ARBITRATION OR COURT SETTLEMENT….THE CHOICE IS YOURS, BUT….
By Dickson Jere
But why go to Arbitration instead of Court? This is a question that was posed to me yesterday. For starters – the law recognises that grown-up people (even companies) can agree by way of contract as to who should resolve their disputes. They can even agree to oust the jurisdiction of the courts and prefer arbitration via an Arbitration Agreement in the contract.
You see, the choice is yours. You can agree to have contract that does not have an Arbitration Clause and allow the Courts in Zambia to have jurisdiction over the dispute. However, it is becoming increasingly attractive in commercial transactions to refer disputes to arbitration.
This is now a worldwide phenomenon. Section 10 of the Arbitration Act of Zambia provides that a matter that is subject to arbitration but filed in the High Court must be stayed and referred to arbitration at the request of any of the parties.
But why Arbitration?
Arbitration is faster unlike the courts of law. But importantly is that arbitration process is done in private and not open to the public unlike court. So the disputes are resolved quietly and only the parties know the outcome – most of the times.
The parties can also agree in advance as to who should be Arbitrators in case of dispute unlike the courts of law where a judge is imposed on the parties. In arbitration, parties can agree to pick an expert in the field of the dispute – like a former banker to arbitrate in a banking dispute. You can agree that the dispute should be dealt with by a single or three Arbitrators. You have a choice in the composition of the Arbitration Panel unlike the court of law.
Where will be Arbitration ?
Again, the parties agree beforehand where arbitration should take place. Whether in Zambia or abroad. You also agree which law should be applicable to the dispute and including the language to be used. The Chinese usually love to insist on Chinese Arbitration with use of Chinese language in case of dispute.
The downside to arbitration is that you pay the Arbitrators unlike courts where judges are paid by the state. Sometimes it can be costly!
The law in Zambia, however, proscribes certain matters from being taken to Arbitration. These include, criminal matters, public policy, issues to do with paternity, maternity or parentage, and matrimonial causes proceedings such as divorce. These are not subject of arbitration even if the parties agree.