Ireland is legally well-equipped to prosper as a seat for international arbitration: it offers a familiar applicable law based on the 2006 UNCITRAL Model Law (i.e., the Irish Arbitration Act 2010), a court system supportive of arbitration, an English-speaking, common law legal system similar to that of England and, as a signatory to the New York Convention, reciprocal enforcement of Irish-seated arbitral awards around the globe.
Below, we discuss issues related to an international commercial arbitration in Ireland, i.e., the applicable arbitration law, arbitrability, the arbitration agreement, the arbitral tribunal, the arbitral procedure, the arbitration costs, interest, challenges to arbitral awards, as well as the recognition and enforcement of arbitral awards.
Irish Arbitration Law
Arbitration in Ireland is governed by the Irish Arbitration Act 2010 (the “2010 Act”), which came into force on 8 June 2010 and repealed, in their entirety, the previous versions of the Acts of 1998, 1980 and 1954 (2010 Act, Section 4). The 2010 Act applies to all arbitrations, both domestic and international, commencing on or after 8 June 2010 (2010 Act, Sections 1(2) and 3). It comprises three Parts with a total of 32 Sections (Articles) and six Schedules.
The 2010 Act adopts the 2006 UNCITRAL Model Law, which is attached in its entirety as Schedule 1 to the 2010 Act (the “(2006) Model Law”). The 2006 Model Law (which is a blueprint for governments to follow when enacting legislation) is thus given the force of law in Ireland, subject to certain amendments introduced by the 2010 Act, such as that the default number of arbitrators is one (2010 Act, Section 13), instead of three (2006 Model Law, Article 10(2)).
The 2010 Act also contains additional provisions relating to specific aspects of the arbitral procedure which are not found in the 2006 Model Law, such as Section 28, which provides that the 2010 Act applies to an arbitration agreement to which a State authority is a party, as well as Section 27, which provides that an arbitration agreement will not be “defeated” by the bankruptcy of a party, but will generally be enforceable by or against the assignee or trustee in bankruptcy.
The 2010 Act also restates that effect is given to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) (attached as Schedule 2), the 1965 Washington Convention on the Settlement of Investment Disputes (attached as Schedule 3), the 1927 Geneva Convention on the Execution of Foreign Arbitral Awards (attached as Schedule 4) and the 1923 Geneva Protocol on Arbitration Clauses (attached as Schedule 5). Schedule 6 contains the Consequential Amendments to Other Acts.
Notably, the 2010 Act also designates a single judge of the Irish High Court to hear and determine arbitration-related cases, i.e., the President of the High Court or such other High Court judge nominated by the President (2010 Act, Section 9).
Section 30 (Exclusion of certain arbitrations) of the 2010 Act provides that the 2010 Act does not apply to:
- certain employment disputes, concerning “terms or conditions of employment or the remuneration of any employees, including persons employed by or under the State or local authorities”);
- an arbitration under section 70 of the Industrial Relations Act 1946 (concerning certain trade disputes);
- an arbitration conducted by a property arbitrator appointed under section 2 of the Property Values (Arbitration and Appeals) Act 1960.
The 2010 Act is also not applicable to consumer disputes where the arbitration clause is not individually negotiated and which are worth less than EUR 5,000, unless the parties agree otherwise after the dispute has arisen (2010 Act, Section 31).
Section 20 of the 2010 Act also contains an indirect restriction on arbitrability, by providing that an arbitral tribunal has the power to make an award requiring specific performance of a contract, other than “a contract for the sale of land”.
Section 2 of the 2010 Act provides that an “arbitration agreement” shall be construed in accordance with Option I of Article 7 of the 2006 Model Law (instead of Option II, which merely defines an arbitration agreement, without specifying its form requirements, i.e., that it shall be in writing). Option I specifies that an arbitration agreement shall be in writing (thus clearly adheres to the “in writing” requirement of Article II of the New York Convention), yet recognizes, in line with modern practice, that an arbitration agreement is in writing “if its content is recorded in any form”, including the exchange of electronic communications.
The doctrine of separability of an arbitration clause is set out in Article 16(1) of the 2006 Model law, which provides that “an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract.”
The doctrine of separability has also been recognised by Irish courts (see, e.g., Doyle v National Irish Insurance Co plc  IEHC 13, and, more recently, Barnmore Demolition and Civil Engineering Limited v. Alandale Logistics Limited & ors  No. 5910P).
Whether a non-signatory is bound by an arbitration agreement is a complex issue that turns on the facts of a case and normally revolves around the question of whether the non-signatory is deemed to have consented to arbitration (for instance, by operation of agency, assignment or the group of companies doctrine). The circumstances under which a non-signatory may be deemed to be a party to an arbitration agreement are not specified in the 2010 Act or the 2006 Model Law. The question of whether a non-signatory has consented to arbitration is thus governed by Irish contract law, which is very similar to English law.
– Breach of Arbitration Agreement: Level of Scrutiny by Irish Courts
Article 8(1) of the 2006 Model Law provides that where a party commences court proceedings, despite the existence of an arbitration clause, the court “shall”, if requested no later than the submission of the party’s first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is “null and void, inoperative or incapable of being performed.”
In Go Code Ltd. v. Capita Business Services Ltd.  I.E.H.C. 673 (concerning an application for a stay of court proceedings in favour of arbitration), the Irish High Court held that, when there is no evidence of a null arbitration agreement, Article 8 of the Model Law does not confer any discretion on whether or not to stay proceedings, but instead “the court is obliged to stay the proceedings” (para. 17). A pro-arbitration stance of Irish jurisprudence is evident in this case.
There has been a debate in Irish jurisprudence (and in general) about the appropriate standard of review when ruling on stay applications, i.e., whether a prima facie or full review shall be adopted by a court when determining the existence of an arbitration agreement. For instance, in Barnmore Demolition and Civil Engineering Limited v. Alandale Logistics Limited & ors  No. 5910P, the Irish High Court did not make a ruling as to the proper standard, even though it observed that there is a “particularly strong case” that the courts should give full judicial consideration, and not just a prima facie review, of whether an arbitration agreement exists (paras. 8-9).
The debate was recognized and resolved by Lisheen Mine v Mullock and Sons (Shipbrokers) Ltd  IEHC 50 (paras. 114-135), in which case the Irish High Court conclusively held that “the more appropriate approach for a court to follow is to give full judicial consideration to the issue as to whether there is an arbitration agreement between the parties”, on the basis that a prima facie review would leave the matter open to be re-argued before the tribunal and potentially again before the courts, which is “entirely wasteful of costs” and not “in the interests of proper case management” and because this is a legal question “best decided by a court” (para. 135). Thereafter, Irish courts appear to have followed the approach taken in Lisheen, in favour of the “full judicial consideration” standard (see, e.g., Bowen Construction Ltd v Kellys of Fantane Concrete Ltd  IEHC 861, para. 75).
– Number of Arbitrators
Section 13 of the 2010 Act provides that, unless the parties otherwise agree, “the arbitral tribunal shall consist of one arbitrator only”, thus displacing Article 10(2) of the 2006 Model Law which provides that the default number of arbitrators shall be three. This provision reflects the longstanding practice in Ireland for a sole arbitrator to be appointed, whilst promoting efficiency and reducing costs.
– Constitution of Arbitral Tribunal
The parties are free to agree on the procedure for the constitution of the arbitral tribunal. Absent an agreement, the default rules of Article 11 of the 2006 Model Law apply, depending on whether there are three arbitrators (in which case, each party appoints one arbitrator and the two so appointed then appoint the presiding arbitrator) or a sole arbitrator (in which case, the parties shall agree on an individual).
If the parties cannot agree on a sole arbitrator, the default appointing authority is the Irish High Court, whose decision cannot be appealed (2006 Model Law, Article 11(3)(b); 2010 Act, Section 9).
– Qualifications of Arbitrators
The 2010 Act does not specify any formal qualifications that an arbitrator must possess. The parties are free to agree on certain qualifications that a prospective arbitrator must have, such as expertise in a particular national law or industry (for instance, construction). Article 11(1) of the 2006 Model Law also provides in this respect that no person can be precluded from acting as an arbitrator because of his or her nationality, unless the parties agree otherwise.
– Challenge of Arbitrators
An arbitrator can be challenged only if circumstances exist that give rise to “justifiable doubts” as to their impartiality or independence, or if they do not possess qualifications agreed to by the parties (2006 Model Law, Article 12) under the procedure specified in Article 13 of the 2006 Model Law.
– Doctrine of “Competence-Competence”
Article 16 of the 2006 Model Law gives effect to the doctrine of “competence-competence”, which provides that the arbitral tribunal can rule on its own jurisdiction, including on any objections relating to the existence or validity of an arbitration agreement, either as a preliminary question or as part of an award on the merits.
If the arbitral tribunal rules that it has jurisdiction as a preliminary question, a party can request the matter to be referred to the High Court within 30 days of having received notice of that ruling (2006 Model Law, Article 16(3); 2010 Act, Section 9). In Bowen Construction Ltd v Kellys of Fantane Concrete Ltd  IEHC 861, the High Court clarified that a referral under Article 16(3) of the 2006 Model Law merits a “full judicial consideration” (not just a prima facie review) and it does not operate as an “appeal” or “review” of the arbitral tribunal’s decision on jurisdiction (para. 74).
Also, an objection that the arbitral tribunal does not have jurisdiction must be raised no later than the submission of the statement of defence (2006 Model Law, Article 16(2)).
– Immunity of Arbitrators
Section 22 of the 2010 Act provides that an arbitrator shall not be liable in any proceedings for anything done or omitted in the discharge or purported discharge of his or her functions.
– Due Process
The parties are free to adopt any procedural rules they wish, provided that parties are treated with equality and are given a full opportunity to present their case (2006 Model Law, Article 18 and Article 19).
Ireland does not appear to have an arbitration institution (i.e., an institution which administers arbitrations and publishes its arbitration rules), such as the LCIA in England, for instance.
Whilst not an arbitral institution, Arbitration Ireland is a noteworthy association of major law firms, the Bar of Ireland, the Law Society of Ireland, Chambers Ireland, the Irish Branch of Chartered Institute of Arbitrators (CIArb), Engineers Ireland and individual practitioners, whose aim is to promote Ireland, and Dublin in particular, as a seat and venue for international arbitration, by, inter alia, hosting regular seminars and conferences with prominent practitioners.
– Commencement of Arbitration
Section 7 of the 2010 Act provides that arbitral proceedings commence on the date on which the parties to an arbitration agreement agree as being the commencement date or, where no date has been agreed (as is usually the case in practice), the date on which a written communication containing a request for the dispute to be referred to arbitration is received by the respondent (for more information, please refer to our article on How to Initiate International Arbitration).
The commencement date of an arbitration is relevant to the limitation periods which apply to the underlying claims, under the applicable law on the substance of the dispute. For instance, if Irish law is applicable on the merits, the limitation periods are governed by the Statute of Limitations Act 1957 (as amended) and depend on the nature of the dispute, which for contract law is generally six years from the date of the commencement or accrual of the cause of action (Limitations Act 1957, Section 11).
– Seat of Arbitration
Article 20 of the 2006 Model Law provides that where the parties agree on the arbitral seat, their choice must be followed, and in the absence of an agreed seat, the arbitral tribunal must determine the arbitral seat having regard to the circumstances of the case, including the convenience of the parties. The 2010 Act does not contain any further provision on the seat of an arbitration.
– Consolidation of Arbitrations
Section 16(1) of the 2010 Act provides that the parties to an arbitration agreement may agree that arbitral proceedings shall be consolidated with other arbitral proceedings and that concurrent hearings shall be held on such terms as may be agreed.
Section 16(2) of the 2010 Act provides that the arbitral tribunal has no power to order the consolidation of proceedings or concurrent hearings unless the parties agree to confer such power upon the tribunal.
The parties will be deemed to have agreed to confer such power upon the tribunal if they have agreed, normally in their arbitration clause, to conduct their arbitration under certain institutional rules, which, in turn, confer to a tribunal the power to consolidate arbitrations (for instance, Article 22.7 of the 2020 LCIA Arbitration Rules).
Section 14 of the 2010 Act allows the examination of witnesses on oath or affirmation, unless the parties agree otherwise.
Section 15 of the 2010 Act, read in conjunction with Article 27 of the 2006 Model Law, extends the High Court’s power to assist a party in taking evidence located in Ireland in aid of a foreign arbitration.
– Cost Allocation
Section 21 of the 2010 Act deals with the recoverability of costs, fees and expenses of a tribunal. There are generally two internationally accepted principles for allocating costs, i.e., the English “costs should follow the event” rule, which requires the losing party to bear the successful party’s costs, and tends to prevail in international commercial arbitrations, and the American “costs lie where they fall” rule, which requires parties to bear their own costs and is more often adopted by investment tribunals.
The 2010 Act does not adopt a position on which rule should be preferred, unlike, for instance, Section 61(2) of the English Arbitration Act 1996, which specifies that “the tribunal shall award costs on the general principle that costs should follow the event”, as is the norm in English and Irish civil litigation.
Section 21(1) of the 2010 Act merely provides that parties are free to “make such provision as to the costs of the arbitration as they see fit.” In practice, it is not uncommon for international arbitration clauses to provide that the parties shall bear their own arbitration costs. However, an arbitration clause in a consumer contract providing that each party shall bear its own costs will be deemed unfair (2010 Act, Section 21(6)).
Section 21(2) of the 2010 Act then clarifies that an agreement of the parties to arbitrate their dispute under the rules of an arbitration institution “shall be deemed to be an agreement to abide by the rules of that institution as to the costs of the arbitration.” In practice, this means that if the parties agree to conduct their arbitration, for instance, under the 2020 LCIA Arbitration Rules, they will be bound by Article 28.4 of those Rules, which creates a presumption in favour of the “costs should follow the event” rule, requiring the costs to be borne by the losing party.
– Security for Costs
Section 19 of the 2010 Acts empowers an arbitral tribunal to order a party to provide security for the costs of the arbitration.
Section 10 of the 2010 Act also specifically prohibits the High Court from making orders for security for costs when exercising its powers under Article 9 of the 2006 Model Law (which allows the High Court to take interim measures of protection before or during an arbitration), meaning that any such applications must be made to the arbitral tribunal. This provision seeks to ensure that there will be no parallel court and arbitral proceedings regarding the issue of security of costs.
The 2006 Model Law does not deal with interest. Section 18 of the 2010 Act thus supplements the 2006 Model Law by giving broad discretion to the arbitral tribunal to award simple or compound interest from the dates, at the rates and with the rests that it considers fair and reasonable.
Section 18 of the 2010 Act essentially mirrors Section 49 (Interest) of the English Arbitration Act 1996.
Challenges of Arbitral Awards
An Irish arbitral award cannot be challenged on the merits (i.e., on findings of fact) or for an error of law (unlike English arbitrations, for instance, where an appeal is permitted for a question of law under Section 69 of the English Arbitration Act 1996).
A party can apply to the High Court to have an award set aside if it provides proof that one of the limited grounds set out in Article 34(2) of the 2006 Model Law is met (i.e., invalid arbitration agreement, non-arbitrable subject matter, award contrary to public policy, amongst others).
Article 34(3) of the Model Law provides for a three-month deadline for making a set-aside application, which starts to run from the date that the party making an application has received the award.
However, Section 12 of the 2010 Act provides that an application to the High Court to set aside an award on grounds of public policy shall be made within 56 days from the date on which the circumstances giving rise to the application became known or ought reasonably to have become known to the party concerned.
Recognition and Enforcement of Arbitral Awards
An award made by an arbitral tribunal will be enforceable in Ireland either by action or by leave of the High Court, in the same manner as a judgment or order of that court and with the same effect (2010 Act, Section 23).
The limitation period for the enforcement of an arbitration award is six years from the date of the accrual of the cause of action, unless the arbitration agreement is under seal in which case it is twelve years (Statute of Limitations Act 1957 (as amended), Section 11(1)(d) and 5(b); see also our guide on the Limitation Periods for Enforcement of Foreign Arbitration Awards).
The limited grounds for resisting the recognition and enforcement of an arbitral award, which mirror the grounds for setting aside an award, are set out in Article 36 of the Model Law. However, Article 35 and Article 36 of the Model Law, which relate to the recognition and enforcement of awards, do not apply to awards rendered in Ireland (2010 Act, Section 23(4)). This means that for an award rendered in Ireland, the sole remedy for a dissatisfied party is to seek to set aside the award under Article 34 of the Model Law.
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In sum, international arbitrations in Ireland are governed by the Arbitration Act 2010, which has adopted the 2006 UNCITRAL Model Law, subject to certain welcome amendments and additions introduced by the 2010 Act, such as that the default number of arbitrators shall be one. The familiar applicable law, coupled with Irish jurisprudence supportive of international arbitration, which is readily accessible online and in English, as well as its common law legal system mirroring English law, renders Ireland a place worth seriously considering as a seat for international arbitrations.