Arbitrate

An arbitration agreement to be binding and to have the protection afforded by the United Kingdom’s Arbitration Acts, 1950 and 1979, must be in writing and should be explicit in its terms. Thus a charterparty clause with wording such as “Arbitration, if any, to be held in New York” is not a binding agreement to arbitrate. It merely agrees to arbitrate in a certain named place if there is agreement to arbitrate at all – a very different thing. An agreement to arbitrate, being contractual in nature, must for this reason be precise, unambiguous and clear in its terms and wording. The United Kingdom Act gives a definition of an arbitration agreement as a “written agreement to submit present or future differences to arbitration, whether an arbitrator is named or not”. How wide in scope the agreement to arbitrate is, depends again on the actual wording of the clause. If it contains such words as “all matters in difference” the scope is of course extremely comprehensive, but the more commonly used wording in maritime contracts – “disputes arising out of the contract” – would by its ‘face value’ sense exclude a dispute as to whether the contract was ever entered into in the first place. The inclusion of an arbitration agreement in a charterparty does not automatically exclude the jurisdiction of a Court of Law to try disputes. Despite being a party to an arbitration agreement an aggrieved party in a charterparty agreement is not barred from taking legal action through the machinery of the law. What occurs in such a situation is that the Court has a discretionary power to decide whether it will “stay” proceedings in favour of arbitration or whether it will try the issue. It should be remembered that even if the Court stays proceedings in favour of arbitration, their intervention may become inevitable as a means of enforcing any arbitration award that may eventually be made, or alternatively to set aside an award when there may have been misconduct of an arbitrator or umpire or the award has been for some reason “improperly secured”, or simply there has been an “error on the face of the award”. To elaborate on this last phrase an error of law on the face of the award has been described as some legal proposition contained in the award, or documents incorporated into it, which is the basis of the award and which can be said to be erroneous.