Full Contents List

• Introduction
  1. Preface
  2. Foreword
  3. Introduction
• Regional Overviews
  1. Recent Developments in Investment Treaty Arbitration
  2. Challenges to Arbitrators
  3. State of Necessity in Investment Arbitration
  4. Arbitration of Intellectual Property Disputes
  5. Provisional Application of the Energy Charter Treaty
• Country Overviews
  1. Austria
  2. Czech Republic
  3. Denmark
  4. Finland
  5. France
  6. Greece
  7. Ireland
  8. Netherlands
  9. Poland
  10. Portugal
  11. Spain
  12. Ukraine
  13. United Kingdom
  14. Middle East Overview
  15. Lebanon

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Arbitration in Ireland is as old as the hills and its roots can be traced back to the Gaelic period prior to the Norman invasion. The Brehon Laws, which date back to approximately 600 AD, were handed down orally across generations. They were based on principles of equality and justice and incorporated a system in many respects equivalent to arbitration. Accordingly, arbitration in Ireland presently has an important place in the Irish legal system. In modern times, arbitration in Ireland is governed by statute.
The purpose of this article is to give a brief overview of the the legislation governing domestic and international arbitration in Ireland and to illustrate the attitude of the courts towards arbitration.

Legislation

In the case of domestic arbitration, the principal law is the Arbitration Act of 1954 (the 1954 Act) which has subsequently been amended by the Arbitration Act, 1980 (the 1980 Act) and the Arbitration (International Commercial) Act, 1990 (the 1990 Act).
In the domestic context, the 1954 Act requires an arbitration agreement to be in writing. The scheme of the Act is to recognise that by choosing to agree to refer disputes to arbitration, the parties are exercising their right to regulate their relationship and therefore the intention of the parties is of critical importance. Many of the provisions of the legislation commence with or contain the words “unless a contrary intention is expressed in the agreement”. Therefore, in effect, the primary source of guidance in respect of any arbitration is the agreement itself. Irish legislation seeks to provide a framework for the arbitration and set out default provisions that take effect in the absence of any contrary agreement.
An arbitration agreement under the 1954 Act means a written agreement to refer present or future differences to arbitration, whether an arbitrator is named in the agreement or not. The Irish courts have assumed jurisdiction to stay proceedings in favour of arbitration in circumstances where a binding contract has included an arbitration clause or where there is an arbitration agreement by reference to other documents. In one case, the High Court concluded that an arbitration clause had survived the avoidance of an insurance contract and the Court went on to hold that the clause itself was sufficiently widely drafted to capture the matters which were in dispute, and accordingly arbitration was valid. This approach is similar to that adopted by the Court of Appeal in England in the recent case of Fiona Trust and Holiday Corporation v Yuri Privalor and others [2007] EWCA Civ 20, which involved an allegation of illegality.
An arbitration is commenced by serving a written notice on the other party requiring them to appoint or agree in the appointment of an arbitrator or requiring the other party to submit the dispute to a person named or designated in the agreement. The default number of arbitrators under the 1954 Act is one, but the parties are free to provide in an agreement that the reference shall be to two arbitrators and the 1954 Act contains provisions as to how the arbitrators shall be appointed. Where an arbitration agreement provides for two arbitrators, the agreement is deemed to include a provision that the two arbitrators must appoint an umpire immediately after they are themselves appointed.
Unless the contrary intention is expressed, an arbitration agreement will be deemed to contain a provision that the parties must, subject to any legal objection, submit to be examined on oath by the arbitrator and produce before the arbitrator all documents within their possession or power that may be required or called for.
While the parties in a domestic arbitration may have recourse to the courts in certain circumstances, High Court case law illustrates very clearly the Court’s inclination to uphold the arbitral process and only to intervene in exceptional circumstances. The High Court has the same power of making orders in respect of matters such as security for costs, discovery and inspection of documents and interrogatories, the giving of evidence by affidavit, securing the amount in dispute in the reference and interim injunctions or the appointment of a receiver as it has in relation to an action or matter in the courts.
The High Court has the power to remit matters referred to the arbitrator for reconsideration. The High Court recognises the principle that, even where arbitrators have acted correctly, where there is a mishap or misunderstanding resulting in some aspect of the dispute not being considered as fully as it should have been, it may be inequitable to allow the award to stand without further consideration by the arbitrator. As one High Court judge put it, he could not see “any imperative of policy, reason or justice which should cause this court to set any permanent inflexible and immutable limits to the exercise of the wide power conferred on it by the Oireachtas [the legislature] for the obvious purpose of ensuring justice and fairness between the parties within the arbitration framework”.
As a general rule, unless a contrary intention is expressed, the award of an arbitrator is final and binding. The Supreme Court has confirmed that it must under no circumstances act as a court of appeal from findings by arbitrators and that it can only set aside awards by arbitrators in limited and defined circumstances. The parties are bound by an arbitrator’s award, which will only be interfered with by the High Court in circumstances where it appears that the arbitrator in some way misconducted himself or made an error as to his jurisdiction or an error of law that is patent on the face of his award. Unless a contrary intention is expressed in the arbitration agreement, an arbitrator may correct any accidental clerical mistake or error in the award.
Unless an arbitration expressly states otherwise, every arbitration agreement is deemed to include a provision that the costs of the reference and award will be in the discretion of the arbitrator, who may, with the consent of the parties, tax or settle the amount of costs.
Unless it is part of an agreement to submit to arbitration a dispute that has arisen before the making of that agreement, any provision in an arbitration agreement to the effect that the parties or any party thereto will in any event pay their own costs of the reference or award is void.
The 1954 Act allows an arbitrator to state any question of law arising in the course of the reference or any award in the form of a special case for the decision of the High Court.
The High Court has held that in certain circumstances it may be unjust to permit the unsuccessful party to assert a right to have the decision of the High Court substituted for that of the arbitrator when they had already agreed that the question of law should be decided by the arbitrator. The Supreme Court has noted that an arbitrator’s discretion must be exercised on proper grounds and not capriciously or randomly. This, of course, accords with the general requirement of fair procedures.
The Supreme Court has held that a fundamental ingredient of the concept of arbitration is the finality of the decision of the arbitrator subject to certain qualifications and precautions. The law acknowledges that where two parties agree to refer a dispute to arbitration by a particular individual they are taken to have abandoned their right to litigate that precise question.
The Supreme Court has decided that once an arbitrator has made his award without qualification and in the absence of any request that he should state any question of law on any part of his award in the form of a special case, the power under the Arbitration Act to state a special case for the determination of the High Court is spent. The Supreme Court has also held that the power of the High Court to remit an award for reconsideration by an arbitrator might be appropriate in cases involving a patent error of calculation or where awards are prima facie ambiguous or uncertain.
The 1954 Act allows the court to remove an arbitrator who fails to use all reasonable dispatch in proceeding with a reference and making an award, in which event the arbitrator would not be entitled to receive any remuneration for his services.
Where an arbitrator has misconducted himself or the proceedings, the High Court may remove him.
The courts in Ireland have considered the question of an allegation of bias against an arbitrator and, in essence, the test is whether the plaintiff has established that a right-minded person with full knowledge of the facts would have been led to conclude that there was a real likelihood of bias in the arbitrator acting in the arbitration between the particular parties. There would always be an ethical imperative on arbitrators to disclose any circumstances that would give rise to either a bias or a perception of bias.
The 1980 Act provides for a procedure whereby a party can apply to the courts for an order that court proceedings be stayed in favour of arbitration. Such an application may be made at any time after an appearance has been entered but before delivering any pleadings or taking any other steps in the proceedings. On hearing such an application, the court must stay the proceedings unless it is satisfied that the arbitration agreement is null and void, inoperative or incapable of being performed or that there is not in fact any dispute between the parties with regard to the matter agreed to be referred. This statutory provision clearly demonstrates the support of the legislature for the arbitral process.
The 1980 Act also gives force of law in Ireland to the New York Convention. The Act provides that an arbitral award made in pursuance of an arbitration agreement in the territory of a foreign state that is a party to the New York Convention will be enforceable in Ireland as if it were an award made under domestic legislation. The applicant for enforcement must produce the duly authenticated arbitration agreement and award (originals or duly certified copies) and a sworn translation if the original is not in the Irish or English language. The Act sets out certain limited circumstances when enforcement would be refused.
The 1980 Act also contains a section whereby the Irish state approves acceptance of the Washington Convention.
The Arbitration (International Commercial) Act, 1998, adopts the UNCITRAL Model Law on international commercial arbitration and designates the High Court as the court of competent jurisdiction in Ireland. The Act sets out the powers of the High Court and it provides that unless otherwise agreed by the parties, the arbitrator may direct that a party to an arbitration agreement or a witness who gives evidence in proceedings before the arbitral tribunal be examined on oath or affirmation and authorises the arbitral tribunal to administer any oaths or take any affirmations necessary for the purposes of the examination. The 1998 Act allows the parties to agree on the arbitral tribunal’s powers regarding the award of interest and it provides that, in default of agreement, the arbitral tribunal may award simple or compound interest as the justice of the case requires. The 1998 Act also provides that the parties may agree as to how the costs of the international commercial arbitration are to be allocated and on the costs that are recoverable. The Act provides that an arbitrator will not be liable for anything done or omitted in the discharge of their duties as arbitrator unless the act or omission is shown to have been in bad faith.
The 1998 Act provides that an award made by an arbitral tribunal under an arbitration agreement will be enforceable in Ireland either by action or with leave of the High Court, in the same manner and with the same effect as if it were a judgment of the High Court. An award will be treated as binding for all purposes on the parties between whom it was made and may be relied on by them by way of defence, set off or otherwise in any legal proceedings in Ireland.

Arbitration environment in Ireland today

Arbitration is a key feature in the dispute resolution field in Ireland today. The legislation outlined above has given the process a framework in which participants can and do have confidence. However, like many other areas of the law, the system needs to be kept under review so that it keeps pace with the changing needs of its users.
At present there is debate among practitioners about the need to reform the Arbitration Acts. In recent years, Ireland has seen the introduction of a commercial list in the High Court, commonly referred to as the Commercial Court. In general, cases in this Court have a value in excess of €1 million and, once admitted to the Court, they are subject to directions and case management by the Court that has resulted in their duration being reduced from many years to a matter of weeks. In this context, the traditional method of litigation has come under the spotlight, with parties seeking to find ADRs where the fast-track approach of the Commercial Court is not available to them. Arbitration is seen as a way of bring about efficient dispute resolution and its use is on the increase.
Both the present attorney general and his predecessor have spoken publicly in favour of arbitration as a means of dispute resolution. At a recent conference in Dublin the attorney general commended a document entitled ‘Techniques for Controlling Time and Costs in Arbitration’, published by the International Chamber of Commerce (ICC No. 843), and indicated the desirability of supporting any initiatives to advance arbitration.
While arbitration in Ireland used traditionally to be confined to sectors such as construction and travel, where it was built into the contractual relationships between the parties, over recent years it has become far more widely used across all economic sectors as a means of efficiently dealing with disputes. Commercial agreements now commonly include arbitration clauses and this has given rise to increased arbitration activity in Ireland.
The American Arbitration Association’s (AAA) International Centre for Dispute Resolution (ICDR) administers all the AAA’s international matters. As a measure of the importance of Ireland as an arbitration centre, the ICDR intends in 2008 to relocate its European case management team to its Dublin office. According to the ICDR, Ireland saw arbitration grow by 133 per cent in 2006, with significant growth in insurance, equipment sale and energy.
The Chartered Institute of Arbitrators established an Irish branch over 25 years ago and it is extremely active in administering and promoting arbitration in Ireland.
As the above shows, the legislature and courts have firmly enshrined arbitration in the Irish legal system and the courts have robustly defended the autonomy of the arbitral process. The courts have made it clear that they will not interfere with the arbitral process unless there is a clear need to do so.
Ireland in general (and Dublin in particular) is looking forward to hosting the International Council for Commercial Arbitration (ICCA) Conference in June 2008. This promises to be the biggest event in the 2008 arbitration calendar and it also coincides with the 50th anniversary of the New York Convention. This event will turn the arbitration spotlight on Ireland and bring to its shores a large body of distinguished practitioners. This can reasonably be expected to provide a further boost to arbitration both domestic and international. The conference will showcase Ireland as a venue with all the knowledge and infrastructure required to facilitate the conduct of complex, high-end arbitration.
Ireland is a conveniently located, with easy access from all areas of the world. On arrival, participants can avail themselves of the services of highly skilled and experienced arbitrators and legal practitioners. Ireland is geared to providing participants in international arbitration with the skills, facilities and latest information technology for the conduct of complex high-value arbitrations in a legal system which has proved itself ready, willing and able to vindicate the process.
Arbitration has a long and distinguished history in Ireland and all the signs are that it also has a bright future ahead. Ireland is alive to the challenge of providing efficient and effective methods of dispute resolution, and arbitration will play a very significant role in meeting that challenge.

Dillon Eustace

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