Michael D'Arcy (Wexford, Fine Gael)

This Bill makes a number of changes to the law on arbitration in Ireland. In particular it makes improvements to the 1998 Arbitration Act which introduced an internationally recognised model law for all international commercial arbitration in Ireland. The new Bill also ensures that any recourse to court will be speedy and will avoid unnecessary costs. It also removes the possibility of court orders which might be unhelpful to the arbitral process such as orders for security for costs and discovery.

These are the words used by Mr. Colm Ó hOisín, SC, chairman of the Bar Council's arbitration and alternative disputes resolution committee, in an article in The Irish Times. He proceeds to state:

Significantly the new Bill also extends the model law to domestic arbitrations. Up to now it had been governed by an outdated law which was no longer in sync with modern procedures.

The Arbitration Bill is a very welcome development as it incorporates international best practice into Irish law. The new Bill is a very important positive step in establishing Ireland as an attractive option as a neutral third party country venue for international arbitration.

It is important to note that arbitration forms part of the services industry, which we hope will develop and make a major contribution to our GDP. When one considers the downturn in the economy and the current lack of finance, it is clear arbitration could give rise to huge benefits in the future. I spoke with a senior partner in one of the major firms who informed me that his company was obliged to announce that its 15 trainees will be laid off before Christmas. For whatever reason, the legal profession has not garnered a great deal in the way of kudos in the past. It must be noted, however, that it, along with other professions, is feeling the pinch in the current economic climate. When one considers that 750 people are currently studying for FE1s with the Law Society of Ireland, it is clear that legislation that will underpin Ireland's attempts to become an important centre for arbitration must be put in place.

In the article to which I refer, Colm Ó hOisín states:

Many international arbitration disputes involve multi-million euro amounts. Choosing Ireland as the arbitration venue for these disputes is a vote of confidence in the quality of our government, business and legal structures. Ireland is a neutral, English-speaking venue which has a common law system and an evolving, strong legal framework which is attractive for dispute resolution.

The West's legal system has as its basis the English system, which has been in place for centuries. If we get the legislation right and companies and other countries can see Ireland's value as an arbitration centre, we will prosper. We must ensure the law we put in place is good, progressive and fair. In that context, this legislation provides a template that will prove beneficial in the future.

In his article, Colm Ó hOisín also states:

Hosting the arbitration of these disputes has many significant economic, legal and business tourism benefits.

Nearly 1,000 overseas companies have made Ireland their European base, in many sectors such as finance, information technology, pharmaceuticals and other services. We have a wide range of translation and stenography services, which are another advantage to our location.

He goes on to observe:

The courts also support and encourage arbitration. For example, the Commercial Court provides a fast track system for dealing with commercial litigation and can potentially be used in arbitration matters. The development of a purpose-built centre for arbitration and dispute resolution would further enhance our ability to attract this business. International best practice is to have such centres and, in order to compete with London, Paris and New York, Ireland must also offer similar facilities.

I understand a significant case will soon be coming before the High Court. It is important to get legislation right in the first instance and not be obliged to revisit it. If we do so, we will enhance our reputation on the international scene.

Mr. Ó hOisín's article continues:

Ireland Inc as a brand has had worldwide success. Many leading Irish people have figured on the international economic and political stage and this helps attract people from overseas to Ireland. This business would greatly enhance our economic and legal standing. It would also encourage domestic alternative dispute methods, which can only be of benefit in repairing fractured business relationships.

Many sectors in the Irish economy are internationally focused and have made inroads into markets abroad. The Irish legal services community has been more domestically focused up to the present.

Dublin ICCA 2008 [to which the Minister referred] was the biggest international arbitration conference ever. It has generated significant goodwill to Ireland. This coupled with the new Arbitration Bill and the various initiatives prompted by the conference, should allow us to achieve the goal of establishing Ireland as a premier centre for international dispute resolution.

I referred to arbitration and dispute resolution. It is important we get this right. There is nothing as annoying as a new Member of the House as the possibility that this legislation will have to be improved upon. We should ensure, therefore, we get it right on the first occasion.

Section 9 provides that the High Court is to be the court specified under Article 6 of the model law for the performance of certain functions of arbitrational assistance and supervision. I do not intend to speak about all of the matters referred to by the Minister. However, there are a couple of issues in regard to small claims that are important. Far too often small claims clog up the system. I am sure the international dispute resolution procedure of which I am speaking will deal not with small claims but with international claims of significance.

Section 30 provides that the Bill shall not apply to an arbitration agreement that relates to a claim which does not exceed the monetary limit for small claims in the District Court, currently €2,000. Such a claim, if not individually negotiated by the parties, will be deemed to be an unfair term for the purposes of the European Communities (Unfair terms in Consumer Contracts ) Regulations 1995 and 2000. It is important we ensure small claims cases do not clog up the courts or the arbitration process.

Section 34 deals with special oversight and preserves the power of the arbitrator to state a case for the appropriate court as to an award. Also, it allows a party to an arbitration to make an application to that court seeking that an award be remitted to the arbitrator on the grounds that new evidence has emerged which is likely to materially alter the decision in regard to that award or seeking a direction that the arbitrator state a case for the decision of the court. Arbitration can be and is hard, given the requirement for privacy and confidentiality on the part of the parties involved and the arbitrator. Our attitudes may vary.

The Minister referred to section 11 which provides an alternative path to litigation. There is, as the Minister stated, evidence to suggest the parties are anxious to avoid excessive court intervention, which can only be welcomed. Section 11 further states there is to be finality in regard to the court's determination in respect of a number of applications. These include an application to stay a court action in a matter which is the subject of an arbitration agreement; an application to set aside an arbitral award or an application to recognise and enforce an arbitral award. The Minister has stated it is a new departure for our law that all these applications will no longer be subject to appeal to a higher court, thus giving to the arbitrator a court of final appeal.

As I stated, it is important we get this right and that we ensure no confusion arises that may present as a flaw in the legislation. Perhaps the Minister will clarify this matter. It may be that I have not read or interpreted the section correctly. We must ensure we do everything correctly.

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