A new Arbitration Bill is back on the agenda, following the King's Speech on 17 July 2024 which detailed the new Labour government's legislative programme.
The Arbitration Bill is not new, but its revival is encouraging, and expected to be embraced by the arbitration community and practitioners. In September 2023, the Law Commission published final recommendations for reform following its review of the Arbitration Act 1996 (the "Act"). The Arbitration Bill, proposed by the previous Conservative government (but not passed before parliament dissolved in the lead up to the July 2024 election), is now firmly back on the table.
It is anticipated the reforms will bolster the country's position as a premier international hub for dispute resolution, and support growth in a sector the Law Commission estimates to be worth at least £2.5 billion to the economy in arbitration and legal fees. The reintroduction of the Arbitration Bill provides an opportunity to cement London's position as a leading centre for international arbitration.
Key changes to the Act
The key reforms in the Arbitration Bill include the following:
- Summary disposal: The Bill will introduce a new power of summary disposal, enabling arbitrators to dismiss a claim, defence or issue where there is no real prospect of success and to issue an award on a summary basis.
- Duty of disclosure: The Bill will require that arbitrators (or potential arbitrators considering an appointment) disclose circumstances which might reasonably give rise to doubts as to their impartiality in relation to the proceedings.
- Arbitrator immunity: The Bill will extend arbitrator immunity to include immunity from: liability for resignation (unless the resignation was unreasonable); and from liability to pay costs in an application for the arbitrator's removal (unless the arbitrator has acted in bad faith).
- Governing law: The law applicable to an arbitration agreement will (in the absence of an express clause) be the law of the seat chosen for the arbitration.
- Substantive jurisdiction challenges: Under the Bill, a challenge to the award (made by application to the court under section 67 of the Act) on the basis the tribunal lacked substantive jurisdiction, cannot, save in limited circumstances, contain a new ground for objection or new evidence, and evidence will not be reheard.
- Emergency arbitrators: The Bill will give the court powers to support emergency arbitrators.
- Third parties: The Bill will give the court powers to support arbitral proceedings by making orders in relation to third parties.
The Arbitration Bill is a welcome evolution to the arbitral landscape, seeking to modernise and enhance the effectiveness of the arbitration framework, and provide greater clarity (in particular, on governing law). The reforms, if passed, would serve to bolster England & Wales (and the centre of London) as a leading hub for international arbitration.
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