Challenging an award is a public policy debate, past and present, with discussions mandating risk process to foreign Contracting Parties under both systems.

In medieval England, arbitration procedures and extra-judicial dispute resolutions were and remain largely unwritten. This lack of interest may be attributed to the deep rooted believe that legal changes in England are continuously developing as well as being linear and progressive since the middle ages where Law has developed and was continuously refined under the authority of the Crown.

In the Middle East Arbitration developed through customs and tribal traditions. Then lately it was refined into rules set through the teachings of Profit Muhammad and the Quraan.[1]

Islam religion influence developed into Islamic Law (Sharia’) and Islamic jurisprudence (Fiqh), which introduced a comprehensive set of legislations that are presently applied in the majority of Middle East Judicial Systems.

Almost all parties to contracts find Arbitration Awards’ effective conclusiveness appealing.

On the other hand other parties and maybe even those who find Arbitration appealing, are also concerned about the possibility of awards against them that may be of questionable decisiveness or irregular (corrupt) environment and would like to be able to appeal such awards to trustworthy arbitrators of a superior standing tribunal.

For example and for no condescending reasons, but maybe for cultural differences, International investors and parties to contracts of foreign origin find statutory grounds in the Western hemisphere more trustworthy and appealing than local legislations in countries such as in the Middle East.

To accomplish any outcome of the analysis of Arbitration procedures, especially challenges to its sanctity and its ‘equity and fairness’ we should look at the historical progress of Dispute Resolution and development of the different methods and theories of Arbitration over time.

By looking, as Law Scholars, back at how our societies developed from tribal nomads into nations, and from sword fights into civilised court rooms, we might be able to conclude how current and future linear developments in Laws governing ADR in general and Arbitration in particular, should further improve to keep in line with the fast growing and highly active world of Dispute Resolution.

Before Law there was Arbitration..

Man knew different methods of resolving disputes since the dawn of history and since before the structure of a state or litigation systems.[2]

In the 1990’s a clay cylinder dating back to 2050 BC, almost 5000 years old, was excavated in Babylon (Modern Iraq) with an inscription in Sumerian language of a treaty between the two cities of Lagash and Umma where the conflict over water rights between the two cities was agreed to be arbitrated by the Chief God Enlil and the Kish King Mesalim.[3]

In old Pharaonic Egypt, Arbitration was also adopted as an ancillary to the State Judicial System.

Courts and the power to interfere in Arbitration Awards

In the appeal by Lesotho Highlands Development Authority (Respondents) v Impregilo SpA and Others (Appellants) [2005] UKHL 43, the House of Lords has shown its support for interpreting the Arbitration Act 1996 in a way that reflects the general principles of the Act, leaving the parties to agree how their disputes are to be resolved and giving the Courts only those powers which are essential to support arbitration. Their Lordships approved a comment that arbitration should be “regarded as a freestanding system, free to settle its own procedure and free to develop its own substantive law”. The judgment makes it clear that the Courts should not review an arbitration award simply on the basis of an error of law on the part of the tribunal, as this does not in itself amount to a tribunal acting in excess of its powers.

The majority of the House of Lords stated that the tribunal had committed an error of law in deciding that it had a discretion to deal with currencies in whatever way it felt appropriate. However, it was held that the issue in question was not whether the tribunal had made an error of law but whether it had exceeded its powers. Erroneously exercising a power that a tribunal does have is not the same as purporting to exercise a power which it does not. Only the latter will provide the basis of a successful challenge under section 68(2)(b) of the Arbitration Act.

The House of Lords has given the Courts a clear indication that they should not undertake a review of the merits of the tribunal’s decisions, save where the Act expressly provides for that, in section 69. There is clear support for the Arbitration Act as a new regime which should be interpreted favourably towards arbitration and the interpretation of which should avoid references to pre-1996 decisions where they are unnecessary.[4]

Posted By: Mohamed Raffa, LLM, FCIArb

[1] N. Albejad, Arbitration in Saudi Arabia (Institute of Public Administration, 1999).

[2] Henry P. Devries – International Commercial Arbitration : A Transitionnel View – Journal of International Arbitration V1.p7 April 1984

[3] G.A. Raymond, Conflict Resolution and the Structure of the State System (Allanheld, Osmun & Co. 1980)

[4] http://www.herbertsmith.com/NR/rdonlyres/BBF997EB-63E6-468B-AD2D-E69CC0258487/1231/Arbebulletin15July05.html

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