| The basis for arbitration is an agreement between | | | | to determine whether the dispute is one which is |
| disputing parties to submit the dispute to resolution by | | | | capable of resolution by arbitration. The arbitration |
| arbitration, where an arbitrator is appointed and has | | | | agreement often stipulates the powers conferred by |
| legal authority to act. | | | | the disputing parties on the arbitrator. |
| The disputing parties can directly appoint an arbitrator | | | | In the usual performance of his duties, the arbitrator |
| by direct decision, or indirectly where specified in the | | | | cannot be held liable for negligence. If the arbitrator fails |
| arbitration agreement that a third party can be | | | | to execute his duties, the main sanctions are to revoke |
| appointed to act. Often in complex commercial | | | | the arbitrator’s authority and to seek to have the |
| agreements several arbitrators are appointed. In the | | | | award set aside. |
| UK under the Arbitration Act, 1950, there is provision | | | | An arbitrator in deciding commercial disputes must act |
| for appointing an arbitrator in default of the agreement | | | | with impartiality and must not be seen to be |
| of the parties or where the nominated arbitrator | | | | subjectively or objectively biased. The cultivation of a |
| cannot act. | | | | close personal relationship between the arbitrator and |
| The law does not set any qualifications for acting as | | | | one of the referring parties is likely to be considered |
| arbitrator – any person chosen by the parties is | | | | bias. |
| qualified to act. Often however, the arbitration | | | | The appointment of the arbitrator may be terminated |
| agreement will stipulate qualifications for the arbitrator. | | | | by the arbitrator’s own resignation. The referring |
| There is no set fee for the arbitrator to act. The | | | | parties may also seek to revoke the arbitrator’s |
| arbitrator’s fee is determined by agreement with | | | | authority by application to court, thus no party can |
| the appointing parties and is usually payable jointly by | | | | unilaterally remove the arbitrator. Under the provisions |
| the parties. Typically, the arbitrator’s fee is agreed | | | | of the Arbitration Act 1950, the court can order the |
| and put in writing before the commencement of the | | | | removal of the arbitrator for displaying bias, for |
| arbitration, but he is only entitled to receive his fee, | | | | refusing to conduct the arbitration without unjust delay |
| once the arbitrator’s award is published. If the | | | | and for other misconduct. What constitutes |
| arbitrator is not paid, he is legally entitled to sue for his | | | | misconduct depends on the circumstances of each |
| fees. Where there is no agreement as to the | | | | case, though it is clear that an error of fact or in law in |
| arbitrator’s fees, he is entitled to claim a reasonable | | | | the making of an award, does not constitute |
| fee. | | | | misconduct. |
| An arbitrator’s main duties are to proceed to | | | | The arbitrator plays a central role in the arbitration |
| conduct the arbitration with reasonable progress, to | | | | process and has wide ranging powers to make |
| exercise reasonable care, and to act impartially. The | | | | decisions to effect commercial dispute resolution. |
| first task upon appointment is usually for the arbitrator | | | | |