The UK Law Commission has announced that it will be reviewing the Arbitration Act 1996, the main law governing arbitrations in England, Wales and Northern Ireland. The Law Commission has said its aim is to ensure that arbitration law remains clear, modern and effective in order to maintain the attractiveness of the UK as a destination for dispute resolution.
In the 25 years since the adoption of the Arbitration Act 1996 (the Act), it has helped make the UK a leading destination for commercial arbitrations and has strengthened the rule of law English as a choice of law for commercial parties. As a result, there are very few practitioners who would ask for a fundamental change in the law. Nonetheless, it is generally accepted that certain provisions of the Law may be updated and clarified, particularly in light of recent updates to the legislation governing arbitrations in other jurisdictions. As a result, on November 30, 2021, the Law Commission announced that it launch a review of the Act in order to ensure that it is “as clear, modern and efficient as possible”.
The specific issues that will be addressed as part of the review have not yet been determined, and the Law Commission will do so as part of its initial consultations with stakeholders. However, in view of the responses he received regarding the Act as part of his 14th Law Reform Program, the Law Commission has indicated that it is likely to examine:
- The powers of the courts which may be exercised in support of an arbitration proceeding.
- The procedure for contesting an award of jurisdiction.
- The possibility of appeal in cassation.
- The law regarding confidentiality and privacy in arbitration proceedings.
- Electronic service of documents, electronic arbitration awards and virtual hearings.
In addition, one of the most interesting issues that the Law Commission has indicated it could consider is the power to summarily dismiss unfounded claims or defenses in arbitration proceedings. Any consideration by the Law Commission of this matter should take into account what appears to be a growing acceptance of the benefits of arbitral tribunals possessing this power. Indeed, in recent years, a number of arbitration bodies, including the International Center for Settlement of Investment Disputes (ICSID) and the Arbitration Institute of the Stockholm Chamber of Commerce, have introduces into their rules provisions allowing for the dismissal without notice of unjustified claims, rules from other institutions – such as the 2016 Singapore International Arbitration Center (SIAC) rules and the 2020 Court of Arbitration rules London International (LCIA) – going further and also allowing the dismissal without notice of cases which clearly fall outside the jurisdiction of the arbitral tribunal.
If it were to consider this matter, the Law Commission would have to consider how the introduction of this power could be balanced with the desire to ensure due process and respect for a party’s right to be heard. Failing to strike the right balance, the defeated parties could initiate legal action to set aside and / or resist the execution of the sentences, compromising the time and money-saving advantages of a summary dismissal procedure. is supposed to introduce.
Elsewhere, the Law Commission’s indication that it may also consider electronic service of documents, electronic arbitration awards and virtual hearings may reflect its recognition that the parties and the courts (as well as the English courts) have come together. accustomed over the past 18 months to using technological solutions. to overcome the difficulties caused by the COVID-19 pandemic.
It may turn out that not all of the issues identified are ultimately considered by the Law Commission, or that the Law Commission determines that no changes to existing provisions of the Act are required with respect to some of these issues. . However, the Law Commission’s decision to review the law confirms the UK’s desire to remain a pro-arbitration jurisdiction at the forefront of international dispute resolution for the foreseeable future. As Lord David Wolfson of Tredegar QC, a minister in the UK Justice Department, said when announcing the review on Twitter, it is hoped that the review “will ensure the [Act] stays up to date so that we continue to attract commercial litigation from across the globe to London arbitration. “
The review is in its pre-consultation phase and the Law Commission plans to launch the project in the first quarter of 2022. A consultation document is expected to be published in late 2022.