All the questions
Arbitrations sitting in England and Wales,2 both international and domestic, are governed by the Arbitration Act 1996 (the Act).3 The Act, which is based in many respects on the UNCITRAL Model Law, consolidated and reformed existing arbitration law, introducing a modern, arbitration-friendly legislative regime. Although comprehensive, the Act does not codify all aspects of English arbitration law.4 Practitioners must therefore consult the common law as well as the Act to determine the status of the law on many issues.
i The structure of the law
The provisions of the law are divided into four parts:
- Part I contains the main provisions relating to the arbitration procedure, including the appointment of the arbitral tribunal, the conduct of the arbitration and the powers of the tribunal and the court. Section 4 of Part I expressly distinguishes between mandatory provisions (i.e. those which have effect notwithstanding any agreement to the contrary) and non-mandatory provisions (i.e. those which may be excluded by agreement). Mandatory provisions are listed in Schedule 1 of the Act;
- Part II contains provisions dealing with domestic arbitration agreements and consumer arbitration agreements, and small claims arbitration in county court;
- the provisions of Part III give effect to the obligations of the United Kingdom to recognize and enforce awards under Articles III to VI of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention); and
- Part IV includes provisions concerning the distribution of proceedings between the courts, the entry into force of the law and the extent of its application.
ii Major Principles of the Fa
The law is based on three general principles set out in Article 1, which have served as a starting point for judicial reasoning and innovation in law enforcement. A member of the Departmental Arbitration Advisory Committee (DAC), which helped draft the law in consultation with arbitration practitioners and users, recently described these principles as the “philosophy behind the law.”5 The principles are:
- fairness (“the object of arbitration is to obtain the equitable resolution of disputes by an impartial tribunal without unnecessary delay or expense”);6
- party autonomy over arbitration (“parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest”);seven and
- the restriction of judicial intervention in proceedings (“in matters governed by [Part I] of the Act, the court should intervene only in the cases provided for by [that] Part’).8
Section 1 of the Act provides that Part I is based on these principles and is to be interpreted accordingly, and English courts continue to refer to the guiding principles to resolve issues of interpretation and application of the law.9
iii The Economy of the Law
The above general principles are also reflected in all provisions of the Act. For example, the law supports the general principle of fairness by imposing on the parties the duty to “do all that is necessary for the smooth running and speed of the arbitral proceedings”; and in court, the duty to act fairly and impartially,ten and to adopt appropriate procedures to “avoid unnecessary delay or expense, so as to provide a fair means of resolving the issues to be decided”.11
As for the autonomy of the parties, the Act reinforces this general principle by the non-mandatory nature of most of the provisions of Part I.12 Unlike provisions specified by law as mandatory, parties may opt out of non-mandatory provisions by agreement.
Courts have in turn emphasized in a number of judgments the importance of party autonomy in the arbitral process. The Supreme Court of Jivraj vs. Hashwani13 upheld an arbitration clause that required arbitrators to be from a particular religious group when the Court of Appeal declared the clause void for breaching EU anti-discrimination law.14 In this judgment, their lordships endorsed the following statement of the International Chamber of Commerce (ICC):
The rationale for arbitration is that it provides for the final and binding settlement of disputes by a court in a procedure acceptable to all parties, in circumstances where other forums (especially national courts) are judged inappropriate (for example, because neither party will submit to the courts or their counterpart; or because the available courts are considered insufficiently expert for the particular dispute, or insufficiently sensitive to the positions, culture or perspectives of the parties ).15
The Act gives effect to the third principle – limited court intervention – in many of the mandatory provisions of Part I.16 give instructions regarding the ownership or preservation of evidence17 and to order interim measures,18 the court, on the other hand, has only a limited power of intervention. Court intervention is limited to certain circumstances to support the arbitration (such as the appointment of arbitrators if the agreed procedure fails,19 and subpoena of witnesses to appear in court);20 and the tribunal has the same powers for the purposes of and in connection with arbitral proceedings as with respect to court proceedings, such as hearing witnesses, ordering the preservation of evidence, granting interim injunctions or the appointment of a receiver.21 In this respect, the Law mirrors the UNCITRAL Model Law.22
Furthermore, the law confers only limited rights to challenge an award, on the grounds that either the tribunal lacked jurisdiction on the merits (under Article 67) or there has been a serious irregularity. causing substantial injustice (under section 68), or that an appeal is warranted. on a point of law (under Article 69). Since these provisions are designed to support the arbitral process and reduce judicial intervention in arbitral proceedings,23 courts place a significant hurdle on parties seeking to set aside arbitral awards,24 insisting that such challenges are “long stops[s] is available only in extreme cases where the tribunal has been so wrong in its conduct of the arbitration that justice demands that it be corrected”.25 Although appeals to awards for serious irregularity under article 68 do not require the authorization of the court, unlike appeals in cassation under article 69, there is no evidence that this lesser requirement has encouraged frivolous litigation. .26
iv Legal Remedies in Support of Arbitration
A recurring theme in recent case law, in 2021 as in previous years, has been the exercise by English courts of their power to make orders in support of arbitrations sitting in England and Wales. The Supreme Court noted that the court has jurisdiction to grant an injunction against prosecution under section 37 of the Superior Courts Act 1981 even where there are no arbitral proceedings in view or there is no legal basis under the law for an injunction, in circumstances where the court seeks to support arbitration by requiring the parties to submit their disputes to arbitration.27
v Requests under the Act
Two specialist subdivisions of the High Court in London hear most arbitration-related claims under the law,28 namely the Commercial Court (for general commercial arbitration) and the Technology and Construction Court (for construction disputes).