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Scottish Arbitration Bill 2009

Title
Scottish Arbitration Bill 2009
Content

ACCOMPANYING DOCUMENTS

Explanatory Notes, together with other accompanying documents, are printed separately as SP Bill 19-EN. A Policy Memorandum is printed separately as SP Bill 19-PM.

Arbitration (Scotland) Bill

[AS INTRODUCED]

An Act of the Scottish Parliament to make provision about arbitration.

Introductory

1 Founding principles

The founding principles of this Act are—

(a)

that the object of arbitration is to resolve disputes fairly, impartially and withoutunnecessary delay or expense,

(b)

that parties should be free to agree how to resolve disputes subject only to suchsafeguards as are necessary in the public interest,

(c)

that the court should not intervene in an arbitration except as provided by this Act.

Anyone construing this Act must have regard to the founding principles when doing so.

2 Key terms

(1) In this Act, unless the contrary intention appears—

“arbitration” includes—

(a)

domestic arbitration,

(b)

arbitration between parties residing, or carrying on business, anywhere inthe United Kingdom, and

(c)

international arbitration,

“arbitrator” means a sole arbitrator or a member of a tribunal,

“dispute” includes—

(a)

any refusal to accept a claim, and

(b)

any other difference (whether contractual or not),

“party” means a party to an arbitration,

“rules” means the Scottish Arbitration Rules (see section 6), and

(2) References in this Act to “an arbitration”, “the arbitration” or “arbitrations” arereferences to a particular arbitration process or, as the case may be, to particulararbitration processes.

(3) References in this Act to a tribunal conducting an arbitration are references to thetribunal doing anything in relation to the arbitration, including—

(a)

making a decision about procedure or evidence, and

(b)

making an award.

3 Seat of arbitration

(1) An arbitration is “seated in Scotland” if—

(a) Scotland is designated as the juridical seat of the arbitration—

(i)

by the parties,

(ii)

by any third party to whom the parties give power to so designate, or

(iii)

where the parties fail to designate or so authorise a third party, by thetribunal, or

(b)

in the absence of any such designation, the court determines that Scotland is to bethe juridical seat of the arbitration.

(2) The fact that an arbitration is seated in Scotland does not affect the substantive law to beused to decide the dispute.

Arbitration agreements

4 Arbitration agreement

An “arbitration agreement” is an agreement to submit a present or future dispute to arbitration (including any agreement which provides for arbitration in accordance with arbitration provisions contained in a separate document).

5 Separability

(1) An arbitration agreement which forms (or was intended to form) part only of anagreement is to be treated as a distinct agreement.

(2) An arbitration agreement is not void, voidable or otherwise unenforceable only becausethe agreement of which it forms part is void, voidable or otherwise unenforceable.

(3) A dispute about the validity of an agreement which includes an arbitration agreementmay be arbitrated in accordance with that arbitration agreement.

Scottish Arbitration Rules

6 Scottish Arbitration Rules

The Scottish Arbitration Rules set out in schedule 1 are to govern every arbitrationseated in Scotland (unless, in the case of a default rule, the parties otherwise agree).

7 Mandatory rules

The following rules, called “mandatory rules”, cannot be modified or disapplied (by anarbitration agreement, by any other agreement between the parties or by any othermeans) in relation to any arbitration seated in Scotland—

rule 3 (arbitrator to be an individual) 

rule 8 (duty to disclose any conflict of interests)

rules 12 to 16 (removal or resignation of arbitrator or dismissal of tribunal)

rules 19 to 21 (jurisdiction of tribunal)

rules 23 and 24 (general duties of tribunal and parties)

rule 42 (securing attendance of witnesses and disclosure of evidence)

rule 50 (provisional awards)

rule 53 (power to withhold award if fees or expenses not paid)

rule 58 (arbitrators’ fees and expenses)

rule 61 (ban on pre-dispute agreements about liability for arbitration expenses)

rules 65, 66, 68 and 69 (challenging awards: jurisdiction and serious irregularity)

rules 70 to 72 (immunity)

rule 73 (loss of right to object)

rule 74 (independence of arbitrator)

rule 76 (death of arbitrator)

rule 78 (rules applicable to umpires)

8 Default rules

(1) The non-mandatory rules are called the “default rules”.

(2) A default rule applies in relation to an arbitration seated in Scotland only in so far as theparties have not agreed to modify or disapply that rule (or any part of it) in relation tothat arbitration.

(3) Parties may so agree—

(a)

in the arbitration agreement, or

(b)

by any other means at any time before or after the arbitration begins.

(4) Parties are to be treated as having agreed to modify or disapply a default rule—

(a)

 if or to the extent that the rule is inconsistent with or disapplied by—

(i)

the arbitration agreement,

(ii)

any arbitration rules (for example, the UNCITRAL Arbitration Rules orother institutional rules) which the parties agree are to govern thearbitration, or

(iii)

anything done with the agreement of the parties, or

(b)

if they choose a law other than Scots law as the applicable law in respect of therule’s subject matter.

This subsection does not affect the generality of subsections (2) and (3).

Suspension of legal proceedings

9 Suspension of legal proceedings

(1) The court must, on an application by a party to an arbitration agreement, sist legalproceedings on a dispute if the arbitration agreement provides that the dispute is to beresolved by arbitration (immediately or after the exhaustion of other dispute resolutionprocedures).

(2) But the court need not sist the legal proceedings if satisfied that the arbitrationagreement is void, unenforceable or incapable of being performed.

(3) An application to sist legal proceedings is valid only if the applicant—

(a)

has given notice of the application to the parties to the legal proceedings,

(b)

 has taken any appropriate procedural step to acknowledge those proceedings, and

(c)

 has not taken any step in those proceedings to answer the substantive claim.

(4) Any provision in an arbitration agreement which prevents the bringing of the legalproceedings is void in relation to any proceedings which the court refuses to sist.

This subsection does not apply to statutory arbitrations.

(5) This section applies regardless of whether the arbitration concerned is to be seated in Scotland.

Enforcing and challenging arbitral awards etc.

10 Enforcement of arbitral awards

(1) The court may, on an application by any party, order that a tribunal’s award may beenforced as if it were an extract registered decree bearing a warrant for executiongranted by the court.

(2) No such order may be made if the court is satisfied that the tribunal which made theaward did not have jurisdiction to do so (and the court may restrict the extent of its orderif satisfied that the tribunal did not have jurisdiction to make a part of the award).

(3) But a party may not object on the ground that the tribunal did not have jurisdiction if theparty has lost the right to raise that objection by virtue of the Scottish Arbitration Rules(see rule 73).

(4) Unless the parties otherwise agree, a tribunal’s award may be registered for execution inthe Books of Council and Session or in the sheriff court books (provided that thearbitration agreement is itself so registered).

(5) This section applies regardless of whether the arbitration concerned was seated inScotland.

(6) Nothing in this section affects any other right to rely on or enforce an award inpursuance of—

(a)

 sections 17 to 19, or

(b)

 any other enactment or rule of law.

(7) In this section, “court” means the sheriff or the Court of Session.

11 Court intervention in arbitrations

(1) No legal proceedings are competent in respect of—

(a)

 a tribunal’s award, or

(b)

 any other act or omission by a tribunal when conducting an arbitration,

except as provided for in the Scottish Arbitration Rules (in so far as they apply to thatarbitration) or in any other provision of this Act.

(2) In particular, a tribunal’s award is not subject to review or appeal in any legalproceedings except as provided for in Part 8 of the Scottish Arbitration Rules.

(3) It is not competent for a party to raise the question of a tribunal’s jurisdiction with thecourt except—

(a)

where objecting to an order being made under section 10, or

(b)

 as provided for in the Scottish Arbitration Rules (see rules 21, 22 and 65).

12 Persons who take no part in arbitral proceedings

(1) A person alleged to be a party to an arbitration but who takes no part in the arbitrationmay, by court proceedings, question—

(a)

whether there is a valid arbitration agreement (or, in the case of a statutoryarbitration, whether the enactment providing for arbitration applies to the dispute),

(b)

 whether the tribunal is properly constituted, or

(c)

what matters have been submitted to arbitration in accordance with the arbitrationagreement,

and the court may determine such a question by making such declaration, or by grantingsuch interdict or other remedy, as it thinks appropriate.

(2) Such a person has the same right as a party who participates in the arbitration to appealagainst any award made in the arbitration under rule 65 or 66 (jurisdictional and seriousirregularity appeals) and rule 68(2) does not apply to such an appeal.

13 Anonymity in legal proceedings

(1) Where an arbitration is the subject of legal proceedings, the identity of a party in thearbitration must not be disclosed outwith the court—

(a)

by the court, or

(b)

 in any report of the proceedings.

(2) Any such disclosure in such a report is to be treated as a breach of an obligation ofconfidence unless the disclosure—

(a)

is authorised, expressly or impliedly, by the parties (or can reasonably beconsidered as having been so authorised),

(b)

is required—

(i)

in order to comply with any enactment or rule of law,

(ii)

 for the proper performance of the discloser’s public functions, or

(iii)

in order to enable any public body or office-holder to perform publicfunctions properly,

(c)

can reasonably be considered as being needed to protect a party’s lawful interests,

(d)

 is in the public interest,

(e)

 is necessary in the interests of justice, or

(f)

 is made in circumstances in which the discloser would have absolute privilege had the disclosed information been defamatory.

Statutory arbitration

14 Statutory arbitration: special provisions

(1) “Statutory arbitration” is arbitration pursuant to an enactment which provides for adispute to be submitted to arbitration.

(2) References in the Scottish Arbitration Rules (or in any other provision of this Act) to anarbitration agreement are, in the case of a statutory arbitration, references to theenactment which provides for a dispute to be resolved by arbitration.

(3) None of the Scottish Arbitration Rules (or other provisions of this Act) apply to astatutory arbitration if or to the extent that they are excluded by, or are inconsistent with,any provision made by virtue of any other enactment relating to the arbitration.

(4) Every statutory arbitration is to be taken to be seated in Scotland.

(5) The following rules do not apply in relation to statutory arbitration—

rule 41 (extension of time limits)

rule 68(8) (power to declare provision of arbitration agreement void)

(6) Despite rule 39, parties to a statutory arbitration may not agree to

(a)

consolidate the arbitration with another arbitration,

(b)

hold concurrent hearings, or

(c)

authorise the tribunal to order such consolidation or the holding of concurrenthearings,

unless the arbitrations or hearings are to be conductedunder the same enactment.

15 Power to adapt enactments providing for statutory arbitration

Ministers may by order—

(a)

modify any of the Scottish Arbitration Rules, or any other provisions of this Act,in so far as they apply to statutory arbitrations (or to particular statutoryarbitrations),

(b)

make such modifications of enactments which provide for disputes to besubmitted to arbitration as they consider appropriate in consequence of, or in orderto give full effect to, any of the Scottish Arbitration Rules or any other provisionsof this Act.

Recognition and enforcement of New York Convention awards

16 New York Convention awards

(1) A “Convention award” is an award made in pursuance of a written arbitration agreement in the territory of a state (other than the United Kingdom) which is a party to the New York Convention.

(2) An award is to be treated for the purposes of this section as having been made at the seat of the arbitration. 

(3) A declaration by Her Majesty by Order in Council that a state is a party to the Convention (or is a party in respect of any territory) is conclusive evidence of that fact.

17 Recognition and enforcement of New York Convention awards

(1) A Convention award is to be recognised as binding on the persons as between whom it was made (and may accordingly be relied on by those persons in any legal proceedings in Scotland). 

(2) The court may order that a Convention award may be enforced as if it were an extract registered decree bearing a warrant for execution granted by the court.

18 Refusal of recognition or enforcement

(1) Recognition or enforcement of a Convention award may be refused only in accordance with this section. 

(2) Recognition or enforcement of a Convention award may be refused if the person against whom it is invoked proves—

(a)

that a party was under some incapacity under the law applicable to the party,

(b)

that the arbitration agreement was invalid under the law which the parties agree should govern it (or, failing any indication of that law, under the law of the country where the award was made),

(c)

that the person—

(i)

was not given proper notice of the arbitral process or of the appointment of the tribunal, or

(ii)

was otherwise unable to present the person’s case,

(d)

that the tribunal was constituted, or the arbitration was conducted, otherwise than in accordance with—

(i)

the agreement of the parties, or

(ii)

failing such agreement, the law of the country where the arbitration took place.

(3) Recognition or enforcement of a Convention award may also be refused if the person against whom it is invoked proves that the award— 

(a)

eals with a dispute not contemplated by or not falling within the submission to arbitration,

(b)

 contains decisions on matters beyond the scope of that submission,

(c)

is not yet binding on the person, or

(d)

has been set aside or suspended by a competent authority.

(4) Recognition or enforcement of a Convention award may also be refused if— 

(a)

the award relates to a matter which is not capable of being settled by arbitration, or

(b)

to do so would be contrary to public policy.

(5) A Convention award containing decisions on matters not submitted to arbitration may be recognised or enforced to the extent that it contains decisions on matters which were so submitted which are separable from decisions on matters not so submitted. 

(6) The court before which a Convention award is sought to be relied on may, if an application for the setting aside or suspension of the award is made to a competent authority—

(a)

 adjourn the decision on recognition or enforcement of the award,

(b)

on the application of the party claiming recognition or enforcement, order the other party to give suitable security.

(7) In this section “competent authority” means a person who has authority to set aside or suspend the Convention award concerned in the country in which (or under the law of which) the Convention award concerned was made.

19 Evidence to be produced when seeking recognition or enforcement

(1) A person seeking recognition or enforcement of a Convention award must produce—

(a)

the duly authenticated original award (or a duly certified copy of it), and

(b)

the original arbitration agreement (or a duly certified copy of it).

(2) Such a person must also produce a translation of any award or agreement which is in a language other than English (certified by an official or sworn translator or by a diplomatic or consular agent).

20 Saving for other bases of recognition or enforcement

Nothing in sections 17 to 19 affects any other right to rely on or enforce a Convention award in pursuance of any other enactment or rule of law. 

Supplementary

21 Prescription and limitation

(1) The Prescription and Limitation (Scotland) Act 1973 (c.52) is amended as follows.

(2) In section 4 (positive prescription: interruption)—

(a)

in subsection (3)(a), for the words from “and” to “served” substitute “, the datewhen the arbitration begins”,

(b)

for subsection (4) substitute—

“(4)

An arbitration begins for the purposes of this section—

(a)

when the parties to the arbitration agree that it begins, or

(b)

in the absence of such agreement, in accordance with rule 1 of the Scottish Arbitration Rules (see section 6 of, and schedule 1 to, the Arbitration (Scotland) Act 2009 (asp 00).”.

(3) In section 9 (negative prescription: interruption)—

(a)

in subsection (3), for the words from “and” to “served” substitute “the date whenthe arbitration begins”,

(b)

in subsection (4), for “preliminary notice” substitute “the date when the arbitrationbegins”.

(4) After section 19C, insert—

“19D

Interruption of limitation period: arbitration

(1)

Any period during which an arbitration is ongoing in relation to a matter is tobe disregarded in any computation of the period specified in section 17(2),18(2), 18A(1) or 18B(2) of this Act in relation to that matter.

(2)

In this section, “arbitration” means—

(a)

any arbitration in Scotland,

(b)

any arbitration in a country other than Scotland, being an arbitration anaward in which would be enforceable in Scotland.”.

(5) In section 22A(4), for the words from “and” to “served” substitute “the date when thearbitration begins (within the meaning of section 4(4) of this Act)”.

(6) After section 22C, insert—

“22CA

Interruption of limitation period for 1987 Act actions: arbitration

(1)

Any period during which an arbitration is ongoing in relation to a matter is tobe disregarded in any computation of the period specified in section 22B(2) or22C(2) of this Act in relation to that matter.

(2)

In this section, “arbitration” means—

(a)

any arbitration in Scotland,

(b)

any arbitration in a country other than Scotland, being an arbitration anaward in which would be enforceable in Scotland.”.

22 Arbitral appointments referee

(1) Ministers may, by order, authorise persons or types of person who may act as an arbitralappointments referee for the purposes of the Scottish Arbitration Rules.

(2) Ministers must, when making such an order, have regard to the desirability of ensuringthat arbitral appointments referees—

(a)

have experience relevant to making arbitral appointments, and

(b)

are able to provide training, and to operate disciplinary procedures, designed toensure that arbitrators conduct themselves appropriately.

23 Power of judge to act as arbitrator or umpire

(1) A judge may act as an arbitrator or umpire only where—

(a)

the dispute being arbitrated appears to the judge to be of commercial character,and

(b)

the Lord President, having considered the state of Court of Session business, hasauthorised the judge to so act.

(2) A fee of such amount as Ministers may by order prescribe is payable in the Court ofSession for the services of a judge acting as an arbitrator or umpire.

(3) Any jurisdiction exercisable by the Outer House under the Scottish Arbitration Rules (orany other provision of this Act) in relation to—

(a)

a judge acting as a sole arbitrator or umpire, or

(b)

a tribunal which the judge forms part of,

is to be exercisable instead by the Inner House (and the Inner House’s decision on anymatter is final).

(4) In this section—

“judge”

means a judge of the Court of Session, and

“Lord President”

means the Lord President of the Court of Session.

24 Amendments to UNCITRAL Model Law or New York Convention

Ministers may by order modify—

(a)

the Scottish Arbitration Rules,

(b)

any other provision of this Act, or

(c)

any enactment which provides for disputes to be resolved by arbitration,

in such manner as they consider appropriate in consequence of any amendment made tothe UNCITRAL Model Law or the New York Convention.

25 Amendment of Conveyancing (Scotland) Act 1924 (c.27)

In section 46 of the Conveyancing (Scotland) Act 1924—

(a)

in subsection (2), for “This section” substitute “Subsection (1)”, and

(b)

after subsection (2) insert—

“(3) Where—(a)

an arbitral award orders the reduction of a deed or other documentrecorded in the Register of Sasines (or forming a midcouple or link oftitle in a title recorded in that Register), and

(b)

the court orders that the award may be enforced in accordance withsection 10 of the Arbitration (Scotland) Act 2009 (asp 00),

subsection (1) applies to the arbitral award as it applies to a decree of reductionof a deed recorded in the Register of Sasines.”.

26 Articles of Regulation 1695

The 25th Act of the Articles of Regulation 1695 does not apply in relation to arbitration.

27 Repeals

The repeals of the enactments specified in column 1 of schedule 2 have effect to theextent specified in column 2.

28 Arbitrability of disputes

Nothing in this Act makes any dispute capable of being arbitrated if, because of itssubject-matter, it would not otherwise be capable of being arbitrated.Final provisions

Final Provisions

29 Interpretation

(1) In this Act, unless the contrary intention appears—

“arbitral appointments referee” means a person authorised under section 22,

“arbitration” has the meaning given by section 2,

(2) This Act applies in relation to arbitrations and disputes between three or more parties asit applies in relation to arbitrations and disputes between two parties (with references toboth parties being read in such cases as references to all the parties).

30 Ancillary provision

(1) Ministers may by order make any supplementary, incidental, consequential, transitional,transitory or saving provision which they consider appropriate for the purposes of, or inconnection with, or for the purposes of giving full effect to, any provision of this Act.

(2) Such an order may modify any enactment, instrument or document.

31 Orders

(1) Any power of Ministers to make orders under this Act—

(a)

is exercisable by statutory instrument, and

(b)

includes power to make—

(i)

any supplementary, incidental, consequential, transitional, transitory orsaving provision which Ministers consider appropriate,

(ii)

different provision for different purposes.

(2) A statutory instrument containing such an order (or an Order in Council made undersection 16) is subject to annulment in pursuance of a resolution of the ScottishParliament.

This subsection does not apply—

(a)

to orders made under section 33(2) (commencement orders), or

(b)

where subsection (3) makes contrary provision.

(3) An order—

(a)

under section 15 or 30 which adds to, replaces or omits any text in this or anyother Act, or

(b)

under section 24,

may be made only if a draft of the statutory instrument containing the order has been laid before, and approved by resolution of, the Scottish Parliament.

32 Crown application

(1) This Act binds the Crown.

(2) Her Majesty may be represented in any arbitration to which she is a party otherwise thanin right of the Crown by such person as she may appoint in writing under the Royal SignManual.

(3) The Prince and Steward of Scotland may be represented in any arbitration to which he isa party by such person as he may appoint.

(4) References in this Act to a party to an arbitration are, where subsection (2) or (3)applies, to be read as references to the appointed representative.

33 Commencement

(1) The following provisions come into force on Royal Assent—

section 2

sections 29 to 32

(2) Other provisions come into force on the day Ministers by order appoint.

34 Short title

This Act is called the Arbitration (Scotland) Act 2009.

SCHEDULE 1 

(introduced by section 6)

ARBITRATION RULES

Mandatory rules are marked “M”. 

Default rules are marked “D”. 

PART 1 - COMMENCEMENT AND CONSTITUTION OF TRIBUNAL ETC.

Rule 1 Commencement of arbitration  D

An arbitration begins when a party to an arbitration agreement gives the other party notice submitting a dispute to arbitration in accordance with the agreement.

Rule 2 Appointment of tribunal  D

An arbitration agreement need not appoint (or provide for appointment of) the tribunal, but if it does so provide it may— 

(a)

specify who is to form the tribunal,

(b)

require the parties to appoint the tribunal,

(c)

permit another person to appoint the tribunal, or

(d)

provide for the tribunal to be appointed in any other way.

Rule 3 Arbitrator to be an individual  M

Only an individual may act as an arbitrator.

Rule 4 Eligibility to act as arbitrator  D

An individual is ineligible to act as an arbitrator if the individual is— 

(a)

aged under 16, or

(b)

an incapable adult (within the meaning of section 1(6) of the Adults with Incapacity (Scotland) Act 2000 (asp 4)).

Rule 5 Number of arbitrators  D

Where there is no agreement as to the number of arbitrators, the tribunal is to consist of a sole arbitrator.

Rule 6 Method of appointment  D

The tribunal is to be appointed as follows— 

(a)

where there is to be a sole arbitrator, the parties must appoint an eligible individual jointly (and must do so within 28 days of either party requesting the other to do so),

(b)

where there is to be a tribunal consisting of two or more arbitrators—

(i)

each party must appoint an eligible individual as an arbitrator (and must do so within 28 days of the other party requesting it to do so), and

(ii)

where more arbitrators are to be appointed, the arbitrators appointed by the parties must appoint eligible individuals as the remaining arbitrators.

Rule 7 Failure of appointment procedure D

(1) Where an arbitrator is not appointed in accordance with—

(a)

any appointment procedure set out in the arbitration agreement (or otherwise agreed between the parties), or

(b)

rule 6,

either party may refer the matter to an arbitral appointments referee.

(2) The referring party must send a copy of the reference to the other party. 

(3) That other party may object to the reference within 7 days of receiving a copy of it by sending notice of objection to— 

(a)

the referring party, and

(b)

the arbitral appointments referee.

(4) If— 

(a)

no such objection is made within that 7 day period, or

(b)

the other party waives the right to object before the end of that period,

the arbitral appointments referee may make the necessary appointment.

(5) Where— 

(a)

a party objects to the arbitral appointments referee making an appointment,

(b)

an arbitral appointments referee fails to make an appointment within 21 days of the matter being referred, or

(c)

the parties agree not to refer the matter to an arbitral appointments referee,

the court may, on an application by any party, make the necessary appointment.

(6) The court’s decision on whom to appoint is final.

(7) Before making an appointment under this rule, the arbitral appointments referee or, as the case may be, the court must have regard to—

(a)

the nature and subject-matter of the dispute,

(b)

the terms of the arbitration agreement (including, in particular, any terms relating to appointment of arbitrators), and

(c)

the skills, qualifications, knowledge and experience which would make an individual suitable to determine the dispute.

(8) Where an arbitral appointments referee or the court makes an appointment under this rule, the arbitration agreement has effect as if it required that appointment.

Rule 8 Duty to disclose any conflict of interests  M

(1) This rule applies to—

(a)

arbitrators, and

(b)

individuals who have been asked to be an arbitrator but who have not yet been appointed.

(2) An individual to whom this rule applies must, without delay, disclose to the parties any circumstances known to the individual (or which become known to the individual before the arbitration ends) which might reasonably be considered relevant when considering whether the individual is impartial and independent.

Rule 9 Arbitrator’s tenure  D

An arbitrator’s tenure ends if—

(a)

the arbitrator becomes ineligible to act as an arbitrator (see rule 4),

(b)

the tribunal revokes the arbitrator’s appointment (see rule 10),

(c)

the arbitrator is removed by the parties, a third party or the Outer House (see rules 11 and 12),

(d)

the Outer House dismisses the tribunal of which the arbitrator forms part (see rule 13), or

(e)

the arbitrator resigns (see rule 15) or dies (see rule 76).

Rule 10 Challenge to appointment of arbitrator  D

(1) A party may object to the tribunal about the appointment of an arbitrator. 

(2) An objection is competent only if— 

(a)

it is made on the ground that the arbitrator—

(i)

is not impartial and independent,

(ii)

has not treated the parties fairly, or

(iii)

does not have a qualification which the parties agreed (before the arbitrator’s appointment) that the arbitrator must have.

(b)

it states the facts on which it is based,

(c)

it is made within 14 days of the objector becoming aware of those facts, and

(d)

notice of it is given to the other party.

(3) The tribunal may deal with an objection by confirming or revoking the appointment. 

(4) If the tribunal fails to make a decision within 14 days of receiving a competent objection, the appointment is revoked.

Rule 11 Removal of arbitrator by parties  D

(1) An arbitrator may be removed— 

(a)

by the parties acting jointly, or

(b)

by any third party to whom the parties give power to remove an arbitrator.

(2) A removal is effected by notifying the arbitrator.

Rule 12 Removal of arbitrator by court M

The Outer House may remove an arbitrator if satisfied on the application by any party— 

(a)

that the arbitrator is not impartial and independent,

(b)

that the arbitrator has not treated the parties fairly,

(c)

that the arbitrator is incapable of acting as an arbitrator in the arbitration (or that there are justifiable doubts about the arbitrator’s ability to so act),

(d)

that the arbitrator does not have a qualification which the parties agreed (before the arbitrator’s appointment) that the arbitrator must have,

(e)

that substantial injustice has been or will be caused to that party because the arbitrator has failed to conduct the arbitration in accordance with—

(i)

the arbitration agreement,

(ii)

these rules (in so far as they apply), or

(iii)

any other agreement by the parties relating to conduct of the arbitration.

Rule 13 Dismissal of tribunal by court  M

The Outer House may dismiss the tribunal if satisfied on the application by a party that substantial injustice has been or will be caused to that party because the tribunal has failed to conduct the arbitration in accordance with— 

(a)

the arbitration agreement,

(b)

these rules (in so far as they apply), or

(c)

any other agreement by the parties relating to conduct of the arbitration.

Rule 14 Removal and dismissal by court: supplementary  M

(1) The Outer House may remove an arbitrator, or dismiss the tribunal, only if—

(a)

the arbitrator or, as the case may be, tribunal has been—

(i)

notified of the application for removal or dismissal, and

(ii)

given the opportunity to make representations, and

(b)

the Outer House is satisfied—

(i)

that any recourse available under rule 10 has been exhausted, and

(ii)

that any available recourse to a third party who the parties have agreed is to have power to remove an arbitrator (or dismiss the tribunal) has been exhausted.

(2) A decision of the Outer House under rule 12 or 13 is final.

(3) The tribunal may continue with the arbitration pending the Outer House’s decision under rule 12 or 13.

Rule 15 Resignation of arbitrator  M

(1) An arbitrator may resign (by giving notice of resignation to the parties and any other arbitrators) if— 

(a)

the parties consent to the resignation,

(b)

the arbitrator has a contractual right to resign in the circumstances,

(c)

the arbitrator’s appointment is challenged under rule 10 or 12,

(d)

the parties disapply or modify rule 33(1) (expert opinions) after the arbitrator is appointed, or

(e)

the Outer House has authorised the resignation.

(2) The Outer House may authorise a resignation only if satisfied, on an application by the arbitrator, that it is reasonable for the arbitrator to resign.

Rule 16 Liability etc. of arbitrator when tenure ends  M

(1) Where an arbitrator’s tenure ends, the Outer House may, on an application by any party or the arbitrator concerned, make such order as it thinks fit— 

(a)

about the arbitrator’s entitlement (if any) to fees and expenses,

(b)

about the repaying of fees or expenses already paid to the arbitrator,

(c)

where the arbitrator has resigned, about the arbitrator’s liability in respect of acting as an arbitrator.

(2) The Outer House must, when considering whether to make an order in relation to an arbitrator who has resigned, have particular regard to whether the resignation was made in accordance with rule 15.

Rule 17 Reconstitution of tribunal  D

(1) Where an arbitrator’s tenure ends, the tribunal must be reconstituted— 

(a)

in accordance with the procedure used to constitute the original tribunal, or

(b)

where that procedure fails, in accordance with rules 6 and 7.

(2) It is for the reconstituted tribunal to decide the extent, if any, to which previous proceedings (including any award made, appointment by or other act done by the previous tribunal) should stand. 

(3) The reconstituted tribunal’s decision does not affect a party’s right to object or appeal on any ground which arose before the tribunal made its decision.

Rule 18 Arbitrators nominated in arbitration agreements  D

Any provision in an arbitration agreement which specifies who is to be an arbitrator ceases to have effect when the specified individual’s tenure as an arbitrator ends.

PART 2 - JURISDICTION OF TRIBUNAL

Rule 19 Power of tribunal to rule on own jurisdiction  M

The tribunal may rule on— 

(a)

whether there is a valid arbitration agreement (or, in the case of a statutory arbitration, whether the enactment providing for arbitration applies to the dispute),

(b)

whether the tribunal is properly constituted, and

(c)

what matters have been submitted to arbitration in accordance with the arbitration agreement.

Rule 20 Objections to tribunal’s jurisdiction  M

(1) Any party may object to the tribunal on the ground that the tribunal does not have, or has exceeded, its jurisdiction in relation to any matter.

(2) An objection must be made—

(a)

before, or as soon as is reasonably practicable after, the matter to which the objection relates is first raised in the arbitration, or

(b)

where the tribunal considers that circumstances justify a later objection, by such later time as it may allow,

but, in any case, an objection may not be made after the tribunal makes its last award.

(3) If the tribunal upholds an objection it must—

(a)

end the arbitration in so far as it relates to a matter over which the tribunal has ruled it does not have jurisdiction, and

(b)

set aside any provisional or part award already made in so far as the award relates to such a matter.

(4) The tribunal may— 

(a)

rule on an objection independently from dealing with the subject-matter of the dispute, or

(b)

delay ruling on an objection until it makes its award on the merits of the dispute (and include its ruling in that award),

but, where the parties agree which of these courses the tribunal should take, the tribunal must proceed accordingly.

Rule 21 Appeal against tribunal’s ruling on jurisdictional objection  M

(1) A party may, no later than 14 days after the tribunal’s decision on an objection under rule 20, appeal to the Outer House against the decision.

(2) The tribunal may continue with the arbitration pending determination of the appeal. 

(3) The Outer House’s decision on the appeal is final.

Rule 22 Referral of point of jurisdiction  D

(1) The Outer House may, on an application by any party, determine any question as to the tribunal’s jurisdiction. 

(2) An application under this rule is valid only if—

(a)

the other party has consented to it being made, or

(b)

the tribunal has consented to it being made and the court is satisfied—

(i)

that determining the question is likely to produce substantial savings in expenses,

(ii)

that the application was made without delay, and

(iii)

that there is a good reason why the question should be determined by the court.

(3) The tribunal may continue with the arbitration pending determination of an application.

(4) The Outer House’s determination of the question is final (as is any decision by the Outer House as to whether an application is valid).

PART 3 - GENERAL DUTIES

Rule 23 General duty of the tribunal  M

(1) The tribunal must— 

(a)

be impartial and independent,

(b)

treat the parties fairly, and

(c)

conduct the arbitration—

(i)

without unnecessary delay, and

(ii)

without incurring unnecessary expense.

(2) Treating the parties fairly includes giving each party a reasonable opportunity to put its case and to deal with the other party’s case.

Rule 24 General duty of the parties  M

The parties must ensure that the arbitration is conducted— 

(a)

without unnecessary delay, and

(b)

without incurring unnecessary expense.

Rule 25 Confidentiality  D

(1) Disclosure by the tribunal, any arbitrator or a party of confidential information relating to the arbitration is to be treated as a breach of an obligation of confidence unless the disclosure— 

(a)

is authorised, expressly or impliedly, by the parties (or can reasonably be considered as having been so authorised),

(b)

is required by the tribunal or is otherwise made to assist or enable the tribunal to conduct the arbitration,

(c)

is required—

(i)

in order to comply with any enactment or rule of law,

(ii)

for the proper performance of the discloser’s public functions, or

(iii)

in order to enable any public body or office-holder to perform public functions properly,

(d)

can reasonably be considered as being needed to protect a party’s lawful interests,

(e)

is in the public interest,

(f)

is necessary in the interests of justice, or

(g)

is made in circumstances in which the discloser would have absolute privilege had the disclosed information been defamatory.

(2) The tribunal and the parties must take reasonable steps to prevent unauthorised disclosure of confidential information by any third party involved in the conduct of the arbitration. 

(3) The tribunal must, at the outset of the arbitration, inform the parties of the obligations which this rule imposes on them. 

(4) “Confidential information”, in relation to an arbitration, means any information relating to—

(a)

the dispute,

(b)

the arbitral proceedings, or

(c)

the award,

which is not, and has never been, in the public domain.

Rule 26 Tribunal deliberations  D

(1) The tribunal’s deliberations may be undertaken in private and accordingly need not bedisclosed to the parties.

(2) But, where an arbitrator fails to participate in any of the tribunal’s deliberations, thetribunal must disclose that fact (and the extent of the failure) to the parties.

PART 4 - ARBITRAL PROCEEDINGS

Rule 27 Procedure and evidence  D

(1) It is for the tribunal to determine—

(a)

the procedure to be followed in the arbitration, and

(b)

the admissibility, relevance, materiality and weight of any evidence.

(2) In particular, the tribunal may determine—

(a)

when and where the arbitration is to be conducted,

(b)

whether parties are to submit claims or defences and, if so, when they should doso and the extent to which claims or defences may be amended,

(c)

whether any documents or other evidence should be disclosed by or to any partyand, if so, when such disclosures are to be made and to whom copies of discloseddocuments and information are to be given,

(d)

whether any and, if so, what questions are to be put to and answered by theparties,

(e)

whether and, if so, to what extent the tribunal should take the initiative inascertaining the facts and the law,

(f)

the extent to which the arbitration is to proceed by way of—

(i)

hearings for the questioning of parties,

(ii)

written or oral argument,

(iii)

presentation or inspection of documents or other evidence, or

(iv)

submission of documents or other evidence,

(g)

the language to be used in the arbitration (and whether a party is to supplytranslations of any document or other evidence),

(h)

whether to apply rules of evidence used in legal proceedings or any other rules ofevidence.

Rule 28 Place of arbitration  D

The tribunal may meet, and otherwise conduct the arbitration, anywhere it chooses (in oroutwith Scotland).

Rule 29 Tribunal decisions  D

(1) Where the tribunal is unable to make a decision unanimously (including any decision onan award), a decision made by the majority of the arbitrators is sufficient.

(2) Where there is neither unanimity nor a majority in favour of or opposed to making anydecision—

(a)

the decision is to be made by the arbitrator nominated to chair the tribunal, or

(b)

where no person has been so nominated, the decision is to be made by an umpireappointed—

(i)

by the tribunal, or

(ii)

where the tribunal fails to make an appointment within 14 days of beingrequested to do so by either party or any arbitrator, by an arbitralappointments referee (at the request of a party or an arbitrator).

Rule 30 Tribunal directions  D

(1) The tribunal may give such directions to the parties as it considers appropriate for thepurposes of conducting the arbitration.

(2) A party must comply with such a direction by such time as the tribunal specifies.

Rule 31 Power to apppoint clerk, agents or employees etc.  D

(1) The tribunal may appoint a clerk (and such other agents, employees or other persons asit thinks fit) to assist it in conducting the arbitration.

(2) But the parties’ consent is required for any appointment in respect of which significantexpenses are likely to arise.

Rule 32 Party representatives  D

(1) A party may be represented in the arbitration by a lawyer or any other person.

(2) But the party must, before representation begins, give notice of the representative—

(a)

to the tribunal, and

(b)

to the other party.

Rule 33 Experts  D

(1) The tribunal may obtain an expert opinion on any matter arising in the arbitration.

(2) The parties must be given a reasonable opportunity—

(a)

to make representations about any written expert opinion, and

(b)

to hear any oral expert opinion and to ask questions of the expert giving it.

Rule 34 Powers relating to property  D

The tribunal may direct a party—

(a)

to allow the tribunal, an expert or another party—

(i)

to inspect, photograph, preserve or take custody of any property which thatparty owns or possesses which is the subject of the arbitration (or as towhich any question arises in the arbitration), or

(ii)

to take samples from, or conduct an experiment on, any such property, or

(b)

to preserve any document or other evidence which the party possesses or controls.

Rule 35 Oaths or affirmations  D

The tribunal may—

(a)

direct that a party or witness is to be examined on oath or affirmation, and

(b)

administer an oath or affirmation for that purpose.

Rule 36 Failure to submit claim or defence timeously  D

(1) Where—

(a)

a party unnecessarily delays in submitting or in otherwise pursuing a claim,

(b)

the tribunal considers that there is no good reason for the delay, and

(c)

the tribunal is satisfied that the delay—

(i)

gives, or is likely to give, rise to a substantial risk that it will not bepossible to resolve the issues in that claim fairly, or

(ii)

has caused, or is likely to cause, serious prejudice to the other party,

the tribunal must end the arbitration in so far as it relates to the subject-matter of theclaim and may make such award (including an award on expenses) as it considersappropriate in consequence of the claim.

(2) Where—

(a)

a party unnecessarily delays in submitting a defence to the tribunal, and

(b)

the tribunal considers that there is no good reason for the delay,

the tribunal must proceed with the arbitration (but the delay is not, in itself, to be treatedas an admission of anything).

Rule 37 Failure to attend hearing or provide evidence  D

Where—

(a)

a party fails—

(i)

to attend a hearing which the tribunal requested the party to attend areasonable period in advance of the hearing, or

(ii)

to produce any document or other evidence requested by the tribunal, and

(b)

the tribunal considers that there is no good reason for the failure,

the tribunal may proceed with the arbitration, and make its award, on the basis of theevidence (if any) before it.

Rule 38 Failure to comply with tribunal direction or arbitration agreement  D

(1) Where a party fails to comply with—

(a)

any direction made by the tribunal (see rule 30), or

(b)

any obligation imposed by—

(i)

the arbitration agreement,

(ii)

these rules (in so far as they apply), or

(iii)

any other agreement by the parties relating to conduct of the arbitration,the tribunal may order the party to so comply.

(2) Where a party fails to comply with an order made under this rule, the tribunal may doany of the following—

(a)

direct that the party is not entitled to rely on any allegation or material which wasthe subject-matter of the order,

(b)

draw adverse inferences from the non-compliance,

(c)

proceed with the arbitration and make its award,

(d)

make such provisional award (including an award on expenses) as it considersappropriate in consequence of the non-compliance.

Rule 39 Consolidation of proceedings  D

(1) Parties may agree—

(a)

to consolidate the arbitration with another arbitration, or

(b)

to hold concurrent hearings.

(2) But the tribunal may not order such consolidation, or the holding of concurrent hearings,on its own initiative.

PART 5 - POWERS OF COURT IN RELATION TO ARBITRAL PROCEEDINGS

Rule 40 Referral of point of law  D

(1) The Outer House may, on an application by any party, determine any point of Scots lawarising in the arbitration.

(2) An application under this rule is valid only if—

(a)

the other party has consented to it being made, or

(b)

the tribunal has consented to it being made and the court is satisfied—

(i)

that determining the question is likely to produce substantial savings inexpenses,

(ii)

that the application was made without delay, and

(iii)

that there is a good reason why the question should be determined by thecourt.

(3) The tribunal may continue with the arbitration pending determination of the application.

(4) The Outer House’s determination of the question is final (as is any decision by the OuterHouse as to whether an application is valid).

Rule 41 Variation of time limits set by parties  D

(1) The court may, on an application by the tribunal or any party, vary any time limitrelating to the arbitration which is imposed—

(a)

in the arbitration agreement, or

(b)

by virtue of any other agreement between the parties.

(2) Such a variation may be made only if the court is satisfied—

(a)

that no arbitral process for varying the time limit is available, and

(b)

that someone would suffer a substantial injustice if no variation was made.

(3) It is for the court to determine the extent of any variation.

(4) The tribunal may continue with the arbitration pending determination of an application.

(5) The court’s decision on whether to make a variation (and, if so, on the extent of thevariation) is final.

Rule 42 Court’s power to order attendance of witnesses and disclosure of evidence  M

(1) The court may, on an application by the tribunal or any party, order any person—

(a)

to attend a hearing for the purposes of giving evidence to the tribunal, or

(b)

to disclose documents or other material evidence to the tribunal.

(2) But the court may not order a person to give any evidence, or to disclose anything,which the person would be entitled to refuse to give or disclose in civil proceedings.

(3) The tribunal may continue with the arbitration pending determination of an application.

(4) The court’s decision on whether to make an order is final.

Rule 43 Court’s other powers in relation to arbitration  D

(1) The court has the same power in an arbitration as it has in civil proceedings—

(a)

to appoint a person to safeguard the interests of any party lacking capacity,

(b)

to order the sale of any property in dispute in the arbitration,

(c)

to make an order securing any amount in dispute in the arbitration,

(d)

to make an order under section 1 of the Administration of Justice (Scotland) Act1972 (c.59),

(e)

to grant warrant for arrestment or inhibition,

(f)

to grant interdict (or interim interdict), or

(g)

to grant any other interim or permanent order.

(2) But the court may take such action only—

(a)

on an application by any party, and

(b)

if the arbitration has begun—

(i)

with the consent of the tribunal, or

(ii)

where the court is satisfied that the case is one of urgency.

(3) This rule applies—

(a)

to arbitrations which have begun,

(b)

where the court is satisfied—

(i)

that a dispute has arisen or might arise, and

(ii)

that an arbitration agreement provides that such a dispute is to be resolvedby arbitration.

(4) This rule does not affect—

(a)

any other powers which the court has under any enactment or rule of law inrelation to arbitrations, or

(b)

the tribunal’s powers.

PART 6 - AWARDS

Rule 44 Rules applicable to the substance of the dispute  D

(1) The tribunal must decide the dispute in accordance with—

(a)

the law chosen by the parties as applicable to the substance of the dispute, or

(b)

if no such choice is made (or where a purported choice is unlawful), the lawdetermined by the conflict of law rules which the tribunal considers applicable.

(2) Accordingly, the tribunal must not decide the dispute on the basis of generalconsiderations of justice, fairness or equity unless—

(a)

they form part of the law concerned, or

(b)

the parties otherwise agree.

(3) When deciding the dispute, the tribunal must have regard to—

(a)

the provisions of any contract relating to the substance of the dispute,

(b)

the normal commercial or trade usage of any undefined terms in the provisions ofany such contract,

(c)

any established commercial or trade customs or practices relevant to the substanceof the dispute, and

(d)

any other matter which the parties agree is relevant in the circumstances.

Rule 45 Remedies available to tribunal  D

The tribunal’s award may—

(a)

be of a declaratory nature,

(b)

order the payment of a sum of money in any currency (including a sum in respectof damages),

(c)

order a party to do or refrain from doing something (including ordering theperformance of a contractual obligation), or

(d)

order the rectification or reduction of any deed or other document (to the extentpermitted by the law governing the deed or document).

Rule 46 Interest  D

(1) The tribunal’s award may order that interest is to be paid on—

(a)

the whole or part of any amount which the award orders to be paid (or which ispayable in consequence of a declaratory award), in respect of any period up to thedate of the award,

(b)

the whole or part of any amount which is—

(i)

claimed in the arbitration and outstanding when the arbitration began, but

(ii)

paid before the tribunal made its award,

in respect of any period up to the date of payment

(c)

the outstanding amount of any amounts awarded (including any award ofarbitration expenses or pre-award interest under paragraph (a) or (b)) in respect ofany period from the date of the award up to the date of payment.

(2) An award ordering payment of interest may, in particular, specify—

(a)

the interest rate,

(b)

the manner in which interest is to be calculated (for example: whether it is simpleor compound interest),

(c)

the period for which interest is payable (including any rests which the tribunalconsiders appropriate).

(3) An award may make different interest provision in respect of different amounts.

(4) This rule does not affect any other power of the tribunal to award interest.

Rule 47 Restriction on awards  D

The tribunal’s award may not grant a remedy (or award any interest) which the Court ofSession would be unable to grant or award had it determined the dispute in the sameway as the tribunal.

Rule 48 Form of award  D

(1) The tribunal’s award must be signed by all arbitrators or all those assenting to the award.

(2) The tribunal’s award must state—

(a)

the seat of the arbitration,

(b)

when the award is made and when it takes effect,

(c)

the tribunal’s reasons for the award, and

(d)

whether any previous provisional or part award has been made (and the extent towhich any previous provisional award is superseded or confirmed).

(3) The tribunal’s award is made by delivering it to each of the parties in accordance withrule 79.

Rule 49 Award treated as made in Scotland  D

An award is to be treated as having been made in Scotland even if it is signed at, ordelivered to or from, a place outwith Scotland.

Rule 50 Provisional awards  M

(1) The tribunal may make a provisional award granting any relief on a provisional basiswhich it has the power to grant permanently.

(2) Despite rule 54, a provisional award is not final and accordingly is binding only—

(a)

to the extent specified in the award, or

(b)

until it is superseded by a subsequent award.

Rule 51 Part awards  D

(1) The tribunal may make more than one award at different times on different aspects ofthe matters to be determined.

(2) A “part award” is an award which decides some (but not all) of the matters which thetribunal is to decide in the arbitration.

(3) A part award must specify the matters to which it relates.

Rule 52 Draft awards  D

Before making an award, the tribunal—

(a)

may send a draft of its proposed award to the parties, and

(b)

if it does so, must consider any representations from the parties about the draftwhich the tribunal receives by such time as it specifies.

Rule 53 Power to withhold award on non-payment of fees or expenses  M

(1) The tribunal may refuse to send its award to the parties if any fees and expenses forwhich they are liable under rule 58 have not been paid in full.

(2) Where the tribunal so refuses, the court may (on an application by any party) order—

(a)

that the tribunal must deliver the award on the applicant paying into the court anamount equal to the fees and expenses demanded (or such lesser amount as maybe specified in the order),

(b)

that the amount paid into the court is to be used to pay the fees and expenseswhich the court determines as being properly payable, and

(c)

that the balance (if any) of the amount paid into the court is to be repaid to theapplicant.

(3) The court may make such an order only if the applicant has exhausted any availablearbitral process of appeal or review of the amount of the fees and expenses demanded.

(4) The court’s decision on an application under this rule is final.

Rule 54 Award to be final and binding  D

(1) The tribunal’s award is final and binding only on—

(a)

the parties, and

(b)

any person claiming through or under them.

(2) In particular, an award ordering the rectification or reduction of a deed or otherdocument is of no effect in so far as it would adversely affect the interests of any thirdparty acting in good faith.

(3) This rule does not affect the right of any person to challenge the award—

(a)

under Part 8 of these rules (in so far as that part applies), or

(b)

by any available arbitral process of appeal or review.

Rule 55 Arbitration to end on last award or early settlement  D

(1) An arbitration ends when the last award to be made in the arbitration is made (and noclaim, including any claim for expenses or interest, is outstanding).

(2) But this does not prevent the tribunal from ending the arbitration before then under rule20(3) or 36(1).

(3) The parties may end the arbitration at any time by notifying the tribunal that they havesettled the dispute.

(4) On the request of the parties, the tribunal may make an award reflecting the terms of thesettlement and these rules (except for rule 48(2)(c) and Part 8) apply to such an award asthey apply to any other award.

(5) The fact that the arbitration has ended does not affect the operation of these rules (in sofar as they apply) in relation to matters connected with the arbitration.

Rule 56 Correcting an award  D

(1) The tribunal may correct an award so as to—

(a)

correct a clerical, typographical or other error in the award arising by virtue ofaccident or omission, or

(b)

clarify or remove any ambiguity in the award.

(2) The tribunal may make such a correction—

(a)

on its own initiative, or

(b)

on an application by any party.

(3) A party making an application under this rule must send a copy of the application to theother party at the same time as the application is made.

(4) Such an application is valid only if made—

(a)

within 28 days of the award concerned, or

(b)

by such later date as the Outer House or the sheriff may, on an application by theparty, specify.

(5) The tribunal must, before deciding whether to correct an award, give—

(a)

where the tribunal proposed the correction, each of the parties,

(b)

where a party application is made, the other party,

a reasonable opportunity to make representations about the proposed correction.

(6) A correction may be made under this rule only—

(a)

where the tribunal proposed the correction, within 28 days of the award concernedbeing made, or

(b)

where a party application is made, within 28 days of the tribunal receiving theapplication.

(7) Where a correction affects—

(a)

another part of the corrected award, or

(b)

any other award made by the tribunal (relating to the substance of the dispute,expenses, interest or any other matter),

the tribunal may make such consequential correction of that other part or award as itconsiders appropriate.

(8) A corrected award is to be treated as if it was made in its corrected form on the day theaward was made.

PART 7 - ARBITRATION EXPENSES

Rule 57 Arbitration expenses  D

“Arbitration expenses” means—

(a)

the arbitrators’ fees and expenses for which the parties are liable under rule 58,

(b)

any expenses incurred by the tribunal when conducting the arbitration for whichthe parties are liable under rule 58,

(c)

the parties’ legal and other expenses, and

(d)

the fees and expenses of—

(i)

any arbitral appointments referee, and

(ii)

any other third party to whom the parties give powers in relation to thearbitration,

for which the parties are liable under rule 58.

Rule 58 Arbitrators’ fees and expenses  M

(1) The parties are severally liable to pay to the arbitrators—

(a)

the arbitrators’ fees and expenses, including—

(i)

the arbitrators’ fees for conducting the arbitration,

(ii)

expenses incurred personally by the arbitrators when conducting thearbitration, and

(b)

expenses incurred by the tribunal when conducting the arbitration, including—

(i)

the fees and expenses of any clerk, agent, employee or other personappointed by the tribunal to assist it in conducting the arbitration,

(ii)

the fees and expenses of any expert from whom the tribunal obtains anopinion,

(iii)

any expenses in respect of meeting and hearing facilities, and

(iv)

any expenses incurred in determining recoverable arbitration expenses.

(2) The parties are also severally liable to pay the fees and expenses of—

(a)

any arbitral appointments referee, and

(b)

any other third party to whom the parties give powers in relation to the arbitration.

(3) The amount of fees and expenses payable under this rule and the payment terms are—

(a)

to be agreed by the parties and the arbitrators or, as the case may be, the arbitralappointments referee or other third party, or

(b)

failing such agreement, to be determined by the Auditor of the Court of Session.

(4) Unless the Auditor of the Court of Session decides otherwise—

(a)

the amount of any fee is to be determined by the Auditor on the basis of areasonable commercial rate of charge, and

(b)

the amount of any expenses is to be determined by the Auditor on the basis that areasonable amount is to be allowed in respect of all reasonably incurred expenses.

(5) The Auditor of the Court of Session may, when determining the amount of fees andexpenses, order the repayment of any fees or expenses already paid which the Auditorconsiders excessive (and such an order has effect as if it was made by the court).

(6) This rule does not affect—

(a)

the parties’ liability as between themselves for fees and expenses covered by thisrule (see rules 60 and 63), or

(b)

the Outer House’s power to make an order under rule 16 (order relating toexpenses in cases of arbitrator’s resignation or removal).

Rule 59 Recoverable arbitration expenses  D

(1) The following arbitration expenses are recoverable—

(a)

the arbitrators’ fees and expenses for which the parties are liable under rule 58,

(b)

any expenses incurred by the tribunal when conducting the arbitration for whichthe parties are liable under rule 58, and

(c)

the fees and expenses of any arbitral appointments referee (or any other third partyto whom the parties give powers in relation to the arbitration) for which theparties are liable under rule 58.

(2) It is for the tribunal to—

(a)

determine the amount of the other arbitration expenses which are recoverable, or

(b)

arrange for the Auditor of the Court of Session to determine that amount.

(3) Unless the tribunal or, as the case may be, the Auditor decides otherwise—

(a)

the amount of the other arbitration expenses which are recoverable must bedetermined on the basis that a reasonable amount is to be allowed in respect of allreasonably incurred expenses, and

(b)

any doubt as to whether expenses were reasonably incurred or are reasonable inamount is to be resolved in favour of the person liable to pay the expenses.

Rule 60 Liability for recoverable arbitration expenses  D

(1) The tribunal may make an award allocating the parties’ liability between themselves forthe recoverable arbitration expenses (or any part of those expenses).

(2) When making an award under this rule, the tribunal must have regard to the principlethat expenses should follow a decision made in favour of a party except where thiswould be inappropriate in the circumstances.

(3) Where no such award is made in respect of recoverable arbitration expenses (or any partof them), the parties are, as between themselves, each liable—

(a)

for an equal share of any such expenses for which the parties are liable under rule58, and

(b)

for their own legal and other expenses.

(4) This rule does not affect—

(a)

the parties’ several liability for fees and expenses under rule 58, or

(b)

the liability of any party to any other third party.

Rule 61 Ban on pre-dispute agreements about liability for arbitration expenses  M

Any agreement allocating the parties’ liability between themselves for any or all of thearbitration expenses has no effect if entered into before the dispute being arbitrated hasarisen.

Rule 62 Security for expenses  D

(1) The tribunal may—

(a)

order a party making a claim to provide security for the recoverable arbitrationexpenses or any part of them, and

(b)

if that order is not complied with, make an award dismissing any claim made bythat party.

(2) But such an order may not be made on the ground that the party—

(a)

is an individual who ordinarily resides outwith the United Kingdom, or

(b)

is a body which is—

(i)

incorporated or formed under the law of a country outwith the UnitedKingdom, or

(ii)

managed or controlled from outwith the United Kingdom.

Rule 63 Limitation of recoverable arbitration expenses  D

(1) A provisional or part award may cap a party’s liability for the recoverable arbitrationexpenses at an amount specified in the award.

(2) But an award imposing such a cap must be made sufficiently in advance of the expensesto which the cap relates being incurred, or the taking of any steps in the arbitrationwhich may be affected by the cap, for the parties to take account of it.

Rule 64 Awards on recoverable arbitration expenses  D

An expenses award (under rule 60 or 63) may be made together with or separately froman award on the substance of the dispute (and these rules apply in relation to anexpenses award as they apply to an award on the substance of the dispute).

PART 8 - CHALLENGING AWARDS

Rule 65 Challenging an award: substantive jurisdiction  M

(1) A party may appeal to the Outer House against the tribunal’s award on the ground thatthe tribunal did not have jurisdiction to make the award (a “jurisdictional appeal”).

(2) The Outer House may decide a jurisdictional appeal by—

(a)

confirming the award,

(b)

varying the award (or part of it), or

(c)

setting aside the award (or part of it).

(3) Any variation by the Outer House has effect as part of the tribunal’s award.

(4) An appeal may be made to the Inner House against the Outer House’s decision on ajurisdictional appeal (but only with the leave of the Outer House).

(5) Leave may be given by the Outer House only where it considers—

(a)

that the proposed appeal would raise an important point of principle or practice, or

(b)

that there is another compelling reason for the Inner House to consider the appeal.

(6) The Inner House’s decision on such an appeal is final.

Rule 66 Challenging an award: serious irregularity  M

(1) A party may appeal to the Outer House against the tribunal’s award on the ground ofserious irregularity (a “serious irregularity appeal”).

(2) “Serious irregularity” means an irregularity of any of the following kinds which hascaused, or will cause, substantial injustice to the appellant—

(a)

the tribunal failing to conduct the arbitration in accordance with—

(i)

the arbitration agreement,

(ii)

these rules (in so far as they apply), or

(iii)

any other agreement by the parties relating to conduct of the arbitration,

(b)

the tribunal acting outwith its powers (other than by exceeding its jurisdiction),

(c)

the tribunal failing to deal with all the issues that were put to it,

(d)

any arbitral appointments referee or other third party to whom the parties givepowers in relation to the arbitration acting outwith powers,

(e)

uncertainty or ambiguity as to the award’s effect,

(f)

the award being—

(i)

contrary to public policy, or

(ii)

obtained by fraud or in a way which is contrary to public policy,

(g)

an arbitrator having not been impartial and independent,

(h)

an arbitrator having not treated the parties fairly,

(i)

an arbitrator having been incapable of acting as an arbitrator in the arbitration (orthere being justifiable doubts about an arbitrator’s ability to so act),

(j)

an arbitrator not having a qualification which the parties agreed (before thearbitrator’s appointment) that the arbitrator must have, or

(k)

any other irregularity in the conduct of the arbitration or in the award which isadmitted by—

(i)

the tribunal, or

(ii)

any arbitral appointments referee or other third party to whom the partiesgive powers in relation to the arbitration.

(3) The Outer House may decide a serious irregularity appeal by—

(a)

confirming the award,

(b)

ordering the tribunal to reconsider the award (or part of it), or

(c)

if it considers reconsideration inappropriate, setting aside the award (or part of it).

(4) Where the Outer House decides a serious irregularity appeal (otherwise than byconfirming the award) on the ground—

(a)

that the tribunal failed to conduct the arbitration in accordance with—

(i)

the arbitration agreement,

(ii)

these rules (in so far as they apply), or

(iii)

any other agreement by the parties relating to conduct of the arbitration, or

(b)

that an arbitrator has not been impartial and independent,

it may also make such order as it thinks fit about any arbitrator’s entitlement (if any) tofees and expenses (and such an order may provide for the repayment of fees or expensesalready paid to the arbitrator).

(5) An appeal may be made to the Inner House against the Outer House’s decision on aserious irregularity appeal (but only with the leave of the Outer House).

(6) Leave may be given by the Outer House only where it considers—

(a)

that the proposed appeal would raise an important point of principle or practice, or

(b)

that there is another compelling reason for the Inner House to consider the appeal.

(7) The Inner House’s decision on such an appeal is final.

Rule 67 Challenging an award: legal error  D

(1) A party may appeal to the Outer House against the tribunal’s award on the ground thatthe tribunal erred on a point of Scots law (a “legal error appeal”).

(2) An agreement between the parties to disapply rule 48(2)(c) by dispensing with thetribunal’s duty to state its reasons for its award is to be treated as an agreement toexclude the court’s jurisdiction to consider a legal error appeal.

(3) An application for a legal error appeal is valid only if it—

(a)

identifies the point of law concerned, and

(b)

states why the applicant considers that the appeal should proceed.

(4) A legal error appeal may proceed only if the Outer House is satisfied—

(a)

that deciding the point will substantially affect a party’s rights,

(b)

that the tribunal was asked to decide the point,

(c)

that, on the basis of the findings of fact in the award, the tribunal’s decision on thepoint—

(i)

was obviously wrong, or

(ii)

where the court considers the point to be of general importance, is open toserious doubt, and

(d)

that it is just and proper for the court to decide the point despite the parties’agreement to resolve the dispute by arbitration.

(5) It is for the Outer House to decide whether a hearing is needed for the purposes ofdeciding whether a legal error appeal should proceed.

(6) The Outer House’s decision on whether a legal error appeal may proceed is final.

(7) The Outer House may decide a legal error appeal which proceeds by—

(a)

confirming the award,

(b)

ordering the tribunal to reconsider the award (or part of it), or

(c)

if it considers reconsideration inappropriate, setting aside the award (or part of it).

(8) An appeal may be made to the Inner House against the Outer House’s decision on alegal error appeal (but only with the leave of the Outer House).

(9) Leave may be given by the Outer House only where it considers—

(a)

that the proposed appeal would raise an important point of principle or practice, or

(b)

that there is another compelling reason for the Inner House to consider the appeal.

(10) The Inner House’s decision on such an appeal is final.

Rule 68 Challenging an award: supplementary  M

(1) This rule applies to—

(a

jurisdictional appeals,

(b)

serious irregularity appeals, and

(c)

where rule 67 applies to the arbitration, legal error appeals,

and references to “appeal” are to be construed accordingly.

(2) An appeal is competent only if the appellant has exhausted any available arbitral processof appeal or review (including any recourse available under rule 56).

(3) No appeal may be made against a provisional award.

(4) An appeal must be made no later than 28 days after—

(a)

the date on which the award being appealed against takes effect, or

(b)

if there has been an arbitral process of appeal or review, the date on which theappellant was notified of the result of that process.

(5) An appellant must give notice of an appeal to the other party and the tribunal.

(6) The tribunal may continue with the arbitration pending determination of an appealagainst a part award.

(7) The Outer House may—

(a)

order the tribunal to state its reasons for the award being appealed in sufficientdetail to enable the Outer House to deal with the appeal properly, and

(b)

make any other order it thinks fit with respect to any additional expenses arisingfrom that order.

(8) Where the Outer House decides an appeal by setting aside the award (or any part of it),it may also order that any provision in an arbitration agreement which prevents thebringing of legal proceedings in relation to the subject-matter of the award (or that partof it) is void.

(9) The Outer House may—

(a)

order an appellant (or an applicant for an appeal) to provide security for theexpenses of the appeal (or application), and

(b)

dismiss the appeal (or application) if the order is not complied with.

(10) But such an order may not be made on the ground that the appellant (or applicant)—

(a)

is an individual who ordinarily resides outwith the United Kingdom, or

(b)

is a body which is—

(i)

incorporated or formed under the law of a country outwith the UnitedKingdom, or

(ii)

managed or controlled from outwith the United Kingdom.

(11) The Outer House may—

(a)

order that any amount due under an award being appealed (or any associatedprovisional award) must be paid into court or otherwise secured pending itsdecision on the appeal (or the application for appeal), and

(b)

dismiss the appeal (or application) if the order is not complied with.

Rule 69 Reconsideration by tribunal  M

(1) Where the Outer House decides a serious irregularity appeal or a legal error appeal byordering the tribunal to reconsider its award (or any part of it), the tribunal must make anew award in respect of the matter concerned (or confirm its original award) by no laterthan—

(a)

the day falling 3 months after the Outer House makes the order, or

(b)

such other day as the Outer House may specify.

(2) These rules apply in relation to the new award as they apply in relation to the appealedaward.

PART 9 - MISCELLANEOUS

Rule 70 Immunity of tribunal etc.  M

(1) Neither the tribunal nor any arbitrator is liable for anything done or omitted in theperformance, or purported performance, of the tribunal’s functions.

(2) This rule does not apply—

(a)

if the act or omission is shown to have been in bad faith, or

(b)

to any liability arising from an arbitrator’s resignation (but see rule 16(1)(c)).

(3) This rule applies to any clerk, agent, employee or other person assisting the tribunal toperform its functions as it applies to the tribunal.

Rule 71 Immunity of appointing arbitral institution etc.  M

(1) An arbitral appointments referee, or other third party who the parties ask to appoint ornominate an arbitrator, is not liable—

(a)

for anything done or omitted in the performance, or purported performance, ofthat function (unless the act or omission is shown to have been in bad faith), or

(b)

for the acts or omissions of—

(i)

any arbitrator whom it nominates or appoints, or

(ii)

the tribunal of which such an arbitrator forms part (or any clerk, agent oremployee of that tribunal).

(2) This rule applies to an arbitral appointments referee’s, or other third party’s, agents andemployees as it applies to the referee or other third party.

Rule 72 Immunity of experts, witnesses and legal representatives  M

Every person who participates in an arbitration as an expert, witness or legalrepresentative has the same immunity in respect of acts or omissions as the personwould have if the arbitration were civil proceedings.

Rule 73 Loss of right to object  M

(1) A party who participates in an arbitration without making a timeous objection on theground—

(a)

that an arbitrator is ineligible to act as an arbitrator,

(b)

that an arbitrator is not impartial and independent,

(c)

that an arbitrator has not treated the parties fairly,

(d)

that the tribunal does not have jurisdiction,

(e)

that the arbitration has not been conducted in accordance with—

(i)

the arbitration agreement,

(ii)

these rules (in so far as they apply), or

(iii)

any other agreement by the parties relating to conduct of the arbitration,

(f)

that the arbitration has been affected by any other serious irregularity,

may not raise the objection later before the tribunal or the court.

(2) An objection is timeous if it is made—

(a)

as soon as reasonably practicable after the circumstances giving rise to the groundfor objection first arose,

(b)

by such later date as may be allowed by—

(i)

the arbitration agreement,

(ii)

these rules (in so far as they apply),

(iii)

the other party, or

(c)

where the tribunal considers that circumstances justify a later objection, by suchlater date as it may allow.

(3) This rule does not apply where the party shows that it did not object timeously becauseit—

(a)

did not know of the ground for objection, and

(b)

could not with reasonable diligence have discovered that ground.

(4) This rule does not allow a party to raise an objection which it is barred from raising forany reason other than failure to object timeously.

Rule 74 Independence of arbitrator  M

For the purposes of these rules, an arbitrator is not independent in relation to anarbitration if—

(a)

the arbitrator’s relationship with any party,

(b)

the arbitrator’s financial or other commercial interests, or

(c)

anything else,

gives rise to justifiable doubts as to the arbitrator’s impartiality.

Rule 75 Consideration where arbitrator judged not to be impartial and independent  D

(1) This rule applies where—

(a)

an arbitrator is removed by the Outer House under rule 12 on the ground that thearbitrator is not impartial and independent,

(b)

the tribunal is dismissed by the Outer House under rule 13 on the ground that ithas failed to comply with its duty to be impartial and independent, or

(c)

the tribunal’s award (or any part of it) is returned to the tribunal forreconsideration, or is set aside, on either of those grounds (see rule 66).

(2) Where this rule applies, the Outer House must have particular regard to whether anarbitrator has complied with rule 8 when it is considering whether to make an orderunder rule 16(1) or 66(4) about—

(a)

the arbitrator’s entitlement (if any) to fees or expenses,

(b)

repaying fees or expenses already paid to the arbitrator.

Rule 76 Death of arbitrator  M

An arbitrator’s authority is personal and ceases on death.

Rule 77 Death of party  D

(1) An arbitration agreement is not discharged by the death of a party and may be enforcedby or against the executor or other representative of that party.

(2) This rule does not affect the operation of any law by virtue of which a substantive rightor obligation is extinguished by death.

Rule 78 Rules applicable to umpires  M

(1) The following rules apply in relation to an umpire appointed under rule 29 (or otherwisewith the agreement of the parties) as they apply in relation to an arbitrator or, as the casemay be, the tribunal—

rule 4

rule 8

(2) But the parties are, in so far as those rules are not mandatory rules, free to modify ordisapply the way in which those rules would otherwise apply to an umpire.

Rule 79 Formal communications  D

(1) A “formal communication” means any application, award, consent, direction, notice,objection, order, reference, request, requirement or waiver made or given or anydocument served—

(a)

in pursuance of an arbitration agreement,

(b)

for the purposes of these rules (in so far as they apply), or

(c)

otherwise in relation to an arbitration.

(2) A formal communication must be in writing.

(3) A formal communication is made, given or served if it is—

(a)

hand delivered to the person concerned,

(b)

sent to the person concerned by first class post in a properly addressed envelopeor package—

(i)

in the case of an individual, to the individual’s principal place of businessor usual or last known abode,

(ii)

in the case of a body corporate, to the body’s registered or principal office,or

(iii)

in either case, to any postal address designated for the purpose by theintended recipient (such designation to be made by giving notice to theperson giving or serving the formal communication), or

(c)

sent to the person concerned in some other way (including by email, fax or otherelectronic means) which the sender reasonably considers likely to cause it to bedelivered on the same or next day.

(4) A formal communication which is sent by email, fax or other electronic means is to betreated as being in writing only if it is legible and capable of being used for subsequentreference.

(5) A formal communication is, unless the contrary is proved, to be treated as having beenmade, given or served—

(a)

where hand delivered, on the day of delivery,

(b)

where posted, on the day on which it would be delivered in the ordinary course ofpost, or

(c)

where sent in any other way described above, on the day after it is sent.

(6) The tribunal may determine that a formal communication—

(a)

is to be delivered in such other manner as it may direct, or

(b)

need not be delivered,

but it may do so only if satisfied that it is not reasonably practicable for the formalcommunication to be made, given or served in accordance with this rule (or, as the casemay be, with any contrary agreement between the parties).

(7) This rule does not apply in relation to any application, order, notice, document or otherthing which is made, given or served in or for the purposes of legal proceedings.

Rule 80 Periods of time  D

Periods of time are to be calculated for the purposes of an arbitration as follows—

(a)

where any act requires to be done within a specified period after or from aspecified date or event, the period begins immediately after that date or, as thecase may be, the date of that event, and

(b)

where the period is a period of 7 days or less, the following days are to beignored—

(i)

Saturdays and Sundays, and

(ii)

any public holidays in the place where the act concerned is to be done.

Referring Principles
Trans-Lex Principle: VII.6 - Duty to pay interest
Trans-Lex Principle: XIII.1.1 - Arbitration agreement
Trans-Lex Principle: XIII.1.2 - Arbitration agreement and substantive claim before court
Trans-Lex Principle: XIII.2.1 - Number of arbitrators
Trans-Lex Principle: XIII.2.2 - Arbitrator‘s duty to disclose
Trans-Lex Principle: XIII.2.3 - Grounds for challenge of an arbitrator
Trans-Lex Principle: XIII.2.4 - Principle of separability of the arbitration clause
Trans-Lex Principle: XIII.2.5 - Power of arbitral tribunal to order interim measures
Trans-Lex Principle: XIII.3.1 - Arbitral due process
Trans-Lex Principle: XIII.3.4 - Language of the arbitration
Trans-Lex Principle: XIII.3.5 - Early legal guidance by the tribunal
Trans-Lex Principle: XIII.3.8 - Default of a party
Trans-Lex Principle: XIII.4.1 - Rules applicable to merits; decision ex aequo et bono
Trans-Lex Principle: XIII.2.6 - Decision making by panel of arbitrators
Trans-Lex Principle: XIII.4.2 - Form and contents of award
Trans-Lex Principle: XIII.4.4 - Termination of proceedings
Trans-Lex Principle: XIII.5.1 - Confidentiality
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