Arbitration is perhaps the most commonly pre-meditated alternative dispute resolution mechanism. It is an out of court procedure designed to resolve disputes using one or more neutral third party/parties.
It is similar to the court process in that the neutral third party/parties decide(s) how the matter should be resolved. This is in stark contrast to mediation, where the parties decide their fate.
Arbitration is governed either by the Labour Relations Act or the Employment Act, in labour/employment disputes, in which case, the modalities are slightly varied and only as the ultimate mechanism, or by the Arbitration Act Cap.19 of the Continuous Revised Laws of Grenada (the Act).
Where the parties did not agree that a single arbitrator is to determine their dispute, then the Act will allow three (3) persons to do so. Each party appoints an arbitrator, and both persons selected by them appoint an umpire.
The advantage of agreeing to appoint a single arbitrator is, perhaps, one of cost, since an arbitrator has to be paid by the parties. When three (3) persons must form the arbitration tribunal, then the parties have to pay for the cost of three (3) persons.
However, unless the agreement for the single arbitrator has already identified who the arbitrator must be, for example, the holder of a certain office, the risk of the parties being unable to agree on the single arbitrator is high, especially if their dispute is bitter. No single person would please them, which then brings the expense of them having to apply to the Court, yes, the same Court they were trying to avoid, to decide who that single person should be.
The procedure for the arbitration is as agreed by the parties, and not a procedure imposed by someone, for example, the Rules of Court in court matters. It might be agreed either prior to the dispute arising, or after the dispute arises. Often, in major commercial agreements, the parties incorporate major arbitration rules developed and settled by different regional and or international bodies. Therefore, the extent to which formality in the procedure is desired is based on what the parties agree.
Because much of the process is based on what the parties agree, resolution of the parties’ dispute can be quicker and more cost-effective. Additionally, in proceedings in Grenada, the arbitration award is usually binding on the parties and can be enforced as if a Court had issued a judgment.
Finally, the finality of the award is greater than a judgment of court because it cannot be appealed in the way parties can appeal a judgment although it can be reviewed by a Court on certain limited grounds, usually where the arbitration panel has acted above it lawful powers or where there are clear errors on the face of the award.
Grenada Bar Association
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