THE RANGE OF OPTIONS that comprise ADR is wide. Today, I will touch briefly on two areas; namely, arbitration and mediation.
Arbitration is the process whereby a neutral third party is empowered to arrive at a binding resolution of the dispute. The practice is well established in commerce and industry. It is, therefore a matter of common practice for commercial contracts to contain express provisions referring any future disputes to arbitration.
It should be noted that although courts recognize the effectiveness of such provisions and will enforce any award properly arrived at, the courts will strike down any attempt to oust its jurisdiction.
In our jurisdiction, arbitration procedure is governed by the Arbitration Act Cap. 110 of the Laws of Barbados.
Where there is no specific mode of reference to the matter a reference to arbitration is treated under section 8 of the act as a reference to a single arbitrator.
Where there is a provision for the appointment of two arbitrators, one being appointed by each party concerned, then in the event of failure of the two original arbitrators to reach agreement a third arbitrator must be appointed as an umpire to determine the final outcome of the arbitration.
Professor Fiadjoe identifies the essential ingredients of arbitration as the following:
“(a) The arbitral process is consensual, based on an agreement between the parties.
(b) The parties have procedural freedom. This means that the parties may organize their proceedings as they like and may choose an adversarial or inquisitorial procedure as they like, or a mixture of the two.
(c) The arbitrators must be independent and impartial in accordance with codes of ethics and conduct. A breach of that duty may result in the arbitrator being challenged and eventually removed by the court, or by the arbitration institution concerned.
It may also lead to the annulment of the award.
(d) The arbitrator is the master of his own procedure.
(e) The arbitrator must act in accordance with the rules of natural justice.
(f) An arbitral award is binding upon the parties.”
Mediation: This process requires the appointment of a mediator. The main function of the mediator is to facilitate communication between the competing parties, with the object of reaching consensus. The mediator does not play in an advisory or evaluative role in the settlement of the dispute and makes no rulings on the matters in contention.
The mediator attempts to assist the contending parties in arriving at a resolution of their differences without making a judgment.
Professor Fiadjoe cites five main points of distinction between an arbitration and mediation. These are:
“(a) Though both systems are consensual, an agreement to enter into arbitration will be enforced by the courts, whereas an agreement to enter into a mediation will generally not be enforced by the courts. This is because in mediation, the parties are free to leave at any time.
(b) Arbitration has the quality of delivering a final and binding award. The arbitrator has the legal authority to make a binding award, but the mediator has not.
(c) Whereas arbitration is subject to an extensive statutory regime, mediation is generally not so regulated.
(d) Arbitral procedures are said to have the advantage over the courts of informality, but nonetheless they are constrained by the rules of natural justice. Compare with the situation of the mediator, who is not bound as he must be free to see the parties separately (go into caucus) or together, and has a discretion as to what or how much information he may disclose to one side or the other.
(e) Most international arbitration rules provide power in the arbitrator to act as an ‘amicable compositor’. This gives the arbitrator power to act not only in accordance with rules of law, but also with principles of equity.”
Cecil McCarthy is a Queen’s Counsel.
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