UK: The State Of Scottish Arbitration : New Bill And New Code

Background

Scotland does not currently have a single statute regulating the law governing domestic and international arbitration. Unlike many countries which seek to promote themselves as ideal venues for the resolution of disputes through arbitration, the sources of Scotland's domestic arbitration law in particular, are wide-spread and difficult to identify. The law governing international arbitrations is easier to find.

Old Bill

In 2002, the Arbitration (Scotland) Bill was launched, aiming to combine Scotland's domestic and international arbitration law into a single source. Unfortunately, the Bill failed to attract sufficient political backing and did not advance through the Parliamentary process.

New Bill

At the beginning of November 2007, however, hopes for a new single Scottish arbitration statute re-emerged, courtesy of Scotland's Justice Secretary Kenny MacAskill. Mr MacAskill has chosen to lend his support to the advancement in Scotland of alternative dispute resolution ("ADR") such as arbitration, adjudication and mediation, and wants the courts to be the venue of last resort for settling disputes. He has also expressed an intention to establish a government accreditation scheme for agencies offering arbitration services.

The aim is for Scotland to build on its already well-developed expertise in ADR with the long term goal of Scotland being seen as an international leader in the field; and becoming a venue of choice for global companies choosing where to resolve their cross-border commercial disputes. Recognised as an area of growth in line with developing world trade, a clearly defined and effective arbitration procedure could result in a boost for Scotland's economy.

A new arbitration bill is due to be issued in the Spring of 2008. No indication has yet been given as to whether the preceding Bill will be used as a template, or to what extent the new bill may be based on England's well-respected Arbitration Act.

Dispute Resolution Centre

Importantly, and in addition to creating a modern statute governing arbitration, the Scottish Government also wants to develop a designated dispute resolution centre, with the suggested location of Edinburgh, to help attract international disputes, in addition to domestic ones.

What Next?

We will follow the development of the bill once it has been launched and provide an update on its content, application and the potential impact it will have.

New Code

In the meantime, the Scottish Arbitration Code, an excellent and readily-accessible body of Rules, first launched in 1999 and revised and re-launched in November 2007, remains available for adoption by parties to a dispute wishing to have the dispute arbitrated in Scotland.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.