Court Vs Arbitration

In principle, a losing party is entitled to appeal against both the High Court ruling (to the Court of Appeal) and an Arbitration Award (to the High Court). In practice it is not straightforward. In particular, it is very difficult to appeal against an Award.  It can  only  be  appealed   on  a  point  of  law,  not  on  a  point  of fact.  In addition,  any serious  irregularity  in the conduct  of the arbitration  can be grounds for appeal,  though  it is very  rare for an appeal  to succeed  on grounds  of serious irregularity.  Appeals  on points  of law must  be made  after  obtaining  permission from  a High  Court  judge  for the  appeal  to continue.  Most cases  do  not obtain permission.   Indeed,  there  is some  concern  in the  London  shipping  community that appeals  are made on insufficient  grounds  and that the development  of the law is being affected.  A  review  of some  similarities and  differences  between  court  proceedings  and arbitration  is set out:

Court  Proceedings:        

  • Adversarial  System.      
  • Formal exchange  of pleadings to set out key facts and legal issues of case.
  • Interlocutory  hearings before Judge  in Court.
  • Concludes in trial before judge
  • Judges  are expert  lawyers with commercial  experience.
  • Proceedings commenced by issuing Claim  Form and formal service, on defendant, abroad if necessary. Can be slow/expensive
  • Judge  can require  parties  to mediate.
  • Judge  has wide  powers to fix the procedure  of the case
  • Parties do not pay for judge.
  • Loser pays costs.

Arbitration:

  • Adversarial  System.
  • Semi-formal  exchange  of pleadings to set out key facts and legal issues  of case.
  • Interlocutory  hearings  usually  by correspondence.
  • Concludes in hearing before arbitration tribunal.
  • Arbitrators are industry experts with experience.
  • Arbitration commenced by appointing arbitrator and giving notice to Respondent. Speedy and less expensive.
  • Arbitrator cannot force parties to mediate.
  • Parties can decide arbitrators’ powers to set the procedure.
  • Parties pay for arbitrators.
  • Loser pays costs.