Litigation & Dispute Resolution - Appleby

Appleby
Guernsey
implemented in Guernsey under an extension of the Arbitration (International Investment Disputes)
Act 1966.
The primary source of domestic arbitration law in Guernsey is statutory, being the Arbitration
(Guernsey) Law, 1982. This law deals with both domestic arbitration proceedings as well as the
enforcement of certain foreign arbitration awards. In addition, the (English) Arbitration (International
Investment Disputes) Act 1966 has been incorporated into domestic Guernsey law by the Arbitration
(International Investment Disputes) (Guernsey) Order 1968.
There are provisions within the Arbitration (Guernsey) Law, 1982 which permit a party to apply to the
Royal Court for a stay of Court proceedings where there is an agreement to arbitrate a dispute between
the parties. Such an application must be made before the party delivers pleadings or takes any other
steps in the Court proceedings.
A domestic arbitration award will be enforced in the same manner as a Royal Court judgment.
However, leave of the Court must first be sought in order to enforce it in such a manner. Foreign
arbitration awards may also be enforced under procedures set out within the Arbitration (Guernsey)
Law, 1982. The Royal Court is likely to look favourably on enforcing arbitration awards as it generally
seeks to encourage alternative dispute resolution.
Guernsey continues to see a relatively steady flow of disputes being referred to arbitration across a
number of different types of dispute. Over recent years, a number of disputes have entailed some
form of reference to the Royal Court for determination of particular issues, but this has not been
particularly common. Further, recently the legislature of the Island has tacitly endorsed arbitration
as an important form of dispute resolution following the enactment of the Trusts (Guernsey) Law,
2007, which contains provisions which specifically provide for the arbitration of trust disputes. Such
provisions are not often found in the trust legislation of different jurisdictions.
Being a financial centre, and in particular an important jurisdiction for investment funds, insurance, the
fiduciary sector, banking and asset management, there are a considerable number of legal agreements
concluded each year under Guernsey law and/or involving Guernsey entities. An appreciable
proportion of these agreements will include provisions to refer disputes to arbitration (although the
proportion does tend to vary on an industry-specific basis). Accordingly, arbitration appears set to
continue as an important form of dispute resolution within Guernsey, for which there is a good level
of recognition and support, both through the legislature, judicially and through industry.
The most prominent arbitral institution is the Channel Islands branch of the Chartered Institute
of Arbitrators. However, there are a wide range of institutions which are commonly identified in
arbitration agreements as the party which will choose and appoint the arbitrator for a reference under
that agreement. Often arbitration agreements will not contain extensive provisions for the rules,
language, fee structure and similar of a reference and therefore parties often conduct references
adopting rules of their own agreement or rules produced by an external arbitral institution.
Mediation and ADR
The Royal Court has a duty under the Royal Court Civil Rules to actively manage cases which includes
encouraging the parties to use any appropriate form of alternative dispute resolution. Mediation is
a frequently used method of alternative dispute resolution with both locally based mediators and
mediators from alternative jurisdictions, particularly England, being used regularly. The Royal
Court’s duty extends to facilitating the use of ADR. Accordingly, civil proceedings will often be
stayed to allow the parties to mediate, where such a course may lead to settlement. It should be noted,
however, that under the Guernsey doctrine of peremption, further proceedings may be barred a year
and a day after the last step taken in the proceedings, unless the Court exercises its discretion to restore
the matter to the list. A recent pilot scheme encouraging mediation for publicly funded non-family
disputes was deemed a success and has been maintained.
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