4 - 10 April 2001

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The benefits of arbitration

From G. De Marco
Registrar, Malta Arbitration Centre

I have read with interest the article by George Xuereb of the Federation of Building and Civil Engineering Contractors entitled: Arbitration or Adjudication (The Business Times, Issue No. 75).

No one can really quarrel with Mr Xuereb's argument in favour of a speedy and less expensive method for the resolution of disputes but he has made certain assertions in his article that need to be put right and placed in their proper perspective.

He mentioned cases of arbitration proceedings initiated years ago but which are still not concluded. However, it should be pointed out that these cases are being conducted under the old provisions of the Code of Organisation and Civil Procedure which provided for a system of arbitration which is now no longer valid except for those cases which are still in progress. Those provisions were repealed following the entry into force of the Arbitration Act, 1996.

In fact, the 1996 Act was promulgated to do away with all the shortcomings that made the old law cumbersome and unwieldy and, as a result, very little used for the solution of disputes. On the contrary, the new law is a very modern piece of legislation that was modelled to reflect the needs of modern society. While it is very flexible with regard to procedure it lays down strict parameters to ensure that no undue delay or other subterfuge is resorted to by any of the parties in an effort to stall the process. There are time-limits for the appointment of arbitrators, submission of documents and registration of awards.

A respondent, for instance, can only ignore to submit his statement of defence at his own peril because the law lays down that in such a case the arbitration will proceed regardless. The same applies to failure by any of the parties to produce documentary evidence requested by the arbitrator. Even in this instance the arbitrator is empowered to proceed on the evidence before him. There is also a mechanism to compel the attendance of uncooperative witnesses.

As for the advantages in the Adjudication system mentioned in the article, most of these are also incorporated in the Arbitration Act, and which may be even more advantageous to the parties. For example, an arbitrator can be appointed by the parties themselves but if they fail to agree on a mutually accepted person the arbitrator will be appointed by the Chairman of the Malta Arbitration Centre.

With regard to an award, once this is registered at the Malta Arbitration Centre it becomes an executive title, as if it were a judgment of the court, and it is final, that is not subject to appeal, and binding.

Indeed, arbitration can solve a lot of problems currently facing the business and industrial communities in the resolution of disputes. What is needed is a change of mentality and for people to avail themselves of this new system offered by the Arbitration.

The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07
Tel: (356) 382741-3, 382745-6 | Fax: (356) 385075 | e-mail: editorial@networkpublications.com.mt