ARBITRATION AND

AWARD
 LEARNING OUTCOMES
At the end of this class, the students should be
able to:
• define and explain on the Arbitration
• describe the Arbitration with Act, Rules and
the Court
• describe the principles in Arbitration
agreement
• describe the appointment until removal of
Arbitrator
 What is Arbitration?
• In popular usage – the placing of a dispute
before third party to obtain a fair or equitable
decision, based on discretion rather than on
fixed rules.
John Uff, Construction Law
 What is Arbitration?
• The settlement of a dispute by an arbitrator.
The Concise Oxford Dictionary
 What is Arbitration?
• Process where parties in dispute agree to have
it settled by a neutral persons(s) and to be
bound by that decision.
3 ESSENTIAL ELEMENTS OF
ARBITRATION
Dispute between
parties

ARBITRATION

Agreement to refer Agree the Arbitrator’s

to Arbitration decision – final and
binding
 Chosen by agreement Appointed by a person
of parties named in a contract

ARBITRATOR

Select Arbitrator 1ST PARTY 2ND PARTY Select Arbitrator

Select Venue Select Venue

Select Select
Procedural rules Procedural rules

Represented by Represented by
lawyers / other lawyers / other
parties parties

Paid – Paid –
Arbitration cost Arbitration cost
& arbitrator fees & arbitrator fees

Should be agreed by both parties

CONDUCT OF ARBITRATION:
PARALLEL – but less formal than
COURT

ADVERSARIAL

Arguments / Oral hearing and Evidence

ARBITRATOR
Arguments – submitted in writing
Find the FACTS

Apply the LAW AWARD APPEAL

Grant relief to Decision of the NO except High

one / both Arbitrator Court against
parties ‘serious
Binding on irregularity’
parties
Excess of Visible error of
Enforced by jurisdiction law
court (if
Violation of
necessary)
natural justice
DIFFERENCE BETWEEN ARBITRATION AND NON-
ARBITRATION PROCESS

• Arbitration Act 2005, Arbitration (Amendment) Act

2011
• Powers given to Court and other Statutory
Provision – to enforced rights
• Judicial nature – Arbitrator is immune (from
negligence)
 Why use Arbitration?
DISADVANTAGES/
ADVANTAGES ARBITRATION CRITICISMS

Privacy Rules of evidence

Factors Favouring do not apply
Convenience
Highly technical Lack understanding
Quicker and cheaper of the law
Where binding
Less formal decision is No collection of
Relevant Preceedents
Business relationship
To Avoid Costs
Expertise of the Arbitrator negotiation
Point of law
Quantification of
Finality
dispute involved Enforcement
International recognition
Third Parties
Flexibility of procedure
 Agreement to refer arbitration Rules on Relationship
when all / certain disputes Procedure between
arose or may arise and Practice court and
arbitration

3.3 Arbitration
Power (Amendment) Act 2011 Some
(parties and sections –
arbitrator) to Mandatory
determine
the
procedures Some
Distinction
sections –
between
Subject to the
Institutional – parties
Ad-hoc – left
rules of agreement
to the International
particular Domestic
agreement of
body are used
the parties
e.g. PAM /
ISM
 Rules of Arbitral Bodies
E.g. AIAC
Appointment of Arbitrator

Time limit for appointment

Procedural conduct

Basic fees

START FINISH

Rules – a structure for

efficient conduct of
arbitration
AWARD
 1.Enforce an agreement to 3.Decide a preliminary point of
a.Interim arbitrate law
measure of
protection

b.Appointme
nt & number
of Arbitrators
2.Facilitate and support
arbitration process

c.Removal of
Arbitrators
d.Power of e.Assistance
tribunal – in taking
jurisdiction evidence

4.Consider challenges of award

5.Enforce arbitral awards

3.4 Roles of the court? - Non intervention

 3.5 The Arbitration Agreement
(S9)
• Dispute – after dispute arisen / future dispute

• Agree to arbitrate (Arbitration Clause in the Contract)

- In writing
- Signed by the parties
- Exchange of communication in writing (letters, facsimile)
- Exchange of written statements (statement of claims and
defence)
 3.6 Enforcement of Arbitration
Agreement
(S10)
• Stay of Proceedings - the court shall
grant a stay unless the arbitration
agreemnt is void, inoperative or
incapable of being performed.
 3.7 APPOINMENT
Building contract –
appointed by agreement of
the parties
If agreement NOT achieved
– apply from an agreed
appointing authority
(President of professional
institution)
Act – free to agree on the
procedure of the
appointment
Failed to agree – Director of
AIAC Appoint
Director fails to act – apply
High Court
3.8 POWERS & DUTIES
Powers
- Wide ranging power to
settle the dispute (fair) -
evidence.
-Terminate the proceeding /
proceed ex parte / dismiss a
claim.
Duty - Must act fairly and
impartially
3.9 REMOVAL Immunity
Grounds:
-Impartially / bias / lacks of qualifications
- Failed to perform
 3.10 Arbitration Procedure
1. Notice
2. Appointment of Arbitrator
3. Preliminary meeting
4. Delivery of Pleadings
5. Discovery of documents
6. Exchange of Report of expert witness
7. Either Oral hearing /oral argument OR “Document only”
8. Claimant present his claim: witness questioned, cross-
examined, re-examined, question by the arbitrator.
Respondent present, sum up followed by the claimant.
9. Hearing closed
10. Award
 3.11 The Award (the decision of the Arbitrator)
A. Type if award:
1. Interim award
2. Partial award
3. Final award.
4. Agreed award

B. Content of award:

C. Effect of award: final and binding, can be used in any

court.
 Award of costs
• Arbitrator decide on the allocation of cost.
• Normally, “costs follows the event”
• If no allocation, each party is responsible for each
cost
3.12 Challenges to the Award

3.13 Termination of Proceeding

3.14 Consolidation of Proceeding and
concurrent Hearing
3.15 Enforcement of Arbitration Awards s.38

• International Conventions – UNCITRAL model l

 ARBITRATION IN PAM2018
• CLAUSE 37. – 37.7
KLRCA Arbitration Rules
END OF ARBITRATION