Arbitration Bill 2008: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

I thank all the Deputies who contributed to the debate and for the observations they made. As I said earlier, this Bill is somewhat technical in nature. Members on all sides see the economic potential for this Bill and that is correct. As Deputies will be aware, arbitration is concerned with the resolution of disputes outside the ordinary court system. The use of alternative dispute resolution, ADR, has expanded considerably in recent years. Arbitration is particularly popular in the commercial sphere where parties may be involved in long-term business relationships. Solutions which tackle a dispute at the pre-court stage may be helpful in terms of maintaining such relationships. Properly managed arbitration can be much cheaper and quicker than other processes. It reflects an approach that gives flexibility and can be tailored to specialised disputes that sometimes arise in the commercial area. Finally, arbitration is backed up by a guarantee of enforceability in a substantial number of countries. As such, it is a truly global phenomenon.

Notwithstanding its technical nature, the Bill is nonetheless an important element in building the foundation which hopefully will assist in promoting Ireland, as acknowledged on all sides, as an arbitration centre of note. However, it will largely be for those who are practitioners in the field of arbitration to capitalise on the Bill's provisions and develop arbitration business in this jurisdiction. In this regard, we are fortunate in already having very considerable legal and professional expertise available to us in the area of arbitration. Indeed, excellent educational opportunities will flow from this which will allow individuals to build up their skills as arbitration becomes a growth area, particularly in Ireland.

Ireland is a trade dependent country and international commercial arbitration is very much a trade related activity. It is noteworthy that many commercial arbitrations in Europe are conducted under the auspices of the International Court of Arbitration of the International Chamber of Commerce, ICC. In recent years, the ICC has received approximately 600 requests per year for arbitration. In 2007, ICC arbitration took place in more than 40 countries and involved 66 different nationalities. In more than 50% of the cases, the amount in dispute exceeded US$1 million. The importance of these statistics is that where parties in dispute agree to abide by the ICC rules, the International Court of Arbitration is often involved in choosing a venue for arbitration that is regarded as compatible with its rules. Ireland already has a large measure of compatibility by virtue of the provisions of the 1998 Act. This new Bill will enhance that compatibility and, by providing a single arbitration regime, facilitate practitioners in building the type of expertise that will help promote Ireland.

As I said at the outset, the legislation was published on 9 June and is largely an exercise in consolidation and modernisation. In general terms, it deals in a comprehensive manner with the model laws and the key issues that arise in the arbitration proceedings. Where necessary, the law has been supplemented by specific provisions in the Bill aimed at ensuring that our arbitration law is both user-friendly and comprehensive.

A number of comments were made and I will touch on them. Deputy D'Arcy sought clarification of the implications of section 11. That section deals with particular types of applications which are made to the court, for example, an application to the High Court to set aside an arbitral award or one for the same court to enforce a foreign award. As matters stand, all determinations by the High Court could be the subject of appeals to the Supreme Court. The effect of section 11 is to ensure that the determination at High Court level is final and no longer capable of being appealed. This will reduce the potential for costly, long-drawn out litigation and is fully supportive of the arbitral process in keeping with good international practice.

Deputy Rabbitte made a number of suggestions for possible amendments which I am sure we will have an opportunity to consider on Committee Stage. He referred in particular to the fact that certain provisions had been drawn directly from the 1954 Act and that some revisiting of these provisions might be in order. It is, perhaps, not surprising that this should be the case, given that the Bill is largely a consolidating measure which inevitably reflects existing legislative provisions. However, I can empathise with the call for an examination of some of the provisions now in the Bill as it stands. Perhaps there will be an opportunity to make some amendments on Committee Stage. In any event, I will bring forward amendments in this regard.

I have some doubt about whether this will be the case in relation to the exclusion of arbitrations that arise under the Industrial Relations Acts, as the Deputy mentioned. Industrial relations in Ireland involves very specific and efficient machinery which has worked very well over the years and it would be imprudent to overthrow it. However, I am prepared to examine provisions such as those contained in Part 3 of the Bill, which refer to arbitration under a court order. At the very least, some modernisation of language may be called for, given the fact that this language emanated in 1954. Without making any final commitment, I am open to the idea that this part could be deleted altogether.

I am also aware that some confusion has surrounded the aim of the provision that deals with small claims. The policy aim was to ensure that consumers would benefit from the Small Claims Court, which operates under the aegis of the District Court, even if the terms of an agreement into which they had entered required them to seek arbitration. However, it is not the intention to preclude consumers from using the various arbitration schemes that are available and which are tailored for various sectors, should they so wish. I want to ensure that consumer choice is available in this area and I accept that the provision in the Bill, as published, is not wholly free of ambiguity. Therefore, I will look on Committee Stage at this aspect of the Small Claims Court and the option somebody might have, under the €2,000 limit of the District Court's small claims issue, regarding arbitration.

Reference was also made to the fact that, under the model law, it is possible to make an application under Article 34 to have an arbitral award set aside and that, on virtually the same grounds under Article 36, it is possible to make an application to have recognition of enforcement refused. This apparent duality springs from the fact that the model law treats all awards rendered in international commercial arbitration in a uniform manner, irrespective of where they are made. There is a practical difference, however, in that a set aside application may only be made to a court in the state where the award was rendered, whereas an application for enforcement may be made to a court in any state. Nonetheless, I believe it is possible to streamline the procedure further for awards made in this jurisdiction in so far as the recognition and enforcement provisions are concerned. This is also an area in which I will possibly table an amendment in due course.

Again, I thank the Deputies for their remarks about this fairly complex and technical Bill. However, I believe we need to consolidate our legislation, particularly in the context of selling Ireland as a centre of excellence for arbitration.

Question put and agreed to.