Arbitration (International Commercial) Bill, 1997: Second Stage.

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

The purpose of the Arbitration (International Commercial) Bill, 1997, is to enable the State to adopt the Model Law of the United Nations Commission on International Trade Law, which is generally referred to as UNCITRAL, to provide a framework to enable Ireland to market itself as an attractive venue for international commercial arbitrations. The Model Law has already been enacted into legislation by a substantial number of countries including Australia, Canada, New Zealand and Scotland and by a number of American states. In adopting this law as part of its domestic legislation, Ireland is following a well recognised international trend.

Arbitration is concerned with the resolution of disputes outside the ordinary court system. This type of resolution mechanism is recognised as being particularly suitable for disputes of a commercial nature which have connections with two or more countries. This is because the parties to such disputes will frequently be involved in long-term commercial relationships and will wish to seek solutions to their problems which will not jeopardise those relationships. Properly managed, arbitration can be cheaper and speedier than litigation. It also offers a guarantee of privacy and flexibility of approach in specialised disputes where parties may wish to have the option of appointing as an arbitrator someone who is an expert in the area in question.

It is important to realise that much of arbitration practice is not regulated by statute and that the parties to an arbitration agreement have considerable autonomy in determining how their arbitration should be conducted. The statutory framework for arbitration which now exists in Ireland is provided primarily by the Arbitration Acts of 1954 and 1980, which will continue to be important for arbitrations which are not covered by the scope of this Bill. However, for the type of arbitration dealt with by this Bill, the 1954 legislation would seem to be problematic.

At present, business dealings involving two or more commercial entities based in different geographic locations are commonplace and such entities look to familiar rules to resolve commercial disputes rather than to a regime which is geared to more local concerns. The Bill, by providing for the adoption of the Model Law, will bring those familiar rules into our legal environment and, in this way, should facilitate the conduct of major international arbitration hearings in this country.

I will now deal with the main elements of the Model Law, the text of which is included as a Schedule to the Bill. The Model Law specifies that the term "commercial" should be given a wide interpretation to enable it to cover matters arising from all relationships of a commercial nature, whether contractual or otherwise. Examples of matters which come within the scope of the Model Law include any trade transaction for the supply or exchange of goods or services, various types of financial services, such as investment, financing, banking, and insurance and various forms of industrial or business co-operation.

The Model Law is divided into a series of chapters dealing with a wide variety of issues which arise in the course of the international arbitration process. Chapter I deals mainly with the issue of scope. Chapter II focuses on the form of the arbitration agreement while Chapter III deals with the composition of the arbitral tribunal, for example, the number of arbitrators, how they are to be appointed and how such appointments may be challenged. Chapter IV deals with certain matters pertinent to the jurisdiction of the arbitral tribunal. Chapter V covers the conduct of the arbitral proceedings including the determination of rules of procedure, the place of arbitration and the right of each party to be given a full opportunity to present his or her case.

Chapter VI contains rules relating to the making of an award. It must be in writing and, unless the parties otherwise agree, must state the reasons upon which it is based. Chapter VII specifies the grounds upon which an award may be set aside. These include the fact that the award deals with a matter falling outside the scope of the submission to arbitration or that the award is in conflict with public policy. Chapter VIII deals with the recognition and enforcement of awards and the grounds upon which such recognition and enforcement can be resisted. Those grounds are substantially the same as those which apply to the setting aside of an award.

I now turn to the specific provisions of the Bill. Part I contains standard provisions in relation to short title and references. Because there is no commencement provision in the Bill, the usual practice will apply and the Bill will come into operation immediately it is enacted. The central elements of the Bill are contained in Part II. Section 3 contains standard interpretation provisions. The key provision in the Bill is section 4 which provides that, subject to Part II of the Bill, the Model Law shall apply in the State. The "subject to" provision is included in this section to make it clear that the application of the Model Law in the State, while generally intended to apply in an unrestricted manner to international commercial arbitration proceedings, is made subject to other provisions in Part II of the Bill which, by and large, supplement the Model Law in a variety of ways. Such supplementary provisions extend to such matters as the scope of court intervention in support of arbitral proceedings; powers of the arbitral tribunal in relation to the examination of witnesses; the award of interest by the arbitral tribunal; the allocation of costs in respect of arbitral proceedings and the liability of arbitrators when undertaking arbitration work.

Section 5 contains certain clarificatory provisions. In particular, subsection (2) provides that the documents of UNCITRAL and its working group relating to the preparation of the Model Law may be considered in ascertaining the meaning or effect of any provision of that law.

The High Court is specified as the court for the purposes of Article 6 of the Model Law by virtue of section 6 which also specifies that court as the court for certain other purposes which are provided for in the Model Law. Article 6 provides for a State, when enacting the Model Law, to specify the court competent to perform certain functions specified in that article. Those functions deal with the scope of court intervention in the international commercial arbitration process and include, for example, the power of the court under article 11(3) to appoint a third arbitrator for arbitration proceedings where three arbitrators are required and where, inter alia, the other two arbitrators fail to agree on such an appointment and the power to set aside, in accordance with article 34(2), an arbitral award.

The other relevant purposes are covered by four particular articles. Article 9 allows a party to an arbitration agreement to request interim measures of protection from a court. Article 27 allows for court assistance in taking evidence. Article 35 deals with the recognition and enforcement of arbitral awards and article 36 sets out the grounds on which a court may refuse recognition and enforcement.

The question of court involvement in the arbitration process is, perhaps, the most significant example of the way the Model Law differs from our existing legislative régime. Under the 1954 Act, it is open to an arbitrator to state a consultative case on a question of law arising in the course of a reference and he or she can also be directed to state such a case by the court. The court may also direct that an award — essentially the arbitrator's decision — be stated in the form of a special case for the decision of the court. Under the Model Law, this kind of court intervention will no longer be possible.

The powers of the High Court which are exercisable in support of international commercial arbitration proceedings are set out in section 7 and equate with the powers which are available to the court in relation to any other action or matter before it. The purpose of this section is to set out in clear terms the type of court assistance which is envisaged by articles 9 and 27 of the Model Law. Examples of such assistance would be measures directed towards the conservation of the subject matter of the arbitral proceedings or towards the production of documents.

Subsection (2) of this section seeks to ensure that parties in the context of international commercial arbitration proceedings are not disadvantaged because they are individuals who are ordinarily resident outside the State or corporations or associations incorporated or formed under a law other than the law of the State or whose central management and control are exercised outside the State. The rules of the Superior Courts as they stand at present encompass a fairly wide ranging jurisdiction to order security for costs against foreign plaintiffs.

Section 8 deals with the powers of an arbitral tribunal in relation to the examination of witnesses. The purpose of this section is to enable an arbitral tribunal to direct that a party to an arbitration agreement or a witness who gives evidence in arbitration proceedings, be examined on oath or affrmation. It also enables the tribunal to administer such oaths and affirmations. It is considered that such a provision would be of assistance to an arbitral tribunal and could help it to carry out its functions in a more efficient and effective manner. It is, however, open to the parties to agree that the tribunal should not have this power.

Section 9(1) provides for arbitral proceedings to be consolidated with other arbitral proceedings with the agreement of the parties to those proceedings or for the holding of concurrent hearings on such terms as may be agreed. Section 10 gives the arbitrator wide ranging powers in relation to the granting of interest on an award. The Model Law does not deal with the question of interest and this provision is intended to introduce clarity into our arbitration code. In particular, subsections (2) and (3) make it clear that a tribunal may grant interest on any amount awarded by it in respect of the period up to the date of the award. Under existing law, there is some uncertainty as to the ability of an arbitrator to award interest in these circumstances.

The cost provisions of the arbitration are dealt with in section 11. Under subsections (1), (2) and (3), the parties to an arbitration agreement are free to agree on how the costs of the arbitration, which include the costs as between the parties and the arbitrators' fees and expenses, are to be allocated and on the costs recoverable. Subsections (4), (5) and (6) deal with the situation where there is no agreement of the parties as to costs and allow the arbitral tribunal, subject to the consent of the parties in the case of the costs as between themselves only, to make a determination and to specify certain matters. Subsections (7) to (9) are concerned with the role of the High Court in dealing with applications relating to costs and subsection (10) is a general statement of intent about the right of a tribunal to its fees and expenses, including the fees and expenses of any expert it may appoint to report to it on specific issues it may have to determine. The appointment of such an expert is provided for in Article 26 of the Model Law.

Section 12 makes clear that an arbitrator will not be liable for anything done or omitted in the discharge or purported discharge of his or her functions as arbitrator, unless the act or omission is shown to have been in bad faith. These protections are extended to the arbitrator's employee, agent or adviser and to an expert appointed under Article 26 of the Model Law by subsection (2). Subsections (3) to (5) contain similar provisions in respect of institutions or persons by whom an arbitrator is appointed or nominated. Subsection (6) provides that witnesses who give evidence before an arbitral tribunal shall have the same privileges and immunities as are given to witnesses in proceedings before the High Court, while subsection (7) provides that a barrister, solicitor or person holding equivalent qualifications obtained in another jurisdiction who appears in proceedings before an arbitral tribunal shall have the same privileges and immunities as barristers and solicitors in proceedings before the High Court. The section recognises that, because the scope of the Bill is concerned with international commercial arbitration, there may be circumstances where lawyers from other countries may wish to act for parties in arbitral proceedings conducted in the State.

Patent agents and trademark agents, who appear for parties in arbitral proceedings relating to disputes involving patents and trade marks, have also been granted these privileges and immunities. These agents are a clearly defined professional group for the purpose of the Patent and Trade Marks Acts and practice in the area of intellectual property law. As such, they may appear for parties in intellectual property disputes which require recourse to arbitration, and it is important they enjoy the same level of protection as will be enjoyed by barristers and solicitors in proceedings involving the use of the Model Law.

Section 13 contains an exception to Article 34 (3) of the Model Law which specifies a time limit of three months for an application to be made to set aside an arbitral award. The section provides that this time limit shall not apply to an application to the High Court to have an arbitral award set aside on the grounds that the award is in conflict with the public policy of the State.

The ability to enforce an award is central to the arbitration process. Subsection (1) of section 14 provides for an award made by an arbitral tribunal to be enforceable in the State either by action or, by leave of the High Court, in the same manner as a judgment or order of that court. The section also allows for interim measures of protection made by an arbitral tribunal under Article 17 of the Model Law to be similarly enforced. The recognition and enforcement of international arbitration awards is dealt with in a number of international conventions which have already been given the force of law in the State by the Arbitration Acts of 1954 and 1980. Section 14(4) of this Bill makes it clear that nothing in section 14 affects the recognition and enforcement of awards under these conventions. Only if the arbitration award is not already covered by one of these conventions will the recognition and enforcement provisions of the Model Law come into play. This provision is fully in keeping with the framework envisaged by the Model Law itself.

New legislation often requires transitional provisions to clarify the circumstances in which it will or will not apply, particularly in the initial stages of its operation. The arbitration proceedings to which this Bill applies are set out in section 15. In the interests of fairness to those parties who may have commenced arbitration proceedings before the day on which the Bill comes into operation, subsection (1) of that section makes it clear that Part II shall not apply to such proceedings unless the arbitration is concluded after that day and that the parties so agree. Subsection (2) provides that Part II shall apply to relevant arbitrations commenced on or after the day on which the Bill comes into operation under an arbitration agreement entered into on or after that day. Where the arbitration agreement has been entered into before that day, it is open to the parties to agree that the Bill's provisions shall apply. In addition, subject to the exception provided for in section 14(4) to which I have already referred, section 16 ensures that the Arbitration Acts 1954 and 1980 shall not apply to international commercial arbitrations.

The main emphasis of the Bill is on international commercial arbitration. However, the opportunity is also being taken in section 17 to bring the domestic interest provisions contained in section 34 of the Arbitration Act, 1954, into line with those contained in section 10 in respect of international arbitrations. Section 34 of the 1954 Act provides that a sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest as from the date of the award at the same rate as a judgment debt. The more detailed provisions of subsections (1) to (4) of the new section 34 are in general identical to those of section 10(1) to 10(4) which I described to the House earlier.

The new section 34 deliberately excludes property arbitrations from its scope. This is a very specialised category of arbitration and one where there is already a body of detailed legislative provisions. Accordingly, it is provided under subsection (7) that section 34 shall not apply to an arbitration conducted by a property arbitrator appointed under section 2 of the Property Values (Arbitration and Appeals) Act, 1960.

Section 18 contains an amendment to section 5 of the Arbitration Act, 1980, which obliges a court to stay proceedings commenced by any party to an arbitration agreement, or any person claiming through or under that party, in respect of any matter agreed to be referred to arbitration, unless the court is satisfied that the arbitration agreement is, inter alia, null and void.

I am sorry to interrupt the Minister, but I understand she is required in the other House for a vote. With the agreement of the House, I propose that proceedings be suspended for 15 minutes. Is that agreed? Agreed.

Sitting suspended at 12 noon and resumed and 12.15 p.m.

I apologise to Members for that interruption. I had to attend the Dáil for a vote.

Before I left the Chamber I was speaking about section 18 of the Bill. The purpose of the amendment contained in section 18, which has the support of the Director of Consumer Affairs, is to ensure that the provisions of section 5 of the 1980 Act do not preclude civil proceedings from being brought under the small claims procedure of the District Court, the establishment and operation of which is governed by statutory instrument.

The small claims procedure covers consumer claims and disputes in respect of goods or services purchased, in which the amount of the claim does not exceed £600 and, while there is an application fee of £6, legal representation is usually not required. The purpose of the new provision is to ensure that consumers can, if they wish, utilise the small claims procedure despite the fact that any contract they may have with the service provider contains a term requiring that the dispute be dealt with by arbitration. Such a term would be common in package holiday booking contracts, for example.

The Bill which I have outlined follows representations from the International Financial Services Centre, the Law Society, the Bar Council and a number of specialists in the area of arbitration. Against that background, l would like to draw the attention of Senators to the fact that its introduction coincides with the welcome opening by the Bar Council, on 6 February 1998, of a major international arbitration centre in its new Law Library building in Church Street, Dublin. An international arbitration centre must have good quality facilities and logistical support in order to attract international arbitration business.

The Bar Council's centre provides 10,000 square feet of purpose-built facilities for international arbitration including a total of 20 purpose-built arbitration rooms, translation services, video conferencing and state-of-the-art electronic services. I understand that the council is marketing the centre abroad and that a large potential market in international commercial arbitration has been identified.

I wish the Bar Council well in its efforts to attract such business to this country. I am glad that I am in a position to put the legislation in place which should make that task easier. The Bill is an example of the way in which the Government and business interests can work together to generate work for specialist services as well as ancillary work for the service industries.

The Arbitration (International Commercial) Bill, 1997, will help launch the beginning of Ireland's development as a centre of excellence in the business of international commercial arbitration. This Bill is one of many published by my Department since I assumed office as Minister of State for Justice, Equality and Law Reform. In broad terms, the legislation published to date has addressed a wide range of criminal, civil, commercial and social matters.

Both the Minister for Justice, Equality and Law Reform, Deputy O'Donoghue, and I, look forward to publishing equally wide ranging proposals in future.

I commend the Bill to the House.

The Clerk of the Seanad should write to the Government Whip requesting him to provide a pair at all times for any Minister or Minister of State who is dealing with legislation in the Seanad. It is both unfair to the Minister of State and to this House——

That is not a matter for the Clerk of the Seanad.

I am aware of that but it is not appropriate that the business of this House should be interrupted because there is a vote in the Lower House.

Acting Chairman

There is another way of raising this matter as the Senator is aware. She should talk about the business before the House at present.

Since this incident has just occurred, I wish to put on record my request to the Clerk of the Seanad to request the Government Chief Whip to provide——

Acting Chairman

There is another way of raising this matter.

——a pair for a Minister who has business in the Seanad. It is unfair to the Minister and to the House if a Minister is called away for a vote.

This is a welcome and progressive Bill. It brings Ireland into line with international law on commercial matters. The Bill has been in preparation for a considerable time. The ad hoc advisory group of 1993 which carried out research in this area deserves to be commended on its work. I am pleased the Government has adopted the Model Law which was drafted by the United Nations. The fact that the law was prepared by an international body such as the UN means it is commendable legislation which has received virtually universal international approval.

It is amazing that it took so long for many countries to adopt the Model Law. Initially there was a reluctance to do so but in recent years about 25 countries have adopted it. It is progressive legislation particularly in view of the fact that the world has become smaller from the point of view of commercial activity as a result of modern technology and communications. It is important that there are common international standards, particularly with regard to multinational companies whose operations span not just countries in the EU but also the US, Australia and New Zealand.

I compliment the Government on adopting the Model Law and on introducing a number of improvements to it, particularly with regard to arbitration awards and interest. The original law did not cover those areas. Concerns were raised about the constitutionality of this legislation. Any legislation which comes before the Oireachtas is subject to constitutional examination and there is always the possibility that the constitutionality of a Bill will be tested before the courts. The fact that the 1996 report of the review group on the Constitution did not envisage any constitutional difficulties in adopting the Model Law strengthens the position of this Bill.

The Model Law is the result of representations from a number of——

Acting Chairman

I am sorry to interrupt the Senator but there is another vote in the Lower House. Does the Minister of State need to leave?

I asked the Chief Whip for a pair.

Acting Chairman

The Senator may continue.

The Chair should be chairing the proceedings of this House, not listening to bells.

It is impossible not to hear them.

I am concerned that the Chair is so interested in the workings of the Lower House.

We all might be.

Acting Chairman

We must be fair to the Minister of State and the Senator was quite concerned about the workings of the Lower House a few minutes ago.

And the Chair deemed it inappropriate.

Acting Chairman

The Senator can talk to her party's Whip about this problem. In the meantime she should continue her contribution.

I put the matter on the record so all Whips can be aware of the problem. The business of the House should not be interrupted.

The Bill is the result of representations from the International Financial Services Centre, the Law Society, the Bar Council and the international committee of the Chambers of Commerce in Ireland. The International Financial Services Centre has been remarkably successful and is now one of the most commended and competitive such centres in the world. However, the necessary legal framework was lacking and this legislation will fill that gap and, indeed, strengthen the position of all international companies in this country.

The Bar Council is to be commended on being ahead of the posse in a sense by preparing and establishing a state of the art arbitration centre to deal with the arbitration process. Any process that will avoid the legalities and technicalities entailed in court proceedings is welcome. There is an arbitration process in place to deal with labour disputes and industrial relations but there was no arbitration facility to deal with commercial disputes between companies, regardless of the type of business activity they pursue. The fact that such a facility is now in place strengthens Ireland's position to compete for business on the international market.

The fact that the Government has improved the Model Law also strengthens Ireland's ability to seek business abroad. It is important that there is proper marketing of this facility. The Bar Council might not be considered an expert group on marketing but the Minister for Enterprise, Trade and Employment and the various State and semi-State agencies for which she is responsible are capable of marketing this facility. It should be marketed in conjunction with the other services this country provides and I hope the Minister of State, Deputy Wallace, will bring this issue to the attention of the Minister for Enterprise, Trade and Employment. This offers Ireland an opportunity to compete successfully on the international stage.

England, for example, has not adopted the Model Law in its entirety but has adopted an abridged version. The fact that Ireland has adopted a common international standard and has improved on it strengthens our ability to market for a substantial share of the global business in this area.

One element of the legislation concerns me. The legislation is an ideal mechanism for arbitrating on disputes involving companies, multinationals and subsidiaries of multinationals. However, I would like to be assured that there are protections in cases involving disputes between an individual and a company. How will an individual who has a concern with a company feature in this scenario? There have been many discussions in relation to travel agencies and the disputes that have arisen over the years between customers and travel agents and the International Travel Agents' Association. Take the example of a travel agent which has dealt with a parent travel agency as a subsidiary. Will an individual consumer with a particular complaint have to accept the outcome of arbitration between a subsidiary and a major company as a fait accompli? I appreciate that recourse to the High Court to facilitate particular issues in regard to the process of arbitration is inherent in this legislation. However, I would hope that any decision made by an arbitrator would not militate against an individual who might subsequently choose to take a private court action. I hope the Minister will elaborate on that in her reply as I feel it would be necessary for people to have equal bargaining power; there is a danger that the scales could be heavily weighted in favour of multinationals.

Overall, the Bill is a highly commendable one with which we on this side of the House have no difficulty. It will strengthen Ireland's position and I believe we will succeed in securing a great deal of international business here as a result of it. In the future Ireland will be seen as a centre where arbitration can be invoked in regard to international disputes. It is particularly important that we would be up to speed on international commercial law as Ireland is very dependent on multinational companies, quite a number of which are located here. The Bill is a step in the right direction; it improves the previous legislation of 1954 and 1980 and will help us as we approach the millennium. I congratulate the Minister and Minister of State for introducing this legislation and assure them of its speedy passage.

I welcome this enabling legislation in regard to international trade law. Senator Taylor-Quinn raised a very interesting point in regard to Dublin becoming the epicentre of arbitration law in Europe and possibly the world. I could envisage a scenario where the system initiated by the Bar Council could be used in a major commercial dispute between, for example, an American, New Zealand or east European company and a company from a country which recognises this model system. We are merely following on the heels of the 25 countries which have already adopted this kind of system.

The legal system which exists in Ireland and the UK is based to a large extent on the old common law one and differs to the European legal system which primarily follows on the Napoleonic code. The American legal system seems to be a mixture of both of these systems. In the area of commercial law it is very important that a recognisable, cohesive system be developed. I hope that all EU member states, particularly the UK, will agree to this. It does not make sense for our nearest neighbours to operate a different legal system to us. For many years the Irish legal system was similar to that which operated in the UK, although deviations existed in Scotland and Wales. Scotland has now accepted and adopted the model legal system and that is to be welcomed.

The possibility of Dublin becoming an epicentre for international arbitration disputes under this type of Model Law could have huge financial bonuses for Ireland, particularly in view of the forthcoming referendum. If the referendum is passed, as I hope it will be, Ireland will be viewed as a very stable country in which international arbitration could occur. That would be hugely beneficial to Dublin and other parts of the country. I welcome the Bar Council's initiative in setting up the international system.

In regard to court involvement, it should be noted that the Model Law differs from our existing legislative regime. Some changes will be made to the 1954 Act. It is important to note also that recourse to the courts will only be utilised in exceptional cases and appeals must be made within three months. Those are significant steps and should help to speed matters up. One of the downsides of law, which I regularly encounter as a practitioner, relates to delays. Delays in civil cases in the High and Supreme Courts can run to four, five and six years. The fact that arbitration will be available under the Model Law system will doubtless improve our international commercial trading ability significantly as well as taking a workload away from the courts.

It is also worth noting that interest can be awarded under the new system, similar to the Courts Act, 1981, where the interest rate was set at 8 per cent per annum. That is a welcome provision which is not provided under existing arbitration law.

The Minister of State referred to small disputes. A consumer now has the option to take claims up to £600 to the Small Claims Court. If someone books a holiday, for example, and problems arise with the travel agency, the person can make a speedy claim in the Small Claims Courts rather than going down the lengthy route of court litigation.

The Bill, which has received the significant approval of the Irish Law Society, the Bar Council and others, is to be welcomed. If we can take advantage of its provisions, it has the potential to bring us huge economic benefits. I commend the Bill to the House. All parties seem to be ad idem in their acceptance of it and I feel certain its effects will be very positive.

The Minister of State and her senior colleague, the Minister, Deputy O'Donoghue, have introduced a large amount of legislation which is keeping us very busy. The amount of work they are putting into introducing legislation must be recognised by the House and it is important to praise them. Ministers are often condemned but I have been kept extremely busy as my party's spokesperson on Justice, Equality and Law Reform. While the amount of legislation they have introduced might sometimes cause problems for my schedule, I recognise they are working extremely hard. They have initiated a great deal of legislation in the Seanad, which recognises the importance of this House. They are working full steam ahead to implement their programme, on which they must be complimented.

I also congratulate the Minister of State on the Bill and I note the work done by her predecessor, the former Minister and Deputy, Mervyn Taylor, on this legislation. In regard to the comments made by Senator O'Donovan on the work rate of the Department of Justice, Equality and Law Reform, it is nice to be in a position to give a warm welcome to a Bill from that Department.

This welcome Bill should prove to be an asset, particularly in the workings of the Irish Financial Services Centre. My only concern, which was expressed by Senator Taylor-Quinn, is in regard to the rights of the consumer. While we would like to believe large business and international companies would protect individual consumers, we have had far too many recent examples of where that has not happened. It is our duty to ensure consumers, especially vulnerable individuals, are given every protection necessary to ensure their rights are upheld, particularly in their dealings with large international companies.

I welcome the Minister of State's comments on the small claims procedure, to which other Senators referred. I hope that provision reflects our desire to protect consumers. I warmly welcome the Bill. I have tabled some constructive amendments which I hope will improve the operation of the legislation.

I thank Senators Taylor-Quinn, O'Donovan and O'Meara for their contributions to the debate, particularly for their consideration and support for the Bill. The legislation puts in place an important framework so that the principal actors in relation to its subject matter can proceed to give meaningful effect to its provisions. In this context, those actors are the practitioners in the field of international commercial arbitration. I wish them well in their efforts to attract such arbitration business to this country.

It is, perhaps, not surprising that this legislation is being debated at a time when Ireland is growing as an economy and where increasing emphasis is being placed on the need to sustain an enterprise environment. We are a trade dependent country and in many ways international commercial arbitration business is a form of trade related activity. This Bill, by establishing an arbitration regime which takes account of best modern practice, is playing its part in making Ireland an attractive venue for international commercial arbitration.

Senator O'Donovan recognised the need for a cohesive and focused approach to arbitration in the commercial field. He mentioned the possibility of a financial spin off to Ireland. I hope the Bill will result in significant inflows of capital to the country. I appreciate Senator O'Meara's comments on the merits of the Bill.

Senator Taylor-Quinn raised an important question in regard to dealing with individuals as consumers. I assure her this is outside the scope of the Model Law. If an individual is dealing as a commercial entity the Model Law may be relevant, but only if the parties have agreed to arbitrate their differences. Agreement is, after all, central to the arbitration process.

While on its face the Bill appears somewhat technical in nature, the consensus which exists in the House regarding the merits of the legislation can only serve to give a message to those who might think of arbitrating their disputes in this jurisdiction that Ireland offers the type of supportive framework which can make us a real player in the international arbitration field. It was heartening to note that those who spoke agreed with the basic thrust of the legislation and made very few critical comments. As Senator Taylor-Quinn said, it is progressive legislation which deserves support.

I referred in my opening contribution to our existing arbitration legislation, namely the Arbitration Acts of 1954 and 1980. I do not intend to criticise that legislation which on the whole functions efficiently and provides the necessary supportive framework for the different types of arbitration which already take place on a regular basis in the State. However, the Bill, which incorporates the UNCITRAL Model Law in our arbitration code, addresses the perception among practitioners that existing legislation makes it difficult to attract international commercial arbitration to this country because it is not based on the principle of minimal interference in the arbitration process. When the Bill is enacted it will counter any adverse perceptions which might exist concerning Ireland's suitability as a venue for international commercial arbitrations.

I thank the Senators who contributed to the debate for their clear appreciation of the fact that a modern arbitration law, for which the Bill provides, has the potential to attract valuable arbitration business to this State. However, central to a successful arbitration are the skills which the arbitrator brings to bear upon his or her task. Ireland is fortunate that we can offer a very high level of legal professional services to those who wish to hold their arbitration in this country. We also have a pool of highly experienced international arbitrators who are well placed to take advantage of the supportive framework which this Bill will create. In addition, education in arbitration matters is a growth area and will ensure that many more individuals are able to develop their careers in this field.

It is important to stress that international arbitration services are now offered in most major capital cities, as Senator O'Donovan said, as a result of the desire in the international trading community that disputes be resolved quickly, fairly, cheaply and in accordance with commonly agreed rules. London, Paris, Geneva and Stockholm have capitalised on this growing market. London, a relatively recent entrant to the market, is estimated to generate £100 million annually from this international arbitration business. As Senator O'Donovan said, we wish well people here who wish to proceed in this area.

In 1996 over 1,300 requests for arbitration were received by the main international arbitration bodies. 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, which administers over 400 requests for arbitration each year. In the period 1992-6 over 50 per cent of the parties arbitrating through the international court of arbitration were European. Where the parties agree to abide by ICC rules, which is not uncommon, the ICC court will often be involved in choosing a venue for the arbitration which it would regard as compatible with these rules. Our new legislation has this compatability and it is my hope that Ireland can build upon those factors which, in combination, should provide an attractive environment for international arbitrations. This is the point to which Senator Taylor-Quinn alluded when she mentioned the need for common rules in this area.

The Bill is also, of course, an example of the willingness of Government to respond to the well argued and well founded case for legislative reform. As Senator Taylor-Quinn said this morning, a number of bodies including the International Financial Services Centre, the Law Society, the Chartered Institute of Arbitrators Irish Branch and the Irish Committee for Arbitration of the International Chamber of Commerce have advocated the adoption by Ireland of the UNCITRAL Model Law as our international arbitration code and this Bill is the outcome of this advocacy.

In addition to the legal framework, other factors of an economic nature will also play a part in making Ireland an attractive venue for international commercial arbitrations. We have a stable macro-economic climate capable of delivering high growth rates and we have a highly skilled, flexible and motivated workforce including, as I have indicated already, the expertise available in the area of arbitral practice. We have a first class telecommunications and transport infrastructure and we are located on a hub between the US, Europe and the Middle and Far East. There is also the exceptional value and quality we offer in our travel, accommodation and recreational facilities. Furthermore the English language is, by and large, the language of international commerce and this is something which I hope we can exploit. There is now the added element of this legislation which makes our international arbitration régime compatible with that of our trading partners. All these factors, but most of all the Bill itself — containing as it does a single piece of legislation dealing comprehensively with international commercial arbitration — should prove a significant attraction for those wishing to arbitrate their dispute in a neutral venue which has legislation which operates to a familiar and valued set of rules.

I thank Senators for their very positive remarks towards the legislation and I send my best wishes to the practitioners in this field in their efforts to attract arbitration business to the country.

Question put and agreed to.
Agreed to take Committee Stage now.