Arbitration
Arbitration is a formal dispute resolution process whereby two or more parties agree to submit disputes between them to an independent person called an arbitrator, for a binding decision. Where the Arbitration is seated in New Zealand, the process is governed by the Arbitration Act 1996 and the Arbitration Amendment Act 2007. An arbitrator’s decision, called an award, is binding on the parties and is enforceable as a judgment of the Court.
Process Overview
Arbitration provides a flexible and efficient means of resolving disputes quickly, cost effectively, privately and confidentially without necessarily adhering to the formalised, technical procedures of litigation. Whilst arbitration is closely related to litigation, there are several key differences which make it an important and attractive alternative to state litigation. In particular, arbitration gives the parties the power to choose their own decision maker, place and time of a hearing, and as far as they can agree, to control the arbitration procedures which may be varied to suit the nature and complexity of the dispute.
NZIAC operates at the cutting edge of modern and commercial dispute resolution in the Asia-Pacific region, providing fully administered arbitration services governed by its comprehensive suite of arbitration rules, including expedited procedures and access to fixed fee and fee capped services. NZIAC’s services provide parties with the highest quality arbitration services at a realistic and known price.
Starting the process
The parties need to agree to engage in arbitration. They can do this before or after the dispute has arisen.
Appointment of an arbitral tribunal
An arbitral tribunal will typically be appointed within 3 Working Days, or sooner for urgent cases.
Directions conference
The directions conference is intended to promote the efficient conduct of the process.
Submission of case
Each party will submit a written statement outlining the facts, evidence, and legal arguments.
Hearing
There may be a formal hearing, although it is also common for arbitrations to be conducted on the papers.
Additional information, site visits and inspections
The arbitral tribunal may request further information from any party to aid their decision-making.
Award
After the arbitral tribunal has received all the information it needs, the tribunal will make its award which will be binding on the parties.
Cost of arbitration
Our focus is on delivering cost-proportionate process solutions. Find out more about the cost of arbitration.
Step 1. Starting the process
To begin, both parties must agree to use arbitration. They can do this by including the New Zealand International Arbitration Centre (NZIAC) model arbitration clause in their contract. This allows any future disagreements or disputes to be settled using arbitration.
Even if they didn’t include the clause in their contract, they can still use arbitration by signing an arbitration agreement after a dispute arises.Â
If the parties agreed to arbitration before the dispute occurred, the person wanting to initiate the process (called the claimant) needs to send a Notice of Arbitration to inform the other side (the respondent) that they want the dispute resolved by arbitration.Â
To start the process, the claimant applies to NZDRC. A Registrar will then be assigned to the case to assist the parties, their advisors, and the arbitral tribunal throughout the arbitration process.Â
Step 2. Appointment of an Arbitral Tribunal
The New Zealand International Arbitration Centre (NZIAC) is responsible for appointing the arbitral tribunal unless the parties have already agreed on who they want to appoint.
Usually, the arbitral tribunal consists of one arbitrator, but in some cases, a three-person tribunal may be appointed. Any appointment is made once NZIAC receives a completed application and payment of security for the arbitral tribunal’s fees and expenses.
If the parties have someone specific in mind, that person must meet certain criteria, and NZIAC must approve them as being suitable, independent and impartial.
When selecting an arbitrator, NZIAC considers various factors such as any agreements between the parties, the nature and value of the dispute, and the availability of the person to effectively and efficiently handle the case. The appointed arbitrator must be impartial and independent of the parties. Any appointment by NZIAC is final and confirmed with a Notice of Appointment issued by the Registrar.
Note: The terms arbitrator and arbitral tribunal are used interchangeably.
Step 3. Directions conference
Usually, the arbitrator will organise a preliminary conference. The purpose of this meeting is to talk about timetabling and procedural details, such as what information the parties plan to provide and by when. This proactive approach to managing the case helps ensure everyone is clear about what will happen and when, and it encourages the process to run smoothly and efficiently.Â
Step 4. Submission of case
Following the preliminary conference, each party will need to prepare and send their case submission to the arbitrator and all other parties involved. This submission should contain all relevant supporting documents and evidence.
The case submission must clearly explain the nature and basis of the dispute, the factual and legal issues at hand, each party’s position on these matters, and the outcomes they are seeking. If there is a contract involved, a copy or relevant sections of it should be included. Additionally, the submission should contain any statements, reports, documents, or other evidence that the party relies on to support their arguments.
Typically, the process for exchange will consist of:
- The claimant(s) serving their claim;
- The respondent(s) serving their defence; and
- The claimant(s) serving any reply.
Step 5. Hearing
Once the parties have exchanged all relevant documents, and unless they’ve agreed to proceed based solely on those documents (without a hearing), a formal hearing will be scheduled.
In most cases, the parties may make a brief opening statement before any witnesses are cross-examined. Witness evidence is usually taken as read, meaning there is no need for the witness to orally present their evidence-in-chief. Instead, the hearing will focus on cross-examining the witness based on their written witness statement. The arbitral tribunal may also ask questions of any witnesses.
Closing submissions may be provided at the end of the hearing, usually in writing after the hearing date.
Step 6. Additional information, site visits and inspections
At any point before making an award (the name for a decision by an arbitrator), an arbitrator may ask for more information if they feel the initial submissions from the parties are not sufficiently detailed or clear enough for them to make an informed and fair decision.Â
After receiving this additional information, any other party involved in the dispute has the right to submit a response. This response should be filed with the arbitrator and every other party.Â
Sometimes, as part of the hearing process, a site visit or inspection might be needed, especially if the disagreement involves physical assets, locations, or conditions that need to be seen firsthand for an accurate understanding and assessment. This allows the arbitrator to observe the subject matter of the dispute in its actual context, and enable a more informed and accurate decision.Â
Step 7. Award
The arbitral tribunal is responsible for issuing an award that decides each of the disputed matters referred to it.
This comes after carefully reviewing submissions, documents, evidence provided by the parties, any information from the hearing, and any extra information requested.Â
The award is provided in writing and includes an explanation of the reasons behind it, unless the parties agree otherwise. An award is legally binding and enforceable for both parties.Â
FAQ
Find quick insights and helpful information on a variety of topics related to arbitration
What is the most appropriate dispute resolution process for me?
Identifying the most suitable dispute resolution process depends mainly on the nature of the dispute and the willingness of the parties to resolve the dispute. If you give us a brief outline of the dispute and the circumstances, we can help you identify the best options.
Will the arbitrator make a fair decision for the parties?
The mediator will facilitate the process to encourage agreement between the parties, but will not make any decision for the parties.
Do we need to travel every time we have an arbitration hearing?
Not necessarily. Many preparatory hearings can be conducted through conference calls or online meetings. The principal hearing can be conducted in person or online or by a combination of the two.
Get in touch
Fill in the form to contact our team to see how we can help or get in touch with us with either of the following:
Office Hours: Monday to Friday 8:30AM to 5:00PM (excl. public holidays)