relevant with their statements or can refer to the documents or other evidence they will submit.
- The arbitrator decides whether to hold oral hearings for the presentation of evidence or oral argument or whether the decision is made on the documents submitted to the arbitrator. A party may request an oral hearing at an appropriate stage unless the parties agree that no hearings shall be held.
- The arbitrator is required to treat the parties equally and each party is to be given a full opportunity of presenting that party’s case.
- The arbitrator’s decision (the award) is made in writing and needs to state the reasons for the award unless the parties have agreed that no reasons are to be given or they agree on the terms of the award.
- Any party may appeal to the High Court on any question of law arising out of an award if the parties agree or if the High Court grants permission. The High Court will not grant permission unless it considers that the question of law could substantially affect the rights of one or more of the parties.
- Unless the parties agree otherwise the legal costs and other expenses of the parties and the arbitrator’s costs and expenses are to be fixed and allocated in the award or in a subsequent award.
Arbitration – Peter Davey, Auckland Barrister | Arbitration in Auckland, NZ