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ARBITRATION
SERVICES
Arbitration is a process by which civil disputes may be adjudicated
using a process outside of a formal court system. The results
of arbitrations are binding on the parties and are enforceable
by the courts.
In British Columbia, commercial arbitrations are governed
by the Commercial
Arbitration Act. RSBC 1996 c 55 . The Act defaults to
the rules of procedure published from time to time by the
British Columbia
International Commercial Arbitration Centre (BCICAC).
The financial affairs of BCICAC are administered by the British
Columbia Arbitration and Mediation Institute (BCAMI),
an affiliate of the ADR [Alternate
Dispute Resolution] Institute of Canada (ADRIC). BCAMI,
in addition to its administrative responsibilities to BCICAC,
conducts courses and provides the qualifying process leading
to the Chartered Arbitrator (C.Arb) designation granted by
ADRIC.
The arbitration process commences with an agreement between
two parties to submit their disputes to arbitration. That
agreement might arise from a shareholders agreement entered
into at the outset of a business relationship or partnership.
Or, parties may already be engaged in a dispute and decide
to take the arbitration route to its resolution. In either
event, the parties commence the arbitration process by either
selecting one or more arbitrators (three is a practical maximum)
or, if they cannot agree on an arbitrator, the claimant (analogous
to a plaintiff in civil proceedings) submits a Notice of Intention
to Arbitrate with BCICAC and asks BCICAC to appoint one or
more. BCICAC then identifies four candidates (more if the
arbitration is to be conducted by a three-person panel) and
invites the parties to choose from that list. If the parties
still do not agree, BCICAC makes an appointment which is binding
upon them.
Following the appointment, the parties exchange statements
of claim and defense and, usually, but not always, a hearing
is convened and the arbitrator(s) hear evidence, normally
under oath. The arbitrator then renders a written decision,
called an award, and delivers it to the parties. The award
is similar in content to a judgment of the court and is enforceable
by the courts.
There are several advantages and some disadvantages to the
use of arbitration as a dispute resolution process. The advantages
include:
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- The
timetable is in the hands of the parties and the
arbitrator; this, in the normal course results in
a more expeditious process.
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The proceedings are entirely private as is the award.
This is a significant advantage when the dispute
involves otherwise confidential financial issues.
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The parties can agree on any lawful issue and that
agreement will be binding on the arbitrator.
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The arbitrator, in consultation with the parties
is entitled to set his or her own procedures. Thus,
if the matter at issue is straightforward and there
are no credibility issues it is frequently a possible
to do away with the hearing. Such procedures, called
"documents only" arbitrations are very useful in
resolving single issue matters.
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If the matter at issue is technically complex the
parties may select an arbitrator with specific skills
and experience-something not possible within the
court system.
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There are,
of course, some disadvantages including the following:
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- Although
arbitration is frequently promoted as being less
expensive than court proceedings, this is not always
the case, particularly when more than one arbitrator
is appointed.
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An arbitration award is very difficult to appeal,
much more so than a judgment of the Supreme Court.
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The arbitration process omits certain procedures
which, in many cases serve a useful purpose in.
For instance, examinations for discovery are fairly
rare .
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Clayton
Shultz is a Chartered Arbitrator and a past president of the
BCAMI. He is a panel member and a Trustee of the BCICAC. Clayton
has conducted numerous arbitrations relating to valuation
and commodity pricing issues.
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