The United Kingdom's Chemicals Regulation Directorate ("CRD") has set up a new arbitration scheme in conjunction with CEDR Solve, a provider of dispute resolution services, aimed at resolving data sharing disputes on vertebrate data on plant protection products. This new system is much quicker and cost-efficient than the one previously in place in the UK and thus offers a real pragmatic way to solve data sharing disputes in the UK.
Changes in the UK Regulatory Context
With effect from 14 June 2011, Article 62 of the Regulation (EC) No 1107/2009 concerning the placing of plant protection products on the market (the "Regulation") introduced new vertebrate data sharing provisions seeking to avoid the duplication of tests carried out on vertebrate animals.
Article 62(3) requires the prospective applicant and data owners to make ‘every effort’ to share vertebrate tests and studies, for which costs must be determined in a ‘fair, transparent and non-discriminatory way.’
Where companies failed to reach agreement on data sharing, the Regulation allows the competent authorities to introduce national measures obliging the companies involved to share data using procedures specified by those authorities.
By contrast with the previous regime, the CRD is not required to direct parties who are disputing the terms of data sharing in respect of vertebrate studies to arbitration. Instead, CRD may use vertebrate studies for the purpose of the application of the prospective applicant, even where no agreement has been reached, without prejudice to the data owners' right to obtain a fair compensation. In practical terms, where CRD is informed by a prospective applicant that no agreement can be reached, it will access the relevant vertebrate studies to support their application for authorisation. However, the data owner will be allowed to initiate arbitration proceedings. To that effect, CEDR Solve (for the Chartered Institute of Arbitrators) drafted the Arbitration Procedure for Disputes over Terms of Vertebrate Animal Data Sharing under the Regulation (the "Arbitration Procedure").
Any arbitration decisions are only valid in the UK, but are a quick (approximately 2-3 months), flexible (see the procedure described below), cost-efficient (costs include an administration fee of £350 plus VAT, and the arbitrator's fee in the region of £1,400 to 2,800 plus VAT) and effective (legally binding) method of resolving data sharing disputes.
The New Arbitration Scheme
- Application for arbitration must be made on a designated application form available from CEDR Solve, enclosing the full claim with supporting evidence, and the case fee (3.1, 3.5, 4.1). Arbitration may or may not involve a hearing; whilst making the application either party can elect for a quick and cost-effective documents-only procedure provided matters are not too complex (3.3, 3.4). However, in most cases a hearing will be necessary to better substantiate the case.
- Upon receipt of the application and full claim, CEDR Solve will forward a copy to the respondent, who has 21 days (commencing 2 days following the date of posting by CEDR Solve) to set out its defence (4.2).
- The claimant will be provided with a copy of of the defence, in respect of which he may submit comments within a period of 14 days (commencing 2 days following the date of posting by CEDR Solve, see 4.3).
- CEDR Solve administers the scheme and has exclusive control over the appointment of an independent arbitrator (2.5, 9.1) at an appropriate time in the proceedings (3.2).
- The arbitrator has the right to call for additional evidence on any relevant matter, from any party, in writing or orally, in accordance with relevant law, the 1996 Arbitration Act and any contract or agreement in existence between the parties (2.4, 4.8).
- The arbitrator may proceed with arbitration if either party fails to comply with the Arbitration Procedure (6.5(g)). In addition to the powers conferred by the Arbitration Procedure, the arbitrator has the widest discretion permitted by law to resolve the dispute in a fair, just, speedy, economical and final manner in accordance with natural justice (6.6).
- Nothing in the Arbitration Procedure prevents the parties agreeing to settle the difference or disputes arising out of the agreement without recourse to arbitration (10.2). The parties must immediately notify CEDR Solve in writing of the terms of the settlement, and the arbitrator shall record them in an agreed award enforceable under the 1996 Arbitration Act (6.5(h)).
- Under the documents-only arbitration scheme, the arbitrator will make his/her award within 14 days of receipt of all relevant case papers (4.6). CEDR Solve notifies the award, with reasons, to the parties. The details of the proceedings, award, and reasons for the award are confidential (8.1).
- Where an oral hearing is required, CEDR Solve forwards the complete case file to the arbitrator prior to the hearing, and arranges the hearing with the parties, which will be held at a mutually agreed location. The hearing will not exceed 7 hours in duration and the arbitrator will determine all matters of procedure and evidence in relation to the hearing. CEDR Solve notifies the award to the parties (4.7, 4.9).
- Any award made under the scheme is legally binding on all patties, and any payment (and any interest) indicated in the award must be made directly between the parties within 21 days of its publication.
- The arbitrator has discretion to order one party to reimburse all or part of the costs incurred during the arbitration. No legal proceedings may be issued by a party to recover the costs incurred during the arbitration (7.3 - 7.5).
- An appeal can be made to the High Court on a point of law within the statutory time limits.
