Judicial review under the UK and US Arbitration Acts: Is arbitration a better substitute for litigation?

Devrim Deniz Celik
2013 IALS Student Law Review  
It is common ground that parties usually prefer to arbitrate rather than litigate largely because arbitration facilitates resolution of their disagreements in a neutral forum and by persons who have expertise in the relevant areas of law 1 . By selecting arbitration, they also wish to settle the conflicts in an inexpensive and swift manner. With these purposes in mind, parties insert arbitration agreements into their contracts with the expectation that there will be no delays in obtaining an
more » ... in obtaining an award, nor any obligation to fight all the way to the highest appellate level court for a binding award. In this context, a "full scale litigation" 2 , where the judicial review of the arbitration award is made is usually viewed as running counter to what the parties have bargained for. Nonetheless, it is also true to say that in order to ensure that arbitration is not tainted by undue process, parties should also be given the chance of challenging the arbitration award. While this step may be necessary in order to safeguard that arbitration procedure is carried out properly, asking the national courts to vacate or modify the award may be costly and time-consuming. In this respect, it is common ground that the likelihood of a delay in the finalisation of an arbitration award is principally embedded in the laws of the country or state wherein the award is made 3 . Premising on the fact that swiftness, cost and efficiency of arbitration is usually dependent on this matter, it is not surprising to see well-advised parties exercising a great amount of caution in selecting the seat of arbitration, whilst entering into an international commercial contract. Having accepted the importance of the seat of arbitration and the arbitration regime adopted in different jurisdictions, particular inquiry needs to be made so as to find the answer to a number of key questions: Do the respective laws of the countries envisage judicial review when the courts are asked to confirm, vacate or modify the award? If so to what extent? Recognition of judicial review has significance for parties inasmuch as judicial review procedures may not only cause serious delays in obtaining a binding award, but also increase the costs of obtaining the same. Another disadvantage lies under the fact that, with the agreement to arbitrate, the parties seek to bypass litigation, due to the well-grounded belief that in many countries this process takes longer than arbitration. For this very reason, when the national courts retain the right to review the award, parties' chances of circumventing the long litigation procedures become rather low, and the underlying purpose of selecting arbitration may be frustrated considerably. Against this background, this paper will examine and analyse the respective arbitration acts of England and the U.S. with a view to determining which one of the jurisdictions provides a better system for confirmation, vacation and modification of arbitration awards. In order to attain this
doi:10.14296/islr.v1i1.1702 fatcat:ldkpzcxen5brjawlhd3aj5erv4