On July 18 2024, following the opening of Parliament, the Arbitration Bill (the "Bill") was introduced into the UK House of Lords. The Bill contains important provisions to modernize the Arbitration Act (1996). An earlier version of the Bill was introduced in November 2023 but fell upon dissolution of Parliament.
The Ministry of Justice consulted Baker Botts (UK) LLP on the modernization of the Arbitration Act, 1996 in April 2024, with respect to the law that governs the arbitration agreement. The team at Baker Botts provided commentary on the legal implications of the Bill's default rule on the law applicable to arbitration agreements in cases where the agreement is based on a treaty provision or on foreign legislation. The question of the applicable law to the arbitration agreement was the subject of debate in England and was recently addressed by Supreme Court in Enka v. Chubb [2020] UKSC 38. Our analysis of the decision in Enka v. Chubb is available here.
The key changes to the Arbitration Act contained in the Bill are as follows:
- Law applicable to the arbitration
agreement
The default law governing the arbitration agreement will be the law of the seat unless the parties expressly agree otherwise. This rule will not apply to arbitration agreements derived from standing offers to arbitrate in treaties or non-UK legislation. - Duty of disclosure for arbitrators
The Bill creates a statutory duty which requires arbitrators (or potential arbitrators) to disclose any "relevant circumstances" which would question the arbitrator's impartiality in the proceedings. The duty extends to circumstances which the arbitrator knows or ought reasonably to be aware of. - Arbitrator immunity for resignations and applications
for removal
The Bill strengthens an arbitrator's immunity against liability if they resign or if an application for their removal is made. The arbitrator will be immune from liability unless it can be shown that the resignation was unreasonable. - Summary basis awards
In line with court proceedings, arbitrators will be explicitly empowered to make an award on a summary basis on issues that have no real prospect of success. - Emergency arbitrators
Emergency arbitrators will be explicitly enabled to issue peremptory orders and make relevant applications for court orders. - Challenges to an arbitral tribunal's
jurisdiction
Section 67 of the Arbitration Act (1996) provides for challenges to an arbitral tribunal's jurisdiction. The Bill revises this framework to ensure that no new evidence or new arguments can be made when a tribunal's jurisdiction is challenged under Section 67.
A copy of the bill can be found here. These amendments could be in force in the coming year.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.