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1996 and all that: Happy 20th birthday to the Arbitration Act 1996

The Arbitration Act 1996 and London arbitration have come in for a bit of a battering recently, most notably in the much-discussed 2016 Bailii Lecture, in which Lord Thomas, Lord Chief Justice of England and Wales, called for greater use of the courts as a way of ensuring the development of the common law. So it was a pleasant change to attend a celebration of the 1996 Act, on the eve of its 20th birthday. The event, entitled “1996 and All That: A Memorable History of (Arbitration in) England”, was hosted by Allen & Overy (A&O) and featured speakers from both A&O and Essex Court Chambers.

Birth of the Arbitration Act 1996

Toby Landau QC, one of the drafters of the 1996 Act, set the scene with an entertaining account of its humble beginnings in a windowless basement room under Whitehall, later moving to a windowless attic room at his chambers. The 1996 Act was passed on 17 June 1996, most of its provisions came into force on 31 January 1997, and the rest, as they say, is history.

Life of the Arbitration Act 1996

Members of A&O’s international arbitration practice pitched against counsel from Essex Court Chambers in a series of mini moots, debating some of the more controversial aspects of the 1996 Act. First up, Iain Quirk of Essex Court Chambers and Shreya Aren of A&O debated the particularly common law remedy of anti-suit injunctions, with Iain arguing in favour of the motion “Anti-suit injunctions have been effective in preserving arbitration”, and Shreya voting against. In the recent past of course, the English courts have been powerless to grant anti-suit injunctions restraining proceedings before EU member states’ courts, in light of the ECJ’s 2009 decision in West Tankers. However, they remain a useful (and used) tool in the English courts’ armoury where court proceedings are brought in non-EU states in breach of an arbitration agreement, as illustrated in the AES case, and those in favour of the motion were in a small majority. (As an aside, anti-suit injunctions may ultimately also be back on the table for “offending” proceedings brought within the EU, in a post-Brexit world, but that’s another story.)

The motion “The review of jurisdiction decisions de novo in all cases under sections 67 and 103 is unjustified” saw Naomi Briercliffe of A&O and Siddharth Dar of Essex Court Chambers debating the rights and wrongs of jurisdictional challenges to awards (section 67) and enforcement (section 103) taking the form of a complete rehearing. Although well-established (as authoritatively confirmed by the Supreme Court in Dallah), the English courts’ approach exposes a tension with the principle of finality of arbitral awards and the policy of limited judicial intervention. The invited audience fell into the more pro-arbitration and pro-enforcement camp, with the motion being carried.

The third and final motion, “Section 68 of the Arbitration Act is, in its current form, reasonably fit for purpose” had Jern-Fei Ng of Essex Court Chambers arguing in favour and Alastair Campbell of A&O opposing. The basic premise underlying the motion was that there are too many unmeritorious challenges to awards for serious irregularity, under section 68, undermining the principle of finality. Against this, Jern-Fei pointed to the relatively small number of successful challenges under section 68 and the procedure whereby the Commercial Court can dismiss, on a summary basis, a section 68 challenge, with the added sanction of an indemnity costs order against the applicant. His arguments obviously persuaded the audience, as the motion was carried.

Crystal ball gazing

Having reflected on the past and present, a panel of Essex Court Chambers silks, chaired by A&O partner Kate Davies, turned to consider the future of the 1996 Act and each identified an aspect of English arbitration that was ripe for change/further development. For David Joseph QC, it was the standard of proof required to establish the existence of a valid arbitration agreement, for the purposes of section 9(1) and 9(4). He suggested that the current standard (on the balance of probabilities) set by the Court of Appeal is wrong and out of step with other jurisdictions, such as Singapore, which apply a prima facie test.

Graham Dunning QC suggested that clarification is needed as to whether the court has power under section 44 of the 1996 Act to grant injunctions against non-signatories to the arbitration agreement (and how that might be addressed through changes to the CPR). At present, there are conflicting decisions on this point, the court in Cruz City considering there is no such power but the opposite view being expressed in Russian Machines.

Finally, Ricky Diwan QC predicted the further development of the principle of confidentiality in arbitration, and in particular, the scope of the exceptions to confidentiality. In his view, context will drive the issue of confidentiality and he predicted that the current discussion around transparency in investment treaty arbitration will spill over into commercial arbitration. However, this development would be on a case-by-case basis, rather than by way of any statutory enactment covering confidentiality.

The upshot of the evening was that, while the 1996 Act may need tweaking here and there, there has been much to celebrate in its life so far. Here’s to the next 20 years!

Practical Law Arbitration Saira Singh

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