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Legal framework

National arbitration laws

What legislation applies to arbitration in your jurisdiction?

The Arbitration Act 1996 applies to both domestic and international arbitrations where the seat of arbitration is England and Wales or Northern Ireland. Common law may also be relevant in interpreting the act or placing additional obligations on parties and arbitrators (eg, confidentiality).

Mandatory laws

Are there any mandatory laws?

Schedule 1 of the act sets out the mandatory provisions identified in Section 4. These include, but are not limited to, a tribunal's duty to act fairly and impartially (Section 33) and the Sections 67 and 68 grounds for challenging an arbitral award. 

New York Convention

Is your country a signatory to the New York Convention? If so, what is the date of entry into force?

The United Kingdom is a signatory to the New York Convention which entered into force on December 23 1975.

Are there any reservations to the general obligations of the convention?

The United Kingdom has made what is known as the ‘reciprocity reservation’. By virtue of this, the United Kingdom's New York Convention obligations will therefore apply only to the recognition and enforcement of awards made in the territory of another contracting state. The United Kingdom has also extended the convention’s territorial application, including to certain of its overseas territories and crown dependencies.

Treaties and conventions

What other treaties and conventions in relation to arbitration is your jurisdiction party to?

The United Kingdom is a party to:

  • the Convention on the Settlement of Investment Disputes between States and Nationals of Other States 1966 (the ICSID Convention);
  • over 100 bilateral investment treaties or other treaties with investment provisions;
  • the Energy Charter Treaty (which came into force April 16 1998); and
  • the Geneva Convention on the Execution of Foreign Arbitral Awards 1927.

UNCITRAL

Has your jurisdiction adopted the UNCITRAL Model Law?

The United Kingdom has not adopted the UNCITRAL Model Law, although the Arbitration Act does incorporate many of the principles set out within the Model Law.

Reform

Are there any impending plans to reform the arbitration laws in your jurisdiction?

Not at present. However, in 2016 the Law Commission consulted on whether any aspects of the act should be considered for reform in its next law reform programme. The final draft programme will be proposed to the lord chancellor in June 2017 and laid before Parliament thereafter.

Arbitration agreements

Validity

What are the validity requirements for an arbitration agreement?

To fall within the scope of the Arbitration Act 1996, an arbitration agreement must be made or evidenced in writing (Section 5). Arbitration agreements are typically part of the commercial contract, but can also be set out in separate documents and be incorporated into a contract by reference (Section 6(2)). While oral arbitration agreements therefore fall outside the scope of the act, they may still be recognised and enforced at common law (Section 81(1)(b)).

Enforcement of agreements

How are arbitration agreements enforced in your jurisdiction? What is the attitude of the national courts towards arbitration agreements?

English courts display a pro-arbitration attitude upholding and supporting parties' agreement to arbitrate their disputes. This support could include a stay of English court proceedings where a matter should be referred to arbitration (Section 9) or interim relief in support of arbitration through a freezing or anti-suit injunction (Section 44). 

Consolidation

Can an arbitral tribunal with its seat in your jurisdiction consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances?

Unless the parties agree to confer such power on the tribunal, it has no power to order consolidation of proceedings or concurrent hearings (Section 35).

The parties are free to agree the terms on which any consolidation may take place. This agreement may be given expressly through the arbitration agreement itself or by incorporation of a set of arbitral rules which provide for the consolidation of proceedings in certain circumstances.

Choice of law

How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?

The tribunal shall decide the dispute either:

  • in accordance with the law chosen by the parties as applicable to the substance of the dispute; or
  • if the parties so agree, in accordance with considerations as agreed by them or determined by the tribunal (Section 46).

Where the parties have not chosen or agreed an applicable law, the tribunal should apply the law determined by the conflict of laws rules which it considers applicable (Section 46(3)).

Separability

Are there any provisions on the separability of arbitration agreements?

Section 7 of the act addresses the separability of arbitration agreements. Under this, unless otherwise agreed by the parties, an arbitration agreement which forms or was intended to form part of another agreement (whether in writing or not) shall not be regarded as invalid, non-existent or ineffective because that other agreement is invalid, did not come into existence or has become ineffective, and shall for that purpose be treated as a distinct agreement.

Multiparty agreements

Are multiparty agreements recognised?

Multiparty agreements to arbitrate are recognised by the English courts, while provisions of the act expressly identify situations in which there may be more than two parties to an arbitration agreement (Sections 16(7) and 18(2)).

In the absence of an express procedure for the appointment of the tribunal in a multi-party agreement in the arbitration agreement or any arbitration rules chosen by the parties, the Arbitration Act allows for a party to apply to the court to make the appointments or direct the appointment process (Section 18(2)).

Arbitral tribunal

Criteria for arbitrators

Are there any restrictions?

The Arbitration Act 1996 expressly requires that an arbitrator be impartial (Section 33). By inference from the powers given to the court to remove an arbitrator (Section 24), an arbitrator must also possess the qualifications required by the arbitration agreement and be physically and mentally capable of conducting the proceedings.

Contractual stipulations

What can be stipulated about the tribunal in the agreement?

The arbitration agreement may stipulate:

  • the number of arbitrators (Section 15);
  • the procedure for their appointment, including the procedure for appointing a chair (Section 16(1)); and
  • the qualifications required for those arbitrators.

In Jivraj v Hashwani (2011, UKSC 40) the Supreme Court confirmed that parties need not comply with anti-discrimination provisions contained in labour law when selecting their arbitrators.

Default requirements

Are there any default legal requirements as to the selection of a tribunal - for example, concerning the number of arbitrators or their characteristics?

Under Section 15(3), a dispute will be resolved by a sole arbitrator in the absence of an agreement between the parties as to the number of arbitrators. There are no default requirements regarding the characteristics of arbitrators.

Challenging the appointment of an arbitrator

Can the appointment of an arbitrator be challenged? Can an arbitrator be disqualified? What is the procedure for this?

The appointment of an arbitrator can be challenged. Under Section 24 of the Arbitration Act, a party to the arbitration may apply to the court for the removal of an arbitrator on the following grounds:

  • circumstances exist which raise ‘justifiable doubts’ as to the arbitrator’s impartiality;
  • the arbitrator does not possess the qualifications required by the arbitration agreement;
  • the arbitrator is physically or mentally incapable of conducting the proceedings, or there are justifiable doubts as to his or her capacity to do so; or
  • the arbitrator has failed to conduct the proceedings properly or efficiently. 

In all the circumstances, the party must also be able to show that there has been or will be 'substantial injustice' caused. The arbitrator has the right to be heard by the court and may continue proceedings while the court hears the application. If the court then decides to exercise its powers of removal, it may make an order determining the fees the arbitrator should be paid, or require the arbitrator to repay fees or expenses already received. If the parties are arbitrating under institutional rules which provide the institution with the power to remove an arbitrator, the court shall not exercise its power of removal unless it is satisfied that institutional recourses have first been exhausted (Section 24(2)).

Jurisdictional objections

How should an objection to jurisdiction be raised?

An objection to the substantive jurisdiction of a tribunal at the outset of the arbitration should be raised quickly, no later than the time that party takes the first step in the proceedings to contest the merits of any matter in relation to which it challenges the tribunal’s jurisdiction (Section 31).

It is also possible for a party to object to the tribunal's jurisdiction during the course of the proceedings. That objection must be made as soon as possible after the matter alleged to be beyond the jurisdiction of the tribunal is raised (Section 31). The tribunal may allow a later objection if the delay is considered justified. A party's ability to challenge an award on the basis of lack of jurisdiction (Section 67) may be lost if that party has not raised a timely jurisdictional objection during the arbitral proceedings themselves (Section 72). 

Replacement of an arbitrator

Why and how can an arbitrator be replaced?

An arbitrator can be replaced where:

  • the parties revoke that arbitrator's authority (Section 23);
  • the court removes the arbitrator on the basis of specific grounds discussed above (Section 24);
  • the arbitrator resigns (Section 25); or
  • the arbitrator dies (Section 26).

The replacement of that arbitrator will then take place in accordance with the rules that apply to the appointment of the tribunal, as agreed by the parties, or under the act.

The vacancy should be filled in accordance with the ordinary rules for the appointment of an arbitrator or arbitrators.

Powers and obligations

What powers and obligations do arbitrators have?

The tribunal has a general duty to:

  • act fairly and impartially between the parties, giving each party a reasonable opportunity to put its case and deal with their opponent's case; and
  • adopt suitable procedures for the case to provide a fair means for resolving the matters to be determined, avoiding unnecessary delay or expense (Section 33).

The act also gives the tribunal a number of other powers, including the power to rule on its own jurisdiction (Section 30) and to order the preservation of evidence (Section 38). 

Liability of arbitrators

Are arbitrators immune from liability?

Arbitrators and their employees and agents are immune for acts and omissions in the discharge or purported discharge of their duties, unless they have been shown to have acted in bad faith (Section 29). However, an arbitrator is not immune from any liability incurred where the arbitrator has resigned.

Communicating with the tribunal

How do the parties communicate with the tribunal?

The Arbitration Act does not include any express provision that regulates how parties should communicate with the tribunal. Most arbitral rules set out some requirements regarding the method of communication with a tribunal, and may also prohibit unilateral communications by one party with the tribunal.

Reaching decisions

Is unanimous agreement of the tribunal required? If there is disagreement, does the will of the majority suffice? What are the implications of this?

Under Section 20 of the Arbitration Act, parties are free to appoint one of the tribunal as chairman and can agree what the functions of the chairman are to be. If there is no such agreement, decisions, orders and awards shall be made by all or a majority of the arbitrators (including the chair). In the event of a deadlock, the view of the chair shall prevail. Under Section 22, where the parties agree that there shall be two or more arbitrators but no chairman or umpire, the parties are free to agree how the tribunal is to make decisions.

Arbitrability

Are there any disputes incapable of being referred to arbitration?

The Arbitration Act includes no express provisions on what disputes are incapable of being referred to arbitration. However, under common law there are certain disputes which cannot be arbitrated, including:

  • disputes under illegal contracts;
  • matters involving criminality; and
  • claims under the Employment Rights Act 1996 (which renders void any agreement that would prevent an employee from having its case heard before an employment tribunal).

Can the arbitrability of a dispute be challenged?

The arbitrability of disputes can be challenged before the tribunal (under Section 31) or before the courts (under Sections 32 and 67).

Jurisdiction and competence-competence

Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?

English law upholds the principle of competence-competence. Section 30 of the act gives a tribunal the power to rule on whether there is a valid arbitration agreement, regardless of whether the tribunal has been properly constituted, and what matters have been submitted to arbitration in accordance with the arbitration agreement.

The tribunal's finding of jurisdiction can be challenged by any available arbitral process of appeal or review, or under the act. The act allows a party to request that the court make a preliminary finding on the substantive jurisdiction of the tribunal (Section 32(1)). A party may also challenge jurisdiction following a final award under Section 67; if the court hears such a challenge, it will review the question of jurisdiction de novo. A party can also seek to raise jurisdictional issues before a court of enforcement.

Arbitral proceedings

Starting an arbitration proceeding

What is needed to commence arbitration?

Parties may often agree to the application of institutional rules to their arbitration and these will usually address the commencement of an arbitration. To the extent that the parties have not agreed on a process, Section 14 of the Arbitration Act 1996 states as follows:

  • Where the arbitrator is named or designated by the parties in the arbitration agreement, the proceedings are commenced when one party serves a notice in writing to the other party, requiring them to submit the matter to the person named/designated.
  • Where the parties are to appoint the arbitrator, arbitration is commenced when one party serves on the other party notice requiring them to appoint an arbitrator or to agree to the appointment of an arbitrator.
  • Where the arbitrator or arbitrators are to be appointed by a third party, proceedings are commenced when one party gives notice in writing to that third party requesting it to make the appointment in respect of that matter.

Limitation periods

Are there any limitation periods for the commencement of arbitration?

There are no specific statutory limitation periods for the commencement of arbitration unless the parties have agreed to them. Where they have done so, the court may extend that period at its discretion (Section 12).

 Where the contract under which the dispute has arisen is governed by English law, normal limitation periods for commencing legal actions in the United Kingdom apply to arbitration proceedings (Section 13). For contractual claims this will usually be six years from the date of breach and for non-contractual (tortious) claims, this will generally be six years from the date on which the cause of action accrued (subject to specific rules for certain types of claim). 

Procedural rules

Are there any procedural rules that arbitrators must follow?

The act allows parties to determine the applicable procedural rules, which can be done by reference to the rules of a particular arbitral institution. The tribunal has wide-ranging powers and discretion to decide procedural and evidentiary matters under Section 34, subject to the parties' right to agree on any issue and the tribunal's general duties (Section 33).

Dissenting arbitrators

Are dissenting opinions permitted under the law of your jurisdiction?

Although there is no specific mention that dissenting opinions are permitted, Section 20(3) states that awards can be rendered by a majority. It is not uncommon for a dissenting arbitrator to issue a dissenting opinion to explain his or her reasons for disagreeing with the majority. 

Judicial assistance

Can local courts intervene in proceedings?

Although there is no specific mention that dissenting opinions are permitted, Section 20(3) states that awards can be rendered by a majority. It is not uncommon for a dissenting arbitrator to issue a dissenting opinion to explain his or her reasons for disagreeing with the majority. 

Can the local courts assist in choosing arbitrators?

The English courts do not generally assist in choosing arbitrators. They will usually become involved only where there is a failure of the appointment process or where there is no agreement as to the appointment process (Section 18). 

What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration? Can the courts compel parties to arbitrate? Can they issue subpoenas to third parties?

Where a respondent fails to participate in arbitration without showing sufficient cause, the tribunal may continue the proceedings without that party and without any written evidence or submissions from them. The tribunal may then make an award on the basis of the evidence before it (Section 41(4)).

A tribunal has no power to force a third party to attend a hearing. The court has power to secure the attendance of witnesses, provided that they are in the United Kingdom and the arbitration is being conducted within England, Wales or Northern Ireland (Section 43), but cannot compel other third parties which are not party to the arbitration agreement.

Third parties

In what instances can third parties be bound by an arbitration agreement or award?

Under English law a party needs to have agreed to arbitrate in order for that party to be bound by an arbitration agreement or award.

However, various English common law principles might bind a third party to an arbitration agreement, such as where an agent-principal relationship exists or where the original agreement has been assigned or novated to a third party or where rights or claims have been subrogated. Where non-parties to a contract have rights under it pursuant to the Contracts (Rights of Third Parties) Act 1999 and that contract contains an arbitration agreement, the third party may also be able, or be required, to arbitrate to enforce those rights. The group of companies doctrine does not form part of English law and group parties will not be recognised as parties to an arbitration agreement unless expressly agreed (eg, Peterson Farms Inc v C&M Farming Ltd [2004] EWHC 121 (Comm)). However, the corporate veil may be pierced to bind a third-party group company to an arbitration agreement where the existence of a separate corporate entity is a façade.

An arbitration award is binding on the parties to the arbitration and on any persons claiming through or under them. Depending on the parties' agreement, the award may also bind other parties, such as guarantors. 

Default language and seat

Unless agreed by the parties, what is the default language and location for arbitrations?

The Arbitration Act contains no default position on language or location. If the parties have not reached an agreement on these issues, the tribunal has the discretion to decide the language and the seat of the arbitration proceedings (Sections 3 and 34(2)(a) and (b)). 

Gathering evidence

How is evidence obtained by the tribunal?

In the absence of party agreement, the gathering of evidence falls within the tribunal's discretion under Sections 34, 43 and 44 of the act. Documentary evidence is usually obtained through a document production process but may also be provided by parties as annexes to their pleadings, witness statements and expert reports. Witness and expert evidence will usually be provided in the form of a written statement or report, followed by oral examination at a hearing. Subject to the parties' agreement to the contrary, the tribunal may also appoint its own legal or technical expert (Section 37). 

What kinds of evidence are acceptable?

The tribunal has broad discretion to decide issues of evidence including whether to apply strict rules of evidence (or any other rules) on admissibility, relevance or weight, as well as the time, manner and form in which such material should be exchanged and presented (Section 34(2)(f)). Some tribunals will apply or be guided by the International Bar Association's Rules on the Taking of Evidence in International Arbitration.

Confidentiality

Is confidentiality ensured?

There is no express provision on confidentiality in the act. Parties may provide for confidentiality in their arbitration agreements expressly, or may rely on the implied duty of confidentiality under English common law (see Ali Shipping Corporation v Shipyard Trogir ([1997] EWCA Civ 3054) and Emmott v Michael Wilson & Partners Ltd ([2008] 1 Lloyd’s Rep 616 (CA))). The parties to the arbitration and the tribunal are under implied duties to maintain the confidentiality of the hearing, documents generated and disclosed during the arbitral proceedings and the award. The implied duty is subject to certain exceptions (see below).

Can information in arbitral proceedings be disclosed in subsequent proceedings?

Information produced in or prepared for arbitral proceedings can be disclosed in subsequent proceedings only in certain limited circumstances. These include where:

  • consent to disclosure has been given;
  • matters in the arbitration are before the court (eg, for preliminary relief, enforcement or challenge);
  • disclosure is reasonably necessary to establish or protect a party's legal rights or legitimate interests; or
  • disclosure is necessary in the interests of justice.

These exceptions have developed through English common law.

Ethical codes

What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

The Solicitors’ Regulation Authority Handbook 2011 (including the SRA Code of Conduct 2011) binds solicitors in England and Wales, registered foreign lawyers and registered European lawyers.

Barristers of England and Wales are subject to the Code of Conduct of the Bar of England and Wales.

These do not apply to foreign lawyers involved in arbitral proceedings in the United Kingdom. However, certain prohibitions on fee arrangements may apply to foreign lawyers working on English-seated arbitrations.

Costs

Estimation & allocation

How are the costs of arbitration proceedings estimated and allocated?

In the absence of agreement between the parties, the tribunal can determine which costs of the arbitration are recoverable (Section 63(1)) and make an award allocating those costs (Section 64(1)). In advance of the parties incurring costs, the tribunal may also direct that recoverable costs be limited (Section 65).

The costs of the arbitration include:

  • the fees and expenses of the arbitrator or arbitrators (provided that they are reasonable or appropriate in the circumstances (Section 64(1));
  • the fees and expenses of any arbitration institution concerned; and
  • the legal and other costs of the parties (Section 59).

The general principle under English law is that costs should follow the event (ie, the successful party will be awarded its costs), unless this is not considered appropriate in the circumstances (Section 61(2)).

If the tribunal does not determine what costs (if any) are recoverable, any party to the arbitration may apply to the court for a costs determination (Section 63(4)).

There is no requirement for the parties to provide an estimate or budget of the anticipated costs at the outset of the arbitration proceedings.

Security for costs

Can the national court or tribunal order security for costs under the law in your jurisdiction?

Unless the parties agree otherwise, the tribunal may order a claimant to provide security for the costs of the arbitration under Section 38(3) of the act. If a claimant then fails to comply with such an order, the tribunal may make an award dismissing the claim (Section 41(6)).

While the court cannot order security for costs in the arbitration, it may order an applicant or appellant to provide security for costs for court proceedings relating to an arbitration, such as a challenge to an arbitral award (Section 70(5)).

The award

Requirements

What legal requirements are there for recognition of an award? Must reasons be given for the award? Does the award need to be reviewed by any other body?

 Section 52(1) of the Arbitration Act 1996 specifies that the parties are free to agree on the form of the award. If no agreement has been reached the award must:

  • be in writing;
  • be signed by all arbitrators (or those assenting to the award);
  • contain the reasons for it (unless it is an agreed award or the parties have agreed to dispense with reasons);
  • state the seat of the arbitration; and
  • state the date on which it is made (Sections 52(3) to (5)).

There is no obligation for an award to be reviewed by another body before it becomes final and binding, although this may be provided for or required under institutional arbitral rules.

Timeframe for delivery

Are there any time limits on delivery of the award?

There are no time limits contained in the act regarding the delivery of the award. However, parties may agree to a time limit in their arbitration agreement. On the application of the tribunal or by any party to the proceedings (having exhausted all available arbitral processes for obtaining an extension), the court may extend the time limit if it considers that a substantial injustice would otherwise result (Section 50(3)).

Remedies

Does the law impose limits on the available remedies? Are some remedies not enforceable by the court?

The parties are generally free to agree on the powers exercisable by the tribunal to grant remedies (Section 48). Unless the parties have agreed otherwise, the tribunal has the same powers as the English High Court and the county court (Section 105(1)) to order:

  • a party to do or refrain from doing anything;
  •  specific performance of a contract (other than a contract relating to land); or
  • rectification, setting aside or cancellation of a deed or other document.

For public policy reasons a tribunal does not have the power under English law to award punitive damages, nor is it likely that an English court would have the power to enforce such an award. A tribunal may also not order imprisonment or the payment of fines. 

What interim measures are available? Will local courts issue interim measures pending constitution of the tribunal?

Unless otherwise agreed by the parties, the tribunal has the power to grant a number of interim measures, including security for costs and measures to preserve evidence (Section 38). The parties may have agreed that the tribunal should have different or additional powers to grant interim measures, either in their arbitration agreement or by reference to institutional arbitration rules. Interim measures may be available under institutional arbitration rules through the appointment of an emergency arbitrator before the tribunal is constituted.

The court is also able to grant interim measures in support of arbitration (Section 44) and has the same power of making orders about the matters listed in Section 44 as it has for the purposes of legal proceedings. Those matters include, but are not limited to, the taking of evidence of witnesses, the preservation of evidence and the granting of an interim injunction. While the court may still be restricted from granting an anti-suit injunction in respect of court proceedings brought in another EU member state following the Recast Brussels Regulation, the courts remain able to restrain proceedings brought in courts outside EU or European Free Trade Agreement countries in violation of an arbitration agreement, even if arbitration proceedings have not yet been commenced.

However, the court can order interim measures only where the tribunal has no power (eg, it has not yet been constituted or where the tribunal lacks the necessary power to grant that relief) or is unable to act effectively. Assuming this test is met, the court may give ex parte relief where the matter is one of urgency. In the absence of urgency, the court will require the permission of the tribunal or the written consent of the parties.

There is a question mark over the impact of emergency and expedited provisions in institutional rules on the ability of the English court to order interim measures. In Gerald Metals SA v Timis ([2016] EWHC 2327 (Ch)), the English court held that where there is sufficient time for an applicant to obtain relief from an expedited tribunal or emergency arbitrator under the rules, the court has no power to grant urgent relief. In that case, it was held that the court did not have power to grant the freezing injunction requested by the applicant because the applicant's request for an emergency arbitrator under the applicable institutional arbitration rules (the London Court of International Arbitration Rules) had already been considered and dismissed by the London Court of International Arbitration.

Interest

Can interest be awarded?

Subject to an agreement between the parties, the tribunal may award simple or compound interest from such dates, at such rates and with such rests as it considers to meet the justice of the case (Section 49) both up to the date of the award and from the date of the award to the date of payment.

At what rate?

The rate is at the tribunal's discretion, subject to any agreement of the parties to the contrary (Section 49).

Finality

Is the award final and binding?

Unless otherwise agreed by the parties, an award is final and binding on both the parties and any persons claiming through or under them (Section 58(1)). This does not affect the right of a person to challenge the award by any available arbitral process of appeal or review, or in accordance with the act (Section 58(2)(a)). 

What if there are any mistakes?

Subject to any agreement of the parties to the contrary, if there are mistakes in an award, the tribunal may, on its own initiative or on the application of a party, correct the award so as to remove any clerical mistake or error arising from an accidental slip or omission or clarify or remove any ambiguity (Section 57(3)(a)). The tribunal is also able to make an additional award in relation to any claim presented to it which was not dealt with in the original award. All the parties must be given a reasonable opportunity to make representations to the tribunal (Section 57(3)(b)). There are a number of specific time limits (subject to the parties agreeing a longer period):

  • Any application for a correction must be made within 28 days of the date of an award or such longer period as the parties may agree (Section 57(4)) and any correction of an award must then be made within 28 days of the date on which the tribunal receives the application.
  • Where the correction is made by the tribunal on its own initiative, the correction must be made within 28 days of the date of the award.
  • Any additional award must be made within 56 days of the date of the original award (Section 57(6)).

Any correction of an award shall form part of the award (Section 57(7)).

Can the parties exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?

Sections 67 and 68 of the act provide respectively for challenge to an award for want of substantive jurisdiction and for procedural irregularity. These are mandatory rights which cannot be excluded. Section 69 provides for appeal on a point of English law. This right is non-mandatory and may be excluded by agreement of the parties. Many arbitral rules expressly exclude all non-mandatory rights of appeal. 

Appeal

What is the procedure for challenging awards?

A Section 67 or 68 challenge or an appeal under Section 69 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 (Section 70(3)). However, the applicant or appellant must first have exhausted any available arbitration process of appeal or review and any available recourse for correction of the award (Section 70(2)).

To begin a challenge, the applicant must file an arbitration claim form. Part 62 of the English Rules of Civil Procedure will apply. 

On what grounds can parties appeal an award?

A party may apply to the court to challenge an award on the grounds that:

  • the tribunal lacked substantive jurisdiction (Section 67); or
  • there was a serious irregularity affecting the tribunal, the proceedings or the award (Section 68).

Section 68 provides an exhaustive list of irregularities and in each case the court must be satisfied that the irregularity has caused or will cause substantial injustice to the applicant.

A party may also seek to appeal an award on the grounds that the tribunal made an error on a point of English law (Section 69).

Both Sections 67 and 68 are mandatory (they cannot be excluded by party agreement), but Section 69 is non-mandatory. Many institutional arbitration rules expressly exclude all non-mandatory rights of appeal.

Enforcement

What steps can be taken to enforce the award if there is a failure to comply?

The party seeking to enforce the award will apply to the court to enter a judgment or order of the court on the same terms as the award (under Sections 66 or 101 of the act (for awards made in the territory of another state which is a party to the New York Convention 1958)). A party may also be able to enforce an arbitral award at common law.

Enforcement of the award can then take place using all means available to a court under English law, such as enforcement against goods or assets or third-party debt orders. 

Can awards be enforced in local courts?

Yes, the English courts have a pro-enforcement stance and both domestic and foreign arbitral awards can be enforced in the English courts. 

How enforceable is the award internationally?

Since the United Kingdom is a signatory to the New York Convention and the Geneva Convention, awards made in this jurisdiction are internationally enforceable in jurisdictions which are a party to those conventions. As of March 10 2017, there were 157 parties to the New York Convention. A party seeking to enforce an arbitral award under the convention will need to comply with the formal requirements set out in it, together with any additional local procedural requirements.

 Arbitral awards made in the jurisdiction may also be enforceable in countries which are not signatories to these conventions where domestic law provides or allows for enforcement.

To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

By entering into an arbitration agreement (and unless the parties have agreed otherwise), under English law, a state or state entity waives immunity from the jurisdiction of the English court in respect of proceedings which relate to the arbitration (Section 9 of the State Immunity Act 1978). However, a state or state entity and its assets will be immune from enforcement of an arbitral award, unless the state or state entity has consented to such relief or the property is being used or intended to be used for commercial purposes (Sections 13(2) to (4)). 

Are there any other bases on which an award may be challenged, and if so, by what?

There are no other bases on which to challenge an award other than those set out above.

However, certain grounds may be raised in defence of an application for recognition and enforcement of the award:

  • A non-New York Convention award will not be enforced under Section 66 of the Arbitration Act where the tribunal lacked the substantive jurisdiction to make the award. The English court may also refuse enforcement under Section 66 on grounds similar to those which may be relied upon in defence of an application for recognition and enforcement of a New York Convention award (found in Section 103). 
  • Section 103 contains an exhaustive list of the grounds for refusing recognition or enforcement of a New York Convention award, replicating the language of the New York Convention.
  • Section 37 of the Arbitration Act 1950 sets out the grounds on which recognition and enforcement of a Geneva Convention award can be refused.
  • An award being enforced at common law may not be enforced where the validity of the award is in doubt.

How enforceable are foreign arbitral awards in your jurisdiction?

The English courts have a pro-enforcement stance and will refuse to enforce arbitral awards only rarely. As a signatory to the New York Convention, the courts recognise foreign arbitration awards made in the territory of a state that is a party to the New York Convention in accordance with Section 101 of the act, but awards made in the territory of non-signatory states may also be enforced.

Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?

The English courts have the discretion to enforce an award that has been set aside or suspended by the courts in the seat of arbitration (Section 103(2)(f); see also Yukos Capital SARL v OJSC Rosneft Oil Company ([2014] EWHC 2188 (Comm))). The English courts will question a foreign court’s decision on its own law and/or to undermine a foreign court’s judgment for bias or unfairness where there is compelling evidence (Malicorp Ltd v Government of the Arab Republic of Egypt ([2015] EWHC 361 (Comm))).

Third-party funding

Rules and restrictions

Are there rules or restrictions on third-party funders?

Third-party funding of arbitration is permitted. Most third-party funders adhere to the Code of Conduct for Litigation Funders, which sets out standards of best practice and behaviour. 

Class-action or group arbitration

Concept

Is there a concept in your jurisdiction providing for class-action arbitration or group arbitration? If so, are there any limitations to the arbitrability of such claims or requirements that must be met before such claims may be arbitrated?

The concept of class action arbitration does not currently exist in England and Wales but there is no legal barrier to the design of procedures which could facilitate class-action arbitration.

Hot topics

Emerging trends

Are there any hot topics or trends emerging in arbitration in your jurisdiction?

Arbitration is well established in the United Kingdom, as is the court's pro-arbitration stance. In terms of trends, the uncertainty surrounding the United Kingdom's exit from the European Union may lead to an increase in the number of parties choosing arbitration for their contracts.