International arbitration law and rules in England and Wales

There is a notoriously high hurdle to overcome in order successfully to challenge an arbitration award under English law. In figures published by the Commercial Court in 2018, 112 challenges were brought under section 68 of the Arbitration Act between 2015 and mid-2017, of which only one was successful.

1.1.1 The Arbitration Act 1996 (English Arbitration Act) came into force on 31 January 1997. The English Arbitration Act:

• consolidated and updated the existing legislation on arbitration;
• codified legal rules and principles established by case law;
• brought English law more into line with internationally recognised principles of arbitration law;
• sought to make arbitration in England more attractive both to domestic and to international users;
• is broadly based on the Model Law (1985), 1 UNCITRAL Model Law on International Commercial Arbitration (1985) but applies equally to domestic and to international arbitration;
• goes beyond the scope of the Model Law (1985) and contains a near-comprehensive statement of the English law of arbitration;
• is intended to be user-friendly, has a logical structure and is written in plain English;
• states what the objective of arbitration is, although it does not attempt a definition;
• increases the scope of party autonomy;
• strengthens the powers of the arbitral tribunal; and
• limits judicial intervention in the arbitration process while preserving the courts’ powers to provide assistance where this is necessary to make arbitration a fair and efficient dispute resolution procedure.

2.1.1 Before the English Arbitration Act came into force, English arbitration law was scattered over the Arbitration Acts 1950, 1975 and 1979. This legislation applied to different aspects of arbitration and was complemented by, interpreted by and built on a large body of case law. As such it was seen as somewhat inaccessible, and as a process through which the courts were too ready to intervene in the arbitral process.

2.1.2 In the 1980s, the Department of Trade and Industry established the Departmental Advisory Committee on Arbitration Law (DAC) under the Chairmanship of Lord Justice Mustill. One of the key decisions for the DAC was whether to recommend the enactment of the Model Law (1985). Whilst the DAC decided against adopting the Model Law (1985) wholesale, it did recommend that the new arbitration act should, so far as possible, adopt the structure and language of the Model Law (1985) and be clear and accessible. Despite these aspirations, the first draft bill in February 1994 did little more than consolidate the existing statutes of 1950, 1975 and 1979. 

2.1.3 Under the new chairmanship of Lord Justice Saville, the DAC produced an entirely new draft bill by December 1995. After extensive consultation, but with relatively few changes, this became the English Arbitration Act.

2.1.4 Many provisions of the English Arbitration Act appear familiar at first sight, but it implemented a number of radical reforms. The DAC also published reports on the Arbitration Bill in February 1996 and on the English Arbitration Act in January 1997. These do not form part of the English Arbitration Act, but remain authoritative guides to its provisions, may be referred to in court and are frequently relied on by arbitrators.

2.1.5 The procedures for arbitration applications to the courts in England and Wales are now set out in Part 62 and the Practice Direction to Part 62 of the Civil Procedure Rules (CPR). 2 Civil Procedure Rules 1998. (The courts of Scotland and of Northern Ireland follow their own procedure.)

3.1.1 Most commercial disputes are capable of being arbitrated if the parties agree on that form of dispute resolution. 3 English Arbitration Act, s 1(b).  Generally, the courts have not considered the circumstances in which disputes cannot be arbitrated. Where this issue is brought before the courts, however, only limited public policy considerations normally apply. As the DAC noted, “matters which are not arbitrable in England lie almost wholly outside the commercial field.” 4 Per the Departmental Advisory Committee (DAC) on Arbitration Law Report, February 1996.  There are a few exceptions to this rule – for example, where the courts are concerned that the arbitral process may breach one of the party’s statutory rights. The courts have held that where an employee has statutory rights entitling them to have their case heard before an employment tribunal, it is not possible to submit the dispute to arbitration as the sole means of deciding the dispute. 5 Clyde & Co LLP v Bates Van Winkelhof [2011] EWHC 668 (QB).

3.2.1 The English Arbitration Act applies to all arbitrations (whether ad hoc or institutional), the legal “seat” or “place” of which is in England and Wales or Northern Ireland. 

3.2.2 Certain provisions of the English Arbitration Act apply even if the place of the arbitration is outside England, Wales and Northern Ireland, or if no place has been designated or determined 6 A distinction is made between “designated” and “determined” in the English Arbitration Act, s 3. “Designated” refers to the express or implied agreement of the parties as to the seat, or the power of the arbitral institution or arbitrators to determine the seat. In the absence of any such agreement, the court may itself “determine” the seat by reference to other relevant circumstances.  in the arbitration agreement. These include provisions concerning the:

• stay of legal proceedings; 7 English Arbitration Act, s 9-11.
• enforcement of awards; 8 Ibid, s 66
• securing of the attendance of witnesses; 9  Ibid, s 43. and
• court’s powers in support of arbitral proceedings. 10 Ibid, s 44.

3.2.3 The provisions of Part I of the English Arbitration Act apply to all arbitrations conducted pursuant to an arbitration agreement. Part II of the English Arbitration Act deals with consumer arbitrations and arbitrations conducted on a statutory basis. Part III deals with the recognition and enforcement of foreign awards and Part IV contains general provisions. This chapter focuses on the provisions of Part I and Part III of the English Arbitration Act.

3.3.1 The English Arbitration Act is founded on and is to be construed in accordance with three guiding principles: fairness, party autonomy and limited intervention by the courts. 11 Ibid, s 1.

Fairness

3.3.2 The English Arbitration Act states that the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense. 12 Ibid, s 1(a).  This is primarily a reflection of the rules of natural justice, but there is an additional emphasis on avoiding unnecessary costs and delay. The principle is also given effect in the general duties imposed on the arbitral tribunal by Section 33 and on the parties by Section 40 (discussed in paragraphs 7.3.2 and 7.3.4 below). 

Party autonomy

3.3.3 The English Arbitration Act states that the parties shall be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest. 13 Ibid, s 1(b).

3.3.4 These “safeguards” are provided by the mandatory provisions of Part I of the English Arbitration Act, which apply regardless of any agreement by the parties to the contrary. The English Arbitration Act is structured in such a way as to complement the mandatory provisions with two types of additional provisions: first, those which apply only if the parties expressly agree (ie the parties have “contracted in”); and, secondly, further provisions which apply automatically unless the parties expressly agree otherwise (ie the parties have “contracted out”). 

Limited intervention by the courts

3.3.5 The English Arbitration Act limits the scope for court intervention in the arbitral process and provides that the courts shall not intervene except as expressly provided by the English Arbitration Act. 14 Ibid,s 1(c). This principle is a corollary of party autonomy. At the same time, the English Arbitration Act reduces the scope for obstructive parties to delay arbitral proceedings by making applications to the courts. It does so through the following provisions: 

• mandatory stay of court proceedings in favour of arbitration; 15 Ibid, s 9.
• arbitral proceedings to continue and the award may be made pending a decision of the court on the arbitral tribunal’s jurisdiction; 16 Ibid, s 32(4).
• the arbitral tribunal (not the court) can order security for costs; 17 Ibid, s 38(3).
• extension of an arbitral tribunal’s powers in case of party default; 18 Ibid, s 41.  and
• the court may exercise such powers as it has only if the arbitral tribunal has no equivalent power. 19 Ibid, s 44(5).

4.1.1 Section 5 of the English Arbitration Act stipulates that the arbitration agreement must be made in writing. This requirement is construed broadly so that it can be satisfied not only if there is a written agreement as such, but also if the agreement is contained in an exchange of communications in writing, or if the agreement is merely evidenced in writing or is reached otherwise than in writing but by reference to terms which are in writing (eg general terms and conditions). The writing requirement is also satisfied if there is an exchange of submissions in arbitral or legal proceedings in which the existence of an arbitration agreement is alleged by one party and not denied by the other. The exchange of written submissions between the parties is then taken to constitute the written arbitration agreement. Finally, an agreement is considered to be in writing even if it is recorded by any other means. 20 Ibid, s 5(6).

4.1.2 Section 6(2) of the English Arbitration Act clarifies that a reference in a main agreement to a separate written arbitration clause, or to a document containing an arbitration clause, constitutes an arbitration agreement if the reference is such as to make that clause part of the main agreement. However, the incorporation of the arbitration agreement by reference requires the use of clear and unambiguous wording. 21 Aughton Ltd v MF Kent Services Ltd [1991] 57 B.L.R. 1.; see also Habas Sinai Ve Tibbi Gazlar Istihsal Endustrisi AS v Sometal Sal [2010] EWHC 29 (Comm); see also Barrier Ltd v Redhall Marine Ltd [2016] EWHC 381 (QB) where the court held that a “reasonable person reading the sub-contract would have had no doubt that the contractor’s standard terms [which contained an arbitration clause] were incorporated”. Whether an arbitration clause has been effectively incorporated is an issue of construction and the intention of the parties is paramount. Hence, where the term to be incorporated is contained in a separate contract to which one or more of the contracting parties is not a party, incorporation by reference may not be effective unless the parties expressly refer to the arbitration clause itself rather than the contract in which it is contained. 22 See, for example, Modern Building (Wales) Ltd v Limmer & Trinidad Co Ltd [1975] 2 All ER 549 (Modern Building (Wales) Ltd); Giffen (Electrical Contractors) Ltd v Drake & Scull Engineering Ltd (1993) 37 Con LR 84; Airbus SAS v Generali Italia SPA and others [2019] EWCA Civ 805.

4.2.1 Pursuant to Section 7 of the English Arbitration Act, the arbitration agreement is treated as separate from the main commercial agreement into which it has been incorporated and the arbitration clause therefore survives the invalidity, non-existence or ineffectiveness of the main agreement. 23 The court has upheld the principle of separability in a series of cases, see Fiona Trust & Holding Corporation and ors v Privalov and ors [2007] UKHL 40 and El Nasharty v J Sainsbury PLC [2007] EWHC 2618 (Comm) and Beijing Jianlong Heavy Ind. Group v Golden Ocean Group Ltd [2013] EWHC 1063 (Comm).

4.3.1 The mandatory provisions of Part I of the English Arbitration Act are listed in Schedule 1 to the English Arbitration Act. They deal with such matters as:

• the duty of the court to stay its proceedings; 24 English Arbitration Act, s 9.
• the power of the court to extend time limits; 25 Ibid, s 12, which applies where an arbitration agreement provides that a claim shall be barred, or the claimant’s right extinguished, unless the claimant takes, within a time fixed by the agreement, some step (a) to begin arbitral proceedings or (b) to begin other dispute resolution procedures, which must be exhausted before arbitral proceedings can be begun.
• the power of the court to remove an arbitrator; 26 Ibid, s 24.
• joint and several liability of parties to arbitrators for fees and expenses; 27 Ibid, s 28.
• immunity of arbitrators; 28 Ibid, s 29.
• objections to the arbitral tribunal’s jurisdiction; 29 Ibid, s 31.
• the general duties of the arbitral tribunal; 30 Ibid, s 33.
• the general duties of the parties; 31 Ibid, s 40.
• enforcement of an award; 32 Ibid, s 66.
• challenges to the award; 33 Ibid, s 67-68. and
• the immunity of arbitral institutions. 34 Ibid, s 74.

4.3.2 All other provisions of Part I of the English Arbitration Act are non-mandatory and the parties are free to make their own arrangements. If the parties do not make any such arrangements, the non-mandatory provisions form a set of “model rules” which will apply in the absence of any express agreement on a point by the parties. The parties are free to deviate from such “model rules” and adopt the procedural rules laid down by an arbitral institution or other body. 35 Ibid, s4(3).

4.3.3 Where parties agree to incorporate institutional rules into their arbitration agreement, such as those published by the London Court of International Arbitration (LCIA) 36 For the full text of the LCIA Arbitration Rules (2020), see https://www.lcia.org/Dispute_Resolution_Services/lcia-arbitration-rules-2020.aspx. or the ICC International Court of Arbitration, 37 For the full text of the ICC Arbitration Rules (2021), see https://iccwbo.org/dispute-resolution-services/arbitration/rules-of-arbitration/ the English Arbitration Act provides that this amounts to parties making their own arrangements and therefore displaces non-mandatory provisions if the arbitration rules are contrary to those provisions. 38 English Arbitration Act, s 4(3).

4.4.1 Regarding the law applicable to the arbitral proceedings, the courts have confirmed their willingness to recognise and enforce choices of law in parties’ arbitration agreements. 39 C v D [2007] EWCA Civ 1282. If the parties choose England as the seat of the arbitration, they will be taken to have agreed that the English courts shall have exclusive jurisdiction over the arbitration and the mandatory provisions of the English Arbitration Act will apply, including those relating to the parties’ ability to challenge the award under Sections 67 and 68 of the English Arbitration Act. 40 Ibid. Specifically, the courts have confirmed that if England is chosen as the seat of an arbitration, the lex arbitri of any court proceedings regarding the award given by an arbitral tribunal will be English law and the proper jurisdiction of such proceedings is the English courts, even if the underlying contract is governed by the laws of a different jurisdiction. 41 Naviera Amazonica Peruana SA v Compania Internacional de Seguros de Peru [1988] 1 Lloyd’s Rep. 116 (followed in Shagang South-Asia (Hong Kong) Trading Co. Ltd v Daewoo Logistics [2015] EWHC 194 (Comm)).

4.4.2 Where there is no express choice of law governing the construction of the arbitration agreement itself, there are two possible approaches to determining which law will govern the arbitration agreement – the law governing the underlying contract or the law of the seat of arbitration. An English court applying common law rules will look for the law expressly or impliedly chosen by the parties or, in the absence of such choice, the law with which the arbitration agreement is most closely connected. 

4.4.3 The Supreme Court provided helpful clarification on the question in Enka Insaat Ve Sanayi AS v Insurance Company Chubb. 42 [2020] UKSC 38. The contract provided for disputes to be referred to ICC arbitration in London and that Russian law was to govern specific provisions of the contract. However, it had no express governing law provision.  It held that where the law applicable to the arbitration agreement is not specified, a choice of law governing the underlying contract will generally apply to an arbitration agreement. The choice of a different country as the seat of the arbitration is not, without more, sufficient to negate an inference that a choice of law to govern the contract was intended to apply to the arbitration agreement. However, if there is no choice of law (express or implied), the arbitration agreement will be governed by the law with which it is most closely connected, which, as a general rule, will be the law of the seat. 43 The Supreme Court applied the same principles set out in Enka v Chubb in its subsequent judgment in Kabab-Ji Sal (Lebanon) v Kout Food Group (Kuwait) [2021] UKSC 48. It reaffirmed that a general choice of law clause in a contract containing an arbitration agreement will normally be a sufficient indication of the law governing that arbitration agreement.  

4.4.4 With respect to the law applicable to the substance of the dispute, Sections 46(1) and (3) of the English Arbitration Act provide that the arbitral tribunal shall decide the dispute in accordance with the law chosen by the parties as applicable to the substance of the dispute, or, if and to the extent that there is no such choice or agreement, it shall apply the law determined by the conflict of law rules it considers applicable. The parties’ choice of law will be taken to exclude conflict of law rules and to refer to the substantive laws of that particular jurisdiction only. 

4.4.5 By the arbitration agreement (or on some other basis) the parties can also grant the arbitral tribunal the power to decide the dispute on the basis of the lex mercatoria or ex aequo et bono (also referred to as amiable composition, where arbitrators dispense with the consideration of law and consider solely what would be a fair and equitable resolution to the dispute). However, these are very rarely agreed upon in practice, given the uncertainties over the scope of the lex mercatoria and the principles to be applied in making a decision ex aequo et bono. 

4.4.6 The procedure for determining the applicable law in the absence of the parties’ choice remains largely unchanged following Brexit and the end of the transition period. 44 The UK- EU Withdrawal Agreement provided for a “transition period” to 31 December 2020. During this period, the UK was treated for most purposes as if it were still an EU member state, and most EU law (including as amended or supplemented) continued to apply to the UK. Prior to Brexit, under English conflict of law rules, the applicable law of a contract (in the absence of an agreement by the parties) would in most cases be determined in accordance with the Regulation on the Law Applicable to Contractual Obligations (Rome I), which came into force on 17 December 2009. The Regulation on the Law Applicable to Non-Contractual Obligations (Rome II), which came into force on 11 January 2009, sets out choice of law rules for non-contractual obligations such as torts and equitable claims. Where the arbitration agreement is drafted widely to include disputes that arise from non-contractual obligations, the determination of the applicable law may also include reference to Rome II.

4.4.7 The UK has retained Rome I and Rome II as they do not require reciprocity for their operation. Accordingly, with effect from 1 January 2021, Rome I, Rome II and EU-derived domestic legislation dealing with the law applicable to contractual and non-contractual obligations are “retained EU law” within the meaning of the European Union (Withdrawal) Act 2018 (Withdrawal Act) and the UK will apply retained versions of Rome I and Rome II when determining the governing law of contractual and non-contractual obligations. 

4.4.8 The Law Applicable to Contractual Obligations and Non-Contractual Obligations (Amendment etc) (EU Exit) Regulations 2019 make further provision for the implementation of this intention by making technical amendments (mostly in relation to terminology, eg replacing “Member States” with “relevant states”) to the statute and regulations implementing Rome I and II in the UK in order to ensure that, after Brexit, they continue to function as before. 

4.4.9 Even if the relevant sections of the Withdrawal Act were to be repealed, English courts would continue to recognise foreign governing law clauses at common law.

5.1.1 The parties are free to agree on the number of arbitrators and whether there is to be a chair or umpire. 45 English Arbitration Act, s 15(1). However, an agreement that determines the number of arbitrators as two or any other even number shall be understood as requiring the additional appointment of a chair, unless the parties agree otherwise. 46 Ibid, s 15(2). If there is no agreement on the number of arbitrators, the arbitral tribunal shall consist of a sole arbitrator. 47 Ibid, s 15(3). If the parties have agreed that there is to be a chair or umpire, they are free to agree on his or her functions. 

5.1.2 Where there is no agreement on the function of the chair or umpire, Sections 20 and 21 of the English Arbitration Act contain default provisions. These default provisions provide, in the case of a chair, that decisions, orders and awards shall be made by all or a majority of the arbitrators (including the chair) and that the view of the chair shall prevail in relation to a decision, order or award, in respect of which there is neither unanimity nor a majority. 48 Ibid, s 20(3) and s 20(4). For an umpire, the default position is that the umpire shall attend the arbitral proceedings and be supplied with the same documents and other materials as supplied to the other arbitrators, with decisions being made by the arbitrators unless and until they cannot agree, in which case the umpire shall replace the arbitral tribunal and make decisions, orders and awards as if he or she were sole arbitrator. 49 Ibid, s 21(3) and s 21(4).  

5.1.3 The procedure for the appointment of the arbitral tribunal is determined by the arbitration agreement between the parties. Where the parties have not agreed an appointment procedure, Section 16 of the English Arbitration Act makes detailed provision for the appointment of the arbitral tribunal.

5.1.4 In the event that each party to an arbitration agreement is to appoint an arbitrator but one party refuses or fails to do so within the time specified, the other party, having duly appointed its arbitrator, may give notice in writing to the party in default that it proposes to appoint its arbitrator to act as sole arbitrator. If the party in default does not make the required appointment and does not notify the other party that it has done so within seven days of that notice, the other party may appoint its arbitrator as sole arbitrator and the arbitrator so appointed may proceed to make an award which is binding on both parties. 50 Ibid, s 17.

5.1.5 If the agreed appointment procedure fails to constitute an arbitral tribunal, the courts have specific powers to appoint, or assist with securing the constitution of, an arbitral tribunal upon application by one of the parties. 51 Ibid, s 18. See also Shagang South-Asia (Hong Kong) Trading Co Ltd v Daewoo Logistics [2015] EWHC 194 (Comm).

5.2.1 Pursuant to Section 23 of the English Arbitration Act, the authority of an arbitrator can be revoked by agreement of the parties in writing or by an arbitral or other institution or person vested by the parties with powers in that regard.

5.2.2 The court may order the removal of an arbitrator upon application by one of the parties on any of the following grounds:

• circumstances exist which may give rise to justifiable doubts as to an arbitrator’s impartiality (discussed further at paragraph 10.3.6); 52 See, for example, Cofely Ltd v Bingham & Another [2016] EWHC 240 (Comm) where the courts made it clear that they would not accept challenges of bias “lightly” (at paragraph 117 per Hamblen J).
• an arbitrator does not possess the agreed qualifications;
• an arbitrator is physically or mentally incapable of conducting the arbitral proceedings or there are justifiable doubts as to his or her capacity to do so; or
• an arbitrator fails to conduct the arbitral proceedings properly or with reasonable speed and substantial injustice has been or will be caused to the applicant. 53 Ibid, s 24.

5.2.3 The arbitral tribunal may, however, continue the arbitral proceedings in the meantime and proceed to make an award while the application to the court is pending. The challenge procedure cannot, therefore, be abused to delay the arbitral proceedings for tactical reasons.

5.3.1 Where an arbitrator ceases to hold office (whether it is due to resignation, removal or death) and the parties have not agreed whether, and if so, how the vacancy is to be filled, Section 27 of the English Arbitration Act provides that Section 16 or Section 18 procedures (discussed at paragraphs 5.1.3 and 5.1.5 above) apply to the filling of the vacancy as they would apply to the original appointment.

5.4.1 Section 28 of the English Arbitration Act makes express provision for the parties’ liability to the arbitrators for fees and expenses. Section 29 provides that arbitrators enjoy immunity from claims unless they act in bad faith. It provides that the “parties are jointly and severally liable to pay to the arbitrators such reasonable fees and expenses (if any) as are appropriate in the circumstances.”

6.1.1 Section 30 of the English Arbitration Act gives the arbitral tribunal the power to rule on its own jurisdiction. It is up to the arbitral tribunal to decide if there is a valid arbitration agreement, whether the arbitral tribunal is properly constituted and which, if any, of the disputes referred to arbitration are within the scope of the arbitration agreement. 

6.1.2 However, if agreed in writing by the parties or in certain circumstances with the permission of the arbitral tribunal, the courts may determine preliminary points of jurisdiction upon application by one of the parties. 54 Ibid, s 32.  The arbitral tribunal’s decision on jurisdiction may also be subject to a full rehearing by the courts. 55 Ibid, s 67 and see below at para [10.3.1 and 10.3.2]

6.1.3 Section 31 of the English Arbitration Act requires that any objection to the substantive jurisdiction of the arbitral tribunal that a party may have, must be raised at the earliest possible stage in the proceedings, ie before that party takes any steps in the proceedings to contest the merits of any matter in relation to which the arbitral tribunal may have jurisdiction. 

6.1.4 The right to object to the arbitral tribunal’s lack of substantive jurisdiction (and to other irregularities affecting the arbitral tribunal or proceedings) may be lost if the objection is not made at the earliest opportunity. 56 Ibid, s 73.

6.2.1 Under Section 38(1) of the English Arbitration Act, the parties are free to agree on the powers exercisable by the arbitral tribunal. It is therefore possible for the parties to confer on the arbitral tribunal the power to order interim measures, either by incorporating the institutional rules of an arbitral institution into their arbitration agreement or by express provision in the arbitration agreement. 

6.2.2 In the absence of any agreement by the parties on the issue of interim measures, Section 38(4) of the English Arbitration Act empowers the arbitral tribunal to give directions relating to property which is the subject of the arbitral proceedings and which is owned by or is in the possession of a party to the dispute. Additionally, the arbitral tribunal may “give directions to a party for the preservation of evidence for the purposes of the proceedings”. 57 Ibid, s 38(6).

6.2.3 Unless otherwise agreed by the parties, the English Arbitration Act does not confer upon arbitrators the power to secure the sum in dispute by an order taking effect as an injunction, although it may be possible to seek a freezing injunction from the High Court in support of arbitral proceedings. 58 Ibid, s 44(2)(e) and see below at section [9.6].

6.3.1 The rules governing an arbitral tribunal’s jurisdiction to hear an investment treaty arbitration are set out in the relevant bilateral investment treaty (BIT) or multilateral investment treaty (MIT) 59 An example is the Energy Charter Treaty, which establishes a legal framework for energy trade, transit and investment between member states. The full text is accessible at https://www.energycharter.org/fileadmin/DocumentsMedia/Legal/ECTC-en.pdf . and arbitration rules. The most commonly used rules in investment arbitration are the Convention on the Settlement of Investment Disputes between States and Nationals of Other Member States (ICSID) Rules 60 The full text of the ICSID Arbitration Rules (2022) is available at https://icsid.worldbank.org/rules-regulations/convention/arbitration-rules/introductory-note. and the UNCITRAL Rules. 61 The full text of the UNCITRAL Arbitration Rules (2010) can be accessed at https://docs.pca-cpa.org/2016/01/UNCITRAL-2010-English.pdf.

6.3.2 On 6 March 2018, the Court of Justice of the European Union (CJEU) held that Articles 267 and 344 of the Treaty on the Functioning of the European Union (TFEU) must be interpreted as precluding arbitration clauses in BITs between EU member states, such as the arbitration provision in the Netherlands-Slovakia BIT. 62 Slovak Republic v Achmea BV (Case C-284/16). The CJEU noted that under Article 344 of the TFEU, member states undertake not to submit a dispute relating to the interpretation or application of the EU treaties to any method of settlement other than those provided for in the treaties. Article 344 of the TFEU enshrines the principle that an international agreement cannot affect the allocation of powers fixed by the Treaty on the European Union (TEU) 63 Article 19 of the TEU requires each member state to establish national legal systems that ensure EU law will be applied in full. and the TFEU as the observance of EU legal system should be ensured by the CJEU.

6.3.3 The CJEU also emphasised that the judicial system in the treaties aims at ensuring the consistent and uniform application and interpretation of EU law across the member states, and the preliminary reference system under Article 267 of the TFEU plays a crucial role in this regard. However, as an arbitral tribunal cannot be classified as a court of tribunal “of a Member State” within the meaning of Article 267 of the TFEU, it is not entitled to request a preliminary ruling on the interpretation of EU law from the CJEU. Yet, as noted by the CJEU, when deciding a case under a BIT such as the Netherlands-Slovakia BIT, the arbitral tribunal must take into account both the BIT provisions and the law of the contracting state party, so the arbitral tribunal may be called upon to interpret and apply EU law. The CJEU concluded that the dispute settlement mechanism in such a BIT could prevent disputes concerning EU law from being resolved in a manner ensuring the full effectiveness of EU law, which would have an adverse effect on the autonomy of the EU legal order. Therefore, the CJEU held that BIT arbitration mechanisms such as that in the Netherlands-Slovakia BIT are precluded by the TFEU.

6.3.4 On 15 and 16 January 2019, the EU member states (including the UK) issued declarations stating their views on the implications of Achmea (namely that all arbitration clauses in existing intra-EU BITs are inapplicable) and undertook to terminate all intra-EU BITs (January declarations). On 24 October 2019, the European Commission announced that EU member states had reached agreement on a treaty for the termination of all intra-EU BITs, giving effect to the January declarations. The text of the treaty provides (in summary) that: 

• all intra-EU BIT arbitrations that were concluded prior to the Achmea judgment will not be affected; 
• intra-EU BIT arbitrations that were initiated prior to the Achmea judgment and which have not yet been concluded will be subject to a “structured dialogue” settlement procedure within six months of the termination of the relevant BIT; and
• any intra-EU BIT arbitrations that were initiated on or after the date of the Achmea judgment are null and void.

6.3.5 On 5 May 2020, 23 EU member states signed an agreement to terminate all existing intra-EU BITs including their sunset clauses (Termination Treaty). The UK did not sign the Termination Treaty and the EU brought infringement proceedings against the UK for its failure to terminate its BITs. 

6.3.6 Concerns have been raised over the compatibility of the Termination Treaty with the rule of law and the principle of non-retroactivity, and it may yet be subject to challenge. The current position, however, is that the validity of the arbitration agreements invoked in intra-EU BIT arbitrations (and the enforceability of any awards rendered under them) commenced following Achmea is uncertain. The validity of arbitration agreements invoked in intra-EU BIT arbitrations commenced before Achmea may be protected by the principle of legitimate expectation. However, the enforceability of any awards rendered under them may be uncertain, particularly in arbitrations not commenced under the ICSID Rules.

6.3.7 Respondent states have sought to rely on Achmea to challenge the jurisdiction of arbitral tribunals appointed in investment treaty arbitrations concerning intra-EU BITs. However, a growing number of post-Achmea ICSID tribunals have resisted such challenges and held that Achmea ruling did not apply to the intra-EU BIT disputes with which they had been seised. 64 Marfin Investment Group v The Republic of Cyprus, ICSID Case No. ARB/13/27; UP and CD Holding Internationale v Hungary, ICSID Case No. ARB/13/35; UniCredit Bank Austria AG and Zagrebačka Banka d.d. v Republic of Croatia, ICSID Case No. ARB/16/31; Cyprus Popular Bank Public Co Ltd v Hellenic Republic, ICSID Case No. ARB/14/16; Sodexo Pass International SAS v Hungary, ICSID Case No. ARB/14/20; United Utilities (Tallinn) BV and Aktsiaselts Tallinna Vesi v Republic of Estonia, ICSID Case No. ARB/14/24 and Magyar Farming Company Ltd, Kintyre Kft and Inicia Zrt v Hungary, ICSID Case No. ARB/17/27.

6.3.8 Post-Brexit, disputes between investors from the UK against EU member states whether under BITs (assuming they remain in place) or MITs such as the Energy Charter Treaty, and vice versa, are no longer intra-EU. Therefore, this jurisdictional objection should fail. The UK-EU Trade and Cooperation Agreement (TCA), which governs the relationship following the end of the Brexit transition period on 31 December 2020, is silent on the future of the UK’s BITs with EU member states and preserves that position. Notably, this issue was raised but has not been decided. 65 AS PNB Banka and other v Republic of Latvia (ICSID Case No ARB/17/47). The effect is continued protection in the UK for investors with investments in the current 11 EU member states with which the UK has BITs. 66 The UK is currently party to BITs with the following EU member states: Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Romania, Slovakia, and Slovenia. Poland unilaterally terminated its BIT with the UK in 2019. However, its 15-year sunset clause remains applicable. Investors may still bring claims against the state parties to the BIT in respect of investments that existed prior to Poland's unilateral termination.   

7.1.1 England and Wales is a common law jurisdiction. The legal process has traditionally emphasised the importance of procedural issues and a number of English procedural concepts. These concepts are not part of the continental European civil law tradition, although they are familiar in other common law jurisdictions such as the US, Canada, Australia and most Commonwealth member states. These procedural elements include the disclosure and inspection of documents, the exchange of witness statements, cross-examination of witnesses and use of party-appointed expert witnesses. 

7.1.2 There was intended to be a significant shift in approach under the Civil Procedure Rules (CPR) which govern the conduct of cases in the English courts, towards more proactive case management by the courts. However, English legal proceedings in essence remain adversarial in approach (ie party-driven with the judge adopting the position of arbiter between the opposing parties) rather than inquisitorial (ie more reliant on the judge taking charge of progressing a case). One of the advantages of arbitration over litigation as a means of settling international commercial disputes is that, because of its flexibility, arbitration can transcend the confines of national legal systems and the parties can tailor a procedure to suit their particular needs. 

7.1.3 English arbitral proceedings under the English Arbitration Act are not tied to English court procedure. The English Arbitration Act enables arbitrators to use wide-ranging powers akin to the case management techniques employed under the continental European procedural system to ensure that the arbitration progresses efficiently, at proportionate costs and in the interests of the parties.

7.2.1 Unless otherwise agreed by the parties, Section 14(4) of the English Arbitration Act provides that arbitral proceedings are commenced when one party serves on the other a written notice requiring it to appoint an arbitrator or to agree to the appointment of an arbitrator. The court will interpret this broadly and flexibly and an implied request to appoint an arbitrator has been found to be sufficient for the commencement of an arbitration. 67 Charles M Willie Co (Shipping) Ltd. v Ocean Laser Shipping Ltd, The Smaro [1999] 1 Lloyd’s Rep 225. However, in order to avoid any uncertainty in this respect, the written notice of arbitration should expressly call upon the other party to appoint an arbitrator. Care should also be taken when a party is seeking to commence arbitration proceedings against more than one respondent, to avoid a challenge to the award if the parties disagree on the interpretation of the arbitration notice. 68 Agarwal Coal Corp (S) Pte Ltd v Harmony Innovation Shipping Pte Ltd [2017] EWHC 3556 (Comm).

7.2.2 Section 14 does not deal with the matters in dispute that a party wishes to refer to arbitration. A written notice should clearly specify such matters but be drafted widely enough to ensure all potential matters in dispute are referred to arbitration.

7.3.1The English Arbitration Act expressly defines and imposes duties on the parties and the arbitrators.

General duties of the arbitral tribunal

7.3.2 Section 33(1) is one of the key provisions in the English Arbitration Act and provides that the arbitral tribunal shall act fairly and impartially, shall give each party the right to be heard and shall adopt procedures that are suitable for a particular case to avoid unnecessary delay or expense.

7.3.3 The express duty to avoid unnecessary delay and expense was first introduced by the English Arbitration Act and is an important provision. It is intended to encourage arbitrators to impose strict timetables to ensure that the arbitral proceedings are progressed with all due expedition.

General duties of the parties

7.3.4 Under Section 40 of the English Arbitration Act, the parties have a general duty to do everything necessary for the proper and expeditious conduct of the arbitral proceedings and, corresponding to the duties imposed on the arbitral tribunal by Section 33, a duty to comply with the arbitral tribunal’s directions without delay.

Procedural powers of the arbitral tribunal

7.3.5 Procedural and evidential matters are decided by the arbitral tribunal unless the parties agree otherwise. 69 English Arbitration Act, s 34(1).  Section 34(2) of the English Arbitration Act sets out a non-exhaustive list of the procedural issues to be determined by the arbitral tribunal. Those powers give arbitrators the ability to impose expedited procedures in suitable cases and to dispense with, for example:

•  written submissions; 70 Ibid, s 34(2)(c).
• disclosure; 71 Ibid, s 34(2)(d).
• interrogatories (ie questions put to and answered by the parties prior to trial); 72 Ibid, s 34(2)(e).
• oral evidence; 73 Ibid, s 34(2)(f).  and
• oral hearings. 74 Ibid, s 34(2)(h).

7.3.6 The arbitral tribunal may refer to Section 34 as a guide and may dispense with procedures that are not appropriate in the circumstances of a particular case. Nevertheless, arbitrators must exercise these powers with care so as not to deprive a party of a reasonable opportunity to put its own case or to respond to its opponent’s case. 75 One of the arbitral tribunal’s general duties under s 33(1)(a) of the English Arbitration Act. If the arbitral tribunal acts contrary to this obligation, the aggrieved party may be able to challenge any subsequent award in the courts on the grounds of “serious irregularity” under Section 68 of the English Arbitration Act. 76 See below at [10.3]. However, the courts have generally approached this issue in favour of arbitrators actively managing their arbitrations. 77 Margulead Ltd v Exide Technologies [2004] EWHC 1019 (Comm) (as applied in Pakistan v Broadsheet LLC [2019] EWHC 1832 (Comm)). See also Primera Maritime (Hellas) Ltd and other companies v Jiangsu Eastern Heavy Industry Co Ltd and another company [2013] EWHC 3066 (Comm)). The threshold of “serious irregularity” is a high bar to meet. It concerns a failure to adhere to due process as opposed to whether or not the arbitral tribunal came to the right conclusion.

7.3.7 The English Arbitration Act provides the arbitral tribunal with further express powers, including the power to:

• appoint its own expert(s); 78 English Arbitration Act, s 37.
• order the claimant to provide security for costs; 79 Ibid, s 38(3).
• direct that a party or witness shall be examined on oath and, for that purpose, to administer the necessary oath; 80 Ibid, s 38(5).
• order interim payments to be made or to make other provisional awards where the parties have agreed that the arbitral tribunal should have such powers; 81 Ibid, s 39.
• make an award dismissing a claim for want of prosecution where there has been an inordinate and inexcusable delay on the part of the claimant in pursuing the claim and where the delay prejudices the respondent; 82 Ibid, s 41(3).
• continue the proceedings in the absence of a party who fails to attend a hearing of which proper notice was given without showing sufficient cause; 83 Ibid, s 41(4).
• make a peremptory order where a party fails to comply with an order or direction of the arbitral tribunal, which order may be enforceable by the court pursuant to Section 42 of the English Arbitration Act; 84 Ibid, s 41(5).
• make awards on different issues at different times; 85 Ibid, s 47
• award compound interest; 86 Ibid, s 49.  and
• direct that the recoverable costs of the arbitration be limited to a specified amount. 87 Ibid, s 65.

7.3.8 Unless the parties specifically agree, the arbitral tribunal has no power to consolidate different arbitral proceedings or to order concurrent hearings. 88 Ibid, s 35(2).

7.4.1 Pursuant to Section 3 of the English Arbitration Act, the term “seat” of the arbitration means only its “juridical” seat. The fact that the parties have agreed that the place of the arbitration shall be, for example, London, does not prevent the parties or the arbitrators from deciding to hold any part of the arbitral proceedings elsewhere if this is more convenient. 89 Ibid, s 34(2)(a); see also Union of India v McDonnell Douglas Corp [1993] 2 Lloyd’s Rep 48.

7.4.2 The language or languages to be used in the arbitral proceedings and the question of whether translations of documents are to be supplied is a matter for the parties to decide or, in the absence of any agreement by the parties, for the arbitral tribunal to determine. 90 Ibid, s 34(2)(b).

7.5.1 The format and timetable for submissions will be determined by the arbitral tribunal unless agreed by the parties. 91 Ibid, s 34(2)(c). In English arbitral proceedings, the parties’ submissions frequently take the form of formal statements of case, similar but not identical to those used in court proceedings and limited to identifying the issues between the parties. They may, however, take the form of more complete submissions which also deal with the relevant facts, evidence and law, similar to continental European court submissions.

7.6.1 Before the English Arbitration Act came into force, either party could effectively require that an oral hearing be held. Under the English Arbitration Act it is now for the arbitral tribunal to decide whether there should be an oral hearing including submissions and evidence, subject to the parties’ right to agree otherwise. 92 Ibid, s 34(2)(h). In suitable cases the arbitral tribunal can, therefore, make an award on the basis of written proceedings alone. However, in practice it would be rare for the arbitral tribunal to proceed on this basis unless agreed by the parties.

7.7.1 Evidential matters will be determined by the arbitral tribunal, subject to any agreement between the parties. 93 Ibid, s 34(1). These matters might include:

•  whether disclosure and inspection of documents should take place between the parties and, if so, whether the scope of disclosure should in any way be restricted to certain documents or classes of documents; 94 Ibid, s 34(2)(d).  
• whether there should be an exchange of witness statements or expert reports; and
•  whether strict rules of evidence should be followed as to admissibility, or the relevance of, or weight to be given to, the evidence adduced by the parties. 95 Ibid, s 34(2)(f).  

7.7.2 The English Arbitration Act expressly authorises the arbitral tribunal to appoint experts and advisers, but the parties must be given an opportunity to comment on the opinion, information or advice provided by any arbitral tribunal-appointed expert. 96 Ibid, s 37.

8.1.1 Subject to any agreement by the parties on the powers that the arbitral tribunal may exercise, Section 48 of the English Arbitration Act provides that the arbitral tribunal may:

• make a declaration on any matter to be determined in the arbitral proceedings; 97 Ibid, s 48(3).  or
• order the payment of a sum of money in any currency. 98 Ibid, s 48(4).

8.1.2 Furthermore, the arbitral tribunal has the same powers as the courts to:

• grant a permanent injunction; 99 Ibid, s 48(5)(a). Note that s 48(5)(a) does not confer a power to grant an interim injunction in the form of an award, since an award must finally dispose of the issues with which it deals. The parties may, however, have agreed pursuant to s 39 that the arbitral tribunal should have the power to make provisional awards, in which case the arbitral tribunal may issue an interim injunction in the form of a provisional award under that section.
• order specific performance of a contract; 100 Ibid, s 48(5)(b).  or
• order the rectification, cancellation or setting aside of a deed or other document. 101 Ibid, s 48(5)(c).

8.1.3 The arbitral tribunal’s powers to grant interim measures are discussed in paragraph 6.2 above.

8.2.1 In the absence of any agreement between the parties, the arbitral tribunal has a discretionary power to award simple or compound interest, from such dates and at such rates as it considers just, on the whole or part of:

• the amount awarded, in respect of any period up to the date of the award; 102 Ibid, s 49(3)(a).
• any amount claimed in the arbitration and outstanding at the date of commencement of the arbitration but paid before the award was made, in respect of any period up to the date of payment; 103 Ibid, s 49(3)(b).  and/or
• the outstanding amount of any award from the date of the award until payment. 104 Ibid, s 49(4).

8.2.2 The fact that the arbitral tribunal has a discretionary power to award interest does not affect the parties’ rights to claim contractual interest.

8.3.1 Where the parties have agreed that there is to be a chair, they are free to agree the functions of the chair in relation to the making of decisions, orders and awards. 105 Ibid, s 20(1). If, or to the extent that there is no such agreement, decisions, orders and awards shall be made by all or a majority of the arbitrators (including the chair) 106 Ibid, s 20(3). and the view of the chair shall prevail where there is neither unanimity nor a majority. 107 Ibid, s 20(4).

8.3.2 If the parties have agreed that there is to be an umpire, they are free to agree the functions of the umpire and, in particular, whether he or she is to attend the arbitral proceedings and when the umpire is to replace the other arbitrators as the arbitral tribunal with power to make decisions, orders and awards. 108 Ibid, s 21(1).

8.3.3 Where the parties agree that there shall be two or more arbitrators with no chair or umpire, the default position (unless agreed between the parties) is that decisions, orders and awards shall be made by all or a majority of the arbitrators. 109 Ibid, s 22(2). For an explanation of the position where the parties have agreed on an even number of arbitrators, see paragraph [5.1.1] above.

8.4.1 Pursuant to Section 58 of the English Arbitration Act, an award made by the arbitral tribunal pursuant to an arbitration agreement is final and binding on the parties to the arbitration, subject to the limited rights the English Arbitration Act provides for challenge or appeal to the courts. 110 Ibid, s 67-69. See also [10.3] below.

8.4.2 Section 52 of the English Arbitration Act provides that, unless otherwise agreed by the parties, an award shall:

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

8.4.3 Once an award has been made, parties shall be notified without delay, 111 Ibid, s 55(2).  but the arbitral tribunal has the power to withhold the award until the arbitrators’ fees and expenses are paid in full. 112 Ibid, s 56.(1)

8.5.1 If the parties settle their dispute during the course of the arbitration, the arbitral tribunal shall terminate the substantive proceedings and may record the settlement in the form of an agreed award if requested to do so by the parties. 113 Ibid, s 51(2).

8.6.1 Unlike the Model Law (1985), Sections 59-65 of the English Arbitration Act make express provision for the allocation of the costs of the arbitration between the parties. The English Arbitration Act also provides that, unless the parties agree otherwise, the arbitral tribunal may make an award of costs. The costs of the arbitration include the:

• fees and expenses of the arbitrators;
• fees and expenses of any arbitral institution concerned; and
• legal or other costs of the parties. 114 Ibid, s 59(1).

8.6.2 Generally, an award of costs will “follow the event”, 115 This means that the losing party pays the reasonable costs of the arbitration. If a claimant is successful only in part, the costs of the arbitration may be allocated between the parties on a pro rata basis. See, for example, Transition Feeds LLP v Itochu Europe Plc [2013] EWHC 3629 , which emphasised that the outcome of both the appeal and a cross-appeal should be considered in using the costs “follow the event” approach. but the arbitral tribunal has discretion to take other relevant factors into account when making its award on costs. Only reasonably incurred costs of the arbitration and fees and expenses of arbitrators are recoverable. Any doubt as to whether costs were reasonably incurred or were reasonable in amount shall, in general, be resolved in favour of the paying party. 116 English Arbitration Act, s 63(5)(b).

8.6.3 Pursuant to Section 60 of the English Arbitration Act, an agreement between the parties that a party is to pay the whole or part of the costs of the arbitration is only valid if it has been made after the dispute has arisen. Section 60 is a mandatory provision, the purpose of which is to prevent a party who wishes to pursue its claim finding that it is unable to do so because, whatever the result, it has agreed to bear some or all of its own costs. Section 60 does, however, permit such an agreement to be made where the decision to go to arbitration is taken after the dispute has arisen, as it is assumed that in such a case the costs agreement can be at arm’s length. 117 Virdee v Virdi [2003] EWCA (Civ) 41. An arbitrator’s general power to award costs also includes the power to award the costs of third party litigation funding, which it can deem as “other costs” under Section 59(1)(c). 118 Essar Oilfield Services Ltd v Norscot Rig Management Pvt Ltd [2016] EWHC 2361 (Comm).

8.7.1 The English Arbitration Act makes provision in Section 57 for the arbitral tribunal to correct obvious errors, mistakes, omissions or ambiguities in the award, or to make an additional award in respect of claims that were presented to the arbitral tribunal but not dealt with in the award. 119 See Union Marine Classification Services v Comoros [2016] EWCA Civ 239. These powers may be exercised by the arbitral tribunal either on its own initiative, or upon the application of a party, and after hearing representations from the other party. Before a party seeks to challenge an award on the grounds that it is ambiguous or uncertain, they should first seek to ask the arbitral tribunal to correct the award under Section 57(3)(a). Otherwise, their challenge may be barred under Section 70(2). 120 See for example Gracie v Jones [2019] EWHC 1176 (Ch) and X v Y [2018] EWHC 741 (Comm).

9.1.1 The extent to which the courts may interfere in the arbitration process is one of the most important issues for parties to international arbitral proceedings. The English Arbitration Act follows the scheme of the Model Law (1985) in this regard: the courts have no jurisdiction in matters relating to arbitration unless expressly provided by the English Arbitration Act. A distinction can be drawn between the role of the courts: 

• before and during the arbitral proceedings; and
• after the award has been made.

9.1.2 Prior to and during the arbitral proceedings, the powers of the court in relation to arbitral proceedings include:

• stays of proceedings and extensions of time for the commencement of arbitration (mandatory provision); 121 English Arbitration Act, s 9 & 12.
• the appointment or removal of an arbitrator (mandatory provision); 122 Ibid, s 18 and 24, see also paragraphs [5.1.3 and 5.2.2].
• the determination of preliminary points of jurisdiction or law (mandatory provision); 123 Ibid, s 32 and 45.
• the enforcement of peremptory orders made by the arbitral tribunal (non-mandatory provision); 124 Ibid, s 42. and
• making orders in relation to evidence and assets (non-mandatory provision). 125 Ibid, s 43 and 44.

9.2.1 Section 9 of the English Arbitration Act provides that, upon application by a party to an arbitration agreement against whom court proceedings are brought in regard to the same matter, the court must grant a stay of the court proceedings unless satisfied that the arbitration agreement is null and void, inoperative or incapable of being performed. The court has established two threshold requirements for granting a stay of court proceedings under Section 9: 

• there must be a concluded arbitration agreement; and 
• the issue in the court proceedings must be a matter that, under the arbitration agreement, is to be referred to arbitration. 126 Albon (t/a NA Carriage Co) v Naza Motor Trading SDN BHD [2007] EWHC 665 (Ch) (as applied in Joint Stock Company Aeroflot Russian Airlines v Berezovsky and others [2012] EWHC 1610 (Ch)).

9.2.2 The court also has an inherent jurisdiction to order a stay of its proceedings in exceptional circumstances (ie where the court deems proceedings to be vexatious or oppressive) 127 Sabbagh v Khoury [2019] EWCA Civ 1219 or on grounds of forum non conveniens. 128 Civil Jurisdiction and Judgments Act 1982, s 49.  The absence of jurisdiction under Section 9 of the English Arbitration Act to order a stay does not preclude the court’s exercise of this inherent jurisdiction.

9.2.3 Although Section 9 of the English Arbitration Act is silent on the point, the court decision granting or refusing a stay of court proceedings can be appealed, provided permission to appeal is granted by the High Court judge hearing the application for a stay and, if not, by the Court of Appeal. 129 Where a provision of the English Arbitration Act is silent at to appeals, there is no restriction on the right to appeal: Inco Europe Ltd v First Choice Distribution [2000] 1 W.L.R. 586.The issue of whether permission to appeal a court decision on an arbitration issue may be sought from the Court of Appeal or the first instance court depends on the specific wording of the relevant section of the English Arbitration Act under which the claim was brought (subject to certain exceptions).

9.2.4 Several cases on the stay of court proceedings under Section 9 have reached the courts since the English Arbitration Act came into force. 130 See for example Stemcor UK Ltd v Global Steel Holdings Ltd and another [2015] EWHC 363 (Comm) and Lombard North Central plc and another v GATX Corporation [2012] EWHC 1067 (Comm). The case law confirms that the courts’ general approach is to enforce arbitration agreements strictly, even in circumstances where the agreement containing the arbitration clause might have been procured by bribery, 131 Fiona Trust and Holding Corporation & Ors v Privalov & Ors [2007] EWCA Civ 20. and is also the case under the Bribery Act 2010.

9.3.1 An arbitration agreement may provide that a claim shall be time barred, or that the claimant’s right shall be extinguished, unless the claimant begins (within the time fixed by the agreement) either arbitral proceedings or another dispute resolution procedure which must be exhausted before arbitral proceedings may be commenced. In such cases the court may, in limited circumstances, extend the time for taking these steps pursuant to Section 12 of the English Arbitration Act, provided that one of two conditions are met. These are that either:

1. the circumstances arising were outside of the parties’ reasonable contemplation at the time of agreeing the time bar and it would be just to grant an extension; or
2. the conduct of one party renders it unjust to uphold the time bar in question. 132 Lantic Sugar Limited and Copesucar Trading A.V.V. v Baffin Investments Limited [2009] EWHC 3325 (Comm).

Any order under Section 12 does not affect the operation of the Limitation Acts 133 As defined in s 13(4) English Arbitration Act. with regards to time limits for bringing claims. 134 Fiona Trust and Holding Corporation & Ors v Privalov & Ors [2007] EWCA Civ 20.

9.4.1 Under Section 32 of the English Arbitration Act, the courts have the power to determine preliminary points on the substantive jurisdiction of the arbitral tribunal upon the application of a party. Pursuant to Section 45 of the English Arbitration Act and unless the parties agree otherwise, the courts may also, on the application of a party to arbitral proceedings, determine any preliminary points of law arising in the course of the proceedings if satisfied that it substantially affects the rights of one or more of the parties. 135 The court has, for example, been asked to consider as a preliminary legal issue the construction of documents; see Beegas Nominees v Decco Ltd [2003] EWHC 1891 (Ch). This has rarely been used in practice. 136 Beegas Nominees v Decco Ltd [2003] EWHC 1891 (Ch); Taylor Woodrow Holdings Ltd v Barnes & Elliott Ltd [2006] EWHC 1693 (TCC); Secretary of State for Defence v Turner Estate Solutions Ltd [2015] EWHC 1150 (TCC). These are the only three reported cases in which the court’s powers under Section 45 have been used. The court will only consider the application if it is made either with the agreement of all other parties or with the permission of the arbitral tribunal, and if the court is satisfied that the determination of the question is likely to produce substantial cost savings and that the application was made without delay.

9.4.2 While Section 32 of the English Arbitration Act is a mandatory provision, the parties are free to exclude the courts’ jurisdiction under Section 45 of the English Arbitration Act by agreement. An agreement by the parties to dispense with the requirement that the arbitral tribunal give reasons in support of its award will be considered as an agreement also to exclude the courts’ jurisdiction under Section 45. 137 English Arbitration Act, s 45(1).

9.5.1 Unless otherwise agreed by the parties, the courts have the power under Section 44(2) of the English Arbitration Act to order certain defined interim measures in support of arbitral proceedings, including orders preserving evidence and interim injunctions. If the case is urgent, Section 44(3) of the English Arbitration Act also empowers the English court, on the application of a party or proposed party to the arbitral proceedings, to make such orders as it thinks necessary for the purpose of preserving evidence or assets. However, Section 44 of the English Arbitration Act is a non-mandatory provision and the parties may agree that the courts shall have wider powers than those set out in Section 44. If the parties wish to agree that interim relief is to be granted free from the restrictions of Section 44, a clear contractual provision needs to be made to that effect. 138 SAB Miller Africa v East African Breweries Ltd [2009] EWCA Civ 1564.

9.5.2 The interim measures that the court may order include freezing orders, 139 Freezing orders are interlocutory injunctions granted by the court (normally ex parte and on the basis of affidavit evidence) restricting the respondent’s right to dispose of or deal with its assets, requiring the respondent to disclose the nature, value and location of such assets and to provide other information to the applicant. Freezing orders can not only be made in relation to assets located in England and Wales but, in appropriate circumstances, on a worldwide basis. search orders 140 Search orders are also interlocutory injunctions granted by the court (normally ex parte and on the basis of affidavit evidence) entitling the applicant to ‘raid’ and search the respondent’s premises for certain evidence in relation to the subject matter of court proceedings. Search orders are of particular importance in cases of infringement of intellectual property rights but have a wider scope of application. Both freezing and searching orders have been described as ‘nuclear weapons of the law’ and will only be granted in exceptional circumstances and upon various cross-undertakings by the applicant, including a cross-undertaking in damages. Service of an arbitration claim form seeking relief under section 44 of the English Arbitration Act can be effected outside the jurisdiction and in relation to evidence outside of England and Wales, ie a party to an arbitration agreement which is subject to the English Arbitration Act may apply to an English court for an order assisting it with obtaining evidence which is located outside of England and Wales. and anti-suit injunctions. Anti-suit injunctions restrain a person over whom the arbitral tribunal has jurisdiction from continuing with or commencing proceedings in a foreign court that are vexatious or oppressive, or that are in breach of the arbitration agreement. 141 The rationale behind an English court’s willingness to grant an anti-suit injunction lies in its desire to uphold the parties’ contractual agreement. The injunction protects the negative obligation which arises under an arbitration agreement not to commence proceedings in any other forum. See AES Ust-Kamenogorsk v Ust-Kamenogorsk JSC [2013] UKSC 35 at paragraphs 21-28.

9.5.3 Prior to Brexit, the UK was bound by the CJEU’s decision in West Tankers, 142 Allianz SpA and Generali Assicurazione Generali SpA v West Tankers (Case C-185/07) [2009] 1 AC 1138.   which effectively precluded national courts in EU member states from granting anti-suit injunctions. The CJEU held that Council Regulation (EC) 44/2001 on jurisdiction and the recognition and enforcement of civil and commercial matters (Brussels Regulation) 143 The Brussels Regulation – and subsequently its successor Regulation (EU) 1215/2012 of the European Parliament and of the Council on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) (Recast Brussels Regulation) – provides a sophisticated regime that recognises both exclusive and non-exclusive jurisdiction clauses and prevents most forms of forum-shopping in breach of a jurisdiction clause or arbitration clause. did not permit the issuance of anti-suit injunctions by courts of an EU member state to restrain proceedings commenced in another member state in contravention of an arbitration agreement. 144 In Gazprom OAO [2015] (Case C-536/13) 1 Lloyd’s Rep 610, the CJEU found that the Brussels Regulation did not govern the recognition and enforcement, in a member state, of an arbitral award issued by an arbitral tribunal in another member state, so the arbitral award may be enforced in another member state. This is the case even if enforcing the anti-suit injunction in the award would have the effect of restraining proceedings before the courts of another member state. This decision was said not to conflict with the West Tankers decision because the latter concerned an anti-suit injunction by a member state court, not by a tribunal.

9.5.4 The subsequent Recast Brussels Regulation does not expressly provide that the courts may grant anti-suit injunctions in favour of arbitration. Nonetheless, it clarifies in Recital 12 (unlike its predecessor) that the Recast Brussels Regulation is not intended to prevent member state courts from staying court proceedings where the parties concerned have entered into an arbitration agreement regarding the matter in respect of which the court is seised. However, the CJEU has not yet been called upon to consider the issue of anti-suit injunctions in the context of the Recast Brussels Regulation. In the meantime, the English court in Nori Holdings Ltd v Bank Otkritie Financial Corporation 145 Nori Holdings Ltd v Bank Otkritie Financial Corporation [2018] EWHC 1343 (Comm).  confirmed that West Tankers is good law. 146 The law is well-settled where EU law does not apply. English courts have continued to grant anti-suit injunctions in respect of proceedings brought outside the EU, in violation of valid and binding arbitration agreements. See Midgulf International Ltd v Groupe Chimique Tunisien [2010] EWCA Civ 66.

9.6.7 Brexit may make arbitration more attractive for commercial parties because court judgments will no longer be enforceable under the Recast Brussels Regulation. If the UK does not re-accede to the Lugano Convention 147 OJ L 339, 21.12.2007. and instead reverts to the common law approach, English courts will be able to issue anti-suit injunctions to restrain parties from bringing proceedings before courts of an EU member state, in support of arbitration, as is currently prohibited by West Tankers. 

9.6.8 It is important to note that the courts only have the power to grant interim measures if, or to the extent that, the arbitral tribunal has no power or is unable at that time to act effectively. 148 English Arbitration Act, s 44(5). In practice, the court is most commonly called upon to exercise this power to order interim measures in circumstances where the arbitral tribunal has not yet been constituted. However, the availability of emergency arbitrators may make it harder for parties to satisfy this threshold. 149 See paragraph 14 of the judgment in Seele Middle East FZE v Drake & Scull Int SA Co [2013] EWHC 4350 (TCC). In Gerald Metals SA v The Trustees of the Timis Trust & others [2016] EWHC 2327 the court held that it did not have power to grant urgent relief in support of arbitration in circumstances where timely and effective relief could be obtained through the arbitral process, for example, by appointing an emergency arbitrator. Section 44 of the English Arbitration Act applies to all arbitral proceedings regardless of whether the place of the arbitration is in England and Wales. The courts may, therefore, in appropriate circumstances grant interim measures in aid of foreign arbitral proceedings which would not otherwise fall within the scope of the English Arbitration Act if there is a good reason for the court to exercise its discretion and intervene. 150 See, for example, Mobil Cerro Negro Ltd v Petroleos de Venezuela SA [2008] EWHC 532 (Comm). The court set aside a freezing injunction in relation to foreign proceedings, as, inter alia, the applicant failed to demonstrate a sufficient connection to the English jurisdiction.

10.1.1 An application to the tribunal to correct the award or make an additional award must be made within 28 days of the date of the award. 151 English Arbitration Act, s 57(4). Similarly, an application to the court to challenge or appeal a final award must be brought within 28 days of the date of the award. 152 Ibid, s 70(3). This time limit runs from when the award was available, not the date it was received. 

10.1.2 If the arbitral tribunal corrects its award under Section 57 of the English Arbitration Act, the 28-day time limit will run from the date of the corrected award. However, the 28-day time limit will only be postponed in this way if the applicant seeks a “material” correction, which is necessary to enable the applicant to know whether it had grounds to challenge the award, as seen in Daewoo Shipbuilding & Marine Engineering Company Ltd v Songa Offshore Equinox Ltd. 153 [2018] EWHC 538 (Comm).

10.1.3 If a party fails to apply to the arbitral tribunal within the appropriate time limit, apart from losing its right to make such an application, it will also lose its ability to apply to the court on the basis it has not exhausted the arbitral procedure. 154 Torch Offshore LLC v Cable Shipping Inc. [2004] EWHC 787 (Comm). Also with respect to an application to the court, the time limit is strict and reflects the purpose of the English Arbitration Act, namely to obtain a fair resolution of disputes by an arbitral tribunal without unnecessary delay or expense and to promote the finality of arbitration awards.

10.1.4 Section 79 gives the court power to extend the deadline if satisfied that otherwise a substantial injustice would be done. This was considered in Terna v Al Shamsi, 155 [2012] EWHC 3283 (Comm). which decided that the primary factors to consider when deciding whether to extend a deadline are:

• the length of the delay;
• whether the delaying party was acting reasonably in allowing the time limit to expire; and
• whether others had contributed to the delay.

10.1.5 For example, a failure to pay the arbitrator’s fees, without any explanation, is not a reasonable excuse for delay in issuing a challenge. The applicant should take appropriate steps to ensure that it preserves any right to challenge the award. 156 Rollitt v Ballard [2017] EWHC 1500 (TCC); Squibb Group v Pole 2 Pole Scaffolding [2017] EWHC 2394 (TCC).

10.2.1 The right of a party to object to an award on any of the following grounds may be lost if the aggrieved party had not raised such objections at the earliest possible opportunity in the arbitral proceedings:

• the arbitral tribunal lacked substantive jurisdiction;
• the arbitral proceedings were improperly conducted;
• there was a failure to comply with the terms of the arbitration agreement; or
• there was any other irregularity affecting the arbitral tribunal or the arbitral proceedings. 157 English Arbitration Act, s 73. See also ASM Shipping Ltd of India v TTMI Ltd of England [2005] EWHC 2238 (Comm).

10.3.1 An award once made can only be challenged pursuant to:

• Section 67 of the English Arbitration Act, on the ground that the arbitral tribunal lacked substantive jurisdiction; 158 Baytur SA v Finagro Holdings SA [1992] Q.B. 610, as applied in Ga-Hyun Chung v Silver Dry Bulk [2019] EWHC 1147 (Comm), where it was found that the arbitral tribunal lacked substantive jurisdiction since the respondent company had ceased to exist by the time the arbitration notice was filed. or
• Section 68 of the English Arbitration Act, on the ground that there was a serious irregularity affecting the arbitral tribunal, the proceedings or the award which has caused or will cause substantial injustice to the applicant.

10.3.2 On applications challenging the award on the grounds that the arbitral tribunal lacked jurisdiction under Section 67 of the English Arbitration Act, the court may either confirm the award, vary the award or set the award aside in whole or in part. 

10.3.3 Section 68 is concerned with a failure in the arbitral process rather than whether the arbitral tribunal’s decision was correct. Section 68(2) of the English Arbitration Act sets out an exhaustive list of the circumstances that may constitute a serious irregularity:

• breach of Section 33 of the English Arbitration Act (general duties of the arbitral tribunal);
• the arbitral tribunal exceeding its powers;
• failure to conduct the arbitral proceedings in accordance with the arbitration agreement;
• failure by the arbitrators to resolve all matters in dispute referred to them;
• uncertainty or ambiguity of the award;
• the award being obtained by fraud or in a manner contrary to public policy;
• failure to comply with formal requirements relating to the award; or
• admitted irregularity in the arbitral proceedings or the award.

10.3.4 Historically there have been very few successful challenges for serious irregularity. Indeed, the DAC explained in their report on the Arbitration Bill 1996 that it should be “only available in extreme cases where the tribunal has gone so wrong in its conduct of the arbitration that justice calls out for it to be corrected”. This has been highlighted in cases where Section 68 challenges have been made. 159 Lesotho Highlands Development Authority v Impregilo SA [2005] UKHL 43; Bandwidth Shipping Corporation v Intaari (The “Magdalena Oldendorff”) [2007] EWCA Civ 998. There have been a number of challenges to awards on the grounds of bias, on the basis that it involves a breach of Section 33 of the English Arbitration Act (which requires the arbitral tribunal to, inter alia, act fairly and impartially between the parties). 160 See above at paragraph 7.3.2 and RJ v HB [2018] EWHC 2833 (Comm). The court found that in determining a dispute on grounds not argued between the parties, the parties should “be given notice and a proper opportunity to consider and respond to the new point”. Here the parties were not granted that opportunity and serious irregularity was therefore found on the basis that the tribunal had failed to adhere to its general duty of fairness under Section 33 of the English Arbitration Act.

10.3.5 The test for establishing apparent bias is an objective one, which requires the court to consider “whether the fair-minded and informed observer would conclude that there was a real possibility that the tribunal was biased.” 161 Porter v Magill [2001] UKHL 67, para 103 [Lord Hope of Craighead] (as applied in A v B [2011] EWHC 2345 (Comm) and Miller & Ors v Health Service Commissioner for England [2018] EWCA Civ 144). However, in order to have the award set aside, a party must be able to demonstrate not only that there was actual bias, rather than suspected bias, but also that this bias has caused substantial injustice. 162 Hussmann (Europe) Ltd v Pharaon [2003] EWCA Civ 266 (as applied in Primera Maritime (Hellas) Ltd v Jiangsu Eastern Heavy Industry Co Ltd [2013] EWHC 3066 (Comm)).

10.3.6 In Halliburton Company v Chubb Bermuda Insurance Ltd, 163 [2020] UKSC 48.  the Supreme Court recently clarified that arbitrators could accept multiple appointments in arbitrations with overlapping subject matters without necessarily giving rise to doubts about their impartiality. As there was no allegation of actual bias on the part of the arbitrator, the court was only concerned with whether there was an appearance of bias. The legal test is “whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased.” The Supreme Court noted that the distinctive features of arbitration must be taken into account when this test was applied to arbitrators, including the private nature of arbitration and limited rights of appeal.  

10.3.7 On disclosure, the Supreme Court confirmed that an arbitrator is under a duty to disclose facts and circumstances which would or might reasonably give rise to the appearance of bias. Failure to disclose will be one factor the fair-minded and informed observer will take into account in considering whether there was a real possibility of bias. However, the Supreme Court held that questions of disclosure and apparent bias fell to be assessed at different times. Whereas the question of whether there was a failure to disclose was analysed as at the time the alleged duty of disclosure arose, the question of whether the relevant circumstances in any case amount to apparent bias must be assessed at the time of the hearing of the challenge to the arbitrator.

10.3.8 In order to establish that there has been a serious irregularity in the proceedings pursuant to Section 68, a party must show that, but for the irregularity, the arbitral tribunal might well have reached a different conclusion, which means establishing that such a conclusion is at least reasonably arguable. 164 L v R [2012] EWHC 2894 (Comm). In Symbion Power LLC v Venco Imtiaz Construction Co 165 [2017] EWHC 348 (TCC).  the court considered it was wholly inappropriate for an arbitrator to communicate with one party without notice to the other members of the arbitral tribunal and the other party. Such communications may give rise to concerns that the arbitrator is not acting fairly or impartially. The arbitral tribunal, however, appeared to have worked effectively together for two years and whilst the disclosure of the email might have created a somewhat awkward working environment, it was not something that experienced, professional people could not deal with. Similarly, the court deemed it in appropriate for an arbitrator to have emailed a third party about an issue which needed to be determined in the arbitration where the arbitrator had failed to tell the parties or grant them an opportunity to provide representations on the issue. 166 Fleetwood Wanderers Limited (t/a Fleetwood Town Football Club) v AFC Fylde Limited [2018] EWHC 3318 (Comm)

10.3.9 If an award is successfully challenged on grounds of serious irregularity under Section 68 of the English Arbitration Act, the court may either remit the award (in whole or in part) to the arbitral tribunal for reconsideration, set the award aside or declare it to be of no effect. 167 English Arbitration Act, s 68(3). A finding of serious irregularity will not preclude the issues from being remitted to the same tribunal for (re)consideration. 168 K and Others v P and Others [2019] EWHC 589 (Comm).

10.3.10 Section 68 is a mandatory provision, so the parties cannot contract out of it. 169 Minister of Finance (Incorporated) and another v International Petroleum Investment Company and another [2019] EWCA Civ 2080 reaffirmed that where parties have agreed to an English seat, Section 68 cannot be ousted by agreement.

10.4.1 Awards can be appealed on points of law only. An award may only be appealed after permission has been granted by the court or by the parties' agreement. The grounds on which such permission to appeal will be granted derive from the pre-English Arbitration Act common law guidelines. Leave to appeal shall be given only if the court is satisfied that:

• the determination of the question will substantially affect the rights of one or more of the parties;
• the question is one which the arbitral tribunal was asked to determine;
• on the basis of the findings of fact in the award, the decision of the arbitral tribunal on the question is obviously wrong;
• on the basis of the findings of fact in the award, the question is one of general public importance and the decision of the arbitral tribunal is at least open to serious doubt; and
• despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the court to determine the question. 170 Ibid, s 69(3).

10.4.2 On an appeal under Section 69 of the English Arbitration Act, the court may either confirm the award, vary the award, remit the award to the arbitral tribunal for reconsideration (in whole or in part) or set the award aside (in whole or in part). The court will generally remit the matters in question to the arbitral tribunal for reconsideration unless it is satisfied that this would be inappropriate under the circumstances. 171 In Maurice J Bushell & Co v Graham Irving Born [2017] EWHC 2227 (Ch) the court noted that to find remission inappropriate would require there to be a real risk that, even with the benefit of the court’s judgment as to how to proceed, the arbitrator would still be consciously or unconsciously biased against the applicant.

10.4.3 Unlike challenges under Sections 67 and 68 of the English Arbitration Act, the parties’ right to appeal on points of law can be excluded by agreement between the parties, either in the arbitration agreement or at a later stage. Where the parties choose to arbitrate under the ICC Rules or the LCIA Rules, the parties’ right to appeal under Section 69 of the English Arbitration Act is waived automatically. 172 See Article 28.6 of the ICC Rules and Article 26.9 of the LCIA Rules. Where the parties opt for ad hoc arbitration or institutional rules which do not contain waiver language akin to the ICC Rules and LCIA Rules, the parties can exclude the application of Section 69 by stating so expressly in the arbitration agreement. Pursuant to Section 69(1) of the English Arbitration Act, the parties’ agreement to dispense with the requirement that the arbitral tribunal give reasons for its award will be considered an agreement to exclude the right of appeal. 173 See para 9.4.2 above on the effect of such an agreement on the courts’ jurisdiction under s 45 of the English Arbitration Act. Sections 70-72 of the English Arbitration Act contain supplementary provisions and restrictions in relation to the challenge or appeal of awards.

11.1.1 Section 66 of the English Arbitration Act provides that domestic awards may be enforced with the permission of the court as if they were court judgments. Permission shall only be refused if the person against whom the award is to be enforced shows that the arbitral tribunal lacked substantive jurisdiction to make the award. The right of enforcement under Section 66 also applies to declaratory awards, where the successful party’s objective in obtaining an order for enforcement is to establish the primacy of a declaratory award over an inconsistent judgment. 174 West Tankers Inc v Allianz SpA and Generali Assicurazione Generali SpA [2011] EWHC 829 (Comm).

11.2.1 The procedure for recognition and enforcement of foreign awards is covered in Part III of the English Arbitration Act.

11.2.2 Most foreign awards in commercial arbitration are today enforced under the New York Convention. This requires the award to be a “New York Convention Award”, ie an award made pursuant to a written arbitration agreement in a state which is a signatory to the New York Convention. 175 The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly known as the New York Convention.

11.2.3 Pursuant to Section 99 of the English Arbitration Act, the Arbitration Act 1950 continues to apply to the recognition and enforcement of awards under the 1927 Geneva Convention, which continues to apply in relation to certain awards that cannot be enforced under the New York Convention.

11.2.4 The recognition and enforcement of New York Convention awards are governed by Sections 100-104 of the English Arbitration Act. New York Convention Awards may only be refused if the party against whom it is to be enforced proves one or more of the following grounds, which are exhaustive: 176 English Arbitration Act, s 103.

• incapacity of a party to the arbitration agreement;
• invalidity of the arbitration agreement;
• lack of due notice 177 Ekran OAO v Magneco Metrel UK Ltd [2017] EWHC 2208 (Comm) (in which the court found that “in the context of international commerce, the fact that notice of an arbitration is received in England in a language other than English should not in itself affect the validity of the notice”. or opportunity to present its case;
• lack of substantive jurisdiction of the arbitral tribunal;
• irregularity in the composition of the arbitral tribunal or conduct of the arbitral proceedings;
• award not binding on parties, set aside or suspended;
• the subject matter of the arbitration is not capable of settlement by arbitration; or
• recognition and enforcement of the award would be contrary to public policy. 178 For example, in cases where: 1) the underlying contract involved illegality. (See Soleimany v Soleimany [1999] QB 785); and 2) in certain circumstances where there is evidence the Award was obtained by fraud (see Stati v Republic of Kazakstan [2017] EWHC 1348 (Comm))

11.2.5 Section 101(2) of the English Arbitration Act provides that a New York Convention Award may be enforced in the same manner as a judgment or order of the court to the same effect. CPR Part 62.18 provides for the procedure for enforcement, which includes submitting an arbitration claim form supported by witness evidence and exhibiting the documents required to be produced under Section 102 of the English Arbitration Act. The application for permission to enforce the award may be made without notice, although the court may require the claim form to be served on specified parties before hearing the application. If leave to enforce is granted, the defendant may subsequently apply, within 14 days of service of the order or, if the order is to be served out of the jurisdiction, within such other period as the court may set, to set that leave aside. Until expiry of that period, or final disposal of any application made by the defendant within it, the claimant must not take any step to enforce the order.

11.2.6 It is rare for the English courts to refuse to enforce a foreign award under the New York Convention. If none of the grounds for refusal of recognition or enforcement is present, a New York Convention Award will be enforced. 179 See Honeywell International Middle East Limited v Meydan Group LLC [2014] EWHC 1344 (TCC) at paragraph 67. However, the Supreme Court has ruled that an award given against an entity which was found not to be a party to an agreement under which the arbitration was brought (but which the arbitral tribunal concluded was bound by the arbitration agreement) was not enforceable under English law. 180 Dallah Real Estate & Tourism Holding Co v Pakistan [2010] UKSC 46 (in which the court confirmed that it may conduct a full review of the evidence presented in the arbitration within the ground under which refusal is sought). The Supreme Court also determined that it was entitled to revisit the arbitral tribunal’s decision on jurisdiction for the purposes of considering enforcement under the New York Convention. 

11.2.7 The enforcement of certain ICSID investment awards is not governed by the New York Convention, but rather the ICSID Convention. Article 54(1) of the ICSID Convention provides that each contracting state shall recognise an award rendered pursuant to the Convention as binding, and enforce the pecuniary obligations imposed by the award within its territories as if it were a final judgment of a court in that state. Non-pecuniary awards must be enforced by other methods, such as the New York Convention.

12.1.1 Arbitration applications are generally dealt with by the Commercial Court or, in relation to cases where the subject matter relates to technology or construction, the Technology and Construction Court (TCC), both forming part of the Business & Property Courts of the Queen’s Bench Division of the High Court of Justice. They are governed by Part 62 and the Practice Direction to Part 62 of the CPR. Appeals in arbitration matters from decisions of the Commercial Court or TCC may be heard by the Court of Appeal, but permission to appeal will first be required. As noted above, whether permission to appeal may be sought from the Court of Appeal or from the first instance court (the Commercial Court or TCC) depends on the specific wording of the relevant section of the English Arbitration Act. Appeals from the Court of Appeal will be made to the Supreme Court. 181 See [paragraph 9.2.3 above] in relation to appeals. Permission of the “court” is required for any appeal from a decision of the court under either s 67(4) or 68(4). At first sight, this appears to suggest that unless the judge at first instances gives leave to appeal there can be no appeal. However, two separate lines of decisions of the Court of Appeal have weakened the proposition that the first instance judge alone is competent to grant leave to appeal from his own decision: see Cetelem SA v Roust Holdings Ltd [2005] EWCA Civ 618 and Lesotho Highlands Development Authority v Impregilo SpA [2005] UKHL 43.

13.1.1 A number of questions have not been addressed by the English Arbitration Act and have instead been left open to developments in the jurisprudence. These include the following issues.

13.2.1 Multi-party disputes and consolidation of separate arbitration proceedings give rise to potentially complex issues and require careful consideration on a case-by-case basis at the contract drafting stage. Parties should ensure that adequate provision is made in relation to the appointment procedure for the arbitral tribunal, the arbitral tribunal’s jurisdiction and procedural matters. Some institutional arbitration rules, for example the new ICC Rules,` 182 Which are in force since 1 March 2017. have been updated to accommodate multi-party disputes and the joinder of additional parties. 

13.3.1 Privacy and confidentiality of the arbitral proceedings and of the subsequent award are traditionally perceived as advantages of arbitration over court litigation. The English Arbitration Act does not address confidentiality. This was deliberate as the DAC took the view that the task of setting out the scope of the confidentiality obligations, and exceptions to it, was both difficult and controversial and would be better suited to case-by-case development by the courts. 183 See paragraph 17, February 1996 DAC Report.

13.3.2 Under English law, the confidentiality of arbitration is an implied term of every arbitration agreement, 184 Ali Shipping Corporation v Shipyard Trogir [1999] 1 W.L.R. 314 despite conflicting decisions in the Commonwealth. 185 See, for example, Esso Australia Resources Ltd v Plowman (Minister for Energy and Minerals) [1995] HCA 19 (in which the Australian High Court held that confidentiality is not an essential attribute of private arbitration).  The court has held that the obligation includes any documents prepared for and used in the arbitration, or disclosed or produced in the course of the arbitration or transcripts or notes of the evidence in the arbitration or the award. 186 Emmott v Michael Wilson & Partners Ltd [2008] EWCA Civ 184.  Notwithstanding the position taken by the English courts, it is advisable for the arbitration agreement expressly to stipulate confidentiality in relation to the arbitral proceedings and the award.

13.3.3 There are a limited number of exceptions to the duty of confidentiality:

• by consent of the parties;
• by order or leave of the court;
• where the court considers that making an exception is reasonably necessary (to establish or protect a party’s rights against a third party); or
• where the court considers that making an exception is in the interests of justice (eg prior inconsistent views expressed by an expert in arbitral proceedings). 187 In London & Leeds Estate v Paribas Ltd [1995] 2 EG 134 Mance J permitted disclosure of an expert’s reports from earlier arbitrations which were said to be inconsistent with his evidence in the current rent review arbitration. Mance J took the view that the public interest in ensuring that the expert’s inconsistent views were exposed outweighed the parties’ rights to confidentiality.

13.4.1 Recognising the need to compete with other jurisdictions that have introduced recent updates to their own arbitration legislation, the Law Commission has announced a review of the English Arbitration Act as part of its 14th Programme of Law Reform. Possible areas the Law Commission may cover in its review include:

• the power to summarily dismiss unmeritorious claims or defences in arbitral proceedings; 
• the courts’ powers exercisable in support of arbitral proceedings;
• the procedure for challenging a jurisdiction award;
• the availability of appeals on points of law;
• the law concerning confidentiality and privacy in arbitral proceedings; and
• electronic service of documents, electronic arbitration awards, and virtual hearings. 188 “Law Commission to review the Arbitration Act 1996”, 30 November 2021, see https://www.lawcom.gov.uk/law-commission-to-review-the-arbitration-act-1996/#:~:text=The%20Law%20Commission%20has%20today,forefront%20of%20international%20dispute%20resolution

13.4.2 The overarching objective of reforms is to ensure the continued attractiveness of England and Wales as a “destination” for dispute resolution and the pre-eminence of English Law as a choice of law. Hence, while it might have been considered better left to develop through case law (see paragraph 13.3.1), providing clear statutory guidelines on the scope of confidentiality obligations in arbitral proceedings may now be the favoured approach, particularly to assist users of London-seated arbitration who are unfamiliar with the common law system.

13.4.3 The Law Commission will also consider the scope for introducing trust law arbitration, alongside wider work on modernising trust law, which were part of the Law Commission’s 13th Programme of Reform. It is expected to publish a consultation paper in late 2022.