Q&As

Where parties have agreed to arbitrate disputes arising out of a contract, must the parties use arbitration in order to recover an undisputed, invoiced debt of less than £10,000?

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Published on LexisPSL on 05/05/2017

The following Arbitration Q&A provides comprehensive and up to date legal information covering:

  • Where parties have agreed to arbitrate disputes arising out of a contract, must the parties use arbitration in order to recover an undisputed, invoiced debt of less than £10,000?

Where parties have agreed to arbitrate disputes arising out of a contract, must the parties use arbitration in order to recover an undisputed, invoiced debt of less than £10,000?

In general terms, arbitration is a private, contractual dispute resolution mechanism—it takes place when parties agree to resolve current or future disputes by means of arbitration proceedings rather than through a court process or other means. While there is no statutory definition of arbitration, the Arbitration Act 1996 (AA 1996) states that it is founded on principles that:

  1. arbitration is a process whereby parties obtain a fair resolution of disputes by an impartial tribunal avoiding unnecessary expense and delay

  2. parties are free to agree the process for arbitrating their dispute subject to public interest requirements

  3. arbitration is a private dispute resolution mechanism and courts should not intervene unless provided for in AA 1996 (AA 1996, s 1)

Certain formalities must be complied with if an arbitration clause is to be valid and enforceable under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) and/or domestic legislation (such as AA 1996). For example, the New York Convention and AA 1996 both apply only to arbitral awards made pursuant to an arbitration agreement in writing. For more on the requirements, see: AA 1996—the arbitration agreement—England and Wales—overview.

In this instance, on the basis of

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