Seanad Éireann - Volume 155 - 14 May, 1998

Arbitration (International Commercial) Bill, 1997: Committee and Remaining Stages.

Sections 1 to 4, inclusive, agreed to.

SECTION 5.

Ms O'Meara: I move amendment No. 1:

In page 4, between lines 18 and 19, to insert the following new subsection:

“(3) Reference to commercial arbitration in the Model Law shall not include a case where a person deals as a consumer in the State.”.

This amendment is self-explanatory and is designed to protect the consumer.

Minister of State at the Department of Justice, Equality and Law Reform (Miss M. Wallace): The amendment is predicated on the idea that the Model Law has implications for consumer dealings and that such dealings would be within its scope. This is not actually the case. The Model Law is limited in its scope of application to international [786] commercial arbitration. Within the Model Law itself, at Article 1, the term “international” is given a very wide meaning. Central to the concept, however, is the idea of a place of business. From this it can be seen that business dealings of a commercial nature, as distinct from dealings involving consumer interests, are what are at issue here. It is also clear from the legislative history of the Model Law — and hence the reference in section 5 of the Bill to the documents of the United Nations Commission on International Trade Law and its relevant working group — that certain relationships are not included in the term “commercial”. In particular such relationships are instanced as including labour and employment disputes and ordinary consumer claims.

I am sure those who will be using the Model Law will be fully conversant with the intricacies of its varied provisions and I am happy that the clarification which the Senators are seeking to introduce by way of this amendment is not one which requires to be stated expressly in the body of the Bill.

Amendment, by leave, withdrawn.

Section 5 agreed to.

Section 6 agreed to.

SECTION 7.

An Leas-Chathaoirleach: Amendments Nos. 2 and 6 are related and may be discussed together.

Ms O'Meara: I move amendment No. 2:

In page 4, subsection (1)(d), line 39, after “interim” to insert “or interlocutory”.

This amendment is self-explanatory. The insertion of the words “or interlocutory” extends the power of the High Court in order to grant interlocutory as well as interim injunctions under the Bill. I expect the Minister to tell me that this is not necessary but it would be useful and would remove any doubt.

Miss M. Wallace: With regard to amendment No. 2, I do not believe there is a need to amend section 7(1)(d) to provide a court with specific powers to grant interlocutory injunctions in support of international arbitration proceedings. That section provides for the court to grant an interim injunction in support of such proceedings. That provision is modelled on section 22 of the Arbitration Act, 1954, and a similar provision in the UK Arbitration Act, 1996. I am not aware that the omission of a reference to interlocutory injunctions in the 1954 Act has caused any difficulties. I believe that the power to grant an interim injunction is an adequate means of preserving the status quo pending the outcome of an arbitration. Indeed, there is a possibility that to expand the provision along the lines proposed by [787] the Senator might cast a doubt on orders that had already been made under the 1954 Act. Accordingly, I do not propose to accept amendment No. 2 and the same logic applies to amendment No. 6.

Amendment, by leave, withdrawn.

Section 7 agreed to.

Section 8 agreed to.

NEW SECTION .

Ms O'Meara: I move amendment No. 3:

In page 5, before section 9, to insert the following new section:

“9. —Any person who, upon any examination upon oath or affirmation pursuant to an order of the High Court under section 7(1)(h), wilfully and corruptly gives false evidence or wilfully and corruptly swears or affirms anything which is false, shall be guilty of an offence and on conviction thereof, shall be liable to the penalties for wilful and corrupt perjury.”.

The amendment seeks to insert a new section into the Bill which would impose a penalty for perjury before an arbitrator. It would appear that there is no penalty under the Bill since section 7 of the 1954 Act does not apply. The result is a serious gap in the legislation and I hope the Minister will accept this amendment which would strengthen it.

Miss M. Wallace: The new section proposed by the Senator equates with that contained in the Arbitration Act, 1954, section 7, and, in effect, represents a sanction that can be applied if false evidence is given in the course of international commercial arbitration proceedings. However, we do not propose to accept the amendment, principally on the grounds that we do not believe it appropriate to the legislation we are seeking to enact. I have genuine misgivings as to whether, in the context of attracting international commercial arbitration business to this country, it is appropriate to introduce an amendment which speaks in terms of offences and penalties. It will be for the arbitral tribunal to assess the weight of any evidence given in proceedings and to make the necessary determination.

Where false evidence is found to have been given this is a factor which would, undoubtedly, influence the findings of the arbitral tribunal either in terms of the final award it might make or perhaps in any order for costs which it might consider suitable. Also, if the fact of giving false evidence were to be discovered subsequent to the making of the award it could be grounds for seeking to have the award set aside on the basis that it conflicts with public policy. These practical considerations carry more than sufficient force to [788] outweigh the arguments advanced for putting an express penalties provision into the legislation. I stress that the main purpose of the legislation is to attract international commercial arbitration business to the country.

Ms O'Meara: It is for exactly that reason it is important to make this amendment to the Bill, otherwise we give the impression that our standards are low. That is exactly the wrong impression to give to the international community. In her response, the Minister says this amendment might discourage international business. This suggests that we our standards of evidence are loose and I find the Minister's response disappointing. It is not sufficient to say that a case could be reopened if it were later discovered that false evidence had been given. We should examine how we are perceived internationally, particularly in the operation of our financial services.

Mr. O'Donovan: My personal view is that perjury is more applicable to criminal than civil law. Not so long ago members of the Opposition argued the inappropriateness of the provision of perjury in the context of a Bill. The law concerning perjury is seldom used in my experience and its introduction could do more harm than good. We should leave well enough alone as I am not sure when there was a case concerning perjury, which is very difficult to prove. There was an attempt to bring perjury charges in 1989 in the context of the Betelgeuse disaster in Bantry bay. Eventually, after years, the proceedings against the three or four people charged with perjury fell flat. Perjury is very difficult to prove and the penalties under existing legislation are very severe, with provisions for a lengthy term of imprisonment on conviction. Its introduction might send out the wrong signals in an international context.

I understand where the Senator is coming from but there are better and stronger arguments in favour of what the Minister is trying to achieve than introducing this penalty in the event of false evidence being given. There are other provisions as outlined by the Minister and we should proceed with the Bill in its present format.

Miss M. Wallace: Evidence on oath is rare in arbitration. My reluctance to accept the Senator's amendment is based on the pragmatic grounds that I do not think it is appropriate to make specific provisions for penalties in the legislation. Prosecutions for perjury are not numerous and it is our hope, following the passing of the legislation, that international commercial arbitrations carried out here will be numerous. In such circumstances we do not wish to include provision in the legislation which might be used to our disadvantage.

In commercial arbitration it is the sanctions with commercial impact that bite best. In this context I am confident there are sufficient mechanisms available to act as a persuasive deterrent to the swearing of false evidence.

[789] Amendment put and declared lost.

Sections 9 to 11, inclusive, agreed to.

SECTION 12.

Ms O'Meara: I move amendment No. 4:

In page 8, subsection (7)(b), line 16, after “arbitral tribunal,” to insert “or acts in a professional capacity in connection with those proceedings,”.

This amendment is designed to cover lawyers who do preliminary work, whether or not they appear at the hearing before the arbitrator. The section as it stands provides the usual High Court rights for lawyers who appear before the arbitrator but not for those who do preliminary work.

Miss M. Wallace: Section 12(7) of the Bill as drafted provides barristers, solicitors or persons holding an equivalent qualification obtained in another jurisdiction who appear before an arbitral tribunal with the same privileges and immunities as barristers and solicitors have in High Court proceedings. The amendment would broaden the scope of subsection (7) so as to extend to barristers and solicitors those same privileges and immunities when acting in a professional capacity in connection with arbitral proceedings. Since this amendment was tabled on Committee Stage in the other House, its contents have been the subject of detailed consideration and the advice of the Attorney General in relation to the proposal has also been sought.

The question of the liability of barristers and solicitors for professional negligence in relation to litigation is complex and was the subject of a report of the committee on court practice and procedure in 1971. That report stated that the position then appeared to be that a barrister was immune from actions for damages for professional negligence when acting as an advocate in court, but that the position regarding that part of litigation consisting of advisory and preliminary work was in doubt. Since then the position has, in part, probably been clarified to the extent that it is generally considered that if a barrister or solicitor allowed a claim to become statute barred due to a delay on his or her part there would be liability in negligence. Nevertheless, the committee's report recommended that it would be preferable to have the general position clarified by court decisions in appropriate cases rather than attempting to define the position by statute. This remains a valid proposition. It would not be appropriate to deal with this issue solely in the context of arbitration, and statutory intervention in the area of pre-trial work by barristers and solicitors is outside the scope of the Bill. For this reason I cannot accept the amendment.

Amendment, by leave, withdrawn.

Section 12 agreed to.

[790] Sections 13 to 16, inclusive, agreed to.

NEW SECTIONS.

Ms O'Meara: I move amendment No. 5:

In page 9, before section 17, to insert the following new section:

“17.—The following section is hereby inserted after section 18 of the Arbitration Act, 1954:

‘18A.—(1) Article 16 of the UNCITRAL Model Law on International Commercial Arbitration shall apply with any necessary modifications to arbitration under this Act.

(2) Section 34(5) and (6) of this Act shall apply to this section.’.”.

This amendment is designed to allow Irish arbitrators benefit from article 16 of the Model Law. I wish to hear the Minister's response to it.

Miss M. Wallace: This amendment would modify the Arbitration Act, 1954, which, together with the Arbitration Act, 1980, provides the current statutory framework within which arbitrations operate in the State. The purpose of the Bill is to deal with international commercial arbitrations. The intention, subject to the two amendments to the Arbitration Acts, 1954 and 1980, contained in sections 17 and 18 of the Bill, is to interfere as little as possible with the current statutory framework within which arbitrations operate. On the whole these Acts function efficiently and provide the necessary supportive framework for the different types of arbitration which already take place on a regular basis in the State.

A single legislative measure, focused on international arbitration and not burdened by too many add-ons related to domestic arbitration, is the best way to proceed at this time. It is very much in our interests if the legislation can be seen as an instrument which is almost exclusively geared towards international concerns. I am also reluctant to interfere in a substantial manner with existing legislation without first subjecting our domestic arbitration code to a thorough review to ensure it fully meets the concerns of professional bodies and society at large. The fact that this process would take some time was another reason for the decision to advance speedily with this Bill in the international context. Accordingly, I am unable to accept the amendment.

Amendment, by leave, withdrawn.

An Leas-Chathaoirleach: Amendment No. 6 has already been discussed with amendment No. 2.

Amendment No. 6 not moved.

[791] Ms O'Meara: I move amendment No. 7:

In page 9, before section 17, to insert the following new section:

“19.—The following section is hereby inserted after section 18 of the Arbitration Act, 1954:

‘28A.—(1) The award shall state the reasons upon which it is based, unless the parties have agreed that no reasons are to be given or the award is an award on agreed terms.

(2) Section 34(5) and (6) of this Act shall apply to this section.’.”.

This amendment is similar to amendment No. 5. Therefore, I assume the response of the Minister will be similar. The amendment would allow Irish arbitrators benefit from article 31 of the Model Law.

Miss M. Wallace: I am unable to accept the amendment for the reasons alluded to by the Senator and as outlined in my response to amendment No. 5. I would prefer to deal with this matter in the context of a general review of domestic arbitration in the State. I do not believe our current arbitration régime would be improved significantly by piecemeal adjustments to existing legislation. I hope Senators will understand this position.

Amendment, by leave, withdrawn.

Sections 17 and 18 agreed to.

Schedule agreed to.

Title agreed to.

Bill reported without amendment, received for final consideration and passed.

Sitting suspended at 1.10 p.m. and resumed at 2 p.m.