ICCA 2020 Edinburgh

A Renaissance of Scottish Arbitration

What do you know of Scotland's 2010 Arbitration Act?

Let CMS Partner Shona Frame bring you up to speed with the most recent developments in Scottish Arbitration history.

Arbitration in Scotland is governed by the Arbitration (Scotland) Act 2010 (the "Act").  When it came into force, the Act was said by the Enterprise Minister to “set the scene for a renaissance of Scottish arbitration”.

Prior to its codification in the Act, arbitration law in Scotland was based almost completely on common law.  This had developed since 1695, with only marginal legislative input.  One important feature, and limiting factor, of the pre-Act position in Scotland was that arbitrators did not automatically have power to award damages or interest. That has of course been addressed within the Act which provides the framework for a modern, impartial and efficient arbitration regime.

The Act is applicable to both domestic and international arbitrations and supports arbitrations conducted by a sole arbitrator or by a tribunal.  The Act comprises 37 sections but also incorporates the 84 Scottish Arbitration Rules which apply to any arbitration seated in Scotland.  'Mandatory' and 'default' rules are provided for in the Rules.  The 'mandatory' rules may not be disapplied.  'Default' rules are non-mandatory but apply by default unless parties opt out by agreeing to disapply them in full or in part.

The important founding principles for arbitration are set out in section 1 of the Act confirming that the object of arbitration is to resolve disputes fairly, impartially and without unnecessary delay and expense; that parties are free to agree how to resolve disputes; and that the Court should not intervene in arbitration except as specifically provided.

These principles are supported by the Rules which include duties on the tribunal and the parties to conduct the arbitration without unnecessary delay and without incurring unnecessary expense. The tribunal is given all necessary powers to conduct arbitrations efficiently and cost-effectively. This focus on timescales and cost addresses head-on the factors which users of arbitration often cite as the worst characteristics of arbitration.

The circumstances in which the Court may intervene are made clear but are limited, in line with the principle that where parties have selected arbitration as their preferred method of dispute resolution, the Courts should respect that.

To the extent that court intervention is required, this is provided for by Rules of Court specific to arbitration and supported by the appointment of specialist arbitration judges. Court decisions issued since the Act came into force have been supportive of arbitration as a process, have recognised the court's limited role and have reinforced that where matters do come before the Courts, they should be dealt with expeditiously.

International arbitration is supported in Scotland.  The UK has ratified a number of international treaties relating to arbitration, namely the New York Convention 1958, the Washington Convention 1965 and the Geneva Convention 1927.  As part of the UK, Scotland's Government and Courts are bound by these treaties. 

In short, arbitration in Scotland is supported by a modern, flexible legislative framework within the Act and Rules, by the Courts where necessary and with the ease of enforcement of awards essential to parties to international arbitration. 

This article was first published in ICCA Newsletter #19 (December 2019)

The 25th biennial ICCA Congress will be held in Edinburgh, Scotland from May 10 - 13 2020. For more information on this event or to register, visit https://icca2020.scot/.