I move that this Bill be read a Second Time. The Bill will fill a gap which has existed in our law for a long time in that it will provide an up-to-date and effective law of arbitration. The Bill deals with four types of arbitration. First if all, it provides for what is called voluntary arbitration, the essence of which is that the parties to some dispute refer that dispute to a tribunal of their own choosing instead of to a court of law. Secondly, the Bill deals with statutory arbitrations namely, arbitrations by tribunals constituted under statute to settle particular types of disputes which arise as a result of statute. Thirdly, the Bill covers references to arbitration by the High Court, where matters of account arise in cases before that court. Finally, the Bill includes provision for the enforcement of foreign awards made pursuant to voluntary arbitration agreements between persons subject to the jurisdiction of the different contracting States which are or become parties to the 1927 Geneva Convention on the Execution of Foreign Arbitral Awards. I propose to deal with these four types of arbitration separately.
The settlement of disputes by the decision of a person or body other than the appointed judicial authority has been recognised by all developed systems of law. There was arbitration at Roman law and the institution is to be found in the systems of law prevailing on the European Continent. In countries which adopted the common law system such as Great Britain, the United States and our own country, voluntary arbitration was also recognised. At one time the law of arbitration was substantially the same in both England and Ireland but the English began to modernise this branch of their law as long ago as 1889, whereas our law has remained virtually unchanged for almost 100 years.
It is not surprising, therefore, that the law in this country is defective in many respects. One of the main defects is that a person who has gone to arbitration has to pay the arbitrator his fee for delivering an award without knowing beforehand whether or not the award is in his favour and in the certain knowledge that whether it be in his favour or not, he is not entitled to recover any costs from the unsuccessful party and will be out of pocket not merely by the amount of the arbitrator's fee (which may be quite substantial) but also by the amount of any payments that he may have had to make in respect of legal expenses or to secure the attendance of witnesses (which may be even more substantial). Thus, a person may go to arbitration and secure a favourable award on all the points in dispute and yet be far worse off than if he had never gone to arbitration at all. Suppose a motorist has a claim against his insurance company for an indemnity in respect of an accident which will cost the motorist, say, £300. If the company disclaims liability the motorist cannot enforce his claim by taking court proceedings without first submitting to arbitration, for it is invariably provided in these motor insurance policies that an award of an arbitrator is a condition precedent to the liability of the company. The arbitration may involve the payment of two arbitrators and an umpire to determine the dispute. And when the arbitration proceedings are over, the motorist has got to pay the arbitration fees before he can take up the award and in addition, as I have already explained, to pay his own costs as well. The fees and costs may be little short of the amount in dispute and may even be in excess of that amount, so that a motorist who has a dispute with an insurance company is sometimes left with no option, under the law as it stands, but to forgo his claim.
Another defect in the existing law is that the authority of the arbitrator may be revoked by either party unless the arbitration agreement contains a provision that the submission to arbitration is to be made a rule of court. As a result, each of the parties to an arbitration is at the mercy of the other since the authority of the arbitrator may be withdrawn at the whim of either party so that a person who has incurred heavy expense in connection with arbitration proceedings may find that he has thrown his money away.
The Bill remedies these two defects and provides, in Part II, for various matters which arise in voluntary arbitration under arbitration agreements. The provisions in this part of the Bill are designed to give what I may call judicial cover to arbitration agreements, arbitration proceedings and the awards of arbitrators or umpires, so that arbitrations under Part II of the Bill will have the same sort of standing as actions before the High Court. It will be observed that the High Court is being given a very large measure of control over arbitrations. The court can intervene, as it thinks fit, in a number of ways and, in particular, there is reserved to the court the right to decide questions of law. In this, it is proposed to follow the system that obtains in England and the United States. The giving to the courts in England and in the United States of such large supervisory and controlling powers in arbitration cases has been the subject of adverse comment on the Continent where the powers of the courts with respect to arbitrations are generally more restricted and very precisely defined. The system of arbitration proposed in the Bill appears to have worked very well in England and, in framing our proposals, we have naturally taken into account the experience of a country which belongs to the same legal family, by which I mean a country whose legal system is based on the common law.
Apart from this, we must always have regard to the importance of the commercial relations between Ireland and England and between this country and the United States. I have mentioned the continental attitude to the question of arbitration lest it might be supposed that we had decided to follow the British system without giving any proper consideration to other alternatives.
Part III of the Bill deals with statutory arbitrations. These are arbitrations under various statutes where disputes arising under the statutes are settled by particular persons designated by the statutes themselves. The persons appointed under these statutes are, of course, not arbitrators in the true sense, as they are not chosen by the parties, being in fact forced on them by the Legislature. In addition they are generally more "valuers" than "arbitrators", and they settle questions which the particular statute alone has raised. Statutory arbitrations arise under numerous statutes such as the Church Temporalities Acts, the Irish Land Acts, the Railways Acts, the Drainage Acts, the Public Health Acts, Acts which relate to the acquiring of land for public purposes, etc. Deputies will be familiar with cases of the compulsory or voluntary acquisition of land under various statutes such as the Electricity Supply Acts and the Air Navigation and Transport Act, in accordance with which the value of the land is to be decided by the arbitrator constituted under the Acquisition of Land (Assessment of Compensation) Act, 1919. The provisions of the Bill dealing with voluntary arbitrations, with the exception of certain sections, are applied to all these statutory arbitrations. The excepted sections are those which are not pertinent to statutory arbitrations such as the provisions in regard to the death of a party, bankruptcy, biassed arbitrators, the powers of the High Court where an arbitrator has been removed, etc. It is to be noted, however, that, among the sections which do apply to statutory arbitrations, is Section 38 which gives power to the High Court to set aside an award. Not every statutory tribunal may be an arbitral tribunal and it will be always necessary to consider, in relation to each statute, whether the Legislature intended to set up an arbitral tribunal or not. This, of course, will be a matter for the courts.
As will be seen from Section 48 of the Bill, it is proposed that, in applying the provisions of the Bill to statutory arbitrations, the statutory arbitration is to be treated as if it were arbitration under an arbitration agreement. Furthermore, under the section, the provisions of the Bill governing voluntary arbitrations will apply to statutory arbitrations except in so far as these provisions are inconsistent with the particular statute providing for the statutory arbitration or with any rules or procedure authorised thereby.
Part IV of the Bill provides for references by the High Court of matters of account arising in any particular case to an arbitrator who shall be deemed to be an officer of the court. This part of the Act simply re-enacts and brings up to date certain provisions of the Common Law Procedure Act of 1856, but omits the requirement that the reference is to be made on the application of either party. This type of arbitration is known as compulsory arbitration.
Part V of the Act concerns the enforcement of any foreign arbitration award made in pursuance of an agreement, to which the Geneva Protocol of 1923 applies, between persons subject to the jurisdiction of States which are parties to the Geneva Convention of 1927. The award shall be enforceable either by an action in the courts or it may be enforced under Section 41 in the same manner as a court judgment or order. The conditions for the enforcement of foreign awards are set out in Section 56 and the evidence to be produced is dealt with in Section 57. The protocol of 1923 and the convention of 1927 are set out in the First and Second Schedules respectively.
The protocol covers arbitrations arising under contracts relating to commercial matters or to other matters capable of settlement by arbitration, and the convention deals with the execution of awards made in pursuance of arbitration agreements to which the protocol applies. The protocol was defective in that it contained no effective provisions for the execution of a foreign award. This was put right in the convention and the protocol and the convention are to be read together. The main provisions of the convention are repeated in the actual sections of Part V of the Bill. This country is not a party to either the protocol or the convention but accession has been delayed only because of lack of the legislation necessary to ensure their implementation in this country, the settled practice being never to undertake international obligations until after the enactment of such legislation as may be required to give the obligations effect in our domestic law. The Bill before the House will remedy the position and we will be able to enforce effectively foreign arbitral awards in the same way as other countries. It is the intention to accede to these international agreements and this will be done at the same time as Part V of the Bill is being brought into force by Government. Order under Section 1 (3) of the Bill. Under Section 54 the Government may also by Order declare the States which have ratified the convention of 1927 and made the necessary reciprocal provisions as will enable the convention to be operative.
I should like now to refer to some specific provisions of the Bill which I have not touched on.
Section 4 of the Bill provides that the State shall be bound by the proposed legislation, and this is a reasonable and proper provision.
Section 5 excludes arbitrations under agreements relating to the terms and conditions of employment. These are not arbitrations properly so called at all as the arbitrator has no power to make a final enforceable award, nor do the parties to the arbitration intend in any way that he should. The section specifically excludes arbitration under Section 70 of the Industrial Relations Act, 1946, which empowers the Labour Court, with the consent of the parties, to refer an actual or apprehended trade dispute to arbitration. Arbitrations dealing with conditions of employment and trade disputes are really informal matters and it was decided that it should be made quite clear that the Bill was not to apply to them. If the proposed legislation did apply, these arbitrations would have to be carried out in accordance with formal rules, and the law as to the swearing of witnesses, discovery of documents, costs, removal of the arbitrator by the High Court, etc., would apply to them. I think everybody will agree that such arbitrations, if they can be properly so called, should not be treated in this manner. The arbitrators are really mediators who make recommendations and it is up to the parties to accept these recommendations or not to accept them as they so think fit.
Section 8 provides for the repeal of the existing statutory enactments as to arbitration, which are set out in the Third Schedule.
The Bill, except the provisions dealing with foreign arbitration awards, is under Section 1 (2), designed to come into operation on the 1st January next. Part V, as I have pointed out, will be brought into operation by Government Order.
I trust I have given Deputies a clear idea of what the Bill sets out to achieve. Arbitration has many advantages in the settling of disputes, especially where technical knowledge or special skill or training is required. It is regarded as cheaper than law as a general rule and it is less formal and usually more expeditious. The type of arbitration the Bill covers arises where there is a justifiable dispute or a dispute which in the ordinary way would be decided by the courts. The Bill has been placed before the various bodies and persons interested and their suggestions for improvement have, where possible, been incorporated.
The provisions of the Bill are generally on the same lines as the relevant British statutory provisions so that we will have the same law of arbitration here and across the water. The law will also be the same as in the Six Counties. The advantages of this to everybody concerned, and particularly to the business and commercial community, are obvious.
I recommend the Bill to the House. I realise that portions of it are technical and may not be easily understood at a first glance, but I hope to deal with any difficulties or suggestions on the Committee Stage when we can go through the Bill section by section.
