By Jonathan Hew
Lord Thomas has delivered a speech calling for the relationship between arbitration and the courts in England and Wales to be rebalanced. This has elicited strong responses from prominent members of the arbitration community, including Lord Saville and Sir Bernard Eder.
The Judges’ Arguments
Lord Thomas emphasised that publicly-debated court decisions are important for the continuous development of English commercial law. His concern was that this development has been stifled by the diversion of claims from the courts to arbitration, the diminishing number of appeals that come before the courts and arbitration’s lack of openness.
Lord Saville and Sir Bernard Eder noted the importance of developing English commercial law. However, neither thought that international parties should be obliged to finance that development by subjecting arbitrations to further recourse to the courts. This is because parties choose to arbitrate and, in many cases, specifically exclude appeals to the courts. To ignore these expressions of party autonomy could drive arbitration away from London.
Arbitration and the courts are properly to be regarded as co-ordinated rather than rival processes. Clearly then, the two systems should and will continue to co-exist. The key question that arises is whether a rebalancing of their relationship would be in this jurisdiction’s best interests.
The judges’ comments were extra-curial and therefore are not binding. Nevertheless, they give rise to a number of practical points:
- It has been reported that the Law Commission might review the Arbitration Act 1996 in the near future. If this comes to pass, it will be interesting to see what (if any) amendments are recommended since they could affect the relationship between arbitration and the courts. Section 69 of the Act – which contains parties’ rights of appeal to the court on points of law arising from an arbitral award – is likely to come under particular scrutiny. The judges disagreed on whether this provision remains fit for purpose.
- Section 45 of the Act enables parties to ask the court to determine questions of law that arise after the commencement of arbitral proceedings (but before the award). Lord Thomas encouraged greater use of this provision, although it is unclear whether parties will bite.
- Following the introduction of initiatives such as the Financial List and the Market Test Case Scheme, the judges encouraged further development of the courts’ processes to increase their attractiveness as a means of dispute resolution. It remains to be seen what the courts have in store.
This post was prepared with the assistance of Eleanor Scogings in the London office of Latham & Watkins.