London is the most popular seat of arbitration largely due to;
- London’s continuing status as a major financial centre and world market
- Its reputation as a neutral and impartial jurisdiction
- The record of the courts to enforce agreements to arbitrate and equally importantly arbitral awards themselves.
Individuals and corporations worldwide (often with no connection to England and Wales) select London as the seat of their arbitrations.
A wide range of contractual and non contractual claims can be referred to arbitration, including disputes about competition and statutory claims. Criminal and family matters cannot be referred to arbitration.
The major reason to choose arbitration is its potential to keep your dispute out of the courts and have them decided in the neutral forum. However, it is important that confidentiality be provided for in any arbitration agreement. Arbitration can also be more flexible than litigation, for example parties can appoint as arbitrators experts in a specialist field and tailor the procedure to suit the needs of any particular case.
However as a word of warning arbitration is not ideal in all circumstances. A tribunal cannot generally compel a third party to join the arbitration nor can it consolidate a number of related arbitrations, which can lead to parallel proceedings which can have inconsistent outcomes even where the arbitration arises from similar or the same disputes.
Further, delays can occur at the beginning of the proceedings as a result of the procedure for appointing the tribunal. Arbitrators are very busy and sometimes substantial delays can occur before any hearing can be accommodated. Arbitrators powers of coercion are much more limited than courts and there is a greater opportunities for deliberate delays and breaches of procedural guideline.
Arbitration is much more dependant on the behaviour of the parties and the tribunal. Although an experienced tribunal and cooperative parties can work together to agree a procedure to minimise costs, parties in dispute are frequently uncooperative and as arbitrators do not have the coercive powers judges do this can result in delay and unnecessary costs.