Meeting of the Parliament (Hybrid) 23 March 2021
Amendment 2 aims to ensure the operation of an effective statutory arbitration scheme. I am concerned that the scheme as proposed in the bill is not governed by the Arbitration (Scotland) Act 2010. As the bill stands, the scheme allows for the arbitration rules of any institution to be adopted and for arbitrations to be seated in England or elsewhere. There is also no appeals mechanism in respect of an arbitration, which seems unfair.
I take the view that any statutory arbitration scheme in Scotland should follow the Scottish arbitration system and rules, be seated in Scotland and have the proportionate appeal processes within that system. Parties should not be deprived of the benefit of the procedures that are set out in the 2010 act.
The 2010 act was designed to augment and enhance statutory arbitration, and section 16 has the effect that the act’s substantive provisions and the Scottish arbitration rules, which are set out in schedule 1, govern any arbitration that is carried out under a legislative provision. The rules set out a scheme that allows an arbitration to proceed from the appointment of an arbitrator to the final and binding determination of the dispute, including appeals to the court. All that is needed to attract the 2010 act is that legislation says that a dispute is to be resolved by arbitration, or words to that effect.
Almost 11 years on from royal assent, section 16 of the 2010 act is still not in force. That is a matter of regret, and I urge the Scottish Government to bring it into force as soon as possible.
Despite the delay in bringing that important statutory provision into force, drafting tools have been used by the Scottish Government and the United Kingdom Government to ensure that that approach to statutory arbitration can apply to new statutory schemes. Therefore, there is precedent elsewhere for the approach in amendment 2—for example, in the Food Safety Act 1990 as amended by the Food (Scotland) Act 2015. That illustrates that the Scottish Government has considered the approach important in new arbitration schemes in the context of previous bills.
I understand that the Scottish Government shares my concern about the approach to arbitration in the bill but has indicated that the issue can be fixed by subordinate legislation. I do not consider that to be an appropriate approach to the development of primary legislation, and my view is shared by Brandon Malone, the chair of the Scottish Arbitration Centre, and Lord Glennie, a recently retired judge of the Court of Session who is vice-chairman of the board of the Scottish Arbitration Centre.
Amendment 2 would ensure that the arbitration scheme in the bill was, rightly, governed by the Scottish arbitration system, including that system’s fair appeals mechanism.
I move amendment 2.