Judges rule compulsory arbitration constitutional

A judgment which found that forced arbitration in traffic collision cases was in violation of an individual’s fundamental human right to a fair hearing was overturned by the Constitutional Court.

Joseph Muscat filed a constitutional application in 2008 against the Prime Minister, the Minister for Justice and the Attorney General after an insurance company forced him into arbitration in connection with a dispute over a 2008 traffic accident.

In his application, Mr Muscat argued that his right to a fair hearing was being breached because the arbitration board did not fit the criteria the Constitution dictated for an independent court.

The First Hall of the Civil Court upheld the argument, pointing out that for a tribunal to satisfy the provisions of the Constitution and of the European Convention of Human Rights it had to be independent, impartial and guarantee security of tenure to the adjudicators. An individual could opt to waive this voluntarily but arbitration was not voluntary.

Given that the Arbitration Centre did not have security of tenure, the court found in favour of Mr Muscat and ruled that the rules imposing forced arbitration in collision cases violated a person’s fundamental human right to a fair hearing.

The authorities appealed to the Constitutional Court composed of Chief Justice Vincent De Gaetano, Mr Justice Joseph A. Filletti and Mr Justice Giannino Caruana Demajo.

The Constitutional Court said there was no doubt an arbitration tribunal was a judicial authority in terms of law. However, the court had to ensure that such a tribunal satisfied the required guarantees of independence and impartiality.

When examining the issue of security of tenure on the part of the arbitrators, the Constitutional Court said that when there was no agreement between the parties, the arbitrator was appointed by the chairman of the Arbitration Centre from a panel of approved arbitrators. This fact did not mean that the arbitrator appointed by the chairman was not independent. The appointment of an arbitrator by the chairman meant that the choice was effected by a person who was independent from the parties to an arbitration case.

If an arbitrator was removed by the Arbitration Centre this would be an executive decision subject to judicial review by the courts and could be overturned. Therefore, the fact that an arbitrator could be removed did not mean that such arbitrator would be influenced by the wishes of the Arbitration Centre.

By the same reasoning, one could say that a member of the judiciary approaching retirement age would not remain independent as he might be eligible to fill another post as decided by the government.

There was, therefore, no reason to doubt the independence and impartiality of the arbitration proceedings.

The Constitutional Court thus revoked the first court’s judgment.