Arbitration In Ireland

E UROPE ’ S H IDDEN
J EWEL : A N A RGUMENT
FOR A RBITRATING IN
I RELAND

2011 W&L Law Symposium on International Commercial Arbitration
Presented By: Chris O’ Connell, Alice Ward, Roisin Costello, Eden Hoey, Benjamin Ersing

P RESENTATION F ORMAT

I. Arbitration in Ireland Pre -2010 (Chris)
a) Roots and Influences of Modern Arbitration Laws in Ireland

b) An Examination of those Laws

II. The Arbitration Act 2010 (Alice)
III. Attractiveness of Ireland as a Venue (Eden)
IV. Challenges Facing Ireland (Ben)
V. European Legislation Affecting Ireland
(Róisín)

2011 W&L LAW SYMPOSIUM ON INTERNATIONAL COMMERCIAL ARBITRATION

R OOTS & I NFLUENCES

Brehon Laws
• Ancient Customary Celtic Laws
• Governed by “Brehons”
• Dealt with Issues before them:
•Principles of Fairness
•Durability
English Common Law
•1698 Act
New York Convention
•1980 Arbitration Act
Model Law
•1998 Arbitration Act


T HE A RBITRATION A CTS

1954 Arbitration Act
• Influenced Heavily by English Arbitration Act 1950
• Governed Domestic Arbitration
• Very Standard Procedures
• Interesting Features:
• Potential Interference of High Court
• Employer/ Employee Arbitrations not under
scope
• Repealed in 2010


T HE A RBITRATION A CTS

1980 Arbitration Act
• Main Features:
• Mandatory Staying of Court Proceedings
• Gave Effect to NY Convention of 1958
• Gave Effect to Washington Convention of
1965
1998 Arbitration (International Commercial) Act
• Adopted UNCITRAL Model Law


I RISH A RBITRATION A CT 2010
Single most important development in Arbitration in Ireland to date

• What brought about this change?

• Significant arbitration figures who initiated this
development

• AG Dispute Resolution Symposium

• Arbitration Bill 2008

• Arbitration Act 2010

• Significant developments brought about by the 2010 Act


W HO BROUGHT ABOUT
THIS CHANGE ?

Klaus Reichert Nael G Bunni Michael Collins

Dudley Solan Brian Hutchinson Michael Corrigan

R ORY B RADY
Attorney General 2002-2007

Suggested that a
symposium be organized
to examine whether
legislative change was
needed


ATTORNEY G ENERAL’ S D ISPUTE
R ESOLUTION S YMPOSIUM

 Held on April 28, 2007
 Engineers Ireland (IEI), Clyde Road, Dublin:
 Panel
 Michael Carrigan (VP IAA)

 Michael Collins (President IAA)

 Nael G Bunni (Former Chairman CIA)

 Dudley Solan (CIA)

 Brian Hutchinson (CIA)
IAA – Irish CIA-Chartered
Arbitration Institute of Irish
Association
2011 W&L LAW SYMPOSIUM ON INTERNATIONAL COMMERCIAL ARBITRATION Arbitration

S UMMARY OF S YMPOSIUM
General consensus reached that great reform in Arbitration laws
was necessary to promote Ireland as a modern venue for
international arbitration.

Findings:
• 1954 Arbitration Act was out of date.

• “Multi million dollar business”

• “A system of appeal undermined the raison
d’etre of arbitration.”


I NTRODUCTION OF
A RBITRATION B ILL 2008
ICCA opening ceremony
(June 2008)
that Taoiseach Brian Cowen
announced a new bill on
arbitration was ready to be
presented to the Dáil

Intervening period (2008 – 2010) was
used by various interested bodies such
as the Chartered Institute of Arbitrators,
to make submissions to the draft
legislation.


2008 B ILL A CCEPTED

“The Desire for Finality
will be met through this
enactment…”

Michael Collins, President IAA

Paul Gallagher AG 2008-2011
“*This development+ was particularly
marked by support from the Irish
Government and the Attorney General,
Paul Gallagher SC.”

“A very welcome development as it incorporates
international best practice into Irish law…. A very
important positive step in establishing Ireland as an
attractive option...”

2011 W&L LAW SYMPOSIUM ON INTERNATIONAL COMMERCIAL ARBITRATION Colm O Hoisin, Secretary IAA

A RBITRATION A CT 2010

• Signed into law by the
President 8/3/2010 and comes
into operation on 8/6/2010.

• It repeals all previous
arbitration legislation in Ireland.

• The new legislation will apply
to ALL arbitrations which
commence in Ireland after 8 June
2010 (retrospective affect)
President Mary MacAleese


I RISH A RBITRATION A CT
2010
Layout:
1. Main Body of Act
Preliminary and General
Substantive provisions of arbitration in Ireland
Reference to Arbitration before Court
6 schedules attached to the act
“Virtually pure
1. – UNCITRAL Model Law (2006)
model law” 2. – New York Convention (1998)
3. – Washington Convention (1965)
4. – Geneva Convention (1927)
Klaus Reichert
5. – Geneva Protocol (1923)
– PRO IAA
6. – Amendments to other Acts


S IGNIFICANT D EVELOPMENTS
UNDER THE “2010 A CT ”

 Domestic vs International

 Single Arbitration Judge

 “One Shot” Challenge

 Case Stated Procedure

 Reasons

 Costs


A RBITRATION IN IRELAND
TODAY

• Action is now self contained with
limited access to the courts
• Reduced right of appeal
• No case stated procedure

• Focus in is on PARTY AUTONOMY Killarney,
Ireland
• Standard legal regime applicable to
domestic and international arbitration


ATTRACTIVENESS OF I RELAND
AS AN ARBITRATION VENUE


A W INNING C OMBINATION

1. Model Law

2. Common Law

3. English Speaking

4. Signatory of the New York Convention


M ODEL L AW

• Party Autonomy

• Limited Judicial Intervention

• Modern outlook

• Familiarity
Entire text of the model law present in the
Arbitration Act 2010


O THER N OTABLE F EATURES

• Section 22: Full immunity

• Section 13: Default No. of Arbitrators

•Section 20: An arbitral tribunal, unless otherwise agreed
by the parties, can make an award requiring specific
performance of a contract

• Section 18: Arbitrators have express power to award
compound interest and security for costs

• Section 17: Tribunal can order intermediary relief


ATTRACTIVENESS OF THE
I RISH C OURTS
• Neutrality
• Judicial Independence
• Speedy and Efficient disposal of Arbitration related
court applications
•‘One Stop Shop’ Application to the High Court (s. 11)
• Appointment of a Specialized Arbitration Judge s (9)2
• Commercial Court track record is excellent
• Average time for disposal from commencement is 21
weeks
• Arbitration cases are dealt with efficiently and without
delay


P UBLIC P OLICY
• Irish courts completely accept the exceptional and limited
nature of the public policy exception to recognition and
enforcement of the UNCITRAL Model Law

• Expressly adopted U.S decision Parsons v Whittemore to
the effect that enforcement should be denied on the
basis of public policy only in the most exceptional cases

• “The Public policy defense to an enforcement application
is one which is of narrow scope. . . It extends only to a
breach of the most basic concepts of morality and
justice.” Brostrom Tankers v Factorias Volcano (2004) 2 IR
191


W HY IS I RELAND BETTER
THAN E NGLAND ?


C OST
Ireland England
• Courts will recognize • Under section the UK
whatever agreement the Arbitration Act,
parties make regarding agreements or clauses
costs. S (21)1 regarding costs are
• This includes the decision unenforceable.
of each party to bear
their own cost • Section 60 – such
irrespective of the agreement will be
outcome rendered void unless
made after the dispute
has arisen.

R ECOURSE A GAINST
THE AWARD
Ireland England
• Grounds for setting aside an • Section 69 of the UK
Arbitration Act: Appeals on
award (s 34). In accordance with
point of law are permitted.
the NY Convention
• “ One stop shop only!”:
• Potential for becoming
• Parties may only challenge meshed in a piece of litigation
subject to one Court only – The for a long period of time
High Court. following the arbitration
• No appeals on point of law
taken. • Lack of finality
• Switzerland has a similar
approach

O THER L OGISTICAL
A DVANTAGES

• Modern Economy with exceptionally skilled personnel and
infrastructure
• Strong transport network
• Dublin is a small city so no office, hotel, restaurant is too far
away
• First class hearing room and conference facilities
• Best stenographers in the world
• Best lawyers in the world
• Undoubtedly the best bars!


F UTURE L OOKS B RIGHT...
 Outside Interest

 Default Location for ICC Arbitration

 Establishment of Arbitration Ireland

 Future Focus

See You
In Dublin!

C HALLENGES
FACING I RELAND

I. Sole Customer Base

II. Competition with London

III. Global Perception of Irish Economy

• Why?
• Potential Remedies?


I. S OLE C USTOMER B ASE

 The Americans
 WHY? :
 Ethnic ties/Irish-American community
 Large presence of US Corporations in Ireland
 Common Language

Solution?
Market to Developing Countries


II. C OMPETITION WITH LONDON


III. G LOBAL P ERCEPTION OF
I RISH E CONOMY

FUTURE OF THE EUROZONE?

T HE B RUSSELS R EGULATION :
A N I NTRO

 The Brussels Regulation 44/2001/EC

 Article 1(2) provides:

"The Regulation shall not apply to:...(d) arbitration.”

 Article 1(2)(d) is known as the "arbitration
exclusion".


C HANGES AND C HALLENGES

 European Commission has proposed to bring
arbitration-related court proceedings within the
scope of the Brussels Regulation

 West Tankers decision and its consequences


E UROPEAN C OMMISSION ’ S
R EPORT

 The Commission presented its report and a green
paper proposing reforms to the Regulation on
the 21st of April 2009.

 Subsequent to this review, Professors Hess,
Pfeiffer and Schlosser were commissioned to
prepare a study into the workings of the Brussels
Regulation-the Heidelberg Report


W EST TANKERS D ECISION

 Coleman J in the HC agreed granting the
injunction.

 During the proceedings, Allianz SpA questioned
whether it would be consistent with the Brussels
Regulation for an English court to grant an
injunction restraining proceedings in another
Member State.

 House of Lords suggested that an injunction
would not be inconsistent with the Regulation.
However they referred question to the ECJ for
determination.


E FFECTS OF W EST
TANKERS

 This undermines the concept of party autonomy
as regards choice of seat, denying some of the
benefit of ‘arbitration-friendly’ jurisdictions
where courts limit any pre-award review to a
minimum.

 It is also inconsistent with the concept of
Kompetenz-kompetenz.


P ROPOSED S OLUTIONS
G OING F ORWARD

 Preservation the status quo.

 Reversal of the effects of West Tankers.

 Implementation of the green paper's approach
on the basis of the Heidelberg report.

 Implementation of a modified version of the
green paper's approach.


C ONCLUSION

 Adoption of a modified form of the green paper
proposals

 Under EU law Regulations have Direct Effect on
all member states

 As a dualist system Ireland will have to enact
legislation incorporating any new regulation into
law


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