How does Commercial arbitration work?


August 9, 2017 Facebook Twitter LinkedIn Google+ Online Auction


Arbitration is a process where there is binding determination with a binding decision after referring a dispute to an arbitrator as a private judge to make a decision which the parties have agreed to accept as binding on them and final.  Only civil disputes can be referred to arbitration, such as those arising from building contracts, partnership contracts and insurance contracts under statute.  The aim of an arbitration is to achieve finality to the dispute and an enforceable decision.  The benefit of arbitration is that it is often less costly, time consuming and formal than a court process.  In addition, a dispute involving a complicated technical issue can often be handled better by an arbitrator with qualifications which make them a more suitable person to decide on the dispute than a judge would be.

Arbitration begins with the agreement to arbitration being signed by bothe of the parties which means that they agree to the conditions of the process.  Under the rules of many courts, a judge mar refer questions of fact for arbitration which is expecially useful in cases which have a high degree of technically related data.  In some industries, there are also legislative arbitration mechanisms.  In Australia, there is also commercial arbitration legislation which us been updated progressively over the years to the point where it is now quite a spohisticated system of dispute resolution.  Some of the elements of this legislation are that the arbitrator is appointed jointly by the parties, this includes the replacement of the arbitrator and any person including the parties to the arbitration agreement must attend personally to give evidence before the arbitration.  Usually, witnesses must attend personally and may be legally represented if the arbitrator agrees and are examined under oath or affirmation.  These elements are all indicators of the quasi judicial role of the arbitrator whilst not having the same level of formality and obsession with procedure which is found in courts.

David Coleman is a lawyer in Sydney Australia with over 10 years experience in the legal industry. If you need legal advice or a access to a legal document click on the links contained here.

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