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Arbitration

The reference for settlement of a dispute normally arising out of contract, to one or more independent persons, rather than to a court of law. The arbitration must be agreed initially, it cannot be imposed afterwards. Some advantages are: simplicity, speed, economy and the avoidance of publicity. There is, of course, no guarantee of justice or impartiality on the »art of the arbitrator. Contracts of arbitration may be oral or may be in writing in accordance with the Arbitration Act 1950. This Act rules that the arbitrator need not be named but the parties must sign, though signatures may be dispensed with where the contract is obvious from the behaviour of the parties. An agreement to refer a matter to arbitration does not prevent either party taking legal proceedings instead. This right to take proceedings cannot be denied by the contract. A court may, however, insist on the arbitration. Costs of arbitration will be apportioned by the arbitrator. Where there is more than one arbitrator, an umpire is appointed. His decision is final if the arbitraors fail to agree (known as umpirage). The decision of the arbitrator is called the award. In order to be binding, it must be final, certain, possible and consistent. It must also take all matters submitted into account. The arbitrator must not act outside his jurisdiction. He may, and if required to do so must, state a case for a court to decide where a point of law is at stake. The award may be set aside, referred back or enforced by the court, depending on circumstances. Certain awards made in foreign countries may be enforced in England.

Reference: The Penguin Business Dictionary, 3rd edt.