1 Arbitration Agreements
1.1 What, if any, are the legal requirements of an arbitration agreement under the laws of your jurisdiction?
Ireland adopted the UNCITRAL Model Law on International Commercial Arbitration (the "Model Law") with the passing of the Arbitration Act 2010 into law. Ireland applies Option 1 of Article 7 of the Model Law to the requirements of an arbitration agreement. An arbitration agreement must be in writing, which can be as an arbitration agreement within a contract or as a stand-alone agreement to arbitrate. The requirement for an arbitration agreement is interpreted broadly, such that it may be satisfied if its content is recorded in any form.
1.2 What other elements ought to be incorporated in an arbitration agreement?
While not strictly necessary to give effect to an agreement to arbitrate, it is good practice for parties to consider expanding the scope of agreement, so as to avoid potential disputes and delays. While contractual documents containing agreements to arbitrate often contain choice of law clauses applicable to the law applicable to the underlying contract, parties often address choices of law applicable to the conduct of the arbitration itself, the seat of the arbitration, and the language of the arbitration, within their arbitration agreements.
The Arbitration Act 2010 provides for a default position on matters like the number of arbitrators, the question of interest and costs, and the powers of the arbitrator; however, the parties are free to agree on broad procedural and substantive issues such as: the procedure for the appointment of an arbitrator (including a mechanism in default of agreement); the number of arbitrators to be appointed; any minimum qualifications of the arbitrator; the seat of the arbitration; the governing law; the language for the conduct of the arbitration; the costs of the arbitration; specific powers of the arbitral tribunal; or applicable rules. Many parties agree to address these issues by agreeing to conduct the arbitration by reference to a particular set of procedures or rules (e.g., ICDR, ICC, UNCITRAL, etc.). However, this is not strictly required, and in our experience, many parties are content with agreements to arbitrate on an ad hoc basis.
The parties to an arbitration agreement are also free to agree to explicitly give the High Court jurisdiction to assist in relation to security for costs and discovery/disclosure, which powers are otherwise excluded by default under section 10(2) of the Arbitration Act 2010.
Finally, Ireland's Arbitration Act allows parties to make express agreements on the issue of costs of arbitration and the arbitral tribunal's power to make awards of costs. Section 21(1) of the Arbitration Act 2010 provides that: "The parties to an arbitration agreement may make such provision as to the costs of the arbitration as they see fit." This provision was specifically included to accommodate agreements, a party to which may reside in a jurisdiction that does not recognise "cost shifting" as being normal in dispute resolution, and which may wish to seek to limit such cost shifting under the agreement. Ireland is a cost shifting jurisdiction, in that costs are typically awarded on the basis that they "follow the event", to be paid by the losing party, absent special circumstances. Crucially, subsection 21(3) of the Act provides that: "Where no provision for costs is made as referred to in subsection (1) or where a consumer is not bound by an agreement as to costs pursuant to subsection (6), the arbitral tribunal shall, subject to subsection (4), determine by award those costs as it sees fit."
1.3 What has been the approach of the national courts to the enforcement of arbitration agreements?
The Irish courts are strongly supportive of arbitration and have been reluctant to interfere in arbitrations or arbitration awards. As discussed below, the grounds upon which an arbitration award may be challenged, or upon which an Irish court would consider not giving effect to an arbitral award, are extremely limited.
Irish jurisprudence also demonstrates a strong support for giving effect to parties' agreements to arbitrate and the Irish courts will stay court proceedings in favour of arbitration, where there is a valid agreement to arbitrate. In that regard, the Irish courts tend to adopt a liberal approach to the interpretation of arbitration agreements. Ireland applies Article 8 of the Model Law to the consideration of whether court proceedings should be stayed, and in the face of a valid arbitration agreement that governs the matter in dispute, it is for the party opposing arbitration to establish that the arbitration agreement is null and void, inoperative or incapable of being performed. These grounds have traditionally been narrowly construed by the Irish courts. Where the requirements under Article 8(1) of the Model Law are satisfied, the Irish courts consider it mandatory that they refer the matter to arbitration, and will give full judicial consideration in considering this issue. There is no right of appeal to the High Court's determination in this regard.
2 Governing Legislation
2.1 What legislation governs the enforcement of arbitration proceedings in your jurisdiction?
The Arbitration Act 2020, adopting and applying Model Law, applies to any arbitrations commenced after 8 June 2010. Regarding the enforcement of international arbitration awards, Ireland acceded to the New York Convention, which entered into force in Ireland in 1981. Ireland is also a party to the Geneva Convention and the Geneva Protocol. Subject to the provisions of the Arbitration Act 2010, the New York Convention, the Geneva Convention and the Geneva Protocol all have force of law in Ireland.
2.2 Does the same arbitration law govern both domestic and international arbitration proceedings? If not, how do they differ?
Yes, the Arbitration Act 2010 governs both domestic and international arbitration proceedings. For arbitrations commenced after 8 June 2010, there is no longer any distinction between the law applicable to domestic and that applicable to international arbitrations.
2.3 Is the law governing international arbitration based on the UNCITRAL Model Law? Are there significant differences between the two?
Yes. The Arbitration Act 2010 adopted the Model Law, which, subject to a number of very limited amendments to the Model Law (for example, the default number of arbitrators is set at one under the Arbitration Act 2010, whereas Article 10(2) of the Model Law stipulates three), applies in Ireland.
2.4 To what extent are there mandatory rules governing international arbitration proceedings sited in your jurisdiction?
There is no distinction between the rules applicable to domestic and international arbitrations. Model Law, as adopted by the Arbitration Act 2010, applies to both forms, and no additional mandatory rules apply to international arbitrations sited in Ireland.
3.1 Are there any subject matters that may not be referred to arbitration under the governing law of your jurisdiction? What is the general approach used in determining whether or not a dispute is "arbitrable"?
In the context of international trade, contracts and transactions, there are no real limitations on the types of disputes that can be referred to arbitration. The Arbitration Act 2010 does, however, specify that it does not apply to certain employment and labour arbitrations. Further, a consumer is not bound by an arbitration agreement where the arbitration clause was not specifically negotiated and the claim does not exceed €5,000.
As regards whether or not a particular dispute is "arbitrable", this will generally be determined by the wording of the arbitration clause or agreement, if one exists. In construing such terms, the courts have applied general principles of contractual interpretation together with certain additional principles applicable to the interpretation of arbitration agreements.
3.2 Is an arbitral tribunal permitted to rule on the question of its own jurisdiction?
Irish law recognises and gives effect to the principles of kompetenz-kompetenz , and Ireland has adopted Article 16 of the Model Law giving arbitral tribunals the right to rule on its own jurisdiction, including in respect of any objections concerning the existence or validity of the arbitration agreement.
3.3 What is the approach of the national courts in your jurisdiction towards a party who commences court proceedings in apparent breach of an arbitration agreement?
As noted above, the Irish courts are considered pro-arbitration and will, where appropriate, readily stay proceedings to arbitration in line with Article 8 of the Model Law
3.4 Under what circumstances can a national court address the issue of the jurisdiction and competence of an arbitral tribunal? What is the standard of review in respect of a tribunal's decision as to its own jurisdiction?
In accordance with Article 16 of the Model Law, a challenge to jurisdiction of the arbitral tribunal must be raised no later than the submission of the statement of defence or, where it is suggested that the tribunal has exceeded its jurisdiction, as soon as the alleged infringement occurs. Where a tribunal rules on such a challenge, any party may apply to the High Court within 30 days under Article 16(3) of the Model Law on the question of jurisdiction. Pending the hearing of the question by the Court, the arbitration may proceed. The High Court may conduct a full rehearing on questions of jurisdiction (as opposed to an appeal). The Court may, in this regard, consider such evidence as it sees fit, and is not bound by the submissions made to the arbitrator.
3.5 Under what, if any, circumstances does the national law of your jurisdiction allow an arbitral tribunal to assume jurisdiction over individuals or entities which are not themselves party to an agreement to arbitrate?
An arbitral tribunal cannot assume or assert jurisdiction over an individual or entity that is not a party to the arbitration agreement. Even if that party is a party to other related arbitral proceedings, an arbitral tribunal has no power to consolidate such proceedings or to conduct concurrent hearings unless the parties agree. Where there is no arbitration agreement, the High Court may only adjourn proceedings under section 32 of the Arbitration Act 2010 to enable parties to consider arbitration if the parties so consent, but it cannot direct the parties to arbitrate a matter.
3.6 What laws or rules prescribe limitation periods for the commencement of arbitrations in your jurisdiction and what is the typical length of such periods? Do the national courts of your jurisdiction consider such rules procedural or substantive, i.e., what choice of law rules govern the application of limitation periods?
There are no limitation periods specific to the commencement of arbitrations. The Statute of Limitation Act 1954, as amended, expressly provides that the Arbitration Act 2010 and any other limitation enactments apply to arbitrations as they apply to actions in the court. As such, the applicable limitation period, and the dates on which a cause of action is deemed to accrue, are those applicable to the cause of action at issue. Generally, claims in contract must be brought within six years of the date of the breach of contract, whereas claims in tort must be brought within six years of the date on which the damage occurred. Other types of claims may be subject to very specific limitation periods (e.g. defamation and product liability claims).
Limitation periods are considered to be procedural rather than substantive. The limitation period generally operates to bar a remedy rather than extinguish the right.
Originally Published by ICLG
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.