Arbitration Agreement

One of the general principles of the Arbitration Act 1996 is that "parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest" (s.1 (b)). The agreement should be made or at least recorded in writing and submit present or future disputes between the parties to arbitration (s. 6 (1) Arbitration Act 1996). Preferably the seat or jurisdiction of the arbitration should be specified, whether the tribunal is to consist of one or more arbitrators, how the arbitrator or arbitrators are to be appointed and sometimes the language of the proceedings and the arbitration rules. Many arbitration agreements require the arbitrator to determine his or her jurisdiction even though s.30 of the Act enables the arbitrator to rule on his or her own jurisdiction.  

Rule 2 (1) of the NIPC Arbitration Rules requires every arbitration agreement to incorporate those Rules. Unless the parties express agree otherwise rule 2 (2) requires the dispute to be be determined by a single arbitrator agreed by the parties or appointed by NIPC Ltd., the seat of the arbitration to be England and Wales and the language of the arbitration to be English.

The combined effect of the Act and the Rules means that a simple reference to an arbitration pursuant to the NIPC Arbitration Rules would probably be effective. However, the following clause is recommended for standard terms and conditions and contracts:

"(1) Any dispute or difference between the parties shall be referred to arbitration before a single arbitrator agreed by the parties or, in the absence of agreement within 14 days of the reference, appointed by the managing director of NIPC Ltd.
(2) The seat of the arbitration will be England and Wales,
(3)  The NIPC Arbitration Rules will apply."

The following agreement mutatis mutandis is recommended for existing disputes:

"An Agreement dated ......... 20.. and made between
(1)  ABC of ..................................... ("the Licensor") and
(2)  XYZ of ...................................... ("the Licensee")
Whereas:
A. ........................................................................................
B. ........................................................................................
IT IS AGREED as follows:
1. The parties shall refer their dispute to arbitration before a single arbitrator sitting in Leeds.
2. The arbitrator shall be chosen as follows:
(a) Each party shall nominate up to 3 arbitrators from the NIPC Panel within 7 days of the date hereof;
(b) Should the same name appear on both parties' nominations the parties shall appoint that person as their arbitrator;
(c) Should the parties be unable to agree on an arbitrator within 14 days of the date hereof, either party way invite the Managing Director of NIPC Ltd. for the time being to appoint an arbitrator on their behalf.
3. The NIPC Arbitration Rules will apply.
3. The seat of the arbitration shall be England and Wales.
4.  The dispute will be determined in accordance with the law of England and Wales.
5.  This agreement shall be construed and implemented in accordance with English law.
Signed .........................
ABC
....................................
XYZ"

Members of NIPC Law will be glad to assist in drawing up and reviewing arbitration agreements and contracts or standard form terms containing arbitration agreements.