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mARCH 2012 www.lawyer-monthly.com Global Arbitration 27
ARBITRATION SCOTLAND
As part of Lawyer Monthly’s legal focus on Arbitration, we speak to Peter Foreman, LLB, AKC, MCIArb, Chief Executive of Traprain Consultants Ltd and David Parratt, LLB PhD DipLP DipICArb FCIArb, Advocate, Barrister and Chartered Arbitrator. Traprain have offices in Scotland and UAE, and provide legal and commercial consultancy advice and support, including on dispute resolution, together with training and lecturing on these subjects, all on an international basis. David practices in Scotland and England and internationally with Terra Firma Chambers in Edinburgh and Crown Office Chambers in Temple, London. He specialises in Construction, Arbitration, Contracts and Energy law and also lectures in the School of Law, University of Dundee and in the British University in Dubai. Both have written the Scottish Arbitration Handbook which was recently published.
Q
what are the common causes of disputes between businesses in your country, and across borders?
In our experience, often disputes arise in contracts where there have been errors in drafting or poor expression of the concepts, scope, rights or obligations that the clients wished incorporated into the original contract. Clients frequently do not appreciate what the contract actually entitles them to or what it obliges the other party to do. Added to this, when a contract involves parties from different jurisdictions, there are sometimes tensions as to how a dispute should be resolved, especially where one party is from a common law jurisdiction and the other is from a civil law jurisdiction. This is often an issue in international arbitration.
Q
How has the new Arbitration (Scotland) Act been working in practice?
There is strong evidence that there is something of a revival in the use of arbitration in Scotland, and the establishment of the Scottish Arbitration Centre last year should add to this progress. There have been a few appeals raised to the Court of Session, and these are being referred to the nominated arbitration judge (currently Lord Glennie), who has delivered decisions which show a robust approach, and a desire to support arbitration as a practice, and minimise the number of appeals. This contrasts most favourably with the previous practice of stated case appeals, which practice was a major factor in arbitration becoming relatively unpopular in Scotland.
Under the Arbitration (Scotland) Act 2010 domestic and foreign companies are treated in the same way. Further, under the Act there is no differentiation between domestic and international arbitrations (unlike in England under the Arbitration Act 1996).
Q Q
How do you assist clients involved in arbitration? Is there any general advice you could offer clients to prevent the situation from escalating?
Both of us are arbitrators and mediators, but our roles beyond that are slightly different, with Peter Foreman providing consultancy advice and support, and Dr David Parratt being a practising advocate in both Scotland and England. Our joint Scottish Arbitration Handbook is also intended as a guide for all those involved in arbitration within Scotland, whether as parties, arbitrators or advisers.
It is important in arbitrations to advise the
clients of the specific nature of arbitration and how it is a different process to litigation. This manifests itself in two ways. In the first place, it is very important in drafting any “dispute resolution clause” in a contract to tactically work out what would be in the best interests of the client. There is an increasing sophistication in drafting these clauses. There is no need to have a single process. It is quite possible to draft a “stepped” or “tiered” clause which might require negotiation or mediation before arbitration or litigation. Secondly, if arbitration is selected as one of these processes, at the dispute stage, knowledge of the laws applying, or potentially applying to the arbitration is essential as is an appreciation of the tactics that
Dr. David Parratt, LLB PhD DipLP DipICArb FCIArb
Advocate & Barrister, Chartered Arbitrator and Mediator
david.parratt@advocates.org.uk
Do laws and regulations differ for domestic companies as opposed to foreign companies?
parties will use in the process. It is a quite different process to going to court.
In answer to the second part, we would
suggest that if a dispute arises or looks like it is imminent, clients should approach their lawyers or advisers as early as possible. Sound legal advice at that stage may dictate how the dispute is resolved. If there is a bona fide dispute it is likely to escalate in any event, and whilst the best negotiators can get to settlement before that, knowledge of your legal and arbitration position in early course can avoid problems later down the line. LM
CONTACT:
Peter Foreman, LLB, AKC, MCIArb Chief Executive