Presentation by Alan McMillan and Len Bunton Seminar 1 – Wednesday 16 February 2011

1. BurnessEdinburgh \ Glasgow The Arbitration (Scotland) Act 2010 A seminar series by CIArb (Scottish Branch) Presentation by Alan McMillan and Len Bunton Seminar 1 – Wednesday 16 February 2011

2. What is arbitration? • What law governs arbitration? • The old law - themainproblems • The new law - Arbitration (Scotland) Act 2010

3. What is arbitration? “the method of procedure by which parties who are in dispute with each other agree to submit their dispute to the decision of one or more persons, described as ‘arbiters’, rather than resort to the courts of law.” Lord Hope of Craighead

4. What is Arbitration? Main benefits: • Confidential; • Reference to a skilled person who may have specialist knowledge pertinent to the subject matter in dispute; • A clear set of rules; • Awards can be enforced internationally in jurisdictionswhich have ratified the New York Convention; • May be quicker/more economic than traditional court procedure; • Greater flexibility.

5. What is Arbitration? Main drawbacks: • May be costly, parties have to fund Arbitration themselves; • There are still some grounds for reference to the Courts, although limited • Some commentators have expressed concern over the quality of Arbitration decisions • More problematic to join third parties to proceedings.

6. What law governs arbitration?

7. The old law - themainproblems Arbitration law in Scotland pre - 2010 Act • Case Law • Applicable legislation • Arbitration (Scotland) Act 1894 • Administration of Justice (Scotland) Act 1972 • Geneva Convention 1927

8. The old law - themainproblems • New York Convention 1958 & Arbitration Act 1975 • UNCITRAL Model Law 1966 & The Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 • The Arbitration Act 1996 • And not forgetting the 1695 Articles of Regulation!

9. The old law - the main problems Problems with the pre-2010 Act Law • Dual System of Arbitration Rules • Arbiters could not rule on their own jurisdiction • Stated Case Procedure • Confidentiality

10. The old law - the main problems • Arbiter’s powers • Arbiter’s immunity from suit The effect was that arbitration became to some extent a less popular dispute resolution tool in Scotland in the modern era.

11. The new law - Arbitration (Scotland) Act 2010 Introduction • Arbitration (Scotland) Act 2010 received Royal Assent on 5 January 2010 and came into force on 7 June 2010; • This is subject to the transitional provisions in section 36 of the Act. The important ones are • The Act does not apply to arbitrations commenced before 7 June 2010

12. The new law - Arbitration (Scotland) Act 2010 • The Act otherwise applies to an arbitration agreement whether made before or after 7 June 2010. However where the arbitration agreement is made before 7 June 2010, parties may agree that the Act is not to apply. This option to opt out will only be available for a period of 5 years from the commencement date.

13. The new law - Arbitration (Scotland) Act 2010 • Mandatory and default rules

14. The new law - Arbitration (Scotland) Act 2010 • General Objectives of the Act • Place the majority of Scottish Arbitration Law into one Act • Clarify any inconsistencies in the current law of Arbitration; • End the dual regime of Arbitration in Scotland (International and Domestic); • Limit recourse of Arbitration decisions to the Courts; • Bring Scottish Arbitration law in line with international standards;

15. The new law - Arbitration (Scotland) Act 2010 • Provide a set of Mandatory rules that will apply to every Arbitration seated in Scotland; • Provide a set of non-mandatory rules that parties may choose to use or not • Repeal of disfavoured law (e.g. the ‘stated case’ procedure will be repealed); • In the future Arbitration Law will be able to be amended quickly by the Scottish Ministers though ‘by order’ in response to any inadequacies in the Act once enacted

16. The new law - Arbitration (Scotland) Act 2010 • Key Changes • Stated Case Procedure and Referrals on points of law - Rule 67 - 72 • Jurisdiction - Rule 19 -20 (Mandatory) • Separability - Section 5 • Confidentiality (Rule 25 - Default) • Anonymity - Section 15

17. The new law - Arbitration (Scotland) Act 2010 • Awards - Rules Part 6 • Prescription and limitation - Section 21 • Enforcement • Disagreement over choice of Arbitrator - Section 22 • Consumer Arbitrations

18. BurnessEdinburgh \ Glasgow Questions

19. BurnessEdinburgh \ Glasgow We’d like to hear from you Name Alan McMillan Title Partner +44 Direct Dial 1 31 473 6141 +44 Mobile 7736 08 32 32 E-mail alan.mcmillan@burness.co.uk