The UNCITRAL Model Law is applicable

 

Parties with a legal dispute can turn to the public court system to settle the dispute; however, instead of bringing a lawsuit in a public court, they can also opt for arbitration.

 

Arbitration is a form of private dispute settlement in which the parties instruct one or more persons (arbitrators) to render a binding decision on their dispute. The arbitrators may be jurists, but they can also be laypersons. People with specific expertise or experience in a certain branch or industry are often chosen as arbitrator.

 

Parties can include a so-called arbitration clause in their contracts, on the basis of which they can choose, in advance, for the settlement of any disputes related to the contract via arbitration. They may also choose for arbitration after a dispute has arisen between them.

 

In the Dutch Caribbean (Aruba, Bonaire, Curaçao, St. Maarten, St. Eustatius and Saba) the legal basis for arbitration can be found in Section 1020 of the Code of Civil Procedure. Every arbitration that takes place in one of the jurisdictions of the Dutch Caribbean is subject to the English version of the UNCITRAL Model Law on International Commercial Arbitration, as adopted by the United Nations Commission on International Trade Law.

 

Arbitration has certain advantages over court proceedings, for instance, the confidential nature of the proceedings, the particular expertise of arbitrators and the fact that the parties themselves can influence who is appointed as (expert or not) arbiter(s). Arbitration is not necessarily less expensive compared to regular court proceedings, in particular if the award is challenged in the courts.

 

What if, once a case has been resolved through arbitration in the favor of one of the parties, the other party does not keep to the arbitral decision? If one of the parties does not adhere to the arbitral decision, the other party may revert to the public court system to enforce the arbitral decision. This does however not mean that the court will examine the merits of the case again. The procedure is simple and fast; the court will, in brief, only test whether certain procedural rules have been observed and whether the enforcement of the arbitral decision is not contrary to public order or good morals.

 

The authority as mentioned in Section 6 of the Model Law (i.e. the court or other authority for certain functions of arbitration assistance and supervision) is the Court of First Instance in the relevant Dutch Caribbean jurisdiction.

 

A final arbitral award may be set aside by the court if the party making the application furnishes proof that, for instance, the (arbitration) agreement is invalid, no proper notice of the appointment of an arbitrator or of the arbitral proceedings was given, the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration, or the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties (see Section 34 of the Model Law).

 

The absence of a valid arbitration agreement, the arbitral tribunal breached its mandate and failed to provide the grounds for its rulings are the most common grounds on which awards are challenged.

 

The enforcement in the Dutch Caribbean of a foreign arbitral award will be subject to the provisions of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of New York, 1958.

 

Hopefully not for you, but disputes can and do occur regularly. And if so, we may see you in arbitration instead of in court.

 

Karel Frielink

(Attorney/Lawyer, Partner)

 

(6 January 2016)

 

Karel's Legal Blog