Contributed By The Scottish Arbitration Centre
Arbitration has a long history in Scotland, with written references to arbitration in Scotland dating back to the 13th century. Arbitration tended to be used for domestic construction and property cases and partnership disputes, but was not widely used in the broader commercial sphere due to dissatisfaction with the relevant law which was not well maintained.
This all changed with the introduction of the Arbitration (Scotland) Act 2010 and arbitration is now accepted as a method of alternative dispute resolution. The Act is not based on the UNCITRAL Model Law on International Commercial Arbitration but instead, subject to a number of modifications, follows the approach of the Arbitration Act 1996 of England and Wales. This means there is much authority that can be used as an aid to interpretation of the Act and one would expect that the Scottish courts will follow the approach adopted by the English courts in respect of the equivalent provision of the 1996 Act, unless there is a good reason not to take that approach.
With the introduction of the 2010 Act, Scotland now has one of the most modern systems of arbitration in the world.
Arbitration clauses are being written into international and government contracts more regularly, particularly those concerned with oil and gas, and renewable energy.
The Arbitration (Scotland) Act 2010 is now established, with practitioners and commercial entities more used to the regime. There has been increasing adoption of arbitration clauses into commercial contracts, including in the energy sector, and work continues to increase and develop this trend.
COVID-19 and the related lockdown have impacted on the business of the Scottish Courts, which has provided an opportunity to promote the flexible nature of arbitration and the use of online platforms for dispute resolution.
Anecdotal evidence continues to suggest an upturn in the use of arbitration under the Scottish Act in international arbitration clauses in the energy sector, including upstream oil and gas, and renewable energy contracts. Arbitration is now the default dispute mechanism in the SBCC (Scottish standard form) building contracts.
This follows efforts by various parties – including the Scottish and UK governments, the Scottish Arbitration Centre and the International Centre for Energy and the Scottish profession – to promote Scotland as a suitable seat for energy dispute resolution due to of the considerable technical and legal expertise in energy clustered in Scotland.
Arbitration is now the default dispute mechanism in the SBCC (Scottish standard form) building contracts.
The COVID-19 pandemic has not had a discernible impact upon international arbitration levels in Scotland.
The ICC and the LCIA are commonly specified in international contracts. Increasingly, the Scottish Arbitration Centre is being specified for ad hoc arbitration appointments. The 2010 act is compatible with the rules of the major arbitral institutions allowing parties to specify Scotland, or Scottish places, as the seat of arbitration.
No new arbitral institutions have been established in Scotland in 2020-21.
The founding principles set out in Section 1 of the Arbitration (Scotland) Act 2010 “that the court should not intervene in an arbitration except as provided by this Act”. Section 13 of the Act provides for court intervention in arbitrations and sets out that legal proceedings are competent in respect of a tribunal’s award, or any other act or omission by a tribunal when conducting an arbitration, in each case only as provided for in the Scottish Arbitration Rules (in so far as they apply to that arbitration) or in any other provision in the Act. In particular, a tribunal’s award is not subject to review or appeal in any legal proceedings except as provided for in Part 8 of the Scottish Arbitration Rules.
In such cases as set out above, the Act designates the Scottish Commercial Courts as the competent courts in disputes related to international and domestic arbitrations. The Commercial Court judges are also the arbitration judges. The Scottish Courts and Tribunals Services (SCTS) have developed specific rules on arbitration, which are contained in chapter 100 of the Court of Session Rules.
Furthermore, SCTS set up the Arbitration Court User Group in 2017 to provide a forum for consultation, discussion and feedback between judges, legal professionals and others involved in arbitration matters in Scottish courts. This ensures that the Court engages with arbitration practitioners and supports arbitration in Scotland.
International arbitration in Scotland is governed by the Arbitration (Scotland) Act 2010 (which also governs domestic arbitration). The Act is similar to the Arbitration Act of 1996 applicable in England and Wales, subject to some modifications, and those used to this act will be comfortable with the 2010 act. It would be reasonable to assume that the Scottish courts will follow a similar approach as the English courts in respect of the equivalent provision of the 1996 Act, unless there is a good reason not to do so, meaning there is a good amount of authority despite the 2010 act being reasonably new.
The UNCITRAL Model Law has not been directly adopted in Scotland, but the Act follows the principles of the Model Law.
No changes are currently pending and there are no current proposals to reform the Arbitration (Scotland) Act 2010. Having said that, the legislation has not yet been implemented in full as the provisions relating to statutory arbitration have not yet been brought into force.
There are no special legal requirements for an arbitration agreement to be enforceable in Scotland.
Generally, the principle in Scotland is that anything that is capable of agreement is capable of being referred to arbitration. Therefore, there is no list of matters defining those that are capable of being arbitrated, nor is there any list of matters that cannot be arbitrated.
Matters of criminal law and public law are not arbitrable, nor are matters of personal status. Therefore, matters such as divorce cannot be referred to arbitration; however, certain matters such as financial provision on divorce and access arrangements for children can be arbitrated.
To be arbitrable, a dispute must be capable of sounding in money or obligation, which is to say there must be a practical effect, and matters that will not impact on parties' rights are not arbitrable.
The Scottish courts uphold the Act, Section 6 of which states that “where (a) the parties to an arbitration agreement agree that an arbitration under that agreement is to be seated in Scotland, but (b) the arbitration agreement does not specify the law which is to govern it, then, unless the parties otherwise agree, the arbitration agreement is to be governed by Scots law.” The uncertainty that arose in the Enka v Chubb case would not therefore have arisen had the case been seated in Scotland.
The Scottish courts continue to be highly supportive of arbitration under the 2010 Act. If proceedings are brought in court despite the existence of the arbitration agreement, the court will put the proceedings on hold and enforce the arbitration agreement as long as the parties have not delayed in relying upon the agreement and have not acted as though they do not wish to insist upon the arbitration agreement, by, for example, lodging a response to the substance of the proceedings.
The Arbitration Court User Group has been developed and established to provide a forum for consultation, discussion and feedback between judges, legal professionals and others involved in arbitration matters in Scotland. In due course, the group may be able to offer views on the operation and effectiveness of the Arbitration (Scotland) Act 2010.
Section 5 of the 2010 Act provides that an arbitration agreement that forms or was intended to form part of an agreement is to be treated as a distinct agreement and that an arbitration agreement is not void, voidable or otherwise unenforceable because the agreement of which it forms part is invalid.
The validity of the agreement of which the arbitration agreement forms part may be arbitrated in accordance with the arbitration agreement.
A dispute as to the validity of an agreement which contains the arbitration agreement may then be arbitrated in accordance with said arbitration agreement.
The arbitrator must be a natural person, as opposed to a corporate entity, and must be of legal age and capacity (16 years old or more). The person must not be an incapable adult within the meaning of Section 1(6) of the Adults with Incapacity (Scotland) Act 2000. Other than this, there are no limits on the parties’ autonomy to select arbitrators in Scotland.
If the parties’ chosen method for selecting arbitrators fails, unless parties have agreed otherwise either party can apply to one of the statutory arbitral appointment referees (AAR). These include the Agricultural Industries Confederation, the Chartered Institute of Arbitrators, the Dean of the Faculty of Advocates, the Institution of Civil Engineers, the Law Society of Scotland, the Royal Incorporation of Architects in Scotland, the Royal Institution of Chartered Surveyors and the Scottish Agricultural Arbiters and Valuers Association.
The procedure is that the referring party gives notice of their intention to go to an AAR. The other party may object to an AAR appointment within seven days. If the party fails to object or waives that right, the AAR may make the necessary appointment.
If one of the parties does object to the use of an AAR or the AAR fails to make an appointment within 21 days, the court may make the necessary appointment.
The AAR (or the court, as the case may be) must have regard to the nature and subject matter of the dispute, the terms of the arbitration agreement (including, in particular, any terms relating to the appointment of arbitrators) and the skills, qualifications, knowledge and experience that would make an individual suitable to determine the dispute.
There is a default procedure for the appointment of arbitrators, which applies where there are two or more parties. Rule 6 provides the method of appointment and Rule 7 determines what happens if the method of appointment fails.
The court can intervene upon the application of any party. The court may remove an arbitrator if it is satisfied that the arbitrator is not impartial or independent, has not treated the parties fairly, is incapable of acting as an arbitrator, does not have a qualification that the parties had agreed upon, or that a substantial injustice has been or will be caused to a party because the arbitrator failed to conduct the arbitration in accordance with the arbitration agreement, the applicable rules or any other agreement made by the parties relating to the conduct of the arbitration.
A party may object to the appointment of an arbitrator. This will only be competent if it is made on the ground that the arbitrator is neither impartial nor independent, has not treated the parties fairly or does not hold the qualification that the parties agreed that an arbitrator must have (such an agreement having been reached prior to the appointment).
The parties may, acting jointly, remove an arbitrator and an arbitrator may also be removed by a third party to whom the parties have given that power (such as an arbitral institution).
Arbitrators, prospective arbitrators and any appointing body are bound to disclose to the parties any circumstances known to them (or that becomes known to them) that might reasonably be considered relevant when considering whether the individual is impartial and independent.
Matters of criminal law and public law are not arbitrable, nor are matters of personal status. Accordingly, matters such as divorce cannot be referred to arbitration.
The tribunal has the power to rule on its own jurisdiction. The tribunal may also rule whether there is a valid arbitration agreement, whether the tribunal is properly constituted and whether matters have been submitted to arbitration in accordance with the arbitration agreement.
The parties may object to the tribunal on the ground that it does not have jurisdiction or has exceeded its jurisdiction. Such objections have to be made before or as soon as is reasonably practicable after the jurisdiction issue is first raised, subject to the tribunal’s right to extend this on cause shown.
The tribunal can rule on the jurisdiction point independently from the subject matter of the dispute and can defer its ruling on jurisdiction until it makes its ruling on the merits, but if the parties agree on which of these courses it should take the tribunal must abide by that decision.
A party may appeal to the court against the tribunal’s ruling on a jurisdictional challenge no later than 14 days after the tribunal’s ruling. The tribunal can continue to deal with the arbitration while the appeal is pending.
Alternatively, the parties may bypass the tribunal and make a direct application to the court on a jurisdictional point. This is only allowed if the parties agree that an application should be made or if the tribunal consents to the direct application and the court is satisfied that it should be dealt with. The tribunal can proceed with the arbitration while the appeal is pending.
The right to challenge the tribunal’s rule on jurisdiction may be challenged whether it is positive or negative.
A jurisdictional challenge can be made as soon as the arbitration has started. The right to appeal to the court against a ruling of the tribunal on its own jurisdiction is mandatory. However, the option to go directly to the court on a jurisdiction point is contained in a default rule and can therefore be excluded by agreement of the parties. A party who participates in an arbitration without making a timeous objection on the ground that the tribunal does not have jurisdiction may not raise the objection later before the tribunal or the court.
The approach of the courts in Scotland is to defer to the tribunal on questions of admissibility, as the 2010 act makes clear that admissibility is a matter for the tribunal.
On questions of jurisdiction, the court will look at the issue de novo.
The approach of the Scottish courts is that it is up to the responding party to plead an arbitration clause in response to proceedings brought in breach of an arbitration agreement. Bringing proceedings is not regarded as a "breach" of contract; rather, it is regarded as a procedural matter because the court retains ultimate jurisdiction.
The responding party has the right to have the matter arbitrated. Where there is a valid agreement to arbitration, the court will sist (stay) proceedings, but the responding party must plead that right before any substantive step is taken in response to the litigation. If appropriate, and if timely steps have not been taken, the responding party may be held to have waived the right to have the matter dealt with by arbitration.
The tribunal has no jurisdiction over individuals or entities that are neither a party to an arbitration agreement nor signatories to the contract containing the arbitration agreement.
It is possible, where all parties involved agree, to consolidate the arbitration proceedings with another arbitration.
The tribunal may grant relief on a provisional basis (which it has the power to grant permanently).
The tribunal may also direct any party to allow the tribunal, an expert or other party to inspect, photograph, preserve or take custody of any property that a party owns or possesses which is the subject of the arbitration, and preserve any document or other evidence that the party possesses or controls.
The courts take various measures to preserve evidence and generally preserve the status quo pending determination by the tribunal. Examples include the court’s power to grant an interim interdict (injunction) and orders to arrest funds or the grant of an inhibition (a charge that prevents the sale of property). If the arbitration has started, these measures can be taken with the consent of the tribunal or without consent in cases of urgency.
The default position is that the tribunal has the power to make an order for security for costs against a party making a claim in the arbitration, which may be the principal claim or a counterclaim. The order may include security for the tribunal's own fees and expenses. If an award for security of expenses is not complied with, the tribunal has the power to dismiss the claim.
The Scottish Arbitration Rules apply to all arbitrations seated in Scotland. They are to be found in Schedule 1 of the Arbitration (Scotland) Act 2010. Some of the rules are mandatory and are therefore effectively part of the law. Some rules have "default" status which can be deleted or amended by agreement.
The default position is that the procedure is a matter for the tribunal. However, it is open to the parties to adopt a defined procedure if that is their preference or incorporate rules that provide procedural steps and/or time limits.
There are no procedural steps required by the law. The default position is that procedure is a matter for the tribunal, in terms of Rule 28. Accordingly, there are no compulsory procedural steps, unless the parties agree otherwise.
The Arbitration (Scotland) Act 2010 confers a wide range of powers on arbitrators. The tribunal has the power to rule on its own jurisdiction and may award damages and interest. The tribunal also has the power to make interim and part awards.
The tribunal has the power to appoint a clerk, but must first seek the consent of the parties for such an appointment if significant expense is likely to be incurred. The tribunal also has the power to obtain an expert opinion on any matter arising in the arbitration.
The tribunal has the power to order a party to allow the inspection, recording and testing of property in the possession of that party which is the subject matter of or has a bearing on the arbitration.
As regards duties, the tribunal must be impartial and independent, treat the parties fairly and conduct the arbitration without unnecessary delay, without incurring unnecessary expense. An arbitrator has a duty to disclose any circumstances that might reasonably be considered relevant when considering whether the arbitrator is impartial and independent.
The default position under the Act is that the tribunal and the parties are bound by a duty of confidentiality and a breach of this duty is actionable.
There is no requirement to be legally qualified in Scotland or in any other jurisdiction, or to hold any particular qualification to represent a party in an arbitration in Scotland. Only a person aged sixteen or over is eligible to act as an arbitrator, and that person must not be an incapable adult within the meaning of Section 1(6) of the Adults with Incapacity (Scotland) Act 2000. In practice, Scottish arbitrators tend to belong to professional bodies. There is no requirement that an arbitrator be admitted to the Scottish bar or solicitor profession, and there is no restriction based on nationality.
Rule 45 gives the court power to order attendance of witnesses and disclosure of evidence.
Scottish arbitrators tend to adopt an approach similar to that used in the Scottish Commercial Courts as regards production, discovery, legal privilege, the use of witness statements and cross-examination. Generally, the approach in the Scottish courts is that the parties are expected to produce all documents on which they found their case. There is no general duty of disclosure other than to the extent that the tribunal (or court) orders disclosure. An arbitrator from Scotland is likely to be less inclined to grant open discovery than one from common law jurisdictions given there is no duty of disclosure in Scottish courts.
In general, an order for discovery is only granted to support a factual averment within the pleadings, not to recover documents in the hope that further factual averments can then be made (which is known as a "fishing diligence").
Even where documents are otherwise recoverable on relevancy grounds, parties can claim confidentiality on the grounds of privilege. In Scotland, legal privilege is applicable to a range of communications, including the usual categories of lawyer/client communications, documents prepared in contemplation of litigation and communications relating to settlement negotiations.
Witness statements or affidavits are commonly used in arbitration (and it is increasingly common to see these used in the Commercial Court). However, it is also quite routine for the tribunal to allow cross-examination, or at least oral questioning through the tribunal, in relation to higher-value claims.
It is for the tribunal to determine the admissibility, relevance, materiality and weight of any evidence. It is also for the tribunal to determine whether to apply rules of evidence used in legal proceedings or any other rules of evidence.
The courts have the power to grant an order for the attendance of witnesses and the production of evidence, including evidence held by parties to the arbitration and non-parties. In an application to the court, there is no difference between parties and non-parties; the rules provide that the court may order "any party" to attend a hearing or disclose evidence.
Scotland has detailed statutory provisions dealing with the confidentiality of arbitration. These provisions are contained in a default rule, which can be deleted or modified if the parties so wish. The rules provide that disclosure by the tribunal, any arbitrator or any party to confidential information relating to the arbitration is actionable as a breach of an obligation of confidence unless the disclosure is authorised by the parties or is subject to one of the exceptions listed. "Confidential information" means any information relating to the dispute, the arbitral proceedings, the award or any civil proceedings relating to the award in respect of which an anonymity order has been granted by the court.
The tribunal and the parties are required to take reasonable steps to prevent the unauthorised disclosure of confidential information by any third party involved in the arbitration.
As stated, a breach of confidentiality is actionable, therefore the innocent party can recover damages where the breach can be shown to have caused loss. In addition, an interdict (an injunction) can be obtained to prevent an anticipated breach or further breaches where a breach has already occurred.
Confidentiality in relation to arbitration can be easily lost where there are incidental court proceedings relating to the arbitration. That is a problem in many jurisdictions. The Scottish Act addresses this by providing for anonymity in legal proceedings. In terms of the Act, a party to any civil proceedings relating to an arbitration may apply to the court for an order prohibiting the disclosure of the identity of a party to the arbitration in any report of the proceedings. These provisions have been fully implemented by the courts.
The court rules provide that until such time as the court makes a ruling on anonymity, any petition or note relating to an arbitration is not to be made available for inspection except by court staff or the parties involved. The parties’ names do not appear on the Rolls of Court and the court proceedings are heard in private.
The award must be signed by all arbitrators, or all those assenting to the award. It must state the seat of the arbitration, when it was made and when it takes effect, the tribunal’s reasons for the award, whether any previous provisional or part award has been made and the extent to which any such award is superseded or confirmed.
There is no set time limit for the making of the award within the 2010 Act, although parties can adopt rules setting this. The tribunal is under a general duty to avoid unnecessary delay.
If parties do agree a time limit, the tribunal, or any party, may apply to the court to have this varied under Rule 43. An application to vary the time limit should be brought before the expiry of the time limit. Applicable institutional rules will also apply.
The tribunal has wide powers to award damages, specific performance or rectification, and grant injunctions. The tribunal also has the power to make declaratory awards (ie, declaring a contract provision to have a particular effect).
Punitive or exemplary damages cannot be awarded under Scots law and are not available where Scots law is the substantive law. In theory, such an award could be made where another jurisdiction permits damages of that nature and is specified as the law of the contract, but that is an open question because the Act makes no specific provision.
The tribunal has the power to order the unsuccessful party to pay some or all of the costs of the dispute and can order whatever allocation it considers appropriate, except where that would be inappropriate in the circumstances.
The rules contain a mandatory ban on pre-dispute agreements with respect to arbitration expenses.
However, an agreement reached after the dispute has arisen does bind the tribunal and the parties may agree to limit or exclude expenses recoverable from the other. As far as the tribunal’s costs are concerned, the parties have no power to limit those, but they can agree an allocation after the dispute has arisen.
An arbitral award can be challenged on three different grounds. The first is that the tribunal lacked substantive jurisdiction. The second is that there had been a "serious irregularity" as defined in the rules. The third is that the tribunal made an error of Scots law. It should be noted that the "error of law" route applies only to errors of Scots law, so if the substantive law of the contract is not the law of Scotland, legal error appeals are not available. Legal error appeals can in any event be excluded, as noted below.
The procedure for an appeal on the grounds that the tribunal lacked substantive jurisdiction or that there has been a serious irregularity is that a petition is brought before the Outer House of the Court of Session (a single judge).
It is possible to appeal to the Inner House of the Court of Session (the appeal court) with leave of the Outer House judge; however, leave to appeal may only be granted if the judge considers that the proposed appeal raises an important point of principle or practice or that there is some other compelling reason. The decision of the Outer House judge on whether or not to grant leave is final. If leave is granted, the decision of the Inner House on the appeal is, likewise, final. Unlike the rest of the UK, there is no appeal to the UK Supreme Court.
In respect of legal error appeals, the rules are different. Such appeals can only be made with the consent of the parties or with the leave of the court. The court may only grant leave if it is satisfied that deciding the point will substantially affect a party’s rights, that the tribunal was asked to decide the point in question and that the tribunal’s decision was "obviously wrong" or where the court considers the point to be of general importance and is open to serious doubt.
The judge determines the application for leave without a hearing and their determination is final.
The rule allowing error of law appeals is a default rule. Accordingly, the parties can agree to exclude such appeals.
However, the parties cannot contract out of the right of challenge on grounds of jurisdiction or serious irregularity, which are necessary safeguards.
The standard of judicial review depends on the nature of the challenge. The standard is not specified in the legislation, but the courts have set out their approach in a number of cases. Jurisdictional challenges are dealt with on a de novo basis.
However, serious irregularity challenges are considered on a deferential basis. The court will not intervene on the basis that it might have done things differently or expressed its conclusions on the essential issues at greater length.
Where the substantive law of the contract is Scots law and a legal error appeal is proceeding with the agreement of the parties or by leave of the court, the court will look at the legal point on a de novo basis but will not allow new evidence.
Scotland is one of the three legal jurisdictions within the UK, the others being England and Wales (covered by one jurisdiction) and Northern Ireland. The United Kingdom ratified the New York Convention in 1975. The Convention was implemented in Scotland by Sections 18 to 22 of the 2010 Act.
Section 12 of the 2010 Act provides for the enforcement of domestic, UK and non-New York Convention awards. Enforcement of an award can happen in two ways. It is possible for the parties to register their arbitration agreement in the public records (Books of Council and Session). If they have done that, any award granted in terms of the arbitration agreement can be registered and enforced as if it were a decree of the court.
In practice, the registration of an arbitration agreement is confined to documents relating to land, which are registered for the purposes of creating a real right. As arbitration agreements are generally contained within the related contract and the parties tend not to register commercial agreements because they are confidential and the register is public, it is rare to see registered arbitration agreements outside the property context. It is, however, possible to register a separate agreement to arbitrate in respect of a contract.
If the arbitration agreement has not been registered, the relevant procedure is a petition to the court seeking an order that the arbitral award be enforced as if it were a court decree.
Section 12 of the Act also stipulates that an enforcement order cannot be made if the court is satisfied that the award is the subject of an appeal, review, or correction (as specifically designated by the Act, for example under rule 58 or under Part 8 of the Scottish Arbitration Rules), which has not been finally determined.
If an application for the setting aside or suspension of a New York Convention award is made to a competent authority, Section 20 of the Act allows the court to sist the decision on recognition or enforcement of the award or, on the application of the party claiming recognition or enforcement, order the other party to give suitable security. Here, “competent authority” means a person who has authority to set aside or suspend the Convention award concerned in the country in which (or under the law of which) the Convention award concerned was made.
The general approach of the courts is that arbitration awards should be recognised and enforced, thus Scotland is rightly seen as an arbitration-friendly jurisdiction.
It has been observed in the Scottish courts that the Scottish Act is closely modelled on the Arbitration Act 1996 applicable in England and Wales and that English cases provide a useful guide to the interpretation of the Scottish Act. It is therefore reasonable to conclude that a Scottish court will adopt a similar approach to questions of public policy, including international public policy, as the courts of England and Wales.
There is no specific form of class arbitration or group arbitration in Scotland. Where a number of arbitrations arise out of the same incident, it is possible to consolidate these arbitrations with the consent of the parties.
As noted above, technically anyone can become an arbitrator in Scotland. There is no overarching code of ethics. However, in practice, arbitrators tend to be drawn from professions that have codes of conduct.
Arbitrators are generally subject to codes and standards of their profession so a lawyer will be subject to the ethical rules of the Law Society of Scotland, and an advocate to those of the Faculty of Advocates, a surveyor to those of RICS and so on, etc. Arbitrators are often members of the Chartered Institute of Arbitrators, and therefore are subject to their codes. Appointing bodies will also have their own rules and procedures which must be followed.
Third-party funding in litigation is governed by the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018. This is a new act and is still being brought into operation.
Although the 2018 Act refers to “civil proceedings” there does not appear to be any intention for this to cover arbitration.
Scotland has never had a rule against champerty and maintenance, so there is no restriction on third party-funding in arbitration here. The ability to recover the cost of such funding is not yet clear.
Rule 40 of the Arbitration (Scotland) Act allows parties to agree to consolidation or to agree to hold concurrent hearings. The tribunal may not order such consolidation, or the holding of concurrent hearings, of its own initiative. However, parties to a statutory arbitration may not agree to consolidate the arbitration with another arbitration, hold concurrent hearings or authorise the tribunal to order such consolidation or the holding of concurrent hearings unless the arbitrations or hearings are to be conducted under the same enactment.
A tribunal's award is final and binding on the parties and any person claiming through or under them but does not of itself bind any third party. In particular, an award ordering the rectification or reduction of a deed or other document is of no effect in so far as it would adversely affect the interests of any third party acting in good faith.
The Scottish courts do have the power to make orders binding foreign third parties, if such third parties are subject to the jurisdiction of the court in accordance with the rules of private international law.