The speed of arbitration gives us all a sporting chance
For those involved in building disputes it is easy to forget that arbitration is far more widely used than in just construction, shipping and rent reviews. A look further afield shows just how powerful and flexible a tool arbitration can be. An article about the proposed arbitration arrangements for the 2008 Olympics that recently appeared in Arbitration, the journal of the Chartered Institute of Arbitrators, amply illustrates this.
Arbitration is frequently used in sport to deal with a wide range of disputes. It provides speedy, in some cases very speedy, binding decisions between parties of various nationalities in farflung venues. The necessary contractual basis for arbitration is usually in the entry forms that all participants have to sign.
The Court of Arbitration for Sports, which handles Olympic disputes, is based in Switzerland, and holds arbitrations under Swiss law. Its ad hoc division is used to working exceptionally fast, its rules requiring it to give a decision within 24 hours of an application being made.
Given that disputes are not simply about who crossed the finishing line first, but may involve delving into evidence about drugs or an athlete's eligibility, this time limit is a very tall order.
The range of disputes that the tribunal may be called on to deal with is vast, stretching from arguments with sponsors to athletes complaining about not being selected for their team.
In addition to speed, a key advantage to sport of using arbitration is finality. The benefits of preventing parties going off to court, and the consequential delays and ongoing uncertainties that would create, are clear. It seems that, generally, national courts have supported the sports arbitration system by declining to intervene. The article in Arbitration cites an attempt at the Sydney Olympics to appeal an arbitration award. The dispute was between two Australian athletes, and the appeal was made to an Australian court. The court decided it had no jurisdiction to intervene in what was a Swiss arbitration.
An aspect of considerable interest to those familiar with construction arbitration, and its often tricky rules about joining in other parties is the extent to which the tribunal in sports arbitration can invite others to take part. It is easy to see that in a competitive situation a decision may affect others. In a hearing to decide whether an Olympic ice hockey player was to be banned and his team disqualified, the tribunal simply asked the six other teams potentially affected by the decision to participate in the arbitration.
So how does sports arbitration compare with construction's speedy dispute resolution system, adjudication? The immediately apparent difference is the finality of arbitration. But the Technology and Construction Court (TCC) has observed that in many instances adjudication decisions are effectively final, the parties being reluctant to pursue their dispute further. If what construction wants is fast, final decisions, the sports model shows that arbitration can deliver.
One disadvantage of adjudication is the time and energy often expended on enforcement, mainly arising from arguments about jurisdiction.
For a supposedly fast and straightforward dispute resolution system, adjudication has some very convoluted problems in this area. Those could largely be avoided by opting for arbitration instead.
Another disadvantage of adjudication is that costs are generally not recoverable; again not usually a problem with arbitration.
In litigation, parties are able to join in other parties. Some players in the construction industry opt for arbitration as a way of avoiding this. But the Olympic example shows that this is not necessarily how arbitration has to work.
Give the tribunal sufficient power and it can ask whoever it wants what they have to say about a dispute.
So although it deals with very different issues, sports arbitration shows that arbitration can be tailored to provide many of the benefits of adjudication, while avoiding some of the pitfalls.
Some construction lawyers have become involved in sports arbitration because of their familiarity with the process. Apart from opening up the possibility of trips to exciting events in exotic locations, this may also benefit construction by feeding back into it the knowledge and experience of some very fast and flexible dispute resolution techniques.