Law commission

Law Commission of England and Wales publishes consultation paper on Arbitration Act 1996 | Faegre Drinker Biddle & Reath LLP

The Arbitration Act 1996 entered into force on January 31, 1997. Twenty-five years later, it is still the reference legal framework for arbitration.

On September 22, 2022, the Law Commission of England and Wales published its long-awaited “Review of the Arbitration Act 1996: A consultation paper”. The review aims to ensure that the Act remains “state of the art» for national and international arbitration. It is thoughtful and extensive – from consideration of major reforms to the underlying principles of the law, to minor modifications that reflect the way modern arbitration is conducted today (often at a distance, and increasingly with the desire to reduce the carbon footprint of international arbitrations).

In particular, four proposals seem interesting to us:

  • First, in aworld class initiative…send[ing] an important signal on diversity and equality– a bid to tackle discrimination in referee appointments by adopting the language of the English Equality Act 2010 so that referee appointments cannot be challenged on discriminatory grounds.
  • Second, the search for efficiency: the Commission tentatively recommends a non-mandatory provision giving arbitrators the power to adopt a summary procedure to decide issues that have no real prospect of success and no other compelling reason to pursue until a full hearing (borrowing its thresholds from the English Rules of Civil Procedure).
  • Third: the Law Commission’s suggestion to codify that arbitrators have a continuing duty to disclose any circumstance which might reasonably give rise to justifiable doubts as to their impartiality (following the UK Supreme Court’s decision in the case Halliburton Co v Chubb Bermuda Insurance Ltd [2020] UKSC 48).
  • Finally, on the thorny subject of jurisdictional challenges: a proposal that any challenge under section 67 of the Act should be by appeal (where the court reviews the court’s decision) and not by a new total hearing.

If any of these proposals are adopted, they will help cement the UK’s position as a global hub for international arbitration for another twenty-five years.

The consultation ends on December 15, 2022.