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RUSSELL ON ARBITRATION
Twenty-Third Edition

by

David St. John Sutton

BA, FCI Arb

Judith Gill
MA (Oxon), Dip Int Arb, FCI Arb

Matthew Gearing
BA (Oxon), MCI Arb

LONDON
SWEET & MAXWELL
2007
 Published in 2007 by
Sweet & Maxwell Limited of 100 Avenue Road,
Swiss Cottage, London, NW3 3PF
http: //www.sweetandmaxwell.co.uk
Typeset by Interactive Sciences Ltd,
Gloucester
Printed and bound in Great Britain by
TJ International, Padstow, Cornwall

No natural forests were destroyed to make this product;

only farmed timber was used and re-planted

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is available from the British Library

ISBN 978 0 421 96680 2

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trademarks of Thomson Financial S.A. used herein under licence.
Crown Copyright material is reproduced with the permission of
the Controller of the HMSO and the Queen’s Printer for Scotland.

No part of this publication may be reproduced or transmitted, in any

form or by any means, or stored in any retrieval system of any nature, without
prior written permission, except for permitted fair dealing under the
Copyright, Designs and Patents Act 1988, or in accordance with the terms
of a licence issued by the Copyright Licensing Agency in respect of
photocopying and/or reprographic reproduction. Application for permission
for other use of copyright material including permission to reproduce
extracts in other published works shall be made to the publishers.
Full acknowledgment of author, publisher and source must be given.

©
Sweet & Maxwell
2007
 FOREWORD

Russell on Arbitration is one of the classic legal reference works. It has stood the
passage of time and established, and in recent editions reinvented, its own distinct
persona and importance in legal literature. Few other texts have become institu-
tions due to acceptance and reliance on by the legal fraternity, including the
courts, practitioners and all those involved with arbitration in England and under
English law. For many foreign lawyers representing parties in arbitrations in
England Russe// is a reference tool for them too.
Anecdotal evidence suggests there are an ever increasing number of arbitrations
in England. Whilst difficult to substantiate, this may be the result of the momen-
tum of the alternative dispute resolution movement which has resulted in decreas-
ing numbers of cases being taken to the courts. Yet hard facts on the number of
arbitrations are not available and perhaps impossible to obtain. This is due in large
part to the very many different kinds of arbitration, resorted to by parties from
different industries, involving arbitrators from different backgrounds and pro-
fessional experience, and many involving factual issues rather than legal principles.
These arbitrations are domestic (i.e. where both parties are from England and the
subject matter is in England), international (involving some non-UK element),
commercial (involving some business element), investment (arising out of bilateral
investment treaties or investments by a party into another country), ad hoc and
institutional (such as ICC, LCIA or Stockholm Institute), commodities (food and
grain) and industry specific (shipping, insurance, construction).
The only evidence that exists is the annual number of known decisions arising
out of, concerning or affecting arbitration in the English courts. A rough estimate
suggests that in almost five years since the 22nd edition of Russe//, there have been
70-80 such decisions a year over this period. However what is important is not the
numbers but how the English courts use their power to support and give effect to
the agreement of the parties to submit their differences to arbitration. The
Arbitration Act 1996 greatly narrowed the opportunities for the English courts to
review and interfere with the arbitration process. Happily that approach has been
supported and followed in the main by the English courts.
With the passage of 10 years since its enactment, the Arbitration Act 1996
continues to be interpreted and applied with its intended purpose, i.e. giving
primary place to the will of the parties and then upholding the authority of the
arbitrators to conduct proceedings appropriately in the circumstances of the case.
It is also noteworthy that the English courts are looking at factors and influences
from outside the United Kingdom, especially the UNCITRAL Model Law of
International Commercial Arbitration, the New York Convention and the deci-
sions of other national and international courts on related commercial arbitration
issues.
There are four main areas where reported decisions of the English courts have
covered important areas of the 1996 Arbitration Act.
Vi Foreword

. The courts have sought to give effect to party autonomy and to oblige
parties to adhere to their commitment to arbitrate. This has meant the
staying of proceedings commenced in the courts despite the existence of a
valid arbitration agreement and recognising the differences that exist in the
conduct of arbitrations generally. The effect may be to preclude a party
from seeking to challenge an award in a country other than the place of
arbitration and even, perhaps in due course, ordering a party to participate
in an arbitration based on a valid arbitration agreement. A breach of the
arbitration agreement could also give an entitlement to monetary dam-
ages.

. Injunctive relief, by way of anti-suit or anti-arbitration injunctions, is a

widely sought remedy in the face of an arbitration agreement and gives rise
to many concerns of excessive jurisdiction being exercised by the courts.
These cases have provided the opportunity for the English courts to
consider the interaction between the duty of the court to recognise the
autonomy of the arbitration and therefore the importance of not interfering
in the process, and the need to exercise jurisdiction and make orders which
give effect to the decision of the parties to submit their differences to
arbitration. In practise the court’s powers have been used sparingly, and
only to enforce arbitration agreements and support arbitral practice. They
generally are not used to interfere with arbitrations taking place in another
country and under some other law.

. The doctrine of separability, resisted for some time in England, is now well
accepted in English law and given effect to in the Act. The English courts
have recognised that, with few exceptions, it is for arbitrators to determine
the extent of their own jurisdiction, and that the arbitration and the
arbitration agreement may be subject to a different national law to that
governing the underlying contract. Most significantly, the House of Lords
decision in Premium Nafta Products Ltd & Others v Fili Shipping Co Ltd &
Others (the Fiona Trust case) recognised that an arbitral tribunal will not be
deprived of jurisdiction where the underlying contract is alleged to have
been induced by bribery, or for that matter even if this allegation is
upheld.

4. An area where the courts have had some involvement is with respect to the
duties of arbitrators. These are stated in section 33 of the Arbitration Act
1996 in language which, whilst original and perhaps revolutionary,
expresses the general expectation and understanding of the duty of arbi-
trators in unique terms. These obligations are to “‘act fairly and impartially
as between the parties”, “giving each party a reasonable opportunity of
putting his case” and adopting procedures which “‘avoid unnecessary delay
or expense”. The meaning and application of these basic standards have
still to be thoroughly considered in the English courts. They have however
been tested in the English courts largely in the context of applications to
challenge awards for serious irregularity under section 68. The English
courts have also had the opportunity to consider the IBA Guidelines on
 Foreword Vil

Conflict of Interest in International Arbitration in reviewing standards for

impartiality and independence of arbitrators.

This 23rd edition of Russell on Arbitration, more than 150 years after the first
edition, reflects the law on these and other issues up to date in 2007. It will
continue to be an indispensible aid to lawyers and non-lawyers involved with
arbitration or wishing to understand the principles of the law applicable to
arbitration in England. The authors, distinguished and experienced practitioners
in all forms of international and domestic arbitration, are to be commended for
continually raising the bar in respect of this ever more valuable book.

Julian D M Lew Q.C.

October 2007
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 PREFACE

This book deals with the English law of arbitration as at June 30, 2007, although
wherever possible an attempt has been made to incorporate subsequent develop-
ments up to the date of finalising the proofs for publication in early October 2007.
For example, reference has been included to the potentially important first
instance decisions in Albon v Naza Motor Trading Sdn Bhd (No.4), where the
court exceptionally granted an injunction to restrain a foreign arbitration, and to
Tamil Nadu Electricity Board v ST-CMS Electric Co Private Ltd, which deals with
the interplay between the law of the matrix contract and the law of the agreement
to arbitrate. Both of these cases were decided in July 2007.
Even more recently, in the final days of reviewing the proofs of the book, the
House of Lords handed down the important decision in Premium Nafia Products
Ltd v Fili Shipping Co Ltd. We had given extensive treatment to the decision of the
Court of Appeal in this case (there entitled Fiona Trust & Holding Corp v Yuri
Privalov). The House of Lords decision further bolsters the principle of separ-
ability of the agreement to arbitrate contained in section 7 of the Act and lays
down sensible and modern guidance on the construction of the wording of
agreements to arbitrate and we have therefore sought to incorporate reference to
it in so far as possible in the time available.
More than ever, the development of arbitration law is moving at a fast pace and
the temptation, which we have resisted, was to postpone publication of this 23rd
edition until certain important developments had crystallised, not least because in
the five years since the 22nd edition almost every area of arbitration law has
received judicial attention and time is now ripe for a fresh statement of the law.
One evolving issue worthy of particular note is the continued ability of the courts
to grant anti-suit injunctions to restrain proceedings brought in other Brussels
Convention countries commenced in breach of an agreement to arbitrate is in
doubt following the reference of this question to the European Court ofJustice by
the House of Lords in West Tankers Inc v Ras Riuione Adriatica di Sicurata. The
EC] is not expected to consider the reference until 2009 at the earliest. In Chapter
7, we summarise the current position pending this decision and the arguments for
and against the use of anti-suit injunctions.
Finally, we should thank our colleagues at Allen & Overy LLP and elsewhere
who have given us great assistance in the process of preparing this addition, in
particular, Hannah Ambrose, Chris Mainwaring-Taylor and Conan Lauterpacht,
colleagues in the arbitration group at Allen & Overy. We also wish to express our
thanks for the tireless secretarial support provided by Maria Iannella, and for the
invaluable support and guidance given by our publishers at Sweet & Maxwell.

David St John Sutton, Judith Gill, Matthew Gearing

October 2007
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 CONTENTS

Bie RPh ere Hemet trmrhir irate At stare cairns 1 aie ee v

eh Ee cape pm aad seer perenne ne te eb echt lik bd tA Ma lope heLt oi ix
PEOUTEVIA OTT eh ecet se Pee erty eee eT eels asnancst XV
Bae OL AUANGaris ete centes ate csr tCtiie Men ernte rn eee Om Pea et eB on cas XIX
PEAie OF TAT Gana eure cerry ee mene eee ee ee eee ee etc Nalin Ix
Pathe Ol eAeOt yeastrUINenign set. eee reeset ee eee ner wuis Ixxvil
Mave OL Ory TOC COU eCINtnes e rance rere tey mere ent a cs cars Ixxvill

Chapter 1. Introduction
Pe ANTE ALIGN) LAW G cans ceerr sees ht. de tneamn ae eeaa eat er ese sce 1-001
2, EALOUTAtON, ANG Menke AUT Cad oe ners scedarara, Bets tcisacsses 1-005
RAR cregeiecripce) a plolitye|temee eee poe Mem 2 OREN on er one 1-016
#2 he-Tote othe Emrlish: COU. cen meaetet-c.r.cce. 1-019
5, Phe advantares Of ar pitt atin «ccs anil. feces scenes 1-022
6, “Phe disadvantages ofarDitration virccn exstoet.-stec-sccs 1-028
7. Matters referred and referable to arbitration ............ 1-033
S. Ene sources OL -arDitalOMwaW garsperrecates.-ste-+conseos 1-042
oe Wevelopalents Ws anole ation law omer cre eee. 1-043
LO- Summary 01 Tollowine Chapters. ceaccc cc. s20cs tees Acces 1-055

Chapter 2. The arbitration agreement

|g Wy ago Ts AG)keer need Re ite at, A aR PR 2-001
2g Wat Sealant Ott at1OMl AG TeCMAC INCE cress n, bapreosaceee
ents 2-002
Si, POLI OL anal OlUr ston ae LeCMENE ct. cescr ce naeyaecerives 2-038
+, (Content.of ait arOltration AgrecIMent ..cusiasenanccsstesc 2-058
5, Laws (to: be apohed to an arbitration: o...c.acc...-a0ccaers 2-087
6. Termination of the arbitration agreement ................ 2-110

Chapter 3. Parties and institutions

Weg MANGE
OT UAGSIAIN esc cen ecehew. seen ci NRTA AN este c cuits 3-001
DC ABLLOS IsSica nace sees PERL Po: I LE hee Moo acaieaacs 3-002
3., Individuatsnindemdisabilitys 25, ee eet etic ncnn ono 3-004
4. SOF POFAte, DOGIES .sarvoas AUER. ees RMR pea R econ iene sadexse 3-008
5. Partnerships and unincorporated associations ........... 3-012
Gyan panties ant, LIAS OA Het eee Retr cen sects esas 3-014
Pe eS THEMEEG, DATELES, «cost eyscoeceor scan: MPU ORAS <cos2agnen somes 3-016
SrpleGatarand aw Versi a so M RO ied veetseses 3-023
9. Executors, administrators and trustees .............0..008 3-026
10. Insolvent individuals and companies .............0.:::0068 3-027
11. States, state entities and public authorities ............... 3-033
[Detlniemaronalorganrsations, vORMR. GTi dikes cossenaen 3-039
13S Miultitpartydis puter. 20. 2 atte Rh LORRI e.cc.tacen ee 3-040
X11 Contents

14. PN ovdagel shaksslaty

nVOIn ehesa: pans snnbernnonnancéasecaunosonanoasssoncacedsen 3-051

Chapter 4. The tribunal

Lag trO CU CHL ONES, caress. cease ee Cee ee Cee eee
IDEMINITONSe tera once o ae Oe nee ee ee
Qualifications) of aiiarbiteatOr 6. teac-co-cbsscce-se-nteesvaceet
Appointment of an arbitral tribunal ....................
Remuneration of an arbitral tribunal ........................
PowenrseotanoiiraleinioUnal Sweeties tesserae
Dutrescof anvanbitiralltiloinalleee scene teseets ahem eee
iabrtlitieskotaaniithatOticie ses: sere eeeenee ae eee ener nee
Challenge and termination of authority of arbitrators .

Chapter 5. Conduct of the reference

iL: Iataqore (Yea Conn eneer erence econ nrcccrectnosccacs neaaceconodetnce nner ED
a Commencing the arbitration’ "OV RAs esto snkesaie
op Duties of the tribunal in relation to the conduct of the
PELETENCE: 5h RS Ree es OO Seco oe sash aat
Preliminary: cOnSIdePatONS Fe ete ers tee dessen
Ascertaninig the procedupen cise cs tee tate sete ate oe censuses
TNS Wearing 75.12 ee 28, Wee Mot Me Bane ht Moser wonuss
Se dlermination ofine melerencem
Sa
os
Su a mitieesesteeee eee aan

Chapter 6. The award

Ialiyore Cites ol emeeeeecoe tee CT Mom rm re re nee eae
Poriial fequirements Of AWAEA i occniu es ccd teen
Re
hY
WwWSubstantive requirements Of Award © cocccepee.nee-ocd-< os
Relief and remedies available to the tribunal ............
LG 015Fc a eee ee ee eC ee te Et en eee

Chapter 7. The role of the court before and during the

arbitration
Ls DtROGUC RIOD snscesstierncinadsiesindca sss AARON MMER cco cocaceh ta
2... StAVAUE; COURT PEOCCEMIICS i csoc exiccces MARIN Rc cecosccomnen
3. Injunctions to restrain arbitrations stvisish..t.....0.00
4s EXt@mS1GM)OF, TUM 01 coca nucaeee ere MUN MEIN R co Peccare betes
5. Appointment of an arbitrator or umpire ..................
6. Removal of the tribunal, resignation and revocation of
AUEINOLIEY waicniedny aces pavesiualicicoRMhe Se ORAM ea watetiveosc
Determining disputes about the tribunal’s jurisdiction
during the arbitration: iene UME ake osecev snes
Determination of questions of law during the arbitra-
THORLTiaintis Seleiiety, Dat. ge Pate Ae ce bbctians us.
Court’s powers to issue injunctions and make other
orders in relation to arbitral proceedings .................
 Contents Xill

10. Determination of the recoverable costs of the arbitra-

(PETal Shen ce Soh eA Ae en ay once weed oF a EE 7-209

Chapter 8. The role of the court after the award

le 8—001
vee 8—002
a Recognition and enforcement of certain foreign
DW AEG SS otis canteen cune eceer nt Aitnr Caimi onhAte a acaustaa 8—020
Cuan se Olea WAlOStocecyea.zic ee Ma tiw nke reese eee ays 8—051
Challenge of substantive jurisdiction ...................0005 8—054
Challenge of serious irregularity causing substantial
ATA GIC eee Mee teas. be fet, Ossett ck bv tetera meahccioe 8-072
Appeal on.questions ofslawile. cut cetlcenncsceesane eercnes 8-119
Orders in respect of challenges and appeals ............. 8-162
Procedure for arbitration applications ................00 8-178
Appendix | Arbitration Act 1996 and related statutory instru-
TPLONEG eeced: ches ip errata a seeat eg etna sive cea voh pe loetinons a A1—000
ANvaoninrenaorm AoE WENO), TRENAE LUT caonanenasonnoapncs ansansacson6anae Al-119
Givileerocedune ules bantno2 mnmaeaeeesteeeteee ante ee Al-127
Practice erection: — Ar bitr att Oth. 93). Pies herbarecinn ces Al-149
Appendix 2 DAC report on the Arbitration Bill and supplemen-
fainreportion the Arbitration Act 1990 nce nece: A2-000
Appendix 3 esse rhec aeeeet earn A3—-001
ScahatOrysarbitration yusgesceeccas:eoeete
Appendix 4 Comparison between the Arbitration Act 1996 and
the -WING TURAL, Modell aw tycrsstisce wercccetar esses) atts
Appendix 5 {ist Of appomUng AULROMNES:. chess cxtsetaetness

Index
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 ABBREVIATIONS

Act
The Arbitration Act 1996.

Brussels Regulation
Council Regulation (EC) No.44/2001 of December 22, 2000 on jurisdiction and
the recognition and enforcement of judgments in civil and commercial matters,
including, if applicable, its application to Denmark as from July 1, 2007 by virtue
of an agreement made on October 19, 2005 between the European Community
and the Kingdom of Denmark on jurisdiction and the recognition and enforce-
ment of judgments in civil and commercial matters.

Brussels Convention
EC Convention on Jurisdiction and the Enforcement of Judgments in Civil and
Commercial Matters, Brussels 1968. The Brussels Convention has been largely
replaced by the Brussels Regulation. With respect to legal proceedings instituted
and to documents formally drawn up or registered as authentic instruments before
July 1, 2007, the Brussels Regulation is not applicable to Denmark. Nor does it
apply to certain overseas territories which fall within the geographical scope of the
Brussels Convention. The Brussels Convention therefore continues to have a
residual application.

ADR
Alternative dispute resolution.

Arbitration PD
The Practice Direction—Arbitration which supplements CPR Pt 62.

Chitty
Beale and others, Chitty on Contracts (29th edn, Sweet & Maxwell, 2006).

CIArb
Chartered Institute of Arbitrators.

Commercial Court
The part of the Queen’s Bench Division of the English High Court of Justice
devoted to commercial cases, including all arbitration applications and appeals.

Convention award
An arbitration award made in a country which is party to the New York Conven-
tion. The use of the expression ‘Convention award” derives from a statutory
Xvi Abbreviations

definition in the Arbitration Act 1975, s.7: that Act has been repealed. The
Arbitration Act 1996, s.100(1) uses the expression ‘“‘New York Convention award”
for awards made outside the United Kingdom under the New York Convention;
there are of course other conventions for the enforcement of awards made outside
the United Kingdom. However, the expression “Convention award” in the nar-
rower sense is likely to continue to be used.

CPR
The Civil Procedure Rules in force as at September 2007.

DAC
Departmental Advisory Committee on Arbitration Law set up by the United
Kingdom’s Department of Trade and Industry.

DAC Report
The DAC (see above) produced a number of reports. Where none is specified, the
reference is to their report on the Arbitration Bill of February 1996. If the
reference number is to another of the committee’s reports, the title of that report
is given in full.

Dicey & Morris

Dicey, Morris & Collins, Conflict of Laws (Lawrence Collins and other eds, 14th
edn, Sweet & Maxwell, 2006).

Kendall
J Kendall, Expert Determination (3rd edn, Sweet & Maxwell, 2001).

FIDIC
Federation Internationale des Ingenieurs-Conseils.

FOSFA
Federation of Oils and Seeds and Fats Association.

GAFTA
Grain and Feed Trade Association.

Geneva Convention
Convention on the Execution of Foreign Arbitral Awards signed at Geneva on
behalf of His Majesty on September 26, 1927

Handbook
Bernstein’s Handbook ofArbitration Practice (4th edn, Sweet & Maxwell, 2003).

IBA Guidelines
IBA Guidelines on Conflicts of Interest in International Arbitration.
 Abbreviations XV1l

IBA Rules
IBA Rules on the Taking of Evidence in International Commercial Arbitration.

ICC
International Chamber of Commerce.

ICCA
International Council for Commercial Arbitration.

ICC Rules
Rules of Arbitration of the ICC.

CE
Institution of Civil Engineers.

ICSID
International Centre for the Settlement of Investment Disputes.

ICSID Convention
The Convention on the Settlement of Investment Disputes between States and
Nationals of Other States, 1965.

JcT
Joint Contracts Tribunal.

LCIA
London Court of International Arbitration.

LCIA Rules
LCIA Arbitration Rules.

LMAA
London Maritime Arbitration Association.

Lugano Convention
Convention of September 16, 1988 on jurisdiction and the enforcement of judg-
ments in civil and commercial matters. Its effects are materially the same as the
Brussels Convention and it governs issues of jurisdiction and enforcement
between the European Union member states and the European Free ‘Trade
Association countries other than Liechtenstein (namely Iceland, Switzerland and
Norway).

Merkin
Robert Merkin, Arbitration Law (LLP, 1991).
XVill Abbreviations

Model Law
The UNCITRAL Model Law on International Commercial
Arbitration.

Mustill and Boyd

Michael Mustill and Stewart Boyd, Commercial Arbitration (2nd edn, 1992), as
supplemented by a 200] Companion (Butterworths, 2001).

NEMA guidelines
Guidelines, laid down by the House of Lords in BTP Tioxide Ltd v Pioneer
Shipping Ltd, “‘The Nema”’ [1982] A.C. 724, for appeals from arbitration awards to
the courts.

New York Convention

The New York Convention on the Recognition and Enforcement of Foreign
Arbitral Awards of 1958.

Redfern & Hunter

Alan Redfern, Martin Hunter, Nigel Blackaby and Constantine Partasides, Law
and Practice of International Commercial Arbitration (4th edn, Sweet & Maxwell,
2004).

RIBA
Royal Association of British Architects.

RICS
Royal Institution of Chartered Surveyors.

RSC
Rules of the Supreme Court of England and Wales now largely replaced by the
CPR:

UNCITRAL
United Nations Commission on International Trade Law.

UNCITRAL Rules
Arbitration Rules of the United Nations Commission on International Trade Law,
1976.

WHITEBOOK
The CPR and Practice Directions, with Commentary, contained in two vol-
umes.
 TABLE OF CASES

A v B [2006] EWHC 2006 (Comm) ...... 2-105, 2-106, 4-144, 5-072, 6-052, 7-004, 7-011
7-013, 7-024, 7-025, 7-028, 7-030, 7-037, 7-055, 7-060, 7-183,
7-184, 8-051, 8-199
Av BYCostsy (2007) E WHE S4( Comimy /c..scassecstesssasee 2-106, 7-019, 7-022, 8-209
ACs VOCS) 82 lovd « Rep, 160" ODI COMMS esac et ct 7-042
SOB COL TV Sol eleC) ea settee emer ae aire ce ase ee ee ee 2-079
A Cameron v John Mowlem & Co, [1990] 52 B.L.R. 24, CA uw... 2-034, 6-002, 8-011
ABB AG vy Hochtief Airport GmbH [2006] EWHC 388; [2006] 1 All E.R. (Comm)
529; [2006] 2 Lloyd’s Rep. 1, QBD (Comm) ... 5-050, 6-032, 6-082, 7-167, 8-073,
8-080, 8-083, 8-095, 8-112
ABB Lummus Global Ltd v Keppel Fels Ltd (formerly Far East Levingston
Shipbuilding Ltd) [1999] 2 Lloyd’s Rep. 24, QBD (Comm) ... 2-095, 2-101, 2-103,
5-063, 7-066, 7-143, 7-154, 7-170
ABCI (formerly Arab Business Consortium International Finance & Investment
Co) v Banque Franco-Tunisienne [2002] 1 Lloyd’s Rep. 511; [2002] I.L.Pr. 31,
© BIDE Conan) regener cece cen ccs ae ener Maen eae teen ein» 8-005
AIG Capital Partners Inc v Kazakhstan [2005] EWHC 2239; [2006] 1 W.L.R. 1420;
[2006] 1 All E.R. 284; [2006] 1 All E.R. (Comm) 1; [2006] 1 Lloyd’s Rep. 45,
OBO Comm ter eer ee ee en ee 8—045, 8-049
AIG Europe SA vy QBE International Insurance Ltd [2001] 2 All E.R. (Comm) 622;
[2001] 2 Lloyd’s Rep. 268; [2001] C.L.C. 1259; [2002] Lloyd’s Rep. LR. 22,
OBO Comin) een eee ee cee ee ree An pe a Red, See Rae Se 2-065
AIG Europe (UK) Ltd v Ethniki; sub nom. AIG Europe (UK) Ltd v Anonymous
Greek Co of General Insurances; Anonymous Greek Co of General Insurances
v AIG Europe (UK) Ltd [2000] 2 All E.R. 566; [2000] 1 All E.R. (Comm) 65;
[2000] C.L.C. 446; [2000] I.L.Pr. 426; [2000] Lloyd’s Rep. I.R. 343, CA (Civ
DDE eek eae cee hee rah tel Nec eek, WL a Pek CA te a Ree a ea oe 2-047
NE EShalines ives |) 99a lblovdkseRepeo2 OB DaCXdimlliy) Resse eee 7-206
A/S D/S Svendborg v Akar; sub nom. Maersk Sealand v Akar [2003] EWHC 797,
COBIDAGonna ee cts Th oie Gace tartans oh tee acts oe nace ealetentes 7-019
A/S Det Dansk Franske Dampskibssel vyCompagnie Financiere D’Invetissements
Transatlantiques SA (The Himmerland) [1965] 2 Lloyd’s Rep. 353, QBD
(COLLIE) Mie tats Mee aera at mete eae OMe c oat ae need ae eae cee ee 5-004, 5-007
ASM Shipping Ltd v Harris [2007] EWHC 1513 (Comm), The Times, August 6,
2007 MOBDE (Gomi) eerie eee eae 1-017, 4-115, 4-119, 7-124, 7-127
ASM Shipping Ltd of India v TTMI Ltd of England [2005] EWHC 2238 (Comm);
[2006] 2 All E.R. (Comm) 122; [2006] 1 Lloyd’s Rep. 375; [2006] 1 C.L.C. 656,
QBD (Comm) .... 4-110, 4-111, 4-114, 4-118, 4-120, 4-122, 4-125, 4-128, 7-113,
7-124, 7-127, 8-072, 8-088, 8-105, 8-110, 8-111, 8-114
ASM Shipping Ltd of India vyTTMI Ltd of England (Permission to Appeal)
[2006] EWCA Civ 1341; [2007] 1 Lloyd’s Rep. 136; [2007] C.P. Rep. 5; [2006]
ZAG GAT Ga Cia Div eRe ance eee tact ene oneness: 7-201, 8-118, 8-159
AT&T Corp v Saudi Cable Co [2000] 2 All E.R. (Comm) 625; [2000] 2 Lloyd’s
Rep, 1275/2000] GLE. 1309; (2000) B-L.R: 293; CAN(CGiv Div) ..3.5 4-051, 4-109,
4-112, 4-116, 4-127, 7-112
AWG Group Ltd (formerly Anglian Water Plc) vy Morrison; sub nom. Morrison v
AWG Group Ltd (formerly Anglian Water Plc) [2006] EWCA Civ 6; [2006] 1
NVA Resa 20 06 MAREE 67, GAe(CivaDiv) eeswmernteeens 4-114, 4-117, 4-123
SOs Table of Cases

AXA Re v Ace Global Markets Ltd [2006] EWHC 216; [2006] Lloyd’s Rep. LR.
6565 BIOs (Gomi) x eimecccssceee ce tarieiee apes tee ee eae oe 2-027, 7-149
Abdullah M Fahem & Co v Mareb Yemen Insurance Co [1997] 2 Lloyd’s Rep. 738,
CUBIDY (Crean) Reeeeererchce setter ert a sactsrnce roche Minter dicen Arcagsie raat acanancnaa a noroeesaies 2-004
Absolute Rentals Ltd vyGencor Enterprises Ltd (2001) 17 Const. L.J. 322, QBD
(CGY ross seh Sa Scand we eS ee ces RN a ee ite Cae capes bare ner ae 2-034
Abu Dhabi Gas Liquefaction Co v Eastern Bechtel Corp; Eastern Bechtel Corp and
Chiyoda Chemical Engineering & Construction Co Ltd v Ishikawayima-
harima Heavy Industries Co Ltd; Bechtel Corp v Ishikawajima Harima Heavy
Industries Co Ltd [1982] 2 Lloyd’s Rep. 425; [1982] Com. L.R. 215; (1982)
De lanes Cause nee oT cen Aree aCe eC 3-050
Abu Dhabi Investment Co v H Clarkson & Co Ltd [2006] EWHC 1252; [2006] 2
Lloyd’s Rep. 381, QBD (Comm) .....sccssseeessseee-s 2-097, 7-024, 7-035, 7-048, 7-055
Action Navigation Inc v Bottiglier1 di Navigatione SpA (The Kitsa); sub nom.
Action Navigation Inc v Bottigliere Navigation SpA [2005] EWHC 177;
[2005] Wloydis Rep, 4324/2005) IG aeGals3. OBDs (Conan) secs. 6-032
Aectra Refining & Marketing Inc v Exmar NV (The New Vanguard and The
Pacifica) [1994] 1 W.L.R. 1634; [1995] 1 All E.R. 641; [1995] 1 Lloyd’s Rep.
TOW FCA (Cave Din, pct eess escent ia. a cceran ee am 6-016
Aggeliki Charis Compania Maritima SA v Pagnan SpA (The Angelic Grace) [1995]
1 Lloyd’s Rep. 87, CA (Civ Div) .......... 2-004, 2-070, 2-075, 2-105, 7-014, 7-015
Agrimex Ltd v Tradigrain SA [2003] EWHC 1656; [2003] 2 Lloyd’s Rep. 537;
(2.003) 15 3 mINGTES|Peal) lesSIS
@ (Comm) aes tee eee 4-059, 6-056, 6-074
Agromet Motoimport Ltd vyMaulden Engineering Co (Beds) Ltd [1985] 1 W.L.R.
OZ M9 S5]] ar Ale SRS OryOES1D)aearets weet st eee ee eres, 8-017
Ahad v Uddin [2005] EWCA Civ 883; (2005) 149 S.J.L.B. 772, CA (Civ Div) .... 7-043
Aiden Shipping Co Ltd v Interbulk Ltd (The Vimeira) (No.2) [1986] A.C. 965;
[1986] 2 W.L.R. 1051; [1986] 2 All E.R. 409; [1986] 2 Lloyd’s Rep. 117; (1986)
18.065. 5429. Els Pe See eee oo 8 ye, RE oe oe 5-051, 6-146
Aiglon Ltd v Gau Shan Co Ltd; L’Aiglon SA vy Gau Shan Co Ltd [1993] 1 Lloyd’s
IRsyoy WOE MOOR BM Cale,(Cr,SAE (O1BIDY (Cros th)) 55 cgeeneececeos trees eres eax 7-195, 8-006
Air India Ltd v Caribjet Inc [2002] 2 All E.R. (Comm) 76; [2002] 1 Lloyd’s Rep.
3142 OBIO. (Conn) pi te teen nts Ae Sed Se ee Ve ee 8-009
Akai Pty Ltd v People’s Insurance Co Ltd [1998] 1 Lloyd’s Rep. 90; [1997] C.L.C.
HEXU|CONE I Pie, Ak, (COUBIDM (Crosman)! ohesescncassaneysochenecaugnavieeeeesnascne/eeeneesien 7-014
Al-Hadha Trading Co vy Tradigrain SA [2002] 2 Lloyd’s Rep. 512, QBD (Merc) ..... 6-170
Al-Midani v Al-Midani; Al-Midani vy Kayal [1999] 1 Lloyd’s Rep. 923; [1999]
Cl, CP904 FORD (Cominny) yet escreee see eee keee 2-065, 8-002
Al-Naimi (t/a Buildmaster Construction Services) v Islamic Press Agency Inc; sub
nom. Al-Naimi (t/a Buildmaster Construction Services) y Islamic Press
Services Inc [2000] 1 Lloyd’s Rep. 522; [2000] C.L.C. 647; [2000] B.L.R. 150;
(2000) 2 T-C_L.R. 499; 70 Con. L.R. 21, CA (Civ Div) ... 7-025, 7-027, 7-030, 7-031,
7-032, 7-033, 7-036, 7-040, 7-049, 7-055
Albany Marine Inc v South Loyal Shipping Inc (The Ville de Titana) [1994] 1
loys Rep S414 O BW s(Commni) aad 4. bees ek ee ee See 5-222
Albon (t/a NA Carriage Co) y Naza Motor Trading Sdn Bhd [2007] EWHC 665
(Ch); [2007] 2 All E.R. 1075; [2007] 2 Lloyd’s Rep. 1, ChD ...... 7-011, 7-025, 7-030,
7-032, 7-046, 7-055, 7-058, 7-060
Alfred C Toepfer International GmbH v Molino Boschi Srl [1996] 1 Lloyd’s Rep.
SLOP 990) GeL.C. 738: (1997) 1.1L.Pe. 133, OBD (Gomm) st. Aal..tth hol 2-105
Alfred C Toepfer International GmbH v Societe Cargill France; sub nom. Toepfer
International GmbH v Societe Cargill France [1998] 1 Lloyd’s Rep. 379;
Pee eGWAS OS GA CIV IDI) trace tiie renee eo inae haere 2-022, 2-027, 2-105
Alfred McAlpine Construction Ltd vyRMG Electrical [1998] A.D.R.L.J. 33 ....... 2-047
Alfred McAlpine Construction Ltd v Unex Corp, [1994] 70 B.L.R. 26; [1994]
NGS 16 8CA (Civ Div)... eiok eid. Beh tei ere Me FR, ae 3-015, 6-184
 Table of Cases XX1

Ali Shipping Corp v Shipyard Trogir [1999] 1 W.L.R. 314; [1998] 2 All E.R. 136;
[1998] 1 Lloyd’s Rep. 643; [1998] C.L.C. 566, CA (Civ Div) ..... 5-182, 5-183, 5-187,
5-188, 5-189, 5-190
Allianz Versicherungs AG v Fortuna Co Inc (The Baltic Universal); sub nom.
Versicherungs AG v Fortuna Co Inc [1999] 1 W.L.R. 2117; [1999] 2 All E.R.
625; [1999] 1 Lloyd’s Rep. 497; [1999] C.L.C. 258, QBD (Comm) .............. 5-022
Allied Marine Transport v Vale do Rio Doce Navegacao SA (The Leonidas D); Vale
do Rio Doce Navegacao SA v Ocean Freighters Corp [1985] 1 W.L.R. 925;
[1985] 2 All E.R. 796; [1985] 2 Lloyd’s Rep. 18; (1985) 82 L.S.G. 2160; (1985)
ZAI LA alice CANN CANAL) Ree tin ked debae dea recahaead cokes ee hiceocx anata ae 5-229
Allied Vision Ltd vy VPS Film Entertainment GmbH [1991] 1 Lloyd’s rep B92
OBDi(Gomna) see deere 2-016, 2-073, 2-105, 5-064, 5-069, 7-143
Almare Societa di Navigazione SpA v Derby & Co Ltd (The Almare Prima) [1989]
Pe Wlovadts RepesiOn@ By (Commi eee ete eee eee 2 eee: 2-004, 2-073
Alphapoint Shipping Ltd v Rotem Amfert Negev Ltd (The Agios Dimitrios)
[2004] EWHC 2232; [2005] 1 Lloyd’s Rep. 23, QBD (Comm) .................65 8-151
Amalgamated Metal Corp v Khoon Seng Co [1977] 2 Lloyd’s Rep. 310, HL ...... 5-090
Amec Civil Engineering Ltd v Secretary of State for Transport [2005] EWCA Civ
2OFA2005] I WARS 23393 (2005) B:L-Ry 227; 101 Cony LR. 26: (2005) 21
Const. L.J. 640; [2005] 12 E.G. 219 (CS.); (2005) 102(20) L.S.G. 30, CA (Civ
IBY2) coe tercrcrtccaanendhetuacert
donbbate ces.bloc Rate ene Ree eeeeee 2-002, 2-033, 5-003, 8-071
American International Specialty Lines Insurance Co vy Abbott Laboratories [2002]
EWHC 2714; [2003] 1 Lloyd’s Rep. 267; [2004] Lloyd’s Rep. I.R. 815, QBD
(Comin) pres eaeneh: He, ie, BAe. certs. eee Re Benen ed ee 2-047
Anangel Peace Compania Naviera SA v Bacchus International Commerce Corp
(The Anangel Peace) [1981] 1 Lloyd’s Rep. 452, QBD (Comm) ......... 5-094, 6-076
Andre et Cie SA v Marine Transocean Ltd (The Splendid Sun) [1981] Q.B. 694;
[1981] 3 W.L.R. 43; [1981] 2 All E.R. 993; [1981] 2 Lloyd’s Rep. 29; [1981]
(Comm, Igy Woe (GICYonWyWHASY Shh S55 (CAN (Cia III) acoso utcocobedoatiedpddensoueceoaeacee 5-229
ANGTE Wonca redshvawe 2000] Baca Omerane mueneners. ceeteectete: ee tetieeuneen atte ce 4-058
Angelic Grace, The. See Aggeliki Charis Compania Maritima SA v Pagnan SpA
(The Angelic Grace)
Anglia Oils Ltd vyOwners and/or Demise Charterers of the Marine Champion
(ZO02TRENVETCS24 017-5 OBR (CAciality, ieee ere eee ene eee eee cee 2-012, 7-025
Annefield, The. See Owners of the Annefield vy Owners of Cargo Lately Laden on
Board the Annefield
AnonkEH63) aA Bay SukidwaelVestoul spon meraeemaie rete eee 5 oe etree = Aten, Ee 1-008
Anonymous Greek Co of General Insurances v AIG Europe (UK) Ltd. See AIG
Europe (UK) Ltd v Ethnik
Antaios Compania Naviera SA v Salen Rederierna AB (The Antaios) [1985] A.C.
191; [1984] 3 W.L.R. 592; [1984] 3 All E.R. 229; [1984] 2 Lloyd’s Rep. 235;
(1984) 81 L.S.G. 2776; (1984) 128 S.J. 564, HL ... 1-015, 1-050, 8-137, 8-138, 8-160
Antclizo Shipping Corp v Food Corp of India (The Antclizo) [1992] 1 Lloyd’s Rep.
Sfapote, Cova (shia DYRY) PRSew ay ede Rien ne ae Mee Ren et ee OR apes eect 6-125
Apis AS v Fantazia Kereskedelmi KFT (No.1) [2001] 1 All E.R. (Comm) 348, QBD
(COMI) Mien dete ete Marea ee sete eae ON een en, cama eeseeR Esa: 8006, 8-009
Arab African Energy Corp v Olie Producten Nederland BV [1983] 2 Lloyd’s Rep.
AO A983 iCom eRe 95. OBI (Gomam) eae meeesteecte seeteeerctec ssaee ae res 2-063
Arab Monetary Fund v Hashim (No.3) [1991] 2 A.C. 114; [1991] 2 W.L.R. 729;
[19ST AME RetS7 11999) BICC. 118051991) 3555 Ja: SLi lan.tes 3-039
Arab National Bank v El-Abdali [2004] EWHC 2381; [2005] 1 Lloyd’s Rep. 541,
QBD (Comm) .... 1-040, 2-100, 2-101, 2-102, 7-148, 7-150, 7-152, 8-089, 8-099,
8-113
Arab National Bank v Registrar of Companies [2005] EWHC 3047, Ch D .......... 6-072
Arbitration between Hohenzollern Actien Gesellschaft fur Locomotivban and the
Gey omLondom Gontiach Gopi Re (1886) 54h, 596) te. Nett ated d ates 2-077
XXli Table of Cases

Arbitration between the Owners of the Steamship Catalina and the Owners of the
Motor Vessel Norma, Re (1938) 61 Ll. L. Rep. 360, KBD ........... ee. 4-108
Arduina Holdings BV vy Celtic Resources Holdings Ple [2006] EWHC 3155
(Comm) «OB (Gonam) .a72e22.. ok 0. mils th SNe ead 8082, 8-085, 8-110
Arenson v Arenson. See Arenson v Casson Beckman Rutley & Co
Arenson vy Casson Beckman Rutley & Co; sub nom. Arenson v Arenson [1977]
A.C. 405; [1975] 3 W.L.R. 815; [1975] 3 All E.R. 901; [1976] 1 Lloyd’s Rep.
L/D 975) LO {See O ay ss etetee cere tee she seem 1-012, 2-029, 2-031,4-004
Argonaut Insurance Co vy Republic Insurance Co [2003] EWHC 547, QBD
CO hi) ee ee en ern me Cree, rd fees let. aS J 4-110, 4-124
Armar Shipping Co v Caisse Algerienne d’Assurance et de Reassurance (The
Armar) [1981] 1 W.L.R. 207; [1981] 1 All E.R. 498; [1980] 2 Lloyd’s Rep. 450,
GAUGCiN, Div) ee Ra A a ED 2 RO Bree 2-104
Anmuitagery Walkers (1855) :2idkayiGcs Ji 2s gersnnessnetttentent
1se-ceeenoc eerseheanat eesti 6-100
Arnold v National Westminster Bank Plc (No.1) [1991] 2 A.C. 93; [1991] 2 W.L.R.
1177; (1991) 3 AER: 415 (199 1)162 Pr& CAR. 490; [1991] 2°. GALER® 109;
(1991 SOEsGe 57541990 ME Ge 4 95(EsS))3GOO) MIS SiS:|SSve eile ecco 6-176
Ascot Commodities NV v Olam International Ltd [2002] C.L.C. 277, QBD
(Co trata) ME A a ds teh ds Sore a ee Re SS tere se ws 6-032, 6-082, 8-082
Asghar v Legal Services Commission [2004] EWHC 1803; The Times, August 5,
2004 Ch AD ete ee os cote tec aecewnstew 2-004, 2-070, 2-075, 2-080, 7-036, 7-041
Ashmore v Corp of Lloyd’s [1992] 1 W.L.R. 446; [1992] 2 All E.R. 486; [1992] 2
BloydistReps 159 (1992); 13ORS \ELAB eM Se aicl mee eek cee eee eee A2-050
Ashville Investments Ltd v Elmer Contractors Ltd; sub nom. Elmer Contractors
Ltd v Ashville Investments Ltd [1989] Q.B. 488; [1988] 3 W.L.R. 867; [1988]
2, AVIS RY 2577 [98802 Lloydis Repy 73 (Note); (1987), su@onstaaiaye 93;
(SSS) MS2ES als 5 Sa GAn(CivalDix, eee 1-033, 2-070, 2-075, 2-076, 2-077, 2-078,
2-079, 2-081, 6-114
JNGforell ve wstenaon Coruna PIMA WEIS WIS? 03.8 Bescaes enacaysncasua dc neneasts maasectsodeouecash see hase sectsaia: 3-018
Assimina Maritime Ltd v Pakistan National Shipping Corp (The Tasman Spirit)
[2004] EWHC 3005; [2005] 1 All E.R. (Comm) 460; [2005] ! Lloyd’s Rep. 525;
1200 5i|e2) GGs 4485 OB (Comm) hac... 7-197, 7-192, 7-193, 7-203, 7-204
Associated Electric & Gas Insurance Services Ltd vy European Reinsurance Co of
Zurich [2003] UKPC 11; [2003] 1 W.L.R. 1041; [2003] 1 All E.R. (Comm)
253; [2003] 2 C.L.C. 340; (2003) 100(11) L.S.G. 31; (2003) 147 S.J.L.B. 148m,
PCy (BGT) utea hare. eee ees 1-010, 5-182, 5-183, 5-188, 6-163, 6-176, 8-015
Astel-Reiniger Joint Venture v Argos Engineering and Heavy Industries Co Ltd
(1995 J AWD TAR SASS stein AE SR. ob teers en ee ak hen at ena Ae ete 2-053
Astrasinsuranceaymo phere rake \Viavaliee 200002 2: eeenceteeh cess neesst emer titt eee 8-067
Astro Venturoso Compania Naviera y Hellenic Shipyards SA (The Mariannina)
(MOSS eltloydiseRepy 12a GAs (Civ Diy) Hemet se rere acerte tect meee eee 2-093
Astro Vencedor Compania Naviera SA of Panama v Mabanaft GmbH (The Dam-
ianos) [1971] 2 Q.B. 588; [1971] 3 W.L.R. 24; [1971] 2 All E.R. 1301; [1971]
P BloydissReps02.s(Lo 71) aPSeSiaZ84KG@iAn (Gin Div) ares canteen 2-068, 2-075
Athletic Union of Constantinople (AEK) v National Basketball Association [2002]
1 All E.R. (Comm) 70; [2002] 1 Lloyd’s Rep. 305, QBD (Comm) ............... 2-016
Atlanska Plovidba v Consignaciones Asturianas SA (The Lapad) [2004] EWHC
1273; [2004] 2 Lloyd’s Rep. 109;
Atlantic Underwriting Agencies Ltd and David Gale (Underwriting) Ltd v Com-
pania di Assicurazione di Milano SpA [1979] 2 Lloyd’s Rep. 240, QBD
(Comm )wds ee sners chee ie RS YA he er ee Aerie: 2-093
Atlas Levante Linie AG y Gesellschaft Fuer Getriedehandel AB (The Phonizien)
LOGO) ME lay distepants 0 @ 1p s(Commn) erro erceeeree nee sessereeeeee ea 2-056
Attorney General of New Zealand v Mobil Oil N2 Ltd [1989] 2 N.Z.L.R. 649 .... 1-037
Aughton Ltd (formerly Aughton Group Ltd) vyMF Kent Services Ltd , 57 B.L.R.
Leo. Cony leRe 60 CAN (Gi Div) eeeee A2-09, 2-046, 2-047, 2-053, 2-056
 Table of Cases XXil

Autothreptic Steam Boiler Co Ltd and Townsend Hook & Co’s Arbitration, Re
Seo ee StU BD 82 ORD eS tas ular svent We hl 6-130, 6-131
Azov Shipping Co v Baltic Shipping Co (No.1) [1999] 1 All E.R. 476; [1999] 1
Lloyd's Rep 68; [1998](C.1.C),1240s-QBD(Gomin) iit. .ccsicsetedeceoneatele 5-064, 8-067
Azov Shipping Co v Baltic Shipping Co (No.2) [1999] 1 All E.R. (Comm.) 716;
p1999), 2 Lioyd’s Rep,.39: [1999] C.L.C. 624, OBDi(Gomm) 4.uectsae 4.ak 8-206
BEA Hotels NV v Bellway LLC [2007] EWHC 1363 (Comm), QBD (Comm) ... 2-112,

BLCT (13096) Ltd v J Sainsbury Ple [2003] EWCA Civ 884; [2004] 1 C.L.C. 24,
(ZOU 2B PS CRs 3: (2003) 147 S| LB Shan. (Gay, Div) nc... 1-039, 8-149
BMBF (No.12) Ltd v Harland & Wolff Shipbuilding & Heavy Industries Ltd
[2001] EWCA Civ 862; [2001] 2 All E.R. (Comm) 385; [2001] 2 Lloyd’s Rep.
DAE NVAUONIMG AUK CONSV25sCr (Cine IDK) gecebn, Aaneaceenpbkdeoseececoadas: 5—087, 6-020, 8-164
BNP Paribas v Deloitte & Touche LLP [2003] EWHC 2874; [2004] 1 Lloyd’s Rep.
233; [2004] 1 C.L.C. 530; [2004] B.L.R. 90; (2003) 153 N.L.J. 1841, QBD
(COTTA) See een Rees ae rs crrenihche hee dich tn anal maa nl Soedh clan c eaten Reese SNE 7-204
Babanaft International Co SA v Avanti Petroleum Inc (The Oltenia); sub nom.
Babanaft International Co SA v Avant Petroleum Inc [1982] 1 W.L.R. 871;
[1982] 3 All E.R. 244; [1982] 2 Lloyd’s Rep. 99; [1982] Com. L.R. 104; [1983]
i Gx @q3655 (O82) 7/9: G:1953 5(1982) 1261s esol GAt(CivalDiv) ea Oa 074s
7-172
Bakwin Eire International Trading Co Inc v Sothebys, November 22, 2005, QBD .... 7-054
Bandwith Shipping Core vy Intaari (A Firm) [2006] jeu 2532, QBD (Comm) . . 4-106,
5-050, 6-082, 8-073, 8 080, 8-085
Bangladesh Chemical Industries Corp v Henry Stephens Shipping Co and Tex-
Bilan Shipping Co (The SLS Everest) [1981] 2 Lloyd’s Rep. 389; [1981] Com.
IDAs dT heeBila OM(Canal ONAN ace irk Ais Ages ciccceiic hae bach Goh otc eas cla napacaeaceee 2-093
Bank Mellat v GAA Development Construction Co Ltd [1988] 2 Lloyd’s Rep. 44;
i rekeHpe) ARIE IRS GLO). (O%E)Be(Graseav
ny) ach: taomoehacs duooosocaqshootibed sposoniecaooddeooooncndoed 6-050
Bank Mellat v Helleniki Techniki SA [1984] Q.B. 291; [1983] 3 W.L.R. 783; [1983]
SAIS Ree 2 8) L983) CometsRe2 735 (L983) seNeee e975 (1983) 127 Sale
OLS OAR (Cig iv: iit eae tend tame etter mt econ ogee aro eis 2-100, 2-102, 5-057
Bankers Trust Co v PT Jakarta International Hotels and Development [1999] 1 All
Re(Conim) S549 99 se Lloydis' Repn 90" @BDi(Comim) leeks eee eee 7-O15
Bares vebraithwaite and iNixonn liso) ible SoiNh SOQk reste ste eectee eee reeere 4064
Baron v Sunderland Corp [1966] 2 Q.B. 56; [1966] 2 W.L.R. 363; [1966] 1 All E.R.
SAR TOPICA GENE colons (Ios) WO etal NWA (GvAN 7A tant cacariita encod adect.Aosbouceeepbetads 2-017
Bay Hotel and Resort Ltd v Cavalier Construction Co Ltd [2001] UKPC 34, PC
AGTCl) becepcpeerst ect atshiante tana oacs oath oactetes ee tee 1-051, 2-061, 2-102, 3-047, 6-029, 6-032
Baytur SA v Finagro Holdings SA [1992] Q.B. 610; [1991] 3 W.L.R. 866; [1991] 4
PNUD Rem 2O S992 ele lovdsaineprel 47m (LOOM) miSomoa) seals”. re (Civ
IBShi) | eae ih reer senor ena nae crear 3-008, 3-017, 3 018, 33-020, 3-031
Beattie viESE Beattie ltd (938) Kehs 708: 1[19333 All ER 2145, GAGS eee ee 2-051
Beaufort Developments (NI) Ltd v Gilbert-Ash (NI) Ltd [1999] 1 A.C. 266; [1998]
2 W.L.R. 860; [1998] 2 All E.R. 778; [1998] N.I. 144; [1998] C.L.C. 830;
(1998) 14 Const. L.J. 280; [1998] E.G. 85 (CS.); (1998) 95(24) L.S.G. 33;
(1998) 95(31) L.S.G. 34; (1998) 148 N.L_J. 869; (1998) 142 S.J.L.B. 172; [1998]
INPGR 3 A998 IN PES ON AEDT NID)) Bese, Se ereee steer asurwee stu tones caved cucesescessscsey 2-085
Becker Sangemtadl Sl) e4 Ma tmte2o 2iieee satatessetieccsat. diansdenn.doacttats sates panereeceeaeearetltn 6-059
Beck Peppiatt Ltd v Norwest Holst Construction Ltd [2003] EWHC 822; [2003]
BARE BIGYOBD (GCG) Heart ers catteacies nec teeuee tretcaene ss tat, esbesetnadee acece eet 5-003
Beegas Nominees Ltd v Decco [2003] EWHC 1891; [2003] 3 E.G.L.R. 25; [2003]
43 E.G. 138; [2003] 33 E.G. 63 (C.S.); (2003) 153 N.L.J. 1271; (2003) 147
S Jeb 1086- [2003 UNCPCp lO 3.CRD fod kt tivate-ctactud adeg.tletleleemetaeen ato 7-167
Belgravia Property Co Ltd v S&R (London) Ltd [2001] C.L.C. 1626; [2001] B.L.R.
4747 (200 sos onsty Le 36, OBI) CU ECC) gia soascernnc-nasacnsadeneenntese 6-182, 7-157
XXIV Table of Cases

Ben Barrett & Son (Brickwork) Ltd vy Henry Boot Management Ltd [1995]
Tes 1451026, QB) (OR) tach. AA Aiaadeoe ne coe tee 2-047, 2-053, A2-009
Ben Line Steamers Ltd vy Compagnie Optorg of Saigon (1936) 42 Com. CAs. 113 .... 8-168
Benaim (UK) Ltd v Davies Middleton & Davies Ltd (No.2) [2005] EWHC 1370
(TEE) 102eGon ER OBD(iGG) Ranma. » 5-042, 5-052, 6-083, 6-170, 7-119
Benvenutl i Bontantev, Gomeou(hnrance)mesesree cases: hte steno seer eee one 8050
Berkshire Senior Citizens Housing Association y McCarthy E Fitt Ltd; Berkshire
Senior Citizens Housing Association vy National Westminster Bank Ltd (Trus-
tees of the Estate of Anthony Cripps, Deceased), 15 B.L.R. 27, CA (Civ
BRYA) EASe hac acanwisnaiseened Maced te Morse aa ee ceca gag aa ee ae atta denn 7-048
Bernuth Lines Ltd v High Seas Shipping Ltd (The Eastern Navigator) [2005]
EWHC 3020; [2006] 1 All E.R. (Comm) 359; [2006] 1 Lloyd’s Rep. 537; [2006]
1 C_L.C. 403; [2006] C.I.L.L. 2343; (2006) 156 N.L_J. 64, QBD (Comm) ... 5-023,
5-029, 5-107, 7-148, 7-151, 8-053, 8-079
Best Beat Ltd v Rossall [2006] EWHC 1494; [2006] B.P.L.R. 1357; [2006] C.I.L.L.
DSA opCNM) oyceed bee new ecient eae oe eee 7-039
Bevan Ashford v Geoff Yeandle (Contractors) Ltd (In Liquidation) [1999] Ch. 239;
[1998] 3 W.L.R. 172; [1998] 3 All E.R. 238; 59 Con. L.R. 1; [1998] 2 Costs
L.R. 15; (1998) 95(16) L.S.G. 27; (1998) 148 N.L.J. 587; (1998) 142 S.J.L.B.
fla 99 SiN PG 692 Chylmts£ caVet Cee ee Pago eh Pe ee Lene... 6-131
Birse Construction Ltd v St David Ltd (No.1) [2000] B.L.R. 57; 70 Con. L.R. 10,
GAA (Gig Diy) Me Fe oe ret, res a er ee ee 2-054, 7-025, 7-036
Birtley & District Cooperative Society Ltd v Windy Nook and District Industrial
Cooperative Society Ltd (No.1) [1959] 1 W.L.R. 142; [1959] 1 All E.R. 43;
(LOS) SO3eS Jali 2eOBD, sxe eciicks coe aera ees ree ee 8016
Birtley & District Cooperative Society Ltd y Windy Nook and District Industrial
Cooperative Society Ltd (No.2) [1960] 2 Q.B. 1; [1959] 2 W.L.R. 415; [1959]
1 AMIE RE 435) [959) SA EARS 62891959) al03 Sue 240 NOB Des = see 8-018
Bisichi Mining Ltd v Bass Holdings Ltd [2002] EWHC 375; [2002] L. & TR. 30;
[2002] 2 E.G.L.R. 4; [2002] 18 E.G. 159; [2002] 9 E.G. 218 (C.S.), Ch D... 1-015,

Bjornstad, Re; sub nom. Ouse Shipping Co Ltd, Re [1924] 2 K.B. 673; (1924) 19
TL MES RED BIEL GA nacitn eek Eercobatals le ust enn tert. cme bel OS 25 ve} Shaee BP 7-104
Black Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1981]
2 Lloyd’s Rep. 446; [1981] Com. L.R. 61, QBD (Comm) ....... 2-095, 2-097, 2-099,
2-103
Blackpool BC v F Parkinson Ltd, 58 B.L.R. 85; (1993) 9 Const. LJ. 29.0... 5-023
Blanchard:v Sum Wire: Office (1890), 6 La BRi865. ..cadiat..t. nde cued. hende 4-149
Bland v Russian Bank for Foreign Trade (1906) 11 Com. Cas. 71 .......cccccccceeeeeeee 6-072
Blue Horizon Shipping Co SA vy ED&F Man Ltd (The Aghios Nicolaos) [1980] 1
Lloyd's: Rep ay, all (Cavin) kee he tigek dt JOON OC eA, 6-138
Bolam v Friern Hospital Management Committee [1957] 1 W.L.R. 582; [1957] 2 All
E.Rogl 1S; (1955-95) PN VLAREW; (1957): 10S. Sb7AOBDK. Baker Aa x 4-155
Borgship Tankers Inc v Product Transport Corp Ltd (The Casco) 2005] EWHC
273; [2005] 1 Lloyd’s Rep. 565; [2005] 1 C.L.C. 232, QBD (Comm) ........... 7-070
Bottigliert di Navigazione SpA v Cosco Qingdao Ocean Shipping Co (The Bunga
Saga Lima) [2005] EWHC 244; [2005] 2 Lloyd’s Rep. 1, QBD (Comm) ...... 6-032,
8-083, 8-095, 8-139
Boulos Gad Tourism & Hotels Ltd v Uniground Shipping Co Ltd [2001] W.L.
16769097 QB (Gorm) Ve. has ket eee ete, See Se 5-108, 8-125
Bourgoin SA v Ministry of Agriculture, Fisheries and Food [1986] Q.B. 716; [1985]
3 W.L.R. 1027; [1985] 3 All E.R. 585; [1986] 1 C.M.L.R. 267; (1985) 82
Tesi. S435, CA (Cine Div) ORS. ete dhl tuto EA, PEE ARR a 4-154
raashaw wea Council ||1926)]:Ghis3295 Chip meeeene eee ketene 6-157
Brandeis Brokers Ltd v Black [2001] 2 All E.R. (Comm) 980; [2001] 2 Lloyd’s Rep.
SSOP QB (Comith): 4.dhsiscsiscwtesinakedce
te tere ee eee 4080, 8-151, 8-205
 Table of Cases XXV

Brandeis Intsel Ltd v Calabrain Chemicals Co, 656 F Supp. 1600 .......ccccccccccceeeeee 1-037
Breakbulk Marine v Dateline, unreported, March 19, 1992 .o..0..ccccccccccccccseceeeseeeees A2-065
Bremer Handelsgesellschaft mbH v Westzucker GmbH (No.2); sub nom. Bunge
GmbH v Westzucker GmbH [1981] 2 Lloyd’s Rep. 130; [1981] Com. L.R.
17S (IVAW Pen Sree oy een I MEM. SUE 6-032, 6-062
Bremer Oeltransport GmbH v Drewry [1933] 1 K.B. 753; (1933) 45 LI. L. Rep.
ITSiehlGils ales esate Seiersebaaemethn Ahead tc ner lite ad Fao 6-162, 6-163, 8-015, 8-018
Bremer Vulkan Schiffoau und Maschinenfabrik vy South India Shipping Corp Ltd;
Gregg v Raytheon; sub nom. Bremer Vulcan Schiffbau und Maschinenfabrik
v South India Shipping Corp [1981] A.C. 909; [1981] 2 W.L.R. 141; [1981] 2
All E.R. 289; [1981] 1 Lloyd’s Rep. 253; [1981] Com. L.R. 19; [1981] E.C.C.
151; (1981) 125 SJ. 114, HL .... 1-050, 2-008, 2-047, 2-099, 5-094, 5-224, 5-229,
7-003, 7-056, 8-162
Brightside Kilpatrick Engineering Services v Mitchell Construction (1973) Ltd
(a rolb2olelovdiswRepe49 3g street sn cocan, case ator vee be acc pdacct Mt canes beet 2-053
Bristol Airport Ple v Powdrill; sub nom. Paramount Airways Ltd (No.1), Re [1990]
Ch. 744; [1990] 2 W.L.R. 1362; [1990] 2 All E.R. 493; [1990] B.C.C. 130;
SEO WBC aC, sets UN) Loi) ILS WG, EE Cre (City IDIK)) aes aethoen heen 3-032
British Aviation Insurance Co Ltd, Re [2005] EWHC 1621; [2006] B.C.C. 14,
[2000] sla -Gak-G2 6658. GhsDi(Companiess(Ch) hee. eer nee ee 2-028
British Gas Ple v Dollar Land Holdings Ple [1992] 1 E.G.L.R. 135; [1992] 12 E.G.
ACOs) Sean Peete tats ce cA desee te EteM ot, ence Ame METRES capaci bons pwtceeunssuaiowe 8-155
BP Chemicals Ltd vy Kingdom Engineering (Fife) Ltd [1994] 2 Lloyd’s Rep. 373;
OOS BHERY 113538, Cons LRs 14: (1994) 10 Const J.116,QBD) (OR) re: 6-033,
6-122
Brooke v Mitchell (1840) 6 M. & W. 473; (1840) 9 L.J. Ex. 269 ..... 6-053, 6-065, 6-066
Brown v Llandovery Terra Cotta and Co Ltd (1909) 25 T.L.R. 625 .......... 4-052, 4-054
Browne Vawsern (USO) AStoo G4 ince, eet ostatscsmean noc aceronstes cecee acerca atte none ee 6-068
Brownjandi(Groydon CanaltCowRen (339) 90h. Sab 522 8 ee O1B 9 20a eee 6-086
Bruns v Colocotronis (The Vasso) [1979] 2 Lloyd’s Rep. 412, QBD (Comm) ...... 3-015
Bulfracht (Cyprus) Ltd vy Boneset Shipping Co Ltd (The Pamphilos) [2002]
EWHC 2292; [2002] 2 Lloyd’s Rep. 681, QBD (Comm) ........ 5-050, 5-051, 5-052,
6-082, 8-072, 8-080, 8-114, 8-149
Bulk Oil (Zug) AG vy Trans Asiatic Oil Ltd SA [1973] 1 Lloyd’s Rep. 129, QBD ...... 7-048
Bulk Trading SA v Moeller [2006] EWCA Civ 1294; [2007] 1 Lloyd’s Rep. 61, CA
(Gy DI eee crc cee cesemts nectar eae done eae tou ee ae las Peers Sea 6-090
Bulk Transport Corp v Sissy Steamship Co Ltd (The Archipelagos and The Delfi);
sub nom. Bulk Transport Corp v Ifled Shipping Corp [1979] 2 Lloyd’s Rep.
289% OBI (Comin) peace eee cea hoc eases anche eee ucaens e eee 6-065, 6-066
Bumbesti, The; sub nom. SC Rolinay Sea Star Srl vyOwners of the Bumbesti; SC
Rolinay Sea Star Srl y Compania de Navigatie Maritimie Petromin SA (The
Bumbesti) [2000] Q.B. 559; [2000] 2 W.L.R. 533; [2000] 2 AIL E.R. 692; [1999]
2 All E.R. (Comm) 187; [1999] 2 Lloyd’s Rep. 481; [1999] C.L.C. 1413; (1999)
96(28) 1S: Ge25> (999) 1430S JA Bs 189s OBD CAdinlliy) essa rsserpeee- cers 6-180
Bunge SA v Kruse (No.2) [1980] 2 Lloyd’s Rep. 142, CA (Civ Div) .................. 4-032
Bureau Wijsmuller NV v Owners ofthe Tojo Maru (No.2); sub nom. Owners ofthe
Motor Vessel Tojo Maru v NV Bureau Wijsmuller (The Tojo Maru) [1972]
A.C. 242; [1971] 2 W.L.R. 970; [1971] 1 All E.R. 1110; [1971] 1 Lloyd’s Rep.
SHARE TOIT yeaWSIS WeSP4byt aUEM ante cconceaa acca adiee sesame eee cococanbserbr cbneSo.10odBeboaschoccmse 2-041
Burnardiye Watnwnieht (850) MOR Ose 42308 se. .e2 ct. -ce sie raeseeae ns eee e-areserel tere 8-167
Buttes Gas & Oil Co v Hammer (No.3); Occidental Petroleum Corp v Buttes Gas
& Oil Co (No.2) [1982] A.C. 888; [1981] 3 W.L.R. 787; [1981] 3 All E.R. 616;
PISS Conn, TARAS TIS) 25S JocMIGy TA. cissunccncenetundeonoaesarscrastasedeest 8-052
XXV1 Table of Cases

Cv D [2007] EWHC 1541 (Comm), QBD (Comm) ... 2-060, 2-089, 2-095, 2-096, 2-097,
2-099, 2-101, 2-106, 5-057, 5-072, 6-008, 6-052, 6-166, 6-176,
7-010, 7-011, 7-013, 7-014, 7-015, 7-018, 8-018, 8-041, 8-051,
8-205
CA Venezolana de Navegacion v Bank Line (The Roachbank) [1988] 2 Lloyd’s Rep.
3376 GAN (Give lin westate. aa aeetae ere cae etre aa eat tee ere neta 8-160
CGU International Insurance Plc vy AstraZeneca Insurance Co Ltd [2005] EWHC
2755; [2006] 1 C.L.C. 162; [2006] Lloyd’s Rep. I.R. 409, QBD (Comm) ..... 2-092,
8-128, 8-159
CGU International Insurance Plc vy AstraZeneca Insurance Co Ltd (Permission to
Appeal); sub nom. AstraZeneca Insurance Co Ltd v CGU International
Insurance Plc (Permission to Appeal) [2006] EWCA Civ 1340; [2007] Bus.
L.R. 162; [2007] 1 All E.R. (Comm) 501; [2007] 1 Lloyd’s Rep. 142; [2007]
C.P. Rep. 4; [2006] 2 C.L.C. 441; [2006] H.R.L.R. 43, CA (Civ Diy) .... 7-005, 7-201,
7-201, 8-118
CIB Properties Ltd v Birse Construction Ltd [2004] EWHC 2365 (TCC); [2005]
LE NM Md e225725ol PAOLO flBilLag]RelShs Bale (AN GG) eeoetasaineertaecaeoasald acne he 5—003
CM Van Sullevoldt BY v El Carriers Inc Whe Vimes; July 8, 1982 7.7.0... 2-098
CMA CGM SA vy Beteiligungs KG MS Northern Pioneer Schiffahrtsgesellschaft
mbH & Co [2002] EWCA Civ 1878; [2003] 1 W.L.R. 1015; [2003] 3 All E.R.
330; [2003] 1 All E.R. (Comm) 204; [2003] 1 Lloyd’s Rep. 212; [2003] 1 C.L.C.
141; (2003) 100(9) L.S.G. 28, CA (Civ Div) .... 8-132, 8-134, 8-136, 8-138, 8-142,
8-146, 8-147, 8-152, 8-155
CT Cogstad & Co (The SS Lord) v H Newsum Sons & Co Ltd; sub nom.
Arbitration between Cogstad & Co and H Newsum Sons & Co Ltd, Re [1921]
BINKGS SYA (OPA eh Able Me TNCsoy SIS) BU arse Se case tee ae emake ns edo esee ae 6-078
Calderbank v Calderbank [1976] Fam. 93; [1975] 3 W.L.R. 586; [1975] 3 All E.R.
863(1975) i>) Fanelbaw 1901975) MlLS a9Om Gla (Give Diy) irercotettereec.8 6-158
G@alvente Sa Coranda Wyler Re (S99) ilOG ee le e2SSie setn eee ee eee ee eee es 6-166
Cameroon Airlines v Transnet Ltd [2004] EWHC 1829 (Comm); [2006] T-C.L.R.
FP OBIS (Com) ety en eee ce. eee eee eee 5-050, 6-098, 8-080, 8-082, 8-121
Capital Trust Investments Ltd v Radio Design TJ AB; sub nom. Capital Trusts
Investments Ltd v Radio Design TJ AB [2002] EWCA Civ 135; [2002] 2 All
E.R. 159; [2002] 1 All E.R. (Comm) 514; [2002] C.L.C. 787, CA (Civ Div) ..... 2-070,
2-078, 7-043
Capricorn Inks Pty Ltd v Lawter International (Australia) Pty Ltd [1989] 1 Q.B.
ee, Mee eee eM ee eM Ow Renae cha eee cubaway aeebar cere ec utc ceseocene te CaRee es 2-029
Garsey ve itChesomm (S25) ean ComeO talon (OLS) NGI @2a. eee eee c eee 6-072
Cargill International SA Antigua (Geneva Branch) v Sociedad Iberica de Moltura-
cion SA; Sociedad Iberica de Molturacion SA v Cargill International SA;
SIMSA vy Cargill International SA [1998] 1 Lloyd’s Rep. 489; [1998] C.L.C.
231; (1998) 95(4) L.S.G. 33; (1998) 142 S.J.L.B. 34, CA (Civ Diy) .... 6-029, 6-049
Cargill SRL (Milan) (formerly Cargill SpA) v P Kadinopoulos SA [1992] 1 Lloyd’s
ROD CSL eck net erate nee eet neee an cen komt react een nieh Meee Ree nee Ro Reman 6-003
Carillion Construction Ltd y Devonport Royal Dockyard Ltd [2005] EWCA Civ
1358; [2006] B.L.R. 15; 104 Con. L.R. 1; (2005) 102(47) L.S.G. 26, CA (Civ
1D Derren ee RR cate ne pec nani pecs nactodocc echt RN te ccdelyarasachtimrcendacioe 2-033
Carillion Construction Ltd vy Devonport Royal Dockyard Ltd [2003] B.L.R. 79;
(2003) GM R. oF OB (GE) tet Re tea tte 2-040, 2-041, 5-004
Carlisle Place Investments Ltd vy Wimpey Construction (UK) Ltd, [1980] 15
BUG IR. OOS QBID WS fiscccates afisassi hh ance eee Soe a ETE CEE eae 5-094
Carmel Exporters & Importers Ltd y HE Daniels Ltd (No.2); sub nom. HE
Daniels Ltd v Carmel Exporters & Importers Ltd [1953] 2 Q.B. 242; [1953]
3 W.L.R. 216; [1953] 3 All E.R. 401; [1953] 2 Lloyd’s Rep. 103; (1953) 97 SJ.
ATS QUBIDY ia cesas oesnaisesicas aida kha ea ME EE RR eee ne 6-177
 Table of Cases XXVIl

Carter (t/a Michael Carter Partnership) v Harold Simpson Associates (Architects)

Ltd [2004] UKPC 29; [2005] 1 W.L.R. 919; [2004] 2 Lloyd’s Rep. 512; [2004]
2 C.L.C. 1053; (2004) 101(27) L.S.G. 29; (2004) 148 S.J.L.B. 759, PC (Jam) .... 8-163
Carus-Wilson and Greene’s Arbitration, Re (1887) L.R. 18 Q.B.D. 7, CA... 2-028
Casco, The. See Borgship Tankers Inc v Product Transport Corp Ltd (The
Casco)
Cathiship SA v Allanasons Ltd (The Catherine Helen) [1998] 3 All E.R. 714;
[1998] 2 Lloyd’s Rep. 511; [1998] C.L.C. 1310, QBD (Comm) .......... 5-015, 7-069
Celtic Resources Holdings vy Arduina Holding BV [2006] EWHC 2553 (Comm),
OB (Gomi) wees, ee A RM et Ree RR IS Rts Soe Lee 7-185
Cetelem SA v Roust Holdings Ltd [2005] EWCA Civ 618; [2005] 1 W.L.R. 3555;
[2005] 4 All E.R. 52; [2005] 2 All E.R. (Comm) 203; [2005] 2 Lloyd’s Rep. 494;
[2005] Gale:CP 8214 CAN (Givs Div) ee 1-053, 7-002, 7-005, 7-018, 7-059, 7-179,
7-182, 7-188, 7-189, 7-190, 7-193, 7-194, 7-195, 7-196, 7-201,
8-116, 8-157
Cetelem SA v Roust Holdings Ltd (Application for Further Freezing Order) [2005]
EVEL OUR OBE) 0k ett eceet th Lopieemie Gon cin, MEURRESE Sn Je we Se eee ee 5-075
Ceval Alimentos SA vy Agrimpex Trading Co Ltd (No.1) [1995] 2 Lloyd’s Rep. 380,
OBD (Comm): tietc were s tetera meet eet ae a: area esac tnat ee ee ee 5-049
Ceylon v Chandris [1963] 2 Q.B. 327; [1963] 2 W.L.R. 1097; [1963] 2 All E.R. 1;
[1963] 1 Lloyd’s Rep. 214; (1963) 107 S.J. 316, QBD (Comm) ... 5-049, 6-129, 6-132,
6-151
Chaim Kohn v Sheva Wagschal & Others [2006] W.L. 3854048 0000... 8005
Ghambersiy, Goldthorpe= Restelliv Nye 190M IO IBS 6245 CAV, cereus speeanee. 2-029
Chandris v Isbrandtsen Moller Co Inc [1951] 1 K.B. 240; [1950] 2 All E.R. 618;
(1950) 84 LI. L. Rep. 347; 66 T.L-R. (Pt. 2) 358; (1950) 94 S.J. 534, CA .... 6-112
Channel Island Ferries Ltd v Cenargo Navigation Ltd (The Rozel) [1994] 2 Lloyd’s
Repmloles W994i tGeh7 Gales «Ors>) (Comm) Ree eee 6-136, 6-138, 6-144
Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd; France Manche
SA y Balfour Beatty Construction Ltd [1993] A.C. 334; [1993] 2 W.L.R. 262;
[1993] 1 All E.R. 664; [1993] 1 Lloyd’s Rep. 291; [1993] I.L.Pr. 607; (1993) 137
S.J.L.B. 36; [1993] N.P.C. 8, HL .. 1-050, 2-036, 2-095, 2-100, 7-041, 7-055, 7-189,
A2-012
@happellvaN onthe (SOU PION e252 BD) @ ener cea trees pees aeennen terete sree 7-043
Charles M Willie & Co (Shipping) Ltd v Ocean Laser Shipping Ltd (The Smaro);
George Roussos Sons SA v Charles M Willie & Co (Shipping) Ltd [1999] 1
Lloyd’s Rep. 225; [1999] C.L.C. 301, QBD (Comm) .. 3-018, 3-021, 5-022, 6-002,
6-176, 7-002
Checkpoint Ltd v Strathclyde Pension Fund [2003] EWCA Civ 84; [2003]
lee Sea). Rew2242008)] ees Gabe Rana 2008) sakeGa 1243 (2003i|Fss be Gal2s
(C.S.); (2003) 100(12) L.S.G. 29; (2003) 147 SJ.L.B. 233; [2003] N.P.C. 23,
CAN(Giy Div) hee 5-052, 5-099, 6-030, 6-032, 6-075, 6-076, 6-079, 6-083, 8-081,
8093
Chimimport Plc v G D’Alesio SAS (The Paula D’Alesio) [1994] 2 Lloyd’s Rep.
866 OOF GilaCF 4599 OB (Commies eee es 2-076, 2-078, 5-228 6-027
China Agribusiness Development Corp v Balli Trading [1998] 2 Lloyd’s Rep. 76;
997]: Cale CO1437 OB Da(Comm) i.ee.se eects sees ee eats ene tacte reee 5-093
Christopher Brown Ltd v Genossenschaft Oesterreichischer Waldbesitzer Holz-
wirtschaftsbetriebe GessmbH [1954] 1 Q.B. 8; [1953] 3 W.L.R. 689; [1953] 2
All E.R. 1039; [1953] 2 Lloyd’s Rep. 373; (1953) 97 SJ. 744, QBD .. 4-071, 8-015,
A2-031
Cia Maritima Zorroza SA v Sesostris SAE (The Marques de Bolarque) [1984] 1
Lloyd's: Rep652,{Q BD! (Gong) tits Naess teint Shad 2-016, 2-073, 2-097
Cigna Life Insurance Co of Europe SA NV v Intercaser SA de Seguros y
Reaseguros [2002] 1 All E.R. (Comm) 235; [2001] C.L.C. 1356; [2001] Lloyd’s
Rep tae.28216GBD (Comm ig mecetnnendeutetea- Muaersencesese 2-012, 2-047, 2-055, 7-028
XXVill Table of Cases

City & General (Holborn) Ltd vyAYH Ple [2005] EWHC 2494; [2006] B.L.R. 55,
QBDMUICG I. 2h. RAE SRR eee cae toe reece oe 3-045, 7-096, 7-098, 7-1167
Gityiof Galouttas Phe (1898): 79k SLT RAR oct ence ak reeset ea eertatee semen 3-023
Claire & Co Ltd v Thames Water Utilities Ltd [2005] EWHC 1022; [2005] B.L.R.
S66N ORI RE) A seein’... tk ae RE A Re 8—085, 8-108
Clegg v Dearden. (1848) 12.0.8, 576.17-L.J.O.Be 223. ccvsctvsscsestrasnscecennereeteattoeee 6-178
Clements vyLondon & North Western Railway Co [1894] 2 Q.B. 482, CA .......... 3-005
Coal Authority v Trustees of the Nostell Trust [2005] EWHC 154, QBD (TCC) ..... 8-141
Coastal States Trading (UK) Ltd v Mebro. Mineraloelhandelsgesellschaft GmbH
[1986] eloyd?s Repi465» QBD) (Comm) tee ee ee See 6-123, 8-018
Cobelfret NV v Cyclades Shipping Co Ltd (The Linardos) [1994] 1 Lloyd’s Rep.
PASS OURO (Gri TLY ieee arcane acca rin eer Seaton ttre eh cpt 5 haan rancid 6-085
Gocksew Macclestield (1562):2-Dyer 20" b"Bentoeo sie car.n centenntcntesecncee esee 6-048
Cohen v Baram [1994] 2 Lloyd’s Rep. 138; [1994] 13 E.G. 111, CA (Civ Diy) .... 6-140
Golhins-va Gallinsxul G56) On eave 6 Oi ce cesecee: ere cee cerca ee eer eae 1-008, 2-029
Galiinsew POweH Cl Sone) oR 700 yore ees ot ecee meter rennet hc cccer rere aer eee ene ae 6-178
Collins (Contractors) Ltd vy Baltic Quay Management (1994) Ltd [2004] EWCA
Civ 1757; [2005] B.L.R. 63; [2005] T-C.L.R. 3; 99 Con. L.R. 1; (2005) 102(5)
IporkGee’ oye aha( a1 DVai0 Weta te a ae PM in gh ne eae > 2S a. 5—003
Coltman Precast Concrete Ltd y W&J Simons (Contractors) Ltd, 35 Con. L.R.
UW27Rak0)84 ff(O39 ie ee Se ae eS ae ne re ee te ee ell 2-054, 7-048
Comdel Commodities Ltd v Siporex Trade SA (No.2) [1991] 1 A.C. 148; [1990] 3
W.L.R. 1; [1990] 2 All E.R. 552; [1990] 2 Lloyd’s Rep. 207; (1990) 140 N.L_J.
pope glUME) Ped822 BAS)(a 92 hal& 8 aia, rea ea Th LI EE 7-076
Commerce & Industry Insurance Co (Canada) vy Lloyd’s Underwriters; sub nom.
Viking Insurance Co v Rossdale [2002] 1 W.L.R. 1323; [2002] 2 All E.R.
(Comm) 204; [2002] 1 Lloyd’s Rep. 219; [2002] C.L.C. 26, QBD (Comm) .. 7-183,
7-191
Commission for the New Towns v Crudens (1995) C.I.L.L. 1035 ......................./ A2-016
Commonwealth of Australia y Cockatoo Dockyard Pty Ltd (1995) 36 N.S.W.L.R.
GOD 6: eRe LS sucles tes ten le asiber pha gk mR AT ee Rs Be 42-001
Compagnie d’Armement Maritime SA vyCompagnie Tunisienne de Navigation SA.
See Compagnie Tunisienne de Navigation SA y Compagnie d’Armement
Maritime SA
Compagnie Financiere pour le Commerce Exterieur SA y OY Vehna AB [1963] 2
Lloydis Rep 78.) BID (Gomi) ao eee are. c.5 ace ee Re eK oa ne 6-087
Compagnie Francaise d’Importation et de Distribution SA y Deutsche Conti-
Handels GmbH [1985] 2 Lloyd’s Rep. 592, QBD (Comm) ..............60:::008
Compagnie Graniere SA vy Fritz Kopp AG [1980] 1 Lloyd’s Rep. 463, CA (Civ
DDNg) Brion eR Oe Rees, Ge ee eon ee ROR, <a 6-177, 6-179
Compagnie Nouvelle France Navigation SA y Compagnie Navale Afrique du Nord
(The Oranie and The Tunisie) [1966] 1 Lloyd’s Rep. 477; 116 N.L.J. 948,
CSA ge Rd ERS RR ee 7-058, 7-059, 7-060, 7-064
Compagnie Tunisienne de Navigation SA vyCompagnie d’Armement Maritime SA;
sub nom. Compagnie d’Armement Maritime SA vy Compagnie Tunisienne de
Navigation SA [1971] A.C. 572; [1970] 3 W.L.R. 389; [1970] 3 All E.R. 71;
[1970] 2 Lloyd’s Rep. 99; (1970) (1970) 114 SJ. 618, HL .......... 2-093, 5-057
Compania Naviera Micro SA v Shipley International Inc (The Parouth) [1982] 2
Ikloyd's Reprod GAT (Cay Diy) ssnch.cd Ss da Meteeoek EAR Ee 2-093
Comsite Projects Ltd v Andritz AG [2003] EWHC 958; (2004) 20 Const. L.J. 24,
QBDIGNCE) ee dS is crete neat teh OX SA Serre A eee 2-034, 7-051
Conder Structures v Kvaerner Construction Ltd [1999] A-D.R.LJ. 305 ....0........ 8-106
Conquer v Boots [1928 | eK Bes36eK BD PA. 2:5. cee Ae ee ee ee 6-179
Construction Centre Group Ltd v Highland Council, 2003 S.C. 464; 2003 S.L.T.
623; 2003 G.W.D. 13-399, IH (Ex Div)
 Table of Cases XXIX

Continental Bank NA v Aeakos Compania Naviera SA [1994] 1 W.L.R. 588; [1994]

2 AIL E.R. 540; [1994] 1 Lloyd’s Rep. 505; [1994] I.L.Pr. 413, CA (Civ Div) ..... 7-015
Continental Enterprises Ltd vy Shandong Zhucheng Foreign Trade Group Co
(ZOOSK EWHE92s OBDN(Gomin) Aah Be act etic ne, 3-002, 8-030
Continental Grain Co v China Pateroleum Technology & Development Corp,
unjeporteds December 44199 8s ete eeepc. A Ae een ee 4-017, 7-114
Goopersshutileworthi(1856)R25ele |eHalse ee wee et) ee ee ee 4-145
Cooperative Wholesale Society Ltd v Saunders & Taylor Ltd, 39 Con. L.R. 77;
(1995) PLE @onst aR ilS 5OB) aces ene ee 2-047, 2-053
Cooperative Wholesale Society Ltd (t/a CWS Engineering Group) v Birse Con-
struction Ltd (formerly Peter Birse Ltd); sub nom. Birse Construction Ltd
(formerly Peter Birse Ltd) v Cooperative Wholesale Society Ltd (t/a CWS
Engineering Group) [1997] C.L.C. 1290; (1997) 94(29) L.S.G. 29, CA (Civ
Div att. SARE eon tl et. lt meer om teal aed, Sao A Recess 6-184
CopewvaGope (S85) R52 s1s ERGOT rea eect eoeteeavne: a toneese sas dnaec ae eR ane Meh ee 2-008
Coppee Lavalin SA NV vy Ken-Ren Chemicals & Fertilisers Ltd (In Liquidation in
Kenya); Voest-Alpine AG v Ken-Ren Chemicals & Fertilisers (In Liquidation
in Kenya) [1995] 1 A.C. 38; [1994] 2 W.L.R. 631; [1994] 2 All E.R. 449; [1994]
2 Lloyd’s Rep. 109; [1994] C.L.C. 467; (1994) 91(23) L.S.G. 27; (1994) 144
INFIEAL (ste (IEEE) Nexencr HEIs peMl0Se WWE Arora 5-079, 5-089, 5-103, 7-006, 7-207,
A2-041
Cosemar SA v Marimarna Shipping Co (The Mathew) [1990] 2 Lloyd’s Rep. 323,
OB! (Gommi)yt oe Ae eds one. eee, hee ees 6-082, 8-125, 8-163
CormUIe LidwahEsbarberaltdyl 1997 |erAll EeRess40) OBIS... rcs eee 2-029
Corte Gx(EIKYR setae Stet irc ere et Aes ar dadest Volz cetera Weer 6-176
Courtney & Fairbairn Ltd v Tolaini Brothers (Hotels) Ltd; sub nom. Courtney &
Fairburn v Tolaini Bros (Hotels) [1975] 1 W.L.R. 297; [1975] 1 All E.R. 716;
C1974 dl OSS) RS4eiCA Ss(Cave Dix: penrceden cal Fann. ated ct evenxeztc. Att aes 2-036
Covington Marine Corp v Xiamen Shipbuilding Industry Co Ltd [2005] EWHC
2912; [2006] 1 Lloyd’s Rep. 745; [2006] 1 C.L.C. 624, QBD (Comm) ... 8-125, 8-127,
8-163
Crane y Hegeman Harris Co Inc [1939] 4 All E.R. 68, CA ......00.... 2-078, 6-114, 6-177
GravenayeGravemt (Sle) Pela GAA serene ae eee Rect ee ease che knee eee 6-086
Cremer vy Samanta and Samanta [1968] 1 Lloyd’s Rep. 156, QBD (Comm) ......... 6-091
Crown Estate Commissioners v John Mowlem & Co Ltd, [1994] 70 B.L.R. 1; 40
Conml Rs 61994) MO i@onstelea| ass GAL (Civaliw)eaeree ee eee. ee 7-073
Cruden Construction Ltd vyCommission for the New Towns [1995] 2 Lloyd’s Rep.
S200) ataas Ach ee ee asaaenrh e Penncar eee cad Orca A Otean nan pA Ape 5-004, 5-025
Cuflet Chartering v Carousel Shipping Co Ltd [2001] 1 All E.R. (Comm) 398;
(2001 salbloydsuRep e707. OB WA(Eomin) ieaectee setteevaesenceeeon hss 8099, 8-100
Curacao Trading Co BV v J Harkisandas & Co [1992] 2 Lloyd’s Rep. 186, QBD
(Gomi) ae ie Bes ee) eee EAR Eso e 8003, 8-006
Czarnikow Ltd v Roth Schmidt & Co [1922] 2 K.B. 478; (1922) 12 LI. L. Rep. 195,
(CAL A Arty See, a OE BE Ee EC SE oe 1-054
Czech RepubliciyaG Mn pen. ereentetts. cee tics Nok sttaneedies acta tnee sate oe nskelanmtues 8-052
D (Minors) (Adoption Reports: Confidentiality), Re [1996] A.C. 593; [1995] 3
W.L.R. 483; [1995] 4 All E.R. 385; [1995] 2 EL.R. 687; [1996] 1 ECR. 205;
E996] Pann aw Si 1995 ais INNOYY L6d2 ako Ee ae A2-001
DDT Trucks of North America Ltd y DDT Holdings Ltd [2007] EWHC 1542
(Comm), QBD (Comm)2-009, ow... eee 8-099, 8-114, 8-134, 8-168, 8-215
DSV Silo und Verwaltungsgesellschaft mbH v Owners of the Sennar (The Sennar)
(No.2) [1985] 1 W.L.R. 490; [1985] 2 All E.R. 104; [1985] 1 Lloyd’s Rep. 521;
(1985) 82 L.S.G. 1863; (1985) 135 N.LJ. 316; (1985) 129 S.J. 248, HL ....... 6-003
Dadourian Group International Inc v Simms [2006] EWCA Civ 399; [2006] 1
W.L.R. 2499; [2006] 3 All E.R. 48; [2006] 1 All E.R. (Comm) 709; [2006] 2
Lloyd’s Rep. 354; [2006] C.P. Rep. 31; [2006] 1 C.L.C. 744, CA (Civ Diy) ....... 7-195
XXX Table of Cases

Dalmia Cement Ltd v National Bank of Pakistan [1975] Q.B. 9; [1974] 3 W.L.R.
138; [1974] 3 AIL E.R. 189; [1974] 2 Lloyd’s Rep. 98; (1973) 118 S.J. 515, QBD
(Conn) gsc Mee ee Pernt renin. srseh eee oe. Bet tae 8-003, 8-020, 8-047
Dalmia Dairy Industries v National Bank of Pakistan [1978] 2 Lloyd’s Rep. 223;
COTA VEST AA2 ECA 9(Civ i) besees.. tense ee ns Sah dees ee 2-097, 2- 106, 8-018
Damon Compania Naviera SA vy EAL Europe Africka Line (The Nicki R) [1984]
2 Lloyd's Rep, Wi86; (1984) 134. Nu). 499% OBD (Comm) eee s eee esse 8-155
Damond Lock Grabowski v Laing Investments (Bracknell) Ltd, 60 B.L.R. 112,
(OUR)DU Be ee ce ener eee ee ee eee ae eee ees ke 5-045, 7-056, 7-121, 7-125
Dardana Ltd v Yukos Oil Co (No.1); sub nom. Petroalliance Services Co Ltd v
Yukos Oil Co; Yukos Oil Co vy Dardana Ltd [2002] EWCA Civ 543; [2002] 1
AILE.R. (Comm) 819; [2002] 2 Lloyd’s Rep. 326; [2002] C.L.C. 1120, CA (Civ
IBN) Me,As otic oireAn Sette ode erica ton nche Mack otnt Pe ncGO nD er eran ene are meer 8-024, 8-028, 8-046
Daval Aciers D’Usinor et de Sacilor vyArmare Srl (The Nerarno) [1996] 1 Lloyd’s
Repoteling VAT (GIN geI) 0.) ovarreexact ssa ce arem neterne one ere ae ee eae 2-027, 2-056, 2-057
David ‘Taylor & Son v Barnett Trading Co [1953] 1 W.L.R. 562; [1953] 1 All E.R.
S43 aOSS iPlE ploy disney amlidiles(@L953) 7k Salee22 On GA pee eee neeee 4-142, 8-163
David Wilson Homes Ltd v Survey Services Ltd (In Liquidation) [2001] EWCA
Civ 34; [2001] 1 All E.R. (Comm) 449; [2001] B.L.R. 267; (2001) 3 T.C_.L.R.
SB MO) (Cross, TLS oh GUANA Gine I DYNA sceenccessceespndceecosc-ehce 2-023, 2-028, 2-029, 2-065
ID anes. |Paras: CKO a)TUN ASIG (INS CUO): si anancicecnapneeanccts banenansckeroannrescnceaemene Aurea 4-148
Davies svaknicen@! SOU) souls albey/ 13-5 ORWERCE SOS a5 ae eee ee: eee Ene ees 4-034
Delos, The. See Owners of Cargo Lately Laden on Board the MV Delos v Delos
Shipping Ltd
Demco Investments & Commercial SA v SE Banken Forsakring Holding AB [2005]
EWHC 1398; [2005] 2 Lloyd’s Rep. 650, QBD (Comm) ........ 8-121, 8-125, 8-126,
8-143
Department of Economic Policy and Development of the City of Moscow vy
Bankers Trust Co; sub nom. Department of Economics, Policy and Develop-
ment of the City of Moscow v Bankers Trust Co; Moscow City Council v
Bankers Trust Co [2004] EWCA Civ 314; [2005] Q.B. 207; [2004] 3 W.L.R.
533; [2004] 4 All E.R. 746; [2004] 2 All E.R. (Comm) 193; [2004] 2 Lloyd’s
Rep. 179; [2004] 1 C.L.C. 1099; [2004] B.L.R. 229; (2004) 148 S.J.L.B. 389,
CA CiveDiw)its Reeeoncs et ecko eee eee ee 1-010, 5-184, 5-187, 8-205
Deutsche Schachtbau- und Tiefbohrgesellschaft mbH v Ras Al-Khaimah National
Oil Co; Deutsche Schachtbau- und Tiefbohrgesellschaft mbH v Ras Al-Khai-
mah National Oil Co (Garnishee Proceedings); Deutsche Schachtbau- und
Tiefbohrgesellschaft mbH v Shell International Petroleum Co Ltd (Nos.1 and
2); sub nom. DST v Rakoil [1990] 1 A.C. 295; [1988] 3 W.L.R. 230; [1988] 2
AILE.R. 833; [1988] 2 Lloyd’s Rep. 293; (1988) 85(28) L.S.G. 45, HL ... 2-095, 4-002
Deutsche Schachtbau- und Tiefbohrgesellschaft mbH vy Shell International Petro-
leum Co Ltd (Nos.1 and 2). See Deutsche Schachtbau- und Tiefbohrge-
sellschaft mbH v Ras Al-Khaimah National Oil Co
Dicasway@iS30 nomic yo OS alu (OlSs) Geez ie ar, cas cnaeeteees sereeeeeeen eeeeee 6-178
Director General of Fair Trading v Proprietary Association of Great Britain; sub
nom. Medicaments and Related Classes of Goods (No.2), Re [2001] 1 W.L.R.
700; [2001] UK.C.L.R. 550; [2001] LCR. 564; [2001] H.R.L.R. 17; [2001]
U.K.H.R.R. 429; (2001) 3 L.G.L.R. 32; (2001) 98(7) L.S.G. 40; (2001) 151
INGE a7 (2001) ASS A Ba2OGAn(GivelDin)ew. ie 4-110, 4-114, 4-115, 7-132
Discain Project Services Ltd y Opecnune Development Ltd (Application for
Summary Judgment) [2000] B.L.R. 402; (2001) 3 T.C.L.R. 16, QBD (TCC) .... 7-119
Distillers Co (Biochemicals) Ltd vy Times Newspapers Ltd; Distillers Co (Bio-
chemicals) Ltdv Phillips [1975] Q.B. 613; [1974] 3 W.L.R. 728; [1975] 1 All
E.Re Ale O74 a1 18uS. jic864 {OBID ES aces... hecho ceeenenecmmaters meer eek. 6-185
Woerd Mortisky, Rossen (S02) satas tals Semen emer, cee eae = eee een er 6-181
Doleman s&asonstva Ossett orp: [LOI Bee 2257 GA ta reee eee eee Re 6-162
 Table of Cases XXXi

Dolling-Baker v Merrett [1990] 1 W.L.R. 1205; [1991] 2 All E.R. 890; (1990) 134
S306 CAKE aw Daye Or eben. 5-139, 5-186, 5-187, 6-185, A2-001
Donald Campbell & Co Ltd y Pollak [1927] A.C. 732, HL coeceeecccccccccsescesseseceeseees 6-140
Donohue v Armco Inc [2001] UKHL 64; [2002] 1 All E.R. 749; [2002] 1 All E.R.
(Comm) 97; [2002] 1 Lloyd’s Rep. 425; [2002] C.L.C. 440, HL ........ 7-014, 7-015,
7-019, 7-096
Downing v Al Tameer Establishment [2002] EWCA Civ 721; [2002] 2 All E.R.
(Comm) 545; [2002] C.L.C. 1291; [2002] B.L.R. 323, CA (Civ Div) ...... 2-111, 7-046
Drake & Scull Engineering Ltd y McLaughlin & Harvey Plc 60 B.L.R. 102, QBD .. 6-002,
8—O11
Dredging & Construction Co Ltd y Delta Civil Engineering Co Ltd, May 26,
PAs Shs 8 See 2 cera ire A, se, setae, lai ties NS eine, nd iy J 7-121, 7-125
Drumenond Witiaues (19421 130, 8.387 KBD, ots. ee dee! edhe. 4-043
Dubai Electricity Co v Islamic Republic of Iran Shipping Lines (The Iran Vojdan)
Wena Dilovdial Rept) ORT (Comins porate dle obec coh ek 2-104
Dubai Islamic Bank PJSC v Paymentech Merchant Services Inc [2001] 1 All E.R.
(Comm) 514; [2001] 1 Lloyd’s Rep. 65; [2001] C.L.C. 173; (2000) 97(47)
SGT 39, OBL (Comm) 2.2... 2-088, 2-100, 2-102, 5-071, 5-072, 5-073, 6-052
Dyna vy Vieray= (1829) 9 Besa 730t7) Lal(Os:) heb 8390) ee 6-178
Sruaniee ye Wartiess (88479 MSW. 792 Ey E8188 oRiiee csc rcsdsoeacsescnsevere-nens 6-086
Durham CC y Darlington BC [2003] EWHC 2598; [2004] B.L.G.R. 311; [2003]
BPO OB DSGA dein \reeeie tease eee Ew 4-095, 6-117, 6-119, 6-176
E Rotheray & Sons Ltd v Carlo Bedarida & Co [1961] 1 Lloyd’s Rep. 220, QBD ..... 5-170
E Turner & Sons Ltd v Maltind Ltd (1985) 5 Const. LJ. 273 ..eceecceccsscsesseeseeee 2-015
EM Dower & Co v Corrie MacColl & Son Ltd (No.1) (1925) 22 LI. L. Rep. 256,
KB Dey Ee Aah te ee ee) Leys eee = olla 8-168

Cape Dis it 4. 25 AS. SOs Bek ree? Bed ee eon D sade: ee) 7-043
Eardley wpsteet (1825) 4sDowly423e4elee) 5Bis 295015. SiS betes hae 6-073
Eastern Saga, The. See Oxford Shipping Co Ltd vy Nippon Yusen Kaisha (The
Eastern Saga)
Econet Sateliite Services Ltd vy Vee Networks Ltd (formerly Econet Wireless
Nigeria Ltd) [2006] EWHC 1664; [2006] 2 All E.R. (Comm) 1000; [2006] 2
MoydisiRep. 423;,(2006] 2_GL.G. 483. OBD (Comm) |..3. 22s. 6-016, 8-062
Econet Wireless Ltd v Vee Networks Ltd [2006] EWHC 1568; [2006] 2 All E.R.
(Comm) 989; [2006] 2 Lloyd’s Rep. 428, QBD (Comm) .. 5-075, 7-183, 7-189, 7-190
Ecuador v Occidental Exploration & Production Co [2007] EWCA Civ 656, CA
CAE DYLayNas, ee tag Be eee ad Re RRS, ho saca seek Tawa ealesh ap Gp ere SRL Rae Soc ae a 8062
Ecuador v Occidental Exploration & Production Co; sub nom. Occidental Explora-
tion & Production Co y Ecuador [2005] EWCA Civ 1116; [2006] Q.B. 432;
[2006] 2 W.L.R. 70; [2006] 2 All E.R. 225; [2005] 2 All E.R. (Comm) 689;
{2005] 2 Lloyd’s Rep. 707; [2005] 2 C.L.C. 457; (2005) 102(37) L.S.G. 31, CA
(EIA DIN Coe eeenee 2-095, 3-034, 8-021, 8-028, 8-045, 8-052, 8062
Edm JM Mertens & Co PVBA vy Veevoeder Import Export Vimex BV [1979] 2
LS reprelee een eebesh (OLED at Oey 00 0) coemeets oe er Reet cana enn ASR OAC: 4-038
Edwards ix pr (looo) poy Morrellés (Banke Reprl/9 efi e acres e-toc e ee eeeess ess 8—019
Edwards v Great Western Railway Co (GWR) (1851) 11 CB. 588 ...................006 Gat2
Edwin Jones v Thyssen (Great Britain), [1991] 57 B.L.R. 116, CA (Civ Diy) ..... 7-049
Egmatra v Marco Trading Corp [1999] 1 Lloyd’s Rep. 862; [1998] C.L.C. 1552.
CYBID Corantia) ead aA ae cess eae Seater ng ee eva eee 7-125, 8-124
Egon Oldendorff y Libera Corp (No.1) [1995] 2 Lloyd’s Rep. 64; [1996] C.L.C.
427 OB IDs(GComin ees Aes eee ee Ae A. SESE Ried et otek 2-102
Egon Oldendorff v Libera Corp (No.2) [1996] 1 Lloyd’s Rep. 380; [1996] C.L.C.
ARTE CEO (Goren) Wee eee ne tetas MRR fe NE ec A A eo ae et ae 2-093
El Nasharty v J Sainsbury Ple [2003] EWHC 2195; [2004] 1 All E.R. (Comm) 728;
(200A a wloydissReps 309% OBID, (Comin) hs t-s..0..s0-.eeeencess reat care 2-079, 7-055
XXXI Table of Cases

Electrosteel Castings Ltd v Scan Trans Shipping & Chartering Sdn Bhd [2002]
EWHC 1993; [2002] 2 All E.R. (Comm) 1064; [2003] 1 Lloyd’s Rep. 190; 87
ConmieR 50, OBD) (Comin) pits .ctedee teeters ce eeteeetoe eect 3-024, 8-061, 8-067
Eleftheria Niki Compania Naviera SA v Eastern Mediterranean (The Eleftheria
Niki) Pi980])2: loyd’s?!Rep? 252), QBD \(Comut) 12nd Asbo veteran 8-168
Elektrim SA y Vivendi Universal SA [2007] EWHC 11 (Comm); [2007] 1 Lloyd’s
Rep. 693; [2007] 1 C.L.C. 16; [2007] Bus. L.R. D69, QBD (Comm) ..... 2-111, 6-166,
7-046, 7-156, 8-099, 8-100, 8-102, 8-214
Elizabeth H, The [1962] 1 Lloyd’s Rep. 172, PDAD o....esssessssssssssssessesseesesseeseesees 2-056
Ellerine Bros Pty Ltd v Klinger [1982] 1 W.L.R. 1375; [1982] 2 All E.R. 737; (1982)
79 TS:GP987: (1982) 126 S10592; CA (CY Davy en ene 5-003, 5004
Empresa Exportadora De Azucar (CUBAZUCAR) vy Industria Azucarera Nacional
SA (IANSA) (The Playa Larga and Marble Islands) [1983] 2 Lloyd’s Rep. 171;
[PRSSihGovaieg MalRe pate} ol
Cole (Cray Dyn) eas agamantasudycadene Seater 2-004, 2-075, 2-078
Emson Contractors v Protea Bstates (1987) 39. Burld. IeRo 262. ceca eee 5—005
Enco Civil Engineering Ltd v Zeus International Development Ltd, [1991] 56
BWetR 43 e205) Con Reso. (992.8: Constadls.|) GAs OS Deere ete oe eee 7-041
Engineered Medical Systems v Bregas AB [2003] EWHC 3287, QBD (Comm) .. 7-189,
7-195
Equatorial Traders Ltd v Louis Dreyfus Trading Ltd [2002] EWHC 2023; [2002]
Zallovdiss hep g0S.om ©) )s(Conn) eeeeese eee 6-008, 7-089, 7-091, 8-037, 8-163
Erich Gasser GmbH v MISAT Srl (C116/02) [2005] Q.B. 1; [2004] 3 W.L.R. 1070;
[2005] AIL E.R. (EC) 517; [2005] 1 All E.R. (Comm) 538; [2004] 1 Lloyd’s Rep.
2725 (2003 ELERe le 46 985 (2004) wee ere eal Cl eee tee eyes eee ee 7-012
Ermoupolis, The. See Ulysses Compania Naviera SA v Huntingdon Petroleum
Services (The Ermoupolis)
Essexe (Gay, PremiemRecyclingaitd) (2007) ppleRe2335 OB MEE) see ee 8-121
Esso Exploration & Production UK Ltd y Electricity Supply Board [2004] EWHC
12337(2004 |PLSAIEE Re (Gon) 926. OBID (Cons) sees. 5—064, 7-156
Esso/BHP vy; Plowman’ (1995) 1 Arbitration! Ints 234 Sec..c-ce-cecee sees 5-185, A2—001
Et Plus SA v Welter [2005] EWHC 2115; [2006] 1 Lloyd’s Rep. 251; [2006] I.L.Pr.
LS OED a(Comun) yee ee 1-036, 1-037, 2-070, 2-075, 2-079, 2-097, 7-055
Ethiopian Oilseeds and Pulses Export Corp v Rio del Mar Foods [1990] 1 Lloyd’s
RepacoeO BDu(@omin teers ere meen ener ies tenes 2-072, 2-078, 6-114
Etri Fans Ltd v NMB (UK) Ltd: [1987] 1 W.L.R. 1110; [1987] 2 All E.R. 763;
[1987] 2 Lloyd’s Rep. 565; [1987] ES.R. 389; (1987) 84 L.S.G. 2457; (1987)
HES eseEpTRUCEpatCore Wal(Cyl Da he sats rc Bae 08, Sf ace 7-030, 7-055
European Grain & Shipping Ltd v Johnston [1983] Q.B. 520; [1983] 2 W.L.R. 241;
{1982] 3 All E.R. 989; [1982] 2 Lloyd’s Rep. 550; [1982] Com. L.R. 246; [1984]
IAC KG P (OIET
EPA AA oySHI TASSillC/N Ging LDN Sane eae eee 4-140, 6-050
Eurosteel Ltd v Stinnes AG [2000] 1 All E.R. (Comm) 964; [2000] C.L.C. 470,
OLEID MCGtoarhony) costetran, eee oe oe eee eee Pee ee 3-016, 3-017, 3-020
Everglade Maritime Inc vy Schiffahrtsgesellschaft Detlef von Appen GmbH (The
Maria) [1993] Q.B. 780; [1993] 3 W.L.R. 176; [1993] 3 All E.R. 748; [1993] 2
Iblovdis Reps 168 sG@An( Give Div) eeees meen eee ee a 6-137, 6-157, 6-160
Evimeries lies (0992; Mimeloy clas INGis 55a e sotateeas een eet nese Be a ee eee 7-168
Excess Insurance Co Ltd v Mander [1997] 2 Lloyd’s Rep. 119; [1995] L.R.L.R.
358; [1995] C.L.C. 838, Lloyd’s List, May 18, 1995, QBD (Comm) ..... 2-046, 2-047,
2-055, 2-056
Excomm v Guan Guan Shipping Pte Ltd (The Golden Bear [1987] 1 Lloyd’s Rep.
SSOP OST RIE MIC nk. 6 lea@ BI i(Com) Perms eee tee 5-127, 5-229
Exeter City AFC Ltd v Football Conference Ltd [2004] EWHC 831; [2004] 1
W.L.R. 2910; [2004] 4 All E.R. 1179; [2004] B.C.C. 498; [2005] 1 B.C.L.C.
2383" (2004) LONG) MLS. Grol iGiel) eeaneee een nee treet eee 7-039, 7-055
 Table of Cases XXXIll

Exfin Shipping (India) Ltd Mumbai v Tolani Shipping Co Ltd Mumbai [2006]
EWHC 1090; [2006] 2 All E.R. (Comm) 938; [2006] 2 Lloyd’s Rep. 389, QBD
(Goin) Rtted aie Abe hed RO ek Bae A EIR dt BOI 5-003
Exmar BV vy National Iranian Tanker Co (The Trade Fortitude) [1992] 1 Lloyd’s
Rep? 1698OBDi(Comm)i ee 5—068, 6-003, 6-011, 6-013, 6-014, 6-015, 7-167
Extrudakerb (Maltby Engineering) Ltd v Whitemountain Quarries Ltd [1996] N.1.
56% ODO (CEG Nii ORD (ND a ee AP eae wee 2-048
Eyre and Leicester Corp’s Arbitration, Re [1892] 1 Q.B. 136, CA ........ccccecee 7-104
F&G Sykes (Wessex) Ltd v Fine Fare Ltd [1967] 1 Lloyd’s Rep. 53, CA ............ A2-009
FE Hookway & Co Ltd vy Alfred Isaacs & Sons; FE Hookway & Co v Graves
(Consolidated) [M954] Mee loydissRepe4ON@OBD wee sn eae eee 5-199
FJ Bloemen Pty Ltd (formerly Canterbury Pipelines (Australia) Pty Ltd) v Council
ofthe City of Gold [1973] A.C. 115; [1972] 3 W.L.R. 43; [1972] 3 All E.R. 357;
(972) AULOES Jas 95.0P. GiCAUs) hae eerset ect seeeees cts teens eee 6-162, 6-163, 6-177
Faghirzadeh vy Rudolph Wolff (SA) (Pty) Ltd [1977] 1 Lloyd’s Rep. 630, QBD
(Goma) 5Fre Sexs hes eRe sea hE tedktsin MERE Oe AEE: PRS Ee at 2-019, 2-079
Fairclough Building Ltd v Vale of Belvoir Superstore Ltd, [1990] 56 B.L.R. 74; 28
Cong RAE OBDR ee ake ee Se Reet aL eee eeee een 6-082, 8-081
Fakes v Taylor Woodrow Construction Ltd [1973] Q.B. 436; [1972] 2 W.L.R. 161;
73) Reg OOK 978) tele Ss) eilion CAM (Civil) ip) meeeceteusnceeeceeene tere eee 7-049
Faruqi v Commonwealth Secretariat (2002) W.L. 498805 ..........ccccceceesccesteseeeeees 7-002
Federal Bulk Carriers Inc v C Itoh & Co Ltd (The Federal Bulker [1989] 1 Lloyd’s
Reprsl0sn GAt(Giva Din, eer ied ceattetet leet tetece etc eee 2-047, 2-048, 2-056
Federal Insurance Co v Transamerica Occidental Life Insurance Co; Transamerica
Occidental Life Insurance Co yv Federal Insurance Co [1999] 2 All E.R.
(Comm) 138; [1999] 2 Lloyd’s Rep. 286; [1999] C.L.C. 1406; (1999) 149 N.L.J.
LOSTVOBIE (Commi) aeecccercoeeee ceeee eee ee ere eee ee ee 7-103, 7-104
Kence Gateitd yaNEL Construction® etdl|(2002] (Cael S17es. eee. 6-137, 6-140
Fidelitas Shipping Co Ltd vyV/O Exportchleb [1966] 1 Q.B. 630; [1965] 2 W.L.R.
1059; [1965] 2 All &.R. 4; [1965] 1 Lloyd’s Rep. 223; (1965) 109 S.J. 191, CA ... 6-166,
6-176, 8-175
Fidelity Management SA v Myriad International Holdings BV [2005] EWHC 1193
(Comm); [2005] 2 All E.R. (Comm) 312; [2005] 2 Lloyd’s Rep. 508, QBD
(Omir) iepcos cececce ace ettneee oe 6-031, 6-079, 8-073, 8-075, 8-093, 8-094, 8-095
Fillite (Runcorn) Ltd v Aqua-Lift, 45 B.L.R. 27; 26 Con. L.R. 66; (1989) 5 Const.
To OTE GAM( Give iv) bee wert ree etcetera eee 2-075, 2-076, 2-078, 6-114
Film Finance Inc v Royal Bank of Scotland [2007] EWHC 195 (Comm); [2007] 1
lov distReps 32 sOBDs (Commi) ia, secs. caer: erate ae nee 2-057, 2-075, 7-157
Finnegan-v-Allen’[1943].K..B.425: [1943] 1 AILE.Ri493 CA coin kebccsstssecaenes 2-029
Finnish Marine Insurance Co Ltd v Protective National Insurance Co [1990] 1
Q.B. 1078; [1990] 2 W.L.R. 914; [1989] 2 All E.R. 929; [1989] 2 Lloyd’s Rep.
le 0181BR ioni)eller Oe Pelee Oe ond Wore Pe eR he Peace ERY Ee eo 7-043
Finzel, Berry & Co v Eastcheap Dried Fruit Co [1962] 2 Lloyd’s Rep. 11, CA... 4-029
Fiona Trust & Holding Corp v Privalov [2007] EWCA Civ 20; [2007] Bus. L.R.
686; [2007] 1 All E.R. (Comm) 891; [2007] 1 C.L.C. 144; (2007) 104(6) L.S.G.
33, CA (Civ Div) ... 1-033, 2-004, 2-008, 2-010, 2-012, 2-069, 2-070, 2-072, 2-074,
2-075, 2-076, 2-078, 5-062, 5-064, 7-025, 7-029, 7-030, 7-032,
7-033, 7-036, 7-058, 7-060, 7-061, 7-144, 7-145, 7-147, 7-149,
7-153
Firma C-Trade SA v Newcastle Protection and Indemnity Association (The Fanti);
Socony Mobil Oil Co Inc v West of England Shipowners Mutual Insurance
Association (London) Ltd (The Padre Island) (No.2) [1991] 2 A.C. 1; [1990]
3 WLR. 78; [1990] 2 All E.R. 705; [1990] 2 Lloyd’s Rep. 191; [1990] B.C.L.C.
625-99 IEAM) 6072, (1990) 13405 Jm8S37 Ieee, ee eee RE Seite ee 3-021
First Options of Chicago, Inc v Kaplan, 514 U.S. 938 (1995)... eeeseeee 1-033
Bitthvandblowlettakee (1650) a9 als J.cO: BaMGO Mette vases csner-ttcseunssvetsteanerwereeteoecs 4-15]
XXXIV Table of Cases

Fisher vy PG Wellfair Ltd (In Liquidation); Fox v PG Wellfair Ltd [1981] 2 Lloyd’s
Rep. 514; [1981] Com. L.R. 140; (1982) 263 E.G. 657; (1982) 263 E.G. 589;
(1981) 125 S.J. 413, CA (Civ Div) .. 4-105, 4-139, 5-204, 6-076, 6-082, 7-126, 8-081
Flag Lane Chapel v Sunderland Corp. (1859) 5 Jurist. N.S. 894 oe 4-150
Fletamentos Maritimos SA y Effjohn International BV [1995] 1 Lloyd’s Rep. 311,
Idloydtsubist Rebruanys $l 995 OB Di(Gomnn)ye-+ 2eeeanteere 4-007, 4-150, 4-151
Fletamentos Maritimos SA y Effjohn International BV (No.2) [1997] 2 Lloyd’s
Rep. 302; [1997] 1 Lloyd’s Rep. 644 (Note), CA (Civ Div) ............... 7-002, 7-056
Flight Training International Inc v International Fire Training Equipment Ltd
[2004] EWHC 721; [2004] 2 All E.R. (Comm) 568, QBD (Comm) ... 2-065, 3-051,
7-095
Food Corp of India vy Antclizo Shipping Corp (The Antclizo) [1988] 1 W.L.R. 603;
[1988] 2 All E.R. 513; [1988] 2 Lloyd’s Rep. 93; [1988] 2 ET.L.R. 124; [1988]
E.G. 62 (G:S:)3(1988) 138 NiL.J. Rep: 135; (1988) 132 Sy). a2sHiLe a 5-224, 5-229
Food Corp of India v Marastro Cia Naviera SA (The Trade Fortitude) (No.1); Food
Corp of India v Marastro Cia Naviera SA (The Trade Fortitude) (No.2) [1987]
1 W.L.R. 134; [1986] 2 All E.R. 500; [1986] 2 Lloyd’s Rep. 209; (1986) 83
L.S.G. 2919; (1986) 136 N.L.J. 607; (1986) 130 S.J. 649, CA (Civ Diy) ....... 6-168
Foster Yates & Thom vy HW Edgehill Equipment (1978) 122 S.J. 860, CA (Civ
DEIN) Reet cease da eSesneneaate eae eee ae eee ae ee ec ee ee 3-031
Fox v PG Wellfair Ltd. See Fisher v PG Wellfair Ltd (In Liquidation)
French Government v Tsurushima Maru, The (1921) 8 Ll. L. Rep. 403, CA ..... 7-056
Frota Oceanica Brasiliera SA v Steamship Mutual Underwriting Association (Ber-
muda) Ltd (The Frotanorte) [1996] 2 Lloyd’s Rep. 461; [1997] C.L.C. 230, CA
(Cialis ta RP ee Reo eed Eee 2-110, 3-003, 7-106
Furness Withy (Australia) Ltd vy Metal Distributors (UK) Ltd (The Amazonia)
(OSORineloyd:stRepe23on GAG(CivelDin) 2: e eee 2-016, 2-093, 3-049
Galliford) (Wik) Ltdiv, AldigStoressMarchis 2000" @BD ee. cence eee 8-153
Gannet Shipping Ltd v Eastrade Commodities Inc; Eastrade Commodities Inc y
Gannet Shipping Ltd [2002] 1 All E.R. (Comm) 297; [2002] 1 Lloyd’s Rep.
TINSE VAN WA CAU LCs SHOSy, OQBIDYGrosmminit) Wooo Gbobaacanececaoee
aneues sceaeonee. 6-168, 6-169
Gater Assets Ltd v Nak Naftogaz Ukrainiy [2007] EWHC 697 (Comm); [2007] 2
All E.R. (Comm) 208; [2007] 1 Lloyd’s Rep. 522, QBD (Comm) ....... 8—013, 8-046
Gbangbola v Smith & Sherriff Ltd [1998] 3 All E.R. 730; (1999) 1 T.C.L.R. 136,
OBIT GCC) ea ee eect teen hee oc ee Ree 5—050, 6-018, 6-138, 6-140, 6-175
Gemeente Almelo v Energiebedrijf Ijssellmij NV (C393/92); sub nom. Municipal-
ity of Almelo v NV Energibedrijf Ijsselmij (C393/92); Commune d’Almelo ea
v NV Energiebedriyf Tsselmij (C393/92) [1994] E.C.R. I-1477; [1994] 2
CE CaSE Cle Gthy Chambon) ieee. suse ecrcen tcccee, eke tt ened aed 1-036, 8-043
General Valdes, The. See Pietro Cingolani SAS vy Pearl Marin Shipping A/B (The
General Valdes)
Geogas SA v Trammo Gas Ltd (The Baleares) [1991] 1 W.L.R. 776; [1991] 3 All
E.R. 554; [1991] 2 Lloyd’s Rep. 318; (1991) 141 N.L.J. 1037; (1991) 135
S Jel.B.. LOU TNE ake acik hs SRR SAS aaa trol - ce. a ee om ae 8-160
Ghana v ‘Telekom Malaysia Berhad, October 18, 2004; November 5, 2004, , District
roi Phesklaguenstect.& tithe Ren tied ec teen he PRA Seat eee eee 4-124
Gibraltar v Kenney [1956] 2 Q.B. 410; [1956] 3 W.L.R. 466; [1956] 3 All E.R. 22;
CLOSG)RUOORS Hoole OBL eee: geet, eerearn eters 2-009, 2-077, 2-078, 2-082
Giffen (Electrical Contractors) Ltd vy Drake & Scull Engineering Ltd, 37 Con. L.R.
S45 995): Us Consteedg: 11225, Keli IDIW) hl Meek ieee cepts A ake OR 2-053
Gilbert and: Wright, Re(1904): 2029s. Rashid % dee, cect cavczecd cols GR Sei 6-150
Gisborne Harbour Board v Spencer [1961] N.Z.L.R. 204, CA (NZ) ..cccecceeeeeee 2-008
Gladesmore Investments v Caradon Heating [1994] 15 E.G. 159 Jc. 6-056, 6-074
Glafki Shipping Co SA vy Pinios Shipping Co No.1 (The Maira) (No.1) [1982] 1
Lioyd’s Rep..257;s[1 982 hCG S25) CAG) Seah eS ta at ohete 6-015
Glasgow, etc., Ry and London & North Western Ry. (1888) 52 J.P. 215 wo... 8-087
 Table of Cases XXXV

Glaxosmithkline Ltd y Department of Health [2007] EWHC 1470 (Comm), QBD

(Copii tend Lea al Bho] tet eee. ee ON a 2-008, 6-008
Glencore Grain Ltd v Flacker Shipping Ltd (The Happy Day); sub nom. Flacker
Shipping Ltd v Glencore Grain Ltd (The Happy Day) 2002] EWCA Civ
1068; [2002] 2 All E.R. (Comm) 896; [2002] 2 Lloyd’s Rep. 487; [2003] 1
CAG 537-4 CAN(Givi Div)
Glencore International AG v Beogradska Plovidba (The Avala) [1996] 2 Lloyd’s
Reps FOBD (Comin ik wie 2 ee eee ee) BEES tas 8-175
Glidepath BV v Thompson [2005] EWHC 818; [2005] 2 All E.R. (Comm) 833;
[2005] 2 Lloyd’s Rep. 549; [2005] 1 C.L.C. 1090, QBD (Comm) ...... 5-186, 5-187,
5-188, 7-043
Glidepath Holding BV v Thompson [2004] EWHC 2234; [2005] 1 All E.R.
(Gomi) g434 \OBD ERA ket. epee el: eee ee 4-027, 7-031, 7-096, 7-196
Gold Coast Ltd v Naval Gijon S.A. [2006] All E.R. (D) 209 .......... 7-084, 7-091, 7-092
Gold Coast Ltd v Naval Gijon SA (The Hull 53) [2006] EWHC 1044; [2007] 1 All
E.R. (Comm) 237; [2006] 2 Lloyd’s Rep. 400, QBD (Comm) .................000. 6-172
Golden Bear, The. See Excomm vy Guan Guan Shipping Pte Ltd (The Golden
Bear)
Goldsack v Shore [1950] 1 K.B. 708; [1950] 1 All E.R. 276; 66 T.L.R. (Pt. 1) 636;
LDS ONOARS SARIS 25sCoA acters atst ehrekNtcrs ideas sateen acter: am ean pene cm cree Aen eae A3-011
Goldstein v Conley [2001] EWCA Civ 637; [2002] 1 W.L.R. 281; [2001] L. & TR.
30 4(2001) (9325) MS: Gram GAN (GivaDiv) inset. eee enna eee 8-014
Golightivavyellicoe (G9) i aileRer 7 pieeeen etter eee: nena ene Bene ee 6-177
Goodman y Winchester & Alton Railway Ple [1985] 1 W.L.R. 141; [1984] 3 All E.R.
594; [1984] LCR. 842; (1984) 81 L.S.G. 2849; (1984) 128 S.J. 702, CA (Civ
Dh VeGSenoa case eiRAA easita as in ii encanta ered cant eR ah an Veitae a NMRA AR gett A ohn 7-049
Gordon Durham & Co Ltd v Haden Young Ltd, 27 Con. L.R. 109; [1991] E.G. 4
(CES ROBIN ORME a ra een ein an tch eatie: SO sae Me ete adem dante scstes Aree 6-182
Goshawk Dedicated Ltd v ROP Inc [2006] EWHC 1730; [2006] Lloyd’s Rep. IR.
RE @ DM (Commit) hee eae cctacseceeaee eee tee eee eee 7-014, 7-015, 7-018
Gouriet v Union of Post Office Workers; sub nom. Attorney General y Gouriet
O78) FALG43 525[197 7pm Wales S00 U977, 3 Allee Ree0:9 (19 77) 2 Desay:
SPR hley. a ie a Sart lai INE ne eer a nuteae l, Reeiben Te eae a eee el area ER a 6-110
Govettavakichmaondn (83) ie /gss tye leenscee se ceartare ae eaces oes Meeren see sateen ae e ene oe 6-184
Grammer va lanen 1999 iNew Bropenty@ases: 149 seen see ce seared oy een ese A3-011
Greenmar Navigation v Owners of Ships Bazias 3 and Bazias 4 and Sally Line (The
Bazias 3 and The Bazias 4) [1993] Q.B. 673; [1993] 2 W.L.R. 854; [1993] 2 All
ERS 964 a993i se eloydis Rep alle CAs (Civa Diy) ject eee ee cee 7-206
Grimaldi Compagnia di Navigazione SpA v Sekihyo Lines Ltd (The Seki Rolette)
[1999] 1 W.L.R. 708; [1998] 3 All E.R. 943; [1998] 2 Lloyd’s Rep. 638; [1998]
CAC, AEKU OY EIDY(Gros nob01)yer cr cone tnaccocchescecenanetaarerece
neesaben Gactree scaoa 7-070, 7-077
Groundshire vyVHE Construction [2001] B.L.R. 395, QBD (TCC) ......... 6-170, 7-121,
7-124, 8-086
Grupo Torras SA v Al-Sabah (No.1) [1996] 1 Lloyd’s Rep. 7; [1995] C.L.C. 1025;
995 iplTear 66 726CAS (Give Div) iccscczsnss. te ddeese see caece acs cucateceusopaeoaniasa-
hatnethe 7-034
Guardcliffe Properties Ltd v City & St James [2003] EWHC 215; [2003] 2
E.G.L.R. 16; 12003) 250E..G. 143::(2003) 147-S.J.L.B. 693, Ch Desc: aie. 5-050
Guardian Royal Assurance Group v Phillips, July 30, 1993, QBD (Comm) ......... 4-058
Gueretave Audotiva (898) 162 MeO O39 eats acre ee cee eet aatpreeseneeeaerettre-e- 6-181
Gus Consulting GmbH v Leboeuf Lamb Greene & Macrae [2006] All E.R. (D)
B3O sy eee le NAD, ead a ee meal til doe eae commer thats aean seo seR 7-195
HBC Hamburg Bulk Carriers GMBH & Co KG v Tangshan Haixing Shipping Co
Ltd (The Fu Ning Hai) [2006] EWHC 3250 (Comm); [2007] 1 All E.R.
(Comin) eZ7 OB (Gorn) esses vosctocs eros steeaienoeteter rarer eaarer te tees 6-079
XXXVI Table of Cases

HOK Sport Ltd (formerly Lobb Partnership Ltd) vy Aintree Racecourse Co Ltd
[2002] EWHC 3094; [2003] B.L.R. 155; 86 Con. L.R. 165; [2003] Lloyd’s Rep.
PN#l48. OBD. (LCE) Gat cathe ot ee ee ee Ee 8-139, 8-140, 8-148
Hackwood Ltd y Areen Design Services Ltd [2005] EWHC 2322; (2006) 22 Const.
Ie. Jh68) OBD EEG) Sirk ste eee eee ke eae ore 2-048, 7-151
Faaightelatchavaldare hn(Si) isilellen|s: Clie 420) esceeseee sees een nanan es eee enters 5-200
Halifax Financial Services Ltd v Intuitive Systems Ltd [1999] 1 All E.R. (Comm)
80832000) 25 GCleeR3 539999) hE 1467 ORD eee. cerns 2-036, 5-016
Halifax Life Ltd v Equitable Life Assurance Society [2007] EWHC 503 (Comm);
[2007] 1 Lloyd’s Rep. 528; [2007] 17 E.G. 172 (C.S.), QBD (Comm) .......... 1-012
Halki Shipping Corp v Sopex Oils Ltd (The Halki) [1998] 1 W.L.R. 726; [1998] 2
All E.R. 23; [1998] 1 Lloyd’s Rep. 465; [1998] C.L.C. 583; (1998) 142 S.J.L.B.
AA BLOGS INR Ca4 BAG (Civ Div): cseceperesssr-crcotsust ersateers saatateee ee teat Fee 5—003
Hallamshire Construction Plc v South Holland DC [2004] EWHC 8; 93 Con. L.R.
103 H@QBD (iC) wer seeet a Cee eee Mee ne ee eee Pes 8-131
Halpern v Halpern [2007] EWCA Civ 291; [2007] 3 All E.R. 478; [2007] 2 All E.R.
(Comm) 3303 )2007i eG Ga 5275 CAG (Cive Din) eee 2-088, 2-091, 2-094, 2-100
Hammond tand Watentoni(890) x62, Dede S08 ecccceeserteeeestecne eee tenant aera ees 2-029
Handley v Nationwide Anglia Building Society [1992] 2 E.G.L.R. 114; [1992] 29
1SCet AR > eens oct eae ne eT Se Es Cg ae eee TRE ie Be 5-050, 6-065, 6-070
Hannah Blumenthal, The See Paal Wilson & Co A/S y Partenreedere1 Hannah
Blumenthal (The Hannah Blumenthal)
Harbour & General Works Ltd v Environment Agency [2000] 1 W.L.R. 950; [2000]
1 All E.R. 50; [1999] 2 All E.R. (Comm) 686; [2000] 1 Lloyd’s Rep. 65; [2001]
C.L.C. 868; [1999] B.L.R. 409; (2000) 2 T.C.L.R. 811; 68 Con. L.R. 1; [2000]
ilar oem Ree 72s (1999)e9 G(s) sleessGrae3200 Gre (Give Div) eeeecce ee =7-069, 7-071, 7-073
Harbour Assurance Co (UK) Ltd v Kansa General International Insurance Co Ltd
[1993] Q.B. 701; [1993] 3 W.L.R. 42; [1993] 3 All E.R. 897; [1993] 1 Lloyd’s
Rep. 455, CA (Civ Div) ..... 1-043, 2-007, 2-008, 2-012, 2-013, 2-070, 7-028, 7-029,
A2-010
Tdaresvplileava (US oil))mlule GES 417/202 OleneeCoosa 4 eee eric were ese aeae seer 6-092
Harlow veReadi (US) tl taal)-5GP 8 9 ste srcrn ceeantes acer Sinenes pean aartidac cae ecco ea aoee 6-054
Harper Versicherungs AG (aka Harper Insurance Ltd) (formerly Turegum Versi-
cherungsgesellschaft) v Indemnity Marine Assurance Co Ltd; River Thames
Insurance Co Ltd v Indemnity Marine Assurance Co Ltd [2006] EWHC 1500;
[2006] 2 All E.R. (Comm) 225; [2006] 2 Lloyd’s Rep. 263, QBD (Comm) ... 3-017,
5-004, 5-024, 5-026
Flarrisomevs Creswicke (1557) Plcm rsa OU.9, Peccer, tetcr eer trent nee sees een ten en caret: Came 6-072
Hassneh Insurance Co of Israel v Stuart JMew [1993] 2 Lloyd’s Rep. 243, QBD
(Goma eect centers 5-139, 5-182, 5-186, 5-188, 5-198, 6-185, A2-001
Hatton v Royle (1858) 3 H. & N. 500
Hawk Shipping Ltd vy Cron Navigation Ltd [2003] EWHC 1828, QBD (Comm) .... 5—052,
6-032, 6-166
Hawley and North Staffordshire Railway (1848) 12 Jur. 389 oo... eeeeeeeeeees 4-151
Hayter v Nelson & Home Insurance Co [1990] 2 Lloyd’s Rep. 265; 23 Con. L.R.
S85, OB Wi(Comin) meus de rie ees eee eee a ote ee eee A2-012, A2-080
Heaven and Kesterton v Etablissements Francois Albiac et Cie [1956] 2 Lloyd’s
Repie3: 163 OBI Aah thr sens: esse heesh cate ce mena ee ar RMR AL COR. HMR. 6-138
Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] A.C. 465; [1963] 3 W.L.R.
101; [1963] 2 All E.R. 575; [1963] 1 Lloyd’s Rep. 485; (1963) 107 S.J. 454,
Ah eee Soe, ce reais thie detente de A rate eka coer 4-155
Heidberg, The. See Partenreederei M/S Heidberg v Grosvenor Grain & Feed Co
Ltd (The Heidberg) (No.2)
Henderson v Henderson [1843-60] All E.R. Rep. 378; (1843) 67 E.R. 313; (1843)
3: Hare: 100, Ce: Of Chameery: ia swidceaos\sceatets
pens eee Nee tz aed LEEUO 6-176
 Table of Cases XXXVI

Henderson v Merrett Syndicates Ltd (No.1); Hallam-Eames v Merrett Syndicates

Ltd; Hughes v Merrett Syndicates Ltd; Feltrim Underwriting Agencies Ltd
v Arbuthnott; Deeny v Gooda Walker Ltd (Duty of Care); sub nom. Gooda
Walker Ltd v Deeny; McLarnon Deeney vy Gooda Walker Ltd; Arbuthnott v
Fagan [1995] 2 A.C. 145; [1994] 3 W.L.R. 761; [1994] 3 All E.R. 506; [1994]
2 Lloyd’s Rep. 468; [1994] C.L.C. 918; (1994) 144 N.L.J. 1204, HL o...... 4-155
Henry Boot Construction Ltd y Alstom Combined Cycles Ltd [2005] EWCA Civ
814; [2005] 1 W.L.R. 3850; [2005] 3 All E.R. 832; [2005] 2 C_L.C. 63; [2005]
B.L.R. 437; 101 Con. L.R. 52; (2005) 102(30) L.S.G. 28, CA (Civ Div) ...... 4019
8-177
Elenny valerian (1859) OM GAAP Rep a4 5 innate teres eet ae steatee eee ee 6-165
Hewitttvoliewitt [S40] eie@ iB alll On ere Bee Aaees ohon Aha mine) ee eee 6-090
Heyman v Darwins Ltd [1942] A.C. 356; [1942] 1 All E.R. 337; (1942) 72 LL. L.
IREpMO SaiELLA tre sete eet eee RNs Pa 2-007, 2-008, 2-009, 2-078, 7-030
Hickman y Kent or Romney Marsh Sheepbreeders Association [1915] 1 Ch. 881,
CCL Penne eet ee etree re cee ener Na a Se Oh ORR See 2-051
laiOes.ve Lucolnenealsorny (IZIIH/ db IBya\S5 Se LRA | 93) anccneessbona snoenbonsonserhonbocteoeBbocenhock
ance: 4-063
EAL CIN SRva VALLES ACOZoO) eS yee Gee kon) aetna enone oteeten: ee gee anes eee neta 6-093
Higgs & Hill Building Ltd v Campbell Denis Ltd [1983] Com. L.R. 34; [1982] 28
|B De SederVA: IDG i ec de A ce Ae ee ie en ee het sae ee Ae 2-016,3-046
PMSA AL LSZS pepe line INGOe: Ler erestec rein rastesct acer oeccttcutraran cess. insse tenn d sccsneeee aes 6-181
Hiscox Underwriting Ltd vy Dickson Manchester & Co Ltd [2004] EWHC 479;
[2004] 1 All E.R. (Comm) 753; [2004] 2 Lloyd’s Rep. 438, QBD (Comm) ... 7-188
Hiscox v Outhwaite (No.1) [1992] 1 A.C. 562; [1991] 3 W.L.R. 297; [1991] 3 All
EAResO41s 199i |p2aleloydistRep was opellu sk 1-050, 6-050, 6-053, 6-065, 8-041,
A2-056, A2—085
Hiscox v Outhwaite (No.2) (Continued judgment) [1991] 1 W.L.R. 545; [1991] 3
FAITE Ray 143-4199li]Zalel ovdes) Reps 256s C.AN( Give iy isrereenteg. eee eee 8-151
Home of Homes Ltd y Hammersmith and Fulham LBC [2003] EWHC 807; 92
ConMEARP4S sO BD EGE CGE) a esccceeee 5-160, 6-002, 6-147, 6-149, 6-173, 7-121
operat Eirckmant(1324)) 21S 16a5.0 3 0Nsaleele(OS) Chests... ceveeeester-atereeee 6-093
Hopper, Re; sub nom. Barningham, Re; Wrightson, Re (1866-67) L.R. 2 Q.B. 367,
OB garter Aer an inna Aa tM ct tater eT aee: eet Reet ee dae 4-105, 4-139
How Engineering Services Ltd v Lindner Ceilings Floors Partitions Ple [1999] 2
AUC HE Res(Gomi )e3/43047 ConeleeRa Ove OBIN IGN CE) were rere eee: 5-163, 5-199
Hume v AA Mutual International Insurance Co Ltd [1996] L.R.L.R. 19, QBD ...... 7-046
Fruniterayg hice (0S 12) las WastallOOM nts eerie crest cree certs tae essence een ee eros 6-165
Hussmans(Burope)letdiy, Ahmed sPhanaon, April) 2002 2 eveesces-ceeteees sereerreurs 8-081
Hussmann (Europe) Ltd y Al Ameen Development & Trade Co; sub nom. Huss-
man (Europe) Ltd v Al Ameen Development & Trade Co [2000] 2 Lloyd’s
Rep. 83; [2000] C.L.C. 1243, QBD (Comm) .... 3-002, 3-003, 4-052, 4-059, 5024,
5-160, 5-209, 6-031, 7-125, 7-212, 8-106
Hussmann (Europe) Ltd vy Pharaon [2003] EWCA Ciy 266; [2003] 1 All E.R.
(Comm) 879; [2003] 1 C.L.C. 1066; (2003) 100(19) L.S.G. 29; (2003) 147
SelesBie29 SnGAG (Giyg Di) beeeee 3-003, 5-024, 6-166, 8-068, 8-162, 8-165
Hyundai Engineering & Construction Co Ltd vy Active Building and Civil Con-
Stractiony ete Jetda[l989)) 45uBleRo ONO BD Niece as. .fce. stan fees 3-046, A2—001
IBM Australia Ltd v National Distribution Services LTd [1991] 100 A.L.R. 361,
Siupoy, (Cle Gye INK PSSTOTO WEES ooo scence cos usapuccooas6 ekbane sdove0e6 4000.Sbog-cbanuesaconcdodoobe 1-037
IPOC International Growth Fund Ltd y OAO ‘“‘CT-Mobile” and Another, Ct of
App. of Bermuda, Nos 22, 23 of 2006, March 23, 2007 .........c:ccee 7-011, 7-062
IPCO (Nigeria) Ltd v Nigerian National Petroleum Corp [2005] EWHC 726;
[2005] 2 Lloyd’s Rep. 326; [2005] 1 C.L.C. 613, QBD (Comm) ........ 8022, 8-029,
8041, 8-042, 8-044, 8-046, 8-224
XXXVIli Table of Cases

Icon Navigation Corp v Sinochem International Petroleum (Bahamas) Co Ltd

[2002] EWHC 2812; [2003] 1 All E.R. (Comm) 405; [2003] 2 C.-L.C. 325,
OB (Comin) tie heed ete enact vaaaet co eee 5—042, 5-047, 8-145, 8-154
Ilyssia Compania Naviera SA v Ahmed Abdul-Qawi Bamaodah (The Elli 2); Kition
Compania Naviera v Ahmed Abdul-Qawi Bamaodah; Lemython Compania
Naviera vyAhmed Abdul-Qawi Bamaodah [1985] 1 Lloyd’s Rep. 107, CA (Civ
DAW) Eee ee ON 5 FR cre oes ee ae IG) Rta oe ede tenes 2-093
Impental Moana Goaletdhva [S92 MEOQIBS 59OR GA ee enemae cere edercss reste nee teeeeeree 3-006
Inco Europe Ltd v First Choice Distribution [2000] 1 W.L.R. 586; [2000] 2 All E.R.
109; [2000] 1 All E.R. (Comm) 674; [2000] 1 Lloyd’s Rep. 467; [2000] C.L.C.
1015; [2000] B.L.R. 259; (2000) 2 T.C.L.R. 487; 74 Con. L.R. 55; (2000)
O72) 1 S1Gr395 (2000) 1445S) B34 2000 NER 72) eee eee 7-053
Indescon Ltd v Ogden [2004] EWHC 2326; [2005] 1 Lloyd’s Rep. 31; [2005] B.L.R.
15:2, OBD) speed pec tan eRe ereaes. See ace oe eee ee ene a 2-114, 5-227, 5-229
Indian Oil Corp Ltd v Coastal (Bermuda) Ltd [1990] 2 Lloyd’s Rep. 407, QBD
((Gommiin pert ey eee ate eee eens PRO Se Belk Re ea oceans 5-048, 8-104, A2—065
Indian Oil Corp Ltd v Vanol Inc [1992] 2 Lloyd’s Rep. 563, CA (Civ Div)......... 2-027
Industrie Chimiche Italia Centrale vy Alexander G Tsayliris & Sons Maritime Co
(The Choko Star); Industrie Chimiche Italia Centrale v Pancristo Shipping Co
SA; Industrie Chimiche Italia Centrale vy Bula Shipping Corp [1996] 1 W.L.R.
774; [1996] 1 All E.R. 114; [1995] 2 Lloyd’s Rep. 608; [1995] C.L.C. 1461,
BIOs Ke Omnia Meercnre nee eee et eee ak ea teeter Berrie Miegs cece 3-020
Industriebeteiligungs & Handelsgesellschaft vy Malaysian International Shipping
Corp Bhd (The Bunga Melawis) [1991] 2 Lloyd’s Rep. 271, QBD (Comm) ..... 6-017
Inland Revenue Commissioners v Hunter [1914] 3 K.B. 423, KBD ...........0......... 6-166
Insurance Co v Lloyd’s Syndicate [1995] 1 Lloyd’s Rep. 272; [1994] C.L.C. 1303;
PISS) HE IRG SEIS 37, COURSDa Coovantaa)) okes sapncccceesssocecosonaacccnnneesecndeene 5-188, A2-001
Interbulk Ltd vy Aiden Shipping Co (The Vimeira) (No.1); ICCO International
Corn Co NV vy Interbulk [1984] 2 Lloyd’s Rep. 66, CA (Civ Diy) ............... 3-049
International Petroleum Refining & Supply Sdad v Elpis Finance SA (The Faith)
[1993] 2 Lloyd’s Rep. 408, QBD (Comm) ................064. 6-065, 6-069, 6-070, 6-166
International Tank and Pipe SAK vy Kuwait Aviation Fuelling Co KSC [1975] Q.B.
224; [1974] 3 W.L.R. 721; [1975] 1 All E.R. 242; [1975] 1 Lloyd’s Rep. 8; 5
BSTee tea DOWRY MS Sle aio 2e Gants (Civ 10) eee sanunccavestegincess tee 2-098, A2—109
Internaut Shipping GmbH y Fercometal Sarl [2003] EWCA Civ 812; [2003] 2 All
E.R. (Comm) 760; [2003] 2 Lloyd’s Rep. 430, CA (Civ Diy) ... 3-003, 3-017, 5-024
Investors Compensation Scheme Ltd v West Bromwich Building Society (No.1);
Investors Compensation Scheme Ltd v Hopkin & Sons; Alford v West
Bromwich Building Society; Armitage v West Bromwich Building Society
[1998] 1 WIR. 896; [1998] I All ER. 98: [1998] 1 BICC. 531° (1997)
(CAACG, AS |ISA CIN knee fod hoa) ae IN albedfy)Chek alaHlice oc nee 2-068
Ipswich BC vy Fisons Ple [1990] Ch. 709; [1990] 2 W.L.R. 108; [1990] 1 All E.R.
730; [1990] 04 E.G. 127; [1989] E.G. 159 (C.S.); (1990) 87(7) L.S.G. 32; (1990)
SASS eo oeCOAU (Civel Din crurcccsuceremcctice wnveccursielce tear aaaueeta: 2-029, 8-144, 8-149
Iran Vojdan, The. See Dubai Electricity Co v Islamic Republic of Iran Shipping
Lanesh (Pivenluai VO;Gam) arrontenn ceotuccrer tearesttncrcetoteeretsee,
eee meee ee eee 2-104
Irish Agricultural Wholesale Society v Partenreederei MS (The Eurotrader) [1987]
1 BioydrstRepr 4s GAn(Givaldiv)) reece taste secrete etuceser ieee eee ene 7-079
Irvani v Irvani [2000] 1 Lloyd’s Rep. 412; [2000] C.L.C. 477, CA (Civ Div) ... 3-006, 8-035
Islamic Republic of Iran Shipping Lines v Zannis Compania Naviera SA (The
Wzelepi) 199 |2vloyd:s Repe265, OBIDK (Comin) Mesceteecees ent ee eee 8-163
Itex Shipping Pte vy China Ocean Shipping Co (The Jing Hong Hai) [1989] 2
lov dishRepies 225 OBI) (Gomi) nese aereene tree eee eee 2-036, 5-066, 6-060
Ithaka? he7(19S89) 64 alain eRep: 25 Oe GIAGy. Weeenen.. fren nee nicer kein a. een 7-063
J Crosby & Sons Ltd vy Portland Urban DC, [1967] 5 B.L.R. 121, QBD ............ 6-088
J Jarvis & Sons v Blue Circle Dartford Estates [2007] EWHC 1262 ................... 7-059
 Table of Cases XXXIX

JD Wetherspoon Ple v Jay Mar Estates [2007] EWHC 856 (TCC); [2007] B.L.R.
2855 (2007 NIP. C653): OBD REC). AS. Ak 5-050, 5-052, 6-075, 6-076
JF Finnegan Ltd v Sheffield City Council, [1988] 43 B.L.R. 124, QBD ......0.0.0. 2-065
JH Rayner & Co v Fred Drughorn Ltd (1924) 18 Ll. L. Rep. 269, KBD ............ 5-221
JH Rayner (Mincing Lane) Ltd v Department of Trade and Industry; Maclaine
Watson & Co Ltd v Department of Trade and Industry; Maclaine Watson &
Co Ltd y International Tin Council; TSB England and Wales v Department
of Trade and Industry; Amalgamated Metal Trading Ltd v International Tin
Council [1990] 2 A.C. 418; [1989] 3 W.L.R. 969; [1989] 3 All E.R. 523; (1989)
5 B.C.C. 872; [1990] B.C.L.C. 102; (1990) 87(4) L.S.G. 68; (1989) 139 N.L_J.
PSS E989) LISS MASSy AUIS, ek tee teen et Ml eee AM leo 3-039
JM Coombs and JW Freshfield, In the matter of an arbitration between (1850) 4 Ex.
SSSMaer A at Stra hicas: Lak ete Ab nAc hte A buk ok 48 dee as CUE SARE AU ot ER 4-064
JSC Zestafoni G Nikoladze Ferroalloy Plant vy Ronly Holdings Ltd [2004] EWHC
245; [2004] 2 Lloyd’s Rep. 335; [2004] 1 C.L.C. 1146, QBD (Comm) ... 2-014, 2-110,
8-056, 8-060, 8-101
JT Mackley & Co Ltd v Gosport Marina Ltd [2002] EWHC 1315 (TCC); [2002]
B.L.R. 367; [2002] T.C.L.R. 26, QBD (TCC) ..... 1-019, 2-033, 2-036, 2-086, 5-006,
5—016, 5-024, 5-027, 5-062, 7-003, 7-155, 7-156
JacksoniveHendersons Graigesa Con(LON6) albedo 36a eyetertac.. nner eae 2 6-183
Jager v Tolme & Runge; Jager v London Produce Clearing House Ltd [1916] 1 K.B.
OSOS CON ghee Meat ete. stare ON fen inraat daaSc esas eg net ocOPO eet MAN ce AEN AOTC No 6-084
Jagger v Decca Music Group Ltd [2004] EWHC 2542; [2005] ES.R. 26, Ch D ....... 2-022,
2-079
James Allen (Liverpool) Ltd vy London Export Corp Ltd [1981] 2 Lloyd’s Rep. 632,
BION (Gom»n) enon’, Stacsocks eee ear SANE AU See cote ieee SAH 6-136
James Miller & Partners Ltd v Whitworth Street Estates (Manchester) Ltd. See
Whitworth Street Estates (Manchester) Ltd v James Miller & Partners Ltd
Japan Line Ltd v Aggeliki Charis Compania Maritima SA (The Angelic Grace);
sub nom. Japan Line Ltd vy Davies and Potter [1980] 1 Lloyd’s Rep. 288;
GTS) AI 3S ap 48 a GAS (Give Dy, i eeeeecseass bere ace tena ted aren eeete eee 6-015
Jenkmsyandibeggos Reiss) eA). ab aiilee eee et eer eee s eeeecee eae 4-151
Jewell Ghristres(i366=67)) eRay24 CrPy 296.) CGR 2s eee ee reece eee te 6-086
John Anthony Tackaberry v Phaidon Navegacion SA [1992] A.D.L.R.J. 112 ....... 4-052
John Mowlem & Co Ple v Carlton Gate Development Co Ltd, (1990) 6 Const. L.J.
2.9 SERVER his, ode 6 AO ax WR PRER, ce RO os eos A ME det ee Res MAE eco tae nance coe 7-050
John Roberts Architects Ltd vy Parkcare Homes (No.2) Ltd [2006] EWCA Civ 64;
[2006] 1 C.L.C. 333; [2006] B.L.R. 106; 105 Con. L.R. 36; (2006) 22 Const.
L.J. 343; [2006] C.I.L.L. 2323; [2006] 7 E.G. 134 (CS.); [2006] N.P.C. 13, CA
(Ging DIK) AS Sea oi Feta « 1 Sees len tee ale ap a en eA rh Oe Un roe Ca 4-166
Johnson v Gore Wood & Co (No.1); sub nom. Johnson v Gore Woods & Co [2002]
2 A.C. 1; [2001] 2 W.L.R. 72; [2001] 1 All E.R. 481; [2001] C.P.L.R. 49; [2001]
B.C.C. 820; [2001] 1 B.C.L.C. 313; [2001] PN.L.R. 18; (2001) 98(1) L.S.G.
va (2001) 98(8) L.S.G. 46; (2000) 150 N.L.J. 1889; (2001) 145 S.J.L.B. 29,
Ree Sage GS SAI LorepRES SSM ARSE CG SRR cate asecs Seles AER Aa OR aes 6-176
aia wwe Leetal ene (1NRoHKU) MIN el bOIBE SYAUN re ccgaasepooee ae douck ococate covacubbarBectincee 6-074, 6-078
JohnsoneyawWalsong (174) WillieseZaSt sessc eres. nebo eebeee.sekebeh ats tnaweers een-entnebeece=>r 6-165
Jones Engineering Services v Balfour Beatty Building LTd (1992) A.D.L.RJ.
3 30 ASAE WG TSO Td eS Py eh te toed Micat settee s Re i ct eaa 2-073
Jugoslavenska Oceanska Plovidba v Castle Investment Co Inc (The Kozara) [1974]
Q.B. 292; [1973] 3 W.L.R. 847; [1973] 3 All E.R. 498; [1973] 2 Lloyd’s Rep.
A973) AIM eS af ar GAM (Give lDivy ei tmceerrasccts nitanonnotartensmeoresieerdiaceerverteste 6-101
Jungheim Hopkins & Co v Fonkelmann [1909] 2 K.B. 948, KBD ......... ee 4-017
K/S A/S Bill Biakh v Hyundai Corp [1988] 1 Lloyd’s Rep. 187, QBD (Comm) ...... 5-094,
xl Table of Cases

K/S Norjarl A/S v Hyundai Heavy Industries Co Ltd [1992] Q.B. 863; [1991] 3
W.L.R. 1025; [1991] 3 All E.R. 211; [1991] 1 Lloyd’s Rep. 524; [1991] E.G. 20
(GES) (99a NGS 93435 CA (Give Div) meee oe 4-060, 4-062, 5-040, 5-175
Kalmneft JSC v Glencore International AG; sub nom. AOOT Kalmneft v
Glencore International AG [2002] 1 All E.R. 76; [2001] 2 All E.R. (Comm)
577; [2002] 1 Lloyd’s Rep. 128; [2001] C.L.C. 1805, QBD (Comm) ...... 5—068, 7-089,
7-092, 8-055, 8-061, 8-078, 8-173, 8-213
Kanoria v Guinness [2006] EWCA Civ 222; [2006] 2 All E.R. (Comm) 413; [2006]
Iieloyc?ssRep 01) CAG (GivADin) ie ene 5-049, 8-028, 8-030, 8-034, 8-035
Kastner v Jason; Sherman v Kastner [2004] EWCA Civ 1599; [2005] 1 Lloyd’s Rep.
397; (2004) 148 S.J.L.B. 1436; [2004] N.P.C. 181, CA (Civ Div) ....... 5-075, 6-020,
6-021
Kazakhstan v Istil Group Inc [2007] EWCA Civ 471, CA (Civ Diy) .. 1-039, 6-008, 7-005,
7-025, 7-201, 8-061, 8-103, 8-118, 8-159
Keighley Maxstead & Co and Bryant Durant & Co’s Arbitration, Re [1893] 1 Q.B.
ZA() SCA SA ed a at ee ey PE A ch ect Sr ote RE 4-015, 8-167
Keith) Beters, v2Dylan Jones, unreported Viaya22562000 eaters eeeee hoes 2eee ree 7-084
Kenya Railways v Antares Co Pte Ltd (The Antares) (No.1) [1987] 1 Lloyd’s Rep.
1OH ekOUNCE JDTI): Lentees cence dept cc isctaaetort cacecete dee saceer meted Er nano ence ts 3-003, 7-072
Kershaw Mechanical Services Ltd v Kendrick Construction Ltd [2006] EWHC
727; [2006] 4 All E.R. 79; [2006] 2 All E.R. (Comm) 81; 109 Con. L.R. 42;
PAD MOC cI 25s), lB D((TRCLO)) cecoco coor cccesouearnacte cero saoreeer 8-125, 8-126, 8-140
Keydon Estates Ltd vy Western Power Distribution (South Wales) Ltd [2004]
EWE CC99OM Chel ec ceoce tee crue-ran ere en eee mene iota te een ees 8-141, 8-145
King v Thomas McKenna Ltd [1991] 2 Q.B. 480; [1991] 2 W.L.R. 1234; [1991] 1
IAIN TBEIR, Copies Sep IRIE IR Ateh, (Cua (City IDNA) Seccstcocseccoce 5-048, 8-104, 8-166, A2—065
Kiril Mischeff v British Doughnut Co [1954] 1 Lloyd’s Rep. 237, CA ................ 4043
Kirkawa Corp v Gatoil Overseas Inc (The Peter Kirk) [1990] 1 Lloyd’s Rep. 154,
QB) (Comin) aes eee: eee eae eee ates ese 4-076, 5-134, 6-015, 7-056
itchentixapmouncwke: (IS 3il)il 7 Gham) aOOS wetness vase es ent eemeeee 3-015, 6-183
KoclallevaWatherel (G72 eZ INCOM SOO tess eeeeen eee ee eee ene oer ees 6-100
Kohn Wagschall (2006) WE Ci33565, OB (Comm) eee cece eee neers 8-012
Krohn & Co (Import-Export GmbH & Co KG) v PT Tulung Agung Indah [1992]
I lov d?suRe pas 4OBWN (Comin) Ween steer tetra cee ee ee rete eee 5-100
Kruse v Questier & Co [1953] 1 Q.B. 669; [1953] 2 W.L.R. 850; [1953] 1 All E.R.
QS (Ie] MIC konals Reeios, SOS (UO SO SEI), Aasill, OVBIDY ecco cceeoocease 2-009, 2-078
Kursell v Timber Operators & Contractors Ltd (Affidavit of Documents) [1923] 2
Ke BrZO2M (O23) eit SDL We Repm SOAs) ie ee ane ee 4.077, 7-167
Kuwait Airways Corp vy Iraqi Airways Co (No.1) [1995] 1 W.L.R. 1147; [1995] 3 All
E.R: 694; [1995] 2 Lloyd’s Rep: 317% [1995] C.L-C, 1065; [1996] 1.L.Pr 339;
(199519228) esSiGrr28: (1995) eso rsal ales i768 idle ese naaee ee eeetecentae Aaa 7-043
Kyrgyz Mobil Tel Ltd v Fellowes International Holdings Ltd [2005] EWHC
Pe cane See eA. Beart meer TEMAS eee ON ee A a koa cate tom 7-022
Kyrgyz Mobil Tel Ltd v Fellowes International Holdings Ltd (No.2) [2005] EWHC
IISFIPLAO 103 EY((Gra)anno cc qaaeemenenae comer ce cee omee Chere recee cue ese reece 8-209
ERE @Osvaliibertan(WnrtedsStates)) Saiecuccwnaveoeseaceetteeeee teetee eekee eee ere 8-050
LG Caltex Gas Co Ltd v China National Petroleum Corp; Contigroup Companies
Inc (formerly Continental Grain Co) vyChina Petroleum Technology & Devel-
opment Corp [2001] EWCA Civ 788; [2001] 1 W.L.R. 1892; [2001] 4 All E.R.
875; [2001] 2 All E.R. (Comm) 97; [2001] C.L.C. 1392; [2001] B.L.R. 325;
(2001) 3 T.C.L.R. 22; (2001) 98(25) L.S.G. 46; (2001) 145 S.J.L.B. 142, CA
(CANDID IV.) tert cetn, merece eters aurea cates 2-003, 2-006, 2-012, 5-064, 5-068, 6—032
LT&R Vowles (Parent) Ltd v Aston [2005] EWHC 1459, Ch D ........ eee 8-058
Laertis Shipping Corp v Exportadora Espanola de Cementos Portland SA (The
Laertis) [1982] 1 Lloyd’s Rep. 613; [1982] Com. L.R. 39, QBD (Comm) .... 4-027
 Table of Cases xli

Lafarge (Aggregates) Ltd y Newham LBC [2005] EWHC 1337 (Comm); [2005] 2
doy ssRepas77,.<OBDi( Comm \rakon cena kek. tee 5-005, 5-006, 8-059
Lafarge Redland Aggregates Ltd (formerly Redland Aggregates Ltd) v Shephard
Hill Civil Engineering Ltd; sub nom. Lafarge Redlands Aggregates Ltd v
Shepherd Hill Civil Engineering Ltd [2000] 1 W.L.R. 1621; [2001] 1 All E.R.
34; [2000] C.L.C. 1669; [2000] B.L.R. 385; (2000) 2 T.C.L.R. 642; 71 Con.
L.R. 86; (2000) 97(32) L.S.G. 37; (2000) 144 S.J.L.B. 247, HL ... 3-045, 3-048, 6-184
Laker Airways Inc v FLS Aerospace Ltd [2000] 1 W.L.R. 113; [1999] 2 Lloyd’s
Reps 4999 Este:Cx NPA @ BPN (Conn) eee ee ee eee 4-109, 4-125
Langham House Developments v Brompton Securities (1980) 256 E.G. 719,
CBW book ete pte eee Peet rites a Maile ie oh meen anne ind Rr 5 tetas tae eS 2-029
Lapad, The. See Atlanska Plovidba v Consignaciones Asturianas SA (The
Lapad)
LauritzenCool AB vy Lady Navigation Inc; sub nom. Lady Navigation Inc v
LauritzenCool AB [2005] EWCA Civ 579; [2005] 1 W.L.R. 3686; [2006] 1 All
E.R. 866; [2005] 2 All E.R. (Comm) 183; [2005] 2 Lloyd’s Rep. 63; [2005] 1
CAE E7585 CAM Givg Diy) ata aecees toes eae ee aecee aes SOS nee eradicate 7-195
Law Debenture Trust Corp Ple vy Elektrim Finance BV [2005] EWHC 1412; [2005]
2 All E.R. 476; [2005] 2 Lloyd’s Rep. 755; [2005] 2 C.L.C, 39, ChD .... 2-018, 7-032,
7-033, 7-038, 7-043, 7-148, 7-149, 7-151
MopNBRSOES AV LipkovaketsoynetMoyAO) AE VE tees TG sécBocosbane: codecoundpageonsedanece oneaddouceonesBonteeooae 6-092
Lawson v Wallasey Local Board (1882-83) L.R. 11 Q.B.D. 229, QBD ................. 2-079
Leach (Stanley Hugh) v Haringey LBC, The Times, March 23, 1977 ................ 6-010
Legal Services Commission v Aaronson [2006] EWHC 1162; (2006) 156 N.L.J.
953-6 (2006) E50 Saale ae444 ©)BD) Veet ee ener tenes cy eee ane 7-036, 7-055
Legis AB v V Berg & Sons; sub nom. A/B Helsingfors Legis v V Berg & Sons
Loeb WANGRS Aes AA08y, COVSIE) (Gohan viin)) gecasinncos oxconcdBedbabatosb Sousceveste 2-016, 5—006
Leibinger v Stryker Trauma GmbH [2006] EWHC 690, QBD (Comm) ... 8-184, 8-185,
8-194, 8-216
Leicester Waterworks Co v Cropstone Overseers (1875) 44 L.J. M.C. 92 w. 6-181
Leif Hoegh & Co A/S vy Petrolsea Inc (The World Era) [1992] 1 Lloyd’s Rep. 45,
@BD (Gomi) ease ee eee 5-005, 5-006, 5-010, 5-127, 6-003
Leigh v English Property Corp Ltd [1976] 2 Lloyd’s Rep. 298; (1975) 120 S.J. 64,
(Gvakon((Orhiaal DY0)ateseemsenccennneennoeaereoer
tea EeeReSROC eta: tc iacuneenanancascbatr re,Mortoce! 2-029, 4-015
ena Goldtieldss@aseisl hex 195(ieeanertcttes. ne eaee eee tree ee enter aan Wemenaee cee taes A2-002
Lesotho Highlands Development Authority v Impregilo SpA [2005] UKHL 43;
[2006] 1 A.C. 221; [2005] 3 W.L.R. 129; [2005] 3 All E.R. 789; [2005] 2 All
E.R. (Comm) 265; [2005] 2 Lloyd’s Rep. 310; [2005] 2 C.L.C. 1; [2005] B.L.R.
351; 101 Con. L.R. 1; [2005] 27 E.G. 220 (C.S.); (2005) 155 N.L.J. 1046, HL .. 1-019,
1-051, 1-052, 1-054, 2-007, 2-060, 2-070, 4-095, 4-136, 5—054,
5-106, 6-101, 6-116, 6-127, 7-002, 7-028, 7-201, 8-073, 8-074,
8-089, 8-090, 8-091, 8-105, 8-106, 8-116, 8-119, 8-121, 8-157
Lesser Design & Build v University of Surrey, 56 B.L.R. 57 .... 2-073, 5-004, 5-026, 6-177
Lewis v Haverfordwest Rural DC [1953] 1 W.L.R. 1486; [1953] 2 All E.R. 1599; 52
EGR AES (19 5S) 97 eon seOr oeOBL) Ravencect cote ttt ees eens so tiee sa eceseecmes seats 6-138
Lewis Emanuel & Son Ltd v Sammut [1959] 2 Lloyd’s Rep. 629, QBD (Comm) ..... 5-204,
6-144
Lewisham LBC vy Shephard Hill Civil Engineering Ltd, unreported, July 30, 2001,
9124BY IHB) pee Neer eer er Ore eee errr eee 5-025, 5-121
Lexair Ltd (in administrative receivership) vy Edgar W Taylor Ltd [1993] 65 B.L.R. a
STP Oe arse neta ocee seen cc tooo ence porno ate aceeeeer boon a cecepecsacoe se oeoncecnaucER cierto sci 2-053
Lexmar Corp and Steamship Mutual Underwriting Association (Bermuda) Ltd v
Nordisk Skibsrederforening [1997] 1 Lloyd’s Rep. 289, QBD (Comm) ........ 2-105
xlii Table of Cases

Lincoln National Life Insurance Co v Sun Life Assurance Co of Canada; sub nom.
Sun Life Assurance Co of Canada v Lincoln National Life Insurance Co
[2004] EWCA Civ 1660; [2006] 1 All E.R. (Comm) 675; [2005] 1 Lloyd’s Rep.
G0G (2005) p21 Ie Cy G64 GAG (Give iy) eres eeetereeha tee eres 6-176, 6-183, 6-184
Llandrindod Wells Water Co vy Hawksley (1904) 20°T.L.R. 241 oo... eee 6-069
Lobb Partnership Ltd v Aintree Racecourse Co Ltd [2000] C.L.C. 431; [2000]
BGR a654697Con wil:Rey 9 4O BW (Gomiun)eo. seo weet 2-065, 2-068
Locabail (UK) Ltd v Bayfield Properties Ltd (Leave to Appeal); Locabail (UK) Ltd
v Waldorf Investment Corp (Leave to Appeal); Timmins v Gormley; Williams
v Inspector of Taxes; R. v Bristol Betting and Gaming Licensing Committee
Ex p. O’Callaghan [2000] Q.B. 451; [2000] 2 W.L.R. 870; [2000] 1 All E.R. 65;
[2000] I.R.L.R. 96; [2000] H.R.L.R. 290; [2000] U.K.H.R.R. 300; 7 B.H.R.C.
583; (1999) 149 N.L.J. 1793; [1999] N.P.C. 143, CA (Civ Div) ... 2-013, 4-117, 4-121,
4-124
WocksvaViulliamaya (S83) sms aCea Neg O00 ie eeeeecer sees eee, eee renee et ee eee eae 6-073
L’Office Cherifien des Phosphates Unitramp SA y Yamashita-Shinnihon Steam-
ship Co Ltd (The Boucraa) [1994] 1 A.C. 486; [1994] 2 W.L.R. 39; [1994] 1
AMISH RS 20s (199A Me Dlovdis RepeZsles(1994) M380.) Bi etl eesrseeeee 5-225
London & Amsterdam Properties Ltd v Waterman Partnership Ltd [2003] EWHC
3059; [2004] B.L.R. 179; 94 Con. L.R. 154; (2004) 20 Const. L.J. 215, QBD
(AGACH aac eins ele aeciti Amer atthe rts ee aaG omersee Eee ety mee El REE ee 2-033, 5-003
London and Leeds Estates Ltd v Paribas Ltd (No.2) [1995] 1 E.G.L.R. 102; [1995]
O02 0b Ge 134 OBID Re fae Akt taco dete cect oe et ee ee 5-187, 5-189, A2—001
London Export Corp v Jubilee Coffee Roasting Co [1958] 1 W.L.R. 661; [1958] 2
AEA Aea 953i i eloydisaRep: 3670955) S026S.) 452 @ AS ees 5-039, 5-090
London Sack & Bag Co v Dixon & Lugton Ltd [1943] 2 All E.R. 763, CA ........ 2-051
London Underground Ltd v Citylink Telecommunications Ltd [2007] EWHC
UE CANCE) VO]SIDA CC) eee amen eo eee eae 2-069, 8-080, 8-126
Lonrho Ltd v Shell Petroleum Co Ltd (Stay of Proceedings) The Times, February
lel ROOF ate dese tb Staines AMR ac ices pitta. tins ath ila torent halanteatin aese 2-004
Lorne Stewart Ltd v William Sindall Plc, [1986] 35 B.L.R. 109; [1986] 11 Con.
WARE 699 OBIS) SeBerraserceeeniee ie ee eee arta ee Reena sama eet ce ec eee neater eee 6-182
Losinjska Plovidba Brodarstovo DD v Valfracht Maritime Co Ltd (The Lipa)
(ZOOM PZeEloy disse pali7e Oi D)i(Comnn)saeeraees teat een ee nee 1-015
Louis Dreyfus Trading Ltd v Reliance Trading Ltd [2004] EWHC 525; [2004] 2
ElOvarSaeps 2415-. OB) (Coma) mene tentecaee eee a eae eae eee eed 8-163
Lovell Partnerships (Northern) Ltd y AW Construction Plc, 81 B.L.R. 83, QBD
(Goma) te eaten ee eet tmten pete ae OR eR eee oe ee ee ak 5—042
Lovelock (EJR) v Exportles [1968] 1 Lloyd’s Rep. 163, CA (Civ Diy) ...... 2-058, 2-068,
2-104
Luanda Exportadora SARL v Wahbe Tamari & Sons Ltd [1964] 2 Lloyd’s Rep.
FS)? eR REE AE rosa ast ck Pena i MER Shas ee icesBee Be CRE cee ery eee 2-016
MJ Gleeson Group Ple vy Wyatt of Snetterton Ltd (1994) 42 Con L.R. 14 2.00.0... 2-073
M/S Alghanim Industries Inc v Skandia International Insurance Corp [2001] 2 All
Res (Gomi) 0 OBDi(Gomumn) eae Aon erie arn vecet notes © tet etree: 6-155
Mabey & Johnson Ltd v Danos [2007] EWHC 1094 (Ch), Ch D .............. 2-075, 2-078
Macepark (Whittlebury) Ltd v Sargeant (No.1) [2002] W.L. 1876043 000... 2-081
McKellar and Westerman Ltd v Rosemary Dawn Eversfield [1994] A.D.R.L,J.
LEAD Eaceseanieres caestcesenee Rhea ne pen ta rcotee eee rete Sete ath re sac a a ee ree 7-010
McLaughlin & Harvey v P&O Developments (formerly Town & City Properties
Developments), [1991] 55 B.L.R. 101; 28 Con. L.R. 15, QBD (Comm) ...... 5-006,

McLean Homes South East Ltd v Blackdale Ltd, HT00/470, QBD (TCC) ....... 1-054

OBI i... MELANIE, TK ONS A ROR Mosaic a oatealndias etait 4.017

 Table of Cases xiii

Macob Civil Engineering Ltd v Morrison Construction Ltd [1999] C.L.C. 739;
[1999] B.L.R. 93; (1999) 1 T.C.L.R. 113; 64 Con. LR. 1; [1999] 3 E.G.L.R.
7; [1999] 37 E.G. 173; (1999) 15 Const. L.J. 300; (1999) 96(10) L.S.G. 28,
ORD CECE RAR Ae LAG, Ras OO SE Ae 2-033, 2-034, 6-002, 7-198
Magill v Weeks. See Porter vy Magill
Mallozzi v Carapelli SpA [1976] 1 Lloyd’s Rep. 407, CA (Civ Div) .....ccccccee. +016
Mangistaumunaigaz Oil Production Association vy United World Trading Inc
NGOs ei Mord aReps 6k O BD: (Comin initia adic ierantecn 2-068
Mantovani v Carapelli SpA [1980] 1 Lloyd’s Rep. 375; (1979) 123 S.J. 568, CA (Civ
DENA ot nh tee te Meee I Ic seaseeasceen ANN aD, RANG Mees cv dias 2-078
Marc Rich & Co AG v Beogradska Plovidba (The Avala) [1994] 2 Lloyd’s Rep. 363,
OB s(Cominn) ese 5. cae hs Se th TR a OE Deane, 8-128
Marc Rich & Co AG vy Societa Italiana Impianti SpA (C190/89) [1992] 1 Lloyd’s
Repwoa2s LOGON EEGResas soos OO ele rs 24s b Cliaeeensn
eens v: 2-105, 7-013
Marc Rich & Co AG y Societa Italiana Impianti SpA (The Atlantic Emperor)
(No.2) [1992] 1 Lloyd’s Rep. 624; [1992] LL.Pr. 544, CA (Civ Div) ............ 2-105
Marc Rich Agricultural Trading SA vy Agrimex Ltd, April 6, 2000 ........... 8-153, 8-163
Margulead Ltd v Exide Technologies [2004] EWHC 1019; [2004] 2 All E.R.
(Comm) 727; [2005] 1 Lloyd’s Rep. 324, QBD (Comm) ......... 5-036, 5-207, 5-213,
6-031, 8-084, 8-093, 8-107, 8-111
Margulies Bros Ltd v Dafnis Thomaides & Co (UK) Ltd (No.2) [1958] 1 W.L.R.
398; [1958] 1 All E.R. 777; [1958] 1 Lloyd’s Rep. 250; (1958) 102 S.J. 271,
OBD (Gomme eee. dirk eee ee Lace aes ta a 6-090, 8-012
Maria, The. See Everglade Maritime Inc v Schiffahrtsgesellschaft Detlef von
Appen GmbH (The Maria)
Mariana Islands Steamship Corp v Marimpex Mineraloel-Handels GmbH & Co
KG (The Medusa) [1986] 2 Lloyd’s Rep. 328, CA (Civ Div) ................0:006 7-073
Marine Contractors Inc v Shell Petroleum Development Co of Nigeria Ltd [1984]
ZaWlovdesVREps Jian (lO 84) cS ielenss Gran44-5 Coun (Crys Divi) ied eranee: 2-063, 6-008
Maritime Transport Overseas GmbH y Unitramp SA (The Antaios); Salen Reder-
ierna AB v Antaios Compania Naviera SA; Salen Dry Cargo AB v Unitramp;
Salen Dry Cargo AB v Salen Rederierna AB; Salen Rederierna AB vy Salen
Dry Cargo AB; Unitramp v Salen Dry Cargo AB; Unitramp SA Maritime
Transport Overseas GmbH [1981] 2 Lloyd’s Rep. 284; [1981] Com. L.R. 160,
OBE (Gomi) pei eee, Se eas. Se ae ae ee ee hac 6-146
Markel International Co Ltd v Craft (The Norseman) [2006] EWHC 3150
(Comm); [2007] Lloyd’s Rep. I.R. 403, QBD (Comm) ............ 7-014, 7-015, 7-016
Markdandelerd wavarginekeraletdi(Z003] EPWHE R428 e ks se eset aecedsuee 8-136
Marques de Bolarque, The. See Cia Maritima Zorroza SA v Sesostris SAE (The
Marques de Bolarque)
Martin (Dec’d) v Boulanger (1882-83) L.R. 8 App. Cas. 296, PC (Mau) ............. 6-183
Matalimex Foreign Trade Corp v Eugenie Maritime Ltd [1962] 1 Lloyd’s Rep. 378,
COBDS (Comin), ancien seccencestetnaoeece auteurs Son,tase cokse acaote se eNoe ace 5—006
IMatsontave lUinower (S824) §Riva So Moom Uietrety cc. easet crete: ttcrtsseecdinn
teres ene es«tao 6-073
May & Hassell Ltd (No.1) v Vsesojuznoje Objedinenije Exportles (1940) 66 LI. L.
Repl 03g BID) 2 ML ee Rs RE aod OM ite. cope tras kore eeaesteuctet eyeoco ened 2-037
May & Hassell Ltd (No.2) v Vsesojunznoje Objedinenije Exportles (1941) 69 LI. L.
REPS O2 MIB) ELA ARE ee Stat PPE ect easeecaee eae tanieoccoeecose enter sean a3 2-037
AVia vane Vin SpOIA: yi OeULE RRB Mes arte cc ee cee sttseiocasaeerselomtesaeeasane
ites scueesatetecnta re 2-021
Medicaments and Related Classes of Goods (No.2), Re. See Director General of
Fair Trading v Proprietary Association of Great Britain
Mediterranean and Eastern Export Co Ltd v Fortress Fabrics (Manchester) Ltd
[1948] 2 All E.R. 186; (1947-48) 81 LI. L. Rep. 401; 64 T.L.R. 337; [1948]
W.N? 244; [1948] T2J.R1536;(1948) 92 SJ..362; KBD... 2-029, 6-076
Medov Lines SpA v Traelandsfos A/S [1969] 2 Lloyd’s Rep. 225, QBD (Comm) ..... 7-095
xliv Table of Cases

Melton Medes vy Securities and Investments Board [1995] Ch. 137; [1995] 2 W.L.R.
247 ALLOOS ESP AMEER 9880; (GhuDe Bee.
Pete taetsoncees aoe rates 4-154, A2—030
Merak, The. See TB&S Batchelor & Co Ltd v Owners of the SS Merak (The
Merak)
Merton LBC vy Stanley Hugh Leach Ltd, (1986) 2 Const. L.J. 189, Ch D........... 6-088
Metal Distributors (UK) Ltd vyZCCM Investment Holdings Ple [2005] EWHC
156; [2005] 2 Lloyd’s Rep. 37, QBD (Comm) ...... 2-072, 3-040, 6-016, 6-084, 8-037,
8062
Metalfer Corp v Pan Ocean Shipping Co Ltd [1998] 2 Lloyd’s Rep. 632; [1997]
CUAG ALS 74. OBDs (Conny) Meee nate tee eee eee cate eee nnsenenta meena erat 5—006
Metro-Cammell Hong Kong Ltd v FKI Engineering Ple (formerly Stone Inter-
MationalyPle)s 77abssles Reno OED) (ORY eeseee eas ceeteccctasedcaan tad eee ee 6-137
Mexicorva Metalclad’'Corpaunreportediiaya2 a2001i peat nvee-eree. ooo eee ke eae are 8-052
Michael S Eyryalos Maritime Ltd v China Pacific Insurance Co Ltd (The MV
Michael S), unreported, December 20, 2001, QBD (Comm) .................0.08. 2-056
Mid Glamorgan CC y Land Authority for Wales, 49 B.L.R. 61; 32 Con. L.R. 50,
(1)Dare eee apr 8 2.)rn Sas ee ee 0 dR RCRA ear A MMP PE PRE eerie oe See ee 2-086
Middlemiss & Gould v Hartlepool Corp [1972] 1 W.L.R. 1643; [1973] 1 All E.R.
ZA MOT2 el GES IS 960s GAs (Give iw) Bee. pee ween. ne Bema ae ton tet eeee 8—005
Miliangos v George Frank (Textiles) Ltd (No.1) [1976] A.C. 443; [1975] 3 W.L.R.
758; [1975] 3 All E.R. 801; [1976] 1 Lloyd’s Rep. 201; [1975] 2 C.M.L.R. 585;
CUTS ORS ee 7 AREIe ee meee ke. Rete. cranes. ect eee Ee 6-101
Miller Construction Ltd v James Moore Earthmoving; sub nom. James Moore
Earthmoving v Miller Construction Ltd [2001] EWCA Civ 654; [2001] 2 All
Wak, (Conmen)) SOE IPA) BRA SA (CAN (Gi DIN) con. coerce eeecssasoess 7-111, 7-132
Minerals and Metals Trading Corp of India Ltd y Encounter Bay Shipping Co Ltd
(The Samos Glory) (No.2) [1988] 1 Lloyd’s Rep. 51, QBD (Comm) ............ 6-011
Minermet SpA Milan v Luckyfield Shipping Corp SA [2004] EWHC 729; [2004]
2 Lloyd’s Rep. 348; [2004] 2 C.L.C. 421, QBD (Comm) .. 4-028, 4-037, 7-091, 7-099
MinesrandsRobentsompihes (S54) la @eltan 45) laneennte = aeeeree teenage 3-027
Minister of Materials v Steel Brothers & Co [1952] 1 Lloyd’s Rep. 87; [1952] 1
R499 SILOSQU WVEING M14 CAN Ge 6a ees eae Eee. e oceee es SPR NS EO 5—007
Minister of Public Works of Kuwait v Sir Frederick Snow & Partners [1984] A.C.
426; [1984] 2 W.L.R. 340; [1984] 1 All E.R. 733; [1984] 1 Lloyd’s Rep. 458;
[1984] C.I.L.L. 79; (1984) 81 L.S.G. 1044; (1984) 134 N.L_J. 499; (1984) 128
SJORL SH TEN toh See eee ate, 0B Rt hs Mitt ca Res RS 1-050
Minmetals Germany GmbH v Ferco Steel Ltd [1999] 1 All E.R. (Comm.) 315;
999 KGa: Cx64/9 OBIDs(Conn) eeneereee eater veteee ee 8-035, 8-036, 8-039, 8-044
Miranos International Trading Inc vy VOC Steel Services BV [2005] EWHC 1812,
BD (Comm) erent. eerie ee, cen eae 8-128, 8-133, 8-151, 8-153, 8-163
Mirpicivalass, 5 61Gons LAR © BID (OR) iprancscawteceneter
cetera eee oe.2 eetee at 5—049
Mitsubishi Corp v Castletown Navigation (The Castle Alpha) [1989] 2 Lloyd’s Rep.
BSS OBA Commi): smarter tere pweseas ener enti taeascenae eee, seca. Ones 2-093, 2-098
Mitsubishi Motors Corp. v Soler Chrysler Plymouth Inc. [1985] 473 U.S. 614 ..... 1-037
Modern Building (Wales) Ltd vy Limmer & Trinidad Co Ltd [1975] 1 W.L.R. 1281;
[1975] 2 All E.R. 549; [1975] 2 Lloyd’s Rep. 318; (1975) 119 S.J. 641, CA (Civ
Divs) ake Sea hice es oer, te ree ieee eet ate 9 te SY 2-048, 2-053
Modern Trading Co v Swale Building and Construction [1992] A.D.R.L.J. 174; 24
Gongs Reso SOB Ries ut cept daacaaccite ceete nein tek yaad ee 4-101, 6-017
Monella v Pizza Express (Restaurants) Ltd [2003] EWHC 2966; [2004] 1 E.G.L.R.
435 (2004) 12: EGe 17254 Gh Dy seaman se. eee EERE 7-069
Montedipe SpA v JTP-RO Jugotanker (The Jordan Nicolov) [1990] 2 Lloyd’s Rep.
LL OBL) (Com) #4. treet ete ee edecen tenes Ae, Set 3-018, 3-019, 8-163
Montgomery Jones & Co v Liebenthal & Co [1898] 1 Q.B. 487; (1898) 78 L.T. 406,
GCA. Lascee FE thor A ew al etalon ee el eshte 8-166
 Table of Cases xlv

Montrose Canned Foods v Wells (Eric) (Merchants) [1965] 1 Lloyd’s Rep. 597,
OBD sdk ish, Ai lec dntaeh CUM Bale 5-042, 5-049, 5-203, 6-090, 6-091
Mooney v Henry Boot Construction Ltd (No.1); Kelston Sparkes Contractors Ltd
v Balfour Beatty Contractors Ltd; sub nom. Henry Boot Construction Ltd v
DF Mooney [1997] C.L.C. 183;,[1996] N.P.C. 116, GA (Giv Div) ....2...00.1 5-050
Morpanive Sinithn(842)-OENVICaiWRAD 7s eee ee ee eee 6-153
Morgan? Williamatrison (td [190722 Gh 137. GAPN,...1). 284. ee 2-008
Morrisey" Eianris*|192, 7A) C252 FID Rok. errno conn nnneinunhernananeeennes 3-008, 3-031
Morrison vy AWG Group Ltd (formerly Anglian Water Plc). See AWG Group Ltd
(formerly Anglian Water Plc) v Morrison
Moscow City Council v Bankers Trust Co. See Department of Economic Policy and
Development of the City of Moscow v Bankers Trust Co
Mosvolds Rederi A/S v Food Corp of India (The Arras and The Hoegh Rover)
(Now) ial SOM ebloyaessve platen © 10a(Gorin) mee eset eee eneee eee 5-127
Moundreas & Co SA v Navimpex Centrala Navala [1985] 2 Lloyd’s Rep. 515, QBD
(GOSTOTTD in dteetnen pena cine i maranitiete At anther armen Remmeyr, ilareh que an Suns"aR arb et eR a 6-184
Mount Charlotte Investments Ple vy Prudential Assurance Co [1995] 1 E.G.L.R. 15;
SST EM) BelGe AA II) INSGaLeXE'sTlOMAGH TY set eds de Sbcistrsic ri Ansberasteibaceeuolone 6-076
Mousaka Inc v Golden Seagull Maritime Inc [2002] 1 W.L.R. 395; [2002] 1 All E.R.
726; [2001] 2 All E.R. (Comm) 794; [2001] 2 Lloyd’s Rep. 657; [2001] C.L.C.
NAG (ACD olkewib INETeale AUSF, OUD A(Crarsavem)): sieacdlancctseosselsbonect eionseeeebinccehansterde 1-039
Mulchrone v Swiss Life (UK) Plc [2005] EWHC 1808; [2006] Lloyd’s Rep. LR.
5595 OBIE (Comin pease cee crete eee eee teeters ie ene re et eee eee ee 3-014
Multitank Holsatia, The See Tankreederei Ahrenkeil GmbH y Frahuil SA (The
Multitank Holsatia)
Mutual Shipping Corp of New York v Bayshore Shipping Co of Monrovia (The
Montan) [1985] 1 W.L.R. 625; [1985] 1 All E.R. 520; [1985] 1 Lloyd’s Rep.
189; (1985) 82 L.S.G. 1329; (1985) 129 S.J. 219, CA (Civ Div) .. 6-033, 6-034, 6-167,
6-169, 8-169, 8-172
NB Three Shipping Ltd v Harebell Shipping Ltd [2004] EWHC 2001; [2005] 1 All
E.R. (Comm) 200; [2005] 1 Lloyd’s Rep. 509; [2005] 2 C.L.C. 29, QBD
(orm) ynesys chester reeset ow Scans see eee hee CAR care 2-017, 5-133, 7-038, 7-192
NBP Development v Buildko & Sons (formerly Townson & Sons) (In Liquidation)
(9928 Gonsteslee| aSip mea cence Rect ae came... egersee ner Rede aetna ate oes 3-017
NV Handels-en-Transport Maatschappij Vulcaan v J Ludwig Mowinckels Reder1
AY SHdl98 822 All ARS 15231938) OO nlEla ee Reps 217. EUS care. ese 4-041, 4-141
NV Reederij Amsterdam v President of India. See Reederij Amsterdam NV v
President of India (The Amstelmolen)
Nagusina Naviera v Allied Maritime Inc [2002] EWCA Civ 1147; [2003] 2 C.L.C.
1A (Ctivgal) i) Vee ae ee eee ores eerie ae aati ee 8214
National Bank of Greece SA v Pinios Shipping Co No. 1; sub nom. Pinios Shipping
Co No. 1 v National Bank of Greece SA [1990] 1 A.C. 637; [1989] 3 W.L.R.
1330; [1990] 1 All E.R. 78; [1990] 1 Lloyd’s Rep. 225; [1988] 2 FT.L.R. 9;
[1988] Fin. L.R. 249; [1990] C.C.L.R. 18; (1990) 87(4) L.S.G. 33; (1989) 139
INR LTR a1990) AGACS AZO MAN csesteree dens iaite vasa, ties netaesoprapreaeeasteaxkeen 6-128
National Boat Shows Ltd v Tameside Marine, August 1, 2001, QBD (Comm) .... 2-036,
2-039, 4-082, 6-056, 6-074
National Insurance & Guarantee Corp Ltd v M Young Legal Services Ltd [2004]
1 WELG 29722 [200512 WloydishRepaad6, OBDIR Er... scrsertst-reteeoss sat 5-133, 7-196
Nature Conservancy Council for England v Deller [1992] 43 E.G. 137 ...... 6-070, 8-161
Naviera Amazonica Peruana SA vy Compania Internacional de Seguros del Peru
[1988] 1 Lloyd’s Rep. 116; [1988] 1 FT.L.R. 100, CA (Civ Diy) ....... 2-027, 2-095,
2-100, 2-101, 2-102, 2-103, 2-107
Navigation Maritime Bulgare v Rustal Trading Ltd (The Ivan Zagubansk:) [2002]
1 Lioyd’s Rep. 106, QBD (Comm) ..........cccccesseceseeccsneesoesneneeseeseeeteees 2-105, 7-015
xlvi Table of Cases

Navigazione Alta Italia SpA vy Concordia Maritime Chartering AB (The Stena

Pacifica) [1990] 2 Lloyd’s Rep. 234, QBD (Comm) .................. 2-067, 7-072, 7-079
Nea Agrex SA y Baltic Shipping Co Ltd (The Agios Lazarus) [1976] Q.B. 933;
[1976] 2 W.L.R. 925; [1976] 2 All E.R. 842; [1976] 2 Lloyd’s Rep. 47; (1976)
1203S Je 35, GAN Givi) saeet we csst ose BEtAMEY cpeer 5-022, 7-079
Neall v Richardson; sub nom. Neale vy Richardson [1938] 1 All E.R. 753, CA ..... 7-120
Newfield Construction Ltd vy Tomlinson [2004] EWHC 3051; 97 Con. L.R. 148,
OBI CC) eserehe esas AesRees etnies ehecs 5-037, 5-120, 6-029, 6-138, 6-140, 8-078
Nicki R, The. See Damon Compania Naviera SA y EAL Europe Africka Line (The
Nicki R)
Nikko Hotels (UK) Ltd v MEPC Plc [1991] 2 E.G.L.R. 103; [1991] 28 E.G. 86,
[@) elBear ctype dae: os Setccs eenee eo 5 ee nee ete eee ee Fe ene Umereemne oe 2-031
Nine Gladys Road Ltd v Kersh [2004] EWHC 1080, Ch D ........ 2-017, 2-068
Nisshin Shipping Co Ltd v Cleaves & Co Ltd [2003] EWHC 2602; [2004] 1 All
E.R. (Comm) 481; [2004] 1 Lloyd’s Rep. 38; [2003] 2 C.L.C. 1097; (2003) 153
INGIE RAUF <(O) 83DC Gorsabeti) Assyge ee eee a oe eR eee eee 3-014
Noble Assurance Co v Gerling-Konzern General Insurance Co [2007] EWHC 253
(Comm); [2007] 1 C.L.C. 85, QBD (Comm) ... 2-106, 6-176, 7-010, 7-011, 7-013,
7-014, 7-015, 7-061, 8-051
Norbrook Laboratories Ltd vy Tank [2006] EWHC 1055 (Comm); [2006] 2 Lloyd’s
Rep. 485; [2006] B.L.R. 412, QBD (Comm) .... 4-110, 5-041, 5-042, 5-049, 5-099,
5-199, 6-029, 6-031, 7-113, 7-117, 7-118, 7-124, 7-132, 8-072,
8—098
Norsk Hydro ASA y State Property Fund of Ukraine [2002] EWHC 2120, QBD
(Adina) eerer see ttensaccensec eater errand eee oer 3-038, 8-023, 8-026, 8-224
North Eastern Cooperative Society v Newcastle Upon Tyne City Council [1987] 1
Es Ge RoR A? 6 (19 SUN PZ 8 2a Crs UO rencawee occas cseevaee ces enrcccee seats te ten semen rec, 2-029
North Range Shipping Ltd vy Seatrans Shipping Corp (The Western Triumph)
[2002] EWCA Civ 405; [2002] 1 W.L.R. 2397; [2002] 4 All E.R. 390; [2002]
2 All E.R. (Comm) 193; [2002] 2 Lloyd’s Rep. 1; [2002] C.L.C. 992; (2002)
9920) less:Gas len GNe( Givi ive eee 1-039, 1-054, 7-201, 8-118, 8-152, 8-159
Northern Pioneer, The. See CMA CGM SA y Beteiligungs KG MS Northern
Pioneer Schiffahrtsgesellschaft mbH & Co
Northern RHA v Derek Crouch Construction Co Ltd [1984] Q.B. 644; [1984] 2
W.L.R. 676; [1984] 2 All E.R. 175; [1986] C.I.L.L. 244; (1984) 128 SJ. 279,
COAM (Give Diy). Sr eerrerc con teeth er eae trices eee Oe eine had St RTE Soe 2-085, 6-182
Nova (Jersey) Knit Ltd v Kammgarn Spinnerei GmbH [1977] 1 W.L.R. 713; [1977]
Z All E.R: 463;°[(1977] 1 Lloyd’s Rep: 463; (1977) 121 S.J. 170; HL 2.20: 2-097
Nye Saunders & Partners v AE Bristow, [1987] 37 B.L.R. 92, CA (Civ Div) ...... 4-125
ONGC v Western Co of North America (1987) All India Rep. S.C. 674 2.0.0.0... 7-062
OT Africa Line Ltd v Magic Sportswear Corp [2005] EWCA Civ 710; [2006] 1 All
E.R. (Comm) 32; [2005] 2 Lloyd’s Rep. 170; [2005] 1 C.L.C. 923; 2005
AM Gr 2 179 GA (Give LDivyck era ee ee ee 7-013, 7-015, 7-017
Oakland Metal Co v D Benaim & Co [1953] 2 Q.B. 261; [1953] 3 W.L.R. 475;
[1953] 2 All E.R. 650; [1953] 2 Lloyd’s Rep. 192; (1953) 97 S.J. 540, QBD ....... 3-021,
4-017, 44034, 7-081
O’Callaghan v Coral Racing Ltd, The Times, November 26, 1998; Independent,
INovembereZ On l9986 GAN (Give Div) giscces.sseeuccccoveecsuepeee
cacenewene teaecreeetees 1—008, 2-013
Oceanografia SA de CV vyDSND Subsea AS (The Botnica) [2006] EWHC 1360;
[2007] 1 All E.R. (Comm) 28; [2007] 1 Lloyd’s Rep. 37, QBD (Comm) ...... 2-042
©; Gonnorand) Whitlaweke (lO SSSaReB al242a cet eer a alee eee 6-078
Oliver ve Collmesi(L 880) Wasting Oia: fe eeadatect..€..
tude. nebenecnes. cbarties 4-046, 4-048
Omnibridge Consulting Ltd vy Clearsprings (Management) Ltd [2004] EWHC
MapKoe OVeIDLCGrosnavanl Sect tersnocoom one ene eCRoer ee o one 5-050, 5-051, 6-175, 8-082
Omnium de Traitement et de Valorisation SA vy Hilmarton Ltd [1999] 2 All E.R.
(Comm) 146; [1999] 2 Lloyd’s Rep. 222, QBD (Comm) .......... 8-032, 8-044, 8-036
 Table of Cases xl vii

Oranie, The and Tunisie, The. See Compagnie Nouvelle France Navigation SA v
Compagnie Navale Afrique du Nord (The Oranie and The Tunisie)
Oricon Waren-Handelgesellschaft MbH v Intergraan NV [1967] 2 Lloyd’s Rep. 82,
GBA Comma eee ee ses et eee ee 6-090
Orion Compania Espanola de Seguros v Belfort Maatschappij voor Algemene
Verzekgringeen [1962] 2 Lloyd’s Rep. 257, QBD (Comm) .................. 4-141, 4-151
Othieno (Chrisphine) vy G Cooper & M Cooper, [1991] 57 B.L.R. 128; [1991] 27
Corso eS ROBDie i reel Mopaile Coen Re Sa btaeh ty Rte IS 2 uy eae oe 7-049
Outwing Construction Ltd vy H Randell & Son Ltd [1999] B.L.R. 156; 64 Con.
Re Som lOOON aeons: ea| 3080. QBs (CLEC) ite, Brac dere ee aees 2-034
Overseas Fortune Shipping Pte y Great Eastern Shipping Co (The Singapore
Forging) (Oeil bdoyvdic Repa2 0, OBWs(Goniny nevis. eaten eas 2 5-045, 6-008
Overseas Union Insurance y AA Mutual International Insurance [1988] 2 Lloyd’s
REPEOS LOS [mieletne 47 leat) IDE (COII ey yee.sss see. see eee rece: 2-069, 2-072, 2-076
Owners of Cargo Lately Laden on Board the MV Delos vy Delos Shipping Ltd
[2001] 1 All E.R. (Comm) 763; [2001] 1 Lloyd’s Rep. 703, QBD (Comm) ... 2-056
Owners of the Annefield vyOwners of Cargo Lately Laden on Board the Annefield
[1971] P 168; [1971] 2 W.L.R. 320; [1971] 1 All E.R. 394; [1971] 1 Lloyd’s
Rega leu HAR (Ervin D1 ee Rivet ea eae ee ene, Meare Mad Sind ants toe eth he 2-056, 2-057
Owners of the Eleftherotria vyOwners of the Despina R; sub nom. Services Europe
Atlantique Sud (SEAS) v Stockholms Rederi AB Svea (The Folias) 1979] A.C.
685; [1978] 3 W.L.R. 804; [1979] 1 All E.R. 421; [1979] 1 Lloyd’s Rep. 1;
(L973) A 2OES IE TS Sip ALLL) OF 2A NMA ate ek Ree SA OR oe RS 6-101
Owners of the MV Myron y Tradax Export SA (The Myron) [1970] 1 Q.B. 527;
[1969] 3 W.L.R. 292; [1969] 2 All E.R. 1263; [1969] 1 Lloyd’s Rep. 411; (1969)
LISS 24043 OB e(Com) Ses ot eekosl as eet aah oe 4-146, 5-203, 5-204
Owners of the Vasso vy Owners of Cargo Lately Laden on Board the Vasso [1984]
Q.B. 477; [1984] 2 W.L.R. 570; [1984] 1 All E.R. 1126; [1984] 1 Lloyd’s Rep.
235211984), Sess,Ge 592. (1984) 1281S) 260s CAU(Cive Div eee eon. 5-081
Owners of the Vasso vyOwners of Cargo Lately Laden on Board the Vasso [1984]
Q.B. 477; [1984] 2 W.L.R. 570; [1984] 1 All E.R. 1126; [1984] 1 Lloyd’s Rep.
235; (1984) 81 L.S.G. 592; (1984) 128 S.J. 260, CA (Civ Div) ........... 7-167, 7-172
Owusu vy Jackson (t/a Villa Holidays Bal Inn Villas) (C281/02) [2005] Q.B. 801;
[2005] 2 W.L.R. 942; [2005] 2 All E.R. (Comm) 577; [2005] 1 Lloyd’s Rep.
AS72005 Px Ge Rel=138538 (2005) 1sGal C2465 (2005) LE Pra 25. BG) e.- 7-012
Oxford Shipping Co Ltd v Nippon Yusen Kaisha (The Eastern Saga) (No.2) [1984]
3 All E.R. 835; [1984] 2 Lloyd’s Rep. 373, QBD (Comm) .... 5-182, 5-198, A2—001
PPG Industries Inc vy Pilkington Plc, unreported, November 1, 1989, Comm. Ct ..... 4-125
PT Putrabali Adyamulia v Societe est Epices; PT Putrabali Adyamulia v Enrico
Webb James SNC [2003] 2 Lloyd’s Rep. 700, QBD (Comm) ..............:::06 8-148
Paal Wilson & Co A/S vy Partenreederei Hannah Blumenthal (The Hannah Blu-
menthal) [1983] 1 A.C. 854; [1982] 3 W.L.R. 1149; [1983] 1 All E.R. 34; [1983]
1 Lloyd’s Rep. 103; [1983] Com. L.R. 20; (1982) 126 S.J. 835, HL ... 4-089, 5-224,
5-229
Pacol Ltd v Joint Stock Co Rossakhar [1999] 2 All E.R. (Comm) 778; [2000] 1
Lloyd’s Rep. 109; [2000] C.L.C. 315, QBD (Comm) ............... 5-050, 5-109, 5-120
Pacol Ltd v Joint Stock Co Rossakhar [1999] 2 All E.R. (Comm) 778; [2000] 1
Lloyd # Rep, 1092 (2000) C.LC. 315,°QBD (Comm) ct. eaters 7-125
Paczy v Haendler & Natermann GmbH (No.2) [1981] 1 Lloyd’s Rep. 302; [1981]
orien 2a LOST EAS aRee2 50 MGAG (Give iy) see etetee ween eece see ceeces rere 7-046
Padre Island) (No.1), The. See Socony Mobil Oil Co Inc v West of England Ship
Owners Mutual Insurance Association (London) Ltd (The Padre Island)
(No.1)
Padre Island) (No.2), The. See Socony Mobil Oil Co Inc v West of England
Shipowners Mutual Insurance Association (London) Ltd (The Padre Island)
(No.2) QBD (Comm)
xlvill Table of Cases

Palacath Ltd v Flanagan [1985] 2 All E.R. 161; [1985] 1 E.G.L.R. 86; (1985) 274
B.Ge 1438-1985) als SNL es6st OBDIS teks, Sen. Ree SRS 2-029
Pan Atlantic Group v Hassneh Insurance Co of Israel Ltd [1992] 2 Lloyd’s Rep.
2.0 GAL (Gisy TDI) Se cu roees vanek ccs tee easter sheen oo 4017
Panchaud Freres SA vy Etablissements General Grain Co [1970] 1 Lloyd’s Rep. 53,
GAP(GIV Div)cok, LR RES EN Re. Soest ae ee eee ee 7-167
Panchaud Freres SA vy Pagnan (R) & Fratelli [1974] 1 Lloyd’s Rep. 394, CA (Civ
|B) heanes haw Sena tereceas ce chor orcaebaccereies peer aciceeetesc ines esas thax 6-124, 6-125
Pancommerce SA vy Veecheema BV [1983] 2 Lloyd’s Rep. 304; [1983] Com. L.R.
TSVeal Sdaaa Gr el(8IND lipapbhee trex eet ot dese Siete xe ror ey mnt mip t a5 ta a hinges 6-126
Pando Compania Naviera SA vy Filmo SAS [1975] Q.B. 742; [1975] 2 W.L.R. 636;
[1975] 2 All E.R. 515; [1975] 1 Lloyd’s Rep. 560; (1975) 119 S.J. 253, QBD
(AGCynara) Peete ee ae eae Rec Pec eriee tree ere cate carte ne cre ec 4017, +018
Parfitt v Chambre Ex p. D’Alteyrac (1872-73) L.R. 15 Eq. 36, Ct of Chancery ... 6-100
Ranker: Games, os Comatduvebunping |1018] Wk KOR 5S pS cc eee cee 7-043
Parsons & Whittlemore Overseas Co Inc y Societe Generale de L’Industrie du
Pater (RAK TA) (1974) 508 5 2¢.969.(2nd Gir) .a4.25.0 tet aens eee 8—090
Partenreederei M/S Heidberg vy Grosvenor Grain & Feed Co Ltd (The Heidberg)
(Nae) 1994 Zalloyd’s Reps 25 74ORs (Gomi) cm. eee ee ee 2-105
Patel (Bhanubha1) v Peel Investments (South) [1992] 30 E.G. 88; [1991] N.P.C. 82,
Chr) ee Font) SO ee ee oe ee ee PI ee = 7-079
Patel (Jitendra) v Patel (Dilesh) [2000] Q.B. 551; [1999] 3 W.L.R. 322; [1999] 1 All
E.R. (Comm.) 923; [1999] B.L.R. 227; 65 Con. L.R. 140; (1999) 15 Const. L.J.
ASAT (999) 143cSu Ie Bails (GA Cin Diy 4k. Sees 1-043, 5-054, 7-043
Paul Smith Ltd v H&S International Holding Inc [1991] 2 Lloyd’s Rep. 127, QBD
(Goma) ) ek 2A. Sacetl bre oe shoe! wens 2-026, 2-027, 2-068, 2-108, 5-017
Pearlman v Keepers and Governors of Harrow School [1979] Q.B. 56; [1978] 3
W.L.R. 736; [1979] 1 All E.R. 365; (1979) 38 P. & CR. 136; (1978) 247 E.G.
LU 7Ss4(L97Sie SP TestS295 CAR (Civili) eye. cerns toot eevee 7-201, 8-116, 8-157
Pentonville Shipping Ltd v Transfield Shipping Inc (The Jonny K) [2006] EWHC
134572006) 1) loyd?s+Rep!?606: QB) (Commi) ee. oe 8-126, 8-163
Peoples Insurance Co of China (Hebei Branch) vy Vysanthi Shipping Co Ltd (The
Joanna V) [2003] EWHC 1655; [2003] 2 Lloyd’s Rep. 617, QBD (Comm) ... 5—068,
8-213
Pera Shipping Corp vy Petroship SA (The Pera) [1985] 2 Lloyd’s Rep. 103, CA (Civ
ID) saci actor Relcanner Ca deceit teh cae leas aerate Sie sat NNN oy bethed em 8-155
Perkins (HG) v Brent-Shaw; sub nom. Perkins (HG) v Best-Shaw; HG Perkins,
Ltd v Best Shaw [1973] 1 W.L.R. 975; [1973] 2 All E.R. 924; (1973) 117 SJ.
SAY uel0)61D yaaa a eee: Sitetany 0 orto Wine: at dethecteth ‘etiertementh tr elie Racal ape ge rece Beh 6-154
Petrycviaiitche lus teh) ote anc Weed en ee REO eee eer eetee rece teen ences 6-086
Persaud vy Beynon [2005] EWHC 3073, QBD (Comm) ................... 5—111, 5-127, 8-003
Peter Cremer GmbH & Co vy Sugat Food Industries (The Rimon) [1981] 2 Lloyd’s
Rep640@ BID Conn) acces ar x ct er ceca cee o eect es tock oea Oe eee be 5—022
Peterson Farms Inc vyC&M Farming Ltd; sub nom. Petersen Farms Inc y C&M
Farming Ltd [2004] EWHC 121; [2004] 1 Lloyd’s Rep. 603; [2004] N.P.C. 13,
LOMIDM (Rui eR ere 2-097, 3-022, 8-060, 8-062, 8-067, 8-068
Peterson Farms Inc vy C&M Farming Ltd (Payment into Court) [2003] EWHC
2298; [2004] 1 Lloyd’s Rep. 614, QBD (Comm) ..._ 7-055, 7-156, 8-057, 8-069, 8-208
Pethick Brothers v Metropolitan Water Board, CA ..........cccccccscssecseseeseeneeseseetunsea 2-021
Petredec vy Tokumaru Kaiun Co (The Sargasso) [1994] 1 Lloyd’s Rep. 162, QBD
QC
eatin): sesnndien by vaays chadisd Scan Ge RON ees a rae I ac 5-021, 5-022, 5-029
Petroships Pte Ltd of Singapore v Petec Trading & Investment Corp of Vietnam
(The Petro Ranger) [2001] 2 Lloyd’s Rep. 348, QBD (Comm) ... 6-032, 8-093, 8-130,
8-165
 Table of Cases xlix

Philip Alexander Securities & Futures Ltd v Bamberger; Philip Alexander Securi-
ties & Futures Ltd vy Gilhaus; sub nom. Phillip Alexander Securities &
Futures Ltd v Bamberger [1996] C.L.C. 1757; [1997] Eu. L.R. 63; [1997]
EARP AAs Can Diy aden aed ION TAs SF. Sn EIR 2-084, A2—129
Phoenix Finance Ltd v Federation International de l’Automobile; sub nom. Phoe-
nix Finance Ltd v Federation Internationale de |’Automobile [2002] EWHC
LO2S KARA Dineen lh cote. last Rh te bth ee eran le Se? 2-012, 7-028
Phoenix Shipping Pty Ltd v General Feeds Inc [1997] 2 Lloyd’s Rep. 703, CA (Civ
Dit thd col occ TUN 8 ees i RO en a eed CORN Saute ngage 7-079
Phonizien, The. See Atlas Levante Linie AG vy Gesellschaft Fuer Getriedehandel
AB (The Phonizien)
Pietro Cingolani SAS vy Pearl Marin Shipping A/B (The General Valdes); sub nom.
Pearl Marin Shipping A/B y Pietro Cingolani SAS [1982] 1 Lloyd’s Rep. 17;
(LOSi iCorms ls Ress GAN Civ: Div) Mees i nt Lett end hese eee 6-033
Pine Top Insurance Co v Unione Italiana Anglo Saxon Reinsurance Co [1987] 1
HlovdisiRep 4/6 OB DM(Comm) eer ed ee ee eee 2-055
Pioneer Shipping Ltd vy BTP Tioxide Ltd (The Nema) (No.2); BTP Tioxide Ltd
v Armada Marine SA; sub nom. BTP Tioxide Ltd v Pioneer Shipping Ltd
[1982] A.C. 724; [1981] 3 W.L.R. 292; [1981] 2 All E.R. 1030; [1981] 2 Lloyd’s
Iejop oem It (Coseay, Welk, MOS (IASI) WZ) Sul Gey, Veale 1-015, 1-050, 8-137,
8-138, 8-142, 8-145, 8-151, 8-160, A2—066
Piper Double Glazing Ltd vy DC Contracts Co [1994] 1 W.L.R. 777; [1994] 1 All
ERO ere Reta Cee we AEM RanOee sD Ae ce ee, Ste nee coed 5-199, 6-130, 6-131
Pirtek (UK) Ltd v Deanswood Ltd [2005] EWHC 2301; [2005] 2 Lloyd’s Rep. 728,
BID] (Gomme eee ec eee es 6-008, 6-117, 6-171, 7-091
Pittalis v Sherefettin [1986] Q.B. 868; [1986] 2 W.L.R. 1003; [1986] 2 All E.R. 227;
[1986] 1 E.G.L.R. 130; (1986) 278 E.G. 153, CA (Civ Div) .... 2-017, 7-072, 7-074
Biante veelante (2002 FEV ELGe22 8555 lip) geneween. cceea Me neeee 2-065, 2-072
Playa Larga, The. See Empresa Exportadora De Azucar (CUBAZUCAR) vy Indus-
tria Azucarera Nacional SA (IANSA) (The Playa Larga and Marble
Islands)
Rinmunermavelces (188i WZeierGs Va oO uOn an) aux wk U oeeeereenreeeae tee ener anncree aeee 6-093
Plymouth City Council vyDR Jones (Yeovil) Ltd [2005] EWHC 2356, QBD
COG) Batt arent eat etl. 0ke ete: Raber, 8-126, 8-127, 8-140, 8-150
Porter v Magill; Weeks v Magill; Hartley v Magill; England vy Magill; Phillips v
Magill; sub nom. Magill vyWeeks; Magill v Porter [2001] UKHL 67; [2002] 2
AIGr 357-5( 2002) 2 WALERS 37 (2002) ISA BERS 46555 (2002 ERO RS 16;
[2002] H.L.R. 16; [2002] B.L.G.R. 51; (2001) 151 N.L.J. 1886; [2001] N.P.C.
Roce cellberets rere ere eer es Coe te eee ae eee ee 1-042, 1-051, 4-110, 7-112
Prebble andi RobinsonmRe lS 921p2 OuB O02" a tcc s gee cee ees eee eee sa 6-069
Prekons Insaat Sanayi AS v Rowlands Castle Contracting Group Ltd [2006]
EWE @n1367-412 007 |eleiclovd?ssReps 98s OB DN(Comm)ieercccseesceeese eee: 7-046
Prescodevabrescod! (1887) e5 Solas JOM, wacescscccees s12ss shes deteas sSyeech. wowasnsasssgd-qnasaeee tans 4-146
President of India v Jadranska Slobodna Plovidba [1992] 2 Lloyd’s Rep. 274, QBD
(Goria) HF Shoe chee tcc enlead cc daaub octet aes 6-137, 6-140, 8-134, 8-135
President of India y La Pintada Compania Navigacion SA (‘The La Pintada) [1985]
A.C. 104; [1984] 3 W.L.R. 10; [1984] 2 All E.R. 773; [1984] 2 Lloyd’s Rep. 9;
PI9S4 GT te 0211984) S18 °G41999-5( 1984) 128:8.50414 LS coskacsehs 1-017
President of India v Metcalfe Shipping Co Ltd (The Dunelmia) [1970] 1 Q.B. 289;
[1969] 3 W.L.R. 1120; [1969] 3 All E.R. 1549; [1969] 2 Lloyd’s Rep. 476;
(19GRY, 1S PIS aGAC) BG ee, fede bd ya actttinahes ds hdseres beter Penne, 2-044
Pricetw Papkany 61839). SHE, INQ) LOB 5 oath.) case. be tsk he hse as Ke ast tos 6-055
Primetrade AG v Ythan Ltd [2005] EWHC 2399; [2006] 1 All E.R. 367; [2006] 1
All E.R. (Comm) 157; [2006] 1 Lloyd’s Rep. 457; [2005] 2 C.L.C. 911, QBD
( GOmn Tit) Weeerecta Nese tes baat ee raeset ts Seco em Reece rse ete sseecoet beech eneea te 8060, 8-061
] Table of Cases

Printing Machinery Co Ltd v Linotype and Machinery Ltd [1912] 1 Ch. 566,
ChyDestuemeeroet. 2 aces elec ites, Alea, oma). ts AE rari eo 2 6-114
Profilati Italia Srl v Painewebber Inc [2001] 1 All E.R. (Comm) 1065; [2001] 1
Lioyd?’s: Rep: 715; [2001] CL.C. 672, QBD (Comm) .t2%20 3 5222, 8-099, 8-100
Property Investments (Development) Ltd v Byfield Building Services Ltd, [1985]
3.1 BuEARS 47 SOB iaesiecceatse ce cin. ares iimeclane. aire ene. toh Danie ee 3-049
Protech Projects Construction (Pty) Ltd y Al-Kharafi & Sons; Mohammed Abdul-
mohsin Al-Kharafi & Sons WLL v Big Dig Construction (Proprietary) Ltd
(In Liquidation) [2005] EWHC 2165; [2005] 2 Lloyd’s Rep. 779, QBD
(COMM) nhcesscoce). woepelc Abed ated eke cepeeer, 6-032, 6-131, 8-094, 8-100, 8-214
Prudential Assurance Co v 99 Bishopsgate [1992] 1 E.G.L.R. 119; [1992] 03 E.G.
120 (11.990 [E.Ges6r (G52) Chul es ata t traces ee tone xp atta canker 8-155
PurslowsveBailéya (704) 2d sRavyinrglOSOmer eee tncee ose 5 ee eouseees 6-163, 6-179, 8-015
Q’s Estate, Re [1999] 1 All E.R. (Comm.) 499; [1999] 1 Lloyd’s Rep. 931; (1999) 149
INGea e442 @OB) (Goma) fe)tag ere tose ec atccce eager ek ee ee aero ee 7-186, 7-195
Qingdao Ocean Shipping Co vy Grace Shipping Establishment Transatlantic Schif-
fahrtskontor GmbH (The Xing Su Hai) [1995] 2 Lloyd’s Rep. 15, QBD
(OTT) Gee eee eR eee PATIOS oo whe Sec OE SA eee 2-105
R. v Cripps Ex p. Muldoon; sub nom. R. v Commissioner Cripps QC Ex p.
Muldoon [1984] Q.B. 686; [1984] 3 W.L.R. 53; [1984] 2 All E.R. 705; 82
ee GraRe43 9 oeCain (Give )iy) Was ere Wee MEP odec, S08 ante tactenpce Re cova oan eee eee 6-169
Vib ontainesVioneaun S45) xlle OB wl28 Rerscec-ceceeseeetesth cessepePe ater oneemeceeat ae 6-181
fled
. v Gough (Robert) [1993] A.C. 646; [1993] 2 W.L.R. 883; [1993] 2 All E.R. 724;
(1993) 97 Cr. App. R. 188; (1993) 157 J.P. 612; [1993] Crim. L.R. 886; (1993)
157 J.P.N. 394; (1993) 143 N.L.J. 775; (1993) 137 S.J.L.B. 168, HL ... 4-109, 4-110
a . V Lashley (Angela) [2005] EWCA Crim 2016; [2006] Crim. L.R. 83, CA (Crim
TE ieee ics ate aot woken cant cau line< amet: etn core tae ee chtacte : eye Mice:oa Ee 7-113
v2) . v National Joint Council for the Craft of Dental Technicians (Disputes Commit-
tee) Ex p. Neate [1953] 1 Q.B. 704; [1953] 2 W.L.R. 342; [1953] 1 All E.R. 327;
(GLaa Mo) NosPoll ovalBC eeSee seis ar ee NaN Ob ee es tal(SS Ua he aK 8-162
R. vy Paddington and St Marylebone Rent Tribunal Ex p. Bell London and
Provincial Properties Ltd [1949] 1 K.B. 666; [1949] 1 All E.R. 720; 65 T.L.R.
PAYOR (UDB) Wale) Ble ADDS 4 GAR, shoe (ERE Aa eau PAKS IBID oe 5-051
eva Vrcones) [ls91 5 @ibsar5 Ol siGrowme Gascse hese Gece mn ce eens ane tae ea eee 5-165
Aw . (on the application of Channel Tunnel Group Ltd) v Secretary of State for the
Environment, Transport and the Regions; R. (on the application of France
Manche SA) v Secretary of State for the Environment, Transport and the
Regions 2001 TE WGAsGiy iso GAn (Give liv) veneer cea treatises 2-021
R Durtnell & Sons Ltd v Secretary of State for Trade and Industry [2001] 1 All
E.R. (Comm) 41; [2001] 1 Lloyd’s Rep. 275; [2000] C.L.C. 1365; [2000]
Bilokers2 174 Con ER. ore 12000 INC. Oe Qbiy COC) me en cee 7-106
RC Pillar & Sons v Edwards [2002] C.1.L.L. 1799 ...... 5-033, 5-120, 6-172, 7-091, 8-086,
8-163
RJT Consulting Engineers Ltd y DM Engineering (Northern Ireland) Ltd [2002]
EWCA Civ 270; [2002] 1 W.L.R. 2344; [2002] C.L.C. 905; [2002] B.L.R. 217;
[2002] T-C.L.R. 21; 83 Con. L.R. 99; (2002) 18 Const. L.J. 425; [2002]
CILL.L. 1841; (2002) 99(15) L.S.G. 33; (2002) 146 S.J.L.B. 78, CA’ (Civ
EDGY) fe BAYA ec ats coctete ehcrtshrvrndiek tadse ee eee eae a TOR REE 2-015, 2-040
RWJ Sutherland & Co v Hannevig Bros Ltd [1921] 1 K.B. 336; (1920) 5 LI. L. Rep.
[547 IBID Re Ae ee See Pa eS Sear ee ea a 6-167, 6-168
Radio Publicity (Universal) Ltd v Cie Luxembougeoise de Radiodifusion [1936] 2
INL, ER: 22d ccssiltevansees Scorn til eat Dedueeneventa edd FO ki Me tee De RA 7-043
Rahcassi Shipping Co SA y Blue Star Line (The Bede) [1969] 1 Q.B. 173; [1967]
3 W.L.R. 1382; [1967] 3 All E.R. 301; [1967] 2 Lloyd’s Rep. 261; (1967) 111
S.Je848), OBL: (Comin) eee ya. eee teeta ome tt ake re at er 4-008, 4-017
Raintorthiyatamern (185 5)25) lel (OsSi) e247 reese cencnerete ence ene 6-092
 Table of Cases li

Ralli Bros vyCompania Naviera Sota y Aznar; sub nom. Compania Naviera Sota Y
Aznar v Ralli Bros [1920] 2 K.B. 287; (1920) 2 LI. L. Rep. 550, CA .......... 7-146
RandallivaRandall@:S05) a7 mEast8 lieth oe te eee eee ee eee eee eee 6-078
Randell Saunders & Co Ltd v Thompson (1875-76) L.R. 1 Q.B.D. 748, CA ...... 7-090
Ravee snr armck{(@ 7242 PR TAGi sk) BARON YT de ei od SEOs ay) 6-177
Rawlings Wood. (0735) Barmies5 4 i.soncuci tate keane ete dees. eee 6-048
Rederi Kommanditselskaabet Merc-Scandia IV v Couniniotis SA (The Mercanaut)
MO SO) PZellovdistRep mss N@OBMa(Gomin)is se eeeeee 2-112
Reederij Amsterdam NV vy President of India (The Amstelmolen); sub nom. NV
Reederij Amsterdam y President of India [1961] 2 Lloyd’s Rep. 1; (1961) 105
SUAS OAGAS Re A SE ee sh Eas Rete? 289 Lee 2-056
Reichhold Norway ASA v Goldman Sachs International [2000] 1 W.L.R. 173;
[2000] 2 All E.R. 679; [1999] 2 All E.R. (Comm) 174; [1999] 2 Lloyd’s Rep.
O75 [2000], Gi Gril GAG (Give Din Wome creer eet eed ee ek teh ee 7-048
Reliance Industries Ltd vy Enron Oil and Gas India Ltd [2002] 1 All E.R. (Comm)
59; [2002] 1 Lloyd’s Rep. 645; [2002] B.L.R. 36, QBD (Comm) .................. 8-124
Rena K, The [1979] Q.B. 377; [1978] 3 W.L.R. 431; [1979] 1 All E.R. 397; [1978]
ie lovdis: Repws450 (1.973) sl22.5i) silos OBID (Adil ty) pececscette ro 2-057, 6-181
Retla Steamship Co v Gryphon Shipping SA (The Evimeira) Ocean Carriers v
iAnangelaWeltare ConNaygrs Aw ©1501 Comma) yes yey eer serrate tides nee ceee ye: 8-133
Rewev Goxalil 996] EC1AG 347 274.© BO i(Gonami) erect ae tence tteeeets erates ane a 7-048
Revnoldsey Gray (698) sole) siaviniees 2omeeiossmteesntenretateresaee eae eens ee ere 4-047
Richurst Ltd v Pimenta [1993] 1 W.L.R. 159; [1993] 2 AIE.R. 559, ChD .... 7-072, 7-074
Riddick v Thames Board Mills [1977] QB. 881; [1977] 3 W.L.R. 63; [1977] 3 All
eR OWA AGUNG (Cine Dy) eatery, tancascnectre cena the Recto reer as ne ee cere 6-185
Riley Gowler v National Heart Hospital Board of Governors [1969] 3 All E.R. 1401,
(AT (CVAD) eee ernest eee reece ee re ee ee oe Ree ete ees 6-067
River Plate Products Netherlands BV y Establissement Coargrain [1982] 1 Lloyd’s
ING pesO2.5 BO)Ess (@ Onin metrencre react ee crete meee nena recente einen meine 6-090
Roachbank, The. See CA Venezolana de Navegacion v Bank Line (The Roach-
bank)
Road Management Services (A13) Plc vyLondon Power Networks Plc [2003] B.L.R.
SHUBhs(OYeyDaGUC 8 lire ae hese eeSn Sony tin ae Rea Acer R ert PUB A CTU YA
Robin Ellis Ltd v Vinexsa International Ltd [2003] EWHC 1352; [2003] B.L.R.
Sabha! OREM Covel bal ee ONBIDIE(CLINE) tesa settee cance esc ate eB Saecanaec ora oan 8-131
Rocco Guiseppe & Figli SpA v Tupinave (The Graziela Ferraz) [1992] 1 W.L.R.
1094; [1992] 3 All E.R. 669; [1992] 2 Lloyd’s Rep. 452, QBD (Comm) ....... 7-103
Roche Products Ltd v Freeman Process Systems Ltd; Black Country Development
Corp v Kier Construction Ltd, [1996] 80 B.L.R. 102, QBD (OR) ..... 2-047, 2-053
Roche Products Ltd and Cellnech Therapeutics Ltd y Freeman Process Systems
Ltd and Haden Maclellan Holdings Plc: Black Country Development Cor-
poration vekKier Constructonmstdy 1996/30) BRO 2 ens raesersr-sesecesrcese 3-015
Rokopoulasevslespeniars pw (197.8) al22a 3) nl27s oeeee trenton nes teeeteesen ts ie stunaaatteattnsesr 6-069
Ronly Holdings Ltd v JSC Zestafoni G Nikoladze Ferroalloy Plant [2004] EWHC
1354; [2004] 1 C.L.C. 1168; [2004] B.L.R. 323, QBD (Comm) ......... 4-092, 6-016,
6-020, 6-023, 6-078, 6-084, 6-166
Rookes v Barnard (No.1) [1964] A.C. 1129; [1964] 2 W.L.R. 269; [1964] 1 AIL E.R.
8075 (1964) Ieloyd’s Repa2s3(1964)M0S8sS.) 493% Elle rssweties. 2.access deeasese. 6-103
Rosen ea CotvaDowleveandselbyrll943] 2eAll Hak elyZetia seceed Merete adorns rsa: 6-144
IRONS ir Leorrnirosy(USED) feb WAN ee TBs PAO EAP MOB) PANE): ca taret are andeccpenchcond.cebo.tsnnocgesanic. © 6-084
Rosseel NV v Oriental Commercial & Shipping Co (UK) Ltd [1991] E.G. 94 (C-S.),
(CNG (Giy, TON) ee he es ares dace re 5 OR eRe Suieaiet hana 8-002, 8-027, 8-028
Rotary Watches Ltd v Roatary Watches (USA) Inc, unreported, December 17,
2004 "Supremes G@ourt) Costs) Oiice ela eacspareste st seek steer tes stant 7-209, 7-210
Rotary Watches Ltd v Rotary Watches (USA) Inc, 2004 W.L. 3200214 ..... 5—080, 6-139
 li Table of Cases

Roussel-Uclaf vyGD Searle & Co Ltd (No.2) [1978] 1 Lloyd’s Rep. 225; [1978]
BS:R:.95:. (978k PCS 747, JER DIMES ce RG. Psat aca thene ema aeee 3-022, 7-034, 7-043
‘Royston v Rydal (1605) Rolle Ab. Arb. H 8 Com. Dig. Arb. E15 oo... eee 6-100
Rush & Tompkins Ltd v Greater London Council [1989] A.C. 1280; [1988] 3
W.L.R. 939; [1988] 3 All E.R. 737; [1988] E.G. 145 (C.S.); (1988) 138 N.L_J.
Repas lS =K(U9SSNALS2 iS I U5 92.5 Teles cr cana seaystisw seta RO eares eckGah ore ceReetneo tee 5-140
Rustal Trading Ltd v Gill & Duffus SA [2000] 1 Lloyd’s Rep. 14; [2000] C.L.C.
231 OBD:( Coriit Wc eeeevert- cstv a wana. cee eedee trees 4-110, 4-111, 4-124, 8-111
SEB Trygg Holding AB v Manches; sub nom. AMB Generali Holding AG v SEB
Trygg Liv Holding AB; AMB Generali Holding AG v Manches [2005]
EWCA Civ 1237; [2006] 1 W.L.R. 2276; [2006] 1 All E.R. 437; [2006] 2 All
E.R. (Comm) 38; [2006] 1 Lloyd’s Rep. 318; [2006] 1 C.L.C. 849; (2005)
1OZ4S)MRSIG. 2812005 elas Nu aLSle GA (GivDiv) Maes. meee: 3-017, 5-024
SG Embiricos Ltd v Tradax Internacional SA (The Azuero) [1967] 1 Lloyd’s Rep.
A647 INE). £680: SO BD (Commi) ah eets Ae teeta eee 6-092
SL Sethia Liners v Naviagro Maritime Corp (The Kostas Melas) [1981] 1 Lloyd’s
Rep. 18; [1980] Com. L.R. 3, QBD (Comm) ... 6-010, 6-012, 6-017, A2-042, A2—050
SOAMB va Senegalt(Hnrance) i meena ts eecetee cet acote teenies Soe Ress ee eee 8-050
STX Pan Ocean Co Ltd (formerly Pan Ocean Shipping Co Ltd) vy Ugland Bulk
iranspontea'S, 12007) EWE Galsi7"(Comun) OBDl (Gon) creer 8-143
Sacor Maritima SA v Repsol Petroleo SA [1998] 1 Lloyd’s Rep. 518, QBD
(Qrosrngah hoppers phen A eon aeeete Rome ore cRceertececieis ben sh cvs GoRancy Anite Me Em Mle Nai 6-183
Safeway Stores Plc vy Legal and General Assurance Society Ltd [2004] EWHC 415;
P2005) PLGR aSe GRA Oe GUIDE sere teen cen terete coke ise eee oe eae ee 8-133
St George’s Investment Co v Gemini Consulting Ltd [2004] EWHC 2353 (Ch);
(Z005i ele Ee GrleRe 554 (2005 OIE Gs 96a 12005] plePa ce @Re Gi Cli Wen 5-050
Salkeldgandiss la tere en (1184(0) peel cca Flea Omran eteee eee ee ere ee 4-151
Samuel fvaCoopernl Sooied Ate Ce Evy Oo arte cotaerctct tcc creece tse settee sneer ance ee 6-078
Sanghi Polyesters (India) Ltd v International Investor (KCFC) (Kuwait) [2000] 1
lelovdissRep: +80: (200i GaleGa 7436 OB (Gon) ieee. eee 2-063, 8-081
Sankofa v Football Association Ltd [2007] EWHC 78 (Comm), QBD (Comm) ... 7-186,
7-189, 7-190
Save and Prosper Pensions Ltd v Homebase Ltd [2001] L. & TR. 11, Ch D ..... 4-121,
7-112
Sawyer v Atari Interactive Inc [2005] EWHC 2351; [2006] I.L.Pr. 8; (2006) 29(2)
JAPA #2 9OZ 6:Cat ID eta cc eas cotsteee Paes ce ses Ric eae tere ee Rea ae kG ae ee ee OS 2-066
Scales vy East London Waterworks (1835) 1 Hodges 91 4 L.J.C.P. 195 oo... 8-087
Schiffahrtsgesellschaft Detley von Appen GmbH y Voest Alpine Intertrading
GmbH; Schiffahrtsgesellschaft Detlev von Appen GmbH v Wiener Allianz
Versicherungs AG [1997] 2 Lloyd’s Rep. 279; [1997] C.L.C. 993, CA (Civ
LIV Ue Nec cteeet rece cese ate oet Cen ROEM ONE ERER MOT non een eGeeR: hee eee Re 3-018
Schumacher (t/a Vita Konzern) v Laurel Island Ltd (The Santa Cruz Tres) [1995]
I eloydissRepaz.08. OBD (Comp) persweeme re ote te ge ete. tea ene 5-029, 5-203
Scottay Avery (1356) 25.[agls Bixee 018 esc. cte ce eee te otek Aske hen Con ccna eee ey 2-022
Scrimaglio v Thornett & Fehr (1924) 18 LI. L. Rep. 148, CA ..........0.0000.. 4-027, 8-016
Sea Contamers: ve lGie Pty itde| 2002 INeSaWiGeAN 84 tm, yee ecco ee 4-060, 4-062
Sea Premium v Sea Consortium DBD , Apil 11, 2001, Adm Ct ......0......ccceeeeeee 7-015
Sea ‘Trade Maritime Corp v Hellenic Mutual War Risks Association (Bermuda) Ltd
(The Athena) [2006] EWHC 2530 (Comm); [2007] 1 All E.R. (Comm) 183;
[2007] 1 Lloyd’s Rep. 280; [2006] 2 C.L.C. 710; [2007] Bus. L.R. D5, QBD
(Gotiiinn)) reir satan aacctaes 2-048, 2-049, 2-050, 2-053, 2-055, 2-056, 8-062, 8-143
Sea Trade Maritime Corp v Hellenic Mutual War Risks Association (Bermuda) Ltd
(The Athena) [2006] EWHC 578; [2006] 2 All E.R. (Comm) 648; [2006] 2
Lloyd’s Rep. 147; [2006] 1 C.L.C. 567, QBD (Comm) ............ 6-009, 6-171, 8-097
 Table of Cases li

Seabridge Shipping AB v AC Orssleff’s Eftf’s A/S Seabridge Shipping AB v AC

Orsleff’s EFTS A/S [2000] 1 All E.R. (Comm) 415; [1999] 2 Lloyd’s Rep.
685; [2000] C.L.C. 656, QBD (Comm) ............. 1-043, 1-052, 5-022, 5-023, 5-054
Secretary of State v Percy Thomas Partnership [1998] 65 Con L.R. 11 ccececcee. 7-106
Secretary of State for the Environment v Reed International plc [1994] 06 E.G.
LING a te eg A IIE OD. oO Tt EA ae 8-133, 8-163
Secretary of State for the Foreign and Commonwealth Office v Percy Thomas
Partnership; Secretary of State for the Foreign and Commonwealth Office v
Kier International Ltd,65 Gon, LR 11, QBDWOR) 2.4... 2002.3 2-047, 2-053
Semco Salvage & Marine Pte Ltd v Lancer Navigation Co Ltd (The Nagasaki
Spirit) [1997] A.C. 455; [1997] 2 W.L.R. 298; [1997] 1 All E.R. 502; [1997] 1
Lloyd’s Rep. 323; [1997] C.L.C. 507; [1997] 6 Re. L.R. 305; 1997 A.M.C.
POSO TOOT) SLATS, PUNE 4 Sai | EE AS i Fs ey ssa ct cl i 6-138
Sempra Metals Ltd (formerly Metallgesellschaft Ltd) v Inland Revenue Commis-
sioners [2007] UKHL 34; [2007] S.T.I. 1865; (2007) 104(31) L.S.G. 25; (2007)
IS7N.LJ, 1082; (2007) 15i°S¥.L.B) 9852 [2007] 3 WL:Re 354, HL. .c ck. 6-120
Sennar, The. See DSV Silo und Verwaltungsgesellschaft mbH v Owners of the
Sennar (The Sennar) (No.2)
Services Europe Atlantique Sud (SEAS) v Stockholms Rederi AB Svea (The
Folias). See Owners of the Eleftherotria vyOwners of the Despina R
Shalson v DF Keane Ltd [2003] EWHC 599; [2003] B.P.I.R. 1045; (2003) 19 Const.
Leap DOG TatD> ote caeethees rattan Med coated lav he wee ech aa ap had sieamentannd Scone 7-039, 7-041
Shayler v Woolf [1946] Ch. 320; [1946] 2 All E.R. 54; [1947] L.J.R. 71; 175 L.T.
1 ONO 4), OWS M35 fe CUNG Shs breake toe osceeca tes seg ecapansiettn ea eee ota tee 3-018
Shearson and American Express Inc. vyMcMahon [1987] 482 US. 220 ..... 1-035, 1-037
Shell International Petroleum Co Ltd v Coral Oil Co Ltd (No.1 [1999] 1 Lloyd’s
Repsi/24 OB1D)(Conan) weseseeae aceeeeee eesaeseees 2-027, 2-068, 2-114, 7-015
Shorrock Etdy Mecsitt Ple [1991 B:C.Gs471, GAu(Giv Div) © eiteeseee 6-073
Shuttari v Solicitors Indemnity Fund [2004] EWHC 1537, Ch D ...... 5-045, 8-082, 8-106
Siboti K/S vy BP France SA [2003] EWHC 1278; [2003] 2 Lloyd’s Rep. 364; [2004]
GARE OBB (Gomme ee tee ee RN Ee ream ncaeee 2-056, 2-057
Sig Bergesen DY & Co v Mobil Shipping and Transportation Co (The Berge Sund)
OOBIe2aeloydisiRepat soe GAg(Cive Div) sc camennecnetrteete ee oat ees 6-086
Simmonspyeswaime(lsd9)ledianmte oto eg asem a austere meee tense teaee tenets re eee 6-095
Sinclair v Woods of Winchester Ltd [2005] EWHC 1631; 102 Con. L.R. 127,
OBDRAss 5-036, 5-037, 5-089, 5-120, 6-175, 7-113, 7-127, 8-075, 8-078, 8-109,
8-110, 8-150
Sindall Ltd v Solland (2001) 3 T-C.L.R. 30; 80 Con. L.R. 152, QBD (TCC) ..... 5-003
Sinochem International Oil (London) Co Ltd vy Fortune Oil Co Ltd [2000] 1
TloydispRep 46325 OBI) (Gorm) ieeseaere ce sete atta eee ahve ee tere ee reer 7-153
Siporex Trade SA v Comdel Commodities Ltd [1986] 2 Lloyd’s Rep. 428, QBD
(Gontin) FRRSE es at. cei Letina an 6-176, 7-189, 7-195
Sirros v Moore [1975] Q.B. 118; [1974] 3 W.L.R. 459; [1974] 3 All E.R. 776; (1974)
LSHS ROO OAK (Civ MDiv hana setae ee eee eee een eis ae 4-154
Skanska Construction (Regions) Ltd v Anglo Amsterdam Corp Ltd, 84 Con. L.R.
1OOP@QBD TCO Wie Be ee ML, BG Pa ene) acne einOe 6-032, 8-163
Skips A/S Nordheim v Syrian Petroleum Co and Petrofina SA (The Varenna)
[1984] Q.B. 599; [1983] 3 All E.R. 645; [1983] 2 Lloyd’s Rep. 592, CA (Civ
iid 6 AO Mhaschs, doh tees Aah meeendlit ate Melamed de 2-056
Slade v Metrodent [1953] 2 Q.B. 112; [1953] 2 W.L.R. 1202; [1953] 2 AILE.R. 336;
CiGsay a7 GnId60), ORD Shei RRQ AA cba LALLA ae 3-005
Smaro, The. See Charles M Willie & Co (Shipping) Ltd v Ocean Laser Shipping
Ltd (The Smaro)
Smeaton Hanscomb & Co y Sassoon I Setty Son & Co (No.1) [1953] 1 W.L.R.
1468; [1953] 2 All E.R. 1471; [1953] 2 Lloyd’s Rep. 580; (1953) 97 S.J. 862,
CD) Pe dsc ncech Meet ATO NS. EAL ANERE. 5-006, 5-007
liv Table of Cases

Smeaton Hanscomb & Co v Setty (Sassoon I), Son & Co (No.2) [1953] 1 W.L.R.
LASiise LO Salk? CAUISE RE 1585-11955) .977e [60:1
054 ©lo aeeeee, eon terre Pere 6-138
Siithiovaddantleys (S51) G20 Me GEOG. cx eeteemee mee Meets. werent, sereceacse ee 6-030, 6-073
Snithiv. Johnson (1812) al Sas te TSW see eaee aie. eae ae eee nee ees 6-178
Smith v Kvaerner Cementation Foundations Ltd [2006] EWCA Civ 242; [2007] 1
W.L.R. 370; [2006] 3 All E.R. 593; [2006] C.P. Rep. 36; [2006] B.L.R. 244;
[2006] A.C.D. 51; (2006) 103(14) L.S.G. 33; (2006) 156 N.L.J. 721; [2006]
INP: Ge35.4 GAg (Cove Div) :Aeete Ae ee ee hee 4-125, 4-126, 7-128
Smithy suatantint (LOZ) leeBisFAS eC Adee eae eee chien ee Sere eammneRtt cee eee 2-021
Smith v Pearl Assurance Co Ltd [1939] 1 All E.R. 95; (1939) 63 LI. L. Rep. 1,
GAL CARAS. SE ee ee CO ee ee 7-049
Smith vi roup (849) wa Be 15 Tieden aces cco etee 5 Meee. eee eee ee ee ee 4-063
Smith yl insurance Coubtd)|(2001] 3: Ce OB Wi(Conm) ir.tes..ae ree 7-207
Smith & Gordon Ltd v John Lewis Building Ltd, 44 Con. L.R. 11, CA (Civ Diy) .... 2-054
Smitthgande Wilson eRes (iS4s) eases 27) ete, ceed cnet, SAMs Pete Rae se eee eee 6-092
Socadec SA v Pan Afric Impex Co Ltd [2003] EWHC 2086, QBD ............ 8003, 8-009
Sociedad Iberica de Molturacion SA v Nidera Handelscompagnie BV [1990] 2
WloyadissRep e240 SOBID) (Gomi) tse ccceeccoee res oes see ernest ee eee 5-221, 6-078
Societe Commerciale de Reassurance vy Eras International Ltd (formerly Eras
(UK)); sub nom. Eras EIL Actions, Re [1992] 2 All E.R. 82 (Note); [1992] 1
Koyoh LCS VO (EIA, ((Gityy DIN) Boocou dee pact oom sboceeecd bones 2-072, 6-111, 6-112, 7-046
Societe Franco-Tunisienne d’Armement-Tunis y Government of Ceylon (The
Massalia) [1959] 1 W.L.R. 787; [1959] 3 All E.R. 25; [1959] 2 Lloyd’s Rep. 1;
(C9 SO) MOSRS ISO 75 CANT array eset eas eeeurscearcoten eves. eae «5enae aa Mee eee eee ee 5-051
Socony Mobil Oil Co Inc v West of England Ship Owners Mutual Insurance
Association (London) Ltd (The Padre Island) (No.1); Mobil Oil Co Inc vy West
of England Ship Owners Mutual Insurance Association (London) Ltd [1984]
2 BloydissRep408, ORIN (Comm) tee eee eee ee eee ce ee ee 3-018
Socony Mobil Oil Co Inc v West of England Shipowners Mutual Insurance
Association (London) Ltd (The Padre Island) (No.2) [1987] 2 Lloyd’s Rep.
O29 NLISSl Eine lee 44,51) (Comin) .cneercse eee tee eee ee 3-018, 6-116
Soleh Boneh International vyUganda and National Housing Corp [1993] 2 Lloyd’s
Repi208 5GAC( Cia liv). ceccncenesnccesaot Meee eae tose ene eR eT 8042, 8-046
Soleimany v Soleimany [1999] Q.B. 785; [1998] 3 W.L.R. 811; [1999] 3 All E.R.
847; [1998] C.L.C. 779, CA (Civ Div) .. 1-035, 1-051, 2-013, 8-032, 8-033, 8-044
Sonatrach Petroleum Corp (BVI) v Ferrell International Ltd [2002] 1 All E.R.
(Gomum) 627 OB (Conan) Serecessesscr-senenesers 2-089, 2-095, 2-096, 2-104, 7-035
Sotheran v Norwich Union Life Insurance Society [1992] 2 E.G.L.R. 9; [1992] 31
re GreOil92 INROs4: eiOBIDE. 228th eens A 4080, 5-042, 5-094, 5-196
South Tyneside MBC vy Wickes Building Supplies Ltd [2004] EWHC 2428; [2004]
N.P.Gel64s OBD (Comin) 5 Ay a8. 5 cee oearte ete EE vate eee, eae. 7-204
Sphere Drake Insurance v American Reliable Insurance Co [2004] EWHC 796,
QBD (Comin), Hi Asi det atest sat eeoes kenahioets vecmeee enema tegt tok Oe nates ak renee eee ee 4-120
Splendid Sun, The. See Andre et Cie SA v Marine Transocean Ltd (The Splendid
Sun)
Syueeed
eyUh ys PAU CSR fous (URSIN USS MEER WSO) so osc einesccpuctaadeeauceun duane onasegote 8-167
Stainless Patriot, The. See Whitehall Shipping Co Ltd v Kompass Schiffahrtskon-
tor GmbH
Stanstead Shipping Co v Shenzen Nantian Oil Mills, August 21, 2000.00.00... 4-071
Star Shipping AG v China National Foreign Trade ‘Transportation Corp (The Star
‘lexas) [1993] 2*Lloyd's Rep, 445, GA (Civ Div)iece--tte ne 2-093, 2-095, 2-104
Stargas SpA v Petredec (The Sargasso) [1994] 1 Lloyd’s Rep. 412, QBD (Comm) ... 6-162,
6-184
Steel Authority of India Ltd vy Hind Metals Inc; Hind Metals Inc v Sail Inter-
national Ltd; Hind Metals inc v Steel Authority of India Ltd [1984] 1 Lloyd’s
Ij} aor UCL) ein INIRY 204s (OYBID ((Coyrotnil). ccrsquscaccncssmceweseeanocsebecanye
soos. 2-093
 Table of Cases ly

ptcersimlbasnley ACh sO ROM RMOIL, Ie bitch ALIA Oe, mall ee Sawenb ele 6-177
Stern Settlement Trustees v Levy [2007] EWHC 1187 (TCC), OBD Ce) 5-050
Stinnes Interoil GmbH y A Halcoussis & Co (The Yanxilas) [1982] 2 Lloyd’s Rep.
AOR COLEID ECO cas ctr te See eee eet oe os ee ia Re age | era 6-029
Stolt Tankers Inc v Landmark Chemicals SA [2002] 1 Lloyd’s Rep. 786; [2002]
EE GES Seat INE OM Tat ao cigcelina snentestaurconsaoe Shdeseloethe whut race 8-139
Stoomy Maats De Maas NV v Nippon Yusen Kaisha (The Pendrecht) [1980] 2
loydtsiRep6, (QBD! (Comin). 3 {Ae ak ehh ERT oe 5—011, 5-029
Stretford v Football Association Ltd [2007] EWCA Civ 238; [2007] Bus. L.R. 1052;
[2007] 2 All E.R. (Comm) 1; [2007] 2 Lloyd’s Rep. 31; [2007] 1 C.L.C. 256:
(2007) 151 S.J.L.B. 437, CA (Civ Diy) ..... 1-038, 1-039, 2-002, 2-044, 2-048, 5-198,
7-031, 7-046
Stringer and Riley Bros Arbitration, Re [1901] 1 QB. 105, QBD wo..ccccecceeeee 6-166
Succula & Pomona Shipping Co Ltd v Harland & Wolff Ltd [1980] 2 Lloyd’s Rep.
BS OBDi( Comm) ees Sew eek eee ea tase Re ee 7-115, 7-120, 7-122
Sumitomo Heavy Industries v Oil and Natural Gas Commission [1994] 1 Lloyd’s
Nea, Sos (COVBIDY (Crorratiem)) 5.2 sasnosseapse cacraecononeseiacss 2-095, 2-097, 2-099, 2-102, 4007
Sumukan Ltd v Commonwealth Secretariat [2007] EWHC 188 (Comm); [2007] 1
loydisiRepec 205 OBIi (Con) Paseeencrer ee 4-110, 4-119, 8-088, 8-114, 8-199
Sumukan Ltd v Commonwealth Secretariat; sub nom. Sukuman Ltd y Com-
monwealth Secretariat [2007] EWCA Civ 243; [2007] Bus. L.R. 1075; [2007]
3 All E.R. 342; [2007] 2 All E.R. (Comm) 23; [2007] 1 C.L.C. 282; (2007) 151
See Wars OMCAn(CivalD ino) eee 1-039, 2-063, 7-127, 7-166, 7-201, 8-117, 8-121,
8-158
Sun Life Assurance Co of Canada vy CX Reinsurance Co Ltd (formerly CNA
Reinsurance Co Ltd) [2003] EWCA Civ 283; [2004] Lloyd’s Rep. LR. 58, CA
(Gia Diy, eRe TER AAS oS 2 tel ee wh etait Teh ae 7-028, 7-031, 7-046
Sun Life Assurance Co of Canada y Lincoln National Life Insurance Co. See
Lincoln National Life Insurance Co v Sun Life Assurance Co of Canada
Sunderland Steamship P and I Association v Gatoil International Inc (The Lorenzo
iEValeouss)s(98Si|el Meloy diseReprl SO 5@ BIOK(Comin) erect essere: 5-131, 7-205
SWOnaianesnn Wy liaolenaGl, Jkelorbenae 48, IWOLON oo. .25 oosossagaceoopasedeceosonscduesconnaaidcesonasabes 1-038
Surefire Systems Ltd v Guardian ECL Ltd [2005] EWHC 1860; [2005] B.L.R. 534,
QOBD UGE CG. Bea Oe tee ne eee ean 8-123, 8-126, 8-148, 8-150, 8-214
Surrendra Overseas Ltd v Sri Lanka (The Apj Akash) [1977] 1 W.L.R. 565; [1977]
2 All E.R. 481; [1977] 1 Lloyd’s Rep. 653; (1977) 121 S.J. 13, QBD (Comm) .... 5-022
Sutcliffe v Thackrah [1974] A.C. 727; [1974] 2 W.L.R. 295; [1974] 1 All E.R. 859;
[1974] 1 Lloyd’s Rep. 318; (1974) 118 S.J. 148, HL .... 1-012, 2-029, 4-105, 4-139
Svenska Petroleum Exploration AB v Lithuania (No.1) [2005] EWHC 9; [2005] 1
All E.R. (Comm) 515; [2005] 1 Lloyd’s Rep. 515, QBD (Comm) ...... 8-023, 8-024,
8-028
Svenska Petroleum Exploration AB v Lithuania (No.2) [2006] EWCA Civ 1529;
[2007] 1 All E.R. (Comm) 909; [2007] 1 Lloyd’s Rep. 193; [2006] 2 C.L.C. 797;
[2007] 2 W.L.R. 876, CA (Civ Div) ..... 2-095, 2-097, 3-034, 3-036, 3-037, 3-038,
6-176, 8-023, 8-025, 8-028, 8-045
Swiss Bank Corp v Novorissiysk Shipping Co (The Petr Schmidt) [1995] 1 Lloyd’s
Rep} 2021995] G:lrzGs 62, OBD (Comm)! wired. cad Rane 5-021, 5-029
Sybray v White (1836) 1 M. 8 W. 435 ...ccccscesesceseeseeneetensee sessereeensssesseenseneenenees 6-181
Sylph, The (1867-69) L.R. 2 A. & E. 24, Ct of Admiralty .......0.. ccc 6-180
T Sloyan & Sons (Builders) Ltd v Brothers of Christian Instruction [1974] 3 All
E.R. 715; [1975] 1 Lloyd’s Rep. 183, QBD ......cccsccecsesetseeteeetneeneesenerseneenens 4-075
TB&S Batchelor & Co Ltd vy Owners of the SS Merak (The Merak) [1965] P. 223;
[1965] 2 W.L.R. 250; [1965] 1 All E.R. 230; [1964] 2 Lloyd’s Rep. 527; (1964)
LOSSY VOD2 GAD i i neG AE eae eae can aves ca es Fe Nl ROMER Sec 2-056
TEL Prosperity, The. See Tor Line A/B vy Alltrans Group of Canada Ltd (The
TFL Prosperity)
lvi Table of Cases

T&N Ltd v Royal & Sun Alliance Ple [2002] EWHC 2420; [2002] C.L.C. 1342;
[2004] Tlovd?s Rep: diRe L025 Chie) Fe eeee tee teen eee 2-072, 7-025, 7-035
TTMI Ltd of England y ASM Shipping Ltd of India [2005] EWHC 2666; [2006]
i Lioyd?s Rep e401, OBI (Comin) eyecare cesta aecees eRe teat 7-121
TW Thomas & Co Ltd v Portsea Steamship Co Ltd (The Portsmouth) [1912] A.C.
1a U Ce recta een eee e rneemaretenn visdednaic wegen: do ricoct case 2-046, 2-047, 2-053, 2-056
Tajik Aluminium Plant y Hydro Aluminium AS [2005] EWCA Ciy 1218; [2006] 1
W.L.R. 767; [2005] 4 All E.R. 1232; [2006] 2 All E.R. (Comm) 295; [2006] 1
Lloyd’s Rep. 155; [2006] C.P. Rep. 7; [2005] 2 C.L.C. 604, CA (Civ Div) ... 7-203,
7-204
Takamine, The. See Wilh Wilhelmsen v Canadian Transport Co (The Takamine)
Tame Shipping Ltd v Easy Navigation Ltd (The Easy Rider) [2004] EWHC 1862;
[2004] 2 All E.R. (Comm) 521; [2004] 2 Lloyd’s Rep. 626; [2004] 2 C.L.C.
1155. @BD)(Gomm\—t eo eres oe eee 5-051, 6-033, 6-034, 8-096, 8-107
Tamil Nadu Electricity Board vyST-CMS Electric Co Pte Ltd [2007] EWHC 1713
(Comm) OB Di(Conmn) eres eee ee 2-089, 2-095, 2-097, 7-015, 7-146, 7-147
Tandyand sTamdivn (LS 4)i9 WD)OwIRlOAA: cccncecn-eenssacersceeooehenevecves tee@etenasteachetes esos oe 6-078
Tankreederei Ahrenkeil GmbH vy Frahuil SA (The Multitank Holsatia) [1988] 2
WioydissReps48OLOBD) (Comin) cc ecsecrees seeseenenec eee eee ees eee eee 5-229
Tate & Lyle Industries Ltd v Greater London Council; sub nom. ‘Tate & Lyle Food
& Distribution Ltd vy Greater London Council [1983] 2 A.C. 509; [1983] 2
W.L.R. 649; [1983] 1 All E.R. 1159; [1983] 2 Lloyd’s Rep. 117; 81 L.G.R.
AASAS (OSS PA Oey Scl CRS 243. EAs) car Sete heccecasnch mak ceeee Be Medes a tae ace 6-121
Taunton-Collins v Cromie [1964] 1 W.L.R. 633; [1964] 2 All E.R. 332; (1964) 108
SPLIT CEA are te hsb 5, aa eeSaceaanlne Renny he oc aa te ose toabena oe Suck Oia eracraneeren ed 7-048
Taylor -vaAvieldiungs (1902) SOSH) e253 nce einer tree Seekonk esaee a tee me cee oregon 2-029
Taylor Woodrow Holdings Ltd v Barnes & Flliott Ltd [2006] EWHC 1693 (TCC);
[2006] 2 All E.R. (Comm) 735; [2006] B.L.R. 377; 110 Con. L.R. 169; [2006]
GH. E2375 *OBW (GGG) sates oe nsaeg ck ccasarese et tien geet 7-169, 7-173
Techno v Allied Dunbar [1993] 22 E.G. 109; [1993] E.G. 47 (C.S.); [1993] N.P.C.

Telia Sonera AB vy Hilcourt (Docklands) Ltd [2003] EWHC 3540, Ch D ........... 6-109
Tembec v United States, Investment Treaty News, June 15, 2006 ...................00. 4-117
Termarea Srl v Rederi AB Sally (The Dalny) [1979] 1 W.L.R. 1320; [1979] 2 All
ERE 989; (1979) 2 Wloyd?s! Rep.439:5(1979)123S.J5 537. Q@BD) (Gomm) .-. 4-036
TeweroHarrish(l 348 OTe Mag
@ wen heen teeta saber Bact oct tactile tea toe stad ce een ee 4031
Thai-Europe Tapioca Service Ltd vy Seine Navigation Co Inc (The Maritime
Wanner) (1989) 2) lovd's Repi506,.OBDi(Gonim) tests eenes se reer 5-229, 5-230
Thames Valley Power Ltd v Total Gas & Power Ltd [2005] EWHC 2208; [2006] 1
loydisRep, 44:135(2006) 22) Const. a). 591s OBD i(Gomm) yest 7-027
Tharsis Sulphur & Copper Co Ltd v Loftus (1872-73) L.R. 8 C.P. 1, CCP ........ 2-029
Thomas; Atherton (878-79) Me. RewlON Che aSS 6GAG ee .tee seeeeses aeeenee 3-012, 6-184
Mhompsont va Mullery (367) MSW Rens o saeeecketes eerie nce eee netaeneeeen Rreeeeneet 6-048, 6-053
Mhorburnive Barnes) (866267) BER 2 GP 23845 G@GPiececeh ment tee ee-ceens sees eee 8-016
sinonpgColes i335) eZN UNI SoaRaes 01/8 <cevee crest cot cc tesearenaratite oanseesecticsabnoncen
Sade 6-078
Mhorp ave Lyre ISSA LE Aen Sa wd 26 beatae tre kk eeteeae eae CemterMime see abweae Rae 6-165
Three Valleys Water Committee v Binnie & Partners, 52 B.L.R. 42 ... 5-094, 5-122, 5-127,
6-003, 7-056, 8-174
Through Transport Mutual Insurance Association (Eurasia) Ltd vy New India
Assurance Co Ltd (The Hari Bhum) (No.1) [2004] EWCA Civ 1598; [2005]
1 All E.R. (Comm) 715; [2005] 1 Lloyd’s Rep. 67; [2004] 2 C.L.C. 1189; [2005]
LL.Pr. 30; (2004) 148 S.J.L.B. 1435, CA (Civ Div) .... 2-105, 7-012, 7-013, 7-014,
7-015, 7-016, 7-020, 7-184
Through Transport Mutual Insurance Association (Eurasia) Ltd vy New India
Assurance Co Ltd (The Hari Bhum) (No.2) [2005] EWHC 455; [2005] 2
Lloyd’s Rep. 378; [2005] 1 C.L.C. 376, QBD (Comm) ............ 3-016, 7-096, 7-098
 Table of Cases lvii

Thyssen Canada Ltd v Mariana Maritime SA [2005] EWHC 219 (Comm); [2005]
1 Lloyd’s Rep. 640, QBD (Comm) ...... 6-166, 8-087, 8-099, 8-102, 8-106, 8-108,
8-111, 8-112, 8-217
Thyssen Inc v Calypso Shipping Corp SA [2000] 2 All E.R. (Comm) 97; [2000] 2
Lloyd’s Rep. 243; [2001] C.L.C. 805; 2001 A.M.C. 198; (2000) 97(27) L.S.G.
BT POBLY (Conan) is. Ot. not 2 A ees 7-043, 7-069, 7-071, 7-076, 7-078
TidswelleRens63)3idi Beaty Qgen | dtbend.aent estes tl on Behcde: 6-090
Timber Shipping Co SA vy London and Overseas Freighters; sub nom. London &
Overseas Freighters Ltdv Timber Shipping Co SA [1972] A.C. 1; [1971] 2
W.L.R. 1360; [1971] 2 All E.R. 599; [1971] 1 Lloyd’s Rep. 523; (1971) 115 SJ.
SOSTTU RUS ea VE Eee | SAREE ke IN SE, seth a seated 6-121
Timmins v Gormley. See Locabail (UK) Ltd v Bayfield Properties Ltd (Leave to
Appeal)
Tongyuan (USA) International Trading Group v Uni-Clan Ltd, unreported, Jan-
uary 19, 2001, QBD (Comm) ................ 2-100, 5-072, 6-045, 6-072, 8-012, 8-044
Tonicstar Ltd (t/a Lloyds Syndicate 1861) vy American Home Assurance Co [2004]
EWHC 1234 (Comm); [2005] Lloyd’s Rep. IR. 32, QBD (Comm) .............. 2-095
Top Shop Estates v Danino (C); Top Shop Estates v Tandy Corp [1985] 1 E.G.L.R.
OAS 5)? (SEERGM 9 Tee BES (ARRAN ON ok LR TE es, 5-050, 6-076
Tor Line A/B y Alltrans Group of Canada Ltd (The TFL Prosperity); sub nom.
Investment AB Torman vy Alltrans Group of Canada Ltd (The TFL Prosper-
ity) [1984] 1 W.L.R. 48; [1984] 1 All E.R. 103; [1984] 1 Lloyd’s Rep. 123;
(1984) 81 L.S.G. 435; (1984) 134 N.L.J. 34; (1984) 128 S.J. 18, HL ......... 8-15]
Torch Offshore LLC v Cable Shipping Inc [2004] EWHC 787; [2004] 2 All E.R.
(Comm) 365; [2004] 2 Lloyd’s Rep. 446; [2004] 2 C.L.C. 433, QBD (Comm) .. 6-032,
6-170, 6-171, 6-175
Tote Bookmakers Ltd v Development & Property Holding Co Ltd [1985] Ch. 261;
[1985] 2 W.L.R. 603; [1985] 2 All E.R. 555; (1985) 49 P. & CR. 232; [1985]
1 E.G.L.R. 94; (1984) 274 E.G. 585; (1985) 82 L.S.G. 924; (1985) 129 S.J. 153,
(Chg FERS EES ERE Oe Eee hee cee ee ee eee ee 2-017
Town & City Properties (Development) v Wiltshier Southern and Gilbert Powell
[MOS STFA ROD eee in te weet eee ee eee 2-030, 4-068, 5-206
Town Centres Securities Plc v Leeds City Council [1992] A.D.L.R.J. 54 «0.0.0.0... 4-058
Tradax Export SA v Volkswagenwerk AG [1970] 1 Q.B. 537; [1970] 2 W.L.R. 339;
[1970] 1 All E.R. 420; [1970] 1 Lloyd’s Rep. 62; (1969) 113 S.J. 978, CA (Civ
IDiNest eoetoe a: ho Dir cee ete pteentmens rnd oa eehtae. 2-056, 4-030, 4-033
Tradigrain SA v State Trading Corp of India [2005] EWHC 2206; [2006] 1 All E.R.
(Comm) 197; [2006] 1 Lloyd’s Rep. 216; [2005] 2 C.L.C. 589, QBD
(Gros AAA) eg 3 co don dotcdiae eee eee eeePoEee etc cee ne ONCE EERE aeneeeth ArePasnacanecec caret e eta. 8-065
Trafalgar House Construction (Regions) Ltd v Railtrack Ple, [1995] 75 B.L.R. 55,
COBDS (OR) eee eee eee se cornea cee gate ee antsaesasnon cise snnoaawe'tosmadeeers 3-044, 3-046
Tramountana Armadora SA vy Atlantic Shipping Co SA (The Vorros) [1978] 2 All
EF Rer8 70291973) Mieloyd?ssRep 13911) O BID (Comun)\eeeees 2. cost -ontaeseeee 6-158, 6-160
Transcatalana de Commercio SA vy Incobrasa Industrial e Commercial Brazileira
SA (The Vera) [1995] 1 Lloyd’s Rep. 215; [1994] C.L.C. 400, QBD (Comm) ..._ 6-032
Traube waberelmansyulyeZoreZ 00 G hel y ayes: aceepeesees-ceee tse -e 2-111, 7-028, 7-046
Triad Shipping Co v Stellar Chartering & Brokerage Inc (The Island Archon)
[1995] 1 All E.R. 595; [1994] 2 Lloyd’s Rep. 227; [1994] C.L.C. 734, CA (Civ
1D}6i7)) cotteReeneone asters i Penh see Richter hteSeine. it sechona saacacuc 63 eeaoaoeccr ac Rreaeenaa ec 5—005, 5-025
MrppetayvEyre (L6S+)) Silzevs 2OSMN e Riestac sctctadessn deatusers stressae-ooteentessea
esuctess 4-047
Tritonia Shipping Inc v South Nelson Forest Products Corp [1966] 1 Lloyd’s Rep.
IMIR CoA, Vice ee crot n tet cctome ceccce Aeciecs nopose reece coroua sock Ma penser acesSosa sec 2-058, 7-104
Trustee of the Property of Andrews v Brock Builders (Kessingland) Ltd [1997]
Q.B. 674; [1997] 3 W.L.R. 124; (1997) 94(5) L.S.G. 32; (1996) 140 SJ.L.B.
2:5 OpeGAS (Cire Div eet eee eee eet ede ae Wet eee cen tees edacast rae rencemmetserlomneeaseaenes 7-049
Trustees of Edmond Stern Settlement v Levy [2007] W.L. 1623226 «0.0... 8-127
lviii Table of Cases

Trygg Hansa Insurance Co Ltd v Equitas Ltd; sub nom. Equitas Ltd v Trygg
Hansa Insurance Co Ltd [1998] 2 Lloyd’s Rep. 439; [1998] C.L.C. 979, QBD
(GSS AaV00 IeRe ere eee Meee oO ane 2-045, 2-047, 2-050, 2-055
Tsakos Shipping & Trading SA v Orizon Tanker Co Ltd (The Centaurus Mar)
|1998 EME CH1003 4OBD iContin aeee sececee ates econ: ener neta exten sete 7-179
Tunbridge Wells Local Board v Ackroyd (1880) 5 Ex. D. 199 ......eicieeeeeeeeee 6-183
Turner (East Asia) vy Builders Federal (Hong Kong); ‘Turner (East Asia) vy Gartner,
PUGS Site Te Roy 122 SHEy ONS immo) reece ts 2. 2tedeeaeee tae noche ween den -pemerecee ee 4-108
Turner v Grovit (C159/02); Turner, Re (C159/02) [2005] 1 A.C. 101; [2004] 3
W.L.R. 1193; [2004] All E.R. (EC) 485; [2004] 2 All E.R. (Comm) 381; [2004]
2 Lloyd’s Rep. 169; [2004] E.C.R. I-3565; [2004] 1 C.L.C. 864; [2004] I-L.Pr.
254(2005i] MER2855[2004] TReURS99. BG) Citeanveccsss-cevee: 7-012, 7-013, 7-015
Turner v Stevenage BC [1998] Ch. 28; [1997] 3 W.L.R. 309; [1997] 2 Lloyd’s Rep.
129; (1997) 74 P. & C.R. 200; [1997] E.G. 34 (C.S.); (1997) 94(16) L.S.G. 29,
IRE GaN DVI) a ete rote here och seo Se etna cco sot SE Sa ace EES MEO et Cet wae +060, +061
Tustian v Johnston (Note) [1993] 3 All E.R. 534; [1993] 47 E.G. 139, CA (Civ
DE) ose evcc cae EREPR AE stag en dnass Mowe eslusen sean gstude cosh oeee oe een ee EAE re A3—007, A3—014
Tuyuti, The 1984] Q.B. 838; [1984] 3 W.L.R. 231; [1984] 2 All E.R. 545; [1984] 2
Lloyd’s Rep. 51; (1984) 81 L.S.G. 1362; (1984) 128 S.J. 498, CA (Civ Diy) ...... 2-016,
7-046
Tzortzis v Monark Line A/B [1968] 1 W.L.R. 406; [1968] 1 All E.R. 949; [1968]
I BloydisRep.3s78(1968) M2 eS |e 108s GAY (GivalD iy) eee ee eee eee ee 7-095
Ulysses Compania Naviera SA vy Huntingdon Petroleum Services (The Ermoupo-
lis) [1990] 1 Lloyd’s Rep. 160, QBD (Comm) ... 2-004, 2-075, 2-078, 5-127, 7-056
Union Discount Co Ltd v Zoller (Costs); sub nom. Union Discount Ltd vy Union
Cal Ltd [2001] EWCA Civ 1755; [2002] 1 W.L.R. 1517; [2002] 1 All E.R. 693;
[2002] C.L.C. 314; (2002) 99(3) L.S.G. 25; (2001) 151 N.L_J. 1769; (2001) 145
SRI BE 2705, GAa (Civil) iy) ereee he terete 1 teers ca,Se ee Oe Re 7-019
Union of India v EB Aaby’s Rederi A/S (The Evje); sub nom. EB Aaby’s Rederi
A/S v Union ofIndia [1975] A.C. 797; [1974] 3 W.L.R. 269; [1974] 2 All E.R.
Sa OVA Mblovdis Repasiven (O74) MTS TS Jer595a ENe cs aeeeeeeeeee 2-019, 2-078
Union of India vyMcDonnell Douglas Corp [1993] 2 Lloyd’s Rep. 48, QBD
(Comin) PORES eRe ee et ae ee 2-007, 2-088, 2-100, 2-103, 5—057
Unione Stearinerie Lanza and Weiner Arbitration, Re; sub nom. Unione Stear-
inerie Lanza and Wiener’s Arbitration, Re [1917] 2 K.B. 558, KBD «2.0.0.0... A 2-041
Unisys International Services Ltd (formerly Sperry Rand) vy Eastern Counties
Newspapers Ltd; Unisys International Services Ltd (formerly Sperry Rand) y
Eastern Counties Newspapers Group [1991] 1 Lloyd’s Rep. 538, CA (Civ
DSR seers ch ac Rene AN ee PE Came eee ec eS 3-003, 3-017, 5-024, 5-229
Unit Four Cinemas Ltd v Tosara Investment Ltd [1993] 2 E.G.L.R. 11; [1993] 44
TAGs "PM Wee eared cama rase Acme eaten nersRC Ren tr Roe eee UE 5—050, 6-076
nited Tyre Co Ltd v Born [2004] EWCA Civ 1236, CA (Civ Div) .............00... 4.059
niversal Petroleum Co v Handels und Transport GmbH [1987] 1 W.L.R. 1178;
ee:
[1987] 2 All E.R. 737; [1987] 1 Lloyd’s Rep. 517; [1987] 1 ET.L.R. 429; (1987)
84 IeStGal 2389 GAG (GivelDivy) homes ties etek ae ee ee 6-031, 6-032
Unum Life Insurance Co of America v Israel Phoenix Assurance Co Ltd [2002]
Lioydis Rep iaRes745 GAG (Civils )mee oe cc cee tere eetet: eure ae 7-028
Uptom wi ptom (13882) MD Owl 00 i eereancnte.teic.
hese eee ects tne eee eee ome 6-177
Urban Small Space v Burford Investment Co [1990] 28 E.G. 116 oo... 6-003
VHE Construction Ple v RBSTB Trust Co Ltd [2000] B.L.R. 187; (2000) 2
TCR: 273835/0 Gon ieRed GRD CCG) ola ter. donde, tee au eer 8-003
Vale do Rio doce Navegacao SA v Shanghai Bao Steel Ocean Shipping Co Ltd (t/a
Bao Steel Ocean Shipping Co; sub nom.Vale do Rio doce Navegacao SA y
Shanghai Bao Steel Ocean Shipping Co Ltd (t/a Baosteel Ocean Shipping Co)
[2600] 2 All E.R. (Comm) 70; [2000] 2 Lloyd’s Rep. 1; [2000] C.L.C. 1200,
QBID: (Commun) ~iatates 2a kbiceb id cages eee Cera aee, 5-027, 7-154, 8-191
 Table of Cases lix

Van der Zijden Wildhandel (PJ) NV v Tucker & Cross (No.2) [1976] 1 Lloyd’s Rep.
BFIFOBD (Comin) PR aa eek cc eshsai eee Me eases Baca sa snoseakcncboenevrncetee 6-124
Van Uden Maritime BV (t/a Van Uden Africa Line) vyKommanditgesellschaft in
Firma Deco-Line (C391/95) [1999] Q.B. 1225; [1999] 2 W.L.R. 1181; [1999]
All E.R. (E.C.) 258; [1999] 1 All E.R. (Comm.) 385; [1998] E.C.R. I-7091;
(ODO: SISTEM ir SEEGTA oe eso A frye tentscot SO) Nee a dene FN 2-105, 7-013, 7-184
Vasso, The. See Owners of the Vasso v Owners of Cargo Lately Laden on Board the
AVASSOWS Se EIN com coe och cater ds «eae es Meme ad eee incon ee 5-081
Veba Oil Supply & Trading GmbH v Petrotrade Inc (The Robin); sub nom. Veba
Oil Supply & Trading Ltd v Petrotrade Inc (The Robin) [2001] EWCA Civ
1832; [2002] 1 All E.R. 703; [2002] 1 All E.R. (Comm) 306; [2002] 1 Lloyd’s
Rep295;3(2002)) GalLG 14055 (2002) BaksRa5 4. GAs (GivaDiv)inw.-e. eee 2-029
Vee Networks Ltd v Econet Wireless International Ltd [2004] EWHC 2909; [2005]
1 All E.R. (Comm) 303; [2005] 1 Lloyd’s Rep. 192, QBD (Comm) ... 2-011, 2-012,
5-050, 5-064, 5-120, 6-032, 8-055, 8-080, 8-106
Veritas Shipping Corp v Anglo-Canadian Cement QBD. .............ccccccscsesetteeseeees 4-145
Vertex Data Science Ltd v Powergen Retail Ltd [2006] EWHC 1340 (Comm);
(2006]2 WioydistRep Sok OB a(Comun) areca ose eee 5-077, 6-107, 7-186
Villa Denizcilik Sanayi Ve Ticaret AS v Longen SA (The Villa) [1998] 1 Lloyd’s
Rep: OL95: tO BDAC ova) aeeas Aerere eee ee eee hese AES REN ant gee 7-097
Villa, The. See Villa Denizcilik Sanayi Ve Ticaret AS vy Longen SA (The Villa)
Vineya va Bienoldi@sss)aly. R20 OrBoD ei72 RO BID se eeecmmenne: eaten, ae eerneae
2-022
Virdee v Virdi [2003] EWCA Civ 41, CA (Civ Div) .... 5-199, 7-003, 7-105, 7-109,
7-201,
8-156
Vocam Europe Ltd, Re [1998] B.C.C. 396, Ch D (Companies Ct) ............. 1-033, 7-035
Vosnoc Ltd vy Transglobal Projects Ltd [1998] 1 W.L.R. 101; [1998] 2 All E.R. 990;
[1998] 1 Lloyd’s Rep. 711; [1997] C.L.C. 1345; (1997) 94(34) L.S.G. 28; (1997)
URSA EAB ES OB y(Coram) ieee eevee tee eee 5-022, 7-069, 7-070, 7-073
Vosper Thornycroft vy Ministry of Defence [1976] 1 Lloyd’s Rep. 58, QBD
(Gres oaVr00 faOe eat Os Sent noes ohn eae dos. ape ablybean seca oonsec oneecr eae Meco corre tac?Cpa 2-077
Vrinera Marine Co Ltd v Eastern Rich Operations Inc (The Vakis T) [2004]
EWHC 1752; [2004] 2 Lloyd’s Rep. 465; [2004] 2 C.L.C. 1148, QBD
(GON) eet Age Rete Ree a etae ree eter eENe Sa cee Meco Mire tena osetn sods aeeises 8-163
W Naumann v Edward Nathan & Co Ltd (1930) 37 LI. L. Rep. 249, CA ....... 4067, 5-039
WE & RA Holdcroft v Staffordshire CC [1994] 28 E.G. 131; [1994] E.G. 56 (C.S.),
CG LIN) ssecrceeccorecsiinsoeaceatiennirv
vem estviverast buentoeayadardsainishy 5kMeee radertae Ee orkA3-010
WJ Alan & Co Ltd v El Nasr Export & Import Co [1972] 2 QB. 189; [1972] 2
W.L.R. 800; [1972] 2 All E.R. 127; [1972] 1 Lloyd’s Rep. 313; (1972) 116 S.J.
aced 5-007
ITER), CER CIN IDNA) care8 ese se coddot aktvlod Jaluhes es escan Sata dooce annosuadaoeecaeenauecAaeeectposbct
Wade v Dowling (1854) 4 E. & B. 44 o....ccceeeeccesseestetreercceteeseessesseeeresneenseeeneenee 6-050
Wade-Gery v Morrison (1878) 37 L.T. 270 ......cccecc eteeseeeeeeeeneeneens
tees eeeeeceeeese 2-052
Wakefield (Tower Hill Trinity Square) Trust v Janson Green Properties Ltd [1998]
E.G. 95)(C:S.); [1998] NPG. 104, Ch Doon. enetseousedeecensoatowee
iciicee eee stesccat sn 2-114
Walker v Rome; sub nom. Walker v Rowe [1999] 2 All E.R. (Comm) 961; [2000] 1
Lloyd’s Rep. 116; [2000] C.L.C. 265, QBD (Comm) «0.0... 6-117, 8-003
Walker v Rowe. See Walker vy Rome
Walker v Sur [1914] 2 K.B. 930, CA ....ccceee ereneseereeeeneess
eeeseteeeereseereneenecene
ccecece 3-013
Walker & Son and Brown, Re Arbitration between (1881-82) L.R. 9 QB.D. 434,
BIN hoch ae. co onvesnsntterrens donee. sora cesdohecba dieses tages seen re cantsh end aaaenosrbenete ene Bt 6-131
Walker International Holdings Ltd v Congo [2005] EWHC 2813, QBD (Comm) .... 3-038
Walsall MBC v Beechdale Community Housing Association Ltd [2005] EWHC
Pails, (OBIDY(MGC) he ceca ssa.ccosseebaasece 5-051, 8-125, 8-128, 8-134, 8-140, 8-148
Warborough Investments Ltd v S Robinson & Sons (Holdings) Ltd [2003] EWCA
Civ 751; [2004] 2 P. & C.R. 6; [2003] 2 E.G.L.R. 149; (2003) 100(24) L.S.G. y
38; (2003) 147 S.J.L.B. 748; [2003] N.P.C. 75, CA (Civ Diy) ...... 5-037, 5-042, 5-050,
6-075, 6-082, 8-072, 8-080
Ix Table of Cases

Ward Bros Plant Hire Ltd v Banlaw (Europe) Ltd, unreported, November 19,
TRUK ae annie ane sn ace cercoh aoeece osono” unncnoneee cangenre AnneRene secu oineega andar Asda caacs haa don Acco dty 5-121
Watson v Prager [1991] 1 W.L.R. 726; [1991] 3 All E.R. 487; [1991] LCR. 603;
(LOOSE RV ISIBAR 82 oa Ch DIRT pee tere ae scttsnak. ada en doy catenene see cec tas ckeey caster 4-015, 7-110
Wealands v CLC Contractors Ltd; sub nom. Wealand y CLC Contractors Ltd
[2000] 1 All E.R. (Comm) 30; [1999] 2 Lloyd’s Rep. 739; [1999] C.L.C. 1821;
[1999| B.L.R. 401; (2000) 2 T.C.L.R. 367; 74 Con. L.R. 1, CA (Civ Diy) ... 5-003,
6-111, 6-112, 7-048
Weissfisch v Julius [2006] EWCA Civ 218; [2006] 2 All E.R. (Comm) 504; [2006]
1 Lloyd’s Rep. 716; [2006] 1 C.L.C. 424, CA (Civ Diy) .. 1-003, 2-097, 2-106, 4-144,
5-039, 5-072, 6-052, 7-011, 7-062, 7-128, 7-144, 7-183, 7-189
Weldon Plant Ltd vyCommission for the New Towns [2001] 1 All E.R. (Comm)
264; [2000] B.L.R. 496; (2000) 2 T.C.L.R. 785; 77 Con. L.R. 1, QBD (TCC) .. 5-037,
6-046, 8-078, 8-094, 8-095
Welex AG v Rosa Maritime Ltd (The Epsilon Rosa) (No.1) [2002] EWHC 762;
[2002] 1 All E.R. (Comm) 939; [2002] 2 Lloyd’s Rep. 81, QBD (Comm) ..... 2-056
Welex AG v Rosa Maritime Ltd (The Epsilon Rosa) (No.2) [2003] EWCA Civ 938;
[2003] 2 Lloyd’s Rep. 509; [2003] 2 C.L.C. 207, CA (Civ Diy) .......... 7-018, 7-153
West of England Ship Owners Mutual Protection and Indemnity Association
(Luxembourg) v Hellenic Industrial Development Bank SA [1999] 1 Lloyd’s
IRyoy, Sie IMAL ELCs, SIL, (OLSID) (CE @saahon) 3.eoscoacocpec seeocccccoreseeacosnacer snicsoco 7-080
West Tankers Inc v RAS Riunione Adriatica di Sicurta SpA (The Front Comor)
[2007] UKHL 4; [2007] 1 All E.R. (Comm) 794; [2007] 1 Lloyd’s Rep. 391;
[2007] I.L.Pr. 20; (2007) 104(10) L.S.G. 30; (2007) 151 S.J.L.B. 294, HL .... 1-051,
2-105, 7-012, 7-013, 7-018, 7-020, 7-184, 7-196
West Tankers Inc v Ras Riunione Adriatica di Sicurta SpA [2005] All E.R. (D)
SSONE PEAS eA ee ATTA AES Sue kare eee Md 7-013, 7-014, 7-017, 7-020
Westacre Investments Inc v Jugoimport SPDR Holding Co Ltd [2000] Q.B. 288;
[1999] 3 W.L.R. 811; [1999] 3 All E.R. 864; [1999] 1 All E.R. (Comm) 865;
[1999 eZ loydis Repos) [1999] (GL 117651999) Bae RW279) CAN(Giy
|DAB) 8 wake Mente ceetecpes eckcbt tec ecck eater 1-051, 6-166, 8-031, 8-032, 8-044, 8-099
Westfal-Larsen & Co A/S vy Ikerigi Compania Naviers SA (The Messiniaki Bergen)
[1983] 1 All E.R. 382; [1983] 1 Lloyd’s Rep. 424; (1983) 133 N.L.J. 125, QBD
(Commit) sozdciceke hte este he hed ee EE oan er eer GbE oh epee 2-067
Westland Helicopters Ltd v Al-Hejailan [2004] EWHC 1625; [2004] 2 Lloyd’s Rep.
5235 OB Ds (Comin) ere check. ocereeeretereee sence ears cheers cs eee eee 4092, 5-026
Westminster Chemicals & Produce Ltd vy Eichholz & Loeser [1954] 1 Lloyd’s Rep.
99 SQ BID eee Pe RES tele tren tog cee eet cs och etna Seer oe ee eR 2-016
Wharton hing (532)\P25 Ba soada 52.809 lee) 0(Ol) pee 2yillierenna eee eee 6-095
White Knight ISA v Nu-Swift, unreported, July 14, 1995 oo... ceccceeeeeeseeeeeee 8-041
Whitehall Shipping Co Ltd y Kompass Schiffahrtskontor GmbH (The Stainless
Patriot) (1979) Me loydisi Rena 89s OBI s(Gomin) ieee eee ceeeke aeereeeteeees 8-168
Wihtteheadivadiattersall tS) al eA clic JetOpen ec acceee rae ete e cee gene neenn ee 6-177, 6-181
Whiting v Halverson [2003] EWCA Civ 403; (2003) 147 S.J.L.B. 541, CA (Civ
IDSA) Fer Neem cesterra eoceronned rte oc LEELA ata Ce 2-044, 2-048, 3-013, 7-038
Whitworth Street Estates (Manchester) Ltd v James Miller & Partners Ltd; sub
nom. James Miller & Partners Ltd y Whitworth Street Estates (Manchester)
Ltd [1970] A.C. 583; [1970] 2 W.L.R. 728; [1970] 1 All E.R. 796; [1970] 1
Ieronscakis dere), PAGE (USA) MIST PPS), VEIL, 5. So sseosseoocnacentiss sasiece 2-093, 2-102, 5-057
Wohitworthivataulse (365266) Ra le ixmizoile ieaxe (Cty eerie eecees tetera oeeereeaa veeenaa! 6-078
Wickettsiéo Sterndale vy BrnesBuilders} (2002) (GUL bal805) steeree 7-125
Wilh Wilhelmsen v Canadian Transport Co (The Takamine); sub nom. Canadian
Transport Co v Unimarine SA (The Takamine) [1980] 2 Lloyd’s Rep. 204,
OB (Corrinne Ml hn OER EEA Ye ie ed Jed) 8 8 6-146
Wallday vaalaylori(1976)i24 IEEGriSoh iGAy (Givi Div) eee eee tee eee. 6-178
Williams v Wallis & Cox [1914] 2 K.B. 478, KBD .u........ceeeeeeeeee 5-042, 7-126, 8-081
 Table of Cases Ixi

Wilson akeen; unreported (june 2521991 CAM... eae. Jo. eee ee 4019
Winteringhaml vaRkobertsona(1353)271e\) Exch) 301 cette. eee ee 4-150
Wohlenbene ava leagemann (sills) sonia imtaeo)l aeerehersry tere a eee rte ees ene ean 6-093
WoodiveAdcocks (352) iiix4:0 82 lise: mx.) 204s enter ee 6-099
Wood asGri frien CLS 1S) 1 Swans bet 3 Becta gc) a. 08 vee li ee ee Ree 6-072
Woolf v Collis Removal Service [1948] 1 K.B. 11; [1947] 2 All E.R. 260; 63 T.L.R.
540; 37A. L.R2d 378: [1947]. J.Re 1377; 17% LW. 405, CA” ..42-004;,2-017, 2-079
World Pride Shipping Ltd v Daiichi Chuo Kisen Kaisha (The Golden Anne)
oSaipZaleloy dts: Repr4595©19s (Gorin ieee steer cae 2-112, 2-114, 3-049
World Trade Corp Ltd v C Czarnikow Sugar Ltd [2004] EWHC 2332; [2004] 2 All
E.R. (Comm) 813; [2005] 1 Lloyd’s Rep. 422, QBD (Comm) .... 6-031, 6-032, 6-032,
6-079, 6-083, 6-171, 8-082, 8-093, 8-094, 8-095
Wosralliva Topps [(Z007 EWitG: 18097(Eh)\ Chere seseseeeeseeecetescsespeeees 2-030, 2-031
WirightrancdsGromtords@anal (Cone (1841) pls QiBe0 Sire. we cecerstecsee-sssserccessaaeets 6-078
DEG nuste2 J0Gneowiss Un Gt (lsts Civil Chamber) lems nesceescse sca eats 4-123
X Ltd vy Y Ltd [2005] EWHC 769 (TCC); [2005] B.L-R. 341; [2005] T.'CL.R. 5,
CONEBYR OIG) arrerse deeaone rene cone cedar thcosbacennee ores aseer Eatenrr 2-078, 6-111, 6-112, 8-067
XL Insurance Ltd v Owens [2001] 1 All E.R. (Comm) 530; [2000] 2 Lloyd’s Rep.
500; [2001] C.P. Rep. 22; [2001] C.L.C. 914, QBD (Comm) ...... 2-060, 2-089, 2-095,
2-096, 2-097
Xing Su Hai, The. See Qingdao Ocean Shipping Co y Grace Shipping Establish-
ment Transatlantic Schiffahrtskontor GmbH (The Xing Su Hai)
Yat Tung Investment Co Ltd v Dao Heng Bank Ltd [1975] A.C. 581; [1975] 2
WelRev6 9011975) SOLS x 273 ee euee scum eeseecs cee cemrcen oe eeee epee eee eee PPP
Yukos Oil Co v Dardana Ltd. See Dardana Ltd v Yukos Oil Co (No.1)
Zambia Steel & Building Supplies Ltd v James Clark & Eaton Ltd [1986] 2 Lloyd’s
Repg Se GAS (Civ AION) were. csroc- de, ohatete noe cor ener eet sanates teenies 2-039, A2—006
Zaporozhye Production Aluminium Plan Open Shareholders Society y Ashly Ltd
2002 EWI Cae ON OB e(Commn) iexececc tect Penns aes ata career 7-144
Zermalt Holdings SA vy Nu-Life Upholstery Repairs Ltd [1985] 2 E.G.L.R. 14;
(935) p27Suk Gee 54 OB) \(Conii) ier-eneeosee ease seers 5-050, 6-070, 6-076
 TABLE OF STATUTES

References in bold indicate where legislation is reproduced in full

1845 Gaming Act (8 & 9 Vict. 1934 Arbitration Act (24 & 25
c.109) Geo src ays ee A2-011,
SUS ere ee ee eet eee 2-013 A2-015, A2-072,
1854 Common Law Procedure A2-079
Act (17 & 18 Vict. SIO(G) Soe ee A2-015
Gall.) peer eer ee oe 1-001 1939 London Building Acts
1889 Arbitration Act (52 & 53 (Amendment) Act (2 &
Wile C:4.0)) tates peer eee A2-079 3 Geo.6 c.xcvil)
1890 Partnership Act (53 & 54 1950 Arbitration Act (14 Geo.6
Wictac:59) TN) clone 1-015, 1-044, 2-045,
4-037, 7-121, 8-100,
SORE Sh ns ee ES, 3-012
A2-079, A2-140
SOR eee tren eerene ne ete 3-012
Ptglieieccc et were 2-023, 8-167
1911 Perjury Act (1 & 2 Geo5 Pril .. 1-042, 1-044, 1-046, 5-072,
c.6)
6-041, 6-042, 6-052, 8-020.
SSL GI) teesreeneecteawayccanesn rote: 5-164 8-023, 8-047,
(2s at AE Ae PE 5-164 Al—118—A1-125, A2-085,
1925 Trustee Act (15 & 16 Geo.5 A2-106
c.19)
Sula eee eee ee 3-027 (30 ae oe Rao PO ee a A2-011
Law of Property Act (15 & i ee REA eR RN Rear 8-019
16 Geo.5 c.20) SAS Pee een ee 1-046
SMUSORtare en eee 3-019 (CL eee ee ey A2-012, A2—080
Supreme Court of Judica- SEO Ree A2-013
ture (Consolidation) SiOeecece odo cs a ots eee 1-042
Act (15 & 16 Geo.5 SH eatetk Seeeeess uO 4-037
c.49) (D) ick eee 4-041, A2-019
SUAS oS ree sor ee ea 8-159 SIG aera caeesanto ee ae ee 4-007
1930 Arbitration (Foreign (2) Siok pe arcene tht Bed eee 4-009
Awards) Act (20 & 21 ies ee ace 4-044, 6-057
(G05) CMS) cosesctnpoosn: 1-046 chill (Misery eee eee ete te 7-103
(2) (QV) ERS. Seactnenee ae eee 7102
Third Parties (Rights
(Gi)igreseeeeerte tates dene OL ae 7-103
against Insurers) Act
Sel ee ea eS. 4-021
(20& 21 Geo.5 ¢.25) ... 3-018,
StlDie See meee 7-207
3-021
(GON cooret 4-075, 4-077, 4-086,
1933 Foreign Judgments (Recip-
5—081, 5-135
rocal Enforcement) Act
(=) is: ee eee 4-072
(23 & 24 Geo.5 c.13)
(GUE eta 7-203, A2-046
Ae DLR Se pcsth tach aes Core 8-050, 8-225 (Q)kea eee ene A2-046
Administration of Justice (O}R a i rete 1-042
(Miscellaneous Provi- MO) ie estes Secs 7-204, 7-208
sions) Act (23 & 24 Sree ers cette at eae Meat 7-122
Geo.5 c.36) (CAVA oooh acme te 7-081
(hh eee ees, ae 4-132, 4-155
 Table ofStatutes Ixiii

CUGAME paired 5-224, A2-044 1969 Family Law Reform Act

s.14 ... 1-015, 6-003, 6-009, 6-011, (c.46)
6-018 ch rareAte dhs nema ene Rees Aas 3-004
SIRE anh sav preys 6-108 1970 Administration of Justice
Sith caacebebun Oeocc: 6-162, 8-002 Act (c.31)
bee oa, eee ee 6-168, 8-170 SE en 4-019
5.18(1). Aah elo 6-129, 6-155 1972 European Communities Act
Creag SOIC E: A2-062 (lal) eee irc eere e A3-010
Acti ett ine Med 6-129 1974 Friendly Societies ~—Act
#19 Lenalble 4-064, 6-069, A2-059 (c.46)
CE rerine ae Ve eY. 6-071 Cy AUih tenahrenttereeeprny
rNerrorA3-018
HONE het casdecs Ces leben lee 6-071 Solicitors Act (c.47)
Aoi 4k 4.095, 6-120 7s) ep satbadetichantar
uae eharen 8-018
2ONETES, Blstcuert Sr 6-117, 6-121 1975 Arbitration Act (c.3) .......... 1-045,
neler tac we me ry [4 7-165 1-046, 1-050, 6-037,
Sy Meet eae Aad De9 8-163 7-023, A2-012,
ane, ec Ae 4-107 A2-080, A2—085,
GAN Pets de eo ane t 7-056 A2-140
Ot Aa ee 4-107 Sil beapnea aes 2-005, 7-042, A2-012,
ED eee eee 2-083, 7-110 A2-080
eee OU ne A2-028 (I) cere 1-046, 7-047
iene ce ee ee 82173 (Al eeceeccemre
ene terRepm ee: 1-045
(78 ile ec aoe ss 2-023 SHSME) brea 8-023, 8-219
3.26 ... 5-064, 7-143, 8-001, 8-047, (Le sara Resete paccatse N Ny 8-023
8-219 Pee ee par 8-024
lia: Warekt nnenetrs Staoat 8-003 SE) cones ceceege trae ree 1-046
s.27 ... 5-009, 7-068, 7-071, 7-072, (C2)(D) Renee es eee 2-095
7-074, 7-076, 7-079, A2-015 G\R cat eee 8042, 8-043
See ae dacdes ee eaate cag A3—004 OG) sk Soe oe. oe. oes 8—045
Gl reheass deeds cate eae A3—007 SUES Peta ooo ta ee: A2-006
(2) ee nade ee oe eee NOH O00 (Gl eer eer 6-039, 6-052, 6-053
SiS2 amar 2-004, 2-015, A2—006 S18 (2) (iRee et sere eee ree A3—006
S50 oe re See 1-046, 8-047 Evidence (Proceedings in
(ke eesti eet 2 6-041 Other — Jurisdictions)
SS OG) eaneteiel cane etees 8-047 ACHE(CS4)i pee rere 7-191
OT aa at de ates i a eth 8-047 Sex Discrimination Act
S83Sates eect Neha SAREE 8-047
(COD) cee 7-039
Industry Act (c.68) ........... A3-004,
ASYelied eee tereeereee
aasbap econ 8-047
A3-022, A3—023
SCNS4 pees eegaacnsiatlunn th Mets 8-020
Ce ead prin botin teeaecaneyA3—022
1950-79 Arbitration Acts ...........1-042,
Se, enone cee: een oe eee A3—-022
1-043, 1-050, 1-053,
7-056, A2-001, Schisiparass een. A3022
A2-140 PALA recs conse cresssceeesas A3-022
1966 Arbitration (International Dakaddpecece ceeNo 25
Investment Disputes) avant eee econ! A3-022
ENE R(COA
MD) foctcoce 5-072, 6-038, paral, ee sevespecmorseccae
carps A3-022
6-052, 8-020, 8-048, 1976 Race Relations Act (c.74) .... 7-039
8-049, 8-225 1978 State Immunity Act (c.33) ... 3-036,
8045, 8-224
3:0 sei cxte a.odn Seba te DM 3-037
8-049 (Len ccesuse ccs dee a 8-023
§—048 (eeae, 3-037
(CA aebessaee 3-034, 8-049, 8-052, S12 GL):-bevmtenateeee ae 8-224
8-062 Oleic ee 8-224
Ixiv Table of Statutes

Civil Liability (Contribu- Foreign Limitation Periods

TOM) e\ Cle(C/I) etreeee Act(G16)RAR 7-080, 8-177,
A2-016
Pier ct en REM akc Mecea aco County Courts Act (c.28)
IDA Arbitration Act (c.42) ......... 1-015, SHO (IN: 5. cncebapersenteastarnoein A3-004
1-050, 6-031, 6-033, SO eee oe eens mateo ee A3—004
6-054, 6-111, A2—002, 1985 Companies Act (c.6)
A2-048, A2—066 S55 (neds teecce ste 3-008
s.1 .... 1-048, 1-050, 8-119, 8-120, Se Holt aoe pe cee Sao 2-051, 7-039
A2—048 1986 Agricultural Holdings Act
(2) eee cies cera meena: 1-042 (GIN eee A3—002, A3—007,
(3)(b) eee 7-168, A2—-048 A3-011, A3-012,
(A) eee 1-015, 7-168, 8-132, A3-014, A3-043
8-133, 8-136, 8-161 Is Re ee eae catac 7 A3-011
(Sy desta 6-003, 6-031, 8-130 SIO Ret nao ee acee ee eee A3-011
(CGAY aula Neen bene 8-155, A2-096 ShelAhcae Senge rh eres eee A3-011
iS) le Taree EAE Reps mBcDONGOUE A2-048 SiO4El eccceee ee eee cs eee A3-014
(Cl) Piece 1-048, 7-165, 7-172 Sch lee eee ce Oly,
(OA aosstnenae qebeuacoretaanaar ns A2-048 Gas Act (c.44) ... A3-032, A3—0454
(al) essere tec sceeat wet eevee’ 7-159 SO cere tee ASSL
(G) Peer teeters 8-159 ia AD Nilesat rere ae da A3—030
SoS en tes neater eae 6-033 STAY aren ctea te Cee ener A3-032
(INA reescces.aretere mens nse 1-048 (Ci nearest nantes eats A3-032
SUL eeeeer cca ott: 1-033, A2—080 SOW) foe ee See eee eee Se
Gites 1-048, 2-063, 6-033 Insolvency Act (c.45) ......... 7-039
(2) ee a eres 1-048
Ptah Ve Ghelieress eee:eee 3-031
SS oear nn aue cages Arete stioruoeeeniege 8-02
ProlVs Chie eects 3-031
(GO ecenccmtonconacepietere seca eee 8-028
Pt aLV Gene ee rcre ecto 3-031
SEO (2) een cere eerenee 4-044, 6-057
IPAS GUNA matere baat Bead hae 3-031
Sale of Goods Act (c.54)
Cas CELTS Vilar reenter eee 3-032
SIS RIN A Sete Oe eee 3-005
Pisa TeX ee eee reer 3-027
(GQ) Ferrie ccc eee 3-005
1980 Limitation Act (c.58) ......... 5-010,
SO Seen ee ere ee 3-031
7-080, 8-177 yO ae A ete ernas 3-032
Solent neers cieecedi te tee set 8-017 SrA Gt Dome inal eae ee 3-032
Sie tne BRC OC Bae AS sco Ore 8-017 SUS 0(Q ee eee ees. 3-032
S/S (IL) tevesaseava mest evinces 8-177 S145 (Lie akies 3-032
(3) eee eee 5-022 (2 ireeeccorieiors soccoranise eee 3-032
(2) eee ete mechs 5-021 Su G5(3 has nwanceorsceneee ee 3-031
UD) Roe chante teemaas 5—021 SiG,
(Uli)(a tengo aseacewcheeeeeenss 3-032
1981 Supreme Court Act (c.54) ... 7-196 SIZ85 (61) eareneetenecteeer 3-029, 8-019
SOLO TS ec erences ten acres 7-176 (3)(O) ikeieees SRRae ss 3-029
S35 6( 4) trea ee meee cee ee ee 7-205 SIUae mentees ecco ceSahat, 3-028
SE iieeseeccnntes 7-018, 7-195, 7-196 So UN CA eae races eto uses 3-028
1982 Civil Jurisdiction and Judg- (Si) cee raencoce nieCoens cee 3-028
TMCIVES NCU (C27) Meenas 2-105 Schull paraiony keene meee 3-030
CAE Peetencecs Soe aaEeS A2-003, A2—109 Sch.4 Pt II (4) ......... 3-031, 3-032
SZ Ore tec ctsenttncc eet: A2-014 Chr mpara.O: heeds een 3-028
Supply of Goods and Sery- Schiele para (6) acne eee. 3-030
ICE SINCin(CODY) Ireeenareee 4-153 Building Societies Act
(lh caepeice Oe ee mae GGA Ss 4-155 (c.53)
1983 Mental Health Act (c.20) SehalspararAueueesssnnt eee: A3-049
Pra Ville emer eee eee. 3-006 Financial Services Act
S22 Ohrid Oe 3—004 (G00) eeteroree scare A3-008
1984 Telecommunications Act SHESOe ae Mirtecccnonsenacaeecars 4-154
(Col2) ies ert. A3-037
 Table of Statutes Ixv

1988 Multilateral Investment Competition and Service

Guarantee Agency Act (Utilities) Act
(io) Picante pease 8-050, 8-225 (E43) eek! A3-032, A3—044,
Consumer Arbitration A3—045
Agreements Act Trade Union and Labour
(c.21) 2-084, A2-081, Relations (Consolida-
A2-129 HO) Acta (G52). vse A3-019
1989 Electricity Act (c.29) ........ A3-029, SA) G) eee ee O09
A3—-044 (DARE. ccSeausor cee A3—019
(BI Re tee todecoet cs hence A3—019
Gib Ree. cee A3—020
s.44A (ORR SG tend ena A3-019
Companies Act (c.40) SWISH ee Meet Slenacte carne A3—019
ShZ00 (Bee sree ooeyecin ts ees A3—020
SWLOS (Lee crcmcener
cect ones ea
(GEE hecccsnend sehen A3—019
1990 Contracts (Applicable Law)
SELON AMA ees. cceeouss sarees A3—020
INGUA(G23.O) metre: 2-092, 2-093
Tribunals and Enquiries Act
XG Od ren woe ee cteree 2-092, 2-094 AG: SS) Acs ta eoaeee A3—002
Courts and Legal Services 1993 Gas (Exempt Supplies) Act
Act (c.41) (CL) ES Pee. ete reyA3—032
SSB eee, eens ata 6-131 Charities Act (c.10)
SOOLE eye enc tae, teste 4-021 5505 (Ke) peease th ns ccumhrmateets 3-008
SHO 2seMmeceaec arate 5-224, A2-044 Sehr Ouparcak2 Okie 3-008
SALOG cere terete ee ner 4-077, 7-208 1994 Coal Industry Act (c.21) ....A3-026
199] Civil Jurisdiction and Judg- 1995 Agricultural Tenancies Act
TEN ISHANCE (Cul2) eee 2-105 (Re) )ssonecegor: A3-013, A3—014
New Roads and _ Street SHSGI RM dct ot ie ccnte te A3-013
Works Act (c.22) ........ A3-024 (SD ree cic eee eee Lett A3-013
JPAitaUU essa at nce arin de A3-024 SU) Becca cconePReEee eeeSESRE A3—013
SHOIC (Gi) sheareaiarntietee aga SAAS A3-024 S10) Speer cereccaca dee Mice A3-013
Civil Evidence Act (c.38)
ST ci neh er seemietin aria e6 A3—024
SUL rh cere aac me tent bvsearananes 5-142
Road Traffic Act (c.40) ...... A3—024
Sa), Oana sicaresteens eeepc 5-142
Coal Mining Subsidence
CULTIST A echcsesie tac Stee 5-142
INCt¢ (GHD) eerea masa. cca A3-026
GasrActa (CHO) irene eres A3—-032
Water Industry Act (c.56) .... A3-033 Disability | Discrimination
S84 )74(8 asec a nccemecmte
acesene Abemes: A3-033 INGE (CESDN) sdodeondesscancxene 7-039
BFR CEEDACED saSeeaReO Ra aoe cA LGaney A3-033 1996 Employment Tribunals Act
SIO CO) AN eee. RA eectnedA3—-033 (GD) ng etnoanseecacttoatens A3-021
SaOMGeeeen ac cru mecca ere A3-033 SO C2) Madan eenccarrene 7-039
Water Resources Act Arbitration Act (G23)iten- 1-001,
(CT, aeons ctrtaee. A3-033 1-006, 1-007, 1-008,
SulQS(Gy Meten eect ene rtecerne A3-033 1-010, 1-012, 1-016,
CKO CB heertanduttcestteter
ence eanti A3-033 1-033, 1-038, 1-039,
1-040, 1-042, 1-043,
Land Drainage Act (c.59) ....A3-033
1-044, 1-046, 1-048,
i JIS (Oe Ae citetestaen teReemeee tioA3—033
1-049, 1-051, 1-052,
1992 Further and Higher Educa- 1-053, 1-054, 1-063,
tion Act (c.13) 2-001, 2-002, 2-015,
SGlis55 paliayawe cssesee cnet eA3-049 2-016, 2-028, 2-030,
Friendly Societies — Act 2-038, 2-038, 2-039,
(c.40) 2-042, 2-044, 2-045,
Sol0\(1) ssameanne
mecca eccnenoresoc.A3-018 2-047, 2-060, 2-061,
O\)s Sateeten foie teeth eRe pO 2-070, 2-075, 2-088,
Sie RRS. ceatedccccue tenes A3-018 2-091, 2-092, 2-101,
2-103, 2-106, 3-015,
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 Table of Statutes Ixvil

(YR 7-199, A2~109 7-054, 7-055, 7-058, 7-096,

(5) aed. 1-021, 2-008, 3-026, 7-143, 7-147, 7-153, 7-206,
5-002, A2-109 8-178, 8-189, 8-210, A4-018
s.3..... 1-003, 1-056, 2-060, 2-094, A) Aid 7-030, 7-037, 7-039,
2-100, 2-102, 4-073, 5-071, 7-041
5-072, 6-052, 7-150, A2-109 Ok aetna1° 2-036, 7-041
it + BAN. OB, 2-101, 2-103 (BY Pit ae, 7-042, 7-043
(oer a ke 2-102, 7-191 Cee 1-046, 7-024, 7-030,
Os ees at, PA. F=150 7-046, 7-047
8.4 .... 5-032, 5-039, 7-024, 7-068, (Gr. ibe 2-023, 7-052, A3-006
8-054, 8-072, A4-014 1 1 ene 1-021, A2-109
(highs 2-012, 2-103, 4-069, g LO bate NOP cast 1-003, 7-054
5-089, 7-138, 7-154, 7-203 Wt SN ancaincak ee 7-054
(Q)\e an. ea Phoe 2-060, 2-103 (Dy aha Pailin 7-054, A3-006
Cee 2-060, 2-061, 5-100 Sih), dais Wess. 1-003, 7-206
(S)c..8ek. 2-060, 2-103, A2-109 Ol tiot cae oeet 7-206
s.5.... 2-015, 2-016, 2-038, 2-040, s.12 ... 1-004, 5—007, 5-008, 5-009,
2-046, 4-004, 5-023, 5-100, 5-012, 5-019, 7-067, 7-068,
5-228, 8-015, A4-017, A2-110 7-069, 7-071, 7-072, ay
(CD ome ena st 1-002, 2-002, 2-015, 7-074, 7-075, 7-076, 7-079,
2-060, 5-023, 5-062, 5-072, 7-083, 7 086, 7-089, 7-094,
5—085, 5-223, 6-029, 6-033, A3—006, A2—109
6-035, 6-050, 6-052, 6-053, PLC hie, DEleen. P02 7053
6-057, 6-061, 6-064, 6-065, Ov akan 008, 7-072, 7-075
6-067, 6-097, 6-099, 6-101, 70g
6-105, 6-107, 6-109, 6-116, (OE Poet, Mbt ete: 7-068
6-142, 6-162, 6-173, 7-027, G) bie. 7-069, 7-070, 7-078
7-133, 7-169, A2—114 iota) 7-071, 7-078
(2.)imess eeprscee: 2-043, 7-027, 8-021 LS Wien pM Aba § x25 7-079
(AN acer eee ace RM 2-038 Gieeiek. 5012, 7-072, 7-080
(ilo) oie cereeaees ne 2-038 Cie eee: |ae 7-094
(GPa eeernca encecneae ak 2-039 SAS iseee 5-010, 7-080, 8-177
(BS) eemrceGesncnencnere: 2-039, 2-041 (redid: 5 0197 080-8177
eS ede nia aE sre 2-039 lee 2-023, 5-014, 7-080,
(ON ipatur teen. 2-015, 2-016, 2-039 ea
(6 igPeaietoe: ese ce netrioaes 2-039 GT eh ac 7-080
.. 1-002, 1-008, 1-048, 2-002, (Ey aR ea ORD:fog, eae 8-177
2-047, 7-041, 8-014, 8-015, 4... 2-060, 5-018, 5-021, 5-022,
A4—016, A4—017 5-023, A4-036
UL) aicesesecwss 2-002, 2-004, 2-084, G8 aera 5-005, 5-021, 5-023,
7-010, 7-027, 8-002, 8-021 7-080, A4-036
(2) eas 2-002, 2-045, 2-050 GRATER es SO A4036
s.7 .... 1-020, 1-021, 1-036, 2-007, CPi te 5-005, 7-080
2-008, 2-010, 2-011, 2-060, (ieeenen 5-021, A4-037
2-095, 5-002, 7-028, 7-029, (BES Mens, HOLS. 5-12; 5023
8-031, A4-029, A2-109, Ged ie 5-021, A4-037
A2-110 (St Soe ences 5-021, A2-111
fe oh A 1-021, 5-002, A3-006 5.15... 2-060, 4-008, 4-036, 7-107,
i) 3-026, 8-015 A4021
se eee htean 3-026 AR OM Pe get. 4011
s.9 .... 1-003, 2-012, 2-034, 3-015, ere een 4.007, 4-009, 4-011,
5 062, 5-064, 7 vs 7-011, 4-025, 4-036, 4-043, 4-044,
7-024, 7-025, 7-026, 7-027, 7-100, A4—022
7-028, 7-033, 7 034, 7-035, (Bite cmhces 4-006, 4-027, 4-035,
7-039, 7-040, 7-042, 7-045, 7-095, 7-098
7-046, 7-047, 7-050, 7-051, Soh J)
OA eee 8 re eae Senco naga 1-016
Ixvili Table ofStatutes

s.16 ... 2-060, 4-039, 7-089, 7-095, (Onc ee 7-109

7-097, 7-103, 7-103, 7-104, S20 5. ANd 2-060, 4-036, 6-002
7-105, 7-130, 7-137 | eee es 4044
ipere e 4-024, 7-095, 7-103, (2). pated 4-044, 4-147, 5-112,
A4023 6-035, 6-057, 7-157, 7-170,
C=C) wae 4-025, 7-095 7-200
ney 4-025, 4-028, 4-035 664. aie 2-060, 4-166, 4-027,
(CO) (aint See eer. 7-103 A2-113
(Giec 4-025, 4-028, 4-039 ee ee ae 5-228, 7-110
(Sic bed 4-025, 4.028, 7-100 (4), AS. 2-110, 5-228, 7-141
(Git ta ete es 4-025, 4-028 (Gia): Sees. oe 7-110
(b) ...... 4-009, 4-149, A2-112 5.24... 1-016, 4-040, 4-051, 4-104,
eon 4-025, 7-095, 7-097 4-105, 4-111, 4-112, 4-119,
s.17 ... 2-060, 4-016, 4-037, 4039, 5-036, 7-056, 7-110, 7-111,
7-099, 7-100, 7-102, 7-109, PS. F115, F120. 7-131,
8-038, A4024 7 4 B15, FIG 7A127,
CUE Pee eet 4-037, 4-041 724292 7-138, $089; 8110,
(CIR ee eee 7-099 8-114, 8-195, A2-113,
(Q)micdeeee 4-031, 4-037, 4-042 A2-141, A4-025, A4-026
(GB) Rea eee. 4-037, 7-099 FE t00--K AAT? FAD, F115,
(A). aS ee 7-109 75116; F123, 7192, F142.
s.18 ... 2-031, 2-060, 4-027, 4-035, 8-173, A4-027
4-039, 5-064, 7-003, 7-095, ayes 1-017, 4-105, 4-107,
7-096, 7-097, 7-098, 7-099, 4-109, 4-125, 4-128, 5-040,
7-100, 7-102, 7-103, 7-104, 5-041, 7-112
7-106, 7-109, 7-110, 7-130, (6) ee 4-105, 4-137, 7-114
7-136, 7-137, 7-140, 7-153, ee 4-105, 4-132, 7-115
7-167, A4—023
(go 4040, 4-060, 5-042,
Cee nee 7-095 ao ay sey iVag 2sWe
Omen ee 4.025, 7-100, 7-143 8-104
Nee 3-045, 7-095, 7-107 (i) ..... 4-105, 4-157, 5041,
(VOTE A coat en bs ile 4.040 7-113, 7-117
Chee ane ame ae A4-028 (ii) .... 4-105, 4-131, 4-133,
Ce ee eee 7-108 4-150, 4-155, 6-061, 6-062,
Cea eee 7-109 P2115,7-122
5.19 ... 4-027, 7-104, 7-105, 7-114, Capone 2-060, 4051, 4-112,
A4-023 7-127
3.20 ... 2-060, 4-011, 4-147, 6-002,
A4-049 ii oyte eee 7-132, A4019
(DY ee Lesa dae ee 4-044, 6-057 (c Speen 4-055, 6-142, 7-131,
Ona) aomes aes 4.044 7-212, A2-113
COV 52112, 62085, 7157, CoN Geran ee ene ee velo?
7-170, 7-200 (Gt tae aetna te ie 7-142
Cee AS 6-057 8.25 ... 2-060, 4-040, 4-105, 4-158,
s.21... 1-016,2-060, 4-007, 4-009, 4-164, 7-142
4—036, 4-147, 4-165, 7-101, (nS eres ah eae ay 4-158
7-109 (OIE Sone eae eee A2-114
(On sed eat. 4-045, 4-150 (Vic Sect A055, 4-158. 7-133,
() ela ee 4-165 7-134, A2-113
(Oe ek ee leh | 4-150 (Aen tonne eee 4.055
(COU Ae eee Le 4.045 (Ghee. oeress 6-142, 7-212
ee a eae 6-059 (B)-.cpathan 1-011, 4-055, 4-158,
2. ee 4-147, 4-150, 4-165, 7-134, 7-135
5-112, 6-059, A2-112 (GV ate ee ee 7-142
i) aeeetee 4-149, 4-150, 4-151, Se26(1) sibs. 4-015, 4040, 4-158
7-101, 7-101 62 res ot Secseet 2-060, 4-161
 Table of Statutes Ixix

8.27 ... 2-060, 4-035, 4-047, 4-160, CE Rewonds Abc 7-160

7-103, 7-130, 8-173 (ede tas eed ae 7-157, 7-160
(eae 4-039, 4.040, 4.048, (4)ne 7-065, 7-161, A4—019
P2103) 72137 (Sy Ate Bite! 7-163
i) eee 4-016, 7-139 (ON be trerce sarees sate J=163 58159
(1 ahs a Oe 439 004, 1-005, 1-007, 1-017,
‘Ole 4-039, 7-103, 7-130, 028, 1-030, 1-039, 1-040,
7-137, 7-140 023, 4-073, 4-104, 4-106,
Att: SOG fe 7-137 107, 4-139, 4-155, 5-001,
8.28 ... 4-064, 4-069, 6-069, 6-070,
5—034, 5-037,
6-071, 6-145, 6-152, 7-110,
5-046, 5-053,
7-212, 7-214, 8-195, A2-141
054, 5-056, 5-095, 5-099,
eee 4-052, 4.054, 4.082 , 5 9-134, 5-136,
(eee 4.057, 4-064, 7-212, 3 5 176, 5-199,
7-214 200, 5-203, 5-206, 5-212,
Cutie 4-057, 4-059, 7-212, 215, 6-014, 6-062, 6-161,
7-214 (65, 72116. M7, 131.
Gje.th6.t 4-052, 4.059, 4.064, 134, 8-076, 8-077, 8-078,
7-212 081, 8-085, 8-086, 8-088,
s.29 ... 1-012, 4-069, 4-152, 4-153, A4031, A4-041
4-158, A2-113 Cine 4-068, 5-032, 5-035,
(ih en Pee ee 4-153 5-036, 5-037, 5-039, 5-040,
Cae eet eeeEN, 4-153 5-048, 5-050, 5-053, 5-055,
cree ae 4.055, 4-158 5-056, 5-062, 5-073, 5-089,
s.30 ... 2-012, 2-060, 4-069, 5-027, 5-094, 5-096, 5-097, 5-099
5—062, 5—064, 6-013, 7-025, 5-100, 5-207, 5-221, 6-011
7-029, 7-143, 7-144, 7-151,
Gioe. 4-003, 4-023, 4079,
7-160, 8-059
4-090, 4-105, 4-133, 5-032,
(ir. 0ele 4-071, 5-062, 5-070, 5-042, 5-044, 5-045, 5-049,
7-058, A3-005, A4029 5-049, 6-138, 7-112, 8-035,
OC ame cores 2-113, 5-063 A4-042
Koi ihe’, te Bey: 8-056 (oer 1-028, 4-058, 4-103,
(0) | aren aNreed A4029 4-105, 4-130, 4-131, 5-032,
SEBO! Dak nicieceone hes 7-059 5-045, 5-134, 5-163, 5-215,
SBE. AGE 1-034, 5-064, 7-143, 6-149, 7-122, A4-032
A4-029 (Dee 5-032, 5-035, A4-042
(hea ae Veg eee 5-066 5.34 ... 2-060, 4-068, 4069, 4-072,
2s ne es Ae 5-066 5-044, 5-054, A4-034
Ce eae ee (ne 5-066
(2 ee, ae 8-055 ip. ents 2-030, 2-060, 4068,
Oe fe 5-068, 6-013 4-072, 5-034, 5-055, 5-089,
Neen) 1seee 5-068 5-089, 5-090, 5-116, 5-133,
$32 ...1-034, 2-113, 5-027, 5-064, 5-169, 5-197,8-092, A4-033
(2) iseaters 4.072, 5-034, 5-097,
5-070, 7-058, 7-143, 7-144,
5-099, 5-117, 5-122, A4—033
7-151, 7-154, 7-155, 7-156,
FAST, F=N59., 7-160, 7-161, (Geert 2-103, 4-069, 4-073,
P1627 163. 72167, 02170) 5-073, 5-197, 5-215, A4—034
8-054, 8-059, 8-208, 8-210, (ON senocsoes 4-069, 4-074, 5-167,
A2-115A4-029 5-169, A4-038
hee eat 7-154, 7-158, 7-162 ()iica. 25: 4-069, 4-075, 5-121,
(2)0..2es 7-066, 7-156, 7-163, 5-127, 5-133, 5-138, A4—039,
8-054 A4—040
By deh. BR Aces 7-169 (dd) Sate: 4069, 4-076, 5-135,
(beer 7-156, 7-157, 8-204 A4—038
(iitted AE: 7159, 7172 (Ceres 4-069, 4-077, 5-141,
Gil oh, MELA MEAS 7-162 5-142
Ixx Table of Statutes

(Cm 4-069, 4-078, 5-054, CL BS cath 5-192

5-130,
7-167 (4). dhe. 4-090, 2-202, A4-044
(oy ees 2-030, 4-003,
4-068, CO) Drab cvinvccnndlD,, 2-203
4-069, 4-079, 4-139,
5-212, Ce re 4.091, 5-193
8-081 ‘CO eee 4091, 5-194
(ieee 2-030, 4.068, 4-069, 5; eae 4.091, 5-195
4-080, 5-042, 5-108, 5-196, 5.42... 1-029, 2-060, 4-091, 5-078,
5-197, A4—041 5-192, 7-179, 7-198, 7-199,
ee 4-081, 5-113, 6-002 7-200, 7-201, 7-208, 8-011
ee 2-060, 3-049, A3-005 (Ly. Bot cw, 7-198, 7-199
Gin ctee 3-015, 3-044, 3-047 (Oe 2h a Ba. 4-069, 7-200
(Cie Gee ae 3-048 Cat a ce 7-200
SG ul ete 1-024, 2-060, 5-199 CAVA on ie ol Be 7-193
is 2-060, 4-068, 4-069, 5-160, (Ch Redei scee., 7-193, 7-200
5-199, 5-209, 6-132, 7-059, Ca); sangeet eae ae 7-199
8-090 ae a 7-200
CD yeaa 5-160, 5-198, A4—045 (5) ee oh wink! 7-201, 8-156
(a) eaee ear eee c omar 4-082 s.43 ... 1-020, 1-021, 5-137, 5-158,
(Gh) seetee te Baeeceeesse cate 5-160 7-179, 7-191, 7-192, 7-202,
(Giles eee eae 5-160 7-203, 7-204, 7-205, 8-210,
(O) eee ee 4-082, A4—042 A4-047
(CARS coertere aeerert 4-082, 5-160 Ee ee 5-158, 7-203
(Si esnecncuncecasmpaicance 6-056, 6-074 Cn oe 5-158, 7-203
s.38 ... 2-060, 4-068, 5-075, 5-077, one 7-204
A4—030 3.44 ... 1-003, 1-020, 1-021, 2-060,
(Uipereht eos: 4-083, 5-075, 5-089, 4-084, 5-075, 5-078, 5-133,
6-021 5-137, 6-107, 7-006, 7-018,
(Qc eet 4-083, 5-157 TANGO, Foleo lee a 3:
(G)) eegraces 4-069, 4-084, 5-075 72185: 7-186, 7-186, 7-188,
5-076, 5-079, 7-104, 7-207, 7-189, 7-190, 7-191, 7-192,
A2-116, A2-121 7-193, 7-194, 7-195, 7-196,
Cnet 4-069, 4.085, 5-074, 7-201, 8-191, 8-210, A4+020,
5-075, 5-076, 5-081, 5-082, pat
5-166, 6-021 Cie ake 7-180,9-186; 7-188,
Greens 4.069, 4.086, 5-157 7-201, $48, ig’158
(Glin teats. 4087, 5-074, 5-075, (eee 1-020, 5-081, 5-083,
5-083, 5-166 7-180, 7-187,7-188, A4-020,
s.39 ... 2-059, 2-060, 4-068, 4-069, A4-047
5-075, 5-076, 5-077, 5-078, (CMe sae rene |=Ae 7-191
5-084, 5-085, 5-086, 5-088, 1) ae ere 7-203, 7-208
6-004, 6-010, 6-012. 6-019, KGW) scedaeac, Cane 7-193
6-020, 6-021, 6-023 (eae ee em FA193
Ge Geel ed eae 4093, 6-020 (eis 5-078, 7-018, 7-195,
(OR gest, 4-093, 5086, 6-021 7-197
Gyre, 4-093, 5-088, 6-023. Chee ee 5-075, 7-018, 7-180,
8-011 7-188, 7-192, 7-193, 8-195
(MNO) anne hot Se 4.093 CH) S: cevlants tei F187 9A187
A | eee ee ee 2-111, 4-104 (5) aes 5-075, 7-189, 7-190,
CD Lo tres cekeaes 4088, 5-191 7-192, A4020
Ge ae 4.088, 5-191 OMS ee eee. ee 7-190
s.41 ... 1-029, 2-060, 4-068, 4-069, ita 7-005, 7-094, 7-109,
5-078, 5-191, 5-192, 7-198 714272163, 92178, 9-201,
G)t 4-088, 5-192, A4—043 7-215, 8-116, 8-116, 8-156,
(Qe eeesanteartinets 4-088, 5-192 S257
G)e.. ees 1-030, 4-089, 5-224, 5.45... 1-048, 2-060, 2-063, 7-159,
5-225, 5-230, A4—043, A4—053 7-164, 7-165, 7-166, 7-167,
 Table of Statutes Ixxi

7-168, 7-169, 7-170, 7-172, ee | 6-118

7-174, 7-175, 7-176, 7-177, C3) (5) le nce eee ee 6-116
7-178, 8-205, 8-210, A2—115, Ge cee 4-095, 6-101, 6-117,
A2-142 612062121 6=128
(isso ie 2-063, 7-165, 7-166 (5) i ee eeeee 6-119
7-166, 7-167, 7-168, 8-133 (GG) es 4-095, 6-116, 6-127
(CA en We, 7-178 8.50 ... 2-060, 6-063, 7-067, 7-082,
(GAEL td 4 yes 7-169 7-083, 7-084, 7-087, 7-091,
(beta, 7-170, 8-204, 8-205 7-094
ve ae (el emilee. CL) a ee eer ety nce 7-082
halk AaAsk.. 5m 7-171 (2) A SE 7-083, 7-085
(G)a RIE, 2e80?., 7-167, 7-170 ((3)) coerce ected ee 7-084
(Dit shh, colle, BD. 7-175 (ah hetaenteae
teweet Rare 7-081, 7-086
(SS RAR a TTS (DR NT ee aoerosea dot es 7-094
(6). alee P2176, PATS 8 5159 s.51 ... 2-060, 4-166, 6-024, 6-025,
s.46... 1-017, 2-028, 2-029, 2-060, 6—027, 6-080, 8-003, 8-098,
2-094, 4-105, 5-057, 6-105, A4050
A4-048 due, Aol 4-096, 5-223, 6-024,
(tet 2-087, 2-090, 2-091, 6-025
4-139, 4-141, 5-057 )ik. Maes 4-069, 4.096, 4-167,
(by. sum. 4-002, 4-143, 5-057, 5-223, 6-024, 8-219
6-112. A3—-005, A4-048, (QA A AT betel pesacst: 6-024
A117 Cee 6-026
Dis e Maiaraes.. 2-090, 4-141 (i: Bil, eae NAS 6-026
(Seed hd hall... 1-036 i Wiles cso 6-026, A4-050
(.athbok.. 2-090, 2-092, 4-141 5.52 ... 2-060, 6-026, 6-044, 8-098,
ADS ON Bec tlc Se 5-077 A4-051
s.47 ... 1-015, 2-060, 4-069, 5088, OW MO A cee DS. 6-025
5-129, 6-003, 6-009, 6-011, Cee 6-047, 6-049, 6-058,
6-018, 6-023, 7-081, 8-097 A4051
CU rabredlgd 4-092, 6-009, 6-061 (BEG) ic navancannntin thes. 6-044
yo ee 4-092, 6-009 (Dy ingodee. 4-097, 6-026, 6029,
CPE 6-012 6-033, 6-034, 6-051, A4-051
G\c oe ons, 4-092, 6-010 (Nee 5-072, 6-045, 6-052,
3.48 ... 2-060, 5-077, 6-096, 6-097, 6-053, A4051
6-105, 6-106, 6-107, 6-111, Se ee 6-026
6-113, 6-116, 8-018 s.53 ... 2-060, 5-072, 6-050, 6-052,
MGA 4-094, 6-021, 6-097, 8-191, A4—051
6-112 SAR TAA. 2-060, 4-069, 6-053
Onset 4.094 (SS eee ee 4.098, 6-172
Gyr. 208. 4-069, 4.094, 6-109 ON, hates 6-053, 6-065, 6-173
Gere Aa Sees 6-097 ee. 2-060, 6-064, 6-064
(Rated 4-069, 4-094, 6-098, ee ae ee 4-099, 6-068
6-101, 8-090 (ON Snes. 4-099, 6-064, 6-065,
(5)2. Re. Se. 4-094, 7-186 6-067, 6-068, 6-069, 6-070
Cid. 4-069, 5-077, 6-107 (SNEGE A eked, eke 6-064
ib RienA BO 6-108 5.56 ...4-069, 6-064, 6-070, 7-214,
Oe 2-078, 2-079, 4069, 7-215, 8-195, A2-141
6-114 (Da eehee. 4-063, 6-067, 6-069,
3.49...2-060, 4-069, 4-095, 6-100, 7218
6-115, 6-116, 6-123, 6-127, Oke 4-064, 6-069, 6-071,
6-128, 8-018 72016
(it See oe, me 4.095
0 6 ae ie ee Ae 4-095
ae oe 4095, 6-117, 6-119,
6-120, 6-121, 6-122
Ixxii Table of Statutes

(Cee 4-064, 6-071, 7-213, s.64 ... 2-060, 6-141, 6-142, 7-177
7-214 (ated 6-142, 7-209, 7-212,
Gils dia cle BE 4-064 7-212
(MSE olate 4-064, 7-214 (2) eee 6-142, 6-152, 7-212,
eh ee eee tie - 7-215 7-214
Ca eee 6-069, 7-212
s.57 ... 2-060, 5-219, 6-173, 6-174,
6-175, 7-084, 7-091, 8-005,
8-012, 8-064, 8-109, 8-122, (A. eee 6-142, 6-145, 6-152,
8-170, 8-172, A4—052, 7-212
A4055, A4—056, A2-118 s.65 ... 2-060, 4-068, 4-069, 4-131,
(Chae cent | 4-100 5-035, 5-160, 6-002, 6-147,
OY oe ek tenis ot ae 4-100 6-149
Gee: 4-100, 6-166, 6-172, hte eee 4-103, 6-147, 6-148,
6-173, 6-174, 8-109, A4-051 6-149
(a). 4-069, 6-006, 6-061, 0) ae Lt a 6-147
6-126, 6-166, 6-167, 6-168, s.66 ... 1-003, 1-015, 1-020, 1-021,
6-170, 6-171, 6-175, 8-098, 2-008, 5-064, 6-008, 6-026,
8-128 7-143, 8-001, 8-002, 8-003,
(bead 4-069, 6-006, 6-036, 8-004, 8-005, 8-010, 8-011,
6-036, 6-061, 6-126, 6-166, 8-012, 8-013, 8-014 , 8-016,
6-171, 6-171, 6-177, 8-167, 8-019, 8-023, 8-023, 8-033,
A2-118 8-047, 8-050, 8-178, 8-219,
(Ni cctoattee ceesaancede 6-061, 6-173 A2-109, A2-119, A4—061
(Gere en ano 6-061, 6-173 ‘eee 8-002, 8-003, 8-004,
(CB aes wader 98 ada er etionee 6-167 8-006, 8-008, 8-050
S25Oe eee 2-008, 2-060, 6-008 (phe tie 8-002, 8-007, 8-008,
(IR Renaeee 6-004, 6-008, 6-018, 8-050
6-162, 6-183, 8-002, 8-014, (ay. te. 5-064, 5-067, 7-143,
8018 8-004, 8-010
(2) ee eee 6-162, 8-002 (aOR 5a ALES. 6-006
SO), nee Lee oa eRe 6-129) 6=13)1 (Ayia 8-002, 8-012, 8-015,
(CL ee te tec: 6-130 8-023, A2-119
(PAY te: be doen Aes as Se 6-130 ee ee 8-010
CSODEOS coaster
eri rmsteecene 6-026 s.67 ... 1-015, 1-034, 2-012, 4-071,
SOO bees eee le cuenta 6-134, 7-209 4-105, 5—062, 5—064, 5-065,
S1Ollion cat ates. 2-060, 6-134, 6-141 5—067, 5-068, 5-069, 5-120,
(Ces seeeer eer 4-069, 6-133, 6-146 6-002, 6-030, 6-066, 6-175,
(ere 6-133, 6-137, 6-138 7-033, 7-059, 7-142, 7-148,
SID coe Ma resonant: 2-060, 6-135 7-151, 7-152, 7-154, 7-156,
s.63 ... 2-060, 6-141, 7-177, 7-209, 7-160, 7-167, 8-004, 8-037,
7-210, 7-212 8-051, 8-052, 8-053, 8-054,
OD) e onsee 4-102, 6-131, 6-152, 8-055, 8-056, 8-057, 8-059,
6-153, 7-209 8—060, 8-061, 8-062, 8-063,
(Dees eee 4-069, 4-102, 6-141, 8-064, 8-065, 8-066, 8-067,
6-150, 6-152, 6-156, 7-209 8-069, 8-071, 8-076, 8-079,
(Devs Heee.. 6-157, 8-136 8-089, 8-115, 8-119, 8-150,
(QeAiaes 4-102, 5-080, 6-069, 8-165, 8-167, 8-175, 8-176,
6-130, 6-141, 6-142, 6-153, 8-194, 8-206, 8-208, 8-210,
6-155, 7-209, 7-210, 7-212 8-213, 8-215, A2-121,
(ES: ets RE. 7-210 A4—058, A4—059
(O\e eee 6-131, 6-144, 6-154 ek eee 4-034, 4-135, 8-054,
(GI ee eee 6-143), 7-211 8-065
(O) tea 6-143, 7-211 (Oar tend eta 7-065, 8-066
(CA ete eee nett 6-145, 7-212 (6). ORS 8-067, 8-068, 8-162,
5503 ==0512 ae coat roam citttees 7-003 8-165
 Table ofStatutes Ixxili

(ee ye et, ee 8-164 (CC) ERRGS roseaee 8-165

LS EN 8-071, 8-115 RE cs 7-201, 8-071, 8-115,
88.6769 esses. 8-004, 8-051, 8-058 8-118, 8-159
s.68 ... 1-015, 1-051, 4-058, 4-104, s.69 ... 1-015, 1-036, 1-048, 2-008,
4-105, 4-111, 4-119, 5-036, 2-029, 2-031, 2-060, 2-063,
5-037, 5-042, 5-053, 5-094, 5-042, 6-002, 6-008, 6-032,
5-200, 5-222, 6-002, 6-008, 6-054, 6-061, 6-106, 6-139,
6-031, 6-054, 6-060, 6-061, 6-140, 6-175, 7-151, 7-164,
6-066, 6-072, 6-091, 6-138, 7-201, 8-051, 8-052, 8-053,
6-139, 6-140, 6-166, 6-175, 8-057, 8-063, 8-069, 8-089,
6-177, 7-056, 7-084, 7-112, 8-090, 8-094, 8-114, 8-117,
PeU25t 7-129, 72151, Ta167s 8-119. 8-120. $1191, 82199)
7-201, 8-036, 8-051, 8-052, $2126, 82127, 8-131, 8-145)
8-053, 8-057, 8-060, 8-063, 82149. 82150, 8-158, 8167,
8-069, 8-071, 8-072, 8-073, 8-176, 8-205, 8-206, 8-209,
8-074, 8-076, 8-080, 8-081, 8-210, A4-059, A2-115,
8-085, 8-086, 8-088, 8-089, A2-120, A2-121, A2-142
8-095, 8-096, 8-101, 8-103, Ei me a) 2-063, 6-034, 6-066,
8-104, 8-105, 8-109, 8-110, 6-140, 7-167, 8-121, 8-124,
2111, 8-13, S1t4. 8-185, 8-129
8-116, 8-119, 8-149, 8-150, (2 One, 8.17759-103, 6182
8-157, 8-165, 8-167, 8-168, ee er eee 8-131
$170, 817546176; 8-205, Gai. 1-050, 8-119, 8-126,
8-206, 8-208, 8-210, 8-214, 8-131, 8-132, 8-152, 8-160
A2-120, A2-121, A4-057, Cr eae eee 8-133
A4-059
tee me 7-113 82072, 8-108, iy Beas «eee 8-141
8-109, 8-110, 8-172 Nh el ae 8-145
OX eee 4-155, 5-037, 5-048, (AVote) Med lih le, 8-124, 8-147
6-030, 6-032, 6-083, 7-084, (Ci) ee 7-168, 7-168
8-072, 8-072, 8-076, 8-163, (YOR, cccsnesszest Dy. 6-081
8-169 Gheakitlet 8-147, 8-149, 8-15]
(@) reser 5-037, 5-053, 5-109, (G)ncareccoyveie
he NE 8-155
5-163, 5-212, 6-017, 7-112, TY. Alte. 6128/2153, RE1S4
7-117, 8-078, 8-081, 8-088 8-162, 8-164, A4-052
(D)isecense 4-105, 4-136, 7-117, (Qe 5-219, 6-006, 8-163,
8-076, 8-089, 8-090 A4-058
(Qiase 4-105, 4-133, 5-090,
7-117, 8-092 (8 \corce: 80 P2014 88 8-155.
(CU este 4-105, 4-133, 6-017, 8-156, 8-159
6-030, 6-032, 6-079, 6-081, stTO Me 8.122 8-131 ~A2= 101
6-126, 6-175, 8-093, 8-126 Giese ieee 7-148
(C) erecseae ease 8-076, 8-091 Oi ae 6-175, 7-059, 7-060,
(PSR. 4-105, 4-134, 6-010, 7-151, 8-009, 8-109, 8-122
6-089, 6-175, 8-076, 8-098 (id decentMee 8-064
(a) eeeerce 1-040, 4-105, 4-134, ie 8-064, 8-109
5-040, 8-044, 8-099, 8-112, (Q\eiaias 5-068, 6-053, 6-064,
8-168, 8-214 6-066, 6-070, 6-164, 6-173,
(hn) essere 4-105, 4-134, 6-010, 7-089, 7-092, 7-148, 7-152,
6-029, 6-045, 8-076, 8-098 8-053, 8-063, 8-108, 8-123,
(ChE erencre 6-169, 8-103, 8-169, 8-204, 8-211, A2-125, A4-057
8-171 (Aya Dies 5-220, 6-003, 6-029,
(Si) inseacses ees 8-068, 8-113, 8-162, 6-031, 6-031, 6-034, 7-113,
8-164, 8-169, 8-173, A4-052 8-070, 8-095, 8-098, 8-113,
(CN ecectre 5-219, 6-166, 8-163, 8-130, 8-130, 8-144, A4-052
A4056, A4-058 (i rethuecnimincdttss 8-126
Ixxiv Table of Statutes

Occ 6-031, 8-070, 8-114, CE eS ery 7-093

8-130 (OVA) acta IN. 7-091
aren 7-207, 8-069, 8-113, (DAI cinesaca ABB DS 7-091
8-153, 8-162, 8-206, 8-207, (4p AB <5, BID A AME 7-091
A2-121 ra eee eee 7-091
(etd 8-062, 8-069, 8-113, 16) WOE TPR senscrcxe 7-094
$153; 8-162, $=208 SHO) dh MES 8-034, A2-126
(BYE. Aiea 8-116, 8-161 iS). 6-070, 7-067, 7-089,
71) REM ect MEE ss. cas 8-176 7-092, A2-125
Caen tw totae eee 8-176 oe ee 5-039, A2-127
(B)0. sine LA 6-061, 8-176 Gh pee 1-007, 1-036, 2-106,
(Cymioe ataee 8-176, A3-006 6-024, 8-167, 8-175
s.72 ... 5-064, 7-043, 7-059, 7-060, (5) ake RAD 2-015, 2-039
7-143, 7-146, 7-147, 7-148, $802.23 7-039, A4-010, A2-116,
7-149, 7-150, 7-151, 7-152, A2-128
7-153, 8-053 (1)2..090.2 1-016, 2-002, 5-003,
eee ae 5-067, 7-146, 7-148,
7-151, 7-153 7-110, 7-111, 7-154, 7-180,
Gilt le oo 7-061 8-004, 8-051, 8-054, 8-056,
(Qe ee 8-053, 8-055, 8-065 8-124, A4-015
OC 5-067, 7-148 (2)O Mele 3-016, 3-018, 3-022,
CO eet ona. 1 eee 8-072 7-198
s.73 ... 2-004, 2-016, 2-073, 4-034, SS/S2383t Ree A Re A2-128
4-114, 4-119, 5-020, 5-036, S83. RR Ae. .22 8. A2—128
5-066, 5-067, 5-111, 5-121, SSA hk Ee Sas eos.) A2—-117
7-059, 7-060, 7-113, 7-127, (LR ae A2-144
7-127, 7-162, 8-004, 8-028, (2) et. Paton ee et hes 4 A2-144
8-055, 8-061, 8-065, 8-088, GoM TN occu. 2-005, A2—130
8-110, 8-111, 8-217, A4012, GQ)R 228 hk ieee. 1-045, 7-023
A4-026 SUC5=0 Deere 1-001, 1-002, 1-005,
(eee 5-040, 5-065, 5-068, 7-023, A2—129, A4-005,
7-127, 7-162, 8-065, 8-110 A018
Gries peee eaten Cae 4017 01 ac At a ee ee 1-046, 2-005
(ecw 4-016, 7-113, 7-114 (()| ERS Se ee 1-046
ON Bo ccc itoan es 5-065 Se Re Tike k. 2-005, 2-063
siah cl. at. 4-049, 4-152, A2-122 (l(b RE oo net: 7-166, 8=121
(Gi ee ehee 3-053 SOOT BE te TORY A2—131
Oe neta, 3-053 S89 tetas. 2 tala 2-084
CN UY | eee ae ee 3-053 (Ch once ee eee ed 2-084
UES COED, CRON 8-018 ss.89-9] 1-002, 2-084, A2-131,
M(t ecto 2-060, 5021, 5-031, A2=132
A2-123, A4O11 S00 Boe eR Rie cs, 2-084
IR AG | tpcite, all 5-028 SO oR seem tee Beek 4 2-084, 7-069
ee Pee ae 5-029 S92) de 1-002, 1-003, +022
CR One ee 5-030 S03 ae ee 1-002, 1-003, A2—133
(Se ee Aae 5-031 (LR es. 4019
OPT, ogee ey A2-124 (CO) Ree PA Detc, 4020
£77 va 2-060, 5-031, A2-124 (Soh. SE ee ee. 4-021
(OY Maen Oi, Sean 5-031 (Rea. See oe. 4019
CB) EAM DPM iciace 5-031 KO). RRA SE 4-019, 7-088
Ey i feel aestae 2-060, 5-005, 5-114 SOS(GD: OSt ot... eae. A3—004
s.79 ... 2-060, 6-070, 6-172, 7-067, (CAR we x. ae, ek A3-007
7-084, 7-089, 7-090, 7-091, (6). SAR icone eee. A3—004
7-092, 7-094, A2-124, ss.94-98 .. 1-002, A3-002, A2-134
A3-006, A4-037 SOS (Ch) O85 48 eee ee A3—004
at eeemeee me eee A2-125
 Table of Statutes Ixxv

SCAU hole patta BaMiaceenne eas. :A3—004 Ssl06... 8h we 3-035

SO One ea trina ree eee A3-007 SalLO7 (1) 2... geeeeeearceeetenes 3-028
(OQ) ikearenescottee A3-005, A2—134 (2) ree he 1-044, 2-083, 4-077
(Sileceeleneee aes nano as PesA3-005 SOS) eines Aone en 1-003
(Ba igerssscrste eee oa ok ccs A3—005 US ae
ae OSS ee ae ee! 2-073
SOF eee eee A3—-006, A3—007 Oy EARL et tee ee. 2-063
(Gy Nisecasenc toe eee A3-006 Sclislmeen aera 1-004, 2-012, 2-103,
(ib) ozs eeaeten iachaaesstee eee A3-006 4-069, 5-032, 5-039, 5-055,
(Cig taenterenan earn odes A3-006 5—089, 7-024, 7-068, 7-082,
SOS CL) mpeeaete. See. A3—006 7-090, 7-138, 7-154, 7-186,
s.99 ... 1-044, 1-046, 6-041, 8-020, 7-199, 7-203, 8-054, 8-072,
8-047 A014
$5 90S ATs ne eee ee 1-002 Scheaparae2 (se cee 4-019
Sal OUR eertemn re, .com cement sceors 2-095 Paras (1h)ise faeces wees cs. 7-089
(AR a separach 5-072, 6-037, 6-040, SGheguews ss.) 3-028, 7-039, 8-048
6-052, 8-021, A4—060 DARA screen seitoossn Rene eS 8049
(2) er ates 2 eA 15 PatiardOke c.ceemteccn sce A3—023
(CAD) aA Na eae INE 8-020 PALGetec.. aan eee OS OG,
SSDS) paspesonnoneces 8-021, 8-047 Housing Grants, Construc-
Sil OI pnsseraenee 8-012, 8-023, 8-050, tion and Regeneration
8-219, A4-060, A2—136 Act (@53\aue 2-041, 7-198
(Ceres S021 8-023, 8-041. CHILL” SePeevey ener epeeok 2-032
8-047 EOS ee tercce tee 2-032
(CAN ateeaponoee 8-012, 8-023, 8-178, Slee ye hoe ore eee 2-040
A2-136 SSW Mtiertacancs Aen int 2-032
(iat tase keNonna 8-023, 8-023 Ce cetareat Mead 5-003
ss.101—103 .... 8-022, 8-023, 8-028 Cr ae eye 2-033
OW Ee Bp scedae 8-003, 8-024, 8-219, 1998 Employment Rights (Dis-
A2-137, A4—060 pute Resolution) Act
SAO Speer: 8-022, 8-023, 8-024, (c.8)
8-028, 8-037, 8-047, A4—062 Holmen tenn a cnacecccetebsascrconoccs 7-039
(CR GER 3 eR ee 8—028 Human Rights Act (c.42) ... 1-038,
(2) ees. 1-046, 8-016, 8-023, 1-051, 4-128, 8-121,
8-028, 8-029 8-152, A3-001
(eRe casa menrcee coumarins 8-030 S03 CL) asco nateet neat eens 1-038
(LON) Soccssee 2-094, 5-072, 6-052, Sela lLTRE Ww BICRG) soreeenonoancect 7-046
8-028, 8-031 1999 Access to Justice Act (¢.22)
(ON een, 5—042, 5-049, 8-034 SUPE] (Ul erence emaan este pean 6-131
(al) eeotet atentan Aig ntesianmeeerce, 8-037 Contracts (Rights of Third
() crcedsne 5-072, 6-052, 8-038, [PEvABeS)) NEE (ESD) seance 3-014
8-056 Lee sc meme rcccce ea kcr: 3-014
(eee 5-072, 6-052, 8-040 SE ent Snecent on vader acon sadaces noe: 3-014
(SN hlebaorprsc 1—040, 8-029, 8-043, (1) pies Sea | Ta ae ate 3-014
8—044, 8-101, A4-062 OD) Bete ec nucconaen Hana Re eeE Ee 3-014
Ciel Rae ed Ae eect crear 8-037 2000 Financial Services and Mar-
(G)iccerenees 8-009, 8-041, 8-042, KetswActn (G28) mesa reese A3-017
8046, A4-063 Mem. OA UESiesons poahtetch eeprroe eerA3-017
Sal OAM reorer sce ccse: 8-023, A2—138 ISO)nlcI WI Ass pectamcbat ecscucncmeensaa! A3—017
SULO Sie aa 1-002, 8-023, A2—128, Limited Liability Partner-
A2—136, A2—139 ships Act (c.12)
(LAS. 7-109, 7-142, 7-163, S12 WRN ccc tecseasons 3-009
7-179, 7-201, 7-215, 8-006, (Bea eR tee: cresannonss 3-009
8-023, 8-115, 8-156 (Gieaberrcee ences etek 3-009
(2) Ae aaah nem etue ness 7-009 Utilities Act (c.27) .............A3—045
(OM ierpuct noes aatee se sectee ants 7-009 Trustee Act (c.29)
SSuO SUL) cauensees sonemeenrenre 1-002 pM@D Pee be a ance rene nCnneee 3-027
Ixxvi Table of Statutes

20028 Entenprises\cti(¢40) au 3-030 Bermuda

2003 Communications Act
(CPA) ianneereceecm rea bonees A3—036 (Compeamics ACh... eee: 8-080
SD TEN(O) eacscsscesees cee ae A3—-037
VWWaliorae Ac hil(G2307) eeseeseeraenres A3—033 New Zealand
S250 eee eM y Ann Se A3-033
1996 Arbitration Act
2005 Mental Capacity Act (c.9) .. 3-004,
Sc hte<cets2o ie OY od a 5-183
3-006

United States of America

Belize
Federal Arbitration Act 1-035
Settlement of Disputes in Racketeer Influences and
Essential Services Act Corrupt Organisations
(Cape 98) eee eee A3-019 (RIGCOWACty cee e 1-035
 TABLE OF STATUTORY INSTRUMENTS

References in bold indicate where legislation is reproduced in full

1965 Rules of the Supreme Court 1996 Rules of the Supreme Court
SLES SAMA). conosco A2-094 (Amendment) Order
OTLINS ikl er scakecemes-cratie Abbct 3-020 (GSO 96/2392 eee 8-181
(Oper IES) ST! (CB) car sczeconodiaaacte 3-019 Arbitration Act 1996 (Com-
Ondie23 trerrerantatedck Han ae. A2-094 mencement No.1)
Oxde22 ire! (1) (a) peer A2-094 Order (SI 1996/
OLE Aen tee 5-132 3146) .... 1-001, 2-005, 7-023,
Ord.73 ... 8-181, A2-108, A2-140, A2-108, A2-140
A2-142, A2-143 Sch para) cuca eA 2144
Ord.73 Pt 1 mt A2-140, (4) Sesceennttee
seated ecm ee!A2-144
A2-141,
(ORR ec eo oeA2—144
A2-142, A2-143
KC) terson Beceem ca tae A2—144
Ord.73 Pt Il ...... A2-140, A2-142, Dalia aaa eee meA2—144
A2-143 Unfair Arbitration Agree-
Om Pull a. A2-140 ments (Specified
CeO eacs,) ee aac A2-143 Amount) Order
Ord Ts CA) soneeeee sce A2-142 (CoE WOO YANID), see cssanee Al-117
eo ) eee A2-142 High Court and County
Ong SS) cnr A2-142 Courts (Allocation of
Ons 5G) ck ee A2-142 Arbitration Proceed-
Ord 73.4056). ee A2-142 ings) Order
GIO) eo A2-142 (STI996732115)) eer 7-009,
On) 2 Le A2-142 8-178, 8-188, Al—116,
Ordi78 2 TOY cers el A2-141 A2-142
OrdTE TOL te essseons suc:A2-141
Ordi73 1100) ences: A2-141
ORES ISD) acne ccc A2-142
OPS ON onsite A2-142 art.5(4)
1967 (ST 1967 159) coe estnecensh 8-048 1998 Scheme for Construction
(Sly 1967 40 scene eo 8-048 Contracts (England
1989 Dairy Produce Quotas Reg- and Wales) Regulations
ulations (SI9 937649 imeacees 7-198
KSIR1939//380) ieee A3-010 1999 Unfair Terms in Consumer
1991 Coal Mining Subsidence Contracts Regulations
(Arbitration Schemes) (SI 1999/2083) 2-084
Regulations [ReposSl Set RRSaGN RRS BUC eee & br of 2-084
(SIMO 91/2560) ieee A3—026 1 es9¢0\U2) eee esage rec ReRRCee SER 2-084
1993 Dairy Produce Quotas Reg- 2001 Civil Jurisdiction and Judg-
ulations ments Order
CS191.998/ 923) ere iees seal A3-010 (SI2.000/723929) rete 7-012,
1994 Unfair Terms in Consumer 7-024
Contracts Regulations Civil Procedure (Amend-
(ST 199473159) ieee. 2-084, ment No.5) Rules
A2-081, A2—132 (SI 2001/4015) .......... 7-009
 TABLE OF Civit PROCEDURE RULES

References in bold indicate where legislation 1s reproduced in full

1998 Civil Procedure Rules PSAGSt Seas. Seek ek ee 7-191

(SI 1998/3132) vse... 5-033, TA OE eset tee: Reece 7-191
7-009, 7-092, 7-180, P03 Girt aac an tee oes 6-160
8-207 PB OWL, ea senncuseteee Noe Oe 6-158
Pte a..cteeee 8-189, 8-190 13 OMA (3)) eee eee ae ee 6-159
PON) ake eatl:.... 7-092 1 he Ancona eee Bee ant Roe ee 8-205
[i eee a eee Cs) 8-188 (ee USI eee ense eccrseeeose 6-167, 6-169
et 8-189, 8-190, 8-196 Les UPA epeetsccee ase acento een 6-110
FO Oe at icscin AAS 7-012, 7-024 Jl Oka eee ee eer Tee 6-129
Say) or enna f8 et gn98 PES StOl = 0.55 <ueraaey itn aenrs 6-153
ETO 242629) sortsconesecd 8-182, 8-193 TPARS 2eo tS)TEND) ea scoogseccadeue 6-153
BE ene tel 8-049, 8-190 Tae) a Soe eee ae ger EE 7-177
Pelco. jcxtauene, Henne 7-042 (Do a Bar cae anbsosaapabscoste 6-143, 6-154
PORIG A, deattea teks. Ante 8-027 (CA eceecerea snes eccemraresoaaee 8-209
Pit Gettin 6 5-141 LPLa alhesicher OeReeeRa eee SSO 7-211
Beblee ts. Anh 1-030 (Lee, Oi res RAB See eM Ne 7-211
019.4. ACN AOREE TAN 3-019 Tee ie) TAD) ZIM re Sorc operon 7-077
POM OR eae A Ral. 6-169 Re Soa 4-020, 7-009, 8-182
Pe 208 Pal AL Aeelsascs:. 7-053 tro 8eP ID cccneceere eee 8-182
Oe i at 5-141 1 RIO gree aes nce sscosece 7-009, 8-182
Pt 24 . 1-030, 2-034, 2-037, 6-012 Eitri BD cc eee eee 8-182
GAD ALIS COREL BON 1-030 TPAD QU) seessscoccce 4-021, 7-009, 8-182
POs ee el Bichon: 5-080, 7-195 Be OU RID A eee 4-021, 8-182
Plena ee 7-193 OZ, eeeercease: 1-001, 1-042, 1-063,
(OC eee 7-195, 7-196 4-064, 7-009, 7-077, 8-002,
(ieee Dee eae Set 4.089 8-072, 8-181, 8-193, 8-195,
Pig RO wien orca ee 7-195 8-201, 8-205, 8-210,
alin CenIc. 2-035 Al-126-A1-147
De earetsrnecsen eee aaA3-049 Pt 62 Pt I ..... 7-009, 8-181, 8-221
Pepdusene) ol plat 8-188 Pt 62 Pt ID oecececccsne 7-009, 8-181
Poss. 5-131, 5-132, 7-204 Pt 62 PrIll .... 7-009, 8-016, 8-221
POR RAB LINE bitte cc, 5-131 tM Ao Ca 7-009
PALO RO RON Fey 5-131 RODMUAY Soca I oes 8-188
Sieh). ie EEL Yad 5-131 6d: AO een & 7-190, 8-195
Modul ore), eel CUCUNE meneJee. 8-183
Pol? A Oe ee... 5-139 Cir ORO. 8-184
[a Oe We wes 7-191 OMe eee 8-184
SIE cconichectelen he 5-142 Chugachee 8-184
Pys4l Lon meciimt. ba: 7-202 Clint eee 8-184
aceWe | aes | 7-202 (nua aan 8-184, 8-195
(oA ON Mee... 7-204 Onur 8-183, 8-184, 8-195
fot Ait ee tel: 7-205 @) ard at eel. dela, 8-190
BASEL. cxlubeauihs duit 7-205 ROD SUG EMR cous 8-191
$OAIG) Erie... ene. 7-205 (ie (RETR NRROL TAN... 8-191
(Dred IATA HAL. 7-205
 Table of Civil Procedure Rules Ixxix

Of eee 8-192 Cie 8-050, 8-225

eae 8-182, 8-193 CAO De ee 8-225
EGO oe ea. 8-195 Ca emit etic 8-049, 8-225
@)ee aA 8-196 Clee aes 8-049
oie. bhp ie ee ane
mi secre cae deans cae :ve ee Pt 62 PD (Arbitration ) ..... 1-042,
ae are 1-054, 1-063, 7-009, 7-154,
Se ree a 8-002, 8-072, 8-181, 8-183.
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(2 ete te 8-063, , 8-212

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7-045
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 CHAPTER 1

INTRODUCTION

1. ARBITRATION LAw.......... 1-001 7. Marrers REFERRED AND

REFERABLE TO ARBITRA-
2. ARBITRATION AND ITS goed 1-03 3
¥ DION ss eae ewe Ress
BEAToREs Mh 3) ee 1-005 ig
8. THe Sources or Arpit-
3. THe ArBITRAL “ d
HE ARBITRAL TRIBUNAL 1-016 RATION UAW 35 5.--.49-2:e07e<e 1-042
4. Tue ROLE oF THE ENG-
9. DEVELOPMENTS IN ARBIT-
Fo) 3i 0 4) tal Baeor 1-019 Se a edn Moe 1-043
5. THe ADVANTAGES OF . .
10. SUMMARY OF FOLLOWING
ARBITRATION .........00000005 1-022
Gitta Te See 1-055
6. THE DISADVANTAGES OF
ARBITRATION ...........000000 1-028

1. ARBITRATION Law

Modern law. A comprehensive review of the law and practice of arbitration! 1-001
culminated in the Arbitration Act 1996 and new rules? made under that Act.
Although not a complete code of arbitration law,’ the Arbitration Act 1996 does
contain a coherent and modern framework. Except for ss.85—87,* the Act has been
in force since January 31, 1997.° Since that date, much has been done to fill out

' This review was undertaken by a committee set up by the Department of Industry, and under the
chairmanship of successive distinguished judges that committee produced a succession of reports
(the DAC reports) which explain the background and reasoning for modernising the English law of
arbitration: see para.1—053.
2 The rules consist of Pt 62 of the Civil Procedural Rules 2002 (‘““CPR’’), referred to in this book as
“CPR 62” as developed by a Practice Direction: see paras 7-009 and 8-181 et seq.
3 The last attempt to enact a code ofarbitration failed before the Common Law Procedure Act, 1854.
A general arbitration act was urged by Francis Russell, the first author of Russell on Arbitration in
his letter to the then Lord Chancellor, Lord Brougham and Vaux dated October 20, 1853 published
in (1997) 13 Arbitration Int. 3 at 253.
+Tt has been decided not to bring these sections into force, see para.2-005.
>See Arbitration Act 1996 (Commencement No.1) Order (SI 1996/3146) dated December 16,
1996.
 2 Introduction

the framework. That work, which is discussed in this book, includes hundreds of
decisions by the courts.

1-002 Content of Arbitration Act 1996. Part 1 of the Act contains the principal
provisions relating to arbitration pursuant to a written arbitration agreement.°
The provisions of Pt II which are in force’ are those relating to consumer
arbitration agreements,*° statutory arbitrations,'° and the provision for the excep-
tional appointment of a judge as arbitrator.'' Part III contains provisions for the
recognition and enforcement of certain foreign awards,'* and Pt IV contains some
general provisions.'*

1-003 Scope of the Arbitration Act 1996. The scope of the application of the
provisions of Pt 1 of the Act is stated in s.2(1) to apply where the seat of the
arbitration is in England and Wales'* or Northern Ireland.'* Conversely, except as
stated below, the provisions of Pt 1 of the Act do not apply if the seat of the
arbitration is elsewhere.
The expression “the seat of the arbitration” is defined in s.3 of the Act to mean
the juridical seat of the arbitration designated

® by the parties to the arbitration agreement, or

® by any arbitral or other institution or person vested by the parties with

powers in that regard, or

@ by the arbitral tribunal if so authorised by the parties.

or determined in the absence of any such designation, having regard to the parties’
agreement and all the relevant circumstances.'°
When the seat of the arbitration is in England,'’ Pt 1 of the Act will apply
irrespective of the proper law,'* and even if the arbitration is conducted abroad.!°
Even if the seat of the arbitration is abroad or no seat has been designated or

° As defined in s.6 of the Arbitration Act 1996. The requirement for writing is contained in s.5(1) of
the Arbitration Act 1996.
’ As mentioned, ss.85—87 of the Arbitration Act 1996 relating to domestic arbitration has not been
brought into force.
*” Sections 89-91 of the Arbitration Act, 1996—see para.2-084.
' Sections 94-98 of the Arbitration Act, 1996—see Appendix 3.
'! Section 93 of the Arbitration Act, 1996—see para.4—019.
' Sections 99-104 of the Arbitration Act, 1996—see Ch.8.
' Sections 105-110 of the Arbitration Act, 1996—s.105 defines the court—see para.7—008.
'’ England and Wales constitute a single legal system. Scotland has a different arbitration law.
'* Section 108(2) provides that ss.92 and 93 of the Act do not apply to Northern Ireland.
'© Section 3 of the Arbitration Act 1996—see also Ch.2 for a discussion about the seat of the arbi-
tration.
'” To avoid frequent repetition of the phrase “England and Wales or Northern Ireland”’, the authors
have taken the liberty of using the abbreviation “England”.
'’ The subject of proper law as applied both to the merits of the dispute and to the arbitration
agreement is discussed in Ch.2.
See para.2—107 for a discussion about the difference between the seat of the arbitration and the
place where the arbitration is conducted.
 Arbitration and its Features 3

determined,” the provisions of the Act relating to the stay of legal proceedings?!
and the enforcement of arbitral awards” will apply”’ as will certain other powers
of the court in support of the arbitration.2* Those powers are referred to in a later
section of this chapter.”

Mandatory provisions. The terms of an arbitration agreement may be 1-004

overridden in whole or in part by mandatory provisions of English law. ‘The
Arbitration Act 1996 contains a list of such provisions”® within Pt I of that Act.27
For example, the court may on the application of a party to an arbitration
agreement extend the time agreed for beginning proceedings in respect of certain
claims and this power cannot be excluded by the terms of an arbitration agree-
ment.”°

2. ARBITRATION AND ITS FEATURES

Features. Three features arising out of the Act deserve particular mention: 1-005

® party autonomy is recognised as paramount’’ and court intervention is

expressly excluded except as specified in the Act*’;
@ a general duty is imposed on the arbitral tribunal to act fairly and impartially
and to adopt procedures that avoid unnecessary delay or expense*'; and

@ English arbitration law is uniform, the same law applying to all arbitrations,
whether domestic or international, provided that they are governed by Eng-
lish law.*?

2 Section 2 of the Act foresees that situation when, despite the broad definition of “the seat of the
arbitration” in s.3, the seat of the arbitration is not designated or determined—see para.2-102.
2) Section 9 of the Arbitration Act 1996, but also ss.10 and 11—see paras 7-019 et seq.
” Section 66 of the Arbitration Act 1996—see para.8—003.
23 Section 2(3) of the Arbitration Act 1996. See Weissfisch v Julius [2006] EWCA 218 where a stay of
the court action was requested on this basis.
24 Section 44 of the Arbitration Act 1996—-see paras 7-180 et seq.
25 See s.4 of this chapter entitled ‘““The role of the English Court” at para.1019.
26 Schedule 1 to the Arbitration Act 1996. The mandatory duty imposed on the arbitral tribunal by
5.33 of that Act is mentioned: in para.1—004.
27 Part I of the Arbitration Act 1996 applies to most arbitrations, but its provisions are modified in
respect of the arbitrations specified in Pt II of the Act and do not apply to Pt IL of the Act.
28 Arbitration Act 1996, s.12: see paras 7-067 et seq.
29 Section | of the Arbitration Act 1996 states as a general principle that “the parties should be free
to agree how their disputes are resolved, subject only to such safeguards as are necessary in the
public interest”.
30 Section 1 of the Arbitration Act 1996 states as another general principle, that in matters governed
by Pt 1 of the Act “the court should not intervene except as provided by this Rati
duty is specified in s.33 of the Arbitration Act 1996: see para.4—l04 and
| This general
para.5—032.
law results
322 The uniform treatment of domestic and international arbitration governed by English
from the decision not to bring into force ss.85-87 of the Act which make provisions for a “domestic
arbitration agreement”. For details of that decision, see para.2—005 and footnote.
 + Introduction

1-006 General principles. The general principles of arbitration, which are com-
plementary to party autonomy and the tribunal’s general duty, are expressed in the
first section of the Act, and are said to be founded on the following principles and
to be construed accordingly**:

® the object of arbitration is to obtain the fair resolution of disputes by an

impartial tribunal without unnecessary delay or expense;

® the parties should be free to agree how their disputes are resolved subject
only to such safeguards as are necessary in the public interest**; and

® intervention by the courts should be restricted.*°

1-007 Public interest. The first statement recognises that unnecessary expense and
delay can and should be avoided without compromising the fair resolution of
disputes. The need for an impartial tribunal is of course imperative and is
discussed later in this book.*° Equally significant is the emphasis on party auton-
omy,*’ which is “‘subject only to such safeguards as are necessary in the public
interest”.** There is no definition of the words quoted in the previous sentence,*”
so they must be considered in the light of the mandatory provisions of the
Arbitration Act 1996, including in particular s.33 of the Act*:

“Tt seems to us that the public interest dictates that [section] 33 must be mandatory, i.e.
that the parties cannot effectively agree to dispense with the duty laid on arbitrators
under that section.’”*!

Although court intervention is limited by the mandatory provisions of the

Arbitration Act 1996, within that constraint there is scope for ensuring that
party autonomy does not override matters that affect the public interest.

**'The general principles on which Pt 1 of the Arbitration Act 1996 is “founded” and is to be
“construed accordingly” are set out in s.1 of the Arbitration Act 1996.
** The qualification of “public interest” on party autonomy is mentioned in para.1—039 and footnote
to that paragraph.
** The general principles are stated to apply to the provisions of Pt I ofthe Arbitration Act 1996, The
third principle has been paraphrased. See Appendix | for the full text of the 1996 Act.
*© See paras 4-023 et seq.
*” The emphasis on party autonomy became more apparent after the UK acceded to the New York
Convention in 1975. See paras 1-048 et seq.
*® Arbitration Act 1996, s.1(b).
* The consequences of public interest are however discussed in the DAC report at para.19. See
Appendix 2.
40
See paras 5-032 ef seq. for a discussion of this duty.
"DAC report para.155. The whole of the paragraph, which is reproduced in Appendix 2, and the
following paragraphs in that report are worth reading on this subject—see also para.5—053.
* Arbitration Act 1996, s.1(c) and para.1—019. There is no inherent common law jurisdiction that
permits the court to supervise arbitrations, although certain common law rights are saved by s.81(1)
of the Arbitration Act 1996: see para.7—003.
" The role of the court in arbitration is discussed in Chs 7 and 8. See para.1-040 for public policy
and pubic interest.
 Arbitration and its Features 5

Definition of arbitration. As a means of resolving disputes, arbitration has 1-008

been employed in England and elsewhere for centuries.** The need for a definition
has always been subsidiary to its purpose although attempts have from time to
time been made at a definition.

“An arbitration is a reference to the decision of one or more persons, either with or
without an umpire, of some matter or matters in difference between the parties” .*°

The Arbitration Act 1996 does not contain a definition*® of arbitration (as
opposed to the arbitration agreement).*” Perhaps the absence of an accepted
definition of arbitration, which encompasses its many facets but precludes other
forms of dispute resolution, simply demonstrates the diverse scope of the subject.
In any event, courts and practitioners have managed to resolve questions about
what is and is not arbitration when these have arisen based on well-recognised
features of the process.**
It is difficult to identify the exact combination of features*? which sets arbitra-
tion apart from other methods of dispute resolution, but certain features are
usually found in arbitration. They are the need for a provision referring the
dispute to arbitration, the privacy of the proceedings, a determination of the
dispute and the finality of the decision.

Arbitration agreement. Compare a court action, which is another means 1-009

of dispute resolution. Like arbitration, it involves adjudication leading to a final
decision, sometimes after appeal, but it does not require the agreement of the
parties or some other provision referring the dispute for decision by the tribunal.
By contrast, an arbitration agreement (whether contained in a submission agree-
ment*’ or in a clause in a commercial contract) identifies the parties to the
dispute*' and defines the dispute or types of dispute referred to arbitration. It
contains the tribunal’s mandate.** It may also specify how the tribunal is to be
appointed and, expressly or by implication, the procedure to be adopted in the

+ References to arbitrament, as arbitration used to be called, appear in the Year Books. For an early
example, see Anon (1468) Y.B., 8 Edw. IV., fo.1, p.1.
45 Definition of arbitration provided by Romilly M.R. in Collins v Collins (1858) 26 Beay. 306 at 312
reported in English cases at 916-919. The definition could apply to other forms of dispute
resolution. The problems of defining arbitration are discussed in Mustill and Boyd, pp.38-S0.
+6 The omission was deliberate. See DAC report, para.18 and the April 1995 Interim Report of DAC,
reproduced in Appendix 2.
47 Section 6 of the Arbitration Act 1996 defines an “arbitration agreement”. See Ch.2 for a full
discussion.
48Tn O'Callaghan v Coral Racing Ltd, The Times, November 26, 1998, CA the court decided that a
procedure for resolving disputes over a gaming transaction could not be an arbitration process. :
4° The features mentioned here refer to arbitration generally rather than to the English law of
arbitration, which has already been mentioned in para.1—005.
50 See para.2-003 for a definition of “submission agreement”.
51 In the case of an arbitration clause, the parties are usually identified in the main agreement that
contains the clause, although not all parties to an arbitration agreement in a contract need to be
parties to the particular dispute. / : ;
52 The tribunal’s mandate is also governed by the scope of the reference to it of the particular
arbitration.
 6 Introduction

proceedings. It is this agreement which gives rise to the consensual and predom-
inantly bilateral nature of arbitration to the exclusion ofthird parties.°** The nature
and content of the arbitration agreement is addressed in Ch.2 and the parties to
that agreement are discussed in Ch.3. Arbitration pursuant to an investment treaty
is referred to briefly at the end of s.7 of this chapter** and arbitration pursuant to
statute is referred to in Appendix 3.

1-010 Privacy and confidentiality. An arbitration is heard in private, whereas at

least some part ofa court action may be heard in public at the trial or hearing. The
tribunal, the parties and their representatives are the only persons allowed to
participate in the proceedings unless the parties and the tribunal agree otherwise.
A witness may be required to give evidence to the tribunal but that testimony is
only heard by those persons allowed to be present. The public has no right to
attend a hearing before an arbitral tribunal. Privacy, and the related subject of
confidentiality, are discussed in greater detail in a later chapter.” They are subject
to numerous qualifications, which is why no specific provision was made for them
in the Arbitration Act 1996,°° but they are said to be implicit in the parties’ choice
to arbitrate in England.*’

1-011 Determination. Privacy and agreement of the parties are not peculiar to
arbitration. Alternative dispute resolution (““ADR’’) procedures, including concil-
iation and mediation, are also held in private and depend on an agreement between
the parties, but ADR differs from arbitration*® in that a conclusion can be reached
only if all the parties agree. ADR gives the parties the opportunity to meet and
negotiate with each other often with the assistance of a neutral third party adviser.
Agreement to ADR does not however guarantee that there will be a final and
binding decision.*’ By contrast, once an arbitral tribunal has been appointed, it
must proceed with the reference by determining the issues and making an award®
unless the tribunal is released from that obligation.°' One party cannot avoid the

°* Multi-party arbitrations are an exception, although even they are based on agreement see paras
3-040 et seq.
+ Paragraph 1-041.
°° See para.5—182.
°° The omission is justified in the DAC report (paras 11-17). For a commentary on that decision see
Patrick Neill Q.C. “Confidentiality in Arbitration” [1996] 12(3) Arbitration Int. 287, and observa-
tions made in Associated Electric & Gas Insurance Service Ltd v European Reinsurance Co of Zurich
[2003] UKPC 11.
7 Moscom City Council v Bankers Trust Co [2004] EWCA Civ 314.
** Sometimes arbitration is subsumed within the definition ADR, because it is an alternative to
litigation, but in this book arbitration is treated separately from other ADR techniques: see paras
2-024 et seq.
»” For a thorough review of ADR procedures see J Tackaberry and A Marriott, Bernstein’s Handbook
of Arbitration and Dispute Resolution Practice.
°° See Ch.6 for a full discussion on the Award.
°''This may occur in several ways (e.g. by agreement of the parties, death of a sole arbitrator,
revocation of the appointment or removal of the tribunal). See paras 4-159 e¢ seg. An arbitrator may
be relieved of liability for breach of this obligation if the court is satisfied that it was reasonable for
him to resign: see the Arbitration Act 1996, s.25(4) and para.7—133.
 Arbitration and its Features 7

decision of an arbitral tribunal by refusing to go on with the proceedings.”

Although the parties must have committed to arbitrate in the first place,®* once a
binding commitment to arbitrate is made, sometimes years before the dispute
arises, an enforceable arbitration award may result despite the objection of one of
the parties.

Expert determination. It is difficult to distinguish arbitration from expert 1-012

determination. One distinction may be found in the type of procedure the parties
intend to use to resolve their difference rather than in the nature of the difference
itself. For example, parties appoint a valuer to determine a fair price of something.
His expert opinion is required rather than an award based on submissions from the
parties, although expert determination has expanded into the area of general
dispute resolution.°* His decision cannot be challenged in the same way as the
award of an arbitral tribunal.°* A valuer may however be sued if he provides a
negligent valuation.°° On the other hand, an arbitral tribunal can be appointed
only where there is express reference to arbitration of a matter which it must
decide after taking account of any evidence and argument of the parties to that
dispute. Further, the Arbitration Act 1996 does not apply at all to expert deter-
mination.

Variety of procedures. As for the procedures used in arbitration, there are 1-013
those akin to High Court practice, where it is assumed that the parties will
exchange full written submissions, make voluntary disclosure of documents and
call witnesses to give evidence orally and be cross-examined. There are others,
which though formal and often conducted under the auspices of an arbitral
institution,’ reflect more closely procedures used abroad, permitting little, if any,
document disclosure or cross-examination. Increasingly common in international
arbitration is a form of hybrid procedure, taking elements of both common and
civil law systems.°* Then, there are the more informal procedures, which apply in
many consumer cases. In some of those informal procedures there is a hearing,
where the parties are often not represented by lawyers; in others the tribunal

°2 See para.5—228 for termination by mutual consent.

°3 The Commitment is frequently made by an arbitration agreement, (see Ch.2) but it may also be
contained in a statute (see Appendix 3) or in a treaty (see para. 1—041).
64 For a full treatment of this subject, see J Kendall, Expert Determination. See also paras 2-028
et seq. '
5 See Halifax Life Ltd v The Equitable Life Association Co [2007] EWHC 503 where the challenge of
such a decision was decided by Cressell J., who reviewed previous authorities. Challenges to arbitral
awards are discussed in paras 8-051 et seq. oa
6 The Arbitration Act 1996, s.29 gives the arbitral tribunal an immunity unless its acts or omissions
are shown to have been in bad faith. This provision has removed the doubt about an arbitrator’s
immunity from suit that followed the decisions of Sutcliffe v Thackrah [1974] A.C. 727 and Arenson
v Arenson [1975] All E.R. 901. See paras 4-200 et seg.
67 See paras 3-052 et seq. for the role of an “arbitral institution”. :
68 This approach is reflected in the IBA Rules on the Taking of Evidence in International Commercial
Arbitration.
 8 Introduction

decides the dispute on the basis of documents submitted by the parties, and
without a hearing.®

1-014 Domestic and international. Many of the disputes referred to arbitration

are of a wholly domestic kind and are conducted under consumer schemes that
provide a tribunal with the relevant expertise (not necessarily legal) and a simpli-
fied procedure. Other disputes are truly international, the only connection with
England being the choice of London as a neutral seat for the arbitration. In
between, many disputes would be considered international because one or more of
the parties was from a different jurisdiction.

1-015 Finality. An arbitral tribunal may make one or more awards,” each of which is
final as to the matters decided. The finality of the award and its consequences are
treated fully in Ch.6. For the purpose of this introduction it will suffice to say that
recourse against an award is limited. Permission to appeal may only be obtained in
special circumstances,’' and the grounds for otherwise challenging an award are
restricted.’* An application to enforce an award may be made immediately after the
award has been published to the parties. Such applications are very often granted
summarily,’* because of the limited scope for opposition.’*

3. THe ARBITRAL TRIBUNAL

1-016 The decision-maker. Once the parties have agreed to arbitrate, they will
need to provide for a decision-maker to resolve their disputes or differences. That
is the arbitral tribunal, which may consist of one or more persons.’> An arbitration
agreement will often provide for each party to appoint an arbitrator and for a third
person, either a third arbitrator or an umpire, to be appointed immediately after
or some time later in order to make up the tribunal.”° In this book reference is
usually made to “the arbitral tribunal” or simply “‘the tribunal” because that is the

© See paras 5—089 e¢ seq. for a discussion on the different procedures available.
7 Arbitration Act 1996, s.47, see paras 6-009 er seq.
7! See paras 8-119 et seg. and the Arbitration Act 1996, s.69 which restates the previous law contained
in the Arbitration Act 1979, s.1(4) as applied in Pioneer Shipping BTP Tioxide Ltd (The “Nema”’)
[1981] 3 W.L.R. 292 and The “Antaios” [1985] A.C. 191. See also Bisichi Mining v Bass Holdings
[2002] EWHC 375 (Ch), Jacob J. and Losinjska v Valfracht Maritime (The “Lipa’’) [2001] 2 Lloyd’s
Rep. 17.
? See paras 8-051 et seg. and the Arbitration Act 1996, s.67 (challenge as to substantive jurisdiction)
and s.68 (challenge for serious irregularity).
73 See paras 8-002 ef seg. and the Arbitration Act 1996, s.66.
7 Although the scope for opposition is limited, it varies according to the type of award (e.g. an award
made in England or one made abroad, such as a New York Convention Award) (see paras 8-010
et seq.)
7° In maritime and commodity disputes it is common for each party to appoint an arbitrator and for
the two arbitrators to determine the dispute. If they cannot agree an umpire enters upon the
reference. See para.4—007
7° The significance of the different tribunals is discussed in paras 4-062 et seg.
 The Arbitral Tribunal 9

term used in the Arbitration Act 1996” and because it more accurately reflects the
fact that awards can be made by a sole arbitrator, two or more arbitrators or an
umpire.’* The word arbitrator” in the singular is used from time to time, which
will serve as a reminder that a large number of arbitrations that take place in
England are conducted by a single or sole arbitrator. Also, the tribunal does not
always act as one, and an application to remove an arbitrator®® need not extend to
the whole tribunal.*!

Appointment by the parties. Whatever their number, one, two, three or 1-017
more, the arbitral tribunal must be impartial** and act judicially in determining
the parties’ disputes in accordance with their agreement and the law.** An
arbitrator differs from a judge, however, in that he is appointed not by the State
but by the parties or by an individual or institution chosen by the parties.** He
therefore owes duties to the parties themselves, (as explained in Ch.4), and is not
accountable to Parliament or to the public at large.

Variety of expertise. The arbitrator may differ from a judge in another 1-018
important respect. He can be chosen by the parties because of his expertise in the
subject matter of the dispute. A judge is trained in the law in order to decide legal
issues. Very often the arbitrator is an experienced lawyer, but there are occasions
when an arbitrator trained in another discipline is more appropriate to decide
upon technical issues outside the law.*°

77 Sections 15 to 29 of the Arbitration Act 1996 are concerned with the arbitral tribunal.
78 See s.21 of the Arbitration Act 1996 for a definition of “umpire”. An umpire will only decide the
matter if there is a reference to two arbitrators and an umpire and the two arbitrators cannot agree
on a decision—see para.4—007.
7? The word “arbitrator” is defined in the Arbitration Act 1996, s.82(1), and includes an umpire.
8° Arbitration Act 1996, s.24 provides a mechanism for the court to remove an arbitrator (see paras
7-110 et seg.) but arbitration rules often provide for an arbitral institution to remove an arbitrator
in certain circumstances.
81 If the whole tribunal is affected or tainted by the bias of one, they may all have to be removed. See
ASM Shipping v Harris [2007] EWHC 1513 (Comm) at para.4—115.
82 A partial arbitrator may be removed by the court (Arbitration Act 1996, s.24(1)(a)). For a discussion
of the arbitrator’s duty to act fairly and impartially see paras 4-106 et seg. The rules of the LCIA
(“LCIA Rules”) provide that the tribunal ‘“‘shall be and remain at all times impartial and independ-
ent” (Art.5.2). The ICC Rules of Arbitration provide that the tribunal shall be independent
(Art.7.1). The two requirements overlap: see DAC report, para.101.
83 As the arbitrator usually derives his mandate from an agreement of the parties, it is axiomatic that
he must have regard to that agreement in reaching his conclusion. Apart from the general duty
specified in s.33 of the Arbitration Act 1996, the arbitral tribunal must also apply the law unless the
parties agree otherwise. (Arbitration Act 1996, s.46, see also President of India v La Pintada |1985|
1 AIL E.R. 104, per Lord Brandon at 119.) These matters are discussed in more detail later in this
work: see para.4—141.
84 The parties have no say in the appointment of a judge as he is appointed by the State. (The judge-
arbitrator is an anomaly: see paras 4-019 e¢ seq.) Parties often leave the selection of the arbitral
tribunal to an individual office-holder (e.g. the President of the Law Society) or to an independent
appointing authority like the International Court of Arbitration of the International Chamber of
Commerce (ICC) or the LCIA, although the tribunal may be appointed by the court ifall else fails:
see paras 4-026 and 4-027.
85 The composition of tribunals is developed in paras 4-035 et seq.
 10 Introduction

4. THe ROLE OF THE ENGLISH COURT

1-019 Non-intervention. English arbitration law recognises and gives effect to

party autonomy, and, in matters governed by Pt I of the Act, the court is directed
not to intervene except as provided by that part of the Act.*° This direction, which
is stated as a general principle in the first section of the Act, has been observed*’
and emphasised by the courts at the highest level.** Nevertheless, the Act recog-
nises that court intervention may occasionally be necessary to support the arbitral
proceedings.*? Chapters 7 and 8 of this book discuss the powers available to the
English courts and how they have been exercised since the Act came into force.

1-020 Powers of the court. All the powers specified in Pt 1 of the Act as exercisable
by the court apply when the seat of the arbitration is in England.” Some of those
powers may, however, apply even when the seat of arbitration is outside England?’
or when no seat has been designated or determined.”* Mention has already been
made of the court’s powers to stay legal proceedings in breach of an arbitration
agreement,’* and to enforce an arbitration award made abroad.”* Another impor-
tant power, which the court may exercise even though the seat of the arbitration
is outside England or no seat has been designated or determined, is the court’s
power to grant interim measures.”° This is not a term used in the Act, but it aptly
describes the matters listed in s.44(2).°° The court’s power to grant urgent relief
is particularly useful before the arbitral tribunal is appointed. Once appointed, the
tribunal has power to grant interim measures,”’ although occasionally the court’s
assistance is still required during the reference.”®
Section 2(3) of the Act contains specific reference to the court’s powers
conferred by s.43 (securing the attendance of witnesses),”” and s.44 (powers
exercisable in support of arbitral proceedings),'°° although in those cases the Act

86 Section l(c) of the Arbitration Act 1996.

*7 For a discussion of the limited intervention of the courts, see lecture dated March 14, 2006 of
Coleman J. “Arbitrators and Judges—How much interference should we tolerate?”
8 Lesotho Highlands Development Authority v Impregilo SpA [2005] UKHL. 43.
* The excepiion to s.1(c) of the Act reflects this recognition, which is expressed in later sections of
the Act. Section 1(c) copies the words of Art.5 of the Model Law—see Appendix 4.
© Section 2(1) of the Arbitration Act 1996, which refers to “England and Wales or Northern Ire-
land”’,
*' Section 2(2) to (7) of the Arbitration Act 1996, “Outside England” is used in this chapter as a
shorthand for the words “outside England and Wales or Northern Ireland”.
*? Reference to this last phrase in s.2 of the Act has already been mentioned in an earlier footnote.
** Section 2(2)(a) of the Arbitration Act 1996, which refers expressly to s.7 of the Act—see paras
7-010 et seq.
°* Section 2(2)(b) of the Arbitration Act 1996, which refers expressly to s.66 of the Act—see
para.8—003.
°° Section 2(3)(b) of the Arbitration Act 1996, which refers to s.44 of the Act.
°° Te is a term used in the Model Law, Art.9, which was acknowledged by the DAC to correspond to
s.44—see para.214 of DAC report in Appendix 2.
°7 See paras 5-074 et seq.
°8 See Ch.7 for a full discussion about the court’s power.
°° See paras 7-202 et seq.
109 See paras 7-180 ef seq.
 The Advantages of Arbitration 1]

provides that the court may refuse to exercise its power if, in the opinion of the
court, the fact that the seat is abroad or, when determined, is likely to be abroad
makes it inappropriate to do so.'°!

Seat abroad or not determined. The powers of the court to intervene 1-021
when the seat of an arbitration is abroad or not determined are not limited,
however, to the sections specifically mentioned,'” because s.2(4) of the Act
provides that the court may exercise a power conferred by any provision of Pt 1 of
the Act not already mentioned for the purpose of supporting the arbitral process
where:

® No seat of the arbitration has been designated or determined, and

@ by reason of a connection with England and Wales or Northern Ireland the

court is satisfied that it is appropriate to do so.

Further, where the law applicable to the arbitration agreement!™ is English law,'*
s.7 (separability of arbitration agreement),'® and s.8 (death of a party)!°° apply
even if the seat of the arbitration is abroad or not determined.!°”

5. THe ADVANTAGES OF ARBITRATION

The choice of arbitration. With all the other means of resolving disputes 1-022
available, why should anyone choose to arbitrate? After all, the parties, or one of
them, must pay the fees of the arbitral tribunal and the expenses of the venue,
whereas a judge and the use of the courts largely come free. There are several
reasons why parties agree to arbitration.

Privacy and choice in the tribunal. Mention has already been made of 1-023
the privacy and confidentiality of arbitration proceedings. Some parties prefer to
know in advance that their disputes will be determined out of the public gaze. The
right to choose or to have a say in the choice of one or more members of the
arbitral tribunal is also regarded as an advantage. Even if the degree of influence
is minimal because the choice is left to an appointing authority, there has never-
theless been some involvement in the selection process by agreeing to that
appointing authority, and the parties may take comfort from the institution’s
previous experience of appointing and working with particular arbitrators. Parties

'01 Section 2(3) of the Arbitration Act 1996.

102 Sections 9-11, 66, 43 and 44 of the Act.
!03 That law may be different to the law governing the merits of the dispute—see para.2—094.
0+ The words used in s.2(5) of the Act are ‘the law of England and Wales or Northern Ireland”.
105 See para.2—007.
106 See para.3—026.
'07 Section 2(5) of the Arbitration Act 1996,
 12 Introduction

find it reassuring not to be dependent on the luck of the draw from a court list.'°°
Further, some disputes involve highly technical issues and it can be useful to have
at least one member of the tribunal who is familiar with the technical issues or
applicable law by virtue of his training and so does not have to be educated by the
parties in order to understand them.

1-024 Flexibility. Arbitration can be much more flexible both in time and procedure.
If the dispute needs urgent resolution, the parties can choose a tribunal who will
act promptly rather than wait their turn in the queue.'®’ As arbitration is con-
sensual, the parties can choose the most suitable procedure. Neither they nor the
tribunal are tied to formal rules of court. Written submissions in letter form may
be appropriate for a dispute over the interpretation of a written agreement,
whereas examination of witnesses may be required for the determination of
disputed facts. The parties can also be represented by anyone of their choice
because they are not bound by rules limiting appearance to persons with particular
legal qualifications.''®

1-025 Neutrality and equality. Where the parties come from different countries,
arbitration may be preferable to litigation because quite often neither party is
willing to submit to the jurisdiction of the national court of the other. Arbitration
offers them neutrality in the choice of law, venue, procedure and tribunal. The
parties may agree upon the law and procedure of a third country or leave the
choice to the tribunal. They can appoint an arbitrator from another country or
request an international arbitral institution to make the appointment either of the
sole arbitrator or one or more members of the tribunal.''! In so doing the parties
may be more confident that there will be equality of treatment.

1-026 Enforceability of award. A further important advantage of arbitration is

the extensive enforceability of the award. Having incurred the cost of proceedings,
a successful claimant wants to be in a position to enforce the award, if necessary.

'08'The listing procedure of the English courts is based largely upon the availability of the judges and
there are provisions for transfer of business to another court, ‘ J
10 In an urgent case a decision may be required in a matter of days or hours. Although the court
will
respond to urgent applications (e.g. for interim measures like an injunction), an arbitral tribunal has
more flexibility to adapt its procedure, for example, to give a final decision immediately
after oral
and/or written submissions from the parties. ‘
"° Unless the litigant appears in person, only barristers and solicitors with advocacy
certificates have
a right of audience before the higher courts in England. There is no such restriction
in arbitrations
(Arbitration Act 1996, s.36). The parties may be represented by any person of their choice
(e.g. a
foreign lawyer or someone experienced in the issue in dispute),
'"'!'The ICC Rules of Arbitration provide expressly that where the circumstances so demand
the sole
arbitrator or chairman of the arbitral tribunal shall be of a different nationality to that of the parties
(Art.9.5). Compare Art.6.1 of the LCIA Rules. ;
 The Disadvantages of Arbitration 13

As a result of various conventions, arbitral awards are recognised and enforceable

in many more countries than English court judgments. !!?

Summary of advantages. To summarise, parties choose arbitration 1-027

because of the flexibility and privacy of the proceedings, their ability to choose
(directly or indirectly) the tribunal and the enforceability of the award. Perhaps
most importantly though, in the modern world of cross-border transactions and
collaborations, arbitration can provide elements of neutrality as regards location,
governing law and constitution of the tribunal, which make it a very attractive
proposition in international commerce.!!”*

6. THE DISADVANTAGES OF ARBITRATION

What are the snags? In order to get a full picture it is necessary to mention 1-028
the cons as well as the pros of arbitration. Expense and delay immediately spring
to mind, but they are features of litigation as well. Certainly, there is an extra cost
in respect of the fees of the arbitral tribunal,''* but in many cases the tribunal can
more than pay its way by taking control of the proceedings from the outset and
conducting them in an efficient manner. Its general duty''* combined with the
exhortation in the first section of the Arbitration Act 1996''? requires an arbitral
tribunal to avoid unnecessary delay or expense.

Expense and delay. Some delays are peculiar to arbitration. For example, 1-029
there are those that can occur at the beginning of the proceedings as a result of the
procedures for appointing the tribunal, particularly if challenges are made to the
arbitration agreement or to an arbitrator.''® As against that the limited scope for
recourse against the award may save time in the end by avoiding the possibility of
one or more appeals. It is often said that the limited coercive powers of the

2 The principal convention which provides for recognition and enforceability of awards made in
England and elsewhere is the New York Convention, which was adopted by the UK in 1975: see
paras 8-020 et seq. on this subject. Although there are certain treaties under which court judgments
are enforceable, these are more limited in application than the New York Convention. For example,
there is no treaty between the UK and the USA for the enforcement of judgments but both
countries have acceded to the New York Convention.
112a Premium Nafta Products Ltd & others v Fili Shipping Co Ltd & others (2007) URHL 40, per Lord
Hoffmann at [6].
13 The fees will increase if there is more than one member of the tribunal and/or if an arbitral
institution is involved. In addition to the arbitration fees, there may be the expenses of the place
(offices or hotel) where hearings take place.
14 The general duty of the tribunal specified in s.33 of the Arbitration Act 1996 includes the avoidance
of “unnecessary delay or expense”: s.33(1)(b) see paras 4-131 and 5-032.
115 The Arbitration Act 1996 states as the object of arbitration the fair resolution of disputes by an
impartial tribunal “without unnecessary delay or expense”: s.1(a).
116 Challenges of both kinds do occur, particularly in international cases.
 14 Introduction

tribunal!!? make arbitration vulnerable to delay. There is some truth in this

statement, but once appointed an experienced tribunal will take control of the
proceedings, and proceed, despite an obstructive party, in order to maintain a
reasonable timetable.''*

1-030 No summary procedures. The summary and third party procedures used
in the English courts are not available in arbitration.''’ An arbitral tribunal must
give each party a reasonable opportunity of putting his case and dealing with that
of his opponent,'”° which does not allow a summary decision in favour of the
claimant on the ground that the respondent has no real prospect of successfully
defending its claim.'7'

1-031 No joinder or consolidation. Because of the consensual nature of arbitra-

tion, an arbitral tribunal will usually lack the power to add or substitute a party to
the proceeding without the consent of all the existing parties.'** For the same
reason an arbitral tribunal has no power to consolidate its arbitration with another
in order to bring before one tribunal related claims for determination. Even if
there is express power for the claims to be consolidated,'** consolidation may not
be possible once arbitration proceedings have commenced.

1-032 Quality of decision making. Criticism is sometimes made because deci-

sions or reasoning of a tribunal are not up to the standard expected by one or other
party to the arbitration. When a party has a choice in the nomination or appoint-
ment of the tribunal care should be taken so as to ensure that members of the
tribunal are well qualified to decide the particular dispute.!?+

7. MATTERS REFERRED AND REFERABLE TO ARBITRATION

1-033 What can be referred to arbitration? The question of whether partic-

ular disputes can be referred to arbitration (arbitrability) should not be confused

''’ The tribunal can dismiss for want of prosecution and can proceed even if a party chooses not to
participate but peremptory orders may need to be enforced by an application to the court—see
ss.41
and 42 of the Arbitration Act 1996 and paras 5-202, 5—224 and 7-198.
"8 “The calibre, experience and industry of the tribunal, and the nature and quality of the
procedure
employed in individual cases, are of paramount importance’’: statement attributed to the
late Sir
Michael Kerr. For powers of the tribunal in case of default, see paras 5—192 et seq.
19 CPR Pts 19 and 24.
'° This is part of the general rule in the Arbitration Act 1996, s.33. Contrast the power
to strike out
a claim for delay: s.41(3). See para.4—089.
‘2! Contrast court’s powers under CPR Pt 24.2.
122 See para.3—044
3 For example, claims by an employer against a contractor and related
claims by the contractors
against sub-contractors ;
124 See para.4—-014.
 Matters Referred and Referable to Arbitration 15

with the question of what disputes fall within the terms of a particular arbitration
agreement (the scope of the arbitration agreement). The latter is a matter of
interpretation of the particular arbitration clause and is dealt with in Ch.2. The
subject of arbitrability has not received much attention from the English courts,'?°
although it has been considered by some other common law courts, including the
Supreme Court of the United States of America.'”° Paradoxically, the reason may
lie in the huge range of different disputes that are referred to arbitration in
England and the procedures adopted to determine them, which inhibit any
attempt to limit arbitrability at least in the commercial field. In order to get an idea
of what can be referred to arbitration in England one need go no further than the
City of London which has witnessed a large variety of commercial and financial
disputes. To those cases concerning maritime, insurance and commodity con-
tracts, can be added disputes arising out of building and civil engineering projects,
energy and utilities, information and technology, intellectual property, rent review
clauses in commercial leases, partnership agreements, manufacturing, imports and
exports and general trading.'*’ Another approach is to observe the differently
constituted arbitral tribunals'’* and the variety of procedures adopted in arbitra-
tions conducted under the rules of institutions as well as in ‘tad hoc” arbitra-
tions. '”°

Arbitrability.'*° The issue of arbitrability can arise at three stages in an 1-034

arbitration: first, on an application to stay the arbitration, when the opposing party
claims that the tribunal lacks the authority to determine a dispute because it is not
arbitrable; second, in the course of the arbitral proceedings on the hearing of an
objection that the tribunal lacks substantive jurisdiction'*'; and third, on an
application to challenge the award'*’ or to oppose its enforcement. The New York

'25 The English courts have frequently considered the scope of specific arbitration clauses (e.g. Ashville
Investments Ltd v Elmer Contractors Ltd [1988] 2 All E.R. 577 and Fiona Trust & Holding Corp &
ors v Privalov & ors [2002] EWCA Civ 20 (affirmed) Premium Nafta Products Ltd & others v Fih
Shipping Co Lid & others [2007] UKHL 40) but the subject of arbitrability has received little
attention. The subject was raised, but rejected summarily, in Re Vocam Europe Ltd [1998] B.C.C.
396 at 398 and has since been considered in respect of anti-trust issues (see para. 1-036). Indeed, in
considering the Model Law, the DAC report of 1989 gave short shrift to the subject as follows:
“Such matters as are not arbitrable in England (e.g. civil status, liability for criminal offences, etc.)
lie almost wholly outside the commercial field” Appendix 1. For a different view see Eric A
Schwartz “The Domain of Arbitration and Issues of Arbitrability: The View from the ICC”, Vol.9,
Foreign Investment Law Journal No.1, 17.
126 See for example First Options of Chicago Inc v Kaplan (1995) 514 US. 938.
127 The first three cases were treated as special categories in the Arbitration Act 1979, s.4 but are not
given that treatment in the Arbitration Act 1996.
28 The composition of arbitral tribunals is referred to in para.1-016 and developed in paras 4-035
et seq.
'29 See paras 2-006 and 3-051.
130 Some observations on arbitrability and the problems of terminology are made in the 200] Com-
panion to Mustill & Boyd, Commercial Arbitration, pp. 70-76.
32
131 The objection may be made to the tribunal or, subject to conditions, to the court: see ss.31 and
of the Arbitration Act 1996.
132 The challenge would be to the tribunal’s substantive jurisdiction under s.67 of the Arbitration Act
1996: see paras 8-054 ef seq.
 16 Introduction

Convention, for example, refers to non-arbitrability as a ground for a court

refusing
;
to recognise
:
and enforce; an award. 133

1-035 Crime. An obvious area where disputes are not arbitrable is criminal responsi-
bility. Only judges and magistrates can punish criminals and there will be few
occasions where an arbitral tribunal must consider whether a crime has been
committed, but a defence might be raised to a commercial claim which, if proved,
could mean that one or both of the parties had committed a crime.'*t The
procurement of a contract by bribery of a public officer is an example.'*? In order
to decide whether the defence is well founded the tribunal must investigate the
allegation. If the defence is established the claim may be dismissed, but, whatever
its decision, an arbitral tribunal cannot under English law impose criminal
sanctions.

1-036 Anti-trust. Issues relating to competition or anti-trust arising from alleged

breaches of securities legislation are arbitrable.'*° Thus, an arbitrator can, and may
have to,'*’ apply the competition law of the European Union which has direct
effect in Member States. Insofar as that law affects the validity of the main
contract, the arbitration agreement will be severable as a result of s.7 of the
Arbitration Act 1996 and may survive such invalidity. '* Failure by an arbitrator to
apply EU competition law where relevant may lead to an appeal against his
decision.'*? Even if an appeal has been excluded it has been suggested that the
court may intervene in order to fulfil its own duty under EU law.'*°

1-037 Limits of jurisdiction. In Er Plus SA v Welter,\*' the court stayed court

proceedings and said that it would be for the arbitral tribunal to decide finally on
the merits of claims under Arts 81 and 82 of the EC Treaty. The scope and

'®S Article V(2)(a) permits enforcement to be refused if the court finds that the subject of the difference
is “not capable of settlement by arbitration under the law of that country”: see para.8—043.
‘4 The Supreme Court of the USA has held that claims under the Rackeieer Influences and Corrupt
Organisations (RICO) Act are arbitrable by a tribunal appointed under the Federal Arbitration Act.
See Shearson and American Express Inc » McMahon [1987] 482 U.S. 220.
Wes)
An agreement to split the proceeds of a crime was another example given by the Court of Appeal
*eae v Solemmany [1998] 3 W.L.R. 911 at 821. On the subject of illegality, see para.

S° ET Plus SA v Welter [2005] EWHC 2115; [2006] 1 Lloyd’s Rep. 251 in respect of claims of breaches
of Arts 81 and 82 of the EC Treaty.
87 Mustill and Boyd, Companion, p.80, suggests that it follows from the decision in the Municipality
of
Almelo v Energiebedrif{—Jellemi [1994] E.C.R. 1-1477 that the duty to apply European law exists
even where the arbitrator is empowered, pursuant to s.46(1)(b) of the 1996 Act,
c to decide according
to “other considerations” than an applicable law.
'88 See para.2—007 for the doctrine of separability.
'° Tt would be a matter of English law for the purpose of s.69 of the Act: see para.8—119.
4° Mustill and Boyd, Companion, p.82 suggests that the common law power under s.81(1) of
the
Arbitration Act 1996 gives scope for intervention by the court on public policy grounds, but this
is doubtful. ‘ ‘
™ [2005] EWHC 2115 at [51] and [2006] 1 Lloyd’s Rep. 251 at 264. The arbitration was seated in
Paris.
 Matters Referred and Referable to Arbitration 17

application of the duty of an arbitral tribunal to apply competition law is uncer-

tain. In successive decisions, the Supreme Court of the United States of America
has held on an application for a stay that an arbitral tribunal can decide issues
relating to anti-trust and securities legislation.'4* In a rider to the Mitsubishi
judgment, however, the Supreme Court said that on an application for enforce-
ment the court would consider “‘the effect of an arbitral tribunal’s failure to take
cognisance of the statutory cause of action”’.'*? The implication of this rider is that
if an arbitral tribunal decides that there has been a breach of anti-trust legislation
but does not award the punitive damages prescribed by the legislation (because the
tribunal regards it as penal or possibly because another law is applied), the
enforcing court may review the award. This result may not be surprising in
domestic cases, that is, those involving two parties normally resident within the
jurisdiction of the court, but it does raise an important issue in non-domestic or
international cases.'**

Human rights. The European Convention on Human Rights (“ECHR”) has 1-038
been incorporated into English domestic law by the Human Rights Act 1996
(“HRA”) and is relevant to an arbitration whose seat is in England.'* Section 3(1)
of the HRA requires that primary legislation, which includes the Arbitration Act
1996 and subordinate legislation ‘“‘must be read and given effect in a way which is
compatible with Convention rights’. Subordinate legislation includes the rules
made under the Arbitration Act 1996. Thus, in considering any application or
appeal concerning an arbitration, the court will have regard to the ECHR'*°
because arbitration is directed at determining the civil rights and obligations of the
parties.”

Fair hearing. Article 6(1) of the ECHR provides: 1-039

“In the determination of his civil rights and obligations ... everyone is entitled to a fair
and public hearing within a reasonable time by an independent and impartial tribunal
established by law ... ”

142 Mitsubishi Motors Corp v Soler Chrysler Plymouth Inc [1985] 473 U.S. 614 (anti-trust claims) and
Shearson and American Express Inc v McMahon [1987] 482 U.S. 220 (securities and RICO claims).
A similar subject was considered in Att-Gen of New Zealand v Mobil Oil N2 Ltd [1989] 2 N.Z.L.R.
649 where the High Court in New Zealand refused to stay an arbitration in respect of anti-trust
claims. In IBM Australia Ltd v National Distribution Services Lid [1991] 100 A.L.R. 361 the
Supreme Court of New South Wales approved the New Zealand decision in upholding an
agreement to refer to arbitration the decision and relief to be granted under consumer protection
provisions.
3 Mitsubishi, above at 636-637.
14 Tn the Mitsubishi case the parties chose Swiss law to govern their contract, but there is some more
recent authority in the USA that the “second look doctrine” will not excuse enforcement of
Convention awards (Brandeis Intsel Ltd v Calabrain Chemicals Co 656 F. Supp. 160).
145 Part 1 of the Arbitration Act 1996 applies to an arbitration whose seat is in England or Wales or
Northern Ireland. However, what is said about an arbitrator’s duty in para.l-039 has wider
application and extends in principle to arbitration conducted in other States that have acceded to
the ECHR.
146 See the decision of the European Court of Human Rights in Suovaniemi v Finland (February 23,
1999).
'47 Article 6(1) of the ECHR. See Stretford v Football Association [2007] EWCA Ciy 238 at [34].
 18 Introduction

Although an arbitral tribunal is not a “‘tribunal” within the meaning of Art.6 of

ECHR,!'*® an arbitrator is required to observe duties that are broadly compatible
with Convention rights. Duties imposed on an arbitral tribunal by s.33 of the
Arbitration Act 1996 require an arbitrator to “‘act fairly and impartially as between
the parties, giving each party a reasonable opportunity of putting his case and
dealing with that of his opponent ... ”'*? A party who voluntarily’*® agrees to
arbitration is treated as having waived his right to a public hearing in the
arbitration,!* but the waiver does not extend to the other rights guaranteed by
Art.6(1) of the ECHR, including the right to a fair hearing within a reasonable
time by a tribunal that is impartial and independent.'*'! Thus, although the
Arbitration Act 1996 is compatible with the ECHR,'* it is important that the
tribunal bears in mind the ECHR and its jurisprudence’”? as well as the Arbitra-
tion Act. Failure to do so will make the tribunal’s decision susceptible to chal-
lenge.'°* The court has already considered the effect of the ECHR on its former
practice of not giving full reasons for a refusal to grant permission for leave to
appeal against an arbitration award, and concluded that some reasons should be
given.

1-040 Public policy. Under the Arbitration Act 1996, the parties are free to submit
all arbitrable issues, including those involving fraud, to the tribunal for determina-
tion.'*° The court does, however, retain limited powers in respect of matters that
affect public policy or the public interest.'°” Section 1 of the Arbitration Act 1996

"* For a further discussion on this subject see Jonathan Haydn-Williams, ‘Arbitration and the Human
Rights Act 1998” (Journal of Chartered Institute of Arbitrators) Vol.67, p.289. For primary sources
see www.echr.co.int.
49 See also s.1 of the Arbitration Act 1996 for a statement of the objective of an arbitration and
Stretford, ibid., paras 35-38. See para.5—032.
'S°'The waiver to a public hearing only applies where the parties have voluntarily (or freely) entered
into an agreement to arbitrate. See Streford, ibid., para.45. This waiver does not extend to
arbitrations imposed on a party by statute,
10a See Premium Nafta Products Ltd & others v Fili Shipping Co Ltd & others, in which it was
confirmed that “{t]he European Conyention was not intended to destroy arbitration” and that
as
arbitration is based on agreement, parties can by agreement waive the right to have their disputes
determined by a court (per Lord Hoffmann, at [20]).
'S! See Stretford, ibid., para.65, Sumukan Ltd v Commonmealth Secretariat [2007] EWCA Civ 243
at [59]
and Kazakhstan v Istil Group Inc [2007] EWCA Civ 471 at [19], which reviewed the
Strasbourg
jurisprudence.
'? Although compatible, there are differences. The obvious difference is that Art.6(1)
of the ECHR
requires a tribunal to be independent as well as impartial: see para.4—128.
'* The ECHR is said to be a “living instrument”, which means that the principles stated
in it will be
developed by the Commission and the European Court of Human Rights.
'4 A challenge to the tribunal’s jurisdiction was made unsuccessfully in Jsti/,
ibid.
' See North Range Shipping v Seatrans Shipping Corp [2002] EWCA
Civ 405, which overturned the
decision in Mousaka Inc v Golden Seagull Maritime [2002] W.L.R. 395, and
BLCT Ltd v J Sainbury
Plc [2003] EWCA Civ 884 at [44]-[48]. See para.8—152,
.
'*° When however an award is obtained by fraud or the award or the way
in which it was procured is
contrary to public policy, that constitutes a “serious irregularity”
which would enable a party to
apply to the court to challenge the award. Section 68(2)(g)
of the Arbitration Act 1996: see
para.8—076.
'S7 Public policy and public interest are not the same thing but
they may overlap. Public interest has
been explained in the DAC report in terms of the mandatory
duty imposed on a tribunal by s.33
of the Arbitration Act 1996. Public policy is described in para.8—044
., :
 The Sources of Arbitration Law 19

qualifies the autonomy of the parties by “such safeguards as are necessary in the
public interest”.'** Further, enforcement of an award may be opposed on the
ground that it is contrary to public policy,'®’ and an application may be made to
set aside an award because of a serious irregularity causing substantial injustice to
the applicant where the award was “obtained by fraud or the award or the way in
which it was procured [was] contrary to public policy.”'®? The court has even
granted an injunction restraining enforcement and publication of an award
obtained by fraud.'°!

Investment disputes. Though disputes arising out of bilateral and multi- 1-041
lateral investment treaties have increased in recent years, they raise legal con-
siderations that are beyond the scope of this book.'

8. THE SouRCES OF ARBITRATION Law

Where arbitration law is to be found. There is no single source of 1-942

English arbitration law. Prior to the Arbitration Act 1996, there was not even a
partial statutory code for the conduct of arbitrations. The Arbitration Acts
1950-1979 were more concerned with filling the gaps in an incomplete arbitration
agreement'® and specifying the powers of the High Court.'®* The greatest source
of arbitration law was to be found elsewhere, as the following quotation indi-
cated:

‘““A user of the process and his foreign or non-specialist adviser cannot quickly hope to
ascertain, simply by reading the Arbitration Acts and other statutes which contain
individual provisions concerning arbitration, how arbitration in England works in prac-
tice, and still less how to confront the kind of problem which is likely to arise if the
conduct of the reference goes wrong. The law on these topics lies almost entirely in the
reported cases, beyond the reach of lay users of arbitration, and indeed of non-specialist
foreign and English lawyers.”'®

158 Arbitration Act 1996, s.1(b). For a discussion on the effect of s.33 of the Act in the context of this
provision, see paras 155 et seq. of the DAC report—see also para.5—065.
'S° See Arbitration Act 1996, s.103(3) which provides that recognition or enforcement of a New York
Convention Award may be refused “‘if it would be contrary to public policy to recognise or enforce
the award”—see also para.8—044.
160 Arbitration Act 1996, s.68(2)(g) and see para.8—076.
'e! drab National Bank v El Abdalh [2004] EWHC 2381.
162 The reader is referred to specialist texts such as Foreign Investment Disputes by Bishop, Crawford
and Reisman (Kluwer, 2005).
'63 Arbitration Act 1950, s.6, for example.
16+ Arbitration Act 1950, s.12(6) and Arbitration Act 1979, s.1(2), for example.
165 Extract from para.103 of the DAC report on the UNCITRAL Model Law dated June, 1989. The
report recommended that the Arbitration Acts 1950-1979 should be replaced by a new Act, which
became the Arbitration Act 1996. See Appendix 2.
 20 Introduction

The Arbitration Act 1996 restated the former arbitration legislation'®? with
some changes and it also codified principles established by previous case law.
Further, the Civil Procedure Rules (“CPR”) Pt 62 and the Arbitration Practice
Direction made under those rules specify the procedure applicable to arbitration
applications made to the English courts.'°” Nevertheless, the decisions of judges
on arbitration matters that come before them continue to play an important role
in the development of the English law of arbitration.'°* Further, much of the
practice of arbitration is contained in awards of tribunals which are generally not
published. It is in this area that textbooks such as this come into their own because
they identify and comment upon the law and practice of arbitration. The court has
recognised that, in relation to cases arising in an international commercial context
regard may be had to comparative law and the approach taken to relevant matters
in other jurisdictions.'°*

9. DEVELOPMENTS IN ARBITRATION LAw

1-043 Arbitration Act 1996. This is the principal English arbitration statute.’ It
replaced the Arbitration Acts 1950-1979 as amended following a comprehensive
review of the English law and practice of arbitration'”® as well as the UNCITRAL
Model Law on International Commercial Arbitration.'7!

“One of the major purposes of the Arbitration Act 1996 was to set out most of the
important principles of the law of arbitration in England and Wales in a logical order and
expressed in a language sufficiently clear and free from technicalities to be readily
comprehensible to the layman. It was to be ‘in user-friendly language’.!”7
It is also not merely a consolidating Act. I would accept that the Act was intended to
make the law of arbitration clear and more straightforward. Furthermore, the Act makes
the law less technical than it has been hitherto. If it is appropriate for me to say so, the
underlying spirit of the Arbitration Act is very much in accord with the underlying spirit
of the new procedural rules applicable to the civil courts in this jurisdiction ... it sets
out in readily understandable terms for parties to an arbitration what is required of
thenveae.-

‘°° The former arbitration legislation is to be found principally in the Arbitration Acts 1950-1979. The
Arbitration Act 1996 appears in Appendix 1 of this book. Only Part II of the Arbitration Act 1950
remains in force in respect of the enforcement of certain foreign awards: see para.8—020.
67 For the procedure under CPR Pt 62 and the Arbitration Practice Direction see paras 8-178
et seq.
'68 The decision of the House of Lords in Porter v Magill [2001] UKHL 67 is a case in point. That
decision finally decided the test for impartiality. See para.1—051.
tS Premium Nafta Products Ltd & ors v Fili Shipping Co Lid © ors [2007] UKHL 40, per Lord Hope
at [29]-{32]. The court further recognised that the UK, as a centre for international commercial
arbitration cannot risk being isolated internationally by yirtue of its approach to questions of
interpretation of clauses (per Lord Hope at [293}).
169 Appendix | contains the full text of the Arbitration Act 1996.
'70 This is the review mentioned in para.1—001.
“I The text of the Model Law with a commentary on its Articles appears in Appendix 4.
2 Seabridge Shipping v Orssleff [1999] 2 Lloyd’s Rep. 685 at 690.
3 Patel v Patel [1999] 3 W.L.R. 322, per Lord Woolf M.R. at 325. Lord Woolf played a leading role
in the reform of the procedural rules applicable to the civil courts in Englan d and Wales, referred
to as the Woolf Reform.
 Developments in Arbitration Law 21

Although it restates the previous legislation on arbitration with some changes,

the Arbitration Act 1996 also takes account of developments that have occurred in
English arbitration law.'7* Some of those developments occurred as a result of
work undertaken by the United Nations,'’> and two landmarks in that work and
their sequel deserve to be mentioned as well as the former arbitration legislation.
This will be done in chronological order, followed by a reference to the influence
of case law and the preparatory work that preceded the Arbitration Act 1996.
A report has since been made following a survey into how the Act has worked
in practice.'”**

Arbitration Act 1950. For many years this was the principal arbitration Act. 1-044
With the exception of Pt II of that Act,'’° which relates only to the enforcement
ofa certain limited number of foreign awards,'”’ the Arbitration Act 1950 has been
repealed.'’”* Many of its provisions, with modifications, were re-enacted by the
Arbitration Act 1996.

The New York Convention. The Convention for the Recognition and 1-045
Enforcement of Foreign Arbitral Awards, which was made in June 1958 in New
York,'”’ had a profound effect on English arbitration law.'*® Although the United
Kingdom did not accede to the New York Convention until 1975, its enactment by
the Arbitration Act 1975 was to bring about fundamental changes to the law and
practice of arbitration. The effect on domestic arbitration occurred gradually as a
result of the introduction into English law of a temporary distinction between a
‘domestic arbitration agreement’’'*' and a non-domestic or international arbitra-
tion agreement. The changes and their consequences are mentioned in the
following paragraphs.

Arbitration Act 1975. This Act, which implemented the New York Conven- 1-046
tion into English law, limited the discretion of the High Court to stay any action

'74 For example the decision of the Court of Appeal in Harbour Assurance Co (UK) Ltd v Kansa
General International Insurance Co Ltd [1993] 1 Lloyd’s Rep. 455 concerning severability of the
arbitration agreement: see para.2—007.
175 The work had been done in the main by successive working parties established by the Trade
Commission of the United Nations (UNCITRAL). The New York Convention and Model Law
provoked changes and a thorough review of English arbitration law.
1754 Report on the Arbitration Act 1996, Arbitration Int. vol.23, no.3, p.437.
176 Section 99 of the Arbitration Act 1996 preserves Pt II of the Arbitration Act 1950 for this purpose,
see para.8—020.
177 The awards concerned are enforceable under the Geneva Convention.
178 Section 107(2) of the Arbitration Act 1996. There were some transitional provisions.
9 See para.8—021.
180 The New York Convention is described in the DAC report as “the cornerstone of international
disputes resolution” —para.347.
181 The distinction was introduced by the Arbitration Act 1975, s.1(4). It is restated in the Arbitration
Act 1996, s.85(2), although it has been decided not to bring that section into force. Thus, the
distinction has not been preserved: see para.2—005.
 20, Introduction

brought in breach of an arbitration agreement which was not a domestic arbitra-

tion agreement. A stay was mandatory, if one of the parties to a non-domestic
arbitration agreement requested it, unless the court was satisfied that the agree-
ment was null and void, inoperative or incapable of being performed or there was
not in fact any dispute between the parties with regard to the matters agreed to be
referred.'*’ The Arbitration Act 1996 restates this provision except that it follows
the text of the New York Convention and omits the last clause concerning the
absence of a dispute.'** Under the 1975 Act, the High Court maintained a
discretion in respect of domestic arbitration agreements'™* but that changed with
the Arbitration Act 1996. There is no longer a discretion and a stay 1s man-
datory.'*°
The Arbitration Act 1975 also introduced a new category of arbitration award,
namely, the Convention award, which was to extend the special status given to a
“foreign award” some 45 years earlier.'*° The court was required to recognise and
enforce a Convention award except where there was opposition on specific and
limited grounds.'*? The amendments made by the Arbitration Act 1975 as
described in this paragraph revealed a modest change in policy towards party
autonomy in arbitration proceedings and away from court intervention. The
following paragraphs indicate how that policy continued to develop.

1-047 Commercial Court Committee. The subject of judicial review of

arbitration awards was examined by this Committee in 1978. In particular, the
Committee considered the powers of the High Court both to set aside an award if
it appeared from the award itself or from documents incorporated into the award
that the arbitral tribunal had reached some erroneous conclusions of fact or law,
and the power to require the tribunal to state an award or part of it in the form of
a special case for the opinion of the court.'** The former was known as “error on
the face of the award” and the latter as “‘the stated case procedure’. Review for an
error on the face of the award had led to tribunals declining to give reasons for
their awards, and the stated case procedure had resulted in delays while the
opinion of the High Court on the award was awaited. The Committee recom-
mended that these two forms of review be replaced by a new right of appeal
confined to questions of law, leaving decisions on questions of fact to the arbitral
tribunal.

'82 Arbitration Act 1975, s.1(1).

'®3 Arbitration Act 1996, s.9(4): see paras 7-046 and 7-047.
'84 Arbitration Act 1975, s.1(2),
'S* Although the Arbitration Act 1996, s.86(2) re-enacted with amendments s.4 of the 1950 Act, it has
been decided not to bring s.86 into force: see para.2—-005 and footnote.
'®° A “foreign award” is defined in the Arbitration Act 1950, s.35 and includes an arbitral award made
in a State that has acceded to the Convention on the Execution of Foreign Arbitral Awards signed
in Geneva in September 1927, which was enacted by the Arbitration (Foreign Awards) Act 1930 and
re-enacted by the Arbitration Act 1950, Pt Il, which remains in force: see s.99 of the Arbitration
Act 1996,
'87 The grounds were set out in the Arbitration Act 1975, s.5 and are restated in Arbitration Act 1996,
s.103(2): see paras 8-022 er seq.
'88 Commercial Court Committee report on Arbitration, July 1978, Cmnd. 7284.
 Developments in Arbitration Law oR)

Arbitration Act 1979. This Act implemented the recommendations of the 1-048
Commercial Court Committee and gave the High Court a new jurisdiction limited
to determining a question of law arising in the course of the reference'®’ and to
hearing an appeal on a question oflaw arising out of an award provided that certain
conditions were fulfilled.'°® Further, with the exception of three special categories
of cases,'?' which no longer apply,'”’ this new jurisdiction of the court could be
excluded at any time in respect of a non-domestic arbitration agreement if the
parties entered into an agreement in writing to that effect.'?* Now the parties can
at any time and in respect of any arbitration agreement!”* exclude either or both
an application to determine a preliminary point of law and an appeal from any
arbitration award.'”°

UNCITRAL Model Law. This is the other!”® outstanding contribution 1-049

made by the United Nations to international arbitration which has influenced the
development of English law.'?’? The full text of the Model Law on International
Commercial Arbitration'’® which was adopted by the United Nations Commission
on International Trade Law (UNCITRAL) on June 21, 1985 and has since been
amended appears in Appendix 4 to this book with some comments on how
provisions of the Model Law have been incorporated into the Arbitration Act
1996. The DAC reports'”’ contain a comprehensive review of the UNCITRAL
Model Law, and the following chapters of this book cross refer by way of footnote
the sections of the Arbitration Act 1996 with various Articles of the Model
Law.

Case law. The changes introduced by the Arbitration Acts 1975 and 1979 were 1-050
duly implemented by the courts. The Judicial Committee of the House of Lords
led the way in a series of judgments that affected various stages of the arbitration
proceedings. A clause containing an arbitration agreement was enforced and court
proceedings stayed even though the words of s.1 of the Arbitration Act 1975, then

'89 Arbitration Act 1979, s.2(1) restated in the Arbitration Act 1996, s.45: see paras 7-165 et seq.
190 Arbitration Act 1979, s.1 restated in the Arbitration Act 1996, s.69, paras 8-119 ed seq.
191 Arbitration Act 1979, s.4(1) The special category of cases concerned a question or claim falling
within the Admiralty jurisdiction of the High Court (maritime disputes) and disputes arising out
of a contract of insurance or a commodity contract, as defined in subs.4(2) of the 1979 Act.
192 The special category cases were not retained in the Arbitration Act 1996, so the exception no longer
applies.
193 Arbitration Act 1979, s.3(1). Even in domestic cases the jurisdiction could be excluded by
agreement after the dispute had arisen.
4 See 5.6 of the Arbitration Act 1996 for the definition of arbitration agreements under the Act.
195 The distinction between domestic and non-domestic arbitration agreements is no longer in force
(see para.2—005).
19 The New York Convention referred to above was the first major contribution which has been made
by the United Nations to international arbitration.
197 The structure and content of the Arbitration Act 1996 owes much to the Model Law: see the DAC
report, para.4 reproduced in Appendix 2.
198 The UNCITRAL Model Law should not be confused with the UNCITRAL Rules of Arbitration.
Both are products of the United Nations Commission on International Trade Law.
199 See para.1—053.
 24 Introduction

in force, did not literally require a stay.*°? The proposition that the High Court
had an inherent jurisdiction to supervise the conduct of an arbitration beyond the
powers then contained in the Arbitration Acts 1950-1979 was rejected by the
House of Lords with a statement that the tribunal was the master of the procedure
to be followed in the arbitration.””!
Strict guidelines were established for the High Court to follow in deciding
whether to grant leave to appeal against a question of law arising out of an award
made in England.*” Further, in respect of New York Convention awards, the
courts demonstrated a willingness to recognise and enforce an award as such even
though the State where the arbitration took place was not a party to the New York
Convention when the award was made?” and despite evidence that the award was
not made in the place intended by the parties to the arbitration agreement.*”*

1-051 Some leading decisions. Case law continues to play an important role in
the development of arbitral law. The courts have approved a broad approach to the
construction of an arbitration clause and have endorsed the separability of that
clause from the rest of the contract.”°* The test for apparent bias has been restated
by the House of Lords,”®° and a distinction made between excess of powers and a
mistaken exercise of an arbitrator’s power.*”° The use of an anti-suit injunction to
restrain a party to an arbitration agreement from commencing or prosecuting
court proceedings in another Member State has been referred by the House of
Lords to the European Court of Justice for a ruling.*°’ The subject of illegality has
twice been considered by the Court of Appeal in the context of enforcing an
arbitration award*”* and the subject of joinder has been considered by the Privy
Council.*°”’ The courts have also been required to give effect to changes intro-
duced by the Arbitration Act 19967'° and other legislation.?"!

1-052 Pre-1996 decisions. Caution has been expressed by the court about the use
of cases that pre-date the Arbitration Act 1996.

“Reference to such cases should only generally be necessary in cases where the Act does
not cover the point—as, for example, in relation to confidentiality or where for some

20° Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] 1 All E.R. 664.
2°! Bremer Vulcan Schiffbau und Maschinenfabrik v South India Shipping Corp [1981] 1 All E.R. 289.
*? Pioneer Shipping BTP Tioxide Ltd (The “Nema”’) [1981] 3 W.L.R. 292 and The ‘‘Antaios” [1985]
A.C. 191. These guidelines have been codified by the Arbitration Act 1996, s.69(3).
203 Kyau Minister of Public Work v Sir Frederick Snow & Partners [1984] 1 All E.R. 733.
24 Hiscox v Outhwaite (No.1) [1991] 3 All E.R. 641.
2049 Premium Nafia Products Lid & ors v Fili Shipping Co Lid & ors [2007| URHL 40.
205 Porter v Magill [2001] URHL 67—see paras 4-110 et seq.
26 Lesotho Highlands Development Authority v Impregilo SpA [2005] UKHL 43.
207 West Tankers Inc v RAS Riunione (The ‘Front Comor’’) [2007] UKHL 4.
208 Solemany v Soleimany [1998] 3 W.L.R. 811 and Westacre Investment Inc v Jugoimport—SPDR Lid
[1999] 2 Lloyd’s Rep. 65. See para.8—032 and para.8—033.
°° The Bay Hotel and Resort v Cavaher Construction Co Ltd [2001] UKPC 34.
*!° Decisions on s.68 (challenging the award for serious irregularity) are a good example—see paras
8-072 et seq.
7! For example, the Human Rights Act 1998—see para.1—038.
 Developments in Arbitration Law 25

other reason it is necessary to refer to the earlier cases—a court should, in general,
comply with the guidance given by the Court of Appeal and rely on the language of the
Kot

This book does refer to a few cases that were based on the old law. They are not
strictly limited to cases where the Act does not cover the point. They are
occasionally used to illustrate situations, particularly where those points have not
been considered by the court since the 1996 Act came into force. In other areas,
such as challenges to awards, reference to the pre-1996 case law, which applied a
different regime, is no longer appropriate.

The DAC reports. In 1987 an Advisory Committee of the Department of 1-053

Industry (“the DAC”’) was established to consider the UNCITRAL Model Law
and to examine the operation of the Arbitration Acts 1950-1979 in the light of that
Model Law.*'? In 1989, the DAC recommended that England and Wales should
not adopt the Model Law but should have a new and up-to-date Arbitration Act
which in general applied to domestic and international arbitrations alike.*!* In
1994, a consultation paper was published together with a draft arbitration bill.
Following a period of consultation*'> a new draft arbitration bill was circulated for
public comment in July 1995. The Arbitration Act 1996 is based on that bill.
A further report of the DAC was published in February 19967'° which com-
mented clause by clause on the Arbitration Bill. A supplemental report followed
in January 1997.7!” These two reports have been referred to with approval by the
court,”'* and are of considerable assistance with regard to the interpretation of the
Arbitration Act 1996.7!”

Party autonomy—the perception. The public policy summarised in 1-054

the comment: ‘‘There must be no Alsatia in England where the King’s writ does
not run,”””° no longer applies to English arbitration law. Not only has party
autonomy been formally enshrined in the Arbitration Act 1996,77' but it is also

212 Seabridge Shipping v Orssleff [1996] 2 Lloyd’s Rep. 685 at 690. See also Lesotho Highlands v Impregho
SpA [2005] UKHL 43.
213 Departmental Advisory Committee on Arbitration law, A Report on the UNCITRAL Model Law
on International Commercial Arbitration 1989 (the “DAC Committee Report” 1989), Terms of
Reference, p.1. The text of the Model Law with a commentary on its Articles appears in Appendix
B:
214 The DAC report (1989) at 34.
215 Consultation Paper dated February 1994.
216 The DAC report on the Arbitration Bill of February 1996, referred to in this book as the DAC
report, Appendix 2.
217 The DAC supplementary report on the Arbitration Act 1996 dated January 1997 is also at Appendix
a
218 The reported decisions that have quoted the DAC reports are too many to enumerate, but many of
them are referred to in Cetelem SA v Roust Holding Ltd [2005] EWCA Civ 618.
219 The DAC report and supplementary report are also reproduced in Appendix 2. CPR Pt 62, the
Arbitration Practice Direction and the allocation and commencement orders are at Appendix 1.
220 Czarnikow v Roth Schmidt and Co [1922] 2 K.B. 478, per Scrutton L.J.
221 Section 1(b) of the Arbitration Act 1996 is in effect a statement of the principle of party autonomy.
It is reinforced by the following subs.1(c) which restricts court intervention.
 26 Introduction

applied in practice. In most cases, the agreement to arbitrate is recognised and

indirectly enforced by means of a stay, the tribunal is left alone to conduct the
reference and to determine the dispute, the award is not reviewed and it is
summarily enforced. The powers of intervention of the Court have been curtailed
and are identified in the Arbitration Act 1996.*”? The DAC reports** indicate how
the courts should apply the Arbitration Act 1996. There continue to be applica-
tions to the court, particularly while there is a need to clarify some provisions of
the Act,??* but the decisions made after the Act reveal’*° that the spirit of the
legislation as expressed by the DAC is being adhered to, and the scope for
interference with the arbitral process is very limited.

10. SUMMARY OF FOLLOWING CHAPTERS

1-055 The rest of the book. This introduction is intended to whet the appetite for
the subject of arbitration. What follows is an explanation of the modern law and
practice of arbitration in England. The chapters have been arranged so as to lead
the reader from the beginning to the end of an arbitration and to enable him to
pick out particular aspects of interest.

1-056 Chapter 2 examines all aspects of the arbitration agreement (often referred to
simply as the arbitration clause) and contains a checklist for the draftsman. What
formalities are needed? How important are the terms of the arbitration agreement
or arbitration clause? When and how can they be varied? How does the choice of
the place or “‘seat’’’*® affect the law of the arbitration?

1-057 Chapter 3 is devoted to the parties and institutions. Who can and cannot enter
into an arbitration agreement? How should one verify the capacity of a proposed
party for the purposes both of entering into an arbitration agreement and of
executing on assets? What changes (e.g. bankruptcy) might occur before and
during the arbitration proceedings and what can be done about them?

222
Section l(c) of the Arbitration Act 1996 provides that the court should not intervene in matters
governed by Pt I of the Act except as provided by that Part of the Act, although the court does retain
a limited inherent jurisdiction. See paras 7-003 et seq.
*3'The DAC report, as supplemented, expresses clear views on how the courts should approach the
Arbitration Act 1996.
4 As in, e.g. McLean Homes SE Ltd v Blackdale, unreported, November 2, 2001 QBD (TCC),
H. Lloyd Q.C. and North Range Shipping Ltd v Seatrans Shipping [2002] EWCA Civ 405.
225
Permission to appeal may have been given too readily on occasion, but information given by Colman
J. in his lecture “Arbitrators and Judges—How much interference should we tolerate?” (March 14,
2006) suggests that judges have followed the dictate of the House of Lords in Lesotho Highlands,
ibid., [2005] UKHL 43 that the purposes of the Arbitration Act is to reduce dramatically court
intervention.
226
See Arbitration Act 1996, s.3 for a definition of the “seat” of an arbitration and paras 2-102
et Seq.
 Summary of Following Chapters pe

Chapter 4 addresses the subject of the arbitral tribunal. How is a tribunal 1-058
appointed, and when is an appointing authority needed? When are particular
qualifications required? What of the tribunal’s powers, duties and liabilities? How
and when does the authority of the tribunal come to an end? How are fees
determined?

Chapter 5 considers the ways in which arbitration proceedings are conducted. 1-059
When and how are these proceedings (the reference) commenced? What matters
need to be considered and at what stage of the reference? What procedure should
be adopted in the reference? Is there to be a hearing? If so, how is it to be
conducted? How is the reference terminated?

Chapter 6 concentrates on the award. What are the formal and substantive 1-060
requirements for a valid award? What relief and remedies may a tribunal award?
How are the costs of the reference and the award assessed? What is the effect, if
any, of an award on the parties to the reference and on third parties?

Chapter 7 focuses on the role of the English court before and during the 1-061
arbitration. Will the court stay legal proceedings brought in breach of an arbitra-
tion agreement? How and when may the court intervene in an arbitration during
the reference and for what purpose? What interim measures are available? How are
disputes about recoverable costs to be resolved?

Chapter 8 concludes with the role of the court after the award has been made. 1-062
How can that award be enforced? How can it be challenged? Is there a right of
appeal? What are the grounds?
In the last section of Ch.8, there is a description of the procedure for arbitration
applications with cross-references to the relevant rules.

Appendices. There are several Appendices, consisting of (1) the Arbitration 1-063
Act 1996 and CPR Pt 62 and the Arbitration Practice Direction with court forms,
(2) the DAC report, February 1996 and the DAC supplementary report of January
1997, (3) a description of Statutory Arbitration, (4) an annotated version of the
UNCITRAL Model Law, and (5) a list of appointing authorities.
At the front of the book there is also a glossary which includes the abbreviations
that are used throughout the book and particularly in the footnotes.
 CHAPTER 2

Tue ARBITRATION AGREEMENT

1, INDRODUCTION:...c.-.0-.0004= 2-001 (b) Scope of the arbitration

AP LECINENG :20-s0 02355: 2-071
2. Wuat Is AN ARBITRATION (c) Specific wordings..... 2-074
AGREEMENT?......... seen 2-002 (d) Particular types of
OES iean reinnonyel dispute....ceeseeseseee 2-083
arbitration agree-
MEN bageccyvosteeeeteas 2-002 5. Laws To BE APPLIED TO AN
(b) Separability of the NRBIURATION( .:esccsaceeceees 2-087
arbitration agree- (a) Introduction............. 2-087
EIDEMAGes each cess: 2-007 (b) The rules governing
(c) Arbitration agree- the substance of the
ments falling outside dispenses arene 2-090
the 199 63Actttiee.. 2-015 (c) The law of the arbi-
(dq) Mutuality...27....... 2-017 tration agreement... 2-094
(C)MNV aliaionsrrccs sarc 2-019 (d) The “‘seat” of the
(f) Conditions precedent 2-021 arbitration and the
(g) Other types of clauses procedural law........ 2-100
distinguished .......... 2-024
6. TERMINATION OF THE
3. ForM OF AN ARBITRATION ARBITRATION AGREE-
INGREEMENDg2s--ssercessesoeu 2-038 IEEE ohare sa eee = Ree 215110
(a) “A written agree- (a) Termination by agree-
MCIIU Pecos ene: eee 2-038 MINOT se eeeocnorecectesseus 2-110
(b) Incorporation by ref- (b) Repudiation of the right
SIRENS a qoeccuooneannss-ct 2-044 {O,anbitnate. ..s-c--0e 2-111
(c) Abandonment of the
. CONTENT OF AN ARBITRA- 1c
4 ACONTENIDION arbitration agree-
TION AGREEMENT ........-- 2-058 >
: é INGLE SS Maree 2-114
(a) Drafting the arbitra-
tion agreement........ 2-058

1. INTRODUCTION

2-001 Contents of the chapter. This chapter is concerned with the arbitration
agreement. It begins by considering what constitutes an arbitration agreement.
This involves examining the statutory definition, the nature of an arbitration
agreement and different types of arbitration agreements. It also considers how an
arbitration agreement is distinguished from other types of dispute resolution
clause. The next two sections examine respectively the form and content of an
arbitration agreement. There is clearly an overlap between the two, but the
meaning of an agreement in writing for the purposes of the Arbitration Act 1996
 What is an Arbitration Agreement? 29

and incorporation of arbitration agreements by reference to other documents are

dealt with in the former section. The section dealing with the content of the
arbitration agreement provides a checklist of the matters to be included as well as
considering the scope of the arbitration agreement and different wordings com-
monly used in arbitration agreements. The laws to be applied to the arbitration are
then examined. Finally, the chapter looks at how the arbitration agreement may be
terminated.

2. WHAT IS AN ARBITRATION AGREEMENT?

(a) Statutory definition of arbitration agreement

Definition in the 1996 Act. Section 6 of the Arbitration Act 1996 contains 2-002
a definition of an arbitration agreement.’ It provides that an arbitration agree-
ment is “‘an agreement to submit to arbitration present or future disputes (whether
they are contractual or not)”. An arbitration agreement is therefore a contractual
undertaking by two or more parties to resolve disputes by the process of arbitra-
tion,* even if the disputes themselves are not based on contractual obligations.*
The term “disputes” includes ‘any difference”’.* It is important to note also:

(1) The Arbitration Act 1996 will only apply to an arbitration agreement if it
is in writing or evidenced in writing.°

(2) Reference to a written form of arbitration clause or to a document

containing an arbitration clause constitutes an arbitration agreement if the
reference is such as to make that clause part of the agreement.’

Agreement to submit present or future disputes. It is clear from 2-003

the definition set out above that the term “arbitration agreement” covers both (i)
an arbitration clause in a contract (or matrix agreement) by which the parties agree

' The definition applies to Pt I of the Arbitration Act 1996. It does not therefore apply to arbitration
agreements that fall outside the Arbitration Act 1996, e.g. because they are not made in writing, or
to statutory arbitration, which is dealt with in Appendix 3.
? Section 6(1) of the Arbitration Act 1996.
3 An arbitration agreement is not contrary to Art.6 of the European Convention on Human Rights:
Stretford v Football Association [2007] EWCA Civ 238 at [34]. See further para.1—039 above.
+ eg. disputes involving tort claims: see para.2—004 below.
5 Section 82(1)of the Arbitration Act 1996. The DAC report explained that there was some authority
for the proposition that “difference” is wider than “dispute”: see para.41 of the DAC report. See
also dicta in Amec Civil Engineering Ltd v Secretary ofState for Transport [2005] 1 W.L.R. 2339
suggesting the words “dispute or difference”” might mean something more than “dispute” alone.
® Section 5(1) of the Arbitration Act 1996: see paras 2-038 er seq. below.
7 Section 6(2) of the Arbitration Act 1996: see paras 2-044 et seq. below.
 30 The Arbitration Agreement

that disputes between them in the future arising out of that contract will be
referred to arbitration and (ii) a separate agreement not forming part of another
contract to refer an existing dispute to arbitration. This separate agreement,®
sometimes known as a “‘submission agreement’”’ or an ad hoc agreement,'° deals
only with the setting up of machinery to resolve the particular dispute which has
arisen between the parties.

2-004 Non-contractual claims. The statutory definition of an arbitration agree-

ment!! makes clear that disputes may be referred to arbitration whether they arise
in contract or otherwise. Accordingly, claims based on a cause of action arising in
tort, restitution, breach of a statutory duty or some other non-contractual cause of
action may fall within an arbitration agreement. Provided the terms of the
arbitration agreement are broad enough to encompass such claims they can in
principle be the subject of an arbitration. Whether they do so in any particular case
requires an examination of the arbitration agreement but the courts have generally
given a broad interpretation to the scope of arbitration agreements in this regard.'?
In this context it may be possible to conclude that the non-contractual claims are
so intimately connected with a contract that even an arbitration clause designed
primarily for contractual claims will extend to connected non-contractual claims."
In Asghar v Legal Services Commission claims for conspiracy, misfeasance in public
office and inducement to commit breach of conduct were all found to be within
the arbitration agreement because “the resolution of the contractual claims cannot
sensibly or practically be divorced from the resolution of the non-contractual
claims.”'* Many such cases relate to claims in tort'> based on breach of a duty of
care which arises under a contract and an arbitration agreement which covers
disputes “arising out of” a contract will be wide enough to include such tort
claims.'°
The Court of Appeal in Fiona Trust v Primalov has stated that it is time for ‘“‘a
line of some sort to be drawn and a fresh start made” in relation to the fine and
sometimes inconsistent distinctions previously made on the basis of particular

* The importance of ensuring that clear agreement has been reached was underlined in LG Caltex
Gas Co Lid v China National Petroleum Corp [2001] 1 W.L.R. 1892 where the Court of Appeal held
that no separate agreement had in fact been entered into.
’ See also Art.7.1 of the Model Law at Appendix 4.
1 See para.2—006 below.
'' Section 6(1) of the Arbitration Act 1996; the words “... disputes (whether they are contractual
or not)” were not in the statutory predecessor, s.32 of the Arbitration Act 1950.
"2 See para.2-075 below.
'S Woolfv Collis Removal Service [1948] 1 K.B. 11, For arbitration of the tort of conspiracy, see Lonrho
Lid v Shell Petroleum Co Ltd, The Times, February 1, 1978, Ch D, Brightman J.
'4 [2004] EWHC 1803 at [18].
' See further para.2—075 below.
'° The “Playa Larga’’ [1983] 2 Lloyd’s Rep. 171; The ‘“Ermopoulis” [1990] 1 Lloyd’s Rep. 160; The
“Angelic Grace” |1995] 1 Lloyd’s Rep. 87; Abdullah M Fahem & Co v Mareb Yemen Insurance Co
and Tomen (UK) Lid [1997] 2 Lloyd’s Rep. 738. See further para.2—-078 below. Similarly claims for
breach of duty as a bailee would be covered.
 What 1s an Arbitration Agreement? |

wordings used in arbitration agreements.'’ Consistent with that general instruc-

tion, although some analysis of the nature of the non-contractual claims being
made and the terms of the particular arbitration agreement will be necessary it
seems likely that the sort of distinctions previously encountered!* will be replaced
by a broader approach to construing arbitration agreements as widely as their
terms reasonably permit. Whatever the wording of the arbitration agreement, non-
contractual claims may of course become part of the reference if they are included
in a pleading and no point is taken by the other party, even if there had originally
been no contractual relationship between the parties.!”

Domestic arbitration agreements. There were restrictions imposed 2-005

under the previous law in relation to domestic arbitration agreements. These
restrictions affected the right to obtain a stay of legal proceedings brought in
breach of an arbitration agreement and meant that parties were permitted to
exclude the right to a determination by the court of a preliminary point of law or
the right to appeal only after the arbitration had begun.”° This is no longer the
case. The distinction between domestic and international arbitration agreements
which applied under previous legislation is no longer effective.”!

Meaning of ‘“‘ad hoc’’. Although it is not referred to specifically in the 2-006

legislation, the expressions “‘ad hoc arbitration” or ‘tad hoc submission” are
sometimes used to describe an agreement to refer an existing dispute to arbitra-
tion, as contrasted with an arbitration agreement providing for future disputes to
be so referred.” This should not be confused with the quite different sense in
which the phrase “‘ad hoc arbitration” is also used, namely to signify an arbitration
conducted without an arbitration institution administering the proceedings or
supplying the procedural rules for the arbitration. This second sense is more
common in international arbitrations.

7 Fiona Trust & Holding Corp © ors v Yuri Privalov & ors [2007] EWCA Civ 20 at [17]. Affirmed
in Premium Nafia Products Ltd v Fili Shipping Co Ltd [2007| UKHL 40 at [12] where Lord
Hoffmann, applauding the Court of Appeal’s decision said that the linguistic distinctions drawn in
earlier cases “reflect no credit upon English commercial” law.
'8 See para.2-076 below.
19 Almare Societa di Navigazione SpA v Derby & Co Lid (The ‘‘Almaea Prima”’) {1989] 2 Lloyd’s Rep.
376. The right to object would be lost under s.73 of the Arbitration Act 1996.
20 Under s.1 of the Arbitration Act 1975.
21 Sections 85, 86 and 87 of the Arbitration Act 1996 have not been brought into force: The
Arbitration Act 1996 (Commencement No.1) Order 1996 (SI 1996/3146). A decision has been taken
that they will not be brought into force. The press release issued by the Department of ‘Trade and
Industry on January 30, 1997 quoted the Corporate and Consumer Affairs Minister, John Taylor,
as saying: “... I have also decided that all arbitrations, whether domestic or international, should
be treated in the same way ... This means the court will no longer have discretion to order legal
proceedings to be stayed or halted if there is a valid arbitration agreement. Also, parties are now free
to enter into an agreement at any time that they will not involve the courts on point [sic] of
”
law.
See also DAC supplementary report on the Arbitration Act 1996, January 1997, para.47—50 at
Appendix 2.
22 See, e.g. LG Caltex Gas Co Ltd v China National Petroleum Corp [2001] 1 W.L.R. 1892, although
in that case the Court of Appeal held that no ad hoc agreement had in fact been entered into.
 32 The Arbitration Agreement

(b) Separability of the arbitration agreement

2-007 The doctrine of separability. An arbitration agreement specifies the

means whereby some or all disputes under the matrix contract in which it is
contained are to be resolved. It is however separate from the matrix contract: “An
arbitration clause in a commercial contract ... is an agreement inside an
agreement. The parties make their commercial bargain ... but in addition agree
on a private tribunal to resolve any issues that may arise between them.”** This is
known as the doctrine of separability and s.7 of the Arbitration Act 1996 provides
a statutory codification of the previous case law on this subject.** As the House of
Lords noted in Lesotho Highlands v Impregho SpA, “‘it is part of the very alphabet
of arbitration law as explained in Harbour Assurance Co (UK) Ltd v Kansa General
International Insurance Co Ltd... and spelled out in section 7 of the Act, the
arbitration agreement is a distinct and separable agreement from the underlying or
principal contract”’.?°

2-008 Statutory provision for separability. Section 7 provides that “unless

otherwise agreed by the parties, an arbitration agreement which forms or was
intended to form part of another agreement (whether or not in writing) shall not
be regarded as invalid, non-existent or ineffective because that other agreement is
invalid, or did not come into existence or has become ineffective, and it shall for
that purpose be treated as a distinct agreement.”*° This provision confirms by
statute the separability doctrine which had evolved in the earlier case law.?’ In
particular the use of the words “or was intended to form part of another
agreement” make clear that even if the matrix contract never came into existence,

* per Saville J. in Union of India v McDonnell Douglas Corp [1993] 2 Lloyd’s Rep. 48.
*4 See in particular Heyman v Darwins Ltd [1942] A.C. 356 and Harbour Assurance Co (UK) Ltd v
Kansa General Insurance Co Ltd (1993) 1 Lloyd’s Rep. 455. See also Model Law, Art.16(1) (see
Appendix 4). See para.2—008 below.
> (2006) 1 A-G. 221 at [21}.
*° Section 7 of the Arbitration Act 1996: cf. Model Law, Art.16(1), see Appendix 4,
*7 The House of Lords rejected the theory that an arbitration clause is terminated by breach of the
contract of which it forms part in Heyman v Darwins Ltd [1942] A.C. 356. They held that neither
repudiation nor accepted repudiation entails the termination of the obligation to refer disputes to
arbitration. On the contrary, the injured party can insist on having the consequences of the
repudiation assessed by arbitration. The reasoning behind the doctrine of separability was that the
arbitration clause constitutes a self-contained contract collateral or ancillary to the underlying or
matrix contract: Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corp Ltd
[1981] 1 Lloyd’s Rep. 253 at 259. It had long been held that an arbitration agreement can continue
to be implied as one of the terms of the relationship between parties after the formal expiry of an
agreement between them containing an arbitration clause. ‘Typically, this is the case with leases and
partnership deeds: see Morgan v William Harrison Ltd [1907] 2 Ch. 137; Cope v Cope (1885) 52 L.T.
607; and Gisborne Harbour Board v Spencer [1961] N.Z.L.R. 204 at 211. Case law went on to confirm
that an arbitration clause could also survive invalidity of the underlying contract: Harbour Assurance
Co (UK) Ltd v Kansa General Insurance Co Ltd [1993] 1 Lloyd’s Rep. 455. The Court of Appeal
have recently confirmed the position in Fiona Trust & Holding Corp © ors v Yuri Privalov & ors
[2007] EWCA Civ 20 affirmed by the House of Lords in Premium Nafta Products Ltd v Fili Shipping
Co Lid [2007] UKHL 40. See also Peter Gross Q.C., “Separability Comes of Age in England:
Harbour v Kansa and Clause 3 of the Draft Bill” (1995) 11 Arbitration Int. 85.
 What is an Arbitration Agreement? wowWw

the arbitration agreement may still be binding.*® Similarly, the fact that the matrix
contract subsequently fails or is found to be invalid or never to have come into
existence will not of itself mean that the arbitration agreement is necessarily
undermined also.*’? Section 7 of the Arbitration Act 1996 applies where the law
applicable to the arbitration agreement is the law of England and Wales or
Northern Ireland even if the seat of the arbitration is outside England and Wales
or Northern Ireland or has not been designated or determined.*”

Consequences of separability. The doctrine of separability underlines 2-009

the potential width of an arbitration agreement because it establishes that an
arbitration agreement has a separate life from the matrix contract for which it
provides the means of resolving disputes. This enables the arbitration agreement
to survive breach or termination of the matrix contract of which it forms part. The
consequence of this separate existence is that even if the matrix contract has been
brought to an end, for example by accepted repudiation or frustration, the
arbitration agreement continues in being in order to deal with any disputes in
respect of liabilities under the matrix contract arising before or after termina-
tion.*!

Invalidity of matrix contract. Section 7 of the Arbitration Act 1996 2-010

enables the arbitration agreement to survive not just termination or breach of the
matrix contract but also more serious defects. Unless otherwise agreed by the
parties, the arbitration agreement may survive as a distinct agreement even if the
contract in which it is contained is regarded as invalid, non-existent or ineffec-
tive.** The validity of the matrix contract may therefore be determined by
arbitration in accordance with the arbitration agreement, and the resulting award
will be enforceable, even if the tribunal determines that the matrix contract is
invalid.

Void contracts. Similarly, even where the matrix contract is held to be void, 2-011
the arbitration agreement which forms part of it may still be upheld as a valid and

28 In Glaxosmithkline Ltd v Department ofHealth [2007] EWHC 1470 it was alleged that the parties
had entered into a purely non-binding and voluntary agreement such that there was no intention
to create legal relations. Accordingly it was said that, notwithstanding the doctrine of separability,
the arbitration agreement was no more binding than the larger whole of which it formed part, such
that there was no “award” for the purposes of an appeal under s.69 of the Arbitration Act 1996. The
court found that there was no agreement between the parties that the award should not be final and
binding so as to displace ss.58 and 66 of the Arbitration Act 1996, the effect of which was that an
award is binding and enforceable.
2° See paras 2-051 et seq. below.
3° Section 2(5) of the Arbitration Act 1996.
31 Such as claims for sums accrued due prior to termination or claims in respect of post-termination
obligations. See generally DDT Trucks of North America Ltd v DDT Holdings Ltd [2007] EWHC
1542. See also Kruse v Questier & Co Ltd [1953] 1 Lloyd’s Rep. 310; Heyman v Darmins [1942] A.C.
356; Government of Gibraltar v Kenney and Another [1956] 2 Q.B. 410.
32 See also Fiona Trust Holding Corp & ors v Yuri Privalov & ors [2007] EWCA Civ 20 athirmed
in Premium Nafta Products Lid v Fili Shipping Co Ltd [2007] UKHL 40.
 34 The Arbitration Agreement

independent agreement, so that any disputes must be referred to arbitration.** As

Colman J. put it in Vee Networks Ltd v Econet Wireless International Ltd: “If, in
accordance with s.7 [of the Arbitration Act 1996], an arbitrator determines that the
matrix contract is, for example, void ab initio by reason ofillegality and it is not
in issue whether the arbitration agreement is also illegal and void, the tribunal can
continue to exercise such jurisdiction under the arbitration agreement as its scope
permits. For example, if there were an alternative claim in tort or for restitution
which was within the scope of the clause, the tribunal would continue to have
jurisdiction conclusively to determine that claim.”**

2-012 Invalidity of arbitration agreement. The position differs however

where the arbitration agreement itself is impeached** or the existence of an
arbitration agreement is disputed.*° In these circumstances, if the matter comes
before the court,*’ the question of jurisdiction may never reach the arbitrators
because it will be determined the court.** In this regard the court draws a
distinction between disputes as to the existence of the arbitration agreement,
which are likely to be for the court, and disputes as to its validity, which wherever
possible should be left to the tribunal.*? However if the argument that there is no
jurisdiction because the arbitration agreement itself is invalid or non-existent, the
tribunal may decide that question*® but its decision will not be conclusive and can
be reviewed by the court.*! It is only in exceptional circumstances however that the
arbitration agreement itself will be impugned and, as stated above, attacks on the
matrix contract will not generally suffice to prevent the arbitration agreement
being upheld as conferring jurisdiction on the tribunal to determine the parties’
disputes.*” For example, in Fiona Trust v Privalov® allegations of bribery were
raised in general terms but not so as to specifically impugn the arbitration
agreement. The court upheld the application of the arbitration agreement by
declining to decide the question of jurisdiction itself and referring the matter
instead to the arbitrators:

*’ Vee Networks Lid v Econet Wireless International Ltd [2004] EWHC 2909; [2005] 1 Lloyd’s Rep.
192.
** 12004] EWHC 2909; [2005] 1 Lloyd’s Rep. 192 at [21].
* Harbour Assurance Co (UK) Ltd v Kansa General Insurance Co Ltd [1993] 1 Lloyd’s Rep. 455; Vee
Networks Ltd v Econet Wireless International Ltd [2004] EWHC 2909.
*° See, e.g. Cigna Life v Intercaser SA [2002] 1 All E.R. (Comm) 235 where it was held that a contract
of re-insurance did not incorporate an arbitration agreement in respect of two of the parties to
proceedings. See also Phoenix Finance v FIA [2002] EWHC 1028; Anglia Oils Ltd v Owners and/or
Demise Charterers of the Marie Champion [2002] EWHC 2407; Albon v Naza Motor Trading Sdn
Bhd (No.3) {(2007| EWHC 327.
*’ For example on an application to stay under s.9 of the Arbitration Act 1996, see para.7—024
below.
** As in Albon v Naza Motor Trading Sdn Bhd (No.3) [2007] EWHC 327.
*° See paras 7-028 er seq. below.
Under s.30 of the Arbitration Act 1996,
" Under s.67 of the Arbitration Act 1996 which is a mandatory provision pursuant to s.4(1) and Sch.]
of the Arbitration Act 1996; see for example LG Caltex Gas Co Ltd v China National Petroleum Corp
[2001] EWCA Civ 788. See generally paras 8-054 et seq.
* See paras 2-010 above and 7-030 below.
** [2007] EWCA Civ 20, affirmed in Premium Nafta Products Ltd v Fili Shipping Co Ltd [2007] UKHL
40.
 What 1s an Arbitration Agreement? 35

“If the arbitrators can decide whether a contract is void for initial illegality, there is no
reason why they should not decide whether a contract has been procured by bribery, just
as much as they can decide whether a contract has been procured by misrepresentation
or non-disclosure. Illegality is a stronger case than bribery which is not the same as non
est factum or the sort of mistake which goes to the question of whether there was any
agreement ever reached. It is not enough to say that the bribery impeaches the whole
contract unless there is some special reason for saying that the bribery impeaches the
arbitration clause in particular.”’4

By contrast, where it was alleged that the signature of one of the parties to the
matrix contract had been forged, and hence no matrix contract or agreement to
arbitrate had been reached, then this was a question going to whether there was
any agreement ever reached and would be decided by the court.

Illegality affecting the contract. This question of invalidity of the 2-013

arbitration agreement has arisen in a number of cases concerning contracts alleged
to be void by virtue of illegality,*® and the courts examine whether the particular
form of illegality renders not just the matrix contract but also the arbitration
agreement void. This involves a consideration of the purpose and policy of the
rule of illegality and whether this would be defeated by allowing the issue to be
determined by arbitration.*” In Soleimany v Soleimany* Waller L.J. noted*’ that:
“There may be illegal or immoral dealings which are, from an English law
perspective, incapable of being arbitrated because an agreement to arbitrate them
would itself be illegal or contrary to public policy under English law.” However,
in that case the Court of Appeal found the arbitration agreement to be valid
notwithstanding that the resulting award upholding the contract was unenforce-
able due to illegality.*° In contrast, in O'Callaghan v Coral Racing Ltd,*' the same
court was faced with a clause in a gaming contract under which disputes were to
be referred for arbitration to the editor of The Sporting Life. The court held that
the illegality of the contract meant that any claim was bound to fail owing to the
transaction being null and void under s.18 of the Gaming Act 1845, and the
“arbitration clause”? could not survive independently.

Application of terms of matrix contract. The doctrine of separ- 2-014

ability does not prevent the application to the arbitration agreement of provisions

4 Fiona Trust & Holding Corp & ors v Yuri Privalov & ors (2007| EWCA Civ 20 at [29], affirmed in
Premium Nafta Products Ltd v Fili Shipping Co Ltd [2007] UKHL 40.
45 As in Albon v Naza Motor Trading Sdn Bhd (No.3) (2007| EWHC 327.
+6 Several have been concerned with the enforcement of arbitration awards made pursuant to contracts
alleged to be illegal: see paras 8-031 et seq.
47 ner Hoffmann L.J. in Harbour Assurance Co (UK) Ltd v Kansa General Insurance Co Ltd (1993) |
Lloyd’s Rep. 455 at 469.
4811999] Q.B. 785.
RAO.
5° The contract was found to be contrary to the revenue laws and export controls of the country of
performance.
51 The Times, November 26, 1998. For further background on the wider circumstances of the case, not
relevant to the separability of the agreement to arbitrate, see Locabail (UK) Lid & Others v Bayfield
Properties and Others [2000] Q.B. 451, [98] et seq.
 36 The Arbitration Agreement

in the matrix contract which are stated to apply to all clauses of the matrix
contract.°* So for example if variations of any clause in the matrix contract are
required to be in writing, that will apply equally to the arbitration clause as to
other provisions of the matrix contract.°? ;

(c) Arbitration agreements falling outside the 1996 Act

2-015 Oral arbitration agreements. An oral agreement to arbitrate, sometimes

known as a parol submission, is valid as a matter of English law®* but are not
subject to the provisions of the of the Arbitration Act 1996.°° Oral agreements
were outside the scope of previous legislation because of the definition of an
arbitration agreement.*° The Arbitration Act 1996°’ contains a much broader
definition of writing and some agreements which would previously have been oral
agreements are now treated as “‘in writing” for the purposes of the Act.°* The
statute also makes it difficult to participate in arbitration proceedings arising out
of an arbitration agreement which is alleged to be oral without it being construed
as an agreement in writing.*’ An oral agreement to arbitrate is unusual in most
modern commercial contexts.°° Where the whole of the contract, including the
agreement to arbitrate, is oral, the existence and validity of the entire contract may
also be in doubt.°' Clearly therefore oral agreements to arbitrate should be avoided
by reducing them to writing so that they will fall within the terms of the 1996
Act.

2-016 Implied agreement to refer existing disputes to arbitration.

An agreement to refer existing disputes to arbitration can in some cases be implied
by the conduct of the parties. Where a party denies that it has entered into an
agreement to arbitrate, the court will consider whether a reasonable person,
knowing the relevant background and observing matters in the place of the party
asserting the existence of the arbitration agreement, would have concluded from
the other party’s conduct that it was agreeing to participate in the proposed
arbitration.°

* TSC Zestafoni G Nikoladze Ferroalloy Plant v Ronly Holdings Ltd [2004] EWHC 245.
°° ISC Zestafoni G Nikoladze Ferroalloy Plant v Ronly Holdings Ltd [2004] EWHC 245.
** At common law. Oral agreements to arbitrate are acknowledged in s.81(1)(b) of the Arbitration Act
1996.
*° Section 5(1) of the Arbitration Act 1996,
°° Section 32 of the Arbitration Act 1950.
*’ Section 5 of the Arbitration Act 1996.
8 See paras 2-039 et seq. below.
»” Section 5(5) of the Arbitration Act 1996.
Save in the context of salvage contracts: see further Brice on Maritime Law of Salvage (4th edn)
Sweet & Maxwell 2002. See though for example R/T Consulting v DM Engineering (Northern
Ireland) Ltd |2002| EWCA Civ 270.
*" As, for example, in £ Turner & Sons Lid v Maltind Ltd (1985) 5 Const. L.J. 273, where the court
found that there was no offer and acceptance.
* Athletic Union of Constantinople v National Basketball Association [2002] 1 Al E.R. (Comm) 70. The
court found in that case that a reasonable person would have so concluded.
 What 1s an Arbitration Agreement? ay)

However, since the introduction of the Arbitration Act 1996, there will rarely be
any need to rely on an implied arbitration agreement. This is because the very
broad definition of writing under the Arbitration Act 1996° means that in many
cases there will be a written arbitration agreement for the purposes of the statute
rather than an implied arbitration agreement. For example, if a tribunal has no
jurisdiction to hear a dispute pursuant to the arbitration agreement, but the
parties proceed with the reference and exchange written submissions alleging an
arbitration agreement which is not denied, the written submissions will be suffi-
cient to constitute an arbitration agreement in writing.°’ Even if there is no
specific allegation of an arbitration agreement, if the parties proceed with a
reference without objecting to the lack of jurisdiction they will lose the right to
object and the tribunal will be entitled to proceed to determine the matters
referred.”
There may however be situations in which one party alleges that there is an
implied agreement to arbitrate based on the parties’ conduct notwithstanding the
absence of an arbitration agreement for the purposes of the Arbitration Act 1996.
In these circumstances, if one of the parties makes a timely objection to jurisdic-
tion, the tribunal will have to consider the existence of an implied agreement. The
conduct from which the implication may be drawn can arise in the context of an
arbitration concerned with other disputes or in connection with proceedings
whose status as a proper reference of the disputes in question is itself the subject
of controversy.” In the former case it will not be the existence of an arbitration
agreement that is in dispute, but rather its scope, 1.e. whether the particular claim
being made 1s within the arbitration agreement. One effect of an implied arbitra-
tion agreement can be to overcome objections to the enlargement of the scope of
the reference beyond the tribunal’s existing jurisdiction.®°’ As stated above, it
would be extremely rare for there to be an implied agreement to arbitrate in these
circumstances which did not fall within the statutory definition of arbitration
agreement. In principle, however, the parties can enter into an implied agreement
to arbitrate which would not constitute a written arbitration agreement for the
purposes of s.5 of the Arbitration Act 1996.°° It would then take effect as an oral
arbitration agreement to which the Arbitration Act 1996 will not apply.”

3 Section 5 of the Arbitration Act 1996: see para.2-039 below.

+ Section 5(5) of the Arbitration Act 1996. In Athletic Union of Constantinople v National Basketball
Association [2002] 1 All E.R. (Comm) 70 the parties were agreed that if there was an agreement to
arbitrate the merits of the dispute it fell within s.5 of the Arbitration Act 1996 as an agreement in
writing and was subject to the provisions of the 1996 Act.
65 Section 73 of the Arbitration Act 1996: see para.5—065 below. See also Athletic Union of Con-
stantinople v National Basketball Association [2002] 1 All E.R. (Comm) 70.
56 Westminster Chemicals € Produce Ltd v Eicholz & Loeser [1954] 1 Lloyd’s Rep. 99; Aktiebolaget Legis
v V Berg & Sons Ltd [1964] 1 Lloyd’s Rep. 203; Luanda Exportadora SARL v Wahbe Tamari & Sons
Ltd [1964] 2 Lloyd’s Rep. 535; The “Tuyuti” [1984] Q.B. 838; Higgs & Hill Building Ltd v Campbell
Denis Ltd [1982] 28 B.L.R. 47; Cia Maritima Zorroza SA v Sesostris SAE (The “Marques de
Bolarque’”’) [1984] 1 Lloyd’s Rep. 652; Almare Societa di Navigazione SpA v Derby & Co Ltd (The
“Almaea Prima”) [1989] 2 Lloyd’s Rep. 376; Furness Withy (Australia) Pty Ltd v Metal Distributors
(UK) Ltd (The “Amazonis”’) [1990] 1 Lloyd’s Rep. 236; Allied Vision Ltd » VPS Film Entertainment
GmbH [1991] 1 Lloyd’s Rep. 392.
67 See paras 5-060 et seq. For agreements to which the Arbitration Act 1996 applies, continuing with
the reference may lead to a loss of the right to object pursuant to s.73: see para.5—065.
8 See paras 2-039 et seq. below.
© See para.2-015 above.
 38 The Arbitration Agreement

(d) Mutualty

2-017 Mutuality not required. Until 1986 English law required an arbitration
agreement to be “‘mutual”’ in that it had to give both parties the same right to refer
disputes to arbitration.’”° In Pittalis v Sherefettin,’! a rent review case, the Court of
Appeal redefined this requirement, seeing no lack of mutuality in an agreement
between two persons which conferred on one of them alone the right to refer the
dispute to arbitration.’”* As Fox L.J. said:

“There is a fully bilateral agreement which constitutes a contract to refer. The fact that
the option is exercisable by one of the parties only seems to me to be irrelevant. The
arrangement suits both parties ... the landlord is protected, if there is no arbitration,
by his own assessment of the rent as stated in his notice: and the tenant is protected, if
he is dissatisfied with the landlord’s assessment of the rent, by his right to refer the
matter to arbitration. Both sides have, therefore, accepted the arrangement and there is
no lack of mutuality.”’”

Since then it has become well established that there is no requirement under
English law for an arbitration agreement to confer on the parties a mutual right to
initiate a reference’* and an arbitration agreement providing an option for one
party alone to refer disputes to arbitration is valid.’> A party who is not empow-
ered to initiate a reference to arbitration will be entitled to pursue litigation in
respect of a dispute in the absence of agreement on some other mechanism such
as expert determination,’° although ifthe option is validly invoked”’ a stay of those
proceedings will be granted.’”* Further, once the option is validly invoked by a
party it cannot subsequently change its mind and unilaterally opt for litigation.”
In practice an increasing number of clauses give only one party the right to refer
disputes to arbitration, particularly in international derivatives transactions with
counterparties in jurisdictions where English court judgments would not be
enforced. In these cases it is typical for there to be a clause conferring jurisdiction
on the courts of one or more jurisdictions with an option exercisable at the
instance of only one party to insist that any dispute be referred to arbitration.
Obviously it is important if adopting this approach to ensure that the precise

” Baron v Sunderland Corp [1966] 2 Q.B. 56 at 64 A/B, a case about statutory arbitration. This was
followed in Tote Bookmakers v Development & Property Holding Co Ltd [1985] Ch. 261. The dictum
in Baron v Sunderland was subsequently held (in Pittalis v Sherefettin discussed below) to be wider
than necessary because it had been a case where there was no arbitration clause at all, not just an
agreement lacking mutuality.
7) [1986] 1 Q.B. 868.
” For the position where such right is conferred on both parties see para.2—067 below.
® Pittalis v Sherefettin [1986] 1 Q.B. 868 at 875, following Woolf vCollis Removal Service [1948] 1 K.B.
11.
™ See for example Nine Gladys Road Ltd v Kersh [2004] EWHC 1080; NB Three Shipping Ltd v
Harebell Shipping Ltd {2005] 1 Lloyd’s Rep. 509,
” NB Three Shipping Lid v Harebell Shipping Ltd [2005] 1 Lloyd’s Rep. 509.
7© See para.2—028.
” The option could not be invoked after a party had taken a step in the action or otherwise led the
other party to believe on reasonable grounds that the option to arbitrate would not be exercised: NB
Three Shipping Lid v Harebell Shipping Ltd [2005] 1 Lioyd’s Rep. 509.
“NB Three Shipping Lid v Harebell Shipping Ltd [2005] 1 Lloyd’s Rep. 509.
” Whiting v Halverson [2003] EWCA Ciy 403.
 What 1s an Arbitration Agreement? 39

circumstances in which the option may be exercised are clearly set out. Provided
this is done, the clause will be valid under English law, although if the seat of the
arbitration is in another country the relevant local law will have to be examined.
Should enforcement of the resulting award be required in some other jurisdiction
it would also be prudent to check that the law of the place of enforcement
considers such clauses to be valid.*°

Unilateral option to litigate. Similarly it is also now established that a 2-018

disputes provision which contains an arbitration agreement between the parties
but also provides one party with an option to litigate will be upheld provided it is
clear and unequivocal.*' The effect of such a provision will be that one party has
a choice of litigating or arbitrating any dispute, whereas the other party can be
forced to arbitrate.** Again a party cannot “‘blow hot and cold” and if it starts, or
participates in, an arbitration it will have waived the right to opt for litigation
instead.*’ However, provided the party exercising its option to litigate has not
participated in the arbitration, it will not be precluded from exercising its option
by virtue of the fact that the other party has already commenced arbitration.**

(e) Variations

Disputes where contract varied. Disputes may arise about whether a 2-019
contract which has been varied includes or excludes the original arbitration
agreement. For example in Fughirzadeh v Rudolf WoolfSA (Pty) Lid a variation
of a contract for the sale of steel bars was found to be unintelligible except by
reference back to the original contract and its arbitration clause.*’ Further,
questions may arise as to whether time-bars in the original arbitration agreement
still apply.*°

®° See para.2—107 below.

81 Law Debenture Trust Corp Ple v Elektrim Finance BV (2005) EWHC 1412.
82 The question arises whether, if aparty exercises its option to litigate, the other party can pursue any
counterclaims in those proceedings or would be compelled to arbitrate them. In Law Debenture
Trust Corp Ple v Elektrim Finance BV [2005] EWHC 1412 it was accepted (at [42]) that counter-
claims would be entertained in the litigation, but in that case the disputes provision specifically
contemplated such counterclaims. Absent such provision it is likely that a party could insist on the
counterclaims being brought in separate arbitration proceedings, however inconvenient that may
be.
83 Lam Debenture Trust Corp Ple v Elektrim Finance BV [2005] EWHC 1412 at [42].
5+ It was suggested in Law Debenture Trust Corp Ple v Elektrim Finance BV [2005] EWHC 1412 (by
Mann J. at [45]) that if the situation were otherwise then whether the dispute were to be arbitrated
or litigated would depend on “potential accidents of timing or conceivably an unseemly scram-
ble”.
*5 [1977] 1 Lloyd’s Rep. 630.
86 In EB Aaby’s Rederi A/S v Union ofIndia [1974] 2 Lloyd’s Rep. 57 a charterparty containing a
CENTROCON arbitration clause stated that any claim had to be made within 12 months of final
discharge, or the claim would be barred. An undertaking was given to pay after the general average
statement was drawn up, a process which apparently took “many years” and when the claim was
finally presented, the defendants pleaded the time-bar. The House of Lords held that neither the
arbitration clause nor the time-bar had survived the variation.
 40 The Arbitration Agreement

2-020 Effect of variation. The effect of the variation may be to terminate the
arbitration agreement altogether, although this will be a matter of construction of
the varied contract. In most cases a variation of the terms of the matrix contract
will not impugn the parties’ agreement to arbitrate disputes under the contract as
varied absent express provision doing so.

(f) Conditions precedent

2-021 Conditions precedent. Conditions precedent to the operation of an arbitra-

tion agreement must be fulfilled before a tribunal will have jurisdiction to deter-
mine disputes under it. So for example an arbitration agreement which provides
for disputes to be submitted to arbitration “‘at the request of any party” will not
make arbitration of any dispute compulsory unless and until a party requests it.*7
Similarly where a building contract contained an arbitration clause which pro-
vided that the “reference shall not be opened until after completion of the works”’,
the court decided, with regret, that the arbitrator had no jurisdiction to determine
whether the works had been completed, that in fact they had not been completed
and therefore an award by the arbitrator was invalid.** Where the disputes
provision is a multi-tiered clause, the steps to be taken prior to commencing
arbitration may constitute conditions precedent in which case they must be
complied with.*?

2-022 Scott v Avery clauses. The parties to a contract may agree that no action
shall be brought upon it until an arbitration award has been made, or (what
amounts to the same thing) may agree that the only obligation arising out of a
particular term of the contract shall be to pay whatever sum a tribunal may
award.”” This is known as a Scott v Avery clause. It does not prevent litigation
being initiated on a contract containing a clause of this type, but the condition
precedent is a defence to the action.”' A Scott v Avery clause does not preclude
injunctive proceedings brought for the purpose of enforcing the arbitration agree-
ment itself.”

2-023 No effect if stay granted. The court used to have power to discharge Scott
v Avery agreements, which has been repealed.’ In order to avoid the combination

*” Secretary of State of the Environment, Transport and the Regions, Ex p. The Channel Group Ltd and
France Manche SA {2001| EWCA Ciy 1185.
© Smith v Martin [1925] 1 K.B. 745, citing Pethick Brothers v Metropolitan Water Board, CA from
Hudson Building Contracts (6th edn), Vol.2, p.456. See also May v Mills (1914) 30 T.L.R. 287.
*° See para.2-036 below.
°° Scott v Avery (1856) 25 LJ. Ex. 308. For a recent example see Jagger v Decca Music Group Ltd
[2004] EWHC 2542.
”! Viney v Bignold (1887) 20 Q.B.D. 172.
”* Toepfer International GmbH v Société Cargill France [1998] 1 Lloyd’s Rep. 379 where the application
Was to restrain proceedings brought in a foreign jurisdiction in breach of the arbitration agree-
ment.
”* Section 109 of the Arbitration Act 1996 has repealed Pt 1 of the Arbitration Act 1950, including
this provision at s.25(4).
 What is an Arbitration Agreement? 4]

of an unworkable arbitration clause and no right to bring legal proceedings,”* it is

now enacted that if the court refuses to stay legal proceedings in favour of
arbitration, any provision that an award is a condition precedent to the bringing of
legal proceedings in respect of any matter is of no effect in relation to those
proceedings.” The Scott v Avery condition precedent is also disregarded for
limitation purposes.”°

(g) Other types of clauses distinguished

Types of dispute resolution clauses. One reason why arbitration 2-024

agreements are sometimes ineffective is because of a failure properly to distinguish
between the different forms of dispute resolution available and the extent to
which, if at all, they can be combined.” In particular, consideration needs to be
given to whether a contract should provide for dispute resolution by the court, or
by arbitration or by expert determination, all of which can lead to a binding
decision. These procedures may be combined with adjudication or ADR proc-
esses. Each of these is considered below.

Jurisdiction clauses. A jurisdiction clause provides expressly for the courts 2-025
of a particular country to have jurisdiction to deal with disputes arising under a
contract.?*°? It may provide that the courts of a particular country have exclusive
jurisdiction, in which case no other court can usually take jurisdiction. Or it may
provide that the courts of a particular country have non-exclusive jurisdiction, in
which case the chosen court has jurisdiction but both parties also have the right
to commence proceedings in any other court of competent jurisdiction in certain
circumstances. The third alternative is to provide that the courts of a particular
country have non-exclusive jurisdiction for the benefit of one party only, in which
case the party benefiting from the provision (generally the one with the stronger
negotiating position) can sue in any court of competent jurisdiction whereas the
other party is confined to bringing an action in the courts of the named country
only.
Even if the parties have agreed on the courts of a particular country in their
jurisdiction clause, it may be overridden by provisions in relevant Regulations and
Conventions!” which provide for certain courts to have exclusive jurisdiction to
deal with particular types of disputes regardless of the domicile of the parties, e.g.

°* DAC report, para.57.

°5 Section 9(5) of the Arbitration Act 1996.
°© Section 13(3) of the Arbitration Act 1996: see paras 5—014 and 8-177.
°7 In David Wilson Homes Ltd v Survey Services Lid (in liquidation) (2001) 1 All E.R. (Comm) 449 a
clause provided simply for disputes to be “referred to a Queen’s Counsel of the English Bar to be
mutually agreed [between the parties}”. At first instance the judge held that the clause was not an
arbitration clause but was a clause providing either for expert determination or for a non-binding
opinion. The Court of Appeal disagreed and held it was an arbitration clause because the parties
intended there to be a procedure in the nature of a judicial inquiry.
°5-99 The law relating to exclusive and non-exclusive jurisdiction clauses is outside the scope of this
work. See further, Civil Jurisdiction and Judgments, Briggs, Rees (4th edn, 2005).
100 Notably the Brussels Regulation; the Brussels Convention and the Lugano Convention.
 42 The Arbitration Agreement

those involving immovable property and proceedings concerning registration or

validity of intellectual property rights. There are also special rules concerning
insurance, consumer contracts and employment contracts.

2-026 Incompatibility of jurisdiction clauses and arbitration agree-

ments. Save where the disputes provisions are of a hybrid nature,'°' a jurisdic-
tion clause is an alternative to an arbitration agreement and they should not be
combined in the same contract.'°'* This is because a valid reference to arbitration
is a contractual obligation to pursue any disputes before an arbitration tribunal to
the exclusion of the courts.'°? There have been a number of cases where the court
has had to consider clauses providing for resolution of disputes by both arbitration
and the courts and it then has to endeavour to ascertain the parties’ intentions.
That is not always a straightforward task. However, where the circumstances
warrant, it seems the court will strive to give effect to apparently conflicting
provisions by construing the references to the jurisdiction of the court as relating
to its supportive and supervisory jurisdiction over the tribunal.'°°

2-027 The court’s approach. The courts take a pragmatic approach to the
difficulties that can arise when parties agree both a jurisdiction clause and an
arbitration agreement in the same contract. So, for example, where printed
conditions provided for the jurisdiction of the courts of Lima, Peru but a typed
clause provided for “arbitration according to the conditions and laws of London”’,
this was held to be an express choice of arbitration in London. Kerr L.J. asked the
rhetorical question: “How would the judge in Lima like to conduct a case
according to English procedural law?’’'°* In another case a clause in an inter-
national commercial contract provided for ICC arbitration, whilst another clause
in the same contract provided for English law and that the courts of England
should have exclusive jurisdiction. Steyn J. rejected the argument that there was
a hopeless inconsistency between the clauses, and held, on the proper construction
of the clauses, that the second clause provided the law governing the arbitration
and the reference to the jurisdiction of the courts referred to their supervisory
powers.'°° Similarly a contract on GAFTA Form 100 provided that ‘‘the Court of
England or arbitrators appointed in England, as the case may be, shall, except for

Hor See para —03//.

© See though paras 2-017 et seq. in relation to options to arbitrate or litigate which may necessitate
provision for both forms of dispute resolution in the parties’ contract.
'? Save insofar as the court may be asked to use its supervisory or supportive powers in relation to an
arbitration: see Chs 7 and 8 below.
' See, e.g. Paul Smith v H&S International Holding Inc [1991] 2 Lloyd’s Rep. 127 discussed in the
following paragraph.
'" Naviera Amazonica Peruana SA v Compania Internacional de Seguros del Peru [1988] 1 Lloyds Rep.
116.
© Paul Smith v H&S International Holding Inc [1991] 2 Lloyd’s Rep. 127; followed in Ava Re v Ace
Global Markets Ltd [2006] EWHC 216. See also Daval Aciers D’Usinor et de Sacilor v Armare Srl
(The Nerarno) |1996] 1 Lloyd’s Rep. 1. In Shell International Petroleum Co Lid v Coral Oil Co Ltd
[1999] 1 Lloyd’s Rep. 72 the reference to the English courts was held to be confined to disputes
about the proper law of the contract. Cf. Indian Oil Corp v Vanol Inc [1991] 2 Lloyd’s Rep. 634.
 What 1s an Arbitration Agreement? 43

the purpose of enforcing any award made in pursuance of the arbitration clause
hereof, have exclusive jurisdiction over all disputes which may arise under this
contract’’. This was followed by an arbitration clause covering any dispute arising
out of or under the contract. Colman J. found that those disputes which were
within the ambit of the arbitration agreement fell within the exclusive jurisdiction
of the arbitrators and all others were within the jurisdiction of the court.!°° The
Court of Appeal disagreed and concluded that the exclusive jurisdiction clause was
intended to apply both where the contract provides for arbitration and where it
does not, so that if provision for arbitration is included, as it was here, the
exclusive jurisdiction of the English court does not take effect.'°

Expert determination (or valuation).'°* Like arbitration, expert 2-028

determination provides for the final resolution of disputes by a private individual
or individuals to whom issues are referred for a binding decision. Traditionally a
distinction has been drawn between the two on the basis that a tribunal must act
judicially by applying the law whereas an expert, unless the parties agree some
other basis for his decision, decides according to his own expert opinion.'°? This
has become a less clear distinction now that, if agreed by the parties, a tribunal is
entitled to base its decision on “other considerations”’,''® although if the require-
ment to act judicially can be established it will resolve the issue.''’ Experts are
often appointed more to get the benefit of their professional (non-legal) expertise
in deciding technical issues, but arbitrators appointed for their technical expertise
have long been a feature of English arbitration.''* Experts have traditionally been
involved in determinations prior to the existence of a dispute, whereas an arbitra-
tion tribunal deals with disputes after they have arisen. A more recent develop-
ment is the use of experts, notably lawyers, to decide all aspects of a dispute, rather
than particular technical issues. As a result of these factors the distinction between
experts and arbitrators has in some cases become somewhat blurred although there
are significant practical differences since expert determination is not governed by
the Arbitration Act 1996.!!%

Construction of contractual provision. Whether a contract’s chosen 2-029

form of dispute resolution is expert determination or arbitration is a matter of
construction of the contract, which involves an objective inquiry into the inten-
tions of the parties. The express words used may give a strong indication of the
parties’ intentions and the phrase “as an expert and not as an arbitrator” 1s
frequently used to signify that the process is intended to be one of expert

106Toepfer International GmbH v Société Cargill France [1997] 2 Lloyd’s Rep. 98.
107Toepfer International GmbH v Société Cargill France [1998] 1 Lloyd’s Rep. 379 at 386.
108See generally, Kendall J., Expert Determination (3rd edn, 2001).
109Re Carus-Wilson v Green (1886) 18 Q.B. 7; David Wilson Homes Lid v Survey Services Ltd (in
liquidation) [2001] 1 All E.R. (Comm) 449.
10 Section 46 of the Arbitration Act 1996. See further para.2—-091.
1 David Wilson Homes Lid v Survey Services Ltd (in liquidation) [2001] 1 All E.R. (Comm) +49.
112 See paras 6-075 et seq. below.
113 See for example Jn Re British Aviation Insurance Co [2005] EWHC 1621 at [130]-{132].
 44 The Arbitration Agreement

determination. The terminology used is likely to be persuasive,''* although not

always conclusive.'!> Where the express wording is ambiguous, the court looks
first at the other provisions of the contract to try to resolve the ambiguity.'!° If that
does not resolve the matter the court will refer to certain guidelines which may
serve to distinguish which process the parties intended to adopt.''’ Of these, the
most important used to be whether there was an “issue” between the parties, such
as the value of an asset, on which they had not taken defined positions, in which
case the procedure was held to be expert determination. If there was a “formulated
dispute” between the parties where defined positions had been taken, the proce-
dure was held to be arbitration.''® This concept is in many cases somewhat
artificial as the parties will often be in dispute about a matter before it is referred
to an expert, but in appropriate cases this guideline is still relied on.'!? A further
guideline, as noted above, is the judicial function of a tribunal as opposed to the
application of his professional expertise by the expert.'*° A tribunal arrives at its
decision on the evidence and submissions of the parties and must apply the law or,
if the parties agree, other considerations.'*! An expert, unless it is agreed other-
wise, makes his own inquiries, applies his own expertise and decides on the basis
of his own expert opinion.'”* This distinction does not apply in the case of ‘‘look-
sniff arbitrations’”’,'** although these are rare.'!’* A further distinction, that the
parties agree to accept an expert’s decision as final, whereas a tribunal’s award can
be appealed, has become less important because of the restrictions on appeals from
arbitration awards.'*° It is also the case that regardless of the agreement between
the parties, the courts will review a decision of an expert in certain limited cir-
cumstances. '*°

2-030 Procedural differences distinguishing expert determination.

One of the main differences between expert determination and arbitration has

"4 Palacath Ltd v Flanagan [1985] 2 All E.R. 161.

"’ Taylor v Yielding (1912) 56 S.J. 253. See also Re Hammond and Waterton (1890) 62 L.T. 808.
Inconsistent headings cannot prevail over the express wording of the clause if that is clear: Cott UK
Ltd v FE Barber Ltd (1997) 3 All E.R. 540.
"6 Langham House Developments Ltd v Brompton Securities Ltd (1980) 256 E.G. 719.
"7 Or “indicia”, established by Lord Wheatley in Arenson v Casson Beckman Rutley & Co [1975] 3
W.L.R. 815.
"8 Collins v Collins (1856) 26 Beav. 306 at 312; Tharsis Sulphur & Copper Co Ltd v Loftus (1872) L.R.
8 CP 1; Chambers v Goldthorpe [1901] 1 Q.B. 624; Sutcliffe v Thackrah [1974] 1 A.C. 727 at 762;
Cand D Leigh v English Property Corp Lid [1976] 2 Lloyd’s Rep. 298; North Eastern Cooperative
Society Ltd v Newcastle upon Tyne City Council [1987] 1 E.G.L.R. 142 at 146A; Capricorn Inks Pty
Ltd v Lawter International (Australia) Pty Ltd [1989] 1 QB. 8 at 15; Ipswich Borough Council v
Fisons Ple [1990] 1 W.L.R. 108.
' Ipswich Borough Council v Fisons Ple {1990| 1 W.L.R. 108 at 115D.
°° David Wilson Homes Ltd v Survey Services Ltd (in liquidation) [2001] 1 All E.R. (Comm) 449.
'71 Section 46 of the Arbitration Act 1996,
'% Palacath v Flanagan [1985] 2 All E.R. 161 at 166.
"5 Finnegan v Allen [1943] 1 K.B. 425; Mediterranean and Eastern Export Co Ltd v Fortress Fabrics
(Manchester) Ltd [1948] 2 All E.R. 186. See para.5—110.
'*" Perhaps because the procedure contemplated is more suited to expert determination.
' Section 69 of the Arbitration Act 1996. See paras 8-119 ef seq.
'6 See for example Veba Oil Supply & Trading GmbH v Petrotrade Inc {2001] EWCA Civ 1832; [2002]
1 All E.R. 703. An expert’s decision can be reviewed for material manifest error or a material failure
to follow instructions.
 What is an Arbitration Agreement? 45

traditionally been the procedure adopted to reach the decision.!?” There is usually
a greater degree of formality in arbitration which arises from the judicial nature of
the decision (in most cases) and the court’s role in supervising the conduct of
arbitration pursuant to its statutory powers.'*® However, under the 1996 Act,
subject to any contrary agreement between the parties, a tribunal is given a great
deal of flexibility in determining the procedure to be adopted.!2? The Arbitration
Act 1996 makes clear that the tribunal may take the initiative in ascertaining the
facts and the law,'*° and it can direct that there should be no oral evidence or oral
submissions.'*! A tribunal has to comply with its statutory duty of fairness,'*? and
machinery exists to permit its removal for failure to do so,!** but otherwise it has
considerable scope for determining the procedure most suited to the needs of the
case, subject to any agreement of the parties. There is also authority that an expert
is subject to an implied duty to act fairly when conducting an expert determina-
tion.'**

Expert determination treated differently from arbitration. 2-031

The following features demonstrate how expert determination is treated differ-
ently from arbitration in a number of important respects.

@ An expert determination is constrained by the terms of the clause referring

the matter to expert determination, whereas much is incorporated into an
arbitration agreement by statute and by judicial precedent. For example, the
court generally has no power to appoint an expert, whereas statute provides
the court with the power to appoint an arbitrator.'*? Similarly there is no
obligation of confidentiality in relation to expert determination unless one
has been contractually agreed.
@ An arbitration award can be challenged on grounds of “serious irregularity”
in the conduct of the arbitration,'*° but this is a statutory remedy for which
there is no common law analogue in expert determination.'*’
@ An expert’s decision can only be enforced as a matter of contract and not
pursuant to the statutory machinery available in respect of an arbitration
award.1°*
27 So for example in Town & City Properties v Wiltshier Southern Ltd and Gilbert Powell {1988] 44
B.L.R. 109 an arbitrator who said that the hearing should take the form of meetings between himself
and the technical representatives of the parties, and not a trial-type hearing with oral evidence,
cross-examination and speeches, was said by the court to have adopted a process which was “really
that of a valuation, rather than an arbitration” (at 119).
128 See generally Chs 7 and 8.
'29 Pursuant to s.34(1) of the Arbitration Act 1996.
'3° Section 34(2)(g) of the Arbitration Act 1996.
151 Section 34(2)(h) of the Arbitration Act 1996.
132 See paras 4-106 and 5-032 et seq.
'33 See paras 7-116 et seq.
4 Worrall v Topp [2007] EWHC 1809.
'35 Section 18 of the Arbitration Act 1996.
'36 See paras 8-072 et seq.
'37 See though Worrall v Topp [2007] EWHC 1809 where it was held that there existed an implied
obligation on the expert to act fairly.
'58 See paras 8-002 et seq.
 46 The Arbitration Agreement

@ An expert can be sued for negligence,'*’ while an arbitrator has immu-

nity. '*°

@ There can be no appeal on a point of law from an expert determination,

unless the wrong law has been applied to the issue for determination,'*’ in
which case there is not, strictly speaking, an appeal, but rather the decision
can be challenged.'** The parties to an arbitration can appeal against a
tribunal’s award on a point of law in certain limited circumstances.'*°

2-032 Adjudication. The word adjudication suggests a judicial decision-making

process, but it is also used to refer to a system of interim dispute resolution used
specifically in connection with construction contracts. Adjudication was for many
years found only in some of the standard forms of construction contracts and was
reserved for certain kinds of disputes. It is now mandatory for all disputes under
many types of construction contracts.'*+ Dyson J. (as he then was) in Macob Civil
Engineering Ltd v Morrison Construction Ltd,'** explained that: ‘“The intention of
Parliament in enacting the Act was plain. It was to introduce a speedy mechanism
for settling disputes in construction contracts on a provisional interim basis, and
requiring the decisions of adjudicators to be enforced pending the final determina-
tion of disputes by adjudication, litigation or agreement.”

2-033 Relationship of adjudication to arbitration. The relationship of

adjudication to arbitration was described in London & Amsterdam Properties Ltd v
Waterman Partnership Ltd'* as follows: ‘‘Arbitration and adjudication are dispute
resolution procedures which have many similarities, they are privately conducted
and confidentiality may attach to information received in relation to both. Arbitra-
tion gives rise to a final determination which is capable of registration for
enforcement. Adjudication gives rise to a provisional determination which is only
binding until the dispute is arbitrated, litigated or agreed. Adjudication further is
subject to very restrictive time limits, and no matter how complex the dispute
“one size fits all”. Arbitration has no such limits imposed by Parliament.” It will
be observed that, although adjudication produces interim rather than final deci-
sions, those decisions are binding pending agreement of the parties altering their
effect or the reference of disputes about them to arbitration or litigation.'*° It is
'° Arenson v Casson Beckman Rutley & Co [1975] 3 W.L.R. 815.
™ See paras 4-152 ef seq.
' Nikko Hotels (UK) Lid v MEPC Ple [1991] 28 E.G. 86.
' As was sought, unsuccessfully, in Nikko.
' Section 69 of the Arbitration Act 1996, See paras 8-119 et seq.
Section 108 of the Housing Grants, Construction and Regeneration Act 1996. For the wide
definition of construction contracts, see s.104. For the operations excepted from the statutory
provisions, see s.105(2). See generally Keating on Building Contracts (8th edn, 2006) at
para. 16—100.
144271999] B.L.R. 93 at [24].
™® [2003] EWHC 3059; [2004] B.L.R. 179 at [136].
'¢ Housing Grants, Construction and Regeneration Act 1996, s.108(3). See also Carillion Construction
Lid v Devonport Royal Dockyard Ltd (2005) EWCA Civ 1358 at [85]}{87].
 What 1s an Arbitration Agreement? 47

therefore perfectly consistent to make provision for adjudication followed by the

possibility of challenge to the adjudicator’s decision by arbitration.'*7 Indeed this
is employed in many construction contracts.

Enforcement of adjudicator’s decision. The court has held that an 2-034

adjudication decision cannot be enforced as an arbitration award'*® but should be
enforced by the court’s summary judgment procedure under CPR Pt 24.'*° The
existence of an arbitration agreement pursuant to which the dispute will be finally
resolved does not prevent enforcement by the court of the adjudicator’s decision
on a temporary basis.'*” Nor will an application to stay court proceedings under
s.9 of the Arbitration Act 1996'°' be effective to prevent enforcement of the
adjudicator’s decision.!*

ADR. Alternative dispute resolution (ADR) is regarded by English practitioners 2-035

as any system of dispute resolution which is non-binding. By “‘non-binding”’ is
meant that the parties are under no obligation to comply with any decision or
determination resulting from the process, if indeed there is one.'*’ Nor are the
parties obliged to participate in or continue with the process in the absence of
express contractual provision to that effect. Where the parties do agree to adopt
an ADR process they may be obliged to refer their dispute to a third party who
is to act in some facilitative'** or evaluative 'SS capacity. The third party is not
empowered to impose a decision on the parties, and, unless the parties agree on
a settlement, the ADR process will not reach any binding agreement resolving the
dispute. Thus ADR does not guarantee a binding result, although it can lead to
one, and this is a key distinction between ADR and arbitration. Accordingly the
parties should ensure that they have a binding system of dispute resolution to fall
back on if they cannot agree a settlement following ADR. If no system is
mentioned, the parties always have the right to litigate the dispute in court after
failure to settle. ADR procedures include negotiation, mediation and concilia-
tion,!*° mini-trial or executive tribunal, structured settlement conference, ‘‘med-

'47 Any contractual requirements of the arbitration agreement will still need to be complied with: 77
Mackley & Co Ltd v Gosport Marina Ltd [2002] EWHC 1315. As to the scope of what is referred
to arbitration see Amec Civil Engineering Ltd v Secretary of State for Transport [2005] 1 W.L.R.
23308
48 Cameron (A) Ltd v Mowlem (John) & Co Plc [1990] 52 B.L.R. 24.
4° Outming Construction Ltd v H Randall and Son Ltd (1999) B.L.R. 158
150 Absolute Rentals Ltd v Gencor Enterprises Lid (2001) 17 Const. L.J. 322, The Construction Group
Centre v Highland Council [2002] B.L.R. 476, [2002] C.1.L.L. 1906 and Macob Civil Engineering Ltd
v Morrison Construction Lid [1999] B.L.R. 93.
'S! See para.7—024.
'52 See Comsite Projects Ltd v Andritz AG [2003] EWHC 958; (2004) 20 Const. L.J. 24 at [21].
153 Which is unlikely unless the form of ADR chosen calls for some form of “early neutral deter-
mination”.
154 Assisting the negotiation without giving an opinion on the issues.
'S5 Giving an opinion on the issues.
156 The expressions “mediation” and “conciliation” are often used interchangeably, and the processes
are difficult to distinguish in practice. The term “mediation” has become more popular in recent
years.
 48 The Arbitration Agreement

arb” and expert evaluation or non-binding appraisal.'°’ They place a premium on

party involvement. Like arbitration and expert determination, they are private and
confidential, but they are also without prejudice, in the sense that oral and written
exchanges cannot be disclosed in any subsequent legal proceedings.'*”* The use of
mediation in particular has greatly increased in the last decade, particularly
following court-led initiatives to impose it upon litigating parties in an effort to
resolve disputes without the need for a full trial.'°*

2-036 Multi-tier clauses. Many contracts containing arbitration clauses also pro-
vide for the parties first to try to settle the matter by negotiation or discussion
between senior executives and, if that fails, the dispute must be referred to
mediation or some other ADR process. Only when these steps have failed is the
matter to be referred to arbitration. This type of clause, which contemplates at
least two different levels of dispute resolution procedure, is known as a multi-tier
or multi-level clause.'*”? Depending on the form of words used, these clauses may
or may not give rise to a binding obligation to submit to the different forms of
dispute resolution before starting an arbitration, but an obligation simply to
negotiate is not binding.'®? Where such preliminary steps are expressed in man-
datory terms so as to constitute a condition precedent to the right to arbitrate they
must be complied with.'®' In many cases however they will not be mandatory and
it is then possible for the claimant to commence arbitration even without comply-
ing with them.'®? When drafting a multi-tier clause it is important to set out time
limits within which each stage of the process is to be completed, so that the parties
can be certain about when they can proceed to the next level. In some cases the
decisions made during the initial steps are binding on the parties, at least until a
court or tribunal rules on the point.'® An application can be made for a stay of
court proceedings brought in breach of an agreement to arbitrate'®* even where
the matter is to be referred to arbitration only after the exhaustion of other dispute

''7 See generally Brown & Marriott, ADR Principles and Practice (2nd edn, Sweet & Maxwell, 1999).
“Med-arb” is different because if a mediation fails the mediator is then to act as an arbitrator.
Apparently popular in the United States, “‘med-arb” is regarded with suspicion in some countries,
including England, because of the difficulties arising from the private disclosures made to the
mediator who then becomes an arbitrator.
7 See, for example, Aird v Prime Meridian Ltd [2006] EWCA Civ 1866 at [5].
S IGPRIPE2ON TAs
'° See for example National Boat Shows Ltd v Tameside Marine [2001] W.L. 1560826.
109 See Courtney & Fairbairn Lid v Tolaini Brothers (Hotels) Lid [1975] 1 W.L.R. 297, where an
agreement to negotiate price was held to be unenforceable; Jtex Shipping Pte Ltd v China Ocean
Shipping Co (The “Jing Hong Hai”) [1989] 2 Lloyd’s Rep. 522.
'! See JT Mackley & Co Ltd v Gosport Marina Ltd {2002| EWHC 1315 where, amongst other things,
failure to comply with a condition precedent rendered the arbitration notice invalid.
162
Although not an arbitration case, see Halifax Financial Services Ltd v Intuitive Systems Ltd [1999]
1 All E.R. (Comm) 303.
"°° Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] A.C. 334. See also the system
of adjudication in building contracts at para.2—032 above.
'4 See generally paras 7-024 et seq.
 Form of an Arbitration Agreement 49

resolution procedures, which includes both binding and non-binding sys-

tems2°

Hybrid clauses. Some contracts provide that particular disputes will be 2-037
resolved by one form of dispute resolution and other types of dispute by some
other method. For example, it is common in an agreement for the sale and
purchase of a business for disputes concerning the calculation of deferred con-
sideration to be referred to expert determination whilst all other disputes under
the agreement are to be resolved by arbitration or by the courts. Some questions
of default, such as the failure to pay an instalment due, might be settled more
effectively by litigation, whose summary procedures'® have no direct counterpart
in arbitration, whilst valuation and/or technical questions in the same contract
might be settled more simply by expert determination. Some clauses distinguish
between resolving disputes as to liability, which fall within the arbitration agree-
ment, and those as to damages, which do not. The key issue when dealing with
such provisions is to ensure that it is clear precisely which types of disputes fall
to be resolved by each mechanism.'®’ It may assist to provide expressly how this
is to be determined in the event of disagreement between the parties. So, for
example, the expert might be empowered to determine whether particular disputes
fall within his jurisdiction and the parties agree to be bound by that decision.
Alternatively, the clause might provide that unless both parties agree that the
dispute falls to be considered by the expert then it shall be dealt with by
arbitration, but this effectively gives each party a right of veto.

3. ForRM OF AN ARBITRATION AGREEMENT

(a) “A written agreement”

Requirement of writing. To constitute an arbitration agreement to which 2-038

the Arbitration Act 1996 applies, the agreement must be in writing.'®* The same
requirement applies to other agreements between the parties.'®” However, the

165 Section 9(2) of the of the Arbitration Act 1996, following the decision in Channel Tunnel Group Ltd
v Balfour Beatty Construction Ltd [1993] 1 Lloyd’s Rep. 291, HL.
16° Wnder-@PR: Pt24.
167 See, for example, May & Hassell Ltd v Vsesojuznoje Objedinenye Exportles (1940) 66 Lloyd’s Rep.
103 and May & Hassell Ltd v Vsesojuznoje Objedinenije Exportles (No.2) (1941) 69 Lloyd’s Rep.
102.
168 Section 5 of the Arbitration Act 1996 states that an agreement has to be in writing to bring it within
Pt I of the Act. If an arbitration agreement is not in writing it is not completely ineffective:
s.81(1)(b) of the Arbitration Act 1996, and see para.2-015 above. See also the definition of
international arbitration agreements in Art.II.2 of the New York Convention which specifically
includes exchange of letters and telegrams; Model Law, Art.7.2 (see Appendix 4).
the tribunal and the procedure to be followed in the
169 “Other agreements” are those on the powers of
arbitration and any matter on which the parties may agree pursuant to the Arbitration Act 1996: see
para.2—060.
 50 The Arbitration Agreement

agreement need not be signed by the parties'’? and the agreement can be found in
an exchange of communications,'’' which need not be signed.

2-039 What constitutes writing? The requirement of writing can also be sat-
isfied by!””:

(i) the arbitration agreement being “‘evidenced in writing”’,'’*

99 173
which includes
the arbitration agreement being recorded by one of the parties, or by a
third party, with the authority of the parties to the agreement'”* or

(ii) the arbitration agreement being made in some medium other than writing
which refers to terms which are in writing!” or

(iii) an exchange of written submissions (in arbitration or court proceedings) in

which the existence of an arbitration agreement in some medium other
than writing is alleged and not denied.'”°

“Writing” includes being recorded by any means.'’’

This very wide meaning given to the words “in writing” in the 1996 Act was
considered justified on the basis of English law as it then stood.'’® It was also
intended to reflect that in these times of rapidly evolving technology ‘“‘writing”’
should include recording by any means.'””

2-040 Meaning of “evidenced in writing”. The meaning of “evidenced in

writing” has been considered by the Court of Appeal in the context of s.107 of the
Housing Grants, Construction and Regeneration Act 1996, which so far as is
material is in the same terms as s.5 of the Arbitration Act 1996.'8° The court
concluded that for an agreement to be in writing the whole contract has to be

7 Section 5(2)(a) of the Arbitration Act 1996; see para.2-043 below.

'71 Section 5(2)(b) of the Arbitration Act 1996.
'? For an exhaustive if now slightly out-of-date study of international practice in this area, see Landau,
The Requirement for a Written Form of Arbitration Agreement: when Written means Oral. ICCA
Congress Series, no.11 (2003), pp.19-81.
' Section 5(2)(c) of the Arbitration Act 1996; see para.2—040 below. See also, for example, National
Boat Shows Ltd v Tameside Marine [2001] W.L. 1560826, where the acceptance of an offer in a
prospectus by submission of an application form was held to include an agreement to be bound by
the terms of the prospectus and thereby to constitute an agreement in writing.
"+ Section 5(4) of the Arbitration Act 1996,
'75 Section 5(3) of the Arbitration Act 1996.
'7 Section 5(5) of the Arbitration Act 1996. It seems from the wording of the section that it is
specifically the existence of an arbitration agreement which has to be alleged and not denied. If the
parties simply proceed with the arbitration without specifically alleging an arbitration agreement,
they may nevertheless be taken to have impliedly agreed to arbitrate: see para.2-016.
7 Section 5(6) of the Arbitration Act 1996.
'® Zambia Steel & Building Supplies Ltd v Clark & Eaton Ltd [1986] 2 Lioyd’s Rep. 225.
7 TAC report, para.34.
'89 RFT Consulting v DM Engineering (Northern Ireland) Ltd [2002] EWCA Civ 270.
 Form of an Arbitration Agreement 51

evidenced in writing.'*' It is not sufficient merely to show that there are docu-
ments which indicate the existence of the agreement.'*?

Reference to a written agreement. Where contracts for the salvage of 2-041

ships are agreed orally by reference to a Lloyd’s standard form of salvage agree-
ment containing an arbitration clause, the exigencies of the disaster may remove
the opportunity to sign the necessary documents.'*’ Occasions when this arises
have been said to be frequent and important.'** To deal with this difficulty, it is
now enacted that when parties agree otherwise than in writing by reference to
terms which are in writing, they make an agreement in writing.'*? Outside the
context of salvage contracts there may be little scope for the application of this
provision. In principle however the parties could agree orally essential terms such
as price and performance and also agree that the contract will be on certain
standard terms and conditions which are in writing and include an arbitration
agreement.'*°

Formality and incorporation. It is not necessary that an arbitration 2-042

agreement be a formal agreement, or that all the terms should be contained in one
document. Issues as to whether an arbitration agreement has been established can
arise however when it is purportedly incorporated from another document'*’ or
where further steps are required to make it effective.'** If an arbitration agreement
is not in writing, even in the broad sense used in the Act, it will not be governed
by the Arbitration Act 1996. It may nevertheless be a valid oral agreement, in
which case it will be governed by the common law.'*?

Signature unnecessary. Signature of a written agreement by the parties is 2-043

not required for an arbitration agreement to be valid under the UNCITRAL

'81 The majority considered that all the terms must be in writing, but Auld L.J. considered it sufficient
if the material in issue in the reference are evidenced in writing.
'82 Applied in Carillion Construction Ltd v Devonport Royal Dockyard Ltd {2003] B.L.R. 79, another
case under s.107 of the Housing Grants, Construction and Regeneration Act 1996.
183 For an example of an appeal from an arbitration award from a Lloyd’s salvage contract, see The
Owners of the Motor Vessel Tojo Maru v NV Bureau Wijsmuller (The “Tojo Maru”) [1972] A.C.
242.
184 DAC report, para.36.
185 Section 5(3) of the Arbitration Act 1996.
186 The limitations of a provision in identical terms in the Housing Grants, Construction and
Regeneration Act 1996 in the context of construction contracts were observed in Carillion Construc-
tion Ltd v Devonport Royal Dockyard Ltd [2003] B.L.R. 79.
'87 See paras 2-044 et seq.
188 For example in Oceanografia SA de CV v DSND Subsea AS (The ‘“Botnica”) [2006] EWHC 1360,
a charter-party containing a London arbitration clause was agreed “subject to the signing of
mutually agreeable contract terms and conditions” which in fact were signed by one party only.
Following a challenge to the tribunal’s jurisdiction the court held that, having proceeded with the
charter-party, the parties were bound by its terms, including the arbitration clause, on the basis of
both waiver and estoppel by convention, and the tribunal accordingly had jurisdiction.
189 See para.2-015.
 OL The Arbitration Agreement

Model Law!’ nor is signature obviously a mandatory requirement of the New

York Convention.'®! Signature is also not required under English law'?? but
problems may arise if an award which is based on an unsigned arbitration
agreement is sought to be enforced in another jurisdiction under the New York
Convention. These problems can be overcome by having all parties sign terms of
reference.'”*

(b) Incorporation by reference

2-044 Reference to another document. The terms of a contract may have to

be ascertained by reference to more than one document. Ascertaining which
documents constitute the contractual documents and in what, if any, order of
priority they should be read is a problem encountered in many commercial
transactions, particularly those involving shipping and construction. This issue
has to be determined by applying the usual principles of construction and
attempting to infer the parties’ intentions by means of an objective assessment of
the evidence. This may make questions of incorporation irrelevant'’* if for
example it is clear that the contractual documents in question are entirely separate
and no intention to incorporate the terms of one in the other can be established.
However, the contractual document defining and imposing the performance obli-
gations may be found to incorporate another document which contains an arbitra-
tion agreement. If there is a dispute about the performance obligations, that
dispute may need to be decided according to the arbitration provisions of that
other document. This very commonly occurs when the principal contractual
document refers to standard form terms containing an arbitration agreement.'”°
However the standard form wording may not be apt for the contract in which the
parties seek to incorporate it, or the reference may be to another contract between
parties at least one of whom is different. In these circumstances it may be possible
to argue that the purported incorporation of the arbitration agreement is ineffec-
tive.'”° The draftsmen of the Arbitration Act 1996 were asked to provide specific

™ Article 7, see Appendix 4. The 2006 amendments to the Model Law contain a long and short form
option which deals with the writing requirement. Neither expressly require signature. Option 1, see
Art.7(3), is in expressly very broad terms and provides that an agreement is in writing if its content
is recorded in any form, even if the agreement has been concluded orally.
™! Article II(2). See also generally, Landau, The Requirement for a Written Form of Arbitration
Agreement: when Written means Oral. CCA Congress Series, no.11 (2003), pp.19-81.
'? Section 5(2) of the Arbitration Act 1996.
3 e.g. pursuant to Art.18 of the ICC Rules.
As in The President of India v Metcalfe Shipping Co Ltd [1969] 2 QB. 123.
' See para.2-048 below. In Stretford v Football Association Ltd {2006] EWHC 479, which was affirmed
at [2007] EWCA Civ 238 though this point was not the subject of appeal, a licence was issued which
required compliance with Rules of Association which contained an arbitration clause. The obliga-
tion to observe the Rules was held to be a term of the licence and the arbitration agreement was
incorporated into it. See also Whiting v Halverson [2003] EWCA Civ 403 where a Rotary Club
member was held bound by an arbitration agreement contained in a club’s constitution.
196
See paras 2-046 et seq. below.
 Form of an Arbitration Agreement mnWw

guidance on the issue, but they preferred to leave it to the court to decide whether
there had been a valid incorporation by reference.!®”

Statutory guidance. The key question is whether the reference in an 2-045

agreement to a written form of arbitration clause or to a document containing an
arbitration clause constitutes an arbitration agreement. Section 6(2) of the Arbi-
tration Act 1996 provides: ‘““The reference in an agreement to a written form of
arbitration clause or to a document containing an arbitration clause constitutes an
arbitration agreement if the reference is such as to make that clause part of the
agreement.” The provision begs the question mhen is the reference such as to
make the clause part of the agreement. The courts struggled to find a consistent
answer before the passing of the 1996 Act,'°* although a more consistent approach
has now developed.

A matter of construction. The basic juridical exercise involved in all these 2-046
cases is the proper construction of general words of incorporation in one contract
referring to the terms of another contract or document.'”” ‘““The imputed mutual
intention of the parties has to be arrived at by general principles of construction
applicable to any other contractual term.””°° In practice however specific rules of
construction have been applied in this context and differing views have been
advanced as to the proper approach to be adopted. This is perhaps best illustrated
by the decision in Aughton Lid v MF Kent Services Ltd’°' where a sub-contractor’s
order provided for a sub-sub-contract to be ‘““on GC/Works/1” (a standard form
contract used by the British government as employer). The sub-sub-contractors
claimed that this was a reference to the contract between the main contractor and
the sub-contractor, which included an arbitration clause. The Court of Appeal
disagreed?” for two distinct reasons:

(i) per Ralph Gibson L.J.: The reference “on GC/Works/1” was not a
reference to the contract between the sub-contractor and the main con-
tractor, because the conditions of that contract could not be applied to the
sub-sub-contract without significant modification. It was therefore not a
written agreement”: it was a “direction in writing to a place where the
terms of the arbitration agreement [were] to be found”.*”*

7 See DAC report, para.42.

8 In Trygg Hansa Insurance Co Lid v Equitas Ltd [1998] 2 Lloyd’s Rep. 439 it was held that the pre-
1996 Act authorities were to be applied to determine whether the clause was indeed made part of
the agreement in the absence of any indication in s.6(2) as to how this was otherwise to be
determined. This was apparently also the intention of the drafters of the legislation: see DAC
report, para.42. The Arbitration Act 1950 was silent on incorporation by reference.
199 Evcess Insurance Co Ltd v Mander [1997] 2 Lloyd’s Rep. 119.
200 per Colman J. at 124.
29) (LOSES VRB HE Real:
202 Ayghton Lid v MF Kent Services Ltd {1991] 57 B.L.R. 1.
203 Within what is now s.5 of the Arbitration Act 1996.
204 Gibson L.J. in Aughton at [29].
 54 The Arbitration Agreement

(ii) per Sir John Megaw: There are three factors peculiar to arbitration agree-
ments to be considered. First, an arbitration agreement may preclude the
parties from bringing a dispute before a court. Second an arbitration
agreement has to be a written agreement,’ and third an arbitration
agreement is of a different nature from other types of clauses and con-
stitutes a self-contained collateral contract. These factors apply equally to
engineering contracts as they do to arbitration clauses in charterparties
which it is sought to incorporate into bills of lading, with the result that,
as in the charterparty cases,”°° there must be distinct and specific words
expressing the parties’ intention to make the incorporation.*””

Sir John Megaw therefore concluded that specific words were necessary to incor-
porate an arbitration clause and that the reference in a sub-contract to another
contract’s terms and conditions would not suffice to incorporate the arbitration
clause into the sub-contract.”°* His reasoning for imposing the requirement of
specific words of incorporation was based on three important factors peculiar to
arbitration agreements outlined above. However, in the same case, Ralph Gibson
L.J. reached the conclusion that express words of incorporation were not always
necessary and in some circumstances general words would be sufficient to effect
incorporation depending on the terms of the arbitration agreement. His preferred
approach was to look at the precise words of the contract alleged to permit
incorporation and to the precise terms of the arbitration agreement. If the terms
of the arbitration clause are such that they only apply to the contract in which they
appear, Ralph Gibson L.J.’s view was that general words of incorporation would
be insufficient, but if they apply to both then general words of incorporation are
sufficient.

2-047 Development of the case law. Sir John Megaw’s view in Aughton
followed the approach previously adopted in Thomas & Co v Portsea SS Co Ltd,”
and a number of cases both before and after the 1996 Act have adopted the same
approach. In Barrett & Son (Brickwork) Ltd v Henry Boot Management Ltd?'°
Lloyd J. relied on both Sir John Megaw’s approach in Aughton and the dicta of
Lord Diplock in Bremer Vulcan v South India Shipping?" to support the conclu-
sion that if a contract is to be incorporated into another contract there must be

“The case was decided under the previous legislation but the requirement for writing is now
contained in s.5 of the Arbitration Act 1996: see para.2—038.
°° Thomas & Co v Portsea SS Co Lid [1912] A.C. 1: see also para.2-056 below.
*07 Sir John Megaw in Aughton at [31] et seq.
Seat Siily
* 11912] A.C. 1. Although as Bowsher J. pointed out in Secretary of State for Foreign and Com-
monwealth Affaris v Percy Thomas Partnership & Kier International (1998) 65 Con. L.R. 11, the
Bremer Vulkan case was not dealing with incorporation. See also Federal Bulk Carriers Inc v Itoh &
Co Ltd (1989] 1 Lloyd’s Rep. 103.
*0° (1995) C.LL.L. 1026. See though Roche Products v Freeman Process Systems Ltd [1996] 80 B.L.R.
102; and Secretary of State
for Foreign and Commonwealth Affairs v Percy Thomas Partnership (1998)
Got Con AR ik
21171981] A.C. 909.
 Form of an Arbitration Agreement onSal

express reference to it in that other contract.*'? Hicks J. on the other hand

concluded in Roche Products Ltd v Freeman Process Systems Ltd?'3 that he should
give effect to the intentions of the contracting parties even if that was expressed
as a general reference to a document to be incorporated. He saw no justification
for a rule which artificially restricts the intention of the parties by requiring them
to use particular forms of words to achieve incorporation.
Subject to drawing a distinction between incorporation of an arbitration agree-
ment contained in a document setting out standard form terms and one contained
in some other contract between different parties,”"* judicial thinking seems to have
favoured the approach of Sir John Megaw in Aughton, namely that general words
of incorporation are not sufficient. Rather, particular reference to the arbitration
clause needs to be made to comply with s.6 of the Arbitration Act 1996, unless
special circumstances exist. This was the view taken by Judge Raymond Jack Q.C.
following a review of the relevant authorities in Tryge Hansa Insurance Co Ltd v
Equitas Ltd*\? and it was supported and confirmed by Evans L.J. in Anonymous
Greek Co ofGeneral Insurances, (The “Ethniki’”’) v AIG Europe (UK).?'°

Reference to standard form terms. If the document sought to be 2-048

incorporated is a standard form set of terms and conditions the courts are more
likely to accept that general words of incorporation will suffice.*!’ This is because
the parties can be expected to be more familiar with those standard terms,
including their arbitration clause.*!* In Sea Trade Maritime Corp v Hellenic Mutual
War Risks Association (Bermuda) Ltd, (The “Athena”) No.27!? the court drew a
distinction between what it described as a ‘“‘two-contract case’’, that is where the
arbitration clause is contained in a secondary document which is a contract to
which at least one party is different from the parties to the contract in question,
and “‘a single contract case” where the arbitration clause is in standard terms to
be found in another document.’”” Relying on dictum of Bingham L.J. in Federal

212 See also Cooperative Wholesale Society v Sanders & Taylor (1995) 11 Constr. Law Jo. 118; Trygg
Hansa Insurance Co Ltd v Equitas Ltd [1998] 2 Lloyd’s Rep. 439; Excess Insurance Co Lid v Cf
Mander [1997] 2 Lloyd’s Rep. 119. In Alfred McAlpine Construction Lid v RMG Electrical [1998]
A.D.R.L_J. 33 it was held that reference to terms applying to a sub-contract “‘as if fully set out
hereunder and ... fully incorporated herein” and the sub-contractor acknowledging that he fully
appreciates and understands them was sufficient to meet Sir John Megaw’s requirement of express
words of incorporation.
71571996] 80 B.L.R. 102.
214 See para.2-048 below.
215 [1998] 2 Lloyd’s Rep. 439. Applied in Cigna Life Insurance Co of Europe SA-NV v Intercaser SA de
Seguros y Reaseguros [2002] 1 All E.R. (Comm) 235; American International Specialty Lines Insurance
Co v Abbott Laboratories [2002] EWHC 2714.
716 [2000] 2 All E.R. 566 at 575.
217 The same will apply to standard rules and regulations which are incorporated into a contract:
Stretford v Football Association Ltd (2006] EWHC 479; Whiting v Halverson [2003] EWCA Civ
403.
218 See Modern Building Wales v Limmer and Trinidad Co [1975] 2 Lloyd’s Rep. 318; Extrudakerb
(Maltby Engineering) Ltd v Whitemountain Quarries Lid [1996] N.I. 567; Hackwood Ltd v Areen
Design Services Ltd (2006) 22 Const. L.J. 68. See also Andrew Tweeddale, “Incorporation of
Arbitration Clauses’, Arbitration (2002), Vol.68, No.1 at 48.
219 12006] EWHC 2530.
220 At [62].
 56 The Arbitration Agreement

Bulk Carriers Inc v C Itoh & Co Ltd (The ‘Federal Bulker”),’*' Langley J. said
that: “In principle, English law accepts incorporation of standard terms by the use
of general words and, I would add, particularly so when the terms are readily
available and the question arises in the context of dealings between established
players in a well-known market. The principle, as the dictum makes clear, does not
distinguish between a term which is an arbitration clause and one which addresses
other issues. In contrast, and for the very reason that it concerns other parties, a
‘stricter rule’ is applied in charterparty/bills of lading cases. The reason given is
that the other party may have no knowledge nor ready means of knowledge of the
relevant terms. Further, as the authorities illustrate, the terms of an arbitration
clause may require adjustment if they are to be made to apply to the parties to a
different contract.” The court therefore reinforced the distinction between incor-
poration by reference of standard form terms and of the terms of a different
contract, and concluded that in a single contract case general words of incorpora-
tion are sufficient, whereas by its nature a two-contract case may require specific
reference to the other contract.

2-049 When specific reference required. In Tiade Maritime Corp v Hellenic

Mutual War Risks Association (Bermuda) Ltd, (The “Athena”) No.2??? the court
referred in particular to the stricter approach which requires specific reference to
the arbitration agreement as being applicable in charterparty/bills of lading cases.
It has also been applied in other areas, notably reinsurance contracts and construc-
tion contracts.’** In principle however the rationale for requiring specific words of
incorporation, notably the absence of knowledge of the terms of another contract
between different parties and the need for adjustment of the terms as written, 1s
not limited to those situations. It is suggested therefore that the same approach
would apply generally in two contract cases even outside those particular fields.

2-050 Contrast with the Model Law. The current position therefore seems to
be that if the arbitration agreement is incorporated from a standard form a general
reference to those terms is sufficient, but at least in the case of reference to a non-
standard form contract in the context of construction and reinsurance contracts
and bills of lading a specific reference to the arbitration agreement is necessary. As
for reference to an arbitration agreement in non-standard form terms outside
those particular fields the position is less clear, but it seems that generally a specific
reference is needed.*** This leads to the rather odd result that the English courts
have in a number of cases applied the wording of s.6(2) of the Arbitration Act 1996
to support a restrictive approach, whilst courts in other jurisdictions interpreting

2111989] 1 Lloyd’s Rep. 103 at 105.

22 12006] EWHC 2530.
*3 "The submissions in Sea Trade Maritime Corp v Hellenic Mutual War Risks Association (Bermuda)
Lid (The “Athena”) No.2 |2006] EWHC 2530 at [62] referred specifically to reinsurance contracts
and construction contracts. Vor incorporation by reference in reinsurance contracts see para.2-055,
in construction contracts see para.2—053 and in bills of lading see para.2-056 below.
224 See para.2-047 above.
 Form of an Arbitration Agreement 57

the very similar wording of the pre-2006 version of Art.7(2) of the Model Law225
have taken a more liberal approach. This is tempered somewhat by the distinction
drawn in Trade Maritime Corp v Hellenic Mutual War Risks Association (Bermuda)
Lid, (The “Athena”) No.2’ but in any event the different approaches were
justified in Trygg Hansa on the basis that the DAC report did not simply intend
to apply Art.7(2) of the Model Law and the more liberal approach because it
specifically suggested that existing case law should be applied.22” This guidance
has led the English courts, in some cases at least, to apply the more restrictive
approach that appeared in the pre-1996 cases.

Company articles of association. A company’s articles of association 2-051

may incorporate an arbitration agreement. The question has arisen whether the
arbitration agreement applies to:

® disputes between members, and, if so, whether only to disputes which relate
to the affairs of the company or

® disputes between the company and its members and, if so, whether only to
disputes with members in their capacity as members and not some other
capacity.?28

It is a matter of construction of the individual article, but provisions of this type

are likely to be construed restrictively and, as a general rule, they apply only to
disputes between the company and one of its members in his capacity as a
member.’”’ Disputes have also arisen between members of a trading association
where the trading association has been a company and its articles include an
arbitration clause. The courts have rejected claims that the trading association’s
articles of association oblige the parties to submit their dispute to arbitration, and
held that the dispute is not caught by the arbitration clause.**°

Leases and other assignments of real property. Obligations 2-052

between landlord and tenant may last for a considerable time. As a result of the
length of the relationship documents other than the original lease, including sub-
leases, assignments, deeds and correspondence, come into existence. One or more
of the documents may contain an arbitration clause, and others may not. The
court has to decide as a matter of construction whether to read the documents
together and give effect to the arbitration clause. In Wade-Gery v Morrison, for

725 See Appendix 4.

226 [2006] EWHC 2530.
227 Paragraph 42 of the DAC report.
228 Hickman v Kent and Romney Marsh Sheep Breeders’ Association [1915] 1 Ch. 881; Beattie v Beattie
Ltd [1938] Ch. 708; London Sack & Bag Co Ltd v Dixon and Lugton Ltd [1943] 2 All E.R. 763.
229 Niote however that certain matters such as a winding up petition or a petition by a shareholder for
relief from unfairly prejudicial conduct under s.459 of the Companies Act 1985 cannot be referred
to arbitration in any event: see para./—039.
230 London Sack & Bag Co Ltd v Lugton Lid |1943] 2 All E.R. 763.
 58 The Arbitration Agreement

example, a supplemental deed varied the covenants in a lease, but the court held
that it did not vary the provision for arbitration.**!

2-053 Construction contracts and sub-contracts. Construction projects

usually involve sub-contractors and a common problem is whether the terms of
the main contract, including its arbitration clause, have been incorporated into a
sub-contract. As noted above*** the courts have not always been consistent about
whether these arbitration clauses are validly incorporated. For example in Modern
Buildings Wales Ltd v Limmer and Trinidad Co Ltd an order placed on sub-
contractors specified that it should be in the ‘“‘appropriate form for nominated
subcontractors (RIBA 1965 edition)”. There was no such form but the court held
that the parties meant to refer to the “green form”?** commonly used for sub-
contracts. Like the RIBA forms, the green form contained an arbitration clause,
which was held to be binding on the parties.?** In Aughton**> however, which was
also a construction case,*° the court declined to incorporate the arbitration
agreement into a sub-sub-contract. While the decisions are not always con-
sistent,**’ the court will in each case examine the language of the contracts in
question to see whether, applying general principles of construction, it provides a
clear indication of an intention to incorporate the arbitration provisions of the
main contract.*** Construction contracts are a field where the use of standard
forms are commonplace and accordingly the approach taken in Trade Maritime
Corp v Hellenic Mutual War Risks Association (Bermuda) Ltd (The ‘“‘Athena”’)
No.2?*° may be particularly appropriate. Indeed even when dealing with a two-
contract case, if the secondary document is stated to be based on standard form
terms containing an arbitration agreement then presumably specific reference to
the arbitration clause would not be needed.**”

SON (SSIS)) Ba Leal 270)

232 See para.2-047.
*° Published by the construction industry associations NFBTE and FASS.
34 Modern Buildings Wales Ltd v Limmer and Trinidad Co Ltd [1975] 1 W.L.R. 1281. The Court of
Appeal reached a similar conclusion, where the reference was again to an RIBA form, in Brightside
Kilpatrick Engineering Services v Mitchell Construction (1973) Ltd {1975] 2 Lloyd’s Rep. 493.
°35 Paragraph 2-046.
*8° See also Giffen (Electrical Contractors) Lid v Drake & Scull Engineering Ltd, Femwork Ventilation
Ltd v Same (1993) 37 Con. L.R. 84 and Astel-Reiniger Joint Venture v Argos Engineering and Heavy
Industries Co Ltd (1995) A.D.L.R.J. 41, where general rules of construction were applied. Contrast
Lexar Ltd (in administrative receivership) v Edgar W Taylor Ltd [1993] 65 B.L.R. 87, where Thomas
v Portsea (cited above) was applied. Bingham M.R. in Giffen suggested that the difference between
the two approaches might not be so large as it might seem but he preferred that of Gibson all
Portsea has subsequently been applied in Co-operative Wholesale Society Ltd v Saunders & Taylor
Lid (1994) 39 Con. L.R. 77 and in Barrett & Son (Brickwork) Lid v Henry Boot Management Ltd
(1995) C.L.L.L. 1026. See also Roche Products Ltd and Celletech Therapeutics Lid v Freeman Process
Systems Ltd and Haden Maclellan Holdings Ple and Black Country Development Corp v Kier
Construction Ltd [1996] 80 B.L.R. 102.
57 See also Barrett & Son (Brickwork) Ltd v Henry Boot Management Ltd (1995) C.1.L.L. 1026; Roche
Products v Freeman Process Systems Ltd [1996] 80 B.L.R. 102; and Secretary of State for Foreign and
Commonwealth Affairs v Percy Thomas Partnership (1998) 65 Con. L.R. 11.
238 See para.2—047.
*5° [2006] EWHC 2530: see para.2-048 above.
240 See para.2—(046.
 Form of an Arbitration Agreement 59

Unsigned construction contracts. It is, and has been, common com- 2-054
mercial practice in the construction industry for the employer to delay signing
contract documents even though the contractor starts work. The practice can lead
to disputes about whether an arbitration agreement has been entered into at all.2*!
These disputes are resolved by reference to the same principles of construction as
apply to determine whether a contract has come into existence,’*? namely by a
careful examination of whether all the terms have been agreed, despite the absence
of formality.

Re-insurance contracts. Re-insurance contracts often contain a provision 2-055

that, save as expressly provided, they follow the same form as the primary
insurance.**’ This is not normally sufficient to incorporate the arbitration clause
in the primary policy, which is regarded as ancillary to the main subject matter.?“
A specific reference to the arbitration clause is usually required, even applying the
approach Sea Trade Maritime Corp v Hellenic Mutual War Risks Association
(Bermuda) Ltd, (The “Athena”) No.2.2*

Bills of lading and charterparties. The question frequently arises in 2-056

shipping cases as to whether arbitration clauses in charterparties have been
incorporated into bills of lading.**° A bill of lading is a negotiable instrument and
a document of title, and this has been thought to affect the approach to be taken
to construction of its terms.**’ It is clear however that specific reference is
necessary to incorporate in a bill of lading an arbitration agreement in a charter-
party. This is so whether the requirement for specific reference which Sir John

41 See, e.g. Birse Construction Ltd v St David Ltd [1999] B.L.R. 194.
242 See Coltman Precast Concrete Ltd v W&F Simons (Contractors) Ltd 35 Con. L.R. 127 and Smith and
Gordon Ltd v Fohn Lewis Building Lid (1993) 44 Con. L.R. 11. In Smith and Gordon the Court of
Appeal was told that this practice was common in the building industry: Mann L.J. said he had little
sympathy, and that it was for parties to ensure they had a contract, and that they could not expect
the courts to find one for them.
+43 Various formulations are used, such as ‘‘same terms, exclusions, conditions, definitions and
settlements” or “‘same terms, clauses, conditions and warranties”.
244 Tryge Hansa Insurance Co Ltd v Equitas Ltd [1998] 2 Lloyd’s Rep. 439; Excess Insurance Co Ltd v
CJ Mander [1997] 2 Lloyd’s Rep. 119; Pine Top Insurance Co Ltd v Unione Italiana Anglo Saxon
Reinsurance Ltd [1987] 1 Lloyd’s Rep. 476; Cigna Life Insurance Co of Europe SA NV v Intercaser
SA de Seguros y Reaseguros [2002] 1 All E.R. (Comm) 235.
245 [2006] EWHC 2530. See para.2—048 above.
246 See, e.g. NV. Reederij Amsterdam v President of India (The “Amstelmolen”’) [1960] 2 Liloyd’s Rep. 82;
The ‘Elizabeth H’’ [1962] 1 Lloyd’s Rep. 172; Merak, The (Owners ofCargo on Board) v The Merak
(Owners) (The “Merak”’) [1965] P. 223; The “Phonizien’’ [1966] 1 Lloyd’s Rep. 150; Tradax SA v
Volkswagenwerk AG [1969] 2 Q.B. 599, affirmed [1970] 1 Q.B. 537; Federal Bulk Carriers Inc v C
Ttoh & Co Ltd (The ‘Federal Bulker”) [1989] 1 Lloyd’s Rep. 103; Daval Aciers D’Usinor et de Sacilor
v Armare Srl (The “Nerarno”’) [1996] 1 Lloyd’s Rep. 1.
247 In particular, subsequent endorsees might never have seen the charterparty and in the absence of
specific words of incorporation might not appreciate that they had become bound by provisions in
another contract which precluded them enforcing their rights in the courts: Excess Insurance Co Ltd
v CJ Mander [1997] 2 Lloyd’s Rep. 119. See also the comments of Bingham LJ. in Federal Bulk
Carriers Inc v C Itoh & Co Ltd (The “Federal Bulker”) [1989] 1 Lloyd’s Rep. 103 at 105 endorsed
in Trade Maritime Corp v Hellenic Mutual War Risks Association (Bermuda) Ltd, (The “Athena”
No.2 [2006] EWHC 2530.
 60 The Arbitration Agreement

Megaw advanced in Aughton*** as applicable to incorporation of arbitration agree-

ments in contracts generally, or just to certain two-contract cases as discussed in
Trade Maritime Corp v Hellenic Mutual War Risks Association (Bermuda) Ltd, (The
“Athena”) No.2.**? General words of incorporation in a bill of lading will not be
construed as incorporating the terms of an arbitration agreement in a charter-
party.?°° It is only where the charterparty or the bill of lading make specific
provision to that effect that the incorporation will be effected.??!
In addition to the fact that a bill of lading is a negotiable instrument, the
reasoning put forward for this approach in the bill of lading context is that general,
as distinct from specific, words of incorporation must be taken to cover only those
contractual provisions that are in substance germane or directly relevant to the
subject matter of the contract into which they are to be incorporated. They must
also be capable of operating in conjunction with that contract if so incorporated.?°7
An arbitration agreement between a ship owner and charterer is not considered
germane to the contractual rights and obligations that arise under the bill of
lading.*>*

2-057 Applicability of the arbitration agreement. The courts are reluctant

to give effect to arbitration clauses which on their face are inapplicable to the
contract into which it is sought to incorporate them.*** Some flexibility will be
permitted, however, depending on the degree to which the clause can be said to
be inapplicable.*° Thus in The “Rena K’*°° a charterparty provided ‘‘any dis-
putes which may arise under this charter to be settled by arbitration in London”’.
The bills of lading provided that: ‘All terms, clauses, conditions and exceptions
including the arbitration clause ... are hereby incorporated.” It was held that the
use of these specific words meant that the parties to the bill of lading intended the
arbitration clause to apply to disputes arising under the bill of lading, even though,
(i) prima facie the words were apt to cover disputes arising only under the

248 See para.2—046 above.

*4° [2006] EWHC 2530. See para.2-048 above.
°° The Delos, Owners of Cargo v Delos Shipping Ltd [2001] 1 All E.R. (Comm) 763; Federal Bulk
Carriers Inc v Itoh & Co Ltd (The ‘Federal Bulker’’) [1989] 1 Lloyd’s Rep. 103; Skips A/s Nordheim
and Others v Syrian Petroleum Co Ltd and Petrofina SA (The “Varenna’’) [1983] 2 Lloyd’s Rep. 592;
Siboti K/S v BP France SA [2003] EWHC 1278.
°°! Thomas & Co Ltd v Portsea SS Co Ltd (1912] A.C. 1; Merak, The (Owners of Cargo on Board) v
The Merak (Owners) (The ‘““Merak”’) [1965] P. 223; “Michael S” Evryalos Maritime Ltd v China
Pacific Insurance Co Ltd (The “MV Michael S”), (December 20, 2001); Daval Aciers D’Usinor et de
Sacilor v Armare Srl (The ‘“‘Nerarno”) [1996] 1 Lloyd’s Rep. 1; The Delos, Owners of Cargo v Delos
Shipping Ltd {2001] 1 All E.R. (Comm) 763; Welex AG v Rosa Maritime Ltd [2002] EWHC 762;
[2002] 1 All E.R. (Comm) 939 affirmed at [2003] EWCA Civ 938.
2 The “Annefield” [1971] 1 All E.R. 394.
°°’ Thomas & Co Ltd v Portsea SS Co Lid (1912] A.C. 1; The “Annefield”’ [1971] P. 168.
°" The “‘Annefield”’ {1971} P. 168, affirmed by the Court of Appeal at [1971] 1 Lloyd’s Rep. 1. As
Brandon J. noted in that case at 173 “when the arbitration agreement is, by its terms, applicable only
to disputes under the charterparty, general words will not incorporate it into the bill of lading so
as to make it applicable to disputes under the [bill of lading}”.
*** Or, as was said in Siboti K/S v BP France SA [2003] EWHC 1278, if “undue manipulation” is
required.
*°6 [1978] 1 Lloyd’s Rep. 545.
 Content of an Arbitration Agreement 61

charterparty and (ii) it was necessary to manipulate or adapt part of the wording
of the clause to give effect to the parties’ intention.2°”

4. CONTENT OF AN ARBITRATION AGREEMENT

(a) Drafting the arbitration agreement

Level of detail. One of the briefest arbitration agreements to be reported 2-058

merely stated: “arbitration to be settled in London’”’.*** Although that agreement
was enforced, it required a court action to achieve that result.*°? Greater detail is
desirable to achieve clarity and thereby certainty as to the parties’ intentions, and
to avoid unnecessary and expensive disputes prior to consideration of the sub-
stantive issues. Ultimately, if an agreement contains jurisdictional references
which are completely contradictory, the jurisdictional agreement may be void for
uncertainty.7”°
Further, whilst it is possible that parties might reach agreement on some issues
concerning the conduct of the arbitration after a dispute has arisen, that is often
more difficult than securing agreement at the time of negotiating the arbitration
agreement. Accordingly it is usually preferable to consider such matters at the
contract drafting stage.

Checklist of matters to be considered. When drafting an arbitration 2-059

agreement care needs to be taken to ensure that it is appropriate for the particular
circumstances of the case. ‘The following is a checklist of the matters which need
to be considered when drafting an arbitration agreement, together with references
to where they are addressed in this book. It may not be necessary to include
provision for all of them, but thought should be given as to whether they need to
be addressed in the particular circumstances of the case:

1. Have the parties been properly identified?—para.3—003.

2. Is there a clear reference to arbitration?—para.2—065.

3. What disputes are to be referred to arbitration?—para.2-072

4. Where is the seat of the arbitration to be?—paras 2-100 and 5-071 et

seq.
5. How is the substance of the dispute to be determined?—paras 2-090 et
seq.

257 See also Daval Aciers D’ Usinor et de Sacilor v Armare Srl (The “Nerarno”) {1996| 1 Lloyd’s Rep.
1; Film Finance Inc v The Royal Bank of Scotland [2007] EWHC 195.
258 Tritonia Shipping Inc v South Nelson Forest Products Corp {1966] 1 Lloyd’s Rep. 114.
259 See generally the approach of the courts at para.2—068.
260 See e.g. EJR Lovelock v Exportles [1968] 1 Lloyd’s Rep. 163 and see generally paras 2-026 et
seq.
 62 The Arbitration Agreement

What is the law of the arbitration to be?—paras 2-095 et seq.

Is there a choice of the procedural law?—paras 2-101 et seq.
How will the tribunal be appointed?—paras 4-024 et seq.

Is there an appointing authority?—para.2—062.

Is the tribunal required to have any particular attributes or qualifications?
Se
—paras 4-017 et seq.
11. How many members of the tribunal will there be?—para.4—016.
12. Are procedural and/or evidential rules or the rules of an institution to be
adopted, and, if so, which ones?—paras 2-061 and 5—089 et seq.
13. What will be the language of the arbitration?—paras 5-167 et seq.
14. Should the tribunal be given power to make provisional awards under s.39
of the Arbitration Act 1996?—para.5—085.
15. Is specific provision for confidentiality required?—paras 5-182 et seq.

16. Should applications and appeals to the court be excluded?—para.2—063.

17. Is a waiver of sovereign immunity required?—para.3—036.
18. Are provisions for multi-party arbitration, consolidation or concurrent
hearings required?—paras 3-040 et seq.

2-060 Amending the statutory regime. In addition to the matters set out
above, consideration should also be given more generally to whether the parties
wish to amend the statutory regime which will otherwise apply by virtue of the
Arbitration Act 1996.7°' The parties are specifically given the right to make
agreements in writing*®* about a wide range of matters subject only to “such
safeguards as are necessary in the public interest’’.*°* They may do so by adopting
a foreign procedural law.*°* In many instances the statute sets out the provisions
that apply in the absence of agreement otherwise between the parties. Some
provisions apply only if the parties agree that they should.” In other respects the
fallback position is that it is for the tribunal to decide matters where the parties
have not agreed them.?°°

*°! Section 4(2) of the Arbitration Act 1996 makes clear that the parties are allowed to make their own
arrangements by agreement in respect of the non-mandatory provisions of the 1996 Act.
*°2 The requirement for any agreement to be “in writing” stems from s.5(1) of the Arbitration Act 1996
although the section gives the expression a broad meaning.
26.
‘This gives effect to the principle of party autonomy set out in s.1(b) of the Arbitration Act
1996.
*°* Section 4(5) of the Arbitration Act 1996 and see para.2-103 below. The choice of a foreign law to
govern the substance of the dispute, for example as the proper law of the contract in question, will
not constitute an agreement as to the non-mandatory provisions of the of the Arbitration Act 1996:
see Lesotho Highlands Development Authority v Impreglio SpA [2005] URHL 43 at [37]; C v D [2007]
EWHC 1541 at [38]; XL Insurance Ltd v Owens Corning [2000] 2 Lloyd’s Rep. 500 at 508.
°° Such as the power to order consolidation of proceedings or concurrent hearings under s.35 or the
power to make a provisional award under s.39 of the Arbitration Act 1996.
26 Section 34(1) of the Arbitration Act 1996.
 Content of an Arbitration Agreement 63

The matters on which the parties may make agreements under the Arbitration
Act 1996, with references to the relevant section numbers in the statute, are as
follows.

The seat of the arbitration—s.3

Application of institutional rules—s.4(3)

Separability of arbitration agreement—s.7

Commencement of arbitral proceedings—s.14
The tribunal: number of arbitrators—s.15
The tribunal: whether third arbitrator to act as chairman—s.15
Procedure for appointment of arbitrators, including choice of an appointing
authority—s. 16

Power in case of default to appoint sole arbitrator—s.17

Failure of appointment procedure—s.18

Chairman—-s.20
Umpire—s.21

Decision-making where no chairman or umpire—s.22

Revocation of arbitrator’s authority—s.23
Procedure for challenge to arbitrators—s.24(2)

Resignation of arbitrator—s.25
Death of person by whom arbitrator appointed—s.26(2)
Filling of vacancy—s.27
Competence of tribunal to rule on its own jurisdiction—s.30
Procedural and evidential matters—s.34
Consolidation of proceedings and concurrent hearings—s.35
Legal or other representation—s.36
Power to appoint experts, legal advisors or assessors—s.37

General powers exercisable by the tribunal—s.38

Power to make provisional awards—s.39

Powers of tribunal in case of party’s default—s.41

Enforcement of peremptory orders of tribunal—s.42
Court powers exercisable in support of arbitral proceedings—s.44
Determination of preliminary point of law—s.45

Rules applicable to substance of dispute—s.46

 64 The Arbitration Agreement

Awards on different issues—s.47

Remedies—s.48

Interest—s.49
Extension of time for making award—s.50

Settlement—s.51
Form of award—s.52
Place where award treated as made—s.53

Date of award—s.54

Notification of award—s.55
Correction of award or additional award—s.57
Effect of award—s.58
Award of costs—s.61
Effect of agreement or award about costs—s.62

The recoverable costs of the arbitration—s.63

Recoverable fees and expenses of arbitrators—s.64

Power to limit recoverable costs—s.65

Appeal on point of law—s.69

Service of notices—s.76
Powers of court in relation to service of documents—s.77
Reckoning periods of time—s.78

Power of court to extend time limits relating to arbitral proceedings—s.79

2-061 Application of institutional rules. The 1996 Act specifically con-

templates that the parties may amend the statutory regime which will otherwise
apply by adoption ofinstitutional arbitration rules.*°’ Some of the institutions who
promulgate rules also offer their services in the administration of arbitrations. The
United Nations does not administer arbitrations, but its UNCITRAL Rules are
useful for ad hoc arbitrations, particularly because they offer a means of ensuring
the appointment of the tribunal.*°* The relevant UNCITRAL working group is
currently considering a proposal to amend the UNCITRAL Rules, which were

*67 Section 4(3) of the Arbitration Act 1996. On institutions and their rules see further paras 3-051 et
seg. and 5—090 et seg. and in particular paras 5-101 to 5—103.
°° When using the UNCITRAL Rules it is recommended that an appointing authority be expressly
provided for, as the mechanism in the rules for appointing one is cumbersome.
 Content of an Arbitration Agreement 65

published in 1976.*° The rules of a particular institution are not necessarily

incorporated into an arbitration agreement merely because a particular institution
has been made the appointing authority, and many institutions offer this as a
separate service. It is important therefore to provide for the arbitration to be
conducted in accordance with the institution’s rules and not just that it shall
appoint the tribunal. The incorporation of institutional rules in an arbitration
agreement is not essential, but it may well be useful and may save time and money
by providing a framework for the conduct of the arbitration.?”” The institutional
rules will also circumscribe the tribunal’s powers and jurisdiction, subject to the
terms of the arbitration agreement.*’! Individual provisions within sets ofinstitu-
tional rules should be considered to see if they give the parties what they want. For
example, do they want to give the tribunal all the powers conferred by Art.22 of
the LCIA Rules, which include a power to join third parties against the wishes of
one of the existing parties? Do they want the tribunal to have a very broad power
to grant interim and conservatory measures as provided by Art.23 of the ICC
Rules? Are there other matters not dealt with that the parties need addressed in
the arbitration agreement?*”* If appropriate the parties can amend the institutional
rules by express provision in the arbitration agreement, though it is then sensible
to make clear that the rules are adopted save as varied by the arbitration agree-
ment.

Appointing authority. An arbitration agreement should state how the 2-062

tribunal is to be appointed, in default of agreement between the parties. The use
of an institution to appoint the tribunal, where they take on the role of‘‘appointing
authority’’, may be considerably more effective, cheaper and quicker than applying
to the court. As mentioned in the previous paragraph, acting as an appointing
authority is offered by many institutions as a separate service from the admuinistra-
tion of arbitrations so it is important to clarify in the arbitration agreement which
role is to be performed. Adoption of an institution’s rules will usually make the
institution responsible for appointment of the tribunal.*”* In England the court
may also appoint arbitrators.*”*

Exclusion agreements. The parties to an arbitration agreement may 2-063

exclude the right to seek (i) leave to appeal to the court on points of law*”’ and (ii)
determinations of preliminary points of law by the court.*’”° An agreement to
dispense with reasons for the tribunal’s award constitutes an agreement to exclude

269 See Revision ofthe UNCITRAL RULES, Paulsson and Petrochilos, discussed at the 45th Seession
of Working Group IJ, mwm.uncitral.org
270
See paras 5-101 et seq.
271 The Bay Hotel and Resort Lid v Cavalier Construction Co Ltd |2001] UKPC 34.
272 Tn particular the matters specified at para.2-059.
273 But note that the UNCITRAL Rules provide for ad hoc rather than institutional arbitration so a
separate provision for an appointing authority should be included, although there is a default
procedure.
274 See paras 7-095 et seq.
275 Section 69(1) of the Arbitration Act 1996.
276 Section 45(1) of the Arbitration Act 1996.
 66 The Arbitration Agreement

the court’s jurisdiction in these respects.*”” The exclusion agreement may be

incorporated into the arbitration agreement by reference to another document in
which it is contained.?’* In domestic cases parties used to be permitted to exclude
the right to appeal only after the arbitration had begun, but this is no longer the
case.*’”? There used also to be a statutory limitation on this right in maritime,
commodity and insurance cases 280 unless the exclusion agreement was entered
into after the commencement of the arbitration or the contract was governed by
a law other than the law of England and Wales.**! Again this has been abolished***
so the law is now the same in all cases: appeals and determinations of preliminary
points oflaw can be excluded at the time of making the arbitration agreement. The
ICC Rules** and the LCIA Rules*** contain a valid exclusion agreement.”*°
Appeals are excluded to the extent permitted by law if these rules are adopted.
The wording of an exclusion agreement can be relatively straightforward: “The
parties hereby exclude all rights under sections 45 and 69 of the Arbitration Act
1996 to seek a determination of a preliminary point of law by the High Court, or
to appeal from any arbitration award.”

2-064 Standard form arbitration clauses. A reliable method of ensuring that

the more important features of an arbitration agreement are included 1s to use one
of the standard forms.**° 286 Using these standard forms provides a good measure of
comfort that an effective arbitration agreement has been entered into, and these
arbitration clauses, in conjunction with the rules which they incorporate, will
include many of the matters referred to in the checklist at para.2-059. However,
consideration should also be given to whether the particular features of the
transaction suggest further provisions are necessary. The particular rules chosen
should be examined to establish whether there are matters they omit to cater for
but which, in the particular circumstances of the case, need to be addressed. For
example, if the agreement containing the arbitration agreement is one of several
related contracts or there are several parties to the agreement all of whom are likely
to be involved in any dispute, then additional provision for multi-party arbitration
should be considered.**” Many standard form clauses do not address this, and nor

277 Section 69(1) of the Arbitration Act 1996.

278 Sukuman Ltd v The Commonmealth Secretariat {2006] EWHC 304.
*” Section 87 of the Arbitration Act 1996, see para.2—005.
“8° The so-called “special categories”.
281 Section 4(1) of the Arbitration Act 1979.
282 Section 109(2) of the Arbitration Act 1996.
283 Article 28.6.
28 Article 26.9.
**° Arab African Energy Corp Lid v Olieprodukten Nederland BV [1983] 2 Lloyd’s Rep. 419; Marine
Contractors Inc v Shell Petroleum Development Co of Nigeria Lid [1984] 2 Lloyd’s Rep. 77; Sanghi
Polyesters Lid v The International Investor {2000] 1 Lloyd’s Rep. 480.
286
For example the recommended clauses from the LCIA and ICC. Various other arbitration institu-
tions, including trade or professional associations, have their own suggested clauses, and reference
should be made to the institutions concerned.
°87 See paras 3-040 er seq.
 Content of an Arbitration Agreement 67

do the rules which they incorporate.*** Similarly confidentiality is a matter for

which specific provision may be desirable.?*”

Terms must be clear and certain. To be valid and enforceable, the 2-065
terms of an arbitration agreement must be clear and certain.?”° It is obviously
desirable for there to be a clear reference to arbitration,?’! and the procedure
envisaged by the clause, to the extent that it is articulated, must be consistent with
a provision for arbitration.*’* Whether the arbitration agreement meets the
requirement for clarity and certainty is assessed in the same way as it would be for
any other contract. In the absence of a clear reference to arbitration the court may
be forced to conclude that there is no arbitration agreement at all.?”> Even if there
is an arbitration agreement, disputes about its terms, whether it has been incorpo-
rated into the relevant contract and so forth can be costly and may delay or derail
altogether the arbitration. It is of fundamental importance that the parties’
agreement clearly and unequivocally reflects their wish to make arbitration the
means for final and binding resolution of disputes between them.?”*

Multiple Agreements. Where a transaction comprises a series of agree- 2-066

ments between the same parties, it is important to consider the dispute resolution
provisions in relation to each of them. Failure to do so may result in disputes
under the different agreements being resolved in different fora, which carries the
risk of additional expense and inconsistent decisions.*”> Depending on the scope
of the arbitration agreement it may be possible to bring disputes under different,
related agreements in one proceeding, but to avoid issues arising in relation to the
tribunal’s jurisdiction to do so it is advisable to provide specifically for arbitration
in the same terms in each agreement, or to cross refer to the applicable arbitration

288 The ICC Rules, for example, provide at Art.10 for what is to happen as regards formation of the
tribunal where there are multiple parties to an arbitration, but they do not empower the tribunal to
consolidate arbitrations or to join third parties or to hold concurrent hearings.
289 See paras 5-182 et seq. below.
299 Lobb Partnership Ltd v Aintree Racecourse Co Ltd [2000] B.L.R. 65.
29! Failure to do so may not necessarily be fatal—see Plant v Plant [2002] EWHC 2283, a case where
there was no express reference to arbitration. The clause in question provided that disputes were
““to be determined by the decision of aChancery or Commercial Queen’s Counsel appointed by the
parties... and such decision shall be final and binding”. The court proceeded to consider the
proper construction of the clause in the context of an application to stay court proceedings in favour
of arbitration. See also David Wilson Homes Lid v Survey Services Ltd (in liquidation) [2001] 1 All
E.R. (Comm) 449.
292 See e.g. AIG Europe SA v OBE International Insurance Ltd [2001] Lloyd’s Rep. 268 where the clause
in question was held to be “‘at best a procedure for conciliation which might or might not result in
a compromise of the dispute” despite express reference to the appointment of “an arbitrator”.
293 As for example in Al Midani v Al Midami [1999] 1 Lloyd’s Rep. 923. See also Flight Traming
International Inc v International Fire Training Equipment Ltd (2004) EWHC 721.
24 In Finnegan v Sheffield City Council [1988] 43 B.L.R. 124 a construction contract contained a clause
to the effect that the question whether disputes under the contract were to be referred to arbitration
was to be a matter for further negotiation. This was held not to be an arbitration clause. See also
AIG Europe SA v OBE International Insurance Ltd [2001] Lloyd’s Rep. 268.
295 See, for example, Samyer v Atari Interactive Inc [2006] 1.L. Pr. 8.
 68 The Arbitration Agreement

agreement. Such provisions are often known as consolidation and joinder provi-
sions and require considerable care when drafting to ensure that all relevant
factors are covered.””™

2-067 Option to arbitrate.*”° A disputes clause providing for the jurisdiction of

the courts subject to an option for either of the parties to refer the dispute to
arbitration is valid.7?’

2-068 The approach of the court. The court seeks to give effect to the parties’
intention to refer disputes to arbitration, and to allow the tribunal full jurisdiction
except in cases of hopeless confusion. So for example in Mangistaumunaigaz Oil
Production Association v United World Trade Inc??® an oil contract provided for
‘Arbitration, if any, by ICC rules in London’’. The respondents argued that the
words “‘if any” were inconsistent with an unconditional contractual undertaking to
arbitrate future disputes but the court found that the words were either surplusage
or an abbreviation for “if any dispute arises”. On the other hand an agreement
referring ‘“‘any dispute and/or claim” to arbitration in England followed by a
clause referring ‘“‘any other dispute”’ to arbitration in Russia was held to be void
for ambiguity, and was neither effective nor enforceable.*””
If the circumstances allow, the court will lean in favour of upholding the
arbitration agreement*”’ in order to give effect to the parties’ intentions.*°! Where
the wording used shows reasonably clearly that the parties intended to submit
their disputes to arbitration, then the court will uphold the arbitration agreement
even in the absence of mandatory language requiring disputes to be submitted to
arbitration.*°* Further, following the approach laid down in Investors Compensation
Scheme v West Brommich Building Society,°* the court may conclude that some-
thing has gone wrong with the language used and may correct that error.*°*

2-069 No presumption in favour of arbitration. There is no presumption

either in favour of or against arbitration and the construction of disputes clauses
will not be influenced by some general notion of favouring or disapproving of the

2a See paras 3-044 et seq.

© Unilateral options to arbitrate or litigate are dealt with at paras 2-017 to 2-018 above.
”” Westfal-Larsen and Co A/S v Ikerigi Compania Naviera SA (The “Messiniaki Bergen’’) [1983] 1
Lloyd’s Rep. 424; Navigazione Alta Italia SpA » Concordia Maritime Chartering AB (The “Stena
Pacifica”) [1990] 2 Lloyd’s Rep. 234.
811995] 1 Lloyd’s Rep. 617.
*” Lovelock Lid v Exportles [1968] 1 Lloyd’s Rep. 163.
*™ Astro Vendeor Compania Naviera SA v Mabanaft GmbH [1970] 2 Lloyd’s Rep. 267, Mocatta J.
In Paul Smith Lid v H&S International Holdings Inc (1991] 2 Lloyd’s Rep. 127, the court found a
way of reconciling two apparently conflicting clauses. See also Shell International Petroleum Co Ltd
v Coral Oil Co Ltd [1999] 1 Lloyd’s Rep. 72 and other cases referred to at para.2-027.
302
Lobb Partnership Ltd v Aintree Racecourse Co Lid [2000] B.L.R. 65.
3°3 [1998] 1 All E.R. 98.
°°! Nine Gladys Road Lid v Kersh [2004] EWHC 1080.
 Content of an Arbitration Agreement 69

process.*°? Rather in each case it is a matter of the proper construction of the

parties’ agreement. The Court of Appeal has however said that any jurisdiction or
arbitration clause in an international commercial contract should be liberally
construed.*°° '

The presumption of “one-stop adjudication”. The legislative pur- 2-070

pose behind the 1996 Act was the promotion of one-stop adjudication.*°” Accord-
ingly, in considering the scope of an arbitration clause the court will apply the
presumption that the parties have agreed to one forum for dispute resolution.>°°
Where the parties have agreed an arbitration clause they are presumed to have
intended to resolve their disputes through arbitration, and not by means of several
different forms of dispute resolution including both arbitration and the courts.*°°
This presumption has been given forceful judicial expression, most recently in
Fiona Trust & Holding Corp v Yuri Privalov*'® where it was described as a
“powerful” reason for a liberal interpretation of arbitration clauses,*'! and Pre-
mium Nafta Products Ltd v Fili Shipping Co Ltd.3'!* The Court of Appeal con-
sidered that no commercial man would knowingly create a system that required
that the court should first decide whether the contract should be rectified or
avoided or rescinded, before the arbitrator could go on to resolve the dispute that
had arisen. Often cited also is the reluctance expressed by Bingham L.J. ‘‘to
attribute to reasonable parties an intention that there should in any foreseeable
eventuality be two sets of proceedings’”’.*!? Citing that dictum, Hoffmann L.].
stated that the presumption “merely reassures one that the natural meaning of the
words [of the arbitration agreement] produce a sensible and_ business-like
result”’.*'*
9 313
The judiciary also showed their awareness of the adverse effects of the

3°5 Overseas Union Insurance Ltd v AA Mutual International Insurance Co Ltd [1988] 2 Lloyd’s Rep. 63.
The courts will however strive to give effect to the arbitration process where at all possible and to
uphold arbitration awards where at all possible. See for example London Underground Ltd v Citylink
Telecommunications Ltd [2007] EWHC 1749 (TCC).
306 Fiona Trust & Holding Corp v Yuri Privalov [2007] EWCA Civ 20. See further paras 2-074—2-075,
affirmed in Premium Nafta Products Ltd v Fili Shipping Co Ltd [2007] UKHL 40.
3°7 See Lesotho Highlands Development Authority v Impreglio SpA [2005] URHL 43 at [34]. In Capital
Trust Investments Ltd v Radio Design TF AB [2002] 2 All E.R. 159.
308 See, for example, Asghar v The Legal Services Commission [2004] EWHC 1803; Er Plus SA v Welter
(2906] 1 Lloyd’s Rep. 251.
309 See for example Capital Trust Investments Lid v Radio Design TF AB [2002] 2 All E.R. 159 where
the court emphasised that the parties would have wanted one tribunal to determine all claims which
could fairly be said to arise out of an application for shares, including claims for fraudulent or
negligent misrepresentation.
31° [2007] EWCA Civ 20.
311 See also Benford Ltd v Lopecan SL [2004] EWHC 1897; [2004] 2 Lloyd’s Rep. 618 where the court
applied the presumption to construe a proviso to an arbitration agreement as covering both claims
and cross claims amounting to a transactional set-off such that the court was entitled to retain
jurisdiction over both.
311 [2007] UKHL 40 at [13].
312 Ashville Investments v Elmer Contractors Lid [1989] 1 Q.B. 488 at 517, similarly, Balcombe L.J. at
503.
313 Harbour Assurance Co (UK) Ltd v Kansa General International Insurance Co Ltd [1993] 1 Lloyd’s
Rep. 455 at 470. See also Rix J. in Aggeliki Charis Compania Maritima SA v Pagnan SpA [1994] 1
Lloyd’s Rep. 168 at 172: Leggatt L.J. in the same case on appeal at [1995] 1 Lloyd’s Rep. 87 at
on
 70 The Arbitration Agreement

contrary view on London’s continuing pre-eminence as a centre for international

arbitration,*!* which fortified the presumption for “‘one-stop adjudication”.

(b) Scope of the arbitration agreement

2-071 Submitting disputes to arbitration. In order to determine whether a

particular dispute has been validly referred to arbitration a number of aspects need
to be considered. First, is the dispute capable of being referred to arbitration at all?
For example, disputes about a person’s civil status or criminal liability are not
amenable to arbitration. This issue of arbitrability is dealt with in Ch.1°'
Secondly, is the type of dispute that has arisen within the scope of the particular
arbitration agreement? This will be the focus of the following paragraphs. Thirdly,
even if disputes of the type in question are within the terms of the arbitration
agreement, does the dispute fall within the scope of what was actually referred by
the parties in the particular reference? This aspect is addressed in Ch.5.*!°

2-072 What matters are within the scope of the arbitration agree-
ment? The question over what matters does the arbitration agreement confer
jurisdiction on the tribunal turns on the particular form of words used. The trend
is against drawing fine distinctions on the basis of the form of words used*’’ or, as
Evans J. put it in Overseas Union Insurers Ltd v AA Mutual International Insurance
Co Ltd*'*: “{having] the lawyers engage in minute semantic analysis in the guise
of ascertaining what the parties’ intentions were.” Hirst J. expressed little relish
for “‘an intricate and often regrettably hair-splitting exercise in weighing and
contrasting the effect of [the] ... prepositions encountered in arbitration
agreements”’,*'” while Mustill L.J. has referred to the tendency to avoid nice
distinctions and give the language of the arbitration agreement its natural mean-
ing.**° Nevertheless a party is entitled to object to a tribunal assuming jurisdiction
over a dispute which falls outside what the parties have agreed in their arbitration
agreement to refer,**! and it is therefore important to consider the scope of the
arbitration agreement and whether the dispute which has arisen falls within its
terms on a true construction of that agreement.*?? Whilst it is very common for
arbitration agreements to refer all disputes**’ arising under a particular contract to

*™ Leggatt L.J. in Harbour Assurance Co (UK) Ltd v Kansa General International Insurance Co Ltd
[1993] 1 Lloyd’s Rep. 455 at 466.
315 At paras 1-033 et seq.
16 See para.5—026 below.
*'” Fiona Trust & Holding Corp v Yuri Privalov (2007) EWCA Civ 20, affirmed in Premium Najfia
Products Lid v Fili Shipping Co Lid |2007]| UKHL 40. See further paras 2-074 et seq. below.
71811988] 2 Lloyd’s Rep. 63 at 67.
*” Ethiopian Oilseeds & Pulses Export Corp v Rio Del Mar Foods Inc [1990] 1 Lloyd’s Rep. 86.
°° Société Commerciale de Reassurance v ERAS (Internationale) Ltd (formerly ERAS (UK)) [1992] 1
Lloyd’s Rep. 570.
*2! See generally paras 5-060 er seq.
°° Metal Distributors (UK) Lid v ZCCM Investment Holdings Ple [2005] EWHC 156. For the position
on cross claims, set-off and counterclaims see para.6-016,
** As regards use of the terms “differences” or “disputes” in an arbitration agreement see para.5—003
below.
 Content of an Arbitration Agreement a|

arbitration, the parties may deliberately have chosen to refer some but not all types
of dispute under their contract to arbitration.*** This occurs for example where
the parties wish some disputes, such as those relating to technical or valuation
issues, to be submitted to expert determination.*”° Alternatively if the arbitration
agreement forms part of a settlement agreement rather than a transactional
agreement it may well limit the scope of the matters which may be submitted to
arbitration.**° Accordingly a close examination of the scope of what has been
referred will be necessary as the tribunal will only have jurisdiction to hear
disputes that fall within the arbitration agreement.

When does the issue arise? Issues concerning the scope of the arbitration 2-073
agreement and therefore the tribunal’s jurisdiction can arise at several stages:

@ at the outset of the reference, the question arises whether a particular issue
is or 1s not one that should be referred to arbitration under the terms of the
arbitration agreement;
® during arbitration proceedings, issues may be raised concerning whether a
reference as constituted is wide enough to resolve a particular dispute or
aspect of a dispute; and
® at the enforcement stage, the enforcing court may need to decide whether the
scope of the award is wider than permitted by the agreement to arbitrate
and/or the terms of the reference.

The discussion which follows should be read in the light of the statutory restric-
tions on the right to make tardy objections to jurisdiction*”’ and the courts’ desire
to give effect to the wishes of parties and their choice of dispute resolution
mechanisms in particular. Even if arguments can be deployed to defeat the
tribunal’s jurisdiction on the basis of the original arbitration agreement, it may be
possible to argue that there has been an “‘ad hoc” submission agreement*** and/or
that the other party is estopped from challenging jurisdiction as a result of an
implied agreement to arbitrate.*”’

524+ See also para.2—004 above in relation to non-contractual causes of action.

525 See para.2—037 above in relation to hybrid clauses.
326 See, for example, Plant v Plant [2002] EWHC 2283 where it was held that the relevant clause was
only applicable to disputes arising under specific provisions of a settlement agreement and did not
apply to disputes generally under the agreement. See also T&N Lid v Royal & Sun Alliance Ple
[2004] Lloyd’s Rep. 102.
327 Section 73 of the Arbitration Act 1996, cf. Model Law, Art.4 (see Appendix 4) and see paras 5—065
and 8-065.
328 See para.2—006.
329 As in Jones Engineering Services Ltd v Balfour Beatty Building Ltd (1992) A.D.L.RJ. 133. This was
also argued, without success in Cia Maritima Zorrosa SA v Sesostris SAE, (The “Marques de
Bolarque’”’) [1984] 1 Lloyd’s Rep. 652 and Allied Vision Ltd v VPS Film Entertaiment GmbH [1991]
1 Lloyd’s Rep. 392. In both these cases there were reservations of the right to object to an
arbitrator’s jurisdiction which were not oyerridden by subsequent ad hoc submissions. See also
Almare Societa di Navigazione SpA v Derby and Co Ltd (The “Almaea Prima”’) |1989] 2 Lloyd’s
Rep. 376; Jones v Balfour Beatty (1992) A.D.L.R.J. 133 was distinguished in M7 Gleeson Group Plc
v Wyatt ofSnetterton Ltd (1994) 42 Con. L.R. 14. See also Lesser Design & Build Lid v University
ofSurrey [1991] 56 B.L.R. 57. For implied agreements to arbitrate see para.2—016.
 Ve The Arbitration Agreement

(c) Specific wordings

2-074 Current position. In Fiona Trust & Holding Corp v Yuri Privalov**® the
Court of Appeal reviewed the authorities on the meanings to be given to different
formulations of arbitration agreement wordings. Longmore L.J., accepting that
33h.
“not all these authorities are readily reconcilable”, went on to say**':

“Hearings and judgments get longer as new authorities have to be considered. For our
part we consider that the time has now come for a line of some sort to be drawn and a
fresh start made at any rate for cases arising in an international commercial context.
Ordinary business men would be surprised at the nice distinctions drawn in the cases and
the time taken up by argument in debating whether a particular case falls within one set
of words or another very similar set of words. If business men go to the trouble of
agreeing that their disputes be heard in the courts ofa particular country or by a tribunal
of their choice they do not expect (at any rate when they are making the contract in the
first place) that time and expense will be taken in lengthy argument about the nature of
particular causes of action and whether any particular cause of action comes within the
meaning of a particular phrase they have chosen in their arbitration clause.”

The approach advocated by the Court of Appeal was that any jurisdiction or
arbitration clause in an international commercial contract should be liberally
construed. The words “arising out of” should cover every dispute except a
dispute as to whether there was ever a contract at all. Although previously the
words “‘arising under the contract” had sometimes been given a narrower mean-
ing, that should no longer be so. The words ‘‘out of” and ‘tunder” should be
widely construed.**'* This approach was whole heartedly endorsed by the House
of Lords in Premium Nafta Products Ltd v Fili Shipping Co Ltd.**!°

2-075 Broad interpretation favoured. Fiona Trust*? provided a welcome state-

ment of principle from the Court of Appeal*** which has now been endorsed by
the House of Lords in Premium Nafta Products Ltd v Fili Shipping Co Ltd>* > It
reflects what has tended to be a broad approach to the construction of arbitration
clauses which has been prevalent since the coming into force of the Arbitration
Act 1996. A recurring question is the extent to which tort claims fall within
arbitration agreements contained in a contract.*** Clearly they can do so, but there

330 [2007] EWCA Civ 20.

we NAL.
see Ata Sis
$31» [2007] UKHL 40 at [12].
332 [2007] EWCA Civ 20 at [17].
*%s Subsequent decisions indicate the approach is well received: Film Finance Inc v The Royal Bank of
Scotland [2007] EWHC 195; Mabey and Johnson Ltd v Danos and others [2007] EWHC 1094.
*33.12007] UKHL 40.
*°* See for example Empresa Exportadora de Azucar v Industria Azucarera Nacional SA (The “Playa
Larga”’ and The “Marble Islands”) [1983] 2 Lloyd’s Rep. 171; The “Angelic Grace” [1994] 1 Lloyd’s
Rep. 168; Astro Vencedor Compania Naviera SA v Mabanafi GmbH [1970] 2 Lloyd’s Rep. 267;
Ulysses v Huntingdon [1990] 1 Lloyd’s Rep. 160.
 Content of an Arbitration Agreement #3

was some authority that particular wording may not be sufficient to achieve that.°35
The tendency now is very much to treat claims based on other causes of action as
within the tribunal’s jurisdiction, particularly if they relate to the same facts as
other contractual claims falling within the arbitration agreement. So, for example,
in Et Plus SA v Welter**° a clause submitting to arbitration “any potential disputes
regarding the performance or the interpretation of this contract” was held to
extend to tort claims, provided they were sufficiently connected to the perform-
ance or non-performance of the contract. Similarly in Asghar v Legal Services
Commission**’ the relevant provision covered “disputes... concerning alleged
breaches of this contract”. Lightman J. held that the tort claims that were raised
had “the closest possible connection with the contract and the rights and duties
of the parties thereunder and at the very least critical issues in respect of each of
those causes of action would be the subject of arbitration. The resolution of the
contractual claims could not sensibly or practically be divorced for the resolution
99338
of the non-contractual claims.

Standard wordings and court rulings. In light of the clear and 2-076
authoritative statements in Fiona Trust & Holding Corp v Yuri Privalov**’ and
Premium Nafta Products Ltd v Fili Shipping Co Ltd**°* it seems likely that the case
law, and in particular some of the fine if not inconsistent distinctions,**? that
evolved as to the scope of what particular words or phrases refer to arbitration are
now very likely to fall into disuse.**' In any event it should be borne in mind that
previous rulings are of limited assistance and should be treated with caution given
the need to construe the particular arbitration agreement in question. As Evans J.
said in Overseas Union Insurers Ltd v AA Mutual International Insurance Co Ltd***:
“reported decisions in earlier cases, even of high authority, cannot necessarily be

335 Ashville Investments Ltd v Elmer Contractors Ltd [1989] Q.B. 488 at 508; Filiite (Runcorn) Lid v
Aqua-Lift (a firm) {1989} 45 B.L.R. 27.
$36 12006] 1 Lloyd’s Rep. 251; [2005] EWHC 2115.
87 [2004] EWHC 180.
338 See generally para.2-004 above in relation to non-contractual claims.
339 [2007] EWCA Civ 20.
33% [2007] UKHL 40.
340 For example, in Ashville Investments Ltd v Elmer Contractors Lid [1989] Q.B. 488 claims for mistake
and misrepresentation were held to be covered by an arbitration agreement which referred “any
matter or thing of whatsoever nature arising thereunder or in connection therewith” to arbitration.
However, in Fillite (Runcorn) Ltd v Aqua-Lift (a firm) [1989] 45 B.L.R. 27, claims for mis-
representation and negligent misstatement were found not to be covered by an arbitration agree-
ment which referred “any dispute or difference arising under these heads of agreement” to
arbitration. There is no substantive difference in effect between a clause “thereunder” and “under”
and so it was the expression “in connection therewith” as used in Ashville v Elmer which widened
its scope. See also Chimimport Ple v G D'Alesio SAS (The “Paola d’Alesio”) {1994] 2 Lloyd’s Rep.
366 at 372.
441 The Court of Appeal referred specifically to the international commercial context, but it is
suggested that the same should apply in the domestic context. It must be doubtful whether
businessmen in England would respond any differently from the their counterparts in the inter-
national context. Whilst there may be a greater awareness of the historical limitations of particular
forms of wording the area has always been subject to some uncertainty and of course if particular
claims are sought to be excluded from the scope of the arbitration agreement that can be achieved
by express provision to that effect.
342 11988] 2 Lloyd’s Rep. 63 at 66.
 74 The Arbitration Agreement

binding in later cases, unless exceptionally the relevant words and all the relevant
circumstances are the same in both cases. Even then, the binding nature of the
earlier decision would only become relevant if the Court in the later case, if
unaided by authority, would reach a contrary conclusion as to the natural and
proper meaning of the words in question.” That said, it is perhaps premature to
abandon entirely the guidance given, so the following paragraphs will address
particular wordings albeit that the authorities referred to have now to be treated
with considerable circumspection given the recent authorities referred to above.

2-077 “All” or “any” differences, disputes or claims. The most compre-

hensive forms of wording are those which refer to the decision of the tribunal each
and every dispute between the parties by use of the words “‘all” or ‘“‘any”. This
may be expressed by reference to the terms differences, disputes or claims.*** An
arbitration agreement referring ‘“‘any dispute or difference” to arbitration was
found wide enough to cover the effects of exceptional dislocation and delay
notwithstanding that the disputes clause provided that they were to be assessed by
mutual agreement. Once the parties had clearly agreed to differ about those issues
they fell within the arbitration clause.***

2-078 Disputes “arising out of” or “arising under” the contract. As

mentioned above,*** the phrases ‘‘disputes arising under the contract” and ‘‘dis-
putes arising out of the contract’? were specifically considered by the Court of
Appeal in Fiona Trust**° who concluded that they should cover every dispute
except a dispute as to whether there was ever a contract at all.**’ Although
previously the words “‘arising under the contract” had sometimes been thought to
have a narrower meaning, that should no longer be so.*** The words “‘out of” and
“under” should be widely construed.**” Accordingly the earlier case law suggest-
ing that a provision referring “‘disputes arising out of the contract’? would not
include claims for a contribution under the Civil Liability (Contribution) Act

*S Government of Gibraltar v Kenney [1956] 2 Q.B. 410; Re an arbitration between Hohenzollern Actien
Gesellschaft fur Locomotivban and the City of London Contract Corp (1886) 54 L.T. 596; Ashville
Investments Ltd v Elmer Contractors Ltd [1989] Q.B. 488 at 508. See paras 5-003 er seg. for the
significance of the terminology used.
“4 Vosper Thorneycrofi v Ministry of Defence [1976] 1 Lloyd’s Rep. 58.
*45 See para.2-074.
**° [2007] EWCA Civ 20. See also Premium Nafia Products Ltd v Fili Shipping Co Ltd [2007] UKHL
40) which affirmed the Court of Appeal’s decision.
7 See Mustill & Boyd at 120 referred to in Fiona Trust and also in Ethiopian Oilseeds & Pulses Export
Corp v Rio Del Mar Foods Inc [1990] 1 Lloyd’s Rep. 86. See also Fillite (Runcorn) Ltd v Aqua-Life
(a firm) |1989| 45 B.L.R. 27 where Nourse L.J. said at 44 that the preposition “under” presupposes
that the noun which it governs has some existence, and therefore an arbitration clause with that
wording cannot be used to question the contract’s existence.
“Tn Heyman v Darwins Ltd [1942] A.C. 356 both Lord Wright (at 385) and Lord Porter (at 399)
indicated that “arising out of” had a wider meaning than “arising under’; see also Government of
Gibraltar v Kenney {1956| 2 Q.B. 410 at 421; Chimimport v D’Alesio [1994] 1 Lloyd’s Rep. 366. Cf.
Union of India v EB Aaby’s Rederi A/S (The “Evje”) [1975] A.C. 797 at 814 and 817; Ulysses
Compania Naviera SA v Huntingdon Petroleum Services Ltd (The ‘‘Ermoupolis”’) [1990] 1 Lloyd’s
Rep. 160.
*™ See also Mabey and Johnson Ltd v Danos and others [2007] EWHC 1094.
 Content of an Arbitration Agreement 75

1978°°° or that “disputes arising under the contract” would not cover rectification
claims**’ would no longer seem to apply. The words ‘“‘disputes arising out of” have
generally been held to have a wide meaning*** but the Court of Appeal’s approach
represents a shift towards a broader interpretation of the words “‘arising under of
the contract’’.2) 353

Disputes “in connection with”, “in relation to”, or “regard- 2-079

ing” a contract. These words, which are frequently encountered and are to
be given the same meaning,*** were at one time given a restricted interpretation,*>>
but are now well established as having a broad meaning.*°° They have been held°7
to include claims for rectification of a contract,*°* as well as mistake and mis-
representation.*°” They may also be sufficient to catch disputes arising under
another contract related to the contract containing the arbitration clause.*°”

Disputes “‘concerning alleged breaches of the contract’’. This 2-080

phrase was held not to be confined to causes of action for breach of contract but
to include all disputes which have at their heart the issue of breach of contract
including claims for conspiracy, misfeasance in public office and inducement to
commit breach of contract.*°!

Disputes “with respect to the construction of”. Where the arbitra- 2-081
tion agreement applies to disputes concerning “‘the construction” of a document

350 X Ltd v Y Ltd (2005) B.L.R. 341. See para.6—-111 for the tribunal’s power to award a contribu-
tion.
35! Heyman v Darwins [1942] A.C. 356; Government of Gibraltar v Kenney [1956] 2 Q.B. 410; Crane v
Hegeman-Harris Co Inc [1939] 1 All E.R. 622; and Ashville Investments Ltd v Elmer Contractors Ltd
[1989] Q.B. 488. The significance of these authorities was in any event doubtful given the statutory
power, absent agreement otherwise, for tribunals to order rectification under s.48(5)(c) of the
Arbitration Act 1996: see para.6—132 below.
352 Heyman v Darwins Ltd [1942] A.C. 356; Government of Gibraltar v Kenney [1956] 2 Q.B. 410; Kruse
v Quester & Co Ltd [1953] 1 QB. 669; Mantovani v Carapelli SpA [1978] 2 Lloyd’s Rep. 63;
Empresa Exportadora de Azucar v Industria Azucarera Nacional SA (The “Playa Larga” and The
“Marble Islands’’) [1983] 2 Lloyd’s Rep. 171; Ethiopian Oilseeds & Pulses Export Corp v Rio Del Mar
Foods Inc [1990] 1 Lloyd’s Rep. 86. For a recent example see Capital Trust Investments Lid v Radio
Design TF AB [2002] 2 All E.R. 159.
353 With regard to claims in tort see para.2-004 and para.2-075 above.
354 Er Plus SA v Welter [2006] 1 Lloyd’s Rep. 251.
355 As in Lawson v The Wallassey Local Board (1882) 11 Q.B.D. 229, where “any difference ...
concerning anything in connection with this contract” was held not to cover a dispute about an
implied term that certain other work on the site should not be delayed.
356 Woolfv Collis Removal Service [1948] 1 K.B. 11; ASB v CGD [1982] | Lloyd’s Rep. 166; Jagger v
Decca Music Group Ltd [2004] EWHC 2542; el Nasharty v J Sainsbury Ple [2003] EWHC 2195;
Faghirzadeh v Rudolf Wolff [1977] 1 Lloyd’s Rep. 630 at 641.
357 Ashville Investments Ltd v Elmer Contractors Lid [1989] Q.B. 488.
58 This remedy is now available in any event under s.48(5)(c) of the Arbitration Act 1996: see
para.6—114.
359 See the cases referred to at para.2—076.
300 4&5B v C&D [1989] 1 Q.B. 488.
361 Aschar v The Legal Services Commission [2004] EWHC 1803 at [21].
 76 The Arbitration Agreement

this refers to the meaning or interpretation of the document.* That would not
cover claims for rectification.*°? However in Macepark (Whittlebury) Ltd v Sar-
geant (No.1) case* it was held that the addition of the words “or effect” to “the
construction” of a document did encompass a jurisdiction to deal with a claim for
rectification. The court reasoned that the words “‘or effect” suggested something
more was intended that just the meaning of the document and would include what
it is the parties must do or not do under the document as a matter of substance,
which would include rectification. ,

2-082 Preference for wording in wide terms. The preceding paragraphs

demonstrate that in most cases the preferred course is to draft an arbitration
agreement covering future disputes in the widest possible terms. Such a broad
formula was used in Government of Gibraltar v Kenney*®: “any dispute or differ-
ence which arises or occurs between the parties in relation to any thing or matter
arising out of or under this agreement”. The ICC recommended wording is “All
disputes arising out of or in connection with the present contract shall be finally
settled under the Rules of Arbitration ...” The LCIA form is more explicit:
“Any dispute arising out of or in connection with this contract, including any
question regarding its existence, validity or termination, shall be referred to and
finally resolved by arbitration

(d) Particular types of dispute

2-083 Fraud. Fraud claims can be within the scope of an arbitration agreement. Under
previous legislation,*°° the court could revoke the authority of a tribunal to deal
with claims involving issues of fraud and determine those claims itself. This
provision has been repealed.*°’

2-084 Consumers contracts. Under earlier legislation®®’ consumers were not

always bound by their arbitration agreements. The provisions were unsatisfac-
tory*® and were found by the Court of Appeal to be contrary to Arts 6 and 59 of
the ‘Treaty of Rome because they discriminated against non-English parties by
preventing them from having the same right that English parties had to treat the
arbitration provisions as optional.*”” Consumer arbitration agreements are now
dealt with in ss.89 to 91 of the Arbitration Act 1996 which give effect to the Unfair

362
Ashville Investments Ltd v Elmer Contractors Lid [1989] Q.B. 488 at 508; Macepark (Whitlebury) Lid
v Sargeant (No.1) [2002] W.L. 1876043, Ch D.
°° Macepark (Whittlebury) Lid v Sargeant (No.1) [2002] W.L. 1876043, Ch D.
*°4 Macepark (Whittlebury) Lid v Sargeant (No.1) [2002] W.L. 1876043, Ch D.
365 11956] 2 Q.B. 410.
*©6 Section 24(2) of the Arbitration Act 1950.
*°7 Section 107(2) of the Arbitration Act 1996.
*°8 Consumer Arbitration Agreements Act 1988.
*69 See DAC report, paras 332 et seg.
°° Philip Alexander Securities and Futures Ltd v Bamberger: Same v Gilhaus [1996] C.L.C. 1757.
 Content of an Arbitration Agreement a

Terms in Consumer Contracts Regulations 1999.37! Under these provisions an

arbitration agreement’? where one of the parties is a consumer is unfair insofar
as it relates to a claim for an amount which does not exceed a figure specified by
statutory instrument, currently £5,000.°7* A consumer is a natural or legal
person*”* who, in making a contract, is acting for purposes which are outside his
trade, business or profession.*”* The effect of the arbitration agreement being
unfair is that it cannot be enforced against the consumer. The rest of the contract
continues to bind the parties, with litigation available for dispute resolution.>”°
Sections 89 to 91 of the Arbitration Act 1996 apply whatever the law applicable to
the arbitration agreement.*””

Building and engineering disputes. Previous case law?” suggested that 2-085
arbitration agreements in building and engineering contracts gave arbitral tribu-
nals wider jurisdiction in some respects than that of the court. This was said to
arise from the drafting of arbitration clauses in standard form construction
contracts which give the arbitrator power to “open up, review, and revise any
certificate, opinion, decision, requisition or notice ... and to determine all
matters in dispute’’, a power that the court was said not to possess.*””? The House
of Lords subsequently rejected this suggestion and a provision conferring this
power upon the arbitrator is not to be construed as removing them from the
courte=

Prior reference to engineer. In many standard form construction con- 2-086

tracts, disputes are first decided upon by the engineer. Following that decision the
dispute will in many cases then be referred to adjudication,**' and thereafter to
arbitration or litigation. The parties are not limited in the arguments they can put
to the tribunal by not having raised the same points with the engineer.**? However
there is often a time limit within which the engineer’s decision must be chal-
lenged, failing which it becomes binding, and if that time limit is not complied
with the right to refer the matter to arbitration may be lost.**°

*71 Section 89 refers to the Unfair Terms in Consumer Contracts Regulations 1994 including any
regulations amending or replacing those regulations. The 1994 Regulations were indeed repealed
and replaced by the 1999 Regulations.
372 Consumer arbitration agreements are defined in s.89 of the Arbitration Act 1996 using slightly
different wording from the definition in s.6(1) of the Arbitration Act 1996.
373 Section 91 of the Arbitration Act 1996. SI 1999/2167 establishes the figure at £5,000.
3 Section 90 of the Arbitration Act 1996.
375 Regulation 3 of the Unfair Terms in Consumer Contracts Regulations (SI 1999/2083).
376 Regulation 8(2) of the Unfair Terms in Consumer Contracts Regulations (SI 1999/2083).
377 Section 89(3) of the Arbitration Act 1996.
378 Northern Regional Health Authority v Crouch (Derek) Construction Co Ltd [1984] 1 Q.B. 644.
379 Northern Regional Health Authority v Crouch (Derek) Construction Co Ltd [1984] 1 Q.B. 644.
380 Beaufort Developments (N.I.) Ltd v Gilbert-Ash (N.I.) Ltd [1999] 1 A.C. 266.
381 See para.2—032 above.
382 Mid Glamorgan County Council v Land Authority for Wales [1990] 49 B.L.R. 61.
383JT Mackley & Co Lid v Gosport Marma Ltd |2002| EWHC 1315 (TCC).
 78 The Arbitration Agreement

5. Laws To BE APPLIED TO AN ARBITRATION

(a) Introduction

2-087 General. In arbitrations between parties in England and Wales the issue of the
choice of law to be applied does not usually arise. Unless there is some other
provision,*** the arbitration will be subject in all respects to English law. However
the issue does arise in every international arbitration and can be of fundamental
importance, because:

@ the parties are free to choose the applicable laws, whether they make an
express choice or provide how the laws are to be chosen;

@ different laws can operate simultaneously on different aspects of the arbi-

tration;

® if the parties fail to make express choices and/or fail to make clear how the
laws are to be chosen the matter will usually have to be investigated in the
course of the arbitration, and

® the result of that determination can have a radical effect on the outcome of
the dispute.

2-088 Different laws applicable. It is possible for several different laws to apply
to a dispute referred to arbitration. First, there is the law governing the substance
of the dispute. Where the dispute concerns the performance of obligations under
a matrix contract, this will usually be the ‘‘governing law” or the “proper law of
the contract”’.*** Secondly, there is the law of the arbitration agreement which
governs the obligation to submit disputes to arbitration and to honour any
award.**° Thirdly, there is the procedural law which is the law governing the
conduct of the arbitration, also known as the curial law or /ex arbitri.*°’ These
three are perhaps the most commonly encountered laws applicable in the context
of an arbitration, but there are others that may be relevant including the law of the
particular reference to arbitration,*** the law applicable to the capacity of the

“4 For example where the parties have chosen to have their dispute determined under a different law
or in accordance with some other considerations than English law pursuant to s.46(1) of the
Arbitration Act 1996.
885 See paras 2-092 et seq. below.
8 Union of India v McDonnell Douglas Corp [1993] 2 Lloyd’s Rep. 48.
*” "This book will refer to the law governing the conduct of the reference as the procedural law, as this
perhaps conveys most clearly the nature of what is being discussed. Strictly speaking however the
concept of curial law is more accurate because, as explained in Dubai Islamic Bank PJSC v
Paymentech Merchant Services Inc [2001] 1 Lloyd’s Rep. 65 at 71 the 1996 Act uses the concept of
seat rather than procedural law to determine when the provisions of Pt 1 apply.
**8 See para.2—099 below. In practice this is almost always the same as the law governing the arbitration
agreement, or, possibly, where it differs from the law of the arbitration agreement, the curial law.
 Laws to be Applied to an Arbitration 79

parties to enter into the reference,**? the law of any place other than the seat where
hearings in the arbitration are to take place,*”° the law of the place or places where
recognition and enforcement will be sought*’! and the law applicable to any
compromise of the dispute.*””

Interplay of the different laws. The substantive rights and obligations of 2-089
the parties have to be determined according to the rules*”* governing the substance
of the dispute. Where the dispute is contractual this will usually be the proper law
of the contract. If the claim is based on some other cause of action then the
applicable law may need to be ascertained on a different basis.*°* The arbitration
agreement often forms part of a matrix contract and will often, but not always,*”*
be governed by the same law.*’® 396 This may be significant if, for example, the
arbitration agreement is valid according to the law which 1s alleged to govern it but
not under the proper law of the contract.*”’ The arbitration proceedings them-
selves are regulated by the procedural law, which governs matters of procedure in
the conduct of the reference and may for example deny one of the parties a remedy
which would have been available under the proper law of the matrix contract. The
procedural law will usually be that of the seat of arbitration unless for example the
parties have expressly chosen a different law.*?*

(b) The rules governing the substance of the dispute

Statutory Provision. The substance of the dispute is to be determined in 2-090

accordance with the law chosen by the parties as applicable to the substance of the

389 Questions of capacity to enter into an arbitration agreement will usually be determined, in the case
of an individual, by the law of his domicile or, in the context of an international contract, the proper
law of the contract. In the case of a corporate entity they will usually be governed by the law of the
place of incorporation, although again the proper law of the contract may be relevant in the
international context: see Redfern & Hunter, paras 3-025 to 3-029. See also para.3—003 below.
5° See para.2—107 below.
3°! See para.2-109 below.
3°2 Halpern v Halpern [2006] EWHC 603, which confirmed at [64] that the Rome Convention will
apply in determining the law applicable to any compromise of the dispute.
393 The term “rules” is used as the parties may adopt rules which are not the laws of a country: see
para.2—091 below.
394 The reader is referred generally to Dicey & Morris and in particular to Ch.34 in relation to claims
in restitution and Ch.35 in relation to tort claims.
395 See for example C v D [2007] EWHC 1541, where the matrix contract was governed by New York
law but the arbitration agreement by English law, and Tamil Nadu Electricity Board v ST-CMS
Electric Co Private Ltd [2007] EWHC 1713, where the matrix contract was governed by Indian law
but the arbitration agreement by English law.
396 Sonatrach Petroleum Corp v Ferrell International Ltd [2002] 1 All E.R. (Comm) 627.
;
397 See for example XL Insurance Ltd v Omens Corning [2000] 2 Lloyd’s Rep. 500.
398 Whilst it is possible to do so, this course adds a layer of complication as regards the interplay of
those laws as interpreted by the courts of each jurisdiction and is therefore to be avoided.
 80 The Arbitration Agreement

dispute*”’ or, if they so agree, in accordance with such other considerations as are
agreed by them or determined by the tribunal.*°° Absent such choice or agree-
ment, the tribunal has to apply the law determined by the conflict of laws rules it
considers applicable.*”!

2-091 Other considerations. The 1996 Act brought English law into line with the
approach in many other jurisdictions by permitting the parties to choose to have
their dispute resolved by considerations other than the rules of a particular
national law.*” It is now clear that if the parties choose to have the tribunal decide
the dispute ‘“‘ex aequo et bono” or as an “amiable compositeur” or on the basis of
non-national law principles or indeed on the basis of any other considerations, that
choice will be binding so long as it is ascertainable.

2-092 Absence of choice or agreement on rules governing the sub-

stance of the dispute. As mentioned above, where the parties have neither
chosen a law nor agreed other considerations to govern the substance of their
dispute, the tribunal has to apply the law determined by the conflict of laws rules
it considers applicable.*°* That will usually involve determining the law using the
conflict of law rules of the seat of arbitration,*°* but the 1996 Act does not inhibit
the tribunal’s choice in this regard. If the arbitration is being conducted under a
set of institutional or other rules they may indicate how the tribunal is to
determine the applicable law.*°* Under English law, the rules applicable to the
determination of the proper law of a contract are those set out in the Rome
Convention on the Law Applicable to Contractual Obligations.*°° The Rome
Convention was given effect in England by the Contracts (Applicable Law) Act
1990.#°° While the Rome Convention rules do not apply to arbitration agree-
ments,"”’ they do apply to the determination of the proper law of the matrix
contract.*°* The rules of the Rome Convention apply whenever there is a choice
to be made between the laws ofdifferent countries, even if the parties and the laws

*” Excluding the conflict of laws provisions: see s.46(2) of the Arbitration Act 1996.
#9 Section 46(1) of the Arbitration Act 1996.
1 Section 46(3) of the Arbitration Act 1996,
* Section 46(1) of the Arbitration Act 1996; Halpern v Halpern [2007] EWCA Civ 291 at
[37]-[38].
*°8 Section 46(3) of the Arbitration Act 1996.
™™ OGU International Insurance Ple v Astrazeneca Insurance Co Ltd [2006] C.L.C. 162.
1% See, for example, Art.17 of the ICC Rules.
The Rome Convention was opened for signature in Rome on June 19, 1980 and signed by the
United Kingdom on December 7, 1981. There are some exceptions to its application: see Contracts
(Applicable Law) Act 1990, Sch.1: Rome Convention, Art.1.2.
“°° For contracts made after April 1, 1991. The statute gives effect not just to the Rome Convention
but also to the Luxembourg Convention, the Brussels Protocol and the Funchal Conyention.
Amendments are pending which will add also the 1996 Accession Convention.
“7 Contracts (Applicable Law) Act 1990, Sch.1: Rome Convention, Art.1.2(d).
8 See Dicey & Morris, para.32-036.
 Laws to be Applied to an Arbitration 81

concerned are those of countries which are not signatories to the Rome Conven-
tion.*”” Essentially the Rome Conyention provides that where the parties have not
chosen an applicable law a contract is governed by the law of the country with
which it is most closely connected.*!”

Effect of seat on choice of proper law of contract. Under the 2-093

Contracts (Applicable Law) Act 1990, the selection of a seat of arbitration may be
regarded as an implied choice of a proper law for the substantive contract in
appropriate circumstances. The requirement in Art.3(1) of the Rome Convention
is that the choice of law by the parties must be “express or demonstrated with
reasonable certainty”.*'! Previously the choice of a seat was given considerable
weight as an indication of the proper law of the contract.*!* Now the test is
whether it is sufficient to demonstrate the choice with reasonable certainty. It has
been held that a standard form contract which stipulated London as the seat if, as
was the case, the parties failed to agree on a seat, demonstrated the choice of
English law with reasonable certainty.*'* Provisions stipulating for arbitration by
a local arbitral tribunal or institution, or, for example, for the appointment of an
arbitrator by the English High Court, may strengthen the inference. However, the
inference to be drawn from the choice of seat may be weaker where arbitration is
to be under the auspices of an international arbitral institution such as the ICC,
because the appointment of a tribunal is effected by the institution and is therefore
less connected with the seat.*'* Where the parties make an ad hoc submission to
arbitration with no express choice of proper law applicable to the substance of the
dispute, following an arbitration agreement with an express choice, the fact of the
original choice will not be conclusive as to the proper law to be applied in the later
submission.*!>

#9 Article 1(1) of the Rome Convention.

#19 Contracts (Applicable Law) Act 1990, Sch.1: Rome Convention, Art.4.1.
411 Contracts (Applicable Law) Act 1990, Sch.1: Rome Convention, Art.3.1. See also Dicey & Morris,
para.32-094.
412 Compagnie d’Armement Maritime SA v Cie Tunisienne de Navigation SA [1971] A.C. 572; Bangladesh
Chemical Industries Corp v Henry Stephens Shipping Co Ltd and Tex-Dilan Shipping Co Lid (The
“SLS Everest’) [1981] 2 Lloyd’s Rep. 389; Compania Naviera Micro SA v Shipley International Inc
(The “Parouth”’) [1982] 2 Lloyd’s Rep. 351, CA; Astro Venturoso Compania Naviera v Hellenic
Shipyards SA (The ““Marianina’’) [1983] 1 Lloyd’s Rep. 12, CA; Steel Authority of India Lid v Hind
Metals Inc [1984] 1 Lloyd’s Rep. 405; I/yssia Compania Naviera SA v Ahmed-Qawi Bamodah (The
“Elli 2”) [1985] 1 Lloyd’s Rep. 107, CA; cf. Atlantic Underwriting Agencies Ltd v Compagmia di
Assicuranzione di Milano [1979] 2 Lloyd’s Rep. 240; James Miller & Partners Ltd v Whitworth Street
Estates (Manchester) Ltd [1970] A.C. 583; Mitsubishi Corp v Castletown Navigation Ltd (The “Castle
Alpha”) [1989] 2 Lloyd’s Rep. 383. See also D. Rhidian Thomas, “Commercial Arbitration
Agreements as a Signpost of the Proper Law”, (1984) L.M.C.L.Q 141.
413 Egon Oldendorff v Libera Corp No.2 [1996] 1 Lloyd’s Rep. 380.
+14 See Dicey & Morris, para.32-096. No inference as to the proper law to be applied can be drawn
where the place of arbitration is to be selected by a third party such as the ICC Court of Arbitration
or where the arbitration clause contemplates alternative places of arbitration: see Star Shipping AS
v China National Foreign Trade Transportation Corp (The “Star Texas”) [1993] 2 Lloyd’s Rep.
445.
415 4 particularly confused situation discussed in Furness Withy (Australia) Pty Ltdv Metal Distributors
(UK) Ltd (The “Amazonia”’) [1990] 1 Lloyd’s Rep. 236.
 82 The Arbitration Agreement

(c) The law of the arbitration agreement

2-094 Choice of law rules applicable to the arbitration agreement.

The Arbitration Act 1996 gives guidance on both the rules applicable to the
substance of the dispute and on ascertaining the seat of arbitration,*'® but it does
not address the determination of the law applicable to the arbitration agreement.
It is not therefore entirely clear what choice of law rules should be applied.*!” The
Rome Convention provides choice of law rules for contracts generally, but it does
not apply to arbitration agreements.*'* It has been suggested*!” that the New York
Convention gives an indication of the applicable choice of law rules by providing
that recognition or enforcement of an award may be refused if “the arbitration
agreement was not valid under the law to which the parties subjected it or, failing
any indication thereon, under the law of the country where the award was
made’’,*”°

2-095 The law of the arbitration agreement. As a matter of English law

however the arbitration agreement will be governed by the law chosen by the
parties.*?! Where the arbitration agreement is contained in a matrix contract, the
law of the arbitration agreement will often follow the proper law of that matrix
contract.‘ However an arbitration agreement is separable*?* from the matrix
contract between the parties, and an arbitration agreement may be subject to a
different law from that of the matrix contract in which it is contained.*”* Not only
may the parties choose different laws for the matrix agreement and the arbitration
agreement, other factors may indicate that different laws should apply.*?° Within
the arbitration agreement itselfit is also open to the parties to specify a procedural
law for the arbitration which is different from the law governing the arbitration
agreement and, again, other factors may indicate that different laws should
+16 Sections 46 and 3 of the Arbitration Act 1996 respectively.
"7 Jn Halpern v Halpern [2006] EWHC 603 it was suggested at [52] that common law principles
applied. The case went to the Court of Appeal at [2007] EWCA Civ 291 but they dealt with the case
as one requiring determination of the applicable law of the compromise agreement in question to
which the Rome Conyention applied.
“18 Contracts (Applicable Law) Act 1990, Sch.1: Rome Convention, Art.1.2(d).
Dicey & Morris, para.16-014.
9 This provision appears as s.103(2)(b) of the Arbitration Act 1996.
*) Naviera Amazonica Peruana SA v Compania Internacional de Seguros del Peru [1988] 1 Lloyd’s Rep.
116; Tamil Nadu Electricity Board v ST-CMS Electric Co Private Lid [2007] EWHC 1713.
“2 ABB Lummus Global Ltd v Keppel Fels Ltd [1999] 2 Lloyd’s Rep. 24; Sonatrach Petroleum Corp v
Ferrell International Ltd (2002) 1 All E.R. (Comm) 627; Tonicstar Ltd (t/a Lloyd’s Syndicate 1861)
v American Home Assurance Co [2005] Lloyd’s Rep. 32; Svenska Petroleum Exploration AB v
Lithuania (No.2) {2006| 1 Lloyd’s Rep. 181. For the law applicable to an arbitration agreement
formed pursuant to the provisions of an investment treaty see Republic of Ecuador v Occidental
Exploration and Production Co {2006| 2 W.L.R. 70.
*° Unless otherwise agreed by the parties, s.7 of the Arbitration Act 1996: see para.2—007 above.
** Black-Clamson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1981] 2 Lloyd’s Rep. 446
at 453; Naviera Amazonica Peruana SA v Cia Internacional de Seguros del Peru [1988] 1 Lloyd’s Rep.
116 at 119; Sumitomo Heavy Industries Ltd v Oil and Natural Gas Commission [1994] 1 Lloyd’s Rep.
45 at 57; Channel Tunnel Group Lid v Balfour Beatty Construction Ltd [1993] A.C. 334 at 357;
Sonatrach Petroleum Corp v Ferrell International Ltd (2002) 1 All E.R. (Comm) 627; XL Insurance
Lid v Owens Corning [2000] 2 Lloyd’s Rep. 500; C v D [2007] EWHC 1541; Tamil Nadu Electricity
Board v ST-CMS Electric Co Private Ltd [2007] EWHC 1713.
"XL Insurance Ltd v Owens Corning [2000] 2 Lloyd’s Rep. 500; C v D [2007] EWHC 1541.
 Laws to be Applied to an Arbitration 83

apply.*”° In particular, ad hoc submission agreements drawn up after disputes have

arisen do not form part of any matrix contract, and there may be less reason to
imply that the same law is applicable to the arbitration agreement as to the
underlying contract in respect of which disputes have arisen. Where the parties
have made no specific choice of law for the arbitration agreement, the applicable
law may be the law of the country where enforcement is sought under the New
York Convention.*”’

Effect of seat on the law of the arbitration agreement. Where 2-096

there is no express choice of a proper law of the matrix contract nor of the
arbitration agreement, but the seat of the arbitration is specified, the law of that
place may govern both the matrix contract*** and the arbitration agreement.*””
Indeed express reference to the law of the seat may determine the law of the
arbitration agreement even if there is a different proper law of the contract.*°

Matters covered by the law of the arbitration agreement. The 2-097

law of the arbitration agreement regulates substantive matters relating to that
agreement,**' including in particular the interpretation, validity, effect and dis-
charge of the agreement to arbitrate.**” It also governs the identification of the
parties to the arbitration agreement.*** The law of the arbitration agreement also
governs similar issues relating to the reference and enforcement of the award.***
An issue as to whether a particular dispute falls within the scope of an arbitration
agreement will therefore be governed by the law of the arbitration agree-
ment.**°
6 Black-Clawson International Ltd v Papierwerke Waldhof—Aschaffenburg AG [1981] 2 Lloyd’s Rep.
446: Naviera Amazonica Peruana SA v Cia Internacional de Seguros del Peru [1988] 1 Lloyd’s Rep.
116 at 119, CA; Deutsche Schachthau-und Tiefbohr-Gesellschaft GmbH v Shell International Petroleum
Co Lid (Trading as Shell International Trading Co) [1990] 1 A.C. 295 at 309-310, CA, reversed on
other grounds at 329; Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] A.C. 334
Ate 37
7 Section 5(2)(b) of the Arbitration Act 1975, now re-enacted as s.100 of the Arbitration Act 1996,
explained by Steyn L.J. (as he then was) in Star Shipping AS v China National Foreign Trade
Transportation Corp (The “Star Texas’’) [1993] 2 Lloyd’s Rep. 445 at 450.
#8 See para.2-093 above.
*° Particularly where the law of the arbitration agreement follows that of the matrix contract: see
Sonatrach Petroleum Corp v Ferrell International Ltd (2002) 1 All E.R. (Comm) 627.
80 XL Insurance Ltd v Owens Corning [2000] 2 Lloyd’s Rep. 500; C v D [2007] EWHC 1541.
431 See Heavy Industries Ltd v Oil and Natural Gas Commission {1994] 1 Lloyd’s Rep. 45, in which Potter
J. stated (at 57) that the proper law of the arbitration agreement covered, inter alia, “questions as
to the validity of the arbitration agreement, the validity of the notice of arbitration, the constitution
of the tribunal and the question whether an award lies within the jurisdiction of the arbitrator”.
432 Dalmia Dairy Industries Ltd v National Bank of Pakistan {1978] 2 Lloyd’s Rep. 223; Black-Clawson
International Ltd v Papiermerke Waldhof-Aschaffenburg AG [1981] 2 Lloyd’s Rep. 446; XL Insurance
Lid v Owens Corning [2000] 2 Lloyd’s Rep. 500; Svenska Petroleum Exploration AB v Lithuania
(No.2) [2006] 1 Lloyd’s Rep. 181; Weissfisch v Julius [2006] EWCA Civ 218.
433 Petersen Farms Inc v C&M Farming Ltd [2004] EWHC 121; [2004] 1 Lloyd’s Rep. 603.
454 Tt is an implied term of the arbitration agreement that the parties will perform the award: see
para.6-163 below. See also C v D [2007] EWHC 1541; Tamil Nadu Electricity Board v ST-CMS
Electric Co Private Ltd 2007 EWHC 1713.
435 Nova (Jersey) Knit Ltd v Kammgarn Spinneret [1977] 1 W.L.R. 713, HL; Dalmia Dairy Industries
Ltd v National Bank ofPakistan [1978] 1 Lloyd’s Rep. 223, CA; The “Marques de Bolarque” [1984]
1 Lloyd’s Rep. 652 at 660; Er Plus SA v Welter [2006] 1 Lloyd’s Rep. 251; Abu Dhabi Investment Co
v H Clarkson & Co Ltd [2007] EWHC 1267.
 84 The Arbitration Agreement

2-098 Distinguishing law of the arbitration agreement and proce-

dural law. A distinction has to be drawn between, on the one hand, substantive
matters relating to the arbitration agreement which are governed by the law of the
arbitration agreement and, on the other hand, procedural matters relating to a
reference under that agreement which are governed by the procedural law of the
arbitration. In the past the court has been driven to conclude that matters which
would generally be considered procedural, such as the granting of an extension of
time for the bringing of an arbitration, were subject to the law governing the
arbitration agreement.**° The position is now considerably clearer under Pt I of
the Arbitration Act 1996 which provides guidance as to the matters governed by
the procedural law.**”

2-099 The law of the reference. Mention is sometimes made of a “proper law of
the reference”’.*** This is based on there being a separate agreement to arbitrate
the particular dispute. The reference therefore arises from an agreement subsidi-
ary to but separate from the arbitration agreement itself, and the agreement comes
into effect by the reference of a particular dispute or disputes to arbitration. At
this stage a new set of mutual obligations arises in relation to the conduct of the
reference.’ The proper law of the reference is said to govern the question of
whether the parties have been discharged from the obligation to continue with the
particular reference (while leaving intact the arbitration agreement to refer future
disputes). The proper law of the reference will almost always be the same as the
proper law of the arbitration agreement.**”

(d) The “seat” of the arbitration and the procedural law

2-100 The “seat” or place of arbitration.**! In England it is essential for an

arbitration to have a “‘seat”,**? which is the geographical location to which the
arbitration is ultimately tied. English law does not recognise the concept of

*° International Tank and Pipe SAK v Kuwait Aviation Fuelling Co KSC [1975] Q.B. 224. See also CM
van Stillevoldt BV v El Carriers Inc, The Times, July 8, 1982; Mitsubishi Corp v Castletown Navigation
Lid (The “Castle Alpha’) {1989] 2 Lioyd’s Rep. 383.
7 See para.2—106 below.
** See, e.g. Sumitomo Heavy Industries Ltd v Oil and Natural Gas Commission [1994] 1 Lloyd’s Rep. 45
at 57; and Cv D [2007] EWHC 1541 where it was referred to as the agreement to refer.
* Sumitomo Heavy Industries Ltd v Oil and Natural Gas Commission [1994] 1 Lloyd’s Rep. 45 at 57;
Bremer Vulcan Schiffbau und Maschinenfabrik v South India Shipping Corp {1981] 1 Lloyd’s Rep. 253
at 263; Black-Clamson International Ltd v Papierwerk Waldhof-Aschaffenburg AG [1981] 2 Lloyd’s
Rep. 446.
™° Sumitomo Heavy Industries Ltd v Oil and Natural Gas Commission [1994] 1 Lloyd’s Rep. 45 at
Sih
“2 See parao—071.
™ Naviera Amazonica Peruana v Cia Internacional de Seguros del Peru [1988] 1 Lloyd’s Rep. 116; Dubai
Islamic Bank PJSC v Paymentech Merchant Services Inc [2001] 1 Lloyd’s Rep. 65.
 Laws to be Applied to an Arbitration 85

“delocalised” arbitral procedures which are “floating in the transnational firma-

ment”, unconnected with any national system of law.*# Section 3 of the Arbitra-
tion Act 1996 defines the seat of an arbitration as its “juridical seat”, which is the
place to which it is legally attached. As the seat is the legal, rather than the
physical, place of arbitration proceedings,*** hearings can be held in other jurisdic-
tions."** The seat of the arbitration is often specified in the arbitration agreement
by the selection of a particular place or country in which the arbitration is to be
held. In the absence of a clear indication to the contrary, there is a strong
presumption that the place where the arbitration is to take place will constitute its
seat."*° The expression “‘seat” is often used to refer to the particular city chosen,
rather than the country (for example, “‘arbitration in London’’) and while the
parties’ agreement is on a city, the crucial choice is of the jurisdiction in which the
city is located.**”

Choice of seat. The parties are free to choose a seat.**8 Under English law the 2-101
procedural law of an arbitration is generally the law of the country in which the
arbitration has its seat (and vice versa).**? So in the absence of agreement
otherwise,**° the choice of seat prescribes the procedural law of the arbitration and
the choice of aprocedural law will determine the seat. The parties’ choice of a seat
is therefore extremely important,**! not simply in relation to the proper law of the
contract,*** but also because the law of the seat may contain provisions which have
important consequences for the conduct of the proceedings.*** Indeed, most
provisions of the Arbitration Act 1996 will only apply to arbitrations whose seat 1s
in England and Wales or Northern Ireland.***

Ascertaining the seat. If the seat has not been agreed on by the parties, 2-102
either expressly or by the choice of a procedural law, the matter may fall to be

43 Bank Mellat v Helliniki Techniki SA [1984] 1 Q.B. 291 at 301; Arab National Bank v EL-Abdah
[2004] EWHC 2381. See also Sir Michael Mustill, “Transnational Arbitration and English Law”,
Current Legal Problems (Stevens, 1984), pp.133-152. The exception is arbitrations conducted
pursuant to the ICSID arbitration rules. Awards of such arbitrations are enforceable in England
under the ICSID Convention.
44 Union ofIndia v McDonnell Douglas Corp [1993] 2 Lloyd’s Rep. 48.
+45 See para.2—107.
+46 Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] A.C. 334; Halpern v Halpern
[2006] EWHC 603.
7 Tongyuan (USA) International Trading Group v Uni-clan Ltd [2001] W.L. 98036.
+48 Section 3(a) of the Arbitration Act 1996.
+449 Naviera Amazonica Peruana SA v Compania Internacional de Seguros del Peru [1988] 1 Lloyd’s Rep.
116; ABB Lummus Global Lid v Keppel Fels Ltd [1999] 2 Lloyd’s Rep. 24; Arab National Bank v
El-Abdali [2004] EWHC 2381; C v D [2007] EWHC 1541.
450 Even if the parties agree on a different procedural law, the mandatory provisions of the law of the
seat will apply: see para.2—103 below.
5! See further para.5—072 below.
#52 See paras 2-093 et seq.
453 ¢.¢ provisions prescribing the degree of intervention by the court in the arbitral process. See
further para.2—106 below.
+54 Section 2(1) of the Arbitration Act 1996 applies Pt I of the statute to arbitrations in England and
Wales or Northern Ireland. The remaining subsections set out particular provisions that apply, or
may apply, even if the seat is outside those countries or has not been designated.
 86 The Arbitration Agreement

resolved by an arbitration institution or some other person the parties have agreed
should have the power to designate the seat,** or by the tribunal if authorised to
do so.*°° If the parties have agreed that a set of arbitration rules are to apply they
may contain a means of establishing the seat of arbitration in the absence of
express agreement by the parties.*”’ In all other cases it is necessary to look at the
parties’ agreement and all the relevant circumstances.*** Provision in an arbitra-
tion agreement stipulating for arbitration by a local tribunal or institution may
indicate the appropriate place of arbitration.*°’ If the arbitration agreement is
silent as to the seat of the arbitration and the applicable procedural law, but does
specify a governing law, that law may apply as the procedural law and serve to
determine the seat of the arbitration.*°°

2-103 Procedural law different from law of seat? The procedural law of
the arbitration may be, and often is, different from the proper law of the matrix
contract and the proper law of the arbitration agreement.*°' Though undesirable
it is also possible for the parties to choose to hold an arbitration in one country but
make it subject to the procedural laws of another country.*®’ The Arbitration Act
1996 specifically recognises that the parties may choose a different procedural law
where the seat of the arbitration is in England.*®? Where they do so, that law will
apply as an agreement made by the parties in respect of the non-mandatory
provisions of the 1996 Act.*°* The mandatory provisions of the of the Arbitration
Act 1996 will still apply however, regardless of what the chosen procedural law
says, as they cannot be excluded in respect of arbitrations whose seat is in
England.*°° This gives rise to the unattractive prospect of a reference being

** Section 3(b) of the Arbitration Act 1996 acknowledges the possibility of the seat being designated
by an arbitral or other institution or person.
*° Section 3(c) of the Arbitration Act 1996; see also Dubai Islamic Bank PJSC v Paymentech Merchant
Services Inc [2001] 1 Lloyd’s Rep. 65. In Arab National Bank v El-Abdali [2004] EWHC 2381 it was
held that s.3(c) of the Arbitration Act 1996 applies even where a party takes issue with the tribunal’s
authority to act in the arbitration.
*7 See, e.g. ICC Rules, Art.14.1, LCIA Rules, Art.16, UNCITRAL Rules, Art.16.
** Section 3 of the Arbitration Act 1996. See Arab National Bank v El-Abdali [2004] EWHC 2381 for
an example of the court determining the seat on the basis of all the relevant circumstances.
*° Whitworth Street Estates (Manchester) Lid v James Miller & Partners Ltd [1970] A.C. 583 at 607,
612, 616; Bank Mellat v Helliniki Techniki SA [1984] Q.B. 291 at 301; Naviera Amazonica Peruana
SA v Cia Internacional de Seguros del Peru |1988] 1 Lloyd’s Rep. 116 at 119; Sumitomo Heavy
Industries Ltd v Oil and Natural Gas {1994] 1 Lloyd’s Rep. 45 at 56-59.
1° Feon Oldendorff v Libera Corp [1995] 2 Lloyd’s Rep. 64; The Bay Hotel and Resort Ltd v Cavalier
Construction Co Lid [2001] UKPC 34.
“°! Union of India v McDonnell Douglas Corp [1993] 2 Lloyd’s Rep. 48 at 50, and s.3(a) of the
Arbitration Act 1996. See also s.34(2)(a) of the Arbitration Act 1996 and para.5—072.
+ Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1981] 2 Lloyd’s Rep. 446
at 453; Naviera Amazonica Peruana SA v Compania Internacional de Seguros del Peru [1988] 1
Lloyd’s Rep. 116 at 120; Union of India » McDonnell Douglas [1993] 1 Lloyd’s Rep. 48 at 50-51;
ABB Lummus Global Ltd v Keppel Fels Ltd [1999] 2 Lloyd’s Rep. 24.
*63 Section 4(5) of the Arbitration Act 1996. The choice of a law applicable to the substance of the
dispute will not be sufficient for the purposes of s.4(5): Lesotho Highlands Development Authority v
Impregho SpA |2005] UKHL 43 at [37]; C v D [2007] EWHC 1541 at [38]; XL Insurance Ltd v
Omens Corning [2000] 2 Lloyd’s Rep. 500 at 508.
*°* Section 4(2) and (5) of the Arbitration Act 1996.
*°° Mandatory provisions apply: see ss.2(1), 4(1) of and Sch.1 to the Arbitration Act 1996.
 Laws to be Applied to an Arbitration 87

governed by two procedural laws: that of the seat of the arbitration in so far as its
provisions are mandatory (England) and that of the parties’ express choice.*%

Floating seat/procedural law possible. The procedural law of the 2-104

arbitration may be determined only after the reference has been initiated.*°7 So
whilst a “floating” proper law of a contract is not permissible as a matter of
English law,*** a “floating” seat is allowed, even if they are contained in the same
provision.*©

Brussels Regulation and Brussels and Lugano Conventions 2-105

do not apply. When considering procedural remedies under English law, it
should be borne in mind that arbitration is excluded from the scope ofthe Brussels
Regulation and the Brussels and Lugano Conventions on jurisdiction and enforce-
ment of judgments in civil and commercial matters.*”” The Conventions also do
not generally apply to court proceedings ancillary to arbitration proceedings*’!
although they can apply to the jurisdiction of the court to order provisional
measures in support of arbitration proceedings.*’* The precise scope of the
exclusion has however been a matter of some uncertainty*” but the test seems to
be whether the, or perhaps a, principal focus of the proceedings is arbitra-
won.”

*°° Union of India » McDonnell Douglas Corp [1993] 2 Lloyd’s Rep. 48 at 51.
*°7 Star Shipping AS v China National Foreign Trade Transportation Corp (The “Star Texas’’) [1993] 2
Lloyd’s Rep. 445, CA. See also, EZR Lovelock Lid v Exportles [1968] 1 Lloyd’s Rep. 163.
+8 Armar Shipping Co Ltd v Caisse Algerienne [1981] 1 All E.R. 498; The ‘Tran Vojdan’’ [1984] 2
Lloyd’s Rep. 380; Sonatrach Petroleum Corp v Ferrell International Ltd [2002] 1 All E.R. (Comm)
627.
+©9 Sonatrach Petroleum Corp v Ferrell International Lid {2002] 1 All E.R. (Comm) 627; cf. The “Tran
Vojdan”’ [1984] 2 Lloyd’s Rep. 380.
*7° Article 1 of each convention. The conventions were given effect in English law by the Civil
Jurisdiction and Judgments Acts 1982 and 1991—-see generally Ch.11 of Dicey & Morris.
471 ee, proceedings to set aside or enforce arbitration awards, or to appoint or dismiss arbitrators, and
even where proceedings involve the question of the existence or validity ofan arbitration agreement:
Mare Rich & Co AG v Societa Italiana ImpiantiPA (The “Atlantic Emperor”) [1992] 1 Lloyd’s Rep.
342, ECJ; Allied Vision Ltd v VPS Entertainment GmbH [1991] 1 Lloyd’s Rep. 392; Marc Rich &
Co AG v Societa Italiana Impianti PA (No.2) (The “Atlantic Emperor”) [1992] 1 Lloyd’s Rep. 624,
CA. See also Audit (1993) 9 Arbitration Int. 1; Kaye (1993) 9 Arbitration Int. 27; Volkovittsch
(1993) 2 American Review of International Arbitration 501.
+72 Van Uden Maritime BV v Deco-Line [1999] 2 W.L.R. 1181. In relation to anti-suit injunctions see
Navigation Maritime Bulgaria v Rustal Trading (The “Ivan Zagubanskv”’) [2002] 1 Lloyd’s Rep. 106;
cf. West Tankers Inc v RAS Riunione Adriatica di Sicurta SpA and Others [2007] UKHL 4 and see
further paras 7-012 e¢ seg. and 7-184.
+3 The “Heidberg” {1994] 2 Lloyd’s Rep. 287; The “Angelic Grace” [1994] 1 Lloyd’s Rep. 168; The
“Xing Su Hai” {1995] 2 Lloyd’s Rep. 15; Toepfer International GmbH v Molino Boschi Srl [1996] 1
Lloyd’s Rep. 510; Lexmar Corp and Steamship Mutual Underwriting Association (Bermuda) Ltd v
Nordisk Skibsrederforening and Northern Tankers (Cyprus) Ltd |1997] 1 Lloyd’s Rep. 289; Toepfer
International GmbH v Société Cargill France [1998] 1 Lloyd’s Rep. 379; Through Transport Mutual
v New India Assurance Co Ltd [2004] EWCA Civ 1598; West Tankers Inc v RAS Riunione Adriatica
di Sicurta SpA and Others [2007] UKHL 4. See generally Dicey & Morris, paras 11-035 et seq.
474 Navigation Maritime Bulgaria v Rustal Trading (The “Tvan Zagubanski”’) [2002] 1 Lloyd’s Rep. 106;
Through Transport Mutual v New India Assurance Co Ltd [2004] EWCA Civ 1598; A o B [2006]
EWHC 2006.
 88 The Arbitration Agreement

2-106 Matters covered by the procedural law. An exhaustive list of the

matters covered by the procedural law of an arbitration in each jurisdiction is not
possible. Their nature and scope are determined by the particular law concerned.
Conflicts may arise between the procedural law, the proper law of the contract and
the law of the arbitration agreement or the law of the place of enforcement,
particularly in relation to questions of arbitrability and validity of the contract,
appointment of a tribunal, time limits and the form and validity of the award.*”
In England, the procedural law of arbitration is principally set out in Pt I of
the Arbitration Act 1996*”° and by section 2 it applies whenever the seat of the
arbitration is in England, Wales or Northern Ireland. So under English law,
the choice of an English seat*”’ will, subject to agreement otherwise,*”* incorporate
the various matters addressed in the Act, including questions relating to the
appointment and revocation of the authority of the arbitration tribunal, the powers
and duties of the tribunal and remedies for breach of duty, and any challenges to
the award.*”” Foreign procedural law may also be relevant to enforcement of a
foreign award in England.*°°

2-107 Hearings in different locations. In international arbitrations, meetings

or hearings may take place in several countries, without changing the seat.**! In
these cases it is important not to confuse the seat with what is simply the
appropriate or convenient geographical location for particular hearings.*** It will
be necessary to ensure compliance with any mandatory local law requirements of
the place where the meeting or hearing takes place.

2-108 Procedural rules distinguished. The procedural law applicable to the

reference must be distinguished from procedural rules which the parties might

*” See for example C v D [2007] EWHC 1541 where an award made in England was not susceptible
to challenge under the Arbitration Act 1996 but was alleged to be subject to be subject to review
in the United States based on the nationality of the parties and the proper law of the contract.
476
Although the common law is expressly preserved in so far as it is consistent with the Arbitration
Act 1996: s.81(1).
7 Tt is in fact the choice of England as the seat of the arbitration, rather than the choice of English
procedural law which is the determinative factor, though in most cases the choice of seat and the
choice of procedural law will be the same: see para.2—101 above.
8 e.g. by selection of a different procedural law in relation to the non-mandatory provisions of the
1996 Act: see para.2—103.
479
The supervisory jurisdiction of the courts of the seat has been emphasised recently by the Court of
Appeal in Weissfisch v Julius [2006] EWCA Civ 218; see also A v B [2006] EWHC 2006; Cv D [2007]
EWHC 1541. Invoking the jurisdiction of the courts elsewhere is a breach of the agreement vesting
supervisory jurisdiction in the courts of the seat and is remediable in damages or, in appropriate
circumstances, an order for costs on an indemnity basis: see 4 v B (No.2) [2007] EWHC 54; C v
D {2007| EWHC 1541. Declaratory or injunctive relief may also be available: see Noble Assurance Co
v Gerling-Konzern General Insurance Co [2007] EWHC 253.
© Dalia Dairy Industries Ltd v National Bank of Pakistan [1978] 2 Lloyd’s Rep. 223.
"*! This is because the ‘‘seat” is the legal, rather than the physical place of arbitration, see para.2-100.
The rules of various arbitration institutions specifically contemplate hearings in different locations:
see, e.g. LCIA Rules, Art.16. 2, ICC Rules, Art.14.2 and UNCITRAL Rules, Art.16(2). The ICC
Rules expressly proyide that the tribunal may conduct its deliberations at any location: see Art.14.3
of the ICC Rules.
82 Naviera Amazonica Peruana v Cia Internacional de Seguros del Peru [1988] 1 Lloyd’s Rep. 116 at 117,
IDA
 Termination of the Arbitration Agreement 89

choose to apply to the reference, such as those of the ICC or LCIA.**? The latter
are rules for the conduct of the arbitration which have effect only because they
have been agreed to by the parties. In contrast, the applicable procedural law as the
law of the seat*** will apply regardless of the parties’ wishes; but the parties may
agree amendments to details of the procedure in so far as this is permitted by the
relevant national law.**

Law of the place of enforcement. As mentioned above**° regard must 2-109

also be had to the law of the place or places where recognition and enforcement of
the award will be sought. Any mandatory requirements of the law of the place of
enforcement should be complied with, although in some cases the parties may not
know in precisely which jurisdictions they will, if successful, seek to enforce the
award. In any event consideration should be given to enforcement at an early stage
so that any mandatory requirements of the relevant law can be ascertained. In
addition to mandatory requirements, there may be a particular feature of the
procedure or the arbitration agreement which is contrary to the law of the place
of enforcement, for example a lack of mutuality.**” Again this is something that the
parties would want to identify at an early stage so that they can attempt to address
it, for example by seeking to enforce elsewhere or altering the relevant procedure
or agreeing an ad hoc submission to arbitration which addresses the issue.

6. TERMINATION OF THE ARBITRATION AGREEMENT

(a) Termination by agreement

Termination of the arbitration agreement. The parties can by 2-110

agreement bring the agreement to arbitrate to an end. Arbitration is consensual
and there is no reason why the parties cannot agree to vary their arbitration
agreement so as to bring about its termination.*** The parties might for example
jointly agree that all future disputes should be dealt with by the court rather than
pursuant to the arbitration agreement contained in their contract. There is no
statutory requirement for the termination of the arbitration agreement to be in
writing*®’ although the matrix contract may provide that any variation of its
provisions are to be in writing and this can apply equally to the arbitration
agreement.*”° In any event a written record is desirable for evidential purposes.

483 See, e.g. Paul Smith Ltd v H&S International Holding Inc (1991} 2 Lloyd’s Rep. 127.
484 See though para.2-103 above as to the possibility of choosing a different procedural law from that
of the seat.
485 See para.2—(60 above as to the scope for agreeing procedural matters under English law.
486 See para.2-088 above.
487 See para.2-017 above.
488 Termination by agreement is expressly contemplated by s.23(4) of the Arbitration Act 1996.
489 Section 23(4) of the Arbitration Act 1996; see also DAC report, para.40.
40 ISC Zestafoni G Nikoladze Ferroalloy Plant v Ronly Holdings Ltd {2004] EWHC 245.
 90 The Arbitration Agreement

Otherwise the nature of an arbitration agreement means that, even if parties

decide to adopt a different dispute resolution mechanism for a particular dispute
that arises under the arbitration agreement, that will not of itself bring about the
termination of the arbitration agreement. Any subsequent dispute that arises
within the ambit of the arbitration agreement will fall to be determined in
accordance with its provisions.
Referring a dispute to mediation or some other non-binding process will not of
itself rescind a prior agreement to refer the dispute to arbitration.*”'

(b) Repudiation of the right to arbitrate

2-111 Express or implied repudiation. A party may repudiate the arbitration

agreement and if the other party accepts that repudiation the arbitration agree-
ment will come to an end. The repudiation may be express or may be inferred
from the conduct of a party who acts in a way that is inconsistent with the
continued operation of the arbitration clause and evinces an intention not to be
bound by it.*”* However a failure to comply with the general duty to do all things
necessary for the proper and expeditious conduct of the arbitral proceedings is not
a repudiation of the arbitration agreement.*”? The repudiation may be by anticipa-
tory breach of the arbitration agreement.*”* Acceptance of the repudiation may be
demonstrated by the commencement of proceedings in court.*”°

2-112 Repudiation by commencing proceedings. A party may repudiate

the arbitration agreement by commencement of proceedings in court in breach of
its terms, but such breach will only be repudiatory if done in circumstances that
show the party in question no longer intends to be bound by the agreement to
arbitrate.*”° Such an intention can only be inferred from conduct which is clear
and unequivocal.*”” If there was some reason for the breach, such as confusion as
to the correct course, the court will not infer that the party bringing the proceed-
ings intended to renounce its obligation to arbitrate.*”*

*. Frota Oceanica Brasihera SA v Steamship Mutual Underwriting Association (Bermuda) Ltd (The
“Frotanorte’’) [1996] Lloyd’s Rep. 461, per Longmore J. The point was not addressed when the case
came before the Court of Appeal.
Traube v Perelman (2001| W.L. 1251816.
"3 Elektirim SA v Vivendi Universal SA [2007] EWHC 11 at [124]. The court reasoned that s.40
imposes statutory obligations, the remedy for breach of which is set out in the Act. It does not create
duties by way of implied terms of the arbitration agreement of which there can be a repudiatory
breach. It is of course possible for a party to commit a breach of an arbitration agreement which is
not repudiatory and which does not therefore allow the other party to bring the agreement to
arbitrate to an end.
4 Downing v Al Tameer Establishment [2002] EWCA Civ 721.
5 Traube v Perelman [2001] W.L. 1251816; Downing v Al Tameer Establishment [2002] EWCA Ciy
WPAN,
6 BEA Hotels NV v Bellway LLC [2007] EWHC 1363.
7 BEA Hotels NV v Bellway LLC [2007] EWHC 1363.
8 Redert Kommanditselskaabet Merc-Scandia IV v Counimots SA (The “Mercanaut”) [1980] 2 Lloyd’s
Rep. 183. See also World Pride Shipping Ltd v Daiichi Chuo Kisen Kaisha (The “Golden Anne”)
[1984] 2 Lloyd’s Rep. 489.
 Termination of the Arbitration Agreement 9]

Tribunal to determine dispute as to repudiation. If there is a 2-113

dispute about whether the arbitration agreement has been repudiated, that is a
question going to the jurisdiction of the tribunal and is therefore to be determined
by the tribunal under s.30(1)(a) of the Arbitration Act 1996 rather than the court
(unless the requirements of s.32 of the Arbitration Act 1996 are met.*””

(c) Abandonment of the arbitration agreement

Similarly a party may abandon its right to arbitrate, for example by delay or 2-114
inaction,’’° or by commencing court proceedings in breach of an arbitration
agreement.”’' However the courts are slow to find such abandonment without very
clear evidence of an intention to abandon the right to arbitrate together with
reliance by the other party to its detriment.*’* Even if the right to arbitrate a
particular dispute has been abandoned, that does not necessarily mean that the
arbitration agreement itself has been abandoned.””*

#9 See paras 5-060 er seg.

500 Wakefield (Tower Hill Trinity Square) Trust v Janson Green Properties Ltd [1998] E.G.C.S. 95. See
though Jndescon Lid v Ogden [2005] 1 Lloyd’s Rep. 31.
501 See para.2-112, as commencing proceedings in breach of an agreement to arbitrate does not
automatically entitle the other party to treat the agreement to arbitrate as being at an end. World
Pride Shipping Ltd v Datichi Chuo Kisen Kaisha (The “Golden Anne”) (1984] 2 Lloyd’s Rep. 489.
302 Shell International Petroleum Co Ltd v Coral Oil Co Ltd [1999] 1 Lloyd’s Rep. 72.
503 See para.5—229 concerning the abandonment of a particular reference.
 CHAPTER 3

PARTIES AND INSTITUTIONS

IPINTRODUGIIONG este 3-001 9. ExECUTORS, ADMINISTRA-

S AND TRUSTEES...... 3-026
seer So 3-002 TORS a itanets ee
10. INSOLVENT INDIVIDUALS
3. INDIVIDUALS UNDER AND COMPANIES 3-027,
DESAI TTI vevesseeette 3-004 m p Frat ae
4. Corporate BODIES ........ 3-008 bl Soe eae Esmrires
AND PusLic AUTHOR-
5. PARTNERSHIPS AND UNIN- DRE Shee ece teen ee 3=033
CORPORATED ASSOCIA ; ae x DAd
12. INTERNATIONAL ORGANI-
101(ONS aaa ASAE NoooncPRREGAOOA
RDS 3-012 i
SATION Stee nmeece eooeteee eee 3-039
Ga mEIRDSPARMIEG «eeceeteesss 3-014 ig Wi Pare 048

7, SUBSTITUTED PARTIES... 3-016 14. Arsirrar INstirutions 3-051

8. AGENTS AND Lawyers... 3-023

1. INTRODUCTION

3-001 Contents of the chapter. This chapter concerns the persons, corporations,
states and other entities which can be parties to an arbitration. This involves
largely contractual and constitutional issues, with some specific rules affecting
particular situations. Then follows a consideration of the position where there are
disputes between three or more parties rather than the usual bilateral arrange-
ment. The chapter concludes with a consideration of the status of arbitral
institutions.

2. PARTIES

3—002 The general rule. Contract law governs the capacity of a party to enter into
an arbitration agreement.' Subject to the qualifications set out in the following
paragraphs, in principle any individual or corporate body (or indeed any other
entity, e.g. a partnership, which the law recognises as having the necessary

' See generally Chitty (29th edn) Chs 8-11. For statutory arbitrations, see Appendix 3.
 Parties 93

capacity) can be party to an arbitration agreement. Nevertheless, it is important to

give consideration to the capacity of the parties to an arbitration agreement in
order to establish whether they are capable of creating a legally enforceable
obligation to arbitrate. This is particularly so when dealing with foreign entities?
whose legal status is governed by the law of their home jurisdiction.*

Capacity and identity. It is perhaps self-evident that care needs to be taken 3-003
to ensure that the right person or entity is identified as a party to the arbitration
agreement and in any arbitration proceedings.t Whether an error in this regard
will be fatal depends on the circumstances and the courts have drawn a distinction
between a mistake as to identity, which will generally invalidate the proceedings,
and a mere misnomer, which will not.°
It may also be necessary to verify the capacity of a party to enter into an
arbitration agreement? or to bring or defend arbitration proceedings.’ How this is
done depends on the circumstances. It may, for instance, be sufficient, in the case
of an English company, to carry out a search of the official register of UK
companies maintained by Companies House,* but more sophisticated enquiries to
obtain the relevant constitutional documents may be necessary for partnerships,
unincorporated associations and companies incorporated outside England. Ques-
tions of the capacity of parties and verification of their identity may also have to
be considered by the arbitral institution and/or the tribunal to which a dispute has

* See, e.g. Hussman (Europe) Lid v Al Ameen Development & Trade Co [2000] 2 Lloyd’s Rep. 83 where
a distributorship was entered into with a Saudi “Establishment” which under Saudi law had no
legal personality separate or distinct from its owner.
*In Continental Enterprises Limited v Shandong Zhucheng Foreign Trade Group Co [2005] EWHC 92
at para.72 Steel J. found, applying Chinese law, that a lack of capacity to enter into a contract also
invalidated the arbitration agreement.
* See also para.5—024.
° See for example Unisys International Services Ltd v Eastern Counties Newspapers Ltd [1991] 1 Lloyd’s
Rep. 538 where arbitration was commenced in the name of the contracting party but that party had
since changed its name and the original name had been given to its subsidiary company. The Court
of Appeal upheld the contracting party as a party to the arbitration as a matter of construction of
the notice commencing the arbitration. In contrast, in [nternaut Shipping GmbH v Fercometal Sarl,
The Elikon [2003] EWCA Ciy 812 the conduct of an arbitration commenced in the name of
“Owners” but pursued in the name of a party found not in fact to be the Owners under a
charterparty, was held to be a nullity (though the original reference to arbitration was still valid and
potentially capable of being pursued by the true ‘““Owners”’). See also Kenya Railways v Antares Co
Pie Ltd (The “Antares”) (Nos 1 and 2) {1987] 1 Lloyd’s Rep. 424; Hussman (Europe) Ltd v Al
Ameen Development & Trade Co {2000| 2 Lloyd’s Rep. 83 and Hussmann (Europe) Ltd v Pharaon
[2003] EWCA Civ 266; [2003] 1 All E.R. (Comm) 879.
© See, e.g. the decision of Longmore J. in Frota Oceanica Brasiliera SA v Steamship Mutual
Underwriting Association (Bermuda) Ltd (The ‘‘Frotanorte’’) [1995] 2 Lloyd’s Rep. 254 where it was
held that a claim being pursued by reinsurers by virtue of subrogation rights would have to be
brought in the name of the insured, and consequently any agreement to arbitrate must therefore be
with the insured. The Court of Appeal took a different approach, holding that the parties had not
in fact concluded a binding arbitration agreement at all because they were not of the same mind as
to who the parties to the agreement were: [1996] Lloyd’s Rep. 461.
7 Such issues will often arise for example in the context of substituted parties, as to which see
para.3—016 below.
8 See the official website at mmm.companieshouse.gov.urk.
 94 Parties and Institutions

been referred. They should in the first instance address these questions to the
parties by the institution/tribunal. Once an issue has come to light concerning the
capacity of one or more parties this should be addressed at the earliest opportunity
so that, if it is capable of being resolved, steps are taken to do so and in any event
unnecessary costs’ are avoided.

3. INDIVIDUALS UNDER DISABILITY

3-004 General. Under English law most individuals have the capacity to enter into an
arbitration agreement in the same way as they do contracts generally. The
exceptions are minors!° and patients suffering from mental disorder.'’ As far as
arbitration agreements are concerned, the position of minors and patients follows
the general law of contract.

3-005 Minors. A contract for “necessaries’’!? 9912 sold and delivered to a minor'> or a
contract of service, education, apprenticeship or instruction which is of benefit to
a minor is binding on him."* It therefore follows that a minor will be bound by an
arbitration agreement contained in such a contract.'> All other contracts where
one party is a minor are voidable at the option of the minor but binding on the
other party, and arbitration agreements follow this rule.'®

3-006 Patients. A patient is generally bound by any contract he enters into, including
an arbitration agreement, but mental incapacity may in some circumstances render
the arbitration agreement voidable. A party seeking to avoid an arbitration agree-
ment based upon mental incapacity at the time of entering into the arbitration
agreement will need to demonstrate that owing to his mental incapacity he did not
know what he was doing and that the other party was aware of his incapacity.'? A
patient’s affairs are also subject to the wide discretionary powers of the court.'®

* For example the costs of proceeding with an arbitration against a party lacking capacity and against
whom any award will be unenforceable.
'© Individuals under 18 years of age, see s.1 of the Family Law Reform Act 1969.
'' Section | of the Mental Health Act 1983. The capacity of patients will be governed by the Mental
Capacity Act 2005 if and when the relevant provisions of that statute are brought into force.
'? Defined in s.3(3) of the Sale of Goods Act 1979 as “goods suitable to the condition in life of the
minor or other person concerned and to his actual requirements at the time of the sale and
delivery”’.
'* Section 3 of the Sale of Goods Act 1979. The minor is required to pay a reasonable price rather than
the contractually stipulated sum.
* Clements v London and North Western Railway Company [1894] 2 Q.B. 482 at 491.
'S Slade v Metrodent LD [1953] 2 Q.B. 112.
'6 See generally Chitty, Ch.8.
'’ Imperial Loan Co Ltd v Stone [1892] 1 Q.B. 599. For a more recent example where such a claim
failed see [rvani v Irvani [2000] 1 Lloyd’s Rep. 412.
'™ Part VII of the Mental Health Act 1983. These provisions will be replaced by the Mental Capacity
Act 2005 if and when it is brought into force.
 Corporate Bodies 95

Bankrupts. This subject is considered under the general heading of“Insolvent 3-007
Individuals and Companies”.99:19

4. CorPoRATE BopirEs

Companies incorporated under the Companies Acts. Com- 3_008

panies can bind themselves to arbitration agreements under English law. Their
capacity to do so cannot be called into question on the ground of lack of capacity
by reason of anything in the company’s constitution.”? When a company ceases to
exist, an arbitration to which it is a party also comes to an end,”! but an arbitration
would not necessarily come to an end simply because the company is in liquida-
tion, administration or receivership.*? Where a company has been restructured,
privatised or nationalised, it is important to ensure that the entity which originally
entered into the arbitration agreement continues to exist and is the appropriate
participant in the arbitration proceedings.

Limited Liability Partnerships. Despite the designation as a “‘partner- 3-009

ship”, a limited liability partnership is a corporate entity with legal personality
separate from that of its members.?? It has capacity to enter into an arbitration
agreement.**

Statutory corporations.’ Where a corporation has been established by 3-010

statute, an express provision in its constitution may affect its capacity to enter into
an arbitration agreement, but in the absence of any special provision, a statutory
corporation has full capacity to enter into an arbitration agreement.

Insolvent companies. This subject is considered under the general heading 3-011
of “Insolvent Individuals and Companies”’.”°

19
See paras 3-027 et seq.
20 Section 35(1) of the Companies Act 1985, as amended by s.108(1) of the Companies Act 1989, and
s.65(1) and Sch.6, para.20 of the Charities Act 1993. This will be replaced by s.39(1) of the
Companies Act 2006 which is due to come into force on October 1, 2008.
21 Morris v Harris [1927] A.C. 252; Baytur SA v Finagro Holdings SA [1991] 4 All E.R. 129. This
assumes of course that there has been no assignment or novation of the rights and obligations to a
third party: see para.3—016 below.
22 See further paras 3-030 er seq.
?3 Section 1(2) of the Limited Liability Partnerships Act 2000. The law of partnership does not apply:
s.1(5) of the Limited Liability Partnerships Act 2000.
4 Section 1(3) of the Limited Liability Partnerships Act 2000.
25 See para.3—-033 on state entities and public authorities, and para.3—039 on international organisa-
tions. For the position with ecclesiastical corporations such as bishops see Halsbury’s Lams
(4th edn), Vol.14, paras 1253-1256.
6 See paras 3-027 et seq.
 96 Parties and Institutions

5. PARTNERSHIPS AND UNINCORPORATED ASSOCIATIONS

3—012 Partnerships. Partners who enter into ordinary commercial contracts contain-
ing arbitration clauses bind the partnership and all the partners to the agreement
to arbitrate.?” There is old authority that the power to refer disputes to arbitration
outside the ordinary course of business of the partnership, such as a reference
following a dissolution to get in the partnership debts,** cannot be exercised by
one partner without special authority.”” The remaining partners may however
adopt an unauthorised reference and their conduct may make it binding upon
them.*°

3-013 Unincorporated associations. An unincorporated association is not a

legal entity and does not therefore have capacity to enter into a contract such as
an arbitration agreement.*' A contract purportedly made by or with an unin-
corporated association does not bind all the members for the time being of that
association*” but it may bind those persons who actually entered into it as well as
those members for whom they had express or implied authority to contract as
agents.*? The rules of an unincorporated association may constitute a contract
between the members and an arbitration agreement in those rules would then be
binding in relation to disputes between the members.**

6. Tuirp Partirs*>

3-014 Statutory rights of third parties. Under s.1 of the Contracts (Rights of
Third Parties) Act 1999, a person who is not a party to a contract may nevertheless
enforce a term of that contract if the contract expressly provides that he may do
so or if it purports to confer a benefit on him. Where the contract in question
contains an arbitration agreement whose scope is wide enough to cover the
dispute, then pursuant to s.8(1) of the Contracts (Rights of Third Parties) Act
1999 the third party is treated as being a party to the arbitration agreement as
regards the enforcement of his right pursuant to the contract,*° such that he is not
just entitled but can be required to arbitrate any dispute.*” Section 8(1) of the 1999

7 Partnership Act 1890, ss.5 and 6.

28 As in Hatton v Royle (1858) 3 H. & N. 500.
»” Lindley & Banks on Partnership (18th edn), para.12—44.
3° Thomas v Atherton (1878) 10 Ch. D. 185.
*! See generally Chitty, Ch.9. There are exceptions based on statutory provision.
2 Walker v Sur [1914] 2 K.B. 930.
33 Chitty, para.9-068.
** See for example Whiting v Halverson [2003] EWCA Civ 403.
** See also Substituted Parties at para.3-016 and Multiparty Disputes at para.3-040.
*° See for example Mulchrone Swiss Life (UK) Ple [2005] EWHC 1808, although in that case the 1999
Act did not apply as the relevant contract pre-dated its coming into force.
°7 Nisshin Shipping Co Lid v Cleaves & Co Ltd [2003] EWHC 2602.
 Substituted Parties 97

Act does not apply to non-contractual disputes such as claims arising in tort.
These may be covered by s.8(2) which allows a third party to enforce a term
providing for disputes between the third party and the contracting party to be
submitted to arbitration even where the third party does not fall within s.8(1).**

Guarantors, sureties and indemnifiers. A third party such as a 3-015

guarantor, surety or indemnifier may enter into obligations relating to the per-
formance of one of the parties to a contract incorporating an arbitration agreement
in circumstances where the statutory provision does not apply.*’ If it is intended
that an award against the principal debtor will bind the guarantor (or similar third
party) then the guarantee (or surety agreement or indemnity) should contain
express provision to that effect. Failure to include that provision may make the
award unenforceable against that third party.*° Agreements containing guarantees
or similar obligations often provide that the creditor can proceed against the
guarantor, surety or indemnifier without first having to obtain an arbitration award
(or a judgment, as the case may be) against the debtor. This type of provision
leaves open the possibility of simultaneous proceedings, with unnecessary duplica-
tion and the risk ofinconsistent results. The court cannot impose solutions to the
problem.*! The right course is, at the drafting stage, to include provisions in the
various contracts which specifically deal with the issue, either by limiting the
parties’ rights to proceed under both contracts simultaneously or by providing that
all disputes under both contracts are to be referred either to the court or to
arbitration. If they are to be referred to arbitration, provision should be made for
them to be consolidated,” so that all the issues and relevant parties are brought
before one tribunal.

7. SUBSTITUTED PARTIES

When substitution of parties occurs. If a party is claiming under or 3-016

through a party to the arbitration agreement, then the provisions of the Arbitra-
tion Act 1996 will apply to him.*? The assignment of a contract is perhaps the

38 Section 8(2) is obscurely drafted. See generally “The Third Man: The 1999 Act Sets Back
Separability?” by Anthony Diamond Q.C. in (2001) 17 Arbitration Int. 211. See also Nisshin
Shipping Co Ltd v Cleaves & Co Ltd [2003] EWHC 2602; [2004] 1 Lloyd’s Rep. 38 at [36] which
quotes the Lord Chancellor’s Department Explanatory Notes in relation to s.8.
3° For example because they have entered into a separate contract of guarantee which would form the
basis of any claim rather than a party seeking to enforce a term of the principal contract.
40In Re Kitchin Ex p. Young (1881) 17 Ch. D. 668; Bruns v Colocotroonis (The “Vasso”) [1979] 2
Lloyd’s Rep. 412.
41 See the unsuccessful attempts in Alfred McAlpine Construction Ltd v Unex Corporation Lid [1994]
70 B.L.R. 26 and Roche Products Ltd and Celltech Therapeutics Ltd v Freeman Process Systems Ltd and
Haden Maclellan Holdings Ple: Black Country Development Corp v Kier Construction Lid [1996] 80
B.L.R. 102. These cases were decided prior to the Arbitration Act 1996 but the principle still holds
good. Indeed the court no longer has a discretion whether or not to enforce an arbitration
agreement: Arbitration Act 1996, s.9 and para.2—023.
2 As contemplated by s.35(1) of the Arbitration Act 1996. See further paras 3-044 er seq.
+ Section 82(2) of the Arbitration Act 1996.
 98 Parties and Institutions

most common situation when this arises and the assignee may be substituted for
the assignor in the arbitration agreement or in any arbitration proceedings.
However substitution may also occur due to legal or corporate reconstruction of
an entity or group of entities, for example by way of merger, which may or may
not take effect by way of assignment.** Investigation will need to be made in each
case as to the nature and effect of what has occurred as regards the legal status and
obligations of the entities involved under the laws applicable to them. For example,
under many foreign laws a merger may take effect by way of universal succession
such that the rights and obligations of one entity transfer to the other as a matter
oflaw and no notice is required to give effect to this as regards third parties.** The
transferring entity may or may not then cease to exist. In any event, if the
substituting party wishes to pursue a claim under a contract he will be bound by
any arbitration agreement contained in it.*°

3-017 Notice required under English law. As a matter of English law, notice
to the other parties and the tribunal is required for a substituted party to proceed
with arbitration proceedings and for any award to take effect.*’ The notice must
be given within a reasonable time and failure to do so may bring the arbitration to
an end.** Many of the reported cases involving substituted parties concern
corporate reorganisations which are not reflected in ongoing arbitration proceed-
ings or they concern proceedings being commenced in the name of a party that
either no longer has an interest in the proceedings or has ceased to exist. In such
cases it 1s necessary to consider whether the error in naming the party is essentially
a misnomer, in that the proper party was in fact joined to the proceedings, or
subsequently ratified them, or submitted to the jurisdiction of the tribunal even if
not formally named as a party.*” However where the proceedings have been started
on behalf of a party that does not exist, as opposed to there being an error in
naming the proper party, the proceedings will be a nullity.°°

“Tn Through Transport Mutual Insurance Association (Eurasia) Ltd v New India Assurance Co Ltd (The
“Hari Bhum”) (No.2) [2005] EWHC 455 the claimant was described as a “statutory transferee”,
its right to pursue a claim under a contract between two other parties arising not by way of
assignment but under a Finnish statute. It was nevertheless claiming ‘under or through a party to
the agreement” for the purposes of s.82(2) of the Arbitration Act 1996.
* As under German law, for example: Eurosteel Lid v Stinnes AG (2000) C.L.C. 470.
4° Through Transport Mutual Insurance Association (Eurasia) Ltd v New India Assurance Co Ltd (The
“Hari Bhum”) (No.2) [2005] EWHC 455.
The Republic ofKazakhstan v Istil Group Inc (2006) EWHC 448; Baytur SA v Finagro Holding SA
[1991] 4 All E.R. 129; Eurosteel Ltd v Stinnes AG [2000] C.L.C. 470.
* NBP Developments Lid and Others v Buildko and Sons Ltd (formerly William Thomson and Sons Ltd)
(in liquidation) (1992) 8 Const. L.J. 377.
© SEB Trygg Holding AB v Manches [2005] 2 EWHC 35 affirmed at [2005] EWCA Civ 1237; Harper
Versicherungs AG v Indemnity Marine Assurance Co Lid [2006] EWHC 1500; Unisys International
Services Lid v Eastern Counties Newspapers Ltd [1991] 1 Lloyd’s Rep. 538.
°° SEB Trygg Holding AB v Manches (2005] EWHC 35 affirmed at [2005] EWCA Civ 1237. See also
Internaut Shipping GmbH and Another v Fercometal Sarl (The ‘“‘Elikon’’) {2003] EWCA Civ 812. See
also para.5—024 below.
 Substituted Parties 99

Rights of assignees.’! Where there is a valid assignment of a contract 3-018

containing an arbitration agreement the assignee will be bound by the arbitration
agreement.°* He may invoke the arbitration agreement to pursue a claim but will
also be subject to the arbitration agreement in the event of a claim by the other
party.°* The assignee is not limited to commencing arbitration proceedings follow-
ing the assignment, but may also join existing proceedings.** References under Pt
I of the Arbitration Act 1996 to a party to an arbitration agreement include any
person, such as an assignee, claiming through or under a party to the agree-
ment.

Legal assignees. A legal assignee obtains rights pursuant to statute.*° To be 3-019

effective as a legal assignment the transfer has to be absolute and not by way of
charge only; it must be in writing and express notice must have been given to the
other party. By following that procedure an assignee can succeed to an assignor’s
rights in an arbitration provided that notice is given to both the other party and
to the tribunal.*’ A legal assignee can bring or defend arbitration proceedings in
its own name.

Equitable assignees. The position of an equitable assignee in the context of 3-020

arbitration was considered by the Court of Appeal in Baytur SA v Finagro Holding
SA.°* In that case an award had been made after the claimant had ceased to exist
and the respondent sought to avoid liability. (The claimant was a French company
whose assets and liabilities had been transferred to two other companies: under
French law, as soon as the transfers were completed, the transferor company was
dissolved.) The court held that an equitable assignee must first give notice of the
assignment to the other party’? and then submit to the jurisdiction of the
arbitrator. If that is not done and the assignor ceases to exist in the meantime, the
arbitration and any award made in it may lapse.®’ Concerns have been expressed

>! For assignment generally see Chitty, Ch.20.

52 Schiffahrisgesellschaft Detleu Von Appen GmbH v Voest Alpine Intertrading GmbH [1997] 2 Lloyd's
Rep. 279; Starlight Shipping Co v Tai Ping Insurance Co Ltd [2007] EWHC 1893; Aspel v Seymour
[1929] WN. 152; Shayler v Woolf [1946] 1 Ch. 320. See also The “Padre Island” (No.1) [1984] 2
Lloyd’s Rep. 408 and (No.2) [1990] 2 Lloyd’s Rep. 191 where the transferee of an insolvent
assured’s rights against his insurer under the Third Parties (Rights against Insurers) Act 1930 was
held to be bound by an arbitration clause.
53 Schiffahrtsgesellschaft Detleu Von Appen GmbH v Voest Alpine Intertrading GmbH [1997] 2 Lloyd’s
Rep. 279.
54 As was the case in both Baytur SA v Finagro Holding SA [1991] 4 All E.R. 129 and Montedipe SpA
v JTP-RO Jugotanker, The “Jordan Nicolov” [1990] 2 Lloyd’s Rep. 11. See also Charles M. Wilhe
and Co (Shipping) Ltd v Ocean Laser Shipping Lid (The “Smaro”) 1999 1 Lloyd’s Rep. 225.
>> Arbitration Act 1996, s.82(2).
°© Law of Property Act 1925, s.136.
57 Hobhouse J. in Montedipe SpA v JTP-RO Jugotanker, The ‘Jordan Nicolov” [1990] 2 Lloyd’s Rep.
11. The judge drew attention to the analogous procedure used in litigation under the old RSC,
Ord.15, r.7(2)—see now CPR Pt 19, 1.4.
811992] 1 Lloyd’s Rep. 134.
5° On the analogy of the procedure in litigation under the old RSC, Ord.15, 1.7.
60 That was the conclusion reached in Baytur SA v Finagro Holding SA, but Eurosteel Ltd v Stinnes
AG [2000] C.L.C. 470 is authority that it does not apply in cases of universal succession.
 100 Parties and Institutions

that this could lead to a situation where liability might be avoided by entities
merging and choosing not to give the requisite notice.°'
An equitable assignee must join the assignor as a party to any arbitration.

3-021 Novation. Novation occurs when the parties to a contract agree that a third
party should replace one of them as regards relations with the other. The third
party must also of course agree to do so. Novation involves the creation of a new
agreement between the party to the existing contract and the third party. In the
arbitration context it means bringing one or more substitute parties to an arbitra-
tion agreement who can enforce the agreement in place of the original party. As
a result of there being a new agreement the remedies sought by the new or
substitute party are not necessarily limited to those that would have been available
under the agreement to the original party.°* Novation can arise either by act of the
parties®* or by statute, as for instance under the Third Parties (Rights against
Insurers) Act 1930.°*
Where a novation occurs, the new party may be able to join in arbitration
proceedings between the original parties, at least where his claim is based on
identical facts.°°

3-022 Group of companies doctrine. Under English law the scope of an

arbitration agreement is limited to the parties who entered into it and those
claiming under or through them.®° However in the international context there has
developed what has become known as the “group of companies doctrine” whereby
an arbitration agreement entered into by a company within a group of companies
can bind its non-signatory affiliates if the circumstances demonstrate that the
mutual intention of all the parties was to bind the both the signatories and the
non-signatory affiliates.°’ This theory has been applied in a number of arbitrations
so as to justify a tribunal taking jurisdiction over a party who is not a signatory to
the contract containing the arbitration agreement.°’ However the English courts
have firmly rejected the group of companies doctrine.” Though there was earlier

°! per Longmore J. in Eurosteel Ltd v Stinnes

AG [2000] C.L.C. 470, following Industrie Chimiche Italia
Centrale v Alexander G Tsavlinis & Sons Maritime Co (The “Choko Star”) [1996] 1 W.L.R. 774.
62
See Charles M. Willie and Co (Shipping) Ltd v Ocean Laser Shipping Lid (The “Smaro’’) [1999] 1
Lloyd’s Rep. 225.
°° Such as the respondent turning from a partnership into a company, as in Oakland Metal Company
Lid v D Benaim & Co Ltd [1953] 2 QB. 261.
+ Firma C-Trade SA v Newcastle Protection and Indemnity Association and Socony Mobil Oil
and others
v West of England Shipowners Mutual Insurance Association (London) Ltd No.2 The “Padre Island”
(OSI eae Ns Grae
®° This was the opinion given by Rix J. in Charles M Willie and Co (Shipping) Ltd v Ocean Laser
Shipping Lid (The “Smaro”’) [1999] 1 Lloyd’s Rep. 225.
®© Section 82(2) of the Arbitration Act 1996.
*’ The doctrine originated in an ICC case involving the Dow Chemical group of companies: Dow
Chemical v Isover Saint Gobain ICC Interim Award of September 23 of 1982 in Case
No.4131.
8 See generally Craig, Park & Paulsson, International Chamber of Commerce Arbitration
(3rd edn,
2000), pp.75-78 and French Arbitration Law and Practice by Delvolvé, Rouche and Pointon, paras
216-241.
* Petersen Farms Inc v C&M Farming Ltd [2004] EWHC 121; [2004] 1 Lloyd’s Rep. 603.
 Agents and Lawyers 101

authority”? that a company which was not a party to the arbitration agreement was
claiming “through or under’’’! its parent company and the contract signatory, that
approach is unlikely now to be followed.”

8. AGENTS AND LAWYERS

Agents generally.” An agent may enter into an arbitration agreement on 3-023

behalf of his principal.’* If however his authority to act is successfully challenged”
the arbitration agreement will not be binding on the principal and the agent may
incur personal liability for any losses suffered by the other party.’° To avoid this
the agent should ensure that he has full authority from his principal to conclude
the contract including the arbitration agreement. Further, the agent should either
(1) enter into the contract expressly on behalf of his named principal or, if that is
not possible, (11) consider obtaining a comprehensive secured indemnity from the
principal for any liability arising out of his having entered into the contract on
behalf of the principal.

No claim by agent. An agent entering into a contract for an undisclosed 3-024

principal will not himself be entitled to claim substantive relief under the contract,
nor will he be able to participate in an arbitration as he is not a party to the
arbitration agreement.’’

Lawyers. Lawyers, in practice usually solicitors in England, need authorisation 3-025

to act as agent to bind their client to arbitration. The other party can rely on the
ostensible authority of the lawyer acting as agent on behalf of his client and if the
solicitor lacks authority he may be liable for breach of warranty of authority, which
would make him liable for wasted costs.’*

7 Roussel-Uclaf vGD Searle & Co Ltd [1978] 1 Lloyd’s Rep. 225.

71 This case was decided under the old law but the concept has been preserved by s.82(2) of the
Arbitration Act 1996.
72 Tt was the subject of criticism in Grupo Torras v AL-Sabah [1995] 1 Lloyd’s Rep. 374.
73 See generally Bomstead & Reynolds on Agency (18th edn).
74 Usually it will be in the agent’s best interests to have the principal enter into the contract containing
the arbitration agreement in his own name, but that is not always feasible and this section assumes
that the agent is entering into the contract on the principal’s behalf.
75 As, for example, in The “City of Calcutta” (1898) 79 L.T. 517, where the master of a ship was held
not to have the authority to bind the shipowners to arbitration.
76 Losses in relation to the arbitration agreement would generally be limited to costs incurred, e.g. in
pursuing abortive arbitration proceedings against the alleged principal.
77 Electrosteel Castings Ltd v Scan-Trans Shipping © Chartering Sdn Bhd [2002] EWHC 1993.
78 Cordery On Solicitors, Division F, Section 1.A.14.
 102 Parties and Institutions

9. ExecuTorsS, ADMINISTRATORS AND TRUSTEES

3-026 Effect of death of a party. Section 8(1) of the Arbitration Act 1996
provides that unless otherwise agreed by the parties an arbitration agreement is
not discharged by the death of a party to the agreement, and it may be enforced
by or against the personal representatives of that party.’”” By s.8(2) of the Arbitra-
tion Act 1996 this is subject to any rule of law by which a person’s death
extinguishes that person’s cause of action.*® These provisions apply where the law
applicable to the arbitration agreement is the law of England and Wales or
Northern Ireland even if the seat of the arbitration is elsewhere or has not been
designated or determined.*' A personal representative or trustee may submit to
arbitration any matter relating to an estate or trust and may enter into agreements
for these purposes without being personally liable, provided he exercises such care
and skill as is reasonable in the circumstances.** Trustees’ powers may be expressly
set out in the trust instrument, which will supersede the general rule and should
be examined. Trustees who submit to arbitration should clarify that they are acting
in their capacity as trustees in the arbitration agreement and provide expressly that
they are liable only to the extent of the trust property in their hands.

10. INSOLVENT INDIVIDUALS AND COMPANIES

3-027 Bankrupt can submit to arbitration. A bankrupt is not deprived of his

right to contract, but his estate passes to his trustee in bankruptcy and is subject
to the insolvency legislation.** A bankrupt can therefore submit to arbitration
personally,** without binding his estate in bankruptcy, although he cannot by so
doing improve his position at the expense of his creditors, nor can the other party
improve his position as regards other creditors.

3-028 Position of the trustee in bankruptcy. Where the bankrupt is party to

a contract containing an arbitration clause the trustee in bankruptcy may choose
whether or not to adopt the contract. If he does so then the arbitration agreement
is enforceable both by and against him.*° Should the trustee in bankruptcy choose

” Section 8(1) of the Arbitration Act 1996, For a discussion of the practical consequences of this, see
David M. Richards, “The Death of a Party in Arbitration Proceedings”, (1995) 61 Arbitration Int.
1 at 43. See also para.4—161.
*° Section 8(2) of the Arbitration Act 1996. The best-known instance of a cause of action “abating”
is in defamation, see Gatley on Libel and Slander (9th edn), para.8.12.
5! Section 2(5) of the Arbitration Act 1996,
** Section 15 of the Trustee Act 1925 which applies the duty of care set out in s.1(1) of the Trustee
Act 2000.
“3 Parts VIII-XI of the Insolvency Act 1986.
®4 Re Milnes and Robertson (1854) 15 C.B. 451.
*5 Section 349A(2) of the Insolvency Act 1986 inserted by s.107(1) and Sch.3 to the Arbitration
Act
1996.
 Insolvent Individuals and Companies 103

not to adopt the contract and a dispute arises under the contract which needs to
be resolved for the purposes of the bankruptcy then either the trustee in bank-
ruptcy, with the permission of the creditors’ committee, or any other party to the
contract may apply to the court for a determination as to whether the matter
should be referred to arbitration.*° If the court orders that the matter should be
referred to arbitration then the trustee in bankruptcy will be bound by the
arbitration agreement for the purposes of that reference. A trustee in bankruptcy
also has power to refer to arbitration any dispute concerning debts, claims or
liabilities between the bankrupt and any person who may have incurred liability to
the bankrupt.*”

Existing proceedings. Where the bankrupt is a party to existing arbitration 3-029

proceedings, the fact of his bankruptcy does not of itself effect a stay of the
arbitration, but at any time when bankruptcy proceedings are pending or after the
making of a bankruptcy order the court may order a stay of any arbitration
proceedings.** After the making of a bankruptcy order, no creditor who is a party
to an arbitration agreement with the bankrupt but who could prove in the
bankruptcy may commence arbitration proceedings without permission of the
court.*?

Administration and administrative receiverships. An admin- 3-030

istrator or administrative receiver (subject to the provisions of the debenture
under which he is appointed) has the power to refer to arbitration any question
affecting the company.”? When an administration order has been made, no arbitra-
tion proceedings may be brought against the company or its property without
consent of the administrator or permission of the court.”!

Voluntary winding-up. Companies can be wound up voluntarily in what 3-031

are known as creditors’ or members’ voluntary winding-up.”* In such cases the
liquidator may start or defend an arbitration in the name of and on behalf of the
company without seeking permission from the court,”’ save that in a creditors’
voluntary winding up permission of the court is required during the period before
the holding of a creditors’ meeting pursuant to s.98 of the Insolvency Act 1986.
Permission of the court is not needed to continue arbitration proceedings against

86 Section 349A(3) of the Insolvency Act 1986, inserted by s.107(1) and Sch.3 to the Arbitration Act
1996.
87 Section 314 and para.6 of Sch.5 to the Insolvency Act 1986.
88 Section 285(1) of the Insolvency Act 1986.
8° Section 285(3)(b) of the Insolvency Act 1986.
°° Paragraph 5 of Sch.1 to the Insolvency Act 1986.
’ Para.43(6) of Sch.B1 to the Insolvency Act 1986 inserted by the Enterprise Act 2002.
°2 Under Pt IV, Chs II, If], IV and V of the Insolvency Act 1986.
°3 Insolvency Act 1986, s.165(3) and Sch.4, Pt II(4).
 104 Parties and Institutions

a company which is being voluntarily wound up. Once the winding-up is com-
pleted the company ceases to exist and any arbitration agreement previously
entered into by it will become a nullity.”*

3-032 Compulsory winding-up. Alternatively a company may be wound up by

the court in a compulsory winding-up.”” Where a company is being wound up by
the court, the liquidator may, with permission of the court or the liquidation
committee, bring or defend arbitration proceedings in the name of and on behalf
of the company.”° If a vesting order has been made”’ the liquidator can bring an
arbitration in his own name.”* There is no automatic stay of arbitration proceed-
ings against a company upon the presentation of a winding-up petition, but the
court may order a stay at any time after presentation of the petition and before a
winding-up order is made.”? Once a winding-up order has been made or a
provisional liquidator appointed, arbitration proceedings may not be brought or
continued against the company or its property without permission of the court.'°°
As in the case of a voluntary winding-up, once the winding-up is completed the
company ceases to exist and any arbitration agreement previously entered into will
become a nullity. '°!

11. States, StaTE ENTITIES AND PUBLIC AUTHORITIES

3-033 States, state entities and public authorities. The importance of

arbitration involving states and state entities has increased dramatically in recent
years, due in part to the proliferation of investment treaties. Many states, including
the United Kingdom, have entered into bilateral or multilateral’? investment
treaties which confer upon investors certain rights aimed at protecting their
investments which are directly enforceable against the host state. “Investment” is
usually defined very broadly so as to encompass a wide range of commercial
transactions and interests. Typically these treaties provide a remedy for investors
against the host state which may be pursued by arbitration or in the local courts
at the investor’s option. Where arbitration is selected as the means for resolving

** Morris v Harris [1927] A.C. 252; Foster Yates & Thom Ltd v HW Edgehill Equipment Ltd (1978) 122
S.J. 860; Baytur SA v Finagro Holding SA [1992] 1 Lloyd’s Rep. 134.
*”° Under Pt IV, Ch.VI of the Insolvency Act 1986. The circumstances in which a company may be
wound up by the court in a compulsory winding-up are set out in s.122 of the Insolvency Act 1986
and include that the company is unable to pay its debts. :
°° Section 167(1)(a) and Sch.4, Pt 1(4) of the Insolvency Act 1986. The provision refers to “any action
or other legal proceeding” and this would include arbitration proceedings: Bristol Airport Plc v
Powdrill, Re Paramount Airways Ltd {1990 B.C.C. 130.
*” Pursuant to s.145(1) of the Insolvency Act 1986.
** Section 145(2) of the Insolvency Act 1986.
” Section 126 of the Insolvency Act 1986,
10 Section 130(2) of the Insolvency Act 1986.
'01 See para.3—031 above.
'? For example the Energy Charter Treaty signed in December 1994 which deals with cross-border
energy co-operation and includes arbitration procedures for disputes arising between contracting
states and investors of other contracting states: see further mwm.encharter.org.
 States, State Entities and Public Authorities 105

disputes between the state and the investor, often there is a choice between
arbitration proceedings before ICSID, the ICC or ad hoc proceedings pursuant to
the UNCITRAL Rules.

Involvement of the English court. As recent cases before the English 3-034
court have shown, where the seat of arbitration is in England these investment
arbitrations may be subject to the Arbitration Act 1996! and accordingly subject
to the English court’s supervisory jurisdiction, notwithstanding that they involve
interpretation of international treaties between foreign states.'°t Similarly, even if
the arbitration has its seat elsewhere, the English court may be asked to enforce a
resulting award. The increase in arbitrations involving states and state entities,
both under investment treaties and otherwise, has also brought greater focus on
issues such as the juridical distinctions to be drawn between states and different
state entities, both as regards their submission to arbitration'®’ and the enforce-
ment of awards.'°° A detailed analysis of investment and other arbitrations involy-
ing states is beyond the scope of this book,'°” but in any dealings with or on behalf
of states or state-owned entities it is important to consider the extent to which any
treaties or laws'®* give rise to a cause of action which may be submitted to
arbitration.!°”

Capacity of a state or state entity to enter into arbitration 3-035

agreements. Under English law, the Crown has the capacity to be a party to
an arbitration agreement.'!° However some states may not have the power to enter
into arbitration agreements or may only enter into arbitration agreements on
specific terms.''' The capacity of foreign states to enter into an arbitration
agreement depends on their constitution. No general rule of English law limits the

03 Republic af Ecuador v Occidental Exploration and Production Co [2005] EWHC 774, affirmed by the
Court of Appeal at [2005] EWCA Civ 1116.
104 An exception is arbitrations conducted under ICSID rules: s.3(2) of the Arbitration (International
Investment Disputes) Act 1966.
105 See, for example, The Republic of Kazakhstan v Istil Group Inc [2006] EWHC 448; Svenska
Petroleum Exploration AB v Lithuania (No.2) [2005] EWHC 2437 affirmed by the Court of Appeal
at [2006] EWCA Civ 1529.
106 See para.3-038 below.
07 See further R Doak Bishop, James Crawford, W Michael Reisman (eds), Foreign Investment
Disputes: Cases, Materials and Commentary (The Hague: Kluwer Law International, 2005) especially
chs 2, 4, 12 and 13.
108 Ty addition to treaties, many countries have national legislation which itself may confer similar
rights upon investors.
109 This needs to be done at the outset, as some of the treaties have what is known as a “‘fork in the
road” provision which in effect means that the choice of a particular form of dispute resolution
mechanism under the treaty precludes an investor from subsequently adopting an alternative route,
even if it was one originally available under the treaty.
110 Section 106 of the Arbitration Act 1996 provides that the Crown is bound by Pt I of that Act.
111 For example, state entities in some jurisdictions only have capacity to enter into agreements
providing for arbitration seated in their home jurisdiction. See further Jeremy Winter, “Inter-
national Arbitration under Public Works Contracts” in [nternational and ICC Arbitration, Centre of
Construction Law and Management, King’s College (London, 1990), pp.175-183.
 106 Parties and Institutions

capacity of state entities and public authorities to enter into arbitration agree-
ments, unlike the position in certain civil law jurisdictions.’

3-036 Sovereign immunity. When dealing with a foreign state, state entity or
public authority!’ it is important for both parties to consider whether they may
be able to claim sovereign immunity.'!* The laws of many jurisdictions provide
that if the state becomes involved in commercial activities then its ability to claim
immunity is restricted, but some degree of immunity is given in respect of the
state’s activities.!' In the arbitration context the types of immunity which are
most likely to be of relevance are those relating to jurisdiction, enforcement and
prejudgement proceedings such as an application for a freezing injunction. Each
of these may be irrevocably waived by express contractual provision.

3-037 Statutory provision. The State Immunity Act 1978 provides'’® that a
foreign state is not able to claim immunity in respect of proceedings in the courts
of the United Kingdom which relate to arbitration.''? However this does not
override contrary provisions in the arbitration agreement and does not apply to
arbitrations between states.''*

3-038 Relationship between states and state entities. Subject to ques-

tions of sovereign immunity an arbitration award may be enforced against a state
or a state entity.''? More complicated is the relationship between the two and the
question whether each can be held responsible for awards made against the other.
This issue should be addressed at the outset of arbitration proceedings as enquiry
may need to be made whether the state entity is to be treated as legally distinct
from the state.'*° That will often require an investigation not only of the relevant

"12 See essay by Jeremy Winter cited above. A special statute was required for the Ile-de-France to have
capacity to enter into an arbitration agreement for the EuroDisney project: Matthieu de Boisseson
“Interrogations et doutes sur une evolution legislative: Particle 19 de la loi du 19 aout 1986” [1987]
Revue de larbitrage, 3-21.
"3 Or indeed an international organisation—see para.3—039 below.
'™ Consideration should be given to whether, even if immunity from jurisdiction has been waived, a
claim might still be made to immunity from enforcement of any resulting award or from execution
against the state’s assets. See Svenska Petroleum Exploration AB v Lithuania (No.2) 2005] EWHC
2437 affirmed by the Court of Appeal at [2006] EWCA Ciy 1529.
">The position under English law is set out in the State Immunity Act 1978.
"6 Section 9 of the State Immunity Act 1978.
"7 This includes proceedings to enforce a foreign arbitration award: Svenska Petroleum Exploration AB
v Lithuania (No.2) [2005] EWHC 2437 affirmed by the Court of Appeal at [2006] EWCA Civ
1529.
18 Section 9(2) of the State Immunity Act 1978.
'! Svenska Petroleum Exploration AB v Lithuania (No.2) [2005] EWHC 2437 affirmed by the Court
of Appeal at [2006] EWCA Civ 1529.
120
An order requiring the Republic of the Ukraine to comply with an arbitrator’s award was set aside
because it was made against two separate and distinct parties, The State Property Fund of Ukraine
and The Republic of Ukraine, whereas the award was against a single entity, namely The Republic
of the Ukraine through the State Property Fund of Ukraine: Norsk Hydro ASA v The State Property
Fund of Ukraine (2002| EWHC 2120.
 Multi-Party Disputes 107

constitutional documents but also of the manner in which they operate in order to
determine whether the state entity in question is in fact an organ of the
Stated

12. INTERNATIONAL ORGANISATIONS

Organisations created by treaty. A number of international organisa- 3-039

tions have been created by treaty. Care should be taken to examine the terms of the
relevant treaty and constitution of the organisation when entering into any arbitra-
tion agreement with it, as the organisation may not be a legal person in English law
and may therefore lack the capacity to take part in legal proceedings.'*? Even ifthe
international organisation does have the capacity to enter into an arbitration
agreement, it may seek to claim sovereign immunity.'?*

13. Mutti-Party DISPUTES

Introduction. Arbitration is generally a bilateral affair because the arbitration 3-040

agreement is typically made between two parties to a contract containing an
arbitration clause. However contracts may be made between several parties, or
there may be several related contracts comprised in a transaction and these may
involve different parties. Claims may also arise against non-parties in relation to
the same or a similar subject matter as that of an agreement with an arbitration
clause. The situations described are quite distinct, but all give rise to potential
difficulties as regards combining the different claims and parties in arbitration
proceedings. At the heart ofthese difficulties is the common theme that arbitration
is a consensual process and this will usually prevent the introduction into the
proceedings of claims or parties which were not within the scope of what the
contracting parties agreed to.'** This section will examine the extent to which the
further claims or parties can be dealt with in the same arbitration proceedings and
how that result may be achieved.'”

121 See Walker International Holdings Ltd y République Populaire du Congo and others [2005] EWHC
2813 (Comm). In that case it was sought to enforce against the assets of a state entity although the
award was against the state. The reverse of that situation occurred in The Republic of Kazakhstan
v Istil Group Inc [2006] EWHC 448.
122 See, for instance, Arab Monetary Fund v Hashim and others (No.3) [1991] 1 All E.R. 890. In JH
Rayner (Mincing Lane) Ltd v Depariment of Trade and Industry [1990] 2 A.C. 418 an unsuccessful
attempt was made to impose liability on the members of an international organisation in respect of
an arbitration award obtained against the international organisation itself.
123 See para.3—036.
124 This sentence in an earlier edition of this book was cited with approval in Metal Distributors (UK)
Lid v ZCCM Investment Holdings Pic [2005] EWHC 156. For name-borrowing arbitrations, see
para.6—182. See also paras 6-016 et seq. in relation to claims for deduction or set-off.
125 Hor substituted parties, see para.3—016.
 108 Parties and Institutions

3-041 Reasons for objecting. Of course a party may have legitimate reasons for
objecting to the introduction of further claims or parties. To do so could sig-
nificantly add to the costs of the proceedings and the time necessary for his claims
to be resolved. On the other hand, it may be more efficient overall for the claims
or parties or both to be joined and this would avoid the risk of inconsistent
decisions from different tribunals.

3-042 Parties to the same arbitration agreement. Perhaps the simplest

situation is where there are more than two parties in dispute who are all parties to
the same arbitration agreement, usually because it is contained in a contract to
which they are all parties. In this situation there is little difficulty in conducting
multi-party arbitration proceedings in relation to the particular dispute, provided
that the mechanism for appointment of the tribunal can be properly established. '*°
Various institutional rules now deal specifically with this aspect to ensure that the
tribunal may be validly constituted.'?’

3-043 Disputes arising at different times. Problems may however occur if

more than one dispute arises between the parties to the agreement at different
times. Absent express provision for doing so it will not usually be possible to
require consolidation of these disputes in the same arbitration proceedings. This
is because the jurisdiction of the arbitrators in relation to the first dispute will
already have been determined and the scope of the reference, which determines
the tribunal’s jurisdiction, cannot subsequently be enlarged to encompass the
second dispute. Of course this is always subject to the parties and the tribunal
expressly agreeing that the scope of the reference should be enlarged to encompass
the later disputes.

3-044 Related claims, consolidation of arbitrations and concurrent

hearings. Disputes may arise which, although connected, are the subject of two
or more separate arbitration agreements. This would be the case where for
example a party has entered into two separate agreements with different parties
relating to the same subject matter. A good example is a construction project,
where the main contractor enters into separate contracts with the employer and
the sub-contractors. Each of the parties may agree in their arbitration clauses to
have all related disputes'** arising between any of them heard together in one
arbitration. Alternatively the parties’ arbitration agreements may contemplate
having the disputes dealt with in separate arbitration proceedings but allowing
those proceedings to be consolidated or for there to be concurrent hearings.
!2°
'6Tn particular the arbitration agreement should make clear which party or parties are to appoint
members of the tribunal. It should be borne in mind that in some jurisdictions (e.g. France) the
award will be vulnerable to challenge if all parties have not had an equal right to participate in the
appointment of the tribunal.
"27 See, e.g. LCIA Rules, Art.8 and ICC Rules, Art.10.
'*6'The question of who is to decide what disputes are related is addressed in para.3—045 below.
12” As contemplated by s.35(1) of the Arbitration Act 1996.
 Multi-Party Disputes 109

There need be no agreement to which they are all party, provided the agreement
into which each has entered demonstrates their consent to the chosen mechanism
for dealing with disputes. So, in the above example, there will usually be no
arbitration agreement entered into between the employer and the sub-contractor,
but they may nevertheless both be bound to have their disputes heard in the same
tripartite arbitration proceeding with the main contractor.'*” The court however
has no power to consolidate arbitration proceedings or to order concurrent
hearings."*!

Drafting considerations. Careful drafting is needed in relation to these 3-045

agreements to ensure not just that the relevant provisions in the different agree-
ments are clear and consistent but also that the mechanism proposed is workable.
In particular, if the joining of disputes or proceedings is limited to those involving
“related disputes”’, it will need to be clear what is meant by this!** and who is to
determine whether one dispute is related to another.'*’ Often the parties will
confer the power to make this determination on the tribunal already appointed
which will be in a position to make an impartial assessment of the degree of
overlap. Alternatively it may be left to one of the parties to decide, and in making
the decision he may have regard solely to his own commercial interests.'*+ Another
approach is to provide that both parties have to agree that the disputes are related
in order for the provision to operate and failing agreement they will be dealt with
in separate arbitrations.'*°

Further matters to be considered. Timing can also be an important 3—046

factor. If an arbitration proceeding is at an advanced stage it may be inconvenient,
inefficient and expensive to seek to join further claims, even if this is contemplated
by the parties’ agreement.'*° In order to address this it may be sensible to give the
tribunal discretion as to whether additional claims, consolidation or concurrent
hearings should be allowed. Alternatively the arbitration agreement may expressly

130 Trafalgar House Construction (Regions) Ltd v Railtrack Plc [1995] 75 B.L.R. 55.
‘5! Elektrim SA v VivendiUniversal SA (No.2) [2007] EWHC 571 at [72].
32 In City & General (Holborn) Lid v AYH Plc [2005] EWHC 2494 the arbitration agreement referred
to “issues which are substantially the same as or are connected with issues raised in related
disputes”. The court held that this was to be construed having regard to the commercial purpose
of avoiding multiplicity of proceedings and it was sufficient that a material portion of the issues were
the same as or connected with the issues in dispute.
153 Absent agreement or a provision as to who should make this determination it may be necessary to
apply to the court for the appointment of an arbitrator under s.18(3) of the Arbitration Act 1996 and
the court can then decide the issue: City & General (Holborn) Lid v AYH Ple {2005] EWHC
2494.
34 Lafarge Redland Aggregates Ltd v Shephard Hill Civil Engineering Ltd |2000] 1 W.L.R. 1621, per
Lord Hobhouse at 1642. The Court of Appeal had expressed the view that the decision had to be
made in good faith, and even contemplated that the party concerned had an obligation to act
reasonably: [1999] C.1.L.L. 1457.
'35 Of course this effectively provides both parties with a right of veto.
136 Article 19 of the [CC Rules allows new claims which fall outside the terms of reference to be added
only where authorised by the tribunal which shall consider the nature of the new claims, the stage
of the arbitration and other relevant circumstances.
 110 Parties and Institutions

limit the power to do so to cases where the further claims are brought within a
certain time or before particular steps have been taken.!°7

3-047. Joining third parties to arbitration proceedings. The position of

third parties who have not entered into any binding agreement to refer their
disputes to arbitration is rather different. In the ordinary course they would not
be permitted to join in the arbitration proceedings unless the parties and, if
already appointed, the tribunal agree. The parties may however make provision in
their arbitration agreement for third parties to be allowed to join the proceedings.
For example,'** Art.22.1(h) of the LCIA Rules expressly empowers the tribunal to
allow a third party to join the proceedings if the third party and one of the existing
parties agree.'*? Again careful drafting would be necessary to ensure clarity as to
the precise circumstances in which participation of the third party is permitted
and what the nature of his role is to be.

3-048 Absence of express agreement. A tribunal has no power to order

consolidation of proceedings or concurrent hearings without the agreement of all
the parties.'*? Problems can arise where a contract provides for any disputes
arising under it to be determined in the same arbitration as disputes arising under
another contract, but that other contract contains no corresponding provision. In
these circumstances neither the courts nor the tribunal can insist upon a tripartite
arbitration. However, the court will strive to allow the claims to proceed in
separate arbitrations.'*!

'57 For example it may need to be done before an arbitrator has been agreed or appointed to determine
the later dispute: Trafalgar House Construction (Regions) Ltd v Railtrack Plc [1995] 75 B.L.R. 55.
There was authority prior to the 1996 Act that if aparty pursues an arbitration and, some time later,
commences a further arbitration against another party, the court may decline to enforce an
agreement to consolidate because it could unfairly delay the conclusion ofthe first arbitration to the
detriment ofthe other party: see Higgs and Hill Building Ltd v Campbell Denis Ltd [1982] 28 B.L.R.
47, and Hyundai Engineering Construction Co Ltd v Active Building and Civil Construction Pte Ltd
[1989] 45 B.L.R. 62. It is unlikely these decisions would now be followed given the emphasis on
party autonomy in s.1(b) of the Arbitration Act 1996 and the terms of s.35(1) of the Arbitration Act
1996.
'S8'The UNCITRAL Working Group currently considering revisions to the UNCITRAL Arbitration
Rules is also considering introducing a similar provision to those rules: see paras 121 et seg. of the
Report of the 46th Session in New York, February 2007, at mmm.uncitral.ore.
’ This rule has rarely been invoked and doubts have been expressed about the enforceability of any
resulting award in favour of the third party. However by adopting the LCIA Rules the parties are
agreeing to third parties being joined on these terms. The resulting award ought therefore to be
enforceable, even against a party who opposed the third party joining the proceedings. See also The
Bay Hotel and Resort Ltd v Cavalier Construction Co Ltd 2001] UKPC 34.
0 Arbitration Act 1996, s.35(2).
'" Lafarge Redland Aggregates Ltd v Shephard Hill Civil Engineering Ltd [2000] 1 W.L.R. 1621. That
case involved a sub-contract under the FCEC Blue Form which provided for disputes to be dealt
with jointly with disputes under the main contract. The disputes clause in the main contract
contained no reciprocal provision obliging the employer to participate in a tripartite arbitration, and
arbitration under the main contract was delayed pending negotiations between the employer and the
main contractor. A majority of the House of Lords decided that the sub-contractor could proceed
with a separate arbitration if the employer declined to co-operate with a tripartite arbitration or if
the contractor failed to initiate the arbitration under the main contract within a reasonable time.
 Arbitral Institutions 111

Statutory provision. Judges have noted the benefits that could result from 3-049
the abolition of the restriction preventing the joining of third parties and con-
solidation of arbitrations,'*” but the draftsmen of the Arbitration Act 1996 decided
this would be too great an interference with the principle of party autonomy.'*
Section 35 of the Act, which deals with the subject, has no teeth. After confirming
that parties are free to agree on consolidation and concurrent hearings, s.35 goes
on to state that an arbitral tribunal has no power to order consolidation or
concurrent hearings without the agreement of the parties.

Court powers. Nothing is said in the Arbitration Act 1996 about any power 3-050
of the court to order consolidation of arbitrations or concurrent hearings, with the
result that the court does not have these powers.'** The court may however be
called upon to assist in the appointment of the tribunal in the absence of
agreement between the parties on the tribunal or on an appointing authority. In
these circumstances the court can appoint the same tribunal to hear a number of
different disputes in consecutive hearings.'** The court cannot require the parties
to agree to that tribunal hearing the different cases concurrently.

14. ARBITRAL INSTITUTIONS

General. Arbitral institutions exist to provide arbitration services, either as 3-051

their sole or principal purpose, or as ancillary to other functions of a trade or
professional association.'*° For instance, the principal purpose of the LCIA and
the Chartered Institute of Arbitrators is to provide arbitration (and ADR) servy-
ices.'*7 The ICC is a world trade organisation, one of whose divisions provides
arbitration and conciliation services. The Royal Institution of Chartered Surveyors
is a professional association of English surveyors which provides arbitration
services as one part of its activities. ICSID is an autonomous arbitral institution
affiliated to the World Bank.'**

142 GoffJ. (as he then was) in Interbulk Ltd v Aiden Shipping Co Ltd, The ‘‘Vimetra”’ {1984] 2 Lloyd’s
Rep. 4664 at 467, Lloyd J. (as he then was) in World Pride Shipping Ltd v Daiachi Chuo Kisen Kaasha,
The “Golden Anne” {1984] 2 Lloyd’s Rep. 489 at 491, Steyn J. (as he then was) in Property
Investments Holdings Ltd v Byfield Building Services (1985) 31 B.L.R. 47 at 56, Staughton L.J. in
Furness Withy (Australia) Pty Ltd v Metal Distributors (UK) Ltd (The “Amazonia”’) [1990] 1
Lloyd’s Rep. 236 at 240.
3 DAC report, paras 177 et seq.
'™ Arbitration Act 1996, s.1(c).
'45 dbu Dhabi Gas Liquefaction Co Ltd v Eastern Bechtel Corp and Chiyoda Chemical Engineering &
Construction Co Ltd {1982] 2 Lloyd’s Rep. 425.
146 Care should be taken to ensure selection of an appropriate institution: see Plight Traiming Inter-
national Inc v International Fire Training Equipment Ltd |2004] EWHC 721 where an agreement
provided for the submission of disputes to ACAS which in fact dealt only with employment
disputes and not commercial disputes.
'47 Although both also have an important educational role in relation to arbitration.
8 See wwm.worldbank.org/icsid.
 2 Parties and Institutions

3-052 Role of institutions in arbitration agreements.'*’ Arbitration

institutions can play an important role in arbitration agreements. They and their
rules are often specified in the arbitration agreement, although the parties may
agree to take advantage of the services offered by an institution after a dispute has
arisen. An arbitral institution may adopt a number of different roles in relation to
the arbitration proceedings depending upon what the parties have agreed their
role should be. In particular the institution may:

(a) provide arbitration rules pursuant to which the arbitration will be con-
ducted;

(b) act as the appointing authority which, in the absence of agreement between
the parties, appoints the tribunal to hear the dispute and may also deal with
any challenges to or replacement of arbitrators'”;
(c) act as an account holder for fees and deposits and administer the funds
necessary to pay for the tribunal’s fees and expenses'*';
(d) supervise the conduct of the arbitration by acting as an administrator for
the proceedings.

These functions are not mutually exclusive and an institution will frequently act
in a combination of some or all of these roles.'*?

3-053 Administration by institution. Administration services and a degree of

supervision of the arbitration is offered by certain institutions, including the ICC
and the LCIA. For example, the services provided by the ICC include:

® ensuring that all parties and the tribunal receive written submissions;

® approving the terms of reference!**;

® assisting the parties and the arbitrators to deal with administrative issues:

© encouraging the tribunal to make an award without delay; and

@ checking the award for clerical and similar errors.'>2°

The LCIA starts proceedings with all communications being sent through its
Registrar, but once the tribunal is formed it usually directs that communications
between it and the parties take place directly. The LCIA’s Registrar still receives
copies of correspondence and submissions between the tribunal and the parties
and continues to administer the arbitration, depending upon the needs of the

'° See further para.2—061.

'°0 The institution may also provide a list of suitably qualified arbitrators to assist a party
in selecting
an arbitrator.
'S' "The LCIA in particular regularly provides this service.
'S2 See paras 2-061 et seg. and 4-075.
'$2a Terms of reference are dealt with in Art.18 of the ICC Rules.
'S2> Awards are scrutinised by the ICC Court: see Art.27 of the ICC Rules.
 Arbitral Institutions 113

parties and the tribunal. The LCIA supervision of administered arbitrations is less
extensive than that provided by the ICC, and in particular there are no terms of
reference and no formal “scrutiny” of the award. Administration by an arbitral
institution naturally involves some cost to the parties,'°*° but this may be out-
weighed by the value of the services offered. Proper administration can make a real
contribution to the effectiveness of an arbitration by helping to keep the proceed-
ings moving along. The pace of an arbitration can be significantly slowed down by
one or (both) of the parties failing to co-operate in the conduct ofthe proceedings;
an institution may be able to communicate with and influence an uncooperative
party or a tardy tribunal.

Immunity. Arbitration institutions!* are not liable for anything done or 3-054
omitted in the discharge or purported discharge of the function of appointing or
nominating arbitrators unless the act or omission is shown to have been in bad
faith.'°* Nor can liability attach to the appointing institution as a consequence of
the act of appointment or nomination, for the acts and omissions of the arbitrator
(or his employees or agents) in the discharge or purported discharge of the
functions of an arbitrator.'*> Employees or agents of arbitral or other institutions
are also protected.'°® The DAC report gave two reasons for this statutory immu-
nity. First, there is a risk that attempts would be made to hold institutions or
individuals responsible for the consequences of their appointments in terms of
what the arbitrators do or fail to do, which would reopen matters referred to
arbitration. Second, arbitral institutions do not have ‘“‘deep pockets” and might
not be able to afford the cost of insurance; vulnerability to lawsuits might drive
them out of existence.'*’ It would not be easy to show bad faith, particularly in the
case of an appointing authority, so the institution will be kept in line by the desire
to maintain its reputation rather than by the desire to avoid law suits. The
immunity does not extend to actions or omissions other than in connection with
the appointment of arbitrators, and therefore does not provide a defence to the
negligent administration of arbitrations or dealings with funds deposited by the
parties.

152e Most arbitration institutions, including the [CC and the LCIA, levy a fixed, non-returnable
registration fee from the claimant. From then on institutions diverge between charging scale fees
and time-related rates. the ICC Court of Arbitration fixes its administrative costs and arbitrators’
fees on the basis of a percentage of the amount in dispute. The LCIA charges administration fees
and arbitrators’ fees at hourly rates, split between the parties.
'S3 And individuals acting as appointing authorities.
'54 Section 74(1) of the Arbitration Act 1996.
'S5 Section 74(2) of the Arbitration Act 1996.
156 Section 74(3) of the Arbitration Act 19996.
'57 DAC report, paras 299-301.
 CHAPTER 4

THe TRIBUNAL

. INTRODUCTION........0.. +001 (b) Powers of tribunals... +069

(c) Powers and jurisdic
t DERINGHIONS oo. +002
io Gee een +070
(a) The arbitrator........... +002
(d) Procedural and evi-
(b) Different types of tn-
dential powers ........ +072
LRTI eee are +4005
(6) Expertsnccceseieiecks +082
a. QUALIFICATIONS OF AN (f) Securing claim, costs
IRETERA ROR: cccsccess accuses ase 013 and evidence........... 083
(a) General considera- (3) Default.558...5. OSS
SIONS Noes eo ek 4013 (h) Orders and Awards .. +4092
(b) Special qualifications +017 cl Les ee rere +102
(Ce ESR re ee +019
. Duties oF AN ArsrrraL Tre
(d) Impartiality and dis-
Sa ee Aa ee a Hi
TMPETESE Accesses
ke. +023
(a) Introduction .............
. APPOINTMENT OF AN ARB- (b) The duty to act fairly
ITRAL TRIBUNAL ............<. +024 and impartially .......
(a) Introduction ............. +024 (c) The duty to be indep-
(b) Appointment by the ORGCHE a ees tneencns +128
PATRAES Cake eee +028 (d) Duty to adopt suitable
(c) Sole arbitrator .......... +4035 procedure and to
(d) Tribunal of two arbit- avoid expense and
RMEDES Crore ccc +036 Sa Bubbler nant MON +130
(e) Appointment of third (e) Conduct of proceed-
arbitrator or umpire +044 FENGSos a ne Saas +132
(f) Appointment by an app- (f) Duty not to exceed
ointing authority..... +049 jurisdiction or
(g) Appointment by the PIOWETS Sc encnsacesh +135
ONE Boats asa +050 (g) Qualifications............ +137
(h) Challenges to appoint- (h) Other duties ............ +4138
Uo) aees +051 (i) Party-appointed arbit
PRRGIS mecct cencpeaeenee +4145
REMUNERATION OF AN
(j) Third arbitrators,
ARBITRAL TRIBUNAL........ +052
chairmen and um-
(a) The right to remuner-
PIES ciency, +149
MENEE ST eeeceeee to +052
(b) Fixing the level of fees +056 . Liaprities OF ARBITRA
(c) Deposits, commitment ERE SR ae Aare ER +152
fees and interim fees +060 (a) Introduction ............. +152
(d) Award not delivered (b) Types of claims ........ 4-155
until fees paid......... J. CHALLENGE AND TERM-
(e) Costs awards............. INATION OF AUTHORITY OF
ARBITRATORS .......cccccen +159
6. POWERS OF AN ARBITRAL TRI-
(a) Termination generally 4-159
PUREE a5, cach ccs ce cetcncceacenes +066
(b) Termination by oper-
(a) Introduction and
ation of law
SpUTGOSS o ahereeeee coc +066
 Definitions 115

(c) Termination by act or (e) Termination by app-

omission of the arbi- ointing authority..... 4-168
CLALOle ae
eee ee 4-164 (f) Termination by court
(d) Termination by act of OLGOLe Me: eee ees 4-169
Thempanticses yore 4-166

1. INTRODUCTION

Contents of chapter. This chapter is devoted to the tribunal which consists 4-001
of the person or persons appointed to decide a dispute submitted to arbitration.
It begins by defining who is and who is not an arbitrator and by distinguishing the
different types of arbitral tribunal. It then discusses the qualifications needed for
an arbitrator before turning to the way the tribunal is appointed and remunerated.
Discussion follows on the powers of the tribunal. Then, the general and specific
duties of the tribunal are identified with detailed attention being given to the
important subjects of impartiality and independence.' The chapter concludes with
a short discussion on the liabilities of an arbitral tribunal and how its authority
may be terminated.

2. DEFINITIONS

(a) The arbitrator

Role of an arbitrator. An arbitrator’s task is to determine disputes referred 4-002

to him, either alone if he is appointed as the sole member of an arbitral tribunal
or jointly with other members of a tribunal, on the basis of the evidence and
submissions, according to the law chosen by the parties or other considerations
agreed by them or determined by the tribunal,'* and within the general obligation
ofa fair resolution by an impartial tribunal without unnecessary delay or expense.*
Despite the apparent similarities with the role of a judge, an arbitrator 1s not a
judge in the sense of an appointee of the state who presides over lawsuits. The
authority of an arbitral tribunal arises entirely from the agreement between the
parties.* However, as will be seen below,’ a judge very occasionally may be
appointed an arbitrator. Another feature which distinguishes an arbitrator from a

' See paras 4-106 et seq.

' For example, if a choice of “internationally accepted principles of law governing international
relations” does not count as substantive law it could be treated as a choice of “such other
considerations as are agreed by the parties” —s.46(1)(b) of the Arbitration Act 1996. See Deutsche
Schachthau-und Tiefbohrgesellschafi GmbH v R’As Al Khaimah National Oil Co [1987] 3 W.L.R.
1023.
2 Section 1(1) of the Arbitration Act 1996.
> This is usually the case, although authority may be derived from statute or treaty—see Appendix
3 for statutory arbitrations.
* See paras 4-019 et seq.
 116 The Tribunal

judge is that an arbitrator almost always performs his task in private. This arises
from the wishes of the parties, sometimes expressed and, where not expressed,
always implied, that the arbitration is to be private.°

4-003 Experts and valuers. There is a traditional distinction between the role of
arbitrators and experts, including valuers, appointed to determine issues ‘‘as an
expert and not as an arbitrator”. The role of an expert fulfils many of the
requirements set out in the previous paragraph, particularly those concerning the
private, contractual aspects. But there are a number of differences. The most
significant is that an expert need not act judicially.° This has two consequences: an
expert can apply his own expertise to deciding the question referred and an expert
is not bound to give each party an opportunity to put its case and to deal with that
of the other party.’

4-004 Quasi-arbitrators. The term “quasi-arbitrator” is obsolete except for one

limited sense, having lost its former meaning of a valuer/expert possessing arbitral
immunity.* The term is now properly applied only to the exceptional case of an
arbitrator acting at common law and not under the Arbitration Act where the
submission to arbitration is oral.’

(b) Different types of tribunal

4-005 A range of roles. The word “arbitrator” is used to embrace a number of roles
arising from the different types of arbitral tribunal that can be established:

® a tribunal consisting of a sole arbitrator appointed by joint agreement of the

parties or otherwise;

@ a member of a tribunal of two arbitrators;

© an arbitrator/advocate!”;
@ an umpire;

@ a party-appointed arbitrator, sitting as a member of a tribunal of three or

more arbitrators; or

© a third arbitrator, or “president” or “‘chairman’’.

» See para.1—010.
°'See para.2—028.
7 Sections 33(1)(a) and 34(2)(g) of the Arbitration Act 1996.
"See JKendall, Expert Determination (3rd edn). The effect of s.5 of the Arbitration Act
1996 is to
reduce the number of potential members of this species to close to zero.
2 ue and Lord Simon in Arenson v Casson Beckman Rutley €& Co [1975] 3 W.L.R. 815
at t.
'© See para.4—008 for this unusual hybrid.
 Definitions Ly

In this book, as elsewhere, the word “arbitrator” is used to cover all these
functions, but where a distinction has to be drawn between them the text makes
this clear. The Arbitration Act 1996 makes frequent use of the expressions
“tribunal” and “arbitral tribunal”, and it is appropriate to use these expressions
in preference to the word “arbitrator” where, as is usually the case, the position
of a tribunal is in issue, not that of any individual member. The reason for the
historical English preference for the term “‘arbitrator” rather than tribunal arises
from the fact that, as can be seen from the case reports, many arbitral tribunals in
England have traditionally consisted of only one arbitrator.|!

Sole arbitrator. A sole (or single) arbitrator is a complete tribunal. He may be 4-006
appointed by agreement of the parties, an appointing authority or the court.
Unless a contrary intention is expressed, every arbitration agreement is deemed to
include a provision that the reference shall be to a single arbitrator.'? The
intention may be expressed in rules of arbitration referred to in the arbitration
agreement, but rules of arbitration differ where the agreement itself is silent about
the number of arbitrators to be appointed.'* Therefore, it is preferable to state in
the arbitration agreement if a sole arbitrator is to be appointed.

A member of a tribunal of two arbitrators. English law allows a 4-007

tribunal of two arbitrators, and it presumes, in the absence of other evidence, that
the parties intended to appoint a tribunal of two arbitrators where they had agreed
on decision by “‘arbitrators’’, on the basis that the irreducible minimum is two not
three.'* This could lead to deadlock between the two arbitrators, but for the
statutory provision that, unless otherwise agreed by the parties, an agreement that
the number of arbitrators shall be two’ shall be understood as requiring the
appointment of an additional arbitrator as chairman of the tribunal'®: there has to
be specific agreement if the third arbitrator is to act as an umpire.’” In practice the
tribunals which are subject to the parties’ specific agreement for an umpire are
usually found in trade and commodity arbitrations conducted in the City of
London.'®

An arbitrator/advocate. The role of arbitrator and that of advocate are 4-008

usually completely separate, because an arbitrator is expected to be impartial

'"! See para. 1-016.

'2 Section 15(3) of the Arbitration Act 1996. Under the Model Law, Art.10(2) (see Appendix 4), the
number of arbitrators is three unless the parties determine otherwise.
‘3 Compare, for example, LCIA Rules, Art.5.4 with ICC Rules of Arbitration, Art.8.2.
| Fletamentos Maritimos SA v Effjohn International BV {1995] 1 Lloyd’s Rep. 311.
1S Or any other even number.
'© Section 15(2) of the Arbitration Act 1996.
'7 Sections 15(2) and 21 of the Arbitration Act 1996. Under the previous legislation umpires were the
“default” for all two-member tribunals who disagreed (see the Arbitration Act 1950, s.8).
'8 The ICC declined jurisdiction in an arbitration of this sort, Sumitomo Heavy Industries v Oil and
Natural Gas Commission [1994] 1 Lloyd’s Rep. 45. The two-arbitrator tribunal does not easily fit into
the scheme of the ICC’s Rules, and parties are encouraged to agree to a tribunal of three arbi-
trators.
 118 The Tribunal

however appointed.'? Where, however, there is a tribunal of two arbitrators and the
third member is not the chairman but is to act as an umpire, the arbitrators may,
in certain arbitrations, once they have been replaced as the tribunal by the umpire,
become advocates for the parties who appointed them and argue the dispute before
the umpire.””

4-009 An umpire. If parties agree that the third arbitrator is to act as an umpire,”!
the umpire is appointed by the party-appointed arbitrators at any time and
forthwith if they disagree about the dispute referred to them.** The umpire
system is a “peculiarly English concept”: those responsible for drafting the
Arbitration Act 1996 considered, but eventually decided against, recommending
its abolition.”* Parties are free to agree on whether the umpire attends proceedings
immediately after his appointment and when he replaces the other arbitrators: if
there is no agreement, there is a statutory code.**

4010 A party-appointed arbitrator sitting as a member of a tribu-

nal. Each party may be entitled to appoint its own arbitrator, but a party-
appointed arbitrator has no special role to play other than as a member of the
tribunal.?° A party-appointed arbitrator does not change his status on the comple-
tion of the tribunal by its third member. This should be contrasted with the
position described above”® where a tribunal originally consisted of two arbitrators
who were unable to reach agreement and were replaced as the tribunal by the
umpire. A tribunal of three or more does not always allow for the appointment or
even nomination by each party of an arbitrator. The arbitration agreement may
provide that all the arbitrators are to be appointed by an independent appointing
authority. In certain cases, arbitration rules provide for appointment of the whole
tribunal by an appointing authority.”’

4-011 A third arbitrator (or “president” or “‘chairman”’). Where parties

agree that there will be a tribunal of three arbitrators, the third acts as the
chairman unless the parties agree he should act as an umpire.?* Arbitration rules
and provisions made in ad hoc arbitrations may make a distinction between the
chairman and the other members of the tribunal. For instance, the chairman may
be given the power to make procedural rulings, and to give the casting vote where

'° See para.4—106 for a discussion of this duty.

* This was a practice in some shipping arbitrations, for example, before the Arbitration Act 1996: see
for instance Rahcass: Shipping Co SA v Blue Star Line Lid [1969] 1 QB. 173. Perhaps specific
agreement is now needed on this pursuant to s.15 of the Arbitration Act 1996.
*! Otherwise, the third arbitrator acts as chairman: s.15(2) of the Arbitration Act 1996.
*? Section 16(6)(b) of the Arbitration Act 1996: cf. Arbitration Act 1950, s.8(2).
23 DAC report, para.94. See para.4—-150.
4 Section 21 of the Arbitration Act 1996, see para.4—165 below.
8 See paras 4-145 et seq. The exception of the arbitrator/advocate has already been mentioned.
26 See para.4—009.
*” The ICC Rules, Art.10 contain such a provision in the case of multi-party arbitrations.
28 Section 15(1) and (2) of the Arbitration Act 1996.
 Qualifications of an Arbitrator 119

otherwise there would be no majority decision.”? In the absence of agreement,

there is a statutory code providing that decisions, orders and awards shall be made
by all or a majority of the arbitrators (including the chairman) and the view of the
chairman shall prevail in relation to a decision, order or award in respect of which
there is neither unanimity nor a majority.*? The chairman’s fees may be fixed at
a higher rate than those of the party-appointed arbitrators to reflect that the
chairman will usually bear a greater burden when it comes to writing the
award.

A member of a larger tribunal. Some tribunals have a membership of 4012

a higher odd number than three. An appeal board composed of five persons hears
appeals from two-arbitrator panels in certain commodity arbitrations.*'! The num-
ber of arbitrators for the Iran-United States Claims Tribunal has been nine.*?

3. QUALIFICATIONS OF AN ARBITRATOR

(a) General considerations

Who may be appointed as an arbitrator? The law does not impose 4013
general restrictions on who may be appointed an arbitrator. It is not a recognised
profession like that of solicitor or barrister although it is becoming increasingly
common for some individuals to practice solely as arbitrators. It is a feature of
English arbitration practice that non-lawyers may become arbitrators in specialist
fields such as rent reviews, engineering, shipping and construction. The Chartered
Institute of Arbitrators runs courses and examinations and awards recognition to
those it regards as suitably qualified to act as an arbitrator. Other professional
bodies in England which act as appointing authorities for arbitrators also take steps
to ensure that professional standards are maintained by running courses, by
providing continuing education and by periodically reviewing the membership
lists and removing certain names.** However, arbitration does not form part of the
compulsory training of either solicitors or barristers, although arbitration is now
being taught in postgraduate courses attended by lawyers in the fields of commer-
cial and construction law.** There are in fact no minimum requirements at all,

29 TCC Rules, Art.25.1.

°° Section 20 of the Arbitration Act 1996. See para.4—-147.
31 For example, those run by FOSFA and GAFTA, see Derek Kirby Johnson, “Commodity Trade
Arbitration”, in Bernstein’s Handbook of Arbitration and Dispute Resolution Practice (4th edn,
Sweet & Maxwell, 2003), p.46.2.
Or any agreed larger multiple of three, Claims Settlement Declaration of January 19, 1981,
Art.III.1, quoted in (1982) VII Yearbook Commercial Arbitration, at 258.
33 As was done by the Royal Institution of Chartered Surveyors in 1993: Estates Gazette 28, February
12, 1994.
34 For example, the Master of Laws (LLM) Programme of the University of London entitled
International and Comparative Commercial Arbitration.
 120 The Tribunal

because the authority of the arbitral tribunal arises from the parties’ contract, and
the law allows contracting parties complete freedom to choose their tribunal.

4-014 Unsuitable appointees. Common sense usually, but not always, prevents
the appointment of completely unsuitable people** and an appointing authority
may reserve the right not to confirm the nomination of an arbitrator who is
considered unsuitable.*° But parties and their advisers wish to appoint the most
suitable candidate(s), and not simply avoid those that are unsuitable. Advice
should be taken and references obtained where the proposed candidates are not
known. Even after that stage, it may be difficult to secure the appointment of the
preferred candidate where the other party’s agreement is required because the
other party may reject the proposal. In those circumstances the appointing
authority will make the selection.*’ From a practical point of view, one of the most
important qualifications for any arbitrator is that he should remain alive and well
for the duration of the proceedings. Parties who are concerned about the serious
consequences of having to replace tribunal members who die or become infirm
take out insurance on the arbitrators’ life and health. This will at least help to
cover the costs of fresh hearings should an original appointee become too ill to
continue or die in the course of the reference.

4015 Personal nature of arbitral function. An arbitration agreement does

not have to refer disputes to a tribunal of immediately identified individuals. The
parties may refer disputes to a fluctuating body of persons whose individual
members vary from time to time, provided that body fulfils the requirement to
appoint arbitral tribunal members when the particular dispute comes for deci-
sion.**
What, then, is the effect of an arbitration agreement referring a dispute to a
partnership or a corporation? By analogy with Keighley Mawsted*? the arbitration
agreement must be construed as requiring that the firm or corporation would
select suitable arbitrators from its own members. There is authority that a
partnership can be appointed to act as an arbitral tribunal.?°
Once, however, an arbitrator is appointed there is no doubt that it is a personal
function and an arbitrator’s authority ceases on his death.*!

* Most rules of arbitration provide a challenge procedure, which safeguards against the choice of a
partial arbitrator. See paras 4-051 et seq.
36
The LCIA Rules, Art.7.1, for example, contains such a provision.
*7 See para.4—049,
* Keighley Maxsted & Co v Bryan Durant & Co [1893] 1 Q.B. 405, where the court upheld an award
made by a panel of five chosen by a committee of the London Corn Trade Association.
* Cited above in fn.38. Presumably a similar selection is carried out by the British Boxing Board of
Control but the point is not discussed in the judgment in Watson v Prager and another [1991] 3 All
E.R. 487.
40
For an example of a finding that an agreement to refer a valuation to a partnership was a reference
to that partnership to act as arbitrators, see Leigh v English Property Corp Ltd [1976] 2 Lloyd’s Rep.
298.
*! Section 26(1) of the Arbitration Act 1996.
 Qualifications of an Arbitrator 121

Tribunals of specific number of members. Where an arbitration 4-016

agreement provides for a tribunal of a specific number of members, a tribunal
composed of a different number of members does not have jurisdiction*®? unless
the parties to the arbitration agree to vary or waive the requirement, or a party is
in default of appointment*? or loses the right to object.**
If a vacancy occurs because one member of the tribunal dies, resigns or is
removed, the parties may agree not to replace him in which case the remaining
members of the tribunal (a truncated tribunal) may proceed with the arbitration
and make an award.*°

(b) Special qualifications

Special qualifications and jurisdiction. The arbitration agreement 4-017

may provide that the member(s) of the tribunal must have some special qualifica-
tion. It is then a ground of objection to the jurisdiction of a tribunal that one or
more of its members does not have that qualification.*° The sort of qualification
required may be:

® membership of a particular trade association” or; ’

® being “commercial men’’** or;

® being a Queen’s Counsel.

Special qualifications that tribunal members must have may be imposed:

® either expressly by the words of the arbitration agreement or;

@ indirectly by the rules incorporated into an arbitration agreement.

The requirement that members of a tribunal hold a particular qualification does

not extend to the umpire appointed in the same reference unless the arbitration
agreement, or the rules it incorporates, require the umpire to have that same
qualification.*? The courts strive to uphold the jurisdiction of a tribunal if the
deviation from the qualification is not clearly established.”

” Mallozzi v Carapelli SpA [1976] 1 Lloyd’s Rep. 407.

8 Section 17 of the Arbitration Act 1996.
# Section 73(1)(d) of the Arbitration Act 1996, see para.7-127.
45 Section 27(1)(a) of the Arbitration Act 1996 contemplates this possibility as do some arbitration
rules, e.g. ICC Rules, Art.12.5.
+© See para.7—114 for discussion of this challenge as a ground for applying to the court for remoying
the arbitrator.
+7 Oakland Metal Co v Benaim (D) & Co [1953] 2 Q.B. 261; Jungheim, Hopkins & Co v Foukelmann
[1909] 2 K.B. 948.
48 See para.4-018.
49 Macleod Ross 5 Co v Craddock Manners Lid [1954] 1 Lloyd’s Rep. 258—contrast Rahcassi Shipping
Co SA v Blue Star Line [1969] 1 QB. 173.
50 Pan Atlantic Group Inc and others v Hassneh Insurance Co of Israel Lid [1992] 2 Lloyd’s Rep. 120,
where the Court of Appeal dismissed a challenge to an arbitrator who had resigned from a position
that met the requirements.
 122 The Tribunal

The effect of a successful challenge to an arbitrator on the ground that he does

not have a special qualification required by the arbitration agreement is that the
appointment, and all proceedings which follow, including the award, are void,
because the arbitrator lacks jurisdiction.*' Further, a mistake as to his qualification
may Vitiate a party’s consent to the appointment,** but the right to object can be
lost if it is not exercised in a timely fashion.**

4-018 “Commercial Men’’. Arbitration clauses sometimes specify that tribunals

are to be composed of ‘““commercial men”. The courts are reluctant to lay down
general principles as to the meaning of this expression, preferring to construe the
expression in its context. For example, someone who had formerly been a solicitor,
but was for many years a full-time maritime arbitrator, was held to be within the
class of persons to whom the parties to a charterparty were referring when using
the expression “‘commercial men”. What mattered was the “‘arbitrator’s practical
commercial experience’’.°*

(c) Judges”

4-019 Judges may sit as arbitrators. In special circumstances, a judge of the

Commercial Court or the Technology and Construction Court (a TCC judge) may
accept appointment as a sole arbitrator or as an umpire,*° although such appoint-
ments are rare. The award of a judge who sits as an arbitrator or umpire is subject
to appeal in the same way as an award made by an arbitrator who is not a judge,
except that appeals from the decision of a judge-arbitrator are to the Court of
Appeal.*’ Such an appeal against the decision of a judge—arbitrator was made in
Henry Boot Lid v Alstom Combined Cycles.°* The Court of Appeal in that case also
found that the appeal raised a question of general importance, but it was not
sufficient to justify giving leave to appeal to the House of Lords.*? An application
that a judge at the trial of an action sit in the dual capacity of judge and arbitrator

*' Rahcassi Shipping Co SA v Blue Star Line Lid cited above in fn.20, Pando Compania Naviera SA v
Filmo SAS [1975] 1 Q.B. 742.
* In Continental Grain Co v China Petroleum Technology & Development Corp, Mance J., December 4,
1998, the court reviewed different kinds of mistake and found on the evidence that the mistake by
one party (unilateral mistake) was not sufficiently fundamental to vitiate consent to the appointment
of the arbitrator concerned.
»* Section 73(1)(a) of the Arbitration Act 1996, see para.7—-127 and footnote.
* Pando Compamia Naviera SA v Filmo SAS cited above in fn.51.
°° See DAC report, para.340-3.
°° Section 93(1) of the Arbitration Act 1996. A judge may not, therefore, accept appointment as a
party-appointed arbitrator or as a chairman of a tribunal.
*? Section 93(6) of the Arbitration Act 1996 and Sch.2, para.2(1).
8 [2005] EWCA Civ 814.
»” Henry Boot cited above in fn.58, paras 82-86.
 Qualifications of an Arbitrator 123

was refused on the basis that no one person can fulfil both functions at the same
time.°? Where a judge is appointed as arbitrator, his fees are paid to the
court.°!

Judges of the Commercial Court. The Commercial Court is frequently 4-020

concerned with disputes over contracts of the type which contain arbitration
clauses, classically, commodity and shipping contracts. The commercial court also
supervises arbitrations arising from commercial contracts of that type and is the
court which generally deals with points of law arising from any arbitration.°?
Judges of the Commercial Court are therefore suited to be chosen as arbitrators in
commercial cases.°* However, a judge of the Commercial Court is not permitted
to accept an appointment unless the Lord Chief Justice has informed him that,
having regard to the state of business in the High Court and the Crown Court, he
can be made available.°* In practice, appointments of commercial judges as
arbitrators are very rare although the judiciary has made a recent attempt to
change this practice.

TCC judges. Previously known as Official Referees, the judges of the Technol- 4-021
ogy and Construction Court decide a broad scope of claims that are not limited to
technology and building disputes.°° A TCC judge may, if in all the circumstances
he thinks fit, accept an appointment as sole arbitrator, or as umpire under an
arbitration agreement. He will not, however, be permitted to accept an appoint-
ment unless the Lord Chief Justice has informed him, that, having regard to the
state of the court’s business, he can be made available.°’

County court judges. There is no similar statutory provision permitting 4-022

County Court judges to be appointed by parties as arbitrators, but they do act as
statutory arbitrators in county court claims.°*

© Wilson v Keen, unreported, Court of Appeal, June 25, 1991.

51 Section 93(4) of the Arbitration Act 1996, cf. Administration of Justice Act 1970, s.4.
S“GRRaPt 62(12):
63 A commercial claim means “any claim arising out of the transaction of trade and commerce”,
including the specific claims listed in CPR Pt 58.
+ Section 93(2) of the Arbitration Act 1996.
6° On May 7, 2007, Mr Justice David Steel, the judge in charge of the Commercial Court, wrote to
all heads of chambers and law firms in London to make sure that sets were “aware” that judges
“may accept appointments as a sole arbitrator”. Reported at mmm.thelamyer.com.
66 CPR Pt 60. The Practice Direction made under this Part gives examples of the TCC claims—see
White Book, 2E—10.
67 Section 93(3) of the Arbitration Act 1996, cf. Arbitration Act 1950, s.11, as amended by Court and
Legal Services Act 1990, s.99.
68 Section 92 of the Arbitration Act 1996, see Appendix 3.
 124 The Tribunal

(d) Impartiality and disinterest

4-023 General. The general proposition that arbitrators should be impartial and
disinterested is uncontroversial. It is more difficult to provide an adequate defini-
tion of partiality and interest, but the law has been clarified. Section 33 of the Act
imposes on the tribunal a duty to act fairly and impartially as between the
parties,’ but as will be seen from the discussion in the section, Duties of the
Arbitral Tribunal,” the tribunal may, because of arbitration rules incorporated
into the arbitration agreement,’' have an additional duty to be independent of the
parties. The subjects of impartiality and independence, as well as the related
subject of neutrality, are discussed in that later section of this chapter.”

4. APPOINTMENT OF AN ARBITRAL TRIBUNAL

(a) Introduction

4-024 Appointment by agreement of the parties. Arbitration agreements

usually give the parties an opportunity to agree on the appointment of the arbitral
tribunal. The most satisfactory result is where the parties agree on the tribunal.
This is because, if parties do not agree on who to appoint, they lose control over
the composition of the tribunal. The control then passes to an appointing author-
ity, or to the court. Parties are free to agree on the procedure for appointing the
tribunal, including the procedure for appointing a chairman.’* Whatever proce-
dure they adopt, parties should look at each other’s nominations objectively and
try to rationalise any suspicion they feel about a particular nomination. Unless a
procedure for appointment has already been agreed and implemented,”* simulta-
neous exchange oflists may help to avoid such suspicion. Each party puts forward
a list of names’> proposed for appointment as arbitrator. Parties exchange and
compare each other’s lists to see if any of the names appear on both lists. The same
nominee(s) appearing on both lists may or (if that is the parties’ agreement) will
be selected. Even if there are no common names, there may be one or more
candidates on the lists which are acceptable to both parties. If necessary, lists can
continue to be exchanged until there are sufficient matches to constitute a tri-
bunal.

© Section 33(1)(a) of the Arbitration Act 1996.

” Paragraphs 4-104 et seq.
7! For example, LCIA Rules, Art.5.2 and ICC Rules, Art.7.1. See further paras 4-112 to 4-113.
72 See paras 4-107 et seq.
7 Section 16(1) of the Arbitration Act 1996.
The exchange of lists is best suited for appointment of a sole arbitrator or chairman of a tribunal.
When a claimant has already nominated an arbitrator pursuant to an agreed procedure, the
opportunity for exchanging lists will only arise for the appointment of a chairman.
Tn one Canadian case, unreported but known to the authors, the lists were of as many as 10
nominations for each member of a three-arbitrator tribunal.
 Appointment of an Arbitral Tribunal 125

Statutory appointment procedure. If there is no agreement on the 4-025

procedure for appointment, the Act provides the following’®:

(1) Tmbunal of one arbitrator: parties jointly appoint the arbitrator not later
than 28 days after service of a request in writing by either party to do
so. 77

(ii) Tribunal of two arbitrators: each party appoints one arbitrator not later
than 14 days after the service of a request in writing by either party to do
so. 78

(111) ‘Tribunal of three arbitrators: each party appoints one arbitrator not later
than 14 days after service of a request in writing by either party to do so,
and the two so appointed forthwith appoint a third arbitrator as the
chairman of the tribunal.’”

(iv) Tribunal of two arbitrators and an umpire: each party appoints one
arbitrator not later than 14 days after service of a request in writing by
either party to do so. The two so appointed may appoint an umpire at any
time after they themselves are appointed and shall do so before any
substantive hearing or forthwith if they cannot agree on any matter relating
to the arbitration.*°

(v) Upon the failure of any of the above, and in any other case: parties should
apply to the court.*!

Appointment by an appointing authority.** If the parties fail to 4026

agree on the appointment of the tribunal, the arbitration agreement usually
provides that those powers of appointment are exercisable by a third party known
as an appointing authority. In international arbitrations whose seat*’ is outside
England, specifying an appointing authority in the arbitration agreement is crucial
to the effectiveness of the parties’ chosen dispute resolution procedure if the court
in the country where the seat is located will not appoint a tribunal. The jurisdic-
tion of the English court as an appointing authority does not extend to arbitrations

76 Section 16(2)-(7) of the Arbitration Act 1996, cf. Model Law, Art.1 1(2) and (3): (see Appendix
4).
ze ee 16(3) of the Arbitration Act 1996. If there is no agreement as to the number of arbitrators,
the Arbitration Act 1996 provides that the tribunal shall consist of a sole arbitrator. Seeqssi5(s))
Arbitration Act 1996 and para.4—006.
78 Section 16(4) of the Arbitration Act 1996. See also s.15(2) of the Arbitration Act 1996 and
para.4-007 for the meaning given to an agreement to appoint two arbitrators.
79 Section 16(5) of the Arbitration Act 1996, cf. Model Law, Art.1 1(3)(a): (see Appendix 4).
89 Section 16(6) of the Arbitration Act 1996.
81 Sections 16(7) and 18(2) of the Arbitration Act 1996, see paras 7-097 et seq.
*2 See para.4-049.
83 See paras 2-100 et seq.
 126 The Tribunal

where the seat is not in England, unless no seat has been designated or deter-
mined“ and because of some connection with England, the court is satisfied that
it is appropriate to exercise that power.*

+027 Appointment by the court and settling the type of tribunal.

The failure by the parties to agree on an appointment procedure in circumstances
for which the Act does not provide a procedure*® or the breakdown of any
appointment procedure can be resolved by an application to the court*’ as long as
the seat of arbitration is in England.** There must however be a failure in the
procedure for appointment and the statutory requirements of s.18 of the Act must
be fulfilled.’ The court has regard to any agreement of the parties as to the
qualifications of the arbitrators.°? The court also has to deal with arbitration
agreements which fail to be specific about the tribunal. For example:

@ Disputes arising under a contract were to be settled “by arbitration in the

usual way”, which the court interpreted to mean the way in which disputes
arising out of the particular commodity or class of commodity were settled in
London, namely, by two arbitrators, and by an umpire if they disagreed.”

@ A charterparty provided ‘‘arbitration, if any, is to be settled in London

according to British law in the customary manner’’. This was held to require
the decision of two arbitrators and an umpire if they disagreed. The court
found it was not customary to refer disputes of this kind to a single arbi-
trator.”

Despite the vagueness of the wording, specific choices were held to have been
made by the parties in these two examples. Had the court not made those findings,
a single arbitrator would have been appointed. English law presumes that every
arbitration agreement contains a provision that the reference shall be to a single
arbitrator,’* unless a contrary intention is shown.** Internationally, tribunals of
three arbitrators are much more common.”

“+ An appointing authority can determine a seat of arbitration when the parties have not chosen one
(see e.g. Art.14.1 of the ICC Rules of Arbitration).
SS Section 2(4) of the Arbitration Act 1996,
*° Categories (i) to (iv) in para.4-025 specify the statutory procedure. They do not provide for the
unusual agreement for the appointment of more than three arbitrators.
*” Section 18 of the Arbitration Act 1996, See paras 7-097 ef seg.
‘Ss Even if England is not the seat of arbitration, the court may help in the circumstances described
above in para.4—026 (s.2(4) of the Arbitration Act 1996).
See decision of Eddy J. in Glidepath v Thompson [2004] EWHC 2234 (Q.B.) at [49].
°° Section 19 of the Arbitration Act 1996. See para.7—105.
°! Scrimaglio v Thornett & Fehr [1924] 131 L.T. 174 on appeal; (1924) 18 Ll. L. Rep. 148.
°2 Laertis Shipping Corp v Exportadora Espanola de Cementos Portland SA, The “Laertis” [1982] 1
Lloyd’s Rep. 613.
°§ Section 15(3) of the Arbitration Act 1996. See “The Lapad” [2004] EWHC 1273 (Comm) for such
a case and see para.+—006.
** Although the two examples referred to above were decided on the basis ofthe previous legislation,
we consider that the court would come to the same conclusion under the present law.
°S See UNCITRAL Rules, Art.5, Model Law, Art.10(2) (see Appendix 4). The ICC and the LCIA
have a discretion respectively under ICC Rules, Art.2.3, and LCIA Rules, Art.3.2.
 Appointment of an Arbitral Tribunal L277

(b) Appointment by the parties

Time for appointment. In arbitration agreements for future disputes it is 4-028

not usual to appoint named individuals as tribunal members before the dispute has
arisen. Time is likely to pass between the making of the original contract and the
dispute arising. By then the individual(s) named in the arbitration agreement may
have died, retired, become ill, have conflicts of interest or be otherwise unavailable.
Parties generally agree to appoint a tribunal after the dispute has arisen. The usual
forms of arbitration clause prevent them from doing so in advance of a dispute.
When the dispute has arisen it will be a matter of concern to the party or parties
who wish to make progress in the arbitration to appoint a tribunal without delay,
because, until a tribunal is appointed, little progress can be made in an arbitra-
tion.
The arbitration agreement often specifies a time within which an arbitrator
must be appointed, failing which a party may lose the right to nominate”® or
appoint an arbitrator, which may even result in the other party’s nominee being
appointed as the sole arbitrator.’’ In the absence of agreement the time limit is
provided by statute.”
In submission agreements” the identification of members of the arbitral tribu-
nal is one of the matters for agreement between the parties. The tribunal is
commonly agreed to in the submission agreement; or at the very least, the
arbitration agreement will set out the mechanism by which the arbitrator(s) are to
be appointed.'°

Formalities. The general law has no formal requirements for the appointment 4-029
of arbitral tribunals.'°'! Appointment is often effected on the parties’ behalf by
agents, such as their solicitors or brokers. Where the tribunal is to consist of a
single arbitrator, and the parties agree on the name, a letter from each of the
parties or their representatives to the proposed arbitrator, and his acceptance, are
sufficient to achieve his appointment. Where there is to be a two-member tribunal
with one arbitrator appointed by each party, a letter nominating one member of
that tribunal will be sufficient to appoint, because the other party’s agreement ts
not necessary: in that case the letter should go to both that arbitrator and the
opposing party and, if known, the other arbitrator. Special formalities (such as
appointment by deed) may be prescribed by the arbitration agreement, but are

°° Under many rules of arbitration each party has a right to nominate an arbitrator, but the
appointment is made or confirmed by the appointing authority.
°? This situation occurred in Minermet SpA v Luckyfield Shipping Corp [2004] EWHC 729.
%8 Arbitration Act 1996 s.16(3), (4), (5) and (6).
°° Arbitration agreements to refer existing disputes, see para.2—003.
100 For example, by an appointing authority, see para.4—049.
101 The practice of appointing by deed has become rare. Documents executed as deeds may be subject
to stamp duty.
 128 The Tribunal

now rarely encountered. When they are, they should be followed, although the
court may be able to correct a defective appointment.'°*

4-030 Completing a valid appointment. There are three requirements for the
completion of a valid appointment'”’:

(1) informing the other party;

(2) informing the nominee; and

(3) securing the nominee’s agreement to act.

4-031 Informing the other party. The importance of informing the other party
should be obvious, and it is now a statutory requirement.'®* In giving this
information care should be taken to specify the correct name and address of the
person nominated as arbitrator and the party making the nomination.'°°

4-032 Informing the person nominated as arbitrator. It is important to

inform the person nominated as arbitrator because he may need to take some time
to consider whether to accept the appointment, for instance by establishing
whether he has a conflict of interest. Also, he may have to start acting immediately
he accepts the appointment.'°° As long as he accepts it does not matter whether
the nominee is told (and accepts) before or after notification to the other party, but
it is preferable that he be informed beforehand in case he cannot accept.

4-033 Securing agreement to act. The appointment cannot be complete with-

out the person nominated as arbitrator having indicated his agreement to act.'°”
Unless the arbitration agreement provides otherwise, no particular form of accep-
tance is required, but an acceptance in writing or confirmed in writing is advis-
able.

4-34 All appointments must be valid and co-extensive. Where the

reference is to a tribunal of more than one arbitrator, all must be properly
appointed, and all must be appointed to decide the same dispute. Otherwise the

' Finzel Berry & Cov Eastcheap Dried Fruit Co [1962] 1 Lloyd’s Rep. 370 when the court found that
the failure to follow the mechanical route of communication did not invalidate the appointment.
'S per Lord Denning MLR. in Tradax Export SA v Volkswagenwerk AG [1970] 1 Lloyd’s Rep. 62 at
64.
' Section 17(2) of the Arbitration Act 1996, and DAC report, para.83. Previously it could arise under
contract: 7em v Harris (1848) 11 Q.B. 7.
'° See para.5—024 for discussion about getting the notice of arbitration right.
'° Bunge SA v Kruse [1979] 1 Lloyd’s Rep. 279.
' Tradax Export SA v Volkswagenwerk AG, “La Loma” [1970] Q.B. 537.
 Appointment of an Arbitral Tribunal 129

award may be challenged.'°* A party may lose the right to object by not objecting
to an appointment forthwith or within such time as is allowed by the arbitration
agreement.!°”

(c) Sole arbitrator

The simplest system. Some arbitration agreements specify a reference to 4-035

a sole arbitrator. Where no choice is made, the law implies a reference to a tribunal
consisting of a sole arbitrator.''° If no procedure for appointment has been agreed,
parties should appoint jointly not later than 28 days after service of a request in
writing by either party to do so.''' The parties may agree on the identity of the
proposed arbitrator, in which case they can complete the appointment provided
the nominee accepts the appointment. If the parties do not agree on who to
appoint, the appointment will fall to be made by the appointing authority specified
in the arbitration agreement, or by an appointing authority agreed on by the
parties specifically for the purpose, or by the court''*: the court can give directions
as to the making of an appointment, direct how the tribunal is to be constituted,
revoke an appointment as well as making the necessary appointment itself.''* The
court can also provide similar assistance where an appointed single arbitrator
ceases to hold office.’

(d) Tribunal of two arbitrators

City of London. Tribunals of two arbitrators have been and continue to be 4-036
found in trade, insurance, shipping and commodity arbitrations in the City of
London. English law presumes the parties’ choice of a tribunal of two arbitrators
where the arbitration agreement uses the simple word “‘arbitrators” on the basis
that two is the irreducible minimum.''* Any reference to two arbitrators implies
the appointment of an additional arbitrator as chairman,''® so there has to be
specific agreement if the third arbitrator is to act as an umpire, or for there to be

'08 For challenges of an award or a tribunal to its substantive jurisdiction, see Arbitration Act 1996
s.67(1) and para.8—054. Davies and another v Price (1862) 6 L.T. 713, where one arbitrator’s
authority was expressly limited to construction of a lease.
'©9 Section 73 of the Arbitration Act 1996, see para.7-127. Before this was enacted, questions of
acquiescence and estoppel arose. For instance in Oakland Metal Co Lid v D Benaim © Co Ltd [1953]
2 QB. 261 a party was estopped from objecting, after the award, that the arbitrator he had
nominated was not properly qualified.
410 Section 15(3) of the Arbitration Act 1996.
"1 Section 16(3) of the Arbitration Act 1996.
12 The court granted the claimant’s application to appoint a sole arbitrator in Atlanska Plovidba v
Asturianos (The “Lapad”) [2004] EWHC 1273 (Comm).
13 Section 18 of the Arbitration Act 1996, cf. Model Law, Art.11(4): see Appendix 4.
"4 Section 27 of the Arbitration Act 1996.
"5 See para.4—007.
116 Section 15(2) of the Arbitration Act 1996.
 130 The Tribunal

two arbitrators and no chairman.''’ An agreed award by a tribunal of two is

completely valid.''®

4-037 Sole arbitrator appointed in default. The Act provides that, unless
the parties agree otherwise,''? where each of the two parties is to appoint an
arbitrator and one party refuses'”’ to do so (known as the party in default), or fails
to do so within the time specified,'*' the other party, having duly appointed his
arbitrator, may give notice to the party in default that he proposes to appoint his
arbitrator as sole arbitrator.'”” If the party in default does not within seven clear
days of that notice make the required appointment and notify the other party that
he has done so, the other party may appoint his arbitrator as sole arbitrator whose
award shall be binding on both parties as if he had been so appointed by
agreement.'** Those responsible for drafting the Arbitration Act 1996 found that
the procedure was in common use and preferable to having to make an application
to the court.'** The safeguard against abuse is that the party in default may apply
to the court for an extension of time to appoint a second arbitrator and to set aside
the appointment of the sole arbitrator,'*? which the court is likely to do provided
that the application is made promptly,'*° and that the partiers have not otherwise
agreed, }?7

4-038 Strings of contracts. Special arbitration rules!”* have been evolved to deal
with disputes about “strings” of contracts where the same goods have been sold
on several times, to avoid the necessity for a party in the middle of the string to
appoint an arbitrator.'*? Under the GAFTA No.125 Arbitration Rules, the party
initiating the claim secures the acceptance of his arbitrator, and gives notice of his
intention to proceed to arbitration and of the appointment of his arbitrator to the
next person in the string. Provided that person passes on notice of the appoint-
ment without undue delay, up or down the string as the case may be, that is

"7 Sections 15 and 21 of the Arbitration Act 1996.

"* Tarmarea SrL v Rederiaktiebolaget Sally (The “Dalny”’) [1979] 2 Lloyd’s Rep. 439, and s.22 of the
Arbitration Act 1996.
' This exception is important, because the arbitration agreement or rules incorporated into that
agreement often provide for appointment in default by an appointing authority (see para.4—049).
'° In the case of a refusal there is no need to wait for the expiry of the relevant time period, DAC
report, para.86,
"1 See “The Lapad” (2004] EWHC 1273 (Comm) where this occurred.
'% Section 17(1) of the Arbitration Act 1996, cf. Arbitration Act 1950, s.7.
'23 Section 17(2) of the Arbitration Act 1996, cf. Arbitration Act 1950, s.7. This was done in Minermet
SpA Milan v Luckyfield Shipping Corp SA [2004] EWHC 729.
"4 DAC report, para.84.
'*° Section 17(3) of the Arbitration Act 1996 and para.7-099.
''The grounds are specified in the Act, as the DAC recommended that they were best left to the
courts to develop in the light of the overall philosophy of the Act (DAC report, para.876).
'7 In Minermet SpA Milan v Luckyfield Shipping Corp SA [2004] EWHC 729, the parties had agreed
otherwise by an express term of their contract and the court was unable to extend the time to
appoint pursuant to s.17 of the Act.
'8 Refined Sugar Association, r.4, GAFTA 125, r.5.
' There were 40 parties in the string reported in EDM JM Mertens & Co PVBA v Veevoeder Import
Export Vimex BV [1979] 2 Lloyd’s Rep. 372, based on a previous wording of GAFTA 125.
 Appointment of an Arbitral Tribunal 131

sufficient and there is no need for an intermediate party to appoint his own
arbitrator. Under the Refined Sugar Association Arbitration Rules, it is a matter
within the absolute discretion of the Association’s council whether this procedure
can be invoked. It is difficult to see how the procedure could work except for
quality disputes.'*°

Where there is a vacancy. Ideally, each party appoints an arbitrator and 4-039
those arbitrators complete the reference. Ifa vacancy arises, the parties are free to
agree on how to fill it, whether and if so to what extent the previous proceedings
should stand and what effect (if any) the arbitrator’s ceasing to hold office has on
any appointment made by him, whether alone or jointly.'*! If they cannot agree,'*
the parties are to follow the statutory procedure.'** This requires the party whose
appointed arbitrator has ceased to hold office to make a fresh appointment not later
than 14 days after service of a request in writing by the other party to do so.'** If
that fails, the default procedure can be invoked, unless the parties otherwise
aoe

‘““Ceases to hold office”. The Act provides how a vacancy should be filled 4-040
when an arbitrator ceases to hold office.'°° This will arise when an arbitrator has
died,'*’ or his authority has been revoked by the court'** or he has been removed
by the court.'*’ Resignation is now given statutory recognition and it is clear from
the wording of the section that resignation necessarily implies ceasing to hold
office. '*° If an arbitrator fails or neglects to act, but does not resign, steps will have
to be taken to remove him before there can be a vacancy.'"!

“Having duly appointed his arbitrator”’. A party giving notice to the 4-041
other to nominate an arbitrator must have nominated, or must simultaneously
nominate, an arbitrator otherwise his notice is invalid.'*”

Action by recipient of notice. The party who receives notice to appoint 4-042
an arbitrator must not only make the appointment, but also give notice of that

'30 Derek Kirby Johnson, “Commodity Trade Arbitration” in Bernstein’s Handbook of Arbitration and
Dispute Resolution Practice (4th edn, Sweet & Maxwell, 2003) at para.44.8.
'31 Section 27(1) of the Arbitration Act 1996, cf. Model Law, Art.15, see Appendix 4.
132 Section 27(2) of the Arbitration Act 1996.
133 Section 27(3) of the Arbitration Act 1996 brings in the provisions of s.16 and s.18.
134 Section 16(4) of the Arbitration Act 1996. We suggest this is the right interpretation. [t would be
odd if the party whose arbitrator had not ceased to hold office could be obliged to make a second
appointment.
'S5 Section 17 of the Arbitration Act 1996.
'36 Section 27(1) of the Arbitration Act 1996.
'37 Section 26(1) of the Arbitration Act 1996.
'38 Section 18(3)(c) of the Arbitration Act 1996.
139 Section 24 of the Arbitration Act 1996: see paras 7-111 et seq.
40 Section 25 of the Arbitration Act 1996.
'41 Section 24(1)(d) of the Arbitration Act 1996.
142 Section 17(1) of the Arbitration Act 1996, and see Vulcaan NV v Mowinckels Redert [1938] 2 All
E.R. 152 on the earlier wording in the Arbitration Act 1950, s.7(b).
 132 The Tribunal

appointment to the other party within seven clear days'* 3 in order to avoid
appointment by default. This may involve appointment by an agreed appointing
authority, or in the absence of agreement appointment by the other party of his
arbitrator as sole arbitrator in the reference.'**

4-043 Appointment to act as sole arbitrator. There must be an actual

appointment to act as sole arbitrator.'*? Giving the other party more time to
appoint will not of itself invalidate the appointment.'*°

(e) Appointment of third arbitrator or umpire

4-044 Status and role of third arbitrator. Formerly in England when two
party-appointed arbitrators appointed a third arbitrator, he became an umpire.
This ran counter to international practice, in which umpires are unknown. Since
1979 any method of appointing a three-person tribunal, unless a contrary inten-
tion is expressed, results in a panel of three arbitrators, not two arbitrators plus
one umpire. '47 This has the important consequence that, unless otherwise agreed
by the parties, '48 the award of any two of the arbitrators is binding.'*? That third
arbitrator is the chairman, unless the parties agree otherwise.'°° Parties are free to
agree on what the functions of the chairman are to be in relation to the making of
decisions, orders and awards.'*' If or to the extent there is no agreement, the
statutory provisions provide that decisions, orders and awards are to be made by
all or a majority of the arbitrators (including the chairman), and the view of the
chairman prevails only in relation to a decision, order or award in respect of which
there is neither unanimity nor a majority.'*?

4-045 Status and role of umpire. Where the parties have agreed that there is to
be an umpire, they are free to agree what the functions of the umpire are to be,
and in particular whether he is to attend the proceedings and when he is to replace
the other arbitrators as the tribunal with power to make decisions, orders, and
awards.'°* If or to the extent there is no agreement, statutory provisions apply as

3 Section 17(2) of the Arbitration Act 1996.

‘The appointment as sole arbitrator of the person appointed by the other party is discussed earlier
in this section of the chapter—see para.4—037.
' Drummond v Hamer |1942] 1 K.B. 352, where the court set aside an award made by a sole arbitrator,
because the landlord’s notice had not been an appointment of the sole arbitrator and, even if it
constituted an appointment, it was made before the expiration of the agreed time limit.
© Kiril Mischeff Lid v British Doughnut Co Ltd |1954] 1 Lloyd’s Rep. 237, CA.
"7 Section 15(2) of the Arbitration Act 1996. The law before 1979 was contained in s.9 of the
Arbitration Act 1950, which was amended by s.6(2) of the Arbitration Act 1979,
8 Section 22(1) of the Arbitration Act 1996.
4° Section 22(2) of the Arbitration Act 1996.
'° Section 15(2) of the Arbitration Act 1996.
'S' Section 20(1) of the Arbitration Act 1996.
'? Section 20(2)-(4) of the Arbitration Act 1996.
3 Section 21(1) of the Arbitration Act 1996.
 Appointment of an Arbitral Tribunal 133

follows. The umpire attends the proceedings and is supplied with the same
documents and other materials as are supplied to the other arbitrators. Decisions,
orders, and awards are made by the other arbitrators unless and until they cannot
agree on any matter relating to the arbitration, in which event they forthwith give
notice to the parties and the umpire, and the umpire replaces them as the tribunal
with power to make decisions, orders and awards as if he were sole arbitrator.
There is provision for application to the court to resolve difficulties.'*+

Form of appointment. No particular form of appointment of a third 4-046

arbitrator or umpire is necessary, but it should be in writing and state clearly
whether an umpire or a third arbitrator is being appointed, and whether, if he is
not to be an umpire, he is to act as chairman. It should also comply with any
special requirements set out in the arbitration agreement.
The arbitration agreement often states that the third arbitrator or umpire is to
be appointed by the existing members ofthe tribunal. Arbitrators with this power
are under no obligation to obtain the parties’ approval of their selection, and the
fact that the parties are dissatisfied with the choice does not for that reason alone
affect the validity of the appointment.'°? However in practice it is common for the
parties to be consulted on the identity of the third arbitrator or umpire and then
for the two arbitrators formally to make the appointment.'”°
Consultation should be limited to the identity of the third arbitrator to justify
departure from the rule against unilateral communication between one party and
an arbitrator.

Third arbitrator declining appointment. The attempted appoint- 4-047

ment of a third arbitrator or umpire who declines to accept the appointment is of
no effect. The person(s) who attempted to appoint him may appoint another 1n his
place.'°’
The court has power to appoint where a replacement third arbitrator or
umpire 158 «é¢ ceases to hold office”’.HL 5S9

Third arbitrator failing to act. An appointment of a third arbitrator or 4-048

umpire which has been made by the two party-appointed arbitrators exhausts the
power of appointment, and appointors have no power to revoke the appointment
made or to make a fresh appointment.'°° If the person appointed will not then act

'54 Section 21(2)-(6), see ss.4-172 of the Arbitration Act 1996.

85 Oliver v Collings (1880) 11 East. 367.
156 The practice of consultation does not remove the choice from the two arbitrators, but it helps to
avoid problems of conflicts, and enables the parties to comment on the suitability of the persons
proposed.
157 Trippet v Eyre (1684) 3 Lev. 263, see also Reynolds v Gray (1698) 1 L.D. Raym. 223, where an
appointment is conditional on the proposed umpire’s acceptance of office, the arbitrators can
reappoint if the post is refused.
158 Section 27 of the Arbitration Act 1996.
'59 See para.4—050.
160 Oliver v Collings (1880) 11 East. 367.
 134 The Tribunal

in the arbitration, and unless the parties agree to make some other arrangement,'*!
application to the court is the only recourse.

(f) Appointment by an appointing authority

4-049 Where the parties do not agree. Arbitration agreements often provide
for an appointing authority’ to appoint an arbitrator if the parties cannot agree.
This mechanism is most commonly applied in cases of the appointment of a sole
or third arbitrator, but it can also apply where one party has the right to appoint
an arbitrator but fails to appoint him. It is a useful arrangement which provides a
cheaper and quicker route to an appointment than application to the English court
or to another institution in default.'°? As is apparent from their names, some of the
appointing authorities are specialist professional institutions or trade associations
and should be nominated only in arbitration agreements providing for the resolu-
tion of disputes within their particular expertise. Others are specialist arbitration
bodies.
The means by which the parties apply to an appointing authority for the
appointment of arbitrators is likely to be specifically laid down by each appointing
authority. A fee is almost invariably charged. Reference to an appointing authority
usually follows attempts by the parties to agree on an appointment in which one
or more names may have been considered. An appointing authority may be
unwilling to appoint a person who has been put forward by one party and rejected
by the other party. This sometimes leads to the curious tactic of not putting one’s
preferred candidate forward for agreement by the other party, nor mentioning that
candidate in the application to the appointing authority, in the hope that this
increases the chances of the preferred candidate actually being appointed. The
risks inherent in this tactic are obvious. We favour the direct method of making
the identity of one’s preferred candidate clear from the outset and, if necessary, the
parties can agree that if the appointment falls to be made subsequently by an
appointing authority, the names of prior suggested candidates will not be dis-
closed. Parties often make representations to an appointing authority about the
identity, qualifications and characteristics of appointees. An appointing authority
is not bound to follow representations which do not track any requirements for
arbitrators contained in the arbitration agreement, unless, possibly, both parties
agree on them and they do not conflict with the arbitration agreement. Once an
appointing authority starts dealing with the appointment, parties are not able to
influence the procedure. There are no legal safeguards as appointing authorities
are immune from suit unless the act or omission complained of is shown to have
been in bad faith.'°' So it may be only in their reputation that appointing
authorities can be affected by the consequences of a misguided appointment.

'©l Section 27(1) of the Arbitration Act 1996,

'2 For list of appointing authorities, see Appendix 5.
'°* Parties who choose the UNCITRAL Rules, for example, should name an appointing authority in
their arbitration agreement rather than leave it in default to be designated on request by the
Secretary General of the Permanent Court of Arbitration at The Hague (Art.6.2).
'e¥ Section 74. See para.3-047 of the Arbitration Act 1996.
 Remuneration of an Arbitral Tribunal 135

(g) Appointment by the court

Where the court has power to appoint. The court’s power to appoint 4-050
arbitrators and umpires has been touched on in the preceding sections and is
discussed fully in Ch.7.'°

(h) Challenges to appointment

Challenge procedures. Before accepting an appointment, an arbitrator 4-051

should consider whether he is suited to the particular case. Does he have the
required qualifications? Is he impartial and disinterested?'°° If not, he may be
challenged. A party who wishes to challenge an arbitrator should examine the
provisions of any arbitration rules which apply to the arbitration.'°’ If no arbitra-
tion rules apply, application will have to be made to the court.'®* But where
arbitration rules provide machinery for challenge, the terms of those rules are
likely to make it essential to use that machinery rather than apply to the court, at
least in the first instance.'®? In any event, this is required by the Act, which
provides that if there is an arbitral institution or person vested by the parties with
power to remove an arbitrator, the court shall not exercise its power of removal
unless satisfied that the applicant has first exhausted any available recourse to that
institution or person.'’”? The machinery for challenge, as set out in the various
arbitration rules, often requires challenges to be made by a party within a short
period of becoming aware of the ground for challenge, with the supervising
authority deciding the question if it is contested.'’! Otherwise, there is no time
limit for applying to the court under s.24 of the Act for the removal of an
arbitrator, although by delaying a party can lose his right to relief.'’? A successful
challenge would result in an order for removal.

5. REMUNERATION OF AN ARBITRAL TRIBUNAL

(a) The right to remuneration

Express or implied. In most cases the tribunal enters into an express 4-052
agreement with the parties about the level of fees and the right to be paid certain

'65 See paras 7-095 et seq.

166 See paras 4-023 et seq. above.
167 For example, there are challenge procedures in the LCIA Rules, Art.10, and the ICC Rules,
Art.11.
168 See paras 7-110 et seq. f
169 In the ATET case [2002] 2 All E.R. (Comm) 625, the first challenge was made to the ICC Court
of Arbitration.
170 Section 24(2) of the Arbitration Act 1996.
11 1CC Rules, Art.2.8-11, ICSID Rules, Art.9, LCIA Rules, Art.3.7-8, Model Law, Art.13 (see
Appendix 4). Where the challenge is decided by the tribunal, as in the case of ICSID and the Model
Law, there are procedures for appeal.
'72 See para.7—0806.
 136 The Tribunal

expenses. It is in the interests of the parties as well as the tribunal for this to be
done no later than the time of the tribunal’s appointment. Where there is no
express agreement about fees and expenses, the right to remuneration has been
understood to depend on an undertaking, to be implied from the appointment of
an arbitrator, to pay reasonable remuneration for his services and those of the third
arbitrator or umpire'’*: statute now makes this a joint and several liability of the
parties, which they cannot agree to exclude,'’* and qualifies the obligation to pay
such reasonable fees and expenses by adding the words “‘(if any) as are appropriate
in the circumstances’’.'”? This qualification protects the parties in respect of
attempts by an arbitrator to charge fees or expenses that are excessive.'’° An
arbitrator’s expenses are usually limited to travel and hotel bills but in certain cases
they may extend to the cost of a secretary'’’ or the fees of a legal adviser or
expert.'’”* A wise arbitrator ensures that, so far as possible, the parties contract
directly with suppliers for the other expenses, such as the hiring of suitable
accommodation for the hearing.'”’

4-053 Invalid appointments. Where an appointment is invalid, depending on the

circumstances, the party who appointed the arbitrator is generally liable for his
fees. However, where an arbitrator to his own knowledge has no jurisdiction, for
instance because he lacks the necessary qualification,'’® and his appointor was not
aware of the lack of the qualification, the arbitrator ought not to be entitled to
recover fees.'*!

4-054 Where no award made. The implied undertaking to pay reasonable

expenses to an arbitrator used not to apply unless the arbitrator had delivered an
award.'** The statutory provision has no such limitation.'*’ In many cases no
award is delivered, either because the parties settle the dispute, or because the
claimant gives up. The law now entitles an arbitrator to reasonable fees for work
done until the time when activity ceased, plus his reasonable expenses. It is
however much more satisfactory for there to be an express agreement between the
parties and the arbitrator entitling the arbitrator to payments in these circum-
stances.

'3 Brown v Llandovery Terra Cotta and Co Ltd (1909) 25 T.L.R. 625; John Anthony Tackaberry v
Phaidon Navegacion SA |1992) A.D.L.R.J. 112.
™* Section 28(1) of the Arbitration Act 1996, s.4 and Sch.1.
'75 Section 28(1) and (5) of the Arbitration Act 1996, DAC report, para.123.
'° A charge for typing services on top of a reasonable hourly rate of fees may be excessive: Hussman
(Europe) LLT v Al Ameen Development {2000] 2 Lloyd’s Rep. 83—see para.4—059.
m7 See para.5—173.
78 See para.5—160.
'° But see para.4—082 on the cost of tribunal experts.
'80 See paras 4-017 et seq.
'*! We do not know any precedent to support either of the propositions oflaw set out in this paragraph,
but submit they are right on general contract principles.
'82 See Brown v Llandovery Terra Cotta and Co Ltd (1909) 25 T.L.R. 625.
'83 Section 28(1) of the Arbitration Act 1996,
 Remuneration of an Arbitral Tribunal 137

Where arbitrator is removed or resigns. Where the court removes an 4-055

arbitrator or an application is made consequent upon his resignation, the court
may make orders with respect to his entitlement to fees or expenses, or the
repayment of any fees and expenses already paid.'** Presumably the level of fees
which the arbitrator might properly charge should be determined by the extent of
his fault in the circumstances leading to his removal: in the case of a resignation,
the court will have regard to whether it was reasonable in all the circumstances for
the arbitrator to resign.'** The court’s power to order an arbitrator to make
repayment of his fees on removal or resignation is a means by which the court may
sanction an arbitrator for breach of his duties. Apart from a possible reduction of
fees, an arbitrator who resigns may incur liability for costs that arise as a result of
that resignation,'*® and the statutory immunity does not affect any liability
incurred by an arbitrator by reason of his resigning.'*7

(b) Fixing the level of fees

Bases of fee levels. The level of fees may be agreed directly with each 4-056
arbitrator as normally occurs in an “ad hoc” arbitration or be fixed by the
institution supervising the arbitration in accordance with the terms of appoint-
ment that are usually specified in the relevant arbitration rules. In the latter case
the chosen institution will invariably charge a fee for services rendered,'** which
is in addition to fees and expenses paid to the tribunal. For instance, the ICC
charges arbitrators’ fees based in part on a percentage scale of the amount in
dispute. The ICC has regard to the time spent, the complexity of the dispute and
other relevant circumstances, and then brings the fee within the wide percentage
specified in Appendix 3 to the ICC Rules. The LCIA charges according to the
time spent but the hourly rates are on a scale. These are the two usual methods
by which fees are fixed. Another method is to agree a lump sum for the whole
arbitration, but this is rarely done, for if a case does not proceed to an award,
disputes could arise over the arbitrator’s right to payment: or, if the case goes on
much longer than expected, the arbitrator’s rate of remuneration can decline
considerably. '*?
The parties and the tribunal should agree beforehand on the basis of charge
where there is no award because the dispute is settled first. Where there is no
established arrangement,'”’ the level of fees is generally negotiated between the
tribunal and the parties, either on the basis of a proportion of the amount in

'84 Sections 24(4) and 25(3) of the Arbitration Act 1996, and see paras 7-133 et seq.
85 Section 25(4) of the Arbitration Act 1996, see para.7—135.
186 See para.4—158 for circumstances in which such liability may occur.
187 Arbitration Act, s.29(3). For the relief that may be granted by the court, see s.25(3)(a) of the Act
and para.7—133.
'88 The charge may be limited to an appointment fee if the institution is only required to appoint the
tribunal or may be based on a small percentage of the claim or time spent where the institution is
expected to provide some supervision of the arbitration.
189 This can also be the effect with the ICC’s basis of charges.
190 See para.4—062 for cancellation fees.
 138 The Tribunal

dispute or the time spent by the tribunal. When there is no agreement, the fees
must be reasonable.!?!

4-057 Adjustment by the court. Any party may apply to the court'”* for an order
that the amount of the arbitrator’s fees and expenses shall be considered and
adjusted. Repayment can be ordered, but only if it appears reasonable to do
sof”

4-058 No implied right to increases. The level of fees and provision for
increases in fees if the case continues over a long period should be fixed at the start
of the arbitration, and not just before a hearing.'?* The rules of contract law, which
arguably apply to this issue, do not permit a tribunal to impose an increase in its
fees during a case. Attempts to increase fees have led to allegations of bias and of
what used to be called misconduct,'”° and could, if pursued unreasonably, lead to
an application to remove the arbitrator'’® and even to a challenge of any award
made by him!'’’ because of breach of the duty to avoid unnecessary expense.'”*

4-059 Excessive fees. If the fees of the tribunal are agreed by the parties, there is no
basis for reducing those fees even if they are excessive.'”’ If the fees that are alleged
to be excessive have been fixed by an appointing authority agreed by the parties,
it is doubtful whether the parties have a remedy.” If the fees have not been agreed
by the parties or fixed by an appointing authority, they must be reasonable.?°! On
the application of a party, the court may order the amount of an arbitrator’s fees
and expenses to be adjusted, or repaid if they have already been paid.”°? Such an
application may be made by a party who does not wish to be liable for excessive

11 See para.4-054.
'? On notice to the other parties and the arbitrators. Section 28(2) of the Arbitration Act 1996.
' This is implied from the preceding subsection, which talks of ‘reasonable fees and expenses”: cf.
s.28(3) of the Act.
'* Avoiding the embarrassment of Guardian Royal Assurance Group v Phillips and Another, unreported,
July 30, (1993) QB.D, Commercial Court, Waller J., where a barrister’s clerk’s “strong negotiating
letter” was misunderstood and resulted in the resignation of the barrister from his appointment as
arbitrator.
See Town Centre Securities Plc v Leeds City Council (1992] A.D.L.R.J. 54; Sea Containers v ICT Pty
Ltd [2002] N.S.W.C.A. 84.
196
Such an attempted increase was mentioned in Andrews & Bredshaw [2000] B.L.R. 6 at 16 but was
not directly in issue.
7 Section 68 of the Arbitration Act 1996.
8 Section 33(1)(b) of the Arbitration Act 1996.
' Section 28(5) of the Arbitration Act 1996, The arbitrator has a contractual right to his fees. Usually
the tribunal will not release the award until the fees have been paid, so the practical option of
withholding payment of the fees is not available if the award is wanted by one or more of the
parties. ;
200 The question was raised but not decided in Hussman (Europe) Ltd v Al Ameen Development and
Trade Corp [2002] 2 Lloyd’s Rep. 83.
°°! Agrimex Ltd v Tradigrain SA [2003] EWHC 1656. See paras 7-212 et seq.
°°? The application can be made at any time, and in principle should be made as soon as it is known
that the fees are or will be excessive—Hussman cited above at fn.201, where an application was made
at the end of the arbitration. For challenging the arbitrator’s lien, see para.4—064.
 Remuneration of an Arbitral Tribunal 139

fees of an arbitrator appointed by the other party,”” but the application should be
made promptly otherwise the right to recovery of the excess may be lost.2

(c) Deposits, commitment fees and interim fees

Advance payments. It is common practice for arbitration institutions and 4-060

arbitral tribunals to take steps to secure their fees in advance. This may take the
form of seeking deposits and/or commitment fees to cover the loss of business
likely to result if the arbitration hearings, sometimes booked to run for a period of
several weeks, are postponed because the parties are not ready or cancelled at short
notice because the parties settle the dispute. Arbitrations such as those run by the
ICC commonly require that the parties make deposits with the arbitral institution
on account of arbitrators’ fees and the administrative expenses of the arbitration.
Some arbitration rules give the arbitral tribunal the power to make orders securing
its fees.*°? As the powers are part of the arbitration agreement, the orders are
enforceable. The right to a commitment fee is not an implied term of an arbi-
trator’s appointment, and the matter should therefore be dealt with by express
agreement at the time of his appointment. Before the Arbitration Act 1996, it
could be misconduct to insist on a commitment fee as a condition of continuing
as arbitrator after the initial appointment had been accepted without reserva-
tion.*°° Under the Act, an application can be made to the court to remove an
arbitrator who persists with such a demand on the ground that he had refused or
failed properly to conduct the proceedings or to use all reasonable dispatch in
conducting the proceedings or making an award.*””

Interim payments. Commitment fees should be distinguished from interim 4-061

payments. A right to require the payment of interim fees may arise when the
arbitration agreement or rules provide for such payment or even when an arbitra-
tion becomes more extensive than originally expected and reasonable notice of the
required payment is given.*°*

203 See United Tyre Co Ltd v Born [2004] EWCA 1236. If the application to the court is successful,
however, as it was in this case the applicant would be relieved of the liability for the excess which
might have to be borne in full by the appointing party: s.28(3) of the Arbitration Act 1996 and DAC
report, paras 1, 2, 3. See para.7—212.
204 There was delay in the United Tyre case, cited above at fn.203, but by a narrow margin the judge
decided to grant the application.
20> For example, ICE Arbitration Procedure (1997), 1.7.5(6).
206 KS Norjarl A/S v Hyundai Heavy Industries Co Ltd [1991] 1 Lloyd’s Rep. 524: considered in Turner
v Stevenage Borough Council [1998] C.L. 28. See also Sea Containers v ICT Pty Ltd [2002]
N.S.W.C.A. 84.
207 Section 24(1)(d) of the Arbitration Act 1996. Proofofsubstantial injustice would have to be proved,
which would be difficult unless a complete impasse had been arrived at.
208 Turner v Stevenage Borough Council [1998] C.L. 28 at 36 et seg., CA where an application to remove
the arbitrator for retaining part of an interim payment was approved. Although based on the
previous legislation, it is still good law.
 140 The Tribunal

4-062 Cancellation fees. As mentioned in the preceding paragraph, a commit-

ment, often secured by a deposit or advance payment, is frequently demanded by
an arbitral tribunal in case the arbitration is “abandoned, suspended or concluded
by agreement or otherwise, before the final award is made”.*°” Absent agreement
of the parties there is no right to a commitment fee and to continue to insist upon
a commitment fee in circumstances where the parties do not agree to provide them
can provide grounds for removal.?!° In an “‘ad hoc” arbitration, an arbitrator will
often ask as one of the terms of his appointment for staged payment of his fees, so
that if the arbitration settles he will receive an agreed amount according to the
stage reached. Under this arrangement the arbitrator agrees to devote a specific
time to reading the written submissions and documents and to hearing oral
testimony and submissions. In return, the parties (or any party appointing him)
will agree to pay him anything from a third to the whole of his fees, depending on
how close the arbitration settles to the reading period or hearing.

(d) Award not delivered until fees paid

4-063 Lien. The traditional method by which arbitral tribunals have secured payment
has been to withhold the award from the party or parties seeking to take it up until
any outstanding fees have been paid, effectively to exercise a lien over the award.
This is now sanctioned by the Act in a provision that the parties cannot exclude.*"'
When the award is ready for delivery, the tribunal notifies the parties that it is
available on payment of its fees. Either party or both may then take up the award,
on payment of the fees. It does not concern the tribunal which party pays the fees.
Where the party who takes up the award is not, under its terms, liable to pay the
fees, he may recover from his opponent all the costs the award imposes, including
the tribunal’s fees.*!* If neither party takes up the award, the tribunal may have no
sanction but to forego its fees or to sue for them.

4-064 Challenging an arbitral tribunal’s lien.*'* Where the parties have

agreed the level of fees with the tribunal, the agreement cannot be reviewed by the
court,’'* because the tribunal has a contractual right to payment. The court’s
adjustment procedures assist a party who has not agreed the level of fees with the
tribunal,*'? is unable to obtain delivery of the award without paying those fees in
full because the tribunal is exercising its lien, and claims that the tribunal’s
demands are excessive. The court (or any arbitral or other institution with powers

The words quoted are taken from the LCIA Rules, Art.28.5.
21° K/S Norjarl A/S v Hyundai Heavy Industries Ltd [1992] 1 Q.B. 863; Sea Containers v ICT Pty Ltd
[2002] N.S.W.C.A. 84.
21! Section 56(1) of the Arbitration Act 1996.
*!2 Hicks v Richardson (1797) 1 Bos. & Pul. 93; Smith and Another v Troup (1849) 7 C.B. 757.
213 See para.6—-068.
14 Section 28(5) of the Arbitration Act 1996,
*!° Including an arbitrator who has ceased to act and an umpire who has not replaced the other
arbitrators: s.56(5) of the Arbitration Act 1996.
 Powers of an Arbitral Tribunal 141

in relation to the delivery of the tribunal’s award)?!° may order that the tribunal is
to deliver the award on payment into court by the applicant of the fees and
expenses demanded, or such lesser amount as the court may specify. Another
possible order is that the amount of fees and expenses properly payable is to be
determined by such means and upon such terms as the court may direct. Finally,
the court can order that, out of the money paid into court, there shall be paid out
such fees and expenses as may be found properly payable and the balance if any is
to be paid to the applicant.*!? The amount properly payable is any amount
ascertained under the process now known as adjustment*'® at which the tribunal
is entitled to be heard.*'? No application to the court may be made where there is
another available process provided, for example, by an arbitral institution, for
appeal or review of the amount of the fees or expenses demanded.’”” There is
authority that a party who has paid an excessive sum to obtain delivery of an award
may recover the excess beyond what is reasonable in an action against the tribunal
in restitution.”*! Except when the Act does not apply,’””’ parties are better advised
to seek an adjustment from the court under its statutory powers,””’ as an action in
restitution is a costly and uncertain means of attacking an exorbitant level of
fees.

(e) Costs awards

Arbitrators’ fees included in costs awards. For the impact of costs 4-065
awards on arbitrators’ fees, see Ch.6.77*

6. POWERS OF AN ARBITRAL TRIBUNAL

(a) Introduction and sources

Preface. This section considers the powers of arbitral tribunals. The next 4-066
section will discuss their duties. A list of powers follows the introduction. Argu-
ably, some items in the list fall into the category of both powers and duties. For
instance it is both a power and a duty to issue an award. In order to keep the

216 Section 56(6) of the Arbitration Act 1996, cf. ICC Rules, Art.23.1.
217 Section 56(2) of the Arbitration Act 1996, see para.6—071.
218 Section 28(2) of the Arbitration Act 1996, see para.4—057.
219 This follows from s.28(2) of the Arbitration Act 1996 which requires notice to be given to the
arbitrators.
220 Section 56(4) of the Arbitration Act 1996. The DAC have taken care to avoid the use of the word
“taxation” which appeared in the earlier legislation. The word “taxation” is used to describe similar
procedures for the adjustment of costs incurred in court cases, CPR Pt 62.
221 In the matter of an arbitration between JM Coombs and JW Freshfield (1850) 4 Ex. 839 and Barnes
v Braithwaite and Nixon (1857) 2 H. & N. 569.
222 Such an action may apply if the seat of arbitration was abroad, but the arbitrator was ordinarily
resident in England and the arbitration agreement was governed by English law.
23 Section 28 of the Arbitration Act 1996.
224 See paras 6-130 et seq.
 142 The Tribunal

distinction between powers and duties, we have not listed the same function in
both categories: but a tribunal often discharges one of its duties by exercising one
of its powers. Those powers and duties which relate to the conduct of the reference
are dealt with in detail in Ch.5, those which relate to the award in Ch.6, and those
which relate to the court and to enforcement in Chs 7 and 8.

4-067 The arbitration agreement and arbitration rules. The first source
of a tribunal’s powers is the arbitration agreement between the parties under
which the tribunal has been appointed. There is considerable flexibility as to the
powers the parties can agree to give to the tribunal.**> Before accepting appoint-
ment, each prospective member of a tribunal should review the arbitration agree-
ment and any other agreements the parties have made about procedure, whether
incorporated from the rules of an arbitration institution or trade association or
contained in an express agreement, to ensure that those agreements can be
complied with. The courts have upheld the parties’ agreement unless the agreed
form for the conduct of the arbitration is so contrary to fundamental principles
that it is held to be unenforceable as contrary to public policy,*”° and continues to
do so under the Act.?””

4-068 Statute. The Act?’ gives tribunals a wide discretion in procedural matters,”
229

subject to the parties’ agreement in many cases. The exercise of that discretion is
subject to the tribunal discharging its duty to act impartially as between the
parties, giving each party a reasonable opportunity of putting its case and dealing
with that of its opponent. In so doing the tribunal also has the duty to adopt
procedures suitable to the circumstances of the particular case, avoiding unneces-
sary delay or expense, so as to provide a fair means for the resolution of the matters
falling to be determined.”*° The tribunal discharges that duty by the exercise ofits
powers under numerous provisions of the Act, notably ss.34, 37, 38, 39, 41 and 65.
In the positive language of the Act, “parties should be free to agree how their
disputes are resolved, subject only to such safeguards as are necessary in the public
interest’”’.**! The Act empowers a tribunal, subject to the right of the parties to
agree any matter,*** to decide whether and to what extent the tribunal should itself
take the initiative in ascertaining the facts and the law,*** and to decide whether
there should be a hearing.*** Ifa tribunal is to take the initiative in ascertaining the
facts and the law, in an “inquisitorial” as opposed to an ‘adversarial’ procedure,

225
See paras 2-058 er seq.
“°° Naumann v Edward Nathan & Co Ltd (1930) 36 LI. L. Rep. 268 on appeal; 37 Ll. L. Rep. 249,
Scrutton L.J.
**7 Section | of the Arbitration Act 1996, and see paras 5-039 et seq.
8 Section 34 of the Arbitration Act 1996.
229 See paras 4-072 et seq.
** Section 33(1) of the Arbitration Act 1996. See paras 4-112 et seg. and paras 5-032 et seq.
23! Section 1(b) of the Arbitration Act 1996.
232 Section 34(1) of the Arbitration Act 1996.
33 Section 34(2)(g) of the Arbitration Act 1996.
54 Section 34(2)(h) of the Arbitration Act 1996,
 Powers of an Arbitral Tribunal 143

each party must have the same opportunity to present its case and to rebut the
material.**> All these matters are discussed in more detail in Ch.5.7°°

(b) Powers of tribunals

Powers generally. An arbitral tribunal, in discharging its duty to determine 4-069

the dispute has certain powers, which are listed below. A summary of the powers
follows which in turn refers to the more detailed discussion in other chapters.
Each of the following powers is subject to the right of the parties to agree that the
power shall not be exercised or that it is to be exercised in a different way**’:

® to rule on jurisdiction”**;
® to decide all procedural and evidential matters,**’ including;
@ location and timing of proceedings?*”;

@ language and the need for translations**’;

© the form, timing and possible amendment of any statement of claim or

defence”;
@ disclosure of documents?**;

@ parties’ questions to each other";

® rules, weight, time, manner and form of evidence**

@ whether the tribunal should take the initiative in ascertaining facts and
246.
lanes

® whether there should be oral or written evidence or submissions**’;

235 Ton and City Properties (Development) Ltd v Wiltshier Southern Ltd and Gilbert Pomell [1988] 44
B.L.R. 109, commenting on an arbitration held under the JCT Arbitration Rules, where the
arbitrator was said to have carried out a “process really that of avaluation, not an arbitration”. See
para.5—099 on inquisitorial procedure.
236 See paras 5-032 et seg. and paras 5—089 ef seq.
237 The right of the parties to make agreements to this effect is expressed within each of the relevant
sections of the Arbitration Act 1996. There are only a few powers of a tribunal which the parties
cannot exclude or vary, and they are better described as rights. They are:
(1) the liability of the parties for arbitrators’ fees and expenses: s.28;
(2) arbitrators’ immunity: s.29; and
(3) arbitrators’ lien over the award: s.56.
See also s.4(1) of the Arbitration Act 1996 and Sch.1.
38 Section 30 of the Arbitration Act 1996.
239 Section 34 of the Arbitration Act 1996.
240 Section 34(2)(a) of the Arbitration Act 1996.
241 Section 34(2)(b) of the Arbitration Act 1996.
242 Section 34(2)(c) of the Arbitration Act 1996.
43 Section 34(2)(d) of the Arbitration Act 1996.
24 Section 34(2)(e) of the Arbitration Act 1996.
45 Section 43(2)(f) of the Arbitration Act 1996.
246Section 34(2)(g) of the Arbitration Act 1996.
47 Section 34 (2)(h) of the Arbitration Act 1996.
144 The Tribunal

© to appoint experts, legal advisers and assessors”**;

© to order security for costs**’;

® to give directions about property the subject of proceedings*”’;

® to direct that a witness be examined on oath or affirmation”);

® to make provisional orders””’;
® to act in case of a party’s default”;
© to apply to the court for a peremptory order”
® to make awards on different issues at different times on different
aspects;
® to make a declaration*”°;

© to order payment of a sum of money in any currency”’’;

@ to order a party to refrain from doing something***;
® to order specific performance of a contract other than land aie

® to order rectification, setting aside or cancellation of a deed or other docu-

ment";
@ to award interest*°';

® to terminate arbitral proceedings if the dispute is settled by the parties*°?;

® to decide the date of the award?°?;

® to correct an award***;

@ to make an additional award on matters in issue but not covered by the

award-©:

® to allocate costs between the parties*®;

448 Section 37 of the Arbitration Act 1996.

249 Section 38(3) of the Arbitration Act 1996.
250 Section 38(4) of the Arbitration Act 1996.
5! Section 38(5) of the Arbitration Act 1996.
22 Section 39 of the Arbitration Act 1996.
23 Section 41 of the Arbitration Act 1996.
254 Section 42(2) of the Arbitration Act 1996.
295 Section 47 of the Arbitration Act 1996.
256 Section 48(3) of the Arbitration Act 1996.
257 Section 48(4) of the Arbitration Act 1996.
28 Section 48(5)(a) of the Arbitration Act 1996.
259 Section 48(5)(b) of the Arbitration Act 1996.
269 Section 48(5)(c) of the Arbitration Act 1996.
61 Section 49 of the Arbitration Act 1996.
262 Section 51(2) of the Arbitration Act 1996.
03 Section 54 of the Arbitration Act 1996.
204 Section 57(3)(a) of the Arbitration Act 1996.
265 Section 57(3)(b of the Arbitration Act 1996).
66 Section 61(1) of the Arbitration Act 1996.
 Powers of an Arbitral Tribunal 145

267.
® to determine the costs recoverable b)

® to limit recoverable costs to a specific amount. 268

(c) Powers and jurisdiction

Powers distinct from jurisdiction. The powers and the jurisdiction of 4-070
an arbitral tribunal are sometimes confused but they are quite distinct. If the
tribunal lacks jurisdiction (competence) it cannot determine the dispute at all. If
the tribunal has jurisdiction, it has the necessary competence to conduct the
reference, but should consider the extent of its powers when determining how it
should do so.*°”

Ruling on jurisdiction. Unless otherwise agreed by the parties, an arbitral 4-071

tribunal is expressly given the power to rule on its own substantive jurisdiction, as
to (i) whether there is a valid arbitration agreement, (11) whether the tribunal is
properly constituted, and (iii) what matters have been submitted to arbitration in
accordance with the arbitration agreement.?”° Case law used to encourage arbitral
tribunals to make the first ruling on their own jurisdiction’’': the statutory
provision defines the power precisely and its limits. Any ruling can be challenged
by any available arbitral process of appeal or review or by the court,””” although the
court will be slow to reverse a well-founded decision by the arbitral tribunal.*”*

(d) Procedural and evidential powers

General. An arbitral tribunal has the power to decide all procedural and 4-072
evidential matters, subject to the right of the parties to agree any matter.*’* This
is a very general provision, drawn so as to have the potential to include matters not
covered by the list of matters specified in s.34(2) of the Act. Although the general
power conferred by this statutory provision is extensive, it is subject to modifica-
tion by the parties to the arbitration. Frequently, rules of arbitration incorporated
into the arbitration agreement do to a limited extent modify the powers listed in
s.34 of the Act.*”°

267 Section 63(3) of the Arbitration Act 1996.

68 Section 65 of the Arbitration Act 1996.
269 See paras 4-135 et seg. and paras 5—060 et seq.
279 Section 30(1) of the Arbitration Act 1996. In the Model Law, Art.16 (see Appendix 4), this power
is not subject to the parties’ agreement, it is given to the tribunal in all cases.
271 Brown (Christopher) Ltd v Genossenschaft Oesterreicher Waldbesitzer R GmbH [1954] 1 QB. 8.
272 Section 67 of the Arbitration Act 1996 and paras 8-054 ef seq.
273 The court dismissed an appeal against the award of an arbitrator and upheld his finding that he had
no jurisdiction: Stanstead Shipping Co v Shenzen Nantian Oil Mills (August 21, 2000) Thomas J.
Arts
274 Section 34(1) of the Arbitration Act 1996, cf. Arbitration Act 1950, s.12(1)-(3) and Model Law,
19, 20, 22, 23 and 24: see Appendix 4.
275 For example, the ICC rules give the International Court of Arbitration rather than the arbitrators
power to fix the place of arbitration in the absence of agreement by the parties—Art.14.1.
 146 The Tribunal

4073 Time and place for proceedings.*”° The tribunal may decide when and
where any part ofthe proceedings is to be held.’”” This provision does not override
the designated seat of arbitration.”

4-074 Language and translations.””” The tribunal may decide the language or
languages to be used in the proceedings and whether translations of any relevant
documents are to be supplied.**°

4-075 Statement of claim and defence.**' The tribunal may decide whether
and if so what form of written statements of claim and defence are to be used,
when these should be supplied and the extent to which such statements can be
later amended.?*?

4-076 Disclosure of documents.”** The tribunal may decide whether and if so

which documents or classes of documents should be disclosed and at what
Slagen

4-077 Questions to the parties.**° The tribunal may decide whether and if so
what questions should be put to and answered by the respective parties and when
and in what form such material should be exchanged and presented.**” In civil
litigation, such questions take the form of “‘requests for information”, and can be
about the case put forward and/or the evidence to support it. In arbitration, the

°76 See paras 5—073 et seq. and 5-197.

*77 Section 34(2)(a) of the Arbitration Act 1996: derived from Model Law, Art.20 (see Appendix 4),
which is fuller. The Model Law adds that the tribunal should have regard to the convenience of the
parties: arguably this is part of the tribunal’s general obligation under s.33 of the Arbitration Act
1996: DAC report, para.169. See Appendix 2.
278 Section 3 of the Arbitration Act 1996: see para.5—071.
279 See paras 5-167 et seq.
*8° Section 34(2)(b) of the Arbitration Act 1996 derived from Model Law, Art.22: see Appendix 4.
281 See paras 5—120 et seq.
*82 Section 34(2)(c) of the Arbitration Act 1996. This is derived from Model Law, Art.23: see Appendix
4. Under the old law the power was held to exist from the vague wording of the Arbitration Act
1950, s.12(1): “... [to] do all other things the arbitrator ... may require”, interpreted in 7 Sloan
& Sons (Builders) Ltd and Another v Brothers of Christian Instruction {1974] 3 All E.R. 715. See
para.5—127.
283 See paras 5-133 et seq.
e285 Section 34(2)(d) of the Arbitration Act 1996. The words disclosed “between parties and
produced by the parties” also appear in the subsection but have not been repeated above because
they suggest a two-stage process of lists of documents followed by inspection, which is rare
nowadays.
286 See para.5—141.
*87 Section 34(2)(e) of the Arbitration Act 1996. Under the old law the arbitrator was held to have this
power, see Kursell » Timber Operators and Contractors Ltd (1923) 2 K.B. 202. Breach was formerly
remediable by court order, but this was abolished by the Courts and Legal Services Act 1990, s.103,
itself now repealed by s.107(2) of the Arbitration Act 1996.
 Powers of an Arbitral Tribunal 147

scope and form of such questions are left to the discretion of the tribunal but are
not common.

Rules about evidence.*** The tribunal may decide whether to apply strict 4-078
rules of evidence (or any other rules) 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.**” Before the Act was passed, there was concern about
the application of strict rules of evidence to arbitration. It was reflected in
Professor Goode’s trenchant criticism of the rule: “the only rule about evidence
should be that the arbitrator acts fairly and in conformity with the rules of natural
justice’’.*°° Difficult doctrines like the parol evidence or hearsay rules need not
now concern an arbitral tribunal unless, exceptionally, it is decided to apply strict
rules of evidence in the arbitration.

Ascertaining the facts and the law.’’' The tribunal may decide 4-079
whether and to what extent it should itself take the initiative in ascertaining the
facts and the law.*”* This provision was introduced by the Act. It was designed to
counter the tendency of common law tribunals not to take the initiative and simply
to decide on the representations of the parties. The provision allows the tribunal
to be more interventionist and “inquisitorial”, which is said to be more in line
with civil law practice. If the tribunal does take the initiative in obtaining evidence,
it must give all parties a reasonable opportunity of commenting on it.*”°

Presentation of evidence and submissions.*”* The tribunal may 4-080

decide whether and to what extent there should be oral’”° or written evidence or
submissions.””° This provision allows the tribunal to decide whether there is to be
a hearing, unless both parties agree on the issue.”’’ Previously one of the parties
could insist on a hearing, even if neither the tribunal nor the other party wanted
a hearing to take place?’*: the same is true of the Model Law.*””

288 See para.5—130.

289 Section 34(2)(f) of the Arbitration Act 1996.
290 “The adaptation of English law to International Commercial Arbitration”, 8 Arbitration Int. | at
6.
291 See paras 5-094 et seq.
22 Section 34(2)(g) of the Arbitration Act 1996.
2°3 Section 33(1)(a), DAC report, para.172 of the Arbitration Act 1996.
294 See paras 5-130 et seq.
2°5 In Brandeis & Black [2001] 2 All E.R. (Comm) 980, the court found no objection in the arbitrators
permitting one party to call and cross-examine witnesses of the other party.
2% Section 34(2)(h) of the Arbitration Act 1996, derived from Model Law, Art.24(1) (see Appendix
4).
oe ae provision is subject to the parties agreeing otherwise. Some rules of arbitration incorporated
into the arbitration agreement give each party the right to insist upon a hearing (e.g. ICC Rules,
Art.20.2).
2°8 Henry Sotheran Lid v Norwich Union Life Insurance Society {1992 31 EnGar0s
209 Article 24(1), second sentence.
 148 The Tribunal

4-081 Time for compliance.*’’ The tribunal is given the power to fix the time
within which any directions given by it are to be complied with, and the power to
extend the time so fixed (whether or not is has expired).*°'

(ej Lxperts

4-082 Experts, legal advisers and assessors.*”? A tribunal may appoint

experts or legal advisers*”’ to report to it and the parties or appoint assessors to
assist it on technical matters and may allow any such expert, legal adviser or
assessor to attend the proceedings.*"* Parties must have a reasonable opportunity
to comment on any information, opinion or advice proffered by any expert, legal
adviser or assessor.*°> Their fees count as expenses of the arbitrators, a provision
the parties are not free to vary or depart from by agreement.*”°

(f) Securing claim, costs and evidence*’

4-083 Agreed powers. Parties are free to agree on the powers exercisable by the
arbitral tribunal for securing a claim or an award, or costs or evidence.*’* For
example, arbitration rules may empower the tribunal to order a respondent to a
claim or a counterclaim to provide security for all or part of the amount in
dispute.*°’ Unless otherwise agreed by the parties the tribunal has the powers set
out as follows.*!°

4-084 Security for costs.*'! An arbitral tribunal has the power to order a claimant
(or counterclaiming respondent) in an arbitration to give security for the costs of
the arbitration in such form as the tribunal determines.*!? The tribunal must not,

SouiSeesparao— so:
3°! Section 34(3) of the Arbitration Act 1996.
302 See para.5—159.
°° The right to seek legal advice was mentioned in National Boat Shows v Thameside Marine (August
1, 2001), QBD (Comm).
34 Section 37(i)(a) of the Arbitration Act 1996,
3° Section 37(1)(b) of the Arbitration Act 1996.
*° Section 37(2) of the Arbitration Act 1996, a mandatory provision, because an agreement between
the parties to a different effect would prevent the tribunal from recovering, from those parties,
expenses properly incurred, DAC report, para.188. For arbitrators? expenses, see the s.28(1) of the
Arbitration Act 1996, which makes the parties jointly and severally liable for such reasonable fees
and expenses (if any) as are appropriate in the circumstances, Thus the appropriateness of the cost
of atribunal expert could be an issue, which presumably could cover whether the expert should have
been instructed at all as well as the amount of the expense.
307 See paras 5-074 et seq.
*8 Section 38(1) of the Arbitration Act 1996,
%% See for example LCIA Rules, Art.25—1(a) and para.5—084—compare limited power of the court, see
para.7—207.
31° Section 38(2) of the Arbitration Act 1996,
311 See para.5—079.
*! Section 38(3) of the Arbitration Act 1996. This power, which was formerly exercised by the
High
Court, is now exclusively the province of the arbitral tribunal. The court’s powers are specified in
s.44 of the Act and do not include power to order security for costs: see para.7—207.
 Powers of an Arbitral Tribunal 149

however, exercise its power on the ground that the claimant is an individual
ordinarily resident outside the United Kingdom or that it is a corporation or
association formed or seated abroad.*"°

Directions about property.°'* The tribunal may give directions in relation 4-085
to any property which is the subject of the proceedings or as to which any question
arises in the proceedings, and which is owned by or is in the possession of a party
to the proceedings.*'>

Oaths and affirmations.*’° The tribunal may direct that a party or witness 4-086
shall be examined on oath or affirmation, and may for that purpose administer any
necessary oath or take any necessary affirmation.*'”

Preservation of evidence.*'® An arbitral tribunal may give directions to a 4-087

party for the preservation for the purpose of the proceedings of any evidence in his
custody or control.*'? For example, a tribunal could order a party to keep
documentary records which had been created some time earlier, say at the begin-
ning of a project, and which might otherwise be destroyed.

(2) Default
Default.*”° Parties have an obligation to do all things necessary for the proper 4-088
and expeditious conduct of the arbitral proceedings.**' This includes complying
without delay with any determination of the tribunal as to procedural or evidential
matters, or with any order or directions of the tribunal.*** Parties are free to agree
on the powers of the tribunal in case ofa party’s failure to do something necessary
for the proper and expeditious conduct of the arbitration.**? Unless otherwise
agreed by the parties, the following provisions apply.***

Delay.*”° If the claimant has been guilty of “inordinate and inexcusable delay” 4-089
in pursuing his claim in arbitration and the delay gives rise to, or 1s likely to give

313 This prohibition is expressed in s.38(3) of the Arbitration Act 1996. See also DAC report,
para.366.
514 See paras 5-081 and 5-082.
315 Section 38(4) of the Arbitration Act 1996. This provision expands considerably on Art.17 of the
Model Law (see Appendix 4), from which it is derived.
316 See paras 5-157 and 5-164.
317 Section 38(5) of the Arbitration Act 1996.
318 See para.5—083.
319 Section 38(6) of the Arbitration Act 1996.
320 See paras 5-191 et seg.
321 Section 40(1) of the Arbitration Act 1996.
322 Section 40(2)(a) of the Arbitration Act 1996.
323 Section 41(1) of the Arbitration Act 1996. Cf. Model Law, Art.25: see Appendix 4.
324 Section 41(2) of the Arbitration Act 1996.
325 See paras 5—224 et seq.
 150 The Tribunal

rise to a substantial risk that it is not possible to have a fair resolution of the issues
in that claim, or the delay has caused, or is likely to cause serious prejudice to the
respondent, the tribunal may make an award dismissing the claim.*”° Inordinate
and inexcusable delay is a long period of time, years not months, for which no
satisfactory explanation is given.*’”

4-090 Non-attendance and non-compliance.*”* If a party fails to attend or

be represented at a hearing or, where matters are to be dealt with in writing, fails
to submit written evidence or make written submissions, the tribunal may proceed
in the absence of that party, or without any written evidence or submissions on his
behalf, and make an award on the basis of the evidence before it.*’? The tribunal
must have given the party an opportunity to put his case and answer that of his
opponent.**°

4091 Peremptory orders.**' If without showing sufficient cause a party fails to

comply with an order, the tribunal may make a peremptory order.*** If a claimant
fails to comply with a peremptory order of the tribunal to provide security for
costs, the tribunal may make an award dismissing his claim.*** If a party fails to
comply with any other kind of peremptory order the tribunal may direct that the
party in default shall not be entitled to rely on any allegation or material which is
the subject-matter of the order and/or draw adverse inferences from the act of
non-compliance and/or make an award on the basis of the materials provided and/
or make an order as to the payment of costs.**+ The tribunal may instead apply to
the court for an order requiring a party to comply with a peremptory order made
by the tribunal.**°

(h) Orders and Awards**°

4-092 Awards on different issues at different times on different

aspects.**” Unless empowered by the parties to grant relief on a provisional
basis,*** the tribunal must make a final award on the issues that were put to it and

6 Section 41(3) of the Arbitration Act 1996. Ifthe arbitration has not been commenced, the court may
treat the arbitration agreement as having been frustrated: The ‘Hannah Blumenthal” [1982] |
Lloyd’s Rep. 582, CA.
7 For a discussion of this standard, see the notes at CPR Pt 25, r.1(6).
28 See paras 5-202 et seq.
2” Section 41(4) of the Arbitration Act 1996,
8° Section 33(1)(a) of the Arbitration Act 1996, DAC report, para.208.
31 See further paras 5-191 ef seq.
*32 Section 41(5) of the Arbitration Act 1996.
*33 Section 41(6) of the Arbitration Act 1996.
334 Section 41(7) of the Arbitration Act 1996.
*89 Section 42 of the Arbitration Act 1996.
86 See paras 6-002 er seq.
87 See paras 6-009 et seq.
338 See para.4—093.
 Powers of an Arbitral Tribunal 151

the failure to do so is an irregularity.**” However, unless otherwise agreed by the

parties, the tribunal may make more than one award at different times on different
aspects of the matters to be determined.**° In particular, the tribunal may make an
award relating (a) to an issue affecting the whole claim, or (b) to a part only of the
cross-claims submitted to it for decision.**' Ifa tribunal does so, it shall specify in
its award the issue,**” or the claim or part of a claim, which is the subject-matter
of the award.**’ The purpose of this provision is to allow tribunals to decide
disputes in a way that avoids one very long hearing and encourages a managerial
approach, with the selection of issues for early determination to encourage
settlement of the rest of the dispute.*** A partial or interim award creates an
estoppel as respects the issue determined by that award. Neither party can at any
subsequent hearing in the arbitration advance arguments or adduce evidence on
that issue directed to disputing the correctness of the determination previously
made.**

Provisional order.** There is also power, exercisable only by agreement of 4-093

the parties, to make “‘provisional orders”,**’ by which is meant any orders on a
provisional basis of relief that the tribunal would have the power to grant in a final
award. This includes, for instance, an order for the payment of money or the
transfer of property between the parties, or an order for an interim payment on
account of costs.*** Any provisional order is subject to subsequent final adjudica-
tion by the tribunal, whether on the merits or costs.*? Without the parties’
agreement to confer this power on the tribunal, the tribunal has no such
power.?°°

Remedies.**! The parties are free to agree on the powers exercisable by the 4094
tribunal as regards remedies.*°? Unless otherwise agreed by the parties, the
remedies are as follows.**? The tribunal may make a declaration as to any matter
to be determined in the proceedings.*** The tribunal may order the payment of a
sum of money, in any currency.**° The tribunal has the same powers as the court:

339 Ronly Holdings Ltd v JSC Zestafoni G Nikoladze Ferroalloy Plant (2004) EWHC 1354.
349 Section 47(1) of the Arbitration Act 1996.
341 Section 47(2) of the Arbitration Act 1996.
342 This issue may, for example, be the tribunal’s jurisdiction to decide some or all of the dispute.
343 Section 47(3) of the Arbitration Act 1996.
344 DAC report, paras 226-233.
345 Westland Helicopters v Al-Hejailan [2004] EWHC 1625.
346 See further paras 5-085 et seg. and 6-020 et seg. on this, and on the terminology.
347 Section 39(1) of the Arbitration Act 1996.
348 Section 39(2) of the Arbitration Act 1996.
349 Section 39(3) of the Arbitration Act 1996.
350 Section 39(4) of the Arbitration Act 1996.
351 See paras 6-096 et seq.
352 Section 48(1) of the Arbitration Act 1996.
353 Section 48(2) of the Arbitration Act 1996.
354 Section 48(3) of the Arbitration Act 1996 and see paras 6-109 et seq.
355 Section 48(4) of the Arbitration Act 1996, see paras 6-098 et seq.
 152 The Tribunal

(a) to order a party to do or to refrain from doing anything,**° (b) to order specific
performance of a contract (other than a contract relating to land),*°’ and (c) to
order the rectification, setting aside or cancellation of a deed or other docu-
ment.°*°*

4-095 Interest.*°’ The parties are free to agree on the powers of the tribunal as
regards the award of interest,*°’ but only an agreement in writing as defined in the
Act can qualify as an agreement to the contrary under s.49 of the Act.*°' Unless
otherwise agreed, the following applies.*°* The tribunal may award simple or
compound interest from such dates, at such rates and with such rests as it
considers meets the justice of the case: (a) on the whole or part of any amount
awarded by the tribunal, in respect of any period up to the date of the award, (b)
on the whole or part of any amount claimed in the arbitration and outstanding at
the commencement of the arbitral proceedings but paid before the award was
made, in respect of any period up to the date of payment.*®* The tribunal may
award simple or compound interest from the date of the award (or any later date)
at such rates and with such rests as it considers meets the justice of the case, on
the outstanding amount of any award (including any award of interest under
s.49(3) and any award as to costs).*°* Previously, a tribunal could award only simple
interest.*°° The power to award compound interest should be used on a compensa-
tory basis, and not a punitive basis.*°°

4-096 Terminating proceedings in case of a settlement.*°’ If during

arbitral proceedings the parties settle the dispute, unless the parties otherwise
agree, the tribunal shall terminate the substantive proceedings and, if so requested
by the parties and not objected to by the tribunal, shall record the settlement in
the form of an agreed (or “‘consent’’) award.*°*

4-097 Reasons.*°” A tribunal now has the power (and the duty) to give reasons as part
of an award, unless the parties agree to opt out of this provision.*”°

356 See paras 6-107 et seq.

‘97 See paras 6-108 ef seq.
358 Section 48(5) of the Arbitration Act 1996, see paras 6-114 et seq.
359 See paras 6-115 et seq.
%©9 Section 49(1) of the Arbitration Act 1996.
°°! Lesotho Highlands Development Authority v Impregilo [2005] UKHL 43. For statutory arbitrations
see Durham CC v Darlinghom BC [2003] EWHC 2598.
*° Section 49(2) of the Arbitration Act 1996 in addition to any other powers the tribunal may have to
award interest, s.49(6) of the Arbitration Act 1996.
*63 Section 49(3) of the Arbitration Act 1996.
** Section 49(4) of the Arbitration Act 1996.
*65 Section 39(2) of the Arbitration Act 1996.
366 TAC report, para.237.
3°7 See paras 6-024 et seq.
$68 Section 51(1) and (2) of the Arbitration Act 1996.
*©° See further paras 6—028 et seg. and 6-051.
79 Section 52(4) of the Arbitration Act 1996, Model Law, Art.31 (see Appendix 4).
 Powers of an Arbitral Tribunal 153

Deciding the date of an award.*’! Unless otherwise agreed by the 4-098

parties, the tribunal may decide what is to be taken as the date on which the award
was made.?”7

Notifying the parties of an award. Unless otherwise agreed by the 4099

parties, the tribunal has the power (and the duty) to notify the award by service of
copies on the parties without delay after the award is made.*”

Correcting an award and issuing an additional award.°*”* The 4-100

parties are free to agree on the powers of the tribunal to correct an award or make
an additional award.*”° If there is no agreement, the tribunal has powers to correct
an existing award so as to remove any clerical mistake or error arising from an
accidental slip or omission or to clarify or remove an ambiguity. The tribunal may
also make an additional award in respect of any claim (including a claim for
interest or costs) which was presented to the tribunal but was not dealt with in the
award.*’°

Summary award.*”’ Unless arbitration rules allow it,3* the jurisdiction to 4-101
make an award whose effect is like that of a summary judgment is regarded as
exceptional*”? and no provision has been made for it in the Act.
The very different power to make a provisional order, with consent of the
parties, is mentioned above.**”

(i Costs

Awarding costs. Subject to the parties’ right to agree what costs of the 4-102
arbitration are recoverable,**’ the tribunal has the power to determine by award the
recoverable costs of the arbitration on such basis as it thinks fit. If itdoes so and
does not limit those costs to a specific sum,*** the tribunal must specify the basis
on which it has acted and the item of recoverable costs and the amount referable

371 See para.6—053.

372 Section 54(1) of the Arbitration Act 1996.
373 Section 55(1) and (2) of the Arbitration Act 1996.
37* See paras 6-036 and 6-167 et seq.
375 Section 57(1) of the Arbitration Act 1996. Model Law, Art.33 (see Appendix 4).
376 Section 57(2) and (3) of the Arbitration Act 1996.
577 See para. 1-029.
378 See for instance, ICE Arbitration Procedure (1997) r.15.
379 Modern Trading Co Ltd v Swale Building and Construction Ltd (1990) 24 Con. L.R. 59.
380 See para.4—093.
381 See paras 6-129 et seq.
382 Section 63(1) of the Arbitration Act 1996.
583 See para.4—103.
 154 The Tribunal

to each.*** If the tribunal does not determine the recoverable costs of the arbitra-
tion, the court may do so on the application of a party to the arbitration.**

4-103 Limiting recoverable costs. Unless otherwise agreed by the parties, the
tribunal may direct that the recoverable costs of the arbitration, or any part of the
arbitral proceedings, shall be limited to a specified amount.**° Exercising this
power is part of the general duty of the tribunal to avoid unnecessary
expense.°°”

7. DUTIES OF AN ARBITRAL TRIBUNAL

(a) Introduction

4-104 General duty. The Act imposes on the tribunal a general duty in conducting
the arbitration proceedings, in its decisions on matters of procedure and evidence
and in the exercise of all other powers conferred on it.*** As is described more
fully in the following paragraphs, this wide-ranging duty consists in acting fairly
and impartially and adopting procedures suitable for the arbitration, and expresses
in positive form what was implicit at common law. This general duty of the
tribunal finds its complement in s.40 of the Act, which imposes a general duty on
the parties.**° The fact that both duties now have a statutory basis and are
mandatory emphasises their importance to the arbitral process.
Breach by an arbitrator of his general duty can have serious consequences.
Depending on the breach, it may, for example, form the basis of an application to
remove him*”°; it is also a ground for challenging his award**!; and if bad faith is
established on his part it may even lead to a claim for damages against him.*°*

4-105 Specific duties. The specific duties of an arbitral tribunal may be listed as
follows???:

® to act fairly and impartially between the parties***;

84 Section 63(3) of the Arbitration Act 1996, See paras 6-141 e7 seg.
$85 Section 63(4) of the Arbitration Act 1996.
*86 Section 65(1) of the Arbitration Act 1996. See further paras 6-147 and 6-148.
*87 Section 33(1)(b) of the Arbitration Act 1996, DAC report, para.272.
88 Section 33 of the Arbitration Act 1996, greatly expanded from Model Law, Art.18 (see
Appendix 4).
$89 See para.5—191.
°° Section 24 of the Arbitration Act 1996, See paras 7-112 e7 seq.
*°! Section 68 of the Arbitration Act 1996, See paras 8-072 et seq.
This possibility is discussed at paras 4-154 ef seq.
*°8 A tribunal’s powers in relation to awards tend to overlap with its duties in relation to awards, see
the examples in paras +-097 and 4-099, which are not listed again in this section, exercising its
power to issue awards.
+ Section 24(1)(a) and s.33(1)(a) of the Arbitration Act 1996.
 Duties of an Arbitral Tribunal 155

® to possess the qualifications required by the arbitration agreement*”;

® to be physically and mentally capable of conducting the proceedings*”*®;

® to conduct the proceedings properly*’’;

® to use all reasonable despatch in conducting the proceedings or making an

award??;

® to give each party a reasonable opportunity of putting his case and dealing
with that of his opponent*”’;
® to adopt procedures suitable to the circumstances of the particular case*”;

® to avoid unnecessary delay or expense*”';

® to provide a fair means for the resolution of the matters falling to be
determined*”;

® to attend hearings and participate in deliberations of the tribunal*°?;

® not to exceed its substantive jurisdiction’;

® not to exceed its powers*”;
® to conduct the proceedings in accordance with the procedure agreed by the
Parties";
® to deal with all the issues put*?’;

® to ensure that any award is neither uncertain nor ambiguous*”’;

® to ensure that any award is not obtained by fraud or procured in a way
contrary to public policy*”;
@ to ensure that any award complies with requirements as to its form*'®;
® to act judicially*"!;

3°5 Section 24 1)( b) of the Arbitration Act 1996.

3° Section 24 1)( c) of the Arbitration Act 1996.
3°7 Section 241 I) d)(i) of the Arbitration Act 1996.
5°8 Section 1)(
24(1)(d)(ii) of the Arbitration Act 1996.
3° Section 33 Ia ) of the Arbitration Act 1996.
#00 Section 33Pe
ES
ER 1)(b ) of the Arbitration Act 1996.
SES
421 Section 1) of the Arbitration Act 1996.
33(1)(b)
492 Section 33(1)(b) of the Arbitration Act 1996.
#93 Tmplicit in the above.
44 Section 67 of the Arbitration Act 1996.
#95 Section 68(2)(b) of the Arbitration Act 1996.
496 Section 68(2)(c) of the Arbitration Act 1996.
+07 Section 68(2)(d) of the Arbitration Act 1996.
+8 Section68(2)(f)
\ of the Arbitration Act 1996.
+09 Section68(2)(g)
(g of the Arbitration Act 1996.
+1 Section 68(2)(h) of the Arbitration Act 1996.
411 Re Hopper (1867) L.R. 2 QB. 367, explained by Lord Salmon in Suicliffe v Thackrah [1974] A.C.
727 at 763D, Fisher v PG Wellfair Lid (In Liquidation); Fox v PG Wellfair Lid (in hquidanion) [1981]
2 Lloyd’s Rep. 514.
 156 The Tribunal

® to keep the subject-matter of the arbitration confidential*";

®@ to make its own decision*"*;

® to decide according to the law or, if agreed, according to other considera-

tions.*"*

Breach of these duties:

® can lead to an arbitrator’s removal and repayment of fees*!’;

© can justify intervention by the court during a reference*"®;

® can lead to an award being remitted or set aside or declared to be of no

effectt!’ and;

© could result in a claim for damages in the event of bad faith.*'*

(b) The duty to act fairly and impartially

4-106 Duty of fairness.*!” As part of the tribunal’s general duty, it must act fairly
as well as impartially as between the parties, in conducting the arbitral proceed-
ings, in its decisions on matters of procedure and evidence and in the exercise of
other powers conferred on it. The subject of impartiality is discussed fully in the
following paragraphs, but it is important not to overlook the additional duty of
fairness, which affects every aspect of the arbitration. Section 33 of the Act also
gives specific instances of what is meant by fair treatment, namely:

® each party should be given a “reasonable” opportunity of putting his case

and dealing with that of his opponent, and

® suitable procedures should be adopted by the tribunal that avoid unnecessary

delay and expense, so as to provide a “‘fair” means for resolving the particular
dispute.*”°

In fulfilling its duty of fairness, the tribunal may have to balance conflicting
demands of the parties. It is not always easy to find the right balance, but the

412 See para.5—182.

413 See para.6-056.
*14 Section 46 of the Arbitration Act 1996.
415 Sections 24, 25 and 68 of the Arbitration Act 1996,
‘16 See paras 7-111 et seq.
17 See paras 8-072 et seq.
18 See paras 4-154 et seq.
419 See paras 5-032 et seq.
#20 A restatement of s.33 of the Arbitration Act 1996.
 Duties of an Arbitral Tribunal 157

tribunal must do its best to ensure that each party has a reasonable opportunity of
putting his case and dealing with that of his opponent.*!

Duty of impartiality. An obligation to act impartially’? as between the 4-107

parties is also required as part of the general duty imposed on the tribunal by s.33
of the Act. Failure to observe this fundamental requirement may lead to the
removal of the arbitrator on the grounds of actual or apparent bias.**°

Actual and apparent bias. A distinction is often made between actual bias 4-108
and apparent bias, although both give grounds for removal. Actual bias is rarely
alleged and even more rarely established.*** More often there is a suspicion of bias
which has been variously described as apparent or unconscious or imputed bias. In
such majority of cases, it is often emphasised that the challenger does not go so far
as to suggest the arbitrator is actually biased, rather that some form of objective
apprehension of bias exists.

Same test for judges and arbitrators. Since R. v Gough*? it has been 4-109
”
clear that the sarne test for removal of an arbitral tribunal for bias (‘‘actual’’ or
“apparent’’) will apply to judges, and other judicial decision takers. In AT & T,**°
Lord Woolf M.R. did suggest that if different standards were to apply to judges
and arbitrators, a higher standard should apply to arbitrators, but the court upheld
the application of the same standard. For all practical purposes, there is no
significant distinction between the “real possibility” test and the ‘“‘justifiable
doubts” test referred to in s.24(1)(a) of the Act.
As discussed below, the IBA Guidelines on Conflicts of Interest in International
Arbitration do provide some guidance on particular circumstances which may give
rise to a real possibility of bias. 427

The real possibility test: the fair minded and informed 4-110
observer. In weighing the evidence the court will consider whether the circum-
stances bearing on the allegation of the partiality “would lead a fair-minded and

*21 In Badwith Shipping Corp v Intaari (the ‘Magdalena Oldenouff’) [2006] EWHC 2532, an award was
challenged, albeit unsuccessfully, on the ground that the arbitral tribunal had failed to give the
applicant a reasonable opportunity to deal with the case of the respondent. See paras 5-42 et seq.
below for a discussion on the parties’ procedural rights.
#22 See paras 4-023 et seq.
423 Section 24(1)(a) of the Arbitration Act 1996; see also Model Law, Art.12(1) (see Appendix 4).
424 Tn an arbitration in which one party was Portuguese, the arbitrator was overheard saying that
Portuguese people were liars. The arbitrator was removed for failing to act fairly and without
partiality between the parties. Re The Owners of the Steamship “Catalina” and Others and The
Owners of the Motor Vessel “Norma”’ (1938) 61 LI. L. Rep. 360. For a less obvious example, see
Turner (East Asia) Pte Ltd v Builders Federal (Hong Kong) Ltd and Josef Gartner & Co [1988] 42
BEB 122
#2511993] A.C. 646. See further the comments of Rix J. in Laker Airways v FLS Aerospace [2000] 1
W.L.R. 113 at 117E-H.
#6 ATET Corp v Saudi Cable Co [2000] 2 All E.R. (Comm) 625 at 638 B-D.
*27 Approved on May 22, 2004 by the Council of the International Bar Association. See wwm.thanet.org/
legalpractice/arbitration.cfm.
 158 The Tribunal

informed observer to conclude that there was a real possibility... that the
[arbitrator] was biased”’, replacing the previous ‘real danger’ of basis test set out
in R. v Gough.”* The emphasis is very much on the hypothetical third party
observer*?**; it has been variously observed that assertions by an arbitrator who is
the subject of a challenge that he had an open mind or was otherwise not biased
are often unlikely to be helpful and should be accorded little or no evidential
weight.*”? The court (or institution, as the case may be) will usually try and put
itself in the position of the reasonable man. The fair-minded observer is imputed
with knowledge of all relevant facts and takes account of the professional standing
of the impugned arbitrator, so that a highly experienced arbitrator with impeccable
credentials is assumed to have a lower propensity to bias than someone less
experienced.*° The standard also appears to vary depending on the type of
arbitration. Technical arbitrators chosen by the parties for their skill and knowl-
edge in a particular area might not necessarily adopt “‘the kind of management
regime that would be imposed by a Queen’s Counsel fulfilling the same function.”**' In
similar vein, it has been suggested that, in the context of trade or commodity
arbitration, the court should take a “‘fairly robust view of commercial dealings between
a particular arbitrator and one of
the parties, or for that matter between an individual
arbitrator and the market generally.”*** Less clear is the extent to which the
hypothetical third party observer is attributed with a trans-national identity or
whether the fact that a challenger may be a foreign party and therefore unfamiliar
with certain features of the English legal system can strengthen a challenge,
although the likely position now is that, ‘‘7he interpolation of the observer does, I
think, make it unnecessary to give special regard to foreigners.”**

4111 Substantial injustice. In deciding whether to remove an arbitrator on the

ground of apparent bias the court should apply the same test as for a finding of
serious irregularity under s.68 of the Act, which also requires the court to consider
whether the irregularity of the arbitrator has caused or will cause substantial

“8 The current test was forrnulated in Re Medicaments & Related Classes of Goods [2001] 1 W.L.R. 700
and was modified by the House of Lords in Porter v Magill [2001] UKHL 67. This alteration to the
test brought English law into line with the European Convention on Human Rights jurisprudence,
according to which a judge must be both subjectively (actually) impartial but also objectively
impartial: he must be seen to be impartial. Neither case involved an arbitral tribunal but the courts
reviewed all the previous authorities including those relating to arbitrators.
*** Other common law jurisdictions adopt the same or very similar test. For example, the “fair-minded
and informed fictitious observer” test is applied in Hong Kong. See Pacific China Holdings Lid v
Grand Pacific Holdings Ltd HCCT 5/2007.
* Re Medicaments & Related Classes of Goods (No.2) {2001] 1 W.L.R. 700, per Lord Hope at 495.
8° Sumukan Ltd 0 Commonmealth Secretariat [2007] EWHC 188 (Comm) at [71], where the court said
that a fair minded observer would look beyond narrow questions relating to the rules relating to the
arbitrator’s appointment.
8! Norbrook Laboratories v Tank [2006] EWHC 1055, per Colman J., at [153].
*? Argonaud Insurance Co and others v Republic Insurance Co {2003} EWHC 547, David Steel J,
who
cited with approval the reasons given by Moore-Bick J. in Rustal Trading Ltd v Gill & Duffus
SA
[2000] 1 Lloyd’s Rep. 14 at 18. i
®S ASM Shipping Ltd of India v TTMI Ltd of England [2005] EWHC 2238 (Comm) (considering
Rustal Trading Lid v Gill & Duffus SA) [2000] 1 Lloyd’s Rep. 14 at [39]
 Duties of an Arbitral Tribunal 159

injustice to the applicant. Substantial injustice will normally follow as a matter of

course in cases of actual or apparent bias.8++>

Role of institutions. For arbitrations governed by institutional rules, it is 4-112

usual for those rules to provide that the challenge must first be decided by the
institution. Section 24(2) provides that if an arbitral institution is vested with the
power to remove an arbitrator then the court shall not intervene unless the
applicant has first exhausted any available recourse to that institution. In practice,
institutions deciding challenges under English law are likely to have regard to the
same principles and authorities as the court, although as mentioned in the next
paragraph, the grounds for the challenge may not be identical. For example,
arbitration rules often require an arbitrator to be independent**® as well as
“impartial”. Section 24(1) is mandatory, so even if an institution’s rules refer to its
decision being final then an application will still be capable of being made to the
court, assuming that the seat of arbitration is England.**’

The ICC,*** the LCIA**’ and ICSID*® have taken steps to prevent the suspi- 4-113
cion that arbitrators they appoint lack independence, but not without controversy.
For example, the ICC Rules of Arbitration oblige a prospective arbitrator to
disclose in writing to the Secretary-General of the ICC Court any facts or
circumstances which might be of such a nature as to call into question the
arbitrator’s independence in the eyes of the parties. The form the prospective
arbitrator must complete states that the arbitrator has to take into account
“whether there exists any past or present relationship, direct or indirect, with any
of the parties or their counsel, whether financial, professional, or of another kind,
and whether the nature of such relationship is such that disclosure is called for’’.
The LCIA and ICSID have similar procedures. Swiss commentators have been
concerned that disclosure could jeopardise client confidentiality, and that the
result could be that inexperienced arbitrators are appointed. One commentator has
suggested an amendment to the ICC Rules excluding the need to disclose mere
prior acquaintance between an arbitrator and the lawyer for one of the parties.**'
These sorts of procedures are followed as a matter of course only in arbitrations
administered by the major institutions. In ad hoc arbitrations where no institu-
tional supervision is provided the only sure way to obtain the relevant information
is to carry out one’s own investigations and ask pertinent questions of proposed
arbitrators.

84435 Rustal Trading v Gill & Duffus SA and ASM Shipping Ltd v TTMI Lid [2005] EWHC 2238
(Comm). See para.7-123.
486 For a discussion about the duty of independence, see para.4—128.
437 Section 2(1) of the Arbitration Act 1996. In AT&T Corp v Saudi Cable [2000] 2 All E.R. (Comm)
625, a challenge under s.24 of the Act to an ICC arbitrator was made to the English court following
a rejection of the challenge by the ICC Court, notwithstanding Art.7(4) of the ICC Rules which
provides that decisions of the ICC Court as to a challenge to an arbitrator shall be final.
#8 Article 11, ICC Rules of Arbitration.
Se TEAR ral OSs
-NCSIDen6):
+41 See 1990/3 Swiss Arbitration Association Bulletin, 226-234, and 1991/2, 85-89.
 160 The Tribunal

4-114 Strategic considerations. Allegations of conflict of interest have received

heightened attention in recent years, and there.is a concern within the arbitral
community that many challenges are brought as tactical devices simply to disrupt
or derail proceedings. For this reason, any prospective challenger should not only
consider carefully whether the proposed challenge really is justified on the facts
but also try to avoid as much collateral damage to the progress of the proceedings
as possible. In many cases, this will involve bringing the challenge at the earliest
opportunity, rather than waiting to see how proceedings develop first**? and in
other cases constructive suggestions can be made to demonstrate the good faith of
the challenger. In ASM Shipping Ltd of India v TTMI Ltd of England,*** where an
objection to an arbitrator/umpire was raised at a hearing, the court noted: “The
objection to X QC was not an attempt to disrupt the arbitration, as the owners had
indicated their wish to continue with the two appointed arbitrators and without an
umpire and, unless they disagreed, a replacement umpire was not needed.”** The
Court of Appeal has made it clear that the stage of the proceedings at which a
challenge is brought does not of itself matter, subject of course to there having
been no waiver of rights pursuant to s.73.**° These views of the Court of Appeal
were expressed in response to some judicial reluctance to sustain challenges
brought at an advanced stage of proceedings where a large amount of work has
been undertaken and where hearings may have to be repeated.**°

4-115 Infection of bias. In certain circumstances, it is possible that co-arbitrators

may become tainted by the apparent bias of an arbitrator who is removed but only,
it is submitted, where the co-arbitrators strongly and inappropriately associate
themselves with the removed arbitrator’s position. There is no rule that if follows
as a matter of law that the remaining arbitrators are tainted by the apparent bias
of the removed arbitrator.**”

4-116 Pecuniary interest. There is an automatic disqualification for an arbitrator

who has a direct pecuniary interest in one of the parties.’ The question of
removal is to be considered in the light of all relevant circumstances.

*? Of course, a delayed challenge may be barred under s.73.

312005] EWHC 2238 (Comm).
“* Paragraph 41. For an unsuccessful attempt to circumvent the first instance judge’s refusal to grant
leave to appeal his decision see the decision of the Court of Appeal under the same name, {2006}
EWCA 1341.
“8 Morrison v AWG Group Ltd [2006] EWCA Civ 6 at [29]-[30].
4° Tn Re Medicaments & Related Classes of Goods (No.2) [2001] 1 W.L.R. 700, the entire tribunal was
remoyed even though the trial was in progress and had already lasted some five weeks. The IBA
Guidelines state, “no distinction should be made regarding the stage of the arbitral procedure”’, Pt
1, Explanation to General Standard 3, at para.3(d).
“7 ASM Shipping Lid v Bruce Harris & Others [2007] EWHC 1513, at [42}-[46]. Contrast Re
Medicaments & Related Classes of Goods [2001] W.L.R. 700, in which it was held that a lay member
of the Restrictive Practices Court was tainted by apparent bias, leading to the disqualification of the
other two members of the court.
WS ATET Corp v Saudi Cable [2000] 2 All E.R. (Comm) 625. The challenged arbitrator held 300
common shares in one of the parties, a listed entity, and was not challenged on this basis.
 Duties of an Arbitral Tribunal 161

In AT&T, the chairman of an arbitral tribunal was a non-executive director and

shareholder in a competitor company that was an unsuccessful bidder for the
agreement in relation to which disputes subsequently arose between the parties.
The Court of Appeal (upholding the decision reached at first instance) dismissed
the challenge because, among other things, the arbitrator did not have a direct
pecuniary interest in either of the parties. His shareholding in a competitor of one
of the parties was sufficiently small to be of no consequence.*”” Further, the court
found that he was not part of the management of the competitor company and that
his directorship was incidental rather than a vital part of his professional life. The
arbitrator did not attach any real importance to his directorship, as illustrated by
his readiness to resign it when he was challenged.

Past or present positions held by arbitrator. In exceptional cases, 4-117

the past or present positions held or roles performed by the arbitrator outside of
the particular case before him can give rise to a real possibility of bias. In Locabail
v Bayfield Properties**® the Court of Appeal sought to give guidance on factors that
could not ordinarily provide a basis for an allegation of bias. These include the
judge’s gender, religion, background, family,*' friendships,*? memberships of
clubs or associations, previous decisions, extra-curricular utterances, previous
receipt of instructions to act for or against any one engaged in a case now before
him and membership of the same chambers. However, this list is of a general
nature only and does not preclude any of the listed matters from giving rise to a
successful challenge in particular circumstances.

Role of IBA Guidelines on Conflicts of Interest. The IBA Guide- 4-118

lines on Conflicts of Interest in International Arbitration, although clearly not
representative of English law, also contain helpful guidance on specific situations
relating to past or present positions.*°** The Guidelines contain certain general
principles and also attach lists of particular circumstances which have arisen in
practice and which are classified as red, orange or green depending upon the
degree or of objection, if any, to the particular circumstance. For example, the fact
that the arbitrator is a director, otherwise controls or has a significant financial
interest in one of the parties appears on the Non-Waivable Red List, which means
that the arbitrator should not act in any circumstances. The situation where an
arbitrator is a lawyer in the same firm as counsel to one of the parties is on the

49 ATEST Corp v Saudi Cable {2000] 2 All E.R. (Comm) 625, at [16].
45° 12000] Q.B. 451 at 480.
451 In Tembec v United States, an investment treaty case under the North American Free Trade
Agreement, ICSID refused to remove an arbitrator on the grounds of (1) the arbitrator’s marriage
to a first cousin of the US President, and (2) the arbitator’s position some 20 years previously as US
State Department Legal Advisor. Investment Treaty News, June 15, 2006, mmm.tisd.org/investment /
iN.
452 See Morrison v AWG Group Lid [2006] EWCA Civ 6.
452a'The earlier IBA Rules of Ethics for International Arbitrators, available at mmmibanet.org, also
contain some helpful guidance.
 162 The Tribunal

Waivable Red List, which means that the arbitrator may act with consent of the
other party.*® Far less clear cut are situations appearing on the Orange List which,
the Guidelines suggest, should be disclosed as each situation may “‘in the eyes of
the parties give rise to justifiable doubts as to the arbitrator’s impartiality or
independence”. Green List circumstances do not need to be disclosed and do not
give rise to objection. Certain examples of these situations will be discussed below.
The application of the IBA Guidelines were considered in ASM Shipping Ltd of
India v TTMI Ltd of England. The facts of that case could not be made to fit into
any of the examples given in the Guidelines, leading the court to conclude that
they “say... nothing about the true answer to the questions in this case”.** In
appropriate circumstances, however, it is suggested that the court could derive
assistance from the Guidelines when considering challenges.

4-119 Unequal involvement in appointment process. The court has

rejected an application to set aside an award based on apparent bias where the
tribunal was appointed by the head of a body which would always be a party to any
case before the tribunal, the body provided administrative services to the tribunal
and met certain expenses and had power to amend its statute.**° Rejecting the
complaint, the court noted that steps had been taken to ensure the high pro-
fessional standing of the tribunal members. In the same case, the court also
rejected a related complaint relating to the ad hoc process by which one of the
arbitrators had been appointed, saying that a “properly informed, independent
observer” would not have concluded that there was a real possibility of bias. The
decision appears to have been influenced by the fact that the body in question was
the Commonwealth Secretariat, an international organisation designed to organise
and promote the interests of the Commonwealth of Nations, and not a commercial
institution, where it seems likely that the direct ability to appoint all three
members of the tribunal would not be tolerated.

4-120 Arbitrator previously acted for/against a party. In 4SM Shipping

Lid of India v TTMI Ltd of England apparent bias was made out where a Queen’s
Counsel had appeared seven months previously for a third party (instructed on a
disclosure application by one of the solicitors in the case before him) against one
of the parties to the case in which he now sat as arbitrator. At issue in the
arbitration was an allegedly dishonest approach to disclosure by the challenging
party, and a similar issue had arisen in the context of the separate disclosure
application made by the Queen’s Counsel against the party in the earlier case.
“The nature of the allegations, the pattern of them, the involvement of the same

453 Paragraphs 1.1, 2.3.3.

** 12005] EWHC 2238 (Comm).
*° Sukuman Ltd v Commonwealth Secretariat [2007] EWHC 188.
 Duties of an Arbitral Tribunal 163

solicitors, X QC"s involvement in the disclosure process a short time before sitting as an
arbitrator in gudgment on the alleged dishonest party persuades me, for the reasons I
have given, that X QC should have recused himself.”*°° If the arbitrator had not been
involved in making allegations of dishonesty against one of the parties then it is
suggested that apparent bias may not have been made out. An arbitrator was also
removed where he had previously acted as a consultant expert and advised on the
defence of non-parties (in the arbitration) to an insurance fraud case. His involve-
ment was limited to a two week period, some three and a half years before the
arbitration commenced but nonetheless related to a fraud which was said to
constitute the ‘‘central fact” in the arbitration. In these circumstances, the court
removed the arbitrator because of the real risk that the arbitrator may have formed
certain views as to the issues and relevant individuals from his previous engage-
ment which he could not now disclose to the court, as his previous advice was
privileged, but which may give rise to an appearance of bias.**’

Arbitrator’s law firm associated with a party. An arbitrator was 4-121

removed where the firm in which he was salaried partner carried out a large
amount of separate legal work for an associated company of one of the parties.**
A similar argument was rejected by the Court of Appeal in the Locabail v Bayfield
Properties,’ one of five applications relating to judicial bias heard together. ‘The
court found that the link between the firm of solicitors in which the judge was a
senior partner and one of the parties was too remote to allow disqualification on
the basis ef a direct pecuniary bias or apparent bias.

Repeated appointments. Other forms of past contact between a party and 4-122
an arbitrator may also constitute grounds for removal; each case turns on its
particular facts. For example, a pattern of significant and repeated appointments
from one party in favour of a particular arbitrator may be sufficient, especially if
it can be shown that the arbitrator is dependent upon a particular party for a
significant portion of his or her business. The Orange List of the IBA Guidelines
suggests that more than three previous appointments by an arbitrator by the same

456 [2005] EWHC 2238 (Comm). This was a challenge under s.68 of the Act. The award was not set
aside because the applicant delayed until the award was delivered and accordingly had fallen foul of
s.73 of the Act. However, the court felt that the arbitrator “should not continue to act in this
matter” (at 390), even though no application was apparently made under s.24, because the court felt
that his continued involvement in the case was unacceptable as apparent bias had been made out.
For comment on this case see, Friel, “Apparent Bias” and “Serious Irregularity” in English
Arbitration, Int. A.L.R. 2006, 9(1), N1-3. For an unsuccessful attempt to circumyent the first
instance judge’s refusal to grant leave to appeal his decision see the decision of the Court of Appeal
under the same name, [2006] EWCA 1341. See also ASM Shipping Ltd v Harris [2007] EWHC 1513
for an unsuccessful attempt to remove the two remaining arbitrators.
457 Sphere Drake Insurance v American Reliable Insurance Co [2004] EWHC 796.
458 Save & Prosper Pensions Lid v Homebase Ltd [2001] L. & T. Rev. 11.
#59 [2000] 1 All E.R. 65.
 164 The Tribunal

counsel or law firm in three years, and more than one previous appointment by the
same party or its affiliates should be disclosed.*”°

4-123 Arbitrator/counsel links. In principle, the mere fact that an arbitrator is

being addressed in a case by counsel with whom he sits as co-arbitrator in a
separate, unrelated case is unlikely to constitute sufficient grounds for removal of
the arbitrator.*! A close personal friendship between an arbitrator and counsel or
someone else involved in the case, such as a witness, may also give rise to a real
possibility of bias.*°? The existence of significant animosity between an arbitrator
and counsel or someone else involved in the case may also give rise to a real
possibility of bias.*°7*

4-124 Previous views expressed by arbitrator. In certain circumstances,

previously expressed views of an arbitrator, which suggest a certain pre-disposi-
tion to a particular course of action, outcome or in favour of a party, can constitute
grounds for removal. One of the Locabail v Bayfield applications*® against a judge
was successful on this basis. The judge had written four strongly worded articles
which led the court to conclude that an objective apprehension of bias may arise
on the part of one of the parties. However, a challenge against a sole arbitrator in
a trade arbitration which alleged apparent bias because the arbitrator had pre-
viously been involved in a dispute with one of the parties failed. The judge found
this on the facts to be no more than ‘‘an ordinary incident of commercial life”
occurring in the relatively small field of trade arbitrations where it was thought the
parties and arbitrators were quite likely to have had prior dealing with each
other.*°* Similarly, the fact that an insurance arbitrator had previously given a
statement in another arbitration (and may have been called to give evidence
subsequently) about the meaning of a standard form clause which might have had
a tentative bearing on the present arbitration would not give grounds for
removal.*”° There is foreign authority to suggest that apparent bias might be made
out in circumstances where an arbitrator also appears simultaneously as counsel in
a case raising very similar issues and in his capacity as counsel takes a position

*©° Orange list, paras 3.1.3, 3.3.7. No objection was taken to 10 sets of previous instructions over 11
years to the arbitrator (to act as counsel) by one ofthe solicitors in the arbitration in ASM Shipping
Ltd of India v TTMLI Ltd of England [2005| EWHC 2238 (Comm). This was seen in the context of
the arbitrator’s overall number of 400 instructions in the same period: [15].
*'' This approach has been confirmed by the Swiss Supreme Court in a series of cases involving the
Court of Arbitration for Sport. X v Y, August 4, 2006, Swiss Supreme Court, Ist Civil Chamber,
reported at wwm.kluwerarbitration.com.
In Sir Alewander Morrison & Another v0AWG Group Lid & Another [2006] EWCA 6, a case of
apparent judicial bias, the Court of Appeal removed a judge who declined to recuse himself when
he realised, on the eve of the trial, that he had known a major proposed witness for over 30
years,
4624 Howell & Others v Millais Rothers [2007] EWCA 720, a case of apparent judicial bias, where a judge
who had unsuccessfully applied for a job with a firm of solicitors later showed animosity to that firm
when it represented a party before him. The judge was removed. ‘
463 Timmins v Gormley [2000] 1 All E.R. 65 at 92-93.
64 Rustal Trading Lid v Gill and Duffas SA |2000] 1 Lloyd’s Rep. 14.
465 Argonaut Insurance Co v Republic Insurance Co {2003] EWHC 547.
 Duties of an Arbitral Tribunal 165

which is adverse to a party in the case in which he sits as arbitrator.*°° Whether

the English court would follow this approach would, it is suggested, depend very
much on the circumstances as an unduly strict application of such a principle
could lead to parties seeking removal of an arbitrator when the confluence of the
issues was really quite remote.*°’

Barristers from the same chambers. In international arbitrations 4-125

parties unfamiliar with the organisation and traditions of English barristers have
questioned the participation in an arbitration of barristers from the same cham-
bers in different capacities: for instance, one appearing as an arbitrator, and
another appearing as advocate. The English courts have to date maintained that
this practice is not sufficient evidence of apparent bias*®** but if chambers develop
stronger corporate identities one can expect further questions to be raised.*°’
Where a party was represented by a barrister from the same chambers as one of
the arbitrators, the court declined to remove the arbitrator on an application under
s.24(1)(a) of the Act. The court found that, to succeed with such an application,
the applicant must show that either (i) the organisation of chambers gives rise to
the necessary justifiable doubts because of the danger of accidental or improper
dissemination of confidential information, or (ii) the arbitrator may not observe
the rule against holding conversations with one party outside the presence of all
parties to the arbitration.*”°

Same chambers and conditional fee arrangements. To these two 4-126

possibilities, one can also conceivably add the situation where an arbitrator may
have to bear a greater share of chambers’ running expenses if other members of
chambers earn less, in other words where expenses are paid in proportion to
earnings. If counsel is conducting an arbitration on a conditional fee arrangement
then in theory a situation may arise where, if the arbitrator who is a member of the
same chambers and becomes aware of the conditional fee arrangement and would
under the rules of chambers, have to pay more towards expenses if counsel earns

466 Ghana v Telekom Malaysia Berhad, October 18, 2004; November 5, 2004; District Court of The
Hague, reported at mmm. klumerarbitration.com. The case involved two investment treaty cases. The
Dutch court admitted Ghana’s challenge to the arbitrator unless the arbitrator resigned as counsel,
which he did, and then rejected a second challenge based on the fact that the arbitrator had already
been involved in a number of decisions of the tribunal.
467 In non-investment treaty confidential arbitrations, a prospective challenger would not usually be
aware of the position being taken by the arbitrator as counsel, or indeed as arbitrator, in other
confidential cases.
468 Laker Airways v FLS Aerospace [2000] 1 W.L.R. 113; see also PPG Industries Inc v Pilkington Ple
(1989) unreported decision of Saville J., Commercial Court, November 1, see also Nye Saunders and
Partners (a firm) v Alan E Bristow [1987] 37 B.L.R. 92. French law has recognised the same
principle as part of English law. See further Kendall, “Barristers, Independence and Disclosure” in
(1992) 8 Arbitration Int. 287.
469 This situation appears on the Orange List of the IBA Guidelines, at para.3.3.2, which suggests that
the principle that a successful challenge cannot be founded on this basis is not inviolate. See also
a commentary on this issue in Background Information issued by the IBA Working Group.
470 Laker Airways v FLS Aerospace [2000] 1 W.L.R. 113. Considered in ASM Shipping Ltd of India v
TTML Ltd of England [2005] EWHC 2238 (Comm) and cited with approval in Smith v Kvaerner
Cementation [2006] EWCA 242, at [17].
 166 The Tribunal

less, the fair minded observer may conclude that the arbitrator might be inclined
to favour the case being advanced by the fellow member of his chambers or at least
that his exercise of discretion in relation to the award of costs may be open to
question. *7!

4-127 Early disclosure advised. When an arbitrator has a prior interest that
might raise doubts about his impartiality, he should disclose that interest at the
earliest opportunity. This enables the issue to be debated before much time and
money have been spent on the arbitration proceedings. If it is not disclosed by the
arbitrator at an early stage, but discovered by one of the parties at a later stage,
there is much more likelihood of suspicion arising from the apparent concealment.
In those circumstances it is at least likely that there will be objections to the
continued involvement of the arbitrator and much more risk that substantial costs
will have been wasted if he has to be replaced. The statement ‘“‘Early disclosure
advised” should not be taken to extremes however; unnecessary disclosure can also
raise an incorrect implication in the minds of the parties that the disclosed
circumstances constitute an open invitation to object to or remove that arbitrator.
Excessive disclosure can therefore undermine the process, with unfounded objec-
tions being taken by the parties on the basis of over-broad disclosure at the early
stages of proceedings.
In certain circumstances, it is arguable that failure to disclose of itself may give
rise to the necessary justifiable doubts,‘’* especially if the failure to disclose is
shown to be culpable, for example in relation to an obviously relevant matter.

(c) The duty to be independent

4-128 Independence. If an arbitrator accepts an appointment, and his independence

is questioned by one or more of the parties, he cannot be challenged under the Act
solely on that ground unless the lack of independence gives rise to justifiable
doubts as to his impartiality.t”’ Possible distinctions between independence and
impartiality have been the subject of much comment.*”* The DAC decided to leave
out a specific requirement of independence, as lack of independence would often
raise justifiable doubts about impartiality and therefore independence was thought
to be often included within the concept of impartiality.*”> It is arguable that the
requirement in Art.6 of the European Convention on Human Rights, incorporated

7! Some support for this view can be found in the obiter comments of the Court of Appeal in Smith
v Kvaerner Cementation [2006] EWCA 242 at [17].
* Such an argument was made before the Court of Appeal in AT&T Corp v Saudi Cable 2000] 2 All
E.R. (Comm) 625, although on the facts the argument was rejected because the initial failure to
disclose the directorship was ‘‘due to secretarial error and was innocent” (at 630B). Whilst advising
early and prudent disclosure, the IBA Guidelines do not suggest that non-disclosure of itself should
make an arbitrator partial. See Pt II, para.5.
"* Section 24(1)(a) of the Arbitration Act 1996 and para.4—023. DAC report, paras 100-102.
“4 See Eastwood, “A Real Danger of Confusion? The English Law Relating to Bias in Arbitrators” in
Arbitration Int., Vol.17, No.3, and the further references at fn.24 of the article.
5 DAC report, paras 101-102.
 Duties of an Arbitral Tribunal 167

into domestic law by the Human Rights Act 1998, which includes the right to be
heard by “an independent and impartial tribunal” has introduced the concept of
independence into English arbitration law in any event.'”° In ASM Shipping Ltd
of India v TTMI Ltd of England, Morison J. commented that there was a
“difference without distinction” between the two concepts.*”

Neutrality. Neutrality is not the same concept as independence: it is much 4-129

broader. It has been said*’* that an international arbitrator, particularly when
appointed chairman of a tribunal, must be neutral not only as between the
countries of the parties and their political systems, but also as between their legal
systems and use of legal concepts. The ICC’s practice is to appoint as chairman
a national of a different country from the countries of both the parties and the
party-appointed arbitrators.*”? Some would go further, and insist that the chair-
man does not come from the same kind of country as well. This might, we
suppose, produce the following result: in an arbitration between, for instance, an
African party and a US party, the chairman of the tribunal could not be a national
of any African country or of the United States: on the basis of this doctrine the
United Kingdom, (and even perhaps other common law jurisdictions) and possi-
bly other countries, might also be excluded. The resulting choice might be a
national of a European, South American or Pacific Rim country.**° A balance has
to be struck between the need to find a tribunal experienced enough to discharge
its mandate effectively, but in whom the parties can objectively have confidence.
English law does not however draw any distinction between the standards of
impartiality required from a chairman as opposed to party-appointed arbitra-
tors.**!

(d) Duty to adopt suitable procedure and to avoid expense and delay

Suitable procedures.*** A tribunal has an obligation to adopt procedures 4-130

suitable to the circumstances of the particular case.*** Thus, where an arbitration
turns on a single issue of law it would not be appropriate to arrange a full trial with

476 See Sandy, Independence, Impartiality and the Human Rights Act in England, Arbitration Int.,
Vol.20, No.2, 2004; Gearing “A Judge in his own Cause?, Actual or Unconscious Bias of Arbi-
trators”, (2000) Int. A.L.R. 246 and Eastwood, above, “The English Law Relating to Bias in
Arbitrators”. See also para.1—038.
477
Paragraph 14.
478 Professor Pierre Lalive “On the neutrality of the arbitrator and of the place of arbitration” (1984)
Essays on International Arbitration at paras 23 e7 seq. and Rosabel Goodman-Everard, “‘Cultural
Diversity in International Arbitration—A Challenge for Decision-Makers and Decision-Making”
(1991) 2 Arbitration Int. 155.
479 See also LCIA Rules, Art.3.3.
480 In the dispute involving the former firm of Arthur Andersen, the choice of tribunal was severely
limited because of the number of partners practising in different parts of the world.
481 Save that if it is accepted that a party-appointed arbitrator can have unilateral discussions with the
party who appointed him over the identity of the chairman, where it falls to the party-appointed
arbitrators to appoint the chairman.
482 See paras 5-089 ev seq., where the range of possible procedures is discussed.
483 Section 33(1)(b) of the Arbitration Act 1996.
 168 The Tribunal

cross-examination of witnesses: a suitable procedure may be the submission of

written arguments with no hearing.

4-131 The duty to avoid unnecessary delay or expense.*™* A tribunal has

the duty, in adopting suitable procedures, to avoid unnecessary delay or expense.***
The first part of this obligation is similar to the duty to “use all reasonable
dispatch”? under the former legislation and its breach is a ground for removal
under the Arbitration Act 1996.*°° There is no precedent, however, for the
obligation to avoid unnecessary expense. The duty might for example be dis-
charged in part by using the power to limit recoverable costs.**’ It is clearly very
closely connected to the duty to adopt suitable procedures. In the example given
above*** the written procedure may be more cost effective than one involving a
hearing.**”

(e) Conduct of proceedings

4-132 Mental and physical capacity. An arbitrator must be mentally and

physically capable of conducting proceedings. If he is not or there are justifiable
doubts as to his capacity, he may be removed.*”°

4-133 Proper conduct of proceedings. The tribunal’s duties in respect of the

proper conduct of the proceedings are discussed in Ch.5.4°! These include
conducting the arbitration with reasonable despatch,*”? attending hearings and
participating in deliberations,*”* following the agreed procedure*’* and dealing
with all the issues.*?*

4-134 Requirements of an award. An award should be certain and unambigu-

ous,*”° it must not be obtained by fraud or be contrary to public policy*”” and it
must comply with requirements as to form.*°* The tribunal’s duties relating to an
award are dealt with in Chs 6 and 8.1?”
484 See paras 5-032 et seq.
*85 Section 33(1)(b) of the Arbitration Act 1996,
#6 Section 24(1)(d)(ii) of the Arbitration Act 1996, cf. Arbitration Act 1950, s.13(3).
**7 Under s.65 of the Arbitration Act 1996, see para.4—103.
#88 Tn para.4-130.
89 See para.5—108.
° Section 24(1)(c) of the Arbitration Act 1996, see para.7—115.
#91 See paras 5-032 et seq.
2 Section 24(1)(d)(ii) of the Arbitration Act 1996,
Implicit in the general duty under s.33(1)(a) of the Arbitration Act 1996.
+ Section 68(2)(c) of the Arbitration Act 1996,
5 Section 68(2)(d) of the Arbitration Act 1996.
6 Section 68(2)(f) of the Arbitration Act 1996.
7 Section 68(2)(g) of the Arbitration Act 1996.
#8 Section 68(2)(h) of the Arbitration Act 1996.
® See paras 6-044 et seq. and paras 8-072 et seq.
 Duties of an Arbitral Tribunal 169

(f) Duty not to exceed jurisdiction or powers

Not to exceed jurisdiction.°’? An arbitral tribunal should not exceed its 4-135
jurisdiction; if it does so, the award may be unenforceable, either in whole or in
part.°’' The corollary to this negative duty is that every tribunal should aim to
make an award that can be enforced if necessary. This aim is stated as an express
objective in some rules of arbitration.*”

Not to exceed powers.””* An arbitral tribunal should not exceed its powers 4-136
in conducting an arbitration, or any resulting award may be challenged for serious
irregularity.°°* A distinction is made, however, between an excess of powers and
the incorrect exercise of powers. In the latter case, a decision may not be
successfully challenged.°”°

(g) Qualifications

Duty to possess the required qualifications. An arbitrator must 4-137

possess the qualifications required by the arbitration agreement,*’° otherwise he
can be removed and/or his award may be set aside.*””

(h) Other duties

To respect confidentiality. One of the reasons for choosing arbitration is 4-138

that it is thought to keep disputes confidential.°°* An arbitral tribunal is subject to
a duty to keep the subject-matter of the arbitration confidential except when
required by law to disclose it.°°”

To act judicially.°'® This duty is best expressed in the general duty imposed 4-139
on an arbitral tribunal by s.33 of the Arbitration Act, 1996.°!' That duty is
mandatory. Though it is sometimes said that an arbitrator must act judicially, the
duties of judge and an arbitrator differ. For example, the parties may agree that an

509 Section 67(1) of the Arbitration Act 1996.

°°l See further paras 5—060 et seq.
502 For example, see ICC Rules, Art.35.
593 Section 68(2)(b) of the Arbitration Act 1996.
4 See paras 8-041 et seq.
505 Lesotho Highlands Development Authority v Impregilo [2005] UKHL 43.
5° Section 24(1)(b) of the Arbitration Act 1996.
*07'See Ghs 7-and''8:
508 The confidentiality attaching to arbitration is qualified—see paras 5-184 et seg.
509 See paras 5-182 et seq.
510 Re Hopper (1867) L.R. 2 QB. 367, explained by Lord Salmon in Sutcliffe v Thackrah [1974] ALG:
727 at 763D, Fisher v PG Wellfair Ltd (in liquidation); Fox v PG Wellfair Ltd (in liquidation) [1981]
2 Lloyd’s Rep. 514. See paras 5—032 et seq.
*!1 See paras 5-062 and 6-078.
 170 The Tribunal

arbitrator may apply “considerations” other than the law.°!* The nature of an
arbitral tribunal’s judicial role has been qualified somewhat by the provision
enabling a tribunal to take the initiative in ascertaining the facts and the law.°!*
However, in taking the initiative, the tribunal would have to operate openly and
would have to give the parties an opportunity to deal with any new material it
intended to rely on.
The duties of the tribunal in the conduct of the conference are discussed in
Ch.5.5'* The substantive requirements of an award are discussed in Ch.6.°"°
Challenges to decisions made by arbitrators are discussed in Ch.8.°!°

4-140 To make one’s own decision. The tribunal has a duty to reach a decision
on the issues submitted for determination. A tribunal cannot delegate its function
to decide between the parties.*!’ Further, each member of the tribunal is expected
to participate in the decision-making process even if the result is not unan-
imous.°'*

4-141 To decide according to the law. It used frequently to be said to be an

arbitrator’s duty was to decide disputes according to the law,*!? and that this duty
was an implied term.*”° The position is now clearly stated in the Act. The tribunal
must decide a dispute: (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 reference to the substantive law of a country is not a reference
to its conflict of laws rules.°?* If or to the extent that there is no such choice or
agreement, the tribunal applies the law determined by conflict of laws rules it
considers applicable.°”* “Such other considerations” are discussed in the following
paragraphs.°**

4-142 “Equity” clauses. The tribunal has a duty to decide a dispute in accordance
with the legal rights of the parties, rather than in what the tribunal considers a fair
and reasonable way,” unless there is specific agreement between the parties to the
contrary. The tribunal may, however, be specifically instructed by the arbitration

>!2 Section 46(1) of the Arbitration Act 1996.

*15 Section 34(2)(g) of the Arbitration Act 1996. See also paras 151-163.
514 See paras 5-032 et seq.
*!5 See paras 6-072 ef seq.
°1© See paras 8-051 ef seq.
*!7 See paras 6-057 and 6-076 et seq.
*I8 See European Grain v Johnston [1982] 2 Lloyd’s Rep. 550 at 554.
> Orion Compania Espanola de Seguros v Belfort Maatshappij Voor Algemene Verzekgringen [1962] 2
Lloyd’s Rep. 257.
0 For instance, NV Vulcaan v Mowinvkels Rederi [1938] 2 All E.R. 152.
**! Section 46(1) of the Arbitration Act 1996. Cf. Model Law, Art.28: (see Appendix 4).
2 Section 46(2) of the Arbitration Act 1996.
23 Section 46(3) of the Arbitration Act 1996.
524 See also para.2-091
9 David Taylor & Son Lid v Barnet Trading Co [1953] 1 W.L.R. 563 at 568.
 Duties of an Arbitral Tribunal 171

agreement to decide the dispute on some basis other than the law. An agreement
to this effect has generally become known as an “equity clause”. For example, the
parties may agree that the tribunal is to decide the dispute in accordance with
concepts variously known as “honourable engagement”, “‘amiable composition”,
“equity”, “ex aequo et bono”, the “general principles of law recognised by civilised
nations” or the “/ex mercatoria’”’.°*® The expression “‘/ex mercatoria” is not usually
found in arbitration clauses, and some commentators have doubted whether it has
any meaning. ‘Those who do assign it a meaning differ as to whether it is a separate
body of international commercial law or equivalent to freedom from strict legal
constraint.°’’ Various wordings are encountered in arbitration agreements, and
each has to be carefully interpreted.

Court’s attitude to “equity” clauses. It is expected that the courts will 4-143
interpret the statutory provision allowing a tribunal to decide a dispute in accor-
dance with such other considerations as are agreed or determined®*** as obliging
them to uphold equity clauses.°’’ In agreeing that a dispute shall be resolved this
way, the parties are in effect excluding any right of appeal to the court, there being
no question of law to appeal.**°

Facilitating a settlement. From time to time an arbitral tribunal is asked 4-144

to facilitate a settlement between the parties.°*! An arbitrator must proceed very
carefully with this task and not compromise his role as an arbitrator with that of
a mediator even if both parties agree. In Weissfisch v Julius,>** the Respondent had
attempted, but failed, to mediate disputes between the parties and then proceeded
to fulfil his role as arbitrator. An application was made to the court by one of the
parties to restrain him from continuing to act as an arbitrator in circumstances
where he had performed a role, described by the Court of Appeal, as coming close
to an amalgam of arbitrator and mediator. The application failed, but litigation
ensued.°*?

(1) Party-appointed arbitrators

Duty to act judicially, fairly and impartially. Party-appointed 4-145

arbitrators’** have the same duty to act judicially, fairly and impartially as any

526 Model Law, Art.28(3) (see Appendix 4) refers to “ex aequo et bono” and “amiable compositeur”.
527 David Rivkin, “The enforceability of arbitral awards based on /ex mercatoria”’, (1993), 9 Arbitration
Vinten, Ihe (Oy,
28 Section 46(1)(b) of the Arbitration Act 1996.
529 See DAC report, paras 222 et seq.
930 DAC report, para.223.
531 This is often done in other jurisdictions, e.g. in Germany.
532 [2006] EWCA Civ 218.
533 The parties had in that case expressly waived any conflict arising from the arbitrator’s prior
involvement with the parties. The litigation continued under the title 4 v B [2007] 1 Lloyd’s Rep.
PBI, Ney
534 See Murray Smith, ‘““The Impartiality of the party-appointed arbitrator”, 6 Arbitration Int. 4 at
320.
 172 The Tribunal

other member of the tribunal (e.g. the chairman), although they have been
appointed by one of the parties, rather than by both parties, or by an appointing
authority or by the court.**? As Russell wrote in the first edition of this book:

“The arbitrators so selected [i.e. one by each side] are not to consider themselves the
agents or advocates of the party who appoints them. When once nominated, they are to
perform the duty of deciding impartially between the parties, and they will be looked on
as acting corruptly if they act as agents or take instructions from either side”.>»? 536

The consequence is that unless consulting about the appointment of a third

arbitrator, a party-appointed arbitrator must not confer unilaterally with the party
who appointed him, or with any of that party’s legal or other representatives,
unless the other party, or its representatives, are present. An exception to this rule
allows a party-appointed arbitrator to discuss the identity of the chairman with the
party who appointed him.**” Normally, the tribunal, as a whole, should commu-
nicate with the parties unless the chairman is authorised to do so alone.*** If the
arbitrator appointed by one party becomes sole arbitrator, in default of appoint-
ment by the other, he is in the same position as a single arbitrator,>*’ and must of
course act judicially.

4-146 Party-appointed arbitrators appointing and then sitting with

an umpire. Party-appointed arbitrators have a duty to act judicially when
appointing an umpire.**° After the appointment the position may become some-
what different when sitting with the umpire, because party-appointed arbitrators
have as a matter of practice in certain arbitrations acted as advocates following
their replacement by the umpire as the decision-maker. Arbitrators in this role
should approach their task as follows:

“The arbitrators are appointed to perform a judicial function unless and until they
disagree and the umpire enters upon the reference. Thereafter they can and do act as
advocates for the party who appointed them. Until that point is reached, and it is only
in a minority of cases that it is reached, neither arbitrator has any special relationship
with the party which appointed him and each arbitrator is under the same duty of
fairness, openness and impartiality to both parties.”>*!

4-147 Each arbitrator must act, but majority awards are allowed.
Unless the contrary intention is expressed in the arbitration agreement, in any case

**° The only exception is a tribunal originally composed of two arbitrators where there has been
disagreement and an umpire is appointed, see para.4—150.
*° At pp.206-207, in a section on the disadvantages of tribunals of more than one arbitrator published
in 1849.
57 See IBA Rules of Ethics for International Arbitrators, Art.5.2; Pacific China Holdings Ltd v Grand
Pacific Holdings Lid ACCT 5/2007, a decision of the Hong Kong High Court.
8 Veritas Shipping cited above at fn.537, at 77.
°° Cooper v Shuttleworth (1856) 25 L.J. Ex. 114 at 115,
49 Prescod v Prescod (1887) 58 L.T. 76.
"The Owners of the MV Myron v Tradax Export SA [1970] 1 Q.B. 527, Lord Donaldson MLR. at
533B.
 Duties of an Arbitral Tribunal 13

where there is a reference to three arbitrators, the decision, order or award of two
of the arbitrators is binding: but where one of the three is to act as chairman the
view of the chairman prevails in cases where there is neither unanimity nor a
majority.°'? Where the reference is to two arbitrators, there must be unanimity in
order to make a valid award,°*’ but together they have power to make decisions,
orders and awards until they cannot agree on a substantive matter in the arbitra-
tion.°** If and when they disagree, an umpire will usually take over the conduct of
the arbitration, and his power is the same as if he were sole arbitrator.>*>

All arbitrators must have the same jurisdiction. All arbitrators 4-148
must be given jurisdiction over all the questions they are to decide: for an award
cannot be made about a matter over which one arbitrator has no jurisdiction.?*°

(7) Third arbitrators, chairmen and umpires

Different types of third arbitrator. In most jurisdictions the third 4-149

arbitrator, or chairman (or president) of the tribunal holds a position no different
from that of the other arbitrators, except that he chairs or presides over meetings
of the tribunal.°*’ English law accords one type of third arbitrator, the umpire, a
different status. He is, effectively, a sole arbitrator.** He is appointed by the
existing two arbitrators’? to take over the reference from arbitrators who are
unable to agree amongst themselves. In general he is in the same position as a sole
arbitrator, and must possess the same qualifications or absence of disqualifica-
tions.*°° The powers and duties of an umpire, when he is called upon to act, are
in general the same as those of a sole arbitrator.

Role of umpire. The parties may agree on what the functions of their umpire 4-150
are to be, and in particular whether he is to attend the first stage of the proceedings
which take place before the two party-appointed arbitrators, and when he 1s to
replace those arbitrators as the tribunal with the power to make decisions, orders,

542 Section 20 of the Arbitration Act 1996. This is similar to ICC Rules, Art.19, and UNCITRAL
Rules, Art.31(2) for procedural matters. There is no analogue for it in the Model Law (see Appendix
4) or the former English legislation.
543 This obvious statement seems to be supported by the terms of s.22(2) of the Arbitration Act 1996
which uses the word “all”? when there is no possibility of a majority of arbitrators.
544 Section 21(4) of the Arbitration Act 1996.
45 Section 21 of the Arbitration Act 1996.
546 Davies and Another v Price (1864) 11 L.T. (N.S.) 203. The jurisdiction is established by the terms
of the arbitration agreement, the appointments and any other similar documents arising between the
parties and/or the arbitrators.
47 See para.4—011.
548 Section 21(5) of the Arbitration Act 1996.
549 Section 16(6)(b) of the Arbitration Act 1996.
550 For instance, the absence of undisclosed interest, Blanchard v Sun Fire Office (1890) 6 L.T.R. 365:
cf. paras 4-023 ef seq.
 174 The Tribunal

and awards.**! If or to the extent there is no such agreement, the following

provisions apply.°°* The umpire’s authority begins after notice of disagreement
has been given by the two party-appointed arbitrators either to him or the
parties.°°* There is no definite rule as to what constitutes disagreement, but it has
been widely construed: ‘“‘non-agreement is disagreement’’.>** The court may order
the umpire to replace the other arbitrators as the tribunal with power to make
decisions, orders and awards “‘as if he were sole arbitrator” at any time after his
appointment, on the application of either party.°’? If the umpire fails to start
acting within a reasonable time he may be removed by the court on application of
either party.°*° What the parties usually want is for the arbitrators to sit with the
umpire and to assist him in understanding the evidence and arguments presented
to them. For this reason the practice is found of the two arbitrators expressing
their disagreement early to save the costs of dealing with the same matters twice.
An umpire may sit with the arbitrators and hear the evidence, which is no ground
for objection to the validity of an award subsequently made by the umpire after the
arbitrators failed to agree provided the umpire does not participate in the arbi-
trators’ deliberations.*°’ An arbitration agreement providing for decision by “‘arbi-
trators” was held to contemplate the appointment of the umpire before he entered
on the reference, and consequently to enable the arbitrators to request the
attendance of the umpire at the hearing even though one of the parties to the
reference did not consent.>**

4-151 Umpire’s jurisdiction and duty with regard to evidence and

the hearing. Where the umpire enters upon the reference and replaces the
arbitrators’ he needs to review the evidence and submissions only on those
matters about which the arbitrators have disagreed.°°? The umpire has a duty to
hear the evidence of the parties and their witnesses, if application is made to him
by either party, even if the same evidence has already been adduced before the
arbitrators (but not the umpire).°°' The umpire may not take any part of the
evidence from the notes of the arbitrators, unless the parties both agree.*°? The
umpire must conduct the hearing impartially.°°*

>! Section 21(1) of the Arbitration Act 1996.

2 Section 21(2) of the Arbitration Act 1996.
3 Section 21(4) of the Arbitration Act 1996.
°4 Winteringham v Robertson (1858) 27 L.J. Exch. 301.
> Section 21(5) of the Arbitration Act 1996.
°° Section 24(1)(d)(ii) of the Arbitration Act 1996.
°°” Flag Lane Chapel v Sunderland Corp (1859) 5 Jurist. N.S. 894.
»* Fletamentos Maritimos SA v Effjohn International BV [1995] 1 Lloyd’s Rep. 311.
5° Under s.21(5) of the Arbitration Act 1996.
°° Orion Compania Espanola de Seguros v Belfort Maatschappyy Voor Algemen Verzeigringeen [1962] 2
Lloyd’s Rep. 257.
l Re Salkeld and Slater (1840) A. & E. 768.
°° Fletamentos Maritimos SA v Effjohn International BV (No.2) [1997] 2 Lloyd’s Rep. 302 at 305-306;
Re Jenkins and Leggo (1841) L.J. QB. 71; and Re Firth and Howlett (1850) 19 L.J. Q.B. 169.
°°? Re Hawley and North Staffordshire Railway (1848) 12 Jur. 389.
 Liabilities of Arbitrators 175

8. LIABILITIES OF ARBITRATORS

(a) Introduction

Immunity and claims. Arbitrators enjoy statutory immunity for their acts 4-152
and omissions** except where bad faith is shown. This gives arbitrators a defence
to many types of claim. This section considers this immunity and the “‘bad faith”
exception, and reviews the types of claims that have been made in the light of this
provision. Arbitral institutions have a similar immunity in respect of appoint-
ments.°”

Statutory immunity. Under s.29 of the Arbitration Act 1996, an arbitrator 4-153
is not liable for anything done or omitted to be done in the purported discharge
of his functions as arbitrator unless the act or omission is shown to have been in
bad faith.°°° This is a very broad statement, covering all types of claims. The
immunity extends to an employee or agent of an arbitrator.°°’ Previous attempts to
achieve immunity, such as a statutory instrument under the Supply of Goods and
Services Act 1982 and various contractual exclusions found in arbitration rules are
very much a secondary consideration.°°*

Bad faith. It is not possible to succeed with an action against an arbitrator 4-154
unless one can prove bad faith. “‘Bad faith” is not defined in the Arbitration Act,
but the expression is used from time to time, and has been used in the case of both
judges*® and regulatory authorities.*’” It was used in the case of judges to set
limits to their immunity at common law, but without definition. In the case of
regulatory authorities subject to a very similarly drafted statutory provision®’’ it
has been said to mean: “‘(a) malice in the sense of personal spite or desire to injure
for improper reasons, or (b) knowledge of absence of power to make the decision
in question’’.°”” In any action against an arbitrator the burden of proof is on the

°° Section 29 of the Arbitration Act 1996.

65 Section 74. See para.3—047 of the Arbitration Act 1996.
566 Section 29(1) of the Arbitration Act 1996. This immunity does not affect liability caused by
resigning: see para.4—158.
567 Section 29(2) of the Arbitration Act 1996.
568 Supply of Goods and Services Regulations (SI 1985/1), and exclusions such as those found in the
LCIA and CI Arb Rules.
56 Tn Sirros v Moore and others [1975] 1 Q.B. 118.
570 Financial Services Act 1986, s.186 and Melton Medes Ltd and another v Securities and Investments
Board {1995] 3 All E.R. 880.
°71 Financial Services Act 1986, s.187(3).
572 Melton Medes cited above in fn.580, at 889/890. The judge (Lightman J.) cited Wade, Admimstrative
Law (6th edn) p.782, itself citing Bourgoin SA v Ministry of Agriculture, Fishertes and Food (1985]
Q.B. 716. In administrative law “bad faith” is shown if the power to decide or act has been exercised
for purposes other than those for which the power was conferred or without regard to the relevant,
or only the relevant, considerations. The judge applied the restrictive meaning set out in the text
to misfeasance in public office—sometimes called “deliberate misuse of power”.
 176 The Tribunal

party asserting bad faith, and there would have to be cogent evidence to justify the
allegation.

(b) Types of claims

4-155 Professional negligence. “Professional negligence” is a generic term cov-

ering claims for damages against professionals, usually for breach of contract*”? or,
more rarely in recent years, for breach of a duty giving rise to liability in the tort
of negligence.°’* There is no case law on the professional negligence of arbitrators.
Where an arbitrator is extravagant or dilatory,*’> the remedy is limited to his
removal as an arbitrator and forfeiture of the right to fees, and does not of itself
give rise to a cause of action for damages for losses arising from the arbitrator’s
incompetence, such as the extra costs of rehearing the case before a fresh tribunal.
Other manifestations of incompetence may give rise to charges of serious irregu-
larity justifying the arbitrator’s removal, but similarly do not carry an express right
to damages. Professional negligence on its own is unlikely to surmount the
requirement to show bad faith if the arbitrator is to be held liable for damages; it
will have to be coupled with personal malice or deliberate excess of powers.

4-156 Serious irregularity. The arbitrator has a number of duties arising from the
manner in which the proceedings are conducted, breach of which can lead to his
removal and the setting aside of the award on the grounds of serious irregularity.*”°
The remedies for serious irregularity are limited to those provided by the Act.°7’
If an action were to be brought for damages based on serious irregularity com-
mitted by the arbitrator, statutory immunity°’* will provide a complete defence, in
the absence of some element of personal or deliberate misbehaviour as evidence of
bad faith.

4—157 Deliberate and serious misbehaviour. The following are recorded

instances’”’ of serious and deliberate breaches of an arbitrator’s duties:

© deliberately obstructing the proceedings by, for instance, failing to appear at

hearings without a reasonable excuse;

@ refusing to participate in the tribunal’s deliberations; and

*? Bolam v Friern Hospital Management Committee [1957] 1 W.L.R. 582; Supply of Goods and Services
Act 1982, s.13.
°* Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] A.C. 465, and numerous authorities,
including Henderson v Merrett Syndicates Ltd [1995] 2 A.C. 145,
°” Section 24(1)(d)(ii) of the Arbitration Act 1996, see also ss.33 and 68(2) of the Arbitration Act
1996.
576
See paras 8-072 et seq.
577 See paras 8-113 et seq.
578 ST 1985/1, noted at para.4-153.
*”° Collected by VV Veeder in ICCA Congress Series No.5, Kluwer 1991.
 Liabilities of Arbitrators 177

@ “leaking” details of the tribunal’s deliberations before the publication of the

award.

It may be possible to show bad faith in each of these examples. Further, if the
rules governing the arbitration do not provide a remedy for such conduct, an
application could be made to the court to remove the arbitrator on the basis that
he has refused or failed properly to conduct the proceedings.**?

Resigning. Resignation, previously a difficult subject, is now governed by 4-158

statute.°*' Parties are free to agree with an arbitrator the consequences of his
resignation as regards his entitlement (if any) to fees or expenses, and any liability
incurred for resigning.°*? If or to the extent they do not agree, the following will
apply. An arbitrator who resigns his appointment may, on notice to the parties,
apply to the court for relief from any liability incurred by the resignation, and for
an order about his entitlement to fees or expenses.*** The court can grant relief
from liability on whatever terms it thinks fit, if satisfied it was reasonable in all the
circumstances for the arbitrator to resign.°*t This provides a structure for settling
disputes about resignation, but offers no guidance on how it would be operated.
What would be reasonable? Would it, for instance, be reasonable for a tribunal to
resign when in disagreement with both the parties about the procedure?**’ Or
would it be reasonable for an arbitrator to resign on having ceased to be a self-
employed lawyer and accepted full-time employment as, say, a judge or an
ambassador?**** In this latter case, should the arbitrator have discussed the risk
that he might have to resign before accepting an appointment? Whatever the
circumstances, both the parties will be caused expense and delay in reconstituting
a tribunal and appraising that new tribunal of all the issues, and where part only
of a tribunal resigns the other members will also be put to inconvenience. Parties
do not expect to incur this extra expense which may exceed any amount paid to the
resigning arbitrator. Thus, the court may be asked not to limit its order to the
repayment of any fees and expenses already paid to the resigning arbitrator. The
use of the word “liability” in s.25 of the Act suggests that his responsibility for
resignation without reasonable cause**? may go beyond repayment of any fees and
expenses, and s.29 of the Act (immunity) does not affect this liability.**”

580 Section 24(1)(d)(i) of the Arbitration Act 1996. See para.7—-121.

581 Section 25 of the Arbitration Act 1996, see para.7—-133.
582 Section 25(1) of the Arbitration Act 1996.
583 Section 25(3) of the Arbitration Act 1996.
584 Section 25(4) of the Arbitration Act 1996.
585 See para.5—056.
5854 VV Veeder in ICCA Congress Series No.5, Kluwer 1991, topic 8, refers to a case where a sole
arbitrator faced action after resigning to take up an appointment to a public office.
586 As is the position under Austrian law, see Werner Melis, The Immunity ofArbitrators (ed. Lew,
Lloyd’s of London Press Ltd, 1990).
587 Section 29(3) of the Arbitration Act 1996.
 178 The Tribunal

9. CHALLENGE AND TERMINATION OF AUTHORITY OF

ARBITRATORS

(a) Termination generally

4-159 Tribunal’s authority continues until terminated. Once a tribunal

has been appointed, it continues in place with full authority until that authority 1s
terminated. Termination comes about by operation of law, by act of the parties, by
act of an appointing authority, or by a court order.

(b) Termination by operation of law

4-160 Death of arbitrator. The authority of an arbitrator is personal and ceases on

his death.°** There are statutory provisions for replacement in the absence of an
agreed appointment procedure.**”

4-161 Death of party appointing an arbitrator. Unless otherwise agreed by

the parties, the death of the person by whom an arbitrator was appointed does not
revoke the authority of an arbitrator.°”°

4-162 Insolvency. The insolvency of an arbitrator is unlikely to affect his formal

capacity to continue to act.*”!

4-163 Discharge of duty. When an arbitrator has made his final award on all the
issues submitted to him for decision, he has no further function, and his authority
over the parties has come to an end.*””

(c) Termination by act or omission of the arbitrator

4-164 Resigning. An arbitrator’s authority terminates on his resignation,*?> whether

the parties accept it or not.

°8 Section 26(1) of the Arbitration Act 1996. See para.4—015.

*° Section 27 of the Arbitration Act 1996. See paras 4-040 and 7-130.
°° Section 26(2) of the Arbitration Act 1996, See para.3—026 generally on the effect of the death of a
party.
*°! There is no authority in support of this statement, but as a matter of principle it seems correct. For
the effect on arbitrations of the insolvency of one of the parties, see paras 3-027 et seq.
*°2 See paras 5-218 et seg. and 6-166 et seq.
°°’ This is the necessary implication of s.25 of the Arbitration Act 1996, See also DAC report, paras
111 et seg. The theory used to be that an arbitrator could not resign without the consent of the
parties: see para.4—158.
 Challenge and Termination of Authority of Arbitrators 179

Umpire’s entry into reference. Where the parties have agreed that there 4-165
is to be an umpire, the arbitrators will be replaced by the umpire usually upon
notice that the arbitrators cannot agree on a matter relating to the arbitration.°”*
Whenever replacement occurs, the arbitrators’ authority will then be termi-
nated.

(d) Termination by act of the parties

Parties may agree to terminate tribunal’s authority. Parties 4-166

acting together can remove the arbitral tribunal in whole or in part, or agree to
revoke the reference itself.°”> A party cannot unilaterally terminate the authority
of a arbitrator by withdrawing the claim.°’® A party who wishes to remove an
arbitrator must challenge the appointment under any procedure in the arbitration
agreement or rules, or in the absence of such a procedure, apply to the court for
revocation of the arbitrator’s authority.*’’

Settlement. The parties may also terminate the tribunal’s authority by settling 4-167
the dispute. The terms of the settlement must be examined to assess their effect
on the arbitration proceedings. In particular, the tribunal will want to be satisfied
that all claims in the arbitration have been disposed of in the settlement. Unless
otherwise agreed by the parties, it is still for the tribunal to terminate the
“substantive” proceedings.°’* The tribunal will record the terms of settlement in
the form of an agreed award, if the parties so request and the tribunal does not
object.°°”

(e) Termination by appointing authority

Termination in accordance with rules. An appointing authority can 4-168

remove an arbitrator, if the removal is in accordance with its rules. For instance,
under the ICC Rules,°° challenges can be made, “‘for an alleged lack of independ-
ence or otherwise”, to the ICC International Court of Arbitration,’ and if the
challenge is accepted, that same body may replace the arbitrator.°”*

54 Section 21 of the Arbitration Act 1996 provides that the parties are free to agree on, among other
things, when the umpire is to replace the other arbitrators on the tribunal (s.21(1)(b)) but failing
agreement the replacement occurs when the arbitrators give notice of their disagreement
(s.21(4)).
55 Section 23 of the Arbitration Act 1996, see para.5—228.
5% See observations made by the Court of Appeal in John Roberts Architects Ltd v Parkcase Homes
(No.2) Ltd [2006] EWCA Ciy 64 at [18].
°°7 See paras 4-051 and 7-074.
598 Section 51 of the Arbitration Act 1996, cf. Model Law, Art.30: (see Appendix 4).
5° Section 51(2) of the Arbitration Act 1996, DAC report, para.24, see para.6—025.
eco" Article 11Ie
601 See para.4—051.
CONC MRUles mwAntal Zale
 180 The Tribunal

(f) Termination by court order

4-169 Removal and revocation of authority. These remedies are discussed in

Gi

63 See paras 7-110 et seq.

 CHAPTER 5

‘THE CONDUCT OF THE REFERENCE

IEEINDRODW GION ese reiss 5—001 5. ASCERTAINING THE

(a) Contents of the chap- IRROGEDUREWscoyr cutee 5—089
US Beleop rencontre 5—001 (a) General considera-
(b) Application of statu- TONS Rens. ke ca eee eeecer 5-089
tory provisions........ 5-002 (b) Directions from the
2. COMMENCING THE tribunal in the course
ARBITRATION ..........000008+ 5—003 ‘Of thesneference -..: 5-111
(a) When to commence (c) Terms of the arbitration
proceedings:4......:... 5-003 ABNECIMIENt ess costes: 5-119
(b) Time limits for com- (d) Defining the issues... 5-120
mencing proceedings 5—005 (@)plvid encores eee 5-130
(c) Manner of commen- (f) Language(s) of the ref-
cing proceedings... 5-015 CETIGS Pe nertots cae ae 5-157
3. Duties oF THE TRI- (g) Administrative mat-
BUNAL IN RELATION LOL Stree ce reece 5-161
TO THE CONDUCT (h) Privacy and the obliga-
tion of confidentia-
(a) Duties under section toy seen erectte 5=172
33 of the Arbitration (i) Enforcement of proced-
HNC WONG, ssepcodconancec: 5-032 Ula lWOnGeRSy ces eee 5-181
(b) Natural justice and 6. TieraHIEARING?.--.2--e- 5-186
HEMNG TRESS o aotnencansasascse 5-038 (a) Attendance and repres-
(c) Relationship between CUONPA TOM soca anccasoone 5-186
duties, principles and (b) The course and struc-
party autonomy ...... 5-055 ture of the hearing.. 5-197
4. PRELIMINARY CoNSID- (c) Notes of proceedings 5-206
RADIOS peer eee se enretece
isis 5-057 7. TERMINATION OF THE REF-
(a) Rules applicable to REINGE: coeeetine cee 5-208
substance of the dis- (a) Termination following
DUC eee or eh Be 5-057 apiinaleawal diester. 5-208
(b) Jurisdiction .............. 5—060 (b) Dismissal for want of
(c) Seat of arbitration .... 5—071 prosecution............. 5-214
(d) Interim measures ..... 5-074 (c) Termination by mutual
(ec) Provisional relief....... 5-085 CONSEME senses 5-218

1. INTRODUCTION

(a) Contents of the chapter

This chapter deals with the conduct of a reference to arbitration. It begins by 5_001
looking at when and how to commence arbitral proceedings, including a con-
sideration of the relevant statutory requirements and time limits. It then addresses
 182 The Conduct of the Reference

the general duties of the tribunal in conducting the reference and in particular
those imposed by s.33 of the Arbitration Act 1996. The following section sets out
some preliminary matters which may need to be considered by the tribunal at the
outset of the reference, including the important matter of jurisdiction, and then
looks at how the tribunal should ascertain the procedure to follow in the arbitra-
tion. The hearing itself is also considered, and in particular what form the
procedure at the hearing might take. Finally, this chapter looks at termination of
the reference.

(b) Application of statutory provisions

5—002 This chapter focuses on the practical aspects of conducting an arbitration and
considers the many statutory provisions in the Arbitration Act 1996 which are
relevant in this regard. It is worth emphasising, however, that these statutory
provisions relating to the tribunal’s conduct of the arbitration only apply where the
seat of the arbitration is in England, Wales and Northern Ireland.' They do not
generally apply to the conduct of an arbitration by a tribunal in any other
jurisdiction, even if English law is the substantive law applied to the merits of the
dispute. The two exceptions to this are the provisions relating to the separability
of the arbitration agreement and the death of a party.2 The court may, however,
exercise certain of its powers even where no seat has been designated or deter-
mined.*

2. COMMENCING THE ARBITRATION

(a) When to commence proceedings

5—003 Existence of a dispute. Normally, it will only be appropriate to commence

arbitral proceedings once a dispute has arisen between the parties.t This is
reflected in the fact that most arbitration agreements refer specifically to ‘“dis-
putes” or “differences” being submitted to arbitration, and in such cases a

' Section 2(1) of the Arbitration Act 1996. See further paras 2-100 et seg. above in relation to
designation of the seat of arbitration.
* Section 2(5) of the Arbitration Act 1996, Separability is dealt with in s.7 of the Act and death of
a party in s.8.
* Section 2(2)-(4) of the Arbitration Act 1996.
* Common sense also suggests that it will usually be precipitate to set in motion arbitral proceedings
where the proposed respondent has not yet had an opportunity to accept liability or comply with
whatever is being demanded of him, unless the claimant is facing an approaching time bar and needs
to start arbitration proceedings to protect his position.
° See para.2-077 above. Under the Arbitration Act 1996 “dispute” includes any difference, see
s.82(1) of the Arbitration Act 1996, See though dicta in Amec Civil Engineering Lid v Secretary of
State for Transport [2005] 1 W.L.R. 2339 suggesting the words “dispute or difference” might mean
something more than “‘dispute”’ alone.
 Commencing the Arbitration 183

tribunal will not have jurisdiction to deal with the matter until a dispute or
difference has arisen which has been referred to them for determination. The
question whether there exists a dispute has been considered in a number of recent
cases. It has arisen in particular in the context of applications to stay court
proceedings due to the existence of an arbitration agreement,’ the argument being
that no stay is necessary if there is no dispute between the parties to be referred
to arbitration because the claim is unanswerable.’ This argument has been firmly
rejected and a claim that has not been admitted gives rise to a dispute however
unanswerable that claim is said to be.* The court adopts an inclusive rather than
a restrictive interpretation of what constitutes a dispute.’ Indeed so long as it can
reasonably be inferred that the claim is not admitted that will suffice to constitute
a dispute.'° Even where the claim is admitted but a party seeks to defer the time
for payment that will constitute a dispute if the revised payment terms are not
accepted."!

Dispute or claim? The question whether there is a dispute or merely a claim 5-004
may also arise where a party wishes to include a claim within the terms of an
existing reference covering other, clearly disputed, issues. The courts tend to take
a fairly broad view of what constitutes a dispute in this context also. In Lesser
Design & Build Ltd v University of Surrey'* claims made under a JCT building
contract were held to be “‘in dispute” simply because they were not agreed: the
claims had not actually been rejected and the time for payment had not yet arrived.
By contrast, however, the court felt unable in the same case to extend the reference

® See, for example, Ellerine Brothers (Pty) Lid v Klinger (1982) 1 W.L.R. 1375; Halki Shipping Corp
v Sopex Oils Ltd (The ‘“Halki”) [1998] 1 Lloyd’s Rep. 465. The existence of a dispute is also
sometimes an issue in the context of references to an engineer, or to an adjudicator under s.108(1)
of the Housing Grants, Construction and Regeneration Act 1996: see for example London &
Amsterdam Properties Ltd v Waterman Partnership Ltd {2003} EWHC 3059; [2004] B.L.R. 179; Amec
Civil Engineering Ltd v Secretary of Statefor Transport [2005] EWCA Civ 291; [2005] 1 W.L.R. 2359)
Beck Peppiatt Ltd v Norwest Holst Construction Ltd [2003] EWHC 822; (2003] B.L.R. 316.
7 As Rix LJ. pointed out in Amec Civil Engineering Lid v Secretary of State for Transport {2005]
EWCA Civ 291; [2005] 1 W.L.R. 2339 at 2358 if arbitration is sought and it turns out there is no
dispute because the claim is admitted then matters are unlikely to proceed. On the other hand if the
claim is disputed the courts are unlikely to be receptive to an argument that the arbitration was not
justified because there was no dispute at the time it was started.
8 Halki Shipping Corp v Sopex Oils Ltd (The “Halki”) [1998] 1 Lloyd’s Rep. 465. See also the various
decisions in relation to what constitutes a dispute in the context of adjudication: Sindall Lid v
Solland (2001) 80 Con.L.R. 152; Beck Peppiatt Lid v Norwest Holst Construction Ltd [2003] EWHC
822; [2003] B.L.R. 316; CIB Properties Lid v Birse Construction Ltd [2004] EWHC 2365; [2005] 1
WLR. 2252; London & Amsterdam Properties Ltd v Waterman Partnership Ltd [2003] EWHC 3059;
[2004] B.L.R. 179.
° Amec Civil Engineering Ltd v Secretary of State for Transport [2005] EWCA Civ 291. See also the
propositions advanced by Jackson J. at first instance in that case at [2004] EWHC 2339.
Amec
1 Collins (Contractors) Ltd v Baltic Quay Management (1994) Ltd [2004] EWCA 1757 at [63];
» CLC
Civil Engineering Ltd v Secretary of State for Transport [2005] EWCA Civ 291; Wealands
Contractors Ltd [1999] 2 Lloyd’s Rep. 739; Halk: Shipping Corp v Sopex Oils Ltd (The “Hatki"’)
[1998] 1 Lloyd’s Rep. 465.
"| Bxfin Shipping (India) Ltd v Tolani Shipping Co Lid [2006] EWHC 1090.
1256 BileRe wor
 184 The Conduct ofthe Reference

to matters which had not even been claimed at the time the arbitration was
commenced.!?

(b) Time limits for commencing proceedings

5-005 The procedures for commencing an arbitration and constituting the tribunal will
depend upon what the parties have agreed (or not agreed) as the first step or steps
to be taken.'* The parties are also free to agree when the arbitration is to be
regarded as having commenced, both for the purposes of the Arbitration Act 1996
and for limitation purposes,'> failing which statutory provisions apply.'® The
parties are also free to agree on the method to be adopted for reckoning periods
of time, but again if there is no agreement then statutory provisions apply.’
Identification of the date of commencement may be of critical importance to the
parties in view of contractual or statutory time limits for commencement of the
arbitration.'* Once arbitration is commenced time stops running and there can be
no question of the time limit subsequently expiring as regards causes of action
included in the reference.'°

5—006 Contractual time limits. A contractual time limit, whether contained in

an arbitration agreement or some other provision of the contract, or indeed in
arbitration rules referred to in the arbitration agreement, may (1) impose a time
limit for commencing arbitration proceedings, and/or (2) provide that a claim
shall be barred or extinguished if arbitration is not commenced within the time
limit.2° These provisions are not necessarily found together. The parties’ agree-
ment may limit the time for commencing arbitration without barring or extin-
guishing the claim, so that a party who is out of time loses his right to arbitrate
and will be confined to whatever remedy, if any, is available in the courts.?!

"8 See also A/S Det Dansk-Franske Dampskibsselskab » Compagnie Financiére ‘d’Investissements Transat-
lantiques SA (Compafina) (The “Himmerland”’) [1965] 2 Lloyd’s Rep. 353 at 360; Cruden Construc-
tion Ltd v Commission for the New Towns (1995) C.L.L.L. 1035; Ellerine Brothers (Pty) Ltd v Klinger
[1982] 1 W.L.R. 1375 and Carillion Construction Ltd v Devonport Royal Dockyard Ltd (2003] B.L.R.
79 as to what constitutes a “dispute”. The wording of the notice of arbitration may however
encompass claims arising subsequently to the commencement of the arbitration: see Harper
Versicherungs AG v Indemnity Marine Assurance Co Lid [2006] EWHC 1500 at [53] and para.5—026
below.
™ Emson Contractors Ltd v Protea Estates Lid [1987] 39 B.L.R. 126.
' Section 14(1) of the Arbitration Act 1996.
' Section 14(2)-(5) of the Arbitration Act 1996: see para.5—021 below.
” Section 78 of the Arbitration Act 1996.
See for example Lafarge (Aggregates) Ltd v Newham LBC [2005] EWHC 1337 (Comm).
" See Leif Hoegh & Co A/S v Petrolsea Inc (The ‘World Era”) [1992] 1 Lloyd’s Rep. 45; Triad
Shipping Co v Stellar Chartering & Brokerage Inc (The “Island Archon’’) [1993] 2 Lloyd’s Rep.
388.
*’ In construction contracts it is common to find provisions for the initial determination of disputes
(for example by an adjudicator under the contract) which become final and binding if their decision
is not referred to arbitration within a specific period of time. Such provisions are strictly construed:
Lafarge (Aggregates) Lid v Newham LBC [2005] EWHC 137 (Comm).
*! Such clauses are now exceptional, per Hobhouse J. in Leif Hoegh & Co A/S v Petrolsea Inc (The
“World Era’) (1992]| 1 Lloyd’s Rep. 45 at 50.
 Commencing the Arbitration 185

Alternatively, and much more commonly, the parties’ agreement may make com-
pliance with a time limit a condition of any claim, without limiting the operation
of the agreement to arbitrate, so that a claimant who is out of time may still have
a right to arbitrate,** but the respondent may raise a time bar by way of defence
to the claim.*? If the contract does not make clear which of the above is intended
but simply requires notice of a claim to be given or arbitration to be commenced
within a certain period of time, then if the notice is not given or the arbitration is
not commenced the claim will be barred.” It is possible for a respondent to waive
any objection to arbitration, while still relying on a limitation clause as barring or
extinguishing the claim.*°

Impossibility of compliance. Even where a claim could not have been 5—007
brought forward within the contractual time limit, for example because the cause
of action giving rise to the claim had not arisen or come to the knowledge of the
claimant until too late to enable him to comply, the claim may still be barred.*°
However time bar clauses will be construed strictly against the party relying upon
them.”” A time bar clause can be unilateral.’*

Tribunal’s power to extend time. Certain arbitration rules give the 5—008
tribunal or an institution a discretion to extend the time for commencing arbitra-
tion proceedings or for the appointment of an arbitrator.’ If there is a power for
Hf

22 See though JT Mackley & Co Ltd v Gosport Marina Ltd [2002] EWHC 1315 where a declaration
of invalidity of a notice of arbitration was sought because, amongst other things, it did not comply
with the parties’ contractually agreed time limit. The declaration was granted and the court
endorsed the need to comply with the requirements of the arbitration agreement, although the
decision was based upon failure to comply with a condition precedent to commencing the
arbitration rather than failing to comply with the time limit.
23 See also, for example, the JCT Standard Form of Building Contract 1998 edition (now replaced by
2005 edition) which provides by cl.30.9.3 that the final certificate is conclusive evidence as to the
adjustments to be made to the contract sum unless arbitration is commenced within 28 days of its
receipt. An attempt to re-open the certificate thereafter would be met by a defence based on further
evidence being barred by virtue of the conclusive evidence provision: McLaughlin & Harvey Ple v
P&O Developments Ltd {1991] 55 B.L.R. 101.
24 Metalfer Corp v Pan Ocean Shipping Co Ltd 1998] 2 Lloyd’s Rep. 632; Smeaton Hanscomb & Co Lid
v Sassoon I Setty, Son & Co [1953] 2 Lloyd’s Rep. 580; Metalimex Foreign Trade Corp v Eugenie
Maritime Ltd [1962] 1 Lloyd’s Rep. 378.
25 See generally Aktiebolaget Legis v V Berg & Sons Ltd [1964] 1 Lloyd’s Rep. 203 at 212-213 where
Roskill J. (as he then was) approved the position summarised in an earlier edition of this book;
Smeaton Hanscomb €§ Co Ltd v Sassoon I Setty, Son & Co (No.1) [1953] 2 Lloyd’s Rep. 580.
s
26 4/§ Det Dansk-Franske Dampskibsselskab v Compagnie Financiere d'Investissements Transatlantique
of
SA (Compafina) (The ‘““Himmerland”’) [1965] 2 Lloyd’s Rep. 353. The court noted that cases
undue hardship could be dealt with by what is now s.12 of the Arbitration Act 1996. See paras 5—009
and 7-071 et seq. below. See also Smeaton Hanscomb & Co Lid v Sassoon I. Setty, Son & Co (No.1)
[1953].
27 Minister of Materials v Steel Brothers & Co Tbr Ny ARIE ARS. Gee):
a clause may
28 WJ Alan and Co Ltd v El Nasr Export and Import Co [1971] 1 Lloyd’s Rep. 401. Such
jurisdictions.
give rise to public policy objections under the New York Convention in certain
Development Co Lid
2° See, e.g. GAFTA 125, r.21 and Ets Soules & Cie v International Trade and
[1979] 2 Lloyd’s Rep. 122.
 186 The Conduct of the Reference

the tribunal or an institution to grant an extension of time, this must be pursued

prior to any application to court under s.12 of the Arbitration Act 1996.*°

5—009 Court’s power to extend time. Section 12 of the Arbitration Act 1996*!
empowers the court to extend contractual (but not statutory) time limits for the
commencement of arbitration proceedings. It may do so only where it is satisfied
that (a) the circumstances are such as were outside the reasonable contemplation
of the parties when they agreed the provision in question, and that it would be just
to extend the time, or (b) that the conduct of one party makes it unjust to hold the
other party to the strict terms of the provision in question.*” Any available arbitral
process** for extending time must first be exhausted. The court can extend time
even if an extension was refused following the arbitral process, but it will be a rare
case indeed where it will do so.**

5-010 Statutory time limits. Statutory time limits, whether imposed by the
Limitation Act 1980 or any other limitation enactment, apply to arbitrations as
they do to legal proceedings.*> The effect of a statutory time limit is to provide a
procedural bar to the remedy which has to be raised by way of defence to the
claim. It does not go to the jurisdiction of the tribunal, but it does provide a
defence to the claim.*°

5-011 Contractual claims and statutory time limits. Where the claim
being submitted to arbitration lies in contract*’ and a statutory time limit is raised,
it is for the claimant to show prima facie evidence of (a) the date upon which the
arbitration commenced and (b) a breach of contract, causally connected with the
damage sought to be recovered, and accruing within the six years immediately
preceding commencement. It is then for the respondent to show, if he can, either
that (a) though apparently flowing from the breach complained of, the damage in

8° Section 12(2) of the Arbitration Act 1996.

*! Replacing and substantially amending s.27 of the Arbitration Act 1950: see paras 7-067 et seg.
below.
*? See paras 7-067 et seq. below.
** Such as an application to the tribunal or to an administering institution with power to grant the
extension sought.
+ See further para.74(ii) of the DAC report.
*® Section 13(1) of the Arbitration Act 1996, A detailed analysis of limitation periods is beyond the
scope of this book and the reader is referred to Limitation Periods (5th edn) by Andrew McGee
(2006).
’ Leif Hoegh & Co A/S v Petrolsea Inc (The “World Era”) [1992] 1 Lloyd’s Rep. 45. As explained
in that case, the existence of a time bar does not deprive the arbitrator of jurisdiction, but in the
context of a party seeking to expand his existing claim in the arbitration after the time limit has
elapsed, there may well also be want of jurisdiction because the relevant cause of action was not
included in the original reference.
*7 Different considerations may apply to certain claims in tort which are actionable only on proof of
damage, for example negligence.
 Commencing the Arbitration 187

reality flowed from some earlier breach outside the limitation period, or (b) that
the arbitration was in fact commenced on some later date.*8

No extension of statutory time limits. The court’s power to extend 5-012

time under s.12 of the Arbitration Act 1996 does not extend to statutory time
limits.*?

Award set aside. Where an award is, in whole or in part, set aside or declared 5-013
to be of no effect,*” the court may further order that the period between the
commencement cf the arbitration and the date of the court’s order shall be
excluded in computing the limitation period for that dispute.*!

Scott v Avery clauses. A term in an arbitration agreement to the effect that 5-014
no cause of action shall accrue until an award is made will not be effective to
extend the limitation period in respect of the matter to be referred to arbitration.
For limitation purposes, the cause of action is deemed to have accrued at the time
when it would ordinarily have done so but for that term in the agreement.”

(c) Manner of commencing proceedings

Contractual provisions. There may be specific provision in the arbitration 5—015

agreement as to the manner of commencement of the arbitration and it is
important that this is followed.** The particular step which is to be performed in
order to commence the proceedings may, for example, be the making of a claim,**
the appointment of an arbitrator,* the notification of such appointment to the
other party, the sending of a notice to the other party requiring him to agree to
the appointment of an arbitrator, or the serving of a request for arbitration.*® The
precise formulation may reflect the type of arbitration or the constitution of the
tribunal.*’” Where, for example, the arbitration is to be conducted in accordance
with specific arbitration rules, there may well be particular steps to be taken to

38 NV Stoomv Maats “De Maas” v Nippon Yusen Kaisha (The “Pendrecht’’) [1980] 2 Lloyd’s Rep.
56.
%° Section 12(5) of the Arbitration Act 1996.
#9 See below paras 8-153 et seg.
41 Section 13(2) of the Arbitration Act 1996.
* Section 13(3) of the Arbitration Act 1996. For Scott v Avery clauses generally see para.2—022.
+3 See para.5—019 below for the consequences of failure to comply with contractual provisions.
+ No particular form of words is required for making a claim provided it is clear that a claim is being
made: Cathiship SA v Allanasons Ltd (The “Catherine Helen”) {1998} 3 All E.R. 714.
* See generally paras 4-024 et seq. above.
+6 A “request for arbitration” is required where, for example, the ICC Rules have been incorporated
into the arbitration agreement, ICC Rules Art.4(1). It then substitutes for a “notice of arbitration”:
see paras 5022 and 5—023 below.
47 je. whether each of the parties is to appoint an arbitrator, or both parties are to concur in the
appointment of a sole arbitrator.
 188 The Conduct of the Reference

commence proceedings under those rules.** The claimant may have validly com-
menced arbitration proceedings under the 1996 Act even if the specific steps
required by those arbitration rules are not strictly complied with.”

5-016 Preliminary steps to be taken. The arbitration agreement may also

provide that certain steps have to be taken prior to commencing arbitration
proceedings. For example, the disputes clause may provide for a tiered process of
dispute resolution. This typically requires the dispute to be submitted to partic-
ular officers within the corporate structure of the parties and, failing agreement
between them, to mediation before resort is had to arbitration. When drafting
such provisions it is vital to ensure that there are clear time limits for each step of
the process so as to be certain when the dispute can be escalated to the next
stage.°?
Where such preliminary steps are expressed in mandatory terms so as to
constitute a condition precedent to the right to arbitrate they must be complied
with.°’ In many cases however they will not be mandatory and it is then possible
for the claimant to commence arbitration even without complying with them.*”

S-Ul7 Service of claim not a condition precedent. There is no implied

term of an arbitration agreement that service of a claim on the proposed respon-
dent is a precondition to a valid request for arbitration.°* It may, of course, be an
express term.

5—018 Absence of contractual provision. In many cases the arbitration agree-

ment will be silent as to the steps to be taken. In these circumstances the statutory
provisions of s.14 of the Arbitration Act 1996 apply and the arbitration must be
commenced by the service of a notice of arbitration on the other party.°* The
notice must be in writing*’ and should follow as closely as possible the terms of
s.14 of the Arbitration Act 1996.

5—019 Consequence of failure to comply with contractual provi-

sions. The consequence of failure to comply with a contractual requirement for
commencing the arbitration is that the arbitration will not have been validly

** Under the ICC Rules, for example, a party must submit a Request for Arbitration, containing
information specified in the rules, to the Secretariat of the ICC Court.
See para.5—021 below.
°°? See para.2-036 above.
°! See para.2—021 above. See also JT Mackley & Co Lid v Gosport Marina Ltd [2002] EWHC 1315
where, amongst other things, failure to comply with a condition precedent rendered the arbitration
notice invalid.
°* Although not an arbitration case, see Halifax Financial Services Lid v Intuitive Systems Ltd [1999]
1 All E.R. (Comm) 303.
* Paul Smith Lid v H&S International Holding Inc [1991] 2 Lloyd’s Rep. 127.
** See para.5—021 below.
» Section 14(3) to (5) of the Arbitration Act 1996.
 Commencing the Arbitration 189

commenced. This may be of crucial importance if a limitation period has subse-

quently expired, because the claimant will not be able to remedy the position by
having a second go at commencing the proceedings.*°

Remedying default. Assuming that there is no limitation point to be taken, 5-020

in the event that the arbitration has not been validly commenced the safest course
is to serve a further notice complying with the contractual requirements. Alter-
natively the claimant may be able to remedy any default so that the proceedings
can go forward as from the date on which the contractual requirements were met.
For example, if the arbitration clause requires service of a notice of arbitration and
the appointment of an arbitrator, and the claimant served the notice but failed to
appoint, he may subsequently make the appointment and the arbitration will
proceed as from the date the contractual requirements are fulfilled.°’ The pro-
posed respondent may of course waive any objection to the failure to comply with
the contractual requirements,** and the arbitration will then proceed as from the
original date. The respondent may also lose the right to object if he takes part in
the reference without making his objection known.”?

Commencement for limitation purposes. The parties are free to 5—021

agree when an arbitration is to be regarded as commencing both under the
Arbitration Act 1996 and for limitation purposes.® In the absence of agreement
the provisions of s.14 of the Arbitration Act 1996 apply. Under that section an
arbitration is treated as being commenced when a notice in writing is served®' on
the other party requiring him to agree to the appointment of an arbitrator or, if the
parties are each to make an appointment, requiring him to appoint an arbitrator.°
The party giving the notice does not have to already have appointed his own
arbitrator. Where, however, the arbitration agreement specifies the person to be
appointed as arbitrator, the arbitration is treated as being commenced when a
notice in writing is served on the other party requiring him to submit the dispute
to that person.* Finally, if the arbitrator is to be appointed by someone other than
a party to the arbitral proceedings, such as an arbitral institution, the arbitration
is treated as being commenced when notice in writing is given to that other person

56 Unless there is some arbitral process available for doing so or he can persuade the court to extend
time under s.12 of the Arbitration Act 1996: see paras 7-067 et seq. below.
57 Assuming that the arbitration clause did not stipulate that the appointment must be stated in the
notice.
58 For example by proceeding to agree the appointment of the tribunal.
°° Section 73 of the Arbitration Act 1996.
6 Section 14(1) of the Arbitration Act 1996.
61 As to service, see s.76 of the Arbitration Act 1996: see para.5—028 below.
° Section 14(4) of the Arbitration Act 1996, replacing s.34(3)(a) of the Limitation Act 1980. An error
as to the number of arbitrators to be appointed will not necessarily invalidate the notice of
arbitration: see Swiss Bank Corp v Novorissiysk Shipping Co (The ‘Petr Shmidt”’) [1995] 1 Lloyd’s
Rep. 202.
be a
63 Petredec Ltd v Tokomaru Kaiun Co Ltd [1994] 1 Lloyd’s Rep. 162. There may, however,
of
contractual requirement to do so, e.g. the Centrocon arbitration clause bars the claim in default
appointment of a claimant’s arbitrator within a stipulated time.
1980.
6 Section 14(3) of the Arbitration Act 1996, replacing s.34(3)(b) of the Limitation Act
 190 The Conduct of the Reference

requesting him to make the appointment.°° It is prudent to send to the respondent

a copy of the notice addressed to the person requested to make the appointment
as this may avoid arguments about when the notice was given.

5-022 Notice of arbitration pursuant to s.14. The “notice” referred to in

s.14(3) to (5) of the Arbitration Act 1996 must be in writing and its contents must
comply with the requirements for commencing arbitration set out in the subsec-
tions. The requirements of s.14 will be interpreted broadly and flexibly.°° Prior to
the Arbitration Act 1996 there were a number of cases which addressed the form
of notice to be given in order to commence arbitration for the purposes of s.34(3)
of the Limitation Act.®’ This line of authority has been superseded by s.14.°°

5-023 The form of the notice.® Subject to complying with the requirements of
s.14 of the Arbitration Act 1996,” there are otherwise no specific requirements as
to the form of the notice.’! It must be in writing” and is often simply in the form
of a letter’’ from the proposed claimant to the proposed respondent. Provided the
notice is objectively clear about who is being asked to do what, the giving of a
notice addressed to a proposed arbitrator and merely copied to the other party to
the arbitration would be sufficient.”* It is not unusual to impose a time limit for
compliance, failing which, if appropriate, an application can be made to court to
have the arbitrator appointed.”

5—024 The parties to the notice. The notice of arbitration must identify the party
or parties to whom it is addressed. Failing correctly to do so, or naming parties not

> Section 14(5) of the Arbitration Act 1996.

°° Seabridge Shipping AB v AC Orssleff's Efif's A/S [1999] 2 Lloyd’s Rep. 685. Thomas J. indicated
that s.14 of the Act will be construed broadly enough to include an implied request to appoint an
arbitrator. See also Atlanska Plovidba v Consignaciones Astrurianas SA (The “Lapad”’) [2004]
Vir Gal 2713)
7 Nea Agrex SA v Baltic Shipping Co Ltd [1976] 1 Q.B. 933; Surrendra Overseas Ltd v Government of
Sri Lanka [1977] 1 Lloyd’s Rep. 653; Peter Cremer GmbH & Co v Sugat Food Industries Ltd (The
“Rimon”’) [1981] 2 Lloyd’s Rep. 640; Petredec Lid v Tokumaru Kaiun Co Lid (The ‘Sargasso’’)
[1994] 1 Lloyd’s Rep. 162; Allianz Versicherungs AG v Fortuna Co Inc [1999] 2 All E.R. 625; Charles
M Willie and Co (Shipping) Lid v Ocean Laser Shipping Lid (The ‘“‘Smaro’’) [1999] 1 Lloyd’s Rep.
225; cf. Vosnoc Lid v Transglobal Projects Ltd [1998] 1 W.L.R. 101.
per Thomas J. in Seabridge Shipping AB v AC Orssleff’s Efif's A/S {1999] 2 Lloyd’s Rep. 685.
Reference to the pre-Act cases would, he said, be “‘a retrograde step”.
® See also para.5—015 with regard to any contractual requirements.
” ThomasJ. in Seabridge Shipping AB v AC Orssleff’s Efif’s A/S [1999] 2 Lloyd’s Rep. 685 considered
but left open the question whether methods for commencing arbitration other than those set out in
s.14 were permitted.
”’ Blackpool Borough Council v F Parkinson Lid, 58 B.L.R. 85.
” Sub-sections 14(3) to (5) of the Arbitration Act 1996 specifically contemplate notice in writing but
any agreement pursuant to s.14(1) of the Arbitration Act 1996 would also need to be “in writing”
pursuant to s.5(1) of the Arbitration Act 1996. Section 5 gives the expression ‘“‘in writing” a broad
meaning.
* Tt can also be in the form of an email: Bernuth Lines Lid v High Seas Shipping Ltd [2005] EWHC
3020.
™ Seabridge Shipping AB v AC Orssleff’s Efif's A/S [1999] 2 Lloyd’s Rep. 685.
” See paras 3-050? above and 7-095 er seq. below.
 Commencing the Arbitration 191

all of whom are party to the arbitration agreement, can have potentially serious
consequences as regards the jurisdiction of the tribunal.’° If proceedings are
started on behalf of the wrong party or a party that does not exist they will be a
nullity. If on the other hand there is simply an error in naming the party
concerned, that error may be treated as ‘ta mere misnomer” capable of correc-
tion.”” In JT Mackley & Co Ltd v Gosport Marina Ltd’* it was held that an attempt
to commence tripartite arbitration when one of the parties was not party to the
arbitration agreement rendered the notice of arbitration invalid. The better view
however is that the notice of arbitration will only be valid as against the other party
to the arbitration agreement and not the third party.

Specifying matters in dispute. Whilst it is not a requirement of the 5-025

statute, the notice of arbitration will often specify the matters in dispute and
indeed there may be a contractual requirement to do so. Care should be taken to
specify all the matters in dispute which are to be determined in the arbitration.”
This is because the tribunal will have jurisdiction to decide only those matters
actually referred,®° and if there is doubt about whether a particular matter has
been included the tribunal’s jurisdiction to deal with it will be open to challenge.*!
Consequently it is advisable to include in the notice of arbitration some general
wording which embraces all the outstanding matters in dispute between the
parties, as well as specific wording identifying clear and discrete issues to be
decided which can be described in the notice.*?

Scope of the reference. Whether a particular matter is within the reference 5—026
will be determined as a matter of construction of the notice of arbitration,** giving
the words used their natural meaning in the context in which they were used and
applying an objective test.** The factual background to the giving of the notice and

76 See for example Internaut Shipping GmbH v Fercometal Sarl (The “Elikon”’) [2003] EWCA Civ 812;
[2003] 2 Lloyd’s Rep. 430; Hussman (Europe) Ltd v Al Ameen Development & Trade Co [2000] 2
Lloyd’s Rep. 83 and Hussmann (Europe) Ltd v Pharaon {2003] EWCA Civ 266; [2003] 1 All E.R.
(Comm) 879; SEB Trygg Holding AB v Manches [2005] EWHC 35 affirmed at [2006] EWCA Civ
WEI.
7” SEB Trygg Holding AB v Manches [2005] EWHC 35 affirmed at [2006] EWCA Civ 1237; Harper
Versicherungs AG v Indemnity Marine Assurance Co Ltd [2006] EWHC 1500; Unisys International
Services Ltd v Eastern Counties Newspapers Ltd [1991] 1 Lloyd’s Rep. 538. See further paras 3-003
el seq.
78 [2002] EWHC 1315.
7) In Atlanska Plovidba v Consignaciones Astrurianas SA (The “Lapad”) [2004] EWHC 1273 a notice
of arbitration which accurately described the dispute but referred to it arising under the wrong
contractual document was found to be effective.
8 Although the parties, with the agreement of the arbitrator, may enter into an ad hoc agreement to
arbitrate disputes not originally included in the reference: see paras 2-003 and 2-006 above.
51 See Triad Shipping Co v Stellar Chartering & Brokerage Inc (The “Island Archon’’) (1993) 2 Lloyd’s
July 30,
Rep. 388; London Borough of Lewisham v Shephard Hill Civil Engineering Ltd unreported,
2001 QBD (T&CC).
1035.
82 See further Cruden Construction Ltd v Commission for the New Towns (1995) C.I.L.L.
of the
83 Although the scope of the reference may subsequently be expanded or reduced by agreement
parties: see Westland Helicopters Ltd v Al-Hejailan [2004] EWHC 1625.
84 Lesser Design & Build Ltd v University of Surrey, boBlReow.
 192 The Conduct of the Reference

any previous communications between the parties concerning the issues between
them will also be relevant in construing the scope of the reference to arbitration.*°
If, by the time the notice of arbitration is given, the parties’ previous communica-
tions indicate that it would be natural to expect the reference to arbitration to
include all the outstanding disputes, that fact may be taken into consideration.
The reference may also include claims arising subsequent to the commencement
of the arbitration if appropriately drafted.*°

3-027 Disputes about notice of arbitration. Any disputes about the validity
of a notice of arbitration should in the first instance be determined by the tribunal
on the basis of its power to rule on its own jurisdiction pursuant to s.30 of the
Arbitration Act 1996.” Alternatively, in exceptional circumstances,** and where
the conditions of s.32 are met, application may be made to the court. There is
some authority that even where s.32 is inapplicable, the court retains a general
jurisdiction to grant declaratory relief, but this would appear contrary to the
principle laid down in s.1(c) of the Arbitration Act 1996 which provides that in
matters governed by the Act the court should not intervene except as provided in
the statute. It was recognised in Vale do Rio doce Navegacao SA v Shanghai Bao
Steel Ocean Shipping Co Ltd*° that use of the word “‘should” rather than “shall”
in the subsection ‘‘shows that an absolute prohibition on intervention by the court
in circumstances other than those specified in Part 1 was not intended...
However it is clear that the general intention was that the courts should usually not
intervene outside the general circumstances specified in Part 1 of the 1996 Act”’.5°*
In JT Mackley & Co Ltd v Gosport Marina Ltd.°° a question was raised as to
whether there was a lacuna in the tribunal’s powers under s.30 to decide whether
there has been a valid reference at all. That would seem to be an unduly narrow
reading of s.30.°' Without deciding the point, the court proceeded to find that as
the questions raised as to the validity of the notice of arbitration were “significant
generally” it would proceed under its general jurisdiction and granted the declara-
tion of invalidity sought. This decision appears to be an isolated case and is
unlikely to be followed save perhaps where there is good reason why the matter
cannot be resolved by the tribunal.

8 Lesser Design & Build Ltd v University of Surrey, 56 B.L.R. 57.

*° Harper Versicherungs AG v Indemnity Marine Assurance Co Ltd [2006] EWHC 1500 at [53].
*’ FT Mackley & Co Ltd v Gosport Marina Ltd [2002] EWHC 1315 (TCC); Vale do Rio doce
Navegacao SA v Shanghai Bao Steel Ocean Shipping Co Lid [2000] 2 All E.R. (Comm) 70. For the
tribunal’s power under s.30 of the Arbitration Act 1996, see para.5—062 below.
** Vale do Rio doce Navegacao SA v Shanghai Bao Steel Ocean Shipping Co Ltd [2000] 2 All E.R.
(Comm) 70.
*° Vale do Rio doce Navegacao SA v Shanghai Bao Steel Ocean Shipping Co Ltd [2000] 2 All E.R.
(Comm) 70.
SeerAte [zie
°° [2002] EWHC 1315.
*! The relevant provision is a power to determine “what matters have been submitted to arbitration
in accordance with the arbitration agreement” and the suggestion in 77 Mackley & Co Ltd v
Gosport Marina Ltd was that this might be confined to deciding the scope of a valid reference as
opposed to whether there had been a valid reference at all.
 Commencing the Arbitration 193

Service of the notice of arbitration. The parties are free to agree how 5-028
the notice of arbitration is to be served.?* Commercial contracts often contain
specific provisions setting out how service is to be effected, for example by
requiring service by registered post at a particular address and marked for the
attention of a named individual. Service of a notice of arbitration will be valid if
effected in accordance with such contractual provisions.

Effective means of service. In the absence of agreement on how the notice 5-029
of arbitration is to be served, it may be served on a person by any effective means.”*
In other words, if the process leads to the notice being delivered to the person”*
on whom it is to be served that will suffice and the method of service adopted does
not matter. Any recognised means of communication effective to deliver the
document will suffice,”> but the burden of showing that it has been duly received
lies on the server.”® The notice of arbitration may, for example, be validly served
by telex,”” facsimile’® or electronic mail.”? In the case of an English registered
company a telex’ is served when it is received at the registered office whether or
not this is in normal business hours or at a time when for some other reason the
registered office is closed.'°' In the case of a foreign company, no such specific rule
can be applied, and the approach must be to apply the principles (a) that a claimant
should have his full six years,'°? and (b) that the notice need not come to the
attention of any officer of the company immediately, to the facts of each case.'°
Time of receipt of the telex must, however, be local time at the place of receipt. 104
Presumably the same would apply to other methods of giving notice, e.g. by
facsimile or electronic mail.

The “fail-safe method”’. If there is some doubt as to whether a particular 5—030

method will be effective, a “fail-safe” method!” of service is provided in s.76(4)

°? Section 76(1) of the Arbitration Act 1996.

°3 Section 76(3) of the Arbitration Act 1996.
°4 Service on the relevant party will suffice and it is not necessary that the notice come to the attention
of particular managerial or legal staff: Bernuth Lines Lid v High Seas Shipping Lid [2005] EWHC
3020.
°° Bernuth Lines Ltd v High Seas Shipping Ltd [2005] EWHC 3020.
96 Schumacher t/a Vita Konzern v Laurel Island Ltd (The “Santa Cruz Tres”) [1995] 1 Lloyd’s Rep.
208: Bernuth Lines Ltd v High Seas Shipping Lid [2005] EWHC 3020.
°7 NV Stoomv Maats “De Maas” v Nippon Yusen Kaisha (The “‘Pendrecht’”’) [1980] 2 Lloyd’s Rep.
56.
°8 Petredec Ltd v Tokumaru Kaiun Co Ltd (The ‘‘Sargasso’”’) [1994] 1 Lloyd’s Rep. 162; Swiss Bank Corp
v Novorissiysk Shipping Co (The “Petr Shmidt’’) [1995] 1 Lloyd’s Rep. 202.
°° Bernuth Lines Ltd v High Seas Shipping Ltd [2005] EWHC 3020.
100 Telex is now seldom used as a means of communication but the same principles would presumably
apply in relation to service by other means such as fax and email.
101 NV Stoomv Maats “De Maas” v Nippon Yusen Kaisha (The ‘Pendrecht’’) [1980] 2 Lloyd’s Rep.
56.
102 Assuming the usual limitation period for contract claims applies and that no shorter contractual
time limit has been agreed. h
103 NV Stoomv Maats “De Maas” v Nippon Yusen Kaisha (The “‘Pendrecht’’) [1980] 2 Lloyd’s Rep.
56.
104 NV’ Stoomv Maats “De Maas” v Nippon Yusen Kaisha (The ‘‘Pendrecht”) {1980] 2 Lloyd’s Rep.
56.
105 See the comments at para.304(iti) of the DAC report.
 194 The Conduct of the Reference

of the Arbitration Act 1996. This provides that the notice will be treated as
effectively served if it is addressed, pre-paid and delivered'’° by post:

(a) to the addressee’s last known principal residence or, if he is or has been
carrying on a trade, profession or business, his last known principal busi-
ness address; or

(b) where the addressee is a body corporate, to the body’s registered or

principal office.

If that is done the notice will be treated as effectively served.'°’

5-031 Court assistance with service. Where service of a notice of arbitration in

accordance with the parties’ agreement or under the provisions of s.76 of the
Arbitration Act 1996 set out above is not reasonably practicable, the court may
intervene to assist.'°* This power is subject to contrary agreement between the
parties and any available arbitral processes must first be exhausted.'°’ The court
may order service in a particular manner or may dispense with service alto-
gether.''® The provisions for service contained in s.76 of the Arbitration Act 1996
do not apply in relation to court proceedings. '"!

3. DUTIES OF THE TRIBUNAL IN RELATION TO THE CONDUCT

OF THE REFERENCE

(a) Duty under s.33 of the Arbitration Act 1996''*

5-032 Statutory obligations. Section 33 of the Arbitration Act 1996 imposes a

mandatory duty on the tribunal with regard to the way in which it conducts the
reference.''’ This duty reflects the general principle set out in s.1(a) of the
Arbitration Act 1996 that the object of arbitration is to obtain the fair resolution
of disputes by an impartial tribunal without unnecessary delay or expense. Section
33 provides:

'¢'The requirement that it be delivered indicates that service is effective only once actual delivery of
the notice has occurred and not when the notice is sent. ;
107 Section 76(4) of the Arbitration Act 1996.
'* Section 77 of the Arbitration Act 1996. This may be, for example, where the respondent is evading
service.
109 Section 77(3) of the Arbitration Act 1996,
"0 Section 77(2) of the Arbitration Act 1996.
"! Section 76(5) of the Arbitration Act 1996,
"12 See also paras 4-104 et seq.
113
The section cannot be excluded by agreement of the parties: see s.4 and Sch.1 to the Arbitration
Act 1996.
 Duties of the Tribunal 195

“(1) The tribunal shall—

(a) act fairly and impartially as between the parties, giving each party a reasonable
opportunity of putting his case and dealing with that of his opponent, and

(b) adopt procedures suitable to the circumstances of the particular case, avoiding
unnecessary delay or expense, so as to provide a fair means for the resolution of
the matters falling to be determined.

(2) The tribunal shall comply with that general duty in conducting the arbitral
proceedings, in its decisions on matters of procedure and evidence and in the
exercise of all other powers conferred on it.”

Section 33(1) has two limbs. The first, subs.33(1)(a), effectively requires the
tribunal to act in accordance with natural justice and broadly reflects Art.18 of the
Model Law.''* This is dealt with at paras 5-038 et seg. below. Secondly,
subs.33(1)(b) imposes a positive duty on the tribunal to adopt suitable procedures
for the fair resolution of the dispute and avoid unnecessary delay and expense.
Section 33(2) confirms the overriding nature of the duty imposed by s.33(1).

Complying with the obligations. The section makes clear that the 5-033
procedures to be adopted will depend upon the circumstances of the particular
case. There is no prescribed procedure that will be suitable in all cases and the
tribunal will be expected to adopt a flexible approach as the needs of the case
dictate. Simply adopting in every case procedures based on the CPR will no longer
do and a party who argues for full pleadings, disclosure of documents, expert
evidence and hearings with live testimony should be required to justify why this
is necessary for the fair resolution of the dispute. Despite the flexibility available,
the tribunal has a positive duty under s.33 to ensure that suitable procedures are
adopted and it will be in breach of its obligation if, for example, it fails to ensure
that the issues in the reference are properly defined.''°

Guidance from the Act. The tribunal is given some guidance in the 1996 5—034
Act itself as to how it should approach the duty imposed by s.33. In particular,
s.34(2) may be treated as a non-exhaustive checklist of issues for the tribunal to
consider in establishing the procedure for the reference.''® s.34(1) provides that
these are matters for the tribunal to decide, subject to any agreement on them
between the parties.''”

114 Article 18 refers to each party being given a “full” opportunity to present its case whereas s.33(1)(a)
refers to a “reasonable” opportunity. This reflects that it may not always be necessary, efficient or
fair to allow a party the opportunity to present his case as fully as he may wish and it is considered
sufficient for him to be allowed a reasonable opportunity to do so; see para.5—043 below.
5 RC Pillar & Sons v Edwards [2002] C.1.L.L. 1799.
116 For a fuller checklist and discussion of the procedural issues see paras 5—118 et seq. below.
117 t was apparently a matter of much debate whether the final word on procedural and evidential
matters should be with the tribunal or with the parties. Section 34(1) is an interesting compromise.
It gives an overriding right to the parties to agree the procedure, but is drafted in such a way as to
give apparent prominence to the tribunal’s right to decide such matters.
 196 The Conduct of the Reference

5—035 Exercise of the tribunal’s powers. Section 33(2) makes clear that the
tribunal must have regard to the general duty set out in s.33(1) when exercising its
various powers in the course of the reference. It must therefore consider whether
it would assist the fair, speedy and most efficient resolution of the dispute for it
to exercise the powers available including, for example, the power to limit recover-
able costs under s.65 of the Act.''®

5-036 Remedies for failure to comply. Where a party considers that the
tribunal has failed to comply with the duty under s.33(1) he has two basic
remedies. First, he may apply under s.24 of the Arbitration Act 1996 for the
tribunal to be removed. Secondly, he may seek to challenge any resulting award
under s.68 of the 1996 Act. An application for removal under s.24 might be
appropriate if a party learned of the failure to comply with the duty under s.33(1)
during the course of the hearing. He would in any event have to raise his objection
forthwith''’? or within such time as the arbitration agreement specifies because
otherwise the right to object will be lost.'*° Having made his objection a party may
nevertheless choose to continue to take part in the proceedings. If he does so, or
if the failure to comply with the duty under s.33(1) only becomes apparent on
publication of the award, the second alternative of challenging the award would be
appropriate. It will often be combined with an application for removal under s.24
so that, if the challenge is successful, the award will not be remitted to the same
tribunal.'?"

5—037 Challenge to the award. A party who considers that the tribunal has failed
to comply with its duty under s.33(1) can also seek to challenge any resulting
award on grounds of serious irregularity under s.68(2)(a) of the Arbitration Act
1996.'*? Additionally the applicant must show “substantial injustice” has been or
will be caused. Challenges under s.68 of the Arbitration Act 1996 are dealt with
in Ch.8.'** Whilst it is possible to describe the sort of behaviour on the part of a
tribunal which may give grounds for objection on the basis of abreach of the duty
under s.33(1), the question whether in any given case a remedy will be available has
to be considered in the specific context of s.68 and whether in the particular
circumstances it gave rise to substantial injustice. In this context, the Court of
Appeal has indicated that “pursuit of the overall objective of arbitral proceedings
as set out in s.1(a) of the 1996 Act (‘the fair resolution of disputes by an impartial
tribunal without unnecessary delay or expense’) requires that... the courts

"8 See paras 6-147 et seq.

"This has been held to mean “as soon as reasonably possible”: see Margulead Lid v Exide Technologies
[2004] EWHC 1019; [2005] 1 Lloyd’s Rep. 324. ;
120 Section 73 of the Arbitration Act 1996. See for example Sinclair v Woods of Winchester Ltd [2005]
EWHC 1631; 102 Con. L.R. 127.
'21 Remoyal of an arbitrator is dealt with in paras 7-111 ez seg. below.
122 As His Honour Judge Lloyd Q.C. pointed out in Weldon Plant Ltd v The Commission for the New
Towns [2000] EWHC Technology 76; [2000] B.L.R. 496 at [30], although a failure to comply with
s.33 is placed first in s.68(2) “it is in reality more in the nature of a general provision of which
section 68(2) contains further examples”’.
23 See paras 8-072 e7 seq.
 Duties of the Tribunal 197

should accord a reasonably generous margin of appreciation to arbitrators in the

discharge of their functions.”'** More specifically, His Honour Judge Lloyd Q.C.
in Weldon Plant Ltd v The Commission for the New Towns'** held that the mere fact
that there was an error in the award which was unfair to a party did not mean that
there must have been a failure to comply with s.33 of the Act and therefore a
serious irregularity for the purposes of s.68(2)(a).!2° Accordingly, whilst there is
clearly a link between the duty under s.33 and the ability to challenge an award for
serious irregularity under s.68, breach of the duty will not necessarily give rise to
a remedy under the latter section.

(b) Natural justice and fairness

Statutory provision. English law requires the tribunal to comply with rules 5—038
of natural justice in the conduct of the reference and an award may be challenged
or enforcement resisted if it is made in breach of them.'?” The minimum require-
ments are set out in the first limb of the tribunal’s duties under s.33 of the
Arbitration Act 1996. That section provides that the tribunal shall ‘“‘act fairly and
impartially as between the parties, giving each party a reasonable opportunity of
putting his case and dealing with that of his opponent”. This reflects the two
traditional limbs of natural justice, namely the requirement that the tribunal
hearing a case must be unbiased and disinterested, and the requirement that each
party must be given a fair opportunity to be heard.'**

Agreement otherwise? Section 33(1) is one of the mandatory provisions in 5-039

the 1996 Act,'’ so the parties cannot agree that the tribunal may act in breach of
the duty imposed. The parties may, however, agree to what would otherwise
constitute a breach of natural justice under common law.'*° For example, the
parties may agree to waive any objection to the appointment of an arbitrator who
has an interest which he discloses.'*! Or they may agree to the incorporation of a

'24 ner Parker L.J. in Warborough Investments Ltd v S Robinson & Sons (Holdings) Ltd [2003] EWCA
Civ 751 at [60].
'25 12000] EWHC Technology 76; [2000] B.L.R. 496 at [30].
6 See also Sinclair v Woods of Winchester Ltd [2005] 102 Con. L.R. 127 at [20] and Nemfield
Construction Ltd v Tomlinson [2004] EWHC 3051.
"27 See paras 8-077, 8-010 and 8-028.
128 See paras 5-042 et seq.
129 See s.4 and Sch.1 to the Arbitration Act 1996. As regards enforcement of the duty see para.5—036
above.
130 London Export Corp Ltd v Jubilee Coffee Roasting Co Ltd [1958] 1 W.L.R. 271: see though
W Naumann v Edward Nathan & Co Ltd [1931] 37 Lloyd’s Rep. 249. The common law is
maintained insofar as it is not inconsistent with the statute: see s.81 of the Arbitration Act 1996.
31 In Weissfisch v Julius [2006] EWCA Civ 218 the parties agreed to appoint a solicitor as arbitrator who
was authorised to continue to represent them outside the arbitration, for reward. They also
expressly waived any rights to challenge his appointment on any ground including his having been
engaged in the mediation of their disputes and his having been legal adviser to them. The Court of
Appeal noted these “extraordinary features” but declined to allow an appeal against the refusal of
an injunction restraining the arbitrator from proceeding with a hearing to determine his jurisdic-
tion. This was however a case where the arbitration agreement was governed by Swiss law rather
than English law.
 198 The Conduct ofthe Reference

custom or trade practice that might otherwise be considered unreasonable and in

breach of natural justice. Express agreement will be required'’’ but if it is
forthcoming then the tribunal cannot be said to have conducted the proceedings
improperly. This is subject to what has been agreed not requiring the tribunal to
act in breach of its duty under s.33(1).

5—040 Impartial. Section 33(1) of the Arbitration Act 1996 states that the tribunal
must act “impartially”.'3> An arbitrator must also appear impartial'** and if there
are justifiable doubts as to his impartiality this will provide a ground for his
removal by the court under s.24(1)(a) of the Arbitration Act 1996'* or may mean
that the award can be challenged.'*°

5—041 Unilateral communication with a party. Whilst there is no absolute

rule against the arbitrator having unilateral discussions with one party only, an
arbitrator should avoid doing so as it can lead to removal for failure to conduct the
proceedings properly'*’ or for a reasonable apprehension of bias,'** especially if
discussions are intentional or frequent, go beyond administrative matters or are
not promptly disclosed to the other party.'*’ In practice unilateral communications
frequently occur between an arbitrator and the legal representatives of his appoint-
ing party in the context of both his own appointment and consideration of
potential candidates for appointment as the third arbitrator.'*”* This practice is
unobjectionable provided the discussion does not stray into the substance of the
dispute and both parties are made aware that the discussions are taking place.'*°

5—042 A reasonable opportunity of putting case. Each party must be given

a reasonable opportunity to present his own case.'*! This means he must be given
an opportunity to explain his arguments to the tribunal and to adduce evidence in

‘2 London Export Corp Ltd v Jubilee Coffee Roasting Co Ltd [1958] 1 W.L.R. 271.
'53 See generally para.5—032 and para.4—107 above.
'" K/S Norjarl A/S » Hyundai Heavy Industries Co Ltd [1991] 1 Lloyd’s Rep. 524.
'S* This subject is dealt with more fully in paras 4-107 et seg.
'° Under s.68(2)(g) of the 1996 Act and subject, of course, to the loss of the right to object under
s.73(1); see para.8—065.
'S7 Under s.24(1)(d)(i) of the Arbitration Act 1996: see paras 7-116 et seg.
8 Under s.24(1)(a) of the Arbitration Act 1996: see paras 4-107 et seq.
'° Norbrook Laboratories Ltd v Tank [2006] EWHC 1055.
1 See Pacific China Holdings Lid v Grand Pacific Holdings Ltd ACCT 5/2007, a first instance decision
from Hong Kong, where an application to remove an arbitrator as a result of such communication
_ was rejected. See also r.5.2 of the IBA’s Rules of Ethics for Arbitrators at wipw.ibanel.org.
"©The Chartered Institute of Arbitrators has published a ‘Guideline on the Interviewing of Pro-
spective Arbitrators” which sets out a suggested procedure for pre-appointment interviews with
arbitrators. The Guideline has received a mixed reception from practitioners, in part because it is
seen as proposing an unduly formal and burdensome regime.
41 Section 33(1)(a) of the Arbitration Act 1996 and see Montrose Canned Foods Ltd v Eric Wells
(Merchants) Lid {1965] 1 Lloyd’s Rep. 597.
 Duties of the Tribunal 199

support of his case'** and a sufficient period of time should be allowed for this.!*5
If an arbitrator bifurcates the proceedings so as to determine certain issues in
advance of others and holds a hearing on that basis, he cannot subsequently make
an award on the postponed issues without giving an opportunity to address those
also.'"* Failure to afford a party a reasonable opportunity of putting his case may
render the award subject to challenge under s.68'* of the Arbitration Act 1996,!*°
but only if it is such as results in substantial injustice.'*’ It could also lead to the
arbitrator’s removal under s.24(1)(d) of the Arbitration Act 1996.'4° A party’s
inability to present his case is also a ground for refusing enforcement of the
resulting award under the New York Convention.'*

Qualification of the right. The need to allow a party a reasonable 5-043

opportunity to present his case can give rise to difficulties. To what extent can the
tribunal intervene where, for example, a party’s submissions or evidence is need-
lessly long, repetitive, focuses on irrelevant issues or is sought to be made over an
extended period of time? What if a party ignores procedural deadlines imposed by
the tribunal but maintains he still has points to put before it in support of his case?
Inevitably each situation has to be dealt with in its own context but the following
general considerations should be taken into account.

No unfettered right. The right to present his case does not mean that a 5-044
party has an unfettered right to make submissions or present evidence as and when
he wishes. It is noteworthy that s.33(1)(a) of the Arbitration Act 1996 refers to a
reasonable opportunity whereas Art.18 of the Model Law on which it is based
refers to a full opportunity. This reflects the DAC’s intention that the right to

'2 Prior to the Arbitration Act 1996 a party had to be permitted an oral hearing if he requested one,
unless there was some agreement to the contrary: see Henry Sotheran Ltd v Norwich Union Life
Insurance Society [1992] 31 E.G. 70. However, absent agreement between the parties, this is now a
matter to be decided by the tribunal under s.34(2)(h) of the Arbitration Act 1996. English law
therefore differs from the UNCITRAL Model Law on this, Art.24(1) of which allows either party
to insist on a hearing, see Appendix 4.
“3 Norbrook Laboratories Lid v Tank [2006] EWHC 1055.
4 Benaim (UK) Lid v Davies Middleton & Davies Ltd [2005] EWHC 1370.
45 Tn Icon Navigation Corp v Sinochem International Petroleum (Bahamas) Co Ltd [2002] EWHC 2812
a tribunal found in favour of a party on an issue which that party alleged it had not had an
opportunity properly to address. The other party appealed against the award under s.69 of the
Arbitration Act 1996, thereby raising the prospect of a successful appeal on the issue in question.
The court determined that in this situation the appropriate course is to oppose the application for
leave to appeal on the grounds that it is not just and proper in all the circumstances for the court
to determine the question of law in respect of which leave to appeal is sought. An oral hearing of
the application for leave to appeal may be appropriate in these circumstances.
'46 See paras 8-077 et seq. See also Henry Sotheran Ltd v Norwich Union Life Insurance Society [1992]
31 E.G. 70 and Lovell Partnerships (Northern) Lid v AW Construction Plc [1996] 81 B.L.R. 83, both
cases under the old law but demonstrating the type of conduct which is likely to give rise to serious
irregularity under s.68 in this context. See also Williams v Wallis [1914] 2 K.B. 478.
147 Warborough Investments Ltd v S Robinson & Sons (Holdings) Ltd [2002] EWHC 2502, affirmed by
the Court of Appeal at [2003] EWCA Ciy 751. See also paras 8-104 et seg. below.
148 Benaim (UK) Ltd v Davies Middleton & Davies Ltd [2005] EWHC 1370. See para.7-116 et seq.
149 See the Arbitration Act 1996, s.103(2)(c) implementing Art.V(1)(b) of the Convention, dealt with
at para.8—034.
 200 The Conduct of the Reference

present the case should not be without limit. The tribunal’s duty under s.33 of the
Arbitration Act 1996 has to be considered in light of s.34 of the same Act which,
in the absence of agreement between the parties, requires the tribunal to deter-
mine all procedural and evidential matters.'°? The combination of these provisions
means the tribunal must actively manage the proceedings in order to comply with
its duty under s.33.

5—045 Limits. A party is required to comply with procedural orders and directions
from the tribunal,'>! including those imposing limits as to time and content of
submissions and evidence.'*? On the other hand, if the tribunal’s directions in this
regard can be said to be unfair or to operate unfairly against one of the parties, that
party may have a genuine ground of complaint.'*’ In practice the tribunal will
usually allow some latitude to a party who has further relevant submissions or
evidence to put forward, but will need to draw the line at some point.'** Provided
it has made clear to the parties exactly where that line will be drawn, for example
by giving advance warning of a cut-off date for evidence and submissions, and
provided of course it is not unreasonable to draw the line in that way, the tribunal
should not fall foul of the requirement to give the parties a reasonable opportunity
to present their case.'*°

5-046 Managing the proceedings. Similarly, a tribunal cannot be expected to sit

through extended oral hearings listening to long-winded submissions on irrelevant
matters. The tribunal is entitled, and under s.33 is obliged and encouraged, to
avoid the unnecessary delay and expense that would be caused by such an
approach. The tribunal should take a grip on the proceedings from the outset and
indicate to the parties those areas on which it particularly wishes to be addressed
and those which it does not consider relevant to the real issues in dispute. If a
party fails to heed such guidance, the tribunal might seek to focus the proceedings
by fixing times for written submissions and allocating the remaining hearing time
between the parties. This the tribunal is entitled to do, provided it will allow a
reasonable time for both parties to put forward their argument and evidence.'*°

5—047 Late raising of issues. The question whether new issues can be raised at a
late stage of the proceedings will depend upon the circumstances of the particular
'° See para.5—034 above.
'! See generally paras 5-191 et seq. below.
''2 There can be no doubt in view of the general principles set out in s.1 of the Arbitration Act 1996
and the duties imposed on the tribunal under s.33(1)(b) of the Arbitration Act 1996 that the tribunal
has the power and indeed the duty to impose such limits where it is appropriate in the circumstances
of the case. See also Overseas Fortune Shipping Pte Lid v Great Eastern Shipping Co Ltd (The
“Singapore Fortune”) {1987] 1 Lloyd’s Rep. 270 on the imposition of time limits.
3 Damond Lock Grabowski v Laing Investments (Bracknell) Ltd, 60 B.L.R. 112. This was a case under
the old law but the point could be made even more strongly in view of the principle of fairness
required under ss.1 and 33(1)(a) of the 1996 Act.
4 Shuttart v Solicitors’ Indemnity Fund {2004| EWHC 1537 (Ch).
'® Overseas Fortune Shipping Pte Lid v Great Eastern Shipping Co Ltd (The “Singapore Fortune’) [1987]
1 Lloyd’s Rep. 270.
156 See para.5—042 above.
 Duties of the Tribunal 201

case and whether it will cause injustice. The ability of the other party to be given
a reasonable opportunity to address those new issues will be crucial. As Moore-
Bick J. said in Icon Navigation Corp v Sinochem International Petroleum (Bahamas)
Co Ltd'’’: “No tribunal likes to shut out genuine issues if it can avoid doing so, but
it is necessary to ensure that the other party has a fair opportunity to deal with any
new point that is put forward. Provided the arbitrators are satisfied that there will
be no prejudice to the opposing party they are entitled to allow new points to be
raised at any stage of the proceedings, even in closing submissions.”’'**

Assisting a party to put his case. Another issue which arises in this 5-048
context is the extent to which, if at all, a tribunal is obliged to assist a party in
putting his case. There was some authority under the old law that if a tribunal has
in mind certain findings of fact arising out of the evidence given which would
establish a defence to a claim, and it requires that defence to be formulated in the
pleadings, it should spell this out to the party concerned and failure to do so could
render the award susceptible to challenge for “‘procedural mishap”’.'*? The scope
for any such challenge based on the failure by one of the parties properly to put
his case has been removed by the Arbitration Act 1996.'°° The position now
appears to be that, although a tribunal should make sure that a party properly
understands the case being put to him,'®! there is no positive obligation for a
tribunal to make a party’s case for him, even where that party is not legally
represented. Of course, the other party must prove his case to succeed in any
event.

A reasonable opportunity to deal with the case of the other 5—049

party. Section 33(1)(a) of the Arbitration Act 1996 also requires the tribunal to
allow each party a reasonable opportunity to deal with the other side’s case. This
means that each party is entitled to know,'®? and should have an opportunity to
address,'°* all evidence and submissions made by the other party.'®* Failure by a
party to insist on being given information will not absolve the arbitrator from his

8772003] 1 All E.R. (Comm) 405.

'S8 As the judge noted, there may however be costs consequences of raising issues late in the pro-
ceedings.
'59 Indian Oil Corp Ltd v Coastal (Bermuda) Ltd {1990] 2 Lloyd’s Rep. 407. However, see the comments
of Lord Donaldson in King v Thomas McKenna Ltd [1991] 1 All E.R. 653, CA at 655-656.
160 See the grounds for challenge for serious irregularity listed in s.68(2) of the Arbitration Act 1996
and dealt with in paras 8-076 et seq.
‘61 Both as a matter of good practice and arguably to comply with the duty under s.33(1) of the
Arbitration Act 1996.
162 Ajay Kanoria and others v Tony Francis Guinness [2006] EWCA Civ 222. That case concerned
enforcement of a New York Convention award being resisted on the basis of a party’s inability to
present its case under s.103(2)(c) of the Arbitration Act 1996 but the reasoning is equally applicable
in the present context.
163 Norbrook Laboratories Ltd v Tank [2006] EWHC 1055.
164 See, for example, Montrose Canned Foods Ltd v Eric Wells (Merchants) Ltd [1965] 1 Lloyd’s Rep. 597
and Ceval Alimentos SA v Agrimpex Trading Co Lid [1995] 2 Lloyd’s Rep. 380, cases under the old
law but underlining the right now embodied in s.33(1)(a) of the Arbitration Act 1996.
 202 The Conduct of the Reference

overriding duty in this regard.'®> Accordingly, where there are material commu-
nications between the tribunal and a party, the tribunal should ensure that they
take place in the presence ofboth parties.'°° If this is for some reason not possible,
the tribunal should be careful to inform the other party of the content of such
communications, providing copies of any which are in writing. A tribunal wishing
to avoid criticism would be well advised to take a broad view of what is “material”
and to err on the side of caution. As Megaw L.J. noted in Government of Ceylon
v Chandris: “It is, | apprehend, a basic principle, in arbitrations as much as in
litigation in the Courts (other, of course, than ex parte proceedings), that no one
with judicial responsibility may receive evidence, documentary or otherwise, from
one party without the other party knowing that the evidence is being tendered and
being offered an opportunity to consider it, object to it, or make submissions on
it. No custom or practice may over-ride that basic principle.’’!°”

5—050 The right to deal with any issue which will be relied on by the
tribunal.'® To comply with its duty under s.33(1) of the Arbitration Act 1996
to act fairly, the tribunal should give the parties an opportunity to deal with any
issue which will be relied on by it as the basis for its findings.'®? The parties are
entitled to assume that the tribunal will base its decision solely on the evidence and
argument presented by them!” prior to the making of the award,'”! and if the
tribunal is minded to decide the dispute on some other point, the tribunal must
give notice of it to the parties to enable them to address the point.'7? That said,
a tribunal does not have to refer back to the parties its analysis or findings based

'°5 Mohan Lal Mirpuri v Amarjit Singh Jass [1997] 56 Con. L.R. 31. In that case an arbitrator in a
“documents-only” arbitration proceeded to make an award when he knew that one of the parties
had not received documents which he had received from the other party. The solicitor for the party
who had not received the documents knew of the omission but did not take positive steps to obtain
the documents. This inaction was held not to override the arbitrator’s duty to ensure each party
knew the case which was put against them and the award was remitted.
166
Unilateral communications may lead to the removal of an arbitrator: see para.7—118 below.
'©7 11963] 1 Lloyd’s Rep. 214.
' See Pacol Lid v Joint Stock Co Rossakhar [2000] 1 Lloyd’s Rep. 109 which referred to this and the
following paragraph as they appeared in the 21st edition of this book.
'© Ghangbola v Smith & Sherriff Lid {1998] 3 All E.R. 730: Pacol Ltd v Joint Stock Co Rossakhar [2000]
1 Lloyd’s Rep. 109; Bulfracht (Cyprus) Lid v Boneset Shipping Co Ltd (The “Pamphilos”’) [2002]
2
Lloyd’s Rep. 681; Omnibridge Consulting Lid v Clearsprings (Management) Ltd [2004] EWHC 2276;
Vee Networks Lid v Econet Wireless International Lid [2004] EWHC 2909: [2005] 1 Lloyd’s Rep.
192.
170
Unless an inquisitorial approach is adopted, see para.5—099 below, but even then the parties
should
be given a reasonable opportunity to deal with any issue the tribunal will rely on.
‘7! This will usually be limited to the evidence and argument presented by the time
the hearing is
concluded but may extend to post-hearing submissions made prior to the making of the
award.
'? Ghanghola v Smith & Sherriff Ltd {1998} 3 AW E.R. 730; Pacol Ltd v Joint Stock Co Rossakhar [1999]
2 AN E.R. 778; Guardcliffe Properties Ltd v City & St James [2003] 25 E.G. 143; Cameroon
Airlines
v Transnet Lid [2004] EWHC 1829; St George’s Investment Co v Gemini Consulting Ltd
[2004]
EWHC 2353; [2005] 01 E.G. 96; Vee Networks Lid v Econet Wireless International Lid
[2004] EWHC
2909; [2005] 1 Lloyd’s Rep. 192. This follows the position prior to the Arbitration
Act 1996: Top
Shop Estates Ltd v C Danino [1985] 1 E.G.L.R. 9: Zermalt Holdings SA v Nu-Life
Upholstery Repairs
Lid [1985] 2 E.G.L.R. 14; Handley v Nationwide Anglia Building Society
[1992] 29 E.G. 123; Unit
Four Cinemas Lid v Tosara Investments Lid [1993] 44 E.G. 121; Henry
Boot Construction Ltd v
Mooney (1996) 12 Constr. L.J. 37. See also para.8-081.
 Duties of the Tribunal 203

on the evidence or argument before it.'’* Indeed, the tribunal is entitled to derive
an alternative case from the parties’ submissions as the basis for its award, so long
as an opportunity is given to address the essential issues which led the tribunal to
those conclusions.'”* If an issue is raised but not pursued by one party, and the
other party chooses not to address the point, it may still be open to the tribunal
to rely upon that issue so long as it has been ‘“‘put into the arena”’.'”> In most cases
of course the tribunal would want to solicit submissions on the point rather than
leave it unaddressed by one party but the right conveyed by s.33(1) is to be given
an opportunity to deal with the issue and it is ultimately for a party to decide
whether to avail itself of that opportunity.'”°

The tribunal’s view of the facts. Similarly, if a tribunal forms a view of 5-051
the facts which is different from that given in the evidence adduced by the
parties,'’’ and it might produce a contrary result to that which emerges from the
evidence, then the tribunal should bring its view to the attention of the parties and
give them an opportunity to address it.'’* However not every observation or
inference of fact need be referred back to the parties for them to make submissions
if such observation or inference is not material or significant and is simply an
ordinary incident of the arbitral process based on the arbitrator’s power to make
findings of fact.'”

Tribunal’s expert knowledge. A tribunal may be entitled to rely on its 5—052

own expert knowledge in deciding the case.'*° Unless it is clear that members of
the tribunal will be relying on their experience of the trade,'*' and indeed they

3 ABB AG v Hochtief Airport GmbH [2006] 1 All E.R. 529 (Comm); Bulfracht (Cyprus) Ltd v Boneset
Shipping Co Ltd (The ‘‘Pamphilos”’) [2002] EWHC 2292; [2002] 2 Lloyd’s Rep. 681; Bandmith
Shipping Corp v Intaari [2006] EWHC 2532.
74 ABB AG v Hochtief Airport GmbH [2006] 1 All E.R. 529 (Comm); The Trustees of Edmond Stern
Settlement v Simon Levy [2007] EWHC 1187; JD Wetherspoon Ple v fay Mar Estates [2007] EWHC
856.
75 Warborough Investments Ltd v S Robinson & Sons (Holdings) Lid [2002] EWHC 2502, affirmed by
the Court of Appeal at [2003] EWCA Civ 751; Bandmith Shipping Corp v Intaari [2006] EWHC
2532; JD Wetherspoon Ple v Jay Mar Estates [2007] EWHC 856. See further para.8—080.
176 In JD Wetherspoon Plc v Jay Mar Estates (2007] EWHC 856, the arbitrator conducting a rent review
arbitration offered the parties the opportunity to accompany him on his inspection of comparable
properties, which they declined. The court held that no criticism could be made of the arbitrator
that he proceeded with the inspection in their absence.
'77 Or the parties’ agreed view of the facts: Ommibridge Consulting Ltd v Clearsprings (Management) Lid
[2004] EWHC 2276; Walsall Metropolitan Borough Council v Beechdale Community Housing Associa-
tion Ltd [2005] EWHC 2715.
178 Société Franco-Tunisienne d’Armement-Tunis v Government of Ceylon [1959] 2 Lloyd’s Rep. 1; [1959]
1 W.L.R. 787; R. v Paddington and St Marylebone Rent Tribunal [1949] 1 K.B. 666; Aiden Shipping
Ltd v Interbulk Ltd (The “Vimeira’’) [1986] A.C. 965. See para.8—081 below.
179 Bulfracht (Cyprus) Ltd v Boneset Shipping Co Ltd (The “‘Pamphilos”’) [2002] EWHC 22972. See also
Tame Shipping Ltd v Easy Navigation Ltd (The ‘Easy Rider”) {2004} EWHC 1862.
180 See paras 4-139 above and 6—075 er seq. below.
181 See for example Hawk Shipping Lid v Cron Navigation Lid [2003] EWHC 1828 where Toulson J.
observed at [19] that: “When the parties choose the LMAA small claim procedure they do so in the
expectation that the Arbitrator will bring his own specialist knowledge to bear in determining the
claim’.
 204 The Conduct of the Reference

have been appointed for that purpose, (as happens, for example, in disputes about
the quality of commodities), they should disclose the matters within their own
knowledge on which they intend to rely to avoid any subsequent argument that the
parties should have been given an opportunity to address them. That said, the
courts in recent years have taken a more robust approach to tribunals relying on
their own experience and knowledge.'*” So, for example, there can be no objection
to arbitrators using their experience and technical knowledge when applying the
law or evaluating the evidence before them and making findings of fact.'*’ In
Checkpoint Ltd. v Strathclyde Pension Fund'** the court drew a distinction between
the arbitrator supplying new evidence by using his own knowledge and him using
that knowledge to evaluate and adjudicate upon the evidence before him. The
arbitrator is fully entitled to make use of his own experience and knowledge in
evaluating the evidence before him and in reaching his conclusions, provided that
it is of a kind and in the range of knowledge that one would reasonably expect the
arbitrator to have, and provided he uses it to evaluate the evidence called and not
to introduce new and different evidence.'** Accordingly the tribunal can draw an
inference from the evidence even if that inference has not specifically been raised
by either party.

5—053 Scope of the statutory duty. The scope of the duty to “act fairly” under
s.33(1) of the Act is not precisely defined. One of the problems in discussing this
area is that the concepts involved are general and vague. As the DAC acknowl-
edged,'*° this vagueness, and the consequent wide scope of s.33(1), flow from one
of the main objectives of the Act, namely the provision of a flexible system of
arbitration. On the face of it the scope of s.33(1) appears to facilitate challenges for
serious irregularity under s.68(2)(a). However a successful applicant under s.68
needs to show “substantial injustice”, which creates a high threshold. The DAC
indicated'*’ that having chosen arbitration, parties cannot validly complain of
substantial injustice “unless what has happened simply cannot on any view be
defended as an acceptable consequence of that choice’’. It emphasised that s.68
was designed as a long stop, only available in extreme cases where the tribunal has
gone so wrong in its conduct of the arbitration that justice calls out for it to be
corrected. The DAC also expressed a hope that the court would take a dim view
of those who tried to attack awards because of alleged breaches of s.33 which have

'™ In Checkpoint Ltd v Strathclyde Pension Fund [2004] EWCA Civ 84 the Court of Appeal suggested
that an acceptable test for whether the arbitrator had wrongly used his personal experience of the
market is whether or not the information relied upon by the arbitrator is information of the kind
and within the range of knowledge which he would reasonably be expected to have. The arbitration
agreement in that case specifically contemplated an arbitrator with “relevant local knowledge’’.
'S Bulfracht (Cyprus) Ltd v Boneset Shipping Co Ltd (The “Pamphilos”’) [2002] EWHC 2292; Benaim
(UK) Ltd v Davies Middleton & Davies Lid [2005] EWHC 1370; Hawk Shipping Lid v Cron
Navigation Ltd |2003] EWHC 1828.
'** [2003] EWCA 84. See also JD Wetherspoon Ple v Jay Mar Estates [2007] EWHC 856.
'* Checkpoint Ltd v Strathclyde Pension Fund [2003] EWCA Ciy 84; JD Wetherspoon Ple v Jay Mar
Estates [2007] EWHC 856 at [10].
'86 Paragraph 150 of the DAC report.
'87 Paragraph 280 of the DAC report.
 Duties of the Tribunal 205

no real substance.'** In practice, the courts have not been inundated with spurious
claims based upon alleged breaches of s.33, despite the apparent width and
vagueness of the duty. This is no doubt in part due to the robust approach the
courts have taken towards the requirement for an applicant to demonstrate
substantial injustice.
!*?

Intervention by the court. In its approach to s.33 and the requirement of 5—054
fairness the court has to take account of the non-interventionist principle.'°? This
principle is expressed in s.1(c) of the 1996 Act and by s.34 of the Act which makes
it clear that procedural and evidential matters are for the tribunal to determine in
the absence of agreement between the parties. These provisions lend support to
the approach advocated by the DAC outlined in para.5—053 above. Additionally,
whilst there were a number of authorities under the old law showing the court’s
willingness to intervene where it was felt the tribunal had erred in relation to
evidential and procedural matters,'’’ those decisions are not applicable to the
statutory regime embodied in the Arbitration Act 1996.'°?

(c) Relationship between duties, principles and party autonomy

Duties, principles and party autonomy. The Arbitration Act 1996 5—055
sets out in s.1 the general principles on the basis of which it is to be construed.'”°
It makes clear that the parties are free to agree how their arbitration is to be
conducted, subject to such safeguards as are necessary in the public interest.'”*
These safeguards are reflected in the fact that various provisions in the Act are
mandatory.'”* Section 33(1) of the Arbitration Act 1996 imposes specific duties on
the arbitrators.'!°° These duties are mandatory and cannot be excluded by agree-
ment. However the parties are free to agree all procedural and evidential matters
under s.34(1) of the Arbitration Act 1996. The question arises as to what is the
relationship between these provisions and whether there is a tension between
them?!?”

'88 Paragraph 151 of the DAC report.

189 See paras 8-072 et seg. for a detailed discussion of the court’s approach.
190 The principle of non-intervention was stated clearly by the House of Lords in Lesotho Highlands v
Impreglio SpA [2005] UKHL 43.
‘91 For example as to evidential weight, relevance and admissibility which are now dealt with in
s.34(2)(f) of the Arbitration Act 1996.
182 This reflects the position generally in relation to the 1996 Act. In Seabridge Shipping AB v AC
Orssleff’s Efif’s A/S {1999] 2 Lloyd’s Rep. 685 at 690 Thomas J. (as he then was) observed that “it
would in my view be a retrograde step if when a point arose reference had to be made to pre-Act
cases” and he referred to the guidance given by the Court of Appeal in Patel v Patel [2000] Q.B.
551 that reliance should be had on the wording of the Arbitration Act 1996. These statements were
endorsed by the House of Lords in Lesotho Highlands v Impreglio SpA |2003] URHL 43.
3 See paras 1-004 and 1-005 above.
9+ Section 1(b) of the Arbitration Act 1996.
95 Set out in Sch.1 of the Arbitration Act 1996.
196 See paras 5—032 et seq. above.
'°7 See generally paras 154 to 163 of the DAC report.
 206 The Conduct of the Reference

5-056 Differing views of the parties and the tribunal. In particular, what
happens if the parties purport to agree something which the tribunal considers is
contrary to the principles and duties laid down in ss.1 and 33 of the Arbitration
Act 1996? s.33(1) cannot be excluded by agreement but on the other hand the
tribunal cannot override the agreement of the parties, nor should they proceed
against the wishes of the parties. In these circumstances the tribunal would want
to explore the predicament with the parties and ask them to modify their
agreement. If the parties were unwilling to do so the tribunal may have to
resign.'°* The only alternative to resignation, assuming the parties are unwilling
to modify their agreement as to how they wish the tribunal to proceed, is for the
tribunal to follow the parties’ wishes notwithstanding their own reservations about
the proposed course. The tribunal would have to satisfy itself that this course can
be reconciled with its mandatory obligation under s.33, but having brought about
this situation the parties could not justifiably complain if the tribunal did so, nor
would they be able to show substantial injustice in order to challenge the resulting
award.

4. PRELIMINARY CONSIDERATIONS

(a) Rules applicable to substance of the dispute

5-057 Determining the applicable rules. An issue which frequently arises for
determination by the tribunal at a preliminary stage is the question of the law or
rules to be applied to the merits of the dispute.'”? This is however just one aspect
of a broader issue and the following three categories of applicable law or rules may
need to be considered”:

(1) The law of a particular country or some other considerations agreed

between the parties may govern the rights and obligations arising out of
the parties’ substantive agreement.”°! If a national law is selected this is
referred to as the governing or proper law of the contract.

(2) A different law may apply to the rights and obligations arising out of the
agreement to arbitrate. This is known as the law of the arbitration
agreement.7”

This was the view of the DAC—see paras 154 to 163 of the DAC report.
™ For a fuller discussion of this subject see paras 2-090 et seq. above. See also
s.46 of the Arbitration
Act 1996. Section 46(1)(b) makes clear that the parties may choose either a “law”
to apply to the
dispute or “other considerations”. This opens the door to “equity clauses” and
the like: See paras
4-141 and 4-142 above.
*'There may be other applicable laws, such as the law governing the particular
reference to
arbitration. See para.2—094 above.
*°! Section 46(1) of the Arbitration Act 1996. See paras 2-090 et seq. above.
See also Compagnie
d’Armement Maritime SA v Compagnie Tunisienne de Navigation SA [1971] A.C. 572 at 604 and Bank
Mellat v Helliniki Techniki SA [1984] Q.B. 291 at 301.
202 See for example C v D [2007] EWHC 1541. See paras 2-094 et seq. above.
 Preliminary Considerations 207

(3) A law other than the law of the arbitration agreement may govern the
procedures to be adopted in an arbitration.2°> This is known as the
procedural! law or the curial law of the arbitration.

Law of place of enforcement.” It is also necessary to have regard to the 5-058

laws of the place or places where recognition and enforcement will be sought in
order to ensure that the resulting award complies with any mandatory require-
ments they might impose.

For a fuller discussion of the applicable law (or rules) in their different contexts, 5-059
and how they are to be determined by the tribunal, see paras 2-087 et seq. above.
The court’s power to determine preliminary points of law is dealt with at paras
7-165 et seq. below.

(b) Jurisdiction

Tribunal to consider jurisdiction. A tribunal should consider the 5—060

existence and scope of its jurisdiction. Usually, if there are concerns about the
tribunal’s jurisdiction then one of the parties will raise them. Indeed, if the parties
fail to raise objections to jurisdiction in a timely fashion they may lose their right
to do so at a later stage.*°° Even if neither of the parties raises any objection to
jurisdiction, the tribunal may still wish to consider the position. It will want to be
satisfied, for example, that it is a bona fide reference. If there are specific concerns,
for example about whether the particular dispute falls within the scope of the
arbitration clause, the tribunal may want to satisfy itself that it has jurisdiction to
proceed. Depending on the circumstances, however, it may consider it more
appropriate to continue with the reference unless and until a timely objection is
raised by one of the parties.7°”

Tribunal investigating its jurisdiction. Often the tribunal will have 5—061
accepted its appointment before being in a position to ascertain its jurisdiction,
but once it is able to do so the tribunal may decide to assess for itself whether it
has jurisdiction to hear the dispute. The tribunal does so by obtaining from the
parties and examining the arbitration agreement, the notice of arbitration and any
other documents which are relevant to the jurisdiction issue. If the tribunal

203 James Miller & Partners » Whitworth Street Estates (Manchester) Ltd, [1970] A.C. 583; Union of
India v McDonnell Douglas Corp [1993] 2 Lloyd’s Rep. 48 at 50. See paras 2-100 et seg. above.
204 See para.2—109 above.
205 Ror a fuller discussion of the tribunal’s jurisdiction, arising from the scope of the arbitration
agreement, see paras 2-071 et seq. above.
206 See para.5—065.
207 Given that the parties may lose their right to object, the tribunal may feel there is no harm in
proceeding because jurisdiction will be conferred by the parties having proceeded with the
reference: see para.2—-016.
 208 The Conduct of the Reference

decides to investigate its jurisdiction it should inform the parties accordingly. The
parties can then seek to satisfy the tribunal that it has jurisdiction to hear the
dispute on the basis of the existing agreement to arbitrate. Provided the tribunal
is so satisfied it should proceed with the reference. It will then be for a party who
objects to the tribunal’s jurisdiction to decide what steps to take and it may be that
a ruling from the tribunal or the court will follow,’ provided the objection is
made in a timely fashion.2°° If on the other hand the tribunal has concerns that it
in fact has no jurisdiction to determine the dispute, it can raise them with the
parties so that they can be properly explored and, if necessary, the parties can
agree an ad hoc submission to put the matter beyond doubt. Alternatively, if the
tribunal is not satisfied that it has jurisdiction and the parties do not agree to enter
into an ad hoc submission, the tribunal can rule on the issue.

5-062 Determination by the tribunal. The principle that the tribunal should
determine its own jurisdiction is firmly enshrined in s.30 of the Act which
provides that, unless the parties have agreed otherwise in writing,*'® the tribunal
may rule on its own jurisdiction,*"’ that is:

‘“(a) whether there is a valid arbitration agreement;

(b) whether the tribunal is properly constituted*"*; and

(c) what matters have been submitted to arbitration in accordance with the arbitration
agreement.””7!5

Accordingly, if the tribunal is not satisfied that it has jurisdiction, the parties
should be informed of this and that the tribunal proposes ruling on the issue. The
tribunal will usually give the parties an opportunity to make submissions on the
jurisdiction issue prior to making any ruling*'* and will then proceed to make its
decision on jurisdiction. This should be done in the form of an award.*'> If the
tribunal declines to act on the basis of lack of jurisdiction, either the claimant can
seek to pursue his case in court or he can apply to the court to challenge the

208 See paras 3-064 and 7-143 ef seg. below.

2 See para.5—066.
71° The requirement for any agreement between the parties to be “in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
11 On occasions the court will nonetheless effectively determine the tribunal's jurisdiction when
considering an application for a stay of court proceedings pursuant to s.9 of the Arbitration Act
1996. The Court of Appeal in Fiona Trust and Others v Yuri Privalow & Others [2007] EWCA 20
(affirmed in Premium Nafta Products Ltd v Pili Shipping Co Lid [2007] UKHL 40) has confirmed
however that the presumption is that the tribunal should be lett to determine its own jurisdiction
first if at all possible. See further para.7—-029 below.
712 Challenges to arbitrators are dealt with at paras +-159 ef seg. above.
713 The quotation is taken from s.30(1) of the Arbitration Act 1996.
714 Tt may be appropriate for the parties to be heard in order to comply with the tribunal’s general duty
to act fairly under s.33(1) of the Arbitration Act 1996, but this will depend upon the circumstances
of the particular case and the lack of jurisdiction may be so obvious that no purpose would be served
by receiving submissions from the parties.
215
So that a party who wishes to have the tribunal’s decision reviewed by the court may do so under
s.67 of the Arbitration Act 1996: see paras 8-054 ef seg. ;
 Preliminary Considerations 209

tribunal’s award as to jurisdiction under s.67 of the Arbitration Act 1996.2!° It has
been suggested that there may be a lacuna in the tribunal’s jurisdiction in that sub-
paragraph (c) quoted above might not entitle it to determine that there has been
no valid reference of any matters to arbitration.*!’ That would appear to be an
unnecessarily restrictive interpretation of the provision and one which is unlikely
to be followed.

Objection to the tribunal’s jurisdiction by a party. The previous 5—063

paragraphs dealt with the situation where the tribunal has concerns about jurisdic-
tion. However, a party may dispute that the tribunal has jurisdiction over him,
even if the tribunal itself considers that it does have jurisdiction and that the
reference may proceed. For example, a party may maintain that he never entered
into the arbitration agreement, or that he is not bound by it because it is invalid,
or he may dispute that the issues which the other party is attempting to refer to
arbitration fall within the scope of the arbitration agreement. Where one party
claims that the arbitration agreement (as opposed to the matrix agreement) has
been terminated by acceptance of a repudiatory breach of that agreement, this
again requires the tribunal to address whether there is a valid subsisting arbitration
agreement and is a matter of jurisdiction for the tribunal to determine.*'®

Courses of action available. The party contesting jurisdiction has various 5-064
courses of action open to him as follows?!”:

® he can refuse to participate at all in the arbitration and can then, if necessary,
exercise his right to challenge the award after it has been made,’”? or can
resist its enforcement.””! It is also possible for the party contesting jurisdic-
tion to commence court proceedings to pursue a substantive cause of action
and resist any application for a stay of those proceedings.*”* If the other party
has commenced arbitral proceedings and applies to the court for the appoint-
ment of an arbitrator under s.18 of the Arbitration Act 1996, the party
contesting jurisdiction may oppose that application.*** Alternatively he may

216 See also paras 8-054 ef seq. for challenges under s.67 of the Arbitration Act 1996.
217IT Mackley & Co Ltd v Gosport Marina Ltd [2002] EWHC 1315 (TCC).
218 Pursuant to Arbitration Act 1996, s.30(1)(a); see ABB Lummus Global Ltd v Keppel Fels Ltd [1999]
2 Lloyd’s Rep. 24.
219 4zov Shipping Co v Baltic Shipping Co [1999] 1 All E.R. 476.
220 Under s.67 of the Arbitration Act 1996. The award can be challenged whether or not it deals
expressly with jurisdiction: see Vee Networks Ltd v Econet Wireless International Ltd [2004] EWHC
2909; [2005] 1 Lloyd’s Rep. 192; LG Caltex Gas Co Ltd v China National Petroleum Corp [2001] 1
W.L.R. 1892. se ;
221 For example under s.66(3) of the Arbitration Act 1996. See, for example, Allied Vision Ltd v VPS
Film Entertainment GmbH [1991] 1 Lloyd’s Rep. 392 where the defendant resisted enforcement
under s.26 of the Arbitration Act 1950 which preceded s.66 of the Arbitration Act 1996.
222 Under s.9 of the Arbitration Act 1996 or under the court’s inherent jurisdiction: see paras 7-024
et seq.
223 See paras 7-095 and 7-096 below.
 210 The Conduct of the Reference

apply to court for a declaration or injunction in relation to the tribunal’s

jurisdiction”™*;
@ he may object to the tribunal’s jurisdiction under s.31 of the Arbitration Act
1996 and seek a ruling from the tribunal on the question ofjurisdiction under
s.30 of the Arbitration Act 1996. The tribunal’s ruling may be given by way
of an award on jurisdiction or as part of the tribunal’s award on the merits.
Assuming the tribunal decides against him, he must exhaust any arbitral
process available for resolving the issue and, if that is unsuccessful, he may
seek to challenge the tribunal’s award on jurisdiction or seek a declaration
from the court that an award on the merits is of no effect, in whole or in part,
for lack of jurisdiction’; or
@ he may seek an immediate determination from the court on the preliminary
question of the tribunal’s jurisdiction under s.32 of the Arbitration Act
1996.*7° He may take this course where, for example, the parties have agreed
that the tribunal should not have power to rule on jurisdiction, or where the
tribunal has declined to make an award on jurisdiction, but he will need
either the tribunal’s permission or agreement of all the parties and there are
various other criteria to be met as set out in paras 7-143 et seq. below.

5—065 Loss of right to object. What a party contesting jurisdiction cannot do is

to participate in the reference without making clear his objection to the tribunal’s
jurisdiction. If he does, the right to object will be lost and he cannot then seek to
challenge the tribunal’s jurisdiction after the award has been made, either by
challenging it under s.67 of the Arbitration Act 1996777 or by resisting its
enforcement.***

5—066 Time for raising objections. A party who takes part in the arbitration
proceedings and who objects to the tribunal’s jurisdiction must raise his objection
promptly. If the objection arises at the outset then it must be made not later than
the point at which that party takes his first step in the proceedings””® to contest the
merits on a matter in relation to which he disputes jurisdiction.2*° Appointing or
participating in the appointment of an arbitrator will not however preclude a party
from objecting to jurisdiction.”*' If the basis for objection arises during the course

** Section 72 of the Arbitration Act 1996; see para.7—146. The scope of s.72 is limited and is to be read
in light of the Court of Appeal’s decision in Fiona Trust and Others v Yuri Privalov & Others (2007]
EWCA 20.
2° Under s.67 of the Arbitration Act 1996,
226 a for example Esso Exploration & Production UK Ltd v Electricity Supply Board [2004] EWHC
U2,
27 See paras 8-054 et seq.
*°8 He will have lost the right to object: s.73(1) and (2) of the Arbitration Act 1996.
** Seeking an extension of time within which to make submissions may amount to such a first step:
He Shipping Pte Ltd v China Ocean Shipping Co (The “Jing Hong Hai’’) [1989] 2 Lloyd’s
Rep.
DLL.
39 Section 31(1) of the Arbitration Act 1996.
25! Section 31(1) of the Arbitration Act 1996.
 Preliminary Considerations 211

of the proceedings, it must be raised as soon as possible thereafter.”** In either case

the tribunal may allow a late objection if it considers the delay justified.*** Failure
to make a timely objection may lead to the loss of the right to object under s.73 of
the Arbitration Act 1996.7*4

Refusing to participate in the arbitration. It is always open to a 5-067

party who denies that the tribunal has jurisdiction to ignore the arbitration
proceedings altogether and, if necessary,** either to challenge?*® or to resist
enforcement of any award.**” Section 72(2)(a) of the Arbitration Act 1996 specifi-
cally confers on a party who takes no part in the proceedings the same right to
challenge an award for lack of jurisdiction as is given to a party to the reference.
This is a high risk strategy, however, and there are usually very good reasons for
wanting an early ruling on jurisdiction from the tribunal or the court. In partic-
ular, there is a risk that a party may be held to have taken part in the proceedings
and consequently to have lost the right to object.7** Even if this does not apply, at
the enforcement stage the only question will be whether the tribunal had jurisdic-
tion and there will be no re-opening of the merits of the case. By taking this course
therefore a party will have lost the opportunity to contest the dispute on its merits.
Alternatively, a party who takes no part in the reference may apply to the court for
a declaration or injunction in relation to the tribunal’s jurisdiction.**” This avoids
many of the problems referred to. Section 72(1) of the Arbitration Act 1996
imposes no specific time limit within which the application must be made, but it
will usually make sense for all parties to have the application dealt with at an early
stage.

Obtaining an award on jurisdiction. Rather than refusing to partici- 5—068

pate in the arbitration, a party may raise with the tribunal his challenge to the
jurisdiction to proceed with the reference. He may ask the tribunal to receive
submissions on the point and then to make an award dealing with the issue of
jurisdiction.**° He cannot compel the tribunal to give an award on jurisdiction
alone,**! but if it does so the only recourse for a party who disagrees with the
ruling is to challenge the tribunal’s decision under s.67 of the Arbitration Act
19962*2; there can be no challenge of the tribunal’s decision to rule on its

232 Section 31(2) of the Arbitration Act 1996.

233 Section 31(3) of the Arbitration Act 1996.
234 See para.8-065 below.
235 ie. because an award has been made against him.
236 Under s.67 of the Arbitration Act 1996. See paras 8-054 et seq. below.
237 Section 66(3) of the Arbitration Act 1996. See para.8—004 below.
238 Under s.73 of the Arbitration Act 1996. See para.8-065 below.
239 Section 72(1) of the Arbitration Act 1996. See paras 7-146 et seq. below.
240 See s.31(4)(a) of the Arbitration Act and para.6—013 below.
241 Rymar BV v National Iranian Tanker Co (The “Trade Fortitude”), [1992] 1 Lloyd’s Rep. 169.
242 See generally paras 8-054 e/ seg. There can be no challenge under s.67 to a tribunal’s decision to
decline jurisdiction: see LG Caltex Gas Co Ltd v China National Petroleum Corpn [2001] EWCA Ciy
788.
 212 The Conduct of the Reference

jurisdiction.*** It is common for the tribunal to agree to issue an award on

jurisdiction alone where so requested because, if its decision is to be challenged in
the courts, that process can be commenced without delay. The tribunal will be
aware of the potential delay and expense if it refuses to deal with an objection to
its jurisdiction until the issue of its final award, by which time the merits of the
substantive issues in the reference will have been considered in full, and its
decision is that it in fact had no jurisdiction to deal with the matters in dispute.
On the other hand the nature of the objection may be such that the tribunal could
not properly form a view on jurisdiction until it had heard evidence on the merits
of the case. In these circumstances the tribunal can exercise its power to deal with
the objection to jurisdiction in its award on the merits.*** If the tribunal adopts
this course then, provided the objection to jurisdiction has been raised,**> the
objecting party will have 28 days from the date of the award on the merits to
challenge the jurisdictional determination under s.67 of the Arbitration Act
1996.2

5-069 Status of tribunal’s determination. Although the tribunal can and

should inquire into the merits of any objection to jurisdiction, its determination on
the matter is subject to challenge, whether it has been made in an award on
jurisdiction or in an award on the merits.**7 The party who is challenging the
tribunal’s jurisdiction must therefore accept the tribunal’s decision or apply
promptly to the court. The court will then look at the issue afresh?** and may
confirm the award, vary it or set it aside in whole or part.?*?

5-070 Applying to the court.”°° Instead of seeking an award from the tribunal, a
party may apply immediately to the court for a preliminary ruling on the tribunal’s
jurisdiction under s.32 of the Arbitration Act 1996, However, this is only available
if all the parties agree or the tribunal gives its permission. If the application is
made with the permission of the tribunal but not all the parties agree to the
application, the applicant will have to persuade the court that there is good reason
why it (rather than the tribunal) should make the determination and set out the
grounds on which it is based. The applicant will also in these circumstances have

43 Kalmneft JSC v Glencore International AG [2002] 1 All E.R. 76. That case involved an attempt
to
challenge the underlying decision to rule on jurisdiction under s.67 of the Arbitration
Act 1996, but
it is difficult to see how any other form of challenge to a decision to rule on jurisdiction
would
succeed either.
“4 Section 31(4)(b) of the Arbitration Act 1996,
** To satisfy the requirements of s.73(1) of the Arbitration Act 1996: see para.8—065
below.
**° Under s.70(3) of the Arbitration Act 1996. See para.8-063 below. See for example People’s
Insurance
Co of China (Hebei Branch) v Vysanthi Shipping Co Ltd (The “Joanna V”) [2003]
EWHC 1655;
[2003] 2 Lloyd’s Rep. 617.
*” Under s.67 of the Arbitration Act 1996. See paras 8-054 et seq. below.
*** The same applies in the context of resisting enforcement of an award
on the basis of a challenge to
BN tribunal’s jurisdiction: Allied Vision Lid v VPS Film Entertainment GmbH
[1991] 1 Lloyd’s Rep.
*4#° Section 67(3) of the Arbitration Act 1996,
*°° Applications to the court to resolve questions of jurisdiction during
the arbitration are dealt with
more fully in paras 7-143 er seq. below.
 Preliminary Considerations 218

to show that it is likely to produce substantial savings in costs and that the
application was made without delay. An application to court may be appropriate
where, for example, the parties have exercised their right to agree that the tribunal
shall not have power to deal with an objection to jurisdiction.?>!

(c) Seat of the arbitration?>?

Establishing the seat of the arbitration. The tribunal will also need 5-071
to give consideration to the seat of the arbitration. Under English law an arbitra-
tion always has to have a seat,”°* even though it may not be determined until the
arbitration is commenced.” Section 3 of the Arbitration Act 1996 provides that
the seat of the arbitration means the “‘juridical seat”’ designated by the parties to
the arbitration agreement or by any institution*® or person vested with that power
or by the tribunal if it is so authorised by the parties.7°° Once the seat is
established, it can only be moved in accordance with the provisions of s.3.7>”

Importance of the seat. Determining the “seat” of an arbitration is 5-072

extremely important, for a number of reasons. First, it will usually (but not
necessarily*>**) be where meetings or hearings will take place. What happens if the
tribunal holds hearings elsewhere contrary to the express agreement of the parties?
To hold the hearings in another country would render any award subject to
challenge for serious irregularity, provided substantial injustice could be demon-
strated.*°? To hold the arbitration in a location different from, but within the same
country as, that expressly agreed between the parties will not necessarily do so.7°
In many cases, however, the parties will either be willing to vary their agreement
so as to allow the hearing to be held elsewhere or, if the arbitration is subject to
institutional rules, they may empower the tribunal to do so.’°!
Second, the seat of an arbitration is important because it establishes the curial
law of the arbitration and may determine each of the procedural law applicable to
the arbitration,” the law of the arbitration agreement”® and the proper law ofthe

251 Under s.30(1) of the Arbitration Act 1996.

252 The seat of arbitration is dealt with more fully at paras 2-100 ef seq. above.
253 Dubai Islamic Bank PFSC v Paymentech Merchant Services Inc [2001] 1 Lloyd’s Rep. 65.
254 See para.2—102.
255 The ICC Rules provide (Art.14.1) that in the absence of agreement between the parties the place
of arbitration is fixed by the ICC Court.
250 Many institutional rules authorise the tribunal to determine the seat in the absence of agreement
between the parties: see e.g. Art.16.1 of the UNCITRAL Arbitration Rules.
257 Dubai Islamic Bank PJSC v Paymentech Merchant Services Inc [2001] 1 Lloyd’s Rep. 65.
258 See para.5—073.
259 See paras 8-072 et seq. below. Substantial injustice may indeed be caused if the proceedings are
subject to a different procedural law as a result.
260 Tongyuan (USA) International Trading Group v Uni-clan Ltd, unreported [2001] QBD (Comm).
261 See, e.g. Art.16.2 of the LCIA Rules. This provision is not expressed to be subject to agreement
otherwise by the parties.
202 See para.2—100.
63 See para.2-096.
 214 The Conduct ofthe Reference

substantive contract.?°t It will also determine which provisions of the Arbitration

Act 1996 apply?® and in particular what powers exist to support the arbitral
process and whether the English court has jurisdiction to review any award.?°°
Agreement as to the seat of an arbitration is akin to agreement to an exclusive
jurisdiction clause in that it confers on the courts of the seat the exclusive right to
exercise a limited supervisory jurisdiction over the arbitration.*°’ Accordingly, any
challenge to any interim or final award is to be made only in the courts of the place
designated as the seat of the arbitration.*”
The seat of the arbitration is also important in the context of the recognition
and enforcement of any award and it is relevant in determining whether it is a
“New York Convention award” to which Pt III of the Arbitration Act 1996
applies.2°? The grounds for challenging or resisting enforcement of a New York
Convention award are limited and the seat of the arbitration is specifically relevant
to certain of those grounds.’”° Finally, the seat must be determined because s.52(5)
of the Arbitration Act 1996 requires the award to state the seat of the arbitration
and s.53 confirms that, where the seat of the arbitration is in England, Wales or
Northern Ireland, an award is treated as having been made there unless otherwise
agreed in writing’! by the parties.

5-073 Place of hearings. Although the seat is important for the reasons set out
above, the tribunal may select some other place or places for the arbitration
hearing or part of it to take place. They may do so for reasons of convenience, for
example in connection with the taking of evidence from particular witnesses who
are located somewhere other than the seat of arbitration. Subject to the general
duty imposed by s.33(1) of the Arbitration Act 1996, the tribunal has a wide
discretion to decide upon when and where any part of the proceedings shall take
place, subject to agreement in writing between the parties.2”? The fact that
hearings may take place in other locations does not of itself alter the seat of
arbitration.””*

264 See paras 2-093 et seq.

*°° The scope of application of the 1996 Act and the way in which the seat is to be determined are dealt
with in ss.2 and 3 of the Act.
°° Weissfisch v Julius [2006] EWCA 218; A v B [2006] EWHC 2006; Cv D [2007] EWHC 1541; Dubai
Islamic Bank PFSC v Paymentech Merchant Services Inc [2001] 1 Lloyd's Rep. 65.
*°7 Av B [2006] EWHC 2006. ;
28 Cv D [2007] EWHC 1541; A v B [2006] EWHC 2006.
20 As defined in s.100(1) of the Arbitration Act 1996, or indeed whether it is a Washington Convention
award under the Arbitration (International Investment Disputes) Act 1966 or a “foreign award”
under Pt II of the Arbitration Act 1950. See further paras 8-020 er seg.
* Arbitration Act 1996, s.103(2)(b)—validity under the law of the place where it was made, s.103(2)(e)
—composition of tribunal or arbitral procedure not in accordance with law of country where
it took
place, and s.103(2)(f)—-setting aside or suspension by a competent authority of the country
in which
made: see paras 8-031, 8-038 and 8-040. ; :
*7”! The requirement for any agreement between the parties to be “in writing” stems
from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
*72 Section 34(2)(a) of the Arbitration Act 1996.
“3 Dubai Islamic Bank PJSC v Paymentech Merchant Services Inc. [2001] 1 Lloyd’s Rep.
65.
 Preliminary Considerations 215

(d) Interim measures

Types and purpose of interim measures. Consideration should also 5-074

be given at an early stage to whether interim measures should be ordered. The
term “interim measures” is not used in the 1996 Act, but is adopted here to refer
to orders or directions on such matters as security for costs, interim preservation
orders and injunctions. These orders are often designed to protect the position of
the parties and/or preserve the status quo pending the outcome of the arbitra-
tion.?’* However, they may also be preservation orders where the tribunal exercises
its procedural powers in relation to evidential matters.*”°

From whom to seek interim measures.’”° The parties are free to 5—075
agree what powers the tribunal is to have with regard to interim measures,””’ but
unless the parties have agreed otherwise in writing then the tribunal has the
powers set out in s.38(3), (4) and (6) of the Arbitration Act 1996.?”5 Interim
measures may also be sought from the court,*”” but in the ordinary course the
parties would be expected to apply to the tribunal in those cases where the tribunal
has the power to make them.7*° For the court’s powers in this regard see paras
7-180 et seg. This section deals with the position of the tribunal in relation to
which the following matters should be considered**':

1. Availability or effectiveness of the tribunal—If the tribunal is not yet

constituted,”** or cannot act effectively, or is not immediately available to
act, or the relief sought relates to third parties over whom the tribunal has
no jurisdiction, then an application should be made to the court. Certain
institutions offer the facility to constitute the tribunal on an expedited
basis in cases of exceptional urgency’*’ or provide other ways in which
expedited relief can be sought.”** If this facility is available, the applicant
is then faced with a choice as to whether to seek the formation of an

274 Tn the context of the court granting orders in support of arbitration, see Lord Mustill’s categorisa-
tion into three groups described in para.7—006 below.
275 See in particular s.38(4) and (6) of the Arbitration Act 1996.
276 For the position in relation to interim injunctions see para.5—077 below.
277 Section 38(1) of the Arbitration Act 1996.
278 See paras 5-076 et seq.
279 Under s.44 of the Arbitration Act 1996. See generally paras 7-179 et seq. below. The power to order
security for costs is however reserved exclusively to the tribunal: see para.5—079 below.
280 See 5,44(5) of the Arbitration Act 1996 and para.189 of the DAC report. This ties in with the
general principle of non-intervention set out in s.1(c) of the Arbitration Act 1996. See further
though para.5—077 below.
281 For enforcement of the tribunal’s procedural orders see paras 5—191 et seg. below.
282 See for example Cetelem SA v Roust Holdings Lid [2005] EWHC 300.
283 See Art.9 of the LCIA Rules. The application to the LCIA Court must set out “specific grounds for
exceptional urgency”. If the application is granted by the LCIA Court, even a three member tribunal
can be constituted in a matter of a few days.
28+ The ICDR, affiliated to the AAA, has introduced a procedure in its International Arbitration Rules
effective from May 1, 2006 whereby an application can be made to an interim, emergency arbitrator,
who is appointed urgently by the ICDR solely for the purpose of considering an application for
interim relief.
216 The Conduct of the Reference

expedited tribunal from whom to seek the interim measure or to make an

application to the court under s.44(3) of the Arbitration Act 1996,
although any order made under s.44 will normally only inure until the
tribunal is able to consider the matter itself.**°

2. Breadth of relief available—Subject to the considerations set out in the

previous paragraph, the applicant should consider the scope of the relief
available from the court and the tribunal respectively when deciding from
whom to seek the desired interim measures. The court retains a relatively
broad discretion to grant interim measures.**° The powers available to the
tribunal under the Act cover security for costs, orders relating to property
which is the subject matter of the proceedings and preservation of evi-
dence.**’ These powers apply unless agreed otherwise. In addition the
parties may agree to confer on the tribunal a power to make provisional
awards under s.39 of the Arbitration Act 1996, including orders as to
payment of money or the disposition of property.*** 288 If however the
arbitration is being conducted pursuant to institutional or other arbitra-
tion rules,?*? the scope of relief available is likely to be governed by those
rules and not by the default provisions of the Act. Institutional rules vary
in the extent to which they allow tribunals to grant interim relief?” and
this may mean an application to court is needed to secure the relief
sought.

3. Third parties—A tribunal does not have jurisdiction over a third party,
even though that third party may hold the money, goods or property in
dispute. So if an order which binds third parties is required an application
should be made to the court.

4. Need for a without notice order—In some cases, a without notice order
will be more effective because it is feared that the respondent will take
action to frustrate the order if he is given advance notice of it, such as by
paying funds out of a targeted bank account. The willingness of the court
to grant without notice injunctions presents a considerable advantage to
the applicant when compared with applying to the tribunal for relief;

*8° See Econet Wireless Ltd v Vee Networks Lid and Others [2006] EWHC 1568 at [13]-{14]. In that case,
an interim ex parte injunction granted under s.44 was discharged because, among other
reasons, the
applicant had taken no steps subsequent to the interim order to commence
LCIA arbitration
proceedings or otherwise to avail itself of the ability to seek expedited formation
of an LCIA
tribunal under Art.9(1) of the LCIA Rules in cases of exceptional urgency.
286
See paras 7-179 et seq. below. ,
*87 Section 38 of the Arbitration Act 1996.
288 See paras 5-085 and 6-021 below.
289 See para.5—101 below.
” Contrast Art.23(1) of the ICC Rules: the tribunal may “order any interim
or conservatory measure
it deems appropriate”, with Art.25.1(b) and (c) of the LCIA Rules which
allow the tribunal to order
the preservation of property which is the subject matter of the dispute
and to order on a provisional
basis any relief which the tribunal would have the power to grant in its award.
 Preliminary Considerations 217

tribunals cannot at present grant without notice applications.??'! Even

before the court however very good reason is needed to justify a hearing
without notice and an interim injunction obtained without notice will be
discharged if it is subsequently determined that the order should not have
been given on a without notice basis.?7°?
5. Effectiveness—It is sometimes the case that the interim measure is not
complied with and has to be enforced. The applicant will need to weigh up
the relative effectiveness of obtaining an order from the court or the
tribunal if enforcement is likely to be necessary. A striking example of the
potential ineffectiveness of the tribunal’s orders occurred in Kastner v
Jason’”’ where the parties agreed to arbitration under Jewish law and the
Beth Din ordered by consent that the respondent could not sell the
property in dispute. The property was nevertheless sold in breach of
the order. The claimant subsequently obtained a monetary award against
the respondent but was unable to enforce against the property, notwith-
standing the registration of a caution by the claimant of which the third
party purchaser had constructive notice, because the Beth Din’s orders
gave no proprietary right against the property.?”*

Scope of tribunal’s powers. As mentioned above?” the parties may agree 5-076
on what powers the tribunal should have to grant interim measures. However, the
Arbitration Act 1996 provides a default provision so that unless the parties have
agreed otherwise in writing, the tribunal has the powers set out in s.38(3), (4) and
(6) of the Act relating to security for costs, preservation of property and preserva-
tion of evidence. These powers are addressed in paras 5—079 et seg. below. Before
doing so, the tribunal’s power to grant interim injunctions will be considered.

Interim injunctions. Parties often seck interim measures in the form of an 5-077
interim injunction directed at the other party to the reference requiring them to
do or refrain from doing something in relation to the dispute. The interim
injunction continues according to its terms during the course of the reference until
the award is made, when it may or may not be replaced by a final injunction.*”° On

9! Kollowing much debate revised articles of the Model Law have now been published which
contemplate the tribunal making a preliminary order directing a party not to frustrate the purpose
of an interim measure: see Appendix 4. At the time of publication, revision of the UNCITRAL
Arbitration Rules was under discussion. Previous suggestions that the rules be amended to include
a power to grant ex parte or without notice interim measures have been rejected. For details of the
ongoing process see Notes of the UNCITRAL Working Group II (Arbitration), in particular draft
amendments to the rules considered at the Group’s 45th session, dated December 6, 2006
(wwm.uncitral.org).
292 Econet Wireless Ltd v Vee Networks Ltd and Others [2006] EWHC 1568 at [12].
293 2004] EWCA Civ 1599; [2005] 1 Lloyd’s Rep. 397 affirming decision at [2004] EWHC 592; [2004]
2 Lloyd’s Rep. 233.
294 The Model Law has been revised in an attempt to enhance the enforceability of interim measures:
see Appendix 4.
°5 Paragraph 5-075.
296 See para.6—107.
 218 The Conduct of the Reference

the face of it, the power to grant interim injunctions is within the wording of
s.48(5)(a) of the Arbitration Act 1996 which confers on the tribunal the same
powers as the court to order a party to do or refrain from doing anything. However
that provision appears in the Act under the sub-heading ‘‘Award’’’’’ and it is
doubtful that the tribunal could issue an interim injunction in the form of an
award, because an award must finally dispose of the issues with which it deals??®
and many interim injunctions are not sought on the basis that they constitute a
final determination of the issues in question. Rather they are intended to preserve
the status quo pending the outcome of the arbitration. Accordingly, s.48(5)(a) of
the Arbitration Act 1996 would not seem to confer a power to grant an interim
injunction in the form of an award. The parties may however have agreed pursuant
to s.39 of the Arbitration Act 1996 that the tribunal should have power to make
provisional awards,”” in which case the tribunal may issue an interim injunction
in the form of a provisional award under that section.*°° Absent such agreement
the question then arises whether a tribunal may instead issue a procedural order
or direction rather than an award requiring a party to do or refrain from doing
something. The answer would seem to be yes, provided the order or direction is
within the powers conferred by s.38 of the Arbitration Act 1996 in that it relates
to property which is the subject matter of the proceedings or the preservation of
evidence or is a power that the parties have agreed the tribunal should have.*”!

5-078 Practical limitations. The limitations on the tribunal’s powers described in

the previous paragraphs as regards availability, third parties, without notice orders
and effectiveness*”’ are particularly relevant in the context of interim injunctions,
because they are often required urgently at the outset of the proceedings in order
to preserve the status quo. Putting those matters on one side, how useful will an
interim injunction from the tribunal be in practice? Even if the tribunal has been
established and exercises its power to order an injunction, the tribunal does not
have the coercive powers** of the court to deal with any breach. A tribunal may
take a very dim view of one of the parties to the reference ignoring an injunction
it has granted, but there is little the tribunal can do in practice to require
compliance within the urgent time frame on the basis of which most interim

"7 Tt covers ss.46 to 58 of the Arbitration Act 1996.

28 See paras 6-078 et seg. above.
*” See paras 5-085 and 6-020 et seg. The power to make provisional awards is often expressly
set out
in institutional rules: see e.g. Art.25 of the LCIA Rules and Art.23 of the ICC Rules.
°° Assuming the tribunal has power to order a final injunction under s.48(5)(a).
In Vertex Data Science
Lid v Powergen Retail Ltd 2006] EWHC 1340 the parties excluded the power to grant
injunctions
under s.48 and though they conferred power to make a provisional award under
s.39 that is only
available in respect of any relief the tribunal would have power to grant in a
final award. Accordingly
the tribunal had no power to grant injunctive relief in relation to performance of
the contract. _
*°! For example by the adoption of arbitration rules containing a broad power
to grant interim measures
such as that contained in Art.23 of the ICC Rules.
302 See para.5—075 above.
303
e.g. theep]imposition
991 t10
offsa fine
Ane
or even
ey
a: term of =]imprisonme
i
nt for
¥
contempt of court when orders are
breached.
 Preliminary Considerations 219

injunctions are sought.*** It may be that ultimately a peremptory order could be

made by the tribunal and enforced by the court pursuant to s.42 of the Arbitration
Act 1996 but this is likely to take some time. If the interim injunction is in the
form of an order,*”° it is not possible to make use of the court’s coercive powers
by enforcing it as an award through the courts.*°° Even if the injunction is in the
form of an award, enforcement takes time. These considerations suggest that
where there is no urgency, no third parties are involved and the tribunal has power
to grant the required injunctive relief, a party should apply to the tribunal rather
than the court. Otherwise, and particularly where a party is seeking urgent
measures to preserve assets or evidence,*’’ these may need to be sought from the
court under s.44(2)(e) of the Arbitration Act 1996.5

Security for costs. Section 38(3) of the Arbitration Act 1996 enables the 5-079
tribunal to order a claimant to provide security for the costs of the arbitration.*°”
This was a major change from the position prior to the 1996 Act when application
had to be made to court in the absence of agreement by the parties to confer this
power on the tribunal. Also, the House of Lords had decided that the court had
power to order security for costs even in the context of an international arbitration
under institutional rules where the only connection of the parties or the dispute
to England was that they had agreed, directly or indirectly, to arbitrate here.*'°
That decision was widely criticised and s.38(3) reinforces that this is a matter for
the tribunal, not the court. Section 38(3) also provides that the power shall not be
exercised on the ground that the claimant is:

(a) an individual ordinarily resident outside the United Kingdom; or

(b) a corporation or association incorporated or formed under the law of a

country outside the United Kingdom, or whose central management and
control is exercised outside the United Kingdom.

304 The tribunal’s powers under s.41 of the Arbitration Act 1996 are cumbersome and directed to the
“proper and expeditious” conduct of the reference, rather than to the sort of matters for which
interim injunctive relief might be sought: see paras 5—192 er seq. above.
305 Which is likely unless it has been granted as a provisional award pursuant to a power conferred
under s.39 of the Arbitration Act 1996: see para.5—077 above.
306 See para.6-003. On the other hand, the powers under ss.41 and 42 of the Arbitration Act 1996
would not apply to an award granting an interim injunction which would have to be dealt with by
the normal mechanism for enforcement of an award by the court: see paras 8-002 ef seq. For the
court’s powers to grant interim injuctions under s.44 of the Arbitration Act 1996, see paras 6-107
and 7-195 below.
307 7 e, a freezing injunction or search order.
308 See comments in the DAC report, para.201 that these powers were intentionally left to be applied
by the courts. See also para.6-021 for a discussion of the availability of such relief by way of
provisional award. '
309 See generally paras 190 to 198 of the DAC report. The power extends to counter-claimants by virtue
of s.82(1) of the 1996 Act. alia
310 Coppee-Lavalin SA/NV v Ken-Ren Chemicals and Fertilizers Ltd (In Liquidation) (1994) 2 AN E.R.
A495 FL,
 220 The Conduct of the Reference

Certain institutional rules also provide expressly that the tribunal has power to
order security for costs.*!!

5—080 Basis of order for security. Save as mentioned the 1996 Act does not
specify the basis on which security for costs should, or should not, be granted and
the tribunal therefore has a broad discretion.*'* It seems likely though that in
practice the tribunal will have regard to similar considerations as those applied by
the court in dealing with applications under CPR Pt 25.°'* Security may be given
in various forms including typically by way of bank guarantee, although it is
important to ensure that the guarantee will remain in place pending the final
determination of costs payable, even if that is to be done by the court pursuant to
s.63(4) of the Arbitration Act 1996.3!*

5-081 Preservation of property. Section 38(4) of the Arbitration Act 1996

provides that the tribunal may give directions in relation to property*!> subject to
two provisos. First, the property must be the subject-matter of the reference or
property as to which a question arises in the proceedings. Secondly, the property
must be owned by or be in the possession of a party to the proceedings. This
reflects the tribunal’s inability to enforce its orders against third parties.*'© Relief
may be sought from the court if the provisos are not met or for some other reason
the tribunal is unable to act or to act effectively.*'”

5—082 Types of order relating to property. Section 38(4) specifies that the
tribunal may order:

(a) the inspection, photographing, preservation, custody or detention of the

property by the tribunal, an expert or a party; or
(b) that samples be taken from, or any observation be made of or experiment
conducted upon, the property.

5—083 Preservation of evidence. Section 38(6) of the Arbitration Act 1996

empowers the tribunal to give directions for the preservation of any evidence.

*1! See for example Art.25.2 of the LCIA Rules.

"In Rotary Watches Ltd v Rotary Watches (USA) Inc, [2004] W.L. 3200214 at para.6, security
for
costs was said to have been granted both on the basis that the respondent was impecunious
and
because it was outside the jurisdiction.
*15 See though the discussion at paras 364 to 369 of the DAC report.
“In Rotary Watches Ltd v Rotary Watches (USA) Inc, [2004] W.L.. 3200214
the bank guarantees were
due to expire before the court could conclude a detailed assessment of costs
but in the circum-
stances the court issued a certificate for interim costs on a summary
assessment.
315
Replacing the power previously derived from s.12(1) of the Arbitration
Act 1950: see The ‘“Vasso”’
(OSS SPAIN: RewZ lle
316
See para.5-075 above.
*” Under s.44(2) of the Arbitration Act 1996. See para.7—-193 below,
 Preliminary Considerations 221

Again the order can only be directed at a party to the proceedings and applies to
evidence in his custody or control. There may however be relief available from the
court if third parties are involved or for some other reason the tribunal is unable
to act or to act effectively.*'* Any directions from the tribunal for the preservation
of evidence must be made for the purposes of the particular reference to arbitra-
tion and not to preserve evidence for some other proceeding, actual or contem-
plateds???

Security for the award. In the absence of agreement between the parties 5—084
specifically conferring the power to do so, a tribunal cannot order security for the
award. Some institutional rules permit the tribunal to order security for the
award.*°
It appears that even if the parties agree to confer on the tribunal power to order
provisional relief under s.39 of the Arbitration Act 1996,*7' that would not be
sufficient to allow the tribunal to order security for the award. This is because such
an order is not “relief which [the tribunal] would have power to grant in a final
award” as required by the statutory provision.

(e) Provisional relief ***

Power to grant provisional relief. If the parties have conferred on the 5—085
tribunal the power under s.39 of the Arbitration Act 1996 to order provisional
relief, consideration should be given as to whether it is appropriate to exercise that
power. The power, if conferred, enables the tribunal to order on a provisional basis
any relief which it can order in a final award.*?* The power is exercised by the
making of a provisional award and is therefore an exception to the principle that
an award must finally determine the issues with which it deals.*** It must be
emphasised, however, that the power to grant provisional relief only arises if the
parties have agreed in writing*”® that the tribunal is to have it.

Types of provisional relief. Some guidance is given in s.39(2) of the 5—086

Arbitration Act 1996 as to the types ofprovisional relief envisaged.**° In particular
it provides that the power includes:

318 Under s.44(2) of the Arbitration Act 1996. See para.7—192 below.
319 Although there may of course be some other means of doing so, e.g. by an application to court.
320 See, e.g. Art.25.1(a) of the LCIA Rules.
521 See para.5—085 below.
322 This is dealt with more fully in paras 6-020 e7 seq. below.
323 Hor the relief and remedies which a tribunal can award see paras 6-096 e7 seq. below.
324 See para.6—020 below.
325 The requirement for any agreement between the parties to be “‘in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
326 Though not specifically mentioned, relief by way of interim injunction may presumably also be
granted pursuant to this section: see para.6—021 below.
 222 The Conduct of the Reference

“(a) a provisional order for the payment of money or the disposition of property as
between the parties; or

(b) an order to make an interim payment on account of the costs of the arbitra-
tion.”

Section 39 would not empower an arbitrator to order a freezing injunction or

search order.*”’

5-087 When provisional relief appropriate. The power to grant provisional

relief may be very useful for example in trades and industries where cash flow is
of particular importance.*** The construction industry is one example, although
the mandatory reference of disputes to adjudication under most construction
contracts renders applications for provisional relief from the tribunal less frequent.
Nevertheless it is still included in the standard form rules used in that industry.*??
Similarly in the shipping field it may be useful to give the tribunal power to grant
interim payment of freight or to order the sale of cargo, prior to the final
determination of the dispute. Provisional relief may also be appropriate where the
contractual scheme agreed between the parties envisages that payment will be
made in the circumstances which have transpired.*°

5—088 Provisional decision subject to final award. It is clear from s.39(3)

of the Arbitration Act 1996 that any provisional relief is subject to the final
decision of the tribunal on the case. It must therefore be taken into account and
finally determined in a subsequent award or awards of the tribunal dealing with the
merits of the dispute and/or costs. Section 39 also specifically makes clear that it
does not affect the power under s.47 of the 1996 Act to make more than one
award.

5. ASCERTAINING THE PROCEDURE

(a) General considerations

5—089 Freedom of the parties to choose the procedure. Section 1(b) of

the Arbitration Act 1996 sets out the general principle that party autonomy
prevails subject only to “such safeguards as are necessary in the public interest”.
This principle reflects the fact that arbitration is consensual and, subject to certain
restrictions, the parties are free to determine the procedure which is to be followed

/iSee paralo—02Ih
*8 See para.203 of the DAC report.
*” See, e.g. r.10 of the Construction Industry Model Arbitration Rules.
42) oo (No.12) Ltd v Harland and Wolff Shipbuilding and Heavy Industries Ltd [2001]
EWCA Civ
 Ascertaining the Procedure 223

in the reference.**' Where the law governing the procedure is English law their
freedom is restricted by the mandatory provisions of the Arbitration Act 19963°2
and the public interest,** including principles of natural justice and fairness.*** In
the international context unfairness or other failures to comply with provisions of
international conventions as to procedure may lead to the setting aside of an award
or problems with recognition or enforcement.**> Apart from such considerations,
the principle of party autonomy governs the procedures to be followed.**°

Options available to the parties. The parties may specify their own 5—090
procedure, or they may adopt a set of procedures by specifying arbitration under
particular institutional or other rules.**? They may give the tribunal a specific
power to regulate the procedure as it thinks fit,*** or they may not consider the
position at all. Where the arbitration agreement is contained in a clause by which
the parties agree to submit future disputes to arbitration, without specifying that
any institutional rules are to apply, there will often be few, if any, specific
procedural provisions set out in the arbitration agreement. The parties may
nevertheless seek to agree the procedural and evidential rules to be adopted,
although this will often prove more difficult after the dispute has arisen. If they are
unable to do so the tribunal will control the procedure and form ofthe arbitration
and make decisions on evidence.**? Under English law, the parties’ agreed proce-
dure will prevail over the tribunal’s wishes and it cannot waive or dispense with
matters agreed between them.**° A material departure by the tribunal from such
agreed procedure may constitute a serious irregularity under s.68(2)(c) of the
Arbitration Act 1996, and may result in the award being remitted, set aside or

331 Section 34(1) gives an overriding right to the parties to agree the procedure, but is drafted in such
a way as to give apparent prominence to the tribunal’s right to decide such matters: see further
para.5—034 above.
332 Section 4(1) and Sch.1 to the Arbitration Act 1996.
333 Section 1(b) of the Arbitration Act 1996.
334 These are of course in any event now required in accordance with the general duty on the tribunal
under s.33(1) of the Arbitration Act 1996, which is consistent with the ECHR: see para.1-038. See
also paras 5—038 et seq. above.
335 See Redfern & Hunter, (4th edn, 2004), para.6—01.
336 Sections 34(1) and 38(1) of the Arbitration Act 1996. See also the comments of Lord Mustill in
Coppee-Lavalin SA/NV v Ken-Ren Chemicals and Fertilizers Ltd (In Liquidation) [1994] 2 AI E.R.
449 at 458, HL. This principle is also enshrined in the Model Law, Art.19(1) of which states:
“Subject to the provisions of this Law, the parties are free to agree on the procedure to be followed
by the tribunal in conducting the proceedings.” In Sinclair v Woods of Winchester Ltd [2005] EWHC
1631; 102 Con. L.R. 127, the court rejected as “plainly wrong and almost grotesquely unfair to the
arbitrator” the submission that he should have disregarded the agreement reached between counsel
that a particular report should not be referred to by him.
337 See para.5—101 below.
338 Amalgamated Metal Corp Ltd v Khoon Seng Co [1977] 2 Lloyd’s Rep. 310 at 317.
339 Section 34(1) of the Arbitration Act 1996.
340 Section 34(1) of the Arbitration Act 1996. See also Amalgamated Metal Corp Ltd v Khoon Seng Co
[1977] 2 Lloyd’s Rep. 310. The position is less clear with regard to a procedure agreed by the parties
after the arbitrator has been appointed and to which he has some fundamental objection. Pre-
sumably the arbitrator can resign if for good reason he objects to what the parties have agreed
subsequent to his appointment. See the discussion at para.5—067 above.
 224 The Conduct of the Reference

declared to be of no effect.3#! If however the digression from the parties’ agreed

procedure was insignificant it would not be a serious irregularity because it would
not cause substantial injustice.**

5-091 Institutional rules. Where the arbitration agreement specifies that the
arbitration is to be conducted in accordance with particular institutional rules, the
tribunal’s power to regulate the procedure will be limited by those rules. So, for
example, Art.15 of the ICC Rules provides:

“The proceedings before the Arbitral Tribunal shall be governed by these Rules, and,
where these Rules are silent, by any rules which the parties or, failing them, the Arbitral
Tribunal may settle on...
»”

5—092 Limiting scope for agreement. Similarly, having chosen to conduct the
arbitration in accordance with institutional rules, the parties may to some extent
limit their ability thereafter to regulate the procedure by agreement. For example,
under r.6 of the 2006 ICE Arbitration Procedure the tribunal may require the
parties to submit short statements on the disputes or differences and may summon
the parties for a preliminary meeting for the purpose of giving directions.*** No
doubt the tribunal would pay heed to any agreement between the parties on these
matters, but it is not bound to adopt the parties’ views as to the need for a
preliminary meeting or for such statements on the disputes or differences, even if
the parties are agreed as between themselves. On the other hand it is common for
many provisions of institutional rules to allow the parties to agree the point in
question, or to be expressly subject to the parties agreeing otherwise.***

5-093 Which version of rules to apply. Institutional rules are modified from
time to time and the question of which set of rules is applicable to the arbitration
may then arise. The institution’s rules may themselves deal with the question of
which version is to apply.°* Further, parties sometimes provide expressly in their
contract either for the institution’s rules in force at the time of making the
contract to apply to any subsequent dispute or for the rules in force at the time the
arbitration is commenced to apply. The former approach should be treated with
caution because later versions of the rules are generally introduced to make

+41 See also London Export Corp Ltd v Jubilee Coffee Roasting Co Lid [1958] 1 W.L.R. 271; Amalgamated
Metal Corp Ltd v Khoon Seng Co [1977] 2 Lloyd’s Rep. 310, HL. For a fuller discussion of serious
irregularity see paras 8-072 et seq. below.
3#2 See para.8—072.
*’ The latest (2006) version of the ICE Arbitration Procedure includes at 1.6.3 a provision that the
parties may agree the directions to be given and submit them to the tribunal for approval, which
approval must not be unreasonably withheld.
4 See, for example, the ICC Rules and the LCIA Rules, both of which contain many provisions which
are subject to the parties’ agreement otherwise. :
345
The introduction to the LCIA Rules for example makes clear the parties agree that the arbitration
shall be conducted in accordance with the following rules “‘or such amended rules as the LCIA may
have adopted hereafter to take effect before the commencement of the arbitration.” ;
 Ascertaining the Procedure 225

improvements or reflect changes in relevant laws. It may be that arbitration under

the earlier rules is not appropriate or feasible in light of such developments. In the
absence of express provision, the courts will interpret a reference to institutional
rules as a reference to the rules in force at the time of commencement of the
arbitration.**°

The arbitrator as master of his own procedure. The above 5-094

comments with regard to party autonomy contemplate that the parties are in
agreement as to the procedure to be adopted. However all too often they are not,
particularly after a dispute has arisen. In these circumstances, the tribunal will
decide on the procedure to be adopted, subject to the general duty set out in
s.33(1) of the Arbitration Act 1996.**”7 An arbitrator must act judicially,*** but is
“master of his own procedure’’**? and the court will not interfere with the exercise
of his discretionary powers for dealing with procedural and evidentiary matters
during the course of the reference unless his conduct is so extreme as to warrant
his removal.*°°

The range of procedures available.*°! One of the advantages of 5-095

arbitration is its flexibility with regard to the procedures that may be adopted.
Whereas courts tend to be bound by relatively rigid procedures, arbitrations are
capable of being tailored to the needs of the parties and the particular dispute.
That said, it does in practice usually require both a firm tribunal and a degree of
co-operation from both sides for the real benefits of arbitration’s flexibility (i.e.
savings in time and costs) to materialise. A tribunal will rightly tend to err on the
side of being fair rather than on the side of being robust in its conduct of the
arbitration. This is in part because it will be concerned to comply with its duty
under s.33 of the Arbitration Act 1996**” and also because it will want to do all it
can to ensure that the resulting award is enforceable.

The extremes. The parties may prefer a quick and cheap resolution of their 5-096
dispute to a slow, expensive solution, and may be prepared, up to a point, to bear
any consequent cutting-down of the opportunities to put their case across. At one

346 China Agribusiness Development Corp v Balli Trading |1998] 2 Lloyd’s Rep. 76.
347 See also Anangel Peace Compania Naviera SA v Bacchus International Commerce Corp (“The Anangel
Peace’’) [1981] 1 Lloyd’s Rep. 452.
348 Henry Sotheran Ltd v Norwich Umion Life Insurance Society [1992] 31 E.G. 70.
349 See Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corp [1981] A.C. 909. See
also, by way of example, Carlisle Place Investments v Wimpey Construction UK Ltd [1980] 15 B.L.R.
1109 and Three Valleys Water Committee v Binnie & Partners 52 Build. L.R. 42.
350 Pursuant to s.24(1)(d) of the Arbitration Act 1996: see further paras 7-111 et seq. See also Bremer
Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corp [1981] 1 All E.R. 289; [1981]
A.C. 909; K/S A/S Bill Biakh v Hyundai Corp [1988] 1 Lloyd’s Rep. 187; Three Valleys Water
Committee v Binnie & Partners 52 B.L.R. 42. There may of course be a remedy in relation to the
resulting award if the tribunal has behaved in a way that constitutes serious irregularity under s.68
of the Arbitration Act 1996: see paras 8-072 et seq. below.
*51 See also para.1—022 above.
*52 See para.5—032 above.
 226 The Conduct of the Reference

extreme the procedure in an arbitration may be very similar to that applicable to

proceedings in court, with full oral hearings, strict adherence to rules of evidence,
pleadings, extensive disclosure of documents, and factual and expert witnesses. At
the other extreme, it may be agreed that the tribunal should decide the dispute on
the basis of a limited range of documents, with no hearings,**’ pleadings or
submissions (oral or written). Between these extremes procedures may be mod-
ified or mixed as desired and of course the tribunal must always bear in mind its
overriding duty under s.33(1) of the Arbitration Act 1996.*°*

5-097 Procedure tailored for the case. In practice, unless the parties make
their particular wishes clear, there has in the past been a tendency for the
procedures adopted to be those with which the tribunal and the parties’ repre-
sentatives are most familiar, or a combination of such procedures. This can lead to
arbitrations being conducted in such a way as to effectively mirror court proceed-
ings. Such a tendency is perhaps less common in light of the duty imposed by
s.33(1) of the Arbitration Act 1996 which requires the tribunal to consider in each
case how the procedure can be tailored to ensure a fair resolution of the case
without unnecessary delay or expense. There does seem to have been a shift to
more streamlined procedures in many cases, particularly with regard to the
disclosure of documents and the length of hearings. One way to approach this is
for the tribunal to consider in turn each of the matters set out in s.34(2) of the 1996
Act, together with any other relevant issues about which procedural directions
might be sought.**° This will assist in forming a view as to what provisions are
really necessary in the context of the particular reference and how they can most
effectively be implemented.

5—098 Adversarial procedure. In English courts an adversarial procedure is

adopted whereby each party puts forward its case and the judge’s role is essentially
to determine which party’s case he considers should succeed. A similar adversarial
procedure has traditionally been adopted in English arbitrations, although the
tribunal may be more disposed to intervene in the course of the hearing, for
example to put questions to witnesses, and of course it must be careful to ensure
that it gives the parties an opportunity to deal with any issue upon which it intends
to base its findings.*°°

5-099 Inquisitorial procedure. The inquisitorial approach is generally adopted in

the courts of civil law countries. The judge’s role is to investigate the merits of the
case and reach a conclusion, the parties and their representatives assisting him in
this process. Under this approach the judge is more inclined to initiate and pursue
with the parties his own ideas and theories about the case, rather than relying on

93 See para.5—196 below.

*4 See para.5—032 above.
$55 See para.5—117 below.
356 See para.5—050 above.
 Ascertaining the Procedure Papal

the parties to put forward their own. Arbitrations in England are rarely conducted
under the inquisitorial approach in its true sense, save to an extent in the context
of quality arbitrations.*°’ However this is now one of the matters for the tribunal
to consider under s.34(2) of the Arbitration Act 1996. Subsection (g) specifically
refers to “whether and to what extent the tribunal should itself take the initiative
in ascertaining the facts and the law”. It may be appropriate to adopt this
procedure where, for example, the tribunal or one or more of the parties is from
a civil law background or where the arbitrator has been appointed because of his
expert knowledge and the parties wish him to investigate the dispute himself.*°* In
any event it is always subject to the overriding duty in s.33(1) of the Arbitration
act, LOGG.<>?

Nature of the dispute. The degree of formality adopted in the arbitration 5-100
will also be influenced by the nature of the dispute. Thus there is no requirement
for formal pleadings, extensive disclosure of documents and so on, in an arbitra-
tion conducted by a tribunal which is experienced in the trade in question but
which has chosen to proceed with a high degree of informality.*°° Nevertheless
there is a requirement for natural justice and fairness taking into account all the
circumstances, including the informality of the proceedings.*°' Again, however,
the guiding principle is the duty laid down in s.33(1) of the Arbitration Act
19968°

Institutional arbitration and arbitration rules. Various institutions 5-101

promulgate rules for use in arbitrations which set out, in varying degrees of detail,
the procedure to be adopted in an arbitration conducted under those rules. These
institutions include both commercial associations (such as GAFTA and FOSFA)
and institutions whose very existence is designed to facilitate arbitration (such as
the Chartered Institute of Arbitrators and, in the international context, the [CC
and LCIA).*° A reference in the arbitration clause to such rules of arbitration
constitutes an agreement in writing for the purposes of s.5 of the Arbitration Act

$97 See para.5—110 below.

358 In Checkpoint Ltd v Strathclyde Pension Fund [2003] L. & T.R. 22 the agreed procedure contem-
plated that the arbitrator might use inquisitorial powers but he would inform the parties of his
findings and ask them to comment on them. The court found that the arbitrator in that case had
not in fact used inquisitorial powers but had simply applied his own knowledge.
359 Tn Norbrook Laboratories Ltd v Tank [2006] EWHC 1055 it was held to be a breach of s.33 for the
arbitrator to contact potential witnesses in the absence of both parties and without producing any
record of the witnesses’ remarks. As to s.33 see generally para.5—032 above.
300 Krohn € Co (Import-Export GmbH & Co KG) v PT Tulung Agung Indah [1992] | Lloyd's Rep.
Si
361 Krohn & Co (Import-Export GmbH & Co KG) v PT Tulung Agung Indah |1992] | Lloyd's Rep.
SI,
362 See para.5—032 above.
363 See paras 3-051 et seg and 5-171 et seq.
 228 The Conduct of the Reference

1996 and may therefore be an agreement between the parties for the purposes of
the non-mandatory provisions of the 1996 Act.°”*

5-102 Advantages of institutional arbitration. The institution concerned

may perform a number of different roles in connection with arbitration proceed-
ings.°°5 However, its principal function will usually be to deal with the administra-
tion of the reference in accordance with its rules.*°° The main advantages of having
the arbitration administered by an institution in this way are that:

® it provides a procedural framework for the case;

® it may be able to provide specialist services or arbitrators with particular
expertise;
® it may serve to relieve the parties and the tribunal of some of the admin-
istrative burden of conducting the reference;
® the institution can deal with challenges to and replacement of arbitrators
without the need to involve the courts.

5-105 Disadvantages of institutional arbitration. The main disadvantage

of institutional arbitration is that it may add to the expense of arbitration, because
the institution concerned will have to be paid for its efforts. It may also delay the
proceedings.*°’

5-104 Arbitration rules where no institution. Not all arbitration rules

involve administration of the reference by an institution. The UNCITRAL
Arbitration Rules, for example, are specifically designed for use in ‘tad hoc”
arbitrations and, despite the name, arbitrations under the LMAA Terms are also
tag Woe eo

a= 105 Rules providing procedural framework. Whether administered or

not, arbitration under the different rules is intended to provide a procedural

*°t See s.4(3) of the Arbitration Act 1996. The phrases “unless otherwise agreed by the parties” and
“the parties are free to agree” are the two formulae adopted in numerous sections of the Act to
signify that either the parties may opt for certain provisions to apply or that the parties’ agreement
prevails over the default provisions in the statute. The question arises as to how specific the
provisions in the institutional rules must be in order to constitute an agreement between the parties
for these purposes. If the rules make express provision there is no problem but if, for example, the
tribunal is conferred with a general power to decide or order something and that general power
could encompass an alternative approach from that in the 1996 Act, will it be an “agreement
otherwise”? It seems unlikely unless there is some indication that the alternative approach was
specifically envisaged.
°° See paras 2-061 and 3-052 above for the various roles played by institutions in arbitration.
#66 See para.5—-171 below.
*°7 See, for example, the comments of Lord Mustill in Coppee-Lavalin SA/NV v Ken-Ren Chemicals
and Fertihzers Ltd (In Liquidation) [1994] 2 All E.R. 449 at 459, HL.
%68 See para.2—006 above for the meaning of ‘ad hoc’.
 Ascertaining the Procedure 229

framework for the conduct of the reference. The rules do not provide an exhaus-
tive code designed to cover all points that might arise in the course of the
arbitration, but rather set out the powers, duties and obligations of the tribunal and
the parties so that they know what can and cannot be done, and by whom, in
determining the procedure to be adopted in the particular reference. Similar
guidance is given by the Arbitration Act 1996, but the arbitration rules will
normally provide a more complete code than the framework provided by the Act,
for example by specifying time limits for the service of written submissions and
appointment of the tribunal. They will often also constitute an agreement between
the parties for the purposes of many of the non-mandatory provisions of the 1996
Act

Terms of reference. A tribunal will sometimes draw up terms of reference 5-106

for the arbitration. In the context of arbitration under institutional rules these are
relatively commonplace*”’ and are for example required by the ICC Rules which
set out those matters to be included.*’' Even in the absence of a requirement for
terms of reference the Tribunal may choose to draw up a document which sets out
the terms ofits appointment, the scope ofits jurisdiction, the agreed remuneration
of the tribunal and similar matters, and seek the parties’ agreement to it. Terms
of reference agreed between the tribunal and the parties may amend or supple-
ment the terms of the parties’ arbitration agreement and may be a specific source
of the tribunal’s powers.*’* The terms of reference will normally be a separate
document from the tribunal’s procedural order or directions setting out specific
steps to be taken by the parties in the conduct of the hearing.*”*

Speedy arbitration. Certain arbitration institutions have introduced proce- 5-107

dures which the parties may elect to follow and which are designed to improve the
speed, cost and efficiency of the arbitration process.
The ICC has introduced a ‘‘Pre-Arbitral Referee’ procedure under which an
independent referee may order provisional or conservatory measures before the
tribunal embarks on the reference. This Pre-Arbitral Referee procedure was
introduced in 1990 but is still rarely encountered in practice. The conclusion to
be drawn from this is not necessarily that the parties do not want such a
procedure, but perhaps rather that it is not very well known and is not therefore
being addressed at the contract drafting stage. Once a dispute has arisen it may be
difficult to secure agreement of the parties to it. Any decision rendered by the Pre-
Arbitral Referee is not an award capable of enforcement and this may also in part
explain the apparent reluctance to adopt the procedure.

369 See para.5—101 above.

370 The ICC Rules are perhaps the best known international arbitration rules that provide for terms of
reference, but so do others such as the rules of the Belgian arbitration institution CEPANI. Other
sets of rules, such as those of the LCIA, have no such requirement.
37! Article 18 of the ICC Rules.
572 Lesotho Highlands Development Authority v Impregho SpA [2005] UKHL 43; [2006] 1 A.C. 221, per
Lord Steyn at [21].
573 See para.5—111 below.
 230 The Conduct of the Reference

The LMAA has a Small Claims Procedure suggested for claims up to

US$ 50,000.57* It is designed for relatively straightforward disputes, but a problem
has been parties submitting complex matters for which the procedure 1s not really
suitable.5”> Similarly, GAFTA has a Simple Dispute Arbitration Rule No.126 for
dealing with small and straightforward claims.
The parties may also make provision in their arbitration agreement for a speedy
arbitration, for example by imposing specific time limits for particular steps or for
the making of the tribunal’s award.*”°

5-108 Documents only arbitrations. It is customary in some fields of arbitra-

tion for disputes to be determined on the basis of documents submitted to the
tribunal but without any oral hearing or cross examination of witnesses.*’”
Whether to adopt this type of procedure is a matter to be considered by the
tribunal under s.34(2)(h) of the Arbitration Act 1996.°”* In such ‘‘documents
only” or “paper” arbitrations, as they are sometimes called, there would normally
be written submissions and documentary evidence produced by each party on the
basis of which the tribunal would reach its decision, but no oral evidence or oral
submissions. The written submissions may simply take the form of a letter to the
tribunal from the party or his representative, or may be a more formal document
produced by lawyers.

5-109 Need for vigilance. It is particularly important in documents only arbitra-

tions for the tribunal to be alive to the danger of introducing into its award matters
which are not actually in issue between the parties on the basis of their written
submissions.*” Without the benefit of an oral hearing to clarify what exactly is in
dispute, the tribunal may be more at risk of referring to matters in its award which
the parties have not had an opportunity to address, giving rise to the risk of serious
irregularity under s.68(2)(a).**° If the tribunal is in any doubt it should seek
written clarification from the parties as to the issues between them prior to making
the award.

5-110 Quality or look-sniff arbitrations. A particular type of arbitration

procedure which has traditionally stood alone is that adopted in quality or “look-

* This is the total amount claimed in the arbitration by either party excluding interest and costs. A
claim may therefore be commenced under the Small Claims Procedure but become no longer
applicable in the event of a counterclaim which exceeds that sum: Bernuth Lines Ltd v Fligh Seas
Shipping Lid {2006| 1 All E.R. (Comm) 359,
*”° See the commentary on the LMAA Small Claims Procedure (2006) at mmm./maa.org.uk.
*”° Care needs to be taken that the procedure is workable, but for example it is relatively common to
find a provision in the arbitration agreement that the tribunal will make its final award
within a
certain period of time following its appointment.
Mg Dispensing with an oral hearing is common, for example, in shipping cases.
°”8 For guidance on when an oral hearing would be appropriate, see the comments, obiter,
of Tomlinson
J. in Boulos Gad Tourism & Hotels Ltd v Uniground Shipping Co Ltd [2001] W.L. 1676909.
Many
arbitration rules give the parties a right to insist upon an oral hearing on the merits of
the case: see
for example Art.19.1 of the LCIA Rules.
*” Pacol Lid v Joint Stock Co Rossakhar [1999] 2 All E.R. 778.
389 See paras 5-049 ev seq. and para.8—080.
 Ascertaining the Procedure 231

sniff” arbitrations. These generally concern disputes relating to commodity sales

where the issue to be resolved is the quality of the commodity in question. The
established practice in such cases is for an expert arbitrator in the field to examine
the commodity concerned (or samples of it) and to give the parties his decision on
its quality based on that inspection. There are no formal hearings or submissions
by the parties. Such a procedure can be very useful in this type of case as it
provides a quick and straightforward solution to a particular kind of problem that
commonly arises. However, even in the commodity field the number of cases
decided in this way is very small indeed**! and the procedure is perhaps more
appropriately conducted by way of expert determination rather than arbitra-
tion.**?

(b) Directions from the tribunal in the course of the reference

Directions generally. During the course of a reference the tribunal will 5-11]
often wish to communicate to the parties that certain procedural steps are to be
taken and to set out the timetable for doing so. These are often recorded in a
formal document known as an “Order for Directions” or ‘‘Procedural Order”.
Whatever the document is called its purpose will be to provide a record for both
the parties and the tribunal of the procedural steps which it has ordered or
directed shall be taken. Such an order may record the tribunal’s jurisdiction to deal
with the dispute, but it will not itself confer substantive jurisdiction upon the
tribunal.*** In most arbitrations directions will be given on several occasions as the
case progresses, and the later directions may amend those previously given.

Who should give directions. Generally the full tribunal will give proce- 5—112
dural directions in the course of the reference. In the absence of agreement
otherwise by the parties, decisions and orders have to be made by all the members
of the tribunal or (if unanimity cannot be reached) a majority of them.*** However,
it is common in practice, particularly in international arbitrations where the
arbitrators may be located in different countries, for procedural decisions to be
delegated to one or more members of the tribunal, usually the chairman.*® This
has the advantage of facilitating speedy decisions and avoiding the cost and
inconvenience of consulting all members of the tribunal.

Fixing time and method for compliance. The tribunal may, and 5-113
usually will, fix the time for compliance with its procedural directions. This may

381 Ryen GAFTA nowadays has virtually no arbitrations conducted in this way.
382 For the distinction between arbitration and expert determination see para.2—028 above.
383 Persaud v Beynon [2005] EWHC 3073. Where however the procedural order sets out the tribunal’s
jurisdiction and the arbitration proceeds without objection being taken to the scope of the
jurisdiction so described, the right to object may be lost under s.73 of the Arbitration Act 1996.
384 Sections 20(3), 21(4) and 22(2) of the Arbitration Act 1996.
385 See for example Art.14.3 of the LCIA Rules.
 232 The Conduct of the Reference

specify not just the date but also the time by which despatch or receipt is required.
The tribunal may also extend a time limit, whether or not it has expired.*°° It is
also common for directions to specify how steps are to be taken, for example
permitting service of submissions and evidence by email with hard copies to follow
by post or courier.

5-114 The preliminary meeting. There will often be a preliminary meeting held
between the tribunal and the parties at a relatively early stage of the reference.**’
There is no legal requirement for a preliminary meeting,** but it is often useful
in giving the participants an opportunity to meet and obtain directions from the
tribunal for the future conduct of the reference. The need for a meeting will
depend upon the extent to which the procedure and any directions to be sought
from the tribunal can be agreed between the parties. The costs involved may also
be an important consideration, particularly if the arbitration involves parties and
their representatives from different jurisdictions. It is becoming relatively com-
monplace in these circumstances for the preliminary meeting to take the form of
a video-conference or a telephone conference call rather than a meeting in per-
son.

5-115 Timing of preliminary meeting. In practice the tribunal, and indeed

the parties, will want to understand at least in broad terms the likely issues in the
case before anything more than procedural directions for the provision of initial
submissions by the parties are made. The tribunal may also wish to consider
certain substantive issues at the preliminary meeting, such as questions ofjurisdic-
tion or applicable law, and it will need an understanding of the case in order to do
so. The preliminary meeting therefore often takes place only after each party has
served a written document setting out its case which the tribunal has had an
opportunity to consider.**?

5-116 Agreeing directions in advance. The parties should try to identify in

advance of the preliminary meeting the matters needing to be dealt with and, if
possible, to agree on the procedure and any directions to be sought from the
tribunal. Section 34(1) of the Arbitration Act 1996 specifically recognises the right
of the parties to agree any procedural or evidential matter. If agreement can be
reached this will save time and costs at the preliminary meeting itself and may
even render a meeting unnecessary. Endeavouring to agree matters will also,
particularly in the international context, help to identify any differing expectations

**° Section 34(3) of the Arbitration Act 1996. For the reckoning of periods of time see s.78 of the
Arbitration Act 1996,
*87 An exception is shipping cases, where such meetings are generally unknown: see ‘Procedural
reform in maritime arbitration” by Bruce Harris [1995] PALID UIE AIP ats
** Certain institutional rules contemplate a preliminary directions hearing: see, e.g. Art.18 of the ICC
Rules which contemplates terms of reference being drawn up “on the basis of documents or in the
presence of the parties”’.
*89 See para.5—120 below.
 Ascertaining the Procedure 233

between the parties of the way in which the reference should be conducted from
a procedural point of view. The parties may of course have reached agreement on
some matters by incorporating procedural rules into the arbitration agreement?”
which cover the position. Any agreement reached between the parties should then
be put before the tribunal so that it has an opportunity to express its views on the
feasibility and appropriateness of the agreed approach.

Matters about which directions may be required. Section 34(2) of 5-117

the Arbitration Act 1996 may be treated as a non-exhaustive list of procedural and
evidential matters for the tribunal to consider, subject to their having been agreed
by the parties. However, the range of matters which might need to be addressed
is very wide indeed. Consideration should be given to whether the matters set out
in para.5—118 below should be dealt with at the preliminary meeting (or, if no
preliminary meeting is to be held, whether they are in any event matters on which
an award or procedural directions*”' should be sought from the tribunal).*”* It will
be a rare case indeed when all the issues will need to be considered and the
tribunal should hesitate before dealing with matters upon which no direction is
really necessary as this may add to the scope for dispute between the parties and
cause delay. Further, even if there has been a preliminary meeting at which certain
matters were not dealt with, it is open to the tribunal to give directions at some
later stage during the course of the reference.

A checklist. By way of a checklist, the following matters may require con- 5-118
sideration:

@ Any terms in the arbitration agreement as to how and by whom the reference
is to be conducted;

@ The law or rules to be applied to the merits of the dispute and, if a foreign
law is to apply, how it is to be presented*”*;
® Any mandatory laws of the seat of the arbitration or other place where
hearings or meetings are to be held, insofar as they might affect the conduct
of the reference or the award;

@ Any mandatory laws of the place where enforcement of an award will be

sought, insofar as they might affect the conduct of the reference or the
award;
@ The tribunal’s jurisdiction;

3 For example the rules of an arbitration institution: see para.5—101 above.

3°! See para.6-002 below for the distinction between an award and procedural directions.
392 See the UNCITRAL Notes on Organising Arbitral Proceedings whose stated purpose is “‘to assist
arbitration practitioners by listing and briefly describing questions on which appropriately timed
decisions on organising arbitral proceedings may be useful”.
393 This second aspect is dealt with at para.5—209.
 234 The Conduct of the Reference

agree-
@ The procedural or evidential rules incorporated into the arbitration
ment or which the parties or the tribunal otherwise wish to adopt;
© Whether (and if so what) interim measures are appropriate;
@ Whether provisional relief can and should be granted;
® How the issues are to be defined;

© Whether there should be a determination of particular issues before oth-

ers;
© What documents (if any) to be provided;
@ Whether (and if so how) the evidence of witnesses of fact is to be
adduced;

© Whether (and if so how) expert evidence is to be adduced by the parties;

© Whether the tribunal wishes to appoint any expert(s), legal adviser or

aASSESSOT;
e@ Administration of the reference;

@ Arrangements for the hearing(s);

@ The place or places at which hearings are to be conducted;

@ Language(s) to be used in the reference;

@ Fees and deposits;

@ Any other issues arising, e.g. confidentiality restrictions, arrangements spe-
cific to multiparty or consolidated arbitrations, etc.

A number of these topics have been dealt with above.*’* The remaining topics
are addressed in the following paragraphs.

(c) Terms of the arbitration agreement

5-119 Consideration of special terms. The arbitration agreement may contain

specific requirements as to qualifications that the members of the tribunal are
required to possess*”® or as to how the reference is to be conducted. For example,
it might provide that the tribunal is to act as ‘tamiable compositeur”.*’° The
tribunal should consider any such terms at an early stage, and preferably prior to
accepting appointment, to establish whether it can comply with them. If it cannot

*°4' Namely the law or rules to be applied to the merits of the dispute (paras 5—057 and 2-090 et seq.),
mandatory laws of the seat (paras 2-100 et seg. and 5—071) or place of enforcement (paras 2-109 and
5-058), the tribunal’s jurisdiction (paras 5—060 e7 seg. and 2-071 et seq.), the place at which hearings
or meetings are to be conducted and any mandatory laws applicable there (paras 2-107 and 5-073),
the adoption of procedural rules (paras 5-101 e¢ seq.), interim measures (paras 5—074 et seq.),
provisional relief (paras 5-085 ez seq.) and fees and deposits (paras 4-052 et seq.).
395 See para.4—017
39 See paras 4-141 and 4-142 above.
 Ascertaining the Procedure 235

or is unwilling to do so, it may seek some form of variation of the arbitration

agreement or waiver from the parties or otherwise decline the appointment.*””

(d) Defining the issues

How the issues are to be defined. The issues in a reference are the 5-120
matters in dispute between the parties, which are often described only in the most
general terms in the notice of arbitration. The nature, scope and number of the
issues in a particular reference may have a considerable influence upon the proce-
dure to be adopted and the choice of a suitable tribunal to determine the dispute,
and it is obviously desirable for the tribunal and the parties to have a clear idea of
the issues at an early stage.*’* The tribunal will need to know the precise matters
which it is required to determine, and possibly in what order, so that its award is
directed only at those issues,*”” and determines all of them.*”° Early definition of
the issues avoids wasting time and costs on matters which are not in dispute, and
focusing on the real issues between the parties may also encourage settlement.*”!
Failure by the tribunal to ensure that the issues are properly defined may be a
breach of its duty under s.33 of the Arbitration Act 1996.*°

Choice of methods. Under s.34(2)(c) of the Arbitration Act 1996 the 5-121
tribunal should consider*”’ ‘whether any and if so what form of written statements
of claim and defence are to be used [and] when these should be supplied”’. The
tribunal’s choice will depend upon factors such as the type and complexity of the
dispute and the qualifications and experience of the tribunal. If there are complex
issues of law it may assist to have the issues defined by methods similar to
pleadings in court proceedings. If the dispute is a technical matter before a
tribunal with technical expertise and there is effectively only one factual issue (for
example a quality assessment of a particular commodity), there may be no need for
any written statements of claim or defence at all. There are no hard and fast rules
as to the form or nomenclature to be adopted, but the following paragraphs

5°7 Resignation would be a last resort—see para.5—056.

398 See for example Nemfield Construction Ltd v Tomlinson [2004] EWHC 3051, 97 Con. L.R. 148 where
the tribunal made an award of costs on the basis of a misunderstanding of the dispute between the
parties as set out in the pleadings.
3” Tf the award purports to determine matters not in dispute between the parties it may be vulnerable
to challenge: Pacol Ltd v Joint Stock Co Rossakhar [1999] 2 All E.R. 778.
400 4 tribunal will not be criticised for failing to determine an issue which was never part of the
reference: see Vee Networks Ltd v Econet Wireless International Ltd [2004] EWHC 2909; [2005] 1
Lloyd’s Rep. 192 where it was held that an objection to substantive jurisdiction could not be made
under s.67 of the Arbitration Act 1996 in circumstances where the issue in question had never been
raised before the tribunal.
401 The ICC Rules require preparation of terms of reference which include both a summary of the
parties’ respective claims and relief sought and, unless the tribunal considers it inappropriate, a list
of the issues to be determined: Art.18 of the ICC Rules and para.5—106 above.
402 As in RC Pillar © Sons v Edwards [2002] C.1.L.L. 1799. The facts in that case were described as
“extreme” in Sinclair v Woods of Winchester Lid [2005] EWHC 1631, 102 Con. L.R. 127 at [21].
403 Unless there is agreement of the parties on the matter.
 236 The Conduct ofthe Reference

address the use of court style pleadings and also the less formal statement of case
procedure.
Whichever method is adopted, the parties’ written submissions may assist in
defining the issues in the case but will not usually determine the scope of the
reference, which is contained in the notice of arbitration.*°* However, where
particular issues are addressed in both parties’ written submissions without either
side (or the tribunal) taking exception to them, that would normally be sufficient
to confer jurisdiction to deal with them, albeit that the scope of the reference may
thereby be enlarged.*”

5-122 Pleadings. Pleadings are formal documents in which the parties set out their
respective cases.*°° The claimant usually serves Points of Claim setting out the
facts and matters upon which he relies. The respondent then responds by serving
Points of Defence addressing the allegations made in the Points of Claim. Points
of Reply may be served by the claimant, and there may occasionally be further
pleadings in response.*°’ If allegations in the pleadings of either party are inade-
quately set out, further details may be sought. The use of pleadings will enable
each party to see the nature of the case made against them and to identify the
material facts upon which that case is based. Matters of evidence and legal
argument do not usually appear in English pleadings, but in practice it is not
uncommon in arbitrations to encounter them in documents purporting to be
formal pleadings.

5} Statement of case procedure. Alternatively the arbitration may proceed

by service of a statement of case, followed by a statement of defence or some other
document setting out the response. These documents are generally less formal
than traditional pleadings and, at least in international cases, are becoming the
norm. Typically they will set out the relevant facts, refer to evidence (relevant
documents are often annexed) and develop arguments, including arguments on the
law.*°° Statements of case are often less structured than formal pleadings, and

*°" London Borough of Lewisham v Shephard Hill Civil Engineering Ltd, 2001, unreported, July 30, 2001,
QBD (TCC), [2001] W.L. 825511. See para.5—025 above.
°° Ward Bros Plant Hire Ltd v Banlaw (Europe) Ltd, unreported, November 19, 1999, QBD (TCC).
This would also follow from the fact that any right to object to the enlarged jurisdiction is lost if
no objection is taken under s.73 of the Arbitration Act 1996.
% The term “pleadings” is often used to describe any form of document which sets out a party’s case,
but in order to draw out the distinctions between different types of documents it is used here in the
sense of formal pleadings similar to those found in court litigation.
“°” Although it is not specifically addressed in s.34(2) of the Arbitration Act 1996, the position is
presumably the same as under the old law where the question of whether to allow service of a Reply
and further pleadings was a matter for the discretion of the tribunal, as was the question whether
their service should be allowed out of time: Three Valleys Water Committee v Binnie & Partners 52
B.L.R. 42. ;
*8 Statements of case will sometimes be accompanied by a full set of the documents relied upon and
that party’s factual and expert witness evidence. In such circumstances they will be akin to
memorials: see para.5—125 below. The advantage of this approach is that it can save considerable
time by requiring service of evidence simultaneously rather than fixing a series of dates for the
different evidential stages. It does however raise logistical issues with regard to coordinating the
submission of evidence which may be inter-dependent. Alternatively the tribunal may order the
exchange of documents and witness evidence in sequential steps.
 Ascertaining the Procedure 231

consequently they may be less clear and concise. A pleading in response to another
pleading generally deals with each allegation in turn, setting out the case made in
response on each particular point. However if in response to the claimant’s
statement of case the respondent produces a document directed more towards
“telling the story” than addressing the matters raised by the other party’s case, the
precise issues in dispute may be more difficult to ascertain, and it may not be very
easy to sort out the relevant from the irrelevant. Accordingly, some care is required
when adopting the statement of case procedure, in order to structure the analysis
and define the issues with clarity. If necessary the tribunal can require the parties
to seek to distil a list of issues in a separate document from the statements of the
parties’ cases. In view of the duties imposed on the tribunal under s.33 of the
Arbitration Act 1996,*°’ there are strong arguments in favour of the statement of
case procedure, for example where the issues are straightforward or where the
tribunal is experienced and less formal submissions provide all the “help” it
needs.*'° Where one or more of the parties are represented by lawyers who are
unfamiliar with formal English pleadings, the statement of case procedure will
usually be adopted.

Form of statement of case procedure. At its most informal a state- 5—124

ment of case may consist simply of short letters from each of the parties. More
usually it will consist of written submissions, prepared either by the parties or
their legal advisers. At its most formal it may be similar to enlarged pleadings, or
to the “‘briefs’’ used in litigation in the United States of America.

Memorials. The document that sets out a party’s case is sometimes referred 5-125
to as a ““memorial”’.*!! A memorial is a form of statement of case. It will usually
be accompanied by all the evidence relied on by the serving party, including
relevant documents, factual witness statements and expert reports. Like a state-
ment of case, a memorial will often contain submissions on the evidence and the
law.

Other informal methods. The issues may be defined orally, or may be 5-126
ascertained from documents, without the need for written clarification or defini-
tion. This might be appropriate if the issues are very clear and straightforward, or
are well known to the particular tribunal concerned. Whichever method is used,
the tribunal must be able to identify and isolate the matters which are in dispute
and which it is required to determine.

Amendments. Under s.34(2)(c) of the Arbitration Act 1996 the tribunal is to SealPF)
consider*! the extent to which amendments may be made to the parties’ written

+09 See para.5—032 above.

410 See Bruce Harris, “Procedural Reform in Maritime Arbitration” [1995] AIDS ICS) sali:
411 See for example r.31 of the ICSID Arbitration Rules.
+12 Subject to any agreement of the parties on the matter.
 238 The Conduct of the Reference

submissions.*!* The parties may apply to amend their written submissions at any
time in the course of the reference. Amendment of submissions is more restricted
in the arbitration context than in court proceedings, however, in that it is subject
to the further constraint that the proposed amendment cannot, without agreement
from both parties*'* and the tribunal, extend the issues beyond the scope of what
has been submitted to arbitration in that reference.*'? In other words, the tribu-
nal’s jurisdiction is defined by the issues that have been referred to arbitration, and
that jurisdiction cannot be enlarged by subsequent amendment of the parties’
written submissions without the agreement*!® of both parties, and the tribunal.
Conversely, the scope of the issues that fall within the reference to arbitration is
not narrowed by the parties’ written submissions so as to preclude subsequent
amendments which fall within the reference to arbitration.*'’ An amendment may
be refused because the claim sought to be introduced is subject to a limitation
period which is different from that which applies to the original claim.*'*

5-128 Agreed statement of facts. It may also help to define the issues and to
save time and costs if the parties produce an agreed statement of facts. The
tribunal can then proceed with the reference on the basis of those agreed facts
without requiring the parties to prove them. The tribunal cannot, without notice
to the parties, simply choose to ignore them for the purposes of its award.*!° It is,
however, open to the tribunal, in its discretion, to release the parties from their
agreement if, for example, the statement of facts proves ambiguous or unworkable
or gives rise to unforeseen consequences. This is provided of course that the
tribunal gives the parties an opportunity to be heard on the point and, if they
decide not to follow the agreed statement of facts, they give the parties an
opportunity to present their cases fully.*?°

5-129 Determination of preliminary issues.*?! One or both of the parties

may suggest, or it may be apparent from the parties’ written submissions, that

+15 Again this highlights the point that the submissions themselves do not usually determine the scope
of the reference. See Excomm Ltd v Guan Shipping (Pte) Ltd (The “Golden Bear”) [1987] 1 Lloyd’s
Rep. 330 where the respondents alleged that the claimants had abandoned a claim by not including
it in the Points of Claim. The court noted that the tribunal had a discretion to allow the claim to
be restored by amendment. See also paras 5—025 and 5-121 above.
"Their agreement may arise from the adoption of institutional arbitration rules: see for example
Art.19 of the ICC rules.
"° Leif Hoegh & Co A/S v Petrolsea Inc (The ‘World Era”’) [1992] 1 Lloyd’s Rep. 45.
*' Which need not be in writing. :
"7 Ulysses Compania Naviera SA v Huntingdon Petroleum Services Ltd and others (The “Ermoupolis”’
)
[1990] 1 Lloyd’s Rep. 160, Persaud v Beynon [2005] EWHC 3073; see though Three Valleys
Water
Committee v Binnie & Partners 52 B.L.R. 42, where the pleading was the submission
to arbitra-
tion.
"8S Mosvolds Redieri AS v Food Corp of India, The “Arras” [1989] 1 Lloyd’s Rep. 131.
" Techno Ltd v Allied Dunbar Assurance Ple [1993] 22 E.G. 109,
°° Techno Ltd v Allied Dunbar Assurance Ple [1993] 22 E.G. 109,
1 See generally paras 6-009 ez seq. below.
 Ascertaining the Procedure 239

determination of a particular issue or issues at an early stage would be appro-

priate.*** This might arise where the determination will save time or costs or both
in relation to the future conduct of the reference, or where the determination is
likely to be decisive of the whole or a significant part of the dispute. Thus it may
be expedient to make an award on jurisdiction at an early stage, or to deal with
issues of liability before those relating to quantum, or to deal with a number of
principal issues or claims which the parties believe will assist them in resolving the
remaining matters in dispute between them.

(e) Evidence

Application of the rules of evidence.*** There was some doubt under 5—130
the old law as to whether the tribunal was, or indeed should be, under a duty to
apply the rules of evidence.*** Section 34(2)(f) of the Arbitration Act 1996 now
makes clear that one of the matters for the tribunal to consider**® is “‘whether to
apply strict rules of evidence (or any other rules) 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”’.*”°

Disclosure of documents in court proceedings. Disclosure is the 5-131

process by which a party to civil proceedings in court obtains documents from
another party in advance of the hearing.*’” In English court proceedings there is
generally ‘“‘standard disclosure” by the parties to the action which requires them
to produce the documents on which they rely, documents which adversely affect
their own case or another party’s case, documents which support another party’s
case and any documents required to be disclosed by a relevant Practice Direc-
tion.*?8 A party may also apply to the court at any time for an order for specific
disclosure or specific inspection of particular documents or classes of docu-
ments.*?? Disclosure is given by listing the documents.**° Each party is also
entitled to look at the documents in the other party’s list and this part of the
disclosure process is known as “‘inspection’’. Certain classes of document can be

*22 The tribunal has power to make awards on different issues under s.47 of the Arbitration Act 1996:
see para.6—009 below.
#3 See also para.1—012 above.
#24 See, for example, Mustill & Boyd Commercial Arbitration (2nd edn, 1989) at p.352, cf. Lord Steyn
(1994) 10 Arbitration Int. 1.
#25 Subject to any agreement of the parties on the matter. In particular, the parties may have agreed to
adopt a set of evidential rules, such as the IBA Rules on the Taking of Evidence in International
Commercial Arbitration available at mmm.ibanet.org.
426 This is discussed in more detail in para.4—078 above.
7 See generally Hollander, Documentary Evidence (9th edn, 2006); CPR Pt 31. See also Steyn J. in
Sunderland Steamship P and I Association v Gatoil International Inc (The “Lorenzo Halcoussi”’)
[1988] 1 Lloyd’s Rep. 180 at 184.
428 CPR Pt 31, 1.6. See CPR Pt 31 generally for the rules on disclosure of documents in court liti-
gation.
‘21@PRIR tC ileenale:
+70 GRREPtoilearslOs
 240 The Conduct of the Reference

withheld from inspection.**' Such documents nonetheless have to be listed, and

described in terms which enable a challenge to be made in respect of any claim for
withholding the document from inspection.

5-132 Failings of the disclosure process. The disclosure process has been
criticised as being expensive and time-consuming.*** There are also very real
doubts as to how effective it is in eliciting evidence of real probative value. In any
event it is a widely held view that the sometimes huge expense of dealing with the
disclosure process in court litigation is out of all proportion to the benefit gained
in terms of useful and important evidence. The trend, even in court proceedings,
is now very much towards seeking to control the scope of disclosure in order to
implement proper case management in accordance with the CPR.**?

S193 Disclosure of documents in arbitration. Under s.34(2)(c) of the

Arbitration Act 1996 the tribunal is to consider*** ‘“‘whether any and if so which
documents or classes of documents should be disclosed between and produced by
the parties and at what stage”.**° The use of the word ‘‘any”’ makes it clear that
there does not in fact have to be any disclosure at all. The tribunal’s discretion can,
however, be restricted or excluded by agreement between the parties,**° and in an
appropriate case the tribunal may encourage the parties to adopt a more inter-
national disclosure standard.**”

5-134 Scope of document disclosure. In certain cases the scope of disclosure

may be similar to that given in court litigation but in many, if not most, cases it will
be both more limited and more focussed. Indeed it may be open to the tribunal to
dispense with disclosure of documents altogether, provided that is not inconsistent
with the duties imposed on the tribunal under s.33 of the Arbitration Act 1996.
Although the tribunal can order disclosure of any documents within the possession
or power of the parties, it can only do so if this is necessary for the purpose of

PUGPRER Role)
** Although the current regime is an improvement on the previous procedure under RSC Ord.24
which has been replaced by CPR Pt 31.
FICPRIP ws
*®* Subject to any agreement of the parties on the matter.
*° Disclosure of documents is a matter for the tribunal, not the court: NB Three Shipping
Ltd v
Harebell Shipping Ltd [2004] EWHC 2001. However if the application is urgent the court
may
exercise its power to preserve evidence or assets under s.44 of the Arbitration Act 1996:
see National
Insurance & Guarantee Corp Ltd v M Young Legal Services Lid [2004] EWHC 2972.
See also
para.7—192 below.
#6 Section 34(1) of the Arbitration Act 1996 and para.5—136.
87 See for example the IBA Rules on the Taking of Evidence in International Commercial
Arbitration
available at mmm.ibanet.org.
 Ascertaining the Procedure 241

determining the dispute before it in the particular reference.*** It will rarely be

appropriate to adopt wholesale CPR disclosure.

Questions of privilege. Under the Arbitration Act 1950 the obligation to 5-135
produce documents was “subject to any legal objection”’,**° so that, for example,
parties could object to the production of documents over which privilege could be
asserted.** There is no similar provision in the Arbitration Act 1996.4! However
questions of privilege frequently arise in arbitration and fall to be determined by
the tribunal, subject to agreement of the parties, pursuant to s.34(2)(d). Interesting
conceptual issues arise in cases involving parties from different jurisdictions where
the approach to questions of privilege may be radically different. What law should
a tribunal apply in these circumstances? Should it be the law of the seat of the
arbitration? Or that of the jurisdiction where the document was created? In
practice a combination of wishing to preserve the privilege of a party who under
the rules of his own jurisdiction had a legitimate expectation of it, and not wishing
to treat the parties differently, means that in most cases both parties will be able
to claim privilege in accordance with whichever applicable rules are most restric-
tive about the requirement to disclose.

Arbitration practice. Although the tribunal has power to order wide- 5-136
ranging disclosure, it should consider restricting disclosure to those documents
which are “‘relevant and material’’*” to the issues. Frequently the parties will agree
to produce voluntarily the documents upon which they each wish to rely and the
tribunal is then only asked to determine what further documents they should be
compelled to disclose. Arbitrators are generally more amenable than the court to
limiting the scope of disclosure and are reluctant to entertain extensive disclosure
requests for documents of peripheral relevance. The provisions of the 1996 Act
encourage this trend. The tribunal will usually dispense with a costly and time-
consuming listing exercise and the production of large numbers of documents
which are of no real interest or value but which would be required if standard

88 Kirkawa Corp v Gatoil Overseas Ltd (The “Peter Kirk”) [1990] 1 Lloyd’s Rep. 154. This was a case
under the old law but a tribunal that sought to order disclosure of wholly irrelevant documents
would be in breach of its obligations under s.33(1)(b) of the Arbitration Act 1996: see
para.5—032.
9 Section 12(1) of the Arbitration Act 1950.
+40 ie documents which fall within one of the recognised categories of documents protected from
production under the relevant applicable law. As a matter of English law these categories include
confidential communications with a lawyer for the purpose of giving or receiving legal advice and
communications generally which come into existence for the sole or dominant purpose of advice or
evidence in pending or prospective litigation. Documents may also be privileged if they incriminate
the party concerned. See generally Hollander, Documentary Evidence (9th edn, 2006) and in relation
to without prejudice documents para.5—140 below.
+41 Where the IBA Rules on the Taking of Evidence in International Commercial Arbitration have been
adopted r.9(2)(b) will apply which specifically recognises “legal impediment or privilege under the
legal or ethical rules determined by the Tribunal to be applicable” as a reason for excluding
documents.
+22 This is the test used in the IBA Rules on the Taking of Evidence in International Commercial
Arbitration. It provides a good yardstick for tribunals generally.
 242 The Conduct of the Reference

disclosure along the lines of that available in court proceedings were to be given.
In shipping cases, for example, a party may seek voluntary disclosure of certain
documents or may seek an order from the tribunal for their production, but formal
disclosure procedures involving lists of documents and inspection are unusual. On
the other hand, limited document disclosure has not historically been a prominent
feature of construction arbitrations although this has begun to change, presumably
as a result of the duties imposed on arbitrators under s.33 of the Arbitration
Act.** If the listing of documents is dispensed with, the parties may simply make
the documents available for inspection or deliver copies of the documents to each
other. Another useful mechanism is adoption of what is known as a Redfern
Schedule.*** Again there are no hard and fast rules, and both the appropriate level
of disclosure and the approach to be adopted will depend on the particular
circumstances of the case.

5-137 Disclosure from third parties. A tribunal has no power to require

disclosure from a third party. If documents held by a third party are required it
will be necessary to make an application to court, either pursuant to s.43 or s.44
of the Arbitration Act 1996.**

5-158 Timing. Section 34(2)(c) of the Arbitration Act 1996 makes clear that it is for
the tribunal to determine**® at what stage disclosure of documents is to be given.
This means that the tribunal may order disclosure of documents or classes of
documents at any stage in the course of the reference and whether or not it has
made a previous order for disclosure.

5-139 Use of documents obtained in an arbitration. There is an implied

obligation on a party obtaining documents in an arbitration not to disclose or use
them for any purpose other than the dispute in which they were obtained.**” This
duty of confidence extends to ‘‘any documents prepared for and used in the
arbitration, or disclosed or produced in the course of the arbitration, or transcripts
or notes of the evidence in the arbitration or the award”’.** It is qualified, however,

5 See para.5—032 above.

** Named after Alan Redfern, author of “Law and Practice of International Commercial Arbitration”
by Redfern, Hunter and Blackaby (4th edn, Sweet & Maxwell, 2004), it is a schedule
containing
four columns, the first of which describes the documents of which disclosure is sought,
the second
sets out the disclosing party’s objections to producing them, the third gives the responses
of the
party seeking disclosure to the objections raised and the fourth column is for the tribunal’s
ruling.
Each column is completed as the request for disclosure proceeds. The advantage
of this type of
schedule is that it collates the information in relation to each document or
category of document
into a convenient summary for both the parties and the tribunal. ya
+5 See paras 7-192 and 7-204.
“© Subject to any agreement of the parties on the matter.
47 Dolling-Baker v Merrett and Others [1991] 2 All E.R. 891 at 899, CA:
Hassneh Insurance Co of Israel
and Others v Stuart J Mew [1993] 2 Lloyd’s Rep. 243. A similar but
express obligation applies to
documents disclosed in court litigation subject to certain exceptions
including where the document
has been read to or by the court: CPR Pt aM ee i.
“8 per Parker L.J. in Dolling-Baker v Merrett and Others [1991] 2 All
E.R. 891, CA.
 Ascertaining the Procedure 243

in relation to the award itself (and perhaps other documents) and may be displaced
by consent or by order or permission of the court.**”

“Without prejudice” communications. Communications between the 5-140

parties or their representatives which are made for the purpose of reaching a
settlement of the dispute and on a “without prejudice” basis cannot be admitted
in evidence in litigation.*°° In the arbitration context similar considerations apply
as in relation to privileged documents generally.**! Arbitrators tend to apply to all
parties whichever of the potentially applicable laws confers most protection on
such communications, so as not to frustrate legitimate expectations of the author
of the document that it will not need to be produced.

Questions. Section 34(2)(e) of the Arbitration Act 1996 provides for the 5-141
tribunal to decide** “whether any and if so what questions should be put to and
answered by the respective parties and when and in what form this should be
done”. This gives the tribunal scope, amongst other things, to order a party to
answer written questions on oath in a similar way to the procedure of seeking
further information in court.*°*

Evidence of witnesses of fact. The parties to an arbitration will often 5-142

wish to rely on the evidence of witnesses of fact.*** If they do, it is usual for such
evidence to be given in the form of written witness statements which are
exchanged*> prior to the hearing of the arbitration.**° If the evidence is disputed
the witnesses then appear at the hearing for cross-examination, although it 1s clear
from s.34(2)(e) of the Arbitration Act 1996**” that it is for the tribunal to decide***
if, when and how questions are to be put to the witnesses. Indeed this provision
gives the tribunal considerable scope as to how the evidence of witnesses of fact is
to be given and this may for example include witness conferencing.*” Hearsay
evidence may be given even if strict rules of evidence apply.*”
J

449 See further paras 5-184 er seq. below.

450 For the policy behind this rule see Rush and Tompkins Ltd v Greater London Council [1989] A.C.
1280.
451 See para.5—135 above.
452 Subject to any agreement of the parties on the matter.
453 Pursuant to CPR Pt 18. In court proceedings a party is required to endorse the answers with a
statement of truth: CPR Pt 22, r.1.
454 See paras 7-202 et seg. below for the powers of the court to secure the attendance of witnesses in
arbitration proceedings.
455 Tt is of course possible for the tribunal to order sequential service of witness statements but mutual
exchange between the parties is more common.
456 The court has followed this practice: see CPR Pt 32, r.4.
457 See para.5—141 above.
458 Subject to any agreement of the parties on the matter.
459 See para.5—212 below.
460 Civil Evidence Act 1995, ss.1 and 11. Notice must be given to the other parties of the intention to
rely on hearsay evidence: see s.2 of the 1995 Act. As to strict rules of evidence applying, see
para.5—130 above.
 244 The Conduct of the Reference

5-143 Advantages of written witness statements. The main advantages of

written witness statements are as follows. First, they save time and costs at the
hearing by largely replacing the witnesses’ evidence in chief.*°' Second, written
witness statements should reduce the likelihood of fresh issues emerging during
the giving of evidence at the hearing which require further investigation and,
possibly, an adjournment. Where there has been a direction from the tribunal for
exchange of written statements, a party should not normally be allowed to raise
entirely new points with the witness by way of examination in chief at the hearing,
unless there is some compelling reason why they could not have been dealt with
in the written exchange. Third, by requiring the parties to set out their factual
witness evidence in advance of the hearing it forces them to focus on the strengths
and weaknesses of their case, as well as that of the other side, which may in turn
promote a settlement of the dispute.

5-144 Disadvantages of written witness statements. There are, however,

disadvantages to having written witness statements. In particular there is a danger
that the witness statements will have been prepared by lawyers and may not fully
reflect the evidence of the witness, or at least might not reflect the way that witness
would himself express his evidence.*°* There may also be concerns that a tribunal
will tend to concentrate on what occurs during the hearing and, if it has not
properly read and digested the witness statements beforehand, it might not get a
balanced picture when the case is begun by launching into cross-examination of
the claimants’ witnesses.

5-145 Direction to be obtained. If the evidence is to be given in written witness

statements then a direction should be obtained from the tribunal providing for the
exchange of the statements. The exchange should be fixed for a specific date or for
a date which is capable of being precisely determined by reference to other events
in the arbitration, for example a certain number of days after disclosure or before
the hearing. The directions may also provide for the exchange of witness state-
ments in reply prior to the hearing.

5-146 Number of factual witnesses. It would be unusual specifically to limit

the number of factual (as opposed to expert) witnesses, although this may be
appropriate in certain circumstances, for example to minimise costs and to avoid
repetition of evidence by several witnesses. Again the overriding duties imposed
on the tribunal under s.33 of the Arbitration Act 1996 come into play.*®? The

°! See para.5—210 below. Evidence in chief is referred to as “direct examination” in some jurisdic-
tions.
462
This may become apparent in the course of the hearing when the witness is cross-examine
d or
responds to questions from the tribunal.
463 See para.5—032 above.
 Ascertaining the Procedure 245

tribunal would have to balance any such restriction against the parties’ right to be
given a reasonable opportunity to present their respective cases.*°*

Examination on oath. The tribunal has a discretion as to whether any party 5-147
or witness is to be examined on oath or affirmation and has power to administer
the oath or affirmation itself.*°° This is subject to agreement otherwise by the
parties.*°° It happens less and less that witnesses in arbitrations in England are
sworn, save for example where allegations of dishonesty arise.*°” Instead the
tribunal will often require the witness to confirm the truth of the testimony to be
given. Arbitration rules sometimes contain provision as to the confirmation to be
given by a witness.**

Compelling attendance of witnesses. A tribunal does not have the 5-148

power to require the attendance of a witness who refuses to attend and give
evidence, although if that witness is within the control of one of the parties, the
tribunal may in appropriate circumstances be justified in drawing an adverse
inference from his failure to do so. A party may, however, use the available court
procedures, such as the issuing of witness summonses, to require the attendance
of witnesses before the tribunal or to secure that their evidence is available for use
at the arbitration hearing.*°”’ There are, however, limits on the court’s ability to
compel attendance, notably that agreement of the tribunal or the other parties is
required, and the witness summons procedure can only be used in relation to
witnesses within the United Kingdom.*”

Expert evidence called by the parties.*”' The parties may wish to 5-149
adduce expert opinion evidence to support their respective cases in the arbitration
and, if so, they should obtain an appropriate direction from the tribunal. The
direction should cover the form in which the experts’ evidence is to be given, and
in many cases it will also specify the maximum number of experts on whose
evidence the parties may rely and, in broad terms at least, the nature of the
evidence to be given. So, for example, it may provide that each party may adduce
evidence from one expert in relation to the particular technical issues raised by the
case and from one expert in relation to the computation of the alleged loss.
Specifying these matters in the direction will avoid a multiplicity of experts from

+o4 See further paras 5—042 et seq. above.

#65 Section 38(5) of the Arbitration Act 1996.
466 Section 38(2) of the Arbitration Act 1996.
467 See para.5—164 below in relation to the giving of false evidence.
468 See for example ICSID r.35.
469 Section 43 of the Arbitration Act 1996 and Arbitration Practice Direction, para.7.1; see also paras
7-202 et seq. and 7-191 below.
470 Section 43(2) and (3) of the Arbitration Act 1996. See para.7—203 below. The court also has power
to assist in the taking of evidence from witnesses outside the jurisdiction but this is rarely invoked:
see para./—191.
471 Matters of foreign law, which are occasionally dealt with by way of expert evidence, are addressed
in para.5—209.
 246 The Conduct of the Reference

a party on the same issue. It will also help prevent a situation where each party
adduces expert evidence on different aspects of the case and there are delays whilst
they then seek to address the case put forward by the other.

5-150 Tribunal-appointed expert(s). The tribunal has power under s.37 of the
Arbitration Act 1996 to appoint experts, legal advisers*”* or technical assessors and
may allow them to attend the hearing.*’* Their fees and expenses fall to be
included as expenses of the arbitrators and can therefore form part of the
tribunal’s award on costs.*’”* The parties need not be consulted on the instructions
to the tribunal-appointed expertt’”® but it will usually be useful to do so in order
to ensure all areas where the expert’s views need to be sought are covered. The
legal advice sought by the tribunal may relate to procedural as well as to sub-
stantive matters to be determined.*”° The expert or legal adviser is to report to the
tribunal and to the parties whereas an assessor simply assists the tribunal on
technical matters*’’ but in each case the parties must be given an opportunity to
comment on “any information, opinion or advice offered by any such person’’.*”*
The tribunal should not meet the expert to discuss his evidence without the
parties being present unless they consent to this.t’? The tribunal must also of
course reach its own decision and cannot delegate this to the expert, legal adviser
or technical assessor.**°

Sale| Provision of reports. Expert evidence is almost invariably given in the form
of awritten report which is produced**! prior to the hearing and the author of the
report is required to attend the hearing so that he may be questioned on it by the
parties and the tribunal. As with factual witnesses, the direction should specify a
date on which the reports are to be produced or the date should be capable of
being precisely determined by reference to other events in the arbitration.

5=152 Meetings of experts. It is not uncommon for a direction to be given that the
parties’ experts are to meet following exchange of their reports so as to discuss the
issues and identify those on which they can agree, thereby narrowing those to be

* Including those who can advise on foreign law, as in Hussman (Europe) Ltd v Al Ameen Development
& Trade Co [2000] 2 Lloyd’s Rep. 83.
”° Unless otherwise agreed by the parties: see s.37(1) of the Arbitration Act 1996.
** Section 37(2) of the Arbitration Act 1996 and see paras 6-158 and 6-159 below.
"> Hussman (Europe) Ltd v Al Ameen Development & Trade Co. [2000] 2 Lloyd’s Rep.
83.
7° See for example Home of Homes Lid v Hammersmith and Fulham LBC [2003] EWHC 807; 92
Const.
L.R. 48 at [41] where the tribunal took leading counsel’s opinion in relation to both jurisdictional
a and the exercise of its power to limit recoverable costs under s.65 of the Arbitration
Act
6.
7” This follows from the wording of s.37(1)(a)(i) as contrasted with s.37(1)(a)(ii).
8 Section 37(1) of the Arbitration Act 1996.
” Hussman (Europe) Ltd v Al Ameen Development & Trade Co [2000] 2 Lloyd’s Rep.
83
480 See para.6—074 below. ’
*' The parties usually simultaneously exchange the reports of their respective
experts.
 Ascertaining the Procedure 247

pursued at the hearing.*** The experts may be required to produce a minute of the
meeting or a schedule of agreed points, or there may be provision for supplemental
reports following the initial exchange and/or meeting.

Tribunal meeting with experts. Tribunals have occasionally sought to 5-155

preside over meetings of the experts in the absence of the parties and their legal
representatives.*** This should be avoided as it may give rise to doubts about the
fairness of the procedure.***

Giving false evidence. Where it becomes apparent that a witness is not 5-154
telling the truth, his evidence will be discredited. The tribunal will take the fact
of his having given false evidence into account when considering the weight, if any,
that can be attributed to his testimony as a whole. On a more formal level, it is
perjury for a person lawfully sworn as a witness or interpreter in an arbitration to
make a statement, material in the proceedings, which he knows to be false or does
not believe to be true.**° The requirement that he be lawfully sworn means that
unless the witness is examined on oath or affirmation he cannot subsequently be
prosecuted for perjury. As modern practice is not generally for witnesses to be
examined on oath in arbitration**® such prosecutions are very rare indeed.

Criminal liability. It is a criminal offence to interfere with the course of 5-135

justice by manufacturing false evidence intended to deceive and mislead a tribunal,
even if the evidence is never actually used.**’

Directions in relation to property and evidence. The tribunal may 5-156

also need to consider at the preliminary meeting (if it has not already done so) the
exercise of any powers it may have under ss.38(4) and (6) of the Arbitration Act
1996 to give directions in relation to property and evidence. These may include
directions for the inspection, photographing, preservation, custody or detention of
property or for the taking of samples. This is dealt with in the section on interim
measures at paras 5-074 e¢ seg. above.***
482 Tn practice such meetings may not produce much of substance because, despite their independence,
all too often the parties’ respective experts are briefed to concede as little as possible at this
preliminary stage. A “without prejudice” meeting between the experts to discuss the issues followed
by an open document recording matters of agreement may be more productive.
483 See, e.g. How Engineering Services Lid v Lindner Ceilings Floors Partitions Ple [1999] 2 All E.R.
374.
484 Which could lead to a challenge for serious irregularity under s.68(2)(a) for failure to comply with
the duty imposed by s.33(1)(b) of the Arbitration Act 1996: see paras 5-032 and 8-072. In How
Engineering Services Lid v Lindner Ceilings Floors Partitions Plc [1999] 2 All E.R. 374 a meeting
between the tribunal and the expert in the absence of the parties and their legal advisers was held
not to be unfair, but the case highlights the potential difficulties.
485 Section 1(1) and (2) of the Perjury Act 1911.
486 See para.5—157.
+87 Rv Vreones [1891] 1 Q.B. 360.
488 See, in particular paras 5-081 and 5-083.
 248 The Conduct of the Reference

(f) Language(s) ofthe reference

5-157 Selection of language(s) to be used. The language or languages to be

used in the proceedings and whether translations of any relevant documents are to
be supplied is one of the matters for the tribunal to consider under s.34(2)(b) of
the Arbitration Act 1996. This is subject to the right of the parties to agree on the
language to be used. The language used in the reference will not necessarily be the
language of the place of arbitration or that of the underlying substantive con-
tract.

5-158 Importance of choosing the language(s). The choice of language may

be an important consideration both from a practical point of view and in the
context of ensuring procedural fairness and equality. The tribunal may, for
example, be faced with parties of different nationalities, perhaps with agreements
expressed in both their languages, and may be reluctant to favour one party’s
language over that of another. In some international arbitrations the parties and
the individual members of the tribunal may not have the same mother tongue, yet
it is important that the tribunal can communicate effectively in the language of the
arbitration. In such cases an early decision on the language or languages to be used
in the arbitration is vital if it has not already been agreed between the parties.
Provision may need to be made for translations of documents or for translators to
assist in the giving of witness evidence. Translation issues may influence the choice
of language to be used**’ and should also be considered at an early stage.

5159 Agreement of the parties. As stated above, the parties are free to agree the
language(s) to be used, and an agreed language is specifically included in many
arbitration agreements. Indeed if the choice of language is likely to be troublesome
in the event of a dispute arising, it is usually better to deal with it at the stage of
contract negotiation. Most institutional arbitration rules are to the same effect as
English law, namely that if the parties do not agree upon the language to be used
it will fall to the tribunal to decide.*”

5-160 Determination by the tribunal. If the choice of a language falls to the

tribunal to decide, it may be a difficult issue to determine.*®! It must of course

489 Ty
For > sOalICe the aiority of of the
example because majority 7 be used as evidence
documents to i i
in the reference are in
i
a particular language.
Section 34(1) and (2)(b) of the Arbitration Act 1996 and see Art.17.3 of the LCIA Rules, Art.16 of
the ICC Rules and Art.17.1 of the UNCITRAL Rules. This is also the position under the Model
Law, Art.22(1) which provides that “The parties are free to agree on the language or languages
to
be used in the arbitral proceedings. Failing such agreement, the arbitral tribunal shall determine
the
language or languages to be used in the proceedings . . . ”
"In ICC arbitrations the tribunal is given some guidance by Art.16 of the ICC Rules, which provides
that the tribunal shall determine the language or languages of the arbitration “due regard
being
given to all relevant circumstances, including the language of the contract.”
 Ascertaining the Procedure 249

comply with the overriding duty imposed by s.33 of the Arbitration Act 1996.4?
The tribunal will also have to ensure that it is capable of dealing properly with the
arbitration in the chosen language (if necessary with the assistance of translators),
and that it calls for proper translations of documents which it does not properly
understand.*”* In practice the tribunal is likely to resolve the issue by looking to
the language of the parties’ contract and any subsequent communications to
determine the language(s) of the arbitration, and if necessary providing for oral
testimony to be given in the mother tongue of the witness, subject to the provision
of a proper translation of that evidence.

(g) Administrative matters

Administration during the reference. If the arbitration is being 5-161

conducted under the auspices of an arbitral institution, it is common for that
institution to be involved in the administration of the reference.*”* For example, it
will commonly arrange service on the other party and the tribunal of the notice of
arbitration and any written submissions, and may act as a conduit for communica-
tions between the tribunal and the parties. This latter approach can, however, be
very inefficient, for example in the context of trying to fix dates and venue for a
preliminary meeting or corresponding on procedural issues, and it is in practice
often replaced by direct communications, with the institution simply being kept
informed of what has been agreed.

Tribunal or parties to carry out administration. In an ad hoc 5-162

arbitration,*?® the tribunal as a whole or the chairman may carry out the necessary
administration during the reference, but often it is left to the parties or their
advisers to co-ordinate this. It would not be appropriate to leave the administration
to one party or their adviser unless the other party agrees, but agreement may be
forthcoming where for example greater resources are available to one of the parties
to achieve an orderly administration of the reference, or where it is very much
easier for one party to deal with administration because of physical location.

Secretary to the tribunal. The tribunal may appoint a secretary to assist 5-163
with administration of the reference, particularly in very large cases. Prior agree-
ment of the parties to the appointment should be obtained, particularly if it is
intended that the parties should meet the cost of the secretary’s services. There
has been some controversy over the role of the secretary and whether it is

492 See para.5—032 above.

493 EF Rotheray € Sons Ltd v Carlo Bedarida & Co [1961] 1 Lloyd’s Rep. 220. See also Art.17.4 of the
LCIA Rules and Art.17.2 of the UNCITRAL Rules. The position under English law is also
reflected in Art.22(2) of the Model Law which states that the tribunal “may order that any
documentary evidence shall be accompanied by a translation into the language or languages agreed
upon by the parties or determined by the arbitral tribunal”.
#4 See para.2—061.
#5 See para.2—006.
 250 The Conduct of the Reference

acceptable for this to extend to assisting the tribunal by producing a draft of the
award or some sections of it.*?° If either party has any concerns in this regard it
should raise them when the proposal to appoint a secretary is first aired by the
tribunal so that the precise role can be clarified and agreed.

5-164 Fixing the date of the hearing. If an oral hearing is to take place*”’ the
time and venue should be arranged far enough in advance to allow the parties
adequate time for preparation. Although it may be possible to fix a date at the stage
of appointment of the tribunal, it is frequently more appropriate to wait until the
issues have been defined by the exchange of written submissions*”® and a clearer
assessment is possible of the issues in dispute, the likely length of the hearing and
also the length of time required for preparation.*”’ Accordingly the main oral
hearing date will often be set at the preliminary hearing, if there is one, or
otherwise at the stage when directions are given by the tribunal setting out the
procedural timetable for the conduct of the reference.

5-165 Tribunal’s obligation to be available. In the absence of express

agreement to do so, the tribunal is under no obligation to make particular dates
available for hearings; the obligation is to sit on such dates as may reasonably be
required having regard to all the circumstances, including the arbitrators’ own
commitments.°”? Having said that, if an arbitrator is unable to sit for the required
number of days within a reasonable period it may be preferable for him to offer to
resign, depending of course on the circumstances, including the stage to which the
case has progressed .*°*

5-166 Proper planning needed. If the procedural stages and any hearings are
well-planned this will help ensure the parties and their advisers are properly
prepared and can also reduce costs. The tribunal, the parties and their representa-
tives will be able to set aside the necessary time for each stage in their diaries.
Subject of course to the tribunal’s duty to ensure that the reference is conducted
without unnecessary delay,°°' the procedural timetable laid down should be
achievable and flexible, and the length of time set aside for the hearing itself ought
as far as possible to be a realistic assessment of what is required, otherwise further
hearings may be necessary. Adjournments will result in delay and additional costs,

“° Assisting with the drafting of an award is not of itself objectionable, though most arbitrators would
be expected to be able and willing to do it themselves: see para.6—-056 below.
*7 There is no entitlement to an oral hearing see para.5—196 below.
*® Assuming there are to be any, see paras 5—120 et seg. above.
® Where interim measures are sought however it may be necessary for the tribunal to convene a
hearing as a matter of urgency immediately following its constitution.
°° K/S Norjarl A/S v Hyundai Heavy Industries Co Lid (1991] 1 Lloyd’s Rep. 524, CA.
°° Though under a different statutory regime, see Enterra Pty v ADI Lid [2002] N.S.W.S.C. 700, an
Australian case in which the New South Wales Supreme Court held that an arbitrator could not be
remoyed on grounds of his being “unsuitable” merely because of undue delay in fixing a hearing
date. ;
°°! Section 33 of the Arbitration Act 1996: see para.5—032 above.
 Ascertaining the Procedure Z eal—

and the evidence and issues discussed at the first hearing will inevitably be less
immediate and fresh in the minds of all concerned when the hearing is reconv-
ened.

Pre-trial hearing or conference. The arrangements for the substantive 5-167

hearing may include a pre-trial hearing or conference at which the parties and/or
their advisors are required to attend before the tribunal*’* on a date some time
before the substantive hearing. This is particularly useful where there are specific
issues which the parties wish to have dealt with before the start of the substantive
hearing, but in most cases some form of preparatory hearing or conference will be
of assistance. The purpose is usually to ensure that the case will be ready for the
substantive hearing, to ensure that the parties and their representatives understand
the arrangements that have been made and know what to expect when the hearing
begins, and to address any outstanding procedural steps. It may also provide an
opportunity for seeking to narrow the issues in dispute between the parties.

Venue for the hearing. Whoever is administering the reference*”’ will need 5-168
to arrange a suitable venue for the hearing. Obviously a room will be required for
the hearing itself, but it may also be useful to have retiring rooms for each of the
parties and for the tribunal, so that they can discuss the case and work on
documents in private. The venue will usually be a neutral location, such as a
conference room in a hotel or rooms available for the purpose from a local
institution or chamber of commerce. Various arbitration institutions have rooms
available for arbitrations and there are some commercial enterprises with suitable
facilities for hire. Occasionally, the parties may for reasons of cost or convenience
agree to hold the arbitration hearing in one of their own offices or those of their
advisers or indeed in the offices of a member of the tribunal.

Room hire charges. A deposit will usually be required in advance for the 5-169
cost of the room hire and this is usually borne equally between the parties or by
the claimant alone. The cost of the venue hire forms part of the costs of the
arbitration and can therefore be reimbursed if appropriate following a decision on
costs by the tribunal in its award.°”*

Other administrative arrangements. The parties should also consider 5-170

what other administrative arrangements need to be made for the hearing. For
example, they may want a transcript of the proceedings and, if so, a firm of
shorthand writers (or court reporter) should be retained or recording equipment
installed. It is common in larger cases for simultaneous transcription to be

502 Physical attendance at a pre-trial conference is not always required and it may, for example, be
possible to arrange video-conferencing or a telephone conference call.
>03 See paras 5-171 et seq. above.
°4 See paras 6-132 and 6-133 below.
 252 The Conduct of the Reference

available on laptop computers and other computer based technologies are also
sometimes used for the presentation of documents or submissions. Appropriate
arrangements need to be made well in advance of the hearing to ensure set-up and
operation of these systems runs smoothly. If any of the witnesses are to give their
evidence in a language other than English it may be necessary to arrange for the
attendance of a translator.°°° If the evidence is to be given on oath or affirmation,
4 bible or other relevant text needs to be on hand. On a more mundane level,
refreshments should be arranged, both for the parties and for the tribunal.

5-171 Arrangements in multiparty arbitrations. Save for possible compli-

cations concerning the constitution of the tribunal,*’° there are no special proce-
dural requirements of multiparty or consolidated arbitrations. However, the
involvement of several parties may make the proceedings more complex to manage
from an administrative viewpoint and the need for procedural directions from the
tribunal even greater.>””

(h) Privacy and the obligation of confidentiality

S172 Privacy and confidentiality. It has long been assumed that arbitrations in
England are private and confidential. By this it is meant that the proceedings,
including any hearing,*”* are a private matter between the parties and the tribunal,
from which strangers are generally excluded. The proceedings are also con-
fidential, so that neither party is entitled to publish details of the case to third
parties.°’’ These general principles derive from the arbitration agreement rather
than from any privilege attaching to information used in or relating to the
arbitration. They are subject to exceptions as discussed below,>'® but the privacy
and confidentiality of the process has often been cited as one of the key virtues of
arbitration when compared with litigation. As Leggatt J. stated: the concept of
privacy in arbitration “derives simply from the fact that the parties have agreed to
submit to arbitration particular disputes arising between them and only between

505
See further para.5—168 above.
°° See paras 3-040 et seq. on multi-party arbitrations generally, and para.3—042 concerning appoint-
ment of the tribunal.
°°? See the UNCITRAL Notes on Organising Arbitral Proceedings, s.18, paras 86 to 88, which set out
some of the areas that may be more complex in a multi-party case.
°°8 Oxford Shipping Co Ltd v Nippon Yusen Kaisha (The ‘Eastern Saga’’) [1984] 3 All E.R. 835 at 379:
Hassneh Insurance Co of Israel v Stuart J Mew {1993] 2 Lloyd’s Rep. 243.
°° "The mere fact that parties to whom disclosure is contemplated are in the same beneficial ownership
and management as the party to whom the obligation of confidentiality is owed is not sufficient to
displace it: Ah Shipping Corp v Shipyard Trogir [1998] 2 All E.R. 136. However even an express
confidentiality provision will not prevent a party relying on an arbitration award as conferring rights
upon him in other proceedings between the same two parties: Associated Electric & Gas Insurance
Services Ltd v European Reinsurance Co of Zurich [2003] 1 W.L.R. 1041.
510 See paras 5-086 et seq.
 Ascertaining the Procedure ; 253

them”.*'! The obligation of confidentiality is implied into the arbitration agree-

ment as a matter of law and arises as an essential corollary of the privacy of
arbitration proceedings.>!”

Absence of statutory provision. Despite the widespread acceptance of 5-173

privacy and confidentiality as characteristics of arbitration, there is no statutory
provision in the Arbitration Act 1996 or elsewhere dealing with privacy and
confidentiality in the arbitration context.°'? The reason for this is that “grave
difficulties arose over the myriad exceptions” and the formulation of any statutory
principles was ultimately rejected on the basis that it would impede the current
practice in English arbitrations as regards privacy and confidentiality and give rise
to more litigation.°'* As a result both the principles and the exceptions to them?!>
have to be gleaned from the case law and cannot be said yet to be fully explained.
As Potter L.J. noted in Ali Shipping Corp v Shipyard Trogir?"®:

“While... the boundaries of the obligation of confidence... have yet to be deline-

ated ... , the manner in which that may best be achieved is by formulating exceptions
of broad application to be applied in individual cases, rather than by seeking to recon-
sider, and if necessary adapt, the general rule on each occasion in the light of the
particular circumstances and presumed intentions of the parties at the time of their
original agreement.”

Reservations have been expressed by the Privy Council about the desirability or
merit of characterising a duty of confidentiality as an implied term subject to
exceptions, because it fails to recognise the different types of confidentiality
attaching to different types of documents.?'’ The Privy Council did not however
advance an alternative approach but indicated that, at least so far as the award itself
is concerned, it may have to be referred to for a number of different purposes
including the enforcement of the rights it confers.

Scope of the obligation of confidentiality. The fact that an obligation o-ii4

of confidentiality exists does not prevent any mention whatsoever of the arbitra-
tion. In Department of Economic Policy and Development of the City of Moscow v
Bankers Trust Co>'® Cooke J. noted that: ‘“There can in my judgment be no breach

511 In Oxford Shipping Co Ltd v Nippon Yusen Kaisha (The ‘Eastern Saga’’) [1984] 3 All E.R. 835 at
842.
512 4hi Shipping Corp v Shipyard Trogir [1998] 2 All E.R. 136, overruling Colman J. in Hassneh Insurance
Co v Mew [1993] 2 Lloyd’s Rep. 243 on this point.
513 By contrast, s.14 of the New Zealand Arbitration Act 1996 contains a specific obligation.
514 See further paras 11 to 17 of the DAC report and the commentary on that decision by Sir Patrick
Neill Q.C., “Confidentiality in Arbitration” (1996) 12 Arbitration Int. 287.
515 The exceptions established in case law to date are addressed in paras 5-186 to 5-189 below.
5161998] 2 All E.R. 136 at 147.
517 Associated Electric €& Gas Insurance Services Lid v European Reinsurance Co of Zurich [2003] 1
W.L.R. 1041.
518 £2003] EWHC 1377; [2003] 1 W.L.R. 2885 at [51]. The case was reversed in part on appeal at [2004]
EWCA Civ 314; [2004] 2 Lloyd’s Rep. 179, but the Court of Appeal did not take issue with the
proposition quoted.
 254 The Conduct of the Reference

of duty in disclosing the fact of commencement of arbitration, the existence of an

arbitration or the result of that arbitration where there is any legitimate reason to
do so. Equally, the existence of any challenge to an award, the existence oflitigation
relating to it and the result of that litigation would for similar reasons not amount
to a breach if disclosed.” These comments were o/iter and perhaps reflect a more
liberal approach than some would consider warranted. They do however highlight
the difficulty which results from the relatively undefined scope of the obligation of
confidentiality imposed at common law. The judge was clearly influenced by the
need for disclosure of such matters where there is a commercial necessity or
legitimate commercial interest, but it is not clear whether disclosure is limited to
such circumstances. Disclosure will obviously be permitted where legally
required.*!? Beyond this it is not clear what commercial necessity or legitimate
commercial interest really means for these purposes. Would disclosure of the
existence of an arbitration be a breach of the obligation of confidentiality absent
some commercial necessity or legitimate commercial interest? The answers to
questions of this sort are not readily to hand in the case law and if parties are
concerned about such matters the best course is to deal with them expressly in
their arbitration agreement.*”°

5-175 Contractual provision for confidentiality. Whilst it is clear that

under English law the general principles of confidentiality and privacy apply to
arbitration, there is no reason to be complacent, or to regard the current position
as beyond question, particularly in the light of decisions such as Esso/BHP v
Plowman.**' In that case the High Court of Australia reviewed the English
authorities on the subject in detail with substantial input from leading English
lawyers, yet concluded that under Australian law there was no implied obligation
of confidentiality. Certainly if privacy and confidentiality are of great importance
to any or all of the parties, for example because the subject matter of the
arbitration includes technical or commercial secrets, the safest course is to make
specific provision in the arbitration agreement that can if necessary be backed up
by an order of the tribunal or the court.

5-176 Exceptions to the duty of confidentiality. As stated above, there are

a number of exceptions to the duty of confidentiality. In practice problems most
frequently arise where one party wants to use documents obtained in an arbitra-
tion for some other purpose.°”* The private nature of arbitration gives rise to an
implied obligation on a party obtaining documents in an arbitration not to disclose
or use them for any purpose other than the dispute in which they were obtained.
°2
°! For example by a company under the rules of a Stock exchange on which its shares
are listed.
°20 See para.5—185 below.
**1 (1995) 11 Arbitration Int. 234.
°*2 Similar considerations will apply where a non-party seeks disclosure in relation
to an arbitration or
in relation to court proceedings concerning a dispute in relation to which there is a binding
arbitration agreement: see Glidepath BV v Thompson [2005] 2 Lloyd’s Rep. 549.
23 Dolling-Baker v Merrett and Others [1991] 2 All E.R. 890 at 899, CA: Hassneh
Insurance Co of Israel
and Others v Stuart JMew (1993) 2 Lloyd’s Rep. 243. '
 Ascertaining the Procedure 259

This duty of confidence extends to “any documents prepared for and used in the
arbitration, or disclosed or produced in the course of the arbitration, or transcripts
or notes of the evidence in the arbitration or the award”’.*** There are exceptions
to this duty of non-disclosure where the disclosure takes place with the consent of
the other party or by order or permission of the court, where it is reasonably
necessary or where it is in the interests of justice. These exceptions are examined
in the following paragraphs.

Disclosure of documents following consent, order or permis- 5-177

sion of the court. The obligation not to disclose or use documents arises
from the implied obligation in the arbitration agreement to maintain confidential-
ity, rather than any confidentiality or privilege being conferred on the document
itself by virtue of its use in the arbitration. The obligation may accordingly be
displaced by consent of the other party to the arbitration. It will also be displaced
where disclosure is pursuant to an order or permission of the court.°?> Where a
third party seeks disclosure of documents on the court file prior to proceedings
being stayed in favour of arbitration, the court will only grant its permission where
the parties to the arbitration consent or there are overriding interests of justice
requiring disclosure.°”° This also applies to applications for ancillary relief and
related evidence.

Disclosure reasonably necessary. The duty of confidence is qualified in 5-178

relation to the award when disclosure is reasonably necessary to establish or
protect a party’s legal rights as against a third party*’’ by founding a cause of
action or a defence to a claim.*** In these circumstances disclosure of the award,
including any reasons given, will not be a breach of the duty of confidentiality.°””
This also applies to pleadings, written submissions, proofs of witnesses, tran-
scripts and notes of the evidence, provided of course such disclosure is reasonably
necessary to establish or protect a party’s legal rights as against a third party.°*?

524 per Parker LJ. in Dolling-Baker v Merrett and Others [1991] 2 All E.R. 891 at 899, CA.
525 Dolling-Baker v Merrett and Others {1991] 2 AIL E.R. 890, CA; London & Leeds Estates Ltd v Paribas
Ltd (No.2) [1995] 2 E.G. 134; A Shipping Corp v Shipyard Trogir [1998] 2 All E.R. 136.
526 Ghidepath BV v Thompson [2005] EWHC 818 and para.5—189 below. See though Department of
Economic Policy and Development of the City of Moscow v Bankers Trust Co [2004] EWCA Civ 314;
[2004] 2 Lloyd’s Rep. 179 where it was held that the parties’ election for confidential arbitration
does not dictate the position in respect of arbitration claims brought before the court, but the court
can take into account the parties’ expectations in this regard.
5°27 The position is even stronger where a party seeks disclosure in the context of subsequent
proceedings between the same two parties: Associated Electric & Gas Insurance Services Ltd v
European Reinsurance Co of Zurich [2003] UKPC 11.
528 For example where the disclosure is necessary in order for a party to pursue a subsequent claim
against his insurers in respect of the same loss.
529 Hassneh Insurance Co of Israel and Others v Stuart JMew [1993] 2 Lloyd’s Rep. 243; Aly Shipping
Corp v Shipyard Trogir [1998] 2 All E.R. 136.
530 Ali Shipping Corp v Shipyard Trogir [1998] 2 All E.R. 136, per Potter LJ. at 147. It was previously
thought that this principle applied only to an award and not to materials such as pleadings, witness
statements, disclosure, etc., used in the arbitration process leading up to the award. Indeed, in
Hassneh Colman J. justified the distinction between the award and other materials on the grounds
that, unlike other documents used in an arbitration, an award determines the parties’ rights and
obligations, and it is also potentially a public document in the context of supervision or enforcement
 256 The Conduct of the Reference

Reasonably necessary in this context means more than simply evidentially relevant
to the legal rights in question. It must be shown that the information will play an
essential part in establishing the right or defence in question, such that serious
prejudice will be caused if access is denied.**' However a degree of flexibility will
be applied taking account of such matters as the issues to which the information
is directed and the practicality and expense of obtaining it elsewhere.**?
There is also an exception to the duty of confidentiality to the effect that a party
may put the award and any reasons before a court if there is an application seeking
to invoke the court’s supervisory powers in relation to the arbitration, or if the
court’s assistance is sought with regard to enforcement of the award.>*?

5-179 Disclosure in the interests of justice. A further limited exception to

the obligation of confidentiality arises where disclosure is required in the interests
of justice. This exception was referred to by Mance J. in London & Leeds Estates
Ltd v Paribas Ltd (No.2)°** as arising where disclosure is required in the public
interest. In that case disclosure was sought to demonstrate prior inconsistent views
expressed by an expert in arbitration proceedings. The “‘interests of justice” and
the “public interest” might appear to be open-ended concepts, but as Potter L.]J.
explained in Ali Shipping Corp v Shipyard Trogir**> the exception is based on the
interests of justice in ensuring that the judicial decision in the particular case was
based on accurate evidence rather than any public interest in the broader sense.

5-180 Enforcement of confidentiality obligations. The usual remedy in

the event of threatened breach of the confidentiality obligation is injunctive relief,
either from the tribunal if it has power to do so**° or from the court.>*” It is not
necessary to show that prejudice will be caused by the disclosure.***

(1) Enforcement of procedural orders

S=181 Duty to comply with the tribunal’s procedural orders. Section

40(1) of the Arbitration Act 1996 imposes a mandatory general duty on the parties
to do all things necessary for the proper and expeditious conduct of the reference.

by the court. See also Insurance Co v Lloyd’s Syndicate [1995] 1 Lloyd’s Rep. 272 as to the scope of
the qualification.
**! Ghidepath BV v Thompson [2005] 2 Lloyd’s Rep. 549.
°*? per Potter LJ. in Ali Shipping Corp v Shipyard Trogir [1998] 2 All E.R. 136.
*8 Hassneh Insurance Co of Israel and Others v Stuart 7 Mew [1993] 2 Lloyd’s Rep. 243.
22 (L995 Zn G342
°35 [1998] 2 All E.R. 136 at 148.
°36 See para.6-107.
°37 See para./—195.
8 Ahi Shipping Corp v Shipyard Trogir (1998] 2 All E.R. 136.
 Ascertaining the Procedure 257

By s.40(2)(a) this specifically includes complying without delay with any order or
direction of the tribunal on evidential or procedural matters.>°°

Powers of the tribunal in case of default. Section 41 of the Arbitra- 5-182

tion Act 1996 sets out the tribunal’s powers in cases of default, unless the parties
have agreed otherwise.°*° These powers fall into three categories. First, there is a
power to dismiss the claim for want of prosecution and this is dealt with in paras
5—224 to 5—227 below. Second, the tribunal is empowered to continue the proceed-
ings even if a party fails to attend the hearing or submit evidence. This is dealt
with in para.5—202 below. Third, there are powers exercisable by the tribunal
where there has been a failure to comply with an order it has made. In addition to
these powers of the tribunal, the court may make an order requiring a party to
comply with a peremptory order of the tribunal.°*' The court can then apply its
coercive powers in the event of a failure to comply.

Failure to comply with an order of the tribunal. Ifa party fails to 5-183
comply with an order of the tribunal, without showing sufficient cause (i.e.
satisfying the tribunal that there were justifiable reasons for the failure) then the
tribunal may make a peremptory order.°*” The peremptory order must stipulate
the time for compliance and must be to the same effect as the order which has been
disobeyed. The tribunal cannot therefore seek to penalise non-compliance with its
order by making a peremptory order on some other matter unconnected with the
default. Nor can the peremptory order be more onerous than the order which has
been disobeyed,**? save of course in relation to the time limit imposed for
compliance which is within the discretion of the tribunal.

Failure to comply with a peremptory order for security for 5-184

costs. The consequences of a party failing to comply with a peremptory order
will depend upon whether it relates to security for costs or to some other matter.
If the order relates to security for costs, failure to comply entitles the tribunal to
make an award dismissing the claim.°*

Failure to comply with any other kind of peremptory order. In 5-185

the event of failure to comply with any other kind of peremptory order the tribunal

539 As ta the remedies for failure to comply with the duty, see para.205 of the DAC report. They
include the ability of the tribunal to exercise its powers under s.41 of the Arbitration Act 1996—see
para.5—-192.
540 Section 41(1) and (2) of the Arbitration Act 1996. Subsection (1) emphasises the parties’ freedom
to agree the powers they wish to confer on the tribunal to deal with a party’s default. Subsection
(2) makes clear that unless the parties have agreed otherwise, the default provisions set out in
subss.(3) to (7) of s.41 apply.
541 Section 42 of the Arbitration Act 1996 dealt with in paras 7-198 ef seq. below.
542 Section 41(5) of the Arbitration Act 1996.
543 This results from the words “‘to the same effect” in s.41(5) of the Arbitration Act 1996.
544 Section 41(6) of the Arbitration Act 1996. Security for costs orders are distinguished to avoid the
prospect of the reference being stayed indefinitely. It also follows the practice of the court, see
para.210 of the DAC report.
 258 The Conduct of the Reference

has a discretion under s.41(7) of the Arbitration Act 1996 to do any of the fol-
lowing:

(a) direct that the party in default shall not be entitled to rely upon any
allegation or material which was the subject matter of the order;

(b) draw such adverse inferences from the act of non-compliance as the
circumstances justify;
(c) proceed to an award on the basis of such materials as have been properly
provided to it;
(d) make such order as it thinks fit as to the payment of costs of the arbitration
incurred in consequence of the non-compliance.

These remedies do not include the power to proceed immediately to a summary

award against the defaulting party as this was considered too draconian,** but
nevertheless they provide the tribunal with powers to impose sanctions as
appropriate.

6. THe HEARING

(a) Attendance and representation

5-186 No entitlement to oral hearing. Prior to the Arbitration Act 1996 the
parties or either of them were entitled to require an oral hearing before the
tribunal.**° That is no longer the case. Unless all parties agree that there shall be
an oral hearing, it is for the tribunal to decide whether there should be oral
evidence or submissions.°*” Many arbitration rules reverse this position by allow-
ing a party the right to insist on an oral hearing on the merits.°*8

5-187 When and where to hold hearings. If there is to be an oral hearing the
tribunal decides when and where the hearing or indeed any part of the proceedings
shall be held.*” This is subject to the right of the parties to agree these matters.>>°
It might, for example, be convenient to hold part of the proceedings in a particular
location in order to accommodate several witnesses or an important witness who
is unable to travel to the seat of the arbitration.**! It should always be made clear

> See para.211 of the DAC report. Such a remedy might also lead to difficulties in the enforcement
of the award in other jurisdictions.
546
Henry Sotheran Ltd v Norwich Union Life Insurance Society [1992] 31 E.G. 70. This was subject to
agreement otherwise by the parties.
"7 Section 34(2)(h) of the Arbitration Act 1996,
“48 See for example Art.19.1 of the LCIA Rules.
*” Section 34(2)(a) and (h) of the Arbitration Act 1996, See further para.2—107 above.
°°? Section 34(1) of the Arbitration Act 1996,
**! Tt is also becoming increasingly common for less important witnesses to give their evidence by
video
conferencing if for some reason they are unable to attend the hearing: see para.5—210 below.
 The Hearing 259

by the tribunal where the seat’ of the arbitration is, particularly if hearings are
being held in other locations.

Who may attend. The categories of persons who may attend an arbitration 5-188
hearing are not clearly defined, but will include the parties themselves and persons
attending on behalf of the parties, for example their legal representatives. Third
parties (other than witnesses) are excluded from the hearing,>>* unless of course
both parties and the tribunal agree otherwise.** Any expert, legal advisor or
technical assessor appointed by the tribunal may be allowed to attend the hear-
ingirer

Representation at the hearing. Parties may wish to be represented at the 5-189

hearing by an advocate. Unless the parties have agreed otherwise, this may be a
lawyer or ‘other person”’.°°® The refusal of a party’s request for representation by
an advocate chosen by him, or seeking to limit the level of representation,?*’ may
give grounds for challenging the award, particularly in complex cases.*°* However,
a party cannot insist upon a particular individual if, for example, that person is
unsuitable**? or unavailable.°°? In these circumstances some other individual
would have to be chosen. Legal representation may be excluded by the parties’
arbitration agreement.*”' It is excluded by the rules of certain trade associations,*°
but is expressly permitted by other institutional rules.°® Many sets of rules are

552 For the seat of arbitration generally see paras 2-099 er seg. and 5—071 et seg.
3 Oxford Shipping Co Ltd v Nippon Yusen Kaisha (The “Eastern Saga’’) |1984] 2 Lloyd’s Rep. 373 at
379; Hassneh Insurance Co of Israel and Others v Stuart J Mew [1993] 2 Lloyd’s Rep. 243. In practice,
the need to exclude the public will rarely arise, precisely because the proceedings are private and the
venue privately arranged between the parties and the tribunal.
°>+ The Court of Appeal have confirmed that by agreeing to arbitrate the parties waive their right to
a public hearing and this does not infringe Art.6 of the European Convention on Human Rights:
see Stretford v Football Association Ltd [2007] EWCA 238. See also para.1—039 and Premium Nafta
Products Lid v Fili Shipping Co Ltd [2007] UKRHL 40 at [20].
59° Section 37(1) of the Arbitration Act 1996.
556 Section 36 of the Arbitration Act 1996. See also Piper Double Glazing Ltd v DC Contracts 31 Con.
L.R. 149 and Hookmay & Co Ltd v Alfred Isaacs & Sons [1954] 1 Lloyd’s Rep. 491.
557 Norbrook Laboratories Lid v Tank [2006] EWHC 1055. If the ievel of representation is inappropriate
that may affect the recovery of the cost of such representation.
558 For failure to comply with the duty under s.33 of the Arbitration Act 1996. See also Hookmay &
Co Ltd v Alfred Isaacs & Sons {1954] 1 Lloyd’s Rep. 491 and How Engineering Services Ltd v Lindner
Ceilings Floors Partitions Plc [1999] 2 All E.R. 374, both cases under the old law.
559 ¢.¢. because he is a close personal friend or business partner of a member of the tribunal. There is
little authority on what criteria should be applied in determining unsuitability, and a tribunal should
be hesitant about excluding a chosen representative on the grounds of unsuitability unless it has real
concerns that the progress of the hearing would be undermined or that the resulting award would
be rendered vulnerable to challenge.
56 See para.184 of the DAC report.
561 See for example Virdee v Virdi [2003] EWCA Civ 41. This will not preclude the appointment of a
legal advisor to the tribunal pursuant to s.37 of the Arbitration Act 1996.
562 e.g Art.16.2 of theGAFTA Arbitration Rules, No.125 excludes legal representation at oral hearings
at the first instance stage unless the parties agree otherwise.
563 ¢.¢ UNCITRAL Rules, Art.4; LCIA Rules, Art.18.1.
 260 The Conduct of the Reference

silent on the point, and the practical effect of this is that the parties may be legally
represented if they so wish.

5-190 Exclusion of a party’s representative. The parties are entitled to have

persons attending to assist them in presenting their case,** and if such persons are
excluded without good reason when their presence is desired by a party, the award
may be subject to challenge.°*®

5-191 Exclusion of a party. Although there will be some types of behaviour which
would justify the exclusion of a party (or a person whom a party wishes to be
present to assist with the presentation of his case), the importance of the parties’
right to be present at the hearing means that such exclusion will be justified only
in very extreme and exceptional circumstances. Because of the serious risk that the
award will be challenged ifaparty or his chosen representative is excluded,’° such
action should be viewed by the tribunal as the very last resort.

5-192 Hearings in the absence of one of the parties. The tribunal has
power to proceed in the absence of a party, and a hearing may take place even if
one of the parties is not present and the case proceeds in the absence of submis-
sions, evidence or indeed any case at all from one of the parties.°°’ Obviously it is
desirable that all of the parties should present their respective cases. However, if
the tribunal were not able to proceed in the absence of a party, it would be possible
for that party to circumvent the arbitration agreement by simply refusing or failing
to participate in the reference. Where one party does not participate the tribunal
should record in detail in its award the opportunities to participate that the absent
party was given.

5=193 Due notice of hearing required. Before proceeding, a tribunal should

ensure that a non-attending party has been given due notice of the hearing*®* and
indeed of the reference generally.°®’ In order to comply with its duty under s.33

°°4 See para.5—199 above.

°° In the words of Turner L.J. in Re Haigh, Haigh v Haigh (1861) 31 L.J. (Ch), 420 at 424: “I certainly
do not mean to lay it down that an arbitrator is bound to submit to insults from those who attend
him but I think that before he excludes anyone from attending on behalf of any of the parties
interested, they are bound to ascertain that there is good reason for the exclusion, and to take the
best care he can that the party who is affected by the exclusion is not prejudiced by it.” That was
a case under the old law but it would presumably now be challenged as a serious irregularity under
8.68 of the Arbitration Act 1996 on the basis of a failure to allow the party concerned a reasonable
opportunity to put his case and/or to act fairly in accordance with the duty imposed by s.33 of the
; Arbitration Act 1996. It would be necessary to show substantial injustice: see paras 8-072 et seq.
°°° i.e. for failing to give that party a fair opportunity to be heard.
°°7 Section 41(4) of the Arbitration Act 1996.
°°8 This is required by s.41(4)(a) of the Arbitration Act 1996.
° Schumacher t/a Vita Konzern v Laurel Island Ltd (The “Santa Cruz Tres’) {1995] 1 Lloyd’s Rep.
208.
 The Hearing 261

of the Arbitration Act 1996,°” if the tribunal has any doubts about whether a
party’s absence 1s inadvertent it should adjourn the hearing and make inquiries.°”'
If it proposes to proceed in the absence of a party, the tribunal should make
absolutely clear to the party in default that the arbitration will go ahead any-
way.57

Conduct of hearing with a party absent. The fact that a claim is 5-194
undefended does not mean that the tribunal is obliged to accept it without
question. Nor is it under an obligation to protect the party who is absent. Rather,
the tribunal’s function is “to hold the scales as evenly as [it can] and to act fairly
and judicially in the conduct of the hearing”’.°’* In practice this means that where
an arbitration hearing proceeds in the absence of one of the parties, the tribunal
should consider the evidence and submissions before it in order to determine
whether they are sufficient to establish the claim. They are not bound to accept the
evidence of the party attending and may find,°*’* even if it is uncontroverted, that
it falls short of establishing the case to be proved. 575

Submissions and evidence of the absent party. The tribunal should 5-195
consider any evidence or submissions which have been tendered at any time by the
absent party, so that it takes into account the absent party’s case to the extent this
is possible on the materials before it.

Role of the tribunal. If only one party is represented, it frequently happens 5-196
that the tribunal becomes more interventionist, so as to ensure both sides of the
case are fairly developed. In such circumstances there is a fine line between being
alert to ensure procedural fairness, which the tribunal must ensure happens, and
acting as an advocate for the unrepresented party, which the tribunal must not do.
Of course the tribunal may adopt an inquisitorial role in this situation.°”° In any
event the need to be fair to both parties should be borne in mind at all
times.°”’

(b) The course and structure of the hearing

Structure of the hearing. Subject to the overriding principles and duties 5-197
set out in ss.1 and 33(1) of the Arbitration Act 1996, there are no mandatory

7 See para.5—032 above.

571 Montrose Canned Foods Ltd v Eric Wells (Merchants) Ltd [1965] 1 Lloyd’s Rep. 597 at 602.
572 The “Myron” (Owners) v Tradax Export SA [1969] 1 Lloyd’s Rep. 411 at 417. This was a case under
the old law but it seems likely that the requirement would still be imposed as part of the duty under
s.33 of the Arbitration Act 1996.
573 per Dunn, L.J. in Annie Fox and Others v PG Wellfair Lid [1981] 2 Lloyd’s Rep. 514 at 528, CA.
574 The “Myron” (Owners) v Tradax Export SA [1969] 1 Lloyd’s Rep. 411 at 416-417.
575 Lemis Emanuel € Son Ltd v Sammut [1959] 2 Lloyd’s Rep. 629 at 634.
576 See para.5—099 above.
7 Town €& City Properties v Witshier 44 B.L.R. 109. This was a case under the old law but the
requirement still applies as part of the duty to act fairly under s.33 of the Arbitration Act 1996.
 262 The Conduct of the Reference

requirements concerning the structure of the hearing.°*’* The following paragraphs

describe a frequently followed structure, similar to that adopted in court proceed-
ings, which begins with opening statements, followed by the evidence of witnesses
for the claimant and the respondent respectively and ends with closing submis-
sions. Whilst each of these may be undertaken it is not uncommon for some or all
to be omitted or curtailed, or for oral procedures to take a different course (such
as witness conferencing®”’) or to be replaced by written submissions.

5-198 Opening statements. Opening statements are intended to introduce the

tribunal to the parties’ respective cases, although the tribunal will usually be
expected to have read the parties’ written submissions and evidence in advance of
the hearing. The written submissions will often include a summary ofits case from
each party’’® which each will then develop orally at the hearing. Opening state-
ments may also address specifically the key documents relied upon, and set out the
party’s arguments and the case it will seek to establish in the course of the hearing.
However, lengthy opening statements reading aloud large numbers of documents
are not usually tolerated in arbitration proceedings and should very much be
discouraged.°*' Indeed it is becoming relatively common, particularly where the
parties have served written pre-hearing submissions or skeleton arguments sum-
marising their respective cases, for tribunals to allow only very short opening
submissions before moving on to witness testimony.

5-199 Dealing with foreign law. Where the applicable substantive law is a law
other than English law, the tribunal will have to determine whether it will be
addressed by way of expert evidence or by way of submissions. English courts treat
foreign law as a question of fact to be proved by expert evidence and tribunals have
occasionally in the past adopted the same approach. Indeed, the tribunal may
instruct its own expert on foreign law issues.*** Nowadays, however, foreign law is
almost always dealt with in arbitration by way of submissions from the parties’
advocates who may or may not be from the jurisdiction concerned,
In the absence of either party or the tribunal itself raising an issue under the
applicable foreign law that is different from English law, the tribunal is free to
decide the case on the presumption that the applicable foreign law is the same as
English law.°*?

*’® There is no requirement to follow procedures as would apply under English court procedure:
Margulead Lid v Exide Technologies {2004) EWHC 1019.
°7) See para.5—212 below.
°8° Or, in some cases, a fully argued submission including references to the evidence and legal
authorities relied upon.
$1 See, e.g. the comments of Lord Justice Saville that this was “the antithesis of fairness” in
Construction & Engineering Law, June/August 1996,
°*? Under s.37 of the Arbitration Act 1996; see para.5—160. This happened for example
in the case of
Flussman (Europe) Ltd v Al Ameen Development & Trade Co [2000] 2 Lloyd’s Rep. 83.
“3 Hussman (Europe) Lid » Al Ameen Development & Trade Co [2000] 2 Lloyd’s Rep. 83.
 The Hearing 263

Witness evidence.*** Where the witness evidence is in the form of written 5-200
witness statements and experts’ reports which are exchanged prior to the hearing
of the arbitration, these largely replace the witnesses’ evidence in chief. At the
hearing the witness will at the outset normally only be asked a few questions by
the party calling him, so as to establish his identity and to address any corrections
to his written statement. Exceptionally, the witness may also be permitted to
address additional matters not covered in his statement but usually this will be
limited to elaborating on matters dealt with rather than raising new ones. Follow-
ing the initial questioning of the witness by the party calling him, the witness will
be tendered for cross-examination by the other parties.**° If considered appro-
priate, the witness will then be re-examined.°*° The evidence may be given on oath
but this is done less and less.°*’ On the other hand, the giving of evidence by video
conference where witnesses are abroad is becoming increasingly common, partic-
ularly where the evidence of the witness is not central to the case, credibility is not
in issue and the expense and inconvenience of travelling to the hearing are not
warranted,

Questioning by the tribunal. The tribunal may ask questions of the 5-201
witnesses during the course of the evidence or after the parties have completed
their questioning. If however the tribunal is adopting an inquisitorial approach it
will take the lead in conducting the questioning.°**

Witness conferencing or “hot-tubbing”’. In recent years tribunals in 5—202

some cases have adopted a method of hearing witness evidence which involves a
number of witnesses giving evidence simoultaneously.°*’ This method is generally
only adopted with the parties’ agreement*”’ and is often used for some but not all
witnesses in a case. It has been applied to both factual and expert witnesses,
though it is not usual to mix the two when adopting such a procedure. The precise
methodology varies but typically the tribunal will take the lead in questioning the
witnesses, each of whom are asked the same questions. The witnesses are each
given an opportunity to respond, both to the tribunal’s question and to the
comments of the other witness or witnesses.°’’ The parties are sometimes con-
sulted in advance and invited to suggest questions that might be put to the

584 See paras 5—142 et seq. above.

585 This is the traditional approach to witness evidence in England. See however para.5—212 for the
practice of witness conferencing.
586 Re-examination is limited to matters arising out of the cross-examination.
587 See para.5—157 above.
588 See para.5—099 above.
58° See further Wolfgang Peter “Witness Conferencing” in (2002) 18 Arbitration Int. 47.
590 Given that, absent agreement of the parties, the tribunal can decide pursuant to s.34(2)(g) whether
and to what extent it should itself take the initiative in ascertaining the facts and the law, it could
arguably impose the approach against the wishes of one of the parties but this is not generally
done.
591 Witness conferencing can be undertaken with any number of witnesses. In one LCIA case, 10
factual witnesses gave contemporaneous evidence using this technique. In most cases however, the
witness conferencing will be limited to the one witness dealing with a particular area (such as a
specific expert discipline) called by each party.
 264 The Conduct ofthe Reference

witnesses, though the tribunal will not be limited to these and may also ask their
own questions. In any event the parties should be given an opportunity, at the end
of the tribunal’s questioning, to ask any further supplemental questions they wish
to put to the witnesses, although in practice the scope of examination at this stage
is usually very limited and falls well short of a typical cross-examination.*””
Experiences of this technique, which tends to be favoured particularly by arbi-
trators from civil law jurisdictions, are varied. It can undoubtedly save time and
costs, but the parties’ representatives are unable to utilise cross-examination
techniques which they may consider a disadvantage.

5-203 Closing submissions. The parties or their representatives often make oral
closing submissions at the end of the hearing, summarising their case and the
evidence in support, and addressing the case put forward by the other party. It is
usual for the respondent to make its closing submissions prior to those of the
claimant, so that the claimant “gets the last word”. Whoever makes its closing
submissions first, there is no right of reply.°?? Alternatively, it is increasingly
common in arbitrations for there to be mutual exchange of written post-hearing
submissions and, where this procedure is adopted, they may replace oral closing
submissions altogether. If there are to be written post-hearing submissions, it is
important for the tribunal to set a date by which they are to be produced in order
to bring finality to the proceedings.*”*

5-204 Closure of the proceedings. Some arbitration agreements and arbitration

rules*”* make specific provision for the tribunal to declare the proceedings closed
at a certain point and that thereafter no further submissions may be made or
evidence produced unless requested by the tribunal or unless specific permission
is given by the tribunal. Even absent a specific provision the tribunal will often
want to draw a line under the proceedings and may indicate that permission will
be required for any further evidence or submissions.

5-205 Stay of arbitration proceedings. Subject to the agreement of the parties,

it is for the tribunal to decide when and where any part of the proceedings is to
be held.*”® In principle therefore, and subject of course to its general duty to avoid
unnecessary delay,” it is for the tribunal to decide whether there should be an

Failure to afford this opportunity would potentially give rise to a challenge under s.68(2)(a) of the
Arbitration Act 1996 for failure to comply with the duty under s.33 of the Arbitration Act 1996
which includes giving each party a reasonable opportunity of putting his case and dealing with that
of his opponent.
* Margulead Ltd v Exide Technologies [2005] 1 Lloyd’s Rep. 324.
” Article 22.1 of the ICC Rules specifically requires the tribunal to declare the proceedings closed
once the parties have had a reasonable opportunity to present their cases. Thereafter no
further
submission or argument may be made or evidence produced unless requested or authorised
by the
tribunal. 4
°°5 See for example Art.22 of the ICC Rules.
= Section 34(2)(a) of the Arbitration Act 1996.
7 Section 33(1)(b) of the Arbitration Act 1996.
 Termination of the Reference 265

adjournment or stay of the arbitration proceedings.°’> Whether it is appropriate to

do so will depend on the particular circumstances of the case, but a tribunal will
want very cogent and persuasive grounds that granting a stay will be consistent
with its duties under s.33 of the Act.°?

(c) Notes of proceedings

Arbitrators’ notes. As a general practice, the tribunal should themselves 5-206

carefully take notes of everything material stated by witnesses, and of material
points made in oral submissions. This will enable it properly to sift the evidence
and arguments, for example by comparing the oral performance of witnesses with
their statements and the documents, and also with the evidence of other witnesses.
Where a transcript is available the tribunal’s reliance on its own notes is obviously
diminished, but an arbitrator will usually want to keep a note in any event as a
precautionary measure.

Transcripts. The tribunal’s task may be made much easier if they are provided 5—207
with a transcript of the proceedings taken by a firm of shorthand writers or
produced from a recording of the proceedings. Whilst this is commonly done, it
can be expensive and the parties may be unwilling to incur the additional expense.
The tribunal may wish to explore with the parties the different options available
and what is suitable for the particular case.°°° This may vary from the luxury of
a simultaneous computerised transcript to a transcript of a mechanical recording
received some time later.

7. TERMINATION OF THE REFERENCE

(a) Termination following a final award

Functus officio. The proceedings will close after the oral hearings have finished 5-208
and any post-hearing submissions have been made. Thereafter the tribunal makes
its award.’ Once a final award is made,°’ the tribunal becomes functus officio.
This means that its authority to act ceases, the reference terminates and the award
cannot thereafter be amended.

598 See Elektrim SA v VivendiUniversal SA (No.2) [2007] EWHC 571 at [71].

599 See para.5-040 above. In Elektrim SA v VivendiUniversal SA (No.2) [2007] EWHC 571, the
tribunal refused to stay the proceedings on three occasions.
609 See para.5—180 above.
61 For the position where the parties settle the dispute during the reference see para.5—223 below.
602 Tn the case of an award which determines all the outstanding issues in the arbitration, i.e. all those
not previously dealt with in earlier awards. See para.6—005 below.
 266 The Conduct of the Reference

Amendment to or additional award. There are, though, exceptions

under the Arbitration Act 1996 to the rule that the tribunal becomes functus
officio. First, the tribunal has power under s.57 of the Arbitration Act 1996 to
correct clerical mistakes or errors or to clarify or remove any ambiguity in the
award.°°> Second, it can make an additional award in respect of any claim
presented to the tribunal which was not dealt with in the award.°* Third, the
court has power to remit matters to the tribunal under ss.68(3)(a) and 69(7)(c) of
the Arbitration Act 1996.°°°

Providing reasons. Under s.70(4) of the Arbitration Act 1996°° the court
may also order the tribunal to state the reasons for its award in sufficient detail to
enable the court properly to consider a challenge to or appeal against the award.°”
The order only arises where a challenge to or appeal against the award has actually
been made.

5-211 Fresh evidence prior to the final award. The tribunal has a discretion
whether to hear further evidence after the proceedings have closed but prior to
making its award. The key issues will be whether the evidence is material and
whether it could have been produced earlier.°°S If it is not material, or if it could
have been produced earlier, the tribunal is unlikely to exercise its discretion in
favour of allowing it to be given. If for some reason it could not have been given
earlier, the tribunal is likely to be more sympathetic to the application for it to be
taken into account. A tribunal should not receive and act on fresh evidence
obtained after the proceedings have closed without giving the parties an opportu-
nity to be heard on it.°””

5-212 Fresh evidence after the final award. If fresh evidence comes to light
subsequent to the making of the award, the tribunal cannot deal with it of its own
volition. Prior to the 1996 Act the court could remit the award to the tribunal for
the fresh evidence to be considered,°'® but it is very doubtful whether this would
now fall within the meaning of serious irregularity for the purposes of challenging
the award under s.68 of the 1996 Act.°!!

5 See paras 6-166 er seg. below.

°°* See paras 6-036 et seg. below
5 See para.8—163 below.
’° See paras 6-031 and 8—095 below.
7 See paras 8-162 et seg.
8 See JH Rayner & Co v Fred Drughorn Ltd [1924] 18 Lloyd’s Rep. 269.
° Sociedad Iberica de Molturacion SA v Nidera Handelscompagnie BV [(1990] 2 Lloyd’s Rep. 240. This
would fall within the duty imposed by s.33(1) of the Arbitration Act: see paras 5—032 above and
8-167 below.
610
But again would only do so if it was material and could not have been obtained earlier: see 4/bany
Marine Inc v South Loyal Shipping Inc and Another (The ‘Wille De Titana’’) [1994] 1 Lloyd's Rep.
541.
°'! Profilati Italia SRL v Paine Webber Inc [2001] 1 All E.R. (Comm) 1065. See also para.$—099.
 Termination of the Reference 267

Settlement. Where the parties settle their dispute, and whether or not the 5-213
tribunal issues an agreed award,°’? the tribunal is required to terminate the
substantive proceedings.°'* This is subject to agreement in writing°'* otherwise by
the parties.°!

(b) Dismissal for want of prosecution

Statutory power. The tribunal has power to make an award dismissing a 5-214
claim for want of prosecution,°'® subject to agreement otherwise by the parties and
also subject to the following conditions.°'’ First, there must have been inordinate
and inexcusable delay on the part of the claimant in pursuing the claim and,
secondly, the delay must give rise or be likely to give rise to a substantial risk that
it is not possible to have a fair resolution of the issues in the claim or the delay
must have caused, or be likely to cause, serious prejudice to the respondent.

Retrospective application. The statutory power to dismiss for want of 5-215

prosecution under the old law applied retrospectively, both in relation to arbitra-
tion agreements made and references commenced before it came into force and in
respect of delay occurring before that time.°'* The same would apply to s.41(3) of
the Arbitration Act 1996.

Contractual power. In addition to the statutory power, there may also be a 5-216
contractual power to dismiss for want of prosecution contained in the arbitration
agreement or in the arbitration rules incorporated by reference.°!”

Position where no tribunal appointed. The position is more compli- 5-217

cated where arbitration has been commenced by service of a notice of arbitration
which stops the limitation period running, but no tribunal has ever been
appointed. In those circumstances, absent factual evidence of abandonment, or

612 See paras 6-025 et seg.

613 Section 51(2) of the Arbitration Act 1996.
614 The requirement for any agreement to be “‘in writing” stems from s.5(1) of the Arbitration Act 1996
although the section gives the expression a broad meaning.
15 Section 51(1) of the Arbitration Act 1996.
616 Section 41(3) of the Arbitration Act 1996, replacing s.13A of the Arbitration Act 1950 (inserted by
the Courts and Legal Services Act 1990, s.102). Prior to this enactment there had been various
attempts to assert a power to terminate stale arbitration proceedings, which were largely rejected by
the courts: see Bremer Vulkan Schiffobau Und Maschinenfabrik v South India Shipping Corp (The
“Bremer Vulkan”) {1981] 1 AILE.R. 289; [1981] A.C. 909; Paal Wilson & Co A/S v Partenreederet
Hannah Blumenthal (The “Hannah Blumenthal’’) [1983] 1 ANLE.R. 34; Food Corp ofIndia v Antchzo
Shipping Corp (The ‘‘Antclizo”’) [1988] 2 All E.R. 513.
617 Section 41(3) of the Arbitration Act 1996.
618 [Office Cherifien Des Phosphates and Unitramp SA v Yamashita-Shinnihon Steamship Co Ltd (The
“Boucraa’’) [1994] 1 Lloyd’s Rep. 251.
619 See, e.g. Art.22 of the GAFTA Arbitration Rules, No.125.
 268 The Conduct of the Reference

some express or implied provision to proceed without delay, the reference con-
tinues and the right to appoint an arbitrator subsists.°*°

(c) Termination by mutual consent

5-218 Termination by agreement. The parties may agree to terminate the

reference and if they do so this operates as a consensual withdrawal of the tibu-
nal’s jurisdiction,°?’ i.e. the parties are agreeing to revoke the authority of the
tribunal.°? The parties may also agree to terminate the arbitration agreement™>
and whether this will also terminate the particular reference will depend upon the
circumstances of the case. The revocation must be in writing unless the arbitration
agreement is also terminated.°**

5-219 Abandonment by conduct of the parties. The conduct of the parties

in failing to proceed with an arbitration may be sufficient to justify the inference
that they have mutually agreed to abandon the contract to arbitrate.~° Ordinary
contractual principles apply in determining whether the parties have agreed on the
abandonment.®’ However, the circumstances in which silence and inactivity can
lead to an inference of abandonment by mutual consent are very limited.*S
Indeed, unless the period of silence is so long that all possibilities other than an
inferred agreement to abandon can be plainly excluded, or at least that an

8° Indescon Lid v Ogden [2005] 1 Lloyd’s Rep. 31.

1 Chimimport Ple v G D’Alesto SAS (The “Paola D’Alesio™) [1994] 2 Lloyd's Rep. 366.
®? See s.23(3) of the Arbitration Act 1996. Revocation of the tribunal’s authority would not necessarily
operate as an agreement to terminate the reference, however.
3 See para.2—110.
*+ Section 23(4) of the Arbitration Act 1996. For the meaning of “writing” see s5 of the Arbitration
Act 1996. It was considered impracticable to require agreement in writing to terminate the
arbitration agreement, see para.99 of the DAC report.
*°> Neither party can treat inactivity by the other party as a repudiatory breach of the arbitration
agreement and bring the arbitration to an end by accepting it, since both parties would be in breach
of the mutual obligation to proceed with the arbitration and neither could therefare rely on the
other’s breach: Bremer Vulkan Schiffbau Und Maschinenfabrik v South India Shipping Corp (The
“Bremer Vulkan”) (1981) 1 All E.R. 289. Nor can an arbitration agreement be frustrated by delay:
The “Hannah Blumenthal” [1983] 1 All E.R. 34.
“°° The “Splendid Sun” [1981] 2 Lloyd’s Rep. 29; [1981] QB. 694; The “Multitamt Holsatia” [1988] 2
Lloyd’s Rep. 486; Thai-Europe Tapioca Service Ltd v Seine Navigation Co Inc (The “Maritime
Winner’) [1989] 2 Lloyd’s Rep. 506. The first of these cases was expressly approved by the House
of Lords in The “Hannah Blumenthal” [1983] 1 All E.R. 34.
®27 The “Hannah Blumenthal” [1983] 1 All E.R. 34.
8 See Francaise D'Importation et de Distribution SA v Deutsche Continental Handelsgeselischaft (1985) 2
Lloyd's Rep. 592 at 598-599; The “Leonidas D™ [1985] 2 Lloyd’s Rep. I8 at 24-25; Food Corp of
India v Antclizo Shipping Corp (The ‘Antchzo") [1988] 2 All E.R. 513: The “Multitant Hokatia™
[1988] 2 Lloyd’s Rep. 486 at 491; Thai-Europe Tapioca Service Ltd v Seine Navization Co Inc (The
“Maritime Winner”) [1989] 2 Lloyd’s Rep. 506 at 513-515; The “Golden Bear” [1987] 1 Lloyd's
Rep. 331; Unisys International Services Lid v Eastern Counties Newspapers Ltd [1991] 1 Lloyd's Rep.
538, CA. See also Indescon Lid v Ogden [2004] EWHC 2326. ‘
 Termination of the Reference 269

agreement to abandon was the most probable inference, mere silence can never
amount to such an agreement.°”?

Limited scope of application. The case law on abandonment by conduct 5—220

pre-dates the coming into force of s.41(3) of the Arbitration Act 1996°° which
gave the tribunal power to make an award dismissing a claim where there has been
inordinate and inexcusable delay in pursuing it. The circumstances in which a case
based on abandonment at common law would nowadays be brought must be very
limited. It is not inconceivable, however, that the reference could be abandoned by
mutual consent even though s.41(3) would not apply, for example because the
respondent is unable to demonstrate the requisite prejudice®*' or because the
parties have excluded the power under s.41(3).

629 Unisys International Services Ltd v Eastern Counties Newspapers Ltd [1991] 1 Lloyd’s Rep. 538,
GAS
630 See further para.5—224. a
631 See, e.g. the comments of Potter J. in Thai-Europe Tapioca Service Lid v Seine Navigation Co Inc
(The “Maritime Winner”) [1989] 2 Lloyd’s Rep. 506 at 517 where he drew a distinction between
estoppel, for which prejudice is required, and contractual abandonment.
 CHAPTER 6

THe AWARD

il, INTRODUCTION «...0.0000000+¢

6-001 (b) Injunctive relief........ 6-107
(a) Contents of the chap- (c) Specific perform-
CS ae Ra ah ae 6-001 ANCE see eerieeas 6-108
(b) What is an award?.... 6-002 (d) Declaratory relief..... 6-109
(c) A final award ............ 6-004 (e) Contribution............. 6-111
(d) Awards on different (fH indenanitiyersst cece 6-113
ISSUES (nue ssen cesses 6-009 (g) Rectification, setting
(e) Provisional award...... 6-020 aside or cancellation
(i) eAlsreedawardires a 6-024 of a deed or other
(g) Reasoned award........ 6-028 document 6-114
(h) Majority award......... 6-035 (hb) ainterestetecce-e 6-115
(i) Additional award....... 6-036
(j) Convention awards.... 6-037 os (GOSUS sees
ere ence sesoa 6-129
(k) Foreign awards......... 6-041 (a) Description of costs.. 6-129
(b) Jurisdiction and man-
2 ForRMAL REQUIREMENTS ner of awarding
Ob AWARD nticcueresecrecnsts 6-044
(a) Form of the award.... 6-044 (c) Recoverable costs......
(b) Awards by more than (d) Determination of costs
one arbitrator or by by the tribunal........ 6-150
AM UMPInGs- eee avers 6-057 (e) Determination of costs
(c) Time for making by the court,.....-1.--- 6-153
Phe become oretece emcee = 6-061 (f) Costs orders commonly
(d) Taking up the 6-155
AWarCl sae eeercntens 6-064 (g) Sealed! offers:.........-.. 6-158

a SUBSTANTIVE REQUIREMENTS 6. EFFECT OF AN AWARD...... 6-162

One AWARID geste rete 6-072 (a) Effectigenerally..2.<: 6-162
(a) Award must comprise (b) Effect on the ref-
a decision by the GLEN CEhecws araaueeeeeeees 6-166
(ASLO EN es concecannone 6-073 (c) Effect on other
(b) Award must be a proceedings between
complete decision... 6-078 the same parties...... 6-176
(c) Award must be cer- (d) Effect on third
(EUbalcares 8 atten erase eeae 6-089 PAnlkesweve wrote.eee 6-183
4. RELIEF AND REMEDIES
AVAILABLE TO THE TRI-
BUNA tas sort cestin orc ctarear 6-096
 Introduction Dg

1. INTRODUCTION

(a) Contents of the chapter

This chapter deals with the award. It begins by considering what an award is 6-001
and describing the different types of award. It then looks at the formal and
substantive requirements of a valid award and also at the relief and remedies which
a tribunal may give in an award, including the award of interest. This is followed
by a consideration of costs and how these should be dealt with in the award.
Finally the chapter deals with the effect of an award including its effect on the
reference, on the parties and on third parties.

(b) What is an award?

No statutory definition. There is no statutory definition of an award in 6-002

English arbitration law despite the important consequences which flow from an
award being made. In principle an award is a final determination of a particular
issue or claim in the arbitration. It may be contrasted with orders and directions
which address the procedural mechanisms to be adopted in the reference.' Such
procedural orders and directions are not necessarily final in that the tribunal may
choose to vary or rescind them altogether.* Thus, questions concerning the
jurisdiction of the tribunal or the choice of the applicable substantive law are
suitable for determination by the issue of an award. Questions concerning the
timetable for the reference or the extent of disclosure of documents are procedural
in nature and are determined by the issue of an order or direction and not by an
award. The distinction is important because an award can be the subject of a
challenge or an appeal to the court,’ whereas an order or direction in itself cannot
be so challenged.* A preliminary decision, for example of the engineer or adjudica-
tor under a construction contract, which is itself subject to review by an arbitra-
tion tribunal, is not an award.°

' Section 34(3) of the Arbitration Act 1996 refers to “directions” given by the tribunal in relation to
procedural and evidential matters. Sections 20 and 22 refer to “decisions, orders and awards” of the
tribunal. See generally para.5—111 above.
See for example Home of Homes Ltd v Hammersmith and Fulham LBC (2003| EWHC 807; 92 Const.
L.R. 48 where an arbitrator rescinded his earlier orders limiting recoverable costs pursuant to s.65
of the Arbitration Act 1996. See also Charles M Willie and Co (Shipping) Ltd v Ocean Laser Shipping
Ltd (‘The Smaro”’) [1999] 1 Lloyd’s Rep. 225.
3 Under ss.67, 68 or 69 of the Arbitration Act 1996: see paras 8-054, 8-072 and 8-119 ef seq.
below.
+ This is because ss.67, 68 and 69 of the Arbitration Act 1996, which deal with challenges and appeals,
all specifically refer to awards: see paras 8-054, 8-072 and 8-119 ev seq. below. In Charles M Wille
and Co (Shipping) Ltd v Ocean Laser Shipping Ltd (“The Smaro”’) [1999] 1 Lloyd’s Rep. 225 Rix
J. suggested that arbitrators may have a discretion to render a procedural or evidential decision in
the form of an award if it raises a question of such principle or importance that subjecting it to the
mechanism for leave to appeal would be appropriate.
5 Cameron (A) Ltd v John Mowlem & Co Ple [1990] 52 Build. L.R. 24, CA. Relief is, however,
available from the court to give effect to such a decision, see for example Drake & Scull Engineering
Ltd v McLaughlin & Harvey Ple 60 B.L.R. 102; Macob Civil Engineering Lid v Morrison Construc-
tion Ltd [1999] B.L.R. 93 at [24].
 Dae, The Award

6-003 Procedural orders and directions. The distinction referred to above

between an award and procedural orders may in some circumstances become
blurred.° The tribunal may issue a document which purports to be an award but
which in fact deals only with procedural issues. In Exmar BV v National Iranian
Tanker Co (The “Trade Fortitude’”)’ Judge Diamond Q.C. had to consider a
document described by the tribunal as an “Interim Final Award” which contained
the decision that it would not issue an interim award* in the claimants’ favour
pending the determination of the respondents’ counterclaims. The document also
gave detailed reasons for this decision. The judge found it impossible to say that
the document, being a decision in respect of matters referred to the tribunal for
decision, was incapable by reason of its procedural nature of constituting an award.
He therefore concluded, albeit somewhat reluctantly, that he had jurisdiction to
review the tribunal’s decision.’ A stricter approach towards attempts to challenge
an “award” dealing with procedural matters is now likely to be taken in accordance
with the general non-interventionist philosophy of the Arbitration Act 1996, and
tribunals should in any event take care to distinguish their procedural orders and
directions from awards on substantive issues.

(c) A final award

6-004 Meaning of “final award”’. There are three senses in which an award may
be said to be “final”. First, an award may be final in that it determines all the
issues in the arbitration, or determines all the issues which remain outstanding
following earlier awards dealing with only some of the issues in the arbitration.'
Second, an award must be final in the sense of being a complete decision on the
particular issues considered without leaving aspects of those issues to be dealt with
subsequently or by a third party.'' Third, an award is final under s.58(1) of the

° See, e.g., Leif Hoegh & Co A/S v Petrolsea Inc (The “World Era”) (No.2) [1993] 1 Lloyd’s Rep.
363 and Urban Small Space Ltd v Burford Investment Co Ltd [1990] 2 E.G.L.R. 120. In both of these
cases the tribunal made an award dealing with disclosure of documents. In the latter case leave to
appeal against the award was refused on the ground that the appeal would not substantially affect
a party’s rights, but no objection to the application seems to have been taken on the grounds that
it was in fact a procedural direction rather than a final determination of an issue or issues in the
arbitration. Cf. Three Valleys Water Committee v Binnie & Partners 52 B.L..R. 42 where the court
refused to order an arbitrator to state reasons under s.1(5) of the Arbitration Act 1979, (now s.70(4)
of the Arbitration Act 1996—see para.6-031 below) for his decision on the service of a pleading
because it was not an award but simply a ruling. See also The ‘‘Sennar’ (No.2) [1985] 1 W.L.R.
490.
7{1992] 1 Lloyd’s Rep. 169.
* Under s.14 of the Arbitration Act 1950, The term “interim award” was deliberately not used in s.47
of the Arbitration Act 1996 which replaced s.14 of the 1950 Act. See further paras 6-009 et seg.
below.
* See also Cargill SpA v P Kadinopoulos SA [1992] 1 Lloyd’s Rep. 1, HL.
'©'The phrase has been very commonly used in this sense and this has continued notwithstanding that
the previous distinction between final and interim awards is no longer appropriate: see para.6—-009
below.
'! See paras 6-007 and 6-078 below.
 Introduction 273

Arbitration Act 1996 in that it is final and binding on the parties.!? These three
senses are discussed further in the following paragraphs.

Final award determining all outstanding issues in the arbi- 6-005

tration. A “final” award in this sense is descriptive of the kind of award rather
than its effect. It describes an award which determines all the outstanding issues
in the arbitration, i.e. all those not previously dealt with in earlier awards. A
tribunal can make only one final award in this sense of the term in the absence of
some specific authority to make more than one.'* Subject to the matters discussed
in para.6—005 below, once its final award is made the tribunal is ‘“‘functus officio”.
This means that its jurisdiction over the matters referred to arbitration comes to
an end.'*

Exceptions. There are three exceptions under the Arbitration Act 1996 to the 6—006
general rule that once the tribunal has made its final award, it becomes “‘functus
officio” and cannot subsequently amend the award. First, the court has power to
remit matters to the tribunal under ss.68(3)(a) and 69(7)(c) of the Arbitration Act
1996.'° Secondly, the tribunal has power under s.57(3)(a) of the Arbitration Act
1996 to correct clerical mistakes or errors or to clarify or remove any ambiguity in
the award.'° Thirdly, under s.57(3)(b) of the Arbitration Act 1996, the tribunal can
make an additional award in respect of any claim presented to the tribunal which
was not dealt with in the award.'’

Complete decision. The second sense in which an award must be final is the 6-007
requirement for it to be a complete decision on the matters dealt with. A tribunal
may not, for example, leave matters open for the decision of a third party.'*

Final and binding. The concept of a final award described above should not 6-008
be confused with the sense in which an award is ‘‘final” under s.58(1) of the
Arbitration Act 1996.'? Section 58(1) provides:

'2 See paras 6-008 and 6-162 below. Section 39 of the Arbitration Act 1996 refers to a final award,
apparently giving it this meaning.
'3 Such authority might arise under statute, e.g. under the provisions of the Arbitration Act 1996
discussed in para.6—006. Alternatively, it might arise from the terms of the arbitration agreement:
see, e.g. the power to make additional awards under the LCIA Rules, Art.27.3.
'4 See para.5—218 above.
'S See paras 8-113 and 8—153 below.
16 See paras 6—167 et seq. below.
'7 See paras 6-171 below.
'S See para.6—078 below.
In Pirtek (UK) Ltd v Deanswood Ltd [2005] EWHC 2301; [2005] 2 Lloyd’s Rep. 728 it was held that
a tribunal had no power to make an award ofinterest because an earlier award dealing with quantum
was final and binding on the parties. However it was because the earlier award was final in the sense
of having finally determined all the outstanding issues in the arbitration that the making of a further
award was precluded, rather than because it was final and binding under s.58(1) of the Arbitration
Act 1996.
 274 The Award

“Unless otherwise agreed by the parties, an award made by the tribunal

pursuant to an arbitration agreement is final and binding both on the parties and
on any persons claiming through or under them.”

“Final” in this context means that, as between the parties to the reference and
persons described in s.58(1),*° the award is conclusive as to the issues with which
it deals, unless and until there is a successful challenge to the award.*! The award
can therefore be enforced, even if there are other issues outstanding in the
reference.” In this sense all awards are final and binding under s.58(1) as to the
particular issues with which they deal,”* even if they are not the final award made
in the reference.** This provision is subject to the parties agreeing otherwise but
selection of a foreign governing law will not suffice as agreement otherwise for
these purposes.”°

(d) Awards on different issues

6-009 Power to make more than one award. An award may dispose of only
some of the issues in the arbitration, leaving others to be determined in a
subsequent award or awards. In some jurisdictions and certain sets of arbitration
rules these awards are referred to as ‘‘partial awards”.?° Section 47 of the
Arbitration Act 1996 provides that the tribunal may make more than one award at
different times on different aspects of the matters to be determined. This is a
general power to determine the issues in more than one award and the section

*° Persons claiming through or under a party would include, for example, assignees: see
para.3-018.
*'In Equatorial Traders Ltd v Louis Dreyfus Trading Ltd {2002] EWHC 2023 (QBD (Comm)) an
arbitration award was subject to appeal under the arbitration rules of a trade association but became
final and binding if a statement of case in the appeal was not served within a given time limit or any
extension granted. The deadline having been missed, the court found that the arbitration award
could not be the subject of a second appeal as it had become final and binding by operation of the
rules.
* Marine Contractors Inc v Shell Petroleum Company of Nigeria Limited [1984] 2 Lloyd’s Rep. 77;
Overseas Fortune Shipping Pte Limited v Great Eastern Shipping Co Ltd (The “Singapore Fortune’’)
[1987] 1 Lloyd’s Rep. 270.
* See however The Republic of Kazakhstan v Istil Group Inc [2006] EWHC 448 where a partial award
on jurisdiction was subsequently held by the tribunal to be a nullity when it transpired that a party
had ceased to exist at the time of the partial award. The court ruled that any challenge to the
tribunal’s approach on the basis that it constituted an irregularity should have been, but was not,
made within the time limits set out for serious irregularity challenges under s.68 of the Arbitration
Act 1996. Nevertheless it offered the provisional view that the partial award was not a nullity.
In Glaxosmithkline Ltd v Department of Health [2007] EWHC 1470 it was alleged that the parties
had entered into a purely non-binding and voluntary agreement with no intention to create legal
relations and that the arbitration agreement was not therefore binding and there was no “award” for
the purposes of an appeal under s.69 of the Arbitration Act 1996. This was rejected by the court
and Cooke J. noted at [27] that: “When regard is then had to the terms of the Arbitration Act,
attention is directed to sections 58 and 66. These show that, absent contrary agreement, an Award
is binding and may, with the leave ofthe court, be enforced. I find no agreement between the parties
that the Award should not be final and binding.”
> C v D [2007] EWHC 1541.
6 See, e.g. ICC Rules, Art.2(iii).
 Introduction aps

imposes no time limit as to when any further award is to be made.?” The power is
subject to agreement otherwise by the parties.** The section specifically avoids
using the term “interim award’’”’ on the basis that it was thought to be confusing*®
but it is still used from time to time. The section also makes clear that the tribunal
may, in particular, make an award relating—

(a) to an issue affecting the whole claim, or

(b) to a part only of the claims or cross-claims submitted to it for deci-

sion.
K 31

Scope and content of awards on different issues. An award dealing 6-010

only with certain issues or claims must clearly state that it is an award relating to
those issues or claims only and specify the issue or claim or part of a claim with
which it deals,** otherwise the award may be subject to challenge.** An award must
also comprise a determination of an issue or claim which is in dispute. It cannot
therefore be used to provide a ‘“‘payment on account” of sums claimed, without
actually deciding that those sums are due and owing.**

When awards on different issues appropriate. Section 47 was 6-011

drafted not so as to alter the existing powers of the tribunal to make several
awards,*> but rather to emphasise how those powers should be exercised in
appropriate cases.*° Whether to make more than one award is a matter over which
the tribunal has a complete discretion,*’ subject to complying with the duty under
s.33(1) of the Arbitration Act 1996.°* However, some guidance is given in paras
226-233 of the DAC report.*? In particular, it is intended that they should be used
in large, complex cases where issues may be selected for early decision which will
be commercially, even if not legally, determinative of the case. As is pointed out in

27 Sea Trade Maritime Corp v Hellenic Mutual War Risks Association (Bermuda) Ltd [2006] EWHC
578.
28 Section 47(1) of the Arbitration Act 1996.
2° This was the term used in earlier legislation: s.14 of the Arbitration Act 1950.
5° Because it suggests a temporary decision: see para.233 of the DAC report.
31 Section 47(2) of the Arbitration Act 1996.
2 Section 47(3) of the Arbitration Act 1996 confirming SL Sethia Liners Ltd v Naviagro Maritime
Corp (The ‘‘Kostas Melas”’) [1981] 1 Lloyd’s Rep. 18.
33 Under s.68(2)(f) and/or (h) of the Arbitration Act 1996: see (under the previous law) Leach (SH)
v Haringey London Borough Council, The Times, March 23, 1977.
34 See para.231 of the DAC report approving the reasoning in The “Kostas Melas’”’ [1981] Lloyd’s Rep.
18. There is power under s.39 of the Arbitration Act 1996 to make temporary financial adjustments
between the parties pending resolution of the dispute: see paras 6-020 e seq. below.
35 Under s.14 of the Arbitration Act 1950. Where the reference to arbitration is of acomposite dispute,
the tribunal may not isolate an individual point and decide it as a separate issue: Minerals and Metals
Trading Corp of India Lid v Encounter Bay Shipping Co Lid (The “Samos Glory”) (No.2) [1988] 1
Lloyd’s Rep. 51.
*° Paragraph 232 of the DAC report.
37 Exmar BV v National Iranian Tanker Co (The “Trade Fortitude’’) {1992| 1 Lloyd’s Rep. 169.
38 See para.230 of the DAC report.
© See Appendix 2.
 276 The Award

the DAC Report, this is consistent with the approach adopted in both the
Commercial Court and the Official Referees’ Court*® in England.

6-012 Examples. By way of example, the making of awards on different issues may
be appropriate:

(1) Where the determination of a particular issue or issues at an early stage

will save time or costs or both in relation to the future conduct of the
reference. This may be the case, for example, where there are objections to
the jurisdiction of the tribunal*' or where there is a dispute as to the law
applicable to the substantive issues in the case.*
(2) Where the determination of a particular issue or issues is likely to be
decisive of the whole or a significant part of the dispute. Thus it may be
expedient to deal with issues of liability before those relating to quantum
or to deal with a number of principal issues or claims which the parties
believe will from a commercial viewpoint assist them in resolving the
remaining matters in dispute between them.

(3) Where an ascertainable minimum sum is clearly due from one party to the
other, notwithstanding that there may be further sums in dispute or
further claims or cross-claims which may give rise to liability. Thus, an
award may be sought from the tribunal? where a party maintains that
there is no defence to some part of the claim, or where there is an
ongoing loss or cause of action. In the latter case, the tribunal may issue
an award for losses incurred to the date of its award and leave open the
option of a further award or awards for future losses.
(4) Where the proceedings are of a size and complexity that the only practical
course is to deal with the issues or groups of issues in stages.

6-013 Award on jurisdiction. The tribunal can issue an award on jurisdiction

under s.31(4)(a) of the Arbitration Act 1996.*° The power is frequently exercised

*° Now called the Technology and Construction Court.

"' See paras 6-013 below and 5-060 et seq.
* Although depending upon the circumstances it may be better to deal with these matters
at the same
time as the other substantive issues in the case: see para.5—067.
* Section 47(2)(b) of the Arbitration Act 1996 specifically contemplates the tribunal
making an award
on part only of the claims or cross-claims referred. See for example SL Sethia Liners
Lid v Naviagro
Maritime Corp (The “Kostas Melas’”’) [1981] 1 Lloyd’s Rep. 18. See also para.6-016
below for the
position where deduction or set-off is claimed.
“The tribunal may also have power to make provisional awards in these
circumstances under s.39 of
the Arbitration Act 1996, as to which see paras 6-020 e7 seq. below.
* This is different from the court’s power to grant summary judgment
under CPR Pt 24 where it
considers that there is no prospect of success on a claim or issue
because, unlike a court, a tribunal
would need to conduct an investigation of any disputed law or facts
to satisfy itself that there is no
defence to the claim before issuing its award.
:
he Assuming it has power to rule on its own jurisdiction under
s.30 of the Arbitration Act 1996: sce
para.5—062 above.
 Introduction 277,

where either the tribunal itself has concerns about its jurisdiction or where one of
the parties raises a challenge to the tribunal’s jurisdiction to proceed with the
reference.‘’ The tribunal cannot be compelled to give an award on jurisdiction
prior to its final award,** but it is common in these circumstances for the tribunal
to agree to do so, because if its decision is to be challenged in the courts that
process can be commenced without delay.*?

Dangers of multiple awards. In an appropriate case the issue of more 6-014

than one award may be extremely useful. A multiplicity of awards can, however, be
detrimental, and tribunals should be wary of adopting such an approach. By
dealing with the case in the piecemeal fashion that several awards necessarily
entails, there may be a danger that resolution of the dispute as a whole will be
delayed and the parties will be put to additional expense. The decision to make an
award on a particular issue or issues will also often be made at an early stage of the
proceedings. There is a danger that it may subsequently prove to be less determi-
native, legally or commercially, than originally envisaged. For example, as the case
unfolds, it may become clear that it is more complex than originally thought. The
tribunal should therefore consider whether there 1s any real advantage to any of the
parties in proceeding with the partial award at all, or whether it will simply add to
the costs of the reference and cause unnecessary delay.°° The tribunal should focus
on what it is intended to achieve by the issue of the award, whether that is the most
appropriate and efficient way of dealing with the reference and the likelihood of
the award achieving that object. In considering these matters the tribunal should
of course keep in mind its duties under s.33 of the Arbitration Act 1996.°!

Imposition of conditions. Where a tribunal is minded to exercise its 6-015

discretion to issue an award dealing with particular issues or claims only, it may
impose conditions on its doing so. For example, a tribunal may refuse to make the
award unless the claimant provides reasonable security for the respondent’s cross-
claims.°? The tribunal cannot, however, make an order for disclosure of documents
in the arbitration conditional upon the honouring of an earlier partial award by the
party seeking disclosure.**

Claim for deduction or set-off. The question arises whether a tribunal 6-016
has jurisdiction to consider a set-off said to constitute a defence to a claim before

7 See paras 5-060 et seq.

48 Eymar BV v National Iranian Tanker Co (The ‘Trade Fortitude”) {1992| 1 Lloyd’s Rep. 169.
49 See generally paras 5—060 er seg. above and in particular para.5—068.
50 See further Exmar BV v National Iranian Tanker Co (The ‘Trade Fortitude”) [1992] 1 Lloyd’s Rep.
169 as to the circumstances in which an award on particular issues or claims is appropriate.
*! See paras 5-032 et seq.
52 Japan Line Ltd v Aggeliki Charis Compania Maritima SA (The “Angelic Grace’’) [1980] 1 Lloyd’s
Rep. 288; Exmar BV v National Iranian Tanker Co (The ‘Trade Fortitude”) [1992] 1 Lloyd’s Rep.
169 and see also Glafki Shipping Co SA v Pinios Shipping Co (No.1) (The “Maira”’) [1982] 1 Lloyd’s
Rep. 257, CA.
53 Kirkawa Corp v Gatoil Overseas Ltd (The “Peter Kirk’’) [1990] 1 Lloyd’s Rep. 154.
278 The Award

the tribunal, when such set-off arises under some separate agreement.** The
tribunal will need to be satisfied that it has jurisdiction over the claimed set-off on
the true construction of the arbitration agreement.* A distinction may also need
to be drawn between transaction set-off, which relates to matters arising under the
same or a closely related contract, and independent set-off, which concerns an
unrelated contract.*° A tribunal will be more readily willing to accept jurisdiction
in a case of transaction set-off than where what is claimed is an independent set-off
but again it will depend upon the tribunal having jurisdiction on the true
construction of the arbitration agreement in question.”’
The difficulty lies in determining in each case whether there is jurisdiction to
deal with set-off claims in circumstances where no clear indication is given in the
arbitration agreement.°* In principle it is perhaps preferable for a tribunal to be
able to determine a claim for set-off, at least where the respective agreements are
part of the same transaction or series of transactions, on the basis that it can then
determine whether a defence is properly available in respect of claims which the
tribunal is required to determine.*’ This reasoning applies to a set-off as a defence
to a claim but not perhaps to the bringing of a counterclaim. The jurisdiction of
a tribunal to deal with a cross claim or set off by way of counterclaim (as opposed
to a defence to a claim) will only be available if they fall clearly within the
arbitration agreement.”

** For contractual rights of set-off see para.6-017 below.

°° Econet Satellite Services Ltd v Vee Networks Ltd [2006] EWHC 1664; [2006] 2 Lloyd’s Rep. 423. In
that case the arbitration agreement covered disputes “arising under, out of or by virtue of this
Agreement” and was subject to the UNCITRAL Arbitration Rules, Art.19.3 of which provides that
“In his statement of defence . . . the respondent may make a counter-claim arising out of the same
contract or rely on a claim arising out of the same contract for the purpose of a set-off”. Field if
held that the effect of these provisions was that the respondent could raise a set-off only if it was
founded on a claim arising out of the same contract as that on which the claimant’s claim was based.
Cf. the provisional view expressed by Gross J. in Ronly Holdings Ltd v JSC Zestafoni G Nikoladze
Ferroalloy Plant (2004) EWHC 1354; [2004] B.L.R. 323 that a tribunal does or should have a general
jurisdiction to allow a transaction set-off.
°° Aectra Refining & Manufacturing Inc v Exmar NV (The New } anguard and The Pacifica) [1994] 1
W.L.R. 1634.
*” Metal Distributors (UK) Lid v ZCCM Investment Holdings Ple [2005] EWHC 156; [2005] 2 Lloyd’s
Rep. 37 ;
** Where the arbitration agreement incorporates arbitration rules which deal expressly
with the
question of a claim for set-off, as in Econet Satellite Services Ltd v Vee Networks Ltd [2006]
EWHC
1664; [2006] 2 Lloyd’s Rep. 423, the position is relatively straightforward, but many
arbitration
agreements will be silent on the point. 3
»” This was the view expressed on a provisional basis by Gross J. in Ronly Holdings
Lid v JSC Zestafoni
G Nikoladze Ferroalloy Plant (2004) EWHC 1354; {2004] B.L.R. 323 at [33].
The objection to it is
that the tribunal would thereby be effectively assuming jurisdiction in
respect of the separate
agreement over which it has no jurisdiction. Difficulties arise however
where the tribunal deter-
mines a set-off defence arising under a separate agreement and that
agreement is or may be the
subject of separate proceedings. Even if it could be said that in fact
no determination under the
separate agreement was being made but rather simply an assessment
of the validity of the defence
being advanced, it is quite possible that the determination would give rise
to an issue estoppel: see
para.6—019 below. That said, the alternative is that the tribunal are
unable to consider what would
otherwise be a valid defence to the claim due to the limits
of their jurisdiction, which is also
undesirable as those issues would have to be determined in separate
proceedings.
60 Pea ae (UK) Lid v ZCCM Investment Holdings Ple [2005] EWHC
156; [2005] 2 Lloyd’s
ep. 37. ,
 Introduction 279

Contractual deduction or set-off. The position is more straightforward 6-017

where the claim for deduction or set-off is based on an express provision in the
parties’ contract. There is authority that where a party is entitled to, and does,
claim a contractual right of deduction or equitable set-off against sums due, a
tribunal may only in “exceptional circumstances” make an award in respect of
those sums without a full hearing of the matters alleged to give rise to the
deduction or set-off.°' For these purposes ‘‘exceptional circumstances” arise
where the party claiming deduction or set-off does not satisfy the tribunal that he
does so in good faith and on reasonable grounds, or where the sum awarded is
undoubtedly due even on the figures presented by the party claiming deduction or
set-off.° Otherwise, if a tribunal makes an award for a sum to be immediately
payable without properly considering a claimed right of set-off, the award may be
subject to challenge.®

The effect of an award on particular issues or claims. An award 6-018

dealing only with particular issues or claims is an “‘award”’ for the purposes of the
Arbitration Act 1996.°* Accordingly it is final and binding as between the parties
to the arbitration (and those claiming through or under them®”) in relation to the
issues disposed of by it, unless and until there is a successful appeal or challenge
to the award.°° The statutory provisions relating to the challenge and enforcement
of awards, which are discussed in Ch.8 below,°’ also apply.

Issue estoppel. An award dealing with particular issues creates an “issue 6-019
estoppel” between the parties in relation to the matters with which it deals.°* The
tribunal does not have power either to reopen its award at some later stage of the
reference, or to make a subsequent determination of issues previously disposed of
in an interim award. Once it makes an award, the tribunal becomes “ unctus

officio”? in relation to that part of its mandate which comprised the issues
disposed of and the tribunal thereby redefines its mandate for the future. Any

6! The Modern Trading Co Lid v Swale Building and Construction Ltd [1992] A.D.R.L.J. 174; 24 Con.
Iblis, Be
62 The Modern Trading Co Ltd v Swale Building and Construction Ltd {1992| A.D.R.L.J. 174 24 Con.
L.R. 59; SL Sethia Liners Ltd v Naviagro Maritime Corp (The “Kostas Melas’’) [1981] 1 Lloyd’s
Rep. 18. See also Industriebeteiligungs € Handelsgesellschaft v Malaysian International Shipping Corp
Berhad (The “Bunga Melawis’’) [1991] 2 Lloyd’s Rep. 271.
63 Under s.68(2)(a) and/or (d) of the Arbitration Act 1996. See paras 8-077 and 8-093 et seq.
4 Section 47 of the Arbitration Act 1996.
65 Persons claiming through or under a party would include, for example, assignees: see
para.3—018.
6 Section 58(1) of the Arbitration Act 1996. Unlike s.14 of the Arbitration Act 1950 this is not
expressly stated in the Arbitration Act 1996, but it is implicit in the treatment of awards under the
statute and the commentary at para.232 of the DAC report which makes clear that there was no
intention to change the previous powers in relation to interim awards. This was also confirmed in
Ghangbola v Smith & Sherriff Ltd [1998] 3 All E.R. 730.
°7 See paras 8-051 et seg. and 8-002 et seq. below.
8 See paras 6-176 et seq. below.
© See para.5—218 below.
 280 The Award

determination in a later award on an issue already disposed of in an earlier award

; : Ie Ye! aes
is therefore outside the tribunal’s jurisdiction and void.’

(e) Provisional award’!

6—020 Power to make a provisional award. Section 39 of the Arbitration Act

1996 introduced a new provision enabling the parties to empower the tribunal to
make provisional awards. It must be emphasised that this is an “opt in” provision
which only applies where the parties have agreed that it should’*; however, a
number of institutional rules include it.’* The power, if conferred, enables the
tribunal to order on a provisional basis any relief which it can order in a final
award.’* The parties could also, if they wished, confer more limited powers in
relation to provisional awards.’°

6-021 Types of provisional award. Some guidance is given in s.39(2) of the

Arbitration Act 1996 as to the types of provisional award envisaged. In particular
it provides that the power includes, for instance:

‘(a)a provisional order for the payment of money or the disposition of property
as between the parties or

(b) an order to make an interim payment on account of the costs of the tri-
bunal.”

The power does not, however, allow arbitrators to grant freezing injunctions or
search orders on the application of one party alone.’”° This rather begs the
question of whether such relief could be granted against a party following a
hearing at which he was present. This was raised but not resolved in Kastner v

” What is said in this paragraph does not however apply to provisional awards under s.39 of
the
Arbitration Act 1996: see para.6-020 et seq. below. It is also subject, of course, to the
exceptions
discussed at para.6—006.
7! Section 39 of the Arbitration Act 1996 contemplates the making of provisional
“orders”, but the
heading of the section refers to “provisional awards” and the cases dealing
with or referring to the
section contemplate a power to make an award rather than simply an order: see
BMBF (No.12) Lid
v Harland and Wolff Shipbuilding and Heavy Industries Ltd [2001] EWCA Ciy
862, where provisional
relief under s.39 of the Arbitration Act 1996 was given in the form of
an award and subsequently
reviewed by the court without any objection being taken. In Ronly Holdings
Lid v JSC Zestafoni G
Nikoladze Ferroalloy Plant 2004] EWHC 1354 Gross J. referred to
relief granted pursuant to s.39
of the Arbitration Act 1996 as an exception to the principle
that an award must be final as to all
issues decided.
” Section 39(1) of the Arbitration Act 1996. The parties may
do so however by adopting a law or
procedure which confers such a power: see Kastner v Jason
[2004] EWCA Civ 1599,
73 ae for example LCIA Rules, Art.25.1(c) and r.10 of
the Construction Industry Model Arbitration
ules.
;
™ For the relief and remedies which a tribunal can award
see paras 6-096 et seg. below.
* In accordance with the general principle of party autonom
y set out in s.1(b) of the Arbitration Act
1996. The wording of s.39(1) of the Arbitration Act
1996 would accommodate this,
7° See para.201 of the DAC report.
 Introduction 281

Jason.”’ It seems the tribunal would not ordinarily have power to make such an
order under s.39 because it is not relief which the tribunal would have power to
grant in a final award. However at first instance in Kastner v Jason Lightman J.
considered s.48(1) of the Arbitration Act 1996 sufficiently wide to enable the
parties to confer on arbitrators the power by the final award to make freezing
directions pending satisfaction or securing the final award.’ If this were done,
then there is no reason why a provisional award to like effect could not be made
under s.39. Alternatively the power to make these types of orders may in principle
be conferred on the tribunal by agreement of the parties pursuant to s.38(1) of the
Arbitration Act 1996. If the order is confined to dealing with property which is the
subject of the arbitration proceedings, then s.38(4) of the Arbitration Act 1996
might apply. Generally, though, as the DAC report notes,” these draconian
powers are best left to be applied by the court.

When provisional award appropriate. The power to make a provi- 6-022

sional award may be very useful, for example in trades and industries where cash
flow is of particular importance.”? Such clauses have proved popular in the
construction industry, and indeed several of the standard form contracts and
arbitration rules used in that industry have such provisions.*” Similarly, in the
shipping field it may be useful to give the tribunal power to grant interim
payments of freight or to order the sale of cargo prior to the final determination
of the dispute.

Provisional decision subject to final award. It is clear from s.39(3) 6-023

of the Arbitration Act 1996 that any provisional award is subject to the final
decision of the tribunal in the case. It must therefore be taken into account and
finally determined in a subsequent award or awards ofthe tribunal dealing with the
merits of the dispute and/or costs.*' Section 39 also specifically makes clear that
it does not affect the power under s.47 of the Arbitration Act 1996 to make more
than one award.

(f) Agreed award

Power to make an agreed award. Many cases settle before reaching the 6—024
stage of a final award. Where the parties settle their dispute in the course of the
arbitration, s.51 of the Arbitration Act 1996 enables the tribunal to issue an award

77 12004] EWHC 592 and, on appeal, at [2004] EWCA Civ 1599.

78 12004] EWHC 592 at [27].
78 At para.201 of the DAC report.
79 See para.203 of the DAC report.
80 See for example r.10 of the Construction Industry Model Arbitration Rules.
81 See the comments of Gross J. referred to above in Ronly Holdings Ltd v JSC Zestafon G Nikoladze
Ferroalloy Plant [2004] EWHC 1354 that relief granted pursuant to s.39 of the Arbitration Act 1996
is an exception to the principle that an award must be final as to all issues decided.
 282 The Award

recording the terms agreed.*? Section 51 is an “opt out” provision so it applies

unless the parties have agreed that it should not.** The section apparently does not
apply where the parties settle part only of their dispute.** The tribunal may
nevertheless at common law make an award dealing both with the issues requiring
determination and recording the terms agreed in relation to issues settled by
agreement between the parties.*’ Various arbitration rules also expressly provide
for any settlement to be recorded in an award. The ICC Rules, for example,
specifically provide that the tribunal may issue a consent award.*°

6-025 Obligation of the tribunal. Where s.51 does apply and the case settles, the
tribunal is required to terminate the reference.*’ If requested by the parties, and
provided the tribunal does not object to doing so, it must issue an agreed award
recording the terms of the settlement.** If the tribunal does object, the parties
cannot compel the issue of an agreed award. This proviso is important as a control
mechanism to ensure the agreed award procedure is not misused by parties
seeking an award in terms which would or might mislead third parties or is
designed for example to permit the laundering of funds.*? If the tribunal suspects
an ulterior motive of this sort, it may refuse to issue an agreed award.

6-026 Status and form of an agreed award. An agreed award has the same
status and effect as any other award on the merits.”” Accordingly, an agreed award
is enforceable even though the tribunal has not actually made a decision but simply
recorded agreed terms. This is reinforced by the fact that an agreed award must
state that it is an award of the tribunal, but need not state that it is an agreed
award.”' Some institutional rules do, however, require that the award state that it

*° This reflects Art.30 of the Model Law.

®3 Section 51(1) of the Arbitration Act 1996,
**’The wording of s.51 of the Arbitration Act 1996 seems to contemplate any settlement of “the
dispute” as a whole. The tribunal would not, for example, “terminate the substantive proceedings”
under s.51(2) since this appears to mean the proceedings as a whole. The parties might by
agreement seek from the tribunal a consent award dealing with the settlement of part of the dispute
but this would not be pursuant to s.51(2) to (5) of the Arbitration Act 1996.
85
The common law is preserved so far as it is consistent with the Arbitration Act 1996: see s.81(1)
of the Arbitration Act 1996.
*° ICC Rules, Art.26. See also LCIA Rules, Art.26.8.
Section 52(2) of the Arbitration Act 1996. The section refers to terminating “the substantive
proceedings”, but it is in practice terminating the reference subject possibly to the need to deal with
costs: see para.6—026 below.
88
Section 51(2) says that in these circumstances the tribunal ‘‘shall” record the settlement in an
agreed award.
89
See the discussion at paras 241-242 of the DAC report.
°° Section 51(3) of the Arbitration Act 1996.
*! This proposition derives from s.51(3) of the Arbitration Act 1996 which requires only that an
agreed award shall state that it is an award of the tribunal. Paragraph 244 of the DAC report makes
clear that it was deliberately decided not to make any statement that the award is an agreed award
a mandatory requirement, although the tribunal are at liberty to record that it is if they consider it
appropriate to do so, unless the parties agree otherwise. Paragraph 378 of the DAC report suggested
that on an application for enforcement the court should be informed that the award is an agreed
award if that is not apparent from the award itself. That suggestion was not adopted in s.66 of the
Arbitration Act 1996,
 Introduction 283

is made by consent.’* The provisions in the Arbitration Act 1996 relating to

awards”* apply equally to an agreed award”* and in particular it must comply with
the requirements as to form set out in s.52 of the Arbitration Act 1996.°° The
requirement in s.52(4) for an award to contain reasons does not however apply to
an agreed award. As regards costs, the terms agreed between the parties may deal
with these but, if they do not, ss.59 to 65 of the Arbitration Act 1996 concerning
costs of the arbitration apply.”°

Why seek an agreed award? The advantage of a settlement being incorpo- 6-027
rated in an agreed award is that enforcement of an award is likely to be more
straightforward than bringing proceedings to enforce the terms of the settlement
itself. If the award is to be enforced abroad, it may be recognised and enforced as
a New York Convention award.”’ An agreed award is not strictly necessary,
however, unless enforcement of the award is required. The parties would usually
want some form of writing recording what has been agreed but this may take the
form of an exchange of correspondence or a written settlement agreement rather
than an award. The parties will often have informed the tribunal that they are
seeking to negotiate a settlement. Whether or not this has been done, once terms
are agreed the parties can simply inform the tribunal that a settlement has been
reached disposing of the issues referred to arbitration. Subject to payment of any
outstanding fees and expenses of the tribunal, the arbitration is brought to an end.
In most cases, however, it will be in the parties’ interests to have an agreed award
under s.51 of the Arbitration Act 1996 for reasons of clarity about what has been
agreed and, above all, to facilitate enforcement if that proves necessary.”®

(g) Reasoned award

Meaning of “reasoned award”’. A reasoned award is one in which the 6—028

tribunal sets out the reasons for its decision and these reasons form part of the
award itself. A reasoned award is also sometimes referred to as a “speaking award”
or a “‘motivated award”’.

Reasons must be given. Under s.52(4) of the Arbitration Act 1996 an 6—029
award must contain the reasons for the determinations made by the tribunal unless

°2 See, e.g. LCIA Rules, Art.26.8.

°3 Sections 52 to 58 of the Arbitration Act 1996.
°+ Section 51(4) of the Arbitration Act 1996.
°5 See paras 6-044 et seq. below.
° Section 51(5) of the Arbitration Act 1996. These provisions are dealt with at paras 6-129 et seq.
below.
°7 See paras 8-021 et seq. below.
% See, e.g. Chimimport Plc v G D’Alesio SAS (The “Paola D’Alesio”) [1994] 2 Lloyd’s Rep. 366 where
it was decided that a subsequent challenge to a settlement agreement could not be determined by
the arbitrator.
 284 The Award

either it is an agreed award or the parties have agreed to dispense with reasons.”
Parties to an arbitration, and particularly the losing party, are entitled to know the
reasons for the tribunal’s decision by which they are bound, unless they have
specifically agreed in writing!”’ to dispense with reasons.'°' Further, reasons are
effectively a prerequisite for any appeal against the tribunal’s decision, because in
practice it will only be possible to argue that there has been an error of law if the
tribunal has explained the basis of its findings by giving reasons.'”” It is sufficient
for the purposes ofareasoned award under s.52(4) of the Arbitration Act 1996 that
the tribunal complies with the parties’ requirements for reasons even if they fall
short of what would usually be required under English law.'°*
The only reasons that have to be given are those “‘for” the award, 1.e. those in
favour, and not those of a dissenting arbitrator.'°* It is, however, common practice
for the reasons of any dissenters to be given also, and though these are sometimes
included within the award document, they do not form part of the award
itself.'°°

6-030 Specifying the matters in dispute. It is not strictly necessary that the
award should specify the matters in dispute,'’° although the requirement to give
reasons for the decision'®’ will usually encompass an indication, expressly or
implicitly, of the disputed issues.'°* In Checkpoint Ltd v Strathclyde Pension Fund'®”
a distinction was drawn between a point of dispute, which did not have to be
specifically dealt with, and an issue for the purposes of s.68(2) of the Arbitration
Act 1996, which did. It is however desirable for the award to indicate the matters
in dispute so that the parties can see that the tribunal has addressed them, and the
award can be relied upon in resisting any subsequent challenge on the grounds

The court has power to require the tribunal to state the reasons for its award if it has failed to do
so under s.70(4) of the Arbitration Act 1996: see para.6—031. In an extreme case of failure to do so
the award may be susceptible to challenge, see para.8—095 below. A failure to give reasons for the
decision on costs is an irregularity as to form within the terms of s.68(2)(h) of the Arbitration Act
1996 and can lead to an application that the court should exercise its powers to order reasons to be
given under s.70(4): See Norbrook Laboratories Ltd v Tank [2006] EWHC 1055 at [127].
100'The requirement for any agreement between the parties to be “in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
101 See para.247 of the DAC report.
1 The court may take into account post-award communications from the tribunal which set out the
reasons for the award: Nemfield Construction Ltd v Tomlinson [2004] EWHC 3051; 97 Con. L.R. 148
at [21].
8 The Bay Hotel and Resort Lid v Cavalier Construction Co Ltd [2001] UKPC 34. In that case the Privy
Council decided that an award which would not have constituted a reasoned award under English
law nevertheless fulfilled the requirement of ‘a written explanation of the award” under the
Construction Industry Arbitration Rules of the American Arbitration Association which the parties
had incorporated into their arbitration agreement.
'* Cargill International SA v Sociedad Iberica de Molturacion SA [1998] 1 Lloyd’s Rep. 489.
' Stinnes Interoil GmbH v Halcoussis & Co [1982] 2 Lloyd’s Rep. 445. See further para.6—058
below.
19 Smith v Hartley (1851) 20 L.J.C.P. 169.
'’ Unless it is an agreed award or the parties have agreed to dispense with reasons: See para.6-029
above.
'08 For the form of a reasoned award see para.6—032 below.
109 [2003] EWCA Civ 84.
 Introduction 285

either that the tribunal has failed to deal with all the issues that were put to it!!°
or, alternatively, that it has exceeded its substantive jurisdiction by determining
matters that were not referred to it.!"!

Reasons ordered by the court. Under s.70(4) of the Arbitration Act 6—031
1996'” the court may order the tribunal to state the reasons for its award in
sufficient detail to enable the court properly to consider a challenge to or appeal
against the award.'!* The jurisdiction will be sparingly exercised!!* and the court
when making such an order can also deal with how the additional costs incurred
as a result of its order are to be met.''’ A distinction must be drawn between a
failure to give reasons and a failure to deal with an issue in the award.'!° In the
latter case the position cannot simply be remedied by requiring the tribunal to
state its reasons. Equally, if the complaint is a deficiency of reasons the initial
application should be made under s.70(4) and not on the basis of serious irregu-
larity under s.68.''”

Form of a reasoned award.''* No particular form is required for a 6—032

reasoned award although ‘“‘the giving of clearly expressed reasons responsive to the
issues as they were debated before the arbitrators will reduce the scope for the
making of unmeritorious challenges”.''? When giving a reasoned award the
tribunal need only set out what, on its view of the evidence, did or did not happen,
and explain succinctly why, in the light of what happened, the tribunal has reached
its decision, and state what that decision is.'*° In order to avoid being vulnerable
to challenge the tribunal’s reasons must deal with all the issues that were put to

'!9 Section 68(2)(d) of the Arbitration Act 1996: See para.8—093 below.
'! Section 67 of the Arbitration Act 1996: See paras 8-054 er seg. below.
2 Replacing s.1(5) of the Arbitration Act 1979. There are two key changes from the previous
provision. First, the court may initiate the order whereas previously the statute required an
application by a party to the reference. Second, and following from the first, the order only arises
where a challenge to or appeal against the award has actually been made, whereas previously an
order for reasons could be sought in anticipation of such an application.
"3 See paras 8-070, 8-093 and 8-130.
"4 ner Kerr LJ. in Universal Petroleum Co Ltd v Handels und Transport GmbH [1987] 1 Lloyd’s Rep.
517, CA at 528. This was a decision under the 1979 Act but it seems likely that a similar approach
will be taken under the Arbitration Act 1996.
"5 Section 70(5) of the Arbitration Act 1996.
6 Hussman (Europe) Lid v Al Ameen Development & Trade Co [2000] 2 Lloyd’s Rep. 83; Fidelity
Management SA v Myriad International Holdings BV [2005] EWHC 1193.
"7 Margulead Ltd v Exide Technologies [2004] EWHC 1019; World Trade Corp Ltd 0 C Czarnikow Sugar
Lid [2004] EWHC 2332; Norbrook Laboratories Ltd v Tank [2006] EWHC 1055.
"8 See also paras 8-093 et seg. below concerning challenges based on a failure to deal with all the issues
and the relationship between that and a failure to give sufficient reasons.
"19 ber Tomlinson J. in ABB AG v Hochtief Airport GmbH [2006] EWHC 388. He added that: “Reasons
which were a little less compressed at the essential points might have been more transparent as to
their meaning and might even have dissuaded the unsuccessful party from challenging the award or,
at any rate, from mounting so wide-ranging a challenge.”
120 per Donaldson L.J. in Bremer Handelsgesellschaft GmbH v Westzucker GmbH (No.2) [1981] 2 Lloyd’s
Rep. 130 at 132-3. The parties may agree that something less is required: The Bay Hotel and Resort
Ltd v Cavalier Construction Co Ltd [2001] UKPC 34 and see para.6—029 above.
 286 The Award

it.'2! It should set out its findings of fact'?* and its reasoning so as to enable the
parties to understand them and state why particular points were decisive. It should
also indicate the tribunal’s findings and reasoning on issues argued before it but
not considered decisive, so as to enable the parties and the court to consider the
position with respect to appeal on all the issues before the tribunal.'*? When
dealing with controversial matters, it is helpful for the tribunal to set out not only
its view of what occurred, but also to make it clear that it has considered any
alternative version and has rejected it. Even if several reasons lead to the same
result, the tribunal should still set them out.'** That said, so long as the relevant
issues are addressed there is no duty to deal with every possible argument'”> or to
explain why the tribunal attached more weight to some evidence than to other
evidence.'*° The tribunal is not expected to recite at great length communications
exchanged or submissions made by the parties.'*” Nor is it required to set out each
step by which it reached its conclusion or to deal with each and every point made
by the parties.'?° It is sufficient that the tribunal should explain what its findings
are and the evidential route by which it reached its conclusions.'”?
Where objection has been taken to the tribunal’s substantive jurisdiction this
issue should be addressed in the award. However if the tribunal fails to do so but
goes on to determine the merits of the case, thereby determining the objection to
jurisdiction, that may be taken as an implied award on substantive jurisdiction
notwithstanding that it is not expressly dealt with.'*°

6-033 Reasons not forming part of the award. In the past tribunals have
sometimes adopted a practice of providing the parties with reasons whilst stating
expressly that they do not form part of the award itself and imposing restrictions

'21 Section 68(2)(d). See para.8—093 below.

' A failure to make relevant, clear or sufficient findings of fact may render an award susceptible to
appeal under s.69 of the Arbitration Act 1996: see Skanska Construction (Regions) Ltd v Anglo-
Amsterdam Corp Ltd [2002] 84 Con. L.R. 100. However the court will look at substance rather than
form, particularly when interpreting the findings of a tribunal not comprised of lawyers: Bottiglier1
di Navidgazione SpA v Cosco Qingdao Ocean Shipping Co (The “Bunga Saga Lima’’) [2005] EWHC
244; [2005] 2 Lloyd’s Rep. 1 at [22]. See also Action Navigation Inc v Bottiglieri Navigation SpA
[2005] EWHC 177; [2005] 1 Lloyd’s Rep. 432.
'25 See the comments of Mance J. in Transcatalana de Commercio SA v Incobrasa Industrial Commercial
Brazilewra SA [1995] 1 Lloyd’s Rep. 215 at 217.
'* Universal Petroleum Co Ltd v Handels und Transport GmbH [1987] 1 Lloyd’s Rep. 517, CA.
'*° Ascot Commodities NV v Olam International Ltd [2002] 2 Lloyd’s Rep. 277. See also Checkpoint Ltd
v Strathclyde Pension Fund |2003| EWCA 84 where a distinction was drawn between a point of
dispute, which did not have to be specifically dealt with, and an issue for the purposes of s.68(2) of
the Arbitration Act 1996, which did.
°° World Trade Corp Lid » C Czarnikow Sugar Ltd {2004] EWHC 2332; Protech Projects Construction
(Pty) Ltd v Al-Kharafi & Sons (2005] EWHC 2165.
"7 Transcatalana de Commercio SA v Incobrasa Industrial e Commercial Brazileira SA [1995] 1 Lloyd’s
Rep. 215.
'* Petroships PTE Lid v Petec Trading and Investment Corp. (The “Petro Ranger’) [2001] 2 Lloyd’s Rep.
348; Hawk Shipping Ltd v Cron Navigation Lid [2003] EWHC 1828.
129
per Donaldson LJ. in Bremer Handelsgesellschafit GmbH v Westzucker GmbH (No.2) [1981] 2 Lloyd’s
Rep. 130 at 132-133. See also Torch Offshore LLC v Cable Shipping Inc [2004] 2 Lloyd’s Rep. 446;
World Trade Corp Lid v C Czarnikow Sugar Lid [2005] 1 Lloyd’s Rep. 422 and para.6—083
below.
'° Vee Networks Lid v Econet Wireless International Ltd [2004] EWHC 2909; [2005] 1 Lloyd’s Rep. 192;
LG Caltex Gas Co Ltd v China National Petroleum Corp [2001] EWCA Civ 788.
 Introduction 287

on their use, e.g. that they may not be used in connection with the award or
without the tribunal’s consent.'*! This was particularly common, for example, in
arbitrations conducted under the LMAA Terms. Reasons must now be given
under s.52(4) of the Arbitration Act 1996 unless the parties agree otherwise in
writing.'** It seems they rarely do so!*’ and the practice of giving reasons not
forming part of the award seems unlikely to continue to any great extent.!**

Use of reasons not forming part of the award. There were a 6-034
number of authorities under the old law on the question whether reasons not
forming part of the award could be used in connection with an appeal against an
award.'*° Under the 1996 Act, if the parties agree that the reasons should not form
part of the award then it seems likely that will constitute an agreement to dispense
with reasons for the purposes of s.52(4) of the Arbitration Act 1996. In such
circumstances there can be no appeal against the award.'*° However the court will
look at reasons not forming part of the award where a party is resisting enforce-
ment or seeking to challenge the award even if the parties have agreed that they
are not to be referred to in proceedings relating to the award.'*7 Where the
tribunal gives reasons stated not to form part of the award, but the parties have not
agreed that the reasons should be restricted in this way, it seems likely that the
court would look at those reasons despite their being expressed not to form part
of the award.'*®

‘5! This practice stemmed from the possibility, prior to the Arbitration Act 1979, of setting aside an
award on the grounds that it disclosed an error of fact or law on its face. By providing reasons in
a way which meant they did not become a part of the award itself and therefore not apparent on its
face, the tribunal could satisfy the parties’ wish to know why the particular result has obtained and
yet prevented any error contained in its reasons being relied upon for the purpose of setting aside
the award. Setting aside an award on these grounds was abolished by the Arbitration Act 1979.
'? The requirement for any agreement between the parties to be “in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning. This will help
avoid disputes about whether the reasons are or are not intended to form part of the award, see The
General Valdes [1982] 1 Lloyd’s Rep. 17; BP Chemicals Lid v Kingdom Engineering (Fife) Ltd [1994]
2 Lloyd’s Rep. 373.
83 Tame Shipping Ltd v Easy Navigation Ltd (The Easy Rider) (2004) EWHC 1862 proceeded on the
assumption that there had been an agreement between parties that the reasons would not be
referred to in any proceedings relating to the award by virtue of their adopting the LMAA Small
Claims Procedure, though in fact it had been amended in 2002.
'S4'The principal advantage of having reasons not forming part of the award was that it hindered any
appeal against the award, see Mutual Shipping Corp v Bayshore Shipping Co Ltd (The “Montan’’)
[1985] 1 Lloyd’s Rep. 189; [1985] 1 W.L.R. 625. A more effective means of excluding an appeal was
to enter into an exclusion agreement under s.3 of the Arbitration Act 1979. However the right to
enter into an exclusion agreement was limited in the three “special categories” of cases under s.4(1)
of the 1979 Act and as a result the practice of providing reasons not forming part of the award
served a purpose in such cases. As the “special categories” have not survived into the Arbitration
Act 1996, there is no longer good reason for this practice to be followed.
'35 See in particular Mutual Shipping Corp v Bayshore Shipping Co Lid (The “Montan”) [1985] 1
Lloyd’s Rep. 189.
156 Section 69(1) of the Arbitration Act 1996.
'37 Tame Shipping Lid v Easy Navigation Ltd (The Easy Rider) [2004] EWHC 1862.
138 Alternatively the court could order the tribunal to state its reasons under s.70(4) of the Arbitration
Act 1996 but there are a number of reasons why it might not wish to do so. First, it is a cumbersome
step given that the tribunal’s reasons are already to hand. Second, as the parties have not agreed that
use of the reasons should be restricted, it is not obvious why the court should treat them as such
simply because the tribunal has sought to impose this. Third, there is of course a risk of
 288 The Award

(h) Majority award

6-035 When majority award appropriate. Unless the parties have agreed
otherwise in writing,'*’ if the reference is to three or more arbitrators, their
decisions, orders and awards can be made by a majority of them. This applies
whether or not a chairman has been appointed.'*® Majority awards and the
position when there is no majority are dealt with at para.6—057 below.

(1) Additional award

6-036 Power to make an additional award. A tribunal has power under

s.57(3)(b) of the Arbitration Act 1996 to make an additional award in respect of any
matter, including interest or costs, which was presented to it in the course of the
reference but which the tribunal did not deal with in its award. Additional awards
are dealt with at paras 6-171 et seq. below.

(7) Convention awards

6-037 New York Convention award. Part III of the Arbitration Act 1996
(replacing the Arbitration Act 1975) gives effect to the New York Convention on
the Recognition and Enforcement of Foreign Arbitral Awards'*! by incorporating
into English law provision for the enforcement of awards covered by the New York
Convention. Section 100(1) of the Arbitration Act 1996 defines a ‘‘New York
Convention award” as:

“an award made, in pursuance of an arbitration agreement, in the territory of a

state (other than the United Kingdom) which is a party to the New York
Convention.”

6-038 The ICSID Convention. The Convention on the Settlement of Investment

Disputes between States and Nationals of other States (the ‘“ICSID Conven-
tion”’)'* was implemented in English law by the Arbitration (International Invest-

inconsistencies between the restricted reasons originally given and those provided pursuant to
s.70(4).
The requirement for any agreement between the parties to be “in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
49 Sections 20(3) and 22(2) of the Arbitration Act 1996.
'"’ The Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted by the
United Nations Conference on International Commercial Arbitration on June 10, 1958. See further
paras 8-021 ef seq. below for enforcement of New York Convention awards.
"The ICSID Convention was opened for signature in Washington on March 18, 1965 and is
sometimes referred to as “the Washington Convention”.
 Introduction 289

ment Disputes) Act 1966.'° That Act continues in force with only minor con-
sequential amendments as a result of the Arbitration Act 1996.!4+

Meaning of “Convention award”. Section 7(1) of the Arbitration Act 6-039

1975 referred to a New York Convention award as a “Convention award”.
Although the Arbitration Act 1996 is more specific, a reference to a “Convention
award” is generally taken to mean a New York Convention award rather than to an
award made under another international convention on arbitration, such as the
Geneva Conyention'* or the ICSID Convention. For obvious reasons it is prefer-
able to avoid referring simply to a “Convention award”’.

Enforcement of awards. Whether an award is a New York Convention 6-040

award under s.100(1) of the Arbitration Act 1996 or an award pursuant to some
other convention on arbitration will determine the scope ofthe court’s jurisdiction
in relation to it, particularly in relation to enforcement.'*°

(k) Foreign awards

Meaning of “foreign award’’. Part II of the Arbitration Act 1950 6-041

concerns the enforcement of certain foreign awards. That part of the 1950 Act
continues to apply, notwithstanding that the remainder of it has been repealed by
the Arbitration Act 1996.'*’ Section 35(1) refers to a “foreign award” as one

(1) pursuant to an arbitration agreement to which the 1923 Protocol on

Arbitration Clauses'** applies and
(2) between parties subject to the jurisdiction of Contracting States to the
Geneva Convention'*? and
(3) made in the territory of a Contracting State to the Geneva Convention.

Whether or not an award is a foreign award will determine the scope of the court’s 6-042
jurisdiction in relation to enforcement of it under Pt II of the Arbitration Act
950.272

'43 See para.1-041 in relation to investment arbitrations, many of which are conducted under the
auspices of ICSID, which was set up pursuant to the ICSID Convention.
'4 See further paras 8-048 er seg. for enforcement of ICSID Conyention awards.
145 See para.8—047 below for enforcement of Geneva Convention awards.
'46 See paras 8-020 et seq. below.
'47 Section 99 of the Arbitration Act 1996.
148 Protocol on Arbitration Clauses signed on behalf of His Majesty at a Meeting of the Assembly of
the League of Nations held on the September 24, 1923.
149 Convention on the Execution of Foreign Arbitral Awards signed at Geneva on behalf of His Majesty
on September 26, 1927.
'5° See para.8—047 below.
 290 The Award

6-043 In this book, the term foreign award is also used more generally to designate an
award made outside England.

2. FORMAL REQUIREMENTS OF AWARD

(a) Form ofthe award

6-044 Statutory requirements. Section 52 of the Arbitration Act 1996 pro-

vides:

“52. (1) The parties are free to agree on the form of an award.
(2) If or to the extent that there is no such agreement, the following
provisions apply.
(3) The award shall be in writing signed by all the arbitrators or all those
assenting to the award.
(4) The award shall contain the reasons for the award unless it is an agreed
award or the parties have agreed to dispense with reasons.
(5) The award shall state the seat of the arbitration and the date when the
award is made.”

The starting point therefore is that the award must comply with any requirements
as to form agreed between the parties and in the absence of agreement the
statutory provisions in ss.52(3) to (5) apply. This section is very similar to Art.31
of the Model Law.'*!

6-045 Failure to comply with agreed or statutory requirements.

Failure to comply with any requirements as to form agreed between the parties or
derived from the Arbitration Act 1996 will render the award susceptible to
challenge.'°? What if the requirements are of an immaterial character? Under the
Arbitration Act 1996 failure to comply with the requirements as to form is of itself
a “serious irregularity”,'*’ but a party wishing to challenge the award under that
section must also show that the irregularity has or will result in ‘substantial
injustice” to him. This seems extremely unlikely if the requirement is immate-
rial.'** In any event, if there were a successful application the court would usually
seek to remit the award to the tribunal so that it can remedy the defect.

'S! See Appendix 4.

'2 Under s.68(2)(h) of the Arbitration Act 1996,
3 Section 68(2)(h) of the Arbitration Act 1996. See further para.8—098 below.
'4'This is addressed in para.234 of the DAC report in the context of the requirement under s.52(5) of
the Arbitration Act 1996 that the award state the seat of the arbitration. The Report points out that
the seat is only of importance in international arbitrations and in the domestic context this
requirement is likely to be immaterial: see also Tongyuan (USA) International Trading Group v Uni-
Clan Ltd {2001| W.L. 98036 where the arbitration agreement provided for arbitration in Shenzhen
or Shanghai but in fact the hearing was held in Beijing.
 Formal Requirements of Award 291

Effect on time limits. It may be that a failure to comply with agreed or 6-046
statutory requirements can be remedied. For example, even if the tribunal fails to
sign or date the award when it is notified to the parties, they may do so at a later
date. The award will then take effect from the date upon which the requirements
have been met so that any time limits for challenge or appeal against the award will
run from that date.'>°

Award to be in writing. Section 52(3) of the Arbitration Act 1996 requires 6—047
the award to be made in writing.'*® Having the tribunal’s decision in written form
facilitates both the enforcement of the award and any challenge to it. Various sets
of arbitration rules similarly provide for awards made under them to be in
writing.
'°”

Parol awards. The parties may agree that a parol award, i.e. one made orally, 6-048
may be given,'°* although it will be a very rare case indeed where the parties will
be content with such an award. To constitute a valid parol award the tribunal must
make an express determination: ‘In the absence of a declaration, what evidence
would there be of a sole arbitrator having made up his mind? The test of the
making of an award is, can the arbitrator change his mind? So long as it remains
in his power to do so, he has not made an award.”’'””

Award to be signed. Section 52(3) of the Arbitration Act 1996 also requires 6-049
the award to be signed by all the arbitrators or all those who assent to it. A
dissenting arbitrator need not sign.'®® The signature may be attested by a witness,
though there is no legal requirement for this and it is merely done to provide
evidence of the signature.

Place of signing. There is old authority that where an award is made by more 6-050
than one arbitrator then, for it to be valid, all the arbitrators should sign it in each

'55 Weldon Plant Ltd v The Commission for the New Towns [2000] B.L.R. 496. Lloyd J. left open the
possibility in that case of circumstances in which an inference could be drawn that the award was
in fact signed and dated. The court might look to draw such an inference where, e.g. the evidence
shows that the failure to sign is an oversight but the contractually agreed time limit for making the
award has expired. Where the requirement is capable of being remedied, as it was in Weldon, it 1s
preferable for this to be done.
'S6 As to parol awards see para.6—048 below.
'57 For example LCIA Rules, Art.26.1. The Model Law, Art.31 also requires the award to be in writing
and signed by the tribunal.
'58 Prior to the Arbitration Act 1996 a parol award was valid unless the reference to arbitration required
the award to be made in writing, see Cocks v Macclesfield (1562) 2 Dyer 218 b Benloe 97; Ramwling
v Wood (1735) Barnes 54. The Arbitration Act 1996 has reversed this so that a parol award will now
only be valid if the parties have agreed that the award may be made orally and in the absence of
agreement a parol award will not suffice.
'59 Thompson v Miller (1867) 15 W.R. 353.
160 Unless required to do so by the relevant arbitration rules: see, e.g. Arbitration Rules No.125 of
GAFTA, r.7.1 and Cargill International SA v Sociedad Iberica de Molturacion SA [1998] 1 Lloyd’s
Rep. 489.
 292 The Award

other’s presence.'°' That is inappropriate in the context of modern communica-

tions and the courts have indicated that it is unlikely to be followed.'©* Certainly
there is no such requirement laid down in the Arbitration Act 1996 and as the
court should not intervene in matters governed by the Act save as provided for in
the Act!" there would seem to be no basis for a challenge on these grounds. In
practice the award is often signed separately by the arbitrators, particularly where
they are located in different parts of the world and the inconvenience and expense
of bringing them together for the signing of the award would be considerable.
Section 53 of the Arbitration Act 1996 confirms that unless the parties have agreed
otherwise in writing, ‘63 any award is treated as having been made at the seat of
arbitration, even if it has been signed elsewhere. 164

6-051 Reasons. Under s.52(4) of the Arbitration Act 1996 the tribunal is required to
give a reasoned award unless either it is an agreed award'® or the parties have
agreed that the tribunal’s reasons for its decision need not be given. This reversed
the position under the previous law when there was only an obligation to give
reasons where this had been stipulated by the parties. For a fuller discussion of
reasoned awards see paras 6-028 ez seg. above.

6-052 Seat to be specified. Section 52(5) of the Arbitration Act 1996 requires the
award to state the seat of the arbitration'®® and s.53 confirms that where the seat
of the arbitration is in England, Wales or Northern Ireland, an award is treated as
having been made there unless otherwise agreed in writing'®” by the parties.
Requiring the seat to be stated in the award will assist in determining which
provisions of the Arbitration Act 1996 apply'®* and in particular what powers exist

‘6! Wade v Dowling (1854) 4 E. & B. 44.

‘©? European Grain & Shipping Ltd v Johnston [1982] 3 All E.R. 989 Bank Mellat » GAA Development
Construction Co [1988] 2 Lloyd’s Rep. 44. Article 22 of theLMAA Terms specifically provides that
the members of the tribunal need not meet together for the purpose of signing their award.
' Section I(c) of the Arbitration Act 1996. The requirement for signature is governed by s.52(3) of
the Act, albeit that no reference is made in the subsection to whether or not the arbitrators must
sign in each other’s presence.
'®’ The requirement for any agreement between the parties to be “in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
' This addresses a particular problem that arose under the previous statutory regime in relation to the
court’s supervisory jurisdiction over an award made in a country other than the place of arbitration:
Hiscox v Outhwaite [1992] 1 A.C. 562; [1991] 3 AIL E.R. 641; [1991] 3 W.L.R. 297: [1991] 2 Lloyd’s
Rep. 435.
'© See paras 6-024 et seg. above.
'° Article 31 of the Model Law refers to the “place of arbitration” but the meaning is the same and
the reference to the seat is consistent with the terminology used in ss.2 and 3 of the Arbitration
Act
1996: see further para.250 of the DAC report.
167
‘The requirement for any agreement between the parties to be “in writing” stems from s.5(1)
of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
'* The scope of application of the Arbitration Act 1996 and the way in which the seat is
to be
determined are dealt with in ss.2 and 3 of the Act. See paras 2-100 et seq.
 Formal Requirements of Award 293

to support the arbitral process and whether the English court has jurisdiction to
review any award.'*” This may be of considerable importance given that the scope
of review available will differ from country to country.'”” The seat of the arbitra-
tion is also important in the context of the recognition and enforcement of any
award and it may be necessary to determine whether it is a “New York Convention
award” to which Pt III of the Arbitration Act 1996 applies.'7! The grounds for
challenging or resisting enforcement of a New York Convention award are limited
and the seat of the arbitration is specifically relevant to certain of those
grounds.'”?

Dating of the award. Section 52(5) of the Arbitration Act 1996 provides 6-053
that the award must state the date on which it is made. This will be of assistance
in calculating interest due on the award and in determining whether a contractual
time limit for the making of the award has been complied with. The time limit for
any challenge or appeal also runs from the date of the award.'”* Under s.54 of the
Arbitration Act 1996 the tribunal may decide when an award is to be taken as
made, subject to agreement in writing'’* otherwise by the parties. If the tribunal
does not fix the date of the award, it may be taken as being the date on which it
is signed by the sole arbitrator or by the final member of the tribunal to sign.'”
Alternatively of course the award may be challenged'’”® and remitted to the
tribunal for clarification of the date on which it was made.!7’

109 Weissfisch v Fulius [2006] EWCA 218; A v B [2006] EWHC 2006; C v D [2007] EWHC 1541; Dubai
Islamic Bank PFSC v Paymentech Merchant Services Inc [2001] 1 Lloyd’s Rep. 65. See para.5—072
on the importance of the seat.
7 For the powers of the English court see paras 8-054, 8-072 and 8-119 et seg. below. They are, for
example, more extensive than those of the French courts.
1 Ag defined in s.100(1) of the Arbitration Act 1996 (replacing s.7(1) of the Arbitration Act 1975), or
indeed whether it is an ICSID Convention award under the Arbitration (International Investment
Disputes) Act 1966 or a “foreign award” under Pt II of the Arbitration Act 1950: see further paras
6-037 et seq. above and 8-020 et seg. below.
172 Arbitration Act 1996, s.103(2)(b)—validity under the law of the place where it was made, s.103(2)
(e)—composition of tribunal or arbitral procedure not in accordance with law of country where it
took place, and s.103(2)(f}—setting aside or suspension by a competent authority of the country in
which made: see generally paras 8-028 ev seg. and in particular paras 8031, 8-038 and 8-040 below.
By s.53 of the Arbitration Act 1996, where the seat of the arbitration is in England, Wales or
Northern Ireland, an award is treated as made there unless otherwise agreed by the parties.
3 Section 70(3) of the Arbitration Act 1996.
'74 The requirement for any agreement between the parties to be “in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
'75 Section 54(2) of the Arbitration Act 1996. This reflects the court’s approach in Hiscox v Outhwaite
[1992] 1 A.C. 562; [1991] 3 AIL E.R. 641; [1991] 3 W.L.R. 297; [1991] 2 Lloyd’s Rep. 435. That case
concerned where an award was “made” for the purposes of determining whether it was a
Convention award under the Arbitration Act 1975, s.7(1), but the court’s comments in relation to
Brooke v Mitchell (1840) 6 M. & W. 473 9 LJ. Ex. 269 suggest that it was intended to be of wider
application. Presumably if the parties have agreed that an unsigned award will suffice, the award will
be made when it is published, i.e. when the tribunal gives notice to the parties that the award is
ready. (See also Thompson v Miller (1867) 15 W.R. 353.)
7 See para.6—045 above.
'77 Although this course may not be appropriate if the time limit for a proposed further challenge to
or appeal against the award will have expired by the time the date is clarified.
 294 The Award

6-054 Recitals. Formal recitals are used much less often in awards now than they were
when there was a “‘special case” procedure.'”* It is still useful for an award to set
out the information which recitals traditionally contained but this is now usually
done in the body of the award rather than in recitals. If they are to be adopted the
tribunal can use recitals to set out the circumstances leading to the award, so that
for example they will record the contractual relationship between the parties, the
matters giving rise to the dispute, the appointment of the tribunal and its authority
to decide the dispute (i.e. the arbitration agreement), and, if applicable, the
hearings which have taken place. Recitals are not necessary though, and their
absence will not render the award invalid. Similarly an award cannot be challenged
on the grounds of an error in the recitals,'””? nor would such an error constitute
a question of law arising out of the award for the purposes of an appeal under s.69
of the Arbitration Act 1996.

6—055 Effect of recitals on tribunal’s authority. Though recitals are not

essential, they can be used to show on the face of the award that the tribunal had
authority to determine the dispute as it did, but a tribunal cannot by a false recital
give itself an authority beyond that given to it by the parties’ submission to
arbitration.'°°

6-056 Delegating the drafting of the award. A tribunal may obtain legal
advice on the drawing up of its award to ensure that it is in a proper form and may
even delegate the drafting of the award.'*' It may also consult an expert on some
issue required to be dealt with in the award.'** However the tribunal may not
delegate the making ofits decision to another'*’ and when employing a draftsman,
it remains the function of the tribunal itself to decide on findings of fact, to
evaluate and analyse the submissions of law and to arrive at their own reasons for
their decision. The tribunal must exercise its own judgment in deciding the
issues. '*4

'* i.e. prior to the introduction of the present appeal system in the Arbitration Act 1979, now replaced
by s.69 of the Arbitration Act 1996.
'” See, e.g. Harlow v Read (1845) 14 L.J. C.P. 239, where the award recited that the tribunal had
“considered the decision of the umpire” when there had in fact been no consultation with the
umpire. An error in the recitals would not meet the requirements for a challenge under s.68 of the
Arbitration Act 1996.
'®° Price v Popkin (1839) 8 L.J. Q.B. 198. The same would apply where the statement of authority to
determine the dispute is contained in the body of the award.
As in Agrimex Limited v Tradigrain SA [2003] EWHC 1656; [2003] 2 Lloyd’s Rep. 537. It was noted
in that case however at [32] that: ‘For some time and certainly since the enactment of the
Arbitration Act 1996 it has been part of the skill ordinarily to be expected of a competent arbitrator
that he should produce his own reasoned award”’,
'*? e.g. taking Counsel’s opinion on points of law, as in Gladesmore Investments Ltd v Caradon Fleating
Lid [1994] E.G. 159. The tribunal is given a specific power to appoint experts, legal advisers or
assessors by s.37(3) of the Arbitration Act 1996, subject to agreement of the parties otherwise: see
para.5—160 above.
'®° National Boat Shows Ltd v Tameside Marine [2001] W.L. 1560826. See further para.6—074 below.
'* Agrimex Lid v Tradigrain SA [2003] EWHC 1656; [2003] 2 Lloyd’s Rep. 537 at [33]
 Formal Requirements of Award 25

(b) Awards by more than one arbitrator or by an umpire

Chairmen and majority awards. The parties may agree to appoint a

6-057
chairman of the tribunal and to decide what his functions will be in relation to the
making of decisions, awards and orders.'*> If they do appoint a chairman then
unless otherwise agreed in writing!*® any decisions, orders and awards are to be
made by all the arbitrators or, if the reference is to three or more arbitrators, by
a majority of them. If no majority can be achieved, the chairman decides.'*” If,
however, there is no chairman then decisions, orders and awards must be made by
all or a majority of the tribunal.'**

Dissenting opinions. Any member of the tribunal who does not assent to an 6-058
award need not sign it'®” and may set out his own views ofthe case in a “dissenting
opinion”’, although he should not do so unless there is a good reason for express-
ing his dissent, because a dissenting opinion may encourage a challenge to the
award.'”° This is for the parties’ information only and does not form part of the
award,'’' but it may add weight to the arguments of a party wishing to appeal
against the award.

Award of the umpire. Where there is an umpire, either he replaces the 6-059
other arbitrators as the tribunal,'”* in which case the award is his alone, or he does
not replace them, in which case he takes no part in the making of the award.'”*
The fact that the arbitrators (or one of them) purport, after their authority has
expired, to join with the umpire in his award, will not invalidate it. The award will
stand as the award of the umpire alone.'”*

Award by a stranger. Similarly, an award will not be susceptible to challenge 6—060

because a stranger to the reference purports to assent to it, provided that the award

185 Section 20(1) of the Arbitration Act 1996.

'86 The requirement for any agreement between the parties to be “‘in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
'87 Section 20(4) of the Arbitration Act 1996, which replaced and expanded s.9 of the Arbitration Act
1950 (as amended by s.6(2) of the Arbitration Act 1979). Various of the arbitration rules also provide
for majority decisions and, in the absence ofa majority, for the chairman of the tribunal to decide:
see, for example, ICC Rules, Art.25.1 and LCIA Rules, Art.26.3.
188 Section 22(2) of the Arbitration Act 1996.
'89 Section 52(3) of the Arbitration Act 1996.
199 See further the 2003 Freshfields Lecture “Dissenting Opinions in International Commercial
Arbitration—The Good, the Bad and the Ugly” by Alan Redfern in 20 Arbitration Int. (2004),
223-242.
1 See para.6-029 above.
'2 Section 21(4) of the Arbitration Act 1996: see para.4—045 above. .
193 Even though he will often have attended the proceedings and been given copies of all the
documents, s.21(3) of the Arbitration Act 1996.
"4 Beck v Sargent (1812) 4 Taunt. 232.
 296 The Award

is issued by the tribunal properly appointed and the stranger does not play any
part in the decision-making process.'”°

(c) Time for making award

6-061 Statutory time limits. Generally, subject to the matters discussed in

para.6—062 below, the tribunal may make its award or awards at any time, unless
otherwise agreed in writing by the parties.'”° However, the Arbitration Act 1996
imposes specific time limits for making an award in three situations. First, where
an award is remitted by the court,'’’ the tribunal shall, unless the court directs
otherwise, make its award within three months from the date of the order for
remission.!°8 Second, any correction of the award'”? must be made within 28 days
from when the application was received by the tribunal or, if the correction is
made at the initiative of the tribunal itself, within 28 days of the award.” Third,
if the tribunal is to make an additional award?°! it must do so within 56 days of the
original award.?°* The time limits for corrections and additional awards are capable
of being extended by agreement of the parties.*°’

6-062 Award to be produced promptly. The tribunal must, however, produce

its award promptly after the conclusion of the hearing.

‘““At the end of the hearing [the tribunal] will be in a position to give a decision
and the reasons for that decision. They should do so at the earliest possible

5 Tn Itex Shipping Pte Ltd v China Ocean Shipping Co (The “fing Hong Hai’’) [1989] 2 Lloyd’s Rep.
522 an arbitration clause in a charterparty provided for each party to appoint an arbitrator and the
two so appointed to appoint a third. Disputes arose and each party appointed its arbitrator. Before
a third arbitrator was appointed the parties entered into a settlement agreement which itself referred
any disputes to the tribunal already appointed. The charterers failed to make payments under the
settlement agreement and the owners sought an award for the sums due. The two arbitrators
appointed a third arbitrator and an award was issued by all three of them. The court held that it was
to be implied that the same mechanism was to apply for appointment of the tribunal as in the
original arbitration clause, but that even if there was an irregularity it was sufficient that the two
arbitrators had issued the award. In these circumstances, an argument that there has been a serious
irregularity entitling a party to challenge the award under s.68 of the Arbitration Act 1996 would
almost certainly fail on the ground that it has caused no substantial injustice. Enforcement abroad
may be difficult however because the composition of the arbitral tribunal not being in accordance
with the agreement of the parties provides grounds for refusing recognition and enforcement of an
award under Art.V1(d) of the New York Convention.
196
Section 47(1) of the Arbitration Act 1996. The agreement otherwise may, for example, be set out
in the arbitration agreement—see para.6—063 below. For removal of a dilatory arbitrator who refuses
or fails to use all reasonable dispatch in making an award see s.24(1)(d)(ii) of the Arbitration Act
1996 and paras 7-122 et seq. below. The requirement for any agreement between the parties to be
“in writing” stems from s.5(1) of the Arbitration Act 1996, although the section gives the expression
a broad meaning.
"7 Under ss.68 or 69 of the Arbitration Act 1996: see paras 8-113 and 8-153 below.
8 Section 71(3) of the Arbitration Act 1996.
' Under s.57(3)(a) of the Arbitration Act 1996: see para.6—-167 below.
200 Section 57(5) of the Arbitration Act 1996.
°° Under s.57(3)(b) of the Arbitration Act 1996: see para.6—171 below.
202 Section 57(6) of the Arbitration Act 1996.
205 Sections 57(5) and (6) of the Arbitration Act 1996.
 Formal Requirements of Award 29%,

moment. ‘The parties will have made their submissions as to what actually
happened and what is the result in terms oftheir respective rights and liabilities.
All this will be fresh in the arbitrators’ minds... above all [the award] is
something which can and should be produced promptly and quickly at the
conclusion of the hearing. That is the time when it is easiest to produce an
award with all the issues in mind.”’?

This is now reflected within the general principles and duties set out in the
Arbitration Act 1996. In particular, s.1(a) sets out the general principle that the
object of arbitration is the fair resolution of disputes by an impartial tribunal
without unnecessary delay or expense, and s.33 requires the tribunal to comply
with a general duty to adopt suitable procedures avoiding unnecessary delay or
expense.*°> An arbitrator can also be removed if he fails to use all reasonable
despatch in making an award.?°°

Contractual time limits. Time limits for the making of the tribunal’s final 6-063
award are frequently imposed in the arbitration agreement entered into by the
parties. For example it may be specified that the award must be made within 90
days after the conclusion of the oral hearing.*°’ The tribunal should endeavour to
comply with the time limit, but should this not be possible it should seek the
parties’ written agreement to an extension of time. Alternatively, if the parties do
not agree to the extension the tribunal or one of the parties can apply to the court,
which has power to extend any time limit imposed for the making of the award
where a substantial injustice would otherwise be done and whether or not that
time limit has expired.”

(d) Taking up the award

Notification of the award. The Arbitration Act 1996 focuses on the 6-064
concept of “notification” rather than “‘publication” of the award.*”” Unless the
parties agree otherwise in writing?'® the award is notified to the parties by service
of copies?!! of it on them.?'? It must be notified without delay, subject to the

204 yer Donaldson L.J. in Bremer Handelsgesellschaft GmbH v Westzucker GmbH (No.2) [1981] 2 Lloyd’s
Rep. 130 at 132-3.
205 See generally paras 5—032 ef seq..
206 Section 24(1)(d)(ii) of the Arbitration Act 1996. See paras 7-122 et seq..
207 Various sets of arbitration rules also impose time limits for the making of the award. See, for
example, Art.24.1 of the ICC Rules, which requires the award to be made within six months of the
signing of Terms of Reference, although this period can be, and in practice often is, extended.
208 Section 50 of the Arbitration Act 1996: see paras 7-081 er seq. below.
209 Section 55 of the Arbitration Act 1996 refers to notification and s.56 to “delivery” of the award: see
para.6—067 below.
210 The requirement for any agreement between the parties to be “in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
211 The Act refers to service of “copies” but it is more usual for each party to receive an original
document.
212 Section 55(2) of the Arbitration Act 1996. Accordingly notification for the purposes of s.55 is not
simply telling the parties that the award is ready but also transmitting copies of it to them and
therefore incorporates delivery of the award, subject to s.56 of the Arbitration Act 1996.
 298 The Award

tribunal’s right to withhold the award in case of non-payment of its fees and
expenses.’!? Notification must be given to all parties to the reference.*!* It is
particularly important that no delay occurs in notification of the parties, since any
appeal or application to challenge the award must be brought within 28 days of the
date of the award, regardless of whether notification has been given,*'? although
time may be extended by the court.*'®

6-065 Making and publishing the award. Some arbitration agreements refer
to the tribunal “‘making and publishing” its award. Subject to agreement in
writing?!” otherwise by the parties, if the tribunal does not fix the date of the
award, it is taken as being made on the date when it is signed by the sole arbitrator
or by the final member of the tribunal to sign.*!* There is no specific reference in
the Arbitration Act 1996 concerning when an award is published to the parties, but
case law lays down that an award is published when the tribunal gives notice to the
parties that the award is ready.*'’ It is not dependent upon the parties taking up
the award.’”° Consequently, a requirement that the award be ‘‘made and pub-
lished”? will be satisfied when it has been signed and the parties have been given
notice that it is ready. This does not require service on the parties of a copy of the
award as contemplated by s.55(2) of the Arbitration Act 1996.

6-066 As stated in para.6—064, the relevant time limits for appeals and challenges to
the award under ss.67, 68 and 69 of the Arbitration Act 1996 are determined by
reference to the date of the award.**' However, where the parties have agreed that
the tribunal shall ‘make and publish” its award this must be complied with and
it is arguably not a valid award capable of challenge until it is. In practice any
requirement that the award be published may be complied with by the tribunal
contacting the parties to tell them that the award is ready and available on payment
of its fees.” Where the reference to arbitration provides for “publication to the
parties”’, it would appear that publication to all the parties is a condition precedent
to a valid award.?”°

*1 Sections 55(3) and 56 of the Arbitration Act 1996: see also paras 4-063 above and 6-069 below.
*14 See para.255 of the DAC report.
*1° Section 70(3) of the Arbitration Act 1996.
716 CPR Pt 62 1.9(1): see para.8—212.
*!” The requirement for any agreement between the parties to be “in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
*18 Section 54(2) of the Arbitration Act 1996, see para.6—053 above.
* Brooke v Mitchell (1840) 6 M. & W. 473 9 LJ. Ex. 269; see also Bulk Transport Corp v Sissy
Steamship Co Lid (The “Archipelagos” and “Delfi”) {1979] 2 Lloyd’s Rep. 289; Hiscox v Outhwaite
[1992] 1 A.C. 562; [1991] 3 All E.R. 641; [1991] 3 W.L.R. 297; [1991] 2 Lloyd’s Rep. 435.
**° International Petroleum Refining & Supply SDAD Ltd v Elpis Finance SA (The ‘‘Faith”) [1993] 2
Lloyd’s Rep. 408; Handley v Nationwide Anglia Building Society [1992] 29 E.G. 123; Bulk Transport
Corp v Sissy Steamship Co Lid (The “‘Archipelagos” and “Delfi’”’) [1979] 2 Lloyd’s Rep. 289.
1 Section 70(3) of the Arbitration Act 1996.
2 See paras 4-063 above and 6-069 below.
*S This seems to have been assumed in both Brooke v Mitchell (1840) 9 L.J. Ex. 269 6 M. & W. 473
and Bulk Transport Corpn v Sissy Steamship Co Ltd (The “Archipelagos” and “Delfi’”’) [1979] 2
Lloyd’s Rep. 289.
 Formal Requirements of Award 299

Delivery of award. It may be stipulated in the arbitration agreement that the 6-067
award must be delivered or be “ready to be delivered” by a specified date.22#
Under the previous law delivery of the award occurred when one of the parties
took up the award, i.e. collected it from the tribunal, all parties having been
informed that it was available.**> However, given the requirement in s.55(2) of the
Arbitration Act 1996 for the award to be notified by service of copies on “the
parties”, which means all of them,’ delivery now involves copies of the award
being served on both parties, in the absence of agreement otherwise in writing.?27
Delivery now therefore equates to notification under s.55(2) and a requirement
that the award be delivered will be satisfied when it has been notified to the parties
by service of a copy on each one of them.’ 228

Ready to be delivered. An award is “ready to be delivered” as soon as it has 6—068

been made.**? Provided the award is ready for delivery (and the parties so
informed) by the date specified, the fact that it is not actually delivered by that date
will not affect its validity,*° although it will additionally have to be notified to
them to fulfil the statutory requirement under s.55(2) of the Arbitration Act
1996.73!

Retention of award pending payment of outstanding fees.**? It 6-069

is usual for the tribunal to retain the award until its outstanding fees and expenses
have been paid or secured.*** The tribunal will normally inform the parties that
the award is ready and at the same time provide details of any sums outstanding
in respect ofits fees.*** At this stage the parties would usually be expected to meet
the outstanding fees in equal shares, reflecting their joint and several liability for
them,”*> following which the award will be notified to them by service of copies on
them pursuant to s.55(2) of the Arbitration Act 1996. If one party fails to do so

224 See for example Riley Gowler Ltd v National Heart Hospital Board of Governors [1969] 3 All E.R.
1401, CA. That case concerned an arbitration under the London Building Acts (Amendment) Act
1939, s.55(n) of which provided for an appeal “within 14 days after the delivery of an award made
under this section...”
225 Riley Gowler Lid v National Heart Hospital Board of Governors [1969] 3 All E.R. 1401, CA.
#20 See para.255 of the DAC report.
227 The requirement for any agreement between the parties to be “in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
228 Delivery of the award to the parties may be withheld until full payment of the tribunal’s fees and
expenses has been made: see s.56(1) of the Arbitration Act 1996: see para.6—069.
20.
See para.6—-065 above.
230 Brown v Vawser (1804) 4 East 584.
231 Agreeing that an award be ready to be delivered by a certain date does not of itself involve
notification of the award to the parties and would not therefore be an agreement on the require-
ments for notification of the award pursuant to s.55(1).
*32 See para.4—063.
233 They are expressly entitled to do so under s.56(1) of the Arbitration Act 1996.
234 Where an arbitral institution is administering the arbitration it will normally take responsibility
both for ensuring the deposits held on account ofthe tribunal’s fees and expenses are sufficient and
for notifying the award: see for example Art.28.1 of the ICC Rules.
235 Under s.28 of the Arbitration Act 1996: see further para.4-052 above.
 300 The Award

the other party may make payment in full in order to obtain the award from the
tribunal. The party who has made payment can subsequently look to the other
party for the sums paid in respect of fees which the tribunal or the court directs
are recoverable costs which the other party should pay.**° By paying the tribunal’s
outstanding fees and expenses to secure the release of the award a party does not
lose his right to challenge the award,**” nor his right under s.28 of the Arbitration
Act 1996 to challenge the amount of the tribunal’s fees and expenses.”**

6-070 Importance of taking up the award. A delay in taking up the award

may have serious consequences in the context of applications to court challenging
or appealing against the award. A 28-day time limit for any challenge to the award
or appeal is laid down in s.70(3) of the Arbitration Act 1996, although it may be
extended upon application to the court.**’ Time runs from the date of the award,
whether or not it has been notified or delivered to the parties.**° The tribunal has
an obligation to notify the parties of the award without delay**' but may refuse to
deliver it pending payment of its fees and expenses.*** A party who is delaying
taking delivery of the award, perhaps in the hope that the other party will, at least
initially, bear the burden of any outstanding fees and expenses, should keep in
mind the 28-day time limit if he is likely to want to mount a challenge or appeal
against the award.*** The better course will usually be to pay the outstanding fees
and expenses*** in order to secure delivery of the award and be able to determine
whether an appeal or challenge is appropriate. If necessary, those fees and expenses
can subsequently be challenged under s.28 of the Arbitration Act 1996.74

*°° International Petroleum Refining & Supply SDAD Lid v Elpis Finance SA (The “‘Faith’’) [1993] 2
Lloyd’s Rep. 408. However, if the amount to be paid is not fixed by the award then it may be
determined, or the means for it to be determined specified, by the court under s.63(4) of the
Arbitration Act 1996. This applies notwithstanding that one party has already paid to the tribunal
the full sum demanded: Llandrindod Wells Water Co v Hawksley (1904) 20 T.L.R. 241; Re Prebble
and Robinson [1892] 2 Q.B. 602. An alternative is to use the procedure in s.56(2) of the Arbitration
Act 1996 (replacing s.19 of the Arbitration Act 1950): see para.6-071 below.
*°7 Rokopoulas v Esperia SpA (1978) 122 S.J. 127.
258 Section 56(8) of the Arbitration Act 1996.
239 See para.8—212 below.
*" See para.6-067 above. A party seeking to challenge or appeal against an award must first exhaust any
process of appeal or review available under the arbitration agreement and if such process exists the
28-day time limit runs from the date when that party was notified of the result of it: s.70(3) of the
Arbitration Act 1996,
*4! Section 55(2) of the Arbitration Act 1996.
*? Section 56 of the Arbitration Act 1996; see also para.6—069 above.
*" See International Petroleum Refining & Supply SDAD Lid v Elpis Finance SA (The “Faith”’) [1993]
2 Lloyd’s Rep. 408. The court may, however, exercise its discretion to extend time under CPR Pt
62 r.9(1); see para.7—-092 below. See also s.80(5) of the Arbitration Act 1996. Paragraph 294 of the
DAC report suggests that time may be extended under s.79 of the Act, but in fact on its wording
that section would not apply: see also para.382 of the DAC report. See also Handley v Nationwide
Angha Building Society [1992] 29 E.G. 123; Zermalt Holdings SA v Nu-Life Upholstery Repairs Ltd
[1985] 2 E.G.L.R. 14; Nature Conservancy Council for England v Deller [1992] 43 E.G. 137.
*™“ Either to the tribunal or into court: see para.6-071 below.
*4® See paras 4-059 and 7-212 et seq.
 Substantive Requirements of Award 301

Payment into court of tribunal’s fees and expenses. Alternatively, 6-071

where the tribunal refuses to deliver its award unless its outstanding fees are paid,
the court can order that it do so on payment into court of the fees demanded or
some lesser amount specified by the court. The court then directs how the fees and
expenses properly payable are to be determined and these are met from the funds
in court, the balance (if any) being paid out to the applicant.”*° This provides a
remedy for a party who wants to take up the award but considers the tribunal’s fees
are excessive and wants them reviewed.**” The application to court may be made
by any party to the reference,*** but the procedure is not available if the arbitration
agreement itself provides any process for appeal or review ofthe tribunal’s fees and
expenses.?*?

3. SUBSTANTIVE REQUIREMENTS OF AWARD

Requirements of a valid award. To be valid, an award must comprise a 6-072

decision by the tribunal on the matters referred with which it deals. An award
must also be final, in the sense of being a complete decision without leaving
matters to be dealt with subsequently or by a third party, and it must be certain.**°
An award may be susceptible to challenge**! if the tribunal exceeds its powers,?”
or if the award is obtained by fraud or is contrary to public policy,?* or if the
requirements as to form are not complied with.*** The converse of these grounds
for challenge should be considered as requirements for a valid award.**> The
courts are inclined to uphold the validity of an award and there is a presumption
in favour of it being a final and sufficiently certain decision on the matters in
dispute.?°°

+46 Section 56(2) of the Arbitration Act 1996 (replacing s.19(1) ofthe Arbitration Act 1950). See paras
7-213 et seq. below.
47 Tr would not however assist a party who considers the fees to be excessive where the other party has
already paid the tribunal’s fees.
+48 The proviso to s.19(2) of the Arbitration Act 1950, that the application could not be made by a party
if the fees demanded had been fixed by written agreement between that party and the arbitrator, no
longer applies. However, the same result is achieved by s.56(3) of the Arbitration Act 1996 which
provides that the fees and expenses properly payable are those for which the applicant is liable under
5.28 of the Arbitration Act 1996 (dealt with at para.4-052 above) or under any agreement in relation
to payment of the tribunal.
249 Section 56(4) of the Arbitration Act 1996.
250 Tongyuan (USA) International Trading Group v Uni-Clan Ltd (2001) W.L. 98036.
251 See generally paras 8-072 et seq. below.
252 See paras 8-089 er seq. below.
253 As in Arab National Bank v The Registrar of Companies [2005] EWHC 3047. See paras 8-099 et seq.
below.
254 See paras 8-098 et seq. ors
255 Even though a party would have to show that the other requirements of s.68 have been satisfied in
order to mount a successful challenge.
256 Wood v Griffith (1818) 1 Swanst. 43; Harrison v Creswick (1852) 13 C.B. 399 21 LJ.C.P. 113; Cargey
v Aitcheson (1823) 2 B. & C. 170 1 LJ. (O.S.) K.B. 252, Bland v Russian Bank for Foreign Trade
(1906) 11 Com. Cas. 71.
 302 The Award

(a) Award must comprise a decision by the tribunal?’

6-073 Form of decision. Any form of words amounting to a decision on the matters
referred will be sufficient. No technical expressions are necessary”** but it is
clearly desirable that the award should be in clear and unambiguous terms. The
words “I am of opinion that A is entitled to claim of B £134 for non-performance
of his contract”? were held a sufficient award.*°? However, where the arbitrator
wrote a letter saying, ““To meet the circumstances of the case in a liberal manner
I propose that B should pay A £10”, this was held not to be an award because it
did not express a decision that A was entitled to the £10, but only recommended
that that sum should be paid to him.*°°

6-074 Decision may not be delegated. The tribunal may consult an expert on
some issue required to be dealt with in the award.*°' However the tribunal may not
delegate the making of its decision to another*®’ and must exercise its own
judgment in deciding the issues.*°* An award seeking to delegate the decision to
a third party will not be valid.?°*

6-075 Decision based on own expert knowledge. An arbitrator who is

appointed because of his knowledge and experience of a particular trade, is entitled
to decide the dispute on the basis of that expert knowledge and experience.*® This
applies in particular where the issues in dispute relate to questions of quality,
compliance of bulk with sample and the like and also to questions of valuation.”
Further, by appointing an arbitrator with expert knowledge the parties are taken

*°7 See also for comparison the authorities in the context of expert determination, e.g. Shorrock v
Meggiti [1991] B.C.C. 471.
28 Eardley v Steer (1835) 4 Dowl. 423 4 LJ. Ex. 293.
*5° Matson v Trower (1824) Ry. & Moo. 17. See also Smith v Hartley (1851) 20 L.J.C.P. 169 where a
“request” was held to be equivalent to a direction to pay.
269 Lock v Vulliamy (1833) 5 B. & Ad. 600.
*°! e.g. taking Counsel’s opinion on points of law, as in Gladesmore Investments Ltd v Caradon Heating
Lid (1994) E.G. 159. The tribunal is given a specific power to appoint experts, legal advisers or
assessors by s.37(3) of the Arbitration Act 1996, subject to agreement of the parties otherwise: see
para.5—160 above.
*°? National Boat Shows Ltd v Tameside Marine [2001] W.L. 1560826. See further para.6-078 below.
°° Agrimex Ltd v Tradigrain SA [2003] EWHC 1656; [2003] 2 Lloyd’s Rep. 537 at [33].
°° In Johnson v Latham (1850) 19 L..J.Q.B. 329 disputes arose between the owners of two mills on a
river. An arbitrator, appointed to define the water rights and depths of the defendant’s weir and
authorised to order any erections to be put up about the weir, awarded that the defendant was
entitled to maintain his weir at a depth of 14 inches and no more, and for the purpose of marking
the depth ordered such durable marks and erections to be placed about the weir as B might direct.
The court held that the direction as to the depth of the weir was sufficient, but that the award was
to be remitted as a result of the arbitrator delegating to B the fixing of the marks. See though
para.6—078 below.
*65 See generally paras 5—050—5-052 above.
*°° Many of the recent decisions on this subject concern rent review arbitrations: see for example 7D
Wetherspoon Plc v Jay Mar Estates [2007] EWHC 856: Warborough Investments Lid v S. Robinson &
Sons (Holdings) Ltd (2002) EWHC 2502; Checkpoint Lid v Strathclyde Pension Fund (2003) EWCA
Civ 84.
 Substantive Requirements of Award 30 Ww

to have assented to him using that general knowledge of the trade in reaching his
decision.

General and specific knowledge. A distinction must be drawn, however, 6-076

between such general knowledge of the trade and knowledge of special facts
relating to a particular case. In the latter case the arbitrator is only entitled to rely
on such knowledge provided he indicates the matters on which he intends to rely
and gives the parties an opportunity to make submissions to him on those
matters.”°’ More recently the distinction has been described in terms that the
arbitrator is fully entitled to make use of his own experience in reaching his
conclusions, provided that it is of a kind and in the range of knowledge that one
would reasonably expect the arbitrator to have, and providing that he uses it to
evaluate the evidence called and not to introduce new and different evidence.” In
other words, an arbitrator cannot supply new evidence by using his own knowledge
but he can use that knowledge to evaluate and adjudicate upon the evidence before
him. So, for example, in assessing rents, an expert arbitrator can rely on his general
knowledge of comparable rents in the district, but if he knows of a particular
comparable case, then he should disclose details of it before relying on it for his
award.”°”

Disclosure of matters to be relied upon. As a matter of caution, a 6-077

tribunal should always disclose the matters within its own knowledge on which it
intends to rely to avoid subsequent argument about whether they were, or were
not, simply its general knowledge of the trade or matters which the parties should
have been given an opportunity to address.*”°

(b) Award must be a complete decision

A complete decision. An award must be final in the sense that, in relation 6-078
to the issues or claims with which it deals, it is a complete decision on the matters
requiring determination.’’' A tribunal cannot reserve to itself, or delegate to

267 Mediterranean and Eastern Export Co Ltd v Fortress Fabrics (Manchester) Ltd (1948) 81 LI. L. Rep.
401; [1948] 2 All E.R. 186; Annie Fox and Others v PG Wellfair Lid [1981] 2 Lloyd’s Rep. 514;
Anangel Peace Compania Naviera SA v Bacchus International Commerce Corp (‘The Anangel Peace’’)
[1981] 1 Lloyd’s Rep. 452; Top Shop Estates Ltd v C Danino [1985] 1 E.G.L.R. 9; Zermalt Holdings
SA v Nu-Life Upholstery Repairs Ltd [1985] 2 E.G.L.R. 14; Unit Four Cinemas Ltd v Tosara
Investments Ltd (1993] 44 E.G. 121; Mount Charlotte Investments Ple v Prudential Assurance [1995]
10 E.G. 129; see also paras 5—050 et seg. above. ino
268 Checkpoint Ltd v Strathclyde Pension Fund {2003] EWCA Civ 84 which approved the dicta in Annie
Fox and Others v PG Wellfair Ltd [1981] 2 Lloyd’s Rep. 514; JD Wetherspoon Ple v fay Mar Estates
[2007] EWHC 856.
(1981)
269 This was one of the examples given by Dunn LJ. in Annie Fox and Others v PG Wellfair Ltd
2 Lloyd’s Rep. 514, CA at 529.
270 See paras 5—050—5-—052 above. ;
has long
271 Ronly Holdings Ltd v JSC Zestafoni G. Nikoladze Ferroalloy Plant {2004] B.L.R. 323. This
(1805) 7 East 81;
been the position: see Whitworth v Hulse (1866) L.R. 1 Ex. 251; Randall v Randall
1 QB. 98.
Samuel v Cooper (1835) 2 A. & E. 752. See Re Wright and Cromford Canal Co (1841)
 304 The Award

another, the power of performing in the future any act of a judicial nature in
relation to matters dealt with in the award. The tribunal’s duty is to make a
complete and final decision by its award, and it is a breach of that duty to leave any
part of the decision to be determined subsequently or by another.*” The tribunal
may, however, reserve to itself or delegate to another purely ministerial acts, even
after the time limited for making the award has expired,’”’ though care should be
taken to ensure that the act is not in fact the collation of further evidence.*”*

6-079 Failure to deal with all issues submitted. If the award fails to deal
with an issue which the submission requires the tribunal to determine, it will be
susceptible to challenge under s.68(2)(d) of the Arbitration Act 1996.7”? However
any challenge will only succeed if the issue said to have been omitted is an
important or fundamental one, as it is only then that the necessary substantial
injustice could be caused.*”° The award does not have to deal with issues which it
becomes unnecessary to resolve given the tribunal’s determination on other
issues.7’’

6—080 Withdrawal of claims. Where a party withdraws some or all of his claims
or chooses not to pursue them, the tribunal should nevertheless deal with the
claims in its award by recording that they were submitted and then withdrawn.
This would enable the other party to rely on the award as showing that the claims
were included within the scope of the reference to arbitration and that they have
been disposed of by the tribunal. Accordingly, it would be possible to raise a plea
of res judicata or issue estoppel*’* if it was sought to resurrect the claims in
subsequent proceedings.*”?

6-081 Matters on which no decision required. No objection based on want

of finality can be made if the matter not dealt with was one upon which there was

* Ronly Holdings Ltd v JSC Zestafoni G. Nikoladze Ferroalloy Plant [2004] B.L.R. 323. See also Re
O'Connor and Whitlaw (1919) 88 L.J.K.B. 1242; Fohnson v Latham (1850) 19 L.J.Q.B. 329 and see
Cogstad v Newsum [1921] A.C. 528.
27°3In Thorp v Cole (1835) 2 C.M. & R. 367 the tribunal was entitled to award a specified rate to be
charged per acre for land valuation, though the number of acres was to be ascertained by
measurement, because measuring is a ministerial act. See though Jandy and Tandy (1841) 9 Dowl
1044 where the award was held invalid because it reserved to the tribunal a power to appoint a
counsel or solicitor to settle the proper deeds required to give effect to the transfer of premises in
accordance with the award.
°4 See Sociedad Iberica de Molturacion SA v Nidera Handelscompagnie BV [1990] 2 Lloyd’s Rep.
240.
*”° For a detailed discussion of this requirement see paras 8-093 et seq. below.
*”° Fidelity Management SA v Myriad International Holdings BV [2005] EWHC 1193; World Trade Corp
Lid v C Czarnikow Sugar Lid [2004] EWHC 2332; Checkpoint Lid v Strathclyde Pension Fund [2003]
EWCA Ciy 84.
°” HBC Hamburg Bulk Carriers GmbH & Co KG v Tangshan Haixing Shipping Co Ltd (2006] EWHC
3250.
278 See para.6—-176 below.
*™ Those parts of an award dealing with such claims would presumably be considered as being by
consent. The Arbitration Act 1996 deals with “agreed awards” in s.51 but refers to “the dispute”
being settled rather than just some part of it. Agreed awards are dealt with at paras 6-024 et seq.
above.
 Substantive Requirements of Award 305

no dispute between the parties and therefore no decision was required. Nor can
objection be made if the award deals with all matters brought to the tribunal’s
attention, though there are other matters within the scope of the submission which
are not put to it. In order to invalidate the award, the point which it is alleged the
award fails to deal with must have been specifically raised.?*°

Award to be based on evidence and argument presented. The 6-082

award must be based solely on the evidence and argument presented by the
parties,**! and if the tribunal is minded to decide the dispute on some point which
has not been dealt with, it must give notice of it to the parties to enable them to
address it.*** That said, it will not amount to a serious irregularity if the tribunal
decides the case on the basis of a point that was “vn play or, to use a different
expression, ‘in the arena’ in the proceedings” even if not strictly argued or pleaded by
a party. 283

No need to deal with all arguments raised. Though it must deal 6-083
with all matters required to be determined, the award need not expressly address
each and every argument raised.*** A distinction is to be drawn between con-
sideration of the arguments advanced, which need not be specifically addressed in
the award, and reasons for a decision on the claims and issues in dispute, which
must be set out in the award.**°

Decision on matters actually submitted. On the other hand, the 6-084

tribunal must decide the matters actually submitted. The tribunal is not entitled
to direct what it considers to be some suitable arrangement without deciding the
matters submitted.**° Nor can an arbitrator adjust the sums due under his award

280 This is reflected in s.68(2)(d) of the Arbitration Act 1996: see paras 8-093 et seq. below. It is worth
noting also that under s.69(3)(b) of the Arbitration Act 1996, leave to appeal against an award will
only be given if the tribunal was asked to determine the question of law concerned.
81 Unless an inquisitorial approach is adopted: see para.5—099 above.
282 Ascot Commodities NV v Olam International Ltd [2002] C.L.C. 277; Cosemar SA v Marimarna
Shipping Co Ltd (The “Mathew’’), [1990] 2 Lloyd’s Rep. 323; Annie Fox and Others v PG Wellfair
Ltd [1981] 2 Lloyd’s Rep. 514; Fairclough Building Ltd v Vale of Belvoir Superstore Ltd (1990) 56
B.L.R. 74. See also paras 5-061 et seg. above and also para.8—080 below on the possibility of
challenge where the tribunal bases its award on a point which the parties have not been given an
opportunity to argue before it.
283 ABB AG v Hochtief Airport GmbH 2006 EWHC 388, following Bulfracht (Cyprus) Lid v Boneset
Shipping Co Ltd (The ‘‘Pamphilos”’) [2002] EWHC 2292; Warborough Investments Ltd v S Robinson
& Sons (Holdings) Ltd [2003] EWCA Civ 751; Bandwith Shipping Corp v Intaari [2006] EWHC
2532. See further para.8—080 below.
284 World Trade Corp Ltd v C Czarnikow Sugar Ltd [2004] EWHC 2332. See also paras 8-093 et seq.
below.
285 In Checkpoint Ltd v Strathclyde Pension Fund [2003] EWCA Civ 84 a distinction was drawn between
a point of dispute, which did not have to be specifically dealt with, and an issue for the purposes
of s.68(2) of the Arbitration Act 1996, which did. See also Benaim (UK) Ltd v Davies Middleton &
Davies Ltd 102 Con L.R. 1 and paras 6-028 et seg. above and in particular para.6—031.
286 In Ross v Boards (1838) 8 A. & E. 290 LJ. QB. 209, on a reference of all questions relating to an
agreement for the sale of land, the sufficiency of the vendor’s title was disputed. An award that the
purchaser should take a conveyance of the title with all ics faults, receiving an indemnity, was held
invalid as not finally settling the question of title.
 306 The Award

to take account of matters in dispute which are beyond the scope of his jurisdic-
tion.2°” Nor, if the tribunal disagrees with the formulation of the submission, is it
entitled to determine the issues which it thinks should have been put before it,
though in fact they were not.*°*

6—085 Where several claims made. Where several claims are made between the
parties, the tribunal must decide upon each of them in the award in order to
comply with the duty to express conclusions on all claims and counterclaims
submitted and to avoid the need for the award to be remitted. Thus, unless there
is clear evidence of express or implied abandonment of certain points, the tribunal
must deal with all the issues raised in the parties’ written statements of claim and
defence, even if they are not subsequently argued and elaborated upon at the
hearing or in written submissions.”*?

6-086 Failure to mention particular claim. The failure to deal explicitly

with a particular claim or a pleaded issue does not necessarily mean that the award
will be susceptible to challenge if it is to be inferred from the circumstances that
the tribunal did not in fact overlook that claim or issue when making its award.*”°
Thus, it is not necessary for the award formally to express that it is an award on
all the matters submitted if that is clear from its face,*?' but it may be advisable to
do so.

6—087 Counterclaims. In the absence of special circumstances requiring that mat-

ters should be dealt with separately, where there is a counterclaim which is sought
to be used as a set-off or excess,*”” the award need not deal separately with the two

**7 Ronly Holdings Ltd v JSC Zestafoni G Nikoladze Ferroalloy Plant [2004] EWHC 1354 although as
noted in that case if adefence of set-offisraised the tribunal may be required to investigate it: see
para.6-016 above. See also Metal Distributors (UK) Ltd » ZCCM Investment Holdings Ple [2005]
EWHC 156; [2005] 2 Lloyd’s Rep. 37 at [18.6].
88 In Jager v Tolme [1961] 1 K.B. 939 a contract contained a clause to the effect that in the event of
war rendering performance impracticable, either party might “appeal to the Council” (of a trade
association) “for a decision”. It was held that the Council must decide the parties’ rights according
to law and an award substituting a new contract for the old one was invalid. The Arbitration Act
1996 does however provide some scope for the tribunal to base its decision on considerations other
than a particular law if the parties so agree: see para.2-091 and paras 4-141 ef seq. above.
*® Cobelfret NV v Cyclades Shipping Co Lid (The “Linardos’’) [1994] 1 Lloyd’s Rep. 28. Even if claims
have been withdrawn or abandoned it may be helpful for the tribunal to include them in the award:
see para.6—080 above.
*° In these circumstances it is unlikely that substantial injustice will have occurred: see para.8—104
below. See also Sig Bergesen DY A/S and Another » Mobil Shipping and Transportation Co (The
“Berge Sund”) [1992] 1 Lloyd’s Rep. 460; Gray v Gwennap (1822) 1 B. & A. 106; Craven v Craven
(1817) 7 Taunt. 644; Dunn v Warlters (1842) 9 M. & W. 792 11 L.J. Ex. 188; Perry v Mitchell (1844)
12 M. & W. 792 14 L,J. Ex. 88; Femell v Christie (1866) L.R. 2 C.P. 296 36 LJ.C.P. 168.
*" Re Brown and Croydon Canal Co (1839) 9 A. & E. 522 8 LA. Q:Bw92.
* See para.6—-016 above.
 Substantive Requirements of Award 307

issues of claim and counterclaim, but it must explain how the result is arrived
tee

Composite award as to quantum. As to quantum, a tribunal may make 6-088

a composite award in respect of amounts which arise as a result of various
interacting events, the consequences of which cannot be separated so as to
attribute a part to each claim.*”*

(c) Award must be certain

Need for certainty. An award must be certain in the sense that the tribunal’s 6-089
decision on the matters dealt with must be clear from its face, as must the nature
and extent of the duties it imposes on the parties. If the effect of the award is
uncertain or ambiguous, it will be susceptible to challenge.*”°

Clarity as to what is required. The need for certainty with regard to the 6-090
effect of the award means that it must be clear exactly what is required to be done
and by whom. Where the award directs the payment of money, it must be clear
what amount is to be paid,*”° by whom and to whom. ””’ Where a tribunal ordered
payment of a sum of money sufficient to secure the release of securities, the award
was held to be invalid because it did not ascertain the actual amount which was
required to be paid.’”*

Failure to deal with quantum. Where the award in effect comprises a 6-091
decision on liability but fails to decide the amount due or to make provision for
payment,””’ it may be remitted to the tribunal for it to deal with these further

23 Compagnie Financiere pour le Commerce Extérieur SA v Oy Vehna A.B. |1963] 2 Lloyd’s Rep. 178.
2+ J Crosby & Sons Ltd v Portland UDC [1967] 5 B.L.R. 121; London Borough of Merton v Stanley
Hugh Leach Ltd {1985] 32 B.L.R. 51.
2° Under s.68(2)(f) of the Arbitration Act 1996. See para.8—098 below.
29 Margulies Bros Ltd v Dafnis Thomaides & Co (UK) Ltd [1958] 1 Lloyd’s Rep. 250 [1958] 1 W.L.R.
398: River Plate Products Netherlands BV v Establissement Coargrain [1982] 1 Lloyd’s Rep. 628. See
also Oricon Waren-Handels GmbH v Intergraan N.V. [1967] 2 Lloyd’s Rep. 82 at 98-9 and Montrose
Canned Foods Ltd v Eric Wells (Merchanis) Ltd [1965] 1 Lloyd’s Rep. 597.
297 In Re Tidswell (1863) 33 Beav 213 an arbitrator was required to award and apportion a trust estate
among the persons entitled. He found that a certain sum was due from a party and directed him
to pay or account for it to the trust estate. The award was held uncertain, on the grounds that it
ought to have specified to whom and in what proportions the money ought to be paid. See also Bulk
Trading SA v Moeller [2006] EWCA Civ 1294 where it was unsuccessfully argued that an award was
unclear as to which of two parties, one of whom was the agent of the other, it was made against.
28 Hewitt v Hewitt [1841] 1 Q.B. 110.
299 In Montrose Canned Foods Lid v Eric Wells (Merchants) Ltd [1965] 1 Lloyd’s Rep. 597 an award
provided that “the Buyers pay the Sellers for all the losses arising from the non-payment of
documents on presentation. We also award the Arbitration fees and expenses for account of buyers”.
The court held that the award was defective and should be remitted because it merely decided the
question of liability without either deciding the amount to be paid or making provision for pay-
ment.
 308 The Award

points.*°° Alternatively the tribunal may be able to make an additional award

dealing with quantum.*”

6-092 Who must do what? The award must not only make clear exactly what is
required to be done but also which of the parties is required to do it.*°* The
person who is to receive payment or otherwise to receive benefit from perform-
ance, or towards whom performance of the award is to be directed, must also be
sufficiently identified, even if not named.°”?

6-093 Method of calculation sufficient. It is, however, sufficiently certain if

the award sets out the method of calculation of the amount due to be paid, so that
all that is required to determine the actual amount is “mere arithmetic”.°™

6-094 Time limit not required. An award will be sufficiently certain even if it
imposes no time limit for compliance. It must be performed within a reasonable
time, or, if the requirement for performance is conditional upon a request to do
so, within a reasonable time of the request. A demand for compliance with the
award will normally be given before a party seeks to enforce an award, particularly
if no time limit for performance is specified in the award.

6-095 Award in the alternative. An award may be sufficiently certain and final
though it is in the alternative. Where an award directs that one of two things be
done, and one of them is uncertain or impossible, the award is nevertheless
sufficiently certain and final if the other alternative is certain and possible and it
will be incumbent on the party concerned to perform the award.*”

*°° Under s.68 of the Arbitration Act 1996; see paras 8-093 and 8-113 below. If the tribunal is not in
a position to make an award on quantum it will usually be open to it to make an award dealing with
lability and defer issues of quantum until a subsequent or final award: see paras 6—009 e7 seg. above.
See also Cremer v Samanta and Samanta {1968] 1 Lloyd’s Rep. 156.
°°! See para.6-171 below.
°° Lawrence v Hodgson (1826) 1 Y. & J. 16; Re Smith and Wilson (1848) 2 Ex. 327; Rainforth v Hamer
(1855) 25 L.T(OS.) 247.
°° Hare v Fleay (1851) 11 C.B. 472 20 L.J.C.P. 249. See also the comments of Roskill J. concerning
the importance of properly identifying the parties in the award in SG Embiricos Ltd v Tradax
Internacional SA (The “Azuero”’) {1967] 1 Lloyd’s Rep. 464.
3% Higgins v Willes (1828) 3 M. & R. 382: Hopcraft v Hickman (1824) 2 S. & S. 130 3 LJ. (O.S.) Ch.
43; Wohlenberg v Lageman (1815) 6 Taunt. 251; Plummer v Lee (1837) 2 M. & W. 495 6 LJ. Ex.
141.
*’ Where an award directed that the respondent should cause satisfaction to be entered on the
judgment-roll in a certain action, or pay a sum of money, and there was in fact no such action, the
award was held good to compel the respondent to pay the money: Wharton v King (1832) 2 B. &
Ad. 528 9 LJ. (O.S.) K.B. 271. See also Simmons v Swaine (1809) 1 Taunt. 549.
 Relief and Remedies Available to the Tribunal 309

4. RELIEF AND REMEDIES AVAILABLE TO THE TRIBUNAL

Relief and remedies available. The Arbitration Act 1996 sets out the 6-096
range of relief and remedies which the tribunal may grant. Section 48 provides:

“48. (1) The parties are free to agree on the powers exercisable by the arbitral
tribunal as regards remedies. ;
(2) Unless otherwise agreed by the parties, the tribunal has the following
powers.
(3) The tribunal may make a declaration as to any matter to be determined
in the proceedings.
(4) The tribunal may order the payment of a sum of money, in any cur-
rency.
(5) The tribunal has the same powers as the court—

(a) to order a party to do or refrain from doing anything;

(b) to order specific performance of a contract (other than a contract
relating to land);
(c) to order the rectification, setting aside or cancellation of a deed or
other document.”

Party autonomy. As with so many provisions of the Arbitration Act 1996, 6-097
s.48 makes clear that party autonomy prevails and preserves the parties’ right to
extend or restrict the tribunal’s powers as regards remedies by agreement in
writing.*°° Indeed the parties may agree to confer on the tribunal powers which
would not be available to the court.*”’ In the absence of contrary agreement
between the parties the tribunal has the powers set out in s.48(3) to (5), although
these are not necessarily the only powers it will have.*”*

(a) Directing payment of money

Directing payment. The most common form of relief granted in an award 6-098
is a direction for the payment of money. *”” This may be either as a debt due or
by way of damages or as a payment due in satisfaction of a claim for restitution.*!”
Section 48(4) confirms the tribunal’s power to order the payment of a sum of

306 The requirement for any agreement between the parties to be “in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
307 This was clearly the intention: see para.234 of the DAC report. See also the discussion in relation
to exemplary damages at paras 6-103 e¢ seg. below.
308 See, e.g. para.6—113 below concerning the tribunal’s power to order an indemnity. Also the parties
may agree to confer powers under s.48(1) in addition to those under s.48(3) to (5).
309 See also paras 6-115 et seq. below on interest payable on monies awarded.
310 As in Cameroon Airlines v Transnet Lid [2004] EWHC 1829.
 310 The Award

money, provided the parties have not agreed otherwise in writing*'’ in the
arbitration agreement.

6-099 To whom payment should be made. Where an award directs the

payment of money, it will usually be payment by one party to the reference to the
other party and the award should set out clearly who is to make payment to
whom.*!' There is old authority that an award directing payment of a sum of
money to a third party is void unless the payment is for the benefit of one of the
parties to the reference, and the onus of showing that benefit is on the party
seeking to enforce the award.*!*

6-100 Terms of payment. A tribunal may fix the time at which payment is to be
made?"3 and it may direct that payment be made in instalments, with the whole
becoming payable if one instalment remains unpaid.*'* There is old authority that
a tribunal may order the payment of additional sums for delay in carrying out its
award and that this will be regarded as in the nature of liquidated damages rather
than as a penalty.*'° It seems unlikely that such a course would now be adopted in
the light of the statutory provision for the tribunal to award interest.*'°

6-101 Currency of payment. Section 48(4) of the Arbitration Act 1996 provides
that an award may order payment to be made in any currency. The proper
construction of this section was considered by the House of Lords Lesotho
EMighlands Development Authority v Impreglio SpA where Lord Phillips explained
that there are two possible ways of interpreting the provision.*'’ The first is to
treat it as simply conferring a procedural power to make an award in any currency,
not thereby affecting the existing substantive law concerning awards in a foreign
currency. This was the view favoured by the majority in Lesotho Highlands
Development Authority v Impreglio SpA. The alternative approach, favoured by
Lord Steyn, was that s.48(4) represented a change in the substantive law, by
introducing an unconstrained power to make an award in any currency. This was
rejected by the majority on the basis that if those who drafted the Act had
intended to give such a broad discretion they would have done so more clearly, but
the matter cannot be considered entirely free from doubt.*!8

*"! The requirement for any agreement between the parties to be “in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
*1la See para.6—092 above.
312 Wood v Adcock (1852) 7 Ex. 468 21 LJ. Ex. 204.
313 Armitage v Walker (1855) 2 Kay & J. 211.
1 Royston v Rydal (1605) Rolle Ab. Arb. H 8 Com. Dig. Arb. E. 15; Kockill v Witherell (1672) 2 Keb.
838.
3) Parfitt v Chambre (1872) L.R. 15 Eq. 36.
*'° Section 49 of the Arbitration Act 1996 and see further para.6—115 below.
*17 12005] UKHL 43; [2006] 1 A.C. 221 at [49].
*! Although the remaining four Law Lords questioned Lord Steyn’s interpretation, Lord Hoffmann
preferred to express no opinion on the point.
 Relief and Remedies Available to the Tribunal 311

Assuming that the existing principles of English law do apply to the exercise of
discretion under s.48(4)*"° then the tribunal should make the award in the proper
currency of the contract under which the dispute arose unless the parties have
expressly or impliedly agreed otherwise in writing.*?° The proper currency of the
contract is the currency with which payments under the contract have the closest
and most real connection or, if there is none, the currency which most truly
expresses the claimant’s loss.**! An award in a foreign currency may be enforced
in England without the need to convert it to sterling.*??

Certificates as a condition precedent. Certain building and engineer- 6-102

ing contracts make the issue of an architect’s or engineer’s certificate a condition
precedent to a contractor’s right to payment for the work done. Where there has
been no certificate and the contractor claims payment, the tribunal may still be
able to decide the rights and obligations of the parties, including what sum should
be paid to the contractor.*”* Assuming that the tribunal does have such jurisdic-
tion, its award may itself take the place of the certificate, depending upon whether
this power has been conferred on the tribunal.

Exemplary damages. English law permits the award of exemplary or, as 6-103
they are known in some jurisdictions, punitive damages in actions in tort in three
cases.*?* In the arbitration context, there are two issues to be considered in relation
to exemplary damages. The first is whether the tribunal has power to make an
award providing for the payment of exemplary damages. The second is whether,
assuming the tribunal does make such an award, it is enforceable. The present
discussion of the topic will be limited to addressing these two issues in the context
of English law on the subject.

Power to award exemplary damages. The first issue is whether a 6-104

tribunal sitting in England and applying English substantive law would only be
entitled to award exemplary damages in cases in which an English court applying
English law would be able to do so, i.e. in the three cases set out in the footnote

319 In Lesotho Highlands Development Authority v Impregho SpA [2005] UKHL 43; [2006] 1 A.C. 221
Lord Phillips specifically referred to the following statement of the position set out in the 22nd
edition of this book.
”
320 The requirement for any agreement between the parties to be “in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
321 Gygoslavenska Oceanska Providba v Castle Investment Co Inc [1974] Q.B. 292; Services Europe
Atlantique Sud (Seas) of Paris v Stockholms Rederiaktiebolag Svea of Stockholm (“The Folias’’)
[1979] A.C. 685.
22 Miliangos v George Frank (Textiles) Ltd [1976] 1 Lloyd’s Rep. 201.
323 See further Keating on Building Contracts (8th edn), para.5—015. :
324 These are, first, oppressive, arbitrary or unconstitutional actions by servants of the government;
second, where the defendant’s conduct has been calculated by him to make a profit for himself
which may well exceed the compensation payable to the plaintiff; and, third, where there is express
authorisation by statute: Rookes v Barnard [1964] A.C. 1129, HL. A detailed discussion of the
subject 1s beyond the scope of this book but the reader is referred to McGregor on Damages (17th
edn) Ch.11.
 312 The Award

to the previous paragraph. Prior to the Arbitration Act 1996 the answer was
probably yes,*?> although there was no direct authority on the point. Given that
most arbitrations are concerned with contractual rather than tortious claims, this
lack of any decided cases on the point was perhaps unsurprising. Different
considerations would have applied, however, to a tribunal sitting in England and
applying a foreign substantive law. The scope of the tribunal’s power to award
exemplary or punitive damages would in such cases have been determined, first,
by the scope of the arbitration agreement, (i.e. whether it was sufficiently widely
drafted so as to permit, or at least not to exclude, such an award) and, secondly,
by the extent to which, if at all, the foreign substantive law permits such an
award.

6-105 Has the Arbitration Act 1996 changed the position? Arguably the
position has changed with the passing of the 1996 Act, at least where the parties
have agreed that the tribunal shall have power to award exemplary damages.
Section 48 of the Arbitration Act 1996 makes clear that the parties are free to agree
in writing*° on what powers the tribunal should have as regards remedies and they
are not restricted to those that would be available to the court.**” Presumably,
therefore, the parties could by agreement give the tribunal an unfettered right to
award exemplary damages if it considered this appropriate.***

6-106 Enforcement of award of exemplary damages. There is no decided

case on the question whether an English court would enforce an award of
exemplary damages made in an arbitration with its seat in England and, if so, in
what circumstances. In the light of s.48 of the Arbitration Act 1996 it seems likely
that it would do so if the parties had expressly agreed to give the tribunal power
to award exemplary damages or had chosen an applicable substantive law that
permits the award of exemplary damages in the circumstances of the particular
case. ‘The court would, however, look very closely at the agreement and would seek
to construe it narrowly. If a tribunal purported to award exemplary damages in the
absence of express agreement between the parties that it should do so, and in
circumstances where under English law there is no entitlement to them, the award
would be vulnerable to challenge for both serious irregularity under s.68 and for
error of law pursuant to s.69 of the Arbitration Act 1996.
Difficulties may arise in the context of international arbitrations where, for
example, an award has been made at a seat of arbitration and under an applicable

**° On the basis that the availability of exemplary damages concerns heads of damage rather than
quantification and is therefore to be determined by the substantive law.
*°° The requirement for any agreement between the parties to be “in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
#27 See para.6—097 above.
*°S There are at least two possible arguments against this, First, it would involve the tribunal deciding
the case other than in accordance with English law. The tribunal is entitled to do so if empowered
by the parties under s.46 of the Arbitration Act 1996, Secondly, it is arguably contrary to public
policy and the exclusion of exemplary damages would be considered a “safeguard . . . necessary in
the public interest” under s.1(b) of the Arbitration Act 1996. This is considered further in the
context of enforcement of an award of exemplary damages: see para.6—106 below.
 Relief and Remedies Available to the Tribunal S18

substantive law both of which permit the award of exemplary damages, and
enforcement is sought in another jurisdiction which does not permit such awards,
or at least not in those circumstances. If enforcement is being sought of a New
York Convention award*”? an English court would be likely to enforce the award
notwithstanding that it provides for exemplary damages in circumstances where
they would not be available under English law. The most obvious ground for not
doing so would be to assert that the award is contrary to public policy but it is
difficult to see what concerns of this nature would arise given that exemplary
damages are available as a matter of English law, albeit in limited circumstances.

(b) Injunctive relief

Power to grant injunctions. The Arbitration Act 1996 has clarified the 6-107
power of the tribunal to grant injunctive relief. Unless the parties have agreed
otherwise in writing,**° under s.48(5)(a) it has the same power as the court to order
a party to do or refrain from doing anything. A tribunal can therefore include in
its award permanent injunctive relief.**' The position in relation to interim
injunctions is dealt with at paras 5-077 above.

(c) Specific performance

Power to order specific performance. Section 48(5)(b) of the Arbitra- 6-108

tion Act 1996 provides that the tribunal has the same power as the court to order
specific performance of a contract other than a contract relating to land.*** A
contract relating to land is one which creates or transfers an interest in land.*** In
the event of a failure to comply with the tribunal’s award, the coercive powers of
the court may be available once steps have been taken to enforce the award.***

(d) Declaratory rehef

Power to make declarations. A tribunal has power under s.48(3) of the 6-109
Arbitration Act 1996 to make declarations in an award as to any matter to be

329 See further paras 8-021 er seg. below for enforcement of New York Convention awards. -
330 The requirement for any agreement between the parties to be “in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning. See for example
Vertex Data Science Ltd v Powergen Retail Lid [2006] EWHC 1340 where the parties excluded the
power to grant injunctions under s.48.
331 Tn contrast, the court’s power under s.44 of the Arbitration Act 1996 is limited to interim injunctive
relief: see paras 7-180 er seq. below.
332 Formerly s.15 of the Arbitration Act 1950. The proviso in s.15 referred to contracts relating to land
or any interest in land, but there was no intention to change the law in this regard: see para.234 of
the DAC report.
333 Telia Sonera AB v Hilcourt (Docklands) Ltd [2003] EWHC 3540. That case also clarified that it is
the relevant contractual obligation of which specific performance 1s sought that must not relate to
land, not the contract as a whole.
334 The English court may be unable to lend its coercive powers if the respondent and/or the subject
matter of the award is abroad, but a foreign court may enforce the award. As to enforcement, see
paras 8-002 et seg. below.
 314 The Award

determined in the proceedings, provided the parties have not agreed otherwise in
writing’*> in the arbitration agreement.**° A declaration may be made with or
without a decision on a related money claim and will be appropriate, for example,
where the parties simply want a decision on‘their rights, or to determine the
existence or meaning of a contract. Declarations are often sought together with
orders for specific performance. The reference in the statute to “‘any matter to be
determined”’ suggests that the power is to be construed widely.

6-110 When declaratory relief appropriate. A tribunal should take a similar

approach to the court in deciding when to grant declaratory relief.**’ In particular,
it should avoid making declarations on academic or hypothetical questions or in
respect of claims which have not actually been made. As Lord Diplock said in
Gouriet v Union of Post Office Workers, “it is when an infringement of the
plaintiff’s rights in the future is threatened or when, unaccompanied by threats,
there is a dispute between parties as to what their respective rights will be if
something happens in the future, that the jurisdiction to make declarations of right
can be most usefully invoked. But the jurisdiction of the court is not to declare the
law generally or to give advisory opinions; it is confined to declaring contested
legal rights, subsisting or future, of the parties represented in the litigation before
it and not those of anyone else.’’*** It may also be appropriate to seek a declaration
of a subsisting right, such as an entitlement to indemnification under a policy of
insurance, although this will usually be accompanied by a request for an order for
payment of monies due under the policy.

(e) Contribution

6-111 Power to order a contribution. A tribunal may have power to order a

contribution under s.1 of the Civil Liability (Contribution) Act 1978. The position
was considered by the Court of Appeal in Société Commerciale de Reassurance v
Eras (International) Limited and Others**° but, at least in relation to a tribunal
sitting in England, no firm conclusion was reached. However in Wealands v CLC
Contractors Ltd**° the same court expressed the view that the tribunal did have
such power. This decision was followed in X Lid v Y Lid**! where the court made
clear that if the arbitration clause is drafted in appropriate terms, it may encom-

°° The requirement for any agreement between the parties to be “in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
336
As to enforcement of declaratory awards see para.8—012.
**7'The court’s power is set out in CPR, r.40.20.
9811978] A.C. 435 at 501. CPR 1.40.20, introduced since that case was decided, does not expressly
limit the power to declarations “of rights”. See generally Woolf, The Declaratory Judgment (3rd
edn).
33° [1992] 1 Lloyd’s Rep. 570.
749 [1999] 2 Lloyd’s Rep. 739.
=a 2005 Belen Reosls
 Relief and Remedies Available to the Tribunal 31 wn

pass a claim for contribution under the Civil Liability (Contribution) Act 1978,
notwithstanding that such claims are not specifically addressed in s.48 of the
Arbitration Act 1996.

The current position. It is clear that if the arbitration agreement specifically 6-112
confers jurisdiction to order a contribution under the 1978 Act then this will be
upheld, given the parties’ right to agree on the remedies available**? 33 The
position is more uncertain in the absence of a clear provision in the arbitration
agreement conferring jurisdiction to order a contribution. In Wealands v CLC
Contractors Ltd,** where a party sought to resist a stay of court proceedings, the
court decided that even if an arbitrator would lack power to determine a right of
contribution under the 1978 Act that would not be a good reason for refusing a
stay, because, by agreeing to arbitration, the parties would be deemed to have
agreed to forego any right to that remedy. The court went on to consider, obiter
dicta, the existence of the jurisdiction and, relying on the argument that tribunals
in England have implied powers to exercise “every right and discretionary remedy
given to a Court of law’’,** the court concluded, somewhat tentatively, that an
arbitrator was empowered to order a contribution. In X Lid v Y Lid,**° although
it was accepted in principle that an arbitration agreement may be drafted in
sufficiently wide terms so as to encompass a claim for contribution under the Civil
Liability (Contribution) Act 1978, a provision in that case that “all disputes,
differences or questions between the parties to the Contract with respect to any
matter or thing arising out of or relating to the Contract... shall be referred to
the arbitration” was held not to achieve that result. The safest approach if it is
contemplated that a claim for a contribution is to fall within the tribunal’s
jurisdiction is to provide for this expressly in the arbitration agreement.

(f) Indemnity

Power to order indemnity. Whether there is power to order an indemnity 6-113

is not specifically addressed in s.48 of the Arbitration Act 1996, perhaps because
it is subsumed within the power to order the payment of a sum of money and/or
to make a declaration of the right to be indemnified. If the amount of the
indemnity cannot be ascertained, for example because it will depend upon the

342-343 Pursuant to s.48(1) of the Arbitration Act 1996.

34411999] 2 Lloyd’s Rep. 739.
43 The argument (which was set out by Mustill L.J. in the Bras case) is that it is to be implied that
the tribunal has the same powers as would have been available in a court of law having jurisdiction
to decide the same subject matter. This argument is based on the quoted text from Tucker L.J. in
Chandris v Isbrandtsen-Moller [1951] 1 K.B. 240; [1950] 2 All E.R. 618 relying on Edwards v Great
Western Railway (1851) 11 C.B, 588. In the latter case the award was the result ofa reference by
consent order in a trial at Nisi Prius and accordingly it would have been natural to assume that the
tribunal’s powers concerning interest were the same as those of the jury whom it replaced. It is
questionable how much weight can be placed on this argument given the number of implied terms
specifically mentioned in the Arbitration Act 1996 and the terms of the 1978 Act itself, but it
nevertheless formed the basis of the court’s tentative decision in the Wealands case.
5512005) BulesRe Sal:
 316 The Award

amount, if any, payable to a third party, then the tribunal may grant a declaration
of the right to be indemnified and/or may refrain from issuing its final award until
the amount payable can be fixed.

(g) Rectification, setting aside or cancellation of a deed or other

document

6-114 Power to make order. Section 48(5)(c) of the Arbitration Act 1996 provides
that the tribunal has the same power as the court to order the rectification, setting
aside or cancellation of a deed or other document. This statutory provision has
clarified an area of the law which previously turned on construction of the
arbitration agreement and whether it was in sufficiently broad terms to confer this
power.**”

(h) Interest

6-115 Statutory power to award interest. The tribunal has a power to award
interest under s.49 of the Arbitration Act 1996.

6-116 Party autonomy. As with so many provisions of the Arbitration Act 1996,
s.49 makes clear that party autonomy prevails and preserves the parties’ right to
agree what powers, if any,*** the tribunal shall have as regards the award of interest.
Again the parties may agree to confer on the tribunal powers which would not be
available to the court.**’ In the absence of agreement between the parties**® the
tribunal has the powers set out in s.49(3) to (5), although these are not necessarily
the only powers it will have as s.49(6) of the Arbitration Act 1996 preserves any
other power of the tribunal to award interest.**!

+47 The trend was generally towards construing arbitration clauses so as to permit the tribunal to order
rectification: Ethiopian Oilseeds & Pulses Export Corp v Rio Del Mar Foods Inc [1990] 1 Lloyd’s Rep.
86; Ashville Investments Ltd v Elmer Contractors Ltd [1988] 2 Lloyd’s Rep. 73, CA; [1988] 3 W.L.R.
867. Cf. Crane v Hegeman-Harris Co Inc [1939] 4 All E.R. 68, CA; Printing Machinery Co Ltd v The
Linotype & Machinery Ltd (1912) 1 Ch. 566; Filhite (Runcorn) Ltd v Aqua-Lift 26 Con. L.R. 66 45
BR 2/3
*#8 See Socony Mobil Oil Co Inc v West of England Ship Owners Mutual Insurance Association Ltd (The
“Padre Island”) (No.2) {1989 1 Lloyd’s Rep. 239, CA. The intention to exclude interest need not
be contained in the arbitration clause itself, provided it can be construed as part of the arbitration
agreement.
+The DAC report does not spell this out as it does at para.234 in relation to remedies under s.48 of
the Arbitration Act 1996, but the freedom given to the parties to agree these powers is on the face
of it the same subject perhaps to public policy considerations.
*°° Selection of a particular governing law will not constitute agreement between the parties for the
purposes of s.49 because it does not constitute an agreement in writing in accordance with s.5(1) of
the Arbitration Act 1996: see Lesotho Highlands Development Authority v Impreglio SpA [2005]
UKHL 43; [2006] 1 A.C. 221 at [37].
*91 See also para.6—-127 below.
 Relief and Remedies Available to the Tribunal 317

Pre- and post-award interest. The section draws a distinction between 6-117
interest payable up to the date of the award, and interest payable thereafter on the
sums awarded. The former is dealt with in s.49(3) and the latter in s.49(4). The
provisions are the same save for the period over which interest may be awarded and
on what. Pre-award interest may be given on any amount awarded by the tribunal
or any sum which is claimed in the arbitration*” and post-award interest may be
given on the outstanding amount of any award. Prior to the 1996 Act post-award
interest accrued automatically.*°’ It no longer does so and, unless there is provision
for post-award interest in the arbitration agreement or any applicable rules,** it
should be the subject of a specific claim in the arbitration.*>°

Interest on sums which are claimed in the arbitration. It is clear 6-118

from s.49(3)(b) that the tribunal has power to award interest on sums paid even
though it has not reached the stage of making an award in respect of them,
provided that those sums were claimed in the arbitration. Correspondingly, the
tribunal has no power under the section to award interest on sums paid prior to
the arbitration being commenced because they are not claimed in the arbitra-
tion.

Amounts payable following declaratory award. Interest may also 6-119

be awarded where a sum is payable in consequence of a declaratory award made by
the tribunal under s.49(5) of the Arbitration Act 1996. The provision was con-
sidered in Durham CC v Darlington BC**° and the court concluded that it had to
be construed consistently with the remainder of the section, such that a tribunal
was only empowered to award interest in circumstances where, had it made a
monetary award, interest could have been awarded under s.49(3).°°

Simple or compound interest. Unlike its predecessor,*** 358

which referred 6-120
only to simple interest, ss.49(3) and (4) of the Arbitration Act 1996 give the
tribunal power to award simple or compound interest.**’ This reflects the position
under the rules of various arbitration institutions which empower the tribunal to

352 Assuming that the sum claimed became payable prior to the making of the award: see Durham CC
v Darlington BC [2003] EWHC 2598.
353 Pursuant to s.20 of the Arbitration Act 1950.
354 Pirtek (UK) Ltd v Deanswood Ltd [2005] EWHC 2301; [2005] 2 Lloyd’s Rep. 728. See for example
art.26.6 of the LCIA Rules.
355 Walker v Rome [2000] 1 Lloyd’s Rep. 116. The respondent is named in the official transcript as
Rome, rather than Rowe.
356 [2003] EWHC 2598.
357 Although there was a declaratory award in that case, nothing fell due until service of a notice and
the sum was not therefore payable consequent upon the declaratory award.
358 Section 19A of the Arbitration Act 1950.
°° See further para.237 of the DAC report which addresses the concerns which had been expressed
about conferring a power to award compound interest.
 318 The Award

award compound interest.*°’ Compound interest is to be awarded on a compensa-

tory basis and the power should not be used in order to punish the payer.*°! In
most cases however compound interest will reflect more accurately than simple
interest the loss caused to a party by not having the sum awarded at his dis-
posal.*°

6-121 Rate of interest. The tribunal has a discretion as to the rate of interest to be
applied, but it should keep in mind that the purpose of interest is to compensate
the successful party for not having had at his disposal the amount awarded for a
period of time. This is underlined by the reference in ss.49(3) and (4) to interest
being awarded as the tribunal considers meets the justice of the case. The contract
may itself specify an interest rate for unpaid sums. Alternatively, the tribunal may
adopt a rate at or above the bank borrowing rate(s) for the period in question.*®
As regards post-award interest it is usual to award a similar rate to the prevailing
‘Judgment rate”’.3°*

6-122 Period of pre-award interest. Section 49(3) also gives the tribunal a
discretion as to the dates from which interest is to be paid and with what rests.
Interest may be awarded under this subsection up to the date of payment of any
sum which is claimed in the arbitration or on any amount awarded up to the date
of the award, whichever is the earlier. Interest will usually be awarded from the
date when the sum paid or awarded originally fell due and the cause of action in
respect of that sum arose.*°°

6-123 Period of post-award interest. Subsection 49(4) gives the tribunal a

discretion to award interest from the date of its award, or any later date, until
payment on the outstanding amount of any award. It may also award rests in

360 See, e.g. the LCIA Rules, Art.26.6.

°°! See para.237 of the DAC report.
°°? See the discussion in Sempra Metals Ltd (formerly Metallgesellschaft Lid) v Inland Revenue
Commissioners [2007] UKHL 34.
°° As to the rate of interest to be applied generally, see Tute & Lyle Food and Distribution Ltd v Greater
London Council [1981] 3 All E.R. 716.
°° 8% per annum as at July 2007. Section 49(4) has introduced a substantive change by giving the
tribunal considerably more discretion with regard to post-award interest. Its predecessor, s.20 of the
Arbitration Act 1950, specifically provided for an award to carry interest at the same rate as a
judgment debt unless the award directed otherwise. Thus there was an entitlement to post-award
interest where the award itself was silent on the issue. The tribunal could direct that no post-award
interest was payable, but it did not have power to give post-award interest at any rate other than that
applicable to a judgment debt: see Timber Shipping Co SA v London and Overseas Freighters Lid
[1972] A.C. 1 at [21]. There is apparently no such restriction as to the rate to be applied under
s.49(4).
°° BP Chemicals Lid v Kingdom Engineering (Fife) Ltd \1994] 2 Lloyd’s Rep. 373.
 Relief and Remedies Available to the Tribunal 319

interest during this period. The subsection makes clear that the power extends to
awarding interest on awards in respect of interest and/or costs.3°

Power should normally be exercised. The tribunal should normally 6-124

exercise its power to award interest in the absence of a good reason not to.*°7 As
Lord Denning M.R. stated in Panchaud v Pagnan: “In a commercial transaction
if the plaintiff has been out of his money for a period, the usual order is that the
defendant should pay interest for the time for which the sum has been out-
standing. No exception should be made except for good reason.’’*°*

Effect of delay. Delay in bringing a claim is not of itself a good reason for 6-125
refusing interest unless the delay is exceptional and inexcusable.*°?
3”

Award silent on interest. Ifa party has sought interest on sums payable or 6-126
found to be due but the award is silent on the subject, it may be susceptible to
challenge on the grounds of serious irregularity under s.68(2)(d) of the Arbitration
Act 1996 for failing to deal with an issue put to the tribunal.*’’ Where the
omission is due to a clerical mistake or error arising from an accidental slip or
omission, it may be corrected by the tribunal under s.57(3)(a) of the Arbitration
Act 1996.°”* However, it will usually be more appropriate to exercise the power
under s.57(3)(b) to make an additional award in relation to interest.*”

Other power to award interest. Section 49(6) specifically preserves any 6-127
power of the tribunal to award interest other than under the statute. This is a
saving provision, such that the other power to award interest will not be ousted by
the statutory regime, but nor does the existence of the other power preclude the

366 The liability to pay interest under s.49 is a liability in debt and can be enforced as such, with interest
accruing on the unpaid debt: Coastal States Trading (UK) Ltd v Mebro Mineraloelhandelsgesellschaft
GmbH [1986] 1 Lloyd’s Rep. 465. Further, s.49 has removed a possible anomaly under the earlier
statute whereby, as the entitlement to post-award interest arose by statute rather than under the
award, it may not have been recoverable when secking to enforce the award in another jurisdiction
under the New York Convention.
367 Wildhandel N.V. v Tucker and Cross [1976] 1 Lloyd’s Rep. 341.
368 11974] 1 Lloyd’s Rep. 394 at 411.
369-370 Panchaud v Pagnan [1974] 1 Lloyd’s Rep. 394. In Antclizo Shipping Corporation v Food
Corporation ofIndia (The “‘Antclizo”’) (No.2) [1991] 2 Lloyd’s Rep. 485 arbitrators were appointed
in 1975 to hear disputes under a charterparty. There followed a prolonged delay and both arbitrators
died. Two fresh arbitrators and an umpire were appointed in July 1989. The umpire found that the
failure to pursue the arbitration for eight years from 1975 to 1983 was due in part to the pendency
of other arbitrations between the same parties raising similar issues. However, there was no
agreement to “freeze” the arbitration. He found that the delay was an inordinate and unreasonable
failure to prosecute the claim and declined to award interest for those eight years. The court would
not interfere, holding that he was entitled to take an overall view of the position in exercising his
discretion.
371 See paras 8-093 et seq.. below.
below.
372 See Pancommerce SA v Veecheema BV [1983] 2 Lloyd’s Rep. 304 and see para.6—167
573 See para.6-171 below.
 320 The Award

exercise of the powers under the remaining provisions of s.49.°”* In practice such
“other”? power will most commonly arise where there is an express or implied
contractual right to interest.*’° Various sets of arbitration rules contain such a
power.*”°

6-128 Overriding contractual right to interest. Subject to what the parties

may have agreed shall be the tribunal’s powers as to interest, under s.49 the
tribunal has a discretion whether to exercise its power to award interest, although
as set out in para.6—124 the power should normally be exercised. If, however, there
is a contractual right to interest then it must be awarded. The contractual right
may be to receive compound interest and, if so, this must be awarded.*””

5. Costs

(a) Description of costs

6-129 Terminology used. A distinction has traditionally been drawn between

“costs of the reference” and “‘costs of the award”’, the former being in broad terms
the costs incurred by the parties in putting their respective cases in the arbitration
and the latter being the administration costs of the reference, including the
tribunal’s fees and expenses.*”* These two types of costs were referred to in the
previous legislation’”” and the distinction was often relevant in practice because
tribunals would commonly award a party the costs of the reference to be agreed or
“‘taxed’’58° whereas the costs of the award would be awarded as a lump sum.**!
This terminology has been replaced in s.59 of the Arbitration Act 1996 which
refers only to the “costs of the arbitration”, which comprise both costs of the
reference and of the award. All these terms will nevertheless be considered below
as both the parties and tribunals may still find it convenient to distinguish between
them in the context of how recoverable costs are to be dealt with.

574 Lesotho Highlands Development Authority v Impreglio SpA [2005] UKHL 43; [2006] 1 A.C. 221 at
[38].
* Mustill & Boyd p.393 identify a number of other circumstances which could give rise to some
“other power” to award interest. These are (1) interest as special damages for the late payment of
money, (2) the equitable right to interest in relation to profits arising from a breach of fiduciary duty,
and (3) where the claim is one which falls within the Admiralty jurisdiction of the High Court but
is referred to arbitration.
576 See for example LCIA Rules, Art.26.6.
7” National Bank of Greece SA v Pinios Shipping Co (No.1) and George Dionysios Tsitsilianis (The
“Maira”) (No.3) [1990] 1 Lloyd’s Rep. 225.
*® Many of the administrative costs such as room hire and shorthand writer fees will have been paid
in advance by the parties jointly or by one of them but are then recoverable following the tribunal’s
award on costs.
*” Section 18(1) of the Arbitration Act 1950 referred to “costs of the reference and award” and s.18(4)
of the Arbitration Act 1950 to “costs of the reference’’.
**° i.e. assessed by the tribunal or by a Taxing Master at court, now known as a “costs judge”: CPR Pt
43.2.
**! Government of Ceylon v Chandris [1963] 2 Q.B. 327 at 333.
 Costs 321

Costs of the arbitration. These are defined in s.59(1) of the Arbitration 6-130
Act; 1996-as:

(a) the arbitrators’ fees and expenses,

(b) the fees and expenses of any arbitral institution concerned, and

(c) the legal or other costs of the parties.**?

It will be seen that broadly speaking (a) and (b) fall within what have previously
been termed the costs of the award and (c) comprise the costs of the reference.
Section 59(2) makes clear that the costs of the arbitration also include the costs of
or incidental to any proceedings to determine the amount of the recoverable costs
of the arbitration, such as the costs of any application to court under s.63(4) to
determine the recoverable costs.*** Presumably they would also include the costs
of negotiating and settling the terms of any submission to arbitration.***

Costs of the reference. These comprise all costs properly and reasonably 6-131
incurred by either party*** in preparing and presenting their case in the arbitra-
tion, including of course costs incurred in rebutting the case put forward by the
other party. They include the costs of legal or lay**° representation,**’ expenses of
fact witnesses and fees of expert witnesses or advisers retained to assist one or
other party with the preparation of their case.*** They presumably also include the
costs of negotiating and settling the terms of the submission to arbitration.**’
Conditional fee agreements may be entered into in relation to arbitration proceed-
ings,*”’ and subject to meeting the requirement of reasonableness pursuant to

582 This includes costs of a lay representative in arbitration proceedings: Piper Double Glazing Lid v D
C Contracts 31 Con. L.R. 149.
383 But not the costs of other arbitration applications unrelated to the determination of recoverable
costs.
384 Which are costs of the reference: Re Autothreptic Steam Boiler Co and Townsend, Hook & Co (1888)
21 Q.B.D. 182.
385 Re Autothreptic Steam Boiler Co and Townsend, Hook & Co (1888) 21 Q.B.D. 182.
386 The costs of lay representatives are recoverable: see Piper Double Glazing Ltd v DC Contracts 31
Con LAR’ 149.
387 The costs of in-house counsel and a party’s management staff are not usually recoverable on the
basis that their salaries would be incurred in any event and are not therefore an additional cost
attributable to the arbitration. The position may be different where a party can show that they have
recruited additional resources specifically to deal with the arbitration.
388 Experts will usually charge professional fees for their services as an expert witness together with out
of pocket expenses. Fact witnesses are not usually remunerated for time spent giving evidence
although if they are not in the employment of the party calling them it may be appropriate to pay
for lost earnings as a result of their preparation and attendance at the hearing. Any such payments
should be limited to reasonable compensation for losses actually incurred, so that they cannot be
characterized as “buying” the evidence to be given which might undermine its credibility. There
is no objection to paying the reasonably incurred out of pocket expenses of fact witnesses.
389 See para.6—130.
3% Protech Projects Construction (Pty) Ltd v Al-Kharafi & Sons |2005] EWHC 2165; Bevan Ashford v
Geoff Yeandle (Contractors) Ltd (in liquidation) {1998} 3 All E.R. 238. In the latter case Sir Richard
Scott V.C. decided that although a conditional fee agreement relating to arbitration proceedings
does not fall within s.58 of the Courts and Legal Services Act 1990 (inserted by s.27(1) of the Access
to Justice Act 1999) and the regulauons made under it, nevertheless if such an agreement complies
with those provisions then it would not be contrary to public policy and would be enforceable.
 BZ The Award

5.63(5) of the Arbitration Act 1996 or falling within the parties’ agreement as to
recoverable costs pursuant to s.63(1), the appropriate uplift may also form part of
the costs of the reference.*”!
The term ‘‘costs of the reference” is sometimes used to mean the costs
discussed above together with the costs of the award, in other words all costs
incurred in connection with the arbitration.*’* However, even under the previous
legislation a distinction was drawn between the two types of costs, and this broader
meaning of the term “‘costs of the reference” should no longer be used, partic-
ularly in the light of the statutory definition of “‘costs of the arbitration” in s.59
of the Arbitration Act 1996.

6-132 Costs of the award. During the course of an arbitration, costs will arise
which relate to the setting up and administration of the arbitration. These are
termed the “‘costs of the award” and include, for example, the tribunal’s fees and
expenses,*”* the fees and expenses of any arbitral institution concerned, the cost of
hiring rooms for hearings, shorthand writers’ fees*’* and translators’ fees. The cost
of photocopying documents for use by the tribunal at the hearing is also a cost of
the award as are any special expenses incurred in connection with the arbitration
by the tribunal with the consent of the parties, such as the fees and expenses of a
secretarial service retained by the tribunal to assist it with the case.*”> The fees and
expenses of an expert or legal adviser or assessor appointed under s.37 of the
Arbitration Act 1996 are treated as expenses of the arbitrators and are therefore
also costs of the award.

(b) Jurisdiction and manner of awarding costs

6-133 Power to award costs. Section 61(1) of the Arbitration Act 1996 provides
that: “The tribunal may make an award allocating the costs of the arbitration as
between the parties, subject to any agreement of the parties.” Accordingly, the
tribunal has a discretion to award the costs of the arbitration as between the
parties, although this power is subject to anything that the parties have agreed and
is also subject to the general principle set out in s.61(2) that costs follow the
event.°

" Protech Projects Construction (Pty) Ltd » Al-Kharafi & Sons [2005] EWHC 2165. It would seem
therefore that foreign counsel could recover on the basis of fee arrangements that would not be
permitted under English law, provided they are considered reasonable or fall within what the parties
have agreed should be recoverable costs.
*% Re Walker & Brown (1882) 9 Q.B.D. 434.
° Government of Ceylon v Chandris [1963] 2 QB. 327 at 333.
"The parties should seek to agree in advance whether transcripts of the hearing will be required. The
tribunal may also have views on this. These costs should be treated as costs of the award (rather than
costs of the reference) even where only one of the parties has arranged to receive transcripts,
particularly if the tribunal has also received them.
*°5 See para.5—173 above.
6 See para.6-138 below.
 Costs 323

Agreement between the parties as to costs. The parties are in 6-134

general at liberty to agree who shall pay the costs and on what principles costs shall
be awarded.*”’ The parties do not however have a completely unfettered right to
agree how the costs of the arbitration shall be allocated between them. Section 60
of the Arbitration Act 1996 provides that: ‘‘An agreement which has the effect that
a party is to pay the whole or part of the costs ofthe arbitration in any event is only
valid if made after the dispute in question has arisen.” So a provision in an
agreement to refer future disputes to arbitration to the effect that the parties will
each bear their own costs, or that one party will bear his own costs in any event,
or that one party will bear all the costs of the arbitration, is void. Such a provision
can only be valid in an agreement to submit an existing dispute to arbitration or
if it is confirmed or validated after the dispute has arisen. However an agreement
that the losing party will pay the costs of the arbitration would not be void, as it
is not an agreement that a particular party will pay the costs in any event.
Further, unless otherwise agreed, the parties’ obligations to each other as 6-135
regards costs relate only to ‘‘recoverable costs” in the arbitration.*”* Section 62 of
the Arbitration Act 1996 provides that: ‘Unless the parties otherwise agree, any
obligation under an agreement between them as to how the costs of the arbitration
are to be borne, or under an award allocating the costs of the arbitration, extends
only to such costs as are recoverable.”

Exercise of the discretion. The court will not interfere with the tribunal’s 6-136
exercise of its discretion to award costs merely because the court would itself have
exercised that discretion differently.*°? The tribunal must exercise its discretion,
however, and must not disable itself from doing so by adopting an invariable rule
in relation to certain costs.t?°

Exercise of discretion. Prior to the Arbitration Act 1996 the courts had 6-137
held that in exercising its discretion the tribunal must act judicially, which means
in the same manner as would be adopted by a judge in a court of law.*°'
There is, however, now clear guidance in the Arbitration Act 1996 as to the
tribunal’s powers with regard to the award of costs."°* It has been said that as a
result it is no longer helpful to ask whether an arbitrator has acted judicially.*”°
The focus of inquiry will be on compliance with the statutory provisions and any
additional powers that the parties agree the tribunal shall have with regard to the
award of costs. Where the Crown is a party to the arbitration, the discretion as to

397 Section 61 of the Arbitration Act 1996. Arbitration rules often also make provision for the approach
to costs: see for example Art.40 of the UNCITRAL Rules and Art.28.2 of the LCIA Rules.
3°8 See para.6—-141 below.
399 Channel Island Ferries Ltd v Cenargo Navigation Ltd (“The Rozel’’) [1994] 2 Lloyd’s Rep. 161.
400 James Allen (Liverpool) Ltd v London Export Corp Ltd [1982] 2 Lloyd’s Rep. 632.
[1992] D
' Everglade Maritime Inc v Schiffahrtsgesellschaft Detlef Von Appen GmbH (The “Maria”’)
3
Lloyd’s Rep. 167; [1993] 1 W.L.R. 33; [1992] 3 All E.R. 851 (Judge Diamond Q.C.); [1993]
2 Lloyd's
W.L.R. 176 (Court of Appeal); President of India v Jadranska Solbodna Plovidba [1992]
84.
Rep. 274; Metro-Cammell Hong Kong Lid v FKI Engineering Ltd 77 B.L.R.
402 Section 61(2) of the Arbitration Act 1996; see para.6—138 below.
403 Fence Gate Limited v NEL Construction Limited [2002] C.LL.L. 1817.
 324 The Award

costs is in general to be exercised in the same way as in proceedings between

subjects.1*

6-138 Costs follow the event. Section 61(2) of the Arbitration Act 1996 provides
that:

“Unless the parties otherwise agree, the tribunal shall award costs on the general
principle that costs should follow the event except where it appears to the
tribunal that in the circumstances this is not appropriate in relation to the whole
or part of the costs.”

Usually, therefore, costs will ‘follow the event” so that the successful party will be
awarded his costs.*°° If the tribunal is going to depart from this it should set out
clearly its reasons for doing so,*”° and its decision must be justified as the exercise
of a discretion in accordance with the 1996 Act.*”” If the tribunal fails to appreciate
the result of its award, such that it purports to award costs on the principle that
they follow the event but in fact awards them to the loser, the decision will be
vulnerable to challenge.*°*

6-139 What constitutes the event? Where one of the parties is the clear winner
on all issues it will be a straightforward task to award costs in a way that follows
the event. In many cases however parties will succeed on some claims but not on
others, and win on some of the contested issues and arguments but lose on others.
How then is a tribunal to go about determining the relevant event for these
purposes? The answer is that in most cases the tribunal will look at the overall
result to determine which party can be said to have won the arbitration. That does
not involve an issue by issue analysis, but rather requires the tribunal to decide
which party overall can be said to have succeeded in the reference. Of course it

*°* Section 7 of the Administration of Justice (Miscellaneous Provisions) Act 1933. The section
contains savings for special cases, including cases where the Crown is “‘required” to be made a
party.
405
For cases under the old law see Semco Salvage & Marine Pte Ltd v Lancer Navigation Co Ltd (The
“Nagasaki Spirit”) [1996] 1 Lloyd’s Rep. 449; Channel Island Ferries Ltd v Cenargo Navigation Ltd
(“The Rozel”) [1994] 2 Lloyd’s Rep. 161; The ‘Erich Schroeder” [1974] 1 Lloyd’s Rep. 192; Smeaton
Hanscomb & Co Lid v Sassoon/Setty, Son & Co (No.2) {1953] 1 W.L.R. 1481; Blue Horizon
Shipping Co SA v ED & F Man Ltd (The “Aghios Nicolaos’’) {1980] 1 Lloyd’s Rep. 17; Heaven &
Kesterton Lid v Etabhissements Francois Albiac et Cie [1956] 2 Lloyd’s Rep. 316.
406
Lewis v Haverfordwest Rural District Council [1953] 1 W.L.R. 1486; Smeaton Hanscomb & Co Ltd v
Sassoon/Setty, Son & Co (No.2) [1953] 1 W.L.R. 1481. In the absence of agreement to dispense
with them, the tribunal is under an obligation to provide reasons in any event, see para.6—029 above.
See also para.6-144 for the type of situation where departure from the normal approach may be
appropriate.
407
Ghangbola v Smith & Sherriff
Ltd (1998] 3 All E.R. 730. In that case the arbitrator took into account
matters which he ought to have given the parties an opportunity to address before making his award
as to costs but failed to do so and thereby breached his duty under s.33(1)(a); see further
para.5—0)50.
408
Newfield Construction Lid v Tomlinson [2004] EWHC 3051; 97 Con. L.R. 148 at [21]. The challenge
was upheld under s.68 of the Arbitration Act 1996 but the award was also successfully appealed on
a point of law under s.69 of the Arbitration Act 1996.
 Costs 325

may be that neither party can be said to have ‘“‘won’’, in which case it may be
appropriate to order that each party shall bear its own costs. Often when consider-
ing “the event” a tribunal will consider, at least in broad terms, on which of its
claims a party has succeeded and will adjust the proportion of recoverable costs
awarded to reflect the fact that the other party has defeated certain claims or
indeed won on other claims it has brought.*°? This is not an exact science but in
broad terms a tribunal should start from the premise that the successful party
should recover its costs and then make appropriate adjustments to reflect what the
tribunal considers a fair allocation of costs in light of the overall result and state
the reasons for making them.

Review by the court. As stated above,*"” where the tribunal has exercised its 6-140
discretion as to costs, the court will not seek to replace that decision with its own,
even if the court would have exercised the discretion in a different way. The court
will, however, review whether the discretion has been exercised properly in
accordance with the principles set out in the Arbitration Act 1996 in so far as they
apply.
The court’s review of an order as to costs will usually be founded on an error
of lawt'' following an application brought under s.69 of the Arbitration Act
1996.*'* Alternatively, and depending on the particular circumstances, it may be
possible to challenge the costs order on the grounds of serious irregularity,
provided the matters for complaint fall within the categories set out in s.68 of the
Arbitration Act 1996.*!* The “central principles” to be applied were summarised
in Newfield Construction Ltd v Tomlinson*"* as follows:

@ For the complaint about a costs award to arise in the form of an appeal (under
s.69 of the Act), it must be one that can be expressed in the form of a clear
question of law.

@ Ifthe complaint is that the decision the tribunal arrived at was wrong because
of an error in its appreciation or understanding of the material used as the
basis of the award, it may amount to a serious irregularity (under s.68 of the
Act). However, it does not give rise to a question of law.

409 See for example Rotary Watches Ltd v Rotary Watches (USA) Inc [2004] W.L. 3200214.
419 At para.6—-136 above.
411 Donald Campbell & Co Ltd v Pollak (1927] A.C. 732; President of India v Jadranska Slobodna
Plovidba [1992] 2 Lloyd’s Rep. 274; Fence Gate Lid v NEL Construction Ltd [2002] C.LL.L.
1817.
+12 If the parties have agreed to dispense with reasons, there can be no appeal: s.69(1) of the Arbitration
Act 1996. Nor can the tribunal’s exercise of its discretion to award costs be challenged in
proceedings by the tribunal to recover its costs: see Cohen v Baram [1994] 2 Lloyd’s Rep. 138.
413 See Ghangbola v Smith & Sherriff Lid [1998] 3 All E.R. 730; Fence Gate Ltd v NEL Construction
Ltd (2001) Con. L.R. 41; Nemfield Construction Ltd » Tomlinson [2004] EWHC 3051; 97 Con. L.R.
148. See also para.8—098 below.
414 12004] EWHC 3051; 97 Con. L.R. 148 at [27]. The principles were drawn from the decision of His
Honour Judge Thornton QC. in Fence Gate Lid v NEL Construction Ltd (2001) Con. L.R. 41 at
[37]-{40].
 326 The Award

® The tribunal must not take into account matters which the law or the powers
given to it by the parties or the general law preclude it from acting on and,
conversely, it must not fail to take account of, and give effect to matters that
the law requires it to take account of. Moreover, since the tribunal must
observe and give effect to the law, the overall discretionary exercise must not
be perverse nor one that a reasonable tribunal properly directing itself could
not have reached.
@ A question of law can arise, if it is contended that the tribunal misdirected
itself by taking into account factors which it should not have done or by
failing to take into account factors it should have done.

(c) Recoverable costs

6-141 Determining the recoverable costs. In contrast to s.61, which is

concerned with the allocation of recoverable costs, ss.63 and 64 of the Arbitration
Act 1996 deal respectively with the recoverable costs of the arbitration and the
recoverable fees and expenses of the tribunal. Section 63 provides that the parties
are free to agree what costs of the arbitration are recoverable, but in the absence
of agreement certain default provisions apply. These default provisions are that the
tribunal may determine the recoverable costs of the arbitration on such basis as it
thinks fit and, if it does so, the tribunal must specify the basis on which it has
acted, the items of recoverable costs and the amount referable to each.*'> If the
tribunal does not determine the recoverable costs, either party may apply to the
court which will either determine them on such basis as it thinks fit, or order that
they shall be determined by such means and upon such terms as it may spec-
ive”

6-142 The recoverable fees and expenses of the tribunal. Section 64 of

the Arbitration Act 1996 provides that unless otherwise agreed in writing*!’ by the
parties, the recoverable costs of the arbitration include only such reasonable fees
and expenses of the tribunal as are appropriate in the circumstances.*'® If there is
any dispute about this, and the matter is not already before the court on an
application under s.63(4),*'” either party may apply to the court for it to determine
the matter or order that it be determined by such means and upon such terms as
the court may specify.**? Although this establishes a means of determining what

5 Section 63(3) of the Arbitration Act 1996; see also para.6—150 below.
"1 Section 63(4) of the Arbitration Act 1996: see also para.6—153 below.
*!” The requirement for any agreement between the parties to be “in w riting”’ stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
*I® Section 64(1) of the Arbitration Act 1996. This is, of course, subject to any order of the court under
ss.24(4) or 25(3)(b) as to entitlement to fees or expenses of an arbitrator in case of removal or
resignation: see s.64(3) of the Arbitration Act 1996.
See para.6—-141 above.
° Section 64(2) of the Arbitration Act 1996; see also para.6—153 below.
 Costs 327

fees and expenses of the tribunal are recoverable as between the parties, it does not
affect any right of the tribunal to payment of its fees and expenses.*?!

How much is recoverable? Section 63(5)(a) of the Arbitration Act 1996 6-143
sets out the basis for assessing what costs are recoverable, namely that “there shall
be allowed a reasonable amount in respect of all costs reasonably incurred’’, This
reflects the test applied under CPR Pt 44 r.4 for the standard basis of assessment
of costs.*** Section 63(5)(b) confirms that any doubt as to whether costs were
reasonable or reasonably incurred is to be resolved in favour of the paying party.
This is subject to the tribunal determining that some other basis should be
adopted, so that in a suitable case the test might be amended to reflect the
indemnity basis of assessment of costs under CPR Pt 44 r.4, i.e. to resolve any
doubt about whether the costs were reasonable or reasonably incurred in favour of
the receiving party. The practice however in many international arbitrations where
the seat is London 1s rather more flexible. It is not uncommon for the successful
party to be awarded more than would be recoverable under the standard basis of
costs and tribunals often reach this conclusion without distinguishing between the
standard and indemnity bases of awarding costs but rather focussing on what is
considered reasonable in all the circumstances.

Determining recoverable costs on some other basis. As stated 6-144

above, the basis set out above under s.63(5) of the Arbitration Act 1996 is subject
to the tribunal or court “determining otherwise”. This they might do where, for
example, the successful party has grossly exaggerated his claim, or where sub-
stantial time has been spent on unnecessary evidence or on discrete issues of fact
on which that party was unsuccessful. This is especially so 1f the successful party’s
conduct has been unreasonable. Similarly, the tribunal or court may decline to
award a party the costs ofa procedural hearing or step in the reference prior to the
substantive hearing on the grounds that the party’s conduct in relation to that
aspect of the case was unreasonable, even though he may ultimately succeed in the
arbitration. However, it is not appropriate to refuse a successful party the entirety
of his costs solely on the ground that he has recovered significantly less than
claimed.**?

The right to payment of fees, etc. Section 63(7) of the Arbitration Act 6-145
1996 makes clear that the right to payment of fees and expenses of arbitrators,
experts, institutions and the like is not affected by whether those fees and expenses
are recoverable as between the parties as costs of the arbitration. Similarly, the

*21 Section 64(4) of the Arbitration Act 1996; see also para.6—145.
#22 Although CPR Pt 44 r.4 imposes an additional requirement that the costs are proportionate to the
matters in issue. uf
423 Channel Island Ferries Ltd v Cenargo Navigation Lid (“The Rozel”) [1994] 2 Lloyd’s Rep. 161; Lemis
Emanuel and Son Ltd v Sammut [1959] 2 Lloyd’s Rep. 629. See also Rosen & Co v Dowley and Selby
[1943] 2 All E.R. 172.
 328 The Award

court’s powers to determine whether the tribunal’s fees and expenses are recover-
able does not affect their right to payment.*”#

6-146 Payment of costs by a third party. The court may in some circum-
stances order that the costs of an action be paid by a person who is not a party to
that action.*?° A tribunal has no jurisdiction to do so.*”°

6-147 Power to limit recoverable costs. One of the more innovative provisions
of the Arbitration Act 1996 is s.65, which provides that, unless otherwise agreed
by the parties, the tribunal may direct that the recoverable costs of the arbitration,
or of any part of the arbitral proceedings, shall be limited to a specified amount.**’
Any direction under this section may be made or varied at any stage, but this must
be done sufficiently in advance of the incurring of costs to which it relates, or the
taking of any steps in the proceedings which may be affected by it, for the limit to
be taken into account.*”*
This provision was introduced by the Arbitration Act 199 6129 and gives the
tribunal power to limit the amount of recoverable costs in advance. The intention
was that this power would enable tribunals to dissuade the parties from incurring
unnecessary costs by making clear beforehand that above the stated limit they will
not be recoverable from the other side, even if a party is successful in relation to
the matters to which the costs relate.**° It does not of course prevent parties
incurring those costs anyway if they so choose, but they will do so at their own
expense. The tribunal will usually wish to give the parties an opportunity to make
representations in relation to such a proposed order, but it is not necessary for the
tribunal to give reasons explaining their decision to impose a cap on recoverable
costs under the section.**! Any order may be varied pursuant to s.65(2) of the
Arbitration Act 1996 and that includes the power to remove altogether any
previously imposed cap.**?

6-148 Requirement for a specified amount. Under s.65(1) the recoverable

costs may be limited to a “specified amount’. The tribunal is not therefore
entitled to order a cap limited to “reasonable costs” or to “those costs reasonably
incurred”.

** Section 64(4) of the Arbitration Act 1996. The tribunal’s fees and expenses may, however, be
challenged under s.28 of the Arbitration Act 1996: see paras 4-059 and 7-212 et seg. above.
% Aiden Shipping Ltd v Interbulk Lid (The “Vimeira”) [1986] A.C. 965 [1986] 2 All E.R. 409, HL;
GERSPtT a Sar2s
% Maritime Transport Overseas GmbH v Unitramp (The “Antaios”’) [1981] 2 Lloyd’s Rep. 284; The
“Takamine” {1980] 2 Lloyd’s Rep. 205. Thus s.61(1) of the Arbitration Act 1996 empowers the
tribunal to award costs of the arbitration ‘‘as between the parties”.
7 Section 65(1) of the Arbitration Act 1996.
#8 Section 65(2) of the Arbitration Act 1996.
*" There is no equivalent provision in the earlier statutes or in the Model Law.
8° See further para.272 of the DAC report.
“" Home of Homes Ltd v Hammersmith and Fulham LBC [2003] EWHC 807; 92 Const. L.R. 48.
*? Home of Homes Ltd v Hammersmith and Fulham LBC [2003] EWHC 807; 92 Const. L.R. 48.
 Costs 329

Is it being used? The aim of s.65 is undoubtedly worthwhile. It presents the 6-149
tribunal with a real opportunity to control the costs of an arbitration because a
party will in many cases be reluctant to incur costs that will not be recoverable
even if that party wins. There is of course usually an element ofirrecoverable costs
in arbitrations, but the exercise by the tribunal of its power under s.65 may focus
the minds of the parties on this. There have been few reported decisions on the
exercise of the power under s.65 but when given the opportunity the court has
been supportive ofits use.** This may reflect the potential controversy ofan order
being made, but there is no doubt that there are cases where the power can be used
to good effect, for example where future costs are likely to become as significant
as, or outweigh, the sums at stake and this is not considered by the tribunal to be
justified in all the circumstances. In due course there may well develop a body of
case law on issues such as the circumstances in which an order should be made and
how long is “sufficiently in advance . . . for the limit to be taken into account”.**+
For the time being it remains an under-used but potentially very useful addition
to the tribunal’s powers, particularly in helping it to comply with the duty to avoid
unnecessary expense under s.33(1)(b) of the Arbitration Act 1996.4%>

(d) Determination of costs by the tribunal

Power to determine recoverable costs. As stated above,*° under 6-150

s.63(3) of the Arbitration Act 1996 the tribunal may determine the recoverable
costs of the arbitration on such basis as it thinks fit. When doing so it must specify
the basis adopted, the items of recoverable cost and the amount recoverable for
each, and must assess the amount which 1s to be paid and for what. In the absence
of specific agreement there is no obligation on the tribunal to determine the
recoverable costs and if it declines to do so*’’ the parties will need either to agree
the amount of costs or to pursue an application to the court.*** In these circum-
stances the tribunal’s award may still deal with who is to pay the costs and for
what, but not the amount that is to be paid. If the tribunal does determine the
recoverable costs of the arbitration, its assessment of the amount to be paid forms

83 Home of Homes Ltd v Hammersmith and Fulham LBC [2003] EWHC 807; 92 Const. L.R. 48. The
judge commended the arbitrator’s attempts to impose a limit on recoverable costs pursuant to s.65
of the Arbitration Act 1996 several times in the course of his judgment.
84 In Home of Homes Ltd v Hammersmith and Fulham LBC [2003] EWHC 807, 92 Const. L.R. 48 an
order under s.65(1) of the Arbitration Act 1996 was made 10 working days before the commence-
ment of the substantive hearing and purportedly covered not just the hearing itself but also costs
incurred during a period prior to the making of the order. The arbitrator subsequently rescinded
the order on the basis of legal advice that this was too late a stage at which to make such an
order.
85 See para.5—032 above.
#6 At para.6-141 above. avd
+87 Unless there is good reason not to the tribunal should deal with costs rather than leaving it to the
court: see para.6—-156 below.
88 See para.6—-153 below.
 330 The Award

part of the award and is binding on the parties unless and until the award is set
aside.*?

6-151 Independent judgment. Where the tribunal determines the recoverable

costs of the arbitration, it must apply its own independent mind and judgment to
the amounts claimed in order to be satisfied that they are of a reasonable amount
and were reasonably incurred.*°

6-152 Tribunal’s own fees and expenses. The tribunal’s power under s.63(3)
of the Arbitration Act 1996 to determine the recoverable costs of the arbitration,
includes the power to determine the extent to which its own fees and expenses are
recoverable, and to include these as part of the award.**' This is subject to any
agreement between the parties pursuant to s.63(1) of the Arbitration Act 1996 on
the matter. However, it would obviously be inappropriate for the tribunal to have
the last word on whether their fees and expenses are reasonable and therefore
recoverable. Unless the fees and expenses of the tribunal have been agreed in
advance,**” any party may therefore apply to the court to determine what fees and
expenses are recoverable as costs of the arbitration.** The court may determine
the matter itself*** or may decide the means and terms on which they are to be
determined.**

(e) Determination of costs by the court

6-153 Application to court. If the tribunal does not determine the recoverable
costs of the arbitration the court has jurisdiction to do so or to order the means
and terms upon which they shall be determined.**° This is of course subject to the
parties having already agreed the recoverable costs under s.63(1) of the Arbitration
Act 1996. If they are to be determined by the court this will be carried out by a
particular type of judge known as a “‘costs judge” who deals with the assessment
of allowable costs.**”

™ Re Gilbert and Wright (1904) 20 T.L.R. 164. This case was decided under a statutory provision
which gave the tribunal power to “tax or settle” costs, but the same reasoning would apply under
the Arbitration Act 1996.
*° Government of Ceylon v Chandris [1963] 1 Lloyd’s Rep. 214. This case was decided under the old
law but the reasoning still applies.
™' The tribunal’s contractual right to be paid is not affected: s.64(4) of the Arbitration Act 1996.
2 See para.4—052 above.
™ Section 64(2) of the Arbitration Act 1996: see para.6—-142 above. The tribunal’s fees and expenses
may also be challenged under s.28 of the Arbitration Act 1996: see paras 4-059 above and 7-212
below.
4 5.64(2)(a).
45 5.64(2)(b).
© Under s.63(4) of the Arbitration Act 1996: see para.7—-210 below. Where the arbitration agreement
requires the tribunal to fix the costs, it must do so rather than leaving it to the court: Morgan v Smith
(1842) 9 M. & W. 427.
“7 For the court’s powers generally see CPR Pts 43-48 and related Practice Direction.
 Costs 331

Scale of costs and basis of determining them. Under the previous

legislation an arbitrator could direct that costs should be assessed or “taxed” in the
High Court, and this carried an implication that they should be assessed on the
High Court scale and not on the County Court scale, even if the amount of the
award was a small one.*** The test under the Arbitration Act 1996 is somewhat
different; it is a question of determining whether the costs are of a reasonable
amount and were reasonably incurred, any doubt being resolved in favour of the
paying party.""’ This is subject to the court (or the tribunal) determining that
some other basis should be adopted, so that in a suitable case the test might be
amended to reflect indemnity costs under CPR Pt 44 r.4, i.e. to resolve any doubt
about whether the costs were reasonable or reasonably incurred in favour of the
receiving party.*°°

(f) Approach to costs

Costs to be “determined if not agreed’’. Perhaps the most frequently 6-155

made order for costs under the previous statutory regime was that they should be
“taxed if not agreed”. This meant that the tribunal was inviting the parties to
reach agreement as to the amount of costs and, failing agreement either to revert
to the tribunal for them to assess the costs**' or to apply to the court for them to
be “taxed”. This terminology is no longer appropriate,” but the equivalent order
would be for costs to be “‘determined if not agreed”. A tribunal may still decline
to determine recoverable costs itself, leaving the parties to agree them or apply to
court for their assessment.*°*

Tribunal determines recoverable costs. The tribunal has power to 6-156

determine the amount of recoverable costs under s.63(3) of the Arbitration Act
1996** and include in the award details of the amounts allowed by it in respect of
costs, and giving a total figure. The tribunal should follow this course unless there
are good reasons not to do so. When there is a dispute over the amount of
recoverable costs, it is an issue in the arbitration which the tribunal should
determine unless there is a particular reason for leaving it to the court.*”°

Lump sum. It was not uncommon under the previous statutory regime for the 6-157
tribunal to award a lump sum in respect of costs of the reference and/or of the
award. So far as the costs of the reference were concerned, the lump sum was

+48 Perkins (HG) v Brent-Shaw [1973] 1 W.L.R. 975.

+49 Section 63(5) of the Arbitration Act 1996: see para.6—143 above.
4° See para.6—-144 above.
451 Under s.18(1) of the Arbitration Act 1950: M/S Alghanim Industries Inc v Skandia International
Insurance Corp [2001] All E.R. (Comm.) 30.
#2 See para.6-155 above.
493 Under s.63(4) of the Arbitration Act 1996.
454 See para.6—-150 above.
55 See para.6-153 for determination by the court.
 332 The Award

normally based on (but less than) the actual costs incurred by the party in whose
favour the award of costs is made, details of these having been obtained by the
tribunal in advance of making its award. The award of a lump sum was allowed
even if that sum was clearly less than would have been allowed on a taxation.**°
However, in view of the requirement in s.63(3)(b) of the Arbitration Act 1996 that
the tribunal specifies the items of recoverable costs and the amount referable to
each, the award of a single lump sum would not now be acceptable.

g) Sealed offers

6-158 What is a sealed offer? A sealed offer has been described as the arbitral
equivalent of making a payment into court.*”’ It will usually be in the form of a
letter*** which is expressed to be “‘without prejudice save as to costs” and will
offer terms for settlement of the arbitration which are open for acceptance for a
stated period.**’ If the offer is accepted that constitutes a settlement of the
arbitration. If it is not accepted it may have an effect on the way in which costs are
dealt with in the award or by the court. The principal difference between a
payment into court and a sealed offer is that a sealed offer does not involve an
actual payment being made unless and until it is accepted.

6-159 Who may make a sealed offer? Following the introduction of the CPR,
a Pt 36 offer is not limited to an offer to settle by a defendant but also covers an
offer to settle by a claimant. If the claimant does better than what he proposed in
his offer then the court may order interest at a high level to be paid by the
defendant on sums found to be due and may order costs to be assessed on an
indemnity basis and to carry interest at a high level.*°° Given the tribunal’s
discretion to award interest and costs under the Arbitration Act 1996*°' there
seems no reason in principle why a tribunal could not adopt a similar approach
when faced with a settlement offer from a claimant that the respondent fails to
beat.

6-160 Effect of sealed offer. In deciding the effect of asealed offer, the question
for a tribunal is whether the successful party has achieved more by rejecting the
offer and going on with the arbitration than he would have achieved if he had
accepted the offer.°* In considering this question the tribunal is limited to a

*° Bradshaw v Air Council [1926] Ch. 329; cf. The “Maria” [1992] 2 Lloyd’s Rep. 167.
*7 Tramountana Armadora SA v Atlantic Shipping Co SA [1978] 1 Lloyd’s Rep. 391; [1978] 2 All E.R.
870 at 876, per Donaldson J.
»* This type of letter is also known as a Calderbank letter after the case of that name: [1975] 3 W.L.R.
586.
*° Usually 21 days, by analogy with CPR Pt 36 r.2.
+69 See CPR Pt 36 r.14(3).
461 See paras 6-115 et seq. and 6-133 et seq.
“°° Tramountana Armadora SA v Atlantic Shipping Co SA [1978] 1 Lloyd’s Rep. 391; [1978] 2 All E.R.
870 at 877, per Donaldson J. If the sealed offer was made by the claimant, the test would be whether
he achieved more than the offer made.
 Effect of an Award 333

comparison of what he has achieved in respect of the principal sum claimed and
interest. It is not entitled to take into account how costs are to be awarded.*® If
the successful party has failed to achieve more by rejecting the offer, the tribunal
should order it to pay both parties’ costs of the arbitration from the date specified
for acceptance of the sealed offer.**

When to inform tribunal of sealed offer. A sealed offer may be given 6-161
to the tribunal for it to open and consider only after it has decided upon the
substantive award. This may avoid the expense of reconvening for a further
hearing to deal with costs, but it does of course mean that the tribunal will know
that some offer has been made, even though it does not know the amount. Rightly
or wrongly, parties are sometimes concerned that this knowledge might colour the
tribunal’s thinking in reaching its decision.*” The alternative, therefore, is to
invite the tribunal to make an award dealing with the substantive issues and to
postpone determining the question of costs pending further submissions and/or
a further hearing. The extent to which such a request will itself suggest the
existence of a sealed offer will depend upon the circumstances of the case and
whether, for example, potentially complex costs issues may not need to be
addressed at all if the tribunal’s decision goes a particular way.

6. EFFECT OF AN AWARD

(a) Effect generally

Effect under statute of an award. Under s.58(1) of the Arbitration Act 6-162
1996*° an award made by the tribunal pursuant to an arbitration agreement is final
and binding both on the parties and on any persons claiming through or under
them, unless otherwise agreed in writing*®’ by the parties. This means that, as
between the parties to the reference and persons claiming through or under them,
the award is conclusive as to the issues with which it deals, unless and until there
is a successful challenge or appeal against the award.** Thus the award itself
creates new rights between the parties, in most cases superseding their previous

463 Everglade Maritime Inc v Schiffahrtsgesellschaft Detlef Von Appen GmbH (The “Maria” L992] 2
Lloyd’s Rep. 167 [1993] 1 W.L.R. 33; [1992] 3 All E.R. 851; [1993] 3 W.L.R. 176, CA.
464 Or, if no date was specified, then from a reasonable time after the offer was made. The equivalent

report.
466 Replacing s.16 of the Arbitration Act 1950. : ia ee , 2 :
467 The requirement for any agreement between the parties to be “in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
the right of
468 Section 58(2) makes clear that the fact the award is fina! and binding does not affect
appeal or challenge.
 334 The Award

rights in relation to the matters referred.*” It is also immediately enforceable and

many awards are implemented without the need for further enforcement proceed-
ings. If, however, a party refuses to comply with the award, enforcement proceed-
ings may be commenced to secure compliance.*”?

6-163 Obligation to perform. Not only is the award final and binding upon the
parties but they are also obliged to perform in accordance with its terms. As stated
by Lord Hobhouse in Associated Electric and Gas Insurance Services Ltd v European
Reinsurance Co of Zurich, “it is an implied term of an arbitration agreement that
the parties agree to perform the award”.*’”! An obligation to similar effect also
appears in many sets of arbitration rules.*”

6-164 When award takes effect. An award takes effect from the date upon which
it is made*’? and the time limits for challenges and appeals against an award relate
to the date of the award rather than its notification.*’* An award does not have to
be performed in order to take effect.

6-165 Award does not transfer property. An award cannot operate as a

transfer of property, whether realty*”, or personalty;*”° 76 it can only declare rights
to the property and (where there is power to order specific performance*”’) direct
that the parties execute appropriate conveyances or otherwise transfer the property
concerned.*”*

(b) Effect on the reference

6-166 Tribunal “functus officio”’. Subject to the exceptions set out below, once
a final award is made, the tribunal becomes “‘functus officio”.*”? This means that

*° per Fletcher-Moulton L.J. in Doleman v Ossett [1912] 3 K.B. 257 at 267; Bremer Oeltransport GmbH
v Dremry (1933) 45 LI. L. Rep. 133; [1933] K.B. 753; FF Bloemen Pty Ltd v Council ofthe City of
Gold Coast [1973] A.C. 127, PC; Stargas SpA v Petredec Ltd (The ‘“‘Sargasso”’) (1994] 1 Lloyd’s Rep.
412. See though para.6-180 below and quaere whether it applies to all awards, including those
where, for example, only declaratory relief is given.
7° See paras 8-002 et seg. below.
12003] UKPC 11 at [9]. See also Purslow v Baily (1704) 2 Ld Raym. 1039; Bremer Oeltransport
GmbH y Drewry [1933] 1 K.B. 753 at 760, 764; Bloemen v Gold Coast City Council [1973] A.C.
IS
+ See, for example, art.26.9 of the LCIA Rules and art.28.6 of the ICC Rules.
*73 See para.6—065 above.
* Section 70(3) of the Arbitration Act 1996.
"> Henry v Kirwan (1859) 9 Ir. C.L. Rep. 459.
76 Hunter v Rice (1812) 15 East 100.
7 See above para.6—122.
8 Johnson v Wilson (1741) Willes 248. In Thorpe v Eyre (1834) 1 A. & E. 926 the terms on which a
party was holding certain land was referred to arbitration, and the award found that the holding was
as tenant. The court subsequently held that the award did not have the effect of transferring the
property in the land or in the growing crops which would pass with the land.
International Petroleum Refining & Supply SDAD Lid v Elpis Finance SA (The ‘‘Faith’’) [1993] 2
Lloyd’s Rep. 408; Fidelitas Shipping Co Ltd v V/o Exportchleb [1966] 1 Q.B. 630.
 Effect of an Award 3 WwWmn

its authority to act ceases and the reference terminates. The tribunal cannot
reopen the case even if fresh evidence comes to light that would have been material
to the decision reached.**° However, the tribunal*®! has power under s.57(3)(a) of
the Arbitration Act 1996 to correct clerical mistakes or errors arising from an
accidental slip or omission or to clarify or remove any ambiguity in the award, and
also power under s.57(3)(b) to make an additional award.**? Save for these situa-
tions, the tribunal has no power to amend or recall an award once it has been made
and notified to the parties unless it is remitted by the court.**

Correction of clerical mistakes, etc. The tribunal has power to correct 6-167
its award in respect of any clerical mistake or error arising from any accidental slip
or omission or to clarify or remove any ambiguity in the award, unless the parties
have agreed in writing*** otherwise.**° Any correction then forms part of the
award.**°® The power covers three distinct situations. The first is a clerical mistake,
a slip of the pen or something of that kind, and the second is an error arising from
an accidental slip or omission, 1.e. something is wrongly put in or left out by
accident.**” The third situation was introduced in the Arbitration Act 1996 and
enables the tribunal to clarify or remove any ambiguity in the award.

Meaning of “accidental slip”. In The “Trade Fortitude’**® Lloyd LJ. 6-168

explained further what was meant by an ‘“‘accidental slip”. He said:

“In one sense, of course, all errors are accidental. You do not make a mistake on
purpose. But here the words take their colour from their context. I do not

*8° Under the previous legislation, the court would remit an award to the tribunal in these circum-
stances but there is no equivalent provision in the 1996 Act: Elektrim SA v Vivendi Universal SA
[2007] EWHC 11 at [76]. It may however be possible to obtain relief from the court under s.68 of
the Arbitration Act 1996 in these circumstances including remission of the award to the tribunal
under s.68(3)(a): see Waller L.J. in Westacre Investments Inc v Fugoimport-S.P.D.R. Holding Co Ltd
[2000] Q.B. 288 at 307; Thyssen Canada Ltd v Mariana Maritime SA [2005] EWHC 219; [2005] 1
Lloyd’s Rep. 640; and paras 8-100 and 8-113 below.
481 The power rests with the tribunal, not the court: Ronly Holdings Lid v JSC Zestafoni G. Nikoladze
Ferroalloy Plant [2004] EWHC 1354.
+82 There have been occasions when parties have sought to rely on s.57(3) to invite the tribunal to revisit
or to correct the substance of its decision on the merits on the basis that the party concerned
believes the decision to be wrong: see for example Hawk Shipping Ltd v Cron Navigation Ltd 2003]
EWHC 1828; C v D [2007] EWHC 1541 at [12]. Such a request is beyond the proper scope of
s.57(3) of the Arbitration Act 1996.
483 Re Calvert & Co and Wyler (1899) 106 L.TJ. 288; Re Stringer and Riley Bros {1901} 1 QB. 105;
Inland Revenue Commissioners v Hunter [1914] 3 K.B. 423. Where an award is set aside or is declared
of no effect by the court, the tribunal’s jurisdiction is not exhausted and it may proceed to make an
award: Hussman (Europe) Ltd v Pharaon [2003] EWCA Civ 266.
48+ The requirement for any agreement between the parties to be “‘in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning,
485 Section 57(3)(a) of the Arbitration Act 1996. This is to the same effect as the court’s power under
CPR Pt 40 r.12. Both are often referred to as the “slip rule”.
486 Section 57(7) of the Arbitration Act 1996.
487 Sutherland &° Co v Hannevig Brothers Lid [1921] 1 K.B. 336. See also Mutual Shipping Corp v
Bayshore Shipping Co Ltd (The ‘“‘Montan”’) {1985] 1 Lloyd’s Rep. 189; [1985] 1 W.L.R. 625.
488 Fygd Corp of India v Marastro Cia Naviera SA (The “Trade Fortitude”) [1986] 2 Lloyd’s Rep.
209.
 336 The Award

suggest that [the section] is limited to clerical mistakes. But, in general, the error
must, in the words of Rowlatt J. in Sutherland & Co v Hannevig Brothers Ltd,
[1921] 1 K.B. 336 at 341, be an error affecting the expression of the tribunal’s
thought, not an error in the thought process itself .. . The fact that the error
. was an elementary error is not sufficient to make it accidental”.

He did not consider an error in subtracting steaming time from time on

demurrage instead of adding it to laytime to be an error arising from “an
accidental slip or omission” within the meaning of s.17 of the Arbitration Act 1950
(replaced by s.57(3)(a) of the Arbitration Act 1996).**°

6-169 Use of the slip rule. Thus, if the tribunal assesses the evidence wrongly or
misconstrues or fails to appreciate the law, it cannot correct the resulting errors in
its award under the slip rule.*”° Nor can it use the slip rule to reconsider a decision
once made.*?'! Where, however, the tribunal has transposed the parties, or has
incorrectly calculated the amount payable under the award as a result of accepting
the evidence of a particular witness but attributing that witness to the wrong party,
it may correct the award under the slip rule.*?” If the correction under the slip rule
reveals other errors, for example in relation to costs, they may also be considered
as “‘arising from”’ the slip and therefore within the tribunal’s power to correct the
award.*”°

6-170 Ambiguity in the award. Section 57(3)(a) of the Arbitration Act 1996 also
provides the tribunal with an ability to correct an award to clarify or remove any
ambiguity in it. This would cover a situation where the tribunal’s reasoning or
decision is not sufficiently clear and clarification or correction is therefore war-
ranted. The courts have drawn a distinction between seeking to effect a change in
the tribunal’s decision and referring a matter to the tribunal for clarification of
what it has decided.*”* An award which contains inadequate rationale or incom-
plete reasons for a decision is likely to be ambiguous and need clarification.*”> The

*° See, though, Gannet Shipping Ltd v Eastrade Commodities Inc [2002] 1 Lloyd’s Rep. 713 where an
error in failing to incorporate an agreed figure for demurrage was held to be an accidental slip. Per
Langley J. at 717: “It was a slip because it was wrong. It was accidental because he did not mean
to use the wrong figure and he misread some manuscript amendments . . . ”
#° Mutual Shipping Corp v Bayshore Shipping Co Ltd (The “Montan’’) [1985] 1 Lloyd’s Rep. 189;
[1985] 1 W.L.R. 625. If the tribunal admits to the mistake, however, this would provide a party with
grounds for an application to the court under s.68(2)(i), although whether such an application would
succeed would depend, amongst other things, on the nature and importance of the mistake and
whether “substantial injustice” has been caused by it: see further para.8—103 below.
*" See by analogy R. v Cripps Ex p. Muldoon {1984] 1 Q.B. 686, a case on RSC Ord.20, 1.11 (now
replaced by CPR Pt 40 r.12).
” Mutual Shipping Corp v Bayshore Shipping Co Lid (The “Montan’’) [1985] 1 Lloyd’s Rep. 189;
[1985] 1 W.L.R. 625. Sir Roger Ormrod referred at 198 to the accidental slip being “the mental
lapse which caused the arbitrator to transpose in his mind the parties”.
* Gannet Shipping Lid 0 Eastrade Commodities Inc [2002] 1 Lloyd’s Rep. 713.
* Al Hadha Trading Co v Tradigrain SA [2002] 2 Lloyd’s Rep. 512, approved in Torch Offshore LLC
v Cable Shipping Inc (2004) EWHC 787.
*° Al Hadha Trading Co v Tradigrain SA 2002] 2 Lloyd’s Rep. 512
 Effect of an Award 337

sub-section may therefore provide a means to request further reasons from the
tribunal or to request reasons where none have previously been given in relation
to a particular issue*’® but only where there is genuine ambiguity.*?”

Power to make an additional award. The tribunal also has power 6-171
under s.57(3)(b) of the Arbitration Act 1996 to make an additional award in respect
of any claim, including a claim for interest or costs.*’® The power is limited to
claims which were presented to the tribunal but omitted from the award.*®? It
cannot therefore provide a means of raising new claims after the award has been
made which were not presented during the course of the reference.°°’ Nor can it
be used to deal with an issue which arises under a claim that has been decided by
an award, even if that issue remains undetermined.~”!

Time limit for application. The powers under s.57(3) of the Arbitration 6-172
Act 1996 are exercisable by the tribunal on its own initiative or on the application
of either party. Any application must be made within 28 days of the date of the
award or such longer period as the parties may agree. This could work harshly in
that the parties may not receive the award until some time after its date*°’ 502 and
securing agreement to extend the period during which an application to the
tribunal may be made may not be easy. The court may however extend time under
s.79 of the Arbitration Act 1996 where substantial injustice would otherwise
result.°°* Where an application has been made within the time limit for a correc-
tion to the award, the tribunal should consider all possible accidental slips,
omissions or ambiguities in the award even if some are not drawn to its attention
until after the time limit has expired.°°*

Time limit for exercise of powers. Subject to the parties agreeing 6-173
otherwise*”’ in writing,°°° any correction of the award must be made within 28
49 41 Hadha Trading Co v Tradigrain SA [2002] 2 Lloyd’s Rep. 512; Torch Offshore LLC v Cable
Shipping Inc [2004] EWHC 787. See also Groundshire v VHE Construction [2001] B.L.R. 395.
7 Benaim (UK) Ltd v Davies Middleton & Davies Ltd 102 Con. L.R. 1.
498 This addition to the previous “‘slip rule” reflects Art.33 of the Model Law which gives the tribunal
both the “slip rule” power and the power to make an additional award.
499 Reserving a decision on costs to a future award is not failing to deal with a claim: Sea Trade Maritime
Corp v Hellenic Mutual War Risks Association (Bermuda) Ltd [2006] EWHC 578.
500 Pirtek (UK) Lid v Deansmood Lid (2005| EWHC 2301; [2005] 2 Lloyd’s Rep. 728.
501 Torch Offshore LLC v Cable Shipping Inc [2004] EWHC 787, World Trade Corp Lid v C Czarmkow
Sugar Ltd [2004] EWHC 2332. This approach to s.57(3)(b) is consistent with the wording used in
the sub-section and prevents any attempt to reopen a decided claim by raising an issue relevant to
that claim. It may however be appropriate in such circumstances to make an application under
s.57(3)(a).
502 By s.54(1) of the Arbitration Act 1996 this is the date on which the award is signed by the arbitrator
or the last of them if there are more than one: see para.6—053 above.
303 Gold Coast Ltd v Naval Gijon SA [2006] EWHC 1044. See para.7-089 below.
504 RC. Pillar & Sons v Edwards [2002] C.1.L.L. 1799.
505 For example in Home ofHomes Ltd v Hammersmith and Fulham L.B.C. [2003] EWHC 807; 92
Const. L.R. 48 the parties agreed that a s.57 application in relation to a partial award should be dealt
with in due course when the tribunal made a further, subsequent award.
506 The requirement for any agreement between the parties to be “in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
 338 The Award

days of the date the application was received by the tribunal or, where the
correction is made by the tribunal on its own initiative, within 28 days of the date
of the award.*°°’ The date upon which the correction is made, or the date upon
which the tribunal determines not to make any correction following an application
under s.57(3) of the Arbitration Act 1996, then becomes the date of the award for
the purposes of s.54(2) of the Arbitration Act 1996.°°° Any additional award must
be made within 56 days of the date of the original award, again subject to the
parties agreeing in writing®’”’ otherwise.°'? Whether a request for an additional
award will defer the date of the award for the purposes of s.54(2) of the Arbitration
Act 1996 will depend upon whether the dispositive parts of the award are affected
by the proposed additional award.*"'

6-174 Notice to the parties. Where the tribunal is minded to exercise its power to
correct the award or to make an additional award, it must give the parties notice
of its intention to do so and give them a reasonable opportunity to make repre-
sentations if they wish to do so.°'? If the tribunal declines to exercise the power
under s.57, a party might in limited circumstances apply to the court to have the
award remitted for the tribunal to reconsider the point.°'*

6-175 Exhaustion of section 57 remedies. No application or appeal can be

made to the court in relation to an award*'* unless any available recourse under
s.57 of the Arbitration Act 1996 for the correction of the award or for the making
of an additional award has been exhausted.*!> Does this mean that that a party
must go back to the tribunal and ask for the award to be corrected even if they
believe it to be unsalvageable or “‘so bad that it [is] not susceptible of any
clarification or further expansion”’? This question was answered in the affirmative
in Sinclair v Woods of Winchester Ltd.°'° This is particularly pertinent where an
award or its effect is ambiguous, as both ss.57(3)(a) and 68(2)(f) expressly use that

7 Section 57(5) of the Arbitration Act 1996.

°°8 McLean Homes South East Ltd v Blackdale Lid {2001] W.L. 1560746. Thus, the time limit of 28 days
pursuant to s.70(3) of the Arbitration Act 1996 for any appeal or challenge to the award will run
from the date of the correction or decision not to correct.
*” The requirement for any agreement between the parties to be “in writing” stems from s.5(1) of the
Arbitration Act 1996, although the section gives the expression a broad meaning.
>!9 Section 57(6) of the Arbitration Act 1996.
°'! McLean Homes South East Ltd v Blackdale Ltd {2001| W.L. 1560746.
>! Section 57(3) of the Arbitration Act 1996.
*!5 Where, for example, there is a clerical error which the tribunal declines to correct but which creates
“uncertainty or ambiguity as to the effect of the award” under s.68(2)(f) of the Arbitration Act 1996
and the other requirements of s.68 are met: see paras 8-098 et seq. below. If the tribunal declines to
make an additional award there is apparently no remedy unless it has failed to “deal with all the
issues that were put to it” under s.68(2)(d) of the Arbitration Act 1996: see para.8—093 below.
°'4 1e, under ss.67, 68 or 69 of the Arbitration Act 1996,
° Section 70(2) of the Arbitration Act 1996 and see para.8—109 below, See also Torch Offshore LLC
v Cable Shipping Inc [2004] 2 Lloyd’s Rep. 446; Omnibridge Consulting Lid v Clearsprings (Manage-
ment) Lid {2004 EWHC 2276.
>! 12005] EWHC 1631 at [38]. The judge in that case discerned a deliberate ploy not to seek correction
of the award as a decision to challenge the award was said to have already been made.
 Effect of an Award 339

term. If the matters complained of are within the scope of s.57 then unless an
application is made to the tribunal within the time limit for exercise of its powers
under s.57 the right to challenge for serious irregularity wil! be lost.5!7 However,
the fact that particular aspects of the award should have been taken up with the
arbitrator pursuant to s.57 will not preclude an application or appeal in respect of
other aspects of the award.*'* Further, if the tribunal refuses the request for
recourse under s.57 or is unable to correct the irregularity the application to the
court can proceed.*!”

(c) Effect on other proceedings between the same parties

Valid award a bar to fresh proceedings. A valid award*”° will create 6-176
an estoppel with regard to the matters with which it deals, preventing either party
from pursuing those matters in a later stage of the arbitration! or in subsequent
proceedings.*** To the extent that a cause ofaction has been decided by the award,
a party will be prevented from asserting or denying, as against the other party, its
existence or non-existence in subsequent proceedings.°** Any attempt to do so may
be met by a plea of res judicata. Where one or more issues have previously been
determined,* albeit that the cause of action is different, a party will again be
prevented from seeking to contradict the earlier findings on those issues, on the
basis of “issue estoppel’’.°”? In an appropriate case, the court can issue an anti-suit
injunction to restrain a party from pursuing proceedings which amount to a
collateral attack on a binding award.**° It may even be possible to prevent issues
being raised in subsequent proceedings which could and should have been raised
in the earlier proceedings, i.e. those issues which properly belong to the subject of

17 Omnibridge Consulting Ltd v Clearsprings (Management) Ltd |2004) EWHC 2276.

18 Ghangbola v Smith & Sherriff Ltd [1998] 3 All E.R. 730.
51° Sinclair v Woods of Winchester Ltd [2005] EWHC 1631 at [36]-[39].
520The award must also be final, conclusive and not susceptible to challenge or appeal: Svenska
Petroleum Exploration AB v Lithuania (No.2) [2006] 1 Lloyd’s Rep. 181. See though the comments
of the Court of Appeal at [2006] EWCA Civ 1529 at [91].
21 Westland Helicopters Lid v Al-Hejailan [2004] 2 Lloyd’s Rep. 523.
522 Fidelitas Shipping Co Lid v V/o Exportchleb [1965] 1 Lloyd’s Rep. 223, CA; Siporex Trade SA v
Comdel Commodities Ltd [1986] 2 Lloyd’s Rep. 428; Noble Assurance Co v Gerling-Konzern General
Insurance Co [2007] EWHC 253. This would include proceedings to enforce the award: Svenska
Petroleum Exploration AB v Lithuania (No.2) [2006] 1 Lloyd’s Rep. 181 affirmed by the Court of
Appeal at [2006] EWCA Civ 1529.
523 This applies only to a decision on the merits and not to matters of procedure: Charles M. Wilhe and
Co (Shipping) Ltd v Ocean Laser Shipping Ltd (“The Smaro”) 1999 1 Lloyd’s Rep. 225.
524 The determination must be a necessary part ofthe ealier decision, not simply collateral to it: see Sun
Life Assurance Co of Canada v Lincoln National Life Insurance Co [2004] EWCA Civ 1660.
525 Associated Electric €& Gas Insurance Services Ltd v European Reinsurance Co of Zurich (2003) 1
W.L.R. 1041; See generally Spencer Bower, Turner and Handley, The Doctrine ofRes Judicata (3rd
edn, 1996) and Johnson v Gore Wood [2002] 2 A.C. 1.
526 © y D [2007] EWHC 1541; Noble Assurance Co v Gerling-Konzern General Insurance Co [2007]
EWHC 253 although in that case the court considered that justice was sufficiently served by the
grant of declaratory relief as to the interpretation, scope and validity of the award.
 340 The Award

the earlier proceedings.°*”? This principle has been specifically applied to arbi-
trations.°**

6-177 Bar limited to questions referred. Subject to the previous paragraph,

only the claims actually referred are concluded by an award.°*” Whether a
particular claim was within the reference and will be a question of fact in each
case. Fresh proceedings might properly be brought on a demand which, though it
existed as a claim at the time of the reference, was not then a matter in dispute and
was not referred to the tribunal.**° Similarly, where the award declares an entitle-
ment to payment of asum of money without directing payment, fresh proceedings
may be brought to enforce payment. The award will be conclusive evidence both
of the obligation to pay and of the amount due.**' Depending on the circum-
stances, an alternative would be to seek an additional award under s.57(3)(b) of the
Arbitration Act 1996 or possibly remission of the award to the tribunal under s.68
for it to include a direction as to payment.°*”

6-178 Scope of bar to fresh proceedings. The bar to fresh proceedings applies
to claims coming within the reference whether or not the claims were actually
brought before the tribunal.°*?

27 See Henderson v Henderson (1843) 3 Hare 100; Yat Tung Investment Co v Dao Heng Bank Ltd [1975]
A.C. 581; Johnson v Gore Wood & Co [2001] 2 W.L.R. 72.
28 Fidelitas Shipping Co Ltd v V/o Exportchleb [1965] 1 Lloyd’s Rep. 223, CA; Arnold v National
Westminster Bank [1991] 3 All E.R. 41.
°° Crane v Hegermann-Harris Co [1939] 4 All E.R. 68; Steers v Lashley (1794) 6 T.R. 61; HE. Daniels
Ltd v Carmel Exporters & Importers Ltd [1953] 2 Q.B. 242. In Compagnie Graniére SA v Fritz Kopp
A.G. [1980] 1 Lloyd’s Rep. 463 buyers referred to arbitration a dispute relating to non-delivery of
goods in terms which limited the reference to the issue of liability. The tribunal found in favour of
the buyers who then submitted a debit note to the sellers. The sellers refused to pay and the buyers
referred the claim for damages to arbitration. The sellers claimed the buyers were estopped, as they
should have advanced all their claims in the first arbitration and had failed to do so. The court held
that, as in the first arbitration the issue of damages was never raised at all, the buyers were not
estopped. The rule in litigation that there could be no serial claims for damages based upon the
same cause of action applied to arbitration, but the buyers here had not put forward two claims for
damages.
39 Ravee v Farmer (1791) 4 T.R. 146; Golightly v Jellicoe (1769) 4 TR. 147n.; Upton v Upton (1832)
1 Dowl. 400. Cf. Lesser Design & Build Ltd v University of Surrey [1991] 56 B.L.R. 57 and
para.5—004 above.
3! Whitehead v Tattersall (1834) 1 Ad & El 491. See also FF Bloemen Pty Ltd v Council of the City of
Gold Coast [1973] A.C. 115, PC.
See para.6—091 above.
*In Willday v Taylor (1977) 241 E.G. 835 the claimants entered into two contracts, the second
supplemental to the first, both relating to the building of the same house and both containing an
arbitration clause. In an arbitration under the second contract the claimants obtained a small award
in respect of dampness. ‘They then brought legal proceedings under the first contract, also in respect
of dampness. The court held that the contracts were so related that an award under the second
effectively disposed of a claim under the first in respect of the same defects, the claimants having
expressly agreed that the award in the arbitration should be in complete satisfaction of their claim.
See also Dunn v Murray (1829) 9 B. & C. 7807 L.J. (O.S.) K.B. 390; Dicas v Jay (1830) 6 Bing. 519
8 LJ. (O.S.) C.P. 210; Collins v Powell (1788) 2 T.R. 756; Clegg v Dearden (1848) 12 Q.B. 576 17
L.J.Q.B. 223; Smith v Johnson (1812) 15 East 213.
 Effect of an Award 341

Unsatisfied award. There can be no fresh proceedings simply because the 6-179
award remains unsatisfied, enforcement of the award being the appropriate
course.*** Nor can there be fresh proceedings to recover additional losses arising
from a cause of action already determined.** If it is thought likely that there will
be further losses coming to light, the tribunal may be asked not to make a final
award, thus leaving open the possibility of a further award or awards in respect of
later losses. This would be better than relying on the tribunal’s discretion to make
an additional award if, indeed, it has power in the circumstances to do so.>*°

Rights in rem. An award does not bar a claimant from proceeding in rem on 6-180
the same cause of action unless of course the cause of action has been satisfied by
performance of the award. Where, however, a foreign award is the subject of an
action on the award in England, the claimant cannot proceed in rem because the
claim arises out of the arbitration agreement rather than in relation to the use or
hire of a ship.°*”

Valid award conclusive evidence of law and facts found. As 6-181

between the parties, a valid award is conclusive evidence of the law and facts found
by it.*’* So long as it has not been set aside, evidence to contradict the award or
any of the individual issues of law or fact with which it deals will be inad-
missible.°*? An award is not however admissible as evidence of the facts found by
it in criminal proceedings.**°

Name-borrowing arbitrations. Some contracts, particularly in the con- 6-182

struction field, provide for “‘name-borrowing” so that a party (e.g. the sub-
contractor) can bring arbitration proceedings against a third party (e.g. the

534 Purslow v Baily (1705) 2 Ld. Raym. 1039. Given that it is an implied term of the arbitration
agreement to comply with the award as set out in para.6—163 aboye, breach ofthis obligation could
give rise to an action in damages. However enforcement of the award will usually be the most
efficient way of seeking redress.
535 “The rule in Conquer v Boot’, see Mustill and Boyd p.411. See also Compagnie Gramiere SA v Fritz
Kopp AG [1980] 1 Lloyd’s Rep. 463.
°36 See para.6—171 above.
537 The ‘“Bumbesti’’ [1999] 2 Lloyd’s Rep. 481. In The “‘Sy/ph”’ (1867) L.R. 2 A. & E. 24a claim made
by a diver for injuries received from the respondent’s steamer was referred to arbitration, with a
clause in the submission agreement that if the award was not performed by the respondent then all
the claimant’s rights were reserved. The respondent failed to pay the sum awarded. The court held
that the claimant was entitled to proceed in rem against the steamer. It seems that the decision
would have been the same had there been no reservation of the claimant’s rights. See also The “Rena
K”’ [1978] 1 Lloyd’s Rep. 545 at 560.
538 Whitehead v Tattersall (1834) 1 Ad. & El. 491 see also Leicester Waterworks Co v Cropstone Overseers
(1875) 44 LJ. M.C. 92; Hill v Ball (1828) 2 Bli. N.S. 1; Sybray v White (1836) 1 M. & W. 435. An
Doe
award may in particular be conclusive evidence between the parties as to the title to land: see
d Morris v Rosser (1802) 3 East 15.
539 Gueret v Audouy (1893) 62 L.J. QB. 633.
540 Ry» Fontaine Moreau (1848) 11 QB. 1028 at 1035.
 342 The Award

employer) in the name of another (e.g. the main contractor).°*! This is a device
that was used to avoid problems in relation to privity of contract,*** although it is
no longer necessary to adopt this mechanism if the third party has itself acquired
rights under the contract.*** Name-borrowing arbitrations can give rise to a
number of procedural and logistical problems because the sub-contractor con-
ducting the proceedings is not actually a party to them. It will often be preferable
to provide for a tripartite arbitration instead.°* The party whose name is bor-
rowed will be bound by the terms of any award which is made in an arbitration
conducted in accordance with the name-borrowing provisions (which will be
strictly construed) or otherwise authorised by him.°*

(d) Effect on third parties

6-183 Award not generally binding on third parties. Save where a third
party agrees to be bound by it,°* an award is generally only effective as regards the
parties to it and persons claiming through or under them.**” It cannot generally
be relied on in proceedings involving a third party as evidence either of the facts
found or of reputation.*** The principle was applied in Sacor Maritima SA v
Repsol Petroleo SA°*? where Mance J. confirmed that a finding in an arbitration
between disponent owners and head charterers as to the cause of damage to cargo
was not binding in a subsequent arbitration between the head charterers and sub-
charterers.

6-184 Exceptions. There are exceptions to this general rule. In particular, the
contractual context may give rise to third party rights.” There have also been
cases where this general rule appears to have been departed from on grounds of

~t! For a recent example, see Belgravia Property Company Ltd v S & R (London) Limited [2001] B.L.R.
424.
* Northern Regional Health Authority v Derek Crouch Construction Co [1984] 2 All E.R. 175 [1984]
Q.B. 644; Lorne Stewart v William Sindall Ple (1986) 11 Con. L.R. 99; Gordon Durham & Co Ltd
v Haden Young Ltd, 27 Con. L.R. 109.
43 See para.3-014.
Belgravia Property Co Ltd v S & R (London) Limited [2001] B.L.R. 424.
S Gordon Durham & Co Lid v Haden Young Ltd, 27 Con. L.R. 109 at 135.
+ Jackson v Henderson, Craig & Co (1916) 115 L.T. 36.
>” Tunbridge Wells Local Board » Ackroyd (1880) 5 Ex. D. 199; Martin v Boulanger (1883) 8 App. Cas.
296. Persons claiming through or under the parties are clearly bound: s.58(1) of the Arbitration Act
1996.
8 Sun Life Assurance Co of Canada v Lincoln National Life Insurance Co [2004] EWCA Civ 1660; Re
Kuchin Ex p. Young (1881) 17 Ch. D. 668.
* 11998] 1 Lloyd’s Rep. 518.
°° In Co-operative Wholesale Society Ltd v Birse Construction Lid [1997] T.L.R. 454, CA an arbitrator’s
award in a building dispute between an employer and a contractor awarded sums in respect of sub-
contract works. ‘The employer failed to make payment owing to insolvency. Both the main contract
and the sub-contract were on the standard JCT forms of contract. The Court of Appeal decided on
the basis of those contracts that the sub-contractor was entitled to recover from the contractor sums
found in the award to be due in respect of the sub-contract works. Cf, Lord Cooke in Lafarge
Redland Aggregates Lid v Shephard Hill Civil Engineering Lid [2000] 1 W.L.R. 1621 at 1638.
 Effect of an Award a3

acquiescence and ratification.°! An award may also in some circumstances be

relied upon in a claim against a third party for an indemnity or as quantifying the
loss suffered (subject to showing a failure to mitigate or that the award was
perverse or unreasonable).°°* The Court of Appeal have now rejected the sugges-
tion advanced by Saville J. in George Moundreas & Co. Ltd v Navimpex Centrala
Navala**’ that where an award determines the rights or obligations of parties to a
contract, 1t may be possible for a third party to treat that award as in effect part
of the contract between the original parties and rely upon the award as having
determined the contractual position as between the original parties.**

Disclosure of award to third parties. In the absence of an express 6-185

agreement about confidentiality there is an implied obligation on a party obtaining
documents in an arbitration not to disclose or use them for any purpose other than
the dispute in which they were obtained.°* It is qualified, however, when dis-
closure is reasonably necessary to establish or protect a party’s legal rights as
against a third party by founding a cause of action or a defence to a claim. In these
circumstances disclosure of the award, including any reasons given, will not be a
breach of the duty of confidentiality.°°° It is also an exception to the duty of
confidentiality that a party may put the award and any reasons before the court if
there is an application seeking to invoke the court’s supervisory powers in relation
to the arbitration or the award, or if the court’s assistance is sought with regard to
enforcement of the award.°°’

551 See Govett v Richmond (1834) 7 Sim. 1; Thomas v Atherton (1877) 10 Ch. D. 185.
552 Stargas SpA v Petredec Ltd (“The Sargasso”) [1994] 1 Lloyd’s Rep. 412: Sun Life Assurance Co of
Canada v Lincoln National Life Insurance Co [2004] EWCA Civ 1660. Cf Alfred McAlpine
Construction Ltd v Unex Corp Ltd (1994) 70 B.L.R. 26.
553 [1985] 2 Lloyd’s Rep. 515 at 520. Aion
534 Sun Life Assurance Co of Canada v Lincoln National Life Insurance Co [2004] EWCA Civ 1660.
233 Dolling-Baker v Merrett and Others [1991] 2 All E.R. 891 at 899, CA; Hassneh Insurance Co of Israel
and Others v Steuart J, Mew [1993] 2 Lloyd’s Rep. 243. A similar obligation applies to documents
disclosed in High Court litigation: Distillers Co (Biochemicals) Ltd v Times Newspapers Ltd [1975]
QB. 613; Riddick v Thames Board Mills [1977] QB. 881, GRR IPRS ITZ
556 See para.5—188 above.
337 Hassneh Insurance Co of Israel and Others v Steuart J Mew [1993] 2 Lloyd’s Rep. 243.
 CHAPTER 7

Tue ROLE OF THE CouRT BEFORE AND

DuRING THE ARBITRATION

[RUN TRODUGIION: eerie: 7-001 REMOVAL OF THE TRI-

BUNAL, RESIGNATION AND
2. StavyING Court Pro- REVOCATION OF
GHEDINGS pesca a eceeree 7-010 AU ORID Witt eee 7-110
3. INJUNCTIONS TO RESTRAIN DETERMINING DISPUTES
PARBIGRATION Sicccaescatearecee 7-056 ABOUT THE TRIBUNAL’S
JurispICcTION DurING
4. EXTENSION OF
THE ARBITRATION........- 7-143
(a) Extending time for DETERMINATION OF
commencing arbitrat- QUESTIONS OF Law
ion proceedings DuRING THE
(Secttomull 2 ae veer 7-068 ARBITRATION Biswe cde 7-164
(b) Extending time for
making an award . Court’s PowERS TO
(Secttonv50) ee... 7-081 IssuE INJUNCTIONS AND
(c) Extending agreed time Make OTHER ORDERS IN
limits (section 79)..... 7-089 RELATION TO ARBITRAL
(d) Extending statutory PROCEEDINGS. .......2.cc000005 7-179
time limits (section
10. DETERMINATION OF THE
RECOVERABLE CosTs OF
5. APPOINTMENT OF AN THE ARBITRATION .......... 7-209
ARBITRATOR OR Umpire 7-095

1. INTRODUCTION

Role of the court generally. This chapter and Ch.8 examine the direct
role of the English court in arbitration. The general principle is stated in Pt.1 of
the Arbitration Act 1996 as follows:

“In matters governed by this Part [of the Act] the court should not intervene except as
provided by this Part. 1

' Arbitration Act 1996, s.1(c). Compare Art.5 of the UNCITRAL Model Law on International
Commercial Arbitration, reproduced in Appendix 4, which uses ‘‘shall” instead of the 1996 Act’s
use of “should” which is arguably less prescriptive.
 Introduction 345

This statement of principle in the very first section of the Arbitration Act 1996 is
clear recognition of the policy of party autonomy underlying the Act and the
desire to limit and define the court’s role in arbitration so as to give effect to that
policy. What led to the statement is discussed in Ch.1.2 The extent of the court’s
powers before and during the arbitration is the subject ofthis chapter, whereas the
court’s role after the award is dealt with in Ch.8.
The statement of principle indicates two possibilities as to when the court can 7-002
intervene in an arbitration. Under the first, the paradigm case, the court should
only intervene where there is a provision in Pt 1 of the Arbitration Act 1996 that
permits court intervention. The principle of non-intervention was stated clearly
by the House of Lords in Lesotho Highlands v Impreglio SpA® where Lord Steyn
quoted with approval statements made by Lord Wilberforce during the second
reading of the Arbitration Bill before the House of Lords: “It has given to the
court only those essential powers which I believe the court should have’’. In the
same vein, the Court of Appeal in Cetelem v Roust* stated that, ‘a central and
important purpose of the 1996 Act was to emphasise the importance of party
autonomy and to restrict the role of the courts in the arbitral process. In particular
the Act was intended to ensure that the powers of the court should be limited to
assisting the arbitral process and should not usurp or interfere with it’.
In the second (and exceptional) case, however, the court may also intervene to
prevent a substantial injustice even if there is no relevant provision in Pt 1 of the
Act. The powers of the court in the latter case will only be exercised in “very
exceptional circumstances”’.95

Inherent jurisdiction? Section 1(c) of the Act makes it clear that the general 7-003
position is that there is no inherent common law jurisdiction of the court to
supervise arbitration outside the framework of the Arbitration Act 1996. Section
l(c) is arguably subject to two limitations. First, it does not regulate intervention
in the arbitral process in matters not governed by Pt 1, and, secondly, the use of
the word “should” as opposed to the word ‘“‘shall” shows that an absolute
prohibition on court intervention was not intended.° The usual position taken by
the courts is to restrict court intervention to the minimum necessary under the
Act, but this is not always the case. For example, in Virdee v Virdi,’ the judge at
first instance had made various directions following appointment of a tribunal as
to whether legal representation should be allowed and as to whether costs should
be recovered. One party took issue with the terms of these directions, although
apparently not the court’s discretion to make them, and appealed. The Court of
Appeal noted, ‘‘... The parties were not invoking the express jurisdiction of the
court on any of the sections of the Arbitration Act 1996 when asking for the

* See paras 1-043 et seq.

[2006] 1 A.C. 221 at [18].
* [2005] 1 W.L.R 3555 at 3571.
> Farugi v Commonwealth Secretarial [2002] W.L. 498805 where the court refused to intervene because
the circumstances were not exceptional. See also Fletamentos Maritimos v Effjohn International
[1997] 2 Lloyd’s Rep. 302 and The ‘‘Smaro” [1999] 1 Lloyd’s Rep. 225.
® For the pre-1996 position, see Bremer Vulkan Schifbau v South India Shipping [1981] A.C. 909.
7 [2003] EWCA Civ 41.
 346 The Role ofthe Court

judge’s help in this respect... On the face of it, therefore, if it is right that the
Arbitration Act itself does not have a provision barring access to this court in
relation to the kind of relief which was being sought .. . then the ordinary rules
as to access to this court should apply.’’® This decision in Virdee should be treated
with caution. The parties were not legally represented before the Court of Appeal,
which itself said “‘this case should not be regarded as binding precedent’”’.’ For this
reason, Virdee should not be viewed as endorsing a general supervisory jurisdic-
tion over arbitrations
7-004 Far less controversially, the inherent jurisdiction has been used in a supportive
way to mitigate an unduly narrow application of certain terms of the Act. A clear
example of a supportive use of the inherent jurisdiction can be found in 4 v B'®
where Colman J. endorsed the use of the inherent jurisdiction to stay English
proceedings in favour of arbitration in a case where the court could not be certain
of the existence of an arbitration agreement as required under s.9 of the Act.
7-005 A residual inherent jurisdiction also extends to the granting of leave to appeal.
Despite the apparently unequivocal words of the Act which in many cases appear
to require leave to appeal from the decision of the court at first instance,'’ the
Court of Appeal also retains a residual jurisdiction to set aside the judge’s decision
in the case of unfairness relating to the process of the decision. Where, “the
judge’s refusal of leave to appeal was arbitrary or unfair: or was the product of a
failure of intellectual engagement with the arguments put before him; or
amounted actually or metaphorically to the absence of a decision on the issue” the
Court of Appeal can of its own motion consider appeals even where leave of the
first instance judge has not been given although these are “exceptionally rare
eases2
7-006 In Coppée-Lavalin SA/NV v Ken-Ren Chemicals and Fertilisers Ltd,'> which was
decided before the Arbitration Act 1996 was enacted, a distinction was drawn
between three groups of measures that involve the court in arbitration, the first
being purely procedural steps which an arbitral tribunal cannot order or cannot
enforce (e.g. issuing a witness summons to a third party), the second being
* Paragraph 18. The court was apparently proceeding on the basis that as no express provision of the
Arbitration Act was being relied upon (other than in relation to s.18, a separate point which is
considered below) then the court, both at first instance and on appeal, had inherent jurisdiction to
intervene. It is presumed that this analysis is based on s.1(3), “Jn matters governed by this Part the
court should not intervene except as provided by this Part”. However, ss.63 to 65 do at least provide
extensive provision as to costs, and these provisions appear not to have been considered by the
Court of Appeal.
” Paragraph 4. See also JT Mackley & Co Ltd v Gosport Marina Ltd [2002] EWHC 1315 where the
existence of a general, albeit very limited, supervisory jurisdiction outside of the Arbitration Act
1996 was recognised. At [52] the court noted “‘/t is clear that the general intention was the courts should
not usually intervene outside the general circumstances specified in Pt I of the 1996 Act”.
© 12006] EWHC 2006.
'! See for example s.44(7).
2 CGU International Insurance Ple and Others v Astra Zeneca Insurance Co Ltd [2006] EWCA 1340,
per Rix LJ. at [100]. Following Cerelem SA v Roust Holdings Ltd [2005] EWCA Civ 618 the Court
of Appeal can also bypass the requirement of leave from the first instance judge where the judge did
not have jurisdiction to make the impugned order. See the discussion of Cetelem in Kazakhstan v
Isl Group Inc [2007] EWCA 471.
'$ [1994] 2 All E.R. 449, where by a majority the House of Lords ordered a party to an arbitration to
provide oe for costs. The court (as opposed to an arbitrator) no longer has this power. See
para.4—128.
 Introduction 347

designed to maintain the status quo (e.g. the granting of an interim injunction
under s.44) and the third being designed to ensure the award has its intended
practical effect by providing a means of enforcement if the award is not voluntarily
complied with. It was pointed out that the three groups entail differing degrees of
encroachment on the arbitral tribunal’s task of deciding the merits of the dispute
and that the extent of such intrusion should ‘condition to an important extent”
the court’s approach.'* Despite the changes made by the Arbitration Act 1996, the
distinction remains valid.

Contents. This chapter examines the court’s role at all stages up to the 7-007
publication of the final award, including the costs of the arbitration. Chapter 8
deals with the court’s role in matters concerning the award, other than costs.
Chapter 8 also specifies the procedure for applications to the court.
This chapter begins with applications to stay court proceedings which have
been brought in breach of an arbitration agreement.'? The court has no power to
compel arbitration, save indirectly by refusing the claimant a remedy through the
courts, so that if he wants to pursue his claim he can only do so by arbitration.'°
The court may also help where arbitration proceedings are wrongly brought and
this is also addressed.’
The chapter proceeds to examine how the court may intervene while arbitration
proceedings are pending and its powers to do so. They include power to extend
time limits for commencing the arbitral proceedings'* and for making the award,'”
power to appoint an arbitrator,*° to decide disputes about the arbitrator’s jurisdic-
tion’! and to determine points of law.?* The court also has power to remove an
arbitrator?’ and to appoint a replacement.** Other orders may also be made by the
court during the reference, and these too are examined.”
Finally, this chapter deals with the court’s power to determine the recoverable
costs of the arbitration, including the fees and expenses of the arbitrator, when
they are disputed.*°

The court. The Commercial Court has primary responsibility for the admini- 7-008
stration and monitoring of the court’s supervisory jurisdiction over arbitration and

'4 per Lord Mustill in Ken-Ren op. cit. at 469-470.

'S See paras 7-010 et seg. below.
'6 The court usually achieves this by granting a stay of the legal proceedings, but in exceptional cases
an anti-suit injunction may be obtained. See para.7—011.
7 Paragraphs 7-057 et seq.
'S Paragraphs 7-068 er seq.
' Paragraphs 7-081 et seq.
°° Paragraphs 7-095 et seq.
*! Paragraphs 7-143 et seq.
2 Paragraphs 7-164 et seq.
23 Paragiaphs 7-111 et seq.
*4 Paragraphs 7—140 et seq.
*° Paragraphs 7-179 et seq.
6 Paragraphs 7-210 e@ seq.
 348 The Role of the Court

awards under the Arbitration Act 1996.*” Arbitration applications can also be
28-29
made to certain other courts.

7-009 Procedure. The Civil Procedural Rules 1998, as amended (‘‘CPR”’) contain the
procedural code that applies to all proceedings brought before the civil courts of
England and Wales. Pt 62 of the CPR specifies the rules that apply generally to
arbitration applications to the court*? and will be referred to in this book as CPR
Pt 62 or more simply r.62, followed by the rule number.*' There is also a Practice
Direction that supplements CPR Pt 62,*? which will be referred to in this book as
the Arbitration Practice Direction or as PD 62 followed by the relevant paragraph
number.*?
Depending on the court in which an arbitration claim is made, rules in other
parts of the CPR and other practice directions may need to be consulted.**
Part I of CPR Pt 62 is concerned with applications to which the Arbitration Act
1996 applies. Part II is concerned with matters to which the pre-Act arbitration
law applies. Part II applies to all enforcement proceedings other than by action or
claim on the award. This book will consider Pt I in this chapter and Pt II in Ch.8,
except that the general procedure for all arbitration applications will be specified
inch. 8-3
With limited exceptions, which will be mentioned in the relevant parts of Chs
7 and 8, the general rule is that ‘“‘proceedings under this Act’’*® are to be
commenced or taken in the High Court.*”

2. STAYING CouRT PROCEEDINGS

7-010 Introduction. An arbitration agreement is a contractual undertaking by which

the parties agree to settle certain disputes by way of arbitration rather than by
proceedings in court.** When a dispute arises however one of the parties may

27 Whitebook, note 2E-45 to CPR PD 62.

*** For a complete list of the courts in which an arbitration claim form may be issued, see
para.8-178.
CPR Pt 62 and CPR PD 62 (Arbitrations) were brought into force by the Civil Procedure
(Amendment No.5) Rules 2001 (SI 2001/4015).
*' CPR r.62.1, for example, indicates the first rule in CPR Pt 62.
* CPR PD 62 (Arbitrations).
* PD 62, para.1.1, for example, indicates the first subsection in the Arbitration Practice Direction.
“CPR Pts 58, 59 and 60 together with practice directions and guides apply to claims in the
Commercial Court, Mercantile Courts and TCC respectively. See para.8-182.
* Paragraphs 8-178 ef seq. Specific provisions of procedure will be mentioned with the relevant
subject (e.g. an application for a stay of court proceedings).
*° This expression appears in the Arbitration Act 1996, s.105(2) and (3).
*’ High Court and County Courts (Allocation of Arbitration Proceedings) Order 1996
(SI 1996/3215)—see Appendix 1.
*® See Arbitration Act 1996, s.6(1) for definition of “arbitration agreement” for the purposes of the
Act: see also para.2—002.
 Staying Court Proceedings 349

nevertheless commence court proceedings*’ either because he challenges the

existence or validity of the arbitration agreement or because he means to breach
it. A party may also wait until an unfavourable award is received and then start
proceedings in an inappropriate jurisdiction to attack, set aside or otherwise
impugn the award.*°
In the first case the action may be entirely justified because arbitral proceedings
must be founded on a valid arbitration agreement.*! Therefore, rather than wait
for arbitral proceedings, which he would then have to challenge as being wrongly
brought,"* the claimant may take the initiative by commencing a court action and
then opposing an application to stay it.
Where the court action is commenced in breach of an arbitration agreement the
other party may apply to stay the court action, unless he is content to forego his
right to have the dispute referred to arbitration and to defend the action before the
court.**
Where the other party wishes to have the dispute referred to arbitration he must
apply without delay to the court for a stay of the proceedings brought in breach
of the agreement to arbitrate. If granted, the stay will confront the other party
with a choice between arbitrating the claim or not pursuing it at all, for if a stay
is granted there is no third option of having it dealt with by the court.

Anti-suit injunctions. One option open to a party who faces court proceed- 7-011
ings brought in breach of an agreement to arbitrate is to apply for an anti-suit
injunction. The jurisdiction to grant an anti-suit injunction is most usually
directed at proceedings commenced in the early stages of an arbitration but can
also be used where proceedings to challenge an award are commenced abroad.*°
Such an injunction is directed at the respondent, not to a foreign court (although
there is much debate about the true effect of such an injunction) and directs the
party to take no further steps in the proceedings brought in breach of the
agreement to arbitrate. However, the use of an anti-suit injunction is a secondary
remedy to be deployed in situations where a stay under s.9 of the Arbitration Act
will not be or is unlikely to be effective. This will particularly be the case in respect

39 The court will not decline to accept jurisdiction in an action simply because of the existence of the
arbitration clause, see, for example, McKellar and Westerman Lid v Rosemary Dawn Eversfield [1994]
A.D.R.L.J. 140. It is for one of the parties to the arbitration agreement to take objection to the
matter proceeding in court by applying for a stay.
40 Noble Assurance Co and Others v Gerling-Konzen General Insurance Co—UK Branch [2007] EWHC
253; C v D [2007] EWHC 1541.
+! There may also be a statutory reference (see Appendix 3).
* See para.7—-057.
43 The court action need not be commenced before the arbitral proceedings; it could be commenced
after arbitral proceedings have been begun and the two may run in parallel unless and until one or
other is stopped.
“+ The pros and cons of arbitration are discussed in paras 1-022 et seq.
45 An injunction to restrain the breach of an agreement to arbitrate might instead be appropriate where
the court proceedings are brought abroad, and the grant of a stay by the English court is not
appropriate. See para.7—011. Ln
46 Noble Assurance Co and Others v Gerling-Konzen General Insurance Co—UK Branch (2007] EWHC
253 at [87]; C v D [2007] EWHC 1541.
 350 The Role ofthe Court

of proceedings brought abroad in breach of an agreement to arbitrate, in which

case s.9 proceedings clearly cannot be maintained in “the court in which the
proceedings have been brought”, at least not under s.9. In this situation, the party
seeking to rely on an arbitration agreement will usually apply to the relevant
foreign court for a stay, especially where the foreign court is situated in a country
that has acceded to a Convention*’ that recognises and enforces arbitration
agreements. However, where the party is unsure of the reception it will receive in
that foreign court, and where England is the seat of the arbitration, an anti-suit
injunction may be sought. In theory, it may be possible to seek an anti-suit
injunction where England is not the seat of the arbitration but where the respon-
dent is otherwise amenable to the jurisdiction of the English courts, for example
where the court exercises in personam jurisdiction over the respondent.** How-
ever, particularly in the light of recent authority asserting the importance of the
exclusive supervisory jurisdiction of the court’s of the seat,*” it is submitted that
the English court is most unlikely to act in such situations.*°

7-012 Availability in the EU. The grant by the English courts of anti-suit
injunctions is becoming increasingly controversial. They are no longer available in
matters covered by the Brussels Regulation regime,*' where it is now firmly
established that the question ofjurisdiction is, pursuant to Art.27 of the Brussels
Convention on Jurisdiction (previously Art.21 of the Convention) a matter for the
court first seised of the dispute. In Turner v Grovit** the ECJ held that an anti-suit
injunction ordered by the English court to restrain a defendant from taking
proceedings in another Contracting State of the Brussels Regulation regime is
inconsistent with that regime even where it could be shown that the foreign
proceedings are vexatious or oppressive. The same conclusion was reached by the
EC] in Eric Gasser GmbH v Misat SrP? in respect of an exclusive jurisdiction

e.g. The New York Convention, 1958.

* TPOC International Growth Fund Ltd v OAO “CT-Mobile” and Another, Court of Appeal of
Bermuda, Nos 22, 23 of 2006, March 23, 2007. The Court of Appeal of Bermuda upheld the grant
of an anti-suit injunction against a respondent incorporated in Bermuda where the seat of the
arbitrations in question was Switzerland and Sweden. The court considered extensive English
authority, although not it seems the Court of Appeal decision in Weissfisch v Julius and Others [2006]
EWCA 218.
” Weissfisch v Julius and Others [2006] EWCA 218; 4 v B [2006] EWHC 2006.
°° See however Albon (t/a NA Carriage Co) v Naza Motor Trading Sdn Bhd & Anor (No.4) [2007]
EWHC 1879 (Ch), where an anti suit injunction was granted to restrain court and arbitration
proceedings in Malaysia. The effect of the decision is probably confined to situations where the
court has decided that it must decide an issue as to the existence of an arbitration agreement upon
as.9 stay application having been made and the court is anxious not to allow the arbitrators to decide
the same issue pending the court’s decision.
°! The Brussels Regulation regime refers to the Brussels Convention on Jurisdiction 1965 as subse-
quently amended. The relevant rules are no contained in Council Regulation (EC) Regulation
44/2001. The Regulation has direct effect which is recognised in the Civil Jurisdiction and
Judgments Order 2001 (SI 2001/3929) and is reflected in CPR 1.6.19.
* 12004] 2 Lloyd’s Rep. 169.
512005] 1 All E.R. (Comm) 538.
 Staying Court Proceedings 351

clause.** In the arbitration context, as is described below, anti-suit injunctions are

currently available in support of arbitration wherever the respondent is domiciled.
This is because proceedings seeking anti-suit injunctions in support of an arbitra-
tion agreement are outside the scope of the Brussels Regulation jurisdictional
regime. There is a question however as to whether this state of affairs will
continue. Recognising the need for the issue to be resolved by the ECJ, the House
of Lords has now referred the following question to the ECJ: “Is it consistent with
EC Regulation 44/2001 for a court of aMember State to make an order to restrain
a person from commencing or continuing proceedings in another Member State
on the ground that such proceedings are in breach of an arbitration agreement?””°
The House of Lords expressed the firm view that the maintenance of arbitration
(and in particular London seated arbitration) as an attractive alternative to litiga-
tion, free in the main from the competing requirements of domestic jurisdictions,
requires that anti-suit injunctions continue to be available, “ . . . in cases concern-
ing arbitration, falling outside the Regulation, it is in my opinion equally necessary
that Member States should trust the arbitrators (under the doctrine of Kompe-
tenz-Kompetenz) or the court exercising supervisory jurisdiction to decide
whether the arbitration clause is binding and then to enforce that decision by
orders which require the parties to arbitrate and not litigate”.92 56

Current position. Anti-suit injunctions in respect of proceedings not 7-013

brought in the courts of EU Member States will be unaffected by the ECJ’s
decision.*” Pending an answer from the ECJ the position in its Member States is
as follows:
Notwithstanding the effect of the decisions in Turner v Grovit and Eric Gasser,
the Court of Appeal has held that anti-suit injunctions can still be granted in the
context of breaches of agreements to arbitrate, indeed in any situation relating to

54 Anti-suit injunctions are still available in respect of court proceedings where the parties are not
domiciled in countries party to the Brussels Regulation regime. Completing the trilogy of cases, see
also Omusu v Jackson (t/a Bal Inn Villas) (2005| QB. 801, where the claimant was injured ina
swimming accident in Jamaica and sued one English and several Jamaican defendants for damages
for personal injuries. The EC] held, applying Art.2 of the Conyention, that there was no scope for
an application of forum non conyeniens where a defendant was domiciled in a Member State. It
made no difference that the dispute centered on a non-member state and involved acts and
omissions of other defendants who were domiciled in that state. The Brussels Convention regime
as applied in Turner and Eric Gasser has been subject to heavy academic criticism in England as
being inflexible. See Mance L.Q.R. 2004, 120 (Jul), 357-365; Briggs L.Q.R. 2004, 120 (Oct),
529-533.
55 West Tankers Inc v RAS Riunione Adriatica di Sicurta SpA and Others [2007] UKHL 4, a “leapfrog”
appeal from [2005] EWHC 454 in the light of the Court of Appeal’s decision in Through Transport
Mutual Insurance (Eurasia) Ltd v New India Assurance Co Lid [2004] EWCA Civ 1598.
of Lord
5° ner Lord Hoffmann, at [20]. Similar sentiments are expressed in the very short opinion
Mance, at [26]-[30].
Branch
57 See for example Noble Assurance Co and Others v Gerling-Konzen General Insurance Co—UK
253, at [84]-{98], a post West Tankers case where the court considered it had power
[2007] EWHC
v D [2007] EWHC
to grant an anti-suit injunction in respect of Vermont proceedings. See also C
SA (3)
1541; Elektrim SA v (1) Vivendi Universal SA (2) Vivendi Telecommunication International
Elektrim Telekomunikacja SP Zoo (4) Carcom Warszawa SP. Zoo (2007) 2 Lloyd’s Rep. 8 and
Starlight Shipping and Others v Tai Ping Insurance and Others [2007] EWHC 1893.
382 The Role of the Court

arbitration or litigation not covered by the Brussels Regulation regime.°* Arbitra-

tion currently falls outside the scope of the Brussels Regulation®’; and hence
proceedings in relation to arbitration usually fall within the arbitration exception
in Art.1(2)9(d) of the Regulation.°° The breadth of this exclusion has been the
subject of some debate. The approach of the English court, as enunciated by the
Court of Appeal in Through Transport Mutual Insurance (Eurasia) Ltd v New India
Assurance Co Ltd, where the Court of Appeal found that the proceedings fell
within the arbitration exception, is to assess whether the ‘“‘principal focus” of the
proceedings is arbitration.®°' This, the court said, embraces proceedings concern-
ing the validity or existence of an arbitration agreement, the appointment of
arbitrators, injunctions and other ancillary assistance in the context of arbitration
proceedings and the recognition and enforcement of awards. It also extends to
proceedings the aim of which is to set aside, disrupt or stop the arbitration.°* The
EC] has however held that the exception does not however extend to pure
provisional measure applications.°? A simple starting point is to ask: does the
essential subject matter of the claim concern arbitration? If the answer to this
question is yes, then the arbitration exception should apply. The question is one
of substance and not form, so if the aim of proceedings is to circumvent or render
nugatory an arbitration clause the English court will conclude that the proceedings

°8 The principles governing the grant of an anti-suit injunction after the Eric Gasser line of decisions
are summarised by the Court of Appeal in OT Africa Line Lid v Magic Sportswear Corp [2005]
EWCA Civ 710. See in particular the comments of Rix L.J. at [51]. Sir Anthony Clarke M.R.,
speaking extra-judicially, has recognized “that there is scope for argument as to whether that [the
English court’s approach to the grant of anti-suit injunctions] is correct or not” in “The differing
approach to commercial litigation in the European Court of Justice and the courts of England and Wales”,
Institute of Advanced Legal Studies, London, February 23, 2006, available at mmwmdca.gov.uk/
judicial/ speeches /2000.
°° Through Transport Mutual Insurance (Eurasia) Ltd v New India Assurance Co Ltd [2004] EWCA Civ
1598, applied in West Tankers Inc v Ras Riunione Adriatica di Sicurta SpA (2005] All E.R. (D) 350
(see the House of Lords’ reference to the ECJ [2007] UKHL 4). The Brussels Regulation (Council
Regulation (EC) No.44/200)1 took effect on March 1, 2002 and replaced the previous Brussels
Convention concerning issues of jurisdiction between all EU Member States except Denmark. The
same issue applies under the Lugano Convention which governs jurisdictional issues between EU
Member States and Iceland, Norway and Switzerland. See also, Jolly K., Anti-Suit Injunction and
the Arbitration Exception in the Brussels Regulation: New India Assurance v Through Transport Mutual
Insurance (2005) 71 Arbitration 3.
© See further para.7—184.
°! [2004] EWCA Civ 1598. An anti-suit injunction was not granted in this case where a third party
was pursuing a statutory right under Finnish law in the Finnish courts against an insurer. See a
discussion of the effect of the Turner v Grovit line of cases and Through Transport by Sir Anthony
Clarke M.R. speaking extra-judicially, ‘““The differing approach to commercial litigation in the
European Court of Justice and the courts of England and Wales”, Institute of Advanced Legal
Studies, London, February 23, 2006, available at mmm.dca.gov.uk/judicial/speeches/ 2006.
© The principal focus/principal objective test was applied in A v B [2006] EWHC 2006 at
[87]|-[97].
© Van Uden Maritime BV v Kommarditgesellschatt in Firma Deco-Line [2002] E.C.R. 1-7091. The
distinction between pure provisional measure applications, which may fall outside the exception,
and essentially all other types of arbitration-related exceptions which fall within the exception is
unclear along the dividing line.
“* Through Transport, above, per Clarke L.J., at paras 44-47; adopting the analysis of Advocate General
Darmon in Marc Rich & Co AG v Societa Italiana PA (The “Atlantic Emperor’’) {1992] 1 Lloyd’s
Rep. 342.
 Staying Court Proceedings 353

in question have arbitration as their principal focus and hence fall within the
arbitration exception.”

Test to be applied. In these situations (i.e. where the proceedings come 7-014
within the scope of the arbitration exception), the English court has generally
maintained the line that there should be no hesitation in granting an anti-suit
injunction against a party who are in clear breach of an agreement to arbitrate.
Furthermore, the likely attitude of the foreign court is irrelevant as the target of
the anti-suit injunction is the party in breach of the agreement to arbitrate, not the
court.°’ Certain considerations, such as of comity, may however persuade the court
to grant appropriate declaratory relief rather than an anti-suit injunction in certain
situations.°* Upon proof by the applicant of a valid arbitration agreement and an
actual or threatened breach of its terms, an injunction will normally be granted
unless it can be shown that the applicant has submitted to the jurisdiction of the
foreign court or has otherwise unduly delayed in making the application for an
anti-suit injunction.

Availability generally. Subject to the above threshold issue concerning 7-015

availability of the remedy in respect of proceedings before EU Member States
and other considerations mentioned, an application may be made to the court
for an injunction to restrain a defendant from pursuing proceedings abroad in
breach of an arbitration agreement,” provided the application is made

65 4 » B [2006] EWHC 2006. If the ECJ adopts this approach in the West Tankers reference then it
is likely that the court will answer the question referred in the affirmative.
6° Through Transport, paras 85-92. A classic exposition of the principles relevant to the grant of an
anti-suit injunction can be found in Aggeliki Charis Compania Maritima SA v Pagnan SpA (The
“Angelic Grace’”’) [1995] 1 Lloyd’s Rep. 87, per Millett L.J. at 96, although in the light of more
recent development this might be regarded as representing the “high water mark” of the jurisdic-
tion. Nonetheless, the ‘‘Angelic Grace” test has been cited with approval after West Tankers. See
C v D [2007] EWHC 1541, at [55]. Starlight Shipping and Others v Tai Ping Insurance and Others
[2007] EWHC 1893 at [12]-[15]. In addition to the statement of approach in The Angelic Grace see
also Donohue v Armco [2002] 1 Lloyd’s Rep. 425 at 432 et seq.; HL and Akai Pty Lid v People’s
Insurance Co Ltd [1998] 1 Lloyd’s Rep. 90. See more recently Goshawk Dedicated Lid v ROP Inc
[2006] EWHC 1730, where an anti-suit injunction was granted to restrain the respondent from
pursuing proceedings in the United States in breach of an English arbitration agreement. Contrast
however the comments of Morision J in Markel v Craft [2006] EWHC 3150 at [30] concerning the
need for the remedy to be used only sparingly.
°7 Through Transport, above. But contrast the comments of Morision J. in Markel v Craft [2006]
EWHCG 3150 to the effect that although the traditional justification for an anti-suit injunction is that
it is directed at the party and not the foreign court, there is a growing realisation that even in
arbitration cases an anti-suit injunction can be seen as interference with another court’s jurisdiction.
For this reason, Morison J. suggested that it is a remedy which should be used only sparingly.
68 See Noble Assurance Co and Others v Gerling-Konzen General Insurance Co—UK Branch [2007]
EWHC 253, where the court adopted this route.
6 The “Angelic Grace’ was the first in a series of cases that granted an anti-suit injunction. It followed
the decision of the Court of Appeal on exclusive jurisdiction clauses in Continental Bank v Acakas
Compania Naviera [1994] 1 Lloyd’s Rep. 505. Other decisions where an anti-suit injunction has
been made outside Europe include Shell » Coral Oil [1999] 1 Lloyd’s Rep. 72; Bankers Trust v
Jakarta Intl [1999] 1 Lloyd’s Rep. 910; and Sea Premium v Sea Consortium DBD (Adm Ct) Steel
J. (April 11, 2001). The exclusion by the Court of Appeal in the Through Transport case, of the
application of Turner v Grovit principles to anti-suit injunctions relating to agreements to arbitrate
makes it clear that the approach outlined in the Angelic Grace sull prevails.
 354 The Role of the Court

promptly.”” The construction of an arbitration clause is governed by the proper

law of the arbitration agreement rather than the law of the seat or the law of
governing law of the matrix contract, and it is the proper law of the arbitration
agreement which the court will apply in determining whether there is an actual
or threatened breach of the agreement to arbitrate. The law of the arbitration
agreement may be different from the procedural law of the arbitration and the
governing law of the matrix contract.”
As to delay, this is fact specific: it has been suggested in one case that a delay
of more than a year between the commencement of the foreign proceedings and
the application for an anti-suit injunction would constitute sufficient grounds for
declining the injunction on grounds of delay.’ Where the foreign proceedings
which were the subject of the anti-suit injunction had been on foot for over six
months, the court declined to grant an anti-suit injunction as “it may have the
appearance of interference in the affairs of the other court, especially where the other
court has already devoted considerable time to considering issues in the action”.’* The
court will also take account of any other special factors in the particular case
militating against the grant of an anti-suit injunction.’* The court may make an
interim or a permanent injunction.’”” The jurisdiction also extends to the grant of
so-called “‘anti-anti-suit injunctions” which require the respondent to refrain
from pursuing their own anti-arbitral relief in the foreign court.”°

7-016 Third party statutory rights. A related issue is whether an anti-suit

injunction will be granted against a third party pursuing a statutory right derived
from a contract in foreign proceedings, such as a third party bringing a claim
directly against an insurer, where the underlying contract (such as between insurer
and insured) refers disputes to English arbitration. Depending on the nature of
the particular statutory right, the issue will turn on whether it can be said that the
third party’s reliance on the statutory right is a breach of the arbitration clause,
rather than the applicant being only entitled to a declaration that the third party
should pursue all of its claims against the applicant including the statutory claim
in arbitration.’

”’ The need for prompt action was emphasised in Bankers Trust v Jakarta Intl [1999] 1 Lloyd’s Rep.
910.
™ See Cv D [2007] EWHC 1541; Tamil Nadu Electricity Board v St-CMS Electric Company Private
Ltd {2007] EWHC 1713 at [35]. See also OT Africa Line Ltd v Magic Sportswear Corp [2005] EWCA
Civ 710.
” Markel v Craft [2006] EWHC 3150 at [32]. The injunction was refused on other grounds.
* Noble Assurance Co and Others v Gerling-Konzen General Insurance Co—UK Branch [2007] EWHC
253 (Comm); [2007] 1 C.L.C. 85, per Toulson L.J. at [100].
’ For example, to avoid inconsistent decisions in multi-party disputes. See Donohue v Armco Op. cit.
See also Navigation Maritime Bulgaria v Rustal Trading (The “Ivan Zagubanski”’) [2002] 1 Lloyd’s
Rep. 106.
” Both injunctions were made in The ‘Ivan Zagubanski’ at different stages of the proceedings. For
the procedure relating to injunctions and their service see para.7—196.
’® For an example of a case where such relief was granted in conjunction with an anti-suit injunction
see Goshawk Dedicated Ltd v ROP Inc [2006] EWHC 1730.
” Through Transport Mutual Insurance (Eurasia) Ltd v New India Assurance Co Ltd [2005] 1 Lloyd’s
Rep. 67, followed in Markel v Craft [2006] EWHC 3150.
 Staying Court Proceedings 355

Recognition by foreign court. A further issue to consider is that even in 7-017

circumstances where an anti-suit injunction is granted in support of an agree-
ment to arbitrate such an injunction may not be recognised by the court in the
foreign jurisdiction. This is especially so where the practice of that legal system
does not recognise the concept of anti-suit injunctions,”*® although the likely
reaction of the foreign court will not deter the English court from granting the
order.” The Court of Appeal has suggested that considerations of comity are
to some extent built into the basic requirements for the principled exercise of
the jurisdiction to grant an anti-suit injunction.®® Even if the court is that its
injunction will be ignored by the foreign court, it may still proceed to issue the
injunction on the basis that a respectable foreign party is not likely to disregard
its order.°

Jurisdictional basis. It had previously been the case that anti-suit injunc- 7-018
tions were made under the court’s inherent jurisdiction conferred by s.37 of
the Supreme Court Act 1981 and not under s.44 of the Act.*! The Court of
Appeal in Cetelem v Roust*? noted the apparent tension between s.37 of the
Supreme Court Act 1981 and s.44 of the Arbitration Act 1996. Although the
tension has not been resolved, there remains an acceptance that orders under
s.37 can be made in the context of arbitration. Notwithstanding the comments
in Cetelem v Roust, the House of Lords in West Tankers made it clear that anti-
suit injunctions are (at least usually) granted under s.37 of the Supreme Court
Act 1981.°° In a subsequent decision, the application was brought on the two
alternative basis. The court did not indicate on which basis it granted the
injunction.** In Elektrim SA v Vivendi Universal SA and Others* the court
assumed that s.37 could be used to grant arbitral relief in the context of arbi-
tration. Where the court proceeds under s.37 of the Supreme Court Act, it
should have regard to the same factors as arise under s.44 of the Arbitration
Act.*** It is suggested that the court could also attempt to use the language of
s.44(2)(e) to grant anti-suit injunctions, although an anti-suit injunction made
under this sub-section could not be a final injunction.*°

78 For example, the Greek Court of Appeal has refused to recognise an anti-suit injunction ordered by
the English court in relation to a London arbitration, finding that orders restraining a party from
accessing the courts is contrary to the Greek Constitution: [2004] Piraiki Nomologia 92 (available
at wwm.klumerarbitration.com).
79 West Tankers Inc v Ras Riunione Adriatica di Sicurta SpA [2005] All E.R. (D) 350, per Colman J.,
at [51]-[52]. But see the House of Lords’ reference to the ECJ in [2007] UKHL 4.
8° See OT Africa Line Ltd v Magic Sportswear Corp [2005] 2 Lloyd’s Rep. 170 at [62]-{69].
80a Starlight Shipping and Others v Tai Ping Insurance and Others [2007] EWHC 1893 at [43].
81 Welex AG v Rosa Maritime {2003] 2 Lloyd’s Rep. 509 at [36], [40]. Anti-suits injunctions have
hitherto probably been granted under s.37 of the Supreme Court Act 1981 because they are usually
final injunctions.
82 Cetelem SA v Roust Holdings Lid [2005] EWCA Civ 618.
83 West Tankers Inc v RAS Riunione Adriatica di Sicurta SpA and Others [2007] UKHL 4 at [8].
84 C v D [2007] EWHC 1541.
85 [2007] 2 Lloyd’s Rep. 8.
850 Starlight Shipping and Others v Tar Ping Insurance and Others [2007] EWHC 1893, [19].
86 See Starlight Shipping and Others v Tai Ping Insurance and Others [2007] EWHC 1893, (20}-[28].
The argument runs that the anti-suit injunction is necessary to preserve the contractual rights of
the applicant to arbitrate. It has been accepted in Cetelem SA v Roust Holdings Lid (2005) 1 W.L.R.
 356 The Role of the Court

7-019 Damages for breach of the agreement to arbitrate. In certain

circumstances it is not possible to obtain an effective stay to restrain proceedings
brought in breach of an agreement to arbitrate. In particular, this may be the case
where proceedings in breach of an agreement to arbitrate are brought in a foreign
jurisdiction and where the courts of that jurisdiction neither stay the proceedings,
nor recognise an order of either the arbitral tribunal or the court at the seat of the
arbitration which attempts to restrain the party concerned from bringing proceed-
ings in breach of an arbitration agreement. However, there is no reason in
principle why an unsuccessful attempt to restrain the proceedings brought in
breach should be a condition precedent to an action for damages in this context.
In such situations, a party should consider the availability of an action for damages
for breach of the agreement to arbitrate. In Donohue v Armco*’ the House of Lords
accepted in principle that damages were available in cases of breach of a jurisdic-
tion clause. The damages recoverable in such an action may extend to any
additional liability incurred in the foreign jurisdiction (such as punitive damages,
for example) as well as the costs of defending the foreign proceedings. In Union
Discount v Zoller** it was decided by the Court of Appeal that where a party had
incurred costs in successfully applying in New York to strike out proceedings
against it brought in breach of an English jurisdiction clause but, due to local costs
rules, it could not obtain an order for costs in New York, it could recover damages
in English proceedings against the respondent including all costs reasonably
expended on the New York application. The English court has also accepted that
costs of defending the foreign proceedings may be recovered in England even
where those costs could in theory be obtained in the foreign proceedings.*? An
action for damages may be maintained both for breach of the arbitration agree-
ment itself and for breach of the jurisdiction agreement vesting supervisory
jurisdiction in the courts at the seat.”°

7-020 Overlap between remedies. Situations will also arise where a party may
obtain an anti-suit injunction restraining the proceedings in breach of an arbitra-
tion agreement and may also bring an action for damages in respect of losses to
date caused to it as a result of the proceedings brought in breach. However, the
scope of an anti-suit injunction and an action for damages for breach of an
agreement to arbitrate is not co-extensive. There will be situations where an anti-
suit injunction may be obtained in circumstances where an action for damages for
breach of the agreement to arbitrate has not yet accrued, for example against a
subrogated insurer who pursues court proceedings inconsistent with an agreement

3555 that contractual rights are assets within the terms of s.44(3). An anti-suit injunction to restrain
breach of an agreement to arbitrate was granted in Goshamk Dedicated Ltd v ROP Inc [2006] EWHC
1730 but the judgment does not contain any discussion of the basis of the court’s jurisdiction to
grant the relief. See further para.7—196.
*7 [2001] 1 Lloyd’s Rep. 425.
812001] EWCA 1755.
® A/S D/S Svendborg af 1912 A/S Bodies Corporate trading in partnership as ‘Maersk Sealand” v
Akar [2003] EWHC 797 (Comm.),
” Av B (Costs) [2007] EWHC 54 at [16].
 Staying Court Proceedings ios)own~!l

to arbitrate binding on its assured.”' There will also be situations where, although
the applicant may be entitled to a declaration that the other party should refer all
claims to arbitration, the action of the third party in maintaining foreign proceed-
ings will not constitute a breach of the agreement to arbitrate (such as where a
third party brings foreign court proceedings against an insurer relying on a foreign
statutory right) and hence no anti-suit injunction will be granted.”

English Proceedings. It is also possible of course to bring an action for 7-021

damages where the proceedings in breach of an arbitration agreement are brought
in England and Wales but in practice it is unlikely that any substantial loss will
have been suffered other than the costs of applying to the court for a stay, unless
perhaps concurrent arbitration proceedings have been commenced. In principle if
costs of the English court proceedings are awarded on a standard basis then the
shortfall between the standard basis and actual costs could be recovered in an
action for damages although this is a “formalistic and cumbersome procedure
which would in itself involve more costs and judicial time” and so should be
avoided if possible.”*

Costs on an indemnity basis. Where proceedings have been brought in 7-022

breach of an agreement to arbitrate, the usual approach is that costs of the relevant
English proceedings will be awarded against the party acting in breach of the
agreement to arbitrate on an indemnity basis.”*

Domestic and non-domestic. Although the Arbitration Act 1996 makes 7-023
a distinction between domestic and non-domestic arbitration agreements,” those
provisions in the Act relating to domestic arbitration agreements will not be
brought into force.”° Accordingly, no further mention of those provisions will be
found in this chapter.

at
1 West Tankers Inc v Ras Riunione Adriatica di Sicurta SpA [2005] All E.R. (D) 350, per Colman J.
[67]|-[68]. But see the House of Lords’ reference to the ECJ [2007] UKHL 4.
° As in Through Transport Mutual Insurance (Eurasia) Lid v New India Assurance Co Ltd {2005] 1
Lloyd’s Rep. 67.
4 v B (Costs) [2007] EWHC 54 at [10].
° 4 y B (Costs) [2007] EWHC 54 at [10]}{11]; Kyrgyz Mobil Tel and Others v Fellowes International
;
Holdings and Another [2005] EWHC 1329, at [42].
ss.85—87
°’ The distinction, which was introduced by the Arbitration Act 1975, is apparent from
appears
inclusive of the Arbitration Act 1996. The definition of ‘domestic arbitration agreement”
in s.85(2) of the Arbitration Act 1996.
y Under
°% The decision appears in the statement made on January 30, 1997 by the Parliamentar
and Industry. It
Secretary of State for Corporate and Consumer Affairs, Department of Trade
excepted ss.85—87
followed the Arbitration Act 1996 (Commencement No.1) Order 1996 which
see para.2—-005.
from coming into force with the rest of the Act on January 31, 1997,
 358 The Role of the Court

7-024 The court’s powers to grant a stay of legal proceedings.”’ An

application for a stay of legal proceedings will usually be made under s.9 of the
Arbitration Act 1996, whose provisions are mandatory.”* Section 9 will apply even
if the seat of the arbitration is abroad or no seat has been designated or determined
but clearly the legal proceedings to which the stay relates must be proceedings
before the court which is asked to consider the application.”’ To give an example
of the court’s approach, where the seat of an arbitration was in Abu Dhabi, and the
scope of the arbitration agreement was governed by Abu Dhabi law, the court
heard expert evidence as to Abu Dhabi law in order to determine the scope of the
arbitration clause.'°° Under s.9 a stay must be granted unless the court is satisfied
that the arbitration agreement is “‘null and void, inoperative, or incapable of being
performed”’.'°!
The Brussels Regulation regime,'’’ where it is now firmly established that the
question of jurisdiction is, pursuant to Art.27 of the Brussels Convention (pre-
viously Art.21 of the Convention), a matter for the court first seised of the dispute,
does not alter the effect of s.9 (or the court’s exercise of its inherent jurisdiction
to grant a stay) provided that, as will usually be the case, the principal focus of the
proceedings is arbitration. If this is the case the arbitration exception in Arts 1(2),
9(d) of the Regulation will be triggered.'°°

7-025 Courses of action open to the court. As to determining whether the

matter is within s.9 of the Act, a number of courses are in principle open to the
court. They include’

@ ‘To determine on the available evidence that there is, or is not, an applicable
arbitration agreement and accordingly to grant or dismiss the application for
a stay; or

® to stay the legal proceedings pending a determination by the arbitral tribunal

of its own jurisdiction under s.30 of the Arbitration Act!®; or

*” “Legal proceedings” is used in the Arbitration Act 1996 to mean “civil proceedings in the High
Court or a County Court”: see s.82(1) of the Act.
** See s.4 of the Arbitration Act 1996 and Sch.1 to the Act for the mandatory provisions.
” Arbitration Act 1996, s.2(2).
°° Abu Dhabi Investment Co and Others v H Clarkson & Co Ltd (2006) EWHC 1282. In that case the
dispute did not fall within the scope of the arbitration agreement and a stay was refused.
'* Arbitration Act 1996, s.9(4). See para.7-046 for a commentary on this phrase.
'?'The Brussels’ regime refers to the Brussels Convention on Jurisdiction 1965 as subsequently
amended. The relevant rules are now contained in Council Regulation (EC) Regulation 44/2001.
The Regulation has direct effect which is recognised in Civil Jurisdiction and Judgments Order
2001 (SI 2001/3929) and is reflected in CPR 1.6.19.
' Av B [2006] EWHC 2006 at [87|-[97]. See also discussion of the scope ofthe arbitration exception
at para.7—013.
' Birse Construction v St David {1999| B.L.R. 194. Cited with approval in A-Naimi v Islamic Press
Agency, Inc [2000] 1 Lloyd’s Rep. 522 at 524; Anglia Oits Lid v Owners of Marine Champion (The
“Marine Champion”’) {2002| EWHC 2407 and by the Court of Appeal in Fiona Trust and Others v
Yuri Privalov & Others (2007) EWCA 20 at [37].
In Albon v Naza Motor Trading SDN BHD (No.3) [2007] EWHC 665, Lightman J. at [16],
expressed the view that this course could only be followed under the court’s inherent jurisdic
tion,
 Staying Court Proceedings q uwOo

© not to decide the question immediately but to give directions for an issue to
be tried; or

@ ‘To decide that there is no arbitration agreement and to dismiss the applica-
tion for a stay.'°°

Whilst the principle that the tribunal should determine its own jurisdiction is
firmly enshrined in s.30 of the Act, on occasions the court will nonetheless
effectively determine the tribunal’s jurisdiction when considering an application
for a stay. The Court of Appeal in Fiona Trust and Others v Yuri Privalov &
Others'®’ said that the presumption is that the tribunal should be left to determine
its own jurisdiction first if at all possible, “‘. . . it is contemplated by the Act that
it will, in general, be right for the arbitrators to be the first tribunal to consider
whether they have jurisdiction to determine the dispute’’.'°* These comments
were echoed by the Court of Appeal in Kazakstan v Istil Group Inc, “A party
which wishes to challenge the jurisdiction of the arbitrators must take the point
before the arbitrators, and will lose the right to challenge it before the court unless
it has taken the point before the arbitrators’’.!"” Jurisprudence on this issue is not
uniform however and it is clear that the courts will decide issues of jurisdiction,
especially where it is alleged that no agreement was concluded.'!° The court also
has an inherent jurisdiction (in addition to its jurisdiction under s.9) to grant a stay
of legal proceedings in certain circumstances,''! and will usually exercise this
jurisdiction when it is virtually certain that there is an arbitration agreement or
there is only a dispute about its scope but that the formal requirements of a s.9 stay
cannot be met.!!”

Conditions applied. When acting under its statutory jurisdiction under s.9 7-026
there are certain conditions applied by the court to an application for a stay. Those
conditions are considered in the following paragraphs.

There must be an arbitration agreement to which the section 7027

applies. The existence of an arbitration agreement must be shown, although as
explained below it is not necessary for its validity to be unchallenged.''* For these

106 The fourth ground is in reality a sub-set of the first ground.

107 12007] EWCA 20.
108 Piona Trust and Others v Yuri Privalov & Others [2007] EWCA 20 at [34]. Affirmed Premium Nafia
Products Lid & Others v Fili Shipping Co Ltd & Others [2007] UKHL 40. The Court of Appeal’s
decision in Fiona Trust has the rare distinction among arbitration cases of being reported in the
Financial Times. “Courts reinforce respect for arbitration process”, The Financial Times, January 29,
2007.
109 12007] W.L. 1425725, per Toulson L.J. at para.35. ;
110 See Albon v Naza Motor Trading SDN BHD (No.3) [2007] EWHC 665, per Lightman J. at
[20].
‘I! See para.7—055. ; . aA
1124 » B [2006] EWHC 2006; ALNaimi v Islamic Press Agency Inc [2000] 1 Lloyd’s Rep. 522 at 525,
Rep. I.R.
CA: see para.7-055, considered in 7 & N Lid v Royal & Sun Alliance Plc |2004] Lloyd’s
102.
113 Ahmed Al-Naimi v Islamic Press Agency [2000] 1 Lloyd’s Rep. 522 at 525, per Waller LJ.
 360 The Role of the Court

purposes “arbitration agreement” is defined as an “‘agreement” to submit to

arbitration present or future disputes, whether they are contractual or not.''* The
provisions of the Arbitration Act 1996 apply only where the arbitration agreement
is in writing,''® although the expression ‘“‘agreement in writing”’ is defined broadly
and includes an agreement contained in a written exchange of communication and
an agreement evidenced in writing.''® The agreement relied upon will usually be
produced to the court on the application to stay. The House of Lords has
suggested that an arbitration agreement can exist for these purposes if it 1s
contained in a matrix agreement the terms of which remained to be agreed.''® If
there is not an agreement to arbitrate but an agreement to submit disputes to other
forms of alternative dispute resolution without containing the ultimate require-
ment to arbitrate, the court will not be bound to grant the mandatory stay
contemplated by s.9 but will instead will adopt a discretionary approach equivalent
to that which prevailed in respect of arbitration before the enactment of the
Arbitration Act 1996.1!”

7-028 Existence and validity of the arbitration agreement. The exis-

tence''® of an arbitration agreement between the parties to the dispute must be
proved by the applicant'!’ in order to secure a stay of the court proceedings.'”° As
is explained below, the court now draws a distinction between existence of the
arbitration agreement, which is likely to be a matter for the court, (unless a stay
under the inherent jurisdiction is granted) and its validity, which wherever
possible should be left to the arbitrators. See Premium Nafta Products Ltd & Others
v Fili Shipping Co Ltd & Others [2007] UKHL 40, per Lord Hoffmann at [7],
noting that it was very unlikely that rational businessman would intend that the
question of whether the contract was repudiated should be decided by arbitrators
but the question of whether it was induced by misrepresentation should be

"+ Arbitration Act 1996, s.6(1) contains the principal definition which is adopted elsewhere in the Act.
See para. 1-033 above on what is and what is not capable of settlement by arbitration.
"5 Arbitration Act 1996, s.5(1) and see paras 2-002 and 2-038 above.
"6 Arbitration Act 1996, s.5(2) and see para.2—039 above.
"6 Premium Nafia Products Ltd & Others v Fili Shipping Co Ltd & Others [2007] UKHL 40.
'” For an example of the doctrine of a discretionary stay being considered see Thames Valley Power Ltd
v Total Gas & Pomer Ltd |2005] EWHC 2208, where the court declined to grant a discretionary stay
in favour of expert determination because it formed the view that the position of one of the parties
was untenable and a swift resolution of the dispute would be achieved if all claims were to be
determined immediately by the court.
''* The arbitration agreement must be in existence at the date of the commencement of the legal
proceedings: Traube v Perelman (July 25, 2001), Ch D, Jacobs J.; 4 v B [2006] EWHC 2006.
'' Premium Nafta Products Lid & Others v Fili Shipping Co Lid & Others [2007] UKHL 40. See also
Cigna Life v Intercaser SA [2002] 1 All E.R. (Comm) 235 where it was held that a contract of
re-insurance did not incorporate an arbitration agreement in respect of two of the parties to
proceedings. See also Pheonix Finance v FIA [2002] E.W.H.E. 1028, and para.2-012.
'° See Unum Life Insurance Co v The Israel Pheonix Ass Co (March 16, 2001), QBD (Comm.), Andrew
Smith J. (upheld on appeal), where the applicant for a stay failed to prove the existence of an
arbitration agreement that bound the claimant, and a stay was refused. For a similar case see Sun
Life Asurance Co of Canada v CX Reinsurance Co Ltd [2003] EWCA Civ 283 where the Court of
Appeal held that as the agreement for reinsurance containing the arbitration clause had never been
signed the parties had never intended to be bound by an agreement to arbitrate, and a stay under
s.9 was accordingly refused.
 Staying Court Proceedings 361

decided by a court.'*** The doctrine of separability, as discussed in Ch.2,!?!

enables the arbitration agreement to survive the termination by breach of any
contract of which it forms part . As the House of Lords noted in Lesotho Highlands
v Impregho SpA, “it is part of the very alphabet of arbitration law as explained in
Harbour Assurance Co (UK) Ltd v Kansa General International Insurance Co
Ltd... and spelled out in section 7 of the Act, the arbitration agreement is a
distinct and separable agreement from the underlying or principal contract’’.!??

Court or tribunal to decide? As noted above'?', the court has in essence 7-029
four courses open to it when faced with an application to stay court proceedings.
The options boil down to leaving the jurisdictional issue to be determined by the
tribunal itself or the court stepping in and deciding the jurisdictional issue, either
on witness statement evidence or after a trial of the issue. Even if the underlying
contract is alleged to be void or voidable, the parties are presumed to have wanted
their disputes resolved by an arbitral tribunal. In the light of the presumption of
“one-stop adjudication”’, the court will usually strive to give effect to the arbitra-
tion agreement by granting a stay of court proceedings and allowing the tribunal
to investigate whether the contract is valid, but it will not do so in every case.'**
In Fiona Trust and Others v Yuri Privalov and Others'?> the allegation of bribery
was in general terms and did not specifically impugn the arbitration agreement.
The court declined to decide the jurisdiction issue itself, referring the matter
instead to the arbitrators:

“Tf the arbitrators can decide whether a contract is void for initial illegality, there is no
reason why they should not decide whether a contract has been procured by bribery, just
as much as they can decide whether a contract has been procured by misrepresentation
or non-disclosure. [legality is a stronger case than bribery which is not the same as non
est factum or the sort of mistake which goes to the question of whether there was any
agreement ever reached. It is not enough to say that the bribery impeaches the whole
contract unless there is some special reason for saying that the bribery impeaches the
arbitration clause in particular. 99126

When the court will decide the jurisdictional issue. The court’s 7-030
approach will depend upon whether it is the matrix agreement that is challenged,
or whether the objection is specifically directed at the arbitration agreement itself.
If the existence of the arbitration agreement is challenged then as noted the court
will decide the issue itself. The court will decide the issue if it is alleged that the

120 Premium Nafta Products Ltd & Others v Fili Shipping Co Ltd & Others (2007] UKHL 40 at [17].
See also Lord Hope at [32]-[35].
'21 See paras 2-007 et seq. and s.7 of the Arbitration Act 1996.
127 (2006) Misa G22 kat, [21]:
123 At para.7-025.
124 This was the law even before the Arbitration Act 1996 came into effect: see Harbour Assurance Co
(UK) Lid v Kansa General Insurance Co Lid [1993] 3 All E.R. 897. It is reinforced by ss.7 and 30
of the Arbitration Act 1996.
'25 [2007] EWCA 20.
"26 Fiona Trust at [29].
 362 The Role of the Court

matrix agreement containing the arbitration agreement has been forged.'*” This
approach is justified on the basis that s.9(1) requires there to be an arbitration
agreement to be in existence for a stay to be granted.'*® A challenge to the
existence of the main agreement does not necessarily impugn the existence of the
arbitration agreement provided the court can be satisfied that the arbitration
clause has been agreed.'***
The court will also usually decide the jurisdictional issue itself if a specific
allegation has been made which directly impugns the agreement to arbitrate,
rather than the matrix agreement. This approach is justified on the basis that s.9(4)
requires a stay to be granted unless the arbitration agreement itself is null, void,
inoperative or incapable of being performed. Whilst the issue of whether there has
ever been a concluded arbitration agreement binding on the party against whom
a stay of English proceedings is the threshold point which is normally decided by
the courts, the circumstances may sometimes justify a stay under the inherent
jurisdiction of the court so as to enable the arbitrator to decide this issue.'?
However, if the arbitration agreement itself is not challenged the court will have
to ascertain only that an arbitration clause exists before granting a stay of the legal
proceedings; it should not usually determine questions relating to the validity of
the arbitration agreement before referring the matter to the arbitrators. As noted,
this applies even in situations where there is a claim to set aside the matrix
agreement on the grounds of fraud or bribery.'*°

7-031 Need for further evidence? If it is appropriate for the court to decide
jurisdiction itself, such as where there is a claim of non est factum, forgery in
relation to the matrix contract,'*°* denial that there was a concluded agreement"!
or a specific allegation of fraud or misrepresentation going to the arbitration
agreement itself, the court may be able to do so on the evidence before it.'*? On
the majority of occasions however it will have to give directions for service of
evidence for that purpose, if necessary staying the proceedings pending determi-
nation of the issue. However, if the court’s preliminary view is that a detailed
enquiry 1s likely to find that a valid arbitration agreement does exist, the court

'*7 See Premium Nafta Products Ltd & Others v Fili Shipping Co Ltd & Others [2007] UKHL 40, per
Lord Hope at [34]. Albon v Naza Motor Trading SDN BHD (No.3) [2007] EWHC 665.
8 4 v B [2006] EWHC 2006 at [107].
= Premium Nafta Products Ltd & Others v Fili Shipping Co Ltd & Others [2007] UKHL 40 at
[18].
'” Av B [2006] EWHC 2006 at [109]; Eri Fans Ltd v NMB (UK) Ltd [1987] 1 W.L.R. 1110; Al Naimi
v Islamic Press Agency 2000] 1 Lloyd’s Rep. 522.
'°° Fiona Trust and Others v Yuri Privalov and Others [2007] EWCA 20 at [23]. Affirmed Premium Nafta
Products Ltd & Others v Fili Shipping Co Ltd & Others [2007] UKHL 40.
8 Albon v Naza Motor Trading SDN BHD (No.3) 2007] EWHC 665.
8) As in Sun Life Assurance Co of Canada v CX Reinsurance Co Ltd [2003] EWCA Civ 283, and
Ghidepath Holding BV v Thompson [2005] 1 All E.R. (Comm) 434.
'? Stretford v Football Association Ltd (2006) EWHC 479, where the court concluded that the
respondent was bound by an agreement to arbitrate.
 Staying Court Proceedings 36 o>)

should not determine that issue itself but stay the court proceedings and leave the
matter to the arbitrator.'**

Trial of the issue. If the court feels it has no option but to decide the matter 7-032
of jurisdiction itself, it may direct a trial of the issue rather than decide the matter
on the basis of witness statements.'** Indeed, it has been suggested that it will be
a “rare case” in which it is appropriate for the court to resolve issues of fact on
written evidence alone, unless the parties agree.'*> Consideration of whether to
order a trial of the issue will depend in many cases on whether its resolution will
involve findings of fact which impact upon substantive rights and obligations of
the parties which are already in issue, and on whether the trial is likely to
encompass a broad area of investigation. If either of these questions is answerable
in the affirmative then the appropriate course will likely be for the tribunal to
resolve the issue.'*° However, the court may take the view that if the issue turns
on a pure question of construction, which does not involve a wide ranging factual
enquiry, then it would be both unfair and inefficient to require the applicant to go
before the tribunal with his objections. In light of the more recent decisions in
Fiona Trust and A v B the question of construction would have to go specifically
to initial invalidity of the arbitration agreement.'*’ As noted the presumption
should be (and indeed usually is) that the tribunal should be left to determine its
own jurisdiction if at all possible subject to the noted qualifications concerning the
existence of the agreement to arbitrate and that the issue is within the scope of the
arbitration agreement.'**

Effect of potential section 67 challenge. The possibility of a sub- 7-033

sequent s.67 challenge to an award on jurisdiction should not militate in favour of
the court deciding the jurisdictional issues upon a s.9 application being made. If
the evidence relevant to the jurisdictional issue is likely to be difficult to contain
and is likely to impinge upon matters relevant to the substance of the dispute, the
possibility of asubsequent s.67 application is a “risk worth taking”’, especially as
the tribunal will then be in a strong position to resolve the substantive issues

133 See the comments of Waller L.J. in Ahmed AL-Naimi v Islamic Press Agency [2000] 1 Lloyd’s Rep.
522 at 525, made in the context of the court’s inherent jurisdiction but nonetheless providing useful
guidance. See also CPR 1.62.8(3). ‘ nie
134 This course was adopted in Albon v Naza Motor Trading SDN BHD [2007] EWHC 665, Lightman

135 See the comments of Chadwick L.J. in Ahmed AL-Naimi v Islamic Press Agency [2000] 1 Lloyd’s Rep.
,
J

522.
1364] Naimi v Islamic Press Agency [2000] 1 Lloyd’s Rep. 522, CA. Ua ink
137 See for example Law Debenture Trust Corp Ple v Elektrim Finaace BV [2005] 2 Lloyd’s Rep. 755 at
765-766. ene i ;
branch
138 The suggestion that arbitrators should not decide jurisdiction in the face of “root and
objections to their jurisdiction”, per Mann J. in Law Debenture Trust is not, we suggest, a valid
the
consideration nor one which finds any support in the Act. The comments of Mann J. on
Trust
jurisdictional approach of the court must now be read in the light of the decisions in Fiona
(including the House of Lords in Premium Nafia Products) and A v B.
 364 The Role of the Court

quickly." To some extent there will almost always be the risk on any s.9
application of a subsequent challenge under s.67 of the Act, so if the court paid
undue attention to this consideration it would invariably err on the side of
deciding jurisdictional issues itself, which as the Court of Appeal and the House
of Lords made clear in Fiona Trust v Yuri Privalov Premium Nafta Products is the
exception and not the rule under the Act.

7-034 The applicant must be a party to the arbitration agree-

ment.!*° Before the Arbitration Act 1996 was passed, it was unclear whether a
party to the legal proceedings could obtain a stay notwithstanding that he was not
a party to the arbitration agreement or a person claiming through or under a party
to the arbitration agreement.'*' The terms of s.9 of the Act remove any doubt and
make clear that the application to stay must be made by a party to the arbitration
agreement.
Where there are several defendants any one of them who is a party to an
arbitration agreement with the plaintiff can make the application to have the action
stayed. It is not necessary that all the defendants should join in the application.
The action will only be stayed under s.9 as against those defendants who are a
party to the arbitration agreement, although the other defendants may seek a stay
of the action on case management grounds alone.

7-035 Scope of arbitration clause. The dispute which arises or has arisen
between the parties must fall with the scope of the arbitration clause.'** Otherwise
a stay of the legal proceedings will not be granted under s.9 of the Act, even
though a valid arbitration agreement exists between the parties.'** although a stay
may be granted pursuant to the court’s inherent jurisdiction.'** Usually, arbitra-
tion agreements are drafted in wide terms but if they are in narrow terms the court
will not stay proceedings which appear to be outside the agreement to arbitrate. So
where claims for fraudulent misrepresentation were found by the court to be
outside the proper scope of an agreement to arbitrate disputes in Abu Dhabi no
stay would be granted.'** When faced with issues relating to the separability of the

'8° See for example the comments of Waller L.J. in ALNaimi v Islamic Press Agency [2000] 1 Lloyd’s
Rep. 522, CA at p.6 of the judgment. For the contrasting and apparently now out-dated view see the
comments of Mann J. in Law Debenture Trust Corp Ple v Elektrim Finance BV [2005] 2 Lloyd’s Rep.
755 at 766.
140
See paras 3-016 ef seg. on substituted parties.
"1 In Roussel-Uclaf v GD Searle & Co Lid [1978] 1 Lloyd’s Rep. 225, the court got around this
difficulty by holding that the first defendant, which was not a party to the arbitration agreement,
was claiming “through or under” its parent company to whom a stay was also granted, but that
decision is not free from criticism—see Grupo Torras v ALSabah [1995] 1 Lloyd’s Rep. 374.
'? This proposition was accepted in Re Vocam Europe Lid [1998] B.C.C. 396 at 398, although it failed
on the facts of that case. However, it succeeded in Sonatrach Petroleum Corp v Ferrell International
[2002] 1 All E.R. (Comm) 627.
"STEN Ltd v Royal & Sun Alliance Ple [2004] Lloyd’s Rep. 102, although in this case there was also
an issue as to whether one of the defendants was a party to the arbitration agreement (see para.19
of the decision).
‘This possibility was considered in the 7&N case, but not pursued. See para.7—055.
"S Abu Dhabi Investment Co and Others v H Clarkson & Co Ltd [2006] EWHC 12352.
 Staying Court Proceedings 365

arbitration agreement the court will usually first consider the scope of the
arbitration agreement before proceeding to consider issues of separability.'*°

Approach of the court. The court has provided guidelines on its approach 7-036
as to what is covered by the arbitration agreement. Old authorities seeking to draw
nice distinctions between differently worded clauses, such as “arising out of”,
“arising under”’, “arising in connection with” are no longer relevant in the light
of the guidelines set out by the Court of Appeal in Fiona Trust v Yuri Privalov,
where the court said “the time has now come for a line of some sort to be drawn
and a fresh start made at any rate for cases arising in an international commercial
context”. This approach was fully endorsed by the House of Lords, affirming the
Court of Appeal’s decision.'*”
In Ashgar and Others v The Legal Services Commission and Another'** proceed-
ings were commenced for a variety of causes of action including breach of
contract, trespass and conspiracy. The agreement to arbitrate covered “‘all dis-
putes... concerning alleged breaches of the Contract’. The court found that
resolution of the contractual claims could not sensibly be divorced from resolution
of the non-contractual claims and determined that all the causes of action main-
tained by the claimant should be covered by the stay. The highly unattractive
alternative would have been to allow the closely related non-contractual claims to
be determined by the court whilst the contractual claims were referred to arbitra-
tion. Separate proceedings under regulatory legislation allowing a regulatory body
to seek disclosure of documents would also be stayed where there was a pending
arbitration during the course of which documents would be disclosed.'*”

Claims against the tribunal. Section 9(1) does not apply however in the 7-037
unusual situation where one of the parties to the arbitration agreement brings
claims against the tribunal for a declaration or injunction against the tribunal on
the grounds of invalidity of the arbitration agreement or of its appointment. ‘The
issue of the appropriateness of a stay in these circumstances will fall to be
considered under the court’s inherent jurisdiction.'?®

Stays regarding optional clauses. It is now clear that a stay will be 7-038
ordered to protect a unilateral option to arbitrate even where the contract in
question also submits disputes to the English Courts, subject to one party’s option
to arbitrate.'5' A stay will not be ordered in the converse situation, namely where

146 Pigna Trust v Yuri Privalov and Others [2007] EWCA 20 at [18]-{19]; affirmed, Premium Nafta
Products Ltd & Others v Fili Shipping Co Lid & Others \2007| UKHL 40. .
'47 See para.2-074. Fiona Trust v Yuri Privalov and Others [2007] EWCA 20 at [17]. Affirmed, Premium
Nafta Products Ltd & Others v Fili Shipping Co Lid & Others [2007] UKHL 40. Birse Construction
Lid v St Davids Ltd [1999] B.L.R. 194, approved in A-Naimi v Islamic Press Agency {2000] 1
Lloyd’s Rep. 522, CA. mt? '
48 [2004] EWHC 1803. See also Legal Services Commission v Aaronson [2006] EWHC 1162 at [28].
149 Legal Services Commission v Aaronson [2006] EWHC 1162.
1504 v» B [2006] EWHC 2006 at [74].
51 NB. Three Shipping v Harebell Shipping Ltd [2005] 1 Lloyd’s Rep. 509.
 366 The Role of the Court

there is a broad agreement to arbitrate subject to one party’s right to bring

proceedings before the English courts and that party wishes to assert its right to
litigate. In both of these situations involving optional rights, provided a party
wishing to exercise his option has not waived his right to do so, such as by
participating in the other proceedings, then the optional rights will be given effect
to.'>? Accidents of timing or attempts by one party to jump the gun by starting its
preferred set of proceedings first will not dictate the court’s approach, so it does
not matter for example if a party who wishes to stay court proceedings in favour
of arbitration pursuant to an effective option in these terms fails to start arbitra-
tion proceedings before the court proceedings.'”*

7-039 Legal proceedings must have been brought against the appli-
cant in respect of a matter to be referred. There must be legal
proceedings, which is defined in the Act to mean “civil proceedings in the High
Court or a County Court in England and Wales and Northern Ireland”’.'** Service
of a demand for payment of a debt under the Insolvency Act, known as a statutory
demand, has been held not to be legal proceedings for the purpose of seeking a stay
under s.9 of the Act.'** By contrast, a winding up petition is a species of legal
proceeding but is not brought by way of claim or counterclaim, required by the
bracketed words in s.9(1), and hence outwith the scope of the section.'°® Fur-
thermore, a petition by shareholders for relief from unfairly prejudicial conduct
under s.459 of the Companies Act 1985 would not be stayed under s.9 because
statutory rights of shareholders to petition the courts for relief are inalienable and
cannot be diminished or removed by contract.'*’ Employment tribunal proceed-
ings are also not caught by s.9, because Pt I of the Arbitration Act 1996 does not
apply to proceedings before an employment tribunal.'**

2 Law Debenture Trust Corp Ple v Elektrim Finance BV [2005] 2 Lloyd’s Rep. 755.
'S3 See the discussion of timing of proceedings in Lam Debenture Trust Corp Ple v Elektrim Finance BV
[2005] 2 Lloyd’s Rep. 755, per Mann J. at [43]}-[47]. The court was keen to avoid endorsing ‘‘an
unseemly scramble” to be the first to start proceedings ([45]). See also the earlier decision Whiting
v Halverston [2003] EWCA Civ 403 where the court decided that a party who had exercised his
option to arbitrate could not oppose a stay of court proceedings by resiling from his election.
'54 The term is defined in s.82(1) of the Arbitration Act 1996. See also s.2(1) of the Arbitration Act
1996.
5 Shalson v DF Keane Ltd [2003] EWHC 599. The court rejected a submission in this case to the
effect that as the statutory demand would lead to bankruptcy proceedings which were legal
proceedings within the terms of s.82 of the Arbitration Act 1996 and that a stay could then be
granted, the ‘““doomed process” should be “nipped in the bud” by the granting of a stay at the
statutory demand stage, per Blackburne J. at [18]-[21].
6 Best Beat Lid v Rossall |2006) EWHC 1494 at [15]. The judge’s findings on this point are obiter.
'97 Exeter City AFC Lid v Football Conference Ltd [2004] 1 W.L.R. 2910.
8 Section 6(2) of the Employment Tribunal Act 1996 and Arbitration Act 1996, Sch.3, para.62.
Section 8 of the Employment Rights (Dispute Resolution) Act 1998 limits the circumstances in
which a pre-existing agreement to arbitrate is effective to prevent the bringing of a claim under
certain employment legislation (such as the Sex Discrimination Act, Race Relations Act, Disability
Discrimination Act or the Employment Act). It applies in relation to arbitration agreements entered
into after August 1, 1998.
 Staying Court Proceedings 367

Stay of part only of legal proceedings. An application may be made 7-040

to stay some part of legal proceedings, even where other parts are not subject to
an agreement to arbitrate. The legal proceedings will continue in respect of those
other parts. This may occur, for example, where the claims are made in contract
and in tort and the scope of the arbitration agreement is confined to contractual
claims. The applicant for a stay will have to show that the legal proceedings have
been brought against him (as opposed to any other party) and that they deal with
a dispute which falls within the terms of the arbitration agreement. If they do not,
because, for example, the dispute arises not out of the contract containing the
arbitration clause, but out of another contract which has no such clause,!*’ the
court will have no jurisdiction to grant a stay under s.9 of the Act.

Arbitration need not have started. There is no requirement that the 7-041
reference to arbitration must have been started. This is clear from the words in
s.9(1), ‘“‘a matter which under the agreement is to be referred to arbitration’’.!°°
Despite this, on occasion the courts apparently have placed some weight on the
fact that arbitration has not been and indeed might never be started.'°' Indeed,
the fact that the dispute cannot immediately be referred to arbitration, because the
exhaustion of other dispute resolution procedures is first required,'®* will not
prevent the court from ordering a stay.'®* For.example, in a situation where a
disputes procedure required a process of internal review, followed by mediation
which in turn was followed by arbitration if necessary, it did not matter that the
initial processes of review had not been undertaken at the time proceedings were
commenced such that there was no arbitration underway at the time the legal
proceedings were commenced nor at the time of the application for a stay. There
was a clear agreement within the terms of s.6 of the Act to submit future disputes
to arbitration and hence a stay would be granted to protect the ultimate agreement
to arbitrate. !°*

There must have been an acknowledgement of service in the 7-042

legal proceedings. Section 9 of the Act refers to the procedure for acknow-
ledgement of service of the claim form or other process which initiated the
proceedings in court. The application for a stay cannot be made until service of the

'59 This possibility was considered in AL Naimi v Islamic Press Agency, ibid., although in that case the
court proceedings were stayed because the court found that the dispute fell within the scope of the
arbitration clause.
160 Enco Civil Engineering Lid v Zeus International Development Ltd [1991] 56 B.L.R. 43 approved by
the Court of Appeal in Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd (1992) Q.B 656
and subsequently affirmed by the House of Lords [1993] A.C. 334.
161 Shalson v DF Keane Ltd [2003] EWHC 599 at [18]{19].
162 Ag is common, for example, in construction contracts where there is a reference in the first instance
to adjudication and only after that decision, or the failure to make a decision within a specified time
period, is the dispute referred to arbitration.
163 Arbitration Act 1996, s.9(2) which followed the decision in Channel Tunnel Group Ltd and Others v
Balfour Beatty Construction Ltd and Others [1993] 1 Lloyd’s Rep. 291, HL.
164 Ashgar and Others v The Legal Services Commission and Another [2004] EWHC 1803.
 368 The Role of the Court

originating process has been acknowledged by the applicant.'®” Where the court is
asked to grant leave to serve proceedings out of the jurisdiction, and evidence is
submitted that the dispute in question is governed by an agreement to arbitrate
and the parties to be served would be likely to apply for a s.9 stay, no leave to serve
out should be granted. To do otherwise would be an exercise in futility.’°°

7-043 The party making the application must not have taken any
step in the proceedings to answer the substantive claim.'®’ By
serving a defence or taking other steps in the proceedings that answer the
substantive claim'®* a party submits to the jurisdiction of the court in respect of
the claim and will not thereafter be able to obtain a stay requiring the other party
to pursue his claim, if at all, by arbitration. In other words, by accepting the
court’s jurisdiction to hear the substantive case he is treated as electing to have the
matter dealt with by the court rather than insisting on his contractual right to
arbitrate. The same applies to a counterclaim, and a party seeking to stay a
counterclaim must not have taken any step in connection with the proceedings by
way of counterclaim.'®? When an amendment is introduced into existing proceed-
ings and a stay is then sought, the defendant not having objected to the original
proceedings, the question for the court is whether the matters introduced by the
amendment were part and parcel of the dispute of which the court was already
seised, or whether they were discrete matters in respect of which s.9 entitles the
defendant to insist that they are arbitrated.'”°
The requirement is not to take ‘‘any step”’ in the proceedings. It is a lower test
than that for proceedings under s.72 which is only available to a party ‘“‘who takes
no part in the proceedings”.'’! A step in the proceedings must, however, be one
which “impliedly affirms the correctness of the legal proceedings and the will-
ingness of the defendant to go along with a determination by the courts instead of
arbitration”’.'’* First, the conduct of the applicant (and defendant to the legal
proceedings) must be such as to demonstrate an election to abandon his right to
a stay in favour of allowing the action to proceed. Second, the act in question must
have the effect of invoking the jurisdiction of the court.'7* Further, an act which
would otherwise be regarded as a step in the proceedings will not be treated as

'65 Arbitration Act 1996, s.9(3). For acknowledgment of service, see CPR Pt 10.
166 46 Bv C&D [1982] 1 Lloyd’s Rep. 166, at 171, 172, a decision under s.1 of the Arbitration Act
LOTS;
'67 Arbitration Act 1996, s.9(3).
'°8 Certain assertions in an answer to American proceedings were not considered to be a step in the
proceedings: Thyssen v Calypso {2000} 2 Lloyd’s Rep. 243 at 247. Similar considerations may apply
where there is no provision in a foreign court’s procedure for doing anything other than filing a
defence.
"© Chappell v North [1891] 2 Q.B. 252; Radio Publicity (Universal) Lid v Cie Luxembourgeoise de
Radiodifusion [1936] 2 All E.R. 721.
Ahad and Another v Uddin [2005| EWCA 883.
'7! See para.8-053. See also Lam Debenture Trust v Elektrim Finance BV [2005] EWHC 1412.
' Fagle Star v Yuval [1978] 1 Lioyd’s Rep. 357, per Denning M.R. at 361, which was followed in
Kuwait Airways v Iraq Airways |1994| 1 Lloyd’s Rep. 276.
'5 "These two propositions of Mustill & Boyd were adopted with approval in Pate/ v Patel [1999] 1 All
E.R. (Comm.) 923 at 925.
 Staying Court Proceedings 369

such if the applicant has specifically stated that he intends to seek a stay.!7* Thus,
a party who applied for leave to defend as well as asking for a default judgment to
be set aside did not take a step in the proceedings,'’° nor did someone who applied
for summary judgment “‘in the event that its application for a stay was unsuccess-
ful”.!”° An action taken to resist an interim injunction would also not be a step in
the proceedings,'”” nor would the making of an application for interim relief to the
court (provided the purpose of the application related to the arbitral proceed-
ings'’*), whereas applying for disclosure!’ of documents or asking for an order for
particulars of the substantive claim will constitute a step in the proceeding.
Unsurprisingly, an application for a stay is not itself asubmission to the jurisdic-
tion of the court.'*°

Making the application to stay. In order to apply to stay legal proceed- 7-044
ings commenced in breach of an arbitration agreement, the defendant must first
acknowledge service of the claim form.'*' Then, without taking a further step in
the proceedings to answer the substantive claim, the defendant should promptly
make an application to stay those proceedings.'**

Service of application to stay legal proceedings. An application 7-045

under s.9 of the Arbitration Act 1996 must be served on the party bringing the
relevant legal proceedings and on any other party to those proceedings.'** Provi-
sion is also made in the rules for service on a party who has not given an address
for service.!5*

Null and void, inoperative, or incapable of being performed. 7-046

Where the conditions mentioned in the preceding paragraphs are satisfied the
court must make an order under s.9 of the Act staying the proceedings unless
either:

@ The court is satisfied, on the standard of proof set out later in this section,
that the arbitration agreement is null and void. This will be the case where
the arbitration agreement (as opposed to the matrix agreement) was never

'74 Patel v Patel [1999] 1 All E.R. (Comm) 923.

175 Patel v Patel [1998] 3 W.L.R. 322, CA.
'76 Capital Trust v Radio Design [2002] 2 All E.R. 159, CA.
7 Roussel-Uclaf vGD Searle & Co Ltd [1978] 1 Lloyd’s Rep. 225.
8 Glidepath BV v Thompson [2005] 2 Lloyd’s Rep. 549.
'79 Parker, Gaines & Co Ltd v Turpin [1918] 1 K.B. 358.
180 E¥nnish Marine Insurance Co Ltd v Protective National Insurance Co [1989] 2 Lloyd’s Rep. 99.
'81 See para.7—042 above. :
'82 The application is in Form 8 and is made to the court in which the legal proceedings are pending
(see Appendix 1). The procedure for arbitration applications generally is described in paras 7-009
el seq.
'83 CPR 1r,62.8(1): see para.8—189.
'S4 CPR 1.68.2(2). See para.8-189.
370 The Role of the Court

entered into'®® or where it was entered into but has subsequently been found
to have been void ab initio. In Stretford v Football Association'®® the Court of
Appeal rejected an argument that the agreement to arbitrate was null and
void by reason of art.6 of the Convention for the Protection of Human Rights
and Fundamental Freedoms.'*’ The Court of Appeal found that the right to
a public hearing by a tribunal established by law was capable of being waived
provided the arbitration agreement was entered into without constraint.
e@ The court is satisfied, on the standard of proof set out later in this section,
that the arbitration agreement is inoperative or incapable of being performed.
It will be inoperative where, for example, the arbitration agreement has been
repudiated or abandoned'** or it contains such an inherent contradiction that
it cannot be given effect.'*? An arbitration agreement will be incapable of
performance where, even if the parties were both ready, willing and able to do
so, it could not be performed by them.'”° Poverty of the proposed claimant
will not render the arbitration agreement incapable of being performed,"”’
nor will inability of the party seeking the stay to satisfy any subsequent
award.'°?

The phrase “‘null and void, inoperative, or incapable of being performed” which
appears in s.9(4) of the Act is taken directly from Art.II.3 of the New York
Convention.'?? The burden of proving that any of the grounds in s.9(4) of the Act
has been made out lies upon the claimant (in the proceedings, i.e. the respondent
to the stay application), and, if the defendant/applicant can raise an arguable case
in favour of validity, a stay of the proceedings should be granted and the matter
left to the arbitrators.'"*
A stay will not be refused on the grounds that a particular right or remedy
which might have been granted by the court will not be available in arbitration
proceedings.'?°
If a defendant in court proceedings (i.e. the applicant in the stay application)
asserts as a defence of set-off a cross-claim under a separate agreement which

'5 In Sunlife Assurance Co of Canada v CX Reinsurance Co Ltd [2004] Lloyd’s Rep. IR. 58, the Court
of Appeal found on the evidence that an arbitration agreement had not been concluded and upheld
a dismissal of an application to stay court proceedings.
86 12007] Bus. L.R. 1052.
'*7 Incorporated into domestic legislation by the Human Rights Act 1998, Sch. 1, Pt 1, art.6.
'88 See para.2-118. and Elektrim v Vivendi Universal [2007] EWHC 11 at [123]-[132]. In Downing v
Al Tameer |2002| EWCA Ciy 721 the defendant denied the existence of any contractual relationship,
following which the claimant started court proceedings. The Court of Appeal found on the facts
that the defendant had repudiated the arbitration agreement and refused the defendant’s application
to stay the court proceedings. See also Traube v Perelman [2001] W.L. 1251816.
'8% See the pathological arbitration clauses referred to in para.2—003.
Fanos Paczy v Haendler & Natermann GmbH [1981] 1 Lioyd’s Rep. 302, CA.
Neal,
2 An argument to the contrary was rejected by Sheen J. and not pursued in the Court of Appeal in
The “Tuwyutr”’ [1984] Q.B. 838 at 842-843.
' For the New York Conyention and its ratification by the UK see paras 8-021 er seq.
* Hume v AA Mutual International Insurance [1996] L.R.C.R. 19; Downing v Al Tameer {2002] EWCA
Civ 721; Albon v Naza Motor Trading SDN BHD (No.3) [2007] EWHC 665 at [23].
° Société Commerciale de Réassurance v Eras (International) Ltd and Others {1992] 1 Lloyd’s Rep. 570,
CA.
 Staying Court Proceedings 371

refers disputes to arbitration, then the defendant’s application for a stay of the
court proceedings can only be resisted if the claim which is to be arbitrated
operates in total or partial extinction or defeasance of the claim being advanced by
the claimant. If it does not, then a stay will be granted.'%°

Existence of a dispute.'”’ Before the Arbitration Act 1996 was enacted a 7-047
stay of legal proceedings, even in the case of anon-domestic arbitration agreement,
would not be granted if the court was satisfied that there was in fact no substantive
dispute between the parties with regard to the matter agreed to be referred. This
situation arose out of a controversial provision in a previous Arbitration Act,!°%
which has been repealed and gave rise to a body of cases in which the alleged
absence of a defence to a claim was said to mean there was in fact no dispute
between the parties. As a result of the repeal the court may no longer refuse to
grant a stay where, for example, there is no arguable defence to the claim. The
previous case law on the subject can be disregarded. Once the court is satisfied that
there is a dispute, it is obliged under s.9 of the Arbitration Act 1996 to grant the
defendant a stay of the legal proceedings unless the arbitration agreement is null
and void, inoperative or incapable of being performed. For the purposes of s.9, the
word “‘dispute”’ is to be given its ordinary meaning and includes any claim which
the other party refused to admit or did not pay, whether or not there is any answer
to the claim in fact or in law.

Third parties involved. There is no longer any scope for the court refusing 7-048
a stay of proceedings on the ground that third parties are involved and that it
would be preferable for the dispute to be dealt with in one forum to avoid the
possibility of inconsistent decisions.'?? In Abu Dhabi Investment Co v H Clarkson*°°
legal proceedings would have continued against other defendants not party to the
agreement to arbitrate even if the court had granted a stay of proceedings in
relation to certain defendants. This factor could not be taken into account by the
court when deciding whether or not a stay should be granted. Further, the court
will uphold the right to a stay notwithstanding the fact that a claim against a third
party is not within the reference to arbitration.*”'
On the other hand, the court does have an inherent jurisdiction to stay court
proceedings brought in England against a third party by a claimant involved in
arbitration proceedings with another party, even if the arbitration proceedings are

196 Prekons Insaat Sanyt As v Rowlands Castle Contracting Group [2007] 1 Lloyd’s Rep. 98.
'°7 See further para.5—003, existence of a dispute.
198 Arbitration Act 1975, s.1(1), replaced by the Arbitration Act 1996, s.9(4).
1° See Bulk Oil (Zug) AG v Trans Asiatic Oi! Ltd [1973] 1 Lloyd’s Rep. 129 and the authorities
reviewed in that decision, including 7aunton Collins v Cromie [1964] I W.L.R. 633. See also Coltman
Precase Concrete Ltd v W & J Simons (Contractors) Ltd (1993) 35 Con. L.R. 127; John Rem and
Others v Malcolm John Cox and Others, The Times, November 29, 1995 and also Berkshire Senior
Citizens Housing Association v McCarthy E Fitt and National Westminster 13 B.L.R. 27. ;
200 £2006] EWHC 1252 at [28]. On the facts of that case no stay was granted and so the prospect of
further fragmentation of proceedings did not arise. é
201 Wealands v CLC Contractors [1999] 2 Lloyd’s Rep. 739, CA, when it was argued that the arbitrator
could not award the contribution claimed—see para.6-125.
 B70) The Role ofthe Court

being conducted abroad.””? Such a stay will only be granted in exceptional and
compelling circumstances and will not be allowed to stifle the claim indefinitely.

7-049 Poverty of defendant. Poverty is not itself a ground for refusing to grant a
stay,”°> although, if the poverty is caused by a breach of the contract on the part
of the defendant, that may alter the position.*°* When deciding whether to grant
a stay, the court may not take into account the fact that the claimant would be
unable to receive legal aid for arbitration proceedings.*””

7-050 The imposition of conditions. In John Mowlem & Co Ple v Carlton Gate
Development Co Ltd,?°° the judge indicated that he would exercise his discretion to
grant a stay only subject to the condition that the arbitrator should be legally
qualified and have knowledge of the building industry. As the court does not have
a discretion under s.9 of the Arbitration Act 1996, this approach would not now
be followed unless perhaps the stay is being granted pursuant to the court’s
inherent jurisdiction.?°”

7-051 Adjudicator’s decision. An application to stay court proceedings pursuant

to s.9 of the Act will not prevent the court enforcing a decision of an adjudica-
tor,”’* even though arbitration is the contractually agreed method of dispute
resolution. “Ultimately, a dispute may be determined by arbitration, but that does
not prevent enforcement of the temporary decision of an adjudicator”’.?”

7-052 Refusal to stay. Where the court refuses to stay legal proceedings the dispute
will be determined in those proceedings and not by arbitration. Any term in the
arbitration agreement making an award a condition precedent to the bringing of
legal proceedings*!'® will have no effect in respect of those proceedings.*!!

* Reichold Norway v Goldman Sachs Intl [2000] 1 W.L.R. 173. In this case, it was argued that the
primary claim lay against the defendant to the arbitration and that there was no sensible reason for
the claimant to pursue the English action against the third party. Distinguished in Mabey & Johnson
Lid v Laszlo Danos and Others (2007) EWHC 1094. See also para.7—055 below.
°° Edwin Jones v Thyssen (GB) Ltd [1991] 57 B.L.R. 116; Smith v Pearl Assurance {1939] 1 All E.R.
95.
°° Fakes v Taylor Woodrom Construction Ltd [1973] Q.B. 436; Chrisphine Othieno v Cooper and Cooper
[1991] 57 B.L.R. 128; Goodman v Winchester & Alton Railway Ple [1985] 1 W.L.R. 141; Andrews
(Trustees) v» Brock Builders Lid |1997| 3 W.L.R. 124. These decisions were made before the
Arbitration Act 1996 and it is doubtful if they would be followed.
°° Edwin Jones v Thyssen (GB) Ltd [1991] 57 B.L.R. 116, followed in Al-Naimi v Islamic Press Agency
[2000] 1 Lloyd’s Rep. 522, overruling Fakes v Taylor Woodrow Construction Lid [1973] Q.B. 436 on
this point.
206 11979] 51 B.L.R. 104, CA.
2°7 Paragraph 7-055 below.
“8 Adjudication is dealt with at paras 2-032 et seq.
2 Comsite Projets Lid v Andritz AG [2003] EWHC 958.
*!'This condition precedent in an arbitration agreement is known as a Scott v Avery clause: see
para.2—016.
21 Arbitration Act 1996, s.9(5).
 Staying Court Proceedings 373

Appeal. An appeal to the Court of Appeal lies against the court’s grant or 7-053
refusal of a stay of legal proceedings.*'* As the judge’s decision is interlocutory,
leave to appeal to the Court of Appeal is required.*!°

Interpleader proceedings. Where someone does not dispute a claim but 7-054
does not know who to pay because of competing claims, he may seek relief from
the court by way of interpleader.*'* If the court grants that relief and the issue
between the claimants falls within the scope of an arbitration agreement to which
they are parties, the court will refer the issue to arbitration and stay the legal
proceedings unless the circumstances are such that legal proceedings brought by
the claimants would not be stayed.*!* If the court does not grant a stay, any
condition precedent about obtaining an award before bringing legal proceedings
will not affect the determination of the issue by the court.*!°
It is apparent from the terms of s.10(1) of the Arbitration Act 1996 that in
determining an application for a stay under this section the court will apply the
relevant conditions discussed above?!’ in respect of s.9 of the Arbitration Act
1996.718
Both ss.9 and 10 apply even if the seat of the arbitration is abroad or no seat has
been designated or determined.*'”

Stay under the court’s inherent jurisdiction. The court also has an 7-055
inherent jurisdiction to stay proceedings brought in breach of an agreement to
decide disputes by arbitration.” It is rarely necessary to invoke this power in view
of the statutory jurisdiction. However, the tool is a useful one as it allows the court
to stay proceedings where the strict requirements of s.9 cannot be met.**! The
inherent jurisdiction may be appropriate though where:

1. The court cannot be certain that an arbitration agreement exists as is

required for a stay under s.9 but there is an issue whether the parties

212 Inco Europe Ltd v First Choice Distribution [2000] 1 W.L.R. 586, HL.
213 Inco, ibid. at 588. See CPR Arbitration PD 20 for application for permission to appeal.
214 See generally RSC Ord.17 in Sch.1 to CPR.
15 Arbitration Act 1996, s.10(1).
16 Arbitration Act 1996, s.10(2).
217 Paragraphs 7-026 ef seq.
218 Bakwin Eire International Trading Co Inc v Sothebys, QBD, Master Rose, November 22, 2005.
219 Arbitration Act 1996, s.2(2).
HL;
220 Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] 1 Lloyd’s Rep. 291,
Al-Naimi v Islamic Press [2000] 1 Lloyd’s Rep. 522, per Waller L,J. at 525; Legal Services Commission
v Aaronson [2006] EWHC 1162 at [36}-[37].
Nu N
A v B [2006] EWHC 2006, which exemplifies a broader approach to the use of the jurisdiction.
Contrast the more restrictive comments of Lightman J. in A/bon v Naza Motor Trading SDN BHD
to order
[2007] EWHC 665. at [24], “... the court should only exercise its inherent jurisdiction
the
such a stay and decline to decide the issue of the conclusion of the arbitration agreement or of
be
scope of the arbitration agreement in an exceptional case. The inherent jurisdiction should
agree-
exercised with particular caution where the issue is as to the conclusion of the arbitration
ment”.
374 The Role of the Court

entered into a binding agreement to arbitrate or whether the subject

matter of the action is within the scope of the arbitration.” The court will
however usually need to be virtually certain that there was an agreement
to arbitrate before exercising its discretion under the inherent jurisdic-
foie

2. It is alleged that the arbitration agreement itself (rather than the matrix
agreement) was induced by a misrepresentation, whether fraudulent or
otherwise.**

3. Related claims extending beyond the parties to an arbitration but involving

parties closely connected to those parties are brought and it would be
wasteful of costs and risk conflicting outcomes to allow the closely related
legal proceedings to proceed in tandem with the arbitration.**° It is not
enough however that the claims involving third parties not party to the
agreement to arbitrate raise similar issues to those being arbitrated sepa-
rately.**° It is possible that a stay on this basis may be granted in cases
involving the alleged application of the so-called group of companies
theory, where for example one company in the group has signed a contract
containing an arbitration clause and another group company has per-
formed the contract and legal proceedings are brought against the latter
company. In light of the decision in Peterson Farms*’’ the granting of a stay
would be based on the desire to avoid conflicting outcomes and to save
costs rather than to provide support for the group of companies theory.

4. For some other reason the application falls short of the requirements for
a stay under the Arbitration Act 1996.775

A stay under the inherent jurisdiction would not be granted if doing so would
result in claims being determined in two separate fora.*” This is in contrast to the
position under s.9 where the court has no discretion to take such factors into
account.

22 Av B [2006] EWHC 2006, [107]; Etri Fans Ltd v NMB (UK) Ltd [1987] 1 W.L.R. 1110 at 1114;
Al Nami v Islamic Press Agency |2000] 1 Lloyd’s Rep. 522 at 525.
3 El Nasharty v J Sainsbury Ple [2004] 1 Lloyd’s Rep. 309 at [28]-[31], applying (albeit with some
reservation) the test laid down by Waller L.J. in A/-Naimi. In Albon v Naza Motor Trading SDN
BHD [2007] EWHC 665, Lightman J., at paras 24—26, the court was not certain that an agreement
to arbitrate existed.
4 Av B (2006) EWHC 2006 at [109], [123].
** Av B [2006] EWHC 2006 at [127]|{128] where claims against the arbitrator falling outside the
reference were stayed pending determination of the substantive claims in the arbitration. Et Plus SA
v Welter |2006| 1 Lloyd’s Rep. 251 at [91].
26 See Abu Dhabi Investment Co v H Clarkson [2006] EWHC 1252 at [28]. The possible exercise of a
stay under the inherent jurisdiction did not arise in this case but it is clear that one would not have
been granted in any event.
27 Peterson Farms v C & M Farming Ltd & Another [2004] 1 Lloyd’s Rep. 614.
**S Hor example because it was an oral agreement to arbitrate: see paras 7-027 and 2-015.
2 Exeter City AFC Lid v Football Conference Ltd [2004] 1 W.L.R. 2910.
 Ingunctions to Restrain Arbitrations 37 al

3. INJUNCTIONS TO RESTRAIN ARBITRATIONS

Introduction. Even before the Arbitration Act 1996, the English court had
7-056
already expressed a reluctance to interfere in the conduct of arbitration proceed-
ings, which they accepted should be left as far as possible to the arbitral tribu-
nal.**° The court had no general supervisory power over the conduct of
arbitrations beyond those powers conferred by the Arbitration Acts then in
force.**! Thus, the tribunal’s decisions during the course of a reference were not
reviewable by the court,”*” unless the tribunal exceeded its jurisdiction or it could
be shown that what the tribunal was doing or had done was something manifestly
contrary to natural justice.*** The appropriate remedy during the course of the
reference was for the court to remove the tribunal.*** If the award had already been
made, the appropriate application would have been for an order to set it aside on
the grounds of misconduct.**°
The Arbitration Act 1996 restricted the courts ability to interfere in the arbitral
process yet further. The principle of non-intervention is expressed in s.1(c) of the
Act?*® and that principle is reflected throughout the body of the Act. Thus,
although the court retains wide powers to support the arbitral process (e.g.
appointment of arbitrators where the procedure breaks down) the scope of inter-
vention in other areas has been curtailed. For example, the broad ground for
removing the tribunal during the reference for “‘misconduct’’**” has been limited
to specific grounds for removal?** and to a challenge of the award for serious
irregularity, although a great many applications are still brought under this sec-
om ©

Arbitral proceedings wrongly brought. Before commenting on the 7-057

court’s powers exercisable during the arbitration, it is appropriate to mention what
can happen when arbitral proceedings are wrongly brought. This is the reverse of
the situation where a party brings court proceedings in breach of an agreement to

230 See the different views expressed in K/S A/S Bill Biakh v Hyundai Corp [1988] 1 Lloyd’s Rep. 187;
Three Valleys Water Committee v Binnie & Partners [1990] 52 B.L.R. 42 and Fletamentos Maritimos
SA v Effjohn International [1997] 2 Lloyd’s Rep. 302.
231 The Arbitration Acts 1950 to 1979 which have now been largely replaced by the Arbitration Act
1996 but on this point see Lord Diplock in Bremer Vulkan Schiffbau und Maschinenfabrik v South
India Shipping Corp [1981] A.C. 909 at 979; [1981] 1 All E.R. 289 at 296.
232 Ulysses Compania Naviera SA v Huntingdon Petroleum Services Ltd and Others (The “Ermoupolis’’)
[1990] 1 Lloyd’s Rep. 160.
233 French Government v ‘“Tsurushima Maru” (1921) 7 Lloyd’s Rep. 244.
234 Kirkawa Corp v Gatoil Overseas Inc (The “Peter Kirk”) (No.2) [1990] 1 Lloyd’s Rep. 158; Damond
Lock Grabowski v Laing Investments (Bracknell) Lid [1992] 60 B.L.R. 112.
235 K/§ A/S Bill Biakh v Hyundai Corp [1988] 1 Lloyd’s Rep. 187; Kirkama Corp v Gatoil Overseas
Inc. (The “Peter Kirk’) (No.2) [1990] 1 Lloyd’s Rep. 158. In neither case had an award been made
but both decisions indicated that this was the appropriate remedy.
36 See further paras 7—001 ef seq.
237 Arbitration Act 1950, s.23(2) contained provision for removing an arbitrator for misconduct. ‘This
provision has been repealed by the Arbitration Act 1996, see para.7—126.
238 Arbitration Act 1996, s.24.
239 Arbitration Act 1996, s.68, see paras 8-072 et seq.
 376 The Role of the Court

arbitrate.”*° It occurs where arbitral proceedings are commenced against a party

who maintains that he is not bound by an arbitration agreement or that the issues
referred do not fall within the scope of the arbitration agreement entered into by
him, i.e. that the tribunal lacks jurisdiction and that the arbitral proceedings have
been wrongly brought. The courses of action that are open to a party in these
circumstances are discussed in the context of disputes as to the jurisdiction of the
tribunal."
Whatever action is taken, the party concerned should act promptly in order not
to lose his right to object to the tribunal exercising jurisdiction over him.

7-058 Injunctions to restrain arbitral proceedings. Injunctions to restrain

arbitrations are, at least in England, few and far between and becoming fewer still
over time. This is principally because of the acceptance of the principle that the
arbitrator should usually determine his own jurisdiction and so to restrain an
arbitration by way of injunction would be inconsistent with the scheme of the
Arbitration Act 1996.7** However, there are exceptional circumstances where an
injunction to restrain an arbitration may be obtained. Such an injunction is
different in nature from an injunction granted in support of arbitral proceed-
ings,’ but it is convenient to mention this type of injunction at this stage. Subject
to the extreme limitations on the exercise of the court’s discretion set out
below,”**** the possibility of obtaining an injunction to restrain the continuation
of arbitral proceedings can arise in the following cases:

Case 1: where one party commences an action before the court and success-
fully opposes a stay (whether under s.9 or the court’s inherent jurisdic-
tion) on the ground that the arbitration agreement is invalid and the
arbitral proceedings based on the invalid agreement continue in defi-
ance of the court’s findings. This case is also likely to cover situations
where the court has decided that it, rather than the arbitrators, must
decide an issue as to the jurisdiction of the arbitrators upon a s.9 stay
application having been made and where there is a risk that the
arbitrators might proceed to consider the same jurisdictional issue
pending the court’s decision***;

249 Paragraph 7-010.

*4) Paragraphs 5-060 e7 seg., 7-143 et seq. and 8-054 et seq.
*? Elektrim SA v Vivendi Universal SA and Others (2007) 2 Lioyd’s Rep. 8.
** Injunctions in support of arbitral proceedings are discussed in paras 7-011 and 7-195.
“445 Paragraph 7-059 below.
*4 See however Albon (t/a NA Carriage Co) » Naza Motor Trading SDN BHD & Anor (No.4) {2007}
EWHC 1879 (Ch), where an anti suit injunction was granted to restrain court and arbitration
proceedings in Malaysia. Because of the special circumstances of that case, namely a jurisdictional
issue pending before the court, it is suggested that the decision is not supportive of any wider
application of an anti-arbitral injunction jurisdiction. The decision of the court not to allow the
arbitrators to continue and consider other aspects of the dispute pending the court’s decision on
jurisdiction is, it is suggested, questionable. Per Lightman J. at [28], [29].
 Injunctions to Restrain Arbitrations 377

Case 2: where a party does not wish to take part in the arbitral proceedings but
disputes the substantive jurisdiction?*” of the tribunal and wants to
prevent that tribunal determining claims against him. It is virtually
impossible to obtain an injunction on this basis absent truly excep-
tional circumstances; and

Case 3: where all parties to an arbitration agreement apply to the court under
s.32 of the Arbitration Act 1996 and despite their request for a
suspension of the arbitral proceedings the tribunal proceeds with a
view to making an award.

As in the case of all applications for an injunction, delay is a powerful factor

against granting the relief. If aparty has taken part in an arbitration for some time
before seeking an injunction to restrain the arbitration, the act of taking part will
almost certainly be fatal to the grant of an injunction.***

Exercise of the court’s discretion. The court does retain a general 7-059
statutory jurisdiction to grant an injunction under s.37 of the Supreme Court Act
1981, although the extent of the applicability of this jurisdiction to arbitration
proceedings has been doubted and has been the subject of some judicial debate.**”
The court will exercise its discretion to grant an injunction restraining the further
conduct of an arbitration only in rare cases. The statutory scheme for dealing with
questions relating to arbitral jurisdiction is set out in ss.30—32, 67, 70(2), 72 and
73 of the Arbitration Act 1996. As noted, the primary forum in which disputes as
to jurisdiction should be decided is before the arbitration tribunal. Court inter-
ventions should usually be limited to the statutory scheme; “‘It is impossible to say
that the 1996 Act includes features which provide some kind of analogy for the
granting of an anti-arbitration injunction or the arrest of arbitration proceedings
in circumstances similar to those arising in this case.””°? Even where the court is
prepared to consider the exercise ofits discretion under s.37 of the Supreme Court
Act 1981, it will exercise that discretion extremely sparingly. In Elektrim SA v
Vivendi Universal SA and Others,’>' the court found that even if the applicant
could establish that one ofits legal or equitable rights had been infringed or that
the continuation of the arbitration was vexatious, oppressive or unconscionable,

247 “Substantive jurisdiction” is defined in s.30(1) of the Arbitration Act 1996 and extends to not only
the validity of the arbitration agreement, but also whether the tribunal has been properly consti-
tuted and what matters have been submitted to arbitration in accordance with the arbitration
agreement.
48 Blektrim SA v (1) Vivendi Universal SA and Others [2007] 2 Lloyd’s Rep. 8, [83]-[85]. See also The
“Oranie” and the “Tunisie” [1966] 1 Lloyd’s Rep. 477, CA.
249 Cetelem SA v Roust Holdings Ltd [2005] 1 W.L.R. 3555, at [74]. Elekirim SA v Vivendi Universal SA
and Others [2007] 2 Lloyd’s Rep. 8, [83]-{85]. See also The “Oramie” and the “Tunisie” [1966] 1
Lloyd’s Rep. 477, CA.
2504 y B [2006] EWHC 2006, [124].
251 [2007] 2 Lloyd’s Rep. 8.
 378 The Role of the Court

the court would still not grant an injunction to restrain the arbitration as to do so
would be inconsistent with the scheme of the 1996 Act.”

7-060 When injunction unavailable. Restraining injunctions (against an actual

or prospective party to an arbitration or an arbitrator) will not be granted at all
where:

1. The arbitrator has (or, we suggest, is likely to have) jurisdiction. “‘If in a

case where an arbitrator does have jurisdiction to decide a particular
dispute, he is to be restrained from so doing and no stay of court
proceedings is to be granted, there is likely to be a potential breach of the
United Kingdom’s international obligations in relation to commercial
arbitrations under the New York Convention of 1957 as enshrined in the
1996 Act.”°3
2. A party has taken part in the arbitration without objecting to jurisdiction
and then seeks an injunction restraining the further conduct of the
arbitration. This would be incompatible with the statutory scheme con-
tained in ss.70(2), 72 and 73 of the Act.*** This includes situations where
a party has unsuccessfully asked the tribunal to stay the arbitration and
then seeks an injunction effectively by way of appeal to the arbitrators’
decision.”°°

7-061 Declaration usually sufficient. An injunction might be granted in the

extreme case where the court has made an order that there is no valid arbitration
agreement, such as for example under s.72(1)(a) of the Arbitration Act 1996, and
there was some indication that the other party or the tribunal was intending not
to comply with the court’s declaration. Failing such indications, a declaration
alone should be sufficient.**°

7-062 Injunction where foreign seat. The discretion to grant an injunction to

restrain an arbitration should be exercised even more sparingly where the seat of

*** Vor a recent application of this approach, see JJarvis & Sons v Blue Circle Dartford Estates [2007]
EWHC 1262, at [39], [40]. The advocates in that case were unable to find any case since the
enactment of the Arbitration Act 1996 in which the court had granted an injunction to halt an
arbitration. An injunction to restrain a party from pursuing arbitration and court proceedings in
Malaysia was however granted in Albon (t/a NA Carriage Co) v Naza Motor Trading SDN BHD
& Anor (No.4) [2007] EWHC 1879 (Ch).
3 Fiona Trust and Others v Yuri Privalov and Others [2007] EWCA 20 at [31]. Affirmed Premium Nafia
Products Lid & Others v Fili Shipping Co Lid & Others [2007] UKHL 40.
254 4» B [2006] EWHC 2006, at [12].
255 Blektrim SA v (1) Vivendi Universal SA (2) Vivendi Telecommunication International SA (3)
Elektrim Telekomunikacja SP Zoo (4) Carcom Warszawa SP Zoo (2007 2 Lioyd’s Rep. 8, paras
83-85. See also The “‘Oranie”’ and the “Tunisie” [1966] 1 Lloyd’s Rep. 477, CA.
256
A hypothetical situation discussed in Fiona Trust and Others v Yuri Privalov and Others [2007]
EWCA 20 at [36]. See further para.7—066 below on declaratory relief. See also Noble Assurance Co
and Others v Gerling-Konzen General Insurance Co—UK Branch [2007] EWHC 253, an anti-suit
injunction case where declaratory relief was granted in lieu of an injunction.
 Ingunctions to Restrain Arbitrations 379

the arbitration is outside England and Wales. In Weissfisch v Julius and Others,2°7
the Court of Appeal considered an application for an interim injunction to restrain
an arbitrator from holding a hearing to consider his own jurisdiction. The seat of
the arbitration was Switzerland (and the governing law Swiss). The Court of
Appeal found that a natural consequence of the express choice of the Swiss seat,
upon which the parties had agreed following legal advice, was that questions
relating to the agreement to arbitrate would fall to be considered by the Swiss
courts. This accords with the principles to be adopted under the New York
Convention which in turn are recognised by the 1996 Act. For an English court
to restrain an arbitrator under an agreement providing for a foreign seat would
infringe those principles save, the court noted, in undefined “exceptional circum-
stances”.*°* Any other conclusion would arguably place at risk the system of
international commercial arbitration and would replicate the mistakes of courts in
certain jurisdictions who have in the past sought to assume for themselves
supervisory jurisdiction over arbitrations with a seat outside of their jurisdic-
tion.2°?-26°

Need for legal proceedings. An injunction restraining the further con- 7-063
duct of a reference will almost always be an interim injunction. It is a determina-
tion of the validity of the reference and, if the injunction is granted, it will dispose
of the arbitral proceedings, leaving the claimant to pursue a remedy in the courts
if he so chooses. The court will not usually grant an injunction unless court
proceedings have been commenced or an undertaking is given to do so.

Restraining the making of an award. There is no precedent for an 7-064

injunction restraining the making of an award when the arbitration has already
taken place, but an injunction might issue in these circumstances in an exceptional
case.*°! In practice, if the reference has already proceeded to the stage where all
that remains to be done is the making of an award, there 1s likely to have been delay
by the applicant, making it inappropriate to grant an injunction. On the other
hand, the party concerned may not have been made aware that the reference was
taking place and, on discovering this, chooses to seek an injunction rather than

257 12006] EWCA 218.

258 Weissfisch v Julius and Others [2006] EWCA 218 at [33]. But see Albun (t/a NA Carriage Co) v Naza
Motor Trading SDN BHD & Another (No.4) [2007] EWHC 1879.
259-260 For a notorious example of intervention by the Indian courts in a London-seated arbitration, see
ONGC v Western Co of North America (1987) All India Rep. S.C. 674. More recently, see POC
International Growth Fund Ltd v OAO “CT-Mobile”’ and Another, Court of Appeal of Bermuda, Nos
22, 23 of 2006, March 23, 2007. The Court of Appeal of Bermuda upheld the grant of an anti-suit
injunction against a respondent incorporated in Bermuda where the seat of the arbitrations in
question was Switzerland and Sweden.
261 The “Oranie” and the ‘Tunisie’ [1966] 1 Lloyd’s Rep. 477 (CA). An exceptional case might arise,
for example, if the arbitration had proceeded in the absence of the applicant and the applicant had
learned of it only after the arbitration hearings had been held but before the award was made.
 380 The Role of the Court

waiting until the award is made and then challenging 1t’ or resisting its enforce-
ment.*° Even in such a case the applicant will have to present cogent reasons why
the matter is not one for the tribunal in the first instance.

7-065 Effect of application on the arbitration. It is usual for both the other
party and the tribunal to be joined as defendants to proceedings seeking such an
injunction and, if granted, the injunction will be directed to them both. Once the
tribunal becomes aware that there is an application being made to court to restrain
the future conduct of the reference, the tribunal should decide whether or not to
continue with the arbitral proceedings pending the outcome of the application for
the injunction.*” In arriving at its decision, the tribunal should have regard to its
general duty*®* as well as to practical considerations.*® If they believe that the
injunction has been wrongly granted, many arbitrators are likely to take the view
that it is their general duty to continue proceedings where at all possible in
defiance of an injunction. Paramount amongst the considerations as to whether or
not an injunction has been wrongly granted are, it is submitted, whether the
injunction is issued by the court at the seat of the arbitration or by a foreign court
and whether the court is acting within the confines of modern arbitral legislation
or purporting to exercise a more general inherent jurisdiction.

7-066 Declaratory relief. In addition or as an alternative to an injunction, the court

may grant a declaration that a reference is outside the jurisdiction of the tribunal.
However, the scope for granting a declaration has been almost entirely superseded
by s.32(2) of the Act,°’ which requires the agreement of all parties or the
permission of the tribunal to an application under that section. There is no longer
a right to a declaration at common law, at least where the seat of arbitration is in
England or Wales,*°** and the court will be extremely reluctant to issue a declara-
tion as to jurisdiction in respect of a foreign arbitration.

4. EXTENSION OF TIME

7-067 Introduction. The court may extend time limits under four separate sections
of the Arbitration Act 1996. The first relates to any agreed time limit within which

* The subject of challenging an award is dealt with in Ch.8, as is opposing enforcement of awards.
°° A party who considers the arbitration proceedings to have been wrongly brought will almost always
want to raise the objection at an early stage because if he waits until the enforcement stage and the
objection is not upheld, he will have lost the opportunity to contest the dispute on its merits.
*°T Sections 32(4) and 67(2) of the Arbitration Act 1996 give the tribunal discretion to continue with
the arbitral proceedings, unless the parties agree otherwise.
°° The general duty of the tribunal is contained in s.33 of the Arbitration Act 1996 and includes the
avoidance of ‘‘unnecessary delay”’.
*°°'T here may be little point in the arbitral tribunal seeking to compel the parties to incur time and
expense in taking further steps in arbitration proceedings which, if the injunction application is
successful, will not be pursued.
*°7 ABB v Keppel [1999] 2 Lloyd’s Rep. 24 at 30.
08 The court’s power is now governed by the Arbitration Act 1996, s.32.
 Extension of Time 381

an arbitration is to commence.*”” The second concerns any agreed time limit for
making an award.*”? The third is a general power to extend and applies to any
other time limit agreed by the parties in relation to a matter in the arbitral
proceedings or specified in Pt 1 of the Arbitration Act 1996 having effect in default
of their agreement.*’! The fourth relates to extending time for making an applica-
tion or appeal to the court under the Act.?”? Each power will be examined in
turn.

(a) Extending time for commencing arbitration proceedings (section

12)
Power to extend time for commencing arbitration proceed- 7-068
ings.’’? Where there is an arbitration agreement to refer future disputes to
arbitration which imposes a time limit on the commencement of arbitration or
other related dispute resolution procedures, the court has power under s.12 ofthe
Arbitration Act 1996°% to extend that time limit. This provision is mandatory?”
and applies to any step that is required to be taken by the arbitration agreement
failing which the claim will be barred after a specified period elapses. The power
will only be exercised however if the court is satisfied either that the need for an
extension arises out of circumstances outside the reasonable contemplation of the
parties when the time limit was agreed, or that one party’s conduct makes it unjust
to hold the other to the time limit.?”°

Circumstances outside the reasonable contemplation of the 7-069

parties. In order to succeed under this head the applicant must satisfy the court
that the need for an extension arises out of circumstances that were “outside the
reasonable contemplation of the parties” when the time limit was agreed. He will
also have to satisfy the court that it would be “‘just” to extend the time limit.*”” For
this purpose it will not be sufficient to show that the respective bargaining
positions of the parties were unequal. Section 12 is not designed to deal with
unequal bargaining power or consumer protection.*”* Thus previous case law on
“undue or unreasonable hardship” is no longer relevant.*”” The Arbitration Act
1996 is intended to give effect to party autonomy. The court is encouraged to
respect the parties’ bargain and to recognise the wish of “commercial concerns

269 Arbitration Act 1996, s.12, see paras 7-068 et seq.

279 Arbitration Act 1996, s.50, see paras 7-081 e/ seq.
271 Arbitration Act 1996, s.79, see paras 7-089 et seq.
72 Arbitration Act 1996, s.80(5), see paras 7-092 et seq.
273 See paras 5-003 ef seq. in relation to the time for commencing arbitration generally.
274 Section 12 of the Arbitration Act 1996 replaces s.27 of the Arbitration Act 1950.
275 Section 4 of the Arbitration Act 1996 and Sch.1 to the Act.
76 Section 12(3) of the Arbitration Act 1996.
277 Arbitration Act 1996, s.12(3)(a).
278 TAC report para.71. See by contrast s.91 of the Arbitration Act 1996. ;
279 Cottiship SA v Allanasons Ltd [1998] 3 All E.R. 714 and Thyssen v Calypso [2000] 2 Lloyd’s Rep.
248.
 382 The Role ofthe Court

(and indeed others) to draw a line beneath transactions at a much earlier stage than
ordinary limitation periods would allow.”**° The court will examine the relevant
circumstances of each case,”*! but will not interfere with a contractual bargain
“unless the circumstances are such that if they had been drawn to the attention of
the parties when they agreed the provision, the parties would at the very least have
contemplated that the time bar might not apply; it then being for the court finally
to rule as to whether justice requires an extension of time to be given.”*** Even
where the fact of the relevant circumstances is accepted by the court, such as in
Monella v Pizza Express’*? where a change in law made time of the essence in
certain situations in rent review cases, the change in law must be shown actually
to cause the failure of the applicant to give notice of arbitration in time.***

7-070 Ignorance of agreed time limit insufficient. Ignorance by the

applicant of a time limit contained in the arbitration agreement or rules incorpo-
rated into it will not suffice. He will need to establish that the provision concerned
was not within the reasonable contemplation of the parties when the agreement
was concluded. This could occur, for example, where the arbitration agreement
incorporates rules of arbitration that were amended after the conclusion of the
agreement and the applicant states in the witness statement supporting his
application that he was unaware that the amendments had included a specific time
limit for commencing the arbitration. Case law has drawn a narrow and fine
distinction between a mistake of law as to what suffices to refer a matter to
arbitration within the meaning of a clause requiring arbitration to be commenced
within a particular time, which may fall with s.12(3)(a), and a mistake of law as to
what requires to be referred to arbitration within such a time, which will not.**°
Therefore, where the market has acted for a significant period on a court decision
as to the construction of a standard form charterparty which has important time
bar implications and if a different construction were subsequently arrived at, such
as on appeal, it is likely that the s.12(3)(a) ground might be triggered.**°

7-071 Conduct of the other party. Where the conduct of another party to the
arbitration agreement causes or contributes to the need for an extension, the court

280 TAC report para.68, referred to with approval in Cottiship, ibid. at 727.
81 Cortiship SA v Allansons, thid. at 726 and Vosnoc Lid v Transglobal Projects [1998] 1 W.L.R. 101.
8° Harbour and General Works v Environmental Agency [2000] 1 Lloyd’s Rep. 65 at 81, where the Court
of Appeal refused to extend the time limit by eight days. Applied in Monella v Pizza Express [2004]
DE Gules:
783 12004] 1 E.G.L.R. 43.
84 Tn that case, the court refused to extend time for service of a notice of arbitration in a rent review
case after the Court of Appeal overturned a previous decision which suggested that time was not
of the essence in certain standard form clauses of a lease. The decision arguably turns on the fact
the Court of Appeal’s decision was known for a year before the relevant review date arose, so the
applicant’s solicitors could have factored it into account when considering the timing of the notice
of arbitration: See the comments of Morritt V.C at para.36.
°8° Vosnoc Ltd v Transglobal Projects [1998] 1 W.L.R. 101 at 112 and Grimaldi Co v Sekimyo Line (The
“Seki Rolette”’) [1998] 3 All E.R. 943. Considered in Borgship Tankers Inc v Product Transport Corp
Lid (The “Casco”’) [2005] 1 Lloyd’s Rep. 565 at 572.
286 The “Casco”, per Cresswell J., at 572, obiter.
 Extension of Time 383

may grant relief to the applicant.**” The court will however require evidence of the
conduct complained of and its relevance to the issue (e.g. how the applicant was
misled about the time limit).*** The court will also need to be persuaded that it
would be “unjust” to hold the applicant to the original time limit.2*? The word
unjust replaced the phrase “undue hardship” that was used in the previous
legislation’”® and the applicant has the burden of satisfying the court that there
would not only be hardship but that he would suffer real injustice if the time limit
were not extended.*?!

The relevant disputes. Section 12 only applies to an agreement to refer 7-072

future disputes, not to an agreement to refer an existing dispute to arbitration.2”
It does apply however even if the right to arbitrate is unilateral,?’* or if the
agreement to refer disputes is conditional or depends upon the exercise of an
option to go to arbitration rather than litigate in court. Although the section
applies only to an agreement to refer future disputes, the dispute must have arisen
before the application can be made.*”*
The section 1s limited to time limits imposed by virtue of the parties’ contract;
it does not give the court jurisdiction to extend statutory limitation periods.’

The claims or rights affected. Section 12 applies where the arbitration 7-073
agreement provides that a claim will be barred’”® or the claimant’s right extin-
guished unless the claimant takes some step within a particular time. That may
include a failure to appoint an arbitrator in time, or to give notice to appoint, or
to take some other step to commence arbitration proceedings within the time limit
specified. The court may extend time where the failure to take the required step
within the time limit either bars the claim by extinguishing the right itself or
where it bars the remedy i.e. the right to commence arbitration proceedings.*”’ It

87 Arbitration Act 1996, s.12(3)(b).

288 This was described as the threshold question in Thyssen v Calypso [2000] 2 Lloyd’s Rep. 243 at 248.
See also Harbour and General Works v Environment Agency [2000] 1 Lloyd’s Rep. 65.
89 This is also a requirement of s.12(3)(b) of the Arbitration Act 1996: Thyssen v Calypso, ibid. at
249.
20 Section 27 of the Arbitration Act 1950 which has been replaced by s.12 of the Arbitration Act
1996.
2°! Case law based on the phrase ‘‘undue hardship” in s.27 of the Arbitration Act 1950 should not be
relied upon: see DAC report paras 62 ef seq.
282 Arbitration Act 1996, s.12(1). The point was raised on the previous legislation in Navigazione Alta
Italia SpA v Concordia Maritime Chartering AB (The “Stena Pacifica”) [1990] 2 Lloyd’s Rep.
234:
293 Pittalis v Sherefettin [1986] 2 All E.R. 227, CA.
294 Arbitration Act 1996, s.12(2), see also Richurst Ltd v Pimenta [1993] 2 All E.R. 559.
295 Arbitration Act 1996, s.12(5). Note also that s.12(1) of the Arbitration Act 1996 refers to a proyision
in the arbitration agreement. See also Kenya Railways v Antares Co Pte Ltd (The ‘‘Antares”’) (Nos
1 and 2) {1987] 1 Lloyd’s Rep. 424, CA, which was based on s.27 of the Arbitration Act 1950, which
5.12 of the Arbitration Act 1996 has replaced. The subject of statutory time limits is discussed in
para. 7—080.
2% See para.2—022 for this type of arbitration clause.
297 This is apparent from the terms of s.12(1) of the Arbitration Act 1996. See also Vosnoc Lid v
Transglobal Projects [1998] 2 All E.R. 990, as reviewed in Harbour and General Works v Environment
Agency [2000] 1 Lloyd’s Rep. 65, CA. See also para.5—021.
 384 The Role ofthe Court

‘cannot however do so where the time limit goes to the substantive rights of the
parties but has no connection with the commencement of arbitration proceed-
ings.*°° In other words, where the time limit provides a defence to the claim
without affecting the right to commence arbitration proceedings, relief under s.12
is not available.

7-074 Taking steps to begin arbitration proceedings or other dis-

pute resolution procedures. The court will also consider whether or not
the act concerned commences, or is part of the process required to commence,
arbitration or other dispute resolution procedures or if the step is merely a
condition precedent to proceedings. Ifit is the latter, s.12 will not apply to give the
court jurisdiction to extend the time for it to be taken.*””
After reviewing several earlier authorities on s.27 of the Arbitration Act 1950,
which preceded s.12 of the Arbitration Act 1996, the court decided that a
landlord’s notice to increase rent as a result of which arbitration proceedings could
be commenced was not “some other step to commence arbitration proceedings”
within the meaning of the section.*”°

7-075 Exhaustion of other means for obtaining an extension. The

court will not entertain an application if the applicant has not exhausted ‘‘any
available arbitral process for obtaining an extension of time”’.*°' Rules of Arbitra-
tion sometimes provide for extensions of time,*°’ and if those rules are incorpo-
rated into the arbitration agreement the applicant should seek an extension in
accordance with those rules before applying to the court under s.12.

7-076 Delay. The claimant should issue his application under s.12 without delay.
Failure to do so 1s a factor which the court may take into account in the exercise
of its discretion whether or not to grant the application.*

8 Babanaft International Co SA v Avant Petroleum Inc (The ‘‘Oltenia’”’) [1982] 1 Lloyd’s Rep. 448
(affirmed by the Court of Appeal); Mariana Islands Steamship Corp v Marimpex Mineraloel-
Handelsgesellschafi GmbH & Co KG (The “Medusa’’) 1986] 2 Lloyd’s Rep. 328. The contrary
decision in McLaughlin & Harvey Ple v P & O Developments Lid [1991] 55 B.L.R. 101 was
disapproved in Crown Estate Commissioners v John Mowlen & Co Ltd [1994] 70 B.L.R., CA. These
decisions were based on the previous legislation but the principle still applies.
*” See Babanaft International Co SA v Avant Petroleum Inc, (The “Oltenia’’) (1982) 1 Lloyd’s Rep. 448,
affirmed by the Court of Appeal in [1982] 1 W.L.R. 871, a decision based on s.27 of the Arbitration
Act 1950 but which is still relevant to s.12 of the Arbitration Act 1996.
°° Richurst Lid v Pimenta {1993] 2 All E.R. 559. A tenant’s counter-notice, even if out of time,
requiring the rent increase to be determined by arbitration did however fall within s.27 of the
Arbitration Act 1950 which has been replaced by s.12 of the Arbitration Act 1996: see Pittalis v
Sherefettin [1986] 2 All E.R. 227, CA.
301 Arbitration Act 1996, s.12(2).
*°? See for example art.4.7 of the LCIA Rules.
°° Delay was a factor in the decision of the court in Thyssen v Calypso [2000] 2 Lloyd’s Rep. 243 at 249.
See also Comdel Commodities Ltd v Siporex Trade SA (No.2) [1990] 2 Lloyd’s Rep. 207, a decision
based on s.27 of the Arbitration Act 1950.
 Extension of Time 385

Making the application. The application is usually for an order extending 7-077
the time for commencing arbitration proceedings,*”* but as an alternative, and ifall
parties consent, an application can be made that such an order is not needed.*”°
The alternative application may be made where, for example, there is a dispute
over the claimant’s contention that the arbitration proceedings are being or have
been commenced in good time, but the arbitral tribunal is better placed to
investigate facts necessary to determine the dispute and will have to do so if any
party objects to the court doing so.*°° Either application can only be made by a
“party to the arbitration agreement”’.*””

Exercise of the court’s discretion. Even if the grounds for an extension 7-078
are established, the court has a discretion whether to grant the extension. In the
case of circumstances outside the reasonable contemplation of the parties, the
court will have to be persuaded that it would be just to extend the time.*”* That
means taking account of the position of all the parties. The mere fact that the
applicant’s claim may be barred would not necessarily determine the matter if that
would be unfair to another party, for example, because of new commitments
entered into after the time limit had elapsed. The position is different where the
conduct of that party has contributed to the applicant’s dilemma.*°’ In that event
the court will have to consider the extent to which that conduct misled the
applicant and to what extent the applicant was also at fault.*'°

The order and its terms. If the court exercises its discretion, an order may 7-079
be made extending the relevant time limit ‘“‘for such period and on such terms”
as the court thinks fit.*!' It is apparent from the terms of s.12(4) of the Act that
the court can make an order even if the time limit has expired or has already been
extended by a previous order of the court.*'* The length of the extension is left to
the court’s discretion and will depend on the circumstances of each case.*'* The

3+ The procedure for an arbitration application is described in paras 8-178 ef seq.

305 The alternative application is not stated specifically in CPR Pt 62, but it was so provided in previous
versions of the rule (e.g. PD 21.1 made under former CPR Pt 49).
50 Grimaldi Compagnie v Sekihyo Line [1998] 3 All E.R. 943.
307 Arbitration Act 1996, s.12(2).
308 This is the result of the words used in s.12(3)(a) of the Arbitration Act 1996.
309 This is apparent from the different wording used in s.12(3)(b) of the Arbitration Act 1996.
310 Thyssen v Calypso [2000] 2 Lloyd’s Rep. 248.
311 Arbitration Act 1996, s.12(4).
312 See s.12(4) of the Arbitration Act 1996 and Nea Agrex SA v Baltic Shipping Co Lid (The “Agios
Lazavos”’) [1976] 2 Lloyd’s Rep. 47; Navigazione Alta Italia SpA v Concordia Maritime Chartering
AB (The “Stena Pacifica’) [1990] 2 Lloyd’s Rep. 234. These decisions were based on s.27 of the
Arbitration Act 1950, which has been repealed, but they support the general proposition.
313 In Phoenix Shipping v General Foods [1997] 2 Lloyd’s Rep. 703 the Court of Appeal upheld an order
that extended a time bar by 23 months, although the judge’s decision was described as at the borders
of the latitude to be afforded in cases of this kind (at 709). See also analysis of Court of Appeal in
Irish Agricultural Wholesale v Partnerneedserei (The “Euro Trader’) {1987] 1 Lloyd’s Rep. 418.
 386 The Role ofthe Court

court may also impose terms on the granting of an extension, such as requiring the
applicant to appoint an arbitrator within a limited number of days.*'

7-080 Limitation Acts. The Limitation Act 1980 and the Foreign Limitation
Periods Act 1984 as well as ‘“‘any other enactment (whenever passed) relating to the
limitation of actions”*'> apply to arbitration proceedings as they apply to other
legal proceedings,*'® and an order made to extend the period for commencing an
arbitration will not affect the operation of the Limitation Acts.*!”
The Arbitration Act 1996 provides that the parties are free to agree when
arbitration proceedings are to be regarded as commenced for the purposes of the
Limitation Acts,*'* and makes provision for what is to happen when there is no
agreement.*!? Whether arbitration has been commenced within the agreed time
can lead to a dispute,*”° and it is important to give timely notice in accordance with
the agreement.*?' Where an award has been set aside or declared to be of no effect
in whole or in part the court may by order exclude the period from the commence-
ment of the arbitration to the date of the order for the purpose of computing the
time prescribed by the Limitation Acts for starting proceedings, including arbitra-
tion proceedings.*** The Arbitration Act 1996 also provides that in determining
for the purpose of the Limitation Acts when a cause of action accrued, any
provision that an award is a condition precedent to the bringing of legal proceed-
ings in respect of a matter to which an arbitration agreement applies shall be
disregarded.***

(b) Extending time for making an award (section 50)

7-081 Power to extend time for making an award. Subject to anything to

the contrary in the arbitration agreement, the tribunal may make an award at any
time.*** However, time limits for the making of the award are sometimes imposed
by the arbitration agreement.*”? In that event the court may by order extend the

*'*'This is apparent from the words of s.12(4) of the Arbitration Act 1996. See also Patel v Peel
Investments (South) Ltd [1992] 30 E.G. 88. This decision was also based on s.27 of the Arbitration
Act 1950, which has been replaced by s.12 of the Arbitration Act 1996, but the judge’s observations
about conditions still have some relevance.
*15’'The words quoted from the definition of “the Limitation Acts” in s.13(4) of the Arbitration Act
1996 are designed to catch any enactment concerning limitation of action made after the Arbitration
Act 1996 was enacted.
1 Arbitration Act 1996, s.13(1).
17 Arbitration Act 1996, s.12(5). As already mentioned the ‘‘Limitation Acts” is a defined term.
318 Arbitration Act 1996, s.14(1).
*!” Arbitration Act 1996, ss.14(2) to (5) inclusive, see para.5—018.
°° West of England v Hellenic 1999] 1 Lloyd's Rep. 93, and authorities referred to at 107.
7! Paragraphs 5—006 e/ seq.
*% Arbitration Act 1996, s.13(2), see para.5—013.
°° Arbitration Act 1996, s.13(3), see para.5—014 for such provisions, which are referred to as Scott v
Avery clauses.
324 Arbitration Act 1996, s.47.
*° As to the time for the making of an award generally: see paras 6-061 et seq.
 Extension of Time 387

period, whether or not that time limit has already expired**° and whether or not
the award has already been made,*’’ unless the parties agree otherwise.

Excluding court’s powers. Unlike s.12, s.50 of the Act is not mandatory.°?* 7-082
The parties can by agreement*”” exclude the court’s power to extend a time limit
for making an award.

Exhaustion of other means of obtaining an extension. The court 7-083

will not entertain an application under s.50 unless and until any available arbitra-
tion process for obtaining an extension of time has been exhausted.**° If there is
an available arbitral process which has been exhausted, it would be “‘a rare case
indeed where the court extended the time notwithstanding that it had not been
done through” such an arbitral process.**!

Substantial injustice. In order to obtain an extension of time for making an 7-084

award, the court must be satisfied that a “‘substantial injustice would otherwise be
done.’’**? There is no definition of substantial injustice in s.50 but the courts have
sought to derive assistance from discussion of the concept of substantial injustice
in s.68 of the Act, citing with approval para.58 of the DAC Report to the effect that
substantial injustice only arises “‘where it can be said that what has happened is so
far removed from what could reasonably be expected of the arbitral process that we
would expect the court to take action’’.*** The intention is that the court should
respect the parties’ choice of arbitration so it must be satisfied that the con-
sequence of observing the agreed time limit cannot be defended as an “acceptable
consequence of that choice”’.*** The Court of Appeal has however allowed an
extension when the refusal of the judge was “disproportionate” in the circum-
stances.**°

$26 Arbitration Act 1996, s.50(4).

327 Oakland Metal Co Lid v D Benaim & Co Ltd [1953] 2 Q.B. 261 at 266, a decision based on s.13(2)
of the Arbitration Act 1950, which has been replaced by s.50(4) of the Arbitration Act 1996.
328 This is apparent from the words “unless otherwise agreed by the parties” in s.50(1) of the
Arbitration Act 1996 and the omission of s.50 from Sch.1 to the Arbitration Act 1996.
329 This exclusion agreement can appear in the arbitration agreement itself or in rules incorporated into
the agreement.
330 Arbitration Act 1996, s.50(2). “Any available arbitral process” has the same meaning in this section
as in s.12, of the Act. Such a process may be provided for in arbitration rules incorporated into the
arbitration agreement. See para.7—091.
331 DAC report, para.239.
332 Arbitration Act 1996, s.50(3).
333 Ggld Coast v Naval Gijon SA [2006] All E.R. (D.) 209 at [24]-{28], a case under ss.57 and 79 of the
Act. See para.8—104.
334 DAC report, para.280. The words were applied to s.68(2) of the Arbitration Act 1996 but they seem
to be appropriate here too.
335 Keith Peters v Dylan Jones, unreported, May 22, 2000, CA.
 388 The Role of the Court

7-085 The applicant. Either the tribunal or any party to the arbitral proceedings
may apply for the extension.**° Whoever applies, the tribunal and all other parties
must have notice of the application.

7-086 The court’s discretion. Subject to what has been said in the previous
paragraphs,**’ the court has a complete discretion to extend the time for such
period and on such terms as it considers fit.*** The court may do so whether or
not the time previously fixed (by the arbitration agreement or by a previous order)
has expired.**”

7-087 Consequences of an order. If the court makes an order extending the time
for making an award under s.50 of the Act, the award and all else done in the
arbitration during the extended period is rendered valid and effective.

7-088 Judge-arbitrator. The court’s power to extend time for making an award
does not apply to a judge-arbitrator or a judge-umpire but they have a similar
power to extend time themselves under Sch.2 of the Arbitration Act 1996.**°

(c) Extending agreed time limits (section 79)

7-089 Power to extend time limits relating to arbitral proceedings.

In addition to the powers to extend a time limit for commencing arbitration**' and
for making an award,** the court has power to extend other time limits agreed by
the parties in respect of the arbitral proceedings or specified in Pt 1 of the
Arbitration Act 1996 as having effect “in default of such agreement’”’.*** This
general power for the court to extend time limits relating to arbitration is
contained in s.79 of the Arbitration Act 1996. It empowers the court to extend any
time limits agreed by the parties in respect of the conduct of the arbitration other
than the commencement of arbitration, which is governed by s.12 of that Act.
Section 79 also authorises the court to extend any time limits specified in the
Arbitration Act 1996 “in default of agreement”.*** The provision does not seem

*°°'This is apparent from Arbitration Act 1996, s.50(2). The procedure for an arbitration application
is described in paras 8-178 et seq.
*87 See paras 7—-082—7—084 inclusive.
358 Arbitration Act 1996, s.50(4).
*° Arbitration Act 1996, s.50(4). See similar provision in s.12, and para.7—079 above.
4 Paragraph 5(1) of Sch.2: see s.93(6) of the Arbitration Act 1996.
*41 Arbitration Act 1996, s.12: see paras 7-068 et seq.
32 See paras 7-081 et seq.
“8 Arbitration Act 1996, s.79. For example, an agreed time limit for submission ofa statement of case:
see Equatorial Traders Ltd v Louis Dreyfus Trading Ltd [2002] 2 Lloyd’s Rep. 638 where the extension
was refused,
344
For example, the procedure contained in s.16 of the Arbitration Act 1996 for the appointment of
members of the tribunal.
 Extension of Time 389

to apply to other time limits imposed by the 1996 Act,*** and it would not apply
to time limits imposed by another statute.
Rules of the court have however been made giving the court a discretion to
extend the 28-day time limit for making an application to challenge or appeal
against an award.**°

Excluding court’s powers. The provisions of s.79 are not mandatory. The 7-090
parties can by agreement?’ exclude the court’s powers to grant extensions under
this section.
It would seem, however, that the parties may effectively agree that, unless the
award is made within a certain time, it shall not be binding or have any effect, thus
making time of the essence of the contract.***

Exercise of the court’s discretion. The court has a wide discretion to 7-091
extend time under s.79, which may be exercised whether or not the time has
already expired, although the later an application is made the less likely it will be
to succeed.**’ Further, any order by the court may be made on “‘such terms as the
court thinks fit”.*°° There are however restrictions on the exercise of the court’s
power which are identical to those mentioned in respect of s.50. Thus, the
applicant should exhaust any available arbitral process for obtaining an extension
of time before applying to the court**' and he must satisfy the court that a
substantial injustice would otherwise be done.*°* Where a party had failed to
appoint its party-appointed arbitrator within the time allowed by the agreement to
arbitrate resulting in the other party-appointed arbitrator becoming the sole
arbitrator, no extension under s.79 for appointment of the second party-appointed
arbitrator would be granted as the applicant could not show any substantial
injustice likely to result from the appointment ofa sole arbitrator.*°* In Gold Coast
v Naval Gijon*** the court extended retrospectively the time period under s.57 to
allow correction of the award by the arbitrator for clerical mistakes and accidental
slips or omissions. In this case, one application under s.57 had already been made

45 DAC report, para.382 mentions that s.79 does not seem to apply to the 28-day time limit contained,
for example, in s.70(3) of the Arbitration Act 1996 concerning an appeal or challenge to an award
because it is not one stipulated as having effect in default of the agreement between the parties: see
equivocation on this matter in DAC report, paras 294 and 382. This was confirmed in Kalmnefi v
Glencore International [2002] 1 All E.R. 76 at 87—see paras 7-092 and 8-106.
346 CPR 1.62.9 and PD 62, para.11.1 made pursuant to Arbitration Act 1996, s.80(5): see par-
a.8—106.
347 This is apparent from the words of s.79 and its omission from Sch.1 of the Arbitration Act
1996.
348 Randell v Thompson (1876) 1 Q.B.D. 748 at 758, a decision on a submission agreement.
349 Arbitration Act 1996, s.79(4). See Equatorial Traders Ltd, above.
350 Arbitration Act 1996, s.79(5).
351 Arbitration Act 1996, s.79(3)(a): see para.7—083.
352 Arbitration Act 1996, s.79(3)(b): see para.7—084. See also DAC report, paras 308 and 309.
353 Minermet SpA Milan v Luckyfield Shipping Corp SA [2004] 2 Lloyd’s Rep. 348. The applicant had
in fact made it clear that it “shad no problem” with the identity of the sole arbitrator (para.11). Other
submissions as to why a sole arbitrator would lead to a substantial injustice were rejected,
354 12006] 2 Lloyd’s Rep. 400.
 390 The Role of the Court

to the arbitrator within time and certain corrections were made. The arbitrator
stated that his earlier award of interest had been incorrect and that he would have
corrected it had he the power to do so, but the time limit under s.57 had already
expired. The court found that there would be a substantial injustice to one of the
parties if the arbitrator was not allowed to correct his award as to interest in these
circumstances, especially where it was understandable why the error had not come
to light earlier.*°° The applicant must explain why he had not taken action earlier,
including where relevant why an earlier application under s.79 has not been made;
“the section holds no scope for a ‘wait and see’ approach”’.**° Indeed, delay in
making an application under s.79 can be fatal to the success of such an applica-
tions”

(d) Extending statutory time limits (section SO(5))

7-092 Power to extend time limit for applications and appeals.

Section 80(5) relates to time limits prescribed by Pt 1 of the 1996 Arbitration Act
for making an application or appeal to the court and provides that the rules of
court relating to the reckoning of periods, the extending or abridging of periods,
and the consequences of not taking a step within the period prescribed by the rules
apply. The effect of s.80(5) is therefore to introduce the broad discretionary
approach as to extending time limits under the CPR*°* to applications or appeals
to the court under the Arbitration Act 1996.*°° It has been pointed out that the
court’s approach to the exercise of its discretion under s.80(5) is different from
that under s.79 since s.80(5) contains no threshold requirement of substantial
injustice. In this respect, therefore, a lower unfairness threshold is presumed to
have been intended in relation to applications under s.80(5).°°° Section 70(3) of the
Arbitration Act 1996 imposes a 28-day time limit within which an application or
appeal must be brought.*°' The time runs either from the date of the award or, if
there has been an arbitral process of appeal or review, the date of notification of the
outcome of such process.*°” An application may be made to the court under CPR
r.62.9(1) to vary the time limit fixed by s.70(3).°°° The considerations that are
likely to be material in such an application are identified in Kalmnefi v Glencore
International, and the procedure is discussed in Ch.8.°°+

5° See also RC Pillar v Edwards [2001] W.L. 676628.

°° Equatorial Traders v Louis Dreyfus [2002] Lloyd’s Rep. 638 at 642.
7 Pirtek (UK) Lid v Deanswood Lid. [2005] 2 Lloyd’s Rep. 728. Although there was no s.79
application before the court in that case, the court indicated that it would not have granted one in
any event, principally because of the applicant’s inexplicable delay in raising the matter: per Aikens
J. at [44]-[49].
$8 Tn particular CPR r.3.1.2 and CPR r.62.9.
*° Kalmneft v Glencore International [2002] 1 Lloyd’s Rep. 128 at [48].
°° Kalmneft v Glencore International [2002] 1 Lloyd’s Rep. 128, cited with approval in Gold Coast at
[29].
%61 This subject is dealt with fully in Ch.8, but it is mentioned here for completeness.
362 See, e.g. para.8—063.
%°3 CPR 1.62.9 was made pursuant to s.80(5) of the Arbitration Act 1996.
$64 See para.8—213.
 Appointment of an Arbitrator or Umpire 39]

The applicant. Either the tribunal or any party to the arbitral proceedings 7-093
may apply for the extension. Whoever applies, the tribunal and all other parties
must have notice of the application.*°°

Appeals. Permission of the court is required for any appeal from a decision of 7-094
the court to extend time under ss.12, 50 and 79 of the Act.*°° The court referred
to in the subsections is the court of first instance which decided the matter; so it
used to be the case that if permission of that court is not obtained there can be no
appeal. However, there are now at least two categories of cases where the Court of
Appeal will grant permission to appeal even though the judge at first instance has
refused permission. These are considered at para.7—201 which deals with wording
to the same effect under s.44(7).
In most cases, leave of the judge at first instance will still be required under
ss.12, 50 and 79 as the jurisdiction of the court to extend time is usually
uncontroversial.

5. APPOINTMENT OF AN ARBITRATOR OR UMPIRE?’

Introduction. The arbitration agreement**’ should specify the number of 7-095

arbitrators (or arbitrators and an umpire) to be appointed and the manner in which
they are to be appointed. Subject to the terms of the arbitration agreement, the
parties should try to agree on the identity of the arbitral tribunal once a dispute
has arisen. If they cannot agree, then the parties or any one of them may request
that the appointment be made by the appointing authority,” if any, specified in
the arbitration agreement.*”° Failing this, an application may be made to the court
for the appointment of the arbitral tribunal.
The Arbitration Act 1996 provides not only that the parties are free to agree
upon a procedure to appoint the arbitral tribunal*’' and the consequences if that
procedure fails,*”” but also what is to happen if there is no agreed procedure,*”* or
the agreed procedure fails.*”*
365 Arbitration Act 1996, s.79(2). The procedure for an arbitration application is described in paras
8-178 et seq.
366 Arbitration Act 1996, ss.12(6), 50(5) and 79(6).
367 See also paras 4-028 e7 seg. on the appointment of arbitrators by the parties.
368 By “arbitration agreement” we mean to include any arbitration rules that are often incorporated
into the agreement by reference. Certain sets of arbitration rules leave the number ofarbitrators to
be determined by the arbitration institution in question. So e.g. art.5.4 of the LCIA Rules provides
that a sole arbitrator will be appointed unless the parties have agreed otherwise, or unless the
Arbitration Court of the LCIA determines that in view of all the circumstances of the case a three-
member tribunal is appropriate. See also Art.8.2 of the ICC Rules.
369 The term “appointing authority” means the individual or institution designated by the parties to
make the appointment. It may be a named individual or, more commonly, the present holder of a
particular office such as President of the Law Society. Alternatively it may be a particular body such
as the LCIA or a professional association.
79 See para.4—049.
371 Arbitration Act 1996, s.16(1).
372 Arbitration Act 1996, s.18(1).
373 Arbitration Act 1996, s.16(2)-(7) inclusive.
374 Arbitration Act 1996, s.18.
 392 The Role of the Court

To the extent that there is no agreed procedure, s.16 of the Act provides a
default procedure for the appointment of a tribunal, depending on the number of
arbitrators*”> to be appointed.*”° Nevertheless, the assistance of the court may be
required where:

© an agreed procedure or, failing agreement, the statutory default procedure’”’

does not result in the appointment of a complete tribunal; and

@ the parties cannot agree on what is to happen in the event of a failure of the
appointment procedure.*”*

Section 18 of the Act gives the court the necessary powers for this purpose. The
powers are wide,*”? but they will not be used where the arbitration agreement
provides for a method of appointment (such as appointment by an appointing
authority) and that method has not been invoked.**° Furthermore, the court will,
as with many applications under the Arbitration Act 1996, examine on a prima
facie basis whether or not an agreement to arbitrate exists. For example, where the
agreement refers to a body which provides conciliation, mediation and arbitration
services but the clause suggests the parties intended to mediate and not arbitrate,
then no appointment will be made.**!
Occasionally, the arbitration agreement will expressly empower the court to
make an appointment** or the parties may specifically consent to the appointment
being made by the court.**?

7-096 Exercise of the court’s discretion to appoint a tribunal. The

court’s jurisdiction depends on two conditions: First, a failure of the contractual
procedure and, second. the absence of agreement between the parties on the steps
to be taken as a result. There are “strong grounds for exercising the court’s
discretion in favour of constituting the tribunal except in the small number of
cases in which it can be seen that the arbitral process cannot result in a fair
resolution of the dispute”’.*** This is important because often a failure to agree on

*”° The court may appoint an umpire in an appropriate case; s.18(3) uses the term “appointments”, and
the term “arbitrator” may include umpire—Arbitration Act 1996, s.82(1).
376
If there is no agreement as to the number ofarbitrators, the tribunal shall consist of a sole arbitrator:
Arbitration Act 1996, s.15(3)—see para.4—035.
*” Arbitration Act 1996, s.16(7) recognises that there may be instances where the statutory procedure
will be inadequate to meet the situation (e.g. where there are more than two parties),
*”* Arbitration Act 1996, s.18(1) states that the parties are free to agree what is to happen in the event
of a failure of the procedure for the appointment of the tribunal.
*” See s.18(3) of the Arbitration Act 1996 and paras 7-098 et seq.
**° This seems to be the effect of s.18(1) of the Arbitration Act 1996.
8! Flight Training International Inc v International Fire Training Equipment Lid [2004] 2 All E.R.
(Comm) 568.
*8? Medov Lines SpA v Traelandsfos A/S [1969] 2 Lloyd’s Rep. 225, Donaldson J. stated (at 227) that,
in making the appointment, “the court is acting as an independent authority to whom resort is had
by the parties consensually, rather than as a court acting by virtue of its inherent or statutory
jurisdiction, but the appointments are nonetheless effective for that”.
** Tzortzas and Sykias 0 Monark Line A/B [1968] 1 Lloyd’s Rep. 337.
°** Atlanska Plovidba v Consignaciones Asturianas SA (The “Lapad’’) [2004] 2 Lloyd’s Rep. 109, per
Moore-Bick J. at [24]. ‘
 Appointment of an Arbitrator or Umpire 39 WwW

the identity of a tribunal, whether comprising one or three arbitrators, will arise
not because of any concern over the attributes of individual arbitrators but because
of more fundamental objections as to the existence or validity of an agreement to
arbitrate. The court’s discretion is broad and is not limited to a consideration of
the factors that would provide grounds for refusing a stay under s.9 of the
Arbitration Act 1996.**° The court should be very slow to be influenced by
submissions that arbitration would lead to unnecessary delay and expense or that
the arbitration should not be allowed to proceed because proceedings raising the
same issues have already been commenced abroad.**° The concept of what con-
stitutes failure of the contractual appointment procedure is not always entirely
clear: an impasse over the appointment of an arbitrator may not satisfy the
requirement, for example where it is clear that the parties have not reached an
agreement to arbitrate at all and no arbitration proceedings have been com-
menced.**” Usually, however, if one party proposes a particular arbitrator and the
other party has declined to accept that suggestion (and no other suggestions are
forthcoming) a failure within the terms of s.18 will have occurred.*** The courts
are likely to take a practical and non-formalistic approach to determining whether
there has been agreement or not.****

No agreement on appointment procedure. If the arbitration agree- 7-097

ment does not contain a procedure for the appointment of the tribunal, s.16 of the
Arbitration Act 1996 provides a default procedure. The statutory provisions vary
according to the number and constitution of the tribunal.**’ The assistance of the
court is not required unless the statutory procedure contained in s.16 fails or does
not provide for the particular situation.*”® In that event the court can provide a
remedy pursuant to s.18 of the Act, and in doing so the court has a discretion
whether the dispute should be referred to a sole arbitrator or to a panel of three
arbitrators.*”!

Failure to appoint a sole arbitrator. Where the arbitration agreement 7-098

or the Arbitration Act 1996°°? provides for the appointment of a sole arbitrator and

385 See paras 7-024 et seq. above.

386 Atlanska, at [27|-[33], drawing a direct analogy between an agreement to arbitrate and an exclusive
jurisdiction clause, the approach to which is laid down by the House of Lords in Donohue v Armco
[2002] I Lloyd’s Rep. 425.
387 Ghidepath Holding BV v Thompson [2005] 1 All E.R. (Comm) 434 at [46]-{50].
388 City & General (Holborn) Ltd v AYH Plc (2006] B.L.R. 55, where an order to appoint an arbitrator
was made under s.18, although one part of the dispute referred to arbitration was omitted from the
reference as it fell outside of the agreement to arbitrate. Through Transport Mutual Insurance
Association (Eurasia) Ltd v New India Assurance Co Lid (The “Hari Bhum’’) (No.2) [2005] 2
Lloyd’s Rep. 378. ad ;
3884 See Grid Corp of Ovissa v AES Corp & Others, (2002) 7 Supreme Court Cases 736, a decision of
Supreme Court concerning the form of agreement which is required when two
the Indian
arbitrators are required to agree upon a chairman.
the
389 See paras 4-025 et seq. for a complete description of the provisions for appointment in s.16 of
Arbitration Act 1996.
390 Arbitration Act 1996, s.16(7) provides that if there are more than two parties s.18 shall apply.
391 The “Villa” [1998] 1 Lloyd’s Rep. 195 at 197.
392 Arbitration Act 1996, s.15(3).
 394 The Role of the Court

the parties do not all concur in the appointment, the court may appoint an
arbitrator pursuant to s.18 of the Act. Before making the application written notice
to concur in the appointment should be given to the other party or parties to the
dispute. That notice should include or be accompanied by the name of a suggested
arbitrator and invite alternative suggestions from the other party, though this is
not a statutory requirement. The notice does not need to be in a particular form
and the court will be slow to invalidate it simply because the sender may have
identified the wrong contractual document or otherwise made other non-material
errors in the drafting of the notice.*°* If no agreement can be reached on the
appointment within a reasonable time after service of the notice, application may
be made to the court. Where the parties have agreed that related disputes shall be
referred to the same arbitrator the court can use its power under s.18 to appoint
the same arbitrator in all related disputes, provided there has been the requisite
failure to appoint in each case.*°* The power to appoint an arbitrator will also be
exercised where the failure to appoint results from disagreement not between the
original parties to the agreement to arbitrate but between those claiming under or
through an agreement to arbitrate.*”°

7-099 Failure to appoint one of two party-appointed arbitrators.

Where each of two parties is to appoint an arbitrator, and one party makes an
appointment but the other fails to do so, then by following the procedure in s.17
of the Arbitration Act 1996, the arbitrator who has been appointed can act as sole
arbitrator.*”° If that procedure fails or the appointment is set aside, the court can
give directions under s.18 of the Arbitration Act 1996. Section 17 applies even
where the arbitration agreement contemplates the appointment of a third arbi-
trator by some other means such as agreement of the parties or their appointed
arbitrators.*°’
An application to set aside an appointment made pursuant to s.17 of the Act
may be made upon giving notice to the other party.*’* The application should be
made without delay or the right to object may be lost,*”? and should set out the
reason why the original appointment was not made. After hearing the application
the court has power to set aside the appointment,’ in which case the parties
should then appoint arbitrators in accordance with the arbitration agreement.
Whether the court will exercise its power to set aside an appointment will depend

°° Atlanska Plovidba v Consignactones Asturianas SA (The “Lapad’’) {2004] 2 Lioyd’s Rep. 109, per
Moore-Bick J. at [19]. ‘
4 City & General (Holborn) Ltd v AYH Plc (2006) B.L.R. 55.
°° Through Transport, above, involved an assignee of one of the original parties.
#6 The statutory procedure contained in s.17 of the Arbitration Act 1996 for appointing a party
appointed arbitrator as the sole arbitrator is described in para.4—037. :
7 See, for example, Minermet Spa Milan v Luckyfield Shipping Corp SA [2004] EWHC 729 (Comm),
[2004] 2 Lloyd’s Rep. 348.
8 Arbitration Act 1996, s17(3). The procedure for the application is described in paras 8-178 ef
seq.
3% Arbitration Act 1996, s.73(1)(c).
409 Arbitration Act 1996, s.17(3).
 Appointment of an Arbitrator or Umpire 395

upon the specific circumstances of each case.*”! It is submitted that the court will
be reluctant to remove an arbitrator under s.17(3) where the original failure to
appoint is seen as part of an attempt to delay or disrupt the arbitral process. The
court also has power to make an appointment where the s.17 procedure fails.*””

Failure to appoint one of three arbitrators. Where the arbitration 7-100

agreement or the Arbitration Act 1996" provides for the appointment of three
arbitrators, one to be appointed by each party and the third to be appointed by the
two of them or in some other way, the court may appoint one or more of those
arbitrators if the procedure for their appointment fails.*°* This situation can arise
in one of two ways. First, a party refuses to appoint or fails to appoint in time or
within a reasonable time the arbitrator to be appointed by him. In this situation,
assuming he chooses not to adopt the procedure in s.17*°° of the Act, the other
party should first give notice*® to the defaulting party to appoint and then apply
to the court to appoint the second arbitrator.
The second situation contemplated under this heading occurs when two arbi-
trators have been appointed (either by the parties or with the help of the court) but
the third arbitrator is not appointed in due time. This situation is unusual but it
may happen because the two arbitrators cannot agree who to appoint or because
the third party nominated to appoint fails or refuses to do so. In that event the
court can appoint, although before applying to the court notice should be given to
the two arbitrators (and the appointing authority if appropriate) as well as to all
other parties.

Failure to appoint an umpire. Umpires are rarely seen in English 7-101

arbitration following the 1996 Arbitration Act. However, the Act does still contain
provision for the use of umpires, including their appointment by the court where
necessary. An arbitration agreement which provides for the appointment of an
umpire if the arbitrators appointed cannot agree should also provide how and
when the umpire is to be appointed. For example, the arbitrators will notify the
parties of their disagreement and invite the umpire to take over (or “enter upon”)
the reference and conduct the arbitration as if he were sole arbitrator. In the
absence of an agreed mechanism s.21 of the Arbitration Act 1996 makes provision
for how and when the umpire is to be appointed.*°”
If the arbitrators cannot agree on the appointment of the umpire but fail to give
notice of the fact to the parties, or if any of them fails to join in the giving of notice,

4! Section 17 does not specify the grounds on which the court should exercise its discretion to set aside
an appointment. That was deliberate. See DAC report, para.85.
#2 Arbitration Act 1996, s.18.
43 Arbitration Act 1996, s.15(2) provides that an agreement that the number ofarbitrators shall be two
is to be interpreted as requiring the appointment of an additional (third) arbitrator unless otherwise
agreed by the parties. See para.4—036.
4 Section 18 of the Arbitration Act 1996. This provision applies whether it is an agreed procedure
that fails or in the absence of an agreed procedure s.16(5) applies but is not fully utilised.
#5 The provisions of s.17 of the Arbitration Act 1996 are discussed in para.4—037,
496 Section 18(2) of the Arbitration Act 1996.
497 See para.4—150.
 396 The Role ofthe Court

any party to the arbitral proceedings may apply to the court to remedy the
situation.*°8 Notice of the application must be given to the other parties and to
each member of the tribunal. Upon hearing the application, the court may “order
that the umpire shall replace the other arbitrators as the : tribunalBcf with power to
i. :
make decisions, orders and awards as if he were sole arbitrator”. :

7-102 Default by an appointing authority. Under s.18 of the Arbitration Act

1996, the court also has power to appoint an arbitrator where the appointing
authority specified in the arbitration agreement refuses or neglects to appoint or
otherwise fails to do so. A party seeking to have the appointment made by the
court should first serve on the authority concerned a written notice to appoint. If
the appointment is not made within the time specified in the arbitration agreement
or, if no time is specified, within a reasonable time after service of the notice,"'°
then application may be made to the court. This is so whether the authority is to
appoint in all cases or only if the parties fail to agree.*!!

7-103 To fill a vacancy. When an arbitrator ceases to hold office, s.27 of the
Arbitration Act 1996 provides how the vacancy shall be filled (1.e. by the appoint-
ment of a replacement arbitrator if required). The vacancy may occur where an
arbitrator (including a third arbitrator) or umpire who has been appointed refuses
to act,*!* or is incapable of acting, or dies and the parties or the arbitrators do not
fill the vacancy.*'? Unless the parties agree on how the vacancy is to be filled , the
provisions of s.16 (procedure for appointment of arbitrators)*'* and s.18 (failure of
appointment procedure) will apply in relation to the filling of the vacancy as in
relation to an original appointment.*'> So if, for example, the vacancy is on a panel
of three and arises in relation to an arbitrator appointed by one of the parties under
the arbitration agreement, then unless the parties agree otherwise then the party
who originally made the appointment will select a replacement pursuant to s.16 of

#8 Arbitration Act 1996, s.21(5). The procedure for an arbitration application is described in paras
8-178 et seq.
40 Arbitration Act 1996, s.21(5).
“© Normally seven clear days should suffice, and the appointing authority should then be notified of
the application to the court. This period is not specified in s.18 but a similar length of notice appears
in s.17.
“This was clear under s.10(2)(a) of the Arbitration Act 1950, and the words of s.18, which replace
it are wide enough for that purpose.
*”? As to what constitutes a refusal or failure to act see paras 7-116 ef seq.
See, for example, Rocco Guiseppe & Figli SpA v Tupinave (The “‘Graziela Ferraz”) [1992] 2 Lloyd’s
Rep. 452 where the court appointed a replacement for an arbitrator who had died after making an
interim award but before the final award could be made. The court’s order was made pursuant to
s.10 of the Arbitration Act 1950 which has been replaced by s.18 of the Arbitration Act 1996.
In Federal Insurance v Transamerica [1999] 2 Q.B. 286, the court indicated how s.27(I) of the Act
should be construed with the s.16 procedure for the replacement of one member of the arbitral
tribunal.
*° Section 27(3) of the Arbitration Act 1996 replaced s.10(4) of the Arbitration Act 1950.
 Appointment of an Arbitrator or Umpire 397

the Act. In the absence of an agreed procedure,*"® the parties should take care to
observe the time limit in that section.*!”
When the parties cannot agree on how the vacancy is to be filled, either after it
has arisen or beforehand (e.g. by the operation of a contractual appointment
procedure),"'* and the statutory procedure*"” fails to fill the vacancy, any party to
the arbitration agreement may apply for the court to exercise its powers under s.18
of the Act, which extend to appointing a replacement arbitrator or umpire.*?°

Practice. A party seeking to have the appointment made or set aside by the 7-104
court**' should first serve written notice on the tribunal, if it has been fully or
partially appointed, and on all the parties to the reference. The content of the
notice will vary according to the application.*** What is a reasonable length of time
(e.g. 14 days or more) will depend upon the appointment.*** If the appointment
is not made within a reasonable time after service of the notice, then the court
itself may make the appointment or give such directions as may be appro-
priate,

What the court must consider in making appointments. When 7-105

considering how to exercise any of its powers under s.16 (procedure for appoint-
ment of arbitrators) or s.18 (failure of appointment procedure), the court must
have due regard to any agreement of the parties as to the qualifications required
of the arbitrators.”*?? The court will begin by considering the arbitration agree-
ment, including any rules referred to in it. If that agreement mentions that the
arbitrator or umpire should have any particular qualifications s.19 requires the
court to have regard to that requirement in making any appointment. Although
not specified, it may appear to the court from the nature of the dispute that it
would be desirable, for example, that a sole arbitrator should have legal training
and some prior experience as an arbitrator. The court may also be asked to

#16 Arbitration Act, s.16(1) allows the parties to agree the appointment procedure, failing which ss.16(3)
to (6) to apply.
"7 Federal Insurance v Transamerica [1999] 2 Q.B. 286, where the court found that the agreed time limit
rather than the shorter time limit should apply.
418 The ICC Rules, Art.12, contain a replacement procedure as do other arbitration rules (e.g. LCIA,
Art.11.1).
19 Arbitration Act 1996, s.16.
#0 Arbitration Act 1996, s.27(3) specifically provides that the provisions of s.18 shall apply “as in
relation to the original appointment” (i.e. the court can appoint in the same way as it could have
done when the tribunal was originally constituted).
421 For the procedure relevant to the application to the court see paras 8-178 ef seq.
#22 The court will not look at the precise wording of the written notice too finely: In Re Eyre and the
Corporation of Leicester [1892] 1 Q.B. 136.
423 Section 16 provides different time limits according to the size of the tribunal.
#24-The court has a discretion whether or not to appoint, but will usually do so unless there is
substantial delay in making the application. Such an appointment would no longer be conditional
upon the applicant giving security for costs as in Re Byornstad and The Ouse Shipping Co Lid [1924]
2 K.B. 673 in view of the provisions ofs.38(3) of the Arbitration Act 1996, See also Tritonia Shipping
Inc v South Nelson Forest Products Corp [1966] 1 Lloyd’s Rep. 114.
#25 Section 19 of the Arbitration Act 1996 which derives from Art.11(5) of the Model Law.
 398 The Role of the Court

consider imposing other necessary qualifications for members of the tribunal.*”°

The applicant should make clear to the court his own requirements for an
arbitrator. The parties may be required to submit lists of the arbitrators that they
would like appointed, but the court has a discretion whether and who to
appoint.

7-106 Delay. The court has a wide discretion whether to appoint an arbitrator under
s.18.427 Nevertheless, the discretion must be exercised judicially and consistent
with the principles set out in s.1 of the Act. Thus, the court will not appoint an
arbitrator pursuant to s.18 when it is impossible to obtain a fair resolution of the
dispute by an impartial tribunal without unnecessary delay or expense. As noted
the circumstances in which it will decline to appoint an arbitrator are very
restricted, the presumption being that the court should give effect to the agree-
ment to arbitrate and appoint an tribunal.***

7-107 Ancillary powers. As a corollary to the power to appoint an arbitrator or

umpire in the case of the failure or default of an appointment procedure, the court
has power to revoke an appointment already made under a defective appointment
procedure and to give directions as to how the tribunal should be constituted.*”?
In giving those directions the court will have regard to the intention of the parties
where it is reflected in the arbitration agreement or otherwise to the terms of s.15
of the Act. That section provides for a sole arbitrator if there is no agreement as
to the number of arbitrators and unless otherwise agreed for the appointment of
an additional arbitrator if the parties have provided for an even number of arbi-
favors?

7-108 Powers of arbitrator or umpire appointed by the court. An

appointment made by the court will have the same effect as if made by or with the
agreement of the parties.**' Thus, an arbitrator or umpire appointed by the court
has the same powers to act in the reference and to make an award as if he had been
appointed by consent or in accordance with the terms of the arbitration agree-
ment. Where the case so requires, an arbitrator appointed by the court has the

”° In Virdee v Virdi [2003] EWCA Civ 41, the judge at first instance decided that it was not essential
that members of the tribunal be members of the Sikh community. In Federal Insurance v Transamer-
ica [1999] 2 Q.B. 286, the qualifications related to insurance experience.
“7 The ‘Frotanorte”’ [1996] 2 Lloyd’s Rep. 461 at 468, CA, a decision based on the old arbitration law,
but referred to with approval in Durthell & Sons v Secretary of State for Trade & Industry [2001]
1 Lloyd’s Rep. 275.
"8 See para.7-096 and Atlanska, above. Compare the decision in Secretary of State v Percy Thomas
Partnership |1998] 65 Con. L.R. 11 (where the application to appoint an arbitrator was refused) with
that in Durthell, ibid. at [60|-{65).
*° Section 18(3) of the Arbitration Act 1996.
45° See paras 4-006 ef seq.
+51 Arbitration Act 1996, s.18(4).
 Removal of the Tribunal 399

same duty to appoint a third arbitrator as if he had been appointed under the
arbitration agreement.**”

Appeal. Permission of the “court”’** is required for any appeal from a decision 7-109
of the court under ss.17, 18, or 21 of the Act.*** It had been thought that court
meant the court which made the order and that in the absence of such leave the
Court of Appeal could not consider the matter. There are now at least two
categories of case where the Court of Appeal may give permission to appeal even
though the judge at first instance has not given permission. These cases are
discussed further at para.7—201 which deals with wording to the same effect under
s.44(7).

6. REMOVAL OF THE TRIBUNAL, RESIGNATION AND REVOCATION

OF AUTHORITY

Introduction. A tribunal’s authority runs from the time of its appointment 7-110
until a final award is made after which the tribunal has no further duties.**> It is
possible, although rarely done, for the parties to agree in advance the circum-
stances in which the authority of an arbitrator may be revoked. If a settlement of
the dispute is reached, the parties may want to revoke the authority of the arbitral
tribunal rather than have an award which records the settlement. The Arbitration
Act 1996 empowers parties acting jointly by themselves or through an arbitral
institution to revoke the tribunal’s authority*’® subject to the right of each member
of the tribunal to recover his reasonable fees and expenses.**? When the authority
of the tribunal is revoked in the manner just described, there is no role for the
court to play.***
The court’s power to revoke the appointment of an arbitrator or an umpire is
limited to the situation where the original appointment was made under s.18 of the
Act because of the failure of the appointment procedure.**” The court no longer
has power to revoke the tribunal’s authority on the ground that the dispute
involves a question of fraud.1”

+2 This is implicit from s.18(4) of the Arbitration Act 1996.

433 Section 105(1) of the Arbitration Act 1996, defining court as the court of first instance.
434 Arbitration Act 1996, ss.17(4), 18(5) and 21(6). In Virdee v Virdi [2003] EWCA CIS 41, the judge
had refused leave to appeal against his decision on the appointment of an arbitrator and the Court
of Appeal concluded that it had no jurisdiction to entertain an appeal against his decision because
of the exclusion in s.18(5) of the Act.
435 Hence the reference to arbitrators being ‘“‘functus officio”.
6 Arbitration Act 1996, s.23(3).
87 Arbitration Act 1996, s.28.
488 Mention of this possibility appears in para.4—166.
439 Section 23(5)(a) of the Arbitration Act 1996. See para.7—136.
+0 The provision was contained in the Arbitration Act 1950, s.24(2) but does not appear in the
Arbitration Act 1996. As to the meaning of “fraud” in this context, see Watson v Prager [1991] 3
All E.R. 487 at 510.
 400 The Role of the Court

Even where an arbitrator resigns, the court’s role is limited to granting him
relief from any liability as a result of his resignation, and making an order in
respect of his entitlement to any reasonable fees or expenses, if those matters
cannot be agreed between him and the parties.“
In exceptional cases the court is empowered to remove an arbitrator*” or an
umpire** in the course of the reference upon the application of one or more of the
parties to the arbitration.‘ The grounds for such an application are specified in
s.24 of the Act and are considered below.

7-111 Power to remove an arbitrator.** Upon application of a party to the

arbitral proceedings the court has power to remove an arbitrator under s.24 of the
Arbitration Act 1996 on any of the four grounds specified in that section. Notice
of the application must be given to the other parties, to the arbitrator**® concerned
and to any other arbitrator.**”7 Each ground for removal will be examined in
turn.

7Al12 First ground: partiality. The Arbitration Act 1996 imposes a general duty
on the tribunal ‘“‘to act fairly and impartially as between the parties”.*** Of the four
grounds for removal contained in s.24, this is the most significant and it is thought
that most objections which are raised to an arbitrator are done so under this head,
or under equivalent provisions contained in institutional rules. If there is actual
bias on the part of an arbitrator not only will any award that he makes be subject
to challenge for serious irregularity*” but he may also be removed by the court on
the application of one of the parties.**° Even if there is no actual bias the arbitrator
may be removed if the court is satisfied that there is apparent bias, namely that
there are “justifiable doubts as to his impartiality” and the court will also consider
setting aside any awards in these circumstances.**'! There is therefore a clear

+ See pata.7—136.
“? Section 24 of the Arbitration Act 1996 provides for the removal of an “arbitrator”, but it is possible
for the court to remove more than one arbitrator (e.g. a tribunal of three) if a case for removal is
made out against them all.
“5 Arbitration Act 1996, s.82(1) provides that “‘arbitrator’’, unless the context otherwise requires,
includes an umpire.
“+ Arbitration Act 1996, s.24.
“© The term “arbitrator” is used for convenience, but in this context it also includes an umpire if
appropriate: Arbitration Act 1996, s.82(1).
446
See Miller Construction Lid v James Moore Earthmoving {2001] 2 All E.R. (Comm) 598 for the notice
required to be given to the arbitrator concerned.
*Y Section 24(1) Arbitration Act 1996. For the procedure relevant to an application for removal see
paras 8-178 et seq.
™® See s.33(1)(a) of the Arbitration Act 1996 and paras 4-106 ef seq. which contain a full discussion on
this subject.
4 Section 68(2)(a) of the Arbitration Act 1996 which deals with a failure to comply with the general
duty to act “fairly and impartially” as between the parties. See para.8-077.
*° Section 24(1)(a) of the Arbitration Act 1996,
*' Section 24(1)(a) of the Arbitration Act 1996.
 Removal ofthe Tribunal 401

relationship between ss.24 and 68 of the Arbitration Act and challenges to awards
on the basis of partiality are often brought under both grounds.**?

Irregular conduct of the proceedings. Although relatively rare, the 7-113

arbitrator’s conduct of proceedings can give rise to justifiable doubts as to his
partiality, although there will be inevitable overlap with a failure properly to
conduct proceedings under s.24(d)(i). The court will be slow to remove an
arbitrator on this basis because of the understandable concern that objections are
being raised by a party because he perceives that proceedings are going against him
or because he has a general desire to disrupt or delay proceedings for fear of an
unfavourable outcome. In this regard, the requirement imposed by s.73 to raise
any “irregularity affecting the tribunal”*** promptly is of central importance.
However, on rare occasions where the arbitrator’s conduct justifies it and when
objection is raised promptly, an arbitrator will be removed as a result of his
conduct of the proceedings. In Norbrook Laboratories v Tank,** a successful
application was made to challenge an arbitrator after he had made an interim costs
order against a party who had served notice under the applicable institutional rules
that the short-form procedure should be terminated. The arbitrator had also
contacted three potential witnesses unilaterally. Although he had not obtained
witness statements from them, it was clear that he had spoken to them and he did
not disclose the fact of his approaches or the content of his discussions to the
parties. The arbitrator’s exposure to these witnesses and to the disparaging
remarks that they might be assumed to have made about one of the parties gave
rise to a real possibility of bias. The unilateral contact with witnesses also gave rise
to a failure properly to conduct proceedings under s.24(d)(i). Additionally, uni-
lateral telephone contact with the parties is “‘generally to be deprecated” and falls
to be considered as a failure properly to conduct the proceedings.**? Other
conduct by the arbitrator did not give rise to justifiable doubts as to partiality. This
included:

1. a decision to award costs against the applicant upon his termination of the
short form procedure, which the arbitrator clearly had the power to do
under the relevant rules. The failure to give reasons for the decision on
costs is an irregularity within the terms of s.68(1) and could have formed
the basis of an application that the court should exercise its powers to order
reasons to be given under s.70(4) but no such application was made.

2. an antagonistic relationship with the claimant’s solicitors,’ and

impartiality and the test to be applied by the fair minded and informed observer
452 The requirement of
is discussed further at paras 4-106 et seq.
#3 Arbitration Act 1996, s.73(1)(d).
45412006] EWHC 1055, where the arbitrator was removed and his partial award set aside.
455 Norbrook Laboratories v Tank, at [132]. Arbitrators are well advised to ensure that their conduct
cannot give rise to suspicion and so avoid private communications with either party even on trivial
administrative matters. See para.7-118 below.
456 For a decision where an antagonistic relationship between counsel and a judge gave rise to a
reasonable apprehension of bias, see R. v Lashley [2005] EWCA Crim 2016. See also Homell &
Others v Millais && Others [2007] EWCA 720.
 402 The Role of the Court

3. expressions of views as to the value of in-house expert evidence as com-

pared to independent expert evidence before hearing that evidence.

Ordinarily, the court will be slow to uphold a challenge on the basis that a
particular decision of the tribunal shows a real possibility of lack of impartiality.*”
A challenge based on the alleged wrongful issue by the arbitrator of a peremptory
order has been dismissed as “risible” and a challenge relating to the allegedly
excessive time spent by the arbitrator in listening to and understanding counsel’s
submissions as ‘“‘absurd”’, although in order to reach such a view the court did
effectively review the arbitrator’s behaviour in the context of the arbitration and
reach its own view as to the arbitrator’s conduct.***

7-114 Second ground: absence of required qualifications. In some cases

the parties specify in the arbitration agreement that any arbitrator appointed must
possess certain qualifications**’ and that requirement must be respected unless it
is waived by all parties at the time of the appointment.*®° If an arbitrator is
appointed by one party or by an arbitral institution and he does not possess the
required qualifications another party to the arbitral proceedings may apply to the
court to have him removed on that ground.*°!

7-115 Third ground: incapacity. The court may also remove the arbitrator on
the basis that he is physically or mentally incapable of conducting the proceedings
or that there are justifiable doubts as to his capacity to do so.*? The court’s power
is not limited to an incapacity arising after the date of the appointment,*®
although in exercising its power to remove the court may take account of what the
parties knew of the incapacity at the time of the appointment. In some cases the
incapacity will be obvious*® but in others it may be difficult to determine whether
the incapacity justifies removal.*® In the latter situation an applicant must satisfy
the court on the evidence adduced that there are real doubts that the arbitrator
concerned is capable of fulfilling his role as an arbitrator. The incapacity need not
*7 ASM Shipping Ltd ofIndia v TTMI Ltd ofEngland [2006] 1 Lloyd’s Rep. 375 at [45], rejecting a
ground for challenge based on the tribunal’s failure to grant a requested adjournment. The judge’s
comment that the impugned decision of the arbitrators in this case was also the “right decision”
arguably goes further than the courts should go when considering allegations relating to the conduct
of an arbitration.
®° See Sinclair v Woods of Winchester Ltd 102 Con. L.R. 127, at [41]-[46], [64]-[66].
*° Qualification may include ‘Queen’s Counsel”, “Engineer” or ‘Commercial man” see
para.4—017.
“The right to object may subsequently be lost, see s.73(d) of the Arbitration Act 1996 and
para.7—127.
*6! Arbitration Act 1996, s.24(1)(b). The possibility of removal on this ground was
discussed in
Continental Grain v China Petroleum (December 4, 1998), Mance J., although
the decision con-
cerned an alleged mistake about qualifications of an arbitrator: see para.4—017. The subject
of
qualifications has also been mentioned in the context of s.19 of the Act: see para.7—105.
62 Section 24(1)(c) of the Arbitration Act 1996.
*°3'This view is based on the words of s.24(1) of the Arbitration Act 1996.
+64 A physical handicap that occurs after the arbitrator was appointed for example.
“6° The incapacity may manifest itself in failure to act, so that there will be ov
Sete erlap with the fourth
ground specified in s.24(1).
 Removal of the Tribunal 403

be life-long, but it must be serious enough to put the arbitrator out of action
altogether so far as the arbitration is concerned.*®° Where it is unclear whether
deficiencies in the capability or performance ofthe arbitrator are due to incapacity
or neglect the application for removal should be based on both the third and fourth
grounds specified in s.24 of the Act.

Fourth ground: Refusal or failure properly to conduct pro- 7-116

ceedings. The fourth ground for removal is very broad and extends to many
situations where an arbitrator breaches his general duty to the parties.” It is
expressed in s.24(1) of the Act as follows:

““(d) that [the arbitrator] has refused or failed

(i) properly to conduct the proceedings, or

(11) to use all reasonable despatch in conducting the proceedings or making an
award,

and that substantial injustice has been or will be caused to the applicant.”

Failure properly to conduct proceedings. As discussed above,‘ 7-117

allegations relating to the conduct of proceedings by arbitrators very rarely
succeed. ‘To the extent they do, the challenger will need to show that the arbitrator
has failed to comply with the general duties under s.33 and s.68(2)(a), (b) and (c)
of the Act. There will often be substantial overlap between allegations under this
ground and the first ground above, where it is alleged that improper conduct of
the proceedings manifests some objective lack of impartiality towards one of the
parties.
In Norbrook Labratories Ltd v Tank,*® the arbitrator’s conduct*”’ described
above constituted a failure to conduct proceedings properly within the terms of
s.24(d)(i). In particular each of:

1. unilateral telephone contact with the parties, not wholly confined to admin-
istrative matters, and

2. unilateral contact by the arbitrator with three fact witnesses compounded

by a failure to make an exact record of what they said or to disclose such
a record to the parties

466 Succula Ltd and Pomona Shipping Co Lid v Harland and Wolff Ltd [1980] 2 Lloyd’s Rep. 381, a
decision based on the previous legislation but whose comments at 388 are still relevant. Inability to
comply with his duties to conduct the arbitration with reasonable dispatch falls within s.24(1)(d)(i1)
of the Arbitration Act 1996,
467 See 5.33 of the Arbitration Act 1996 and paras 5—040 er seq. for this duty.
468 Paragraph 7-113.
#69 [2006] EWHC 1055.
7° Paragraph 7-113.
 404 The Role of the Court

did give rise to a failure properly to conduct the proceedings.*’' The court’s
decision to remove the arbitrator on the second of these complaints was also based
on an appearance of lack of partiality.

7-118 Unilateral communications. Whilst there is no absolute rule against the

arbitrator having unilateral discussions with one party only, the practice is, as
noted in Norbrook, generally to be deprecated and can certainly lead to removal
under this head or for a reasonable apprehension of bias, especially if discussions
are intentional or frequent, go beyond administrative matters*’” or are not
promptly disclosed to the other party.*”* Discussions concerning the appointment
of the chairman fall within a generally recognised but not entirely clear exception
to this rule.*7** The Hong Kong Supreme Court refused to remove an arbitrator
who refused to disclose the content of unilateral discussions with his appointing
party over the identity of the chairman.*’*?

7119 Other failures. The scope of a failure properly to conduct proceedings goes
beyond unilateral contact with the parties. If an arbitrator has decided to deal with
liability and quantum in two separate hearings, but then proceeds to make findings
on quantum in the first hearing then a serious irregularity may result as well as
possibly the removal of the arbitrator.*”*

7-120 Refusal to act. The fact that an arbitrator has refused either to conduct the
proceedings or make an award as described in s.24 must be established by
evidence. Ifin writing, the written refusal should be produced to the court. If the
refusal was oral, the court should be informed of the words used by the arbi-
trator.
Whether an arbitrator has refused to act is a question for the court and not the
arbitrator. From a practical point of view however the court will consider the
arbitrator’s view on the matter because if he was of the view that he had refused
to act, and maintained his refusal, then the court would take into account that he
could not be forced to continue with the arbitration against his will.*7>

a per@olnannl|atligylk
*? Minor administrative unilateral discussions, such as a telephone call to enquire about the wherea-
bouts of papers or arrangements for a hearing, are it is suggested, not objectionable.
** For a case where an adjudicator held discussions with one party concerning issues of jurisdiction
and accordingly gave rise to a reasonable apprehension of bias, see Discain Project Services v
Opecprime Development [2000] B.L.R. 402.
4730
Such discussions are permitted by the IBA Rules of Ethics for International Arbitrators, [5.2].
13> Pacific China Holdings Ltd v Grand Pacific Holdings Ltd ACCT 5/2007.
* Benaim (UK) Ltd v Davies Middleton & Davies Ltd (No.2) 102 Con. L.R. 1 at [31]. The allegation
was not made out on the facts. ;
*” Succula Lid and Pomona Shipping Co Ltd v Harland and Wolff Ltd [1980] 2 Lloyd’s Rep. 381.
 Removal of the Tribunal 405

If an arbitrator designated in an arbitration agreement seeks to delegate his

duties by nominating someone else to act as arbitrator in his place, this may be
treated as a refusal to act.*”°
Not every refusal to act will suffice. A refusal to make an award on an issue of
jurisdiction may be justified provided that the tribunal is willing to proceed with
the arbitration and to determine any issues of jurisdiction in their final award in
due course.

Failure to act. It may be more difficult to show that an arbitrator has failed 7-121
(as opposed to refused) to act in the manner specified in s.24(1)(d) of the Act. The
failure must have a serious effect on the conduct or outcome of the arbitral
proceedings as well as causing substantial injustice to the applicant. This occurred
where an arbitration was conducted in such a manner that one party was denied
the right to know the case to be met,*’’ but mere lack of confidence in the tribunal
is not a sufficient ground for removal.*’* Even a failure to comply with an order
of the court may not suffice.*”” In order to support an application for removal,
evidence should be adduced by the applicant of each failure relied upon.**°

The dilatory arbitrator. The previous paragraphs mention cases where the 7-122
tribunal has refused or failed properly to conduct the arbitral proceedings. There
is however another kind of refusal or failure which can in exceptional circum-
stances lead to the tribunal’s removal. That occurs where the proceedings are not
conducted with reasonable despatch or an award is not made within a reasonable
time. The tribunal is required to conduct the proceedings and adopt procedures
that will avoid unnecessary delay.**! A refusal or failure to conduct the proceedings
or make an award with reasonable despatch can lead to the tribunal’s removal,
although the delay would have to be truly exceptional so as to cause substantial
injustice to the applicant. What is reasonable despatch will depend on the circum-
stances. For instance, a decision in a “‘documents only” case*** may be expected
more quickly than in an arbitration where the testimony of many witnesses has to
be considered. The subsection**® is aimed at the type of delay which is serious and

476 Neale v Richardson [1938] 1 All E.R. 753, Succula Lid and Pomona Shipping Co Lid v Harland and
Wolff Lid [1980] 2 Lloyd’s Rep. 381.
+77 Damond Lock Grabowski v Laing Investments (Bracknell) Ltd [1992] 60 B.L.R. 112. Though based
on the Arbitration Act 1950, the facts of this decision would justify removal under s.24 of the
Arbitration Act 1996.
478 Groundshire v VHE Construction [2001] B.L.R. 395 at 399. Parts of this decision have been doubted
in subsequent cases: See T7MI Lid of England v ASM Shipping Ltd ofIndia [2006] 1 Lloyd’s Rep.
401 at [34].
*eihe sees and Construction Co Lid v Delta Civil Engineering Co Lid (May 26, 2000), H.H. Judge
Wilcox.
480 This was done, for example, in Home of Homes Ltd v Hammersmith and Fulham LBC |2003] EWHC
807, although having considered the evidence adduced Forbes J. dismissed the application to remove
the arbitrator.
481 Arbitration Act 1996, s.33(1)(b).
482 See para.5—108.
483 Section 24(1)(d)(ii) of the Arbitration Act 1996.
 406 The Role of the Court

inexcusable. Doing nothing will not justify complaint let alone removal if no one
has asked the tribunal to do anything.***

7-123 Substantial injustice. In order to remove an arbitrator on any of the four

grounds specified in s.24(1) of the Act, the applicant must persuade the court not
only of the particular failure or refusal (as described in the preceding paragraphs)
but also that he has suffered or will be caused substantial injustice if the arbitrator
concerned is not removed.**> As has already been mentioned**® the expression
“substantial injustice” is not defined in the Arbitration Act 1996. In the context
of removing an arbitrator, guidance as to the intended meaning of the words can
be obtained from para.106 of the DAC report in which it was said, ‘“The provision
is not intended to allow the court to substitute its own view as to how the arbitral
proceedings should be conducted. Thus the choice by an arbitrator of a particular
procedure, unless it breaches the duty laid on arbitrators by s.33, should on no
view justify the removal of an arbitrator, even if the court would not itself have
adopted that procedure.’’**’

7-124 Finding of bias imputes substantial injustice. Once the court has
found a real possibility of bias (i.e. it is satisfied as to the first ground of s.24) then
substantial injustice will normally be imputed as a matter of course. In other
words, in cases of actual or apparent bias there is no second hurdle to get over, or
if there is it is a very low one. As Morison J. said in ASM Shipping Ltd v TIMI
Ltd, “In my judgement there can be no more serious or substantial injustice than
having a tribunal which was not, ex hypothesi, impartial, determine parties’
rights.”’*88

7-125 The other three grounds. In respect of the other three grounds ofs.24, the
second hurdle remains and if it cannot be surmounted the challenge will not be
sustained. This was the case in Norbrook Labratories Ltd v Tank,**? where uni-
lateral telephone contact with the parties which amounted to a failure properly to
conduct the proceedings did not lead to substantial injustice as it was in each case

* Succula Lid and Pomona Shipping Co Lid v Harland and Wolff Ltd {1980] 2 Lloyd’s Rep. 381, a
decision based on, among others, the former s.13 of the Arbitration Act 1950. See also Enterra Pty
Lid v ADI Lid, September 1, 2002, Supreme Court of New South Wales, for an unsuccessful
attempt to remove an arbitrator under s.44(c) of the Commercial Arbitration Act 1984 of New
South Wales for failure to convene a hearing within a certain period of time.
#85 Section 24(1)(d) of the Arbitration Act 1996.
480 See para.7—084.
*” "The words in square brackets have been inserted to apply them to the provisions in the Arbitration
Act 1996. The words appearing in the report refer to the Arbitration Bill.
*** [2006] 1 Lloyd’s Rep. 375 at [39]. These comments were endorsed by Colman J. in Norbrook
Laboratories v Tank, at [144|-{145] adding that substantial injustice would “normally” be inferred
in bias cases and by Andrew Smith J. in ASM Shipping Limited v Bruce Harris & Others [2007]
EWHC 1513, at [32]. The contrary finding in Groundshire v VHE Construction [2001] B.L.R. 395,
at [33]{34] can no longer be regarded as good law.
489 [2006] EWHC 1055.
 Removal of the Tribunal 407

immediately disclosed to the other party.” Removal on this ground will only
occur if the conduct of the arbitrator concerned is so unreasonable that justice
demands that the arbitration should be temporarily halted or permanently brought
to an end*”! and no other method of doing so is available to the court.*?

Misconduct. This word does not appear in the Arbitration Act 1996 but under 7-126
the previous law it covered a wide range of errors on the part of an arbitrator.‘
It ranged from a fundamental abuse of his position*?* to what was often referred
to as “technical misconduct’, i.e. where the arbitrator made errors but not in a
culpable way or so as to impugn his integrity. Technical misconduct in that sense
has no place in the law since the Arbitration Act 1996. Under the 1996 Act the
grounds for removing an arbitrator are confined to the four grounds specified in
s.24.49°

Loss of right to object. A party who wants an arbitrator removed should dtl]
apply to the court*”® as soon as he becomes aware that there are grounds for
removal. He may lose his right to object if he delays. Section 73(1) of the
Arbitration Act 1996 provides that the applicant may not raise an objection*’”
before the court or tribunal*”* if he continued to take part in the arbitral proceed-
ings without objecting “‘forthwith or within such time as is allowed by the
arbitration agreement’’*”’ unless he shows that, at the time he took part in the
proceedings, “he did not know and could not with reasonable diligence have
discovered the grounds for the objection’’.*°’ To be caught under this section the

°° Paragraph 137. Meeting an expert witness without informing the parties beforehand has been found
to be an irregularity under s.68 but may not be a serious one: Hussman v Al Ameen [2000] 2 Lloyd’s
Rep. 83 at 95. See also Egmatra v Marco Trading Corp [1999] 1 Lloyd’s Rep. 862 and Pacol v
Rossakhar [2000] 1 Lloyd’s Rep. 109.
#1 Such a case was Damond Lock Grabowski v Laing Investments [1992] 60 B.L.R. 112. For a case at the
opposite end of the spectrum, see Dredging & Construction Co v Delta Civil Engineering (May 26,
2000), H.H. Judge Wilcox.
492 See Wicketts & Sterndale v Brine Builders [2002] C.1.1.L. 1805, where the arbitrator was removed
under s.24(1)(d) because of inappropriate directions aimed at securing his fees.
#3 Atkin L.J. described “misconduct” in Williams v Wallis & Cox (1914] 2 K.B. 478: “That expression
does not necessarily involve personal turpitude on the part of the arbitrator . . . The term does not
really amount to much more than such a mishandling of the arbitration as is likely to amount to
some substantial miscarriage of justice”. See also Annie Fox and Others v PG Wellfair Ltd (1981) 2
Lloyd’s Rep. 514.
494 For example by accepting financial inducements to decide the case in favour of one of the par-
ties.
#5 See paras 7-111 et seq.
496 Tf there is a challenge procedure in the arbitration agreement itself or in any rules incorporated into
that agreement (e.g. ICC Rules, Art.11), the applicant must, before applying to the court, exhaust
that procedure—Arbitration Act 1996, s.24(2).
4°7 The objection here means any objection on which the application for removal is based. There may,
of course, be several objections (see the use of the words “that objection” in s.73(1) of the
Arbitration Act 1996).
498 Although s.73(1) refers to raising an objection “before the tribunal or the court” this phrase also
embraces objections made under the relevant rules to arbitral institutions.
4 The arbitration agreement itself or rules incorporated into it may contain a time limit within which
any challenge must be made.
500 Arbitration Act 1996, s.73(1).
 408 The Role of the Court

applicant must have had knowledge of the essential facts constituting the irregu-
larity or had grounds to believe that there was an irregularity.°°' The section does
not therefore operate to catch a party who in a general sense had vague grounds
to believe that some irregularity may have occurred, unless the circumstances were
such as to put that party on a duty of further enquiry. A leading example of failing
to act promptly can be found in ASM Shipping Lid of India v TTMI Ltd of
England’? Although apparent bias was made out the award was not set aside
because the applicant delayed in making its challenge until the award was delivered
and accordingly had fallen foul of s.73. What is striking about this case is that an
objection to the arbitrator and an attempted reservation of rights was made as soon
as the facts came to light at a hearing. However, once the arbitrator had declined
to recuse himself the court found that a s.24 challenge should have been made
promptly; it was not acceptable to continue the objection in correspondence and
wait until the outcome of the award was known. “‘A ‘heads we win, tails you lose’
position is not permissible in law as s.73 makes clear”’.°’’ In a related decision in
the same litigation, the court reinforced this conclusion, noting that it was not
sufficient to put down a marker, “‘An objection under s.73 must be stated in
properly specific terms”’.°°* The ASM Shipping decisions serve as a salutary lesson
to anyone who thinks that their position will be fully protected simply by sending
a letter containing a reservation of rights. The loss of the right to object applies
only to someone who takes part in the arbitral proceedings.*”° If he does not take
part in those proceedings that section does not apply to him.

7-128 Existence of non-waivable grounds for challenge. A further issue

in relation to the loss of the right to object is whether there are any non-waivable
grounds for challenge in English law. The traditional and current prevailing view
is that there are no non-waivable grounds in English law,°°° contrasting with the
approach taken by the IBA Guidelines on Conflicts of Interest in International
Arbitration’ which includes a “‘non waivable” red-list. The traditional view was
challenged in Weissfisch v Julius and Others*°* where a party disputed the effective-
ness of the waiver it had given in circumstances where the arbitrator had acted for
both parties to the arbitration and in fact had advised them on the dispute which
was submitted to arbitration. The point was not decided as part of the injunction
application then before the Court of Appeal.

°° Sumukan Lid v Commonmealth Secretariat [2007] EWHC 188.

°°? [2006] 1 Lloyd’s Rep. 375. See para.7-113.
° Paragraphs 48-49. See also Sinclair v Woods of Winchester Ltd 102 Con. L.R. 127, at [33], where
again conduct at the hearing could not be objected to as the challenger waited until after delivery
of the award to make the challenge. :
°° ASM Shipping Lid v Bruce Harris & Others [2007] EWHC Lod satis
°° ASM Shipping Lid of India v TTMI Lid of England {2006] 1 Lloyd’s Rep. 375.
°° See for example Smith v Kvaerner Cementation [2006] EWCA 242, a non-arbitration case
where a
recorder who acted for companies in the same group as one of the parties to a court action
before
him could decide the case if there was a sufficiently informed waiver to that effect.
°°7 Available at mmm. ibanet.org.
°°8 [2006] EWCA 218.
 Removal of the Tribunal 409

Orders the court can make. Onan application for removal of an arbitrator 7=129
under s.24 of the Act the court can make one or more of the following
orders*”:

® dismiss the application;

® remove the arbitrator against whom the application is made

@ declare the entitlement (if any) to fees and expenses of the removed arbi-
trator; and

@ direct any arbitrator removed to repay any fees or expenses already paid.

Filling of vacancy on removal. If the arbitrator is removed the vacancy 7-130

created by his ceasing to hold office will be filled in accordance with s.27 of the Act
which provides that in the absence of some other agreement by the parties the
same procedure as applied to the original appointment will apply,*!'° to the extent
possible,*'' to fill the vacancy.°””

Fees and expenses of removed arbitrator. The court may, as noted, 7131
be asked to fix the fees and expenses of the arbitrator who is removed. If the
applicant wishes to recover any payment already made to the arbitrator an order
for repayment should be sought. As the DAC report noted, “‘We would expect this
power to be exercised where the behaviour of the arbitrator is inexcusable to the
extent that this should be marked by depriving him of all or some of his fees and
expenses.””*'’ The power to make orders (including a repayment order) in respect
of the fees and expenses of an arbitrator removed by the court*'* provides a means
of enforcing the general duty of the tribunal imposed by the Arbitration Act
1996.

Rights of arbitral tribunal. A challenged arbitrator has the right to f=N32

appear and be heard on an application to remove him.*'® The arbitrator can also
provide written submissions or a witness statement to the court if he wishes
however it has been observed that assertions by an arbitrator who is the subject of
a challenge that he had an open mind or was otherwise not biased are often
50° The court can also set aside any awards of the removed arbitrator under s.68 of the Arbitration Act
1996.
510 Which, pursuant to s.16 of the Arbitration Act 1996, will be that agreed between the parties or, in
the absence of agreement, the default procedure set out in that section.
511 Arbitration Act 1996, s.27(3) provides that s.18 of the Arbitration Act 1996 will apply where the
appointment procedure has failed.
512 See para.7—103.
513 DAC report, para. 108. se
514 The court’s power to make such orders is derived from s.24(4) of the Arbitration Act 1996.
515 The general duty of the tribunal is set out in s.33 of the Arbitration Act 1996: see para.5—032.
516 Section 24(5). The arbitrator exercised this right in Norbrook Labratories Ltd v Tank [2006] EWHC
1055. See Miller Construction Ltd v James Moore Earthmoving [2001] 2 All E.R. (Comm) 598 for the
arbitrator’s right to notice and to take part in the application claim if he wishes to do so.
 410 The Role of the Court

unlikely to be helpful and should be accorded little or no evidential weight.°!” The

other members of the arbitral tribunal°!* will be concerned about such an applica-
tion and are entitled to be notified of it.°!? The applicant also has an interest in
keeping any other members of the tribunal informed because the arbitral proceed-
ings may continue and an award may be made even though an application to the
court for removal of an arbitrator is pending. If the applicant wants the tribunal to
suspend the proceedings until the court has determined the matter he should ask
for a suspension. The tribunal is not obliged to grant his request®*° and would be
unlikely to do so where the proceedings could continue to run through various
preparatory stages without prejudice to either party whilst the challenge is pend-
ing or where the challenge is seen as an attempt to derail arbitral proceedings.

7-133 Relief for arbitrator who resigns. An arbitrator or umpire who wishes
to resign from his office before making his final award should seek the prior
agreement of the parties. If he does not do so he may incur liability for the extra
costs associated with replacing him and re-running part of the previous arbitral
proceedings before his replacement.**' He may be able to agree the extent of any
liability with the parties consequent upon his resignation, in which case the
agreement must be in writing,°’” but in default he may have to apply to the court
to determine that liability as well as his entitlement, if any, to his own costs and
expenses for what he did prior to his resignation.**? It may be better for an
arbitrator to take advantage of s.25(3) of the Arbitration Act 1996 rather than to
wait until he is sued by the parties, particularly if fees and expenses are due to
him.

7-134 Limitations on relief from liability. Although an arbitrator who

resigns without the agreement of the parties may apply to the court for relief,>?*
it is worth emphasising that such relief from liability will not be granted to an
arbitrator unless he satisfies the court that his resignation was ‘reasonable in all
the circumstances”’.°*? This requirement is consistent with the general duty that

*'” Re Medicaments & Related Classes of Goods [2001] 1 W.L.R. 700, per Lord Hope at 495.
*!8 If the arbitrator concerned is the sole arbitrator he will be the tribunal, but there may be other
members of the tribunal against whom no order is sought. ‘
*” Arbitration Act 1996, s.24(1). The procedure for an arbitration application is contained in paras
8-178 et seq.
°° Arbitration Act 1996, s.24(3). The position is more difficult if a challenge is made just before a
scheduled hearing is due to commence as the tribunal would be concerned that if the hearing goes
ahead and the challenged arbitrator is subsequently removed that the hearing would have to be
re-run.
*21 See para.4—-158.
* Arbitration Act 1996, s.5(1) requires the agreement to be in writing. That section refers to
“agreement between the parties” but as the resigning arbitrator will require both parties’ agreement
the requirement of writing would seem to apply.
**3 Arbitration Act 1996, s.25(3).
The right to apply to the court is apparent from s.25(3) of the Arbitration Act 1996. For the
procedure for an arbitration application see paras 8-178 et seq.
25 Arbitration Act 1996, s.25(4).
 Removal of the Tribunal 411

arises when an arbitrator accepts his appointment,°*° it is an implied term of the

arbitrator’s retainer that he will complete the reference unless it is reasonable not
do so. Failure to appreciate that the office would be onerous does not by itself
justify resignation. The parties are likely to incur extra costs if an arbitrator has to
be replaced particularly if some parts of the proceedings have to be re-heard, and
this is a significant factor in determining the reasonableness of the arbitrator’s
resignation.

Relief granted on terms. The court’s power to grant relief from liability 1-135
may be made on terms.**’ Those terms may include an order that the arbitrator
who resigns should bear all or at least some of any wasted costs. That can be
achieved either by reducing any fees and expenses to which he would otherwise be
entitled or by ordering him to repay any amounts already paid. The court has a
complete discretion as to the terms of any order.
If the court decides not to grant the arbitrator relief from liability, he may have
to settle the liability by making a payment out of his own personal funds.

Court’s power to revoke arbitrator’s appointment. In addition to 7-136

the court’s power to remove an arbitrator?”* the court may revoke an appointment
under s.18 of the Arbitration Act 1996 when there has been a failure of a
procedure for the appointment of an arbitral tribunal.

Effect of removal, revocation, death or resignation. When an 1-137

arbitrator ceases to hold office, for whatever reason, a number of questions may
arise, including:

® should he be replaced and if so how?

® to what extent will any previous proceedings in the arbitration stand?

@ what effect, if any, will his ceasing to hold office have on any application made
by him or a party?
@ is he entitled to any fees or expenses?

The first three questions are suggested by s.27(1) of the Arbitration Act 1996
which provides that the parties are free to decide on the answers, but otherwise
certain default provisions apply. As to how a vacancy should be filled, the
procedure under s.16 for appointment of arbitrators applies°”’ and an application
may be made to the court for directions under s.18 of the Act if that procedure

526 The general duty is specified in s.33 of the Arbitration Act 1996, see para.5—032. Although that
position does not say that an arbitrator cannot resign without the parties’ agreement it does require
him to adopt procedures which would avoid unnecessary delay and expense.
527 Arbitration Act 1996, s.25(4).
528 The court’s power to remove an arbitrator is discussed in the preceding paras 7—111 et seq.
529 See para.7—-097 for this procedure.
 412 The Role of the Court

fails.°° The question of fees has already been mentioned in connection with
removal! and resignation.**” The reconstituted tribunal then decides the extent
to which the previous proceedings should stand.***

7-138 Provision in arbitration rules. If the arbitration is being conducted

under one of the various sets of arbitration rules it is likely that those rules will
themselves set out a procedure for removal of the arbitrator in certain circum-
stances, and for the appointment of a replacement. For example they may provide
that the same procedure or mechanism by which the arbitrator so removed was
appointed is to be adopted for the appointment of his replacement.*** Whether
this procedure or mechanism is to apply in the case of removal by the court (which
jurisdiction cannot be excluded by agreement),’** is a matter of construction of the
rules in question.**°

7-139 Effect of vacancy not being filled. If an arbitrator is removed but he is

not replaced the remaining arbitrators, if any, will proceed with the reference. If
there are no remaining arbitrators, the reference will cease.**”

7-140 Replacement by the court. Where an arbitrator or an umpire resigns or

dies or is removed by the court, or where his authority is revoked by the parties
or by the court,** the court has power to fill the vacancy in the absence of
agreement by appointing a replacement.**?

7-141 The arbitration agreement ceasing to have effect. Under the

Arbitration Act 1996 the court may fill a vacancy in the arbitral tribunal, but it is
the parties who must agree to terminate their arbitration agreement.*#° The court
has no power to terminate an otherwise valid arbitration.

°° Section 27(3) ofthe Arbitration Act 1996,

3lSee para./—131.
MAIS eelpatarj—133,
3 Section 27(4) of the Arbitration Act 1996.
**4 See for example ICC Rules, Art.12.4; LCIA Rules, Art.11; and UNCITRAL Rules, Art.12(2) which
af deal with replacement following the challenge procedures set out in the respective rules.
*** Section 24 of the Arbitration Act 1996 is mandatory in accordance with s.4(1) and Sch.1 to
the
Arbitration Act 1996,
= The LCIA Rules in particular would seem to cover removal by the court.
°°? The possibility of the parties agreeing not to fill a vacancy is canvassed by s.27(1)(a) of the
Arbitration Act 1996: “whether the vacancy is to be filled”,
*** The court’s power to revoke is ancillary to its power to appoint under s.18 of the Arbitration
Act
1996. See para.7—136.
°*” Section 27(3) of the Arbitration Act 1996 provides that s.18 will apply in relation to
the filling of
a vacancy as in relation to an original appointment: see paras 7-130 and 7-137.
>4° See the terms of s.23(4) of the Arbitration Act 1996.
 Determining Disputes 413

Appeal. Permission of the “court! is required for any appeal from a decision 7-142
of the court under ss.24 and 25 of the Act.*# It had been thought that court meant
the court which made the order and that in the absence of such leave the Court
of Appeal could not consider the matter. There are now at least two categories of
case where the Court of Appeal may give permission to appeal even though the
judge at first instance has not given permission. These cases are discussed further
at para./—201 which deals with wording to the same effect under s.44(7).

7. DETERMINING DISPUTES ABOUT THE TRIBUNAL’S

JURISDICTION DURING THE ARBITRATION

Introduction. The jurisdiction of the arbitral tribunal is discussed in Ch.2.5% 7-143

The courses of action open to a party who disputes the tribunal’s jurisdiction are
set out in Ch.5.°** These include:

@ objecting in the arbitral proceedings that the tribunal lacks substantive

jurisdiction under s.31 of the Arbitration Act 1996 and requesting a ruling by
the tribunal under s.30 of the Act that it has no such jurisdiction;

® commencing an action in court and opposing a stay (under s.9 or the court’s
inherent jurisdiction) of that action;

® refusing to participate in the arbitration (and presumably resisting enforce-

ment of an unfavourable award);

® opposing an application made to court for the appointment of an arbi-

545.
trator»;

@ applying to the court for a declaration or injunction or other relief under s.72
of the’ Act”;
® applying to the court for a determination of the tribunal’s jurisdiction under
s.32 of the Act either with the written consent of all the parties or with the
consent of the tribunal**’;

® applying to the court to challenge the tribunal’s jurisdiction under s.67 when
an award is made, whether or not it deals expressly with jurisdiction;

© applying to the court here or abroad for an anti-arbitral injunction,*** and

*41 Section 105(1) of the Arbitration Act 1996, defining court as the court of first instance.
> Arbitration Act 1996, ss.24(6) and 25(5).
543 See paras 2-072 et seq.
4 See paras 5-063 ef seq.
545 See s,18(2) of the Arbitration Act 1996 and paras 7-095—7-096.
46 See paras 7—146 et seq.
+47 An application can no longer be made at common law for a declaration that the tribunal lacks
jurisdiction: ABB Lummus v Keppel [1997] 2 Lloyd’s Rep. 24 at 30.
48 See paras 7-058 et seq.
 414 The Role ofthe Court

© opposing enforcement of any award whenever it is made, for example, under

s.66(3) of the Act.>*”

Not all of these courses of action are mutually exclusive.

7-144 Relevance for tribunal determination. The Arbitration Act 1996

states a clear preference for the tribunal to determine its own jurisdiction and for
any challenge to be made to the court only after an award has been made on the
subject.°? This preference has been recognised on numerous occasions by the
courts. The Court of Appeal in Fiona Trust and Others v Yuri Privalov & Others
said that the presumption under the Arbitration Act 1996 is that the tribunal
should be left to determine its own jurisdiction first if at all possible: “‘... it is
contemplated by the Act that it will, in general, be right for the arbitrators to be
the first tribunal to consider whether they have jurisdiction to determine the
dispute”.°*! In Weissfisch v Julius and Others, the Court of Appeal rejected an
application for an interim injunction to restrain an arbitrator from holding a
hearing to consider his own jurisdiction: ‘“There is nothing untoward in Mr Julius
considering a question of his own jurisdiction now that this has been put in
99 552
issue.”’.

7-145 Courses of action. The list of options open to the potential challenger to a
tribunal’s jurisdiction is relatively long. However, the scheme of the Act, combined
with recent judicial pronouncements, epitomised by Fiona Trust/Premium Nafta
Products’** is that an application to a tribunal to determine its own jurisdiction is
intended to be the usual step to take. Following one of the other courses may be
problematic, the application for an anti-arbitral injunction being the most prob-
lematic of all.

7-146 Power of the court under s.72. On its face, s.72 empowers the court to
determine a challenge to the jurisdiction of the arbitral tribunal by a person
alleged to be a party to arbitral proceedings, provided that the person concerned
has not taken part in the arbitration proceedings.*** On the application of such a

549
See, for example, Allied Vision Ltd v VPS Film Entertainment GmbH [1991] 1 Lloyd’s Rep. 392
where the defendant resisted enforcement under s.26 of the Arbitration Act 1950 which preceded
s.66 of the Arbitration Act 1996.
°° See ss.30 and 32 of the Arbitration Act 1996 which are more in line with the UNCITRAL Model
Law than with English law prior to the 1996 Act. See dicta of Tomlinson J. in Zaporozkye Production
Aluminium Plan Openshareholders Society v Ashly Ltd (2002] EWHC 1410.
°°! Fiona Trust and Others v Yuri Privalov & Others [2007] EWCA 20 at [34]. This approach was
fully
endorsed by the House of Lords, Premium Nafia Products Ltd & Others © Fil Shipping Co Lid
&
Others [2007] UKHL 40.
°°? [2006] EWCA 218 at [32].
°°. [2007] EWCA 20. Affirmed Premium Nafia Products Ltd v Fili Shipping Co Ltd & Others
[2007]
UKHL 40.
°° Section 72 (1) of the Arbitration Act 1996. The right that such a person has to challenge an award
under s.72 is referred to in paras 8-053 and 8-055.
 Determining Disputes 415

person, the court may by declaration, injunction or other appropriate relief

determine whether there is a valid arbitration agreement, whether the arbitral
tribunal is properly constituted or what matters have been submitted to arbitration
in accordance with the arbitration agreement.>*>
Where the court has to determine the tribunal’s jurisdiction under this section,
it will construe the scope agreement to arbitrate by reference to the governing law
of the agreement to arbitrate. Considerations derived from the substantive law of
the matrix agreement are not relevant to determining the issue of construc-
tions

Exercise of power. Although there is nothing on the face of s.72 to indicate 7-147
any intended limitation upon the application of the court’s power to grant relief
under the section, the policy of the Act, namely that questions of jurisdiction
should normally be decided by the arbitral tribunal,°*’ requires that s.72 should
play only a residual role in resolving jurisdictional disputes. The Court of Appeal
in Fiona Trust v Yuri Privalov has remarked that “the courts should, in the light
of section 1(1) of the Act, be very cautious about agreeing that its process [under
s.72] should be so utilised.”°°* Where the party who denies the existence of a valid
arbitration agreement has started competing English proceedings the issue of the
stay of those proceedings (under s.9 or the inherent jurisdiction)**? should be
decided first. A s.72 application does not “trump” a stay application but ‘‘s.72
might well be applicable if the party denying the existence of an arbitration
agreement had not started English proceedings and did not wish to do so.’”°°°

Grounds for application. Subject to these limitations, an alleged party 7-148

may bring a s.72 application on a number of grounds. It would cover a party who
alleges that he is not a party to an agreement containing what is clearly an
arbitration clause. It would also extend to a party who, whilst accepting that he is
a party to an agreement to arbitrate, alleges that he is not a proper party to the
proceedings, for example because the facts in dispute do not fail within the
agreement to arbitrate. It would furthermore extend to a party who accepts that
he is a party to an agreement to arbitrate but disputes for example the manner in
which the tribunal has been constituted.*°

°° Section 72(1) of the Arbitration Act 1996.

556 Subject to the possible application of the principle in Ralli Bros v Compania Naviera SA [1920] 2
KB 287. See Tamil Nadu Electricity Board v ST-CMS Electric Co Private Ltd [2007] EWHC 1713,
where the arbitration agreement was governed by English law and the matrix agreement was
governed by Indian law. The court construed the agreement to arbitrate without relevance to alleged
Indian mandatory laws. Per Cooke J. at [35].
57 See para.7—144.
558 Fiona Trust v Yuri Privalov and Others [2007] EWCA 20 at [34]. Affirmed Premium Nafta Products
Lid & Others v Fili Shipping Co Ltd & Others [2007| UKHL 40.
559 See paras 7-010 et seq.
560 Figna Trust v Yuri Privalov and Others [2007] EWCA 20 at [36]; affirmed Premium Nafta Products
Lid & Others v Fili Shipping Co Ltd © Others [2007] UKHL 40. Tamil Nadu Electricity Board v
ST-CMS Electric Co Private Ltd (2007) EWHC 1713.
561 Lam Debenture Trust Corp Plc v Elektrim [2005] 2 Lloyd’s Rep. 755 at [18].
 416 The Role of the Court

Although s.72 is primarily intended to deal with the position at the interlocu-
tory stages of an arbitration, where no award has yet been rendered, it can also be
used to challenge an award once rendered.°*” It is probable however that the relief
available under s.72(1) is narrower than that contemplated by s.72(2)(a) taken with
s.67. Otherwise, if all the relief available under s.67 could be obtained by an alleged
party by the ‘‘back door” under s.72(1), such an alleged party would have no
reason ever to proceed under s.67. If an application is made under s.70(1) the
effect of which is to challenge an award, such as by seeking a declaration that there
is no valid agreement to arbitrate then the suggestion has been made that such an
application should be subject to the same time-limit as a challenge under s.70(3),
namely 28 days after the date of the award or the result of the outcome of any
process of arbitral review.°®

7149 Section 72 available where option to litigate. In Law Debenture

Trust Corp Ple v Elektrim,°** a party to an agreement to arbitrate who also had an
option to refer the dispute to the courts, could bring an application under s.72 as
he was only an alleged party to the arbitration proceedings. It did not matter that,
on a plain analysis, the respondent could show that there was an arbitration
agreement to which the applicant was party. The Court of Appeal has subse-
quently sought to confine the application of this decision to clauses conferring an
option to litigate,°° noting that the court in Law Debenture did not need to
consider the separability of the arbitration clause but only had to decide if the
litigation option had been rightly exercised by the party seeking to litigate.°°°

7-150 Relevance of seat. Section 72 applies where the seat of arbitration is

England.°°’ However, the court will consider applications under this section where
no seat has been expressly fixed but where it appears to the court that the seat is
England by virtue of the operation of s.3 of the Act or if no seat has been fixed but
there is an appropriate connection with England and Wales.°°” In particular, if an
arbitral award which is alleged to be the product of a fraud appears to assert that
the seat of the fraudulently procured arbitration is England, then the court will
treat that as the designation of a seat by the tribunal under s.3(c) of the Act, even
where the tribunal’s authority is at issue.°°* If the seat of the arbitration is clearly
°* Bernuth Lines Ltd v High Seas Shipping Ltd [2006] 1 All E.R. (Comm) 359, per Christopher Clarke
J. at [57]-[58].
°° Arab National Bank v El-Abdali [2005] 1 Lloyd’s Rep. 541, where s.72 was used to set aside an award
which had been the produce of a fraud. See the discussion of the relationship between ss.67 and 72
at [57|-[58] of Christopher Clarke J.’s judgment.
© 12005] 2 Lioyd’s Rep. 755.
565 See para.2-018.
°° Law Debenture Trust Corp Ple v Elektrim [2005] 2 Lloyd’s Rep. 755 at [12]-{21]. See the comments
of the Court of Appeal on this decision in Fiona Trust v Yuri Privalov and Others [2007] EWCA 20,
and Axa Re v Ace Global Markets Ltd [2006] EWHC 216 where the applicant argued on a s.72
application that the arbitration clause had not been incorporated into the parties’ agreement.
°°7 Section 2(1) of the Arbitration Act 1996.
67a Section 2(3) of the Arbitration Act 1996.
°°8 Arab National Bank v El-Abdali [2005] 1 Lloyd’s Rep. 541 where s.72 was used to set aside an award
which had been the product of a fraud.
 Determining Disputes 417

not England, then the claimant who takes no part in the foreign arbitration may
seek an injunction restraining the foreign arbitration, although this will only be
granted in the most exceptional cases.°°?

‘Takes no part’. As to what constitutes taking no part for the purposes of 7-151
s.72(1), great caution needs to be exercised by a putative applicant. Corresponding
with the arbitral institution for the purpose of trying to have the arbitration
dismissed and indicating a conditional appointment of an arbitrator, subject to a
clear reservation, did not constitute taking part for the purposes of s.72(1).°”° The
words “who takes no part in the proceedings” do not extend to taking no part in
the proceedings at any stage, whether before or after a s.72 challenge.°’! An
unsuccessful applicant under s.72 will not therefore be debarred by the court from
subsequent participation in the arbitration, which will be a matter for the tribunal.
Therefore, it is possible that an applicant could try and defeat the arbitration
under s.72 and, if he fails, engage in the proceedings for the purpose of arguing
the merits of the case. It is likely however that an unsuccessful applicant cannot
have “‘two bites of the cherry”: he cannot make an unsuccessful application under
s.72 and then seek to have the same jurisdiction issues decided again under ss.30
eng2n2
A further question arises as to whether a person who takes no part in the
arbitration also enjoys the rights conferred on a “‘party to arbitral proceedings”
under ss.67, 68 and 69 or is limited to only those rights specifically conferred upon
him under s.72. A strict linguistic analysis would suggest that a non-party does not
enjoy all of the rights to challenge an award conferred upon a party and that the
Act has drawn a distinction between a party and a non-party or an alleged party
for good reason. However, if this proposition is the right then a non-party would
not be able to bring an appeal on a point of law under s.69 because this section is
not incorporated by s.70(2).°”°

Need to act properly. A prospective applicant under s.72 should act 7-152
promptly. Declarations and injunctions are equitable remedies and will not be
granted if there has been undue delay. It has also been suggested that where an
application is made in respect of an award which has already been rendered, the
28-day time limit which applies to an application under s.67 by virtue of s.70(3)
should apply.*”*

Overlap of powers. As noted, there is potential overlap between the court’s 7-153
powers under ss.9, 18 and 72. A party commencing an arbitration cannot have
56 See para.7—062.
570 Lam Debenture Trust Corp Ple v Elektrim, per Mann J. at [18].
571 Hackwood Lid v Areen Design Services Ltd (2006) Const. L.J. 68.
572 Hackwood Ltd v Areen Design Services Ltd, per Field J. at [42].
573 This point is discussed but not decided in Bernuth Lines Ltd v High Seas Shipping Lid (The “Eastern
Navigator”) [2006] 1 Lloyd’s Rep. 537, at [51].
574 Arab National Bank v El-Abdali [2005] 1 Lloyd’s Rep. 541 at [58].
 418 The Role of the Court

recourse to s.72 and if faced with a recalcitrant respondent reluctant to join in

formation of the tribunal may have to apply for appointment of the arbitrator
under s.18 (or make an equivalent application to the relevant appointing author-
ity). Because there is an issue as to the extent to which the court will examine the
existence of an agreement to arbitrate upon a s.18 application,’” the respondent
in that situation may chose to make a cross-application under s.72(1) for a
declaration that he is not party to the agreement to arbitrate.°’° The recalcitrant
respondent may also chose to commence court proceedings, in which case the
party commencing arbitration can seek a stay under s.9. As the Court of Appeal
in Fiona Trust has made clear, in this situation the s.9 application should be heard
before any s.72 application.*”” Another possible scenario is that when arbitration
and court proceedings are started in competition with each other, the party who
wishes to arbitrate may apply for an anti-suit injunction to restrain the court
proceedings, whilst the party who wishes to litigate may apply under s.72 for a
declaration that there is no valid agreement to arbitrate. In such a situation, the
court is likely to hear both applications together.°”

7154 Power of the court under section 32. In certain limited circumstances
it is possible to apply to the court under s.32 of the Arbitration Act 1996 to
determine any question as to the substantive jurisdiction” of the tribunal°*° even
if no ruling has yet been made by the tribunal on the subject.°*!>**? The section
is mandatory.°** Notice of an application must be given to the other parties to the
arbitral proceedings*** unless they all agree in writing to the application. Notice
to the tribunal is not required but it is desirable.*** Precisely because of the
restrictions on bringing a s.32 application, namely the need for consent of the
parties or the tribunal, it is a relatively rarely used tool. Indeed, the scheme of the
Act 1s to allow the arbitrators to decide their jurisdiction first and if the parties are
dissatisfied with the decision they can challenge it under s.67.

°7> See paras 7-095 and 7-096.

°7°'This course was adopted in Sinochem v Fortune Oil Ltd [2000] 1 Lloyd’s Rep. 682.
°”” Fiona Trust and Others v Yuri Privalov & Others [2007] EWCA 20. Affirmed Premium Nafta
Products Lid © Others v Fil Shipping Co Ltd & Others [2007| UKHL 40.
*”8 As happened in Welex AG v Rosa Maritime Ltd (The “Epsilon Rosa”) (No.2) [2003] 2 Lloyd’s Rep.
509. See in particular Tuckey L.J. at [37].
*” Por a definition of “substantive jurisdiction” see s.82(1) of the Arbitration Act 1996. See also paras
2-072 et seq. for matters within the tribunals jurisdiction.
**° For the procedure for the application see paras 8-178 ef seqg., but this application has special
provisions in CPR Arbitration PD 19 which will be mentioned in the following paras 7-156 e1
seq.
8h? Vale Do Rio v Shanghai Bao Steel {2000] 2 Lloyd’s Rep. 1. Where the tribunal has made a ruling
on jurisdiction, that ruling can be challenged by applying to the court under s.67 of the Arbitration
Act 1996, see paras 8-054 et seq.
°3 Section 4(1) and Sch.1 to the Arbitration Act 1996.
8+ Section 32(1) of the Arbitration Act 1996.
**° Section 32(1) of the Arbitration Act 1996 requires notice “to the other parties” but if the applicant
or the other parties do not want the tribunal to proceed with the arbitration until the question of
jurisdiction is determined by the court notice of the application should be given to the tribunal.
 Determining Disputes 419

Inherent jurisdiction of the court? Section 32 is arguably shadowed by 7-155

the court’s inherent jurisdiction to determine a tribunal’s jurisdiction at any time.
The effect of the policy of the 1996 Act, together with the express effect of s.1(c)
is that the court should not, save perhaps in exceptional cases, determine the
tribunal’s jurisdiction under the court’s inherent jurisdiction.>*°

Written agreement of all parties to the arbitral proceedings.

If all parties agree in writing, an application to the court under this section can be
made by any party to the arbitration proceedings.**’ In this event it does not
matter whether the tribunal agrees to the application or not, or that it has not been
invited to make a ruling on the matter.
Before the tribunal is appointed permission of all other parties to the dispute is
required for the purposes of an application under s.32 of the Act, and the court
“should not customarily be troubled with disputes as to the validity of the
reference to arbitration’’.°** However, unlike applications made with the permis-
sion of the tribunal, where further conditions need to be satisfied before the court
will consider the matter,**’ when the parties consent to an application being made
there is no statutory basis at least on which the court can refuse to consider the
matter.°’” However, the court has expressed the view that it is not very satisfactory
for an application to be made under s.32 in respect of a partial objection to
jurisdiction only, where the arbitration was in any event going to proceed in
respect of the greater part of the dispute. In such case, the partial objection should
be reserved, to be dealt with by the arbitrators in the first instance and possibly by
the court on appeal under s.67 if needs be. 59]

Permission of the arbitral tribunal. If the applicant cannot secure the 7-157
agreement of all the parties to the arbitral proceedings he may still apply to the
court under s.32 if the tribunal agrees,°’? but in that event he must state in his
application the grounds on which he claims that the matter should be decided by
the court®’> rather than by the arbitral tribunal (e.g., the tribunal says that it
586TT Mackley v Gossport Marina [2002] B.L.R 367 where the court declined to exercise its inherent
jurisdiction to determine the tribunal’s jurisdiction in the absence of the s.32 criteria having been
met.
587 Section 32(2) of the Arbitration Act 1996. The subsection specifies that the agreement must be “in
writing”. In Elektrim v Vivendi Universal (2007) EWHC 11, at [123] the court had not actually seen
any written agreement but was prepared to assume that one existed or would be prepared having
retrospective effect. The application need not be made by all the parties to the arbitration agreement
as long as they all agree in writing to the application.
588 IT Mackley’s v Gosport Morris Ltd [2002] EWHL 1315.
589 Section 32(2)(b) of the Arbitration Act 1996.
59 Esso Exploration & Production Co UK Lid v Electricity Supply Board [2004] 1 All E.R. (Comm) 926,
where the court considered without question an application made by one party with the consent of
the other.
591 Peterson Farms v CSM Farming & Another [2004] 1 Lloyd’s Rep. 614 at [24].
592 When there is more than one arbitrator and the parties have not agreed otherwise a majority
decision of the tribunal may suffice—see ss.20(3) and 22(2) of the Arbitration Act 1996—but the
fact that one arbitrator disagrees with the application will be a factor to be considered by the courts
in deciding whether to grant the application.
593 Section 32(3) of the Arbitration Act 1996.
 420 The Role of the Court

cannot decide the question of jurisdiction). He must also satisfy the court on the
following conditions although if the tribunal has given its permission it is unlikely
that the courts will scrutinise these pre-conditions very hard?”*:

@ that the application was made without delay;

@ that a determination by the court of the question of jurisdiction is likely to

produce a substantial saving in costs; and

@ that there is a good reason why the matter should be decided by the court at
this stage of the proceedings and not by the tribunal.°”°

Each of these requirements must be met. The tribunal cannot apparently ask the
court to determine its jurisdiction for it of its own motion. The circumstances in
which the tribunal would encourage or consent to an application under s.32(b) of
the Act are extremely limited. Exceptions might conceivably relate to a standard
form agreement where the tribunal felt that the point was likely to arise repeatedly
in other situations, but even then it is hard to envisage this would be enough to
displace the presumption that the tribunal should determine its own jurisdic-
tion.

7-158 No delay. The requirement that the application is made without delay is
separate from the defence that may be raised by another party to the arbitral
proceedings that the applicant has lost his right to object although in practice the
two may overlap.°”°

f= Wy) Substantial saving of costs. The onus of satisfying the court on this
condition also rests on the applicant. The use of the words ‘“‘is likely to” in s.32>°7
suggests that this requirement is not onerous, although the threshold is higher
than “‘might produce substantial savings in costs’ which appeared in another
context in the former legislation.°’* There must be some evidence however that
the saving of costs could be “‘substantial”’. This may, for example, include evidence
that the court’s determination would avoid the need to challenge a decision of the
tribunal on the matter if an award were made although such reasoning may be too
speculative to meet the “substantial savings” threshold.°”?

7-160 Court decision is justified. Not only must the applicant specify grounds
why the court should decide the matter but he must also satisfy the court that

** See for example the brief approach taken to the satisfaction of the conditions in Film Finance Inc
v The Royal Bank ofScotland [2007| EWHC 195 at [3].
»” Section 32(2)(b) of the Arbitration Act 1996. In Belgravia Property v SR Ltd [2001] B.L.R. 424,
the court agreed that the matter was appropriate for decision by the court (at 434).
**° Section 32(1) of the Arbitration Act 1996: see paras 7-162 et seq.
°°7 See s.32(2)(b)(i) of the Arbitration Act 1996.
8 See s,2(2)(a) of the Arbitration Act 1979, which has been replaced by s.45 of the Arbitration Act
1996.
**” An identical provision appears in s.45(2)(b)(i) of the Arbitration Act 1996: see para.7—172.
 Determining Disputes 42]

there is a good reason for making an order in the course of the reference. In the
absence of the agreement in writing of all other parties to the arbitration proceed-
ings, it is necessary but not sufficient that the tribunal consents to the application.
In deciding whether or not to consider the application the court will take account
of the witness statements filed by the parties setting out any evidence relied on in
support of “their contention that the court should, or should not, consider the
application”.°°' The court will usually decide the matter without a hearing.”
Section 32 is intended to deal only with exceptional cases.°?
The application to court is for a declaration as to the arbitrator’s jurisdiction
which may be specified in terms of the proper construction of the arbitration
agreement.
If the arbitrator has issued an award which contains a ruling on his jurisdiction,
a party seeking to challenge his decision should apply to the court not under s.32
but under s.67.°°*

Effect of application on the arbitral proceedings. Unless the 7-161

parties agree otherwise, the tribunal may continue the arbitral proceedings and
even make an award while an application to the court under s.32 is pending.°”
This is more likely to happen when the parties agree to apply jointly to the court
than if the tribunal consents to the application to the court. In the first case the
parties should notify the tribunal in writing of the proposed application and
request it to suspend the arbitral proceedings if that is what is wanted. If the
tribunal does not agree to suspend the parties should include in their application
to the court a request for an injunction.°”°

Loss of right to object. Apart from the need to satisfy the court that the 7-162
application was made without delay®”’ a party who wishes to take advantage of s.32
should apply to the court,°’* and give notice to the other parties, as soon as he
becomes aware of any issue as to the substantive jurisdiction of the tribunal. He
may lose his right to object if he delays.°°’ The Arbitration Act 1996 provides that

600 This is apparent from the terms of s.32(2)(b)(iii) and 32(3) of the Arbitration Act 1996.
601 PL) 62, para.9.2 requires the written evidence or witness statements to set out such evidence.
OA PIDIG2a paras:
603 See DAC report, para.147 which states that this section is “‘not intended to detract from the basic
rule as set out in [section] 30”. (i.e. the competence of the tribunal to rule on its own jurisdic-
tion).
604 See paras 8-054 et seq.
65 Section 32(4) of the Arbitration Act 1996.
6°6 Section 32(4) of the Arbitration Act 1996 is subject to the qualification “unless otherwise agreed by
the parties” which leaves open the possibility of applying for an injunction if the tribunal ignores
the parties’ agreement.
67 Section 32(2)(b)(ii) of the Arbitration Act 1996: see para.7—158.
608 There may be a challenge procedure in the arbitration agreement itself or in any rules incorporated
into that agreement (e.g. ICC Rules of Arbitration, Art.11) but the applicant may apply to the court
before exhausting that procedure although the intervention of the court would have to be justi-
fied.
6° Section 32(1) of the Arbitration Act 1996 which refers to s.73 of the Arbitration Act 1996; see
similar provisions referred to in paras 8-062 and 8—065.
 422 The Role of the Court

the applicant may not raise an objection®'” before the court if he continued to take
part in the arbitral proceedings without objecting “forthwith or within such time
as is allowed by the arbitration agreement®'! unless he shows that, at the time he
took part in the proceedings, he did not know and could not with reasonable
diligence have discovered the grounds for the objection”’.>) 612

7-163 Appeal to Court of Appeal. There are two possible appeals contemplated
by s.32 of the Act. The first concerns the court’s decision whether the conditions
specified in subs.(2) have been met.°'? The second possible appeal concerns the
decision of the court on the question of the jurisdiction of the tribunal, which is
treated as a judgment of the court for the purpose of an appeal.°'* In both cases
leave of the court making the decision is apparently required.
The court referred to in ss.32(5) and (6) is the court of first instance which
decided the matter®'’; so it used to be the case that if permission of that court is
not obtained there can be no appeal. However, there are now at least two categories
of cases where the Court of Appeal will grant permission to appeal even though
the judge at first instance has refused permission. These are considered at
para.7—201 which deals with wording to the same effect under s.44(7).

8. DETERMINATION OF QUESTIONS OF LAW DURING THE

ARBITRATION

7-164 Introduction. Normally the tribunal will decide all issues of fact and law that
arise in the course of the reference. In a particular case however the tribunal and
one or more of the parties may request the court to determine a question of law,
although applications under s.45 are extremely rare. It may be appropriate to
consider applying where it is apparent that the case will turn on the issue of law
in question and that, whichever way it is decided by the tribunal, one or other of
the parties will then seek to appeal against the award.°'® Given the need to seek
leave of the court for any appeal against an award, it may be more convenient for
all concerned to have the point determined by the court at the outset.°'” In these

°!0 The objection here means any objection on which the application for removal is based. There may,
of course, be several objections (see the use of the words “that objection” in s.73(1) of the
Arbitration Act 1996).
°"' The arbitration agreement itselforrules incorporated into it may contain a time limit within which
any challenge to jurisdiction must be made.
°\ Arbitration Act 1996, s.73(1).
*13 Section 32(5) of the Arbitration Act 1996—each one of the conditions have been described above
in paras 7-158 ef seq.
®M Section 32(6) of the Arbitration Act 1996 first sentence.
° See definition of court in s.105(1) of the Arbitration Act 1996.
*' Another example mentioned in the DAC report at para.218 is where an important point of law is
of general interest and is potentially the subject of a large number of arbitrations. The subject of
appeal against an award is dealt with in paras 8-119 e seq.
617
There 1s though a requirement that the question of law, substantially affect the rights of one
or more
of the parties: see para.7—-168 below.
 Determination of Questions of Law 423

circumstances it may save time and costs to have the point authoritatively deter-
mined by the court at an early stage and for the award to reflect that decision.
With the agreement of the other parties or the permission of the tribunal an
application can be made to the court for the determination of a question of law
during the arbitration. This procedure is not available however if neither the
tribunal nor the other parties will agree to the determination of the question by the
court. In that event it will fall to be determined by the tribunal in the course of
the arbitration.°!?
©!?

Power of the court. In the circumstances mentioned in the following 7-165

paragraphs, s.45 of the Arbitration Act 1996 empowers the court to decide any
question of law arising in the course of an arbitration. The application may only
be made by a party to the arbitral proceedings. It cannot be made by the tribunal
alone. The other parties to the arbitral proceeding must be notified of any
application under this section.°”°

Excluding court’s power. The parties may agree not to apply to the court 7-166
under s.45 and this is called an ‘exclusion agreement”.®*!
6
Alternatively, they may
agree to dispense with reasons for any arbitral award, which will be construed as
an exclusion agreement, and so prevent a determination by the court under that
622
section.

Question of law. The court’s power under s.45(1) of the Arbitration Act 1996 7-167
is limited, as it is on an appeal,°*’ to determining questions of law. The particular
questions of law must be identified in the application.°’* The section cannot be
used in relation to questions of fact, although the distinction is not always easy to
make.
It is not practicable to produce an exhaustive list of the types of questions of law
which may be referred for determination by the court, but the following warrant
specific mention.

618-619 TFdissatisfied with the tribunal’s award on a question of law an appeal may lie under s.69 of the
Arbitration Act 1996 but permission of the court is required, unless all parties agree: see
para.8—132.
620 Section 45(1) of the Arbitration Act 1996. The procedure for a general arbitration application is
contained in paras 8-178 et seq., but special provisions apply to this application as is mentioned in
para.7—174.
621 The right to exclude the court’s power is apparent from the opening words of s.45(1) of the
Arbitration Act 1996. This right to exclude will also apply to a “domestic arbitration agreement”
as s.87(1)(b) of the Arbitration Act 1996 has not been brought into force. It seems that exclusion
agreements can still be made in general terms: See Sumukan Ltd v Commonwealth Secretariat [2006]
1 All E.R. (Comm) 621. Leave to appeal the decision was refused by the Court of Appeal, Sumukan
Lid v Commonmealth Secretariat [2007] EWCA 243; [2007] Bus. L.R. 1075.
©22 Arbitration Act 1996, s.45(1), second sentence.
623 Section 69(1) of the Arbitration Act 1996. See para.8—119.
624 Section 45(3) of the Arbitration Act 1996.
 424 The Role of the Court

® Questions of construction: although often said to involve mixed questions of

fact and law, questions of construction of an instrument may be considered
by the court under s.45.°%°

® Questions of procedure: Questions may arise in the course of the reference

whether the tribunal has the power or duty to make (or to refuse to make) a
particular procedural order or direction. Determining these questions
depends on matters such as the proper construction of the Arbitration Act
1996 and of the arbitration agreement. These are questions of law which are
capable of being referred to the court for a preliminary determination under
s.45, provided the other requirements of the section are fulfilled®*® and there
is no exclusion agreement.°”’ It is however necessary to distinguish questions
concerning the exercise by the tribunal of a discretion to make (or refuse to
make) an order or direction. These are not generally questions of law and
cannot properly be the subject of an application under this section.°”*

® Question relating to appointment of arbitrators: these cannot be considered

under s.45. They should be made under the appropriate appointment related
section of the Arbitration Act, usually s.18.°7?

® Questions of jurisdiction: If the question which arises is whether the arbi-

trator has jurisdiction to determine a dispute, it will not be appropriate for
this question to be resolved by an application to the court under s.45 because
it is provided for expressly by ss.32 and 67 of the Act.°°

® Questions of admissibility of evidence: Such questions in an arbitration

cannot be the subject of an application under s.45, because they are to be
decided by the tribunal. Section 34(2)(f) of the Act provides that the tribunal
shall decide rules as to admissibility of evidence, subject to the right of the
parties to agree some other rules.°*' An application under s.68 based in part
on the tribunal’s failure to grant disclosure was considered and rejected in
ABB AG v Hochtief Airport GmbH.°?

7-168 Substantially affect the rights of one or more of the parties.

Even if all parties or the tribunal agree to it, an application under s.45 of the Act

°° Beegas Nominees Ltd v Decco Ltd [2003] 3 E.G.L.R 25.

°6 See paras 7-171 et seq. for these requirements.
°7 See, e.g. Panchaud Freres SA v Etablissements General Grain Co [1969] 2 Lloyd’s Rep. 109; Kursell
v Timber Operators and Contractors Ltd (1923) 2 K.B. 202.
°° Exmar BV v National Iranian Tanker Co (The ‘Trade Fortitude’) [1992] 1 Lloyd’s Rep. 169; Vasso
(owners) v Vasso (cargo owners) (The ‘Vasso”) [1983] 3 All E.R. 211. Although decided before the
Arbitration Act 1996, these decisions are relevant to this point.
© City & General (Holborn) Ltd, above, at paras 22-25.
°° For a discussion of the ways in which jurisdiction may be challenged see paras 7-054 ef seq. fora
challenge under s.32, and paras 8-054 ef seq. for a challenge under s.67 of the Arbitration Act
1996.
°5! See para.1—026 for a short discussion on the treatment of rules of evidence.
°%2 12006] 1 All E.R. (Comm) 529.
 Determination of Questions of Law 425

will not be granted unless the court is satisfied that the question of law sub-
stantially affects the rights of one or more of the parties.°*’ This requirement
reflects one of the conditions for leave to appeal against an award ofthe tribunal.°**
It may be satisfied if the sum involved is material®° or if the determination of the
question of law will resolve issues of title as to property which is the subject of the
dispute.

Agreement of all parties. An application can be made under s.45 if all the 7-169
parties to the arbitral proceedings agree®*° and the conditions mentioned in
the preceding paragraphs°*” apply. The agreement can be given at the time when
the dispute arises, or can be given in advance in the agreement to arbitrate.°** In
that event agreement of the tribunal is not required.

Permission of the arbitral tribunal. If the applicant cannot procure 7-170

the agreement of all the parties to the arbitral proceedings to agree he may still
apply to the court under s.45 if the tribunal agrees,°*’ but in that event he must
state in his application the grounds on which he claims that the matter should be
decided by the court’ rather than by the arbitral tribunal.°*! He must also satisfy
the court on the following conditions:

® that the application was made without delay; and

@ that a determination by the court of the question of jurisdiction is likely to

produce a substantial saving in costs.

642
Each of these conditions must be met.

33 Section 45(1) ofthe Arbitration Act 1996. This requirement differs from the requirement contained
in s.1(3)(b) of the Arbitration Act 1979, namely, that the question of law was one for which leave
to appeal would be likely to be given. This change was deliberate because the previous requirement
gave rise to great difficulty, both in theory and in practice, see DAC report, para.219.
34 See s.69(3)(a) of the Arbitration Act 1996 and para.8—132.
635 Decisions of the court based on s.1(4) of the Arbitration Act 1979, which has been re-enacted by
s.69(3)(a) of the Arbitration Act 1996 and which contained a similar requirement are relevant to the
meaning of this requirement: see for example, The ‘‘Evimerie” [1992] 1 Lloyd’s Rep. 55.
636 Although s.45(2)(a) of the Arbitration Act 1996 does not specify that the agreement of the other
parties need be in writing (contrast s.32(2)(a) of the Act) an agreement is only effective for the
purposes of Pt 1 of the Act “if in writing’’, see s.5(1) of the Arbitration Act 1996.
637 See paras 7-167 and 7-168.
638 As was the case in Taylor Woodrow Holdings Ltd & Another v Barnes & Elhott Lid [2006] W.L.
2248800.
639 When there is more than one arbitrator and the parties have not agreed otherwise a majority
decision of the tribunal may suffice, see ss.20(3) and 22(2) of the Arbitration Act 1996. But the fact
that one arbitrator disagrees with the application will be a factor to be considered by the court in
deciding whether to grant the application.
4 Section 45(3) of the Arbitration Act 1996.
1 This may occur if the parties have agreed that the tribunal shall not have the power to decide the
point of law.
62 Section 45(2)(b) of the Arbitration Act 1996. See ABB Lummus v Keppel [1999] 2 Lloyd’s Rep. 24
for a case where similar conditions were not met in respect of an application under s.32 of the
Arbitration Act 1996.
 426 The Role of the Court

7-171 No delay. If the application is to succeed it should be made as soon as the

question of law can reasonably be identified and the permission of the tribunal
obtained. Whether there has been delay in making the application is a matter of
fact which will be determined by the court. The applicant must justify any
apparent delay.°*

7172 Substantial saving of costs. The court must also be satisfied that the
determination of the question is likely to produce substantial savings in costs to
the parties.“ The use of the words “‘is likely to” suggests that the hurdle in
relation to saving costs is not very high. There must be some evidence however
that the saving of costs could be substantial. It will usually be satisfied ifadecision
one way will determine the result altogether, or at least shorten the hearing. It does
not matter that the decision may in fact go the other way.°** Nevertheless, s.45 is
aimed at the exceptional case.°*°

7-173 Residual discretion. Even where the threshold conditions are satisfied the
court retains a discretion as to whether or not to decide the question of law.°*’ In
practice, the court is unlikely to refuse to decide the question if the conditions are
satisfied.

7-174 Procedure. Where an application claim is made under s.45 of the Act with the
agreement in writing of all the other parties to the arbitration proceedings, there
is no need for evidence in support of their contention that the court should
consider their claim,°** although the parties should give reasons for their applica-
tion. Where, however, the written consent of all the parties is not available but the
tribunal has given its permission to the application claim under s.45, the written
evidence or witness statements filed by the parties to the application must set out
any evidence relied on in support of “their contention that the court should, or
should not, consider the application’’.°*? Unless the court otherwise directs, it will
decide without a hearing whether or not to consider the claim.®° If the court

© Section 45(2)(b)(ii) of the Arbitration Act 1996.

© Section 45(2)(b)(i) of the Arbitration Act 1996—compare with the similar provision in s.32(2)(b)(i)
in the Arbitration Act 1996 dealt with at para.7—159.
45 Vasso (owners) v Vasso (cargo owners) (The ‘‘Vasso’’) [1983] 3 All E.R. 211. That case demonstrated
the difficulty of complying with the terms of s.2(1) of the Arbitration Act 1979, which has been
replaced by s.45 of the Arbitration Act 1996 in relation to a question whether the arbitrator had
power to order the inspection of property. The difficulty was however ignored to the extent that the
court proceeded to hear the application anyway.
646
See para.7-178 and quotation from Court of Appeal in Babanaft International SA v Avant Petroleum
[1982] 1 W.L.R. 871 at 882, a case about the court’s non-interventionist policy.
” Taylor Woodrow Holdings Lid ©& Another v Barnes & Elliott Lid [2006] W.L. 2248800 at
[55|-[62].
° This conclusion can be implied from PD 62 para.9.2. For procedure generally in respect of
application claims, see paras 8-178 et seq.
ePID 62, pata.9.2.
CUP WI62. pataly.o.
 Determination of Questions of Law 427

decides to consider the claim, it will usually be determined in public,°*! although

the court may order the claim to be heard in private.°*?

Effect of application on the arbitral proceedings. Unless the 175

parties agree otherwise, the tribunal may continue the arbitral proceedings and
even make an award while an application to the court under s.45 is pending.°™
This is more likely to happen when the parties agree to apply jointly to the court
than if the tribunal consents to the application to the court. In the first case the
parties should notify the tribunal in writing of the proposed application and ask
for the arbitral proceedings to be suspended if that is what is wanted. If the
tribunal does not agree to suspend the parties should include in their application
to the court a request for an injunction.°**

Effect of the court’s order. The court’s decision on a question of law made 7-176
under s.45 is treated as a judgment of the court for the purposes of an appeal,°*°
and can in principle be the subject of an appeal,®® but an appeal will be allowed
only in limited circumstances.®’ The court’s decision whether or not to grant the
application and decide the question of law is final unless permission to appeal is
given.°°®

Costs of the application. It is important that the court should be asked to ti Wiel
deal with the costs of the application to the court as it is doubtful whether the
tribunal would have jurisdiction to do so.®°’ The court will apply the same
principles as it usually does when considering who should bear the costs of an
application.°°°

Appeal to Court of Appeal. There are two possible appeals contemplated 7-178
by s.45 of the Act. The first concerns the court’s decision whether the conditions
specified in subs.(2) have been met.°°! The second concerns the decision of the
court on the question of law arising in the course of the arbitration, which is

65! CPR. 1.62.10(3)(a).

652 CPR r.62.10(1). The hearing may be in private where the evidence to be considered for or against
the claim is particularly confidential.
653 Section 45(4) of the Arbitration Act 1996.
654 Section 45(4) of the Act is subject to the qualification ‘‘unless otherwise agreed by the parties”
which leaves open the possibility of applying for an injunction if the tribunal ignores the parties’
agreement.
655 Section 45(6) of the Arbitration Act 1996,
656 See s.45(6) of the Arbitration Act 1996 and the Supreme Courts Act 1981, s.16.
°57 The limited circumstances are described in para.7—178.
658 This is the effect of s.45(6) of the Act. See para.7-178.
659 Costs of an application to court under s.45 of the Act are arguably not recoverable costs of the
arbitration under ss.63 and 64 of the Arbitration Act 1996: see paras 7—209 et seq.
660 See CPR Pt 44.3 and commentary in the White Book.
61 Section 45(5) of the Arbitration Act 1996. Each one of the conditions have been described above
in paras 7-170 et seq.
 428 The Role of the Court

treated as a judgment of the court for the purpose of an appeal.°°” In both cases
leave of the court making the decision is apparently required. The court referred
to in s.45(5) and (6) is the court of first instance which decided the matter®**; so
it used to be the case that if permission of that court is not obtained there can be
no appeal. However, there are now at least two categories of cases where the Court
of Appeal will grant permission to appeal even though the judge at first instance
has refused permission. These are considered at para.7—201 which deals with
wording to the same effect under s.44(7).

9. Court’s Powers To ISSUE INJUNCTIONS AND MAKE OTHER

ORDERS IN RELATION TO ARBITRAL PROCEEDINGS

7-179 Introduction. In addition to extending time limits°* appointing and removing

arbitrators 5 and determining disputes as to jurisdiction®® and questions of
law,°°’ the court has power to make a wide variety of orders in relation to arbitral
proceedings. They include enforcing orders made by the arbitral tribunal,°°*
securing the attendance of witnesses at the arbitration hearing®*’ and making any
orders relating to evidence or property, including the granting of injunctions,
mentioned in s.44 of the Arbitration Act 1996. That section, which has attracted
significant judicial attention culminating in the Court of Appeal’s decision in
Cetelem v Roust,°”” has been construed as being in broad terms and contemplates
that an order may in an urgent case be made in advance of the commencement of
an arbitration.°’! The following paragraphs will deal first with the powers under
s.44°” and will include in this discussion consideration of the existence of the
court’s inherent jurisdiction to grant injunctions.°’* It will then proceed to
describe the court’s powers under s.42°’* and appeals from orders under both
these sections.°’* Various other powers of the court in relation to ongoing arbitra-
tions are then dealt with,°’? concluding with a discussion of certain matters in
relation to which the court no longer has power to make orders, namely disclosure

662 Section 45(6) of the Arbitration Act 1996, first sentence.

663 See definition of court in s.105(1) of the Arbitration Act 1996.
664 See paras 7-067 et seq. above.
665 See paras 7-095 ev seq. above.
666
See paras 7-143 et seq. above.
°67 See paras 7-164 ef seq. above.
8 Arbitration Act 1996, s.42.
669 Arbitration Act 1996, s.43.
© Cetelem SA v Roust Holdings Ltd [2005| 1 W.L.R. 3555.
°" Tsakos Shipping v Onzon Tanker Co (The “Centaurus Mar”) [1998] C.L.C. 1.003. For urgent
cases—see para./—188.
°72 See paras 7—180—7-197 below.
673 See para.7—196.
°74 See paras 7-198—7-200.
675 See para.7—201.
676 See paras 7-202—7-206.
 Courts Powers to Issue Injunctions 429

of documents, answers to requests for information and security for costs in

arbitrations.°’”

Power of the court to order interim injunctions and other 7-180

orders during an arbitration. Section 44 of the Arbitration Act 1996
confers wide powers on the court in relation to the preservation of assets and
evidence for an arbitration, including the important power to grant interim
injunctions.°’> The court’s powers under this section are the same as those
exercisable in legal proceedings, save for urgent cases where it is now established
that they are limited by the requirements of s.44(3).°”? The provisions of s.44 must
be read in conjunction with the relevant rules of the court governing the exercise
of those powers in relation to legal proceedings.°*°

Application to court or tribunal? When considering whether to seek an 7-181

injunction or other interim order, the first decision to take is whether to apply for
the relevant relief from the court or arbitral tribunal. The factors which should be
taken into account when reaching this decision are dealt with in Ch.5.°*!

Should the court act? When an application is made to it, the court needs 7-182
to consider the breadth of the its powers under s.44. There has been considerable
recent debate over the extent of the powers available. For present purposes at least,
the debate has been resolved by the Court of Appeal in Cetelem v Roust Holdings.°*?
On the one hand, it is argued that the purpose of the 1996 Act is to make clear
provision for the consensual resolution of disputes and to permit only a very
limited role for the court. The Act made it clear that the court should not be given
any powers that might be used to interfere with or usurp the arbitral process. Such
an approach suggests that injunctive relief should be the preserve of the arbitral
tribunal and should only be ordered by the court as a last resort, unless the court
is acting at the request of the tribunal. On the other hand, it is argued that effective
arbitrations are often secured by prompt, early injunctive relief of the sort that
only the court can effectively give. This argument was largely accepted by the
Court of Appeal who noted:

“The whole purpose of giving the court power to make such orders is to assist the arbitral
tribunal in cases of urgency or before there is an arbitration on foot. Otherwise it is all
to easy for a party who is bent on a policy of non-cooperation to frustrate the arbitral
process. Of course, in any case where the court is called upon to exercise the power, it

°77 These matters are dealt with at paras 7-207—7-208.

678 The matters to which these powers relate are set out in s.44(2) of the Arbitration Act 1996 and are
addressed in paras 7-191 et seq. below.
679 Section 44(1) of the Arbitration Act 1996, “legal proceedings” means civil proceedings in the High
Court or a County Court, s.82(1) of the Act.
68° Principally the CPR.
81 See paras 5-075 et seq.
682 Cetelem SA v Roust Holdings Ltd [2005] 1 W.L.R. 3555.
 430 The Role of the Court

must take great care not to usurp the arbitral process and to ensure, by exacting
appropriate undertakings from the claimant, that the substantive questions are reserved
for the arbitrator or arbitrators.”°**

7-183 Foreign or no seat. The powers contained in s.44 are available even if the seat
of the arbitration is abroad or no seat has been designated or determined, but in
that case the court may refuse to exercise the powers if it considers that it would
be “inappropriate to do so”’.°** Where the seat of arbitration is abroad the court
will need a very good reason to exercise its jurisdiction under s.44: “As Mr Brindle
QC submitted on behalf of the Respondents, “The natural court for the granting
of interim injunctive relief must be the court of the country of the seat of
arbitration, especially where the curial law of the arbitration is that of the same
country, (agree.>

7-184 The Brussels regime. Where the respondent is domiciled in another

country that has acceded to the Brussels jurisdictional regime,°*° the question
arises whether the arbitration exception embraces all types of provisional meas-
ures.°*” As noted,°** the approach of the English court, as enunciated by the Court
of Appeal in Through Transport Mutual Insurance (Eurasia) Ltd v New India
Assurance Co Ltd, is to assess whether the “‘principal focus” of the proceedings 1s
arbitration.°* This was said to include proceedings involving ancillary assistance
in the context of arbitration proceedings.°’° If the proceedings have arbitration as
their principal focus then the arbitration exception is triggered. However, the EC]
has found that “provisional measures are not in principle ancillary to arbitration
proceedings but are ordered in parallel to such proceedings and are intended as
measures of support. They concern not arbitration as such but the protection of
a wide variety of rights’’.°’' The ECJ found that a court-ordered provisional
measure requiring the interim payment of sums claimed (in support of an

83 Cetelem SA v Roust Holdings Ltd (2005] 1 W.L.R. 3555, per Clarke L.J. at [71].
°8# Section 2(3) of the Arbitration Act 1996. The words quoted indicate that the court has a complete
discretion whether or not to exercise its powers in such a case. See Commerce Insurance Co v Lloyd’s
Underwriters |2002] 1 W.L.R. 132.
685 Econet Wireless Lid v Vee Networks Ltd and Others (2006) EWHC 1568 at [19]. See also Weissfisch
v Julius and Others [2006] EWCA 218, not a decision under s.44, but relevant because the Court of
Appeal refused to injunct a Swiss arbitration. See further the substantive decision in 4 v B [2006]
EWHC 2006.
686
See paras 7-012 et seq. above.
°87 See also the discussion of the arbitration exception in the context of anti-suit injunctions at
para.7—013.
688 At para.7—013.
689 [2005] 1 Lloyd’s Rep. 67 at [44], [47]{49]. An anti-suit injunction was not granted in this case
where a third party was pursuing a statutory right under Finnish law in the Finnish courts against
an insurer. See a discussion of the effect of the Jurner v Grovit line of cases and Through Transport
by Sir Anthony Clarke M.R. speaking extra-judicially, ‘““The differing approach to commercial
litigation in the European Court of Justice and the courts of England and Wales”, Institute of
Advanced Legal Studies, London, February 23, 2006, available at mmm.dca.gov.uk/judicial/speeches/
2006.
6° See also A v.B [2006] EWHC 2006 and the cases cited at para.94 of Colman J.’s judgment.
1 Van Uden Maritime BV v KG Deco-Line (Case C-391/95) [1999] 2 W.L.R. 1181 at 1256, EC].
 Courts Powers to Issue Injunctions 431

underlying arbitration) was accordingly caught by the Brussels Convention on

Jurisdiction. Accordingly, the court said that interim relief can only be granted by
an English court where the measure is truly provisional and where there is a real
connecting link between the subject matter of the measure sought and the
territorial jurisdiction of the court. There is some conflict between the ECJ’s
construction of the arbitration exception and that taken by the English courts in
Through Transport and subsequent cases. The position for now is that whilst it is
clear that the Brussels jurisdictional regime does not embrace most arbitration-
related proceedings there is a possibility that certain provisional measures will
need to satisfy the Van Uden criteria where the respondent is domiciled in a
member state. The scope of the arbitration exception is likely to be clarified by the
ECJ in deciding the reference in West Tankers.°??

Post award injunctions. Once an award has been issued and enforcement 7-185
proceedings are on foot, it appears that the court’s jurisdiction to grant injunctions
is derived from its usual powers to issue injunctions to assist enforcement proceed-
ings and not from s.44.°7?

Excluding court’s powers. Section 44 of the Act is not mandatory,” so an 7-186

application cannot be made to the court if the parties have excluded the powers
under this section.°”°

Non-urgent cases. The section draws a distinction between urgent and non- 7-187
urgent cases. Unless the case is one of urgency, the court can only act on the
application of a party to the arbitral proceedings who has obtained the permission
of the tribunal or the agreement in writing of all the other parties.°’® This
requirement is consistent with the policy of the Arbitration Act 1996 to leave the

692 West Tankers Inc v RAS Riunione Adriatica di Sicurta SpA and others [2007] UKHL 4.
3 Celtic Resources Holdings Ltd v Arduina Holding BV [2006] EWHC 2553 at [37]. When considering
whether to continue a freezing order in aid of the execution of a judgment (which had been
converted from an award), the court noted that it had an independent jurisdiction to consider
whether a freezing order should be granted on usual principles. It appears that the arbitrator was
functus officio in that case.
6°4 This is apparent from the opening words of s.44(1) of the Arbitration Act 1996 and from its absence
from Sch.1 of the Arbitration Act 1996.
6°5 The terms of the exclusion clause must be clear—see /n Re Q’s Estate [1999] 1 Lloyd’s Rep. 931.
The arbitration clause or rules incorporated into it may contain an exclusion agreement in terms
wide enough to prevent an application for some or all of the orders that can be made under s.44 of
the Arbitration Act 1996. In Sankofa v Football Association [2007] EWHC 78, Simon J. at [16]-[18}],
expressed the preliminary view that the arbitration rules of the Football Association probably
excluded the right to seek a court injunction under s.44. See also Vertex Data Science v Powergen
Retail [2006] 2 Lloyd’s Rep. 591, where the court found that an agreement to exclude the tribunal’s
power to grant injunctions under s.48(5) of the Arbitration Act 1996 did not necessarily mean that
the parties also intended to exclude the court’s powers under s.44.
66 Section 44(4) of the Arbitration Act 1996. The evidence supporting the application should so state.
For an example of one such application made with the permission of the tribunal, see Assimina
Maritime Ltd v Pakistan National Shipping Corp (The “Tasman Spirit”) {2005} I Lloyd’s Rep 525,
at [9].
 432 The Role of the Court

conduct of the arbitration to the tribunal. Notice of any application must be given
to the parties and the tribunal.°”? When these pre-conditions are met, the full
range of the court’s powers in subs.(2) are available. It is the application of the
section to urgent cases which has aroused the greater controversy, probably
because non-urgent applications, which effectively require consent, are relatively
rare.

7-188 Urgent cases. Where there is urgency the courts may make an order in the
absence of both the tribunal’s permission and written consent of the other parties
where it is necessary to do so “for the purposes of preserving evidence or
assets’’.°’® The question considered in Cetelem®’? was whether the broad powers
contained in subss.(1) and (2) were limited by subs.(3), so that in urgent cases
those powers could only be exercised where the court thinks it is “necessary for
the purpose of preserving evidence or assets’’.’”°” The Court of Appeal agreed with
this submission, overturning a previous line of authority which suggested that s.44
should not be construed in such a limited way, the power in subs.3 being merely
permissive and not limiting the broad operation of the court’s powers in subss.(1)
and (2).’°'-7 However, although at first sight the effect of the decision is to
narrow the application of s.44 in urgent cases, in fact the practical difference
between the position before and after Cetelem’™ is not great. Although the court
confirmed that the order must be necessary for the purpose of preserving evidence
or assets, assets are not to be limited to tangible assets but include choses in action,
including contractual rights. In other words, a party may be able to justify an
urgent application under s.44 to protect his contractual rights, even if no other
more tangible assets can be identified.’°** In that event the court may grant the
application of a party (or even a proposed party) to the arbitral proceedings.

7-189 Tribunal unable to act effectively. Whether or not the case is urgent,
the applicant will have to satisfy the court that the tribunal is “‘unable for the time
being to act effectively”’.’”°* This emphasises the fact that relief under s.44 will only
be available from the court to the extent that it cannot be obtained from the
arbitral process chosen by the parties. For this requirement to be satisfied, the
tribunal must be unable to act effectively, either because it has not yet been
constituted, which is the paradigm case,’’’ or because, as the DAC report put it
“in the nature of things it cannot act quickly or effectively enough”’.’”°° Therefore,

7 Section 44(4) of the Arbitration Act 1996. The subsection requires an agreement “in writing”.
8 Section 44(3) of the Arbitration Act 1996.
© Cetelem SA v Roust Holdings Ltd \2005) 1 W.L.R. 3555.
7 Section 44(3) of the Arbitration Act 1996.
71-7 Cetelem SA v Roust Holdings Ltd {2005| 1 W.L.R. 3555 overruled Hiscox Underwriting v Dickson
Manchester & Co Lid |2004] 2 Lioyd’s Rep 438.
Cetelem SA v Roust Holdings Lid [2005| 1 W.L.R. 3555.
a Applied Starlight Shipping © Others v Tai Ping Insurance & Others |2007]| EWHC 1893 at [21].
Contractual rights include the right to have disputes referred to arbitration.
7 Section 44(5) of the Arbitration Act 1996.
7° This was the position in Cetelem.
MO WAG reports parazuos
 Courts Powers to Issue Injunctions 433

an application might be made to the court because a three member tribunal, even
though already constituted, was not available to hear an urgent application quickly
enough or because of the need to obtain an order binding upon third parties. If a
fully constituted tribunal was available to act, the fact that their award might be
ineffective in a particular jurisdiction would not, it has been suggested, make them
unable to act effectively for the purposes of the sub-section.’°°* However, it has
been suggested that the effect on a third party is a strong reason not to grant
injunctive relief in support of an arbitration.’”’ In the paradigm case, where an
application is made to the court for an injunction, the applicant must undertake to
refer the dispute to arbitration in due course.’”* It is also possible that the court
may impose ancillary directions, such as a requirement that a party in whose
favour an injunction has been granted undertakes to progress the arbitration
proceedings as fast as possible.’°”

Practice in urgent cases. An application for an interim remedy under s.44 7-190
of the Act must be made in an arbitration claim form.’!” In an urgent case,
however, the application may be made without prior notice to the respondent in
which case the witness statement in support must contain reasons in addition to
dealing with the matters that are required for all arbitration applications.’'' The
additional reasons include:

@ why the application is made without notice;

@ why, if it is the case, it was not “practicable” to obtain permission of the
tribunal or the agreement of all the other parties to the arbitral proceedings;
and
@ why the witness believes that the tribunal’'* has no power or is unable for the
time being to act effectively.’'*

If the court does make an urgent order, it may direct that its order shall cease
to have effect (in whole or in part) when the tribunal is properly constituted and

7068 Starlight Shipping and Others v Tai Ping Insurance and Others [2007] EWHC 1893 at [27].
707 Sankofa v Football Association [2007] EWHC 78, Simon J. at [22].
708 per Staughton LJ. in The Channel Tunnel Group Ltd and France Manche SA v Balfour Beatty
Construction Ltd and Others [1992] 2 Lloyd’s Rep. 7 at 13, CA. Delay in commencing proceedings
may lead to the discharge of the injunction: see Siporex Trade SA v Comdel Commodities Lid [1986]
2 Lloyd’s Rep. 428 at 435-436; Weissfisch v Julius and Others [2006] EWCA 218 at [9], and Econet
Wireless Ltd v Vee Networks Ltd and Others {2006| EWHC 1568 at [14].
709 Engineered Medical Systems v Bregas AB [2003] EWHC 3287, per Toulson J. at [25].
GOP DiGZpararoils
711 For the matters required for all arbitration applications see CPR 1.62.4 and paras 8-087 ef seq.
Considerations which govern the grant of without notice injunctions generally will be applicable. In
Cetelem SA v Roust Holdings Ltd 2005] 1 W.L.R. 3555, the initial injunction was granted on a
without notice basis: [2005] 1 W.L.R. 3555 at [10].
712 Section 44(5) of the Arbitration Act 1996 refers not only to the arbitral tribunal but also to “any
arbitral of other institution or person vested by the parties with power to make the required
order”.
713 There is a requirement in the Arbitration Act 1996 for the “condition in s.44(5) being satisfied”.
That condition has been addressed at para.7—189 above.
 434 The Role of the Court

is in a position to make its own order.’'* This was described as a ‘“‘novel provision”
in the DAC report, said to follow from the philosophy that if a given power could
possibly be exercised by the tribunal then it should be. In effect, therefore, the
court hands over to the by now-effective tribunal the task of deciding whether or
not the order should cease to have effect.’'° In Econet Wireless Ltd. v Vee Networks,
the court went further and appeared to suggest that certain orders should be
granted by the court only on terms that they inure until the matter can be
considered by the tribunal, “‘the powers of the court under section 44 are plainly
intended to cover over the crack between the moment of the application and the
time when the arbitral tribunal can be formed and take its own decisions about
preserving the status quo”’.’'® Despite these comments, it is not clear if or when
a court must make an order only on terms that the matter be considered by the
tribunal as soon as it is able. The words, “If the court so orders” in s.44(6) suggest
the court has discretion as to the longevity of its orders. In certain matters, such
as those which relate to third parties, the tribunal has no coercive jurisdiction over
those third parties in any event and presumably at least in such cases the court may
make an order that can last for the duration of the proceedings.’'’

7-191 Taking the evidence of witnesses for use at the arbitration

hearing. In some situations it may not be possible to secure the attendance of
a witness at the arbitration, because the conditions of s.43 of the Act cannot be
met. For example, although the witness is in the United Kingdom the arbitration
is being conducted abroad and the tribunal has no power to compel the witness to
attend the hearing there. If all other requirements are met, an application may be
made under s.44 (2)(a) of the Act.’'® In that event, the court may on the
application of a party to the arbitration order that the witness attend for examina-
tion before an officer of the court appointed for that purpose,’'? although it may
decline to make an order where it would be inappropriate to do so.’”° Although the
court also has power to order evidence to be taken by witness statement or on
affidavit,’*! the more likely request is to take evidence in a way that would enable
the other party to cross-examine the witness because then greater weight can be
attributed to it by the tribunal.

714 Section 44(6) of the Arbitration Act 1996.

71> Section 44(6) of the Arbitration Act 1996. DAC report, para.216.
716 [2006] EWHC 1568 at [14].
77 But see Sankofa v Football Association [2007] EWHC 78, Simon J., at [22], suggesting that effect on
third parties is a reason not to grant an injunction under s.44 at all.
718 Section 44 applies even if the seat is outside England, Wales or Northern Ireland. See Arbitration
Act 1996, s.3(b).
7! An application by a party under s.44 of the Act should be distinguished from a request by a foreign
court under the Evidence (Proceedings in Other Jurisdictions) Act 1975 which enacted the 1970
Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Cases.
720
In Commerce Insurance Co v Lloyd’s Underwriters [2002] 1 W.L.R. 1323, the court declined to make
an order for the examination of witnesses for use in a New York arbitration because of the procedure
adopted under the curial law.
721
The court’s powers as to ordering the giving of evidence by witness statements or affidavit are set
out in CPR Pt 32. The powers of the High Court to order depositions to be taken are dealt with
in CPR Pt 34.8 and its powers to enforce the attendance of witnesses for examination in CPR Pt
34.10.
 Courts Powers to Issue Injunctions 435

The court also has power to order the issue to a foreign court of a commission
or a request for the examination of a witness who is abroad for the purpose of an
arbitration whose seat is in England, although this power is rarely invoked. The
power may be exercised pursuant to an application under s.44 (2)(a) of the Act.
The fact that a witness is abroad may result in his evidence being admitted
without his attending a hearing before the tribunal, although his absence and the
inability to test his evidence by questioning him on it may affect the weight that
will be attached to it. In substantial cases, overseas witnesses will usually travel to
attend the hearing and give evidence in person.

Preservation of evidence. This is the second matter on which the court 7-192
may make an order under s.44 of the Act if requested by a party to an arbitration
or proposed arbitration.’** The tribunal has a corresponding power,’** so the court
will only act where the tribunal is unable to act effectively.’** It can extend to all
types of evidence, whether physical or recorded in documentary, electronic,
magnetic or photographic form. However, the sub-section cannot ordinarily be
used to compel disclosure from a party to the arbitration as this is a matter for the
tribunal’? although in exceptional cases the court may order the production of
limited documents if it felt they might otherwise be lost or unavailable to the
tribunal. In a case involving a ship which had run aground in the port of Karachi,
an order was made requiring a third party, a marine survey organisation, to
produce the report which it had prepared for the port managers on the potential
deepening of the harbour.’*° The power cannot be used as a means of obtaining
ordinary disclosure of documents from a non-party. It is only where it can be
shown that a question arises in relation to a particular document of a non-party
that an order under this sub-section can be made. The documents of the non-
party must therefore be capable of specific description, much as with a witness
summons issued under s.43, which in practice overlaps with this sub-section.’?’

Orders relating to property. An application may also be made to the court 7-193
under s.44 for orders relating to property.’** The property concerned may either
be the subject matter of the proceedings (e.g. when a party is claiming recovery of
specific goods) or property as to which any question arises in the arbitral proceed-
ings, (e.g. whether work was done on a particular building for which a claim is
being made in the arbitration). In either case, the court can make a wide variety
of orders as identified in s.44(2)(c)(i) and (ii), including the taking of samples,
which are intended to have the effect of preventing the property being altered,

722 For urgent cases where the arbitration has not yet been commenced see s.44(3) and para.7—188.
723 For the tribunal’s power to preserve evidence, see para.5—083.
74 See s.44(5) of the Arbitration Act 1996. See para.7—189.
725 NB: Three Shipping Lid v Harebell Shipping Ltd [2005] 1 All E.R. (Comm) 200 at [14].
726 Assimina Maritime Ltd v Pakistan National Shipping Corp (The “Tasman Spirit”) {2005] 1 Lloyd’s
Rep 525.
727 Assimina Maritime Ltd v Pakistan National Shipping Corp (The “Tasman Spirit’) [2005] 1 Lloyd's
Rep 525.
422 See Gh Rabie sels
 436 The Role of the Court

destroyed or disposed of before the evidence of its existing state can be secured for
the purpose of the arbitration. For example, the physical evidence of a site at a
particular time may be useful to reveal structural defects that might otherwise not
be apparent.
Although it is more limited, the tribunal has a corresponding power to make
orders in respect of property’”’ so the court will only act where the tribunal is
unable to do so effectively. For example, s.44 empowers the court to authorise any
person to enter certain premises for ‘‘that purpose” (i.e. for the purpose of taking
samples, making observations or otherwise preserving evidence). This means that
the court may authorise the tribunal or another party to the proceedings or even
a third party (e.g. an expert appointed by the tribunal or another party) to enter
upon or into any land or building “‘in the possession or control” of any party to
the arbitration in order to take samples, make observations or conduct experiments
which may be necessary or expedient for the purpose of obtaining full information
or evidence. ‘To this extent the court’s power goes beyond that of the tribunal.
Thus, where the property in question is in the possession of a third party, it may
well be necessary to invoke the court’s jurisdiction to order its detention, preserva-
tion or inspection. Property in this regard can extend to documents held by third
parties. There is therefore some overlap between the powers in ss.42(2)(b) and
(c).7*° It is not clear whether property extends to intangible property, just as assets
in s.44(3) extends to intangible assets by virtue of the Court of Appeal’s decision
in Cetelem v Roust.’”*'

7-194 Orders for sale of goods. In addition to the detention, preservation or

inspection of property (including goods) s.44 empowers the court to make orders
for the sale of any goods which are the subject of the arbitral proceedings. If a sale
is ordered, the court can then direct how the proceeds of sale are to be applied.’**
In Cetelem v Roust, the Court of Appeal gave the specific example of an order for
the sale of a cargo of fish the value of which would otherwise be diminished or lost
by putrefaction.’*’ The powers under this sub-section are a specific example of the
court’s power to grant mandatory interim injunctions in certain limited cases.

7-195 Interim injunctions in support of arbitral proceedings. The

court has power under s.44 (2)(e)’** to grant interim injunctions in respect of
arbitration proceedings.” A broad range of interim injunctions are available

’” For the tribunal’s power to give directions in relation to property see para.5—081.
Assimina Maritime Ltd v Pakistan National Shipping Corp (The “Tasman Spirit”) [2005] I Lloyd’s
Rep 525, where an order was made under s.42(b) and (c) in relation to specific documents held by
a third party.
*" Cetelem SA v Roust Holdings Ltd (2005) 1 W.L.R. 3555. The point may have limited practical effect
given that inspection and detention of property must by definition in almost all cases be of tangible
property.
732
They may for example be paid into court pending the outcome of the arbitration.
733 [2005] 1 W.L.R. 3555 at [65].
This type of injunction should be distinguished from that which restrains arbitration proceedings,
see para.7—058.
** The court’s power to grant an interim injunction is specified in CPR Pt 25.1(1)(a).
 Courts Powers to Issue Injunctions 437

under s.44 of the Act. The power certainly extends to the granting of a freezing
injunction’*® with a view to preserving assets in appropriate cases.”*” The court
also has power to grant a freezing order guia timet but the court will be astute to
ensure that the order is used “properly and without abuse”’.”** However, the Court
of Appeal in Cetelem was not prepared to limit the power to grant interim
mandatory injunctions to freezing injunctions or search orders (formerly Mareva
and Anton Pillar injunctions), but accepted that a broader class of orders could fall
with s.44(2)(e) including, in certain cases, an order for delivery up of documents
required to satisfy a condition precedent in a share purchase transaction (the
injunction sought in Cefelem) and an order for the vendor to deliver to the seller
a share certificate in the case of imminent completion of a share purchase
transaction.’*’ The court will therefore on occasions extend the power to include
the grant of an interim mandatory injunction, although this power must be
exercised ‘‘very sparingly’’.”*° The power does not however extend to granting
final injunctions’*' 741 or to making a final determination of the rights of the parties,
even if it may incidentally involve the initial determination of an issue which the
parties have agreed to submit to arbitration. It seems likely that the court’s power
to grant anti-suit injunctions are more usually exercised under s.37 of the
Supreme Court Act 1981 but, it is suggested, may also fall to be exercised under
this sub-section.’*'*
The court has accepted that injunctions may be granted under s.44(2)(e) in the
following circumstances:

@ To restrain a law firm from appearing in arbitration proceedings where that

law firm had previously acted for the applicant and possessed confidential
information relevant to it.”*
@ To restrain ship owners on an interim basis from allowing two vessels to be
employed inconsistently with the terms of two time charters pending the
resolution of the arbitration. The Court of Appeal rejected an appeal on the

736 A freezing injuction (formerly referred to as a ‘‘“Mareva” injunction) is one which freezes assets of
the party against whom it is granted and will be ordered where there is evidence that those assets
would otherwise be “dissipated”, i.e. removed from the jurisdiction of the court. This type of
injunction is usually coupled with a requirement that the party against whom it is granted serves
an affidavit giving details of his assets. It may also in limited circumstances be granted in a form
which applies not just to assets within the jurisdiction of the English court but also to those held
abroad. See Dadourian Group Int Inc v Simms and Others [2006] EWCA 399 for authoritative
guidelines on when the court will enforce a worldwide freezing injunction. See generally CPR Pt
25 and PD 25.
737 See, for example, Aiglon Ltd and L’Aiglon SA v Gau Shan Co Ltd 1993] 1 Lloyd’s Rep. 164 and
Siporex Trade SA v Comdel Commodities Ltd [1986] 2 Lloyd’s Rep. 428.
738 In Re Q’s Estate [1999] 1 Lloyd’s Rep. 931 at 938. Such an order is made before the cause of action
arises.
739 Cetelem SA v Roust Holdings Lid [2005] 1 W.L.R. 3555 at [62]-[66].
740 A “mandatory injunction” is one which requires the party against whom it is granted to take some
positive step, as opposed to the usual form of injunction which requires the defendant to refrain
from doing something. Cetelem SA v Roust Holdings Lid [2005] 1 W.L.R. 3555 at [63]-[64].
741 Although such power may exist under the court’s inherent jurisdiction—see para.7—196 below.
7414 See para.7—018.
742 Gus Consulting GmbH v Leboeuf Lamb Greene & Macrae {2006} All E.R. (D.) 339. On the facts the
injunction was refused.
 438 The Role of the Court

basis that this was an impermissible form of mandatory injunction as it

effectively compelled performance by the owners of the time charters.’*’

@ To require on an interim basis for six months (not automatically for the whole
period of the arbitration) that one party continue to supply a particular
component part to the other.”**7”*

7-196 Injunction under the court’s inherent jurisdiction. Until the

decision in Cetelem SA v Roust Holdings Ltd’*° it was thought the court’s power to
grant an injunction in an exceptional case under the Supreme Court Act could be
exercised notwithstanding the more specific power contained in s.44.’*” Glidepath
Holding BV v Thompson’* considered the relationship between s.44 of the Arbi-
tration Act 1996 and the court’s inherent powers to grant an injunction or other
order under s.37 of the Supreme Court Act 1981. The court reached the view that
the court’s inherent powers are available in the context of arbitration and are
broader than those existing under s.44 of the Arbitration Act 1996: “the inherent
jurisdiction would not be so limited as that under the Arbitration Act’’.’””
However, this and earlier cases to the same effect need to be considered in the light
of the Court of Appeal’s comments in Cete/em which noted that there was a
“tension” between the wide powers conferred on the court by s.37 of the Supreme
Court Act and the much narrower powers conferred on the court by s.44.7°° A
definitive decision on this point is awaited although the House of Lords in West
Tankers supported the use of s.37 for the grant of anti-suit injunctions.’”*! In
Elektrim SA v Vivendi Universal SA and Others’*? the court also assumed that s.37
could be used to grant arbitral relief in the context of arbitration.’***

ie)
heI Appointing a receiver. The court is also empowered by s.44 (2)(e) of the
Act to order the appointment of a receiver for the purpose of or in relation to
arbitral proceedings.’*’ The receiver so appointed is under a duty to collect in the

™ Lauritzen Cool AB v Lady Navigation Inc {2005] 2 Lloyd’s Rep. 63.

774 Engineered Medical Systems v Bregas AB [2003] EWHC 3287.
746 12005] 1 W.L.R. 3555.
“7” These powers are contained in s.37 of the Supreme Court Act 1981. See also CPR Pt 25.1(1)(a).
7812005] 1 All E.R. (Comm) 434.
™® per Eady J. at [15]-[19]. There are a number of other recent cases where the court has accepted that
an injunction may be granted under s.37 of the Supreme Court Act in the context of an arbitration.
National Insurance & Guarantee Corp Ltd v M Young Legal Services [2005] 2 Lloyd’s Rep. 46. See
also the discussion of this case in Cetelem SA v Roust Holdings Ltd [2005] 1 W.L.R. 3555 at [42] and
[43].
™ Cetelem SA v Roust Holdings Lid |2005] 1 W.L.R. 3555, at [74], per Clarke L.J., “The resolution of
that tension must await another day”.
*! West Tankers Inc v RAS Riunione Adriatica di Sicurta SpA and Others {2007] UKHL 4 at [8] and see
para.7—012 above.
72 12007] 2 Lloyd’s Rep. 8.
2a An approach also supported in Starlight Shipping and Others v Tai Ping Insurance and Others {2007]
EWHC 1893.
3 The court’s powers in respect of the appointment of receivers are set out in RSC Ord.30 in Sch.1
to CPR (se 30).
 Courts Powers to Issue Injunctions 439

property over which he is appointed, thereby ensuring its protection and preserva-
tion pending the arbitration in accordance with the directions of the court.7*+

Enforcement of peremptory order’ of the tribunal. If a party 7-198

fails to comply with an order of the tribunal requiring him to do or stop doing
something,’*® an application may be made to the court under s.4277 of the
Arbitration Act 1996 to enforce that order.’** In most cases the tribunal’s own
powers to enforce its orders will suffice’*’ but occasionally an application to the
court to enforce a peremptory order of the tribunal may be necessary.’°°? This
section has been applied to enforce an order for payment made by an adjudicator
under the Housing Grants, Construction and Regeneration Act 1996, even though
the decision was referred to arbitration.’”°' The circumstances in which such an
application to the court can be made are described in the following paragraphs.

Excluding court’s powers and exhausting other rights. Section 7-199

42 is not mandatory’” so an application cannot be made to the court if the
arbitration agreement’® contains a provision to the effect that the court shall not
make an order under that section. Further, if the arbitration agreement contains
a procedure for what is to happen in the event of a failure to comply with an order
of the tribunal that procedure must first be exhausted before an application can be
made to the court.’°* Section 42 does not apply to foreign seated arbitrations, so
for example it cannot be used to enforce an interim order made by a foreign
tribunal against a party amenable to the jurisdiction of the English courts (unless
no seat has been determined the court feels there is a sufficient appropriate
connection for the purposes of s.2(4)(b)).

The applicant. Subject to what is stated in the preceding paragraph, an 7-200

application under s.42 can be made either by the tribunal or by a party to the

75+ See further Kerr on Receivers (17th edn), Ch.9.

755 The expression “peremptory order” is defined in the Arbitration Act 1996, s.82(2).
756 The tribunal may, for example, have ordered a party to produce evidence in his possession which
is relevant to the issues to be decided.
757 For construction contracts, a minor amendment has been made to s.42 by SI 1998/649.
7>8 For the procedure on an application see paras 8-178 et seq.
759 See s.41 of the Arbitration Act 1996 for powers of the tribunal in case of a party’s default.
700 The enforcement of the tribunal’s order to preserve property is an example.
761 Macob Civil Engineering v Morrison Construction [1999] C.L.C. 739. The court also decided in that
case that a standard form of arbitration clause would not by itself exclude the application as 1s did
not indicate that the parties were “otherwise agreed” for the purposes of the Arbitration Act 1996,
s.42(1).
762 This is apparent from the opening words ofs.42(1) of the Arbitration Act 1996 and from its absence
in Sch.1 to the Arbitration Act 1996.
763 The arbitration clause or rules incorporated into it may contain an exclusion agreement in terms
wide enough to prevent an application under s.42 of the Arbitration Act 1996.
76+ Section 42(3) of the Arbitration Act 1996.
 440 The Role of the Court

arbitral proceedings.’°° Whoever makes the application must satisfy the court that
the party concerned has failed to comply with an order within the time specified
in the tribunal’s order, or if no time is specified, within a reasonable time.’”°°
Usually the tribunal will leave one of the parties to apply to the court, but if the
tribunal does apply notice must be given to the parties.’°’ One or more of the
parties to the arbitration may apply for a court order under s.42 but unless the
arbitration agreement provides that the court’s powers under this section shall be
available’®* the applicant must obtain the permission of the tribunal’®’ and in any
event notify the other parties. The fact that he has permission should be men-
tioned in the application.’”°

7-201 Appeals. Permission of the court is required to appeal from a decision of the
court made under ss.42 and 44 of the Act.’’! It had been thought that reference
to “the court” under both sections was to the court which made the order’”* and
that in the absence of such an order from that court the Court of Appeal could not
consider the matter. The former position was stated as follows, ‘‘Parliament has
made it completely clear that in this respect the decision of the judge is to be final,
unless the judge himself considers that there are matters which are fit to be
considered by the Court of Appeal so as itself to grant leave”.’”°
However, two separate lines of decisions of the Court of Appeal have weakened
the proposition that the judicial decision taker at first instance is the only
competent body to grant leave to appeal from his own decision. Following Cetelem
v Roust,’’* which dealt with the provision in relation to appeals under s.44(7) of
the Act, the distinction is now to be drawn between appeals to orders which the
judge had jurisdiction to make, although it is alleged he erred in fact or in law in
making the order, and orders which he had no jurisdiction to make. The Court of
Appeal can give permission to appeal in respect of the latter type of orders, where
the judge at first instance has no jurisdiction to make the order in question, even
where the judge himself has refused leave to appeal. As the Court of Appeal noted
in Cetelem:

“So long as the judge could make the order in the sense that it was within the jurisdiction
specified in the relevant section, the buck stops with him. The order is made under the
section. It is only where the judge makes an order which is outwith his jurisdiction, so

7 Section 42(2) of the Arbitration Act 1996. For procedure on an application see paras 8-178 et
seq.
766 Section 42(4) of the Arbitration Act 1996,
767 Section 42(2)(a) of the Arbitration Act 1996.
78 Section 42(2)(c) of the Arbitration Act 1996.
’ Where there is more than one arbitrator and the parties have not agreed otherwise a majority
decision may suffice for this purpose, see ss.20(3) and 22(2) of the Arbitration Act 1996.
7” The procedure for the application is mentioned in paras 8-178 et seq.
77’ Sections 42(5) and 44(7) of the Arbitration Act 1996.
7” Because of the definition of court in s.105(1) of the Arbitration Act 1996.
73 Virdee v Virdi {2003] EWCA Civ 41,
™ Cetelem SA v Roust Holdings Lid [2005] 1 W.L.R. 3555.
 Courts Powers to Issue Injunctions 441

that he could not (as opposed to should not) make it, that s.44(7) and other similar
provisions do not prevent an appeal to this court.’’””°

Quite how easy this distinction is to operate in practice remains to be seen. In

Lesotho Highlands v Impreglio,’’® the House of Lords when considering a challenge
under s.68 of the Arbitration Act 1996 rejected an argument that an error as to the
currency of an award constituted an excess of powers. However, this matter was
argued strongly on both sides all the way up to the House of Lords and the
concepts are elusive. The field of administrative law is full of examples of the
difficulty in drawing a distinction between a simple error (within jurisdiction) and
acting outside of jurisdiction.’’”
In a closely related decision, the Court of Appeal has held in respect of an
appeal based on a preliminary point about whether a particular section (s.69)
applies at all (because for example there is a question whether a valid exclusion
agreement has been entered into) the Court of Appeal does have jurisdiction to
grant leave in respect of such questions.’’* The Court of Appeal canvassed but did
not decide the possibility that the opt out wording in s.44(1), “‘unless the parties
otherwise agree” may also be a preliminary point as to whether that section applies
at all.
The Court of Appeal also has a residual jurisdiction to set aside the judge’s
decision in the case of unfairness relating to the process of the judge’s decision.
The distinction is therefore to be drawn between appeals from the judge’s refusal
to give leave on the merits where, save for cases where there was no jurisdiction
for the underlying decision, there is no appeal and cases where, “‘the judge’s refusal
of leave to appeal was arbitrary or unfair: or was the product of a failure of intellectual
engagement with the arguments put before him; or amounted actually or metaphorically
a
to the absence of a decision on the issue’’.’”? In such “exceptionally rare cases”’*? the
Court of Appeal can of its own motion consider appeals even where leave of the
first instance judge has not been given. The Court of Appeal has also rejected the
argument that this residual discretion is contrary to Art.6 of the European
Convention of Human Rights.”*!

775 Cetelem SA v Roust Holdings Ltd [2005] 1 W.L.R. 3555, per Clarke L.J., at [25].
77° (2006 MeasE22 Ie
777 Pearlman v Keepers and Governors of Harrom School [1978] 3 W.L.R 736 at 743: “The distinction
between an error which entails absence of jurisdiction and an error made within jurisdiction 1s
fine... . it is rapidly being eroded”.
778 Sukuman Ltd v Commonwealth Secretariat [2007] EWCA 243; [2007] Bus. L.R. 1075 at
27)|{34}.
oe fee i era Insurance Ple and Others v Astra Zeneca Insurance Co Ltd [2006] EWCA 1340,
per Rix L,J. at [98], approving North Range Shipping Ltd v Seatrans Shipping Corp (2002] 1 W.L.R.
2397. Approved in Kazakhstan v Istil Group Inc, [2007] W.L. 1425725, para.11. See also ASM
Shipping Ltd of India v TIMI Ltd {2006] EWCA 1341, a decision under s.68(4), which is in the
same terms as s.69(8).
780 CGU International Insurance Ple and Others v Astra Zeneca Insurance Co Ltd |2006] EWCA 1340,
per Rix L.J. at [100].
781 Kazakhstan v Istil Group Inc, [2007] W.L. 1425725, following CGU International Insurance Plc and
Others v Astra Zeneca Insurance Co Ltd [2006] EWCA 1340.
 442 The Role ofthe Court

In all other cases, there is no right to appeal unless the judge at first instance
gives leave to appeal. In that instance, ‘“‘court”” means the court which made the
order.’*?

7-202 Securing the attendance of witnesses at the arbitration. Under

s.43 of the Act, the same procedures may be used to secure the attendance before
an arbitration tribunal of a witness as are available for court proceedings. Where
a witness who is within the United Kingdom is unwilling to attend the hearing of
an arbitration to give evidence on a voluntary basis, a party to arbitral proceedings
who wants to compel the attendance of the witness before the tribunal’*’ must
apply for a witness summons in accordance with CPR Pt 34.7**

7-203 Limitations on power to summon witness. The objective of a

witness summons is to require a witness to attend an arbitration hearing in
England’ for the purpose of giving evidence and/or for the purpose of produc-
ing to the tribunal certain documents. Section 43 of the Arbitration Act 1996 is
mandatory,’*° but a party can only issue a witness summons with the permission
of the tribunal or the agreement of all the other parties.’*’ Written evidence to that
effect will be required before the summons is issued and can be served.’** Further,
this procedure can only be used if the witness concerned is in the United
Kingdom and the arbitration hearing is being conducted in England.’*°
The requirement as to location of the hearing is only that “the arbitral
proceedings are being conducted in England and Wales or, as the case may be,
Northern Ireland.” Subject to the limitations contained in subs.43(3) of the
Act,’’° the powers contained in s.43 are available even if the seat of the arbitration
is abroad or no seat has been designated or determined, but in that case the court
may refuse to allow the powers to be exercised where the court considers that it
would be “inappropriate to do so”’.””' This raises the interesting possibility of a
tribunal in a foreign seated arbitration agreeing to hold a hearing in England for
the purpose of hearing a witness pursuant to a s.43 summons, thus triggering the

782 Cetelem SA v Roust Holdings Ltd {2005] 1 W.L.R. 3555 at [25]. Considered Kazakhstan v Istil Group
Inc, [2007] W.L. 1425725.
785"This is authorised by s.43 of the Arbitration Act 1996 which envisages use of “the same court
procedures as are available in relation to legal proceedings” to secure a witness’s attendance.
74 PT) 62 para.7.1. A witness summons is a document issued by the court requiring a witness to (a)
attend court to give evidence; or (b) produce documents to the court (CPR Pt 34, r.2).
785 Or Northern Ireland.
786 See s.4(1) of the Arbitration Act 1996 and Sch.1 of the Act.
787 Section 43(2) of the Arbitration Act 1996. Contrast with the former s.12(4) of the Arbitration Act
1950 where no such limitation applied. See also Art.27 of the Model law and DAC report
para.213.
VE PIDIGZ, pararinay
7 Section 43(3) of the Arbitration Act 1996 refers to the proceedings as being conducted in “England,
Wales, or as the case may be, Northern Ireland”’.
”° These limitations are that the witness is in the United Kingdom and the arbitration proceedings are
being conducted in England. For example, although the seat of arbitration is abroad, the parties and
the tribunal may agree to conduct the proceedings in London.
”! Section 2(3) of the Arbitration Act 1996. The words quoted give the courts a “wide discretion”.
 Courts Powers to Issue Injunctions 443

requirement of “conducting” the proceedings in England. The procedure and

scope of a witness summons in court proceedings influences the court’s approach
to the granting of orders under s.43, in that only very narrow categories of
documents can be sought from witnesses.’’? There is an overlap between the
powers under s.43 and those available under s.44(2)(b).’”

Limitation on production. In the case of a summons to produce docu- 7-204

ments, a witness cannot by virtue of s.43’’* be compelled to produce in the
arbitration ‘any document or other material evidence” which he could not be
compelled to produce in legal proceedings, i.e. if the matter were being heard in
court. In this way the procedure is equivalent in substance to the procedure for a
witness summons under the CPR. This provision is intended to protect the
witness’s rights in respect of evidence that is privileged from production.’
Moreover, the witness summons process cannot be used as a means of obtaining
disclosure of documents from a third party witness. Even though such a power is
available in respect of court proceedings, it is not one endorsed by s.43. Indeed as
the court’s former power under s.12(6)(b) of the Arbitration Act 1950 has now
been repealed, disclosure of any sort is primarily a matter for the tribunal. ’”° For
this reason, if a witness is ordered to produce documents those documents must
be identified as a tightly defined group, by reference to individual documents or
at the very least a compendious description. II

Practice. The application for a witness summons under s.43 of the Arbitration 7-205
Act 1996 may be made to the Admiralty and Commercial Registry of the High
Court, or “if the attendance of the witness is required within the district of a
district registry, at that registry at the option of the party”.””* A witness summons
will not be issued until the applicant files written evidence which shows that the
application is “made with the permission of the tribunal or the agreement of the
other parties”’.””? The summons will then be issued by the court office without the
need for a specific court order. Normally, the court will serve the witness*’? and

72 Tyik Aluminium Plant v Hydro Aluminium AS [2006] 1 Lloyd’s Rep. 155, per Moore-Bick L.J. at
[25].
73 See para.7-193; Assimina Maritime Lid v Pakistan National Shipping Corp (The ‘Tasman Spirit’’)
[2005] I Lloyd’s Rep. 525.
794 Section 43(4) of the Arbitration Act 1996. CPR Pt 34, 1.2(5).
795 For an account of what is “privileged” from production see commentary to CPR Pt 31 in White
Book, paras 31.3—5 et seq.
79 The leading case on s.43 is the decision of the Court of Appeal in Tajik Aluminium Plant v Hydro
Aluminium AS [2006] 1 Lloyd’s Rep. 155, applying principles enunciated in the earlier cases of
Assimina Maritime Ltd v Pakistan National Shipping Corp (The “Tasman Spirit’) [2005] 1 Lloyd's
Rep 525 at [16]; Tyneside Borough Council v Wickes Building Supplies Lid [2004] EWHC 2428; BNP
Paribas v Deloitte and Touche LLP {2004] 1 Lloyd’s Rep. 223. See also para.7—209 below.
77 Tajik Aluminium Plant v Hydro Aluminium AS [2006] 1 Lloyd’s Rep. 155 at [28]-{29].
798 PD 62 para.7.2. The general procedure for an arbitration application is described in paras 8-178 et
seq.
79 PT) 62 para.7.3.
800 CPR Pt 34, r.6(1). See commentary to this paragraph in White Book and note time for service in
CPR. Pt 34.5.
 444 The Role ofthe Court

“conduct money”’ must be tendered to the witness.*°' An application may be made

to the court to set aside or vary a witness summons*” but in the absence of such
an application failure to comply with a witness summons validly served is punish-
able as a contempt of court.*°

7-206 Security in respect of proceedings “tin rem”’. A party to an arbitra-

tion may also pursuant to s.11 of the Arbitration Act 1996 invoke the “in rem”
jurisdiction of the Admiralty Division of the High Court to arrest a vessel and to
obtain security for his claim plus interest and costs.*°* The defendant will be
entitled to apply for a stay of the proceedings pursuant to s.9 of the Act,*°° but
even if the stay is granted the court may order the property arrested to be retained
as security for the award in the arbitration or may order that the stay is conditional
on the provision of equivalent security.°°° The same law and practice will apply in
relation to property retained in pursuance of an order of the court made under s.11
of the Act as would apply if the property were held for the purposes of proceed-
ings in the court making the order.*°’ Further, s.11 applies even if the seat of the
arbitration is abroad or no seat has been designated or determined.*°**

7-207 Security for costs. The court no longer has power to order security for costs
in an arbitration. That power is expressly reserved to the arbitral tribunal.*°’ The
law was changed in the 1996 Act following the controversial decision of the House
of Lords in Coppee-Lavalin SA/NV v Ken-Ren Chemicals and Fertilizers Ltd (In
Liquidation) in which the majority held that the High Court had the power to
order a claimant to provide security for costs in respect of an arbitration being
conducted under the ICC Rules of Arbitration.*!? The court does have power,
however, to order an applicant to provide security for costs of any arbitration
application or appeal.*!' It may, but will not necessarily, make such an order where
the applicant is a liquidator of an insolvent company.*'” The court’s power will not

801 Supreme Court Act 1981, s.36(4). CPR Pt 34.6(2).

8°2 CPR Pt 34.3(4). For the grounds on which the court will set aside a subpoena see the commentary
on this paragraph in the White Book. It may also be set aside ifissued without the proper permission
of the tribunal or agreement of all the other parties to the arbitration. See also Sunderland Steamship
P and I Association v Gatoil International Inc (The “Lorenzo Halcoussi”’) [1988] 1 Lloyd’s Rep.
180.
*°3 See RSC Ord.52 re-enacted in Sch.1, CPR. The court will only punish a witness where there was
no reasonable excuse for his absence.
*° See, for example, The “APJ Shalin” [1991] 2 Lloyd’s Rep. 62.
895 See paras 7-010 er seq.
*° Arbitration Act 1996, s.11. See Greenmar Navigation Ltd v Owners of Ship (“Bazias 3”) and
(“Bazias 4") and Sally Line Ltd (The “Bazias 3” and “Bazias 4’) [1993] 1 Lloyd’s Rep. 101.
87 Section 11(2) of the Arbitration Act 1996.
*°8 Section 2(2) of the Arbitration Act 1996.
*” Section 38(3) of the Arbitration Act 1996. See para.5—098.
1° 11994] 2 All E.R. 449, HL, a decision based on s.12 of the Arbitration Act 1950, which has now been
repealed. For the arbitrator’s power to grant security for costs see paras 5-079 ef seq.
‘11 Arbitration Act 1996, s.70(6).
*!2 This conclusion is derived from the decision of H.H. Judge Dean Q.C. of January 19, 2000 in Smith
v UIC Insurance Co Ltd, which was based on the old law.
 Detemination of the Recoverable Costs 445

be exercised on the ground that the appellant or applicant is an individual

ordinarily resident outside the United Kingdom.*!*

Disclosure of documents and requests for information. The 7-208

court does not have the general power to order disclosure and answers to requests
for information in an arbitration. An order that one party to an arbitration disclose
documents to another should only be obtained from the tribunal,*!* although in
principle an order requiring the production of very limited documents under
s.44(2)(b) might be granted.*!? In certain circumstances the courts may also
enforce a peremptory disclosure order made by the tribunal.*!°

10. DETERMINATION OF THE RECOVERABLE COSTS OF THE

ARBITRATION

Introduction. The Arbitration Act 1996 gives the parties complete freedom to 7-209
agree what costs of the arbitration are recoverable,*"” and on what basis the costs
are to be assessed.*!* In the absence of agreement by the parties the tribunal is
empowered to determine by award the “recoverable costs of the arbitration” on
such basis as it thinks fit,*'’ failing which the court will determine the matter on
the application of one of the parties.*’? The ‘recoverable costs of the arbitration”
under s.63(3) does not incorporate by reference all the rules applicable to detailed
assessment of costs in the courts, and ss.63(3) and (4) are to be read independently
of each other.*?!

Court’s power in respect of the recoverable costs of an arbi- 7-210

tration. Arbitral tribunals may make an order for costs (e.g. the respondent to

813 Nor in the case ofa corporation or association, that its place of incorporation or where its central
management and control is exercised is outside the United Kingdom: s.70(6) of the Arbitration Act
1996,
814 See paras 5-133 et seg. for the extent of the arbitrator’s power. The court’s power to order
“discovery” and “interrogatories” (as disclosure and requests for information were formerly called)
under s.12(6)(b) of the Arbitration Act 1950 was revoked by s.103 of the Courts and Legal Services
Act 1990.
815 See para.7-192 above.
816 Section 42 of the Arbitration Act 1996, see para.7—-198.
517 Section 63(1) of the Arbitration Act 1996 which should be distinguished from s.60 of the Act. The
latter section invalidates an agreement made before the dispute arises that one party should pay all
or part ofthe costs of the arbitration. The recoverable costs referred to in s.63 include the legal costs
incurred by the parties in the arbitration as well as the fees and expenses of the tribunal and any
expert.
818 Arbitration Act 1996, ss.63(1) and 64(1).
819 Arbitration Act 1996, s.63(3). Such costs may include reasonable fees and expenses of the tribunal,
s.64(1). See paras 6-141 ef seq.
20 Arbitration Act 1996, s.63(4).
821 Rotary Watches Ltd v Rotary Watches (USA) Inc, Supreme Court Costs Office, December 17, 2004,
unreported.
 446 The Role ofthe Court

pay the claimant’s costs on the usual basis) but leave the assessment of those costs,
other than the fees and expenses of the tribunal, to be agreed by the parties or to
be determined by the court.*”* If for whatever reason the tribunal does not
determine the recoverable costs of the arbitration, the court may on the application
of any party to the arbitral proceedings determine those costs on such basis as it
thinks fit or order how they shall be determined.**? Once the issue of costs is
before the court under s.63, it can order summary of assessment of costs and
payment on account of costs in the usual way.*** The court may specify in the
order the means by which and terms on which the recoverable costs shall be
determined.**? Notice of an application to the court under s.63 of the Act must be
given to the other parties.*”°

a—21 Basis on which costs of arbitration are assessed. In the absence of

any indication from the parties or the tribunal, the court has a complete discretion
to determine the amount of costs recoverable from one or other of the parties or
the basis on which those costs should be assessed. Unless however the court order
specifies a particular sum or basis, the recoverable costs of the arbitration will be
determined on the basis that there “‘shall be allowed a reasonable amount in
respect of all costs reasonably incurred’’.*”’ Section 63(5)(b) also states that any
doubt as to whether costs were reasonably incurred or were reasonable in amount
shall be resolved in favour of the paying party.

7-212 Court’s powers in respect of the tribunal’s fees and expenses.

Normally the tribunal*?* or the appointing authority*”’ will determine the tribu-
nal’s fees and expenses, which will be recovered in and be part of the award.
Where however there is a question about what fees and expenses of the tribunal are
reasonable and appropriate in the circumstances of a particular arbitration, the
court has power to determine that question. The power will usually be exercised
upon the application of one of the parties (upon notice to the other parties and to
the tribunal) under s.28(2) of the Arbitration Act 1996 but the power may also be
exercised in the course of an application under s.63(4), which has already been
mentioned,**° or upon the application of any party (upon notice to the other
parties) under s.64(2) of the Act. The court also has power to make an order in

822 See para.6—153. J

*23 Arbitration Act 1996, s.63(4).
®4 Rotary Watches Ltd v Rotary Watches (USA) Inc, Supreme Court Costs Office, December 17, 2004,
unreported.
825 Section 63(4)(b) of the Arbitration Act 1996 (e.g. to be assessed by an expert, other than the courts
taxing officer, on terms as to payment of the expert’s fees).
826 Section 63(4) of the Arbitration Act 1996.
*27 Section 63(5)(a) of the Arbitration Act 1996. For guidance on how the assessment is done see CPR
Pt 44.7 and CPR Pt 47 and commentary on them in the White Book. See also para.6—-143.
*8 Section 64(1) of the Arbitration Act 1996 provides that unless otherwise agreed by the parties the
recoverable costs of the arbitration, which may be awarded, shall include reasonable fees and
expenses of the tribunal as appropriate in the circumstances.
*2° See Arts 30 and 31 of the ICC Rules of Arbitration and Art.28 of LCIA Rules of Arbitration.
*8° See para.7—210. Section 63(7) makes clear that the provisions of s.63 do not affect the right of the
arbitrators to payment of their fees and expenses. A similar provision appears in s.64(4).
 Detemination of the Recoverable Costs 447

respect of an arbitrator’s entitlement to fees and expenses if he is removed by the

court®*! or if he resigns.**?
Section 28(3) provides that if the application under that section is made after
any amount has been paid to an arbitrator by way of fees or expenses, the court
may order the repayment of such amount (if any) as is shown to be excessive, but
will not do so unless it is shown that it is reasonable in the circumstances to order
repayment. The fact that an arbitrator makes an error is not ordinarily a ground
for an adjustment to his fee for the time taken as a result of that error.**> Where
a party has agreed on an amount of fees and expenses to be payable to an arbitrator,
s.28 will not affect his contractual liability for those fees and expenses.***
If the tribunal rather than the parties appoint an expert or legal adviser or
assessor, his fees and expenses may be considered by the court as part of the
tribunal’s expenses.**°

Court’s power if the tribunal refuses to deliver an award 7-213

without payment. The Arbitration Act 1996 recognises that the tribunal
may refuse to deliver an award to the parties except upon full payment of all fees
and expenses,**° but in the event of a dispute about their amount, s.56(2) of the
Act provides for resolution by the court in the absence of any available arbitral
process for appeal or review of the amount of the fees or expenses demanded.**”
Notice of the application to the court must be given to the tribunal and to the
parties.°°*

Various court orders in respect of arbitrators’ fees and 7-214

expenses. The Arbitration Act 1996 gives the court power to make various
orders where there is a dispute about the fees and expenses of an arbitrator
(whether or not he has ceased to act) or an umpire (even if he did not replace the
arbitrators)**? or even an arbitral institution.**? Those orders include the fol-
lowing:

® to review and if appropriate, to adjust the fees and expenses claimed by

members of a tribunal**';
® to order repayment of excessive sums paid by any party on account of fees
and expenses*”’;

831 Section 24(4) of the Arbitration Act 1996.

832 Section 25(3)(b) of the Arbitration Act 1996.
833 Hyssman v Al Ameen [2000] 2 Lloyd’s Rep. 83 at 100.
834 Arbitration Act 1996, s.28(5). A similar provision appears in s.56(8) of the Act: see para.7—214.
835 The definition of “recoverable costs of the arbitration” in s.64(1) of the Arbitration Act 1996
includes the arbitrators’ fees and “expenses”.
836 Section 56(1) of the Arbitration Act 1996.
837 The application cannot be made to the court if there is an available arbitral process of the kind
mentioned in s.56(4) of the Arbitration Act 1996.
838 Section 56(2) of the Arbitration Act 1996. For procedure see para.8—195.
839 Arbitration Act 1996, s.64(2).
840 Arbitration Act 1996, s.56(6).
841 Arbitration Act 1996, s.28(2).
842 Arbitration Act 1996, s.28(3).
 448 The Role of the Court

® to order delivery of an award on payment into court of the amount demanded

for fees and expenses or a lesser sum***;
@ to direct how the amount of fees and expenses properly payable shall be
determined and on what terms***; and
@ to order payment out of court to an arbitrator of all or any part of the sum
paid into court on account of his fees and expenses.**

The first two orders can be made at any time during the arbitration where there
is a question as to the reasonableness of the tribunal’s charges, and the court is
empowered to ‘“‘adjust fees and expenses even after they have been paid” to the
tribunal.**° The other orders may be made where the court is satisfied that the
tribunal has demanded too much of the parties for the release of the award**’
although in that case ‘“‘no application to the court may be made where there is any
available arbitral process for appeal or review of the amount of the fees or expenses
demanded”’.***
In determining the amount of fees and expenses properly payable to the tribunal
the court will have regard to the terms of any agreement with the parties relating
to payment of the tribunal. Where, for example, the parties have agreed a rate for
each hour worked by the tribunal, that agreement will be enforced by the court*””
unless there are special grounds for setting the agreement aside.**°
Section 56 also applies to an arbitral institution or other third party that has
powers in relation to the delivery of the tribunal’s award.**!

7-215 Appeal. Permission of the court is required to appeal from a decision of the
court under s.56 of the Act.*** Although “‘court”’ is defined as the first instance
court®’* making the decision, there are in fact two categories of cases where the
Court of Appeal can grant leave to appeal notwithstanding the refusal of the first
instance judge to grant leave. See the discussion at para.7—201 in respect of words
to the same effect under s.44(7).

843 Arbitration Act 1996, s.56(2)(a).

‘4 Arbitration Act 1996, s.56(2)(b).
“5 Arbitration Act 1996, s.56(2)(c).
846 See DAC report, paras 122-124.
“7 Section 56(3) of the Arbitration Act 1996 makes clear that the amount of fees and expenses properly
payable “is the amount the applicant is liable to pay under s.28 on any agreement relating to the
payment of the arbitrators”,
“48 section 56(4) of the Arbitration Act 1996,
8 Arbitration Act 1996, s.56(3)—see also para.4—052 on s.28 of the Arbitration Act 1996.
®° Although this exception is not mentioned in s.56(3) of the Arbitration Act 1996, it should be
implied where, for example, there has been a mutual mistake over the fees.
851 Section 56(6) of the Arbitration Act 1996.
852 Section 56(7) of the Arbitration Act 1996,
853 Section 105(1) of the Arbitration Act 1996.
 CHAPTER 8

THe ROLE OF THE COURT AFTER THE

AWARD

1. INTRODUCTION TO CHap- 7. APPEAL ON QUESTION

ERS e a sca Raker omer SES 8-001 ORVICAWE Sey ce odie 8-119
(a) Determination will
2. ENFORCEMENT OF
substantially affect the
INWARD Stereate
hs.tee ettenn :: 8—002
rights of the parties.. 8-133
3. RECOGNITION AND EN- (b) Decision is obviously
FORCEMENT OF _ CERTAIN WONG: thee decane ssc: 8-137
FOREIGN AWARDS .......... 8-020 (c) Question of general
public importance .... 8-141
4. CHALLENGE or Awarps 8-051 (d) Just and proper in
all the circumstances 8-145
5. CHALLENGE OF SuB-
(e) Application to
STANTIVE JURISDICTION 8—0)54
COUP cccteetsecresas.ts34: 8-147
6. CHALLENGE OF SERIOUS IRR- (f) Appeal to Court of r
EGULARITY CAUSING SuB- Appeal eos 8-155
STANTIAL INJUSTICE....... 8-072 8
. ORDERS IN RESPECT OF
(a) Serious Irregularity.. 8-072 CHALLENGES AND
(b) Substantial Injustice 8—104 INGTSSINDS <p pees 8-162
(c) Application to court. 8-108
(d) Appeals to the Court 9, PROCEDURE FOR ARB-
ofvAppealiees eens 8-115 ITRATION APPLICATIONS. 8-178

1. INTRODUCTION

Contents of the chapter. This chapter examines the court’s role after an 8-001
award has been issued to the parties.’ It does not confine itself to considering the
court’s role only after the arbitral proceedings have terminated as many arbitra-
tions will involve multiple awards. As will be explained, it is possible to challenge
one award, for example as to jurisdiction, whilst the arbitration proceeds as regards
other issues to be determined. This chapter begins by explaining how an award
may be enforced either under the summary procedure provided for in s.66 of the

'The subject of “recoverable costs of the arbitration” is the only exception to this statement. For
convenience that subject is dealt with at the end of Ch.7. See paras 7—209 et seg. and 6-153.
 450 The Role of the Court after the Award

Arbitration Act 1996? or by starting an action on the award.’ It comments on the

enforcement of certain foreign awards, including New York Convention Awards.*
It then proceeds to examine the grounds for challenging? or appealing® against an
award. The forms of recourse available, including the setting aside of the award
and its remission to the arbitral tribunal,’ are then examined.
This chapter also deals with the procedures to be adopted in relation to the
various applications to the court.* They include provisions for service within and
out of the jurisdiction.

2. ENFORCEMENT OF AWARDS

8-002 Introduction. “Unless otherwise agreed by the parties, an award made by the
tribunal pursuant to an arbitration agreement? is final'® and binding both on the
parties and on any persons claiming through or under them”’.'' This means that,
subject to any contrary agreement by the parties and to the right of challenge,'*
once the award'? has been made it is immediately enforceable. Many awards are
implemented without the need for further steps to be taken against the losing
party, but if a party refuses to comply with the award, enforcement proceedings
will be necessary.'*
There are two principal methods of enforcement of an award available in
England. The first method is to obtain permission or “‘leave’’'’ of the court to
enforce the award, “‘in the same manner as a judgment or order of the court to the
same effect’’, under the summary procedure provided for by s.66 of the Arbitra-
tion Act 1996.'° Judgment may also be entered in terms of the award'” where that

? This section restates s.26 of the Arbitration Act 1950. See paras 8-003 er seg.
* Paragraphs 8-014 e7 seq.
* Paragraphs 8-020 et seg.
> Paragraphs 8-051 et seq.
® Paragraphs 8-119 et seq.
’ Paragraphs 8-162 et seq.
* Paragraphs 8-178 et seq.
° “Arbitration Agreement” is defined in s.6(1) of the Arbitration Act 1996: see paras 2—002 et seq.
'0 See paras 6--004 et seg. for various meanings of “‘final’’.
'! Arbitration Act 1996, s.58(1), replacing s.16 of the Arbitration Act 1950.
'? This right is expressly reserved by s.58(2) of the Arbitration Act 1996, According to that subsectiory
challenge may be done by “‘any available appeal or review or in accordance with the provisions of
this Part” of the Arbitration Act 1996. The subject of challenge is dealt with in paras 8-051 er
seq.
'S What is sought to be enforced must be an arbitral award. See Al Midani v Al Midani [1999] 1
Lloyd’s Rep. 923 and para.6—003.
'* Enforcement proceedings should not be confused with proceedings for a declaration confirming the
award in the country where it was made. Declaratory proceedings of that kind are common in some
jurisdictions, for example, the USA, see Rosseel NV v Oriental Commercial & Shipping Co (UK) Ltd
[1991] 2 Lloyd’s Rep. 625, but not in England.
"The Arbitration Act 1996 uses the word “leave”, but CPR Pt 62 and the Arbitration Practice
Direction use the word “permission” which will generally be used in this book.
'© Section 66(1) of the Arbitration Act 1996 has replaced s.26(1) of the Arbitration Act 1950. See paras
8-003 et seq.
'” Section 66(2) of the Arbitration Act 1996. See para.8—007.
 Enforcement of Awards 45]

would make enforcement easier.'* The second method of enforcement is to bring

an action on the award and then to seek a judgment from the court for the same
relief as is granted by the award.!”
The procedure for enforcement and the grounds available for opposing enforce-
ment depend to some extent on whether the award is made in England or abroad,”°
and in the latter case whether any Convention regulates its recognition and
enforcement.?!

Procedure to enforce awards summarily. The summary procedure 8-003

available under s.66 of the Arbitration Act 1996”? is normally used to enforce an
arbitral award,”* including an agreed award.** The section applies whether the seat
of the arbitration is in England or abroad and even if no seat has been designated
or determined.**> Permission of the court is needed’? but the procedure for
obtaining it is straightforward. The application for the court’s permission is
usually made without notice to the other party”’ by an arbitration claim form**
supported by a witness statement to which the arbitration agreement and the
award or a copy of them (with an English translation if necessary) are exhibited.”’
Whilst comparisons are sometimes drawn between arbitration and adjudication,
they are not valid in this area. Adjudication does not benefit from a corresponding
provision to s.66, the absence of which means that an adjudicator’s decision must
be enforced by proceedings based on the contractual obligation to comply with the
decision.*°

'S The pros and cons of entering judgment in the terms of the award as opposed to enforcing the
award are discussed briefly in para.8—008.
' Section 66(4) of the Arbitration Act 1996 expressly provides that nothing in s.66 affects the
recognition and enforcement of an award by “‘an action on the award”.
20 For a classification of awards see paras 6-002 et seq.
1 See paras 8-020 et seq. for the principal conventions.
22 The section is mandatory, and reflects s.35 of the Model Law.
3 Not every award is enforceable under this section: see Dalmia Cement Ltd v National Bank of
Pakistan [1974] 2 Lloyd’s Rep. 98.
+4 An “agreed award” records a settlement reached by the parties to an arbitration and may be
enforced in the same way as any other award on the merits of the case: see s.51 of the Arbitration
Act 1996 and paras 6-024 et seq. above.
25 Section 2(2) of the Arbitration Act 1996.
26 Section 66(1) of the Arbitration Act 1996 requires “leave of the court” for enforcement of an award
under that section.
27 Orders were made on this basis and without a hearing in Walker v Rowe [2000] 1 Lloyd’s Rep. 116
at 119 and Socadec SA v Pan Afric Impex Co Ltd [2003] EWHC 2086.
28 The form of application and the procedure are described in para.8-178. Although the procedure for
obtaining permission or “leave” of the court is usually without notice, the court may direct that
notice should be given to another party—see CPR r.62.18(2). In any event, full and frank disclosure
should be made in the witness statement of any matter that may affect the granting of leave, see
Curacao Trading Co BV v Harkisandas & Co [1992] 2 Lloyd’s Rep. 186, a decision based on s.26(1)
of the Arbitration Act 1950, which has been re-enacted by s.66(1) of the Arbitration Act 1996.
29 These exhibits are not mentioned in s.66 of the Arbitration Act 1996, although they are specified
in s.102 of the Act in respect of New York Conyention Awards. They are however required by CPR
1.62.18(6). See White Book, 2E-33 and para.8—178 for details of the application.
30 For a discussion of this distinction, see VHE Construction Ple v RBSTB Trust Ltd [2000] B.L.R.
187, per Judge Hicks at [55].
 452 The Role ofthe Court after the Award

8—004 Permission usually given. Permission to enforce the award is usually

given, although the Arbitration Act 1996 directs the court not to grant “leave”
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”’.*? In
practice, if there is no challenge to the award or if any applicable challenges to the
award under ss.67—69 have been determined against the applicant, then an order
for enforcement of the award under s.66(1) will usually follow.** A party who
wishes to oppose an application for permission to enforce an award, rather than
oppose an order made under s.66 of the Act,*? must act promptly, because
permission may be granted without notice to him in the absence of his notifying
the court of his objection. The onus of showing that the arbitral tribunal “lacked
substantive jurisdiction”** and that he has not lost the right to object on this
ground* rests on the person opposing leave to enforce the award.

8-005 Court discretion. Even if the jurisdiction of the tribunal is not in issue, the
court has a discretion not to grant leave to enforce an award summarily.*° s.66 is
a summary procedure; it is not suitable in cases involving complex objections to
enforcement requiring a full investigation of the facts.*” The court may also not
give permission to enforce where the award is so defective in form** or substance*’
that it is incapable of enforcement or its enforcement would be contrary to public
policy.*® The court may also decline to enforce an award which purports to decide
matters that are not capable of resolution by arbitration*’ or grants relief which (if
enforced as a judgment or order of the court) would improperly affect the rights
of persons other than the parties to the arbitration agreement.”
These are exceptional cases. Wherever possible the court will give effect to the
award by granting permission to enforce it.

51 Section 66(3) of the Arbitration Act 1996.

* Persaud v Beynon [2005] EWHC 3073 at [41].
3 See paras 8-010 e¢ seg. for opposing an order made under s.66 of the Arbitration Act 1996.
*4 See s.82(1) of the Arbitration Act 1996 for a definition of‘substantive jurisdiction” and para.4-135,
as well as s.67 of the Act and para.8—054 for the right to challenge an award on this ground.
* Section 66(3) of the Arbitration Act 1996 makes clear that a right to object to “leave” on this ground
may be lost if the objection was not raised promptly (see also s.73 of the Act and para.8—065).
%° The discretion is not finite: see DAC report, para.374.
*” Chaim Kohn v Sheva Wagschal & Others [2006] W.L. 3854048, paras 13, 14; ABCI v Banque Franco-
Tumsienne |2002] 1 Lloyd’s Rep. 511.
*8 Certain defects may be corrected under s.57 of the Arbitration Act 1996: see paras 6-186 e7 seq.
above. Under the ICC Rules of Arbitration, Art.27 a draft of the award is scrutinised for form
before it is approved by the ICC Court of Arbitration. The substance of the award is left to the
arbitral tribunal to decide.
*° The defect in substance would have to be apparent on the face of the award, but see comments of
Lord Denning M.R. in Middlemiss and Gould v Hartlepool Corp [1972] 1 W.L.R. 1643 concerning
an award whose validity is doubtful.
This is not stated in s.66 of the Arbitration Act 1996 but it was considered (see DAC report,
para.273) and it falls within the court’s discretion. For “public policy” and illegality, see paras
8-031 and 8-044.
“! For matters which are not arbitrable see paras 1-033 et seq.
*” This was a formula suggested by the DAC report at para.374, but was not embodied in s.66 of the
Arbitration Act 1996. Nevertheless, the court retains a discretion.
 Enforcement of Awards 453

Effect of permission to enforce given under section 66. Where 8-006

permission is given by the court, it is usually given on terms that the award may
be enforced in the same manner as a judgment or order of the court to the same
effect. This means that all the methods of enforcing a judgment of the court**
are then available to enforce the award,* including an injunction.*° Normally a
party who has obtained permission will proceed to enforce the award without
delay, but he is not obliged to do so.*” Enforcement may be suspended pending the
determination of a challenge to the award.**

Judgment in terms of the award. Where permission to enforce is given, 8-007

judgment may also be entered in terms of the award.*” That may be necessary in
order to comply with a contractual requirement’ or to take advantage of some
convention for the enforcement of judgments abroad, but care should be taken
because if the award merges with the judgment, it may not be possible to take
advantage of the enforcement provisions of a particular arbitration convention.”!

Which route to follow? The respective provisions of ss.66(1) and (2) of the 8-008
Arbitration Act 1996 are distinct, the former enables a party to use the court’s
enforcement mechanisms for the purpose of enforcing an award, the latter enables
a party to obtain a judgment of the court in the terms of the award.°* Both routes
provide effective means of enforcement, although one may be more appropriate
than the other if enforcement is sought in a jurisdiction where having either an
award or an English court judgment facilitates the process.

Stay of enforcement. Where the court grants permission to enforce an 8-009

award, it may also stay the execution of that order for a limited period. The effect
of the stay will be to suspend enforcement pending an application to challenge the
award. A party wanting to suspend enforcement should apply promptly to the
court for an order and combine that application with his challenge of the award
and opposition to its enforcement. The court will consider the prospects of
success of the challenge and whether enforcement might become more or less easy
if it is delayed.** An order for a stay that suspends enforcement of the award will
usually be subject to specific conditions. In one case, the court directed the

#8 Section 66(1) of the Arbitration Act 1996.

This means the High Court or County Court: see s.105(1) of the Arbitration Act 1996.
+5 For the remedies available from the court see para.8—-018.
46 Aiglon Ltd and L’Aiglon SA v Gau Shan Co Lid [1993] 1 Lloyd’s Rep. 164, a case where worldwide
freezing injunctions were granted to enforce an award.
47 Curacao Trading Co BV v Harkisandas & Co [1992] 2 Lloyd’s Rep. 186.
48 Apis AS v Fantazia Kereskedelmi KFT [2001] 1 All E.R. (Comm) 348.
* Section 66(2) of the Arbitration Act 1996.
50 A requirement that judgment be entered in terms of the award is rare nowadays but it can be found
from time to time in arbitration agreements.
>! See para.8—020.
52 ASM Shipping Ltd of India v TTMI of England (2007) EWHC 927; [2007] 1 C.L.C 555 at [26].
53 Sycadec SA v Pan Afric Impex Co Ltd [2003] EWHC 2086.
 454 The Role of the Court after the Award

respondent to pay a substantial sum into an escrow account.** In other cases, the
court has ordered the applicant to make a payment into court as security.”°

8-010 Objections to summary enforcement of an award. If permission

is given to enforce an award under s.66 of the Act, the party (or parties) against
whom the award is to be enforced may still challenge the award. There is a time
after service of the order®® during which an application may be made to set aside
the order for permission to enforce the award.°’ The grounds for challenging an
award** are not limited to the matter of jurisdiction mentioned in s.66(3) of the
Act,°’ but they are certainly no wider than the rights available to challenge awards
under the Arbitration Act 1996 more generally. The grounds for challenging some
awards made abroad may be limited by a convention.” The subject of challenges
and the grounds for opposing enforcement of awards are discussed in the following
sections of this chapter.°!

8-011 Award must be pursuant to arbitration agreement. Enforcement

under s.66 is only available in respect of ‘‘an award pursuant to an arbitration
agreement”’. It cannot therefore be used to enforce preliminary or interim deci-
sions®’ which are themselves subject to review by an arbitral tribunal.°? Nor can
it be used to enforce procedural orders or directions, or any order of the tribunal
granting relief on a provisional basis.°*

+ Air India v Caribjet [2002] 1 Lloyd’s Rep. 314. An application to stay enforcement of asecond award
was refused because, if granted, it would be a long time before it was removed.
° Apis AS v Fantazia Kereskedelmi KFT [2001] 1 All E.R. (Comm) 348 where the court applied the
same test for ordering security in respect of the suspension of an award made in England as is
applied by the court when considering an application under s.103(5) of the Arbitration Act 1996.
See para.8—046. Socadec SA v Pan Afric Impex Co Ltd [2003] EWHC 2086 where the court stayed
enforcement for 28 days to allow security of US $4,000,000 to be put up. If this was done, the stay
would continue.
°° The time limit is 14 days after service of the order within the jurisdiction or such other period as
the court fixes where the order is served outside the jurisdiction: see CPR r.62.18(9) and
para.8—224.
°? See para.8—224 for an application to set aside an award. If possible a party wishing to oppose
enforcement should state his objections before permission is given: see para.8—004.
°** The grounds are discussed in paras 8-051 er seq.
»” Section 66(3) specifically mentions the case where it is shown that the tribunal “lacked substantive
jurisdiction to make the award”, but does not limit challenge to this ground. Some other grounds
are discussed in connection with opposition to enforcement of New York Convention awards: see
paras 8-028 ef seq.
® The New York Convention, for example, see s.66(5) of the Arbitration Act 1996 and paras 8-021
et Seq.
°! See paras 8-051 er seg.
°* Under some contractual provisions (e.g. cl.67 of the FIDIC Conditions of Contract) an engineer or
adjudicator or other person may be required to make a decision before an arbitration com-
mences,
° Cameron (A) Lid v John Mowlem & Co Plc [1990] 52 B.L.R. 24, CA. Relief may however be
available from the court to give effect to such a decision see Drake & Scull Engineering Lid v
McLaughlin & Harvey Ple 60 B.L.R. 102.
The parties can empower a tribunal to make such an order which may be enforced as a “‘peremptory
order” under s.42 of the Arbitration Act 1996 but not as an award because the tribunal’s order is
subject to final adjudication: see s.39(3) of the Act and para.5—088.
 Enforcement of Awards 455

Form of award. Provided the terms of the award are sufficiently clear there 8-012
is now no reason why a declaratory award cannot be enforced under s.66. Indeed,
the courts do enforce declarations under s.66.°° Previously expressed doubts about
whether an award which is couched in purely declaratory terms can be enforced
as a judgment under s.66 of the Act are, it is suggested, no longer applicable.°° The
court will not however enforce an award which is in terms that are not clear nor
grant permission to enforce an award for the payment of money which does not
specify the sum due.®’ In order to be enforceable under this summary procedure
the award ‘“‘must be framed in terms which would make sense if those were
translated straight into the body of a judgment”.») 68

Security. The court has jurisdiction to order security for costs in respect of an 8-013
application under s.66.°°

Action on the award. The provision in the Arbitration Act 1996 that “an 8-014
award made by the tribunal pursuant to an arbitration agreement is final and
binding’? supports an action on the award, although as stated above a party
wishing to enforce an award would normally adopt the summary procedure
provided by s.66 of the Act.’' That procedure is only available however where
there is an ‘‘arbitration agreement” within the meaning of the Arbitration Act
1996.”* When that procedure is not available for any reason” it may be possible to
commence an action on the award.”*

Implied obligation to perform award. If the arbitration agreement 8-015

pursuant to which the award is made falls outside the broad statutory definition,”
, the action will have to be based on the premise that the particular arbitration

© For one such example, see Kohn v Wagschal [2006] EWHC 3356 at [7].
6 Margulies Brothers, Ltd v Dafnis Thomaides & Co (UK), Ltd [1958] 1 Lloyd’s Rep. 250. See also
the observations of Moore Bick J. in Zongyuan International v Uni-Clan Lid (January 19, 2001) QBD
(Comm) though in that case the judge found that the award was expressed in clear enough terms
to be capable of enforcement as a judgment pursuant to s.101 (2) of the Act. In any event, it would
apparently not apply to a New York Convention award made in declaratory form that is sought to
be enforced under s.101 of the Arbitration Act 1996: see s.66(4) of the Arbitration Act 1996.
67 See Margulies Brothers Ltd v Dafnis Thomaides & Co (UK) Ltd [1958] 1 Lloyd’s Rep. 250. The
correction of an award or an additional award may be required for this purpose: see s.57 of the
Arbitration Act 1996 and para.6—091.
68 Tongyuan International v Uni-Clan Lid (January 19, 2001) QBD (Comm), Moore Bick J.
6° Gater Assets Ltd v Nak Naftogaz Ukrainiy [2007] 1 Lloyd’s Rep. 522.
7° Section 58(1) of the Arbitration Act 1996.
7! See para.8—003.
7? Section 6 of the Arbitration Act 1996 and para.2—002.
73 The summary procedure under s.66 of the Act would not be available if, although an arbitration
agreement can be proved, it does not amount to an “arbitration agreement” within the meaning of
the Arbitration Act 1996, s.6.
74 Goldstein v Conley [2002] 1 W.L.R. 281 at 294 where the award was not made “pursuant to an
arbitration agreement” within the meaning of the Arbitration Act 1996.
75 A study of ss.5 and 6 of the Arbitration Agreement 1996 will reveal the breadth of the definition:
see para.2—002.
 456 The Role of the Court after the Award

agreement contains an implied obligation to perform the resulting award’ and

failure to do so is a breach of that arbitration agreement. The successful party
would be entitled to bring an action in respect,of such breach and to obtain a
judgment in the terms of the award.’”” The essential elements of the plaintiff’s
cause of action are that he must plead and prove:

® an arbitration agreement’*;

@ that a dispute has arisen which falls within that arbitration agreement;

@ the appointment of a tribunal in accordance with the arbitration agree-

ment;

@ the making of the award pursuant to the arbitration agreement; and

@ failure to perform the award.”

8-016 Defences to an action on the award. With one exception, the same
objections that can be raised to oppose the grant of permission to enforce an award
under s.66 of the Act®® can be raised by way of defence to an action on the award.
They are not limited to the grounds specified in s.103(2) of the Act,*! although
those grounds give an indication of the defences available.*?
A serious irregularity on the part of the tribunal cannot however be pleaded as
a defence to an action on an award, and since an award cannot be set aside in an
action commenced by a claim form, it cannot be set aside on a counterclaim.** A
defendant to an action on an award cannot therefore seek by way of counterclaim
an order that the award should be set aside or remitted to the tribunal for
reconsideration. His proper course, if appropriate grounds exist, is to make a
separate application™ to have the award remitted or set aside and to refer to that

7° Purslow v Baily (1704) 2 Ld. Raym. 1039; Bremer Oeltransport GmbH v Drewry [1933] 1 K.B. 753;
Bloemen v Gold Coast City Council [1973] A.C. 103; see also Lord Hobhouse in Associated Electric and
Gas Insurance Services Ltd v European Reinsurance Co of Zurich [2003] 1 W.L.R. 1041 at [9]. Section
8(1) of the Arbitration Act 1996 is consistent with the implied promise.
7” 'Vhis common law remedy is saved expressly by s.66(4) of the Arbitration Act 1996.
7’ Though not one that must comply with the definition in s.6 of the Arbitration Act 1996 because this
enforcement mechanism is not confined to arbitration agreements under the Act.
” Christopher Brown Lid v Oesterreichischer Waldbesitzer, etc, R GmbH |1954| 1 Q.B. 8 at 9 and The
“Saint Anna” {1983] 1 Lloyd’s Rep. 637.
*° See para.8—010.
5! See paras 8-028 et seq.
*? Challenges to and appeals against an award are dealt with later in this chapter. See paras 8-051 er
seq.
*S Birtley District Co-operative Society Lid v Windy Nook & District Industrial Co-operative Society Ltd
[1959] 1 W.L.R. 142; [1959] 1 AILE.R. 43; Scrimagho v Thornett and Fehr (1924) 18 Ll. L. Rep. 148.
In these decisions the former ground of misconduct was in issue, but the reasoning applies to
serious irregularity.
** Part II] of CPR Pt 62 does not apply to an action on the award, so the application to set aside would
have to be made by originating motion.
 Enforcement of Awards 457

application in his defence to the action on the award.** He should also consider
applying to stay the action on the award pending the outcome of his own appli-
cation.

Limitation Period. The limitation period for an action on the award will 8-017
usually be six years,*° although if the arbitration agreement is under seal it will be
12 years.*’ Time runs from the date of the breach of the arbitration agreement,**
not from the date of the arbitration agreement or the date of the award.*”

Remedies available from the court to enforce an award. The 8—018

remedies available from the court to enforce an award reflect the scope of relief and
remedies available to an arbitral tribunal.” In the case of an award of a sum of
money, the court may give permission to enforce the award by any means of
execution available for a judgment of the court or give judgment for that sum,
including interest, as a debt.’' The court may similarly enforce an award of
damages.’* The court may also enforce an award for specific performance.”? It is
also possible to sue for a declaration that the award is binding.”*
The court may grant an injunction to assist in the enforcement of an arbitration
award. The court also has power to charge property recovered in the arbitral
proceedings with the payment of solicitors’ costs.?> This is an extension of the
court’s power to make declarations and orders in legal proceedings under s.73 of
the Solicitors Act 1976.
The court may also grant an anti-suit injunction to prevent the award being
challenged in a court other than the court of the seat of the arbitration.”°

Enforcement of award after bankruptcy of party. The validity of 8-019

an award is not affected by a party becoming bankrupt after the commencement

85 This is the rule in Thorburn v Barnes. See also Scrimaglio v Thornett and Fehr (1924) 18 LI. L. Rep.
148.
86 Section 7 of the Limitation Act 1980.
87 Section 8 of the Limitation Act 1980.
88 The breach is an express or implied obligation to carry out the award.
89 4gromet Motoimport Ltd v Maulden Engineering Co (Beds.) Ltd [1985] 1 W.L.R. 762.
° Section 48 of the Arbitration Act 1996 and see paras 6-103 et seq.
” Coastal States Trading (UK) Ltd v Mebro Mineraloelhandelsgesellschaft GmbH [1986] | Lloyd’s Rep.
465. The tribunal’s power to award interest appears in s.49 of the Arbitration Act 1996. See paras
6-115 et seq.
°2 Bremer Oeltransport GmbH v Drewry [1933] 1 K.B. 753. See also Dalmia Dairy Industries Ltd v
National Bank of Pakistan [1978] 2 Lloyd’s Rep. 223 at 274.
°3 See para.6—108.
°4 That would be unusual in view of the terms of s.58(1) of the Arbitration Act 1996 but the subsection
is not mandatory, so there may be an issue as to the meaning of the parties’ agreement. See Birtley
District Co-operative Society Lid v Windy Nook & District Industrial Co-operative Society Ltd (No.2)
[1960] 2 Q.B. 1.
°> Section 75 of the Arbitration Act 1996.
°6 Cv D [2007] EWHC 1541.
 458 The Role of the Court after the Award

of the reference but before enforcement of the resulting award,’’ and the award
could form the basis of proof of a claim in the estate of the bankrupt. Further, a
trustee in bankruptcy with permission of the court”® may enforce an award or take
action on it.””

3. RECOGNITION AND ENFORCEMENT OF CERTAIN FOREIGN

AWARDS

8—020 Introduction. What has already been said about the enforcement of awards
summarily or by an action on the award applies to awards made abroad as well as
to awards made in England.'°° There are however several conventions which have
been ratified by the United Kingdom concerning the recognition and enforcement
of foreign arbitral awards.'°' Part II of the Arbitration Act 1996 deals with awards
to which the New York Convention'” applies, and it mentions that Pt II of the
Arbitration Act 1950 continues to apply in relation to awards to which the Geneva
Convention'™ applies which are not also New York Convention awards.'°* Awards
made abroad may thus be enforceable in England under one or more conventions
if the United Kingdom and the State where the award was made have ratified
them. The terms of each convention should however be studied because they
differ. The following paragraphs'® will concentrate on enforcement of awards
pursuant to the New York Convention because it is used most often as more
countries have ratified it than any other conyention,'°° but mention will also be
made of the Geneva Convention and the Washington Convention.!”

°7 Ex p. Edwards (1886) 3 Morrell’s Bank. Rep. 179; s.3 of the Arbitration Act 1950 has been repealed,
see para.3—027.
*® Insolvency Act 1986, s.285(1). Permission to enforce the award would be necessary in any event
under s.66 of the Arbitration Act 1996, but a trustee in bankruptcy should apply for permission
under both Acts.
*” For the position of acompany which becomes subject to an administration or winding up order, see
paras 3-030 er seq.
100 An award made abroad which was not enforceable pursuant to a Convention (a ‘“‘non-convention
award”) was enforced in Dalmia Cement v National Bank ofPakistan [1974] 2 Lloyd’s Rep. 98.
'!'The New York Convention is the best known of these conventions, although it was preceded by the
Geneya Conyention which continues to apply to some awards. The UK has also ratified the
Washington Convention which applies to certain investments disputes. Each of these conventions
will be considered in turn.
'02 See s.100(4) of the Arbitration Act 1996 for a definition of the New York Convention.
'3 See the Schedules to the Arbitration Act 1950 for the text of the Geneva Protocol and Geneva
Conyention.
't See s.99 of the Arbitration Act 1996, See para.8—047 for awards to which the Geneva Convention
applies.
'0 See paras 8-021 er seq.
'6' The New York Convention is described in the DAC report as “not only the cornerstone of
international dispute resolution, it is an essential ingredient more generally of world trade”
(para.347).
'7 See the Arbitration (International Investment Disputes) Act 1966 for provisions concerning the
Washington Convention and para.8—048 for awards to which that Convention applies.
 Recognition and Enforcement of Certain Foreign Awards 459

New York Convention Award. The Arbitration Act 1996!°° re-enacts 8—021
previous legislation which implemented the New York Convention!” by incorpo-
rating into English law the provisions for the recognition and enforcement of
awards contained in the New York Convention. It defines a ‘‘New York Conven-
tion award” as an award made, in pursuance of an arbitration agreement,!'” in the
territory of a state (other than the United Kingdom) which is a party to the New
York Convention.''' Note that there must be an agreement in writing to satisfy the
requirement of an arbitration agreement. Some instruments go so far as to provide
on their face that the writing requirement is satisfied.''* The scope of the writing
requirements under the Convention and the Arbitration Act are not identi-
cal?

Refusal of recognition and enforcement. The grounds on which 8-022

recognition of New York Convention awards will be refused under ss.101—103 of
the 1996 Act are very limited. Case law is replete with policy statements to this
effect: ‘““There is an important policy interest, reflected in the country’s treaty
obligations, in ensuring the effective and speedy enforcement of such international
arbitration awards”’.''* Section 103 accordingly embodies a predisposition to
favour enforcement of New York Convention awards.''® So unless the ground for
refusal falls within the terms of s.103, the court must recognise and enforce a New
York Convention award. The court also apparently has a very limited discretion to
enforce the award even where one or more of the grounds are made out.''°

Scope of recognition and enforcement. Before turning to the detailed 8-023

terms of s.103, it is useful to set out the provisions of the preceding sections.
, section 101 of the Arbitration Act, 1996 reads:

“101. (1) A New York Convention award shall be recognised as binding on the persons
as between whom it was made, and may accordingly be relied on by those
persons by way of defence, set-off or otherwise in any legal proceedings in
England and Wales or Northern Ireland.

18 Sections 100-103 of the Arbitration Act 19996.

109 The Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted by the
United Nations Conference on International Commercial Arbitration on June 10, 1958; see
definition in s.101(1) of the Arbitration Act 1996.
110 “Arbitration agreement” is defined as an agreement in writing (including an agreement contained
in an exchange of letters or telegrams) to submit to arbitration present or future differences capable
of settlement by arbitration: Arbitration Act 1996, s.6(1).
"| Section 100(1) of the Arbitration Act 1996.
‘12 For example, see Art.4(b) of the US/Ecuador bilateral investment treaty, referred to in Ecuador v
Occidental Exploration & Production Co [2006] 2 W.L.R. 70.
113 Compare ss.100(2) and 5(2) of the Arbitration Act 1996.
4 Norsk Hydro ASA v State Property Fund of Ukraine [2002] EWHC 2120 at [17].
13 [PCO (Nigeria) Ltd v Nigerian National Petroleum Corp [2005] 2 Lloyds’ Rep. 326, per Gross J. at
328.
'16 See para.8—028.
460 The Role of the Court after the Award

(2) A New York Convention award may, by leave of the Court, be enforced in the
same manner as a judgment or order of the court to the same effect.
As to the meaning of “‘the court” see s.105.

(3) Where leave is so given, judgment may be entered in terms of the award.”

The first part of s.101(1) is mandatory. A New York Convention Award is

recognised under English law as binding:on the persons as between whom it was
made. The rest of the section specifies how a party may either enforce such an
award''’ or rely upon it as a defence, set-off or otherwise in any legal proceedings
in England.'!* In this way, the Convention extends beyond the paradigm situation
where a claimant seeks recognition of an award so it can enforce a claim against the
respondent. In Svenska Petroleum Exploration AB v Lithuania (No.1) the claimant
persuaded the court to recognise a jurisdictional award of the tribunal under
s.103(2) in response to an application by the respondent State to strike out the
claimant’s application to recognise the final award under ss.101—103 of the Arbi-
tration Act 1996.'!? Enforcement can be sought directly under s.101(2) by apply-
ing for permission or “‘leave”’ of the court to enforce the award in the same manner
as a judgment or order of the High Court or a county court.'”° Alternatively, where
permission is obtained, judgment may be entered in terms of the award.'*! Where
it was sought to enforce a single award against two separate and distinct parties,
that order was a departure from the terms of the award and would not be an order
“in terms of the award” under s.101(3).'*? These provisions reflect the terms of
s.66, although because there is a special provision for the recognition and enforce-
ment of a New York Convention award the Arbitration Act 1996 makes clear that
nothing in that section affects the recognition or enforcement of an award under
sliOl.of the vey?”
Where a State has agreed in writing to submit a dispute to arbitration the effect
of s.9(1) of the State Immunity Act 1978 is to extend the exemption from state

"7 Sections 101(2) and (3) which replaced s.3(2) of the Arbitration Act 1975, provide for enforcement
of a New York Convention award.
''® Section 101(1) which replaced s.3(2) of the Arbitration Act 1975, provides for using the award as
a defence, set-off or otherwise. The word “otherwise” makes clear that the use to which a New York
Convention award may be put is not limited.
"™™ [2005] 1 Lloyd’s Rep. 515. In this case, therefore, the claimant’s initial application for recognition
of the final award under the Convention led to it being able to rely on the tribunal’s jurisdictional
award under the Convention as a defence to the respondent’s application to strike out its original
application for recognition, The claimant also relied upon the principle of issue estoppel which was
not made out at that stage, although it was subsequently on the hearing of the full application to
register the award. See Svenska Petroleum Exploration AB v Lithuania (No.2) [2006] 1 Lloyd’s Rep.
181 at [21], [22], [52]|-[56], affirmed at [2006] EWCA 1529.
Section 105(1) of the Arbitration Act 1996 defines ‘the court” as meaning the High Court or
County Court.
'21 Section 101(3) of the Arbitration Act 1996.
' Norsk Hydro ASA v State Property Fund of Ukraine [2002] EWHC 2120 at [15]-{18].
' Arbitration Act 1996, s.66(4) replacing the Arbitration Act 1975, s.3(1)(a). This provision also
extends to other enactments, including Pt II of the Arbitration Act 1950 (Geneva Convention
awards) and to an action on the award. See also the corresponding provision in s.104 of the
Arbitration Act 1996, which makes clear that a New York Convention award can also be enforced
under s.66 of the Arbitration Act 1996 or by an action on the award.
 Recognition and Enforcement of Certain Foreign Awards 461

immunity which that sub-section confers to an application under s.101 for leave to
enforce the award as a judgment.!*4

Procedure for summary enforcement of a New York Conven- 8-024

tion award. The Arbitration Act 1996 s.102!25 specifies the procedure for
recognising or enforcing a New York Convention award as follows:

“102. (1) A party seeking the recognition or enforcement of a New York Convention
award must produce:

(a) the duly authenticated original award or a duly certified copy of it,
and

(b) the original arbitration agreement or a duly certified copy of it.

(2) If the award or agreement is in a foreign language, the party must also
produce a translation of it certified by an official or sworn translator or by a
diplomatic or consular agent.”

Production of these documents suffices for the purpose of recognition of the

award by the court.'*° The party seeking recognition does not have to show at that
stage that the award was binding upon the party against whom recognition is
sought. Any such question is for the latter to raise at the next stage under s.103 of
(ie Nek4"

Application without notice. The application is usually made without 8-025

notice to the other party’** but the other party will be given a period of time
within which to apply to the court to have the order set aside.

Enforcement of the award as made. Subject to the threshold require- 8—026

ment of production of documents referred to immediately above, and the exhaus-
tive grounds on which enforcement of a New York Convention award may be
refused,'”? the court is neither entitled nor bound to go behind the award in
question, explore the reasoning of the arbitral tribunal or second guess its
intention. Additionally, the court seeks to ensure that an award is carried out by
making available its own domestic legal sanctions.'*° As a consequence, an order

'4'The Court of Appeal has confirmed that ‘‘proceedings which relate to the arbitration” under s.9(1)
of the State Immunity Act 1978 cover proceedings in support of the arbitration, proceedings to
challenge the award as well as proceedings to enforce the award. The exemption from immunity
conferred by that sub-section does not extend however to enforcement by execution on property:
Svenska Petroleum Exploration AB v Lithuania [2006] EWCA 1529 at [117] affirming the decision
of Gloster J. in Svenska Petroleum Exploration AB v Lithuania (No.2) [2006] 1 Lloyd’s Rep. 181.
5 Section 102 of the Arbitration Act 1996 replaced s.4 of the Arbitration Act 1975.
26 Dardana Ltd v Yukos Oil Co (No.1) EWCA Civ 543 at [10].
27 Svenska Petroleum v Lithuania (No.2) | Lloyds’ Rep. 515 at [18].
28 Svenska Petroleum and Exploration AB v Lithuania (No.2) [2006] 1 Lloyds’ Rep. 181 at 185.
Affirmed by the Court of Appeal [2006] EWCA 1529.
129 See para.8—028.
130 Norsk Hydro ASA v State Property Fund of Ukraine [2002] EWHC 2120, per Gross J. at [17].
 462 The Role of the Court after the Award

providing for enforcement of an award must follow the award. Minor slips and
changes of name may be accommodated, but an award made against a single party
cannot be enforced, for example, against two separate and distinct parties, because
that would require the court “‘to stray into the arena of the substantive reasoning
and intentions of the arbitral tribunal.’'*!

8-027 Service outside jurisdiction. Permission may be sought to serve the

arbitration claim form outside the jurisdiction of the court'*’ and the presence of
assets in the jurisdiction is not a pre-condition to the court exercising its discretion
to grant permission.'**

8—028 Opposing enforcement of a New York Convention Award. As

stated above,'** subject to production of the required documents the court has no
discretion but to recognise and enforce a New York Convention award unless the
party opposing enforcement proves one or more of the grounds specified in s.103
of the Arbitration Act 1996.'*° These grounds of refusal are exhaustive, and if
none of the grounds is present the award will be enforced.'*° Much has been
written about these grounds'*’ and a detailed analysis is beyond the scope of this
book but they will be treated summarily in this chapter.'** The onus of proving the
existence of a ground rests upon the party opposing enforcement, but that may not
be the end of the matter. The court also has a discretion to refuse enforcement
where one or more of the grounds are made out. This discretion is not to be
exercised arbitrarily however because the word “may” in s.103(2) is intended to
refer to the corresponding word in the New York Convention.'*’ In any event the
discretion is not open ended and should only be exercised where “‘despite the
original existence of one or more of the listed circumstances, the right to rely on
them had been lost by, for example, another agreement or estoppel’’, or where
there are circumstances “which might on some recognisable legal principles affect
the prima facie right to have an award set aside arising in cases listed in
s.103(2)”.'° In Svenska Petroleum Exploration AB v Lithuania (No.1), the claim-
ant (responding to an application to strike out its application for recognition of an
award) was able to satisfy the court that it should exercise this discretion. The

'S! Norsk Hydro, supra at [18], where an order and judgment enforcing an award were set aside.
"2 CPR r.62.18(4). This provision will apply whether the application is made to the High Court or to
a County Court: see CCR, Ord.48C, CPR r.16 and para.8-191.
"5 Rosseel NV v Oriental Commercial & Shipping Co (UK) Lid {1991] 2 Lloyd’s Rep. 625.
'54 See para.8—024.
'® Section 103 of the Arbitration Act 1996 replaced s.5 of the Arbitration Act 1975.
'86 Section 103(1) of the Arbitration Act 1996 replaced s.5(1) of the Arbitration Act 1975; Rosseel NV
v Oriental Commercial & Shipping Co (UK) Ltd {1991] 2 Lloyd’s Rep. 625.
7 The reader is referred for example to Dr A J van den Berg, The New York Arbitration Convention
of 1958 (Kluwer) and the updated commentary provided in the Arbitration Year Books.
"88 Challenges to and appeals against an award are however dealt with fully later at paras 8-051 e1
Seq.
'° Ecuador v Occidental [2006] 2 W.L.R. 70 at 101 following Dardana v Yukos, ibid. at 333.
"® Dardana Ltd v Yukos Oil Co (No.1) [2003] 2 Lloyds’ Rep 326, per Mance L.J. quoted with approval
in Svenska Petroleum Exploration AB v Lithuania (No.1) [2005] 1 Lloyd’s Rep. 515 at [19] and in
Kanoria v Guinness [2006] EWCA Ciy 222 at [25].
 Recognition and Enforcement of Certain Foreign Awards 463

respondent state, which would otherwise have been able to prove that it was not
a party to the agreement to arbitrate (and hence falling within s.103(2)(b)) had
asked the tribunal to determine jurisdiction, had fought and lost that issue before
the tribunal and then had participated in the merits stage of the arbitration
without objecting or challenging the award on jurisdiction before the courts at the
seat.'"' In this way, although s.73 of the 1996 Act'*? is not incorporated into
ss.101—103, it is likely that the courts will approach the exercise of discretion
under s.103(2) with the concept of the loss ofa right to object firmly in mind.'**
However, as the Court of Appeal noted when affirming a subsequent decision in
the same litigation, there can be no issue estoppel arising simply from the fact that
the respondent failed to challenge the award before the court at the seat of
arbitration.'**

Nationality irrelevant. The New York Convention contains no nationality 8-029

condition (unlike the Geneva Convention of 1927). So, whilst the New York
Convention was primarily intended to facilitate the enforcement of awards against
foreign parties, where an award is made abroad between parties of the same
nationality, the New York Convention will also be available to a party seeking to
enforce against assets of the other party in other convention countries. Therefore,
a party’s nationality would of itself be irrelevant to the consideration of any
ground for refusing enforcement under s.103(2) or (3) of the Act.'*°

Incapacity. The court may refuse to enforce a New York Convention award 8-030
upon proof by the party opposing enforcement that “‘a party to the arbitration
agreement was (under the law applicable to him) under some incapacity”’.'*° That
ground has been held to extend to someone who was so seriously ill that it was
impossible for him to instruct a lawyer to present his defence.'*” Usually, it will be
the incapacity of the party opposing the enforcement, but that will not always be
the case.'*8 The law of incorporation of a corporate party, which will often not be
English law, may, for example prevent a party from entering into an arbitration
agreement. '*?

41 72005] 1 Lloyd’s Rep. 515, at [22], [27].

2 See paras 8-065 and 8-110 below.
83 Svenska Petroleum Exploration AB v Lithuania (No.1) [2005] 1 Lloyd’s Rep. 515 at [26].
4 Svenska Petroleum Exploration AB v Lithuania [2006] EWCA 1529 at [104], affirming the decision
of Gloster J. in Svenska Petroleum Exploration AB v Lithuania (No.2) {2006] 1 Lloyd’s Rep. 181.
45 [PCO (Nigeria) Ltd v Nigerian National Petroleum Corp [2005] 2 Lloyd’s Rep. 326, at [16]. See also
C v D [2007] EWHC 1541.
'46 Section 103(2)(a) of the Arbitration Act 1996. See paras 3-004 et seq. for incapacity under English
law.
47 Kanoria v Guinness [2006] EWCA Civ 222 at [18] recording the decision of the judge at first
instance. The party in question was suffering from a serious form of cancer.
'48 4 claimant under some incapacity could conceivably obtain an award and seek to enforce it against
a respondent who did not participate in the arbitration but pleaded the claimant’s incapacity in
opposition to enforcement proceedings.
149 This occurred in Continental Enterprises Ltd v Shandong [2005] EWHC 92 (Comm) although the
decision did not concern a New York Convention award. The incapacity of corporate entities
bedevils international arbitration. See paras 3-003 et seg. on capacity of parties to an arbitration
agreement under English law.
 464 The Role of the Court after the Award

In order to oppose enforcement on this ground the party concerned must prove
the incapacity to the satisfaction of the court. Expert evidence of any relevant
foreign law may be required.

8-031 Invalidity and illegality. The validity of the arbitration agreement is

fundamental to arbitration, and the enforcement of an award can be opposed if
“the arbitration agreement was not valid under the law to which the parties
subjected it'°° or, failing any indication thereon, under the law of the country
where the award was made’’.'*' It is important to realise that this ground for
opposing enforcement of the award relates to the validity of the arbitration
agreement and not the validity of any underlying contract. The doctrine of
separabilty which is enacted by the Arbitration Act 1996! will, unless the parties
have agreed otherwise, treat the arbitration agreement as a distinct agreement
from the rest of the contract for the purposes of determining its validity.'*
Nevertheless, illegality of the main contract can affect the enforceability of an
arbitration award even under the New York Convention.'**

8-032 The Westacre Case. Westacre Investment Inc v Jugoimport-SPDR Ltd pro-
ceeded on the basis that the arbitral tribunal had jurisdiction to decide whether the
underlying contract was immoral and a nullity because of an alleged agreement to
purchase personal influence and to pay bribes. The award, based on Swiss law and
made in Geneva, concluded that the arbitration agreement and the underlying
contract were valid, and an appeal to the Swiss Federal Tribunal on grounds of
public policy was dismissed.
On hearing an application to set aside permission to enforce the award in
England, the judge at first instance'*? summarised the effect of the English law
authorities is as follows:

(i) Where it is alleged that an underlying contract is illegal and void and that
an arbitration award in respect of it is thereby unenforceable, the primary
question is whether the determination of the particular illegality alleged
fell within the jurisdiction of the arbitrators.

(ii) There is no general rule that, where an underlying contract is illegal at

common law or by reason of an English statute, an arbitration agreement,
which is ancillary to that contract, is incapable of conferring jurisdiction
on arbitrators to determine disputes arising within the scope of the
agreement, including disputes as to whether illegality renders the contract
unenforceable.

'°'The law chosen expressly or implicitly to govern the arbitration agreement and the underlying
contract may be different. See paras 2-087 et seq.
ST Arbitration Act 1996, s.103(2)(b).
' Section 7 of the Arbitration Act 1996: see para.2—008.
'3 See paras 2-011 e¢ seg. for a discussion on this subject.
"+ Westacre Investement Inc v Jugoimpor-SPDR Ltd [1999] 2 Lloyd’s Rep. 65, CA.
5 Westacre Investments v Jugoimport—S PDR [1998] 3 W.L.R. 770 at 794.
 Recognition and Enforcement of Certain Foreign Awards 465

(11) Whether such an agreement to arbitrate is capable of conferring such

jurisdiction depends on whether the nature of the illegality is such that, in
the case of statutory illegality, the statute has the effect of impeaching that
agreement as well as the underlying contract, and, in the case of illegality
at common law, public policy requires that disputes about the underlying
contract should not be referred to arbitration.

(iv) When, at the stage of enforcement of an award, it is necessary for the court
to determine whether the arbitrators had jurisdiction in respect of disputes
relating to the underlying contract, the court must consider the nature of
the disputes in question. If the issue before the arbitrators was whether
money was due under a contract which was indisputably illegal at common
law, an award in favour of the claimant would not be enforced for it would
be contrary to public policy for the court to enforce an award that ignored
palpable and indisputable illegality.'°° If, however, there was an issue
before the arbitrator whether the underlying contract was illegal and void,
the court would first have to consider whether, having regard to the nature
of the illegality alleged, it was consistent with the public policy which
would, if illegality were established, impeach the validity of the underlying
contract, that the determination of the issue of illegality should be left to
arbitration. If it was not consistent, the arbitrators would be held to have
no jurisdiction to determine that issue.

(v) If the court concluded that the arbitration agreement conferred jurisdic-
tion to determine whether the underlying contract was illegal and by the
award the arbitrators determined that it was not illegal, prima facie the
court would enforce the resulting award.

(vi) If the party against whom the award was made then sought to challenge
enforcement of the award on the grounds that'*’ the contract was indeed
illegal, the enforcing court would have to consider whether the public
policy against the enforcement of illegal contracts outweighed the counter-
vailing public policy in support of the finality of awards in general and of
awards in respect of the same issue in particular.

By a majority the Court of Appeal upheld the decision of the court at first
instance that refused to set aside permission to enforce the New York Convention
award. The court also refused to set aside another New York Convention award,
where the arbitrator had found that there was no bribery or corrupt practice,
although public officers were lobbied in breach of a statutory provision.'**

156 This minor alteration in what Colman J. said in Westacre was suggested by the Court of Appeal in
Soleimany v Soleimany [1998] 3 W.L.R. 811 at 826.
'57 In Westacre, Colman J. included the words “‘on the basis offacts not placed before the arbitrators”,
but these have been deleted from the passage quoted above because in Soleimany v Soleimany, ibid.
the Court of Appeal said that in an appropriate case the court may inquire, as it did in Soleimany,
into an issue of illegality even if the arbitrator found that there was no illegality (at 826).
8 OTV v Hilmarton [1999] 2 Lloyd’s Rep. 222.
 466 The Role of the Court after the Award

8-033 Application to awards wherever made. The approach of the English

court, as summarised above, to the enforcement of an award where there is an issue
of illegality has been applied in relation to both awards made in England and
abroad. In Soleimany v Soleimany,'*’ the arbitrator found that money was due
under a contract whose object involved smuggling items out of another country
illegally. The award was made in England, and permission was granted to enforce
the award summarily under the predecessor to s.66 of the Arbitration Act 1996.
However, the Court of Appeal set aside the permission to enforce because the
award referred on its face to an illegal object which the English court viewed as
contrary to public policy.’

8-034 Due process/Natural justice. If the party opposing the award can prove
that “he was not given proper notice of the appointment of the arbitrator or of the
arbitration proceedings or was otherwise unable to present his case”’, that would
be a ground for opposing a New York Convention award.'*' There is no definition
in the Act of “proper notice”'®* which may vary depending, for example, on the
applicable law, but in the exercise of its discretion the court will need to be
persuaded that the complaint is not only a failure to comply with some notice
requirement but that the party opposing enforcement really did not learn of the
appointment of the arbitrator'®’ or of the arbitration proceedings.'°*

8-035 Inability to present case. A party who received notice but who never-
theless claims that he was unable to present his case to the arbitral tribunal will
have to state in his opposing witness statement exactly how he was prevented from
presenting his case. This section will therefore normally cover the case where the
procedure adopted has been operated in a manner contrary to natural justice.’
This may include not only being prevented from putting his own case to the
tribunal but also not having an opportunity to deal with that of his opponent. In
Trvani v Irvani,'®° the Court of Appeal quashed a declaration that an award was
valid and binding on the parties. On the face of the award, the Court of Appeal
found that certain material findings were either unreasoned or suggested that the
arbitrator had taken account of evidence that was not available to one ofthe parties.
The court also found that the party concerned had not been invited to comment

15971998] 3 W.L.R. 811.

169 Soleimany v Soleimany [1998] 3 W.L.R. 811 at 828. See also para.8—044.
"6! Section 103(2)(c) of the Arbitration Act 1996. See also para.5—042. In Kanoria v Guinness [2006]
EWCA Ciy 222, the Court of Appeal declined to enforce the award on this ground.
te Section 80 of the Arbitration Act 1996 contains provisions and enabling legislation for notice
requirements in respect of legal proceedings only.
'e3 “The arbitrator” in this context would include one or more members of the arbitral tribunal and
include an ‘‘umpire”’.
‘et By participating subsequently in the proceedings the party may waive the irregularity.
'° This is consistent with the general duty of the tribunal stated in s.33(1)(a) of the Arbitration Act
1996, although that section applies to arbitrations whose seat is in England. Minmetals Germany v
Ferco Steel {1999| C.L.C. 647 above, per Colman J. at [326], approved by the Court of Appeal in
Kanoria v Guinness [2006] EWCA Civ 222.
66 12000] 1 Lioyd’s Rep. 412 at 426.
 Recognition and Enforcement of Certain Foreign Awards 467

on an investigation into the company in issue, nor was it clear from the award on
what basis a claim was rejected. In the absence of an investigation by the judge into
these matters, the Court of Appeal refused to enforce the award. In a similar and
also exceptional case, Kanoria v Guinness,'°? the Court of Appeal refused to
enforce an award where the party in question did not have notice of the allegation
of fraud, which was the basis on which the arbitrator decided to make an award
against him: “It seems to me quite clear on the natural wording of this clause that
a party to an arbitration is unable to present his case if he is never informed of the
case that he is called upon to meet.’’!°*

Denial of justice needed. It would not however be sufficient for a party to 8036
say that his time for oral argument was limited if he was given an opportunity to
supplement that argument with written submissions either before or after the
hearing.'®? Nor would the refusal of a replacement arbitrator to allow a complete
re-hearing where the parties had not required the taking of new evidence.'”? The
tribunal’s conduct would have to be a denial ofjustice for the court to refuse to
enforce an award on this ground.'7!

Tribunal’s jurisdiction. Enforcement of the award may also be opposed if 8-037

it “deals with a difference not contemplated by or not falling within the terms of
the submission to arbitration or contains decisions on matters beyond the scope of
the submission to arbitration”,'’* although the court may distinguish between
differences falling within and outside the ambit!” of the arbitration agreement.
This ground for opposition is akin to challenging the award of the tribunal as
to its substantive jurisdiction,'” * a subject which will be addressed later in this
= chapter,'”° and although dealt with in separate sections of the Act '7© the approach

'67 [2006] EWCA Civ 222.

168 ner Lord Phillips L.CJ., at [22].
‘69 Some procedures do not contemplate long oral hearings. Further, questions to witnesses may have
to be directed through the tribunal rather than via cross-examination. See Minmetals Germany v
Ferco Steel [1999] C.L.C. 647 for difficulties encountered with an inquisitorial system, but where
challenges to the award failed. See also para.5—045.
170 OTV v Hilmarton [1999] 2 Lloyd’s Rep. 222 at 226. The extent to which hearings need to be held
anew following the replacement of an arbitrator are often set out in the applicable arbitral rules.
71 Tt is doubtful whether every serious irregularity mentioned in s.68 of the Arbitration Act 1996
would suffice to justify refusal to enforce a New York Convention award (e.g. an uncertainty or
ambiguity as to the effect of the award).
'72 Section 103(2)(d) of the Arbitration Act 1996.
'73 Section 103(4) of the Arbitration Act 1996.
'74 Section 67 of the Arbitration Act 1996. This ground ofchallenge is only available when the seat of
arbitration is in England and Wales or Northern Ireland, which would not be the case if it were a
New York Convention award. See Metal Distributors (UK) Ltd v ZCCM Investment Holdings Ple
[2005] 2 Lloyd’s Rep. 37, a challenge to an award under s.67, where the overlap with s.103(2)(d)
appears to be recognised, at [18].
5 See para.8—054.
176 Section 67 (substantive jurisdiction challenge) and s.103(2)(d) of the Arbitration Act 1996.
 468 The Role of the Court after the Award

of the court to the applications will be similar.'”’ Both rest on the premise that the
tribunal derives its competence or jurisdiction from the agreement by which the
parties agreed to submit their disputes to arbitration and an award which exceeds
the scope of that agreement will not be allowed:to stand.'”*

8—038 Procedure or composition of the tribunal is contrary to the

agreement of the parties or the law of the place of arbitra-
tion. The court may also refuse to enforce a New York Convention award upon
proof “‘that the composition of the arbitral tribunal or the arbitral procedure was
not in accordance with the agreement of the parties or, failing such agreement,
with the law of the country in which the arbitration took place”.'”” There are two
parts to this ground for opposition. The first relates to the composition of the
tribunal. Where, for example, the parties agreed that their disputes should be
submitted to three arbitrators and a sole arbitrator appointed by one party
proceeded to determine the dispute, the other party would have a ground to object
to the enforcement of any award made by that arbitrator.'*° Opposition to enforce-
ment on this ground would be likely to succeed if the party opposing enforcement
did not take part in the arbitration. Where however he took part in the arbitration
without objecting to the appointment of a sole arbitrator the court would be
unlikely to exercise its discretion in his favour but would instead enforce the
award.

8-039 Adverse effect required. The second ground for opposition rests on the
departure from a procedure agreed by the parties, or failing their agreement, the
procedural law of the place where the arbitration took place.'*! In order to
persuade the court not to enforce the award on this ground, the procedure adopted
by the tribunal would not only have to be materially different from that which had
been agreed but would also have to affect adversely the objecting party’s ability to
present his case to the tribunal or address that of the other party. If he continued
to take part in the proceedings, despite the different procedure, the court would
need to be persuaded that he did not, or could not,'*? waive his right to
object.'*8

'7 Although not bound to do so by s.103, the court is likely to consider, for example, whether the
applicant should forfeit his right to object to the tribunal exceeding its jurisdiction.
8 Pirtek (UK) Ltd v Deanswood Wood Ltd [2005] 2 Lloyds’ Rep. 728, a decision based on s.67 of the
Act. See paras 2-071 ef seq. for a discussion as to the scope of the arbitration agreement.
'79 Section 103(2)(e) of the Arbitration Act 1996.
80 Save where the appointment is pursuant to s.17 of the Arbitration Act 1996. See para.4—037.
'"! There may be some mandatory provisions concerning procedures for arbitrations conducted in a
particular place.
'®* Tt 1s possible that under some law a particular procedural requirement is mandatory and cannot be
waived.
In Minmetals Germany v Ferco Steel [1999] C.L.C. 647 the court decided that the applicant had
waived its right to object to the continuing omission of the arbitrators to disclose an award as
required by the rules of arbitration. See para.8—110.
 Recognition and Enforcement of Certain Foreign Awards 469

Not yet binding, set aside or suspended. Upon proof “that the award 8-040
has not yet become binding on the parties, or has been set aside or suspended by
a competent authority of the country in which, or under the law of which, it was
made’’,'** the court may refuse to enforce a New York Convention award. If the
arbitration agreement requires another step to be taken,'*> the award may not
becorne binding on the parties until that step has been taken. Unless and until that
event has occurred the court will not enforce the award.

Order of the competent authority. Where the relevant court has made 8—041
an order setting aside the award, the English court will usually, but not invariably,
recognise that order and decline to enforce the award. The ‘competent authority”
will almost invariably be the relevant court at the seat of the arbitration rather than
the country under whose law it was made.'*® Where the competent authority
suspends the binding effect of an award, the English court may dismiss the
application for enforcement as premature or it may adjourn the application until
the suspension is lifted.'*’ For the purpose of this ground a suspension must have
occurred as a result of a decision of a competent authority and not by operation
of law.'** The subsection is not triggered automatically by a challenge brought
before the relevant court in that country, not least because s.103(5), which allows
enforcement proceedings to be stayed whilst a challenge is pending elsewhere,
would be “‘otiose, or at least curious”’.'*°

Application to set aside or suspend is pending. Section 103(5) 8-042

achieves a compromise between not allowing enforcement to be frustrated simply
by making a challenge at the seat of the arbitration, and by not pre-empting
pending challenge proceedings by the rapid enforcement of the award.'”? The
court “‘may, if it considers it proper, adjourn the decision on the recognition or
enforcement of the award”’.'”' In exercising its discretion the court will, without
prejudging the matter, consider the strength of a number of factors pertaining to

'S4 Section 103(2)(f) of the Arbitration Act 1996.

'85 For example, the arbitration agreement or the law which governs it, provides that an award shall not
become binding unless and until it is confirmed by a judgment of the local court.
186 See C v D [2007] EWHC 1541 on the inter-relationship between the curial and governing law with
respect to review of awards. Where English law is the procedural law and it is the English court from
which enforcement under the New York Convention is sought, under the Arbitration Act 1996, the
court retains its supervisory jurisdiction over the arbitration. This is notwithstanding s.101(1) of the
Arbitration Act 1996 which requires a New York Convention award to be recognised as binding:
Hiscox v Outhwaite [1992] 1 A.C. 562.
187 An adjournment will only be granted if the suspension is likely to be short-lived. Section 103(5) of
the Arbitration Act 1996 permits an adjournment when an application to set aside an award or
suspend its enforcement has been made to the competent authority.
188 White Knight ISA v Nu-Swifi: decision of Clarke J. on July 14, 1995. Suspension by operation of
law may however fall under s.103(5) of the Arbitration Act 1996.
189 [PCO (Nigeria) Ltd v Nigerian National Petroleum Corp (2005] 2 Lloyd’s Rep. 326.
19 TPCO (Nigeria) Ltd v Nigerian National Petroleum Corp [2005] 2 Lloyd’s Rep. 326.
'91 Section 103(5) of the Arbitration Act 1996 which replaced s.5(3) of the Arbitration Act 1975.
 470 The Role ofthe Court after the Award

the application to the competent authority and may adjourn only on terms that
security is given by the party resisting enforcement of the award.'°*

8-043 Non-arbitrable. Enforcement of a New York Convention award may also be

opposed if the award is “in respect of a matter which is not capable of settlement
by arbitration’, i.e. the subject of the dispute is non-arbitrable.'?* Although this
ground has not yet come before the English courts for decision, it 1s apparent from
the admissibility of competition or anti-trust issues to arbitration'”* that the courts
will construe this ground narrowly. Nevertheless, English law does recognise that
there are matters which cannot be decided by means of arbitration'”? and there
have been decisions elsewhere that have recognised this ground.'”°

8-044 Contrary to public policy. A further ground for refusing to enforce an

award is that “it would be contrary to public policy to recognise or enforce the
award”’.!°” This ground, which is the source of much debate and potentially broad
application in some jurisdictions is, as far as the English courts are concerned,
confined to the public policy of England (as the country in which enforcement is
sought) in maintaining the fair and orderly administration of justice.'?* Its applica-
tion must be approached with “‘extreme caution”’; it “‘was not intended to furnish
an open-ended escape route for refusing enforcement of New York Convention
awards’’.!??
Although there are strong public policy considerations in favour of enforcing
awards,*”° in Soleimany v Soleimany”®' the Court of Appeal refused on this ground
(i.e. for reasons of public policy) to enforce an award made in England that
referred on its face to the illegal object of the matrix contract. However, opposition
to the enforcement of a New York Convention award on this ground failed in
Westacre v Jugoimport?’’ where the arbitral tribunal found that the underlying
contract was valid.

Soleh Boneh International Ltd v The Government of the Republic of Uganda and Another [1993] 2
Lloyd’s Rep. 208. In JPCO supra Gross J. set out a list of considerations likely to be relevant to the
court’s consideration, at [15] and [16]. For the security that may be ordered see para.8—046
below.
5 Section 103(3) of the Arbitration Act which replaces s.5(3) of the Arbitration Act 1975. See also
paras 1-033 et seq. above.
“ET Plus SA v Welter [2006] 1 Lloyds’ Rep 251, per Gross J. at 264 in respect of an application to
stay court proceedings.
5 Custody of children is one example.
196 See para.1—036.
"7 Section 103(3) of the Arbitration Act 1996. See also s.68(2)(g) of the Act.
TPCO Nigeria Ltd 0 Nigerian National Petroleum Corp, 2 Lloyds’ Rep 326 at [24]. An application to
set aside on these grounds was refused at |24].
IPCO Nigeria Lid v Nigerian National Petroleum Corp, 2 Lloyds’ Rep 326 at [13]. See Minmetals
Germany v Ferco Steel |1999| C.L.C. 647 at 661 where the court considered certain relevant
considerations for determining whether such a ground is made out.
2 Tongyuan v Uni-clan (January 19, 2001) Moore-Bick J.
70171998] 3 W.L.R. 811.
*° [1998] 3 W.L.R. 770, CA. See also OTV v Hilmarton [1999] 2 Lloyd’s Rep. 222 and para.8-016.
 Recognition and Enforcement of Certain Foreign Awards 47]

Immunity’. Although not mentioned in the Arbitration Act 1996 or the 8-045
New York Convention a party may be immune from enforcement proceedings.
The defence of immunity is usually raised by sovereign States,?°* but it may also
be available to other parties who do not participate in the arbitration proceed-
ings.”°°> Immunity may however be waived.?°°
Awards against States under investment treaty arbitrations are, subject to usual
considerations of sovereign immunity, enforceable under the New York Conven-
tion. Indeed, some investment treaties specifically contemplate enforcement of
non-ICSID awards under the New York Conyention, although this is not a
necessary pre-condition to enforcement of any award under the New York Con-
vention.7°”

Security. The court may “on the application of the party claiming recognition 8-046
or enforcement of the award order the other party to give suitable security”’.*°* On
the question of security, both in terms of amount and whether it should be given
at all, the court will consider both the strength of any argument that the award is
invalid and the effect if enforcement is delayed by an adjournment.” In Yukos Oil
v Dardana Ltd*'° the Court of Appeal decided that it was not an appropriate case
to order security. The merits lent only modest support to such an application and
no need was shown for any security during the adjournment of the enforcement
proceedings. In JPCO (Nigeria) Ltd v Nigerian National Petroleum Corp the court
ordered a stay of enforcement pending the resolution of challenge proceedings at
the seat of the arbitration, Nigeria, upon payment of security and the sums
indisputably due under the award.?"! In Gater Assets Ltd v Nak Naftogaz Ukrai-
niy,”'* Field J. ordered payment of security on the basis that a prima facie case of
fraud in procuring the award had been made out. The Court of Appeal however,
allowed the claimant’s appeal by a majority. The court was prepared to assume
(albeit not decide) that there is technical jurisdiction to order security for costs
against an award creditor seeking to enforce an award but considered that the
courts should be “‘reluctant” as a matter of principle, to order security for costs in
such circumstances save in an exceptional case.7!* The court found that the

203 The doctrine of sovereign immunity is beyond the scope of this work and the reader is referred to
The Law of State Immunity by Hazel Fox, 2002.
204 See, for example, Svenska Petroleum and Exploration AB v Lithuania (No.2) [2006] 1 Lloyds? Rep.
181.
205 See para.3-036. See also AIG Capital Partners v The Republic of Kazakhstan and Another [2005]
EWHC 2239 for an unsuccessful attempt to execute under an ICSID award against funds benefi-
cially owned by the State’s Central bank.
206 Kor example, as a result of the State Immunity Act 1978.
207 Ecuador v Occidental Exploration & Production Co [2006] 2 W.L.R. 70.
208 Section 103(5) of the Arbitration Act 1996 which replaced s.5(5) of the Arbitration Act 1975.
209 Soleh Boneh International Ltd and Another v Government of the Republic of Uganda and National
Housing Corp [1993] 2 Lloyd’s Rep. 208, CA. Cited with approval in /PCO, at [15].
210 [2003] 2 Lloyds’ Rep. 326. The Court of Appeal reversed the decision of the judge at first instance
who ordered security of US $2.5 million. See also /PCO supra at 335.
211 [2005] 2 Lloyd’s Rep. 326.
712 [2007] 1 Lloyd’s Rep. 522.
212a Gater Assets Ltd v Nak Naffogaz Ukrainiy [2007] EWHC 725, per Lord Justice Rix at [75].
 472 The Role of the Court after the Award

ordering of security for costs was wrong in principle in this case as to do so would
not be just.7!°

8-047 Enforcement of Geneva Convention awards. Part II of the Arbitra-

tion Act 1950?! contains provisions for the enforcement of certain awards’'* made
pursuant to an agreement to arbitrate to which the Protocol set out in the first
Schedule to that Act applies.*!° In order for those provisions to apply the place of
arbitration and the parties to the arbitration?'® must be subject to a jurisdiction
which has been recognised?!’ as having reciprocal provisions pursuant to the
Geneva Convention. 718 The Geneva Convention has been almost entirely over-
shadowed by the New York Convention. FNS)
Awards covered by Pt II of the Arbitration Act 1950 are enforceable in Eng-
land’*° either summarily”! or by action on the award. They will be treated “as
binding for all purposes on persons as between whom [the award] was made, and
may accordingly be relied on by any of those persons by way of defence, set off or
otherwise in any legal proceedings in England... ”.?’* The conditions for
obtaining enforcement of the award under these provisions’”* are specified in s.37
of the Arbitration Act 1950 and the evidence required is specified in the following
section.””*

8-048 Enforcement by registration of ICSID Convention awards.

The Arbitration (International Investment Disputes) Act 1966 makes provision for
the recognition and enforcement of awards rendered pursuant to the ICSID

*12> To impose a security for costs order regime on an award creditor who sought enforcement under
s.101 of the 1996 Act would be to impose substantially more onerous conditions than in the case of
a domestic award under s.66 of the 1996 Act (where an award debtor would not be entitled to
security for costs) and this would be in breach of Art.111 of the Convention. See Gater Assets Ltd
v Nak Naffogaz Ukrainiy [2007] EWCA Civ 988, per Lord Justice Rix at [80] and [81].
*13 This part of the Arbitration Act 1950 is saved by the Arbitration Act 1996, s.99.
*14 These awards are described as “foreign awards” in Pt II of the Arbitration Act 1950.
*!° The Protocol on arbitration clauses signed on September 24, 1923 which is referred to in the
Geneva Convention. See para.6—040.
1° Dalnia Cement Ltd v National Bank of Pakistan [1974] Lloyd’s Rep. 98.
*17'The recognition is made by Order in Council under s.35 of the Arbitration Act 1950.
*18 The Convention on the Execution of Foreign Arbitration Awards signed at Geneva on September
ZO O2 Te
*™ Many countries have acceded to both conventions (e.g. Austria, Belgium, German and Switzerland)
and enforcement will usually be sought under the New York Convention because it contains fewer
restrictions: see ss.100—103 of the Arbitration Act 1996 and paras 8-020 et seq. above.
*20 Section 36(1) of the Arbitration Act 1950. Similar words appear in s.101(1) of the Arbitration Act
1996 in respect of New York Convention awards.
**! An application may be made under s.66 of the Arbitration Act 1996, which replaced s.26 of the
Arbitration Act 1950 which is referred to in s.36(1) of the 1950 Act: see para.8—003.
222 Section 36(1) of the Arbitration Act 1950.
°° Enforcement of a “foreign award” pursuant to Pt II of the Arbitration Act 1950 is subject to the
conditions specified in s.37 of that Act. Contrast the reversal of the burden of proof which appears
in s.103 of the Arbitration Act 1996 in respect of New York Convention awards.
4 Section 38 of the Arbitration Act 1950.
 Recognition and Enforcement of Certain Foreign Awards 473

Convention.*”° That Convention provides for the settlement??° by the Inter-

national Centre for Settlement of Investments Disputes??? of investment dis-
putes*** between Contracting States and nationals of other Contracting
Statesi22?

Application for registration and its effect. The Act of 1966 provides 8-049
that a person’*® seeking recognition or enforcement of an award made under the
Washington Convention may register the award in the High Court “subject to
proof of the prescribed matters**' and to the other provisions of this Act’’.°? An
application to have such an award registered must be made in accordance with the
CPR Pt 8 procedure’*’ supported by a witness statement?** which must state,
among other things, whether enforcement of the award has been or might be
stayed under the Convention.*** The effect of registration in accordance with the
Act of 1966 is to give the award “‘the same force and effect for the purposes of
execution as if it had been a judgment of the High Court given when the award
was rendered pursuant to the Convention and entered on the date of registration
under this Act.’’?*° An application to stay execution of an award registered under
the 1966 Act may be made and a stay of execution granted by the court if
enforcement of the award is likely to be stayed pursuant to the Convention.**”
Apart from registration and an application to stay execution, no recourse to the

225 The Convention on the Settlement of Investment Disputes between States and Nationals of Other
States which was opened for signature in Washington on March 18, 1965. See para.6—038.
226 The provisions of the Arbitration Act 1996 do not apply to ‘“‘proceedings pursuant to the [ICSID]
Convention’’, although an action in breach of an arbitration agreement to which the ICSID
Conyention applies may be stayed. The Lord Chancellor also has power to extend certain provision
of the Arbitration Act 1996 to arbitration proceedings conducted under the ICSID Conven-
tion—see s.3 of the 1966 Act as amended by Sch.3 to the Arbitration Act 1996.
227 This centre, referred to briefly in English as ICSID, was established under the auspices of the World
Bank. Its headquarters are in Washington DC, USA.
228 The jurisdiction of ICSID is specified in Art.25 of the Washington Convention.
229 The UK is a Contracting State and has extended the application of the 1966 Act to several other
territories—see SIs 1967/159 and 1967/249.
230 “Person” here may mean a Contracting State that seeks to enforce an award against a national of
the UK.
231 CPR r.62.21(2) provides for the application of specified provisions of CPR r.74 with modifications
suitable for an award in respect of the prescribed matters, which include a copy of the award
certified pursuant to the Convention.
232 Section 1(2) of the Arbitration (International Investment Disputes) Act 1966, as amended by the
Arbitration Act 1996, Sch.3, para.24.
222) GPRer 620213)!
234 The witness statement must comply with CPR r.74, and exhibit a copy of the award certified
pursuant to the Convention.
235 CPR 1.62.21(4).
236 Section 2(1) of the Arbitration (International Investment Disputes) Act 1966. The subsection goes
on to say that proceedings may be taken on the award so far as it relates to pecuniary obligations as
if the award was a judgment of the High Court. In A/G Capital Partners v The Republic of
Kazakhstan and Another [2005] EWHC 2239, proceedings relating to execution against certain
assets of the State followed an order which was made under s.1 of the Act of 1966 to enforce an
Award made under the 1992 USA-Kazakhstan bilateral investment treaty as a judgment of the
court. The case concerns whether the judgment could be enforced against accounts in which the
State’s central bank held a beneficial interest.
237) GPR. Oleh):
 474 The Role of the Court after the Award

English court is possible under the Arbitration Act in respect of ICSID arbitra-
tion.*°* The so-called direct enforceability of ICSID awards is often cited as a
reason why a disgruntled investor would chose to submit their disputes to
arbitration under the ICSID Convention rather than to arbitration under another
set of arbitral rules which would lead to an award enforceable under the New York
Convention, the argument being that New York Convention awards are more open
to challenge than ICSID awards.”*”

8—050 Enforcement by registration of other awards made abroad.

The provisions for the registration and enforcement of the ICSID Convention also
apply to an award made pursuant to the Multilateral Investment Guarantee
Convention,**” which was enacted by the Multilateral Investment Guarantee
Agency Act 1988.
Other awards made abroad may be registered in England under Pt 1 of the
Foreign Judgments (Reciprocal Enforcement) Act 1933, provided that they have
become enforceable in the same manner as a judgment given by a court where the
award was made.”*' This means of registering and enforcing the award is different
from that where judgment is entered in terms of the award.** In the latter case the
award merges into the judgment,*** and it is the judgment that is enforced.

4. CHALLENGE OF AWARDS

8-051 Introduction. A party to an arbitration may apply to the court to challenge an

award on the grounds of serious irregularity affecting the tribunal, the proceedings
or the award,*** or that the arbitral tribunal had no substantive jurisdiction?*> over
the dispute in question.**® It is also possible to appeal against an award on a
question of law, but unlike the previous two grounds of challenge permission of
the court is needed unless all parties to the proceedings agree.”*’ The structure of
this section of the chapter is as follows:

*58 Section 3(2) of the Arbitration (International Investments Dispute) Act 1966.
*° Although beyond the scope of this work, it is generally thought to be the case that most ICSID
awards have either been paid or settled. For examples of cases in foreign courts regarding
enforcement of ICSID awards, see details of enforcement proceedings relating to awards of ICSID
tribunals in the Benvenutt & Bonfant v Congo; SOABI v Senegal (French Courts) and LETCO v
Liberia (US courts). Available at mmm.klumerarbitration.com.
* The Convention was made in Korea on October 11, 1985 and provides for arbitration of disputes
between the Agency and its members or former members arising out of that Convention.
**" CPR 1.62.20 which applies CPRs 74.1 to 74.7 and 74.9 to the award “‘as they apply in relation to
a judgment”’, subject to the modifications in CPR r.62.20(2). This assumes that the law in force in
the place where the award is made has a provision similar to that contained in ss.66 and 101 of the
Arbitration Act 1996 for enforcing awards ‘in the same manner as a judgment” given by the
court.
242
The difference is apparent from the terms of s.66(1) and (2) of the Arbitration Act 1996.
43 See para.8—007.
* Arbitration Act 1996, s.68. See paras 8-072 ef seq.
** See definition of “substantive jurisdiction” in s.82(1) of the Arbitration Act 1996.
46 Arbitration Act 1996, s.67.
47 Arbitration Act 1996, s.69. See paras 8-119 et seg.
 Challenge of Awards 475

® Section 67—substantive jurisdiction challenge.***

© Section 68—serious irregularity challenge.?*°
@ Section 69—appeal on a question of law.?>°

The grounds of challenge to an award under ss.67-69 of the 1996 Act are
available if the seat of arbitration is England and Wales.*°! Because the effect of
choice of the seat is to treat the courts of the seat as having exclusive supervisory
jurisdiction,”** when the seat is England and Wales, it will usually be inappropriate
to commence proceedings abroad which have as their object or effect the setting
aside or vacation of the English award. In C v D,’** the court granted an anti-suit
injunction to restrain threatened proceedings in New York to set aside an English
award. The court rejected an argument that the choice of New York law as the
substantive law of the contract provided grounds to commence challenge proceed-
ings elsewhere. Highlighting the practical problems which any other approach
wood give rise to, Cooke Jcommented:

‘No challenge has been made to the Partial Award in this country and it is to be regarded
as binding therefore in this jurisdiction. If proceedings were brought in New York and
the challenge was successful there, what would a third party country’s courts do when
faced with an application to enforce the award: 399254

Challenges to awards made under investment treaties. Until 8-052

recently, most applications to challenge awards arose out of contractual arbitra-
tions. However, it is now clear that applications to challenge awards can extend to
cases brought under investment treaties (provided that the seat of arbitration 1s
England). In Ecuador v Occidental Exploration & Production Co*>> the Court of
Appeal confirmed that the court does have jurisdiction to hear challenges brought
in respect of awards made under investment treaties rather than under contract.
The treaty in question, the USA/Ecuador bilateral investment treaty, provided for
arbitration under the UNCITRAL rules at a seat to be fixed by the tribunal. The
fact of the tribunal having fixed London as the seat was sufficient to trigger the
supervisory powers of the court over arbitral awards.*°° The Court of Appeal
considered that investment treaties create “direct rights in international law in
favour of investors either from the outset or at least (and in this event retrospectively)

248 See para.8—054.

249 See para.8—072.
250 See paras 8-119 et seq.
51 Section 2(1) of the Arbitration Act 1996.
2524 y B [2007] 1 Lloyd’s Rep. 237 at 255-256.
253 [2007] EWHC 1541. See also Noble Assurance Co and Others v Gerling-Konzern General Insurance
Co UK Branch [2007] EWHC 253.
254 Cy D [2007] EWHC 1541, per Cooke J. at [54].
255 [2006] 2 W.L.R. 70.
256 Similar proceedings reviewing awards made by tribunals in investment treaty cases have been heard
by the courts in other jurisdictions, including Canada (see for example Mexico v Metalclad Corp,
May 2, 2001) and Sweden, which reviewed issues of jurisdiction in the Czech Republic v CME. See
wwm.ita.law.uvic.ca.
 476 The Role of the Court after the Award

as and when they pursue claims in one of the ways provided.”**’ As a result, the
principle of non-justiciability of transactions between foreign states as enunciated
in Buttes Gas and Oil Co v Hammer*?* would not be applied. Whilst agreements to
arbitrate which allow investors to maintain claims directly against States are found
in many investment treaties, the agreements to arbitrate themselves are not treaties
but are, the Court of Appeal suggested, likely to be subject to international law and
not to any domestic body of law.”°’ The court may review decisions of tribunals in
investment treaty cases under both ss.67 and 68. As to s.69, the English courts will
(consistent with the approach in respect of contractual awards) only consider
appeals on questions of English law which in most cases means that there would
be no scope for a challenge based on an alleged error of international law.”°° The
English court does not have jurisdiction to review awards of tribunals deciding
cases under investment treaties sitting under the ICSID Convention. Section 3(2)
of the Arbitration (International Investment Disputes) Act 1966 provides for the
settlement of such disputes to the exclusion of domestic proceedings. Nor, it
seems, does the English court have jurisdiction over state-to-state disputes which
may also arise under investment treaties.7°'?°

8-053 Challenge by a person taking no part in proceedings. On its face,

s.72 of the 1996 Act empowers the court to determine a challenge to the jurisdic-
tion of the arbitral tribunal by a person alleged to be a party to arbitral proceed-
ings, provided that the person concerned has not taken part in the arbitration
proceedings. The operation of this section is considered at paras 7-146 et seq.
For obvious reasons that person need not exhaust any available recourse to the
tribunal that made the award,”®* but he must make an application within 28 days
of being notified of the award.?°*

5. CHALLENGE OF SUBSTANTIVE JURISDICTION?”

8-054 Substantive jurisdiction challenge. A party to arbitral proceedings

may (upon notice to the other parties and to the tribunal) apply to the court
challenging any award of the arbitral tribunal as to its substantive jurisdiction,”

257 ner Mance L.J. at [18].

298 (No.3) [1982] A.C. 888.
**'The Court of Appeal did not decide this point however. See Mance L.J. at [33].
*°° A possible exception is a decision ofa tribunal in an investment treaty case applying English law by
virtue of a so-called “umbrella clause” contained in an investment treaty. See the brief comment on
this issue in Mance L.J.’s judgment at [41].
cok ee ance lens ato)
263 Section 72(2) of the Arbitration Act 1996,
°°" Bermuth Lines Ltd v High Seas Shipping Ltd {2005] EWHC 3020 at [58] where Christopher Clarke
J. confirmed that the time limit in s.70(3) applied to an application under s.72(2) of the Act.
*°'T his is a defined term. See s.82(1) of the Arbitration Act 1996 and para.4—135.
206 “Substantive jurisdiction” is defined in s.82(1) of the Arbitration Act 1996.
 Challenge of Substantive Jurisdiction 477

or for an order declaring an award made by the tribunal on the merits to be of no

effect, in whole or in part, because the tribunal did not have substantive jurisdic-
tion.**” This type of challenge arises out of s.67 of the Arbitration Act 1996, and
it should be distinguished from a party’s objection during the arbitral proceedings
that the tribunal lacks substantive jurisdiction to conduct the arbitration2® and
any determination made by the court under s.32 of the Arbitration Act 1996.7°°
The right to challenge under s.67 of the Act is only available after an award dealing
with jurisdiction has been made, but it is not subject to the same restrictions that
apply to s.32.*”° Section 67 is mandatory.?”!

Timing of an application. The challenge may have been preceded by 8-055

other action. For example, one of the parties may have objected to the tribunal’s
jurisdiction which prompted the tribunal either to defer a decision on jurisdiction
to the end of the arbitral proceedings, or to make an award early in those
proceedings that the tribunal had jurisdiction to decide the disputes referred to it.
The tribunal has a complete discretion in this respect?’? and a party cannot use
s.67 of the Act to challenge its ruling as to what course to take.””* However, once
an award is published which expressly or implicitly*’* accepts that the tribunal has
jurisdiction over the dispute, the party objecting to the tribunal’s jurisdiction may,
unless he has lost the right,*” 275 challenge the award by applying to the court under
s.67 of the Arbitration Act 1996. That section also provides a means for challeng-
ing the jurisdiction of the tribunal by someone who took no part in the arbitral
proceedings.*’°

Limited jurisdiction. An application under s.67 of the Act challenging any 8-056
award as to the arbitrator’s jurisdiction confers on the court a strictly limited
jurisdiction which is confined to determining whether an award as to jurisdiction
should be confirmed, varied or set aside in whole or in part. If and to the extent
that an award covers both jurisdiction and substantive issues as to the merits of the:
case the court has the power to declare the whole or part of that section of the

67 Section 67(1) of the Arbitration Act 1996.

68 See paras 5—060 and 7-143 et seq.
269 See paras 7—154 et seq.
27 Section 32(2) of the Arbitration Act 1996 requires the agreement of all the other parties or the
permission of the tribunal: see paras 7-156 and 7-157.
271 Section 4 of the Arbitration Act 1996 and Sch.1 to the Act.
272 ie, whether to decide his jurisdiction in an interim award or to deal with it when he makes a final
award: Arbitration Act 1996 s.31(4). See para.6—-013.
273 Kalmnefi v Glencore [2001] 2 All E.R. (Comm) 577.
274 Vee Networks Ltd v Econet Wireless [2005] 1 Lloyds’ Rep. 192 at [200].
275 The right to object that the tribunal lacks substantive jurisdiction may be lost by taking part in the
arbitration without making a timely objection: see s.73 of the Arbitration Act 1996 and
para.8—065.
276 Pursuant to s.72(2) of the Arbitration Act 1996; see para.8-053 above.
 478 The Role of the Court after the Award

award which deals with the merits to be of no effect depending on the court’s
conclusion on jurisdiction.*’”

8-057 Relationship with sections 68 and 69. There is a conceptual difference

between a challenge under s.67 and challenges under ss.68 and 69. Awards which
are challenged under ss.68 and 69 have a presumptive validity unless or until they
are set aside, whereas awards challenged. under s.67 have no such presumptive
validity: they were either made with jurisdiction or they were not.?”*

8-058 Party to proceedings. Sections 67 to 69 of the Act each refer to ‘“‘a party to
arbitral proceedings”. This is not a defined term but must mean someone who has
properly been made a party to the arbitration (i.e. somebody who is a party to the
arbitration agreement or has agreed to become a party to the reference).?”

8-059 Proper scope of the application. As with jurisdictional challenges made

to the tribunal under s.30 and determination of points of jurisdiction by the court
under s.32 of the 1996 Act, points raised under s.67 are likely to fall into essentially
three categories.

® questions as to the existence and/or validity of the arbitration agreement,

@ questions as to the proper constitution of the tribunal,?*° and
® questions as to the scope of the arbitration agreement, including questions as
to the powers available to the tribunal.

8-060 Rehearing rather than a review. A section 67 hearing is a rehearing

rather than a review: “Appeals under that section are, after all, re-hearings not a
completely fresh start as ifthere has been no previous challenge to the jurisdiction ofthe
tribunal.”’*' The court should not be put in a worse position than the arbitrator
in determining the issue but, unlike under s.68 of the 1996 Act, the court’s role
is to confirm that the tribunal reached the right answer, not simply to decide that
it was entitled to reach the decision it did.**’ If jurisdiction is to be challenged
before the court, it will usually be the case that each ground of challenge must
have been raised before the arbitrators first:

277 TSC Zestafoni v Ronly Holdings [2004] 2 Lloyds’ Rep 355. Section 30(1)(b) of the Arbitration Act
1996 which is also included in the definition of “substantive jurisdiction” by s.82(1) of the Act.
Compare with s.103(2)(e) of the Act, which contains a similar ground for refusing to recognise or
enforce a New York Conyention award: see para.8—027.
*78 Peterson Farms 0 CEM Farming Lid & Another [2004] 1 Lloyd’s Rep. 614 at [26].
2” Vowles v Aston [2005] EWHC 1459 at [21].
**° Lafarge v Newham LBC [2005] 2 Lloyds’ Rep. 577.
8! Primetrade AG v Ythan Ltd [2006] 1 Lloyd’s Rep. 457 at [62]. See also Peterson Farms Inc v0CM
Farming Lid (2004) 1 Lloyd’s Rep. 603 at [18].
**2 Peterson Farms v CEM Farming Lid & Another 2004] 1 Lloyd’s Rep. 603 at [17]-[18].
 Challenge of Substantive Jurisdiction 479

@ Aikens J. in Primetrade v Ythan stipulated that “a party objecting to jurisdic-

tion, who has decided to take part in the arbitral proceedings should bring forward
his objections in those proceedings before the arbitrators. He should not hold them
in reserve for a challenge to jurisdiction in the court’? .?*°

@ As Colman J. put it in JSC Zestafoni G Nikoladze Ferroalloy Plant v Ronly

Holdings: “Were it otherwise, the policy of the sub-section could be frustrated by
introducing at the last minute grounds of challenge not hitherto raised and thereby
potential causes of delay and disruption of the application to the prejudice ofthe
opposite party” .?**

Raising new points. If a party wishes to raise a wholly new point it must 8-061
show good reason (such as that the point could not with reasonable diligence have
been discovered at the time) why the point was not raised before the arbitrator and
it will usually have to do this by adducing evidence.*** The various references to
“objection” in s.73 have all been held to refer to the same objection and whilst the
court has resisted the temptation to lay down precise limits in the abstract, the
court will investigate whether the party is attempting to raise a new ‘‘objection”’.
The concept of objections does however appear to be construed relatively broadly;
objections do not have to be put in exactly the same way as they were put before
the arbitrators. Indeed, provided it falls within the same overall objection, a point
can be argued before the court which the arbitrators did not permit the objecting
party to take during the arbitration.**°
If raised, the courts must investigate questions relating to the existence of the
agreement to arbitrate, such as whether or not it has been repudiated.**”

Validity and scope of arbitration agreement. In relation to ques- 8-062

tions regarding the validity of the arbitration agreement, it will be necessary for
the court to determine, among other matters, disputes relating to whether or not
the arbitration clause has been incorporated by reference into the parties’
agreement.7**

283 Primetrade AG v Ythan Ltd [2006] 1 Lloyd’s Rep. 457 at [59].

284 12004] 1 Lloyd’s Rep 335 at [64].
285 For a s.67 application where evidence was clearly not limited to that which was before the tribunal,
see Kazakhstan v Istil Group Inc [2006] 1 W.L.R. 596 at [23]. The judgment in the s.67 application
is [2006] EWHC 448. The Court of Appeal refused permission to appeal from the judge’s decision,
see Kazakhstan v Istil Group Inc [2007] W.L. 1425725. The basis for Morison J.’s order as to new
evidence is not apparent from the judgments. See also Aloot Kalmneft v Glencore International AG
[2002] 1 Lloyd’s Rep. 128; Electrosteel Castings v Scan Trans Shipping & Chartering Sdn Bhd [2003]
1 Lloyd’s Rep. 190 for additional cases where new evidence has been admitted and new arguments
raised on s.67 applications. Note however that Gross J.’s classification of an arbitrator’s decision on
jurisdiction as a “provisional determination” in Electrostee! Castings 1s doubted by Aikens J. in
Primetrade at [58].
286 Primetrade AG v Ythan Ltd [2006] 1 Lloyd’s Rep. 457 at [60]-[64].
287 BEA Hotels NV v Bellway LLC [2007] W.L. 1623270. In relation to repudiatory breach of an
agreement to arbitrate, see further paras 2-111 et seq.
288 See for example Sea Trade Maritime Corp v Hellenic Mutual War Risks Association, The Athena
[2006] EWHC 2530, where this question (whether the arbitration agreement had been incorporated
into the parties’ agreement) was answered in the affirmative.
480 The Role of the Court after the Award

Set out below are certain examples of disputes relating to the scope of the
agreement to arbitrate, including questions as to the powers available to the tri-
bunal:

© The court will consider issues as to res judicata, so an award would be set
aside in circumstances where it proceeded on the basis of an inconsistent
finding on a matter which was res judicata.**”
@ The court will naturally consider the tribunal’s jurisdiction to determine
disputes arising out of claims of set-off or counterclaims made in the
arbitration. The tribunal’s jurisdiction over counterclaims depends on the
true construction of the agreement to arbitrate and not on the rules of court
in relation to counterclaims.?”°
® Where a tribunal’s decision to award damages was, in part, based on the
group of companies theory which formed no part of English law, the sub-
stantive law of the agreement, then the award would be set aside.””!
@ The court can set aside part only of the tribunal’s award if it feels that the
want of substantive jurisdiction extends to only part of the award.””
@ Where a tribunal assumes jurisdiction based on a bilateral investment treaty,
the court will as in all other cases examine whether the tribunal has decided
matters outside the scope of the instrument by which jurisdiction was
conferred on the tribunal. In such situations, the court will have to construe
the scope of the relevant treaty, which is governed by public international law
289
Kazakhstan v Istil Group Inc [2006] EWHC 448, at [75]-{83]; the French court had made findings
that a party was not a proper party to the arbitration agreement and these findings were disregarded
by the tribunal. Because of the earlier finding in relation to the loss of the right to object, this
conclusion is obiter.
290
Metal Distributors (UK) Ltd v ZCCM Investment Holdings Plc [2005] 2 Lloyd’s Rep. 37. In Vee
Networks Ltd v Econet Wireless International Ltd [2006] EWHC 1664 the court was asked to
determine whether claims for set-off arising out of a different contract to that under which the
primary claim as being made were within the agreement to arbitrate. The substantive law of the
agreement was English law and the arbitration was conducted under the UNCITRAL rules, which
provide that claims for set-off may be made (only) if arising out of the contract under which the
claim was made. In these circumstances, the court would have regard to the provisions of the
agreement to arbitrate in preference to the rules of English law, which advocates a broader approach
to set-off. The court confirmed that the claims for set-off were outside of the scope of the agreement
to arbitrate. See further para.6—016 above.
291
Peterson Farms v C&M Farming Ltd & Another [2004] 1 Lloyd’s Rep. 603. It did not matter that
the same conclusion could conceivably have been reached by a different route, the doctrine of
agency, as that was not the central basis relied upon by the tribunal, although the court did also
consider and reject the suggestion that the award could be sustained on the basis of agency. See [51],
[52], [63]-[66]. Note there are two Peterson Farms decisions, the first a decision of Tomlinson J. in
respect of an application under s.70(7) to secure sums payable in respect of an ICC award subject
to appeal under s.67 [2004] 1 Lloyd’s Rep. 614 and the second a decision of Langley J. setting aside
in part that award upon hearing the s.67 application [2004] 1 Lloyd’s Rep. 603). The award was
apparently doomed from the outset; although Tomlinson J. was charged only with the hearing of the
s.J0(7) application he was also clearly of the view that the award should be set aside, a view
subsequently shared by Langley J.: “... on the face of it, the arbitrators have applied not the
proper law of the agreement, not the curial law, not yet even some third system of law as being the
system of law applicable to the arbitration, but rather have applied a doctrine which is not, at any
rate on the face of the award, suggested to be grounded in any particular system of law’’, per
‘Tomlinson J., at [31].
292
Peterson Farms v CGM Farming Lid & Another {2004| 1 Lloyd’s Rep. 603.
 Challenge of Substantive Jurisdiction 481

and, as a treaty, its construction is governed by the rules on treaty inter-

pretation contained in the Vienna Convention on the Law of Treaties 1969.
In Ecuador v Occidental Exploration & Production Co? the Court of Appeal
considered whether the tribunal’s decision on matters of taxation fell outside
the scope of the treaty in question and decided that it did not.?°* The court
may not however consider a challenge to the jurisdiction of a tribunal if the
arbitration was conducted under the ICSID rules.?”°

Timing of the application. In order to comply with s.70(3) of the Act, the 8—063
application to the court must be brought within 28 days of the date of the award,
unless there is an available arbitral process of appeal or review in which case the
28-day period will begin to run from the date when the applicant was notified of
the result of any appeal or review on the question of the tribunal’s substantive
jurisdiction.*”° The court may however vary the period of 28 days fixed by the Act
for challenging the award under s.67.*”’ Further, although notice of the application
must be given promptly, the application may be made without notice being served
on any other party before the statutory period of 28 days expires.7”*

Exhaustion of other right.””** An application cannot be made under s.67 8-064

of the Arbitration Act 1996 if the applicant has not first exhausted any available
recourse from the tribunal to correct the award or make an additional award?”’ and
any available process of appeal or review.*”

Loss of right to object. A party who objects to the award on the ground 8-065
that the tribunal lacks substantive jurisdiction should not only act promptly, but
should also take care not to lose his right to object.°°! A party who takes part or
continues to take part in the proceedings is in a different position from someone
who takes no part in the proceedings. The latter cannot lose his right to object as
long as he acts promptly to challenge the award once it is published.*°* The former
must, however, state his objection to the tribunal’s jurisdiction “either forthwith

29312007] EWCA 656.

294 See also the earlier decision, Ecuador v Occidental Exploration & Production Co [2006] 2 W.L.R. 70,
where the Court of Appeal decided that the court does have jurisdiction to entertain applications
under s.67 in respect of challenges to awards made under bilateral investment treaties.
2° Section 3(2) Arbitration (International Investments Disputes) Act 1966. It would also be very
unusual for the seat of an ICSID arbitration to be England.
2© Section 70(3) of the Arbitration Act 1996.
297 CPR r.62.9(1). This rule applies to applications made in respect of ss.67, 68 and 69 of the Act. See
para.8—212.
2° CPR r.62.9(2). For procedure generally see para.8—178.
298a See also the cases and principles cited at para.8—109.
29 Section 70(2)(b) refers to s.57 which may possibly apply if it is unclear from the award made
whether the tribunal has exceeded its jurisdiction.
30° Section 70(2)(a) of the Arbitration Act 1996.
301 Sections 67(1) and 73 of the Arbitration Act 1996.
302 Section 72(2) of the Arbitration Act 1996 gives that person the same right of challenge as a party
to the arbitral proceedings. See para.8—053 above.
 482 The Role of the Court after the Award

or within such time as is allowed by the arbitration agreement or the tribu-

nial@ oo?
A further effect of s.73 is that usually only objections which have been taken
before the tribunal can be raised before the court on a s.67 application.** If the
applicable arbitral rules provide for two tiers of tribunals*”’ then it will usually also
be fatal to fail to object to the jurisdiction of the first instance tribunal if a party
wishes to maintain a jurisdictional objection before the higher tribunal or the
court.*°° The section also dictates in effect that if a tribunal proposes a particular
course in respect of dealing with jurisdiction and the parties do not object, no
objection whether on the basis of s.67 or otherwise can be maintained at a later
stage. Where a tribunal concluded that an earlier partial award on jurisdiction was
a nullity and no objection was taken to the tribunal’s conduct in revisiting the issue
then an objection on this basis could not be made once the final award incorporat-
ing the change to the partial award had been released to the parties.*°”

8066 The arbitral proceedings may continue pending an applica-

tion. The arbitral tribunal may continue the arbitral proceedings and even make
“a further award” while an application to the court under s.67 of the Act 1s
pending.°*°* If the challenge is to a partial award on jurisdiction, and the proceed-
ings on the merits are to continue, in most cases it would make case management
sense to stay the arbitral proceedings pending the outcome of the court challenge.
There may however be good reasons, relating to the likely strength of the challenge
to jurisdiction, timing of the challenge or conduct of one of the parties, which
would lead the tribunal to exercise their discretion to proceed with the arbitra-
tion.

8-067 Procedure and variety of orders. As noted, the challenge to an award

under s.67 of the Arbitration Act 1996 will involve a re-hearing rather than simply
a review.°”’ Even if full argument on jurisdiction has been heard by the arbitral
tribunal, the court may order a complete re-hearing with oral evidence where there
are substantial issues of fact,*'® including foreign law.*'! On an application under
s.67 of the Arbitration Act 1996, the court may confirm the award, vary it or set
aside the award in whole or in part.*!” As noted, the question for the court is not

*°5 Section 73(1) of the Arbitration Act 1996 which is incorporated by s.67(1) of the Act.
*4'This principle is discussed in detail above at para.8—061.
*° Such as for example arbitration under the Rules of the Grain and Feed Trade Association.
°° Tradigrain SA v State Trading Corp of India (2006| 1 Lloyd’s Rep. 216 at [37]-{38].
°°” Kazakhstan v Istil Group Inc 2006] EWHC 448 at [41]-[42]. Permission to appeal was refused by
the Court of Appeal, Kazakhstan v Istil Group Inc (2007) EWCA 471.
*08 Section 67(2) of the Arbitration Act 1996,
309 See para.8—060.
*' Such an order was made in Azov Shipping v Baltic Shipping [1999] 1 All E.R. 476, and having heard
evidence the court set aside the arbitrator’s order: [1999] 2 Lloyd’s Rep. 159.
*"! Astra Insurance v Sphere Drake (May 17, 2000). Steel J. upheld the arbitrator’s award that he had
jurisdiction on the basis of findings of foreign law.
* Section 67(3) of the Arbitration Act 1996. X Lid v Y Lid [2005] EWHC 3769 at [36].
 Challenge of Substantive Jurisdiction 483

whether the tribunal was entitled to reach the decision to which it came, but
whether they were right to do so.*'%

Further role of the tribunal. Where the court sets aside an award or 8-068
decides that it, or part of it, is a nullity for jurisdictional reasons, the tribunal may
make further award(s) within its jurisdiction, even where the award which has
been set aside purported to be a final award.*'* Whilst the effect of an order to set
aside an award clearly deprives that award ofall legal effect, such an order does not
mean that the entire arbitral process is thereby frustrated. No distinction is drawn
between an order setting aside an award as to jurisdiction and an order setting
aside a final award on the merits. In both cases, the arbitration may be able to carry
on or revive as necessary unless of course the sustained jurisdictional objection
relates to the identity or manner of appointment of the tribunal or validity of the
agreement to arbitrate.*!* In this regard, it does not apparently matter that there
is NO express power to remit under s.67(3) as compared with s.68(3).

Security. The court may require the applicant to provide security for the costs 8-069
of the application.*'° The court may also order that any money payable under the
award shall be brought into court or otherwise secured pending the determination
of the application.*'’? The purpose of the power is to help avoid the risk that whilst
an appeal is pending the ability of the losing party to honour the award is
diminished whether “by design or otherwise”.*'* This power is also available in
respect of applications under ss.68 and 69 (the latter of which requires leave).
Where however no leave is required, such as under ss.67 or 68, and the application
is made as of right, the court will be very slow to exercise the power to order
security.*'” It certainly cannot be used as a means of putting the winning party in
the arbitration in a better position than he would otherwise have been in, for
example, by requiring the losing party (or its backers) to put up funds which the
winner can then take if the appeal fails but to which the winner would not
otherwise have easy access. In any event, upon such an application the court will
conduct a preliminary analysis of the strength of the appeal and will be less likely
to grant the application if it believes that the challenge is well-founded.*”°

313 Electrosteel Castings Ltd v Scan Trans Shipping [2002] EWHC 1993, Gross J. at [22] confirmed in
Peterson Farms v C&M Farming (2004) EWHC 121 at [18].
314 Peterson Farms Inc v C&M Farming [2004] EWHC 121 is an example of a decision to set aside an
award only in part.
315 Hussmann (Europe) Ltd v Pharaon [2003] 1 All E.R. (Comm) 879. The Court of Appeal also decided
that there is no difference in principle between an order setting aside an award and a declaration of
no effect. Per Rix L.J., at [81].
316 Section 70(6) of the Arbitration Act 1996, which also provides that the application may be dismissed
if an order for security is not complied with. See para.8—206 for discussion.
317 Section 70(7) of the Arbitration Act 1996, which also provides that the court may direct that the
application be dismissed if such an order is not complied with. See para.8—208 for discussion.
318 DAC report, para.380.
319 Peterson Farms v C&M Farming Ltd © Another [2004] 1 Lloyd’s Rep. 614.
320 Peterson Farms v CSM Farming Ltd © Another \2004] 1 Lloyd’s Rep. 614.
 484 The Role of the Court after the Award

8-070 Insufficient reasons. If necessary,**! the court may also require the tribunal
to state the reasons for its award in sufficient detail to enable the court properly
to consider the application.*””

8-071 Appeals to Court of Appeal. Appeals from decisions of the court under
s.67 are dealt with at paras 8-115 e¢ seg. in the context of applications under s.68
of the 1996 Act, as the wording of the relevant provisions is the same for both
subsections.*?> Note however the comments of the Court of Appeal that, “The
policy of the 1996 Act does not encourage such further appeals which in general
delay the resolution of disputes by the contractual machinery of arbitration.”’.***
This policy suggests that leave to appeal a decision rejecting a challenge under s.67
will very rarely be given.

6. CHALLENGE FOR SERIOUS IRREGULARITY CAUSING

SUBSTANTIAL INJUSTICE

(a) Serious irregularity

8-072 Challenge for Serious Irregularity. An award may be challenged under

s.68 of the Arbitration Act 1996 if there has been a serious irregularity of the kind
described in s.68(2) of the Act. In these circumstances, ‘‘a party to arbitral
proceedings may (upon notice to the other parties and to the tribunal) apply to the court
challenging an award in the proceedings on the ground of serious irregularity affecting
the tribunal, the proceedings or the award’”’.**> A person who is alleged to be a party
to arbitral proceedings, but does not take part in the proceedings may also apply
to the court in respect of a serious irregularity affecting him.**° Section 68 of the
Act is mandatory,*”’ but the court will not grant the application unless it considers
that the irregularity “has caused or will cause substantial injustice to the appli-
cant’’,*** except where the tribunal is shown to be biased, when substantial
injustice will be assumed.*”? Section 68 involves what has been described as a two-

**! Even if it would be helpful to have the tribunal’s reasons, the court will not override any agreement
by the parties that reasons need not be given.
* Section 70(4) of the Arbitration Act 1996. The court may make a further order of costs resulting
from this order: see s.70(5) of the Act and para.6—031.
*23 Sections 67(4) and 68(4) of the Arbitration Act 1996.
+ Amec Civil Engineering Lid v Secretary of State for Transport [2005] 1 W.L.R. 2339, per May L.J. at
[9].
*°'The procedure for an application to the court is contained in CPR Pt 62 and the Arbitration
Practice Direction. See paras 8-178 et seq., s.68(1) of the Arbitration Act 1996.
#6 Section 72(2)(b) of the Act, which makes clear that the serious irregularity must be within the
meaning of s.68, although the duty to exhaust arbitral procedures does not apply to such a person.
See para.8—053 above.
7 Section 4 of the Arbitration Act 1996 and Sch.1 to that Act.
8 Arbitration Act 1996, s.68(2). See para.8—104 for the meaning of this phrase.
°° ASM Shipping Ltd of India v TTMI [2005| EWHC 2238 (Comm) at [39] and Norbrook Laboratories
Lid v Tank (2006) EWHC 1055 at [145].
 Challenge for Serious Irregularity 485

stage investigation, viz, (1) has there been an irregularity of at least one of the nine
kinds identified in the section**® and (2) whether the incidence of such irregularity
has caused or will cause substantial injustice.**' If the court decides that there has
not been an irregularity of that kind, there is no need to investigate the issue of
substantial injustice.**?

Overall approach of the courts. The starting point for any consideration 8-073
of the overall approach to s.68 is the decision of the House of Lords in Lesotho
Highlands.*** According to the House of Lords, s.68 is a “high threshold’. Their
Lordships relied upon the purpose of the 1996 Act which was to “‘reduce drastically
the extent of intervention of courts in the arbitral process”.*** The Court cited with
approval the DAC report, which described the section as a ‘‘/ong stop, only available
in extreme cases, where the tribunal has gone so wrong in its conduct of the arbitration
in one of the respects listed in the section that justice calls out for it to be corrected”. 335
The case law also contains numerous statements of the same type, relating to the
need to limit court intervention in cases of asserted irregularity to only the
extreme cases.**°

Excess of powers. Implementing this firm policy, the House of Lords drew 8-074
a clear distinction between whether the tribunal purported to exercise a power
which it did not have or whether it erroneously exercised a power that it did have.
Only the former could give rise to a challenge under s.68. Provided that the
tribunal is exercising a power which it does have, as opposed to one which it does
not have, it does not matter how significant the error is: no relief will be afforded
under s.68. The issue is not whether the tribunal has come to the right conclusion;
the sole issue is whether it committed a serious irregularity resulting in a sub-
Stantial injustice.

“Tt will be observed that the list of irregularities under s.68 may be divided into
those which affect the arbitral procedure and those which affect the award. But

530 Each of the irregularities are listed in para.8—070.

331 Bulfracht (Cyprus) Ltd v Boneset Shipping Co Lid (the ‘‘Pamphilos”’) [2002] 2 Lloyd's Rep. 681, per
Colman J.
332 Warborough Investment Ltd v S Robinson and Sons (Holdings) Ltd {2002| EWHC 2502.
333 [2006] 1 A.C. 221. See also Park, ‘““The Nature of Arbitral Authority: A Comment on Lesotho
Highlands”, in Arbitration Int., Vol.21, No.4.
534 Paragraphs 26-28.
335 DAC report para.280 quoted with approval in Lesotho Highlands Development Authority v. Impregho
SpA [2006] A.C. 221 and in many other decisions. See, for example, Fidelity Management SA v
Myriad International Holdings BV {2005| 2 Lloyd’s Rep. 508 at [5] but contrast the “note of
caution” against treating this section of the DAC report, para.280, as if it were the statute itself.
Bandwith Shipping Corp v Intaari [2006] EWHC 2532, at [60]{61]. See also Macpherson and
Mainwaring-Taylor, “Final and Binding? Challenges under the Arbitration Act 1996, s.68”, in
(2006) 72 Arbitration 2.
336 For a useful summary of these pronouncements see the list of cases referred to in ABB v Hochtief
Airport GmbH [2006] 1 All E.R. (Comm) 529 at [63].
 486 The Role ofthe Court after the Award

nowhere is there any hint that a failure by the tribunal to arrive at the ‘correct
decision’ could afford a ground for challenge under s.68”.°°’

8-075 Many challenges unmeritorious. Because of the high threshold, the

majority of challenges brought under this section have failed. Colman J., speaking
extra-judicially, has remarked upon, “‘the complete inability ofa very large number
of members of the legal profession in London to understand what the section means,
judging by some of the applications which are run in the Commercial Court, partic-
ularly those which seek to establish that there has been a serious irregularity on the basis
that the tribunal has not dealt on a blow-by-blow analysis with each submission in
relation to the evidence.”’*** Certain of the judgments under this section also contain
comments which make it clear that many of the challenges which are made are
weak and should never have been made. To cite just one example, “Jn my view [this
section 68 challenge] was a non-starter and had leave been required I have no doubt
that leave would have been refused.”** It is perhaps the absence of a leave require-
ment, together with other factors, which leads to so many weak challenges being
brought under this section.

8-076 Kinds of irregularity. Serious irregularity for the purposes of s.68 of the
Arbitration Act 1996 is an “irregularity of one or more of the following kinds,**°
which the court considers has caused or will cause substantial injustice to the
applicant’’.**! The requirements are substantial injustice,*** and at least one of the
irregularities listed in s.68(2) of the Act, namely:

(a) failure by the tribunal to comply with its general duty of fairness under s.33
(general duty of tribunal);

(b) the tribunal exceeding its powers (otherwise than by exceeding its sub-
stantive jurisdiction: see s.67);

(c) failure by the tribunal to conduct the proceedings in accordance with the
procedure agreed by the parties;

(d) failure by the tribunal to deal with all the issues that were put to it;

(e) any arbitral or other institution or person vested by the parties with powers
in relation to the proceedings or the award exceeding its powers;
(f) uncertainty or ambiguity as to the effect of the award;

37 Lesotho, above per Lord Steyn at 236.

*88 Colman J., Arbitration and Judges—how much interference should we tolerate? Master’s Lecture,
London, March 14, 2006.
°° Fidelity Management SA v Myriad International Holdings BV {2005] 2 Lloyd’s Rep. 508, per Morison
J. at [18]. See also Sinclair v Woods of Winchester Lid 102 Con. L.R., per Judge Peter Coulson Q.C.,
at [71], “I consider it a great pity that these two allegations were ever made”’.
“° An exhaustive list of irregularities appears in s.68(2) of the Arbitration Act 1996: see the following
paragraphs of this chapter.
*41 Section 68(2) of the Arbitration Act 1996.
* “Substantial injustice” is described in para.8—104, which reveals it to be a considerable hurdle to
a successful application under s.68.
 Challenge for Serious Irregularity 487

(g) the award being obtained by fraud or the award or the way in which is was
procured being contrary to public policy;

(h) failure to comply with the requirements as to the form of the award; or

(i) any irregularity in the conduct of the proceedings or in the award which is
admitted by the tribunal or by any arbitral or other institution or person
vested by the parties with powers in relation to the proceedings or the
award.

Each irregularity will be discussed in the following paragraphs and, with two
exceptions,*** in the order that they appear in the subsection. The subject of
substantial injustice will then be discussed.***

(1) Breach of general duty of fairness (ground a)

Overall approach. Section 33 of the Act imposes a general duty on the 8-077
tribunal to:

® act fairly and impartially as between the parties, giving each party a reason-
able opportunity of putting his case and dealing with that of his opponent,
and

© adopt procedures suitable to the circumstances of the particular case, avoid-

ing unnecessary delay or expense, so as to provide a fair means for the
resolution of the matters falling to be determined.

The tribunal is required to comply with that general duty in conducting the
arbitration proceedings, in its decisions on matters of procedure and evidence and
in the exercise of the other powers conferred on the tribunal by the parties
(expressly or implicitly).**

Permissible errors. Failure by the tribunal to comply with the duty will 8-078
amount to an irregularity.**° Whether it will be a serious enough irregularity to
justify a challenge to an award will depend on the particular irregularity and the
circumstances in which it occurred.**7 “J do not accept the proposition that simply
because the award contains an error which is unfair to a party there must have been a

343 Section 2(b) and (e) which concern excess of powers will be dealt with in two successive paras,
8-090 and 8-091, and 2(f) and (h) will be treated together in para.8—098.
34 See para.8—104.
345 See paras 5-032 et seq. for a discussion of this duty.
346 Section 68(2)(a) of the Arbitration Act 1996.
347 Bias on the part of the tribunal is an obvious example of a breach of the general duty. For a case
at the opposite end of the spectrum see Kalmneft v Glencore [2002] 1 All E.R. 76. See also paras
4-107 et seg. and 5-041.
 488 The Role of the Court after the Award

failure to comply with s.33 of the 1996 Act on the part of the tribunal and thus a serious
irregularity for the purposes of s.68(2)(a) of the Act.>**

8-079 Overlap with section 67. If it is alleged that proceedings were not validly
commenced and therefore never came to the attention of the respondent, then this
does not amount to a breach of the tribunal’s duty to give each party a reasonable
opportunity of presenting his case but would fall to be considered under s.67 as
a complaint of lack of substantive jurisdiction.*””

8—080 Issue must be “in play”’. It will not amount to a serious irregularity if the
tribunal decides the case on the basis of a point not strictly argued or pleaded by
a party; it will be enough that the issue was “‘7 play or, to use a different expression,
‘in the arena’ in the proceedings’.*°° However, if a point was not raised at all during
the proceedings, depriving a party of the opportunity to address the arbitrator on
it, and the arbitrator proceeds to base his decision on that point, ground (a) may
be triggered.*°' The threshold is a relatively low one, and the tribunal does not
need to spell out even a particularly crucial point for the parties before the end of
the oral hearing.*** It may be necessary for the court to examine the conduct of the
proceedings in some detail to ascertain whether or not a particular point was
actually “in play”. In the same way, it has also been suggested, as regards issues
of fact, that the tribunal has “‘an autonomous power to make findings of fact which
may differ from the facts which either party contended for”’. >? 353

348 Weldon Plant Ltd v The Commission for the New Towns [2001] 1 All E.R. (Comm) 264 at [27]. See
also Sinclair v Woods of Winchester Ltd [2005] 102 Con. L.R. 127 at [20] and Nemfield Construction
Lid v Tomlinson {2004) EWHC 3051.
54° Bernuth Lines Ltd v High Seas Shipping Lid (The Eastern Navigator) [2006] 1 Lloyd’s Rep. 537 at
([53]-[54].
°° ABB AG v Hochtief Airport GmbH [2006] 1 All E.R. (Comm) 529, [72], following Bulfracht
(Cyprus) Lid v Boneset Shipping Co Ltd (The Pamphilos) [2002] 2 Lloyd’s Rep. 681 at 686;
Warborough Investments Ltd v S Robinson & Sons (Holdings) Ltd [2003] 2 E.G.L.R. 149. ABB AG
v Hochtief Airport GmbH and the other cases cited in this footnote were followed in Bandmith
Shipping Corp v Intaart [2006] EWHC 2532, see [60]-{63].
bo n
Vee Networks Ltd v Econet Wireless International Ltd [2005] 1 Lloyd’s Rep. 192, where an arbitrator
decided a point of construction by reference to certain amendments to the Bermudian Companies
Act which were not addressed in the proceedings. This constituted a serious irregularity requiring
the award to be remitted to the tribunal. See also Cameroon Airlines v Transnet Ltd [2004] EWHC
1829, where the tribunal decided an issue of quantum in a way other than that which was put by
either party (although the issue was raised in the arbitration it was not raised in a way which
afforded the challenger the opportunity to respond). See further OAO Northern Shipping Company
v Remol Cadores De Marin SL [2007] EWHC 1821, where the tribunal had decided an award on the
basis of a finding as to no representation on a particular point, when at least one of the parties had
proceeded on the assumption that the point was in fact no longer an issue. These are three rare
examples of successful challenges under s.68. Contrast these decisions with that of some months
later in ABB AG v Hochtief Airport GmbH. Vee was cited in ABB, albeit not on this point: See
[62].
°°? See Bandwith Shipping Corp v Intaari [2006] EWHC 2532 at [75]. The applicants complained
unsuccessfully that the very narrow basis of the Tribunal’s decision was not made sufficiently clear
to them either in the pleadings or at the oral hearing but if it had been they would have had a good
answer to it. Christopher Clarke J. rejected these submissions, finding that the point was “put into
the arena” of the arbitration, at [60]-{63], [72].
°° London Underground Ltd v Citylink Telecommunications Ltd {2007] EWHC 1749 at [37].
 Challenge for Serious Irregularity 489

Treatment of new points. A direct refusal to hear evidence on a material 8-081

issue would be an irregularity,*°* but whether it is serious enough for the purposes
of s.68 will depend on the facts.*** Unless an inquisitorial approach is adopted,**°
the parties are entitled to assume that the tribunal will base its decision on the
evidence and argument presented by the parties.*°’ If the tribunal is minded to
decide the dispute on a completely new point, the parties must be given notice of
it to enable them to address the point, but this does not mean that every nuance
or inference which the tribunal wishes to draw needs to be put to the parties if it
differs from that which has been precisely contended for in the arbitration.

“It is of the very essence of a fair hearing that the parties should have an adequate
opportunity of dealing with any substantial criticism of their claim or defence, whether
the source ofthat criticism comes from the opposing party or the tribunal who makes the
decision. It must, however, always be a question of fact and degree, whether or not such
an opportunity has been denied.’’*>*

As noted, it is now enough if the point is “in play” or “in the arena” in the
proceedings, even if it is not precisely articulated.

Failure to consider evidence. An allegation that the arbitrators failed to 8-082

take into account a particular piece of evidence said to be relevant to an issue or
drew incorrect inferences from the evidence is not a failure to deal with an issue.*””
The assertion that the arbitrator failed to take proper account of the evidence
could, in an exceptional case, give rise to a challenge if ‘tan arbitrator genuinely
overlooked evidence that really mattered, or got the wrong end of the stick in
misunderstanding it. But there is all the difference in the world between such
cases and an arbitrator evaluating evidence but reaching factual conclusions on it
(as will happen in most arbitrations) which one party does not like”.*°° A failure
to adjourn pending receipt of further evidence was not an irregularity.*°' However,
a departure in the award without warning from the way the case was presented
without giving the eventual losing party an opportunity to address the way the

4 Willams v Wallis & Cox [1914] 2 K.B. 478, a decision based on “misconduct”, but whose facts
could support a claim that the tribunal ‘‘failed to comply with s.33”: see s.68(2)(a) of the Arbitration
Act 1996.
355 In Hussman (Europe) Ltd v Ahmed Pharaon (April 16, 2002) Mr Brindle Q.C. found that there was
no serious irregularity when the tribunal declined to accept further evidence ofa foreign law, even
though the reasons given by the tribunal were not good ones.
356 Subject to the parties’ agreement, the tribunal may itself “take initiative in ascertaining the facts and
the law” (s.34(2)(g)): see para.5—099.
357 This will usually be limited to the evidence and argument presented by the time the hearing 1s
concluded but may extend to post-hearing submissions made prior to the making of the award.
358 Anmie Fox and Others v PG Wellfair Ltd [1981] 2 Lloyd’s Rep. 514 at 520. Although that decision
was given before the Arbitration Act 1996, it has been cited with approval by the Court of Appeal
in Checkpoint Ltd v Strathclyde Pension Fund {2003] EWCA Civ 84 in the context of an application
under this section of the Act. See also The ‘‘Vimeira” [1984] 2 Lloyd’s Rep. 66; Fairclough Building
Ltd v Vale of Belvoir Superstore Lid [1990] 56 B.L.R. 74; and Sanghi v TH [2000] 1 Lloyd’s Rep.
480 at 484. See para.5—061.
359 World Trade Corp Ltd v C Czarnikow Sugar Ltd {2005] 1 Lloyd’s Rep. 422, [45].
360 Arduina Holdings BV v Celtic Resources Holdings Ple [2006| EWHC 3155, [46].
361 Shuttari v Solicitors’ Indemnity Fund [20004] EWHC 1537.
 490 The Role of the Court afier the Award

tribunal was now thinking was found to be a serious irregularity.*°* The court also
set aside an award on this ground when the tribunal reverted to a previous case
advanced by the claimant, without giving notice to the respondent, and missed a
central point of the respondent’s submission.*°?

8-083 Procedural decisions. Subject to agreements between the parties, the

tribunal is the master of its own procedure. It is therefore rare, although not
impossible, for a challenge to be sustained under this ground on the basis of the
tribunal’s choice of procedure, including for example relating to the decision of a
tribunal to refuse a disclosure application. In ABB AG v Hochtief Airport GmbH
the court rejected a challenge to the tribunal’s decision to require only one party
to the negotiations to disclose documents relevant to those negotiations, in respect
of which there were allegations of lack of good faith. The decision was based on
the IBA Rules on the Taking of Evidence which were adopted in that arbitration
and which allow the tribunal to exclude any document from production on the
ground of lack of sufficient relevance.*°** There is nothing in the decision to
suggest that a decision to refuse a disclosure application could not in exceptional
cases constitute a serious irregularity, although any such finding would need to be
reconciled with the principle that under the 1996 Act disclosure is a matter for the
discretion of the arbitrators.*°°
The court will, to a certain extent, be prepared to extrapolate reasoning from
the award where that is necessary to make complete sense of the decision.*®

8-084 No need to adopt court procedures. English court procedures do not

have to be (and perhaps should not be) mimicked in arbitration. For example,
failure to allow counsel for the claimant to reply orally to closing submissions will
not be a serious irregularity. Where counsel were both allowed a single closing
speech, contrary to English court procedure but in accordance with established
international arbitral procedure, this was ‘“‘well within the scope of what he [the
arbitrator] was empowered to do”’.°*°”

8-085 Errors of fact. An error of fact is not an irregularity, “The weight to be

attached to each piece of evidence was entirely a matter for the arbitrator. . . It is
not permissible to use ss.33 and 68 as a device to mount an appeal against the

°°? Cameroon Airlines v Transnet [2004] EWHC 1829 [108], although note at [109] the acceptance that
“it cannot be said by Camair in this case that the point was never raised’. See also OAO Northern
Shipping Co v Remol Cadores De Marin SL {2007] EWHC 1821 and Omnibridge Consulting Ltd v
Clearsprings [2004] EWHC 2276 at [43]-{48].
*°8 Ascot Commodities v Olam International |2002] C.L.C. 277.
*©4 12006) 1 All E.R. (Comm) 529 at [84]-[85].
365 See para.5—133.
soo“. . it is not necessary that the award should contain express findings of fact, provided that the
necessary findings may be ‘spelled out’”’, per Gloster J. in Bottiglieri di Navigazione SpA v Cosco
Qingdao Ocean Shipping Co (The Bunga Saga Lima) [2005] EWHC 244; [2005] 2 Lloyd’s Rep. 1 at
[22].
°°” Margulead Ltd v Exide Technologies [2004] EWHC 1019, [33].
 Challenge for Serious Irregularity 49]

decision of an arbitrator on a question of fact” *°* nor is s.68 “intended to provide

a backdoor route to appeals on fact’’.*° The fact that the tribunal’s decision on the
critical point of fact may, in the view of the court, be “debatable” does not provide
the basis of a successful challenge under this head.5”° It would not be an irregu-
larity if an arbitrator ignored a concession made by an expert witness as to a
particular point and decided to reach a different conclusion on the point.>7!

Failure to manage the process. A failure to manage the arbitration with 8-086
the result that there was no coherent identification of the issues and a significant
increased cost was incurred was held to amount to a breach of the s.33 duty and
therefore a serious irregularity.*”?

Emergence of new evidence. A challenge under this ground will not be 8—087
made out if fresh evidence relied upon merely tends to throw doubt upon the
veracity of awitness whose evidence was admitted by the tribunal. To succeed on
this ground, a party will need to show that the award was procured by the fraud
of the defendant or otherwise in way which was contrary to public policy (ground
(g) below).374

Bias as a species of serious irregularity. As to a failure to observe 8-088

principles of natural justice,*”* actual or apparent bias on the part of the tribunal
would, if established, amount to a breach of the general duty and a serious
irregularity under s.68(2)(a). There is considerable overlap between a challenge to
an award on this ground as a result of actual or apparent bias and an application
under s.24 to remove the arbitrator. In the right circumstances, the two applica-
tions may be brought together. However, the applicant may face the objection that
le waived his right to object to the arbitrator under s.73 where he knew of the
actual or apparent bias at an earlier stage in the proceedings and did not apply
promptly to remove the arbitrator under s.24, but rather waited until the award

368 Claire & Co Ltd v Thames Water Utilities Ltd [2005] B.L.R. 366, at [45]. Cited with approval in
Bandwith Shipping Corp v Intaari [2006] EWHC 2532 at [77].
369 Arduina Holdings BV v Celtic Resources Holdings Ple |2006] EWHC 3155, [45].
379 Bandwith Shipping Corp v Intaari [2006] EWHC 2532, [77].
371 Claire & Co Ltd v Thames Water Utilities Ltd, where it was acceptable for an arbitrator to ignore
an alleged concession made by an expert as to the appropriate profit margin to be applied.
372 RO Pillar & Sons v Edwards (January 11, 2001) H.H. Judge Thornton Q.C. Decisions based on the
previous law are of very little value because of the higher threshold in s.68 of the Arbitration Act
1996. See comments of H.H. Judge Bowsher Q.C. in Groundshire v0VHE Construction [2001] B.L.R.
395 at 400. See also paras 5-053 and 5—054.
373 See the interesting discussion of this issue in Thyssen Canada Ltd v Mariana Maritime SA [2005]
1 Lloyd’s Rep. 640 at [14]; see also the earlier decisions, Scales v East London Waterworks (1835) 1
Hodges 91 4 L.J.C.P. 195 and Re Glasgom, etc., Ry. and London & North Western Ry. (1888) 52 J.P.
PANS).
374 What is stated in the first part of s.33 quoted above summarises the principles of natural justice. See
paras 5-038 et seg. for a fuller discussion of this subject. In particular see paras 5-053 and
5-054.
 492 The Role ofthe Court after the Award

had been issued before relying upon actual or apparent bias as a basis for
challenging the award under s.68.*”

(11) Excess of powers of the arbitrator or institution (grounds b and e)

8-089 Overall approach. Ground b is described in s.68 of the Act*”° as “the tribunal
exceeding its powers, otherwise than by exceeding its substantive jurisdiction”
.*”’ The
excess of powers referred to in this section is of a different nature to the lack of
substantive jurisdiction referred to in s.67 of the Act, although in practice there
may be some overlap and an application may be made under both ss.67 and 68. For
the purposes of s.68, excess of powers has to be distinguished from an incorrect
exercise of powers. Thus, an alleged error of the arbitral tribunal in interpreting
the underlying contract*’* cannot be an excess of powers so as to give the court
power to intervene,*”’ but is rather an error of law, which can only be challenged
under s.69 of the Act if the right of appeal has not been excluded.**° Jurisdiction
goes to the tribunal’s mandate whereas an excess of powers need not.**' Where the
gravaman of the complaint is that the tribunal lacked substantive jurisdiction,
which includes whether the tribunal has been properly constituted and what
matters have been submitted to arbitration in accordance with the arbitration
agreement, the proper course is to apply under s.67 and not s.68.**?

8-090 Excess of powers. The House of Lords in Lesotho Highlands** found that
even if the tribunal had made an error of law in making its award in any currency
under s.48(4) of the Act, such error did not amount to an excess of powers under
s.68(2)(b). The distinction is to be drawn between “‘whether the tribunal purported
to exercise a power which it did not have or whether it erroneously exercised a power
that it did have. If it 1s merely a case of erroneous exercise of power vesting in the
tribunal no excess of power under s.68(2)(b) is involved.”*** In other words, the
mandatory provision of s.68(2)(b) cannot be used as a backdoor route for appealing
errors of law, which appeals under s.69 are often excluded by clear the effect of
institutional rules and in any event require leave of the court. Furthermore, by

7° ASM Shipping Lid of India v TTMI Lid of England [2006] 1 Lloyd’s Rep. 375; Sumukan Ltd v
Commonwealth Secretariat [2007] EWHC 188. See paras 7-127 and 8-110.
476 Section 68(2)(b) of the Arbitration Act 1996.
*”7 Excess of substantive jurisdiction can be challenged under s.67 of the Arbitration Act 1996. See
paras 8-054 et seq.
378
An error in the interpretaion of provisions of the Arbitration Act, 1996, for example, would be
treated similarly.
* The power is given by s.68 of the Arbitration Act 1996, for among others, the serious irregularity
identified in s.68(2)(b).
48° Lesotho Highlands, ibid., HL. In that case, the right of appeal was excluded.
*81 See para.4—069 for a list of those powers.
382 National Bank v El-Abdali [2005] 1 Lioyd’s Rep. 541.
S22 (2006S GaZ2,
84 Lesotho Highlands, per Lord Steyn at [24]. Lord Phillips dissented, taking a different view in
particular on the scope of s.48(4) relating to the permissible currency of awards, finding that the
arbitrators had purported to exercise a discretionary power which they did not in fact enjoy,
amounting to an irregularity within ground (b).
 Challenge for Serious Irregularity 493

analogy with Article V(1)(c) of the New York Convention which deals with
“matters beyond the scope of the submission to arbitration” ground (b) should
never lead to the re-examination of the merits of the award.**°
To give an example of an error which may trigger ground (b) the tribunal may
exceed its powers by appointing an expert to inspect the site of a property in
dispute where such power is excluded in the arbitration agreement.**°

Excess of powers by arbitral institution. As to excess of powers by an 8-091

arbitral institution (ground e), an arbitration agreement will often provide for the
appointment of the tribunal by a third party, usually an arbitral institution.**’ That
institution would exceed its power of appointment, for example, by appointing a
tribunal of three persons where the arbitration agreement specified a sole arbi-
trator. That excess of powers would be an irregularity.*** There is a close affinity
between grounds (b) and (e), the former relating to excess of powers by the
tribunal, and the latter an excess of powers by the institution. The subsection is
not limited to improper exercise of a power of appointment. It could extend, for
example, to excessive scrutiny of an award.**’

(111) Breach of agreed procedures (ground c)

Approach of the court. The Arbitration Act 1996 gives the tribunal power 8-092
to decide ‘“‘all procedural and evidential matters, subject to the right of the parties to
agree any matter”.*°? The court will be reluctant to interfere with the tribunal’s
power to determine the proper procedure for a particular arbitration in the
absence of a clear agreement to the contrary. The parties may all, for example,
require a hearing.*”' It would then be an irregularity if an award were made
without a hearing because the tribunal considered that the documents alone were
sufficient for the purpose.*”*

385 Paragraph 30, citing Parsons & Whittemore Overseas Co Inc v Societe Generale de I’Industrie du Papier
(RAKTA) (1974) 508 F. 2d 969 (2nd Circuit).
386 This example was given in Lesotho at [29]. The tribunal has power to appoint an expert for that
purpose under s.37 of the Arbitration Act 1996 subject to the parties’ agreement. When the
arbitration agreement excludes that power, express agreement of the parties would be necessary.
387 Section 68(2)(e) of the Act refers to “any arbitral or other institution or person vested by the parties
with powers in relation to the proceedings or the award exceeding its powers”’. This covers both
institutions like the ICC or LCIA and individual appointing authorities, such as the President of the
Law Society.
388 This example was given in Lesotho at [29]. Section 68(2)(e) of the Arbitration Act 1996.
389 The ICC Rules of Arbitration authorise limited scrutiny of the tribunal’s draft award by the ICC
Court of Arbitration (Art.27). Interference with the substance of an award could be an irregularity
within s.68(2)(e) of the Act.
39 Section 34(1) of the Arbitration Act 1996.
3°! See para.5—196.
32 Section 68(2)(c) of the Arbitration Act 1996 (failure by the tribunal to conduct the proceedings in
accordance with the procedure agreed by the parties).
 494 The Role ofthe Court after the Award

(iv) Failure to deal with all the issues put to it (ground d)

8-093 Approach of the court. There is substantial overlap between this ground
(d) and ground (a) and the commentary to both grounds should be read together.
Failure by the arbitral tribunal to deal with “all the issues that were put to it”
constitutes a procedural irregularity.*’? Construing the quoted words purposely
the Court of Appeal has said that they do not mean each and every point in
dispute. Rather they mean those issues which the tribunal has to resolve.*”*
However, the ‘‘issue” referred to in s.68(2)(d) must be an important or funda-
mental issue, for only a failure to deal with such could be capable of causing
substantial injustice. Further, the issue must have been put to the tribunal. There
is also a difference between a failure to deal with an issue and a failure to provide
sufficient reasons for a decision on that issue.*”° In the latter case the court may
upon application*”* require the tribunal to amplify the reasons for the award.*?”

8-094 Need to decide essential issues. The tribunal only has to decide matters
relevant to its ultimate decision. Ground (d) is therefore designed to cover those
issues the determination of which is essential to a decision on the claims or specific
defences raised. An irregularity will only result where the tribunal has not dealt at
all with a critical aspect of the case of a party. In other words, it “‘zs concerned mith
a failure... where the tribunal has not dealt at all with the case ofa party so that
substantial injustice has resulted... In the former instance the tribunal has not done
what it was asked to do, namely to give the parties a decision on all issues necessary to
resolve the dispute or disputes (which does not of course mean a decision on all the issues
that were ventilated but only those required for the award)”.*°* The tribunal certainly
does not have to deal with every point which was raised in the proceedings. If an
award expresses no conclusion at all as to a specific claim or defence then that is
a clear failure to deal with the issue. The ground will also be triggered where the
decision cannot be justified as a key issue has not been decided which is crucial to
the result. It is certainly the case however that an award does not have to set out
each step by which a conclusion is reached. The courts shy away from conducting
a narrow textual analysis in an attempt to pick holes in the reasoning. Once a party
is reduced to alleging that particular sub-issues have not been properly explained
in the award then the challenge is very likely to fail.*’? If because of an incorrect
conclusion as to the applicable law an arbitrator fails to consider an issue which

3 See s.68(2)(d) of the Arbitration Act 1996. See Margulead v Exide [2004] EWHC 1019.
4 Checkpoint Lid v Strathclyde Pension Fund |2003| EWCA Civ 84, per Ward L.J. at [48]-[49].
°° Fidelity Management SA v Myriad International Holdings BV [2005] 2 Lloyd’s Rep. 508 at 510.
6 World Trade Corp v0 Czarnikow Sugar [2005] 1 Lloyd’s Rep. 422 which was considered in Fidelity
above at 510.
°7 Petroships v Petec Trading (the “Petro Trader’) [2001] 2 Lloyd’s Rep. 348.
8 Weldon Plant v Commission for the New Towns {2001] 1 All E.R. (Comm) 264 at 279; World Trade
Corp Lid v C Czarmkow Sugar Lid, at |16}.
” Fidelity Management SA v Myriad International Holdings BV [2005] 2 Lloyd’s Rep. 508; Protech
Projects Construction (Pty) Ltd v A-Kharafi & Sons [2005] 2 Lloyd’s Rep. 779, at [34].
 Challenge for Serious Irregularity 495

was put to him (because he felt that the issue was moot) then such a challenge is
an error of law and should be brought, if at all, under s.69.*°

Unclear reasoning. Ground (d) is also not triggered just because the 8-095
tribunal’s reasoning is compressed, confusing or unsatisfactory. *°! If the court can
deduce from the award and the other available materials before it, which may
include extracts from evidence and the transcript of hearings, the thrust of the
tribunal’s reasoning then no irregularity will be found.*”* Equally, the court should
bear in mind that when considering awards produced by non-lawyer arbitrators,
the court should “‘/ook at the substance of such findings, rather than their form, and
that one should approach a reading of the award in a fair, and not in an unduly literal
way.’*°> On occasion the court has been prepared to embark on a detailed
detective process, examining much of the evidence which was before the tribunal,
in order to deduce the tribunals’ reasoning and to uphold the award where at all
possible to do so.*°* Whether this sort of wide ranging investigation was contem-
plated by the “long stop” language of the DAC report is doubtful.
Deficiency of reasons is also the subject of a specific remedy under s.70(4). As
the Act is not presumed to have created two co-extensive remedies for deficiencies
of reasons, one of which is a specific remedy for a specific problem (directing the
tribunal to provide further reasons) and the other being a general remedy to set
aside or remit awards which contain deficient reasons, this ground (d) is, as noted,
reserved for only the extreme cases.*”°

Reasons separate from award. On occasion, particularly in maritime 8-096

arbitrations, the parties agree to receive reasons for the award separately from the
award itself and may even agree not to make use of those reasons in any proceed-
ings relating to the award. However, such an agreement has been found to be
contrary to public policy in so far as it purports to restrict the court’s access to the
reasons. The court will look at restricted reasons for the purpose of considering a
s.68 challenge; failure to look at the reasons would risk leaving a substantial
injustice un-remedied.*°°

400 Protech Projects Construction (Pty) Lid v Al-Kharafi & Sons {2005] EWHC 2165; [2005] 2 Lloyd’s
Rep. 779, at [34].
401 4BB AG v Hochtief Airport GmbH [2006] 1 All E.R. (Comm) 529, [79], [80], [87].
402 For a contrary view, namely that s.68 does not justify “launching a detailed inquiry into the manner
in which thetribunal considered the various issues” or an examination of the tribunal’s evaluation
of the evidence, see Weldon Plant v The Commission for the New Towns [2001] 1 All E.R. 264. Cited
in World Trade Corp Ltd v C Czarnikow Sugar Ltd, at [16].
403 Bottigheri di Navigazione SpA v Cosco Qingdao Ocean Shipping Co (The Bunga Saga Lima) 2 Lloyd’s
Rep. 1, [22].
404 4BB AG v Hochtief Airport GmbH [2006] 1 All E.R. (Comm) 529.
405 Fidelity Management SA v Myriad International Holdings BV [2005] 2 Lloyd’s Rep. 508, citing World
Trade Corp Ltd v C Czarnikow Sugar Ltd.
406 See for example the LMAA Small Claims Procedure. Jame Shipping Ltd v Easy Navigation Ltd (The
Easy Rider) [2004] 2 Lloyd’s Rep. 626.
 496 The Role ofthe Court after the Award

8-097 Reserving issues for future award. It will also be sufficient for the
tribunal to deal with an issue or a whole claim by reserving the matter for a further
award. The tribunal has discretion to do this by virtue of s.47.*°7

or formal deficiency
(v) Uncertainty and ambiguity of award
(grounds f and h)

8-098 Approach of the court. An award may be challenged where it is ambiguous

or its effect is uncertain, although in almost all cases of ambiguity the tribunal
should first have been asked to correct the ambiguity under s.57(3)(a) or other
agreed process of review.t?® The award may also be challenged if it does not
comply with a particular requirement as to form.*°? The Arbitration Act 1996
provides that the parties are free to agree on the form of an award,*'® but that
otherwise the award is to be in writing signed by all the arbitrators or by those
assenting to the award, it must state the seat of the arbitration and the date when
the award is made, and it must contain reasons unless it is an agreed award*!! or
the parties have agreed to dispense with reasons.*!” A failure to give reasons for the
decision on costs is an irregularity as to form within the terms of s.68(2)(h) and
could form the basis of an application that the court should exercise its power to
order reasons to be given under s.70(4).*"°

(vi) Fraud or contrary to public policy (ground g)

8-099 Approach of the court. This irregularity contemplates a situation where

either the award was obtained by fraud*'* or the way it was procured was contrary
to public policy.*'® Although the second part of the sub-section, ‘tan award
procured contrary to public policy” is wider on its face than the first part, ‘‘an
award obtained by fraud” the courts have in fact interpreted the twin concepts

7 Sea Trade Maritime Corp v Hellenic Mutual War Risks Association (Bermuda) Ltd {2006] EWHC
SiMe).
18 Section 68(2)(f) of the Arbitration Act 1996. See also s.70(2) and para.8-109 below.
40 Section 68(2)(h) of the Arbitration Act 1996. See paras 6-044 et seq.
" The parties agreement about formal requirement will usually, but not always, be expressed in the
arbitration agreement (e.g. the award will be written in a particular language). There may be
specific, formal requirements for enforcement abroad.
ANT
An agreed award may record a settlement reached by the parties: see s.51 of the Arbitration Act
1996 and para.6—024.
*!? Section 52 of the Arbitration Act 1996: see para.6—029.
"'S Norbrook Labratories Lid v Tank [2006] EWHC 1055 at [127]. The applicant did not take the
point.
"Fraud implies some act of deceit perpetrated on the tribunal (e.g. providing the tribunal with
falsified certificates of ownership of property claimed), or on the other party (i.e. if the tribunal was
party to the fraud). The latter case occurred in Arab National Bank v El Abdali [2005] 1 Lloyd’s
Rep. 541 and an injunction was granted.
*! Section 68(2)(g) of the Arbitration Act 1996.
 Challenge for Serious Irregularity 497

consistently.*'® The fact of fraud or procuration contrary to public policy must be

established before there is any question of remission to the tribunal.*!? The award
must be obtained by the fraud of a party to the arbitration or those privy to that
party, not for example by the fraud of third party witnesses.*!* The term “‘public
policy” is capable of covering a wide variety of matters, other than fraud. How
illegality, for example, can affect the enforceability of an award has already been
discussed.*'” Bribery or some other form of corruption would offend public
policy,*”° and so may unconscionable conduct in certain circumstances.**! The fact
that witnesses can be shown to have lied when giving evidence does not of itself
mean that any award subsequently produced by a tribunal will trigger this ground.
It will need to be shown that the defendant can fairly be blamed for the adducing
of the evidence and the deception of the tribunal**? and that the evidence of
deception, which could not have been produced at trial with reasonable diligence,
could be expected to be decisive at a re-hearing.***

Evidence emerging after publication of award. It sometime hap- 8-100

pens that documents come to light after an award has been issued which cast doubt
on the foundations on which the award has been based. Unlike the 1950 Arbitra-
tion Act which contained a power to remit an award in cases where new evidence
had subsequently come to light after the award, the 1996 Act gives the court no
such power. The court will thus now adopt a restrictive attitude in relation to fresh
evidence that comes to light after an award has been made.*** It does however
amount to a fraud for the purpose of this sub-section if a party, through its
directors, employees or lawyers, deliberately conceals a document which it knew
should have been disclosed in the arbitration and the award will be “obtained by
fraud” if the consequence of the deliberate concealment is an award in favour of
the concealing party.*?° Even if a fraud or action contrary to public policy can be

416 Elektrim v Vivendi Universal and Others [2007] EWHC 11, [87]. See also Profilati Itaha SrL v Paine
Webber [2001] 1 All E.R. (Comm) 1065 where an allegation of procuration contrary to public policy
was found to require some form of reprehensible or unconscionable conduct by a party that has
contributed in a substantial way to obtaining an award in his favour.
"7 Thyssen Canada v Manon [2005] 1 Lloyds’ Rep 640 at 644.
"8 Blektrim v Vivendi Universal and Others [2007] EWHC 11, [80]; Thyssen Canada Lid v Mariana
Maritime SA [2005] EWHC 219, [2005] 1 Lloyd’s Rep. 640 at 650 where there was perjured
testimony of witnesses.
#19 See discussion at para.8—031.
20 See Westacre Investments v Jugoimport SPRD [1999] 1 All E.R. (Comm) 865. Applied in DDT Trucks
of North America Lid »vDDT Holdings Ltd (2007] EWHC 1542, [22].
#21 This last possibility was discussed in Cuflet Chartering v Caroussel Shipping [2001] 1 All E.R.
(Comm) 398, although the misconduct in this case was found to be inadvertent.
422 Thyssen Canada Ltd v Mariana Maritime SA [2005] 1 Lloyd’s Rep. 640 at [14]. See also Profilati
Italia Sr.L. v Paine Webber [2001] 1 Lloyd’s Rep. 715 at 718 per Moore-Bick J.: “where the
successful party is said to have procured the award in a way which is contrary to public policy, it
will normally be necessary to satisfy the court that some form of reprehensible or unconscionable
conduct on his part has contributed in a substantial way to obtaining an award in his favour”.
3 DDT Trucks of North America Ltd v DDT Holdings Ltd {2007| EWHC 1542.
#24 The tribunal cannot reopen the case in light of fresh evidence: see para.6-166 above.
425 Elektrim v Vivendi Universal and Others [2007] EWHC 11, at [81]-[82], where an application based
on alleged deliberate concealment of an important memorandum was dismissed. It could not be
shown that the document had been deliberately concealed and even if that could have been shown
it would not have made any difference to the terms of the award.
 498 The Role of the Court after the Award

shown the applicant will then have to establish that it made a real difference to the
outcome. An innocent or inadvertent failure to disclose material documents will
not suffice especially if no substantial injustice results from the non-disclosure.*”°
Inadvertently misleading the other party however carelessly*’’ also does not fall
within this ground.

8-101 Illegality/public policy. Further public policy will not be engaged merely
because an arbitration agreement is illegal under the law of one party’s dom-
icile:*7*
The court may refuse to recognise or enforce a New York Convention award if
to do so would be contrary to public policy.*””? The courts will apply similar
concepts of public policy when enforcing awards and when considering s.68
challenges under this head.

8-102 Trial of issues by court. The court itself must establish the fraud or
procuration contrary to public policy. This will entail the court holding a trial for
this purpose in certain situations, although not apparently in all cases.*°° Even
though the tribunal may be best placed to try these factual issues the court cannot
remit the matter to the tribunal for this purpose, because it has no power to do so
unless both serious irregularity and substantial injustice are properly made
out!

(vi) Admitted irregularity (ground 1)

8-103 Need for significant irregularity. A party to the arbitral proceedings

may also challenge an award where the tribunal or an arbitral institution**? has
admitted ‘any irregularity in the conduct of the proceedings or in the award”’.*°5
The challenge can cite “any” irregularity; it need not be one of those mentioned
in s.68 of the Act although as substantial injustice also has to be shown it must be
a significant irregularity. An irregularity might be admitted, for example, where
the tribunal subsequently recognises that it erred in an earlier partial award.***

© Protech Projects Construction (Pty) Ltd v Al-Kharafi & Sons [2005] 2 Liloyd’s Rep. 779, [29]-[30].
This case is a good example of how the concepts of serious irregularity and substantial injustice are
sometimes conflated, and if the court cannot see that the latter has resulted it will not find the
former. See also Profilati v Paine Webber [2001] 1 All E.R. (Comm) 1065.
”7 Cuflet Chartering v Caroussel Shipping {2001] 1 All E.R. (Comm) 398.
V8 TSC Zestafoni v Ronly Holdings [2004] 2 Lloyds’ Rep. 355 at [75].
% Section 103(3) of the Arbitration Act 1996, see para.8—044.
8° In Elektrim v Vivendi Universal and Others [2007] EWHC 11 no oral evidence was adduced in
support of the allegation of fraud. See [7].
*®! Thyssen Canada Lid v, Mariana Maritime SA [2005] 1 Lloyd’s Rep. 640, at [16].
*° The words actually used are “‘any arbitral or other institution or person vested by the parties with
powers in relation to the proceedings or the award’’, s.68(2)(i) of the Arbitration Act 1996.
433 Section 68(2)(i) of the Arbitration Act 1996.
“+ As in Kasakstan v Ishl Group Inc [2006] EWHC 448 where the tribunal subsequently discovered that
a party had ceased to exist at the time of its partial award.
 Challenge for Serious Irregularity 499

(b) Substantial injustice

Meaning of substantial injustice. This term*> is not defined in the 8-104

Arbitration Act 1996, but a good idea of the meaning that it will be given by the
court on an application made under s.68 of the Act can be gleaned from the DAC
report in which it was said:

“The test of substantial injustice is intended to be applied by way of support for

the arbitral process, not by way of interference with that process. Thus it is only
in those cases where it can be said that what happened is so far removed from what
could reasonably be expected of the arbitral process that we would expect the court
to take action. The test is not what would have happened had the matter been
litigated. To apply such a test would be to ignore the fact that the parties have
agreed to arbitrate, not litigate. Having chosen arbitration, the parties cannot
validly complain of substantial injustice unless what has happened simply cannot
on any view be defended as an acceptable consequence of that choice. In short,
[section] 68 is really designed as a long stop, only available in extreme cases when
the tribunal has gone so wrong in its conduct of the arbitration that justice calls
out for it to be corrected”’.**°

The DAC report goes on to give as an example cases under the previous law
when the court remitted awards to an arbitral. tribunal because the lawyers acting
for one party failed, or decided not to, put a particular point to the tribunal.**’ The
clear inference from the report is that the court should not treat that kind of case
as giving rise to substantial injustice and falling within the ambit of s.68 of the
Act.

Burden on applicant. The burden is squarely on the applicant who invokes 8-105
“the “exceptional remedy” under s.68 to present findings of fact which establish
substantial injustice. It cannot be simply assumed, other than in cases of actual or
apparent bias.*** Put simply, the question will be whether the applicant may have
suffered unduly as a result if the irregularity. This can often be assessed by looking
at the benefits, or windfalls, if any, which the other party receives as a result of the
irregularity.**?

Possibility of alternative outcome. The approach as laid down by 8-106

Colman J. in Vee Networks Ltd v Econet Wireless International Lid**° namely, not to

435 The same term is used in s.24(1)(d) of the Arbitration Act 1996, also without definition. See
para.7—116. ;
436 Paragraph 280 of the DAC report, quoted with approval on numerous occasions subsequently. See
para.8—073. il
437 This happened in Jndia Oil Corp v Coastal (Bermuda) Ltd 1990] 2 Lloyd’s Rep. 407 and King v
Thomas McKenna {1991} 1 All E.R. 653.
438 Lesotho Highlands at [35]. See ASM Shipping Ltd of India v TTMI Ltd of England [2006] 1 Lloyd’s
Rep. 375 for the bias exception. ’ ie
439 See the discussion of this point in the dissenting judgment of Lord Phillips M.R. in Lesotho
Highlands, at [52|-[{53].
49 12005] 1 Lloyd’s Rep. 192.
 500 The Role of the Court after the Award

ascertain whether the arbitrator came to the wrong conclusion but to consider
““phether he was caused by inappropriate means to reach one conclusion whereas had he
adopted appropriate means he might have reached another conclusion favourable to the
applicant”, is likely to be followed after the decision of the House of Lords in
Lesotho Highlands." In Vee, the court concluded that if an irregular procedure
caused the arbitrator to decide a point against the applicant which, but for the
irregularity, ‘She might well never have reached, provided always that the opposite
conclusion is reasonably arguable” then substantial injustice will be made out.**
The judge based this conclusion on the fact that it will not normally be appro-
priate for the court actually to try the issue of whether substantial injustice has
been made out as that would be an entirely inappropriate inroad into the arbitral
process. Whilst this sentiment of non-encroachment on the arbitral process is to
be commended, the decision does appear to have lowered the intended threshold
of substantial injustice somewhat by creating a presumption that injustice has
arisen if the applicant can show that an irregularity deprived him of the opportu-
nity of running other points even if they were not manifestly strong or, as it was
put in Ve, the alternative argument was “not so weak that it had no realistic
prospect of success’’.*** This is in contrast with the approach taken in Thyssen
Canada Ltd*** where the court was prepared to embark on a full trial to determine
whether fraud was made out as it did not feel that the award could be remitted to
the tribunal unless or until a substantial injustice had been properly shown. In
another case, in considering whether substantial injustice was caused by a tribu-
nal’s refusal to adjourn a hearing to receive further evidence, the court enquired
whether the new evidence, if admitted, would have stood a realistic chance of
reversing the award.** If therefore correcting or avoiding the serious irregularity
would make no difference to the outcome, substantial injustice will not be
shown.

8-107 Order of issues. In practice, therefore the usual approach of the courts is first
to determine whether there has been any serious irregularity. If there has not been,
then the question of substantial injustice cannot arise.**° An alternative approach
is to consider the substantial injustice issue first. If, for example, the court is
convinced that the impugned decision is right, then no substantial injustice will
have resulted even if the arbitrator reached the correct conclusion by adopting an
unfair procedure.*”

™" Lesotho Highlands Development Authority v. Impreglio SpA [2006], A.C. 221.
[2005] 1 Lloyd’s Rep. 192 at [90]. See also Conder Structures v Kvaener Constructions Ltd [1999]
A.D.R.L.J. 305, quoted with approval in Hussman v Al Ameen, ibid.
™* Paragraph 91. Applied in OAO Northern Shipping Co v Remol Coldores De Marin SL [2007] EWHC
1821 at [25]-[30].
Paragraph 16.
" Shuttari v Solicitors Indemnity Fund (2004) EWHC 1537 at [61].
* For a very clear exposition ofthis approach, see Margulead Ltd v Exide Technologies |2005] 1 Lloyd’s
Rep. 324, per Colman J. at [3].
” Tame Shipping Lid v Easy Navigation Ltd (The Easy Rider) [2004] 2 Lloyd’s Rep. 626 at [31].
 Challenge for Serious Irregularity 501

(c) Application to court

Time limit for the application. A party to arbitration proceedings 8-108

wishing to apply to the court to challenge an award on the ground of “serious
irregularity affecting the tribunal, the proceedings or the award?*** must give notice
to the other parties and the tribunal and bring the application “within 28 days of
the date of the award or, if there has been any arbitral process of appeal or review, of
the date when the applicant... was notified ofthe result of that process” .*”

Exhaustion of other rights. Before making an application under s.68 the 8-109
party concerned must have first exhausted “‘any available arbitral process ofappeal
or review and any available recourse under section 57” of the Act.**° The reference
to recourse under s.57 means that before making his challenge the applicant must
have sought to remedy the irregularity by asking the tribunal to correct the award
to remove, among other things, any ambiguity, or to make an additional award in
respect of any claim which was presented to the tribunal but was not dealt with in
the award.*°! Only if the tribunal refuses that request or is unable to correct the
irregularity can the application to the court proceed.*** Does this mean that that
a party must go back to the tribunal and ask for the award to be corrected even if
they believed it to be unsalvageable or “‘so bad that it was not susceptible of any
clarification or further expansion’’? This question was answered in the affirmative
in Sinclair v Woods of Winchester Ltd.** There may however be cases where the
nature of the complaint is not caught by s.57(3), or its equivalent, and simply could
not be corrected by the tribunal even if asked, such as the omission to attach
sufficient weight to a piece of evidence. In those cases, there will be “no available
recourse” for the purpose of s.70(2)(b) and so the right to mount a challenge under
s.68 will not be lost if the matter is not raised with the tribunal in such cir-
“cumstances.
#3"

Loss of right to object. A party who wishes to challenge an award for a 8-110
serious irregularity should not only act promptly in making his application to the
court but should also take care not to lose his right to object.*°* A party who takes
part or continues to take part in the proceedings must make his objection to the

+8 The words in quotes appear in s.68(1) of the Arbitration Act 1996.

49 Section 68(1) of the Arbitration Act 1996, incorporating s.70(3) of that Act. The possibility of an
extension to this time limit is discussed at paras 8-212 et seg. See for example Claire & Co Lid v
Thames Water Utilities [2005] EWHC 1022 where an extension was refused and Tyssen Canada v
Manon [2005] 1 Lloyd’s Rep. 640.
450 Sections 68(1) and 70(2) of the Arbitration Act 19996.
451 Recourse under s.57 is not always available. That section is not mandatory and is subject to the
parties’ agreement. See para.6—170.
452 Torch Offshore LLC & Amor v Cable Shipping Inc [2004] EWHC 787; Sinclair v Woods of Winchester
Ltd [2005] EWHC 1631 at [36}-[39].
453 Paragraphs 38. The judge in that case discerned a deliberate ploy not to seek correction of the award
as a decision to challenge the award was said to have already been made.
4534 World Trade Corp v C Czarnikow Sugar [2004] EWHC 2332 at [8]-{15].
454 Sections 68(1) and 73 of the Arbitration Act 1996. See para.7-127 for how the objection should be
made.
 502 The Role of the Court after the Award

irregularity “either forthwith or within such time as is allowed by the arbitration

agreement or the tribunal”.*° If that is not done, the party concerned may not be
able to raise that objection before the court “unless he shows that, at the time he
took part or continued to take part in the proceedings, he did not know or could
not with reasonable diligence have discovered the grounds for the objection”’.
Extreme caution is necessary however because it is unlikely to be enough to simply
convey a reservation of rights. In ASM Shipping Ltd of India v TTMI Lid of
England,**° a case brought under s.68 but also relevant to s.24, although apparent
bias was made out the award was not set aside because the applicant delayed in
making its challenge until the award was delivered and accordingly had fallen foul
of s.73. What is striking about this case is that an objection to the arbitrator and
an attempted reservation of rights was made almost as soon as the facts came to
light at a hearing. However, once the arbitrator had declined to recuse himself the
court found that a s.24 challenge should have been made promptly and certainly
before taking up the award; it was not acceptable to continue the objection in
correspondence and wait until the outcome of the award was known. “4 ‘heads we
win, tails you lose’ position 1s not permissible in law as s.73 makes clear’.2 Aad,

8-111 Raising objection immediately. Once the respondent can show that the
applicant took part or continued to take part in the arbitration proceedings
without objection, the burden shifts to the applicant to show that he did not know
and could not with reasonable diligence have discovered the grounds for objection
at the time. Taking part does not always require active participation: “there might
well be periods in the arbitration during which no formal step is required ofone or other
party but, during these periods, the parties will still be taking part in the proceed-
ings.”*°* In the case of an alleged procedural irregularity committed by an
arbitrator during the conduct of proceedings, the point must therefore be raised
immediately (unless there is no knowledge or means of knowledge, which will be
a difficult hurdle to overcome). ‘“‘7o mait until after the publication of the award or
indeed after continuing to participate in the hearing... will be fatal to the right to
mount a s.68 application”. In Thyssen Canada Ltd v Mariana Maritime SA, a
possible ground for objection (that the defendants had fraudulently concealed the
true cause of a fire on board on a ship) was discovered shortly after the end of the
hearing but several months before the publication of the award. The claimants did
nothing to substantiate their knowledge (including by securing the witness state-
ments which they subsequently obtained) and meanwhile continued to participate

*° Section 73(1) of the Arbitration Act 1996, which is referred to in s.68(1). See also the authorities
mentioned in footnote to para.8—065.
*° [2006] 1 Lloyd’s Rep. 375. See also Arduina Holdings BV v Celtic Resources Holdings Plc [2006]
EWHC 3155, [36|-{38].
7 Paragraphs 48-49. See also Sinclair v Woods of Winchester Ltd 102 Con. L.R. 127 at [33], where
again conduct at the hearing could not be objected to as the challenger waited until after the delivery
of the award to make the challenge.
®* Rustall Trading Ltd v Gill & Duffas SA [2000] 1 Lloyd’s Rep. 14 at 20, 21; cited with approval in
Thyssen Canada Lid v Mariana Maritime SA [2005] 1 Lloyd’s Rep. 640 at [18]-{20].
* Margulead Lid v Exide Technologies, per Colman J., at [34]. See also ASM Shipping Ltd of India v
TTMI Ltd of England [2006] 1 Lloyd’s Rep. 375 on the detailed operation of s.73.
 Challenge for Serious Irregularity 503

in the proceedings including taking up the award. The s.68 application was
therefore barred by s.73 of the 1996 Act.

Conduct of application. In most cases the court will decide the application 8-112
upon reviewing the available evidence and considering submissions. Evidence
presented to the court can be substantial, perhaps overly so,*°’ and there is an
undecided issue as to how far the court should delve into the detailed conduct of
proceedings and content of evidence presented to the tribunal. In certain cases,
especially where it is alleged that the award has been procured by fraud, the court
may need to give directions for a full trial including the cross examination of
witnesses.*°!
Where an applicant wishes to put fresh evidence before the court, it is likely to
have to satisfy the court that the fresh evidence was unavailable at the time of the
arbitration, to explain why it was unavailable and that such evidence would have
had an important influence on the result. The issue of fresh evidence will be
particularly relevant where the applicant challenges the award under s.68(2)(g)
where it alleges that the award was procured by fraud.*°

Variety of orders. Upon an application under s.68 of the 1996 Act the court 8-113
can make an order in respect of the whole or part of the award by remitting it to
the tribunal for reconsideration. When a fraud 1s established the court can grant
an injunction restraining enforcement and publication of the fraudulent award*®*
by setting it aside or by declaring the award to be of no effect. “The court shall not
exercise its power to set aside or declare an award to be of no effect, in whole or in part,
unless it 1s satisfied that it would be inappropriate to remit the matters in question to the
tribunal for reconsideration.”*°* The court may require the applicant to provide
security for the costs of the application*®’ or order that any money payable under
the award shall be brought into court or otherwise secured pending the determina-
tion of the application.*°° If necessary,*°’ the court may also require the tribunal
to state the reasons for its award in sufficient detail to enable the court properly
to consider the application.*®*

+60 See Colman J., Arbitration and Judges—how much interference should we tolerate? Master’s
Lecture, London, March 14, 2006; ABB v Hochtief Airport GmbH [2006] 1 All E.R. (Comm) 529,
at [87], “Challenges such as this are immensely time-consuming and therefore costly”.
461 Thyssen Canada Ltd v Mariana Maritime SA, at [15].
462 See the discussion of fresh evidence in the context ofa s.68(2)(g) application in Thyssen Canada Lid
v Mariana Maritime SA [2005] 1 Lloyd’s Rep. 640 at [58]-{66] and para.8—081 above.
463 Arab National Bank v El Abdali [2005] 1 Lloyds’ Rep. 541.
464 Section 68(3) of the Arbitration Act 1996. As for what is inappropriate to be remitted, see
para.8—163.
465 Section 70(6) of the Arbitration Act 1996, which also provides that the application may be dismissed
if an order for security is not complied with. See para.8-206 for discussion.
466 Section 70(7) of the Arbitration Act 1996, which also provides that the court may direct that the
application be dismissed if such an order is not complied with. See para.8—208 for discussion.
467 Even if it would be helpful to have the tribunal’s reasons, the court will not overrule any agreement
by the parties that reasons need not be given.
468 Section 70(4) of the Arbitration Act 1996. The court may make a further order of costs resulting
from this order: see s.70(5) of the Act and para.6-029.
 504 The Role of the Court after the Award

8-114 Multiple applications. Applications under s.68 of the Arbitration Act 1996
are often made together with an application for leave to appeal under s.69 of the
Act. It is said that the logical approach to multiple applications of this kind is to
set aside or remit for serious irregularity and to consider the question of permis-
sion to appeal once it is decided whether the award can stand.*” Section 68
applications are also sometimes made together with an application to remove an
arbitrator under s.24.4”° Indeed, on occasions the two applications will be inter-
linked, so that the practical effect of an application under one section will be linked
to the success of an application under another section.*7!

(d) Appeals to the Court of Appeal

8-115 Approach of the court. This paragraph considers the leave requirements
under both s.67(4) and s.68(4) as they are in the same form. Permission of the
“court” is required for any appeal from a decision of the court under either ss.67
or 68.*”* It may be given “‘subject to conditions to the same or similar effect as an
order”’ for security for costs or of the sum in dispute.*’* At first sight, this sub-
section appears to suggest that unless the judge at first instance gives leave to
appeal there can be no appeal. Indeed, s.105(1) defines the “‘court” as the High
Court or County Court. However, two separate lines of decisions of the Court of
Appeal have weakened the proposition that the first instance judge alone is
competent to grant leave to appeal from his own decision.

8-116 Excess of jurisdiction. Following Cetelem v Roust,‘”* which dealt with the
identical provision in relation to appeals under s.44(7) of the Act, the distinction
is now to be drawn between appeals against orders which the judge had jurisdic-
tion to make, although it is alleged he erred in fact or in law in making the order,
and orders which he had no jurisdiction to make. The Court of Appeal can give
permission to appeal in respect of the latter type of orders, where the judge at first
instance has no jurisdiction to make the order in question, even where the judge
himself has refused leave to appeal. As the Court of Appeal noted in Cetelem:

“So long as the judge could make the order in the sense that it was within the jurisdiction
specified in the relevant section, the buck stops with him. The order is made under the
section. It is only where the judge makes an order which is outwith his jurisdiction, so
that he could not (as opposed to should not) make it, that s.44(7) and other similar
provisions do not prevent an appeal to this court.’*”°

% Bulfracht (Cyprus) Lid v Boneset Shipping Co Lid (the ‘‘Pamphilos’’) [2002] 2 Lloyd’s Rep. 681, per
Colman J.
ASM Shipping Lid of India v TTMI Lid of England [2006] 1 Lloyd’s Rep. 375; Sumukan Ltd v
Commonwealth Secretariat |2007] EWHC 188.
“! DDT Trucks of North America Lid v DDT Holdings Ltd {2007] EWHC 1542.
*7 Sections 67(4) and 68(4) of the Arbitration Act 1996.
7 Section 70(8) of the Arbitration Act 1996,
4 Cetelem SA v Roust Holdings Ltd [2005] 1 W.L.R. 3555.
% Cetelem SA v Roust Holdings Ltd [2005] 1 W.L.R. 3555, per Clarke L.J., at [25].
 Challenge for Serious Irregularity 505

Quite how easy this distinction is to operate in practice remains to be seen. In

Lesotho Highlands v Impreglio,*’° the House of Lords when considering a challenge
under s.68 of the Arbitration Act 1996 rejected an argument that an error as to the
currency of an award constituted an excess of powers. However, this matter was
argued strongly on both sides all the way up to the House of Lords and the
concepts are elusive. The field of administrative law is full of examples of the
difficulty in drawing a distinction between a simple error (within jurisdiction) and
acting outside of jurisdiction.*77

Orders on preliminary points. In a closely related decision, the Court of 8-117

Appeal has held in respect of an appeal based on a preliminary point about
whether a particular section (s.69) applies at all (because for example there is a
question whether a valid exclusion agreement has been entered into) that the
Court of Appeal does have jurisdiction to grant leave in respect of such ques-
tions.*’”* The Court of Appeal canvassed but did not decide the possibility that the
opt out wording in s.44(1), “unless the parties otherwise agree’? may also be a
preliminary point as to whether that section applies at all.

Residual jurisdiction regarding unfairness. The Court of Appeal 8-118

also has a residual jurisdiction to set aside the judge’s decision in the case of
unfairness relating to the process of the judge’s decision. The distinction is
therefore to be drawn between appeals from the judge’s refusal to give leave on the
merits where, save for cases where there was no jurisdiction for the underlying
decision, there is no appeal and cases where, “‘the judge’s refusal ofleave to appeal
was arbitrary or unfair: or was the product of a failure ofintellectual engagement with
Lhe arguments put before him; or amounted actually or metaphorically to the absence of
a decision on the issue”’.*”? In such “exceptionally rare cases”’**° the Court of Appeal
can of its own motion consider appeals even where leave of the first instance judge
has not been given. The Court of Appeal has rejected the argument that this
residual discretion is contrary to Art.6 of the European Convention of Human
Rights.**!

$75) 2006RArG. 22.10

47 Pearlman v Keepers and Governors of Harrow School [1978] 3 W.L.R 736 at 743: “The distinction
between an error which entails absence of jurisdiction and an error made within jurisdiction is
fine... it is rapidly being eroded”.
478 Sukuman Ltd v Commonmealth Secretariat [2007] EWCA 243; [2007] Bus. L.R. 1075, at
27|-[34}.
we ea ne Insurance Ple and Others v Astra Zeneca Insurance Co Ltd [2006] EWCA 1340,
per Rix L.J. at [98], approving North Range Shipping Ltd v Seatrans Shipping Corp [2002] 1 W.L.R.
2397. Approved in Kazakhstan v Istil Group Inc [2007] W.L. 1425725, paras 11. See also ASM
Shipping Ltd ofIndia v TTMI Ltd [2006] EWCA 1341, a decision under s.68(4), which is in the
same terms as s.69(8).
480 CGU International Insurance Ple and Others v Astra Zeneca Insurance Co Ltd [2006] EWCA 1340,
per Rix LJ. at [100].
481 Kazakhstan v Istil Group Inc [2007] W.L. 1425725, following CGU International Insurance Ple and
Others v Astra Zeneca Insurance Co Ltd 2006] EWCA 1340.
 506 The Role ofthe Court after the Award

7. APPEAL ON QUESTION OF Law

8-119 Introduction. Apart from applying to the court to challenge an award under
s.67 (lack of substantive jurisdiction)**’ or s.68 (serious irregularity)*** a party may
be able to appeal to the court*** on a question of law arising out of an arbitral
award.*** The right to appeal may be excluded by clear agreement and even if
there is no exclusion agreement, which is often included by virtue of the parties
choosing an institutional set of rules which contain a general exclusion of the right
to appeal, there are a number of restrictions on the right to bring an appeal. Unless
all the parties agree to the appeal, the appellant must obtain leave from the court,
which will only be given if the court is satisfied on certain specific matters,**°
which will be discussed in the following paragraphs. A further restriction is that
appeals can only be brought on questions of English law: this automatically rules
out appeals on the great many international arbitrations seated in London pursu-
ant to a foreign governing law. These restrictions mean that appeals on questions
of law are often “dressed up” as challenges under s.68, which can be brought as
of right.*8? Furthermore, few appeals under s.69 actually get over the leave
requirement which has been designed to catch all but the most meritorious
appeals.

8-120 A necessary provision? The very existence of s.69 has been criticised in
some quarters as being an unwarranted encroachment on the powers of the
tribunal to decide the case as they see fit. As Colman J. has said, it is the section
“which gets most people hot under the collar.”*** However, in most quarters the
provision is accepted as a necessary compromise between the desire to entrench
arbitral authority on the one hand, and the desire on the other to continue the
development of the body of English commercial law, with the link between the
courts and tribunals remaining in place. There is no equivalent provision in the
Model Law; this provision was derived very substantially from s.1 of the Arbitra-
tion Act 1975, which itself abolished the much criticised case stated procedure.

8-121 Exclusion agreement. Section 69 is not mandatory. The parties can agree
to exclude an appeal to the court,**” and this is generally known as an “exclusion

482 See paras 8-054 er seq.

483 See paras 8-072 et seq.
** Some arbitration rules provide for their own system of appeals, which may or may not be followed
by a subsequent appeal to the court. See, e.g. the GAFTA Rules and the International General
Produce Association Rules. See also the Rules of the International Centre for Settlement of
Investment Disputes.
*®° Section 69 of the Arbitration Act 1996, replacing s.1 of the Arbitration Act 1979.
*6'The specific matters are contained in s.69(3) of the Arbitration Act 1996 and are listed in
para.8—132.
“87 Lesotho Highlands is arguably one such case.
**® Colman J., Arbitration and Judges—how much interference should we tolerate? Master’s Lecture,
London, March 14, 2006.
"This may be done before or after the commencement of the arbitration proceedings. Section
87(1)(b) of the Arbitration Act 1996 will not be brought into force: see para.2—005.
 Appeal on Question of Law 507

agreement”’.*”° Rules of arbitration often contain words wide enough to be treated

as an exclusion agreement."”! The nature of an exclusion agreement does not go
to the substantive rights of the parties but relates to the ancillary arbitration
agreement. It remains sufficient to include the exclusion agreement in general
terms and to incorporate the exclusion agreement by reference. The previous case
law has not been altered by the Human Rights Act and it is still the case that the
exclusion agreement does not have to refer expressly to s.69 to be effective.t”” It
is uncertain however whether an effective exclusion agreement is achieved by
simply providing that a dispute shall be ‘“‘finally settled...” by arbitration.*”°
Further, if the parties agree to dispense with reasons for an award their agreement
will be treated as an exclusion agreement.***

Exhaustion of other rights.*”" An appeal may not be brought if the 8-122

applicant “has not first exhausted any available arbitral process of appeal or review
and any available recourse under s.57”.*”° Section 57 of the Arbitration Act 1996
recognises that the parties are free to confer on the tribunal the power to correct
an award or to make an additional award, and in the absence of such an agreement
that section empowers the tribunal on its own initiative or on the application of a
party to correct an award already made or to make an additional award in respect
of a claim that was presented to the tribunal but not dealt with in the previous
award.*”° Thus, if the point of law arises from an accidental slip or ambiguity that
could be corrected or from the failure of the tribunal to deal with a claim in the
award which was presented to it that could be the subject of an additional award,
s.69 requires the applicant to request the tribunal to correct the matter (if
necessary by an additional award) before appealing to the court. Only if the
tribunal refuses that request or is unable to deal with the question can the appeal
proceed.

Time limit. In order to comply with s.70(3) of the Arbitration Act, 1996, an 8-123
appeal must be brought within 28 days of the date of the award or if there has been
any arbitral process of appeal or review*”’ (e.g. an additional award) from the date

#90 See para.2-063.

41 e.g Art.28.6 of the the ICC Rules of Arbitration (January 1, 1998) was found to exclude an appeal
in Lesotho, at [3]. See also Cameroon Airlines v Transnet [2004] EWHC 1829.
42 Sukuman Ltd v Commonmealth Secretariat [2006] 1 All E.R. (Comm). Upheld by the Court of
Appeal, Sukuman Ltd v Commonwealth Secretariat [2007] EWCA 243, [2007] Bus. L.R. 1075.
#93 This point was raised but not decided in Demco Investments & Commercial SA v SE Banken
Forsakring Holding AB [2005] 2 Lloyd’s Rep. 650, at [6]. See also Essex County Council v Premier
Recycling Ltd [2006] EWHC 3594 where a reference to “final and binding” was not sufficient to
exclude the application of s.69.
494 Section 69(1) of the Arbitration Act 1996.
44a The cases and principles cited at para.8--109 are of relevance to the application of s.57 to s.69
appeals.
495 Section 69(2) incorporating s.70(2) of the Arbitration Act 1996. The use of the word “available”
recognises that s.70 is not mandatory and that recourse to the tribunal may have been excluded by
prior agreement.
#6 See paras 6-170 ed seq.
497 An additional award may result from a request to the tribunal or from an appeal board established
under the rules governing the arbitration.
 508 The Role of the Court after the Award

when the applicant was notified of the result of that process.*”* The possibility of
an extension of this time limit is discussed earlier in this chapter.*””

8-124 Question of law. The appeal to the court can only be made “on a question
of law arising out of an award made in the proceedings’”””® and any application for
permission to appeal must “identify the question of law to be determined and state
the grounds on which it is alleged that leave to appeal should be granted”’.°°' A
question of law is defined in s.82(1) of the Arbitration Act, 1996.°°* It does not
include issues of foreign law,*’’ even if the tribunal proceeds on the basis that for
all practical purposes English law is the same as the foreign governing law.*’* The
conditions on which the court must be satisfied before permission will be given are
discussed later in this chapter.*”°

8-125 No appeal on facts. The tribunal’s findings of fact are conclusive.*°° The
appeal is only concerned with a question of law and must not encroach upon the
facts. “The arbitrators are the masters of the facts. On an appeal the Court must decide
any question of law arising from an award on the basis ofa full and unqualified
acceptance of the findings of fact of the arbitrators. It 1s irrelevant whether the Court
considers those findings offact to be right or wrong. It also does not matter how obvious
a mistake by the arbitrators on issues of fact might be, or what the scale of the financial
consequences of the mistake offact might be.?°°’
The court will not permit an appeal unless the tribunal’s decision falls outside
what has been described as the permissible range.

“The arbitrators plainly erred in their approach on this aspect. Yet it must be borne in
mind that their decision was not one of pure law. It was a question of mixed law and fact.
In such a situation their error in approach is not by itself decisive. It is still necessary to
consider whether their actual decision in all the circumstances falls outside the permis-
sible range of solutions open to arbitrators.’°°*

8 Section 69(2) incorporating s.70(3) of the Arbitration Act 1996.

#9 See para.8-063 and CPR r.62.9(1). See Surefire Systems Ltd v Guardian ECL Ltd [2005] EWHC
1860 for a comment on application for leave to appeal.
°° Section 69(1) of the Arbitration Act 1996.
5°! Section 69(4) of the Arbitration Act 1996.
°°? For a court in England and Wales, it means a question of the law of England and Wales and for a
court in Northern Ireland, it means a question of the law of Northern Ireland.
°° Egmatra AG v Marco Trading Corp [1999] Lloyd’s Rep. 862 at 865 and Sanghi v TIT {2000} 1 Lloyd’s
Rep. 480 at 483.
° Reliance Industries Lid v Enron Oil and Gas India [2002] 1 All E.R. (Comm) 59. The position would
be different if the parties varied the agreement so that, for example, English law replaced the foreign
law as the governing law.
°° For example, the question of law must be one which the tribunal was asked to determine: see paras
8-129 et seq. below.
°° See paras 8-085 et seg. Boulos Gad Tourism v Uniground Shipping Co (November 16, 2001) QBD
(Comm), Tomlinson J.
°°"? Geogas SA v Trammo Gas Lid (The “Baleares’’) [1993] 1 Lloyd’s Rep. 215 at 228, CA. Cited with
approval in Demco Investments & Commercial SA v0 SE Banken Forsakring. Quoted in Kershaw
Mechanical Services Ltd v Kendrick Construction Ltd [2006] EWHC 727, at [61].
°° Casimar SA v Marimarna Shipping Co Ltd |1990] 2 Lioyd’s Rep. 323, per Steyn J. at 326 cited with
approval by HHJ. Peter Coulson Q.C. Walsall MBC v Beachdale Community Housing Association
[2005] EWHC 2715 (TCC).
 Appeal on Question of Law 509

Even in matters concerning the construction of an agreement, which is ulti-

mately a question oflaw (or mixed fact and law), the court will hesitate to vary the
findings of a tribunal with commercial experience (but may still do so).5°°

Fact and law distinction. The distinction between questions of fact and 8-126
law is a notoriously difficult one which arises generally in appellate practice.>!°
Most cases take a restrictive view of what is a properly reviewable finding of law.
Such a restrictive approach is illustrated by Demco Investments & Commercial SA
v SE Banken Forsakring®'' where the court rejected a submission that a question
of whether the tribunal was right to find a particular fact on the basis of the
evidence before it was a question of law. The court remarked that the legislative
intent of s.69(3) was to prevent parties seeking to dress up questions of fact as
questions of law; any appeal on a question of law must take as its starting point the
tribunal’s findings of fact and then identify the question of law arising from the
finding. In certain cases, a challenge under s.69 may succeed if the tribunal’s
findings of fact do not address a critical question which would need to be answered
in order to substantiate the tribunal’s conclusions.°'”

Construction of an instrument. However, a recent illustration of a 8-127

broader approach can be found in a case where the court was prepared to intervene
to overturn the arbitrator’s decision that no binding agreement for the supply of
a ship’s engine had been concluded by an exchange of letters.°'* Relying upon the
principle that the construction of a written instrument is a question of law°!* (or
a mixed question of fact and law), the court reviewed the finding of the arbitrators
and overturned it. This case is an extreme example of the application of s.69. The
judgment conflates the identification of the relevant legal principles and their
application to the facts. There is no suggestion in the judgment that the arbi-
trator’s understanding of the law of offer and acceptance was incorrect: it is the
application to the facts which the courts did not accept and hence the two stage
approach outlined earlier in this paragraph appears not to have been followed. The
decision in Covington is hard to reconcile with that in Phymouth City Council v DR

50 Covington Marine Corp v Xiamen Shipbuilding Industry Co Ltd {2005] EWHC 2912 where Langley
J. reviewed the relevant authorities [35]-[42]. Compare Kershaw Mechanical Services Ltd v Kendrick
Construction Ltd [2006] EWHC 727 [51]-[57].
510 See for example M Fordham, Judicial Review Handbook (4th edn, Hart), at 13.2.2, pp.281, 282.
511 [2005] 2 Lloyd’s Rep. 650. Applied in Surefire Systems Ltd v Guardian ECL Lid [2005] B.L.R. 534.
See also Plymouth City Council v DR Jones (Yeovil) Ltd [2005] EWHC 2356; Kersham Mechanical
Services Ltd v Kendrick Construction Lid [2006] EWHC 727 and London Underground v Citylink
Telecommunications Ltd [2007] EWHC 1749, [62]-[65].
512 Pentonville Shipping Lid v Transfield Shipping Inc (The Jonny K) [2006] 1 Lloyd's Rep. 666. The
finding in question related to who was responsible for an order to sail given to a vessel during the
course of loading. The tribunal’s award had not clearly addressed this question and the award was
remitted to them. The appeal was brought only under s.69 but could equally have been argued
under s.68(2(d) (failure to deal with the issues), under which it fits more neatly. Alternatively, an
order could have made under s.70(4)(b) requiring the tribunal to set out its reasoning in more
detail.
513 Covington Marine Corp v Xiamen Shipbuilding Industry Co Ltd [2005] EWHC 291 at [43]-[46].
514 The Trustees of Edmond Stern Settlement v Levy [2007] W.L. 1623226, para.10, where the court held
that the construction of the words in a contractual document was a question of law.
 510 The Role of the Court after the Award

Jones (Yeovil) Ltd,°'> where the court expressed the view that questions as to (1)
which documents were incorporated into a contract, and (2) what dates if any were
incorporated into the contract were questions of fact and not law. °'°
On the basis that the court may review questions of construction as potential
errors of law, the court should only intervene in the clearest of cases as questions
of construction usually have to be answered against the background of relevant
facts and the court will not have heard the evidence, unlike the arbitrator.°'”

8-128 Qualifying errors of law. The scope of an appeal under this section also
includes a complaint that the tribunal has applied the wrong governing law and
that the tribunal should have applied English law.*'* There can be no error of law
if the arbitrator reached a decision within the permissible range of options open
to him.>!? However, once the court has concluded that an error of law has been
committed, the court will consider the issue of law in totality and is very likely to
set out its view of the correct position.°*° If the award is then remitted to the
tribunal under s.69(7) the tribunal must reconsider the issue on which it erred in
the light of what the court has said.
If the tribunal wrongly records in an award that the parties were agreed on a
point, this does not give rise to a question of law.**' Rather, the parties should ask
the tribunal to correct the award.*??

8-129 Arising out of the award. The question of law, which is the subject of
appeal, must arise out of an award made in the arbitral proceedings.*?> An issue
may arise whether the ‘“‘award” actually constitutes a decision which is capable of
being the subject of an appeal.***

8-130 Obtaining reasons from the tribunal. The court is empowered to

order the tribunal to state reasons for an award in sufficient detail for an appeal.>?5
This may be necessary where the award does not contain any reasons or does not
set out the tribunal’s reasons in sufficient detail to enable the court properly to
consider any question of law arising out of the award should an appeal be
*15 (2005| EWHC 2356.
st! See paras) 26) 33:
°” The Trustees ofEdmond Stern Settlement v Levy [2007] W.L. 1623226, para.13.
°!8 CGU International Insurance Ple v Astrazeneca Insurance Co Ltd [2006] 1 C.L.C. 162.
* Walsall MBC v Beechdale Community Housing Association Ltd [2005] EWHC at [14], [26].
°° For an example of this approach, see Miranos International Trading Inc » VOC Steel Services BV
[2005] EWHC 1812.
21 Mare Rich & Co AG v Beogradska Plovidba (The “Avala”) L.M.L.N. 381, June 11, 1994.
*? Unless the parties have excluded it, the tribunal has power to correct an award under s.57(3)(a) of
the Arbitration Act 1996: see para.6—-167.
3 Section 69(1) of the Arbitration Act 1996,
24 See paras 6-072 et seg. above.
*° Section 70(4) of the Arbitration Act 1996 replacing s.1(5) of the Arbitration Act 1979. This would
not apply where the parties had agreed that the tribunal should dispense with reasons for the award
because that would amount to an exclusion agreement and no appeal would be possible: see
para.8-121. It was done, however, in Petroships v Petec Trading ( The “Petro Ranger’) [2001] 2
Lloyd’s Rep. 348 at 357.
 Appeal on Question of Law 511

pursued.**° No application is required and the court may of its own motion order
the tribunal to state the reasons for its award when the court has to consider an
application or appeal.**” The court may make an order in respect of any extra costs
associated with its requests for reasons.°7*

Agreement to appeal. The parties may agree to an appeal to the court 8-131
against any award of the tribunal°’? and that agreement may be made before the
dispute has arisen. Some standard forms of contract contain express consent to an
appeal.**° Such an agreement is expressly contemplated by s.69 of the Arbitration
Act 1996.°*' In that event, a party wishing to exercise the right to appeal will not
have to obtain permission from the court, but will have to fulfil the other
conditions for an appeal.**” In the absence of an agreed right of appeal, permission
of the court will have to be obtained.

Requirements for permission to appeal. Even if there is no exclusion 8-132

agreement and the conditions mentioned above are met, the applicant will have to
obtain permission of the court to proceed with the appeal unless all parties to the
arbitral proceedings agree to the appeal.°*’ Absent agreement, permission will
only be granted if the court is satisfied:

“(a) that the determination of the question will substantially affect the rights of one or
more of the parties;

(b) that the question is one which the tribunal was asked to determine;

(c) that on the basis of the findings of fact in the award (i) the decision ofthe tribunal
on the question is obviously wrong, or (ii) the question is one of general public
importance and the decision of the tribunal is at least open to serious doubt,
and
(d) that, despite the agreement of the parties to resolve the matter by arbitration, it is
just and proper in all the circumstances for the court to determine the ques-
tions es"

526 The power to demand reasons from the tribunal will be sparingly exercised: see para.6—-031.
27 Tt is apparent from the terms of s.70(4) of the Arbitration Act 1996 that no application is
required.
528 Section 70(5) of the Arbitration Act 1996.
529 Agreement to an appeal was given in Fence Gates Ltd v NEL Construction (December 5, 2001)
T&CC, H.H. Judge Thornton QC. See also Robin Ellis Lid v Vinexsa Internationa Ltd [2003]
BARS 733
530 Hallamshire Construction Ple v South Holland District Council [2004] EWHC 8 (TCC), [2].
531 Section 69(2)(a) of the Arbitration Act 1996, The word “agreement” in that subsection is not
qualified, so it may include an agreement contained in an arbitration clause or in rules incorporated
into that clause: see DAC report, para.292.
532 Section 69(3) of the Arbitration Act 1996. See para.8-119. Further, the appellant must exhaust any
other rights and comply with the time limit specified in s.70 of the Act.
533 Section 69(2) of the Arbitration Act 1996.
53+ Section 69(3) of the Arbitration Act 1996, replacing s.1(4) of the Arbitration Act 1979. The second
and third requirement were carefully considered by the Court of Appeal in CMA CGM SA v
Beteiligungs KG (The Northern Pioneer) [2003] 1 Lloyd’s Rep. 212.
 512 The Role of the Court after the Award

The words appearing in s.69(3) of the Arbitration Act 1996 have been quoted
above in full because of their importance to obtaining permission from the court.
The requirements are cumulative and onus of satisfying the court on each of the
matters quoted rests on the appellant. They will be examined in turn in the
following paragraphs with illustrations, where appropriate, from decisions made
by the courts. SiS}b)

(a) Determination will substantially affect the rights of the parties

8-133 Substantially affect rights of the parties. The court will not grant
permission to appeal unless it considers that, having regard to all the circum-
stances, the determination of the question of law concerned could substantially
affect the rights of one or more of the parties to the arbitration agreement.°*° If
there are a number of issues it is sufficient that taken together they have that
effect.°*’ This may be satisfied if a significant sum is involved but it is not
necessarily the case that the sums have to be large.***

8-134 Possibility of alternative outcome. The requirement is a hurdle to

overcome and will not be assumed: “‘. . . it is not good enough simply for a party
to assert that the alleged issue in question must affect their rights simply because
it goes to an aspect of the dispute in the arbitration.”’°*? In the Northern Pioneer,*°
the Court of Appeal held that the uncertain juridical basis of the right to withdraw
a vessel for non-payment of hire within a reasonable time was enough to cast
serious doubt on the arbitrator’s decision, but not enough to pass the “‘sub-
stantially affect the rights of the parties” test. This was because the delay in
purporting to cancel the chaterparty for over a month was inconsistent with an
intention to terminate for non-payment. The Court of Appeal noted that it was
“confident” that the arbitrators would have reached the same decision no matter
what juridical basis they chose to base their decision on.**' Equally, even where an
arbitrator had made an error of law which satisfied the ‘obviously wrong” test,
permission to appeal (or in the instant case, an extension of time to apply) would
be refused where the rights of the parties would not be substantially affected as

>? Pre-1996 decisions are still of some relevance to this subject. The previous law on requirements for
“leave” to appeal was contained in s.1(4) of the Arbitration Act 1979, as interpreted by subsequent
decisions of the courts. Section 69(3) of the Arbitration Act 1996 restates the previous law with
some modifications (e.g. the express requirement that the question of law is one which the tribunal
was asked to determine).
6 Arbitration Act 1996, s.69(3)(a) which replaced the Arbitration Act 1979, s.1(4). See also the same
requirement in s.45(1) of the 1996 Act.
37 Safeway Stores v Legal & General Insurance Soc Ltd [2004] EWHC 415 at [7].
°*8 Miranos International Trading Inc v VOC Steel Services BV [2005] EWHC 1812; Secretary of State
for the Environment v Reed International Ple {1994] 06 E.G. 137. See also Retla v Gryphon “The
Evimeria”’ |1982] 1 Lloyd’s Rep. 55. See also para.7—168 for commentary on the similar provision
contained in s.45(1) of the Arbitration Act 1996.
°° Walsall MBC v Beechdale Community Housing Association Ltd [2005] EWHC at [15].
*” CMA CGM SA v Beteiligungs KG MS Northern Pioneer Schiffahrtsgesellschaft GmbH & Co [2003]
1 W.L.R. 1015.
>H Paragraphsioos oO:
 Appeal on Question of Law 513

without success under related applications the claimant would still be left with a
non-binding agreement.°*
The rights affected must include rights which arise out of the award itself.5*3

Substantial sums involved. In the context of an intended challenge to an 8-135

award on costs, the applicant will have to show not only that the sum involved is
sufficiently substantial but that, as with all appeals from awards, it depends upon
the resolution of a question of law.°*

Submitted to the tribunal. The second requirement on which the court 8-136
must be satisfied on an application for permission to appeal is that the question of
law concerned is one that the tribunal was asked to determine.°*> Under the
previous law°*° some applications for permission were made and granted on the
basis that an examination of the reasons for the award revealed an error of law that
had not been raised or debated in the arbitral proceedings.**? The express
provision in s.69(3)(b) of the Arbitration Act 1996 now prevents that happening.***
If certain issues of law are not explored before the arbitrators but are then raised
on an application for permission to appeal, the court should refuse permis-
sion.”

(b) Decision is obviously wrong

Approach of the court. An appellant needs to show that the decision is 8-137
obviously wrong or that it is one of general public importance and subject to
serious doubt (a lower threshold than obviously wrong).°*° In successive decisions
of the House of Lords made before the Arbitration Act 1996 a distinction was
drawn between arbitration relating to a standard form of commercial contract and
arbitration relating to a one-off contract of no general public importance. In the
former case, leave to appeal was given if the decision of the tribunal on the
question of law was open to serious doubt, or put another way, that there was a
strong prima facie argument that the decision was wrong. In the latter case, leave
would be given only if the judge was satisfied that the tribunal’s decision on the
question of law was “‘obviously wrong”’.°°! This distinction has been adopted by

*? DDT Trucks of North America Lid v DDT Holdings Lid [2007] EWHC 1542 at [33], [34], [38].
8 President of India v Jadranska Solbodna Plovidba [1992] 2 Lloyd’s Rep. 274 which concerned the
exercise by the tribunal of its discretion as to costs.
“4 President of India v Jadranska Solbodna Plovidba {1992| 2 Lloyd’s Rep. 274. See para.6—140
above.
5 Section 69(3)(b) of the Arbitration Act 1996.
46 The previous law was contained in s.1(4) of the Arbitration Act 1979.
47 See DAC report, para.286/(ii).
“48 Markland Lid v Virgin Retail Ltd [2003] EWHC 2428 at [32].
°4° Northern Pioneer, at [26|-{36].
5° Section 69(3)(c) of the Arbitration Act 1996.
551 Pioneer Shipping Ltd v BTP Tioxide Ltd (The ““Nema’’) [1981] 2 All E.R. 1030; [1982] A.C. 724 and
Antaios Cia Naviera SA v Salen Rederterna AB (The “‘Antaios”’) {1984] 3 All E.R. 229; [1985] A.C.
191.
 514 The Role of the Court after the Award

the Arbitration Act 1996 which is intended to re-state the essence of those
decisions.>>?

8-138 Apparent error. Colman J. has dispensed some helpful guidance on the
meaning of the current term, when speaking extra-judicially “What is obviously
wrong? Is the obviousness something which one arrives at... on first reading over a
good bottle of Chablis and some pleasant smoked salmon, or is ‘obviously wrong’ the
conclusion one reaches at the twelfth reading of the clauses and with great difficulty
where it is finely balanced. I think it is obviously not the latter.”?**

8-139 Need for a prima facie view. Inevitably this exercise will entail the court
coming to at least a prima facie view as to what it thinks the correct answer was.°°*
To give two examples, an appeal was allowed from an award on a rent review
provision where the decision was obviously wrong and the actual reasoning and
language adopted by the arbitrator could not be defended.*** An appeal was also
allowed and the award was remitted to the arbitrator, where the court found after
a hearing>*° that the arbitrator had taken the wrong legal approach in respect of the
measure of damages.°°’

8-140 Error apparent from award. The obvious error must normally be
demonstrable on the face of the award itself.°°* It is not normally appropriate to
refer to transcripts, submissions and evidence in the arbitration, although the
court will of course be able to examine any document referred to in the award.°*”

2 Section 69(3)(c) of the Arbitration Act 1996: see DAC report, para.288. It was recognised that the
guidelines set out in The “Nema” and The ‘“‘Antaios”’ might require adaption in particular cases. See
in this regard CMA CGM SA v Beteiligungs KG MS Northern Pioneer Schiffahrtsgesellschaft mbH
& Co [2002] EWCA Ciy 1878; [2003] 1 W.L.R. 1015, at [11]. The modification proposed by the
Court of Appeal relates only to questions of public importance. If the question is not one of public
importance and therefore needs to satisfy the “obviously wrong” test, the Nema guidelines will
continue to prevail.
3 Colman J., Arbitration and Judges—how much interference should we tolerate? Master’s Lecture,
London, March 14, 2006.
4 See Bottigheri di Navigazione SpA v Cosco Qingdao Ocean Shipping Co (The “Bunga Saga Lima’’)
[2005] 2 Lloyd’s Rep. 1 at [18]; Stolt Tankers v Landmark Chemicals [2002] 1 Lloyd’s Rep. 786 at
796.
°° Bisicht Mining v Bass Holdings [2002] EWHC 375, CL, Jacob. J.
°° The judge who first considered the application for leave to appeal directed that it should be
determined without a hearing, but the judge to whom it was referred for decision decided oth-
erwise.
°°” Horse Sport Ltd v Aintree Racecourse Co Ltd [2003] B.L.R. 155, HH Judge Anthony Thornton Q.C.
It is doubtful whether this decision observes the strictures of previous decisions on the test for
“obviously wrong” particularly as the arbitrator’s reasoning was scant (see para.47 of decision).
8 The Council of Plymouth v Jones \2005] EWHC 2536 at [18] and TCC Guide (2nd Edn),
para.10.2.4.
°° Kershaw Mechanical Services Lid v Kendrick Construction Ltd [2006] EWHC 727 at [44]-[45],
modifying the test laid down in Walsall MBC v Beechdale Community Housing Association Ltd [2005]
EWHC, [17], [21], [22]; HOK Sport Ltd (formerly Lobb Partnership Ltd) v Aintree Racecourse Co Ltd
[2003] Lloyd’s Rep. P.N. 148.
 Appeal on Question of Law 515

(c) Question of general public importance

An issue of general public importance. If it cannot be shown that the

8-141
decision is obviously wrong the appellant has the alternative of showing that the
issue is one of general public importance and that the decision on this point is
open to serious doubt.°” For a question to be of general public importance “one
needs to have regard not only to the general significance of the point, but also to
the sort of situations in which it is likely to arise”.°°' Even if the court finds that
there is a question of law of general public importance, it does not follow that
permission to appeal will be granted.*°? A question will not be of general public
importance if the circumstances in which the point arises are rare and unusual.

Open to serious doubt. What does ‘open to serious doubt” mean? In the 8-142
Northern Pioneer, the Court of Appeal said that these words impose a test which
is broader than Lord Diplock’s test that permission should not be given “unless
the judge considered that a strong prima facie case has been made out that the
arbitrator had been wrong in his construction”.°°? In that case, the uncertain
juridical basis of the right to withdraw a vessel from non-payment of hire within
a reasonable time was enough to cast serious doubt on the arbitrator’s decision, but
not enough to pass the “substantially affect the rights of the parties” test.

Public importance. Standard forms of contracts which are regularly used in 8-143
a particular area of business are of general public importance.*** The question of
law need not necessarily arise out of astandard form of contract, but the applicant

560 Section 69(3)(c)(ii) of the Arbitration Act 1996.

°°! Keydon Estates Ltd v Western Power [2004] EWHC 996 at [21] for a brief consideration of this
requirement.
°° The Coal Authority v Trustees of Nostell Trust [2005] EWHC 154.
°° The Court of Appeal has stated that the Nema guidelines were ‘not intended to be all-embracing
or immutable, but subject to adaptation to match changes in practices when these occur or to
refinement to meet problems of kinds that were not foreseen, and are not covered by, what was said
by this House in The Nema”. The Court of Appeal has concluded that “the statutory criteria are
strongly influenced by the Nema guidelines. They do not however follow these entirely. We have
concluded that they open the door a little more widely to the granting of permission to appeal than
the crack that was left by Lord Diplock.’” CMA CGM SA v Beteiligungs KG MS Northern Pioneer
Schiffahrtsgesellschaft mbH & Co [2002] EWCA Ciy 1878 at [11]. As noted, the modification
proposed by the Court of Appeal relates only to questions of public importance.
°° Tloyd’s forms of insurance policies, various forms of building contracts and charterparties are
obvious examples. The applicant will have to satisfy the court that the particular contract in dispute
is used as a standard form. In Losinjska v Valfracht Maritime (The “Lipa’’) [2001] 2 Lloyd’s Rep.
17, the court allowed an appeal on a point of construction on a charterparty on the Baltime form
where the decision of the tribunal was open to doubt. In Miranos International Trading Inc 0 VOC
Steel Services BV [2005] EWHC 1812, public importance was satisfied in respect of a point of
construction of a time charter. In STX Pan Ocean Co Lid v Ugland Bulk Transport AS, The Livanita
[2007] EWHC 1317 public importance was satisfied in respect ofa point of construction of a time-
charter party in modified NYPE form. In Sea Trade Maritime Corp v Hellenic Mutual War Risks
Association, The Athena [2006] EWHC 2530, at [107], the construction ofa standard form contract
applicable to all members of the Hellenic War Risks Association was also one of public impor-
tance.
 516 The Role of the Court after the Award

must satisfy the court that it is one of “general public importance”’.°*® If the issue
at stake is one of public interest, that of itself will not elevate the issue to one of
general public importance unless it can be shown that the clauses at issue “‘take a
common form or that questions of construction which arise here will arise else-
where.”’°°°
A point of general public importance can arise even if the dispute in question
is of a relatively low value.*°’

8-144 Faulty reasoning. Provided the tribunal arrives at the right answer, permis-
sion to appeal will not be granted no matter how faulty the reasoning may have
been.°°* This assumes that the tribunal gave sufficient reasons for the court to
consider the question of law in issue. It should be contrasted with the situation
where the tribunal gives no reasons or insufficient reasons to justify its conclusion.
In the latter situation an application may be made to the court for permission to
appeal coupled with a request for sufficient reasons.*°”

(d) fust and proper in all the circumstances

8-145 Just and proper. For the purposes of permission to appeal the court must also
be satisfied that “despite the agreement of the parties to resolve the matter by
arbitration, it is just and proper in all the circumstances for the court to determine
the question of law’’.°’?
» 570
The reason for this additional requirement has been
explained as follows:

““... we think it desirable that this factor should be specifically addressed by the Court
when it is considering an application. It seems to us to be the basis on which the House
of Lords acted as it did in The Nema. The Court should be satisfied that justice dictates
that there should be an appeal and in considering what justice requires, the fact that the
parties have agreed to arbitrate rather than litigate is an important and powerful fac-
tone

In order to oppose an application for permission to appeal on this ground, the

proper procedure is to file evidence in support of the contention that it would not
be “just and proper in the circumstances” to give permission to appeal and, if
necessary, to ask for an oral hearing to develop this ground of opposition.°”

°° The expression is not defined in the Arbitration Act 1996. It may extend to the interpretation of
a statutory provision.
*°° Demco Investments & Commercial SA v SE Banken Forsakring Holding AB [2005] 2 Lloyd’s Rep. 650
at [52].
°°? STX Pan Ocean Co Ltd v Ugland Bulk Transport AS, The Livanita [2007] EWHC 1317.
°°8 Tpsmich Borough Council v Fisons Ple {1990] 1 All E.R. 730, CA.
°° Section 70(4) of the Arbitration Act 1996: see para.8—113.
*” Section 69(3)(d) of the Arbitration Act 1996. See Keydon Estates v Western Power [2004] EWHC 996
for a brief consideration of this requirement.
°71 Extract from the DAC report, para.290.
°” Icon Navigation Corp v Sinochem International Petroleum (Bahamas) Co {2002] EWHC 2812, Moore
Bick J.
 Appeal on Question of Law pe,

Sweep-up discretion. The effect of this fourth condition for permission to 8-146
appeal is to give the court a final ‘sweep-up’ discretion which it can use to refuse
leave if the other three conditions are met. There is however precious little
guidance on the operation of the section. As a matter of practice, once the court
has wrestled with and overcome the “‘obviously wrong” or “‘serious doubt” test in
s.69(3)(c) then satisfaction of this condition is likely to follow as a matter of
course”

(e) Application to court

Content of application. The application for permission to appeal against 8-147

the tribunal’s decision on a question of law must in the arbitration claim form
“identify the question oflaw; and state the grounds on which the party alleges that
permission should be given”’.°’* This may not be easy where questions of fact and
law are mixed, but an attempt must be made. As the parties are not entitled to a
hearing,°’° it is particularly important that the grounds relied on for the applica-
tion are carefully prepared. Depending on the particular case, such grounds
should include, for example, the fact that an identified point of law of public
importance is involved, with sufficient detail to enable the judge to make up his
mind without argument from the parties. Such other information should be
provided as will persuade the judge that it would be just and proper for the court
to determine the matter. However, “‘Any written submission placed before the court in
support of an application for permission to appeal from findings in an arbitral award
should normally be capable of being read and digested by the judge within half an
HOUfe er
Lengthy submissions which drew “‘fine lines” are at odds with both the spirit
of the legislation and the ethos of the Commercial Court.*””

Extraneous evidence. The content of the written evidence in support of 8-148

and in opposition to the application are specified in the Arbitration Practice
Direction,>”® which must be followed strictly.°” It is not normally appropriate to
refer to transcripts, submissions and evidence in the arbitration “but in addition
to the award the court should also receive a copy of any document referred to in

573 The ground was not considered at all in The Northern Pioneer CMA CGM SA v Beteiligungs KG
[2002] EWCA 1878.
574 Practice Direction 62, para.12.1 which follows closely s.69(4) of the Arbitration Act 1996. The
general procedure for applications to the court is described in paras 8-178 et seq. but an application
for permission to appeal is subject to special provisions which are specified in PD 62, paras 12.2 and
12.3.
575 Section 69(5) of the Arbitration Act 1996: see para.8—149.
576 The Northern Pioneer (CMA CGM SA v Beteiligungs KG [2003] 1 Lloyd’s Rep. 212) where the
Court of Appeal criticised a lengthy submission.
°77 The Northern Pioneer, at [23].
578 Practice Direction 62, paras 12.2 and 12.3.
579 Pytrabali Ayamula v Epices and Another [2003] 2 Lloyd’s Rep. 700 where “exceptionally” the judge
allowed argument of a ground that had not been identified in a response to the application for
permission to appeal.
 518 The Role of the Court after the Award

the award’’.°’° It should not include inadmissible evidence or argument about

factual issues which the tribunal has decided.**!

8-149 Procedure on application for permission to appeal. The court is

required to determine the application for permission to appeal under s.69 on paper
and without a hearing “‘unless it appears to the court that a hearing is required”’.°**
The parties are not entitled to demand a hearing. The Court of Appeal has said
that it would be impossible to lay down guidelines for judges determining an
application for an oral hearing under s.69(5) of the Act other than that they should
seek to determine such applications ‘‘without unnecessary delay or expense.’””*?
This procedure differs from that of the previous legislation which permitted a
brief argument.*** The procedure may differ, however, where there are multiple
applications.°*°

“Although applications for leave to appeal under s. 69 are normally on paper without an
oral hearing, the course adopted in the present case of hearing oral argument on the
application for leave at the same hearing as for the s. 68 application is a sensible and a
more... efficient approach, particularly [where] the underlying facts and legal submis-
sions relevant to both applications are so related.”°*°

8-150 Multiple applications. Nevertheless, attempts to get a hearing by raising in

one application matters under s.69 as well as under ss.67 and/or s.68 have been
criticised by the court.°*”

8-151 Procedural issues. Where the court decides that a hearing is required for the
application for permission to appeal, one judge may hear that application and
another will hear any appeal.°*** It is often more efficient however for the same
judge to decide the appeal**”’ particularly where there is some urgency, or where

°*° Kershaw Mechanical Services Lid v Kendrick Construction Ltd (2006) EWHC 727 at [45]; Walsall
MBC v Beechdale Community Housing Association Lid [2005] EWHC, [17], [21], [22]; Surefire
Systems Ltd v Guardian ECL Ltd [2005] B.L.R. 534, [22]; HOK Sport Ltd (formerly Lobb
Partnership Ltd) v Aintree Racecourse Co Ltd [2003] Lloyd’s Rep. P.N. 148.
8! Surefire Systems v Guardian ELC Ltd |2005| EWHC 1860 for comments on an application for leave
to appeal.
° Section 69(5) of the Arbitration Act 1996 and CPR r.69.10(4)(b). A hearing may take place when
an application for permission to appeal is combined with an application to challenge the award
under s.68 of the Act.
83 BLOT (13096) Lid v J. Sainsbury Ltd {(2004] 2 P. & CLR. 3.
°*4 per Lord Donaldson M.R. in [pswich Borough Council v Fisons Ple |1990] 1 All E.R. 730 at 732,
GAR
585 See para.8—114.
°° Bulfracht (Cyprus) Lid v Boneset Shipping Co Ltd (the ‘‘Pamphilos”’) [2002] 2 Lloyd’s Rep. 681, per
Colman J.
87 Sinclair v Woods of Winchester [2005| EWHC 1631; Surefire v Guardian [2005] EWHC 1850 (TCC)
and Plymouth v Jones [2005] EWCH 2356 (TCC).
°*8 This is a practice that developed in the Commercial Court before the Arbitration Act 1996: see
Hiscox v Outhwaite (No.2) {1991] 3 All E.R. 143, CA.
°° The Agios Dimutrios [2005] 1 Lloyd’s Rep. 23, per Colman J. at [25] followed in Miranos International
v Voc Steel (2005) EWHC 1812.
 Appeal on Question of Law 519

(despite the Lords? exhortations in The ‘‘Nema’’) the matter has been argued in
detail and the position is totally and unanswerably clear.>”°

Reasons for the grant or refusal of permission to appeal. If 8-152

permission to appeal is refused, the judge must give sufficient reasons to enable
the losing party to understand why the judge has reached his decision. Such
reasons can be very short.*’’ At the very least an unsuccessful applicant for
permission to appeal should be told which of the threshold tests in s.69(3) of the
Act he failed. Usually it will not be necessary for the judge to go further and
explain why the relevant test was not achieved.

Variety of orders. If permission is given and the court hears the appeal it 8-153
may by order confirm the award, which effectively means that the appeal is
dismissed. On occasions the application for permission to appeal and the actual
appeal, if permission is granted, will be heard together.*’’ This would only happen
if the court exercises its discretion to hold a hearing to consider the issue of
permission. Even if a case is made out the court is not obliged to set aside the
award, either in whole or in part, but may vary it®*”’ or may remit it to the tribunal
in whole or in part for reconsideration in the light of the court’s determination.°”*
Indeed the court is directed not to “‘exercise its power to set aside an award, in
whole or in part, unless it is satisfied that it would be inappropriate to remit the
matters in question to the tribunal for reconsideration”.*”? The court may require
the appellant to provide security for the costs of any appeal°”® or order that any
money payable under the award shall be brought into court or otherwise secured
pending the determination of the appeal.°”’

Scope of discretion. It is apparent from what is said in the previous 8-154

paragraph that s.69(7) of the Act gives the court a measure of discretion when it

50 Brandeis (Brokers) v Black [2001] 2 All E.R. (Comm) 980; Hiscox v Outhwaite (No.2) [1991] 3 All
E.R. 143, CA; and The “TFL Prosperity” [1982] 1 Lloyd’s Rep. 617. This situation will only occur
where the court requires a hearing (see s.69(5) of the Arbitration Act 1996).
5°! Practice Direction, para.12.5. The change to previous practice of not giving reasons for refusal of
permission to appeal was required by virtue of Art.6 of the Convention for the Protection of Human
Rights and Fundamental Freedoms, as incorporated into English law by the Human Rights Act
1998. See North Range Shipping Lid v Seatrans Corp [2002] 1 W.L.R 2397; Northern Pioneer at
[20].
$92 Be procedure was adopted in Miranos International Trading Inc v VOC Steel Services BV [2005]
EWHC 1812.
593 In Fence Gate Lid v NEL Construction (December 5, 2001) QBD (T&CC), H.H. Judge Thornton
Q.C. varied an order for costs made by the arbitrator. A variation to the arbitrator’s award was also
made in Galliford (UK) Ltd v Aldi Stores (March 8, 2000) QBD (T&CC) H.H. Judge Bowsher
iG:
34 pene 69(7) of the Arbitration Act 1996. See, e.g. Marc Rich Agricultural Trading SA v Agrimex
Ltd (April 6, 2000).
5°5 Section 69(7) of the Arbitration Act 1996.
5% Section 70(6) of the Arbitration Act 1996 which also provides that the appeal may be dismissed if
an order for security is not complied with. See para.8-206 for discussion.
57 Section 70(7) of the Arbitration Act 1996, which also provides that the court may direct that the
appeal be dismissed if such an order is not complied with. See para.8—208 for discussion.
 520 The Role ofthe Court after the Award

comes to deciding what order is most appropriate to give effect to its decision on
an appeal against an arbitration award. That discretion does not, however, allow
the court to take into account matters outside the scope of the appeal itself.°”*
Where such matters do arise, the proper procedure suggested is to oppose the
application for leave to appeal, file evidence in support of the matter and request
an oral hearing. It is usually too late to raise the matter at the hearing of the appeal,
although in order to avoid serious injustice, the court might be justified in
reopening a decision giving permission to appeal.*?”

(f) Appeal to Court of Appeal

8-155 Approach of the court. Although the judge’s decision on the application
for permission to appeal against an arbitral award should usually be final, there are
two possible means of appeal to the Court of Appeal. The first is against a grant
or refusal of permission to appeal.®° The second is against any decision of the
court that hears an appeal on a question of law. In both cases permission of the
court making the decision is ostensibly required (subject to the comments below
in this paragraph), and in the second case the court must be of the view “‘that the
question [of law concerned] is one of general importance or is one which for some
other special reason®’ should be considered by the Court of Appeal”’.°°? Despite
the clear language of s.69(8) the Court of Appeal can now override the judge’s
decision to refuse leave in certain cases.

8-156 Meaning of “the court”. Permission of the court is required to appeal

from a decision of the court made under s.69(8) of the Act.° It had been thought
that reference to “the court” under both sections was to the court which made the
order®”* and that in the absence of such an order from that court the Court of
Appeal could not consider the matter. The former position was stated as follows,
“Parliament has made it completely clear that in this respect the decision of the
judge is to be final, unless the judge himself considers that there are matters which
are fit to be considered by the Court of Appeal so as itself to grant leave’’.°°

8 Tcan Navigation Corp v Sinochem International Petroleum (Bahamas) Co {2003] 1 All E.R. (Comm)
405, where the court refused to take account of the possibility of the tribunal having committed an
irregularity if the court allowed the appeal.
»” Tcan Navigation, supra, per Moore Bick J.
609 Section 69(6) of the Arbitration Act 1996. An appeal against the judge’s refusal of leave was heard
and dismissed in CMA CGM SA v Beteiligungs KG and Another (The Northern Pioneer) [2003]
Lloyd’s Rep. 212.
°°! Tt is doubtful whether the amount at stake would by itself constitute a special reason. Compare
British Gas Ple v Dollar Land Holdings Ple [1992] 12 E.G. 141 with Prudential Assurance Co Ltd v
99 Bishopsgate Ltd [1992] 03 E.G. 120. The fact that the judge has differed from the views of an
experienced arbitrator cannot be a special reason for these purposes: The ‘Nicki R’’ [1984] 2 Lloyd’s
Rep. 186. See also The “Pera” [1985] 2 Lloyd’s Rep. 103.
Section 69(8) of the Arbitration Act 1996, which replaced with some modifications s.1(7) of the
Arbitration Act 1979,
3 Sections 42(5) and 44(7) of the Arbitration Act 1996.
4 Because of the definition of court in s.105(1) of the Arbitration Act 1996,
5 Virdee v Virdi [2003] EWCA Civ 41.
 Appeal on Question of Law 521

Excess of jurisdiction. However, two separate lines of decisions of the 8-157

Court of Appeal have weakened the proposition that the judicial decision taker at
first instance is the only competent body to grant leave to appeal from his own
decision. Following Cetelem v Roust,°”° which dealt with the identical provision in
relation to appeals under s.44(7) of the Act, the distinction is now to be drawn
between appeals to orders which the judge had jurisdiction to make, although it is
alleged he erred in fact or in law in making the order, and orders which he had no
jurisdiction to make. The Court of Appeal can give permission to appeal in respect
of the latter type of orders, where the judge at first instance has no jurisdiction to
make the order in question, even where the judge himself has refused leave to
appeal. As the Court of Appeal noted in Cetelem:

“So long as the judge could make the order in the sense that it was within the jurisdiction
specified in the relevant section, the buck stops with him. The order is made under the
section. It is only where the judge makes an order which is outwith his jurisdiction, so
that he could not (as opposed to should not) make it, that s.44(7) and other similar
provisions do not prevent an appeal to this court.”°””

Quite how easy this distinction is to operate in practice remains to be seen. In

Lesotho Highlands v Impreglio,°** the House of Lords when considering a challenge
under s.68 of the Arbitration Act 1996 rejected an argument that an error as to the
currency of an award constituted an excess of powers. However, this matter was
argued strongly on both sides all the way up to the House of Lords and the
concepts are elusive. The field of administrative law is full of examples of the
difficulty in drawing a distinction between a simple error (within jurisdiction) and
acting outside of jurisdiction.°”

Orders on preliminary points. In a closely related decision, the Court of 8-158

Appeal has held in respect of an appeal based on a preliminary point about
whether s.69 applies at all (because of a question whether a valid exclusion
agreement had been entered into) the Court of Appeal does have jurisdiction to
grant leave in respect of such questions.°'? The Court of Appeal canvassed but did
not decide the possibility that the opt out wording in s.44(1), “unless the parties
otherwise agree” may also be a preliminary point as to whether that section applies
at all.

Residual jurisdiction regarding unfairness. The Court of Appeal 8-159

also has a residual jurisdiction to set aside the judge’s decision in the case of
unfairness relating to the process of the judge’s decision. The distinction is

606 Cetelen SA v Roust Holdings Lid [2005] 1 W.L.R. 3 DDD:

97 Cetelem SA v Roust Holdings Ltd [2005] 1 W.L.R. 3)55 3555, per Clarke L_J., at [25].
cc? (2006 IMAL G22
609 Pearlman v Keepers and Governors of Harrow School [1978] 3 W.L.R 736 at 743: “The distinction
between an error which entails absence of jurisdiction and an error made within jurisdiction is
fine... it is rapidly being eroded”.
610 Sukuman Ltd v Commonwealth Secretariat [2007] EWCA 243; [2007] Bus. L.R. 1075, [27]-[34].
 a22 The Role of the Court after the Award

therefore to be drawn between appeals from the judge’s refusal to give leave on the
merits where, save for cases where there was no jurisdiction for the underlying
decision, there is no appeal and cases where, “‘the judge’s refusal of leave to appeal
was arbitrary or unfair: or was the product ofafailure of intellectual engagement with
the arguments put before him; or amounted actually or metaphorically to the absence of
a decision on the issue’’.°'' In such ‘‘exceptionally rare cases’’°'* the Court of Appeal
can ofits own motion consider appeals even where leave of the first instance judge
has not been given. The Court of Appeal has also rejected the argument that this
residual discretion is contrary to Article 6 of the European Convention of Human
Rights.°'?
The sub-section also provides that a decision of the court on an appeal under
this section shall be treated as a judgment of the court for the purposes of a further
appeal, although it does not appear that these words in the first sentence of s.69(8)
make any practical difference to the court’s consideration of the question of the
right to appeal.°'*

8-160 Worthy of consideration by Court of Appeal. The “Nema” guide-

lines as enacted by s.69(3) of the Act do not apply as such to applications for
permission to appeal to the Court of Appeal.°'? Rather, the test for the judge
deciding the matter is whether the question of law is worthy of consideration by
the Court of Appeal. This can include situations where there are known to be
different schools of thought on an issue and the Court of Appeal given its chance,
might support one or the other of them.°'°

8-161 Terms for appealing. The court may impose such terms as it considers
appropriate on the granting of permission®'’ to appeal to the Court of Appeal.
These terms may include security for costs or a requirement that any money
payable under the award shall be brought into court.°'®

°11 CGU International Insurance Ple and Others v Astra Zeneca Insurance Co Ltd [2006] EWCA 1340,
per Rix LJ. at [98], approving North Range Shipping Ltd v Seatrans Shipping Corp [2002] 1 W.L.R.
2397. Approved in Kazakhstan v Istil Group Inc [2007] W.L. 1425725, para.11. See also ASM
Shipping Lid ofIndia v TTMI Ltd [2006] EWCA 1341, a decision under s.68(4), which is in similar
terms as s.69(8).
12 CGU International Insurance Ple and Others v Astra Zeneca Insurance Co Ltd [2006] EWCA 1340,
per Rix LJ. at [100].
3 Kazakhstan v Istil Group Inc [2007] W.L. 1425725, following CGU International Insurance Ple and
Others v Astra Zeneca Insurance Co Lid [2006] EWCA 1340.
°1* These words are also used as used in ss.32(6) and 45(6); the other two instances where the court is
given jurisdiction to rule de novo on a substantive issue itself, rather than reviewing a decision of an
arbitral tribunal. The wording is derived from s.2(3) of the Arbitration Act 1979 Act, which
provided that a decision by the court on a preliminary point of law was ‘deemed to be a judgment
of the court” within the meaning of s.27 of the Supreme Court of Judicature (Consolidation) Act
1925.
°° Geogas SA v Trammo Gas Lid (The ‘‘Baleares’”’) [1991] 1 Lloyd’s Rep. 349, CA, [1991] 2 W.L.R.
794. Cf. The “Roachbank” [1988] 2 Lloyd’s Rep. 337.
°16 Paragraphs 58-60. Citing with approval Sir John Donaldson in The Antaios [1983] 1 W.L.R. 1362
at 1369-1370, but qualifying the test laid down in The Nema.
17 Section 70(8) of the Arbitration Act 1996.
8 Section 70(8) of the Arbitration Act 1996, replacing s.1(4) of the Arbitration Act 1979. See, e.g.
Nature Conservatory Council for England v Deller [1992] 43 E.G. 137.
 Orders in Respect of Challenges and Appeals 523

8. ORDERS IN RESPECT OF CHALLENGES AND APPEALS

Introduction. The Arbitration Act 1996 empowers the court to make orders 8-162
in connection with an application challenging an award®’” or an appeal against the
award.°*° If the court is inclined to grant such an application or permission to
appeal but considers that terms should be imposed it may order the applicant or
appellant to provide security for costs°?! or to bring into court any amount ordered
to be paid by an award.°”?
In the case of a successful challenge to substantive jurisdiction under s.67(3),
the court has no express power to remit the award but can only vary the award or
set it aside in whole or in part. However, the Court of Appeal has decided that in
such case the tribunal is not functus officio and the arbitration may in appropriate
cases carry on or revive as necessary, even if the tribunal had purported to issue
a final award on the merits.°** In the other two cases (i.e. challenge for serious
irregularity or appeal on a question of law) the presumption is remission of the
award; the Arbitration Act states that the court shall not exercise its more
extensive powers (e.g. to set aside) unless it is satisfied that it would be inap-
propriate to remit the matters to the tribunal for reconsideration.°** Whether it
would be inappropriate will depend on the particular irregularity, but some
guidance can be obtained from the decisions of the courts, as will be indicated in
the following paragraphs.°*? The prerogative orders applicable in judicial review
proceedings are not available against an arbitral tribunal.°*°

Remission of the award. The court has a discretion to remit an award to 8-163
the tribunal for reconsideration under the Arbitration Act 1996,°’’ although the
exercise of that discretion is constrained by the need to preserve the finality of
arbitration awards.°’* Other factors may be taken into consideration including the

619 Arbitration Act 1996, ss.67(3) and 68(3).

620 Arbitration Act 1996, s.69(7).
21 Section 70(6) of the Arbitration Act 1996.
622 Section 70(7) of the Arbitration Act 1996.
623 Hussmann (Europe) Lid v Pharaon [2003] 1 All E.R. (Comm) 879.
©24 Arbitration Act 1996, ss.68(3) and 69(7).
625 Some pre-1996 decisions are still useful in respect of remission and setting aside.
626 R y National Joint Council for the Crafi of Dental Technicians (Disputes Committee), Ex p. Neate
[1953] 1 QB. 704, CA. As explained in Bremer Vulkan Schiffbau Und Maschinenfabrik v South India
Shipping Corp [1981] 1 All E.R. 289 at 295-296, the jurisdiction of the court to supervise the
conduct of an arbitration is confined to exercising its powers under the arbitration legislation
(subject of course to the vexed issue of the exercise of inherent jurisdiction: see para.7—003
above).
627 This was done in Mare Rich Agriculture Trading SA v Agrimex Ltd (April 6, 2000), Langley J. See
ss.68(3)(a) to 69(7)(c) of the Arbitration Act 1996 which replaced s.22 of the Arbitration Act 1950.
They apply respectively where there has been a serious irregularity or an error of law in the award.
This was also done in Louis Dreyfus Trading Lid v Reliance Trading Ltd [2004] 2 Lloyd’s Rep. 243
for the tribunal to reconsider quantum of damages.
628 See, e.g. Secretary of State for the Environment v Reed International Ple {1994] 06 E.G. 137.
 HLS The Role of the Court after the Award

need to express clear findings in respect of the relevant issues.°”? Despite finding
that two awards were made following serious irregularities®” affecting both the
proceedings and the awards, the court in RC Pillar & Sons v Edwards®*' decided
to remit the awards to the tribunal in order to avoid serious injustice to at least one
of the parties. An award will not be remitted, however, if doing so would serve no
useful purpose, for example because it would be inevitable that the award would
be varied as proposed by the court,°* or there is no evidence on which the tribunal
could reach any decision other than the one already made, in other words where
the conclusion reached by the court is now the one which adopting the proper
principles would have to be adopted by the tribunal.°*? Nor will an award be
remitted unless there is something further for the tribunal to consider and upon
which its judgment could be exercised afresh.°**
Where the irregularity cannot be cured, the court may set the award aside. This
may occur, for example, where the integrity of the tribunal is impugned.**°
The remission of an award does not deprive it of legal effect. It continues to
operate so as to make the tribunal “‘functus officio”, unable to alter the award, on
those matters which were not remitted.°*°

8-164 Setting aside the award. The Arbitration Act 1996 empowers the court to
set aside an award, in whole or in part, upon hearing an application to challenge
the tribunal’s substantive jurisdiction.°*? Where the ground for challenge is a
serious irregularity®’® 638 or the application is in the nature of an appeal against the
award on a point of law,°*’ 639 the court will only set aside the award (in whole or in
part) if it 1s satisfied that it would be inappropriate to remit it to the tribunal for
reconsideration.’ Thus, where a partial award was made and subsequent events
or a change of circumstances had rendered the award unduly advantageous to one
party, it was not appropriate to remit that award to the tribunal for further

©° Pentonville Shipping Ltd v Transfield Shipping Inc (the Johnny K) [2006] EWHC 134.
°° Serious irregularity is defined in s.68(2) of the Arbitration Act 1996. See paras 8-072 et seg.
°' RC Pillar & Sons Ltd v Edwards (January 11, 2001) H.H. Judge Thornton Q.C. See also Miranos
v Voc Steel (2005]| EWHC 1812 at [36] and [37].
°2 Skanska Construction v. Anglo-Amsterdam Corp Ltd [2002] 84 Con L.R 100. Vrinera Marin v Eastern
Rich Operator (the Vakis T) [2004] 2 Lloyd’s Rep. 465.
°° Covington Marine Corp v Xiamen Shipbuilding Industry Co Ltd [2005] EWHC 2912, [67]; Montedipe
SpA and Another v JTP-RO Jugotanker (The ‘Jordan Nicolov’’) [1990] 2 Lloyd’s Rep. 11.
°4 Glencore Grain Ltd v Flacker Shipping (the ‘Happy Day’’) (2001) 1 Lloyd’s Rep. 754 and Islamic
Republic of Iran Shipping Lines v Zannis Compania Naviera SA (The “'Tzelepi’’) (1991] 2 Lloyd’s
Rep. 265. See also Equitorial Traders Lid v Louis Dreyfus Trading Lid [2002] 2 Lloyd’s Rep. 638
where the award could not be saved. Covington Marine Corp » Xiamen Shipping Industry Co Ltd
[2005] EWHC 292 at [67].
°° David Taylor & Son Ltd v Barnet Trading Co [1953] 1 W.L.R. 562. In this case the umpire
apparently ignored evidence of illegality of the underlying contract.
°° Carter v Harold Simpson Associates [2004] 2 Lloyd’s Rep. 512, PC.
°7 Arbitration Act 1996, s.67(3)(c). For illegality see para.8—031.
68 Arbitration Act 1996, s.68(3).
639 Arbitration Act 1996, s.69(7).
4 Arbitration Act, 1996, ss.68(3) and 69(7).
 Orders in Respect of Challenges and Appeals 525

consideration. Rather, the tribunal should take the new matters into account when
making its final award.°*!

Award of no effect. In the case of a serious irregularity under s.68, the court 8-165
is expressly empowered by the Arbitration Act 1996 to declare the award to be of
no effect, in whole or in part.°* If the tribunal still retains jurisdiction in relation
to other matters,°** it may make a further award within its jurisdiction.®* It also
appears that in the case of lack of substantive jurisdiction under s.67, the court
may declare an award to be of no effect, even though such facility does not appear
in the list of orders which the court may make under s.67(3). However, the Court
of Appeal has decided that the distinction between an order setting aside an award
and one declaring it to be of no effect is one without a difference.°*? In such
circumstances, the court may permit the tribunal to make a further award in
circumstances where it would otherwise have been functus officio.°*°

Grounds for remission, setting aside, etc. The Arbitration Act 1996 8-166
does not specify the circumstances in which the court should remit an award to the
tribunal, but it does indicate when that power may be available. Although the
courts had previously sought to limit the categories of cases in which the power to
remit could be exercised,°*’ it is now established that the power is a general one.°**
Provided that the conditions for the application or an appeal are fulfilled, the court
has power to remit, although in exercising its discretion the court will take account
of the relevant circumstances of each particular case. For a discussion on the
circumstances in which an award may be remitted to the tribunal see para.
8-163.

Fresh evidence. If fresh evidence comes to light subsequent to the making of 8-167
a final award, the tribunal may be unable to take account of it because the tribunal’s
duties will have been completed.° Although there is power to make an additional
award, that power is limited to a claim “which was presented to the tribunal but
was not dealt with in the award’’.®°® Given the limits imposed on court inter-
vention by the Arbitration Act 1996,°°' the court apparently lacks power in the

“41 BMBF v Harland and Wolff Shipbuilding [2001] 2 All E.R. (Comm) 385, CA.
#2 Section 68(3)(c) of the Arbitration Act 1996.
643 Where the award is a partial award, for example, the tribunal would still retain jurisdiction in
relation to the remaining issues.
64 Petroships v Petec Trading (the “Petro Ranger’’) [2001] 2 Lloyd’s Rep. 348 at 351.
65 Hussmann (Europe) Lid v Pharaon (2003) EWCA Civ 266; [2003] 1 All E.R. (Comm) 879.
646 Hyssmann (Europe) Ltd v Pharaon [2003] EWCA Civ 266; [2003] 1 All E.R. (Comm) 879.
647 Four categories of cases were identified in Montgomery Jones & Co v Liebenthal & Co (1898) 78 L.T.
406, but not all of them still apply.
648 See King v Thomas McKenna Lid [1991] 1 All E.R. 653 at 660, CA.
4 See para.6—-166 above.
650 Section 57(3)(b) of the Arbitration Act 1996.
651 As a result of the repeal of Pt 1 of the Arbitration Act 1950 and the terms of ss.67, 68 or 69 of the
Arbitration Act 1996, the court does not seem to retain its right to remit where fresh evidence
emerges and the inherent jurisdiction retained by s.81(1) of the Act does not seem to apply
here.
 526 The Role of the Court after the Award

absence of serious irregularity’ to overcome the difficulty by remitting the award

to the tribunal for reconsideration in the light of the fresh evidence.®”*

8-168 Further requirements. Even when serious irregularity can be established,

the party seeking to challenge the award®** must at least show that (i) he did not
have the evidence at the time of the arbitration (11) he could not have got it at the
time of the arbitration by the exercise of due diligence (iii) had he had it, it would
be likely to have had a substantial effect upon the result of the arbitration and (iv)
where appropriate, that he had no opportunity to ask for the tribunal to delay
issuing the award while he considered whether it was possible to get evidence of
the type which he now seeks to introduce.°””

8-169 Accidental error. Unless the tribunal admits an irregularity,°*° the court no
longer has a general power to order remission where the tribunal has made an
accidental error in an award®’ which cannot be corrected by the tribunal. When
the error consists of a failure to deal with a material issue which has caused or will
cause substantial injustice to the applicant,°°* the court may remit the matter to
the tribunal for consideration.

8-170 Role of tribunal. The tribunal itself usually has power to correct a clerical
error or an accidental slip or omission, or to remove an ambiguity in an award,°”
so the circumstances in which the court will be called upon to order remission for
accidental error will be exceptional. This may occur, however, where the tribunal
does not comment on the existence or otherwise of the alleged error and the court
is satisfied that there is a serious irregularity causing substantial injustice.°© In this
situation however, the applicant may have lost the right to object to the award as
if he did not exhaust available recourse to the tribunal.°°*

°°? See para.8—-103 above.

3 Burnard v Wainwright (1850) 19 L.J. Q.B. 423; Re Keighley, Maxsted & Co and Bryan Durant & Co
[1893] 1 Q.B. 405; Sprague v Allen & Sons (1899) 15 T.L.R. 150. These decisions were based on
the previous law which has been repealed but they probably reflect the position under the current
law.
®4 The applicant would have to bring the application under s.68 of the Arbitration Act 1996 and show
that there was some irregularity of the kind described in s.68(2)(g) or (1).
°° In the context of s.68, see DDT Trucks of North America Lid v DDT Holdings Ltd [2007] EWHC
1542, [22], [23]. The “Stainless Patriot” [1979] 1 Lloyd’s Rep. 589. See also EM Dower & Co v
Corrie, MacColl & Son Ltd (1925) 22 Lloyd’s Rep. 256; The Ben Line Steamers Lid v Compagnie
Optorg of Saigon (1936) 42 Com. Cas. 113; The “Eleftheria Niki” [1980] 2 Lloyd’s Rep. 252.
°° Section 68(2)(i) of the Arbitration Act 1996 defines such an admission as a serious irregularity,
which gives the court power to remit, among others. See s.68(3) of the Act.
°7 Mutual Shipping Corp v Bayshore Shipping Co Ltd (The ‘““Montan”’) [1985] 1 Lloyd’s Rep. 189 [1985]
1 W.L.R. 625. The error was admitted in this case.
8 This additional requirement is necessary to comply with the terms of s.68(2) of the Arbitration Act
1996.
© Section 57 of the Arbitration Act 1996 which replaces s.17 of the Arbitration Act 1950. See further
paras 6-167 and 6-173.
669 Section 68 of the Arbitration Act 1996: see para.8—072.
6o0a See paras 8-064, 8-109 and 8-122. /
 Orders in Respect of Challenges and Appeals 527

Admitted error. Where the tribunal admits an error in the award (or that 8-171
something was wrong with the conduct of the proceedings) there will be an
irregularity, and if the court considers that the applicant has or will suffer
substantial injustice, it may remit the award to the tribunal for correction or vary
the award itself.°°

Who may apply? The tribunal is no longer entitled to apply to the court to S172
have an award remitted to it in order to correct an error in an award,” although
it can do so itself under s.57 of the 1996 Act. The application for remission based
on serious irregularity is only available to a party to the arbitral proceedings.°™

Combined application. An application to set aside the award may be made 8-173
in conjunction with an application to remove the tribunal and appoint a replace-
ment.®* An application to set aside is often made in the alternative to an
application to remit the award to the tribunal because, unless there is a challenge
to the substantive jurisdiction of the tribunal, the court has a discretion which
remedy to apply in the event of a successful application.°°

Procedural orders. Remission is available only in respect of an award: it 8-174

cannot be granted in respect of a pre-award ruling.°°’ There is no inherent
jurisdiction in the court to remit in order to correct procedural errors in the
course of the reference or otherwise.°”

The tribunal’s jurisdiction on remission. When a final award is made 8-175

the tribunal completes its duties and its jurisdiction over the matters referred
comes to an end.°** The effect of the award being remitted is to confer further
jurisdiction on the tribunal, but only so that it may reconsider the matters
remitted. If the tribunal purports to decide matters which have not been remitted
it will be acting without jurisdiction and the award will once again be capable of
challenge, this time on s.67 as well as s.68 grounds.°

°61 Section 68(2)(i) of the Arbitration Act 1996.

662 The observations made about an arbitrator’s right to apply to the court in Mutual Shipping Corp v
Bayshore Shipping Co Ltd (The ‘““Montan”’) {1985] 1 Lloyd’s Rep. 189; [1985] 1 W.L.R. 625 are no
longer good law.
663 This is apparent from the opening words in s.68(1) of the Arbitration Act 1996.
664 Sections 24(1) and 27 of the Arbitration Act 1996. This was done in Kalmneft v Glencore
International [2002] 1 All E.R. 76 although the applications in that case were dismissed.
665 Section 68(3) of the Arbitration Act 1996, replacing the Arbitration Act 1950, s.25(2). See
para.8—153.
666 Three Valleys Water Committee v Binnie & Partners [1990] 52 B.L.R. 42.
667 The court’s powers are generally limited by the Arbitration Act 1996, although a limited jurisdic-
tion is preserved by s.81(1) of the Act.
668 See para.6—166.
669 Fidelitas Shipping Co Lid v v/o Exportchleb {1965} 1 Lloyd’s Rep. 223 at 231. See also Glencore
International AG v Beogradska Plovidba (The “‘Avala”’) [1996] 2 Lloyd’s Rep. 311.
 528 The Role of the Court after the Award

8-176 Effect of court order. The Arbitration Act 1996 provides that the following
provisions have effect where the court makes an order under s.67, 68 or 69 with
respect to an award®””:

@ where the award is varied, the variation has effect as part of the tribunal’s
award®’!;

@ where the award is remitted to the tribunal, in whole or in part, for reconsid-
eration, the tribunal shall make a fresh award in respect of the matters
remitted within three months of the date of the order for remission or such
longer or shorter period as the court may direct®’*; and

@ where the award is set aside or declared to be of no effect, in whole or in part,

the court may also order that any provision that an award is a condition
precedent to the bringing of legal proceedings in respect of a matter to which
the arbitration agreement applies, is of no effect as regards the subject matter
of the award or, as the case may be, the relevant part of the award.°”

The last provision is intended to deal with the situation created where the
arbitration agreement contains a Scott v Avery clause.°’*

8-177 Limitation Acts. The Arbitration Act 1996 provides that the Limitation
Acts°’® apply to arbitral proceedings as they apply to legal proceedings.°”° This
provision corresponds to the Limitation Act 1980 which provides that the 1980
Act and any other limitation enactment shall apply to arbitrations as they apply to
actions in the High Court.°’’
In computing the limitation period for commencing proceedings (including
arbitral proceedings) in respect of a dispute where the court has ordered an award
to be set aside or declared to be of no effect, the court may exclude the period
between the commencement of the arbitration and the date ofits order.°’* Further,
in determining for the purposes of the Limitation Acts when a cause of action
accrued, the Arbitration Act 1996 states that any provision that an award is a
condition precedent to the bringing of legal proceedings in respect of a matter to
which an arbitration agreement applies shall be disregarded.°”

6” Arbitration Act 1996, s.71(1 ).

°7! Arbitration Act 1996, s.71(2 ).
°? Arbitration Act 1996, s.71(3 ).
73 Arbitration Act 1996, s.71(4).
°™4 For Scott v Avery clauses, see para.2—022.
7 "The Limitation Acts mean in England and Wales, the Limitation Act 1980, the Foreign Limitation
Periods Act 1984 “‘and any other enactment (whenever passed) relating to the limitation of actions”,
s.13(4)(a) of the Arbitration Act 1996. See para.7—080.
7 Section 13(1) of the Arbitration Act 1996. See Henry Boot v Alstom [2005] 1 W.L.R. 3850 at
3876.
677 Section 34(1) of the Limitation Act 1980,
78 Arbitration Act 1996, s.13(2). See paras 5—021 et seg. and 7-080.
°” Arbitration Act 1996, s.13(3). For Scott v Avery clauses generally, see paras 2-022 and 7-052.
 Procedure for Arbitration Applications a29

9. PROCEDURE FOR ARBITRATION APPLICATIONS

Introduction. The court in which an arbitration claim can and should be

8-178
commenced is specified in the High Court and County Court (Allocation of
Arbitration Proceedings) Order 1996.°*° The effect of that Order may be sum-
marised as follows:

® An arbitration claim to stay court proceedings under s.9 of the Arbitration

Act, 1996 must be commenced in the court in which the proceedings are
pending®*’;
681.

@ A claim to enforce an arbitration award under ss.66 or 101(2) of the Act may
be commenced in the High Court or in any county court®*?;

® Subject to the above two cases, all arbitration claims must be commenced and
taken in the High Court or the Central London County Court.°*

The lists in which an arbitration claim form may be issued in the High Court
or the Central London County Court are specified later in this chapter.°**

Criteria for transfer between court. The criteria for the transfer of 8-179
arbitration applications from one court to another are:

® the financial substance of the dispute referred to arbitration, including the

value of any claim or counterclaim;
@ the nature of the dispute referred to arbitration (for example, whether it
arises out of a commercial or business transaction or relates to engineering,
building or other construction work);
@ whether the proceedings are otherwise important, and in particular whether
they raise questions of importance to persons who are not parties;

@ the balance of convenience points to having the proceedings taken in the

Central London County Court Mercantile List; and
@ where the financial substance of the dispute exceeds £200,000 the proceed-
ings shall be taken in the High Court unless the proceedings do not raise
questions of general importance to persons who are not parties.°*°

Contents of this part. This part of the chapter will comment principally on 8-180
arbitration applications made under the Arbitration Act 1996. It will begin with

680 ST 1996/3215 (L..16), a copy of which is included in Appendix 1.

681 Article 3 of the above-mentioned Order. See also PD 62.3, para.2.1.
82 Article 4 of the above-mentioned Order.
683 Articles 2 and 5 of the above-mentioned Order. See PD 62.3, para2.
684 See para.8-188.
685 These criteria appear in art.5(4) of the above-named statutory instrument.
 530 The Role of the Court after the Award

the relevant rules of court and continue by commenting on the procedure for most
arbitration applications.°*° Mention will then be made of those applications that
have special provisions.°*” It will conclude with the procedure for applications to
enforce an award,°** to set aside an enforcement order’ and registration of an
award.°”°

8-181 Rules of court. In order to give effect to the Arbitration Act 1996, amend-
ments were made to the court rules. In particular, the former rule of court was
completely redrafted®' and is now to be found in CPR Pt 62 and the Arbitration
Practice Direction. CPR Pt 62 and the Arbitration Practice Direction®’™ apply to
arbitration business commenced both in the High Court and in the Central
London County Court Mercantile List.°??°’*

8-182 Application of other rules of court. Other rules of court apply to

arbitration claims, such as those relating to service out of the jurisdiction,°”
depending on the court in which the arbitration claim form is issued or trans-
ferred,”

8-183 Form of application. Subject to the transitional provisions, an arbitration

claim form must be made substantially in the form set out in the Arbitration
Practice Direction®”’ and contain the information specified in that direction.°*
Among other things, it must specify the persons on whom the form is to be served,
stating their role in the arbitration and whether they are defendants or state that
the application is made without notice.°’? This multi-purpose form will be used
for all applications in respect of arbitrations to which the Arbitration Act 1996
applies.’°°

686
See paras 8-181 et seq.
687 See paras 8-210 et seq.
88 See paras 8-219 et seq.
689 See para.8—224.
690 See para.8—225.
©"! The Rules of the Supreme Court (Amendment) Order 1996 (SI 1996/2892), which came into force
on January 31, 1997, and has since been amended, replaced RSC, Ord.73 with CPR Pt 62. See
Appendix 1,
61a See Appendix 1.
PEIN SAND) (Oday SELENA,
695 CPR Pt 6.24-29—See CPR 1.62.5(3) and para.8—191.
6 CPR Pt 58 and PD 58, supplemented by the Admiralty and Commercial Courts Guide (7th
Edition, 2006) apply to claims in the Commercial Court of the Queen’s Bench Division of the High
Court; CPR Pt 59 and PD 59 and guide apply to claims in the Mercantile Courts; and CPR Pt 60
and PD apply to claims in the Technology and Construction Court.
7 Practice Direction 62, para.2.2 specifies that an arbitration claim form must be in the form set out
at Appendix A to the Practice Direction.
8 See CPR r.62.4(1) for the information required.
© OPRenO2A (l(t):
iS cerRIDiG2, paravane.
 Procedure for Arbitration Applications 531

Content of arbitration claim form. Notes accompany the arbitration 8-184

claim form to assist in its completion.” Apart from the formal requirements,”
the form must:

® include a concise statement of the remedy claimed and any questions on

which the decision of the court is sought’??;
® give details of any arbitration award challenged, identifying which part or
points of the award are challenged and the grounds for the challenge”*;
® show that any statutory requirements have been met””;
@ specify under which section of the Act the claim is made”’;

@ identify against which (if any) defendant a costs order is sought’’’; and
® specify the persons on whom the claim form is to be served or state that the
claim is made without notice and the grounds relied on.’

Specify subject of challenge. The grounds of chalienge in the claim form 8-185
must be specific enough to permit the court and the other party to know exactly
what is the subject of challenge. Timely permission of the court is needed to add
further grounds of challenge or to rely on evidence not served with the claim
form.’””

Statement of truth. A statement of truth must be signed by the applicant 8-186

or his solicitor. A witness statement may be filed in support of the arbitration
claim, in which case both documents must be served together.

»
Details of agreement or permission. Where the application is made 8-187
with the written agreement of all the other parties to the arbitral proceedings or
with the permission of the tribunal, the claim form must also give details of the
agreement or permission and exhibit a copy of the written agreement or any
written permission.’!° The witness statement should be filed and a copy served
with the arbitration claim form.

701 The notes are reproduced with the arbitration claim form in Appendix 1.
702 Formal requirements include the names of the parties and the court in which the claim is to be
filed.
703 CPR 1.62.4(1)(a).
704 CPR r.62.4(1)(b). If the grounds for the challenge are not set out in the claim form, then leave will
be needed to adduce grounds later. Such leave will not lightly be given: Karl Leibinger v Stryker
Trauma GmbH [2006] EWHC 690.
705 CPR r.62.4(1)(c)
706 CPR r.62.4(1)(d)
707 CPR r.62.4(1)(e)
708 CPR r.62.4(1)(f).
709 Karl Leibinger v Stryker Trauma GmbH {2006) EWHC 690 at [27|-[31].
BOGPRey O2alo()(C):
 d62 The Role ofthe Court after the Award

8-188 Issue of an arbitration claim form. Except for applications to stay legal
proceedings’'' an arbitration claim form may be issued at any of the following
courts:

@ Admiralty and Commercial Registry at the Royal Courts of Justice in Lon-

don, in which case it will be entered in the Commercial List;

@ Technology and Construction Court Registry at St Dunstan’s House, Lon-

don, where it will be entered in the TCC List;

® District Registry of the High Court where a Mercantile Court has been
established, in which case the arbitration application will be entered into the
Mercantile List’'*;
® District Registry of the High Court with the arbitration claim form marked
“Technology and Construction Court” which will be entered in the TCC
List;

® Central London County Court, in which case the arbitration claim form will
be entered in the Mercantile List.’'*

The judge in charge of the relevant list is empowered to transfer an arbitration

application to another court or specialist list.”!*

8-189 Service of application to stay legal proceedings. An application

notice seeking a stay of legal proceedings under s.9 of the Arbitration Act 1996
must be served’! on the party bringing the relevant legal proceedings and on any
other party to those proceedings.’'° Where another party to those proceedings has
not given an address for service, CPR Pt 62 provides for service at his last known
address or at a place where the application is likely to come to his attention.’!’
Where there is a dispute about the validity or scope of the arbitration agreement,
the court may “decide that question or give directions to enable it to be decided
and may order the proceedings to be stayed pending its decision”’.2 718

8-190 Service within the jurisdiction of other arbitration applica-

tions. Any arbitration claim form must be served in accordance with CPR Pt
6,’!? unless an order is obtained for service by an alternative method.’”° For the

7\! An application to stay legal proceedings must be made in the court where the legal proceedings have
been commenced. See paras 8-189 and 8-190 for service of such an application.
7 There is a Mercantile Court in Birmingham, Bristol, Liverpool and Manchester.
73 High Court and County Courts (Allocation of Arbitration Proceedings) Order 1996 (SI 1996/3215)
which is to be read with PD 62, para.2.3.
714 CPR Pts 30, 5 and r.62.3(4). See para.8—-179 for the criteria for transfer.
715 Service is to be effected in accordance with CPR Pts 6 and 2.
LS CRRer Ole (1):
PROT 0220 (2)
718 CPR r.62.8(3). See para.7—-025.
719 CPR Pts 6 and 2 include service by first class post where there is an address for service within the
jurisdiction,
7° CPR Pts 6 and 8 mention an alternative method.
 Procedure for Arbitration Applications 533

purpose of service within the jurisdiction an arbitration application is valid for one
month unless extended by the court.’?!

Service out of the jurisdiction. Permission of the court is required for 8-191
service out of the jurisdiction of an arbitration claim form’? on a party to an
arbitration’? and may be given where:

@ the claimant seeks to challenge an award or appeal on a question of law arising

out of an arbitration award made within the jurisdiction’*; or
@ the claim is made for an order in support of arbitration proceedings under
s.44 of the Arbitration Act, 1996; or

@ the claimant seeks some other remedy or requires a question to be decided by

the court affecting an arbitration (whether started or not), an arbitration
agreement or an arbitration award.’”°

It is implicit from CPR Part 62’*° that the court will only entertain a request for
permission to serve an arbitration claim form out of the jurisdiction in respect of
the relief specified in this paragraph.

Contents of witness statement. The claim form or witness statement in 8—192

support of an application for the grant of permission to serve an arbitration
application outside the jurisdiction must:

® state the place or country where the person to be served is or may probably
be found,’*’ and
+®@ state the grounds on which the application is made’** in a way that will satisfy
the court that the case is a proper one for service out of the jurisdic-
fon,

Application of CPR. CPR Pt 6 rr.24 to 297*° will apply to the service of an 8-193
arbitration claim form under CPR Pt 62 as they apply to the service of any other

MY CPR t.O2:4(2)
22 CPRix,6225(1):
723 CPR 1.62.5 applies only to applications by and against parties to an arbitration, not to non-
parties—see Vale da Doce Novegacao v Shanghai Steel [2000] 2 Lloyd’s Rep. 1.
724 The place where an award is treated as made is determined by s.53 of the Arbitration Act 1996: see
para.6—050.
725 Tn this last case, it is a requirement that the seat of the arbitration is or will be within the jurisdiction
of the court or the conditions in s.2(4) of the Act are satisfied.
125) CBRar:6245 (0):
727 CPRat6225(2)(b):
728 CPR 1.62.5(2)(a).
729 Permission will not be given unless the court is so satisfied.
730 CPR Pt 6.24 to 29 specify the methods and proof for service of awrit out of the jurisdiction of the
High Court.
 534 The Role of the Court after the Award

claim form.”*! A certificate of service must be filed within seven days of service on
the party concerned.’*”

8-194 Permission can be set aside. Where permission for service out of the
jurisdiction is obtained on the basis of a serious non-disclosure, such as on a s.67
application failing to disclose that the issue of the arbitrator’s jurisdiction had
already been the subject of a decision of a foreign court, the permission will be
capable of being set aside.’**

3-195 The respondents or defendants.’** The arbitration claim must identify

each defendant to an application or appeal and specify his role in the arbitration”*’
as well as the relief claimed against him.’*° When the Arbitration Act requires an
application to the court to be made on notice to any other party to the arbitration,
that notice must be given by making that party a defendant.’*” Where an arbitra-
tion claim is made under ss.24, 28 or 56 of the Arbitration Act 1996, each
arbitrator must also be made a defendant.”**

8-196 Notice and service. Where notice must be given to an arbitrator or any other
person, it may be given by sending him a copy of the arbitration claim form and
any written evidence in support.’*’ Service has to be effected in accordance with
CPR P67”

8-197 Acknowledgement of service. An acknowledgement of service form”!

should accompany the arbitration claim form when it is served. Further, the
arbitration claim form itself includes notes for a defendant on how to respond to
the claim. Within 14 days’*” of service of the arbitration claim form, an acknowl-
edgment of service form should be returned to the relevant court office with a copy
to the claimant and any other party shown on the claim form.

8-198 Consequences of failing to notify intention to contest appli-

cation. Failure of a defendant to give timely notice of intention to contest the

COCPRIT62.5(5)\
7? Practice Direction 62, para.3.2.
™3 Leibinger v Stryker Trauma GmbH [2006] EWHC 690, [24]-{26].
74 Part 62 and the Arbitration Practice Direction are not consistent in terminology. In CPR r.62.4, the
term used is “defendant”; in other paragraphs the word “respondent” is used.
> CPR r.62.4(1)(f), unless the claim is made without notice under s.44(3) of the Arbitration Act
1996.
736 CPR r.62.4(1)(e), which relates specifically to a costs order.
737 CPR r.62.6(3).
PNCERO216(1)s
A CERET O2A0(2)\
™ For service outside the jurisdiction, see para.8—191.
1 'The acknowledgment of service form (N15) is reproduced in Appendix 1.
7 Fourteen days is the usual time for a defendant within the jurisdiction. The court will fix a longer
time for a defendant served outside the jurisdiction to complete and return the acknowledgment of
service form.
 Procedure for Arbitration Applications 535

arbitration application or to acknowledge service has the following conse-

quences:

@ the defendant will not be entitled to contest the application without permis-
sion of the court and
@ the court will not give that defendant notice of the date on which an
arbitration application will be heard

© but the defendant’s failure will not affect the applicant’s duty to satisfy the
court that the order applied for should be made.

Options for an arbitrator who is not made a defendant. Often 8-199

an arbitrator will be joined as a defendant to an arbitration application as much for
tactical reasons as anything else and in some extreme cases claims will be made
against the arbitrator himself.’** Where an arbitrator is not made a party to an
arbitration application but is sent a copy of the arbitration claim form for his
information he has the following options:

@ he may take no action and wait until he is notified of the outcome of the
application;

@ he may make representations in writing to the court’; or

@ he may apply to be made a defendant.’*

Court ordering arbitrator to be made defendant. Where an 8-200

arbitrator is ordered by the court to be made a defendant, he must acknowledge
service of the arbitration application within 14 days of the making of the order. If
the arbitrator chooses to file a witness statement or write to the court, he must as
soon as is practicable send a copy of any such document to the claimant.’*° The
court has a discretion as to the admissibility and weight to be given to such a
document.

Automatic directions. CPR Pt 62 provides that, ‘‘unless the Court other- 8-201
wise directs”, certain specified directions will apply automatically.’*”
Parties who do not comply with these directions will risk the dates for hearings
being vacated and/or adverse costs orders. The directions that apply automatically

743 For a discussion of the rights of the arbitral tribunal when faced with a challenge, see para.7—132.
For an example of claims being made against an arbitrator directly, see 4 v B [2006] EWHC
2006.
74 The representations may be made by filing written evidence or another written communication to
the court and sending a copy to the claimant: PD 62, para.4.3. For example, in Sukuman v
Commonwealth Secretariat [2007] EWHC 188, the chairman of the tribunal made written repre-
sentations to the court.
7 Practice Direction 62, para.4.1(1)(a).
74 Practice Direction 62, para.4.2.
747 Practice Direction 62, paras 6.1 to 6.7 inclusive.
 536 The Role of the Court afier the Award

relate to the filing of evidence, the fixing of a date for the hearing and the
preparation and lodging with the court of bundles of documents and skeleton
arguments.’**

8-202 Directions by the court. Apart from the directions that may apply auto-
matically to an arbitration application’*? the court may give such directions as to
the conduct of the arbitration application as it thinks best adapted to a just,
expeditious and economical determination.’*° To that end, the courts may permit
oral evidence and give directions for the examination and cross-examination of
witnesses.

8-203 Court power to dismiss application. The court is empowered to

dismiss an application that does not comply with the rules or directions or if the
court “‘is satisfied that the applicant is not prosecuting the application with due
dispatch”. The court may also determine it in the absence of evidence or submis-
sion from a respondent if that party fails to comply with the rules or the court’s
directions.

8-204 Hearing of applications. The court may also decide particular issues
without a hearing.’*! The clearest example of this is whether or not to give leave
to appeal on a question of law.’°'* The Arbitration Practice Direction gives as an
example the question whether the court is satisfied as to the matters set out in
s.32(2)(b) or s.45(2)(b) of the Arbitration Act, 1996.2 The court will also
generally decide, without a hearing, whether to extend the time limit under s.70(3)
of the Act.*

8-205 Public or private hearings and judgments. If the court decides to

hear an arbitration claim, it may order that the hearing be in public or in private.’**
CPR r. 62.10 is a starting point, but not a presumption.”> Unless an application
is made to the contrary the hearing, which will start in private, will remain in
private. The following two applications will be heard in public, that is in open
court, unless the court orders otherwise.’°°

78 See PID 62, paras 6:2 to 6.7.

7 See para.8—201.
”°'This follows the words “unless the court otherwise orders” in CPR 62.7 and PD 62.7, para.6.1.
*' Tn making this decision the court will have regard to the overriding objective of a just, expeditious
and economical determination of the issue.
714 Section 69(5) of the Arbitration Act 1996. See para.8—-149.
” Practice Direction 62.8, para.10.1, but the example is narrower than contemplated by PD 62.7,
para.9.3.
75 Practice Direction 62.8, para.10.2.
PS CPRen ello dy)
™ Department of Economic Policy and Development of Moscow v Bankers Trust and Another [2005] Q.B.
207, per Mance L,J. at [42].
6 CPR r.62.10(3) is expressed to be subject to an order of the court.
 Procedure for Arbitration Applications 537

® The determination of a preliminary point of law under s.45 of the Arbitration

Act 1996,”°’ but not the preliminary question whether the court is satisfied
of the matters set out in s.45(2)(b)”** and
@ An appeal under s.69 of the Arbitration Act 1996 on a question oflaw arising
out of an award,’”’ but not an application for permission to appeal.’

If a party wants any other application heard in public, it should request the
court so to order. If no request is made and the application is heard in private, the
decision of the court may then be marked private and not published. However, the
Court of Appeal, in the leading case on this issue, has emphasised the difference
between a hearing “‘in private’’’°’ and the following judgment, which should
normally be given in public.’°* The consideration that the parties have elected to
arbitrate confidentially cannot dictate the position in respect of arbitration claims
under CPR Pt 62. The proceedings are no longer consensual and where possible
general policy considerations err in favour of the proceedings and certainly the
judgment being made public. The names of the parties can be changed if needs be
to protect confidence.’°*’ Indeed, the judge should bear in mind that judgments,
especially those under s.68, should be made public and should where possible draft
judgments with that aim in mind, avoiding the unnecessary disclosure of con-
fidential information in relation to the underlying arbitration. The Court of
Appeal has even mooted the possibility of a separate confidential appendix to the
judgment containing the necessary sensitive information in order that the judg-
ment can be made public.’°t Even where a hearing starts in private the court
should be “‘ready to hear representations from one or other party that the hearing
should be continued in public’”’.”® As a matter of practice, the sheer number of
available decisions in arbitration applications suggests that more often than not
judgments are usually made public.’°°

Security for costs. In the absence of the any agreement as to security for 8-206
costs’°’ the court may order any applicant (including an applicant who has been

757 CPR 1.62.10(3)(a)(i).

78 CPR 1.62.10(4)(a).
75° CPR 1.62.10(3)(a)(ii).
760 CPR r.62.10(4)(b). There will usually not be a hearing to determine an application for permission
to appeal. See para.8-149.
761 The phrase “in private” in both CPRs r.39.2 and 1.62.10 have been taken to refer to “situation in
which a hearing would formerly have been described as being in camera or in secret, not simply in
chambers.” Department of Economic Policy and Development of Moscow v Bankers Trust and Another
[2005] Q.B. 207, per Mance L.J. at 227.
762 Department of Economic Policy and Development ibid, Court of Appeal.
763 For example, see C v D [2007] EWHC 1541.
76+ Department of Economic Policy and Development of Moscow v Bankers Trust and Another [2005] Q.B.
207, per Sir Andrew Morritt V.C., at [54].
765 Department of Economic Policy and Development of Moscow v Bankers Trust and Another [2005] Q.B.
207, per Mance L,J. at [38].
766 Interestingly, despite the general pro-public nature of the decision in Department of Economic Policy
and Development of Moscow v Bankers Trust and Another, the s.68 judgment in that case was not made
public, apparently because the judgment did contain sensitive information. No request for publica-
tion had been made in advance and so the judge had not drafted his judgment in such a way as to
de-emphasise or omit the sensitive information.
767 Section 67 of the Arbitration Act 1996 is not mandatory and may be varied by agreement.
 538 The Role of the Court after the Award

granted permission to appeal) to provide security for the costs of any arbitration
claim made under ss.67, 68 or 69 of the Arbitration Act, 1996.’°* If such an order
is made the court will direct that the application or appeal shall be dismissed if the
order is not complied with.’ ;

8-207 Grounds for exercising power. The court’s power to order security for
costs will not be exercised on the ground that the applicant is an individual
ordinarily resident outside the United Kingdom or a corporation or association
incorporated or formed under the law of a country outside the United Kingdom
or whose central management and control is exercised outside the United King-
dom.’”° This section has now been considered by the Court of Appeal, which
decided that even where agreement had been reached on security between the
parties the court could revise that sum upon a material change of circumstances.
Although oflimited application, the Court of Appeal’s decision appears to confirm
that the court’s discretion to order security is, save for the second part of s.70(6),
unfettered, and it is suggested is likely to be influenced by the CPR criteria.’”' In
other words, the application has to be based on grounds other than the origin of
the party against whom security is sought. Where the court has awarded security
in respect of the whole of an application it will not make a further order in the
absence of a material change of circumstances. age,

8-208 Security for the award. In the absence of any agreement to the contrary,’”*
the court may also order that any money payable under the award shall be brought
into court or otherwise secured pending the determination of the application or
appeal.’’* In either case the court is likely to direct that the application or appeal
be dismissed if the order is not complied with.
The court’s power to order money payable under the award to be secured is only
applicable to applications under ss.67, 68 and 69 of the Act and not to other
sections.’”> Further, in most cases, it will only be exercised where the party
opposing the appeal demonstrates that the challenge is flimsy or otherwise lacks
substance.’”° The court will also distinguish between making an order, the effect
of which is to diminish the ability of the losing party to dishonour the award, if

768 Section 70(6) of the Arbitration Act 1996.

7” The principles on which the court will exercise its discretion were discussed in the Azov Shipping
Co v Baltic Shipping Co [1999] 2 Lloyd’s Rep. 39, per Longmore J. at [41] and following.
770
This is the relevant provision in s.70(6) of the Arbitration Act 1996 to which the court’s power is
subjected when ordering security for costs in respect of an arbitration claim.
™ Kazakhstan v Istil Group Inc [2006] 1 W.L.R 596, [31].
” In Kazakstan v Istil Group Inc {2006] 1 W.L.R 596, the Court of Appeal ordered further security
in the circumstances of that case.
7 Section 67 of the Arbitration Act 1996 is not mandatory and may be varied by agreement.
774+ Section 70(7) of the Arbitration Act 1996.
’ For example, s.32 of the Act. This limit to the scope of s.70(7) of the Act was emphasised in Peterson
Farms v C&M Farming Lid (2004) 1 Lloyd’s Rep. 614 at [23].
77 Peterson Farms, ibid. at [35].
 Procedure for Arbitration Applications 539

upheld, from an order that requires a third party to put the losing party in
funds.’”’

General rules about costs. Costs orders will be approached by the court 8-209
on the usual basis, the familiar issues being the extent and basis on which costs
orders should be made against parties to the arbitration application in respect of
costs incurred in the application (not any underlying arbitration).’”* Where pro-
ceedings have been brought in breach of an agreement to arbitrate, the usual
principle is that costs of the relevant English proceedings will be awarded against
the party acting in breach of the agreement to arbitrate on an indemnity basis.’””
The usual principle however is a flexible one and may be departed from (i.e. only
costs on the standard basis awarded) where for example conduct on the part of the
successful party has led the party in breach to believe that the chosen forum can
be ignored.’*°

Particular applications to the court. The procedure described in the 8-210

preceding paragraphs’*! applies to all arbitration claims to which Pt 1 of the
Arbitration Act 1996 relates except for an application to enforce an award, which
is governed by a separate section of CPR Pt 62.” There are however special
provisions for the following arbitration applications:

® to seek a stay of legal proceedings under s.9 of the Arbitration Act,

1996’°:
® to secure the attendance of a witness before an arbitral tribunal pursuant to
s.43 of the Arbitration Act 19967**;
® to obtain the assistance of the court in support of arbitration proceedings
pursuant to s.44 of the Arbitration Act 19967;
® to determine a question as to the substantive jurisdiction of the arbitral
tribunal under s.32 of the Arbitration Act 19967*°;
@ to determine a preliminary point of law under s.45 of the Arbitration Act
Loo2

777 Peterson Farms, ibid., [19].

7®'See CPR 1.44.4(2).
7 4 y B (Costs) [2007] EWHC 54 at [10}-[{11]; Kyrgyz Mobil Tel and Others v Fellowes International
Holdings and Another [2005] EWHC 1329, at [42].
7804 v B (Costs) [2007] EWHC 54 at [15].
751 See paras 8-178 et seq.
782 The procedure for the enforcement of an award is governed by s.III of Pt 62. See paras 8-219 et
seq.
783 CPR 1.62.8: see paras 7-024 et seq.
784 Practice Direction r.62, para.7: see para.7—202.
785 Practice Direction 62, para.8.1: see paras 7-180 et seq.
786 Practice Direction 62, para.9.1(1): see paras 7—154 e7 seq.
787 Practice Direction 62, para.9.1(2): see paras 7-165 et seq.
 540 The Role of the Court after the Award

® to seek permission to appeal on a question of law arising out of an arbitration

award’**; and
@ to obtain an extension of time to challenge an award under s.67 or 68 of the
Arbitration Act 1996 or to appeal on a question of law under s.69 of that
Act?”

Except for the last,’””’ these provisions.are mentioned earlier in this chapter and
in Ch.7 under the paragraphs dealing with the particular subjects.

8-211 Time limit for challenges and appeals. Unless varied by the court”!
the time for applying to the court to challenge or appeal against an award 1s limited
to 28 days from the date of the award or, if there has been any arbitral process of
appeal or review, from the date when the applicant or the appellant was notified of
the result of that process.’”* In order to comply with that time limit, the arbitration
claim form must have been issued and any witness statement in support should
have been filed by its expiry.

8-212 Extending the time limit. An application to extend the 28-day time limit
may be made whether or not it has expired. If the time limit has not yet expired,
the applicant may apply without notice for an order to extend it.””* Where however
the time limit has expired the applicant must serve the application on the other
parties.’’* The applicant must state in his arbitration claim form the grounds upon
which he maintains that an order extending time should be made.’”> A defendant
who wishes to oppose the making of an order extending time, must file written
evidence within seven days after service of the arbitration claim form.’”°

8-213 Exercise of discretion. The court has a discretion whether or not to extend
the time and in exercising that discretion the court will give proper weight to the
relevant considerations. These have been set out by Colman J. in Kalmneft v
Glencore as follows:

® the length of the delay;

@ whether, in permitting the time limit to expire and the subsequent delay to
occur, the party was acting reasonably in all the circumstances;
@ whether the respondent to the application or the arbitrator caused or contrib-
uted to the delay;

788 Practice Direction 62, para.12.1: see paras 8-119 er seq.

ENCERIT 62, 91):
79 See paras 8-212 and 8-213.
" CPR r.62.9(1) provides that the court may vary this statutory time limit. See para.8-213.
™ Section 70(3) of the Arbitration Act 1996: see paras 8-063, 8-108 and 8-123.
793 CPR 1.62.9(2).
7 GPRETR 629 (3)
™ CPR r.62.9(3)(a)(ii). It is suggested that this requirement must be observed in respect of applica-
tions made both before and after the 28 day period has expired.
77(EPRar62,9(3)(b)}
 Procedure for Arbitration Applications 541

@ whether the respondent to the application would by reason of the delay suffer
irremediable prejudice in addition to the mere loss of time if the application
were permitted to proceed;

@ whether the arbitration has continued during the period of delay and, if so,
what impact on the progress of the arbitration or the costs incurred in respect
of the determination of the application by the court might now have;
@ the strength of the application; and

@ whether in the broadest sense it would be unfair to the applicant for him to
be denied the opportunity of having the application determined.”””

Further, the party may lose the right to object if he failed to make a challenge
within the requisite time.’”*

Weight to be given to different considerations. The Court of 8-214

Appeal has endorsed these factors, identifying the first three as the most impor-
tant.’”” Nonetheless, the relative weight to be given to these considerations in any
particular case will of course vary. If for example a challenge is based on an
allegedly important document which only comes to light after the end of the
28-day period through no fault of the prospective challenger then it is very likely
that an extension of time will be granted.*°° In Elektrim v Vivendi Universal SA*°'
an application to challenge an award on the grounds that it had been obtained by
fraud under s.68(2)(g) was made on the basis of a memorandum which was
provided to the prospective applicants 11 days before the 28 day time limit for
challenge was due to expire. The applicant instructed English solicitors the next
day but neither an application to extend time nor the substantive s.68 application
was made until three and a half weeks after the 28 day time limit had expired.
Nonetheless, the court extended time for making the s.68 application retro-
spectively, finding the applicant and their solicitors had acted diligently in the
circumstances.®”?

Stricter application under section 67? The Kalmnefi criteria may be 8-215
applied more strictly in relation to s.67 applications where the jurisdiction of the
tribunal is being challenged.*°*

797 Kalmneft v Glencore [2001] 2 All E.R. (Comm) 577.

798 This “gloss” on the consideration quoted above was made in Peoples’s Insurance Co of China v
Vysanthi Shipping Co (The Joanna V) [2003] 2 Lloyd’s Rep. 617 as a result of s.67 of the Act.
79 Nagusina Naviera v Allied Maritime Inc [2002] EWCA Civ 1147; the Kalmnefi criteria were also
applied in Surefire Systems Ltd v Guardian ECL Ltd [2005] B.L.R. 534.
800 Protech Projects Construction (Pty) Ltd v Al-Kharafi & Sons [2005] 2 Lloyd’s Rep. 779, [26].
801 [2007] EWHC 11.
802 [2007] EWHC 11, [50], [56] and [72]. The more prudent course would have been to make an
application for extension of the 28 day time limit in the 10 day period between instruction of the
English solicitors and expiry of the time limit.
83 DDT Trucks of North America Ltd v DDT Holdings Lid [2007] EWHC 1542, [35].
 542 The Role ofthe Court after the Award

8-216 Frustrating the arbitration? The court will be mindful not to grant an
application which might be seen as part of a pattern of behaviour designed to
frustrate the arbitral process: ‘“‘All the history. which I have previously related
militates against the granting of any indulgence to the claimants who have taken
every step they possibly could to frustrate the arbitration.”**

8-217 Overlap with section 73. The issue of an extension of time often overlaps
with s.73; if the applicant had the requisite knowledge within the 28-day period or
could with reasonable diligence have acquired such knowledge then it cannot have
been acting reasonably in the context of an extension of time. The same considera-
tions will apply to both issues and it would be futile to grant an extension of time
in circumstances where it is clear that the resulting challenge will be barred under
Mee

8-218 No entitlement to hearing. The parties are not entitled to demand a

hearing for an application to extend the 28-day time limit, and there will not be
one unless it appears to the court that a hearing is required.*°°

8-219 Application to enforce an award. The following provisions apply to all

arbitration enforcement proceedings (other than by an action on the award)
regardless of when they are commenced and when the arbitral proceedings took
place.**” An application under s.66 or 101 of the Arbitration Act 1996*°* to enforce
an award in the same manner as a judgment or order may be made without notice
in an arbitration claim form.*”
The application for permission to enforce an award must be supported by
written evidence (usually in the form of a witness statement) which exhibits the
arbitration agreement and the award*!” and states:

®@ the name and address of the applicant as well as the name and the usual or
last known place of residence or business of the person against whom it is
sought to enforce the award, and

@ that the award has not been complied with or, as the case may be, the extent
to which it has not been complied with at the date of the application,*"!

%F Leibinger v Stryker Trauma GmbH [2006] EWHC 690, [34]. This case involved an application to
amend a claim form, not an application for extension of time for service of a claim form.
85 Thyssen Canada Ltd v Mariana Maritime SA [2005] 1 Lloyd’s Rep. 640, at [46]-[56].
806 Practice Direction 62, para.10.2.
807 CPR rr.62.17 and 62.18(1).
*°8 CPR r.62.18(1) also applies to an application for permission under s.26 of the Arbitration Act 1950
or s.3(1)(a) of the Arbitration Act 1975.
*° CPR r.62.18(1). The relevant form (N8) is reproduced in Appendix 1.
"1 CPR r.62.18(6)(a). For the purposes of the exhibit, a copy will suffice for an application under s.66
of the Arbitration Act 1996. A certified copy is required by s.102 of the Act for a s.101 application.
A certified translation will also be required if the arbitration agreement or the award is in a foreign
language.
811 CPR r.62.18(6)(b) and (c).
 Procedure for Arbitration Applications 543

Where the applicant applies to enforce an agreed award,*! the application must
state that the award is an agreed award and any order made by the court is required
to contain such a statement.*!°

Service of application for enforcement. On receipt of the arbitration 8-220

claim form for enforcement, the court may direct that the form should be served
on specified parties to the arbitration.*'* Service of the form out ofthe jurisdiction
may be done with permission of the court irrespective of where the award is, or
is treated as, made.*!>

Directions in respect of enforcement. Where the court directs that an 8-221

arbitration claim form seeking permission to enforce an award is to be served on
another party to the arbitration, the following will apply as they do to other
arbitration claims:

® service of the arbitration claim form should be acknowledged by completing

the appropriate form of acknowledgement of service*’®;
@ failure of arespondent to give notice of intention to contest the enforcement
application or to acknowledge service will have adverse consequences*'’;
® the automatic directions specified in the Arbitration Practice Direction will
apply unless the court otherwise directs*'*; and
® the application will be heard in private unless the court orders that it be heard
in public.*!?

Statement of interest. Where an applicant seeks to enforce an award of 8-222

interest, and the whole or any part of the interest claimed relates to a period after
the date of the award, he must file a statement giving the following partic-
ulars®”°:

@ whether simple or compound interest was awarded;

® the date from which interest was awarded;

@ whether rests were provided for, specifying them;

812 For an agreed award see s.51(2) of the Arbitration Act 1966 and paras 6-023 et seq.
SI EPRI62113(6):
8 EPRit162518(2):
815 CPR r.62.18(4). ;
816 CPR r.62.18(3). See para.8-197. The appropriate form of acknowledgement of service (N.15) is
reproduced in Appendix 1.
517 See para.8-198.
818 Practice Direction 62, para.6.1. See para.8—201.
519 Part 62 (s.IIL) does not say so in terms, but CPR r.62.10(3) (s.1) is expressed generally, and the
practice supports this interpretation. ;
820 CPR 1.62.19(1). This rule applies whether the whole or only part of the interest claimed relates to
a period after the date of the award.
 544 The Role of the Court after the Award

® the rate of interest awarded; and

@ a calculation showing the total amount claimed up to the date of the certifi-
cate and any sum which will become due ‘on a daily basis.

A statement containing these particulars must be filed with the court “whenever
the amount ofinterest has to be quantified for the purpose of obtaining a judgment
or order under s.66 of the Arbitration Act (enforcement of the award) or for the
purpose of enforcing such a judgment or order. 99821

8-223 Service of order. An order giving permission to enforce an award must be

drawn up by or on behalf of the applicant and served on the respondent. Service
may be effected by delivering a copy to the respondent personally or by sending
a copy to him at “‘his usual or last known place of residence or business’’*’* or in
such other manner as the court may direct.*?* In the case of a body corporate, the
place of residence or business means its registered or principal address.*** Permis-
sion is not required to serve the order outside the jurisdiction.*”°
The copy order served on the respondent must state that it will not be enforced
until the period for applying to set the order aside has expired,*”° or any applica-
tion made by the respondent has been finally disposed of.**”

8—224 Application to set aside order. The order must contain a statement of
the right to apply to set the order aside and the restrictions on enforcement under
r.62.18(9)(b).*”° A respondent to the proceedings may apply to set aside an order
for enforcement after he receives notice ofit.**? If the order does not contain these
required statements it will be formally defective, although this may not be enough
of itself to have the order set aside.**” The application to set aside must be made
within 14 days after service of the order within the jurisdiction or such other
period as is fixed by the court if the order is served outside the jurisdiction. Where
enforcement is sought against a State, the relevant procedures of the State
Immunity Act 1978 also need to be adhered to, which in practice means that the
14 day period needs to be extended. In particular, under s.12(1) of the State
Immunity Act process on States must be served through diplomatic channels and
pursuant to sub-s.(2) any time for entering an appearance only runs from two

BATE IR stove INO).

eG PRanoeuacy))s
*3 Practice Direction 62, para.3.1.
ea Gham o2alo Gil)
*° CPR 1.62.18 (8), which provides that CPR Pt 6.24 to 27 will apply in relation to such an order as
they apply in relation to an arbitration claim form.
826
The period will be 14 days after service within the jurisdiction or such time as the court may fix
if service is made outside the jurisdiction. ;
827 CPR r.62.18(9)(b).
828 CPR r.62.18(10).
829 CPR r.62.18(9)(a).
*°° IPCO (Nigeria) Lid v Nigerian National Petroleum Corp [2005] EWHC 726; [2005] 2 Lloyd’s Rep.
326, at [20]. An appropriate sanction might be an order in costs in respect of any premature
enforcement proceedings.
 Procedure for Arbitration Applications 545

months after the date on which the process is received. This time period applies
to the applicable period for setting aside an award under CPR 62.18(9) and if the
order for enforcement is made in a shorter period it will be premature and may be
set-aside.*3!
The grounds for opposing enforcement of an arbitral award are discussed earlier
in this chapter.**? Provided that the application is made within the time specified
in the order, the award cannot be enforced until after the application to set aside
has been “finally disposed of”’.**4

Registration of certain foreign awards. Depending on the award, it 8-225

may be possible to register an award in the High Court under one of the following
Acts:

@ The Arbitration (International Investment Disputes) Act 1966***;

@ The Multilateral Investment Guarantee Agency Act 1988**°; or
@ The Foreign Judgments (Reciprocal Enforcement) Act 1933, Pt 1.°%°

Registration under one of those Acts has the same effect as if permission to
enforce had been obtained because the award is then enforceable in the same
manner as a judgment or order of the High Court to the same effect. The rules
of the court**’ apply to registration of those awards with some modifications. The
modifications vary according to the Act under which the registration is
made??*

831 Norsk Hydro ASA v State Property Fund of Ukraine [2002] EWHC 2120; paras 21-26.
832 See paras 8-028 et seq. for the grounds for opposing enforcements of a New York Convention
award. As for challenges and appeals against an award generally, see paras 8-051 et seq.
833 CPR 1,62.18(9)(b). The application may not be finally disposed of until the outcome of any
appeal.
834 See para.8—048. See also CPR r.62.21.
835 See para.8—050.
836 See para.8—050. See also CPR r.62.20(1)(a). 7 7
837 CPR rr.62.20(1) and 62.21(2) provide for the application of certain provisions of CPR Pt 74 to
registration of these awards.
838 The modification for each of the three Acts are specified in CPR r.62.20(2). See paras 8-048 and
8-050.
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 APPENDIX 1

Para
ANdoyhin
eet onnl JANE ReGe sss saaceaseecadonadanunsconcee A1-—000

Statutory Instruments made under the Arbitration

Act 1996

The Arbitration Act 1996 (Commencement

No.1) Order 1996,
Sa RoW ASW (renames sienna npuadne tienepbacer mn alana Al-115
The High Court and County Courts (Alloca-
tion of Arbitration Proceedings) Order 1996,
SIO 9 Gy230) Stee neem et ent nee eee on nena teers Soe Al-116
The Unfair Arbitration Agreements (Specified
Amount) Order 1996,
SIEUSGC 52 eee eee tener ne rete mires Al-117
The High Court and County Courts (Alloca-
tion of Arbitration Proceedings) (Amendment)
Opiates WOO, (SW WODOANOID) socosscsss
eosceasscaoan ene Al-117A

Arbitration Act 1950, Part II, Enforcement of

(Certaiie EOLelemm AW ALCS eres eres neers: Al-118

Civil Procedure Rules,

e Bar OZ ear Oliratt Ommlaimisesa.sts iasnrecccses te Al-126

Practice Direction—Arbitration .....................5 Al-148

| The Arbitration Act 1996 is reproduced in this Appendix with amendments made to the Act before
June 30, 2007.
 548 Appendix 1

Arbitration Act 1996!

(1996 c. 23) °

A1l—000 ARRANGEMENT OF SECTIONS

Parr I

ARBITRATION PURSUANT TO AN ARBITRATION AGREEMENT

Introductory

Section
Ip GrenierallPMIIMCUDOS! a wa eesee ceare mo nseece ae seeeae ce Ra eee aoe ete eee
Dp SEO}OS:COLE GyOyOUMICCRN
KOTATCPP TOTRONA TSSCONES arg Sanrssper sec noace corearcineorcohaeaneaahenenonsaeae
3k. abherseatwotatherar bitratiom!, conc eet cere eeeneena Bers ceees taeree teers
4p Mandatoryrandinon=mandatony provislonSmemsma estes teaceseneessereeeeee
Ss. INERT AMAMES. 10) LOLS MA VARI ONATE oo. pp gee aenaseeecenn ine ociieoageor! askbunoscbaua cork Nopsce

The arbitration agreement

6. Dchimiionsotvarbitrationeaenceni en temas tee teats oeeeee eee rermeeneeeene

Te Sepakabilityroteanbitrationsagreementaven sent eutmceec ener eertt terse tees
8. Whether agreement discharged by death of a party ............c.:0000008

Stay of legal proceedings

9). SUNY GOH TEP GoVROYESAbTOAS, Seeeangacosdoanans

ioocavonocqnacobovon conanvcapposaceoece enannsee A1-009
10. Reference of interpleadenissue tolanbitnatiommecnssesenceeneere meres Al-010
ite Retention of security where Admiralty proceedings stayed ................ Al-011

Commencement of arbitral proceedings

Ws Power ofcourt to extend time for beginning arbitral proceedings, &c ... Al-012
13. PAOVOMMC KON, OLE TLalwavlliehAKOVAY ANOS! 45.340 pussauoassoodbsncobarcassoodusecyonedseaonessess Al-013
14. Commiencementoteanbitralyproceeding seenmmsmmmemten tease cre eee Al-014

' The Arbitration Act 1996 is reproduced in this Appendix with amendments made to the Act before
August 31, 2002.
 Appendix 1 549

The arbitral tribunal

15. (hevarbitralocribinalir ste. ves cer Re an ete ie eee eer cee Al-015
16. Brocedure tor appomtmentiot ab oitratorsi cs etre cease Al-016
17. Power in case of default to appoint sole arbitrator .............00:c0ccceee Al-017
18. hatltireroteappomnimeniapnroce dr cumeencetet ene a m ee tere eee Al-O018
19. Court tolhayemmecard to agreeduaialihicationsis..c.s:-1en nee eer Al1-019
20. (Givaininiamlimnententas weave ee aeatnses pene a re ee a ee Al-020
Ze (Wingy opUS aeerse nanaeanede smc eee roneneteccemtria oertcr ae Tebkauece encrer nesta ncbnne se enetennn sas Al-021
22, Decision-making where no chairman Or UMPIFE ...........cccccceeeeeeeeeteeees Al—022
Ty, NEN COXCRM TOS CONE ANAOVUMTENOIE S)ANUTOVOSATINY: sscoasascteonnpogaepeeccoue coscasuassaser sono eooe Al-023
24. Rowerotecolnt tome m@y,ceagol tial O Umer: a teene tree tee tne eee eee eee eee ee Al—024
U5. INGA REOCOVEN ON ENAMEL? camasddootct nnocuradaeoso shasee oem aebonceaneagnearccocsingponte Al—025
26. Deathrofarbitratomorapersomvappomiine iin ese- ete erate Al-026
Dil Billinotofsvacan eyesSoG cee tereen sy eeseat tee eeeccesen sce cter sees wesesseeeters Al-027
28. Joint and several liability of parties to arbitrators for fees and expenses . Al-028
oY). Immunity oftarbitratormeenee eee eects teats or eascer ene ceceestctustner soe soeee Al-029

Jurisdiction ofthe arbitral tribunal

30. Competence of tribunal to rule on its own jurisdiction ...............:008 Al—030

Objection to substantive jurisdiction of tribunal .............0..00eeees Al-031
Determination of preliminary point of jurisdiction .............00:::ee A1-032

The arbitral proceedings

Generaleduity ofthe tribunal Wenesne ste meee tceurcneer ster eaceea ease aaas=e Al—033
Proceduraliandrevidembialmmaitenseecee-seeestesccstee ceeseete seeseeaees teeta eae Al-034
Consolidation of proceedings and concurrent hearings ...........::1+0+ Al—035
Legal or other representation ..........:::ccceceseeeeseeneeseeeteeeseneenseneeenens Al—036
Power to appoint experts, legal advisers Or aSS€SSOIS ...........:.0:10s0e Al-037
General powers exercisable by the tribumal ...........:::ccce eee Al—038
Power to make provisional awards ...........:ccccceseseeeetseterereeeeeeeseeneeenes Al-039
Gemerall (uty Of Parties sci iccicceesccossssedneseenerntentesotssecseesessaserarswuseente Al—040
Powers of tribunal in case of party’s default .............::csceeeeseeeseeeeeeees Al-041

Powers of court in relation to arbitral proceedings

Enforcement of peremptory orders of tribunal .........:.:::cceeeeeeiees Al-042

43. Securing the attendance Of WitMesses ............cc iets eet teterereciees
eees
44, Court powers exercisable in support of arbitral proceedings seeks
Determination of preliminary point Of law .........cccccee eee tees e
550 Appendix 1

The award

Rulessap plicable topsubstancecomdispltememeessatessateresssnre

eae eerere Al—046
Award sron:citterentsiSSues: «SoC. ianks ase caesetecoceas Peet eee ee ee Al—047
Reniediesseeirn ae tee es een te ne ee ee acre ee eee Al—048
terest et iecssttets cc eee ee er eee ee ee So eee tae, Ree Al—049
Bxensroneotame tornado scien Cleeaeeasere ees seeeette tee rneeeee tae tear Al—050
Settlement <a metisccntesss MO BAO Dee Te OE RY le ee EA Al—051
Honmmaiso rt sayincleile eke reer ies ee eae ae oad one ap eee nes en Cree ee A1—052
Blacenvhene awardeineate dics aiid Cems nsssssssseeentam annnnenme ena eee Al—053
Daterotrawanceeretece me Merete eee eee eet ae A1—054
INotiircamon ohawardierie woHM ices te tense eae ee eee Al—055
Power to withhold award in case of non-payment ..............:c000ceseeees Al-056
Cormectiontotaward tor acdditionalkayatcd messes eee eee Al—057
Bifteetot award iets sch die a aod eee ees ee, ee eee Al—058

Costs ofthe arbitration

22) @ostsxotethewan btu tones acre eeeee tc aerec ee cetacean eee ese nee A1—059
60. NG ECCINCHUMONp AyaCOS outlet Va VC Ilan ae ereNee tne Innate sone nee Al—060
61. PAY LLM O igCO SUS Mts ancecorotene ian ae atom ca tens buses Saceence hee en gee eee ee Al—061
62. Hifeciofapreementaon awards allt COSTS mec peewee ie eeeteeee Al—062
63. iiherecoverablescoctcron une sinbiinatto leisy: se eee een eee Al—063
64. Recoverable tees! and! expensessotanbitnatans e-rysssertssssusetny ee eee Al—064
65. IHowe 10) hom TRITON CORES Soares eee nocd yo spo Sonne cere -oheereeeoee Al—065

Powers of the court in relation to award

66. LEAMA MESON NTEOME TUNE ENHEDTG | oecoccondecacot dctos oeucssocusoree oe hoceass -ccennemorenancds Al—066
67. Challenging the award: substantive jurisdiction .........0..ccccccceecseeeeeeeee Al—067
68. Challenging the award: serious irregularity ...............c0..c0:ceecceeseeneeeeeee Al—068
69. Appealronepointwor aweescrre te em ecee nee te eee eee eee Al—069
70. Challenge or appeal: supplementary provisions ..............0ccscecceeeeeeeeeeee Al—070
Hk Challenseorappealmetrechtonorden oMmcountl eset eee arene: Al-071

Miscellaneous

We Saving for rights of person who takes no part in proceedings ............ Al—072
1B: IOSSaU thei GehONO DISCI ee.se¥tel seiemnsenceee sve ceeetee ean en ee ee ae eS Al-073
WSs, imimumivron arbitral ipStieitioiis; (860) s..c.ccses-ss,con ee:eesser exseest oecevens Al—074
Ws. Charge to secure payment of solicitors’ COStS .........0cccccscecsseeceeeesseeees Al-075

Supplementary

76. Setvice:ofmoticesmisc tases. ke. Pennie tes, Soleo en es eae) Al_076

Hike Powers of court in relation to service of documents ...........cccccccceeeeeeee Al—077
 Appendix |

78. Reckoning! periodsiof time win rett-etciek ee Bh. Shek teehee

19% Power of court to extend time limits relating to arbitral proceedings .
80. Notice and other requirements in connection with legal proceedings
81. Saving for certain matters governed by common law
82. Minor definitions
83. Index of defined expressions: Part I
84. Transitional provisions Al—084

Part II

OTHER PRovISIONS RELATING TO

ARBITRATION

Domestic arbitration agreements

85. Modification of Part I in relation to domestic arbitration agreement . Al—085

86. Staymprotlegal proceedings ates. ets eae en vee ee se neue Al—086
87. Effectiveness of agreement to exclude court’s jurisdiction ................. Al—087
88. Power stomep eal soi amencesectiOnc. S alOKOU mmr: tenet eee eee Al-088

Consumer arbitration agreements

89. Application of unfair terms regulations to consumer arbitration agree-

Al—089
90. Regulations apply where consumer is a legal person .............00::00ee A1-090
GI. Arbitration agreement unfair where modest amount sought .............. Al-091

Small claims arbitration in the county court

Vee Exclusion of Part I in relation to small claims arbitration in the county

A1-092

Appointment ofjudges as arbitrators

BY, Appointment of judges as arbitrators ............:ccscsceseeseereereeseeteeesenenes Al-093

Statutory arbitrations

94 Application of Part I to statutory arbitrations 2.0.00... eee Al-094

oD: General adaptation of provisions in relation to statutory arbitrations . Al—095
552 Appendix 1

96. Specific adaptations of provisions in relation to statutory arbitrations ...

Mh. Provisions excluded from applying to statutory arbitrations ...............
98. Power to make further provision by regulations .............::::cccsseeeeees

Parr I

RECOGNITION AND ENFORCEMENT OF CERTAIN FOREIGN AWARDS

Enforcement of Geneva Convention awards

99. Continuation of Part II of the Arbitration Act 1950 ................

eee

Recognition and enforcement of New York Convention awards

100. News York Conventionvawards sr severe cerest seaeeaee ister scat eteene rests
101. Recoenitionand entorcenment Ol aWwandstneee esses eter: rene se ee secrneaes
102. Evidence to be produced by party seeking recognition or enforcement .
103. Reftisal con recogmitlonvorentOrCemetin cece teeter rree en nent teeemecr
104. Saving for other bases of recognition or enforcement .............0::00008 Al-104

Part IV

GENERAL PROVISIONS

105. Meaning of“the court’’: jurisdiction of High Court and county court .. Al-105
106. Gxowmcap pli CatlOmasuar sn cceemece en dantcer nee eee nee eeetene ce eecert estes Al—106
107. Consequentialvamendmientstand repeals i.e. eres Aeeenten sees cesta tec eeenee
108. EPCOT gases rant oe ice ec Aa Mee ees eh cect Se eec uso ne
109. (Goma Cem Cillian ests ee cee eres eee eee ee ee
110. Shortocetle: MERA AT te A NE OE AED ete PO RTE

SCHEDULES:

Scheaulesem\landatony: provislonsioin Parte emeryreeerneecesecseueceerseesneee reettertates Al-I11

Schedule 2: Modifications of Part I in relation to judge-arbitrators ................. Al-112
Crelnrehnlles 32 (Coinezeraquneseiaiell anoaieiniahinal Sos) j56. cena csuomsaeico coco ass soosnduddecagespsociasen
eesnicne Al-113
Schedulev4sRepealsurecmssscre verte aesscdcovwescs cacriveteietoe sea ence erase etn ae Al-114

An Act to restate and improve the law relating to arbitration pursuant to an arbitration
agreement; to make other provision relating to arbitration and arbitration awards; and for
connected purposes
[June 17, 1996]
 Appendix 1 553

Parr I

ARBITRATION PURSUANT TO AN ARBITRATION AGREEMENT

Introductory

1. General principles Al-001

The provisions of this Part are founded on the following principles, and shall be
construed accordingly—

(a) the object of arbitration is to obtain the fair resolution of disputes by an impartial
tribunal without unnecessary delay or expense;

(b) the parties should be free to agree how their disputes are resolved, subject only to
such safeguards as are necessary in the public interest;

(c) in matters governed by this Part the court should not intervene except as provided
by this Part.

2. Scope of application of provisions Al—002

(1) The provisions of this Part apply where the seat of the arbitration is in England and
Wales or Northern Ireland. .
(2) The following sections apply even if the seat of the arbitration is outside England and
Wales or Northern Ireland or no seat has been designated or determined—

(a) sections 9 to 11 (stay of legal proceedings, &c.), and

(b) section 66 (enforcement of arbitral awards).

(3) The powers conferred by the following sections apply even if the seat of the arbitration
is outside England and Wales or Northern Ireland or no seat has been designated or
determined—

(a) section 43 (securing the attendance of witnesses), and

(b) section 44 (court powers exercisable in support of arbitral proceedings);

but the court may refuse to exercise any such power if, in the opinion of the court, the fact
that the seat of the arbitration is outside England and Wales or Northern Ireland, or that
when designated or determined the seat is likely to be outside England and Wales or
Northern Ireland, makes it inappropriate to do so.
(4) The court may exercise a power conferred by any provision of this Part not mentioned
in subsection (2) or (3) for the purpose of supporting the arbitral process where—

(a) no seat of the arbitration has been designated or determined, and

(b) by reason of a connection with England and Wales or Northern Ireland the court is
satisfied that it is appropriate to do so.

(5) Section 7 (separability of arbitration agreement) and section 8 (death of aparty) apply
where the law applicable to the arbitration agreement is the law of England and Wales or
 554 Appendix 1

Northern Ireland even if the seat of the arbitration is outside England and Wales or
Northern Ireland or has not been designated or determined.

Al-003 3. The seat of the arbitration :

In this Part “the seat of the arbitration” means the juridical seat of the arbitration
designated—

(a) by the parties to the arbitration agreement, or

(b) by any arbitral or other institution or person vested by the parties with powers in
that regard, or

(c) by the arbitral tribunal if so authorised by the parties,

or determined, in the absence of any such designation, having regard to the parties’
agreement and all the relevant circumstances.

Al-004 4. Mandatory and non-mandatory provisions

(1) The mandatory provisions of this Part are listed in Schedule 1 and have effect
notwithstanding any agreement to the contrary.
(2) The other provisions of this Part (the ‘non-mandatory provisions”’) allow the parties to
make their own arrangements by agreement but provide rules which apply in the absence
of such agreement.
(3) The parties may make such arrangements by agreeing to the application of institutional
rules or providing any other means by which a matter may be decided.
(4) It is immaterial whether or not the law applicable to the parties’ agreement is the law
of England and Wales or, as the case may be, Northern Ireland.
(5) The choice of a law other than the law of England and Wales or Northern Ireland as
the applicable law in respect of amatter provided for by a non-mandatory provision of this
Part is equivalent to an agreement making provision about that matter.
For this purpose an applicable law determined in accordance with the parties’ agreement,
or which is objectively determined in the absence of any express or implied choice, shall be
treated as chosen by the parties.

Al—005 5. Agreements to be in writing

(1) The provisions of this Part apply only where the arbitration agreement is in writing,
and any other agreement between the parties as to any matter is effective for the purposes
of this Part only if in writing.
The expressions “‘agreement”’, “agree” and “‘agreed” shall be construed accordingly.
(2) There is an agreement in writing—

(a) if the agreement is made in writing (whether or not it is signed by the parties),

(b) if the agreement is made by exchange of communications in writing, or

(c) if the agreement is evidenced in writing.

(3) Where parties agree otherwise than in writing by reference to terms which are in
writing, they make an agreement in writing.
(4) An agreement is evidenced in writing if an agreement made otherwise than in writing
is recorded by one of the parties, or by a third party, with the authority of the parties to the
agreement.
 Appendix 1 555
(5) An exchange of written submissions in arbitral or legal proceedings in which the
existence of an agreement otherwise than in writing is alleged by one party against another
party and not denied by the other party in his response constitutes as between those parties
an agreement in writing to the effect alleged.
(6) References in this Part to anything being written or in writing include its being
recorded by any means.

The arbitration agreement

6. Definition of arbitration agreement Al—006

(1) In this Part an “arbitration agreement”? means an agreement to submit to arbitration
present or future disputes (whether they are contractual or not).
(2) The reference in an agreement to a written form of arbitration clause or to a document
containing an arbitration clause constitutes an arbitration agreement if the reference is such
as to make that clause part of the agreement.

7. Separability of arbitration agreement Al1—007

Unless otherwise agreed by the parties, an arbitration agreement which forms or was
intended to form part of another agreement (whether or not in writing) shall not be
regarded as invalid, non-existent or ineffective because that other agreement is invalid, or
did not come into existence or has become ineffective, and it shall for that purpose be
treated as a distinct agreement.

8. Whether agreement discharged by death of a party A1—008

(1) Unless otherwise agreed by the parties, an arbitration agreement is not discharged by
the death of a party and may be enforced by or against the personal representatives of that
party.
(2) Subsection (1) does not affect the operation of any enactment or rule of law by virtue
of which a substantive right or obligation is extinguished by death.

Stay of legal proceedings

9. Stay of legal proceedings Al—009

(1) A party to an arbitration agreement against whom legal proceedings are brought
(whether by way of claim or counterclaim) in respect of amatter which under the agreement
is to be referred to arbitration may (upon notice to the other parties to the proceedings)
apply to the court in which the proceedings have been brought to stay the proceedings so
far as they concern that matter.
(2) An application may be made notwithstanding that the matter is to be referred to
arbitration only after the exhaustion of other dispute resolution procedures.
(3) An application may not be made by a person before taking the appropriate procedural
step (if any) to acknowledge the legal proceedings against him or after he has taken any step
in those proceedings to answer the substantive claim.
(4) On an application under this section the court shall grant a stay unless satisfied that the
arbitration agreement is null and void, inoperative, or incapable of being performed.
 556 Appendix 1

(5) If the court refuses to stay the legal proceedings, any provision that an award is a
condition precedent to the bringing of legal proceedings in respect of any matter is of no
effect in relation to those proceedings.

Al-010 10. Reference of interpleader issue to arbitration

(1) Where in legal proceedings relief by way of interpleader is granted and any issue
between the claimants is one in respect of which there is an arbitration agreement between
them, the court granting the relief shall direct that the issue be determined in accordance
with the agreement unless the circumstances are such that proceedings brought by a
claimant in respect of the matter would not be stayed.
(2) Where subsection (1) applies but the court does not direct that the issue be determined
in accordance with the arbitration agreement, any provision that an award is a condition
precedent to the bringing of legal proceedings in respect of any matter shall not affect the
determination of that issue by the court.

Al-011 11. Retention of security where Admiralty proceedings stayed

(1) Where Admiralty proceedings are stayed on the ground that the dispute in question
should be submitted to arbitration, the court granting the stay may, if in those proceedings
property has been arrested or bail or other security has been given to prevent or obtain
release from arrest—

(a) order that the property arrested be retained as security for the satisfaction of any
award given in the arbitration in respect of that dispute, or

(b) order that the stay of those proceedings be conditional on the provision of equivalent
security for the satisfaction of any such award.

(2) Subject to any provision made by rules of court and to any necessary modification, the
same law and practice shall apply in relation to property retained in pursuance of an order
as would apply if it were held for the purposes of proceedings in the court making the
order.

Commencement of arbitral proceedings

Al-012 12. Power of court to extend time for beginning arbitral proceedings, &c

(1) Where an arbitration agreement to refer future disputes to arbitration provides that a
claim shall be barred, or the claimant’s right extinguished, unless the claimant takes within
a time fixed by the agreement some step—

(a) to begin arbitral proceedings, or

(b) to begin other dispute resolution procedures which must be exhausted before
arbitral proceedings can be begun,

the court may by order extend the time for taking that step.
(2) Any party to the arbitration agreement may apply for such an order (upon notice to the
other parties), but only after a claim has arisen and after exhausting any available arbitral
process for obtaining an extension of time.
(3) The court shall make an order only if satisfied—
 Appendix | 557

(a) that the circumstances are such as were outside the reasonable contemplation of the
parties when they agreed the provision in question, and that it would be just to
extend the time, or

(b) that the conduct of one party makes it unjust to hold the other party to the strict
terms of the provision in question.

(4) The court may extend the time for such period and on such terms as it thinks fit, and
may do so whether or not the time previously fixed (by agreement or by a previous order)
has expired.
(5) An order under this section does not affect the operation of the Limitation Acts (see
section 13).
(6) The leave of the court is required for any appeal from a decision of the court under this
section.

13. Application of Limitation Acts Al-013

(1) The Limitation Acts apply to arbitral proceedings as they apply to legal proceed-
ings.
(2) The court may order that in computing the time prescribed by the Limitation Acts for
the commencement of proceedings (including arbitral proceedings) in respect of a dispute
which was the subject matter—

(a) of an award which the court orders to be set aside or declares to be of no effect,
or
(b) of the affected part of an award which the court orders to be set aside in part, or
declares to be in part of no effect,

the period between the commencement of the arbitration and the date of the order referred
to in paragraph (a) or (b) shall be excluded.
(3) In determining for the purposes of the Limitation Acts when a cause of action accrued,
any provision that an award is a condition precedent to the bringing oflegal proceedings in
reSpect of a matter to which an arbitration agreement applies shall be disregarded.
(4) In this Part “the Limitation Acts’? means—

(a) in England and Wales, the Limitation Act 1980, the Foreign Limitation Periods Act
1984 and any other enactment (whenever passed) relating to the limitation of
actions;

(b) in Northern Ireland, the Limitation (Northern Ireland) Order 1989, the Foreign
Limitation Periods (Northern Ireland) Order 1985 and any other enactment (when-
ever passed) relating to the limitation of actions.

14. Commencement of arbitral proceedings Al-014

(1) The parties are free to agree when arbitral proceedings are to be regarded as com-
menced for the purposes of this Part and for the purposes of the Limitation Acts.
(2) If there is no such agreement the following provisions apply.
(3) Where the arbitrator is named or designated in the arbitration agreement, arbitral
proceedings are commenced in respect of amatter when one party serves on the other party
or parties a notice in writing requiring him or them to submit that matter to the person so
named or designated.
(4) Where the arbitrator or arbitrators are to be appointed by the parties, arbitral proceed-
ings are commenced in respect of a matter when one party serves on the other party or
 558 Appendix |

parties notice in writing requiring him or them to appoint an arbitrator or to agree to the
appointment of an arbitrator in respect of that matter.
(5) Where the arbitrator or arbitrators are to be appointed by a person other than a party
to the proceedings, arbitral proceedings are commenced in respect of a matter when one
party gives notice in writing to that person requesting him to make the appointment in
respect of that matter.

The ee tribunal

Al-015 15. The arbitral tribunal

(1) The parties are free to agree on the number of arbitrators to form the tribunal and
whether there is to be a chairman or umpire.
(2) Unless otherwise agreed by the parties, an agreement that the number of arbitrators
shall be two or any other even number shall be understood as requiring the appointment of
an additional arbitrator as chairman of the tribunal.
(3) If there is no agreement as to the number of arbitrators, the tribunal shall consist of a
sole arbitrator.

Al-016 16. Procedure for appointment of arbitrators

(1) The parties are free to agree on the procedure for appointing the arbitrator or
arbitrators, including the procedure for appointing any chairman or umpire.
(2) If or to the extent that there is no such agreement, the following provisions apply.
(3) If the tribunal is to consist of a sole arbitrator, the parties shall jointly appoint the
arbitrator not later than 28 days after service of a request in writing by either party to do
So.
(4) If the tribunal is to consist of two arbitrators, each party shall appoint one arbitrator not
later than 14 days after service of a request in writing by either party to do so.
(5) If the tribunal is to consist of three arbitrators—

(a) each party shall appoint one arbitrator not later than 14 days after service of a
request in writing by either party to do so, and

(b) the two so appointed shall forthwith appoint a third arbitrator as the chairman ofthe
tribunal.

(6) If the tribunal is to consist of two arbitrators and an umpire—

(a) each party shall appoint one arbitrator not later than 14 days after service of a
request in writing by either party to do so, and

(b) the two so appointed may appoint an umpire at any time after they themselves are
appointed and shall do so before any substantive hearing or forthwith if they cannot
agree on a matter relating to the arbitration.

(7) In any other case (in particular, if there are more than two parties) section 18 applies
as in the case of a failure of the agreed appointment procedure.

Al-017 17. Power in case of default to appoint sole arbitrator

(1) Unless the parties otherwise agree, where each of two parties to an arbitration agree-
ment is to appoint an arbitrator and one party (“the party in default’’) refuses to do so, or
 Appendix 1 559

fails to do so within the time specified, the other party, having duly appointed his arbitrator,
may give notice in writing to the party in default that he proposes to appoint his arbitrator
to act as sole arbitrator.
(2) If the party in default does not within 7 clear days of that notice being given—

(a) make the required appointment, and

(b) notify the other party that he has done so,

the other party may appoint his arbitrator as sole arbitrator whose award shall be binding
on both parties as if he had been so appointed by agreement.
(3) Where a sole arbitrator has been appointed under subsection (2), the party in default
may (upon notice to the appointing party) apply to the court which may set aside the
appointment.
(4) The leave of the court is required for any appeal from a decision of the court under this
section.

18. Failure of appointment procedure Al-018

(1) The parties are free to agree what is to happen in the eyent of a failure of the procedure
for the appointment of the arbitral tribunal.

There is no failure if an appointment is duly made under section 17 (power in case of

default to appoint sole arbitrator), unless that appointment is set aside.
(2) If or to the extent that there is no such agreement any party to the arbitration
agreement may (upon notice to the other parties) apply to the court to exercise its powers
under this section.
(3) Those powers are—

(a) to give directions as to the making of any necessary appointments;

(b) to direct that the tribunal shall be constituted by such appointments (or any one or
» more of them) as have been made;

(c) to revoke any appointments already made;

(d) to make any necessary appointments itself.

(4) An appointment made by the court under this section has effect as if made with the
agreement of the parties.
(5) The leave of the court is required for any appeal from a decision of the court under this
section.

19. Court to have regard to agreed qualifications Al-019

In deciding whether to exercise, and in considering how to exercise, any of its powers
under section 16 (procedure for appointment of arbitrators) or section 18 (failure of
appointment procedure), the court shall have due regard to any agreement of the parties as
to the qualifications required of the arbitrators.

20. Chairman Al-020

(1) Where the parties have agreed that there is to be a chairman, they are free to agree what
the functions of the chairman are to be in relation to the making of decisions, orders and
awards.
 560 Appendix 1

(2) If or to the extent that there is no such agreement, the following provisions apply.
(3) Decisions, orders and awards shall be made by all or a majority of the arbitrators
(including the chairman).
(4) The view of the chairman shall prevail in relation to a decision, order or award in
respect of which there is neither unanimity nor a majority under subsection (3).

Al-021 21. Umpire

(1) Where the parties have agreed that there is to be an umpire, they are free to agree what
the functions of the umpire are to be, and in particular—

(a) whether he is to attend the proceedings, and

(b) when he is to replace the other arbitrators as the tribunal with power to make
decisions, order and awards.

(2) If or to the extent that there is no such agreement, the following provisions apply.
(3) The umpire shall attend the proceedings and be supplied with the same documents and
other materials as are supplied to the other arbitrators.
(4) Decisions, orders and awards shall be made by the other arbitrators unless and until
they cannot agree on a matter relating to the arbitration.
In that event they shall forthwith give notice in writing to the parties and the umpire,
whereupon the umpire shall replace them as the tribunal with power to make decisions,
orders and awards as if he were sole arbitrator.
(5) If the arbitrators cannot agree but fail to give notice of that fact, or if any of them fails
to join in the giving of notice, any party to the arbitral proceedings may (upon notice to the
other parties and to the tribunal) apply to the court which may order that the umpire shall
replace the other arbitrators as the tribunal with power to make decisions, orders and awards
as if he were sole arbitrator.
(6) The leave of the court is required for any appeal from a decision of the court under this
section.

Al—022 22. Decision-making where no chairman or umpire

(1) Where the parties agree that there shall be two or more arbitrators with no chairman
or umpire, the parties are free to agree how the tribunal is to make decisions, orders and
awards.
(2) If there is no such agreement, decisions, orders and awards shall be made by all or a
majority of the arbitrators.

Al=023 23. Revocation of arbitrator’s authority

(1) The parties are free to agree in what circumstances the authority of an arbitrator may
be revoked.
(2) If or to the extent that there is no such agreement the following provisions apply.
(3) The authority of an arbitrator may not be revoked except—

(a) by the parties acting jointly, or

(b) by an arbitral or other institution or person vested by the parties with powers in that
regard.

(4) Revocation of the authority of an arbitrator by the parties acting jointly must be agreed
in writing unless the parties also agree (whether or not in writing) to terminate the
arbitration agreement.
 Appendix ] 561

(5) Nothing in this section affects the power of the court—

(a) to revoke an appointment under section 18 (powers exercisable in case of failure of

appointment procedure), or
(b) to remove an arbitrator on the grounds specified in section 24.

24. Power of court to remove arbitrator Al-024

(1) A party to arbitral proceedings may (upon notice to the other parties, to the arbitrator
concerned and to any other arbitrator) apply to the court to remove an arbitrator on any of
the following grounds—

(a) that circumstances exist that give rise to justifiable doubts as to his impartiality;

(b) that he does not possess the qualifications required by the arbitration agreement;

(c) that he is physically or mentally incapable of conducting the proceedings or there are
justifiable doubts as to his capacity to do so;

(d) that he has refused or failed:

(i) properly to conduct the proceedings, or

(ii) to use all reasonable despatch in conducting the proceedings or making an

award,

and that substantial injustice has been or will be caused to the applicant.

(2) If there is an arbitral or other institution or person vested by the parties with power to
remove an arbitrator, the court shall not exercise its power of removal unless satisfied that
the applicant has first exhausted any available recourse to that institution or person.
(3) The arbitral tribunal may continue the arbitral proceedings and make an award while
an application to the court under this section is pending.
(4¥ Where the court removes an arbitrator, it may make such order as it thinks fit with
respect to his entitlement (if any) to fees or expenses, or the repayment of any fees or
expenses already paid.
(5) The arbitrator concerned is entitled to appear and be heard by the court before it makes
any order under this section.
(6) The leave of the court is required for any appeal from a decision of the court under this
section.

25. Resignation of arbitrator Al-025

(1) The parties are free to agree with an arbitrator as to the consequences of his resignation
as regards—

(a) his entitlement (if any) to fees or expenses,

(b) any liability thereby incurred by him.

(2) If or to the extent that there is no such agreement the following provisions apply.
(3) An arbitrator who resigns his appointment may (upon notice to the parties) apply to the
Ccourt—

(a) to grant him relief from any liability thereby incurred by him, and
 562 Appendix |

(b) to make such order as it thinks fit with respect to his entitlement (if any) to fees or
expenses or the repayment of any fees or expenses already paid.

(4) If the court is satisfied that in all the circumstances it was reasonable for the arbitrator
to resign, it may grant such relief as is mentioned in subsection (3)(a) on such terms as it
thinks fit.
(5) The leave of the court is required for any appeal from a decision of the court under this
section.

Al—026 26. Death of arbitrator or person appointing him

(1) The authority of an arbitrator is personal and ceases on his death.
(2) Unless otherwise agreed by the parties, the death of the person by whom an arbitrator
was appointed does not revoke the arbitrator’s authority.

Al-027 27. Filling of vacancy, &c

(1) Where an arbitrator ceases to hold office, the parties are free to agree—

(a) whether and if so how the vacancy is to be filled,

(b) whether and if so to what extent the previous proceedings should stand, and

(c) what effect (if any) his ceasing to hold office has on any appointment made by him
(alone or jointly).

(2) If or to the extent that there is no such agreement, the following provisions apply.
(3) The provisions of sections 16 (procedure for appointment of arbitrators) and 18 (failure
of appointment procedure) apply in relation to the filling of the vacancy as in relation to an
original appointment.
(4) The tribunal (when reconstituted) shall determine whether and if so to what extent the
previous proceedings should stand.
This does not affect any right of a party to challenge those proceedings on any ground
which had arisen before the arbitrator ceased to hold office.
(5) His ceasing to hold office does not affect any appointment by him (alone or jointly) of
another arbitrator, in particular any appointment of a chairman or umpire.

Al—028 28. Joint and several liability of parties to arbitrators for fees and expenses

(1) The parties are jointly and severally liable to pay to the arbitrators such reasonable fees
and expenses (if any) as are appropriate in the circumstances.
(2) Any party may apply to the court (upon notice to the other parties and to the
arbitrators) which may order that the amount of the arbitrators’ fees and expenses shall be
considered and adjusted by such means and upon such terms as it may direct.
(3) If the application is made after any amount has been paid to the arbitrators by way of
fees or expenses, the court may order the repayment of such amount (if any) as is shown to
be excessive, but shall not do so unless it is shown that it is reasonable in the circumstances
to order repayment.
(4) The above provisions have effect subject to any order of the court under section 24(4)
or 25(3)(b) (order as to entitlement to fees or expenses in case of removal or resignation of
arbitrator).
(5) Nothing in this section affects any liability of a party to any other party to pay all or any
of the costs of the arbitration (see sections 59 to 65) or any contractual right of an arbitrator
to payment of his fees and expenses.
 Appendix | 563

(6) In this section references to arbitrators include an arbitrator who has ceased to act and
an umpire who has not replaced the other arbitrators.

29. Immunity of arbitrator Al—029

(1) An arbitrator is not liable for anything done or omitted in the discharge or purported
discharge of his functions as arbitrator unless the act or omission is shown to have been in
bad faith.
(2) Subsection (1) applies to an employee or agent of an arbitrator as it applies to the
arbitrator himself.
(3) This section does not affect any liability incurred by an arbitrator by reason of his
resigning (but see section 25).

Jurisdiction of the arbitral tribunal

30. Competence of tribunal to rule on its own jurisdiction Al—030

(1) Unless otherwise agreed by the parties, the arbitral tribunal may rule on its own
substantive jurisdiction, that is, as to—

(a) whether there is a valid arbitration agreement,

(b) whether the tribunal is properly constituted, and

(c) what matters have been submitted to arbitration in accordance with the arbitration
agreement.

(2) Any such ruling may be challenged by any available arbitral process of appeal or review
or in accordance with the provisions of this Part.

31. Objection to substantive jurisdiction of tribunal Al-031

.- . . . . .

(1) An objection that the arbitral tribunal lacks substantive jurisdiction at the outset of the
proceedings must be raised by a party not later than the time he takes the first step in the
proceedings to contest the merits of any matter in relation to which he challenges the
tribunal’s jurisdiction.
A party is not precluded from raising such an objection by the fact that he has appointed
or participated in the appointment of an arbitrator.
(2) Any objection during the course of the arbitral proceedings that the arbitral tribunal 1s
exceeding its substantive jurisdiction must be made as soon as possible after the matter
alleged to be beyond its jurisdiction is raised.
(3) The arbitral tribunal may admit an objection later than the time specified in subsection
(1) or (2) if it considers the delay justified.
(4) Where an objection is duly taken to the tribunal’s substantive jurisdiction and the
tribunal has power to rule on its own jurisdiction, it may—

(a) rule on the matter in an award as to jurisdiction, or

(b) deal with the objection in its award on the merits.

If the parties agree which of these courses the tribunal should take, the tribunal shall
proceed accordingly.
 564 Appendix 1

(5) The tribunal may in any case, and shall if the parties so agree, stay proceedings whilst
an application is made to the court under section 32 (determination of preliminary point of
jurisdiction).

Al-032 32. Determination of preliminary point of jurisdiction

(1) The court may, on the application of a party to arbitral proceedings (upon notice to the
other parties), determine any question as to the substantive jurisdiction of the tribunal.
A party may lose the right to object (see section 73).
(2) An application under this section shall not be considered unless—

(a) it is made with the agreement in writing of all the other parties to the proceedings,
or
(b) it is made with the permission of the tribunal and the court is satisfied—

(i) that the determination of the question is likely to produce substantial savings
in costs,

(ii) that the application was made without delay, and

(111) that there is good reason why the matter should be decided by the court.

(3) An application under this section, unless made with the agreement of all the other
parties to the proceedings, shall state the grounds on which it is said that the matter should
be decided by the court.
(4) Unless otherwise agreed by the parties, the arbitral tribunal may continue the arbitral
proceedings and make an award while an application to the court under this section is
pending.
(5) Unless the court gives leave, no appeal lies from a decision of the court whether the
conditions specified in subsection (2) are met.
(6) The decision of the court on the question ofjurisdiction shall be treated as a judgment
of the court for the purposes of an appeal.
But no appeal lies without the leave of the court which shall not be given unless the court
considers that the question involves a point of law which is one of general importance or
is one which for some other special reason should be considered by the Court of
Appeal.

The arbitral proceedings

Al-033 33. General duty of the tribunal

(1) The tribunal shall—

(a) act fairly and impartially as between the parties, giving each party a reasonable
opportunity of putting his case and dealing with that of his opponent, and
(b) adopt procedures suitable to the circumstances of the particular case, avoiding
unnecessary delay or expense, so as to provide a fair means for the resolution of the
matters falling to be determined.

(2) The tribunal shall comply with that general duty in conducting the arbitral proceed-
ings, in its decisions on matters of procedure and evidence and in the exercise of all other
powers conferred on it.
 Appendix 1 565
34. Procedural and evidential matters Al-034
(1) It shall be for the tribunal to decide all procedural and evidential matters, subject to the
right of the parties to agree any matter.
(2) Procedural and evidential matters include—

(a) when and where any part of the proceedings is to be held;

(b) the language or languages to be used in the proceedings and whether translations of
any relevant documents are to be supplied;

(c) whether any and if so what form of written statements of claim and defence are to
be used, when these should be supplied and the extent to which such statements can
be later amended;

(d) whether any and if so which documents or classes of documents should be disclosed
between and produced by the parties and at what stage;

(e) whether any and if so what questions should be put to and answered by the
respective parties and when and in what form this should be done;
(f) whether to apply strict rules of evidence (or any other rules) 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;

(g) whether and to what extent the tribunal should itself take the initiative in ascertain-
ing the facts and the law;

(h) whether and to what extent there should be oral or written evidence or submis-
sions.

(3) The tribunal may fix the time within which any directions given by it are to be complied
with, and may if it thinks fit extend the time so fixed (whether or not it has expired).

35. Consolidation of proceedings and concurrent hearings Al—-035

(1) The parties are free to agree—

(a) that the arbitral proceedings shall be consolidated with other arbitral proceedings,
or
(b) that concurrent hearings shall be held,

on such terms as may be agreed.

(2) Unless the parties agree to confer such power on the tribunal, the tribunal has no power
to order consolidation of proceedings or concurrent hearings.

36. Legal or other representation Al-—036

Unless otherwise agreed by the parties, a party to arbitral proceedings may be repre-
sented in the proceedings by a lawyer or other person chosen by him.

37. Power to appoint experts, legal advisers or assessors Al-037

(1) Unless otherwise agreed by the parties—

(a) the tribunal may—

 566 Appendix I

(i) appoint experts or legal advisers to report to it and the parties, or

(ii) appoint assessors to assist it on technical matters, and may allow any such
expert, legal adviser or assessor to atterid the proceedings; and

(b) the parties shall be given a reasonable opportunity to comment on any information,
opinion or advice offered by any such person.

(2) The fees and expenses of an expert, legal adviser or assessor appointed by the tribunal
for which the arbitrators are liable are expenses of the arbitrators for the purposes of this
Part.

Al-038 38. General powers exercisable by the tribunal

(1) The parties are free to agree on the powers exercisable by the arbitral tribunal for the
purposes of and in relation to the proceedings.
(2) Unless otherwise agreed by the parties the tribunal has the following powers.
(3) The tribunal may order a claimant to provide security for the costs of the arbitra-
tion.
This power shall not be exercised on the ground that the claimant is—

(a) an individual ordinarily resident outside the United Kingdom, or

(b) a corporation or association incorporated or formed under the law of a country
outside the United Kingdom, or whose central management and control is exercised
outside the United Kingdom.

(4) The tribunal may give directions in relation to any property which is the subject of the
proceedings or as to which any question arises in the proceedings, and which is owned by
or is in the possession of a party to the proceedings—

(a) for the inspection, photographing, preservation, custody or detention of the prop-
erty by the tribunal, an expert or a party, or
(b) ordering that samples be taken from, or any observation be made of or experiment
conducted upon, the property.

(5) The tribunal may direct that a party or witness shall be examined on oath or affirma-
tion, and may for that purpose administer any necessary oath or take any necessary
affirmation.
(6) The tribunal may give directions to a party for the preservation for the purposes of the
proceedings of any evidence in his custody or control.

A1-039 39. Power to make provisional awards

(1) The parties are free to agree that the tribunal shall have power to order on a provisional
basis any relief which it would have power to grant in a final award.
(2) This includes, for instance, making—

(a) a provisional order for the payment of money or the disposition of property as
between the parties, or

(b) an order to make an interim payment on account of the costs of the arbitration.

(3) Any such order shall be subject to the tribunal’s final adjudication; and the tribunal’s
final award, on the merits or as to costs, shall take account of any such order.
 Appendix 1] 567

(4) Unless the parties agree to confer such power on the tribunal, the tribunal has no such
power.
This does not affect its powers under section 47 (awards on different issues, &c.).

40. General duty of parties Al—040

(1) The parties shall do all things necessary for the proper and expeditious conduct of the
arbitral proceedings.
(2) This includes—

(a) complying without delay with any determination of the tribunal as to procedural or
evidential matters, or with any order or directions of the tribunal, and
(b) where appropriate, taking without delay any necessary steps to obtain a decision of
the court on a preliminary question of jurisdiction or law (see sections 32 and
45),
41. Powers of tribunal in case of party’s default Al-041
(1) The parties are free to agree on the powers of the tribunal in case of a party’s failure
to do something necessary for the proper and expeditious conduct of the arbitration.
(2) Unless otherwise agreed by the parties, the following provisions apply.
(3) If the tribunal is satisfied that there has been inordinate and inexcusable delay on the
part of the claimant in pursuing his claim and that the delay—

(a) gives rise, or is likely to give rise, to a substantial risk that it is not possible to have
a fair resolution of the issues in that claim, or

(b) has caused, or is likely to cause, serious prejudice to the respondent,

the tribunal may make an award dismissing the claim.

(4) If without showing sufficient cause a party—

>(a) fails to attend or be represented at an oral hearing of which due notice was given,
or
(b) where matters are to be dealt with in writing, fails after due notice to submit written
evidence or make written submissions,

the tribunal may continue the proceedings in the absence of that party or, as the case may
be, without any written evidence or submissions on his behalf, and may make an award on
the basis of the evidence before it.
(5) If without showing sufficient cause a party falls to comply with any order or directions
of the tribunal, the tribunal may make a peremptory order to the same effect, prescribing
such time for compliance with it as the tribunal considers appropriate.
(6) Ifa claimant fails to comply with a peremptory order of the tribunal to provide security
for costs, the tribunal may make an award dismissing his claim.
(7) If a party fails to comply with any other kind of peremptory order, then, without
prejudice to section 42 (enforcement by court oftribunal’s peremptory orders), the tribunal
may do any of the following—

(a) direct that the party in default shall not be entitled to rely upon any allegation or
material which was the subject matter of the order,

(b) draw such adverse inferences from the act of non-compliance as the circumstances
justify;
 568 Appendix 1

(c) proceed to an award on the basis of such materials as have been properly provided
to it;

(d) make such order as it thinks fit as to the payment of costs of the arbitration incurred
in consequence of the non-compliance.

Powers of court in relation to arbitral proceedings

Al-—042 42. Enforcement of peremptory orders of tribunal

(1) Unless otherwise agreed by the parties, the court may make an order requiring a party
to comply with a peremptory order made by the tribunal.
(2) An application for an order under this section may be made—

(a) by the tribunal (upon notice to the parties),

(b) by a party to the arbitral proceedings with the permission of the tribunal (and upon
notice to the other parties), or

(c) where the parties have agreed that the powers of the court under this section shall
be available.

(3) The court shall not act unless it is satisfied that the applicant has exhausted any
available arbitral process in respect of failure to comply with the tribunal’s order.
(4) No order shall be made under this section unless the court is satisfied that the person
to whom the tribunal’s order was directed has failed to comply with it within the time
prescribed in the order or, if no time was prescribed, within a reasonable time.
(5) The leave of the court is required for any appeal from a decision of the court under this
section.

Al-043 43. Securing the attendance of witnesses

(1) A party to arbitral proceedings may use the same court procedures as are available in
relation to legal proceedings to secure the attendance before the tribunal of a witness in
order to give oral testimony or to produce documents or other material evidence.
(2) This may only be done with the permission of the tribunal or the agreement of the
other parties.
(3) The court procedures may only be used if—

(a) the witness is in the United Kingdom, and

(b) the arbitral proceedings are being conducted in England and Wales or, as the case
may be, Northern Ireland.

(4) A person shall not be compelled by virtue of this section to produce any document or
other material evidence which he could not be compelled to produce in legal proceed-
ings.

Al-044 44. Court powers exercisable in support of arbitral proceedings

(1) Unless otherwise agreed by the parties, the court has for the purposes of and in relation
to arbitral proceedings the same power of making orders about the matters listed below as
it has for the purposes of and in relation to legal proceedings.
 Appendix | 569

(2) Those matters are—

(a) the taking of the evidence of witnesses;

(b) the preservation of evidence;

(c) making orders relating to property which is the subject of the proceedings or as to
which any question arises in the proceedings—

(i) for the inspection, photographing, preservation, custody or detention of the

property, or

(i1) ordering that samples be taken from, or any observation be made of or

experiment conducted upon, the property;

and for that purpose authorising any person to enter any premises in the possession
or control of a party to the arbitration;

(d) the sale of any goods the subject of the proceedings;

(e) the granting of an interim injunction or the appointment of a receiver.

(3) If the case is one of urgency, the court may, on the application of a party or proposed
party to the arbitral proceedings, make such orders as it thinks necessary for the purpose
of preserving evidence or assets.
(4) If the case is not one of urgency, the court shall act only on the application of a party
to the arbitral proceedings (upon notice to the other parties and to the tribunal) made with
the permission of the tribunal or the agreement in writing of the other parties.
(5) In any case the court shall act only if or to the extent that the arbitral tribunal, and any
arbitral or other institution or person vested by the parties with power in that regard, has
no power or is unable for the time being to act effectively.
(6) If the court so orders, an order made by it under this section shall cease to have effect
in whole or in part on the order of the tribunal or of any such arbitral or other institution
or person having power to act in relation to the subject-matter of the order.
(7) The leave of the court is required for any appeal from a decision of the court under this
section.

45. Determination of preliminary point of law Al—045

(1) Unless otherwise agreed by the parties, the court may on the application of a party to
arbitral proceedings (upon notice to the other parties) determine any question oflaw arising
in the course of the proceedings which the court is satisfied substantially affects the rights
of one or more of the parties.
An agreement to dispense with reasons for the tribunal’s award shall be considered an
agreement to exclude the court’s jurisdiction under this section.
(2) An application under this section shall not be considered unless—

(a) it is made with the agreement of ali the other parties to the proceedings, or

(b) it is made with the permission of the tribunal and the court 1s satisfied—

(i) that the determination of the question is likely to produce substantial savings
in costs, and

(ii) that the application was made without delay.

 570 Appendix 1

(3) The application shall identify the question of law to be determined and, unless made
with the agreement of all the other parties to the proceedings, shall state the grounds on
which it is said that the question should be decided by the court.
(4) Unless otherwise agreed by the parties, the arbitral tribunal may continue the arbitral
proceedings and make an award while an application to the court under this section is
pending.
(5) Unless the court gives leave, no appeal lies from a decision of the court whether the
conditions specified in subsection (2) are met.
(6) The decision of the court on the question of law shall be treated as a judgment of the
court for the purposes of an appeal.
But no appeal lies without the leave of the court which shall not be given unless the court
considers that the question is one of general importance, or is one which for some other
special reason should be considered by the Court of Appeal.

The award

Al—046 46. Rules applicable to substance of dispute

(1) The arbitral tribunal shall decide the dispute—

(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.

(2) For this purpose the choice of the laws of a country shall be understood to refer to the
substantive laws of that country and not its conflict of laws rules.
(3) If or to the extent that there is no such choice or agreement, the tribunal shall apply the
law determined by the conflict of laws rules which it considers applicable.

Al—047 47. Awards on different issues, &c

(1) Unless otherwise agreed by the parties, the tribunal may make more than one award at
different times on different aspects of the matters to be determined.
(2) The tribunal may, in particular, make an award relating—

(a) to an issue affecting the whole claim, or

(b) to a part only of the claims or cross-claims submitted to it for decision.

(3) If the tribunal does so, it shall specify in its award the issue, or the claim or part of a
claim, which is the subject matter of the award.

Al—048 48. Remedies

(1) The parties are free to agree on the powers exercisable by the arbitral tribunal as regards
remedies.
(2) Unless otherwise agreed by the parties, the tribunal has the following powers.
(3) The tribunal may make a declaration as to any matter to be determined in the pro-
ceedings.
(4) The tribunal may order the payment of a sum of money, in any currency.
 Appendix | Sill

(5) The tribunal has the same powers as the court—

(a) to order a party to do or refrain from doing anything;

(b) to order specific performance of a contract (other than a contract relating to

land);

(c) to order the rectification, setting aside or cancellation of a deed or other docu-
ment.

49. Interest Al—049

(1) The parties are free to agree on the powers of the tribunal as regards the award of
interest.
(2) Unless otherwise agreed by the parties the following provisions apply.
(3) The tribunal may award simple or compound interest from such dates, at such rates and
with such rests as it considers meets the justice of the case—

(a) on the whole or part of any amount awarded by the tribunal, in respect of any period
up to the date of the award;

(b) on the whole or part of any amount claimed in the arbitration and outstanding at the
commencement of the arbitral proceedings but paid before the award was made, in
respect of any period up to the date of payment.

(4) The tribunal may award simple or compound interest from the date of the award (or any
later date) until payment, at such rates and with such rests as it considers meets the justice
of the case, on the outstanding amount of any award (including any award of interest under
subsection (3) and any award as to costs).
(5) References in this section to an amount awarded by the tribunal include an amount
payable in consequence of a declaratory award by the tribunal.
(6) The above provisions do not affect any other power of the tribunal to award interest.
»
50. Extension of time for making award Al-050
(1) Where the time for making an award is limited by or in pursuance of the arbitration
agreement, then, unless otherwise agreed by the parties, the court may in accordance with
the following provisions by order extend that time.
(2) An application for an order under this section may be made—

(a) by the tribunal (upon notice to the parties), or

(b) by any party to the proceedings (upon notice to the tribunal and the other par-
ties),

but only after exhausting any available arbitral process for obtaining an extension of
time.
(3) The court shall only make an order if satisfied that a substantial injustice would
otherwise be done.
(4) The court may extend the time for such period and on such terms as it thinks fit, and
may do so whether or not the time previously fixed (by or under the agreement or by a
previous order) has expired.
(5) The leave of the court is required tor any appeal from a decision of the court under this
section.
 572 Appendix 1

Al-051 51. Settlement

(1) If during arbitral proceedings the parties settle the dispute, the following provisions
apply unless otherwise agreed by the parties. :
(2) The tribunal shall terminate the substantive proceedings and, if so requested by the
parties and not objected to by the tribunal, shall record the settlement in the form of an
agreed award.
(3) An agreed award shall state that it is an award of the tribunal and shall have the same
status and effect as any other award on the merits of the case.
(4) The following provisions of this Part relating to awards (sections 52 to 58) apply to an
agreed award.
(5) Unless the parties have also settled the matter of the payment of the costs of the
arbitration, the provisions of this Part relating to costs (sections 59 to 65) continue to
apply.

Al-052 52. Form of award

(1) The parties are free to agree on the form of an award.

(2) If or to the extent that there is no such agreement, the following provisions apply.
(3) The award shall be in writing signed by all the arbitrators or all those assenting to the
award.
(4) The award shall contain the reasons for the award unless it is an agreed award or the
parties have agreed to dispense with reasons.
(5) The award shall state the seat of the arbitration and the date when the award is
made.

Al-053 53. Place where award treated as made

Unless otherwise agreed by the parties, where the seat of the arbitration is in England
and Wales or Northern Ireland, any award in the proceedings shall be treated as made there,
regardless of where it was signed, despatched or delivered to any of the parties.

Al-054 54. Date of award

(1) Unless otherwise agreed by the parties, the tribunal may decide what is to be taken to
be the date on which the award was made.
(2) In the absence of any such decision, the date of the award shall be taken to be the date
on which it is signed by the arbitrator or, where more than one arbitrator signs the award,
by the last of them.

Al-055 55. Notification of award

(1) The parties are free to agree on the requirements as to notification of the award to the
parties.
(2) If there is no such agreement, the award shall be notified to the parties by service on
them of copies of the award, which shall be done without delay after the award is made.
(3) Nothing in this section affects section 56 (power to withhold award in case of non-
payment).

Al—056 56. Power to withhold award in case of non-payment

(1) The tribunal may refuse to deliver an award to the parties except upon full payment of
the fees and expenses of the arbitrators.
(2) If the tribunal refuses on that ground to deliver an award, a party to the arbitral
proceedings may (upon notice to the other parties and the tribunal) apply to the court,
which may order that—
 Appendix 1 573

(a) the tribunal shall deliver the award on the payment into court by the applicant of the
fees and expenses demanded, or such lesser amount as the court may specify,

(b) the amount of the fees and expenses properly payable shall be determined by such
means and upon such terms as the court may direct, and

(c) out of the money paid into court there shall be paid out such fees and expenses as
may be found to be properly payable and the balance of the money (if any) shall be
paid out to the applicant.

(3) For this purpose the amount of fees and expenses properly payable is the amount the
applicant is liable to pay under section 28 or any agreement relating to the payment of the
arbitrators.
(4) No application to the court may be made where there is any available arbitral process
for appeal or review of the amount of the fees or expenses demanded.
(5) References in this section to arbitrators include an arbitrator who has ceased to act and
an umpire who has not replaced the other arbitrators.
(6) The above provisions of this section also apply in relation to any arbitral or other
institution or person vested by the parties with powers in relation to the delivery of the
tribunal’s award.
As they so apply, the references to the fees and expenses of the arbitrators shall be
construed as including the fees and expenses of that institution or person.
(7) The leave of the court is required for any appeal from a decision of the court under this
section.
(8) Nothing in this section shall be construed as excluding an application under section 28
where payment has been made to the arbitrators in order to obtain the award.

57. Correction of award or additional award Al-057

(1) The parties are free to agree on the powers of the tribunal to correct an award or make
an additional award.
(2) If or to the extent there is no such agreement, the following provisions apply.
(3) The tribunal may on its own initiative or on the application of a party

(a) correct an award so as to remove any clerical mistake or error arising from an
accidental slip or omission or clarify or remove any ambiguity in the award, or

(b) make an additional award in respect of any claim (including a claim for interest or
costs) which was presented to the tribunal but was not dealt with in the award.

These powers shall not be exercised without first affording the other parties a reasonable
opportunity to make representations to the tribunal.
(4) Any application for the exercise of those powers must be made within 28 days of the
date of the award or such longer period as the parties may agree.
(5) Any correction of an award shall be made within 28 days of the date the application was
received by the tribunal or, where the correction is made by the tribunal on its own
initiative, within 28 days of the date of the award or, in either case, such longer period as
the parties may agree.
(6) Any additional award shall be made within 56 days of the date of the original award or
such longer period as the parties may agree.
(7) Any correction of an award shall form part of the award.
 574 Appendix 1

Al-058 58. Effect of award

(1) Unless otherwise agreed by the parties, an award made by the tribunal pursuant to an
arbitration agreement is final and binding both on the parties and on any persons claiming
through or under them.
(2) This does not affect the right of aperson to challenge the award by any available arbitral
process of appeal or review or in accordance with the provisions of this Part.

Costs ofthe arbitration

Al-059 59. Costs of the arbitration

(1) References in this Part to the costs of the arbitration are to—

(a) the arbitrators’ fees and expenses,

(b) the fees and expenses of any arbitral institution concerned, and

(c) the legal or other costs of the parties.

(2) Any such reference includes the costs of or incidental to any proceedings to determine
the amount of the recoverable costs of the arbitration (see section 63).

A1—060 60. Agreement to pay costs in any event

An agreement which has the effect that a party is to pay the whole or part of the costs
of the arbitration in any event is only valid if made after the dispute in question has
arisen.

Al-061 61. Award of costs

(1) The tribunal may make an award allocating the costs of the arbitration as between the
parties, subject to any agreement of the parties.
(2) Unless the parties otherwise agree, the tribunal shall award costs on the general
principle that costs should follow the event except where it appears to the tribunal that in
the circumstances this is not appropriate in relation to the whole or part of the costs.

Al—062 62. Effect of agreement or award about costs

Unless the parties otherwise agree, any obligation under an agreement between them as
to how the costs of the arbitration are to be borne, or under an award allocating the costs
of the arbitration, extends only to such costs as are recoverable.

Al-—063 63. The recoverable costs of the arbitration

(1) The parties are free to agree what costs of the arbitration are recoverable.
(2) If or to the extent there is no such agreement, the following provisions apply.
(3) The tribunal may determine by award the recoverable costs of the arbitration on such
basis as it thinks fit.
If it does so, it shall specify—

(a) the basis on which it has acted, and

(b) the items of recoverable costs and the amount referable to each.
 Appendix | 575

(4) If the tribunal does not determine the recoverable costs of the arbitration, any party to
the arbitral proceedings may apply to the court (upon notice to the other parties) which
may—

(a) determine the recoverable costs of the arbitration on such basis as it thinks fit, or

(b) order that they shall be determined by such means and upon such terms as it may
specify.

(5) Unless the tribunal or the court determines otherwise—

(a) the recoverable costs of the arbitration shall be determined on the basis that there
shall be allowed a reasonable amount in respect of all costs reasonably incurred,
and

(b) any doubt as to whether costs were reasonably incurred or were reasonable in
amount shall be resolved in favour of the paying party.

(6) The above provisions have effect subject to section 64 (recoverable fees and expenses of
arbitrators),
(7) Nothing in this section affects any right of the arbitrators, any expert, legal adviser or
assessor appointed by the tribunal, or any arbitral institution, to payment of their fees and
expenses.

64. Recoverable fees and expenses of arbitrators Al—064

(1) Unless otherwise agreed by the parties, the recoverable costs of the arbitration shall
include in respect of the fees and expenses of the arbitrators only such reasonable fees and
expenses as are appropriate in the circumstances.
(2) If there is any question as to what reasonable fees and expenses are appropriate in the
circumstances, and the matter is not already before the court on an application under
stction 63(4), the court may on the application of any party (upon notice to the other
parties )—

(a) determine the matter, or

(b) order that it be determined by such means and upon such terms as the court may
specify.

(3) Subsection (1) has effect subject to any order of the court under section 24(4) or
25(3)(b) (order as to entitlement to fees or expenses in case of removal or resignation of
arbitrator).
(4) Nothing in this section affects any right of the arbitrator to payment of his fees and
expenses.

65. Power to limit recoverable costs Al-—065

(1) Unless otherwise agreed by the parties, the tribunal may direct that the recoverable
costs of the arbitration, or of any part of the arbitral proceedings, shall be limited to a
specified amount.
(2) Any direction may be made or varied at any stage, but this must be done sufficiently in
advance of the incurring of costs to which it relates, or the taking of any steps in the
proceedings which may be affected by it, for the limit to be taken into account.
 576 Appendix |

Powers of the court in relation to award

Al—066 66. Enforcement of the award

(1) An award made by the tribunal pursuant to an arbitration agreement may, by leave of
the court, be enforced in the same manner as a judgment or order of the court to the same
effect.
(2) Where leave is so given, judgment may be entered in terms of the award.
(3) Leave 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.
The right to raise such an objection may have been lost (see section 73).
(4) Nothing in this section affects the recognition or enforcement of an award under any
other enactment or rule of law, in particular under Part II of the Arbitration Act 1950
(enforcement of awards under Geneva Convention) or the provisions of Part III of this Act
relating to the recognition and enforcement of awards under the New York Convention or
by an action on the award.

Al—067 67. Challenging the award: substantive jurisdiction

(1) A party to arbitral proceedings may (upon notice to the other parties and to the
tribunal) apply to the court—

(a) challenging any award of the arbitral tribunal as to its substantive jurisdiction; or

(b) for an order declaring an award made by the tribunal on the merits to be of no effect,
in whole or in part, because the tribunal did not have substantive jurisdiction.

A party may lose the right to object (see section 73) and the right to apply is subject to the
restrictions in section 70(2) and (3).
(2) The arbitral tribunal may continue the arbitral proceedings and make a further award
while an application to the court under this section is pending in relation to an award as to
jurisdiction.
(3) On an application under this section challenging an award of the arbitral tribunal as to
its substantive jurisdiction, the court may by order—

(a) confirm the award,

(b) vary the award, or

(c) set aside the award in whole or in part.

(4) The leave of the court is required for any appeal from a decision of the court under this
section.

A1—-068 68. Challenging the award: serious irregularity

(1) A party to arbitral proceedings may (upon notice to the other parties and to the
tribunal) apply to the court challenging an award in the proceedings on the ground of
serious irregularity affecting the tribunal, the proceedings or the award.
A party may lose the right to object (see section 73) and the right to apply is subject to the
restrictions in section 70(2) and (3).
(2) Serious irregularity means an irregularity of one or more of the following kinds which
the court considers has caused or will cause substantial injustice to the applicant—
 Appendix ] EWA ~l

(a) failure by the tribunal to comply with section 33 (general duty of tribunal)

(b) the tribunal exceeding its powers (otherwise than by exceeding its substantive
jurisdiction: see section 67);
(c) failure by the tribunal to conduct the proceedings in accordance with the procedure
agreed by the parties;
(d) failure by the tribunal to deal with all the issues that were put to it;

(e) any arbitral or other institution or person vested by the parties with powers in
relation to the proceedings or the award exceeding its powers;
(f) uncertainty or ambiguity as to the effect of the award;

(g) the award being obtained by fraud or the award or the way in which it was procured
being contrary to public policy;

(h) failure to comply with the requirements as to the form of the award; or
(1) any irregularity in the conduct of the proceedings or in the award which is admitted
by the tribunal or by any arbitral or other institution or person vested by the parties
with powers in relation to the proceedings or the award.

(3) If there is shown to be serious irregularity affecting the tribunal, the proceedings or the
award, the court may—

(a) remit the award to the tribunal, in whole or in part, for reconsideration,

(b) set the award aside in whole or in part, or

(c) declare the award to be of no effect, in whole or in part.

The court shall not exercise its power to set aside or to declare an award to be of no effect,
in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters
in question to the tribunal for reconsideration.
(4) The leave of the court is required for any appeal from a decision of the court under this
section.

69. Appeal on point of law Al-069

(1) Unless otherwise agreed by the parties, a party to arbitral proceedings may (upon notice
to the other parties and to the tribunal) appeal to the court on a question of law arising out
of an award made in the proceedings.
An agreement to dispense with reasons for the tribunal’s award shall be considered an
agreement to exclude the court’s jurisdiction under this section.
(2) An appeal shall not be brought under this section except—

(a) with the agreement of all the other parties to the proceedings, or

(b) with the leave of the court.

The right to appeal is also subject to the restrictions in section 70(2) and (3).
(3) Leave to appeal shall be given only if the court is satisfied—

(a) that the determination of the question will substantially affect the rights of one or
more of the parties,

(b) that the question is one which the tribunal was asked to determine,
 578 Appendix |

(c) that, on the basis of the findings of fact in the award

(i) the decision of the tribunal on the question is obviously wrong, or

(ii) the question is one of general public importance and the decision of the
tribunal is at least open to serious doubt, and

(d) that, despite the agreement of the parties to resolve the matter by arbitration, it is
just and proper in all the circumstances for the court to determine the question.

(4) An application for leave to appeal under this section shall identify the question of law
to be determined and state the grounds on which it is alleged that leave to appeal should
be granted.
(5) The court shall determine an application for leave to appeal under this section without
a hearing unless it appears to the court that a hearing is required.
(6) The leave of the court is required for any appeal from a decision of the court under this
section to grant or refuse leave to appeal.
(7) On an appeal under this section the court may by order—

(a) confirm the award,

(b) vary the award,

(c) remit the award to the tribunal, in whole or in part, for reconsideration in the light
of the court’s determination, or

(d) set aside the award in whole or in part.

The court shall not exercise its power to set aside an award, in whole or in part, unless it
is satisfied that it would be inappropriate to remit the matters in question to the tribunal
for reconsideration.
(8) The decision of the court on an appeal under this section shall be treated as a judgment
of the court for the purposes of a further appeal.
But no such appeal lies without the leave of the court which shall not be given unless the
court considers that the question is one of general importance or is one which for some
other special reason should be considered by the Court of Appeal.

Al-070 70. Challenge or appeal: supplementary provisions

(1) The following provisions apply to an application or appeal under section 67, 68 or
69.
(2) An application or appeal may not be brought if the applicant or appellant has not first
exhausted—

(a) any available arbitral process of appeal or review, and

(b) any available recourse under section 57 (correction of award or additional award).

(3) Any application or appeal must be brought within 28 days of the date of the award or,
if there has been any arbitral process of appeal or review, of the date when the applicant or
appellant was notified of the result of that process.
(4) If on an application or appeal it appears to the court that the award—

(a) does not contain the tribunal’s reasons, or

(b) does not set out the tribunal’s reasons in sufficient detail to enable the court properly
to consider the application or appeal,
 Appendix | 579

the court may order the tribunal to state the reasons for its award in sufficient detail for that
purpose.
(5) Where the court makes an order under subsection (4), it may make such further order
as it thinks fit with respect to any additional costs of the arbitration resulting from its
order.
(6) The court may order the applicant or appellant to provide security for the costs of the
application or appeal, and may direct that the application or appeal be dismissed ifthe order
is not complied with.
The power to order security for costs shall not be exercised on the ground that the applicant
or appellant is—

(a) an individual ordinarily resident outside the United Kingdom, or

(b) a corporation or association incorporated or formed under the law of a country
outside the United Kingdom, or whose central management and control is exercised
outside the United Kingdom.

(7) The court may order that any money payable under the award shall be brought into
court or otherwise secured pending the determination ofthe application or appeal, and may
direct that the application or appeal be dismissed if the order is not complied with.
(8) The court may grant leave to appeal subject to conditions to the same or similar effect
as an order under subsection (6) or (7).
This does not affect the general discretion of the court to grant leave subject to condi-
tions.

71. Challenge or appeal: effect of order of court Al-071

(1) The following provisions have effect where the court makes an order under section 67,
68 or 69 with respect to an award.
(2) Where the award is varied, the variation has effect as part of the tribunal’s award.
(3) Where the award is remitted to the tribunal, in whole or in part, for reconsideration,
the tribunal shall make a fresh award in respect of the matters remitted within three months
of the date of the order for remission or such longer or shorter period as the court may
direct.
(4) Where the award is set aside or declared to be of no effect, in whole or in part, the court
may also order that any provision that an award is a condition precedent to the bringing of
legal proceedings in respect of amatter to which the arbitration agreement applies, is of no
effect as regards the subject matter of the award or, as the case may be, the relevant part of
the award.

Miscellaneous

72. Saving for rights of person who takes no part in proceedings Al-072
(1) A person alleged to be a party to arbitral proceedings but who takes no part in the
proceedings may question—

(a) whether there is a valid arbitration agreement,

(b) whether the tribunal is properly constituted, or

(c) what matters have been submitted to arbitration in accordance with the arbitration
agreement,
 580 Appendix 1

by proceedings in the court for a declaration or injunction or other appropriate relief.

(2) He also has the same right as a party to the arbitral proceedings to challenge an
award—

(a) by an application under section 67 on the ground of lack of substantive jurisdiction

in relation to him, or

(b) by an application under section 68 on the ground of serious irregularity (within the
meaning of that section) affecting him;

and section 70(2) (duty to exhaust arbitral procedures) does not apply in his case.

Al-073 73. Loss of right to object

(1) Ifa party to arbitral proceedings takes part, or continues to take part, in the proceedings
without making, either forthwith or within such time as is allowed by the arbitration
agreement or the tribunal or by any provision of this Part, any objection—

(a) that the tribunal lacks substantive jurisdiction,

(b) that the proceedings have been improperly conducted,

(c) that there has been a failure to comply with the arbitration agreement or with any
provision of this Part, or

(d) that there has been any other irregularity affecting the tribunal or the proceed-
ings,

he may not raise that objection later, before the tribunal or the court, unless he shows that,
at the time he took part or continued to take part in the proceedings, he did not know and
could not with reasonable diligence have discovered the grounds for the objection.
(2) Where the arbitral tribunal rules that it has substantive jurisdiction and a party to
arbitral proceedings who could have questioned that ruling—

(a) by any available arbitral process of appeal or review, or

(b) by challenging the award,

does not do so, or does not do so within the time allowed by the arbitration agreement or
any provision of this Part, he may not object later to the tribunal’s substantive jurisdiction
on any ground which was the subject of that ruling.

Al-074 74. Immunity of arbitral institutions, &c

(1) An arbitral or other institution or person designated or requested by the parties to

appoint or nominate an arbitrator is not liable for anything done or omitted in the discharge
or purported discharge of that function unless the act or omission is shown to have been
in bad faith.
(2) An arbitral or other institution or person by whom an arbitrator is appointed or
nominated is not liable, by reason of having appointed or nominated him, for anything done
or omitted by the arbitrator (or his employees or agents) in the discharge or purported
discharge of his functions as arbitrator.
(3) The above provisions apply to an employee or agent of an arbitral or other institution
or person as they apply to the institution or person himself.
 Appendix | 581

75. Charge to secure payment of solicitors’ costs Al-075

The powers of the court to make declarations and orders under section 73 of the
Solicitors Act 1974 or Article 71H of the Solicitors (Northern Ireland) Order 1976 (power
to charge property recovered in the proceedings with the payment of solicitors’ costs) may
be exercised in relation to arbitral proceedings as if those proceedings were proceedings in
the court.

Supplementary

76. Service of notices, &c Al—076

(1) The parties are free to agree on the manner of service of any notice or other document
required or authorised to be given or served in pursuance of the arbitration agreement or
for the purposes of the arbitral proceedings.
(2) If or to the extent that there is no such agreement the following provisions apply.
(3) A notice or other document may be served on a person by any effective means.
(4) If a notice or other document is addressed, pre-paid and delivered by post—

(a) to the addressee’s last known principal residence or, if he is or has been carrying on
a trade, profession or business, his last known principal business address, or
(b) where the addressee is a body corporate, to the body’s registered or principal
office,

it shall be treated as effectively served.

(5) This section does not apply to the service of documents for the purposes of legal
proceedings, for which provision is made by rules of court.
(6) References in this Part to a notice or other document include any form of communica-
tion in writing and references to giving or serving a notice or other document shall be
cqnstrued accordingly.

77. Powers of court in relation to service of documents EME Ui

(1) This section applies where service of adocument on a person in the manner agreed by
the parties, or in accordance with provisions of section 76 having effect in default of
agreement, is not reasonably practicable.
(2) Unless otherwise agreed by the parties, the court may make such order as it thinks
fit—

(a) for service in such manner as the court may direct, or

(b) dispensing with service of the document.

(3) Any party to the arbitration agreement may apply for an order, but only after exhausting
any available arbitral process for resolving the matter.
(4) The leave of the court is required for any appeal from a decision of the court under this
section.

78. Reckoning periods of time Al-078

(1) The parties are free to agree on the method of reckoning periods of time for the
purposes of any provision agreed by them or any provision of this Part having effect in
default of such agreement.
 582 Appendix 1

(2) If or to the extent there is no such agreement, periods of time shall be reckoned in
accordance with the following provisions.
(3) Where the act is required to be done within a specified period after or from a specified
date, the period begins immediately after that date.
(4) Where the act is required to be done a specified number of clear days after a specified
date, at least that number of days must intervene between the day on which the act is done
and that date.
(5) Where the period is a period of seven days or less which would include a Saturday,
Sunday or a public holiday in the place where anything which has to be done within the
period falls to be done, that day shall be excluded.
In relation to England and Wales or Northern Ireland, a ‘“‘public holiday” means Christmas
Day, Good Friday or a day which under the Banking and Financial Dealings Act 1971 is a
bank holiday.

Al-079 79. Power of court to extend time limits relating to arbitral proceedings
(1) Unless the parties otherwise agree, the court may by order extend any time limit agreed
by them in relation to any matter relating to the arbitral proceedings or specified in any
provision of this Part having effect in default of such agreement.
This section does not apply to a time limit to which section 12 applies (power of court to
extend time for beginning arbitral proceedings, &c.).
(2) An application for an order may be made—

(a) by any party to the arbitral proceedings (upon notice to the other parties and to the
tribunal), or
(b) by the arbitral tribunal (upon notice to the parties).

(3) The court shall not exercise its power to extend a time limit unless it is satisfied—

(a) that any available recourse to the tribunal, or to any arbitral or other institution or
person vested by the parties with power in that regard, has first been exhausted,
and
(b) that a substantial injustice would otherwise be done.

(4) The court’s power under this section may be exercised whether or not the time has
already expired.
(5) An order under this section may be made on such terms as the court thinks fit.
(6) The leave ofthe court is required for any appeal from a decision of the court under this
section.

A1—080 80. Notice and other requirements in connection with legal proceedings
(1) References in this Part to an application, appeal or other step in relation to legal
proceedings being taken “‘upon notice” to the other parties to the arbitral proceedings, or
to the tribunal, are to such notice of the originating process as is required by rules of court
and do not impose any separate requirement.
(2) Rules of court shall be made—

(a) requiring such notice to be given as indicated by any provision of this Part, and
(b) as to the manner, form and content of any such notice.

(3) Subject to any provision made by rules of court, a requirement to give notice to the
tribunal of legal proceedings shall be construed—
 Appendix 1 58 w

(a) if there is more than one arbitrator, as a requirement to give notice to each of them,
and

(b) if the tribunal is not fully constituted, as a requirement to give notice to any
arbitrator who has been appointed.

(4) References in this Part to making an application or appeal to the court within a specified
period are to the issue within that period of the appropriate originating process in
accordance with rules of court.
(5) Where any provision of this Part requires an application or appeal to be made to the
court within a specified time, the rules of court relating to the reckoning of periods, the
extending or abridging of periods, and the consequences of not taking a step within the
period prescribed by the rules, apply in relation to that requirement.
(6) Provision may be made by rules of court amending the provisions of this Part—

(a) with respect to the time within which any application or appeal to the court must be
made,

(b) so as to keep any provision made by this Part in relation to arbitral proceedings in
step with the corresponding provision of rules of court applying in relation to
proceedings in the court, or
(c) so as to keep any provision made by this Part in relation to legal proceedings in step
with the corresponding provision of rules of court applying generally in relation to
proceedings in the court.

(7) Nothing in this section affects the generality of the power to make rules of court.

81. Saving for certain matters governed by common law Al-081

(1) Nothing in this Part shall be construed as excluding the operation of any rule of law
consistent with the provisions of this Part, in particular, any rule of law as to—
>

(a) matters which are not capable of settlement by arbitration;

(b) the effect of an oral arbitration agreement; or

(c) the refusal of recognition or enforcement of an arbitral award on grounds of public

policy.

(2) Nothing in this Act shall be construed as reviving any jurisdiction of the court to set
aside or remit an award on the ground of errors of fact or law on the face of the award.

82. Minor definitions A1—082

(1) In this Part—

“arbitrator”, unless the context otherwise requires, includes an umpire;
“available arbitral process”, in relation to any matter, includes any process of appeal to
or review by an arbitral or other institution or person vested by the parties with powers
in relation to that matter;
and
“claimant”, unless the context otherwise requires, includes a counter claimant,
related expressions shall be construed accordingly;
“dispute” includes any difference;
“enactment” includes an enactment contained in Northern Ireland legislation;
“legal proceedings” means civil proceedings in the High Court or a county court;
 584 Appendix 1

“‘yeremptory order” means an order made under section 41(5) or made in exercise of any
corresponding power conferred by the parties;
““yremises” includes land, buildings, moveable structures, vehicles, vessels, aircraft and
hovercraft;
“question of law’? means—

(a) for a court in England and Wales, a question of the law of England and Wales,
and

(b) for a court in Northern Ireland, a question of the law of Northern Ireland;

“substantive jurisdiction”, in relation to an arbitral tribunal, refers to the matters

specified in section 30(1)(a) to (c), and references to the tribunal exceeding its
substantive jurisdiction shall be construed accordingly.
(2) References in this Part to a party to an arbitration agreement include any person
claiming under or through a party to the agreement.

A1-083 83. Index of defined expressions: Part I

In this Part the expressions listed below are defined or otherwise explained by the
provisions indicated—

agreement, agree and agreed section 5(1)

agreement in writing section 5(2) to (5)
arbitration agreement sections 6 and 5(1)
arbitrator section 82(1)
available arbitral process section 82(1)
claimant section 82(1)
commencement (in relation section 14
to arbitral proceedings)
costs of the arbitration section 59
the court section 105
dispute section §2(1)
enactment section 82(1)
legal proceedings section 82(1)
Limitation Acts section 13(4)
notice (or other document) section 76(6)
party—
~in relation to an section 82(2)
arbitration agreement
—where section 106(2) section 106(4)
or (3) applies
peremptory order section 82(1) (and see section 41(5))
premises section 82(1)
question of law section 82(1)
recoverable costs sections 63 and 64
seat of the arbitration section 3
serve and service (of notice section 76(6)
or other document)
 Appendix | 585

substantive jurisdiction (in section 82(1) (and see 30(1)(a) to (c))

relation to an arbitral
tribunal)
upon notice (to the parties or — section 80
the tribunal)
written and in writing section 5(6)

84. Transitional provisions Al—-084

(1) The provisions of this Part do not apply to arbitral proceedings commenced before the
date on which this Part comes into force.
(2) They apply to arbitral proceedings commenced on or after that date under an arbitra-
tion agreement whenever made.
(3) The above provisions have effect subject to any transitional provision made by an order
under section 109(2) (power to include transitional provisions in commencement order).

Parr II

OTHER PROVISIONS RELATING TO ARBITRATION

Domestic arbitration agreements

85. Modification of Part I in relation to domestic arbitration agreement Al—085

(1) In the case of a domestic arbitration agreement the provisions of Part I are modified in
accordance with the following sections.
(2) For this purpose a “domestic arbitration agreement” means an arbitration agreement to
which none of the parties is—

(a) an individual who is a national of, or habitually resident in, a state other than the
United Kingdom, or

(b) a body corporate which is incorporated in, or whose central control and management
is exercised in, a state other than the United Kingdom,

and under which the seat of the arbitration (if the seat has been designated or determined)
is in the United Kingdom.
(3) In subsection (2) “arbitration agreement” and “‘seat of the arbitration” have the same
meaning as in Part I (see sections 3, 5(1) and 6).

86. Staying of legal proceedings A1—086

(1) In section 9 (stay of legal proceedings), subsection (4) (stay unless the arbitration
agreement is null and void, inoperative, or incapable of being performed) does not apply to
a domestic arbitration agreement.
(2) On an application under that section in relation to a domestic arbitration agreement the
court shall grant a stay unless satisfied—

(a) that the arbitration agreement is null and void, inoperative, or incapable of being
performed, or
 586 Appendix 1

(b) that there are other sufficient grounds for not requiring the parties to abide by the
arbitration agreement.

(3) The court may treat as a sufficient ground under subsection (2)(b) the fact that the
applicant is or was at any material time not ready and willing to do all things necessary for
the proper conduct ofthe arbitration or of any other dispute resolution procedures required
to be exhausted before resorting to arbitration.
(4) For the purposes of this section the question whether an arbitration agreement is a
domestic arbitration agreement shall be determined by reference to the facts at the time the
legal proceedings are commenced.

A1—087 87. Effectiveness of agreement to exclude court’s jurisdiction

(1) In the case of adomestic arbitration agreement any agreement to exclude the jurisdic-
tion of the court under—

(a) section 45 (determination of preliminary point of law), or

(b) section 69 (challenging the award: appeal on point of law),

is not effective unless entered into after the commencement of the arbitral proceedings in
which the question arises or the award is made.
(2) For this purpose the commencement of the arbitral proceedings has the same meaning
as in Part I (see section 14).
(3) For the purposes of this section the question whether an arbitration agreement is a
domestic arbitration agreement shall be determined by reference to the facts at the time the
agreement is entered into.

A1—088 88. Power to repeal or amend sections 85 to 87

(1) The Secretary of State may by order repeal or amend the provisions of sections 85 to
87.
(2) An order under this section may contain such supplementary, incidental and transi-
tional provisions as appear to the Secretary of State to be appropriate.
(3) An order under this section shall be made by statutory instrument and no such order
shall be made unless a draft of it has been laid before and approved by a resolution of each
House of Parliament.

Consumer arbitration agreements

A1—089 89. Application of unfair terms regulations to consumer arbitration

agreements

(1) The following sections extend the application of the Unfair Terms in Consumer
Contracts Regulations 1994 in relation to a term which constitutes an arbitration agree-
ment.
For this purpose “arbitration agreement”? means an agreement to submit to arbitration
present or future disputes or differences (whether or not contractual).
(2) In those sections “the Regulations” means those regulations and includes any regula-
tions amending or replacing those regulations.
(3) Those sections apply whatever the law applicable to the arbitration agreement.
 Appendix 1 587

90. Regulations apply where consumer is a legal person Al-090

The Regulations apply where the consumer is a legal person as they apply where the
consumer is a natural person.

91. Arbitration agreement unfair where modest amount sought Al-091

(1) A term which constitutes an arbitration agreement is unfair for the purposes of the
Regulations so far as it relates to a claim for a pecuniary remedy which does not exceed the
amount specified by order for the purposes of this section.
(2) Orders under this section may make different provision for different cases and for
different purposes.
(3) The power to make orders under this section is exercisable—

(a) for England and Wales, by the Secretary of State with the concurrence of the Lord
Chancellor,

(b) for Scotland, by the Secretary of State [... |', and

(c) for Northern Ireland, by the Department of Economic Development for Northern
Ireland with the concurrence of the Lord Chancellor.

(4) Any such order for Northern Ireland shall be a statutory rule for the purposes of the
Statutory Rules (Northern Ireland) Order 1979 and shall be subject to negative resolution;
within the meaning of section 41(6) of the Interpretation Act (Northern Ireland) 1954.
(5) Any such order for Northern Ireland shall be a statutory rule for the purposes of the
Statutory Rules (Northern Ireland) Order 1979 and shall be subject to negative resolution,
within the meaning of section 41(6) of the Interpretation Act (Northern Ireland) 1954.
Note: 'Words in square brackets repealed by the Transfer of Functions (Lord Advocate and
Secretary of State Order) 1999 (SI. 1999 No. 678), ag003, art.16.

Small claims arbitration in the county court

92. Exclusion of Part I in relation to small claims arbitration in the County Al-092
Court
Nothing in Part I of this Act applies to arbitration under section 64 of the County Courts
Act 1984.

Appointment ofjudges as arbitrators

93. Appointment of judges as arbitrators Al-093

(1) A judge of the Commercial Court or an official referee may, if in all the circumstances
he thinks fit, accept appointment as a sole arbitrator or as umpire by or by virtue of an
arbitration agreement.
(2) A judge of the Commercial Court shall not do so unless the Lord Chief Justice has
informed him that, having regard to the state of business in the High Court and the Crown
Court, he can be made available.
(3) An official referee shall not do so unless the Lord Chief Justice has informed him that,
having regard to the state of official referees’ business, he can be made available.
 588 Appendix 1

(4) The fees payable for the services of a judge of the Commercial Court or official referee
as arbitrator or umpire shall be taken in the High Court.
(5) In this section—
“arbitration agreement” has the same meaning as in Part I; and
“official referee’? means a person nominated under section 68(1)(a) of the Supreme
Court Act 1981 to deal with official referees’ business.
(6) The provisions of Part I of this Act apply to arbitration before a person appointed
under this section with the modifications specified in Schedule 2.

Statutory arbitrations

Al—094 94. Application of Part I to statutory arbitrations

(1) The provisions of Part I apply to every arbitration under an enactment (a “statutory
arbitration”), whether the enactment was passed or made before or after the commence-
ment of this Act, subject to the adaptations and exclusions specified in sections 95 to
98.
(2) The provisions of Part I do not apply to a statutory arbitration if or to the extent that
their application—

(a) is inconsistent with the provisions of the enactment concerned, with any rules or
procedure authorised or recognised by it, or
(b) is excluded by any other enactment.

(3) In this section and the following provisions of this Part ‘“‘enactment’”—

(a) in England and Wales, includes an enactment contained in subordinate legislation

within the meaning of the Interpretation Act 1978;

(b) in Northern Ireland, means a statutory provision within the meaning of section 1(f)
of the Interpretation Act (Northern Ireland) 1954.

Al—095 95. General adaptation of provisions in relation to statutory arbitrations

(1) The provisions of Part I apply to a statutory arbitration—

(a) as if the arbitration were pursuant to an arbitration agreement and as if the

enactment were that agreement, and

(b) as if the persons by and against whom a claim subject to arbitration in pursuance of
the enactment may be or has been made were parties to that agreement.

(2) Every statutory arbitration shall be taken to have its seat in England and Wales or, as
the case may be, in Northern Ireland.

A1—096 96. Specific adaptations of provisions in relation to statutory arbitrations

(1) The following provisions of Part I apply to a statutory arbitration with the following
adaptations.
(2) In section 30(1) (competence of tribunal to rule on its own jurisdiction), the reference
in paragraph (a) to whether there is a valid arbitration agreement shall be construed as a
reference to whether the enactment applies to the dispute or difference in question.
 Appendix 1 589

(3) Section 35 (consolidation of proceedings and concurrent hearings) applies only so as to

authorise the consolidation of proceedings, or concurrent hearings in proceedings, under
the same enactment.
(4) Section 46 (rules applicable to substance of dispute) applies with the omission of
subsection (1)(b) (determination in accordance with considerations agreed by parties).

97. Provisions excluded from applying to statutory arbitrations Al-097

The following provisions of Part I do not apply in relation to a statutory arbitration—

(a) section 8 (whether agreement discharged by death of a party);

(b) section 12 (power of court to extend agreed time limits);

(c) sections 9(5), 10(2) and 71(4) (restrictions on effect of provision that award condition
precedent to right to bring legal proceedings).

98. Power to make further provision by regulations Al—098

(1) The Secretary of State may make provision by regulations for adapting or excluding any
provision of Part I in relation to statutory arbitrations in general or statutory arbitrations
of any particular description.
(2) The power is exercisable whether the enactment concerned is passed or made before or
after the commencement of this Act.
(3) Regulations under this section shall be made by statutory instrument which shall be
subject to annulment in pursuance of a resolution of either House of Parliament.

Part III

RECOGNITION AND ENFORCEMENT OF CERTAIN FOREIGN AWARDS

Enforcement of Geneva Convention awards

99. Continuation of Part II of the Arbitration Act 1950 Al—099

Part II of the Arbitration Act 1950 (enforcement of certain foreign awards) continues to
apply in relation to foreign awards within the meaning of that Part which are not also New
York Convention awards.

Recognition and enforcement of New York Convention awards

100. New York Convention awards Al-100

(1) In this Part a “New York Convention award” means an award made, in pursuance of
an arbitration agreement, in the territory of a state (other than the United Kingdom) which
is a party to the New York Convention.
(2) For the purposes of subsection (1) and of the provisions of this Part relating to such
awards—
 590 Appendix 1

(a) ‘“‘arbitration agreement” means an arbitration agreement in writing, and

(b) an award shall be treated as made at the seat of the arbitration, regardless of where
it was signed, despatched or delivered to any of the parties.

In this subsection ‘‘agreement in writing” and “‘seat of the arbitration” have the same
meaning as in Part I.
(3) If Her Majesty by Order in Council declares that a state specified in the Order is a party
to the New York Convention, or is a party in respect of any territory so specified, the Order
shall, while in force, be conclusive evidence of that fact.
(4) In this section “the New York Convention” means the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards adopted by the United Nations Conference on
International Commercial Arbitration on 10th June 1958.

Al-101 101. Recognition and enforcement of awards

(1) A New York Convention award shall be recognised as binding on the persons as
between whom it was made, and may accordingly be relied on by those persons by way of
defence, set-off or otherwise in any legal proceedings in England and Wales or Northern
Ireland.
(2) A New York Convention award may, by leave of the court, be enforced in the same
manner as a judgment or order of the court to the same effect.
As to the meaning of ‘‘the court” see section 105.
(3) Where leave is so given, judgment may be entered in terms of the award.

Al-102 102. Evidence to be produced by party seeking recognition or enforcement

(1) A party seeking the recognition or enforcement of a New York Convention award must
produce—

(a) the duly authenticated original award or a duly certified copy of it, and

(b) the original arbitration agreement or a duly certified copy of it.

(2) If the award or agreement is in a foreign language, the party must also produce a
translation of it certified by an official or sworn translator or by a diplomatic or consular
agent.

Al-103 103. Refusal of recognition or enforcement

(1) Recognition or enforcement of a New York Convention award shall not be refused
except in the following cases.
(2) Recognition or enforcement of the award may be refused if the person against whom it
is invoked proves—

(a) that a party to the arbitration agreement was (under the law applicable to him) under
some incapacity;

(b) that the arbitration agreement was not valid under the law to which the parties
subjected it or, failing any indication thereon, under the law of the country where the
award was made;

(c) that he was not given proper notice of the appointment of the arbitrator or of the
arbitration proceedings or was otherwise unable to present his case;
 Appendix 1 591

(d) that the award deals with a difference not contemplated by or not falling within the
terms of the submission to arbitration or contains decisions on matters beyond the
scope of the submission to arbitration (but see subsection (4));

(e) that the composition of the arbitral tribunal or the arbitral procedure was not in
accordance with the agreement ofthe parties or, failing such agreement, with the law
of the country in which the arbitration took place;

(f) that the award has not yet become binding on the parties, or has been set aside or
suspended by a competent authority of the country in which, or under the law of
which, it was made.

(3) Recognition or enforcement of the award may also be refused if the award is in respect
of a matter which is not capable of settlement by arbitration, or if it would be contrary to
public policy to recognise or enforce the award.
(4) An award which contains decisions on matters not submitted to arbitration may be
recognised or enforced to the extent that it contains decisions on matters submitted to
arbitration which can be separated from those on matters not so submitted.
(5) Where an application for the setting aside or suspension of the award has been made to
such a competent authority as is mentioned in subsection (2)(f), the court before which the
award is sought to be relied upon may, if it considers it proper, adjourn the decision on the
recognition or enforcement of the award.
It may also on the application of the party claiming recognition or enforcement of the award
order the other party to give suitable security.

104. Saving for other bases of recognition or enforcement Al-104

Nothing in the preceding provisions of this Part affects any right to rely upon or enforce
a New York Convention award at common law or under section 66.

Part IV

GENERAL PROVISIONS

105. Meaning of “the court’: jurisdiction of High Court and county court Al-105
(1) In this Act “the court” means the High Court or a county court, subject to the
following provisions.
(2) The Lord Chancellor may by order make provision—

(a) allocating proceedings under this Act to the High Court or to county courts; or

(b) specifying proceedings under this Act which may be commenced or taken only in the
High Court or in a county court.

(3) The Lord Chancellor may by order make provision requiring proceedings of any
specified description under this Act in relation to which a county court has jurisdiction to
be commenced or taken in one or more specified county courts.
Any jurisdiction so exercisable by a specified county court is exercisable throughout
England and Wales or, as the case may be, Northern Ireland.
(4) An order under this section—
 592 Appendix 1

(a) may differentiate between categories of proceedings by reference to such criteria as

the Lord Chancellor sees fit to specify, and

(b) may make such incidental or transitional provision as the Lord Chancellor considers
necessary or expedient.

(5) An order under this section for England and Wales shall be made by statutory
instrument which shall be subject to annulment in pursuance of a resolution of either
House of Parliament.
(6) An order under this section for Northern Ireland shall be a statutory rule for the
purposes of the Statutory Rules (Northern Ireland) Order 1979 which shall be subject to
annulment in pursuance of a resolution of either House of Parliament in like manner as a
statutory instrument and section 5 of the Statutory Instruments Act 1946 shall apply
accordingly.

A1—106 106. Crown application

(1) Part I of this Act applies to any arbitration agreement to which Her Majesty, either in
right of the Crown or of the Duchy of Lancaster or otherwise, or the Duke of Cornwall, is
a party.
(2) Where Her Majesty is party to an arbitration agreement otherwise than in right of the
Crown, Her Majesty shall be represented for the purposes of any arbitral proceedings—

(a) where the agreement was entered into by Her Majesty in right of the Duchy of
Lancaster, by the Chancellor of the Duchy or such person as he may appoint,
and

(b) in any other case, by such person as Her Majesty may appoint in writing under the
Royal Sign Manual.

(3) Where the Duke of Cornwall is party to an arbitration agreement, he shall be repre-
sented for the purposes of any arbitral proceedings by such person as he may appoint.
(4) References in Part I to a party or the parties to the arbitration agreement or to arbitral
proceedings shall be construed, where subsection (2) or (3) applies, as references to the
person representing Her Majesty or the Duke of Cornwall.

Al-107 107. Consequential amendments and repeals

(1) The enactments specified in Schedule 3 are amended in accordance with that Schedule,
the amendments being consequential on the provisions of this Act.
(2) The enactments specified in Schedule 4 are repealed to the extent specified.

Al1-108 108. Extent

(1) The provisions of this Act extend to England and Wales and, except as mentioned
below, to Northern Ireland.
(2) The following provisions of Part II do not extend to Northern Ireland—
section 92 (exclusion of Part I in relation to small claims arbitration in the county court),
and
section 93 and Schedule 2 (appointment of judges as arbitrators).
(3) Sections 89,90 and 91 (consumer arbitration agreements) extend to Scotland and the
provisions of Schedules 3 and 4 (consequential amendments and repeals) extend to
Scotland so far as they relate to enactments which so extend, subject as follows.
 Appendix 1 593

(4) The repeal of the Arbitration Act 1975 extends only to England and Wales and
Northern Ireland.

109. Commencement Al-109

(1) The provisions of this Act come into force on such day as the Secretary of State may
appoint by order made by statutory instrument, and different days may be appointed for
different purposes.
(2) An order under subsection (1) may contain such transitional provisions as appear to the
Secretary of State to be appropriate.

110. Short title Al-110

This Act may be cited as the Arbitration Act 1996.

SCHEDULES

SCHEDULE |

Section 4(1)

Manparory PROVISIONS OF Part I Al-111

sections 9 to 11 (stay of legal proceedings);

section 12 (power of court to extend agreed time limits);
section 13 (application of Limitation Acts);
section 24 (power of court to remove arbitrator);
section 26(1) (effect of death of arbitrator);
section 28 (liability of parties for fees and expenses of arbitrators);
section 29 (immunity of arbitrator);
section 31 (objection to substantive jurisdiction of tribunal);
section 32 (determination of preliminary point of jurisdiction);
section 33 (general duty of tribunal);
section 37(2) (items to be treated as expenses of arbitrators);
section 40 (general duty of parties);
section 43 (securing the attendance of witnesses);
section 56 (power to withhold award in case of non-payment);
section 60 (effectiveness of agreement for payment of costs in any event);
section 66 (enforcement of award);
sections 67 and 68 (challenging the award: substantive jurisdiction and serious irregularity),
and sections 70 and 71 (supplementary provisions; effect of order of court) so far as
relating to those sections;
section 72 (saving for rights of person who takes no part in proceedings);
section 73 (loss of right to object);
section 74 (immunity of arbitral institutions, &c.);
section 75 (charge to secure payment of solicitors’ costs).
 594 Appendix 1

SCHEDULE

Section 93(6)

Al-112 MoptricaTions or Parr I IN RELATION TO JUDGE-ARBITRATORS

Introductory

1. In this Schedule “judge-arbitrator” means a judge of the Commercial Court or

official referee appointed as arbitrator or umpire under section 93.

General

2. (1) Subject to the following provisions of this Schedule, references in Part I to the
court shall be construed in relation to a judge-arbitrator, or in relation to the appointment
of a judge-arbitrator, as references to the Court of Appeal.
(2) The references in sections 32(6), 45(6) and 69(8) to the Court of Appeal shall in such
a case be construed as references to the House of Lords.

Arbitrator’s fees

3. (1) The power of the court in section 28(2) to order consideration and adjustment of
the liability of a party for the fees of an arbitrator may be exercised by a judge-arbi-
trator.
(2) Any such exercise of the power is subject to the powers of the Court of Appeal under
sections 24(4) and 25(3)(b) (directions as to entitlement to fees or expenses in case of
removal or resignation).

Exercise of court powers in support of arbitration

4. (1) Where the arbitral tribunal consists of or includes a judge-arbitrator the powers
of the court under sections 42 to 44 (enforcement of peremptory orders, summoning
witnesses, and other court powers) are exercisable by the High Court and also by the judge-
arbitrator himself.
(2) Anything done by a judge-arbitrator in the exercise of those powers shall be regarded
as done by him in his capacity as judge of the High Court and have effect as if done by that
court.
Nothing in this sub-paragraph prejudices any power vested in him as arbitrator or
umpire.

Extension of time for making award

5. (1) The power conferred by section 50 (extension of time for making award) is
exercisable by the judge-arbitrator himself.
 Appendix 1 595

(2) Any appeal from a decision of a judge-arbitrator under that section lies to the Court
of Appeal with the leave of that court.

Withholding award in case of non-payment

6. (1) The provisions of paragraph 7 apply in place of the provisions of section 56

(power to withhold award in the case of non-payment) in relation to the withholding of an
award for non-payment of the fees and expenses of a judge-arbitrator.
(2) This does not affect the application of section 56 in relation to the delivery of such
an award by an arbitral or other institution or person vested by the parties with powers in
relation to the delivery of the award.
7. (1) A judge-arbitrator may refuse to deliver an award except upon payment of the fees
and expenses mentioned in section 56(1).
(2) The judge-arbitrator may, on an application by a party to the arbitral proceedings,
order that if he pays into the High Court the fees and expenses demanded, or such lesser
amount as the judge-arbitrator may specify—

(a) the award shall be delivered,

(b) the amount of the fees and expenses properly payable shall be determined by such
means and upon such terms as he may direct, and

(c) out of the money paid into court there shall be paid out such fees and expenses as
may be found to be properly payable and the balance of the money (if any) shall be
paid out to the applicant.

(3)wa For this purpose the amount of fees and expenses properly payable is the amount the
applicant is liable to pay under section 28 or any agreement relating to the payment of the
arbitrator.
(4) No application to the judge-arbitrator under this paragraph may be made where
there is any available arbitral process for appeal or review of the amount of the fees or
expenses demanded.
(5) Any appeal from a decision of a judge-arbitrator under this paragraph lies to the
Court of Appeal with the leave of that court.
(6) Where a party to arbitral proceedings appeals under sub-paragraph (5), an arbitrator
is entitled to appear and be heard.

Correction of award or additional award

8. Subsections (4) to (6) of section 57 (correction of award or additional award: time limit
for application or exercise of power) do not apply to a judge-arbitrator.

Costs

9. Where the arbitral tribunal consists of or includes a judge-arbitrator the powers of the
court under section 63(4) (determination of recoverable costs) shall be exercised by the
High Court.
 596 Appendix 1

10. (1) The power of the court under section 64 to determine an arbitrator’s reasonable
fees and expenses may be exercised by a judge-arbitrator.
(2) Any such exercise of the power is subject to the powers of the Court of Appeal under
sections 24(4) and 25(3)(b) (directions as to entitlement to fees or expenses in case of
removal or resignation).

Enforcement of award

11. The leave of the court required by section 66 (enforcement of award) may in the case
of an award of a judge-arbitrator be given by the judge-arbitrator himself.

Solicitors’ costs

12. The powers of the court to make declarations and orders under the provisions applied
by section 75 (power to charge property recovered in arbitral proceedings with the payment
of solicitors’ costs) may be exercised by the judge arbitrator.

Powers of court in relation to service of documents

13. (1) The power of the court under section 77(2) (powers of court in relation to service
of documents) is exercisable by the judge-arbitrator.
(2) Any appeal from a decision of a judge-arbitrator under that section lies to the Court
of Appeal with the leave of that court.

Powers of court to extend time limits relating to arbitral proceedings

14. (1) The power conferred by section 79 (power of court to extend time limits relating
to arbitral proceedings) is exercisable by the judge-arbitrator himself.
(2) Any appeal from a decision of a judge-arbitrator under that section lies to the Court
of Appeal with the leave of that court.

SCHEDULE 3

Section 107(1)

Al-113 CONSEQUENTIAL AMENDMENTS

Merchant Shipping Act 1894 (c.60)

1. In section 496 of the Merchant Shipping Act 1894 (provisions as to deposits by owners
of goods), after subsection (4) insert—
 Appendix 1 597

(5) In subsection (3) the expression “legal proceedings” includes arbitral proceedings
and as respects England and Wales and Northern Ireland the provisions of section 14 of
the Arbitration Act 1996 apply to determine when such proceedings are com-
menced.”’.

Stannaries Court (Abolition) Act 1896 (c.45)

2. In section 4(1) of the Stannaries Court (Abolition) Act 1896 (references of certain
disputes to arbitration), for the words from “‘tried before” to “any such reference”
substitute “referred to arbitration before himself or before an arbitrator agreed on by the
parties or an officer of the court”.

Tithe Act 1936 (c.43)

3. In section 39(1) of the Tithe Act 1936 (proceedings of Tithe Redemption Commis-
sion)—

(a) for “the Arbitration Acts 1889 to 1934” substitute “Part I of the Arbitration Act
1996”;
(b) for paragraph (e) substitute—‘‘(e) the making of an application to the court to
determine a preliminary point of law and the bringing of an appeal to the court on
a point of law;”’;

(c) for “the said Acts” substitute “Part I of the Arbitration Act 1996”.

Commonwealth Telegraphs Act 1949 (¢.39)

5. In section 8(2) of the Commonwealth Telegraphs Act 1949 (proceedings of referees

under the Act) for “the Arbitration Acts 1889 to 1934, or the Arbitration Act Northern
Ireland) 1937,” substitute ‘“‘Part I of the Arbitration Act 1996”.

Lands Tribunal Act 1949 (¢.42)

6. In section 3 of the Lands Tribunal Act 1949 (proceedings before the Lands Tribu-
nal)—

(a) in subsection (6)(c) (procedural rules: power to apply Arbitration Acts), and

(b) in subsection (8) (exclusion of Arbitration Acts except as applied by rules),

for “the Arbitration Acts 1889 to 1934” substitute “Part I of the Arbitration Act 1996”.

Wireless Telegraphy Act 1949 (c.54)

7. In the Wireless Telegraphy Act 1949, Schedule 2 (procedure of appeals tribunal), in

paragraph 3(1)—
598 Appendix |

(a) for the words “the Arbitration Acts 1889 to 1934” substitute “Part I of the
Arbitration Act 1996”;

(b) after the word ‘‘Wales” insert ‘‘or Northern Ireland”; and

(c) for ‘the said Acts” substitute “Part I of that Act’.

Patents Act 1949 (c.87)

8. In section 67 of the Patents Act 1949 (proceedings as to infringement of pre-1978

patents referred to comptroller), for ““The Arbitration Acts 1889 to 1934” substitute “Part
I of the Arbitration Act 1996”.

National Health Service (Amendment) Act 1949 (¢.93)

9. In section 7(8) of the National Health Service (Amendment) Act 1949 (arbitration in
relation to hardship arising from the National Health Service Act 1946 or the Act), for “‘the
Arbitration Acts 1889 to 1934” substitute “Part I of the Arbitration Act 1996” and for “‘the
said Acts” substitute ‘Part I of that Act’’.

Arbitration Act 1950 (¢.27)

10. In section 36(1) of the Arbitration Act 1950 (effect of foreign awards enforceable under
Part II of that Act) for “section 26 of this Act” substitute “‘section 66 of the Arbitration Act
1996”.

Interpretation Act (Northern Ireland) 1954 (c.33 (N.I.))

11. In section 46(2) of the Interpretation Act (Northern Ireland) 1954 (miscellaneous
definitions), for the definition of “arbitrator” substitute—
“arbitrator” has the same meaning as in Part I of the Arbitration Act 1996;”.

Agricultural Marketing Act 1958 (c.47)

12. In section 12(1) of the Agricultural Marketing Act 1958 (application of provisions of
Arbitration Act 1950)—

(a) for the words from the beginning to “shall apply” substitute ‘Sections 45 and 69 of
the Arbitration Act 1996 (which relate to the determination by the court of questions
of law) and section 66 of that Act (enforcement of awards) apply”; and
(b) for “an arbitration” substitute “arbitral proceedings”.
 Appendix | 599

Carriage by Air Act 1961 (¢.27)

13. (1) The Carriage by Air Act 1961 is amended as follows.

(2) In section 5(3) (time for bringing proceedings )—

(a) for “an arbitration” in the first place where it occurs substitute “arbitral proceed-
ings”; and
(b) for the words from “and subsections (3) and (4)” to the end substitute “and the
provisions of section 14 of the Arbitration Act 1996 apply to determine when such
proceedings are commenced.”’.

(3) In section 11(c) (application of section 5 to Scotland)—

(a) for “subsections (3) and (4)” substitute “the provisions of section 14 of the
Arbitration Act 1996”: and

(b) for ‘an arbitration” substitute “arbitral proceedings”.

Factories Act 1961 (c.34)

14. In the Factories Act 1961, for section 171 (application of Arbitration Act 1950),
substitute—
“171 Application of the Arbitration Act 1996
Part I of the Arbitration Act 1996 does not apply to proceedings under this act except in
so far as it may be applied by regulations made under this Act.”

Clergy Pensions Measure 1961 (No.3)

15. In the Clergy Pensions Measure 1961, section 38(4) (determination of questions), for
the words “The Arbitration Act 1950” substitute ‘Part I of the Arbitration Act 1996”.

Transport Act 1962 (c.46)

16. (1) The Transport Act 1962 is amended as follows.

(2) In section 74(6)(f) (proceedings before referees in pension disputes), for the words
“the Arbitration Act 1950” substitute ‘‘Part I of the Arbitration Act 1996”.
(3) In section 81(7) (proceedings before referees in compensation disputes), for the
words “the Arbitration Act 1950” substitute “Part I of the Arbitration Act 1996”.
(4) In Schedule 7, Part IV (pensions), in paragraph 17(5) for the words “the Arbitration
Act 1950” substitute “Part I of the Arbitration Act 1996”.

Corn Rents Act 1963 (¢.14)

17. In the Corn Rents Act 1963, section 1(5) (schemes for apportioning corn rents, &c.),
for the words “the Arbitration Act 1950” substitute “Part I of the Arbitration Act
199 Gx
600 Appendix 1

Lands Tribunal and Compensation Act (Northern Ireland) 1964 (c.29 (N.1I))

19. In section 9 of the Lands Tribunal and Compensation Act (Northern Ireland) 1964
(proceedings of Lands Tribunal), in subsection (3) (where Tribunal acts as arbitrator) for
“the Arbitration Act (Northern Ireland) 1937” substitute “Part I of the Arbitration Act
1996%

Industrial and Provident Societies Act 1965 (c.12)

20. (1) Section 60 of the Industrial and Provident Societies Act 1965 is amended as fol-
lows.
(2) In subsection (8) (procedure for hearing disputes between society and member,
&c.)—

(a) in paragraph (a) for “the Arbitration Act 1950” substitute “Part I of the Arbitration
Act 1996”; and
(b) in paragraph (b) omit “‘by virtue of section 12 of the said Act of 1950”.

(3) For subsection (9) substitute—

“(9) The court or registrar to whom any dispute is referred under subsections (2) to (7)
may at the request of either party state a case on any question oflaw arising in the dispute
for the opinion of the High Court or, as the case may be, the Court of Session.”’.

Carriage of Goods by Road Act 1965 (c.37)

21. In section 7(2) of the Carriage of Goods by Road Act 1965 (arbitrations: time at which
deemed to commence), for paragraphs (a) and (b) substitute—
“(a) as respects England and Wales and Northern Ireland, the provisions of section 14(3)
to (5) of the Arbitration Act 1996 (which determine the time at which an arbitration is
commenced) apply;”’.

Factories Act (Northern Ireland) 1965 (c.20 (N.1))

22. In section 171 of the Factories Act (Northern Ireland) 1965 (application of Arbitration
Act), for “The Arbitration Act (Northern Ireland) 1937” substitute ‘Part I of the Arbitra-
tion Act 1996”.

Commonwealth Secretariat Act 1966 (c.10)

23. In section 1(3) of the Commonwealth Secretariat Act 1966 (contracts with Com-
monwealth Secretariat to be deemed to contain provision for arbitration), for “the Arbitra-
tion Act 1950 and the Arbitration Act (Northern Ireland) 1937” substitute “Part I of the
Arbitration Act 1996”.
 Appendix 1 601

Arbitration (International Investment Disputes) Act 1966 (c.41)

24. In the Arbitration (International Investment Disputes) Act 1966, for section 3 (applica-
tion of Arbitration Act 1950 and other enactments) substitute—
“3 Application of provisions of Arbitration Act 1996
(1) The Lord Chancellor may by order direct that any of the provisions contained in
sections 36 and 38 to 44 of the Arbitration Act 1996 (provisions concerning the conduct
of arbitral provisions, &c.) shall apply to such proceedings pursuant to the Convention
as are specified in the order with or without any modifications or exceptions specified in
the order.
(2) Subject to subsection (1), the Arbitration Act 1996 shall not apply to proceedings
pursuant to the Convention, but this subsection shall not be taken as affecting section 9
of that Act (stay of legal proceedings in respect of matter subject to arbitration).
(3) An order made under this section—

(a) may be varied or revoked by a subsequent order so made, and

(b) shall be contained in a statutory instrument.”’.

Poultry Improvement Act (Northern Ireland) 1968 (c.12 (N.I))

25. In paragraph 10(4) of the Schedule to the Poultry Improvement Act (Northern Ireland)
1968 (reference of disputes), for “The Arbitration Act (Northern Ireland) 1937” substitute
“Part I of the Arbitration Act 1996”.

Industrial and Provident Societies Act (Northern Ireland) 1969 (c.24 (N.1))

26. (1) Section 69 of the Industrial and Provident Societies Act (Northern Ireland) 1969
(decision of disputes) is amended as follows.
(2) In subsection (7) (decision of disputes)—

(a) in the opening words, omit the words from ‘‘and without prejudice” to “1937”;

(b) at the beginning of paragraph (a) insert “without prejudice to any powers exercisable
by virtue of Part I of the Arbitration Act 1996,”; and

(c) in paragraph (b) omit “the registrar or” and “registrar or” and for the words from
“ag might have been granted by the High Court” to the end substitute ‘‘as might be
granted by the registrar”.

(3) For subsection (8) substitute—

“(8) The court or registrar to whom any dispute is referred under subsections (2) to (6)
may at the request of either party state a case on any question oflaw arising in the dispute
for the opinion of the High Court.”
602 Appendix 1

Health and Personal Social Services (Northern Ireland) Order 1972 (N.I 14)

27. In Article 105(6) of the Health and Personal Social Services (Northern Ireland) Order
1972 (arbitrations under the Order), for “the Arbitration Act (Northern Ireland) 1937”
substitute ‘Part I of the Arbitration Act 1996”.

Consumer Credit Act 1974 (c.39)

28. (1) Section 146 of the Consumer Credit Act 1974 is amended as follows.
(2) In subsection (2) (solicitor engaged in contentious business), for “‘section 86(1) of the
Solicitors Act 1957” substitute “‘section 87(1) of the Solicitors Act 1974’.
(3) In subsection (4) (solicitor in Northern Ireland engaged in contentious business), for
the words from ‘‘business done”’ to ‘‘Administration of Estates (Northern Ireland) Order
1979” substitute ‘‘contentious business (as defined in Article 3(2) of the Solicitors (North-
ern Ireland) Order 1976.”

Friendly Societies Act 1974 (c.46)

29. (1) The Friendly Societies Act 1974 is amended as follows.

(2) For section 78(1) (statement of case) substitute—
“(1) Any arbitrator, arbiter or umpire to whom a dispute falling within section 76 above
is referred under the rules of a registered society or branch may at the request of either
party state a case on any question of law arising in the dispute for the opinion of the High
Court or, as the case may be, the Court of Session.”’.
(3) In section 83(3) (procedure on objections to amalgamations &c. of friendly societies),
for “the Arbitration Act 1950 or, in Northern Ireland, the Arbitration Act (Northern
Ireland) 1937” substitute “Part I of the Arbitration Act 1996”.

Industry Act 1975 (c.68)

30. In Schedule 3 to the Industry Act (arbitration of disputes relating to vesting and
compensation orders), in paragraph 14 (application of certain provisions of Arbitration
Acts)—

(a) for “the Arbitration Act 1950 or, in Northern Ireland, the Arbitration Act (Northern
Ireland) 1937” substitute “Part I of the Arbitration Act 1996”, and

(b) for “that Act” substitute “that Part’’.

Industrial Relations (Northern Ireland) Order 1976 (N.I.16)

31. In Article 59(9) of the Industrial Relations (Northern Ireland) Order 1976 (proceedings
of industrial tribunal), for ‘““The Arbitration Act (Northern Ireland) 1937” substitute “Part
I of the Arbitration Act 1996”.
 Appendix 1 603

Atrcraft and Shipbuilding Industries Act 1977 (¢.3)

32. In Schedule 7 to the Aircraft and Shipbuilding Industries Act 1977 (procedure of
Arbitration Tribunal), in paragraph 2—

(a) for “the Arbitration Act 1950 or, in Northern Ireland, the Arbitration Act (Northern
Ireland) 1937” substitute ‘Part I of the Arbitration Act 1996”, and

(b) for “that Act” substitute “that Part’’.

Patents Act 1977 (¢.37)

33. In section 130 of the Patents Act 1977 (interpretation), in subsection (8) (exclusion of
the Arbitration Act) for ““The Arbitration Act 1950” substitute ‘“‘Part I of the Arbitration
Act 1996”.

Judicature (Northern Ireland) Act 1978 (¢.23)

34. (1) The Judicature (Northern Ireland) Act 1978 is amended as follows.
(2) In section 35(2) (restrictions on appeals to the Court of Appeal), after paragraph (f)
insert—
“‘(fa) except as provided by Part I of the Arbitration Act 1996, from any decision of the
High Court under that Part;”.
(3) In section 55(2) (rules of court) after paragraph (c) insert—
‘“(cc) providing for any prescribed part of the jurisdiction of the High Court in relation
to the trial of any action involving matters of account to be exercised in the prescribed
manner by a person agreed by the parties and for the remuneration of any such per-
son;”’.
”

Health and Safety at Work (Northern Ireland) Order 1978 (N.I.9)

35. In Schedule 4 to the Health and Safety at Work (Northern Ireland) Order 1978
(licensing provisions), in paragraph 3, for ‘““The Arbitration Act (Northern Ireland) 1937”
substitute “Part I of the Arbitration Act 1996”.

County Courts (Northern Ireland) Order 1980 (N.1.3)

36. (1) The County Courts (Northern Ireland) Order 1980 is amended as follows.
(2) In Article 30 (civil jurisdiction exercisable by district judge)—

(a) for paragraph (2) substitute—

“(2) Any order, decision or determination made by a district judge under this
Article (other than one made in dealing with a claim by way of arbitration under
604 Appendix 1

paragraph (3)) shall be embodied in a decree which for all purposes (including the
right of appeal under Part VI) shall have the like effect as a decree pronounced by
a county court judge.”;

(b) for paragraphs (4) and (5) substitute—

‘“(4) Where in any action to which paragraph (1) applies the claim is dealt with
by way of arbitration under paragraph (3)—

(a) any award made by the district judge in dealing with the claim shall be
embodied in a decree which for all purposes (except the right of appeal
under Part VI) shall have the like effect as a decree pronounced by a county
court judge;
S the district judge may, and shall if so required by the High Court, state for
the determination of the High Court any question of law arising out of an
award so made;
(c) except as provided by sub-paragraph (b), any award so made shall be final;
and
(d T= except as otherwise provided by county court rules, no costs shall be
awarded in connection with the action.

(5) Subject to paragraph (4), county court rules may

(a) apply any of the provisions of Part I of the Arbitration Act 1996 to
arbitrations under paragraph (3) with such modifications as may be pre-
scribed;
(b) prescribe the rules of evidence to be followed on any arbitration under
paragraph (3) and, in particular, make provision with respect to the manner
of taking and questioning evidence.

(5A) Except as provided by virtue of paragraph (5)(a), Part I of the Arbitration

Act 1996 shall not apply to an arbitration under paragraph (3).”

(3) After Article 61 insert—

“Appeals from decisions under Part I of Arbitration Act 1996

61A. (1) Article 61 does not apply to a decision of a county court judge made in the
exercise of the jurisdiction conferred by Part I of the Arbitration Act 1996.
(2) Any party dissatisfied with a decision of the county court made in the exercise of
the jurisdiction conferred by any of the following provisions of Part I of the Arbitration
Act 1996, namely—

(a) section 32 (question as to substantive jurisdiction of arbitral tribunal);

(b) section 45 (question of law arising in course of arbitral proceedings);
(c) section 67 (challenging award of arbitral tribunal: substantive jurisdiction) ’

(d) section 68 (challenging award of arbitral tribunal: serious irregularity);

(e) section 69 (appeal on point of law),

may, subject to the provisions of that Part, appeal from that decision to the Court
of Appeal.
(3)— Any party dissatisfied with any decision of acounty court made in the exercise of
the jurisdiction conferred by any other provision of Part I of the Arbitration Act 1996
 Appendix | 605

may, subject to the provisions of that Part, appeal from that decision to the High
Court.
(4) The decision of the Court of Appeal on an appeal under paragraph (2) shall be
final.”’.

Supreme Court Act 1981 (c.54)

37. (1) The Supreme Court Act 1981 is amended as follows.

(2) In section 18(1) (restrictions on appeals to the Court of Appeal), for paragraph (g)
substitute—
“(g) except as provided by Part I of the Arbitration Act 1996, from any decision of the
High Court under that Part;”.
(3) In section 151 (interpretation, &c.), in the definition of‘arbitration agreement”, for
“the Arbitration Act 1950 by virtue of section 32 of that Act; substitute ‘Part I of the
Arbitration Act 1996;”

Merchant Shipping (Liner Conferences) Act 1982 (c.37)

38. In section 7(5) of the Merchant Shipping (Liner Conferences) Act 1982 (stay of legal
proceedings), for the words from “section 4(1)” to the end substitute ‘‘section 9 of the
Arbitration Act 1996 (which also provides for the staying of legal proceedings)”.

Agricultural Marketing (Northern Ireland) Order 1982 (N.I.12)

39. In Article 14 of the Agricultural Marketing (Northern Ireland) Order 1982 (application
of provisions of the Arbitration Act (Northern Ireland) 1937—

(a) for the words from the beginning to “‘shall apply” substitute “Section 45 and 69 of
the Arbitration Act 1996 (which relate to the determination by the court of questions
of law) and section 66 of that Act (enforcement of awards)” apply; and
(b) for ‘‘an arbitration” substitute “arbitral proceedings”.

Mental Health Act 1983 (c.20)

40. In section 78 of the Mental Health Act 1983 (procedure of Mental Health Review
Tribunals), in subsection (9) for “The Arbitration Act 1950” substitute “Part I of the
Arbitration Act 1996”.

Housing Act 1985 (¢.68)

42. In section 47(3) of the Housing Act 1985 (agreement as to determination of matters
relating to service charges) for “section 32 of the Arbitration Act 1950” substitute ‘Part I
of the Arbitration Act 1996”.
606 Appendix 1

Credit Unions (Northern Ireland) Order 1985 (N.I.12)

44. (1) Article 72 of the Credit Unions (Northern Ireland) Order 1985 (decision of
disputes) is amended as follows.
(2) In paragraph (7)—

(a) in the opening words, omit the words from ‘“‘and without prejudice” to “1937”;

(b) at the beginning of sub-paragraph (a) insert “without prejudice to any powers
exercisable by virtue of Part I of the Arbitration Act 1996,”; and

(c) in sub-paragraph (b) omit “the registrar or” and “registrar or” and for the words
from ‘‘as might have been granted by the High Court” to the end substitute “‘as
might be granted by the registrar”.

(3) For paragraph (8) substitute—

(8) The court or registrar to whom any dispute is referred under paragraphs (2) to (6)
may at the request of either party state a case on any question oflaw arising in the dispute
for the opinion of the High Court.”’.

Agricultural Holdings Act 1986 (c.5)

45. In section 84(1) of the Agricultural Holdings Act 1986 (provisions relating to arbitra-
tion), for “the Arbitration Act 1950” substitute “Part I of the Arbitration Act 1996”.

Insolvency Act 1986 (c.45)

46. In the Insolvency Act 1986, after section 349 insert—

“349A Arbitration agreements to which bankrupt is party
(1) This section applies where a bankrupt had become party to a contract containing an
arbitration agreement before the commencement of his bankruptcy.
(2) If the trustee in bankruptcy adopts the contract, the arbitration agreement is
enforceable by or against the trustee in relation to matters arising from or connected with
the contract.
(3) If the trustee in bankruptcy does not adopt the contract and a matter to which the
arbitration agreement applies requires to be determined in connection with or for the
purposes of the bankruptcy proceedings—

(a) the trustee with the consent of the creditors’ committee or

(b) any other party to the agreement,

may apply to the court which may, if it thinks fit in all the circumstances of the case, order
that the matter be referred to arbitration in accordance with the arbitration agree-
ment.
(4) In this section—
“arbitration agreement” has the same meaning as in Part I of the Arbitration Act 1996;
and
 Appendix | 607

“the court” means the court which has jurisdiction in the bankruptcy proceed-
ings”.

Building Societies Act 1986 (c.53)

47. In Part II of Schedule 14 to the Building Societies Act 1986 (settlement of disputes:
arbitration), in paragraph 5(6) for “the Arbitration Act 1950 and the Arbitration Act 1979
or, in Northern Ireland, the Arbitration Act (Northern Ireland) 1937” substitute ‘Part I of
the Arbitration Act 1996”.

Mental Health (Northern Ireland) Order 1986 (N.I.4)

48. In Article 83 of the Mental Health (Northern Ireland) Order 1986 (procedure of
Mental Health Review Tribunal), in paragraph (8) for “The Arbitration Act (Northern
Ireland) 1937” substitute “Part I of the Arbitration Act 1996”.

Multilateral Investment Guarantee Agency Act 1988 (c.8)

49. For section 6 of the Multilateral Investment Guarantee Agency Act 1988 (application
of Arbitration Act) substitute—
“6 Application of Arbitration Act
(1) The Lord Chancellor may by order made by statutory instrument direct that any of
the provisions of sections 36 and 38 to 44 of the Arbitration Act 1996 (provisions in
relation to the conduct of the arbitral proceedings, &c.) apply, with such modifications or
exceptions as are specified in the order, to such arbitration proceedings pursuant to
Annex II to the Convention as are specified in the order.
(2) Except as provided by an Order under subsection (1) above, no provision of Part I
of the Arbitration Act 1996 other than section 9 (stay of legal proceedings) applies to any
such proceedings.”

Copyright, Designs and Patents Act 1988 (c.48)

50. In section 150 of the Copyright, Designs and Patents Act 1988 (Lord Chancellor’s
power to make rules for Copyright Tribunal), for subsection (2) substitute—
“(2) The rules may apply in relation to the Tribunal, as respects proceedings in England
and Wales or Northern Ireland, any of the provisions of Part I of the Arbitration Act
19967?

Fair Employment (Northern Ireland) Act 1989 (¢.32)

51. In the Fair Employment (Northern Ireland) Act 1989, section 5(7) procedure of Fair
Employment Tribunal), for “The Arbitration Act (Northern Ireland) 1937” substitute
“Part I of the Arbitration Act 1996”.
608 Appendix 1

Limitation (Northern Ireland) Order 1989 (NI.11)

52. In Article 2(2) of the Limitation (Northern Ireland) Order 1989 (interpretation), in the
definition of “arbitration agreement’, for “the Arbitration Act (Northern Ireland) 1937”
substitute “Part I of the Arbitration Act 1996”.

Insolvency (Northern Ireland) Order 1989 (N.I.19)

53. In the Insolvency (Northern Ireland) Order 1989, after Article 320 insert—

“Arbitration agreements to which bankrupt ts party.

320A. (1) This Article applies where a bankrupt had become party to a contract
containing an arbitration agreement before the commencement of his
bankruptcy.
(2) If the trustee in bankruptcy adopts the contract, the arbitration agreement 1s
enforceable by or against the trustee in relation to matters arising from or
connected with the contract.
(3) If the trustee in bankruptcy does not adopt the contract and a matter to
which the arbitration agreement applies requires to be determined in connec-
tion with or for the purposes of the bankruptcy proceedings—
(a) the trustee with the consent of the creditors’ committee, or
(b) any other party to the agreement,
may apply to the court which may, if it thinks fit in all the circumstances of the case, order
that the matter be referred to arbitration in accordance with the arbitration agree-
ment.
(4) In this Article—
‘arbitration agreement’ has the same meaning as in Part I of the Arbitration Act
1996; and
‘the court’ means the court which has jurisdiction in the bankruptcy proceed-
ings.””.

Social Security Administration (Northern Ireland)

Act 1992 (¢.8)

55. In section 57 of the Social Security Administration (Northern Ireland) Act 1992
(procedure for inquiries, &c.), in subsection (6) for “the Arbitration Act (Northern Ireland)
1937” substitute “Part I of the Arbitration Act 1996”.

Trade Union and Labour Relations (Consolidation)

Act 1992 (¢.52)

56. In sections 212(5) and 263(6) of the Trade Union and Labour Relations (Consolidation)
Act 1992 (application of Arbitration Act) for “the Arbitration Act 1950” substitute “Part
I of the Arbitration Act 1996”.
 Appendix | 609

Industrial Relations (Northern Ireland) Order 1992 (N.1.5)

57. In Articles 84(9) and 92(5) of the Industrial Relations (Northern Ireland) Order 1992
(application of Arbitration Act) for “The Arbitration Act (Northern Ireland) 1937”
substitute “Part I of the Arbitration Act 1996”.

Registered Homes (Northern lreland) Order 1992 (N.1.20)

58. In Article 33(3) of the Registered Homes (Northern Ireland) Order 1992 (procedure of
Registered Homes Tribunal) for “The Arbitration Act (Northern Ireland) 1937” substitute
“Part I of the Arbitration Act 1996”.

Roads (Northern Ireland) Order 1993 (N.1.15)

60. (1) The Roads (Northern Ireland) Order 1993 is amended as follows.
(2) In Article 131 (application of Arbitration Act) for “the Arbitration Act (Northern
Ireland) 1937” substitute “Part I of the Arbitration Act 1996”.
(3) In Schedule 4 (disputes), in paragraph 3(2) for “the Arbitration Act (Northern
Ireland) 1937” substitute “Part I of the Arbitration Act 1996”.

Merchant Shipping Act 1995 (¢.21)

61. In Part II of Schedule 6 to the Merchant Shipping Act 1995 (provisions having effect
in connection with Convention Relating to the Carriage of Passengers and Their Luggage
by Sea), for paragraph 7 substitute—

“7. Article 16 shall apply to arbitral proceedings as it applies to an action; and, as respects
England and Wales and Northern Ireland, the provisions of section 14 of the Arbitration
Act 1996 apply to determine for the purposes of that Article when an arbitration is
commenced”.

Industrial Tribunals Act 1996 (c.17)

62. In section 6(2) of the Industrial Tribunals Act 1996 (procedure of industrial tribunals),
for “The Arbitration Act 1950” substitute ‘Part I of the Arbitration Act 1996”.

SCHEDULES

Schedule 107(2)
 610 Appendix 1

Al-114 REPEALS

Chapter
Extent of repeal

1892 c. 43.
In section 21(b), the words ‘‘under the Arbitration Act 1889”

O22 cy Sills
In section 21(3), the words “under the Arbitration Act 1889”.

1937 c. 8 (N.L).
The whole Act.

1949 c. 54.
In Schedule 2, paragraph 3(3).

1949 c. 97.
In section 18(4), the words from ‘‘Without prejudice” to ‘England or Wales”’.

1950\c. 27.
Partial:
Section 42(3).

1958 c. 47.
Section 53(8).

1962 c. 46.
In Schedule 11, Part Il, paragraph 7.

1964 c. 14.
In section 10(4) the words from “‘or in section 9” to ‘“‘three arbitrators)’’.
Section 39(3)(b)(i).

1964.c. 29 (Ni):
In section 9(3) the words from ‘‘so, however, that” to the end.

1965.c, 12)
In section 60(8)(b), the words from “‘by virtue of section 12 of the said Act of 1950”’.

1965 ¢. 37.
Section 7(2)(b).
1965 c. 13
(N.L).
In section 27(2), the words from ‘‘under and in accordance with’ to the end.

1969 c. 24
(N.L).
In section 69(7)—
(a) in the opening words, the words from ‘“‘and without prejudice” to “1937”;
(b) in paragraph (b), the words “the registrar or” and “registrar or’’.
 Appendix 1 611

1970 c. 31.
Section 4.
Schedule 3.

1973 c. 41.
Section 33(2)(d).

19735N Ie
In Article 15(4), the words from ‘under and in accordance” to the end.
Article 40(4).

In Schedule 7, in paragraph 9(2), the words from ‘“‘under and in accordance” to the
end.

1974 c. 47.
In section 87(1), in the definition of ‘‘contentious business”, the words “appointed under
the Arbitration Act 1950”.

IES Sh
The whole Act.

NWI, Wak
In Part II of Schedule 2
(a) in model clause 40(2), the words ‘“‘in accordance with the Arbitration Act 1950”:
(b) in model clause 40(2B), the words “in accordance with the Arbitration Act (Northern
Ireland) 1937”.
In Part II of Schedule 3, in model clause 38(2), the words ‘in accordance with the
Arbitration Act 1950”.

1976 N.I.12.
In Article 3(2), in the entry “contentious business”, the words “appointed under the
Arbitration Act (Northern Ireland) 1937”.
Article 71H(3).

OT Cs Cl:
In section 52(4) the words “‘section 21 of the Arbitration Act 1950 or, as the case may be,
section 22 of the Arbitration Act (Northern Ireland) 1937 (statement of cases by arbi-
trators); but’’. Section 131(e).

1977 c. 38.
Section 17(2).

1978 c. 23.
In section 35(2), paragraph (g) (v).
In Schedule 5, the amendment to the Arbitration Act 1950.

1979 c. 42.
The whole Act.

1980 c. 58.
Section 34.
612 Appendix 1

1980 N.L.3.
Article 31(3).

1981 c. 54.
Section 148.

SEY) PA
Section 25(3)(c) and (5). In section 26—
(a) in subsection (1), the words “‘to arbitration or”’;
(b) in subsection (1)(a)(i), the words “‘arbitration or”;
(c) in subsection (2), the words “arbitration or’’.

1982 c. 53.
Section 15(6).
In Schedule 1, Part IV.

1984 c. 5.
Section 4(8).

1984 c. 12
Schedule 2, paragraph 13(8).

1984 c. 16.
Section 5.

1984 c, 28.
In Schedule 2, paragraph 70.

1985 c. 61.
Section 58.
In Schedule 9, paragraph 15.

1985 c. 68.
In Schedule 18, in paragraph 6(2) the words from ‘“‘and the Arbitration Act 1950” to the
end.

1985 N.1.12.
In Article 72(7)—
(a) in the opening words, the words from ‘‘and without prejudice” to “1937”;
(b) in sub-paragraph (b), the words “the registrar or” and “registrar or”’.

1986 c. 45.
In Schedule 14, the entry relating to the Arbitration Act 1950.

1988 c. 8.
Section 8(3).

1988 c. 21
The whole Act.

1989 N.L11.
Article 72.
In Schedule 3, paragraph 1.
 Appendix | 613

1989 N.1.19.
In Part II of Schedule 9, paragraph 66.

1990 c. 41.
Sections 99 and 101 to 103.

LOD ISIN a7
In Articles 8(8) and 11(10), the words from “and the provisions” to the end.

1992 c. 40.
In Schedule 16, paragraph
30(1).

XO es, toh
Section 28(4).

IDS) eh le
Section 96(10).
Section 264(9).

1995 c. 42.
Section 3.

L996 STF T92N

Section 31.

1998 c. 14.
Section 54.

1998 S.I. 649.

Section 42(2)(c) and (3).

StTaTuTorY INSTRUMENTS MADE UNDER THE ARBITRATION AcT 1996

1996 No. 3146 (€C.96)

ARBITRATION

The Arbitration Act 1996 (Commencement No.1) AI-115

Order 1996

Made 16th December 1996

The Secretary of State, in exercise of the powers conferred on him by section 109 of the
Arbitration Act 1996(a), hereby makes the following Order:
1. This Order may be cited as the Arbitration Act 1996 (Commencement No.1) Order
1996.
2. The provisions of the Arbitration Act 1996 (“the Act”) listed in Schedule | to this
Order shall come into force on the day after this Order is made.
614 Appendix 1

3. The rest of the Act, except sections 85 to 87, shall come into force on 31st January,
1997.
4. The transitional provisions in Schedule 2 to this Order shall have effect.

John M Taylor,
Parliamentary Under-Secretary of State
for Corporate and Consumer Affairs,
16th December, 1996 Department of Trade and Industry

SCHED Wier

Article 2.

Section 91 so far as it relates to the power to make orders under the section.

Section 105.

Section 107(1) and paragraph 36 of Schedule 3, so far as relating to the provision that may
be made by county court rules.

Section 107(2) and the reference in Schedule 4 to the County Courts (Northern Ireland)
Order 1980[(a)] so far as relating to the above matter.

Sections 108 to 110.

SCHEDULE 2

Article 4.

1. In this Schedule:

(a) “the appointed day” means the date specified in Article 3 of this Order;

(b) ‘“‘arbitration application” means any application relating to arbitration made by or

in legal proceedings, whether or not arbitral proceedings have commenced;

(c) “the old law” means the enactments specified in section 107 as they stood before
their amendment or repeal by the Act.

2. The old law shall continue to apply to:

(a) arbitral proceedings commenced before the appointed day;

(b) arbitration applications commenced or made before the appointed day;

(c) arbitration applications commenced or made on or after the appointed day relating
to arbitral proceedings commenced before the appointed day,

and the provisions of the Act which would otherwise be applicable shall not apply.
 Appendix ] 615

3. The provisions of this Act brought into force by this Order shall apply to any other
arbitration application.
4. In the application of paragraph (b) of subsection (1) of section 46 (provision for dispute
to be decided in accordance with provisions other than law) to an arbitration agreement
made before the appointed day, the agreement shall have effect in accordance with the
rules of law (including any conflict of laws rules) as they stood immediately before the
appointed day.
Note: Sections 85 to 87, which make special provision in relation to domestic arbitration
agreements, are not yet in force.

1996 3215 No. (L.16)

Country Courts
SUPREME Court of ENGLAND AND WALES

The High Court and County Courts (Allocation of Al-116

Arbitration Proceedings) Order 1996

As amended by SI 1999/1010 and SI 2002/439

Made 19th December, 1996

Laid before Parliament 20th December, 1996
Coming into force 31st January, 1997
The Lord Chancellor, in exercise of the powers conferred on him by section 105 of the
Arbitration Act 1996(a), hereby makes the following Order:
1. (1) This Order may be cited as the High Court and County Courts (Allocation of
Arbitration Proceedings) Order 1996 and shall come into force on 31st January, 1997.
(2) In this Order, “the Act” means the Arbitration Act 1996.
2. Subject to articles 3 to 5, proceedings under the Act shall be commenced and taken in
the High Court.
3. Proceedings under section 9 of the Act (stay of legal proceedings) shall be commenced
in the court in which the legal proceedings are pending.
4. Proceedings under sections 66 and 101(2) (enforcement of awards) of the Act may be
commenced in any county court.
5. (1) Proceedings under the Act may be commenced and taken in the Central London
County Court Mercantile List.
(2) Where, in exercise of the powers conferred by sections 41 and 42 of the County
Courts Act 1984(b) the High Court or the judge in charge of the Central London County
Court Mercantile List orders the transfer of proceedings under the Act which were
commenced in the Central London County Court Mercantile List to the High Court, those
proceedings shall be taken in the High Court.
(3) Where, in exercise of its powers under section 40(2) of the County Courts Act
1984(c) the High Court orders the transfer of proceedings under the Act which were
commenced in the High Court to the Central London County Court Mercantile List, those
proceedings shall be taken in the Central London County Court Mercantile List.
(4) In exercising the powers referred to in paragraphs (2) and (3) regard shall be had to
the following criteria:

(a) the financial substance of the dispute referred to arbitration, including the value of
any claim or counterclaim;
 616 Appendix I

(b) the nature of the dispute referred to arbitration (for example, whether it arises out
of a commercial or business transaction or relates to engineering, building or other
construction work);

(c) whether the proceedings are otherwise important and, in particular, whether they
raise questions of importance to persons who are not parties; and

(d) the balance of convenience points to having the proceedings taken in the Central
London County Court Mercantile List,

and, where the financial substance of the dispute exceeds £200,000, the proceedings shall
be taken in the High Court unless the proceedings do not raise questions of general
importance to persons who are not parties.
(5) The value of any claim or counterclaim shall be calculated in accordance with rule
16.3(6) of the Civil Procedure Rules 1998 [fn1].
(6) In this article: ‘tthe Central London County Court Mercantile List” means the
Mercantile Court established at the Central London County Court pursuant to Part 59 of
the Civil Procedure Rules 1998.
“value” shall be construed in accordance with articles 9 and 10 of the High Court and
County Courts Jurisdiction Order 1991(b).
6. Nothing in this Order shall prevent the judge in charge of the commercial list (within
the meaning of section 62(3) of the Supreme Court Act 1981 (c)) from transferring
proceedings under the Act to another list, court or Division of the High Court to which he
has power to transfer proceedings and, where such an order is made, the proceedings may
be taken in that list, court or Division as the case may be.

Mackay of Clashfern, C.
Dated December 19, 1996

1996 No. 3211

ARBITRATION

Al-117 The Unfair Arbitration Agreements

(Specified Amount) Order 1996

Made 19th December, 1996

Laid before Parliament 20th December, 1996
Coming into force 3TIst Fanuary, 1997

The Secretary of State, in exercise of the powers conferred on him by section 91(3)(a) and
(b) of the Arbitration Act 1996(a), with the concurrence (as respects England and Wales)
of the Lord Chancellor and (as respects Scotland) of the Lord Advocate, hereby makes the
following Order:
1. This Order may be cited as the Unfair Arbitration Agreements (Specified Amount)
Order 1996, and shall come into force on 31st January, 1997.
2. The amount of £3,000 is hereby specified for the purposes of section 91 of the
Arbitration Act 1996 (arbitration agreement unfair where modest amount sought).
 Appendix | 617

John M. Taylor,
Parliamentary Under-Secretary of State
for Corporate and Consumer Affairs,
Department of Trade and Industry
16th December, 1996

I concur,

Mackay of Clashfern, C.
17th December, 1996

I concur,

Mackay of Drumadoon,
Lord Advocate’s Department

19th December, 1996

The High Court and County Courts (Allocation of Al-117A

Arbitration Proceedings) (Amendment) Order 1999

Made 25th March 1999

Laid before Parliament 30th March 1999
Coming into force 26th April 1999
The Lord Chancellor, in exercise of the powers conferred on him by section 105(3) of the
Arbitration Act 1996, makes the following Order.
1. This Order may be cited as the High Court and County Courts (Allocation of
Arbitration Proceedings) (Amendment) Order 1999 and shall come into force on 26th April
1999.
2. For paragraph (5) of article 5 of the High Court and County Courts (Allocation of
Arbitration Proceedings) Order 1996, substitute:—

‘** (5) The value of any claim or counterclaim shall be calculated in accordance with rule
16.3(6) of the Civil Procedure Rules 1998.”.

Irvine of Lairg, C.

Dated 25th March 1999

Arbitration Act 1950

(14 Geo. 6 c. 27)

Parr II

ENFORCEMENT OF CERTAIN FOREIGN AWARDS

35. Awards to which Part II applies Al-118

(1) This Part of this Act applies to any award made after the twenty-eighth day ofJuly,
nineteen hundred and twenty-four—
 618 Appendix 1

(a) in pursuance of an agreement for arbitration to which the protocol set out in the
First Schedule to this Act applies; and

(b) between persons of whom one is subject to the jurisdiction of some one of such
Powers as His Majesty, being satisfied that reciprocal provisions have been made,
may by Order in Council declare to be parties to the convention set out in the
Second Schedule to this Act, and of whom the other is subject to the jurisdiction
of some other of the Powers aforesaid; and

(c) in one of such territories as His Majesty, being satisfied that reciprocal provisions
have been made, may by Order in Council declare to be territories to which the
said convention applies;

and an award to which this Part of this Act applies is in this Part of this Act referred
to as “a foreign award”’.

(2) His Majesty may by a subsequent Order in Council vary or revoke any Order
previously made under this section.

(3) Any Order in Council under section one of the Arbitration (Foreign Awards) Act 1930
which is in force at the commencement of this Act shall have effect as if it had been
made under this section.

Al-119 36. Effect of foreign awards

(1) A foreign award shall, subject to the provisions of this Part of this Act, be enforceable
in England either by action or in the same manner as the award of an arbitrator is
enforceable by virtue of [section twenty-six of this Act].

(2) Any foreign award which would be enforceable under this Part of this Act shall be
treated as binding for all purposes on the persons as between whom it was made, and
may accordingly be relied on by any of those persons by way of defence, set off or
otherwise in any legal proceedings in England, and any references in this Part of this
Act to enforcing a foreign award shall be construed as including references to relying
on an award.
Note: For the words in square brackets in sub-s.(1) there are substituted the words
“Section 66 of the Arbitration Act 1996” by Arbitration Act 1996, s.107(1),
Sched. 3, para. 10 as from a day to be appointed.

Al-120
37. Conditions for enforcement of foreign awards

(1) In order that a foreign award may be enforceable under this Part of this Act it must
have—

(a) been made in pursuance of an agreement for arbitration which was valid under the
law by which it is governed;

(b) been made by the tribunal provided for in the agreement or constituted in manner
agreed upon by the parties;

(c) been made in conformity with the law governing the arbitration procedure;

(d) become final in the country in which it was made;

(ec) been in respect of a matter which may lawfully be referred to arbitration under the
law of England;
 Appendix 1 619

and the enforcement thereof must not be contrary to the public policy or the law of
England.

(2) Subject to the provisions of this subsection, a foreign award shall not be enforceable
under this Part of this Act if the court dealing with the case is satisfied that—

(a) the award has been annulled in the country in which it was made; or

(b) the party against whom it is sought to enforce the award was not given notice of
the arbitration proceedings in sufficient time to enable him to present his case, or
was under some legal incapacity and was not properly represented; or

(c) the award does not deal with all the questions referred or contains decisions on
matters beyond the scope of the agreement for arbitration:

Provided that, if the award does not deal with all the questions referred, the court may,
if it thinks fit, either postpone the enforcement of the award or order its enforcement
subject to the giving of such security by the person seeking to enforce it as the court
may think fit.

(3) If a party seeking to resist the enforcement of a foreign award proves that there is any
ground other than the non-existence of the conditions specified in paragraphs (a), (b)
and (c) of subsection (1) of this section, or the existence of the conditions specified in
paragraphs (b) and (c) of subsection (2) of this section, entitling him to contest the
validity of the award, the court may, if it thinks fit, either refuse to enforce the award
or adjourn the hearing until after the expiration of such period as appears to the court
to be reasonably sufficient to enable that party to take the necessary steps to have the
award annulled by the competent tribunal.

38. Evidence Al-121

(1) The party seeking to enforce a foreign award must produce—

(a) the original award or a copy thereof duly authenticated in manner required by the
law of the country in which it was made; and

(b) evidence proving that the award has become final; and

(c) such evidence as may be necessary to prove that the award is a foreign award and
that the conditions mentioned in paragraphs (a), (b) and (c) of subsection (1) of
the last foregoing section are satisfied.

In any case where any document required to be produced under subsection (1) of this
section is in a foreign language, it shall be the duty of the party seeking to enforce the
award to produce a translation certified as correct by a diplomatic or consular agent
of the country to which that party belongs, or certified as correct in such other manner
as may be sufficient according to the law of England.

(3) Subject to the provisions of this section, rules of court may be made under section [84
of the Supreme Court Act 1981] with respect to the evidence which must be furnished
by a party seeking to enforce an award under this Part of this Act.
 620 Appendix |

Note: The words in square brackets in sub-s.(3) were substituted by the Supreme Court
Aite Teil, SIMA), Sap, oye

Al-122 39. Meaning of “final award”

For the purposes of this Part of this Act, an award shall not be deemed final if any
proceedings for the purpose of contesting the validity of the award are pending in the
country in which it was made.

Al-123 40. Saving for other rights, etc.

Nothing in this Part of this Act shall—

(a) prejudice any rights which any person would have had of enforcing in England
any award or of availing himselfin England of any award if neither this Part of this
Act nor Part I of the Arbitration (Foreign Awards) Act 1930 had been enacted;
or

(b) apply to any award made on an arbitration agreement governed by the law of
England.

Note: Arbitration (Foreign Awards) Act 1930, Pt. 1. 20 & 21 Geo 5 C15. That Act was
repealed by s.44(3) post.

Al-124 41. (Applies to Scotland only.)

Al-125 42. Application of Part II to Northern Ireland

(1) The following provisions of this section shall have effect for the purpose of the
application of this Part of this Act to Northern Ireland.

(2) For the references to England there shall be substituted references to Northern
Ireland.

(3) For subsection (1) of section thirty-six there shall be substituted the following sub-
section:

“(1) A foreign award shall, subject to the provisions of this Part of this Act, be
enforceable either by action or in the same manner as the award of an arbitrator
under the provisions of the Common Law Procedure Amendment Act (Ireland)
1856 was enforceable at the date of the passing of the Arbitration (Foreign
Awards) Act 1930”.

(A rage
Notes: Sub-s.(3) ts repealed by the Arbitration Act 1996, s.107(2), Sch. 4 as from a day
to be appointed.
Sub-s. (4) was repealed by the Judicature (Northern Ireland) Act 1978, s. UZLZ02))
Sched. 7, Pil,
Arbitration (Foreign Awards) Act 1930 was repealed by s.44(3) post.
 Appendix 1 621

43. (Repealed by the SL(R) Act 1978.)

Civil Procedure Rules Part 62, Arbitration Claims

CONTENTS OF THIS ParT

Section Para: Al-126

SCOperOMmnisehantan Gain ten pietatlOneamenurn state seen aie eee eee Rule 62.1

I CLaimMs UNDER THE 1996 Acr

Inter pnetatlons entreaties eee an eect ae Aan Gate epee Rule 62.2
Stantincsthexclaiinice yor cae ee ice eee hai eet amen hee Rule 62.3
Ni bitratl Omaclaliiet OI recmmtuer Lae Mec Renae acer aioe cease Ras eas Rule 62.4
SINGS CULE GHENT PET LAPTETR OS ccc. ca etoo sooner nechanoboce asbennannpbbsgqudonener Abe oennaseee Rule 62.5
INWGYI (ereccaiseebhoadedactosenSteatch
cockiacosetecetache caaaieaneendsCuan ACBLESSR Onna Aiea haata Rule 62.6
SAS CRITIAT AC CINICIL Ueto cnsee meron cee eer nea came na eee ce a ne Rule 62.7
Stayeotslegaluprocecdings mete seca cer eee eee ee eee Rule 62.8
Variant omgotn tin cyecccance se scatn ee een erect See ar once eae ee enna Rule 62.9
Fle arin ost tren eet ns eanenencuneeceree arena cee ien ate ate Ween nen eee Maat Rule 62.10

ScopesofithiseSecttan’ weit. acecetaeee costes tresses sn sbercue hen cace eae atinoreaee ates Rule 62.11
Applicationsnto: Judgoeter scccnsconecseccccecase-cserceeatsees sateeter eons eeeeeatesd Rule 62.12
Starting eth evclatn esrerc-e.ecme c e r cee cree emectessp tread essen seen sesncuecspaas rere Rule 62.13
Glaimstiny DistnictaNe sistileseee re atacne ete teen teen pee arterresat as seenacseustios Rule 62.14
Time limits and other special provisions about arbitration claims ........... Rule 62.15
Senviceroutrotsthenumsdictioneenes. ee etree eee. cone h ston eee saateet daresecee ee Rule 62.16

SGape Of thiss GECh Oil Miecerp ager sodee. nou sgiesaacsuncentercecsszees -vanemesaesncounaanvernae Rule 62.17
|ByaVZoy meen nCOhe CON ENWIGTRCCLSS.cog osenvesnmoatedatednededonotleosydaqaae oadoadssu0 socoatekivenosraaesaance Rule 62.18
JhoWKes Kate OMRUER VENI Soeode aneace bp abhtiansosed dagse banpoddtidedoéuasedio Hiodube Janaeacosppaouaceconbeucedacr Rule 62.19
Registration in High Court of foreign awards ............:.:cssseseseeseeeeseteeees Rule 62.20
Registration of awards under the Arbitration (International
Investment Disputes) Act 1966............:ccccessecceresseneeccnseeseseseessecnseoseees Rule 62.21

Scope of this Part and interpretation

62.1 (1) This Part contains rules about arbitration claims. Al-127
(2) In this Part—
 622 Appendix I

(a) ‘the 1950 Act’ means the Arbitration Act 1950';

(b) ‘the 1975 Act’ means the Arbitration Act 19757;

(c) ‘the 1979 Act’ means the Arbitration Act 1979°;

(d) ‘the 1996 Act’ means the Arbitration Act 19964;

(e) references to—

(i) the 1996 Act; or

(ii) any particular section of that Act

include references to that Act or to the particular section of that Act as

applied with modifications by the ACAS Arbitration Scheme (England and
Wales) Order 2001°; and

(f) ‘arbitration claim form’ means a claim form in the form set out in the
practice direction.

(3) Part 58 (Commercial Court) applies to arbitration claims in the Commercial

Court, Part 59 (Mercantile Court) applies to arbitration claims in the Mercantile
Court and Part 60 (Technology and Construction Court claims) applies to
arbitration claims in the Technology and Construction Court, except where this
Part provides otherwise.

I Craims UNDER THE 1996 AcTr

Interpretation

Al-128 62.2 (1) In this Section of this Part ‘arbitration claim’ means—
(a) any application to the court under the 1996 Act;

(b) a claim to determine—

(i) whether there is a valid arbitration agreement;

(ti) whether an arbitration tribunal is properly constituted; or

what matters have been submitted to arbitration in accordance with an

arbitration agreement;

(c) a claim to declare that an award by an arbitral tribunal is not binding on a

party; and

(d) any other application affecting—

(i) arbitration proceedings (whether started or not); or

O95 0vcRa7.
* 1975 c. 3; repealed by the Arbitration Act 1996 (c. 23), section 107(2) and Schedule 4 but continues
to apply to claims commenced before 31st January 1997 by virtue of the Arbitration Act 1996
(Commencement No. 1) Order 1996 (S.I. 1996/3146), article 4 and Schedule 2.
* 1979 c. 42; repealed by the Arbitration Act 1996 (c. 23), section 107(2) and Schedule 4 but continues
to apply to claims commenced before 31st January 1997 by virtue of the Arbitration Act 1996
(Commencement No. 1) Order 1996 (S.I. 1996/3146), article 4 and Schedule 2.
“N90 Gen 23:
SS ile 0O1/AS 5:
 Appendix | 623

(1) an arbitration agreement.

(2) This Section of this Part does not apply to an arbitration claim to which Sections
UT or III of this Part apply.

Starting the claim

62.3 (1) Except where paragraph (2) applies an arbitration claim must be started by the Al1-129
issue of an arbitration claim form in accordance with the Part 8 procedure.

(2) An application under section 9 of the 1996 Act to stay legal proceedings must be
made by application notice to the court dealing with those proceedings.

(3) The courts in which an arbitration claim may be started are set cut in the
practice direction.

(4) Rule 30.5(3) applies with the modification that a judge of the Technology and
Construction Court may transfer the claim to any other court or specialist
list.

Arbitration claim form

62.4 (1) An arbitration claim form must— Al-130

(a) include a concise statement of—

(i) the remedy claimed; and

(1i) any questions on which the claimant seeks the decision of the court;

(b) give details of any arbitration award challenged by the claimant, identifying
which part or parts of the award are challenged and specifying the grounds
for the challenge;

(c) show that any statutory requirements have been met;

(d) specify under which section of the 1996 Act the claim is made;

(e) identify against which (if any) defendants a costs order is sought; and

(f) specify either—

(i) the persons on whom the arbitration claim form is to be served, stating
their role in the arbitration and whether they are defendants; or
(11) that the claim is made without notice under section 44(3) of the 1996
Act and the grounds relied on.

(2) Unless the court orders otherwise an arbitration claim form must be served on
the defendant within 1 month from the date of issue and rules 7.5 and 7.6 are
modified accordingly.

(3 wa Where the claimant applies for an order under section 12 of the 1996 Act
(extension of time for beginning arbitral proceedings or other dispute resolution
procedures), he may include in his arbitration claim form an alternative applica-
tion for a declaration that such an order is not needed.

Service out of the jurisdiction

62.5 (1) The court may give permission to serve an arbitration claim form out of the A1—131
jurisdiction if—
 624 Appendix 1

(a) the claimant seeks to—

(i) challenge; or
(ii) appeal on a question of law arising out of,
an arbitration award made within the jurisdiction;

(The place where an award is treated as made is determined by section 53

of the 1996 Act.)

(b) the claim is for an order under section 44 of the 1996 Act; or

(c) the claimant—

(i) seeks some other remedy or requires a question to be decided by the

court affecting an arbitration (whether started or not), an arbitration
agreement or an arbitration award; and
(ii) the seat of the arbitration is or will be within the jurisdiction or the
conditions in section 2(4) of the 1996 Act are satisfied.

@ wma An application for permission under paragraph (1) must be supported by

written evidence—

(a) stating the grounds on which the application is made; and

(b) showing in what place or country the person to be served is, or probably may
be found.

(3 wa Rules 6.24 to 6.29 apply to the service of an arbitration claim form under
paragraph (1).

(4 wma An order giving permission to serve an arbitration claim form out of the
jurisdiction must specify the period within which the defendant may file an
acknowledgment of service.

Notice

Al-132 62.6 (1) Where an arbitration claim is made under section 24, 28 or 56 of the 1996 Act,
each arbitrator must be a defendant.

(2) Where notice must be given to an arbitrator or any other person it may be given
by sending him a copy of—

(a) the arbitration claim form; and

(b) any written evidence in support.

(3) Where the 1996 Act requires an application to the court to be made on notice
to any other party to the arbitration, that notice must be given by making that
party a defendant.

Case management

Al-133 62.7 (1) Part 26 and any other rule that requires a party to file an allocation questionnaire
does not apply.

Arbitration claims are allocated to the multi-track.

Part 29 does not apply.

The automatic directions set out in the practice direction apply unless the court
orders otherwise.
 Appendix 1 625

Stay of legal proceedings

62.8 (1) An application notice seeking a stay of legal proceedings under section 9 of the Al-134
1996 Act® must be served on all parties to those proceedings who have given an
address for service.

—~i)— A copy of an application notice under paragraph (1) must be served on any other
party to the legal proceedings (whether or not he is within the jurisdiction) who
has not given an address for service, at—

(a) his last known address; or

(b) a place where it is likely to come to his attention.

(3) Where a question arises as to whether—

(a) an arbitration agreement has been concluded; or

(b) the dispute which is the subject-matter of the proceedings falls within the
terms of such an agreement,

the court may decide that question or give directions to enable it to be decided
and may order the proceedings to be stayed pending its decision.

Variation of time

629. (1) The court may vary the period of 28 days fixed by section 70(3) of the 1996 Act Al-135
for—

(a) challenging the award under section 67 or 68 of the Act; and

(b) appealing against an award under section 69 of the Act.

(2) An application for an order under paragraph (1) may be made without notice
being served on any other party before the period of 28 days expires.

(3) After the period of 28 days has expired—

(a) an application for an order extending time under paragraph (1) must—

(i) be made in the arbitration claim form; and

(ii) state the grounds on which the application is made;

(b) any defendant may file written evidence opposing the extension of time
within 7 days after service of the arbitration claim form; and

(c) if the court extends the period of 28 days, each defendant’s time for
acknowledging service and serving evidence shall start to run as if the
arbitration claim form had been served on the date when the court’s order
is served on that defendant.

Hearings

62.10 (1) The court may order that an arbitration claim be heard either in public or in Al-136
private.

(2) Rule 39.2 does not apply.

(3) Subject to any order made under paragraph (1)—

SNO9G ceZ 3:
 626 Appendix 1

(a) the determination of—

(i) a preliminary point of law under section 45 of the 1996 Act; or

(ii) an appeal under section 69 of the.1996 Act on a question of law arising

out of an award,

will be heard in public; and

(b) all other arbitration claims will be heard in private.

(4) Paragraph (3)(a) does not apply to—

(a) the preliminary question of whether the court is satisfied of the matters set
out in section 45(2)(b); or

(b) an application for permission to appeal under section 69(2)(b).

II OrHER ARBITRATION CLAIMS

Scope of this Section

Al-137 62.11 (1) This Section of this Part contains rules about arbitration claims to which the old
law applies.

(2) In this Section

(a) ‘the old law’ means the enactments specified in Schedules 3 and 4 of the
1996 Act as they were in force before their amendment or repeal by that Act;
and

(b) ‘arbitration claim’ means any application to the court under the old law and
includes an appeal (or application for permission to appeal) to the High
Court under section 1(2) of the 1979 Act.’

(3) This Section does not apply to—

(a) a claim to which Section UI of this Part applies; or

(b) a claim on the award.

Applications to Judge

Al-138 62.12 A claim—

(a) seeking permission to appeal under section 1(2) of the 1979 Act;

(b) under section 1(5) of that Act (including any claim seeking permission);
or

(c) under section 5 of that Act,

must be made in the High Court and will be heard by a judge of the
Commercial Court unless any such judge directs otherwise.

71979 c. 42; repealed by the Arbitration Act 1996 (c. 23), section 107(2) and Schedule 4 but continues
to apply to claims commenced before 31st January 1997 by virtue of the Arbitration Act 1996
(Commencement No. 1) Order 1996 (S.I. 1996/3146), article 4 and Schedule 2.
 Appendix | 627

Starting the claim

62.13 (1) Except where paragraph (2) applies an arbitration claim must be started by the Al-139
issue of an arbitration claim form in accordance with the Part 8 procedure.

(2) Where an arbitration claim is to be made in existing proceedings—

(a) it must be made by way of application notice; and

(b) any reference in this Section of this Part to an arbitration claim form
includes a reference to an application notice.
(3) The arbitration claim form in an arbitration claim under section 1(5) of the 1979
Act (including any claim seeking permission) must be served on—

(a) the arbitrator or umpire; and

(b) any other party to the reference.

Claims in District Registries

62.14 If— Al-140
(a) a claim is to be made under section 12(4) of the 1950 Act® for an order for
the issue of a witness summons to compel the attendance of the witness
before an arbitrator or umpire; and

(b) the attendance of the witness is required within the district of a District
Registry,

the claim may be started in that Registry.

Time limits and other special provisions about arbitration claims

62.15 (1) An arbitration claim to Al-141
(a) remit an award under section 22 of the 1950 Act’;

(b) set aside an award under section 23(2) of that Act!° or otherwise; or

(c) direct an arbitrator or umpire to state the reasons for an award under section
1(5) of the 1979 Act,

must be made, and the arbitration claim form served, within 21 days after the
award has been made and published to the parties.

(2) An arbitration claim to determine any question of law arising in the course of a
reference under section 2(1) of the Arbitration Act 1979 must be made, and the
arbitration claim form served, within 14 days after—

* 1950 c. 27; section 12(4) was repealed by the Arbitration Act 1996 (c. 23), section 107(2) and
Schedule 4 but continues to apply to claims commenced before 31st January 1997 by virtue of the
Arbitration Act 1996 (Commencement No. 1) Order 1996 (S.I. 1996/3146), article 4 and
Schedule 2.
° 1950 c. 27; section 22 was repealed by the Arbitration Act 1996 (c. 23), section 107(2) and Schedule
4 but continues to apply to claims commenced before 31st January 1997 by virtue of the Arbitration
Act 1996 (Commencement No. 1) Order 1996 (S.I. 1996/3146), article 4 and Schedule 2.
©1950 c. 27; section 23(2) was repealed by the Arbitration Act 1996 (c. 23), section 107(2) and
Schedule 4 but continues to apply to claims commenced before 31st January 1997 by virtue of the
Arbitration Act 1996 (Commencement No. 1) Order 1996 (S.I. 1996/3146), article 4 and
Schedule 2.
 628 Appendix 1

(a) the arbitrator or umpire gave his consent in writing to the claim being made;
or

(b) the other parties so consented.

An appeal under section 1(2) of the 1979 Act must be filed, and the arbitration
claim form served, within 21 days after the award has been made and published
to the parties.

Where reasons material to an appeal under section 1(2) of the 1979 Act are given
on a date subsequent to the publication of the award, the period of 21 days
referred to in paragraph (3) will run from the date on which reasons are
given.

—mnsees In every arbitration claim to which this rule applies—

(a) the arbitration claim form must state the grounds of the claim or appeal;

(b) where the claim or appeal is based on written evidence, a copy of that
evidence must be served with the arbitration claim form; and

(c) where the claim or appeal is made with the consent of the arbitrator, the
umpire or the other parties, a copy of every written consent must be served
with the arbitration claim form.

In an appeal under section 1(2) of the 1979 Act—

(a) astatement of the grounds for the appeal specifying the relevant parts of the
award and reasons; and

(b) where permission is required, any written evidence in support of the

contention that the question of law concerns—

(1) a term of a contract; or

(ii) an event,

which is not a ‘one-off’ term or event,

must be filed and served with the arbitration claim form.

(7) Any written evidence in reply to written evidence under paragraph (6)(b) must
be filed and served on the claimant not less than 2 days before the hearing.

A party to a claim seeking permission to appeal under section 1(2) of the 1979
Act who wishes to contend that the award should be upheld for reasons not
expressed or fully expressed in the award and reasons must file and serve on the
claimant, a notice specifying the grounds of his contention not less than 2 days
before the hearing.

Service out of the jurisdiction

Al-142 62.16 (1) Subject to paragraph (2)—

(a) any arbitration claim form in an arbitration claim under the 1950 Act or the
1979 Act; or

(b) any order made in such a claim,

may be served out of the jurisdiction with the permission of the court if the
arbitration to which the claim relates—
 Appendix 1 629

(i) is governed by the law of England and Wales; or

(11) has been, is being, or will be, held within the jurisdiction.

(2) An arbitration claim form seeking permission to enforce an award may be served
out of the jurisdiction with the permission of the court whether or not the
arbitration is governed by the law of England and Wales.

(3) An application for permission to serve an arbitration claim form out of the
jurisdiction must be supported by written evidence—

(a) stating the grounds on which the application is made; and

(b) showing in what place or country the person to be served is, or probably may
be found.

Rules 6.24 to 6.29 apply to the service of an arbitration claim form under
paragraph (1).

(4) omitted.

(5) An order giving permission to serve an arbitration claim form out of the
jurisdiction must specify the period within which the defendant may file an
acknowledgment of service.

Il] ENroRCEMENT

Scope of this Section

62.17 This Section of this Part applies to all arbitration enforcement proceedings other Al-143
than by a claim on the award.

Enforcement of awards

62.18 (1) An application for permission under— Al-144

(a) section 66 of the 1996 Act'';

(b) section 101 of the 1996 Act;

(c) section 26 of the 1950 Act'*; or

(d) section 3(1)(a) of the 1975 Act,’*

to enforce an award in the same manner as a judgment or order may be made

without notice in an arbitration claim form.

(2) The court may specify parties to the arbitration on whom the arbitration claim
form must be served.

E99 6res 23:

'2 1950 c. 27; section 26 was repealed by the Arbitration Act 1996 (c. 23), section 107(2) and Schedule
4 but continues to apply to claims commenced before 31st January 1997 by virtue of the Arbitration
Act 1996 (Commencement No. 1) Order 1996 (S.I. 1996/3146), article 4 and Schedule 2.
13 1975 c, 3; repealed by the Arbitration Act 1996 (c. 23), section 107(2) and Schedule 4 but continues
to apply to claims commenced betore 3lst January 1997 by virtue of the Arbitration Act 1996
(Commencement No. 1) Order 1996 (S.I. 1996/3146), article 4 and Schedule 2.
630 Appendix 1

(3) The parties on whom the arbitration claim form is served must acknowledge
service and the enforcement proceedings will continue as if they were an
arbitration claim under Section I of this Part.

With the permission of the court the arbitration claim form may be served out
of the jurisdiction irrespective of where the award 1s, or 1s treated as, made.
Where the applicant applies to enforce an agreed award within the meaning of
section 51(2) of the 1996 Act—

(a) the arbitration claim form must state that the award is an agreed award;
and

(b) any order made by the court must also contain such a statement.

(6) An application for permission must be supported by written evidence—

(a) exhibiting—

(1) where the application is made under section 66 of the 1996 Act or
under section 26 of the 1950 Act, the arbitration agreement and the
original award (or copies);

(ii) where the application is under section 101 of the 1996 Act, the
documents required to be produced by section 102 of that Act; or
(111) where the application is under section 3(1)(a) of the 1975 Act, the
documents required to be produced by section 4 of that Act;

(b) stating the name and the usual or last known place of residence or business
of the claimant and of the person against whom it is sought to enforce the
award; and

(c) stating either—

(1) that the award has not been complied with; or

(ii) the extent to which it has not been complied with at the date of the
application.

(7) An order giving permission must—

(a) be drawn up by the claimant; and

(b) be served on the defendant by—

(i) delivering a copy to him personally; or

(i) sending a copy to him at his usual or last known place of residence or
business.

An order giving permission may be served out of the jurisdiction—

(a) without permission; and

(b) in accordance with rules 6.24 to 6.29 as if the order were an arbitration claim
form.

(9) Within 14 days after service of the order or, if the order is to be served out of
the jurisdiction, within such other period as the court may set—

(a) the defendant may apply to set aside the order; and

(b) the award must not be enforced until after—

 Appendix 1 631

(i) the end of that period; or

(ii) any application made by the defendant within that period has been
finally disposed of.

(10) The order must contain a statement of —

(a) the right to make an application to set the order aside; and

(b) the restrictions on enforcement under rule 62.18(9)(b).

(11) Where a body corporate is a party any reference in this rule to place of residence
or business shall have effect as if the reference were to the registered or principal
address of the body corporate.

Interest on awards

62.19 (1) Where an applicant seeks to enforce an award of interest the whole or any part Al-145
of which relates to a period after the date of the award, he must file a statement
giving the following particulars—

(a) whether simple or compound interest was awarded;

(b) the date from which interest was awarded;

(c) where rests were provided for, specifying them;

(d) the rate of interest awarded; and

(e) a calculation showing—

(1) the total amount claimed up to the date of the statement; and

(ii) any sum which will become due on a daily basis.

(2) A statement under paragraph (1) must be filed whenever the amount of interest
has to be quantified for the purpose of—

(a) obtaining a judgment or order under section 66 of the 1996 Act (enforce-
ment of the award); or

(b) enforcing such a judgment or order.

Registration in High Court of foreign awards

62.20 (1) Where— Al-146

(a) an award is made in proceedings on an arbitration in any part of a United
Kingdom Overseas Territory (within the meaning of rule 6.18(f)) or other
territory to which Part I of the Foreign Judgments (Reciprocal Enforce-
ment) Act 19331* (‘the 1933 Act’) extends;

(b) Part II of the Administration of Justice Act 1920'° extended to that part
immediately before Part I of the 1933 Act was extended to that part; and

+ 1933 c. 13 (23 & 24 Geo. 5). 53

'5 1920 c. 81 (10 & 11 Geo. 5); section 10 of Part II was substituted by the Civil Jurisdiction and
Judgments Act 1982 (c. 27), section 35(2) and section 14 of Part Il was amended by the Civil
Jurisdiction and Judgments Act 1982 (c. 27), section 35(3).
 632 Appendix 1

(c) an award has, under the law in force in the place where it was made, become
enforceable in the same manner as a judgment given by a court in that
place,

Rules 74.1 to 74.7 and 74.9, apply in relation to the award as they apply in
relation to a judgment given by the court subject to the modifications in
paragraph (2).

(2) The modifications referred to in paragraph (1) are as follows—

(a) for references to the state of origin are substituted references to the place
where the award was made; and

(b) the written evidence required by rule 74.4 must state (in addition to the
matters required by that rule) that to the best of the information or belief of
the maker of the statement the award has, under the law in force in the place
where it was made, become enforceable in the same manner as a judgment
given by a court in that place.

Registration of awards under the Arbitration (International Investment

Disputes) Act 1966
Al-147 62.21 (1) In this rule—

(a) ‘the 1966 Act’? means the Arbitration (International Investment Disputes)
Act 1966'°;

(b) ‘award’ means an award under the Convention;

(c) ‘the Convention’ means the Convention on the settlement of investment

disputes between States and nationals of other States which was opened for
signature in Washington on 18th March 1965":

(d) ‘judgment creditor’ means the person seeking recognition or enforcement of

an award; and

(e) ‘judgment debtor’ means the other party to the award.

Subject to the provisions of this rule, the following provisions of Part 74 apply
with such modifications as may be necessary in relation to an award as they apply
in relation to a judgment to which Part II of the Foreign Judgments (Reciprocal
Enforcement) Act 1933 applies—
(a) rule 74.1;

(b) rule 74.3;

(c) rule 74.4(1), 2(a) to (d) and (4);

(d) rule 74.6 (except paragraph 3(c) to (e)); and (e), rule 74.9(2).

(3) An application to have an award registered in the High Court under section 1 of
the 1966 Act'* must be made in accordance with the Part 8 procedure.

1966 c. 41.
The text of the Convention is set out in the Schedule to the Arbitration (International Investment
Disputes) Act 1966 (c. 41).
'* 1966 c. 41; section 1 was amended by the Administration ofJustice Act 1977 (c. 38), sections 4 and
32(4) and Schedule 5, Part I and by the Supreme Court Act 1981 (c. 54), section 152(1) and
Schedule 5,
 Appendix 1 633

(4) The written evidence required by rule 74.4 in support of an application for
registration must—
(a) exhibit the award certified under the Convention instead of the judgment (or
a copy of it); and
(b) in addition to stating the matters referred to in rule 74.4(2)(a) to (d), state
whether—

(i) at the date of the application the enforcement of the award has been
stayed (provisionally or otherwise) under the Convention; and
(ii) any, and if so what, application has been made under the Convention,
which, if granted, might result in a stay of the enforcement of the
award.

(5 eae Where, on granting permission to register an award or an application made by

the judgment debtor after an award has been registered, the court considers —
(a) that the enforcement of the award has been stayed (whether provisionally or
otherwise) under the Convention; or

(b = that an application has been made under the Convention which, if granted,
might result in a stay of the enforcement of the award,
the court may stay the enforcement of the award for such time as it considers
appropriate.

Practice Direction—Arbitration

This Practice Direction supplements Part 62

CONTENTS OF THIS PART

SECTION I

(GG ena TINS BINT co cricoagenons. saoseceecaunes oo oeconbauaade jap agoacAeneseApSaaGesouoqgHee Parada Zal A1-148
O24 AmbitratloniGlatinet Onin meanest saree eters tree eererenneenneteenessene ascta: Paras!
Acknowledgment of service or making representations by arbitrator
OT AGS Siar eae c os sac tee sete Oh tee eames asa cecene ue save rege Para. 4.1
Supply of documents from court records.........c:ccceeeseee eters teensteeeenen
e Params
62.7 —Case. management sccseserecs cer svieravesereenverraadeandi vemsunrivseteaesvensentenseeet Paras Or
Securing the attendance of WitMeSSES ........ cee ...:cc etter tenet Iver. He
Wruieierbag) 3s onVST (eS he opaocegaaneseniernadge
| coabecen sooobnqus danear accosocdsnaaagsesbey Losdos:
doruedder Para. 8.1
Applications under sections 32 and 45 of the 1996 Act... Patay a
Decisions without a hearing............::.::ccccsccccesseceesneeeeesceeessseseensseeeeneeeenees Para. 10.1
62 0== Variationeot tiie. a cette: sesrecee cence reece neater see eee secercnccseaaesssaaers Parenti
Applications for permission to appeal .............:cceseeseeene etter eetseiees Para. 12.1

cccecee
reeseeseeneestsssesenere
62.13—Starting the Claim .........c:ccc eee
nsteenenenenetens Para. 1421
 634 Appendix 1

Secrion III

62.21—Registration of awards under the Arbitration (International Invest-

ment Disputes) Act 1966 ...........:0cssssssesesccsncsecesteesrercerosereresssnsssessncssres Para. 16.1

SECTION I

Al-149 1.1 This Section of this Practice Direction applies to arbitration claims to which Section
I of Part 62 applies.
1.2 In this Section ‘the 1996 Act’ means the Arbitration Act 1996.

1.3 Where a rule provides for a document to be sent, it may be sent—

(1) by first class post;

(2) through a document exchange; or

(3) by fax, electronic mail or other means of electronic communication.

62.3—Starting the claim

Al-150 2.1 An arbitration claim under the 1996 Act (other than under section 9) must be started
in accordance with the High Court and County Courts (Allocation of Arbitration
Proceedings) Order 1996 by the issue of an arbitration claim form.

2.2 An arbitration claim form must be substantially in the form set out in Appendix A to
this practice direction.

2.3 Subject to paragraph 2.1, an arbitration claim form—

(1) may be issued at the courts set out in column | of the table below and will be
entered in the list set out against that court in column 2;

(2) relating to a landlord and tenant or partnership dispute must be issued in the
Chancery Division of the High Court.

Court List

Admiralty and Commercial Registry at the Royal Courts of Commercial list

Justice, London

Technology and Construction Court Registry, St. Dunstan’s LCG hist

House, London

District Registry of the High Court (where mercantile court Mercantile list
established)

District Registry of the High Court (where arbitration claim TCC list
form marked “Technology and Construction Court’ in top right
hand corner)

2.3A An arbitration claim form must, in the case of an appeal, or application for permission
to appeal, from a judge-arbitrator, be issued in the Civil Division of the Court of
 Appendix 1 635

Appeal. The judge hearing the application may adjourn the matter for oral argument
before two judges of that court.

62.4—Arbitration claim form

Service
3.1 The court may exercise its powers under rule 6.8 to permit service of an arbitration Al-151
claim form at the address of a party’s solicitor or representative acting for him in the
arbitration.

3.2 Where the arbitration claim form is served by the claimant he must file a certificate of
service within 7 days of service of the arbitration claim form.

(Rule 6.10 specifies what a certificate of service must show).

Acknowledgment of service or making representations by arbitrator or ACAS

4.1 Where—

(1) an arbitrator; or

(2) ACAS (in a claim under the 1996 Act as applied with modifications by the
ACAS Arbitration Scheme (England and Wales) Order 2001)

is sent a copy of an arbitration claim form (including an arbitration claim form sent
under rule 62.6(2)), that arbitrator or ACAS (as the case may be) may—

(a) apply to be made a defendant; or

(b) make representations to the court under paragraph 4.3.

4.2 An application under paragraph 4.1(2)(a) to be made a defendant—

(1) must be served on the claimant; but

(2) need not be served on any other party.

4.3 An arbitrator or ACAS may make representations by filing written evidence or in

writing to the court.

Supply of documents from court records

5.1 An arbitration claim form may only be inspected with the permission of the court. Al-152

62.7—Case management
6.1 The following directions apply unless the court orders otherwise. Al=153
6.2 A defendant who wishes to rely on evidence before the court must file and serve his
written evidence—

(1) within 21 days after the date by which he was required to acknowledge service,
or,

(2) where a defendant is not required to file an acknowledgement of service, within

21 days after service of the arbitration claim form.

6.3 A claimant who wishes to rely on evidence in reply to written evidence filed under
paragraph 6.2 must file and serve his written evidence within 7 days after service of the
defendant’s evidence.
 636 Appendix 1

6.4 Agreed indexed and paginated bundles of all the evidence and other documents to be
used at the hearing must be prepared by the claimant.

6.5 Not later than 5 days before the hearing date estimates for the length of the hearing
must be filed together with a complete set of the documents to be used.

6.6 Not later than 2 days before the hearing date the claimant must file and serve—

(1) a chronology of the relevant events cross-referenced to the bundle of docu-

ments;

(2) (where necessary) a list of the persons involved; and

(3) a skeleton argument which lists succinctly—

(a) the issues which arise for decision;

(b) the grounds of relief (or opposing relief) to be relied upon;

(c) the submissions of fact to be made with the references to the evidence;
and

(d) the submissions of law with references to the relevant authorities.

6.7 Not later than the day before the hearing date the defendant must file and serve a
skeleton argument which lists succinctly—

(1) the issues which arise for decision;

(2) the grounds of relief (or opposing relief) to be relied upon;

(3) the submissions of fact to be made with the references to the evidence; and

(4) the submissions of law with references to the relevant authorities.

Securing the attendance of witnesses

Al-—154 7.1 A party to arbitral proceedings being conducted in England or Wales who wishes to
rely on section 43 of the 1996 Act to secure the attendance of a witness must apply for
a witness summons in accordance with Part 34.

7.2 If the attendance of the witness is required within the district of a district registry, the
application may be made at that registry.

7.3. A witness summons will not be issued until the applicant files written evidence showing
that the application is made with—

(1) the permission of the tribunal; or

(2) the agreement of the other parties.

Interim remedies

Al-155 8.1 An application for an interim remedy under section 44 of the 1996 Act must be made
in an arbitration claim form.
 Appendix | 637

Applications under sections 32 and 45 of the 1996 Act

9.1 This paragraph applies to arbitration claims for the determination of— Al-156

(1) a question as to the substantive jurisdiction ofthe arbitral tribunal under section
32 of the 1996 Act; and

(2) a preliminary point of law under section 45 of the 1996 Act.

9.2 Where an arbitration claim is made without the agreement in writing of all the other
parties to the arbitral proceedings but with the permission of the arbitral tribunal, the
written evidence or witness statements filed by the parties must set out any evidence
relied on by the parties in support oftheir contention that the court should, or should
not, consider the claim.

9.3 As soon as practicable after the written evidence is filed, the court will decide whether
or not it should consider the claim and, unless the court otherwise directs, will so
decide without a hearing.

Decisions without a hearing

10.1 Having regard to the overriding objective the court may decide particular issues Al-157
without a hearing. For example, as set out in paragraph 9.3, the question whether the
court is satisfied as to the matters set out in section 32(2)(b) or section 45(2)(b) of the
1996 Act.

10.2 The court will generally decide whether to extend the time limit under section 70(3)
of the 1996 Act without a hearing. Where the court makes an order extending the time
limit, the defendant must file his written evidence within 21 days from service of the
order.

62.9—Variation of time

11.1 An application for an order under rule 62.9(1)— A1-158

(1) before the period of 28 days has expired, must be made in a Part 23 application
notice; and

(2) after the period of 28 days has expired, must be set out in a separately identified
part in the arbitration claim form.

Applications for permission to appeal

12.1 Where a party seeks permission to appeal to the court on a question oflaw arising out Al-159
of an arbitration award, the arbitration claim form must—

(1) identify the question of law; and

(2) state the grounds

on which the party alleges that permission should be given.

12.2 The written evidence in support of the application must set out any evidence relied
on by the party for the purpose of satisfying the court—
 638 Appendix 1

(1) of the matters referred to in section 69(3) of the 1996 Act; and

(2) that permission should be given.

12.3 The written evidence filed by the respondent to the application must—

(1) state the grounds on which the respondent opposes the grant of permission,

(2) set out any evidence relied on by him relating to the matters mentioned in
section 69(3) of the 1996 Act; and

(3) specify whether the respondent wishes to contend that the award should be
upheld for reasons not expressed (or not fully expressed) in the award and, if so,
state those reasons.

12.4 The court will normally determine applications for permission to appeal without an
oral hearing.

12.5 Where the court refuses an application for permission to appeal without an oral
hearing, it must provide brief reasons.

12.6 Where the court considers that an oral hearing is required, it may give such further
directions as are necessary.

SECTION II

Al-160 13.1 This Section of this Practice Direction applies to arbitration claims to which Section
II of Part 62 applies.

62.13—Starting the claim

Al-—161 = 14.1 An arbitration claim must be started in the Commercial Court and, where required to
be heard by a judge, be heard by a judge of that court unless he otherwise directs.

SECTION III

Al-162 15.1 This Section of this Practice Direction applies to enforcement proceedings to which
Section III of Part 62 applies.

62.21—Registration of awards under the Arbitration (International Investment

Disputes) Act 1966

Al—163 16.1 Awards ordered to be registered under the 1966 Act and particulars will be entered in
the Register kept for that purpose at the Admiralty and Commercial Registry.

NB: The court forms attached to this Practice Direction are to be found in Section E of
Appendix 6 below.
 Appendix 1 639

Al-164
Court Forms

In the

Claim Form
(arbitration) : eS for eowt use ony
| Claim No.

| Issue
ceaeciiat
date | eet es —

In an arbitration claim between

Claimant

SEAL

Defendant(s)

In the matter of an [intended] arbitration between

Claimant

Set out the names and addresses of persons t he served with the clains form stating their rele in the
Respondents) arbitration and whether thev are defendants.

Detendant’s ) This claim will be heard on:

name and
address

at amvypm

(_) This claim is made without notice.

The court office a

When corresponding with the court, please: ds HFRS OF a Y bad quite The case muiysher
<erriieic
iaiissessnsssssshiteentaceanenihaniiiceaisbmenniiilladannerceir
iscsi === rdieee Pevensie hits oacemsomsclelthsaontesomtasionseisis assests
N8S Claim form (arbitration)
640 Appendix1
 Appendix 1 641

cnimno| |
The claimant seeks an order for costs against

_ Statement of Truth
*(1 believe)(The Claimant believes) that the facts stated in these particulars of claim are true.
* Tam duly authorised by the claimant to sign this statement

| Full name
- Name of claimant's solicitor’s firm

_ signed position or office held

*(Claimant)(Claimant’s solicitor) (if signing on behalfof firm or company)
*delete as appropriake

Claimant's or claimant's solicitor’s address to

which documents should be sent if different from
overleaf, Ifyou are prepared to accept service by
DX, fax or e-mail. please add details.
642 Appendix 1

Arbitration Claim - notes for the claimant

Please read these guidance notes before you begin completing the claim form
The arbitration claim form may be used to start Court List
proceedings and make an application in existing Admiralty and Commercial Registry Commercial
proceedings. Where an application is being made in at the Royal Courts of Justice, London
existing proceedings, an acknowledgment of service
form is not required and the references to an Technology and Construction Court Te?
Registry, St Dunstan’s House, London
acknowledyment of service forrn in the Notes for the
Defendant should be deleted.
District Registry of the High Court Mercantile
(where Mercantile court established)
With the exception of:
* applications under section 9 of the Arbitration Act District Registry of the High Court TCE
1996; and fwhere the Claim form marked
* certain proceedings which may be started only in ‘Technology and Construction Court’
the High Court or only in a county court - see High in top right hand corner)
Court and County Courts (Allocation of Arbitration
Proceedings) Order 1996, arbitration proceedings Central London County Court Mercantile
may be started in the courts set out in the table
opposite.

Heading * specify under which section of Address for documents

You must fill in the heading of the the Act the claim is made: You must provide an address for
claim form with: Respondents service within England and Wales
* the name of the court (High to which documents should be sent.
+ if on notice, give the names
Court or county court); and That address must be either the
and addresses of the persons en
business address of your solicitor,
«if issued in a District Registry, whom the arbitration claim form
or your residential or business
the name of the District Registry is to be served, stating their role
address.
Claimant and defendant details in the arbitration and whether
they are defendants; or Statement of Truth
You must provide vour hdl name The statement of truth must be
* state that the claim is made
and address and the fill names signed by you or by your solicitor,
without notice under section
and addresses of the defendants to Where the statement of truth is
44(3) of the 1966 Act. and the
be served. If a defendant is to be not signed by the solicitor and the
served outside England and Wales. grounds relied on.
claimant is a registered company
the court’s permission may need to Acknowledgment of service form or corporation, the statement of
be sought see Rife 62.5). An acknowledgment of service truth must be signed by either
Remedy claimed and grounds on form N15 must accompany the a director, the treasurer, secretary,
which claim is made arbitration claim form. You should chief executive, manager or other
You must: complete the heading on this form. officer of the company and (in the
Where the claim form is to be case of a corporation) the mayor,
* include a concise statement of served out of the jurisdiction. chairman, president or town clerk.
- the remedy claimed; and you must amend the Notes for
- any questions en which yeu You may rely on the matters
the Defendant to give the time
seek the decision of the court; set out in the claim form as
within which the defendant must
* give details of any arbitration evidence only if the claim form is
acknowledge service and file
verified by a statement of trath.
award which you challenge. evidence. The claim form is valid
identifying which part or parts of You may also file an affidavit or
for one month beginning with the
the award are challenged and the witness statement in support of the
date of its issue or, where required
grounds for the challenge; arbitration claim, which must be
to be served out of the jurisdiction,
served with the claim form.
* show that any statutory for such period as the court may
requirements have been met; fix,

NBA Arbitration claim + notes for elaiment (03.02)

 Appendix 1 643

Arbitration Claim - notes for the defendant

Please read these guidance notes carefully before you respond to the arbitration claim form

Court staff can help you with procedures but they signed by either a director, the treasurer, secretary,
cannot give legal advice. If you need legal advice, chief executive, manager or other officer ofthe
you should contact a solicitor or a Citizens Advice company and (in the case of a corporation) the
Bureau immediately. mayor. Chairman, president or town clerk.
Responding to the claim
If you are: Notes for arbitrators

* named as a defendant in the claim form; and If you are:

* served with a copy of it, * an arbitrator; or

you should respond by completing and returning to * ACAS (in a claim under the 1996 Act as applicd
the court office the acknowledgment of service form with modification by the ACAS (England and
which was enclosed with the claim form, within Wales) Order 2001),
*(14 days) ( ) of the date it was served who has been named as a defendant in the claim
on you, At the same time you must serve a copy on form, the above notes apply to you as they do to any
the claimant and any other party shown on the claim other defendant.
form.
If the claim form was: If you were, or are:
* sent by post, the *(14 days) ( ) * an arbitrator in the arbitration which led to this
starts 2 days from the date of the postmark on claim; and
the envelope:
+ if you are not named as a defendant;
* delivered or left at your address, the
this claim form is sent to you for information
*(14 days) ( ) starts on the day it
was given to you;
* handed to you personally, the You may either:
*(14 days) ( ) starts on the day it * make a request (with notice only to the claimant)
was given to you. to be made a defendant
The acknowledgment of service * may make representations to the court (see
paragraph 4.3 of practice direction to Part 62)
{f you: nn
+ fail to complete and file the acknowledgment of
service within the time specified; or
+ if you indicate that you do not intend to contest
the clann,
if you later change your mind, you will not be
entitled to contest the claim without the court’s
permission.
Evidence
If you wish to rely on evidence before the court,
you must file and serve your written evidence within
*(21 days) ( ) of the date the claim form
was served on you.
Statement of truth
The acknowledgment of service must be signed by
you or by your solicitor. Where the acknowledgment
of service is not signed by your solicitor and you *Claimant should alter where appropriate ifthe claim form is to
are a registered company or corporation. it must be be served out of the jurisdiction (see CPR Part6)

N8B Arbitration claim - notes for defendant (03.02)

644 Appendix 1

Acknowledgment of Service
(arbitration claim)

You should read the “notes for defendant’ attached Claimant

to the claim form which will tell you how to complete (including ref)
this form, and when and where to send if.
Defendant

Tick and complete sections A - D as appropriate.

In all cases you must complete sections E and F

Section A

I do net intend to contest this claim

Section B |

Lintend to contest this claim

Give brief details of any different remedy you are seeking.

Seetion C

l intend to dispute the court’s jurisdiction

(Please note, any application must be filed within 14 days of the date en which you file this acknowledament of service)

The court office at

When corresponding with the court, please address forms or letters to the Court Manager aad quete the claim nuyiber
NIS Achnowled: jent of Service Curbiveation) (03.02)
 Appendix 1 645

Claim No.

‘SectionD
L intend to rely on written evidence

My written evidence:
is filed with this form
will be filed and served within 21 days after the date by which Lam required to file this
acknowledgment of service.

Full name of defendant filing

this acknowledgment

Signed *(L believe The defendant believes) that the facts stated in Position or
(To be signed by this form are true. *l am duly aathorised by the defendant office held
you or by your 10 sign this statement Gf signing on
solicitor) behalf of firm
or company)

*delete as appropriate

Date

Give an if applicable
address in
England or Wales Ref. no.
to which notices
about this case
can he sent to fax no.
Vou

DX no.
Postcode

helene e-mail
 APPENDIX 2

DEPARTMENTAL ADVISORY COMMITTEE ON

ARBITRATION LAw REPORT ON THE
ARBITRATION BILL AND SUPPLEMENTARY
REPORT ON THE ARBITRATION AcT 1996

Para.
INCEPBYOAE. Ont qHaVS VAT ONTENANT LBS. ncoqecuapenndansondacedeeoroecose
cseracsoadoe wononbooose se A2-000
Supplementary report on the Arbitration Act 1996 ..............ccccccc0cceeeeees A2-108

REPORT ON THE ARBITRATION BILL

Chairman
The Rt Hon Lord Justice Saville

February 1996

CONTENTS

Para.

Chapter 1 PN EROD
WG TION tie eeceee eee ee A2-000

Chapter 2 PART ROR SHE: BIE. ceceee A2-001

Introductory Urovistonsy (Glan Sesml=5)) peamresuess,

nents meneneeeen een tmnt A2-002
ibesArbitratiom aereements ((Glausess6—5) vreecceaeeentee
eateeerete eeneee A2-009
StaysoulsepalRroceedinpsn(Clanses.9 = ))eacemrisn
cece essen eeereemenncee A2-012
Commencement of Arbitral Proceedings (Clauses 12-14) .......cccccccceeeeeese A2-015
Mae! EM oin ell WMisloyubeell(Cle aS WED) oon. ccenanceoceeescctanocopacmocnssessounsee A2-017
Jurisdiction of the Arbitral Tribunal (Clauses 30-32) .o....ccccccseceeseeeseees A2-031
Aloe: Aedowtaall Peoerscrabineys (CCIWAS SIAN acssuanconeager-oonunncncanasadenaecsctenck A2-034
Powers of Court in Relation to Arbitral Proceedings (Clauses 42—45)...... A2-045
 Appendix 2 647

hes Award (Glausestt+6—5'8) px Bicatect ieee 7 ate Rhee nee tA as EN awe oe aN A2-049
Costs of the Arbitration: (Clauses 59565). csvcscas:sscwsstasvscacscavcsseveveatoe A2-062
Powers of the Court in Relation to Award (Clauses 66-71)......ccccccccec0ee: A2-063
Miscellaneoussarovisions: (@lauseswi2—75)iavee ene tees ee A2-068
Supplementany: Brovstonss(Clausesi6=94)nse semen sees ee eee A2-072

Chapter 3 PARGGH ORSBEE BIG Acs: See toe ae ee A2-080

Domestic Arbitration Agreements (Clauses 85-88) ............ccccccccsseeceeeeeeees A2-080

Consumer Arbitration Agreements (Clauses 89—93)...........cccccccccseseesseeee A2-081
Small Claims Arbitrations in the County Court (Clause 94).................... A2-082
Appomtmnent of judges as) Arbitrators (Clause!95)hececcer-c.sses-reeest-asener-ct A2-083
Statutory Arbitrations and Supplementary (Clauses 96-101) .......0...00...4. A2-084

Chapter 4 RAR TINO aR EyBUT eee te eetees tee. peeees cee beets A2-085

Chapter 5 PARTeVeO BP HEOB IIS), .csctesceertecavesoiccceses

casettete A2-086

Chapter 6 SUPPLEMENTARY RECOMMENDATIONS ......... A2-087

Chapter 7 GONGEUSIONS seserethes. weet

ction) hiedoreat A2-107

MEMBERS OF THE COMMITTEE

The Rt Hon. Lord Justice Saville (Chairman)

Professor J. M. Hunter (Deputy Chairman)
Miss C. R. Allen (Secretary)
Mr P. Bovey
Mr A. W. S. Bunch
Mr S. C. Boyd Q.C.
Dr K. G. Chrystie
Lord Dervaird
Mr J. B. Garrett
Professor R. M. Goode C.B.E., Q.C., F.B.A.
Mr B. Harris
Mrs J. Howe
Mrs P. Kirby-Johnson
Mr R. A. MacCrindle Q.C.
 648 Appendix 2

Mr A. I. Marriott
Mr K. S. Rokison Q.C.
Mr D. Sarre
Mr J. H. M. Sims
Professor D. R. Thomas
Professor J. Uff Q.C.
Mr V. V. Veeder Q.C.

The DAC has been greatly assisted by the invaluable work done by Mr T. T. Landau of
counsel.

CHAPTER 1

INTRODUCTION

A2-000 1. In its Report of June 1989, the Departmental Advisory Committee on Arbitration
Law (the DAC), under the chairmanship of Lord Justice Mustill (now Lord Mustill)
recommended against England, Wales and Northern Ireland adopting the UNCI-
TRAL Model Law on International Commercial Arbitration. Instead, the DAC
recommended that there should be a new and improved Arbitration Act for England,
Wales and Northern Ireland, with the following features (Paragraph 108):

“(1) It should comprise a statement in statutory form of the more important

principles of the English law of arbitration, statutory and (to the extent
practicable) common law.

(2 oe It should be limited to those principles whose existence and effect are

uncontroversial.

(3 wa It should be set out in a logical order, and expressed in language which is

sufficiently clear and free from technicalities to be readily comprehensible to
the layman.

(4 — It should in general apply to domestic and international arbitrations alike,

although there may have to be exceptions to take account of treaty obliga-
tions.

(5) It should not be limited to the subject-matter of the Model Law.

(6 — It should embody such of our proposals for legislation as have by then been
enacted: see paragraph 100 [of the 1989 Report].

(7) Consideration should be given to ensuring that any such new statute should, so
far as possible, have the same structure and language as the Model Law, so as
to enhance its accessibility to those who are familiar with the Model Law.”
 Appendix 2 649

2: In an Interim Report in April 1995, the DAC stated as follows:

“The original interpretation of [paragraph 108 of the 1989 Report] led to the draft
Bill which was circulated in February 1994. Although undoubtedly a highly skilful
piece of work, it now appears that this draft Bill did not carry into effect what most
users in fact wanted. In the light of the responses, the view of the DAC is that a new
Bill should still be grounded on the objectives set out in [paragraph 108 ofthe 1989
Report], but that, reinterpreted, what is called for is much more along the lines of
a restatement of the law, in clear and ‘user-friendly’ language, following, as far as
possible, the structure and spirit of the Model Law, rather than simply a classic
exercise in consolidation.”

The DAC’s proposals in the Interim Report led to a new draft Bill which was
circulated for public consultation in July 1995. This draft was very much the product
ofa fresh start. Indeed, it will be noted that whereas the February 1994 draft had the
following long-title:

“To consolidate, with amendments, the Arbitration Act 1950, the Arbitration Act
1975, the Arbitration Act 1979 and related enactments”

this was altered for the July 1995 draft, and now begins:

“An Act to restate and improve the law relating to arbitration pursuant to an
arbitration agreement... ’ ’

The DAC remained of the view, for the reasons given in the Mustill Report, that the
solution was not the wholesale adoption of the Model Law. However, at every stage in
preparing a new draft Bill, very close regard was paid to the Model Law, and it will
be seen that both the structure and the content of the July draft Bill, and the final
draft, owe much to this model.

The task of the Committee has been made far easier by the extraordinary quantity and
quality of responses we received both to the draft Bill published in February 1994 and
to the draft Bill which was published in July 1995. A large number of people put
substantial time and effort into responding to both drafts and putting forward
suggestions, and we are very grateful to all of them. Indeed, both these consultation
exercises have proved invaluable: the former showed that a new approach was
required, while the latter showed that our April 1995 proposals seemed to be on the
right track. Both sets of responses also contained carefully considered suggestions,
many of which have been incorporated in the Bill. It should be emphasized that those
suggestions which have not been adopted were only put on one side after lengthy
consideration.

Among those who responded were a large number ofinstitutions who offer arbitration
services (such as the ICC) or who provide rules and administration for arbitrations
concerning their members (such as the commodity associations). Both domestically
and internationally institutions such as these play a very significant role in the field of
arbitration. It seemed to us that the Bill should specifically recognize this, and that it
should safeguard their spheres of operation. Consequently, there are many references
to such institutions in the Bill, and, indeed, Clause 74 gives them what we believe to
be a necessary degree of immunity from suit.
 650 Appendix 2

7. Given the extremely favourable response, the July 1995 draft was taken forward, with
certain modifications, to form the basis of the final draft, which is explained in this
Report.

8. As well as containing a guide to the provisions of the final draft, this Report also
contains supplementary recommendations (in Chapter 6) on certain matters that have
come to light since publication of the final draft, and since its second reading in the
House of Lords.

CHAPTER 2

Part I oF THE BILL

A2-001 Y), The title to this Part is Arbitration Pursuant to an Arbitration Agreement. It is in this
Part that we have attempted to restate within a logical structure the basic principles
of our law of arbitration, as it relates to arbitration under an agreement to adopt this
form of dispute resolution. The Bill does not purport to provide an exhaustive code
on the subject of arbitration. It would simply not be practicable to attempt to codify
the huge body of case law that has built up over the centuries, and there would be a
risk of fossilising the common law (which has the great advantage of being able to
adapt to changing circumstances) had we attempted to do so. Rather, we have sought
to include what we consider to be the more important common law principles, whilst
preserving all others, in so far as they are consistent with the provisions of the Bill (see
Clause 81).

10. A small number of key areas, however, have not been included, precisely because they
are unsettled, and because they are better left to the common law to evolve. One such
example concerns privacy and confidentiality in arbitrations, which deserves special
mention here.

ay. Privacy and confidentiality have long been assumed as general principles in English
commercial arbitration, subject to important exceptions. It is only recently that the
English courts have been required to examine both the legal basis for such principles
and the breadth of certain of these exceptions, without seriously questioning the
existence of the general principles themselves (see eg. The Eastern Saga [1988] 2
Lloyd’s Rep. 373, 379 (Leggatt L.J.); Dolling-Baker v. Merrett [1990] 1 W.L.R. 1205,
1213 (Parker L.J.); Hassneh v. Mem [1993] 2 Lloyd’s Rep. 243 (Colman J.); Hyundai
Engineering v. Active (unreported, 9 March 1994, Phillips J.); Ins Company v. Lloyd's
Syndicate {1995] 2 Lloyd’s Rep. 272 (Colman J.); London & Leeds Estates Limited v.
Parisbas Limited (No. 2) (1995) E.G. 134 (Mance J.)).

12. In practice, there is also no doubt whatever that users of commercial arbitration in
England place much importance on privacy and confidentiality as essential features of
English arbitration (e.g. see survey of users amongst the “Fortune 500” U.S. corpora-
tions conducted for the LCIA by the London Business School in 1992). Indeed, as Sir
Patrick Neill Q.C. stated in his 1995 “Bernstein” Lecture, it would be difficult to
 Appendix 2 651

conceive of any greater threat to the success of English arbitration than the removal
of the general principles of confidentiality and privacy.

13. Last year’s decision of the High Court of Australia in Esso/BHP v. Plowman (see
[1995] 11 Arbitration International 234) reinforced many people’s interest in seeking to
codify the relevant English legal principles in the draft Arbitration Bill. The implied
term as the contractual basis for such principles was not in doubt under English law,
and the English Courts were upholding these principles in strong and unequivocal
terms. However, the Australian decision was to the effect that, as a matter of
Australian law, this contractual approach was unsustainable as regards confidentiality.
This has troubled users of commercial arbitration far outside Australia. The first
response has been for arbitral institutions to amend their arbitration rules to provide
expressly for confidentiality and privacy. The new WIPO Rules have sought to achieve
this and we understand that both the ICC and the LCIA are currently amending their
respective rules to similar effect.

ete In England, the second response was to consider placing these general principles on
a firm statutory basis in the Arbitration Bill. This task was initially undertaken by the
DAC mid-1995, and perhaps surprisingly, it soon proved controversial and diffi-
cult.

ING Whilst none could reasonably dispute the desirability of placing these general princi-
ples beyond all doubt on a firm statutory basis, applicable to all English arbitrations
within the scope of the Bill (irrespective of the substantive law applicable to the
arbitration agreement), grave difficulties arose over the myriad exceptions to these
principles—which are necessarily required for such a statutory provision. There is of
course no statutory guidance to confidentiality in the UNCITRAL Model Law
whatever; and indeed, in a different context, Lord Mustill has recently warned against
an attempt to give in the abstract an accurate exposition of confidentiality at large (see
In re D (Adoption Reports: Confidentiality) {1995] 3 W.L.R. 483, 496D: “To give an
accurate exposition of confidentiality at large would require a much more wide-
ranging survey of the law and practice than has been necessary for a decision on the
narrow issue raised by the appeal, and cannot in my opinion safely be attempted in the
abstract’’).

16. For English arbitration, the exceptions to confidentiality are manifestly legion and
unsettled in part; and equally, there are important exceptions to privacy (e.g. in The
Lena Goldfields Case (1930), the arbitration tribunal in London opened the hearing to
the press (but not the public) in order to defend the proceedings against malicious
charges made by one of the parties, the USSR). As to the former, the award may
become public in legal proceedings under the Arbitration Acts 1950-1979 or abroad
under the 1958 New York Convention; the conduct of the arbitration may also become
public if subjected to judicial scrutiny within or without England; and most impor-
tantly, several non-parties have legitimate interests in being informed as to the content
of a pending arbitration, even short of an award: eg. parent company, insurer, P+I
Club, guarantor, partner, beneficiary, licensor and licensee, debenture-holder, credi-
tors’ committee etc., and of course even the arbitral institution itself (such as the ICC
Court members approving the draft award). Whilst non-parties to the arbitration
agreement and proceedings, none of these are officious strangers to the arbitration.
Further, any provisions as to privacy and confidentiality would have to deal with the
duty of a company to make disclosure of, ¢.g., arbitration proceedings and actual or
potential awards which have an effect on the company’s financial position. The further
 652 Appendix 2

Australian decision in Commonwealth ofAustralia v. Cockatoo Dockyard Pty Ltd (1995)

36 N.S.W.L.R. 662 suggests that the public interest may also demand transparency as
an exception to confidentiality: “Can it be seriously suggested that [the parties’]
private agreement can, endorsed by a procedural direction of an arbitrator, exclude
from the public domain matters oflegitimate concern . . .”, per Kirby J. This decision
raises fresh complications, particularly for statutory corporations. We are of the view
that it would be extremely harmful to English arbitration if any statutory statement of
general principles in this area impeded the commercial good-sense of current prac-
tices in English arbitration.

U7. Given these exceptions and qualifications, the formulation of any statutory principles
would be likely to create new impediments to the practice of English arbitration and,
in particular, to add to English litigation on the issue. Far from solving a difficulty, the
DAC was firmly of the view that it would create new ones. Indeed, even if acceptable
statutory guidelines could be formulated, there would remain the difficulty of fixing
and enforcing sanctions for non-compliance. The position is not wholly satisfactory.
However, none doubt at English law the existence of the general principles of
confidentiality and privacy (though there is not unanimity as to their desirability).
Where desirable, institutional rules can stipulate for these general principles, even
where the arbitration agreement is not governed by English law. As to English law
itself, whilst the breadth and existence of certain exceptions remains disputed, these
can be resolved by the English courts on a pragmatic case-by-case basis. In due
course, if the whole matter were ever to become judicially resolved, it would remain
possible to add a statutory provision by way of amendment to the Bill. For these
reasons, the DAC is of the view that no attempt should be made to codify English law
on the privacy and confidentiality of English arbitration in the Bill. We would,
however, draw attention to our supplementary recommendations on this topic in
Chapter 6 below.

Clause 1 General Principles

A2-002 18. The DAC was persuaded by the significant number of submissions which called for
an introductory clause setting out basic principles. This Clause sets out three general
principles. The first of these reflects what we believe to be the object of arbitration.
We have not sought to define arbitration, since this poses difficulties that we discussed
in our April 1995 Interim Report, and in the end we were not persuaded that an
attempted definition would serve any useful purpose. We do, however, see value in
setting out the object of arbitration. Fairness, impartiality and the avoidance of
unnecessary delay or expense are all aspects of justice 7.e. all requirements ofa dispute
resolution system based on obtaining a binding decision from a third party on the
matters at issue. To our minds it is useful to stipulate that all the provisions of the Bill
must be read with this object of arbitration in mind.

We) The second principle is that of party autonomy. This reflects the basis of the Model
Law and indeed much of our own present law. An arbitration under an arbitration
agreement is a consensual process. The parties have agreed to resolve their disputes
by their own chosen means. Unless the public interest otherwise dictates, this has two
main consequences. Firstly, the parties should be held to their agreement and
secondly, it should in the first instance be for the parties to decide how their
arbitration should be conducted. In some cases, of course, the public interest will
make inroads on complete party autonomy, in much the same way as there are
limitations on freedom of contract. Some matters are simply not susceptible of this
 Appendix 2 653

form of dispute resolution (e.g. certain cases concerning status or many family
matters) while other considerations (such as consumer protection) may require the
imposition of different rights and obligations. Again, as appears from the mandatory
provisions of the Bill, there are some rules that cannot be overridden by parties who
have agreed to use arbitration. In general the mandatory provisions are there in order
to support and assist the arbitral process and the stated object of arbitration.

20. So far as the third principle is concerned this reflects article 5 of the Model Law. This
article provides as follows:

“In matters governed by this Law, no court shall intervene except where so
provided in this Law.”

7A As was pointed out in the Mustill Report (pp. 50-52) there would be difficulties in
importing this article as it stands. However, there is no doubt that our law has been
subject to international criticism that the courts intervene more than they should in
the arbitral process, thereby tending to frustrate the choice the parties have made to
use arbitration rather than litigation as the means for resolving their disputes.

Mi, Nowadays the courts are much less inclined to intervene in the arbitral process than
used to be the case. The limitation on the right of appeal to the courts from awards
brought into effect by the Arbitration Act 1979, and changing attitudes generally, have
meant that the courts nowadays generally only intervene in order to support rather
than displace the arbitral process. We are very much in favour of this modern
approach and it seems to us that it should be enshrined as a principle in the Bill.

Clause 2. Scope of Application of Provisions

MS). International arbitrations can give rise to complex problems in the conflict of laws. A A2-003
possible solution to some of these problems would have been to provide that all
arbitrations conducted in England and Wales or in Northern Ireland should be
subject to the provisions of the Bill, regardless of the parties’ express or implied
choice of some other system of law. We have not adopted this solution, which appears
to us contrary to the basic principle that the parties should be free to agree how their
disputes should be resolved. There appear to us to be no reasons of public policy to
prevent the parties conducting an arbitration here under an agreement governed by
foreign law or in accordance with a foreign procedural law. Clause 4(5) also follows the
same basic principle. Of course, cases may well arise where considerations of our own
concepts of public policy would lead to the refusal of the court here to enforce an
arbitration award. This, however, is covered by Clause 66(3).

Ws: The rules of the conflict of laws as they apply to arbitration are complex, and to some
extent still in a state of development by the courts. It therefore seems to us inap-
propriate to attempt to codify the relevant principles, beyond the simple statements
set out in clause 2(1). Thus, as Clause 2(2) provides, matters referable to the
arbitration agreement are governed by the law of England and Wales or of Northern
Ireland, as the case may be, where that is the law applicable to the arbitration
agreement, and matters of procedure are governed by that law where the seat of the
arbitration is in England and Wales or in Northern Ireland: “seat” is defined in Clause
3. Beyond that we have not attempted to state the relevant rules of the conflict of laws,
nor to embark on the issues of characterisation by which they are invoked.
 654 Appendix 2

Subsection (3) concerns the powers of the court to support the arbitration by staying
proceedings brought in breach of an agreement to arbitrate, by compelling the
attendance of witnesses, by granting those forms ofinterim relief which are set out in
Clause 44, and by enforcing the award at common law by summary procedure. Such
powers should obviously be available regardless of whether the seat of the arbitration
is in England and Wales or in Northern Ireland, and regardless of what law is
applicable to the arbitration agreement or the arbitral proceedings. Since we have used
the expression “whatever the law applicable... ”, it follows that Clause 2(3) is in no
way restricted by Clause 2(1). It will be noted that in extending the power of the court
to grant interim relief in support of arbitrations to arbitrations having a foreign seat
we have given effect to our recommendation that section 25 of the Civil Jurisdiction
and Judgments Act 1982 should be extended to arbitration proceedings. It should be
appreciated that Rules of Court will have to be amended to give proper effect to the
extension of the court’s jurisdiction in Clause 2(3) (7.2. so as to allow service out of the
jurisdiction in cases where it is necessary). Subsection (4) enables the court to refuse
to exercise its power in such cases, where the fact that the arbitration has a foreign seat
makes it inappropriate to exercise that power.

Clause 3. The Seat of the Arbitration

A2-004 26. The definition of “‘seat of the arbitration” is required by Clause 2, and as part of the
definition of “domestic arbitration” in Clause 85. The concept of the “seat” as the
juridical seat of the arbitration is known to English law but may be unfamiliar to some
users of arbitration. Usually it will be the place where the arbitration is actually
conducted: but this is not necessarily so, particularly if different parts of the proceed-
ings are held in different countries.

27. In accordance with the principle of party autonomy, Clause 3 provides that the seat
may be designated by the parties themselves or in some other manner authorised by
them. Failing that it must be determined objectively having regard to the parties’
agreement and all other relevant circumstances. English law does not at present
recognise the concept of an arbitration which has no seat, and we do not recommend
that it should do so. The powers of the court where the seat is in England and Wales
or in Northern Ireland are limited to those necessary to carry into effect the principles
enshrined in Clause 1. Where the seat is elsewhere, the court’s powers are further
limited by Clause 2(4). The process of consultation identified no need for an
arbitration which was “‘delocalised” to a greater extent than this.

Clause 4 Mandatory and Non-mandatory Provisions

A2-005 28. This provision is designed to make clear that the Bill has certain provisions that
cannot be overridden by the parties; and for ease of reference these are listed in
Schedule 1 to the Bill. The Clause also makes clear that the other provisions of this
Part can be changed or substituted by the parties, and exist as “‘fall-back”’ rules that
will apply if the parties do not make any such change or substitution, or do not
provide for the particular matter in question. In this way, in the absence of any other
contrary agreement, gaps in an arbitration agreement will be filled.

JA), Subsection (5). Although we believe that the choice of a foreign law would anyway
have the effect set out in this provision, it seemed for the sake of clarity to be useful
to state this expressly, so as to remind all concerned that a choice of a foreign law does
amount to an agreement of the parties to which due regard should be paid.
 Appendix 2 655

30. It should be made clear that the phrase “mandatory” is not used in either of the two
senses that it is used, for example, in Articles 3 and 7 of the Rome Convention (see
Goode, Commercial Law (2nd ed.) at 1118): the mandatory provisions of Part 1 of the
Bill are only mandatory in so far as the provisions of Part 1 apply (i.e. by virtue of
Clause 2). The mandatory provisions would have no application if Part 1 does not
apply.

Clause 5 Agreements to be in Writing

(a) Arbitration Agreements

3 Article 7 of the Model Law requires the arbitration agreement to be in writing. We A2-006
have not followed the precise wording of this article, for the reasons given in the
Mustill Report (p. 52), though we have incorporated much of that article in the
Bill.

a2 The requirement for the arbitration agreement to be in writing is the position at

present under section 32 of the Arbitration Act 1950 and section 7 of the Arbitration
Act 1975. If an arbitration agreement is not in writing then it is not completely
ineffective, since the common law recognises such agreements and is saved by Clause
§1(2)(a).

38: We remain of the view expressed in the Consultative Paper issued with the draft
Clauses published in July 1995, that there should be a requirement for writing. An
arbitration agreement has the important effect of contracting out of the right to go to
the court, 7.e. it deprives the parties of that basic right. To our minds an agreement
of such importance should be in some written form. Furthermore the need for such
form should help to reduce disputes as to whether or not an arbitration agreement was
made and as to its terms.

oF We have, however, provided a very wide meaning to the words “‘in writing’’. Indeed
this meaning is wider than that found in the Model Law, but in our view, is consonant
with Article II.2 of the English text of the New York Convention. The non-exhaustive
definition in the English text (‘shall include”) may differ in this respect from the
French and Spanish texts, but the English text is equally authentic under Article XVI
of the New York Convention itself, and also accords with the Russian authentic text
(‘“KrouaeT’’); see also the 1989 Report of the Swiss Institute of Comparative Law on
Jurisdictional Problems in International Commercial Arbitration (by Adam Samuel),
at pages 81 to 85. It seems to us that English law as it stands more than justifies this
wide meaning; see, for example, Zambia Steel v. James Clark [1986] 2 Lloyd’s Rep.
225. In view of rapidly evolving methods of recording we have made clear that
“writing” includes recording by any means.

(b) Other Agreements

These we have also made subject to a ‘‘writing” requirement. Had we not done so, we A2-007
could envisage disputes over whether, for example, something the parties had agreed
to during the conduct of the arbitration amounted to a variation of the arbitration
 656 Appendix 2

agreement and required writing, or could be characterised as something else. By

introducing some formality with respect to all agreements, the possibility of sub-
sequent disputes (eg. at the enforcement stage) is greatly diminished. Indeed it
seemed to us that with the extremely broad definition we have given to writing, the
advantages of requiring some record of what was agreed with regard to any aspect of
an arbitration outweighed the disadvantages of requiring a specific form for an
effective agreement.

(c) Further Points

A2-008 36. Subsection 5(3). This is designed to cover, amongst other things, extremely common
situations such as salvage operations, where parties make an oral agreement which
incorporates by reference the terms ofawritten form of agreement (e.g. Lloyd’s Open
Form), which contains an arbitration clause. Whilst greatly extending the definition
of “writing”, the DAC is of the view that given the frequency and importance of such
activity, it was essential that it be provided for in the Bill. The reference could be to
a written agreement containing an arbitration clause, or to a set of written arbitration
rules, or to an individual written arbitration agreement. This provision would also
cover agreement by conduct. For example, party A may agree to buy from party B a
quantity of goods on certain terms and conditions (which include an arbitration
clause) which are set out in writing and sent to party B, with a request that he sign
and return the order form. If, which is by no means uncommon, party B fails to sign
the order form, or send any document in response to the order, but manufactures and
delivers the goods in accordance with the contract to party A, who pays for them in
accordance with the contract, this could constitute an agreement “otherwise than in
writing by reference to terms which are in writing... ”’, and could therefore include
an effective arbitration agreement. The provision therefore seeks to meet the criti-
cisms that have been made of article 7(2) of the Model Law in this regard (see, e.g. the
Sixth Goff Lecture, delivered by Neil Kaplan Q.C. in Hong Kong in November 1995,
(1996) 12 Arb. Int. 35). A written agreement made by reference to separate written
terms would, of course, be caught by Clause 5(2).

oie Subsection 5(4). There has been some concern that a writing requirement with
respect to every agreement might unduly constrain the parties’ freedom and flexibility
with respect to, for example, minor matters of procedure during a hearing. This
subsection seeks to avoid this. An agreement will be evidenced in writing if recorded
by, amongst others, a third party with the authority of the parties to the agreement.
Given that this third party could of course be the tribunal, the parties are free during
a hearing to make whatever arrangements or changes to the agreed procedure they
wish, as long as these are recorded by the tribunal. The DAC is of the view that this
presents no serious hindrance to the parties’ flexibility, and has the merit of reducing
the risk of disputes later on as to what exactly was agreed. Clearly, this subsection also
has a wider effect, allowing for the recording of an oral agreement at any stage.

Subsection 5(5). This provision is based on article 7(2) of the Model Law, but with
certain important changes. The DAC has been careful to emphasize that for there to
be an effective arbitration agreement for the purposes of this Part, it is not enough for
one party to allege in a written submission that there is an arbitration agreement, in
circumstances where the other party simply fails to respond at all. If this were enough,
 Appendix 2 657

an unfair obligation would be placed on any party (including a stranger to the

proceedings in question) to take the active step of serving a written submission in
order to deny this allegation. Therefore, in order to satisfy this subsection, there must
be a failure to deny an allegation by a party who has submitted a response submis-
sion.

39. It has been suggested that the term “written submissions” is too narrow, and that this
should be replaced by “documents”. The DAC does not agree with this, given that
this would include the most informal of letters. It may well be unjust, for example, for
one party to be able to point to one sentence in one letter in a long exchange with
another party, in which there is an allegation that there exists an arbitration clause,
and where this has not been denied.

40. Reference should also be made to subsection 23(4). Whilst any agreement as to an
arbitration must be in writing, the DAC is of the view that it is impracticable to
impose a writing requirement on an agreement to terminate an arbitration. Parties
may well simply walk away from proceedings, or allow the proceedings to lapse, and
it could be extremely unfair if one party were allowed to rely upon an absence of
writing at some future stage. Where a claimant allows an arbitration to lapse, Clause
41(3) may be utilised.

The Arbitration Agreement

Clause 6 Definition of Arbitration Agreement

41. The first subsection reflects article 7(1) of the Model Law and provides a more A2-009
informative definition than that in section 32 of the 1950 Act. We have used the word
“disputes” but this is defined in Clause 82 as including “differences” since there is
some authority for the proposition that the latter term is wider than the former; see
Sykes v. Fine Fare Ltd [1967] 1 Lloyd’s Rep. 53.

42. The second subsection reflects article 7(2) of the Model Law. In English law there is
at present some conflicting authority on the question as to what is required for the
effective incorporation of an arbitration clause by reference. Some of those respond-
ing to the July 1995 draft Clauses made critical comments of the views of Sir John
Megaw in Aughton v. M F Kent Services [1991] 57 B.L.R. 1 (a construction contract
case) and suggested that we should take the opportunity of making clear that the law
was as stated in the charterparty cases and as summarised by Ralph Gibson L.J. in
Aughton. (Similar disquiet has been expressed about decisions following Aughton,
such as Ben Barrett v. Henry Boot Management Ltd |1995] Constr. Ind. Law Letter
1026). It seemed to us, however, that although we are of the view that the approach
of Ralph Gibson L.J. should prevail in all cases, this was really a matter for the court
to decide. The wording we have used certainly leaves room for the adoption of the
charterparty rules in all cases, since it refers to references to a document containing
an arbitration clause as well as a reference to the arbitration clause itself. Thus the
wording is not confined to cases where there is specific reference to the arbitration
clause, which Sir John Megaw (but not Ralph Gibson L.J.) considered was a
requirement for effective incorporation by reference.

Clause 7 Separability of Arbitration Agreement

43. This Clause sets out the principle of separability which is already part of English law A2-010
(see Harbour Assurance v. Kansa [1993] Q.B. 701), which is also to be found in article
 658 Appendix 2

16(1) of the Model Law, and which is regarded internationally as highly desirable.
However, it seems to us that the doctrine of separability is quite distinct from the
question of the degree to which the tribunal is entitled to rule on its own jurisdiction,
so that, unlike the Model Law, we have dealt with the latter elsewhere in the Bill
(Clause 30),

44, In the draft Clauses published in July 1995 we inserted a provision to make clear that
the doctrine of separability did not affect the question whether an assignment of
rights under the substantive agreement carried with it the right or obligation to
submit to arbitration in accordance with the arbitration agreement. This is now
omitted as being unnecessary, since we have re-drafted subsection (1) in order to
follow the relevant part of article 16 of the Model Law more closely, and to make clear
that the doctrine of separability is confined to the effect of invalidity etc of the main
contract on the arbitration agreement, rather than being, as it was in the July 1995
draft, a free-standing principle. Similarly, in being so restricted, this Clause is not
intended to have any impact on the incorporation of an arbitration clause from one
document or contract into another (which is addressed in Clause 6(2)).

45. A number of those responding to our drafts expressed the wish for the Bill to lay down
rules relating to assignment, e.g. that the assignment of rights under the substantive
agreement should be subject to any right or obligation to submit to arbitration in
accordance with the arbitration agreement unless either of these agreements provided
otherwise. Indeed we included such a provision in the illustrative draft published in
April 1995. However, on further consideration, we concluded that it would not be
appropriate to seek to lay down any such rules.

46. There were two principal reasons for reaching this view.

i. In the first place, under English law the assignability of a contractual right is
governed by the proper law of that right, while the effectiveness of the assignment
is governed by the proper law of the assignment. However, where the law govern-
ing the substantive agreement (or the arbitration agreement) is not English law,
different rules may well apply and there is an added problem in that those rules
(under the foreign law in question) may be categorised as either substantive or
procedural in nature. The Bill would therefore have to address such problems
whilst simultaneously not interfering with substantive rights and obligations. We
were not persuaded that it would be either practicable or of any real use to attempt
to devise general rules which would deal satisfactorily with this matter.
i. In the second place, English law distinguishes between legal and equitable assign-
ments, so that any rules we devised would have to take this into account. In our
view, an attempt to devise rules relating to assignments where no foreign law
elements are involved is more the subject of reform of the law of assignment
generally than of a Bill relating exclusively to arbitration.

47. Finally, it should be noted that the substantive agreement of which the arbitration
agreement forms part need not itself be in writing for the Bill to apply, provided of
course that the arbitration agreement itself is in writing. This should be clarified as
we suggest in our supplementary recommendations in Chapter 6 below.

Clause 8 Whether Agreement discharged by Death of a Party

A2-011 48. This Clause sets out the present statutory position. The common law was that an
arbitration agreement was discharged by the death of a party. That rule was altered
 Appendix 2 659

by the Arbitration Act 1934 as re-enacted by section 2 of the Arbitration Act 1950.
We have avoided using the technical expression “right of action” which is to be found
in section 2(3) of the 1950 Act and which could perhaps give rise to problems for the
reasons given in the consultative paper published with the draft Clauses in July 1995.
In line with party autonomy, we have provided that the parties can agree that death
shall have the effect of discharging the arbitration agreement.

an) This Clause deals only with the arbitration agreement. The effect of the death of a
party on the appointment of an arbitrator (also to be found in section 2 of the 1950
Act) is now dealt with in that part of the Bill concerned with the arbitral tribunal (see
Clause 26(2)).

Stay of Legal Proceedings

Clause 9 Stay of Legal Proceedings

50. We have proposed a number of changes to the present statutory position (section 4(1) A2-012
of the 1950 Act and section | of the 1975 Act), having in mind article 8 of the Model
Law, our treaty obligations, and other considerations.

Sul, We have made it clear that a stay can be sought of a counterclaim as well as a claim.
The existing legislation could be said not to cover counterclaims, since it required the
party seeking a stay first to enter an “‘appearance”’ which a defendant to counterclaim
could not do. Indeed, ‘‘appearance” is no longer the appropriate expression in the
High Court in any event, and never was the appropriate expression in the county
court. We have also made clear that an application can be made to stay part of legal
proceedings, where other parts are not subject to an agreement to arbitrate.

Sys. Further, the Clause provides that an application is only to be made by a party against
whom legal proceedings are brought (as opposed to any other party).

53. We have provided that an application may be made for a stay even where the matter
cannot be referred to arbitration immediately, because the parties have agreed first to
use other dispute resolution procedures. This reflects dicta of Lord Mustill Channel
Tunnel v. Balfour Beatty [1993] A.C. 334.

54. In this Clause we have made a stay mandatory unless the court is satisfied that the
arbitration agreement is null and void, inoperative, or incapable of being performed.
This is the language of the Model Law and of course of the New York Convention on
the Recognition and Enforcement of Foreign Arbitral Awards, presently to be found
in the Arbitration Act 1975.

Dos The Arbitration Act 1975 contained a further ground for refusing a stay, namely
where the Court was satisfied that “there was not in fact any dispute between the
parties with regard to the matter agreed to be referred”. These words do not appear
in the New York Convention and in our view are confusing and unnecessary, for the
reasons given in Hayter v. Nelson [1990] 2 Lloyd’s Rep. 265.

In Part II of the Bill these provisions are altered in cases of “domestic arbitration
agreements” as there defined.

a7 We have included a provision (subsection (5)) that where the court refuses to stay the
legal proceedings, any term making an award a condition precedent to the bringing of
 660 Appendix 2

legal proceedings (known as a Scott v. Avery clause) will cease to have effect. This
avoids a situation where the arbitration clause is unworkable, yet no legal proceedings
can be successfully brought. Whilst one respondent suggested that this may go too far,
it appears to be a matter of basic justice that a situation in which a party can neither
arbitrate nor litigate must be avoided.

Clause 10 Reference of Interpleader Issue to Arbitration

A2-013 58. This Clause is based on section 5 of the 1950 Act. We have however taken the
opportunity of making a stay mandatory so as to comply with the New York
Convention, as well as trying to express the provision in simpler, clearer terms. The
Clause is required because “‘interpleader” arises where one party claiming no right
himself in the subject matter, is facing conflicting claims from other parties and does
not know to which of them he should account. English law allows such a party to bring
those in contention before the court which may order the latter to fight out the
question between themselves. If they have agreed to arbitrate the matter then Clause
9 would not itself operate, since the party seeking interpleader relief would not be
making a claim which he had agreed to arbitrate.

59. We have not defined “‘interpleader”’, although some suggested that we should, given
that this is a legal term of art, which goes far beyond arbitration contexts.

Clause 11 Retention of Security where Admiralty Proceedings

Stayed
A2-014 60. This Clause is not intended to do more than re-enact the present statutory position
as found in section 26 of the Civil Jurisdiction and Judgments Act 1982.

61. Clauses 9 to 11 are, of course, mandatory.

Commencement of Arbitral Proceedings

Clause 12 Power of Court to Extend Time for Beginning

Arbitral Proceedings, etc.
A2-015 62. We have proposed a number of changes to the existing law.

63. The major change concerns the test that the court must apply before extending the
time.

64. ‘The power of the court to extend a contractual time limit which would otherwise bar
the claim first appeared in our law in section 16(6) of the Arbitration Act 1934, which
was re-enacted in section 27 of the Arbitration Act 1950.

65. From paragraph 33 of the Report of the MacKinnon Committee presented to

Parliament in March 1927 it can be seen that the reason for suggesting that the court
should have power to extend the time was that the vast majority of submissions to
arbitration are contained in printed forms of contract, which cannot be carefully
examined in the transaction of business and alteration of which it would be difficult
for most people to secure. The Committee concluded that it might be sound policy
to create a power to modify unconscionable provisions as regards common forms of
submission in printed forms. It is also clear from paragraph 34 of the Report that the
Committee had in mind cases where the time limit was very short, i.e. measured in
 Appendix 2 661

days. The Committee suggested that the test should be whether the time limit created
an “unreasonable hardship”.

66. As can be seen from the Notes on Clauses to the 1934 Act, it was later felt that since
the justification for giving the power was presumably either ignorance of the existence
of the provision in the contract, or the acceptance of the provision through undue
pressure by the other party, which could be the case whether or not the contract was
in a common form, the power should not be limited to such forms.

67. Section 27 of the 1950 Act, with its test of undue hardship, seems to many to have
been interpreted by the courts in a way hardly envisaged by those who suggested the
power in the first place. Indeed that interpretation seems to have changed over the
years: see the discussion in Mustill and Boyd, Commercial Arbitration (2nd ed.),
pp. 201-215. Some responses indicated dissatisfaction with the way the Courts were
using Clause 27 to interfere with the bargain that the parties had made. The present
legal position would seem to owe much to a time, now some 20 years ago, when the
courts were flirting with the idea that they enjoyed some general power of supervisory
jurisdiction over arbitrations.

68. The justification for time limits is that they enable commercial concerns (and indeed
others) to draw a line beneath transactions at a much earlier stage than ordinary
limitation provisions would allow. It should be mentioned, however, that other
responses suggested that the position presently reached by the courts should be
maintained.

69. The present Committee re-examined section 27 in the light of the underlying
philosophy of the Bill, namely that of party autonomy. This underlying philosophy
seems to have been generally welcomed in this country and abroad and of course it fits
with the general international understanding of arbitration. Party autonomy means,
among other things, that any power given to the court to override the bargain that the
parties have made must be fully justified. The idea that the court has some general
supervisory jurisdiction over arbitrations has been abandoned.

70. It seemed to us in today’s climate that there were three cases where the power could
be justified in the context of agreed time limits to bring a claim. These are, firstly,
where the circumstances are such as were outside the reasonable contemplation ofthe
parties when they agreed the provision in question and that it would be fair to extend
the time, secondly, where the conduct of one party made it unjust to hold the other
to the time limit, and thirdly, where the respective bargaining position of the parties
was such that it would again be unfair to hold one of them to the time limit.

gle The third of these cases seems to us to reflect the thinking of the MacKinnon
Committee, while the other two have developed through the courts’ interpretation of
section 27. However this third category is really an aspect of what nowadays would be
called ‘consumer protection”. This part of the Bill is not concerned with consumer
protection, for which provision is made elsewhere and in respect of which there is a
growing body of European law.

ee: In these circumstances it seemed to us to be appropriate to set out in this part of the
Bill the first and second of the cases we have described. Apart from anything else, this
will give the courts the opportunity to reconsider how to proceed in the light of the
philosophy underlying the Bill as a whole, namely that of party autonomy. As the
 662 Appendix 2

MacKinnon Committee itself intimated, great care must be taken before interfering
with the bargain that the parties have made.

It was suggested to the DAC that the principal matter to be taken into account by the
court should be the length of the contractual period in question. The DAC is of the
view that this is only one of several relevant matters, another factor being, for
example, the contemplation of the parties. For this reason, the DAC concluded that
a simple test of “substantial injustice”, without more, would not suffice.

TES There are some other changes.

i. Firstly, Clause 12(1)(b) contains a reference to other dispute resolution proce-

dures. We understand that there is an increasing use of provisions which call for
mediation and other alternative dispute resolution procedures to precede recourse
to arbitration, so that we thought it proper to add this to the other step covered
by the Clause, namely to begin arbitral proceedings. We do not intend to widen the
scope of the Clause beyond this, so that unless the step in question is one of the
two kinds described, the Clause will not operate. Thus this represents only a small
but we think logical extension to the present law.

ii. Secondly, it is made a pre-condition that the party concerned first exhausts any
available arbitral process for obtaining an extension of time. In the view of the
Committee it would be a rare case indeed where the court extended the time in
circumstances where there was such a process which had not resulted in an
extension, for it would in the ordinary case be difficult if not impossible to
persuade the court that it would be just to extend the time or unjust not to do so,
where by an arbitral process to which ex hypothes: the applying party had agreed,
the opposite conclusion had been reached.

ii. Thirdly, we have made any appeal from a decision of the court under this Clause
subject to the leave of that court. It seems to us that there should be this limitation,
and that in the absence of some important question of principle, leave should not
generally be granted. We take the same view in respect of the other cases in the Bill
where we propose that an appeal requires the leave of the court.

iv. Fourthly, whereas the existing statutory provision refers to terms of an agreement
that provide that claims shall be “barred’’, this has been extended to read “barred,
or the claimant’s right extinguished”’.

W- For obvious reasons, this Clause is mandatory.

Clauses 13 and 14 Application of Limitation Acts and

Commencement of Arbitral Proceedings
A2-016 = 76. The first of these provisions is designed to restate the present law. The reference to
the Foreign Limitation Periods Act 1984 avoids (subject to the provisions of that Act)
the imposition of an English limitation period where an applicable foreign law
imposes a different period. ‘The second provision reflects to a degree article 21 of the
Model Law, but sets out the various cases, including one not presently covered by the
law. It will be noted that we have used the word “matter” rather than the word
“disputes”. This is to reflect the fact that a dispute is not the same as a claim; cf
Mustill and Boyd, op.cit. at p. 29 and Commission for the New Towns v. Crudens (1995)
C.I.L.L. 1035. The neutral word ‘‘matter” will cover both, so that an arbitration
 Appendix 2 663

clause which refers to claims will be covered as well as one which refers to dis-
putes.

Vile Clause 13 is a mandatory provision.

The Arbitral Tribunal

Clause 15 The Arbitral Tribunal

78. Article 10(1) of the Model Law provides that the parties are free to determine the A2-017
number of arbitrators. We have included a like provision.

TD: Article 10(2) of the Model Law stipulates that failing such determination, the number
of arbitrators shall be three. This we have not adopted, preferring the existing English
rule that in the absence of agreement the default number shall be one. The employ-
ment of three arbitrators is likely to be three times the cost of employing one, and it
seems right that this extra burden should be available if the parties so choose, but not
imposed on them. The provision for a sole arbitrator also accords both with common
practice in this country, and the balance of responses the DAC received. The Model
Law default does not, of course, cater for the situation where there are more than two
parties to the arbitration.

Clause 16 Procedure for the Appointment of Arbitrators

80. Again we have had the Model Law (article 11) very much in mind in drafting these A2-018
provisions, though we have attempted to cater for more cases and also for the fact that
under our law, there can be either an umpire or a chairman. We should note that this
has caused some confusion abroad, particularly in the United States, where what we
would describe as a ‘“‘chairman” is called an “umpire”. In Clauses 20 and 21 we set
out the differences between these two which (in the absence of agreement between the
parties) is the present position under English law.

81. The time limits we have imposed for appointments we consider to be fair and
reasonable. They can be extended by the Court under Clause 79, but the power of the
court in this regard is limited as set out in that Clause. In the ordinary case we would
not expect the court to allow a departure from the Clause 16 time limits.

82. It might be noted that periods of 28 days, rather than 30 days (as in the Model Law)
have been used throughout the Bill, in order to reduce the likelihood of a deadline
expiring on a weekend.

Clause 17. Power in Case of Default to Appoint Sole Arbitrator

83. This Clause is intended to replace the present rules concerning the appointment of A2-019
a sole arbitrator where the other party is in default (section 7(b) of the 1950 Act). It
only applies to a two party case. We have stipulated that the party in default must not
only appoint his arbitrator within the specified period but also inform the other party
that he has done so. This in our view is a significant improvement on the present law,
where the defaulting party was under no obligation to say that he had made an
appointment. This was calculated to cause unnecessary delay, confusion and
expense.

84. Some of those responding objected to this Clause. The DAC, however, remains of the
view that this provision is an example of the Court supporting the arbitral process,
 664 Appendix 2

and reducing the opportunities available for a recalcitrant party. The DAC is advised
that section 7(b) of the 1950 Act is used a great deal, and that its very existence
constitutes a deterrent to those contemplating dilatory tactics. The alternative would
be to simply provide for recourse to court. This would be overly burdensome in most
cases, and is available, in any event, under the provisions of the Bill.

It has been suggested that the Bill should set out grounds upon which the court
should exercise its discretion in Clause 17(3). The DAC is of the view, however, that
this is best left for the courts to develop, given the specific circumstances of each case,
and in the light of the overall philosophy of the Bill.

86. One respondent queried the use of the word “‘refuses” in Clause 17(1). The advantage
of this is that if aparty does actually refuse to appoint an arbitrator, rather than simply
failing to do so, the non-defaulting party need not wait for the expiration of the
relevant time period within which the defaulting party may make such an appoint-
ment, but could use the mechanism in Clause 17 straight away.

Clause 18 Failure of Appointment Procedure

A2-020 87. Again we have had the Model Law in mind when drafting this provision, The starting
point is any agreement the parties may have made to deal with a failure of the
appointment procedure. In the absence of any such agreement, the court is given the
power to make appointments. This is a classic case of the court supporting and
helping to carry through the arbitration process.

88. It will be noted that we have given the court power to revoke any appointments already
made. This is to cover the case where unless the court took this step it might be
suggested thereafter that the parties had not been fairly treated, since one had his own
choice arbitrator while the other had an arbitrator imposed on him by the court in
circumstances that were no fault of his own. This situation in fact arose in France in
the Dutco case, where an award was invalidated for this reason.

89. The Model Law stipulates that there shall be no appeal from a decision of the court.
We have not gone as far as this, since there may well be questions of important general
principle which would benefit from authoritative appellate guidance.

Clause 19 Court to have regard to Agreed Qualifications

A2-021 90. This comes from article 11(5) of the Model Law, which itself seeks to preserve as
much of the parties’ agreement as possible.

Clauses 20 and 21 Chairman and Umpire

A2-022 OV The parties are, of course, free to make what arrangements they like about the
functions and powers of Chairmen or Umpires. We have set out what we believe to
be the position under English law in the absence of any such agreement. As we
understand the current position, in the absence of an agreement between the parties,
an umpire can neither take part nor attend an arbitration until the arbitrators have
disagreed.

. A cause of delay and expense often exists under our umpire system where the umpire
does not attend the proceedings and it is only at an advanced stage (when the
arbitrators disagree) that he takes over, for much that has gone on may have to be
repeated before him. Equally, the time and expense of an umpire may be wasted if he
 Appendix 2 665

attends but the arbitrators are able to agree on everything. We have decided that it
would be preferable to stipulate that (in the absence of agreement between the parties)
the umpire should attend the proceedings (as opposed to taking part in the proceed-
ings) and be supplied with the same documents and materials as the other arbitrators.
We hope, however, that common sense will prevail and that the parties will make
specific agreement over this question, tailored to the circumstances of the particular
case.

98: Subsection 21(4) caused some concern amongst a few respondents, but this subsec-
tion simply reflects what is understood to be the current position.

on We should record that we considered whether the peculiarly English concept of an

umpire should be swept away in favour of the more generally used chaired tribunal.
As we have pointed out above, in the United States what we would describe as a
chairman is called an umpire. In the end we decided not to recommend this, and to
continue to provide default provisions for those who wanted to continue to use this
form of arbitral tribunal.

Clause 22 Decision-making where no Chairman or Umpire

o>: We decided to include this situation for the sake of completeness, though the default A2-023
provision can only work if there is unanimity or a majority. If there is neither, then
it would appear that the arbitration agreement cannot operate, unless the parties can
agree, or have agreed, what is to happen.

Clause 23 Revocation of Arbitrator’s Authority

96. Statutory provisions making it impossible unilaterally to revoke the authority of an A2-024
arbitrator have existed since 1833. The present Clause is designed to reflect the
current position, save that we have imposed a writing requirement and thought it
helpful to make express reference to arbitral institutions etc. These of course only
have such powers as the parties have agreed they shall have, so that strictly this
provision is not necessary, but we consider that an express reference makes for
clarity.

oF Some of those responding suggested that the parties’ right to agree to revoke an
arbitral appointment should be limited (e.g. that court approval should be required in
every case). The DAC has not adopted these suggestions since any tribunal is properly
regarded as the parties’ tribunal and to do so would derogate from the principle of
party autonomy.

98. It will be seen that various terms are used in the Bill with respect to the termination
of an arbitral appointment, such as ‘“‘removal” and “revocation of authority”. Differ-
ent terms have been adopted simply as a matter of correct English usage. The
difference in terms is not intended to be of any legal significance.

99. Subsection 23(4). Whilst any agreement as to an arbitration must be in writing, as

defined earlier, the DAC is of the view that it is impracticable to impose a writing
requirement on an agreement to terminate an arbitration. Parties may well simply
walk away from proceedings, or allow the proceedings to lapse, and it could be
extremely unfair if one party were allowed to rely upon an absence of writing at some
future stage. Where a Claimant allows an arbitration to lapse, Clause 41(3) may be
utilised.
 666 Appendix 2

Clause 24 Power of Court to Remove Arbitrator

A2-025 100. We have set out the cases where the court can remove an arbitrator.

101. The Model Law (article 12) specifies justifiable doubts as to the independence (as well
as impartiality) of an arbitrator as grounds for his removal. We have considered this
carefully, but despite efforts to do so, no-one has persuaded us that, in consensual
arbitrations, this is either required or desirable. It seems to us that lack of independ-
ence, unless it gives rise to justifiable doubts about the impartiality of the arbitrator,
is of no significance. The latter is, of course, the first of our grounds for removal. If
lack of independence were to be included, then this could only be justified if it
covered cases where the lack of independence did not give rise to justifiable doubts
about impartiality, for otherwise there would be no point including lack of independ-
ence as a separate ground.

102. We can see no good reason for including “‘non-partiality” lack of independence as a
ground for removal and good reasons for not doing so. We do not follow what is meant
to be covered by a lack of independence which does not lead to the appearance of
partiality. Furthermore, the inclusion of independence would give rise to endless
arguments, as it has, for example, in Sweden and the United States, where almost any
connection (however remote) has been put forward to challenge the “independence”
of an arbitrator. For example, it is often the case that one member of a barristers’
Chambers appears as counsel before an arbitrator who comes from the same Cham-
bers. Is that to be regarded, without more, as a lack of independence justifying the
removal of the arbitrator? We are quite certain that this would not be the case in
English law. Indeed the Chairman has so decided in a case in Chambers in the
Commercial Court. We would also draw attention to the article “‘Barristers’ Inde-
pendence and Disclosure” by Kendall in (1992) 8 Arb. Int. 287. We would further
note in passing that even the oath taken by those appointed to the International Court
of Justice; and indeed to our own High Court, refers only to impartiality.

103. Further, there may well be situations in which parties desire their arbitrators to have
familiarity with a specific field, rather than being entirely independent.

104. We should emphasise that we intend to lose nothing of significance by omitting

reference to independence. Lack of this quality may well give rise to justifiable doubts
about impartiality, which is covered, but if it does not, then we cannot at present see
anything of significance that we have omitted by not using this term.

105. We have included, as grounds for removal, the refusal or failure of an arbitrator
properly to conduct the proceedings, as well as failing to use all reasonable despatch
in conducting the proceedings or making an award, where the result has caused or will
cause substantial injustice to the applicant. We trust that the courts will not allow the
first of these matters to be abused by those intent on disrupting the arbitral process.
To this end we have included a provision allowing the tribunal to continue while an
application is made. There is also Clause 73 which effectively requires a party to “put
up or shut up” if a challenge is to be made.

106. We have every confidence that the courts will carry through the intent of this part of
the Bill, which is that it should only be available where the conduct of the arbitrator
is such as to go so beyond anything that could reasonably be defended that substantial
injustice has resulted or will result. The provision is not intended to allow the court
to substitute its own view as to how the arbitral proceedings should be conducted.
 Appendix 2 667

Thus the choice by an arbitrator ofa particular procedure, unless it breaches the duty
laid on arbitrators by Clause 33, should on no view justify the removal of an arbitrator,
even if the court would not itself have adopted that procedure. In short, this ground
only exists to cover what we hope will be the very rare case where an arbitrator so
conducts the proceedings that it can fairly be said that instead of carrying through the
object of arbitration as stated in the Bill, he is in effect frustrating that object. Only
if the court confines itself in this way can this power of removal be justified as a
measure supporting rather than subverting the arbitral process.

107. We have also made the exhaustion ofany arbitral process for challenging an arbitrator
a pre-condition to the right to apply to the court. Again it will be a very rare case
indeed where the court will remove an arbitrator notwithstanding that that process
has reached a different conclusion.

108. Ifan arbitrator is removed by the court, we have given the court power to make orders
in respect of his remuneration. We would expect this power to be exercised where the
behaviour of the arbitrator is inexcusable to the extent that this should be marked by
depriving him of all or some of his fees and expenses. This subsection is also the
subject of a supplementary recommendation in Chapter 6 below.

109. As a matter of justice, we have stipulated that an arbitrator is entitled to be heard on

any application for his removal.

110. This is a mandatory provision. It seems to us that an agreement to contract out of the
cases we specify would really be tantamount to an agreement to a dispute resolution
procedure that is contrary to the basic principles set out in Clause 1.

Clause 25 Resignation of Arbitrator

Hale 'n theory it could be said that an arbitrator cannot unilaterally resign if this conflicts A2-026
with the express or implied terms of his engagement. However, as a matter of practical
politics an arbitrator who refuses to go on cannot be made to do so, though of course
he may incur a liability for breach of his agreement to act.

ie, In this Clause we have given an arbitrator who resigns the right to go to the court to
seek relief from any liability incurred through resigning and to make orders relating
to his remuneration and expenses, unless the consequences of resignation have been
agreed with the parties (e.g. by virtue of having adopted institutional rules).

LS: We have chosen the words of subsection (1) with care so that the agreement referred
to is confined to an agreement as to the consequences of resignation. A simple
agreement not to resign (or only to resign in certain circumstances) with no agree-
ment as to what will happen if this promise is broken is not within the subsection.
This has to be so since otherwise (by virtue of subsection (2)), subsections (3) and (4)
would never or hardly ever operate, for the arbitrator will not be under any liability
or at risk as to his fees or expenses unless he is in breach by resigning.

ieee In the July draft we suggested a provision which would have entitled the court to
grant relief in all circumstances including those where the arbitrator had made an
agreement as to the consequences of his resignation. However, as the result of a
response that we received we have concluded that where the parties have agreed with
an arbitrator on the consequences it would be wrong to give the court a power to
adjust the position.
 668 Appendix 2

Tiss The reason we propose this is that circumstances may well arise in which it would be
just to grant such relief to a resigning arbitrator. For example, the arbitrator may
(reasonably) not be prepared to adopt a procedure agreed by the parties (1.e. under
Clause 34) during the course of an arbitration, taking the view that his duty under
Clause 33 conflicts with their suggestions (the relationship between the duty of
arbitrators in Clause 33 and the freedom of the parties in Clause 34, is discussed in
more detail below). Again, an arbitration may drag on for far longer than could
reasonably have been expected when the appointment was accepted, resulting in an
unfair burden on the arbitrator. In circumstances where the court was persuaded that
it was reasonable for the arbitrator to resign, it seems only right that the court should
be able to grant appropriate relief.

Clause 26 Death of Arbitrator or Person Appointing Him

A2-027 116. This Clause complements Clause 8 and is included for the same reason. Clause 26(1)
is mandatory—it is difficult to see how parties could agree otherwise.

Clause 27 Filling of Vacancy, etc.

A2-028 Tae This Clause reflects article 15 of the Model Law, but also deals with certain other
important ancillary matters. It should be noted that we do not propose to re-enact the
power given to the court under section 25 of the Arbitration Act 1950 to fill a vacancy
created by its removal of an arbitrator. It seems to us that (in the absence of agreement
between the parties) it is preferable for the original appointment procedure to be used,
for otherwise (as in the Dutco case mentioned above) it might be argued that the
parties were not being treated equally.

118. We have given the tribunal the right (when reconstituted) to determine to what extent
the previous proceedings should stand, though we have also made clear that this does
not affect any right a party may have to challenge what has happened.

ULOF Further, we have provided in Clause 27(5) that the fact of an arbitrator ceasing to hold
office will not affect any appointment made by him (whether alone or jointly) of
another arbitrator, unless the parties have otherwise agreed pursuant to Clause
27(1)(c).

Clause 28 Joint and Several Liability of Parties to Arbitrators

for Fees and Expenses
A2-029 120. Arbitration proceedings necessarily involve the incurring of expenditure. The arbi-
trators have to be paid, and the parties incur expense in presenting their cases to the
tribunal. The issue of costs involves at least three quite discrete elements:

i. As a matter of general contract law, arbitrators, experts, institutions and any other
payees whatsoever are entitled to be paid what has been agreed with them by any
of the parties. Therefore, for example, if a party appoints an arbitrator for an
agreed fee, as a matter of general contract law (rather than anything in this Bill),
that arbitrator is entitled to that fee.
i. It is generally accepted that all parties are jointly and severally liable for the fees
of an arbitrator. This is an issue as to the entitlement of arbitrators, and as such
is quite distinct from the third element.
ii. As in’ court litigation, when one party is successful, that party should normally
recover at least a proportion of his costs. This issue, being where the burden of
costs should lie, is an issue as between the parties.
 Appendix 2 669

VALE The Bill contains provisions as to costs and fees in two separate parts: the joint and
several liability owed by the parties to the arbitrators (the second element) is
addressed in this clause, whilst the third element (i.e. the responsibility for costs as
between the parties) is addressed in Clauses 59-65. The first element, being a matter
of general contract law, is not specifically addressed by either set of provisions, but is
preserved in both. It is extremely important to distinguish between these provi-
sions.

22 Clause 28 is concerned with the rights of the arbitrators in respect of fees and
expenses. As subsection (5) makes clear, and as explained above, this provision is not
concerned with which of the parties should (as between themselves) bear these costs
as the result of the arbitration, which is dealt with later in the Bill, nor with any
contractual right an arbitrator may have in respect of fees and expenses.

123. As we understand the present law, the parties are jointly and severally liable to the
arbitrator for his fees and expenses. The present position seems to be that if these are
agreed by one party, the other party becomes liable, even if he played no part in
making that agreement; and circumstances may arise in which that party is unable to
obtain a reduction of the amount by taxation. It seems to us that whilst arbitrators
should be protected by this joint and several liability ofthe parties, a potentially unfair
result must be avoided: a party who never agreed to the appointment by another party
of an exceptionally expensive arbitrator should not be held jointly and severally liable
for that arbitrator’s exceptional fees. To this end, we have stipulated, in Clause 28(1),
that a party’s joint and several liability to an arbitrator only extends to “reasonable
fees”. Of course, if aparty has agreed an exceptional fee with an arbitrator, that party
may still be pursued by that arbitrator, under general contract law, which is preserved
in Clause 28(5).

124. We have proposed a mechanism to allow a party to go to the court if any question
arises as to the reasonableness of the arbitrator’s charges. The court is empowered to
adjust fees and expenses even after they have been paid, since circumstances may well
arise in which a question about the level of fees and expenses only arises after payment
has been made. For example, a large advance payment may be made at a time when
it is considered that the arbitration will take a long time, but this does not turn out
to be the case. However, the court must be satisfied that it is reasonable in the
circumstances to order repayment. Thus an applicant who delays in making an
application is likely to receive short shrift from the court, nor is the court likely to
order repayment where the arbitrator has in good faith acted in such a way that it
would be unjust to order repayment. It seems to us that it 1s necessary to set out
expressly in the Bill that the power of the court extends to dealing with fees and
expenses already paid, since otherwise there could be an argument that this power is
confined to fees and expenses yet to be paid.

These provisions are extended by subsection (6) to include an arbitrator who has
ceased to act and an umpire who has not replaced the other arbitrators. An arbitrator
may cease to act through the operation of Clauses 23 to 26, or if an umpire takes over
following a disagreement.

126. The liability in Clause 28(1) is to “the parties’. It seems to us to follow that a person
who has not participated at all, and in respect of whom it is determined that the
arbitral tribunal has no jurisdiction, would not be a “party” for the purposes of this
clause (cf Clause 72). More difficult questions may well arise in respect of persons
 670 Appendix 2

who have participated, for there the doctrine of Kompetenz-Kompetenz (Clauses 30

and 31) may have to be weighed against the proposition that a party can hardly be
under any liability in respect of the fees and expenses of the tribunal which he has
successfully established should not have been acting at all on the merits of the dis-
pute.

127. It is to be noted that arbitrators’ fees and expenses include, by virtue of Clause 37(2),
the fees and expenses of tribunal appointed experts, etc.

128. It seems that the present joint and several liability of the parties to an arbitrator for
his fees may rest on some implied contract said to exist between them. Be this as it
may, such an implied contract (in so far as it related to fees and expenses) would not
survive by virtue of Clause 81 of this Bill, because this only saves rules of law which
are consistent with Part I. Any implied contract imposing a liability for more than
reasonable fees and expenses would clearly be inconsistent with Clause 28(1). Fur-
thermore, since Clause 28(1) gives a statutory right there remains no good reason for
any implied contractual right. As stated above, any specific contract would, however,
of course be preserved by Clause 28(5).

IPA). Contrary to some suggestions made to us, it seems to us that rights of contribution
between the parties in relation to their statutory liability under Clause 28(1) can best
be left to the ordinary rules which relate to joint and several liability generally.

130. Clause 28 is made mandatory, since otherwise the parties could by agreement between
themselves deprive the arbitrators of what seems to us to be a very necessary pro-
tection.

Clause 29 Immunity of Arbitrators

A2-030 13k Although the general view seems to be that arbitrators have some immunity under the
present law, this is not entirely free from doubt. We were firmly of the view that
arbitrators should have a degree of immunity, and most (though not all) the responses
we received expressed the same view.

WB. The reasons for providing immunity are the same as those that apply to judges in our
courts. Arbitration and litigation share this in common, that both provide a means of
dispute resolution which depends upon a binding decision by an impartial third party.
It is generally considered that an immunity is necessary to enable that third party
properly to perform an impartial decision making function. Furthermore, we feel
strongly that unless a degree of immunity is afforded, the finality of the arbitral
process could well be undermined. The prospect of a losing party attempting to
re-arbitrate the issues on the basis that a competent arbitrator would have decided
them in favour of that party is one that we would view with dismay. The Bill provides
in our view adequate safeguards to deal with cases where the arbitral process has gone
wrong.

hs. This is a mandatory provision. Given the need and reason for immunity, it seems to
us to follow that as a matter of public policy, this should be so.

134. The immunity does not, of course, extend to cases where it is shown that the
arbitrator has acted in bad faith. Our law is well acquainted with this expression and
although we considered other terms, we concluded that there were unlikely to be any
 Appendix 2 671

difficulties in practice in using this test: see, for example, Melton Medes Ltd v.
Securities and Investment Board [1995] 3 All E.R.

135. Subsection 29(3). There was a concern that if a provision such as this was not
included, Clause 25, when read together with Clause 29, could be said to preclude a
claim against an arbitrator for resigning in breach of contract and similarly a defence
(based on resignation) to a claim by an arbitrator for his fees, unless “had faith” is
proved.

136. Since the publication of the final draft of the Bill, we have concluded that the court
should be given power to remove or modify the immunity as it sees fit when it removes
an arbitrator. We consider this further in Chapter 6 below.

Jurisdiction of the Arbitral Tribunal

Clause 30 Competence of Tribunal to Rule on its own

Jurisdiction
Wei7. This Clause states what is called the doctrine of ‘““Kompetenz-Kompetenz”. This is an A2-031
internationally recognized doctrine, which is also recognized by our own law (e.g.
Christopher Brown v. Genossenschaft Osterreichlischer Waldbesitzer [1954] 1 Q.B. 8),
though this has not always been the case.

138. The great advantage of this doctrine is that it.avoids delays and difficulties when a
question is raised as to the jurisdiction of the tribunal. Clearly the tribunal cannot be
the final arbiter of a question of jurisdiction, for this would provide a classic case of
pulling oneself up by one’s own bootstraps, but to deprive a tribunal of a power
(subject to court review) to rule on jurisdiction would mean that a recalcitrant party
could delay valid arbitration proceedings indefinitely by making spurious challenges
to its jurisdiction.

139 The Clause and the following Clause are based on article 16 of the Model Law, but
unlike that model we have not made this provision mandatory so that the parties, if
they wish, can agree that the tribunal shall not have this power. We have also spelt out
what we mean by “substantive jurisdiction”.

Clause 31 Objection to Substantive Jurisdiction of Tribunal

140. In this Clause we set out how a challenge to the jurisdiction can be made, and the A2-032
circumstances in which it must be made (following article 16 of theModel Law). This
reflects much of the Model Law but we have, for example, refrained from using
expressions like “submission of the statement of defence” since this might give the
impression, which we are anxious to dispel, that every arbitration requires some
formal pleading or the like.

ae The Clause, in effect, sets out three ways in which the matter may proceed.

i. The first is that the tribunal may make an award on the question of jurisdiction.
If it does so then that award may be challenged by a party under Clause 67.

ii. The second way is for the tribunal to deal with the question ofjurisdiction in its
award on the merits. Again on the jurisdiction aspect the award may be challenged
under Clause 67.
672 Appendix 2

We have provided these two methods because, depending on the circumstances, the
one or the other may be the better course to take, bearing in mind the duty (in Clause
33) to adopt procedures suitable to the circumstances of the particular case, avoiding
unnecessary delay or expense.

iii. The third way of proceeding is for an application to be made to the court before
any award (pursuant to Clause 32). Again this third course is designed to achieve
ihe same objective (albeit in limited circumstances). For example, cases arise where
a party starts an arbitration but the other party, without taking part, raises an
objection to the jurisdiction of the tribunal. In such circumstances, it might very
well be cheaper and quicker for the party wishing to arbitrate to go directly to the
court to seek a favourable ruling on jurisdiction rather than seeking an award from
the tribunal. Such an approach would be very much the exception, and, to this
end, Clause 32 is narrowly drawn. In this connection it must be remembered that
a party who chooses not to take any part in an arbitration cannot in justice be
required to take any positive steps to challenge the jurisdiction, for to do otherwise
would be to assume against that party (before the point has been decided) that the
tribunal has jurisdiction. We return to this topic when considering Clause 72.

Lei Article 16(3) of the Model Law provides that the arbitral tribunal may rule on a plea
as to jurisdiction either as a preliminary question or in an award on the merits. The
DAC is of the view that it is unnecessary to introduce a new concept of a “preliminary
ruling’’, which is somehow different from an award. Clause 31(4) therefore only refers
to awards. This has the advantage that awards on jurisdiction will have the benefit of
those provisions on awards generally (e.g. costs, lien, reasons, additional awards, etc.),
and, if appropriate, may be enforced in the same way as any other award.

143. A challenge to jurisdiction may well involve questions of fact as well as questions of
law. Since the arbitral tribunal cannot rule finally on its own jurisdiction, it follows
that both its findings of fact and its holdings of law may be challenged. The regime
for challenging such awards is set out in Clause 67.

144. Clause 31(1) replaces the requirement set out in article 16(2) of the Model Law (that
a challenge to the overall jurisdiction of the tribunal must be raised no later than the
submission of a statement of defence) with a requirement that such an objection be
raised no later than the time a party takes the first step in the proceedings to contest
the merits of any matter in relation to which he challenges the tribunal’s jurisdiction.
This allows for alternative procedures where there is no “‘statement of defence” as
such,

aie) Clause 31 is a mandatory provision. Under Clause 30, of course, the parties can agree
that the tribunal shall not have power to rule on its own jurisdiction, but while this
means (as subsection (4) points out) that the tribunal cannot then make an award on
jurisdiction, the compulsory nature of Clause 31 means that the objection must be
raised as there stipulated. It seems to us that this is highly desirable by way of support
for the object of arbitration as set out in Clause 1.

146. It has been suggested to the DAC that there should be a mechanism whereby an
objecting party, or even a non-objecting party, could require the tribunal forthwith to
make an award as to jurisdiction, rather than merely incorporating a ruling in an
award on the merits. The DAC disagrees with this. Unless the parties agree otherwise,
the choice as to which course to take will be left with the tribunal, who will decide
 Appendix 2 673

what is to be done consistent with their duty under Clause 33 (see below). Indeed, in
some cases it may be simply impracticable to rule on jurisdiction, before determining
merits. If, however, the parties agree which course is to be taken, and if, of course,
their agreement is effective (i.e. it does not require the tribunal to breach its
mandatory duty under Clause 33) then the provision under discussion requires the
tribunal to take the course chosen by the parties.

Clause 32 Determination of Preliminary Point of Jurisdiction

147. In this Clause we have set out the procedure for the third of the possible ways of A2-033
dealing with a challenge to the jurisdiction. As stated above, this Clause provides for
exceptional cases only: it is not intended to detract from the basic rule as set out in
Clause 30. Hence the restrictions in Clause 32(2), and the procedure in Clause 32(3).
It will be noted that we have required either the agreement of the parties, or that the
court is satisfied that this is, in effect, the proper course to take. It is anticipated that
the courts will take care to prevent this exceptional provision from becoming the
normal route for challenging jurisdiction. Since this Clause concerns a power exerci-
sable by the court in relation to the jurisdiction of the tribunal, it is in our view
important enough to be made mandatory.

148. Under this Clause the tribunal may continue the arbitral proceedings and make an
award whilst the application to the Court is pending. Thus a recalcitrant party will not
be able to mount spurious challenges as a means of delaying the arbitral process.
Under subsection (5) of the preceding Clause the tribunal can, of course (and must
if the parties agree) stay the arbitral proceedings whilst an application is made. Which
course the tribunal takes (where it has power to choose) will of course depend once
again on what it sees its Clause 33 duty to be.

149. The right of appeal from court rulings is limited in the way set out in the Clause.

The Arbitral Proceedings

Clause 33. General Duty of the Tribunal

150. This is one of the central proposals in our Bill (grounded on article 18 of the Model A2-034
Law). It is a mandatory provision, since, as is explained below, we fail to see how a
proceeding which departed from the stipulated duties could properly be described as
an arbitration. We endeavour to set out, in the simplest, clearest terms we have been
able to devise, how the tribunal should approach and deal with its task, which is to do
full justice to the parties. In the following Clauses we set out in detail the powers
available to the tribunal for this purpose.

151. It has been suggested that the generality of Clause 33 may be problematic: that it may
be an invitation to recalcitrant parties to launch challenges, or that vagueness will give
rise to arguments. The advantage of arbitration is that it offers a dispute resolution
system which can be tailored to the particular dispute to an extent which litigation
finds it difficult to do. Thus depending on the nature of the dispute, there will be
numerous ways in which the arbitration can be conducted. It is quite impossible to list
all the possible variants and to set out what may or may not be done. Indeed any
attempt to do so would defeat one of the main purposes of the Bill, which is to
encourage arbitral tribunals not slavishly to fellow court or other set procedures. It
follows that the only limits can be those set out in the present clause. It is to be hoped
 674 Appendix 2

that the Courts will take a dim view of those who try to attack awards because of
suggested breaches of this clause which have no real substance. At the same time, it
can hardly be suggested that awards should not be open to attack when the tribunal
has not acted in accordance with the principles stated.

W522, It has further been suggested that this part of the Bill will cause the demise of the
amateur arbitrator. If by this is meant the demise of people who purport to act as
arbitrators but who are either unable or unwilling (or both) to conduct the proceed-
ings in accordance with what most would regard as self-evident rules of justice, then
we indeed hope that this will be one of the results. But since these rules of justice are
generally accepted in our democratic society, and are not merely theoretical considera-
tions that concern lawyers alone, we can see no reason why the Bill should discourage
anyone who is ready willing and able to apply them. Indeed we consider that the Bill
will encourage and support all such people.

15S. Sometimes the parties to an arbitration employ lawyers who seek, in effect, to bully
a non-legal arbitrator into taking a course of action which is against his better
instincts, by seeking to blind him with legal ‘“‘science”’ to get their way. Again, in some
circles it is thought that somehow the procedures in an arbitration should be modelled
on court procedures, and that to adopt other methods would be ‘“‘misconduct”’ (an
expression that the Bill does not use) on the part of the arbitrator. This part of the Bill
is designed to prevent such bullying and to explode the theory that an arbitration has
always to follow court procedures. If an arbitrator is satisfied that the way he wants to
proceed fulfils his duty under this Clause and that the powers he wants to exercise are
available to him under the following Clauses, then he should have the courage of his
own convictions and proceed accordingly, unless the parties are agreed that he should
adopt some other course.

The Relationship Between Clauses 1(b), 33 and 34(1)

A2-035 154. It has been suggested to us there could be a conflict between:

i. the mandatory duty cast on arbitrators by Clause 33 and

ii. the principle of party autonomy in Clause 1(b) and the proviso in Clause 34(1).

As we explain below, the DAC does not consider that there is any inconsistency
between these two principles.

Bay, Under the principle of party autonomy, the parties are free to agree upon anything to
do with the arbitration, subject only to such safeguards as are necessary in the public
interest (Clause 1(b)). The mandatory provisions set out those matters which have
effect notwithstanding any agreement to the contrary: see Clause 4. It seems to us that
the public interest dictates that Clause 33 must be mandatory, i.e. that the parties
cannot effectively agree to dispense with the duty laid on arbitrators under Clause 33.
In other words, they cannot effectively agree that the arbitrators can act unfairly, or
that the arbitrators can be partial, or that the arbitrators can decide that the parties (or
one of them) should not have a reasonable opportunity of putting his case or
answering that of his opponent, or indeed that the arbitrators can adopt procedures
that are unsuitable for the particular circumstances of the case or are unnecessarily
slow or expensive, so that the means for resolving the matters to be determined is
unfair. It is, of course, extremely unlikely in the nature of things that the parties would
wish deliberately to make such bizarre agreements, but were this to happen, then it
 Appendix 2 675
seems to us that such agreements should be ineffective for the purposes of this Bill,
i.e. not binding on the parties or the tribunal.

However, a situation could well arise in practice in cases where the parties are agreed
on a method of proceeding which they consider complies with the first of the general
principles set out in Clause 1 (and which therefore the tribunal could adopt con-
sistently with its duty under Clause 33) but the tribunal takes a different view, or
where they are agreed in their opposition to a method of proceeding which the
tribunal considers should be adopted in order to perform its Clause 33 duty.

157. In our view it is neither desirable nor practicable to stipulate that the tribunal can
override the agreement of the parties. It is not desirable, because the type of
arbitration we are discussing is a consensual process which depends on the agreement
of the parties who are surely entitled (if they can agree) to have the final say on how
they wish their dispute to be resolved. It is not practicable, since there is no way in
which the parties can be forced to adopt a method of proceeding if they are agreed
that this is not the way they wish to proceed. The latter is the case even if it could be
established that their agreement was ineffective since it undermined or prevented
performance of the duty made mandatory by Clause 33.

158. A party would be unable to enforce an ineffective agreement against the other parties,
nor would such an agreement bind the tribunal, but the problem under discussion
only exists while the parties are in fact at one, whether or not their agreement is legally
effective.

159% In circumstances such as these, the tribunal (assuming it has failed to persuade the
parties to take a different course) has the choice of adopting the course preferred by
the parties or of resigning. Indeed, resignation would be the only course if the parties
were in agreement in rejecting the method preferred by the tribunal, and no other way
of proceeding was agreed by them or considered suitable by the tribunal.

160. We have stipulated elsewhere in the Bill that the immunity we propose for arbitrators
does not extend to any liability they may be under for resigning (Clause 29) though
under Clause 25 they may seek relief in respect of such liability from the court. The
reason for the limitation on immunity is that cases may arise where the resignation of
the arbitrator is wholly indefensible and has caused great delay and loss. In our view
Clause 25 would suffice to protect arbitrators who resigned because they reasonably
believed that the agreement of the parties prevented them from properly performing
their Clause 33 duty. Furthermore, arbitrators could always stipulate for a right to
resign in such circumstances as a term of their appointment.

161. If, on the other hand, the tribunal adopted a method of proceeding agreed by the
parties, it seems to us that none of the parties could afterwards validly complain that
the tribunal had failed in its Clause 33 duty, since the tribunal would only have done
what the parties had asked it to do. Again, the fact that as between the parties such
an agreement may have been ineffective as undermining or preventing performance
of the Clause 33 duties seems to us to be wholly irrelevant. It could of course be said
that the tribunal had breached its Clause 33 duty, but this would have no practical
consequences since the parties themselves would have brought about this state of
affairs, and would therefore be unable to seek any relief in respect of it.
 676 Appendix 2

162. Some people have expressed concern that there is a danger that lawyers will agree
between themselves a method of proceeding which the tribunal consider to be
unnecessarily long or expensive. However, if a tribunal considered, for example, that
lawyers were trying either deliberately to “churn” the case for their own private
advantage or were simply but misguidedly seeking to adopt unnecessary procedures,
etc., the obvious solution would be to ask them to confirm that their respective clients
had been made aware of the views of the tribunal but were nevertheless in agreement
that the course proposed by their lawyers should be adopted. At the end of the day,
however, the fact remains that the only sanction the arbitrators have is to resign.

. In summary, therefore, we consider that the duty of the arbitrators under Clause 33
and the right of the parties to agree how the arbitration should be conducted do fit
together. Under Clause 33 the tribunal have the specified duties. Under Clause 34
therefore, the tribunal must decide all procedural and evidential matters, subject to
the right of the parties to agree any matter. If the parties reach an agreement on how
to proceed which clashes with the duty of the tribunal or which the tribunal
reasonably considers does so, then the arbitrators can either resign and have the
protection of Clause 25, or can adopt what the parties want and will not afterwards
be liable to the parties for doing so.

Further Points
A2-036 164. In this Clause we have provided that the tribunal shall give each party a “reasonable
opportunity” of putting his case and dealing with that of his opponent. Article 18 of
the Model Law uses the expression “full opportunity”.

165. We prefer the word “reasonable” because it removes any suggestion that a party is
entitled to take as long as he likes, however objectively unreasonable this may be. We
are sure that this was not intended by those who framed the Model Law, for it would
entail that a party is entitled to an unreasonable time, which justice can hardly require.
Indeed the contrary is the case, for an unreasonable time would ex Aypothesi mean
unnecessary delay and expense, things which produce injustice and which accordingly
would offend the first principle of Clause 1, as well as Clauses 33 and 40.

Clause 34 Procedural and Evidential Matters

A2-037 166. We trust that the matters we have listed in this Clause (which are partly drawn from
articles 19, 20, 22, 23 an 24 of the Model Law) are largely self-evident. We have
produced a non-exhaustive checklist because we think it will be helpful both to
arbitrating parties and to their arbitrators. We cannot emphasise too strongly that one
of the strengths of the arbitral process is that it is able much more easily than any
court system to adapt its procedures to suit the particular case. Hence we have spelt
this out as a duty under the preceding Clause. The list of powers helps the tribunal
(and indeed the parties) to choose how best to proceed, untrammelled by technical or
formalistic rules.

167. Some ofthose responding suggested that we should include a special code to deal with
the arbitration of small claims. We have not adopted this suggestion for the very
reason we have just stated. Any such code would have to have detailed rules, arbitrary
monetary or other limits and other complicated provisions. In our view, proper
adherence to the duties in Clause 33 will achieve the same result. A small claim will
simply not need all the expensive procedural and other paraphernalia which might be
required for the resolution of some huge and complicated international dispute.
 Appendix 2 677

168. Furthermore, we consider that associations and institutions concerned with specific
areas of trade, etc. can play a very significant part in formulating rules and procedures
for arbitrating disputes concerning their members. Such bodies have the detailed
knowledge and experience required to enable them properly to address this task, in
relation both to small claims and otherwise. We feel strongly that it would be wrong
for a Bill of the present kind to seek to lay down a rigid structure for any kind of case;
and that different methods must be developed to suit different circumstances, by
arbitral tribunals as well as those who have the necessary practical knowledge of those
circumstances. Finally, of course, the Bill in no way impinges upon small claims
procedures developed for use through the court system.

169. Subsection (a). Whilst article 20(1) of the Model law states that, in the absence of the
agreement of the parties, “the place of arbitration shall be determined by the arbitral
tribunal having regard to the circumstances of the case, including the convenience of
the parties”, subsection 34(2)(a) does not state that the tribunal should have the
convenience of the parties in mind, given that this is a consideration that is really
subsumed under the general duty of the Tribunal in Clause 33, and, further, because
the DAC was of the view that like considerations apply to other parts of Clause 34,
such as subsection (b), even though the Model Law does not appear to reflect this.
Unlike the Model Law, subsection (a) also refers to ‘“‘when”’, as well as “‘where’’.

170. Subsection (f) makes it clear that arbitrators are not necessarily bound by the technical
rules of evidence. In his 1993 Freshfields Lecture ((1994) Arbitration International Vol.
10, p. 1), Lord Steyn questioned why the technical rules of evidence should apply to
arbitration, even if (as he doubted) there was authority for this. This provision
clarifies the position. It is to be noted that Clause 34(2)(f) helps to put an end to any
arguments that it is a question of law whether there is material to support a finding
of fact.

7A Subsection (g). Some anxiety was expressed at the power to act inquisitorially, to be
found in subsection (g), on grounds that arbitrators are unused to such powers and
might, albeit in good faith, abuse them.

172. We do not share this view. Once again it seems to us that provided
the tribunal in
exercising its powers follows its simple duty as set out in Clause 33
(and subsection
(2) of this Clause tells the tribunal that this is what they must do) then
in suitable cases
an inquisitorial approach to all or some of the matters involved may
well be the best
way of proceeding. Clause 33, however, remains a control, such that, for example, if
an arbitrator takes the initiative in procuring evidence, he must give all parties a
reasonable opportunity of commenting on it.

iL7S). A number of arbitrators who responded to our July 1995 draft suggested that the
tribunal should be entitled to have the last word 7.e. should be given the power to
override the agreement of the parties to follow a different course. The interrelation-
ship ofthe tribunal’s duties and party autonomy has already been discussed above. As
is clear from that discussion, we disagree with this view for the following reasons:

i. To give the tribunal such a power would be contrary to article 19 of the Model
Law. It would also be contrary to the present position under English law.
ii. To allow the tribunal to override the agreement of the parties would to our minds
constitute an indefensible inroad into the principle of party autonomy, upon which
the Bill is based.
678 Appendix 2

iii. It is difficult to see how such a power could be backed by any effective sanction.
If the parties agree not to adopt the course ordered by the tribunal, there is
nothing the tribunal can do except resign.

iv. It seems to us that the problem is more apparent than real. In most cases the
parties rely on the tribunal to decide how to conduct the case and do not sit down
and agree between themselves how it is to be done. In order to reflect what actually
happens in practice we have accordingly reversed the way many of the other
Clauses begin and stated that it is for the tribunal to decide all procedural and
evidential matters, subject to the right of the parties to agree any matter. In our
view, however, since arbitration is the parties’ own chosen method of dispute
resolution, we cannot see why they should be deprived of the right to decide what
form the arbitration should take.

Wien As we have made clear above, it is of course open to those who frame rules for
arbitration which the parties incorporate into their agreement, to stipulate that the
tribunal is to have the last word, and likewise arbitrators can stipulate this as a term
of their agreement to act, though once again there would be no means, apart from
persuasion or the threat of resignation, of enforcing such a stipulation if the parties
later jointly took a different view.

175. It has been suggested that there could be a conflict between the proviso in Clause
34(1) and Clause 40. This is said to arise, for example, where the parties have agreed
a procedural or evidential matter which they are entitled to do under Clause 34(1), but
the tribunal are intent on taking a different course. Does the parties’ agreement
override their duty under Clause 40?

The DAC considers that no such conflict exists:

i. The parties are free to agree on all procedural and evidential matters, pursuant to
Clause 34(1).

i. However, any such agreement will only be effective, if it is consistent with Clause
33, being a mandatory provision.

ii. Any such agreement made pursuant to Clause 34(1), and consistent with Clause
33, will define the scope of Clause 40—7.e. the parties will have agreed on how the
arbitration is to be conducted, or, in the words of Clause 40, what is to constitute
the “proper and expeditious conduct of the arbitral proceedings”. The determina-
tions of the tribunal should follow that agreement (which would not be the case if
such an agreement was inconsistent with Clause 33) and ex hypothesi the parties
should be obliged to comply.

iv. If there are matters on which the parties have not agreed, then the tribunal will fill
the gap under Clause 34(1) and Clause 40(1) will again operate without con-
flict.

176. It has also been suggested that the Bill should include a provision that the arbitrator
should encourage the parties to use other forms of ADR when this was considered
appropriate. This suggestion has not been adopted, since the Bill is concerned with
arbitration where the parties have chosen this rather than any other form of dispute
resolution.
 Appendix 2 679

Clause 35 Consolidation of Proceedings and Concurrent

Hearings
77h This Clause makes clear that the parties may agree to consolidate their arbitration A2-038
with other arbitral proceedings or to hold concurrent hearings.

178. During the consultation exercises, the DAC received submissions calling for a provi-
sion that would empower either a tribunal or the court (or indeed both) to order
consolidation or concurrent hearings. These were considered extremely carefully by
the committee.

1A9% The problem arises in cases where a number of parties are involved. For example, in
a construction project a main contractor may make a number of sub-contracts each of
which contains an arbitration clause. A dispute arises in which a claim is made against
one sub-contractor who seeks to blame another. In court, of course, there is power to
order consolidation or concurrent hearings, as well as procedures for allowing addi-
tional parties to be joined. In arbitrations, however, this power does not exist. The
reason it does not exist is that this form of dispute resolution depends on the
agreement of the contracting parties that their disputes will be arbitrated by a private
tribunal, not litigated in the public courts. It follows that unless the parties otherwise
agree, only their own disputes arising out of their own agreement can be referred to
that agreed tribunal.

180. In our view it would amount to a negation ofthe principle of party autonomy to give
the tribunal or the court power to order consolidation or concurrent hearings. Indeed
it would to our minds go far towards frustrating the agreement of the parties to have
their own tribunal for their own disputes. Further difficulties could well arise,
such as
the disclosure of documents from one arbitration to another. Accordingly we would
be opposed to giving the tribunal or the court this power. However, ifthe parties agree
to invest the tribunal with such a power, then we would have no objection.

181. Having said this, the DAC appreciates the common sense behind the suggestion. We
are persuaded, however, that the problem is best solved by obtaining the agreement
of the parties. Thus those who are in charge of drafting standard forms of contract,
or who offer terms for arbitration services which the parties can incorporate into their
agreements, (especially those institutions and associations which are concerned with
situations in which there are likely to be numerous contracts and sub-contracts) could
include suitable clauses permitting the tribunal to consolidate or order concurrent
hearings in appropriate cases. For example, the London Maritime Arbitrators Asso-
ciation Rules have within them a provision along these lines. In order to encourage
this, we have made clear in this Clause that with the agreement of the parties, there
is nothing wrong with adopting such procedures.

182. It will be noted that whereas Clause 39 uses the expression “‘[t]he parties are free to
agree that the tribunal shall have power to order... ”’, Clause 35 simple states that
“t]he parties are free to agree...” This difference is easily explained. In both cases
the parties are free to endow the tribunal with the power in question. This is implicit
in Clause 35(1) by virtue of Clause 35(2). Under Clause 35(1), the parties may agree
between themselves to consolidate two arbitrations, or to have concurrent hearings,
before a tribunal has been appointed. This could, of course, have a bearing on how the
tribunal is to be appointed in such a situation. Indeed the parties may agree on
institutional rules that provide for this. However, an equivalent arrangement is
difficult to imagine in the context of Clause 39. Overall, the difference in wording is
 680 Appendix 2

not intended to impede the parties’ freedom to agree what they like, when they like,
in either case.

_ Clause 36 Legal or Other Representation

A2-039 183. It seems to us that this reflects a basic right, though of course the parties are free to
dispense with it if they wish.

184. In the draft produced in July we used the phrase “‘a lawyer or other person of his
choice’. We have changed this, because we felt that it might give the impression that
a party could stubbornly insist on a particular lawyer or other person, in circum-
stances where that individual could not attend for a long time, thus giving a recalci-
trant party a good means of delaying the arbitral process. This should not happen. “A
lawyer or other person chosen by him’’ does not give this impression: if a party’s first
choice is not available, his second choice will still be ‘a lawyer or other person chosen
by him”. The right to be represented exists but must not be abused. Furthermore the
right must be read with the first principle of Clause 1, as well as Clauses 33 and 40.
If this is done then we trust that attempts to abuse the right will fail.

185. It has been suggested to the DAC that there should be some provision requiring a
party to give advance notice to all other parties if he intends to be represented at a
hearing. Whilst in some ways an attractive proposal, this would be difficult to stipulate
as a statutory provision, given that it may be impossible in some circumstances, or
simply unnecessary in others. Further, different sanctions may be appropriate
depending on the particular case. It is clearly desirable that, as a general rule, such
notice be given. If it is not, one sanction may be for the tribunal to adjourn a hearing
at the defaulting party’s cost. In the end, however, this must be a matter for the
tribunal’s discretion in each particular case.

186. It has been suggested that this Clause provides an opportunity of extending by statute
the privilege enjoyed by legal advisers to non-legal advisers or representatives. We
have not adopted this suggestion. It seems to us that it would be necessary to define
with great precision which non-legal advisers or representatives are to be included
(e.g. what relationship they must have to the arbitration and its conduct), and the
precise classes of privilege which should be extended to them. Further, any such
provision would necessarily have an impact on the position beyond arbitration. In
short, it seems to us that this question cannot be confined to arbitrations and raises
matters of general principle far beyond those of our remit.

Clause 37 Power to Appoint Experts, Legal Advisers or

Assessors
A2-040 187. This to our minds would be a useful power in certain cases. We trust that the
provisions we suggest are self-evident. Of course, the power can only be exercised if
in the circumstances of the particular case its exercise falls within the scope of the
duty of the tribunal set out in Clause 33.

188. Subsection (2) is made mandatory, to avoid the risk of the parties agreeing otherwise
and thus disabling the tribunal from recovering from the parties expenses properly
incurred.

Clause 38 General Powers Exercisable by the Tribunal

A2-041 189. These provisions represent a significant re-drawing of the relationship between
arbitration and the court. Wherever a power could properly be exercised by a tribunal
 Appendix 2 681

rather than the court, provision has been made for this, thereby reducing the need to
incur the expense and inconvenience of making applications to court during arbitral
proceedings.

190. The first of the powers in this Clause is one which enables the tribunal to order
security for costs. The power presently given to the court to order security for costs
in arbitrations is removed in its entirety.

191. This is a major change from the present position where only the court can order
security for costs. The theory which lay behind the present law is that it is the duty
of an arbitral tribunal to decide the substantive merits of the dispute referred to it and
that it would not be performing this duty if it stayed or struck out the proceedings
pending the provision of security: see for example, Re Unione Stearinerie Lanza and
Weiner [1917] 2 K.B. 558.
192. We do not subscribe to this theory, which Parliament has already abandoned in the
context of striking out a claim for want of prosecution. In our view, when the parties
agree to arbitrate, they are agreeing that their dispute will be resolved by this means.
To our minds (in the absence of express stipulations to the contrary) this does not
mean that the dispute is necessarily to be decided on its substantive merits. It is in
truth an agreement that it will be resolved by the application of the agreed arbitral
process. If one party then fails to comply with that process, then it seems to us that
it is entirely within what the parties have agreed that the tribunal can resolve the
dispute on this ground.

193. Apart from this, the proposition that the court should involve itself in such matters
as deciding whether a claimant in an arbitration should provide security for costs has
received universal condemnation in the context of international arbitrations. It is no
exaggeration to say that the recent decision of the House of Lords in S.A. Coppee
Lavalin NV wv. Ken-Ren Chemicals and Fertilisers [1994] 2 W.L.R. 631 was greeted with
dismay by those in the international arbitration community who have at heart the
desire to promote our country as a world centre for arbitration. We share those
concerns.

194. It has been suggested to the DAC that the court should retain a power to order
security for costs that may be incurred up to the appointment ofthe tribunal. We have
not been persuaded, however, that this is really necessary.

12%), It has been pointed out that in some cases an application for security before an arbitral
tribunal might involve disclosing to that tribunal the fact that an offer of settlement
had been or was about to be made. Under the court system, such disclosure can be
made to a court other than that which will try the merits of the case.

196. We are not disturbed by this. It seems to us that a tribunal, properly performing its
duty under Clause 33, could and should not be influenced by such matters, if the case
proceeds to a hearing on the merits, nor do we accept that the disclosure of such
information could somehow disqualify the tribunal from acting.

LOVE Clause 38(3) has been the subject of significant criticism since the Bill was introduced.
In the light of this, we have concluded that it must be redrawn. Chapter 6, to which
reference should be made, contains a full discussion of the problems with this
provision as currently drafted, and our recommendations for its amendment.
 682 Appendix 2

198. Whilst the sanction in court for a failure to provide security for costs is normally a stay
of the action, this is inappropriate in arbitration: if an arbitrator stayed proceedings,
the arbitration would come to a halt without there necessarily being an award which
could be challenged (e.g. if a party seeks to continue the proceedings). We have
therefore included a specific sanction with respect to a failure to provide security for
costs, which is to be found in Clause 41(6). This provision also follows the practice of
the English Commercial Court, which changed from the old practice of ordering a
stay of proceedings if security was not provided. The disadvantage of the latter course
was that it left the proceedings dormant but alive, so that years later they could be
revived by the provision of security.

L99F Clause 38 provides the tribunal with other powers in relation to the arbitration
proceedings. We trust that these are self-explanatory.

Clause 39 Power to Make Provisional Awards

A2—042 200. In the July 1995 draft Clauses, this power did not require the agreement of the parties.
As the result of responses, we have concluded on further consideration that this is
necessary.

201. In The Kostas Melas [1981] 1 Lloyd’s Rep. 18 at 26, GoffJ.,as he then was, made clear
that it was no part of an arbitrator’s function to make temporary or provisional
financial arrangements between the parties. Furthermore, as can be demonstrated by
the abundance of court cases dealing with this subject (in the context of applications
for summary judgment, interim payments, Mareva injunctions and the like) enor-
mous care has to be taken to avoid turning what can be a useful judicial tool into an
instrument of injustice. We should add that we received responses from a number of
practising arbitrators to the effect that they would be unhappy with such powers, and
saw no need for them. We should note in passing that the July 1995 draft would
arguably (and inadvertently) have allowed arbitrators to order ex parte Mareva or even
Anton Piller relief. These draconian powers are best left to be applied by the courts,
and the provisions of the Bill with respect to such powers have been adjusted
accordingly.

ZU There is a sharp distinction to be drawn between making provisional or temporary

arrangements, which are subject to reversal when the underlying merits are finally
decided by the tribunal; and dealing severally with different issues or questions at
different times and in different awards, which we cover in Clause 47. It is for this
reason that in this provision we draw attention to that Clause.

203. These considerations have led us firmly to conclude that it would only be desirable to
give arbitral tribunals power to make such provisional orders where the parties have
so agreed. Such agreements, of course, will have to be drafted with some care for the
reasons we have stated. Subject to the safeguards of the parties’ agreement and the
arbitrators’ duties (Clause 33), we envisage that this enlargement of the traditional
jurisdiction of arbitrators could serve a very useful purpose, for example in trades and
industries where cash flow is of particular importance.

Clause 40 General Duty of the Parties

A2-043 204. This is a mandatory provision, since it would seem that an ability to contract out of
it would be a negation of the arbitral process.
 Appendix 2 683

205. We were asked what the sanction would be for non-compliance. The answer lies in
other Clauses of the Bill. These not only give the tribunal powers in relation to
recalcitrant parties (¢.g. Clause 41), but stipulate time limits for taking certain steps
(e.g. applications to the court, etc.) and (in Clause 73) making clear that undue delay
will result in the loss of rights.

Clause 41 Powers of Tribunal in Case of Party’s Default

206. The first part of this Clause sets out the present law (section 13A of the 1950 Act, A2-044
which was inserted by section 102 of the Courts and Legal Services Act 1990) giving
the arbitral tribunal power to strike out for want of prosecution.

207. The second part makes clear that in the circumstances stipulated, a tribunal may
proceed ex parte, though we have forborne from using this expression (or indeed any
other legal Latin words or phrases) in the Bill. The Clause has its roots in article 25
of the Model Law.

208. It is a basic rule of justice that a court or tribunal should give all parties an
opportunity to put their case and answer that of their opponents. That is why this
appears in Clause 33 of the Bill. Equally, however, and for reasons already mentioned,
that opportunity should, again for reasons of justice, be limited to a reasonable one.
If for no good reason such an opportunity is not taken by a party then to our minds
it is only fair to the other party that the tribunal should be able to proceed as we have
set out in this Clause.

209. The last part of this Clause sets out a system of peremptory orders. It will be noted
that a peremptory order must be “‘to the same effect” as the preceding order which
was disobeyed (subsection (5)). It could be quite unfair for an arbitrator to be able to
make any type of peremptory order, on any matter, regardless of its connection with
the default in question.

210. For the reasons mentioned earlier, subsection (6) provides that where a party fails to
comply with a peremptory order to provide security for costs, the tribunal may make
an award dismissing the claim, thereby following the practice of the English Commer-
cial Court, and avoiding the danger that the proceedings are halted indefinitely,
without there being anything to challenge before the court.

211. So far as failure to comply with other peremptory orders is concerned, we have
provided a range of remedies. They do not include a power simply to make an award
against the defaulting party. The reason for this is that (unlike a failure to comply with
a peremptory order to provide security) it seems to us that this is too draconian a
remedy, and that the alternatives we have provided very much better fit the justice of
the matter.

Powers of Court in Relation to Arbitral Proceedings

Clause 42 Enforcement of Peremptory Orders of Tribunal

212. Although in Clause 41 we have provided the tribunal with powers in relation to A2-045
peremptory orders, it seemed to us that the court should have power to order
compliance with such orders, though (unless both parties have agreed) these can only
be invoked with the permission of the tribunal. In our view there may well be
 684 Appendix 2

circumstances where in the interests of justice, the fact that the court has sanctions
which in the nature of things cannot be given to arbitrators (e.g. committal to prison
for contempt) will assist the proper functioning of the arbitral process. This Clause
is a good example of the support the court can give to that process. Subsection (3)
requires that any other available recourse within the arbitral process be first
exhausted.

Clause 43 Securing the Attendance of Witnesses

A2-046 213. This Clause (which corresponds to article 27 of the Model Law, and is derived from
section 12(4) and (5) of the 1950 Act) is also designed to provide court support for the
arbitral process. It will be noted, in particular, that the agreement of the parties or the
permission of the tribunal is required. The reason for this is to make sure that this
procedure is not used to override any procedural method adopted by the tribunal, or
agreed by the parties, for the arbitration. Thus, for example, if the tribunal has
decided that there shall be no oral evidence, then (unless all parties agree otherwise)
this procedure cannot be used to get round that decision.

Clause 44 Court Powers Exercisable in Support of Arbitral

Proceedings
A2-047 214. This provision corresponds in part to article 9 of the Model Law. As part of the
redefinition of the relationship between arbitration and the court, which was men-
tioned above, the powers we have given the court are intended to be used when the
tribunal cannot act or act effectively, as subsection (5) makes clear. It is under this
Clause that the court has power to order Mareva or Anton Piller relief (i.e. urgent
protective measures to preserve assets or evidence) so as to help the arbitral process
to operate effectively. Equally, there may be instances where a party seeks an order that
will have an effect on a third party, which only the court could grant. For the same
reason the court is given the other powers listed.

215. In order to prevent any suggestion that the court might be used to interfere with or
usurp the arbitral process, or indeed any attempt to do so, we have stipulated that
except in cases of urgency with regard to the preservation of assets or evidence, the
court can only act with the agreement of the parties or the permission of the tribunal.
We have excepted cases of urgency, since these often arise before the tribunal has been
properly constituted or when in the nature ofthings it cannot act quickly or effectively
enough.

216. Furthermore, under subsection (6) the court, after making an order, can in effect hand
over to the tribunal the task of deciding whether or not that order should cease to have
effect. his is a novel provision, but follows from the philosophy behind these
provisions: if a given power could possibly be exercised by a tribunal, then it should
be, and parties should not be allowed to make unilateral applications to the court. If,
however, a given power could be exercised by the tribunal, but not as effectively, in
circumstances where, for example, speed is necessary, then the court should be able
to step in.

Clause 45 Determination of Preliminary Point of Law

A2-048 217. This Clause preserves what used to be the old Consultative Case procedure, though
its availability is limited as we have set out, in order not to interfere with the arbitral
process. The Clause is based on section 2 of the 1979 Act, with certain important
changes.
 Appendix 2 685

218. It seems to us that with the limitations we have provided, this procedure can have its
uses. For example, an important point of law may arise which is of great general
interest and potentially the subject of a large number of arbitrations. This not
infrequently happens when some major event occurs, as, for example, the closure of
the Suez Canal or the United States embargo on the export of soya beans. It may well
be considered by those concerned that in such special circumstances it would be
cheaper and better for all to obtain a definitive answer from the court at an early
stage.

VAD However, under subsection (1), unless the parties agree, the court must now be
satisfied that determination of the given question of law will substantially affect the
rights of one or more of the parties. This last point is a departure from the 1979 Act,
section | of which makes this precondition in relation to an appeal in respect of
questions of law arising out of the award, but section 2 of which does not impose it
in relation to the determination of a preliminary point of law.

220. Further, unless the parties agree, the court will now have to be satisfied of the matters
set out in subsection (2) before considering an application, so that the procedure can
only be used (even with the permission ofthe tribunal) in cases where its adoption will
produce a substantial saving in costs to the parties or one of them. The condition in
section 2(2) of the 1979 Act, which requires that the question of law be one in respect
of which leave to appeal would be likely to be given under section 1(3)(b) of that Act,
is not repeated.

22Ne It has been suggested to the DAC that the right to refer to the court under this Clause
be removed from all non-domestic arbitrations, unless the parties otherwise agree. For
the reasons given above as to the value of this provision, and for the reasons given
below with respect to preserving the right of appeal in Clause 69, we were not
persuaded by this.

The Award

Clause 46 Rules Applicable to Substance of Dispute

pap. This Clause reflects much, though not all, of article 28 of the Model Law. We have A2-049
not, for example, directed the tribunal to “take into account the usages of the trade
applicable to the transaction”’. If the applicable law allows this to be done, then the
provision is not necessary; while if it does not, then it could be said that such a
direction overrides that law, which to our minds would be incorrect.

2233 Subsection (1)(b) recognizes that the parties may agree that their dispute is not to be
decided in accordance with a recognised system of law but under what in this country
are often called “equity clauses”, or arbitration “ex aequo et bono”, or “amiable
composition”, 7.e. general considerations of justice and fairness, etc. It will be noted
that we have avoided using this description in the Bill, just as we have avoided using
the Latin and French expressions found in the Model Law. There appears to be no
good reason to prevent parties from agreeing to equity clauses. However, it is to be
noted that in agreeing that a dispute shall be resolved in this way, the parties are in
effect excluding any right to appeal to the court (there being no “question of law” to
appeal).
 686 Appendix 2

2 Subsection (2) does, in effect, adopt the rule found in article 28 of the Model Law,
thereby avoiding the problems of renvot.

22. Subsection (3) caters for the situation where there is no choice or agreement. This
again is the language of the Model Law. In such circumstances the tribunal must
decide what conflicts of law rules are applicable, and use those rules in order to
determine the applicable law. It cannot simply make up rules for this purpose. It has
been suggested to the DAC that more guidance be given as to the choice of a proper
law, but it appears to us that flexibility is desirable, that it is not our remit to lay down
principles in this highly complex area, and that to do so would necessitate a departure
from the Model Law wording.

Clause 47 Awards on Different Issues, etc.

A2-050 =226. We regard this as a very important provision. Some disputes are very complex, raising
a large number of complicated issues which, if they are all addressed and dealt with
at one hearing, would necessarily take a very long time and be very expensive.
Disputes concerning large scale construction contracts are a good example, though
there are many other cases.

227. In recent years both the Commercial Court and the Official Referees Court in
England (which deal with large cases) have adopted a different approach. The judge
plays much more of a managerial role, suggesting and indeed directing ways in which
time and money can be saved. One of the ways is to select issues for early determina-
tion, not necessarily on the basis that they will be /ega//y determinative of the entire
litigation, but where they may well be commerciaily determinative, in the sense that a
decision is likely to help the parties to resolve their other differences themselves
without the need to spend time and money on using lawyers to fight them out. This
has a further advantage. Cases fought to the bitter end often result in a permanent loss
of goodwill between the warring factions, thus impeding or preventing future profit-
able relationships between them. The result is often in truth a loss to all the parties,
whether or not they were the “‘winners” in the litigation.

228. In court therefore, the old idea that a party is entitled to a full trial of everything at
once has now largely disappeared: see, for example, the decision of the House of Lords
in Ashmore v. Corporation of Lloyd’s [1992] 2 Lloyd’s Rep. 1. Furthermore, this
method of approach is reflected in the views expressed by Lord Woolf in his current
consideration of how to improve our system of civil justice. The same reasoning, of
course, applies to arbitrations.

Js). As we have said earlier, arbitration enjoys an advantage over litigation, since the
arbitral tribunal is appointed to deal with the particular dispute that has arisen, and
is thus in a better position to tailor the procedure to suit the particular circumstances
of that dispute. Furthermore, an arbitral tribunal is often able, for the same reason,
to move much quicker than the court.

230. For these reasons, we have tried to make clear in this Clause that the tribunal is
empowered to proceed in this way. This is an aspect of the duty cast upon the tribunal
to adopt procedures suitable to the circumstances of the particular case, which is set
out in Clause 33(1)(a). We would encourage arbitrators to adopt this approach in any
case where it appears that time and money will be saved by doing so, and where such
an approach would not be at the expense of any of the other requirements of
justice.
 Appendix 2 687

231. In this connection we would draw attention to the decision of GoffJ.(now Lord Goff)
in The Kostas Melas, op. cit. As we observed when considering Clause 39, the function
of arbitrators is not to make temporary financial adjustments between the parties
pending the resolution of the dispute, unless this is what they have agreed the
arbitrators can do. As this case shows, there is a clear distinction between such
arrangements and the right to make a permanent binding decision after considering
the arguments, even though the later resolution of other issues (if this becomes
necessary) may overall produce a different result.

Soe We should emphasize that in this Clause we are not intending to give arbitral tribunals
greater or different powers from those they presently have, but to emphasise how their
powers should, in suitable cases, be exercised.

233. It might also be noted that we have been careful to avoid use of the term “interim
award”, which has become a confusing term, and in its most common use, arguably
a misnomer.

Clause 48 Remedies
234. We trust that the matters addressed in this Clause are self-evident. We have excluded A2-051
specific performance of land contracts, so as not to change the law in this regard, but
clarified the power of arbitrators to award injunctive relief. Given that the parties are
free to agree on the remedies that a tribunal may order, there is nothing to restrict
such remedies to those available at Court.

Clause 49 Interest
239: The responses we received demonstrated to us that there was a general desire to give A2-052
arbitral tribunals a general power to award compound interest.

236. There is no doubt that the absence of such a power adds to the delays (and thus the
expense) of arbitrations and causes injustice, for it is often in a party’s interest to delay
the proceedings and the honouring of an award, since the interest eventually payable
is less than can be made by holding on to funds which should be paid over to the other
party, who of course is losing out by a like amount.

Mfc Some of those responding were fearful that arbitrators would abuse this power, and
may, for example, award compound interest on a punitive rather than compensatory
basis. We do not share those fears. To our minds any competent arbitrator seeking to
fulfil the duties laid on him by the Bill will have no more difficulty in making
decisions about compound interest than he will in deciding in any other context what
fairness and justice require. Anyone who has such difficulties demonstrates, in our
view, that he is really not fit to act as an arbitrator. In such a case, the award and the
arbitrator will be susceptible of challenge.

238. Clause 84 and 111 allow for transitional measures. In the context of this Clause, we
understand that these may prove necessary in relation to the enforcement of awards
through the county courts, who we are told are not presently equipped to calculate
compound interest payable from the date of the award.
 688 Appendix 2

Clause 50 Extension of Time for Making Award

A2-053 239. This Clause re-enacts the existing law, though with two qualifications:

i. arbitral procedures for obtaining an extension must be exhausted before recourse

to the court; and

ii. the court must be satisfied that substantial injustice would be done if the time were
not extended.

It seems to us that these qualifications are needed so as to ensure that the court’s
power is supportive rather than disruptive of the arbitral process. For the same reason,
it seems to us that it would be a rare case indeed where the court extended the time
notwithstanding that this had not been done through an available arbitral process.

Clause 51 Settlement
A2-054 PEAY: This Clause reflects article 30 of the Model Law. It enables an agreed settlement of
the dispute to be given the status of an arbitral award, which could then be enforced
as such.

241. Concern has been expressed that this provision (taken from article 30 of the Model
Law) might be used by the parties either to obtain an award in respect of matters
which are simply not arbitrable (e.g. matters which under our law cannot be settled by
agreement between the parties), or to mislead third parties (e.g. the tax authorities).
It was suggested that any agreed award should have to state on its face that it is
such.

242. Dealing first with deception, in our view there is no material difference between
Clause 51 and our present law: cf p. 59 of the Mustill Report. As that Report
observes, article 30 and our present law recognise the right of the tribunal to refuse
to make an award on agreed terms if it contains an objectionable feature, eg. is
structured to mislead third parties. Clause 51 preserves that right. Thus unless the
tribunal is itself prepared to be a party to an attempted deception, we consider the risk
that misleading awards will be made to be very small. If the tribunal is prepared to
conspire with the parties, then nothing we could put in Clause 51 is likely to deter it.
Furthermore, the whole of Clause 51 is based upon the assumption that there is a
dispute between the parties which has been referred to arbitration and then settled.
Nothing in the Clause would assist parties to mislead others where there was no
genuine dispute or genuine reference or genuine settlement. The Clause would simply
not apply to such a situation.

LAS. So far as arbitrability is concerned, this is a question that goes beyond agreed awards.
We discuss this question when considering Clause 66 (see also the supplementary
recommendations in Chapter 6 below).

2A4e We are not persuaded that we should require that any agreed award should state that
it is such. Both under this Clause and Clause 52 the parties are free to agree on the
form the award should take. In our view this is not only the position under the Model
Law but also the position under our present law. A requirement that an agreed award
should state that it is such would have to be made a mandatory provision to be
effective. We are not aware of any problems arising under our present law and are
reluctant to impose this formal requirement. Moreover, it would of course be open to
the tribunal to record the agreement in the award if they thought it was appropriate
 Appendix 2 689

to do so. However, at the enforcement stage we agree that the Court should be
informed if the award is an agreed award, if this is not apparent from the award itself,
We return to this point when considering Clause 66 below (see also Chapter 6).

Clause 52. Form of Award

DAS: This Clause follows closely article 31 of the Model Law. There are, however, two A2-055
matters worthy of particular note.

246. In the first place, as in the Model Law, we have required the tribunal to give reasons,
unless the award is an agreed award or the parties have agreed that reasons need not
be given.

247. To our minds, it is a basic rule of justice that those charged with making a binding
decision affecting the rights and obligations of others should (unless those others
agree) explain the reasons for making that decision. This was also the view of the
majority of those who commented on this.

248. It was suggested that having to give reasons would be likely to add to the cost of
arbitrations and encourage applications for leave to appeal to the court.

249. We do not agree. The need for reasons is that which we have explained above and has
nothing to do with the question whether or not a court should hear an appeal from
an award. Further, we have introduced stricter conditions for the bringing of appeals
in any event. As to cost, it is always open to the parties to agree to dispense with
reasons if they wish to do so, though in the case of domestic arbitrations this can only
be done after the dispute has arisen: see Clauses 69(1) and 87.

250. The second noteworthy point is that we have used the word “‘seat”’ instead of the
Model Law phrase “‘place of arbitration”. We consider that the Model Law uses this
phrase to mean the seat (there being no obvious legal reason to stipulate the
geographical place where the award was made), and since we have used this word
earlier in the Bill (see Clauses 2 and 3) it would in our view only cause confusion not
to use it here. Of course the seat is only of importance in international arbitrations or
where the question arises as to the enforcement of an award abroad. Therefore, in a
purely domestic arbitration, if an arbitrator were to fail to state the “‘seat”’, or to state
this incorrectly, it is extremely unlikely that the award could be challenged under
Clause 68(2)(h), given that such a failure would be unlikely to result in “substantial
injustice’.

Dpy|\ Subsection (3) provides that the award shall be in writing and signed by all the
arbitrators or, alternatively, by all those assenting to the award. An earlier draft of this
subsection had only stipulated that all arbitrators assenting to an award sign it. It was
pointed out to the DAC, however, that (for whatever reason) some dissenting arbi-
trators may not wish to be identified as such, and that the provision should therefore
be amended to provide for this.

Lae It has been suggested to the DAC that there should be a provision allowing for
somebody to sign on behalf of an arbitrator. This could invoke complicated principles
of agency, and, overall, is better left to be resolved in each particular case.
 690 Appendix 2

Clause 53. Place Where Award is Treated as Made

A2-056 253. This Clause is designed to avoid disputes over where an award is made and (in cases
where Part I of the Bill applies to the arbitration in question) it reverses the decision
(although not the result) of the House of Lords in Hiscox v. Outhwaite [1992] 1 A.C.
562.

Clause 54 Date of Award

A2-057 254. We trust this provision 1s self-explanatory.

Clause 55 Notification of Award

A2-058 255. This provision we also trust is self-explanatory. The obligation on the tribunal to
notify the parties by service on them of copies of the award is important, given that
certain time limits in the Bill for, e.g. challenging the award, run from the date of the
award (which, under Clause 54, in the absence of any other agreement, is the date
upon which it is signed). Time periods, of course, can be extended: see Clause 79. We
have required the award to be notified to the “‘parties” so as to prevent one party from
obtaining the award and sitting on it without informing the other party until the
expiry of time limits for appeal etc, which we are aware has happened in practice.

256. Clause 55(3) provides that nothing in this section affects the power to withhold an
award in the case of non-payment. However, it should be noted that the duty to notify
all parties would of course revive once the tribunal’s ‘‘lien” has been satisfied.

Clause 56 Power to Withhold Award in Case of Non-payment

A2-059 257. These provisions enable a party to seek the assistance of the court 1f he considers that
the arbitrators are asking too much for the release of their award, though it is
important to note from subsection (4) that there is no recourse if there is already
arbitral machinery for an appeal or review of the fees or expenses demanded.

258. Subsection (8) makes clear that this Clause does not affect the right to challenge fees
and expenses under Clause 28, 7.e. that paying them to get the award does not lose this
right. The reason for this provision is that it may be important for a party to obtain
the award quickly, rather than going to the court for an order about fees and expenses
before getting the award.

259. Unlike section 19 of the 1950 Act, this provision gives the court a discretion to specify
that a lesser amount than that claimed by the arbitrators be paid into court, in order
to have the award released. If this were not so, an arbitrator could demand an
extortionate amount, in effect preventing a party from taking advantage of the
mechanism provided for here.

260. For obvious reasons, this provision is mandatory.

Clause 57 Correction of Award or Additional Award

A2-060 261. This Clause reflects article 33 of the Model Law. In our view this is a useful provision,
since it enables the arbitral process to correct itself, rather than requiring applications
to the court. In order to avoid delay, we have stipulated time limits for seeking
corrections, etc.
 Appendix 2 691

Clause 58 Effect of Award

262. This provision in effect simply restates the existing law. A2-061

263. It has been suggested that what is described as the other side of subsection (1) should
be spelt out in the Bill, 7.e. that whatever the parties may or may not agree, the award
is of no substantive or evidential effect against any one who is neither a party nor
claiming through or under a party.

264. Such a provision would, of course, have to be mandatory. It would have to confine
itself to cases exclusively concerned with the laws of this country, for otherwise it
could impinge on other applicable laws which have a different rule. Even where the
situation was wholly domestic, it would also have to deal with all those cases (e.g.
insurers) who are not parties to the arbitration but whose rights and obligations may
well be affected by awards (agreed or otherwise) in one way or another. In our view
it would be very difficult to construct an acceptable provision and we are not
persuaded that it is needed.

Costs of the Arbitration

Clause 59 Costs of the Arbitration

Clause 60 Agreement to Pay Costs in Any Event

Clause 61 Award of Costs

Clause 62 Effect of Agreement or Award about Costs

Clause 63 The Recoverable Costs of the Arbitration

Clause 64 Recoverable Fees and Expenses of Arbitrators

Clause 65 Power to Limit Recoverable Costs

265. In these Clauses we have attempted to provide a code dealing with how the costs or A2-062
an arbitration should be attributed between the parties. The question of the right of
the arbitrators to fees and expenses is dealt with earlier in that part of the Bill
concerned with the arbitral tribunal: see Clause 28.

266. Clause 59 defines costs.

267. Clause 60 is a mandatory provision preventing effective agreements to pay the whole
or part of the costs in any event unless made after the dispute has arisen. The Clause
is based on section 18(3) of the Arbitration Act 1950. The Committee are of the view
that public policy continues to dictate that such a provision should remain.

268. Clause 62 empowers the arbitrators to make an award in relation to costs. Subsection
that is
(2) sets out the general principle to be applied, which is the same principle
applicable in court.

but to
269. It has been suggested that arbitral tribunals should not be fettered in this way,
may not be
our minds it is helpful to state the principle, especially for those who
 692 Appendix 2

lawyers and who otherwise might not know how to proceed. Furthermore, it seems to
us that there is no reason why the general principle should not apply to arbitrations:
it certainly does under the present law. The parties are, of course, free to agree on
other principles, subject to Clause 60.

270. Clauses 63 and 64 are we hope more or less self-explanatory. Clearly there has to be
a special regime for the fees and expenses of the arbitrators, for otherwise they would
be left with the power to decide for themselves whether or not they had over-
charged!

DFM Clause 64(4) preserves any contractual right an arbitrator may have to payment of his
fees and expenses. If a party has agreed these, then it would in our view be wrong to
allow the court to adjust the amount, z.¢. to rewrite that agreement.

. Clause 65 contains a new proposal. It gives the tribunal power to limit in advance the
amount of recoverable costs. We consider that such a power, properly used, could
prove to be extremely valuable as an aid to reducing unnecessary expenditure. It also
represents a facet of the duty of the tribunal as set out in Clause 33. The Clause
enables the tribunal to put a ceiling on the costs, so that while a party can continue
to spend as much as it likes on an arbitration it will not be able to recover more than
the ceiling limit from the other party. This will have the added virtue of discouraging
those who wish to use their financial muscle to intimidate their opponents into giving
up through fear that by going on they might be subject to a costs order which they
could not sustain.

Powers of the Court in Relation to Award

Clause 66 Enforcement of the Award

A2-063 HAS. This reflects article 35 of the Model Law. Enforcement through the court provides the
classic case of using the court to support the arbitral process. Subsection (3)(a) is
intended to state the present law: see Mustill & Boyd, Commercial Arbitration (2nd
(ed.) at p. 546. Subsection (3)(b) is intended to cover cases where public policy would
not recognise the validity of an award, for example awards purporting to decide
matters which our law does not accept can be resolved by this means. For obvious
reasons, this provision is mandatory.

ZT. Reference should be made to Chapter 6, where certain supplementary recommenda-

tions are made with respect to this Clause.

Clause 67. Challenging the Award: Substantive Jurisdiction

A2-064 275. Jurisdiction has already been considered in the context of that part of the Bill dealing
with the jurisdiction of the arbitral tribunal: see Clauses 30 to 32.

276. Clause 31 allows the tribunal (where it has power to rule on its own jurisdiction) to
make a “jurisdiction” award, either on its own, or as part of its award on the merits.
Clause 67 provides the mechanism for challenging the jurisdiction rulings in such
awards, and is a mandatory provision. It also provides a mechanism for challenges to
the jurisdiction by someone who has taken no part in the arbitral proceedings. We deal
with such persons below, when considering Clause 72.
 Appendix 2 693

Zieh ‘To avoid the possibility of challenges to the jurisdiction causing unnecessary delay, the
rights given by this Clause are subject to qualifications, which explains the reference
in subsection (1) to three other sections. In addition, subsection (2) means that a
challenge to jurisdiction does not stop the tribunal from proceeding with other aspects
of the arbitration while the application is pending.

Clause 68 Challenging the Award: Serious Irregularity

PALSY We have drawn a distinction in the Bill between challenges in respect of substantive A2-065
jurisdiction (7.e. those matters listed in Clause 30) and challenges in respect of what
we have called “serious irregularity”. We appreciate that cases may arise it which it
might be difficult to decide into which category a particular set of circumstances
should be placed, but since the time limits ete for both Clause 67 and Clause 68 are
the same, this should cause no procedural difficulties. We are firmly of the view,
however, that it is useful to have two categories.

Japs) The reason for this is that where jurisdiction is concerned, there can be no question
of applying a test of “substantial injustice” or the like. An award of a tribunal
purporting to decide the rights or obligations of a person who has not given that
tribunal jurisdiction so to act simply cannot stand, though of course, if the party
concerned has taken part in the arbitration, there is nothing wrong in requiring him
to act without delay in challenging the award.

280. Irregularities stand on a different footing. Here we consider that it is appropriate,

indeed essential, that these have to pass the test of causing ‘“‘substantial injustice”
before the court can act. The court does not have a general supervisory jurisdiction
over arbitrations. We have listed the specific cases where a challenge can be made
under this Clause. The test of “substantial injustice” is intended to be a applied by
way of support for the arbitral process, not by way of interference with that process.
Thus it is only in those cases where it can be said that what has happened is so far
removed from what could reasonably be expected ofthe arbitral process that we would
expect the court to take action. The test is not what would have happened had the
matter been litigated. To apply such a test would be to ignore the fact that the parties
have agreed to arbitrate, not litigate. Having chosen arbitration, the parties cannot
validly complain of substantial injustice unless what has happened simply cannot on
any view be defended as an acceptable consequence of that choice. In short, Clause 68
is really designed as a long stop, only available in extreme cases where the tribunal has
gone so wrong in its conduct of the arbitration that justice calls out for it to be
corrected.

281. By way of example, there have been cases under our present law where the court has
remitted awards to an arbitral tribunal because the lawyers acting for one party failed
(or decided not to) put a particular point to the tribunal: see, for example /ndian Oil
Corporation v. Coastal (Bermuda) Ltd [1990] 2 Lloyd’s Rep. 407; King v. Thomas
McKenna [1991] 2 QB. 480; Breakbulk Marine v. Dateline 19 March 1992, unreported
(jurisdiction recognised but not exercised).

282. The responses we received were critical of such decisions, on the grounds that they
really did amount to an interference in the arbitral process agreed by the parties. We
agree. The Clause we propose is designed not to permit such interference, by setting
out a closed list of irregularities (which it will not be open to the court to extend), and
instead reflecting the internationally accepted view that the court should be able to
 694 Appendix 2

correct serious failure to comply with the “due process” of arbitral proceedings: cf.
article 34 of the Model Law.

283. This Clause is, of course, mandatory.

Clause 69 Appeal on Point of Law

A2-066 284. We received a number of responses calling for the abolition of any right of appeal on
the substantive issues in the arbitration. These were based on the proposition that by
agreeing to arbitrate their dispute, the parties were agreeing to abide by the decision
of their chosen tribunal, not by the decision of the court, so that whether or not a
court would reach the same conclusion was simply irrelevant. To substitute the
decision of the court on the substantive issues would be wholly to subvert the
agreement the parties had made.

285. This proposition is accepted in many countries. We have considered it carefully, but
we are not persuaded that we should recommend that the right of appeal should be
abolished. It seems to us, that with the safeguards we propose, a limited right of
appeal is consistent with the fact that the parties have chosen to arbitrate rather than
litigate. For example, many arbitration agreements contain an express choice of the
law to govern the rights and obligations arising out of the bargain made subject to that
agreement. It can be said with force that in such circumstances, the parties have
agreed that that law will be properly applied by the arbitral tribunal, with the
consequence that if the tribunal fail to do this, it is not reaching the result contem-
plated by the arbitration agreement.

286. In these circumstances what we propose is a right to apply to the court to decide a
point of law arising out of an award. This right is limited, however, in several
ways.

i. The point of law must substantially affect the rights of one or more of the parties.
This limitation exists, of course, in our present law.

u. The point of law must be one that was raised before the tribunal. The responses
showed that in some cases applications for leave to appeal have been made and
granted on the basis that an examination of the reasons for the award shows an
error on a point of law that was not raised or debated in the arbitration. This
method of proceeding has echoes of the old and long discarded common law rules
relating to error of law on the face of the award, and is in our view a retrograde
step. In our view the right to appeal should be limited us we suggest.

ii. There have been attempts, both before and after the enactment of the Arbitration
Act 1979, to dress up questions of fact as questions of law and by that means to
seek an appeal on the tribunal’s decision on the facts. Generally these attempts
have been resisted by the courts, but to make the position clear, we propose to state
expressly that consideration by the court of the suggested question of law is made
on the basis of the findings of fact in the award.

iv. We have attempted to express in this Clause the limits put on the right to appeal
by the House of Lords in Pioneer Shipping Ltd v. BTP Tioxide Ltd (The Nema)
MOSZ Ae Ceeiaas

287. With respect to the last point, we think it is very important to do this. Many of those
abroad who do not have ready access to our case law were unaware that the Arbitration
 Appendix 2 695

Act 1979 had been construed by the House of Lords in a way that very much limited
the right of appeal, and which was not evident from the words of the Act them-
selves.

288. The test we propose is whether, in the ordinary case, the court is satisfied that the
decision of the tribunal is obviously wrong. The right of appeal is only available for
such cases, for the reasons discussed above. Where the matter is one of general public
importance, the test is less onerous, but the decision must still be open to serious
doubt.

289. We propose a further test, namely whether, despite the agreement of the parties to
resolve the matter by arbitration, it is just and proper in all the circumstances for the
court to determine the question.

290. We have been asked why we suggest this addition. The reason is that we think it
desirable that this factor should be specifically addressed by the court when it is
considering an application. It seems to us to be the basis on which the House of Lords
acted as it did in The Nema, op. cit.. The court should be satisfied that justice dictates
that there should be an appeal; and in considering what justice requires, the fact that
the parties have agreed to arbitrate rather than litigate is an important and powerful
factor.

JENN. It will be noted that we have included a provision that the court should determine an
application without a hearing unless it appears to the court that a hearing is required.
This again reflects what was said in The Nema, op. cit. about the tendency for
applications for leave being turned into long and expensive court hearings. In our
view, the tests for leave (i.e. obviously wrong or open to serious doubt) are such that
in most cases the court will be able to decide whether to allow or reject the application
on written material alone.

SN. Finally, a question has been raised as to whether an agreement in advance of the
proceedings (7.e. contained in an arbitration clause mor in the underlying contract)
would satisfy Clause 69(2)(a). The Clause is intended to encompass such agreements,
and in our view it plainly does so since the word agreement is not qualified. However,
such an agreement will not automatically allow an appeal unless it complies with the
other conditions set out in Clause 69 and 70.

Clause 70 Challenge or Appeal: Supplementary Provisions

Clause 71 Challenge or Appeal: Effect of Order of the Court

293. These provisions contain time-limits and other matters in relation to challenges to the A2-067
award and applications and appeals. Some of these provisions are mandatory.

DBP. The time limit in Clause 70(3) runs from the date of the award, or, where applicable,
the date when a party was notified of the result of any arbitral process of appeal or
review. It has been suggested that difficulties might arise if an award is held back by
the arbitrators, pending payment by the parties (7.e. under Clause 56). It is possible
that the time limit in Clause 70(3) will have expired by the time an award is released.
However, the DAC is of the view that the date of the award is the only incontrovertible
date from which the time period should run. Anv other starting point would result in
great uncertainty (eg. as to the exact point at which an award is “released” or
 696 Appendix 2

“delivered’’). Further, any difficulties arising from specific circumstances can be easily
remedied by way of an extension of time under Clause 79.

Miscellaneous

Clause 72 Saving for Rights of Person who Takes no Part in

Proceedings
A2-068 295. To our minds this is a vital provision. A person who disputes that an arbitral tribunal
has jurisdiction cannot be required to take part in the arbitration proceedings or to
take positive steps to defend his position, for any such requirement would beg the
question whether or not his objection has any substance and thus be likely to lead to
gross injustice. Such a person must be entitled, if he wishes, simply to ignore the
arbitral process, though of course (if his objection is not well-founded) he runs the
risk of an enforceable award being made against him. Those who do decide to take
part in the arbitral proceedings in order to challenge the jurisdiction are, of course,
in a different category, for then, having made that choice, such people can fairly and
properly be required to abide by the time limits etc. that we have proposed.

296. This is a mandatory provision.

Clause 73 Loss of Right to Object

A2-069 297. Recalcitrant parties or those who have had an award made against them often seek to
delay proceedings or to avoid honouring the award by raising points on jurisdiction,
etc. which they have been saving up for this purpose or which they could and should
have discovered and raised at an earlier stage. Article 4 of the Model Law contains
some provisions designed to combat this sort of behaviour (which does the efficiency
of arbitration as a form of dispute resolution no good) and we have attempted to
address the same point in this Clause. In particular, unlike the Model Law, we have
required a party to arbitration proceedings who has taken part or continued to take
part without raising the objection in due time, to show that at that stage he neither
knew nor could with reasonable diligence have discovered the grounds for his
objection (the latter being an important modification to the Model Law, without
which one would have to demonstrate actual knowledge, which may be virtually
impossible to do). It seems to us that this is preferable to requiring the innocent party
to prove the opposite, which for obvious reasons it might be difficult or impossible to
do.

298. For the reasons explained when considering Clause 72, the provision under discussion
cannot, of course, be applied to a party who has chosen to play no part at all in the
arbitral proceedings.

Clause 74 Immunity of Arbitral Institutions, etc.

A2-070 BBY. In this mandatory provision we have provided institutions and individuals who
appoint arbitrators with a degree of immunity.

300. The reason for this proposal is that without such an immunity, there is in our view
a real risk that attempts will be made to hold institutions or individuals responsible for
the consequences of their exercise of the power they may be given to appoint or
nominate arbitrators, or for what their appointed or nominate arbitrators then do or
fail to do. This would provide a means of reopening matters that were referred to
 Appendix 2 697

arbitration, something that might be encouraged if arbitrators were given immunity

(as we have also proposed in Clause 29) but nothing was said about such institutions
or individuals.

301. There is an additional point of great importance. Many organisations that provide
arbitration services, including Trade Associations as well as bodies whose sole func-
tion it is to provide arbitration services, do not in the nature of things have deep
pockets. Indeed much of the work is done by volunteers simply in order to promote
and help this form of dispute resolution. Such organisations could find it difficult if
not impossible to finance the cost of defending legal proceedings or even the cost of
insurance against such cost. In our view the benefits which these organisations (and
indeed individuals) have on arbitration generally fully justify giving them a measure
of protection so that their good work can continue.

Clause 75 Charge to Secure Payment of Solicitors’ Costs

302. This is a technical provision designed to maintain the present position. A2-071

Supplementary

Clause 76 Service of Notices, etc.

303. The subject matter of this Clause was touched on in the MacKinnon Report which A2-072
led to the Arbitration Act 1934, but at that time no action was taken.

304. In this Clause we have attempted to do three things.

i. We have stipulated that the parties can agree on how service of notices and other
documents can be done.

uu. We have made clear that in the absence of agreement, service by any effective
means will suffice.
ii. We have provided in subsection (4) an option which can best be described as a
“fail-safe”? method, which a party may employ if he wishes, for example if he is not
sure that other methods will be effective. We should emphasise that this fail-safe
method is not a compulsory or preferred method for service, but merely a means
which, if employed, will be treated as effective.

305. These provisions do not apply in respect of service in court proceedings, for the
obvious reason that such service must comply with the rules of the court con-
cerned.

Clause 77. Powers of Court in Relation to Service of Documents

306. In this Clause we have given the court powers to support the arbitral process so that AZ-O7S
it is not delayed or frustrated through difficulties over service. In the nature of human
affairs, it is sadly the case that potential respondents to arbitration proceedings quite
often go to considerable lengths to avoid service and thus to achieve this state of
affairs, by making normal methods difficult or even impossible to use effectively. This
Clause should, in appropriate cases, help to deal with such cases.

Clause 78 Reckoning Periods of Time

307. In our view it would be of great assistance to set out a code to deal with the reckoning A2-074
of time, thus avoiding the need to refer to other sources. Hence this provision.
 698 Appendix 2

Clause 79 Power of Court to Extend Time Limits Relating to

Arbitral Proceedings
A2-075 308. Here we propose that the court should have a general right to extend time limits,
except time limits for starting an arbitration, which is dealt with specifically in Clause
12. We propose that the wording of the Clause be clarified as set out in Chapter 6
below.

309. This power is limited in the ways set out in this Clause. In particular, no extension will
be granted unless a substantial injustice would otherwise be done and any arbitral
process for obtaining an extension must first be exhausted. As we have said in other
contexts, it would be a rare case indeed where we would expect the court to grant an
extension where such has not been obtained through that process. With these
limitations we take the view that this provision can properly be described as support-
ing the arbitral process.

Clause 80 Notice and other Requirements in Connection with

Legal Proceedings
A2-076 310. Legal proceedings must of course be subject to the rules of the court concerned. We
have made clear, therefore, that where the Bill provides for notice of legal proceedings
to be given to others, this is a reference to such rules as the court concerned may
make; and is not a separate requirement over and above those rules.

Clause 81 Saving for Certain Matters governed by Common

Law
A2-077 Sie As we have stated earlier, and as was stated in the Mustill Report, it would be neither
practicable nor desirable to attempt to codify the whole of our arbitration law. Hence
subsections (1) and (2) of this Clause.

ole It was suggested to us that a provision preserving the common law would enable
arguments to be raised and accepted which were contrary to the spirit and intent of
the Bill. We do not think that this will happen, in view of the opening words of the
Clause and indeed the statements of principle in Clause 1. Equally, it seems to us to
be necessary to make clear that the common law (so far as it is consistent with the Bill)
will continue to make its great contribution to our arbitration law, a contribution that
has done much to create and preserve the world wide popularity of arbitration in our
country.

313. Subsection (3) is technically necessary to make clear that the repeal of the existing
statutes does not have the effect of reviving the common law rules relating to errors
on the face of the award.

Clause 82. Minor Definitions

Clause 83 Index of Defined Expressions: Part I

A2-078 314. The first of these Clauses provides the definition of words and phrases which are often
repeated in the body of the Bill, so that repetition of the meaning is avoided, as well
as providing a ready means of discovering the meaning of certain important words and
phrases. ‘The second ofthese Clauses is also designed to help the reader by identifying
the place where other important words and phrases are defined or explained.
 Appendix 2 699

Clause 84 Transitional Provisions

Sle), This Clause sets out the general proposition, namely that the Bill will apply to arbitral A2-079
proceedings commenced after the legislation comes into force, whenever the arbitra-
tion agreement is made. There are respectable precedents for this, since the Arbitra-
tion Acts 1889, and 1934 contained a like provision. The 1950 Act, of course, was not
a precedent, since this was a consolidating measure. We consider this to be a useful
provision, since some arbitration agreements have a very long life indeed (for example,
rent review arbitration agreements under leases) and it would be most unsatisfactory
if the existing law and the proposed legislation were to run in parallel (if that is the
right expression) indefinitely into the future.

316. Reference should also be made to Clause 111.

CHAPTER 3

Part II or THe BIL

OTHER PROVISIONS RELATING TO ARBITRATION

Domestic Arbitration Agreements

Clause 85 Modification of Part I in Relation to Domestic

Arbitration Agreements

Clause 86 Staying of Legal Proceedings

Clause 87 Effectiveness of Agreement to Exclude Court’s

Jurisdiction

Clause 88 Power to Repeal or Amend ss.85 to 87

37: Under our present law, a distinction is drawn between domestic and other arbitrations A2-080
for two main purposes.

318. In the first place, the rules for obtaining a stay of legal proceedings differ. The reason
for this is that under international Conventions, a stay in favour of an arbitration 1s
the
mandatory except in certain specified circumstances. The current Convention is
that Convention we have now set out in
New York Convention and the rules under
that we have already discussed above, Clause 9 simply
Clause 9. With an exception
re-enacts the Arbitration Act 1975 so far as it concerns this matter.

s as there
SI) Section 1 of the Arbitration Act 1975 does not apply to domestic arbitration
defined. These continue to be governed by section 4(1) of the Arbitration Act 1950,
which makes the grant of a stay discretio nary.
700 Appendix 2

320. It is our view that consideration should be given to abolishing this distinction and
applying the New York Convention rules to all cases. It seems to us that these rules
fit much more happily with the concept of party autonomy than our domestic rules,
which were framed at a time when attitudes to arbitration were very different and the
courts were anxious to avoid what they described as usurpation of their process.

For example, there are cases justifying the refusal of a stay in cases where the court
considers that the party seeking to arbitrate has no defence to the claim and is merely
seeking to delay the day of judgment. This has been explained on the basis that since
there is no defence to the claim, there is no dispute that can be arbitrated. The
difficulty with this argument is that it logically follows that only disputable matters
can be arbitrated, or, in other words, that the arbitrators have no jurisdiction to deal
with cases where there is no real defence. This in turn means that a claimant cannot
refer a claim to arbitration where there is no real defence, since ex hypothesi the
arbitrators would have no jurisdiction. In short, this argument leads to consequences
that in our view have only to be stated to be rejected. As to delaying tactics, it has been
our intention throughout the Bill to provide the means whereby an agreement to
arbitrate can produce (in suitable cases) a very quick answer indeed. Indeed, if in truth
there is no defence to a claim, then it should not take more than a very short time for
an arbitral tribunal to deal with the matter and produce an award.

322) For these reasons, which are those discussed in Nelson v. Hayter [1990] 2 Lloyd’s Rep.
265, we consider that this ground for preserving the distinction between domestic and
other arbitrations so far as stays are concerned is highly unconvincing.

323. The domestic rules have also been used to refuse stays where the disputes are likely
to involve other parties, who could not be brought into the arbitration, since the
agreement to arbitrate only binds those who were party to it. Here the justification for
refusing to stay legal proceedings is that it would be much better for all the concerned
parties to be brought into one proceeding, so that the whole matter can be sorted out
between them all.

324) This reasoning of course is in one sense supported by common sense and justice, for
in certain cases it would be better and fairer for all the disputes between all the parties
involved to be dealt with by one tribunal, thereby avoiding delay and the possibility
of inconsistent findings by different tribunals. However, as we observed in the context
of considering whether there should be a power (without the agreement of the parties)
to order consolidation or concurrent hearings in arbitrations (Clause 35), to refuse a
stay because other parties are involved involves tearing up the arbitration agreement
that the applicant for a stay has made. In other words, with the benefit of hindsight,
the court adjusts the rights and obligations of contracting parties.

325; We fully accept that for reasons of consumer protection, this on occasion can and
should be done, but we are not persuaded that it should be a general rule in the
context of stays of domestic arbitrations, for it sits uneasily with the principle of party
autonomy and amounts to interference with rather than support for the arbitral
process.

326. We should also note that the distinction drawn between domestic and other arbitra-
tions produces odd results. An arbitration agreement between two English people is
a domestic arbitration agreement, while an agreement between an English person and
someone of a different nationality is not, even if that person has spent all his time in
 Appendix 2 701

England. Furthermore, we are aware that it could be said that the distinction
discriminates against European Community nationals who are not English, and is thus
contrary to European law.

wWtro~I Notwithstanding the foregoing, we do not propose in this Bill to abolish the distinc-
tion. Some defend it and we have not had an opportunity to make all the soundings
we would like on this subject. What we have done is to put the domestic arbitration
rules in a separate part of the Bill, and provided in Clause 88 for a power of repeal
through the mechanism of a positive joint resolution of each House of Parliament.

328. What we have felt able to do is to redraft the domestic rules on stays and to make two
changes. Firstly we have removed the discretion and instead set out words which are
wide enough to encompass the circumstances which the cases have developed as
grounds for refusing a stay. Secondly and more importantly, we have reversed the
existing burden of proof (and incidentally got rid of a double or perhaps treble
negative in the previous legislation). It seemed to us that it was for the party seeking
to litigate something which he had previously agreed to arbitrate to persuade the court
that he should be allowed to go back on his agreement.

WwtooO The second purpose served by making a distinction between domestic and other
arbitrations is to prevent the parties in a domestic case from effectively agreeing to
exclude the jurisdiction of the court to deal with preliminary points of law or with an
appeal from an award on a point of law, until after the commencement of the arbitral
proceedings. This necessarily means that until the arbitration starts such parties
cannot make an effective agreement to dispense with reasons, for that is treated as an
agreement to exclude the jurisdiction of the court—see, now, Clause 69(1).

330. Again we are not persuaded of the value or the validity of this, but we have preserved
the existing law for the same reason as we have preserved the present position on
stays. Our own view is that this distinction should disappear.

331. It should be noted that we have not preserved the “‘special categories” dealt with in
section 4 of the Arbitration Act 1979. These were intended as a temporary measure,
and the weight of the responses received persuaded us that they should now go.

Consumer Arbitration Agreements

Clauses 89 to 93
B82) In these Clauses we have consolidated the provisions of the Consumer Arbitration A2-081
Agreements Act 1988. We have suggested this in order to bring within the Bill all the
current major enactments on arbitration, so as to provide as complete a code as
possible.

Boos We did not regard it as part of our remit to redraft this legislation, so we have not
sought responses on it. However, we are aware that problems have arisen in construing
this Act. For example, it has been suggested that what now appears as Clause 89 makes
it far from clear whether a building contract made by a consumer falls outside the Act
if the consumer has sought a number of quotes for the work.

3348 We are also aware of a more fundamental problem. This country has recently
implemented Council Directive 93/13 through the Unfair Terms in Consumer
 702 Appendix 2

Contracts Regulations 1994 (S.I. 1994/3159). These Regulations came into force on
Ist July 1995. Thus at the moment a situation exists where there are two parallel
regimes for protecting consumer interests in the context of arbitration agreements.

WwWwon . To our minds this is an unsatisfactory state of affairs, likely to cause confusion and
difficulties. Although we have not attempted to trespass into the field of consumer
protection, it does seem to us that it would be unfortunate if the opportunity were not
taken to clarify the position. On the face of it, the solution would seem to be to
maintain the suggested repeal of the 1988 Act and to omit Clauses 89 to 92 of the Bill.
If this were to be done, then we would welcome at least a cross-reference in the Bill
to the Regulations, so that anyone reading the Bill will be made aware of them. As we
understand it, the Regulations would not affect our international obligations regard-
ing arbitrations (for example, the New York Convention) though doubtless those
charged with the question of consumer protection will consider this aspect of the
matter.

336. We would, however, emphasise that the arbitration community is extremely anxious
that the Bill should not be delayed. The fact is that this country has been very slow
to modernise its arbitration law and this has done us no good in our endeavour to
retain our pre-eminence in the field of international arbitration, a service which brings
this country very substantial amounts indeed by way of invisible earnings.

337. It is for these reasons that we have included in Clause 88 a power to amend or repeal
Clauses 89 to 93. If the situation cannot be clarified or settled without delaying the
progress of the Bill, then this mechanism could allow the Bill to go forward with the
Consumer Arbitration Agreements Act in it, and the matter dealt with later.

Small Claims Arbitration in the County Court

Clause 94 Exclusion of Part 1 in Relation to Small Claims in

the County Court
A2-082 338. There is an entirely separate regime for the arbitration of small claims in the county
court. The Bill is not intended to affect this.

339. As we observed earlier in the Report, we considered the suggestion that we should
incorporate in the Bill another system for the arbitration of small claims, but for the
reasons given, we have not adopted this suggestion and do not recommend it.

Appointment of Judges as Arbitrators

Clause 95 Appointment of Judges as Arbitrators

A2-083 340. In this Clause we have set out the existing provisions for the appointment of
Commercial Judges and Official Referees as arbitrators.

341. We firmly of the view that provision should be made for any judge to be appointed as
an arbitrator, rather than limiting the power to the two kinds of judge presently
included. It was not, however, possible to obtain agreement to this proposal from the
concerned departments in time to put it in the Bill.
 Appendix 2 703

342. We appreciate that in view of the court commitments of judges generally, it is not
possible to allow judges to act as arbitrators whenever they are asked and are
willing
to do so. Hence the present requirement now set out in subsections (2) and (3).
We
would suggest that the same or a similar provision is used for all other judges.

B43 We are told that the probiem is particularly acute in the field of patents and the like,
where the parties are anxious to arbitrate but where the only acceptable arbitrators are
judges.

Statutory Arbitrations
Clauses 96 to 101
OA: These provisions adapt Part 1 to statutory arbitrations. This exercise is not within our A2-084
remit and we have played no part in it.

CHAPTER 4

Part III oF THe Bini

Clauses 102 to 107

S40) The purpose of Part III is to re-enact the substance of the provisions relating to the A2-085
recognition and enforcement of foreign arbitral awards contained in Part II of the
Arbitration Act 1950 and the Arbitration Act 1975, which gave effect to the U.K.’s
treaty obligations under the Geneva and New York Conventions respectively.

346. The Geneva Conyention only remains in force as between state parties to that
Convention which have not subsequently become parties to the New York Conven-
tion. So far as the U.K. is concerned, it is believed that only a few states (e.g. Malta)
remain in that category. Accordingly, in the interest of brevity, Clause 102 states
simply that Part II of the Arbitration Act 1950 continues to apply to Geneva
Convention awards which are not also New York Convention awards rather than
restating or reframing the non-user friendly language of Part I of that Act.

Se The New York Convention on the Recognition and Enforcement of Foreign Arbitral
Awards adopted by the U.N. Conference on International Arbitration on 10 June 1958
is not only the cornerstone of international dispute resolution; it is an essential
ingredient more generally of world trade. If it did not exist, or even if it were not to
have been widely adopted by the world’s trading nations, contracting parties from
different legal cultures might be reduced to resolving their disputes in the courts of
a country which would be alien to either one or both of them (because of doubts as
to the enforceability across national boundaries of arbitration awards made in a neutral
country). Clauses 102 to 107 of the Bill restate the current implementing legislation
(contained in the 1975 Act) in concise and simple language.

348. As we have indicated earlier in Chapter 2, we take the view that the definition of ‘‘in
writing” is consonant with Article II.2 of the New York Convention. For clarity
704 Appendix 2

therefore, we consider that the Bill can be improved by including an express cross-
reference to this definition in Clause 103(2). This would have the added advantage of
ensuring that the enforcement of foreign awards under Clause 66 and enforcement
under the New York Convention are in this respect in line with each other.

Sah One intriguing question was highlighted by the decision of the House of Lords in
Hiscox v. Outhwaite [1992] 1 A.C. 562. This concerns the case of an arbitration with
its “seat” in country A and an award that states expressly that it was “made” in
country B. Country A might be a New York Convention country, and B not—or vice
versa. (Article I.1 of the Convention provides that it shall apply to “. . . awards made
in the territory of aState other than the State in which recognition and enforcement of
such
awards are sought...” (emphasis added)).

350. Distinguished authors (writing before the decision in Hiscox) are split on the ques-
tion. Dr A.J. van den Berg in the first edition of his authoritative book on the
Convention (at pp. 294/295) states: ““The award must be deemed to be made in the
country which 1s indicated in the award as [the] place where the award was made.”
(emphasis added).

Soult But the late Dr FA. Mann Q.C. (in [1985] Arb. Int. 107/108) wrote, after recalling
that little learning then existed on the question of where an award is made,

“Tt is submitted that an award is ‘made’ at the place at which the arbitration is held,
i.e. the arbitral seat . . admittedly the view suggested here attributes a somewhat
strained meaning to the word ‘made’. But for the reasons given the natural meaning
of the word leads to such strange consequences that a less literal interpretation
would seem to be justified”’.

SoZ. In Hiscox the question arose as to whether, where the “‘seat” of the arbitration was in
England and for all practical purposes it was a domestic “English” arbitration, the
award became a “foreign” award for the purposes of the Convention merely because
it stated expressly on its face that it was signed in Paris? According to the House of
Lords, applying a literal interpretation of Article I.1 of the Convention, the answer
was “Yes”.

ps: So far as arbitrations held in England, Wales or Northern Ireland are concerned, the
“strange consequences” of this result have been removed by Clause 53 ofthe Bill (see
above).

354. The DAC is of the view that this question should be resolved by incorporating into
Part I of the proposed new legislation an equivalent provision to that contained in
Clause 53—to the effect that an award shall be treated as made at the seat of the
arbitration, regardless of where it was signed, despatched or delivered to any of the
parties. It seems to us that this is consonant with the U.K.’s treaty obligations under
the New York Convention.
 Appendix 2 705

CHAPTER 5

Part IV oF THE BILL

355. We have drawn attention to Clause 111 under Clause 84. The other Clauses in this A2-086
Part we trust are self-evident, and were not within the remit of the DAC, although we
do welcome the inclusion of Northern Ireland.

CHAPTER 6

SUPPLEMENTARY RECOMMENDATIONS

356. The foregoing discussion is based on the text of the Bill as it was introduced in A2—087
December 1995. Since that date we have had the advantage of considering the
speeches made in the House of Lords on the Second Reading and some comments
and suggestions from others, as well as looking once again at the text of the Bill in the
course of preparing this Report. In consequence, we make the following recom-
mendations.

Clause 2. Scope of Application

357. A number of foreign readers have expressed the view that Clause 2(2)(a) does not A2-088
sufficiently make clear that the applicable law referred to is the law applicable to the
arbitration agreement, rather than the law applicable to the substantive agreement
(which would have far reaching and wholly unintended consequences). For the sake
of clarity, we would suggest an amendment along the following lines:

‘“« .. where the applicable law to that agreement is the law of England and Wales
)
or Northern Ireland; and... ’

Clause 7 Separability of Arbitration Agreement

358. In view of the definition of ‘“‘agreement” in Clause 5, we suggest that the words A2-089
“(whether or not in writing)” be inserted after the words ‘another agreement” in
Clause 7, since otherwise it could be said that this Clause is only effective in relation
to such other agreements as are in writing. This is not the intention.

Clause 14(5) Commencement of Arbitral Proceedings

359. It has been suggested that the words “‘gives notice” should be replaced by “‘serves”’, A2-090
in conformity with Clauses 14(3) and 14(4). This is a matter for Parliamentary
Counsel to consider.

Clause 16(6)(b) and Clause 21(4)

360. The word “‘any” follows a negative and so could be read as meaning “all”. This is not A2-091
the intention. We therefore suggest that the words “one or more matters” follow the
word ‘“‘any”’ in these provisions.
 706 Appendix 2

Clause 24(4) Power of Court to Remove Arbitrator

A2-092 361. We have explained in Chapter 1 above the reasoning behind Clause 29(3). Upon
further reflection, it appears to us that Clause 24(4) needs to be altered for the same
reason. As currently drafted, if an arbitrator resigns and is sued for his fees, he is not
protected from such a breach of contract action by the immunity in Clause 29. Rather,
he can apply to the court for protection under Clause 25(3), and the court may see fit
to grant this, if appropriate. However, if an arbitrator does not resign, but is removed
by the court under Clause 24, it would appear that he will have the benefit of the
immunity in Clause 29, come what may. In such circumstances, the parties could not
sue him for breach of contract, unless they could demonstrate “‘bad faith”. This is
anomalous. The DAC therefore recommends that Clause 24(4) be amended to provide
that as well as making such order as it thinks fit with respect to an arbitrator’s
entitlement to fees, where the court removes an arbitrator, it also be given a discretion
to make such order as it thinks fit with respect to an arbitrator’s immunity under
Clause 29, Such wide words would enable the court, for example, to remove the
immunity but impose a ceiling on the amount of any liability.

362. Arbitrators may also be removed by agreement of the parties. However, the DAC does
not consider that a similar provision be made with respect to this, given that it would
be contrary to the whole basis of Clause 29 for parties to be able to agree on the
remoyal of an arbitrator’s immunity.

Clause 25(2) Resignation of Arbitrator

A2-093 363. There is a rogue “in writing” in this subsection, which should be deleted by virtue
of Clause 5(1).

Clause 38(3) Security for Costs

A2-094 364. In the draft Clauses published in July 1995, the power to order security for costs was
expressed in very general terms. This elicited a number of responses which expressed
concern that there were no principles or guidelines for the exercise of this power. It
is certainly the case that the power to order security for costs, unless exercised with
great care, can all too easily work injustice rather than justice.

365. The rules and principles applied by the courts with respect to security for costs have
been carefully worked out over many years, and are contained in a large amount of
case law that has developed alongside Order 23 of the Rules of the Supreme Court.
Given the concerns referred to above, the DAC considered whether to set out these
rules and principles in the Bill. In the end we decided that this would be simply
impracticable: a codification of all the relevant case law would be extremely difficult,
would result in very lengthy and complicated provisions, and may well have an
unintended impact on how this area is approached by the courts.

366. Clause 38(3) of the current draft of the Bill reflects what we initially concluded was
the only solution to this difficulty: it provides that arbitrators are to have power to
order a party to provide security for costs “‘wherever the court would have power. . .”
and that this power is to be exercised: “‘on the same principles as the court’’. In the
light of many comments received since the Bill was introduced (including a significant
number of criticisms of this subsection from foreign arbitration specialists and
institutions), we have had to reconsider this area, and, after much careful thought, we
have concluded that Clause 38(3) requires amendment for the following reasons:
 Appendix 2 707

i. As drafted, this subsection is very far from being “user-friendly”. Without

referring to the Rules of the Supreme Court, and the case law referred to in the
relevant part of the White Book, it would be impossible for any domestic or foreign
user to determine what the nature and scope of the power conferred here is. Lay
arbitrators may have difficulty locating or even, perhaps, understanding the
relevant law (any error of law, of course, being a potential ground for appeal). In
the case ofa foreign arbitration that has its seat in this country for the sole reason
that this is a neutral forum, it would be extremely undesirable for parties to have
to instruct English lawyers in order to make sense of this provision. This alone
could constitute a powerful disincentive to selecting this country as an arbitral
seat. Indeed, throughout the Bill, we have been very careful to avoid any such
express cross-references to other legal sources.

li. One of the grounds on which an order for security for costs may be made in court
is that the plaintiff is ordinarily resident out of the jurisdiction: see Order 23, Rule
1(1)(a) of the Rules of the Supreme Court. On further consideration of the matter,
we have concluded that it would be very damaging to this country’s position as the
leading centre for international arbitrations to make this ground available to
arbitral tribunals. It would reasonably appear to those abroad who are minded to
arbitrate their claims here that foreigners were being singled out for special and
undeserved treatment. (Of course if the parties agree to invest their tribunal with
power to order security for costs on this ground, they are free to do so).

il. On reflection, the concerns expressed above as to the potential scope of the power
conferred by Clause 38(3) and the possibilities of injustice may be overstated. The
other provisions of the Bill confer very far-reaching powers on arbitrators, and it
has been made clear throughout that this is tempered, for example, by the
mandatory duty in Clause 33. The same would be true of the power to order
security for costs: in exercising the power, the tribunal would have to comply with
Clause 33, and any serious irregularity could form the basis of a challenge. In
agreeing to arbitration, parties in effect agree that their disputes could be decided
differently from a court, although in accordance with principles of justice. The
fact that arbitrators may decide an issue as to security for costs differently from a
judge appears to be no more than an aspect of this. It is true that if this power is
improperly exercised, a claim could, for example, be stifled without justification.
It is equally true, however, that the Bill contains mechanisms for parties to
challenge any such injustice or improper conduct, and sufficient warnings to
arbitrators as to their mandatory duties.

367. We remain of the view that the power to order security for costs is an important one,
and should be given to arbitrators, and also that some basic restrictions should be set
out in this Clause, in the light of the points made above. To this end, we recommend
that Clause 38(3) be deleted, and replaced with a new provision along the following
lines:

(3) The tribunal may order a claimant to provide security for the costs of the
arbitration.

Such power shall not be exercised on the grounds only that such party is—

(a) an individual ordinarily resident in a state other than the United King-
dom,
 708 Appendix 2

(b) a body corporate which was incorporated in or has its central management
and control exercised in a state other than the United Kingdom.”

368. Such a provision would allow arbitrators a flexibility in exercising this power, within
the confines of their strict duty in Clause 33. The risk of an order on the sole ground
that a party is from abroad, would be removed. Similarly, there would be no need for
an arbitrator, whether domestic or foreign, to discern the English or Northern Irish
law in this area, or, indeed, to instruct local lawyers in this respect. An arbitrator may
well exercise this power differently from a court (as with many other powers conferred
by the Bill), but any misuse could be corrected under the other provisions of the
Bill.

369. It is of course the case that orders for security are not to be made automatically, but
only when the justice of the case so requires. We appreciate that cases are likely to arise
when deciding what is just may be very difficult. For example, a claimant may contend
that he might be prevented from continuing if he has to put up security, whilst at the
same time a respondent is contending that unless security is provided, he is likely to
be ruined. However, to our minds, this is merely an example of the balancing of
factors in order to achieve the most just result possible which is part of the essential
function of arbitrators.

370. The power to award security for costs under the proposed provision could be
exercised against counter-claimants as well as claimants. This we have covered in the
definition Clause (see Clause 82(1)).

Clause 66 Enforcement of Award

A2-095 37k In the present Bill, we have provided that leave by a court to enforce an award may
not be given if the award was so defective in form or substance that it is incapable of
enforcement, if its enforcement would be contrary to public policy or if the tribunal
lacked substantive jurisdiction.

372. These are what are described as “‘passive”’ defences to the enforcement of an award.
The “positive” steps that may be taken are those we have set out in Clauses 67 to 69,
together with the rights preserved in Clause 72 for someone who has taken no part in
the arbitral proceedings.

SHS). In our view the way we have drafted Clause 66 sufficed to cover all the cases where
enforcement should be refused. However, since the Bill was published it has been
suggested to us that it would be advisable to spell out in more detail two particular
cases, namely those where the arbitral tribunal has purported to decide matters which
are simply not capable of resolution by arbitration, whatever the parties might have
agreed (e.g. custody ofa child) and those where the tribunal has made an award which
(if enforced) would improperly affect the rights and obligations of those who were not
parties to the arbitration agreement.

Sy Ae On the present wording, even if it could be said that either or both these cases fell
outside the three categories where leave to enforce shall not be given, it does not
follow that the Clause somehow sanctions enforcement in those cases. The reason for
this is that the Clause does not require the court to order enforcement, but only gives
it a discretion to do so. That discretion is only fettered in a negative way, i.e. by setting
out certain cases where enforcement shall not be ordered. To our minds there is
 Appendix 2 709

nothing to prevent a court from refusing to enforce an award in other appropriate

cases. Unlike, for example, Clause 68, there is no closed list of cases where leave to
enforce an award may be refused. However, on reflection we consider that it would be
preferable to set out the two cases as further instances where the discretion of the
court is negatively fettered, and we would suggest that a further category is added to
subsection (3) along the following lines:

“it purports to decide matters which are not capable of resolution by arbitration or
grants relief which (if enforced as a judgment or order of the court) would
improperly affect the rights of persons other than the parties to the arbitration
agreement.”

375. Such a provision would best appear before the catch all case of public policy. It will
be noted that this wording takes advantage ofthe definition of parties to an arbitration
agreement to be found in Clause 82(2). Furthermore, to put the matter beyond any
doubt, we would suggest that it is made clear that subsection (3) is not a closed list,
by inserting suitable words.

376. It is vital to include some such word as “improperly” since there is no doubt that
there are many cases where third party rights and obligations are perfectly properly
affected, such as guarantors or insurers who haye agreed to pay the amount of an
award to which they are not a party. Furthermore, it must always be borne in mind
that the parties’ rights and obligations may well be governed by a law other than our
own, under which, for example, matters are arbitrable which would not be the case
under our own law. In such cases it would not automatically follow that the court
would refuse to enforce the award, unless of course public policy dictated that
course.

377. Apart from the enforcement procedure set out in this clause, under our law it is
possible to bring an action on an award, in much the same way as an action is brought
on an agreement. This method is expressly saved in Clause 81(2)(b). There is also an
oblique reference to this in Clause 66(5) in the reference to “rule of law”. On
reflection, it seems to us that it would make for greater clarity to add the words “or
by an action on the award” at the end of this subsection.

378. There is one further point. It seems to us that there is much to be said for a suggestion
that the court must be informed on an application for enforcement if the award is an
agreed award (see Clause 51) if this is not apparent from the award itself, and that any
enforcement order or judgment ofthe court should also state that it is made in respect
of an agreed award, thus putting everyone concerned on notice of that fact and
avoiding the risk that third parties might be misled into believing that the award was
one made at arm’s length. We suggest that these requirements be added to Clause
66.

Clause 69 Appeal on Point of Law

379. It has been pointed out that Clause 69(8) sets out the two pre-conditions to an appeal A2—096
to the Court of Appeal as alternatives, whereas they should be cumulative (as with the
similar pre-conditions in section 1(7) of the 1979 Act). We recommend that the
Clause be amended accordingly.
 710 Appendix 2

Clause 70 Challenge or Appeal: Supplementary Provisions

A2-097 380. We note that the power to order security or bring the money payable under the award
into court only extends at present to applications under Clauses 67 or 68. This should
be extended so that the court can impose these requirements as a condition of
granting leave to appeal under Clause 69. This is a tool of great value, since it helps
to avoid the risk that while the appeal is pending, the ability of the losing party to
honour the award may (by design or otherwise) be diminished.

Clause 74 Immunity of Arbitral Institutions, etc.

A2-098 381. On reflection we consider that the wording of Clause 74(2) should be tightened so as
to make clear that the institution or person concerned is not liable without more for
anything done or omitted to be done by the arbitrator. Thus we suggest that the words
“by reason only of” should be substituted for the word “‘for” in this subsection.

Clause 79 Powers of Court to Extend Time Limits Relating to

Arbitral Proceedings
A2-099 382. It has been pointed out to us that Clause 79(1) as presently drafted could be said to
be inapplicable to, for example, Clause 70(3) where the time stipulated is not one
having effect in default of agreement between the parties. We agree with this
comment and suggest that Clause 79(1) be amended along the following lines:

““.. the court may by order extend any time limit agreed by them in relation to
any matter relating to the arbitral proceedings or applicable by virtue of any
provision of this Part”.

Clause 81 Saving for Certain Matters Governed by Common

Law
A2-100 383. We suggest that two additions should be made to the specific cases mentioned in
subsection (2).

384. The first of these relates to confidentiality. For reasons we have explained, we have not
included specific provisions dealing with this matter. However, it seems to us that it
would be valuable to highlight the fact that our law does deal with it. Thus we suggest
a further category which could perhaps be in the following words:

“confidentiality and privacy in relation to arbitrations”.

385. The second addition we propose relates to arbitrability, which we have discussed in
the context of Clause 66. Again there is a lot of important law on this topic. We
suggest a further category which could perhaps be in the following words:

“whether a matter is capable of resolution by arbitration”.

386. The title to this Clause is “Saving for certain matters governed by common law”’. We
would prefer the expression ‘‘other rules of law” to the words ‘‘common law” as this
would include legislation and be clearer to non-lawyers and those from abroad.

Clause 82. Minor Definitions

A2-101 387. The definition of “question of law” started life as part of the Clause dealing with
appeals to the court; now Clause 69. The objective was to make clear that there was
no question of an appeal in respect ofamatter of foreign law. Our law treats questions
 Appendix 2 7h

of foreign law as questions of fact. Furthermore, we can see no good reason for
allowing an appeal on foreign law, since ex hypothesi the court cannot give a definitive
or authoritative ruling on such matters. The courts have refused to grant leave to
appeal on questions of foreign law, but attempts are still made and it would be
desirable to put the matter beyond doubt.

388. The definition was moved to this Clause. It had, of course, to accommodate the fact
that the Bill is expressed to apply to Northern Ireland as well as England and Wales.
However the present definition, while it does this, also seems to indicate that where
the seat of the arbitration is in neither of these places, the meaning of “question of
law” is not confined to questions of(respectively) English law or the law of Northern
Ireland. We would suggest that the definition be amended, so that “question of law”
means a question of law of England and Wales where the application for leave to
appeal is made to a court in England and Wales, and a question of the law of Northern
Ireland, where an application for leave to appeal is made to a Court in Northern
Ireland.

Clause 85 Domestic Arbitration Agreements

389. It has been pointed out to us that the way “domestic arbitration agreements” is A2-102
defined (which is taken from the existing legislation) means that agreements made by
sovereign states which incorporate an arbitration clause fall into this category. We are
sure that this was not the intention, so that if the distinction between domestic and
non-domestic arbitrations is to remain, the opportunity should be taken to correct this
anomaly.

Clause 95 Appointment of Judges as Arbitrators

390. For the reasons set out in our discussion of this Clause in Chapter 1, we recommend A2-103
that this provision be extended to judges generally.

Clauses 96-100 Statutory Arbitrations

391. Although the application of Part | to statutory arbitrations is not part of our remit, A2-104
we note that during the Second Reading Lord Lester suggested that it might be a
requirement of European law in cases of compulsory arbitration that the arbitrators
should be independent as well as impartial. We can offer no view on this point, but
if it is felt appropriate to include any such requirement in the context of statutory
arbitrations, great care should be taken to make clear that this requirement has no
application to private or other consensual arbitrations, so as to avoid any risk of this
concept being imported into other cases. This, for the reasons already given, would
in our view be most damaging. We understand that Lord Lester shares our view that
a requirement of independence for private or other consensual arbitrations is neither
necessary nor desirable.

Clause 103 New York Convention Awards

392. For the reasons set out in our discussion in Chapter 3, this Clause should be amended A2-105
so as to cross-refer to the definition of writing to be found in Part I of the Bill, and
should also incorporate the recommendation that an award should be treated as made
at the seat of the arbitration, regardless of where it was signed, despatched or
delivered to any of the parties.
 Wz Appendix 2

Clause 107. Saving for Other Bases of Recognition or

Enforcement
A2-106 393. It has been pointed out that, as drafted, this Clause may not save enforcement under
Part I of the 1950 Act. This is a matter for Parliamentary Counsel to consider.

CHAPTER 7

CONCLUSIONS

A2-107 394. The Arbitration Bill and this Report are the result of along and wide-ranging process
of consultation with interested parties, probably the most comprehensive for any Bill
of this kind. Our recommendations are based on the many responses that we have
received as well as our own researches and discussions. In a number of cases, of
course, we have had to make decisions on matters where more than one point of view
has been expressed. What we should emphasize, however, is that all were agreed that
it is high time we had new legislation, to the extent that many people have stated to
us that for this reason they were not disposed to delay progress by stubbornly insisting
on their point of view on particular points; and have demonstrated that this is the case
by being ready and willing to reach compromise solutions. We are convinced (as all
are) that further delay will do grave and probably irretrievable damage to the cause of
arbitration in this country, thus damaging our valuable international reputation as well
as the promotion here of this form of dispute resolution.

Bo: We have attempted to produce a draft which can be read, understood and applied by
everyone, not just lawyers learned in this branch of our law. Thus our aim has been
to make the text “user-friendly” and the rules it contains clear and readily compre-
hensible, so that arbitration is available to all who wish to use it. This has not been an
easy task, since in the nature of things this form of dispute resolution raises highly
complex and sophisticated matters. We have attempted it, however, in the hope that
our efforts will not only encourage and promote arbitration, but also help to achieve
what we believe to be the true object of this form of dispute resolution, namely (in the
words of Clause ] of the Bill itself) to obtain the fair resolution of disputes by an
impartial tribunal without unnecessary delay or expense.
 Appendix 2 |)

SUPPLEMENTARY REPORT ON THE

ARBITRATION AcT 1996

Chairman
The Rt Hon Lord Justice Saville
January 1997
Supplement
to
The DAC Report on the Arbitration Bill, of February 1996

CONTENTS

Para.

Chapter 1 IND ROD WGRION Ge ratierteticsst

reer recreate A2-108

Chapter 2. PART I OF THE ACT ...........ccc ts

ea ta ae A2-109

Chapter 3 PART SUL © BY EGA Cea iacocecds. Bie trees eect eee n estes A2-129

Chapter 4 BARA TI © Bah BIEN Gaie ) eese cae sahs ates, sae cccte tects ee A2-135

Chapter 5 PARGAIVRORS THES AGW Se cee ccoiceceetvn

eee A2-139

Appendix A ©THE NEW RSC ORDER 73 & ALLOCATION

RUDBEReese soe a sca cscs aacee ee toae tssadeneue Senee ve naaetnes A2-140
S.I. and Schedules not reproduced here and now
superseded.
See Appendix 6, Section E Civil Procedure Rules
and Court Forms.

Appendix B TRANSITIONAL PROVISIONS .........::eeeeeeserees A2-144

S.I. not reproduced here. See Appendix 2 For
Arbitration Act 1996 (Commencement No. 1)
Order 1996

CuHaPTerR 1

INTRODUCTION

1. In our Report of February 1996 we discussed the provisions of the Arbitration Bill as A2-108
introduced in the House of Lords in December 1995. In Chapter 6 of that Report we
 714 Appendix 2

set out some recommendations for changes to some of the provisions of the Bill,
having considered the speeches made in the House of Lords on the Second Reading
and some comments and suggestions from others; and having also carried out our own
re-examination of the Bill. This Report discusses the changes that were made to the
Bill during its passage through Parliament and thus the differences between that Bill
and the Arbitration Act 1996, which received the Royal Assent on 17 June 1996. All
these changes were recommended by the Committee, though some differ from or are
in addition to the suggestions originally made in Chapter 6. Not all the changes
suggested in Chapter 6 were adopted, but again this met with the approval of the
Committee, after yet further reflection and consideration of comments and sugges-
tions made to us.

Certain decisions were also taken by the DAC after the Act received Royal Assent,
with respect to the commencement of its provisions. These are also discussed with
respect to the particular sections affected, and in the context of the transitional
provisions.

This Supplementary Report is to be read in conjunction with our Report of February

1996. The numbering of sections corresponds to the Act in its final form. As several
sections were added to the Bill during its passage through Parliament, some of the
references are slightly different from those in Chapter 6 of our February 1996
Report.

The new Order 73 of the Rules of the Supreme Court, together with the new
Allocation Order (which stipulates the Courts to which arbitration applications may
be made) have been included in Appendix A to this Report, together with a short
commentary. The new Order 73 has been completely recast in order to reflect the
changes brought about by the Act and to simplify the procedure for Court applica-
tions concerning arbitration. Although drafted in consultation with some members of
the DAC, the new rules were not within the latter’s remit, and are therefore included
here simply for ease of reference.

By the Arbitration Act (Commencement No. 1) Order 1996 (S.I. 1996 No. 3146 (C.
96)), the Act (with the qualifications set out in that Order) comes into force on 31st
January 1997. This Order also contains transitional provisions. The Order is repro-
duced in Appendix B, together with a short commentary.

CHAPTER 2

Part I or THe Acr

Section 2. Scope of Application

A2-109 6. Clause 2 of the Bill as introduced in the House of Lords in December 1995, read as
follows:

“2.—(1) The provisions of this Part apply where the law of England and Wales or
Northern Ireland is applicable, or the powers of the court are exercisable, in
accordance with the rules of the conflict of laws.
 Appendix 2 715

(2) They apply, in particular—

(a) to matters relating to or governed by the arbitration agreement, where the
applicable law is the law of England and Wales or Northern Ireland; and

(b) to matters governed by the law applicable to the arbitral proceedings, where
the seat of the arbitration is in England and Wales or Northern Ireland.

(3) The following provisions apply whatever the law applicable to the arbitration
agreement or the arbitral proceedings—

(a) sections 9 to 11 (stay of legal proceedings);

(b) section 43 (securing the attendance of witnesses) and section 44 (court
powers exercisable in support of arbitral proceedings); and

(c) section 66 (enforcement of arbitral awards).

(4) The court may refuse to exercise any power conferred by this Part if, in the
opinion of the court, the fact that the seat of the arbitration is outside England and
Wales or Northern Ireland, or that when designated or determined the seat is likely
to be outside England and Wales or Northern Ireland, makes it inappropriate to
exercise that power.”

This provision was explained at paragraphs 23 to 25 of our Report of February 1996.

The intention was to set out a clear statement identifying the scope of application of
the Act, without attempting to codify any rules of the conflict of laws. The basic
elements of this clause, as originally drafted, may be summarised as follows:

is Clause 2(1) simply provided that the Act applies wherever English law is found to
be applicable to an arbitration, or where the powers of the English court are
exercisable in relation to an arbitration. Whether or not English law is applicable,
and whether or not the powers of the English court are exercisable, are both
matters to be determined by reference to appropriate rules of the conflict of laws,
which are to be found elsewhere.

il. Clause 2(2), as originally drafted, further refined this basic principle by recognis-
ing that different elements in an arbitration may well be governed by different
laws. The law governing the merits of the dispute (e.g. a choice of law clause in a
contract) may not necessarily govern the arbitration clause itself, as the latter
constitutes a separate agreement. Similarly, the law governing the procedure ofthe
arbitration may well be a different law from that governing the merits of the
dispute. Consequently, if the arbitration agreement was governed by English law,
those provisions in the Act which concern arbitration agreements would apply
(Clause 2(2)(a)). Similarly, if the seat of the arbitration was in England and Wales
or Northern Ireland, those parts of the Act which concern the arbitral procedure
(as distinct from matters of substance) would apply (Clause 2(2)(b)).

This further refinement was necessary in order to avoid the danger that all the
provisions of Part I of the Act would be imported if English law is found to govern
one particular aspect of an arbitration. For example, an arbitration may have a
French seat, with French law governing the procedure, but English law governing
the arbitration agreement. In such a situation, only those provisions of the Act
which concern arbitration agreements should apply. It would be quite wrong to
apply provisions of the Act which concern arbitral procedure, as this would be
governed by French law. Indeed, if this were not the case, a choice of English law
716 Appendix 2

to govern an arbitration agreement would entitle a party to invoke the jurisdiction

of the English court wherever the seat of the arbitration might be, thereby
endowing the English court with an unacceptable extra-territorial jurisdiction.
iii. The remaining parts of the original Clause 2 made specific provision for the New
York Convention (Clause 2(3)(a) and (b)—stays of legal proceedings and the
enforcement of awards) and enacted section 25 of the Civil Jurisdiction and
Judgments Act 1982 (Clause 2(3)(b)—powers in support of foreign arbitra-
tions).

In Chapter 6 of our February 1996 Report, at paragraph 357, we recommended that

the original Clause 2(2)(a) be slightly amended in order to make clear that the
applicable law referred to there was the law applicable to the arbitration agreement,
rather than the law applicable to the substantive agreement.

Following the introduction of the Bill into Parliament, we had the benefit of further
detailed discussions with a number of leading arbitration experts from abroad, and
took the opportunity of reconsidering this provision. It is fair to say that whilst there
was unanimous support for the inclusion of such a provision identifying the scope of
the Act, there was considerable disquiet as to the clause as drafted. It was felt that the
provision was sound in principle, but unworkable in practice, for the following
reasons:

i. The clause was complicated and extremely difficult to understand. To this end, it
appeared to defeat its own object.
ii. In order to apply Clause 2(2), it was necessary to be able to identify all those
provisions of the Act which concerned the arbitration agreement, as distinct from
all those that concerned the arbitral procedure. As explained above, if for example
English law governed the arbitration agreement, but not the arbitral procedure, by
virtue of Clause 2(2) only those provisions in the Act which concerned the
arbitration agreement (as opposed to the arbitral procedure) would apply. The
provisions of the Act had therefore to be individually characterised and separated
in this way.

However, the original clause made no attempt to characterise each provision of the
Act, precisely because this had proved an extremely difficult and complex exercise.
Many provisions concern both arbitration agreements and arbitral procedure, and
there appeared to be a divergence of view with respect to many others.
ii. There was a feeling amongst certain foreign experts that the original clause gave
the wrong impression, in that it appeared to endow the English court with
inappropriate extra-territorial powers, when this was clearly not intended.

10. In the light of these difficulties, the DAC decided to recommend recasting the whole
provision in a different form that would be far easier to understand and that would
be entirely workable in practice. The policy behind the section, however, was not
materially altered. The final section 2 provides a clear and simple scheme, which was
welcomed by all those who had originally expressed concerns.

11. Section 2(1) states the basic rule: Part I of the Act applies to arbitrations which have
their seat in England and Wales or Northern Ireland. The concept of a “‘seat”? was
referred to in our February 1996 Report, and is defined in section 3 of the Act. The
seat of an arbitration refers to its legal place, as opposed to its geographical location.
 Appendix 2 717

It is, of course, perfectly possible to conduct an arbitration with an English seat at any
convenient location, whether in England or abroad.

12. If the seat of an arbitration is in England and Wales or Northern Ireland, the
arbitration will be governed by this Act. If, however, a foreign law has been chosen to
govern any particular aspect of the arbitration, such as the arbitral procedure or the
arbitration agreement, or is otherwise applicable to any such aspect, this is catered for
by section 4(5). Therefore, reference may be made to this Act in the first instance, and
then back to another law with respect to a specific issue. Whilst a process of
characterisation may still have to be done, the combination of section 2 and section
4(5) avoids the dangers that:

— achoice of English law with respect to one part of an arbitration will import other
parts of the Act that concern other aspects of the arbitration;
— a choice of England as the seat of the arbitration will necessarily entail the
imposition of every provision of the Act.

13. Sections 2(2) to (5) set out a series of deviations from the basic rule in section
2(1).
les Section 2(2) caters for the New York Convention. Under the terms of this Conven-
tion, the English courts are obliged to recognise and enforce foreign arbitration
agreements and foreign arbitral awards. Sections 9 to 11 (stays of legal proceedings,
etc.) and section 66 (enforcement) could not, therefore, be restricted to arbitrations
with a seat in England and Wales or Northern Ireland. These particular sections
therefore apply even if the seat of an arbitration is abroad. Equally, these sections will
apply if no seat has been designated or determined.

Section 2(3) extends the power of the court to grant interim relief in support of
arbitrations with a foreign seat, thereby giving effect to section 25 of the Civil
Jurisdiction and Judgments Act 1982, as was intended by the original Clause 2(3)(b).
The power of the court to exercise these powers is restricted in the last part of this
section to appropriate cases. There may well be situations in which it would be quite
wrong for an English court to make an interim order in support of a foreign
arbitration, where this would result in a possible conflict with another jurisdiction.

16. Section 2(4) deals with those cases where a seat has still to be designated or
determined, but where recourse to the court is necessary in the meantime. For
example, an arbitration agreement may provide that the tribunal, once constituted,
will designate the seat of the arbitration. The agreement may also provide that any
arbitration must be commenced within a specified time period. If that time period is
exceeded, could a party make an application to the English Court pursuant to section
12 of the Act for an Order extending time for the commencement of proceedings (e.g.
in order that a seat may be designated)? See, e.g. International Tank & Pipe S.A.K. v.
Kuwait Aviation Fuelling Co. K.S.C. [1975] Q.B. 224 (CA). Clearly this would not be
possible under section 2(1), as long as the arbitration was without an English or
Northern Irish seat. It was our view, however, that the English court should be able
to exercise supportive powers if there is a sufficient connection with England and
Wales or Northern Ireland such that this is appropriate (7.e. the requirement in section
2(4)(b)), and if there will be no clash with a foreign jurisdiction. For example, there
will be cases where it is extremcly likely that once a seat is designated, that seat will
be England and Wales or Northern Ireland.
 718 Appendix 2

17. Section 2(4) therefore gives the English court powers where that court is satisfied, as
a matter of English law, that the arbitration in question does not have a seat elsewhere.
As long as there is no seat elsewhere, there could be no possible conflict with any other
jurisdiction.

18. Both sections 2(3) and 2(4) are based on a very clear policy: the English court should
have effective powers to support an actual or anticipated arbitration that does not fall
within section 2(1). However, such powers should not be used where any other foreign
court is already, or is likely to be, seized of the matter, or where the exercise of such
powers would produce a clash with any other more appropriate forum.

IK), Section 2(5) provides that section 7 (separability) and section 8 (death of a party)
apply whenever the law applicable to an arbitration agreement is English law, even if
the seat of the arbitration is abroad. Without this provision, reference would have to
be made to the old English common law with respect to separability and the effect of
death in every arbitration where the arbitration agreement is governed by English law,
but the seat is not in England and Wales or Northern Ireland, such as to be within
section 2(1). This would be an absurd result.

Section 7 Separability of Arbitration Agreement

A2-110 20. As we said in Chapter 6, we suggested that the words “(whether or not in writing)”
be inserted after the words “another agreement” in view of the definition of ‘“‘agree-
ment” in what is now section 5, in order to preclude any argument that section 7 only
applies where the other agreement is in writing. This amendment was duly made.

Section 14(5) Commencement of Arbitral Proceedings

A2-111 ae Parliamentary Counsel considered that it was not necessary to make the amendment
suggested in paragraph 359 of Chapter 6 and we accepted his advice.

Section 16(6)(b) and Section 21(4)

A2-112 22 The Bill used the word “any” after a negative which could thus be read as meaning
“all”. This was not intended. We suggested a form of wording in paragraph 360 of
Chapter 6 but were persuaded that a neater solution was to replace ‘tany” with ‘‘a”
and this was done.

Section 24(4) Power of Court to Remove Arbitrator

A2-113 Wye In paragraph 361 of Chapier 6, we drew attention to the fact that the immunity of an
arbitrator, under what is now section 29, did not extend to protect an arbitrator from
the consequences of resigning, though some protection is available under what is now
section 25(3). This we contrasted with what is now section 24, since an arbitrator
removed by the court still enjoyed the section 29 immunity. We thought that this was
anomalous and that the court should be given a discretionary power to make such
order as it thought fit with regard to the immunity of an arbitrator it removed.

Jia This suggestion was not adopted. After further consideration we concluded that the
anomaly was more apparent than real and that the suggestion would undermine the
reasons for providing arbitrators with the immunity expressed in section 29. As will
be seen from paragraph 362 of Chapter 6, we were against adopting the same
suggestion when the parties agreed to remove an arbitrator under what is now section
23. What it seemed to us would be likely to happen if our original suggestion were
adopted is that the parties, instead of privately agreeing to remove an arbitrator, would
 Appendix 2 719

instead apply to the court in the hope that the immunity would be wholly or partially
removed. This seemed to us to be undesirable.

i It should be remembered, of course, that while an arbitrator retains his immunity if

removed by the court, what is now section 24(4) does give the court the power to make
orders about his fees and expenses, including those already paid.

Section 25(2) Resignation of Arbitrator

26. At paragraph 363 of Chapter 6 we noted that the words “in writing” appeared, A2-114
though by virtue of section 5(1) this was unnecessary. These words were duly
removed by amendment.

Section 32, Section 45 and Section 69

Hf The Bill used the words “unless the court certifies”. These were changed by A2-115
amendment to “which shall not be given unless the court considers”. This amend-
ment was made to make clear that where an appeal is desired from a decision of the
court, leave must be obtained from that court itself, and will always be required. Leave
may not be obtained from the Court of Appeal. As originally drafted, the incorrect
impression was given that leave of the court may not be necessary where that court
certified the issue as being one of general importance or one which for some other
special reason should be considered by the Court of Appeal.

Section 38(3) Security for Costs

28. The power for arbitrators to order security for costs was included in the Bill for the A2-116
reasons set out at paragraphs 189 to 199 of our February 1996 Report. In the Bill as
introduced, we included a provision that the arbitral tribunal should apply the same
principles as the court in exercising this power. This was an attempt to meet the
concerns of those who considered that since under the existing law arbitrators had no
power to order security (unless the parties had expressly agreed to confer such a
power), there was a need to set out some principles to guide arbitrators. However, as
we explained a paragraphs 364 to 370 of Chapter 6, we concluded in the end that this
was not a good idea and that it would be better to amend this part of the Bill, by
deleting the references to court principles and by making clear that the fact that a
claimant or counter-clairant came from abroad was not a ground for ordering
security. Our suggestions were adopted. We proposed a specific amendment, but
Parliamentary Counsel improved upon it, in particular by not using the word “only”
since this might enable it to be argued that the fact that the claimant or counter-
claimant came from abroad could be taken into account so long as there were other
supporting factors as well. This, of course, was not our intention.

JES). It should also be noted that the Bill as introduced used the word “party” in relation
to orders for security for costs. This did not matter so long as there was a reference
to court principles, but once this was deleted, it was necessary to change this to
“claimant’’, since it was not our intention to give arbitral tribunals the power to order
respondents to provide security. Section 82 defines claimant as including counter-
claimant.

Section 46(1)(b) ‘Equity Clauses”

30. Whilst the provisions of Part I of the Act apply to arbitrations commenced after the A2-117
Act comes into force, regardless of when the arbitration agreement was made (by
virtue of section 84), strong representations were made to the DAC that section
 720 Appendix 2

46(1)(b) should be commenced differently—in such a way as to preserve the existing

law on the validity of “equity clauses” with respect to arbitration agreements that
already exist and were made before the Act comes into force. Many existing contracts
contain standard clauses which read as if they are “‘equity clauses”, but which have
been interpreted differently by the courts. This is the case, for example, with so-called
‘honourable engagement” clauses in reinsurance treaties. It was thought that if
section 46(1)(b) were to apply to existing arbitration agreements, this would entail a
retrospective substantive change in the meaning and effect of existing contracts,
different from that which the contracting parties would have contemplated at the time
of contracting. The DAC agreed with this view, and recommended that section
46(1)(b) should not apply to arbitration agreements that were made before the Act
comes into force. Existing case law on the interpretation and effect of “equity clauses”
will therefore continue to apply to such agreements. Transitional provisions have been
put in place accordingly (see Appendix B).

Section 57. Correction of Award or Additional Award

A2-118 Sil A minor drafting change was made to section 57(3)(b).

Section 66 Enforcement of Award

A2-119 32 In paragraphs 371 to 378 of Chapter 6 we made various suggestions for changes to the
provision as it then appeared in the Bill. We were concerned that we had not covered
enough of the cases where leave to enforce an award could be refused. We also
suggested that it should be made clear that the list was not a closed list. However, on
further reflection we concluded that it would be preferable, instead of having a list
which would have to expressed as not closed, to have no list at all; instead relying on
the fact (as noted at paragraphs 373 and 374) that the opening words of the provision
do not require the court to order enforcement, but only give it a discretion to do so.
Thus what was subsection (3) of the Bill was deleted by amendment. However, it will
be noted that in what is now section 81 it is made clear (by an amendment to the Bill
as introduced) that any rule of law relating in particular to matters which are not
capable of settlement by arbitration or to the refusal of recognition or enforcement of
an arbitral award on the grounds of public policy continues to operate.

33). The suggestion that there should be an express reference to an action on the award
was adopted and this reference is now to be found in section 66(4) of the Act. This
in turn meant that the reference to an action on an award in what is now section 81
was unnecessary and this latter reference was accordingly removed by amendment.

Shue In paragraph 378 of Chapter 6 we suggested that where the application was to enforce
an agreed award, the court should be notified of that fact, which should also be
recorded in any order for enforcement. Upon reflection, however, it seemed to us that
such requirements would be better placed in the relevant Rules of Court, and this, we
are informed, will be done.

Section 68 Challenging the Award: Serious Irregularity

A2-120 35); In the Bill, one of the grounds for challenging an award was expressed as “uncertainty
or ambiguity of the award”. It was pointed out to us that this wording might
encourage attempts to challenge an award under this provision on the grounds that
the reasoning of the decision was uncertain or ambiguous. This was certainly not our
intention. What we wanted to cover were cases where the result of the award was
uncertain or ambiguous. Where the quality of the award was in question, there would
 Appendix 2 71

only be recourse under the limited right to appeal under section 69. To make matters
clear, this part of the section was amended and now reads “uncertainty or ambiguity
as to the effect of the award”’.

Section 70 Challenge or Appeal: Supplementary Provisions

36. In paragraph 380 of Chapter 6 we suggested that the power to order security or that A2-121
the amount of the award be brought into court should be extended so as to apply to
applications and appeals under what is now section 69, as well as what are now
sections 67 and 68. This suggestion was adopted and the appropriate amendments
made to section 70.

37. Subsection 70(6) (security for costs) was further amended in order to bring this
provision into line with the amended section 38(3), which has been referred to
above.

Section 74 Immunity of Arbitral Tribunals, etc.

38. In paragraph 381 of Chapter 6 we suggested tightening the wording of subsection 2. A2-122
This suggestion was adopted by inserting into this subsection after the word “‘liable”
the words “by reason of having appointed or nominated him’. Without this amend-
ment it could have been suggested that an immunity existed even where, for example,
an institution conspired with an arbitrator to act partially.

Section 76 Service of Notices, etc.

39. Some minor textual amendments were made to the Bill as introduced, in order to tie A2-123
this provision with others concerning the giving of notices.

Section 77 Powers of Court in Relation to Service of

Documents
40. What was subsection (5) of Clause 77 in the Bill as introduced was deleted on A2-124
amendment as being unnecessary. The point was already covered by section 76(6).

Section 79 Power of Court to Extend Time Limits Relating to

Arbitral Proceedings
41. In paragraph 382 of Chapter 6 we noted that this provision did not cover cases where A2—125
the time stipulated was not one having effect in default of agreement between the
parties, e.g. what is now section 70(3). We suggested an amendment to what is now
section 79(1). This suggestion was not adopted, but the point was covered by adding
the words “the extending or abridging of periods” to what is now section 80(5).

Section 80
42. The word “appeal” was added by amendment to this provision, so it would cover A2-126
appeals as well as applications.

43. A minor change was also made to subsection (5) (insertion of the words ‘“‘the
extending or abridging of periods”) in order to tie this provision in with relevant
Rules of Court.

Section 81 Saving for Certain Matters Governed by Common

Law
44. In paragraphs 383 to 386 of Chapter 6 we made a number of suggestions. First we AZ=127
suggested a reference to privacy and confidentiality. This suggestion was not adopted,
 722 Appendix 2

since we finally concluded (especially as the law on this topic is in a stage of

development) that it would be better to have no express reference at all, and to rely
instead as necessary on the general opening words of this section. The second
suggestion (namely an express reference to whether a matter is capable of resolution
by arbitration) was adopted and the words “matters which are not capable of
settlement by arbitration” added by amendment. We also suggested changing the
words “common law” in the title, but were persuaded that this was not really nec-
essary.

Sections 82 to 83. Minor Definitions

A2-128 45. In paragraphs 387 and 388 of Chapter 6 we raised a point of drafting on the definition
of “‘question of law”. This was dealt with by deleting the words “where the seat of the
arbitration is” and inserting in their place the words “‘for a court”.

46. Further minor amendments were made to sections 82 and 83 in the light of the new
section 105 that was added (meaning of “‘court’’).

CHAPTER 3

Part II or THe Act

Sections 85-87 Domestic Arbitration Agreements

A2-129 47. In paragraphs 317 to 331 of our February 1996 Report, we set out the reasons why the
rules governing domestic arbitration agreements had been grouped together in sec-
tions 85 to 87 of Part II of the Act, and our provisional view as to whether or not the
distinction in English law between international and domestic arbitration should be
maintained. In July 1996, the Department of Trade and Industry published a con-
sultation document on the commencement of the Act in which, amongst other
matters, views were sought on this issue. The majority of respondents were in favour
of the abolition of this distinction, and the application of the international regime
throughout (7.e. a mandatory stay of legal proceedings in all cases, and the ability to
exclude the right to appeal on a point of law at any stage in all cases).

48. At about the same time as this consultation document was published, the Court of
Appeal upheld the decision of Waller J. in Phillip Alexander Securities and Futures
Linuted v. Bamberger and others (unreported: 8 May 1996 [Commercial Court]; 12 July
1996 [Court of Appeal]), in which it was held (in the context of the Consumer
Arbitration Agreements Act 1988) that the distinction between international and
domestic arbitration is incompatible with European Community law because it
amounts to a restriction on the freedom to provide services contrary to Article 59 of
the Treaty of Rome and/or unlawful discrimination contrary to Article 6.

a) In the light of the responses to the consultation document, the decision of the Court
of Appeal, and the factors we had originally set out in our February 1996 Report, the
DAC has since decided that, as matters currently stand, there is no option but to
 Appendix 2 723

abolish this distinction. Indeed, on one view, in the light of the Phillip Alexander case,
the distinction has already been removed from current English law. However, it is to
be noted that (at the time of going to press) an application for leave to appeal the
Philip Alexander is pending before the House of Lords, and there remains the
possibility that the question will be referred to the European Court.

50. In these circumstances, sections 85 to 87 have not been brought into force by the
Commencement Order.

Section 85
ol In paragraph 389 of Chapter 6 we noted an anomaly in the definition of “domestic A2Z—130
arbitration agreement” and suggested that the opportunity should be taken to correct
it. However, in view of the position with respect to the future of the distinction
between domestic and non-domestic arbitration agreements, this suggestion was not
adopted.

Various other minor textual amendments were also made to this section, which now
are of no consequence.

Section 88
Oh: A minor textual amendment was made to this section, in order to reflect the A2-131
amendments made to the consumer provisions of the Act (the new sections 89 to
91).

Sections 89 to 91 Consumer Arbitration Agreements

Sh Clauses 89 to 93 of the Bill as introduced into Parliament reproduced the Consumer A2-132
Arbitration Agreements Act 1988. These provisions were removed by amendment,
and replaced by what is now sections 89 to 91, which refer to the Unfair Terms in
Consumer Contracts Regulations 1994 (implementing E.C. Council Directive 93/13
EEC). The consumer provisions of the Act were beyond the remit of the DAC, and
are therefore not commented upon here. For an explanation of these amendments,
reference should be made to Hansard at H.L. Vol. 571 No. 72 Cols 152-5 (2 April
1996).

Section 93 Appointment of Judges as Arbitrators

55. Our suggestion in paragraph 390 of Chapter 6 was not adopted. A2-133

Sections 94-98 Statutory Arbitrations

56. The issue that we noted at paragraph 391 of Chapter 6 concerning the requirement A2-134
of “independence” in statutory (compulsory) arbitration was debated in the House of
Lords (see Hansard H.L. Vol. 569 No. 51 Col. CWH 26-28 (28 February 1996)), but
did not result in an amendment to the Bill.

The words “‘or difference” were inserted in section 96(2) by way of tidying up.
 724 Appendix 2
CHAPTER 4

Part III or THe Act

Section 100(2) New York Convention Awards

A2-135 58. In paragraph 392 of Chapter 6, we recommended that this provision be amended so
as to cross-refer to the definition of writing to be found in Part I of the Act, and also
to incorporate our recommendation that an award be treated as made at the seat of the
arbitration, regardless of where it was signed, despatched or delivered to any of the
parties. This recommendation was adopted.

Section 101
A2-136 59. A minor textual amendment was made to section 101(2), in order to refer to the new
section 105, that was added.

Section 102 Evidence to be Produced

A2-137 60. The wording of this provision was amended in order to bring it back into line with
the wording of the New York Convention itself.

Section 104 Saving for Other Bases of Recognition or

Enforcement
A2-138 61. The concern recorded at paragraph 393 of Chapter 6 did not lead to any amend-
ment.

CHAPTER 5

Part IV oF THe Act

Section 105 Meaning of “the Court”: Jurisdiction of High Court

and County Court
A2-139 62. This is a new section. It was added in order to confer order-making powers on the
Lord Chancellor to allocate matters as between different courts, thereby providing for
more flexibility than was provided for by existing rules. Reference should be made to
the Allocation Order set out at Appendix B.
 Appendix 2 745)

APPENDIX A

THE New RSC Orper 73 & ALLOCATION ORDER

Introduction by His Hon. Judge Diamond Q.C.

Scope of the Order

63. The Order had to govern not only applications to the Court under the Arbitration Act
A2-140
1996, but also applications under the Arbitration Acts 1950 to 1979, which continue
to apply to arbitrations commenced before 31st January 1997, the date when, by virtue
of the Arbitration Act 1996 (Commencement No. 1) Order 1996, the 1996 Act came
into force. So as to cater for both classes of arbitration application, the new Order has
been divided into three parts and a table has been inserted at the beginning of the
Order to indicate to the user which part is appropriate, a matter which depends on the
date when the relevant arbitration proceedings were commenced and the date of the
application to the Court (see Chapter 7 of this Report). Part I is concerned with
applications to the Court relating to arbitrations to which Part I of the 1996 Act
applies. Part II of the Order preserves the procedure of the former Order 73 for
arbitrations governed by the earlier statutes. Part III is concerned with all applications
to enforce arbitration awards (save by action on the award), whether under the 1950,
1975 or 1996 Acts or under certain other enactments.

The General Scheme of Part I

64. Part I of the new Order completes and puts flesh on the general scheme set out in the A2-141
1996 Act governing applications to the Court. For example the Act provides that in
some instances notice of an application is to be given ‘“‘to the other parties” and in
others “‘to the other parties and to the tribunal”. The Order provides how that notice
is to be given. In the case of parties (rule 10(1)) this is to be done by making them
respondents to the application and by effecting formal service of the proceedings
upon them. In the case of arbitrators, notice of applications under sections 24, 28 and
56 of the Act must be given in a similar manner (rule 10(2)) but notice of all other
applications to arbitrators may be given by sending the papers to them at their last
known address ‘“‘for information” (rule 10(3)). Similarly, the Order sets out the rights
of parties and arbitrators who have been given notice of an application, to appear and
be heard in the proceedings or, in the case of arbitrators who are given notice ‘‘for
information”, to make informal representations to the court or to appear at their
option.

Particular Features of Part I

65. While it was necessary for the Order to give some guidance as to whether arbitration A2-142
applications should be heard in open court or in Chambers, it was considered that this
was a matter which depended essentially on the particular circumstances of each
 726 Appendix 2

application. One consideration is the privacy of the arbitration process; another is

whether the application raises points of principle which may be relevant in other cases.
rules 15(2) and 15(3) set out a prima facie presumption that all arbitration applications
shall be heard in Chambers save for the determination of a preliminary point of law
under section 45 of the Act and an appeal on a question oflaw under section 69 which
should both be heard in open court. The court may however order that any arbitration
application be heard in open court or in Chambers depending on the particular
circumstances.

66. Part I of the Order contains provisions designed to minimise the cost and delay
involved in serving proceedings out of the jurisdiction. Where the respondent to the
arbitration application is or was represented in the arbitration proceedings by a
solicitor or other agent, the court may give leave (on an ex parte application) for the
proceedings to be served on that solicitor or agent (rule 7(2)). While service out of the
jurisdiction may still be necessary for the first application arising out of an arbitration
or arbitration agreement, subsequent applications by either party can be served at the
address for service within the jurisdiction given in the first application (rule 7(4)).

67. When deciding in which court to bring an arbitration application, the user needs to
refer both to the High Court and County Courts (Allocation of Arbitration Proceed-
ings) Order 1996 and also to rule 5 of the new Order 73. Rule 5 also contains
provisions designed to ensure that, wherever the application is issued, the Commercial
Court is able to preserve some consistency of approach both to the application and to
the interpretation of Order 73. All arbitration applications brought in the Royal
Courts ofJustice are, for this reason, to be issued out of the Admiralty and Commer-
cial Registry (rule 5(3)) so that the Commercial Court can act as a “‘filter’’ and the
judge in charge of the Commercial Court may transfer them elsewhere if he thinks fit
(rule 5(5)). In the case of applications brought in a Mercantile List or in the Central
London County Court Business List, the control of the Commercial Court is
preserved by provisions (rules 5(5) and 5(6)) that the application will be reviewed by
the judge in charge of the list who, in consultation with the judge in charge of the
Commercial Court, may transfer the application to the Commercial Court or to
another court or List.

68. Rule 4(1) introduces a new form of originating process for applications governed by
the 1996 Act, called simply an “arbitration application”. This supersedes the two
different forms of originating summons and the form of notice of motion used under
the old procedure (which, however, is retained in Part II of the Order for applications
governed by the old law).

General

A2-143 69. Though necessarily detailed, the new Order 73 is designed to be “user friendly”’.
Users should be assisted by the table, to which reference has previously been made,
indicating whether Part I or Part II of the Order is appropriate for a particular
application. Similarly, rule 4 attempts to assist users by setting out in table form the
 Appendix 2 ipx

most important statutory requirements that need to be satisfied and referred to in any
arbitration application made under the 1996 Act.

APPENDIx B

TRANSITIONAL PROVISIONS

70. As we said in paragraph 315 of our February 1996 Report, we decided to use the A2-144
precedent of previous arbitration statutes so that the new Act applies to arbitrations
commenced after it came into force, whenever the arbitration agreement was made.
The transitional provisions reflect this, but of course also have to deal with arbitration
agreements and arbitrations which are to remain governed by the pre-existing law.

ile Section 84(1) of the Act is a limiting provision, in that it stipulates that the Act does
not apply to arbitrations commenced before the date on which Part I comes into force,
and this is of course reflected in paragraph 2(a) of Schedule 2 to the Commencement
No. 1 Order.

Ws Section 84(2) is an enlarging provision, since it applies the Act to arbitrations

commenced after Part I comes into force, even if the agreement is made at an earlier
time.

Ts: The remaining transitional provisions in paragraph 2 of Schedule 2 to the Com-

mencement No. 1 Order, deal with arbitration applications to the court. Paragraph
2(b) is designed to ensure that the pre-existing law applies to all applications to court
made before Part I comes into force, and that this will remain the case even if an
arbitration is commenced after Part I comes into force. Paragraph 2(c) is designed to
ensure that applications relating to arbitral proceedings commenced before Part I
comes into force are themselves governed by the pre-existing law so as to avoid one
law applying to the arbitration proceedings and another to arbitration applications to
the court.

T* Paragraph 4 of Schedule 2 deals with the question of “equity clauses” in arbitration

agreements, which we deal with in paragraph 30 of this Report.
 APPENDIX 3

STATUTORY ARBITRATION

Introduction. An agreement is one of the features which distinguishes arbitration from

A3-001 litigation.'! That statement must be qualified because arbitration can be imposed upon
parties by statute.? The Acts of Parliament are not, however, consistent in their approach.
Some make arbitration of particular disputes compulsory (i.e. not only is no agreement
required but the parties have no choice); others make arbitration optional at the instance of
one or both parties.

A3-002 Definition. Statutory arbitration is a creature of statute: it arises where the reference to
arbitration derives from an enactment of Parliament other than the Arbitration Act 1996.*
The source of the arbitration is not an agreement of the parties (the arbitration clause or
agreement) but a s.of a particular Act of Parliament.* The main Pt of this book is devoted
to contractual arbitration; this appendix comments on statutory arbitration.

A3-003 The seat. Irrespective of any agreement a statutory arbitration will be taken to have its
seat in England and Wales.* The procedure for a statutory arbitration will thus derive from
the statute giving rise to that particular arbitration or from the Arbitration Act 1996.°

A3-004 Application of the Arbitration Act. The provisions of Pt 1 of the Arbitration

Act 1996 apply to every statutory arbitration ““whether the enactment’ was passed or made
before or after the commencement of this Act, subject to the adaptations and exclusions

' This is a summary of para.1—002.

* Since the Human Rights Act 1998 came into force, it is doubtful whether a party to a statutory
arbitration who has not voluntarily or freely agreed to it will effectively waive his right to a public
hearing. See paras 1-038 and 1-039.
* Arbitration Act 1996, ss.94 to 98 inclusive. An arbitral tribunal appointed pursuant to other Acts
of Parliament should be distinguished from a tribunal appointed under the Tribunal and Inquiries
Act 1992. The latter conducts an inquiry on behalf of a Minister, who appoints the Chairman. Its
procedure is regulated by rules made by the Lord Chancellor.
‘For example, s.12 of the Agricultural Holdings Act 1986.
> Section 95(2) of the Arbitration Act 1996. The provision is mandatory.
° The procedure may be “‘ad hoc” but it derives from statute. In this context an arbitration scheme
established pursuant to statute should be distinguished from a voluntary scheme. Both may operate
in a particular industry (e.g. disputes concerning the supply of electricity—see paras A3-029 et
seq.).
7“Enactment” includes an enactment contained in subordinate legislation—see s.94(3) of the
Arbitration Act 1996. This includes rules made under an Act, e.g. County Court rules made under
s.64(1) of the County Courts Act 1984.
 Appendix 3 729

specified in ss.95 to 98”* and subject to exclusion by or inconsistency with the enactment
concerned.” Usually any exclusion will be expressed in the Act of Parliament giving rise to
the statutory arbitration,'? but even in the event of an inconsistency that Act will prevail
over the provisions of Pt 1 of the Arbitration Act 1996."!
Where the provisions of Pt 1 of the Arbitration Act 1996 are not excluded they will apply
to a statutory arbitration:

‘as if the arbitration were pursuant to an arbitration agreement and as if the enactment
were that agreement, and
as if the persons by and against whom a claim subject to arbitration in pursuance of the
enactment may be or has been made were parties to that agreement.”

Thus, for the purposes of the Arbitration Act 1996 an arbitration pursuant to another
statute is treated as if it were a contractual arbitration, subject to the adaptions and
exclusions mentioned in the following paragraphs."

The adaptions. In the case of a statutory arbitration Pt 1 of the Arbitration Act 1996 A3-005
is adapted in three respects. First, an arbitral tribunal appointed pursuant to such an
arbitration may decide “whether the enactment applies to the dispute in difference or
question”; which means that the tribunal may determine its own jurisdiction.'* Second, any
consolidation of proceedings or concurrent hearings in proceedings of a statutory arbitra-
tion can only occur under the same enactment.'? This provision limits the tribunal’s
jurisdiction to the particular statute even where the dispute also arises under another
statute. Third, the tribunal must decide a dispute referred to statutory arbitration in
accordance with the law chosen by the parties as applicable to the substance of the dispute.'®
Accordingly, a statutory arbitration must be decided in accordance with the law; it cannot
be decided according to other considerations.”

The provisions excluded by the Arbitration Act. Three provisions of Pt 1 A3-006

of the Arbitration Act 1996 are expressly excluded in respect of a statutory arbitration.
First, the death of a party may discharge a statutory arbitration.'* Personal representatives
of a claimant cannot therefore pursue a claim in that arbitration, unless the particular Act
authorises them to do so. Second, the court has no power under s.12 of the Arbitration

8 Section 94(1) of the Arbitration Act 1996 which replaced s.31 of the Arbitration Act 1950. The
adaptations and exclusions from Pt | of the Arbitration Act 1996 are mentioned in the following
paras A3-005 to A3—006.
° See para.A3—007.
10 See, for example, s.92 of the County Courts Act 1984 and paras A3—010 et seq.
| For example, the provision for stating a special case contained in the Industry Act 1975—see
para.A3—028.
'2 Section 95(1) of the Arbitration Act 1996.
'S Paragraphs A3—005 to A3—006.
'4 Section 30(1) of the Arbitration Act 1996 is adapted accordingly: see s.96(2) of that Act.
15 Section 35 of the Arbitration Act 1996 is adapted accordingly: see s.96(3) of that Act.
16 Section 46(1)(b) of the Arbitration Act 1996 cannot apply to a statutory arbitration—see s.96(4) of
that Act.
17 The other consideration referred to in s.46(1)(b) of the Act (e.g. equitable principles) are discussed
in paras 4-141 et seq.
18 Section 8 of the Arbitration Act 1996 is excluded by s.97(a), which replaced s.31(2) of the
Arbitration Act 1950 as amended by s.8(2)(d) of the Arbitration Act 1975.
 730 Appendix 3

Act'® to extend the time for bringing a statutory arbitration”? although other time limits
may be extended.?! Third, a provision that an award is a condition precedent to the bringing
of legal proceedings may not cease to have effect, in contrast with the consequences of
certain court orders about contractual arbitrations subject to the same condition prece-
dent.”*
There were more exclusions under the former arbitration legislation’? but the three
mentioned above are all that are mentioned in the Arbitration Act 1996 although there is
power to make further provision by regulation for ‘adapting or excluding any provision of
Pt 1 in relation to statutory arbitrations in general or statutory arbitrations of any particular
descriptions”’.**

A3-007 Provisions that may be excluded by another enactment. Another

enactment may, in respect of a particular statutory arbitration, exclude all or some of Pt |
of the Arbitration Act 1996, either expressly or because the Arbitration Act is “inconsistent
with the provisions of the enactment concerned or with any rules or procedure authorised
or recognised by it”.*? The scope of such an exclusion was considered in Tustian v
Johnston*® where the judge decided that the Agricultural Holdings Act 1986, excluded the
whole of the previous arbitration legislation so that the Court had no discretion but to stay
an action. As will be apparent however from the rest of this Appendix Pt 1 of the
Arbitration Act 1996, as amended by ss.96 and 97, does apply to many statutory arbitra-
tions.”’

A3-008 The scope and procedure of statutory arbitration. The Acts of Parliament
which refer disputes to arbitration extend across a huge range of subjects, including
agriculture, financial services, friendly societies, industry, road traffic maintenance and
utilities. The procedure for the conduct of statutory arbitrations is not specified in the Act
giving rise to the statutory arbitration. Instead it is to be found in rules made pursuant to
the Act concerned?® or derived from Pt 1 of the Arbitration Act 1996. In some cases,
however, parties are encouraged to resort to an arbitration agreement and contractual rules
even though there is a clear statutory reference.”?

A3—009 The layout of this Appendix. This appendix will proceed to identify and
comment upon some statutory arbitrations by reference to various Acts of Parliament.*° It

Power may however be conferred on the Court by the Act giving rise to the particular statutory
arbitration.
20 Section 97(b) of the Act.
*! Section 79 of the Arbitration Act 1996 is not excluded by s.97 of the Act.
*? Sections 9(5), 10(2) and 71(4) of the Arbitraton Act 1996 are excluded for statutory arbitration by
s.97(c) of that Act.
*8 Section 31(2) of the Arbitration Act 1950, which has been repealed by the Arbitration Act 1996,
contained a longer list of exclusions.
* Section 98(1) of the Arbitration Act 1996.
* Section 94(2) of the Arbitration Act 1996, which replaced s.31(1) of the Arbitration Act 1950.
2611993) 2 All E.R. 673.
*7 In the 20th edition of Russell on Arbitration it is said that there is a “widespread tendency to
exclude the Arbitration Acts in modern statutes”, p.14. That statement is not borne out by recent
public Acts. Indeed, it seems that this is the exception rather than the rule.
** For example, the rules made under the Financial Services Act 1996.
” Utilities are increasingly adopting voluntary arbitration schemes for settlement of their disputes (see
paras A3—026 et seq.).
*° The Appendix does not attempt to list all references to statutory arbitration but it will proceed to
identify some of the principal examples.
 Appendix 3 731

will then identify those institutions to whom the various statutes refer and offer some
comments on their role.*!~*?

1. AGRICULTURE

Agriculture provides a good source of statutory arbitrations. Two important examples A3-010
will be mentioned in the following paragraphs but there are others.**
The Agricultural Holdings Act 1986 contains provisions which require certain disputes A3-011
to be referred to arbitration** and the court retains jurisdiction to decide whether a
transaction falls within the ambit of those provisions.** That Act also provides that other
disputes must be referred if either party requests it.°° The result is that arbitration is
compulsory (at least if one party requests it) for the resolution of almost all disputes that
may arise between landlord and tenant in respect of agricultural land.*’
The Agricultural Holdings Act provides that the arbitrator shall be a person appointed A3-012
by agreement between the parties or, in default of agreement, by the President of the Royal
Institution of Chartered Surveyors (““RICS”’). The procedure is well described in Muir
Watt & Moss on Agricultural Holdings.**
The Agricultural Tenancies Act 1995 also contains provisions for statutory arbitration. A3-013
Any dispute*’ between the landlord and tenant under a farm business tenancy must be
determined by arbitration” under that Act unless the dispute concerned is referred to a
third party for determination pursuant to an agreed proyision in the tenancy agreement."!
The arbitration will be conducted by a sole arbitrator appointed by the President of the
RCS
The provisions of Pt 1 of the Arbitration Act 1996,* with the adaptions and exclusions A3-014
already mentioned, apply to an arbitration under the Agricultural Tenancies Act 1995.

2. FINANCIAL SERVICES

Arbitration schemes which had existed under the previous regulatory regime were A3-015
replaced by the Financial Services and Markets Act 2000 into a single ombudsman

31-32 Paragraphs A3—038 et seq.

33 For example, the Dairy Produce Quota Regulations 1989 (now 1993) which were made under the
European Communities Act 1972 and were considered in Holdcrafi v Staffordshire County Council
[1994] 28 E.D. 131.
44 For example, ss.2 and 12 of the Agricultural Holdings Act 1986.
35 Goldsack v Shore [1950] 1 All E.R. 276, a decision based on the previous Agricultural Holdings
Act.
© Section 6 of the 1986 Act is an example.
57 See Grammer v Lane [1999] New Property Cases 149 for a case where the arbitrator was faced with
an unresolved dispute as to the existence of a tenancy.
38 See Ch.14 (14th edn), published by Sweet & Maxwell. See also Ch.21 of Scammell & Densham’s
Law on Agricultural Holdings (8th edn), published by Butterworths. Schedule 11 of the Agricultural
Holdings Act 1986 has been repealed.
3° There are three exceptions, see s.28(5) of the Agricultural Tenancies Act 1995.
# Section 28(1) of the Agricultural Tenancies Act 1995.
1 Section 29 of the Agricultural Tenancies Act 1995.
2 Section 30 of the Agricultural Tenancies Act 1995.
43 See s.84(1) of the Agricultural Holdings Act 1986, as amended by the Arbitration Act 1996, Sch.3,
para.45 which was construed in Justian v Johnston [1993] 2 All E.R. 673.
44 As a result of amendments made in 2006 to the Agricultural Holdings Act 1986, the provisions of
Pt 1 of the Act also appear to apply to the 1986 Act.
 732 Appendix 3

scheme.*? Arbitration schemes established by the Finance and Leasing Association and the
Consumer Credit Trade Association continue to exist.*°

3. FRIENDLY SOCIETIES

A3-016 The Friendly Societies Act 1992 provides for the determination by arbitration of certain
disputes with a registered Friendly Society®’ or branch in the manner directed by the rules
of that society or branch.** That provision is not intended to inhibit a Society from
establishing internal procedures for the resolution of complaints or providing for their
settlement by adjudication, but a registered Friendly Society cannot thereby prevent a
member from referring a dispute to arbitration.*? Pt 1 of the Arbitration Act 1996 applies
to such an arbitration, subject to the adaptions and exclusions mentioned.
As an alternative to arbitration, the parties may agree that their dispute shall be
determined by a county court.*° If the matter is determined by arbitration, an application
to enforce an award may be made to the county court.®’

4. INDUSTRIAL RELATIONS

A3-017 The Trade Union and Labour Relations (Consolidation) Act 1992 provides for referring
a trade dispute to arbitration. Consent of all parties to the dispute is needed and any
available procedure for settlement of the dispute should usually** be exhausted. Where
however all parties do consent to a request for arbitration the Advisory, Conciliation and
Arbitration Service (““ACAS”’) is empowered to refer “‘all or any of the matters to which the
dispute relates for settlement to the arbitration of” the Central Arbitration Committee** or
to one or more arbitrators.*> In either event, Pt 1 of the Arbitration Act 1996 will not
apply.*°

*© Part XVI and Sch.17.

*© These are referred to in s.5 of the Banking Code established with effect from July 1, 1997 by the
British Bankers’ Association, the Building Societies Association and the Association for Payment
Clearing Services.
*” A dispute between a member and a Society which is not a registered Friendly Society may be
decided in the manner directed by the rules of that Society which need not include arbitration: see
s.76 of the Friendly Societies Act 1974.
*® Section 80(1) of the Friendly Societies Act 1992. The disputes include those between a member or
former member and a registered Friendly Society or branch.
* Section 81(1) of the Friendly Societies Act 1992.
*” Section 80(5) of the Friendly Societies Act 1992.
>! Section 80(2) of the Friendly Societies Act 1992.
°* A trade dispute is defined in s.218 of the Trade Union and Labour Relations (Consolidation) Act
1992. This practice of referring industrial disputes in essential services to arbitration is a practice
which has also been adopted in other common law jurisdictions. See for example in Belize, the
Settlement of Disputes in Essential Services Act (Cap. 298), available at mmm belizelamorg.
*»* ACAS has power to refer the matter to arbitration if all parties consent even though an available
procedure has not been exhausted; s.212(3) of the Trade Union and Labour Relations (Consolida-
tion) Act 1992.
** Section 212(1)(b) of the Trade Union and Labour Relations (Consolidation) Act 1992.
»° Section 212(1)(a) of the Trade Union and Labour Relations (Consolidation) Act 1992.
°° Section 212(5) and 263(6) of the Trade Union and Labour Relations (Consolidation) Act 1992.
 Appendix 3 733

Where the matter is referred to the Central Arbitration Committee, the Act provides for A3-—018
the Committee to determine its own procedure and for publication ofits awards.’ It sits as
a committee of three. Where ACAS refers a trade dispute to an arbitral tribunal, that
tribunal may decide upon its own procedure, but any award may only be published if ACAS
so decides and all parties consent.°* The overwhelming majority of ACAS arbitrations are
heard by a single arbitrator,
Employment disputes are decided not by arbitration but by an employment tribunal,’ A3—019
although industrial tribunals do make use of the conciliation services of ACAS.

5. INDUSTRY

The Industry Act 1975°° makes provision for arbitration in respect of vesting and A3-020
compensation orders that may be made under s.20 of that Act in relation to the transfer of
control of important manufacturing undertakings to non-residents. A certain formality
attaches to the appointment of an arbitral tribunal appointed under that schedule,°! and
there is a requirement for the statement of a special case,°? but no rules of procedure have
yet been made in respect of this statutory arbitration.°*
Only a limited number of provisions of Pt 1 of the Arbitration Act 1996 apply to an A3—021
arbitration under the Industry Act.°*

6. Roap TRAFFIC AND CONSTRUCTION/ MAINTENANCE

The Road Traffic Act 1991 and the New Roads and Street Works Act 1991 contain A3—022
various provisions for arbitration of disputes. For example any matter which, under Pt III
of the second Act is to be settled by arbitration, must be referred to a single arbitrator
appointed by agreement between the parties concerned or, in default of agreement, by the
President of the Institution of Civil Engineers.® An application to stay court proceedings
was dismissed in Road Management Services (AB) Ple v London Power Networks°° because
the dispute did not fall within the scope of the statutory provision.”
The provisions of Pt 1 of the Arbitration Act 1996, subject to the adaptions and A3-—023
exclusions mentioned, apply to an arbitration conducted under these two Acts.

7 Section 263(5) and 264 of the Trade Union and Labour Relations (Consolidation) Act 1992.
58 Section 212(4)(b) of the Trade Union and Labour Relations (Consolidation) Act 1992.
°°? Employment Tribunals Act 1996.
Schedule 3 to the Industry Act 1975.
6! See Sch.3, paras 3 and 4.
62" See\ pataellos
°3 See para.17 of that Schedule.
6 The four matters are specified in para.14 of Sch.3 as amended by the Arbitration Act 1996, s.107(1)
Sch.3, para.30.
> Section 99 of the New Road and Street Works Act 1991.
22112003) uBR 303:
67 The relevant provision was s.96(3) of the New Roads and Street Works Act, 1991.
 734 Appendix 3

7. UTmiries

(a) Coal

A3-024 Regulations®* made under the Coal Industry Act 1994 and the Coal Mining Subsidence
Act 1991 have established two schemes for the coal industry which provide for arbitration
of certain disputes concerning subsidence affecting land.®’ One scheme relates to house-
holders and the other is a general arbitration scheme.
A3-025 Details of the schemes, including the procedure to be followed, are set out in the
schedules to the Regulations.
A3-026 The British Coal Corporation have arranged for the Chartered Institute of Arbitrators to
operate the schemes with special cost provisions designed for householders.

(b) Electricity

A3-027 The Electricity Act 1989 contains several provisions for referring disputes to arbitra-
tion,” and Pt 1 of the Arbitration Act 1996, subject to the adaptions and exclusions
mentioned, apply to such arbitrations.
A3-028 The Director General of Electricity Supply has power either to decide disputes himself
or to refer them to an arbitrator. In the case of some disputes the Director determines the
practice and procedure.’! Other disputes are referred directly to an arbitrator, appointed in
default of agreement, by the President of the Chartered Institute of Arbitrators in some
cases, or by the Lord Chancellor in other cases.
A3-029 Since the establishment of the Electricity Arbitration Association, the use made of
arbitration is very wide, ranging from National Power Plc to individual electricity consum-
ers. The rules of arbitration, which are adopted by agreement, provide a flexible procedure
that encourages the arbitrator to play an active role in the conduct of the proceedings.”

(c) Gas

A3-030 The Gas Act 1986 contains several provisions for arbitration.’* Some disputes are
required to be referred to a single arbitrator to be appointed by the parties or in default by
the Gas and Electricity Markets Authority.”*
Other disputes’? may either be decided by the Authority or, if it thinks fit, be referred
to an arbitrator appointed by it. In the latter event, the Authority may indicate the practice

The Coal Mining Subsidence (Arbitration Schemes) Regulations 1994 (SI 2566).
” The regulations were the results of a review following the Waddilove Report in 1984 and the
subsequent report of a Select Committee on Energy in 1990.
” For example, ss.23 and 44A.
7! Those disputes are referred to in s.23 as arising out of ss.16 to 22 of the Electricity Act 1989.
” For example, r.5.3 of the Rules of Arbitration of the Electricity Arbitration Association.
” The Gas Act 1986 has been amended by the Competition and Service (Utilities) Act 1992, the Gas
(Exempt Supplies) Act 1993, the Gas Act 1995 and the Utilities Act 2000.
” For example, a dispute over the opening up of a street or bridge by a public gas transporter: see s.9
and Sch.4 to the Gas Act 1986. The Gas and Electricity Markets Authority took over the functions
of the Director General of Gas Supply (which was abolished by the Utilities Act 2000).
* Those between a gas supplier and tariff customer, for example, see s.27A of the Gas Act 1986.
 Appendix 3 735

and procedure to be followed in connection with the determination of the dispute.’° In any
event, Pt 1 of the Arbitration Act 1996, subject to the adaptions and exclusions mentioned,
applies to these statutory arbitrations.

(d) Water

The Water Resources Act 1991,” the Water Industry Act 199478 and the Land Drainage A3-031
Act 1991” and the Water Act 2003*°*' all contain provisions for arbitration.
Different wording is used throughout the Acts with regards to how disputes should be A3-032
settled. There seems to be no good reason for those differences, although disputes about
withholding of consent tend to be referred to arbitration. Other disputes may be deter-
mined by the minister.
Part 1 of the Arbitration Act 1996, subject to the adaptions and exclusions mentioned, A3-033
apply to all arbitrations arising under these Acts.

(e) Telecommunications

The Communications Act 2003 provides that disputes about discrimination in fixing A3-034
charges, billing disputes and complaints about deposits may be decided by the Director
General of Telecommunications or be referred to an arbitrator appointed by him.
Part 1 of the Arbitration Act 1996, subject to the adaptions and exclusions mentioned, A3—-035
apply to arbitrations arising under the Telecommunications Act 1984. The Chartered
Institute of Arbitrators administers BT’s arbitration scheme.

8. INSTITUTIONS INVOLVED IN STATUTORY ARBITRATION

The statutory arbitrations identified above refer to a number of institutions. Some, like A3-036
the Chartered Institute of Arbitrators, are involved in the arbitral process; others simply act
as an appointing authority. Their role is not limited to statutory arbitration, but some
observations on them follow.

Advisory Conciliation and Arbitration Service. ACAS receives about 1,200 A3-037
cases per year for conciliation (i.e. assisting parties to reach agreement). Of these, between
150 and 200 will then be referred to arbitration. These figures have been the same for about
a decade.
The ACAS annual report details how their work is divided up, but most of it involves pay
disputes or disputes regarding terms and conditions of employment. There are certain
principles by which ACAS arbitrations are conducted and these are stated in a short leaflet
available from the ACAS head office.

76 See s.27A(4) of the Gas Act 1986.

77 Sections 108(6) and 110(4) of the Water Resources Act 1991.
78 For example, ss.42(6), 44, 99(6), and 101 of the Water Industry Act, 1991.
79 Section 23(5) of the Land Drainage Act, 1991.
80-81 Section 569 of the Water Act 2003.
 736 Appendix 3

A3-038 The Chartered Institute of Arbitrators. The President appoints arbitrators,

but this institution also provides rules for arbitration, conducts arbitration schemes and
trains arbitrators.
The Chartered Institute has both standard arbitration rules and short form rules. In
neither its rules nor its appointments does the Chartered Institute make a distinction
between statutory arbitrations and contractual arbitrations.
Many requests to appoint an arbitrator come from utility-reiated disputes. For example,
both the Telecom and the coal industries have schemes with the Chartered Institute under
which the latter appoints arbitrators. Provision for arbitration is made in standard consumer
contracts, and it is from here, rather than from any statute, that the authority of the
Chartered Institute arises.

A3-039 The Lord Chancellor’s Department. The Lord Chancellor is empowered to

act as an appointing authority under various Acts, but he is rarely called upon to exercise
that power.

A3-040 The Institution of Civil Engineers. The President of the ICE acts only as an
appointing authority. The ICE maintains and publishes a list of arbitrators from which he
makes his choice depending on the type of dispute. The ICE also provides its own
arbitration procedure.
Only two or three cases each year are referred to the President under an Act of
Parliament. The vast majority of cases arise from use of standard ICE contracts and the
sub-contracts that go with them. These contain a dispute resolution clause which provides
for all disputes to be resolved by an arbitral tribunal appointed by agreement between the
parties, or in default of agreement, by the President of the ICE.

A3-041 The Royal Institution of Chartered Surveyors. The President of the RICS
acts only as an appointing authority. Only a small number of disputes referred to the
President of the RICS arise under statute. Most cases arise from commercial leases. There
were 617 cases in 1996. Those disputes arose mainly under the Agricultural Holdings Act
1986, and involved rent reviews.
The RICS has two application forms for statutory arbitration; one for rent review
disputes and another for other kinds of disputes.

A3-042 Director General of Electricity Supply. The office of Director General of

Electricity Supply was established by the Electricity Act 1989. Before the Competition and
Services (Utilities) Act 1992 came into force, the Director occasionally used his powers to
appoint an arbitrator where there was a dispute about someone being required to give
security to the Electricity Board. Since 1992 the scope for statutory appointments has
increased, but disputes concerning electricity supply are invariably referred to the Elec-
tricity Arbitration Association.

A3-043 The Gas and Electricity Markets Authority. The Gas and Electricity
Markets Authority was established by the Utilities Act 2000*? and took over the functions

*2 Section 1.(3) of the Utilities Act 2000.

 Appendix 3 737

of the office of the Director General of Gas Supply which was abolished.** As originally
enacted, the Gas Act 1986 had few arbitration provisions, but the Competition and Service
(Utilities) Act 1992 introduced a number of provisions for the determination of disputes
between domestic customers and public gas transporters and gas suppliers. The Gas
Consumers’ Council also has the power to investigate some matters.*2°
The most important provision deals with disputes involving domestic customers. The
Secretary of State may, by regulations, make provision for billing disputes to be referred to
the Authority, which regulations may give the Authority the power either to determine
disputes itself or to appoint an arbitrator. Formal references to the Authority for arbitration
are very rare. The Authority has recently entered into a Memorandum of Understanding
with the Ombudsmen Service Ltd in relation to the Energy Supply Ombudsman Service,
an alternative dispute resolution mechanism set up to resolve disputes arising from
customers of the member companies of the Energy Supply Ombudsman Service.

9. CONCLUSION

Most statutes do not exclude the relevant provisions of the Arbitration Act 1996 but either A3-044
make rules consistent with that Act or, more often, leave the arbitral tribunal or appointing
authority to determine the procedure. There is little purpose in seeking an explanation for
the inconsistencies in the various statutes. A few observations are however appropriate.
The preferred appointing authority for disputes about whether consent to certain proposed A3—-045
works was unreasonably withheld by a public body, seems to be the President of the
Institution of Civil Engineers. On the other hand the Chartered Institute of Arbitrators
seems to be the favourite for consumer disputes.
The arbitration procedures also vary; some may be dictated by the director responsible, as A3-046
in the Gas Act; others follow the domestic practice of the appointing authority (e.g. the
Chartered Institute of Arbitrators).
Despite the replacement ofthe so called small claims arbitration®* by the small claims track A3-047
procedure®™ statutory arbitration continues under a variety of schemes. This appendix does
not contain all references to statutory arbitration; there are a number of others.

82a The Office of Director General of Gas Supply was established by the Gas Act1986.
82b See, for example, s.32 of the Gas Act 1986.
83 CCR Ord.19 was revoked in 2002.
GPRSRw bel a
85 A limited number of disputes are referred to arbitration under the Building Societies Act 1986,
Sch.14 para.4 and under the Further and Higher Education Act 1992, Sch.5 para.4.
 APPENDIX 4

COMPARISON BETWEEN THE ARBITRATION

Act 1996 AND THE UNCITRAL MopeEL LAw
ON INTERNATIONAL COMMERCIAL
ARBITRATION (“MopEL Law’’)

INTRODUCTION

A4—001 The Model Law was adopted by the United Nations Commission on International Trade
Law (“UNCITRAL”) on June 21, 1985.' It was the result of a comprehensive study into
the various arbitration laws throughout the world and was intended to provide a model that
would lead to greater uniformity. It was preceded by the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards (1958), better known as the New York
Convention, which has been adopted by more than 140 States. Though not adopted so
widely, the influence of the Model Law has been considerable. A number of countries have
adopted the Model Law; others have amended their laws to take account of its provi-
sions.”
A4—002 In the United Kingdom reports on the Model Law were published by two influential
committees, the Department of Advisory Committee on Arbitration law (“the DAC”’)* and
the Scottish Advisory Committee on Arbitration law (“the Scottish Committee’’).* In short
the DAC advised that the Model Law should not be adopted as, or part of, the arbitration
law of England and Wales, but the Scottish Committee advised that the Model Law should
be adopted by Scotland. One justification for the first report, which is somewhat ironic,
given the stated intention of the Model Law, was the differences between English and
Scottish arbitration laws.°
A4—003 The DAC went on to advise, however, that there should be a new and improved
Arbitration Act for England, Wales and Northern Ireland. In February 1994 a Consultation

"The Model Law is contained in United Nations document A/40/17, Annex 1. It should be
distinguished from the UNCITRAL Rules of Arbitration, which consist of a standard set of
procedural rules for the conduct of an arbitration, (e.g. like those of the ICC or the LCIA) rather
than a Model Law for arbitration.
* By 2007, legislation based on the Model Law had been enacted in 50 countries and six States of the
USA. Some of those countries did not adopt the Model Law but amended their laws to take account
of its provisions.
* A new Arbitration Act ? The response of the Departmental Advisory Committee to the UNCI-
TRAL Model Law on International Commercial Arbitration: HMSO 1989. Subsequent reports
have been published by the DAC—see para.1—044.
* Departmental Advisory Committee on Arbitration Law and Scottish Advisory Committee on
Arbitration Law. The UNCITRAL Model Law on International Commercial Arbitration: A
Consultation Document: October 1987.
> 1990 Arbitration Int. 3.
 Appendix 4 739

paper on Draft Clauses and Schedules of an Arbitration Bill was published. The Consulta-
tion Paper contained the draft of an Arbitration Bill, on which comments were invited.° As
a result of that consultation the DAC reconsidered the matter, the Bill was completely
redrafted and a new report was issued.’ In the explanatory memorandum it was said that
the Bill, which has since been enacted*

... reflects as far as possible the format and provisions of UNCITRAL Model Law on
(vs

International Commerce Arbitration”.”

Revisions to Arts 1, 2 A, 7, 17 and 35 of the Model Law were adopted in 2006 (and, as A4-004
yet, may not be reflected in the arbitration laws of countries which previously adopted the
Model Law).
In view ofits significance to the development of arbitration law in the United Kingdom
and abroad, the provisions of the Model Law (as revised) have been reproduced in this
appendix with comments on each article. The purpose of these comments is to indicate the
similarities and the differences of the Model Law to English arbitration law. The 2006
revisions are noted in the footnotes. It should be noted that references to a Model Law
jurisdiction could now refer to the Model Law either pre or post-amendment, although at
present almost all so-called Model Law jurisdictions have based their law on the pre-
amendment version.

Tue UNCITRAL Mopet Law on INTERNATIONAL COMMERCIAL

ARBITRATION (WITH COMMENTARY)

(Grateful acknowledgement is made to the United Nations Commission on International Trade

Law for granting permission to reproduce this text from www.uncitral.org.)

Cuarpter I. GENERAL PROVISIONS

Article 1. Scope of Application*

(1) This Law applies to international commercial** arbitration, subject to any agree-
ment in force between this State and any other State or States.

(2) The provisions of this Law, except Arts 8, 9, 17H, 171, 17J'°, 35 and 36, apply only
if the place of arbitration is in the territory of this State.

Schedules of an
6 Department of Trade and Industry. A Consultation Paper and Draft Clauses and
Arbitration Bill February 1994: The quotation is taken from Pt III p.1.
7 The DAC report: see abbreviations for the full title of this report.
ibs
* Arbitration Act 1996
18, 1995. In
° Explanatory memorandum to the Arbitration Bill ordered to be printed on December
close regard was
the DAC report on the Arbitration Bill dated February 1996 it was said that “very
to the Model Law” and that the final draft owes “much to this model” (para.4).
paid
10 Articles 17H, 171 and 17J were added in 2006.
 740 Appendix 4

(3) An arbitration is international if:

(a) the parties to an arbitration agreement have, at the time of the conclusion of
that agreement, their places of business in different States; or

(b) one ofthe following places is situated outside the State in which the parties have
their place of business;

(i) the place of arbitration if determined in, or pursuant to, the arbitration
agreement;

(ii) any place where a substantial part of the obligations of the commercial
relationship is to be performed or the place with which the subject-matter
of the dispute is most closely connected; or

(c) the parties have expressly agreed that the subject-matter of the arbitration
agreement relates to more than one country.

(4) For the purposes of para.(3) of this article:

(a) if a party has more than one place of business, the place of business is that
which has the closest relationship to the arbitration agreement;

(b) if a party does not have a place of business, reference is to be made to his
habitual residence.

(5) This Law shall not affect any other law of this State by virtue of which certain
disputes may not be submitted to arbitration or may be submitted to arbitration
only according to provisions other than those of this Law.

* Article headings are for reference purposes only and are not to be used for purposes
of interpretation.
** The term “commercial” should be given a wide interpretation so as to cover matters
arising from all relationships of acommercial nature, whether contractual or not. Relation-
ships of acommercial nature include, but are not limited to, the following transactions: any
trade transaction for the supply or exchange of goods or services; distribution agreement;
commercial representation or agency; factoring; leasing; construction of works; consulting;
engineering; licensing; investment; financing; banking; insurance; exploitation agreement of
concession; joint venture and other forms ofindustrial or business co-operation; carriage of
goods or passengers by air, sea, rail or road.

Commentary

A4-005 International—Part 1 of the Arbitration Act 1996 applies to all arbitrations where the
seat of arbitration is in England and Wales or Northern Ireland (s.2(1)). For the purposes
of English law it does not matter if the dispute is between two English parties over real
property in England or if it is one where the parties and/or the subject matter is foreign.
As a result of the decision not to bring into force ss.85 to 87 of the Arbitration Act 1996,
(see para.2—-004) there is no longer a distinction between domestic and non-domestic
arbitrations.
 Appendix 4 741

Commercial—aArbitration is not limited to commercial disputes under English law. A4006

Other agreements between States—The intention of this provision of the A+007

Model Law is to give overriding effect to Conventions such as the New York Convention
and Washington Convention, which have been incorporated into English law: see paras
8-011 et seq.

Place of Arbitration—The strict territorial application of the Model Law differs A4-008
from English law which is more susceptible to the intention of the parties.

Arbitrability—According to the DAC report of 1989, the primary purpose of this A4009
provision is to deal with “constitutional problems, which are of little, if any, importance in
England”, but see paras 1-027 et seq.

Article 2. Definitions and rules of interpretation

For the purposes of this Law:

(a) ‘‘arbitration” means any arbitration whether or not administered by a permanent

arbitral institution;

(b) “arbitral tribunal” means a sole arbitrator or a panel of arbitrators;

(c) “court” means a body or organ of the judicial system of a State;

(d) where a provision of this Law, except Art.28, leaves the parties free to determine a
certain issue, such freedom includes the right of the parties to authorise a third
party, including an institution, to make that determination;

(e) where a provision of this Law refers to the fact that the parties have agreed or that
they may agree or in any other way refers to an agreement of the parties, such
agreement includes any arbitration rules referred to in that agreement;

(f) where a provision ofthis Law, other than in Arts 25(a) and 32(2)(a), refers to a claim,
it also applies to a counter-claim, and where it refers to a defence, it also applies to
a defence to such counter-claim.

Commentary
Arbitration is not defined in the Arbitration Act 1996, (see para.1—002) but it is apparent A4-010
from the Act that the arbitral tribunal may not only include a sole arbitrator and a panel of
arbitrators but also an umpire. The court, unless its context otherwise requires, is said to
mean the High Court or a county court (see s.82). Appointing authorities (para.(d) above)
and arbitration rules (para.(e)) which may include a provision on the lines of para.(f) are
also well known to English law. (see para.3—045).

Article 2A. International origin and general principles

(1) In the interpretation of this Law, regard is to be had to its international origin and
to the need to promote uniformity in its application and the observance of good
faith.
 742 Appendix 4

(2) Questions concerning matters governed by this Law which are not expressly settled
in it are to be settled in conformity with the general principles on which this Law
is based."!

Commentary
For obvious reasons, no such provision is reflected in the Arbitration Act 1996.

Article 3. Receipt of written communications

(1) Unless otherwise agreed by the parties:

(a) any written communication is deemed to have been received if it is delivered to

the addressee personally or if it is delivered at his place of business, habitual
residence or mailing address; if none of these can be found after making a
reasonable inquiry, a written communication is deemed to have been received if
it is sent to the addressee’s last-known place of business, habitual residence or
mailing address by registered letter or any other means which provides a record
of the attempt to deliver it;

(b) the communication is deemed to have been received on the day it is so deliy-
ered.

(2) The provisions of this article do not apply to communications in court proceed-
ings.

Commentary
A011 The Arbitration Act 1996 contains a similar provision (s.76). (See paras 5—033 and
5-034.)

Article 4. Waiver of right to object

A party who knows that any provision of this Law from which the parties may derogate
or any requirement under the arbitration agreement has not been complied with and yet
proceeds with the arbitration without stating his objection to such non-compliance without
undue delay or, if a time-limit is provided therefor, within such a period of time, shall be
deemed to have waived his right to object.

Commentary
A4-012 The Arbitration Act 1996 contains a similar provision (se.73). (See paras 7-105, 8-032
and 8-051.)

Article 5. Extent of Court Intervention

In matters governed by this Law, no court shall intervene except where so provided in
this Law.

Commentary
A4-013 Of all articles, this most clearly illustrates the tensions between international arbitration
and the national courts. Article 5 tries to limit court intervention to specific instances.
A4-014 The Arbitration Act 1996 states as a general principle that in matters governed by Pt 1
of the Act “the court should not intervene except as provided by this Part” (s.1(c)) and it

"! Article 2A was added in 2006.

 Appendix 4 743

specifies those occasions when intervention may occur. The parties may contract
out of
some but not all of these occasions. (See s.4 and the list of mandatory provisions
in Sch.1
and Chs 7 and 8.)

Article 6. Court or other authority for certain functions of

arbitration assistance and supervision
The functions referred to in Arts 11(3), 11(4), 13(3), 14, 16(3) and 34(2) shall be
performed by [Each State enacting this model law specifies the court, courts or, where
referred to therein other authority competent to perform these functions. |

Commentary
The High Court or a county court may exercise the functions of assistance and A4015
supervision identified in these articles. (Arbitration Act 1996, s.82(1)), (see Chs 7 and
8.)

Cnyarpter II. ARBITRATION AGREEMENT

OpTION I

Article 7. Definition and form of arbitration agreement

(1) “Arbitration agreement” is an agreement by the parties to submit to arbitration all
or certain disputes which have arisen or which may arise between them in respect
ofa defined legal relationship, whether contractual or not. An arbitration agreement
may be in the form of an arbitration clause in a contract or in the form of a separate
agreement.

(2) The arbitration agreement shall be in writing.

(3) An arbitration agreement is in writing if its content is recorded in any form,

whether or not the arbitration agreement or contract has been concluded orally, by
conduct, or by other means.

(4) The requirement that an arbitration agreement be in writing is met by an electronic

communication if the information contained therein is accessible so as to be useable
for subsequent reference; ‘electronic communication” means any communication
that the parties make by means of data messages; ‘‘data message”” means informa-
tion generated, sent, received or stored by electronic, magnetic, optical or similar
means, including, but not limited to, electronic data interchange (EDI), electronic
mail, telegram, telex or telecopy.

(5) Furthermore, an arbitration agreement is in writing if it is contained in an exchange

of statements of claim and defence in which the existence of an agreement is alleged
by one party and not denied by the other.

(6) The reference in a contract to any document containing an arbitration clause

constitutes an arbitration agreement in writing, provided that the reference is such
as to make that clause part of the contract.
 744 Appendix 4

OPTION II

Article 7. Definition of arbitration agreement

“Arbitration agreement” is an agreement by the parties to submit to arbitration all or
certain disputes which have arisen or which may arise between them in respect of a defined
legal relationship, whether contractual or not.'*

Commentary
A4-016 A somewhat broader definition of‘arbitration agreement” appears in the Arbitration Act
1996, s.6 as that section contains no express restriction to a “defined legal relationship”
which appears in both options for Article 7.
A4017 Both the Article 7, Option 1 of the Model Law and the Arbitration Act 1996, s.6, require
that an arbitration agreement be “written” or in writing. Article 7, Option 1 and the
Arbitration Act 1996, s.5 recognise that the requirement of writing is to be broadly
interpreted (the Model Law recognises that an arbitration agreement is in writing if “its
content is recorded in any form” and the Arbitration Act 1996, s.5 notes only that it must
be “evidenced in writing’). Article 7, Option 2 of the Model Law is, on its face,
considerably broader, not requiring an arbitration agreement to be in writing. Oral arbitra-
tion agreements are recognised by English law, but they fall outside the scope of the
Arbitration Act 1996—see paragraphs 2—045).

Article 8. Arbitration agreement and substantive claim before

court
(1) A court before which an action is brought in a matter which is the subject of an
arbitration agreement shall, if aparty so requests not later than when submitting his
first statement on the substance of the dispute, refer the parties to arbitration unless
it finds that the agreement is null and void, inoperative or incapable of being
performed.

(2) Where an action referred to in para.(1) of this article has been brought, arbitral
proceedings may nevertheless be commenced or continued, and an award may be
made, while the issue is pending before the court.

Commentary
A4-018 As a result of the decision not to bring into force ss.85 to 87 inclusive of the Arbitration
Act 1996, an English court has no discretion but to stay the action brought in breach of a
valid arbitration agreement, whether it be domestic or non-domestic (s.9). Thus, although

'* The two options in Article 7 were added in 2006. Before the 2006 amendments, Article 7 read as
follows: “Article 7, Definition and form of arbitration agreement
(1) ‘Arbitration agreement’ is an agreement by the parties to submit to arbitration all or certain
disputes which have arisen or which may arise between them in respect of a defined legal
relationship, whether contractual or not. An arbitration agreement may be in the form of an
arbitration clause in a contract or in the form of a separate agreement.
(2) The arbitration agreement shall be in writing. An agreement is in writing if it is contained
in a document signed by the parties or in an exchange of letters, telex, telegrams or other
means of telecommunication which provide a record of the agreement, or in an exchange of
statements of claim and defence in which the existence of an agreement is alleged by one
party and not denied by another. The reference in a contract to a document containing an
arbitration clause constitutes an arbitration agreement provided that the contract is in
writing and the reference is such as to make that clause part of the contract.”
 Appendix 4 745

there are some minor differences of definition, Art.8(1) of the Model Law reflects the
English law position in respect of all arbitrations, (see paras 7-005 et seq.).
Article 8(2) of the Model Law is consistent with the Arbitration Act 1996, s.32(4) which A4019
unless otherwise agreed by the parties, authorises the arbitral tribunal to continue the
arbitration proceedings and to make an award while an application to the court is pending
in order to determine a question as to its substantive jurisdiction (see s.24(3) and par-
a.7/—031).

Article 9. Arbitration agreement and interim measures by court

It is not incompatible with an arbitration agreement for a party to request, before or
during arbitral proceedings, from a court an interim measure of protection and for a court
to grant such measure.

Commentary
This provision is also consistent with English law. Subject to certain restrictions, a party A4020
to an arbitration agreement can apply at any time to the court for a wide range of interim
measures to preserve assets (e.g. a Mareva injunction) and to secure evidence. The
Arbitration Act 1996, s.44 gives the court express power (unless otherwise agreed by the
parties) to make orders, about the matters listed in s.44(2), but ‘‘only if and to the extent
that” the arbitral tribunal or any institution agreed by the parties “has no power or is unable
for the time being to act effectively” (s.44(5)). The court no longer has power to order
disclosure or security for costs. (See paras 7-129 et seq.).

CuHapter III. COMPOSITION OF ARBITRAL TRIBUNAL

Article 10. Number of arbitrators

(1) The parties are free to determine the number of arbitrators.

(2) Failing such determination, the number of arbitrators shall be three.

Commentary
The first paragraph of this article is consistent with English law but the second A4021
paragraph is not, for unless a contrary intention is expressed in the arbitration agreement
(or in arbitration rules incorporated into that agreement) there will be a sole arbitrator
(Arbitration Act 1996, s.15), (see paras 4-006 and 4-062).
As an aside, it is worth repeating here the observation made in the DAC report (1989), A4-022
namely that the Model Law does not recognise the system oftwo arbitrators and an umpire,
(contrast Arbitration Act 1996, s.15(2) and see para.4—009).

Article 11. Appointment of Arbitrators

(1) No person shall be precluded by reason of his nationality from acting as an
arbitrator, unless otherwise agreed by the parties.

(2) The parties are free to agree on a procedure of appointing the arbitrator or
arbitrators, subject to the provisions of paragraphs (4) and (5) of this article.

(3) Failing such agreement

(a) in an arbitration with 3 arbitrators, each party shall appoint one arbitrator, and
the 2 arbitrators thus appointed shall appoint the third arbitrator; ifaparty fails
to appoint the arbitrator within 30 days of receipt of a request to do so from the
 746 Appendix 4

other party, or if the 2 arbitrators fail to agree on the third arbitrator within 30
days of their appointment, the appointment shall be made, upon request of a
party, by the court or other authority specified in Art.6;

(b) in an arbitration with a sole arbitrator, if the parties are unable to agree on the
arbitrator, he shall be appointed, upon request of a party, by the court or other
authority specified in Art.6.

(4) Where, under an appointment procedure agreed upon by the parties,

(a) a party fails to act as required under such procedure, or

(b) the parties, or 2 arbitrators, are unable to reach an agreement expected of them
under such procedure, or

(c) a third party, including an institution, fails to perform any function entrusted
to it under such procedure,

any party may request the court or other authority specified in article 6 to take the
necessary measure, unless the agreement on the appointment procedure provides
other means for securing the appointment.
(5) A decision on a matter entrusted by para.(3) or (4) of this article to the court or
other authority specified in Art.6 shall be subject to no appeal. The court or other
authority, in appointing an arbitrator, shall have due regard to any qualifications
required of the arbitrator by the agreement of the parties and to such considerations
as are likely to secure the appointment of an independent and impartial arbitrator
and, in the case of a sole or third arbitrator, shall take into account as well the
advisability of appointing an arbitrator of a nationality other than those of the
parties.

Commentary
A4023 Although there is no express provision to this effect, English law does not impose any
nationality restriction on arbitrators. There is no limitation on the parties’ freedom to agree
upon a procedure for the appointment of an arbitral tribunal (Arbitration Act 1996,
s.16(1)), although if such an agreement breaks down (or if there is no agreement) the court
will appoint one or more arbitrators upon the application of the parties (s.18). The court
will also take account of any qualification requirement (e.g. a Q.C. or “individual with
commercial expertise”) required of an arbitrator (s.19), (see para.4—024).
A4-024 Where the arbitration agreement provides for the appointment oftwo arbitrators, one by
each party, there is no equivalent in the Model Law to the provision contained in s.17 of
the Arbitration Act 1996, whereby failure to appoint a second arbitrator may result in a
party-appointed arbitrator becoming sole arbitrator contrary to the express terms of the
arbitration agreement (see para.4—064).

Article 12. Grounds for Challenge

(1) When a person is approached in connection with his possible appointment as an
arbitrator, he shall disclose any circumstances likely to give rise to justifiable doubts
as to his impartiality or independence. An arbitrator, from the time of his appoint-
ment and throughout the arbitral proceedings, shall without delay disclose any such
circumstances to the parties unless they have already been informed of them by
him.
(2) An arbitrator may be challenged only if circumstances exist that give rise to
justifiable doubts as to his impartiality or independence, or if he does not possess
 Appendix 4 747

qualifications agreed to by the parties. A party may challenge an arbitrator

appointed by him, or in whose appointment he has participated, only for reasons of
which he becomes aware after the appointment has been made.

Commentary
There is no provision for disclosure under English law (as opposed to arbitration rules) A4025
equivalent to the first paragraph of this article. A party to arbitration proceedings may
however, apply to the court to remove an arbitrator because “circumstances exist that give
rise to justifiable doubts as to his impartiality” or because “he does not possess the
qualifications required by the arbitration agreement” and for other grounds (Arbitration
Act 1996, s.24, see paras 4-029 et seg., 5-052 and 7-074 et seq.).

Article 13. Challenge procedure

(1) The parties are free to agree on a procedure for challenging an arbitrator, subject
to the provisions of para.(3) of this article.
(2) Failing such agreement, a party who intends to challenge an arbitrator shall, within
15 days after becoming aware of the constitution of the arbitral tribunal or after
becoming aware of any circumstances referred to in Art.12(2), send a written
statement of the reasons for the challenge to the arbitral tribunal. Unless the
challenged arbitrator withdraws from his office or the other party agrees to the
challenge, the arbitral tribunal shall decide on the challenge.
(3) If a challenge under any procedure agreed upon by the parties or under the
procedure of para.(2) of this article is not successful, the challenging party may
request, within 30 days after having received notice of the decision rejecting the
challenge, the court or other authority specified in Art.6 to decide on the challenge,
which decision shall be subject to no appeal; while such a request is pending, the
arbitral tribunal, including the challenged arbitrator, may continue the arbitral
proceedings and make an award.

Commentary
Although not expressed in the same terms, there is a challenge procedure in the A4+-026
Arbitration Act 1996 (s.24) which also recognises that the parties may agree on recourse to
a third party or institution (e.g. to the London Court of International Arbitration—see
Art.3 of the LCIA Rules of Arbitration). There is no time limit for applying to the court,
although a party may in due course lose his right to challenge (s.73, see para.4—209).

Article 14. Failure or impossibility to act

(1) If an arbitrator becomes de jure or de facto unable to perform his functions or for
other reasons fails to act without undue delay, his mandate terminates if he
withdraws from his office or if the parties agree on the termination. Otherwise, if
a controversy remains concerning any of these grounds, any party may request the
court or other authority specified in Art.6 to decide on the termination of the
mandate, which decision shall be subject to no appeal.

(2) If, under this article or Art.13(2), an arbitrator withdraws from his office or a party
agrees to the termination of the mandate of an arbitrator, this does not imply
acceptance of the validity of any ground referred to in this Article or Art.12(2).

Commentary
There is no provision in English law for the automatic termination of an arbitrator’s A4027
mandate if he fails to act. On the contrary, unless the parties agree otherwise, the authority
 748 Appendix 4

of an arbitral tribunal once appointed is irrevocable except as provided by the Arbitration

Act 1996, s.23. There is however a provision which empowers the court to remove an
arbitrator in the circumstances described in Art.14(1) above, (i.e. s.24(1)) for refusal to act
and for among other things undue delay) (see Ch.7).

Article 15. Appointment of substitute arbitrator

Where the mandate of an arbitrator terminates under Arts 13 or 14 or because of his
withdrawal from office for any other reason or because of the revocation of his mandate by
agreement of the parties or in any other case of termination of his mandate, a substitute
arbitrator shall be appointed according to the rules that were applicable to the appointment
of the arbitrator being replaced.

Commentary
A4-028 In the absence of an applicable arbitration rule or agreement by the parties the court is
empowered to appoint a substitute arbitrator or umpire (the Arbitration Act 1996,
s.18(3)(d), see para.7—094).

CuHapPTER IV. JURISDICTION OF ARBITRAL TRIBUNAL

Article 16. Competence of arbitral tribunal to rule on its

jurisdiction
(1) The arbitral tribunal may rule on its own jurisdiction, including any objections with
respect to the existence or validity of the arbitration agreement. For that purpose,
an arbitration clause which forms part of acontract shall be treated as an agreement
independent of the other terms of the contract. A decision by the arbitral tribunal
that the contract is null and void shall not entail ipso jure the invalidity of the
arbitration clause.

(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later
than the submission of the statement of defence. A party is not precluded from
raising such a plea by the fact that he has appointed, or participated in the
appointment of, an arbitrator. A plea that the arbitral tribunal is exceeding the scope
of its authority shall be raised as soon as the matter alleged to be beyond the scope
ofits authority is raised during the arbitral proceedings. The arbitral tribunal may,
in either case, admit a later plea if it considers the delay justified.

(3) The arbitral tribunal may rule on a plea referred to in para.(2) of this article either
as a preliminary question or in an award on the merits. If the arbitral tribunal rules
as a preliminary question that it has jurisdiction, any party may request, within 30
days after having received notice of that ruling, the court specified in article 6 to
decide the matter, which decision shall be subject to no appeal; while such a request
is pending, the arbitral tribunal may continue the arbitral proceedings and make an
award.

Commentary
A4-029 Unless otherwise agreed by the parties, the Arbitration Act 1996 provides for:

(a) the separability of the arbitration agreement from other terms of the contract
(s.7);
(b) the arbitral tribunal ruling on its own substantive jurisdiction (s.30(1); and
 Appendix 4 749
(c) challenge of that ruling by “any available arbitral process of appeal or review or in
accordance with the provisions” of Pt 1 of the Act (s.30(2).

The Arbitration Act 1996 (ss.31 and 32) contain similar but not identical provisions to those
in Arts 16(2) and (3) above (see paras 2-049 et seq. and 7-097 et seq.).

CuHapTer IVA INTERIM MEASURES AND PRELIMINARY ORDERS

Section 1. Interim measures

Article 17. Power of arbitral tribunal to order interim measures

(1) Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of
a party, grant interim measures.

(2) An interim measure is any temporary measure, whether in the form of an award or
in another form, by which, at any time prior to the issuance of the award by which
the dispute is finally decided, the arbitral tribunal orders a party to:

(a) Maintain or restore the status quo pending determination of the dispute;

(b) Take action that would prevent, or refrain from taking acting that is likely to
cause, current or imminent harm or prejudice to the arbitral process itself;

(c) Provide a means of preserving assets out of which a subsequent award may be
satisfied; or

(d) Preserve evidence that may be relevant and material to the resolution of the
dispute.'*

Article 17A. Conditions for granting interim measures

(1) The party requesting an interim measure under Art.17, para.2(a), (b) and (c) shall
satisfy the arbitral tribunal that:

(a) Harm not adequately reparable by an award of damages is likely to result if the
measure is not ordered, and such harm substantially outweighs the harm that
is likely to result to the party against whom the measure is directed if the
measure is granted; and

(b) There is a reasonable possibility that the requesting party will succeed on the
merits of the claim. The determination on this possibility shall not affect the
discretion of the arbitral tribunal in making any subsequent determination.

(2) With regard to a request for an interim measure under Art.17, para.2(d), the
requirements in para.1(a) and (b) of this article shall apply only to the extent the
arbitral tribunal considers appropriate.

13 The interim measures provisions were expanded considerably as a result of the 2006 amendments,
with the amendment ofArticle 17 and the addition of Articles 17A to 17J. Article 17 previously read
as follows: “Article 17. Power of arbitral tribunal to order interim measures.
Unless otherwise agreed by the parties, the arbitral tribunal may, at the request ofa party, order
any party to take such interim measures of protection as the arbitral tribunal may consider
necessary in respect of the subject-matter of the dispute. The arbitral tribunal may require any
party to provide appropriate security in connection with such measure.”
750 Appendix 4

Section 2. Preliminary orders

Article 17B. Applications for preliminary orders and conditions

for granting preliminary orders
(1) Unless otherwise agreed by the parties, a party may, without notice to any other
party, make a request for an interim measure together with an application for a
preliminary order directing a party not to frustrate the purpose of the interim
measure requested.

(2) The arbitral tribunal may grant a preliminary order provided it considers that prior
disclosure of the request for the interim measure to the party against whom it 1s
directed risks frustrating the purpose of the measure.

The conditions defined under Art.17A apply to any preliminary order, provided
that the harm to be assessed under Art.17A, para.1(a), 1s the harm likely to result
from the order being granted or not.

Article 17C. Specific regime for preliminary orders

(1) Immediately after the arbitral tribunal has made a determination in respect of an
application for a preliminary order, the arbitral tribunal shall give notice to all
parties of the request for the interim measure, the application for the preliminary
order, the preliminary order, if any, and all other communications, including by
indicating the content of any oral communication, between any party and the
arbitral tribunal in relation thereto.

At the same time, the arbitral tribunal shall give an opportunity to any party against
whom a preliminary order is directed to present its case at the earliest practicable
time.

The arbitral tribunal shall decide promptly on any objection to the preliminary
order.

A preliminary order shall expire after twenty days from the date on which it was
issued by the arbitral tribunal. However, the arbitral tribunal may issue an interim
measure adopting or modifying the preliminary order, after the party against whom
the preliminary order is directed has been given notice and an opportunity to
present its case.

(5) A preliminary order shall be binding on the parties but shall not be subject to
enforcement by a court. Such a preliminary order does not constitute an award.

Section 3. Provisions applicable to interim measures and

preliminary orders

Article 17D. Modification, suspension, termination

The arbitral tribunal may modify, suspend or terminate an interim measure or a
preliminary order it has granted, upon application of any party or, in exceptional circum-
stances and upon prior notice to the parties, on the arbitral tribunal’s own initiative.

Article 17E. Provision of security

(1) The arbitral tribunal may require the party requesting an interim measure to
provide appropriate security in connection with the measure.
 Appendix 4 fis)

(2) The arbitral tribunal shall require the party applying for a preliminary order to
provide security in connection with the order unless the arbitral tribunal considers
it inappropriate or unnecessary to do so.

Article 17F. Disclosure

(1) The arbitral tribunal may require any party promptly to disclose any material
change in the circumstances on the basis of which the measure was requested or
granted.

(2) The party applying for a preliminary order shall disclose to the arbitral tribunal all
circumstances that are likely to be relevant to the arbitral tribunal’s determination
whether to grant or maintain the order, and such obligation shall continue until the
party against whom the order has been requested has had an opportunity to present
its case. Thereafter, para.1 of this article shall apply.

Article 17G. Costs and damages

The party requesting an interim measure or applying for a preliminary order shall be
liable for any costs and damages caused by the measure or the order to any party if the
arbitral tribunal later determines that, in the circumstances, the measure or the order
should not have been granted. The arbitral tribunal may award such costs and damages at
any point during the proceedings.

Section 4. Recognition and enforcement of interim measures

Article 17H. Recognition and enforcement

(1) An interim measure issued by an arbitral tribunal shall be recognized as binding
and, unless otherwise provided by the arbitral tribunal, enforced upon application
to the competent court, irrespective of the country in which it was issued, subject
to the provisions of Art.17I.

(2) The party who is seeking or has obtained recognition or enforcement of an interim
measure shall promptly inform the court of any termination, suspension or mod-
ification of that interim measure.
(3) The court of the State where recognition or enforcement is sought may, if it
considers it proper, order the requesting party to provide appropriate security if the
arbitral tribunal has not already made a determination with respect to security or
where such a decision is necessary to protect the rights of third parties.

Article 171. Grounds for refusing recognition or enforcement*

(1) Recognition or enforcement of an interim measure may be refused only:

(a) At the request of the party against whom it is invoked if the court is satisfied
that:
(i) Such refusal is warranted on the grounds set forth in Art.36, para.1(a)(1),
(ii), (111) or (iv); or

* The conditions set forth in Art.17I are intended to limit the number ofcircumstances in which the
court may refuse to enforce an interim measure. It would not be contrary to the level of
harmonization sought to be achieved by these model provisions if a State were to adopt fewer
circumstances in which enforcement may be refused.
 752 Appendix 4

(ii) The arbitral tribunal’s decision with respect to the provision of security in
connection with the interim measure issued by the arbitral tribunal has not
been complied with; or

(iii) The interim measure has been terminated or suspended by the arbitral
tribunal or, where so empowered, by the court of the State in which the
arbitration takes place or under the law of which that interim measure was
granted; or

(b) If the court finds that:

(i) The interim measure is incompatible with the powers conferred upon the
court unless the court decides to reformulate the interim measure to the
extent necessary to adapt it to its own powers and procedures for the
purposes of enforcing that interim measure and without modifying its
substance; or

(ii) Any of the grounds set forth in Art.36, para.1(b)(i) or (i1), apply to the
recognition and enforcement of the interim measure.

(2) Any determination made by the court on any ground in para.1 of this article shall
be effective only for the purposes of the application to recognise and enforce the
interim measure. The court where recognition or enforcement is sought shall not,
in making that determination, undertake a review of the substance of the interim
measure.

Section 5. Court-ordered interim measures

Article 17J. Court-ordered interim measures

A court shall have the same power of issuing an interim measure in relation to arbitration
proceedings, irrespective of whether their place is in the territory of this State, as it has in
relation to proceedings in courts. The court shall exercise such power in accordance with
its own procedures in consideration of the specific features of international arbitration.

Commentary
A4-030 The recent amendment to Art.17 is a major re-statement and extension of the circum-
stances in which arbitral tribunals have the power to issue interim measures in support of
arbitration An innovative provision in the form of 17H and I has also been introduced to
provide for enforcement internationally of orders granting interim measures issued by
tribunals. This has previously been a difficult area, as often orders granting interim
measures have not been capable of enforcement outside the place of the seat of arbitration.
The powers of the arbitral tribunal to grant interim measures apply unless otherwise agreed
by the parties.
Similarly, under the Arbitration Act 1996, interim measures can be granted by the
arbitral tribunal or the court. Unless otherwise agreed by the parties, an arbitral tribunal
has powers conferred by s.38 which include the power to order the claimant to provide
security for costs (a power previously reserved to the court, (see para.5—098)) and the power
to direct the preservation of property. The powers under Art.17A however are broader.
Under s.44 of the Arbitration Act, the court has various powers exercisable in support of
arbitration proceedings including to order the preservation of evidence and, most notably,
the granting of interim injunctive relief (see para.7—181 to 7-202). In non-urgent cases, the
court may only act upon the application by one party made with the consent of the arbitral
 Appendix 4 753

tribunal or the agreement of the other parties. The court’s s.44 powers are available unless
otherwise agreed by the parties (whereas the powers conferred by Art.17J are absolute).

CuHapTer V. ConpduCT OF ARBITRAL PROCEEDINGS

Article 18. Equal treatment of parties

The parties should be treated with equality and each party shall be given a full
opportunity of presenting his case.

Commentary
Although not expressed in quite the same terms, the Arbitration Act 1996 imposes a A4031
general duty on the arbitral tribunal to act “fairly and impartially as between the parties”
(s.33).
That duty requires the tribunal to give each party a reasonable (as opposed to a full) A4-032
opportunity to put his case and to deal with that of his opponent and to “adopt procedures
suitable to the circumstances of the particular case, avoiding unnecessary delay or expense,
so as to provide a fair means for the resolution of the matters falling to be determined”.
(Section 33(1)(b)). This modification to the Model Law provision is intended to comple-
ment the English concept of natural justice and to recognise the fact that in an informal
arbitration there is often no oral hearing and the parties are not legally represented (see
DAC report (1989) p.55 and para.5—050).

Article 19. Determination of rules of procedure

(1) Subject to the provisions of this Law, the parties are free to agree on the procedure
to be followed by the arbitral tribunal in conducting the proceedings.

(2) Failing such agreement, the arbitral tribunal may, subject to the provision of this
Law, conduct the arbitration in such manner as it considers appropriate. The power
conferred upon the arbitral tribunal includes the power to determine the admissi-
bility, relevance, materiality and weight of any evidence.

Commentary
Parties are free to agree on a procedure for an English arbitration. In the absence of A4033
agreement the Arbitration Act 1996 provides that “it shall be for the tribunal to decide all
procedural and evidentiary matters” (s.34(1)). Those matters give the arbitral tribunal a
wide discretion on how to conduct the proceedings, and are expressed to include power to
determine “‘the admissibility, relevance or weight” of evidence (s.34(2)). Unless the parties
agree otherwise the tribunal is free to decide whether to apply strict rules of evidence or
“any other rules”’. (s.34(2) see para.5—155).

Article 20. Place of arbitration

(1) The parties are free to agree on the place of arbitration. Failing such agreement, the
place of arbitration shall be determined by the arbitral tribunal having regard to the
circumstances of the case, including the convenience of the parties.

(2 SS Notwithstanding the provisions of para.(1) of this article, the arbitral tribunal may,
unless otherwise agreed by the parties, meet at any place it considers appropriate for
consultation among its members, for hearing witnesses, experts or the parties, or for
inspection of goods, other property or documents.
 754 Appendix 4

Commentary
A4-034 In an English arbitration the parties are free to agree “when and where any part of the
proceedings is to be held” (Arbitration Act 1996 (s.34)). Failing such agreement, the Act
provides that “‘it shall be for the tribunal to decide” the matter (s.34(2)(a).
A4-035 There is no provision in the Arbitration Acts 1996 similar to Art.20(2) of the Model Law.
On the contrary, s.34 indicates that if aplace of arbitration has been agreed by the parties
(e.g. in the arbitration clause) the arbitral tribunal cannot without their consent sit
elsewhere. (see para.5—092).

Article 21. Commencement of arbitral proceedings

Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular
dispute commence on the date which a request for that dispute to be referred to arbitration
is received by the respondent.

Commentary
A4-036 Parties are free to agree “‘when arbitration proceedings are to be regarded as commenced
for the purposes of “the Limitation Acts and Part 1” of the Arbitration Act 1996, s.14(1).
If there is no agreement on the commencement date of proceedings in respect of a
particular dispute the provisions of s.14 of the Arbitration Act 1996 will be applied to
determine the matter (ss.14(2) et seq.: see paras 5—005 et seq.).
A+4037 English law places emphasis on service of the notice requesting arbitration rather than on
receipt by the respondent (see s.14(3) and (4) of the Arbitration Act 1996). Section 79 of
the Act empowers the court to extend contractual, but not statutory, time limits for
commencing arbitration proceedings (see paras 7-033 et seq.).

Article 22. Language

(1) The parties are free to agree on the language or languages to be used in the arbitral
proceedings. Failing such agreement, the arbitral tribunal shall determine the
language or languages to be used in the proceedings. This agreement or determina-
tion, unless otherwise specified therein, shall apply to any written statement by a
party, any hearing and any award, decision or other communication by the arbitral
tribunal.

(2) The arbitral tribunal may order that any documentary evidence shall be accom-
panied by a translation into the language or languages agreed upon by the parties
or determined by the arbitral tribunal.

Commentary
A4-038 The Arbitration Act 1996 also expresses the freedom of the parties to agree on the
“Janguage or languages to be used in the proceedings” (s.34(2)(b)). Failing any agreement,
the arbitral tribunal is required to decide any language issue, which may extend to written
submissions, directions or an award, as well as “whether translations of any relevant
documents are to be supplied” (s.34(2)(b): see paras 5-180 et seq.).

Article 23. Statements of claim and defence

(1) Within the period of time agreed by the parties or determined by the arbitral
tribunal, the claimant shall state the facts supporting his claim, the points at issue
and the relief or remedy sought, and the respondent shall state his defence in
respect of these particulars, unless the parties have otherwise agreed as to the
required elements of such statements. The parties may submit with their statements
 Appendix 4 TENS

all documents they consider to be relevant or may add a reference to the documents
or other evidence they will submit.
(2) Unless otherwise agreed by the parties, either party may amend or supplement his
claim or defence during the course of the arbitral proceedings, unless the arbitral
tribunal considers it inappropriate to allow such amendment having regards to the
delay in making it.

Commentary
The Arbitration Act 1996 gives the arbitral tribunal a wide discretion to decide (subject A4-039
to the right of the parties to agree any particular matter) whether and if so what form of
written statements of claim and defence can be used, when these should be supplied and the
extent to which such statements can be later amended (s.34(2)(c)) as well as whether any and
if so which documents or classes of documents should be disclosed between and produced
by the parties and at what stage (s.34(2)(d)).

Formal arbitrations conducted in England tend to proceed on the lines indicated in A4+040
Art.23(1) of the Model law with points of claim followed by a statement of the defence and
counterclaim, if any, and other written pleading. Disclosure of documents usually takes
place after close of pleadings. There is, however, considerable flexibility in practice, and
arbitral institutions publish their own particular rules. Informal arbitrations often follow a
simplified procedure (see paras 5-110 et seg.).
Provided that the amendments fall within the scope of the reference, the Arbitration Act
1996 gives the arbitral tribunal a discretion to allow a party to amend or supplement the
claim or defence during the course of the proceedings (see s.34(2)(c) and para.5—148).

Article 24. Hearings and written proceedings

(1) Subject to any contrary agreement by the parties, the arbitral tribunal shall decide
whether to hold oral hearings for the presentation of evidence or for oral argument,
or whether the proceedings shall be conducted on the basis of documents and other
materials. However, unless the parties have agreed that no hearings shall be held,
the arbitral tribunal shall hold such hearings at an appropriate stage of the proceed-
ings, if so requested by a party.
(2)— The parties shall be given sufficient advance notice of any hearing and of any
meeting of the arbitral tribunal for the purposes of inspection of goods, other
property or documents.

(3 a All statements, documents or other information supplied to the arbitral tribunal by

one party shall be communicated to the other party. Also any expert report or
evidentiary document on which the arbitral tribunal may rely in making its decision
shall be communicated to the parties.

Commentary
Within the general duty contained in s.33 and subject to the right of the parties to agree A041
otherwise (e.g. to a “documents only” arbitration) the Arbitration Act 1996 gives the
tribunal a discretion whether and to what extent there should be “oral or written evidence
or submissions” or both (s.34(2)(h)). The Arbitration Act does not require that there shall
be a hearing even if one party requests it, although in most cases such a request would be
granted (see para.5—210).
Under English law an arbitra! tribunal is required to give each party a reasonable A4042
opportunity of putting his case and dealing with that of his opponent (s.33(1)(a) Arbitration
 756 Appendix 4
Act 1996) and to conduct the arbitral proceedings so as to comply with that general duty.
(Section 33(2).) Thus, although with one exception Arts 24(2) and (3) of the Model law are
not expressed in the Arbitration Act, they are implicit from s.33. The exception is
contained in s.37(1)(b) of the Act, which requires that the parties are given a reasonable
opportunity to comment on any information, opinion or advice offered by an expert
appointed by the tribunal, (see paras 5-173 et seq.).

Article 25. Default of a party

Unless otherwise agreed by the parties, if, without showing sufficient cause

(a) the claimant fails to communicate his statement of claim in accordance with
Art.23(1), the arbitral tribunal shall terminate the proceedings;

(b) the respondent fails to communicate his statement of defence in accordance with
Art.23(1), the arbitral tribunal shall continue the proceedings without treating such
failure in itself as an admission of the claimant’s allegations;

(b) any party fails to appear at a hearing or to produce documentary evidence, the
arbitral tribunal may continue the proceedings and make the award on the evidence
before it.

Commentary
A4043 An arbitral tribunal has no power under English law to terminate the proceedings if a
claimant fails to communicate his statement of claim within an agreed period, although the
parties may agree to confer power on the tribunal in case of a party’s failure to do something
necessary for the proper and expeditious conduct of the arbitration (s.41(1) Arbitration Act
1996). In the absence of agreement the tribunal does, however, have power to dismiss
certain claims for want of prosecution,—(s.41(3) and see para.5—240).
A4—044 The provision in Art.25(b) and (c) of the Model Law broadly represents English law,
when after due notice the tribunal may proceed ex parte in default of apleading or evidence
or the appearance of a party at the hearing, but without treating such failure in itself as an
admission. (Arbitration Act 1996, s.41(4): see paras 5-216 and 5-217).

Article 26. Expert appointed by arbitral tribunal

(1) Unless otherwise agreed by the parties, the arbitral tribunal

(a) may appoint one or more experts to report to it on specific issues to be

determined by the arbitral tribunal;

(b) may require a party to give the expert any relevant information or to produce,
or to provide access to, any relevant documents, goods or other property for his
inspection.

(2) Unless otherwise agreed by the parties, if a party so requests or if the arbitral
tribunal considers it necessary, the expert shall, after delivery of his written or oral
report, participate in a hearing where the parties have the opportunity to put
questions to him and to present expert witnesses in order to testify on the points
at issue.

Commentary
A4-045 The Arbitration Act 1996 contains a similar provision in s.37(1). The English provision
extends expressly to legal advisers and assessors, and perhaps as a consequence the tribunal
 Appendix 4 757

has a wider discretion under English law than is apparent from Art.26(2) whether to allow
the expert to be questioned by the parties at the hearing.
Despite the statutory power to appoint an expert, the English practice is to let each party A4-046
(as opposed to the tribunal) adduce expert evidence if required and to allow examination of
the expert witness after exchange of reports and possibly a “without prejudice” meeting
with the other party’s expert. (See paras 5-172 et seq.)

Article 27. Court assistance in taking evidence

The arbitral tribunal or a party with the approval of the arbitral tribunal may request
from a competent court of this State assistance in taking evidence. The court may execute
the request within its competence and according to its rules on taking evidence.

Commentary
The Arbitration Act 1996 contains provisions that will secure the attendance of witnesses A4-047
before the tribunal as well as make available the powers of the court to take evidence. A
party to an arbitration may with the permission of the tribunal or with the agreement of the
other parties to the arbitration issue a subpoena out of the court directing a witness to attend
before the arbitral tribunal to give oral evidence or to bring documents to a hearing (s.43),
see para.5—171 and paras 7-125 and 7-126. A party may also apply to the court for “‘the
taking of the evidence of witnesses” (s.44(2)) which may include the issue of a commission
or request for the examination of a witness out of the jurisdiction. (See para.7—134).

CuHarptTer VI. MAKING AWARD AND TERMINATION OF PROCEEDINGS

Article 28. Rules applicable to substance of dispute

(1) The arbitral tribunal shall decide the dispute in accordance with such rules of law
as are chosen by the parties as applicable to the substance of the dispute. Any
designation of the law or legal system of a given State shall be construed, unless
otherwise expressed, as directly referring to the substantive law of that State and
not to its conflict of laws rules.
(2) Failing any designation by the parties, the arbitral tribunal shall apply the law
determined by the conflict of laws rules which it considers applicable.

(3) The arbitral tribunal shall decide ex aequo et bono or as amiable compositeur only
if the parties have expressly authorised it to do so.

(4) In all cases, the arbitral tribunal shall decide in accordance with the terms of the
contract and shall take into account the usages of the trade applicable to the
transaction.

Commentary
The Arbitration Act 1996, s.46 contains provisions similar to those in Art.28. The terms A4-048
of Art.28(3) are expressed somewhat more broadly in s.46(1)(b) of the Arbitration Act and
there is no express equivalent to Art.28(4), but such differences as exist between English
law and the Model law on the rules applicable to the substance of the dispute are more
significant in practice than in the words used (see paras 4-164 ef seq.).

Article 29. Decision making by panel of arbitrators

In arbitral proceedings with more than one arbitrator, any decision of the arbitral tribunal
shall be made, unless otherwise agreed by the parties, by a majority of all its members.
 758 Appendix 4

However, questions of procedure may be decided by a presiding arbitrator, if so authorised

by the parties or all members of the arbitral tribunal.

Commentary
A4049 In this matter English law does not make the same distinction between decisions and
procedural questions. Although all members of an arbitral tribunal are required to partici-
pate in the decision making, if they cannot agree upon a “decision, order or award”, it shall
be decided by a majority of them, failing which “‘the view of the chairman shall prevail” in
the absence of another method of decision making agreed by the parties (Arbitration Act
1996, s.20) see para.6—059.

Article 30. Settlement

(1) If, during arbitral proceedings, the parties settle the dispute, the arbitral tribunal
shall terminate the proceedings and, if requested by the parties and not objected by
the arbitral tribunal, record the settlement in the form of an arbitral award on
agreed terms.

(2) An award on agreed terms shall be made in accordance with the provisions of
Art.31 and shall state that it is an award. Such an award has the same status and
effect as any other award on the merits of the case.

Commentary
A050 The Arbitration Act 1996, s.51 contains similar provisions for an “‘agreed award” in the
event that the arbitral proceedings are settled and the parties do not agree some other
provisions. Section 51(5) also provides for how costs should be dealt with in the absence of
agreement, (see paras 6—023 ef seq.).

Article 31. Form and contents of award

(1) The award shall be made in writing and shall be signed by the arbitrator or
arbitrators. In arbitral proceedings with more than one arbitrator, the signatures of
the majority of all members of the arbitral tribunal shall suffice, provided that the
reason for any omitted signature is stated.

(2) The award shall state the reasons upon which it is based, unless the parties have
agreed that no reasons are to be given or the award is an award on agreed terms
under Art.30.

(3) The award shall state its date and the place of arbitration as determined in
accordance with Art.20(1). The award shall be deemed to have been made at that
place.

(4) After the award is made, a copy signed by the arbitrators in accordance with para.(1)
of this article shall be delivered to each party.

Commentary
A4-051 The Arbitration Act 1996, s.52 expresses the freedom ofthe parties to agree on the form
of the award. In the absence of agreement, the section requires that the award:

(a) shall be in writing signed by all the arbitrators or all those assenting to the award
(s.52(3));
(b) shall contain the reasons for the award unless it is an “agreed award” or the parties
have agreed to dispense with reasons (s.52(4)); and
 Appendix 4 759

(c) shall state the seat of the arbitration and the date when the award is made
(s.52(5)).

The deeming provision in Art.31(3) is reflected in s.53 of the Arbitration Act 1996 where
the seat of the arbitration is in England or Wales, unless otherwise agreed by the parties.
Section 54 of the Act also provides how the date of an award is determined in the absence
of an agreement by the parties or a decision by the arbitral tribunal, (see paras 6-045 et
seq.).
A parol award can be given (e.g. in an emergency) although it is invariably confirmed in
writing, if only for the purpose of enforcement. Further, the power given to the tribunal to
correct a clerical mistake or error in the award implies that it will be reduced to writing,
(s.57(3): see paras 6-049 and 6-194).

Article 32. Termination of proceedings

(1) The arbitral proceedings are terminated by the final award or by an order of the
arbitral tribunal in accordance with para.(2) of this article.

(2) The arbitral tribunal shall issue an order for the termination of the arbitral
proceedings when:

(a) the claimant withdraws his claim, unless the respondent objects thereto and the
arbitral tribunal recognises a legitimate interest on his part in obtaining a final
settlement of the dispute;

(b) the parties agree on the termination of the proceedings;

(c) the arbitral tribunal finds that the continuation of the proceedings has for any
other reason become unnecessary or impossible.

(3) The mandate of the arbitral tribunal terminates with the termination of the arbitral
proceedings, subject to the provisions of Arts 33 and 34(4).

Commentary
Subject to any power to correct the award or make an additional award (s.57) under A4-052
English law, an arbitral tribunal ceases to hold office once the final award is published to the
parties, (see paras 6-193 et seq.). There is no express provision in the Arbitration Act 1996
for the arbitration proceedings to terminate in that event. Indeed, the court may remit an
award, including a final award for the reconsideration of the tribunal (s.68(3) and 69(7) or
direct the tribunal to give sufficient reasons for the award (s.70(4), see para.8—060).
The parties and the arbitral tribunal can always agree on the termination of arbitration A4-053
proceedings, but otherwise the tribunal has no power under English law to terminate an
arbitration even if the proceedings become unnecessary or impossible. A tribunal is however
empowered to make an award dismissing a claim if it appears that certain conditions are
satisfied (e.g. those specified in s.41(3): see paras 5—240 et seq.).

Article 33. Correction and interpretation

(1) Within 30 days of receipt of the award, unless another period of time has been
agreed upon by the parties:

(a) a party, with notice to the other party, may request the arbitral tribunal to
correct in the award any errors in computation, any clerical or typographical
errors or any errors of similar nature;
 760 Appendix 4

(b) if so agreed by the parties, a party, with notice to the other party, may request
the arbitral tribunal to give an interpretation of a specific point or part of the
award

If the arbitral tribunal considers the request to be justified, it shall make the
correction or give the interpretation within 30 days of receipt of the request. The
interpretation shall form part of the award.

(2) The arbitral tribunal may correct any error of the type referred to in para.(1)(a) of
this article on its own initiative within 30 days of receipt of the award.

(3) Unless otherwise agreed by the parties, with notice to the other party, may request,
within 30 days of receipt of the award, the arbitral tribunal to make an additional
award as to claims presented in the arbitral proceedings but omitted from the
award. If the arbitral tribunal considers the request to be justified, it shall make the
additional award within 60 days.

(4) The arbitral tribunal may extend, if necessary, the period of time within which it
shall make a correction, interpretation or an additional award under paras (1) or (3)
of this article.

(5) The provisions of article 31 shall apply to a correction or interpretation of the award
or to an additional award.

Commentary
A4-054 The Arbitration Act 1996, s.57 empowers an arbitral tribunal, in the absence of a
contrary agreement by the parties , to correct an award so as to remove “any clerical mistake
or error” arising from accidental slip or omission or to clarify or remove any ambiguity in
the award. This power may be exercised on the initiative of the tribunal or in response to
a request from one of the parties. There is a time limit of 28 days.
A4055 Section 57 also empowers the tribunal to make an additional award. Parties can also resort
to the court for an order to remit certain matters referred for the reconsideration of an
arbitral tribunal, which the court is empowered to do in certain cases (s.68(3)(a) and
69(7)(d): see paras 6-193 ef seq.).

CuHapter VII. REcoursE AGAINST AWARD

Article 34. Application for setting aside as exclusive recourse

against arbitral award
(1) Recourse to a court against an arbitral award may be made only by an application
for setting aside in accordance with paras (2) and (3) of this article.

(2) An arbitral award may be set aside by the court specified in Art.6 only if:

(a) the party making the application furnishes proof that:

(i) a party to the arbitration agreement referred to in Art.7 was under some
incapacity; or the said agreement is not valid under the law to which the
parties have subjected it or, failing any indication thereon, under the law
of this State; or
 Appendix 4 761

(ii) the party making the application was not given proper notice of the
appointment of an arbitrator or of the arbitral proceedings or was other-
wise unable to present his case; or

(ii) the award deals with a dispute not contemplated by or not failing within
the terms of the submission to arbitration, or contains decisions on
matters beyond the scope of the submission to arbitration, provided that,
if the decisions on matters submitted to arbitration can be separated from
those not so submitted, only that part of the award which contains
decisions on matters not submitted to arbitration may be set aside; or

(iv) the composition of the arbitral tribunal or the arbitral procedure was not
in accordance with the agreement of the parties, unless such agreement
was in conflict with a provision of this Law from which the parties cannot
derogate, or, failing such agreement, was not in accordance with this Law;
or

(b) the court finds that:

(i) the subject-matter of the dispute is not capable of settlement by arbitration

under the law of this State; or

(ii) the award is in conflict with the public policy of this State.

(3) An application for setting aside may not be made after 3 months have elapsed from
the date on which the party making that application had received the award or, if
a request has been made under Art.33, from the date on which that request had
been disposed of by the arbitral tribunal.

(4) The court, when asked to set aside an award, may, where appropriate and so
requested by a party, suspend the setting aside proceedings for a period of time
determined by it in order to give the arbitral tribunal an opportunity to resume the
arbitral proceedings or to take such other action as in the arbitral tribunal’s opinion
will eliminate the grounds for setting aside.

Commentary
There are several means of recourse against an award under English law. First, there is A4056
the kind of recourse mentioned in Art.34(1) and (2) above where the Court can set aside an
award on an application of one of the parties where there has been a “serious irregularity
affecting the tribunal the proceedings or the award” (s.68). The words quoted from those
sections are wide enough to embrace the grounds specified in Art.34(2), which derive from
the New York Convention. There is a time limit of 28 days for such an application, (s.70(3):
see paras 8-035 er seq.).
Second, quite apart from its power to set aside an award, the court can in appropriate A4-057
cases remit “the award to the tribunal, in whole or in part, for reconsideration... ”
(ss.68(3)(a) and 69(7)(c) but not under s.67). There is an important distinction between the
court’s wide powers of remission under English law and the court’s limited power to
suspend setting aside proceedings under Art.34(4) of the Model Law while the tribunal
consider a correction under Art.33, (see paras 8-075 et seq.).
Third, and there is no equivalent in the Model Law, a party may, as an alternative to A4-058
seeking recourse under s.67 or 68 of the Act, apply to the court for leave to appeal against
an award on a question of law provided that there is no valid exclusion agreement (s.69). If
leave is obtained the court may review the award, although leave will only be given in
limited circumstances: (s.69, see paras 8-054 et seq.).
 762 Appendix 4

CuHaprter VIII. RECOGNITION AND ENFORCEMENT OF AWARDS

Article 35. Recognition and enforcement

(1) An arbitral award, irrespective of the country in which it was made, shall be
recognised as binding and, upon application in writing to the competent court, shall
be enforced subject to the provisions of this article and of Art.36.
(2) The party relying on an award or applying for its enforcement shall supply the
original award or a copy thereof. If the award is not made in an official language of
this State, the court may request the party to supply a translation thereof into such
language =a
*** The conditions set forth in this paragraph are intended to set maximum standards. It
would, thus, not be contrary to the harmonisation to be achieved by the model law if a State
retained even less onerous conditions.

Commentary
A4-059 This article and the following Art.36 closely follow Arts III, IV and V of the New York
Convention to which the United Kingdom acceded. The Arbitration Act, 1996, which
implements the New York Convention provides for the recognition and enforcement of
New York Convention awards (s.101) and specifies the evidence required (s.102). A New
York Convention award is defined in the Act as ‘‘an award made, in pursuance of an
arbitration agreement, in the territory of a State (other than the United Kingdom), which
is a party to the New York Convention” (s.100(1) and see para.6—035).
A4-060 In view of the number of foreign States which have been recognised by the United
Kingdom as a party to the New York Convention, the provision for enforcement under the
1996 Act of awards made abroad is very wide, but it is not unlimited (contrast Art.35
above). Enforcement may also be achieved by suing on the award. There is however a
summary procedure which is available for the enforcement of New York Convention awards
and other awards, including domestic awards (s.66) that can be invoked by originating
summons, although the grounds for opposition vary according to the nature of the award
(see the comment on the next article and Ch.8).

Article 36. Grounds for refusing recognition or enforcement

(1) Recognition or enforcement of an arbitral award, irrespective of the country in
which it was made, may be refused only:

(a) at the request of the party against whom it is invoked, if that party furnishes to
the competent court where recognition or enforcement is sought proof that:

(i) a party to the arbitration agreement referred to in Art.7 was under some
incapacity; or the said agreement is not valid under the law to which the
parties have subjected it or, failing any indication thereon, under the law
of the country where the award was made; or

't Article 35(2) was amended in 2006 to make the requirements for a party wishing to rely on, or
enforce, an award less stringent. Article 35(2) previously read as follows:
“The party relying on an award or applying for its enforcement shall supply the duly authenti-
cated original award or a duly certified copy thereof., and the original arbitration agreement
referred to in article 7 or a duly certified copy thereof. If the award or agreement is not made in
an official language of this State, the court may request the party shallto supply a duly certified
translation thereof into such language.”
 Appendix 4 763

(11) the party against whom the award is invoked was not given proper notice
of the appointment of an arbitrator or of the arbitral proceedings or was
otherwise unable to present his case; or

(ii) the award deals with a dispute not contemplated by or not falling within
the terms of the submission to arbitration, or it contains decisions on
matters beyond the scope of the submission to arbitration, provided that,
if the decisions on matters submitted to arbitration can be separated from
those not so submitted, that part of the award which contains decisions on
matters submitted to arbitration may be recognised and enforced: or

(iv) the composition of the arbitral tribunal or the arbitral procedure was not
in accordance with the agreement of the parties or, failing such agreement,
was not in accordance with the law of the country where the arbitration
took place; or

(v) the award has not yet become binding on the parties or has been set aside
or suspended by a court of the country in which, under the law of which,
that award was made; or

(b) if the court finds that:

(1) the subject-matter of the dispute is not capable of settlement by arbitration

under the law of this State; or

(ii) the recognition or enforcement of the award would be contrary to the

public policy of this State.

(2) If an application for setting aside or suspension of an award has been made to a
court referred to in para.(1)(a)(v) of this Article, the court where recognition or
enforcement is sought may, if it considers it proper, adjourn its decision and may
also, on the application of the party claiming recognition or enforcement of the
award, order the other party to provide appropriate security.

Commentary
As mentioned in the previous para.0—61, this article follows closely (but not exactly) A4061
Article V of the New York Conyention. Enforcement of aNew York Convention award (as
defined) may only be refused by an English court if the person against whom it is invoked
proves at least one of the grounds listed in s.103 of the Arbitration Act 1996 which are
almost identical to the grounds specified in Art.36(1)(a) above. The defences of public
policy and non-arbitrability are treated in s.103(3) of the Arbitration Act 1996 and
correspond broadly, but not exactly, for New York Convention awards to Art.36(1)(b) above.
Under English law other grounds of opposition are available to the enforcement of an award
made abroad, which is not a New York Convention award, as they are to an award made in
England (see paras 8-028 et seq.).
A provision for adjournment of enforcement proceedings similar to that specified in A+062
Art.36 (2) above (i.e. in the event of recourse against the award in the State where it was
made) is contained in s.103(5) of the Arbitration Act 1996, but is limited to New York
Convention awards (see para.8—020).
 APPENDIX 5

List OF APPOINTING AUTHORITIES

This Appendix 5 contains a list of the major institutions acting as appointing authorities in
A5—001
arbitrations. It does not purport to be exhaustive and for ease of reference is divided
between the major international institutions and domestic/specialist bodies.

International
The Arbitration Institute of the Stockholm Chamber of Commerce (SCC Institute)
P.O. Box 16050
SE-103 21 Stockholm
Sweden

Tel: 00 46 8 555 100 50

Fax: 00 46 8 566 316 50

E-mail: arbitration@chamber.se
Website: http: //wwm.sccinstitute.com/uk/Home/

The China International Economic and Trade Arbitration Commission (CIETAC)

6/F Liang Ma Qiao Road
Chaoyang District,
Beying 100016
P.R. China

Tel: 00 86 10 64646688
Fax: 00 86 10 64643500/64643520

Email: info@cietac.org
Web Site: wmm.cietac.org

The Hong Kong International Arbitration Centre (HKIAC)

38th Floor Two Exchange Square
8 Connaught Place
Hong Kong S.A.R.
China

Telephone: 00 852 2525 2381

Fax: 00 852 2524 2171

Email: adr@hkiac.org
Web Site: http://www. hkiac.org/HKIAC/HKIAC_English/main. html
 Appendix 5 765

The International Centre for Dispute Resolution (ICDR) of the American Arbitration
Association
ICDR International Case Management Center
1633 Broadway, 10th Floor
New York 10019-6708
United States
Tel: 001 212 484 4115
Fax: 001 212-246 7274

Web Site: http: //www.adr.org/about_icdr

Email: Ventrone T@adr.org

The International Court of Arbitration of the International Chamber of Commerce

38, Cours Albert ler
75008 Paris
France

MctAOORS T9538 29005

Barca 0ORS3 149853029833
Web Site: mmm. iccwho.org

International Centre for Settlement of Investment Disputes (ICSID)

1818 H Street NW
Washington DC 20433
USA
Tel: 001 202 458 1534
Fax: 001 202 522 2615
Web Site: http: //wwm.worldbank.org/icsid/index.himl

London Court of International Arbitration (LCIA)

70 Fleet Street
London EC4Y 1EU

Tel: 020 79367007

Fax: 020 79367008
E-mail: casework@lcia.org/Icia@lcia.org

Web Site: mmm. lcia-arbitration.com

The Singapore International Arbitration Centre (SIAC)

City Hall
3 St Andrew’s Road
Singapore 178958

Tel: 00 65 6334 1277

Fax: 00 65 6334 2942
Web Site: Attp: //mwm.siac.org.sg
766 Appendix 5

National/Specialist
The Academy of Experts
3 Gray’s Inn Square
London WCIR 5AH

Tel: 020 7430 0666

Fax: 020 7637 1893
DX 283 London Chancery Lane

E-mail: admin@academy-experts.org
Web Site: mmm.academy-experts.org

The Centre for Dispute Resolution (CEDR)

International Dispute Resolution Centre
70 Fleet Street
London EC4Y 1EU

Tel: 020 7536 6000

Fax: 020 7536 6001

Web Site: mwm.cedr.co.uk

The Chartered Institute of Arbitrators

24 City Road
Angelgate
London ECIZ 2PT

Tel: 020 7520 3800

Fax: 020 7520 3828

Web Site: wwm.arbitrators.org

The Chartered Institute of Management Accountants

26 Chapter Street
London SW1P 4NP

Tel: 020 7663 5441

Fax: 020 7663 5442

Web Site: mwm.cimaglobal.com

The Chartered Institute of Patent Attorneys

3rd Floor
95 Chancery LaneLondon WC2A 1DT

Tel: 020 7405 9450

Fax: 020 7430 0471

E-mail: mail@cipa.org.uk
Web Site: mmm.cipa.org.uk/
 Appendix 5 767

The City Disputes Panel

24 Angelgate
City Road
London EC1V 2PT

Tel: 020 7520 3800

Fax: 020 7520 3829

E-mail: info@citydisputespanel.org
Web Site: wmm.citydisputespanel.org

Coffee Trade Federation

Blackfriars Foundry
156 Blackfriars RoadLondon SE] 8EN

Tel: 020 7328 5222

Fax: 020 7328 5444

E-mail: secretariat@coffeetradefederation.org.uk
Web Site: mwm.coffeetradefederation.org.uk

The Electricity Arbitration Association

5 Meadow Road
Great Gransden
Sandy
Beds

Tel: 01767 677043

Fax: 01767 677043

Federation of Cocoa Commerce Ltd

Cannon Bridge House
1 Cousin Lane
London EC4R 3XX

Tel: 020 7379 2884

Bax:.020.7379) 2389

E-mail: fec@liffe.com
Web Site: mmm.cocoafederation.com

Federation of Oil Seeds and Fats Association Ltd (Fosfa)

20 St Dunstans Hill
London EC3R 8NQ.

Tel: 020 7283 5511

Fax: 020 7623 1310

E-mail: contact@fosfa.org
Web Site: wwm fosfa.org
768 Appendix 5

The Grain and Feed Trade Association (Gafta)

Gafta House
6 Chapel Place
Rivington Street
London EC2A 3SH

Tel: 020 7814 9666

Fax: 020 7814 8383
E-mail: arbitration@gafta.com
Web Site: mwm.gafia.com

The General Council of the Bar of England and Wales

3 Bedford Row
London WCIR 4DB

Tel: 020 7242 0082

Fax: 020 7831 9217
Web Site: hitp://wwm.barcouncil.org.uk/

The Institute of Actuaries

Staple Inn Hall
High Holborn
London WC1V 7QJ

Tel: 020 7632 2100

Fax: 020 7632 2111

E-mail: institute@actuaries.org.uk
Web Site: mwm.actuaries.org.uk

The Institute of Chartered Accountants in England and Wales

PO Box 433
Chartered Accountants Hall
Moorgate Place
London EC2P 2BJ

Tel: 020 7920 8100

Fax: 020 7920 0547

Web Site: http: //mwm.icaem.co.uk/

Institute of Civil Engineers

1-7 Great George Street
London SWI 3AA

DWAR
Fax: 020 7222 7500
E-mail: contractsanddisputes@ice.org.uk
Web Site: mmm.ice.org.uk
 Appendix 5 769

The Institution of Chemical Engineers

Davis Building
165-189 Railway Terrace
Rugby
CV21 3HQ

Tel: 01788 578214

Fax: 01788 560833

E-mail: www.icheme.org
Web Site: mwm.icheme.org

Institution of Mechanical Engineers

1 Birdcage Walk
London SWI1H 9JJ

Tel: 020 7222 7899

Fax: 020 7222 4557

E-mail: s_rogers@imeche.org
Web Site: mwmimeche.org/industries/consult

The Energy Institute

61 New Cavendish Street
London W1G 7AR

Tel: 020 7467 7100

Fax: 020 7255 1472

E-mail: info@energyinst.org.uk
Web Site: mmm.energyinst.org.uk

Institution of Structural Engineers

11 Upper Belgrave Street
London SW1X 8BH

Tel: 020 7235 4535

Fax: 020 7235 4294

Web Site: wwm.istructe.org

The Law Society of England and Wales

113 Chancery Lane
London WC2A 1PL

Tel: 020 7242 1222

Fax: 020 7831 0344

Web Site: ww. lamsociety.org.uk

770 Appendix 5

London Common Law and

Commercial Bar Association
3 Verulam Buildings
Grays Inn
London WCIR 5NT

Tel: 020 7831 8441

Fax: 020 78318479

Web Site: mmm.Iclcba.com

London Maritime Arbitrators Association

124 Aldersgate Street
London ECIA 4JQ.

Tel: 020 74907334

Fax: 020 74904383

E-mail: Imaa@btinternet.com
Web Site: mmm./maa.org.uk

London Metal Exchange Ltd

56 Leadenhall Street
London EC3A 2DX

Tel: 020 7264 5555

Fax: 020 7680 0505

Web Site: mmm.lme.com

The Refined Sugar Association/The Sugar Association of London

Forum House
Lime Street
London EC3M 7AQ

Tel: 020 7626 1745

Fax: 020 7283 3831

E-mail: durhamn@sugar-assoc.co.uk
Web Site: mmm.sugarassociation.co.uk

Royal Institute of British Architects

66 Portland Place
London W1B IAD

Tel: 020 7580 5533

Fax: 020 7255 1541

E-mail: info@inst.riba.org
Web Site: wwm.riba.org
 Appendix 5 Tal

The Royal Institution of Chartered

Surveyors
Surveyor Court
Westwood Way
Coventry
CV4 8JE
Tel: 020 7222 7000
Fax: 020 7334 3802
Web Site: mmm.rics.org
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 INDEX

Abandonment Agreed time limits

termination of reference, 5—229—5—230 discretion, exercise of, 7-091
Absence of one party exclusion of court powers, 7-090
hearings power to extend, 7-089
conduct with party absent, Agreement
5—204—_5-206 see also Arbitration agreements
generally, 5-202 Alternative dispute resolution
Accidental slip arbitration agreement clauses, 2—035
meaning, 6-168 Ambiguity of award
Additional awards effect on reference, 6-170
effect on reference, 6-171—6—-175 Ancillary powers
generally, 6-036 arbitrators, 7-107
Adjudication Anti-suit injunctions
arbitration agreement clauses, availability generally, 7-015
2-032—2-034 availability in EU, 7-012
presumption of one-stop, 2-070 current position, 7-013
Administrative issues generally, 7-011
during reference, 5-171 jurisdictional basis, 7-018
fixing date of hearing, 5—174 recognition by foreign courts, 7-017
multiparty arbitrations, 5-181 tests to be applied, 7-014
other arrangements, 5—180 third party statutory rights, 7-016
pre-trial hearing, 5-177 Anti-trust
proper planning, 5-176 matters able to be arbitrated, 1-036
responsibility for, 5-172 Appeals
room hire charges, 5—179 appointment of arbitrators, 7-109
secretary to tribunal, 5-173 awards, 6-066
tribunal obligation to be available, 5—175 jurisdiction, 7-163
venue for hearing, 5-178 orders of court, 7-201
Administrators recoverable costs, 7—215
parties to arbitration, 3-026 removal of arbitrator, 7-142
Advance payments serious irregularity
arbitral tribunal, 4-060 approach of court, 8—i15
Adversarial procedure excess of jurisdiction, 8-116
conduct of reference, 5—098 orders on preliminary points, 8-117
Advisory Committee of the residual injunction regarding
Department of Industry unfairness, 8-118
reports statutory time limits, 7-094
developments in arbitration law, stay of proceedings, 7-053
1-053 substantive jurisdiction, 8-071
Agents Appeals on questions of law
generally, 3-023 agreement to appeal, 8-131
no claim by, 3-024 alternative outcomes, possibility of,
Agreed awards 8-134
form, 6-026 appeals
power to make, 6-024 approach of court, 8-155
reasons for seeking, 6-027 excess of jurisdiction, 8-157
status, 6-026 meaning of “the court”, 8-156
tribunal obligations, 6-025 preliminary points, orders on, 8-158
774 Index

residual jurisdiction re unfairness, procedural law, matters covered by,

8-159 2-106
terms, 8—161 procedural rules distinguished, 2—108
worthy of consideration, 8-160 substance of dispute
application to court absence of agreement, 2-092
content, 8-147 effect of seat on choice of proper law,
extraneous evidence, 8—148 2-093
multiple applications, 8-150 other considerations, 2—091
permission to appeal, 8-149 statutory provision, 2-090
procedural issues, 8-151 Applications to court
reasons, 8—152 appeals on questions of law
scope of discretion, 8-154 content, 8—147
variety of orders, 8-153 extraneous evidence, 8—148
arising out of award, 8-129 multiple applications, 8—150
construction of instrument, 8-127 permission to appeal, 8-149
exclusion agreement, 8-121 procedural issues, 8-151
exhaustion of other rights, 8-121 reasons, 8-152
fact and law distinction, 8-126 scope of discretion, 8-154
introduction, 8—119—8-120 variety of orders, 8-153
just and proper in all circumstances, Appointments
8—-145— 8-146 arbitral tribunal members
permission to appeal, 8-132 by appointing authority, +026, 4-049
public importance, issues of, by court, 4-027, +-050
8—141— 8-144 by parties, 1-017, 4-024,
qualifying errors of law, 8-128 4-028—4_034
questions of fact, 8-125 challenges to, 4-051
questions of law, 8-124 generally, 1-017
reasons from tribunal, 8—130 sole arbitrator, 4-035
submitted to tribunal, 8-136 statutory procedure, +-025
substantial sums involved, 8-135 third arbitrator, 4+-044—4—048
substantially affecting rights of parties, two arbitrators, +-036—4—043
8-133 arbitrators
time limits, 8-123 agreement on procedure, lack of,
wrong decisions, 8-137—8-140 7-097
Applicable laws ancillary powers, 7-107
arbitration agreement appeals, 7-109
choice of law rules, 2-094 court appointment, 7-105
distinguishing law of and procedural court discretion, exercise of, 7-096
law, 2-098 default by appointing authority,
effect of seat of law of, 2-096 7-102
law of, 2-095 delay, 7-106
matters covered by law of, 2-097 failure to appoint, 7-098—7—100
reference, law of, 2-099 filling vacancies, 7-103
different laws applicable, 2-088 introduction, 7-095
generally, 2-087 powers of court appointed, 7-108
interplay of different laws, 2-089 practice, 7-104
seat of arbitration umpire
ascertaining, 2-102 ancillary powers, 7-107
Brussels Regulation, and, 2-105 failure to appoint, 7-101
choice of, 2—101 powers of court appointed, 7-108
floating seat, 2-104 Arbitrability
hearings in different locations, 2-107 generally, 1-034
Lugano Convention, and, 2-105 Arbitral institutions
meaning, 2—100 generally, 3-051
place of enforcement, 2—109 immunity, 3-053
procedural law, and, 2-103 role of, 3-052
 Index 775

Arbitral Tribunal securing claims, costs and evidence,

see also Appointments; Arbitrators 4—083—4-087
decision-maker, 1-016 statute, 4-068
determination of costs remuneration
independent judgment, 6-151 advance payments, 4-060
recoverable costs, 6-150 cancellation fees, 4062
tribunal’s fees and expenses, 6-152 costs awards, 4-065
duties of fixing fee levels, 4+-056—4—059
adoption of suitable procedures, interim payments, 4-061
4-130 lien, +-063—4—064
avoidance of unnecessary expense or right to, 4-052—4—055
delay, 4-131 Arbitration
conduct of proceedings, advantages
4-132—_4-134 choice of tribunal members, 1-023
confidentiality, 4-138 choice, 1-022
equity clauses, 4-142—4—-143
enforceability of awards, 1-026
facilitation of settlements, 4-144
flexibility, 1-024
fairness and impartiality,
privacy, 1-023
4-106—4-127
summary, 1-027
general duty, 4-104
disadvantages
independence, 4-128—4—129
delay, 1-029
not to exceed jurisdiction, 4-135
expense, 1-029
not to exceed powers, 4-136
generally, 1-028
party-appointed arbitrators,
no consolidation, 1-031
4-145—4-148
no joinder, 1-031
qualifications, 4-137
no summary procedures, 1-030
specific duties, 4-105
no third party procedures, 1—030
third arbitrators, 4-149
quality of decision-making, 1-032
to act judicially, 4-139
features
to decide according to law, 4-141
arbitration agreements, 1—009
to make one’s own decision, +-140
umpire, 4-150—4-151 confidentiality, 1-010
expertise, 1-018 determination, 1—011
form of domestic disputes, 1-014
arbitrator/advocate, 4-008 expert determination, 1-012
chairman, +011 finality, 1-015
generally, 4-005 general principles, 1-006
larger tribunal members, 4-012 international disputes, 1-014
party-appointed arbitrators, 4-010 meaning, 1-008
president, 4011 privacy, 1-010
sole arbitrators, 4—006 public interest, 1-007
third arbitrators, 4-011 variety of procedures, 1-013
two members, 4-007 jurisdiction
umpire, 4-009 anti-trust, 1-036
introduction, 4-001 arbitrability, 1-034
powers crime, 1—035
arbitration agreement, 4-067 fair hearing, 1-039
arbitration rules, 4-067 generally, 1-033
awards and orders, 4-092—4-101 human rights, 1-038
costs, 4-102—4—103 investment disputes, 1-041
default, 4+-088—4—091 limits of, 1-037
evidential powers, and, 4-072—4—081 public policy, 1-040
experts, 4-082 summary of book, 1-055—1-063
generally, 4-069 Arbitration agreements
introduction, +066 applicable laws
jurisdiction, and, 4-070—4—071 choice of law rules, 2-094
776 Index

distinguishing law of and procedural construction, 2-046

law, 2-098 leases, 2-052
effect of seat of law of, 2-096 Model Law, contract with, 2-050
law of, 2-095 reference to other documents, 2—044
matters covered by law of, 2-097 reference to standard form terms,
reference, law of, 2-099 2-048
clause types reinsurance contracts, 2-055
adjudication, 2-032—2-034 specific references, requirement for,
alternative dispute resolution, 2-035 2-049
dispute resolution clauses, 2-024 statutory guidance, 2-045
expert determination, 2-028—2-031 interpretation of specific wordings
hybrid clauses, 2-037 “all” or “any”, 2-077
jurisdiction clauses, 2-025—2-027 “arising out of” or “arising under”’,
multi-tier clauses, 2-036 2-078
conditions precedent broad interpretation, 2—075
generally, 2-021 “concerning alleged breaches of the
no effect if stay granted, 2-023 contract”, 2-080
Scott v Avery clauses, 2-022 current position, 2-074
content of “Gn connection with”, 2-079
appointing authority, 2-062 “in relation to”, 2-079
certainty, 2-065 “regarding”, 2-079
checklist, 2-059 standard wordings, 2-076
clarity, 2-065 wide terms, preference for, 2-082
court approach, 2-068 “with respect to the construction
exclusion agreements, 2-063 of’, 2-081
institutional rules, application of,
introduction, 2-001
2-061
mutuality
level of detail, 2-058
not required, 2-017
multiple agreements, 2-066
unilateral option to litigate, 2-018
one-stop adjudication, presumption
outside scope of 1996 Act
of, 2-070
implied agreements, 2-016
option to arbitrate, 2-067
oral agreements, 2—015
presumption in favour of arbitration,
powers of arbitral tribunal, +067
lack of, 2-069
scope of
standard form clauses, 2-064
statutory regime, amendment of, matters within, 2-072
2-060 submitting disputes to arbitration,
dispute types 2-071
building disputes, 2-085—2-086 timing of issues concerning, 2-073
consumer contracts, 2—084 separability
engineering disputes, 2-085—2—086 consequences of, 2-009
fraud, 2-083 doctrine of, 2—007
form of illegality affecting contract, 2-013
incorporation by reference, invalidity of arbitration agreement,
2-044—2-057 2-012
written agreements, 2—038—2-043 matrix contract, application of terms
generally, 1-009 of, 2-014
incorporation by reference matrix contract, invalidity of, 2-010
applicability of arbitration agreement, statutory provision for, 2-008
2-057 void contracts, 2-011
Articles of Association, 2—051 statutory definition
assignments of real property, 2—052 ‘tad hoc”, 2-006
bills of lading, 2-056 Arbitration Act 1996, 2-002
case law, 2-047 domestic agreements, 2—005
charterparties, 2-056 non-contractual claims, 2—004
construction contracts, 2—053—2—054 present and future disputes, 2-003
 Index 777

termination of quasi-arbitrators, 4-004

abandonment of arbitration valuers, 4-003
agreement, 2—114 qualifications
by agreement, 2-110 generally, 4-013
repudiation of right to arbitrate, unsuitable appointees, 4-014
2—111—2-113 personal nature, 4-015
variations specific number of tribunal members,
disputes where contract varied, 2-019 4-016
effect of, 2-020 special qualifications, 4+-017—4—018
written agreements judges, 4-019—4022
evidenced in writing, 2-040 termination of authority
formality, 2-042 by agreement of parties, 4-166
incorporation, 2—042 by= appointing authority, 4-168
methods constituting writing, 2-039 by court order, 4-169
reference to, 2-041 by death ofarbitrator, 4-160
requirement of writing, 2-038
by death of party appointing, 4-161
signatures, 2-043 by discharge of duty, 4-163
Arbitration costs
by insolvency, 4-162
meaning, 6-130
by resigning, 4-164
Arbitration law
by settlement, 4-167
Arbitration Act 1996
generally, 4-159
content, 1-002
umpire’s entry into reference, 4-165
developments in law, 1-043
Articles of association
key features arising out of, 1-005
incorporation by reference, 2-051
mandatory provisions, 1-004
Ascertaining procedure for reference
scope, 1-003
adversarial procedure, 5—098
developments in
arbitrator’s decision, 5—094
Arbitration Act 1950, 1-044
document only arbitrations, 5—108
Arbitration Act 1975, 1-046
extremes, 5—096
Arbitration Act 1979, 1-048
freedom of parties, 5-089
Arbitration Act 1996, 1-043
inquisitorial procedure, 5—099
case law, 1—050—1—052
institutional arbitration, 5—102—5-103
Commercial Court Committee, 1-047
institutional rules, 5—091
DAC reports, 1-053
international arbitration, 5-101
New York Convention, 1—045
limiting scope for agreement, 5—092
party autonomy, 1—054
UNCITRAL Model Law, 1-049 “look-sniff” arbitrations, 5—110
modern law, 1-001 nature of dispute, 5—100
powers of arbitral tribunal, 4-067
options available to parties, 5-090
sources, 1—042 procedural rules, 5—105
Arbitrators range of procedures, 5—095
see also Appointments; Arbitral rules where no institution, 5-104
tribunal; Death; Removal; speedy arbitration, 5—107
Resignation tailored procedure, 5—097
impartiality, 4-023 terms of reference, 5-106
liability of version of rules, 5—093
bad faith, 4-154 vigilance, need for, 5—109
immunity, 4-152 Assignments
misbehaviour, 4-157 real property
professional negligence, 4-155 incorporation by reference, 2—052
resigning, 4-158 rights under agreement
serious irregularity, 4-156 assignees’ rights, 3-018
statutory immunity, 4-153 equitable assignees, 3-020
meaning legal assignees, 3-019
experts, 4-003 Autonomy of parties
generally, 4-002 developments in arbitration law, 1-054
778 Index

Award costs formal requirements

meaning, 6—132 date, 6-053
Awards delegation of drafting, 6-056
additional awards, 6—036 form of award, 6—044—6-045
agreed awards patol awards, 6-048
form, 6-026 place of signing, 6-050
power to make, 6-024 reasons, 6-051
reasons for seeking, 6-027 recitals, 6—054—6-055
status, 6-026 signatures, 6-049
tribunal obligations, 6-025 specification of seat, 6-052
challenges to time limits, 6-046
see Challenges of awards writing, 6-047
convention awards introduction, 6—001
enforcement, 6-040 jurisdiction, 6-013
ICSID Convention, 6-038 majority awards, 6-035
meaning, 6-039 meaning, 6—002—6—003
New York Convention, 6-037 multiple arbitrators
effect of award chairmen, 6—057
date effective from, 6-164 dissenting opinions, 6-058
obligation to perform, 6-163 majority awards, 6-057
transfer of property, 6-165 stranger’s award, 6-060
under statute of award, 6-162 umpire’s award, 6-059
effect on other proceedings multiple awards
award as evidence of law and facts appropriateness of, 6-011
found, 6-181 conditions, 6-015
name-borrowing arbitrations, 6-182 dangers of, 6-014
rights im rem, 6-180 deductions, 6—016—6—-017
unsatisfied awards, 6-179 effect of, 6-018
valid awards, 6—176—6-178 examples, 6—012
effect on reference issue estoppel, 6-019
accidental slip, meaning of, 6-168 power to make, 6—009
additional awards, 6-171—6—175 scope and content, 6-010
ambiguity in award, 6-170 set-off, 6-016—6—017
correction of clerical mistakes, 6-167 powers of arbitral tribunal,
slip rule, use of, 6-169 40924101
tribunal functus officio, 6-166 provisional awards
effect on third parties appropriateness, 6—022
disclosure of award, 6-185 final award, subject to, 6-023
exceptions, 6-184 power to make, 6—020
non-binding nature, 6-183 types of, 6-021
extensions of time reasoned awards
applicants, 7-085 form, 6-032
consequences of order, 7-087 matters in dispute, specification of,
discretion, 7-086 6-030
exclusion of court powers, 7—082 meaning, 6-028
exhaustion of other means, 7-083 reasons not part of award, 6-033
judge-arbitrator, 7-088 reasons orders by court, 6-031
power to extend, 7-081 requirement for reasons, 6—029
substantial injustice, 7-084 use of reasons, 6—034
final awards remedies
binding nature, 6—008 see Remedies
complete decision, 6—007 substantive requirements
exceptions, 6-006 certainty, 6—089—6-095
functus officio, 6-005 completeness of decision,
meaning, 6-004 6—078—6—088
foreign awards, 6—041 decision by tribunal, 6-073—6—-077
 Index 779

valid awards, 6-072 Challenging awards

taking up of award appeals on questions of law
appeals, 6—066 agreement to appeal, 8-131
delivery of award, 6-067 alternative outcomes, possibility of,
importance of, 6-070 8-134
making of award, 6-065 appeals, 8-155—8-161
notification of award, 6-064 application to court, 8-147—8-154
payment into court of fees and arising out of award, 8-129
expenses, 6-071 construction of instrument, 8-127
publication of award, 6-065 exclusion agreement, 8—121
“ready to be delivered”, 6—068 exhaustion of other rights, 8-121
retention of award pending payment fact and law distinction, 8-126
of fees, 6-069 introduction, 8—119—8-120
time limits for making just and proper in all circumstances,
contractual time limits, 6-063 8—145—8-146
prompt production of award, 6-062 permission to appeal, 8-132
statutory time limits, 6-061 public importance, issues of,
Bad faith 8—141— 8-144
liability of arbitrators, 4-154 qualifying errors of law, 8-128
Bankrupts questions of fact, 8-125
disadvantages for, 3-007 questions of law, 8-124
reasons from tribunal, 8-130
existing preceedings, 3-029
submitted to tribunal, 8-136
submission to arbitration, 3-027
substantial sums involved, 8—135
trustee in bankruptcy, 3-028
substantially affecting rights of
Bias
parties, 8-133
challenging awards, 8—088
time limits, 8—123
removal of arbitrator, 7-124
wrong decisions, 8—-137—8-140
Bills of lading
awards under investment treaties, 8—052
incorporation by reference, 2-056
breach of agreed procedures, 8-092
Breach of agreed procedures by persons taking no part in
challenging awards, 8-092 proceedings, 8-053
Breach of agreement to arbitrate excess of powers
actions for damages, 7-021 by arbitral institution, 8-091
costs on indemnity basis, 7-022 by tribunal, 8-090
damages, 7-019 overall approach, 8-089
domestic and non-domestic agreements, failure to deal with all issues
7-023 approach of court, 8-093
overlap between remedies, 7-020 essential issues, 8-094
Brussels Convention reasons separate from award, 8—096
see Recognition and enforcement of reserving issues for future award,
foreign awards 8-097
Building disputes unclear reasoning, 8-095
arbitration agreements, 2-085—2-086 fairness
Cancellation adoption of court procedures, 8-084
remedies available, 6—114 bias, 8-088
Cancellation fees emergence of new evidence, 8-087
arbitral tribunal, 4-062 errors of fact, 8-085
Case law failure to consider evidence, 8—082
developments in, 1-050—1—052 failure to manage process, 8-086
Certainty “in play issues”, 8—080
arbitration agreements, 2-065 new points, 8-081
awards, 6—089—6-095 permissible errors, 8-078
Chairman procedural decisions, 8-083
form of tribunal, 4-011 proceedings not validly commenced,
multiple arbitrators, awards of, 6-057 8-079
780 Index

fraud continuation of arbitral proceedings

approach of court, 8-099 pending application, 8-066
evidence after publication of award, exhaustion of other rights, 8-064
8-100 further role of tribunal, 8-068
illegality, 8-101 generally, 8-054
public policy, 8-101 insufficient reasons, 8—070
trial of issues by court, 8-102 limited jurisdiction, 8-056
general public importance, issues of loss of right to object, 8-065
faulty reasoning, 8-144 party to proceedings, 8-058
generally, 8-141 procedure, 8-067
open to serious doubt, 8-142 raising new points, 8—061
public importance, 8-143 rehearing rather than review, 8—060
introduction, 8—051 scope of application, 8-059
orders scope of arbitration agreement, 8-062
accidental error, 8-169 security, 8-069
admitted error, 8-171 statutory provisions, 8-057
award of no effect, 8-165 timing of application, 8-055, 8-063
combined application, 8—173 validity of arbitration agreement,
effect of court order, 8-176 8062
entitlement to apply, 8-172 variety of orders, 8-067
fresh evidence, 8-167
wrong decisions
further requirements, 8-168
apparent error, 8-138
grounds, 8-166
approach of court, 8-137
introduction, 8—162
error apparent from award, 8-140
limitation, 8-177
prima facie view, 8-139
procedural orders, 8-174
Charterparties
remission of award, 8-163
incorporation by reference, 2-056
role of tribunal, 8-170
Clarity
setting aside, 8-164
arbitration agreements, 2-065
tribunal decision on rescission, 8-175
Clerical errors
serious irregularity
effect on reference, 6—167
admitted irregularity, 8-103
Closing submissions
appeals, 8-115—8-118
arbitration hearing, 5—203
application to court, 8—108—8-114
approach of courts, 8-073 Commencement of arbitration
breach of agreed procedures, 8-092 circumstances, 5—003—5—004
contrary to public policy, extension of time limits
8-099—8-102 circumstances outside reasonable
excess of powers, 8-074 contemplation of parties, 7-069
excess of powers, 8-089—8-091 claims or rights affected, 7-073
failure to deal with all issues, conduct of other party, 7-071
8—093—8-097 delay, 7-076
fairness, 8-077—8—088 discretion, exercise of, 7-078
fraud, 8-099—8-103 exhaustion of other means, 7-075
generally, 8-072 ignorance of agreed time limit, 7-070
types of irregularity, 8-076 limitation, 7—080
uncertainty or ambiguity, 8—098 making application, 7-077
unmeritous challenges, 8-075 power to extend, 7-068
substantial injustice preliminary steps, 7-074
alternative outcome, possibility of, relevant disputes, 7-072
8-106 terms of order, 7-079
burden on applicant, 8-105 method, 5—015—5—031
meaning, 8—104 time limits, 5—005—5-—014
order of issues, 8-107 Conditions precedent
substantive jurisdiction arbitration agreements
appeals, 8-071 generally, 2-021
 Index 781

no effect if stay granted, 2-023 amendments, 5—127

Scott v Avery clauses, 2-022 choice of methods, 5—121
Conduct of reference determination of preliminary issues,
administration 5-129
during reference, 5-171 informal methods, 5—126
fixing date of hearing, 5-174 introduction, 5—120
multiparty arbitrations, 5-181 memorials, 5-125
other arrangements, 5—180 pleadings, 5—122
pre-trial hearing, 5—177 statements of case, 5—123—5—124
proper planning, 5-176 directions
responsibility for, 5-172 agreeing in advance, 5-116
room hire charges, 5-179 checklist, 5—118
secretary to tribunal, 5-173 compliance, 5-113
tribunal obligation to be available, entitlement to give, 5-112
5-175 generally, 5-111
venue for hearing, 5—178
matters where may be required,
application of statutory provisions, 5-117
5—002
preliminary meeting, 5—114—5-115
arbitration agreement terms, 5—119
duties of tribunal
ascertaining procedure
natural justice and fairness,
adversarial procedure, 5—098
5—038—5—054
arbitrator’s decision, 5—094
relationship between duties,
document only arbitrations, 5—108
principles and party autonomy,
extremes, 5—096
5—055—5—056
freedom of parties, 5—089
statutory obligations, 5—032—5—037
inquisitorial procedure, 5—099
enforcement of procedural orders
institutional arbitration,
duty to comply with orders, 5-191
5—102—5-103
orders of tribunal, 5-193
institutional rules, 5—091
peremptory orders, 5—194—5-195
international arbitration, 5-101
tribunal powers in case of default,
limiting scope for agreement, 5—092
5-192
“look-sniff”’ arbitrations, 5—110
evidence
nature of dispute, 5—100
application of rules, 5-130
options available to parties, 5-090
arbitration practice, 5-136
procedural rules, 5—105
directions re property and evidence,
range of procedures, 5—095
rules where no institution, 5—104
5-166
disclosure in arbitrations, 5—133
speedy arbitration, 5-107
tailored procedure, 5—097 disclosure in court proceedings,
terms of reference, 5—106
5-131
disclosure process, failings of, 5-132
version of rules, 5—093
vigilance, need for, 5—109 privilege, 5-135
commencement of arbitration questions, 5-141
circumstances, 5—003—5—004 scope of disclosure document, 5—134
method, 5—015—5—031 third party disclosure, 5-137
time limits, 5—005—5—014 timing, 5-138
confidentiality use of documents obtained in
contractual provision for, 5-185 arbitration, 5-139
disclosure of documents, and, “without prejudice’ communications,
5—187—5-189 5-140
enforcement, 5—190 expert evidence
exceptions to duty of, 5-186 generally, 5-159
requirement for, 5—182—5—183 meetings of experts, 5—162
scope of obligation, 5—184 reports, provision of, 5-161
defining the issues tribunal appointed experts, 5-160
agreed statements of facts, 5—128 tribunal meeting with experts, 5-163
782 Index

hearings Consumer contracts

see Hearings arbitration agreements, 2—084
introduction, 5—001 Contribution
language current position, 6-112
agreement, 5—169 power to order, 6-111
determination by tribunal, 5—170 Convention awards
importance of choosing, 5-168 enforcement, 6-040
selection of, 5-167 ICSID Convention, 6-038
preliminary considerations meaning, 6-039
applicable rules, 5—057—5—059 New York Convention, 6—037
interim measures, 5—074—5—084 Corporate bodies
jurisdiction, 5—060—5-—070 companies, 3-008
provisional relief, 5—085—5—088 insolvent companies, 3-011
seat of arbitration, 5-071—5-073 limited liability partnerships, 3-009
privacy, requirement for, 5—182—5—183 statutory corporations, 3-010
removal of arbitrator Costs
dilatory arbitrator, 7-122 arbitration applications
failure to act, 7-121 general rule, 8-209
failure to properly conduct security for, 8—206—8-207
proceedings, 7-117 approach to
introduction, 7-116 determination if not agreed, 6-155
other failures, 7-119 lump sums, 6—157
refusal to act, 7-120 recoverable costs, 6-156
unilateral communications, 7-118 description
termination of reference arbitration costs, 6-130
abandonment, 5—229—5—230 award costs, 6-132
dismissal for want of prosecution, reference costs, 6-131
5—224—5-227 terminology, 6-129
final award, following, 5—218—5-223 determination by court
mutual consent, 5—228 application to court, 6-153
witnesses scale of costs, 6-154
compelling attendance, 5—158 determination by tribunal
criminal liability, 5-165 independent judgment, 6—151
directions, obtaining, 5—155 recoverable costs, 6-150
evidence of witnesses of fact, 5-142 tribunal’s fees and expenses, 6—152
examination on oath, 5—157 jurisdiction
factual witnesses, number of, 5—156 agreement between parties,
giving false evidence, 5-164 6-134—6-135
written witness statements, discretion, exercise of, 6—136—6—137
5-143—5-144 following the event, 6—138—6-139
Confidentiality power to award, 6-133
conduct of reference review by court, 6-140
contractual provision for, 5-185 powers of arbitral tribunal,
disclosure of documents, and, 4-102—4-103
5—187—5-189 recoverable costs
enforcement, 5—190 determination of, 6-141, 6-150,
exceptions to duty of, 5-186 7-209—7-215
requirement for, 5—182—5-183 extent of, 6-143
scope of obligation, 5-184 fees and expenses of tribunal, 6-142
duties of arbitral tribunal, 4-138 payment by third party, 6-146
requirement for, 1-010 power to limit, 6-147
Consolidation right to payment of fees, 6—145
disadvantages of arbitration, 1—1-031 specification of amount,
Construction contracts 6-148— 6-149
incorporation by reference, sealed offers
2—053—2-054 effect of, 6-160
 Index 783

entitlement to make, 6-159 commencement of arbitration, 7-076

meaning, 6-158 disadvantages of arbitration, 1-029
timing of information to tribunal, jurisdiction, 7—152—7-158
6-161 Delivery
Courts awards, 6-067
appointments Directions
arbitral tribunal members, 4-027, agreeing in advance, 5-116
4-050 checklist, 5-118
arbitrators, 7-105 compliance, 5—113
approach of entitlement to give, 5—112
appeals on questions of law, 8-155 generally, 5-111
arbitration agreements, 2-068 matters where may be required, 5—117
costs, 6-155—6—157 preliminary meeting, 5—114—5-115
failure of award to deal with all witnesses, 5—155
issues, 8-093 Discharge
fraud, 8-099 termination of arbitrator’s authority,
serious irregularity, 8—073, 4-163
8—108—8-109 Disclosure
wrong decisions, 8-137 confidentiality, 5~187—5—189
determination of costs in arbitrations, 5—133
application to court, 6-153 in court proceedings, 5-131
scale of costs, 6-154 orders of court, 7-208
jurisdiction, 7-003—7—008 process, failings of, 5-132
non-intervention, 1-019 scope of disclosure document, 5—134
powers of, 1-020—1-021 third party disclosure, 5—137
procedure, 7-009 useof documents obtained in
role of, 7-001—7—002 arbitration, 5-139
termination of arbitrator’s authority, “without prejudice” communications,
4-169 5-140
Crime Discretion of court
matters able to be arbitrated, 1-035 appointment of arbitrators, 7-096
Criminal liability extensions of time
witnesses, 5-165 agreed time limits, 7-091
DAC reports awards, making of, 7-086
see Advisory Committee of the commencement of arbitration, 7-078
Department of Industry injunctions in restraint of arbitration,
Death 7-059
arbitrator Dismissal for want of prosecution
arbitration rules, 7-138 termination of reference, 5—224—5—227
effect of, 7=137 Dispute resolution
failure to fill vacancy, 7-139 arbitration agreement clauses, 2-024
replacement by court, 7-140 Enforcement
termination of arbitration, 7-141 see also Foreign awards
termination of authority, 4-160 action on award, 8-014
party, 3-026 advantages of arbitration, 1-026
Declaratory relief arbitration applications
appropriateness, 6-110 application to set aside order, 8-224
injunctions in restraint of arbitration, applications, 8-219
7-066 directions, 8—221
power to make, 6-109 service of order, 8-223
Default service out of jurisdiction, 8-220
powers of arbitral tribunal, statement of interest, 8—222
4-0)88—4-091 awards pursuant to arbitration
Delay agreement, 8-011
appointment of arbitrators, 7-106 bankruptcy of party, 8-019
avoidance of unnecessary, 4-131 confidentiality, 5-190
784 Index

convention awards, 6—040 timing, 5-138

court remedies for enforcement, 8—018 use of documents obtained in
defences to action on award, 8-016 arbitration, 5-139
discretion of court, 8—005 “without prejudice” communications,
effect of permission to enforce, 8-006 5+140
form of award, 8-012 Examination on oath
implied obligation to perform award, witnesses, 5—157
8-015 Exclusion agreement
introduction, 8—002 appeals on questions of law, 8-121
judgment in terms of award, 8-007 arbitration agreements, 2—063
limitation, 8-017 Exclusion from hearing
objections to summary enforcement, party, 5-201
8-010 party’s representative, 5—200
options, 8-008 Executors
permission to enforce, 8-004 parties to arbitration, 3-026
procedural orders Exhaustion of rights
duty to comply with orders, 5-191 extensions of time, 7-075
orders of tribunal, 5-193 orders of court, 7-199
peremptory orders, 5—194—5-195 serious irregularity, 8-109
tribunal powers in case of default, substantive jurisdiction, 8—064
5-192 Expense
security, 8-0136 avoidance of unnecessary, 4-131
stay of enforcement, 8-009 disadvantages of arbitration, 1-029
summary procedure, 8-003 Expert determination
Engineering disputes arbitration agreement clauses,
arbitration agreements, 2-085—2-086 2-028—2-031
Equity features of arbitration, 1-012
duties of arbitral tribunal, powers of arbitral tribunal, 4-082
4-142—_4-143 Extensions of time
Errors agreed time limits
challenging awards discretion, exercise of, 7-091
accidental error, 8-169 exclusion of court powers, 7-090
admitted error, 8-171 power to extend, 7-089
errors of fact, 8-085 awards, making of
permissible errors, 8-078 applicants, 7-085
Evidence consequences of order, 7-087
application of rules, 5-130 discretion, 7-086
arbitration practice, 5-136 exclusion of court powers, 7-082
directions re property and evidence, exhaustion of other means, 7-083
5-166 judge-arbitrator, 7-088
disclosure power to extend, 7-081
failings of process, 5-132 substantial injustice, 7-084
in arbitrations, 5—133 commencement of arbitration
in court proceedings, 5—131 proceedings
expert evidence circumstances outside reasonable
generally, 5-159 contemplation of parties, 7-069
meetings of experts, 5-162 claims or rights affected, 7-073
reports, provision of, 5-161 conduct of other party, 7-071
tribunal appointed experts, 5—160 delay, 7-076
tribunal meeting with experts, 5—163 discretion, exercise of, 7-078
powers of arbitral tribunal, exhaustion of other means, 7—075
4072-081 ignorance of agreed time limit, 7-070
privilege, 5-135 limitation, 7-080
questions, 5—141 making application, 7-077
scope of disclosure document, 5—134 power to extend, 7-068
third party disclosure, 5—137 preliminary steps, 7-074
 Index

relevant disputes, 7-072 challenging awards

terms of order, 7-079 approach of court, 8-099
introduction, 7-067 evidence after publication of award,
statutory time limits 8-100
appeals, 7-094 illegality, 8-101
applicants, 7-093 public policy, 8-101
power to extend, 7-092 trial of issues by court, 8—102
Facilitation of settlements Fresh evidence
duties of arbitral tribunal, 4-144 challenging awards, 8-087, 8-167
Fairness Frustration of arbitration
appeals on questions of law, 8-159 generally, 8-216
challenging awards Functus officio
adoption of court procedures, 8-084 effect on reference, 6-166
bias, 8-088 final awards, 6—005
emergence of new evidence, 8-087 Geneva Convention
errors of fact, 8-085 recognition and enforcement of awards
failure to consider evidence, 8—082 under, 8—047
failure to manage process, 8-086 Hearings
“in play issues’, 8-080 absence of one party, 5—202
new points, 8-081 arbitration applications
permissible errors, 8-078 generally, 8-204
procedural decisions, 8-083 public or private, 8-205
proceedings not validly commenced, attendance, 5—198
8-079 conduct with party absent,
duties of arbitral tribunal,
5—204—5-206
4—106—4-127, 5—038—5-054 exclusion of party, 5-201
Fees and expenses
exclusion of party’s representative,
payment into court, 6-071
5-200
recoverable costs, 6-146, 7-212, 7-214
location, 5-197
removed arbitrator, 7-131
no entitlement to, 5-196
retention of award pending payment,
notes on
6-069
arbitrators’ notes, 5—216
Final awards
transcripts, 5-217
binding nature, 6-008
notice, 5—203
complete decision, 6-007
representation, 5—199
exceptions, 6-006
structure
functus officio, 6-005
meaning, 6—004 closing submissions, 5—203
termination of reference, 5—218—5-—223 closure of proceedings, 5—214
Finality foreign law, dealing with, 5-209
features of arbitration, 1-015 generally, 5-207
Flexibility “hot-tubbing”, 5—212
advantages of arbitration, 1-024 opening statements, 5—208
Foreign awards questioning by tribunal, 5-211
see also Recognition and stay of proceedings, 5—215
enforcement of foreign awards witness conferencing, 5—212
registration of, 8-225 witness evidence, 5—210
types of awards, 6-041 timing, 5-197
Foreign law “Hot-tubbing”
arbitration hearing, 5-209 arbitration hearing, 5—212
Foreign seats Human rights
injunctions in restraint of arbitration, matters able to be arbitrated, 1-038
7-062 Hybrid clauses
orders of court, 7-183 arbitration agreements, 2-037
Fraud ICSID Convention
arbitration agreements, 2-083 awards under, 6—038
786 Index

Illegality orders of court

challenging awards, 8-101 inherent jurisdiction, 7-196
New York Convention awards, 8-031 interim injunctions, 7-180, 7-195
separability, doctrine of, 2-013 post-award injunctions, 7-185
Immunity restraint of arbitrations
liability of arbitrators, 4-152 declaratory relief, 7-066
New York Convention awards, 8—045 discretion, exercise of, 7-059
Impartiality effect of application, 7-065
arbitrators, 4-023 foreign seat, 7-062
duties of arbitral tribunal, introduction, 7-056
4-106—4-127 legal proceedings, need for, 7-063
Implied arbitration agreements sufficiency of declaration, 7-061
scope of Arbitration Act 1996, 2-016 unavailability, 7-060
Incapacity use of, 7-058
New York Convention awards, 8—030 wrongly brought arbitral proceedings,
removal of arbitrator, 7-115 7-057
Incorporation by reference restrain of award, 7-064
arbitration agreements Injunctive relief
applicability of arbitration agreement, remedies, 6—107
2-057 Inquisitorial procedure
Articles of Association, 2-051 conduct of reference, 5—099
assignments of real property, 2-052 insolvency
bills of lading, 2-056 parties to arbitration
case law, 2-047 administration, 3—030
charterparties, 2-056 bankruptcy, 3-027—3-029
construction contracts, 2—053—2—054 compulsory winding-up, 3-032
construction, 2-046 voluntary winding-up, 3-031
leases, 2-052 termination of arbitrator’s authority,
Model Law, contract with, 2-050 4-162
reference to other documents, 2—044 Institutional arbitration
reference to standard form terms, conduct of reference, 5—102—5—103
2-048 Interest
reinsurance contracts, 2-055 compound interest, 6—120
specific references, requirement for, declaratory awards, following, 6-119
2-049 delay, effect of, 6-125
statutory guidance, 2-045 exercise of power, 6-124
Independence other powers, 6-127
duties of arbitral tribunal, overriding contractual right, 6-128
4—128—4-128 party autonomy, 6—116
Indemnity period of post-award interest, 6-123
remedies, 6—113 period of pre-award interest, 6—122
Inherent jurisdiction post-award, 6-117
generally, 7-155 power to award, 6-115
injunctions, 7-196 pre-award, 6-117
stay of proceedings, 7-055 rate of interest, 6-121
Injunctions silence in award, 6—126
anti-suit injunctions simple interest, 6-120
availability generally, 7-015 sums claimed in award, 6-118
availability in EU, 7-012 Interim orders
current position, 7-013 jurisdiction
generally, 7-011 generally, 7-180
jurisdictional basis, 7-018 injunctions, 7-195
recognition by foreign courts, 7-017 preliminary issues, 5—074—5—084
tests to be applied, 7-014 Interim payments
third party statutory rights, 7-016 arbitral tribunal, 4-061
 Index 787

International arbitration effect on arbitral proceedings, 7-161

conduct of reference, 5—101 grounds for application, 7-148
Interpleader proceedings inherent jurisdiction of court, 7-155
stay of proceedings, 7-054 introduction, 7-143
Interpretation justification of court decision, 7-160
arbitration agreements loss of right to object, 7-162
Sallton “any7, 2=077, option to litigate, 7-149
“arising out of” or “‘arising under”, overlap of powers, 7-153
2-078 permission of arbitral tribunal, 7-157
broad interpretation, 2-075 seat, relevance of, 7-150—7-151]
“concerning alleged breaches of the tribunal determination, 7-144
contract”, 2-080 excess of
current position, 2-074 appeals on questions of law, 8—157
‘in connection with’, 2—079 duties of arbitral tribunal, +-135
‘in relation to”, 2-079 fair hearing, 1-039
“regarding”, 2-079 generally, 1-033
standard wordings, 2—076 human rights, 1-038
wide terms, preference for, 2—082 investment disputes, 1-041
“with respect to the construction limits of, 1-037
of”, 2-081 powers of arbitral tribunal,
Invalidity 4—070—4-071
New York Convention awards, 8-031 preliminary issues, 5—060—5—070
separability, doctrine of, 2-012 public policy, 1-040
Investment disputes stay of proceedings, 7-029—7-033
matters able to be arbitrated, 1-041 Language
Investment treaties agreement, 5-169
challenging awards under, 8—052 determination by tribunal, 5—170
Joinders importance of choosing, 5—168
disadvantages of arbitration, 1-031 selection of, 5-167
Judges Leases
qualifications of arbitrators, incorporation by reference, 2—052
4-019—4-022 Lien
Jurisdiction arbitral tribunal, 4-063—4—064
anti-trust, 1-036 Limitation
arbitrability, 1-034 challenging awards, 8-177
arbitration agreement clauses, commencement of arbitration, 7-080
2—025—2-027 Limited liability partnerships
awards, 6-013 parties to arbitration, 3-009
costs “Took-sniff” arbitrations
agreement between parties, conduct of reference, 5-110
6—-134—6-135 Loss of right to object
discretion, exercise of, 6-136—6-137 jurisdiction, 7-162
following the event, 6—138—6—139 removal of arbitrator, 7-127
power to award, 6-133 serious irregularity, 8-110
review by court, 6-140 substantive jurisdiction, 8-065
crime, 1—035 Lump sums
disputes, determination of costs, 6-157
agreement of parties to arbitration, Majority awards
7-156 generally, 6-035
appeals, 7-163 multiple arbitrators, 6-057
costs savings, 7-159 Matrix contracts
courses of action, 7-145 separability, doctrine of
court powers under s.32, 7-154 application of terms of, 2-014
court powers under s.72, invalidity of, 2-010
7-146—7-147 Minors
delay, 7-152, 7-158 parties to arbitration, 3-005
788 Index

Misbehaviour award not binding, 8-040

liability of arbitrators, 4-157 contrary to public policy, 8-044
Misconduct denial of justice needed, 8-036
removal of arbitrator, 7-126 due process, 8-034
Model Law enforcement of award as made, 8—026
incorporation by reference, 2-050 illegality, 8-031
Multi-party arbitrations immunity, 8-045
administration, 5—181 inability to present case, 8-035
concurrent hearings, 3—044 incapacity, 8-030
consolidation, 3—044 introduction, 8-021
court powers, 3-050 invalidity, 8-031
disputes arising at different time, 3-043 nationality, 8-029
drafting considerations, 3-045 non-arbitrable matters, 8-043
express agreement, absence of, 3-048 opposing enforcement, 8-028
introduction, 3-040 order of competent authority, 8-041
joining third parties, 3-047 pending application to set aside or
objecting, reasons for, 3-041 suspend, 8-042
parties to same arbitration agreement, procedure contrary to agreement or
3-042 law, 8-038
related claims, 3-044 refusal of recognition and
statutory provisions, 3-049 enforcement, 8—022
timings, 3-046 scope of recognition and
Multi-tier clauses enforcement, 8-023
arbitration agreements, 2-036 security, 8-046
Multiple arbitrators service out of jurisdiction, 8-027
chairmen, 6-057 set aside awards, 8—040
dissenting opinions, 6-058 summary enforcement procedure,
majority awards, 6-057 8-024
stranger’s award, 6-060 suspended awards, 8—040
umpire’s award, 6-059 tribunal’s jurisdiction, 8-037
Multiple awards Westacre case, 8—032—8-—033
appropriateness of, 6-011 Non-intervention of courts
conditions, 6-015 generally, 1-019
dangers of, 6-014 Notification
deductions, 6—016—6-017 awards, 6—064
effect of, 6-018 Oaths
examples, 6-012 witnesses, 5—157
issue estoppel, 6-019 Opening statements
power to make, 6-009 arbitration hearing, 5—208
scope and content, 6-010 Oral arbitration agreements
set-off, 6—016—6—017 scope of Arbitration Act 1996, 2-015
Mutual consent Orders of court
termination of reference, 5—228 appeals, 7-201
Mutuality applicants, 7-200
arbitration agreements Brussels regime, 7-184
not required, 2-017 court or tribunal, 7-181
unilateral option to litigate, 2-018 disclosure of documents, 7—208
Natural justice exclusion of court powers, 7-186, 7-199
tribunal duties, 5—038—5—054 exhaustion of other rights, 7-199
New York Convention foreign seats, 7-183
awards under, 6-037 information, requests for, 7-208
developments in arbitration law, 1-045 injunctions
recognition and enforcement of awards inherent jurisdiction, 7-196
under interim injunctions, 7-180, 7-195
adverse effect required, 8-039 post-award injunctions, 7-185
application without notice, 8-025 interim orders, 7-180
 Index 789

introduction, 7-179 lawyers, 3-025

justification for acting, 7-182 multi-party disputes
no seat, 7-183 concurrent hearings, 3-044
non-urgent cases, 7-187 consolidation, 3-044
peremptory orders, enforcement of, court powers, 3-050
7-198 disputes arising at different time,
practice, 7-205 3-043
preservation of, 7-192 drafting considerations, 3-045
production, limitation on, 7—204 express agreement, absence of, 3-048
property orders, 7-193 introduction, 3-040
receivers, appointment of, 7-197 joining third parties, 3-047
sale of goods, 7-194 objecting, reasons for, 3-041
security parties to same arbitration agreement,
costs, 7-207 3-042
proceedings im rem, 7-106 related claims, 3-044
tribunal unable to act effectively, 7-189 statutory provisions, 3-049
urgent cases, 7-188, 7-190 timings, 3-046
witnesses partnerships, 3-012
power to summon, 7-203 public authorities, 3-033
securing attendance of, 7-202 states and state entities
taking of evidence, 7-191 capacity, 3-035
Parties generally, 3-033
administrators, 3-026 involvement of English court, 3-034
agents relationship between, 3-038
generally, 3-023 sovereign immunity, 3—036—3—037
no claim by, 3-024 substituted parties
arbitral institutions assignees’ rights, 3-018
generally, 3-051 equitable assignees, 3-020
immunity, 3-053 group of companies doctrine, 3—022
role of, 3-052 legal assignees, 3-019
bankrupts notice of, 3—017
existing proceedings, 3-029 novation, 3-021
submission to arbitration, 3-027 occurrences of, 3-016
trustee in bankruptcy, 3-028 third parties
capacity, 3-003 guarantors, 3-015
corporate bodies indemnifiers, 3-015
companies, 3-008 statutory rights of, 3-014
insolvent companies, 3-011 sureties, 3-015
limited liability partnerships, 3-009 trustees, 3-026
statutory corporations, 3-010 unincorporated associations, 3-013
death of, 3-026 Partnerships
executors, 3-026 parties to arbitration, 3-012
general rule, 3-002 Party-appointed arbitrators
identity, 3-003 duties, 4-145—4-148
individuals under disability form of tribunal, 4-010
bankrupts, 3-007 Party autonomy
generally, 3-004 developments in arbitration law, 1-054
minors, 3—005 duties of tribunal, 5—055—5—056
patients, 3-006 remedies, 6-097
insolvency Patients
administration, 3-030 parties to arbitration, 3-006
bankruptcy, 3-027—3-029 Payments into court
compulsory winding-up, 3-032 fees and expenses, 6—071
voluntary winding-up, 3-031 Payment of money
international organisations, 3-039 certificates as condition precedent,
introduction, 3-001 6-102
790 Index

currency, 6—101 statement of interest, 8-222

directing payment, 6-098 form of application, 8-183
exemplary damages, 6—103—6-106 frustration of arbitration, 8-216
recipient, 6-099 generally, 8-180
terms, 6-100 hearirig of applications
Peremptory orders generally, 8-204
enforcement of, 7-198 public or private, 8—205
Permission to appeal intention to contest, failure to notify,
appeals on questions of law 8-198
content of application, 8-149 introduction, 8-178
generally, 8-132 no entitlement to hearing, 8-218
Preliminary issues notice, 8-196
appeals on questions of law, 8-158 options for arbitrator not made
applicable rules, 5—057—5—059 defendant, 8-199
interim measures, 5—074—5—084 particular applications to court, 8-210
jurisdiction, 5—060—5—070 permission details, 8-187
provisional relief, 5-085—5—088 registration of foreign awards, 8—225
seat of arbitration, 5—071—5—073 respondents, 8—195
President rules of court, 8-181
form of tribunal, 4-011 security for award, 8-208
Pre-trial hearings security for costs, 8-206—8-207
administratien, 5-177 service
Privacy acknowledgement of, 8-197
advantages of arbitration, 1-023 application to stay proceedings, 8-189
features of arbitration, 1-010 generally, 8-196
requirement for, 5-182—5-183 out of jurisdiction, 8-191
Privilege within jurisdiction, 8-190
evidence, 5—135 setting aside of permission, 8-194
Procedural orders specification of subject, 8-185
enforcement of statement of truth, 8-186
duty to comply with orders, 5-191 time limits for challenges and appeals
orders of tribunal, 5—193 discretion, 8—213
peremptory orders, 5—194—5-195 extension of, 8—212
tribunal powers in case of default, generally, 8-211
5-192 stricter application of s.67, 8-215
Procedure for arbitration applications weight given to different
agreement details, 8-187 considerations, 8-214
application of rules of court, 8—182 transfers between courts, 8-179
arbitration claim forms, 8-188 witness statements, content of, 8-192
automatic directions, 8—201 Professional negligence
civil procedure rules, application of, liability of arbitrators, 4-155
8-193 Property orders
content of claim form, 8—184 jurisdiction, 7-193
costs Provisional awards
general rule, 8-209 appropriateness, 6—022
security for, 8—206—8-207 final award, subject to, 6-023
court order for arbitrator to be power to make, 6-020
defendant, 8—200 types of, 6-021
directions by court, 8—202 Provisional relief
dismissal of application, 8-203 preliminary issues, 5—085—5—088
enforcement of award Public authorities
application to set aside order, 8-224 parties to arbitration, 3-033
applications, 8-219 Public importance
directions, 8-221 appeals on questions of law
service of order, 8—223 faulty reasoning, 8-144
service out of jurisdiction, 8-220 generally, 8-141
 Index 791

open to serious doubt, 8—142 incapacity, 8-030

public importance, 8—143 introduction, 8—021
Public interest invalidity, 8-031
features of arbitration, 1-007 nationality, 8-029
Public policy non-arbitrable matters, 8-043
challenging awards, 8-101 opposing enforcement, 8-028
matters able to be arbitrated, 1-040 order of competent authority, 8—041
Publication pending application to set aside or
awards, 6-065 suspend, 8-042
Qualifications procedure contrary to agreement or
arbitrators law, 8-038
generally, 4-013, 4-137 refusal of recognition and
unsuitable appointees, 4-014 enforcement, 8—022
personal nature, 4-015 scope of recognition and
removal, 7-114 enforcement, 8—023
specific number of tribunal members, security, 8-046
4-016 service out of jurisdiction, 8—027
special qualifications, 4—017—4—018 set aside awards, 8—040
judges, 4-019—4022 summary enforcement procedure,
Quasi-arbitrators 8-024
meaning, 4-004 suspended awards, 8-040
Questions of law tribunal’s jurisdiction, 8-037
see Appeals on questions of law Westacre case, 8-032—8—033
Reasoned awards
other foreign awards, 8-050
form, 6-032
Washington Convention awards
matters in dispute, specification of,
application for registration, 8—049
6-030
enforcement by registration, 8-048
meaning, 6-028
Recoverable costs
reasons not part of award, 6—033
determination of
reasons orders by court, 6-031
appeals, 7-215
requirement for reasons, 6—029
arbitrator’s fees and expenses, 7-214
use of reasons, 6-034
basis of assessment, 7—211
Reasons
court powers, 7-210
appeals on questions of law
generally, 6-141
application to court, 8-152
introduction, 7—209
generally, 8-130
refusal to deliver award without
awards, 6-051
payment, 7-213
Receivers
tribunal fees and expenses, 7-212
appointment of, 7-197
extent of, 6-143
Recitals
fees and expenses of tribunal, 6-142
awards, 6—054—6-055
Recognition and enforcement of payment by third party, 6-146
foreign awards power to limit, 6—147
Geneva Convention awards, 8—047 right to payment of fees, 6—145
introduction, 8-020 specification of amount, 6—148—6-149
New York Convention awards Rectification
adverse effect required, 8-039 remedies, 6—114
application without notice, 8-025 Reference
award not binding, 8-040 costs, 6-131
contrary to public policy, 8-044 effect of award on
denial of justice needed, 8-036 accidental slip, meaning of, 6-168
due process, 8-034 additional awards, 6—171—6—175
enforcement of award as made, 8-026 ambiguity in award, 6-170
illegality, 8-031 correction of clerical mistakes, 6—167
immunity, 8-045 slip rule, use of, 6-169
inability to present case, 8-035 tribunal functus officio, 6-166
792 Index

Reinsurance contracts non-waivable grounds for challenge,

incorporation by reference, 2—055 7-128
Remedies orders court can make, 7-129
cancellation of deed or document, partiality, 7-112—7-113
6-114 power to remove, 7—111
contribution qualifications, 7-114
current position, 6-112 refusal or failure to properly conduct
power to order, 6-111 proceedings
declaratory relief dilatory arbitrator, 7-122
appropriateness, 6-110 failure to act, 7-121
power to make, 6-109 failure to properly conduct
indemnity, 6-113 proceedings, 7-117
injunctive relief, 6-107 introduction, 7-116
interest other failures, 7-119
compound interest, 6—120 refusal to act, 7-120
declaratory awards, following, 6-119 unilateral communications, 7-118
delay, effect of, 6-125 replacement by court, 7-140
exercise of power, 6-124 rights of arbitral tribunal, 7-132
other powers, 6-127 substantial injustice
overriding contractual right, 6-128 bias, findings of, 7-124
party autonomy, 6—116 other grounds, 7-125
period of post-award interest, 6-123 requirement for, 7-123
termination of arbitration, 7-141
period of pre-award interest, 6-122
Remuneration
post-award, 6-117
arbitral tribunal
power to award, 6-115
advance payments, 4-060
pre-award, 6-117
cancellation fees, 4-062
rate of interest, 6-121
costs awards, +065
silence in award, 6-126
fixing fee levels, 4-056—4—059
simple interest, 6-120
interim payments, 4-061
sums claimed in award, 6-118
lien, 4-063—4064
introduction, 6-096
right to, 4+-052—4055
party autonomy, 6-097
Representation
payment of money
arbitration hearing, 5-199
certificates as condition precedent, Resignation of arbitrator
6-102
arbitration rules, 7-138
currency, 6-101 effect of, 7—137
directing payment, 6—098 failure to fill vacancy, 7-139
exemplary damages, 6—103—6—-106 liability, 4-158
recipient, 6-099 relief
terms, 6-100 availability, 7-133
rectification, 6—114 limitations, 7—134
setting aside, 6-114 terms, 7-135
specific performance, 6-108 replacement by court, 7-140
Removal of arbitrator termination of arbitration, 7-141
appeals, 7-142 termination of authority, 4-164
arbitration rules, 7-138 Restraint of arbitrations
effect of, 7-137 declaratory relief, 7-066
failure to fill vacancy, 7-139 discretion, exercise of, 7-059
fees and expenses of removed arbitrator, effect of application, 7-065
JAI foreign seat, 7-062
filling vacancy following, 7-130 introduction, 7-056
incapacity, 7-115 legal proceedings, need for, 7-063
introduction, 7—110 sufficiency of declaration, 7-061
loss of right to object, 7-127 unavailability, 7-060
misconduct, 7—126 use of, 7-058
 Index 793

wrongly brought arbitral proceedings, matrix contract, application of terms of,

7-057 2-014
Restraint of award matrix contract, invalidity of, 2-010
generally, 7-064 statutory provision for, 2-008
Revocation of arbitrator’s void contracts, 2-011
appointment Serious irregularity
arbitration rules, 7-138 admitted irregularity, 8-103
court powers, 7-135 appeals
eitect of lov approach of court, 8-115
failure to fill vacancy, 7-139 excess of jurisdiction, 8-116
replacement by court, 7-140 orders on preliminary points, 8—117
termination of arbitration, 7-141 residual injunction regarding
Right to fair hearing unfairness, 8—118
matters able to be arbitrated, 1-039 application to court
Rights in rem conduct of application, 8—112
effect of award, 6-180 exhaustion of other rights, 8—109
Room hire charges loss of right to object, 8-110
administration of arbitrations, 5-179 multiple actions, 8-114
Sale of goods objections, timing of, 8-111
jurisdiction, 7-194 time limit, 8-108
Scott v Avery clauses variety of orders, 8-113
arbitration agreements, 2—()22 approach of courts, 8-073
Sealed offers breach of agreed procedures, 8—092
effect of, 6-160 contrary to public policy, 8-099—8-102
entitlement to make, 6-159 excess of powers, 8-074
meaning, 6-158 excess of powers, 8-089—8-091
timing of information to tribunal, 6—161 failure to deal with all issues,
Seat of arbitration 8—093— 8-097
applicable laws fairness, 8-077—8—088
ascertaining, 2-102 fraud, 8-099—8-103
Brusseis Regulation, and, 2-105 generally, 8-072
choice of, 2-101 liability of arbitrators, 4-156
floating seat, 2-104 types of irregularity, 8-076
hearings in different locations, 2-107 uncertainty or ambiguity, 8-098
Lugano Convention, and, 2-105 Service
meaning, 2-100 acknowledgement of, 8-197
place of enforcement, 2-109 application to stay proceedings, 8-189
procedural law, and, 2—103 generally, 8-196
procedural law, matters covered by, out of jurisdiction, 8-191
2-106 New York Convention awards, 8—027
procedural rules distinguished, 2-108 within jurisdiction, 8-190
substance of dispute, 2-093 Set-off
preliminary issues, 5—071—5-—073 multiple awards, 6—016—6—017
Secretary Setting aside
administration of arbitrations, 5-173 challenging awards, 8-164
Security permission, 8-194
award, 8-208 remedies, 6—114
costs, 7-207, 8-206—8-207 Signatures
proceedings in rem, 7-106 arbitration agreements, 2—043
Separability awaras, 6—049—6—050
consequences of, 2—009 Slip rule
doctrine of, 2-007 use of, 6-169
illegality affecting contract, 2-013 Sole arbitrators
invalidity of arbitration agreement, appointment, 4-035
2-012 form of tribunal, 4-006
 794 Index

Specific performance introduction, 7-010

remedies, 6-108 jurisdiction, 7-029—7-033
Speedy arbitration making application, 7-044
conduct of reference, 5—107 nullity of arbitration agreement, 7-046
. Standard forms optional arbitration clauses, 7-038
incorporation by reference, 2-048 options available to court, 7-025
Statement of case partial stays, 7-040
defining issues, 5—128 poverty of defendant, 7-049
Statement of facts pre-arbitration stays, 7-041
defining issues, 5—123—5—124 referred matters, 7-039
Statement of truth refusal of, 7-052
arbitration proceedings, 8-186 scope of arbitration clause,
States and state entities 7-035—7-036
capacity, 3-035 service of application to stay, 7-045
generally, 3-033 service of defence, effect of, 7-043
involvement of English court, 3-034 third parties, involvement of, 7-048
relationship between, 3-038 void arbitration agreement, 7-046
sovereign immunity, 3-036—3—037 Stranger’s award
Statutory time limits generally, 6-060
appeals, 7-094 Substance of disputes
applicants, 7-093 applicable laws
power to extend, 7-092 absence of agreement, 2-092
Stay of proceedings effect of seat on choice of proper law,
acknowledgement of service, 7-042 2-093
adjudicator’s decision, 7-051 other considerations, 2-091
anti-suit injunctions statutory provision, 2-090
availability generally, 7-015 Substantial injustice
availability in EU, 7-012 challenging awards
current position, 7-013 alternative outcome, possibility of,
generally, 7-011 8-106
jurisdictional basis, 7-018 burden on applicant, 8-105
recognition by foreign courts, 7-017 meaning, 8-104
tests to be applied, 7-014 order of issues, 8—107
third party statutory rights, 7-016 removal of arbitrator
appeals, 7-053 bias, findings of, 7-124
applicant to be party to arbitration, other grounds, 7-125
7-034 requirement for, 7-123
arbitration hearing, 5—215 Substantive jurisdiction
breach of agreement to arbitrate challenging awards
actions for damages, 7-021 appeals, 8-071
costs on indemnity basis, 7-022 continuation of arbitral proceedings
damages, 7-019 pending application, 8066
domestic and non-domestic exhaustion of other rights, 8-064
agreements, 7-023 further role of tribunal, 8-068
overlap between remedies, 7-020 generally, 8-054
claims against tribunal, 7-037 insufficient reasons, 8-070
conditions, 7-026 limited jurisdiction, 8-056
conditions, imposition of, 7-050 loss of right to object, 8-065
court power to grant, 7-024 party to proceedings, 8-058
dispute, requirement for, 7-047 procedure, 8-067
existence of arbitration agreement, raising new points, 8—061
7-027—7-028 rehearing rather than review, 8—060
inherent jurisdiction of court, 7-055 scope of application, 8—059
inoperative arbitration agreements, scope of arbitration agreement, 8-062
7-046 security, 8-069
interpleader proceedings, 7-054 statutory provisions, 8-057
 Index 795

timing of application, 8-055 dismissal for want of prosecution,

timing of application, 8-063 5—224—5-227
validity of arbitration agreement, final award, following, 5—218—5—223
8-062 mutual consent, 5—228
variety of orders, 8-067 Third arbitrators
Substituted parties appointment, +-044—4—048
assignees’ rights, 3-018 duties, 4-149
equitable assignees, 3-020 form of tribunal, 4-011
group of companies doctrine, 3-022 Third parties
legal assignees, 3-019 effect of award on
notice of, 3—017 disclosure of award, 6-185
novation, 3-021 exceptions, 6-184
occurrences of, 3-016 non-binding nature, 6-183
Summary procedures guarantors, 3-015
disadvantages of arbitration, 1-030 indemnifiers, 3-015
Tailored procedure statutory rights of, 3-014
conduct of reference, 5—097 sureties, 3-015
Taking up of award Third party procedures
appeals, 6-066 disadvantages of arbitration, 1-030
delivery of award, 6-067 Time limits
importance of, 6-070 appeals on questions of law, 8-123
making of award, 6-065 arbitration proceedings
notification of award, 6-064 discretion, 8—213
payment into court of fees and extension of, 8—212
expenses, 6-071 generally, 8-211
publication of award, 6-065 stricter application of s.67, 8-215
weight given to different
“ready to be delivered”’, 6-068
considerations, 8—214
retention of award pending payment of
awards
fees, 6-069
contractual time limits, 6-063
Tenders
generally, 6-046
effect of, 6-160
prompt production of award, 6-062
entitlement to make, 6-159
statutory time limits, 6-061
meaning, 6-158
commencement of arbitration,
timing of information to tribunal, 6-161
5—005—5-014
Termination Transcripts
arbitration agreements arbitration hearing, 5—217
abandonment of arbitration Transfer of property
agreement, 2-114 effect of award, 6-165
by agreement, 2-110 Trustees
repudiation of right to arbitrate, parties to arbitration, 3-026
2-111—2-113 Two arbitrators
arbitrator’s authority appointment, 4+-036—4—043
by agreement of parties, 4-166 form of tribunal, 4-007
by appointing authority, 4-168 Umpires
by court order, 4-169 appointment
by death of arbitrator, 4-160 ancillary powers, 7-107
by death of party appointing, +-161 failure to appoint, 7-101
by discharge of duty, 4-163 powers of court appointed, 7-108
by insolvency, 4-162 awards, 6-059
by resigning, 4-164 duties, 4-150—4-151
by settlement, +-167 form of tribunal, 4-009
generally, 4-159 termination of arbitrator’s authority,
umpire’s entry into reference, +-165 4-165
reference UNCITRAL Model Law
abandonment, 5—229—5-—230 developments in arbitration law, 1-049
 796 Index

Unincorporated associations examination on oath, 5-157

parties to arbitration, 3-013 factual witnesses, number of, 5—156
Unsatisfied awards giving false evidence, 5—164
effect on other proceedings, 6-179 power to summon, 7-203
- Variation securing attendance of, 7-202
arbitration agreements taking of evidence, 7-191
disputes where contract varied, 2-019 written witness statements,
effect of, 2-020 clus 5—143—5-144
Void contracts Writing
separability, doctrine of, 2-011 arbitration agreements
Washington Convention awards evidenced in writing, 2-040
application for registration, 8-049 formality, 2-042
incorporation, 2-042
enforcement by registration, 8—048
methods constituting writing, 2-039
Winding-up
reference to, 2—041
see Insolvency
requirement of writing, 2-038
“Without prejudice” communications
signatures, 2-043
use in evidence, 5-140 awards. 6-047
Witnesses Wrong decisions
compelling attendance, 5—158 appeals on questions of law
conferencing, 5—212 apparent error, 8-138
criminal liability, 5-165 approach of court, 8-137
directions, obtaining, 5—155 error apparent from award, 8-140
evidence of witnesses of fact, 5-142 prima facie view, 8—139
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