Court Vs Arbitration

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. However, in practice it is not straightforward. In particular, it is very difficult to appeal against an Arbitration 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:

Maritime 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.   

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 and 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.