Question

1. In Arbitration what is meant by a “stay in proceedings”?

2. Why is an arbitration agreement deemed a contract?

Answer 1

Arbitration is a form of dispute resolution which is private and judicial determination of a dispute by an independent third party.Arbitration begins with an agreement, made either when a contract is made, or after a dispute has arisen, between the two parties will be resolved by submitting them to arbitration and not at least in the first instance to the courts.In that agreement it is generally stated that the parties will honour the valid award of the arbitrator in respect of matters reffered to him in accordance with that arbitration agreement. If a party fails to honour the award, then the other part may still seek relief from the courts.

Stay of court proceedings may be descibed as one party may refer the dispute to the court initially so the other party look like they have lost the right to arbitrate but actually the other party still has an option to refer the dispute to arbitration. Therefore the legal action initiated by clamiant would be stayed temporarily awaiting the arbitration and will continue after award is made. This is to avoid large quantity of proceedings at one time.