Question: An arbitrator may only delegate powers when authorised to do so [4.210] Part 5 of the Acts does not specifically prohibit the delegation of an

An arbitrator may only delegate powers when authorised to do so [4.210] Part 5 of the Acts does not specifically prohibit the delegation of an arbitrator's powers. However, the common law has provided that given the primacy of the arbitration agreement to appoint the arbitrator and define the procedures to be followed, an arbitrator can only delegate authority if authorised by the arbitration agreement to do so. The following extract highlights the accepted wisdom that arbitrators cannot delegate the role of arbitrator to another.

CASE NOTE: Neale v Richardson (4.220] Neale o Richardson (1938] 1 AIl ER 753 Facts: The defendant hired the plaintiff to build a home. Their contract provided for payments by instalment, to commence when defendant received a certificate from the architect. It was agreed that should a dispute arise, the architect would act as arbitrator. When a dispute arose, the architect nominated a third party to act as arbitrator, refusing to arbitrate the matter himself or issue a certificate for the final payment. The plaintiff-builder sued the defendant property owner for the outstanding balance for labour and materials. The defendant argued that payment was not required as per the contract, since payments were only due upon receipt of the architect's certificate. Decision: An arbitrator cannot delegate the role of arbitrator to another. Moreover, as arbitrator, it was the architect's duty to decide whether the final certificate should be provided. The failure of the architect to arbitrate the matter or issue the certificate however, did not bar the plaintiff from recovering the balance. With the architect refusing to act as arbitrator, the builder could appoint a new arbitrator or seek a court order. Slesser LJ stated at 757: In the present case, it is clear on the facts that the arbitrator under the [758] contract has refused to arbitrate, and the question of the builder's right to remuneration, in the absence of a final certificate, has failed to be determined. Following Brodie's case, an arbitration resulting in favour of the builder for a sum there determined would have enabled him to sue for his payment as if a final certificate for that amount had been granted and not wrongfully refused. The defendant in her defence relies upon the absence of a final certificate, and takes no point that a new arbitrator might have been appointed by the court under the Arbitration Act 1889, s 5, nor has she herself applied under that section to have an arbitrator appointed in lieu of the architect who has refused to act, nor taken any steps to stay this action on the ground that the parties had agreed to submit their differences to arbitration. In these circumstances, I think that the plaintiff is not precluded from having the whole question determined in court, and that the judge was entitled, though for reasons different from those upon which he relied, to take seisin of the matter, and to refer the claim and counterclaim to the registrar for report. In the result, this appeal must be dismissed with costs.

124 Principles of Dispute Resolution An arbitrator cannot substitute the opinions of others for their own opinion [4.230] An arbitrator cannot substitute the opinions of others for their own, which is a delegation of the arbitrator's authority. However, while this power ensures an arbitrator makes a finding using an independent mind based on the evidence presented, an arbitrator is not prevented from seeking an expert opinion (see s 26 of the Acts), providing he or she has assessed the merits of the evidence and has formed an independent view. The following extract is an example of an arbitrator employing a third party opinion in the conduct of arbitral proceedings.

Read pages [4.210]-[4.230] of the textbook and consider:

* the importance of allowing parties a reasonable opportunity to present their case (and answer the other parties case)

* the importance of arbitrators exercise of power

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!