Arbitration World

1.1 Describe the prevalence of commercial arbitrations as a method of settling disputes, both domestic and international.

The private resolution of disputes by experts familiar with the relevant industry has long been popular in England and Wales, and many domestic contracts provide for arbitration.

London is also one of the world’s leading international commercial arbitration centres. This is due to:

• London’s long history as a centre for international trade and finance;
• English law often being the agreed governing law of international
  transactions;
  
• English being the language of international commerce;
• the presence of specialist and experienced arbitration institutions;
• English arbitrators having a reputation for being impartial,
  independent and commercially minded;
  
• the advocacy and case management skills of the English legal
  profession; and
  
• the supportive attitude towards arbitration of the English courts. As well as disputes arising from infrastructure, international trade and general commercial contracts, many maritime and commodity disputes are also resolved in London.

2. LAW ON ARBITRATION

2.1 What are the principal sources of law and regulation relating to domestic and international arbitration? (Describe the role of federal or state laws and relevance of court decisions.)

The principal source of arbitration law is the Arbitration Act 1996 (the ‘1996 Act’).

The 1996 Act applies in England and Wales, and Northern Ireland (but not in Scotland). (For the sake of brevity, I shall just use the terms ‘England’ and ‘English’ in this chapter.)

The 1996 Act applies to both domestic and international arbitrations.

Court decisions are important sources of law to the extent that they interpret and apply the 1996 Act and address matters not covered by the 1996 Act. The English courts have evidenced a strong policy in favour of arbitration.

2.2 List and briefly describe relevant arbitration statutes, international treaties and conventions.

The principal statute is the Arbitration Act 1996 (which can be found at www.hmso.gov.uk/acts/acts1996/1996023.htm).

The 1996 Act is intended to be a comprehensive statute, but not an exhaustive code. It restates and improves English arbitration law, in a relatively user-friendly way. It reflects the format and language of the UNCITRAL Model Law on International Commercial Arbitration (the Model Law), although significant changes and additions to the Model Law have been made.

The 1996 Act contains a number of statements of general principle, which is very unusual in English legislation. Thus, s 1 states that:

• the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense;
• the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest; and
• the court should not intervene except as specifically provided in the

1996 Act. Section 33 sets out the general duty of the tribunal and s 40 sets out the general duty of the parties: these are aimed at ensuring that arbitration is conducted fairly, economically and expeditiously (see also section 11.2 below).

The 1996 Act contains both mandatory and non-mandatory provisions, with the parties being able to opt in or opt out (as applicable) to the latter (see s 4).

Applications to court concerning arbitration matters are regulated by the Civil Procedure Rules (CPR) Pt 62 and PD 62 (which can be found at www.dca.gov.uk/civil/procrules_fin/contents/parts/part62.htm). Applications are heard by the High Court, with possible appeal to the Court of Appeal and the House of Lords.

The Arbitration Act 1950, Pt II, remains in force with respect to enforcement of certain foreign awards that are not New York Convention Awards.

The United Kingdom is a party to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the ‘New York Convention’), which is implemented in England by ss 100–103 of the 1996 Act, replacing the Arbitration Act 1975.

The United Kingdom is also a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States 1965 (the ‘Washington Convention’), which is implemented in England by the Arbitration (International Investment Disputes) Act 1966.

The United Kingdom is also a party to a number of bilateral and multilateral treaties that provide for international arbitration (eg the United Kingdom is party to over 120 bilateral investment treaties).

3. PRINCIPAL INSTITUTIONS

3.1 What are/describe the principal institutions and/or government agencies that assist in the administration or oversight of international and domestic arbitrations?

The London Court of International Arbitration (LCIA) is one of the world’s leading arbitration institutions for international disputes. The LCIA will administer the arbitration, and provide support to the arbitration tribunal.

The Chartered Institute of Arbitrators also offers dispute resolution services.

Many of the world’s maritime disputes are resolved pursuant to the Rules of the London Maritime Arbitrators’ Association.

Commodity disputes are resolved pursuant to the arbitration rules of the relevant trade association, eg the Grain & Feed Trade Association; the Federation of Oils, Seeds & Fats Associations; the Sugar Association of London and the Refined Sugar Association; and the London Metal Exchange.

4. ROLE OF THE NATIONAL COURTS

4.1 What is the relationship between agreements to arbitrate and access to the courts? Is there a presumption of arbitrability/policy support for arbitration? Will the courts stay court actions in favour of agreements to arbitrate?

If asked by a party to an arbitration agreement, the court must stay a court action if satisfied that there exists a valid arbitration agreement (s 9 of the 1996 Act). A stay is mandatory unless the court is satisfied that the arbitration agreement is null and void, inoperative, or incapable of being performed.

The English courts enforce arbitration agreements by issuing an anti-suit injunction against a party pursuing litigation elsewhere (see Through Transport Mutual Insurance Association (Eurasia) Ltd v India Assurance Co Ltd [2004] EWCA Civ 1598).

4.2 May an arbitral tribunal rule on a party’s challenge to its own jurisdiction (‘competence-competence’)? Need a tribunal suspend its proceedings if a party seeks to test jurisdiction in the courts?

The 1996 Act legislates for competence-competence. Section 30 provides that, unless otherwise agreed by the parties, the arbitral tribunal may rule on its own substantive jurisdiction (that is, as to whether there is a valid arbitration agreement, whether the tribunal is properly constituted, and what matters have been submitted to arbitration in accordance with the arbitration agreement).

An objection that the tribunal lacks substantive jurisdiction must be made not later that the time the objecting party takes the first step in the proceedings to contest the merits (s 31(1)). An award of the tribunal on its substantive jurisdiction may be challenged by making an application to the court (s 67).

Alternatively, a party may apply to the court (instead of the arbitral tribunal) to determine any question as to the substantive jurisdiction of the tribunal, but only if all the parties to the arbitration agree or the tribunal gives its permission (s 32).

5. USEFUL REFERENCES

5.1 Provide a selected bibliography of the most influential publications in or relied upon in the jurisdiction – books, journals, newsletters and pamphlets.

English arbitration

Departmental Advisory Committee on Arbitration Law Report on the Arbitration Bill (the DAC Report) (February 1996), and Supplementary Report (January 1997)

Lord Mustill and S Boyd QC Commercial Arbitration (London: Butterworths, 2nd edn, 1989) and 2001 Companion (London: Butterworths, 2001) M Hunter and B Pilling Halsbury’s Laws of England – Arbitration (London: Butterworths, 4th edn reissue, 2003) vol 2(3) D Sutton and J Gill Russell on Arbitration (London: Sweet & Maxwell, 22nd edn, 2003) B Harris, R Planterose and J Tecks The Arbitration Act 1996: A Commentary (London: Blackwell, 3rd edn, 2003) J Tackaberry QC and A Marriott QC Bernstein’s Handbook of Arbitration and Dispute Resolution Practice (London: Sweet & Maxwell, 4th edn, 2003) A Tweeddale and K Tweeddale Arbitration of Commercial Disputes (Oxford: Oxford University Press, 2005) S Shackleton Arbitration Law Reports and Review (Oxford: Oxford University

Press, due 2006) R Merkin Arbitration Law (London: LLP, updated looseleaf). Arbitration Law Monthly, edited by R Merkin (Informa Law) Arbitration, the journal of the Chartered Institute of Arbitrators (Sweet & Maxwell)

International arbitration

A Redfern and M Hunter Law and Practice of International Commercial
Arbitration (London: Sweet & Maxwell, 2004)
J Lew QC, L Mistelis and S Kröll Comparative International Commercial
Arbitration (The Hague: Kluwer, 2003)
E Gaillard and J Savage (eds) Fouchard Gaillard Goldman on International

Commercial Arbitration (The Hague: Kluwer, 1999)
Arbitration International, the journal of the LCIA (Kluwer)
International Arbitration Law Review (Sweet & Maxwell)

6. AGREEMENT TO ARBITRATE

6.1 Are there form and/or content requirements for an enforceable agreement to arbitrate? How may they be satisfied?

An arbitration agreement is an agreement to submit to arbitration present or future disputes, and like any other contract it may be made in writing or orally. However, the 1996 Act only applies to agreements in writing. The ‘in writing’ requirement is defined broadly (ss 5 and 6).

A ‘dispute’ includes ‘any difference’ (s 82(1)). It includes contractual claims, claims framed in quasi-contract or tort or based on breach of a statutory duty. Any objection to a claim, however unmeritorious, constitutes a dispute, and must be referred to arbitration pursuant to s 9 (see section 4.1 above).

Oral arbitration agreements cannot be enforced under the 1996 Act, but they may be enforced under the common law.

7. ARBITRABILITY

8. SEPARABILITY OF ARBITRATION CLAUSES

8.1 May an arbitral clause be considered valid even if the rest of the contract in which it is embedded is invalid?

The 1996 Act addresses the separability of the arbitration agreement. Section 7 provides that, unless otherwise agreed by the parties, an arbitration agreement which forms or was intended to form part of another agreement may not be regarded as invalid, non-existent or ineffective because that other agreement is invalid, or did not come into existence or has become ineffective, and it shall for that purpose be treated as a distinct agreement.

9. QUALIFICATION/APPOINTMENT/LIABILITY OF ARBITRATORS

9.1 Are there specific provisions regulating the qualifications of arbitrators? Are there requirements (including disclosure) for ‘impartiality’ and ‘independence’, and do such requirements differ as between domestic and international arbitrations?

There are no specific provisions regulating the qualifications of arbitrators. However, the parties may prescribe any qualifications that they require, and the court has power to remove an arbitrator who does not possess the qualifications required by the arbitration agreement (s 24(1)(b) of the 1996 Act). Likewise, in the event that the court is required to appoint an arbitrator, it shall have due regard to any agreement of the parties as to the qualifications required of the arbitrators (s 19).

Section 24(1)(a) of the 1996 Act prescribes an express requirement of impartiality but not one of independence (unlike the Model Law, that requires both). The Departmental Advisory Committee, which drafted the Arbitration Bill, concluded that a lack of independence should only be cause for concern if it gives rise to justifiable doubts about impartiality, and that a requirement of complete independence would give rise to vexatious challenges (see DAC Report, paras 101–104).

The test of partiality or bias for the purposes of s 24(1) has been held to be the same as the test under art 6(1) of the European Convention on Human Rights, namely whether a fair-minded and informed observer having considered the facts would conclude that there was a real possibility that the arbitrator was biased (see Magill v Porter [2002] UKHL 67).

The 1996 Act (also unlike the Model Law) does not require a person, when approached in connection with his or her possible appointment as an arbitrator (or thereafter), to disclose any circumstances likely to give rise to doubts about his or her impartiality, although such disclosure would be good practice (see AT&T Corpn v Saudi Cable Co [2000] 2 Lloyd’s Rep 127, CA).

On issues of impartiality and disclosure, international arbitrators are increasingly referring to the IBA Guidelines on Conflicts of Interest in International Arbitration.

9.2 Are there provisions governing the challenge or removal of arbitrators? Do the courts or other jurisdictions play/have a role in any such challenge?

Pursuant to s 24 of the 1996 Act, which is mandatory, the court has power to remove an arbitrator on any of the following grounds:

• that circumstances exist that give rise to justifiable doubts as to his or her impartiality;
• that he or she does not possess the qualifications required by the
  arbitration agreement;
  
• that he or she is physically or mentally incapable of conducting the proceedings, or there are justifiable doubts as to his or her capacity to do so; or
  • that he or she has refused or failed:
    • properly to conduct the proceedings, or
    • to use all reasonable despatch in conducting the proceedings or

making an award. A further requirement is that substantial injustice has been or will be caused to the applicant.

This last bullet above must be read in conjunction with s 33, which sets out the general duty of the tribunal in conducting the arbitration (see section 11.2 below).

Whichever of the grounds set out above is relied upon, a party must make objection promptly (s 73(1)). In addition, a party must first exhaust any recourse available from an arbitral or other institution or person vested by the parties with power to remove an arbitrator (s 24(2)).

The arbitral tribunal is empowered, by virtue of s 24(3), to continue with the arbitral proceedings, and even to make an award, notwithstanding any pending application to remove an arbitrator brought under that section. This is intended to frustrate any spurious challenges being brought on tactical delaying grounds.

9.3 Does legislation govern, or have the courts developed rules regarding the liability of arbitrators for acts related to their decision-making function?

Section 29 of the 1996 Act, which is mandatory, provides that an arbitrator is not liable for anything done or omitted in the discharge or purported discharge of his or her functions as arbitrator unless the act or omission is shown to have been in bad faith.

As well as situations of bad faith, an arbitrator may be liable to the parties as a result of his or her resigning as arbitrator, save that he or she may apply to the court to grant him or her relief from any such liability (s 25).

10. PARTY REPRESENTATION

10.1 Are there particular qualification requirements for representatives (‘counsel’) appearing in the jurisdictions?

No particular qualification is required for party representatives, including no requirement that he or she be a lawyer (s 36 of the 1996 Act).

11. PLACE OF ARBITRATION/PROCEDURES

11.1 Are there provisions governing the place (seat) of arbitration, or any requirement for arbitral proceedings to be held at the seat?

The ‘seat of the arbitration’ is defined in s 3 of the 1996 Act to mean the juridical seat of the arbitration. With some limited exceptions, the provisions of the 1996 Act referred to in this chapter only apply where the seat of the arbitration is in England and Wales, or Northern Ireland (s 2).

Not all of the hearings need take place at the seat of the arbitration (s 34(2)(a)).

11.2 Are specific procedures mandated in particular cases, or in general?

There are a number of provisions in the 1996 Act that are mandatory (s 4(1)). These are identified in Sch 1 to the Act.

The most important of the mandatory provisions concern the duties of the tribunal and the parties.

Section 33(1), entitled ‘General duty of the tribunal’, provides that the tribunal shall:

• act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting its case and dealing with that of its opponent; and
• adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined.

Section 33(2) goes on to state that the tribunal shall comply with that general duty in conducting the arbitral proceedings, in its decisions on matters of procedure and evidence and in the exercise of all other powers conferred on it.

Subject to its mandatory duty described above, and subject to the right of the parties to agree any matter, s 34(1) provides that it shall be for the tribunal to decide all procedural and evidential matters.

Section 40(1), entitled ‘General duty of parties’, provides that the parties shall do all things necessary for the proper and expeditious conduct of the arbitral proceedings. Section 40(2) adds that this includes:

• complying without delay with any determination of the tribunal as to procedural or evidential matters, or with any order or directions of the tribunal; and
• where appropriate, taking without delay any necessary steps to obtain a decision of the court on a preliminary question of jurisdiction or law (ss 32 and 45).

12. EVIDENCE GATHERING

12.1 What is the general approach to the gathering and tendering of evidence at the pleading stage and at the hearing stage (production, discovery, privilege, use of witness statements etc)? Are there differences between domestic and international arbitrations?

Section 34 of the 1996 Act provides that the tribunal has the power to decide all procedural and evidential matters, subject to the right of the parties to agree any matter, and subject to the general duty of the tribunal (s 33, and see section 11.2 above).

Section 34 identifies procedural and evidential matters as including:

• when and where any part of the proceedings is to be held;
• the language or languages to be used in the proceedings and whether translations of any relevant documents are to be supplied;
• whether any and if so what form of written statements of claim and defence are to be used, when these should be supplied and the extent to which such statements can be later amended;
• whether any and if so which documents or classes of documents should be disclosed between and produced by the parties and at what stage;
• whether any and if so what questions should be put to and answered by the respective parties and when and in what form this should be done;
• whether to apply strict rules of evidence (or any other rules) as to the admissibility, relevance or weight of any material (oral, written or other) sought to be tendered on any matters of fact or opinion, and the time, manner and form in which such material should be exchanged and presented;
• whether and to what extent the tribunal should itself take the initiative in ascertaining the facts and the law; and
• whether and to what extent there should be oral or written evidence or submissions. The procedure adopted varies with the nature of the dispute, and the legal cultures of the parties and the arbitrators. Domestic arbitrations typically reflect English court procedures, with pleadings followed by document discovery, then exchange of witness statements, expert reports (if relevant) and finally the hearing. International tribunals sitting in England often adopt procedures from both the common law and civil law traditions, with pleadings, documents relied upon and witness statements served together, and with limits imposed on document disclosure, and with some cross-examination allowed but generally shorter hearings. The IBA Rules on the Taking of Evidence in International Commercial Arbitration are increasingly being used.

The application of privilege in international arbitration is a complex issue: see F von Schlabrendorff and A Sheppard ‘Conflict of Legal Privileges in International Arbitration: An Attempt to Find a Holistic Solution’ in G Asken, K-H Bockstiegel, M J Mustill et al Global Reflections on International Law, Commerce and Dispute Resolution: Liber Amicorum in Honour of Robert Briner (Paris: ICC Publishing, 2005). Tribunals sitting in England generally allow all the parties to claim privilege from invasive disclosure according to the common law principles.

12.2 What powers of compulsion or court assistance are there for arbitrators to require attendance of witnesses or production of documents, either prior to or at the substantive hearing? Is there a difference between domestic and international tribunals or as between parties and non-parties? Do special provisions exist for arbitrators appointed pursuant to international treaties (ie bilateral or multilateral investment treaties)?

Section 43 of the 1996 Act, which is mandatory, provides that a party may use the same court procedures as are available in relation to legal proceedings to secure the attendance before the tribunal of a witness in order to give oral testimony or to produce documents or other material evidence. The court may be requested to issue a witness summons (see CPR 34.4): see Tajik Aluminium Plant v Hydro Aluminium AS [2005] EWCA Civ 1218. This may only be done with the permission of the tribunal or the agreement of the other parties. In addition, these court procedures may only be used if the witness is in the United Kingdom and the arbitral proceedings are being conducted in England.

No special provisions exist for arbitrators appointed pursuant to international treaties.

13. INTERIM MEASURES/ROLE OF THE TRIBUNAL

13.1 Are there special provisions relating to the granting of interim and preliminary relief? Have the courts recognised and/or limited any such authority? Do the courts themselves play a role in interim relief in arbitration proceedings?

Section 38 of the 1996 Act provides that, unless otherwise agreed, the tribunal has, inter alia, the power to:

● order a claimant to provide security for the costs of the arbitration;

• give directions to a party for the inspection, preservation, etc, of
  relevant property or that samples, etc, be taken; or
  
• give directions to a party for the preservation of any evidence.

In addition, the parties may seek the assistance of the court, in relation to the preservation of evidence or assets, the granting of interim injunctions etc, especially in the case of urgency (s 44) (see Cetelem SA v Roust Holdings Ltd [2005] EWCA Civ 618).

Section 39 of the 1996 Act provides that the parties are free to agree that the tribunal shall have the power to order on a provisional basis any relief which it would have power to grant in a final award. This includes making a provisional order for the payment of money or the disposition of property between the parties. Any such order is subject to the tribunal’s final determination.

14. TAXATION OF ARBITRATORS’ FEES

14.1 Does the state, or any of its sub-divisions, purport to tax domestically the fees of foreign arbitrators conducting hearings in the state? Is there a difference if the arbitration is ‘seated’ in the state or elsewhere?

The test for United Kingdom income tax purposes is whether the non-United Kingdom resident arbitrator is carrying on a trade or profession in the United Kingdom, in which case any profits of that trade or profession will be subject to United Kingdom income tax by virtue of Ch 2 of Pt 2 of the Income Tax (Trading and Other Income) Act 2005. This provision is rarely (if ever) enforced against foreign arbitrators.

Should an arbitrator spend more than 183 days in the United Kingdom in any one tax year, he or she may, however, become resident in the United Kingdom for tax purposes (subject to any applicable tax treaty).

15. DEFAULT PROCEEDINGS

15.1 Are there provisions governing a tribunal’s ability to determine the controversy in the absence of a party who, on appropriate notice, fails to appear at or seek adjournment of the arbitral proceedings?

Section 41(4) of the 1996 Act provides that, unless the parties otherwise agree, in the event that a party, after due notice has been given to it and without showing sufficient cause, fails to attend at an oral hearing or fails to submit written evidence or make written submissions, the tribunal may proceed in the absence of that party and/or make an award on the basis of the evidence before it.

16. THE ARBITRAL AWARD

16.1 Must an award take any particular form, eg, in writing, signed, dated, place, the need for reasons, delivery, etc?

The parties are free, by virtue of s 52 of the 1996 Act, to agree on the form of the award. If there is no such agreement, the award must:

• be in writing, signed by all the arbitrators (or all those assenting to the award);
• contain the reasons for the award (unless it is an agreed award or the parties have agreed to dispense with reasons); and
• state the seat of the arbitration and the date when the award was
  made.
  

Because of the requirement that there be personal signature(s), a hard copy rather than an electronic copy must be produced. However, it is not a requirement that the award be signed at the seat of the arbitration (s 53).

Unless otherwise stated, the date of the award is the date on which it is signed by the sole arbitrator, or if more than one by the last of them (s 54).

The parties are free to agree on the requirements as to notification of the award to the parties. If there is no such agreement, the award must be notified to the parties by service on them of copies of the award, which must be done without delay after the award is made (s 55). The tribunal may refuse to deliver the award to the parties except upon full payment of the fees and expenses of the arbitrators (s 56).

16.2 Are there limits on arbitrators’ powers to fashion appropriate remedies, eg, punitive or exemplary damages, rectification, injunctions, interest and costs?

The arbitral tribunal must decide the dispute in accordance with the law chosen by the parties as applicable to the substance of the dispute, or if the parties so agree, in accordance with such other considerations as are agreed by them or determined by the tribunal (s 46 of the 1996 Act). Thus, a tribunal may not decide ex aequo et bono or as amiable compositeurs, unless so authorised by the parties.

Section 48 of the 1996 Act provides that the parties are free to agree upon the powers exercisable by the tribunal. The parties may give to the tribunal the power to award remedies not available to the courts (eg punitive damages); however, any such remedy must not be contrary to English public policy. Unless otherwise agreed by the parties, the tribunal has the power, inter alia, to make a declaration, to order the payment of a sum of money, to order a party to do or refrain from doing anything, and to order specific performance of a contract.

Unless otherwise agreed, the tribunal may award simple or compound interest from such dates, at such rates and with such rests, as it considers meets the justice of the case, for the period up to the award, and for the period from the date of the award to payment (s 49).

The tribunal may also make an award of costs. Unless the parties agree otherwise, the tribunal awards costs on the general principle that costs should follow the event (ie the successful party should have a costs award in its favour), except where it appears to the tribunal that in the circumstances this is not appropriate in relation to whole or part of the costs (s 61).

17. RECOURSE FROM AN AWARD

17.1 Are there provisions governing modification, clarification or correction of an award?

Section 57 of the 1996 Act provides that parties are free to agree on the tribunal’s powers to correct an award or to make an additional award. If or to the extent there is no such agreement, the tribunal may (on its own initiative or on the application of a party), and within a limited period: correct an award to remove a clerical mistake or error arising from an accidental slip or omission or clarify or remove any ambiguity in the award; or make an additional award in respect of a claim which was presented to the tribunal but not addressed in the original award.

17.2 May an award be appealed to or set aside by the courts? If so, on what grounds and by what procedures?

The 1996 Act provides that an award may be challenged or appealed, in certain limited circumstances, on grounds: that the tribunal lacked substantive jurisdiction (s 67); of serious irregularity (s 68); and of error of law (s 69).

Substantive jurisdiction

Section 67 of the 1996 Act, which is mandatory, provides that a party may apply to the court to challenge any award on jurisdiction, or to seek an order declaring that an award on the merits to be of no effect on grounds that the tribunal lacked substantive jurisdiction. The court may either confirm or vary the award, or set it aside in whole or in part.

Section 67 applies after an award has been made. Alternatively, a party may apply to have the court determine the tribunal’s jurisdiction as a preliminary point (s 32).

Serious irregularity

Section 68 of the 1996 Act, which is also mandatory, provides that a party may apply to the court challenging an award on grounds of serious irregularity affecting the tribunal, the proceedings or the award.

‘Serious irregularity’ is defined to mean (s 68(2)):

• failure by the tribunal to comply with its general duty under s 33 (see section 11.2 above);
• the tribunal exceeding its powers;
• failure by the tribunal to conduct the proceedings in accordance with the procedure agreed by the parties;
• failure by the tribunal to deal with all matters that were put to it;
• any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award exceeding its powers;
• uncertainty or ambiguity as to the effect of the award;
• the award being obtained by fraud, or the award or the way in which it was procured being contrary to public policy;
• failure to comply with the requirements as to the form of the award; and
• any irregularity in the conduct of the proceedings or in the award which is admitted by the tribunal or by any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award.

The court must be satisfied that the irregularity complained of has caused or will cause substantial injustice to the applicant.

The court may: remit the award to the tribunal, in whole or in part, for reconsideration; set aside the award in whole or in part; or declare the award to be of no effect, in whole or in part.

The House of Lords has endorsed the policy of limited review of awards: see Lesotho Highlands Development Authority v Impreglio SA [2005] UKHL 43.

Point of law

Section 69 of the 1996 Act, which is not mandatory, provides that, unless otherwise agreed by the parties, a party may appeal to the court on a question of law arising out of an award (see also s 45, which provides that, unless otherwise agreed by the parties, a party may apply to the court to determine any question of law arising in the course of the proceedings).

An appeal under s 69 shall not be brought except with the agreement of all the other parties or with the permission of the court (and only if the conditions prescribed in the section are met).

A question of law only includes questions of English law (and not of foreign law).

Many institutional rules exclude the right of the parties to appeal any award, which would have the effect of excluding rights under s 69. The parties also often expressly opt out of any right of appeal in their arbitration agreement.

Procedure

Before bringing an application under s 67, 68 or 69 of the 1996 Act, an applicant must first exhaust any available arbitral process of appeal or review (s 70(2)).

An application must be made within 28 days of the date of the award (s 70(3)), but this period may be extended by the court (s 79).

CPR Pt 62 sets out the procedures that must be followed in bringing an arbitration application.

18. ENFORCEMENT OF AWARD

18.1 What are the procedures and standards for enforcing an award? Is there a difference between ‘domestic’ and ‘non-domestic’ awards?

Various regimes exist for the enforcement of different categories of award.

Section 66 of the 1996 Act

Section 66 applies to all domestic and foreign awards (including New York Convention awards). It provides that an award may, by leave of the court, be enforced in the same manner as a judgment or order of the court to the same effect.

The procedure for applying for enforcement is set out in CPR 62.18. The order granting leave to enforce must be served on the defendant. The defendant may then apply to have the court’s order set aside.

The court may refuse enforcement if the court is satisfied that the tribunal lacked substantive jurisdiction (s 66(3)). For a domestic award, the defendant may resist enforcement by challenging the award on grounds of serious irregularity (s 68, see section 17.2 above). For a foreign award, the court will generally apply the same grounds for refusing enforcement as prescribed in the New York Convention (see s 103), but not necessarily.

If no application for setting aside is made, or such application is not successful, the applicant is then able to proceed to execute the award against the assets of the defendant.

Sections 100–103 of the 1996 Act

Section 100(2) provides that a New York Convention award may, by leave of the court, be enforced in the same manner as a judgment or order of the court to the same effect. The procedure for applying for enforcement is the same as described above (ie CPR 62.18). Section 102 sets out the grounds on which recognition or enforcement may be refused.

Section 99 of the 1996 Act and the Arbitration Act 1950

Section 99 of the 1996 Act and Pt II of the Arbitration Act 1950 provide for the enforcement of awards made in certain countries, which are Geneva Convention countries but have not become New York Convention countries, or made in certain United Kingdom territories. The procedure for applying for enforcement is the same as described above. Section 37 of the 1950 Act sets out the grounds on which enforcement may be refused.

The Arbitration (International Investment Disputes) Act 1966

The Arbitration (International Investment Disputes Act) 1966 provides for the enforcement of Washington Convention awards. The procedure for applying for enforcement is the same as described above. The grounds for refusing enforcement are limited by the Convention.

Common law

A successful party may bring an ‘action on the award’ at common law. This is an independent cause of action based on breach of the arbitration agreement, which accrues when the unsuccessful party fails to honour the award. General principles of contract law apply.

19. CONFIDENTIALITY OF PROCEEDINGS

19.1 What are the confidentiality requirements of the arbitral process, ie, existence of the arbitration, pleadings, documents produced, hearing, award?

The issue of confidentiality is not addressed in the 1996 Act. The Departmental Advisory Committee, while acknowledging that privacy and confidentiality were two basic tenets of English arbitration law, concluded that given the exceptions and qualifications that exist, the formulation of any statutory principles would be likely to create new impediments to the practice of English arbitration, and in particular, to add to English litigation on the issue (see DAC Report, paras 11–17).

The principle that, under English law, arbitration is private and confidential has been recognised in a number of cases and articles (see eg Ali Shipping Corpn v Shipyard Trogir [1999] 1 WLR 314, CA; and Patrick Neill QC ‘Confidentiality in Arbitration’ (1996) 12 Arbitration International 287). It is often said that these are implied terms of the arbitration agreement, although that characterisation has been questioned by the Privy Council (see Associated Electric & Gas Insurance Services Ltd v European Reinsurance Co of Zurich [2003] UKPC 11).

Consistent with upholding the privacy and confidentiality of arbitration, CPR 62.10 provides that the court may order that an arbitration claim be heard either in public or in private. In addition, subject to an order to the contrary, hearings, save for applications concerning a point of law, must be heard in private, although the court’s judgment will most likely be made public (see Department of Economics Policy and Development of the City of Moscow v Bankers Trust & ors [2004] EWCA Civ 314).