Party autonomy rules in commercial arbitration. This means that parties can agree where they arbitrate, and which rules and laws govern the arbitration. If the seat of arbitration is in the UK, there are different procedural laws applicable depending on whether the parties chose England or Scotland.

A recent Scottish decision (Tor Corporate v Sinopec, 29 May 2007) helps illustrate the differences between arbitration law in Scotland, and arbitration in England.

In Scotland, the UNCITRAL Model Law applies to international commercial arbitrations. These rules can also be adopted for domestic and non-commercial arbitrations. The UNCITRAL Model Law requires any application for setting aside to be made within 3 months of the arbiter's decision being received.

The detail of the Tor Corporate decision relates mainly to internal procedures specific to the Court of Session (the equivalent court in England is the High Court). It is, however, interesting to note that the Court eventually held the application before it to be time-barred on the basis it was made a few days after expiry of the 3 month period set out in the Model Law. Neither party sought to argue that any other time period was applicable.

The position in England, where the Arbitration Act 1996 applies, is a little different. The Arbitration Act was inspired by the UNCITRAL Model Law, but its provisions by no means mirror the Model Law. There are many points of difference between the two. One area is the time which a party has to challenge or seek to appeal an award. Only a 28 day period is allowed (which runs from the date of the award), in contrast with the 3 month period under the Model Law. Further, the grounds on which an award may be set aside are different under the Model Law and the Arbitration Act.

The differences between arbitration laws in England on the one hand, and Scotland on the other, are often subtle. Yet these subtle differences can often produce widely-differing results. Having said this, there will usually be no intrinsic advantage or disadvantage in parties choosing to arbitrate under one law as opposed to the other. What is important is that the parties understand the differences in laws in each jurisdiction before choosing where to arbitrate.

Reference: Tor Corporate AS v Sinopec Group Star Petroleum Corp Ltd [2007] CSOH 86.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 08/06/2007.