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10 London

Stephen Jagusch, Epaminontas E Triantafilou

From: Choice of Venue in International Arbitration

Edited By: Michael Ostrove, Claudia Salomon, Bette Shifman

Content type:
Book content
Product:
International Commercial Arbitration [ICMA]
Published in print:
09 January 2014
ISBN:
9780199655717

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved. Subscriber: null; date: 06 June 2023

Subject(s):
Arbitral rules — Recognition and enforcement — Arbitral tribunals — Place of arbitration

(p. 242) 10  London

  1. 10.1  Introduction 10.01

    1. 10.1.1  Relevant legislation 10.03

  2. 10.2  Role of Courts Prior to the Commencement of Arbitral Proceedings 10.11

    1. 10.2.1  The tribunal’s jurisdiction 10.13

    2. 10.2.2  Commencement of proceedings and service of process 10.23

    3. 10.2.3  Constitution of the tribunal 10.28

    4. 10.2.4  Interim measures 10.33

    5. 10.2.5  Staying parallel proceedings 10.42

  3. 10.3  Role of Courts Before the Issuance of the Award 10.52

    1. 10.3.1  The tribunal’s jurisdiction 10.52

    2. 10.3.2  Appeal on a question of law 10.55

    3. 10.3.3  Interim measures 10.61

    4. 10.3.4  Time limitations and extensions 10.66

    5. 10.3.5  Challenging or replacing an arbitrator 10.72

    6. 10.3.6  Costs 10.77

  4. 10.4  Arbitration under the English Arbitration Act 10.78

    1. 10.4.1  Arbitration rules 10.78

    2. 10.4.2  Limitation periods 10.80

    3. 10.4.3  The arbitration agreement 10.81

    4. 10.4.4  The arbitral tribunal and procedural issues 10.84

    5. 10.4.5  Interim measures 10.89

    6. 10.4.6  Award and costs 10.91

  5. 10.5  Role of Courts After the Issuance of the Award 10.97

    1. 10.5.1  Challenges to the award 10.98

    2. 10.5.2  Appeal on point of law 10.109

    3. 10.5.3  Enforcement 10.114

  6. 10.6  Conclusion 10.123

10.1  Introduction

10.01  Long considered a leading centre for arbitration, England and Wales—and London in particular—has become firmly established as a pre-eminent venue1 for international arbitration worldwide.2 Several factors account for this, most prominently the highly competent and independent English courts and the modern, arbitration-friendly domestic legislation, as (p. 243) well as the superb and business-oriented infrastructure. Another factor is the convenient physical location of London, situated as it is at the crossroads of three continents and within reach from every major business centre on the planet.

10.02  The pages that follow summarize the key aspects of the English legal system with respect to the role of courts in arbitrations seated in England and Wales. The discussion proceeds in three parts. First, it highlights the key provisions of relevant English legislation, mainly of the English Arbitration Act of 1996 (‘1996 Act’ or ‘Act’),3 and the principal court decisions arising under that legislation.4 Second, it describes the manner in which English law as the law of the seat affects the role of English courts in the course of three discrete stages: before the award, after the award, and during recognition and enforcement. In the process and where necessary, it addresses and ultimately rejects recently articulated concerns questioning the supremacy of England and Wales as an arbitration seat.

10.1.1  Relevant legislation

10.03  Given its repeated use before and by the English courts, and the abundant commentary it has engendered, it is no longer appropriate to consider the 1996 Act a ‘new’ piece of legislation. More than 15 years after its enactment, it is widely praised for the balance it strikes between the arbitration parties’ autonomy and the English courts’ role as gatekeepers of justice.5 A recent review of the Act, based on a survey of the legal community and conducted by a private committee consisting of leading legal professionals and academics, concluded that changes to the 1996 Act were not ‘necessarily desirable’.6

10.04  The 1996 Act was drafted by the UK government’s Departmental Advisory Committee on Arbitration Law (the ‘DAC’), under the chairmanship of Lord Justice Saville.7 It is influenced by the UNCITRAL Model Law on International Commercial Arbitration, but differs (p. 244) from it in several important respects. Unlike the Model Law, it constitutes a single legislative framework governing all arbitrations seated in England, Wales, and Northern Ireland, not just international commercial arbitrations.8 Moreover, while the 1996 Act does not codify the law completely,9 it contains most of the important provisions of English arbitration law.

10.05  Before the Act, English law had been criticized for allowing the courts to intervene too readily in the arbitral process. The legislation preceding the 1996 Act, namely the Arbitration Act 1979 and the Arbitration Act 1950, resulted in a combined framework that generally protected party autonomy; however, because the 1979 Act did not address arbitral procedure, the more ‘interventionist’ provisions of the 1950 Act still governed important contingencies. For example, before the 1996 Act parties to arbitration were obligated to resort to the courts if one party refused to cooperate with the proceedings. Moreover, the courts retained residual powers to invalidate the arbitration agreement, dismiss the arbitrators, or remand an award to a tribunal due to ‘procedural mishap’—a term that courts were at liberty to interpret.10

10.06  The drafters of the 1996 Act sought to address these issues through a requirement that the courts not intervene except as provided in Part I of the 1996 Act, and by giving powers to the arbitral tribunal, rather than the courts, wherever possible. Under the Act, the tribunal has the power to decide all procedural and evidentiary matters, appoint experts, order security for costs, and give directions in relation to property or for the preservation of evidence.11 The Act confers on the courts powers of both a supportive nature (eg to appoint arbitrators where an agreed process fails, enforce a ‘peremptory order’ made by the tribunal, or summon a witness to appear before the tribunal) and a supervisory nature (eg to hear challenges to arbitrators and applications to set aside awards).

10.07  The courts, furthermore, retain some powers that are unusual compared to those of other jurisdictions. For example, a party to arbitral proceedings may appeal to the courts on a point of English law, although this right may be excluded by agreement and, is rarely exercised in practice. The courts have also emphasized that a major purpose of the 1996 Act was to reduce drastically the extent of court intervention in the arbitral process. This policy has influenced their approach in applying the Act.

10.08  The Act consists of four parts. Part I contains the main provisions applicable to arbitration under an arbitration agreement, which agreement must be ‘in writing’.12 Part II contains provisions relating to consumer arbitration agreements, statutory arbitrations, and the exceptional (p. 245) appointment of a judge as arbitrator.13 Part III concerns the recognition and enforcement of certain foreign awards,14 while Part IV sets out a number of general provisions.15

10.09  The 1996 Act also sets out the principles that underlie arbitration law and procedure. Thus, the object of arbitration is defined in section 1 as ‘the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense’. Under the same section, ‘the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest’. In this regard, the Act draws a sharp distinction between provisions whose public policy importance renders them mandatory, ie superseding any agreement between the parties to arbitration, and those from which the parties can diverge by agreement or by adopting institutional arbitration rules.16 According to Schedule 1 to the Act, the mandatory provisions of Part I are sections 9 to 13, 24, 26, 28, 31 to 33, 37, 40, 43, 56, 60, 66, 67, 68, and 70 to 75. The remaining sections may be excluded by agreement.

10.10  Most proceedings under the 1996 Act must be taken to the High Court, the senior of the two levels of court exercising civil jurisdiction at first instance. Two specialist courts within the High Court hear most arbitration-related cases: the Commercial Court, which hears general commercial arbitration matters; and the Technology and Construction Court, which deals with construction disputes. This allocation of expertise results in the more efficient disposal of cases.

10.2  Role of Courts Prior to the Commencement of Arbitral Proceedings

10.11  We now turn to the question of the powers that the Act’s provisions confer upon English courts when the venue of the arbitration is England and Wales. Notably, the provisions of the 1996 Act discussed do not necessarily apply only during the phase of the proceedings in the context of which they are first mentioned. For example challenges under section 72 of the Act, described at paragraphs 10.16–10.17, may actually be raised at any suitable time before the rendering of the award, and possibly also thereafter. To avoid repetition, we will provide appropriate cross-references where necessary.

10.12  Before the commencement of an arbitral proceeding seated in England and Wales, the law of the seat may be invoked with respect to the establishment of the proceedings—including the existence and enforceability of an arbitration agreement, the law of limitations, the constitution of the arbitral tribunal, anti-suit injunctions, and interim or emergency measures.

10.2.1  The tribunal’s jurisdiction

10.13  One of the first questions to consider when commencing arbitration is whether there is a valid arbitration agreement.17 It is well established under the principle of competence-competence, (p. 246) a principle that the 1996 Act recognizes and supports explicitly,18 that the arbitral tribunal is empowered to interpret the arbitration agreement and to rule on its own jurisdiction.

10.14  However, under the 1996 Act, the validity of the arbitration agreement and by extension the jurisdiction of the tribunal is not entirely immune from collateral challenge before the English courts. Such a challenge can be brought under limited circumstances and subject to strong procedural protections meant to minimize disruption and costs.

10.15  Specifically, the validity and scope of the arbitration agreement can be challenged under section 72, which provides:

A person alleged to be a party to arbitral proceedings but who takes no part in the proceedings may question—

  1. (a)  whether there is a valid arbitration agreement,

  2. (b)  whether the tribunal is properly constituted, or

  3. (c)  what matters have been submitted to arbitration in accordance with the arbitration agreement

    by proceedings in the court for a declaration or injunction or other appropriate relief.

10.16  Section 72 covers a broad array of challenges to the establishment of the arbitration, including whether the applicant is a proper party to the arbitration agreement, and whether the facts giving rise to the action in arbitration are covered by the arbitration agreement. The section also allows challenges to the constitution of the arbitral tribunal.19

10.17  Despite the permissive wording of section 72, English courts have interpreted it restrictively in light of the Act’s stated policy of favouring competence-competence.20 In this regard, parties must remain cognizant of the limits of ‘taking part’ in an arbitration proceeding for purposes of this section. For instance, correspondence with an arbitral institution in an attempt to (p. 247) dismiss the case, correspondence to the tribunal notifying it of objections to its jurisdiction, or the provisional appointment of an arbitrator do not constitute ‘taking part’ in the proceeding, and therefore do not preclude an application under section 72.21

10.18  Alternatively, and more rarely, a party may challenge the jurisdiction of the arbitral tribunal under section 32 of the Act, prior to the commencement of proceedings.22 According to that section: ‘The court may, on the application of a party to arbitral proceedings (upon notice to the other parties), determine any question as to the substantive jurisdiction of the tribunal.’23 Notably, lack of participation is not required in order to lodge a challenge under this section.

10.19  Section 32 challenges are rare, however, because of the stringent prerequisites the applicant must meet: either all parties to the arbitration must consent, or the arbitral tribunal must grant leave for the application to be filed. In the latter case, the courts must also be satisfied that the applicant acted without delay, the resolution of the application is likely to result in substantial cost savings, and overall that ‘there is good reason why the matter should be decided by the court’.24

10.20  To minimize disruption from a section 32 application (and its potential abuse), unless the parties to the arbitration agree otherwise, the Act allows the arbitral proceedings to continue and an award to be made while the application is pending.25 After the court’s decision on the application is issued, the applicant cannot appeal against the court’s ruling with respect to the filing requirements imposed by section 32(2) without leave from the court.26 An appeal on the merits of the decision similarly requires leave from the court, which under the Act cannot be granted unless the court finds that the question of law underlying its decision is ‘of general importance’ or should be considered by the Court of Appeal ‘for some special reason’.27

10.21  Parties contemplating a jurisdictional challenge prior to the commencement of the proceedings should be mindful of section 73 of the 1996 Act. Under section 73(1)(a), a party that fails to raise an objection to the arbitral tribunal’s substantive jurisdiction:

...either forthwith or within such time as is allowed by the arbitration agreement or the tribunal or by any provision of [Part I of the Act]...may not raise that objection later, before the tribunal or the court, unless he shows that, at the time he took part or continued to take part in the proceedings, he did not know and could not with reasonable diligence have discovered the grounds for the objection.

(p. 248) 10.22  A court injunction against arbitral proceedings based on the sections just mentioned is limited to exceptional circumstances, as in most cases it would contravene not only the principal policy of the Act, but potentially also the United Kingdom’s international legal obligations under the New York Convention.28 According to commentary on the Act, it is ‘virtually impossible’ to enjoin an arbitration under section 72; an injunction application under section 32 may stand higher chances if submitted jointly by all parties to arbitration.29 Finally, an anti-arbitration injunction may lie in favour of a party that commences court proceedings disputing the validity of an arbitration agreement and successfully defends against the opposing party’s application for a stay of the court proceedings under section 9 of the Act.30

10.2.2  Commencement of proceedings and service of process

10.23  According to section 14, entitled ‘Commencement of arbitral proceedings’:

  1. (1)  The parties are free to agree when arbitral proceedings are to be regarded as commenced for the purposes of this Part and for the purposes of the Limitation Acts.

  2. (2)  If there is no such agreement the following provisions apply.

  3. (3)  Where the arbitrator is named or designated in the arbitration agreement, arbitral proceedings are commenced in respect of a matter when one party serves on the other party or parties a notice in writing requiring him or them to submit that matter to the person so named or designated.

  4. (4)  Where the arbitrator or arbitrators are to be appointed by the parties, arbitral proceedings are commenced in respect of a matter when one party serves on the other party or parties notice in writing requiring him or them to appoint an arbitrator or to agree to the appointment of an arbitrator in respect of that matter.

  5. (5)  Where the arbitrator or arbitrators are to be appointed by a person other than a party to the proceedings, arbitral proceedings are commenced in respect of a matter when one party gives notice in writing to that person requesting him to make the appointment in respect of that matter.

10.24  This provision allows the parties to agree on the event that will initiate arbitration proceedings for purposes of the Limitation Acts. Another notable feature of this provision is the use of the term ‘matter’ instead of ‘dispute’; according to the DAC Report, this is to allow the provision to cover not only disputes, but also claims.31 Finally, there has been some disagreement among courts with respect to the meaning of ‘requiring’ as used in section 14(3) and (4), specifically whether the service of a notice of arbitration ‘requires’ the respondent to submit the matter to a single arbitrator or to appoint an arbitrator, thereby initiating the proceedings. The majority view is that a notice of arbitration is sufficient, but a mere statement alluding to the possibility of arbitration is not.32

(p. 249) 10.25  The Act, moreover, allows a court to extend any agreed time limit by which a party must initiate arbitration or lose the right to do so. According to section 12 (which is mandatory):

  1. (1)  Where an arbitration agreement to refer future disputes to arbitration 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—

    1. (a)  to begin arbitral proceedings, or

    2. (b)  to begin other dispute resolution procedures which must be exhausted before arbitral proceedings can be begun, the court may by order extend the time for taking that step.

  2. (2)  Any party to the arbitration agreement may apply for such an order (upon notice to the other parties), but only after a claim has arisen and after exhausting any available arbitral process for obtaining an extension of time.

  3. (3)  The court shall make an order only if satisfied—

    1. (a)  that the circumstances are such as were outside the reasonable contemplation of the parties when they agreed the provision in question, and that it would be just to extend the time, or

    2. (b)  that the conduct of one party makes it unjust to hold the other party to the strict terms of the provision in question.

  4. (4)  The court may extend the time for such period and on such terms as it thinks fit, and may do so whether or not the time previously fixed (by agreement or by a previous order) has expired.

  5. (5)  An order under this section does not affect the operation of the Limitation Acts (see section 13).

  6. (6)  The leave of the court is required for any appeal from a decision of the court under this section.

10.26  Despite the broad power it confers on the courts, section 12 is subject to strict constraints. Thus, section 12(2) requires the applicant to exhaust its arbitral remedies, which in turn renders it unlikely that a court would order an extension when an arbitral tribunal has previously denied it.33 Section 12 is further limited in scope by the operation of subsection (3)(a), which requires that ‘circumstances are such as were outside the reasonable contemplation of the parties’ at the time of fixing the time limitation on which an extension is sought. Furthermore, a court is not authorized to extend time limits set under the Limitations Acts, which section 13 of the 1996 Act renders applicable to arbitration proceedings.34

10.27  Equally importantly for purposes of initiating proceedings, the Act confers a role on courts in supervising the proper service of process to implicated parties. Under section 77(2), and unless otherwise agreed by the parties, the court ‘may make such order as it thinks fit—(a) for service in such a manner as the court may direct, or (b) dispensing with service of the document’.35

10.2.3  Constitution of the tribunal

10.28  As noted previously, section 72(1)(b) allows a party to challenge the constitution of the arbitral tribunal (which is governed by sections 15 to 20 of the Act). Generally the parties to an (p. 250) arbitration are at liberty to set the number of arbitrators,36 the procedure for their appointment,37 and the procedure for resolving appointment-related disputes.38 The Act contains its own default appointment procedure for cases in which no pre-agreed procedure exists.39

10.29  The courts may become involved in arbitrator appointments in three instances: first, when each party must appoint an arbitrator and one party defaults. In that case, the non-defaulting party may provide notice that its chosen arbitrator shall serve as sole arbitrator in the dispute.40 The defaulting party can challenge this appointment in court, which may set it aside—although it would do so only upon showing a good cause for the default, such as an invalid arbitration agreement. No appeal can be filed from this decision without leave from the trial court.41 This procedure applies, mutatis mutandis, when there are three arbitrators to be appointed and the procedure for the appointment of one of them fails, either by inaction of the appointing party or, if the third arbitrator serves as chairperson, due to irresolvable disagreement between the two party-appointed arbitrators.

10.30  Second, under section 18 of the Act the courts may appoint an arbitrator if the appointing authority specified in the arbitration agreement refuses, neglects, or otherwise fails to do so. The courts may proceed with the appointment after a reasonable period (eg seven days)42 has elapsed from the time the appointing authority received the request to appoint from one of the parties.43

10.31  Third, the courts may direct the appointment of arbitrators upon the application of any party to the arbitration agreement when the parties have not agreed in advance on the appointment procedure. Under section 18(3) of the 1996 Act, the courts are empowered:

  1. (a)  to give directions as to the making of any necessary appointments;

  2. (b)  to direct that the tribunal shall be constituted by such appointments (or any one or more of them) as have been made;

  3. (c)  to revoke any appointments already made;

  4. (d)  to make any necessary appointments itself.

10.32  Under section 18(5), ‘leave of the court is required for any appeal from a decision of the court under this section’.44 Finally, section 19 of the Act requires the courts, in making appointments under sections 16 and 18, to take into account any specific qualifications of arbitrators agreed upon by the parties.

(p. 251) 10.2.4  Interim measures

10.33  Before the constitution of the arbitral tribunal, parties may initiate court proceedings to obtain interim measures, for example to preserve the status quo or to prevent the destruction of evidence. A party may be irreparably harmed if it must wait until the arbitral tribunal is constituted before seeking relief,45 because the process of constituting an arbitral tribunal is time-consuming and, during that time, critical evidence or assets may disappear.

10.34  Section 44 of the 1996 Act enumerates the powers of the English courts in support of arbitration proceedings and provides in this regard:

  1. (1)  Unless otherwise agreed by the parties, the court has for the purposes of and in relation to arbitral proceedings the same power of making orders about the matters listed here as it has for the purposes of and in relation to legal proceedings.

  2. (2)  Those matters are—

    1. (a)  the taking of the evidence of witnesses;

    2. (b)  the preservation of evidence;

    3. (c)  making orders relating to property which is the subject of the proceedings or as to which any question arises in the proceedings—

      1. (i)  for the inspection, photographing, preservation, custody or detention of the property, or

      2. (ii)  ordering that samples be taken from, or any observation be made of or experiment conducted upon, the property; and for that purpose authorising any person to enter any premises in the possession or control of a party to the arbitration;

    4. (d)  the sale of any goods the subject of the proceedings;

    5. (e)  the granting of an interim injunction or the appointment of a receiver.

  3. (3)  If the case is one of urgency, the court may, on the application of a party or proposed party to the arbitral proceedings, make such orders as it thinks necessary for the purpose of preserving evidence or assets.

  4. (4)  If the case is not one of urgency, the court shall act only on the application of a party to the arbitral proceedings (upon notice to the other parties and to the tribunal) made with the permission of the tribunal or the agreement in writing of the other parties.

  5. (5)  In any case the court shall act only if or to the extent that the arbitral tribunal, and any arbitral or other institution or person vested by the parties with power in that regard, has no power or is unable for the time being to act effectively.

  6. (6)  If the court so orders, an order made by it under this section shall cease to have effect in whole or in part on the order of the tribunal or of any such arbitral or other institution or person having power to act in relation to the subject-matter of the order.

  7. (7)  The leave of the court is required for any appeal from a decision of the court under this section.

10.35  This reflects the interim powers the Act grants to the courts in support of arbitral proceedings—powers that may be limited by agreement of the parties under section 44(1). Parties should be mindful of the wording they employ in carving out such limitations. For example, a provision establishing the ‘exclusive jurisdiction’ of arbitrators may not suffice to preclude court intervention under section 44, because it is presumed to apply to matters of substance rather than procedure.46 By contrast, a clause granting the arbitrators exclusivity with (p. 252) respect to substantive matters and ‘other legal proceedings’ has been interpreted as precluding recourse to the courts under this section.47

10.36  Section 44(2)(a) and (b) identifies the taking and preservation of evidence, including documents and witness evidence, as within the scope of court orders under this section. Section 44(2)(c) to (e) covers the equally important contingencies of surveying and securing property, ordering the sale of goods at issue (a power not possessed by the arbitral tribunal), and granting interim injunctions or appointing a receiver in cases of insolvency.

10.37  Section 44(2)(e) refers generally to an ‘interim injunction’, reflecting the courts’ broad power to issue equitable relief in the form of freezing orders and/or directions to parties to act or refrain from acting as required to protect the arbitration agreement and the arbitral process (an example of the latter order is an anti-suit injunction).48 Parties that wish to avail themselves of this provision should, however, act in a timely fashion and marshal sufficient evidence to show that in the absence of the injunction, irreparable harm will accrue to them, as for example when an opposing party attempts to relocate its assets outside the jurisdiction of the English courts.49

10.38  Section 44(3) complements section 44(2)(e) by empowering courts to issue orders as necessary to ‘preserv[e]‌ evidence or assets’. Importantly, the scope of section 44(2)(e) is not limited by that of section 44(3)—the former provides wide discretion to grant interim relief in contrast with the latter, which applies only to the narrower subject matters of ‘evidence’ and ‘assets’.

10.39  Moreover, in instances in which a party to arbitration wishes to elicit the testimony of or evidence from a third party witness, over whom the arbitral tribunal does not have personal jurisdiction,50 the party can petition the courts under section 43. Under that section: ‘A party to arbitral proceedings may use the same court procedures as are available in relation to legal proceedings to secure the attendance before the tribunal of a witness in order to give oral testimony or to produce documents or other material evidence.’51 To obtain such an order, however, the applicant must either secure permission from the tribunal or agreement from the other parties.52

(p. 253) 10.40  It is worth noting that similarly to the provisions of the 1996 Act, the rules of major arbitral institutions also recognize the importance of effective injunctive relief prior to the commencement of arbitration proceedings, and envisage explicitly the involvement of courts in support of arbitration proceedings prior to the commencement of arbitration.53 In an attempt to provide an arbitration-based solution to relief needed prior to the tribunal’s constitution, certain institutional rules have adopted the concept of the ‘emergency arbitrator’.

10.41  For example, under the 2012 ICC Rules, the President of the ICC Court may appoint an ‘Emergency Arbitrator’ before the arbitral tribunal is constituted, to whom the parties may apply for interim measures.54 The ICC Rules, however, reserve the right of parties to seek interim measures from courts before the arbitral tribunal is constituted.55 The arbitration rules of the International Centre for Dispute Resolution also allow for the appointment of an ‘Emergency Arbitrator’ with powers similar to those under the ICC Rules, and likewise expressly reserve the right of parties to seek interim measures from courts.56

10.2.5  Staying parallel proceedings

10.42  Section 9 of the 1996 Act governs the frequently occurring scenario of a party commencing court proceedings parallel to the arbitration, usually in the early stages. Section 9(1) of the Act provides:

A party to an arbitration agreement against whom legal proceedings are brought (whether by way of claim or counterclaim) in respect of a matter which under the agreement is to be referred to arbitration may (upon notice to the other parties to the proceedings) apply to the court in which the proceedings have been brought to stay the proceedings so far as they concern that matter.

10.43  According to section 9(4): ‘On an application under this section the court shall grant a stay unless satisfied that the arbitration agreement is null and void, inoperative, or incapable of being performed.’

(p. 254) 10.44  The Act allows a party to apply for a stay even if the relevant arbitration agreement conditions recourse to arbitration on the exhaustion of ‘other dispute resolution procedures’.57 Simultaneously, it requires the applicant to recognize the court proceedings against it, but not to take steps towards answering the substantive claim in those proceedings as such steps constitute a de facto waiver of the objection to the proceedings that animates the section 9 application.58

10.45  If an application under section 9 fails, or cannot be maintained under that section (eg if the court proceedings are located abroad), the party may apply to the English courts to issue an injunction under section 44(2)(e), discussed at paragraph 10.37, prohibiting the opposing party from pursuing a court action in violation of an arbitration agreement.

10.46  It is important to reiterate here that injunctions under section 44(2)(e) are temporary, but a party may be required to show a ‘high degree of probability’ that the underlying arbitration agreement is valid in order to obtain such an injunction.59 Permanent anti-suit injunctions may be issued under section 37 of the Supreme Court Act 1981, which also applies to arbitrations seated outside England and Wales.60 Such injunctions, either temporary or permanent, may also be issued at any point in the arbitral proceedings but, similarly to section 9 remedies, are usually sought early, when objecting parties seek to delay or derail the arbitration.61 Notably, a party may obtain an anti-suit injunction even if it has no intention of commencing arbitration to protect its contractual right not to be sued in any forum other than arbitration.62

(p. 255) 10.47  The arbitration-friendly attitude of English courts often leads parties that wish to resist arbitration to file suit in a foreign court. Historically, English courts have issued injunctions against participation in foreign court proceedings in violation of an agreement to arbitrate.63 This trend has been stemmed considerably, however, by the European Court of Justice’s decision in West Tankers, which all but restrained the ability of courts throughout the European Union to enjoin court proceedings in favour of arbitration when those proceedings are instituted in another EU Member State. Perhaps unsurprisingly, West Tankers arose from an anti-suit injunction issued by an English court, and was referred to the ECJ by the House of Lords.64

10.48  According to the ECJ in West Tankers, anti-suit injunctions between courts of EU Member States are incompatible with Council Regulation (EC) 44/2001 on jurisdiction and the enforcement of judgments in civil and commercial matters (the ‘Brussels Regulation’).65 The ECJ reasoned that anti-suit injunctions constitute an unwarranted interference in the jurisdiction of the national courts of EU Member States and violate the mutual trust principle of the Brussels Regulation.66 Still, anti-suit injunctions remain available in EU courts where court proceedings brought in breach of an arbitration agreement are commenced outside the European Union.67

10.49  The West Tankers decision appears to have generated several unwelcome side-effects, including the situation in which a judgment from the courts of an EU Member State may render invalid an arbitration agreement that is considered enforceable by the (EU-based) courts of the seat. The European Commission’s proposed remedy of seeking an early declaration from the courts of the seat as to the validity of the arbitration agreement has been criticized by countries where declaratory relief is unavailable. In this sense, however, England and Wales is a favourable jurisdiction because, as discussed earlier, the courts are empowered under Section 32 of the 1996 Act to declare the arbitration agreement valid even before the proceedings commence.

10.50  Responding to the ECJ’s highly controversial interpretation of the Brussels Regulation,68 the English courts in West Tankers have held that despite the ECJ’s ruling, EU law does not (p. 256) pre-empt the jurisdiction of the arbitral tribunal to award damages against the party that breaches an arbitration agreement by initiating proceedings before an EU Member State’s court.69 Moreover, the arbitral award may be enforced while the related EU Member State court proceeding is pending, thus establishing the primacy of the award over any later inconsistent judgment by that court.70

10.51  As the date of writing, the European Parliament has voted to amend the Brussels Regulation so as to address its adverse effects with respect to arbitral proceedings. The new Regulation is poised to exclude arbitration completely, and to contain specific directions as to how the courts of EU Member States should handle applications concerning the validity of arbitration agreements.71

10.3  Role of Courts Before the Issuance of the Award

10.3.1  The tribunal’s jurisdiction

10.52  After the commencement of the proceedings, the tribunal’s jurisdiction may be challenged under section 32 of the 1996 Act. However, after the commencement of the proceedings, the timing of such a challenge is governed by section 31, a mandatory provision of the Act, which provides:

  1. (1)  An objection that the arbitral tribunal lacks substantive jurisdiction at the outset of the proceedings must be raised by a party not later than the time he takes the first step in the proceedings to contest the merits of any matter in relation to which he challenges the tribunal’s jurisdiction.

10.53  A party is not precluded from raising such an objection by the fact that he has appointed or participated in the appointment of an arbitrator.

  1. (2)  Any objection during the course of the arbitral proceedings that the arbitral tribunal is exceeding its substantive jurisdiction must be made as soon as possible after the matter alleged to be beyond its jurisdiction is raised.

  2. (3)  The arbitral tribunal may admit an objection later than the time specified in subsection (1) or (2) if it considers the delay justified.

  3. (4)  Where an objection is duly taken to the tribunal’s substantive jurisdiction and the tribunal has power to rule on its own jurisdiction, it may—

    1. (a)  rule on the matter in an award as to jurisdiction, or

    2. (p. 257) (b)  deal with the objection in its award on the merits.

      If the parties agree which of these courses the tribunal should take, the tribunal shall proceed accordingly.

  4. (5)  The tribunal may in any case, and shall if the parties so agree, stay proceedings whilst an application is made to the court under section 32 (determination of preliminary point of jurisdiction).

10.54  As mentioned earlier, section 73 of the Act renders failure to raise a jurisdictional objection at the appropriate juncture as a waiver of that objection. Consequently, a party may face a claim of waiver on two separate yet overlapping grounds, namely sections 31 and 73. Such a waiver operates to negate any objection raised after the rendering of the award under section 67 of the Act, discussed at paragraph 10.99.

10.3.2  Appeal on a question of law

10.55  Section 45(1) of the 1996 Act permits a party to the arbitration (but not the arbitral tribunal acting sua sponte) to appeal to the English courts a question of law that affects the rights of one or more of the parties:

Unless otherwise agreed by the parties, the court may on the application of a party to arbitral proceedings (upon notice to the other parties) determine any question of law arising in the course of the proceedings which the court is satisfied substantially affects the rights of one or more of the parties.

10.56  The ‘question of law’ need not be limited to a specific municipal law72 or subject matter, and may include questions of construction of a contract or other instrument, and issues of arbitral procedure. Applicants under this section, however, should be mindful of the preclusive effect of other sections of the 1996 Act on the ‘catch-all’ nature of section 45. For example, a jurisdictional challenge is governed by sections 32 and 67 (depending on its timing) while a challenge regarding arbitrator appointment arises under section 18. Similarly, section 45 does not cover questions that the Act places squarely within the discretion of the arbitral tribunal, such as the admissibility of evidence.73

10.57  Applications under this section are extremely rare in practice because of the 1996 Act’s stringent prerequisites. The Act requires that all parties to the arbitration consent to such application, or that the tribunal grant the applicant leave to file, and the court hearing the application must be satisfied that the application was made without delay and that its resolution will result in ‘substantial savings in costs’.74 In fact, even if all the requirements under section 45 are satisfied, the court retains discretion to decline to decide the issue of law presented thereunder—although such a decision would be rare in practice.75

10.58  Moreover, similarly to section 32, discussed previously, while the ‘decision of the court on the question of law shall be treated as a judgment of the court for purposes of an appeal’, no appeal (p. 258) can be filed unless the court grants leave because it considers the question ‘of general importance’ or one that must be considered by the Court of Appeal ‘for some other special reason’.76

10.59  Finally, as noted earlier, parties to an arbitration agreement may contract out of this section by entering into an ‘exclusion agreement’ or by agreeing that the resulting arbitral award need not contain reasons, which has been interpreted as a de facto exclusion agreement.77 The adoption of certain arbitral rules, such as those of the London Court of International Arbitration, or the International Chamber of Commerce, also has the effect of precluding judicial review of alleged errors of law.78

10.60  Notably, applications under section 45, as well as under section 32 (discussed at paragraphs 10.19–10.22) can also be used in support of arbitration, namely to request a declaration by the courts that an arbitration agreement is valid.

10.3.3  Interim measures

10.61  Once an arbitral tribunal is in place, the parties should direct to the tribunal, and not to a court, any request for interim measures that falls within the tribunal’s power under section 38 of the 1996 Act. This course of action, although not mandatory, is consistent with the spirit and policy aims of the Act.79 As a practical matter, however, resorting directly to a court may result in swifter relief than the sometimes arduous process of obtaining a tribunal order or award and attempting to enforce it through the courts.80 Moreover, a court order or injunction may bind third parties that are not part of the arbitration agreement, and therefore that are beyond the in personam jurisdiction of the arbitrators.81

10.62  Section 38 provides:

  1. (1)  The parties are free to agree on the powers exercisable by the arbitral tribunal for the purposes of and in relation to the proceedings.

  2. (2)  Unless otherwise agreed by the parties the tribunal has the following powers.

  3. (3)  The tribunal may order a claimant to provide security for the costs of the arbitration.

    This power shall not be exercised on the ground that the claimant is—

    1. (a)  an individual ordinarily resident outside the United Kingdom, or

    2. (b)  a corporation or association incorporated or formed under the law of a country outside the United Kingdom, or whose central management and control is exercised outside the United Kingdom.

  4. (4)  The tribunal may give directions in relation to any property which is the subject of the proceedings or as to which any question arises in the proceedings, and which is owned by or is in the possession of a party to the proceedings—

    1. (a)  for the inspection, photographing, preservation, custody or detention of the property by the tribunal, an expert or a party, or

    2. (p. 259) (b)  ordering that samples be taken from, or any observation be made of or experiment conducted upon, the property.

  5. (5)  The tribunal may direct that a party or witness shall be examined on oath or affirmation, and may for that purpose administer any necessary oath or take any necessary affirmation.

  6. (6)  The tribunal may give directions to a party for the preservation for the purposes of the proceedings of any evidence in his custody or control.

10.63  If a party obtains a peremptory order from the arbitral tribunal, for example ordering the respondent to refrain from selling any of the property in dispute, the courts have authority to enforce such an order—in addition, of course, to the tribunal’s own power under the Act to do so. According to recent case law, this authority extends to negative declarations by the arbitral tribunal.82

10.64  According to Section 42:

  1. (1)  Unless otherwise agreed by the parties, the court may make an order requiring a party to comply with a peremptory order made by the tribunal.

  2. (2)  An application for an order under this section may be made—

    1. (a)  by the tribunal (upon notice to the parties),

    2. (b)  by a party to the arbitral proceedings with the permission of the tribunal (and upon notice to the other parties), or

    3. (c)  where the parties have agreed that the powers of the court under this section shall be available.

  3. (3)  The court shall not act unless it is satisfied that the applicant has exhausted any available arbitral process in respect of failure to comply with the tribunal’s order.

  4. (4)  No order shall be made under this section unless the court is satisfied that the person to whom the tribunal’s order was directed has failed to comply with it within the time prescribed in the order or, if no time was prescribed, within a reasonable time.

  5. (5)  The leave of the court is required for any appeal from a decision of the court under this section.

10.65  To request interim measures directly from a court after the proceedings have commenced, parties can avail themselves of section 44 of the Act, which, as shown earlier, covers a broad array of requests for relief.83 Such relief, however, may be denied in the presence of a ‘Scott v Avery’ clause,84 precluding any judicial remedy before the case has been heard by the arbitral tribunal.85

(p. 260) 10.3.4  Time limitations and extensions

10.66  Under section 13(1) of the 1996 Act: ‘The Limitation Acts apply to arbitral proceedings as they apply to legal proceedings.’ Section 13 goes on to provide as follows:

  1. (2)  The court may order that in computing the time prescribed by the Limitation Acts for the commencement of proceedings (including arbitral proceedings) in respect of a dispute which was the subject matter—

    1. (a)  of an award which the court orders to be set aside or declares to be of no effect, or

    2. (b)  of the affected part of an award which the court orders to be set aside in part, or declares to be in part of no effect,

      the period between the commencement of the arbitration and the date of the order referred to in paragraph (a) or (b) shall be excluded.

  2. (3)  In determining for the purposes of the Limitation Acts when a cause of action accrued, any provision that an award is a condition precedent to the bringing of legal proceedings in respect of a matter to which an arbitration agreement applies shall be disregarded.

  3. (4)  In this Part ‘the Limitation Acts’ means—

    1. (a)  in England and Wales, the Limitation Act 1980, the Foreign Limitation Periods Act 1984 and any other enactment (whenever passed) relating to the limitation of actions;

    2. (b)  in Northern Ireland, the Limitation (Northern Ireland) Order 1989, the Foreign Limitation Periods (Northern Ireland) Order 1985 and any other enactment (whenever passed) relating to the limitation of actions.

10.67  The most important consequence of this provision is that it applies the time limitations imposed by the Limitation Act 1980 to arbitration proceedings. For example, the limitation for a contract case is six years from the time of the breach.86 An action for the enforcement of an award must be brought, according to section 7 of the Limitation Act, within six years from the date ‘the cause of action accrued’. This has been held to signify the date on which the award should have been paid.87 It is also worth noting that section 35 of the Limitation Act 1980, which allows the addition and ‘backdating’ of a new claim to litigation proceedings, does not apply to arbitration.88

10.68  Section 13(2) and (3) resolve time lapse issues that arise in special circumstances: in the former case, when a court sets aside or modifies an award, and in the latter case when a contract contains a ‘Scott v Avery’ clause that preconditions resort to the courts on the completion of the arbitration proceedings.

10.69  The 1996 Act, moreover, empowers the courts to ‘extend any time limit agreed by them in relation to any matter relating to the arbitral proceedings or specified in any provision of [Part I of the Act] having effect in default of such agreement’.89 Section 79 of the Act further provides:90

  1. (2)  An application for an order may be made—

    1. (a)  by any party to the arbitral proceedings (upon notice to the other parties and to the tribunal), or

    2. (p. 261) (b)  by the arbitral tribunal (upon notice to the parties).

  2. (3)  The court shall not exercise its power to extend a time limit unless it is satisfied—

    1. (a)  that any available recourse to the tribunal, or to any arbitral or other institution or person vested by the parties with power in that regard, has first been exhausted, and

    2. (b)  that a substantial injustice would otherwise be done.

  3. (4)  The court’s power under this section may be exercised whether or not the time has already expired.

  4. (5)  An order under this section may be made on such terms as the court thinks fit.

  5. (6)  The leave of the court is required for any appeal from a decision of the court under this section.

10.70  There are two principal issues to note with respect to section 79—in addition to its being non-mandatory. First, although the courts enjoy wide discretion in extending time limits, including those imposed by other provisions of the Act except section 12, they will rarely impinge upon a decision by the arbitral tribunal not to provide an extension in the first place.91 Second, the section imposes two conditions on a court-mandated time extension: first, that all avenues open to the arbitrators to extend time have been exhausted; and second, that inaction on the court’s part would result in a ‘substantial injustice’.92

10.71  Similarly, the English courts may extend the time provided in an arbitration agreement for the issuance of an arbitral award. According to Section 50(2), an application for such extension may be made ‘(a) by the tribunal (upon notice to the parties) and (b) by any party to the proceedings (upon notice to the tribunal and the other parties)’. The only condition attached to the court’s action under this Section is the ‘substantial injustice’ test93 discussed at paragraph 10.70 in the context of section 79. In reaching its decision, the court is not bound by prior time limitations either contractual or subsequently agreed upon by the parties, and its order can be appealed only by the court’s leave.94

10.3.5  Challenging or replacing an arbitrator

10.72  The 1996 Act allows parties to petition the English courts to remove an arbitrator. The circumstances under which a court may effect such a removal are listed in some detail in section 24(1) of the Act, which provides:

  1. (1)  A party to arbitral proceedings may (upon notice to the other parties, to the arbitrator concerned and to any other arbitrator) apply to the court to remove an arbitrator on any of the following grounds—

    1. (a)  that circumstances exist that give rise to justifiable doubts as to his impartiality;

    2. (b)  that he does not possess the qualifications required by the arbitration agreement;

    3. (c)  that he is physically or mentally incapable of conducting the proceedings or there are justifiable doubts as to his capacity to do so;

    4. (d)  that he has refused or failed—

      1. (i)  properly to conduct the proceedings, or

      2. (ii)  to use all reasonable despatch in conducting the proceedings or making an award,

        and that substantial injustice has been or will be caused to the applicant.

(p. 262) 10.73  Notably, section 24(1)(a) makes reference only to ‘impartiality’ and not to ‘independence’, the term that often accompanies it.95 Apparently this was deliberate, in order to avoid protracted litigation over the standard of independence, which under the Act becomes relevant only insofar as it affects impartiality.96 Impartiality may be questioned, for example, where the arbitrator maintains a commercial relationship with one of the parties, or when the arbitrator maintains an interest in the outcome of the arbitration.97

10.74  The reference to arbitrator ‘qualifications’ in section 24(1)(b) concerns the background and skills of the appointed arbitrator as contractually agreed upon between the parties, while section 24(1)(c) permits the removal of an arbitrator due to metal or physical incapacity. Finally, section 24(1)(d) represents an open-ended provision, which:

...should only be available where the conduct of the arbitrator is such as to go so beyond anything that could reasonably be defended that substantial injustice has resulted or will result. The provision is not intended to allow the Court to substitute its own view as to how the arbitral proceedings should be conducted.98

An arbitrator’s excess of his or her jurisdiction may constitute a ‘serious irregularity’ under section 24(1)(d), as may do, inter alia, unequal treatment of the parties; unilateral communications; and refusal to act.99 In any event, the evidence of misconduct must be accompanied by a showing of prejudice sufficient to constitute a ‘substantial injustice’.100

10.75  Section 24 further provides that a party petitioning to remove an arbitrator ought to exhaust any remedies it may have under the arbitral rules or institutional framework of the arbitration,101 and that the petition for removal should not derail the arbitral proceedings, which may continue to the issuance of an award.102 Finally, the courts may order the parties to pay the removed arbitrator’s fees,103 and the arbitrator him- or herself may appear before the courts to defend against his or her removal.104 As with several other sections, leave of the court is required to appeal against a decision under section 24.105

10.76  The courts may also grant relief to an arbitrator who resigns voluntarily. Under section 25, if an arbitrator resigns and is unable to reach agreement with the parties, he or she may petition the courts ‘to grant him relief from any liability thereby incurred by him, and to make such order as it think fit as to his entitlement (if any) to fees and expenses or the repayment of any (p. 263) fees and expenses already paid’.106 To obtain such relief, the arbitrator must show that it was reasonable for the arbitrator to resign.107 Under Section 27, vacancies on the tribunal by reason of removal, death, etc may be filled pursuant to sections 16 and 18, discussed previously.

10.3.6  Costs

10.77  Under section 28 of the 1996 Act, the parties are jointly and severally liable to the tribunal for fees and expenses, and the courts retain jurisdiction to amend such fees and expenses as they see fit. In fact, under section 59, the arbitral tribunal may withhold the award until it has received payment for its services—a payment that it has discretion to allocate between the parties under section 61 of the Act.108 If the parties dispute the arbitrators’ fees and expenses, they may petition the courts to intervene and either set the fees and costs directly, or determine the manner in which they should be calculated.109

10.4  Arbitration under the English Arbitration Act

10.4.1  Arbitration rules

10.78  The 1996 Act gives the tribunal discretion to decide all procedural and evidentiary matters, subject to the right of the parties to agree any matter.110 Such matters include whether to apply strict rules of evidence (or any other rules) regarding the admissibility, relevance, or weight of any material produced.111 Moreover, the tribunal must decide on the scope and content of document production.112 This discretion is not absolute; it must be exercised subject to the general duty under the 1996 Act to act fairly and impartially, and to adopt procedures that are suitable to the circumstances of the case.113

10.79  Procedures regulating document production are set out in the IBA Rules and may be adopted by agreement of the parties or by order of the tribunal. In the absence of such an agreement, tribunals frequently look to the IBA Rules for guidance in any event. Parties generally produce those documents upon which they rely and, if necessary, request the production of certain documents or categories of documents from the opposing party. If a party fails to comply with a peremptory order for document production, the tribunal may, inter alia, draw adverse inferences and/or make appropriate orders as to costs.114

10.4.2  Limitation periods

10.80  The 1996 Act provides that the UK Limitation Act 1980 and the UK Foreign Limitation Periods Act 1984, as well as ‘any other enactment (whenever passed) relating to the limitation (p. 264) of actions’, apply to arbitral proceedings as they apply to legal proceedings.115 A claimant in arbitration proceedings must therefore commence arbitration within the same time periods as a claimant in litigation.

10.4.3  The arbitration agreement

10.81  The 1996 Act does not list or delimit matters which are not capable of settlement by arbitration.116 Commercial disputes arising under a valid arbitration agreement are generally arbitrable; non-arbitrable matters may include criminal and family law disputes.

10.82  Under English law, a third party cannot be bound by an arbitration clause without its consent, and may participate in an arbitration only with the consent of all parties concerned. Consent may be given by adopting institutional rules that provide for joinder (eg the LCIA Rules). A tribunal may only consolidate proceedings with the consent of all parties concerned.117 Parties may provide for consolidation in the relevant contract(s) or agree to consolidation once a dispute has arisen.118

10.83  Unless otherwise agreed by the parties, an arbitration agreement is treated as a distinct agreement and is not regarded as invalid, non-existent, or ineffective merely because the wider contract never came into existence or is subsequently found to be invalid.119 However, in certain limited circumstances (eg in cases of forgery) the arbitration agreement may be declared invalid on the same grounds as the wider contract.120

10.4.4  The arbitral tribunal and procedural issues

10.84  The principle of competence-competence is recognized in the 1996 Act and empowers the tribunal to rule on the question of whether it has jurisdiction.121 Unless otherwise agreed by the parties, the tribunal may rule on whether there is a valid arbitration agreement, whether the tribunal is properly constituted, and what matters have been submitted to arbitration.122 Where one party denies that the tribunal has jurisdiction to determine the dispute, it must raise the objection at the outset of the proceedings.123

10.85  Unless the parties agree otherwise (eg by adopting institutional rules that provide for a different procedure), arbitral proceedings are commenced by written notice to the other party/parties or (if applicable) the appointing authority.124 The parties are free to agree on the number of arbitrators and the procedure for their appointment.125 If there is no agreement on the number of arbitrators, the 1996 Act provides that the tribunal shall consist of a sole arbitrator.126

(p. 265) 10.86  If there is no agreement on the procedure, then the 1996 Act provides that:

  • •  in the case of a sole arbitrator, the parties shall jointly appoint an arbitrator within 28 days of a request by either party to do so;127

  • •  if the tribunal is to consist of two arbitrators, each party shall appoint one arbitrator not later than 14 days after a request in writing by either party to do so;128

  • •  if the tribunal is to consist of three arbitrators, each party shall appoint one arbitrator within 14 days of a written request by either party, and the two appointed arbitrators shall appoint the third member of the tribunal forthwith;129

  • •  if the tribunal is to consist of two arbitrators and an umpire, each party shall appoint one arbitrator within 15 days of a written request by either party and the two appointed arbitrators shall appoint an umpire at any time before any substantive hearing or forthwith if they cannot agree on any matter relating to the arbitration.130

10.87  When one party fails to appoint an arbitrator within the time specified, the other party may give notice in writing to the defaulting party that it proposes to appoint its arbitrator as sole arbitrator. If the defaulting party does not make the required appointment and notify the other party that it has done so within seven days, the other party may appoint its arbitrator as sole arbitrator, whose award will be binding on both parties.131 An arbitrator can be removed by the parties acting jointly or by a relevant arbitral institution.132

10.88  Where a respondent fails to participate in an arbitration, the tribunal may proceed to an award on the basis of the evidence before it.133 The party in default will typically be given every opportunity to participate before the tribunal allows the arbitration to proceed in its absence. The tribunal may ask the non-defaulting party to attend a merits hearing and present its case (including witness evidence) in order that the tribunal is able to render a fully-reasoned award. It remains open to the defaulting party subsequently to challenge the award on the usual grounds.

10.4.5  Interim measures

10.89  The first source of a tribunal’s powers is the arbitration agreement between the parties under which the tribunal has been appointed. These can be incorporated from the rules of an arbitration institution or contained in an express agreement. If there is no express agreement, the 1996 Act states that the tribunal has the power to grant interim relief,134 including, inter alia, security for costs135 and directions regarding the inspection, preservation, custody, or detention of the subject matter of the dispute.136 The tribunal may also make interim awards, including a provisional order for the payment of money between the parties.137 The tribunal has no power to direct the taking of witness evidence, or to compel a witness to attend, but (p. 266) may direct that a party or witness shall be examined under oath or affirmation (and may for that purpose administer any necessary oath or affirmation).138

10.90  If the claimant fails to comply with an order requiring security for costs, the tribunal can dismiss the claim.139 The tribunal may also refuse delivery of an award if its fees and expenses have not been met.140 If a party fails to comply with an order of the tribunal without good cause, the tribunal may issue a peremptory order to the same effect.141

10.4.6  Award and costs

10.91  The award must be rendered in accordance with the substantive law chosen by the parties. Unless the parties agree otherwise, where there are three or more arbitrators, decisions are made by majority.142 Where the tribunal is unable to reach a majority decision, the chairman’s vote will prevail.143 The parties are free to agree on the remedies or relief that the tribunal may grant.144 Accordingly, subject to public policy restrictions, parties can provide that a remedy not available under English law (eg punitive damages) may be awarded by the tribunal.145

10.92  The parties are free to agree on the form of the award.146 The default position under the 1996 Act is that the award must be in writing and signed by all arbitrators (or those assenting to it), contain reasons (unless it is an agreed award or the parties have agreed to dispense with the reasons), and state the seat of the arbitration and the date on which it is made.147

10.93  The tribunal is not subject to a fixed time limit in rendering its award. The tribunal may correct an award on its own initiative or on the application of either party. Any application must be made within 28 days of the award.148 Any correction must be made within 28 days of receipt of the application or, where made by the tribunal of its own motion, within 28 days of the award.149 The parties are free to agree on different time limits (eg by adopting institutional rules).150

10.94  Costs are either determined by the relevant arbitral institution or, in ad hoc arbitrations, on the basis of an hourly rate agreed in advance between the parties and the tribunal. The parties usually share the costs of the tribunal in the first instance (and any costs of the arbitral institution). Each party pays the costs of its own lawyers and other advisers, subject to any recovery that it might make from the other party.

10.95  Unless otherwise agreed, the tribunal may make an award allocating the costs of the arbitration (including legal fees) between the parties and will generally require the unsuccessful party to pay the reasonable costs of the successful party.151 In awarding costs, the tribunal (p. 267) must specify the basis on which it has acted, and the items of recoverable costs and the amount referable to each.152 The tribunal may take into account offers to settle made by the parties where, for example, the tribunal’s award is less than an amount offered by a party in settlement prior to the award.

10.96  The parties are free to agree on the power of the tribunal to award interest.153 The default position under the 1996 Act is that the tribunal may award simple or compound interest from such dates and at such rates as it considers meets the justice of the case.154 No mandatory or customary rate of interest is applicable, although where interest is claimed it will generally be awarded unless there is good reason not to (such as inordinate delay in prosecuting the claim).

10.5  Role of Courts After the Issuance of the Award

10.97  According to the Act: ‘Unless otherwise agreed by the parties, an award made by the tribunal pursuant to an arbitration agreement is final and binding both on the parties and on any persons claiming through or under them.’155 ‘This’, the Act goes on to provide, ‘does not affect the right of a person to challenge the award by any available arbitral process of appeal or review or in accordance with the provisions of this Part.’156 This section outlines the grounds on provisions on recognition and enforcement, along with some comments and pointers.

10.5.1  Challenges to the award

10.98  According to section 67 of the 1996 Act:

  1. (1)  A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court—

    1. (a)  challenging any award of the arbitral tribunal as to its substantive jurisdiction; or

    2. (b)  for an order declaring an award made by the tribunal on the merits to be of no effect, in whole or in part, because the tribunal did not have substantive jurisdiction.

      A party may lose the right to object (see section 73) and the right to apply is subject to the restrictions in section 70(2) and (3).

  2. (2)  The arbitral tribunal may continue the arbitral proceedings and make a further award while an application to the court under this section is pending in relation to an award as to jurisdiction.

  3. (3)  On an application under this section challenging an award of the arbitral tribunal as to its substantive jurisdiction, the court may by order—

    1. (a)  confirm the award,

    2. (b)  vary the award, or

    3. (c)  set aside the award in whole or in part.

  4. (4)  The leave of the court is required for any appeal from a decision of the court under this section.

(p. 268) 10.99  Section 67, which is mandatory, allows a challenge against an award that has been issued by a tribunal without the power to do so.157 The Act allows objections as to substantive jurisdiction, including the scope and validity of the arbitration agreement and the constitution of the tribunal, to be raised both before and during the arbitration proceedings. Meanwhile, section 73 imposes a waiver over objections that are not raised in a timely manner, as also noted in section 67(1). Consequently, a challenge to jurisdiction under section 67 will lie in two instances: first, where a party refused to participate in arbitral proceedings from the outset,158 and second, where a party lodged a timely objection to the tribunal’s jurisdiction that was not resolved by a preliminary ruling.

10.100  Additional constraints imposed by this section are the ‘restrictions in section 70(2) and (3)’. Section 70(2) provides that: ‘An application or appeal may not be brought if the applicant or appellant has not first exhausted—(a) any available arbitral process of appeal or review, and (b) any available recourse under section 57 (correction of award or additional award).’ This provision, in other words, requires the applicant to have previously availed itself of the tribunal’s ability to provide relief as provided for under the Act.

10.101  Section 70(3) sets a time limitation on a party’s ability to raise a claim under section 67: ‘Any application or appeal must be brought within twenty-eight days of the date of the award or, if there has been any arbitral process of appeal or review, of the date the applicant or appellant was notified of the result of that process.’

10.102  Challenges under section 67 typically are resolved in fully-fledged trials, where the courts review de novo the evidence of fact and law (as they pertain to substantive jurisdiction) that was initially submitted to the arbitral tribunal, on the theory that the courts should be as well placed as the arbitrators to resolve the issue of jurisdiction before them.159 It follows that a party may not freely introduce evidence that was not submitted in the arbitration proceedings in the course of a plea under section 67; if it wishes to do so, it should obtain consent from the opposing side or leave of the court seised of the action at an appropriate interlocutory hearing.160

(p. 269) 10.103  In addition to a challenge to the tribunal’s substantive jurisdiction, the Act permits an appeal based on a ‘serious irregularity’ that affects the tribunal, the proceedings, or the award. Section 68 provides, in this regard:

  1. (2)  Serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant—

    1. (a)  failure by the tribunal to comply with section 33 (general duty of tribunal);

    2. (b)  the tribunal exceeding its powers (otherwise than by exceeding its substantive jurisdiction: see section 67);

    3. (c)  failure by the tribunal to conduct the proceedings in accordance with the procedure agreed by the parties;

    4. (d)  failure by the tribunal to deal with all the issues that were put to it;

    5. (e)  any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award exceeding its powers;

    6. (f)  uncertainty or ambiguity as to the effect of the award;

    7. (g)  the award being obtained by fraud or the award or the way in which it was procured being contrary to public policy;

    8. (h)  failure to comply with the requirements as to the form of the award; or

    9. (i)  any irregularity in the conduct of the proceedings or in the award which is admitted by the tribunal or by any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award.

10.104  Section 68(3) goes on to provide the remedies that the courts can adopt in the presence of a ‘serious irregularity’, including remittance of the award, in whole or in part, to the tribunal for reconsideration; setting the award aside in whole or in part; or declaring the award to be of no effect, in whole or in part.

10.105  Before commenting briefly on some of the different types of ‘serious irregularity’ identified in this section, it is worth observing that the mere existence of such an irregularity is not sufficient. It needs to have caused, or be reasonably certain to cause, ‘substantial injustice to the applicant’. The DAC Committee has described this legal standard in the following terms:

The test of ‘substantial injustice’ is intended to be applied by way of support for the arbitral process, not by way of interference with that process. Thus it is only in those cases where it can be said that what has happened is so far removed from what could reasonably be expected of the arbitral process that we would expect the Court to take action. The test is not what would have happened had the matter been litigated. To apply such a test would be to ignore the fact that the parties have agreed to arbitrate, not litigate. Having chosen arbitration, the parties cannot validly complain of substantial injustice unless what has happened simply cannot on any view be defended as an acceptable consequence of that choice.161

10.106  In other words, the requirement that there be a ‘substantial injustice’ prevents section 68 from becoming ‘another bite at the apple’ for losing parties, and renders it a very limited ground on which to lodge challenges against those rare awards that contain or are founded on fundamental breaches of due process and other types of non-feasance or misfeasance by arbitral tribunals.162

(p. 270) 10.107  The instances of ‘serious irregularity’ listed under section 68(2) are not mutually exclusive, although their overlap with other sections of the Act, such as 67, is either explicitly disclaimed163 or avoided via the interpretive presumption that no such overlap was intended among the Act’s various sections. The most frequently evoked provision is section 68(2)(a), an allegation that the tribunal did not comply with the mandatory requirements under section 33, which lists the overriding obligations of arbitrators, such as according due process to the parties and treating them equally.164 Similarly, section 68 establishes a cause of action when, for example, the tribunal has applied the wrong law to certain legal issues (section 68(2)(b)), when the tribunal has failed to deal with all the issues in the arbitration (section 68(2)(d)), or when a party prevails in an arbitration by deliberately abusing the arbitral process (section 68(2)(g)).

10.108  Notably, applications under section 68 have the same procedural prerequisites as those under section 67: exhaustion of arbitral remedies and lodging of the claim within 28 days from the relevant arbitral award.

10.5.2  Appeal on point of law

10.109  Section 69 of the Act introduces a limited (in terms of both substantive scope and procedural requirements) right to appeal against an award on a point of law.165 Such an appeal can be lodged against partial or provisional awards as well, although the merits of such a petition may be affected adversely by the arbitrators’ ability to address any contested point of law later in the proceedings. The parties are at liberty to contract out of this section:

  1. (1)  Unless otherwise agreed by the parties, a party to arbitral proceedings may (upon notice to the other parties and to the tribunal) appeal to the court on a question of law arising out of an award made in the proceedings.

    An agreement to dispense with reasons for the tribunal’s award shall be considered an agreement to exclude the court’s jurisdiction under this section.

  2. (2)  An appeal shall not be brought under this section except—

    1. (a)  with the agreement of all the other parties to the proceedings, or

    2. (b)  with the leave of the court.

      The right to appeal is also subject to the restrictions in section 70(2) and (3).

  3. (3)  Leave to appeal shall be given only if the court is satisfied—

    1. (a)  that the determination of the question will substantially affect the rights of one or more of the parties,

    2. (b)  that the question is one which the tribunal was asked to determine,

    3. (c)  that, on the basis of the findings of fact in the award—

      1. (i)  the decision of the tribunal on the question is obviously wrong, or

      2. (p. 271) (ii)  the question is one of general public importance and the decision of the tribunal is at least open to serious doubt, and

    4. (d)  that, 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.

  4. (4)  An application for leave to appeal under this section shall identify the question of law to be determined and state the grounds on which it is alleged that leave to appeal should be granted.

  5. (5)  The court shall determine an application for leave to appeal under this section without a hearing unless it appears to the court that a hearing is required.

  6. (6)  The leave of the court is required for any appeal from a decision of the court under this section to grant or refuse leave to appeal.

  7. (7)  On an appeal under this section the court may by order—

    1. (a)  confirm the award,

    2. (b)  vary the award,

    3. (c)  remit the award to the tribunal, in whole or in part, for reconsideration in the light of the court’s determination, or

    4. (d)  set aside the award in whole or in part.

      The court shall not exercise its power to set aside an award, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration.

  8. (8)  The decision of the court on an appeal under this section shall be treated as a judgment of the court for the purposes of a further appeal.

    But no such appeal lies without the leave of the court which shall not be given unless the court considers that the question is one of general importance or is one which for some other special reason should be considered by the Court of Appeal.

10.110  There are four main observations to make about this provision. First, the question of law at issue must affect substantially the ‘rights of the parties’ (section 69(3)(a)). This has been interpreted to exclude legal issues that did not constitute part of the underlying arbitral award’s reasoning, or that pertain to matters of procedure, not substance. In this regard, the reference to the parties’ ‘rights’ concerns rights that are at issue in the dispute, not those that may be collaterally affected by it (such as unrelated financial interests).

10.111  Second, section 69(3)(b) imposes an estoppel on arguments that were not raised during the arbitration proceedings. Nevertheless, if the arbitrators have chosen to address a point of law that was never brought before them, that point may be appealed under section 69 if it bears significantly on the outcome of the arbitration.166 By contrast, if the parties attempt to introduce new evidence, in the absence of serious irregularity, the courts are not allowed to remit the award or take an action that would allow the consideration of the new evidence after an award has been rendered.

10.112  Third, the factual review mandated by section 69(3)(c) implies a level of deference to the arbitrators,167 who had the benefit of interpreting specific facts in the light of the entire factual record—the presentation of which may not be possible in a section 69 proceeding, especially if it takes place solely on the papers under section 69(5). Importantly, the ultimate question presented should be one of law, and not purely of fact.168

(p. 272) 10.113  Finally, as with several other sections under the 1996 Act, the remedies under section 69 are circumscribed procedurally by section 70(2) to (3), so an application requires either leave from the tribunal or agreement by all parties. Moreover, the applicant must have exhausted the remedies available within the arbitration, and bring its claim 28 days from the date of the award.

10.5.3  Enforcement

10.114  Upon the rendering of an arbitral award the losing party may (and often does) comply voluntarily with the terms of the award. If it does not, however, enforcement via the courts is necessary. The enforcement of arbitral awards under the Act may be accomplished in two principal ways: first, by operation of the ‘summary procedure’ outlined in section 66; and second, by operation of international conventions to which the United Kingdom is a party, such as the New York Convention.

10.115  According to section 66 of the 1996 Act:

  1. (1)  An award made by the tribunal pursuant to an arbitration agreement may, by leave of the court, be enforced in the same manner as a judgment or order of the court to the same effect.

  2. (2)  Where leave is so given, judgment may be entered in terms of the award.

  3. (3)  Leave to enforce an award shall not be given where, or to the extent that, the person against whom it is sought to be enforced shows that the tribunal lacked substantive jurisdiction to make the award.

    The right to raise such an objection may have been lost (see section 73).

  4. (4)  Nothing in this section affects the recognition or enforcement of an award under any other enactment or rule of law, in particular under Part II of the Arbitration Act 1950 (enforcement of awards under Geneva Convention) or the provisions of Part III of this Act relating to the recognition and enforcement of awards under the New York Convention or by an action on the award.

10.116  Section 66 allows the enforcement of awards regardless of where the arbitration was seated169 by requesting permission from the English courts. That permission, if granted, does not amount to a court order itself, so failure to comply does not entail the same remedies as violation of such an order (eg contempt of court). As mentioned previously, the time limitation for the enforcement of an arbitral award is six years from the time it was supposed to be complied with, regardless of whether enforcement is sought under section 66 or under the New York Convention, which the Act incorporates.

10.117  Enforcement is at the discretion of the courts and is rarely refused, usually only on grounds of serious deficiency with the underlying arbitral award, or if the award cannot be enforced because enforcement would be contrary to public policy in England and Wales.170 A party may oppose an application for permission to enforce an award by evoking section 66(3). In practice, resistance of enforcement because of lack of substantive jurisdiction under section (p. 273) 66(3) is technically possible but rare, as it can be asserted only by a non-participant in the arbitration proceedings, or a party that has lodged a timely jurisdictional objection that has not been resolved.

10.118  Even if those conditions are satisfied, the opposing party may not have the opportunity to file a timely application, as requests for enforcement do not require notice to the other party.171 After the order of enforcement is issued, a party may still apply to have it set aside, not only under section 66(3), but also the other grounds available under the Act for setting aside awards discussed previously.

10.119  The fact that a foreign court has refused enforcement does not prevent the English court from proceeding with enforcement according to section 66, although issue estoppel may apply with respect to the foreign court’s factual and legal findings.172

10.120  Awards may also be enforced summarily pursuant to section III of the 1996 Act if they are covered by the New York Convention, and under section II of the Arbitration Act 1950, which is incorporated into the 1996 Act via section 99, if they are covered by the Geneva Convention but not the New York Convention.173 Such instances are rare, as the Geneva Convention has been eclipsed almost entirely by the New York Convention.

10.121  Section III incorporates into English law the United Kingdom’s undertaking under the New York Convention to enforce an award made pursuant to an arbitration agreement in the territory of a state (other than the United Kingdom) that is a party to the New York Convention.174 Section 102 of the 1996 Act outlines the documentary requirements for summary enforcement of a New York Convention award—namely duly authenticated and if necessary translated copies of the award and the arbitration agreement. The party seeking enforcement need not demonstrate that the award is binding on the other party, although such evidence may be required as part of a challenge to enforcement under the New York Convention.

10.122  The grounds on which a party can resist enforcement under the Convention are very narrow, a fact that is reflected in section 103 of the 1996 Act.175 The English courts have refused (p. 274) to apply a more (or less) stringent standard of scrutiny in evaluating set-aside applications based on the New York Convention versus the grounds provided under Part I of the 1996 Act.176

10.6  Conclusion

10.123  Our assessment of England and Wales as a venue for arbitration leads to two firm conclusions. First, England and Wales possesses a comprehensive and clearly articulated legal framework governing arbitration, and a sophisticated, impartial judiciary with ample experience in complex arbitral disputes and the collateral issues they raise under both English law and foreign laws and regulations. Second, the jurisdiction is distinctly arbitration-friendly, with a keen understanding of the benefits arbitration aims to confer on parties, and the policy considerations such benefits entail.

10.124  In this light, we hope our opening observation regarding the supremacy of London as a seat of arbitration involving parties from all over the world has become that much more justified.

Footnotes:

1  We use the terms ‘seat’ and ‘venue’ interchangeably for purposes of this chapter, although parties have sought to distinguish the two terms before the English courts. See Shashoua and ors v Sharma [2009] EWHC 957 (Comm), ruling, inter alia, that the designation of London as the ‘venue’ of the arbitration in an ICC arbitration clause was sufficient to hold that London was the juridical seat of arbitration intended by the parties.

2  See eg Queen Mary University of London and White & Case LLP, ‘2010 International Arbitration Survey: Choices in International Arbitration’ (2010) 19, reporting that 30% of the corporate counsel that participated in the survey prefer London as the seat of arbitration, with other widely-used seats such as Geneva and Paris trailing by a substantial margin. These findings are substantially the same as those in a similar survey undertaken in 2006 (Queen Mary School of International Arbitration, ‘International Arbitration: Corporate Attitudes and Practices’ (2006)). This trend is reflected, among others, in the substantial caseload of London-based arbitral institutions such as the London Court of International Arbitration, to which more than 200 cases are referred annually, with 80% of parties based outside England and Wales. See generally London Court of International Arbitration, Annual Reports at <http://www.lcia.org/LCIA/Casework_Report.aspx>; similarly, the London Maritime Arbitrators’ Association has reported that ‘more maritime disputes are referred to arbitration in London than to any other place where arbitration services are offered’. London Maritime Arbitrators Association, ‘Introduction’, at <http://www.lmaa.org.uk/about-us-Introduction.aspx>.

3  Arbitration Act 1996 (c 23) <http://www.legislation.gov.uk/ukpga/1996/23>. It is worth noting that the Act does not purport to ‘codify’ English arbitration law in the sense the term is used in civil law systems; several court decisions that have followed the enactment of the Arbitration Act have established fundamental principles of English arbitration law. Recognizing the importance of pre-existing and future common law, the Act preserves any such law consistent with the Act’s provisions. 1996 Act, s 81(1).

4  Reference will be made to other applicable statutes, such as the Supreme Court Act 1981, where appropriate. Parties lodging arbitration-related applications before the English courts also may need to consult the Civil Procedural Rules of 1998, as amended—especially Pt 62 and the associated Practice Direction. See D St John Sutton, J Gill, and M Gearing, Russell on Arbitration (Sweet & Maxwell 2007) s 7-009.

5  For an excellent overview of the Act and the manner in which it operates both procedurally and substantively, see St John Sutton, Gill, and Gearing (n 4).

6  B Harris, ‘Report on the Arbitration Act 1996’ (2007) 23(3) Arb Intl 437, 451 (hereinafter the ‘2007 Report’). The Report, intended to commemorate the ten years from the Act’s entry into force, also commented that: ‘The conclusions reached in this Report are an enormous tribute to the Act and, by extension, to those responsible for its authorship...’: at 437. But see MM Cohen, ‘A Missed Opportunity to Revise the Arbitration Act 1996’ (2007) 23(3) Arb Intl 461, arguing that reforms to the 1996 Act are necessary and that the 2007 Report ‘represents a missed opportunity’ to enact such reforms.

7  In September 1996, the DAC issued its Report on the Arbitration Bill 1996 (hereinafter the ‘DAC Report’). Departmental Advisory Committee on Arbitration Law, ‘Report on Arbitration Bill 1996’, 28 September 1996, available at <http://arbitration.practicallaw.com/5-205-4994#sect1pos2res1>. The DAC Report provides useful guidance on the procedural and policy considerations underlying the Act’s provisions.

8  Arbitration Act 1996, s 2(1), providing that: ‘The provisions of [Part I of the Act, which are mandatory] apply where the seat of arbitration is in England and Wales or Northern Ireland.’ Sections 85–87, which modify Part I in the case of a ‘domestic arbitration agreement’, have never been brought into force. As a result, English law operates a unified regime for both domestic and international arbitration.

9  Arbitration Act 1996, s 81(1) preserves any common law rule consistent with the Act’s provisions, including on matters that are not capable of settlement by arbitration and the refusal of recognition of an arbitral award on grounds of public policy. The confidentiality of the arbitral process under English law likewise remains governed by the common law; see also DAC Report (n 7) ch 2, paras 9–17.

10  For an overview of the historical background to the 1996 Act, see R Merkin and L Flannery, Arbitration Act 1996 (4th edn, Informa, 2008) 2–3; Lord Saville, ‘The Origin of the New English Arbitration Act 1996: Reconciling Speed With Justice in the Decision-Making Process’ (1997) 13(3) Arb Intl 237.

11  See Arbitration Act 1996, ss 34, 37, 38.

12  1996 Act, s 5. The requirement under the Act that the arbitration agreement be ‘in writing’ is construed broadly under the Act to encompass recording by any means. The manner of recording may be similarly broad, eg via a unilateral recording by one of the parties or by a third party with the permission of the parties; by exchange of communications between the parties; or by some medium other than writing that refers to an agreement that is in writing. In any event, the agreement need not be signed by the parties. The same standards apply to other agreements under the Act, including those carving out non-mandatory provisions. See generally Arbitration Act 1996, s 5; St John Sutton, Gill, and Gearing (n 4) s 2-039.

13  Arbitration Act 1996, ss 89–91, 94–98, and 93 respectively.

14  1996 Act, ss 99–104.

15  1996 Act, ss 105–110.

16  See 1996 Act, s 4(1) and Sch 1; see also s 4(2).

17  Importantly, the law of the seat does not apply automatically to this question. Pursuant to the House of Lords ruling in Fiona Trust v Privalov, the law of the arbitration clause is legally distinct from the contract of which it forms a part: Fiona Trust and Holding Corp v Privalov [2007] UKHL 40 (Comm). English jurisprudence has been somewhat unsettled on the question of whether English law governs the arbitration agreement, in the absence of a clear choice of law, when the seat is England and Wales. In a decision rendered on 16 May 2012, the Court of Appeal adopted a two-pronged approach to determine which law should apply to the arbitration agreement under such circumstances: first, one cannot assume that the proper law of the arbitration agreement will follow the law of the contract; second, there should be a ‘three-stage enquiry’ into (a) express choice of law; (b) implied choice of law; and (c) to which law the arbitration agreement has the ‘closest and most real connection’. Sulamerica CIA Nacional De Seguros SA and ors v Enesa Engenharia SA and ors [2012] EWCA Civ 638.

18  See eg Arbitration Act 1996, s 30, providing that, unless otherwise agreed by the parties, and subject to challenge by any available arbitral process of appeal or review or in accordance with the provisions of Part I of the 1996 Act, an arbitral tribunal may rule on its own substantive jurisdiction; s 32, providing for limited circumstances under which a party can challenge in court the tribunal’s substantive jurisdiction, and discussed at paras 10.19–10.22; cf UNCITRAL Model Law on International Commercial Arbitration (1985), Art 16(1): ‘The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement.’ Nonetheless, consistently with the Act’s oft-repeated aim of protecting the interests of parties that dispute their participation in the arbitration agreement itself, the English courts will examine de novo the arbitral tribunal’s jurisdiction if a party, for example, resists enforcement under the 1996 Act or the New York Convention as a non-party to the arbitration agreement. See Dallah Real Estate and Tourism Holding Co v The Ministry of Religious Affairs, Government of Pakistan [2010] UKSC 46.

19  The DAC Report states the policy rationale for this provision in the following terms:

A person who dispute [sic] that an arbitral tribunal has jurisdiction cannot be required to take part in the arbitration proceedings or to take positive steps to defend his position, for any such requirement would beg the question whether or not his objection has any substance and thus be likely to lead to gross injustice.

DAC Report (n 7) para 275.

20  See Fiona Trust (n 17).

21  Law Debenture Trust Corp plc v Elektrim [2005] 2 Lloyd’s Rep 755, para 18. The courts have also noted that an application under s 72(1) should be decided only after a motion under s 9 of the Act, which allows a party to an arbitration agreement to apply for a stay of court proceedings brought against it on a matter covered by the arbitration agreement.

22  A third possibility is for a party to refuse to participate in the arbitration and challenge the resulting award under the 1996 Act, s 67, which is discussed at para 10.99.

23  Arbitration Act 1996, s 32(1). According to s 30(1)(a)–(c), ‘substantive jurisdiction’ is defined in terms of ‘whether there is a valid arbitration agreement, whether the tribunal is properly constituted, and what matters have been submitted to arbitration in accordance with the arbitration agreement’; see also s 82(1).

24  Arbitration Act 1996, s 32(2)(a)–(b).

25  1996 Act, s 32(4).

26  1996 Act, s 32(5).

27  1996 Act, s 32(6). Parties should note that provisions in the Act that vest the first instance court with discretion as to whether to grant an appeal may not hold if the Court of Appeal finds that the first instance court did not have jurisdiction to make its determination in the first place; or that determination was arbitrary or unfair. In such rare instances, the Court of Appeal will exercise its jurisdiction sua sponte. See St John Sutton, Gill, and Gearing (n 4) s 7-201.

28  New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958, Art II(3): ‘The court of a Contracting State, when seized of an action, in a matter in respect of which the parties have made an agreement within the meaning of this article shall, at the request of one of the parties refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.’

29  St John Sutton, Gill, and Gearing (n 4) s 7-058; accord T Raphael, The Anti-Suit Injunction (OUP, 2008) 255. An additional wrinkle is whether the injunction sought is interim or permanent. The former may be comparatively more difficult to obtain, as ‘it will interfere with the arbitration without finally determining the question of jurisdiction’ Raphael, at 257.

30  See Raphael (n 29); see also n 21.

31  DAC Report (n 7) para 76.

32  Merkin and Flannery (n 10) 51–2.

33  Merkin and Flannery (n 10) 46, citing Marc Rich Agriculture Trading SA v Agrimex Ltd [2000] 1 All ER (Comm) 951.

34  See para 10.66.

35  In the rare instance where the parties have contracted out of this provision, and are unable to comply with the process service requirements of the 1996 Act, s 76 (which provides for the ways service may be effected), the arbitration ‘may be halted in its tracks’ with the Act providing no further guidance. Merkin and Flannery (n 10) 181.

36  Arbitration Act 1996, s 15(1): ‘The parties are free to agree on the number of arbitrators to form the tribunal and whether there is to be a chairman or umpire.’ The Act, however, creates the presumption that where an arbitration agreement provides for an even number of arbitrators, it ‘shall be understood as requiring the appointment of an additional arbitrator as chairman of the tribunal’: 1996 Act, s 15(2).

37  1996 Act, s 16(1): ‘The parties are free to agree on the procedure for appointing the arbitrator or arbitrators, including the procedure for appointing any chairman or umpire.’

38  1996 Act, s 18(1): ‘The parties are free to agree what is to happen in the event of a failure of the procedure for the appointment of the arbitral tribunal.’

39  1996 Act, s 16(2)–(7). The Act provides for the appointment of arbitrators in common configurations, such as a sole arbitrator or a three-member panel, but also in rarer combinations such as two-arbitrator panels, or panels consisting of two arbitrators and one umpire.

40  1996 Act, s 17(1)–(2).

41  1996 Act, s 17(3)–(4). Note the common law exceptions to this type of provision discussed in n 27.

42  The 1996 Act, s 18 does not mention a time limit, but seven days is adopted as a reasonable such limit in s 17(2). St John Sutton, Gill, and Gearing (n 4) s 7–102.

43  1996 Act, s 18(2).

44  Note the common law exceptions to this type of provision discussed in n 27.

45  G Born, International Commercial Arbitration (Wolters Kluwer, 2009) 1931, ‘there are circumstances where court-ordered discovery can be considered a form of provisional relief, necessary in order to prevent imminent, irreparable harm, because the tribunal has not yet been constituted’.

46  Merkin and Flannery (n 10) 108.

47  Merkin and Flannery (n 10) 108.

48  Arbitration Act 1996, s 44 also may apply when the seat of the arbitration is outside England and Wales. See CPR 62.5(1)(b): ‘The court may give permission to serve an arbitration claim form out of the jurisdiction if...the claim is for an order under section 44 of the 1996 Act.’ Courts, however, will typically offer assistance in terms that are consistent with or similar to the practice in England. For example, s 44 was deemed inapplicable in a case where it was invoked in support of a US arbitration, and specifically of US-style depositions, which are viewed as ‘fishing expeditions’ in the English system. Commerce and Industry Insurance Co of Canada v Lloyd’s Underwriters [2002] 1 Lloyd’s Rep 219. Similarly, and just as importantly, English courts would be reluctant to enjoin arbitration proceedings in foreign-seated arbitrations because doing so would contravene both the New York Convention, which is enshrined in the Act, as well as the policies underlying the latter. See Weissfisch v Julius and ors [2006] EWCA 218, para 33; see also St John Sutton, Gill, and Gearing (n 4) s 7-062.

49  The power to grant freezing injunctions may lie outside the powers of the arbitral tribunal even if the parties have agreed otherwise. Merkin and Flannery (n 10) 109, citing Kastner v Jason [2005] 1 Lloyd’s Rep 397.

50  Generally, English law does not allow a party to be bound by an arbitration agreement without its consent; in other legal systems, however, the courts are more amenable to binding non-parties if, for example, they belong to the same ‘group of companies’ as a party to the arbitration agreement. See generally B Hanotiau, Complex Arbitrations: Multiparty, Multicontract, Multi-issue and Class Actions (Kluwer Law International, 2005).

51  Arbitration Act 1996, s 43(1).

52  1996 Act, s 43(2).

53  A notable exception to this observation is the World Bank’s International Centre for Settlement of Investment Disputes (ICSID), where the ICSID Convention effectively ‘insulates ICSID proceedings from the application of national procedural law’. L Reed, J Paulsson and N Blackaby, Guide to ICSID Arbitration (2nd edn, Kluwer Law International, 2010) 49; see Convention for the Settlement of Investment Disputes between States and Nationals of Other States (1963), art 26, at <https://icsid.worldbank.org> providing that: ‘Consent of the parties to arbitration under this Convention shall, unless otherwise stated, be deemed consent to such arbitration to the exclusion of any other remedy.’

54  ICC Rules, art 29.1–29.2 (in force as of 1 January 2012) <http://www.iccwbo.org/court/arbitration/id4199/index.html> ‘A party that needs urgent interim or conservatory measures that cannot await the constitution of an arbitral tribunal (“Emergency Measures”) may make an application for such measures pursuant to the Emergency Arbitrator Rules in Appendix V...The parties undertake to comply with any order made by the emergency arbitrator.’ This provision applies if the parties’ arbitration agreement was concluded before the date on which the Rules came into force, ie 1 January 2012: ICC Rules, art 29.6(a); see also Netherlands Arbitration Institute Rules, art 42, providing for the NAI’s appointment of an arbitrator to resolve interim measure issues prior to the arbitral tribunal’s constitution.

55  ICC Rules, art 29.7: ‘The Emergency Arbitrator Provisions are not intended to prevent any party from seeking urgent interim or conservatory measures from a competent judicial authority at any time prior to making an application for such measures, and in appropriate circumstances even thereafter, pursuant to the Rules.’

56  ICDR Rules, art 37 (as amended 1 June 2009) <http://www.adr.org/sp.asp?id=33994>. The arbitration rules of the Stockholm Chamber of Commerce adopted in 2010 also provide for interim relief by an emergency arbitrator. SCC Rules (2010) Appendix 2. The LCIA Rules provide for the ‘expedited formation’ of the arbitral tribunal. LCIA Rules, art 9(1), providing that: ‘In exceptional urgency, on or after the commencement of the arbitration, any party may apply to the LCIA Court for the expedited formation of the Arbitral Tribunal, including the appointment of any replacement arbitrator under Articles 10 and 11 of these Rules.’

57  Arbitration Act 1996, s 9(2).

58  1996 Act, s 9(3); cf s 73.

59  Midgulf International Ltd v Groupe Chimique Tunisien [2009] EWHC 963, ultimately denying an interim anti-suit injunction after a brief hearing on evidence showing the validity of an arbitration agreement.

60  The Supreme Court Act 1981, s 37 provides:

  1. (1)  The High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears to the court to be just and convenient to do so.

  2. (2)  Any such order may be made either unconditionally or on such terms and conditions as the court thinks just.

  3. (3)  The power of the High Court under subsection (1) to grant an interlocutory injunction restraining a party to any proceedings from removing from the jurisdiction of the High Court, or otherwise dealing with, assets located within that jurisdiction shall be exercisable in cases where that party is, as well as in cases where he is not, domiciled, resident or present within that jurisdiction.

  4. (4)  The power of the High Court to appoint a receiver by way of equitable execution shall operate in relation to all legal estates and interests in land; and that power—

    1. (a)  may be exercised in relation to an estate or interest in land whether or not a charge has been imposed on that land under section 1 of the Charging Orders Act 1979 for the purpose of enforcing the judgment, order or award in question; and

    2. (b)  shall be in addition to, and not in derogation of, any power of any court to appoint a receiver in proceedings for enforcing such a charge.

  5. (5)  Where an order under the said section 1 imposing a charge for the purpose of enforcing a judgment, order or award has been, or has effect as if, registered under section 6 of the Land Charges Act 1972, subsection (4) of the said section 6 (effect of non-registration of writs and orders registrable under that section) shall not apply to an order appointing a receiver made either—

    1. (a)  in proceedings for enforcing the charge; or

    2. (b)  by way of equitable execution of the judgment, order or award or, as the case may be, of so much of it as requires payment of moneys secured by the charge.

61  St John Sutton, Gill, and Gearing (n 4) s 7-011.

62  AES-UST Kamenogorsk Hydropower Plant LLP v UST Kamonogorsk Hydropower Plant JSC [2010] EWHC 772 (Comm).

63  See eg OT Africa Line Ltd v Magic Sportswear Corp [2005] EWCA Civ 710.

64  Case C-185/07 Allianz SpA v West Tankers Inc [2009] ECR I-663. The House of Lords’ decision to refer the case is reported at [2007] UKHL 4. The House of Lords made clear when referring the case that it would have reached a different decision to that later taken by the ECJ.

65  Council of the European Union, Council Regulation (EC) 44/2001 of 22 December 2000, available at <http://curia.europa.eu/common/recdoc/convention/en/c-textes/2001R0044-idx.htm>; see also Allianz SpA v West Tankers (n 64). The arbitration agreement in West Tankers specified London as the seat of arbitration and the contract provided for the application of English law.

66  Allianz SpA v West Tankers (n 64).

67  See eg Shashoua and ors v Sharma [2009] EWHC 957 (Comm), granting an injunction to restrain proceedings commenced in a Delhi court in breach of an arbitration agreement; Shell v Coral Oil [1999] 1 Lloyd’s Rep 72; AES-UST Kamenogorsk Hydropower Plant LLP v UST-Kamonogorsk Hydropower Plant JSC [2010] EWHC 722 (Comm); Midgulf International Ltd v Groupe Chimique Tunisien [2010] EWCA Civ 66; Bankers Trust v Jakarta International [1999] 1 Lloyd’s Rep 910.

68  See eg AR Markus and S Giroud, ‘A Swiss Perspective on West Tankers and Its Aftermath’(2010) 28(2) ASA Bulletin 230, 238: ‘As a decision exclusively related to arbitration, the English anti-suit injunction is undoubtedly excluded from the scope of the Brussels I Regulation and so is the examination of the jurisdiction issue in the Italian proceedings. In this respect, the ECJ’s opinion according to which the validity of the arbitration agreement should be verified as an incidental question pursuant to the Brussels I Regulation appears problematic’; accord A Bělohlávek, ‘West Tankers as a Trojan Horse with Respect to the Autonomy of Arbitration Proceedings and the New York Convention 1958’ (2009) 27(4) ASA Bulletin 646; M Schöll, ‘Brussels I/Lugano and Arbitration: Problems and Perspectives’ in C Müller and A Rigozzi (eds), New Developments in International Commercial Arbitration 2009 (Schulthess Editions Romandes, 2009) 43. The ensuing controversy raised concerns about the desirability of the law of EU Member States as the law of the seat. See D Rainer, ‘The Impact of West Tankers on Parties’ Choice of A Seat of Arbitration’ (2010) 95 Cornell L Rev 431, 435–6: ‘The availability of antisuit injunctions to enforce arbitration agreements is one factor that may influence parties choosing a seat and the law that shall govern their arbitration...the European Union could lose some of its traditional appeal as a forum for international commercial arbitration.’

69  West Tankers Inc v Allianz SpA v Generali Assicurazioni Generali SpA [4 April 2012] EWHC 854. This is consistent with previous English jurisprudence, see St John Sutton, Gill, and Gearing (n 4) s 7-021.

70  West Tankers, Inc v Allianz SpA v Generali Assicurazione Generali SpA [24 January 2012] EWCAS Civ 27; see also African Fertilizers and Chemical Nig v BD Shipsnavo GmbH and Co Reederei Kg [2011] EWHC 2452 (Comm), enforcing under the 1996 Act, s 66 the arbitral tribunal’s declaration on its jurisdiction while a collateral challenge to tribunal’s jurisdiction was pending before the Romanian courts.

71  European Commission, Memorandum: European Parliament backs rules to do away with 27 national rules for recognising judgments in cross-border court cases (20 November 2012) available at <http://europa.eu/rapid/press-release_MEMO-12-875_en.htm>.

72  The DAC Report indicates that the drafters of the Act intended s 45 to apply to a broad array of disputes, mentioning ‘the closure of the Suez Canal or the United States embargo on the export of soya beans’ as illustrative examples: DAC Report (n 7) para 218. Moreover, the DAC rejected a proposal to restrict the applicability of s 45 only to domestic arbitrations: DAC Report, para 221.

73  See Arbitration Act 1996 Act, s 34(2)(f).

74  1996 Act, s 45(2)(a)–(b). Section 45(3)–(5) ensures further that applications under this section will not disrupt arbitral proceedings by allowing such proceedings to continue while the application is pending; and disallowing any appeal based on the court’s finding that the requirements under s 45(2) have been met.

75  St John Sutton, Gill, and Gearing (n 4) s 7-173.

76  Arbitration Act 1996 Act, s 45(6).

77  St John Sutton, Gill, and Gearing (n 4) s 7-166.

78  See LCIA Rules, art 26.9; ICC Rules (2010) art 34(6); ICC Rules (1998), art 34(6).

79  See Arbitration Act 1996, s 42(3): ‘The court shall not act [to enforce a tribunal peremptory order] unless it is satisfied that the applicant has exhausted any available arbitral process in respect of failure to comply with the tribunal’s order’; see also DAC Report (n 7) para 189: ‘Wherever a power could properly be exercised by a tribunal rather than the Court, provision has been made for this, thereby reducing the need to incur the expense and inconvenience of making applications to Court during arbitral proceedings.’

80  St John Sutton, Gill, and Gearing (n 4) s 5-078.

81  See Star Reefers Pool Inc v JFC Group Co Ltd [2012] EWCA Civ 14, holding that the court has jurisdiction to grant an anti-suit injunction against a non-party to an arbitration for using court proceedings to undermine an arbitration agreement; similarly, BNP Paribas SA v OJSC Russian Machines [2011] EWHC 308 (Comm).

82  West Tankers Inc v Allianz SpA [2012] EWCA Civ 27.

83  Note, however, that security for costs can be granted only by the arbitral tribunal: Arbitration Act 1996, s 38(3). It is also important to ensure that certain kinds of remedy are not precluded by specific provisions within the Act. In admiralty proceedings, for example, the protection of property in dispute may be ordered under the 1996 Act, s 11.

84  This is the reference to an 1856 case before the English courts, where Lord Campbell departed from the then customary practice of continuing arbitration proceedings despite the existence of a valid arbitration clause. Nowadays the term is employed to describe an obligation to arbitrate that sets the conclusion of the arbitration as a precondition to access to the courts.

85  See B v S [2011] EWHC 691 (Comm), holding that contractual language precluding legal proceedings prior to arbitration encompassed ancillary proceedings to grant a freezing injunction under the 1996 Act, s 44(2)(e). The relevant contractual language in B v S read as follows: ‘Neither party hereto, nor any persons claiming under either of them, shall bring any action or other legal proceedings against the other of them in respect of any such dispute until such dispute shall first have been heard and determined by the arbitrators...’. But see Alfred C Toepfer International GmbH v Société Cargill France [1997] APP LR, 25 November, 33: ‘Our finding in relation to the Scott v. Avery clause rejects the argument that the English Court is precluded, by the terms of the contracts, from entertaining the present proceedings.’

86  Limitations Act 1980, s 5.

87  Argomet Motoimport Ltd v Maulden Engineering Co (Beds) Ltd [1985] All ER 436. Moreover, in National Ability SA v Tinna Oils & Chemicals Ltd [2009] EWCA Civ 330, the Court of Appeal held that whether a party seeks to enforce an award as a debt or under the procedure outlined in the 1996 Act, s 66, the applicable time limit would be the same.

88  Kenya Railways v Antares Pte Ltd [1987] 1 Lloyd’s Rep 424.

89  Arbitration Act 1996, s 79(1).

90  1996 Act, s 79(1) explicitly notes that it ‘does not apply to a time limit to which section 12 applies (power of court to extend time for beginning arbitral proceedings, &c.)’.

91  DAC Report (n 7) para 309: ‘As we have said in other contexts, it would be a rare case indeed where we would expect the Court to grant an extension where such has not been obtained through that process.’

92  A plea of ‘substantial injustice’ requires the court to take into account ‘relative fault, the sum at stake and the consequences of the failure to act’: Merkin and Flannery (n 10) 183 (citations omitted).

93  Arbitration Act 1996, s 50(3).

94  1996 Act, s 50(4)–(5).

95  See eg UNCITRAL Model Law on International Commercial Arbitration 1985, Art 12; see also International Bar Association, Guidelines on Conflicts of Interest in International Arbitration (2004) at <http://www.ibanet.org>; American Bar Association, The Code of Ethics for Arbitrators in Commercial Disputes (2004) at <http://www.americanbar.org>.

96  See DAC Report (n 7) para 101: ‘It seems to us that lack of independence, unless it gives rise to justifiable doubts about the impartiality of the arbitrator, is of no significance.’

97  See Merkin and Flannery (n 10) 66; Norbrook Laboratories v Tank [2006] EWHC 1055, removing an arbitrator who had disregarded a party’s timely request to terminate the short form procedure and had also contacted witnesses unilaterally.

98  See DAC Report (n 7) para 106.

99  See St John Sutton, Gill, and Gearing (n 4) ss 7-117–7-122.

100  See n 92.

101  Arbitration Act 1996, s 24(2).

102  1996 Act, s 24(3).

103  1996 Act, s 24(4); cf s 28(3), providing that the court may require arbitrators to repay fees they have received that are subsequently adjudged as excessive by the court.

104  1996 Act, s 24(5).

105  1996 Act, s 24(6). Note the common law exceptions to this type of provision discussed in n 27.

106  1996 Act, s 25(3).

107  1996 Act, s 25(4).

108  1996 Act, s 61(1): ‘The tribunal may make an award allocating the costs of the arbitration as between the parties, subject to any agreement of the parties.’ The tribunal’s cost allocation may be challenged in court as a ‘serious irregularity’ under s 68 (discussed at paras 10.103–10.104), but the high evidentiary burden set by that section renders such challenges—let alone sustained applications—quite rare.

109  1996 Act, s 64(2)(a)–(b).

110  1996 Act, s 34(1).

111  1996 Act, s 34(2)(f).

112  1996 Act, s 34(2)(d).

113  1996 Act, s 33.

114  1996 Act, s 41(7).

115  1996 Act, s 13(1).

116  1996 Act, s 81(1)(a).

117  1996 Act, s 25(2).

118  1996 Act, s 25(1).

119  1996 Act, s 7.

120  Fiona Trust Corp and ors v Privalov and ors [2007] All ER (D) 233.

121  Arbitration Act 1996, s 30.

122  1996 Act, s 30(1).

123  1996 Act, s 31(1).

124  1996 Act, s 14(2)–(5).

125  1996 Act, ss 15 and 16.

126  1996 Act, s 15(3).

127  1996 Act, s 16(3).

128  1996 Act, s 16(4).

129  1996 Act, s 16(5).

130  1996 Act, s 16(6).

131  1996 Act, s 17.

132  1996 Act, s 23.

133  1996 Act, s 41(4).

134  1996 Act, s 38.

135  1996 Act, s 38(3).

136  1996 Act, s 38(4).

137  1996 Act, s 39.

138  1996 Act, s 38(5).

139  1996 Act, s 41(6).

140  1996 Act, s 56(1).

141  1996 Act, s 41(5).

142  1996 Act, s 20(3).

143  1996 Act, s 20(4).

144  1996 Act, s 48(1).

145  1996 Act, s 48(2)–(5).

146  1996 Act, s 52(1).

147  1996 Act, s 52(3)–(5).

148  1996 Act, s 57(3)–(4).

149  1996 Act, s 57(5).

150  1996 Act, s 79.

151  1996 Act, s 61(1)–(2).

152  1996 Act, s 63.

153  1996 Act, s 49.

154  1996 Act, s 49(3).

155  1996 Act, s 58(1).

156  1996 Act, s 58(2).

157  The term ‘substantive jurisdiction’ is defined in s 30(1)(a)–(c) of the Act. See n 23.

158  In fact, the rights of a non-participating person are explicitly reserved under the 1996 Act, s 72 which provides as follows:

  1. (1)  A person alleged to be a party to arbitral proceedings but who takes no part in the proceedings may question—

    1. (a)  whether there is a valid arbitration agreement,

    2. (b)  whether the tribunal is properly constituted, or

    3. (c)  what matters have been submitted to arbitration in accordance with the arbitration agreement,

      by proceedings in the court for a declaration or injunction or other appropriate relief.

  2. (2)  He also has the same right as a party to the arbitral proceedings to challenge an award—

    1. (a)  by an application under section 67 on the ground of lack of substantive jurisdiction in relation to him, or

    2. (b)  by an application under section 68 on the ground of serious irregularity (within the meaning of that section) affecting him;

      and section 70(2) (duty to exhaust arbitral procedures) does not apply in his case.

159  For an overview of the practical steps necessary to lodge a s 67 application, see CPR pt 62.

160  Primetrade AG v Ythan Ltd [2006] 1 Lloyd’s Rep 457.

161  DAC Report (n 7) para 280.

162  Lesotho Highlands Development Authority v Impregilo SpA [2005] 2 Lloyd’s Rep 310, finding that the threshold established by s 68 is very high and will admit only the most extreme cases; see also CNH Global NV v PGN Logistics Ltd [2009] EWHC 277 (Comm), finding, in a case the Court described as a ‘howler’, that the arbitral tribunal’s failure to award interest as part of its overall disposition of the case, and its improper subsequent issuance of an addendum concerning the interest due was a serious irregularity which, however, did not constitute grounds for a s 68 petition because it did not result in substantial injustice to the party ordered to pay the interest.

163  See 1996 Act, s 68(2)(b).

164  Merkin and Flannery (n 10) 158, citing Petroships Pte Ltd v Peter Trading and Investment Corp, the Petro Ranger [2001] 2 Lloyd’s Rep 348; for a very thorough overview of the various contours of s 68, see Merkin and Flannery at 156–63.

165  Repeatedly articulated concerns about the potential for abuse of this s 69 are not necessarily borne out in case statistics. In a 2009 study conducted by the London Maritime Arbitrators Association, it was found that of 151 s 69 applications to appeal were made between 2006 and 2008, 36 obtained leave to appeal, and only 14 resulted in the setting aside, variation, or remittal of an award. See Lord Mance’s Advisory Committee on Section 69 of the Arbitration Act 1996, ‘First Interim Report on the Workings of Section 69 of the 1996 Act in Regard to Maritime Arbitrations in London Before the Commercial and Admiralty Court’ (2009) available at <http://www.lmaa.org.uk>.

166  Merkin and Flannery (n 10) 167, citing Omnibridge Consulting Ltd v Clearsprings (Management) Ltd (unreported).

167  Trustees of Edmond Stern Settlement v Levy [2007] EWHC 1187 (TCC).

168  Mary Harvey v Motor Insurer’s Bureau QBD (Merc) (Manchester).

169  Arbitration Act 1996, s 2(2)(b).

170  The public policy exception to enforcement is not explicitly mentioned in s 66, but the DAC Report considered it as being implicit in the courts’ exercise of discretion: DAC Report (n 7) para 273. In addition, the DAC Report appears to recommend the less stringent application of the public policy exception where the governing law is not English law: ‘it must always be borne in mind that the parties’ rights and obligations may well be governed by a law other than our own, under which, for example, matters are arbitrable which would not be the case under our own law. In such cases it would not automatically follow that the Court would refuse to enforce the award, unless of course public policy dictated that course’: DAC Report, para 376.

171  See St John Sutton, Gill, and Gearing (n 4) s 8-003.

172  See Merkin and Flannery (n 10) 149.

173  Convention on the Execution of Foreign Arbitral Awards (26 September 1927) <http://interarb.com/vl/g_co1927> (‘Geneva Convention’). The Geneva Convention provides for the enforcement of arbitral awards done pursuant to the Protocol on Arbitration Clauses presented at a League of Nations Conference in 1923. That Protocol is appended as Sch I to the Arbitration Act 1950, s 35 of which provides, among others, for the enforcement of ‘any award made after the twenty-eighth day of July, nineteen hundred and twenty-four—(a) in pursuance of an agreement for arbitration to which the protocol set out in the First Schedule to this Act applies...’

174  The formalities under the New York Convention concerning the arbitration agreement, including the requirement that it be in writing, are not the same as under the 1996 Act.

175  Arbitration Act 1996, s 103 provides in the relevant part:

  1. (2)  Recognition or enforcement of the award may be refused if the person against whom it is invoked proves—

    1. (a)  that a party to the arbitration agreement was (under the law applicable to him) under some incapacity;

    2. (b)  that the arbitration agreement was not valid under the law to which the parties subjected it or, failing any indication thereon, under the law of the country where the award was made;

    3. (c)  that he was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case;

    4. (d)  that the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration or contains decisions on matters beyond the scope of the submission to arbitration (but see subsection (4));

    5. (e)  that the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement with the law of the country in which the arbitration took place;

    6. (f)  that the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, it was made.

  2. (3)  Recognition or enforcement of the award may also be refused if the award is in respect of a matter which is not capable of settlement by arbitration, or if it would be contrary to public policy to recognise or enforce the award.

  3. (4)  An award which contains decisions on matters not submitted to arbitration may be recognised or enforced to the extent that it contains decisions on matters submitted to arbitration which can be separated from those on matters not so submitted.

  4. (5)  Where an application for the setting aside or suspension of the award has been made to such a competent authority as is mentioned in subsection (2)(f), the court before which the award is sought to be relied upon may, if it considers it proper, adjourn the decision on the recognition or enforcement of the award.

176  See eg R v V [2008] EWHC 1531, rejecting the claimant’s argument that the court was obliged to scrutinize the arbitral tribunal’s findings more stringently because it was exercising ‘supervisory jurisdiction’ under s 68 of the Act, and not under the New York Convention.