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If I have a dispute and arbitration is suggested, I have a number of questions:

  1. Can I be compelled to arbitrate?
  2. If I don't think the tribunal has jurisdiction, what can I do?
  3. If I disagree with the award, what can I do?
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Different jurisdictions have different laws about arbitration and there can be a distinction between domestic and international arbitration. Notwithstanding, most jurisdictions use the United Nations Commission on International Trade Law UNCITRAL Model Law on International Commercial Arbitration as the basis for their domestic law so there is a lot of commonality between jurisdictions.

1. Can I be compelled to arbitrate?

No, arbitration requires the agreement of all parties to the dispute. However, you may have given your consent to arbitration when you entered a contract or agreed to terms and conditions; if so, then that agreement is binding and you will be required to arbitrate.

If a matter for which there is a valid arbitration agreement is nevertheless brought before a court, a party can argue that the proper venue is arbitration and the court will almost certainly agree and refuse to hear the case.

Arbitration agreements are subject to what is called the "severability" principle which means that they remain binding even if the contract they are contained in is ultimately found to be void. So it remains within the power of an arbitrator appointed by a contract to validly decide the contract that appointed them is void.

2. If I don't think the tribunal has jurisdiction, what can I do?

You make submissions to the arbitration tribunal on jurisdiction and they are required to consider if they have it or not. This is the "competence-competence" principle: an arbitrator is competent to decide if they are competent to hear the dispute.

Depending on the size of the matter, the tribunal may rule on their competence in the final decision or issue an interim ruling. If a party thinks the tribunal has wrongly decided they do or don't have jurisdiction then they can, within the limited time usually allowed, ask the court to review the decision - in the meantime the arbitration continues.

3. If I disagree with the award, what can I do?

Not a lot. Arbitration is intended to be a final and binding method of dispute resolution. Because, unlike a court summons, it was agreed to by all the parties (see above), the legal attitude is "you made your bed, you lie in it".

Article 34 provides that a court can set aside the decision for:

  • incapacity in the arbitration agreement. Since the arbitration agreement is itself a contract it can be void for all the same reasons a contract can (see What is a contract and what is required for them to be valid?)
  • that you weren't told about the arbitration
  • that the dispute is outside the scope of the arbitration agreement
  • that the arbitration tribunal wasn't composed as agreed
  • the matter is not subject to settlement by arbitration by law (e.g. workplace disputes are often excluded from arbitration)
  • the award is against public policy (e.g. the award requires illegality)

Article 35 provides that a court can refuse to enforce an award for all of the reasons above plus if a court has set the decision aside under Article 34.

Appeals are rarely allowed and even more rarely successful. For example, stats from the UK under s68 and s69 of their domestic Act (equivalent to Article 34 and 35 respectively) indicate that success rates for challenges are about 3%.

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