Arbitration has become an increasingly significant forum for resolving disputes internationally. As a form of alternative dispute resolution, arbitration offers a flexible and efficient alternative to traditional litigation, by providing parties to a dispute with the opportunity to resolve conflicts outside of the formal court framework.
Over the past week, arbitration has been highlighted in the media through the recent controversy involving Disney World, in which legal proceedings were commenced against the entertainment giant for a wrongful death caused by an allergic reaction suffered by a patron at one of its restaurants. This article will aim to discuss the legislative framework relating to arbitration in T&T, the advantages of arbitration, and a brief commentary on the Disney World controversy.
T&T has been involved in and facilitated commercial arbitration for a considerable period of time, by being a seat or venue for arbitration, or a jurisdiction that can recognise and enforce an arbitral award obtained in certain foreign jurisdictions.
This has been facilitated, in the past, by the Arbitration Act, Chap 5:01 (which has been replaced by the recently proclaimed Arbitration Act, Act No 11 of 2023, which incorporates the United Nations Commission on International Trade Law’s Model Law provisions) (Arbitration Act), and the Arbitration (Foreign Arbitral Awards) Act, Chap. 5:30, which incorporated the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
The Arbitration Act defines arbitration as a process of settling a dispute between parties before an arbitral tribunal, whether or not that process is administered by a permanent arbitral institution. The decision of the arbitral tribunal, called an award, is final and binding on the parties, and has the same effect as a judgment of the High Court.
Like its predecessor, the Arbitration Act provides the framework and mechanisms by which arbitration proceedings can be conducted within T&T, including the rules relating to its processes and procedures, as well as the mechanisms by which a foreign arbitral award can be recognised and enforced in T&T.
How can a dispute proceed to arbitration? The parties to a dispute can either choose to submit to arbitration, or a clause in the commercial contract entered into between the parties which gave rise to the dispute, can specifically include an agreement to submit certain or all disputes that may arise, to arbitration. This clause, referred to as an arbitration agreement, can include other contractual terms which relate to the effect that the award may have, whether proceeding to arbitration is mandatory so as to oust a superior court from hearing a dispute under the contract, a choice-of-law clause which would dictate what jurisdiction’s laws should govern the dispute (which is particularly relevant where the counterparties to the contract are from different jurisdictions), or even where the seat of the arbitration should be located.
How does this relate to Disney World? A relative of the deceased patron claimed damages for Disney World’s failure to take sufficient care for an allergy that the Disney restaurant staff was allegedly repeatedly informed about.
Disney World has argued that the claim should not and cannot be resolved through court proceedings but rather, based on the terms of use of one of its services that the relative previously agreed to, the dispute should be resolved by arbitration.
Why would Disney World want the dispute to be resolved by arbitration rather than having it proceed through the court process? There are a number of advantages to resolving a dispute using arbitration. These include:
(a) Appointment of arbitrators: The parties can choose the arbitrators (versus the court process where judges are docketed through a process) who may be specialists in a particular area in dispute. This can ensure that decisions are made by experts in the field in contention.
The Arbitration Act provides clear guidelines for the appointment of arbitrators, including provisions for appointing a sole arbitrator or a tribunal. It also includes mechanisms for resolving disputes regarding the selection of arbitrators, ensuring that the process remains efficient and impartial;
(b) Enforceability and international arbitral awards: Awards are enforceable as if they were judgments of a superior court while a jurisdiction that has aligned with the UNCITRAL Model Law, facilitate an easier mechanism for parties to enforce awards internationally;
(c) Finality: Arbitral awards can be final and binding, with very limited grounds for appeal. This finality reduces the risk of prolonged litigation and provides certainty to the parties. Even if court proceedings are commenced, a stay can be obtained in favour of arbitration.
(d) Confidentiality: Arbitration proceedings are private and confidential, which enable the protection of sensitive business information and allow parties to resolve disputes discreetly. This is the case under the Arbitration Act, in which disclosure of confidential information is actionable as a breach of an obligation of confidence, unless the disclosure is made in certain specific statutorily outlined circumstances.
(e) Efficiency: Resolution is generally more expeditious compared to court litigation. The flexibility in procedural rules allows parties to refine the process to their specific needs.
Disney World’s insistence on arbitration is likely due to a combination of these advantages, with a particular interest in preserving confidentiality. The unfortunate circumstances surrounding the death and the likely exposure that the company will face, would be mitigated by having the dispute ventilated in private proceedings.
In the context of whether Disney World would be successful in its assertion that the matter should be stayed and proceed to arbitration, in this instance, there is likely to be some level of difficulty.
The arbitration agreement relied on is contained in the terms of use for a separate service, Disney+, rather than terms relating to the use of the Disney World theme park which the restaurant is associated with.
Notwithstanding the benefits of arbitration, there still remains some challenges and considerations for parties engaging in arbitration. In particular:
• Cost: Arbitration proceedings can be expensive, especially in complex cases involving multiple arbitrators or extensive hearings. While the process can be faster, it may not always be cheaper than litigation.
• Limited appeal rights: The finality of arbitration decisions means that parties have limited opportunities to appeal or challenge an award.
• Enforcement issues: Even in jurisdictions with legislative provisions that are aligned to the UNCITRAL Model Law, challenges may still arise when dealing with parties in jurisdictions with weak legal frameworks or where courts are hesitant to recognise foreign arbitral awards.
• Selection of arbitrators: Choosing the right arbitrator(s) is critical, and the process can be complex. Ensuring the impartiality and competence of the arbitrator is essential to a fair and effective arbitration process.
In terms of the Limited Appeal Rights, although the Arbitration Act provides that an award is final and binding and can be enforced in the same manner as a judgment or order of the High Court, there remains a statutory power to set aside an award, as well as a power under the common law.
The statutory power to set aside an arbitral award is quite limited however, and can be exercised only where:
(i) A party to the arbitration agreement was under some incapacity;
(ii) The arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the laws of T&T;
(iii) The party making the application to set aside was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case;
(iv) The arbitral 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;
(v) The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless the agreement was in conflict with a provision of the Arbitration Act from which the parties cannot derogate, or, failing such agreement, was not in accordance with the Act;
(vi) The subject-matter of the dispute is not capable of settlement by arbitration under the law T&T;
(vii) The award is in conflict with the public policy of T&T.
Under the common law, there is also a power to set aside an award which has an error on the face of the award, being wholly or in part, in excess of jurisdiction, a patently substantive defect, or there is an admitted mistake.
Over 100 years ago, an English Court commented that commercial arbitration is undoubtedly and deservedly popular among commercial men – this statement rings even more true in the current commercial climate.
The Arbitration Act therefore marks a significant milestone in the evolution of arbitration in T&T, offering a modernised and robust framework for resolving disputes. However, as global issues such as the Disney controversy illustrate, careful consideration should be given to appropriateness, benefit and use of arbitration in commercial transactions.
