Arbitration and mediation are both alternative dispute resolution procedures. Mediation is a conciliative approach where a mediator works with the parties to explore the possibilities of reaching an agreement. Arbitration is an adjudicative process whereby arbitrators issue an award which is binding on the parties. More information about mediation can be found on Mediation Scotland’s website.

Parties often seek to resolve their disputes through arbitration because of the potential advantages over the courts. Advantages include:

• Arbitration can be cheaper and more flexible, more commercial and less formal than court;
• Arbitration is often faster than litigation in court, and a time limit can be placed on the length of the process;
• Unlike court rulings, arbitration proceedings and arbitral awards are confidential;
• The ability to select an arbitrator with an appropriate degree of practical experience;
• Unlike in court, there are very limited avenues for appeal of an arbitral award, which limits the duration of the dispute and any associated liability;
• Due to the provisions of the New York Convention 1958, arbitral awards are generally easier to enforce in other nations than court judgments.

The costs involved in arbitration vary. The arbitrator will set a fee, often an hourly rate. Costs will vary depending on the fee of the professional whether a hearing is required, venues and legal representation.

There is a general presumption that the losing party will have to bear some or all of the costs of the winning party. Some arbitration schemes make it very clear who is to be liable for costs. Some, especially statutory arbitrations, go as far as to set out what those costs will be. Arbitral awards are, however, very flexible and this extends to the possibilities for costs awards diverging from this presumption.

Arbitration has a long history in Scotland, spanning some seven hundred years, and yet in the Arbitration (Scotland) Act 2010 (“the Scottish Act”) Scotland has one of the most modern systems of arbitration in the world.

The Scottish Act is similar to the 1996 Act in use in England and Wales, and will feel instantly familiar to international arbitration practitioners. Indeed, the Scottish Courts have held that English case law applying to the Act in force there since 1996 can be used to interpret the Scottish Act. This provides predictability and certainty to the Scottish regime. However, there are some key differences:

Arbitration in Scotland is a confidential process, and unlike the position in most jurisdictions, the duty to treat proceedings as confidential is backed up by legislation. The obligation to treat all matters relating to the arbitration confidentially is enshrined in the Scottish Act, and is has been strongly backed by the Scottish courts.

If a challenge is made to the court in respect of arbitration, the courts will keep the parties’ names, and details of the case anonymous, so as to preserve confidentiality. It is possible to persuade the Court that the case should not be reported at all.

There are a number of reasons why parties may be attracted to Scotland. Advantages include the new state-of-the-art law, the cost-effective nature of arbitration in Scotland due to the flexibility of the law and restricted appeal processes, being an English-speaking jurisdiction and separate from England in terms of arbitration (this neutrality may be attractive to foreign parties in dispute with English firms), Scotland being a very attractive venue in which to arbitrate, with good transport links and accommodation and our mature legal system to back up arbitration, with judges who appreciate the need to support the arbitral process, without unwanted interference.

Generally, yes, they are. In fact, arbitral awards can be easier to enforce than court awards. There are a lot of nuisances to the law of the enforcement of arbitral awards. As such, you should take legal advice on this point if this is something which concerns you.

Yes (except for statutory arbitration).

In all cases save for statutory arbitrations, it is essential that the parties agree to submit their dispute to arbitration. When drafting a contract, it is best practice to include an arbitration clause covering disputes arising out of that contract. This ensures that the parties have clarity as to what dispute resolution procedure is to apply and that this is binding on the parties.

You can nevertheless still agree to resolve a dispute through arbitration without having a prior agreement to arbitrate.

The Scottish Arbitration Centre can assist by:

• Offering information to parties about arbitration processes in Scotland (including standard arbitration clauses).
• Offering room booking services for hearings.
• Holding networking and training events for practitioners.
• Finding and appointing arbitrators suitable for a given dispute.

The Scottish Arbitration Centre cannot assist by offering legal advice.

Yes. Sample clauses can be found here.

You can find more details on our membership page

Yes. The Scottish Arbitration Centre does have an arbitration appointment service. More details can be found on our arbitral appointments page.

You can find more details on our arbitral appointments page.

The Scottish Arbitration Centre cannot provide legal advice. You should seek legally qualified advice to ascertain what the best option for your dispute is. Some further advice about resolving your dispute may be obtained from the Citizens Advice Bureau. Its website can be found here.

ICCA 2022 Edinburgh has its dedicated website which can be found here. found here.