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The dispute process: what happens if there’s a dispute?

The dispute and refereeing process is crucial to your use of Transpact.

Most Transpacts do not go to arbitration, so you won’t have to deal with the procedures below in most cases. In fact, we do not notify the party you nominate as referee in a normal Transpact.

But a small minority of cases do go to arbitration, so it is very important that you are aware of the procedures and implications of the arbitration process.

Please note that the dispute and refereeing process refers only to any disputes you have with the other party to a Transpact. Should you have a dispute with Transpact itself relating to payment services then such a dispute is dealt with by Transpact itself, and if it cannot be resolved then the Financial Ombudsman Service (FoS).

Once money has been paid to Transpact and a transaction is live, then at any stage you or the other party to the transaction may refer the transaction to arbitration by the referee you nominated. If you believe that money should be paid to you from Transpact, and the other side is not authorising the payment, then call for arbitration.

Arbitration should be used as a last resort. It is always better to contact the other party and try and resolve the dispute with them first. However, we recognise that there will be times when arbitration may be necessary, and that is why we provide the arbitration service as a core part of the Transpact process.

Step 1: You click on the button marked 'Request Arbitration' or 'Demand Payment' for the transaction.

Step 2: You and the other party will be asked to pay the Transpact arbitration fee. Until both parties pay the arbitration fee, the transaction will not be considered for arbitration. If you opted to not supply your own referee but chose Transpact's nominated referee, then the nominated referee's fee will be added to the Transpact payment request.

Step 3: Important: Once the dispute fee of one party has been received by Transpact, the other party has a set number of days (agreed by you as part of your transaction terms) to also pay the requested dispute fee. If the fee is not received within this time, then this non-payment is taken as an admission by the non-payer that payment is due in full to the other party! Payment of the full transaction amount currently held will be immediately paid to the other side, together with a refund of the refereeing fee that has been paid.

Please note, for this reason, it is important to check Transpact from time to time to ensure that the other party has not requested arbitration and you have not responded, awarding default judgement to the other party (in case your email notifications do not reach you). It is also important to ensure that you set a time period long enough to enable you to always be able to pay a requested fee to Transpact in good time, but not too long so that it delays you receiving payment if the other party does not respond to your payment requests.

Step 4: Once both fees have been received, a code will be made available for both parties to pass on to the referee. This is a security feature to confirm the identity of the referee. Log in, retrieve the code, and pass this unique code on to your referee (not necessary if you have chosen Transpact's nominated referee).

Step 5: Once the referee has logged on to Transpact and entered the codes from both parties, he becomes the arbitrator for the payment under the Arbitration Act 1996 and decides to whom payment should be made. The referee is free to make whatever investigations he deems appropriate, and may call for funding to do so from the transacting parties. The referee will take evidence from both parties by email where possible.

Step 6: Once the referee is satisfied that he has taken sufficient evidence from both sides, he will log in to Transpact and authorise payment to the party he decides has correctly met the transaction conditions. The referee is also able to split payment in whatever proportion he sees fit between the two parties, if he decides that a split is more equitable.

Since both sides have paid for the refereeing fee and refereeing expenses, effectively double paying them, the referee will also authorise the repayment of these amounts to one party (this repayment can also be split by the referee). This ensures that where the referee decides one party is innocent and the other fully to blame, then the innocent party incurs no net expense from the refereeing process whatsoever.

As soon as the payment instruction is received from the referee, Transpact transfers the money into your and/or the other party's bank account using the near immediate FPS system where possible for GB Pounds, or the SEPA protocol for Euro payments. This ends the transaction. There is no appeal against the referee's decision.

Please note:

a) The referee may decide that not enough time has elapsed to yet be able to ascertain whether the transaction conditions have been met or not, and that more time is needed. If that is the case, after making whatever partial payment of the transaction amount the referee sees then fit, the referee may close the arbitration case. The Transpact will now return back to the state that it was in immediately before arbitration was requested, and either side can authorise payment to the other when the transaction conditions have been met or call for new arbitration.

b) The referee is entitled to call for payment of expenses related to the arbitration. If so, he shall do so only through Transpact, and both sides will follow the procedure of making payment as per the initial refereeing fee (and if payment is not made within the agreed timescale, then the arbitration will automatically be awarded in full to the other party). The referee, as part of his/her arbitration, will return one set of expenses to the appropriate party (or split the amount between the parties if he feels this to be more appropriate).

c) If the agreed referee does not want to, or chooses not to, act as a referee for the transaction payment, then Transpact's nominated referee will instead become the referee. This will occur if the agreed referee logs on to Transpact and indicates that they have declined to become the referee, or if the referee has not logged on to Transpact and taken ownership of the transaction by entering at least one of the codes within 21 days of the referee codes being issued. If the agreed referee only enters one code from one of the two parties within 21 days, then the referee will become Transpact's nominated referee, but in that case Transpact's nominated referee will investigate why one party's code has not been entered, and award judgement against that party if that party has not made best efforts to present its code to the agreed referee. Transpact's nominated referee will, whenever it feels it appropriate, hand back the arbitration to the agreed referee in such a circumstance.

d) We need to protect you from a case where the agreed referee does not function in a timely manner, and your money is therefore tied up awaiting the referee's resolution. So, if both parties to a transaction are unhappy with the performance of a referee (for example, due to the referee's high request for expenses or the referee’s delay), then they may jointly apply to Transpact to change the referee to Transpact's nominated referee. Only if both parties request a change of referee will such a change occur. The arbitration process will then begin from scratch again, with Transpact's nominated referee as the referee.

e) We also need to protect you where the other party to the transaction is not bothered by a referee delay (for example, they may expect to lose the arbitration). In such a case, your money will be tied up awaiting the referee's resolution, which may not occur speedily. Therefore, where one party requests unilaterally a change of referee to Transpact's nominated referee, but the other party to the transaction does not, then the referee will have 21 days from that time to make a decision on full payment. If the 21 days elapse and the referee does not authorise payment, then the agreed referee will be replaced with Transpact's nominated referee, who will investigate whether the agreed referee has delayed payment unnecessarily. If Transpact's nominated referee finds this to be the case, then Transpact's nominated referee will become the referee. Otherwise, Transpact's referee will withdraw and the agreed referee will again be the arbitrator to the transaction.