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Sweden, Scotland failed to capitalise on the global arbitration phenomenon. In Scotland, domestic arbitration International has been in decline and international arbitration barely Arbitration in featured. This is set to change by virtue of the Scottish Act, which comprehensively overhauls Scotland’s ancient Scotland: A Bold, New arbitration regime, putting Scotland at the forefront of international arbitral practice. Future This article provides a contextual overview of arbitration in Scotland and analyses the key features of Joanna Dingwall* the Scottish Act, highlighting notable differences and similarities between it and the arbitration regimes of its English and Irish neighbours. Against this backdrop, this article will evaluate Scotland’s prospects of becoming a Comparative law; International commercial leading global centre for international arbitration. As will arbitration; Ireland; Scotland; Seat of arbitration be demonstrated, Scotland has all the ingredients needed Abstract to be a significant competitor on the international arbitral scene. Only time, coupled with the support of both With the entry into force of Scotland’s cutting-edge Scottish and international players, will tell whether Arbitration Act the stage is now set for Scotland to Scotland will fulfil its promise. become a leading global centre for international arbitration. This article affords a contextual overview of Arbitration in Scotland arbitration in Scotland and evaluates the key features of the Scottish Act, highlighting notable differences and Scotland has a long tradition of arbitration, which can be 3 similarities between it and the arbitration regimes of its traced back to medieval times. Despite this extensive English and Irish neighbours. Against this backdrop, this history, until now, Scotland has had no coherent article considers Scotland’s prospects of becoming a arbitration regime. Scots arbitration-law has been a significant competitor on the international arbitral scene. hotchpotch of ancient case law and incomplete, out-dated statutes.4 Layer upon layer of archaic precedents, Introduction institutional authorities and fragmentary statutory law mixed together, resulting in an anachronistic regime Scotland is poised to become a competitive global venue riddled with deficiencies and uncertainties. Key pitfalls for international arbitration, by virtue of its dynamic new included: arbitration regime. The Arbitration (Scotland) Act 2010 • lack of accessibility of Scotland’s (the “Scottish Act”) received Royal Assent on January 1 arbitration regime, rendering the status of 5, 2010 and came into force on June 7, 2010. This Scots arbitration-law unclear on many innovative piece of legislation codifies Scots law on points; arbitration into one streamlined, user-friendly document • uncertainty over whether confidentiality and creates a unitary, modern, efficient system. constituted an implied term of Scots law, Arbitration is the dispute-resolution method of choice in the absence of express provision in the in international commercial contracts. In recent years, the arbitration agreement; number of transboundary arbitral disputes has grown 2 • inability of arbitrators to determine their dramatically. Despite this, and notwithstanding the own jurisdiction5; success of international arbitration in key European • lack of express provision for an arbitrator jurisdictions, such as England, France, Switzerland and to award damages, costs or interest;

* Joanna Dingwall, LLM (International Legal Studies), New York University; LLB (First Class Honours), University of Glasgow, is admitted to practise law in Scotland (solicitor and notary public), New York (attorney at law), England and Wales (solicitor). The author is a London-based associate in Latham & Watkins’ Public International Law and International Dispute Resolution Practice Groups and is a tutor of international law at the School of Oriental and African Studies, University of London. Email: [email protected]. 1 The Arbitration (Scotland) Act 2010 (Commencement No.1 and Transitional Provisions) Order 2010 (SSI 2010/195) (the “Commencement Order”) art.2. 2 Although there is no comprehensive record of the number of international arbitrations, the International Court of Arbitration of the International Chamber of Commerce (“ICC”) publishes yearly statistics in respect of ICC arbitrations. These figures, which are illustrative of the wider boom in international arbitration, reveal that ICC arbitrations have risen steadily for decades, rising sharply in recent years: see “2009 Statistical Report” (2010) 21(1) ICC International Court of Arbitration Bulletin. These findings are borne out by the study by Queen Mary, University of London and PriceWaterhouseCoopers (“PWC”) into international arbitration in 2008, which demonstrates that the volume of arbitrations in leading regional centres grew progressively over a five-year period, rising from a cumulative total of 3,023 arbitrations in 2003 to a combined total of 15,249 arbitration in 2008: see Queen Mary/PWC, International Arbitration—Corporate Attitudes and Practices 2008, available at http://www.arbitrationonline .org/docs/IAstudy_2008.pdf [Accessed August 13, 2010]. 3 For a succinct historical overview of arbitration in Scotland, see Hew Dundas, “The Arbitration (Scotland) Act 2010: Converting Vision into Reality” (2010) 76 Arbitration 1, 3–5. 4 Before the Scottish Act entered into force, Scots arbitration law was predominately common-law based, with precedents spanning over 400 years (see Robert Hunter, The Law of Arbitration in Scotland, 2nd edn (Butterworths, 2002), p.12.4), together with piecemeal statutory fragments, including: an Act of 1598 (Anent Removing and Extinguishing of Deidlie Feidis), which was never formally repealed but which is likely to have fallen into desuetude; the articles of Regulation of 1695 art.25; the Arbitration (Scotland) Act 1894; the Administration of Justice (Scotland) Act 1972 s.3; the Arbitration Act 1975; the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 s.66 and Sch.7; the Civil Evidence (Scotland) Act 1988 and the Requirements of Writing (Scotland) Act 1995. 5 The principle of kompetenz-kompetenz, which underscores international arbitral practice, was rejected expressly in the leading Scots law case on this point: Caledonian Ry Co v Greenock & Wemyss Bay Ry Co (1872) 10 M. 892 at 898.

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• ambiguity as to the extent of the immunity judgment. The New York Convention provides an of an arbitrator from suit; international framework for the recognition and • general uncertainty as to the extent of an enforcement of arbitral awards, and it now has 144 arbitrator’s powers and duties; and signatory states.9 Subject to very limited exceptions, the • the application of the oft-abused stated-case New York Convention provides for the mutual recognition procedure, which allowed a party to request and enforcement of arbitral awards in the courts of that the arbitrator refer a question of law to signatory states. the Court of Session at any stage during the Consequently, the majority of international commercial arbitration process, frequently leading to contracts, particularly those with the potential for delay and expense.6 transboundary disputes, specify arbitration as their method of dispute resolution. Notwithstanding this proliferation In 1990, Scotland adopted the UNCITRAL Model Law of international arbitration, Scotland’s unwieldy on International Commercial Arbitration 1985 (the arbitration regime failed to attract international “Model Law”) in respect of international arbitrations commercial actors, because they seek a level of certainty only, creating a dual arbitration regime.7 Scotland’s and predictability in the operation of the arbitral process adoption of the Model Law was not successful. This was that Scots law has been unable to provide. Indeed, even largely due to the legislator’s failure to fill in the gaps in domestic arbitration has declined in Scotland in recent the Model Law, with the result that many of the years, in part due to the uncertainties of the arbitration uncertainties in Scotland’s underlying arbitration regime regime.10 In that context, the growth of international continued to apply to international arbitrations seated in arbitration in Scotland was doomed from the outset. Scotland. The Model Law is, of course, a framework This is set to change. The enactment of the Scottish document, intended to be supplemented by national law Act is a defining moment for arbitration in Scotland. The where required. For example, the Model Law makes no Scottish Act radically overhauls Scots arbitration law and provision for arbitrators to award damages, costs or takes it “from caveman to spaceman in one step”,11 placing interest; Scots law did not rectify this. The inadequacy Scotland in prime position to compete globally as an of Scotland’s adoption of the Model Law was attractive jurisdiction for international arbitration. compounded by Scotland’s failure to keep apace with change: Scotland did not incorporate the UNCITRAL amendments to the Model Law, which were made in 2006. The Arbitration (Scotland) Act 2010 Unsurprisingly, given these problems, Scotland’s Scotland’s new cutting-edge arbitration law creates a adoption of the Model Law did not lead to any real dynamic arbitration regime, encapsulated in one 8 increase in international arbitration in Scotland. However, streamlined, user-friendly document. The Scottish Act is in today’s expanding global economy, the benefits of based upon and is fully consistent with Model-Law arbitration have never been more acute. Arbitration allows principles and the New York Convention. It is also parties to tailor the dispute-resolution process to their broadly comparable to England’s Arbitration Act 1996 specific needs. Commercial actors value the privacy that (the “English Act”).12 However, the Scottish Act contains arbitration allows them, along with the opportunity it various innovations that distinguish it from other national affords them to retain direct control of the process and to arbitration laws and place Scotland at the forefront of select the location, timing and language of the international arbitral practice. proceedings, the applicable law and procedural rules, and The Scottish Act governs all arbitrations commenced the decision maker (who will often have specialist in Scotland under contractual arbitration agreements on expertise in the subject matter of the dispute). As a result, or after June 7, 2010, irrespective of when the arbitration arbitration has the potential to be faster, cheaper and more agreement was made.13 Notably, this means that the flexible than the court process. Scottish Act applies to arbitration agreements made before Without doubt, the overriding attraction of international June 7, 2010, unless the parties agree otherwise.14 arbitration is the fact that an arbitral award can be enforced across borders with more ease than a court

6 The Court of Session is Scotland’s supreme civil court, and it sits as a court of first instance and a court of appeal. 7 Pursuant to s.66 and Sch.7 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990, the Model Law applied to commercial arbitrations in Scotland where one party had its place of business outside Scotland, or the place of performance or the subject matter of the dispute was outside Scotland. As will be discussed in this article, the Scottish Act has repealed the application of the Model Law in Scotland. 8 Definitive statistical information has not been recorded, but in the opinion of Lord Dervaird, who is generally recognised to be Scotland’s leading international arbitrator, since Scotland’s enactment of the Model Law in 1990, only around 10–15 international arbitrations have been seated in Scotland: Steven Walker, “The Renaissance of Scottish International Arbitration”, paper delivered at Edinburgh Centre for Commercial Law, November 24, 2009, available at http://www.law.ed.ac.uk/centreforcommerciallaw /files/Centre%20for%20Commercial%20law%20files/The%20Renaissance%20of%20Scottish%20International%20Arbitration%2024%20Nov%2009.pdf [Accessed August 13, 2010]. 9 The New York Convention on the Recognition and Enforcement of Foreign Awards 1958. 10 Another factor in the reduction of domestic arbitration in Scotland was the advent of the Housing Grants, Construction and Regeneration Act 1996, which successfully introduced the use of adjudication in the construction industry at the expense of arbitration. 11 Hew Dundas, an independent arbitrator who had a significant role in the passing of the Scottish Act, as quoted in Kyriaki Karadelis, “Scottish Arbitration Bill brings in confidentiality obligation as a default rule” in Global Arbitration Review, November 23, 2009. 12 The English Act entered into force on January 31, 1997 and applies when the seat of the arbitration is in England, Wales or Northern Ireland. 13 Commencement Order art.2; the Scottish Act does not apply to ongoing arbitrations which started before June 7, 2010 (s.36(1)). 14 Scottish Act s.36(3).

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The Scottish Act was a collaborative endeavour. It was the historical distinction between international and developed following an extensive consultation process, domestic arbitrations.20 The new Irish arbitral regime is which included contributions from an unprecedented also contained in one comprehensive statute, which number of private parties, such as the Scottish branch of repeals all of Ireland’s existing domestic legislation on the Chartered Institute of Arbitrators, and incorporated arbitration.21 However, unlike Scotland, Ireland has comparative review of the arbitral regimes in around 30 re-enacted the Model Law, extending its application to other countries. As acknowledged by Hew Dundas: domestic and international arbitrations and incorporating the 2006 amendments. “A key foundation underlying the act is the extensive Schedule 1 to the Irish Act incorporates the entire text research into arbitral law and procedures around the of the Model Law, while the main text of the Irish Act world carried out by the Chartered Institute of contains 32 sections of supplementary bolt-on legislation. Arbitrators (CIArb) Scottish Branch through the This supplementary legislation augments the Model Law CIArb’s worldwide network of approximately by addressing its omissions and seeking to assist its 12,000 members in more than 105 countries. Few operation, but it is fundamentally faithful to the other countries have researched and consulted so Model-Law system, introducing relatively few widely before enacting an arbitration law.”15 divergences or additions. This thorough consultation allowed Scotland to Scotland chose to take a different approach, by incorporate the best features of international practice into repealing its enactment of the Model Law and creating a the Scottish Act. comprehensive integrated arbitral regime premised on Scotland also had the advantage of observing the Model-Law principles. As will be demonstrated in this English Act in action over the past 13 years. This enabled article, this leads to a system which may be more it to create an arbitration law which draws on the English accessible to lay-users. As the Scottish Act has its roots experience, but which seeks to rectify some of the in the Model Law, like its English counterpart, its ambiguities and omissions in England’s arbitral regime, underlying approach will be instantly recognisable to which have become apparent through years of practice international practitioners. Accordingly, the next section and experience. of this article will not provide a comprehensive survey The Scottish Act creates a unitary arbitral regime, of the Scottish Act, but rather confine itself to highlighting applicable to international and domestic arbitrations. The its most noteworthy features and innovations.22 Scottish Act has worldwide extra-territorial effect, thereby allowing non-Scottish parties to provide for an arbitration Key Features of Scotland’s Innovative outside Scotland to be governed by the Act. New Arbitration Regime Scotland has repealed its enactment of the Model Law. As the Model Law is a framework document, its success User-Friendly Format is dependent upon national law to fill in the gaps. Some countries possess underlying national laws (such as The Scottish Act is user-friendly with a focus on party comprehensive civil codes) which are relied upon to plug autonomy. In keeping with the Scottish Government’s these gaps.16 Other countries do not have an adequate plain English policy and commitment to accessible 23 underlying system, and need to enact substantial legislation, the Scottish Act is drafted in straightforward supplementary legislation to ensure the smooth operation terms. Some of its provisions therefore differ from those of the Model Law.17 For example, when enacting the in the English Act, although the substance may be the Model Law, countries such as Singapore and New same. Zealand included extensive additional provisions. Indeed, although much of it is directly analogous to Ireland’s newly enacted Arbitration Act 2010 (the “Irish the English Act, the Scottish Act has a distinctive, Act”) also follows this route.18 accessible format. In a key structural difference from its Like Scotland, Ireland originally enacted the Model English counterpart (and the laws of most other Law only in respect of international arbitrations.19 As in jurisdictions), the Scottish Act separates procedure from Scotland, Ireland’s new arbitral regime is unitary, ending law, siphoning the former into Sch.1 to the Act, which

15 Hew Dundas and David Bartos, “Trade wigs and gowns for a shirtsleeve legal alternative” in The Scotsman, June 7, 2010. 16 For example, Germany adopted the Model Law in 1998 with only minor modifications and relies upon its Code of Civil Procedure (Zivilprozessordnung) to allow it to function smoothly. 17 As discussed above, when Scotland originally enacted the Model Law in 1990, it did so with only minor alterations and no bolt-on legislation to fill the gaps. This was undoubtedly a significant factor in the failure of the Model Law to increase Scotland’s viability as a location for international arbitration. 18 The Irish Act was signed into law on March 8, 2010 and became operative on June 8, 2010, one day after the Scottish Act came into force (Irish Act s.1(2)). It applies to all arbitrations which commence on or after that date, irrespective of when the arbitration agreement was made (s.3). Therefore, the Irish Act applies to arbitration agreements made before June 8, 2010, provided the arbitration is commenced on or after June 8, 2010 (this is not subject to the right of the parties to agree otherwise, unlike the Scottish Act (s.36(3)). 19 By virtue of Ireland’s Arbitration (International Commercial) Act 1998. 20 Irish Act s.6. 21 The Irish Act repeals the Arbitration Act 1954, the Arbitration Act 1980 and the Arbitration (International Commercial) Act 1998. 22 For a comprehensive guide to the Scottish Act, see Fraser Davidson, Hew Dundas and David Bartos, Arbitration (Scotland) Act 2010 (W. Green, 2010). 23 For details of the Scottish Government’s plain English policy, see the report of the Office of the Scottish Parliamentary Counsel, Plain Language and Legislation (February 2006), available at http://www.scotland.gov.uk/Publications/2006/02/17093804/7 [Accessed August 13, 2010]. The Office of the Scottish Parliamentary Counsel is the office responsible for drafting Scottish legislation.

2010 13 Int. A.L.R., Issue 4 © Thomson Reuters (Legal) Limited and Contributors 141 constitutes a stand-alone code of Scottish Arbitration not be condoned. The applicability of these duties, which Rules. The Rules are intended to act as a separate pull-out can be relied upon to enhance the expeditiousness of the section, encapsulating in a clear and accessible format arbitral proceedings, is one clear advantage to the Scottish everything that a business user might need to know about and English arbitral regimes over most Model-Law the arbitration process. The ease of use of the Scottish jurisdictions.31 This article will consider some of the Act in comparison to other jurisdictions is demonstrated sanctions for breach of these duties below, when below, when considering the arbitral appointment evaluating the powers of the arbitral tribunal. process.24 Several of the Scottish Arbitration Rules are mandatory Role of the Courts and will be incorporated into arbitration agreements as implied terms which cannot be modified or excluded.25 Scotland’s arbitral regime restricts court interference to As the remainder of the rules are default, they can be the bare minimum required to supervise or assist the tailored by the parties to the arbitration, allowing arbitral tribunal. In similar terms to the English Act, the flexibility and enhancing party autonomy.26 Each rule is Scottish Act restricts challenges of arbitral awards to three 27 grounds: substantive jurisdiction, serious irregularity and clearly designated as either mandatory or default. The 32 Scottish Arbitration Rules are consistent with the legal error. As with the English Act, parties can agree UNCITRAL Arbitration Rules. Moreover, parties may to exclude the right to appeal on the basis of legal error, or retain it to allow an (optional) additional check on the choose to use the UNCITRAL Arbitration Rules (or other 33 institutional rules) instead of the default rules of the arbitral award. Scottish Act.28 Challenges on these grounds are by way of appeal to the Outer House of the Court of Session, with limited Founding Principles right of appeal to the Inner House (which is similar to the Court of Appeal in England). The decision of the Inner The Scottish Act is governed by three fundamental House will be final.34 founding principles: The permitted grounds of challenge and appeal are one of the main divergences between the Scottish and English • resolving disputes fairly and impartially, Acts, respectively, and the arbitration laws of Model-Law without unnecessary delay or expense; jurisdictions, such as Ireland. The Irish Act adheres • party autonomy, allowing parties to tailor faithfully to the Model Law, providing that the only the process to their needs, by agreement, method of challenging an arbitral award is an application subject to certain public-interest safeguards; to set it aside on the specific grounds laid out in art.34 of and the Model Law.35 The grounds for challenge in art.34 are • non-interference by the court except in the extremely limited.36 However, notably, the English Act’s limited circumstances set out in the Scottish broad grounds of challenge have not undermined Act.29 England’s status as one of the leading global arbitral Both the court and the arbitral tribunal are obliged to jurisdictions. English courts have shown their reluctance apply the Scottish Act in light of these founding to intervene in the arbitral process, seldom allowing principles. challenge to international arbitral awards. Attention will In common with its English counterpart, the Scottish now be focused on the Scottish courts to assess their Act imposes mandatory duties on both the arbitrator and approach. the parties to conduct the arbitration without unnecessary Precedent shows that traditionally the Scottish courts delay and without incurring any unnecessary expense.30 have been supportive of arbitration. For example, the This makes clear that delaying tactics by the parties will Scottish courts have consistently upheld the right of

24 See fn.41 below and accompanying text. 25 Scottish Act ss.7 to 8. 26 Scottish Act s.9. 27 Mandatory rules are marked “M”; default rules are marked “D”. 28 Scottish Act s.9(4). Subject, of course, to the mandatory rules in the Scottish Act, from which parties cannot derogate. 29 Scottish Act s.1; the same principles also underscore the English Act (s.1). In contrast, the Irish Act/Model Law does not set out founding principles as such; however, it does incorporate the principles of party autonomy (Irish Act Sch.1 art.19) and non-intervention by courts except in the circumstances set out by the Act (Irish Act Sch.1 art.5). 30 Scottish Act Sch.1 rr.24 and 25 (mandatory), respectively; English Act ss.33 and 40, respectively. 31 The Model Law contains no such explicit duties, so they are absent from Model-Law jurisdictions unless they have been added on by supplementary domestic legislation. Ireland has not enacted duties such as these. 32 Scottish Act Sch.1 rr.67 to 69; English Act ss.67 to 69. Pursuant to Scotland’s plain-English policy, the Scottish Act refers to “legal error appeals” (r.69), while the English Act uses the terminology “appeal on point of law” (s.69); however the substance of both provisions is essentially the same. 33 Many commentators argue that the right of a party to appeal on point of law (English Act s.69) should not apply unless the parties have selected it expressly. Some jurisdictions take that approach, but, interestingly Scotland has not done so, choosing instead to follow the English model and provide parties with a default right to make a legal error appeal (Scottish Act r.69). 34 Scottish Act Sch.1 s.71(5). 35 Irish Act Sch.1 Art.34. 36 In brief, the grounds for challenge under art.34 of the Model Law are: incapacity of the parties to conclude the arbitration agreement; invalidity of the arbitration agreement; failure to give a party proper notice of the arbitration or inability of a party to present its case; award going beyond the terms of the submission to arbitration; improper constitution of the arbitral tribunal or improper arbitral procedure; non-arbitrability of the subject matter of the dispute or violation of public policy.

2010 13 Int. A.L.R., Issue 4 © Thomson Reuters (Legal) Limited and Contributors 142 International Arbitration Law Review parties to agree to arbitrate. As acknowledged by the Institution of Civil Engineers, the Law Society of distinguished Lord Dunedin in 1922, “[i]f the parties have Scotland, the Royal Incorporation of Architects in contracted to arbitrate, to arbitration they must go”.37 Scotland, the Royal Institution of Chartered Surveyors The arbitration-friendly approach of the Scottish courts and the Scottish Agricultural Arbiters and Valuers can only intensify by virtue of the Scottish Act, which is Association.44 It is also open to the parties to designate founded on the principle of minimal court interference, an appointing authority to be used as an alternative. and which—for the first time in Scottish history—clearly As in England, under the Scottish Act, the court’s main delineates the court’s role to assist the arbitral process.38 function is to assist the arbitral tribunal. For example, the Indeed, as many provisions of the Scottish Act are directly court can order the attendance of witnesses or the analogous to those in the English Act, many decisions by production of documents.45 The Scottish Act also grants the English courts will be persuasive upon the Scottish the court various default powers, such as the authority to courts. grant interim measures provided it is satisfied that a The Scottish Act also serves to constrain the powers dispute has arisen (or might arise) which is subject to an of the Scottish courts by abolishing the anachronistic arbitration agreement.46 stated-case procedure.39 This procedure allowed a party to request that the arbitrator refer a question of law to the Powers of the Arbitral Tribunal Court of Session at any stage during the arbitration process. Given the ease with which it could be invoked, The arbitral tribunal has wide discretion to determine the it was liable to abuse by parties seeking to obstruct the conduct of the proceedings, subject to the freedom of the arbitration process, leading to delays and extra expense. parties to agree otherwise. For example, the arbitral A preferable, more-restricted alternative has been enacted, tribunal may select the procedure for the arbitration, which follows the English model.40 Similarly, Ireland has including the pleadings schedule, the format, timing and location of proceedings, the evidentiary rules to apply decided to repeal its comparable “case-stated” procedure, 47 pursuant to which arbitrators could refer a question of and the timing and extent of disclosure. Parties must comply with the arbitral tribunal’s law arising during the arbitration to the Irish High Court. 48 One key Scottish innovation is the creation of directions. As with the English Act, in the event of non-compliance, the arbitral tribunal has a range of “arbitral-appointments referees”, who will rectify failures 49 in the arbitrator-appointment process.41 This reduces the sanctions at its disposal. For instance, the tribunal may role of the courts in comparison to England’s regime. order that the recalcitrant party cannot rely on any allegation or material which was the subject of the Under the English Act, this role is given to the courts, 50 which can led to increased costs and delays.42 Similarly, direction. The tribunal is also entitled to draw adverse the Irish Act gives the court default competence to appoint inferences from the party’s non-compliance; proceed with the arbitration and make its award; or make any arbitrators in the event of breakdown of the appointment 51 process.43 provisional award that it considers appropriate. These In Scotland, various bodies are now authorised to act sanctions also apply in relation to a party who violates as arbitral appointments referees, namely: the Agricultural the arbitration agreement or fails to comply with the mandatory duty upon the parties to conduct the arbitration Industries Confederation Ltd, the Chartered Institute of 52 Arbitrators, the Dean of the Faculty of Advocates, the without unnecessary delay or expense. Indeed, where a party unnecessarily delays with its claim without good

37 Sanderson v Armour & Co, 1922 S.C. (H.L.) 117 at 126. 38 The Rules of the Court of Session have been updated in order to streamline the court’s role in facilitating the arbitral process: the Act of Sederunt (Rules of the Court of Session Amendment No. 4) (Miscellaneous) 2010 (SSI 2010/205), which came into force on June 7, 2010 (art.1). 39 The stated-case procedure was introduced in Scotland by virtue of the Administration of Justice (Scotland) Act 1972 s.3. 40 Scottish Act Sch.1 rr.41 (default), 42 (mandatory); this is broadly comparable to s.45 of the English Act and allows a point of law to be referred to the court to decide, subject to safeguards which will prevent this procedure from being used to obstruct and delay the arbitral process. 41 Scottish Act Sch.1 r.7 (mandatory). 42 English Act s.18. 43 Irish Act Sch.1 art.11(3). Indeed, this provision in the Irish Act illustrates how the interaction can sometimes be unwieldy between the Model Law itself and the bolt-on legislation that is often necessary for its operation. For example, a party arbitrating under the Irish Act, seeking to determine the process for appointment of an arbitrator (in the absence of party agreement), should first look to art.11(3) of the Model Law (Irish Act Sch.1 art.11), which provides that failures in the appointment process should be rectified, “by the court or other authority specified in article 6”. Turning to art.6 of the Model Law (Irish Act Sch.1 art.6) reveals that the state enacting the Model Law is to specify the court or other body authorised to rectify failures in the appointment process. Accordingly, a party must then examine the main text of the Irish Act, to determine that Ireland has designated its High Court as the competent authority to carry out this function (Irish Act s.9(1)(a)). In contrast, a party arbitrating under the Scottish Act need only turn to r.7 to find the correct procedure in the event of a failure in the appointment process. This exemplifies how the approach in Model Law jurisdictions can be less accessible to lay-users than the innovative new style adopted in the Scottish Act. 44 Schedule to the Arbitral Appointments Referee (Scotland) Order 2010 (SSI 2010/196), which came into force on June 7, 2010 (art.1). Scottish Ministers are authorised to designate entities to serve as arbitral appointment referees by virtue of s.24 of the Scottish Act. 45 Scottish Act Sch.1 r.45 (mandatory). 46 Scottish Act Sch.1 r.46 (default). 47 Scottish Act Sch.1 rr.28–29 (default); both the English and the Irish Acts grant arbitral tribunals similarly broad default powers (e.g. see English Act ss.34–38; Irish Act Sch.1 arts 19–24). 48 Scottish Act Sch.1 r.31 (default). 49 See Scottish Act Sch.1 rr.37–39 (default); English Act s.41. 50 Scottish Act Sch.1 r.39(2) (default). 51 Scottish Act Sch.1 r.39(2) (default). 52 Scottish Act Sch.1 r.25 (mandatory).

2010 13 Int. A.L.R., Issue 4 © Thomson Reuters (Legal) Limited and Contributors 143 reason, to the extent that it seriously prejudices the other to amend the Scottish Act by order to incorporate party or creates a risk that the issues cannot be resolved amendments to the Model Law, the UNCITRAL fairly, the tribunal is obliged to end the arbitration and Arbitration Rules and the New York Convention.64 make whatever award it considers appropriate.53 Amendments by order are subject to a parliamentary The Scottish Act brings Scots arbitration law up to date process (affirmative resolution procedure in the Scottish with international arbitral practice by permitting Parliament),65 which is significantly faster and simpler arbitrators to rule on their own jurisdiction than the process required to effect amendments by (kompetenz-kompetenz).54 Similarly, the Scottish Act now primary legislation. This will allow the Scottish Act to expressly grants the arbitral tribunal mandatory power to be amended speedily, in light of developments in order payment of a sum of money (including damages), international arbitral practice. 66 with or without interest.55 The tribunal may also award non-pecuniary remedies, for example, by ordering a party Other Notable Innovations to do or refrain from doing something.56 The tribunal has default power to make an order on costs (subject to the In addition to incorporating the best of international principle that costs should generally follow the event, arbitral practice, the Scottish Act draws on the wealth of except in circumstances where this would be experience under the English Act, which has been in place inappropriate).57 The Scottish approach to damages, costs for 13 years. The Scottish Act addresses various and interest is now broadly comparable to the English ambiguities and rectifies omissions in the English Act. and Irish positions.58 For example, in addition to the progressive features of In addition to granting these powers, Scots the Scottish Act demonstrated already (such as its arbitration-law also subjects the arbitral tribunal to certain distinctive, accessible format; creation of arbitral duties. For example, as in the Model Law but in contrast appointment referees; and streamlined amendment to the position in England, Scottish arbitrators have a process), it also incorporates the following elements: clear and continuing duty to disclose any conflict of • The Scottish Act provides clarity by 59 interest. The Scottish Act also imposes a mandatory duty including confidentiality as an express on the arbitral tribunal to be fair and independent and default obligation, unless the parties agree conduct the arbitration without unnecessary delay and otherwise.67 This is an improvement on the 60 expense. Non-compliance by the tribunal may allow the previous Scottish position. Formerly, it was parties to challenge the arbitral award on the grounds of unclear whether confidentiality was an 61 serious irregularity. In Scotland, the arbitral tribunal’s implied term of Scots law, in the absence fees may be subject to scrutiny by the parties, the arbitral of express provision in the arbitration appointment referee or the Auditor of the Court of agreement. Scotland’s express default 62 Session. Ultimately, the auditor of the Court of Session confidentiality obligation will likely has authority to order repayment of fees from the tribunal comfort international actors seeking 63 to the parties if they are considered excessive. unambiguous assurance that arbitration proceedings may be kept private. In Streamlined Amendment-Process contrast, most national arbitration laws do not explicitly provide that confidentiality The Scottish Act features a streamlined attaches to arbitration proceedings. For amendment-process, which will allow Scots law to keep example, in England confidentiality is apace with any future amendments to the Model Law, implied into an arbitration agreement by the UNCITRAL Arbitration Rules and the New York English common law,68 but it lacks a Convention. Following Singapore’s lead, Scotland has statutory basis. The position in many adopted a dynamic provision allowing Scottish Ministers Model-Law jurisdictions is similar. Ireland,

53 Scottish Act Sch.1 r.37 (default). 54 Scottish Act Sch.1 r.19 (mandatory); this principle is also enshrined in both the English Act (s.30) and the Irish Act/Model Law (Irish Act Sch.1 art.16). 55 Scottish Act Sch.1 rr.48 and 50 (mandatory). 56 Scottish Act Sch.1 r.49 (mandatory). 57 Scottish Act Sch.1 r.62 (default). 58 English Act ss.48–49 and 61; Irish Act ss.18 and 21. Section 21 of the Irish Act gives the arbitral tribunal default discretion to award costs “as it sees fit” (it remains to be seen whether this will lead Irish arbitral tribunals to depart from the principle that costs should follow the event, which has traditionally been upheld by the Irish courts with regard to costs in arbitrations unless the arbitral tribunal provides express reasons justifying departure). 59 Scottish Act Sch.1 r.8 (mandatory); Irish Act Sch.1 art.12(1). 60 Scottish Act Sch.1a r.24 (mandatory); an equivalent duty is contained in the English Act s.33. 61 Scottish Act Sch.1 r.68(2) (mandatory); English Act s.68(2)(a). 62 Scottish Act Sch.1 r.60(3) (mandatory). 63 Scottish Act Sch.1 r.60(5) (mandatory). 64 Scottish Act s.26. 65 Scottish Act s.33: to amend the Scottish Act by order, a Scottish Minister must draft a statutory instrument containing the order and lay it before the Scottish Parliament, for its approval by resolution. 66 For example, when the Scottish Parliament sits in September 2010, following its summer recess, Scottish Ministers could expeditiously amend the Scottish Act by order to incorporate reference to the UNCITRAL Revised Arbitration Rules (which are effective as of August 15, 2010). 67 Scottish Act Sch.1 r.26 (default). 68 As was recently confirmed in Michael Wilson & Partners Ltd v Emmott [2008] EWCA Civ 184; [2008] Bus. L.R. 1361 .

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for instance, has no express statutory • In distinction to the English Act, the provision explicitly providing for the Scottish Act extends to oral as well as confidentiality of arbitration proceedings, written arbitration agreements.75 However, but such a duty is usually implied. this feature is unlikely to have a significant However, in certain other jurisdictions, in practical impact in terms of international the absence of express agreement by the arbitrations, as the New York Convention parties, there is no implied obligation of only extends to arbitration agreements in confidentiality.69 writing.76 • Broad immunity provisions are contained • Unlike its English counterpart, the Scottish in the Scottish Act. These provisions Act puts in place procedure for resignation expressly grant immunity to the tribunal of an arbitrator.77 In contrast, the English and its appointing institution together with Act details the consequences of resignation experts, witnesses and legal representatives of arbitrators but omits to provide in relation to their acts and omissions to the procedure to regulate the process itself. same extent that they would be afforded if Thus, Scotland has learnt from the English experience the arbitration were civil proceedings.70 In and sought to replicate and augment the successful contrast, the English and Irish Acts provide English model for arbitration, while pioneering some more limited immunity provisions.71 progressive features. • The Scottish Act clearly sets out the rules to determine the substantive law that will apply to an arbitration agreement. If an Scotland’s Prospects as a Leading arbitration is seated in Scotland and the Global Centre for Arbitration arbitration agreement does not provide Choosing where to seat an arbitration has significant which substantive law is to govern it, unless ramifications. The seat determines the legal framework the parties agree otherwise, Scots law will within which the arbitration will take place. By seating 72 govern the arbitration agreement. This an arbitration in Scotland, parties agree to be governed allows the parties to benefit from a more by Scottish procedural law (the lex loci arbitri) and to be predictable framework for the arbitration. subject to the supervisory jurisdiction of the Scottish In contrast, the majority of arbitral regimes courts. do not to take such a definitive position on Due to the legal importance of the seat, parties look to the applicable substantive law. For seat their arbitration in a jurisdiction that is example, the English position on the “arbitration-friendly”. Repeatedly, parties opt to arbitrate applicable substantive law is in one of the established global jurisdictions, such as 73 contradictory. In Ireland, as with other England, France, Switzerland, Sweden or New York. Model-Law jurisdictions, if parties fail to With the advent of the Scottish Act, Scotland will now designate the applicable substantive law to go head-to-head with these leading international players. govern the arbitration agreement, the Has Scotland got what it takes to become a significant arbitral tribunal must apply the law centre of international arbitration? determined by the conflict of laws rules Scotland is an arbitration-friendly seat. Like England, 74 which it considers to be applicable. In it has an arbitration law based upon and fully consistent contrast to the Scottish approach, this with the Model-Law principles and the New York affords the tribunal considerable discretion Convention. Scotland’s emphasis on party autonomy to determine the rules which will serve as allows parties to choose to apply the Model Law instead a basis for the determination of the of the default provisions in the Scottish Act, subject to applicable substantive law, which can lead the Act’s mandatory provisions (many of which are not to uncertainty for the parties to the addressed in the Model Law and therefore supplement arbitration. it).

69 This is the position in Sweden, for example, as confirmed in Bulgarian Foreign Trade Bank Ltd v AI Trade Finance Inc (T-1881-99) Unreported October 27, 2000 Swedish Supreme Court. 70 Scottish Act Sch.1 rr.73 to 75 (mandatory). 71 The English Act provides immunity for arbitrators (s.29) and appointing institutions (s.74); the Irish Act provides immunity for arbitrators, appointing authorities and experts (s.22). 72 Scottish Act s.6. 73 See Sonatrach Petroleum Corp v Ferrell International Ltd [2002] 1 All E.R. (Comm) 627 (where it was held that the law of the contract should govern the separable arbitration agreement, in distinction from the law that the parties had agreed would govern the arbitration process); contrast C v. D [2007] EWCA Civ 1282; [2008] Bus. L.R. 843 (upholding decision that the law of the seat should govern); for further discussion see Hew Dundas, “The Arbitration (Scotland) Act 2010: Converting Vision into Reality” (2010) 76 Arbitration 1, 12 . 74 Irish Act Sch.1 art.28(2). 75 The definition of “arbitration agreement” in s.4 of the Scottish Act does not require that it must be in writing; thus, by operation of the Requirements of Writing (Scotland) Act 1995, oral agreements are also covered. By comparison, the Irish Act/Model Law provides that an arbitration agreement must be in writing (Sch.1 art.7(2)), but it could be made orally provided it is then recorded in some format (Sch.1 art.7(3)). 76 New York Convention art.II(1). 77 Scottish Act Sch.1 rr.15 to 16 (mandatory).

Scotland’s repeal of the Model Law is unlikely to Scotland is one of the very few jurisdictions with a undermine Scotland’s viability as a location for mixed legal system, which has its origins in the civil-law international arbitration. The popularity of the leading tradition but features a strong common-law influence. As non-Model-Law jurisdictions, England, France, Sweden, such, it is ideally placed as a neutral ground for Switzerland and New York, evidence that success as an international arbitration. Scots law has qualities to appeal arbitral seat is not predicated on enactment of the Model to the cultural perspectives of both civil-law and Law. Indeed, the Scottish Government acknowledged common-law practitioners seeking to conduct arbitration that one of its driving factors in repealing the Model Law in an impartial forum.79 For instance, seating an arbitration was that: in Scotland may be a suitable compromise in transatlantic arbitrations, which involve North American and “Non-Model Law venues such as London, Paris, continental European parties. Stockholm, Geneva/Zurich and New York are A particularly striking element of Scots law, which thriving [while] Model Law jurisdictions such as could be attractive to parties seeking expeditious arbitral Germany, Australia, New Zealand, Norway and proceedings, is that it does not have a system of discovery Denmark are not successful as a result and therefore of evidence. This distinguishes Scotland from the Model Law alone cannot be considered to be a common-law jurisdictions such as England and the United panacea for attracting international arbitration States, which permit parties to obtain disclosure or business.”78 discovery of documents relevant to proceedings from the In addition to Scotland’s appeal as an arbitration-friendly other party. As noted above, pursuant to the Scottish Act, seat, over time the following five key advantages may the arbitral tribunal has broad default discretion to select set Scotland apart from many other jurisdictions and give the procedure for the arbitration, including the extent of it a competitive edge: disclosure.80 The Scottish Act also empowers the court to assist the arbitral tribunal by ordering the production of Fair and Neutral Legal Tradition documents.81 However, the court cannot compel a person “to disclose anything which the person would be entitled First, Scotland has a mature and distinguished legal to refuse to […] disclose in civil proceedings.”82 The system, which is supportive of arbitration. As underlying rationale of Scots civil procedure law is that demonstrated above, Scotland has a cutting-edge recovery of documents is permitted only if the documents arbitration law, which encapsulates and builds upon the would be directly relevant to an issue which has already best of international practice. Commercial parties seek been pleaded by the requesting party in detail.83 The autonomy in the arbitration process, within a framework predisposition of Scots law to guard strongly against that provides certainty and predictability, all of which “fishing expeditions” for document recovery, may have Scotland’s new arbitral regime can offer. the corresponding benefit of reducing the overall time Another imperative for commercial parties is a neutral and cost of Scottish arbitration proceedings.84 legal and institutional framework to govern the arbitration. The neutrality of Scotland’s legal tradition could be a key English-Speaking Jurisdiction draw. Scotland has a legal system which is distinct from that of England. This could be an attractive to Secondly, international commercial actors often prefer international parties domiciled in France and England, to conduct arbitration proceedings in English. Its status for example, seeking a mutually acceptable venue which as an English-speaking jurisdiction could render Scotland provides an opportunity for neutral dispute resolution. more attractive than many other international jurisdictions.

78 Subordinate Legislation Committee Report on Arbitration (Scotland) Bill at Stage 1 (March 27, 2010), see the Response from Scottish Government at annexe 2, available at http://www.scottish.parliament.uk/s3/committees/subleg/reports-09/sur09-ArbitrationScotlandBill.htm#ann2 [Accessed August 13, 2010]. 79 There is no barrier in Scots law to prevent foreign lawyers representing a party in arbitration proceedings in Scotland. Generally, Scots law allows foreign lawyers to work in Scotland, provided that they do not describe themselves as “solicitors” and do not engage in certain types of work reserved for Scottish qualified solicitors pursuant to the Solicitors (Scotland) Act 1980. Indeed, the Scottish Act permits parties to an arbitration to be represented by “a lawyer or any other person” without including any restrictions on the jurisdiction in which the lawyer should be admitted (r.33 (default)). 80 Scottish Act, Sch.1, r.28 (default). 81 Scottish Act, Sch.1, r.45 (mandatory). 82 Scottish Act, Sch.1, r.45(2) (mandatory). 83 Under Scots law, if the party from whom recovery is sought does not consent to disclose the documents, the other party can request recovery pursuant to a “specification of documents” seeking “commission and diligence”; this process involves appointment of a special commissioner to recover the documents in question and file them with the court. Leading commentary emphasises that: “[a] call in a specification of documents will not be approved unless you have averred facts which lay a foundation for the recovery of the documents in question”: see Robert Black, Introduction to Written Pleading (Law Society of Scotland, 1982), 16. As summarised by Elizabeth Thornburg, “Detailed Fact Pleading: The Lessons of Scottish Civil Procedure” (2002) 36 The International Lawyer 1185, 1195: “[t]raditionally, the court’s power to order production of documents is limited to documents that would help a party prove a case she had already pleaded, and only then after proof [i.e., hearing] has been allowed (in other words, in cases in which the party has already survived challenges to the relevancy and specificity of the pleadings).“ 84 As cautioned by Lord Macphail, “[i]t is obviously necessary to guard against the granting of a fishing or speculative diligence for the recovery of documents which a party hopes will disclose material for a case he has not averred in his pleadings when he has no reason to believe that the documents exist or that there is any foundation for the unpleaded case” (Williamson v The Advocate General for Scotland 2006 SLT 611). See also Civil Service Building Society v MacDougall 1988 SC 58, 62, where Lord Justice Clerk Ross held that “[a] fishing diligence is one for which there is no basis in the averments or one which involves too wide a search among all the papers of the haver [i.e., the person with control of the documents]”; and Boyle v Glasgow Royal Infirmary and Associated Hospitals 1969 SC 72, 79, where Lord President Clyde defined a fishing diligence as “an attempt to recover documents in the hope that they will disclose material which will enable the party to make a case not yet averred on record.”

Favourable Environment for Arbitration international arbitrations related to the energy sector.90 In addition to Scotland’s abundance of fossil fuels,91 Scotland Thirdly, Scotland boasts a favourable environment for also has the potential to be a global leader in the provision arbitration. As noted above, traditionally the Scottish of renewable energy. Reports indicate that Scotland has: courts have been supportive of arbitration. The “25% of Europe’s wind resource, and even greater arbitration-friendly approach of the Scottish courts is proportions of its wave and tidal resources. There is also likely to intensify and consolidate under the Scottish Act an abundance of streams, rivers and lochs filled with which is founded on the principle of minimal court Scottish rainfall that can be used to generate hydropower, interference. surplus wood fuel reserves to supply fuel for electricity Scotland’s new arbitration regime also has unanimous 92 85 generation and heating”. Indeed, Scotland is now home political backing and the broad support of civil society. to the world’s largest tidal turbine.93 As climate change The Scottish Act was drafted following extensive concerns intensify and demands for renewable energy collaboration with key external institutions, such as the grow, Scotland’s specialisation in this area combined Scottish Branch of the Chartered Institute of Arbitrators, with its cutting-edge arbitration law will render it uniquely the Law Society of Scotland, the Scottish Faculty of placed to be the premier venue for international disputes Advocates and the Royal Institution of Chartered between commercial parties in the energy sector. Surveyors. Scottish Minister for Enterprise, Jim Mather, has hailed the Scottish Act as, “set[ting] the scene for a Attractive Location renaissance of Scottish arbitration”.86 It reflects the commitment of the Scottish Government, and all the Fourthly, Scotland is conveniently placed and easily political parties, to establish Scotland as a leading accessible for international travellers. It has excellent international centre for arbitration. Indeed, the Scottish transport links and boasts cosmopolitan cities that offer Government has expressed its interest in founding a a vibrant mix of history and culture, with all the requisite Scottish Arbitration Centre in a bid to improve Scotland’s amenities and facilities. prospects as an attractive location for international arbitration.87 Cost-Effectiveness Under this impetus, civil society has already galvanised in an effort to enlarge Scotland’s existing pool of qualified Finally, another factor which may put Scotland above its and proficient arbitrators. The Business Experts Law competitors is in terms of cost. Scotland offers a less Forum has recommended that the Law Society of Scotland expensive alternative to the other leading centres. It is and the Faculty of Advocates should encourage members estimated that arbitration in Scotland is around 40 per 88 cent of the cost of an equivalent arbitration in London or of the legal profession to train as arbitrators. Reports 94 indicate that more arbitrators are set to take up work in New York. This is borne out by a report released in July anticipation of a rise in arbitration in Scotland. For 2009, which ranks the leading locations for international arbitrations, such as Geneva, New York, Paris and example, in early 2009, the Scottish branch of the 95 Chartered Institute of Arbitrators established a new London, as among the most expensive cities to live in. section in the north of Scotland in anticipation of a rise This indicates that outlays and expenses in Scotland in Scottish-based arbitrations in the oil and gas sector, as would be significantly less expensive than in other a result of the passing of the Scottish Act.89 popular centres. Indeed, as noted at a recent international arbitration conference which focused on the Scottish Act, Scotland is particularly well placed to develop specialisation in

85 The Scottish Act has all-party support; Scottish Members of Parliament unanimously approved the final version of the Scottish Act after agreeing to minor technical changes in debate on February 18, 2009 (stage 3 debate). 86 Scottish Government Press Release, “Arbitration Bill passed by Parliament” (November 18, 2010), available at http://www.scotland.gov.uk/News/Releases/2009/11 /18154137 [Accessed August 13, 2010]. 87 The Scottish National Party (“SNP”) is currently the Scottish Government in Scotland’s devolved Parliament. See discussion of SNP’s 2007 Election Manifesto commitment to, “work with Scotland’s legal community to take forward plans to create a Scottish International Arbitration Centre” in Scottish Parliament Information Centre Briefing 09/14, February 27, 2009, p.7, available at http://www.scottish.parliament.uk/business/research/briefings-09/SB09-14.pdf [Accessed August 13, 2010]. 88 Report by the Business Experts and Law Forum (November 2008), para.3.2, available at http://www.scotland.gov.uk/Publications/2008/10/30105800/11 [Accessed August 13, 2010]. 89 Margaret Taylor, “Scottish Arbitrators expand in anticipation of new Bill” in The Lawyer, April 27, 2009. 90 Conference, “Arbitration (Scotland) Act 2010: A New Beginning,“ held at the University of Edinburgh on 23 June 2010; as reported in the Edinburgh Centre for Commercial Law Blog, 25 June 2010, available at http://www.law.ed.ac.uk/ecclblog/blogentry.aspx?blogentryref=8282 [Accessed August 13, 2010]. 91 For example, Scotland’s wealth of North Sea resources continues to be explored: see BBC News, “’Exceptional’ oil find made in North Sea by EnCore”, 28 June 2010, available at http://www.bbc.co.uk/news/10434538 [Accessed August 13, 2010] (reporting on an oil find in the North Sea off Aberdeen, in the Catcher oilfield, which has the potential to be one of the biggest discoveries of recent years). 92 Information provided by Scottish Renewables, the Forum for Scotland’s Renewable Energy Industry, comprised of companies and organisations working in the renewable field: http://www.scottishrenewables.com//default.aspx?documentid=a6064c40-26ff-4ef8-899d-815982fcbe00 [Accessed August 13, 2010]. 93 See ,“Largest tidal power device unveiled”, BBC News, 12 August 2010 available at http://www.bbc.co.uk/news/uk-scotland-highlands-islands-10942856 [Accessed August 13, 2010] and “World's largest tidal turbine unveiled”, The Guardian, 13 August 2010 http://www.guardian.co.uk/environment/2010/aug/13/world-largest-tidal -turbine [Accessed August 13, 2010] (reporting that the largest tidal turbine of its type to be built in the world has been unveiled in Scotland and will shortly be installed on the seabed in a European Marine Energy Centre test site off Orkney, Scotland). 94 Jim Mather, Scottish Minister for Enterprise, Energy and Tourism, “Forum of Choice?” (2010) 55(2) The Journal. 95 These statistics were compiled by Mercer Human Resource Consulting, Worldwide Cost of Living Survey 2009—City Ranking (July 2009), available at http://www.mercer .com [Accessed August 13, 2010].

Conclusion Scotland’s status as a competitor on the international arbitral scene is compounded by several advantages which The new Scottish arbitral regime represents a fundamental set Scotland apart from other jurisdictions. These include turning point for Scotland. The Scottish Act its mature and distinguished legal tradition, which is comprehensively overhauls the chaotic, anachronistic distinct from the English legal system and offers a mixed position that preceded it, creating a modern and dynamic civil-law/common-law culture and a neutral forum for system. international dispute-resolution. In addition, Scotland is In line with its English and Irish neighbours, Scots an English-speaking jurisdiction, which offers a arbitration law has a variety of features to commend it to favourable, supportive environment for arbitration, an those seeking a seat for arbitration. Scotland is an attractive location, and a cost-effective alternative to the arbitration-friendly jurisdiction, which provides for other leading centres. arbitration based on Model-Law principles and The Scottish Act represents a significant step in the enforcement of arbitral awards in accordance with the right direction to establish Scotland as a popular global New York Convention. But Scotland offers more. Its new venue for arbitration. Of course, much will now depend arbitral regime is streamlined and efficient, with a focus on the operation of the Scottish Act in practice. The onus on party autonomy, procedural flexibility and will now be on Scottish practitioners, arbitrators and non-interference by the courts. It was developed following courts to lead the way in demonstrating the efficiency of an extensive consultation process, which allowed Scotland Scotland’s arbitral regime. Civil society also has a role to incorporate the best features of international practice. to play. The establishment of a Scottish International The Scottish Act also draws on the English experience, Arbitration Centre would confirm Scotland’s genuine but seeks to rectify some of the uncertainties and commitment to the arbitral process. Scottish commercial omissions in England’s arbitral regime, which have actors should also take the initiative by selecting become apparent in practice. Accordingly, Scotland now arbitration seated in Scotland as their dispute-resolution boasts one of the world’s most progressive arbitral method of choice, particularly in transboundary contracts. regimes, which includes a host of innovative features, Once Scotland begins to establish its credentials as a such as a distinctive, accessible format; the creation of cost-effective and streamlined venue for arbitration, this arbitral appointment referees; a streamlined amendment will place Scotland on the map as a serious contender as process; and inclusion of an express default confidentiality a neutral arbitral forum and allow Scotland to realise its obligation and broad immunity provisions. global potential.