The Arbitration Act 1996 (the 1996 Act) will apply if the arbitration is seated in England and Wales or Northern Ireland.  The Arbitration (Scotland) Act 2010 (the 2010 Act) will apply if the arbitration is seated in Scotland.  The mandatory provisions are set out in Schedule 1 of the 1996 Act and s.8 of the 2010 Act.  Such provisions include those in relation to duties of the arbitral tribunal and parties, and challenges to arbitrators and arbitral awards.  Additionally, the Arbitration (International Investment Disputes) Act 1966 sets out a special regime for ICSID awards.

The responses below focus on the 1996 Act.

The New York Convention entered into force in the United Kingdom on 23 December 1975, with a reciprocity reservation.  The United Kingdom has submitted notifications extending the territorial application of the New York Convention to Gibraltar, Isle of Man, Bermuda, Cayman Islands, Guernsey, Jersey and the BVI.

In addition to the New York Convention, the United Kingdom is also a party to (a) the Geneva Convention on the Execution of Foreign Arbitral Awards of 1927, (b) the Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965 and (c) numerous other Bilateral and Multilateral Investment Treaties.

The UNCITRAL Model Law has not been adopted in England and Wales but it has influenced the 1996 Act.  Some significant differences relate to arbitrability, separability of arbitration clauses, competence of the arbitral tribunal to rule on its own jurisdiction and judicial intervention (including the availability of appeals on a point of law).

Following consultations, the Law Commission of England and Wales issued its Thirteenth Programme of Law Reform in late 2017, in which it noted that it had decided not to pursue reform of the 1996 Act.  However, the Law Commission identified the 1996 Act as an area for potential future change with the view to maintaining London’s status as a leading venue for international arbitration.  These comments by the Law Commission have inspired commentators to suggest potential areas of reform; one popular suggestion has been to reverse the presumption that arbitration is a confidential process.  However, these discussions have not yet given rise to any concrete reform initiatives.

A number of arbitral institutions are based in the United Kingdom, including: London Court of International Arbitration (LCIA); Chartered Institute of Arbitrators (CIArb); London Maritime Arbitrators Association (LMAA); and Reinsurance Arbitration Society (ARIAS (UK)).  In addition, various commodity organisations based in the United Kingdom have published arbitral rules, including the Grain & Feed Trade Association (GAFTA) and the London Metal Exchange (LME).

On 11 August 2020, the LCIA announced updates to its Arbitration Rules (which were last revised in 2014) as well as to its Schedule of Arbitration Costs, which will take effect on 1 October 2020.  The LCIA’s stated aim in updating its Arbitration Rules is to streamline the arbitral process for arbitrators and parties alike. The relevant changes relate to: (i) enhancing the tribunal’s case management powers; (ii) expressly permitting the conduct of virtual procedural conferences and hearings; (iii) making electronic filings and communications the default rule; (iv) the appointment and role of tribunal secretaries; (v) the rules regarding multi-party and multi-contract arbitrations, including expanding the tribunal’s and the LCIA Court’s power to consolidate and concurrently conduct arbitration proceedings; (vi) incorporating provisions on data protection, cybersecurity and compliance issues; and (vii) increasing the maximum hourly rate that can be charged by arbitrators.

As for other institutions, the CIArb Arbitration Rules entered into effect on 1 December 2015, and the new LMAA terms came into effect in May 2017.

There is no specialist arbitration court in England and Wales.  However, the English Commercial Court is highly experienced with and supportive of international arbitration.

To fall within the scope of the 1996 Act, an arbitration agreement must be in writing or be evidenced in writing.  This includes an oral agreement to arbitrate by reference to “terms which are in writing” (s.5(3) of the 1996 Act).

Unless otherwise agreed by the parties, an arbitration agreement is separable from the main contract (s.7 of the 1996 Act and Fiona Trust & Holding Corporation v. Privalov [2007] UKHL 40).

The English courts do not apply a validation principle.  In order to consider the validity and enforceability of an arbitration agreement, the English courts will first determine the law applicable to it, following a three-stage approach:  they will first consider whether the parties in dispute have (i) expressly or (ii) impliedly chosen the law applicable to the arbitration agreement, (iii) failing which, they will consider the system of law that has the closest and most real connection with the arbitration agreement (Sulamerica CIA Nacional de Seguros SA and others v Enesa Engenharia SA and others [2012] EWCA Civ 638; Arsanovia Ltd, Burley Holdings Ltd, Unitech Ltd v Cruz City 1 Mauritius Holdings [2012] EWHC 3702 [17]).

In cases where the parties are found to have made an implied choice of the law applicable to the arbitration agreement, it will often be the law governing the substantive contract and/or the law of the seat of arbitration, where these have been expressly elected by the parties.  Where a seat has been agreed, the law with the most real connection to the arbitration agreement is likely to be that of the seat (Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenberg AG [1981] 2 Lloyd’s Rep 446; C v D [2007] EWCA Civ 1282; see also Enka Insaat ve Sanayi AS v OOO “Insurance Co Chubb” [2019] EWHC 3568 (Comm)).  In some instances, English courts have been unwilling to find that a general choice of law clause was intended to govern the arbitration agreement in circumstances where the latter would be invalid under that law, opting instead for the law of the seat which would render the arbitration agreement valid and enforceable (Sulamerica CIA Nacional de Seguros SA and others v Enesa Engenharia SA and others [2012] EWCA Civ 638).  Some commentators have characterised this decision as the ‘hidden’ pro-validation approach.

The 1996 Act does not contain provisions for court-ordered consolidation.  However, this matter can be addressed by either (a) the rules of arbitral institutions, which often provide a framework for consolidation or (b) the parties’ agreement (s.35 of the 1996 Act).

The updated LCIA Rules, which take effect on 1 October 2020, allow a party wishing to commence more than one arbitration (whether that is against more than one respondent or under more than one arbitration agreement) to serve a ‘composite request’ in respect of all such arbitrations, after which each arbitration so commenced shall proceed separately, subject to the LCIA Court or the arbitral tribunal determining otherwise. Respondents are similarly allowed to respond in a ‘composite’ manner.  The updated LCIA Rules have also clarified and expanded the tribunal and the LCIA Court’s power to consolidate and concurrently conduct arbitration proceedings.  The tribunal (subject to the LCIA Court’s approval) or, depending on the circumstances, the LCIA Court, has the power to consolidate arbitration proceedings.  The tribunal will also be able to order that two or more arbitrations under the same or compatible arbitration agreement, and between the same parties or arising out of the same or a series of related transaction(s), be conducted concurrently where the same tribunal is constituted in respect of each arbitration.

The possibility of binding third parties to an arbitration agreement is expressly contemplated in s.82(2) of the 1996 Act.  It provides that references in Part I (Arbitration pursuant to an arbitration agreement) to a “party” to an arbitration agreement include “any person claiming under or through a party to the agreement”.  A non-party to a contract may be bound by that contract’s arbitration agreement if: (i) a party assigns or transfers rights or causes of action under the contract to that third party; (ii) the third party is able to enforce the terms of the contract in accordance with the Third Parties (Rights Against Insurers) Act 1930 or the Contracts (Rights of Third Parties) Act 1999; or (iii) the third party replaces one of the original parties by way of novation.  It is also possible for an insurer to be subrogated to contractual rights and thus become bound by the contract’s arbitration agreement.

Three recent court decisions are worth mentioning.  First, in Sea Master Shipping Inc v Arab Bank (Switzerland) Ltd [2018] EWHC 1902 (Comm), the English Courts held that a trade finance bank was bound by the arbitration clause in a bill of lading, as the assignee and lawful holder of the bill under the Carriage of Goods by Sea Act 1992 (COGSA).

Second, in Qingdao Huiquan Shipping Co v Shanghai Dong He Xin Industry Group Co Ltd [2018] EWHC 3009 (Comm), the English courts held that where a non-signatory seeks to enforce rights under a contract containing an arbitration clause, it is subject to that arbitration clause and bound to arbitrate in order to enforce those rights.

Third, in Filatona Trading Ltd and Ors v Navigator Equities Ltd and Ors [2020] EWCA Civ 109, the Court of Appeal considered whether an individual who was not a named party to the agreement in question could bring arbitration proceedings as a disclosed principal. The Court of Appeal upheld the English Commercial Court’s decision that a disclosed and identified principal (even if not a named party in the contract) could rely on the arbitration agreement in the main contract in pursuing a claim under the contract.

The 1996 Act does not identify any matters as non-arbitrable (section 81(1)(a)), and clarifies that both contractual and non-contractual disputes may be submitted to arbitration (s.6(1) of the 1996 Act,; see also Fiona Trust & Holding Corporation v. Privalov [2007) UKHL 40). The English courts approach issues of arbitrability on a case-by-case basis and, in determining whether or not a matter is arbitrable, have considered whether it constitutes a matter of public interest “which cannot be determined  within the limitations of a private contractual process” (Fulham Football Club, [2011] EWCA Civ 855, para. [40]).

Matters that have been deemed non-arbitrable under English law include those related to the registration of (and disputes concerning the grant of) patents and trademarks, some employment and family disputes, insolvency proceedings (which are subject to the statutory regimes set out in the Insolvency Act 1986) as well as criminal matters.  The English Courts have recently held that, “there is a discernible trend towards expanding the range of disputes that are arbitrable” (Sterling v Rand and Rand [2019] EWHC 2560 (Ch), para. [71]).

The arbitral tribunal will decide the dispute either (a) in accordance with the law chosen by the parties as applicable to the substance of the dispute, or (b) if the parties so agree, in accordance with such other considerations as are agreed by them or determined by the tribunal.  A choice of law is understood to refer to the substantive laws of a country and not its conflict of law rules.  In the absence of the parties’ agreement, there is no specific set of choice of law rules that an arbitral tribunal must apply.  Instead, the tribunal shall apply the law determined by the conflict of laws rules which it considers applicable (s.46 of the 1996 Act).

The UNIDROIT Principles and other transnational principles have been considered by English courts when interpreting contractual terms and clauses but have generally not been relied upon by the English courts as the substantive law to decide a dispute before them.

For example, in Rock Advertising Limited v MWB Business Exchange Centres Limited [2018] UKSC 24, the UK Supreme Court decided that the parties to a contract could not effectively modify its contents orally, because such oral modification would constitute an implicit derogation from the “No Oral Modification” principle found, inter alia, in Article 29 of the United Nations Convention on Contracts for the International Sale of Goods (CISG) and Art. 2.1.18 of the UNIDROIT Principles.  Notably, the Supreme Court defined the UNIDROIT Principles and the CISG as “widely used codes”.

However, the English courts have made clear that such transnational principles differ widely in many respects from English commercial law.  For example, in discussing the inadmissibility of pre-contractual negotiations under English law, the House of Lords expressly mentioned that the admissibility of such evidence under the UNIDROIT Principles, the Principles of European Contract law, and the CISG reflect the French philosophy of contractual interpretation which is different from that of English law (Chartbrook Limited v Persimmon Homes Limited, [2009] UKHL 38).

Arbitrators must act fairly and impartially as between the parties (s.33 of the 1996 Act).  The 1996 Act imposes no other conditions pertaining to the qualifications and characteristics of arbitrators.  In particular, it is not necessary for an arbitrator to be a national of, or licensed to practise in, England.

The 1996 Act contains default provisions for the appointment of arbitrators which apply in the absence of agreement between the parties (ss 16—17 of the 1996 Act), including time limits.

The courts can intervene where the parties have not agreed the procedure for the appointment of the arbitral tribunal.  Pursuant to s.18 of the 1996 Act, any party may apply to the court (under Part 62 of the Civil Procedure Rules) to exercise its powers to (a) give directions on the appointment, (b) approve or revoke previous appointments or (c) make the appointment itself.

Pursuant to s.24 of the 1996 Act, any party may apply to the court (under Part 62 of the Civil Procedure Rules) to remove an arbitrator where (a) circumstances exist that give rise to justifiable doubts as to their impartiality, (b) the arbitrator lacks the requisite qualifications or capacity or (c) the arbitrator refuses or fails to properly conduct proceedings or make an award.  Where another entity (whether the tribunal itself or the institution administering the arbitration) is vested with the power to effect such removal, the complaining party is required to first exhaust that avenue before approaching the court (s.24(2) of the 1996 Act).

In one recent case, Halliburton Co v Chubb Bermuda Insurance Ltd [2018] EWCA Civ 817, the English courts grappled with the issue of concurrent arbitrator appointments in multiple cases concerning the same subject matter. The dispute concerned a claim brought by Halliburton against Chubb under an insurance policy governed by New York law, in connection with the Deepwater Horizon incident.  After the tribunal was constituted and without Halliburton’s knowledge, the chairman of the tribunal accepted appointments in two other arbitrations which also arose out of the Deepwater Horizon incident, one of which was a party appointment by Chubb.  Halliburton sought to remove the chairman on the basis that the overlapping proceedings gave rise to justifiable doubts as to the chairman’s impartiality. Upholding the High Court’s decision, the Court of Appeal held that the appointment of an arbitrator in multiple proceedings that concern the same subject matter does not in itself give rise to an appearance of bias, as arbitrators could be trusted to decide a case solely on the evidence or other material adduced in the proceedings in question.  The Court of Appeal also expressly held that, although the 1996 Act does not contain an express duty of disclosure, that duty is implied.  The Halliburton case, which sparked considerable debate in the arbitration community and saw amicus submissions from leading arbitral institutions, is currently before the UK Supreme Court.

More recently, there have been a number of cases discussing the grounds for challenging an arbitrator.  In Rabbi Moshe Avram Dadoun v Yitzchok Biton [2019] EWHC 3441, the High Court considered an application brought under s.68 of the 1996 Act, which concerned whether a unilateral and undisclosed communication between an arbitrator and an individual involved in the case constituted “apparent bias”.  The Court confirmed that such a communication did not amount to “apparent bias”, demonstrating the high threshold that the English courts apply to such challenges.

Similarly, in B & Anor v J & Ors [2020] EWHC 1373 (Ch), the English High Court heard an application under s.24 of the 1996 Act to remove an arbitrator for “apparent bias” on the grounds that the arbitrator was a former employee of one of the parties to the arbitration.  On the facts, the Court found that there was no evidence of “apparent bias” and dismissed the application.

The 1996 Act allows the parties to agree on the procedure to be adopted in instances where there is a truncated tribunal (s.27).  If there is no agreement, the provisions of s.16 (procedure for appointment of arbitrators) and s.18 (failure of appointment procedure) apply in relation to the filling of the vacancy as they do in relation to the original appointment (s.27(3)).

The tribunal has the power to determine whether and, if so, to what extent the previous proceedings should stand (s.27(4)).

Under the 1996 Act, an arbitrator is not liable for any act or omission in the discharge or purported discharge of their functions as arbitrator unless the arbitrator is shown to have acted in bad faith (s.29(1)).  Another exception relates to any liability incurred by the arbitrator by reason of their resignation (s.29(3)).

Yes, the 1996 Act recognises the principle of competence-competence (s.30(1)).   

If a party commences court proceedings in the jurisdiction in breach of the arbitration agreement, the court has the power to grant a stay on an application by the party against whom legal proceedings are brought (s.9(1)).  The courts are also empowered to issue anti-suit injunctions where a party has commenced court proceedings in another jurisdiction, except in cases where the litigation is commenced before a European court which is within the regime of the Brussels Regulation or the Lugano Convention.

The 1996 Act requires service of written notice in accordance with s.14.  Further, it states that the Limitation Act 1980 and the Foreign Limitation Periods Act 1984 apply to arbitral proceedings as they apply to legal proceedings (s.13(1)).  For contractual and tortious claims, the relevant period will be six years from accrual of the cause of action.

The State Immunity Act 1978 (the 1978 Act) provides that a state may not invoke immunity in connection with the commencement of arbitration proceedings if it has agreed to submit the relevant dispute to arbitration (s.9(2)).  Otherwise, it is able to claim immunity.

The 1996 Act allows the parties to agree on the powers of the tribunal in case a respondent (or claimant) fails to participate in the arbitration (s.41(1)).  The tribunal is empowered to dismiss the claim, continue the proceedings in the absence of that party or issue a peremptory order (see s.41).

The 1996 Act does not contemplate voluntary intervention.  According to the LCIA Rules (2020), third parties can join arbitration proceedings provided that both the third party and the party applying to join the third party have consented expressly to such joinder in writing, either in the arbitration agreement itself or after the arbitration has commenced (LCIA Rules (2020), art. 22.1(x)).  The tribunal is not automatically bound by such an agreement, but has the power to allow the joinder “after giving all parties a reasonable opportunity to state their views” (LCIA Rules (2020), art. 22(1)).  If all of the parties agree to the joinder of the third party, the LCIA Rules (2020) provide that the Tribunal must allow such joinder “upon such terms (as to costs or otherwise) as the Arbitral Tribunal may decide” (LCIA Rules (2020), art. 22.1).

A third party may participate—and may be ordered to participate—in an arbitration, but only if the third party and all of the other parties concerned consent.  Consent may be given by adopting institutional rules that provide for joinder.

The 1996 Act allows the parties to agree on the powers exercisable by the tribunal for the purposes of and in relation to the proceedings (s.38(1)).  If there is no agreement, sections 38 and 44 outline the various interim measures a tribunal and the court are permitted to issue, respectively.

Powers are provided to the local courts in s.44 pending the constitution of the tribunal to support the arbitration process, including the preservation of evidence or assets.

The English courts are empowered to issue anti-suit and anti-arbitration injunctions where a party has commenced court proceedings in another jurisdiction in breach of an arbitration agreement, except in cases where the litigation is commenced before a European court which is within the regime of the Brussels Regulation or the Lugano Convention (see question 24) (Midgulf International Ltd v Groupe Chimique Tunisien [2010] EWCA Civ 66; Shashoua and ors v Sharma [2009] EWHC 957 (Comm)),

This issue was recently considered in Enka Insaat Ve Sanayi AS v OOO “Insurance Company Chubb” & Ors [2020] EWCA Civ 574, where the Court of Appeal confirmed the availability of anti-suit relief in support of arbitrations seated in England & Wales (currently under appeal before the Supreme Court).

The 1996 Act provides that—subject to the parties’ agreement—it is for the tribunal to decide whether to apply strict rules of evidence as to the admissibility, relevance or weight of any material (oral, written or other) sought to be tendered on any matters of fact or opinion, and the time, manner and form in which such material should be exchanged and presented (s.34(2)(f)).

If a witness is in the UK and the arbitration is being conducted (not necessarily seated) in England & Wales, parties may rely on the domestic courts to compel the attendance of the witness before the tribunal under s.43(1) of the 1996 Act.  This provision also allows courts to compel witnesses to produce documents.  However, these powers may only be exercised with the permission of the tribunal or by agreement of the parties.

Under s.44 of the 1996 Act, where a witness is overseas, the English Court can issue a Letter of Request to ask a foreign court to examine a witness located in that court’s jurisdiction.  The English Court will also enforce Letters of Request issued by foreign courts and can require a witness to be examined and to provide documents.

An arbitrator conducting an arbitration in England & Wales is primarily subject to any applicable ethical codes or professional standards in their own jurisdiction and relevant provisions of the 1996 Act such as the obligation to (a) act fairly and impartially and (b) adopt procedures to provide a fair means for the resolution of the matters (s.33).  There are also a number of non-binding ethical codes for arbitrators (including the IBA Rules of Ethics for International Arbitrators and its Guidelines on Conflicts of Interest in International Arbitration).  Some institutions have also issued guidelines, such as the LCIA’s General Guidelines for Parties’ Legal Representatives.

As to party representatives, foreign counsel again are primarily subject to the ethical codes or professional standards in their own jurisdictions.  Solicitors, registered foreign lawyers, and registered European lawyers are subject to the SRA’s Standards and Regulations 2019 including the SRA Code of Conduct 2019.  Barristers are bound by the Code of Conduct of the Bar of England and Wales which is administered by the Bar Council, as set out in the Bar Standards Board Handbook (BSB Handbook).  These codes apply whether the barrister or solicitor is acting as arbitrator or as counsel.

Whilst the 1996 Act does not address confidentiality, generally, there is an implied duty in English law to maintain the confidentiality of arbitration hearings, documents generated and disclosed during the arbitral proceedings and any award generated.  In broad terms, the exceptions to this duty are: (i) the parties may dispense with, or modify, the obligation of confidentiality by agreement or consent and (ii) where disclosure of documents is ordered or permitted by the court.  Inter alia disclosure has been permitted where it is reasonably necessary for the establishment or protection of a party’s legal rights and where it is necessary in the interest of justice or (possibly) in the public interest.

The 1996 Act allows the parties to agree what costs in the arbitration are recoverable (s.63(1)).  If there is no agreement, the tribunal may determine the recoverable costs of the arbitration on such basis as it deems appropriate (s.63(3)). 

Unless otherwise agreed by the parties, the 1996 Act allows the tribunal to award simple or compound interest: 

Pre-award interest: from such dates as it considers just on the whole or part of any amount awarded by the tribunal, in respect of any period up to the date of the award (s.49(3)(a)). 

Post-award interest: from the date of the award (or any later date) until payment, at such rates that it considers just on any outstanding amount of any award, including any award as to costs (s.49(4)). 

The 1996 Act allows the parties to agree on the form of an award (s.52(1)).  If there is no agreement, s.52 provides the conditions that need to be met.  These include requirements that the award be in writing and signed by the arbitrators or all those assenting to it (s.52(3)).

Section 66 of the 1996 Act provides for a summary procedure for enforcing awards as a judgement with leave of the court.  The 1996 Act also provides for the recognition and enforcement of a New York Convention award at s.100 et seq., including the requirement to submit originals or duly certified copies of the award and the arbitration agreement when seeking enforcement.

Under s.52(4) of the 1996 Act, an arbitral award must contain the reasons for the award unless it is an agreed award or the parties have agreed to dispense with reasons.  This requirement has been interpreted to mean that the arbitrator(s) should set out what, on their view of the evidence, did and did not happen and why, in light of that, they have reached their decision.

Timeframes relating to the recognition and enforcement of an award can be difficult to estimate as they are subject to the complexity and circumstances of any given award.  

Application for leave to enforce the award may be made on an ex parte basis.  At this point the court may direct the arbitration claim form to be served or order ex parte enforcement of the award.  Where leave to enforce ex parte is given, the award debtor typically has a period of 14 days to apply to set the order aside. 

Section 66(3) of the 1996 Act provides that “[l]eave 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”.

For foreign awards governed by the New York Convention, s.103 of the 1996 Act provides for the grounds for review set out in Article V of the New York Convention.

Subject to any rights of challenge, the parties are free to agree the remedies that can be granted by the tribunal (s.48 of the 1996 Act).   

Generally, the grounds for challenging a domestic or foreign award are (a) absence of substantive jurisdiction (s.67(1)) or (b) a serious irregularity affecting the tribunal, the proceedings or the award (s.68).  Unless otherwise agreed, the parties can appeal to the court on a question of law arising out of an award made in the proceedings (s.69(1)).  Appeals under s.69 are difficult and succeed only in rare circumstances.   

The procedure for appeal and challenge is outlined in the Civil Procedure Rules. 

Under s.69(1) of the 1996 Act, the parties to arbitral proceedings can agree to waive the right to appeal to the court on a point of law.   

The right to challenge the award for lack of jurisdiction or serious irregularity cannot be waived by the parties, even with mutual agreement.  However, s.73 of the 1996 Act states that if a party continues to take part in the proceedings, it may lose the right to raise such an objection unless it can prove that it did not know of the grounds for objection at the time. 

Under s.9(1) of the 1978 Act, if a State has agreed in writing to submit a dispute to arbitration, it waives immunity from proceedings in the English courts which relate to the arbitration, including enforcement proceedings.  In accordance with s.9 of the 1978 Act, this rule applies to commercial arbitrations involving state entities as well as investor-state disputes (See Gold Reserve Inc. v The Bolivarian Republic of Venezuela [2016] EWHC 153).  This waiver extends only to immunity from the jurisdiction of the courts, and not immunity from execution against the sovereign’s property.

An award is binding on third parties who are bound by the arbitration agreement, as contemplated in s.82(2) of the 1996 Act.  

Only a party to the arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court to challenge an award of the arbitral tribunal. 

In Essar Oilfields Services Ltd v Norscot Rig Management PVT Ltd [2016] EWHC 2361 (Comm), the English Commercial Court confirmed that arbitrators have the power to award the costs of a third party funder.  These are considered to be “other costs of the parties” under s.59(1)(c) of the 1996 Act.  In early 2018, a joint task force of ICCA and the School of International Arbitration at Queen Mary University of London unveiled the final draft of its report on third-party funding. 

Parties in LCIA arbitrations can apply to submit disputes to an emergency arbitrator for urgent relief pending the formation of the arbitral tribunal.  The rules governing the appointment of an emergency arbitrator are set out in Article 9B of the LCIA 2014 Rules.   

However, this type of relief does not appear to be frequently used.  In 2016, the first application under Article 9B of the LCIA 2014 Rules for the appointment of an emergency arbitrator was made and was rejected.  In 2018, only three application were made, two of which were granted by the LCIA Court.  This may be due to the fact that Article 9A of the LCIA 2014 Rules sets out a procedure for the expedited formation of a tribunal, which can be used as an alternative route to obtaining interim measures.  

There is also no clear statutory mechanism (unlike Singapore and Hong Kong) to enforce emergency orders/ awards under the 1996 Act.  

Parties can apply to the English court for interim relief under s.44 of the 1996 Act; however, it is likely that the court will not intervene where an application could be made to an emergency arbitrator under the relevant institutional rules (Gerald Metals SA v The Trustees of the Timis Trust & others [2016] EWHC 2327).  In the 2020 update to the LCIA Rules, the provisions concerning the availability of emergency relief were amended to re-affirm that, notwithstanding those provisions, a party “may apply to a competent state court or other legal authority for interim or other conservatory measures before the formation of the Arbitral Tribunal”.  

The London Maritime Arbitrators Association (LMAA) Terms contain a Small Claims Procedure, designed for disputes under a value of US$50,000 (however, parties are free to agree a higher limit).  A sole arbitrator acts for a fixed fee and generally assesses the case based on written submissions and documents.  

The LCIA publishes information in relation to costs and duration of cases.   

Many UK firms, institutions and individuals have signed the Equal Representation in Arbitration Pledge, which is intended to improve the profile of women in arbitration with a view to securing the appointment of more women as arbitrators, on an equal opportunity basis.  The LCIA has also signed the Equal Representation Arbitration Pledge and publishes yearly updates with diversity statistics.  Last year, 23% of arbitrators appointed were women.  In 2018, the LCIA Court appointed non-British arbitrators 57% of the time, compared to the parties and the co-arbitrators, who appointed non-British arbitrators 20% and 27% of the time respectively. 

On 27 July 2017, the English Commercial Court dismissed an application to enforce a Russian arbitral award that had been set aside by the Russian Commercial Court (Maximov v Open Joint Stock Company OJSC (Novolipetsky Metallurgichesky Kombinat) [2017] EWHC 1911 (Comm)).

The Court held that an applicant seeking to enforce an award that has been set aside at the seat of arbitration must not only prove that set aside decision was wrong or manifestly wrong, but that it was so perverse that it could not have been arrived at in good faith or otherwise than by bias.

In June 2020, the Paris Court of Appeal refused to set aside a Paris-seated arbitration award that the English Court of Appeal had refused to enforce six months earlier on the grounds that the tribunal had wrongly asserted its jurisdiction.  The Paris Court of Appeal found that the arbitration agreement was governed by French law (the law of the seat), while the English Court of Appeal concluded that it was governed by English law (the contract’s governing law).  The Paris court held that a nonsignatory was bound by the clause under French law, while the English court held it was not under English law.  While the contradiction—which is reminiscent of the Dallah v Pakistan saga—may be resolved on appeal, the conflicting decisions illustrate the potentially significant consequences of failing to specify the law applicable to the arbitration agreement where the law governing the substance of the contract is not the same as the law of the seat of the arbitration (Kabab-Ji SAL (Lebanon) v Kout Food Group (Kuwait) [2020] EWCA Civ 6 (20 January 2020; CA Paris, pôle 1 – ch. 1, 23 jun. 2020, n°17/22943 (Court of Appeal)).

There are no statistics available to assess the frequency with which corruption or bribery allegations are made in an arbitration context.  It is worth noting, however, that in Premium Nafta v Fili Shipping [2007] UKHL 40, the House of Lords held that unless the arbitration agreement specifically (as opposed to the main contract) can be shown to be induced by bribery, the arbitration agreement will remain valid.

English courts will typically require an allegation of corruption to be proved by the party advancing the relevant assertion, with the civil standard of proof of ‘more likely than not’ applying (Secretary of State for the Home Department v. Rehman [2001] UKHL 47, [55]).  However, courts have also provided additional guidance where more serious allegations of fraud and corruption are in question, stating that “although the standard of proof is the civil standard,… the cogency of the evidence relied upon must be commensurate with the seriousness of the conduct alleged.” (JSC BTA Bank v Ablyazov & Ors [2013] EWHC 510 (Comm) at [76]).

There have been a number of recent cases in which the English courts have considered the issue of corruption, often in the context of public policy arguments which are discussed in response to question 53, below.  In one notable recent case, The Federal Republic of Nigeria v Process & Industrial Developments Ltd [2020] EWHC 2379 (Comm), Nigeria requested an extension of time to challenge an award issued against it under sections 67 and 68(2)(g) of the 1996 Act, on the basis that the agreement in question was procured by fraud and corruption.  The Court agreed in a ruling that is significant, as it has allowed Nigeria to seek an unprecedented extension of time beyond the 28 day time limit in s.70(3) of the 1996 Act.  The Court concluded that “there is a strong prima facie case that the [agreement in question] was procured by bribery” (para. 196), and that P&ID contributed to the delay, and would not suffer “irremediable prejudice” from the extension of time (para. 276).

In a number of recent cases, the English courts have considered the definition and application of “public policy” largely in the context of allegations that the underlying contract was procured through bribery and corruption.

In National Iranian Oil Company v Crescent Petroleum Company International Ltd & Anor [2016] EWHC 510 (Comm), the claimant challenged the award under s.68 of the 1996 Act, arguing that the award was contrary to public policy because the underlying contract had been procured by bribery and corruption.  The Court held that English public policy will prevent enforcement of an illegal contract such as a contract to pay a bribe, however, there is no public policy requiring a court to refuse to enforce a contract procured by bribery.  Moreover, there was no basis in English public policy for refusing to enforce the contract on the ground that it was “tainted” on the facts of the case, where the contract had been preceded by, but was causally unaffected by, a failed attempt to bribe.

Similarly, in Alexander Brothers Limited (Hong Kong SAR) v Alstom Transport SA Alstom Network UK Limited [2020] EWHC 1584 (Comm), Alstom applied to the Court to set aside an order enforcing the arbitration award, on the basis that the underlying agreements were tainted by illegality.  The Court noted that there is no rule of law “that automatically prioritises the finality of arbitral awards over the public policy of refusing to endorse illegal conduct” and that there is no “one size fits all” approach to corruption allegations.  However, where the tribunal had jurisdiction to determine the relevant illegality issue on the facts, and found that no such illegality existed, there would be “very nearly no scope” for the Court to re-open the issue.  The Court stated that this general position is the result of a balancing exercise between the public policy of the finality of arbitration awards and the public policy against illegality.

There have been no recent court decisions, nor are there any pending decisions, in England and Wales considering the judgment of the CJEU in Achmea.

In February 2020, the UK Supreme Court issued a decision in the Micula case (Ioan Micula, Viorel Micula, S.C. European Food S.A, S.C. Starmill S.R.L. and S.C. Multipack S.R.L. v. Romania, ICSID Case No. ARB/05/20).  The UK Court of Appeal had previously confirmed a lower court‘s judgment staying the enforcement of the Micula award pending the conclusion of state aid proceedings before the General Court of the European Union (GCEU), where the European Commission was defending its decision to order Romania not to pay damages under the award on the grounds that it would amount to unlawful state aid under EU law.

The Court of Appeal’s decision was appealed to the Supreme Court.  Romania and the European Commission argued that the question of Romania’s EU law obligations in relation to the award was pending before the Court of Justice of the European Union (CJEU) (having been appealed from the GCEU), and that the Supreme Court should continue the stay pending the CJEU’s decision to avoid the risk of conflicting decisions.  The Supreme Court disagreed, finding that the question before it concerned the relationship between Article 54 of the ICSID Convention (which requires the UK to recognise and enforce ICSID awards) and Romania’s EU law obligations.  This question was not before the CJEU, which was merely reviewing the GCEU’s decision as a matter of EU law.  The UK Supreme Court overturned the decisions of the lower courts, finding that the stay of enforcement conflicted with the UK’s obligations under Article 54 of the ICSID Convention.

In April 2020, thirteen arbitral institutions, including the LCIA, issued a joint statement calling for solidarity, cooperation and collaboration in response to COVID-19. The statement emphasised the joint ambition of the institutions to support international arbitration’s ability to contribute to stability and certainty in a highly unstable environment, including by ensuring that pending cases may continue and that parties may have their cases heard without undue delay.  Some of the relevant concerns identified by the institutions related to virtual hearings, confidentiality and data security, due process concerns, technological failures and enforceability risk.

As noted above, on 11 August 2020, the LCIA also announced updates to its Arbitration Rules.  Although the LCIA did not amend its Rules in response to COVID-19, the pandemic acted as a catalyst for the amendment certain provisions, including expressly permitting the conduct of virtual procedural conferences and hearings and making electronic filing and communication the default rule (see question 6).

Under the Insolvency Act 1986, once a company enters a mandatory insolvency process, arbitration may not be commenced or continued against it without the permission of the court (or, in the case of an administration, the consent of the administrator).  A mandatory insolvency process includes administration, a compulsory winding-up or liquidation, or the appointment of a monitor.  Conversely, in the case of a voluntary insolvency process, such as a company’s voluntary winding up, the court’s permission is not generally required to pursue arbitral proceedings against that company.  Where the court’s permission is required, the court will carry out a balancing exercise between the legitimate interests of the applicant and those of the other creditors.  If it can be demonstrated that the arbitration is an effective means of resolving the issues in dispute between the parties and is not likely to hinder the insolvency proceedings, leave may be granted.  In all cases, the goal is to ensure a level playing field amongst creditors, and a centralised and transparent insolvency process. 

The insolvency of a party does not affect the enforceability of an arbitration agreement in itself.  This was confirmed in the recent case of Riverrock Securities Ltd v International Bank of St Petersburg (Joint Stock Company) [2020] EWHC 2483 (Comm), where the court confirmed that “[i]n circumstances in which those claims seek relief which the arbitration tribunal is able to grant, and do not engage the interests of third parties save to the extent that any creditor of an insolvent company will benefit from its success in arbitration, those claims are arbitrable” (para.  87(ii)).    

The United Kingdom is a Contracting Party to the Energy Charter Treaty. The United Kingdom has not publicly expressed any specific views as to the current negotiations on the modernization of the Energy Charter Treaty. 

There have been no new developments regarding arbitration proceedings and climate change or human rights in England and Wales.