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Broad support for Arbitration Bill 2008 – Morgan

19 November, 2008


Sinn Féin Economics Spokesperson Arhtur Morgan TD has given a broad welcome to the Arbitration Bill 2008. Deputy Morgan welcomed the Government's commitment to developing the state as a global venue for international arbitration but said breaches of Ireland's neutrality run contrary to this.

Speaking in the Dáil today Deputy Morgan said, "While I support the Government's commitment in developing the state as a global venue for international arbitration through reform of our arbitration law, I do feel that there are other important elements for attracting international arbitration to this state which have been undermined by the Government and attention should be drawn to this.

"Colm Ó hOisín, chairman of the Bar Council Arbitration and Alternative Dispute Resolution Committee identified, in an article in the Irish Times, our neutrality as an advantage for the state as a third country in international arbitration disputes.

"The Taoiseach himself had emphasised our neutrality when addressing the International Council for Commercial Arbitration 2008 conference back at the beginning June.

"The promotion of our neutrality is clearly an attractive feature for businesses from non-aligned countries such as India. But the Government's support for US military planes landing in Shannon Airport and its support for enhanced defence co-operation in Europe undermines this assertion.

"If we are to make a convincing case and to use our neutrality to attract international dispute arbitration to Dublin, we must have an unambiguous position. Sinn Féin will continue to call for a halt of the use of Shannon Airport by the US military for its war efforts in Afghanistan and Iraq and we shall oppose any developments of a common EU military policy through European Treaties.

"The development of international dispute resolution illustrates that our neutrality is something that can benefit us both politically and economically. It is the responsibility of the Government to safeguard our neutrality and not to undermine it.

"While I broadly welcome many of the proposals in the Bill, I believe that the Government must also re-engage with our policy of neutrality if we are to be recognised as a genuine neutral third country venue for international dispute resolution." ENDS

Full text of Deputy Morgan's speech follows:

Arbitration Speech

I would like to take this opportunity to express my broad support for the Arbitration Bill. The Bill is a welcome development to ensure that arbitration continues to grow as an alternative to Court proceedings in commercial disputes and to facilitate Dublin in becoming an international centre for dispute resolution.

There are a number of proposals in the Bill that will improve our existing arbitration law.

The UNCITRAL Model Law on International Commercial Arbitration, which until now had only applied to international arbitration, shall be extended to domestic arbitration. The process of streamlining Irish law with international standards is a welcome development and we shall be supporting it.

The provisions in Section 32 of the Bill which provide for additional grounds for the High Court to set aside arbitral awards in domestic arbitrations are welcome. I believe that the new grounds to set aside an arbitral award where there is a fundamental error of law or in case of unfair procedure is a necessary extension to ensure that parties in commercial arbitration have proper recourse to the courts.

Some of the criticisms of our arbitration process such as its costly and cumbersome process have been addressed by the Bill.

Section 10 which provides that the High Court will not make any order for security for costs and an order of discovery, unless agreed by the parties, should have the effect of avoiding unnecessary costs.

A section in the Bill which I believe deserves careful consideration is consumer arbitration. While arbitration is well established in the travel and motor trades through bodies such as the Society for Irish Motors and the Tour Operators Holiday Package Scheme, in other areas alternative dispute resolution is in its infancy. It is widely acknowledged that there can be great inequality of bargaining power in consumer contracts. Dispute resolution is often chosen by the company whereas the consumer is likely to have a limited knowledge of the process of alternative resolution.

For these reasons consumers need added protection to ensure that consumer arbitration procedures are fair, effective and expeditious.

I support the proposal that provides for the mechanism whereby arbitrators shall state a case to a court on a question of law and for an arbitral award to be remitted if new evidence emerges.

I also support section 30 (2) which deems an arbitration term as an unfair term under the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995 and 2000 if it has not been individually negotiated by the parties.

However, I am concerned with the limitation of its application to claims under the Small Claims Court threshold of €2000.

I believe that all arbitration terms in consumer contracts should be deemed unfair if they have not been individually negotiated by the parties and that a consumer should only be bound by an arbitration clause after a dispute has arisen.

It should be possible for consumers in smaller transactions to choose arbitration in the aftermath of a dispute. This would ensure that consumers can make an informed decision to proceed through the courts or in the alternative to pursue any claim through proper dispute resolution bodies. I would therefore be recommending an examination of the wording of section 30 (1).

With over 700 members of the Irish Branch of the Chartered Institute of Arbitrators, it is clear that businesses are choosing arbitration as an alternative to court proceedings. It is necessary that arbitration law in Ireland provides a clear, decisive and effective process. I believe that the provisions in the Bill by and large succeed in doing this.

There will also be considerable economic and tourism benefits if Dublin becomes a major centre of dispute resolution.

While I support the Government's commitment in developing the state as a global venue for international arbitration through reform of our arbitration law, I do feel that there are other important elements for attracting international arbitration to this state which have been undermined by the Government and attention should be drawn to this.

Colm Ó hOisín, chairman of the Bar Council Arbitration and Alternative Dispute Resolution Committee identified, in an article in the Irish Times, our neutrality as an advantage for the state as a third country in international arbitration disputes.

The Taoiseach himself had emphasised our neutrality when addressing the International Council for Commercial Arbitration 2008 conference back at the beginning June.

The promotion of our neutrality is clearly an attractive feature for businesses from non-aligned countries such as India. But the Government's support for US military planes landing in Shannon Airport and its support for enhanced defence co-operation in Europe undermines this assertion.

If we are to make a convincing case and to use our neutrality to attract international dispute arbitration to Dublin, we must have an unambiguous position. Sinn Féin will continue to call for a halt of the use of Shannon Airport by the US military for its war efforts in Afghanistan and Iraq and we shall oppose any developments of a common EU military policy through European Treaties.

The development of international dispute resolution illustrates that our neutrality is something that can benefit us both politically and economically. It is the responsibility of the Government to safeguard our neutrality and not to undermine it.

While I broadly welcome many of the proposals in the Bill, I believe that the Government must also re-engage with our policy of neutrality if we are to be recognised as a genuine neutral third country venue for international dispute resolution.

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