As we discussed in our blogpost last year, in March 2016, England’s Lord Chief Justice, Lord Thomas, delivered a much debated speech in which he argued that arbitration is impeding the development of English common law. Lord Thomas’ proposed solution to this was a suggestion that section 69 of the Arbitration 1996 Act (“s.69“), which currently provides only a very limited scope for the courts to exercise their jurisdiction over arbitral processes, be reformed.
In what can be seen as a response to some of the criticism received from his March 2016 speech, on 6 April 2017, Lord Thomas delivered a speech at the National Judges College in Beijing (the “Beijing Speech“) in which he stressed the “complementary” relationship between the courts and arbitral institutions. Lord Thomas stated that when parties enter into an arbitration agreement, they do so with the knowledge that court involvement may be necessary to enforce the award or support the arbitration. As such, Lord Thomas posited that “a successful arbitral centre… need[s] strong Commercial Courts to ensure that arbitration can function effectively.”
Lord Thomas argued that a “complementary” relationship between courts and arbitral centres based on “a real exchange of practice” helps them to learn from each other strengthening the different forms of dispute resolution and giving parties more choice. In his Beijing Speech, Lord Thomas stated that “[t]he position of every Commercial Court towards arbitration can be summarised as “Maximum support. Minimum interference”.
In a reference to his March 2016 speech, Lord Thomas reiterated his desire to consider a “rebalancing” of the relationship of “collaborative competition” between the courts and arbitral centres in order to give the courts more scope to review points of law. However, this time, Lord Thomas stressed that “the key point is the balance between respect for party choice and the wider state and public interest in ensuring the law is developed and keeps pace with change“. By way of example, Lord Thomas noted that parties in certain industries, such as shipping and commodities, have “valued” the ability to bring appeals from arbitration to the courts in order “to clarify points that have a wider importance to them than in the immediate arbitration“.
However, Lord Thomas acknowledged that “delay during an arbitration is the commonest weapon used to frustrate an arbitration and prevent an award being made” and that such delay, for example through one party making a tactical appeal to court, must be guarded against.
After his speech in March 2016, some commentators suggested that Lord Thomas damaged London’s attractiveness as an arbitration market. By contrast, in his Beijing Speech, Lord Thomas dropped any outright suggestion of reforming s.69 and promoted London’s ability to support arbitration. Lord Thomas told his audience that London offers a range of strong arbitral centres and that the courts provide their support for arbitration “far more speedily” than elsewhere.
In our previous blogpost we concluded that “[t]he relative states of arbitration and litigation in the UK should not be seen as a zero sum game: each needs a strong other.” Did Lord Thomas read this? His view that the two systems complement each other is reassuring in light of his March 2016 speech. The jury is still out on reform of s.69 but, given the much reduced comment on that subject in the Beijing Speech and the lack of any consultation on the subject in the interim period, it does not look like any change is due in this regard.
In the last section of the Beijing Speech, Lord Thomas spoke about the importance of States working together to “keep the law uniform and in pace with commercial and market change.” In this respect, Lord Thomas publicised the establishment of the Standing International Forum of Commercial Courts, which held its first meeting in London on 5 May 2017, with the senior judiciary of commercial courts from five continents represented. In a press release after the meeting, it was noted that one of the subjects discussed was “the relationship between commercial courts, arbitration and meditation“. The press release stated that there was a consensus that “[a]s many arbitrators gladly acknowledge, experienced commercial courts help make arbitration work.” The debate continues.