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Arbitration is now the Scottish government’s default resolution mechanism for contractual disputes

Last week the Scottish Government has announced that arbitration is now the default resolution mechanism for contractual disputes. Roseanna Cunningham, Minister for Community Safety and Legal Affairs, said that a clause providing for disputes to go to arbitration, with the Scottish Arbitration Centre as appointing body when required, will be the Government’s default position. According to Ms Cunningham, “Arbitration can play an important role in meeting the needs of businesses, their customers and their employees in finding cost-effective resolution to complex issues”.

Apparently Scotland is also quite interested in joining the ‘battle of the seats’. “There is a fantastic level of expertise within Scotland’s legal community in arbitration, and we want to capitalise on this to make Scotland a world leader in the lucrative arbitration market. We have been determined in our commitment to provide businesses and lawyers with the infrastructure they need to make Scotland an international centre for arbitration and enhance this country’s global competitiveness. As part of our efforts, this Government is actively inserting Scottish arbitration clauses in all Scottish Government contracts”, Ms Cunningham said. Read more here.

Many jurisdictions, interested in attracting arbitration proceedings, have taken different measures so as to be perceived by the business community as ‘arbitration friendly’. Government support is crucial to erect a successful arbitration hub and to obtain the benefits that ensue. The market of international arbitration is not only appealing due to its economic impact but also, and perhaps even more, because of the reputation associated with hosting international arbitrations. Governments worldwide recognise that hosting international arbitrations is not only a way to attract business but also to build prestige.

Normally governments strive to enlarge their share in the market of international arbitration by following two different strategies. The first and foremost is legal reform. The quality of the legal infrastructure and the predictability of its laws are essential for a jurisdiction to attract international arbitrations. Besides providing for an efficient legislative framework for international arbitration, governments also direct their attention to other measures in promoting their jurisdictions as arbitration hubs. In fact, governments can offer a high level of support to the local arbitral institutions and practitioners. Some governments have expressed their interest in the arbitration industry not only by revamping their legal framework but also by trying to market their allegedly good services to the arbitration community around the world.


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